SURITYSHIPSec 175-178, Insurance Codeof the PhilippinesBy: Paul I. Pili,
PAYMENT OF PREMIUMSRULES ARE AS FOLLOWS:• 1. The premiums becomes a debt  as soon as the contract of  suretyship or bonds ...
PAYMENT OF PREMIUMS• SECOND RULE• 2. The contract of suretyship  or bonding shall not be valid  and binding unless and unt...
PAYMENT OF PREMIUMSTHIRD RULE• 3. Where the obligee has accepted  the bond, it shall be valid and  enforceable notwithstan...
PAYMENT OF PREMIUMS• 4TH RULE• If the contract of suretyship  or bond is not accepted by or  filed with the obligee , the ...
PAYMENT OF PREMIUMS• 5TH RULE• If the non-acceptance of the  bond be due to the fault or  negligence of the surety, no  se...
PAYMENT OF PREMIUMS•   6TH   RULE• In the case of continuing bond  (for a term longer than one year  or with no fixed expi...
TYPES OF BONDS
KINDS OF BONDS• 1. Fidelity Bonds• 2. Surety Bonds
Fidelity Bond• Bond that answers for the  loss of an employer who is  the obligee for the  dishonesty of the  employee.
Surety Bond• surety bond  A bond given to protect the recipient against  loss in case the terms of a contract are not  fil...
TYPES OF SURETY BONDS•• 1. Contract Bonds• 2. Fidelity Bonds• 3. Judicial Bonds
KINDS OF BONDSTYPES OF SURETY BONDS1. CONTRACT BONDS
Contract bond• Guarantees contractual obligations.  Connected with construction and supply  contracts. They are for the pr...
1. Performance bond• Secures, that the contractor will faithfully  comply with the requirements of the contract  awarded t...
2. Payment bond• Secures that the payments of bills for the labor  and materials used in building a project.
TYPES OF SURETY BONDSTYPES OF SURETY BONDS2. FIDELITY BONDS
FIDELITY BONDS• Bond that answers for the loss of an employer  who is the obligee for the dishonesty of the  employee.
CLASSIFICATION OF FIDELITY BOND• A. Industrial Bond• B. Public Official Bond
Industrial Bond• One required by private  employers to cover loss  through dishonesty of  employees.
Public Official Bond• One required of public  officers for the faithful  performances of their  duties.
KINDS OF BONDSTYPES OF SURETY BONDS3. JUDICIAL BONDS
JUDICIAL BONDS• They are those which are  required in connection with  the judicial proceedings.
Most common kinds ofJUDICIAL BONDS• a. Replevin bonds• b. Injunction bonds• c. Attachment bonds bond• d. Bail bond• e. App...
PERTINENT CIVIL CODE PROVISIONSAPPLICABLE IN A SUPPLETORY CHARACTER
Sec. 178, Insurance Code• Pertinent provisions of the Civil Code of  the Philippines shall be applied in a  suppletory cha...
PERTINENT CIVIL CODE PROVISIONSAPPLICABLE IN A SUPPLETORY CHARACTER
CONTINUING SURETY• By executing such agreement, the principal  places itself in a position to enter into the  projected se...
• .“In the case of a continuing bond, the obligor  shall pay the subsequent annual premium as it  falls due until the cont...
REIMBURSEMENT.• A surety to who paid the obligee can recover  what he paid from the principal. Usually  covered by a separ...
Extinguishment.• Obligation of surety is extinguished at the  same time as that of the principal and for some  causes as a...
Template Provided By    www.animationfactory.com500,000 Downloadable PowerPoint Templates, Animated Clip Art, Backgrounds ...
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Suretyship

  1. 1. SURITYSHIPSec 175-178, Insurance Codeof the PhilippinesBy: Paul I. Pili,
  2. 2. PAYMENT OF PREMIUMSRULES ARE AS FOLLOWS:• 1. The premiums becomes a debt as soon as the contract of suretyship or bonds is perfected and delivered to the obligor (sec. 77)
  3. 3. PAYMENT OF PREMIUMS• SECOND RULE• 2. The contract of suretyship or bonding shall not be valid and binding unless and until the premium therefore has been paid.
  4. 4. PAYMENT OF PREMIUMSTHIRD RULE• 3. Where the obligee has accepted the bond, it shall be valid and enforceable notwithstanding that the premium has not been paid. (Philippine Pryce Assurance Corp vs. Court of Appeals, 230 SCRA 164 [1994].);
  5. 5. PAYMENT OF PREMIUMS• 4TH RULE• If the contract of suretyship or bond is not accepted by or filed with the obligee , the surety shall collect only a reasonable amount;
  6. 6. PAYMENT OF PREMIUMS• 5TH RULE• If the non-acceptance of the bond be due to the fault or negligence of the surety, no service fee, stamps, or taxes imposed shall be collected by the surety; and
  7. 7. PAYMENT OF PREMIUMS• 6TH RULE• In the case of continuing bond (for a term longer than one year or with no fixed expiration date), the obligor shall pay the subsequent annual premium as it falls due until the contract is cancelled. (sec 177)
  8. 8. TYPES OF BONDS
  9. 9. KINDS OF BONDS• 1. Fidelity Bonds• 2. Surety Bonds
  10. 10. Fidelity Bond• Bond that answers for the loss of an employer who is the obligee for the dishonesty of the employee.
  11. 11. Surety Bond• surety bond A bond given to protect the recipient against loss in case the terms of a contract are not filled; a surety company assumes liability for non-performance• [syn: performance bond]
  12. 12. TYPES OF SURETY BONDS•• 1. Contract Bonds• 2. Fidelity Bonds• 3. Judicial Bonds
  13. 13. KINDS OF BONDSTYPES OF SURETY BONDS1. CONTRACT BONDS
  14. 14. Contract bond• Guarantees contractual obligations. Connected with construction and supply contracts. They are for the protection of the owner against a possible default by the contractor to comply with his contract or his possible failure to pay material men, laborers and sub contractors.
  15. 15. 1. Performance bond• Secures, that the contractor will faithfully comply with the requirements of the contract awarded to the contractor and make good damages sustained by the project owner incase of contractor’s failure to do so.
  16. 16. 2. Payment bond• Secures that the payments of bills for the labor and materials used in building a project.
  17. 17. TYPES OF SURETY BONDSTYPES OF SURETY BONDS2. FIDELITY BONDS
  18. 18. FIDELITY BONDS• Bond that answers for the loss of an employer who is the obligee for the dishonesty of the employee.
  19. 19. CLASSIFICATION OF FIDELITY BOND• A. Industrial Bond• B. Public Official Bond
  20. 20. Industrial Bond• One required by private employers to cover loss through dishonesty of employees.
  21. 21. Public Official Bond• One required of public officers for the faithful performances of their duties.
  22. 22. KINDS OF BONDSTYPES OF SURETY BONDS3. JUDICIAL BONDS
  23. 23. JUDICIAL BONDS• They are those which are required in connection with the judicial proceedings.
  24. 24. Most common kinds ofJUDICIAL BONDS• a. Replevin bonds• b. Injunction bonds• c. Attachment bonds bond• d. Bail bond• e. Appeal Bonds
  25. 25. PERTINENT CIVIL CODE PROVISIONSAPPLICABLE IN A SUPPLETORY CHARACTER
  26. 26. Sec. 178, Insurance Code• Pertinent provisions of the Civil Code of the Philippines shall be applied in a suppletory character whenever necessary in interpreting the provisions of a contract of suretyship.
  27. 27. PERTINENT CIVIL CODE PROVISIONSAPPLICABLE IN A SUPPLETORY CHARACTER
  28. 28. CONTINUING SURETY• By executing such agreement, the principal places itself in a position to enter into the projected series of transaction with its creditor with such suretyship agreement, there would be no need to execute a separate surety contract or bond for each financing or credit accommodation extended to the principal debtor
  29. 29. • .“In the case of a continuing bond, the obligor shall pay the subsequent annual premium as it falls due until the contract of suretyship is cancelled by the obligee or by the Commissioner or by a court of competent jurisdiction, as the case may be.” Sec. 177.
  30. 30. REIMBURSEMENT.• A surety to who paid the obligee can recover what he paid from the principal. Usually covered by a separate INDEMNITY AGREEMENT signed by the principal in favor of the surety whereby the principal expressly agrees to reimburse the surety whatever amount that it will be required to pay the obligee.
  31. 31. Extinguishment.• Obligation of surety is extinguished at the same time as that of the principal and for some causes as all other obligations.• Suretyship is extinguished if there is material alteration of the principal obligation. For example an extension granted to the debtor by the credit or without the consent of the surety extinguishes the surety.
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