G.R. No.
151133 June 30, 2008
AFP GENERAL INSURANCE CORPORATION, petitioner,
vs.
NOEL MOLINA, JUANITO ARQUEZA, LEODY VENANCIO, JOSE OLAT, ANGEL CORTEZ,
PANCRASIO SIMPAO, CONRADO CALAPON AND NATIONAL LABOR RELATIONS
COMMISSION (FIRST DIVISION), respondents.
Facts
The private respondents are the complainants in a case for illegal dismissal filed against
Radon Security & Allied Services Agency and/or Raquel Aquias and Ever Emporium, Inc. In his
Decision dated August 20, 1996, the Labor Arbiter ruled that the private respondents were
illegally dismissed and ordered Radon Security to pay them separation pay, backwages, and
other monetary claims. Radon Security appealed the Labor Arbiter’s decision to public
respondent NLRC and posted a supersedeas bond, issued by herein petitioner AFPGIC as
surety. When the Decision dated April 6, 1998 of the NLRC became final and executory, private
respondents filed an Urgent Motion for Execution. As a result, the NLRC Research and
Information Unit submitted a Computation of the Monetary Awards in accordance with the NLRC
decision. Radon Security opposed said computation in its Motion for Recomputation. On
February 5, 1999, the Labor Arbiter issued a Writ of Execution 5 incorporating the computation of
the NLRC Research and Information Unit. That same date, the Labor Arbiter dismissed the
Motion for Recomputation filed by Radon Security. By virtue of the writ of execution, the NLRC
Sheriff issued a Notice of Garnishment against the supersedeas bond. The petitioner then
appealed the Labor Arbiter’s order to the NLRC. The appeals of Radon Security and AFPGIC
were jointly heard. Wherefor the appeal was dismissed for lack of merit. AFPGIC then filed a
special civil action for certiorari with the Court of Appeals, on the ground that the NLRC
committed a grave abuse of discretion in affirming the Order dated March 30, 1999 of the Labor
Arbiter. The petition was denied due course.
Issue
Whether or not the Court of Appeals seriously erred in sustaining the public respondent
NLRC although the latter gravely abused its discretion when it arbitrarily ignored the fact that
subject appeal bond was already cancelled for non-payment of premium and thus it could not be
subject of execution or garnishment
Held
No. The controversy before the Court involves more than just the mere application of the
provisions of the Insurance Code to the factual circumstances. This instant case, after all, traces
its roots to a labor controversy involving illegally dismissed workers. It thus entails the
application of labor laws and regulations. Recall that the heart of the dispute is not an ordinary
contract of property or life insurance, but an appeal bond required by both substantive and
adjective law in appeals in labor disputes, specifically Article 223 of the Labor Code, as
amended by Republic Act No. 6715, and Rule VI, Section 6 of the Revised NLRC Rules of
Procedure. Said provisions mandate that in labor cases where the judgment appealed from
involves a monetary award, the appeal may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company accredited by the NLRC. The perfection of
an appeal by an employer "only" upon the posting of a cash or surety bond clearly and
categorically shows the intent of the lawmakers to make the posting of a cash or surety bond by
the employer to be the exclusive means by which an employer’s appeal may be
perfected. Additionally, the filing of a cash or surety bond is a jurisdictional requirement in an
appeal involving a money judgment to the NLRC. In addition, Rule VI, Section 6 of the Revised
NLRC Rules of Procedure is a contemporaneous construction of Article 223 by the
NLRC. As an interpretation of a law by the implementing administrative agency, it is accorded
great respect by this Court. Note that Rule VI, Section 6 categorically states that the cash or
surety bond posted in appeals involving monetary awards in labor disputes "shall be in effect
until final disposition of the case." This could only be construed to mean that the surety bond
shall remain valid and in force until finality and execution of judgment, with the resultant
discharge of the surety company only thereafter, if we are to give teeth to the labor protection
clause of the Constitution. To construe the provision any other way would open the floodgates
to unscrupulous and heartless employers who would simply forego paying premiums on their
surety bond in order to evade payment of the monetary judgment. The Court cannot be a party
to any such iniquity.
The Labor Arbiter directed the NLRC Sheriff to garnish the surety bond issued by the
petitioner. The latter, as surety, is mandated to comply with the writ of garnishment, for as
earlier pointed out, the bond remains enforceable and under the jurisdiction of the NLRC until it
is discharged. In turn, the petitioner may proceed to collect the amount it paid on the bond, plus
the premiums due and demandable, plus any interest owing from Radon Security. This is
pursuant to the principle of subrogation enunciated in Article 2067 5 of the Civil Code which we
apply to the suretyship agreement between AFPGIC and Radon Security, in accordance with
Section 178 of the Insurance Code. Finding no reversible error committed by the Court of
Appeals in CA-G.R. SP No. 58763, we sustain the challenged decision.
WHEREFORE, the instant petition is DENIED for lack of merit.
