Spouses Vicente v. Westmont Bank

Summary

This case involves the effect of a compromise agreement between a creditor-bank and a surety on the remaining liability of principal debtors. Spouses Papasin borrowed P492,700.00 from Westmont Bank, with Gil Dago-ob as surety under a continuing suretyship agreement. When the spouses defaulted, Westmont sued both parties. The bank later settled with Gil for P300,000.00 partial payment, dismissing him from the case. The RTC ruled this discharged the spouses' remaining liability, but the CA and Supreme Court disagreed. The Supreme Court held that under Article 1216 of the Civil Code, a creditor may pursue any solidary debtor until full satisfaction of the debt. The compromise agreement only pertained to Gil's release and did not contain provisions benefiting the principal debtors. This case clarifies that partial payment by a surety does not automatically release principal debtors from their remaining solidary obligations.