Mercado v. Macapayag
REITERATIONFacts
The Antecedents: Plaintiffs Francisca Mercado and Anastacio Lising filed a case for the manual delivery of 370 cavanes of palay against defendants Francisco Macapayag and Roman Pineda. A warrant of seizure was issued, and a portion of the palay (142 cavanes, 12 gantas, 4½ chupas) was seized. The defendants claimed this seized palay, and to secure its return, filed a redelivery bond executed by sureties Francisco Lorenzo and Concepcion Hizon. The bond stipulated that the sureties would be liable for P912.04 if the court declared the plaintiffs entitled to the possession of the goods and to the payment of the amount recovered by final judgment against the defendants. Procedural History: The defendants amended their answer, alleging they were tenants and in legal possession of the palay pending liquidation. The parties submitted a stipulation of facts, and the lower court rendered a judgment based on this stipulation, ordering the defendants to pay specific quantities of palay and sums of money. The judgment became final, but execution against the defendants' properties was unsatisfied. The plaintiffs then petitioned for execution against the redelivery bond. The sureties opposed this, but the lower court overruled their opposition, holding them liable. The Petition: The sureties-appellants contended that the decision based on the stipulation of facts modified their obligation, discharging them; that the palay mentioned in the decision did not refer to the seized palay; and that the sums of money did not constitute damages.
Issue(s)
Whether the sureties on a redelivery bond are discharged from their undertaking when the lower court's decision is based on a stipulation of facts. Whether the amount of palay and sums of money awarded in the decision refer to the seized goods and damages suffered by the plaintiffs. Whether the sureties are liable on their redelivery bond.
Ruling
The judgment of the court is affirmed, with costs against the sureties-appellants.
Ratio Decidendi
On the issue of whether the sureties are discharged by a decision based on a stipulation of facts: The Court held that the sureties are not discharged. The redelivery bond unequivocally bound the sureties to answer solidarily for the obligation of the defendants to the plaintiffs in the amount of P912.04. This liability was conditioned on the finality of the judgment rendered by the court, regardless of whether the decision was based on the consent of the parties or on the merits of the case. A judgment entered on a stipulation of facts is nonetheless a judgment of the court, and in the absence of fraud and collusion, sureties on a replevin bond should be bound by such a judgment. The Court cited Manila Railroad Co. vs. Arzaron and Donovan vs. Etna Indemn. Co. in support of this principle. On the issue of whether the decision refers to the seized palay and damages: The Court implicitly affirmed that the decision's award was the basis for the sureties' liability. The bond was executed to secure the return of the seized palay, and the sureties undertook to substitute the obligation of the defendants to deliver the palay retained by the latter in case the court declared the plaintiffs entitled to its possession. The final judgment, even if based on a stipulation, determined this entitlement and the consequent obligation. On the issue of the sureties' liability on their redelivery bond: The Court found the sureties liable. The redelivery bond was crucial for the lower court to lift the warrant of seizure concerning the portion of palay in the defendants' possession, allowing the defendants to dispose of it. Having undertaken to answer for the defendants' obligation to deliver the retained palay should the plaintiffs be declared entitled to it by final judgment, the sureties must now fulfill their commitment through the redelivery bond.
Main Doctrine
Sureties on a redelivery bond in a replevin case are bound by a judgment rendered on a stipulation of facts, absent fraud or collusion, as their liability is conditioned on the finality of the judgment regardless of whether it was based on consent or merits.