JOURDAN ET CIE GROUP OF COMPANIES, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, SHERIFF MARIO L. GARCIA, LEONILO VALLEJO AND AVELINO CASIPIT, JR., RESPONDENTS.

Jourdan Et Cie Group of Companies versus National Labor Relations Commission

The Case

This is a special civil action for certiorari and prohibition brought by Jourdan Et Cie Group of Companies against the National Labor Relations Commission, Sheriff Mario L. Garcia, and its former employees Leonilo Vallejo and Avelino Casipit, Junior. The company asks the Supreme Court to annul the Commission's resolutions affirming the labor arbiter's orders that granted alias writs of execution enforcing a final money judgment for illegal dismissal. The case matters because it draws the line between a writ of execution that lawfully carries execution fees and one that varies a final judgment, and because it teaches when a garnishment of a judgment obligor's own time deposit, posted as security for an appeal bond, is proper.

Procedural History

The case began as a complaint for illegal dismissal and money claims filed before the Regional Arbitration Branch in San Fernando, La Union. Executive Labor Arbiter Norma C. Olegario rendered a decision finding the private respondents illegally dismissed and awarding each of them 68,740 pesos and 75 centavos. The company appealed to the National Labor Relations Commission, which dismissed the appeal for lack of merit, and that decision became final and executory.

A writ of execution was then issued, followed by a second alias writ that included the surety company that had posted the appeal bond. The company moved to quash the writs, and the labor arbiter denied the motion; its motion for reconsideration was likewise denied. The company appealed to the Commission, which affirmed the labor arbiter in a resolution dated April 13, 2004 and denied reconsideration in a resolution dated August 23, 2004. From those resolutions, the company filed this petition for certiorari and prohibition with the Supreme Court.

Facts

Leonilo Vallejo and Avelino Casipit, Junior sued their former employer, Jourdan Et Cie Group of Companies, for illegal dismissal and for separation pay, wage differentials, backwages, holiday pay, rest day pay, and overtime pay. The labor arbiter found them illegally dismissed and awarded each of them 68,740 pesos and 75 centavos, representing separation pay, backwages, unpaid wages, attorney's fees, and indemnity for denial of their right to due process. The company appealed, but the Commission dismissed the appeal, and the decision became final and executory.

To enforce the award, the labor arbiter issued a writ of execution for the total sum of 137,481 pesos and 50 centavos, plus an execution fee of 1,000 pesos and a deposit fee of 687 pesos. A notice of garnishment was served on the bank where the company held a time deposit, but the bank refused to comply on the company's instruction. The company then moved to quash the writ, arguing that it deviated from the dispositive portion by raising the amount and that the notice improperly named Teresita Yujuico, against whom the case had already been dismissed.

While that motion was pending, a second alias writ was issued, this time including Stronghold Insurance Company, the bonding company that had posted the appeal bond, and directing that execution could proceed against the surety bond secured by the company's time deposit. The labor arbiter denied the motion to quash, ruling that execution could proceed against either the company or the surety since they were solidarily liable, and that the time deposit formed part of the appeal bond and could answer for the judgment. The Commission affirmed, and the company elevated the matter to the Supreme Court.

Issues

• Whether or not the writ of execution varied the terms of the final judgment when it added execution and deposit fees to the monetary award.
• Whether or not the garnishment of the company's time deposit, posted as collateral for the surety bond, was irregular and violative of due process.
• Whether or not the alias writs were improvidently issued against the wrong party.

Applicable Provisions

Section 7, Rule VIII of the 2002 Rules of Procedure of the National Labor Relations Commission provides:

In executing an order, resolution or decision, the sheriff or other authorized officer acting as such, shall be guided strictly by the Sheriff's Manual which shall form part of these Rules, and in the absence of applicable rules, the revised Rules of Court, as amended.

This provision makes the Commission's Manual on Execution of Judgment the governing standard for the sheriff's conduct in executing the award.

Section 6, Rule IX of the National Labor Relations Commission Manual on Execution of Judgment provides:

Execution fees shall be charged against the losing party, and for awards in the amount of 100,000 pesos or more but not exceeding 150,000 pesos, the fee shall be in the amount of 1,000 pesos.

This provision authorizes the 1,000 peso execution fee as a charge against the losing party, not as part of the judgment award.

Paragraph 2, Section 2, Rule III of the same Manual provides:

If the execution be for the payment of a sum of money by the losing party, the writ shall be served by the sheriff upon the losing party or upon any person required by law to obey the same before proceeding to satisfy the judgment out of the personal property of such party and if no sufficient personal property can be found, then out of his real property.

This provision confirms that execution properly runs against the losing party, here the company as judgment obligor.

Section 2, Rule V of the same Manual provides:

Garnishment is effected by the sheriff or authorized officer by serving a notice thereof to the third party who has possession or control of such money, goods, chattels and/or any interest therein, belonging or owing to the losing party directing or requiring him to hold the same subject to further orders from the Commission or Labor Arbiter who issued the writ. Where the property garnished consists of money deposited with a bank or third party, the Commission or Labor Arbiter shall order that the same shall only be released to the cashier of the National Labor Relations Commission.

This provision supplies the procedure for garnishment and validates the notice served on the bank holding the company's deposit.

Ruling

On the first issue, the Court held that the imposition of execution fees does not amount to varying or modifying a final judgment. The labor arbiter had expressly stated that the execution and deposit fees should be paid separately from the judgment award, showing they were not part of the money to be given to the private respondents. The Court distinguished the cases cited by the company, where the writs truly departed from the dispositive portions, and stressed that the company could have avoided the fees had it satisfied its obligation, which had long been final. However, the Court found the 687 peso deposit fee unwarranted, because the Manual on Execution of Judgment does not provide for it.

On the second issue, the Court upheld the garnishment. The time deposit belonged to the company and formed part of the appeal bond, so it could be executed against to satisfy the judgment. The Court reminded that execution is the final stage of litigation and cannot be frustrated except for serious reasons demanded by justice and equity.

On the third issue, the Court held that the writs were not improvidently issued against the wrong party. As the judgment obligor, the company must ultimately satisfy the award. The Court noted that the company had been asked to deposit the amount but did not, and it closed with a reminder to counsel that the duty to assist in the administration of justice lies first with the court and not with the client.

Doctrine

A final and executory judgment may be executed as a matter of ministerial duty, and corrections in execution are allowed only on recognized grounds, such as when the writ varies the judgment, when execution is sought against exempt property, or when the writ is improvidently issued or defective in substance. The imposition of execution fees authorized by the Commission's Manual does not vary the judgment, because such fees are charged against the losing party and are separate from the award. A deposit fee not provided for in the Manual, however, cannot be imposed. Garnishment of the judgment obligor's own funds, including a time deposit posted as security for an appeal bond, is proper under the Manual on Execution of Judgment.

Disposition

The petition was partly granted: the two alias writs of execution were quashed only insofar as they ordered payment of the deposit fee, while the rest of the execution stood.

Remember This

Memorize this line: execution fees charged against the losing party do not vary a final judgment, but a fee the Manual does not authorize cannot be collected. Examiners use this case to test the limits of a writ of execution and the propriety of garnishing a judgment obligor's time deposit posted as an appeal bond.