created between Felisa, as trustor, and Bella, Delfin, Sr., and Felimon, Sr., as both trustees and beneficiaries, the execution of the September 21, 1970 letter settled, once and for all, the nature of the trust established between them as an express one, their true intention irrefutably extant thereon. ( GO vs. THE ESTATE DE BUENAVENTURA , G.R. No. 211972, July 22, 2015, PERLAS-BERNABE) CREDiT TRANSACTIONS Guaranty vs Surety GUARANTY SURETYSHIP Liability depends upon an independent agreement to pay the obligation of the principal if he fails to do so. Surety assumes liability as a regular party to the contract. Guarantor is secondarily liable. Surety is primarily liable. Guarantor binds himself to pay if the principal cannot pay. Surety undertakes to pay if principal does not pay. Insurer of solvency of debtor. Insurer of the debt. Guarantor can avail of the benefit of excussion and division in case creditor proceeds against him. Surety cannot avail of the benefit of excussion and division. Q: Felipe borrowed $100 from Gustavo in 1998. On March 1, 2008, Felipe tendered to Gustavo a Cashier’s check
CIVIL LAW UST LAST MINUTE TIPS 2019 UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW 16 in payment of his debt, based on the PH Peso – US$ exchange rate at that time. Gustavo accepted the check, but forgot to deposit it until Sept 2008 which caused the check to become stale. Gustavo now wants Felipe to pay him in cash claiming that the previous payment was not in legal tender and therefore, Felipe should pay him the value of the debt at the time it was incurred. Felipe refused claiming that Gustavo is estopped from raising the issue of legal tender and that it was Gustavo’s negligence in not depositing the check immediately that caused the check to become stale. a) Can Gustavo now raise the issue that the cashier’s check is not legal tender? A: NO , because Gustavo is guilty of estoppel by laches. He led Felipe to believe that he could pay by cashier’s check, and Felipe relied that such cashier’s check would be encashed thus extinguishing his obligation. Because of Gustavo’s inaction of more than six months the check became stale and Felipe will be prejudiced if he will be required to pay the $100 at the exchange rate of P56 to $1.00. The exchange should be the rate at the time of payment. ALTERNATIVE ANSWER: Yes. The cashier’s check is not legal tender until it is encashed. (Art. 1249, CC). The cashier’s check by itself is not legal tender. (Cuaycong v. Ruiz, 86 Phil. 170 , Moran, C.J.; Belisario v. Natividad, 60 Phil. 156 , Butte, J.). b) Can Felipe validly refuse to pay Gustavo again? A: YES, if the payment is valid. Since the bank considered the cashier’s check as being stale for not having been encashed on time, then the cashier’s check may be issued again. At any rate, non - payment of the amount to Gustavo would constitute unjust enrichment.
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