CHAPTER 4 SEQUESTRATION OR JUDICIAL DEPOSIT

A judicial deposit or sequestration takes place when an attachment or seizure of property in

litigation is ordered by the Court. (Art. 2005)

Nature: It is auxiliary to the case pending in court.

Purpose: To maintain the status quo during the pendency of the litigation or to insure the right
of the parties to the property in case of favorable judgment.

Object of judicial deposit: may be movables or immovables (art. 2006)

Obligations of the depositary of sequestered property?

To take care of the property with the diligence of a good father of the family (Art. 2008)

When depositary can be relieved of liability?

Only when the controversy ends, unless the court orders otherwise (Art. 2007)

Judicial and extra judicial deposits distinguished?

Judicial Extrajudicial

Cause or origin By will of the court By will of the parties

Purpose As security and to secure the Custody and safekeeping of

right of a party to recover in a the thing
case of a favorable judgment

Subject matter Either movable or immovable Only movable property

remuneration Always remunerated May be compensated or not

but generally gratuitous

In whose behalf it is held Person who has a right Depositor or third person
designated

When must the thing be Upon order of the court or Upon demand of the
returned when litigation is ended depositor

GUARANTY

Guaranty defined.
 Guaranty is a contract where a person called the guarantor binds himself to the creditor to
fulfill the obligation of the principal debtor in case the latter should fail to do so. (Art. 2047 par
1)

Suretyship defined.

Suretyship is a contract where a person binds himself solidarily with the principal debtor.
(Art. 2047 par 2)

Guaranty vs. Suretyship

GUARANTY SURETYSHIP

Collateral undertaking Surety is an original promissory undertaking

Guarantor is secondarily liable Surety is primarily liable

Guarantor binds himself to pay if the principal Surety undertakes to pay if principal does not
debtor cannot pay pay

Insurer of solvency of the debtor Insurer of debt

Guarantor can avail of the benefit of Surety cannot avail of the benefit of excussion
excussion and division in case creditor and division
proceeds against him

Similarity between Guaranty and Suretyship

Each promises to answer for the debt, default or miscarriage of another.

Characteristics of the contract of guaranty

1. It is a contract between the guarantor and the creditor.

2. It is accessory because it is dependent for its existence upon the principal obligation
guaranteed by it.

3. It is subsidiary because it takes effect only when the principal debtor fails in his obligation.

4. It is unilateral because it gives rise only to a duty on the part of the guarantor in relation to
the creditor and not vice versa.

Thus the contract of guaranty may be undertaken without the knowledge of the
principal debtor or even against his will. (see Art. 2050) It exists for the benefit of the
creditor and not for the benefit of the principal debtor who is not a party to the contract of
guaranty.

5. It is consensual

6. It is nominate

7. It cannot be presumed (Art. 2025)

8. It is covered by the statute of frauds, being a special promise to answer for the debt,
default or miscarriage of another.

Thus, an oral promise of guaranty is not enforceable.

9. It is generally gratuitous (Art. 2048), unless there is stipulation to the contrary.

Married woman as a guarantor (Article 249)

A married woman who acts as guarantor ordinarily binds only her separate(paraphernal)
property.

She may also bind the community or conjugal property, with the husband’s consent or in
cases provided by law.

Effect of Guaranty undertaken without the knowledge of the debtor

Article 1236 and 1237 applies. Thus a person who pays without the knowledge of the
debtor can recover only, in so far as the payment has been beneficial to the debtor(Art. 1236).
He cannot compel the creditor to subrogate him in his (creditor’s) rights such as those arising
from mortgage, guaranty or penalty.”

Classification of guaranty as to its origin (Art. 2051)

 Conventional - one constituted by agreement of the parties.

 Legal - one imposed by virtue of the provision of the law

 Judicial - one constituted by decree of court/ one required by court to guarantee the
eventual right of one of the parties in a case

Classification of guaranty as to consideration (Art. 2051)

 Gratuitous - one where the guarantor does not receive any price or remuneration for
acting as such. (Art. 2048)

 Onerous - one where the guarantor receives valuable consideration for his guaranty

Classification as to the person guaranteed

 Single

 In favor of the principal debtor

 Double or sub-guaranty

 In favor of the other guarantor, with the latter’s consent

 In favor of the other guarantor, without his knowledge or even over his objection
Necessity of a valid principal obligation (Art. 2052)

Note: if the principal obligation is void, the guaranty is also void, since a guaranty is
merely an accessory contract.

Obligations that may be secured In a contract of guaranty

1. Valid obligations (Art. 2052)

2. Voidable obligations (Art. 2052)

3. Unenforceable obligations (Art. 2052)

4. Natural obligations (Art. 2052) - when the debtor himself offers a guaranty for his natural
obligation, he implicitly recognizes his liability

5. Conditional Obligation (Art. 2053) - subject to suspensive condition.

Guaranty of future debts

1. future debts may be guaranteed even if the amount is not yet known

2. But, there could be no claim against the guarantor until the amount of debt is ascertained
and demandable.

Guarantor’s liability cannot exceed principal obligation, but he may bind himself for
less ( Article 2054)

A guaranty is not presumed, it must be express and in writing (see Art. 2055)