G.R. No. 28611 , January 30, 1929
ILDEFONSO DE LA ROSA and GO KEE, plaintiffs-appellees, vs. FRANCISCO DE BORJA, defendant-appellant.

FACTS

Ildefonso de la Rosa, as administrator of the estate of Go Lio, sued Enrique Go Cotay for the liquidation and partition of a partnership formed by Go Lio and Go Cosing (Go Cotay’s father). The trial court declared the existence of the partnership and ordered its liquidation. Go Cotay was allowed to remain in possession of the partnership property as a receiver upon posting a bond. The parties later stipulated to suspend liquidation and forward the case to the Supreme Court on appeal, with Go Cotay remaining in possession upon filing a new bond for P25,000. Go Cotay, with Francisco de Borja and others as sureties, executed the bond on January 13, 1922. The Supreme Court eventually held Go Cotay liable as a receiver for losses amounting to P60,598.28 incurred due to his unauthorized continuation of the partnership business. Execution against Go Cotay was returned unsatisfied. The plaintiffs then sought to enforce the bond against surety Francisco de Borja via a motion in the receivership proceedings, which was denied. The Supreme Court, in a mandamus case, ruled that a separate action was necessary to enforce the surety’s liability. Consequently, the plaintiffs filed this separate action against De Borja.

ISSUE

1. Whether the surety, Francisco de Borja, is liable on the bond for the losses incurred by Go Cotay as a receiver.
2. Whether the order of the trial court denying the motion for execution against the surety constitutes *res judicata*.
3. Whether the Court of First Instance of Manila had jurisdiction over the action given the residence of the parties.

RULING

1. Yes, the surety is liable. The bond was executed to secure the performance of Go Cotay’s duties as a receiver and to answer for damages resulting from his fault, negligence, or abandonment. The Supreme Court had already established in the main case that Go Cotay, as a receiver, was liable for losses due to his unauthorized acts. The bond was given precisely to answer for such liability. The presumption is that the partnership property, valued at over P30,000 for the plaintiff’s share, existed at the time the bond was executed, and its subsequent disappearance points to liability attaching under the bond’s terms.

2. No, the order is not *res judicata*. The Supreme Court, in the mandamus proceeding, explicitly held that the surety’s liability on the bond could only be enforced by a separate action and not by a mere motion. Therefore, the pronouncements in the trial court’s order denying the motion were made outside its jurisdiction on that matter and are considered *obiter dicta* without the force of a final adjudication.

3. Yes, the Manila court had jurisdiction. The defendant’s objection to venue based on the residence of the parties was raised too late. Under Section 377 of the Code of Civil Procedure, a defendant’s failure to object to the venue at the time of entering his appearance constitutes a waiver of such objection, except in specific actions not applicable here. The record showed that plaintiff Go Kee was actually residing in Manila at the time of the suit, and in any case, De Borja had submitted to the court’s jurisdiction.

The appealed judgment holding Francisco de Borja liable as a surety on the bond was affirmed.