Labor Cases - Set 2

FIRST DIVISION
[G.R. No. 152494. September 22, 2004]

MARIANO ONG, doing business under the name and style
MILESTONE METAL MANUFACTURING, petitioner, vs. THE
COURT OF APPEALS, CONRADO DABAC, BERNABE
TAYACTAC, MANUEL ABEJUELLA, LOLITO ABELONG,
RONNIE HERRERO, APOLLO PAMIAS, JAIME ONGUTAN,
NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO,
BIENVENIDO EBBER, RENATO ABEJUELLA, LEONILO
ATENDIDO, JR., LODULADO FAA and JAIME
LOZADA, respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the decision
[1]
of the Court
of Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, which dismissed
the petition for certiorari for lack of merit, as well as the resolution,
[2]
dated March
7, 2002, denying the motion for reconsideration.
Petitioner is the sole proprietor of Milestone Metal Manufacturing (Milestone),
which manufactures, among others, wearing apparels, belts, and
umbrellas.
[3]
Sometime in May 1998, the business suffered very low sales and
productivity because of the economic crisis in the country. Hence, it adopted a
rotation scheme by reducing the workdays of its employees to three days a week
or less for an indefinite period.
[4]

On separate dates, the 15 respondents filed before the National Labor
Relations Commission (NLRC) complaints for illegal dismissal, underpayment of
wages, non-payment of overtime pay, holiday pay, service incentive leave pay,
13
th
month pay, damages, and attorneys fees against petitioner. These were
consolidated and assigned to Labor Arbiter Manuel Manasala.
Petitioner claimed that 9 of the 15 respondents were not employees of
Milestone but of Protone Industrial Corporation which, however, stopped its
operation due to business losses. Further, he claims that respondents Manuel
Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado Dabac, and
Lodualdo Faa were not dismissed from employment; rather, they refused to work
after the rotation scheme was adopted. Anent their monetary claims, petitioner
presented documents showing that he paid respondents minimum wage,
13
th
month pay, holiday pay, and contributions to the SSS, Medicare, and Pag-
Ibig Funds.
[5]

On November 25, 1999, the Labor Arbiter rendered a decision awarding to
the respondents the aggregate amount of P1,111,200.40 representing their wage
differential, holiday pay, service incentive leave pay and 13
th
month pay, plus
10% thereof as attorneys fees. Further, petitioner was ordered to pay the
respondents separation pay equivalent to ! month salary for every year of
service due to the indefiniteness of the rotation scheme and strained relations
caused by the filing of the complaints.
[6]

Petitioner filed with the NLRC a notice of appeal with a memorandum of
appeal and paid the docket fees therefor. However, instead of posting the
required cash or surety bond, he filed a motion to reduce the appeal bond. The
NLRC, in a resolution dated April 28, 2000, denied the motion to reduce bond
and dismissed the appeal for failure to post cash or surety bond within the
reglementary period.
[7]
Petitioners motion for reconsideration was likewise
denied.
[8]

Petitioner filed a petition for certiorari with the Court of Appeals alleging that
the NLRC acted with grave abuse of discretion in dismissing the appeal for non-
perfection of appeal although a motion to reduce appeal bond was seasonably
filed. However, the petition was dismissed and thereafter the motion for
reconsideration was likewise dismissed for lack of merit.
[9]

Hence, this petition for review on the following assignment of errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS
ERROR AND GRAVE ABUSE OF DISCRETION IN AFFIRMING THE
DECISION OF THE NLRC DISMISSING THE APPEAL OF
PETITIONERS (sic) FOR NON-PERFECTION WHEN A MOTION TO
REDUCE APPEAL BOND WAS SEASONABLY FILED WHICH IS
ALLOWED BY THE RULES OF PROCEDURE OF THE NLRC.
II.
ERROR AND GRAVE ABUSE OF DISCRETION IN AFFIRMING THE
DISMISSAL BY NLRC OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER
AWARDING SEPARATION PAY TO PRIVATE RESPONDENTS DESPITE
THE FINDING THAT THERE WAS NO ILLEGAL DISMISSAL MADE BY
MILESTONE.
III.
ERROR IN AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS
APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS DECISION
OF THE LABOR ARBITER THAT PETITIONER MILESTONE HAS
VIOLATED THE MINIMUM WAGE LAW AND THAT PRIVATE
RESPONDENTS WERE UNDERPAID.
IV.
OF THE LABOR ARBITER THAT PETITIONER MILESTONE HAS NOT
PAID PRIVATE RESPONDENTS THEIR SERVICE INCENTIVE LEAVE
PAY, 13
TH
MONTH PAY, AND HOLIDAY PAY.
V.
OF THE LABOR ARBITER THAT THE EVIDENCE SUBMITTED BY
PRIVATE RESPONDENTS IN SUPPORT OF THEIR CLAIMS ARE NOT
SELF-SERVING, IRRELEVANT AND IMMATERIAL TO THE FACTS
AND LAW IN ISSUE IN THIS CASE.
[10]

The petition lacks merit.
Time and again it has been held that the right to appeal is not a natural right
or a part of due process, it is merely a statutory privilege, and may be exercised
only in the manner and in accordance with the provisions of law. The party who
seeks to avail of the same must comply with the requirements of the
rules. Failing to do so, the right to appeal is lost.
[11]

Article 223 of the Labor Code, as amended, sets forth the rules on appeal
from the Labor Arbiters monetary award:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders. x x x.
x x x x x x x x x
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment
appealed from. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of Procedure of the
NLRC,
[12]
which were in effect when petitioner filed his appeal, provide:
Section 1. Periods of Appeal. Decisions, awards or orders of the Labor
Arbiter and the POEA Administrator shall be final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards or orders of the Labor Arbiter x x
x.
x x x x x x x x x
Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed
within the reglementary period as provided in Section 1 of this Rule; shall be
under oath with proof of payment of the required appeal fee and the posting of
a cash or surety bond as provided in Section 5 of this Rule; shall be
accompanied by a memorandum of appeal which shall state the grounds relied
upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, order
or award and proof of service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated
shall not stop the running of the period for perfecting an appeal.
x x x x x x x x x
Section 6. Bond. In case the decision of the Labor Arbiter, the Regional
Director or his duly authorized Hearing Officer involves a monetary award, an
appeal by the employer shall be perfectedonly upon the posting of a cash
or surety bond, which shall be in effect until final disposition of the case,
issued by a reputable bonding company duly accredited by the Commission or
the Supreme Court in an amount equivalent to the monetary award, exclusive
of damages and attorneys fees.
The employer, his counsel, as well as the bonding company, shall submit a joint
declaration under oath attesting that the surety bond posted is genuine.
The Commission may, in justifiable cases and upon Motion of the Appellant,
reduce the amount of the bond. The filing of the motion to reduce bond shall
not stop the running of the period to perfect appeal. (Emphasis ours)
In the case at bar, petitioner received the decision of the Labor Arbiter
on January 6, 2000. He filed his notice of appeal with memorandum of appeal
and paid the corresponding appeal fees on January 17, 2000, the last day of
filing the appeal. However, in lieu of the required cash or surety bond, he filed a
motion to reduce bond alleging that the amount of P1,427,802,04 as bond
is unjustified and prohibitive and prayed that the same be reduced to a
reasonable level. The NLRC denied the motion and consequently dismissed
the appeal for non-perfection. Petitioner now contends that he was deprived of
the chance to post bond because the NLRC took 102 days to decide his motion.
Petitioners argument is unavailing.
While, Section 6, Rule VI of the NLRCs New Rules of Procedure allows the
Commission to reduce the amount of the bond, the exercise of the authority is
not a matter of right on the part of the movant but lies within the sound discretion
of the NLRC upon showing of meritorious grounds.
[13]
Petitioners motion reads:
1. The appeal bond which respondents-appellants will post in this case is
P1,427,802.04. They are precisely questioning this amount as being
unjustified and prohibitive under the premises.
2. The amount of this appeal bond must be reduced to a reasonable level by
this Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of this Honorable
Office that the appeal bond of P1,427,802.04 be reduced.
[14]

After careful scrutiny of the motion to reduce appeal bond, we agree with the
Court of Appeals that the NLRC did not act with grave abuse of discretion when it
denied petitioners motion for the same failed to either elucidate why the amount
of the bond was unjustified and prohibitive or to indicate what would be
a reasonable level.
[15]

In Calabash Garments, Inc. v. NLRC,
[16]
it was held that a substantial
monetary award, even if it runs into millions, does not necessarily give the
employer-appellant a meritorious case and does not automatically warrant a
reduction of the appeal bond.
Even granting arguendo that petitioner has meritorious grounds to reduce the
appeal bond, the result would have been the same since he failed to post cash or
surety bond within the prescribed period.
The above-cited provisions explicitly provide that an appeal from the Labor
Arbiter to the NLRC must be perfected within ten calendar days from receipt of
such decisions, awards or orders of the Labor Arbiter. In a judgment involving a
monetary award, the appeal shall be perfected only upon (1) proof of payment of
the required appeal fee; (2) posting of a cash or surety bond issued by a
reputable bonding company; and (3) filing of a memorandum of appeal. A mere
notice of appeal without complying with the other requisites mentioned shall not
stop the running of the period for perfection of appeal.
[17]
The posting of cash or
surety bond is not only mandatory but jurisdictional as well, and non-compliance
therewith is fatal and has the effect of rendering the judgment final and
executory.
[18]
This requirement is intended to discourage employers from using the
appeal to delay, or even evade, their obligation to satisfy their employees just
and lawful claims.
[19]

The intention of the lawmakers to make the bond an indispensable requisite
for the perfection of an appeal by the employer is underscored by the provision
that an appeal by the employer may be perfected only upon the posting of a cash
or surety bond. The word only makes it perfectly clear that the lawmakers
intended the posting of a cash or surety bond by the employer to be the exclusive
means by which an employers appeal may be perfected.
[20]

The fact that the NLRC took 102 days to resolve the motion will not help
petitioners case. The NLRC Rules clearly provide that the filing of the motion to
reduce bond shall not stop the running of the period to perfect appeal. Petitioner
should have seasonably filed the appeal bond within the ten-day reglementary
period following the receipt of the order, resolution or decision of the NLRC to
forestall the finality of such order, resolution or decision. In the alternative, he
should have paid only a moderate and reasonable sum for the premium, as was
held in Biogenerics Marketing and Research Corporation v. NLRC,
[21]
to wit:
x x x The mandatory filing of a bond for the perfection of an appeal is evident
from the aforequoted provision that the appeal may be perfected only upon the
posting of cash or surety bond. It is not an excuse that the over P2 million
award is too much for a small business enterprise, like the petitioner company,
to shoulder. The law does not require its outright payment, but only the
posting of a bond to ensure that the award will be eventually paid should
the appeal fail. What petitioners have to pay is a moderate and reasonable
sum for the premium for such bond. (Emphasis ours)
While the bond requirement on appeals involving monetary awards has been
relaxed in certain cases, this can only be done where there was substantial
compliance of the Rules or where the appellants, at the very least, exhibited
willingness to pay by posting a partial bond.
[22]
Petitioners reliance on the case
of Rosewood Processing, Inc. v. NLRC
[23]
is misplaced. Petitioner in the said case
substantially complied with the rules by posting a partial surety bond of fifty
thousand pesos issued by Prudential Guarantee and Assurance, Inc. while his
motion to reduce appeal bond was pending before the NLRC.
In the case at bar, petitioner did not post a full or partial appeal bond within
the prescribed period, thus, no appeal was perfected from the decision of the
Labor Arbiter. For this reason, the decision sought to be appealed to the NLRC
had become final and executory and therefore immutable. Clearly, then, the
NLRC has no authority to entertain the appeal, much less to reverse the decision
of the Labor Arbiter. Any amendment or alteration made which substantially
affects the final and executory judgment is null and void for lack of jurisdiction,
including the entire proceeding held for that purpose.
[24]

WHEREFORE, in view of the foregoing, the petition is DENIED. The
assailed decision of the Court of Appeals in CA-G.R. SP No. 62129, dated
October 10, 2001, dismissing the petition for certiorari for lack of merit,
is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.

[1]
Penned by Associate Justice Salvador J. Valdez, Jr. and concurred in by Justices Wenceslao I.
Agnir, Jr. and Mariano C. Del Castillo, Rollo, pp. 131-144.
[2]
Rollo, p. 145.
[3]
Rollo, pp. 38-40.
[4]
Rollo, p. 42.
[5]
Id., pp. 16-17, 24, 26.
[6]
Id., pp. 74-75.
[7]
Rollo, p. 103.
[8]
Rollo, p. 108.
[9]
Rollo, pp. 144-145.
[10]
Rollo, pp. 17-18.
[11]
Producers Bank of the Philippines v. Court of Appeals, G.R. No. 126620, 17 April 2002, 381
SCRA 185.
[12]
Amended by Resolution No. 3-99, Series of 1999, which took effect on January 1, 2000, and
further amended by Resolution No. 01-02, Series of 2002.
[13]
Mers Shoes Manufacturing, Inc. v. NLRC, 350 Phil. 294, 305 [1998].
[14]
CA Rollo, pp. 90-91.
[15]
Rollo, p. 142.
[16]
329 Phil. 226, 235 [1996].
[17]
Lamzon v. NLRC, 367 Phil. 169, 177 [1999].
[18]
Philippine Transmarine Carriers, Inc. v. Cortina, G.R. No. 146094, 12 November 2003.
[19]
Gaudia v. NLRC, 376 Phil. 548, 555 [1999].
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 130866 September 16, 1998
ST. MARTIN FUNERAL HOME, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO
ARICAYOS, respondents.

REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal dismissal filed by herein private respondent before the
National Labor Relations Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private
respondent alleges that he started working as Operations Manager of petitioner St. Martin Funeral Home on February 6, 1995.
However, there was no contract of employment executed between him and petitioner nor was his name included in the semi-
monthly payroll. On January 22, 1996, he was dismissed from his employment for allegedly misappropriating P38,000.00 which
was intended for payment by petitioner of its value added tax (VAT) to the Bureau of Internal Revenue (BIR).
1

Petitioner on the other hand claims that private respondent was not its employee but only the
uncle of Amelita Malabed, the owner of petitioner St. Martin's Funeral Home. Sometime in 1995,
private respondent, who was formerly working as an overseas contract worker, asked for financial
assistance from the mother of Amelita. Since then, as an indication of gratitude, private
respondent voluntarily helped the mother of Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took over the
management of the business. She then discovered that there were arrears in the payment of
taxes and other government fees, although the records purported to show that the same
were already paid. Amelita then made some changes in the business operation and private
respondent and his wife were no longer allowed to participate in the management thereof. As
a consequence, the latter filed a complaint charging that petitioner had illegally terminated
his employment.
2

Based on the position papers of the parties, the labor arbiter rendered a decision in favor of
petitioner on October 25, 1996 declaring that no employer-employee relationship existed between
the parties and, therefore, his office had no jurisdiction over the case.
3

Not satisfied with the said decision, private respondent appealed to the NLRC contending that the
labor arbiter erred (1) in not giving credence to the evidence submitted by him; (2) in holding that
he worked as a "volunteer" and not as an employee of St. Martin Funeral Home from February 6,
1995 to January 23, 1996, or a period of about one year; and (3) in ruling that there was no
employer-employee relationship between him and petitioner.
4

On June 13, 1997, the NLRC rendered a resolution setting aside the questioned decision and
remanding the case to the labor arbiter for immediate appropriate proceedings.
5
Petitioner then
filed a motion for reconsideration which was denied by the NLRC in its resolution dated August
18, 1997 for lack of merit,
6
hence the present petition alleging that the NLRC committed grave
abuse of discretion.
7

Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent
and opportune to reexamine the functional validity and systemic practicability of the mode of
judicial review it has long adopted and still follows with respect to decisions of the NLRC. The
increasing number of labor disputes that find their way to this Court and the legislative changes
introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor
Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization
Act of 1980) now stridently call for and warrant a reassessment of that procedural aspect.
We prefatorily delve into the legal history of the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were expressly
declared to be appealable to the Secretary of Labor and, ultimately, to the President of the
Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to take
effect six months after its promulgation.
8
Created and regulated therein is the present NLRC
which was attached to the Department of Labor and Employment for program and policy
coordination only.
9
Initially, Article 302 (now, Article 223) thereof also granted an aggrieved party
the remedy of appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391
subsequently amended said provision and abolished such appeals. No appellate review has
since then been provided for.
Thus, to repeat, under the present state of the law, there is no provision for appeals from the
decision of the NLRC.
10
The present Section 223, as last amended by Section 12 of R.A. No.
6715, instead merely provides that the Commission shall decide all cases within twenty days from
receipt of the answer of the appellee, and that such decision shall be final and executory after ten
calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court has no
jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of Labor,
since there is no legal provision for appellate review thereof, the Court nevertheless rejected
that thesis. It held that there is an underlying power of the courts to scrutinize the acts of
such agencies on questions of law and jurisdiction even though no right of review is given by
statute; that the purpose of judicial review is to keep the administrative agency within its
jurisdiction and protect the substantial rights of the parties; and that it is that part of the
checks and balances which restricts the separation of powers and forestalls arbitrary and
unjust adjudications.
11

Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the remedy of
the aggrieved party is to timely file a motion for reconsideration as a precondition for any further
or subsequent remedy,
12
and then seasonably avail of the special civil action of certiorari under
Rule 65,
13
for which said Rule has now fixed the reglementary period of sixty days from notice of
the decision. Curiously, although the 10-day period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of the Labor Code, it has been held that this
Court may still take cognizance of the petition for certiorari on jurisdictional and due process
considerations if filed within the reglementary period under Rule 65.
14

Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally provided
as follows:
Sec. 9. Jurisdiction. The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards, or commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts necessary
to resolve factual issues raised in cases falling within its original and
appellate jurisdiction, including the power to grant and conduct new trials or
further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board of
Assessment Appeals.
15

Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902 effective
March 18, 1995, to wit:
Sec. 9. Jurisdiction. The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the Securities
and Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except those
falling within the appellate jurisdiction of the Supreme Court in accordance
with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph
(1) of the third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve
factual issues raised in cases falling within its original and appellate
jurisdiction, including the power to grant and conduct new trials or further
proceedings. Trials or hearings in the Court of Appeals must be continuous
and must be completed within, three (3) months, unless extended by the
Chief Justice.
It will readily be observed that, aside from the change in the name of the lower appellate
court,
16
the following amendments of the original provisions of Section 9 of B.P. No. 129 were
effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the Philippines and
the Central Board of Assessment Appeals was deleted and replaced by a new paragraph
granting the Court of Appeals limited powers to conduct trials and hearings in cases within its
jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to paragraph (3) of
the section, such that the original exclusionary clause therein now provides "except those
falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948."
(Emphasis supplied).
3. Contrarily, however, specifically added to and included among the quasi-judicial agencies
over which the Court of Appeals shall have exclusive appellate jurisdiction are the Securities
and Exchange Commission, the Social Security Commission, the Employees Compensation
Commission and the Civil Service Commission.
This, then, brings us to a somewhat perplexing impass, both in point of purpose and
terminology. As earlier explained, our mode of judicial review over decisions of the NLRC
has for some time now been understood to be by a petition for certiorari under Rule 65 of the
Rules of Court. This is, of course, a special original action limited to the resolution of
jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all cases that have
been brought to us, grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants
exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the
Regional Trial Courts and the quasi-judicial agencies generally or specifically referred to
therein except, among others, "those falling within the appellate jurisdiction of the Supreme
Court in accordance with . . . the Labor Code of the Philippines under Presidential Decree
No. 442, as amended, . . . ." This would necessarily contradict what has been ruled and said
all along that appeal does not lie from decisions of the NLRC.
17
Yet, under such excepting
clause literally construed, the appeal from the NLRC cannot be brought to the Court of Appeals,
but to this Court by necessary implication.
The same exceptive clause further confuses the situation by declaring that the Court of
Appeals has no appellate jurisdiction over decisions falling within the appellate jurisdiction of
the Supreme Court in accordance with the Constitution, the provisions of B.P. No. 129, and
those specified cases in Section 17 of the Judiciary Act of 1948. These cases can, of course,
be properly excluded from the exclusive appellate jurisdiction of the Court of Appeals.
However, because of the aforementioned amendment by transposition, also supposedly
excluded are cases falling within the appellate jurisdiction of the Supreme Court in
accordance with the Labor Code. This is illogical and impracticable, and Congress could not
have intended that procedural gaffe, since there are no cases in the Labor Code the
decisions, resolutions, orders or awards wherein are within the appellate jurisdiction of the
Supreme Court or of any other court for that matter.
A review of the legislative records on the antecedents of R.A. No. 7902 persuades us that
there may have been an oversight in the course of the deliberations on the said Act or an
imprecision in the terminology used therein. In fine, Congress did intend to provide for
judicial review of the adjudications of the NLRC in labor cases by the Supreme Court, but
there was an inaccuracy in the term used for the intended mode of review. This conclusion
which we have reluctantly but prudently arrived at has been drawn from the considerations
extant in the records of Congress, more particularly on Senate Bill No. 1495 and the
Reference Committee Report on S. No. 1495/H. No. 10452.
18

In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship
speech
19
from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its
jurisdiction and powers. Among others, its appellate jurisdiction was
expanded to cover not only final judgment of Regional Trial Courts, but also
all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial
agencies, instrumentalities, boards and commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme
Court by the transfer of some of its burden of review of factual issues to the
Court of Appeals. However, whatever benefits that can be derived from the
expansion of the appellate jurisdiction of the Court of Appeals was cut short
by the last paragraph of Section 9 of Batas Pambansa Blg. 129 which
excludes from its coverage the "decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board of
Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme
Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the
exceptions enumerated in Section 9 and, additionally, extends the coverage
of appellate review of the Court of Appeals in the decision(s) of the Securities
and Exchange Commission, the Social Security Commission, and the
Employees Compensation Commission to reduce the number of cases
elevated to the Supreme Court. (Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna
provides the ideal situation of drastically reducing the workload of the
Supreme Court without depriving the litigants of the privilege of review by an
appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice
Teehankee in 1986 in the Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the
Supreme Court of the burden of reviewing these cases which
present no important issues involved beyond the particular
fact and the parties involved, so that the Supreme Court may
wholly devote its time to cases of public interest in the
discharge of its mandated task as the guardian of the
Constitution and the guarantor of the people's basic rights
and additional task expressly vested on it now "to determine
whether or not there has been a grave abuse of discretion
amounting to lack of jurisdiction on the part of any branch or
instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It
has been cut down to 300,000 cases some five years ago. I understand we
are now back to 400,000 cases. Unless we distribute the work of the
appellate courts, we shall continue to mount and add to the number of cases
pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we
have submitted, the Committee on Justice and Human Rights requests the
support and collegial approval of our Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent session, the following Committee Amendment was
introduced by the said sponsor and the following proceedings transpired:
20

Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance
with the Constitution," add the phrase "THE LABOR CODE OF THE
PHILIPPINES UNDER P.D. 442, AS AMENDED." So that it becomes clear,
Mr. President, that issues arising from the Labor Code will still be appealable
to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted.
This was also discussed with our Colleagues in the House of
Representatives and as we understand it, as approved in the House, this was
also deleted, Mr. President.
amendment is approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of
Committee amendments.
amendment is approved. (Emphasis supplied).
xxx xxx xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495 was passed on
second reading and being a certified bill, its unanimous approval on third reading
followed.
21
The Conference Committee Report on Senate Bill No. 1495 and House Bill No.
10452, having theretofore been approved by the House of Representatives, the same was
likewise approved by the Senate on February 20, 1995,
22
inclusive of the dubious formulation on
appeals to the Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to
the Supreme Court were eliminated, the legislative intendment was that the special civil
action of certiorari was and still is the proper vehicle for judicial review of decisions of the
NLRC. The use of the word "appeal" in relation thereto and in the instances we have noted
could have been a lapsus plumae because appeals by certiorari and the original action
for certiorari are both modes of judicial review addressed to the appellate courts. The
important distinction between them, however, and with which the Court is particularly
concerned here is that the special civil action ofcertiorari is within the concurrent original
jurisdiction of this Court and the Court of Appeals;
23
whereas to indulge in the assumption that
appeals by certiorari to the Supreme Court are allowed would not subserve, but would subvert,
the intention of Congress as expressed in the sponsorship speech on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that
recourse from the NLRC to the Court of Appeals as an initial step in the process of judicial
review would be circuitous and would prolong the proceedings. On the contrary, as he
commendably and realistically emphasized, that procedure would be advantageous to the
aggrieved party on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the
Court of Appeals would give litigants the advantage to have all the evidence
on record be reexamined and reweighed after which the findings of facts and
conclusions of said bodies are correspondingly affirmed, modified or
reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom
that factual findings of the Court of Appeals are final and may not be
reversed on appeal to the Supreme Court. A perusal of the records will reveal
appeals which are factual in nature and may, therefore, be dismissed outright
by minute resolutions.
24

While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a
law, on this score we add the further observations that there is a growing number of labor cases
being elevated to this Court which, not being a trier of fact, has at times been constrained to
remand the case to the NLRC for resolution of unclear or ambiguous factual findings; that the
Court of Appeals is procedurally equipped for that purpose, aside from the increased number of
its component divisions; and that there is undeniably an imperative need for expeditious action on
labor cases as a major aspect of constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals
from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer
to petitions for certiorari under Rule 65. Consequently, all such petitions should hence forth
be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief desired.
Apropos to this directive that resort to the higher courts should be made in accordance with
their hierarchical order, this pronouncement in Santiago vs. Vasquez, et al.
25
should be taken
into account:
One final observation. We discern in the proceedings in this case a
propensity on the part of petitioner, and, for that matter, the same may be
said of a number of litigants who initiate recourses before us, to disregard the
hierarchy of courts in our judicial system by seeking relief directly from this
Court despite the fact that the same is available in the lower courts in the
exercise of their original or concurrent jurisdiction, or is even mandated by
law to be sought therein. This practice must be stopped, not only because of
the imposition upon the precious time of this Court but also because of the
inevitable and resultant delay, intended or otherwise, in the adjudication of
the case which often has to be remanded or referred to the lower court as the
proper forum under the rules of procedure, or as better equipped to resolve
the issues since this Court is not a trier of facts. We, therefore, reiterate the
judicial policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or where
exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby
REMANDED, and all pertinent records thereof ordered to be FORWARDED, to the Court of
Appeals for appropriate action and disposition consistent with the views and ruling herein set
forth, without pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Panganiban Martinez, Quisumbing and Purisima, JJ., concur.

SECOND DIVISION
[G.R. No. 152550. June 8, 2005]
BORJA ESTATE AND/OR THE HEIRS OF MANUEL AND PAULA
BORJA and ATTY. MILA LAUIGAN IN HER CAPACITY AS
THE ESTATE ADMINISTRATOR, petitioners, vs. SPOUSES
ROTILLO BALLAD and ROSITA BALLAD, respondents.
D E C I S I O N
TINGA, J.:
In this petition for review
[1]
under Rule 45 of the Rules of Court, petitioners
Borja Estate and/or the Heirs of Manuel and Paula Borja and Atty. Mila Lauigan,
in her capacity as the estate administrator (the Borjas) assail the Resolution
[2]
of
the Court of Appeals Thirteenth Division denying their motion for reconsideration
and the Decision
[3]
of the same division in CA-G.R. SP No. 60700, the dispositive
portion of which states:
WHEREFORE, foregoing considered, the assailed Resolutions dated April 14,
2000 and May 31, 2000 are hereby AFFIRMED in toto. The present petition is
hereby DISMISSED for lack of merit.
SO ORDERED.
[4]

The above ruling of the Court of Appeals affirmed the Resolution
[5]
of
the National Labor Relations Commission (NLRC), the decretal portion of which
reads:
WHEREFORE, premises considered, respondents Motion for Reduction of
Bond is hereby DISMISSED for lack of merit.
The instant Appeal is hereby DISMISSED for failure to post a cash or surety
bond within the reglementary period.
SO ORDERED.
[6]

The Borjass motion for reconsideration of the above-quoted
NLRC Resolution was likewise dismissed in another Resolution.
[7]

As the Borjass appeal was not given due course, the Labor
Arbiters Decision
[8]
was in effect affirmed, the dispositive portion of which states:
WHEREFORE, with all the foregoing considerations, judgment is hereby
rendered declaring the Spouses Rotillo and Rosita Ballad as illegally and
unjustly dismissed in a whimsical and capricious manner which is oppressive to
labor and respondents are jointly and severally ordered to reinstate
complainants to their position as overseers without loss of seniority rights with
full backwages, allowances and other benefits, computed as of the
promulgation of this decision, as follows:
1. P25,245.00- Backwages, June to October 30, 1999
x 2 (P166 x 365 over 12 x 5 months)
____________
P50,490.00 Backwages for both complainants
2. P 5,0490.00 13
th
month pay x 3 years
P15,147.00
x 2
_____________
P30,294.00 - 13
th
month pay for both complainants
3. P100,000.00 - Moral damages, for both complainants
4. P50,000.00 Exemplary damages, for both complainants
______________
P230,784.00
5. P272,646.00 - Separation pay, in case
reinstatement is no longer feasible
(P5049 x 27 years x 2 for both
complainants)
6. Money equivalent of 12 cavans of shelled corn per harvest, transportations
expenses, allowances and other benefits being enjoyed as overseers from the
time these were withheld from them until actual payment, to be computed in
the pre-execution hearing.
7. Plus one percent interest per month and ten percent attorneys fees.
All other claims are hereby dismissed.
SO ORDERED.
[9]

The case arose out of the complaint filed by private respondents Spouses
Rotillo and Rosita Ballad (Ballad spouses) against the Borjas for illegal dismissal,
non payment of 13
th
month pay, separation pay, incentive pay, holiday and
premiums pay plus differential pay, and moral and exemplary damages with the
Regional Arbitration Branch No. II of the NLRC in Tuguegarao, Cagayan, on 8
June 1999.
[10]

The Ballad spouses had been employed as overseers of the Borja Estate by
its owners, the spouses Manuel Borja and Paula Borja, since 1972. Their
appointment as such was later made in writing per the certification of
appointment issued by Paula Borja.
[11]

The Borja Estate comprises around two hundred (200) hectares of
agricultural lands located in the towns of Iguig, Amulung, Enrile, Solana and
Baggao, Cagayan Province. It includes two apartment buildings consisting of
eleven doors for rent, both located at Caritan, Tuguegarao, Cagayan.
[12]

As overseers, the Ballad spouses duties included the collection of owners
share of the harvest from the tenants and the delivery of such share to the estate
administrator, as well as to account for it. They also collected monthly rentals
from the lessees of the apartment and tendered the same to the
administrator. They were tasked to oversee the lands and buildings entrusted to
them and were instructed to report any untoward incident or incidents affecting
said properties to the administrator. They were allegedly required to work all day
and night each week including Saturdays, Sundays and holidays.
[13]

For their compensation, the Ballad spouses received a monthly salary
of P1,000.00 for both of them, or P500.00 each. They were provided residential
quarters plus food and traveling allowances equivalent to twelve (12) cavans of
shelled corn every crop harvest.
[14]
In the year 1980, said salary was increased
to P2,500.00 for each of them by Paula Borja when she came from abroad. Until
the time before their dismissal, the Ballad spouses received the same amount.
[15]

The Ballad spouses further alleged that they were appointed as the attorney-
in-fact of the owners to represent the latter in courts and/or government offices in
cases affecting the titling of the Borjas unregistered lands, and to institute and
prosecute recovery of possession thereof, as well as in ejectment cases.
[16]

They narrated that when the spouses Manuel and Paula Borja went to the
United States of America, their children Lumen, Leonora and Amelia succeeded
to the ownership and management of the Borja Estate. On 16 October 1986, the
Ballad spouses claimed that Amelia or Mely, then residing in Rochester, New
York, wrote then administrator Mrs. Lim informing her that the heirs had extended
the services of the Ballad spouses and ordered Mrs. Lim to pay the
hospitalization expenses of Rotillo Ballad which accrued to Ten Thousand Pesos
(P10,000.00). It is also alleged that Mely had instructed Mrs. Lim to cause the
registration of the Ballad spouses as Social Security System (SSS) members so
that in case any of the latter gets sick, SSS will shoulder their medical expenses
and not the Borjas.
[17]

On 10 November 1996, according to the Ballad spouses, when Francisco
Borja, brother of the late Manuel Borja, was appointed the new administrator, he
issued immediately a memorandum to all the tenants and lessees of the Borja
Estate to transact directly with him and to pay their monthly rentals to him or to
his overseers, the Ballad spouses.
[18]

Upon his appointment, Francisco Borja allegedly promised to give the Ballad
spouses their food and traveling allowances aforestated but not the twelve (12)
cavans per harvest which he reduced to two (2) cavans per harvest. Francisco
Borja also stopped giving the Ballad spouses their allowances. For twenty-seven
(27) years that the Ballad spouses were in the employ of the Borjas they were
purportedly not paid holiday pay, overtime pay, incentive leave pay, premiums
and restday pay, 13
th
month pay, aside from the underpayment of their basic
salary.
[19]

In June 1999, the Ballad spouses alleged that Francisco Borja
unceremoniously dismissed them and caused this dismissal to be broadcast over
the radio, which caused the former to suffer shock and physical and mental
injuries such as social humiliation, besmirched reputation, wounded feelings,
moral anxiety, health deterioration and sleepless nights.
[20]

Thus, the filing of a case against petitioners before the Labor Arbiter. The
Borjas interposed the defense that respondents had no cause of action against
them because the latter were not their employees. The Borjas insisted that the
Ballad spouses were allowed to reside within the premises of the Borja Estate
only as a gesture of gratitude for Rosita Ballads assistance in the registration of
a parcel of land; and that they were merely utilized to do some errands from time
to time. As to the money claims, the Borjas claimed the defense of prescription.
[21]

As aforestated, the Labor Arbiter ruled that the Ballad spouses had been
illegally dismissed, after concluding that they had been employees of the
Borjas.
[22]

Aggrieved by the decision, the Borjas filed their appeal on 26 November
1999 before the NLRC together with a Motion for Reduction of Bond.
[23]

In a Resolution dated 14 April 2000, the NLRC dismissed the
petitioners Motion for Reduction of Bond. Petitioners appeal was likewise
dismissed in the same Resolution for failure to post a cash or surety bond within
the reglementary period.
[24]
Petitioners Motion for Reconsideration was also
denied for lack of merit in another Resolution.
[25]

Petitioners elevated the case to the Court of Appeals by way of a special civil
action of certiorari. On 31 October 2001, the Court of Appeals affirmed
the Resolutions of the NLRC holding that the filing of a cash or surety bond
is sine qua non to the perfection of appeal from the labor monetarys award.
The Court of Appeals noted that the Borjas received a copy of the Labor
Arbiters Decision
[26]
on 18 November 1999. They thereafter filed their Notice of
Appeal and Appeal on 26 November 1999. On even date, they also filed a Motion
for Reduction of Bond. However, no proof was shown that the Borjas were able
to post the required bond during the same period of time to appeal.
[27]

The Court of Appeals observed that petitioners were able to post a bond only
on 17 December 1999 in the amount of Forty Thousand Pesos (P40,000.00)
when the same should have been done during the same period of appeal. As this
was not done and as no justifiable reason was given for the late filing, the Court
of Appeals ruled that the decision of the Labor Arbiter had become final and
executory.
[28]

The Court of Appeals likewise relied on the Labor Arbiters finding that the
Ballad spouses were employees of the petitioners.
[29]

Hence, the instant petition.
In this petition, petitioners in essence assert that the Court of Appeals erred
in agreeing with the NLRC that the posting of a cash or surety bond during the
period of time to file an appeal is mandatory and the failure to do so would have
the effect of rendering the appealed decision final and executory. Petitioners
further insist that they never hired the Ballad spouses as employees.
[30]

In a Resolution
[31]
dated 24 April 2002, the Court initially resolved to deny the
petition for failure of the petitioners to show any reversible error in the decisions
and resolution of the Labor Arbiter, the NLRC and the Court of Appeals.
However, the Court in a Resolution
[32]
dated 11 November 2002 decided to
reinstate the petition after considering petitioners arguments contained in
their Motion for Reconsideration,
[33]
in which the Borjas stressed that the only
issue sought to be resolved by their Petition is the correct interpretation of the
rule requiring the posting of a bond for the perfection of an appeal. They implored
the Court to contrive a definitive ruling on the matter which in their estimation has
sowed confusion among practitioners as well as to those exercising quasi-judicial
and judicial functions.
[34]

There is no merit in the petition.
The appeal bond is required under Article 223 of the Labor Code which
provides:
ART. 223. Appeal. - Decisions, awards or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders. . . .
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission, in the amount
equivalent to the monetary award in the judgment appealed from.
. . . .
Rule VI of the New Rules of Procedure of the NLRC implements this Article
with its Sections 1, 3, 5, 6 and 7 providing pertinently as follows:
Section. 1. Periods of Appeal.- Decisions, awards, or orders of the Labor
Arbiter and the POEA Administrator shall be final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards or orders of the Labor Arbiter or of
the Administrator, and in case of a decision of the Regional Director or his duly
authorized Hearing Officer within five (5) calendar days from receipt of such
decisions, awards or orders . . .
Section 3. Requisites for Perfection of Appeal.(a) The appeal shall be filed
within the reglementary period as provided in Sec. 1 of this Rule; shall be
under oath with proof of payment of the required appeal fee and the posting of
a cash or surety bond as provided in Sec. 5 of this Rule; shall be accompanied
by memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof; the relief prayed for; and a statement of the date
when the appellant received the appealed decision, order or award and proof of
service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated
shall not stop the running of the period for perfecting an appeal.
Section 5. Appeal Fee. The appellant shall pay an appeal fee of One hundred
(P100.00) pesos to the Regional Arbitration Branch, Regional Office, or to the
Philippine Overseas Employment Administration and the official receipt of
such payment shall be attached to the records of the case.
Section 6. Bond. In case the decision of the Labor Arbiter, the Regional
Director or his duly authorized Hearing Officer involves a monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or
surety bond, which shall be in effect until final disposition of the case, issued
by a reputable bonding company duly accredited by the Commission or the
Supreme Court in an amount equivalent to the monetary award, exclusive of
damages and attorneys fees.
. . . .
The Commission may, in justifiable cases and upon Motion of the Appellant,
reduce the amount of the bond. The filing of the motion to reduce bond shall
not stop the running of the period to perfect appeal.
Section 7. No extension of Period.- No motion or request for extension of the
period within which to perfect an appeal shall be allowed.
Thus, it is clear from the foregoing that the appeal from any decision, award
or order of the Labor Arbiter to the NLRC shall be made within ten (10) calendar
days from receipt of such decision, award or order, and must be under oath, with
proof of payment of the required appeal fee accompanied by a memorandum of
appeal. In case the decision of the Labor Arbiter involves a monetary award, the
appeal is deemed perfected only upon the posting of a cash or surety bond also
within ten (10) calendar days from receipt of such decision in an amount
equivalent to the monetary award.
[35]

The intention of the lawmakers to make the bond an indispensable requisite
for the perfection of an appeal by the employer is underscored by the provision
that an appeal may be perfected only upon the posting of a cash or surety
bond. The word only makes it perfectly clear that the LAWMAKERS intended
the posting of a cash or surety bond by the employer to be the exclusive means
by which an employers appeal may be considered completed.
[36]
The law
however does not require its outright payment, but only the posting of a bond to
ensure that the award will be eventually paid should the appeal fail. What
petitioners have to pay is a moderate and reasonable sum for the premium of
such bond.
[37]

The word may, on the other hand refers to the perfection of an appeal as
optional on the part of the defeated party, but not to the posting of an appeal
bond, if he desires to appeal.
[38]

Evidently, the posting of a cash or surety bond is mandatory. And the
perfection of an appeal in the manner and within the period prescribed by law is
not only mandatory but jurisdictional.
[39]
To extend the period of the appeal is to
delay the case, a circumstance which would give the employer the chance to
wear out the efforts and meager resources of the worker to the point that the
latter is constrained to give up for less than what is due him.
[40]
As ratiocinated in
the case of Viron Garments Mftg. v. NLRC:
[41]

The requirement that the employer post a cash or surety bond to perfect its/his
appeal is apparently intended to assure the workers that if they prevail in the
case, they will receive the money judgment in their favor upon the dismissal of
the employers appeal. It was intended to discourage employers from using an
appeal to delay, or even evade, their obligation to satisfy their employees just
and lawful claims.
[42]

In the case at bar, while the petitioners Appeal Memorandum and Motion for
Reduction of Bond, which was annexed thereto, were both filed on time,
[43]
the
appeal was not perfected by reason of the late filing and deficiency of the amount
of the bond for the monetary award with no explanation offered for such delay
and inadequacy.
As there was no appeal bond filed together with the Appeal
Memorandum within the ten (10)-day period provided by law for the perfection of
appeal, it follows that no appeal from the decision of the Labor Arbiter had been
perfected.
[44]
Accordingly, the Decision of the Labor Arbiter became final and
executory upon the expiration of the reglementary period.
While it is true that this Court has relaxed the application of the rules on
appeal in labor cases, it has only done so where the failure to comply with the
requirements for perfection of appeal was justified or where there was substantial
compliance with the rules. Hence, the Supreme Court has allowed tardy appeals
in judicious cases, e.g., where the presence of any justifying circumstance
recognized by law, such as fraud, accident, mistake or excusable negligence,
properly vested the judge with discretion to approve or admit an appeal filed out
of time; where on equitable grounds, a belated appeal was allowed as the
questioned decision was served directly upon petitioner instead of her counsel of
record who at the time was already dead;
[45]
where the counsel relied on the
footnote of the notice of the decision of the labor arbiter that the aggrieved party
may appeal . . . within ten (10) working days; in order to prevent a miscarriage of
justice or unjust enrichment such as where the tardy appeal is from a decision
granting separation pay which was already granted in an earlier final decision; or
where there are special circumstances in the case combined with its legal merits
or the amount and the issue involved.
[46]

Here, no justifiable reason was put forth by the petitioners for the non-filing of
the required bond, or the late filing of the defective bond for that matter as in fact
the bond they filed late on 17 December 1999 in the amount of Forty Thousand
Pesos (P40,000.00) was not even equivalent to the reduced amount of bond they
prayed for in their Motion for Reduction of Bond.
[47]
The Court then is not prepared
to hold that the petitioners Motion for Reduction of Bond was substantial
compliance with the Labor Code for failure to demonstrate willingness to abide by
their prayer in said Motion.
In addition, no exceptional circumstances obtain in the case at bar which
would warrant the relaxation of the bond requirement as a condition for perfecting
the appeal.
It bears stressing that the bond is sine qua non to the perfection of appeal
from the labor arbiters monetary award. The requirements for perfecting an
appeal must be strictly followed as they are considered indispensable
interdictions against needless delays and for orderly discharge of judicial
business. The failure of the petitioners to comply with the requirements for
perfection of appeal had the effect of rendering the decision of the labor arbiter
final and executory and placing it beyond the power of the NLRC to review or
reverse it. As a losing party has the right to file an appeal within the prescribed
period, so also the winning party has the correlative right to enjoy the finality of
the resolution of his/her case.
[48]

WHEREFORE, in view of the foregoing considerations, the petition is
DENIED for lack of merit. Costs against petitioners.
SO ORDERED.
Austria-Martinez, (Acting Chairman), Callejo, Sr., and Chico-Nazario,
JJ., concur.
Puno, (Chairman), on official leave.

[1]
Rollo, pp. 11-57; Dated 25 March 2002.
[2]
Id. at 72-74; Promulgated on 7 March 2002.
[3]
Id. at 59-69; Promulgated on 31 October 2001; Penned by Associate Justice B.A. Adefuin-De
La Cruz and concurred in by Associate Justices Wenceslao I. Agnir, Jr. and Rebecca De
Guia-Salvador.
[4]
Id. at 69.
[5]
Id. at 88-91; Promulgated on 14 April 2000; Penned by Commissioner Ireneo B. Bernardo of the
Third Division of the NLRC and concurred in by Presiding Commissioner Lourdes C.
Javier and Commissioner Tito F. Genilo.
[6]
Id. at 90.
[7]
Id. at 93; Dated 31 May 2000.
[8]
Id. at 77-85; Dated 29 October 1999.
[9]
Id. at 85.
[10]
Id. at 61, 77 and 79.
[11]
Dated 2 November 1974; Id. at 59, 77 and 279.
[12]
Id. at 59-60.
[13]
Id. at 60 and 280.
[14]
Ibid.
[15]
Ibid.
[16]
Ibid.
[17]
Id. at 60 and 281.
[18]
Ibid.
[19]
Id. at 60 and 281.
[20]
Id. at 60.
[21]
Id. at 61.
[22]
Ibid.
[23]
Id. at 62 and 86-87.
[24]
Id. at 62 and supra note 5.
[25]
Id. at 62 and 93.
[26]
Dated 29 October 1999.
[27]
Rollo, p. 65.
[28]
Ibid.
[29]
Id. at 67-69.
[30]
Id. at 17-18.
[31]
Id. at 319.
[32]
Id. at 329.
[33]
Id. at 320-325.
[34]
Id. at 320.
[35]
Biogeneric Marketing & Research Corp. v. NLRC, 372 Phil. 653, 661 (1999).
[36]
Globe Gen. Services and Security Agency v. NLRC, 319 Phil. 531, 535 (1995).
[37]
Biogeneric Marketing & Research Corp. v. NLRC, 372 Phil. 653, 661 (1999); See Rosewood
Processing, Inc. v. NLRC, 352 Phil. 1013, 1029 (1998) citing Oriental Mindoro Electric
Cooperative, Inc. v. National Labor Relations Commission, 31 July 1995, 246 SCRA 794,
801.
[38]
Viron Garments Mftg. v. NLRC, G.R. No. 97357, 18 March 1992, 207 SCRA 339.
[39]
Catubay v. National Labor Relations Commission, 386 Phil. 648, 657 (2000);
Taberrah v. NLRC, 342 Phil. 394, 404 (1997); Italian Village Restaurant v. NLRC, G.R.
No. 95594, 11 March 1992, 207 SCRA 204, 208; Cabalan Pastulan Negrito Labor
Association v. NLRC, 311 Phil. 744 (1995); Rosewood Processing, Inc. v. NLRC, 352
Phil. 1013, 1028 (1998).
[40]
Italian Village Restaurant v. NLRC, supra.G
[41]
Supra note 38.
[42]
Id. at 342.
[43]
Rollo, p. 16.
[44]
Cabalan Pastulan Negrito Labor Association v. NLRC, 311 Phil. 744, 762-763 (1995).
[45]
Catubay v. National Labor Relations Commission, supra note 39 at 658.
[46]
Rosewood Processing, Inc. v. NLRC, 352 Phil. 1013, 1029 (1998) citing Philippine Airlines,
Inc. v. National Labor Relations Commission, 263 SCRA 638, 658.
[47]
Rollo, pp. 65 and 86.
[48]
See Ginete v. Court of Appeals, 357 Phil. 36, 46-47 (1998).
FIRST DIVISION
[G.R. No. 126322. January 16, 2002]
YUPANGCO COTTON MILLS, INC., petitioner, vs. COURT OF
APPEALS, HON. URBANO C. VICTORIO, SR., Presiding
Judge, RTC Branch 50, Manila, RODRIGO SY MENDOZA,
SAMAHANG MANGGAGAWA NG ARTEX (SAMAR-ANGLO)
represented by its Local President RUSTICO CORTEZ, and
WESTERN GUARANTY CORPORATION, respondents.
D E C I S I O N
PARDO, J.:
The Case
The case is a petition for review on certiorari of the decision of the Court of
Appeals
[1]
dismissing the petition ruling that petitioner was guilty of forum
shopping and that the proper remedy was appeal in due course, not certiorari or
mandamus.
In its decision, the Court of Appeals sustained the trial courts ruling that the
remedies granted under Section 17, Rule 39 of the Rules of Court are not
available to the petitioner because the Manual of Instructions for Sheriffs of the
NLRC does not include the remedy of an independent action by the owner to
establish his right to his property.
The Facts
The facts, as found by the Court of Appeals, are as follows:
From the records before us and by petitioners own allegations and admission,
it has taken the following actions in connection with its claim that a sheriff of
the National Labor Relations Commission erroneously and unlawfully levied
upon certain properties which it claims as its own.
1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995.
2. It filed an Affidavit of Adverse Claim with the National Labor Relations
Commission (NLRC) on July 4, 1995, which was dismissed on August 30,
1995, by the Labor Arbiter.
3. It filed a petition for certiorari and prohibition with the Regional Trial
Court of Manila, Branch 49, docketed as Civil Case No. 95-75628 on October
6, 1995. The Regional Trial Court dismissed the case on October 11, 1995 for
lack of merit.
4. It appealed to the NLRC the order of the Labor Arbiter dated August 13,
1995 which dismissed the appeal for lack of merit on December 8, 1995.
5. It filed an original petition for mandatory injunction with the NLRC on
November 16, 1995. This was docketed as Case No. NLRC-NCR-IC.
0000602-95. This case is still pending with that Commission.
6. It filed a complaint in the Regional Trial Court in Manila which was
docketed as Civil Case No. 95-76395. The dismissal of this case by public
respondent triggered the filing of the instant petition.
In all of the foregoing actions, petitioner raised a common issue, which is that
it is the owner of the properties located in the compound and buildings of Artex
Development Corporation, which were erroneously levied upon by the sheriff
of the NLRC as a consequence of the decision rendered by the said
Commission in a labor case docketed as NLRC-NCR Case No. 00-05-02960-
90.
[2]

On March 29, 1996, the Court of Appeals promulgated a
decision
[3]
dismissing the petition on the ground of forum shopping and that
petitioners remedy was to seek relief from this Court.
On April 18, 1996, petitioner filed with the Court of Appeals a motion for
reconsideration of the decision.
[4]
Petitioner argued that the filing of a complaint
for accion reinvindicatoria with the Regional Trial Court was proper because it is
a remedy specifically granted to an owner (whose properties were subjected to a
writ of execution to enforce a decision rendered in a labor dispute in which it was
not a party) by Section 17 (now 16), Rule 39, Revised Rules of Court and by the
doctrines laid down in Sy v. Discaya,
[5]
Santos v. Bayhon
[6]
and Manliguez v. Court
of Appeals.
[7]

In addition, petitioner argued that the reliefs sought and the issues involved
in the complaint for recovery of property and damages filed with the Regional
Trial Court of Manila, presided over by respondent judge, were entirely distinct
and separate from the reliefs sought and the issues involved in the proceedings
before the Labor Arbiter and the NLRC. Besides, petitioner pointed out that
neither the NLRC nor the Labor Arbiter is empowered to adjudicate matters
involving ownership of properties.
On August 27, 1996, the Court of Appeals denied petitioners motion for
reconsideration.
[8]

Hence, this appeal.
[9]

The Issues
The issues raised are (1) whether the Court of Appeals erred in ruling that
petitioner was guilty of forum shopping, and (2) whether the Court of Appeals
erred in dismissing the petitioners accion reinvindicatoria on the ground of lack
of jurisdiction of the trial court.
The Courts Ruling
On the first issue raised, we rule that there was no forum shopping.
In Golangco v. Court of Appeals,
[10]
we held:
What is truly important to consider in determining whether forum shopping
exists or not is the vexation caused the courts and parties-litigant by a party
who asks different courts and/or administrative agencies to rule on the same or
related causes and/or grant the same or substantially the same reliefs, in the
process creating possibility of conflicting decisions being rendered by the
different for a upon the same issues.
xxx xxx xxx
There is no forum-shopping where two
different orders were questioned, two distinct causes of action and issues
were raised, and two objectives were sought. (Underscoring ours)
In the case at bar, there was no identity of parties, rights and causes of
action and reliefs sought.
The case before the NLRC where Labor Arbiter Reyes issued a writ of
execution on the property of petitioner was a labor dispute between Artex and
Samar-Anglo. Petitioner was not a party to the case. The only issue petitioner
raised before the NLRC was whether or not the writ of execution issued by the
labor arbiter could be satisfied against the property of petitioner, not a party to
the labor case.
On the other hand, the accion reinvindicatoria filed by petitioner in the trial
court was to recover the property illegally levied upon and sold at
auction. Hence, the causes of action in these cases were different.
The rule is that for forum-shopping to exist both actions must involve the
same transactions, the same circumstances. The actions must also raise
identical causes of action, subject matter and issues.
[11]

In Chemphil Export & Import Corporation v. Court of Appeals,
[12]
we ruled
that:
Forum-shopping or the act of a party against whom an adverse judgment has
been rendered in one forum, of seeking another (and possible) opinion in
another forum (other than by appeal or the special civil action of certiorari), or
the institution of two (2) or more actions or proceedings grounded on the same
cause on the supposition that one or the other would make a favorable
disposition.
On the second issue, a third party whose property has been levied upon by a
sheriff to enforce a decision against a judgment debtor is afforded with several
alternative remedies to protect its interests. The third party may avail himself of
alternative remedies cumulatively, and one will not preclude the third party from
availing himself of the other alternative remedies in the event he failed in the
remedy first availed of.
Thus, a third party may avail himself of the following alternative remedies:
a) File a third party claim with the sheriff of the Labor Arbiter, and
b) If the third party claim is denied, the third party may appeal the denial to the
NLRC.
[13]

Even if a third party claim was denied, a third party may still file a proper
action with a competent court to recover ownership of the property illegally
seized by the sheriff. This finds support in Section 17 (now 16), Rule 39,
Revised Rules of Court, to wit:
SEC. 17 (now 16). Proceedings where property claimed by third person. -If
property claimed by any other person than the judgment debtor or his agent,
and such person makes an affidavit of his title thereto or right to the possession
thereof, stating the grounds of such right or title, and serve the same upon the
officer making the levy, and a copy thereof upon the judgment creditor, the
officer shall not be bound to keep the property, unless such judgment creditor
or his agent, on demand of the officer, indemnify the officer against such claim
by a bond in a sum not greater than the value of the property levied on. In case
of disagreement as to such value, the same shall be determined by the court
issuing the writ of execution.
The officer is not liable for damages, for the taking or keeping of the property,
to any third-party claimant unless a claim is made by the latter and unless an
action for damages is brought by him against the officer within one hundred
twenty (120) days from the date of the filing of the bond. But nothing herein
contained shall prevent such claimant or any third person from vindicating his
claim to the property by any proper action.
When the party in whose favor the writ of execution runs, is the Republic of
the Philippines, or any officer duly representing it, the filing of such bond shall
not be required, and in case the sheriff or levying officer is sued for damages
as a result of the levy, he shall be represented by the Solicitor General and if
held liable therefor, the actual damages adjudged by the court shall be paid by
the National Treasurer out of such funds as may be appropriated for the
purpose. (Underscoring ours)
In Sy v. Discaya,
[14]
we ruled that:
The right of a third-party claimant to file an independent action to vindicate
his claim of ownership over the properties seized is reserved by Section 17
(now 16), Rule 39 of the Rules of Court, x x x:
x x x x x x x x x
As held in the case of Ong v. Tating, et. al., construing the aforecited rule, a
third person whose property was seized by a sheriff to answer for the obligation
of a judgment debtor may invoke the supervisory power of the court which
authorized such execution. Upon due application by the third person and after
summary hearing, the court may command that the property be released from
the mistaken levy and restored to the rightful owner or possessor. What said
court do in these instances, however, is limited to a determination of whether
the sheriff has acted rightly or wrongly in the performance of his duties in the
execution of judgment, more specifically, if he has indeed taken hold of
property not belonging to the judgment debtor. The court does not and
cannot pass upon the question of title to the property, with any character of
finality. It can treat of the matter only insofar as may be necessary to decide if
the sheriff has acted correctly or not. It can require the sheriff to restore the
property to the claimants possession if warranted by the evidence. However, if
the claimants proof do not persuade the court of the validity of his title or right
of possession thereto, the claim will be denied.
Independent of the above-stated recourse, a third-party claimant may also
avail of the remedy known as terceria, provided in Section 17 (now 16), Rule
39, by serving on the officer making the levy an affidavit of his title and a copy
thereof upon the judgment creditor. The officer shall not be bound to keep the
property, unless such judgment creditor or his agent, on demand of the officer,
indemnifies the officer against such claim by a bond in a sum not greater than
the value of the property levied on. An action for damages may be brought
against the sheriff within one hundred twenty (120) days from the filing of the
bond.
The aforesaid remedies are nevertheless without prejudice to any proper
action that a third-party claimant may deem suitable to vindicate his claim to
the property. Such a proper action is, obviously, entirely distinct from that
explicitly prescribed in Section 17 of Rule 39, which is an action for damages
brought by a third-party claimant against the officer within one hundred twenty
(120) days from the date of the filing of the bond for the taking or keeping of
the property subject of the terceria.
Quite obviously, too, this proper action would have for its object the
recovery of ownership or possession of the property seized by the sheriff, as
well as damages resulting from the allegedly wrongful seizure and detention
thereof despite the third-party claim; and it may be brought against the sheriff
and such other parties as may be alleged to have colluded with him in the
supposedly wrongful execution proceedings, such as the judgment creditor
himself. Such proper action, as above pointed out, is and should be an
entirely separate and distinct action from that in which execution has issued, if
instituted by a stranger to the latter suit.
The remedies above mentioned are cumulative and may be resorted to by
a third-party claimant independent of or separately from and without need
of availing of the others. If a third-party claimant opted to file a proper action
to vindicate his claim of ownership, he must institute an action, distinct and
separate from that in which the judgment is being enforced, with the court of
competent jurisdiction even before or without need of filing a claim in the court
which issued the writ, the latter not being a condition sine qua non for the
former. In such proper action, the validity and sufficiency of the title of the
third-party claimant will be resolved and a writ of preliminary injunction
against the sheriff may be issued. (Emphasis and underscoring ours)
In light of the above, the filing of a third party claim with the Labor Arbiter and
the NLRC did not preclude the petitioner from filing a subsequent action for
recovery of property and damages with the Regional Trial Court. And, the
institution of such complaint will not make petitioner guilty of forum shopping.
[15]

In Santos v. Bayhon,
[16]
wherein Labor Arbiter Ceferina Diosana rendered a
decision in NLRC NCR Case No. 1-313-85 in favor of Kamapi, the NLRC
affirmed the decision. Thereafter, Kamapi obtained a writ of execution against the
properties of Poly-Plastic Products or Anthony Ching. However, respondent
Priscilla Carrera filed a third-party claim alleging that Anthony Ching had sold the
property to her. Nevertheless, upon posting by the judgment creditor of an
indemnity bond, the NLRC Sheriff proceeded with the public auction
sale. Consequently, respondent Carrera filed with Regional Trial Court, Manila
an action to recover the levied property and obtained a temporary restraining
order against Labor Arbiter Diosana and the NLRC Sheriff from issuing a
certificate of sale over the levied property. Eventually, Labor Arbiter Santos
issued an order allowing the execution to proceed against the property of Poly-
Plastic Products. Also, Labor Arbiter Santos and the NLRC Sheriff filed a motion
to dismiss the civil case instituted by respondent Carrera on the ground that the
Regional Trial Court did not have jurisdiction over the labor case. The trial court
issued an order enjoining the enforcement of the writ of execution over the
properties claimed by respondent Carrera pending the determination of the
validity of the sale made in her favor by the judgment debtor Poly-Plastic
Products and Anthony Ching.
In dismissing the petition for certiorari filed by Labor Arbiter Santos, we ruled
that:
x x x. The power of the NLRC to execute its judgments extends only to
properties unquestionably belonging to the judgment debtor (Special Servicing
Corp. v. Centro La Paz, 121 SCRA 748).
The general rule that no court has the power to interfere by injunction with the
judgments or decrees of another court with concurrent or coordinate
jurisdiction possessing equal power to grant injunctive relief, applies only when
no third-party claimant is involved (Traders Royal Bank v. Intermediate
Appellate Court, 133 SCRA 141 [1984]). When a third-party, or a stranger to
the action, asserts a claim over the property levied upon, the claimant may
vindicate his claim by an independent action in the proper civil court which
may stop the execution of the judgment on property not belonging to the
judgment debtor. (Underscoring ours)
In Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158
[1991], we ruled that:
The well-settled doctrine is that a proper levy is indispensable to a valid sale
on execution. A sale unless preceded by a valid levy is void. Therefore,
since there was no sufficient levy on the execution in question, the private
respondent did not take any title to the properties sold thereunder x x x.
A person other than the judgment debtor who claims ownership or right over
the levied properties is not precluded, however, from taking other legal
remedies. (Underscoring ours)
Jurisprudence is likewise replete with rulings that since the third-party
claimant is not one of the parties to the action, he could not, strictly speaking,
appeal from the order denying his claim, but should file a separate reinvindicatory
action against the execution creditor or the purchaser of the property after the
sale at public auction, or a complaint for damages against the bond filed by the
judgment creditor in favor of the sheriff.
[17]

And in Lorenzana v. Cayetano,
[18]
we ruled that:
The rights of a third-party claimant should not be decided in the action where
the third-party claim has been presented, but in a separate action to be instituted
by the third person. The appeal that should be interposed if the term appeal
may properly be employed, is a separate reinvindicatory action against the
execution creditor or the purchaser of the property after the sale at public
auction, or complaint for damages to be charged against the bond filed by the
judgment creditor in favor of the sheriff. Such reinvindicatory action is
reserved to the third-party claimant.
A separate civil action for recovery of ownership of the property would not
constitute interference with the powers or processes of the Arbiter and the NLRC
which rendered the judgment to enforce and execute upon the levied
properties. The property levied upon being that of a stranger is not subject to
levy. Thus, a separate action for recovery, upon a claim and prima-facie showing
of ownership by the petitioner, cannot be considered as interference.
The Fallo
WHEREFORE, the Court REVERSES the decision of the Court of Appeals
and the resolution denying reconsideration.
[19]
In lieu thereof, the Court renders
judgment ANNULLING the sale on execution of the subject property conducted
by NLRC Sheriff Anam Timbayan in favor of respondent SAMAR-ANGLO and
the subsequent sale of the same to Rodrigo Sy Mendoza. The Court declares
the petitioner to be the rightful owner of the property involved and remands the
case to the trial court to determine the liability of respondents SAMAR-ANGLO,
Rodrigo Sy Mendoza, and WESTERN GUARANTY CORPORATION to pay
actual damages that petitioner claimed.
Costs against respondents, except the Court of Appeals.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago,
JJ., concur.

[1]
In CA-G. R. SP No. 39700, promulgated on March 29, 1996, Petition, Annex A, Rollo, pp. 65-
76. Verzola, J., ponente, Abad Santos, Jr. and Agcaoili, JJ., concurring.
[2]
Supra, Note 1, at pp. 67-68.
[3]
Petition, Annex A, Rollo, pp. 65-71. Verzola, J., ponente, Abad Santos, Jr. and Agcaoili, JJ.,
concurring.
[4]
CA Rollo, pp. 410-438.
[5]
181 SCRA 378, 382 [1990].
[6]
199 SCRA 525 [1991].
[7]
232 SCRA 427, 431-432 [1994].
[8]
Petition, Annex B, Rollo, pp. 73-76.
[9]
Petition, filed on September 27, 1996, Rollo, pp. 4-63. On October 18, 1999, we gave due
course to the petition (Rollo, pp. 724-727).
[10]
347 Phil. 771 [1997].
[11]
International Container Terminal Services, Inc. v. Court of Appeals, 319 Phil. 510 [1995].
[12]
231 SCRA 257 [1994].
[13]
Section 2, Rule VI of the Manual of Instructions for Sheriffs of the NLRC.
[14]
Supra, Note 7.
[15]
Manliquez v. Court of Appeals, 232 SCRA 427 [1994].
[16]
Supra, Note 8.
[17]
Bayer Philippines, Inc. v. Agana, 63 SCRA 355 [1975].
[18]
78 SCRA 425 [1977].
[19]
In CA-G. R. SP No. 39700.

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[G.R. No. 152494. September 22, 2004]

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