GR L 5693; (February, 1953) (Digest)
G.R. No. L-5693 February 28, 1953
URBANA D. ANZURES, petitioner, vs. ALTO SURETY & INSURANCE CO., INC., ET AL., respondents.
FACTS
On August 4, 1950, petitioner Urbana D. Anzures filed a case (Civil Case No. 11748) in the Court of First Instance of Manila against Benjamin Aguilar to recover P3,500, with a prayer for a preliminary attachment. The court issued the writ, and two automobiles belonging to Aguilar were levied upon. The attachment was later discharged after Aguilar filed a bond for P3,500 subscribed by respondent Alto Surety & Insurance Co., Inc. The parties subsequently filed a joint petition for a “judgment by compromise,” stating that Aguilar would pay Anzures P3,500, appeal was waived, and there would be no costs. On October 8, 1951, the court approved the compromise and rendered judgment accordingly. Upon motion of the surety company, the respondent judge issued an order cancelling the bond. Anzures’ motion for reconsideration was denied, prompting this petition to set aside the cancellation order and restore the bond.
ISSUE
Whether the respondent judge erred in cancelling the attachment bond filed by the surety company after the court rendered a judgment based on a compromise agreement between the plaintiff and the defendant.
RULING
Yes. The Supreme Court set aside the order cancelling the bond. Under Section 12, Rule 59 of the Rules of Court, a bond filed to discharge an attachment is “to secure the payment to the plaintiff of any judgment he may recover in the action” and stands “in place of the property so released.” Since the Court of First Instance had already rendered a valid judgment sentencing Benjamin Aguilar to pay P3,500 to the petitioner, the order of cancellation was erroneous. The surety company’s contention that the compromise was entered into without its knowledge and consent, making it fraudulent, was without merit. The surety was not a party to the main case and thus need not be served notice of the petition for judgment. The Court noted that while parties could potentially connive via a compromise to prejudice the surety, the same risk exists with a simulated trial, and it is within the surety company’s power to protect itself against such risks. Costs were awarded against the respondent surety company.