G.R. No. 153832 - Filipinas Pre-Fabricated Building Systems Inc. vs. Puente

On June 6, 1953, defendant Alfonso Lopez purchased a motor vehicle and secured a loan of P8,800 from Luneta Motor Company.
To guarantee the loan, Lopez executed a chattel mortgage on the vehicle, which was duly registered in the Office of the Register of Deeds of Manila.

Although Lopez made several payments, he ultimately defaulted on an outstanding balance of P4,630.32.
Following repeated demands for payment that were disregarded, Luneta Motor Company initiated foreclosure proceedings on the chattel mortgage.

On January 2, 1954, before the public auction of the vehicle could take place, Lopez, together with his co-defendant Faustino Dy (to whom the vehicle was sold subject to the mortgage), settled with the appellant.
The settlement involved an agreement to pay the remaining unpaid balance of the promissory note jointly and severally.
As a result of the settlement, the sale was withdrawn, and the vehicle was released to Faustino Dy, albeit still encumbered by the chattel mortgage.
Dy subsequently made a partial payment of P1,000, leaving a remaining balance of P3,827.17, which included interest.

Upon the filing of a replevin bond by the appellee, the court issued a writ for the seizure of the vehicle.
The writ was later recalled when Dy submitted a counter-bond of P12,000, with himself as principal and Alto Surety & Insurance Co., Inc. acting as guarantor. This bond bound the surety to be jointly and severally liable for the delivery of the vehicle or payment of the recovered sum along with the costs arising from the action.

On August 10, 1956, the lower court rendered judgment ordering defendants Lopez and Dy to pay jointly and severally the sum of P3,825.17 to Luneta Motor Company.
The judgment imposed an interest rate of 12% per annum from July 9, 1954, a 20% charge for attorney’s fees, and additional costs.
The court foreclosed the chattel mortgage and ordered Faustino Dy to deliver the truck to the Sheriff of Manila for public auction if the defendants failed to satisfy the judgment.

After the judgment became final and executory, on October 4, 1956, the lower court issued a writ of execution against defendants Lopez and Dy.
The writ was later returned unsatisfied by the Sheriff of Manila.
On June 28, 1957, Luneta Motor Company filed a motion seeking the issuance of an alias writ of execution against the appellant, Alto Surety & Insurance Co., Inc., for the amount awarded in the judgment.
The motion was opposed on grounds of non-compliance with section 10 of Rule 62 in conjunction with section 20 of Rule 59 of the Rules of Court.
Despite the opposition, the lower court ordered the issuance of the alias writ on February 11, 1957, and denied a motion for reconsideration on March 8, 1957.

Whether it was proper for the lower court to issue an alias writ of execution against the appellant surety company after the judgment had become final and executory.

Whether the issuance of the alias writ and the subsequent application for damages against the surety complied with section 10 of Rule 62 and section 20 of Rule 59 of the Rules of Court.
Whether the required pre-judgment claim/application for damages against the surety was properly made before the final judgment.

Whether the established judicial precedents, which mandate that claims against sureties must be filed before the judgment becomes final, were correctly applied in the present case.