Facts:

In the case of Isidoro P. Aurelio, in his capacity as Administrator of the Estate of the late Isidro P. Aurelio, versus First National Surety & Assurance Company, the events unfolded in the context of Special Proceedings No. 684 at the Court of First Instance of Nueva Ecija. The First National Surety & Assurance Company filed a claim against the estate of the deceased Isidro P. Aurelio on October 12, 1955, amounting to P14,030.10. This claim was based on Bond No. LES-080, which the deceased had signed as surety in favor of the Republic of the Philippines. The deceased, along with two other individuals, had entered into an indemnity contract, agreeing to pay the surety company for any losses, damages, costs, and attorney's fees incurred. The claim included P11,717.48 demanded by the Philippine National Bank, P555.00 for bond premiums over three years, and P1,757.62 for attorney's fees.

On October 26, 1955, the lower court approved the surety company's cl...

Facts:

Background of the Case

• The case arose in Special Proceedings No. 684 of the Court of First Instance of Nueva Ecija for the settlement of the intestate estate of the deceased Isidro P. Aurelio.
• The petitioner, Isidoro P. Aurelio, acted in his capacity as administrator of the estate of the late Isidro P. Aurelio.
• The respondent, First National Surety & Assurance Co., had issued Bond No. LES-080 as surety on behalf of the deceased in favor of the Republic of the Philippines.

Claim and Indemnity Agreement

• The deceased, along with two other persons, had signed an indemnity contract wherein they agreed to pay, jointly and severally, any losses, damages, payments, costs, expenses (including attorney's fees, premiums for renewals or extensions) incurred by the surety company.
• The surety company presented a claim totaling P14,030.10, which was broken down as follows:
• P11,717.48 representing the demand from the Philippine National Bank (through the Bureau of Commerce) under the bond.
• P555.00 for premiums on the bond for three years.
• P1,757.62 for attorney's fees.

Lower Court Proceedings and Orders

• On October 26, 1955, the lower court approved the surety company’s claim but only in the sum of P11,717.48, directing the Administrator to pay this amount within sixty days.
• The Administrator sought reconsideration on the following grounds:
• The claim was contingent on payment of the principal obligation, which had not yet been discharged in full.
• A portion of the principal obligation had already been paid to the Philippine National Bank, and arrangements were in place to settle the balance.
• On November 25, 1955, the court denied the motion for reconsideration, affirming that the indemnity agreement required payment “as soon as demand is received,” thereby establishing the claim as due for payment.
• The order approving the claim in the amount of P11,717.48 became final and executory as no appeal was taken.

Subsequent Developments and Amended Order

• On June 22, 1956, the respondent filed a petition with the trial court asserting that the Administrator had already paid P11,718.00 and prayed for an order directing payment of the remaining balance of P3,322.18 with interest until full satisfaction of its claim.
• The Administrator opposed the petition, insisting that the claim had been conclusively approved and executed at P11,717.48, and no further payment was due.
• On July 6, 1956, the trial court issued an amended order stating:
• The surety company’s full claim amounted to P14,030.10, not merely the P11,717.48 previously approved.
• The earlier order was amended on the rationale that a clerical error had occurred by limiting the approved amount.
• The court ordered the Administrator to pay the additional balance of P3,322.18 along with interest calculated at a daily rate of P4.35 from June 22, 1956 until full payment was rendered.

Petition for Certiorari

• The Administrator filed a petition for certiorari with the Supreme Court challenging the amended order.
• The basis of the petition was that the order of October 26, 1955 had already become final, unappealable, and had been executed by payment of P11,718.00, thus negating the lower court’s authority to subsequently alter it.
• The issue revolved around whether a final and executory order could be amended to correct what was claimed to be a clerical error that resulted in a substantial increase of the awarded amount.

Issue:

• Whether the lower court possessed jurisdiction to amend its final and executory order awarding P11,717.48 to instead award the respondent’s claim at P14,030.10 including additional interest.

• Whether the correction alleged by the respondent amounted merely to the rectification of a clerical error, or if it in fact constituted a substantial and material change in the original judgment.

• Whether the amendment of a final and executory judgment after its full execution violates principles of judicial finality and the rights acquired by the parties.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)