087 Willex vs CA, 256 SCRA 478, GR No. 103066, Apr 25, 1996 Facts : In 1978, Inter-Resin took out a loan from Manila Bank. As additional security, Inter-Resin and Investment Underwriting (IUCP) executed a Continuing Surety Agreement stating that they are liable to Manila Bank solidarily for the loan taken out by Inter-Resin. In 1979, Inter-Resin and Willex Plastic executed a Continuing Guarantee for the loan which Inter-Resin obtained from Investment Underwriting Underwriti ng to the extent of P5M. In1981, In1981, Investment Underwriting (IUCP) paid Manila Bank P4M to satisfy Inter- Resin’s . In, 1978 Obligation Investment Underwriting (IUCP) then demanded payment of the P4M from both Inter-Resin and Willex oInter-Resin paid IUCP P600K from the proceeds of its fire insurance. Willex denied obligation, it alleged that it is only a guarantor of the principal, hence its liability was only secondary to the principal and that it did not receive consideration nor benefit from the contract between the bank and Inter-Resin. Willex insisted that IUCP should pursue Inter-Resin and apply to the loan the assets of the latter first before going after it. Willex further alleged that it is guarantor of a loan to Manila Bank and not to Interbank, hence the Continuing Guaranty cannot be retroactive applied as contracts of suretyship contemplates future dealing. ISSUE: WON Willex is liable as guarantor for the loans obtained by Inter-Resin to IUCP? · HELD: Yes. Intent is controlling: clear from the evidence that the Continuing Guarantee executed by Willex with InterResin would cover sums obtained (in the past – retroactive) retroactive) and/or to be obtained by Inter-Resin Industrial from Interbank Although a contract of suretyship is ordinarily not to be construed as retrospective, in the end the intention of the parties as revealed by the evidence is controlling – apply apply it to the 1978 loan. Guarantor or surety is bound by the same consideration that makes the contract effective between the principal parties thereto. . . . It is never necessary that a guarantor or surety should receive any part or benefit, if such there be, accruing to his principal. PNB vs. CA, Luzon Surety Co. Facts: Estanislao Depusoy, and the Republic of the Philippines, represented by the Director Director of PublicWorks PublicWorks,, entered into a building building contract, contract, for the construction of the GSTS GSTS building at Arroceros Arroceros Street ,Manila, Depusoy to furnish all materials, labor, plans, and supplies needed in the construction.Depusoy applied for credit accommodation accommodation with the plaintiff. This was approved by the Board of Directors in various resolutions subject to the conditions that he would assign all payments to be received from the Bureau of Public Works of the GSIS to the bank, furnish a surety bond, and the surety to deposit P10,000.00 to the plaintiff. Thetotal accommodation granted to Depusoy was P100, 000.00. This was later extended by another P10,000.00 and P25,000.00, but in no case should the loan exceed P100,000.00. In compliance with these conditions, Depusoy executed a Deed of Assignment of all money to be received by him from the GSIS to PNB. Depusoy defaulted in his building contract with the Bureau of Public Works, and sometime in September, 1957, the Bureau of Public Works rescinded its contract with Dernisoy. No further amounts were thereafter paid by the GSIS to lie plaintiff bank. The amount of the loan of Depusoy which remains unpaid, including interest, is over P100,000.00. Demands for payment were made upon Depusoy and Luzon, and as no payment was made, therefore herein petitioner filed with the trial court a complaint against Estanislao Depusoy and private respondent respondent Luzon Luzon Surety Co. Inc. (LSCI). Issue: Issue: WON Luzon Luzon Surety is liable Held: the bonds executed executed by private respondent LSCI were to guarantee the faithful performance of Depusoy of his obligation under the Deed of Assignment and not to guarantee payment of the loans or the debt of Depusoy to petitioner to the extent of P100,000.00. Besides, even if there had been any doubt on the terms and conditions of the surety agreement, the doubt should be resolved in favor of the surety. As concretely put in Article 2056 of the Civil Code, "A guaranty is not presumed, it must be ex-pressed and cannot extend to more than what is stipulated therein." LSCI is liable to the full extent thereof, such liability is strictly limited to that assumed by its terms."
