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    Willex V CA and Interbank

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    This case involves a continuing guaranty agreement between Inter-Resin Industrial Corporation, Willex Plastic Corporation, and Investment and Underwriting Corporation of the Philippines (IUCP). Inter-Resin obtained a letter of credit from Manila Banking Corporation that was secured by surety agreements with IUCP. Inter-Resin and Willex then executed a continuing guaranty with IUCP to pay any sums obtained by Inter-Resin. IUCP paid Manila Bank and then demanded reimbursement from Inter-Resin and Willex under the guaranty agreement. The Supreme Court held that Willex could be held jointly and severally liable with Inter-Resin for the amounts paid by IUCP to Manila Bank under the terms of the

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    Willex V CA and Interbank

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    kkk
    260 views2 pages
    This case involves a continuing guaranty agreement between Inter-Resin Industrial Corporation, Willex Plastic Corporation, and Investment and Underwriting Corporation of the Philippines (IUCP). Inter-Resin obtained a letter of credit from Manila Banking Corporation that was secured by surety agreements with IUCP. Inter-Resin and Willex then executed a continuing guaranty with IUCP to pay any sums obtained by Inter-Resin. IUCP paid Manila Bank and then demanded reimbursement from Inter-Resin and Willex under the guaranty agreement. The Supreme Court held that Willex could be held jointly and severally liable with Inter-Resin for the amounts paid by IUCP to Manila Bank under the terms of the

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    Willex v CA and Interbank

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    This case involves a continuing guaranty agreement between Inter-Resin Industrial Corporation, Willex Plastic Corporation, and Investment and Underwriting Corporation of the Philippines (IUCP). Inter-Resin obtained a letter of credit from Manila Banking Corporation that was secured by surety agreements with IUCP. Inter-Resin and Willex then executed a continuing guaranty with IUCP to pay any sums obtained by Inter-Resin. IUCP paid Manila Bank and then demanded reimbursement from Inter-Resin and Willex under the guaranty agreement. The Supreme Court held that Willex could be held jointly and severally liable with Inter-Resin for the amounts paid by IUCP to Manila Bank under the terms of the

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    260 views2 pages

    Willex V CA and Interbank

    Uploaded by

    kkk
    This case involves a continuing guaranty agreement between Inter-Resin Industrial Corporation, Willex Plastic Corporation, and Investment and Underwriting Corporation of the Philippines (IUCP). Inter-Resin obtained a letter of credit from Manila Banking Corporation that was secured by surety agreements with IUCP. Inter-Resin and Willex then executed a continuing guaranty with IUCP to pay any sums obtained by Inter-Resin. IUCP paid Manila Bank and then demanded reimbursement from Inter-Resin and Willex under the guaranty agreement. The Supreme Court held that Willex could be held jointly and severally liable with Inter-Resin for the amounts paid by IUCP to Manila Bank under the terms of the

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    WILLEX V CA

    AUTHOR:
    NOTES: (if applicable)

    GUARANTY
    NATURE OF THE CASE: REVIEW ON CERTIORARI
    FACTS: (chronological order)
    Inter-Resin Industrial Corporation opened a letter of credit with the

    Manila Banking Corporation.


    To secure payment of credit accommodation, Inter-Resin and
    Investment and Underwriting Corp of the Philippines (IUCP) executed
    two continuing surety agreements binding themselves to pay
    ManilaBank solidarily for obligations of any every kind which InterResin may be indebted.
    Inter-Resin and Willex executed a continuing Guaranty in favor of
    IUCP where Inter- resin and Willex bound themselves jointly and
    severally to pay IUCP for sums Inter-Resin obtains.
    IUCP paid Manila Bank (P4M). Atrium, IUCPs successor, demanded
    from interresing and Willex for reimbursement under the Guaranty
    agreement. The latter parties did not pay.
    Atrium filed a case.
    Inter-Resin paid Interbank, Atriums successor, the sum of P687,500
    representing proceeds of its fire insurance policy.
    Inter Resin contends that the Guaranty was already paid.
    Willex contends that it is only a guarantor thus not primarily liable but
    secondarily.
    TC ordered Inter Resin and Willex to pay.
    Appealled. CA affirmed TC decision.
    Willex contends that its liability is for sums obtained by InterResin from
    Interbank and not for sums paid by Interbank to Manilabank for InterResin.

    ISSUE(S): W/N Willex may be held jointly and severally liable with Inter
    Resin under the Continuing Guaranty for the amount paid my Interbank to
    Manilabank
    HELD: Willex may be held liable for said transaction.
    RATIO:
    CA and TC found that the Continuing guaranty was required by
    Interbank before it agreed to secure the credit accommodation granted

    to Inter-Resin by Manila Bank.

    Nor does the record show any other transaction under which Inter-

    Resin Industrial may have obtained sums of money from Interbank. It


    can reasonably be assumed that Inter-Resin Industrial and Willex
    Plastic intended to indemnify Interbank for amounts which it may have
    paid Manilabank on behalf of Inter-Resin Industrial.
    ***Willex argues that Continuing Guaranty, being an accessory

    contract, cannot exist because of the absence of a valid principal


    obligation.

    Consideration necessary to support a surety obligation need not pass


    directly to the surety, a consideration moving to the principal alone is
    sufficient.
    Willex also argued that Continuing Guaranty cannot be retroactively
    applied as to secure the two Continuing Surety Agreements
    It was held that by its very nature a continuing suretyship contemplates

    a future course of dealing. It is prospective in its operation and is


    generally intended to provide security with respect to future
    transactions. By no means, however, was it meant in that case that in
    all instances a contract of guaranty or suretyship should be prospective
    in application.
    *intention of the parties is controlling.
    Willex argues that it cannot be proceeded against without exhausting
    all property of Inter-Resin. (EXCUSSION)
    There was a stipulation which renounces the right of excussion. In fact,
    WIllex was solidarily liable with InterResin.
    CASE LAW/ DOCTRINE:

    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.
    DISSENTING/CONCURRING OPINION(S): (if applicable)

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