G.R. No. 222955 , October 16, 2019
People of the Philippines, Petitioner, v. Industrial Insurance Company, Inc., Respondent.

FACTS

Respondent Industrial Insurance Company, Inc. (IICI) executed a General Agency Agreement with FGE Insurance Management, owned by Feliciano Enriquez, and appointed Enriquez as its Operations Manager for Judicial Bonds – Criminal Cases with authority to issue bonds up to P100,000. In Criminal Case No. 2245-M-2006 for illegal possession of drugs, the accused Rosita Enriquez posted a bail bond for P200,000, signed by Feliciano Enriquez and approved by the court. IICI revoked Enriquez’s authority on July 7, 2008, for failure to remit premiums and account for transactions, and notified the Court Administrator. On May 31, 2010, the RTC, due to the accused’s non-appearance, ordered the forfeiture of the bond and directed IICI to produce the accused. IICI failed to comply. On October 20, 2010, IICI filed a motion to lift the forfeiture order, arguing the bond was void as it violated the Insurance Code (exceeding the P100,000 limit) and court guidelines, and that the forfeiture violated procedural rules. The RTC denied the motion and ordered execution, ruling no grounds for cancellation existed, the Clerk of Court’s approval carried a presumption of regularity, and IICI failed to inform the court of the revoked authority despite having notified it of a new address for communications in a letter dated October 16, 2008. The CA granted IICI’s certiorari petition, finding grave abuse of discretion by the RTC and declaring the bond void due to defects: Enriquez exceeded his authority (P200,000 vs. P100,000 limit), the accused’s waiver of appearance was not under oath, and the affidavit of justification used a Community Tax Certificate which is not competent evidence of identity. The People, through the OSG, filed this petition.

ISSUE

Whether the Court of Appeals erred in ruling that the Regional Trial Court committed grave abuse of discretion in denying IICI’s motion to lift the forfeiture order and in ordering execution against the bail bond.

RULING

The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the CA Decision and Resolution, and REINSTATED the RTC Orders. The Court ruled that the RTC did not commit grave abuse of discretion. The Court applied the principle of estoppel by silence against IICI. After revoking Enriquez’s authority and notifying the court of its new address in October 2008, IICI received multiple Produce Orders from the RTC (from December 2008 to April 2010) directing it to produce the accused. Despite this knowledge of the bond’s existence and the court’s reliance on it, IICI remained silent and failed to inform the RTC of the alleged irregularities or move for the bond’s cancellation until after the forfeiture order was issued in October 2010. This silence, when IICI had a duty to speak to prevent fraud on the court, estopped it from later assailing the bond’s validity. The Court emphasized that had IICI been diligent, the RTC could have cancelled the bond and possibly prevented the accused from fleeing.