SECOND
DIVISION
LUZON
SURETY CO.,
INC.,
Petitioner,
G.
R.
No. L-16088
September
30, 1960
-versus-
FIDELA
MORIN DE
MARBELLA,
HON. JOSE
R.
QUERUBIN
AND
MACARIO
OFILADA,
Respondents.
D
E C I S I
O N
REYES,
J.B.L., J :
In Civil Case No. 3186
of the Court of First Instance of Negros Occidental, Fidela Morin Vda.
de Marbella versus Victorino Kilayko, et al., judgment was rendered
finding
plaintiff to be rightful heir to the properties left by the deceased
Matias
Morin, and ordering defendants to reconvey and deliver to her all
properties
belonging to the estate that they might have received, with their
fruits,
and in case of defendants' failure to comply, to pay plaintiff their
value
at the time they were disposed of. The estate of the deceased was,
likewise,
ordered placed under receivership.
From the above
Decision,
defendants Kilaykos, et al., appealed to this Court [G.R. No. L-11141].
During the pendency of the appeal, and upon petition of plaintiff Morin
Vda. de Marbella, Leopoldo Anoche was, on June 6, 1956, appointed by
the
trial Court receiver of the properties under litigation.
On July 2, 1956,
receiver
Anoche filed a P5,000 bond subscribed by himself as principal and the
Luzon
Surety Co. as surety. Whereupon, Anoche took his oath and entered into
his duties as receiver.
On June 27, 1958, this
Court rendered judgment in G.R. L-11141 Vda. de Marbella vs. Kilayko,
et
al, [104 Phil. 41; 56 Off. Gaz. 1672] affirming with some modifications
the decision appealed from. This decision became final and executory on
August 6, 1958, and the case was remanded to the Court a quo
for
execution.
On March 16, 1959,
receiver Anoche filed with the Court below his final statement of
accounts.
On April 21, 1959, plaintiff Morin Vda. de Marbella filed a motion
praying
among other things, for the confiscation of the bond of the receiver,
because
the latter had admitted that part of the money and some titles turned
over
to him were missing or unaccounted for. On April 28, 1959, the lower
Court
ordered the receiver to answer plaintiff's charges, and to deposit with
the clerk of court all the cash in his possession. Complying with this
Order, the receiver filed his answer stating, among other things, that
he could no longer return any cash to the Court because he had no more
money in his possession. Whereupon, on May 20, 1959, the court issued
an
order endorsing the case to the Provincial Fiscal for investigation,
with
a view to the filing of a criminal complaint against the receiver for
misappropriation;
and on August 22, 1959, the Court issued another order, stating that
"the
defendants are not responsible for the restitution of the amount"
delivered
to the receiver, "it appearing that the receiver was appointed at the
instance
of the plaintiff," and ordering that a writ of execution be issued "for
the amount posted by the receiver". Pursuant to this order, the
provincial
sheriff served on September 28, 1959, upon the Luzon Surety Company,
Inc.,
the corresponding writ of execution against the receiver's bond, and to
enforce said writ, garnished the account of the surety company with the
Philippine Trust Co.
Claiming that the
proceedings
taken against its bond, having been made without prior notice to it and
in violation of the procedure outlined in Section 20, Rule 59, in
conjunction
with Section 9, Rule 61, of the Rules of Court, are null and void, the
Luzon Surety Co., Inc., filed on October 16, 1959 the present Petition
for Certiorari with this Court. Upon petitioner's motion and the filing
of a bond in the amount of P1,000, We issued a writ of preliminary
injunction
to enjoin the execution proceedings against it in the Court below.
We find no merit in
the surety's contention that the proceedings leading to the issuance of
the writ of execution against the receiver's bond are null and void in
so far as the same is sought to be enforced against it, because of
non-compliance
with the procedure laid down in Section 20, Rule 59, in conjunction
with
Section 9, Rule 61, of the Rules of Court. As correctly pointed out by
respondent, this procedure is to be followed only in the execution of a
bond filed by either party in the case where the receiver is appointed,
but not in the execution of the receiver's bond, which is filed by the
receiver himself and his surety. This is clear from the provisions of
Section
9, Rule 61, to wit:
"Sec. 9. Judgment
to include recovery against sureties. - The amount, if any, to be
awarded
to either party upon any bond filed by the other in accordance with the
provisions of this rule, shall be claimed, ascertained, and granted
under
the same procedure as prescribed in Section 20 of Rule 59." [Italics
supplied].
In other words, the procedure
outlined in Rule 59, Section 20, is required to be followed only in
proceedings
against the bond filed by the applicant for receivership, which answers
for the damages that the adverse party may sustain by reason of the
appointment
of a receiver in case the applicant shall have procured the appointment
without sufficient cause [Sec. 3, Rule 61], or against the counterbond
posted by the party opposing the appointment of the receiver,
conditioned
to pay all the damages the applicant may suffer by reason of the acts,
omissions, or other matters in the application for receivership [Sec.
4.
supra]. Bonds filed by the parties to cases are different
and
should
be distinguished from the bond filed by the receiver under Section 5.
of
Rule 61, "executed to such person and in such sum as the court or judge
may direct, to the effect that he will faithfully discharge the duties
of receiver in the action and obey the orders of the court; therein."
Damages
for improperly procuring a receivership, or on a counterbond, cannot be
recovered upon any bond filed by either party unless they are claimed
and
ascertained in the same action, with due notice to the surety, pursuant
to Section 20, Rule 59 [Sec. 9, Rule 61; Yap Unki vs. Chua Jamco, 14
Phil.
602; Monteverde vs. Nakata, 30 Phil., 608; Nava vs. Hofilena, 53 Phil.
738; Visayan Surety & Ins. Cor. vs. Pascual, 85 Phil., 779; 47 Off.
Gaz. 5075; Liberty Construction Supply Co. vs. Pecson, 89 Phil. 50].
Where,
however, the damages sought to be recovered arose from the misconduct
or
negligence of the receiver himself in relation to the discharge of his
official duties, no one is responsible therefor but the receiver and
his
sureties [De la Riva vs. Molina, 32 Phil. 277, 281-282], and for these
damages, the bond given by them is valid and enforceable [De la Rosa
vs.
De Borja, 53 Phil. 990]. The Court below having found in this case that
the receiver had failed to return to the court or account for certain
properties
and cash in his official custody, the petitioner, as surety on the
receiver's
bond, is of course liable on said bond.
That petitioner being
liable on its bond does not, however, mean that execution may issue
against
it without prior notice of the action or proceeding to hold it liable
on
its bond, and without giving it its day in court. The solidary nature
of
its liability as surety on the receiver's bond does not imply that it
can
be condemned to pay without a hearing. Solidarity simply dispenses with
the necessity of levying first upon the property of the principal
(beneficio
de execusión). As held by this Court in the case of Agusan vs.
Velasquez,
88 Phil. 357:
"It seems elementary
that before being condemned to pay, it was the elementary right of the
surety to be heard and to be informed that the party seeking indemnity
would hold it liable and was going to prove the grounds and extent of
its
liability. This case is of his contract, has promised to abide by the
judgment
against the principal and renounced the right to be sued or cited.
That
the liability of the
surety and the principal under the term of the bond is joint and
several
has nothing with the case. The objection is purely procedural. The
materiality
of the question of joint and several obligation does not come into play
until both principal and surety have legally been adjudged liable by a
lawful judgment entered after due hearing." [Italics supplied].
Besides, a solidary
debtor may avail himself of all defenses which are derived from the
nature
of the obligation and of those which are personal to him, or pertain to
his own share; and even of those personal to the other co-debtors, as
regards
their shares in the debt [Art. 1222, Civil Code]. If a solidary debtor,
such as petitioner herein under its surety bond, is considered
concluded
by the judgment against its co-debtor, without even notifying it of the
action or proceeding against the latter, he would be deprived of the
right
and opportunity to set up any defenses which it may have against
liability
on their solidary undertaking.
Respondents argue,
however, that certiorari does not lie where the petitioner did not
apply
for the relief sought in the court of origin to give it an opportunity
to correct its supposed error, and as petitioner did not file any
motion
for reconsideration of the order of execution against its bond in the
court
below, but immediate]y applied for certiorari with this court, the writ
should be denied. It is true that a motion for reconsideration in the
court
below has often been considered a condition precedent for the granting
of the Writ of Certiorari. This rule is not without exception, however.
Thus, it has been held that the rule does not apply where the order or
judgment subject of review is a patent nullity [Director of Lands vs.
Santamaria,
44 Phil. 594]. We think the deprivation of petitioner's fundamental
right
to due process, which taints the proceedings against it in the court
below
not only with irregularity but with nullity, and the fact that
execution
had already been issued against it and its account with the Philippine
Trust Co. already garnished, so that it was a matter of extreme urgency
to petitioner that relief against the execution order be immediately
obtained,
are sufficient reasons to bring this case outside the purview of the
above-mentioned
rule.
Wherefore, the Order
of Execution against petitioner is hereby set aside for being null and
void, and the records are remanded to the Court of origin for a hearing
on the question of petitioner's liability under the receiver's bond.
Costs
against respondent Fidela Morin de Marbella.
Bengzon, Bautista
Angelo,
Labrador, Barrera, Gutierrez David, Paredes, and Dizon, JJ.,
concur.
Parás, C.J.,
concurs in the result. |