**Stronghold Insurance Company, Inc. vs.

Republic-Asahi Glass Corporation**

**Facts:**

On May 24, 1989, Republic-Asahi Glass Corporation (Republic-Asahi) entered into a contract with Jose D.
Santos, Jr., the proprietor of JDS Construction (JDS), for the construction of roadways and a drainage
system in Republic-Asahi's compound in Barrio Pinagbuhatan, Pasig City. In order to guarantee the
faithful and satisfactory performance of its undertakings, JDS executed, jointly and severally with
Stronghold Insurance Co., Inc. (SICI), Performance Bond No. SICI-25849/g (13)9769.

**Issue:**

The main issue in this petition is whether the dispute falls under the exclusive jurisdiction of the
Construction Industry Arbitration Committee (CIAC).

**Ruling:**

The Court of Appeals affirmed the decision of the Regional Trial Court, ordering Stronghold to pay the
Spouses Stroem the amount specified in the performance bond³. The Court of Appeals ruled that the
Stronghold’s obligation under the surety agreement was not extinguished by the death of JDS Jr.

**Doctrine:**

A surety company's liability under the performance bond it issues is solidary. The death of the principal
obligor does not, as a rule, extinguish the obligation and the solidary nature of that liability. The right to
a hearing is as often waived as it is invoked, and validly as long as the party is given an opportunity to be
heard on his behalf.