G.R. No. L-20789 June 20, 1966
CAPITAL INSURANCE and SURETY CO., INC., petitioner, vs. HON. LUIS B. REYES, ET AL., respondents.

FACTS

Respondent spouses Pacita Tuason-Principe and Federico Principe filed an unlawful detainer case (Civil Case No. 74237) in the Municipal Court of Manila against Isidra de Leon. On April 25, 1962, the municipal court rendered judgment ordering de Leon to vacate the premises, pay accrued rents, attorney’s fees, and costs. De Leon appealed to the Court of First Instance of Manila. To stay the execution of the municipal court’s judgment, she filed a supersedeas bond posted by petitioner Capital Insurance & Surety Co., Inc. (the Surety). The bond was conditioned to secure payment of the appealed judgment in case it is affirmed in whole or in part, or if it becomes effective due to the appellant abandoning/withdrawing the appeal, or if the appeal is dismissed or declared improperly allowed. During the pendency of the appeal, the Principes moved for execution of the municipal court’s judgment on the ground that de Leon failed to deposit some accrued monthly rentals. The motion was granted and a writ of execution issued. Subsequently, the Principes filed a motion for a writ of execution against the Surety on the supersedeas bond. Respondent Judge Luis B. Reyes granted this motion in an order dated January 7, 1963. The Surety’s motion for reconsideration was denied.

ISSUE

Whether the respondent Judge acted without or in excess of jurisdiction in issuing a writ of execution against the Surety on the supersedeas bond for the payment of rentals that had accrued prior to the municipal court’s decision, despite none of the conditions specified in the bond having occurred.

RULING

Yes. The Supreme Court granted the writ of certiorari and annulled the order of execution against the Surety. The obligations of the Surety are governed strictly by the terms and conditions of the supersedeas bond it executed. The bond specifically provided that the Surety’s liability would arise only if: (1) the municipal court’s judgment is affirmed in whole or in part; (2) the judgment becomes effective due to the appellant abandoning or withdrawing the appeal; or (3) the appeal is dismissed or declared improperly allowed. In this case, none of these conditions had materialized as the unlawful detainer case was still pending appeal in the Court of First Instance. The Court distinguished the liability of the defendant-appellant from that of the Surety. While under Section 8, Rule 70 of the Rules of Court, a defendant’s failure to pay rentals due during the appeal can result in execution of the entire judgment of the municipal court, the Surety’s liability is contractual and limited to the bond’s conditions. Since the conditions for the Surety’s liability had not occurred, the respondent Judge committed a grave abuse of discretion amounting to excess of jurisdiction in ordering execution against the Surety. The preliminary injunction was made permanent.