GR 164344; (December, 2008) (Digest)
G.R. No. 164344; December 23, 2008
KENJI OKADA, petitioner, vs. SECURITY PACIFIC ASSURANCE CORPORATION, respondent.
FACTS
Petitioner Kenji Okada filed a complaint for illegal dismissal and monetary claims against Meiyu Technology Corporation (Meiyu) and its officers. On July 12, 1999, the Labor Arbiter ruled in Okada’s favor, ordering Meiyu to pay him P6,380,000.00. Meiyu appealed to the NLRC, posting an appeal bond issued by Wellington Insurance Co., Inc. The NLRC initially reversed the Labor Arbiter’s decision on the ground of prescription. However, upon Okada’s motion for reconsideration, the NLRC found the appeal bond to be spurious, set aside its decision, and reinstated the Labor Arbiter’s award. Meiyu elevated the case to the CA via certiorari. Meanwhile, Meiyu posted another appeal bond, this time issued by respondent Security Pacific Assurance Corporation (SPAC), to stay execution. The CA denied Meiyu’s petition, ruling that the appeal was not perfected due to the fake bond, making the Labor Arbiter’s decision final. A writ of execution was subsequently issued. SPAC filed a motion to quash the writ, arguing it should be discharged from liability because its bond was belatedly filed and did not perfect the appeal. The Labor Arbiter denied SPAC’s motion, holding that SPAC’s liability was not conditioned on the perfection of the appeal but on the affirmance of the decision. The CA granted SPAC’s petition for certiorari, annulled the writ of execution insofar as it ordered satisfaction from SPAC’s bond, and vacated the Labor Arbiter’s Order. The CA ruled that the bond’s validity was conditioned on the perfection of the appeal, which did not occur.
ISSUE
Whether the Court of Appeals erred in ruling that the surety bond issued by respondent SPAC is invalid and cannot be held liable for the satisfaction of the Labor Arbiter’s monetary award, on the ground that the appeal of the employer (Meiyu) was not perfected.
RULING
No, the Court of Appeals did not err. The Supreme Court affirmed the CA’s decision. The posting of a valid appeal bond is a jurisdictional requirement for the perfection of an appeal in labor cases. The bond serves to stay the execution of the monetary award. Since Meiyu’s initial appeal bond was spurious, the appeal was not perfected, and the Labor Arbiter’s decision became final and executory. The subsequent bond issued by SPAC was filed belatedly, long after the NLRC had dismissed the appeal and the case was already with the CA. This bond could no longer serve its purpose of perfecting the appeal or staying execution. The validity and efficacy of an appeal bond are conditioned upon the perfection of the appeal. As the appeal was never perfected due to the fake bond, the condition precedent for SPAC’s liability under its bond was not fulfilled. Therefore, SPAC cannot be held liable. The proper recourse for Okada is to run after the employer, Meiyu, to satisfy the judgment award.