Sy Panco vs. Gonzaga, et al.

An attachment bond under section 440 of the Code of Civil Procedure stands in place of the property released and binds the bondsman only for the property or its value, not for the defendant's underlying debt; where the released carabaos died through a fortuitous event without the bondsmen's fault, the obligation to deliver them is extinguished under article 1182 of the Civil Code and the subsidiary obligation to pay their value is excused under article 1105.

Manuel Crame Sy Panco was the plaintiff in a prior action against Alejo Lanzon for recovery of P300.42 in the justice of the peace court of Victorias, Occidental Negros. In that action, a preliminary attachment was levied on three carabaos owned by Lanzon, and Ricardo Gonzaga, et al. executed a P500 bond to secure the release of the attachment under section 440 of the Code of Civil Procedure. The bond conditioned redelivery of the carabaos if judgment favored the plaintiff, or payment of their total value if the defendants failed to do so. The present action concerns enforcement of that bond.

Manuel Crame Sy Panco sued Alejo Lanzon in the justice of the peace court of Victorias, Occidental Negros, to recover P300.42. In that action, Sy Panco obtained a preliminary attachment of Lanzon's property, which was levied on three carabaos owned by Lanzon. To secure the release of the attachment, Ricardo Gonzaga and others executed a bond in Sy Panco's favor for P500. The bond bound them jointly and severally on the condition that, if judgment were rendered for the plaintiff, Lanzon would on request redeliver the attached carabaos to the court officer for application to the enforcement of the sentence, and if he failed to do so, they would pay the plaintiff the total value of the carabaos.

In the suit against Lanzon, judgment was rendered sentencing Lanzon to pay Sy Panco the amount claimed. A writ of execution issued, but it could not be enforced because no property of any kind subject to execution was found in Lanzon's possession. The carabaos were also not produced, their preliminary attachment having been raised by the bond executed by Gonzaga and the other defendants.

Sy Panco then brought the present action to enforce the bond up to P300.42, the amount Lanzon had been sentenced to pay with legal interest. Gonzaga and the other defendants alleged and offered evidence that the three carabaos had died of a disease prevailing in the province. Two witnesses testified without contradiction to that fact. The lower court stated in its judgment that it could not consider as proven that the carabaos had all died; it apparently believed one or more had died, but not all. The Supreme Court found no basis for that partial finding, as the witnesses said all three died and their testimony was uncontradicted and not overcome. The death of the carabaos was therefore fortuitous and without fault on the defendants' part. Sy Panco also sought P57.47 as costs in the action against Lanzon, and the defendants expressed in their answer that they were and had always been ready to pay that sum.

• Fortuitous Loss of the Carabaos: Defendants-appellants alleged and offered evidence that the three attached carabaos died of a disease prevailing in the province, without fault on their part, so that their obligation to return or deliver the carabaos was extinguished and they were not liable to pay their value.

• Enforcement of the Attachment Bond: Plaintiff-appellee sought enforcement of the bond up to P300.42, the amount Lanzon was sentenced to pay with legal interest, after execution against Lanzon failed and the carabaos were not produced.
• Costs in the Prior Action: Plaintiff-appellee also claimed P57.47 as the amount of costs in the action against Lanzon, by virtue of the obligation executed by the defendants for the effects of Lanzon's appeal in that action.

• Fortuitous Event: Whether the death of the three attached carabaos from a prevailing disease, without fault of the defendants, extinguished their obligation to deliver the carabaos and exempted them from the subsidiary obligation to pay their value.
• Scope of Attachment Bond: Whether the defendants, as bondsmen under section 440 of the Code of Civil Procedure, could be compelled to pay the P300.42 judgment debt of Alejo Lanzon under the bond.
• Liability for Costs: Whether the defendants were liable to pay P57.47 as costs in the action against Alejo Lanzon.

• Fortuitous Event: Yes. The death was fortuitous and without fault; under articles 1182 and 1105 of the Civil Code, the obligation to deliver was extinguished and the subsidiary obligation to pay the carabaos' value was excused.
• Scope of Attachment Bond: No. Under section 440 of the Code of Civil Procedure, the bond stood in place of the released property, and the bondsmen were responsible only for that property or its value, not for Lanzon's debt; the value not having been proven, no basis existed to fix liability.
• Liability for Costs: Yes. The defendants agreed to pay the P57.47 costs and stated they had always been ready to pay it; that portion of the judgment was affirmed.

• Fortuitous Event: The lower court's finding that not all carabaos died was unsupported. Two witnesses testified without contradiction that all three died of a prevailing disease. The loss was therefore fortuitous and without fault. Under article 1182 of the Civil Code, the obligation to deliver the determinate carabaos was extinguished as a matter of fact and law. Under article 1105, absent a legal provision or express covenant, no one is liable for fortuitous events; thus the defendants were exempt from the subsidiary obligation to pay the carabaos' value.
• Scope of Attachment Bond: The defendants did not contract any obligation for Lanzon's indebtedness. Their undertaking was to respond for the delivery of the carabaos and, in default, to pay their value, not exceeding P500. The bond was executed under section 440 of the Code of Civil Procedure, which provides that the bondsman is not responsible for other than the property released or for payment of its value, and that the obligation "shall stand in place of the property so released." Because the actual value of the carabaos was not proven, there was no basis to determine what sum, if any, the defendants should pay under the bond. The judgment for P300.42 was therefore reversed.
• Liability for Costs: The defendants did not dispute the claim for P57.47; they stated in their answer that they were and had always been ready to pay it. That portion of the judgment was affirmed.

• Fortuitous event extinguishes the obligation to deliver a determinate thing — Under article 1182 of the Civil Code, the obligation to deliver a determinate thing is extinguished when the thing is lost or destroyed without the debtor's fault. The Court applied this to the death of the three carabaos, which was established by uncontradicted testimony as caused by a prevailing disease and without fault on the defendants' part.
• No liability for fortuitous event absent legal provision or express covenant — Article 1105 of the Civil Code exempts a debtor from liability for fortuitous events unless a legal provision or express covenant provides otherwise. The Court found no such provision or covenant, so the defendants were not bound to pay the carabaos' value after their fortuitous death.
• Attachment bond under section 440 of the Code of Civil Procedure — A bond given to release attached property stands in place of the property released. The bondsman is responsible only for the property released or for its value, not for the defendant's underlying debt. Because the value of the released carabaos was not proven, the bond could not be enforced for the amount of the judgment against Lanzon.

• "The death of the carabaos being fortuitous, it results upon the one hand that the obligation contracted by the defendants to return or deliver up the said carabaos was extinguished as a matter of fact and of law (art. 1182, Civil Code), and on the other, that they were exempted from the other subsidiary obligation contracted by them, to pay the value of the said carabaos in default of the carabaos themselves, because, in accordance with article 1105 of the above cited Civil Code, unless there is a legal provision or an express covenant, which in this case does not exist, no one should be held to account for fortuitous cases." — This passage states the ratio decidendi on the effect of the fortuitous death of the attached carabaos and the exemption from the subsidiary obligation to pay their value.
• "Said bond was executed under the provisions of section 440 of the Code of Civil Procedure, according to which the bondsman is not responsible for other than the property so released, or for the payment of the value thereof. It is so much so that the same section expressly declares that such obligation shall stand in place of the property so released. As the actual value of the carabaos, the delivery of which was guaranteed by means of the obligation executed by the defendants, has not been proven in the case, there is no true basis from which to start in order to determine the sum that the latter should pay on said obligation, even on the hypothesis that they were so bound by virtue of the obligation mentioned above." — This passage defines the limited scope of an attachment bond under section 440 and explains why the bondsmen could not be held for Lanzon's judgment debt.
• "The defendants did not execute a bond or contract any obligation whatever for the said indebtness of Lanzon. The obligation contracted by them was to respond for the delivery of the carabaos, and, in default thereof, to pay the value of the same, so long as it did not exceed the sum of P500 that was fixed as the maximum limit of their liability." — This passage clarifies that the bond secured the released property, not the underlying debt, and caps the bondsmen's liability at P500.

• Article 1182, Civil Code — The Court applied this provision to hold that the obligation to deliver the attached carabaos was extinguished when they died fortuitously without the defendants' fault.
• Article 1105, Civil Code — The Court invoked this provision to exempt the defendants from the subsidiary obligation to pay the carabaos' value, absent a legal provision or express covenant making them liable for a fortuitous event.
• Section 440, Code of Civil Procedure — The Court construed this provision as limiting the bondsman's responsibility to the property released or its value, with the bond standing in place of the released property, not as security for the defendant's underlying debt.

Arellano, C.J., and Torres, Johnson, Carson, Willard, and Tracey, JJ., concurred. No separate concurring opinions are set out in the text.