IN THE MATTER OF THE INTESTATE ESTATE OF THE LATE CIRILO JAMANDRE, JOSE T. JAMANDRE, ADMINISTRATOR-APPELLEE, VS. LUZON SURETY COMPANY, INC., CLAIMANT-APPELLANT.

Appeal from the order of the then Court of First Instance of
Negros Occidental, disapproving claimant-appellant’s claim for premiums against
the intestate estate of the late Cirilo Jamandre as one of the indemnitors with
the appellant on a redelivery bond which the latter issued in behalf of one of
the defendants-intervenor in Civil Case No. 3902, entitled “Maria Jamandre
Yanson, plaintiff, versus Jose T. Jamandre, defendant; and Magdalena Tejico,
defendant-intervenor, of the Court of First Instance of Negros Occidental.  The late Cirilo Jamandre was one of the
indemnitors on an indemnity agreement which he executed in favor of
claimant-appellant Luzon Surety Co., Inc..

Claimant-appellant, as surety, made an undertaking with Magdalena
Tejico, as principal, in the amount of P25,320.00 in favor of Maria Jamandre
Yanson, to answer  for such damages as
may be occasioned and awarded to the latter in connection with the return of a
certain property which was previously seized by plaintiff from the defendants
in said Civil Case No. 3902.  The
corresponding premiums and documentary stamps due on the said bond were paid
and receipted for to cover two (2) years of undertaking from July 2, 1956 to
July 2, 1958.

In September 1957, or well within the period that the surety bond
undertaken by the defendant Magdalena Tejico was existing and in force, due to
an order for the immediate execution of the judgment in favor of plaintiff
Maria Jamandre Yanson in said Civil Case No. 3902, for replevin, and a writ of
execution having been issued, the very property covered by the bond was
actually delivered back to plaintiff Maria Jamandre Yanson.  Thus, according to herein
administrator-appellee Jose T. Jamandre, the undertaking to guarantee payment
of damages to Maria Jamandre Yanson for the possession of the property which
was for sometime transferred to defendants in said civil case for replevin, and
assumed by claimant-appellant, as surety, was terminated on that date.

On the other hand, appellant surety company argues that the fact
that the property seized from, and returned to, the defendants, does not render
the contract (Indemnity Agreement) invalid; for, like any other contract, only
the obligations thereunder can be extinguished by the causes provided by law.  Further, appellant contends that since the
decision of the trial court in favor of plaintiff Maria Jamandre Yanson was
appealed to the then Court of Appeals and ultimately to this Court which
affirmed the judgment, Magdalena Tejico should pay the premiums during the pendency
of the appeal, but failed to pay the same despite repeated demands.

The only issue here is whether the bond posted by Magdalena
Tejico in Civil Case No. 3902 for the delivery to the plaintiff of the property
seized from, and returned to, the defendant has been terminated by the return
of the property subject thereof to the plaintiff, or whether the said bond is
coterminous with the pendency of the case.

It is admitted that in Civil Case No. 3902 of the then Court of
First Instance of Negros Occidental, judg­ment was rendered in favor of
plaintiff Maria Jamandre Yanson.  Thus,
the property was redelivered to her pending appeal before the then Court of
Appeals and ultimately before the Supreme Court which affirmed the judgment of
the lower court, although modified in the sense that the award of damages was
limited to simple attorney’s fees.

The bond assumes the following obligations:

“NOW, THEREFORE, We, MAGDALENA TEJICO, as Principal and LUZON
SURETY COMPANY, INC., as Sureties, in con­sideration of the above and of the
return of said property to said
defendant-intervenor, hereby bind ourselves, jointly and severally, in the sum
of TWENTY FIVE THOUSAND THREE HUNDRED TWENTY PESOS (P25,320.00), Philippine
Currency x x x for the delivery (of the property) if such delivery be adjudged,
and for the payment of such sum to him as may be recovered against the
defendant-intervenor, and the costs of the action x x x.” (Indemnity
Agree­ment, p. 16, record on appeal; Under­scoring supplied.)

A counterbond under Section 5 of Rule 60 of the Rules of Court is
filed by the party (usually the defendant) whose property has been taken by the
officer upon order of the court, upon the filing of a bond executed to the
plaintiff for the delivery of the property to him, if such delivery be
adjudged, and for the payment of such sum to him as may be recovered against
the defendant.  Said Section 5 of Rule 60
provides:

“Sec. 5.  Return of
property.  ? If the defendant
objects to the sufficiency of the plaintiff’s bond, or of the surety or
sureties thereon, he cannot require the return of the property as in this
section provided; but if he does not so
object, he may, at any time before the delivery of the property to the
plaintiff, require the return thereof, by filing with the clerk or judge of the
court a bond executed to the plaintiff, in double the value of the property as
stated in the plaintiff’s affidavit, for the delivery of the property to the
plaintiff, if such delivery be adjudged, and for the payment of such sum to him
as may be recovered against the defendant, and by serving a copy of such bond
on the plaintiff or his attorney.”

Considering therefore the bond put up by appellant Surety Company
holding itself liable for the payment of such sum as may be recovered against
the defendant, including the costs of the action, it cannot go back and deny
liability in its undertaking.  In the
same manner, the indemnity agreement signed by the late Cirilo Jamandre for the
payment of advance annual premium to the Surety Company must be respected.  Stated otherwise, the indemnity agreement
stands as long as the original bond exists. 
The bond filed for the delivery to the plaintiff of properties seized
from, and returned to, the defendant is coterminous with the case where it is
filed.  Thus, the bond executed by Tejico
and Luzon Surety in the amount of P25,320.00 guarantees not only the return of
the property of the defendant but also “the payment of such sum to him
(plaintiff) as may be recovered against the defendant-intervenor.”

ACCORDINGLY, the administrator of the estate of the late
Cirilo Jamandre is hereby ordered to pay appellant Luzon Surety Company, Inc.,
the premiums due on the bond up to the entry of the final judgment in Civil
Case No. 3902.

SO ORDERED.

Melencio-Herrera, (Acting Chairman), Abad Santos, Plana, and Escolin, JJ., concur.