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    09 Prudential Guarantee Assurance Corp V Equinox Land Corp

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    YPE
    - Equinox contracted with J'Marc Construction to build additional floors on its building, and J'Marc obtained surety and performance bonds from Prudential Guarantee and Assurance to guarantee the project. - J'Marc failed to adhere to the contract terms, delaying the project, but Equinox continued paying advances until terminating the contract after finding J'Marc had only completed 19% of the work while being overpaid. - Equinox sued both J'Marc and Prudential. The court ruled that as the surety, Prudential was solidarily liable with J'Marc as the principal debtor to fulfill the construction obligation.

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    09 Prudential Guarantee Assurance Corp V Equinox Land Corp

    Uploaded by

    YPE
    23 views2 pages
    - Equinox contracted with J'Marc Construction to build additional floors on its building, and J'Marc obtained surety and performance bonds from Prudential Guarantee and Assurance to guarantee the project. - J'Marc failed to adhere to the contract terms, delaying the project, but Equinox continued paying advances until terminating the contract after finding J'Marc had only completed 19% of the work while being overpaid. - Equinox sued both J'Marc and Prudential. The court ruled that as the surety, Prudential was solidarily liable with J'Marc as the principal debtor to fulfill the construction obligation.

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    09 Prudential Guarantee Assurance Corp v Equinox Land Corp

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    - Equinox contracted with J'Marc Construction to build additional floors on its building, and J'Marc obtained surety and performance bonds from Prudential Guarantee and Assurance to guarantee the project. - J'Marc failed to adhere to the contract terms, delaying the project, but Equinox continued paying advances until terminating the contract after finding J'Marc had only completed 19% of the work while being overpaid. - Equinox sued both J'Marc and Prudential. The court ruled that as the surety, Prudential was solidarily liable with J'Marc as the principal debtor to fulfill the construction obligation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    23 views2 pages

    09 Prudential Guarantee Assurance Corp V Equinox Land Corp

    Uploaded by

    YPE
    - Equinox contracted with J'Marc Construction to build additional floors on its building, and J'Marc obtained surety and performance bonds from Prudential Guarantee and Assurance to guarantee the project. - J'Marc failed to adhere to the contract terms, delaying the project, but Equinox continued paying advances until terminating the contract after finding J'Marc had only completed 19% of the work while being overpaid. - Equinox sued both J'Marc and Prudential. The court ruled that as the surety, Prudential was solidarily liable with J'Marc as the principal debtor to fulfill the construction obligation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    PRESIDENTIAL GUARANTEEE AND ASSURNCE INC. v.

    EQUINOX LAND
    CORPORATION
    FACTS:
     Equinox decided to construct 5 additional floors to its building, Eastgate Centre.
     They sent invitations to bid to various contractors including J'Marc Construction &
    Development Corporation (J'Marc).
     J'Marc submitted to Equinox two (2) bonds, namely:
    (1) a surety bond issued by Prudential Guarantee and Assurance, Inc.
    (Prudential),herein petitioner, in the amount of P9,250,000.00 to
    guarantee the unliquidated portion of the advance payment payable to
    J'Marc; and
    (2) a performance bond likewise issued by Prudential in the amount of
    P7,400,000.00 to guarantee J'Marc's faithful performance of its obligations
    under the construction agreement.
     Equinox and J'Marc signed the contract and related documents. Under the terms
    of the contract, J'Marc would supply all the labor, materials, tools, equipment,
    and supervision required to complete the project.
     Jmarc did not adhere to the terms of the contracts as it failed to submit the
    monthly progress billings and their workers neglected their work so the project
    was delayed.
     Still, Equinox paid Jmarc whenever they request for an advance payment until
    the former decided to terminate their contract. It was later found out that Equinox
    overpaid Jmarc even if they only accomplished 19% of the work so they filed a
    complaint for sum money and damages against Jmarc and Prudential.
     On the other hand, Prudential filed a motion to dismiss the complaint on the
    ground that pursuant to Executive Order No. 1008, it is the CIAC which has
    jurisdiction over it.
     RTC granted Prudential’s case.
     Equinox filed a case with the CIAC to which Prudential countered that CIAC has
    no jurisdiction over it since it is not a privy to the construction contract between
    Equinox and J'Marc; and that its surety and performance bonds are not
    construction agreements, thus, any action thereon lies exclusively with the proper
    court.
     CIAC and CA ruled in favor of Equinox.

    ISSUE:
    1. Whether CIAC has jurisdiction over the case – YES
    2. Whether Prudential and Jmarc are solidarily liable for damages -- YES
    RULING: On whether Prudential and Jmarc are solidarily liable for damages.
    It is not disputed that Prudential entered into a suretyship contract with
    J'Marc. Section 175 of the Insurance Code defines a suretyship as "a contract or
    agreement whereby a party, called the suretyship, guarantees the performance by
    another party, called the principal or obligor, of an obligation or undertaking in favor
    of a third party, called the obligee. It includes official recognizances, stipulations,
    bonds, or undertakings issued under Act 536, as amended." Corollarily, Article 2047
    of the Civil Code provides that suretyship arises upon the solidary binding of
    a person deemed the surety with the principal debtor for the purpose of
    fulfilling an obligation.
    In Castellvi de Higgins and Higgins v. Seliner, we held that while a surety and
    a guarantor are alike in that each promises to answer for the debt or default of
    another, the surety assumes liability as a regular party to the undertaking and
    hence its obligation is primary.
    In Security Pacific Assurance Corporation v. Tria-Infante, we reiterated the
    rule that while a contract of surety is secondary only to a valid principal obligation,
    the surety's liability to the creditor is said to be direct, primary, and absolute. In other
    words, the surety is directly and equally bound with the principal. Thus, Prudential is
    barred from disclaiming that its liability with J'Marc is solidary.

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