Wise & Co. Vs Tanglao

8/12/2015
PHILIPPINE REPORTS ANNOTATED VOLUME 063
[No. 42518. August 29, 1936]

WlSE & Co., INC., plaintiff and appellee, vs. DIONISIO P.
TANGLAO, defendant and appellant.
1. SURETYSHIP AND GUARANTY; THE SURETYSHIP
MUST BE EXPRESS.An obligation of suretyship, under
the law, must be express. It is not inferable from any of
the clauses of the contract that T became D's surety for
the payment of the latter's indebtedness to the plaintiff.
Therefore, T could not have con
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VOL. 63, AUGUST 29, 1936
373
Wise & Co. vs. Tanglao
tracted any personal responsibility for the payment of said

debt.
2. ID.; BENEFIT OF EXHAUSTION.Granting that
defendant T may be considered as a surety under the
contract, even then the action against him does not lie on
the ground that all the legal remedies against the debtor
have not previously been exhausted (art. 1830, Civil Code,
and decision of the Supreme Court of Spain of March 2,
1891).
APPEAL from a judgment of the Court of First Instance of

Manila. Sison, J.
The facts are stated in the opinion of the court.
The appellant in his own behalf.
Franco & Reinoso for appellee.
AVANCEA, C. J.:
In the Court of First Instance of Manila, Wise & Co.
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instituted civil case No. 41129 against Cornelio C. David

for the recovery of a certain sum of money. David was an
agent of Wise & Co. and the amount claimed from him was
the result of a liquidation of accounts showing that he was
indebted in said amount. In said case Wise & Co. asked
and obtained a preliminary attachment of David's property.
To avoid the execution of said attachment, David succeeded
in having his Attorney Tanglao execute on January 16,
1932, a power of attorney (Exhibit A) in his favor, with the
following clause:
"To sign for me as guarantor for himself in his indebtedness to
Wise & Company of Manila, which indebtedness appears in civil
case No. 41129, of the Court of First Instance of Manila, and to
mortgage my lot (No. 517F of the subdivision plan Psd20, being
a portion of lot No. 517 of the cadastral survey of Angeles, G. L. R.
O. Cad. Rec. No. 124), to guarantee the said obligations to the
Wise & Company, Inc., of Manila."
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374
PHILIPPINE REPORTS ANNOTATED

On the 18th of said month David subscribed and on the 23d

thereof, filed in court, the following document (Exhibit B) :
"COMPROMISE
"Come now the parties, plaintiff by the undersigned attorneys and
defendant in his own behalf and respectfully state:
"I. That defendant confesses judgment for the sum of six
hundred forty pesos (P640), payable at the rate of eighty
pesos (P80) per month, the first payment to be made on
February 15, 1932 and successively thereafter until the
full amount is paid; that plaintiff accepts this stipulation.
"II. That as security for the payment of the said sum of P640,
defendant binds in favor of, and pledges to the plaintiff,
the following real properties:
"1. House of light materials described under tax declaration
No. 9650 of the municipality of Angeles, Province of
Pampanga, assessed at P320.
"2. Accesoria apartments with a ground floor of 180 sq. m.
with the first story of cement and galvanized of iron
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roofing located on the lot belonging to Mariano Tablante

Geronimo, said accesoria is described under tax
declaration No. 11164 of the municipality of Angeles,
Pampanga, assessed at P800.
"3. Parcel of land described under Transfer Certificate of Title
No. 2307 of the Province of Pampanga recorded in the
name of Dionisio Tanglao of which defendant herein holds
a special power of attorney to pledge the same in favor of
Wise & Co., Inc., as a guarantee for the payment of the
claim against him in the above entitled cause. The said
parcel of land is bounded as follows: NE. lot No. 517 'Part'
de Narciso Garcia; SE. Calle Rizal; SW. lot No. 517 'Part'
de Bernardino Tiongco; NW. lot No. 508 de Clemente
Dayrit; containing 431 sq. m. and described in tax
declaration No. 11977 of the municipality of Angeles,
Pampanga, assessed at P423
.
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VOL. 63, AUGUST 29, 1936
375

"That this guaranty is attached to the properties above mentioned
as first lien and for this reason the parties agree to register this
compromise with the Register of Deeds of Pampanga, said lien to
be cancelled only on the payment of the full amount of the
judgment in this ,case.
"Wherefore, the parties pray that the above compromise be
admitted and that an order issue requiring the Register of Deeds
of Pampanga to register this compromise previous to the filing of
the legal fees."
David paid the sum of P343.47 to Wise & Co., on account of

the P640 which he bound himself to pay under Exhibit B,
leaving an unpaid balance of P296.53.
Wise & Co. now institutes this case against Tanglao for
the recovery of said balance of P296.53.
There is no doubt that under Exhibit A, Tanglao
empowered David, in his name, to enter into a contract of
suretyship and a contract of mortgage of the property
described in the document, with Wise & Co. However,
David used said power of attorney only to mortgage the
property and did not enter into the contract of suretyship.
Nothing is stated in Exhibit B to the effect that Tanglao
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became David's surety for the payment of the sum in

question. Neither is this inferable from any of the clauses
thereof, and even if this inference might be made, it would
be insufficient to create an obligation of suretyship which,
under the law, must be express and cannot be presumed.
It appears from the foregoing that defendant Tanglao
could not have contracted any personal responsibility for
the payment of the sum of P640. The only obligation which
Exhibit B, in connection with Exhibit A, has created on the
part of Tanglao, is that resulting from the mortgage of a
property belonging to him to secure the payment of said
P640. However, a foreclosure suit is not instituted in this
case against Tanglao, but a purely personal action for the
recovery of the amount still owed by David.
At any rate, even granting that defendant Tanglao may
be considered as a surety under Exhibit B, the action does
376
376
PHILIPPINE REPORTS ANNOTATED

People vs. Makabangan
not yet lie against him on the ground that all the legal
remedies against the debtor have not previously been
exhausted (art. 1830 of the Civil Code, and decision of the
Supreme Court of Spain of March 2, 1891). The plaintiff
has in its favor a judgment against debtor David for the
payment of the debt. It does not appear that the execution
of this judgment has been asked for and Exhibit B, on the
other hand, shows that David has two pieces of property
the value of which is in excess of the balance of the debt the
payment of which is sought of Tanglao in his alleged
capacity as surety.
For the foregoing considerations, the appealed judgment
is reversed and the defendant is absolved from the
complaint, with the costs to the plaintiff. So ordered.
VillaReal, Abad Santos, Imperial, Diaz, Recto, and
Laurel, JJ., concur.
judgment reversed.
_____________
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8/12/2015

PHILIPPINE REPORTS ANNOTATED VOLUME 063

[No. 42518. August 29, 1936]

VOL. 63, AUGUST 29, 1936