SECONDDIVISION

[G.R.No.103066.April25,1996]

WILLEX PLASTIC INDUSTRIES, CORPORATION, petitioner, vs. HON.

COURT OF APPEALS and INTERNATIONAL CORPORATE BANK,
respondents.
SYLLABUS
1. REMEDIAL LAW EVIDENCE PAROL EVIDENCE RULE FAILURE TO OBJECT TO
THEPRESENTATIONOFPAROLEVIDENCECONSTITUTESAWAIVERTHEREOF.
Ithasbeenheldthatexplanatoryevidencemaybereceivedtoshowthecircumstances
underwhichadocumenthasbeenmadeandtowhatdebtitrelates.Atallevents,Willex
Plastic cannot now claim that its liability is limited to any amount which Interbank, as
creditor, might give directly to InterResin Industrial as debtor because, by failing to
objecttotheparolevidencepresented,WillexPlasticwaivedtheprotectionoftheparol
evidencerule.
2.ID. ID. FINDINGS OF FACT OF THE TRIAL COURT RULEAPPLICABLE IN CASE
ATBAR.Thetrialcourtfoundthatitwastosecuretheguaranteemadebyplaintiffofthe
creditaccommodationgrantedtodefendantIRIC[InterResinIndustrial]byManilabank,
[that]theplaintiffrequireddefendantIRICtoexecuteachattelmortgageinitsfavorand
a Continuing Guaranty which was signed by the defendant Willex Plastic Industries
Corporation. Similarly, the Court of Appeals found it to be an undisputed fact that to
secure the guarantee undertaken by plaintiffappellee [Interbank] of the credit
accommodation granted to InterResin Industrial by Manilabank, plaintiffappellee
required defendantappellant to sign a Continuing Guaranty. These factual findings of
thetrialcourtandoftheCourtofAppealsarebindingonusnotonlybecauseoftherule
that on appeal to the Supreme Court such findings are entitled to great weight and
respect but also because our own examination of the record of the trial court confirms
thesefindingsofthetwocourts.
3. CIVIL LAW SPECIAL CONTRACTS GUARANTY THE CONSIDERATION
NECESSARY TO SUPPORTA SURETY OBLIGATION NEED NOT PASS DIRECTLY
TO THE SURETY, A CONSIDERATION MOVING TO THE PRINCIPAL ALONE IS
SUFFICIENT.WillexPlasticarguesthattheContinuingGuaranty,beinganaccessory
contract,cannotlegallyexistbecauseoftheabsenceofavalidprincipalobligation. Its
contention is based on the fact that it is not a party either to the Continuing Surety
AgreementortotheloanagreementbetweenManilabankandInterResinIndustrial.Put
inanotherwaytheconsiderationnecessarytosupportasuretyobligationneednotpass
directlytothesurety,aconsiderationmovingtotheprincipalalonebeingsufficient.Fora
guarantororsuretyisboundbythesameconsiderationthatmakesthecontracteffective
betweentheprincipalpartiesthereto....Itisnevernecessarythataguarantororsurety
shouldreceiveanypartorbenefit,ifsuchtherebe,accruingtohisprincipal.
4. ID. ID. ID. ALTHOUGH A CONTRACT OF SURETY IS ORDINARILY NOT TO BE
CONSTRUED AS RETROSPECTIVE, IN THE END THE INTENTION OF THE
PARTIES AS REVEALED BY THE EVIDENCE IS CONTROLLING. Willex Plastic
contendsthattheContinuingGuarantycannotberetroactivelyappliedsoastosecure
the payments made by Interbank under the two Continuing SuretyAgreements. Willex
PlasticinvokestherulinginElVencedorv.Canlas(44Phil.699[1923])andDiov.Court

ofAppeals(216SCRA9[1992])insupportofitscontentionthatacontractofsuretyship
or guaranty should be applied prospectively. The cases cited are, however,
distinguishablefromthepresentcase.InElVencedorv.Canlasweheldthatacontract
ofsuretyshipisnotretrospectiveandnoliabilityattachesfordefaultsoccurringbeforeit
isenteredintounlessanintenttobesoliableisindicated.Therewefoundnothinginthe
contract to show that the parties intended the surety bonds to answer for the debts
contractedprevioustotheexecutionofthebonds.Incontrast,inthiscase,thepartiesto
theContinuingGuarantyclearlyprovidedthattheguarantywouldcoversumsobtained
and/ortobeobtainedbyInterResinIndustrialfromInterbank.Ontheotherhand,inDio
v. Court of Appeals the issue was whether the sureties could be held liable for an
obligationcontractedaftertheexecutionofthecontinuingsuretyagreement.Itwasheld
thatbyitsverynatureacontinuingsuretyshipcontemplatesafuturecourseofdealing.It
isprospectiveinitsoperationandisgenerallyintendedtoprovidesecuritywithrespect
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.
Indeed, as we also held in Bank of the Philippine Islands v. Foerster, (49 Phil. 843
[1926]) although a contract of suretyship is ordinarily not to be construed as
retrospective, in the end the intention of the parties as revealed by the evidence is
controlling. What was said there applies mutatis mutandis to the case at bar: In our
opinion,theappealedjudgmentiserroneous.Itisverytruethatbondsorothercontracts
ofsuretyshipareordinarilynottobeconstruedasretrospective,butthatrulemustyield
to the intention of the contracting parties as revealed by the evidence, and does not
interfere with the use of the ordinary tests and canons of interpretation which apply in
regardtoothercontracts.Inthepresentcasethecircumstancessoclearlyindicatethat
the bond given by Echevarria was intended to cover all of the indebtedness of the
Arrocera upon its current account with the plaintiff Bank that we cannot possibly adopt
theviewofthecourtbelowinregardtotheeffectofthebond.
APPEARANCESOFCOUNSEL
TangleChua,Cruz&Aquinoforpetitioner.
FeB.Macalino&AssociatesforrespondentInterbank.

DECISION
MENDOZA,J.:

Thisisapetitionforreviewoncertiorariofthedecision[1]oftheCourtofAppealsinC.A.
G.R.CVNo.19094,affirmingthedecisionoftheRegionalTrialCourtoftheNationalCapital
Judicial Region, Branch XLV, Manila, which ordered petitioner Willex Plastic Industries
Corporation and the InterResin Industrial Corporation, jointly and severally, to pay private
respondent International Corporate Bank certain sums of money, and the appellate courts
resolutionofOctober17,1989denyingpetitionersmotionforreconsideration.
Thefactsareasfollows:
Sometime in 1978, InterResin Industrial Corporation opened a letter of credit with the
Manila Banking Corporation. To secure payment of the credit accommodation, InterResin
Industrial and the Investment and Underwriting Corporation of the Philippines (IUCP)
executedtwodocuments,bothentitledContinuingSuretyAgreementanddatedDecember
1, 1978, whereby they bound themselves solidarily to pay Manilabank obligations of every
kind, on which the [InterResin Industrial] may now be indebted or hereafter become
indebted to the [Manilabank]. The two agreements (Exhs. J and K) are the same in all
respects, except as to the limit of liability of the surety, the first surety agreement being
limitedtoUS$333,830.00,whilethesecondoneislimitedtoUS$334,087.00.

On April 2, 1979, InterResin Industrial, together with Willex Plastic Industries Corp.,
executed a Continuing Guaranty in favor of IUCP whereby For and in consideration of the
sumorsumsobtainedand/ortobeobtainedbyInterResinIndustrialCorporationfromIUCP,
InterResin Industrial and Willex Plastic jointly and severally guaranteed the prompt and
punctualpaymentatmaturityoftheNOTE/SissuedbytheDEBTOR/S...totheextentof
theaggregateprincipalsumofFIVEMILLIONPESOS(P5,000,000.00)PhilippineCurrency
andsuchinterests,chargesandpenaltiesashereaftermaybespecified.
On January 7, 1981, following demand upon it, IUCP paid to Manilabank the sum of
P4,334,280.61 representing InterResin Industrials outstanding obligation. (Exh. M1) On
February 23 and 24, 1981, Atrium Capital Corp., which in the meantime had succeeded
IUCP,demandedfromInterResinIndustrialandWillexPlasticthepaymentofwhatit(IUCP)
had paid to Manilabank. As neither one of the sureties paid, Atrium filed this case in the
courtbelowagainstInterResinIndustrialandWillexPlastic.
OnAugust11,1982,InterResinIndustrialpaidInterbank,whichhadinturnsucceeded
Atrium,thesumofP687,500.00representingtheproceedsofitsfireinsurancepolicyforthe
destructionofitsproperties.
Initsanswer,InterResinIndustrialadmittedthattheContinuingGuarantywasintended
to secure payment toAtrium of the amount of P4,334,280.61 which the latter had paid to
Manilabank.Itclaimed,however,thatithadalreadyfullypaiditsobligationtoAtriumCapital.
On the other hand, Willex Plastic denied the material allegations of the complaint and
interposedthefollowingSpecialAffirmativeDefenses:
(a)Assumingarguendothatmaindefendantisindebtedtoplaintiff,theformersliabilityis
extinguishedduetotheaccidentalfirethatdestroyeditspremises,whichliabilityiscoveredby
sufficientinsuranceassignedtoplaintiff
(b)Again,assumingarguendo,thatthemaindefendantisindebtedtoplaintiff,itsaccountisnowvery
muchlesserthanthosestatedinthecomplaintbecauseofsomepaymentsmadebytheformer
(c)ThecomplaintstatesnocauseofactionagainstWILLEX
(d)WILLEXisonlyaguarantoroftheprincipalobligor,andthus,itsliabilityisonlysecondaryto
thatoftheprincipal
(e)Plaintifffailedtoexhausttheultimateremedyinpursuingitsclaimagainsttheprincipalobligor
(f)Plaintiffhasnopersonalitytosue.
On April 29, 1986, Interbank was substituted as plaintiff in the action. The case then
proceededtotrial.
OnMarch4,1988,thetrialcourtdeclaredInterResinIndustrialtohavewaivedtheright
topresentevidenceforitsfailuretoappearatthehearingdespiteduenotice.Ontheother
hand, Willex Plastic rested its case without presenting any evidence. Thereafter Interbank
andWillexPlasticsubmittedtheirrespectivememoranda.
OnApril 5, 1988, the trial court rendered judgment, ordering InterResin Industrial and
WillexPlasticjointlyandseverallytopaytoInterbankthefollowingamounts:
(a)P3,646,780.61,representingtheirindebtednesstotheplaintiff,withinterestof17%perannum
fromAugust11,1982,whenInterResinIndustrialpaidP687,500.00totheplaintiff,untilfull
paymentofthesaidamount
(b)Liquidateddamagesequivalentto17%oftheamountdueand

(c)Attorneysfeesandexpensesoflitigationequivalentto20%ofthetotalamountdue.
InterResinIndustrialandWillexPlasticappealedtotheCourtofAppeals.WillexPlastic
filed its brief, while InterResin Industrial presented a Motion to Conduct Hearing and to
ReceiveEvidencetoResolveFactualIssuesandtoDeferFilingoftheAppellantsBrief.After
itsmotionwasdenied,InterResinIndustrialdidnotfileitsbriefanymore.
OnFebruary22,1991,theCourtofAppealsrenderedadecisionaffirmingtherulingof
thetrialcourt.
Willex Plastic filed a motion for reconsideration praying that it be allowed to present
evidencetoshowthatInterResinIndustrialhadalreadypaiditsobligationtoInterbank,but
itsmotionwasdeniedonDecember6,1991:
Themotionisdeniedforlackofmerit.WedenieddefendantappellantInterResinIndustrialsmotion
forreceptionofevidencebecausethesituationorsituationsinwhichwecouldexercisethepower
underB.P.129didnotexist.Movantherehasnotpresentedanyargumentwhichwouldshow
otherwise.
Hence,thispetitionbyWillexPlasticforthereviewofthedecisionofFebruary22,1991
andtheresolutionofDecember6,1991oftheCourtofAppeals.
Petitionerraisesanumberofissues.
[1]ThemainissueraisediswhetherundertheContinuingGuarantysignedonApril2,
1979 petitioner Willex Plastic may be held jointly and severally liable with InterResin
IndustrialfortheamountpaidbyInterbanktoManilabank.
As already stated, the amount had been paid by Interbanks predecessorininterest,
Atrium Capital, to Manilabank pursuant to the Continuing Surety Agreements made on
December1,1978.IndenyingliabilitytoInterbankfortheamount,WillexPlasticarguesthat
undertheContinuingGuaranty,itsliabilityisforsumsobtainedbyInterResinIndustrialfrom
Interbank, not for sums paid by the latter to Manilabank for the account of InterResin
Industrial. In support of this contention Willex Plastic cites the following portion of the
ContinuingGuaranty:
Forandinconsiderationofthesumsobtainedand/ortobeobtainedbyINTERRESININDUSTRIAL
CORPORATION,hereinafterreferredtoastheDEBTOR/S,fromyouand/oryourprincipal/sasmay
beevidencedbypromissorynote/s,checks,billsreceivable/sand/orotherevidence/sofindebtedness
(hereinafterreferredtoastheNOTE/S),I/Weherebyjointlyandseverallyandunconditionally
guaranteeuntoyouand/oryourprincipal/s,successor/sandassignsthepromptandpunctualpayment
atmaturityoftheNOTE/SissuedbytheDEBTOR/Sinyourand/oryourprincipal/s,successor/sand
assignsfavortotheextentoftheaggregateprincipalsumofFIVEMILLIONPESOS
(P5,000,000.00),PhilippineCurrency,andsuchinterests,chargesandpenaltiesasmayhereinafterbe
specified.
Thecontentionisuntenable.WhatWillexPlastichasoverlookedisthefactthatevidence
aliundewasintroducedinthetrialcourttoexplainthatitwasactuallytosecurepaymentto
Interbank (formerly IUCP) of amounts paid by the latter to Manilabank that the Continuing
Guaranty was executed. In its complaint below, Interbanks predecessorininterest. Atrium
Capital,alleged:
5.tosecuretheguaranteemadebyplaintiffofthecreditaccommodationgrantedtodefendant
IRIC [InterResin Industrial] by Manilabank, the plaintiff required defendant IRIC [Inter
Resin Industrial] to execute a chattel mortgage in its favor and a Continuing Guaranty
whichwassignedbytheotherdefendantWPIC[WillexPlastic].

Initsanswer,InterResinIndustrialadmittedthisallegationalthoughitclaimedthatithad

alreadypaiditsobligationinitsentirety.Ontheotherhand,WillexPlastic,whiledenyingthe
allegationinquestion,merelydidsoforlackofknowledgeorinformationofthesame.But,at
the hearing of the case on September 16, 1986, when asked by the trial judge whether
Willex Plastic had not filed a crossclaim against InterResin Industrial, Willex Plastics
counselrepliedinthenegativeandmanifestedthattheplaintiffinthiscase[Interbank]isthe
guarantorandmyclient[WillexPlastic]onlysignedasaguarantortotheguarantee.[2]
ForitspartInterbankadducedevidencetoshowthattheContinuingGuarantyhadbeen
made to guarantee payment of amounts made by it to Manilabank and not of any sums
given by it as loan to InterResin Industrial. Interbanks witness testified under cross
examination by counsel for Willex Plastic that Willex guaranteed the exposure/of whatever
exposure of ACP [Atrium Capital] will later be made because of the guarantee to Manila
BankingCorporation.[3]
Ithasbeenheldthatexplanatoryevidencemaybereceivedtoshowthecircumstances
underwhichadocumenthasbeenmadeandtowhatdebtitrelates.[4]Atallevents,Willex
PlasticcannotnowclaimthatitsliabilityislimitedtoanyamountwhichInterbank,ascreditor,
mightgivedirectlytoInterResinIndustrialasdebtorbecause,byfailingtoobjecttotheparol
evidencepresented,WillexPlasticwaivedtheprotectionoftheparolevidencerule.[5]
Accordingly,thetrialcourtfoundthatitwastosecuretheguaranteemadebyplaintiffof
thecreditaccommodationgrantedtodefendantIRIC[InterResinIndustrial]byManilabank,
[that] the plaintiff required defendant IRIC to execute a chattel mortgage in its favor and a
Continuing Guaranty which was signed by the defendant Willex Plastic Industries
Corporation.[6]
Similarly, the Court of Appeals found it to be an undisputed fact that to secure the
guaranteeundertakenbyplaintiffappellee[Interbank]ofthecreditaccommodationgranted
to InterResin Industrial by Manilabank, plaintiffappellee required defendantappellants to
sign a Continuing Guaranty. These factual findings of the trial court and of the Court of
AppealsarebindingonusnotonlybecauseoftherulethatonappealtotheSupremeCourt
suchfindingsareentitledtogreatweightandrespectbutalsobecauseourownexamination
oftherecordofthetrialcourtconfirmsthesefindingsofthetwocourts.[7]
NordoestherecordshowanyothertransactionunderwhichInterResinIndustrialmay
have obtained sums of money from Interbank. It can reasonably be assumed that Inter
ResinIndustrialandWillexPlasticintendedtoindemnifyInterbankforamountswhichitmay
havepaidManilabankonbehalfofInterResinIndustrial.
Indeed, in its Petition for Review in this Court, Willex Plastic admitted that it was to
securetheaforesaidguarantee,thatINTERBANKrequiredprincipaldebtorIRIC[InterResin
Industrial] to execute a chattel mortgage in its favor, and so a Continuing Guaranty was
executedonApril2,1979byWILLEXPLASTICINDUSTRIESCORPORATION(WILLEXfor
brevity)infavorofINTERBANKforandinconsiderationoftheloanobtainedbyIRIC[Inter
ResinIndustrial].
[2] Willex Plastic argues that the Continuing Guaranty, being an accessory contract,
cannotlegallyexistbecauseoftheabsenceofavalidprincipalobligation.[8]Itscontentionis
basedonthefactthatitisnotapartyeithertotheContinuingSuretyAgreementortothe
loanagreementbetweenManilabankandInterResinIndustrial.
Putinanotherwaytheconsiderationnecessarytosupportasuretyobligationneednot
passdirectlytothesurety,aconsiderationmovingtotheprincipalalonebeingsufficient.For
aguarantororsuretyisboundbythesameconsiderationthatmakesthecontracteffective
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.[9] In an
analogouscase,[10]thisCourtheld:

AtthetimetheloanofP100,000.00wasobtainedfrompetitionerbyDaicor,forthepurposeofhaving
anadditionalcapitalforbuyingandsellingcocoshellcharcoalandimportationofactivatedcarbon,
thecomprehensivesuretyagreementwasadmittedlyinfullforceandeffect.Theloanwas,therefore,
coveredbythesaidagreement,andprivaterespondent,evenifhedidnotsignthepromissorynote,is
liablebyvirtueofthesuretyagreement.Theonlyconditionthatwouldmakehimliablethereunderis
thattheBorrowerisormaybecomeliableasmaker,endorser,acceptororotherwise.Thereisno
doubtthatDaicorisliableonthepromissorynoteevidencingtheindebtedness.
ThesuretyagreementwhichwasearliersignedbyEnriqueGo,Sr.andprivaterespondent,isan
accessoryobligation,itbeingdependentuponaprincipalonewhich,inthiscaseistheloanobtained
byDaicorasevidencedbyapromissorynote.
[3]WillexPlasticcontendsthattheContinuingGuarantycannotberetroactivelyapplied
so as to secure the payments made by Interbank under the two Continuing Surety
Agreements.WillexPlasticinvokestherulingmElVencedorv.Canlas[11]andDiov.Courtof
Appeals[12] in support of its contention that a contract of suretyship or guaranty should be
appliedprospectively.
Thecasescitedare,however,distinguishablefromthepresentcase.InElVencedorv.
Canlasweheldthatacontractofsuretyshipisnotretrospectiveandnoliabilityattachesfor
defaultsoccurringbeforeitisenteredintounlessanintenttobesoliableisindicated.There
we found nothing in the contract to show that the parties intended the surety bonds to
answerforthedebtscontractedprevioustotheexecutionofthebonds.In contrast, in this
case,thepartiestotheContinuingGuarantyclearlyprovidedthattheguarantywouldcover
sumsobtainedand/ortobeobtainedbyInterResinIndustrialfromInterbank.
Ontheotherhand,inDiov.CourtofAppealstheissuewaswhetherthesuretiescould
be held liable for an obligation contracted after the execution of the continuing surety
agreement.
Itwasheldthatbyitsverynatureacontinuingsuretyshipcontemplatesafuturecourse
ofdealing.Itisprospectiveinitsoperationandisgenerallyintendedtoprovidesecuritywith
respect to future transactions. By no means, however, was it meant in that case that in all
instancesacontractofguarantyorsuretyshipshouldbeprospectiveinapplication.
Indeed, as we also held in Bank of the Philippine Islands v. Foerster,[13] although a
contract of suretyship is ordinarily not to be construed as retrospective, in the end the
intention of the parties as revealed by the evidence is controlling. What was said there[14]
appliesmutatismutandistothecaseatbar:
In our opinion, the appealed judgment is erroneous. It is very true that bonds or other
contractsofsuretyshipareordinarilynottobeconstruedasretrospective,butthatrulemust
yield to the intention of the contracting parties as revealed by the evidence, and does not
interferewiththeuseoftheordinarytestsandcanonsofinterpretationwhichapplyinregard
toothercontracts.
In the present case the circumstances so clearly indicate that the bond given by
Echevarria was intended to cover all of the indebtedness of theArrocera upon its current
accountwiththeplaintiffBankthatwecannotpossiblyadopttheviewofthecourtbelowin
regardtotheeffectofthebond.
[4] Willex Plastic says that in any event it cannot be proceeded against without first
exhausting all property of InterResin Industrial. Willex Plastic thus claims the benefit of
excussion.TheCivilCodeprovides,however:
Art.2059.Thisexcussionshallnottakeplace:

(1)Iftheguarantorhasexpresslyrenouncedit
(2)Ifhehasboundhimselfsolidarilywiththedebtor
xxxxxxxxx
The pertinent portion of the Continuing Guaranty executed by Willex Plastic and Inter
ResinIndustrialinfavorofIUCP(nowInterbank)reads:
IfdefaultbemadeinthepaymentoftheNOTE/shereinguaranteedyouand/oryourprincipal/smay
directlyproceedagainstMe/UswithoutfirstproceedingagainstandexhaustingDEBTOR/sproperties
inthesamemannerasifallsuchliabilitiesconstitutedMy/Ourdirectandprimaryobligations.(italics
supplied)
Thisstipulationembodiesanexpressrenunciationoftherightofexcussion.Inaddition,
Willex Plastic bound itself solidarily liable with InterResin Industrial under the same
agreement:
Forandinconsiderationofthesumsobtainedand/ortobeobtainedbyINTERRESIN
INDUSTRIAL CORPORATION, hereinafter referred to as the DEBTOR/S, from you and/or
yourprincipal/sasmaybeevidencedbypromissorynote/s,checks,billsreceivable/sand/or
otherevidence/sofindebtedness(hereinafterreferredtoastheNOTE/S),I/Weherebyjointly
and severally and unconditionally guarantee unto you and/ or your principal/s, successor/s
and assigns the prompt and punctual payment at maturity of the NOTE/S issued by the
DEBTOR/Sinyourand/oryourprincipal/s,successor/sandassignsfavortotheextentofthe
aggregate principal sum of FIVE MILLION PESOS (P5,000,000.00), Philippine Currency,
andsuchinterests,chargesandpenaltiesasmayhereinafterhespecified.
[5]FinallyitiscontendedthatInterResinIndustrialhadalreadypaiditsindebtednessto
Interbank and that Willex Plastic should have been allowed by the Court of Appeals to
adduce evidence to prove this. Suffice it to say that InterResin Industrial had been given
generousopportunitytopresentitsevidencebutitfailedtomakeuseofthesame.On the
otherhand,WillexPlasticresteditscasewithoutpresentingevidence.
The reception of evidence of InterResin Industrial was set on January 29, 1987, but
because of its failure to appear on that date, the hearing was reset on March 12, 26 and
April2,1987.
OnMarch12,1987InterResinIndustrialagainfailedtoappear.Upon motion of Willex
Plastic,thehearingsonMarch12and26,1987werecancelledandresetforthelasttimeon
April2and30,1987.
OnApril2,1987,InterResinIndustrialagainfailedtoappear.Accordinglythetrialcourt
issuedthefollowingorder:
Consideringthat,asshownbytherecords,theCourthadexertedeveryearnestefforttocausethe
serviceofnoticeorsubpoenaonthedefendantInterResinIndustrialbuttonoavail,evenwiththe
assistanceofthedefendantWillex...thedefendantInterResinIndustrialisherebydeemedtohave
waivedtherighttopresentitsevidence.
Ontheotherhand,WillexPlasticannounceditwasrestingitscasewithoutpresentingany
evidence.
UponmotionofInterResinIndustrial,however,thetrialcourtreconsidereditsorderand
set the hearing anew on July 23, 1987. But InterResin Industrial again moved for the
postponement of the hearing to August 11, 1987. The hearing was, therefore, reset on
September8and22,1987butthehearingswereresetonOctober13,1987,thistimeupon
motion of Interbank. To give Interbank time to comment on a motion filed by InterResin

Industrial,thereceptionofevidenceforInterResinIndustrialwasagainresetonNovember
17, 26 and December 11, 1987. However, InterResin Industrial again moved for the
postponement of the hearing. Accordingly, the hearing was reset on November 26 and
December11,1987,withwarningthatthehearingswereintransferrable.
Again,thereceptionofevidenceforInterResinIndustrialwasresetonJanuary22,1988
and February 5, 1988 upon motion of its counsel. As InterResin Industrial still failed to
presentitsevidence,itwasdeclaredtohavewaiveditsevidence.
To give InterResin Industrial a last opportunity to present its evidence, however, the
hearing was postponed to March 4, 1988. Again InterResin Industrials counsel did not
appear.The trial court, therefore, finally declared InterResin Industrial to have waived the
righttopresentitsevidence.Ontheotherhand,WillexPlastic,asbefore,manifestedthatit
wasnotpresentingevidenceandrequestedinsteadfortimetofileamemorandum.
There is therefore no basis for the plea made by Willex Plastic that it be given the
opportunityofshowingthatInterResinIndustrialhasalreadypaiditsobligationtoInterbank.
WHEREFORE, the decision of the Court ofAppeals isAFFIRMED, with costs against
thepetitioner.
SOORDERED.
Regalado(Chairman),Romero,Puno,andTorres,Jr.,JJ.,concur.
[1]PennedbyJusticeLuisA.JavellanawithJusticesAlfredoM.MarigomenandArtemonD.Luna,concurring.
[2]TSN.Sept.16,1986,p.4.
[3]TSN,Oct.16,1986,p.13.
[4]PNBv.BarrettoP.PoE.Jap,53Phil.955(1928).
[5]Talosigv.Vda.deNieba,43SCRA472(1972).
[6]RTCDecision,p.8.
[7] Somodio v. Court of Appeals, 235 SCRA 307 (1994) Borillo

v. Court of Appeals, 209 SCRA 130 (1992)

Colladov.Intermediate Appellate Court, 206 SCRA 206 (1992) Philippine Commercial and Industrial Bank v.
CourtofAppeals,193SCRA452(1991).
[8]Art.2052oftheCivilCodeprovides:

Aguarantycannotexistwithoutavalidobligation.
Nevertheless, a guaranty may be constituted to guarantee the performance of a voidable or an unenforceable
contract.Itmayalsoguaranteeanaturalobligation.
[9]Severinov.Severino,56Phil.185,18788(1931).Accord,Garciav.CourtofAppeals,191SCRA493(1990).
[10]RizalCommercialBankingCorp.v.Arro,115SCRA777,781782(1982).
[11]44Phil.699(1923).
[12]216SCRA9(1992).
[13]49Phil.843(1926).
[14]Supra,note13at848.