Pioneer Insurance & Surety Corp. v. Camilon
REITERATIONFacts
The Antecedents: In Civil Case No. 9205, the Court of First Instance of Rizal rendered a judgment ordering defendants Co Ban Ling and Sons, Co Chin Leng, and Pioneer Insurance and Surety Corporation (petitioner) to pay Steel Distributors, Inc. (plaintiff) P35,760.00 with interest and attorney's fees, jointly and severally. In case of insufficiency of their properties, defendants Co Chin Tong and Macario Co Ling were ordered to pay the balance jointly with the other partners. The counterclaim of the defendants was dismissed. Procedural History: Upon appeal to the Court of Appeals, the decision was affirmed, with a modification that the liability of appellant Co Chin Leng was only joint or pro rata and subsidiary. Subsequently, the judgment creditor moved for the issuance of a writ of execution, including petitioner herein. Petitioner filed a motion to quash the writ of execution concerning its liability, which was denied by the respondent judge. The respondent judge reasoned that petitioner's liability was adjudged jointly and severally, and the rule of excussion was not applicable as there was already a final and executory judgment sentencing the bondsman as jointly and solidarily liable. The respondent judge cited Luzon Steel Corporation vs. Sia. The Petition: Petitioner filed a petition for certiorari and prohibition with this Court, seeking to annul the order denying its motion to quash the writ of execution.
Issue(s)
Whether the rule of excussion under Section 17 of Rule 57 of the Rules of Court is applicable to a bondsman whose liability has been adjudged as joint and solidary in a final and executory judgment.
Ruling
The petition is DISMISSED. The restraining order issued by this Court on January 22, 1976, is lifted effective immediately. Petitioner is not precluded from recovering from its co-judgment debtor whatever it has to pay under the writ of execution.
Ratio Decidendi
On Issue 1: The Supreme Court definitively held that the rule of excussion, as provided under Section 17 of Rule 57 of the Rules of Court, is not applicable in the instant case where there is already a final and executory judgment sentencing the bondsman, Pioneer Insurance and Surety Corporation (PISC), as jointly and solidarily liable. The Court reasoned that the purpose of the rule of excussion is to protect a surety by requiring the creditor to exhaust the principal debtor's properties first, a protection typically invoked when the surety's liability is contingent or subsidiary. However, this protective mechanism ceases to be relevant and applicable once a court's judgment, which has already attained finality, explicitly declares the bondsman's liability to be joint and several. Such a final judgment transforms the nature of the obligation, making the bondsman directly and equally liable with the principal debtor, thereby rendering the concept of prior exhaustion of the principal's assets moot. The Court cited Luzon Steel Corporation vs. Sia, which similarly upheld that a bondsman's solidary liability, once established by a final judgment, precludes the invocation of excussion. Therefore, PISC, having been adjudged solidarily liable, cannot evade immediate satisfaction of the judgment and must proceed to pay, reserving its right to seek reimbursement from its co-judgment debtors.
Main Doctrine
A bondsman who is adjudged jointly and severally liable in a final and executory judgment cannot invoke the rule of excussion under Section 17 of Rule 17, as its liability is primary and not subsidiary.