SlideShare a Scribd company logo
PALMARES VS CA
G R 1 2 6 4 9 0 , M A R C H 3 1 , 1 9 9 8
FACTS:
• Pursuant to a promissory note, M.B. Lending Corporation (private
respondent) extended a loan to the spouses Osmeña and Merlyn
Azarraga, together with petitioner Estrella Palmares (petitioner) as a co-
maker in the amount of P30,000.00 payable on or before May 12, 1990,
• On four occasions after the execution of the promissory note and even
after the loan matured, petitioner and the Azarraga spouses were able
to pay a total of P16,300.00, thereby leaving a balance of P13,700.00.
• However, no payments were made after the last payment on September
26, 1991.
• Consequently, on the basis of petitioner's solidary liability under the
promissory note, respondent corporation filed a complaint against
petitioner Palmares as the lone party-defendant, to the exclusion of the
principal debtors, allegedly by reason of the insolvency of the latter.
ISSUES:
• Where a party signs a promissory note as a co-maker and binds herself
to be jointly and severally liable with the principal debtor in case the
latter defaults in the payment of the loan, is such undertaking of the
former deemed to be that of a surety as an insurer of the debt, or of a
guarantor who warrants the solvency of the debtor? Or whether or not
Palmares is liable?
RULING:
• Yes.
• It is a cardinal rule in the interpretation of contracts that if the terms of a
contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall control. In
the case at bar, petitioner expressly bound herself to be jointly and
severally or solidarily liable with the principal maker of the note. The
terms of the contract are clear, explicit and unequivocal that petitioner's
liability is that of a surety.
• Petitioner admits that she voluntarily affixed her signature thereto; ergo,
she cannot now be heard to claim otherwise.
• Having entered into the contract with full knowledge of its terms and
conditions, petitioner is estopped to assert that she did so under a
misapprehension or in ignorance of their legal effect, or as to the legal
effect of the undertaking.
• The rule that ignorance of the contents of an instrument does not
ordinarily affect the liability of one who signs it also applies to contracts
of suretyship. And the mistake of a surety as to the legal effect of her
obligation is ordinarily no reason for relieving her of liability.
• Petitioner's undertaking as co-maker immediately follows the terms and
conditions stipulated between respondent corporation, as creditor, and
the principal obligors. A surety is usually bound with his principal by
the same instrument, executed at the same time and upon the same
consideration; he is an original debtor, and his liability is immediate and
direct.
• Under Article 1216 of the Civil Code, the creditor may proceed against
any one of the solidary debtors or some or all of them simultaneously.
The rule, therefore, is that if the obligation is joint and several, the
creditor has the right to proceed even against the surety alone.
SPS FRANCISCO VS DEAC, GR 171312
• Spouses Francisco obtained the services of DEAC Construction, Inc. to construct a 3-
story residential building on their lot located at Tondo, Manila for a contract price of
P3.5 million. P2M upon signing of the contract of construction, P750K upon
completion of the foundation structure and ground floor, P750K upon completion of
the second floor.
• The construction of the residential bldg commenced without the necessary bldg
permit. Because of this, the spouses Francisco were criminally charged with the
violation of the National Bldg. Code (PD 1096). To facilitate the approval of the permit,
the signatures of Guia Francisco were forged by DEAC’s representative.
• The building inspector also observed, after periodic inspections of he construction site,
that the contractor deviated on some specifications from the approved plans.
• The RTC ordered partial rescission since the subject bldg was already 70% to 75%
completed at the time of the proceedings.
FACTS:
ISSUE:
• Whether or not partial rescission was properly ordered by the RTC?
HELD:
• Yes.
• DEAC, to whom the obligation of securing the bldg permit pertained, should obviously
have ensured compliance with the requirements set forth by law. It should have
informed the spouses that the bldg permit had not yet been issued especially that they
had already received a substantial amount of money from the latter and had already
started the construction of the bldg.
• Respondent’s mistake in identifying the exact location of the property which led to the
delay in the issuance of a building permit and forgery of petitioner Guia Francisco’s
signature on the building plan exhibits a proclivity for error and taking the easy way
out. The spouses Francisco should be allowed to rescind the contract to the extent that
this is possible under the circumstances.
• The filing of a criminal case against respondent Dadula and the subsequently filing of
this civil case for rescission and damages within a reasonable time after the Spouses
Francisco had learned that construction of their bldg commenced without the
necessary bldg permit and discovered that there were deviations from the bldg plan
demonstrate the vigilance with which they guarded their rights.
• Given the fat that the construction in this case already 75% complete, it is correct to
order partial rescission only of the undelivered or unfinished portion of the
construction. Equitable considerations justify rescission of the portion of the obligation
which had not been delivered.

More Related Content

Similar to Case-Digest-obli.pptx

Discharge of Contract By Breach
Discharge of Contract By BreachDischarge of Contract By Breach
Discharge of Contract By Breach
surrenderyourthrone
 
Damon compania v hapag lloyd international
Damon compania v hapag lloyd internationalDamon compania v hapag lloyd international
Damon compania v hapag lloyd international
Azrie Johari
 
Vitiating Elements in the Formation of a Contract: Mistake and frustration
Vitiating Elements in the Formation of a Contract: Mistake and frustrationVitiating Elements in the Formation of a Contract: Mistake and frustration
Vitiating Elements in the Formation of a Contract: Mistake and frustration
Preeti Sikder
 
Tutorial 4 Question 5 - MMU MELAKA CONVEY
Tutorial 4 Question 5 - MMU MELAKA CONVEYTutorial 4 Question 5 - MMU MELAKA CONVEY
Tutorial 4 Question 5 - MMU MELAKA CONVEY
jasintra412
 
Cases
CasesCases
Void agreements
Void agreementsVoid agreements
Void agreements
Shivani Sharma
 
Vitiating Elements in Formation of Contract: Duress and Undue Influence
Vitiating Elements in Formation of Contract: Duress and Undue InfluenceVitiating Elements in Formation of Contract: Duress and Undue Influence
Vitiating Elements in Formation of Contract: Duress and Undue Influence
Preeti Sikder
 
CA Homeowners Bill of Rights: Accessing its Current Impact
CA Homeowners Bill of Rights: Accessing its Current ImpactCA Homeowners Bill of Rights: Accessing its Current Impact
CA Homeowners Bill of Rights: Accessing its Current Impact
Jennifer L. Gray
 
final notes civil code bar q's (AutoRecovered).pdf
final notes civil code bar q's (AutoRecovered).pdffinal notes civil code bar q's (AutoRecovered).pdf
final notes civil code bar q's (AutoRecovered).pdf
ChrisselTabasa4
 
15.-PILIPINAS-BANK-VS-ONG - 3.docx
15.-PILIPINAS-BANK-VS-ONG - 3.docx15.-PILIPINAS-BANK-VS-ONG - 3.docx
15.-PILIPINAS-BANK-VS-ONG - 3.docx
eunicedemaclid
 
Chattel
ChattelChattel
Chattel
Skypeach
 
Rollits' Planning & Property Development Newsletter Autumn 2019
Rollits' Planning & Property Development Newsletter Autumn 2019Rollits' Planning & Property Development Newsletter Autumn 2019
Rollits' Planning & Property Development Newsletter Autumn 2019
Pat Coyle
 
Specific performance
Specific performanceSpecific performance
Specific performance
Ummi Rahimi
 
110652768 cases-sa-insurance
110652768 cases-sa-insurance110652768 cases-sa-insurance
110652768 cases-sa-insurance
homeworkping7
 
Contracts
ContractsContracts
Powerpoint for Legalwise Annual Property Seminar March 2016
Powerpoint for Legalwise Annual Property Seminar March 2016Powerpoint for Legalwise Annual Property Seminar March 2016
Powerpoint for Legalwise Annual Property Seminar March 2016
Laina Chan
 
Lecture 13 duress - cases
Lecture 13   duress - casesLecture 13   duress - cases
Lecture 13 duress - cases
Ramona Vansluytman
 
Trial memorandum
Trial memorandumTrial memorandum
Trial memorandum
AJmon2530
 
Messy.mechanics.lien
Messy.mechanics.lienMessy.mechanics.lien
Messy.mechanics.lien
Kevin Connolly
 
Messy.mechanics.lien
Messy.mechanics.lienMessy.mechanics.lien
Messy.mechanics.lien
Kevin Connolly
 

Similar to Case-Digest-obli.pptx (20)

Discharge of Contract By Breach
Discharge of Contract By BreachDischarge of Contract By Breach
Discharge of Contract By Breach
 
Damon compania v hapag lloyd international
Damon compania v hapag lloyd internationalDamon compania v hapag lloyd international
Damon compania v hapag lloyd international
 
Vitiating Elements in the Formation of a Contract: Mistake and frustration
Vitiating Elements in the Formation of a Contract: Mistake and frustrationVitiating Elements in the Formation of a Contract: Mistake and frustration
Vitiating Elements in the Formation of a Contract: Mistake and frustration
 
Tutorial 4 Question 5 - MMU MELAKA CONVEY
Tutorial 4 Question 5 - MMU MELAKA CONVEYTutorial 4 Question 5 - MMU MELAKA CONVEY
Tutorial 4 Question 5 - MMU MELAKA CONVEY
 
Cases
CasesCases
Cases
 
Void agreements
Void agreementsVoid agreements
Void agreements
 
Vitiating Elements in Formation of Contract: Duress and Undue Influence
Vitiating Elements in Formation of Contract: Duress and Undue InfluenceVitiating Elements in Formation of Contract: Duress and Undue Influence
Vitiating Elements in Formation of Contract: Duress and Undue Influence
 
CA Homeowners Bill of Rights: Accessing its Current Impact
CA Homeowners Bill of Rights: Accessing its Current ImpactCA Homeowners Bill of Rights: Accessing its Current Impact
CA Homeowners Bill of Rights: Accessing its Current Impact
 
final notes civil code bar q's (AutoRecovered).pdf
final notes civil code bar q's (AutoRecovered).pdffinal notes civil code bar q's (AutoRecovered).pdf
final notes civil code bar q's (AutoRecovered).pdf
 
15.-PILIPINAS-BANK-VS-ONG - 3.docx
15.-PILIPINAS-BANK-VS-ONG - 3.docx15.-PILIPINAS-BANK-VS-ONG - 3.docx
15.-PILIPINAS-BANK-VS-ONG - 3.docx
 
Chattel
ChattelChattel
Chattel
 
Rollits' Planning & Property Development Newsletter Autumn 2019
Rollits' Planning & Property Development Newsletter Autumn 2019Rollits' Planning & Property Development Newsletter Autumn 2019
Rollits' Planning & Property Development Newsletter Autumn 2019
 
Specific performance
Specific performanceSpecific performance
Specific performance
 
110652768 cases-sa-insurance
110652768 cases-sa-insurance110652768 cases-sa-insurance
110652768 cases-sa-insurance
 
Contracts
ContractsContracts
Contracts
 
Powerpoint for Legalwise Annual Property Seminar March 2016
Powerpoint for Legalwise Annual Property Seminar March 2016Powerpoint for Legalwise Annual Property Seminar March 2016
Powerpoint for Legalwise Annual Property Seminar March 2016
 
Lecture 13 duress - cases
Lecture 13   duress - casesLecture 13   duress - cases
Lecture 13 duress - cases
 
Trial memorandum
Trial memorandumTrial memorandum
Trial memorandum
 
Messy.mechanics.lien
Messy.mechanics.lienMessy.mechanics.lien
Messy.mechanics.lien
 
Messy.mechanics.lien
Messy.mechanics.lienMessy.mechanics.lien
Messy.mechanics.lien
 

Recently uploaded

V.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdf
V.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdfV.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdf
V.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdf
bhavenpr
 
一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理
一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理
一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理
gjsma0ep
 
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee
 
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaints
Integrating Advocacy and Legal Tactics to Tackle Online Consumer ComplaintsIntegrating Advocacy and Legal Tactics to Tackle Online Consumer Complaints
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaints
seoglobal20
 
From Promise to Practice. Implementing AI in Legal Environments
From Promise to Practice. Implementing AI in Legal EnvironmentsFrom Promise to Practice. Implementing AI in Legal Environments
From Promise to Practice. Implementing AI in Legal Environments
ssusera97a2f
 
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
osenwakm
 
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptxPatenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
ssuser559494
 
fnaf lore.pptx ...................................
fnaf lore.pptx ...................................fnaf lore.pptx ...................................
fnaf lore.pptx ...................................
20jcoello
 
Lifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point PresentationLifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point Presentation
seri bangash
 
Corporate Governance : Scope and Legal Framework
Corporate Governance : Scope and Legal FrameworkCorporate Governance : Scope and Legal Framework
Corporate Governance : Scope and Legal Framework
devaki57
 
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
SKshi
 
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
CIkumparan
 
Genocide in International Criminal Law.pptx
Genocide in International Criminal Law.pptxGenocide in International Criminal Law.pptx
Genocide in International Criminal Law.pptx
MasoudZamani13
 
The Future of Criminal Defense Lawyer in India.pdf
The Future of Criminal Defense Lawyer in India.pdfThe Future of Criminal Defense Lawyer in India.pdf
The Future of Criminal Defense Lawyer in India.pdf
veteranlegal
 
PPT-Money Laundering - lecture 5.pptx ll
PPT-Money Laundering - lecture 5.pptx llPPT-Money Laundering - lecture 5.pptx ll
PPT-Money Laundering - lecture 5.pptx ll
MohammadZubair874462
 
San Remo Manual on International Law Applicable to Armed Conflict at Sea
San Remo Manual on International Law Applicable to Armed Conflict at SeaSan Remo Manual on International Law Applicable to Armed Conflict at Sea
San Remo Manual on International Law Applicable to Armed Conflict at Sea
Justin Ordoyo
 
What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...
lawyersonia
 
Receivership and liquidation Accounts Prof. Oyedokun.pptx
Receivership and liquidation Accounts Prof. Oyedokun.pptxReceivership and liquidation Accounts Prof. Oyedokun.pptx
Receivership and liquidation Accounts Prof. Oyedokun.pptx
Godwin Emmanuel Oyedokun MBA MSc PhD FCA FCTI FCNA CFE FFAR
 
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
osenwakm
 
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Massimo Talia
 

Recently uploaded (20)

V.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdf
V.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdfV.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdf
V.-SENTHIL-BALAJI-SLP-C-8939-8940-2023-SC-Judgment-07-August-2023.pdf
 
一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理
一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理
一比一原版(Lincoln毕业证)新西兰林肯大学毕业证如何办理
 
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
 
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaints
Integrating Advocacy and Legal Tactics to Tackle Online Consumer ComplaintsIntegrating Advocacy and Legal Tactics to Tackle Online Consumer Complaints
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaints
 
From Promise to Practice. Implementing AI in Legal Environments
From Promise to Practice. Implementing AI in Legal EnvironmentsFrom Promise to Practice. Implementing AI in Legal Environments
From Promise to Practice. Implementing AI in Legal Environments
 
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
 
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptxPatenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
 
fnaf lore.pptx ...................................
fnaf lore.pptx ...................................fnaf lore.pptx ...................................
fnaf lore.pptx ...................................
 
Lifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point PresentationLifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point Presentation
 
Corporate Governance : Scope and Legal Framework
Corporate Governance : Scope and Legal FrameworkCorporate Governance : Scope and Legal Framework
Corporate Governance : Scope and Legal Framework
 
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
 
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
 
Genocide in International Criminal Law.pptx
Genocide in International Criminal Law.pptxGenocide in International Criminal Law.pptx
Genocide in International Criminal Law.pptx
 
The Future of Criminal Defense Lawyer in India.pdf
The Future of Criminal Defense Lawyer in India.pdfThe Future of Criminal Defense Lawyer in India.pdf
The Future of Criminal Defense Lawyer in India.pdf
 
PPT-Money Laundering - lecture 5.pptx ll
PPT-Money Laundering - lecture 5.pptx llPPT-Money Laundering - lecture 5.pptx ll
PPT-Money Laundering - lecture 5.pptx ll
 
San Remo Manual on International Law Applicable to Armed Conflict at Sea
San Remo Manual on International Law Applicable to Armed Conflict at SeaSan Remo Manual on International Law Applicable to Armed Conflict at Sea
San Remo Manual on International Law Applicable to Armed Conflict at Sea
 
What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...
 
Receivership and liquidation Accounts Prof. Oyedokun.pptx
Receivership and liquidation Accounts Prof. Oyedokun.pptxReceivership and liquidation Accounts Prof. Oyedokun.pptx
Receivership and liquidation Accounts Prof. Oyedokun.pptx
 
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
 
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
 

Case-Digest-obli.pptx

  • 1. PALMARES VS CA G R 1 2 6 4 9 0 , M A R C H 3 1 , 1 9 9 8
  • 2. FACTS: • Pursuant to a promissory note, M.B. Lending Corporation (private respondent) extended a loan to the spouses Osmeña and Merlyn Azarraga, together with petitioner Estrella Palmares (petitioner) as a co- maker in the amount of P30,000.00 payable on or before May 12, 1990,
  • 3. • On four occasions after the execution of the promissory note and even after the loan matured, petitioner and the Azarraga spouses were able to pay a total of P16,300.00, thereby leaving a balance of P13,700.00. • However, no payments were made after the last payment on September 26, 1991. • Consequently, on the basis of petitioner's solidary liability under the promissory note, respondent corporation filed a complaint against petitioner Palmares as the lone party-defendant, to the exclusion of the principal debtors, allegedly by reason of the insolvency of the latter.
  • 4. ISSUES: • Where a party signs a promissory note as a co-maker and binds herself to be jointly and severally liable with the principal debtor in case the latter defaults in the payment of the loan, is such undertaking of the former deemed to be that of a surety as an insurer of the debt, or of a guarantor who warrants the solvency of the debtor? Or whether or not Palmares is liable?
  • 5. RULING: • Yes. • It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control. In the case at bar, petitioner expressly bound herself to be jointly and severally or solidarily liable with the principal maker of the note. The terms of the contract are clear, explicit and unequivocal that petitioner's liability is that of a surety.
  • 6. • Petitioner admits that she voluntarily affixed her signature thereto; ergo, she cannot now be heard to claim otherwise. • Having entered into the contract with full knowledge of its terms and conditions, petitioner is estopped to assert that she did so under a misapprehension or in ignorance of their legal effect, or as to the legal effect of the undertaking. • The rule that ignorance of the contents of an instrument does not ordinarily affect the liability of one who signs it also applies to contracts of suretyship. And the mistake of a surety as to the legal effect of her obligation is ordinarily no reason for relieving her of liability.
  • 7. • Petitioner's undertaking as co-maker immediately follows the terms and conditions stipulated between respondent corporation, as creditor, and the principal obligors. A surety is usually bound with his principal by the same instrument, executed at the same time and upon the same consideration; he is an original debtor, and his liability is immediate and direct. • Under Article 1216 of the Civil Code, the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The rule, therefore, is that if the obligation is joint and several, the creditor has the right to proceed even against the surety alone.
  • 8. SPS FRANCISCO VS DEAC, GR 171312 • Spouses Francisco obtained the services of DEAC Construction, Inc. to construct a 3- story residential building on their lot located at Tondo, Manila for a contract price of P3.5 million. P2M upon signing of the contract of construction, P750K upon completion of the foundation structure and ground floor, P750K upon completion of the second floor. • The construction of the residential bldg commenced without the necessary bldg permit. Because of this, the spouses Francisco were criminally charged with the violation of the National Bldg. Code (PD 1096). To facilitate the approval of the permit, the signatures of Guia Francisco were forged by DEAC’s representative. • The building inspector also observed, after periodic inspections of he construction site, that the contractor deviated on some specifications from the approved plans. • The RTC ordered partial rescission since the subject bldg was already 70% to 75% completed at the time of the proceedings. FACTS:
  • 9. ISSUE: • Whether or not partial rescission was properly ordered by the RTC? HELD: • Yes. • DEAC, to whom the obligation of securing the bldg permit pertained, should obviously have ensured compliance with the requirements set forth by law. It should have informed the spouses that the bldg permit had not yet been issued especially that they had already received a substantial amount of money from the latter and had already started the construction of the bldg.
  • 10. • Respondent’s mistake in identifying the exact location of the property which led to the delay in the issuance of a building permit and forgery of petitioner Guia Francisco’s signature on the building plan exhibits a proclivity for error and taking the easy way out. The spouses Francisco should be allowed to rescind the contract to the extent that this is possible under the circumstances. • The filing of a criminal case against respondent Dadula and the subsequently filing of this civil case for rescission and damages within a reasonable time after the Spouses Francisco had learned that construction of their bldg commenced without the necessary bldg permit and discovered that there were deviations from the bldg plan demonstrate the vigilance with which they guarded their rights. • Given the fat that the construction in this case already 75% complete, it is correct to order partial rescission only of the undelivered or unfinished portion of the construction. Equitable considerations justify rescission of the portion of the obligation which had not been delivered.