LAW ON NECESSARY DEPOSIT & LAW ON GUARANTY

NECESSARY DEPOSIT Under Art. 1996.

A deposit is necessary: •1. When it is made in compliance with a legal obligation •2. When it takes place on the occasion of any calamity, such as fire, storm, flood, pillage, shipwreck, or other similar events

Article 1997. The deposit referred to in No. 1 of the preceding articles shall be governed by the provisions of the law establishing it, and in case of deficiency, by the rules on voluntary deposit. The deposit mentioned in No. 2 of the preceding article shall be regulated by the provisions concerning voluntary deposit and by Article 2186.

Necessary deposit in compliance with a legal obligation: a. Judicial deposit of a thing the possession of which is being disputed in a litigation by two or more persons b. Deposit with a bank or public institution of public bonds or instruments of credit payable to order or bearer given in usufruct when the usufructuary does not give proper security for their conservation

c. Deposit of a thing pledged when the creditor uses the same without the authority of the owner or misuses it in any other way d. Those required in suits are provided in Rules of Court e. Those constituted to guarantee contracts with the government; the deposit arises from an obligation of public or administrative character

Necessary deposit made on the occasion of any calamity: 1. Deposit created by accident or fortuitous event 2. Possession of movable property passes from one person to another by accident or fortuitously through force of circumstances and which the law imposes on the recipient the obligations of a bailee 3. More immediate object is to save the property rather than its safekeeping 4. There must be a causal relation between the calamity and the constitution of the deposit—deposito miserable

Article 1998. The deposit of effects made by travelers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.

Article 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or placed in the annexes of the hotel. Before keepers of hotels or inns may be held responsible, the following elements must concur: a. They have been previously informed about the effects brought by the guests b. Latter have taken the precautions prescribed regarding their safekeeping.

The responsibility imposed extends to all those who offer lodging for a compensation • “Travelers” and “guests”—refers to transients and not to boarders; non-transients are governed by the rules on lease • “Inn”—a public house for the lodging of travelers for compensation and until capacity is reached; a place of public entertainment that does not provide lodging • “Motel”—an establishment which provides lodging and parking and in which the rooms are usually accessible from an outdoor parking area

Article 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as by strangers; but not that which may proceed from any force majeure.

The fact that travelers are constrained to rely on the vigilance of the keeper of the hotel or inn shall be considered in determining the degree of care required of him. 2001.

The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. Article 2002.

The hotel-keeper is not liable for compensation if the loss is due to the acts of the guests, his family, servants or visitors, or it the loss arises from the character of the things brought into the hotel

Hotel-keeper is liable regardless of the amount of care exercised: a. Loss or injury is caused by his servants or employees as well as by strangers provided that notice has been given and proper precautions taken b. Loss is caused by the act of thief or robber done without the use of arms and irresistible force.

Hotel-keeper is not liable in the following cases: a. Loss or injury is cause by force majeure, theft or robbery by a stranger with the use of arms or irresistible force, unless he is guilty of fault or negligence failing to provide against the loss or injury from his cause b. Loss is due to the acts of the guests, his family, servants or visitors c. Loss arises from the character of the things brought into the hotel

Article 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in Articles 1998 to 2001 is suppressed or diminished shall be void. It is not necessary in order to hold an inn-keeper liable that the effects of the guests be actually delivered to him or his employees; it is enough that they are within the inn.

Article 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in Articles 1998 to 2001 is suppressed or diminished shall be void. It is not necessary in order to hold an inn-keeper liable that the effects of the guests be actually delivered to him or his employees; it is enough that they are within the inn.

SEQUESTRATION OR JUDICIAL DEPOSIT

Art. 2005. A judicial deposit or sequestration takes place when an attachment or seizure of property in litigation is ordered. Art. 2006. Movable as well as immovable property may be the object of sequestration.Art. 2007. The depositary of property or objects sequestrated cannot be relieved of his responsibility until the controversy which gave rise thereto has come to an end, unless the courts so orders. 2008. The depositary of property sequestrated is bound to comply, with respect to the same, with all the obligations of a food father of a family.

SEQUESTRATION OR JUDICIAL DEPOSIT

Judicial deposit or sequestration—takes place when an attachment or seizure of property in litigation is ordered by a court Deposit is judicial because it is auxiliary to a case pending in court Purpose: to maintain status quo during the pendency of the litigation or to insure the right of the parties to the property in case of a favorable judgment Depositary of sequestrated property is the person appointed by the court

Judicial deposit Extrajudicial deposit Cause or origin Will of the court Will of the parties, hence,

there is a contract

Purpose As security and to secure the right of a

party to recover in case of a favorable judgment

Custody and safekeeping of the thing

Subject matter Either movable or immovable property but

generally immovable property

Only movable property

Remuneration Always remunerated or onerous

May be compensated or not, but generally gratuitous

In whose behalf it is held In behalf of a person who, by the judgment,

has a right

In behalf of the depositor or third person designated

JUDICIAL DEPOSIT

Article 2009. As to matters not provided for in this Code, judicial sequestration shall be governed by the Rules of Court.

The law on judicial deposit is remedial or procedural in nature

SALIENT NOTES ON LAW ON GUARANTY

NATURE AND EXTENT OF CONTRACT The peculiarity of the contract of guaranty is that it is founded on another contract. Without a principal obligation a guaranty cannot exist. Thus, Art. 2052 provides: A guaranty cannot exist without a valid obligation, although it may be constituted to guarantee the performance of a voidable or unenforceable contract, or it may also guarantee a natural obligation, or a conditional obligation

DefinitionBy guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. If a person binds himself solidarily with the principal debtor, the contract is called a suretyship. (Art. 2047)

Parties

At least three persons are involved in the relationship of guaranty. They are the principal debtor, the principal creditor and the guarantor, who undertakes to fulfill the obligation in case the principal debtor should fail to do so.

DISTINCTIONSSometimes the words "guaranty" and "surety" are used interchangeably. Therefore, it is important to know the distinctions between them.1. The guarantor's obligation is collateral to that of the principal debtor; while a surety is directly and primarily liable for the debt or obligation as if he were the principal debtor himself. In other words, the guarantor is subsidiarily liable, while the surety is solidarity liable.

DISTINCTIONS

2. The guarantor promises to pay only when the principal debtor cannot pay; while a surety's obligation arises the very instant the contract is agreed upon; in other words his obligation is coextensive with that of the principal debtor. He is, as a matter of fact, a co-principal debtor. Thus surety pays when principal debtor does not pay.

DISTINCTIONS3. The contract of guaranty as to form is governed by the Statute of Frauds, hence, to be enforceable must be in writing because a guaranty is a special promise to answer for the debt, default of miscarriage of another; while a suretyship does not come under the application of the Statute of Frauds, because a suretyship is a promise that creates a primary obligation.

DISTINCTIONS

4. The guarantor enjoys the benefit of exhaustion or "excussion," which means that the guarantor's liability arises only after the creditor has exhausted the properties of the debtor and has resorted to all the legal remedies against the debtor (Art.2058); while the surety binds himself if the debtor does not pay, and the reason why the debtor does not pay is immaterial, because the "surety is liable as fully and under the same conditions as if the debt were his from the very beginning."

DISTINCTIONS5. Liability of the guaranty is a collateral undertaking while surety is original promissor.

6. Guarantor is insurer of the solvency of the debtor while surety is the insurer of the debt itself;

Characteristics of Guaranty• Accessory - because it needs a principal

obligation to exist.• Consensual - because it is perfected by mere

consent.• Nominate - because it has a definite name

under the Civil Code.• Generally gratuitous - because the guarantor

does not receive any consideration for his guaranty, unless there is a stipulation to the contrary. (Art.2048)

Kinds of Guaranty

As to Manner of Creation:Conventional - created by agreement of the parties.Legal - created by provision of law.Judicial - created by decree of court.

Kinds of Guaranty

As to consideration: Gratuitous - guarantor receives no consideration for the guaranty.•Onerous - the guarantor receives a valuable consideration for the guaranty.As to person guaranteedSingle – one constituted solely to guarantee or secure performance of the principal obligationDouble or sub-guaranty – one constituted to secure the fulfillment of a prior guaranty

Kinds of Guaranty

As to its scope and extent:Definite – one where the guaranty is limited to the principal obligation only or to specific portion thereofIndefinite or simple – one where the guaranty includes not only the principal obligation but also all its accessories including judical cost

A guaranty may also be entered into without the knowledge or consent, or against the will of the principal debtor. But in the event of payment by the guarantor, he shall be entitled to reimbursement by the debtor only insofar as his payment is beneficial to the debtor. But where the guaranty is consented to by the debtor, the guarantor is entitled to reimbursement for whatever he paid and to be subrogated into the rights of the creditor.

A guaranty may also be constituted in favor of another guarantor, with the latter's consent, or without his knowledge, or even over his objection, in which case it is called a sub-guaranty and the guarantor, the sub-guarantor.

There may be also two or more guarantors of the same debtor, in which case they are called co-guarantors.

Extent of GuarantyThe guarantor may bind himself for less, but not for more than the principal obligation, both as regards the amount and the onerous nature of the conditions.

Should he have bound himself for more, his obligation shall be reduced to the limits of that of the debtor. (Art.2054)

ExamplesD is indebted to C for P10,000. G bound himself to C to guarantee A's obligation to the extent of P5,000. But should G bound himself as guarantor of D to the extent of P12,000, the obligation of G shall be reduced only to the extent of P10,000, the amount of the principal obligation. The reason is obvious. As to the excess of P2,000 guaranty of G there exists no principal debt, hence the guaranty does not exist in so far as the excess of P2,000 is concerned.

ExamplesA is indebted to B for P50,000. The obligation is not secured by a mortgage or pledge. C , however, guaranteed A's obligation and to show his willingness to guarantee the debt, C constituted a real mortgage as security for his guaranty. If A could not pay, B cannot foreclose the mortgage constituted by C, because that will make the guaranty more onerous than the principal obligation.

• The guaranty may also be given as security for future debts the amount of which is not yet known. But the creditor cannot claim from the guarantor until the debt is liquidated.(Art.2053)

ExampleA is obliged to give to B 10% of his yearly sales in his business. C acted as guarantor. Until the yearly sales have been ascertained, no claim can be had as against C.

• A guaranty cannot be presumed, it must be express and cannot extend to more than what is stipulated therein, although it may comprise not only the principal obligation, but also its accessories, including the judicial costs, in which case the guaranty is called simple or indefinite.

• However, as regards the judicial costs, the guarantor shall only be liable for such costs incurred after he has been judicially required to pay. (Art.2055)

Qualifications of Guarantor•A guarantor gives a creditor additional security in the thought that if the debtor can not pay, he

can recover from the guarantor. •To assure him of such it is necessary that the guarantor must possess the following qualifications:He must possess integrity.He must have capacity to bind himself.He must have sufficient property to answer for the obligation which he guarantees. (Art.2056)

Married Woman as Guarantor A married woman may guarantee an obligation without the husband's consent. This is in accordance with Art. 73 of the Family Code which provides that "either spouse may exercise any legitimate profession, occupation, business activity without the consent of the other.“ – when it involves paraphernal or separate property But generally the married woman cannot bind the conjugal property, the administration of which is jointly exercised by both spouses.

When Guarantor Loses Capacity In the event that the guarantor be convicted in first instance of a crime involving dishonesty or should become insolvent, the creditor may demand another who has all the preceding qualifications, except in the case where the guarantor who was convicted or became insolvent was specified by the creditor. (Art.2057)

EFFECT OF GUARANTY A. Between Guarantor and Creditor As explained earlier, a guarantor has only a subsidiary liability. In order, however, that the credit or can proceed against the guarantor, he must first exhaust all the property of the debtor, and has resorted to all legal remedies against the debtor. This is the so-called benefit of exhaustion or "excussion" of the guarantor. (Art.2058)

In order for the guarantor to avail of this benefit, he must set it up against the creditor upon the latter's demand for payment from him, and point out to the creditor available property of the debtor within the Philippines sufficient to cover the amount of the debt. (Art.2060)

The demand referred to in the preceding paragraph is that made by the creditor after a judgment has already been rendered and could not be satisfied.

Thus, Art. 2062 provides that the guarantor's benefit of excussion shall always be unimpaired, even if judgment should be rendered against the principal debtor and the guarantor in case of appearance by the latter.

Any action brought by the creditor must be against the debtor alone, although the principal debtor may ask the court to notify the guarantor, who may appear if he so desires, to set up such defenses he has against the creditor.

The creditor who is negligent in exhausting the property pointed out by the guarantor shall suffer the loss, to the extent of said property, the insolvency of the debtor resulting from such negligence. (Art.2061)

When Guarantor Loses the Benefit of Exhaustion (Excussion)

• If the guarantor has expressly renounced it;• If he has bound himself solidarily with the

debtor;• In case of insolvency of the debtor;• When he has absconded, or cannot be sued

within the Philippines unless he has left a manager or representative;

• It may be presumed that an execution on the property of the principal debtor would not result in the satisfaction of the obligation. (Art. 2059)

• The benefit of exhaustion is a right that pertains to the guarantor, therefore, he may avail of it or he may renounce it.

• Where the guarantor binds himself solidarity

with the debtor, his liability is no longer subsidiary but primary, hence he does notenjoy said benefit.

• It has been held that for the guarantor to lose

his benefit of exhaustion, the insolvency of the debtor must be judicially declared. (Cachovs. Valles, 45 Phil. 107)

• Even if the debtor is out of the Philippines, but has left a manager or representative, he can be sued because service of legal process can be made through his manager or representative.

• Where the guarantor upon the creditor's

demand fails to set up the benefit of exhaustion against the creditor and to point out to the latter available properties of the debtor within the Philippines to cover the amount of the debt, it was held that there arises a presumption that an execution of the property of the debtor may not result in the satisfaction of the obligation. (Garcia vs. Lianco et al, (CA) 50 O.G.1145)

Sub-guarantor's Benefit of Excussion (Exhaustion)The guarantor of a guarantor shall enjoy the benefit of excussion, both with respect to the guarantor and the principal debtor. (Art. 2064)ExampleA is indebted to B for P20,000. C is the guarantor. D also guarantees C. The creditor has no claim yet against D, the sub-guarantor, unless he has exhausted the properties of A, the debtor, and the properties of C, the guarantor. Only after exhaustion of both properties and the obligation is not satisfied, that B, the creditor, can demand from D.

Several Guarantors of One DebtorThe co-guarantors enjoy two benefits, namely:•The benefit of exhaustion as regards the properties of the debtor; and•The benefit of division among themselves.

Before the co-guarantors can be held liable for the obligation, the creditor must first exhaust all the property of the debtor and must take all remedies against him. If after exhaustion of the property of the debtor and all remedies against him are taken, but the obligation is not satisfied, then the creditor can hold the co-guarantors liable only for their proportionate share of the obligation. This is the benefit of division.

However, the benefit of division against the co-guarantors ceases in the same cases and for the same reasons as the benefit of excussion against the principal debtor.ExampleA is indebted to B in the amount of P30,000. X and Y are the guarantors. If all the properties of A are exhausted and all remedies against him are taken but the obligation remains unsatisfied, B can claim from X only P15,000 and Y also his proportionate share of P15,000. But, if in the foregoing example, it is stipulated that X and Y are solidarily liable with A, then X and Y lose their benefit of division. Hence, B can claim from either of them the total amount of P30,000.

Between Debtor and GuarantorThe guarantor who pays has the following rights against the debtor: To be indemnified by the debtor of: -The total amount of the debt; -The legal interest thereon from the time the payment was made known to the debtor, even though it did not earn interest for the creditor; - The expenses incurred by the guarantor after having notified the debtor that payment had been demanded of him; - Damages, if they are due. (Art.2066)

He is also subrogated by virtue thereof to all the rights which the creditor had against the debtor.(Art.2067,par.1) If he becomes a guarantor for the debt of an absent debtor at the request of another, the guarantor who satisfies the debt may sue either the person so requesting or the debtor for reimbursement. (Art. 2072)

Example Pedro wants to borrow P5,000 from Jose, who was willing to let him borrow, provided there is a guarantor. Pedro then approached Juan, asking him to look for a guarantor for him. Juan asked his friend, Carlos to be the guarantor of Pedro. If Carlos eventually pays the debt, Carlos can seek reimbursement from either Pedro the debtor or Juan, the person who requested him to be a guarantor.

Effect of Compromise

A compromise between the creditor and the principal debtor benefits the guarantor but does not prejudice him. That which is entered into between the guarantor and the 'creditor benefits but does not prejudice the principal debtor. (Art. 2064)

If the guarantor has compromised with the creditor, he cannot demand of the debtor more than what he has really paid. (Art. 2067, par.2) Example A is indebted to B in the amount of P20,000, with C as guarantor. Subsequently, a compromise was entered into between A and B, reducing the debt to P15,000. This compromise benefits C in the sense that if A just the same cannot pay, the liability of C is only P15,000.

On the other hand, if the compromise was between B and C reducing the debt of P20,000 to P18,000, and just the same A cannot pay, therefore it is C who pays B, P18,000. A shall be liable to indemnify C for only P18,000, because the compromise between the guarantor and the creditor must also benefit the principal debtor.

Payment by Guarantor without Notice to Debtor If the guarantor should pay without notifying the debtor, the latter may enforce against him all the defenses which he could have set up against the creditor at the time the payment was made. (Art.2068) This is contrary to the nature of the obligation of aguarantor. Being subsidiarily liable, he should wait until the debtor has had the opportunity to pay, for paying ahead of the latter without his consent, has deprived the debtor of his opportunity to set up defenses against his creditor.

Example A is indebted to B in the amount of P10,000 with C as guarantor. l-n another obligation, B is also indebted to A in the amount of P8,000. Assume that both obligations are due, but C at once paid B, P10,000 with out the knowledge or consent of A. A can raise the defense of partial compensation against C which defense he could have raised against B, the creditor.

Likewise, if the guarantor has paid without notifying the debtor, and the latter not being aware of the payment, repeats the payment, the guarantor cannot seek reimbursement from the debtor. He can only seek reimbursement from the creditor.

The exception is in case of a gratuitous guaranty, and the guarantor was prevented by a fortuitous event from advising the debtor of the payment, and the creditor becomes insolvent, the guarantor shall be reimbursed by the debtor.(Art.2070)

Example A is indebted to B in the amount of P10,000 with C as guarantor. When the debt became due, C paid B without notifying A. So A, unaware of such payment paid B . C cannot seek reimbursement from A. C can recover from B on the basis of quasi-contract. In the foregoing example, if the guaranty is gratuitous and C's failure to notify A of the payment was due to a fortuitous event, and B became insolvent, C can recover from A.

Payment by Guarantor before MaturityIf the debt was for a period and the guarantor paid it before it became due, he cannot demand reimbursement of the debtor until the expiration of the period unless the payment has been ratified by the debtor. (Art.2069)

The guarantor, by paying the creditor before the maturity of the debt, deliberately deprived the debtor of his benefit of the period, and for that reason, the guarantor can seek reimbursement from the debtor only upon maturity of the obligation.

Of course, if the debtor ratifies the early payment of the guarantor, such ratification is equivalent to a waiver of his benefit of the period.

When Guarantor Who Has Not Yet Paid can Proceed against the DebtorThe guarantor, even before having paid, may proceed against the principal debtor;•When he is sued for the payment;•In case of the insolvency of the principal debtor;• When the debtor has bound himself to relieve him from the guaranty within a specified period, and this period has expired;• When the debt has become demandable, by reason of the expiration of the period for payment;

• After the lapse of ten years, when the principal obligation has no fixed period for its maturity, unless it be of such nature that it cannotbe extinguished except within a period longer than ten years;

• If there are reasonable grounds to fear that the principal debtor intends to abscond;

• If the principal debtor is in imminent danger of becoming insolvent;

In all these cases, the action of the guarantor is to obtain release from the guaranty, or to demand a security that shall protect him from any proceedings by the creditor and from the danger of insolvency of the debtor. (Art. 2071)

The remedy afforded to the guarantor by the foregoing rule is not to seek reimbursement from the debtor, because he has not yet paid, but to obtain a release from the guaranty or to obtain a security for his protection should he be made to pay. It must also be remembered that there are certain cases where the guarantor does not enjoy the benefit of excussion, hence, it is but proper that he also be protected even before he has actually paid.

As earlier discussed, the co-guarantors among themselves enjoy the benefit of division, meaning that each one is responsible only for his proportionate share of the debt. Hence if one of them has paid the full amount of the debt, he can demand of each of the others the share which is proportionately owing from him.

If any one of the guarantors should be insolvent, his share shall be borne by the others, including the payer, in the same proportion.But the above rule shall be applicable only :•If the payment is made by virtue of a judicial demand; or•The payment is made because the principal debtor is insolvent, (Art.2073)

Even in these cases, the co-guarantors may set up against the one who paid, the same defenses which would have pertained to the principal debtor against the creditor, and which are not purely personal to the debtor. (Art. 2074)

ExampleA is indebted to B in the amount of P30.000, with X, Y and Z as guarantors. If A becomes insolvent, and X pays B the whole P30,000, X can seek reimbursement from Y and Z their proportionate share which is P10,000 each. Should Y turn out to be insolvent, A shall bear the P5,000 and Z shall also bear the other P5,000.

But Y and Z , when sued by X for reimbursement can set up against X defenses which the principal debtor could set up against the creditor and which defenses are not personal to the principal debtor.

These defenses may be: compensation, remission, prescription or other defenses derived from the nature of the obligation.

There are defenses which the debtor may avail of against his guarantor, and defenses available to co-guarantors. Further, the law allows a guarantor to avail of the defenses which pertain to the principal debtor and are inherent in the debt but not the defenses which are purely personal to the debtor.

Liability of Sub-Guarantor in case of Insolvency of Guarantor The sub-guarantor, in case of the insolvency of the guarantor for whom he bound himself, is responsible to the co-guarantor in the same terms as the guarantor. (Art.2075)

ExampleSuppose in the foregoing example D is the sub-guarantor of Y. In case of insolvency of Y, D is liable to the co-guarantors X and Z in the same manner as Y. So X can seek reimbursement from D the proportionate share of Y, which is P10,000.

EXTINGUISHMENT OF GUARANTY

The guarantor may be discharged from his obligation by the usual methods of discharging the principal obligation. These are payment loss of the thing due, remission, compensation, confusion and novation. In other words if any one of these modes exist to extinguish principal obligation, the guaranty is also extinguished. This is so, because of the accessory nature of the contract of guaranty.

There are, however, additional acts that will extinguish the contract of guaranty. These are; •Acceptance by the creditor of immovable or other property in payment of the debt; (Art.2077)•Extension of time granted to the debtor without the consent of the guarantor; (Art. 2079)•When by some act of creditor, the guarantor cannot be subrogated to the rights, mortgages and preferences of the creditor; (Art. 2080)•Release made by the creditor in favor of one of the guarantors, without the consent of the others benefits all to the extent of the share of the guarantor to whom it was granted. (Art.2078)

When the obligation of the debtor is a money debt, the payment, must also be in money. But where the debtor transfers to the creditor either immovable or other property in payment of his money debt, this is known as "dation in payment." Such special form of payment relieves the guarantor from any responsibility. This holds true, even if the creditor is subsequently evicted of the property. In case of eviction, the creditor's action against the debtor is no longer for the payment of the principal obligation but for his warranty against eviction. This is different and distinct from what the guarantor guaranteed.

Granting an extension to the debtor without the consent of the guarantor is prejudicial to the latter, hence in justice and in equity, the guarantor is discharged from his liability. However, the mere failure of the creditor to demand payment from the debtor when the principal obligation becomes due does not constitute an extension of the term of the obligation. (Hongkong & Shanghai Bank v. Aldecoa & Co., 30 Phil. 255)

It is equally settled In law, that the guarantor who was made to pay because the debtor could not pay, has a right to be subrogated into the rights of the creditor. So when the creditor by his acts has deprived the guarantor of such right, it stands to reason that the guarantor shall be released from his responsibility. This holds true even if the guarantors may be solidary. Such act on the part of the creditor is again prejudicial to the guarantors.

•A release of the share of one of the guarantors by the creditor without the consent of the other guarantors, is prejudicial to the latter in The event the guarantor becomes insolvent. Hence, the release must benefit all to the extent of the share of the guarantor released.

Legal and Judicial Bonds•A bond offered by virtue of a provision of law or of a judicial order (like a bail bond) is a suretyship for the fulfillment of a principal obligation. •Therefore a bondsman is a surety and not a guarantor. If the person required to give a bond, should not be able to do so, a pledge or mortgage considered sufficient to cover his obligation shall be admitted in lieu thereof. (Art.2083) •A judicial bondsman has no benefit of excussion, for he cannot demand the exhaustion of the property of the principal debtor. The sub-surety in the same case, cannot demand the exhaustion of the property of the debtor or of the surety. (Art.2084)

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