G.R. No. 222955 - People vs. Industrial Insurance Co., Inc.

The Industrial Insurance Company, Inc. (IICI), a non-life insurance provider, executed a General Agency Agreement with FGE Insurance Management, a single proprietorship owned by Feliciano Enriquez, designating FGE as its general agent for soliciting non-life insurance policies including bonds.
IICI, through its Board of Directors, appointed Enriquez as Operations Manager for Judicial Bonds in criminal cases with a specified authority to issue bonds up to a maximum of ₱100,000.

In the criminal case against Rosita Enriquez for illegal possession of drugs, the accused posted a bail bond amounting to ₱200,000 before the Regional Trial Court (RTC) under Criminal Case No. 2245-M-2006. The bond was signed by Enriquez and approved by the presiding judge.
On July 7, 2008, IICI revoked Enriquez’s authority after it discovered his failure to remit proper premiums, provide full written accounting of his bail bond transactions, or furnish complete copies of the bonds he filed with the courts. The revocation was communicated to both the Court Administrator and the Sandiganbayan.

Due to the accused’s failure to appear at the scheduled hearing, Judge Albert R. Fonacier of the RTC issued an Order on May 31, 2010 declaring the bail bond forfeited in favor of the Government, and directing IICI to produce the accused within 30 days.
Owing to the continued absence of the accused and IICI’s inaction—compounded by the manifestation from the accused’s counsel that she had already left the country—the RTC subsequently issued a Produce Order on August 16, 2010, again directing IICI to show cause why a judgment should not be rendered against the bond.
Despite repeated Produce Orders sent to IICI’s designated address in Malate, Manila, IICI neither produced the accused nor informed the RTC of Enriquez’s revocation of authority.

On October 20, 2010, IICI filed its motion to lift and recall the forfeiture order against Bail Bond No. JCR (2) 005246. It contended that the bail bond was void for several reasons:

The bond was issued in violation of Sections 226 and 361 of the Insurance Code.
It should have been disapproved by the Office of the Clerk of Court and returned to IICI pursuant to Administrative Matter (A.M.) No. 04-7-02-SC (Guidelines on Corporate Surety Bonds).
The forfeiture of the bond was imposed in violation of Section 13, Rule 114 of the Revised Rules on Criminal Procedure.

Judge Fonacier denied this motion on January 24, 2011, and reiterated his grounds in a subsequent Order on May 6, 2011, while also authorizing the issuance of a writ of execution against the bond.

IICI elevated its issue by filing a petition for certiorari before the Court of Appeals (CA), contesting the RTC’s orders and alleging grave abuse of discretion by Judge Fonacier.
In its Decision dated April 10, 2015, the CA ruled that the proper remedy was the petition for certiorari and found that Judge Fonacier’s denial of the motion to lift and recall the forfeiture order was tainted with grave abuse of discretion, amounting to lack or excess of jurisdiction.
The CA identified several defects in the issuance of the bail bond, including:

Enriquez’s unilateral increase of the bond amount to ₱200,000, which did not bind IICI;
The absence of an oath in the waiver of appearance; and
The affidavit of justification relying on a community tax certificate (CTC) that lacked a photograph, making it an insufficient proof of identity.

The petition for reconsideration filed by IICI before the CA was denied through a Resolution dated February 4, 2016.

The Office of the Solicitor General, on behalf of the People of the Philippines, later submitted clarifications concerning IICI’s operational status, including confirmation of the merger between IICI and Sterling Insurance Co., Inc., with Sterling as the surviving entity and an updated address provided.
IICI, through its counsel, filed an Explanation and Compliance on December 19, 2018 explaining its inability to produce further substantive comments due to difficulties in locating or retrieving pertinent records amid a physical transfer of company documents from IICI to Sterling.
The Court, in its Resolution dated February 6, 2019, accepted IICI’s Explanation and Compliance and dispensed with the filing of a substantive comment on the petition.

Whether Judge Fonacier’s denial of IICI’s motion to lift and recall the forfeiture order and the subsequent issuance of a writ of execution were marred by grave abuse of discretion amounting to lack or excess of jurisdiction.

Did the RTC, in proceeding with forfeiture despite alleged defects in the bail bond, exceed its judicial discretion?
Was it proper for the court to anchor its decision on the assumption that the bond’s issuance was regular, notwithstanding IICI’s later allegations of irregularity?

Whether the defects noted in the bail bond’s issuance—namely, the unauthorized increase of the bond amount, the non-oath executed waiver of appearance, and the insufficient affidavit of justification—merit the cancellation of the bail bond.

Does a unilateral act by an agent, like Enriquez’s increase of the bond amount, detach the bond from the principal’s (IICI’s) liability?
Were the procedural lapses in the bond’s formation sufficient to warrant judicial relief?

Whether IICI’s repeated failure to notify the court about the revocation of Enriquez’s authority, and its prolonged silence regarding the alleged irregularities, estopped it from later contesting the validity of the bail bond.

Can the principle of equitable estoppel be applied where a party’s inaction leads the court to operate under a mistaken assumption?
How did IICI’s silence affect the court’s handling of the bail bond and its subsequent orders?