Case Digest (G.R. No. 212025)
Facts:
Excellent Quality Apparel, Inc. v. Visayan Surety & Insurance Corporation, and Far Eastern Surety & Insurance Co., Inc., G.R. No. 212025, July 01, 2015, Supreme Court Second Division, Mendoza, J., writing for the Court.
The petition arose from a construction contract executed on March 26, 1996 between petitioner Excellent Quality Apparel, Inc. (petitioner) and Multi‑Rich Builders, and the subsequent incorporation of Win Multi‑Rich Builders, Inc. Petitioner completed the project on November 27, 1996. On January 26, 2004, Win Multi‑Rich filed a collection complaint against petitioner and its officer before the Regional Trial Court (RTC) of Manila (Civil Case No. 04‑108940) and sought a writ of preliminary attachment; the RTC issued the writ on February 2, 2004 after Win Multi‑Rich posted an attachment bond with respondent Visayan Surety & Insurance Corporation.
To prevent enforcement of the attachment, petitioner deposited Equitable PCI Bank Check No. 160149 dated February 16, 2004 for P8,634,448.20 to the Clerk of Court. Petitioner filed an omnibus motion (Feb. 19, 2004) to discharge the attachment and invoked an arbitration clause, but the RTC denied the motion (Apr. 12, 2004). Petitioner answered with a compulsory counterclaim (Apr. 26, 2004) seeking the return of the deposit and damages for wrongful attachment. The RTC ordered the deposit to be placed with the Clerk (Apr. 29, 2004), but subsequently granted Win Multi‑Rich’s motion (May 3, 2004) to release the deposit; Win Multi‑Rich posted Surety Bond No. 10198 issued by respondent Far Eastern Surety & Insurance Co., Inc. (FESICO) (May 7, 2004) and received the funds.
Petitioner filed a Rule 65 certiorari petition with the Court of Appeals (CA) (June 18, 2004). The CA (Mar. 14, 2006) annulled the RTC’s April 12 and April 29, 2004 orders but nonetheless held the RTC had jurisdiction. Petitioner then filed a Rule 45 petition before the Court in G.R. No. 175048; on February 10, 2009 the Court granted relief: it modified the CA decision, dismissed Civil Case No. 04‑108940, and ordered Win Multi‑Rich to return P8,634,448.20 with 12% legal interest. The decision became final and executory on June 2, 2009.
Petitioner moved for execution (June 26, 2009) to recover the deposit and, if Win Multi‑Rich would not comply, to hold Visayan Surety and FESICO liable under their bonds. The RTC issued a writ of execution (Oct. 19, 2009), but on January 15, 2010 the RTC granted the sureties’ motions for reconsideration and lifted the execution order as to the sureties, reasoning petitioner had failed to file an application for damages against the sureties before finality of judgment and thus the sureties were denied due process. Petitioner’s motion for reconsideration was denied (May 19, 2010).
Petitioner appealed to the CA. The CA, in its October 21, 2013 decision (CA‑G.R. CV No. 95421), affirmed the RTC insofar as it absolved the sureties, holding petitioner failed to comply with Section 20, Rule 57 (demand for damage...(Pro-only)
Issues:
- Did the Court of Appeals correctly affirm the RTC’s relief of the sureties on the ground that petitioner violated the due‑process and timing requirements of Section 20, Rule 57 (i.e., must an application for damages against an attachment bond be filed with notice to the surety before finality of judgment)?
- May execution be ordered against a surety that posted a bond substituting a defendant’s cash deposit (i.e., is FESICO liable under the counter‑bond and may execution proceed...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)