GR 127261; (September, 2001) (Digest)
G.R. No. 127261. September 7, 2001.
VISAYAN SURETY & INSURANCE CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS, SPOUSES JUN BARTOLOME and SUSAN BARTOLOME and DOMINADOR V. IBAJAN, respondents.
FACTS
Spouses Danilo and Mila Ibajan filed a replevin action against spouses Jun and Susan Bartolome to recover an Isuzu jeepney. To secure the writ, they posted a replevin bond through petitioner Visayan Surety & Insurance Corporation. The bond was conditioned for the return of the property to the defendant and payment of sums recoverable from the plaintiff. The writ was issued, and the sheriff seized the vehicle for the plaintiffs.
Subsequently, Dominador V. Ibajan, father of Danilo, successfully intervened, claiming superior ownership. The trial court quashed the original writ and ordered the vehicle returned to the intervenor. As the plaintiffs could not return the jeepney, the intervenor moved for judgment against the replevin bond. The trial court held both the plaintiff Mila Ibajan and Visayan Surety jointly and severally liable. The Court of Appeals affirmed this decision.
ISSUE
Whether the surety is liable to an intervenor on a replevin bond posted for the benefit of the original defendants.
RULING
The Supreme Court reversed the Court of Appeals and ruled that the surety is not liable to the intervenor. The legal logic is anchored on the nature of contracts and the specific principles of suretyship. A contract, including a contract of suretyship, generally takes effect only between the parties, their assigns, and heirs. It cannot favor or prejudice a third person who is not a party thereto. The replevin bond was executed specifically in favor of the defendants, the spouses Bartolome, to secure the potential judgment in their favor.
An intervenor, while becoming a party to the suit, does not automatically become a beneficiary of a pre-existing contract between the original parties. The obligation of a surety is strictissimi juris; it cannot be extended by implication beyond its specified limits. The bond’s terms explicitly bound the surety for the return of property to “the defendant” and payment to “the defendant.” The intervenor, Dominador Ibajan, was not a signatory to this contract nor was he the intended obligee. Therefore, the surety’s liability is confined to the original defendants and does not extend to the intervenor.