G.R. No. L-43252 September 30, 1976
PEOPLE’S HOMESITE AND HOUSING CORPORATION, plaintiff-appellee, vs. CORAZON JEREMIAS (REMIAS) and GERINIMO PERECHO, defendants. CAPITAL INSURANCE & SURETY COMPANY, INC., movant-appellant.
FACTS
The People’s Homesite and Housing Corporation (PHHC) filed an ejectment case against spouses Corazon Jeremias and Geronimo Perecho concerning a lot in Quezon City. The Municipal Court ruled in favor of PHHC in 1961. The defendants did not appeal. In 1962, to forestall execution, the court ordered the defendants to file a performance bond, which they complied with by submitting a P1,100.00 bond from Capital Insurance & Surety Co., Inc. The bond contained no specific expiration date. Subsequently, the defendants filed various unsuccessful actions to challenge the judgment, culminating in a final dismissal by the Supreme Court in G.R. No. L-24504 in 1965.
Following the finality of the judgment, PHHC moved for execution on the performance bond in 1968. The surety company opposed, claiming its bond had already expired. The City Court granted PHHC’s motion. The surety company appealed to the Court of First Instance (CFI), which dismissed the appeal on the ground that the surety was not a party to the original ejectment case. The surety company elevated the matter, and the case was forwarded to the Supreme Court as involving a pure question of law.
ISSUE
Whether the Court of First Instance erred in dismissing the surety company’s appeal from the City Court’s order granting execution on the performance bond.
RULING
No, the CFI did not err. The Supreme Court affirmed the order of execution against the surety bond. The legal logic proceeds from the nature of a performance bond in relation to court proceedings. A performance bond filed to stay execution becomes an integral part of the case and is subject to the court’s jurisdiction. The surety, by issuing the bond, submits itself to the court’s authority regarding the bond’s enforcement. Consequently, an order directing execution on the bond is a mere incident of the main case. Such an order is not a final judgment but an interlocutory order directing the enforcement of a final judgment. Therefore, it is not appealable. The proper remedy for an aggrieved surety is a petition for certiorari if the lower court acted without or in excess of jurisdiction or with grave abuse of discretion.
The Supreme Court further held that the CFI’s specific reason for dismissal—that the surety was not a party to the original case—was technically incorrect, as the surety became a party for purposes of the bond. However, the dismissal was ultimately correct because the appealed order was interlocutory and non-appealable. On the substantive issue of liability, the Court ruled the surety was liable. The bond, lacking a specific expiry date, remained in force until the judgment was satisfied. The Court distinguished the case from Naric v. Rivera, where the bond had an explicit expiration clause. Here, the obligation under the bond persisted as the judgment remained unsatisfied, and execution is a proceeding integral to the suit, which is not terminated until the judgment is fully executed. Thus, the order for execution on the bond was proper.