Inchausti v Yulo
for payment to APT.However, petitioners allegedly refused to apply the sum to
This suit is brought for the recovery of a certain sum of money, the balance of a current account
opened by the firm of Inchausti & Company with Teodor Yulo and after his death continued by
Gregorio Yulo as principal representative of his children. On Aug.12, 1909, Gregorio Yulo, in
representation of his 3 siblings, executed a notarial instrument, ratifying all the contents of the
prior document of Jan.26, 1908, severally and joint acknowledged their indebtedness for
P253,445.42, 10 % per annum, 5 installments. Plaintiff brought an action against Gregorio for
the payment of the said balance due. But on May 12, 1911, 3 siblings executed another
instrument in recognition of the debt, reduced to P225,000, interest reduced to 6% per annum,
installments increased to 8.
The only question indicated in the decision of the inferior court involves, however, these others:
First, whether the plaintiff can sue Gregorio Yulo alone, there being other obligors; second, if so,
whether it lost this right by the fact of its having agreed with the other obligors in the reduction of
the debt, the proroguing of the obligation and the extension of the time for payment, in
accordance with the instrument of May 12, 1911; third, whether this contract with the said three
obligors constitutes a novation of that of August 12, 1909, entered into with the six debtors who
assumed the payment of two hundred fifty-three thousand and some odd pesos, the subject
matter of the suit; and fourth, if not so, whether it does have any effect at all in the action
brought, and in this present suit.
FIRST ISSUE
The debtors having obligated themselves in solidum, the creditor can bring its action in
toto against any one of them, inasmuch as this was surely its purpose in demanding that the
obligation contracted in its favor should be solidary having in mind the principle of law that,
"when the obligation is constituted as a conjoint and solidary obligation each one of the debtors
is bound to perform in full the undertaking which is the subject matter of such obligation." (Civil
Code, articles 1137 and 1144.)
And even though the creditor may have stipulated with some of the solidary debtors diverse
installments and conditions, as in this case, Inchausti & Company did with its debtors Manuel,
Francisco, and Carmen Yulo through the instrument of May 12, 1911, this does not lead to the
ISSUES:
conclusion that the solidarity stipulated in the instrument of August 12, 1909 is broken, as we
already know the law provides that "solidarity may exist even though the debtors are not bound
in the same manner and for the same periods and under the same conditions." ( Ibid, article
1140.) Whereby the second point is resolved.
Lafarge Cement v CCC
FACTS:
HELD
On August 11, 1998, a letter of intent was executed by both parties, Lafarge and
CCC. Lafarge agreed to purchase the cement business of CCC. On October 21,
1998, they entered into a Sale and Purchase Agreement (SPA). The petiitioners,
at the time of such transactions were aware of the pending case of CCC with the
Supreme Court entitled Asset Privatization Trust (APT) v. Court of Appeals and
Continental Cement Corporation.
In anticipation of the liability that the High Tribunal might adjudge against CCC,
the parties, under Clause 2 (c) of the SPA, allegedly agreed to retain from the
purchase price a portion of the contract price in the amount of P117,020,846.84
-- the equivalent of US$2,799,140. This amount was to be deposited in an
interest-bearing account in the First National City Bank of New York (Citibank)
the payment to APT, after the finality of the judgment in the case of CCC. Fearful
that nonpayment to APT would result in the foreclosure, of several properties,
CCC filed before the RTC a Complaint with Application for Preliminary
Attachment" against petitioners. The Complaint prayed, that petitioners be
directed to pay the "APT Retained Amount" referred to in Clause 2 (c) of the
SPA.
Petitioners moved to dismiss the Complaint on the ground that it violated the
prohibition on forum-shopping. Respondent CCC had allegedly made the same
claim it was raising in another action, which involved the same parties and
which was filed earlier before the International Chamber of Commerce. After the
trial court denied the Motion to Dismiss in its November 14, 2000 Order,
petitioners elevated the matter before the Court of Appeals .
In the meantime, to avoid being in default and without prejudice to the outcome
of their appeal, petitioners filed their Answer and Compulsory Counterclaims ad
Cautelam before the trial court. In their Answer, they denied the allegations in
the Complaint. They prayed -- by way of compulsory counterclaims against
Respondent CCC, its majority stockholder and president Gregory T. Lim, and its
corporate secretary Anthony A. Mariano -- for the sums of (a) P2,700,000 each
as actual damages, (b) P100,000,000 each as exemplary damages, (c)
P100,000,000 each as moral damages, and (d) P5,000,000 each as attorney's
fees plus costs of suit.
Petitioners alleged that CCC, through Lim and Mariano, had filed the "baseless"
Complaint andprocured the Writ of Attachment in bad faith. Relying on this
Court's pronouncement in Sapugay v. CA,5 petitioners prayed that both Lim and
Mariano be held "jointly and solidarily" liable with Respondent CCC.On behalf of
Lim and Mariano who had yet to file any responsive pleading, CCC moved to
dismiss petitioners' compulsory counterclaims on grounds that essentially
constituted the very issues for resolution in the instant Petition.
RTC ruled that the counterclaims of the petitioners against Lim and Mariano
were not compulsory, that the ruling in Sapugay was not applicable and that the
petitioners answer with counterclaims violated the procedural rules on joinder
of actions.
1. Whether or not the counterclaims of the petitioners against Lim and Mariano
were not compulsory.
2. Whether or not the ruling in Sapugay was not applicable.
3. Whether or not the petitioners answer with counterclaims violated the
procedural rules on joinder of actions.
4. Whether or not CCC has the personality to move to dismiss the compulsory
counter claims on behalf of Lim and Mariano.
Obligations may be classified as either joint or solidary.
o Joint or jointly or conjoint means mancum or mancomunada or pro
rata obligation; on the other hand
o solidary obligations may be used interchangeably with joint and several or
several.
 o Thus, petitioners usage of the term joint and solidary is confusing and
ambiguous.
The ambiguity in petitioners counterclaims notwithstanding, respondents liability, if
proven, is solidary. This characterization finds basis in Article 1207 of the Civil Code,
which provides that obligations are generally considered joint, except when
otherwise expressly stated or when the law or the nature of the obligation requires
solidarity. However, obligations arising from tort are, by their nature, always
solidary. We have assiduously maintained this legal principle as early as 1912
in Worcester v. Ocampo in which we held
o x x x The difficulty in the contention of the appellants is that they fail to
recognize that the basis of the present action is tort. They fail to
recognize the universal doctrine that each joint tort feasor is not only
individually liable for the tort in which he participates, but is also
jointly liable with his tort feasors. x x
It may be stated as a general rule that joint tort feasors are all the persons who
command, instigate, promote, encourage, advise, countenance, cooperate in, aid or
abet the commission of a tort, or who approve of it after it is done, if done for their
benefit. They are each liable as principals, to the same extent and in the same
manner as if they had performed the wrongful act themselves. x x x
Joint tort feasors are jointly and severally liable for the tort which they commit.
The persons injured may sue all of them or any number less than all. Each is liable for
the whole damages caused by all, and all together are jointly liable for the whole
damage.
o It is no defense for one sued alone, that the others who participated in
the wrongful act are not joined with him as defendants; nor is it any
excuse for him that his participation in the tort was insignificant as
compared to that of the others. x x xJoint tort feasors are not
liable pro rata.
o The damages cannot be apportioned among them, except among
themselves. They cannot insist upon an apportionment, for the
purpose of each paying an aliquot part. They are jointly and severally
liable for the whole amount. x x x
o A payment in full for the damage done, by one of the joint tort feasors, of
course satisfies any claim which might exist against the others. There can
be but satisfaction. The release of one of the joint tort feasors by agreement
generally operates to discharge all. x x x
In a joint obligation, each obligor answers only for a part of the whole liability; in
a solidary or joint and several obligation, the relationship between the active
and the passive subjects is so close that each of them must comply with or
demand the fulfillment of the whole obligation.
The fact that the liability sought against the CCC is for specific performance and tort,
while that sought against the individual respondents is based solely on tort does not
negate the solidary nature of their liability for tortuous acts alleged in the
counterclaims.
o Article 1211 of the Civil Code is explicit on this point: Solidarity may exist
although the creditors and the debtors may not be bound in the same
manner and by the same periods and conditions.
The solidary character of respondents alleged liability is precisely why credence
cannot be given to petitioners assertion. According to such assertion, Respondent
CCC cannot move to dismiss the counterclaims on grounds that pertain solely to its
individual co-debtors. In cases filed by the creditor, a solidary debtor may invoke
defenses arising from the nature of the obligation, from circumstances personal to it,
or even from those personal to its co-debtors. Article 1222 of the Civil Code provides:
A solidary debtor may, in actions filed by the creditor, avail itself of all defenses which
are derived from the nature of the obligation and of those which are personal to him,
or pertain to his own share. With respect to those which personally belong to the
others, he may avail himself thereof only as regards that part of the debt for
which the latter are responsible. (Emphasis supplied)
The act of Respondent CCC as a solidary debtor -- that of filing a motion to dismiss
the counterclaim on grounds that pertain only to its individual co-debtors -- is therefore
allowed.
However, a perusal of its Motion to Dismiss the counterclaims shows that Respondent
CCC filed it on behalf of Co-respondents Lim and Mariano; it did not pray that the
counterclaim against it be dismissed. Be that as it may, Respondent CCC cannot be
declared in default. Jurisprudence teaches that if the issues raised in the compulsory
counterclaim are so intertwined with the allegations in the complaint, such issues are
deemed automatically joined.[33] Counterclaims that are only for damages and
attorneys fees and that arise from the filing of the complaint shall be considered as
special defenses and need not be answered.[3
Inciong v CA
Petitioner also argues that the dismissal of the complaint against Naybe, the principal
debtor, and against Pantanosas, his co-maker, constituted a release of his obligation,
especially because the dismissal of the case against Pantanosas was upon the
motion of private respondent itself. He cites as basis for his argument, Article 2080 of
the Civil Code which provides that:
"The guarantors, even though they be solidary, are released from their
obligation whenever by some act of the creditor, they cannot be subrogated to
the rights, mortgages, and preferences of the latter."
It is to be noted, however, that petitioner signed the promissory note as a solidary co-
maker and not as a guarantor. This is patent even from the first sentence of the
promissory note which states as follows:
"Ninety one (91) days after date, for value received, I/we, JOINTLY and SEVERALLY promise to I, ____, as the co-maker of the above-quoted loan, have fully understood the contents of this
pay to the PHILIPPINE BANK OF COMMUNICATIONS at its office in the City of Cagayan de Promissory Note for Short-Term Loan. That as Co-maker, I am fully aware that I shall be jointly
Oro, Philippines the sum of FIFTY THOUSAND ONLY (P50,000. 00) Pesos, Philippine Currency, and severally or solidarily liable with the above principal maker of this note.
together with interest x x x at the rate of SIXTEEN (16) per cent per annum until fully paid."
In case of breach of contract or non-payment of the loan, the lender may take any of the
following options:
A solidary or joint and several obligation is one in which each debtor is liable 1. Proceed against the principal debtor
for the entire obligation, and each creditor is entitled to demand the whole 2. Proceed directly against the co-maker even without trying to collect from the
obligation. principal debtor.
On the other hand, Article 2047 of the Civil Code states:"By guaranty a person, 3. Proceed simultaneously against both the principal and the co-maker.
called the GUARANTOR, binds himself to the creditor to fulfill the obligation of
the principal debtor in case the latter should fail to do so. Of course, the co-maker may also go against the principal debtor for reimbursement,
If a person binds himself solidarily with the principal debtor, the provisions of but this is not an excuse against the lender.
Section 4, Chapter 3, Title I of this Book shall be observed, In such a case the A co-maker
contract is called a suretyship." (Italics supplied.) o generally treated as a surety.
While a guarantor may bind himself solidarily with the principal debtor, the o In a contract of suretyship, one lends his credit by joining in the principal
liability of a guarantor is different from that of a solidary debtor. debtors obligation, so as to render himself directly and primarily
Thus, Tolentino explains: responsible with the principal debtor.
o "A guarantor who binds himself in solidum with the principal debtor under o A surety is bound equally and absolutely with the principal, and is deemed
the provisions of the second paragraph does not become a solidary co- an original promisor and debtor from the beginning. This is because in
debtor to all intents and purposes. There is a difference between a solidary suretyship there is but one contract, and the surety is bound by the same
co-debtor, and a fiador in solidum (surety). The later, outside of the liability agreement which binds the principal.
he assumes to pay the debt before the property of the principal debtor has
In some instances, the co-maker would argue that he/she is merely a guarantor, not a
been exhausted, retains all the other rights, actions and benefits which
surety. The two concepts, of course, are different.
pertain to him by reason of the fiansa; while a solidary co-debtor has no
other rights than those bestowed upon him in Section 4, Chapter 3, title I,
Book IV of the Civil Code.
Section 4, Chapter 3, Title I, Book IV of the Civil Code states the law on joint and
several obligations. Under Art. 1207 thereof, when there are two or more debtors in
Surety Guarantor
one and the same obligation, the presumption is that the obligation is joint so that
each of the debtors is liable only for a proportionate part of the debt. There is a
solidarity liability only when the obligation expressly so states, when the law so an insurer of the debt an insurer of the solvency of the debtor.
provides or when the nature of the obligation so requires.
Because the promissory note involved in this case expressly states that the three is an undertaking that the debt shall be paid while a guarantor agrees that the
signatories therein are jointly and severally liable, any one, some or all of them may creditor, after proceeding against the
be proceeded against for the entire obligation [20] The choice is left to the solidary a surety promises to pay the principals debt principal, may proceed against the
creditor to determine against whom he will enforce collection. if the principal will not pay guarantor if the principal is unable to
Consequently, the dismissal of the case against Judge Pontanosas may not be pay.
deemed as having discharged petitioner from liability as well. As regards Naybe, surety binds himself to perform if the does not contract that the principal will
suffice it to say that the court never acquired jurisdiction over him. Petitioner, principal does not, without regard to his pay, but simply that he is able to do so
therefore, may only have recourse against his co-makers, as provided by law ability to do so.
guarantor contracts to pay if, by the use
of due diligence, the debt cannot be
a surety undertakes directly for the payment
A co-maker may be asked to sign on a space provided on the main loan agreement. In made out of the principal debtor.
and is so responsible at once if the principal
other instances, the co-maker is asked to sign a promissory note that looks like this: debtor makes default