THE PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLANT, VS. TARASA SOLIMAN, ET AL., ACCUSED. CENTRAL SURETY AND INSURANCE CO., BONDSMEN-APPELLEE.

The PEOPLE represented by the Solicitor General appeals from an
Order of the Court of First Instance of Iloilo, Branch VII, in Criminal Case
No. 10233 of said court, dated August 4, 1965, wherein the forfeited bond of
Central Surety and Insurance Co. in the amount of Sixty Thousand Pesos (P60,000.00)
was reduced to 10% thereof or Six Thousand Pesos (P6,000.00).

The following incidents are not in dispute:

In Criminal Case No. 10233 of the Court of First Instance of
Iloilo the Central Surety and Insurance Co. filed surety bonds of Five Thousand
Pesos (P5,000.00) for the provisional liberty of each of twelve Muslims who
were charged with unlawful possession of “Union blue-seal”
cigarettes, all in all amounting to Sixty Thousand Pesos.^[1]

On July 15, 1964
the case was called for arraignment and trial but all the accused failed to
appear.  As the record showed that the
bonding company was duly notified since July 9, 1964, the trial judge in open
court issued an order declaring all the bonds confiscated in favor of the
government, ordering the arrest of the accused, and giving the bonding company
30 days within which to show cause why judgment should not be rendered against
it and to produce the accused before the court.

Motions were filed by the surety company for the court to lift
its order of confiscation and to grant it an extension of time within which to
produce the bodies of the accused.  These
motions were denied.^[2]

On March 25, 1965,
the Provincial Fiscal Alfonso B. Baguio, filed a
“Motion to render judgment against the bonds of all the accused.” The
bonding company moved to defer consideration of said motion, and the trial
court granted the bonding company up to May 8, 1965 to produce all the
accused, otherwise judgment would be rendered against it for the full amount of
the bonds.  Copy of this order was
received by the bonding company on April
30, 1965.  In view of the
non-appearance of the accused on the above scheduled date, Judge Anacleto Bellosillo who was then
presiding the court, in an Order dated June 8, 1965, rendered judgment
against the Central Surety and Insurance Co., Iloilo branch, for it to pay the
Republic of the Philippines the sum of Sixty Thousand Pesos (P60,000.00)
representing the total amount of the bonds it had filed for the provisional
release of the twelve accused.^[3]

On July 10, 1965, a writ of execution was issued to satisfy the
above-mentioned judgment.  Having been
served with copy of the writ, the bonding company through counsel filed a
“Motion for partial remittance” alleging that it had exerted all
efforts possible to bring the accused before the court, spending a lot of money
in the process but which all proved futile, and consequently it had no recourse
but to invoke equity and justice for the court to exercise its discretion in reducing
its liability to five percent of the amount thereof.  This motion was vigorously opposed by the
Provincial Fiscal principally on the grounds that the judgment against the bond
of the surety company was already final and executory
and that the accused had never been apprehended and brought before the
court.  After rejoinder and answer to
rejoinder have been respectively filed by the parties, the trial court in an
Order of August 4, 1965, acted favorably on the motion of the surety
company and reduced the liability of the bonding company from Sixty Thousand
to Six Thousand Pesos and ordered the issuance of another writ of
execution for the said amount.^[4]

The Provincial Fiscal in a motion filed on August 20, 1965, moved
for a reconsideration of the Order of August 4, 1965, stressing that the
judgment on the bond for Sixty Thousand Pesos rendered on July 8, 1965, was
final and could no longer be altered or amended, and on the assumption that
said judgment could still be altered, a partial remittance of said bond is
unjustified inasmuch as the bonding company has not made a partial compliance
of its responsibility and/or liability under the surety bonds filed in favor of
the government.  This motion of the
Provincial Fiscal was opposed by the surety company, the latter invoking the
court’s inherent discretionary power to execute the bond in full or in part
according to the circumstances of each case. 
In the meantime the surety company paid the sum of Six Thousand Pesos
(P6,000.00) to the government.^[5]

Reconsideration having been denied in an Order of September 3,
1965, the PEOPLE elevated the matter to this Court for review, claiming that
there was grave abuse of discretion committed by the court a quo
when it reduced the liability of the bonding company, notwithstanding finality
of the court’s judgment and non-compliance by the former of its obligation to
produce the twelve accused for arraignment and trial.

Surety-appellee asserts however that it
is well-settled in this jurisdiction that the order of confiscation of a bail
bond for failure of the accused to appear “is conditional and
interlocutory”, and that the trial judge herein judiciously upheld the spirit
of liberality towards bondsmen in the matter of reduction of liability on
forfeited bonds.

Admittedly, there is merit to the surety’s assertion that in the
application of the provisions of Section 15, Rule 114 of the Rules of Court^[6]
on forfeiture of bail, this Court has countenanced a liberal attitude of
allowing complete or partial exoneration of the surety’s liability even after
judgment had become final and a writ of execution had been issued depending on
the circumstances of each case.^[7]

The policy however is premised on the presence of two conditions,
viz: 1) that the body of the accused is produced,
and 2) that there is satisfactory explanation for the non-appearance of the
accused when first required by the trial court to appear.  Both conditions must concur.

Thus, in People vs. Alamada,
1951, this Court pronounced that in the forfeiture of bail bonds, courts are
liberal in accepting the explanation of bondsmen, provided the body of the
defendant is produced.  The Court
reduced the liability of the bondsmen even after final judgment and issuance of
a writ of execution because the two conditions were fulfilled – surrender of
the accused and satisfactory explanation for the latter’s non-appearance at the
time he was called to be present in court.^[8]

In the situation before Us the twelve accused were never
surrendered to the trial court thereby leaving the criminal case undisposed to the present. 
Verily, the surety failed in its obligation clearly defined in Section
2, Rule 114 of the Rules of Court thus:

“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.”

Not having complied with the conditions of the bail bonds it
filed for and in behalf of the twelve accused, the surety is not entitled to
exoneration, not even a mitigation of its liability under said bonds.  The Solicitor General therefore correctly
asserts that grave error and grave abuse of discretion were committed by the
trial court in the issuance of its order of August 4, 1965, and that of September 3, 1965, denying reconsideration thereof.^[9]

Had the court a quo been mindful of this Court’s
decision in People vs. Kasim, et al., L – 12624, May 25, 1960, We could have been spared this unnecessary litigation and
avoided so much delay in exacting from the bonding company what is due the
Government.  In Kasim
which is invoked by the Solicitor General in his brief, the question presented
was whether or not the trial court had authority to relieve the bonding company
of part of its liability even though the body of its principal had not been
surrendered to the court, and this Tribunal through then Chief Justice Ricardo Paras explicitly ruled that “(I)t is the bonding
company’s responsibility to produce the accused before the court whenever
required.  Failure to so produce is undisputably a complete breach of the guaranty”,
and that in accordance with Section 15, Rule 110 of the Rules of Court (now
Section 15, Rule 114), if the bonding company fails to produce the body of its
principal, or to give a satisfactory reason for his non-production, a judgment
shall be rendered against it on its bond. 
(underline supplied)

To paraphrase Justice Enrique M. Fernando in Vallangca, et. al. vs. Hon. Crispin G. Ariola, et. al., the law on this matter is clear and
explicit leaving no room for interpretation and it is the bounden duty of the
courts to apply it as worded.^[10]

In Vallangca there was no
surrender of the person of the accused. 
The Court ruled that no error was committed by the lower court in sustaining
the forfeiture of the bail bond of said accused, following its earlier Decision
in People vs. Franklin, accused, Asian Surety & Insurance Co. Inc.,
bondsman-appellant, wherein it was held that a forfeiture of a bail bond is
justified by the failure to produce the accused in court by reason of her
obtaining a Philippine Passport and leaving for the United States.^[11]

Coming back to this appeal now before Us, not only did Central
Surety & Insurance Co. fail to surrender all the twelve accused but it
likewise failed to offer a satisfactory explanation for their
non-appearance.  The record shows that
the only ground invoked by the surety for “partial remittance” of its
liability was “that all possible means have already been diligently
exercised to locate and apprehend said accused but all turned to be futile and
in vain . . . and civilians were hired . . . but without result.” (p. 18,
Amended Record on Appeal) Such statements couched in general terms without
adequate proof to substantiate them are inconclusive and unsatisfactory.^[12]
The surety was well aware when it filed the bail bonds in question that its
principals were all Muslims, residents of Jolo;
consequently, it should have exercised more than ordinary care and diligence in
keeping close surveillance of the whereabouts of said accused to prevent the
latter from jumping bail.  This, the
surety failed to do and it must suffer the consequences.

IN VIEW OF THE FOREGOING, We set aside the orders of the
trial court dated August 4, 1965, and September 3, 1965 respectively, and order
the execution of the bail bonds of Central Surety & Insurance Co. Inc. to
the full amount of Sixty Thousand pesos (P60,000.00), in favor of the Republic
of the Philippines pursuant to the judgment rendered by the trial court on June
8, 1965.

Let copy of this Decision be furnished the Insurance Commissioner
for such action as may be called for in the premises.

So Ordered.

Teehankee, (Chairman), Makasiar, Antonio*, and Martin, JJ., concur.

^[1]
Violation of Sec. 137 (b) in relation to Sec. 174 of the National Internal
Revenue Code, as amended.

^[2]
pp. 3 – 9, Amended Record on
Appeal

^[3]
pp. 10 – 16, ibid.

^[4]
pp. 16 – 36, ibid.

^[5]
pp. 38 – 53, ibid.

^[6]
Same as Section 15 of former Rule 110 taken in turn from Section 76, General
Orders No. 58.

^[7]
Moran on the Rules of Court, 1970 ed. Vol. 4, pp. 169-171, citing: People v.
Reyes, 48 Phil. 139; People v. Alamada,
L-2155, May 23, 1951; People v. Segarino,
L-20138, Nov. 27, 1964; People v. Padilla and Rizal
Surety & Insurance, Co. L-20076, October 30, 1964; People v. Celestino, L-19924, Dec. 23, 1964; People v. Ornales and Alto Surety & Insurance Co., L-20078, Jan.
30, 1965; People v. Familiar, L-17124, June 30, 1966; People v.
del Carmen, L-22082, Oct. 30, 1967; People v. Cabanero,
L-22081, Jan. 17, 1968; People v. Castillejos,
L-21961, April 22, 1968 and several others.

^[8]
89 Phil. 1-2, citing the earlier case of People vs. Calabon,
53 Phil. 945.  See also, among others,
People v. Sanchez, Luzon Surety Co., appellant, L-34222, Jan. 24, 1974
and Summit Guaranty v. Republic, et al., L-44694, Dec. 29, 1976.

^[9]
p. 1, Brief of Solicitor General Antonio P. Barredo,
now Associate Justice of this Court.

^[10]
L- 29226,
September 28, 1973, 53 SCRA 139.

^[11]
L- 21507,
June 7, 1971, 39 SCRA 363.

^[12]
People vs. Ornales, et. al., L-
20078, January 30, 1965; 13 SCRA
133.

* Justice Felix Q. Antonio
was designated to sit in the First Division.