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Imperial Insurance v. De Los Angeles Imperial Insurance v. De Los Angeles
I. RECIT-READY SUMMARY
The plaintiffs (Rosa Reyes, Pedro Reyes and Consolacion Reyes) in two separate
civil actions against a common defendant (Felicisimo Reyes) were able to obtain
preliminary writs of attachment whereby properties of the defendant were
attached.
However, the attachments were dissolved upon the execution by defendant of a
counterbond where the petitioner Imperial Insurance, Inc., as surety, bound
itself "jointly and severally" with the defendant to satisfy any judgment that
may be rendered against the latter in the said civil cases.
Consequently, when judgment was rendered against the defendant after a joint trial
of the cases, and the writs of execution against him were returned unsatisfied, the
plaintiffs led a motion for recovery on the counterbonds. and, in a letter,
demanded payment of the accounts from the surety.
The trial court granted the motion over the opposition of the surety company,
and a writ of execution was issued.
In the meantime, the surety moved for reconsideration of the order granting
plaintiffs' motion to recover on the counterbond. This was denied leading to a
petition for certiorari with the Court of Appeals. The petition was dismissed.
Hence, this recourse. Petitioner surety company assailed the trial court's
issuance of the writ of execution against the counterbond
1.) without prior notice of hearing and
2.) without prior exhaustion of defendant's properties.
Issue: W/N the creditors can directly go after Imperial without exhausting first
the properties of Felicisimo? – YES.
The SC held that the requirements of notice and hearing to charge the counterbond
under Section 17, Rule 57 of the Rules of Court had been satisfactorily complied
with as shown by the records; that the rule that the counterbond contemplated in
the said Section 17 is an ordinary guaranty, cannot apply where the surety
G.R. NO: L-28030. January 18, 1982
ARTICLE; TOPIC OF CASE: Art. 2059, Exception to the benefits of Excussion
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bound itself "jointly and severally" with the defendant; and that under the same
Section 17, the liability of the surety on a counterbond automatically attaches
and a writ of execution may immediately be issued once the requirements in the said
provision of the Rules have been met.
DOCTRINE: In accordance with Article 2059, par. 2 of the CC, excussion
(previous exhaustion of the property of the debtor) shall not take place "if he (the
guarantor) has bound himself solidarily with the debtor.'' Section 17, Rule 57 of
the Rules of Court cannot be construed that an execution against the debtor be first
returned unsatisfied even if the bond were a solidary one. NO EXCUSSION
WHERE SURETY BOUND HIMSELF SOLIDARILY WITH PRINCIPAL
DEBTOR
I. FACTS OF THE CASE
Imprial Insurance, Inc.- surety
Felicisimo Reyes- debtor, principal of Imperial
Rosa Reyes, Pedro Reyes, Consolacion Reyes- creditors (they are all
Reyeses, the case did not mention their relationship. To avoid
confusion, I used their first names)
This is a case that came from 2 civil cases. Respondent Rosa Reyes was a plaintiff
in a previous against Felicisimo Reyes, a writ of preliminary attachment and levied
upon all the properties of the defendant Felicisimo. In the 2nd case, Pedro and
Consolacion also obtained a writ of preliminary attachment and levied upon all the
properties of Felicisimo.
For the dissolution of the attachments, petitioner Imperial Insurance, Inc. as
surety and Felicisimo Reyes as principal, posted a defendant's bond for dissolution
of attachment' in the amount of P60,000.00 in Civil Case No. Q-5213 (this is the
case with Rosa) and another bond of the same nature in the amount of P40,000.00 in
Civil Case No. Q-5214 (Case with Pedro and Consolacion).
The civil cases were jointly tried and decision was in favor of Rosa, Pedro and
Consolacion.
PONENTE: Fernandez, J.
DIGEST MAKER: Chanelle
 B2022 ANNOTATED
Imperial Insurance v. De Los Angeles Imperial Insurance v. De Los Angeles
Judge de los Angeles, issued the writs of execution of judgment in said cases.
However, the Provincial Sheriff of Bulacan returned the writs of execution
'unsatisfied in whole or in part.' (Basically, they can’t go after Felicisimo’s
properties since it was “unsatisfied” so now they are going after the surety)
On September 9,1966, Rosa, Pedro and Consolacion led a 'motion for recovery on
the surety bonds.' Thereafter, said private respondents, thru counsel, sent a letter of
demand upon petitioner Imperial asking to pay them the accounts on the counter-
bonds.
On September 24,1966, petitioner Imperial led its 'opposition' to the private
respondents' 'Motion for recovery on the surety bonds.’
Judge De Los Angeles issued an order granting the issuance of the writ of
execution against the bonds led by the petitioner.
Thus, Imperial Insurance filed a petition for certiorari with prayer for preliminary
injunction with the Court of Appeals to restrain the enforcement of the writ of
execution.
Hence, this petition for certiorari to review the decision of the CA.
II. ISSUE/S
Whether or not CA gravely erred in holding that Rosa, Pedro and Consolacion
(private respondents) who OBTAINED a judgment against defendant (Filicisimo)
may legally choose ‘TO GO DIRECTLY’ after the surety (Imperial Insurance) in a
counterbond (Bond to dissolve attachment) without prior exhaustion of the
defendant’s properties
In short, W/N the creditors can directly go after Imperial without exhausting first the
properties of Felicisimo? – YES.
I. RATIO/LEGAL BASIS
The Court ruled that the rule (Rule 57, Sec.17 of the Rules of Court where in
an ordinary guaranty the sureties assume a SUBSIDIARY LIABILITY) cannot
G.R. NO: L-28030. January 18, 1982
ARTICLE; TOPIC OF CASE: Art. 2059, Exception to the benefits of Excussion
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apply to a counterbond where the surety bound itself “jointly and severally”
with the defendant as in the present case.
Clearly, the petitioner, the Imperial Insurance, Inc., had bound itself solidarily with
the principal, the deceased defendant Felicisimo V. Reyes. In accordance with
Article 2059, par. 2 of the Civil Code of the Philippines, excussion (previous
exhaustion of the property of the debtor) shall not take place "if he (the guarantor)
has bound himself solidarily with the debtor." Section 17, Rule 57 of the Rules of
Court cannot be construed that an "execution against the debtor be first returned
unsatisfied even if the bond were a solidary one, for a procedural rule may not
amend the substantive law expressed in the Civil Code, and further would nullify the
express stipulation of the parties that the surety's obligation should be solidary with
that of the defendant."
Hence the petitioner, cannot escape liability on its counterbonds based on the second
error assigned.
I. DISPOSITION
WHEREFORE, the decision of the Court of Appeals promulgated on July 19, 1967
in CA-G.R. No. 38824-R is affirmed and the order of the respondent Judge dated
January 19, 1967 and all writs or orders issued in consequence or in pursuance
thereof are also affirmed. The court of origin is hereby ordered to proceed with the
execution against the petitioner surety, the Imperial Insurance, Inc., with costs
against said petitioner.
II. Notes
(Just in case sir makes us read or ask about the agreement between Felicisimo
and Imperial)
Counterbond executed by Felicisimo, as principal and the petitioner, Imperial
Insurance, Inc. as solidary gurantor in the civil case against Rosa Reyes.
"WHEREFORE, We, FELICISIMO V. REYES, of legal age, Filipino, and
with postal address at San Jose, San Miguel, Bulacan and/or 1480
Batangas Street, Sta. Cruz, Manila, as PRINCIPAL and THE IMPERIAL
INSURANCE, INC., a corporation duly organized and existing under the
laws of the Philippines, as SURETY, in consideration of the dissolution of
PONENTE: Fernandez, J.
DIGEST MAKER: Chanelle
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Imperial Insurance v. De Los Angeles Imperial Insurance v. De Los Angeles
said attachment, hereby JOINTLY AND SEVERALLY, bind ourselves Counterbond- a bond of indemnification given to one who has become security for
in the sum of SIXTY THOUSAND PESOS ONLY (P60,000.00), another.
Philippine Currency, under the condition that in case the plaintiff recovers -a bond to secure one who has given bond for another
judgment in the action, the defendant shall pay the sum of SIXTY
THOUSAND PESOS (P60,000.00), Philippine Currency, being the
amount released for attachment, to be applied to the payment of the
judgment, or in default thereof, the Surety will, on demand, pay to the
plaintiff said amount of SIXTY THOUSAND PESOS ONLY
(P60,000.00), Philippine Currency. (Emphasis supplied).
"Manila, Philippines ,June 30, 1960."

Counterbond executed by Felicisimo, as principal and the petitioner, Imperial

Insurance, Inc. as solidary gurantor in the civil case against Pedro and
Consolacion Reyes.

"WHEREFORE, We, FELICISIMO V. REYES, of legal age, Filipino, and

with postal address at San Jose, San Miguel, Bulacan, and/or 1480
Batangas Street, Sta. Cruz, Manila, as PRINCIPAL and THE IMPERIAL
INSURANCE, INC., a corporation duly organized and existing under the
laws of the Philippines, as SURETY, in consideration of the dissolution of
said attachment, hereby JOINTLY and SEVERALLY, bind ourselves
in the action the defendant shall pay the sum of FORTY THOUSAND
PESOS ONLY (40,000.00), Philippine Currency, being the amount
released for attachment, to be applied to the payment of the judgment, or
in default thereof, the Surety will, on demand, pay to the plaintiffs said
amount of FORTY THOUSAND PESOS ONLY (P40,000.00), Philippine
Currency. (Capitalizations supplied).
"Manila, Philippines, June 30th, 1960.

Sec. 17, Rule 57 of the Rules of Court which provides:

"Sec. 17. When execution returned unsatis ed, recovery had upon bond. —
If the execution be returned unsatis ed in whole or in part, the surety or
sureties on any counterbond given pursuant to the provisions of this rule to
secure the payment of the judgment shall become charged on such
counterbond, and bound to pay to the judgment creditor upon demand, the
amount due under the judgment, which amount may be recovered from
such surety or sureties after notice and summary hearing in the same
action."

G.R. NO: L-28030. January 18, 1982 PONENTE: Fernandez, J.

ARTICLE; TOPIC OF CASE: Art. 2059, Exception to the benefits of Excussion DIGEST MAKER: Chanelle