Luzon Surety v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute involved a petition for mandamus filed by Sabungang Bagong Silang, Inc. against the Honorable Gustavo Victoriano, Judge of the Court of First Instance of Rizal, and others. The petitioner sought to compel the respondent judge to approve its record on appeal and to prevent the execution of a decision in Civil Case No. 4628. Luzon Surety Company, Inc. furnished a P1,000.00 bond for a preliminary injunction issued in favor of Sabungang Bagong Silang, Inc. 2. Procedural History: The Court of Appeals initially granted the petition for mandamus and issued a preliminary injunction. However, upon motion to dismiss by the respondents, the Court of Appeals reversed its decision, denying the petition and dissolving the injunction. This decision became final on August 25, 1958. Subsequently, on December 23, 1958, after the judgment had become final, the respondents filed a motion for leave to claim damages against Luzon Surety's bond. 3. The Petition: Luzon Surety Company, Inc. filed this petition for certiorari seeking to annul the resolutions of the Court of Appeals dated January 20, 1959, and February 20, 1959. These resolutions granted the respondents' motion for leave to prove damages against the surety bond, despite the fact that the claim was filed after the entry of final judgment. Petitioner argues that such a claim must be presented and ascertained within the principal action before the judgment becomes final and executory, citing relevant Rules of Court provisions and established jurisprudence.
Issue(s)
Whether the Court of Appeals gravely erred in granting the motion for leave to file a claim for damages against the preliminary injunction bond after the entry of final judgment. Whether a claim for damages on a preliminary injunction bond must be presented in the principal action and included in the final judgment.
Ruling
The resolutions of the respondent Court of Appeals dated January 20, 1959, and February 20, 1959, are annulled and set aside. Costs against the respondents, other than the Court of Appeals and the respondent judge.
Ratio Decidendi
On the issue of whether the Court of Appeals gravely erred in granting the motion for leave to file a claim for damages against the preliminary injunction bond after the entry of final judgment: The Court held that the respondent Court of Appeals gravely erred in granting the motion. Section 9 of Rule 60 and Section 20 of Rule 59 of the Rules of Court mandate that claims for damages on a preliminary injunction bond must be claimed, ascertained, and awarded under the same procedure as prescribed for illegal attachment. This procedure requires that such damages be included in the final judgment. The motion for leave to file the claim was filed almost four months after the decision had become final and executory, which is clearly beyond the prescribed period. The Court reiterated the well-settled rule that such claims must be presented in the principal action and included in the final judgment, and failure to do so results in the loss of the right to claim damages. On the issue of whether a claim for damages on a preliminary injunction bond must be presented in the principal action and included in the final judgment: The Court affirmed that this is the established rule. Citing previous jurisprudence, the Court emphasized that the remedy for claiming damages on a bond is exclusive and must be pursued within the pendency of the principal action. Specifically, Section 20 of Rule 59 states that the application for damages must be filed before the trial or, in the discretion of the court, before the entry of final judgment. The rule is clear that if the prevailing party fails to file their claim for damages within this period, the bond shall be withdrawn upon proper petition, and the right to claim damages is lost. The Court found that in this case, no claim for damages was presented by the respondents in the principal action, and the decision of the Court of Appeals did not include any award for damages against the bond. Therefore, the subsequent motion filed after the finality of the judgment was correctly deemed barred.
Main Doctrine
A claim for damages suffered by reason of the issuance of a preliminary injunction must be presented in the principal action and included in the final judgment. Failure to file such a claim before the judgment becomes final and executory results in the loss of the right to such damages.