agro-conglomerates inc. vs ca
Post on 08-Jul-2016
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FACTS: Agro Conglomerates, Inc. sold 2 parcels of land to Wonderland Food Industries, Inc. But instead of paying cash, the latter would just shoulder the settlement of the loan Agro would incur. Soriano (of Agro) signed several promissory notes as a maker, payable to Regent in favor of Wonderland. Agro failed to meet their obligations so the bank gave them opportunity to settle their account by extension, but they failed to pay again.
ISSUE: W/N Agro should be liable because there was no accommodation or surety
HELD: YES. contract of surety between Woodland and petitioner was extinguished by the rescission of the contract of sale of the farmland. With the rescission, there was confusion in the persons of the principal debtor and surety.
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