Oriental Commercial Co. v. Abeto
REITERATIONFacts
The Antecedents: Petitioner Oriental Commercial Co., Inc. filed a civil case against Gregorio Bugayong, Vicente Rosario, and Alejo Mabanag to recover a sum of money, interest, penalty, and costs. The Court of First Instance (CFI) of Manila rendered judgment ordering only Bugayong to pay the sum, absolving Mabanag and Rosario. Procedural History: On appeal, the Supreme Court modified the CFI judgment, ordering judgment against all defendants (Bugayong, Rosario, and Mabanag) for P5,742.73 with legal interest, P1,000 for attorney's fees, and costs. This judgment became final and was remanded. The Petition: Petitioner obtained a writ of execution, leading to the levy of properties of Rosario and Mabanag. Mabanag executed a promissory note for P1,000 as partial payment and secured a suspension of execution. Subsequently, an alias writ of execution was issued against Mabanag for the remaining balance. Mabanag filed a motion to enjoin the sheriff, arguing he was a mere joint obligor and not liable for the full amount, and that execution should only proceed against the principal debtor, Bugayong, after his property is exhausted. The CFI granted Mabanag's motion, ordering the sheriff to abstain from selling Mabanag's property until Bugayong's property was exhausted or Bugayong was found insolvent. Petitioner filed this petition for certiorari to set aside the CFI's order.
Issue(s)
Whether the trial court acted without or in excess of its jurisdiction or abused its sound discretion in issuing the order enjoining the sheriff from proceeding with the sale of respondent Mabanag's properties. Whether respondent Mabanag, as a co-defendant in the final judgment, is liable to satisfy the full unpaid balance of the judgment. Whether respondent Mabanag, as a mere surety, is entitled to the benefit of exhaustion of the principal debtor's property before execution can issue against him.
Ruling
The Supreme Court granted the petition, setting aside the order of the Court of First Instance. It held that respondent Mabanag was not entitled to the benefit of exhaustion as the final judgment did not classify him as a surety or grant him such benefit. The Court reiterated that a final judgment supersedes the original cause of action and that if a judgment does not expressly state that defendants are liable jointly and severally, they are presumed to be only jointly liable.
Ratio Decidendi
On the jurisdiction and discretion of the trial court: The Supreme Court held that the trial court acted in excess of its jurisdiction in issuing the order enjoining the sheriff. The final judgment rendered by the Supreme Court was the source of the parties' rights and obligations. This judgment superseded the original action and merged the claims therein. The trial court's order, which granted Mabanag the benefit of exhaustion and treated him as a surety, was not supported by the terms of the final judgment. The Supreme Court emphasized that a final judgment is binding and its execution must conform to its tenor. On Mabanag's liability for the full unpaid balance: The Court clarified that the final judgment rendered by the Supreme Court did not specify whether the defendants were liable jointly and severally. Citing Articles 1137 and 1138 of the Civil Code, the Court reiterated the established doctrine that in the absence of an express stipulation for a joint and several obligation, the obligation is presumed to be joint, meaning each debtor is liable only for their proportionate share. Therefore, Mabanag, as a joint obligor, could not be compelled to satisfy the full unpaid balance of the judgment. On Mabanag's entitlement to the benefit of exhaustion: The Supreme Court found that the trial court erred in granting Mabanag the benefit of exhaustion, treating him as a surety. The final judgment did not classify Mabanag as a surety, nor did it grant him any such benefit. While the original contract of suretyship might have been joint and several, the final judgment, which superseded the action to enforce that contract, declared the obligation to be merely joint. Execution must follow the tenor of the final judgment, which did not consider any of the defendants as a surety entitled to the benefit of exhaustion.
Main Doctrine
A final judgment supersedes the original cause of action and merges the rights and obligations of the parties. If a judgment does not expressly state that the defendants are liable jointly and severally, they are presumed to be only jointly liable, with their obligation divided into equal parts.