Del Rosario v. Nava
REITERATIONFacts
The Antecedents: Domingo del Rosario filed an ejectment suit against Gonzalo P. Nava. Del Rosario secured a writ of attachment, with Alto Surety and Insurance Co., Inc. as surety on a P5,000 bond. The Municipal Court ruled against Nava. Nava appealed to the Court of First Instance (CFI), where he filed a counterclaim for damages amounting to P5,000, alleging the attachment was obtained maliciously, wrongfully, and without sufficient cause. The surety was not notified of this counterclaim. Procedural History: The CFI found the attachment improperly obtained and awarded P5,000 in damages and costs to Nava. The judgment became final. A writ of execution against Del Rosario was returned unsatisfied. Nava then filed a motion to require Alto Surety and Insurance Co., Inc. to show cause why it should not be held liable for the adjudged damages. The surety opposed, arguing the motion was filed out of time under Section 20, Rule 59 of the Rules of Court, which requires application and notice before trial or, at the latest, before entry of final judgment. The Petition: The CFI denied Nava's motion, ruling it was filed out of time. Nava appealed to the Supreme Court.
Issue(s)
Whether the application to require the surety to show cause why execution should not issue against its attachment bond, filed after the judgment against the principal had become final, was timely filed under Section 20, Rule 59 of the Rules of Court. Whether damages awarded against the principal in an attachment bond can be executed against the surety without prior notice to the surety before the final judgment.
Ruling
The Supreme Court affirmed the order of the Court of First Instance, holding that the application to require the surety to show cause was filed out of time. The Court ruled that under Section 20, Rule 59, the application for damages and notice to the surety must be made before the judgment against the principal becomes final and executory.
Ratio Decidendi
On the timeliness of the application and notice to the surety: The Court held that Section 20 of Rule 59 clearly mandates that the application for damages and the notice to the sureties must be filed in the trial court either "before the trial" or, at the latest, "before entry of the final judgment." This requirement is crucial because the damages awarded must be "included in the final judgment" as stipulated in the same section. The attachment bond represents a solidary obligation, meaning the prevailing party may enforce the award against either the principal or the surety. Therefore, a single judgment encompassing both principal and sureties is contemplated, avoiding multiplicity of suits. Allowing a separate application and hearing against the surety after the principal's judgment has become final would lead to such multiplicity, contrary to the rule's intent. The appellant's application, filed ten months after the award against the principal had become final, was thus correctly rejected by the lower court as being out of time. The Court reiterated the principle that the surety is bound by the judgment against the principal only if given due notice, and that if no notice is given, the surety must be given an opportunity to be heard, but this opportunity must be sought within the prescribed period for filing the claim for damages. On the execution of damages against the surety without prior notice: The Court clarified that while a prevailing party may apply for damages against the surety even after obtaining an award against the principal, this application and notice must still be made before the judgment against the principal becomes final and executory. This ensures that all awards for damages can be consolidated into a single, final judgment. The ruling in Visayan Surety and Insurance Corp. vs. Pascual was interpreted to mean that while a separate hearing against the surety is permissible if no prior notice was given, this process must still be initiated within the timeframe set by Rule 59, which is before the final judgment. The purpose is to allow the surety to present defenses not previously set up by the principal, but this right is contingent upon timely application. The appellant's failure to file the application within the prescribed period meant that the surety was not afforded the opportunity to be heard within the procedural framework, and the court correctly denied the motion.
Main Doctrine
An application for damages against a surety on an attachment bond, and the required notice to the surety, must be filed in the trial court either before the trial or, at the latest, before the entry of the final judgment, so that such damages may be included in the final judgment against the principal obligor. A separate application filed after the judgment against the principal has become final and executory is considered filed out of time.