Facts:

Evelyn Yonaha, the petitioner, sought to challenge an order from the Regional Trial Court (RTC) that granted a motion for the issuance of a writ of subsidiary execution against her. This motion was filed by the heirs of Hector CaAete, who had been killed in a vehicular accident involving Elmer Ouano, the driver of a vehicle owned by EK SEA Products. Ouano was charged with "Reckless Imprudence Resulting in Homicide" and, upon pleading guilty, was sentenced to imprisonment and ordered to pay damages to the heirs of the victim.

After Ouano's conviction, a writ of execution was issued to satisfy the monetary award. However, Ouano claimed he was unable to pay the damages. Consequently, the private respondents filed a motion for subsidiary execution against Yonaha, who was Ouano's employer. This motion was filed without prior notice to Yonaha. The RTC issued an order for the writ of subsidiary execution, which was enforced by the sheriff at Yonaha's residence, where she first learned of Ouano's conviction.

Yonaha filed a motion to stay and recall the writ, arguing that she had not been given notice and that the employer's liability had not been established. The RTC denied her motion, and her subsequent plea for reconsideration was also rejected. Yonaha then elevated the matter to the Court of Appeals, which initially issued a writ of preliminary injunction but later dismissed her petition for lack of merit.

Legal Issues:

  1. Did the RTC err in issuing the writ of subsidiary execution without providing the petitioner, Yonaha, with prior notice and a hearing?
  2. What are the requirements for establishing an employer's subsidiary liability under Article 103 of the Revised Penal Code?

Arguments:

  • Petitioner (Yonaha):

    • Argued that the issuance of the writ of subsidiary execution violated her right to due process as she was not given prior notice or an opportunity to be heard.
    • Contended that the employer's liability had not been established, as the necessary conditions for subsidiary liability were not met.
  • Respondents (Heirs of Hector CaAete):

    • Argued that the issuance of the writ was justified since Yonaha, as the employer, became subsidiarily liable upon Ouano's conviction and his proven insolvency.
    • Maintained that a hearing was unnecessary as Yonaha had not presented any defenses against her liability.

Court's Decision and Legal Reasoning:

The Supreme Court found merit in Yonaha's petition, emphasizing the necessity of due process in the enforcement of subsidiary liability. The Court reiterated that the statutory basis for an employer's subsidiary liability is found in Article 103 of the Revised Penal Code, which requires:

  1. The existence of an employer-employee relationship.
  2. The employer must be engaged in some kind of industry.
  3. The employee must be adjudged guilty of a wrongful act committed in the discharge of his duties.
  4. The employee must be insolvent.

The Court held that while the employer's liability could be enforced in the same criminal proceedings, it was imperative for the court to conduct a hearing to determine the applicability and propriety of the employer's liability. The Court rejected the notion that a hearing would be a mere formality, asserting that the employer must be afforded the opportunity to present any defenses against the subsidiary liability.

Consequently, the Court set aside the orders of the RTC and remanded the case for further proceedings, ensuring that Yonaha would have the right to a hearing on the motion for the issuance of a writ of subsidiary execution.

Significant Legal Principles Established:

  1. The requirement of due process in the enforcement of an employer's subsidiary liability, necessitating a hearing to establish the conditions for such liability.
  2. Clarification of the conditions under which an employer can be held subsidiarily liable for the acts of an employee, emphasizing the need for a thorough examination of the employer-employee relationship and the circumstances surrounding the employee's wrongful act.