Phil. Export v. V.P. Eusebio

FACTS: Respondent entered into contract with SOB for construction of Therapy Bldg. SOB demanded bonds to secure performance. Project was delayedDOCTRINE:By guaranty 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; if the person binds himself solidarily with the principal debtor, the contract is called suretyship.That the guarantee issued by the petitioner is unconditional and irrevocable does not make the petitioner a surety. As a guaranty, it is still characterized by its subsidiary and conditional quality because it does not take effect until the fulfillment of the condition. Unconditional guarantee is still subject to the condition that the principal debtor should default in his obligation first before resort to the guarantor could be had.