[ G.R. No. L-16113. October 31, 1963 ]

[ G.R. No. L-16113. October 31, 1963 ]

[ G.R. No. L-16113. October 31, 1963 ]

VICTOR VADIL, ETC., ET AL., PETITIONERS VS. HON. JOSE R. DE VENECIA, ET AL., RESPONDENTS.

D E C I S I O N

REGALA, J.:

This is a petition for certiorari to review the order dated

August 5, 1959 of the Court of First Instance of Nueva

Vizcaya, directing the execution of petitioners'' bond.

On April 13, 1953, Pablo Española Estate, Inc. filed

in the court of First Instance of Nueva Vizcaya an

action against Raymundo Guinsatao for the recovery of

the sum of P9,360. It applied for a writ of preliminary

attachment on the ground that Guinsatao had removed

or was about to remove his properties with intent to

defraud his creditors.

Guinsatao denied the allegations of the complaint and

expressed willingness to file a counterbound to discharge the writ of preliminary attachment applied for by Pablo

Española Estate Inc. Whereupon, the court ordered him "to file a counterbond within 5 days from the receipt of

this order, in the amount of P9,360.00 to secure the payment to the plaintiff of any judgment he may recover in

the present case.

Guinsatao filed a bond entitled "Defendant's Bond"

which reads:

"Whereas, in an action now pending in the Court of First Instance of the Province of Nueva Viscaya, First Judicial District, wherein PABLO ESPAÑOLA ESTATE INC., is plaintiff, and RAYMUNDO GUINSATAO defendant, the above-named plaintiff has applied for an order of a Writ of Preliminary Attachment against RAYMUNDO GUINSATAO.

"And whereas, the Law allows the plaintiff certain securities:

"Know all men by these presents: That RAYMUNDO GUINSATAO of Mabasa, Dupax, Nueva Vizcaya as principal and

ESTEBAN VADIL, EUGENIO VADIL, JUAN GALIBOSO,

JOAQUIN VADIL, VICTOR VADIL and VICENTE VADIL all

of Mabasa, Dupax, Nueva Vizcaya as sureties, are hereby held and

in the sum of NINE THOUSAND THREE HUNDRED SIXTY

(P9,360.00) PESOS, for which payment well and truly to be made

we bind ourselves, our heirs, and legal representatives, jointly

and severally, firmly by these presents.

"The condition of this obligation is as follows:

"To pay all the costs which may be awarded to the defendant,

and all damages that the defendant may suffer by reason of the

Writ of Preliminary Attachment should it be finally adjudged

that the same was done without legitimate cause.

"Then this obligation shall be null and void, otherwise of full

force and virtue.

(Sgd.) RAYMUNDO GUINSATAO

"(Sgd.) JOAQUIN VADIL (Sgd.) ESTEBAL VADIL

(Sgd.) VICTOR VADIL (Sgd.) EUCENIO VADIL

(Sgd). VICENTE VADIL (Sgd.) Juan Galiboso"

The case was then tried, after which the trial court

rendered judgment ordering Guinsatao to pay respondent

Pablo Española Estate Inc. the sum of P9,360 plus legal

interest. After the decision become final, execution followed but Guinsatao had no sufficient property. And so,

on motion of Pablo Española Estate Inc., the lower court

ordered the execution of the bond. Hence, this petition.

While this case was pending in this Court, petitioner

Joaquin Vadil moved for the dismissal of the case as to

him on the ground that he had not engaged the services

of Attorneys Primicias and Del Castillo. While joining

in the motion to dismiss the case as to Joaquin Vadil,

Atty. Teodoro Regino of the law firm of Primicias and

Del Castillo denied Joaquin's allegation and asked that

Joaquin Vadil be cited for contempt for allegedly telling

falsehood.

As prayed for by Joaquin Vadil, this case is dismissed

as to him. There is no ground in the motion to cite

Joaquin Vadil for contempt.

We now come to the merits of this case. Petitioners

contend that they are not liable to the plaintiff in the

trial court because their undertaking under the bond was

to pay "all the costs which may be awarded to the defendant, and all damages that the defendant may suffer by

reason of the Writ of Preliminary Attachment should it

be finally adjudicated that the same was done without

legitimate cause" rather than to pay the judgment that

plaintiff might recover.

This is a case where, instead of a bond conditioned

on the payment to the plaintiff of any judgment which he

may recover in an action, as the trial court directed, the

bond filed provides that the sureties will pay—

***all the costs which may be awarded to the defendant, and

all damages that the defendant may suffer by reason of the Writ

of Preliminary Attachment should it be finally adjudged that the

same was done without legitimate cause,"

thus raising doubt as to whether the petitioners, as sureties, understood the import of the order of the court.

This doubt, as to whether petitioners understood the

court order, is further shown by the fact that under Section 2 of Rule 59 of the Rules of Court, the issuance of

an order of attachment may be prevented if the defendant

''makes deposit or gives bond * * * in an amount sufficient

to satisfy such demand, besides costs, or in an amount

equal to the value of the property which is to be attached." Now, if, as alleged in the motion of Pablo Española Inc.,

only P150 was realized from the sale of Guinsatao's property, it is not likely that petitioners would agree to

stand surety for P9,360 for the defendant, whose properties (worth only P150) stood in imminent danger of

attachment.

We are inclined to resolve the doubt in favor of petitioners. As this Court held in People vs. De la Cruz,

93 Phil., 487; 49 Off. Gaz., No. 8, 3389, sureties are favorites of the law. Assuming an obligation without any

thought of material gain, except in some instances, all

presumption are indulged in their favor. And in Pacific

Tobacco Co. vs. Lorenzana, et al., 102 Phil. 234, this Court

said in amplification:

"***The rationale of this doctrine is reasonable; an accommodation surety acts without motive of pecuniary gain and, hence,

should be protected against unjust pecuniary impoverishment by

imposing on the principal duties akin to those of a fiduciary. This

cannot be said of compensated corporate surety which is a business

association organized for the purpose of assuming classified risks

in large numbers, for profit and on an impersonal basis, through

the medium of standardized written contractual forms drawn by

its own representatives with the primary aim of protecting its

interest. (See Stearn's The Law Suretyship, 4th ed. 402-403).

We hold there fore that petitioners are not liable to

Pablo Española Estate, Inc. on their bond.

Another reason in support of the conclusion reached

herein is that actually there was no writ of attachment

issued by the Court. It is to be noted that the obligation

to be assumed by the bondsmen is premised upon the issuance of such a writ.

We feel it unnecessary to pass upon the other assignments of error.

WHEREFORE, the petition is granted; the writ of preliminary injunction is made permanent and the order

dated August 5, 1939 and the writ of execution dated

September 4, 1959 are hereby set aside, without pronouncement as to costs.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador,

Concepcion and Paredes, JJ., concur.

I concur, no writ of attachment having issued and the sureties were not heard before final judgment.

I concur in the concurring opinion of Justice Reyes. Dizon and Makalintal, JJ., concur in the result.