JULIA A. DE GUIA, ET AL., PLAINTIFF AND APPELLEE, VS. ALTO SURETY & INSURANCE CO., INC., DEFENDANT AND APPELLANT.

This is an appeal^[1] taken by
defendant Alto Surety & Insurance Co., Inc. from the decision of the Court
of First Instance of Manila (in Civil Case No. 34442) ordering it to deliver to
plaintiffs Julia A. De Guia and J. de Guia “the refrigerator in question or, in
default thereof, to pay to said plaintiffs the amount of P330.00, with legal
interest from the filing of the coinplaint until fully paid, and the costs.”

The records show that in a replevin case (Civil Case No. 2957) filed by
plaintiffs in the Justice of the Peace Court of Caloocan, Rizal, against
Anastacia C. Alejo and Perfecto M. Alejo (defendants therein), the latter, to
secure the return of a refrigerator seized by plaintiffs, posted a bond, with
defendants Alto Surety as surety, in the sum of P660.00, which is double the
value of said refrigerator; the condition of said bond was for the delivery to
plaintiffs of said refrigerator, if delivery is adjudged by the court, as well
as for the payment of such sum as plaintiffs may recover from defendants (the
Alejos), together with the costs of suit. After trial, judgment was rendered by
the Justice of the Peace Court “ordering the defendants to deliver immediately
to the plaintiffs the refrigerator mentioned in the complaint; to pay the
plaintiffs, as compensation for the use of plaintiffs’ refrigerator from March
16, 1955 until it is delivered at the rate of P100.00 a year and to pay the
costs”.

On appeal by defendants (the Alejos) to the Court of First Instance of Rizal
(Civil Case No. 4109), said judgment of the justice of the peace court was
affirmed. When plaintiffs asked for the execution of said judgment, however, the
writ was returned unsatisfied, with the information that “the said defendants
have left the house at 489 M. Shaw St., Samson, Caloocan, Rizal, and their
whereabouts could not be ascertained”. Whereupon, plaintiffs filed a motion to
execute the replevin bond, praying that the court “issue the corresponding order
directing the Sheriff of Rizal to serve the said writ of execution upon the
Manager of the Alto Surety & Insurance Co., Inc., Manila, for all intents
and purposes of the law”. The court denied said motion, reasoning as follows:
“As may be seen, therefore, the purpose of the motion is to have a writ of
execution served upon the manager of the said bonding company, so that the
plaintiffs may recover from it the value of the aforementioned refrigerator. On
going over the judgment, however, it was found that it merely ordered the
immediate delivery of the refrigerator, but there was no finding therein as to
the value of said property, nor is there any directive for the payment of the
value thereof in case of failure to deliver. This being the case, the Court is
not in a position to order the issuance of a writ against the bond posted by the
aforementioned company”.

Instead of appealing from this order, plaintiffs instituted the present
action in the Municipal Court of Manila against defendant Alto Surety, allegedly
for the specific performance by the surety of the latter’s aforementioned surety
bond. After trial, the court rendered judgment in favor of plaintiffs and
against defendant Alto Surety, ordering the latter, in the alternative, “to
deliver immediately to the plaintiffs the refrigerator in question; in default
thereof, to pay its value of P330.00; plus the sum of P42.75 for cost recovered
in the Court of First Instance of Rizal; and the further sum of P50.00 as and
for attorney’s fees; and the coats of the suit”.

From said judgment, the surety company appealed to the Court of First
Instance of Manila. On April 19, 1958, the court rendered the decision adverted
to at the beginning of this opinion, (affirming that of the municipal court)
stating in part as follows:

“Defendant’s answer to the complaint puts up the following special defenses:
‘1. Plaintiffs have no cause of action and/or the same is barred, as under
Section 10, Rule 60, in connection with Section 20, Rule 29, of the Rules of
Court, an action against the replevin bond must be filed in the same case where
the replevin bond was issued; in other words, it must be filed in Civil Case No.
4109, Court of First Instance of Rizal; 2. That the plaintiffs hereon did file a
motion to execute the defendant’s bond in Civil Case No. 4109, dated June 6,
1957, but the same was denied by the Court of First Instance of Rizal, in an
order dated June 20, 1957.

* * * * *

“This Court finds no merit in the special defenses set up in defendant’s
answer. This is so, for the obvious reason that plaintiffs’ action against
defendant surety is not for damages. As a matter of fact, plaintiffs cannot sue
defendant surety for damages on the latter’s bond (Exh. A) because, the said
bond does not speak of any liability for damages. Plaintiffs’ present action
against defendant surety is upon the said bond, the condition of which is for
the delivery to plaintiffs of the refrigerator in question, if said delivery is
adjudged by the court, as well as for the payment of such sum as plaintiffs may
recover from defendants in Civil Case No. 4109 of the CFI of Rizal, together
with the costs that may be taxed in the said case. Inasmuch as the judgment in
the said civil case adjudged that defendants therein return the said
refrigerator to plaintiffs and inasmuch further, as the said judgment could not
be executed because said defendants had disappeared and could not be located,
plaintiffs are within their rights in defendant surety upon its said bond,
because the latter expressly speaks of defendant surety’s joint and several
obligation to return said refrigerator to plaintiffs. Otherwise, there would be
no purpose in the filing of the said bond which is certainly not the case, as
already above shown. The rules and doctrines, therefore, cited by defendant in
its memorandum, while sound, have no application to the case at bar.

“Plaintiffs could not have applied for its remedy against defendant surety in
Civil Case No. 4109 of the CFI of Rizal, either before the trial or, in the
discretion of the court, before entry of final judgment therein. This is so,
because plaintiffs could neither have reasonably known, nor foreseen that
defendants in the said civil case were not going to comply with the judgment
rendered therein. This latter fact only came to the knowledge of plaintiffs
after the said judgment had become final, when said defendants could not be
located after plaintiffs asked for the execution of the said judgment. This
Court is, therefore, of the opinion, and so rules, that after defendants in the
said civil case had disappeared and failed to comply with the judgment rendered
therein, plaintiffs could sue defendant surety, on its bond, as they have
presently done in the instant case. To rule otherwise, would be to enable
defendant surety to avoid its obligation and liability upon the said bond, to
the prejudice of plaintiffs, who were compelled to yield possession of the
refrigerator, in question to said defendants, on the strength of the said bond.
Plaintiffs’ plight is excellently illustrated by the fact that, on top of their
failure to get any satisfaction of the judgment rendered in their favor and
against defendants in the said civil case, plaintiffs’ subsequent motion therein
to execute the replevin bond was also denied. Accordingly, after plaintiffs had
thus been twice repulsed in the enforcement of their rights, it is only a matter
of simple justice and high time that this Court put an end to their legal
reverses and sustained the cause of action of their complaint.

“WHEREFORE, judgment is hereby rendered ordering defendant Alto Surety &
Insurance Co., Inc., to deliver to plaintiffs the refrigerator in question or,
in default thereof, to pay to said plaintiffs the amount of P330.00, with legal
interest from the filing of the Complaint until fully paid, and the costs.

“SO ORDERED.”

Its motion for reconsideration of said decision having been denied, defendant
Alto Surety interposed this present appeal.

The appeal is well-taken. Only one point of law is in issue and it is whether
appellees, plaintiffs in a replevin case, after failing to obtain relief against
appellant’s surety bond in said case, can still maintain a separate action
against the same bond.

As the original replevin case (Civil Case No. 2957, Justice of the Peace
Court of Caloocan, Rizal) was appealed to the Court of First Instance of Rizal,
thereby vacating the proceedings in the inferior court, the surety bond in
question may be deemed as filed in Civil Case No. 4109, Court of First Instance
of Rizal. It appears that appellant filed the bond in question under, the
provisions of Rule 62 (Manual Delivery of Property) of the Rules of Court. The
procedure for holding it liable or its bond liable, is therefore governed by
Section 10 of Rule 62, in connection with Section 20, Rule 59, which
respectively read:

“Sec. 19. Judgment to include recovery against sureties.—The amount,
if any, to be awarded to either party upon any bond filed by the other in
accordance with the provisions of this rule, shall be claimed, ascertained and
granted under the same procedure prescribed in Section 20 of Rule 59.”

“Sec. 20. Claim for damages on plaintiff’s bond on account of illegal
attachment.—If the judgment on the action he 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 he 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 facts showing, his, right to damages and the amount
thereof.” (Italics supplied.)

Construing and applying these provisions of the Rules, we have held in a long
line of cases that said provisions are mandatory and require the application
upon the bond against the surety or bondsmen and the award thereof to be made
after hearing and before the entry of final judgment in the case (Visayan Surety
& Insurance Corp. vs, Pascual, 85 Phil., 779; Liberty Construction Supply
Co. vs. Pecson, 89 Phil., 50; Aguasin vs. Velasquez, 88 Phil.,
357; Abelow vs. de la Riva, L-1227, January 31, 1959; Riel vs.
Lacson, 104 Phil., 1055); that if the judgment under execution contains no
directive for the surety to pay, and the proper party fails to make any claim
for such directive before such judgment had become final and executory, the
surety or bondsman cannot be later made liable under the bond (Port Motors, Inc.
vs. Raposas, 100 Phil., 732; Luneta Motor Co. vs. Lopez, 105
Phil., 327; Visayan Surety & Insurance Co. vs. Aquino, 96 Phil., 900;
Curilan vs. Court of Appeals, 105 Phil., 1160; Alliance Insurance &
Surety Co. vs. Piccio, 105 Phil., 1192). The purpose of the
aforementioned rules is to avoid multiplicity of suits (Del Rosario vs.
Nava, 95 Phil., 637; Port Motors, Inc. vs. Raposas, supra).

In the case at bar, appellees filed their motion for execution against
appellant’s surety bond after entry of judgment by the Court of First Instance
of Rizal in Civil Case No. 4109 and the latter court correctly denied the
motion, considering that the judgment sought to be executed in said case merely
ordered the immediate delivery of the refrigerator in question, but “there was
no finding therein as to the value of said property, nor is there any directive
for the payment of the value thereof in case of failure to deliver”, much less
any directive for appellant to pay said value, in case of defendants (Alejos’)
failure to deliver said refrigerator. (Port Motors, Inc. vs. Raposas,
supra).

In entertaining the present action and in rendering the decision in question
which orders appellant, either to deliver the refrigerator in question to
appellees, or in default thereof, its value, the trial court, in effect altered
or modified the decision of the Court of First Instance of Rizal in Civil Case
No. 4109, (already final) which it cannot legally do. In the Raposas case, we
stated:

“Appellant asserts that it is not asking for a writ of execution but
for an order to hold the surety liable under the tend and for this matter the
surety should be required to show cause why the bond should not respond for the
judgment and that the application for damages against the surety be set for
hearing. To allow this would result in a reopening of the main case and
modification of the decision which had already become final.* * * After the
judgment has become final, no motion can now he entertained to correct, modify,
or alter said decision, for to do otherwise would work to divest a final
judgment of its character of finality.”

If no motion can be entertained to hold the surety liable after judgment in
the main case has become final, as it would result in the alteration of the
judgment, it stands to reason that a separate action cannot be instituted to
hold the same surety liable, for it would likewise result in the modification or
alteration of the same judgment. (See Gerardo vs. Plaridel Surety &
Insurance Co., 100 Phil., 178.)

In its decision, the trial court observed that the action against appellant
is not for damages. But the prayer of the complaint, as well as the dispositive
part of said decision, clearly refers to the payment by appellant of the sum of
P330.00 should it fail to return or deliver to appellees the refrigerator in
question, which in effect calls for damages, consisting of the value of the
refrigerator.

For all the foregoing, the decision appealed from is hereby reversed and set
aside. Without pronouncement as to costs. So ordered.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.
B. L., Paredes, Dizon and Makalintal, JJ., concur.

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^[1] Originally appealed to the Court of
Appeals, but certified to us by said court on June 28, 1961 because it involves
only questions of law.