Velasquez v Solidbank Corp, GR 157309 March 28, 2008 Facts: Petitioner is engaged in the export business operating under

the name Wilderness Trading. Respondent is a domestic banking corporation organized under Philippine laws. Wilderness Trading, as seller, entered into a business transaction for the sale of dried sea cucumber for export to Goldwell Trading of Pusan, South Korea, as buyer. To facilitate payment, Goldwell Trading opened a letter of credit in favor of Wilderness Trading with the Bank of Seoul, Pusan, South Korea. Petitioner then applied for credit accommodation with respondent Solidbank for pre-shipment financing which was granted as well as its second export transaction drawn on the letter of credit. The third, however, had a different result. Petitioner then submitted to respondent necessary for his third shipment to have the value of the shipment paid in advance and negotiated for a documentary sight draft to be drawn on the letter of credit, chargeable to the account of Bank of Seoul. Petitioner promised that the draft will be paid by the Bank of Seoul and held himself liable if the sight draft was not accepted in a letter of undertaking executed by petitioner is a condition for the issuance of the sight draft. Respondent bank obliged and sent all documents pertinent to the export transaction. Respondent was not able to collect because the sight draft was dishonored by non-acceptance by the Bank of Seoul due to late shipment and because most of the bags of dried sea cucumber exported contained soil. Respondent thereafter filed a complaint for recovery of sum of money with RTC of Cebu which rendered a decision in favor of respondent which was affirmed by the appellate court, thus, this present petition. Issue: Whether or not petitioners liability under the letter of undertaking is that of a mere guarantor. Held: No. Petitioner cannot be both the primary debtor and the guarantor of his own debt. This is inconsistent with the very purpose of a guarantee which is for the creditor to proceed against a third person if the debtor defaults in his obligation. Petitioner bound himself liable to respondent under the letter of undertaking if the sight draft is not accepted. He also warranted that the sight draft is genuine; will be paid by the issuing bank in accordance with its tenor; and that he will be held liable for the full amount of the draft upon demand, without necessity of proceeding against the drawee bank.

AUTOCORP GROUP and PETER Y. RODRIGUEZ, petitioners, vs. INTRA STRATA ASSURANCE CORPORATION and BUREAU OF CUSTOMS, respondents. G.R. No. 166662. June 27, 2008 Facts: Petitioner Autocorp Group, represented by its President, petitioner Peter Y. Rodriguez, secured an ordinary re-export bond, from private respondent Intra Strata

Assurance Corporation (ISAC) in favor of public respondent Bureau of Customs (BOC)to guarantee 2 Hyundai units and to pay the taxes and duties thereon. Petitioners executed and signed two Indemnity Agreements with identical stipulations in favor of ISAC, agreeing to act as surety of the subject bonds which were signed by petitioner Rodriguez both as President of Autocorp and his personal capacity. In sum, ISAC issued the subject bonds to guarantee compliance by petitioners with their undertaking with the BOC to re-export the imported vehicles within the given period and pay the taxes and/or duties due thereon. In turn, petitioners agreed, as surety, to indemnify ISAC for the liability the latter may incur on the said bonds. Petitioner Group failed to re-export the items guaranteed by the bonds despite repeated demands made by the BOC, as well as by ISAC. ISAC filed with the RTC an action to recover which rendered its decision in their favor. Herein petitioner appealed to the Court of Appeals which affirmed the lower courts decision, hence the present petition. Issue: