Doctrine: In the case of Philippine American General Insurance Co., Inc.
v. Mutuc, the Court held that an agreement whereby the sureties bound themselves
to be liable in case of an extension or renewal of the bond, without the
necessity of executing another indemnity agreement for the purpose and without
the necessity of being notified of such extension or renewal, is valid; and
that there is nothing in it that militates against the law, good customs, good
morals, public order or public policy.
Facts:
The petitioner Autocorp Group, secured an ordinary re-export
bond, Instrata Bond No. 5770, from private respondent Intra Strata Assurance
Corporation (ISAC) in favor of public respondent Bureau of Customs (BOC), in
the amount of P327,040.00, to guarantee the re-export of one unit of Hyundai
Excel 4-door 1.5 LS and/or to pay the taxes and duties.
The petitioner also obtained another re-export bond, Instrata
Bond No. 7154, from ISAC in favor of the BOC, in the amount of P447,671.00,
which was eventually increased to P707,609.00 per bond. Thereafter, petitioner
executed and signed two Indemnity Agreements with identical stipulations in
favor of ISAC, agreeing to act as surety of the subject bonds
The undersigned agree at all times to jointly and severally
indemnify the COMPANY and keep it indemnified and hold and save it harmless
from and against any and all damages, losses, costs, stamps, taxes, penalties,
charges and expenses of whatsoever kind including counsel or attorney's fee.
In sum, ISAC issued the
subject bonds to guarantee compliance by the petitioner with their undertaking
with the BOC to re-export the imported vehicles within the given period and pay
the taxes and/or duties. In turn, petitioners agreed, as surety, to indemnify
ISAC for the liability the latter may incur on the said bonds.
Meanwhile, the Autocorp Group failed to re-export the items
guaranteed by the bonds and/or liquidate the entries or cancel the bonds, and
pay the taxes and duties pertaining to the said items despite repeated demands.
ISAC filed with the RTC on 24 October 1995 an action against
petitioners to recover the sum of P1,034,649.00,... plus 25% thereof or
P258,662.25 as attorney's fees.
The RTC rendered its Decision ordering petitioner to pay ISAC
and/or the BOC the face value of the subject bonds in the total amount of
P1,034,649.00, in which, the Court of Appeals affirmed the lower court decision
with modification of Attorney’s fee.
Issue: Whether or not the petitioner is jointly liable when
amendments were introduced, without his consent and approval?
Held:
The subject bonds, Instrata Bonds No. 5770 and No. 7154, became
due and demandable upon the failure of petitioner Autocorp Group to comply with
a condition set forth in its undertaking with the BOC, specifically to
re-export the imported vehicles within the period of six months... from their
date of entry. Since it issued the subject bonds, ISAC then also became liable
to the BOC. At this point, the Indemnity Agreements already give ISAC the right
to proceed against petitioners via court action or otherwise.
The Indemnity Agreements, therefore, give ISAC the right to
recover from petitioner the face value of the subject bonds plus attorney's
fees at the time ISAC becomes liable on the said bonds to the BOC, regardless
of whether the BOC had actually forfeited the bonds, demanded... payment
thereof and/or received such payment. It must be pointed out that the Indemnity
Agreements explicitly provide that petitioners shall be liable to indemnify
ISAC "whether or not payment has actually been made by the ISAC" and ISAC
may proceed against petitioners by... court action or otherwise "even
prior to making payment to the [BOC] which may hereafter be done by ISAC.
INDEMNITY, The undersigned Autocorp Group and Rodriguez agree at
all times to jointly and severally indemnify the COMPANY [ISAC] and keep it
indemnified and hold and save it harmless from and against any and all damages,
losses, costs, stamps, taxes, penalties, charges and expenses of whatsoever
kind and nature including counsel or attorney’s fee which the COMPANY [ISAC]
shall or may at any time sustain or incur in consequence of having become
surety upon the bond herein above referred to…
The foregoing provision in the Indemnity Agreements clearly
authorized ISAC to consent to the granting of any extension, modification,
alteration and/or renewal of the subject bonds.
WHEREFORE,
the Decision of the Court of Appeals which affirmed with modification the
Decision of the Regional Trial Court is AFFIRMED in toto.
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