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June 10, 2015

What Is Suretyship?

Suretyship is a contractual relation resulting from an agreement whereby one person, the surety, engages to be answerable for the debt, default or miscarriage of another, known as the principal. The suretys obligation is not an original and direct one for the performance of his own act, but merely accessory or collateral to the obligation contracted by the principal. 

Nevertheless, although the contract of a surety is in essence secondary only to a valid principal obligation, his liability to the creditor or promise of the principal is said to be direct, primary and absolute; in other words, he is directly and equally bound with the principal

The surety therefore becomes liable for the debt or duty of another although he possesses no direct or personal interest over the obligations nor does he receive any benefit therefrom.

- Garcia, Jr. v. Court of Appeals, G.R. No. 80201, 20 November 1990, 191 SCRA 493, citing Sykes v. Everett, 167 NC 600 and Miners Merchants Bank v. Gidley, 150 WVa229, 144 SE 2d 711

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