G.R. No. L-21282 September 29, 1966
CONSOLACION INSURANCE AND SURETY COMPANY, INC., petitioner, vs. HON. ANGEL H. MOJICA, presiding Judge of the Court of First Instance of Rizal (Pasay City Branch), MACARIO M. OFILADA, Sheriff of the City of Manila, and CLARO CORTES, doing business under the name and style of CLARO CORTES AND SONS, respondents.

FACTS

Respondent Claro Cortes filed Civil Case No. 389-R against Natalia L. Sison and Sergio Mendoza, doing business as Kapit Bahay Restaurant, to recover the sum of P7,858.62 for construction materials supplied. The court issued a writ of preliminary attachment against the defendants’ properties. This writ was later dissolved upon the defendants filing a counter bond in the sum of P8,000.00, with petitioner Consolacion Insurance and Surety Company, Inc. as surety, conditioned “to answer for any judgment that may be awarded to the plaintiff.” On October 3, 1962, the respondent judge rendered judgment based on a compromise agreement entered into by the parties (Cortes and the defendants). The agreement stipulated that the outstanding balance was P5,949.15, that the defendants confessed judgment for that amount provided no execution would issue within four months from August 2, 1962, and that the plaintiff waived liquidated damages and attorney’s fees on the amount if paid within the four-month period. On December 21, 1962, respondent Cortes filed a motion for execution against the defendants and the petitioner surety on its bond for the sum of P4,226.25, which remained owing under the judgment. Petitioner objected, arguing it was not bound by the compromise agreement made without its consent and was thus released from liability on the bond, and that it had the right of exhaustion under the Rules of Court. The respondent judge issued the order for execution on January 21, 1963. Petitioner’s motion for reconsideration was denied, prompting the filing of this certiorari petition. In a subsequent pleading, respondent Cortes stated that the defendant Kapit Bahay Inc. had almost paid the judgment debt, with the outstanding balance being just over P1,000.00, and that he was not interested in proceeding against the petitioner surety on the bond, rendering the issue moot.

ISSUE

Whether the writ of execution issued against the surety bond is proper, considering the subsequent compromise agreement between the principal parties and the respondent creditor’s declaration that the issue had become moot.

RULING

The case was dismissed. The Court found the issue had become moot and academic. This conclusion was based on respondent Claro Cortes’s own statements in his “Second Motion for Extension of Time to File Answer,” wherein he declared that the principal debtor had almost paid the judgment amount, leaving an outstanding balance of just over P1,000.00, that he was not interested in proceeding against the petitioner surety for its liability under the bond, and that arrangements had been made for payment of the balance. Consequently, the Court dismissed the case without costs.