GR 88050; (January, 1992) (Digest)
G.R. No. 88050 . January 30, 1992.
STRONGHOLD INSURANCE COMPANY, INC., petitioner, vs. HON. COURT OF APPEALS and ADRIANO URTESUELA, respondents.
FACTS
Private respondent Adriano Urtesuela was hired as a seaman by Pan Asian Logistics and Trading for its foreign principal. Petitioner Stronghold Insurance Company issued a surety bond in the amount of P50,000.00 to answer for the employer’s liabilities. Urtesuela’s employment was prematurely terminated. He filed a complaint with the Philippine Overseas Employment Administration (POEA) against Pan Asian and the foreign employer. The POEA rendered a decision in his favor, which became final and executory. Execution against Pan Asian was unsatisfied as the company had ceased operations.
Urtesuela then filed a complaint against Stronghold before the Insurance Commission to enforce the surety bond. The Insurance Commission dismissed, holding Urtesuela was not a proper party to sue on the bond. The Court of Appeals reversed, declaring Urtesuela, as the beneficiary, could sue and that Stronghold was solidarily liable.
ISSUE
Whether the petitioner surety company was denied due process and is thus not bound by the POEA decision it did not participate in.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The petitioner’s due process argument fails. The surety bond contained a clear stipulation: “To answer for all liabilities which the Philippine Overseas Employment Administration may adjudge/impose against the Principal.” This constitutes a contractual undertaking by the surety to abide by the POEA’s judgment against its principal. Furthermore, the bond expressly stated, “It is understood that notice to the Principal is notice to the surety.” By this special stipulation, the petitioner is deemed to have received constructive notice of the POEA proceedings and had the opportunity to intervene if it so chose. Its failure to do so cannot later be invoked to claim a denial of due process.
The Court emphasized that the bond’s purpose is to protect overseas workers, ensuring recourse when foreign employers are beyond jurisdiction. Technicalities must yield to the constitutional mandate of social justice. Notably, in the separate action before the Insurance Commission to enforce the bond, the petitioner was in fact given full opportunity to be heard. Therefore, no denial of due process occurred. The surety is solidarily liable for the final POEA judgment.