G.R. No. 240143 - Maitim vs. Teknika Skills and Trade Services, Inc.

On October 28, 1924, Jerry O. Toole, Antonio K. Abad, and Anastacio R. Santos, the defendant, organized a general mercantile partnership under the style Philippine-American Construction Company with a capital of P14,000.
P10,000 of the capital was raised by way of loan from Paulino Candelaria, with the partnership and copartners undertaking to pay the indebtedness jointly and severally on or before June 1925.

After the partnership violated the conditions of its contract to repay the loan, Paulino Candelaria instituted civil case No. 3838 in the Court of First Instance of Nueva Ecija on May 15, 1925, against the partnership and its copartners for the recovery of the loan plus interest and stipulated attorney’s fees.
The court rendered judgment on January 25, 1926, sentencing the defendants to pay the sum of P9,317 with legal interest from the filing of the complaint, plus P500 as liquidated damages and P1,000 as attorney's fees. This judgment was later affirmed by the Supreme Court on December 17, 1926 (G.R. No. 26131).

Upon filing the complaint, Paulino Candelaria obtained a writ of attachment on properties belonging individually to the partners: P50 for Jerry O. Toole, P12,150 for Antonio K. Abad, and P2,733 for Anastacio R. Santos. No attachment was made on the properties of the partnership itself.
In response, the partnership moved for the discharge of the attachments and, offering a bond of P10,000, had the court lift the attachments. On May 29, 1925, the partnership, represented by Antonio K. Abad (as principal) together with guarantors Santiago Lucero and Meliton Carlos, executed the bond in favor of Candelaria under Section 440 of the Code of Civil Procedure.
Notably, defendant Anastacio R. Santos neither intervened in nor signed this bond; however, it was testified that he induced Antonio K. Abad to obtain the signature of Lucero because of his good relations with him.

After the bond discharged the attachments and the properties were returned, a writ of execution was issued against the judgment debtors, but no properties could be found to satisfy the judgment.
Consequently, a writ of execution was issued against the guarantors, including the plaintiff (in her capacity as judicial administratrix of the deceased Santiago Lucero) and Meliton Carlos.
Forced by execution, the plaintiff eventually paid Candelaria P5,565.55, while Meliton Carlos paid P5,135 under his bond obligation.
Subsequently, the plaintiff and Carlos recovered from Antonio K. Abad a sum of P3,800, which was equally divided between them, reducing the plaintiff’s net payment to Candelaria to P3,665.55.

Acting in her official capacity, the plaintiff demanded that defendant Anastacio R. Santos return the sum of P3,665.55 advanced to the creditor on behalf of the deceased Santiago Lucero.
Upon his refusal, the plaintiff instituted the present action leading to the appealed judgment.

Whether, under the proven facts and admitted circumstances, the defendant (Anastacio R. Santos) is legally bound to reimburse the plaintiff for the sum advanced to Paulino Candelaria as a result of the discharge bond executed by the deceased Santiago Lucero.

Whether the defendant’s non-involvement in applying for or signing the bond relieves him of the obligation to indemnify, taking into account that his properties were attached and that he was aware of the proceedings.

The appropriate application of the Civil Code provisions (specifically Articles 1822, 1838, and 1158) versus the contested application of Article 127 of the Code of Commerce in determining the extent of the defendant’s liability.