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International Finance Corporation vs. Imperial textile Mills, Inc

INTERNATIONAL FINANCE CORPORATION, Petitioner, versus IMPERIAL TEXTILE MILLS, INC.,** Respondent.

G.R. No. 160324 | 2005-11-15

D E C I S I O N 


PANGANIBAN, J.: 

The terms of a contract govern the rights and obligations of the contracting parties. When the obligor undertakes to be "jointly and severally" liable, it means that the obligation is solidary. If solidary liability was instituted to "guarantee" a principal obligation, the law deems the contract to be one of suretyship. 

The creditor in the present Petition was able to show convincingly that, although denominated as a "Guarantee Agreement," the Contract was actually a surety. Notwithstanding the use of the words "guarantee" and "guarantor," the subject Contract was indeed a surety, because...