G.R. No. L-23920 April 25, 1968
RAMON R. DIZON, plaintiff-appellant, vs. LORENZO J. VALDES, VALLESON, INC., and AUGUSTO J. VALDES, defendants-appellees.

FACTS

Plaintiff Ramon R. Dizon obtained a judgment on December 2, 1960, in Civil Case Q-2618, directing defendants Valleson, Inc. and Augusto J. Valdes to pay him jointly and severally the amount of P6,260.00 with interest and attorney’s fees. On January 10, 1961, the trial court issued a writ of preliminary attachment against the properties of these defendants upon the filing of an P11,730-bond. On February 9, 1961, the judgment debtors moved to dissolve the writ by filing a counter-bond subscribed by Capital Insurance & Surety Co., Inc. The court dissolved the writ on February 10, 1961. On February 24, 1961, plaintiff filed a “Claim for Damages,” alleging that the dissolution of the attachment put the properties out of his reach and caused him damages in the amount of the counter-bond (P11,730.00) plus interest and fees. He prayed that the defendants and the surety be ordered to pay this amount jointly and severally. The surety opposed, citing Section 17, Rule 59 (now Rule 57) of the Rules of Court, which provides that a surety on a counter-bond becomes liable to pay the judgment amount only after execution is returned unsatisfied. The trial court, in its order of May 16, 1961, ruled that the claim for damages was premature because the main case was still pending on appeal (Valleson, Inc. had perfected its appeal on February 11, 1961). The court denied plaintiff’s motion for reconsideration on September 16, 1961.

ISSUE

Whether plaintiff’s claim for damages on the defendants’ counter-bond can prosper at the time it was filed, given that the main judgment was on appeal and execution had not been returned unsatisfied.

RULING

No. The Supreme Court affirmed the lower court’s order, holding that the claim for damages was premature. The liability under the counter-bond attaches only “in case the plaintiff recovers judgment in the action,” as per the bond’s own terms and Section 12 of the old Rule 59. Furthermore, Section 17 of Rule 59 (substantially the same as Section 17, Rule 57) provides that the surety becomes bound to pay the judgment amount only “[i]f the execution be returned unsatisfied in whole or in part,” and this amount may be recovered from the surety after notice and summary hearing in the same action. Since the case was pending appeal when the claim was filed, no proceedings on execution after judgment had taken place. The Court clarified that Section 20 of Rule 57 (then Rule 59), which allows recovery of damages on a plaintiff’s bond for illegal attachment, applies to a defendant claiming damages, not to the plaintiff. The counter-bond does not answer for damages due to the lifting of the attachment but secures the payment of the judgment amount. The release of the attached property does not prejudice the attaching party because the counter-bond stands in place of the released properties. Costs were imposed on the plaintiff-appellant.