G.R. No.

88050 January 30, 1992

STRONGHOLD INSURANCE COMPANY,
INC., petitioner,
vs.
HON. COURT OF APPEALS and ADRIANO
URTESUELA, respondents.

then filed a complaint with the Insurance

Commission against Stronghold on the basis of
the aforementioned surety bond and prayed for
the value thereof plus attorney's fees and
litigation costs.
Under the bond, the petitioner and Pan Asian
undertook

T.J. Sumawang & Associates for petitioner.

Linsangan Law Office for private respondent.

CRUZ, J.:
The petitioner invokes due process to escape
liability on a surety bond executed for the
protection of a Filipino seaman. It is a familiar
argument that will be denied, in light of the
following findings.
Acting on behalf of its foreign principal, Qatar
National Fishing Co., Pan Asian Logistics and
Trading, a domestic recruiting and placement
agency, hired Adriano Urtesuela as captain of
the vessel M/V Oryx for the stipulated period of
twelve months. The required surety bond, in
the amount of P50,000.00, was submitted
by Pan Asian and Stronghold Insurance Co.,
Inc., the herein petitioner, to answer for the
liabilities of the employer. Urtesuela assumed
his duties on April 18, 1982, but three months
later his services were terminated and he was
repatriated to Manila. He thereupon filed a
complaint against Pan Asian and his former
employer with the Philippine Overseas
Employment Administration for breach of
contract and damages.
In due time, the POEA rendered a decision in
his favor for the amount of P6,374.94,
representing his salaries for the unexpired
portion of his contract and the cash value of his
unused vacation leave, plus attorney's fees and
costs, which the respondents were required to
pay. The judgment eventually became final and
executory, not having been appealed on time.
Pursuant thereto, a writ of execution was
issued against Pan Asian but could be enforced
only against its cash bond of P10,000.00, the
company having ceased to operate. Urtesuela

To answer for all liabilities

which the Philippine Overseas
Employment Administration
may adjudge/impose against
the Principal in connection with
the recruitment of Filipino
seamen.
It is understood that notice to
the Principal is notice to the
surety. (Exh. "I-2").
WHEREAS, the liability of the
surety under this Bond shall in
no case exceed the sum of
PESOS: FIFTY THOUSAND ONLY
(P50,000.00) Philippine
Currency.
After hearing, the Insurance Commission held
that the complaint should be reformed because
the provisions in the surety bond were not
stipulations pour autrui to entitle Urtesuela to
bring the suit himself. It held that the proper
party was the POEA. 1 This ruling was reversed
on appeal by the respondent court in its
decision dated April 20, 1989. 2 It was there
declared that, as the actual beneficiary of the
surety bond, Urtesuela was competent to sue
Stronghold, which as surety was solidarily
liable with Pan Asian for the judgment rendered
against the latter by the POEA.
The petitioner asks for reversal of the Court of
Appeals. It submits that the decision of the
POEA is not binding upon it because it was not
impleaded in the complaint; it was not notified
thereof nor did it participate in the hearing;
and it was not specifically directed to pay the
damages awarded to the complainant.

In support of its posture, the petitioner cites

abundant jurisprudence, particularly Aguasin
v. Velasquez, 3 where the Court held:
If the surety is to be bound by
his undertaking, it is essential
according to Section 10 of Rule
62 in connection with Section
20 of Rule 59 of the Rules of
Court that the damages be
awarded upon application and
after proper hearing and
included in the judgment. As a
corollary to these
requirements, due notice to the
plaintiff and his surety setting
forth the facts showing his right
to damages and the amount
thereof under the bond is
indispensable. This has to be so
if the surety is not to be
condemned or made to pay
without due process of law. It is
to be kept in mind that the
surety in this case was not a
party to the action and had no
notice of or intervention in the
trial. It seems elementary that
before being condemned to
pay, it was the elementary
right of the surety to be heard
and to be informed that the
party seeking indemnity would
hold it liable and was going to
prove the grounds and extent
of its liability. This case is
different from those in which
the surety, by law and/or by
the terms of his contract, has
promised to abide by the
judgment against the principal
and renounced the right to be
sued or cited.
The Court has gone over the decision and finds
that the petitioner is "hoist by its own petard."
For as the quoted excerpt itself says, the case
is "different from those in which the surety, by
law and/or by the terms of his contract, has
promised to abide by the judgment against the
principal and renounced the right to be sued or
cited."

In the surety bond, the petitioner unequivocally

bound itself:
To answer for all liabilities
which the Philippine Overseas
Employment Administration
may adjudge/impose against
the Principal in connection with
the recruitment of Filipino
seamen.
Strictly interpreted, this would mean that the
petitioner agreed to answer for whatever
decision might be rendered against the
principal, whether or not the surety was
impleaded in the complaint and had the
opportunity to defend itself. There is nothing in
the stipulation calling for a direct judgment
against the surety as a co-defendant in an
action against the principal. On the contrary,
the petitioner agreed "to answer for all
liabilities" that "might be adjudged or imposed
by the POEA against the Principal."
But even if this interpretation were rejected,
considering the well-known maxim that "the
surety is a favorite of the law," the petitioner
would still have to explain its other agreement
that "notice to the Principal is notice to the
surety." This was in fact another special
stipulation typewritten on the printed form of
the surety bond prepared by the petitioner.
Under this commitment, the petitioner is
deemed, by the implied notice, to have been
given an opportunity to participate in the
litigation and to present its side, if it so chose,
to avoid liability. If it did not decide to
intervene as a co-defendant (and perhaps also
as cross-claimant against Pan Asian), it cannot
be heard now to complain that it was denied
due process.
The petitioner contends, however, that the said
stipulation is unconstitutional and contrary to
public policy, because it is "a virtual waiver" of
the right to be heard and "opens wide the door
for fraud and collusion between the principal
and the bond obligee" to the prejudice of the
surety. Hence, disregarding the stipulation, the
petitioner should be deemed as having
received no notice at all of the complaint and
therefore deprived of the opportunity to defend
itself.

The Court cannot agree. The argument

assumes that the right to a hearing is absolute
and may not be waived in any case under the
due process clause. This is not correct. As a
matter of fact, the right to be heard 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. 4
The circumstance that the chance to be heard
is not availed of does not disparage that
opportunity and deprive the person of the right
to due process. This Court has consistently
held in cases too numerous to mention that
due process is not violated where a person is
not heard because he has chosen, for whatever
reason, not to be heard. It should be obvious
that if he opts to be silent where he has a right
to speak, he cannot later be heard to complain
that he was unduly silenced.
Neither is public policy offended on the wicked
ground of fraud and collusion imagined by the
petitioner. For one thing, the speculation
contravenes without proof the presumption of
good faith and unreasonably imputes dishonest
motives to the principal and the obligee. For
another, it disregards the fiduciary relationship
between the principal and the surety, which
is the legal and also practical reason why the
latter is willing to answer for the liabilities of
the former.
In a familiar parallel, notice to the lawyer is
considered notice to the client he represents
even if the latter is not actually notified. It has
not been suspected that this arrangement
might result in a confabulation between the
counsel and the other party to the client's
prejudice.
At any rate, it is too late now for the petitioner
to challenge the stipulation. If it believed then
that it was onerous and illegal, what it should
have done was object when its inclusion as a
condition in the surety bond was required by
the POEA. Even if the POEA had insisted on the
condition, as now claimed, there was still
nothing to prevent the petitioner from refusing
altogether to issue the surety bond. The
petitioner did neither of these. The fact is that,
whether or not the petitioner objected, it in the
end filed the surety bond with the suggested

condition. The consequence of its submission is

that it cannot now argue that it is not bound by
that condition because it was coerced into
accepting it.
This Court has always been receptive to
complaints against the denial of the right to be
heard, which is the very foundation of a free
society. This right is especially necessary in the
court of justice, where cases are decided after
the parties shall have been given an
opportunity to present their respective
positions, for evaluation by the impartial judge.
Nevertheless, a party is not compelled to speak
if it chooses to be silent. If it avails itself of the
right to be heard, well and good; but if not, that
is also its right. In the latter situation, however,
it cannot later complain that, because it was
not heard, it was deprived of due process.
Worthy of consideration also is the private
respondent's contention that he sought to
enforce the petitioner's liability not in NSB Case
No. 3810-82 as decided by the POEA, but in
another forum. What he did was file an
independent action for that purpose with the
Insurance Commission on the basis of the
surety bond which bound the petitioner to
answer for whatever liabilities might be
adjudged against Qatar National Fishing Co. by
the POEA. In the proceedings before the
Commission, the petitioner was given full
opportunity (which it took) to present its side,
in its answer with counterclaim to the
complaint, in its testimony at the hearings, in
its motion to dismiss the complaint, and in its
10-page memorandum. There is absolutely no
question that in that proceeding, the petitioner
was actually and even extensively heard.
The surety bond required of recruitment
agencies 5 is intended for the protection of our
citizens who are engaged for overseas
employment by foreign companies. The
purpose is to insure that if the rights of these
overseas workers are violated by their
employers, recourse would still be available to
them against the local companies that
recruited them for the foreign principal. The
foreign principal is outside the jurisdiction of
our courts and would probably have no
properties in this country against which an
adverse judgment can be enforced. This

difficulty is corrected by the bond, which can

be proceeded against to satisfy that judgment.
Given this purpose, and guided by the benign
policy of social justice, we reject the
technicalities raised by the petitioner against
its established legal and even moral liability to
the private respondent. These technicalities do
not impair the rudiments of due process or the
requirements of the law and must be rejected
in deference to the constitutional imperative of
justice for the worker.
WHEREFORE, the petition is DENIED and the
challenged decision of the Court of Appeals
AFFIRMED in toto. The respondent court is
directed to ENFORCE payment to the private
respondent in full, and with all possible
dispatch of the amount awarded to him by the
POEA in its decision dated May 13, 1983. It is
so ordered.
Narvasa, C.J., Grio-Aquino and Medialdea, JJ.,
concur.

Luzon Surety v Quebrar & Kilayko Digest

G.R. No. L-40517 January 31, 1984
Facts of the Case:
Luzon Surety issued two administrator's bond
in behalf of defendant Quebrar as
administrator of 2 estates (Chinsuy and Lipa).
The plaintiff and both Quebrar and Kilayko
bound themselves solidarily after executing an
indemnity agreement where both the
defendants agreed to pay the premiums every
year. In the years 1954-55, the defendants paid
the premiums and the documnetary stamps. In
1957, the Court approved the project of
partition, while in 1962, Luzon Surety
demanded payments of premiums from 1955
onwards. It was also in the same year when the
court granted the motion of the defendants to
have both bonds cancelled. Hence, plaintiff file
a case in the CFI. The court (CFI) allowed the
plaintiff to recover since the bonds were in
force and effect from the filing until 1962. The

Court of Appeals certified the case to the

Supreme Court on questions of law.
Issue: Are the bonds still in force and
effect from 1955 to 1962?
Ruling. YES. Under Rule 81 (Sec.1) of the Rules
of COurt, the administrator is required to put
up a bond for the purpose of indemnifying
creditors, heirs, legatees and the estate. It is
conditioned uponthe faithful performance of
the administrator's trust. Hence, the surety is
then liable udner the administrator's bond.
Even after the approved project of partitio,
Quebrar as administrator still had something to
do. The administration is for the purpose of
liquidation of the estate and the distribution of
the residue among the heirs and legatees.
Liquidation means the determination of all the
assets of the estate and the payment of all
debts and expenses. it appears that there are
still deblts and expenses to be paid after 1957.
Moreover, the bond stipulationdd not provide
that it will terminate at the end of the 1st year
if the premium remains unpaid. Hence, it does
not necessariy extinguish or terminate the
effectivity of the coutner bond in the absence
of an express stipualtion to this effect. As such,
as long as the defendant remains the
administrator of the estate, the bond will be
held liable and the plaintiff's liabilities subsist
being the co-extensive with the administrator.

G.R. No. L-40334 February 28, 1985

CENTRAL SURETY and INSURANCE
COMPANY, INC., petitioner,
vs.
Hon. ALBERTO Q. UBAY as Judge of the
Court of First Instance of Rizal, Caloocan
City, Branch XXXII and ONG CHI, doing
business under the Firm Name. "TABLERIA
DE LUXE respondents.
Alfredo Feraren for petitioner.
S.I.A. Gonzales for respondents.

ABAD SANTOS, J.:

Ong Chi, doing business under the firm name
"Tableria de Luxe sued Francisco Reyes, Jr. for a
sum of money in the City Court of Caloocan
City. Ong Chi applied for a writ of attachment
and upon filing a bond in the amount of
P6,464.18, a jeep belonging to Reyes was
placed in custodia legis.
Reyes moved to dissolve the writ of
attachment. He posted a counterbond in the
amount of P 6,465.00; his surety was Central
Surety and Insurance Co., the petitioner herein.
The condition of the counterbond is that "in
consideration of the dissolution of said
attachment, [Francisco Reyes, Jr., as principal

and Central Surety and Insurance Co., as

surety] hereby jointly and severally, bind
ourselves in the sum of SIX THOUSAND FOUR
HUNDRED SIXTY FIVE ONLY ( P 6,465.00 )
Philippine Currency, under the condition that in
the case the plantiff recovers judgment in the
action the defendant will on demand redeliver
the attached property so released to the officer
of the Court to be applied to the payment of
the judgment or in default thereof that the
defendant and surety will on demand pay to
the plaintiff the full value of the property
released." (Rollo, p. 11) The writ of attachment
was thereafter lifted and the jeep was returned
to Reyes.
In the course of time, the City Court rendered
judgment as follows:
WHEREFORE, judgment is
hereby rendered in favor of the
Plaintiff and against the
defendant, ordering said
defendant to pay plaintiff the
sum of P 6,964.18, with legal
interests thereon from the date
of the filing of this complaint
until fully paid, plus the sum of
P 500. 00, as and by way of
attorney's fees, and the costs
of the suit. (Id, p. 14.)
Defendant Reyes appealed to the Court of First
Instance of Rizal but said court affirmed the
judgment in toto. (Rollo, p. 16.) Upon finality of
the judgment, a writ of execution was issued
against Reyes. The jeep which was the object
of the attachment was sold by the sheriff for
P4,000.00 and the amount was credited
against the judgment in partial satisfaction
thereof.
Soon after the sale of the jeep, Central Surety
and Insurance Co. filed a motion to cancel the
counterbond. Ong Chi not only opposed the
motion but he also asked that the surety
company pay the deficiency on the judgment
in the amount of P5,730. 00 (P9,730.00 as of
the filing of the motion, less P4,000.00 the
proceeds of the sale of the jeep). The motion
for a deficiency judgment was opposed by the
surety on the ground that it had fulfilled the
condition of the counterbond. Despite the

opposition, the court ordered the surety to pay.

A motion for reconsideration was denied which
accounts for the instant petition.
The issue is whether or not the petitioner
surety is liable for the deficiency. The petitioner
urges a negative answer; it relies on the terms
of the counterbond. Upon the other hand, the
private respondent claims that an affirmative
answer is proper, he relies on Section 17 of
Rule 57, Rules of Court which stipulates thus:
SEC. 17. When execution
returned unsatisfied, recovery
had upon bond. If the
execution be returned
unsatisfied in whole or in part,
the surety or sureties on any
counterbond given pursuant to
the provisions of this rule to
secure the payment of the
judgment shall become
charged on such counterbond,
and bound to pay to the
judgment creditor upon
demand, the amount due
under the judgment, which
amount may be recovered from
such surety or sureties after
notice and summary hearing in
the same action.
The petition is highly impressed with merit.
The stipulation in the counterbond executed by
the petitioner is the law between the parties in
this case and not the provisions of the Rules of
Court.
Under the counterbond, the petitioner surety
company bound itself solidarily with the
principal obligor "in the sum of P 6,465.00
under the condition that in case the plaintiff
recovers judgment in the action, the defendant
will, on demand, redeliver the attached
property so released to the officer of the court
to be applied to the payment of the judgment
or in default thereof that the defendant and
surety will, on demand, pay to the plaintiff the
full value of the property released." The main
obligation of the surety was to redeliver the
jeep so that it could be sold in case execution
was issued against the principal obligor. The

amount of P6,465.00 was merely to fix the limit

of the surety's liability in case the jeep could
not be reached. In the instant case, the jeep
was made available for execution of the
judgment by the surety. The surety had done
its part; the obligation of the bond had been
discharged; the bond should be cancelled.
The impropriety of the orders of the respondent
judge is made more manifest by still another
circumstance. The petitioner's surety bond was
for the amount of P6,465.00. So even on the
assumption that the bond was not discharged,
since the sale of the jeep yielded P4,000.00,
the surety can be held liable at most for
P2,465.00. But the respondent judge ordered
the surety to pay P5,730.00 which is the entire
deficiency and is in excess of P2,465.00. It is
axiomatic that the obligation of a surety cannot
extend beyond what is stipulated.
WHEREFORE, the petition is granted; the
questioned orders of the respondent judge are
hereby set aside and in lieu thereof another is
entered cancelling the petitioner's
counterbond, with costs against the private
respondent.
SO ORDERED.

G.R. No. L-25806 April 29, 1977

THE PEOPLE OF THE PHILIPPINES, plaintiffappellee,
vs.
ELMO CELESTE, accused, RIZAL SURETY &
INSURANCE COMPANY, INC., bondsmanappellant.
Carlos, Madarang, Carballo & Valdez for
appellant.
Solicitor General Antonio P. Barredo, Assistant
Solicitor General Frine C. Zaballero and
Solicitor Sumilang V. Bernardo for appellee.

MUOZ PALMA, J.:

The crux of this appeal lies in the question, viz:
for purposes of discharge of a bondsman from
his liability under a bail bond, is it sufficient
that he produces the accused before the court
for the promulgation of the judgment without
need of his filing a motion or verbally moving
for discharge and without the court expressly
relieving the bondsman from further liability on
his bond?
Appellant Rizal Surety & Insurance Co. answers
the query in the affirmative and avers that the
court a quo erred in holding the contrary and
declaring it liable under its bail bond of Twelve
Thousand Pesos (P12,000.00) filed in Criminal
Case No. 4066 of the Court of First Instance of
Misamis Oriental.

The antecedent facts follow:

On January 17, 1963, Elmo D. Celeste was
charged with frustrated murder in an
Information filed with the Municipal Court of
Cagayan de Oro City. A warrant for his arrest
was issued and a bail bond for his provisional
release was fixed at P12,000.00. The accused
filed the required bond of P12,000.00 with the
Rizal Surety & Insurance Company as his
bondsman, the bail bond been approved on
February 14, 1963. The accused waived his
right to a preliminary investigation and the
record of the case was forwarded to the Court
of First Instance of Misamis Oriental for trial on
the merits. 1
After the trial was completed, the case was set
for promulgation of judgment and on January
31, 1964, the decision was read to the accused
in open court whereby he was found guilty and
sentenced accordingly for the crime of
frustrated homicide. 2
On February 7, 1964, the accused, through
counsel, filed a notice of appeal, hence, on the
same date the trial court issued an order fixing
the bail bond on appeal at
P12,000.00. 3 Because of the failure of the
accused to file the required bail bond, the court
ordered the arrest of the accused. 4
In the meantime the record of the case had
been forwarded to the Court of Appeals. On
April 21, 1965, the Appellate Court dismissed
the appeal of accused Celeste for failure to file
the appellant's brief within the reglementary
period. 5
The case was then remanded to the trial court
which set the promulgation of the Resolution of
the Court of Appeals sending notice thereof to
the Rizal Surety as bondsman of the accused.
For non-appearance of the accused, the
Presiding Judge, Hon. Benjamin K. Gorospe,
issued in open court on September 15, 1965,
an order for the arrest of the defendant and the
confiscation of his bail bond. 6
Appellant herein in a motion dated October 21,
1965, moved for 30 days extension of time to

produce the accused in court and this was

granted. 7
Subsequently, another motion dated November
5, 1965, was filed praying that the order of
confiscation be lifted and that the bail bond be
cancelled and the bondsman released under
said bond, alleging inter alia that conscious of
its undertaking under the bond, movantappellant notified and caused the appearance
of the accused in court for the reading of the
sentence, that the record shows that the
judgment was promulgated in the presence of
the accused and consequently, the bonding
company was relieved of its obligation, having
faithfully complied with its undertaking, to wit:
NOW THEREFORE, the RIZAL
SURETY & INSURANCE
COMPANY, of Manila, hereby
undertakes that the abovenamed ELMO D. CELESTE, will
appear and answer the charge
abovementioned in whatever
court it may be tried, and will
at all times hold himself/herself
amenable to the order and
processes of the court, and if
convicted, will appear for
judgment and render
himself/herself to the execution
thereof; ... 8
Appellant's foregoing motion was denied for
lack of merit in an order dated November 13,
1965. 9
A second motion dated November 26, 1965,
was filed praying for another 30-day extension
to produce the accused which was granted by
the court counted from November 27, 1965
with warning however of no further
extension. 10
In a motion dated December 24, 1965,
appellant moved for a reconsideration of the
November 13, 1965 order which denied its
motion to lift order of forfeiture, praying, in the
alternative, for another extension of 30 days
within which to produce the accused counted
from December 27, 1965. The motion for
reconsideration was denied in an order
dated January 5, 1966, although the surety was

given another extension of 30 days from

December 27, 1965 to surrender the
accused. 11
Hence, this appeal from the Orders of
September 15, 1965, November 13, 1965, and
January 5, 1966.
Appellant in its assignment of errors poses the
following questions:
1. Whether or not it has fully
complied with its undertaking
under the bond;
2. Whether or not it has been
relieved of its liability; and
3. Whether or not its bail bond
would still answer for the
presence of the accused before
the Court for the promulgation
of the judgment of conviction
rendered by the Court of
Appeals. (pp. 6-7, Appellant's
brief)
1. Appellant submits that its liability under the
bail bond extended "only up to the
promulgation of the judgment of conviction"
and inasmuch as it had produced the accused
in court during the promulgation, it is now
relieved from its obligation under the bond;
that to hold otherwise would be to extend the
liability of the surety beyond that stipulated in
the bail bond and to impose an additional
obligation to the bondsman, contrary to Article
1231 of the Civil Code which provides that
obligations are extinguished, among others, by
payment or performance. 12
Appellant's assertion is unfounded. The very
terms of the bail bond provide that the surety
undertakes that the accused will at all times
hold himself amenable to the order and
processes of the court and if convicted will
appear for judgment and render himself to the
execution thereof.
Here, the criminal proceeding in the trial court
consisted mainly of three stages: the trial, the
promulgation of judgment, and the execution

of the sentence. The surety's liability covered

all the three stages appearance of the
accused at the trial, appearance during the
promulgation of judgment, and service by the
accused of the sentence imposed upon him.
This undertaking of the surety is derived from
Section 2, Rule 114 of the Rules of Court which
sets forth the conditions of bail in criminal
cases, viz:
SEC. 2. Condition of the bail.
The condition of the bail is that
the defendant shall answer the
complaint or information in the
court in which it is filed or to
which it may be transferred for
trial, and after conviction, if the
case is appealed to the Court of
First Instance upon application
supported by an undertaking or
bail, that he will surrender
himself in execution of such
judgment as the appellate
court may render, or that, in
case the cause is to be tried
anew or remanded for a new
trial, he will appear in the court
to which it may be remanded
and submit himself to the
orders and processes thereof.
2. To effect the discharge of appellant surety
from its undertaking, it was not enough that it
produced the person of the accused at the time
of promulgation of the decision. Section 16,
Rule 114 sets forth a procedure for discharge
of sureties which was not followed by herein
appellant.
In the early case of People vs. Lorredo, 1927,
the Court, speaking through Justice Antonio
Villa-Real, explicitly ruled that the mere
presentation or presence of an accused in an
open court is not sufficient in itself to cause the
discharge of a bond, for the attention of the
court must be called to his presence and the
intention to surrender the body of the accused
must be clearly and definitely stated and
understood by the Court, and that a surety who
desires to produce and surrender the body of
the accused is not relieved from further liability
upon his bond until the court accepts said
surrender. 13

The ruling in Lorredo was reiterated in People

vs. Valle, defendant, Alto Surety & Insurance
Co., bondsman-appellant, through then Justice,
later Chief Justice, Roberto Concepcion where
the Court stated inter alia that the appellant
surety's liability continued until after the
accused had been surrendered and the court
had ordered the cancellation of its bonds. 14
Again in Mabuhay Insurance & Guaranty, Inc,
vs. Court of Appeals, et al., the Court, this time
through Justice Claudio Teehankee, adhering to
the pronouncements made in Lorredo and
following Sec. 16, Rule 114 of the Rules of
Court, held that a bondsman who wishes to be
relieved from its undertaking should petition
the court for his discharge as a surety, and
inasmuch as petitioner Mabuhay did not avail
itself of Sec. 16, Rule 114 and ask for its
discharge as a surety nor did it manifest to the
trial court at the promulgation of sentence its
wish to be relieved of its responsibility for the
custody of the accused, its liability under the
bond continued to exist. 15
The circumtances present in the instant case
are not course exactly the same as those
in Valle and Mabuhay,nonetheless, the
principles enunciated therein given above are
equally applicable to now appellant Rizal
Surety who as stated earlier did not petition
the trial court that it be discharged from its
bond upon the appearance of the accused
Celeste during the promulgation of the court's
decision for which reason there was no order of
the court cancelling said bond.
3. It is contention of appellant Rizal Surety that
when the accused Celeste filed on February 7,
1964, that is, seven days after the
promulgation of judgment, a notice of appeal,
it was relieved from its undertaking considering
that the trial court ordered the accused to file a
new bond on appeal for P12,000.00, and that
consequently there is no legal basis for holding
appellant liable for the non-appearance of the
accused at the promulgation of the decision of
the Court of Appeals.
At first blush there appears to be some merit to
appellant's plea, but again We cannot
dissociate the situation from
the Lorredo Decision to which We are bound to

adhere based as it is on existing law and

authoritative jurisprudence.
The sureties ibn the Lorredo case were even in
a more pathetic situation, We may say, than
Rizal Surety. There the accused was presented
by the sureties in open court for the
promulgation of the judgment and upon the
decision being read which imposed a fine of
Fifty Pesos (P50.00) on the accused, the latter's
counsel offered a guaranty that the accused
would comply with the judgment within the
period of ten days. Forthwith, the sureties filed
a motion stating that they were surrendering
the body of the accused and asking that they
be relieved of all liability in connection with
their bond. The record of the case did not show
that their motion was acted upon by the court.
The 10-day period expired without the accused
paying the fine as promised. On motion of the
fiscal the trial court ordered the execution of
the judgment, directed the sureties to produce
the body of the accused and at the same time
issued warrants of arrest. The sureties then
explained to the court that they were relieved
from their undertaking with the acceptance by
the court of the guaranty of the lawyer that the
accused would comply with the judgment. This
explanation was not found satisfactory and an
order of forfeiture of the bonds was issued. On
appeal, this Court, as earlier indicated,
sustained the liability of the sureties, and We
quote further from the decision as follows:
From what has been said it
follows that the mere filing of a
motion stating the surrender of
the person of the accused and
asking for their release from
liability upon the obligation
contracted by virtue of a bond
for temporary release, where it
does not appear that the
attention of the court had been
called to said surrender and
that the latter had so
understood it, and without an
express order accepting said
surrender and relieving the
sureties from all liability, does
not relieve them from the
same, notwithstanding the fact
that the court granted the

accused the period of ten days

within which to comply with the
judgment under a verbal
guaranty of his attorney.
(supra, p. 218) I
Thus, in Lorredo the accused promised to
comply with the judgment in ten days, while in
this case of Rizal Surety, the accused filed a
notice of appeal on the seventh day;
in Lorredo the accused failed to comply within
the promised period, in Rizal Surety the
accused failed to file a bond on appeal and his
appeal was eventually dismissed;
in Lorredo, the sureties filed a motion to be
discharged, in Rizal Surety no such motion was
ever filed by the sureties; in Lorredo, the
accused eventually appeared and paid his fine,
while in Rizal Surety, the accused remains at
large; in both, there was no court order
cancelling the bonds.
Under these circumstances, We cannot but
hold Rizal Surety liable under its bond which
through its own inaction it allowed to remain
uncancelled by the trial court. The legal
question posed at the opening of this Decision
calls therefore for a negative answer as
correctly asserted by the Solicitor General. 16
To restate, for a surety to be discharged it is
necessary that he petitions the court for relief
from liability and that the court grants the
petition and cancels the bond.
PREMISES CONSIDERED, We find this appeal
without merit and We hereby affirm the
appealed order of Hon. Benjamin K. Gorospe
dated September 15, 1965, and all subsequent
orders relative thereto with double costs
against appellant.
So ordered.

G.R. No. L-64157-58 April 29, 1987

PHILIPPINE PHOENIX SURETY and
INSURANCE INC., petitioner,
vs.
SANDIGANBAYAN [Third
Division] respondent.
Renato C. Quintana for petitioner.

FERNAN, J.:
The issue in this special civil action for
certiorari is whether or not the Sandiganbayan
acted with grave abuse of discretion in denying
petitioner Philippine Phoenix Surety and
Insurance, Inc.'s motion for the cancellation of
the bail bonds issued to accused Remberto F.
Castro and Winston Dulay were detained at the
PC-INP jail in Camp Crame by virtue of an
Arrest, Search and Seizure Order [ASSO 4735]
for alleged economic sabotage.
On March 3, 1980, two informations for estafa
against Castro were separately filed in Branch
20 and 21 of the Court of First Instance of Rizal
in Pasig [Criminal Cases Nos. 34721 and
347221. On the same day, two informations for
falsification of public documents were
separately filed against him in the Court of First
Instance of Rizal in Pasay City.
On April 1, 1980, Phoenix Surety issued
personal bail bonds for Castro [AAF 01077,
01078, 01079 and 010801. 1Castro paid
P9,832.00 for premiums.
On June 4, 1980, Castro escaped from the
custody of his military escorts while enroute to
attend trial before Branch 20 of the Court of
First Instance of Rizal in Pasig. He has
reportedly left the country since then. Winston
Dulay, on the other hand, is still at large.
In June 1980, Phoenix Surety filed an urgent
motion for cancellation of bail bond before the
Court of First Instance of Rizal, Branch 20 and
21 in Pasig, on the ground that the bonds
posted for Castro were useless because the
military authorities did not recognize them as

legal basis for Castro's release. Judge Gregorio

G. Pineda of Branch 21 denied the motion, it
appearing that Castro was no longer in military
custody as he had escaped. 2

Surety filed the present petition praying that

the resolutions of December 27, 1982 and April
29, 1983 be set aside and that the bail bonds
in favor of Castro be discharged.

Judge Celso L. Magsino of Branch 20, however,

granted Phoenix Surety's motion and relieved
the latter of any responsibility on the personal
bail bond, JCR [21 Bond No. 0619, AAF 0
1065: 3 for the provisional liberty of Castro. 4

'I'he petition is devoid of merit.

In due time, the records of the four criminal

cases against Castro and Dulay were endorsed
to the Office of the Tanodbayan by the Ministry
of Justice. The Tanodbayan consolidated the
cases and filed before the Sandiganbayan two
amended informations charging Castro with
two separate complex crimes of estafa through
falsification of public documents [Criminal
Cases Nos. 5556-5557].
It appears that the Sandiganbayan directed
Phoenix Surety to produce Castro and Dulay
before the court. Despite an extension of the
deadline for complying with the court order,
Phoenix Surety was unable to do so. As a
result, on April 23, 1982, the Sandiganbayan
apparently declared the forfeiture of Dulay's
bond and required the petitioner surety to
show cause why a judgment should not be
rendered against it for the amount of the
bond. 5That prompted Phoenix Surety to file
several motions with the Sandiganbayan
seeking the reconsideration of its order dated
April 23, 1982 insofar as accused Dulay was
concerned, the cancellation of the bond issued
in favor of Castro, and the suspension of the
resolution of the prosecution's motion for
judgment on the bond.
The Sandiganbayan, in its challenged
resolution of December 27, 1982, denied the
motion for reconsideration in connection with
Dulay and refused the cancellation of Castro's
bond as well as the suspension of the
resolution on the motion for judgmenton the
bond. Accordingly, it granted the prosecution's
motion for judgment on the bonds of Castro
and Dulay for their full amount in view of
Phoenix Surety's failure to procure their
presence before the court within the required
period. Upon denial of its motion for
reconsideration on April 29, 1983, Phoenix

Bail is defined by the Rules as the security

required and given for the release of a person
who has been placed under legal custody, that
he will appear before any court in which
hisappearance may be required as stipulated in
the bail bond or recognizance. 6
The purpose of the bail is to relieve an accused
from imprisonment until his conviction and yet
secure his appearance at the trial. 7
To release on bail an arrested person "is to
deliver him in contemplation of law, yet not
commonly in real fact, to others who become
entitled to his custody and responsible for his
appearance when and where agreed." 8 Upon
assumption of the obligation of bail, the
sureties become in law the jailers of their
principal. 9
The conditions of the bail are: [1] If before
conviction, that the defendant shall answer the
complaint or information in the court in which it
is filed or to which it may be transferred for
trial; [2] after conviction, that he will surrender
hiniself in execuLion of the judgment that the
appellate court may render; and [3] that in
case the cause is remanded for new trial, he
will appear in the court to which it may be
remanded and submit himself to the orders
and processes thereof. For failure to perform
any of these conditions, the bond git,en in
security thereof nlay be forfeited. 10
The forfeiture of the bond rests upon the sound
discretion of the court, also dependent upon
the court's discretion is the question of
discharge of the surety. As a general principle,
aside from the instances enumerated in section
16 of Rule 114, the surety, upon application
filed with the court, may also be relieved from
the non-appearance of the bond where its
performance is rendered impossible by the act
of God, the act of the obligee [the Government]
or the act of the law. The exoneration under

the second category is predicated upon the

principle thatthe Government, as the obligee in
the bond, cannot by its own acts prevent the
fulfillment of the conditions of the bond by the
sureties and at the same time demand its
forfeiture. 11
There is no question that in the present case
petitioner Phoenix Surety failed to produce the
body of Remberto F. Castro before the
Sandiganbayan within the required period.
However, Phoenix Surety opted to wash its
hands off the matter by insisting that the bail
bonds it posted for Castro were null and void
since Castro was under military detention [by
virtue of an ASSO issued by the Minister of
National Defense] at the time of his escape. It
argued that considering that the bail bonds
were intended primarily to obtain the
provisional liberty of the accused and this was
rendered impossible by the ASSO, then it would
be more in accord with justice and fairness for
the Sandiganbayan to absolve the surety from
furthelliability on the bonds.
While the argument may be valid, we cannot
fully subscribe to it for the precise reason that
Phoenix Surety is in estoppel. As correctly
observed by the Solicitor General, Phoenix
Surety issued the personal bail bonds of Castro
on April 1, 1980 when latter had already been
under detention for three 131 months. Without
question, Phoenix Surety had knowledge of
Castro's detention by the military when it
issued the bail bonds. As a matter of fact,
Phoenix Surety attached as Annex "F" to the
present petition the letter [dated May 29,
1980] of Castro's counsel requesting petitioner
surety to seek the cancellation of said bc)nds.
Said letter reads in part:
It is unfortunate however that
despite the said bail bonds, the
representations and
assurances of your agent la
certain Alice] to my client that
he woVId thereafter enjoy his
provisional liberty turned to be
false and untrue.
To the present, my client has
not been released from military
custody [Camp Cramel for the

reason that the bail bonds

issued by your company are
not recognized as legal basis
for his release. Your agent
[Alice] knew from the
beginning that my client is
under detention.at Camp
Crame by virtue of an
ASSO ... 12
So, at the outset, Phoenix Surety had offered
for a valuable consideration, to assume the
responsibility under the bond despite
knowledge of Castro's military detention by
reason of an ASSO. It must be presumed that
Phoenix Surety knew fully well that the
existence of the ASSO precluded provisional
release by bail or by any other means.
Under such circumstances and considering that
when the surety posts a bond for the
temporary liberty of an accused, it becomes its
jailer and as such is at all times charged with
the duty to keep him under its surveillance,
which duty continues until the bond is
cancelled, or the surety is
discharged. 13 Phoenix Surety is likewise
deemed to have assumed the responsibility for
Castro's escape and subsequent flight to
another country. It was incumbent upon the
surety to prohibit the accused from leaving the
jurisdiction of the Philippines and placing
himself beyond the reach of its orders and
processes.
In conclusion, the principle of estoppel strongly
militates against the stand taken by Phoenix
Surety. Although the courts are usually liberal
in accepting the explanations of the surety
regarding the cancellation of the bond, such
liberality must not be to the extent of totally
exonerating a surety from an undertaking it
has freely and voluntarily assumed with full
awareness of all its attendant risks.
WHEREFORE, finding no cogent reason to set
aside the resolutions of the Sandiganbayan
dated December 27, 1982 and April 29, 1983,
the Court RESOLVED to DISMISS the instant
petition for lack of merit.
SO ORDERED.

Gutierrez, Jr., Paras, Padilla, Bidin and Cortes,

JJ., concur.