Credit Transactions
38 Philippine National Bank v. Macapanga Producers, Inc., 99 Phil. 180, May 23, 1956
FACTS:
On December 26, 1952, Luzon Sugar Company leased a sugar mill located at
Calumpit to Macapanga Producers beginning with the crop year 1952-53 at a minimum
annual royalty of P50,000, which shall be a lien on the sugar produced by the lessee and shall
be paid before sale or removal of sugar from warehouse on December 26, 1952.
Macapanga Producers, as principal, and Plaridel Surety & Insurance, as surety,
executed and delivered to Plaintiff a performance bond in the amount of P50,000 for the full
and faithful compliance by Macapanga Producers of all terms and conditions of the lease.
On December 21, 1953, Luzon Sugar assigned to Plaintiff the payment due from
Macapanga Producers in the sum of P50,000, representing royalty for the lease of the sugar
mill for the crop year 1952-53.
Plaintiff had demanded from Macapanga Producers payment of said royalty of
P50,000, but the latter has refused to make payment and Plaintiff also made demand on
Plaridel Surety & Insurance for said payment, but the latter refused.
Plaridel Surety moved to dismiss the complaint for failure to state cause of action,
alleging that it is a guarantor and as such is responsible only if Macapanga Producers has no
property or assets to pay its obligation as lessee. Plaintiff opposed the motion calling
attention to the provision of the performance bond in which Macapanga Producers and
Plaridel Surety, agreed to be held and firmly bound jointly and severally unto Luzon Sugar in
the penal sum of P50,000.” Plaintiff contended that, as Plaridel Surety & Insurance bound
itself solidarily with Macapanga Producers, it became a surety in accordance with Article
2047, par. 2 of the Civil Code.
The trial court dismissed the complaint against Plaridel Surety & Insurance and
subsequently denied a motion to reconsider the order of dismissal.
ISSUES:
1) Whether the Assignment without the Surety’s consent discharged it of its
obligation
2) Whether the Principal’s properties should be exhausted first before Plaridel Surety
may be held liable
RULING:
1) NO. It is also argued on behalf of Plaridel Surety and Insurance that as it was not a
party to the assignment, and same was made without its consent, it is, therefore, discharged
from its obligation. An assignment without knowledge or consent of the surety is not a
material alteration of the contract, sufficient to discharge the surety. There is, besides, no
allegation in the complaint, or provision in the deed of assignment, or any change therein that
makes the obligation of Plaridel Surety & Insurance more onerous than that stated in the
performance bond. Such assignment did not, therefore, release the Plaridel Surety &
Insurance from its obligation under the surety bond.
Credit Transactions
2) NO. ART. 2047. If a person binds himself solidarily with the principal debtor, the
provisions of section 4, Charter 3, Title I of this Book shall be observed. In such case the
contract is called a suretyship.
ART. 1144. A creditor may sue any of the joint debtor or all of them simultaneously.
It is lastly contended that as Plaintiff or the lessor had a lien in the sugar produced,
and failed to proceed against it or enforce such lien, Plaridel Surety & Insurance was released
thereby. There is no allegation to this effect in the complaint, that lessor or Plaintiff ever had
possession or control of the sugar, or ever waived or released the lien
thereon. Appellee cannot raise the issue in a motion to dismiss.