G.R. No. L-27802 October 26, 1968
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs. CENTRAL SURETY & INSURANCE COMPANY, ET AL., defendants-appellants. CENTRAL SURETY & INSURANCE COMPANY, third-party plaintiff-appellant, vs. PO KEE KAM, ET AL., third party defendants-appellees.

FACTS

The Republic of the Philippines filed a complaint against Central Surety & Insurance Company and its manager, Casimiro Mangoba, to recover P5,000 on a surety bond issued for the temporary release of Chinese citizen Po Kee Kam in a deportation proceeding. The bond was forfeited by the Deportation Board after Po Kee Kam failed to appear at a scheduled hearing on December 14, 1962, despite notice to the Surety. The Surety filed an answer and a third-party complaint against Po Kee Kam and Tony Go, based on an indemnity agreement, seeking reimbursement for any amount it might be adjudged to pay. The trial court, on December 2, 1963, dismissed the third-party complaint for lack of jurisdiction, reasoning that the claim involved only P6,000 and was filed after the effectivity of Republic Act 3828, which conferred original jurisdiction over such amounts to the municipal court. The next day, December 3, 1963, the trial court rendered judgment ordering the Surety to pay the Republic P5,000 with legal interest from the filing of the complaint and costs, while absolving Mangoba. The Surety appealed, contesting its liability, the trial court’s jurisdiction over the main action, and the dismissal of the third-party complaint.

ISSUE

1. Is the Surety liable on its bond? 2. Did the trial court have jurisdiction over the subject-matter of the main action? 3. Did the trial court have jurisdiction over the third-party complaint?

RULING

1. Yes, the Surety is liable on its bond. The trial court’s finding that the Surety was duly notified to produce Po Kee Kam, who then failed to appear, is supported by the evidence of record (Exhibit B). The Surety’s argument that the conditions for forfeiture were not met is without merit.
2. Yes, the trial court had jurisdiction over the main action. The complaint was filed on June 20, 1963, two days before Republic Act 3828 took effect on June 22, 1963. Jurisdiction, once acquired by the court of first instance at the time of filing, continues until the final termination of the case. The subsequent effectivity of the law broadening municipal court jurisdiction did not divest the trial court of its already-acquired jurisdiction.
3. Yes, the trial court had jurisdiction over the third-party complaint. The third-party complaint is an ancillary suit dependent on the jurisdiction of the court over the main action. Since the trial court validly acquired jurisdiction over the main case, it necessarily had jurisdiction over the incidental third-party complaint. A contrary rule would result in disfavored “split jurisdiction” and multiplicity of suits. The order dismissing the third-party complaint is reversed, and the case is remanded for further proceedings on the third-party complaint.