Sureties and Solidary Obligation

Category: Obligations and Contracts

The use of “SURETIES” 13 times does not sufficiently establish that the obligation is solidary in nature.

The term “surety” has a specific meaning under the Civil Code. Article 2047 provides the statutory definition of a surety agreement, that by guaranty a person, 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.

If a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed. In such case the contract is called a suretyship.

As provided in Article 2047, in a surety agreement the surety undertakes to be bound solidarily with the principal debtor. Thus, a surety agreement is an ancillary contract as it presupposes the existence of a principal contract. The argument rests solely on the solidary nature of the obligation of the surety under Article 2047. In tandem with the nomenclature “SURETIES”, this argument can only be viable if the obligations established in the Undertaking do partake of the nature of suretyship as defined by Article 2047, NCC, otherwise, the liability is joint. (Escaño, et al. v. Ortigas, Jr., G.R. No. 151953, June 29, 2007, Tinga, J).