VET BROS. & CO., INC., PLAINTIFF, VS. JOSE S. MOVIDO, ET AL., DEFENDANTS. JOSE S. MOVIDO, DEFENDANT AND APPELLEE, LUZON SURETY CO., INC., SURETY AND APPELLANT.

Appeal by the Luzon Surety Co., Inc., from an order dated August 24, 1957 of
the Court of First Instance of Leyte, Hon. Lorenzo C. Garlitos, presiding, in
Civil Case No. 850 of that court, entitled “Vet Bros & Co., Inc., plaintiff,
versus Jose S. Movido, the Provincial Sheriff of Leyte and the Provincial
Sheriff of Samar, defendants.” The order issues a writ of execution against the
P2,000 bond of the Luzon Surety Company in said case.

On June 13, 1951, the Vet Bros & Co., Inc. filed a complaint against Jose
S. Movido, the Provincial Sheriff of Leyte and that of Samar, praying, among
other things, for the issuance of a writ of preliminary injunction to enjoin
said defendants from proceeding with the sale of plaintiff’s properties. The
properties of the plaintiff were caused to be sold to satisfy the judgment of
the lower court in Civil Case No. 441, entitled “Jose S. Movido, plaintiff, vs.
Vet Bros. & Co., Inc., defendant.”

It is alleged in the complaint that the Provincial Sheriff of Samar,
proceeded on May 14, 1951, with the attachment of certain properties of the
plaintiff, giving notice thereof to him, notwithstanding the fact that Civil
Case No. 441 was already terminated and closed, and the claim of defendant
Movido had already been satisfied by the plaintiff.

Upon the filing of the complaint in said Civil Case No. 850, the writ of
preliminary injunction was issued upon its presentation of a P2,000 bond of the
Luzon Surety Co., Inc., wherein the surety company undertook to pay the
defendants “all such damages as such party may sustain by reason of the Writ of
Preliminary Injunction, if the Court finally decides that the Plaintiff is not
entitled thereto.” (p. 16, R. O. A.).

In his answer to the complaint, defendant Movido denies payment to him by the
plaintiff of the unpaid balance of P6,000, plus interest, as per judgment of the
court in said Civil Case No. 441.

The case having been set for hearing on April 22, 1952, the plaintiff failed
to appear, so the court dismissed the case. The order of dismissal reads as
follows:

“Por incomparecencia de la demandante, no obstante estar debidamente
notificada de la vista de este asunto para este dia, y no estando de acuerdo con
la ley ni con los Reglamentos, la peticion de posposicion por telegrama del
abogado de la demandante, se deniega la posposicion y se sobresee la demanda,
con las costas a cargo de la demandante. Se deja sin efecto el interdicto
prohibitorio preliminar dictado en este asunto contra los demandados.” (p. 24,
R. O. A.)

Two motions for reconsideration filed by the plaintiff having been denied,
the afore-quoted order of dismissal became final and executory. Consequently, on
May 4, 1957, Movido filed a motion for the issuance of a writ of execution
against the bond of the surety company. The lower court, after considering said
motion and the opposition thereto filed by the surety company, issued the order
appealed from, relying solely on our decision in the case of Bautista vs.
Joaquin, 46 Phil., 885. A motion for reconsideration of the order granting the
writ of execution was denied, so the surety company has prosecuted this appeal
before this Court.

Pending appeal, the lower court ordered the substitution of appellee Movido,
who had died, by his wife and children.

The appellees did not file a brief, and this Court ordered the appeal in this
case to take its course without said brief.

The liability of the appellant upon its bond is governed by the provisions of
Section 9, Rule 61 and Section 20, Rule 59, both of the Rules of Court, which
read as follows:

“Sec. 9. Judgment to include damages against party and sureties.— Upon
the trial the amount of damages to be awarded to the plaintiff or to the
defendant, as the case may be, upon the bond of the other ” party, shall be
claimed, ascertained, and awarded under the same procedure as prescribed in
section 20 of Rule 59.” (Rule 61)

“Sec. 20. * * *. 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. * * *.” (Rule 59)

In its bond, the appellant undertook to pay the defendants only such damages
that they may sustain by reason of the issuance of the writ of preliminary
injunction. And such bond cannot be extended beyond the bound of its
contents.

There is neither claim nor evidence of damages sustained by Movido as a
result of the issuance of the injunction. And this was the reason also why the
lower court did not award damages to the defendants in its order of dismissal of
April 22, 1952. Consequently, there can be ho execution against the bonds; as
there is nothing in the judgment of dismissal sentencing the plaintiff or its
surety to pay damages.

“As the judgment is against the defendant personally not against the surety
on his counter-bond, the execution to be issued must be against the property of
the defendant only and it cannot issue against petitioner thereon. As a matter
of fact, the order complained of was issued to secure a judgment against the
surety on the counterbond of defendant, which shows the absence of a judgment
against the surety to be executed. A judgment against a defendant cannot per se
be enforced by execution against the surety on his counterbond; a judgment
against the surety MUST be secured before his counterclaim may be proceeded
against.” (Visayan Surety & Insurance Co. vs. Aquino, et al., 96 Phil.,
900; see also Port Motors, Inc. vs. Baposas, et al., 100 Phil., 732; 53 Off.
Gaz., 2450; Visayan Surety vs. Pascual, 85 Phil., 7179; 47 Off. Gaz., 5075;
Facundo vs. Tan, 77 Phil., 740; Liberty Construction vs. Pecson, 89 Phil., 50;
Cruz vs. Manila Surety, 92 Phil., 699; 49 Off. Gaz., 964).

It is intimated in the pleadings in the court below that the amount of
damages for which the surety should be liable upon its bond is the amount of the
judgment sought to be enforced in Civil Case No. 441, which amount was not
collected by appellee Movido by reason of the issuance of the writ of
preliminary injunction in the caseat bar.

The surety bond executed by the appellant does not refer to any judgment, or
to the judgment being executed in Civil Case No. 441. The bond only responds for
“all such damages as such party (defendant Movido) may sustain by reason of the
Writ of Preliminary Injunction, if the Court finally decides that the Plaintiff
is not entitled thereto.” There is no final judgment in the case at bar, in
which the court made a finding that the plaintiff is not entitled to the writ of
preliminary injunction. The judgment was an order of dismissal for failure of
the plaintiff to appear; it did not declare that the plaintiff was not entitled
to the writ of preliminary injunction. Consequently, there is no legal basis for
making the surety liable upon its bond.

It is to be noted that the injunction was issued in another case, Civil Case
No. 850, and not in the old case, Civil Case No. 441, where judgment for Movido
was issued and execution issued. The plaintiff herein could have presented,
instead of filing this independent action, an ordinary motion Case No. 441 to
suspend the enforcement of the writ of execution and the proceedings therein,
upon the filing of a bond. Even if such motion would have been presented, the
bond would still not be liable, for there is no proof that damages were caused
to the Movido by the issuance of the injunction and there is no judgment to that
effect. In such a situation, once the injunction was dissolved, the plaintiff
would still be entitled to continue to enforce the writ of execution and proceed
with the sale of the properties attached by the sheriff in the old case No.
441.

Our decision in the case of Bautista vs. Joaquin, supra, cited by the
court a quo in its order, is not applicable to the case at bar. In that
case, we held that the bond filed for the dissolution of a writ of
attachment answers for the amount of the judgment. In accordance with
Section 12 of Rule 59 of the Rules of Court, the bond thus given by the
defendant to release the property attached stands in the place of the property
released. Consequently, the surety directly answers for whatever judgment the
plaintiff may recover in the action. The case of Bautista vs. Joaquin is,
therefore, entirely different from the case before this Court.

In view of the foregoing considerations, the order appealed from is set
aside. With costs against the heirs of appellee Jose S. Movido.

Padilla, Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes,
Dizon, and De Leon, JJ., concur.