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    STRONGHOLD INSURANCE CO. INC. vs. CA

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    Joan Eunise Fernandez
    1) Leisure Club filed a replevin case against Northern Motors seeking recovery of office equipment. Leisure Club posted a P42,000 replevin bond issued by Stronghold Insurance to obtain possession of the properties. 2) Northern Motors was awarded damages by the lower court after Leisure Club failed to appear. Northern Motors then filed a motion holding Stronghold liable under the replevin bond. 3) The Court ruled that Stronghold is liable for damages under the terms of the replevin bond, as the bond ensured return of properties or payment of damages awarded, and all conditions for liability under the bond were met.

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    STRONGHOLD INSURANCE CO. INC. vs. CA

    Uploaded by

    Joan Eunise Fernandez
    855 views2 pages
    1) Leisure Club filed a replevin case against Northern Motors seeking recovery of office equipment. Leisure Club posted a P42,000 replevin bond issued by Stronghold Insurance to obtain possession of the properties. 2) Northern Motors was awarded damages by the lower court after Leisure Club failed to appear. Northern Motors then filed a motion holding Stronghold liable under the replevin bond. 3) The Court ruled that Stronghold is liable for damages under the terms of the replevin bond, as the bond ensured return of properties or payment of damages awarded, and all conditions for liability under the bond were met.

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    1) Leisure Club filed a replevin case against Northern Motors seeking recovery of office equipment. Leisure Club posted a P42,000 replevin bond issued by Stronghold Insurance to obtain possession of the properties. 2) Northern Motors was awarded damages by the lower court after Leisure Club failed to appear. Northern Motors then filed a motion holding Stronghold liable under the replevin bond. 3) The Court ruled that Stronghold is liable for damages under the terms of the replevin bond, as the bond ensured return of properties or payment of damages awarded, and all conditions for liability under the bond were met.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    855 views2 pages

    STRONGHOLD INSURANCE CO. INC. vs. CA

    Uploaded by

    Joan Eunise Fernandez
    1) Leisure Club filed a replevin case against Northern Motors seeking recovery of office equipment. Leisure Club posted a P42,000 replevin bond issued by Stronghold Insurance to obtain possession of the properties. 2) Northern Motors was awarded damages by the lower court after Leisure Club failed to appear. Northern Motors then filed a motion holding Stronghold liable under the replevin bond. 3) The Court ruled that Stronghold is liable for damages under the terms of the replevin bond, as the bond ensured return of properties or payment of damages awarded, and all conditions for liability under the bond were met.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Topic SURETYSHIP

    Case No. G.R. No. 89020 / May 5, 1992


    Case Name STRONGHOLD INSURANCE CO. INC. vs. CA
    Ponente PARAS, j.

    RELEVANT FACTS
     Northern Motors Inc. and Macronics Marketing entered into a lease agreement wherein Northern
    Motors leased certain premises to Macronics.
     Macronics failed to pay its bills to Northern Motors so the latter was forced to terminate the lease.
    Northern Motors was forced to sell off Macronics’ properties in an auction sale to cover for unpaid
    liabilities. Northern Motors was the buyer. Macronics was duly notified of the sale.
     On March 21, 1985, Leisure Club Inc., sister company of Macronics, filed a case for replevin and
    damages against Northern Motors. It sought the recovery of certain office furniture and equipment.
     Lower court ordered the delivery of the subject properties to Leisure Club subject to the posting of the
    requisite bond under Rule 60, Sec 2 of ROC.
     Leisure Club posted a replevin bond in the amount of P42,000 issued by Stronghold Insurance.
     The lower court issued the writ of replevin. Leisure Club then took possession of the properties.
     Northern Motors filed a counterbond for the release of the properties. However, Leisure Club was never
    heard of again. The latter failed to appear in the pre-trial and was declared non-suited.
     Lower court decided in favor of Northern Motors, dismissing Leisure Club’s complaint and ordering it to
    pay for damages.
     On July 3, 1986, Northern Motors filed a Motion for Issuance of Execution Against Bond of Plaintiff’s
    Surety, which was treated by the lower court as an application for damages against the replevin bond.
     Stronghold Insurance opposed arguing, among others, that:
    o The motion for a writ of execution is not the proper remedy; it should have been an application
    against the bond.
    o It is not a party to the case and that the decision clearly became final and executory and,
    therefore, is no longer available on the bond.
     Lower court held Stronghold liable under its surety bond for damages awarded to Northern Motors.
     CA affirmed.

    ISSUE AND RATIO DECIDENDI

    Issue Ratio
    W/N Stronghold is liable for YES.
    damages awarded to 1. Stronghold never denied that it issued a replevin bond. Under the
    Northern Motors? terms of said bond, Stronghold together with Leisure Club solidarily
    bound themselves in the sum of P42,000 –
    (a) For the prosecution of action,
    (b) For the return of the property to the defendant if the return
    thereof be adjudged, and
    (c) For the payment of such sum as may in the cause be
    recovered against the plaintiff and the costs of the action.
    2. In this case, all the necessary conditions for proceeding against the
    bond are present:
    (a) Leisure Club, in bad faith, failed to prosecute the action, and
    after relieving the property, it promptly disappeared,
    (b) The subject property disappeared with Leisure, despite a
    court order for their return, and
    (c) A reasonable sum was adjudged to be due to Northern
    Motors, by way of actual and exemplary damages, attorney’s
    fees and costs of suit.
    3. Stronghold can’t simply dissociate itself from Leisure and disclaim
    liability vis-à-vis the findings made in the decision of the lower court.
    Under Sec. 2, Rule 60 of ROC the bond it filed is to ensure “the return
    of the property to the defendant if the return thereof be adjudged,
    and for the payment to the defendant of such sum as he may recover
    from the plaintiff in the action.”
    4. Moreover, the obligation of Stronghold under the bond is specific, i.e.
    the payment of such sum as may in the cause be recovered against
    the plaintiff, and the costs of the action.
    5. Hence, Stronghold must pay Northern Motors for damages.

    RULING

    WHEREFORE, the petition is DENIED for lack of merit. No costs.

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