Case Summary (G.R. No. 72005)
Factual Background
Sycwin Coating & Wires, Inc. filed a complaint for collection against Varian Industrial Corporation in the Regional Trial Court. During the suit an order of attachment was issued against Varian. Varian obtained release of the attached properties by filing a counterbond in the sum of P1,400,000, executed on June 28, 1984, with Philippine British Assurance Co., Inc. as surety. On December 28, 1984 the trial court granted plaintiff’s motion for summary judgment and rendered judgment for P1,401,468.00 with 12% interest from default, five percent liquidated damages, P30,000 exemplary damages, 15% attorney’s fees of the principal obligation, and costs; the counterclaim of Varian was dismissed. Varian appealed to the Intermediate Appellate Court.
Procedural History
Following the trial court decision, Sycwin petitioned the Intermediate Appellate Court for execution pending appeal against the properties of Varian. The Intermediate Appellate Court, after requiring but not receiving a comment from Varian, ordered execution pending appeal on July 5, 1985. The writ of execution was returned unsatisfied because Varian failed to deliver the previously attached personal properties upon demand. On August 13, 1985 Sycwin filed a petition with the Intermediate Appellate Court seeking to hold the surety on the counterbond liable for the value of the bond. PHILIPPINE BRITISH ASSURANCE CO., INC. filed a comment in compliance with the court’s resolution of August 23, 1985. The Intermediate Appellate Court granted the petition on September 12, 1985. Petitioner then sought relief in the Supreme Court by petition for certiorari and secured a temporary restraining order dated September 25, 1985; the Supreme Court later resolved the matter on May 29, 1987.
The Counterbond
The counterbond expressly recited that it was given pursuant to Section 5 of Rule 57 to lift the order of attachment and bound Varian as principal and PHILIPPINE BRITISH ASSURANCE CO., INC. as surety to pay P1,400,000.00 in favor of the plaintiff. The instrument provided that if plaintiff recovered judgment the defendant would re‑deliver the attached property to the court officer to be applied to the judgment, or, in default, that the defendant and surety would, on demand, pay the full value of the property released. The counterbond thus incorporated the second paragraph of Section 5, Rule 57, and contemplated application of the bond “to the payment of the judgment.”
Issue Presented
The principal issue presented was whether an order of execution pending appeal of a judgment may be enforced against a counterbond given to lift an attachment.
Parties' Contentions
Petitioner challenged the Intermediate Appellate Court’s resolution ordering execution on the counterbond and sought relief by certiorari in the Supreme Court. Private respondent Sycwin maintained that the absence of a prior motion for reconsideration did not bar certiorari because special circumstances existed; execution had been ordered and urgent relief was necessary. Sycwin further urged that the language of the counterbond and provisions of Rule 57 authorized enforcement of the bond when execution was returned unsatisfied, even when the judgment was pending appeal.
Ruling
The Supreme Court dismissed the petition for lack of merit, dissolved the temporary restraining order previously issued, and imposed costs against petitioner. Justices Yap (Chairman), Narvasa, Melencio‑Herrera, Cruz, and Sarmiento concurred; Justice Feliciano was on leave.
Legal Reasoning
The Court construed Sections 5, 12, and 17 of Rule 57 together and interpreted the phrase “any judgment” appearing therein to include a judgment pending appeal as well as a final and executory judgment. The Court noted that the counterbond was executed pursuant to Section 5 and expressly provided that it would be “applied for the payment of the judgment.” Because neither the rules nor the terms of the counterbond limited application to a final and executory judgment, the Court held that the bond could be charged when an execution, even an execution pending appeal, was returned unsatisfied. The Court invoked the canon Ubi lex non distinguit nec nos distinguere devemos to reject judicial distinctions where the law itself made none, and relied on precedent and principles of statutory construction to give general statutory language its natural and general significance. The Court further identified the procedural prerequisites established under Section 17 and developed in prior authority, notably Towers Assurance Corporation v. Ororama Supermart, 80 SCRA 262, 264 (1977): recovery against the
...continue reading
Case Syllabus (G.R. No. 72005)
Parties and Procedural Posture
- Philippine British Assurance Co., Inc. filed a Petition for Review on Certiorari assailing a Resolution of the Intermediate Appellate Court granting execution pending appeal and ordering enforcement against a counterbond.
- Sycwin Coating & Wires, Inc. was the judgment creditor who moved for execution pending appeal before the respondent Court.
- Varian Industrial Corporation was the judgment debtor whose properties were attached and who posted a counterbond through petitioner to lift the attachment.
- The Supreme Court initially issued a temporary restraining order on September 25, 1985 enjoining enforcement of the respondent Court’s resolution.
- The Supreme Court ultimately resolved the petition on the merits and dissolved the temporary restraining order while dismissing the petition for lack of merit.
Key Factual Allegations
- Sycwin Coating & Wires, Inc. sued Varian Industrial Corporation for collection before the Regional Trial Court, Branch LXXXV, Quezon City.
- An order of attachment was issued against Varian during the pendency of the suit and Varian lifted the attachment by filing a counterbond in the sum of P1,400,000 executed by Philippine British Assurance Co., Inc.
- The trial court granted plaintiff’s motion for summary judgment on December 28, 1984 and rendered judgment in favor of Sycwin for P1,401,468.00 plus interests, liquidated damages, exemplary damages, attorney’s fees, and costs.
- Varian Industrial Corporation appealed the trial court decision to the respondent Court.
- Sycwin filed a petition for execution pending appeal before the respondent Court, which ordered execution pending appeal on July 5, 1985.
- The writ of execution was returned unsatisfied after Varian failed to deliver the previously attached personal properties on demand.
- Sycwin filed a petition on August 13, 1985 for the surety to pay the value of the counterbond and the respondent Court granted the petition by resolution dated September 12, 1985.
Statutory Framework
- Section 5, Rule 57, Revised Rules of Court authorizes attachment and provides that an adverse party may give a counterbond to secure payment of any judgment that the attaching creditor may recover.
- Section 12, Rule 57, Revised Rules of Court provides for discharge of attachment upon filing of a cash deposit or a counterbond in an amount equal to the value of the property attached and directs delivery of the released property to the party giving the security.
- Section 17, Rule 57, Revised Rules of Court provides that if execution is returned unsatisfied in whole or in part, the surety on any counterbond shall become charged and bound to pay the amount due under the judgment after notice and summary hearing.
Issues Presented
- Whether an order of execution pending appeal may be enforced against a counterbond given to lift an attachment.
- Whether the phrase "any judgment" in Sections 5 and 17, Rule 57 includes a judgment that is pending appeal and not yet final and executory.
- Whether the procedural safeguards in Section 17, Rule 57 were observed before holding the surety liable.
Contentions of the Parties
- Petitioner contended that the respondent Court erred in enforcing the