Case Digest (G.R. No. 103073)
Facts:
Republic of the Philippines, represented by the Bureau of Customs, G.R. No. 103073, March 13, 2001, Supreme Court Third Division, Vitug, J., writing for the Court. The petition arises from claims by the Bureau of Customs against sureties for duties and taxes on imported articles covered by four embroidery bonds.The underlying transaction involved Endelo (the principal/obligor) which imported raw materials under bonded entries subject to a re-export obligation within two years. Alleged pilferage at Endelo’s premises led to an investigation and the suspension of Endelo’s license to operate sometime in 1970. The Bureau of Customs later assessed duties and taxes arising from Endelo’s alleged failure to re-export and instituted actions against Endelo and its sureties, including R & B Surety and Insurance, Inc. (R & B) and Communications Insurance Company, Inc. (CICI).
The Regional Trial Court (RTC) rendered a decision dated February 13, 1989, holding R & B liable to pay the total assessed amount of P4,305,017.00 covering the four embroidery bonds. R & B appealed. The case progressed through the appellate process, and the Court (the Supreme Court) issued a decision dated September 14, 1999. R & B filed a motion for reconsideration of that decision, raising three principal contentions: (I) the suspension of Endelo’s license rendered performance impossible and discharged R & B; (II) R & B is not jointly liable with CICI and liability should be pro-rated; and (III) R & B’s liability is limited to the face value of its bonds under Section 176 of the Insurance Code and it should not bear legal interest beyond the face amounts.
The Solicitor General was required to comment on the motion for reconsideration. After considering the arguments and the record (including that Endelo alleged an illegal suspension but produced no supp...(Subscriber-Only)
Issues:
- Did the suspension of Endelo’s license to operate discharge R & B Surety and Insurance, Inc. from its obligation under the bonds as impossible performance or equivalent to revocation of the license?
- Is R & B solidarily liable with Communications Insurance Company, Inc. (CICI) such that its liability must be pro-rated with CICI?
- Is R & B’s liability limited to the face value of the bonds under Section 176 of the Insurance Code, and is i...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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