GR L 14959; (August, 1960) (Digest)
G.R. No. L-14959; August 31, 1960
REPUBLIC SAVINGS BANK, plaintiff-appellee, vs. FAR EASTERN SURETY AND INSURANCE CO., INC., defendant-appellant.
FACTS
The Municipal Court of Quezon City rendered a judgment on June 8, 1957, in an ejectment case (Civil Case No. 3858) against Salvador Villareal, ordering him to vacate the premises, restore possession to Republic Savings Bank, and pay back rentals. This judgment became final and executory on June 24, 1957, due to Villareal’s failure to appeal within the 15-day period. Nevertheless, on July 10, 1957, Villareal filed a supersedeas bond subscribed by Far Eastern Surety and Insurance Co., Inc., under Section 8 of Rule 72, for the purpose of suspending execution pending his appeal. The plaintiff bank, noting the appeal was not perfected on time, obtained a writ of execution on July 16, 1957. Subsequently, on July 25, 1957, the bank petitioned for execution against the bond. The court granted the petition over the surety’s objection, and this order was affirmed by the Court of First Instance. The lower court reasoned that the bond’s purpose was to stay execution and, since execution was in fact stayed until the bank’s motion, the bond became liable despite the non-perfection of the appeal.
ISSUE
Whether the appellant surety company incurred liability on the supersedeas bond despite the principal debtor’s failure to perfect his appeal from the ejectment judgment.
RULING
No. The Supreme Court reversed the lower court’s decision and absolved the surety from liability. The Court held that the supersedeas bond filed on July 10, 1957, had no legal effect because the judgment it intended to suspend had already become final and executory on June 24, 1957. At the time the bond was filed, execution could have been legally demanded and obtained by the plaintiff. The fact that execution was not issued until July 16, 1957, was due to the plaintiff’s own delay in seeking it, not because of the bond. Consequently, the bond failed in its purpose, lacked consideration, and created no obligation for the surety.