Manila Underwriters Insurance v. Tan
REITERATIONFacts
The Antecedents: Petitioner, Manila Underwriters Insurance Co., Inc. (Manila Underwriters), executed a bond in the amount of P8,000.00 for a writ of preliminary attachment issued in Civil Case No. 12796, entitled Gelacio E. Tumanibing vs. Jose de Borja. The bond was conditioned for the payment of damages the defendant, Jose de Borja, might suffer if the plaintiff was not entitled to the attachment. Procedural History: The trial court dismissed the plaintiff's complaint, dissolved the writ of attachment but maintained the bond to answer for damages. The court ordered the plaintiff to pay the defendant P38,938.39 for the first counterclaim, P5,500.00 for the second, P5,000.00 for the third, and P20,000.00 for the fourth, totaling P69,438.39, with legal interest. Manila Underwriters was not notified of the counterclaim or the trial. After the Court of Appeals affirmed the decision, respondent Jose de Borja moved for a writ of execution against Manila Underwriters. Manila Underwriters opposed, arguing it was not notified as required by Section 20 of Rule 59 of the Rules of Court. The trial court granted the motion for execution. Manila Underwriters appealed to the Supreme Court (G.R. No. L-12256), which set aside the order, ruling that the surety, not having been notified, should not be made liable under its bond. The Petition: Despite the Supreme Court's decision in G.R. No. L-12256, Jose de Borja filed another motion on August 15, 1960, asking the court to require Manila Underwriters to show cause why it should not be held liable under its bond and to issue a writ of execution. Manila Underwriters opposed, citing the finality of the Supreme Court's decision. Nevertheless, the respondent judge issued an order on August 30, 1960, citing Manila Underwriters to appear and show cause, and on September 10, 1960, denied its motion for reconsideration. This led to the filing of the present petition for certiorari and prohibition.
Issue(s)
Whether the respondent judge committed grave abuse of discretion in issuing orders to hold petitioner liable under its bond despite a prior Supreme Court decision ruling otherwise.
Ruling
The Supreme Court declared the orders complained of void and of no legal force and effect. The writ of preliminary injunction issued in this case was made final. Costs were against respondent Jose de Borja.
Ratio Decidendi
On Issue 1: The Supreme Court held that the respondent judge committed grave abuse of discretion in issuing the orders complained of. The Court found that the question of whether petitioner Manila Underwriters Insurance Co., Inc. could still be held liable upon its bond had already been finally settled by its previous decision in G.R. No. L-12256. Any attempt to hold the petitioner liable under the same bond was deemed an improper attempt to reopen a case that had already been adjudicated. The Court emphasized that the prior decision clearly stated that the petitioner Surety, not having been notified in the manner required by the Rules of Court before the judgment became final, should not be made liable under its bond. Therefore, the subsequent orders issued by the respondent judge were declared void and of no legal force and effect, and the preliminary injunction was made permanent.
Main Doctrine
The Supreme Court reiterated that a surety company, which posted a bond for a writ of preliminary attachment, cannot be held liable for damages awarded to the defendant if the surety was not impleaded nor given notice of the claim for damages. Such liability would violate the surety's right to due process and would constitute an improper attempt to reopen a case already finally adjudicated by the Supreme Court.