International Finance Corporation v. Imperial Textile Mills, Inc.

Facts: 
IFC and PPIC entered into a loan agreement. A 'Guarantee Agreement' was executed with x x x ITM, Grandtex and IFC as parties thereto. ITM and Grandtex agreed to guarantee PPIC's obligations under the loan agreement. However, PPIC defaulted. 

IFC filed a complaint with the RTC of Manila against PPIC and ITM which held PPIC liable.

CA reversed the decision. MR was denied.

Issue: 

Whether ITM is a surety, and thus solidarily liable with PPIC for the payment of the loan.

Held:

Yes. While referring to ITM as a guarantor, the Agreement specifically stated that the corporation was "jointly and severally" liable. To put emphasis on the nature of that liability, the Contract further stated that ITM was a primary obligor, not a mere surety. Those stipulations meant only one thing: that at bottom, and to all legal intents and purposes, it was a surety.

Indubitably therefore, ITM bound itself to be solidarily liable with PPIC for the latter's obligations under the Loan Agreement with IFC. ITM thereby brought itself to the level of PPIC and could not be deemed merely secondarily liable.