case - zobel inc vs ca

8/19/2019 Case - Zobel Inc vs CA

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Zobel Inc. v. Court of Appeals

Facts: Spouses Claveria applied for a loan with Consolidated Bank(now SOLIDBANK) in the amount of !"#$ million to %nan&e the pur&hase of two maritime 'ares and one tu'oat whi&h would 'e used in their 'usiness! he loan was ranted su'*e&t to the &ondition that the spouses e+e&ute a&hattel mortae over the , vessels to 'e a&-uired and that a &ontinuinuarantee 'e e+e&uted '. A.ala International (now /OB0L) in favor of SOLIDBANK! Spouses areed thus the mortae and uarantee weree+e&uted! 1espondent spouses defaulted in pa.ment upon maturit. thusSOLIDBANK %led a &omplaint for sum of mone. with preliminar. atta&hmentthem and /o'el! 2etitioner (/o'el) moved to dismiss &ontendin that it haslost its riht to 'e su'roated to the %rst &hattel mortae in view of SOLIDBANK3s failure to reister the &hattel with the appropriate overnmentaen&. ('asis4 arti&le 5"5 of the NCC)! SOLIDBANK opposed &ontendin that/o'el is a suret.! 1C denied the motion to dismiss and ruled that /o'el is a suret.!2etitioner moved for re&onsideration 'ut was denied for la&k of merit! CA a6rmed!7en&e8 this petition!

Issue: 9hether or not petitioner under :Continuin ;uarant.<o'liated itself to SOLIDBANK as a uarantor or a suret.!

Ruling:  he Contra&t e+e&uted '. petitioner in favor of SOLIDBANK8al'eit denominated as a :Continuin ;uarant.8< is a &ontra&t of suret.! he terms of the &ontra&t &ateori&all. o'liates petitioner as :suret.< to indu&e SOLIDBANK toe+tend &redit to respondent spouses! One need not look too deepl. at the &ontra&tto determine the nature of the undertakin and the intention of the parties! he&ontra&t &learl. dis&loses that petitioner assumed lia'ilit. to SOLIDBANK8 as areular part. to the undertakin and o'liated itself as an oriinal promissor.! It

'ound itself *ointl. and severall. to the o'liation with the respondent spouses! Infa&t8 SOLIDBANK need not resort to all other leal remedies or e+haust respondentspouses3 properties 'efore it &an hold petitioner lia'le for o'liation! he use of theterm :uarantee< does not ipso fa&to mean that the &ontra&t is one of uarant.!Authorities re&oni=e that the word uarantee is fre-uentl. emplo.ed in 'usinesstransa&tions to des&ri'e not the se&urit. of the de't 'ut an intention to 'e 'ound '.a primar. or independent o'liation!

7avin thus esta'lished that petitioner is a suret.8 Arti&le 5"5 of the NCC%nds no appli&ation to the &ase at 'ar! But assumin that Arti&le 5"5 is appli&a'le8SOLIDBANK3s failure to reister the &hattel mortae did not release petitioner fromthe o'liation! In the Continuin ;uarant.8 petitioner 'ound itself to the &ontra&t

irrespe&tive of the e+isten&e of an. &ollateral! It even released SOLIDBANK from an.fault or nelien&e that ma. impair the &ontra&t!