Case Summary (G.R. No. L-21450)
Key Dates and Procedural Milestones
- July 19, 1948: Complaint filed in the Court of First Instance of Cebu for P1,908.00; a writ of attachment issued.
- July 31, 1948: Defendants filed a counter-bond executed by Manila Surety & Fidelity Co., Inc., dissolving attachment.
- After trial: judgment for plaintiffs became final and executory; execution returned unsatisfied.
- Plaintiffs moved for execution against the bond under Rule 59, Sec. 17; initial opposition by the Surety cited failure to prosecute and absence of demand. Plaintiffs later made the required demand.
- November–December 1957: Surety was given time to answer a second motion for execution but filed no answer; court issued writ of execution against the Surety.
- Surety moved to quash alleging lack of the summary hearing required by Rule 59, Sec. 17; motion denied; appealed to the Court of Appeals which affirmed on December 11, 1962.
- After adverse appellate decision, the Surety moved in the Court of Appeals to dismiss the action for want of subject-matter jurisdiction under the Judiciary Act of 1948; the Court of Appeals certified the question to the Supreme Court.
Applicable Law and Doctrines
- Judiciary Act of 1948 (R.A. No. 296): reallocated original jurisdiction of inferior courts and established the Supreme Court’s exclusive appellate jurisdiction when jurisdiction of an inferior court is in issue.
- Rules of Court, Rule 59: Section 12 (bond to secure payment upon discharge of attachment) and Section 17 (recovery upon bond when execution is returned unsatisfied; demand and summary hearing).
- Equitable doctrines: laches and estoppel (including estoppel in pais and estoppel by conduct).
- Controlling procedural principle: a surety who becomes a quasi-party by filing a counter-bond acquires related rights and obligations and may be bound by conduct in the proceedings.
Issues Presented to the Court
- Whether the Surety may belatedly raise lack of subject-matter jurisdiction of the trial court (the action being for P1,908.00, an amount within the original exclusive jurisdiction of inferior courts after the Judiciary Act of 1948 became effective).
- Whether the requirements of Section 17, Rule 59—specifically the summary hearing and notice/opportunity to be heard—were observed before issuance of execution against the bond.
Court’s Analysis on the Jurisdictional Challenge and Laches
- The Court accepted the factual premise that the action originally sought P1,908.00 — an amount within the original exclusive jurisdiction of inferior courts under the Judiciary Act of 1948 that became effective shortly before the complaint was filed. Jurisdiction of the subject matter is conferred by law and lack of it can be raised at any stage.
- Nevertheless, the Court held that the Surety was barred by laches from raising jurisdictional defect at that late stage. The Surety became a quasi‑party on July 31, 1948 by posting the counter-bond and thereby acquired rights and assumed obligations attendant to the pending case. Throughout the proceedings the Surety actively litigated and sought affirmative relief (e.g., opposing execution, seeking to be relieved of liability under the bond), and it never invoked lack of jurisdiction until after an adverse appellate decision.
- The Court emphasized public policy reasons behind the doctrine: a party cannot accept the benefits of having a matter adjudicated and, if adverse, later repudiate the forum’s jurisdiction to escape an unfavorable result. The Court relied on precedent condemning the practice of submitting a case for decision and attacking jurisdiction only after an adverse outcome. Under these circumstances and because the Surety had many opportunities to raise the issue but did not, the Surety’s belated challenge was inequitable and barred.
Court’s Analysis on Compliance with Rule 59, Section 17 (Summary Hearing)
- Section 17 contemplates recovery against a bond after execution is returned unsatisfied and mandates that such amount “may be recovered from such surety or sureties after notice and summary hearing in the same action.” The Court described the summary hearing as a flexible, expedited procedure not requiring the formalities of ordinary actions; its essentials are notice and an opportunity to be heard. The extent of the hearing is within the court’s discretion depending on circumstances.
- Here, the record showed that the Surety received notice of the plaintiffs’ motion for execution and the hearing date. At the hearing counsel for the Surety requested time to answer; the trial court granted a short period (four or five days) and expressly ordered that after that time the incident would be deemed submitted for resolution. Counsel did not file any answer or objection within the period. The Court of Appeals and the Supreme Court found that the Surety thereby had actual notice and an opportunity to be heard and voluntarily allowed the deadline to lapse, so it cannot complain that it was deprived of a summary hearing. The court treated counsel’s request for time and acceptance of the court’s order as a waiver of any right to protest.
Court’s Determination as to Necessity of a Separate Judgment Against the Surety
- The Court rejected the Surety’s contention that a separate action or separate judgment was required to hold a surety liable on the bond. A bond given under Section 12 of Rule 59 “stands in place of the property so released” and is meant to secure payment of any judgment the plaintiff may recover. Once the plaintiff’s judgment is final and execution is returned unsatisfied and the plaintiff has made demand upon the surety, liability attaches and execution may be issued to enforce the bond without commencing a separate action. The combination of demand, the unsatisfied execution,
Case Syllabus (G.R. No. L-21450)
Title, Citation, and Authorship
- Full citation: 131 Phil. 556; G.R. No. L-21450; Decision dated April 15, 1968.
- Case caption as recorded: Serafin Tijam, et al., Plaintiffs-Appellees, vs. Magdaleno Sibonghanoy alias Gavino Sibonghanoy, et al., Defendants, Manila Surety and Fidelity Co., Inc. (Cebu Branch) Bonding Company and Defendant-Appellant.
- Decision authored by Justice Dizon; concurred in by Justices Reyes (Acting C.J.), Makalintal, Bengzon, Zaldivar, Sanchez, Ruiz Castro, Angeles, and Fernando.
Underlying Complaint and Relief Sought
- Plaintiffs-appellees: spouses Serafin Tijam and Felicitas Tagalog.
- Defendants: spouses Magdaleno Sibonghanoy and Lucia Baguio.
- Primary claim: recovery of P1,908.00, with legal interest from the date of filing until satisfaction, plus costs.
- Date of original filing: July 19, 1948, in the Court of First Instance of Cebu.
- Immediate procedural relief sought in the complaint: issuance of a writ of attachment against defendants' properties.
Attachment, Counter-Bond, and the Surety’s Entry
- A writ of attachment was issued as prayed for in the complaint.
- Attachment was dissolved upon filing of a counter-bond by the defendants and Manila Surety and Fidelity Co., Inc. (the Surety) on July 31, 1948.
- By filing the counter-bond the Surety became a quasi-party as of July 31, 1948, acquiring rights and assuming obligations related to the pending case pursuant to Sections 12 and 17, Rule 57, Rules of Court (as referenced in the decision).
Pleadings, Trial and Judgment Against Defendants
- Defendants filed answer, admitting and denying material averments and asserting a counterclaim; plaintiffs answered the counterclaim.
- After trial on the issues joined, the trial court rendered judgment in favor of the plaintiffs.
- Judgment became final and executory; plaintiffs moved for issuance of a writ of execution against the defendants.
- The writ of execution returned unsatisfied.
Motions to Execute Against the Counter-Bond and the Surety’s Opposition
- Plaintiffs moved for issuance of a writ of execution against the Surety's counter-bond under Section 17 of Rule 59, Rules of Court.
- The Surety opposed the first motion on two grounds: (1) failure to prosecute, and (2) absence of a demand upon the Surety for payment under the judgment; and sought affirmative relief “to relieve the herein bonding company of its liability, if any, under the bond in question.”
- Trial court denied the first motion solely on the ground that no previous demand had been made on the Surety; after demand was made and not satisfied, plaintiffs filed a second motion for execution against the counter-bond.
Events at Hearing on Second Motion and Issuance of Writ
- Notice of the second motion and hearing was served; on the hearing date the Surety’s counsel requested five days to file an answer (the record also shows an order giving “until Wednesday, November 6, 1957” and stating “after which this incident shall be deemed submitted for resolution”).
- The Surety failed to file any answer within the period allowed.
- The trial court granted plaintiffs’ second motion for execution; corresponding writ of execution issued on December 12, 1957.
- The Surety subsequently moved to quash the writ on the ground that it was issued without the required “summary hearing” provided in Section 17 of Rule 59; the trial court denied the motion and denied a motion for reconsideration. The Surety appealed from those orders to the Court of Appeals.
Questions Presented on Appeal (Assignments of Error)
- The Surety’s brief framed its appeal by the following assignments of error: I. The court a quo erred in issuing its order dated November 2, 1957, by holding the incident as submitted for resolution without a summary hearing and without compliance with other mandatory requirements of Section 17, Rule 59. II. The court a quo erred in ordering issuance of execution against the bonding company-appellant. III. The court a quo erred in denying the motion to quash the writ of execution and in denying the motion for reconsideration and/or in not quashing or setting aside the writ of execution.
- Notably, none of these assignments of error raised the question of lack of jurisdiction, either directly or indirectly.
Court of Appeals’ Decision and Reasoning (December 11, 1962)
- The Court of Appeals affirmed the trial court's orders denying the motion to quash and denying the motion for reconsideration, and affirmed issuance of execution against the Surety.
- The Court of Appeals’ summary of facts:
- Attachment was discharged under Section 12, Rule 59, upon filing of a bond by the Manila Surety & Fidelity Co., Inc.
- Judgment for plaintiffs became executory; writ of execution against defendants returned unsatisfied.
- Plaintiffs moved for execution against the surety pursuant to Section 17, Rule 59; initial denial for lack of proof of demand; after demand and failure to pay, plaintiffs filed motion dated October 31, 1957; notice and hearing set for November 2, 1957.
- On November 2, 1957, the Surety’s counsel requested time to answer; court allowed until November 6, 1957 and ordered that thereafter the incident be deemed submitted for resolution.
- No answer was filed; on December 7, 1957 the court granted plaintiffs’ motion, and writ issued December 12, 1957.
- The Surety’s motion to quash (filed December 24, 1957) alleged lack of required summary hearing under Section 17; motion denied February 10, 1958; motion for reconsideration denied March 26, 1958.
- On the merits the Court of Appeals held:
- Summary hearing under Section 17 is not a formal, elaborate proceeding but must give notice and opportunity to be heard; extent left to court’s discretion.
- The Surety had notice and opportunity: it received the motion and notice, its counsel appeared when motion was called and requested time to file answer, was granted time, and the order stated the incident would be deemed submitted for resolution after the period.
- The Surety's failure to file an answer or object within the period precluded its complaint that it was deprived of its day in court.
- The Court rejected the Surety’s contention that a separate judgment against the surety is necessary to hold it liable on the bond; the Court found the bond stands “in place of the property so released” under Section 12, Rule 59, and when execution returns unsatisfied the liability of the bond attaches and may be enforced by writ of execution after demand and failure to pay.
Appeal to Supreme Court and Subsequent Motion to Dismiss on Jurisdictional Grounds
- The Surety appealed to the Supreme Court from the orders denying its motion to quash and motion for reconsideration; its record on appeal was printed and a brief filed raising the assignments of error noted above.
- The Court of Appeals affirmed on December 11, 1962.
- On January 8, 1963, five days after the Surety received notice of the Court of Appeals’ decision, it filed a motion for extension of time to file a motion for reconsideration; the Court of Appeals granted this extension on January 10, 1963.
- On January 12, 1963 (two days later?), the Surety filed a pleading entitled “MOTION TO DISMISS” in which it alleged, substantially:
- The action was filed on July 19, 1948 for recovery of P1,908.00 only.
- Republic Act No. 296 (Judiciary Act of 1948) had become effective about a month before (June 17, 1948), a