G.R. No. L-16780; May 31, 1961
Republic of the Philippines, plaintiff-appellee, vs. Maximino Gumayan and People’s Surety & Insurance Company, defendants, People’s Surety & Insurance Co., defendant-appellant.

FACTS

Maximino Gumayan was licensed as a bonded warehouse operator under the General Bonded Warehouse Law. To secure his obligations to depositors, he, as principal, and People’s Surety & Insurance Company, as surety, executed three surety bonds. Gumayan also executed indemnity agreements in favor of the surety company for two of these bonds, agreeing to reimburse the company for any payouts plus 15% attorney’s fees and 12% interest. The Republic filed a case against both for Gumayan’s failure to return deposited palay or pay its value. During trial, Gumayan’s motion for postponement was denied due to insufficient notice and lack of a compelling reason. He and his counsel were absent on the trial date, so the court proceeded to receive evidence from the plaintiff and the surety company, which also filed a cross-claim against Gumayan and a third-party complaint against his co-indemnitor.

ISSUE

The primary issues were: (1) whether the trial court abused its discretion in denying Gumayan’s motion for postponement and proceeding with the trial in his absence; and (2) whether the surety company is entitled to recover from Gumayan the stipulated attorney’s fees and interest as per their indemnity agreements, even for amounts paid under a bond not covered by those agreements.

RULING

The Supreme Court found no abuse of discretion in the denial of the postponement. Motions for postponement are addressed to the court’s sound discretion. Gumayan’s counsel gave less than three days’ notice by ordinary mail and provided no valid, excusable reason for his absence, as attending to another administrative case was not a priority over a scheduled hearing. A movant cannot assume a postponement will be granted and must be present to proceed if it is denied. The lack of formal notice of the denial order did not prejudice Gumayan, as his absence itself caused his inability to present evidence; notice of the subsequent decision sufficed. Regarding the surety company’s cross-claim, the Court modified the lower court’s judgment. The indemnity agreements for Bonds Nos. 35 and 82 expressly stipulated reimbursement plus 15% attorney’s fees and 12% interest. These contractual stipulations are valid and enforceable. However, for Bond No. 67, which lacked a supporting indemnity agreement with such stipulations, the surety company is entitled only to reimbursement of the principal amounts paid and costs, not the additional fees and interest. The decision was affirmed with modifications to reflect these distinctions in the surety company’s right of reimbursement against Gumayan and the third-party defendant.