Case Digest (G.R. No. L-30204)
Facts:
Pacific Merchandising Corporation v. Consolacion Insurance & Surety Co., Inc., G.R. No. L-30204, October 29, 1976, Supreme Court Second Division, Antonio, J., writing for the Court.
Plaintiff-appellee Pacific Merchandising Corporation sued Consolacion Insurance & Surety Co., Inc. (defendant-appellee) in City Court of Manila in Civil Case No. 117811 to collect P2,562.88 for materials supplied in connection with the Paris Theatre. Consolacion impleaded Gregorio V. Pajarillo as third-party defendant-appellant. The City Court rendered judgment on April 6, 1964 ordering the defendant to pay P2,562.88, interest and attorney’s fees, and condemning the third-party defendant to indemnify the third-party plaintiff for whatever sums it paid the plaintiff on account of that judgment.
Pajarillo appealed to the Court of First Instance of Manila; by stipulation of facts (filed July 21, 1964) the parties recited that: a writ of execution issued October 19, 1962 (CFI Civil Case No. 49691) led to levy on theatre equipment advertised for sale March 2, 1963; on March 2, 1963 Atty. Gregorio V. Pajarillo had been appointed Receiver of Paris Theatre in Civil Case No. 50201; Pajarillo executed on March 11, 1963 an undertaking to pay the judgment creditor and on about March 3–14, 1963 caused a P5,000 surety bond to be posted in favor of Pacific Merchandising with Pajarillo as principal and Consolacion as surety; Pajarillo also executed an indemnity agreement in favor of Consolacion; plaintiff had received only P2,000 of the amount due, leaving P2,562.88 unpaid plus contractual interest and attorney’s fees; a July 1, 1963 decision in CFI No. 50201 (later appealed to the Court of Appeals) effectively ceased Pajarillo’s payments as Receiver; plaintiff made demands on both Pajarillo and Consolacion in October and December 1963 which went unpaid.
Relying on the stipulation, the Court of First Instance on August 8, 1964 (amended August 25, 1964) affirmed the City Court judgment and held, among other points, that (1) the unpaid claim represented costs of materials that benefited Pajarillo as owner by virtue of the judgment in CFI No. 50201 and thus he should not enrich himself without paying, (2) under the former Rules of Court (Section 7, Rule 61) a receiver has power to pay outstanding debts and Section 8’s settlement procedure had not been followed, and (3) by entering into the undertaking and the bond Pajarillo “stepped into the shoes” of the debtor and the obligations were enforceable against him. From that judgment Paja...(Pro-only)
Issues:
- Is third-party defendant Gregorio V. Pajarillo personally liable to Pacific Merchandising Corporation for the unpaid amount under the facts presented?
- If Pajarillo is liable, is Consolacion Insurance & Surety Co., Inc. liable to plaintiff under the surety bond (and subject to re...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)