G.R. No. 156162 - CCC INSURANCE CORPORATION, VS. KAWASAKI STEEL CORPORATION, F.F. MAÑACOP CONSTRUCTION CO., INC., AND FLORANTE F. MAÑACOP.

Ruling

WHEREFORE , the instant appeal is hereby GRANTED . Accordingly, the assailed decision of the Regional Trial Court of Makati City, Branch 66, is hereby REVERSED and SET ASIDE . CCC Insurance Corporation is hereby ordered to pay KAWASAKI the following: 1. The amount of P3,103,803.90 representing its liability to Kawasaki Steel Corporation under Surety Bond No. B-88/11191, plus legal interest at the rate of 12% per annum computed from 15 September 1989, until fully paid; 2. The amount of P2,069,202.80 representing its liability to Kawasaki Steel Corporation under Performance Bond No. B- 88/11193, plus legal interest at the rate of 12% per annum computed from 15 September 1989, until fully paid; and 3. 15% of the total amount due as and for attorney's fees. [23] In its Resolution dated November 14, 2002, the Court of Appeals denied the Motion for Reconsideration of CCCIC. However, in the same Resolution, the appellate court partially granted the Third-Party Complaint of CCCIC by holding Mafiacop liable under the Indemnity Agreements he executed in favor of the insurance company, while declaring the RTC was without jurisdiction over FFMCCI due to invalid service of summons. The Court of Appeals ultimately resolved: WHEREFORE , judgment is hereby rendered in favor of third-party plaintiff CCC Insurance Corporation and against third-party defendant Florante F. Mafiacop, ordering the latter to indemnify the former the total amount paid by the former to Kawasaki Steel Corporation representing CCC Insurance Corporation's liabilities under Surety Bond No. B-88/11191 and Performance Bond No. B-88/11193 and to pay CCC Insurance Corporation 25% of the total amount due, as and for attorney's fees. [24] In the instant Petition for Review on Certiorari , CCCIC assails the aforementioned Decision and Resolution of the Court of Appeals on six grounds, viz .: A. THE COURT OF APPEALS, CONTRARY TO LAW, FAILED TO CONSIDER THE TRUE NATURE OF THE TRANSACTION BETWEEN THE PARTIES AND THE TRUE NATURE OF A COUNTER-GUARANTEE. B. THE COURT OF APPEALS, CONTRARY TO LAW, FAILED TO APPRECIATE THE APPLICABILITY OF ARTICLE 2079 OF THE CIVIL CODE, WHICH PROVIDES THAT AN EXTENSION GRANTED TO THE DEBTOR BY THE CREDITOR WITHOUT THE CONSENT OF THE GUARANTOR EXTINGUISHES THE GUARANTY. C. THE COURT OF APPEALS, CONTRARY TO LAW, ERRONEOUSLY FAILED TO CONSIDER THE FACT THAT KAWASAKI AND FFMCCI HAVE NOVATED THEIR ORIGINAL AGREEMENT WITHOUT THE KNOWLEDGE AND CONSENT OF CCCIC, THEREBY RELEASING THE LATTER FROM ANY OBLIGATION UNDER THE BONDS IT ISSUED. D. THE COURT OF APPEALS, CONTRARY TO LAW, ERRONEOUSLY RENDERED CCCIC LIABLE TO PAY THE FULL AMOUNT OF THE SURETY AND PERFORMANCE BONDS DESPITE THE FACT THAT FFMCCI WAS ABLE TO PARTIALLY EXECUTE ITS PORTION OF THE WORK AND THAT KAWASAKI HAD BEEN FULLY COMPENSATED FOR TAKING OVER THE UNFINISHED PORTION. E. THE COURT OF APPEALS, CONTRARY TO LAW, ERRONEOUSLY AWARDED ATTORNEY'S FEES TO KAWASAKI UNDER PARAGRAPH 2 OF ARTICLE 2208 OF THE CIVIL CODE. F. THE