G.R. No. L-16662; January 31, 1962
VET BROS AND CO., INC., plaintiff, vs. JOSE S. MOVIDO, ET AL., defendants, JOSE S. MOVIDO, defendant-appellee, LUZON SURETY CO., INC., surety-appellant.

FACTS

Vet Bros & Co., Inc. filed a complaint (Civil Case No. 850) against Jose S. Movido and provincial sheriffs to enjoin the execution sale of its properties to satisfy a prior judgment in Movido’s favor (Civil Case No. 441). Vet Bros alleged the judgment had already been satisfied. The court issued a preliminary injunction upon Vet Bros’s posting of a P2,000 bond from Luzon Surety Co., Inc. The bond stipulated the surety would pay damages sustained by the defendants due to the injunction if the court finally decided Vet Bros was not entitled to it.
During the hearing of Civil Case No. 850, Vet Bros failed to appear. The court dismissed the case for non-appearance and lifted the preliminary injunction. This dismissal order became final. Subsequently, Movido filed a motion for a writ of execution directly against the surety bond. The lower court granted the motion, relying on a precedent concerning attachment bonds.

ISSUE

Whether a writ of execution can properly issue against a surety bond for a preliminary injunction based solely on a final order dismissing the main case for plaintiff’s non-appearance, without a prior judgment finding the plaintiff not entitled to the injunction and awarding specific damages against the surety.

RULING

No, the writ of execution was improperly issued. The Supreme Court set aside the lower court’s order. The liability of a surety on an injunction bond is strictly governed by the bond’s terms and the Rules of Court (Sections 9, Rule 60 and 20, Rule 59). The bond only answers for damages the defendant may sustain by reason of the injunction, provided the court finally decides the plaintiff was not entitled to it.
Here, the dismissal was purely for plaintiff’s failure to appear at trial. The final order did not contain a finding that Vet Bros was not entitled to the injunction, nor did it include any adjudication or award of damages to Movido after a proper hearing as required by the rules. Consequently, there was no judgment against the surety to execute. A surety’s liability cannot be presumed or extended beyond the scope of its undertaking. Execution against a surety requires a prior separate judgment against it, secured through an application and hearing on damages, which was never done.
The precedent cited by the lower court (Bautista v. Joaquin) is inapplicable as it involved a bond to discharge an attachment, which by rule stands as a substitute for the attached property and directly answers for the judgment debt. An injunction bond serves a different purpose—to answer only for proven damages caused by the wrongful issuance of the injunction. Since no damages were claimed, heard, or awarded, the surety cannot be held liable.