Jose Ma. Cacho v. J. A. Valles

Summary

This 1923 Supreme Court case established the principle of benefit of division among cosureties under Philippine Civil Law. The National Sporting Club issued a promissory note guaranteed by five individuals. When the note was unpaid, the trial court initially ruled that if any guarantor became insolvent, the remaining sureties would bear his proportionate share. The Supreme Court reversed, distinguishing between insolvency and declared bankruptcy. Citing Civil Code articles 1137, 1138, and 1837, the Court held that cosureties are entitled to the benefit of division and liable only for their aliquot part unless solidarity is expressly stipulated. The benefit of division is lost only upon formal bankruptcy declaration, not mere insolvency. This decision protects cosureties from extended liability beyond their agreed proportionate shares absent explicit solidary obligation.