AutoCorp Group and Peter Rodriguez vs.

Intra Strata Assurance Corporation and Bureau of

Customs

Date: June 27, 2008

Ponente: J Chico-Nazario
Nature: petition for review on certiorari of the decision of CA
Buod: mag re-export ng kotse si Autocorp at kumuha ng bond kay ISAC para ma secure
ang taxes, duties sa CUSTOMS. EHHHHHH nag default tapos bago pa magbayad si ISAC kay
CUSTOMS naningil na siya kay Autocorp. SIYA NAG FILE NG SUIT HINDI SI CUSTOMS tapos
Inimplead nalang niya si CUSTOMS

Facts:
 Aug 19 1990 – Autocorp Group (P), represented by its President Peter Rodriguez (P)
secured an ordinary re-export bond, Intra Strata Assurance Corp (ISAC) in favr of
Bureau of Customs (BOC) in the amoung of 327,040 pesos to guarantee the re-export
of 1 unit of Hyundai Excel 4-door 1.5 LS and/or to pay the taxes and duties
 Dec 21 1990 – P obtained another ordinary re-export bond, Instrata bond no 7154 from
ISAC in favor of the BOC, in the amount of 447,671 pesos which was eventually
increased to 707,609 per bond endorsement dated Jan 10 1991 to guarantee the re-
export of 1 unit of Hyundai Sonata to pay the taxes and duties
 P executed and signed 2 indemnity agreements ( President Peter Rodriguez signing as
president and in his personal capacity) agreeing to act as surety of the subject bonds
with respect to (Di ko gets yung agreement so refer to the original)
o Indemntiy – jontly and severally indemnify the company
o Maturity of our obligations as contracted herewith and accrual of action
 May proceed against the undersigned by court action in protection of
the company’s interest
o Interest in case of delay – in delay of payment of the said sums, interest of 12%
per annum or same, which will accumulate to the capital quarterly and shall
earn the same interest as the capital, all this without prejudice to the company’s
right to demand judicially or extrajudicially the full payment of its claim
o Incontestability of Payment made by the company
o Waiver of Venue of action – competent jurisidiction of Makati or Rizal
o Waiver – waive all rights privileges and benefits that they have under Art 207
2078 2079 2080 and 2081 of the Civil code
 The undersigned of this instrument grant a SPA in favor of all or any of the
undersigned so that any of the undersigned may represent all the others
in all transactions related to this bond, its renewals, extension, or any other
agreement in connection with this counter guaranty, without necessity of
the knowledge or consent of the others
 o Our liability hereunder – it shall not be necessary for the company to bring suit
against the principal – exigible immediately upon the occurrence of such
default
o Cancellation of bond by the company – The Company may at any time cancel
the abovementioned bond
o Renewals aleteration and substituions – authorizing the company to gran or
consent to the granting of any extension, continuation, increase, modification
etc.
o Severability of provisions – if competent public authority to be invalid or
unenforceable, all remaining provisions shall remain in effect
o Notification – the undersigned hereby accept due notice of that the company
has accepted this guaranty executed by the undersigned in favor of the
company
 IN Sum, ISAC issued the subject bonds to guarantee compliance by P with their
undertaking with BOC to re-expoty the imported vehicles within the given period and
pay taxes and duties due
 In turn, P agreed as surety to indemnify ISAC for the liability the latter may incur ofn the
said bonds
 P failed to re-export the items guaranteed by the bonds/and or liquidated the entries
or cancel the bonds, and pay the taxes and duties pertaining to the said items despite
repeated demands made by BOC, as well as ISAC
 BOC considered the 2 bonds with total face value 1,034,649 forfeited
 Due to failure of P to pay despite repeated demands sent to each of them as surety,
ISAC filed with RTC an action to recover sum of 1,034,649 plus 25% or 258,662.25 as atty
fees
 ISAC impleaded BOC as a necessary party plaintiff in order that the reward of money
or judgement shall be adjudged undto the said necessary plaintiff
 P filed a motion to dismiss on the ground of
o No cause of action
o BOC is an improper party
 RTC denied motion to dismiss
 P now files an answer to the complaint
o Arguing that they sough from BOC extension of time to re export the items
covered by the bonds
o BOC has yet to issue an assessment for P’s alleged default
o Claim of ISAC for payment is premature as the subject bonds are not yet due
and demandable
 During Pre-trial conference
o P admitted the genuineness of the 2 instrata bonds but denied the
corresponding indemnity agreements
o Parties agreed to limit the issue on WON bonds are now due and demandable
  RTC Decision
o Ordered P to pay ISAC and/or BOC face value of the bonds in the total amount
of 1,034,649 pesos and to pay ISAC 258,662.25 as atty fees
 P filed MR but denied
 P appealed to CA
 CA Decision
o Modified atty fees to 103,464.90 pesos
 P filed MR but denied
 P now files Petition for review on certiorari

Issue:
WON there BOC was necessary party to this case (YES)
WON there was an irregularity in the manner of BOC being impleaded(YES)
WON It should affect the disposition of this case (No)

Held:
Absence of actuall forfeiture of the subject bonds
 Based on the indemnity agreement, P obligation to indemnify became due and
demandable the moment the bonds issued by ISAC became answerable for P non-
compliance with its undertaking with the BOC
o This is regardless WON BOC actually forefeited the bonds, demanded
paymentthereof and/or received such payment
 Actual forfeiture is irrelevant in this case
 P failed to impugn such stipulation
 Even if they did impugn, it is within Art 20711
 P alleged lack of extrajudicial demand before filing a case
o Extrajudicial demand is not required before judicial demand

1 “Art. 2071. The guarantor, even before having paid, may proceed against the principal debtor:

. (1) When he is sued for the payment; 


. (2) In case of insolvency of the principal debtor; 


. (3) When the debtor has bound himself to relieve him from 


the guaranty within a specified period, and this period has expired;

(4) When the debt has become demandable, by reason of the expiration of the period for payment;
INCLUSION OF THE BUREAU OF CUSTOMS AS PARTY TO THE CASE
o P argues that inclusion of BOC is tantamount to collusion and would deprive their
personal defenses against BOC
o However, misjoinder is not a ground for dismissal only be dropped at any stage
of the action and on such terms as are just
o Should BOC be dropped?
o Rule 3 SEC. 8. Necessary party.—A necessary party is one who is not
indispensable but who ought to be joined as a party if complete relief is to be
accorded as to those already parties, or for a complete determination or
settlement of the claim subject of the action.”
o AS APPLIED
 subject matter of the case is the liability of Autocorp (P) to BOC, which
ISAC is also bound to pay as guarantor
 Thus, there would be no complete settlement of subject matter without
BOC
o However, BOC through the Solicitor General was not the one who initiated the
case, nor its consent
 It may be considered an unwilling co-plaintiff of ISAC in said action
o The proper way to implead BOC must be in accordance with Rule 3 sec 10
 “SEC. 10. Unwilling co-plaintiff.—If the consent of any party who should be
joined as plaintiff can not be obtained, he may be made a defendant and
the reason therefor shall be stated in the complaint.”
o Nonetheless, irregularity in the inclusion of BOC in this case would not in any way
affect the disposition thereof
 Because the Court already found BOC as a necessary party and it would
be a graver injustice to drop it as a party
 P defenses against BOC are completely available against ISAC since the
right of the latter to seek indemnity from P depends on the right of BOC to
proceed against the bonds
o However, ISAC’s right to seek indemnity does not constitute subrogation
 ISAC has not paid BOC
 The right of BOC to collect remains
 This is provided in art 2071
 ISAC cannot be said to have stepped into the shoes of BOC
o Correct in saying that defenses available to P against BOC can be used against
ISAC
 If P can prove that liability to BOC is not yet due and demandable,
Liability to ISAC under the indemnity agreement is also due and
demandable
o OTHER ISSUES
 o LIABILITY OF RODRIGUEZ

 P still liable even if there was an amendment on the effectivity of bonds

without his consent so he should be released by virtue of Art 2079
 However, there was a stipulation in the indemnity agreement giving
consent on any extension, continuation etc.
o Dispositive: Denied. CA Affirmed