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G.R. No. L-25659

This case involved a crop loan granted by Luzon Surety to Chavez based on a surety bond, with Garcia as one of the guarantors. When Chavez defaulted, Luzon Surety sued the guarantors including Garcia. The lower court ruled in favor of Luzon Surety. When Luzon Surety levied Garcia's conjugal property to satisfy the judgment, Garcia sued for an injunction. The lower court and Court of Appeals ruled in Garcia's favor, finding the debt was not for the family's benefit per Article 161 of the Civil Code. The Supreme Court affirmed, as there was no proof Garcia acted as surety for the family's benefit, and any reputational

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1K views1 page

G.R. No. L-25659

This case involved a crop loan granted by Luzon Surety to Chavez based on a surety bond, with Garcia as one of the guarantors. When Chavez defaulted, Luzon Surety sued the guarantors including Garcia. The lower court ruled in favor of Luzon Surety. When Luzon Surety levied Garcia's conjugal property to satisfy the judgment, Garcia sued for an injunction. The lower court and Court of Appeals ruled in Garcia's favor, finding the debt was not for the family's benefit per Article 161 of the Civil Code. The Supreme Court affirmed, as there was no proof Garcia acted as surety for the family's benefit, and any reputational

Uploaded by

brecht1980
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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G.R. No.

L-25659

( October 31, 1969)

30 SCRA 111

LUZON SURETY CO., INC., petitioner, vs. JOSEFA AGUIRRE DE GARCIA, VICENTE GARCIA and the FOURTH DIVISION OF THE COURT OF APPEALS, respondents.

Facts: Luzon Surety granted a crop loan to Chavez based on a surety bond executed in favor of Philippine National Bank. Garcia was one of the guarantors of the indemnity agreement. On April 1957, PNB filed complaint against Luzon Surety. This subsequently prompted Luzon Surety, on August of the same year, to file a complaint against the guarantors (one of which was Garcia). The lower court ruled in favor of PNB in the first case and ordered the guarantors in the second case to pay Luzon Surety. July 30, 1960, CFI issued a writ of execution for Garcia to pay the amount of P3,839. On August, the sheriff levied his sugar quedans, conjugal property of the Garcia spouses.

The Garcias filed a suit of injunction which the lower court found in their favor based on Art. 161 of the CC. Luzon Surety appealed to the CA which affirmed the lower courts decision. Review through SC. Issues/Held/Ratio: WON the signing of the indemnity agreement redounded to the benefit of the family and thus, should fall under the liabilities of the conjugal partnership. No. The administrators obligations are only chargeable to the conjugal property if he believes it is done for the benefit of the family. No proof was presented that Vicente Garcia, acting as surety or guarantor, did so for the benefit of the family. Luzon Surety claims that the surety did benefit the family because it added to Garcias reputation as being trustworthy and enhanced his standing in the community. This is too remote/fanciful a benefit to be considered in terms of what is provided for in Art. 161.

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