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FIRSTDIVISION

MELENCIOGABRIEL,G.R.No.146989
representedbysurvivingspouse,
FLORDELIZAV.GABRIEL,
Petitioner,Present:

PUNO,C.J.,Chairperson,
versusSANDOVALGUTIERREZ,
CORONA,
AZCUNA,and
GARCIA,JJ.
NELSONBILON,ANGELBRAZIL
ANDERNESTOPAGAYGAY,
Respondents.Promulgated:
February7,2007

xx

DECISION

AZCUNA,J.:

[1]
This is a petition for review on certiorari assailing the Decision and Resolution of the Court of
Appeals, respectively dated August 4, 2000 and February 7, 2001, in CAG.R. SP No. 52001 entitled
NelsonBilon,etal.v.NationalLaborRelationsCommission,etal.

[2]
The challenged decision reversed and set aside the decision of the National Labor Relations
Commission (NLRC) dismissing respondents complaint for illegal dismissal and illegal deductions, and
reinstatingthedecisionoftheLaborArbiterfindingpetitionerguiltyofillegaldismissalbutnotofillegal
deductionssubjecttothemodificationthatrespondentsbeimmediatelyreinstatedtotheirformerpositions
withoutlossofseniorityrightsandprivilegesinsteadofbeingpaidseparationpay.

Petitioner, represented by his surviving spouse, Flordeliza V. Gabriel, was the owneroperator of a
publictransportbusiness,GabrielJeepney,withafleetof54jeepneysplyingtheBaclaranDivisoriaTondo
route.Petitionerhadapoolofdrivers,whichincludedrespondents,operatingunderaboundarysystemof
P400perday.

[3]
Thefacts areasfollows:

OnNovember15,1995,respondentsfiledtheirseparatecomplaintsforillegaldismissal,illegaldeductions,
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OnNovember15,1995,respondentsfiledtheirseparatecomplaintsforillegaldismissal,illegaldeductions,
andseparationpayagainstpetitionerwiththeNationalLaborRelationsCommission(NLRC).Thesewere
[4]
consolidatedanddocketedasNLRCNCRCaseNo.00110742095.

OnDecember15,1995,thecomplaintwasamended,impleadingaspartyrespondenttheBacoorTransport
ServiceCooperative,Inc.,asbothpartiesaremembersofthecooperative.

Respondentsallegedthefollowing:
1)ThattheywereregulardriversofGabrielJeepney,drivingtheirrespectiveunitsbearingPlateNos.
PHW553,NXU155,andNWW557,underaboundarysystemofP400perday,plyingBaclarantoDivisoria
via Tondo, and vice versa, since December 1990, November 1984 and November 1991, respectively, up to
[5]
April30,1995, drivingfive
daysaweek,withaveragedailyearningsofP400

2)Thattheywererequired/forcedtopayadditionalP55.00perdayforthefollowing:a)P20.00police
protectionb)P20.00washingc)P10.00depositand[d)]P5.00garagefees

3)Thatthereisnolawprovidingtheoperatortorequirethedriverstopaypoliceprotection,deposit,
washing,andgaragefees.

4)ThatonApril30,1995,petitionertoldthemnottodriveanymore,andwhentheywenttothegarage
toreportforworkthenextday,theywerenotgivenaunittodriveand

5) That the boundary drivers of passenger jeepneys are considered regular employees of the
jeepney operators. Being such, they are entitled to security of tenure. Petitioner, however, dismissed them
withoutfactualandlegalbasis,andwithoutdueprocess.

Onhispart,petitionercontendedthat:

1)He does not remember if the respondents were ever under his employ as drivers of his passenger
jeepneys.Certain,however,isthefactthatneithertherespondentsnorotherdriverswhoworkedforhimwere
everdismissedbyhim.Asamatteroffact,someofhisformerdriversjuststoppedreportingforwork,either
because they found some other employment or drove for other operators, and like the respondents, the next
timeheheardfromthemwaswhentheystartedfabricatingunfoundedcomplaintsagainsthim

2) He made sure that none of the jeepneys would stay idle even for a day so he could collect his
earningshence,ithadbeenhispracticetoestablishapoolofdrivers.Hadrespondentsmanifestedtheirdesire
todrivehisunits,itwouldhavebeenimmaterialwhethertheywerehisformerdriversornot.Aslongasthey
obtainedthenecessarylicensesandreferences,theywouldhavebeenaccommodatedandplacedonschedule

3)Whilehewaspenalizedormadetopayacertainamountinconnectionwithsimilarcomplaintsby
other drivers in a previous case before this, it was not because his culpability was established, but due to
technicalities involving oversight and negligence on his part by not participating in any stage of the
investigationthereofand

4)Respondentsclaimthatcertainamounts,asenumeratedinthecomplaint,weredeductedfrom
their days earnings is preposterous. Indeed, there were times when deductions were made from the days
earnings of some drivers, but such were installment payments for the amount previously advanced to them.
Mostdrivers,whentheygotinvolvedinaccidentsorviolationsoftrafficregulations,managedtosettlethem,
andintheprocesstheyhadtospendsomemoney,butmostofthetimetheydidnothavetheneededamountso
theysecuredcashadvances
fromhim,withtheunderstandingthatthesameshouldbepaidbackbyinstallmentsthroughdeductionsfrom
theirdailyearningsorboundary.

Ontheotherhand,BacoorTransportServiceCooperative,Inc.(BTSCI)declaredthatitshouldnotbe
madeapartytothecasebecause:1)[I]thasnothingtodowiththeemploymentofitsmemberdrivers.The
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madeapartytothecasebecause:1)[I]thasnothingtodowiththeemploymentofitsmemberdrivers.The
matterisbetweenthememberoperatorandtheirrespectivememberdrivers.Thememberdriverstenureof
employment,compensation,workconditions,andotheraspectsofemploymentaremattersofarrangement
between them and the memberoperators concerned, and the BTSCI has nothing to do with it, as can be
inferredfromtheManagementAgreementbetweenBTSCIandthememberoperatorsand2)[T]heamount
allegedly deducted from respondents and the purpose for which they were applied were matters that the
cooperativewasnotawareof,andmuchlessimposedonthem.

OnSeptember17,1996,respondentsfiledamotiontorerafflethecaseforthereasonthattheLaborArbiter
(Hon.RobertoI.Santos)failedtorenderhisdecisionwithinthirty(30)calendardays,withoutextension,
afterthesubmissionofthecasefordecision.

OnSeptember18,1996,saidLaborArbiterinhibitedhimselffromfurtherhandlingthecaseduetopersonal
reasons.

OnNovember8,1996,LaborArbiterRicardoC.Nora,towhomthecasewasreraffled,orderedthe
partiestofiletheirrespectivememorandawithintendays,afterwhichthecasewasdeemedsubmittedfor
resolution.
On March 17, 1997, the Labor Arbiter (Hon. Ricardo C. Nora) handed down his decision, the
dispositiveportionofwhichiswordedasfollows:

WHEREFORE, premises considered, judgment is hereby rendered declaring the illegality of [respondents]
dismissal and ordering [petitioner] Melencio Gabriel to pay the [respondents] the total amount of ONE
MILLION THIRTY FOUR THOUSAND PESOS [P1,034,000,] representing [respondents] backwages and
separationpayasfollows:

1.NelsonBilon

BackwagesP284,800
SeparationPay26,400P321,200

2.AngelBrazil

BackwagesP294,800
SeparationPay96,800391,600

3.ErnestoPagaygay

BackwagesP294,800
SeparationPay26,400321,200
P1,034,000

[Petitioner]MelencioGabrielislikewiseorderedtopayattorneysfeesequivalenttofivepercent(5%)ofthe
judgmentawardortheamountofP51,700withinten(10)daysfromreceiptofthisDecision.

Allotherissuesaredismissedforlackofmerit.
[6]
SOORDERED.

Incidentally,onApril4,1997,petitionerpassedaway.OnApril18,1997,acopyoftheabovedecisionwas
deliveredpersonallytopetitionershouse.Accordingtorespondents,petitionerssurvivingspouse,Flordeliza
Gabriel, and their daughter, after reading the contents of the decision and after they had spoken to their
counsel,refusedtoreceivethesame.Nevertheless,BailiffAlfredoV.Estonactocleftacopyofthedecision
with petitioners wife and her daughter but they both refused to sign and acknowledge receipt of the

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with petitioners wife and her daughter but they both refused to sign and acknowledge receipt of the
[7]
decision.
The labor arbiters decision was subsequently served by registered mail at petitioners residence and
thesamewasreceivedonMay28,1997.
OnMay16,1997,counselforpetitionerfiledanentryofappearancewithmotiontodismissthecaseforthe
reasonthatpetitionerpassedawaylastApril4,1997.
On June 5, 1997, petitioner appealed the labor arbiters decision to the National Labor Relations
Commission,FirstDivision,contendingthatthelaborarbitererred:

1.Inholdingthat[petitioner]Gabrieldismissedthecomplainants,Arb.Noracommittedaseriouserrorinthe
findings of fact which, if not corrected, would cause grave or irreparable damage or injury to
[petitioner]Gabriel

2.Inholdingthatstrainedrelationsalreadyexistbetweentheparties,justifyinganawardofseparationpayin
lieuofreinstatement,Arb.Noranotonlycommittedaseriouserrorinthefindingsoffact,buthealso
abusedhisdiscretion

3.Incomputingtheamountofbackwagesallegedlydue[respondents]from30April1995to15March1997,
Arb.Noraabusedhisdiscretion,consideringthatthecasehadbeensubmittedfordecisionasearlyas1
March1996andthatthesameshouldhavebeendecidedasearlyas31March1996

4.InusingP400.00and22daysasfactorsincomputingtheamountofbackwagesallegedlydue[respondents],
Arb.Noraabusedhisdiscretionandcommittedaseriouserrorinthefindingsoffact,consideringthat
therewasnofactualorevidentiarybasistherefor

5.Inusing33.5monthsasfactorinthecomputationoftheamountofbackwagesallegedlydue[respondents],
Arb. Nora committed a serious error in the findings of fact[,] because even if it is assumed that
backwagesareduefrom30April1995to15March1997,theperiodbetweenthetwodatesisonly22
months,andnot33monthsasstatedintheappealeddecisionand

6.Innotdismissingthecase[,]despitenoticeofthedeathof[petitioner]Gabrielbeforefinaljudgment,
[8]
Arb.Noraabusedhisdiscretionandcommittedaseriouserroroflaw.

OnJuly3,1997,respondentsfiledamotiontodismisspetitionersappealonthegroundthatthesuretybond
isdefectiveandtheappealwasfiledoutoftime,whichmovewasopposedbypetitioner.
Subsequently,onApril28,1998,theNLRCpromulgateditsfirstdecision,thedispositiveportionofwhich
reads:

WHEREFORE, premises considered, the appealed decision is hereby reversed and set aside. The above
entitledcaseisherebydismissedforlackofemployeremployeerelationship.

[9]
SOORDERED.

Respondentsfiledamotionforreconsideration.Theyclaimedthatthedecisiondidnotdiscusstheissueof
thetimelinessoftheappeal.Thelackofemployeremployeerelationshipwasmentionedinthedispositive
portion, which issue was not raised before the labor arbiter or discussed in the body of the questioned
decision.Inviewoftheissuesraisedbyrespondentsintheirmotion,theNLRCrendereditsseconddecision
onOctober29,1998.Thepertinentportionsareherebyquotedthus:

In the case at bar, [petitioner] Melencio Gabriel was not represented by counsel during the pendency of the
case.AdecisionwasrenderedbytheLaborArbiteraquoonMarch17,1997whileMr.Gabrielpassedaway
onApril4,1997withouthavingreceivedacopythereofduringhislifetime.Thedecisionwasonlyservedon

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onApril4,1997withouthavingreceivedacopythereofduringhislifetime.Thedecisionwasonlyservedon
April18,1997whenhewasnolongeraroundtoreceivethesame.Hissurvivingspouseanddaughtercannot
automaticallysubstitutethemselvesaspartyrespondents.Thus,whenthebailifftenderedacopyofthedecision
tothem,theywerenotinapositiontoreceivethem.Therequirementofleavingacopyatthepartysresidence
isnotapplicableintheinstantcasebecausethispresupposesthatthepartyisstilllivingandisjustnotavailable
toreceivethedecision.

Theprecedingconsidered,thedecisionofthelaborarbiterhasnotbecomefinalbecausetherewasnoproper
serviceofcopythereofto[petitioner].

Undoubtedly,thiscaseisforrecoveryofmoneywhichdoesnotsurvive,andconsideringthatthedecisionhas
notbecomefinal,thecaseshouldhavebeendismissedandtheappealnolongerentertained.

WHEREFORE,inviewoftheforegoing,theDecisionofApril28,1998issetasideandvacated.Furthermore,
theinstantcaseisdismissedandcomplainantsaredirectedtopursuetheirclaimagainsttheproceedingsforthe
settlementoftheestateofthedeceasedMelencioGabriel.

[10]
SOORDERED.

AggrievedbythedecisionoftheNLRC,respondentselevatedthecasetotheCourtofAppeals(CA)byway
ofapetitionforcertiorari.OnAugust4,2000,theCAreversedthedecisionsoftheNLRC:

Article223oftheLaborCodecategoricallymandatesthatanappealbytheemployermaybeperfected
only upon the posting of a cash bond or surety bond x x x. It is beyond peradventure then that the non
compliance with the above conditio sine qua non, plus the fact that the appeal was filed beyond the
reglementaryperiod,shouldhavebeenenoughreasonstodismisstheappeal.

Inanyevent,evenconcedingexgratiathatsuchproceduralinfirmity[were]inexistent,thispetitionwouldstill
betenablebasedonsubstantiveaspects.

Thepublicrespondentsdecision,datedApril28,1998,isegregiouslywronginsofarasitwasanchoredonthe
absence of an employeremployee relationship. Wellsettled is the rule that the boundary system used in
jeepney and (taxi) operations presupposes an employeremployee relationship (National Labor Union v.
Dinglasan,98Phil.649).

TheNLRCostensiblytriedtoredeemitselfbyvacatingthedecisionApril28,1998.Bysodoing,however,it
didnotactuallyresolvethematterdefinitively.Itmerelyrelieveditselfofsuchburdenbysuggestingthatthe
petitionerspursuetheirclaimagainsttheproceedingsforthesettlementoftheestateofthedeceasedMelencio
Gabriel.

Intheinstantcase,thedecision(datedMarch17,1997)oftheLaborArbiterbecamefinalandexecutory on
accountofthefailureoftheprivaterespondenttoperfecthisappealontime.

Thus,wedisagreewiththeratiocinationoftheNLRCthatthedeathoftheprivaterespondentonApril4,1997
ipsofactonegatesrecoveryofthemoneyclaimagainstthesuccessorsininterest.Rather,thissituationcomes
withintheaegisofSection3,RuleIIIoftheNLRCManualonExecutionofJudgment,whichprovides:

SECTION3.ExecutioninCaseofDeathofParty.Whereapartydiesafterthefinality
ofthedecision/entryofjudgmentoforder,executionthereonmayissueoronealreadyissued
maybeenforcedinthefollowingcases:

a)xxx
b) In case of death of the losing party, against his successorininterest, executor or
administrator
c) Incaseofdeathofthelosingpartyafterexecutionisactuallylevieduponanyofhis
property, the same may be sold for the satisfaction thereof, and the sheriff making the
saleshallaccounttohissuccessorininterest,executororadministratorforanysurplus
inhishands.

Notwithstandingtheforegoingdisquisitionthough,Wearenotentirelyinaccordwiththelaborarbiters
decision awarding separation pay in favor of the petitioners. In this regard, it [is] worth mentioning that in
[11]
[12]
Kiamco v. NLRC,
citing GlobeMackay Cable and Radio Corp. v. NLRC,
the Supreme Court
qualifiedtheapplicationofthestrainedrelationsprinciplewhenitheld

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IfinthewisdomoftheCourt,theremaybeagroundorgroundsforthenonapplication
oftheabovecitedprovision(Art.279,LaborCode)thisshouldbebywayofexception,suchas
when the reinstatement may be inadmissible due to ensuing strained relations between the
employerandemployee.

In such cases, it should be proved that the employee concerned occupies a position
whereheenjoysthetrustandconfidenceofhisemployer,andthatitislikelythatifreinstated,
an atmosphere of antipathy and antagonism may be generated as to adversely affect the
efficiencyandproductivityoftheemployeeconcernedxxxObviously,theprincipleofstrained
relations cannot be applied indiscriminately. Otherwise, reinstatement can never be possible
simply because some hostility is invariably engendered between the parties as a result of
litigation.Thatishumannature.

Besides,nostrainedrelationsshouldarisefromavalidlegalactofassertingonesright
otherwise[,]anemployeewhoshallasserthisrightcouldbeeasilyseparatedfromtheserviceby
merely paying his separation pay on the pretext that his relationship with his employer had
alreadybecomestrained.

Anenttheawardofbackwages, the Labor Arbiter erred in computing the same from the date the petitioners
wereillegallydismissed(i.e.April30,1995)uptoMarch15,1997,thatistwo(2)dayspriortotherenditionof
hisdecision(i.e.March17,1997).

WHEREFORE,premisesconsidered,thepetitionisGRANTED,herebyREVERSINGandSETTINGASIDE
theassaileddecisionsoftheNationalLaborRelationsCommission,datedApril28,1998ansOctober29,1998.
Consequently,thedecisionoftheLaborArbiter,datedMarch17,1997,isherebyREINSTATED,subjecttothe
MODIFICATION that the private respondent is ORDERED to immediately REINSTATE petitioners Nelson
Bilon, Angel Brazil and Ernesto Pagaygay to their former position without loss of seniority rights and
privileges,withfullbackwagesfromthedateoftheirdismissaluntiltheiractualreinstatement.Costsagainst
privaterespondent.

[13]
SOORDERED.

Petitioner filed a motion for reconsideration but the same was denied by the CA in a resolution dated
February7,2001.

[14]
Hence,thispetitionraisingthefollowingissues:

I
THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONERS APPEAL TO THE NATIONAL
LABORRELATIONSCOMMISSIONWASFILEDOUTOFTIME.

II
THECOURTOFAPPEALSERREDINHOLDINGTHATTHEALLEGEDDEFECTSINPETITIONERS
APPEAL BOND WERE OF SUCH GRAVITY AS TO PREVENT THE APPEAL FROM BEING
PERFECTED.

III
THE COURT OF APPEALS ERRED IN GRANTING RESPONDENTS PETITION FOR CERTIORARI
DESPITE THE FACT THAT THE SAMEASSAILED A DECISION WHICH HAD BEEN VACATED IN
FAVOROFANEWONEWHICH,INTURN,HASSOLIDLEGALBASIS.

IV
THE COURT OF APPEALS ERRED IN APPLYING SECTION 3, RULE III, OF THE MANUAL ON
EXECUTION OF JUDGMENT OF THE NATIONAL LABOR RELATIONS COMMISSION WHICH, BY
ITSOWNEXPRESSTERMS,ISNOTAPPLICABLE.

Aresolutionofthecaserequiresabriefdiscussionoftwoissueswhichtouchupontheproceduraland
substantialaspectsofthecasethus:a)whetherpetitionersappealwasfiledoutoftimeandb)whetherthe
claimsurvives.
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Asregardsthefirstissue,theCourtconsiderstheserviceofcopyofthedecisionofthelaborarbiterto
havebeenvalidlymadeonMay28,1997whenitwasreceivedthroughregisteredmail.Ascorrectlypointed
outbypetitionerswife,serviceofacopyofthedecisioncouldnothavebeenvalidlyeffectedonApril 18,
1997becausepetitionerpassedawayonApril4,1997.

Section4,RuleIIIoftheNewRulesofProcedureoftheNLRCprovides:

SEC.4.ServiceofNoticesandResolutions.(a)Noticesorsummonsandcopiesoforders,resolutions
or decisions shall be served on the parties to the case personally by the bailiff or authorized public officer
withinthree(3)daysfromreceiptthereoforbyregisteredmailProvided,Thatwhereapartyisrepresentedby
counsel or authorized representative, service shall be made on such counsel or authorized representative
Providedfurther,Thatincasesofdecisionandfinalawards,copiesthereofshallbeservedonbothpartiesand
theircounsel.

For the purpose of computing the period of appeal, the same shall be counted from receipt of such
decisions,awardsorordersbythecounselofrecord.

(b) The bailiff or officer personally serving the notice, order, resolution or decision shall submit his
returnwithintwo(2)daysfromdateofservicethereof,statinglegiblyinhisreturn,hisname,thenamesofthe
personsservedandthedateofreceiptwhichreturnshallbeimmediatelyattachedandshallformpartofthe
recordsofthecase.Ifnoservicewaseffected,theservingofficershallstatethereasonthereforeinthereturn.

Section6,Rule13oftheRulesofCourtwhichissuppletorytotheNLRCRulesofProcedurestatesthat:
[s]ervice of the papers may be made by delivering personally a copy to the party or his counsel, or by
leavingitinhisofficewithhisclerkorwithapersonhavingchargethereof.Ifnopersonisfoundinhis
office,orhisofficeisnotknown,orhehasnooffice,thenbyleavingthecopy,betweenthehoursofeightin
themorningandsixintheevening,atthepartysorcounselsresidence,ifknown,withapersonofsufficient
ageanddiscretionthenresidingtherein.
Theforegoingprovisionscontemplateasituationwhereinthepartytotheactionisaliveuponthedelivery
ofacopyofthetribunalsdecision.Inthepresentcase,however,petitionerdiedbeforeacopyofthelabor
arbiters decision was served upon him. Hence, the above provisions do not apply. As aptly stated by the
NLRC:

In the case at bar, respondent Melencio Gabriel was not represented by counsel during the pendency of the
case.AdecisionwasrenderedbytheLaborArbiteraquoonMarch17,1997whileMr.Gabrielpassedaway
onApril4,1997,withouthavingreceivedacopythereofduringhislifetime.Thedecisionwasonlyservedon
April18,1997whenhewasnolongeraroundtoreceivethesame.Hissurvivingspouseanddaughtercannot
automaticallysubstitutethemselvesaspartyrespondents.Thus,whenthebailifftenderedacopyofthedecision
tothem,theywerenotinapositiontoreceivethem.Therequirementofleavingacopyatthepartysresidence
isnotapplicableintheinstantcasebecausethispresupposesthatthepartyisstilllivingandisnotjustavailable
toreceivethedecision.

Theprecedingconsidered,thedecisionoftheLaborArbiterhasnotbecomefinalbecausetherewasno
[15]
properserviceofcopythereoftopartyrespondent.

Thus, the appeal filed on behalf of petitioner on June 5, 1997 after receipt of a copy of the decision via
registeredmailonMay28,1997waswithinthetendayreglementaryperiodprescribedunderSection223
oftheLaborCode.

Onthequestionwhetherpetitionerssuretybondwasdefective,Section6,RuleVIoftheNewRules
ofProcedureoftheNLRCprovides:
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SEC. 6. Bond. In case the decision of a Labor Arbiter involves monetary award, an appeal by the
employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bonding
companydulyaccreditedbytheCommissionortheSupremeCourtinanamountequivalenttothemonetary
award,exclusiveofmoralandexemplarydamagesandattorneysfees.

The employer as well as counsel shall submit a joint declaration under oath attesting that the surety
bondpostedisgenuineandthatitshallbeineffectuntilfinaldispositionofthecase.

TheCommissionmay,inmeritoriouscasesanduponMotionoftheAppellant,reducetheamountofthe
bond.(AsamendedonNov.5,1993).

TheCourtbelievesthatpetitionerwasabletocomplysubstantiallywiththerequirementsoftheaboveRule.
AscorrectlypointedoutbytheNLRC:

While we agree with complainantsappellees that the posting of the surety bond is jurisdictional, Wedonot
believethatthedefectsimputedtothesuretybondpostedforandinbehalfofrespondentappellantGabrielare
ofsuchcharacterastoaffectthejurisdictionofthisCommissiontoentertaintheinstantappeal.

Itmattersnotthat,bythetermsofthebondposted,theLiabilityofthesuretyhereinshallexpireonJune5,
1998 and this bond shall be automatically cancelled ten (10) days after the expiration. After all, the bond is
accompanied by the joint declaration under oath of respondentappellants surviving spouse and counsel
attestingthatthesuretybondisgenuineandshallbeineffectuntilthefinaldispositionofthecase.

Anent complainantsappellees contention that the surety bond posted is defective for being in the name of
BTSCIwhichdidnotappealandforhavingbeenenteredintobyMrs.GabrielwithoutBTSCIsauthority,the
samehasbeenrenderedmootandacademicbythecertificationissuedbyGilCJ.SanJuan,VicePresidentof
thebondingcompanytotheeffectthatEasternAssuranceandSuretyCorporationBondNo.2749wasposted
forandonbehalfappellantMelencioGabrieland/orhisheirsandthat(T)henameBacoorTransportService
Cooperative,Inc.wasindicatedinsaidbondduemerelyin(sic)advertence.

Atanyrate,theSupremeCourthastimeandagainruledthatwhileArticle223oftheLaborCode,asamended
requiringacashorsuretybondintheamountequivalenttothemonetaryawardinthejudgmentappealedfrom
for the appeal to be perfected, may be considered a jurisdictional requirement, nevertheless, adhering to the
principle that substantial justice is better served by allowing the appeal on the merits threshed out by this
Honorable Commission, the foregoing requirement of the law should be given a liberal interpretation
(PantrancoNorthExpress,Inc. v. Sison, 149 SCRA 238 C.W. Tan Mfg. v. NLRC, 170 SCRA 240 YBL v.
[16]
NLRC,190SCRA160Radav.NLRC,205SCRA69StarAngelHandicraftv.NLRC,236SCRA580).

Ontheotherhand,withregardtothesubstantiveaspectofthecase,theCourtagreeswiththeCAthatan
employeremployeerelationshipexistedbetweenpetitionerandrespondents.InMartinezv.NationalLabor
[17]
[18]
RelationsCommission,
citingNationalLaborUnionv.Dinglasan,
theCourtruledthat:

[T]herelationshipbetweenjeepneyowners/operatorsandjeepneydriversundertheboundarysystemis
thatofemployeremployeeandnotoflessorlesseebecauseintheleaseofchattelsthelessorlosescomplete
controloverthechattelleasedalthoughthelesseecannotberecklessintheusethereof,otherwisehewouldbe
responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the
formerexercisessupervisionandcontroloverthelatter.Thefactthatthedriversdonotreceivefixedwagesbut
get only that in excess of the socalled boundary [that] they pay to the owner/operator is not sufficient to
withdrawtherelationshipbetweenthemfromthatofemployerandemployee.Thus,privaterespondentswere
employeesbecausetheyhadbeenengagedtoperformactivitieswhichwereusuallynecessaryordesirablein
[19]
theusualbusinessortradeoftheemployer.

[20]
ThesameprinciplewasreiteratedinthecaseofPaguioTransportCorporationv.NLRC.
The Court also agrees with the labor arbiter and the CA that respondents were illegally dismissed by

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The Court also agrees with the labor arbiter and the CA that respondents were illegally dismissed by
[21]
petitioner. Respondents were not accorded due process.
Moreover, petitioner failed to show that the
causeforterminationfallsunderanyofthegroundsenumeratedinArticle282

[22]
[23]
(then Article 283)
of the Labor Code.
Consequently, respondents are entitled to reinstatement
withoutlossofseniorityrightsandotherprivilegesandtotheirfullbackwagescomputedfromthedateof
dismissaluptothetimeoftheiractualreinstatementinaccordancewithArticle279oftheLaborCode.

Reinstatement is obtainable in this case because it has not been shown that there is an ensuing strained
relationsbetweenpetitionerandrespondents.ThisispursuanttotheprinciplelaiddowninGlobeMackay
[24]
CableandRadioCorporationv.NLRC
asquotedearlierintheCAdecision.

With regard to respondents monetary claim, the same shall be governed by Section 20 (then Section 21),
Rule3oftheRulesofCourtwhichprovides:

SEC.20.Actiononcontractualmoneyclaims.Whentheactionisforrecoveryofmoneyarisingfromcontract,
expressorimplied,andthedefendantdiesbeforeentryoffinaljudgmentinthecourtinwhichtheactionwas
pendingatthetimeofsuchdeath,itshallnotbedismissedbutshallinsteadbeallowedtocontinueuntilentry
of final judgment. A favorable judgment obtained by the plaintiff therein shall be enforced in the manner
providedintheseRulesforprosecutingclaimsagainsttheestateofadeceasedperson.(21a)

Inrelationtothis,Section5,Rule86oftheRulesofCourtstates:

SEC.5.Claimswhichmustbefiledunderthenotice.Ifnotfiled,barredexceptions.All claims for money

againstthedecedentarisingfromcontract,expressorimplied,whetherthesamebedue,notdue,orcontingent,
...andjudgmentformoneyagainstthedecedent,mustbefiledwithinthetimelimitedinthenoticeotherwise
theyarebarredforever,exceptthattheymaybesetforthascounterclaimsinanyactionthattheexecutoror
administratormaybringagainsttheclaimants.

Thus,inaccordancewiththeaboveRules,themoneyclaimsofrespondentsmustbefiledagainsttheestate
[25]
ofpetitionerMelencioGabriel.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated
August4,2000andFebruary7,2001,respectively,inCAG.R.SPNo.52001areAFFIRMEDbutwiththe
MODIFICATION that the money claims of respondents should be filed against the estate of Melencio
Gabriel,withinsuchreasonabletimefromthefinalityofthisDecisionastheestatecourtmayfix.

Nocosts.

SOORDERED.

ADOLFOS.AZCUNA
AssociateJustice

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11/24/2016

G.R.No.146989

WECONCUR:

REYNATOS.PUNO
Chairperson
ChiefJustice

ANGELINASANDOVALGUTIERREZRENATOC.CORONA
AssociateJusticeAssociateJustice

CANCIOC.GARCIA
AssociateJustice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the
aboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionof
theCourtsDivision.

REYNATOS.PUNO
ChiefJustice

[1]
UnderRule45oftheRulesofCourt.
[2]
InNLRCNCRCaseNo.00110742095entitledNelsonBilon,etal.v.MelencioGabriel,etal.
[3]
Rollo,pp.3945,CADecision,pp.28.
[4]
CaseentitledNelsonB.Bilon,AngelBrazilandErnestoPagayagay.v.MelencioGabriel,Operator,andBacoorTransportServiceCooperative,
Inc.
[5]
NelsonB.BilonwashiredbypetitionerinDecember1990,AngelBrazilinNovember1984,andErnestoPagaygayinNovember1991.

[6]
Rollo,pp.8283.
[7]
Id.atpp.5354.
[8]
Records,pp.143144.
[9]
CARollo,pp.4445.
[10]
Id.at5758.
[11]
G.R.No.129449,June29,1999,309 SCRA 424.
[12]
G.R.No,82511,March3,1992,206SCRA701,711712.
[13]
Rollo,pp.4851.
[14]
Id.atpp.150151PetitionersMemorandum,pp.89.
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G.R.No.146989
[14]
Id.atpp.150151PetitionersMemorandum,pp.89.
[15]
CARollo,pp.5657.
[16]
CARollo,pp.4041.
[17]
G.R.No.117495,May29,1997,272SCRA793,799800.
[18]
98Phil648(1956).
[19]
Art.280ofTheLaborCodeofthePhilippinesZanotteShoesv.NLRC,G.R.No.100665,February13,1995,241SCRA261.
[20]
G.R.No.119500,August28,1998,294SCRA657.
[21]
Article277(b)oftheLaborCodeofthePhilippinesprovides:Subjecttotheconstitutionalrightofworkerstosecurityoftenureandtheirrightto
beprotectedagainstdismissalexceptforajustandauthorizedcauseandwithoutprejudicetotherequirementofnoticeunderArticle283of
thisCode,theemployershallfurnishtheworkerwhoseemploymentissoughttobeterminatedawrittennoticecontainingastatementofthe
causesforterminationandshallaffordthelatterampleopportunitytobeheardandtodefendhimselfwiththeassistanceofhisrepresentative
ifhesodesiresAnydecisiontakenbytheemployershallbewithoutprejudicetotherightoftheworkerstocontestthevalidityorlegalityof
hisdismissalbyfilingacomplaintwiththeregionalbranchoftheNationalLaborRelationsCommission.Theburdenofprovingthatthe
dismissalwasforavalidorauthorizedcauseshallrestontheemployer
[22]
ART.282.TERMINATIONBYEMPLOYERAnemployermayterminateanemploymentforanyofthefollowingcauses:
(a)Seriousmisconductorwillfuldisobediencebytheemployeeofthelawfulordersofhisemployerorrepresentativeinconnectionwith
hiswork
(b)Grossandhabitualneglectbytheemployeeofhisduties
(c)Fraudorwillfulbreachbytheemployeeofthetrustreposedinhimbyhisemployerordulyauthorizedrepresentative
(d)Commissionofacrimeoroffensebytheemployeeagainstthepersonofhisemployeroranyimmediatememberofhisfamilyorhisduly
authorizedrepresentativeand,
(e)Othercausesanalogoustotheforegoing.
[23]
Section1ofRuleXXIII(thenRuleXIV)oftheImplementingRegulationsoftheLaborCodeofthePhilippinesalsoprovidesthatnoworker
shallbedismissedexceptforajustorauthorizedcauseprovidedbylawandafterdueprocess.
[24]
Supranoteat12.
[25]
Robledov.NationalLaborRelationsCommission,G.R.No.110358,November9,1994,238SCRA52.

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