- Petitioner
- Autocorp Group
- Respondent
- Intra Strata Assurance Corporation
- Citation
- G.R. No. 166662
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Chico-Nazario, J.
- Decided
- June 27, 2008
Summary
Autocorp Group obtained surety bonds from ISAC to guarantee re-export of imported vehicles to Bureau of Customs but failed to comply within the required period. ISAC sued Autocorp and its president Rodriguez under indemnity agreements for P1,034,649.00 representing the bond amounts. The Supreme Court affirmed lower courts' decisions, holding that petitioners' liability arose when the bonds became due and demandable due to non-compliance, regardless of actual forfeiture by BOC. The Court applied Civil Code provisions on guaranty and suretyship, particularly Article 2071 allowing guarantors to proceed against principal debtors when debts become demandable. Rodriguez was held liable as surety despite alleged modifications because the indemnity agreements authorized ISAC to consent to extensions. The case establishes that contractual provisions allowing sureties to proceed before actual payment or forfeiture are valid and enforceable under Philippine law.