Antonio Banzon, et. al.

VS

Court of Appeals, et. al.

G.R. No. 47258 [July 13, 1989]

This is a petition for review of the decision of the Court of Appeals.

Facts of the Case:

Sometime in the year 1952, Maximo R. Sta. Maria obtained several crop loans from
PNB. For these loans, Associated acted as surety for Sta. Maria by filing surety bonds in
favor of PNB to guarantee and answer for the prompt and faithful repayment of said
loans. In turn, plaintiff Antonio R. Banzon and one Emilio R. Naval acted as
indemnitors of Associated in the indemnity agreements, obligating themselves to
indemnify and hold it harmless from any liabilities. However, Sta. Maria failed to pay
his crop loan obligations in favor of PNB when the same fell due, and accordingly, the
bank demanded payment from Associated as surety. Instead of paying the bank,
Associated filed a complaint against Maximo R. Sta. Maria and indemnitors Banzon and
Naval. A writ of execution was issued and the properties of Banzon were levied and later
on sold in execution. In 1965, the spouses Pedro Cardenas and Leonila Baluyot were
able to execute upon and buy one of the properties of Banzon to satisfy the
judgment debt of Associated in favor of the Cardenas spouses.  The Banzons however
refused to vacate the premises and to remove the improvements thereon. Petitioner
spouses Antonio Banzon and Rosa Balmaceda filed a complaint against Maximo and
Valeriana Sta. Maria for actual and moral damages in the total amount of P251,750.00
allegedly arising from the deprivation of their property due to the Sta. Marias’ failure
and refusal to pay their plain, valid and just obligations with the PNB. The Court of First
Instance ordered the Sta Marias to pay damages. Upon appeal, the Court of Appeals
reversed the decision.