THE REPUBLIC OF THE PHILIPPINES, PLAINTIFF AND APPELLEE, VS. ALTO SURETY & INSURANCE CO., INC., DEFENDANT AND APPELLANT.

Appeal from the decision of the Court of First Instance of Manila in Civil
Case No. 27474, the dispositive portion of which states:

“In view of all the foregoing, judgment is hereby rendered in favor of the
plaintiff, the Republic of the Philippines, and against the defendant, Alto
Surety & Insurance Co., Inc., ordering the latter to pay to the former the
sum of P51,021.00, with legal interest from the date of filing of the complaint
until it is fully paid, and the costs of suit.”

Briefly, the facts and circumstances of the case may be narrated as follows:
On September 9, 1955, the plaintiff, Republic of the Philippines, filed suit
against the defendant, Alto Surety & Insurance Co., Inc., praying that the
latter be condemned to pay the sum of P51,021.00 representing the liability
assumed by it under Alto Bond No. C-9060, the pertinent terms and conditions of
which are hereunder reproduced:

“Now therefore, for and in consideration of the above, we Ted Lewin, as
principal, and the ALTO SURETY AND INSURANCE Co,, INC., a corporation duly
organized and existing under and by virtue of the laws of the Philippines, as
Surety, in consideration of the above and of the issuance by the Bureau of
Internal Revenue to Ted In of a Tax Clearance, hereby jointly and severally bind
ourselves in the sum of Pesos Fifty-one Thousand Twenty-One Only (P51.021.00),
Philippine Currency, under the conditions that Ted Leivin will return to the
Philippines within three (3) months from the date of his departure and should he
fail to do so, that we be liable to the Bureau of Internal Revenue for his
Corporate Tax Assessments in the amount first above-mentioned.”

which conditions, plaintiff asserts, were violated when Ted Lewin failed to
return to this country within the period therein stipulated. In its answer, the
defendant admitted that “its principal, Ted Lewin, has not returned to the
Philippines notwithstanding the lapse of three months,” but denied that he has
no intention of returning. By ; way of special defense, the surety alleges that
plaintiff, by its own act or acts, has prevented the compliance of the condition
imposed on the bond, when, through its Department of Foreign Affairs, it issued
Foreign Service Circular Noa. 329 and 428, dated December 2, 1953 and June 3,
1954, respectively, the contents of which are mentioned elsewhere below.

At the trial, the parties submitted a stipulation of facts, which, for easy
reference, is hereunder quoted in full:

“COME now plaintiff and defendant, thru respective undersigned attorneys, and
to this Honorable Court respectively submit the following agreed statement of
facts-“

1. That on June 15, 1953, the Collector of Internal Revenue assessed against
and demanded from Messrs. Ted Lewin and Jose L. P. fe Leon the payment of the
sum of P51,021.00 as corporate income! tax due from the latter for the year
ending December 31, 1953;’

2. That on or about September 23, 1953, Mr. and Mrs. Ted Lewin applied for a
tax clearance with the Bureau of Internal Revenue because they intend to leave
the Philippines for the United States;

3. That because Ted Lewin has a pending tax liability in the aforesaid amount
of P51,021.00 the Bureau of Internal Revenue required said Ted Lewin to file a
surety bond in its favor in the same amount to guarantee his return to the
Philippines to answer for his aforesaid tax liability;

4. That on September 25, 1953, Ted Lewin, as principal and the defendant Alto
Surety & Insurance Co., Inc., as surety, jointly and severally posted and
filed a surety bond with the Bureau of Internal Revenue in thS amount of
P51.021.00, which bond was accepted by Me latter office, ‘under the condition
that Ted Lewin would return to the Philippines within three (3) months from the
date of his departure and should he fail to do so, that we shall be liable to
the Bureau of Internal Revenue for his corporate tax assessments in the amount
first above-mentioned.’ A true copy of the bond is attached as Annexed ‘A’ to
the complaint and made an integral part of this pleading;

5. That to assure the return of Ted Lewin. to the Philippines, he secured a
Permit to Re-enter the Philippines, No. 70155, from the Bureau of Immigration,
the date of its issue being September 16, 1954. A certified true copy of said
‘Permit to Re-enter the Philippines’ is hereto attached and made a part of the
pleading and is marked as Annex ‘B’;

6. That Ted Lewin left the Philippines on September 26, 1953, and has not
returned to the Philippines within’ the stipulated three months from the date of
his departure;

7. That on December 9, 1953, the Department of Foreign Affairs issued Foreign
Service Circular No. 329 to the effect that ‘No-Philippine visa of any kind
should be issued to this person (Ted Lewin) without prior authorization from the
Department.’ A true copy of the same is attached herewith as Annex ‘C’;

8. That on June 3, 1954, the Department .of Foreign Affairs issued again
another Foreign Service Circular No. 428 directing- ‘that the necessary steps
should be immediately taken by all Philippines foreign service establishments
abroad, particularly those in the United States from which he (Ted Lewin) might
try to obtain a visa, with a view to refusing him readmission into this
jurisdiction.’ A true copy of the same is hereto attached as Annex ‘D’;

9. That on or about October 25, 1955, Ted Lewin managed to return to the
Philippines on a seaman’s visa, on board the vessel ‘Maria Incs’, which anchored
at Manila Bay, and sought to re-enter the Philippines as a permanent resident
but plaintiff did not allow him to land;

10. That on December 14, 1955, Ted Lewin instituted Civil Case No. 28309 in
the Court of First Instance of Manila against the Commissioner of Immigration
and the Commissioner of Customs for the purpose of releasing him from
confinement but the herein plaintiff resisted said case resulting in the
dismissal thereof, the Court stating in its decision that Ted Lewin has failed
to state a cause of action to justify the issuance of habeas corpus.

“Wherefore, it is respectfully prayed that judgment be rendered in accordance
with the above agreed statement of facts.”

In this appeal, as well as in the lower court, the appellant surety company
urges that by virtue of the act or acts of the appellee, mentioned from
paragraphs 7 to 10 of the agreed stipulation of facts, either the latter is
estopped from confiscating or forfeiting the bond in its favor or the appellant
surety company was released from t» liability under the same.

In the series of acts complained by the appellant, the , On’y one relevant to
the present dispute refers to Foreign Service Circular No. 329 issued on
December 2, 1953 (See Par. 7 of the Agreed stipulation of Facts,
supra), to the effect that “No Philippine visa of any kind should be
issued to this person (Ted Lewin) without prior author-‘ ization from the
Department”. The others have no pertinence to the case, considering that they
took place after the three-month period fixed in the bond; so that, whether true
or untrue, they have little or no significance on appellant’s liability or
non-liability under the bond.

Basing the resolution of the case solely on the facts as found by the lower
court, this being an appeal by certio-rari, there is little doubt but that it
was correct in rendering the decision appealed from. It appears that Ted Lewin
was issued, before his departure (and before Alto Bond No. C-9060 was executed
by and between the parties), a reentry permit by the government, wherein it was
expressly provided that possession thereof “relieves the alien to whom it is
issued from the necessity of securing a visa from a Philippine or United States
consul before returning to this country.” The same had an expiry date of March
16, 1954. The questioned foreign service circular (No. 329), it will be
observed, did not revoke or cancel the said reentry permit. Nothing therein is
said or mentioned that would warrant a different conclusion. There was,
accordingly, no necessity for him (Lewin) to still secure a visa to be able to
return to this country within the aforesaid period of three months.

On the other hand, if it had been shown that Foreign Service Circular No. 329
had the effect, one way or the other, of preventing the principal, Ted Lewin,
from being able to return to the Philippines within the stipulated term of the
bond or that it actually increased the risk originally undertaken by
the surety company, such circular, an act of the appellee, might have had the
effect of discharging the appellant from its agreed liability or, at least, of
justifying Lewin’s failure to return within the required period. But no such
showing was made during the trial nor was anything to that effect mentioned by
the parties in their stipulation of facts. In fact, as observed by the lower
court, it does not appear that Lewin ever applied for any visa
nor had he manifested any intention of returning within the three-month term.
The foregoing are factors that are incumbent upon the surety company to show in
order to extricate itself from its liability under the bond.

During the pendency of this appeal, appellant filed with this Court a motion
for new trial, which, per resolution of March 28, 1958, would be resolved upon
consideration of the case on the merits. It is alleged as grounds for new trial
that the case was submitted for decision without the testimony of the
appellant’s principal; that when Ted Lewin, its principal, reached the
Philippines on a seaman’s visa, appellee successfully blocked his efforts,
administrative and judicial, to land in the Philippines; that during that time,
appellant tried to subpoena him to testify in the hearing of this case, but was
prevented from doing so, as his landing was made impossible by the appellee and
because of the difficulty of serving a subpoena on board the ship, so that it
was thereby made impossible for the appellant to discover and produce Lewin’s
testimony; that recently, however, the Government reversed its stand and allowed
the temporary return of appellant’s principal thereby making available his
testimony to the court; and that if the motion will be granted, appellant will
be able to show that when Ted Lewin arrived in New York on October 2, 1953, his
passport, together with other papers, including the reentry permit, were
confiscated by the U. S. authorities, and he was able to secure their return
only some time in August, 1955, and that he tried to return to the Philippines
during the period of confiscation, but that he was not able to do so because of
the refusal of Philippine consular officials to issue him a visa.

One of the requirements for the granting of a motion for new trial is a
satisfactory showing that even with the exercise of reasonable diligence, the
new matter sought to be admitted could not have been discovered and produced at
the trial (Sec. 1 [b], Rule 37, Rules of Court). From the motion, it would
appear that Ted Lewin’s presence within our territorial waters during the
pendency of the trial was already known by the appellants. His intended
testimony could have been, upon reasonable effort, made available to the court
had appellant simply made use of one or some of the means provided under Rule 18
of the Rules of Court (entitled Depositions and Discovery). It is not alleged
that appellant tried to do so and failed. Accordingly, the motion for new trial
is denied.

Wherefore, the judgment appealed from is hereby affirmed. Costs against the
appellant.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion,
Barrera, and Gutierrez David, JJ., concur.

Judgment affirmed.