G.R. No. L-9343. December 29, 1959.
MANILA SURETY AND FIDELITY CO., INC., plaintiff-appellee, vs. VALENTIN R. LIM, defendant-appellant.

FACTS

This case stems from two previous civil cases (Nos. 487 and 7674) in the Court of First Instance of Rizal. In those cases, Ireneo Facundo obtained preliminary injunctions against Valentin R. Lim, posting bonds issued by Manila Surety & Fidelity Co., Inc. (the appellee). The main cases were eventually dismissed. After the dismissals, and despite the decisions having become final without awarding damages for the injunctions, the trial court, upon Lim’s motion, allowed him to prove damages, ordered the confiscation of the bonds, and directed Manila Surety to pay Lim P1,000. Writs of execution were issued. In compliance with a writ, Manila Surety paid the Sheriff P1,105.01, of which P1,000 was delivered to Lim. Subsequently, the Supreme Court, in a prior decision (G.R. Nos. L-2717, 2718, and 2767), declared those writs of execution null and void because damages from a preliminary injunction must be claimed and awarded in the final judgment, which was not done. After this Supreme Court ruling, Manila Surety demanded reimbursement from Lim for the P1,000, but he refused. Manila Surety then filed the present action in the Court of First Instance of Manila to recover the amount.

ISSUE

1. Whether the payment made by Manila Surety to Lim was voluntary, precluding its recovery.
2. Whether the action for recovery is based on solutio indebiti.
3. Whether the Court of First Instance of Manila had jurisdiction over the action for recovery.

RULING

The Supreme Court affirmed the lower court’s decision ordering Lim to reimburse Manila Surety.
1. The payment was not voluntary. It was made under the coercive process of a writ of execution issued at Lim’s instance. The Court held that were it not for this writ, Manila Surety would not have paid. The payment was compelled while the right to damages was still pending final determination by the Supreme Court.
2. The action is not based on solutio indebiti (payment by mistake). The basis for recovery is that the judgment (the order awarding damages and confiscating the bond) upon which the payment was made was declared null and void by the Supreme Court. Consequently, the execution and the payment made pursuant to it were also null and void. The award of damages was illegal as it violated the Rules of Court, which require such damages to be adjudicated in the final judgment.
3. The Court of First Instance of Manila had jurisdiction. The action is for a sum of money. Under the Rules of Court, such an action may be commenced where the defendant resides or may be found, or where the plaintiff resides, at the plaintiff’s election. The complaint averred that all parties were residents of Manila.