7/25/2019 Prudential Bank V

http://slidepdf.com/reader/full/prudential-bank-v 1/2

PRUDENTIAL BANK V. IAC

FACTS:

On August 8, 1962, Philippine Rayon Mills, Inc. (PRMI) entere into a contract !ith "issho #o.,

$t. o% &apan %or the i'portation o% tetile 'achineries uner a %ie*year e%erre pay'ent plan.+o e%%ect pay'ent %or sai 'achineries, PRMI applie %or a co''ercial letter o% creit !ith thePruential an- an +rust #o'pany in %aor o% "issho. y irtue o% sai application, thePruential an- opene $etter o% #reit "o. PP*6/062 %or 128,38.08.

+herea%ter, "issho re! an issue ra%ts against sai letter o% creit !hich !ere all pai 4y thePruential an- through its corresponent in &apan, the an- o% +o-yo, $t. +!o o% these ra%ts!ere accepte 4y PRMI through its presient, priate responent Anacleto R. #hi, !hile theothers !ere not.

5pon the arrial o% the 'achineries, the Pruential an- inorse the shipping ocu'ents toPRMI, !hich accepte eliery o% the sa'e. As a conition i'pose 4y Pruential on PRMI to

ta-e eliery o% the 'achineries, the latter eecute a trust receipt coering all 'achineries!hich !as signe 4y #hi in his capacity as Presient o% PRMI, in %aor o% Pruential. At the 4ac-o% the trust receipt is a printe %or' to 4e acco'plishe 4y t!o sureties !ho, 4y the ery ter'san conitions thereo%, !ere to 4e ointly an seerally lia4le to the Pruential an- shoulPRMI %ail to pay the total a'ount or any portion o% the ra%ts issue 4y "issho an pai %or 4yPruential. 7ai %or' !as signe 4y #hi. PRMI !as a4le to ta-e eliery o% the tetile'achineries an installe the sa'e at its %actory site.

7u4seuently, PRMI cease 4usiness operations an all the tetile 'achineries !ere sol.o!eer, its o4ligation arising %ro' the letter o% creit an the trust receipt re'aine unpai anunliuiate. Repeate %or'al e'ans %or the pay'ent o% the sai trust receipt yiele noresult. ence, the present action %or the collection o% the principal a'ount o% P96,/83.9

against PRMI an #hi.

ISSUE:

1. :O" priate responent #hi 'ay 4e consiere a guarantor 2. :O" he 'ay 4e ointly an seerally lia4le !ith PRMI %or the o4ligation sought to 4e

en%orce

HELD:

1. ;<7. +he o4ligation o% #hi is that o% a guarantor. +his is 4olstere 4y the last sentencein the letter o% creit !hich spea-s o% !aier o% ehaustion. !hich is ine%%ectie 4ecause

the space therein %or the party !hose property 'ay not 4e ehauste !as not %ille up.

5ner Article 2=8 o% the #iil #oe, the e%ense o% ehaustion (ecussion) 'ay 4e raise 4y aguarantor 4e%ore he 'ay 4e hel lia4le %or the o4ligation. Petitioner li-e!ise a'its that theuestione proision is a soliary guaranty clause, there4y clearly istinguishing it %ro' acontract o% surety.

2. "O. It, ho!eer, escri4e the guaranty as soliary 4et!een the guarantors> this !oulhae 4een correct i% t!o (2) guarantors ha signe it. +he clause ?!e ointly an

7/25/2019 Prudential Bank V

http://slidepdf.com/reader/full/prudential-bank-v 2/2

seerally agree an unerta-e? re%ers to the unerta-ing o% the t!o (2) parties !ho are tosign it or to the lia4ility eisting 4et!een the'seles. It oes not re%er to the unerta-ing4et!een either one or 4oth o% the' on the one han an the petitioner on the other !ithrespect to the lia4ility escri4e uner the trust receipt. <lse!ise state, their lia4ility isnot iisi4le as 4et!een the', i.e., it can 4e en%orce to its %ull etent against any one o% the'

<cussion is not a conition sine ua non %or the institution o% an action against a guarantor. In7outhern Motors, Inc. s. ar4osa, /3 this #ourt state@

B Although an orinary personal guarantor * not a 'ortgagor or plegor * 'ay e'an thea%ore'entione ehaustion, the creitor 'ay, prior thereto, secure a ug'ent against saiguarantor, !ho shall 4e entitle, ho!eer, to a e%er'ent o% the eecution o% sai ug'entagainst hi' until a%ter the properties o% the principal e4tor shall hae 4een ehauste to satis%ythe o4ligation inole in the case.C

#hiDs lia4ility is li'ite to the principal o4ligation in the trust receipt plus all the accessoriesthereo% incluing uicial costs> !ith respect to the latter, he shall only 4e lia4le %or those costs

incurre a%ter 4eing uicially reuire to pay./6 Interest an a'ages, 4eing accessories o% theprincipal o4ligation, shoul also 4e pai> these, ho!eer, shall run only %ro' the ate o% the %ilingo% the co'plaint. AttorneyDs %ees 'ay een 4e allo!e in appropriate cases.