G.R. No. 74696. November 11, 1987
JOSE D. CALDERON, PETITIONER, VS. THE INTERMEDIATE APPELLATE COURT, GEORGE SCHULZE, GEORGE SCHULZE, JR., ANTONIO C. AMOR, MANUEL A. MOZO, AND VICTOR M. NALUZ, RESPONDENTS.
PARAS, J.:
For review on certiorari is respondent appellate Court’s
decision[1]
in AC-G.R. No. 01420, which affirmed the Regional Trial Court’s decision[2]
appealed from holding the plaintiff Jose D. Calderon (petitioner herein) and
his bondsman the Integrated Bonding and Insurance Company, Inc., jointly and
severally liable to pay defendants (private respondents herein), damages caused
by the filing by Calderon of the allegedly unwarranted suit and the wrongful and malicious attachment of private
respondents’ properties.
The facts of the case are
briefly as follows:
On November 2, 1976,
petitioner Calderon purchased from the private respondents the following: the Luzon Brokerage Corporation (LBC, for
brevity) and its five (5) affiliate companies, namely – Luzon Air Freight,
Inc., Luzon Port Terminals Services, Inc., Luzon (GS) Warehousing Corporation,
GS Industrial Management Corporation, and GS Luzon Trucking Corporation. Twenty one (21) days thereafter or on November 23, 1976, the Bureau of
Customs suspended the operations of LBC for failure to pay the amount of
P1,475,840.00 representing customs taxes and duties incurred prior to the
execution of the sale. In order to lift
the suspension, Calderon paid the sum of P606,430.00 to the Bureau of Customs.
On October 27, 1977,
Calderon filed a complaint against private respondents to recover said amount
of P1,475,840.00, with damages by reason of breach of warranty. In the same complaint, the petitioner prayed
for a preliminary attachment, alleging:
that private respondents had deliberately and willfully concealed from
his knowledge such staggering liability of the LBC for the purpose of
misleading him into buying the six
aforesaid companies; and that private respondent Schulze is about to depart
from the Philippines in order to defraud his creditors.
To support the petition for preliminary attachment, the
petitioner posted a surety bond of P1,475,840.00. On October
28, 1977, the trial court issued a writ of preliminary attachment,
whereupon properties of the private respondents were attached and their bank
deposits were garnished.
On November 10, 1977,
petitioner Calderon filed an amended complaint, alleging that while the
liabilities of LBC are reflected in its books, the aforesaid amount was
fraudulently withdrawn and misappropriated by private respondent Schulze. (pp. 7-18, Rollo).
On the other hand,
private respondents claimed: that the
amount of P1,475,840.00 due to the Bureau of Customs represents the duties and
taxes payable out of the advanced payments made by LBC’s
client, Philippine Refining Company (PRC, for brevity) in August, September and
October, 1976, and in the first and second weeks of November 1976, after
Calderon himself had taken control of the management of LBC (Exhibit A); that
these deposit payments were properly recorded in the books of the corporation
and existing as part of the corporate funds; that from the first week of June,
1976 up to October 30, 1976, private respondent Schulze fully disclosed and
explained to Calderon that these customer’s advanced deposit payments (including
those of the PRC) are to be paid to the Bureau of
Customs when their corresponding
customs taxes and duties become due; that during this phase of the negotiation,
Calderon and his representatives inspected and studied the corporate books and
records at will and learned the daily operations and management of LBC; that the petitioner did not pay out of his
own pocket but out of the LBC funds the said amount of P606,430.30 demanded by
the Bureau of Customs, as evidenced by a manager’s check No. FEBTC 25092
(Exhibits 9, 10, 11 & 38) and another facility negotiated with the Insular
Bank of Asia and America (Exhibit K-2); and that private respondents are
setting up a counterclaim for actual, moral and exemplary damages as well as
attorney’s fees, as a consequence of the filing of the baseless suit and the
wrongful and malicious attachment of their properties. (pp. 217-221, Rollo).
On November 17, 1977,
private respondents filed a counterbond, whereupon
the trial court issued an order directing the sheriff to return all real and
personal properties already levied upon and to lift the notices of garnishment
issued in connection with the said attachment (Annex B, p. 42, Rollo).
After trial, the trial court dismissed the complaint, holding
Calderon and his surety First Integrated Bonding and Insurance Co., Inc.,
jointly and severally liable to pay the damages prayed for by the private
respondents.
Said decision was
affirmed on appeal, although slightly modified in the sense that the award of
moral and exemplary damages in favor of private respondents Schulze and Amor was reduced.
The dispositive portion of the judgment of affirmance and modification reads:
“WHEREFORE, the judgment of the lower court is modified as
follows:
To defendant-appellee George Schulze:
P650,00.00
as moral damages and
P200,000.00 as exemplary damages.
To defendant-appellee Antonio C. Amor:
P150,000.00
as moral damages and
P
30,000.00 as exemplary damages.
“All other dispositions in the judgment appealed from,
including the dismissal of the amended complaint, are hereby affirmed in
toto.
“SO ORDERED.”
In his petition, petitioner Calderon asserts, among other things,
that the court below erred:
I
IN HOLDING THAT THE PETITIONER FAILED TO ESTABLISH HIS CLAIMS.
II
IN HOLDING THAT THE PRELIMINARY ATTACHMENT HAD BEEN WRONGFULLY AND
MALICIOUSLY SUED OUT.
III
IN HOLDING THAT THE PETITIONER IS LIABLE NOT ONLY FOR ACTUAL
DAMAGES BUT MORAL AND EXEMPLARY DAMAGES AS WELL.
On the other hand, petitioner Insurance Company raises the
following issues:
I
WHETHER OR NOT THE PETITIONER SURETY IS LIABLE FOR DAMAGES ON ITS
CONTRACTED SURETYSHIP NOTWITHSTANDING THE DISSOLUTION OF THE WRIT OF
PRELIMINARY ATTACHMENT, AS A CONSEQUENCE OF THE FILING OF THE DEFENDANT’S
COUNTER-BOND, WHEREBY LEVIED PROPERTIES WERE ORDERED BY THE COURT RETURNED TO PRIVATE RESPONDENTS AND THE NOTICES
OF GARNISHMENT ISSUED IN CONNECTION THEREWITH ORDERED LIFTED.
II
WHETHER OR NOT THE SUBSEQUENT FILING BY PRIVATE RESPONDENTS OF A
COUNTER-BOND TO DISCHARGE THE WRIT OF PRELIMINARY ATTACHMENT CONSTITUTE A
WAIVER ON ANY DEFECT IN THE ISSUANCE OF THE ATTACHMENT WRIT.
III
WHETHER OR NOT A SURETY IS A GUARANTOR OF THE EXISTENCE OF A GOOD
CAUSE OF ACTION IN THE COMPLAINT.
The petition is devoid of
merit.
Whether or not the amount
of P1,475,840.00 was duly disclosed as an outstanding liability of LBC or was
misappropriated by private respondent Schulze is purely a factual issue. That Calderon was clearly in bad faith when
he asked for the attachment is
indicated by the fact that he failed to appear in court to support his charge
of misappropriation by Schulze, and in effect, preventing his being
cross-examined, no document on the charges was presented by him.
What the Appellate Court
found in this regard need not be further elaborated upon. The Appellate Court ruled:
“xxx The record shows that appellant
Calderon failed to produce any evidence in support of his sworn charge that appellee Schulze had deliberately and willfully concealed
the liabilities of Luzon Brokerage Corporation.
Neither did appellant Calderon prove his sworn charges that appellee Schulze had maliciously and fraudulently withdrawn
and misappropriated the amount of P1,475,840.00 and that all the defendants had maliciously
and fraudulently concealed and withheld from him this alleged liability of
Luzon Brokerage Corporation in breach
of the contract-warranty that said corporation had no obligations or liabilities
except those appearing in the books and records of the said corporation. Indeed, appellant Calderon never appeared in
the trial court to substantiate the charges in his verified complaints and in
his affidavit to support his petition for the issuance of a writ of
attachment. He distanced himself from
the appellees and avoided cross-examination
regarding his sworn allegations. xxx
“xxx But even though appellant Calderon failed to prove his
serious charges of fraud, malice and bad faith, the appellees
took it upon themselves to show that they did not conceal or withhold from
appellant’s knowledge the deposits made by Philippine Refining Co., Inc. with
Luzon Brokerage Corporation and that they did not withdraw and misappropriate
the deposits made by Philippine Refining Co., Inc. with Luzon Brokerage Corporation.
“The books and records of Luzon Brokerage Corporation on which the
Financial Statement of Luzon Brokerage Corporation, as of October 31, 1976 was
prepared by the auditing firm retained by appellant Calderon himself (Exhibit
1), disclose that the liabilities of Luzon Brokerage Corporation in the total
amount of P4,574,498.32 appear under the heading ‘Customers Deposit’ (Exhibit
1-A) this amount includes the deposit of Philippine Refining Co., Inc. in the
sum of P1,475,840.00.
“But appellant Calderon contends that this financial statement
was dated February 4, 1977
(see Exhibit 1-C). There is nothing
commendable in this argument because the bases of the financial statement were
the books, records and documents of Luzon Brokerage Corporation for the period
ending October 31, 1976,
which were all turned over to and examined by appellant Calderon and his
executive, legal and financial staffs.
There is also no merit in the contention of appellant Calderon that the
appellees have tampered the books of Luzon Brokerage
Corporation because there is no proof to back this charge, let alone the fact
that appellant Calderon did not even present the said books to support his
charge.
“As stated above, the amount of customers’ deposits in the sum
of P4,574,498.32 includes the deposits of Philippine Refining Co., Inc.
(Exhibits 46-A, 46-B, 46-C, 46-D, 46-E, 46-F, 46-G, 46-H, 46-I, 46-J, t.s.n. July 23, 1980, pp. 12-13, 14-15). The amounts deposited by Philippine Refining
Co., Inc. on various dated with Luzon Brokerage Corporation made before the execution of the sale were all entered in
three other corporate books of Luzon Brokerage Corporation namely, the Cash
Receipts Register (Exhibits 39-A-1 to 39-K-1 and 39-A-1-B to 39-
K-1-B), the Journal Vouchers (Exhibits 42 to 46 and 42-A to
45-A), and the Customer’s Deposit Ledger (Exhibits 46-A to
46-J) xxx.
Thus, the claim of appellant Calderon that the deposits made by
Philippine Refining Co., Inc. with Luzon Brokerage Corporation of P406,430.00
on August 24, 1976 (Exhibit N), P53,640.00 on October 13, 1976 (Exhibit O),
P406,430.00 on September 8, 1976 (Exhibit P), P199,508.00 on September 24, 1976
(Exhibit Q), P52,738.00 on October 22, 1976 (Exhibit R), and P264,436.00 on
October 7, 1976 (Exhibit S) were not entered in the books of Luzon Brokerage Corporation,
is completely without merit. xxx” (pp. 85-87, Rollo)
It is evident from the
foregoing that the attachment was maliciously sued out and that as already
pointed out Schulze was not in bad faith.
While as a general rule,
the liability on the attachment bond is limited to actual damages, moral and
exemplary damages may be recovered where the attachment was alleged to be
maliciously sued out and established to be so.
(Lazatin vs. Twano
et al, L-12736 July 31, 1961)
In the instant case, the
issues of wrongful and malicious suing out of the writ of preliminary
attachment were joined not only in private respondents’ motion to discharge the
attachment but also in their answer to the amended complaint (p. 38, Rollo). The trial
court observed that the books and records of Luzon Brokerage Corporation disclose
that the liabilities of the said corporation in the total amount of
P4,574,498.32 appear under the heading “Customs Deposit” (Exhibit 1-A) and this
amount includes the deposit of
Philippine Refining Co., Inc. in the sum of P1,475,840.00 (p. 26, Rollo). On the other
hand, plaintiff never appeared in court, and failed to produce any evidence to
substantiate his charges (p. 26, Rollo).
Well settled is the rule that the factual findings of the trial
court are entitled to great weight and respect on appeal, especially when
established by unrebutted testimonial and
documentary evidence, as in this case.
Anent the petition of the
surety, We say the following:
Specifically, petitioner surety contends that the dissolution of
the attachment extinguishes its obligation under the bond, for the basis of its
liability, which is wrongful attachment, no longer exists, the attachment bond
having been rendered void and ineffective, by virtue of Section 12,Rule 57 of the
Rules of Court. (p. 5, Petition)
While Section 12, Rule 57 of the Rules of Court provides that
upon the filing of a counterbond, the attachment is
discharged or dissolved, nowhere is it provided that the attachment bond is
rendered void and ineffective upon the filing of counterbond.
The liability of the
attachment bond is defined in Section 4, Rule 57 of the Rules of Court, as
follows:
“Sec. 4. Condition of
applicant’s bond. – The party applying for the order must give a bond executed
to the adverse party in an amount to be fixed by the judge, not exceeding the
applicant’s claim, conditioned that the latter will pay all the costs which may be adjudged to the adverse party and all damages which he
may sustain by reason of the attachment, if the court shall finally adjudge
that the applicant was not entitled thereto.”
It is clear from the above provision that the responsibility of
the surety arises “if the court shall finally adjudge that the plaintiff
was not entitled thereto.” In Rocco vs. Meads, 96 Phil Reports 884, we
held that the liability attaches if the plaintiff is not entitled to the
attachment because the requirements entitling him to the writ are wanting, or
if the plaintiff has no right to the attachment because the facts stated in his
affidavit, or some of them, are untrue.
It is, therefore, evident that upon the dismissal of an attachment
wrongfully issued, the surety is liable for damages as a direct result of said attachment.
Equally untenable is the Surety’s contention that by filing a counterbond, private respondents waived any defect or flaw
in the issuance of the attachment writ, for they could have sought, without
need of filing any counterbond, the discharge of the
attachment if the same was improperly or irregularly issued, as provided in Section
13, Rule 57 of the Rules of Court.
Whether the attachment was discharged by either of the two (2)
ways indicated in the law, i.e., by filing a counterbond or by showing that the
order of attachment was improperly or irregularly
issued, the liability of the surety on the attachment bond subsists because the
final reckoning is when “the Court
shall finally adjudge that the
attaching creditor was not entitled” to the issuance of the attachment
writ in the first place. The attachment
debtor cannot be deemed to have waived any defect in the issuance of the
attachment writ by simply availing himself of one way of discharging the
attachment writ, instead of the other.
Moreover, the filing of a counterbond is a
speedier way of discharging the attachment writ maliciously sought out by the
attaching creditor instead of the other way, which, in most instances like in
the present case, would require presentation of evidence in a fullblown trial on the merits and cannot easily be settled
in a pending incident of the case.
We believe, however, that in the light of the factual situation
in this case, the damages awarded by the Intermediate Appellate Court are
rather excessive. They must be reduced.
WHEREFORE, the judgment of said Appellate Court is hereby modified
as follows: Both petitioner Calderon and
petitioner First Integrated Bonding and Insurance Company, Inc. are hereby
ordered to give jointly and severally:
1. Respondent George Schulze, P250,000.00 as
moral damages and P50,000.00 as exemplary damages; and
2.
Respondent Antonio C. Amor, P50,000.00 as
moral damages and P10,000.00 as exemplary damages.
The rest of the judgment of the Intermediate Appellate Court is
hereby AFFIRMED.
SO ORDERED.
Yap, (Chairman), Melencio-Herrera,
and Padilla, JJ., concur.
Sarmiento, J., no part; was the former counsel of petitioner in G.R.
No. 74696.
[1]
Penned by Justice Crisolito Pascual and concurred
in by Justices Jose C. Campos, Jr., Serafin E. Camilon and Desiderio P. Jurado.
[2]
Penned by Judge Jose Castro