G.R. No. L-12256; April 29, 1960
MANILA UNDERWRITERS INSURANCE CO., INC., petitioner, vs. HON. BIENVENIDO A. TAN, ETC. ET AL., respondents.

FACTS

In Civil Case No. 12796 between plaintiff Gelacio E. Tambunting and defendant Jose de Borja, the respondent court rendered a judgment on December 21, 1954. The judgment dismissed the plaintiff’s complaint, dissolved a writ of preliminary attachment, and sentenced the plaintiff to pay the defendant a total of P38,938.39 for various counterclaims. The bond filed by the plaintiff for the writ of preliminary attachment was ordered maintained to answer for damages from its wrongful issuance. The petitioner, Manila Underwriters Insurance Co., Inc., was the surety that issued this attachment bond. During the trial, the defendant Borja presented evidence for his counterclaims, but the petitioner surety was not notified of this hearing. The petitioner was furnished a copy of the decision on January 25, 1955. After the Court of Appeals affirmed the decision and it became final, respondent Borja filed a motion for a writ of execution against the petitioner surety on its bond. The petitioner opposed this motion. To meet this objection, Borja orally moved to reproduce the evidence he had previously presented during the trial. The respondent court granted this motion and ordered the issuance of a writ of execution against the defendant and the petitioner surety. The petitioner’s motion for reconsideration was denied, prompting this petition.

ISSUE

Whether the petitioner surety can be held liable under its attachment bond and subjected to execution without having been given the notice required by Section 20, Rule 59 of the Rules of Court before the judgment for damages became final.

RULING

No. The Supreme Court set aside the order of the respondent court. The Court held that under Section 20, Rule 59 of the Rules of Court, damages upon an attachment bond may be awarded only upon application and after proper hearing, with due notice to the plaintiff and his surety. The application must be filed before the trial or, in the court’s discretion, before the entry of final judgment. Since the petitioner surety was not notified in the manner required by the rules before the judgment became final, it cannot be made liable under its bond without being given an opportunity to be heard. The Court cited its ruling in Visayan Surety & Ins. Co. vs. Pascual, which states that if no notice is given to the surety, a judgment against the principal cannot be executed against the surety without giving the latter a chance to be heard on the reality or reasonableness of the alleged damages. In such a case, the court must order the surety to show cause, and if the surety contests the damages, a summary hearing must be held where the surety can cross-examine witnesses, though previous oral proof may be reproduced without retaking testimony.