China Insurance And Surety Company v. Chong

IMPERIAL, J.:

This is an appeal taken by the plaintiff from the decision of the Court of First Instance of Manila rendered in the case, dismissing the complaint, with costs. The plaintiff, which is a corporation organized under existing laws and engaged in the bond business, commenced the action against the defendants to recover the premiums on the counterbond which they executed, corresponding to the period from April 2, 1935 until April 2, 1937, amounting to P480, plus stipulated interest at 12 per cent per annum. The defendants did not deny the existence and authenticity of the counterbond signed by them, but alleged as special defense that the bond executed by the plaintiff, which in this case was the obligation guaranteed by the counterbond, had ceased to exist as it has been cancelled before the date the premiums became due.

The case was tried and decided upon the following: STIPULATION OF FACTS Come now the parties in the above-entitled case, by their respective undersigned counsels, and hereby respectfully submit the facts in this case as follows: 1. That the plaintiff is a corporation duly organized and existing under and by virtue of the laws of the Philippine Islands, with its head office at Manila, Philippine Islands, and duly authorized to enter into suretyship business; 2. That the defendants are all of legal age, and reside as follows: Pedro Marquez Lim .

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. . J. Ma.

Basa, Iloilo, Iloilo Sy Yam Bio . . .

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. Do. Y. Chong .

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. . La Paz, Iloilo, Iloilo 3.

That under date of March 28, 1934, the defendants jointly and severally executed a bond application and counter surety in favor of the plaintiff, the original of which is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit A of the plaintiff; 4. That pursuant to, and in consideration for, the execution by the defendants of the said bond application and counter surety, Exhibit A, the plaintiff executed, as surety, with the defendant Y. Chong, as principal, in favor of the Government of the Philippine Islands, as required by the Bonded Warehouse Act No. 3893, a bond in the amount of P12,000, the original of which bond is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit B of the plaintiff; 5. That in accordance with the bond application and counter surety, Exhibit A, and as consideration for the suretyship applied for therein, the defendant Y. Chong paid to the plaintiff, on April 2, 1934, the sum of P240 as premium on the said counterbond for a period of 12 months beginning from April 2, 1934 and expiring on April 2, 1935.

Copy of the official receipt for the said payment of P240 is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit C of the plaintiff; 6. That before April 2, 1935, the plaintiff sent on March 18, 1935, a rush renewal notice to the defendant Y. Chong at La Paz, Iloilo, Iloilo, demanding a remittance for P241.20 to cover premium and documentary stamps for the renewal of the bond, Exhibit B, for another period of one year or fractional part thereof, unless the said bond was to be discontinued and definitely cancelled. A copy of this renewal notice is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit D of the plaintiff; 7.

That again under date of April 9, 1935, another rush renewal notice of the same tenor as Exhibit D was sent to the defendant Y. Chong by the plaintiff.

Copy of this second renewal notice is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit "E" of the plaintiff; 8. That the defendant Y. Chong had not answered either one of the said renewal notices; 9.

That under dates of May 10, and May 28, 1935, the plaintiff wrote to its Iloilo agent, Mr. Eriberto Gonzales, in Iloilo, Iloilo, requesting that payment of the renewal premium in connection with the bond Exhibit B, as already demanded of the defendant Y. Chong in the rush renewal notices Exhibits D and E, be expedited. Copies of the said letters are hereto attached and made integral parts of this Stipulation of Facts, as Exhibits F and G of the plaintiff, respectively; 10. That on July 16, 1935, the plaintiff wrote to the defendant Y. Chong at La Paz, Iloilo, Iloilo, calling attention to the two renewal notices, Exhibits D and E, and requesting that the said defendant remit the sum of P 241.20 representing the renewal premium and documentary stamps due on the renewal of the bond Exhibit B commencing from April 2, 1935.

Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit H of the plaintiff; 11. That under date of July 31, 1935, plaintiff's agent in Iloilo, Mr. Eriberto Gonzales, wrote to the plaintiff advising the plaintiff that he had interviewed the defendant Y. Chong with respect to the renewal of the bond Exhibit B, and that Mr. Y. Chong informed him that the said bond had "already been taken by the Visayan Surety & Insurance Corporation." A copy of the said letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit I of the plaintiff; 12.

That on August 5, 1935, the Bureau of Commerce wrote to the plaintiff inquiring whether the defendant Y. Chong had already paid his renewal premium on the renewal of the bond Exhibit B. Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit of the plaintiff; 13. That on August 7, 1935, the plaintiff answered the letter of the Bureau of Commerce of August 5, 1935, Exhibit J, advising the Bureau of Commerce that the defendant Y. Chong had not yet paid the corresponding renewal premium, and requesting that as the defendant Y. Chong had, from information, already substituted the said bond Exhibit B by another bond from another surety company, the said bond Exhibit B should be released and cancelled by the Bureau of Commerce. Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit K of the plaintiff; 14.

That on August 9, 1935, the Bureau of Commerce answered the above-cited letter of August 7, 1935, Exhibit K, advising the plaintiff that the said Bureau could not release the plaintiff's bond Exhibit B for cancellation for the reason that the defendant Y. Chong had not yet filed a substitute bond. Copy of this letter hereto attached and made an integral part of this Stipulation of Facts, as Exhibit L of the plaintiff; 15. That under date of August 19, 1935, the plaintiff wrote to the defendant Y. Chong, reiterating its demand made in its letter of July 16, 1935, Exhibit H, that the said defendant pay the renewal premium and documentary stamps due on the renewal of the bond Exhibit B. Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit M of the plaintiff; 16.

That under date of August 19, 1935, the plaintiff wrote to its agent in Iloilo, Iloilo, Mr. Eriberto Gonzales, enclosing copy of the letter of the Bureau of Commerce under date of August 9, 1935, Exhibit L, and copy of the letter of August 19, 1935, to Mr. Y. Chong, Exhibit M. Copy of this letter to Mr. Eriberto Gonzales is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit N of the plaintiff; 17. That under date of September 14, 1935, the plaintiff sent another letter to the defendant Y.

Chong reiterating its demand for the payment of the amount of P241.20 covering renewal premium and costs of documentary stamps on renewal of the bond Exhibit B, from April 2, 1935. Copy of this letter of September 14, 1935 of the plaintiff to the defendant Y. Chong is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit O of the plaintiff; 18. That another demand letter of the same tenor as Exhibit O was sent to the defendant Y. Chong by the plaintiff on November 1, 1935.

Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit P of the plaintiff; 19. That another demand letter to the same effect as Exhibit P, was sent on November 29, 1935 by the plaintiff's attorney, Mr. Segundo L. Gonzales. Copy of this letter is hereto attached and made an integral part of this Stipulation Facts, as Exhibit Q of the plaintiff; 20.

That under date of December 7, 1935, the defendant Y. Chong replied to the said letter, Exhibit Q, of Mr. Segundo L. Gonzales. Copy of this reply is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit R of the plaintiff. This was the first letter and communication received by the plaintiff from the defendant.

The copy of the letter sent by the Bureau of Commerce to the defendant Y. Chong under date of August 9, 1935, and the answer of the defendant to the said letter under date of August 14, 1935, both of which letters are referred to in the second paragraph of the defendant's letter of December 7, 1935 to Mr. Gonzales, Exhibit R, are hereto attached and made integral parts of this Stipulation of Facts, as Exhibits R-1 and R-2 of the plaintiff, respectively; 21. That under date of December 11, 1935, the plaintiff wrote to the Bureau of Commerce requesting information as to whether it was true that the plaintiff's bond Exhibit B had already been substituted by a bond of the Visayan Surety & Insurance Corporation for the same amount as the said bond Exhibit B ever since February 2, 1935, as stated by the defendant Y. Chong, and requesting the cancellation and return to the plaintiff of its bond Exhibit B, in the event that the said information was true.

Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit S of the plaintiff; 22. That under date of December 17, 1935, the Bureau Commerce wrote to the plaintiff answering its letter of December 11, 1935, Exhibit S, stating that according to the record of the said Bureau the bond Exhibit B had not been withdrawn or cancelled. Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit T of the plaintiff; 23.

That under date of May 4, 1936, the plaintiff wrote another letter to the Bureau of Commerce requesting information as to whether it already had the necessary information under which the bond Exhibit B could be cancelled. Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit U of the plaintiff; 24. That on May 14, 1936, the Bureau of Commerce answered the above-mentioned letter of May 4, 1936, Exhibit U, again informing the plaintiff that the said Bureau had not yet received the desired information from its Iloilo agent stating at the same time that the said Bureau had written Mr. Pedro Lagniten at Iloilo requesting the immediate submission of the report on the bond of the defendant, Y. Chong.

Copy of this letter is hereto attached and made an integral part of this Stipulation of Facts, as Exhibit V of the plaintiff and copy of the letter of the Bureau of Commerce to Mr. Lagniten, referred to in the said letter Exhibit V, is also hereto attached and made an integral part of this Stipulation of Facts, as Exhibit V-1 of the plaintiff; 25.

That by virtue of the stipulation in the bond application and counter surety Exhibit A, the plaintiff charges renewal premiums corresponding to 2 years on the said bond amounting to P480; 26. The said amount of P480 is computed as follows: April 2, 1935 to April 2, 1936 . .

. . P240.00 April 2, 1936 to April 2, 1937 .

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P240.00 Total . . .

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