G.R. No. 179628 - THE MANILA INSURANCE COMPANY, INC.. VS. SPOUSES ROBERTO AND AIDA AMURAO.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, we resolve to DISMISS the petition as we find that no grave abuse of discretion attended the issuance of the order of the public respondent denying the petitioners motion to dismiss. IT IS SO ORDERED . [32] Petitioner moved for reconsideration but the CA denied the same in a Resolution [33] dated September 7, 2007. Issues Hence, this petition raising the following issues: A. THE HONORABLE [CA] ERRED WHEN IT HELD THAT IT IS ONLY WHEN THERE ARE DIFFERENCES IN THE INTERPRETATION OF ARTICLE I OF THE CONSTRUCTION AGREEMENT THAT THE PARTIES MAY RESORT TO ARBITRATION BY THE CIAC. B. THE HONORABLE [CA] ERRED IN TREATING [PETITIONER] AS A SOLIDARY DEBTOR INSTEAD OF A SOLIDARY GUARANTOR. C. THE HONORABLE [CA] OVERLOOKED AND FAILED TO CONSIDER THE FACT THAT THERE WAS NO ACTUAL AND EXISTING CONSTRUCTION AGREEMENT AT THE TIME THE MANILA INSURANCE BOND NO. G (13) 2082 WAS ISSUED ON FEBRUARY 29, 2000. [34] Petitioners Arguments Petitioner contends that the CA erred in ruling that the parties may resort to arbitration only when there is difference in the interpretation of the contract documents stated in Article I of the CCA. [35] Petitioner insists that under Section 4 of E.O. No. 1008, it is the CIAC that has original and exclusive jurisdiction over construction disputes, such as the instant case. [36] Petitioner likewise imputes error on the part of the CA in treating petitioner as a solidary debtor instead of a solidary guarantor. [37] Petitioner argues that while a surety is bound solidarily with the obligor, this does not make the surety a solidary co-debtor. [38] A surety or guarantor is liable only if the debtor is himself liable. [39] In this case, since respondent-spouses and Aegean agreed to submit any dispute for arbitration before the CIAC, it is imperative that the dispute between respondent- spouses and Aegean must first be referred to arbitration in order to establish the liability of Aegean. [40] In other words, unless the liability of Aegean is determined, the filing of the instant case is premature. [41] Finally, petitioner puts in issue the fact that the performance bond was issued prior to the execution of the CCA. [42] Petitioner claims that since there was no existing contract at the time the performance bond was executed, respondent- spouses have no cause of action against petitioner. [43] Thus, the complaint should be dismissed. [44] Respondent spouses Arguments Respondent-spouses, on the other hand, maintain that the CIAC has no jurisdiction over the case because there is no ambiguity in the provisions of the CCA. [45] Besides, petitioner is not a party to the CCA. [46] Hence, it cannot invoke Article XVII of the CCA, which provides for arbitration proceedings. [47] Respondent-spouses also insist that petitioner as a surety is directly and equally bound with the principal. [48] The fact that the performance bond was issued prior to the execution of the CCA also does not affect the latters validity because the performance