MANILA UNDERWRITERS INSURANCE CO., INC., PETITIONER, VS. HON. BIENVENIDO A. TAN, ETC. ET AL., RESPONDENTS.

In civil case No. 12796 between plaintiff, Gelacio E. Tambunting and
defendant Jose de Borja, above respondent court on December 21, 1954,
decreed as follows:

“IN VIEW OF THE FOREGOING CONSIDERATION, the court hereby renders judgment:

(a) Dismissing the plaintiff’s complaint;

(b)
Ordering the dissolution of the writ of preliminary attachment of the
defendant’s properties, but maintaining the bond filed by the plaintiff
in full force and effect so as to respond for damages suffered by the
defendant for the wrongful issuance of the said writ of preliminary
attachment; and

(c) Sentencing the plaintiff to pay
the defendant the sum of P8,938,39 for tile first counterclaim,
P5,500.00 for the second counter-claim, P5,000.00 for the third
counterclaim, P20,000.00 for the fourth counterclaim, or a total of
P38,938.39, with legal interest from the filing of the said
counterclaims, until paid, with costs against the plaintiff,”

During the trial of the said civil case, the defendant Borja was
able to present his evidence in support of his counter-claims, but the
above petitioner Surety, who had issued the attachment bond was not
notified of the hearing. On January 25, 1955, petitioner Surety was
furnished a copy of the decision of the respondent court referred to
above.

On March 19, 1957, after the Court of Appeals (before whom appeal
was made by plaintiff), had affirmed the decision of the respondent
court and after the said decision had become final,
respondent Borja filed a motion for a writ of execution in the said
case against petitioner Surety under its bond. Petitioner Surety
opposed the motion and on the date set for hearing of Borja’s motion,
the latter, to meet petitioner Surety’s objection, orally moved to
reproduce the evidence which he had previously presented during the
trial on the merits of civil case No. 12796. Respondent court granted
the oral officer to reproduce the evidence in the following order;

“Defendant’s motion to reproduce his evidence
already presented during the hearing of this case in support of his
motion for execution being meritorious, the same is hereby granted. Let
a writ of execution be issued against the defendant and the Manila
Underwriters Insurance Co., Inc.”

Petitioner filed a motion for reconsideration of said order, which motion was subsequently denied. Hence this petition.

Petitioner predicates this petition on the contention that inasmuch
as it had not been notified in the manner required by Section 20 of
Rule 59 of the Rules of Court before judgment has become final, it
cannot be made liable under its bond.

The rule under consideration is Section 20, Rule 59 of the Rules of Court which provides:

“SEC. 20. Claim for damages on plaintiff’s bond on account of illegal attachment.—If
the judgment on the action be in favor of the defendant, he may
recover, upon the bond given by the plaintiff, damages resulting from
the attachment. Such damages may be awarded only upon application and
after proper hearing, and shall be included in the final judgment. The
application must be filed before the trial or, in the discretion of the
court, before entry of the final judgment, with due notice to the
plaintiff and his surety or sureties, setting forth the facts showing
his right to damages and the amount thereof. Damages sustained during
the pendency of an appeal may be claimed by the defendant, if the
judgment of the appellate court be favorable to him, by filing an
application therewith, with notice to the plaintiff and his surety or
sureties, and the appellate court may allow the application to be heard
and decided by the trial court,”

Under this rule, the defendant may recover, upon the bond given by
the plaintiff, damages resulting from the illegal attachment. The
damages may be awarded only upon application and proper hearing, and
shall be included in the final judgment. The application must be filed
before the trial, or, in the discretion of the court before entry of
final judgment, with due notice to the plaintiff and his surety or
sureties, setting forth the facts showing his right to damages and the
amount thereof. In the interpretation of this legal provision, this
Court said:

“In case no notice is given to the surety of the
application for damages, the judgment that may be entered against the
principal cannot be executed against the surety without giving the
latter an opportunity to be heard as to the reality or reasonableness
of the alleged damages. In such case, upon application of the
prevailing party, the court must order the surety to show cause why the
bond should not respond for the judgment, for damages. If the surety
should contest the reality or reasonableness of the damages claimed by
the prevailing party, the court must set the damages application and
answer for hearing. The hearing will be summary and will be limited to
such new defense, not previously set up by the principal, as the surety
may allege offer to prove. The oral proof of damages already adduced by
the claimant may be reproduced without the necessity of retaking the
testimony, but the surety should be given an opportunity to
cross-examine the witness or witnesses if it so desires.” (Visayan
Surety & Ins. Co. vs. Pascual, 85 Phil., 779; 47 Off. Gaz. 10, 5075; see also cases of Liberty Supply Construction Co. vs. Pecson, 89 Phil., 50; Del Rosario vs. Nava, 95 Phil, 912; 53 Off. Gaz. [16] 5220.)

In accordance with the foregoing interpretation, petitioner Surety
not having been notified in the manner required by the Rules of Court
before judgment has become final should not be made liable under its
bond.

Wherefore, the order appealed from is hereby set aside. So ordered.

Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia, Barrera, and Gutierrez David, JJ., concur.