Case Digest (G.R. No. L-38971)
Facts:
- Leelin Marketing Corporation (LEELIN) filed a lawsuit for a sum of money against Mario Santos and Aurelio Cartao, operating as C & S Agro Development Company.
- The case was initially heard at the Court of First Instance of Camarines Sur.
- LEELIN obtained a writ of preliminary attachment by posting a bond of P12,962.17, resulting in the attachment of merchandise in the defendants' stores and two vehicles.
- The attachment was dissolved when the defendants provided a counterbond of P20,000.00 from Belfast Surety and Insurance Co., Inc. (the Surety), which was approved by the Trial Court.
- The counterbond was conditioned to cover all costs and damages if the attachment was deemed wrongful and without sufficient cause.
- The defendants failed to appear for trial, and a court-appointed commissioner received the evidence.
- The court ordered the defendants to pay LEELIN P14,020.26, P3,505.07 as attorney's fees, and P1,312.25 for expenses.
- The decision became final and executory, but the writ of execution was returned unsatisfied.
- LEELIN moved to charge the Surety on its counterbond, but the Surety denied liability.
- The Trial Court ruled that the Surety could not be held liable under the bond, prompting LEELIN to appeal to the Supreme Court.
Issue:
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Ruling:
- The Supreme Court ruled in favor of Leelin Marketing Corp., reversing the Trial Court's decision.
- The Court ordered the execution against Belfast Surety and In...(Unlock)
Ratio:
- The Supreme Court differentiated between a bond for the issuance of writs of attachment (Section 4 of Rule 57) and a counterbond for the discharge of writs of attachment (Section 12 of Rule 57).
- The bond by the attaching creditor covers costs and damages if the attachment is wrongful, while the counterbond secures payment of any judgment the attaching creditor may recover.
- Under Section 17 of Rule 57, three conditions must be met for a judgment creditor to recover from the Surety: (1) execution against the principal debtor returned unsatisfied, (2) demand for satisfaction from the surety, and (3) notice and summary hearing for the surety's liability.
- LEELIN substantially complied with these conditions.
- Alt...continue reading
Case Digest (G.R. No. L-38971)
Facts:
In the case of Leelin Marketing Corp. v. C & S Agro Development Co., the plaintiff-appellant, Leelin Marketing Corporation (LEELIN), filed an action for a sum of money against defendants Mario Santos and Aurelio Cartao, who were conducting business under the name and style of C & S Agro Development Company. The case was initially heard at the Court of First Instance of Camarines Sur. LEELIN secured a writ of preliminary attachment by filing a bond amounting to P12,962.17, which led to the attachment of merchandise in the defendants' stores located in Tabaco and Legazpi, Albay, as well as one panel car and one sedan car. However, the attachment was dissolved when the defendants presented a counterbond executed by Belfast Surety and Insurance Co., Inc. (the Surety) in the amount of P20,000.00, which was approved by the Trial Court. The counterbond was conditioned to pay all costs and damages if the attachment was adjudged wrongful and without sufficient cause.
The defendants failed to appear for trial, and a commissioner appointed by the court received the evidence. The court rendered a decision ordering the defendants to pay LEELIN the amounts of P14,020.26, P3,505.07 as attorney's fees, and P1,312.25 for expenses incurred in connection with the case and the writ of preliminary attachment. The decision became final and executory, but the writ of execution was returned unsatisfied. LEELIN then moved to charge the Surety on its counterbond. The Surety opposed, denying liability for the monetary judgment. Th...