G.R. No. 107062, 21 February 1994, 230 SCRA 164

FACTS:

Gregroco, Inc. filed a collection suit against the petitioner, Interworld Assurance Corporation ( now Philippine Pryce Assurance Corporation. The complaint alleged that Phil. Pryce issued two surety bonds in behalf of its principal Sagum General Merchandise for P 500,000 and P 1,000,000, respectively.
Phil. Pryce admitted having executed the said bonds, but denied liability because allegedly 1) The checks which were to pay for the premiums bounced and were dishonored hence there is no contract to speak of between petitioner and its supposed principal; and 2) that the bonds were merely to guarantee payment of its principal’s obligation, thus, excussion is necessary.
Phil. Pryce filed a “ Motion with Leave to Admit Third-Party Complaint” with the Third-Party Complaint attached when the case was called for Pre-Trial conference on February 1, 1989, petitioner was again nor presented by its officer or its counsel, despite being duly notified. Hence, upon motion of respondent, petitioner was considered as in default and respondent was allowed to present evidence ex-parte. Regional Trial Court ruled in favor of Gregroco Inc and affirmed Regional Trial Court. Hence, this appeal.

ISSUE:

Whether or not Phil. Pryce should be liable for the surety bond that it issued as payment for the premium.

HELD:

Yes, there is reason to believe that petitioner does not really have a good defense. Petitioner hinges its defense on two arguments, namely; a) That the checks issued by its principal which were supposed to pay for the premiums, bounced, hence, there is no contract of surety to speak of; and b) That as early as 1986 and covering the time of the Surety Bond, Interworld Assurance Company ( now Phil. Pryce ) was not yet authorized by the insurance commission to issue such bonds.
Section 177. The surety is entitled to payment of the premium as soon as the contract of suretyship or bond is perfected and delivered to the obligor. No contract of suretyship or bonding shall be valid and binding unless and until the premium therefore has been paid, except where the obligee has accepted the bond, in which case the bond becomes valid and enforceable irrespective of whether or not the premium has been paid by the obligor to the surety.
The above provision outrightly negates petitioner’s first defense. In a desperate attempt to escape liability, petitioner further asserts that the above provision is not applicable because the respondent allegedly had not accepted the surety bond, hence could not have delivered the goods to Sagum Enterprises. This statement clearly intends to muddle the facts as found by the trial court and which are on record.
Likewise, attached to the record are exhibits C to C-18 consisting of delivery invoices addressed to Sagum General Merchandise proving that parts were purchased, delivered and received.
On the other hand, petitioner’s defense that it did not have authority to issue a Surety Bond when it did is an admission of fraud committed against respondent. No person can claim benefit from the wrong he himself committed. A representation made is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon.
Wherefore, in view of the foregoing, the decision of the Court of Appeals dismissing the petition before them and affirming the decision of the trial court and its order denying petitioner’s Motion For Reconsideration are hereby AFFIRMED. The present petition is dismissed for lack of merit.

*Case digest by AG Himang, LLB-IV, Andres Bonifacio Law School, SY 2018-2019