Visayan Surety & Insurance Corporation v. Fructuosa Tabares

Summary

This case involves a guaranty/indemnity dispute where Visayan Surety & Insurance Corporation sought to recover P2,511.84 it paid to Bachrach Motor Co. under a guaranty agreement. Defendants had executed a joint and several indemnity bond for P5,300 related to purchase of ten Austin cars. When the original obligors defaulted, plaintiff paid the creditor and sought reimbursement from all guarantors including appellant Roman A. Cruz. Cruz argued he only guaranteed his co-defendants' obligations and claimed novation occurred through subsequent agreements. The Supreme Court rejected both defenses, holding Cruz liable as joint and several guarantor under the original indemnity agreement. The Court found no novation occurred since the subsequent contract neither expressly declared such intention nor contained incompatible terms with the original guaranty, applying Article 1204 of the Civil Code.