Higgins v. Sellner

Summary

This 1920 Supreme Court case established the distinction between surety and guarantor under Philippine Civil Code. Plaintiffs sued to recover P10,000 from defendant Sellner based on his written guarantee of a promissory note. The Court held Sellner was a guarantor, not a surety, because his obligation was secondary and collateral, arising from an independent agreement rather than joint liability with principal debtors. The decision clarified that Civil Code 'fianza' provisions are analogous to common law guaranty, while 'in solidum' liability resembles common law suretyship. The Court also applied equitable principles, noting that creditors' three-year delay in providing notice of default, during which collateral stock became worthless, may have discharged the guarantor. This case remains significant for distinguishing surety and guarantor obligations in Philippine civil law.