SERAFIN TIJAM, ET AL., PLAINTIFFS-APPELLEES, VS. MAGDALENO SIBONGHANOY ALIAS GAVINO SIBONGHANOY, ET AL., DEFENDANTS, MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) BONDING C…

Tijam versus Sibonghanoy

The Case

This is the case of Tijam versus Sibonghanoy, decided by the Supreme Court in April 1968. The spouses Serafin Tijam and Felicitas Tagalog sued the spouses Magdaleno Sibonghanoy and Lucia Baguio in the Court of First Instance of Cebu to collect a sum of money. The Manila Surety and Fidelity Company, Incorporated, which had filed a counter-bond to dissolve the writ of attachment, later became the appellant. The case matters for one enduring rule: a party who invokes a court's jurisdiction, submits the case for decision, and waits for the outcome may not, after losing, turn around and attack that same jurisdiction. That is the doctrine of estoppel by laches, and it is the heart of this decision.

Procedural History

The plaintiffs commenced the action in the Court of First Instance of Cebu in July 1948. After trial, the court rendered judgment in favor of the plaintiffs, and the judgment became final and executory. Execution against the defendants was returned unsatisfied, so the plaintiffs moved for execution against the surety's counter-bond. The trial court denied the first motion for lack of a prior demand on the surety. After demand was made and the surety failed to pay, the plaintiffs filed a second motion. The court granted the surety time to answer; the surety filed none, and the court issued the writ of execution. The surety moved to quash the writ, the motion was denied, and the surety appealed to the Court of Appeals.

The Court of Appeals affirmed the orders appealed from in December 1962. Five days after receiving notice of that decision, the surety asked for an extension of time to move for reconsideration. Instead of a motion for reconsideration, it filed a motion to dismiss, raising for the first time the lack of jurisdiction of the Court of First Instance. The Court of Appeals set aside its own decision and certified the case to the Supreme Court, because the Supreme Court has exclusive appellate jurisdiction over cases in which the jurisdiction of an inferior court is in issue. The case thus reached the Supreme Court by certification.

Facts

On July 19, 1948, barely one month after the Judiciary Act of 1948 took effect, the Tijam spouses sued the Sibonghanoy spouses in the Court of First Instance of Cebu to recover 1,908 pesos, with legal interest and costs. A writ of attachment issued against the defendants' properties, but it was dissolved when the defendants and the Manila Surety and Fidelity Company filed a counter-bond on July 31, 1948. From that moment, the surety became a quasi-party to the case.

After trial, judgment was rendered for the plaintiffs, and it became final and executory. Execution against the defendants was returned unsatisfied. The plaintiffs then moved for execution against the surety's bond. The surety opposed the motion on grounds of failure to prosecute and absence of demand, and even asked to be relieved of liability, but it never raised lack of jurisdiction. The trial court denied the motion solely for want of a prior demand. Demand was then made, the surety still did not pay, and the plaintiffs filed a second motion for execution against the counter-bond.

The surety's counsel appeared at the hearing and asked for time to answer. The court granted the period and ordered that the incident be deemed submitted for resolution thereafter. The surety filed no answer. The court granted execution, and the writ issued. The surety then moved to quash on the ground that no summary hearing had been held under Section 17 of Rule 59. That motion and its motion for reconsideration were denied, and the surety appealed. It lost in the Court of Appeals, and only then, almost fifteen years after the case began, did it raise the question of jurisdiction.

Issues

• Whether or not the surety is barred by laches from raising, for the first time after an adverse decision, the lack of jurisdiction of the Court of First Instance over the action.
• Whether or not the Court of First Instance had original jurisdiction over a claim of 1,908 pesos after the Judiciary Act of 1948 placed such claims within the exclusive original jurisdiction of inferior courts.
• Whether or not the writ of execution against the surety's bond was validly issued without a formal summary hearing under Section 17 of Rule 59.

Applicable Provisions

Section 17 of Rule 59 of the Rules of Court, as quoted in the decision, provides:

If the execution be returned unsatisfied in whole or in part, the surety or sureties on any bond given pursuant to the provisions of this rule to secure the payment of the judgment shall become finally charged on such bond, and bound to pay to the plaintiff upon demand the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing in the same action.

This is the provision the surety invoked, and the Court construed "summary hearing" to mean a dispatch procedure, not a formal trial.

Section 12 of Rule 59, as described in the decision, provides that a bond filed for the discharge of an attachment is:

to secure the payment to the plaintiff of any judgment he may recover in the action

and it stands in place of the property released. This is why the surety's liability attached automatically once the judgment became executory and execution was returned unsatisfied.

Ruling

On the first issue, the Court held that the surety was barred by laches. The Court conceded that jurisdiction over the subject matter is conferred by law and that lack of it may be raised at any stage. But it ruled that the surety could no longer invoke that plea at such a late hour. The Court defined laches as failure or neglect, for an unreasonable and unexplained length of time, to do that which by due diligence could or should have been done earlier. It stressed that laches is not a mere question of time but principally a question of the inequity or unfairness of permitting a right to be asserted. The Court quoted the rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief and, after obtaining or failing to obtain it, repudiate that same jurisdiction. The surety had become a quasi-party in 1948, had invoked the court's jurisdiction at several stages, and only raised jurisdiction after losing. To allow it would render useless all the proceedings since 1948 and compel the judgment creditors to go up their Calvary once more.

On the second issue, the Court acknowledged that the claim of 1,908 pesos fell within the exclusive original jurisdiction of inferior courts under the Judiciary Act of 1948. But because of the surety's laches, the Court did not annul the proceedings. The jurisdictional defect was real, yet the party was estopped from using it as a weapon after gambling on the outcome.

On the third issue, the Court adopted in full the reasoning of the Court of Appeals. A summary hearing is not carried on in the formal manner of ordinary actions; it is a procedure to resolve a question with dispatch. What is essential is that the party be notified, given an opportunity to be heard, and allowed to interpose a defense. The surety's counsel was present, asked for time to answer, was given that time, and filed nothing. It could not complain of being deprived of its day in court. The Court also held that no separate judgment against the surety was needed, because the bond stood in place of the attached property and liability attached automatically upon demand and failure to pay.

Doctrine

A party may be barred by laches from questioning the jurisdiction of a court. While lack of jurisdiction over the subject matter may generally be raised at any stage, a party who invokes the court's jurisdiction to secure affirmative relief, submits the case for decision, and accepts the judgment if favorable, cannot attack that jurisdiction when the judgment turns adverse. This is estoppel by laches, grounded on public policy and the inequity of permitting such conduct. The doctrine is tied to Section 17 of Rule 59: a summary hearing requires only notice and an opportunity to be heard, not a formal trial, and the surety's liability on a counter-bond attaches automatically once the judgment is executory, execution is returned unsatisfied, and demand is made.

Disposition

The Supreme Court affirmed the orders appealed from, with costs against the Manila Surety and Fidelity Company, Incorporated. The plaintiffs prevailed.

Remember This

Memorize this line: jurisdiction may be raised at any stage, but not by a party who invoked it, gambled on the result, and lost, for that party is barred by laches. Examiners use this case to test estoppel by laches against the general rule that lack of jurisdiction over the subject matter is never waived.