Case Digest (G.R. No. 121683)
Facts:
Fortune Motors (Phils.) Corporation and Edgar L. Rodrigueza (petitioners) v. The Honorable Court of Appeals and Filinvest Credit Corporation (respondents), G.R. No. 112191, February 07, 1997, Supreme Court Third Division, Panganiban, J., writing for the Court. The petition for review under Rule 45 sought to set aside the Court of Appeals' September 30, 1993 decision in CA G.R. CV No. 09136 which affirmed the Regional Trial Court of Manila, Branch 11, in Civil Case No. 83-21994.On August 4, 1981, Joseph L. G. Chua and petitioner Edgar L. Rodrigueza each executed undated Surety Undertakings absolutely, unconditionally and solidarily guaranteeing to Filinvest Credit Corporation and its affiliates “the full, faithful and prompt performance, payment and discharge of any and all obligations and agreements of Fortune” now in force or thereafter made. On April 5, 1982, Fortune Motors, Filinvest and Canlubang Automotive Resources Corporation (CARCO) entered into an Automotive Wholesale Financing Agreement (AWFA) under which CARCO would deliver vehicles to Fortune; Fortune would execute trust receipts and accept drafts, which were to be discounted and assigned to Filinvest, which would pay for the vehicles.
Several deliveries were made and trust receipts, drafts and deeds of assignment were executed in favor of Filinvest. When drafts matured, Fortune failed to remit proceeds from vehicle sales and failed to turn over unsold vehicles covered by trust receipts. Filinvest sent demand letters (including December 12, 1983) to Fortune and separately to Chua and Rodrigueza; payment was not made. Filinvest then filed a complaint for sum of money with preliminary attachment against Fortune, Chua and Rodrigueza in the RTC.
The trial court (presided by Judge Rosalio A. De Leon) found no factual issues except for the correct balance, admitted plaintiff’s evidence, denied defendants’ Motion for Judgment on Demurrer to Evidence (which argued the surety contracts were void for lack of an existing principal obligation), and, after defendants failed to present evidence on scheduled dates, rendered judgment on December 17, 1985 ordering the defendants to pay jointly and severally ...(Subscriber-Only)
Issues:
- Can a suretyship validly secure obligations that did not yet exist at the time the surety undertaking was executed?
- Did the Automotive Wholesale Financing Agreement effect a novation that extinguished the prior surety undertakings?
- Was the amount claimed by Filinvest...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)