Calderon v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Petitioner Jose D. Calderon purchased Luzon Brokerage Corporation (LBC) and its five affiliate companies from private respondents. Twenty-one days after the sale, the Bureau of Customs suspended LBC's operations for unpaid customs taxes and duties amounting to P1,475,840.00. Calderon paid P606,430.00 to lift the suspension. Procedural History: Calderon filed a complaint against private respondents to recover the amount paid, alleging breach of warranty and fraudulent concealment of LBC's liabilities. He also prayed for a preliminary attachment, claiming private respondents concealed the liability and that respondent Schulze was about to depart the Philippines to defraud creditors. A surety bond was posted, and a writ of preliminary attachment was issued, leading to the attachment of private respondents' properties and garnishment of bank deposits. Calderon later amended his complaint, alleging Schulze had fraudulently withdrawn and misappropriated the amount. Private respondents claimed the amount represented duties and taxes on advance payments from a client, which were disclosed and properly recorded, and that Calderon paid the P606,430.00 from LBC funds. They filed a counterbond, leading to the discharge of the attachment. The Regional Trial Court (RTC) dismissed Calderon's complaint and held Calderon and his surety, First Integrated Bonding and Insurance Company, Inc., jointly and severally liable for damages. The Intermediate Appellate Court (IAC) affirmed the dismissal but modified the award of moral and exemplary damages. The Petition: Both Calderon and the surety company filed petitions for review on certiorari, assailing the IAC's decision.
Issue(s)
Whether the petitioner failed to establish his claims. Whether the preliminary attachment had been wrongfully and maliciously sued out. Whether the petitioner is liable for actual, moral, and exemplary damages. Whether the surety is liable for damages on its contracted suretyship notwithstanding the dissolution of the writ of preliminary attachment by the filing of a counterbond. Whether the filing of a counterbond by the private respondents constituted a waiver of any defect in the issuance of the attachment writ. Whether a surety is a guarantor of the existence of a good cause of action in the complaint.
Ruling
The Supreme Court affirmed the decision of the Intermediate Appellate Court with modification regarding the awarded damages. Both petitioner Calderon and petitioner First Integrated Bonding and Insurance Company, Inc. were ordered to pay damages jointly and severally to respondents George Schulze and Antonio C. Amor, but the amounts were reduced from the IAC's award. The dismissal of Calderon's amended complaint was affirmed in toto.
Ratio Decidendi
On the issue of whether the petitioner failed to establish his claims: The Court held that whether the amount of P1,475,840.00 was disclosed as an outstanding liability or was misappropriated was a purely factual issue. The Appellate Court found that Calderon failed to produce any evidence to support his sworn charges of concealment and misappropriation by Schulze. Calderon himself did not appear in court to substantiate his allegations, thereby avoiding cross-examination. The evidence presented by the private respondents, including the financial statements and corporate books, indicated that the liabilities were recorded under 'Customers Deposit' and included the deposit of Philippine Refining Co., Inc. The Court found no merit in Calderon's contentions regarding the dating of the financial statement or tampering of the books, as these were not substantiated. On the issue of whether the preliminary attachment had been wrongfully and maliciously sued out: The Court found that the attachment was maliciously sued out, as evidenced by Calderon's failure to appear in court to support his charge of misappropriation and his failure to present any document on the charges. The trial court observed that the books and records disclosed the liabilities, while the plaintiff failed to appear and produce evidence to substantiate his charges. The Court reiterated the well-settled rule that factual findings of the trial court are entitled to great weight and respect on appeal, especially when established by unrebutted testimonial and documentary evidence. On the issue of whether the petitioner is liable for actual, moral, and exemplary damages: The Court affirmed the liability for damages. While as a general rule, attachment bond liability is limited to actual damages, moral and exemplary damages may be recovered when the attachment is alleged and established to have been maliciously sued out. The issues of wrongful and malicious suing out of the writ were joined in the private respondents' motion to discharge the attachment and their answer. Given the findings of wrongful attachment and the plaintiff's failure to substantiate his claims, the award of damages was justified, although the amounts were subject to modification. On the issue of whether the surety is liable for damages notwithstanding the dissolution of the writ by a counterbond: The Court ruled that the dissolution of the attachment by the filing of a counterbond does not render the attachment bond void and ineffective. Section 4, Rule 57 of the Rules of Court clearly states that the surety's responsibility arises if the court shall finally adjudge that the applicant was not entitled to the attachment. Therefore, upon dismissal of a wrongfully issued attachment, the surety is liable for damages. On the issue of whether the filing of a counterbond constituted a waiver of defects in the issuance of the writ: The Court held that filing a counterbond does not constitute a waiver of any defect in the issuance of the attachment writ. The attachment debtor could have sought discharge of the attachment if improperly or irregularly issued under Section 13, Rule 57. However, availing oneself of the counterbond, which is a speedier way to discharge the writ, does not waive any right to claim damages if the attachment is later found to be wrongful. On the issue of whether a surety is a guarantor of the existence of a good cause of action: The Court clarified that the surety's liability attaches if the plaintiff is not entitled to the attachment because the requirements for the writ are wanting or because the facts stated in the affidavit are untrue. The surety is not a guarantor of the existence of a good cause of action in the main complaint, but rather guarantees against damages resulting from a wrongful or malicious attachment.
Main Doctrine
The filing of a counterbond to discharge a writ of attachment does not extinguish the surety's liability for damages if the court ultimately adjudges that the attaching creditor was not entitled to the writ. The surety remains liable for damages sustained by the adverse party due to the wrongful or malicious issuance of the attachment.