conscience as would consequently afford an

injured party a cause of action resulting from

the failure of the law to provide for an
adequate or complete relief. A preliminary
injunction is an order granted at any stage of
an action or proceeding prior to the judgment
or final order, requiring a party or a court,
VOL. 310, JULY 19, 1999 377
agency or a person to refrain from a particular
Paramount Insurance Corporation vs. act or acts. It may also require the
Court of Appeals performance of a particular act or acts, in
which case it shall be known as a preliminary
  mandatory injunction. Its sole purpose is not to
G.R. No. 110086. July 19, 1999.
*
correct a wrong of the past, in the sense of
redress for injury already sustained, but to
prevent further injury.
PARAMOUNT INSURANCE
CORPORATION, petitioner, vs. COURT Same; Same; Injunction Bonds; Requisites
OF APPEALS and DAGUPAN Before Injunction Bonds May Be Held Liable
ELECTRIC CORPORATION, for Damages.—In order for the injunction
respondents. bond to become answerable for the above-
described damages, the following requisites
must concur: The application for damages
Actions; Injunctions; Injunction is an must be filed in the same case where the bond
extraordinary remedy calculated to preserve was issued; Such application for damages must
the status quo of things and to prevent actual be filed before the entry of judgment; and
or threatened acts violative of the rules of After hearing with notice to the surety.
equity and good conscience as would
consequently afford an injured party a cause Same; Same; Same; Due Process; What the
of action resulting from the failure of the law law abhors is not the absence of previous
to provide for an adequate or complete relief.— notice but rather the absolute lack of
Injunction is an extraordinary remedy opportunity to ventilate a party’s side.—The
calculated to preserve the status quo of things records of this case reveal that during its
and to prevent actual or threatened acts pendency in the trial court, DECORP filed its
violative of the rules of equity and good Answer raising compulsory counterclaims for
rescission of contract, moral damages,
exemplary damages, attorney’s fees and ventilate a party’s side. In other words,
litigation expenses. During the trial, Atty. petitioner cannot successfully invoke denial of
Nonito Cordero appeared as counsel due process where it was given the chance to
be heard.
_______________ Same; Same; Same; It is neither
mandatory nor fatal that there should be a
* FIRST DIVISION.
separate hearing in order that damages upon
378 the bond can be claimed, ascertained and
awarded.—Contrary to petitioner’s thesis, it is
neither mandatory nor fatal that there should
378 SUPREME COURT REPORTS be a separate hearing in order that damages
ANNOTATED upon the bond can be claimed, ascertained and
Paramount Insurance Corporation vs. awarded, as can be gleaned from a cursory
Court of Appeals reading of the provisions of Rule 57, Section
20. This Court agrees with the appellate
court’s ruling that: “Jurisprudential findings
for petitioner. PARAMOUNT as well as the
laid down the doctrine that a final
other sureties were properly notified of the
adjudication that the applicant is not entitled
hearing and given their day in court.
to the injunction does not suffice to make the
Specifically, notice was sent to Atty. Cordero of
surety liable. It is necessary, in addition, that
the hearing on April 27, 1985, which was set
the surety be accorded due process, that is,
for the purpose of determining the liability of
that it be given an opportunity to be heard on
the sureties. The counterclaims for damages of
the question of its solidary liability for
DECORP were proven at the trial and yet
damages arising from a wrongful injunction
PARAMOUNT did not exert any effort to
order. Withal, the fact that the matter of
controvert the evidence presented by
damages was among the issues tried during
DECORP. Given these circumstances,
the hearings on the merits will not render
PARAMOUNT cannot hide under the cloak of
unnecessary or superfluous a summary
non-liability on its injunction bond on the
hearing to determine the extent of a surety’s
mere expediency that it was deprived of due
liability unless of course, the surety had been
process. It bears stressing that what the law
impleaded as a party, or otherwise earlier
abhors is not the absence of previous notice
notified and given opportunity to be present
but rather the absolute lack of opportunity to
and ventilate its side on the matter during the
trial. Same; Same; Same; The injunction bond damage by reason of an injunction.” No
is intended as a security for damages in case it distinction was made as to when the damages
is finally decided that the injunction ought should have been incurred.
not to have been granted.—PARAMOUNT also Same; Same; Same; Damages; The
argues that assuming it is liable on its injunction bond answers for any and all
injunction bond, its liability should be limited damages arising from the injunction,
only to the amount of damages accruing from regardless of whether it was sustained before
the time the injunction bond was issued until or after the filing of the injunction bond.—It
the termination of the case, and not from the bears stressing that McADORE was found
time the suit was commenced. In short, it liable to pay actual damages, moral damages,
claims that the injunction exemplary damages, attorney’s fees and costs
379
of the suit. To argue therefore that
PARAMOUNT is only liable on its injunction
bond from the time of its issuance and not
VOL. 310, JULY 19, 1999 379 from the time the suit was commenced is
Paramount Insurance Corporation vs. preposterous if not absurd. Indeed, it would be
Court of Appeals impossible to determine the reckoning point
when moral damages, exemplary damages,
attorney’s fees and costs of the suit were
bond is prospective and not retroactive in supposed to have been incurred.
application. This Court does not agree. Rule Consequently, it can be safely deduced that
58, Section 4(b), provides that a bond is the bond answers for any and all damages
executed in favor of the party enjoined to arising from the injunction, regardless of
answer for all damages which he may sustain whether it was sustained before or after the
by reason of the injunction. This Court already filing of the injunction bond.
had occasion to rule on this matter in Mendoza
Same; Same; Same; Same; The company
v. Cruz, where it held that “(t)he injunction
that issues the injunction bond is liable,
bond is intended as a security for damages in
jointly and severally, for actual damages,
case it is finally decided that the injunction
moral damages, exemplary damages, attorney’s
ought not to have been granted. It is designed
fees and costs of the suit, to the extent of the
to cover all damages which the party enjoined
amount of the bond.—PARAMOUNT further
can possibly suffer. Its principal purpose is to
maintains that it is liable to pay actual
protect the enjoined party against loss or
damages only. However, Rule 58, Section 4(b),
clearly provides that the injunction bond is of suretyship, it is not for the obligee to see to
answerable for all damages. “The bond insures it that the principal pays the debt or fulfills the
with all practicable certainty that the contract, but for the surety to see to it that the
defendant may sustain no ultimate loss in the principal pay or perform. The purpose of the
event that the injunction could finally be injunction bond is to protect the defendant
dissolved. Consequently, the bond may against loss or damage by reason of the
obligate the bondsmen to account to the injunction in case the court finally decides that
defendant in the injunction suit for all: (1) the plaintiff was not entitled to it, and the
such damages; (2) costs and damages; (3) bond is usually conditioned accordingly. Thus,
costs, damages and reasonable attorney’s fees the bondsmen are obligated to account to the
as shall be incurred or sustained by the person defendant in the injunction suit for all
enjoined in case it is determined that the damages, or costs and reasonable counsel’s
injunction was wrongfully issued.” Thus, fees, incurred or sustained by the latter in case
PARAMOUNT is liable, jointly and severally, it is determined that the injunction was
for actual damages, moral damages, wrongfully issued.
exemplary Same; Same; Same; The posting of a bond
380
in connection with a preliminary injunction
(or attachment under Rule 57, or receivership
under Rule 59, or seizure or delivery of
380 SUPREME COURT REPORTS personal property under Rule 60) does not
ANNOTATED operate to relieve the party obtaining an
Paramount Insurance Corporation vs. injunction from any and all responsibility for
Court of Appeals the damages that the writ may thereby cause.
—The posting of a bond in connection with a
preliminary injunction (or attachment under
damages, attorney’s fees and costs of the suit, Rule 57, or receivership under Rule 59, or
to the extent of the amount of the bond. seizure or delivery of personal property under
Same; Same; Same; Suretyships; By the Rule 60) does not operate to relieve the party
contract of suretyship, it is not for the obligee obtaining an injunction from any and all
to see to it that the principal pays the debt or responsibility for the damages that the writ
fulfills the contract, but for the surety to see to may thereby cause. It merely gives additional
it that the principal pay or perform.—It may protection to the party against whom the
not be amiss to point out that by the contract injunction is directed. It gives the latter a right
of recourse against either the applicant or his Insurance Corporation’s (PARAMOUNT)
surety, or against both. In the same manner, appeal, thereby affirming the decision of
when petitioner PARAMOUNT issued the the court a quo finding petitioner liable
bond in favor of its principal, it undertook to on its injunction bond.
assume all the damages that may be suffered McAdore Finance and Investment,
after finding that the principal is not entitled Inc. (McADORE) was the owner and
to the relief being sought. operator of the McAdore International
Palace Hotel in Dagupan City. Private
PETITION for review on certiorari of a respondent Dagupan Electric
decision of the Court of Appeals. Corporation (DECORP), on the other
hand, was the grantee of a franchise to
The facts are stated in the opinion of operate and maintain electric services in
the Court. the province of Pangasinan, including
     Soo, Gutierrez, Leogardo & Lee for Dagupan City.
petitioner. On February 2, 1978, McADORE and
381
DECORP entered into a contract
whereby DECORP shall provide electric
power to McADORE’s Hotel. During the
VOL. 310, JULY 19, 1999 381 term of their contract for power service,
Paramount Insurance Corporation vs. DECORP noticed discrepancies between
Court of Appeals the actual monthly billings and the
estimated monthly billings of McADORE.
Upon inspection, it was discovered that
    Angara, Abello, Concepcion, Regala
the terminal in the transformers
& Cruz for private respondent.
connected to the meter had been
YNARES-SANTIAGO, J.: interchanged resulting in the slow
rotation of the meter. Consequently,
  DECORP issued a corrected bill but
Before this Court is a petition for McADORE refused to pay. As a result of
review on certiorari assailing the McADORE’s failure and continued
Decision of the Court of Appeals dated refusal to pay the corrected electric bills,
April 30, 1993 in CA-G.R. CV No. 11970 DECORP disconnected power supply to
which dismissed petitioner Paramount the hotel on November 27, 1978.
 Aggrieved, McADORE commenced a parties, and orders McAdore to pay Decorp the
suit against DECORP for damages with following:
prayer for a writ of preliminary
injunction. McADORE posted injunction 1. Actual damages consisting of total
bonds from several sureties, one of which arrearages for electric services
was herein petitioner PARAMOUNT, rendered from February 1978 to
which issued an injunction bond on July January 1983, in the sum of
7, 1980 with a face amount of P3,834,489.62, plus interest at the
P500,000.00. Accordingly, a writ of legal rate, computed from the date of
preliminary injunction was issued demand until full payment;
wherein DECORP was ordered to 2. Moral damages in the sum of
continue supplying electric power to the P600,000.00;
hotel and restrained from further 3. Exemplary damages in the sum of
disconnecting it. P400,000.00;
4. Attorney’s fees in the sum of
382
P100,000.00; and
5. Costs of the suit.
382 SUPREME COURT REPORTS
ANNOTATED “While this case was under litigation, the
Paramount Insurance Corporation vs. court issued a number of restraining orders or
Court of Appeals injunctions. During these incidents, McAdore
filed the following bonds: Policy No. 8022709
  by Paramount Insurance Corporation for
After due hearing, the Regional Trial P500,000.00; No. 00007 and No. 00008 by
Court of Quezon City, Branch 106, Sentinel Insurance Company, Inc. for
rendered judgment in favor of DECORP, P100,000.00 and P50,000.00; and No. 1213 by
the dispositive portion of which reads: the Travelers Multi-Indemnity Corporation for
P225,000.00.
“WHEREFORE, there being preponderance “Pursuant to the dispositive portion of this
of evidence, the court hereby dismisses the decision, the court holds that these bonding
amended complaint. Further, the court companies are jointly and severally liable with
rescinds the service contract between the McAdore, to the extent of the value of their
bonds, to pay the damages adjudged to RELATION TO SEC. 9, RULE
Decorp. 58, RULES OF COURT WAS
“Send this decision to: plaintiff’s counsel NOT OBSERVED IN THIS
Atty. Pagapong; defendant’s counsel Atty. CASE.
Vera Cruz; 1and to each of the bondsman. “It is III. NO EVIDENCE NOR PROOF
so ordered.” HAD BEEN PRESENTED TO
SHOW THAT HEREIN
 
APPELLANT SURETY BOND
McADORE did not appeal the above
SHOULD BE HELD LIABLE
decision. PARAMOUNT, however,
FOR TOTAL DAMAGES AS
appealed to the Court of Appeals
ADJUDGED IN THE
assigning the following errors, to wit: 2
CHALLENGED DECISION.”

_______________  
1 Decision, Rollo, p. 48.
In essence, PARAMOUNT contended
that it was not given its day in court
383 because it was not notified by DECORP
of its intention to present evidence of
damages against its injunction bond, as
VOL. 310, JULY 19, 1999 383
mandated by Sec. 9 of Rule 58, in
Paramount Insurance Corporation vs. relation to Sec. 20 of Rule 57 of the
Court of Appeals Revised Rules of Court.
The Court of Appeals was not
I. APPELLANT SURETY WAS convinced with petitioner’s contentions.
NOT GRANTED DUE PROCESS On April 30, 1993, it affirmed the
NOR GIVEN ITS DAY IN decision of the trial court.
COURT. In the instant petition, PARAMOUNT
II. APPELLANT’S SURETY BOND, seeks to reverse and set aside the
BEING AN INJUNCTION OR decision of the Court of Appeals on the
TEMPORARY RESTRAINING following assignment of errors:
ORDER BOND, THE “FIRSTLY, THE HONORABLE COURT OF
MANDATORY PROCEDURE IN APPEALS ERRED IN RULING THAT
SEC. 20, RULE 57, IN
NOTICE TO PETITIONER AND ITS presented by private respondent during
PRESENCE THROUGH COUNSEL IN ONE the hearing of the case a quo, notice (or
HEARING WHERE NO EVIDENCE IN lack thereof) to the surety relative to the
SUPPORT OF THE DAMAGES proceedings before the court a quo during
GUARANTEED BY PETITIONER’S BOND which said evidence was presented, as
RENDERS THE NEED FOR ANOTHER well as 4the actual proceedings
HEARING ON THAT MATTER A themselves.” PARAMOUNT further
SUPERFLUITY. asseverates that “no evidence relative to
“SECONDLY, THE HONORABLE COURT damages suffered by private respondent
OF APPEALS ERRED IN AFFIRMING THE as a result of the injunction was ever
DECISION OF THE COURT A QUO THAT presented, or that if any such evidence
PETITIONER IS JOINTLY AND was presented, the same was done
SEVERALLY LIABLE WITH McADORE TO without notice to petitioner and in5
THE EXTENT OF ITS BOND, WHICH violation of its right to due process.”
DECISION IS
3
NOT SUPPORTED BY THE Moreover, petitioner maintains that the
EVIDENCE.” injunction bond was issued and approved
sometime in April 1980 to guarantee
_______________ “actual and material damages as may be
sustained and duly proved by private
2 CA Rollo, p. 75. respondent.” Thus, it can only cover the
3 Petition, Rollo, p. 14. period prospectively from the date of its
issuance and does not retroact to the date
384
of the initial controversy.
In its Comment, DECORP claims that
384 SUPREME COURT REPORTS PARAMOUNT participated in the
ANNOTATED proceedings and was given its day in
court. This is evidenced by the “Notice of
Paramount Insurance Corporation vs.
Court of Appeals Hearing” dated February 26, 1985
addressed to the three sureties. In fact, at
the hearing on March 22, 1985,
 
PARAMOUNT was in attendance
PARAMOUNT asserts that “(t)he
represented by Atty. Nonito Q. Cordero.
bone of contention in the instant case is
Likewise, PARAMOUNT was notified of
the matter of evidence (or lack thereof)
the next hearing scheduled for April 26, ascertaining and awarding damages
1985. DECORP further stressed that the upon the injunction bond.
hearing on April 26, 1985 proceeded as Injunction is an extraordinary remedy
scheduled without any comment, calculated to preserve the status quo of
objection, opposition or reservation from things and to prevent actual or
PARAMOUNT. threatened acts violative of the rules of
The core issue to be resolved here is equity and good conscience as would
whether or not petitioner Paramount consequently afford an injured party a
Insurance Corporation was denied due cause of action resulting from the failure
process when the trial court found the of the law to provide
6
for an adequate or
injunction bond it issued in favor of complete relief. A preliminary injunction
McADORE liable to DECORP. Stated is an order granted at any stage of an
otherwise, was there sufficient evidence action or proceeding prior to the
to establish the liability of the petitioner judgment or final order, requiring a
on its injunction bond? party or a court, agency or a person to
The petition is devoid of merit. refrain from a particular act or acts. It
may also require the performance of a
_______________ particular act or acts, in which case it
shall be known as7 a preliminary
4 Id., p. 11. mandatory injunction. Its sole purpose is
5 Id., p. 12. not to correct a wrong of the past, in the
sense of redress for injury already
385 8
sustained, but to prevent further injury.
A preliminary injunction or
VOL. 310, JULY 19, 1999 385 temporary restraining order may be
granted only when, among others, the
Paramount Insurance Corporation vs.
applicant, unless exempted by the court,
Court of Appeals
files with the court where the action or
proceeding is pending, a bond executed to
  the party or person enjoined, in an
Petitioner’s submissions necessitates amount to be fixed by the court, to the
going into the nature of an injunction as effect that the applicant will pay such
well as over the procedure in claiming, party or person all damages which he
may sustain by reason of the injunction applicable to preliminary injunction,
or temporary restraining order if the pertinently provides:
court should finally decide that the
applicant was not entitled thereto. Upon “Sec. 20. Claim for damages on account of
approval of the requisite bond, a writ of9 improper, irregular or excessive attachment.—
preliminary injunction shall be issued. An application for damages on account of
At the trial, the amount of damages to be improper, irregular or excessive attachment
awarded to either party, upon the bond of must be filed before the trial or before appeal
the adverse party, shall be is perfected or before the judgment becomes
executory, with due notice to the attaching
obligee or his surety or sureties, setting forth
_______________
the facts showing his right to damages and the
6 Laureta, Wenceslao G., Comments and amount thereof. Such damages may be
Jurisprudence of Injunction, p. 1, [1989]. awarded only after proper hearing and shall
7 1997 Rules of Civil Procedure, Rule 58, Sec. 1. be included in the judgment on the main case.
8 Laureta, op. cit., note 10, at 6, citing Tree v. “If the judgment of the appellate court be
Larson, 84 Iowa 649, 54 NW 179, 35 Am S.R. 336. favorable to the party against whom the
9 Sec. 4(b), Rule 58, 1997 Rules of Civil attachment was issued, he must claim
Procedure. damages sustained during the pendency of the
appeal by filing an application in the appellate
386 court with notice to the party in whose favor
the attachment was issued or his surety or
386 SUPREME COURT REPORTS sureties, before the judgment of the appellate
ANNOTATED court becomes executory. The appellate court
may allow the application to be heard and
Paramount Insurance Corporation vs. decided by the trial court.
Court of Appeals “Nothing herein contained shall prevent the
party against whom the attachment was
claimed, ascertained, and awarded under issued from recovering in the same action the
the same procedure
10
prescribed in Section damages awarded to him from any property of
20 of Rule 57. the attaching obligee not exempt from
Rule 57, Section 20, of the 1997 Rules execution should the bond or deposit given by
of Civil Procedure, which is similarly the latter be insufficient or fail to fully satisfy
the award.” (mutatis mutandis)
  described damages, 11 the following
The above rule comes into play when requisites must concur:
the plaintiff-applicant for injunction fails
to sustain his action, and the defendant 1. The application for damages
is thereby granted the right to proceed must be filed in the same case
against the bond posted by the former. In where the bond was issued;
the case at bench, the trial court 2. Such application for damages
dismissed McADORE’s action for must be filed before the entry of
damages with prayer for writ of judgment; and
preliminary injunction and eventually 3. After hearing with notice to the
adjudged the payment of actual, moral, surety.
and exemplary damages against
plaintiffapplicant. Consequently, private  
respondent DECORP can The records of this case reveal that
during its pendency in the trial court,
_______________ DECORP filed its Answer raising
compulsory counterclaims for rescission
10 1997 Rules of Civil Procedure, Rule 58, Sec.
of contract, moral damages, exemplary
8.
damages, 12attorney’s fees and litigation
387 expenses. During the13
trial, Atty. Nonito
Cordero appeared as counsel for
petitioner. PARAMOUNT as well as the
VOL. 310, JULY 19, 1999 387 other sureties were properly notified of
Paramount Insurance Corporation vs. the hearing and given their day in court.
Court of Appeals Specifically, notice was sent to Atty.
Cordero of the hearing on April 27, 1985,
which was set for the purpose of
proceed against the injunction bond
determining the liability of the sureties.
posted by plaintiffapplicant to recover
The counterclaims for damages of
the damages occasioned by the issuance
DECORP were proven at the trial and
by the trial court of the writ of injunction.
yet PARAMOUNT did not exert any
In order for the injunction bond to
effort to controvert the evidence
become answerable for the above-
presented by DECORP. Given these
circumstances, PARAMOUNT cannot present and represented by its counsel Atty.
hide under the cloak of non-liability on Nonito Q. Cordero as shown in the trial court’s
its injunction bond on the mere order dated March 22, 1985 (Annex “A” of
expediency that it was deprived of due Appellee’s Brief). In the said order,
process. It bears stressing that what the PARAMOUNT was duly notified of the next
law abhors is not the absence of previous hearing which was scheduled on April 26,
notice but rather the absolute lack of 14
1985. Evidently, PARAMOUNT was
opportunity to ventilate a party’s side. wellapprised of the next hearing and it cannot
In other words, petitioner cannot feign lack of notice. Having been given an
successfully invoke denial of opportunity to be heard during the main
hearing for the matter of damages,
_______________ PARAMOUNT therefore, cannot bewail that it
was not given an opportunity to be heard
11 Jao, et al. v. Royal Financing Corp., et al., upon denial of its motion to cancel its
No. L-16716, April 28, 1962, 4 SCRA 1210. injunction bond. Of what use, therefore, is
12 RTC Decision, Rollo, pp. 46-47. there to conduct another hearing when the
13 TSN, March 22, 1985, p. 2. issue of damages has been the subject of the
14 Rava Development Corporation v. Court of main action of which PARAMOUNT had been
Appeals, 211 SCRA 144. duly notified? A new notice and hearing
prescribed by Sec. 20, Rule 57, is therefore a
388
repetition and a superfluity.
“Moreover, PARAMOUNT has only itself to
388 SUPREME COURT REPORTS blame when it did not make any opposition or
ANNOTATED objection during the hearing for the reception
of DECORP’s evidence. Having manifested its
Paramount Insurance Corporation vs.
desire to cancel its bond, it should have asked
Court of Appeals
for a deferment of hearing on DECORP’s
evidence but PARAMOUNT did not do
due process where it was given the anything of this sort. Only when an adverse
chance to be heard. As aptly held by the judgment was rendered by the trial court
Court of Appeals, viz.: against its principal McAdore did15it whimper a
“The records of the case disclose that during denial of procedural due process.”
the trial of the case, PARAMOUNT was
 
 On the same point, PARAMOUNT concludes that it is released from its
argues that contrary to the ruling of the obligation as surety.
Court of Appeals, there is a need for a Contrary to petitioner’s thesis, it is
separate hearing for the purpose of neither mandatory nor fatal that there
presenting evidence on the alleged should be a separate hearing in order
damages claimed by DECORP on that damages upon the bond can be
petitioner’s injunction bond. claimed, ascertained and awarded, as can
PARAMOUNT contends that a separate be gleaned from a cursory reading of the
hearing is needed as no evidence dealing provisions of Rule 57, Section 20. This
with DECORP’s claim for damages on Court agrees with the appellate court’s
petitioner’s bond was presented during ruling that:
the hearing wherein petitioner’s counsel
attended nor in the next hearing “Jurisprudential findings laid down the
doctrine that a final adjudication that the
applicant is not entitled to the injunction does
_______________
not suffice to make the surety liable. It is
15 Decision penned by Associate Justice Quirino necessary, in addition, that the surety be
D. Abad Santos and concurred in by Associate accorded due process, that is, that it be given
Justices Vicente V. Mendoza (now Associate an opportunity to be heard on the question of
Justice of the Supreme Court) and Jorge Imperial, its solidary liability for damages arising from a
Rollo, pp. 28-29. wrongful injunction order. Withal, the fact
that the matter of damages was among the
389 issues tried during the hearings on the merits
will not render unnecessary or superfluous a
VOL. 310, JULY 19, 1999 389 summary hearing to determine the extent of a
surety’s liability unless of course, the surety
Paramount Insurance Corporation vs. had been impleaded as a party, or otherwise
Court of Appeals earlier notified and given opportunity to be
present and ventilate its side on the matter
wherein petitioner was notified but failed during the trial.
to attend. Since no hearing was held for “The exception under the doctrinal 16ruling
the purpose of establishing its liability on abovenoted is extant in the case at bar.”
the injunction bond, PARAMOUNT
 
 What is necessary only is for the from the time the suit was commenced. In
attaching party and his surety or short, it claims that the injunction bond
sureties to be duly notified and given the is prospective and not retroactive in
opportunity to be heard. In the case at application.
bench, this Court accords due respect to This Court does not agree. Rule 58,
the factual finding of the Court of Section 4(b), provides that a bond is
Appeals that “PARAMOUNT was executed in favor of the party enjoined to
present and represented by its counsel answer for all damages which he may
Atty. Nonito Q. Cordero as shown in the sustain by reason of the injunction. This
trial17court’s order dated March 22, 1985 x Court already had occasion to18 rule on
x x.” this matter in Mendoza v. Cruz, where it
As stated, PARAMOUNT also argues held that “(t)he injunction bond is
that assuming it is liable on its intended as a security for damages in
injunction bond, its liability should be case it is finally decided that the
limited only injunction ought not to have been
granted. It is designed to cover all
_______________ damages which the party enjoined can
possibly suffer. Its principal purpose is to
16 Rollo, p. 28; citing Philippine Charter protect the enjoined party against loss or
Insurance Corp. v. Court of Appeals, 179 SCRA damage by reason of an injunction.” No
468. distinction was made as to when the
17 Id. damages should have been incurred.
Moreover, when petitioner issued its
390
injunction bond in favor of DECORP, it
was done with the full knowledge of the
390 SUPREME COURT REPORTS relevant facts obtaining in the
ANNOTATED controversy between DECORP and
McADORE. At the time the injunction
Paramount Insurance Corporation vs.
Court of Appeals bond was issued, DECORP was already
claiming arrears in electric bills and
damages from McADORE.
to the amount of damages accruing from
It bears stressing that McADORE was
the time the injunction bond was issued
found liable to pay actual damages,
until the termination of the case, and not
moral damages, exemplary damages, answerable for all damages. “The bond
attorney’s fees and costs of the suit. To insures with all practicable certainty that
argue therefore that PARAMOUNT is the defendant may sustain no ultimate
only liable on its injunction bond from loss in the event that the injunction
the time of its issuance and not from the could finally be dissolved. Consequently,
time the suit was commenced is the bond may obligate the bondsmen to
preposterous if not absurd. Indeed, it account to the defendant in the
would be impossible to determine the injunction suit for all: (1) such damages;
reckoning point when moral damages, (2) costs and damages; (3) costs, damages
exemplary damages, attorney’s fees and and reasonable attorney’s fees as shall be
costs of the suit were supposed to have incurred or sustained by the person
been incurred. Consequently, it can be enjoined in case it is determined that
20
the
safely deduced that the bond answers for injunction was wrongfully issued.” Thus,
any and all damages arising from the PARAMOUNT is liable, jointly and
injunction, regardless of whether it was severally, for actual damages, moral
sustained before or after the filing of the damages, exemplary damages, attorney’s
injunction bond. fees and costs of the suit, to the extent of
the amount of the bond.
_______________ Be that as it may, a scrutiny 21
of
petitioner’s Indemnity Agreement with
18 94 SCRA 821, at 826 [1979]; italics provided. McADORE shows that the former agreed
“to become surety” for the stated amount
391
“in favor of Dagupan Electric Corp.” It
should be noted that McADORE was
VOL. 310, JULY 19, 1999 391 already
22
in arrears starting from June
1979 up to the time it entered into an
Paramount Insurance Corporation vs.
Indemnity Agreement with
Court of Appeals
PARAMOUNT on July 17, 1980.
It may not be amiss to point out that
  by the contract of suretyship, it is not for
PARAMOUNT further maintains that 19 the obligee to see to it that the principal
it is liable to pay actual damages only. pays the debt or fulfills the contract, but
However, Rule 58, Section 4(b), clearly for the surety to see to it that the
provides that the injunction bond is
23
 23
principal pay or perform. The purpose of The posting of a bond in connection
the injunction bond is to protect the with a preliminary injunction (or
defendant against loss or damage by attachment under Rule 57, or
reason of the injunction in case the court receivership under Rule 59, or seizure or
finally decides that the plaintiff was not delivery of personal property under Rule
entitled to it, and the bond is usually 60) does not operate to relieve the party
conditioned accordingly. Thus, the obtaining an injunction from any and all
bondsmen are obligated to account to the responsibility for the damages that the
defendant in the injunction suit for all writ may thereby cause. It merely gives
damages, or costs and reasonable additional protection to the party against
counsel’s fees, incurred whom the injunction is directed. It gives
the latter a right of recourse against
_______________ either the applicant
25
or his surety, or
against both. In the same manner, when
19 Rollo, p. 10. petitioner PARAMOUNT issued the
20 Laureta, op. cit., note 10, at 133-134. bond in favor of its principal, it undertook
21 Rollo, p. 41. to assume all the damages that may be
22 Decision, p. 7, p. 41, Rollo. suffered after finding that the principal is
23 50 Am. Jur 904; Judge Advocate General v. not entitled to the relief being sought.
CA and Alto Surety Co., L-10671, October 23, WHEREFORE, based on the
1958. foregoing, the instant petition is
DENIED. The decision of the Court of
392
Appeals dated April 30, 1993 in CA-G.R.
CV No. 11970 is AFFIRMED. With costs.
392 SUPREME COURT REPORTS SO ORDERED.
ANNOTATED
Davide, Jr. (C.J.), Melo, Kapunan
Paramount Insurance Corporation vs.
and Pardo, JJ., concur.
Court of Appeals
Petition denied; Reviewed decision
or sustained by the latter in case it is affirmed.
determined that 24 the injunction was
wrongfully issued. Note.—The injunction bond answers
only for damages which may be sustained
 by the party against whom the injunction
is issued, by reason of the issuance
thereof, and not to answer for damages
caused by actuations of plaintiff, which
may or may not be related at all to the
implementation of the injunction.
(Valencia vs. Court of Appeals, 263 SCRA
275 [1996])

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_______________

24 Valencia v. Court of Appeals, G.R. No.

111401, 263 SCRA 275 (1996).
25 Ponce Enrile v. Capulong, G.R. No. 88373,
185 SCRA 504 (1990).

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