G.R. No. L-8998; March 19, 1914
JOSE FLORENDO, plaintiff-appellee, vs. EUSTAQUIO P. FOZ, defendant-appellee. JUAN CALVO and LUIS FOZ, sureties of the defendant Eustaquio P. Foz, appellants.

FACTS:
On July 9, 1910, Jose Florendo obtained a judgment against Eustaquio P. Foz for the specific performance of a contract of sale. The judgment ordered Foz to deliver certain lands to Florendo and pay rents from July 1, 1909, until compliance. It also directed that from a sum of P4,000 deposited in the provincial treasury, the mortgage debt owed by Foz to the Roman Catholic Apostolic Church of Vigan be paid, with the balance to be given to Foz. Foz appealed the judgment. To stay execution, he filed an appeal bond for P2,000 with Juan Calvo and Luis Foz as sureties, who bound themselves jointly and severally for the fulfillment of the judgment if affirmed. The Supreme Court affirmed the judgment. Subsequently, the trial court ordered the provincial treasurer to release the P4,000 to the court clerk, who then paid the church the mortgage amount (P2,920.59). The balance of P1,079.41 was later delivered to the sheriff of Ilocos Sur in partial satisfaction of a separate judgment against Foz from the Court of First Instance of Manila. Florendo then moved for execution to recover the remaining sums due from Foz. After an execution against Foz was returned nulla bona, Florendo sought execution against the sureties. The sureties opposed, arguing that the payment of the P1,079.41 to the sheriff for another judgment was illegal and prejudiced them, as it deprived Foz of resources that could have reduced their liability. They also contended the bond was void because Foz was insolvent at the time of its execution. The trial court denied their motions and ordered execution against the sureties up to P2,000.

ISSUE:

2. Whether the insolvency of the principal debtor (Foz) at the time of the bond’s execution rendered the bond void.

RULING:
The Supreme Court AFFIRMED the trial court’s order for execution against the sureties.

1. On the first issue: The Court held that the sureties’ obligation was to ensure the fulfillment of the judgment in favor of the appellee (Florendo), not to secure the benefits of the judgment for the appellant (Foz). The bond guaranteed that the judgment would be satisfied if affirmed. The payment of the balance to satisfy another judgment, while potentially diminishing Foz’s resources, did not breach the condition of the bond or release the sureties. Their expectation that the balance would be available to Foz was merely a hope, not a legal right. The sureties assumed the risk that such funds might be applied to other obligations. Their grievance, if any, could not be remedied in this proceeding.

2. On the second issue: The Court found no legal basis to void an appeal bond due to the appellant’s insolvency at the time of execution. On the contrary, the very purpose of an appeal bond is to protect the appellee from the appellant’s insolvency and to ensure the judgment can be executed.

Arellano, C.J., Carson, Trent, and Araullo, JJ., concur.