Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83701:57839&catid=1588&Itemid=566
Timestamp: 2019-04-23 10:03:11+00:00

Document:
G.R. No. 189358, October 08, 2014 - CENTENNIAL GUARANTEE ASSURANCE CORPORATION, Petitioner, v. UNIVERSAL MOTORS CORPORATION, RODRIGO T. JANEO, JR., GERARDO GELLE, NISSAN CAGAYAN DE ORO DISTRIBUTORS, INC., JEFFERSON U. ROLIDA, AND PETER YAP, Respondents.
CENTENNIAL GUARANTEE ASSURANCE CORPORATION, Petitioner, v. UNIVERSAL MOTORS CORPORATION, RODRIGO T. JANEO, JR., GERARDO GELLE, NISSAN CAGAYAN DE ORO DISTRIBUTORS, INC., JEFFERSON U. ROLIDA, AND PETER YAP, Respondents.
Assailed in this petition for review on certiorari1 are the Decision2 dated February 25, 2009 and the Resolution3 dated August 14, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 02459-MIN which affirmed, in part, the Order4 dated May 13, 2008 of the Regional Trial Court of Cagayan de Oro City, Branch 39 (RTC) allowing the execution pending appeal of the Decision5 dated October 31, 2007 (October 31, 2007 Decision) of the RTC in Civil Case No. 2002-058, but limiting the amount of petitioner Centennial Guarantee Assurance Corporation’s (CGAC) liability to only P1,000,000.00.
CGAC assailed the RTC’s January 16, 2008 Order before the CA through a petition for certiorari, docketed as CA-G.R. SP No. 02459-MIN, questioning the existence of good reasons to warrant the grant of execution pending appeal and the propriety of enforcing it against one which is not the losing party in the case but a mere bondsman whose liability is limited to the surety bond it issued.
Aggrieved, CGAC filed a motion for reconsideration22 which was, however, denied in a Resolution23 dated August 14, 2009, hence, this petition.
The central issues in this case are: (a)whether or not good reasons exist to justify execution pending appeal against CGAC which is a mere surety; and (b) whether or not CGAC’s liability on the bond should be limited to P500,000.00.
The factual findings that NSSC is under a state of rehabilitation and had ceased business operations, taken together with the information that NSSC President and General Manager Orimaco had permanently left the country with his family, constitute such superior circumstances that demand urgency in the execution of the October 31, 2007 Decision because respondents now run the risk of its non-satisfaction by the time the appeal is decided with finality. Notably, as early as April 22, 2008, the rehabilitation receiver had manifested before the rehabilitation court the futility of rehabilitating NSSC because of the latter’s insincerity in the implementation of the rehabilitation process.28 Clearly, respondents’ diminishing chances of recovery from the favorable Decision is a good reason to justify immediate execution; hence, it would be improper to set aside the order granting execution pending appeal.
That CGAC’s financial standing differs from that of NSSC does not negate the order of execution pending appeal. As the latter’s surety, CGAC is considered by law as being the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter, and their liabilities are interwoven as to be inseparable.29 Verily,in a contract of suretyship, one lends his credit by joining in the principal debtor’s obligation so as to render himself directly and primarily responsible with him, and without reference to the solvency of the principal.30 Thus, execution pending appeal against NSSC means that the same course of action is warranted against its surety, CGAC. The same reason stands for CGAC’s other principal, Orimaco, who was determined to have permanently left the country with his family to evade execution of any judgment against him.
Now, going to the second issue as above-stated, the Court resolves that CGAC’s liability should – as the CA correctly ruled – be confined to the amount of P1,000,000.00, and not P500,000.00 as the latter purports.
In this case, the RTC, in view of the improvident issuance of the April 2, 2002 Writ of Preliminary Injunction,adjudged CGAC’s principals, NSSC and Orimaco, liable not only for damages as against NCOD, Rolida, and Yap but also as against UMC.Asmay be gleaned from the dispositive portion of the RTC Decision, the amount adjudged to the former group was P500,000.00,34 while it was found – this time, contained in the body of the same decision – that damages in the amount P4,199,355.00 due to loss of sales was incurred by UMC in the year 2002,35 or the year in which the latter was prevented from selling their products pursuant to the April 2, 2002 Writ of Preliminary Injunction. Since CGAC is answerable jointly and severally with NSSC and Orimaco for their liabilities to the above-mentioned parties for all damages caused by the improvident issuance of the said injunctive writ, and considering that the total amount of damages as above-stated evidently exhausts the full P1,000,000.00 amount of the injunction bond, there is perforce no reason to reverse the assailed CA Decision even on this score.
WHEREFORE, the petition is DENIED. The Decision dated February 25, 2009 and the Resolution dated August 14, 2009 of the Court of Appeals in CA-G.R. SP No. 02459-MIN are hereby AFFIRMED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, Perez, and Perlas-Bernabe, JJ., concur.
2 Id. at 45-56. Penned by Associate Justice Mario V. Lopez with Associate Justices Romulo V. Borja and Elihu A. Ybañez, concurring.
3 Id. at 58-59. Penned by Associate Justice Elihu A. Ybañez with Associate Justices Romulo V. Borja and Ruben C. Ayson, concurring.
4 See Writ of Execution Pending Appeal; id. at 89-90.
5 Id. at 122-177. Penned by Judge Downey C. Valdevilla.
6 See id. at 46 and 122.
9 See id. at 163.
10 See id. at 164.
13 See id. at 162-165.
21 See id. at 54.
24 See Archinet International, Inc. v. Becco Philippines, Inc., 607 Phil. 829, 843 (2009).
26 See Government Service Insurance System v. Prudential Guarantee and Assurance, Inc., G.R. Nos. 165585 and 176982, November 20, 2013, 710 SCRA 337, 350.
27 See Phil. Nails & Wires Corp. v. Malayan Insurance Co., Inc., 445 Phil. 465, 473-477 (2203). See also Philippine National Bank v. Puno, 252 Phil. 234, 242-243 (1989).
28 See rollo, pp. 216-217.
29 See Lim v. Security Bank Corporation, G.R. No. 188539, March 12, 2014; citations omitted.
30Palmares v. CA, 351 Phil. 664, 681 (1998).
31 Sec. 4. x x x.
32 369 Phil. 641 (1999).
33 Id. at 654; citation omitted.
34 See rollo, p. 177.
35 See id. at 164.

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