VISAYAN SURETY & INSURANCE CORPORATION, PETITIONER, VS. HON. BERNABE DE AQUINO, JUDGE OF THE COURT OF FIRST INSTANCE OF TARLAC, ET AL., RESPONDENTS.

This is a proceeding by way of certiorari against an order of the Court of
First Instance of Tarlac, Honorable Bernabe de Aquino presiding. In civil case
No. 397 of said court, entitled Ysidra Cojuanco, et al. vs. Manuel
Ernesto Gonzales, filed in said court in May, 1949, judgment was rendered
ordering defendant to pay plaintiffs P6,000 a year from March 1, 1941 as rentals
of a parcel of land leased by plaintiffs to the defendant. This judgment was
affirmed by us on September 15, 1953. On September 12,1949, while the case was
pending trial, plaintiffs prayed for the appointment of a receiver for the
property leased, filing a bend therefor. But as the defendant filed a
counterbond, defendant was allowed to retain the land leased. The terms of the
bond by the defendant are as follows:

“Now Therefore, we Manuel Ernesto Gonzales as Principal and the Visayan
Surety & Insurance Corporation as Surety, hereby bind ourselves jointly and
severally to the plaintiffs, their heirs, executors, administrators and assigns
in an amount not exceeding thirty six thousand (P36.000.00) pesos, Philippine
currency, conditioned that the defendant will pay all damages which the said
plaintiffs may suffer by reason of the non-appointment or the discharge of the
receiver in the above-entitled case.”

As stated above, by reason of the above counterbond filed by him, defendant
continued in possession of the property. The case was appealed to the Supreme
Court, where the judgment of the Court of First Instance already referred to was
affirmed. Upon the return of the records of the case to the Court of First
Instance, plaintiffs filed a motion dated December 23, 1953, alleging that by
reason of the filing of the counterbond by the Visayan Surety & Insurance
Corporation, the plaintiffs were deprived of the harvest of the land leased, and
praying that execution issue against the said Visayan Surety & Insurance
Corporation for the amount of its bond. The motion was amended on February 15,
1954 so as to pray for opportunity to prove the damages that had been caused
plaintiffs by the nonappointment of the receiver. The Visayan Surety and
Insurance Corporation filed an opposition to the amended motion, but this was
overruled and the motion granted in an order dated August 4, 1954, which reads
as follows:

“Acting on the amended motion dated February 16, 1954, filed by the
representation of plaintiffs in Civil Case No. 397, the Court finds said amended
motion well taken.

“In View Whereof, let this amended motion be set for August 16, 1954 at 8:30
o’clock in the morning, for the reception of evidence on damages suffered by
plaintiffs by reason of non-appointment of receiver in Civil Case No. 397. Upon
the reception of the evidence the Court will determine the damages suffered, for
the payment of which execution will issue against the Visayan Surety &
Insurance Corporation of Manila.

“So ordered.”

It is against the above order of the Court of First Instance that the
petition for certiorari has been filed, petitioner alleging that the damages
sought to be claimed are not included in the judgment, which had become final
and that the order is in excess of the court’s jurisdiction, as it amounts to an
order for the reopening of the case for the purpose of amending the decision
which has already become final and executory, and adding thereto a liability of
the petitioner which was not adjudged in the original decision. The principal
defenses interposed by the respondents are that the petitioner herein had notice
that respondents are claiming damages for the retention of the leased premises
by the defendant Manuel Ernesto Gonzales; that the proceeding adopted by the
Judge in its order is a summary hearing authorized by the provisions of Section
17 of Rule 59 to enforce the liability on the counterbond; that the notice to
the surety and proof of damages required in Section 20 of Rule 59 w^s complied
with at the trial of the case because counsel for petitioner herein was counsel
for the defendant in the case; and that the proceeding complained of Was within
the power of the court as it was merely executing its judgment, the said order
being merely to carry out the execution of the judgment, which execution falls
within his authority from the time the judgment becomes final until the
expiration of five years from the entry of judgment.

The rule applicable to the case at bar is Section 9, Rule 61, which
provides:

“Sec. 9. 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 as prescribed in section 20 of Rule
59.”

In accordance therewith, and following the procedure outlined in Section 20
of Rule 59, respondents in this case should have filed a claim in a supplemental
complaint in the court of first instance for the rentals of the land due up to
the time of the judgment up to November 4, 1950) in said court, and an
application in this Court for the rentals due from the date of the judgment
appealed from (November 4, 1950) to the date of our judgment (September 15,
1953) for the rentals up to the latter date. The supplemental complaint in the
court of first instance and the application in this Court should have been made
before the judgment in either court was rendered or had become final, so that
the damages awarded could bave been included therein. The philosophy of this
requirement has been carefully pointed out in the case of Santos vs. Moir, 36
Phil., 350, thus:

“The purpose of these provision is not difficult to ascertain. It does away
with the necessity of calling the same witnesses in a second action to give the
same testimony they have in the first; the presentation of the same evidence a
second time; and the litigation of the same questions which had been litigated
before. It is clear that when the cause is finally adjudicated and the
injunction continued or dissolved the right to the injunction is definitely and
finally determined; and with it the right to damages. The liability of the
sureties is also determined in large part by such adjudication. Thereafter, the
evidence as to their liability, if any, is largely formal. This being so, why
not settle the whole matter at the time the cause is decided on the merits?

“It not only saves an extra action in the trial court but it avoids an extra
appeal. If there are two separate actions there may be two appeals; one from the
judgment on the merits, the other from the judgment for damages for wrongful
issuance of the injunction. Why have two appeals when there need be one
only?”

The provision has been consistently followed in a long line of decisions
(Monteverde vs. Nakata, 30 Phil., 608; Yap Unki vs. Chua
Jamco, 14 Phil, 602; Nava vs. Hofilena, 63 Phil., 738, etc.), and there
is no reason for deviating from the express language of the provision and the
consistent rulings of the Court.

But it is contended by respondents that the order is in consonance with
Section 17 of Rule 59 of the Rules of Court. This section is applicable to
attachment bonds only and has not been made applicable in cases of
receivership.

It is also contended that the order complained of has been issued under the
authority of the court to execute its judgments. As the judgment is against the
defendant personally, not against the surety on his counterbond, the execution
to be issued must be against the property of the defendant only (Sec. 8, Rule
39, Rules of Court), and it can not issue against the counterbond because there
is no judgment against the 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 can not per se be
enforced by execution against the surety on his counterbond; a judgment against
the surety must first be secured, before his counterbond may be proceeded
against.

Wherefore, the petition is hereby granted, the order complaint of is revoked
and the preliminary injunction we have granted made absolute. With costs against
respondents.

Pablo, Acting C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista
Angelo, Concepcion and Reyes, J. B. L., JJ., concur.

Writ granted.