Case Digest (G.R. No. L-9542)
Facts:
Plaridel Surety & Insurance Co., Inc. v. P. L. Galang Machinery Co., Inc., G.R. No. L-9542, January 11, 1957, the Supreme Court En Banc, Bengzon, C.J., writing for the Court.
The petitioner Plaridel Surety & Insurance Co., Inc. (the surety) and respondent P. L. Galang Machinery Co., Inc. entered into litigation arising from a commercial contract and a performance bond. On November 4, 1950, P. L. Galang Machinery Co., Inc. contracted with Constancio San Jose to buy 2,550,000 board feet of peeler and veneer logs to be delivered in three monthly installments beginning January 1951. Relying on that agreement, the corporation sold the logs to Marubeni Co., Ltd. of Tokyo. To secure San Jose’s performance, on November 9, 1950 the petitioner executed a performance bond in the amount of P30,600, binding itself jointly and severally with San Jose.
In performance of the contract, the corporation advanced San Jose P16,300 at 10% interest. San Jose failed to deliver the January and February 1951 quotas and sought an extension by letter; the request was verbally denied. He later informed the corporation he expected to deposit with the surety the bond amount. On February 8, 1951, P. L. Galang Machinery Co., Inc. notified the surety of San Jose’s default and demanded payment of the bond; payment was refused. The corporation filed a complaint on May 8, 1951 against San Jose and the surety.
The Manila Court of First Instance rendered judgment requiring the surety, jointly and severally with San Jose, to pay P30,000 with legal interest from the date of filing of the complaint, plus 15% of that amount as attorneys’ fees and costs. The Court of Appeals affi...(Subscriber-Only)
Issues:
- Must a surety who is sued on a performance bond and who has refused payment be held liable for legal interest from the date of filing of the complaint even though interest was not stipulated in the bond?
- May attorneys’ fees be recovered from a surety sued on a bond when attorney’s fees are not expressly stipulated in the bond, an...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)