GR L 12779; (August, 1959) (Digest)
G.R. No. L-12779; August 28, 1959
PAULA AQUINO POLICARPIO, petitioner-appellee, vs. THE PHILIPPINE VETERANS BOARD, respondent-appellee, ASSOCIATED INSURANCE & SURETY CO., INC., surety-appellant.
FACTS
Paula Aquino Policarpio, widow of a soldier killed in action, applied for and received a pension from the Philippine Veterans Board starting January 2, 1948. Payments stopped on July 31, 1948, upon discovery she was receiving a U.S. pension. On February 11, 1953, after her U.S. pension ceased, she petitioned the Board for restoration. The Board’s Secretary issued a memorandum restoring her pension effective January 15, 1951, and a treasury warrant was prepared but later withheld as the Board itself had not yet approved the restoration. Policarpio filed a mandamus action. The Court of First Instance of Manila ordered the warrant’s release. The Board appealed. Pending appeal, the court granted Policarpio’s motion for execution upon her filing a P2,000 bond subscribed by Associated Insurance & Surety Co., Inc. The writ was executed, and the Board delivered P2,000 to Policarpio. On August 28, 1956, the Supreme Court reversed the lower court’s decision in G.R. No. L-10062, holding the Secretary’s memorandum and warrant preparation were unauthorized and that mandamus was improper, and modified the decision to merely require the Board to act on Policarpio’s application. After this decision became final, the Board moved for restitution of the P2,000 from Policarpio and the surety. The lower court initially held the motion in abeyance until the Board acted on the application. After the Board restored Policarpio’s pension effective November 29, 1956, the lower court granted the motion and ordered Policarpio and the surety jointly and severally to return the P2,000. The surety company appealed.
ISSUE
Whether the surety company is liable under its bond to return the P2,000 received by Policarpio upon execution, given that the Supreme Court’s dispositive portion in the prior appeal (G.R. No. L-10062) only “modified” the lower court’s decision by ordering the Board to act on her application, and did not explicitly order restitution.
RULING
Yes, the surety company is liable. The Supreme Court affirmed the lower court’s order, with modification.
The Court held that to understand a judgment, it must be considered in its entirety, not confined to its dispositive portion. In the prior appeal, the Court declared the lower court’s decision “untenable,” the warrant preparation “obviously unauthorized,” and the compulsion to deliver “improper.” While the dispositive part used the word “modified,” the ruling directing the warrant’s release was completely overruled. The bond guaranteed the return of the money if the decision was “reversed or reduced.” Interpreting any ambiguity in the bond against the compensated surety, “reduced” should be read as “reversal or modification.” Therefore, the surety is liable to insure the return of the amount. However, since the Board restored Policarpio’s pension effective November 29, 1956, the P2,000 to be returned may be compensated or reduced by any pension amount still due to Policarpio from that date until the restoration. The order was affirmed as thus modified.