DOMINGO BAUTISTA, PLAINTIFF AND APPELLANT, VS. JOSE M. BARREDO, ET AL., DEFENDANTS AND APPELLEES.

In Civil Case No. 1636 of the
Court of First Instance of Rizal, Domingo Bautista
obtained a judgment against the Philippine Ready Mix Concrete Company, Inc. in
the amount of P104.000.00 (should be P100,000.00) of which the company only paid
the sum of P54,000.00 leaving a balance of P46.000.00. To effect payment of this
balance writs of garnishment were served on different persons one of whom was
Jose M. Barredo in his capacity as sublessee of an Osgood shovel crane belonging to the
Philippine Ready Mix Concrete Company, Inc. ordering Barredo to pay to the Sheriff of Manila instead of said
company all the rentals that may accrue under the lease in favor of the latter.

From May 6 to May 27, 1953, Barredo made several payments in the aggregate amount of P1
,800.00 to Bautista in obedience to the writ of garnishment served upon him,
refused to make any further payment on the strength of an agreement he had with
Bautista that upon the Payment of said amount he would no longer molest him.

On February 10, 1954, in the same
Case No. 1636, on Motion of Bautista, the court a quo issued an order
declaring Barredo in contempt of court and ordering
his arrest unless he pays either to Bautista or to the court the sum of P6,600.00 being the rentals that allegedly accrued when the
writ of garnishment was served upon him. On February
19, 1954,
Barredo appealed the order to the Court of Appeals and
in order to stay its effect pending appeal, he filed a bond in the sum of
P7,000.00 which was subscribed by the State Bonding and
Insurance Company, Inc. The appeal was found to be meritorious and the Court of
Appeals set aside the aforesaid order reserving to Bautista whatever action he
may desire to take to enforce any indebtedness that may still be due him. And
acting conformably to this reservation, Bautista commenced the present action
before the same court on May 31, 1958 impleading Jose
M. Barredo and the State Bonding and Insurance
Company, Inc. based not only on the liability assumed by the former under the
writ of garnishment served on him in Civil Case No. 1036, but on the supersedeas bond subscribed by the latter to stay the order
of arrest issued against Barredo when the latter
appealed from said order to the Court of Appeals.

After the parties had submitted a
stipulation of facts on the strength of which they submitted the case for
decision, the court a quo rendered judgment on February 18,
1960
dismissing the complaint against both defendants for lack of merit. Whereupon,
plaintiff took the present appeal which was certified to us on the ground that
the only questions involved are of law.

In dismissing the case against
defendant Jose M. Barredo the court a quo took
the view that he could not be impleaded on the basis
of the judgment rendered in Civil Case No. 1630 for the reason that he was not a
party therein upon the theory “that an action on the judgment cannot be
maintained against one not a party or not bound by it.” Thus, the court a
quo said on this point.

“The procedure taken by the
plaintiff in going after defendant Barredo on the
judgment rendered in Civil Case No. 1636 is, in the opinion of the Court, not
the proper one as defendant Barredo was never a party
in the afore-mentioned case, and it is elementary that an action on the judgment
cannot be maintained against one not a party or not bound by
it.”

While it is true that defendant
Jose M. Barredo was not a party in Civil Case No. 1636
when it was instituted by appellant against the Philippine Ready Max Concrete
Company, Inc., however, jurisdiction was acquired over him by the court and he
became a virtual party to the case when, after final judgment was rendered in
said case against the company, the sheriff served upon him a writ of garnishment
in behalf of appellant. Thus, as held by this Court in the case of Tayabas Land Company vs. Sharruf,
41 Phil., 382, “the proceeding by garnishment is a species of attachment for
reaching credits belonging to the judgment debtor and owing to him from a
stranger to the litigation. By means of the citation, the stranger becomes a
forced intervenor; and the court, having acquired
jurisdiction over him by means of the citation, requires him to pay his debt,
not to his former creditor, but to the new creditor, who is creditor in the main
litigation.” Moreover, Barredo was impleaded herein not on the basis of any liability assumed
by him under the judgment rendered in said case but rather on the strength of
the writ of garnishment served upon him because of his liability to a party
whose indebtedness was then the subject of execution. There is, therefore, merit
in the complaint filed against Barredo and, hence, the
court a quo erred in dismissing it merely on a matter of procedure.

The situation is different with
regard lo defendant State Bonding and Insurance Company,
Inc. which was absolved from liability by the court a quo. It should be
recalled that when Barredo appealed the order for his
arrest unless he pays the .sum of P6,000.00 to the
Court of Appeals he put up a bond to stay the order pending appeal which was
subscribed by the State Bonding and Insurance Company, Inc, The liability of
this company was expressed in the contract as follows:

“The condition of this obligation
is such that if the appeal of Jose M. Barredo be
decided against him and he abides by and performs, the judgment or order, then
this bond shall be null and void; otherwise, it shall remain in full force and
effect.”

And in absolving the company, the
court a quo made the following comment:

“The above cited provisions of the bond indubitably shows that defendant
company’s liability Is predicted on the happening of two events: (1) that the
appeal is decided against defendant Barredo and (2)
that defendant Barredo dots not abide by and perform
the judgment or comply with the same. This moans that even if the appeal were
decided against Barredo and the latter complies with
the judgment, the bonding company would still be free from liability. In the
present case, the appeal was decided in favor of Barredo, thus it becomes indubitable that the principal
condition of the contract that is an adverse judgment against Barredo will not happen and such being so therefore the
liability of defendant had been extinguished.”

We find no flaw in the foregoing
finding since it appears that the liability of the bondsman is predicated upon
the condition that the appeal of Barredo be decided
against him and the decision was in his favor. Hence, by the very wording of the
bond, because of the non-fulfillment of the condition, the same became null and
void and without effect.

WHEREFORE, the decision appealed from
insofar as the State Bonding and Insurance Company, Inc. is hereby affirmed. The
decision insofar as defendant Jose M. Barredo is
concerned is hereby reversed. The case is remanded to the court a quo with the
directive that it decides the case with regard to Barredo on the merits. No pronouncement as to costs.

Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala, Makalintal, Bengzon, J.P. and Zaldivar, JJ., concur.