Case Digest (G.R. No. L-48958)
Facts:
Citizens Surety and Insurance Company, Inc. v. Court of Appeals and Pascual M. Perez, G.R. No. L-48958, June 28, 1988, Supreme Court Third Division, Gutierrez, Jr., J., writing for the Court.On December 4, 1959, Citizens Surety and Insurance Company, Inc. (petitioner) issued two surety bonds (Nos. CSIC 2631 and 2632, P72,000 each) guaranteeing the performance of Pascual M. Perez Enterprises under a Contract of Sale of Goods with Singer Sewing Machine Co., Ltd. On the same date, Pascual M. Perez (as principal and as attorney-in-fact for his wife Nicasia Sarmiento and on behalf of the enterprise) executed two indemnity agreements personally obligating himself and the enterprise to indemnify petitioner for any payments, advances or damages arising from the bonds.
Also on December 4, 1959, Perez executed a deed of assignment of his stock of lumber (valued at P400,000) in favor of the surety as collateral; subsequently, on April 12, 1960, a second real estate mortgage was executed in favor of the petitioner to further secure the obligation (the mortgage was later cancelled on May 15, 1962). When the enterprise defaulted, petitioner paid Singer the aggregate P144,000 under the bonds and received partial repayments totaling P55,600, leaving an unpaid balance.
Petitioner filed a claim for sum of money against the estate of the late Nicasia Sarmiento, then administered by her husband Pascual M. Perez. After trial, the Court of First Instance of Batangas rendered judgment on April 15, 1968 ordering the administrator to pay petitioner P144,000 with ten percent interest from filing, less prior payments. Both parties appealed to the Court of Appeal...(Pro-only)
Issues:
- Did the execution of the deed of assignment (and/or the release of the second real estate mortgage) extinguish Pascual M. Perez’s obligation under the surety bonds and indemnity agreements?
- Did the deed of assignment constitute a dation in payment?
- Is petitioner entitled to interest and attorney’s fees on its money...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)