Case Digest (G.R. No. 171750)
Facts:
United Pulp and Paper Co., Inc. v. Acropolis Central Guaranty Corporation, G.R. No. 171750, January 25, 2012, Supreme Court Third Division, Mendoza, J., writing for the Court.
On May 14, 2002, petitioner United Pulp and Paper Co., Inc. (UPPC) sued Unibox Packaging Corporation (Unibox) and Vicente Ortega in the Regional Trial Court (RTC) of Makati, Branch 148, for collection of P42,844,353.14 and sought a writ of preliminary attachment. The RTC issued the writ on August 29, 2002 after UPPC posted a bond. Several Unibox/Ortega properties were attached.
On October 10, 2002 Unibox and Ortega moved for discharge of the attachment and offered to file a counter-bond; the RTC granted the motion on October 25, 2002 conditioned on filing a counter-bond. On November 21, 2002 respondent Acropolis Central Guaranty Corporation (Acropolis) issued a Defendants Bond for Dissolution of Attachment in the amount of P42,844,353.14 in favor of UPPC and the attachment was lifted.
UPPC moved on November 27, 2002 to discharge the counter-bond, alleging Acropolis faced license/capitalization problems; the RTC denied that motion on December 10, 2002 and maintained the counter-bond. The parties later executed a compromise agreement on September 29, 2003, which the RTC approved by judgment dated October 2, 2003.
After Unibox and Ortega defaulted on post-compromise payments, UPPC sought execution; the sheriff reported no assets available and on that basis UPPC filed a Motion to Order Surety to Pay Amount of Counter-Bond. On November 30, 2004 the RTC ordered Acropolis to comply with its counter-bond and pay UPPC P27,048,568.78 with 12% interest from default. Acropolis filed a motion for reconsideration on December 13, 2004, which was received late and denied by the RTC on February 22, 2005.
Acropolis petitioned the Court of Appeals (CA) for certiorari in CA-G.R. SP No. 89135, seeking a TRO and injunction. On November 17, 2005 the CA (Vidallon‑Magtolis, J.) granted the petition, reversed the RTC’s February 22, 2005 order, and absolved Acropolis of liability on the counter-bond on grounds that UPPC failed to comply with requirements under Section 17, Rule 57 (demand, notice, and summary hearing) and that Acropolis was not a party to the compromise. UPPC’s motion for ...(Subscriber-Only)
Issues:
- Did UPPC fail to make the required demand and give the requisite notice and summary hearing to Acropolis such that recovery on the counter-bond under Section 17, Rule 57 of the Rules of Court was improper?
- Did the compromise agreement between UPPC, Unibox and Ortega operate as a novation that extinguished Acropolis’s obligation under t...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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