The Asiatic Petroleum Company (Philippine Islands) v. Francisco Hizon y Singian

Summary

This case involves a surety contract dispute where Francisco Hizon y Singian guaranteed the obligations of petroleum products selling agent Justino A. David. The Supreme Court found that the principal agency contract was materially altered after the surety contract was signed by adding additional municipalities to David's territory without Hizon's knowledge or consent. Applying Civil Code principles of suretyship law, the Court held that such material alteration without the surety's consent completely releases the surety from liability. The case establishes an important precedent that sureties are discharged from their obligations when creditors and principal debtors materially modify the underlying contract without the surety's consent, reflecting fundamental principles of contract law and protection of sureties' rights under Philippine civil law.