G.R. No. 76509. December 15, 1989
FACTS
In 1978, Pioneer Insurance and Surety Corporation issued general warehousing bonds in favor of the Bureau of Customs for importation of raw materials on behalf of the private respondents Wearever Textile Mills, Inc. To secure the bonds, the respondents executed jointly and severally
indemnity agreements. The private respondents failed to comply with their commitment by reason whereof the Bureau of Customs demanded from the petitioner payment of the value of the said bonds which eventually reached P9,031,000.00 in 1983. Private respondents settled their obligations to Bureau of Customs through staggered monthly installment payments. Other than the initial payment of P500,000.00, however, respondents have not made any other payments thereby violating the terms of the said agreement. Bureau of Customs again demanded from the petitioner payment of its bonds. No payment has been made.