Case Digest (G.R. No. L-20063)
Facts:
The case involves the Philippine Resources Development Corporation (petitioner) against the Republic of the Philippines, Macario Apostol, and Empire Insurance Company (respondents). The events leading to the case began in 1951 when Macario Apostol entered into a contract with the Bureau of Prisons to purchase almaciga and 3,000,000 board feet of lauan logs at a price of P88.00 per thousand board feet. To secure his obligation, Apostol posted a performance bond of P10,000.00 with Empire Insurance Company as surety. The Bureau of Prisons delivered the logs and almaciga to Apostol; however, he failed to pay the full amount due, resulting in an outstanding balance of P34,015.06.
To settle this debt, Apostol delivered various materials, including 892 pieces of GI sheets, 399 GI pipes, and 2,793 pieces of black iron sheets, valued at a total of P30,436.94. However, due to a lack of supporting documentation, the Bureau of Prisons did not credit this amount against Apostol's d...
Case Digest (G.R. No. L-20063)
Facts:
Background of the Case
The Bureau of Prisons initiated a project to utilize prison labor for exploiting forest resources, producing resin and logs, which were sold to private parties. In 1951, Macario Apostol entered into a contract with the Bureau of Prisons to purchase almaciga and 3,000,000 board feet of lauan logs at P88.00 per thousand board feet. Apostol posted a performance bond of P10,000.00, with Empire Insurance Company as surety.
Delivery and Non-Payment
The Bureau of Prisons delivered almaciga and lauan logs to Apostol, but he failed to pay in full. After accounting, the Bureau found that Apostol still owed P34,015.06. To settle his debt, Apostol delivered 892 pieces of GI sheets, 399 GI pipes, and 2,793 pieces of black iron sheets, valued at P30,436.94. However, due to lack of supporting documents, the Bureau did not credit these properties against Apostol's debt.
Legal Proceedings
On May 6, 1955, the Republic of the Philippines filed a complaint against Apostol and Empire Insurance Company to collect the unpaid amount. Apostol claimed partial payment through the delivery of the aforementioned properties and admitted an unpaid balance of P758.12. Empire Insurance Company filed a cross-claim and third-party complaint against Apostol and his co-maker, Arsenio Afan.
Intervention by Philippine Resources Development Corporation (PRDC)
PRDC, of which Apostol was president, filed a motion to intervene, claiming ownership of the properties delivered by Apostol to the Bureau of Prisons. The trial court denied the motion, but the Court of Appeals reversed this decision, allowing PRDC to intervene. The Supreme Court affirmed this ruling.
Trial Court Decision
The trial court ruled in favor of the Republic, ordering Apostol to pay P34,095.06 with legal interest. It also ordered the Republic to return the properties to PRDC or pay their value. Empire Insurance Company was absolved of liability.
Appeal to the Court of Appeals
The Court of Appeals affirmed the trial court's decision regarding Apostol's liability but reversed the dismissal of PRDC's complaint in intervention. It ordered Empire Insurance Company to pay jointly and severally with Apostol, up to P10,000.00, for any unpaid balance after crediting the value of the delivered properties.
Issue:
- (Unlock)
Ruling:
- (Unlock)
Ratio:
- State Immunity: The Republic of the Philippines cannot be sued without its consent. However, PRDC's complaint in intervention is directed against Apostol, not the Republic, and thus, the defense of state immunity does not apply to him.
- Ownership of Properties: The trial court found that the properties delivered by Apostol belonged to PRDC, and there was no evidence that PRDC transferred ownership to Apostol. Apostol, as PRDC's president, must account for and return the properties or their value.
- Liability of Empire Insurance Company: As Apostol's surety, Empire Insurance Company is liable for his unpaid debt, but its liability is limited to the amount of the performance bond (P10,000.00).
- Intervention: PRDC's intervention is valid as it asserts ownership over the properties delivered by Apostol, and the Republic did not assert any adverse claim over them.