G.R. No. L-29822 September 29, 1983
IN THE MATTER OF THE INTESTATE ESTATE OF THE LATE CIRILO JAMANDRE, JOSE T. JAMANDRE, administrator-appellee, vs. LUZON SURETY COMPANY, INC., claimant-appellant.

FACTS

The late Cirilo Jamandre was an indemnitor on an agreement in favor of Luzon Surety Co., Inc. The surety company had posted a redelivery bond for Magdalena Tejico, as principal, in Civil Case No. 3902. The bond, in the amount of P25,820.00, was issued to answer for damages awarded to plaintiff Maria Jamandre Yanson concerning the return of a seized property. Premiums were paid to cover the bond from July 1956 to July 1958. In September 1957, pursuant to a court order for immediate execution of a judgment in favor of Yanson, the property was physically redelivered to her.
The administrator of Jamandre’s estate, Jose T. Jamandre, argued that this redelivery terminated the surety’s undertaking and thus the obligation to pay further premiums. Conversely, Luzon Surety contended that the indemnity agreement remained valid. It argued that since the trial court’s judgment was appealed to the Court of Appeals and ultimately affirmed by the Supreme Court, premiums remained due for the entire duration until final judgment, which Tejico failed to pay despite demands.

ISSUE

Whether the redelivery bond was terminated by the physical return of the property to the plaintiff in 1957, or whether the bond remained in force coterminous with the final resolution of the case.

RULING

The Supreme Court ruled in favor of Luzon Surety, holding the bond was coterminous with the case. The Court examined the bond’s specific undertaking under Section 5, Rule 60 of the Rules of Court. The bond obligated the surety not only for the delivery of the property if adjudged but also for “the payment of such sum… as may be recovered against the defendant-intervenor, and the costs of the action.” The physical return of the property in 1957 did not extinguish the entire obligation because the bond also secured the payment of any monetary sum ultimately recovered against the defendant.
Since the case was appealed and the judgment was only finally affirmed by the Supreme Court at a later date, the bond necessarily remained in force until that final judgment to secure that potential monetary liability. Consequently, the indemnity agreement executed by Cirilo Jamandre, which secured the payment of premiums to the surety company, was also valid for that entire period. The bond’s life was tied to the existence of the case it secured, not merely to the physical possession of the property. Therefore, the estate of Cirilo Jamandre was ordered to pay the surety company the premiums due on the bond up to the entry of the final judgment in the civil case.