G.R. No. 210950 - Enriquez vs. The Mercantile Insurance Co., Inc.

In 2003, Milagros P. Enriquez filed a Complaint for Replevin (Civil Case No. 10846) against Wilfred Asuten in the RTC of Angeles City for her Toyota Hi-Ace van valued at ₱300,000.
Enriquez applied for and obtained from The Mercantile Insurance Co., Inc. Bond No. 138 in the amount of ₱600,000, valid from February 24, 2003 to February 24, 2004, and executed an indemnity agreement covering all payments and expenses the surety might incur.

On May 24, 2004, the RTC dismissed the replevin complaint without prejudice for Enriquez’s failure to present evidence and to comply with orders to produce the van and pay bond premiums; it declared Bond No. 138 forfeited and gave the surety ten days to produce the van or show cause.
At a July 12, 2004 hearing, Mercantile Insurance failed to produce the van; the bond had meanwhile expired by its term. The RTC ordered Mercantile Insurance to pay Asuten ₱600,000.

Mercantile Insurance demanded remittance from Enriquez; upon her inaction, it paid Asuten ₱600,000 on September 3, 2004, pursuant to the RTC’s order.
Mercantile Insurance filed a collection suit in the RTC of Manila against Enriquez for reimbursement under the indemnity agreement.

RTC (July 23, 2010) found that non-payment of premiums did not terminate the bond, upheld the indemnity agreement, and ordered Enriquez to pay ₱600,000 plus 12% interest from October 22, 2004, attorney’s fees of ₱50,000, and costs.
CA (August 13, 2013 Decision; January 14, 2014 Resolution) affirmed: under the Guidelines on Corporate Surety Bonds, the bond remains effective until final termination of the case; the indemnity agreement’s incontestability clause binds Enriquez to full payment.

Whether petitioner Milagros P. Enriquez is liable for the full amount (₱600,000) of the replevin bond paid by respondent Mercantile Insurance as surety.