Alauddin Mohd Sheriff JCA:

The appellants (2nd & 3rd defendants) are guarantors of an overdraft facility with a credit limit of RM300,000 granted by the respondent (plaintiff) to Sim Lim Co. (M) Sdn. Bhd. (4th defendant) pursuant to an overdraft agreement dated 3 April 1980 (exh. P1 at p. 202, Appeal Record). The respondent had videa letter dated 28 March 1986 (exh. P2 at p. 203, Appeal Record) to the 4th defendant renewed the credit limit of the overdraft facility to RM150,000 and granted Letters of Credit and Bills of Receivables for a credit limit of RM200,000.

The appellants had on 18 April 1980 executed a joint and several guarantee (exh. P6 at p. 210, Appeal Record) which was limited to RM700,000 for all sums of money owing to the respondent on any account of the 4th defendant.

The 4th defendant defaulted in paying the outstanding amount under the facilities and as a result the respondent withdrew the said facilities videa letter dated 27 April 1988. The liability of the appellants under the guarantee is predicated a demand being made by the respondent in accordance with cl. 15 of the guarantee.

Default in repayment having occurred, the respondent issued three letter