PHILIPPINE SURETY AND INSURANCE CO., INC., PETITIONER, VS. S. JACALA, D. TIBURCIO, E. CAPULONG, H. TEJADA, G. TEJADA, D. GABITANAN, M. GABITANAN, J. DELUMPA, A. JAVIER, E. VILLA…

This is a special civil action for a writ of certiorari to annul the
decision of the Court of Industrial Relations, dated March 2, 1954, in
Case No. 529-V thereof, and an alias writ of execution of said
decision, dated August 7, 1957. Petitioner herein, Philippine Surety
and Insurance Company, Inc., likewise, prayed for, and, upon the filing
of the requisite bond, we issued, a writ of preliminary injunction,
enjoining respondent Sheriff of Manila from complying with said writ of
execution and from selling certain properties of said petitioner herein.

On March 20, 1950, herein petitioner, hereinafter referred to as the
surety, executed two (2) performance bonds, in favor of the Republic of
the Philippines—one for P103,343.00, and another for P15,927.00—to
guarantee the faithful discharge, by the International Construction and
Engineering Company, Inc., hereinafter referred to as the contractor,
of its obligations under two (2) contracts, one for the construction of
the Bugallon Bridge, province of Pangasinan, and another for the
construction of the Concepcion Bridge, province of Tarlac, pursuant to
the provisions of Act No. 3688. On or about December 4,1 950, S. Jacala
and thirty-four (34) other persons, hereafter referred to as laborers,
who claim to have worked in said construction, as laborers and/or
employees of the contractor, and to have been illegally dismissed by
the latter, instituted Case No. 529-V of the Court of Industrial
Relations against said contractor, the surety, and Manuel Padilla and
Leon Patlach, president and vice-president, as well as general manager,
respectively of the contractor, for alleged unpaid wages and one (1)
month separation pay. On February 16, 1954, said Court of Industrial
Relations rendered a decision the dispositive part of which reads, as
follows:

“In view of the foregoing considerations,
respondents International Construction & Engineering Co., Inc. and
Philippine Surety and Insurance Co., Inc. should be, as they are
hereby, directed to pay jointly and severally all the employees and in
the amount appearing an the payrolls (Exhibit ‘C and ‘D’) submitted by
the Director of Public Works, minus whatever amounts in ‘value’ or
advances and/or value of material or materials taken by any of them;
that respondent International Construction & Engineering Co., Inc.
is hereby further directed to pay one month separation pay to each of
the petitioners; and that, insofar as Manuel L. Padilla and Leon
Patlach are concerned, the petition herein is hereby DISMISSED.”

No appeal having been taken from this decision, the same became
final and executory. On motion of the laborers, the Court of Industrial
Relations issued on August 26, 1957, an alias writ of execution of said
decision and, in pursuance of said alias writ, respondent Sheriff of
Manila caused the office equipment and other properties of the surety
to be distrained and levied upon and threatened to sell said
properties, at public auction, on September 4, 1957, “for the recovery
of the sum of P33,000.00, etc., with interest costs”, which is
seemingly the balance still due under the decision aforementioned. To
suspend this auction sale and annul said decision, the surety
instituted the present special civil action, against the laborers, the
clerk of court of the Court of First Instance of Manila, as ex officio
Sheriff of the City of Manila, and the Court of Industrial Relations,
for the purposes stated above, upon the theory that the aforementioned
decision of the Court of Industrial Relations and the alias writ of
execution thereof are null and void because:

1. The Court of Industrial Relations had no jurisdiction to
   take cognizance of and decide said case No. 529-V, for, pursuant to Act
   No. 3688, actions upon performance bonds, such as those executed by the
   surety, shall be brought, (a) either by the Government or by
   the persons who furnished labor or construction materials, but in the
   name of the Government of the Philippine Islands, (b) after the
   complete performance of the respective construction contracts and final
   settlement thereof, (c) in the court of first instance of the
   district in which said construction contracts are to be performed and
   executed, in the case at bar, in Pangasinan and Tarlac, and the
   Bugallon Bridge, as well as the Concepcion Bridge were still incomplete
   when the aforementioned Case No. 529-V was instituted;

2. The Supreme Court held in Cristitu Bautista vs.
   Auditor General, 97 Phil., 244; 53 Off. Gaz. [13] 4098, that the
   Government had to spend P530,806.41, in excess of the price stipulated
   with the contractor, in order to complete the construction of the
   Bugallon Bridge, which had been abandoned by said contractor, and,
   pursuant to Act No. 3688, the claim of the Government for said sum of
   P530.806.41, which far exceeds the P103,343 performance bond of the
   surety, enjoys priority over other claims, and that, there being no
   amount due the contractor from the Government upon which the money
   claim of the petitioners in said case could be drawn, it followed that
   the denial by the Auditor General of the claim filed by said
   petitioners therein is in accordance with law, so that the laborers in
   the case at bar “did not have * * * any right of action to proceed and
   sue against the bonds for their unpaid wages and salaries,” which “is
   an exclusive liability of the contractor”, according to said decision.

In compliance with an order of this Court, the surety included the
Government of the Philippines, represented by the Director of Public
Works, as one of the defendants in the case at bar. This defendant
filed an answer alleging, inter alia, that the contractor
failed to construct the Bugallon Bridge thereby becoming liable to the
Government of the Philippines in the sum of P530,806.41; that said
contractor, likewise, failed to construct the Concepcion Bridge, and,
in consequence thereof, was sentenced, in Civil Case No. 14952 of the
Court of First Instance of Manila, to pay P15,927.00 to the Government;
and that, under the law, the claim of the Government for these two (2)
amounts, enjoys priority over all other claims.

The petition herein is clearly untenable, for the following reasons:

1. A writ of certiorari may be applied for only when there is
   “no appeal nor any plain, speedy and adequate remedy in the ordinary
   course of law.” As one of the defendants in said Case No. 529-V of the
   Court of Industrial Relations, the surety could have appealed from its
   decision therein, and such appeal would have afforded the surety a
   “plain, speedy and adequate remedy in the ordinary course of law.” Yet,
   the surety did not appeal from said decision. It did not merely fail to
   take any step to have it reviewed from March 2, 1954, when it was
   rendered, to August 26, 1957, when the aforementioned alias writ of
   execution was issued, or for over three (3) years and. five (5) months.
   It even satisfied part of its obligations under said decision, by
   making several payments, aggregating approximately P9,000.00. The writ
   of certiorari may not be availed of in these circumstances (Claudio vs. Zandueta, 64 Phil., 812; Haw Pia vs. San Jose, 77 Phil., 238; Dans vs. Court of Appeals, 93 Phil., 564; 49 Off. Gaz. 2753; Santos vs. Court of Appeals, 95 Phil., 360; David vs.
   Miranda, L-6215 [promulgated September 28, 1954]), specially
   considering that the surety had not made use of its right to appeal
   through its own negligence (Government of U. S. vs. Judge of First Instance of Pampanga, 50 Phil., 975; Profeta, et al., vs. Gutierrez,
   et al., 71 Phil., 582), if not intentionally. Indeed, there is reason
   to believe that the decisions of this Court in Cristitu Bautista vs. Auditor General, supra,
   (promulgated on June 29, 1955) is what impelled the surety to question
   the legality of the decision of the Court of Industrial Relations in
   said Case No. 529-V after having begun to satisfy the same, as pointed
   out above.

2. The provisions of Act No.
   3688, relative to the place where actions on performance bonds should
   be brought regulate venue, which is a procedural, not a jurisdictional
   matter. Although the surety claims to have raised the question of venue
   in the Court of Industrial Relations, its failure to appeal from the
   decision thereof implies an abandonment of its right to press said
   question, which may be waived (Manila Railroad Co. vs. Attorney General, 20 Phil., 523; Samson vs. Carvatala, 50 Phil., 647; Katigbak vs. Tai Hing Co., 52 Phil., 622; De la Rosa vs. De Borja, 53 Phil., 990; Abuton vs. Paler, 54 Phil., 519; Marquez Lim Cay vs. Del Rosario, 55 Phil., 692; Central Azucarera de Tarlac vs. De Leon, 56 Phil., 169; Navarro vs. Aguila, 66 Phil., 604).

   Needless to say, in case of inconsistency, the provisions of said Act
   No. 3688 must be deemed repealed by those of Commonwealth Act No. 103,
   insofar as the settlement of “all questions, matters, controversies or
   disputes arising between and or affecting employers and employees or
   laborers * * *.” (Sec. 1, C. A. No. 103). It may not be amiss to note,
   also, that Case No. 529-V was instituted in March 1950, or long before
   the approval of the Industrial Peace Act, on June 17, 1953, pursuant to
   which all cases then pending before the Court of Industrial
   Relations—such as said Case No. 529-V—”shall be processed by the Court
   according to Commonwealth Act Numbered One hundred three, as amended *
   * *.” (R. A. No. 875 Sec. 27).

3. The provisions of Act No. 3688, to the effect that actions upon said
   bonds must be brought, either by the Government or by those who
   supplied labor or materials, suing in the name of the Government,
   merely affect the cause of action, not the jurisdiction to hear the
   case and render therein a valid decision. A decision rendered in favor
   of laborers who failed to comply with such provisions would, at best,
   be erroneous, therefore, but, once final, it would conclusively
   establish their right to the remedy granted in said decision. In the
   language of former Chief Justice Moran:

” * * * ‘jurisdiction’ should be distinguished from
‘exercise of jurisdiction’. Jurisdiction is the authority to hear and
determine a cause—the right to act in a case. Since it is the power to
hear and determine, its existence does not depend either upon the
regularity of the exercise of that power or upon the rightfulness of
the decision made. The authority to decide a cause, if at all, and not
the decision rendered therein, is what makes up jurisdiction. Where
there is jurisdiction over the person and the subject-matter, the
decision on all other questions arising in the case, is but an exercise
of that jurisdiction.

“The errors which the court may commit
in the exercise of such jurisdiction are merely errors of judgment.
Here, it becomes necessary to distinguish errors of jurisdiction from
errors of judgment. The first may be reviewed in a certiorari
proceeding; the second, by appeal. Errors of jurisdiction render an
order or judgment void or voidable. But errors of judgment or of
procedure are not necessarily a ground for reversal. They shall have
such effect only if it be shown that prejudice has been caused by them.
* * *.” (Moran’s Comments on the Rules of Court, Vol. 2, 1957 ed., pp.
156-157.)

4. The question of the amount or extent of the
   liability of the surety in favor of the laborers, under the performance
   bonds given by the former, affects the wisdom or legal soundness of the
   decision in said Case No. 529-V, not the jurisdiction of the Court of
   Industrial Relations to render said decision or its validity, and,
   consequently, is beyond the province of this special civil action for
   certiorari.

5. Similarly, the alleged right
   of the Government to collect from the surety, in preference to the
   claim of the laborers for unpaid wages and separation pay, does not
   impair or affect the validity of the said decision in favor of the
   laborers and against the surety, or give the latter a cause of action
   to question, upon such ground, the legality of the alias writ for the execution of the decision aforementioned.

6. The case of Cristitu Bautista, et al. vs. Auditor General (supra),
   is not controlling in the case at bar. To begin with, it does not
   appear that the laborers involved in the latter case and in said Case
   No. 529-V were parties in the Bautista case. Neither was the surety a
   party therein. Secondly, the issue in the Bautista case is different
   from the one raised in the present case and in Case No. 529-V. The
   Bautista case involved a claim against the Government. The issue
   therein was whether the latter (not the surety, which was not a party
   therein) was liable for the unpaid wages of a number of persons who
   furnished labor in the construction of the Bugallon Bridge. The right
   of these persons to sue and demand payment from the surety was not in
   issue in said case. In short, neither the parties, nor the cause of
   action in the two (2) sets of cases, are identical (San Diego vs. Cardona, 70 Phil., 281; Ocampo vs. Jenkins, 14 Phil., 681; Donato vs. Mendoza, 25 Phil., 57; Isaac vs. Padilla, 31 Phil., 469; Roman Catholic Archbishop vs. Director of Lands, 35 Phil., 339; Aquino vs. Director of Lands, 39 Phil., 850; De Santos vs. Bank of P. I., 58 Phil., 784; De Leon Vda. de Lontok vs. Padua, 75 Phil, 548; Sandejas vs. Robles, 81 Phil., 421).

Before this case was submitted for decision on the merits, but after
the filing of its answer to the petition of the surety, respondent
Court of Industrial Relations filed a “motion to dismiss appeal”, upon
the theory that this is a petition for review by certiorari, under Rule
58, section 4, of the Rules of Court and that the surety had failed to
take the steps therein required within the reglementary period. By
resolution of this Court, we deferred action upon said motion “until
the date when this case is considered upon the merits.” Said “motion to
dismiss appeal” is hereby denied, it being apparent from the
allegations of the petition herein; and the amendments thereof, that
the surety is seeking relief under Rule 67 of said Rules of Court, and
that the movant and the other respondents herein have so understood
said petition.

Wherefore, the petition of the Philippine Surety and Insurance
Company, Inc. is dismissed, and the writ of preliminary injunction
heretofore issued hereby dissolved, with costs against said petitioner.
It is so ordered.

Paras, C. J., Bengzon, Padilla, Montemayor, Bautista Angelo, and Labrador, JJ., concur.
Gutierrez David, J., concurs in the result.
Reyes, J.B.L., J., took no part.