Philippine Surety & Insurance Co. v. Jacala
REITERATIONFacts
The Antecedents: Petitioner Philippine Surety and Insurance Company, Inc. (surety) executed two performance bonds in favor of the Republic of the Philippines to guarantee the faithful discharge of obligations by International Construction and Engineering Company, Inc. (contractor) for bridge construction projects. Laborers who claimed to have worked for the contractor and were allegedly illegally dismissed instituted a case before the Court of Industrial Relations (CIR) against the contractor and the surety for unpaid wages and separation pay. Procedural History: The CIR rendered a decision directing the contractor and the surety to pay the laborers their unpaid wages and separation pay. No appeal was taken, and the decision became final and executory. Subsequently, the CIR issued an alias writ of execution, leading to the distraint and levy of the surety's properties. The surety then filed a special civil action for a writ of certiorari to annul the CIR decision and the alias writ of execution. The Petition: The surety contended that the CIR had no jurisdiction over the case, citing Act No. 3688, which allegedly requires actions on performance bonds to be brought in the Court of First Instance after the complete performance of contracts. The surety also relied on a previous Supreme Court ruling (Cristitu Bautista vs. Auditor General) to argue that the laborers had no right of action against the bonds. The surety sought to annul the CIR decision and the alias writ of execution.
Issue(s)
Whether a writ of certiorari may be availed of by the petitioner, Philippine Surety and Insurance Co., Inc., despite its failure to appeal the decision of the Court of Industrial Relations in Case No. 529-V. Whether the Court of Industrial Relations had jurisdiction to take cognizance of and decide Case No. 529-V, considering the provisions of Act No. 3688 regarding venue and the requirement that actions be brought in the name of the Government. Whether the ruling in Cristitu Bautista vs. Auditor General, concerning the priority of the Government's claim over the performance bond, is controlling in the case at bar and precludes the laborers' claims against the surety.
Ruling
The petition is dismissed, and the writ of preliminary injunction is dissolved.
Ratio Decidendi
On Issue 1: The Supreme Court held that a writ of certiorari is not a proper remedy because the surety had a plain, speedy, and adequate remedy in the ordinary course of law, which was an appeal from the decision of the Court of Industrial Relations. The surety failed to appeal from March 2, 1954, when the decision was rendered, to August 26, 1957, when the alias writ of execution was issued, a period of over three years and five months. The Court emphasized that certiorari cannot be availed of in such circumstances, especially when the failure to appeal was due to the surety's own negligence or intentional inaction, having even partially satisfied the obligation by making payments. To allow certiorari after failing to appeal would permit it to be a substitute for a lost appeal, which is not permitted under established jurisprudence. On Issue 2: The Supreme Court ruled that the provisions of Act No. 3688 concerning the place where actions on performance bonds should be brought regulate venue, which is a procedural matter, not a jurisdictional one. Venue may be waived, and the surety's failure to appeal the CIR decision implies an abandonment of its right to press the question of venue. Moreover, the Court clarified that in cases of inconsistency, Act No. 3688's provisions are deemed repealed by Commonwealth Act No. 103, which grants the Court of Industrial Relations jurisdiction over 'all questions, matters, controversies or disputes arising between and or affecting employers and employees or laborers.' The Court further explained that the requirement under Act No. 3688 for actions to be brought by the Government or in its name merely affects the cause of action, not the jurisdiction to hear the case and render a valid decision. Errors committed by a court in the exercise of its jurisdiction are merely errors of judgment, reviewable by appeal, not by certiorari, which is reserved for errors of jurisdiction that render an order or judgment void or voidable. The CIR had jurisdiction over the subject matter (labor claims), and any alleged non-compliance with Act No. 3688's procedural requirements constituted, at best, an error of judgment, not a jurisdictional defect. On Issue 3: The Supreme Court found that the case of Cristitu Bautista, et al., vs. Auditor General is not controlling in the case at bar. The Court pointed out that the laborers involved in the present case and in CIR Case No. 529-V were not parties in the Bautista case, nor was the surety a party therein. Furthermore, the issue in Bautista was different, involving a claim against the Government for unpaid wages, not the right of persons to sue and demand payment from the surety under a performance bond. Thus, neither the parties nor the cause of action in the two sets of cases were identical, preventing the application of the Bautista ruling to negate the laborers' claim against the surety in this case. The issues of the amount or extent of the surety's liability and the Government's alleged priority claim affect the wisdom or legal soundness of the CIR decision, not its jurisdiction or validity, and are therefore beyond the scope of a special civil action for certiorari.
Main Doctrine
A writ of certiorari may not be availed of to annul a decision of the Court of Industrial Relations when the aggrieved party failed to appeal the decision and instead chose to satisfy it in part, as the failure to appeal constitutes negligence and an abandonment of the right to question the decision. Furthermore, issues concerning venue are procedural and can be waived, and the Court of Industrial Relations has jurisdiction over labor disputes, even if the action involves a performance bond, as Commonwealth Act No. 103, as amended, governs such matters.