FIRST DIVISION
G.R. No. 192099, July 08, 2015
PAULINO M. EJERCITO, JESSIE M. EJERCITO AND JOHNNY D. CHANG, Petitioners, v. ORIENTAL ASSURANCE CORPORATION, Respondent.
D E C I S I O N
SERENO, C.J.:
This is a Petition for Review on Certiorari1 filed by Paulino M. Ejercito, Jessie M. Ejercito and Johnny D. Chang (petitioners) under Rule 45 of the 1997 Rules of Civil Procedure assailing the Court of Appeals (CA) Decision dated 2 October 20092 and Resolution dated 14 April 20103 in CA-G.R. CV No. 90828. The Special Third Division of the CA reversed and set aside the Regional Trial Court (RTC) Decision in Civil Case No. 01-101999:
WHEREFORE, premises considered, the present appeal is hereby GRANTED. The Decision dated February 2, 2007 of the Regional Trial Court of Manila, Branch 36 in Civil Case No. 01-101999 is hereby SET ASIDE.
A new judgment is hereby entered ordering the defendants-appellees Merissa C. Somes, Paulino M. Ejercito, Jessie M. Ejercito and Johnny D. Chang jointly and severally liable to pay plaintiff-appellant Oriental Assurance Corporation the following sums:1. The principal amount of P3,000,000.00 with interest at the rate of 12% per annum from the time of the filing of the complaint until the same shall have been fully paid;SO ORDERED.4ChanRoblesVirtualawlibrary
2. Attorney's fees in the amount of P30,000.00; and
3. Costs of suit.
Whether or not the Honorable Court of Appeals erred in ruling that petitioners are liable to indemnify the respondent under the deed of indemnity considering that petitioners did not give their consent to be bound thereby beyond the one (1) year effectivity period of the original surety bond.
Whether or not the Honorable Court of Appeals erred in ruling that petitioners are liable to pay the respondent attorney's fees considering that petitioners did not breach their obligation under the deed of indemnity to indemnify the respondent during the one (1) year effectivity period of the original surety bond.5ChanRoblesVirtualawlibrary
The Deed of Indemnity contains the following stipulations:chanRoblesvirtualLawlibraryClearly, as far as respondent is concerned, petitioners have expressly bound themselves to the contract, which provides for the terms granting authority to the Company to renew the original bond. The terms of the contract are clear, explicit and unequivocal. Therefore, the subsequent acts of the Company, through Somes, that led to the renewal of the surety bond are binding on petitioners as well.
INDEMNITY: - To indemnify the COMPANY for any damages, payments, advances, prejudices, loss, costs and expenses of whatever kind and nature, including counsel or attorney's fees, which the Company may at any time, sustain or incur, as a consequence of having executed the above-mentioned Bond, its renewals, extensions, modifications or substitutions and said attorney's fees shall not be less than fifteen (15%) per cent of the amount claimed by the Company in each action, the same to be due and payable, irrespective of whether the case is settled judicially or extrajudicially.
x x x x
MATURITY OF OUR OBLIGATIONS AS CONTRACTED HEREWITH: - The said indemnities will be paid to the COMPANY as soon as demand is received from the Creditor, or as soon as it becomes liable to make payment of any sum under the terms of the above-mentioned Bond, its renewals, extension, modifications or substitutions, whether the said sum or sums or part thereof, have been actually paid or not. We authorize the COMPANY to accept in any case and at its entire discretion, from any of us, payment on account of the pending obligation, and to grant extensions to any of us, to liquidate said obligations, without necessity of previous knowledge or consent from the obligors.
x x x x
INCONTESTABILITY OF PAYMENTS MADE BY THE COMPANY:chanRoblesvirtualLawlibrary
-- Any payment or disbursement made by the COMPANY on account of the above-mentioned Bond, its renewals, extensions, modifications or substitutions either in the belief that the Company was obligated to make such payment or in the belief that said payment was necessary in order to avoid greater losses or obligation for which the company might be liable by virtue of the terms of the above-mentioned Bond, its renewals, extensions, modifications or substitutions shall be final and will not be disputed by the undersigned who jointly and severally bind themselves to indemnify the COMPANY of any and all such payments as stated in the preceding clauses.
x x x
WAIVER: — The undersigned hereby waive all the rights, privileges, and benefits that they have or may have under Articles 2077, 2078, 2079, 2080 and 2081 of the Civil Code.
x x x
RENEWALS, ALTERATIONS AND SUBSTITUTIONS: - The undersigned hereby empower and authorize the Company to grant or consent to the granting of, any extension, continuation, increase, modifications, change, alteration and/or renewal of the original bond herein referred to, and to execute or consent to the execution of any substitution for said bond with the same or different conditions and parties, and the undersigned hereby hold themselves jointly and severally liable to the Company for the original bond hereinabove mentioned or for any extension, continuation, increase, modification, change, alteration, renewal or substitution thereof until the full amount including principal interests, premiums, costs and other expenses due to the Company thereunder is fully paid up.8 (Emphasis on the original)
Endnotes:
1Rollo, pp. 9-26.
2 Id. at 35-48, penned by then CA Associate Justice Martin S. Villarama, Jr. (now a member of this Court), concurred in by Associate Justices Rosalinda Asuncion-Vicente and Magdangal M. de Leon.
3 Id. at 49-50, penned by CA Associate Justice Magdangal M. de Leon, concurred in by Associate Justices Rosalinda Asuncion-Vicente and Francisco P. Acosta.
4 Supra note 2 at 47.
5Rollo, p. 15, Petition for Review on Certiorari.
6Verendia v. Court of Appeals, G.R. Nos. 76399 and 75605, 22 January 1993, 217 SCRA 417, citing Pacific Banking Corporation v. Court of Appeals, 250 Phil. 1 (1988).
7Abella v. Court of Appeals, G.R. No. 107606, 20 June 1996, 257 SCRA 482.
8Rollo, pp. 44-45, CA Decision in CA G.R. CV No. 90828.
9 Id. at 41, citing the RTC Decision.
10Palmares v. Court of Appeals, G.R. No. 126490, 351 Phil. 664-691 (1998).
11Titan Construction Corp. v. Uni-Field Enterprises, Inc., 546 Phil. 14, 20.
12 Supra note 10 at 666, 680.
13 Id., citing Churchill v. Bradley, 5 A. 189.