G.R. No. L-2981; March 23, 1950
Visayan Surety & Insurance Corporation, petitioner, vs. Victoria Pascual and Oscar Castelo, Judge of the Court of First Instance of Manila, respondents.

FACTS

Yu Sip filed a replevin action against Victoria Pascual to recover a truck and secured a writ of replevin by posting a P4,000 bond from Visayan Surety & Insurance Corporation. The trial court ruled in favor of Pascual, declaring her the lawful owner, and ordered Yu Sip to return the truck or pay its value (P2,300) plus damages of P30 daily from January 6, 1947, until return or full payment. The Court of Appeals affirmed. The sheriff later returned the truck to Pascual, but Yu Sip had no property to satisfy the damages. Pascual then sought execution against the surety bond. The surety company opposed, arguing it was not notified of the claim for damages as required under the Rules of Court. The trial court granted execution against the surety, prompting this certiorari petition.

ISSUE

Whether a judgment for damages against the principal (Yu Sip) in a replevin case is binding and executable against the surety (Visayan Surety) without prior notice to the surety of the claim for damages.

RULING

No. The Supreme Court set aside the writ of execution against the surety. While the bond covers both the return of the property and payment of damages awarded, the surety is entitled to due notice of the claim for damages under Section 20, Rule 59, in relation to Section 10, Rule 62, of the Rules of Court. Here, the surety was not notified of Pascual’s application for damages. Consequently, the judgment against Yu Sip cannot be executed against the surety without affording it an opportunity to be heard on the reality or reasonableness of the damages. The case was remanded for further proceedings where the surety may contest the damages, with the hearing limited to new defenses not previously raised by the principal. Costs were awarded against respondent Pascual.

AI Generated by Armztrong.