CASE BrieF NO. 2008-1423


The posting of a cash or surety bond is a requirement sine qua non for the perfection of an appeal from the labor arbiter’s monetary award.”


CASE: Kenji Okada vs. Security Pacific Assurance Corporation [G.R. No. 164344  December 23, 2008

PONENTE: Associate Justice Ruben T. Reyes

SUBJECT:

  1. LABOR LAW:
    i. Appeal Bond – Perfection of an appeal from the labor arbiter’s monetary award.
  2. REMEDIAL LAW:
    i. Rule 46 – Effect of failure to furnish copy of the petition to the other party
    ii. Rule 65 – When available

FACTS:           Kenji Okada filed a complaint for illegal dismissal, payment of service incentive leave, 13th month pay, damages, and attorney’s fees against then Meiyu Technology Corporation (Meiyu) and its officers before the Labor Arbiter (LA).

The LA rendered judgment in favor of Okada and thereby directed Meiyu to pay Okada the amount of P6,380,000.00 representing the monetary awards and attorney’s fees.

Meiyu appealed the decision to the NLRC. It posted an appeal bond issued by Wellington Insurance Co., Inc. in the amount equivalent to the monetary judgment.

The NLRC reversed the decision of the Labor Arbiter on the ground of prescription.

Aggrieved, Okada moved for reconsideration of the NLRC judgment. In his motion for reconsideration, he averred that the appeal was not perfected because the bond posted by Meiyu was spurious. It had no legal effect. Hence, the decision of the Labor Arbiter became final and executory.

Upon verification, the NLRC found that the appeal bond was, indeed, spurious. It then set aside its earlier decision and reinstated the Labor Arbiter’s Decision in favor of Okada.

Meiyu elevated the matter to the CA via petition for certiorari.

Meantime, Okada moved for the execution of the LA award. Meiyu opposed Okada’s motion for execution pending appeal, alleging it did not know that the appeal bond it earlier filed was spurious. Together with the petition to the CA, it posted another appeal bond, this time issued by Security Pacific Assurance Corporation (SPAC), with the purpose of staying the execution of the LA’s decision.

The CA denied Meiyu’s petition. It held that Meiyu failed to perfect its appeal because a fake or spurious bond produces no legal effect. It further ruled that the LA’s decision lapsed into finality.

Eventually, a writ of execution was issued by the LA.

SPAC filed a manifestation and motion to quash writ of execution before the LA. It posited that it should be discharged from any liability on the bond it issued to Meiyu on the following grounds: (1) the bond would not have served its purpose of staying the execution or perfecting the appeal required under Article 223 of the Labor Code; (2) the bond was filed only when the case was already with the CA or long after the Honorable Commission declared the appeal from the LA’s decision ineffective; and (3) said bond was not approved at all by the tribunals concerned because the CA sustained the NLRC’s dismissal of the appeal.

In its Order, the LA denied SPAC’s motion to quash writ of execution.

Undaunted, SPAC filed a petition for certiorari and prohibition with the CA, seeking the quashal of the writ of execution. The CA granted the same.

Okada questioned the CA’s Decision via Rule 45 to the Supreme Court. Okada insists that a surety contract was perfected between respondent SPAC and Meiyu; and that the contract should be made answerable for the monetary obligations of the employer. He likewise contended that SPAC’s failure to furnish him a copy of its appeal memorandum is fatal. Lastly, Okada argues that the CA gravely erred in entertaining the petition for certiorari. He posits that appeal was the proper and available remedy of SPAC.

ISSUES:

A. Whether the appeal of Meiyu was perfected?
B. Whether the surety contract between SPAC and Meiyu should be made answerable for the monetary obligations of Meiyu.
C. Whether the failure to furnish copy of petition to Okada is not fatal, especially when there is substantial compliance with the rules.
D. Whether appeal and not certiorari is the proper remedy of SPAC.

RULING:

A.There was no perfected appeal.

In Mary Abigail’s Food Services, Inc. v. Court of Appeals, the Supreme Court said that the posting of a cash or surety bond is a requirement sine qua non for the perfection of an appeal from the labor arbiter’s monetary award. Notably, the perfection of an appeal within the period and in the manner prescribed by law is jurisdictional and non-compliance with the requirements therefore is fatal and has the effect of rendering the judgment sought to be appealed final and executory.

In this case, Meiyu appealed the Labor Arbiter’s decision to the NLRC. However, its appeal was deemed imperfect because its appeal bond turned out to be spurious. The bond was invalid. It did not effectively serve its purpose.

Same is true with the Surety Bond issued by SPAC. It did not stay the execution of the Labor Arbiter’s decision because it was belatedly filed. It must be noted that the bond issued by SPAC was made long after the Decision of the LA has become final and executory.

B. The surety bond issued by SPAC should not be made answerable for the monetary obligations of Meiyu.

The records bear out that Meiyu contracted respondent SPAC for a surety bond after the NLRC ruled with finality that its first surety bond from Wellington Insurance Co., Inc. was spurious. Evidently, when the SPAC bond was issued, the period to appeal had already lapsed. As a consequence, the LA decision became final and executory.

Hence, the CA did not err in setting aside the Arbiter’s Order denying the motion to quash the writ of execution.

It may well be noted that SPAC involved itself unnecessarily in the controversy when it issued the appeal bond to Meiyu. To stress, the period to appeal had lapsed and the LA award had become final and executory at the time of issuance of the bond. It is for this reason that there can be no recourse on the said appeal bond but only against the employer Meiyu.

A belated filing of an appeal bond in labor cases will never ripen into a perfected appeal. When the period to appeal lapses, the questioned decision becomes final and executory. In such cases, this Court orders the Okada to pay the monetary awards. Money judgments were never levied on the likewise unperfected bond. 

NITO o ou mono wa itto o mo ezu,” says a Japanese proverb. If you run after two hares, you would catch neither. Kung hahabol ka sa dalawang kuneho, di mo mahuhuli ang isa man nito.

It would be more prudent – as it is proper – for Okada to run after his employer to satisfy his money claims rather than stubbornly insist on an invalid bond.

C. Failure to furnish copy of petition to the other party is not fatal, especially when there is substantial compliance with the rules.

Justice should not be sacrificed for technicality. True it is that Rule 46, Section 3 mandates that a copy of the petition should be served on the other party; and that proof of such service should be filed with the petition in court. However, the rule was substantially complied with when service was made to Okada’s former counsel, Atty. Dennis Ancheta.

Without the benefit of a proper notice of Okada’s substitution of counsel, SPAC had no recourse but to serve the copy of its petition to whom it knew and perceived as being Okada’s counsel of record. In faithful compliance and with no intention of delay, service was made on Atty. Ancheta.

Further, the alleged defect in the service of a copy of the petition is deemed cured when Okada filed his Comment and Supplemental Comment.

D. Certiorari petition to the CA is permissible as SPAC has no other plain, speedy, and adequate remedy in the ordinary course of law.

SPAC was not a party to the original action. It could not have appealed the order of the Arbiter to the NLRC. Verily, it has no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law. In fine, a petition for certiorari is the best available remedy to protect respondent’s rights.

In a long line of cases, the Court has consistently ruled that “the extraordinary writ of certiorari is always available where there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law.”
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THINGS DECIDED:

A. The posting of a cash or surety bond is a requirement sine qua non for the perfection of an appeal from the labor arbiter’s monetary award.

B. A belated filing of an appeal bond in labor cases will never ripen into a perfected appeal. When the period to appeal lapses, the questioned decision becomes final and executory.

C. Money judgments were never levied on the likewise unperfected bond. 

D. Failure to furnish copy of petition to the other party is not fatal, especially when there is substantial compliance with the rules.

E. The extraordinary writ of certiorari is always available where there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law.


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