G.R. No. L-9928 - Republic vs. Court of Appeals

On 27 June 1947, the President of the Republic of the Philippines ordered the deportation of Chung Kiat Kang as an undesirable alien.
Pending reconsideration of the deportation order, Chung Kiat Kang was allowed temporary release upon the filing of a surety bond.
The Manila Surety & Fidelity Company, Inc. filed a surety bond in the amount of P30,000 on 3 July 1947 for the temporary release of the principal.
Two other respondents, Cheng Ban Yek & Company, Ltd. and Chung Liu, acted as sureties for a counterbond.

The petition for reconsideration of the deportation order was denied on 3 May 1949.
The Commissioner of Immigration required Chung Kiat Kang to report personally; however, he failed to appear and report as stipulated in the bond.
As a consequence of the breach of the bond conditions by both the principal and the sureties, on 16 May 1949 the Commissioner declared the surety bond forfeited, notifying the parties the following day and demanding payment within 24 hours.
The Manila Surety & Fidelity Company, Inc. failed to pay the demanded amount, leading to the filing of a complaint in the Court of First Instance of Manila on 1 August 1949.

On 5 January 1952, the Court of First Instance of Manila rendered a judgment declaring the surety bond forfeited.
The judgment further ordered:

Payment of P30,000 with 6 percent interest from the date of filing until paid.
The sureties, namely Cheng Ban Yek & Company, Ltd. and Chung Liu, to indemnify the Manila Surety & Fidelity Company, Inc. for any amount paid to the Republic, with additional interest and attorney’s fees.

At the hearing in the Court of Appeals, counsel for the appellants and the sureties introduced additional evidence marked as Exhibits "1-Appeal" and "2-Appeal".
These exhibits purported to show that the Chairman of the Deportation Board had authorized the release and/or cancellation of the cash and surety bonds filed on behalf of Chung Kiat Kang.
Based largely on Exhibit "2-Appeal", the Court of Appeals reversed the judgment of the Court of First Instance by holding that the release and/or cancellation of the bonds was proper.

A key point of contention was whether the Chairman of the Deportation Board was vested with the authority to release or cancel the bonds.
The petitioner (Republic of the Philippines) argued that the probationary release or cancellation of the bond by the Chairman was not supported by law, and that the breach of the surety bond conditions by both the principal and the surety justified the forfeiture.
The reversal by the Court of Appeals stood on the misapprehension that the Chairman possessed such authority, a point which became central in the subsequent appellate review.

Whether the Chairman of the Deportation Board had the authority to release or cancel the cash and surety bonds filed on behalf of Chung Kiat Kang for his temporary release.
Whether the revocation of the deportation order and subsequent release or cancellation of the bond could annul or set aside the forfeiture order declared by the Commissioner of Immigration and the Court of First Instance, despite the breach of bond conditions by the principal and the surety.