Almirante: Conditional satisfaction of judgement

Labor Case Digest

PETITIONER Marino B. Daang filed a complaint against respondents Skippers United Pacific Inc. and Commercial S.A. for total and permanent disability benefits and damages.

The Court of Appeals (CA) reversed the decision of the National Labor Relations Commission (NLRC) which affirmed the ruling of the Labor Arbiter (LA) ordering respondents to pay petitioner the amount of US$60,000 for total and permanent disability. Respondents filed a petition for certiorari with the Supreme Court.

Pending resolution of the petition before the Supreme Court, petitioner filed an urgent manifestation with motion to dismiss, alleging that on March 10, 2009, the parties jointly executed and filed with the NLRC a conditional satisfaction of judgment with urgent motion to cancel appeal bond all without prejudice to the pending petition for certiorari in the Court of Appeals.

Petitioner received from respondents the amount of P2,985,129 as conditional payment of the judgment award of the LA only to prevent imminent execution of the NLRC ruling. Petitioner submitted an affidavit approved by LA Arthur A. Amansec where the former committed, among others, not to file any complaint or prosecute any suit or action against respondents after receiving the payment which he will return in case of reversal of the NLRC decision in his favor.

Respondents maintained that the conditional satisfaction of judgment should not be taken against them because it was the only protection available to them to prevent the execution proceedings before the NLRC.

Does this argument find merit?

Ruling: No.

In a nutshell, the documents above enabled respondents to prevent the execution of the NLRC decision, maintain their petition before the CA, and, in the event of an unfavorable outcome, seek an appeal before us. Daang, on the other hand, would not only be obliged to return all settlement money he received in the event that the CA reverses the NLRC, by his waiver of his claims and right to prosecute any further action, he also gave up any legal recourse which would otherwise have been available to him.

Clearly, Daang is on the losing end. The terms of the conditional satisfaction of judgment and the affidavit, not unlike those considered by this court in Hernandez v. Crossworld Marine Services Inc. are highly unfair and prejudicial against him.

Applying Hernandez, we find respondents to be in bad faith and should, therefore, bear the consequence of their actions—the conditional payment of the judgment award to Daang will be treated as a voluntary settlement in full satisfaction of the NLRC’s judgment. With the judgment award satisfied as of March 10, 2009—when the parties signed and filed the conditional satisfaction of judgment with the NLRC, respondents’ petition before the CA became moot and academic.

We reject respondents’ contention that the conditional satisfaction of judgment is their only protection against the execution proceedings before the NLRC. Respondents are not compelled to immediately pay the judgment award.

In fact, they had already filed with the NLRC an appeal bond intended as an assurance to Daang that he would receive the money judgment upon dismissal of respondents’ appeal. (Marino B. Daang vs. Skippers United Pacific Inc. and Commercial S.A., G.R. 191902, July 30, 2019).


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