Professional Documents
Culture Documents
ELECTRICAL
MANUFACTURING,
INC.,
Petitioners,
- versus -
MENDOZA, and
PERLAS-BERNABE, JJ.
SAMAHANG
NG
EVER
NAMAWU
represented
PANGANIBAN,
MANGGAGAWA
ELECTRICAL/
LOCAL
by
224
FELIMON
Respondents.
Promulgated:
x -----------------------------------------------------------------------------------------------------x
DECISION
MENDOZA, J.:
This petition for review on certiorari1 under Rule 45 of the 1997 Rules
of Civil Procedure assails the August 31, 2010 Decision 2 and the December
16, 2010 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 108978.
1
2
3
In its defense, EEMI explained that it had closed the business due to
various factors. In 1995, it invested in Orient Commercial Banking
Corporation (Orient Bank) the sum of P500,000,000.00 and during the Asian
Currency crises, various economies in the South East Asian Region were hurt
badly. EEMI was one of those who suffered huge losses. In November 1996, it
obtained a loan in the amount of P121,400,000.00 from United Coconut
Planters Bank (UCPB). As security for the loan, EEMIs land and its
improvements, including the factory, were mortgaged to UCPB.
were invested. As a result, EEMI was not able to meet its loan obligations
with UCPB.
4
5
6
On April 25, 2007, the Labor Arbiter (LA) ruled that respondents were
not illegally dismissed. It, however, ordered EEMI and its President, Vicente
Go (Go), to pay their employees separation pay and 13 th month pay
respectively.7 The decretal portion of the LA decision, reads:
On September 15, 2008, the NLRC reversed and set aside the decision
of the LA. The NLRC dismissed the complaint for lack of merit and ruled that
since EEMIs cessation of business operation was due to serious business
losses, the employees were not entitled to separation pay.8
7
8
9
10
11
12
13
EEMI and Go filed a motion for reconsideration but it was denied in the
CA Resolution dated December 16, 2010.14
Issues:
14
15
one-half month pay for every year of service, whichever is higher. A fraction
of at least six months shall be considered one whole year.
In this case, EEMI failed to establish that the main reason for its closure
was business reverses. As aptly observed by the CA, the cessation of EEMIs
business was not directly brought about by serious business losses or
financial reverses, but by reason of the enforcement of a judgment against it.
Thus, EEMI should be required to pay separation pay to its affected
employees.
made
respondent
Go
as
liable
as
respondent
EEMI,
for
complainants money awards.19 Added the LA, being the President and the
one actively representing respondent EEMI, in major contracts i.e. Real
Estate Mortgage, loans, dacion en pago, respondent Go has to be liable in
the case.20 As earlier stated, the CA affirmed the LA decision citing the case
of Restaurante Las Conchas v. Llego,21 where it was held that when the
employer corporation is no longer existing and unable to satisfy the
judgment in favor of the employees, the officers should be held liable for
acting on behalf of the corporation.22
17
18
19
20
21
22
and
Pantranco
Employees
Association
(PEA-PTGWO)
v.
separate
personalities,
and
insist
that
because
the
27
28
29
In the present case, Go may have acted in behalf of EEMI but the
companys failure to operate cannot be equated to bad faith. Cessation of
business operation is brought about by various causes like mismanagement,
lack of demand, negligence, or lack of business foresight. Unless it can be
shown that the closure was deliberate, malicious and in bad faith, the Court
must apply the general rule that a corporation has, by law, a personality
30
31
32
separate and distinct from that of its owners. As there is no evidence that
Go, as EEMIs President, acted maliciously or in bad faith in handling their
business affairs and in eventually implementing the closure of its business,
he cannot be held jointly and solidarily liable with EEMI.
SO ORDERED.
BILL
PERCY,
Petitioners,
vs.
MANOLO SORIANO, LESTER GONZALES, and YOLANDA BADILLA,
Respondents.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to set aside the Decision 1 and the Resolution2 of the
Court of Appeals (CA) in CA-G.R. SP No. 67766.
Enriquez
are also
the officers
and stockholders
of
Burgos
in
several
memoranda
issued
to
them.
After
dismissing
respondents, Burgos filed a case for qualified theft against Soriano and
Gonzales before the Makati City Prosecutor's Office, but the case was
dismissed for insufficiency of evidence.
In his Affidavit,9 Soriano claimed that on October 4, 1997, he was barred from
entering the company premises and that the following day, Harbutt shouted
at him for having participated in the formation of a union. He was later
dismissed from work. For his part, Gonzales averred that he was coerced to
resign by Percy and Harbutt in the presence of their goons. Badilla 10 claimed
that she was also forced by Percy and Harbutt to sign a resignation letter, but
she refused to do so because she was innocent of the charges against her.
She was nevertheless dismissed from service.
The three (3) respondents averred that they never received the memoranda
containing their alleged violation of company rules and they argued that
these memoranda were fabricated to give a semblance of cause to their
termination. Soriano and Gonzales further claimed that the complaint filed
against them was only an afterthought as the same was filed after
petitioners learned that a complaint for illegal dismissal was already
instituted against them.
On September 27, 1998, the LA rendered a Decision 11 finding that
respondents were illegally dismissed because the alleged violations they
were charged with were not reduced in writing and were not made known to
them, thus, denying them due process. The LA found that respondents did
not actually receive the memoranda allegedly issued by petitioners, and that
the same were mere afterthought to conceal the illegal dismissal. The
dispositive portion of the Decision reads:
WHEREFORE, premises all considered, respondents (petitioners herein) are
hereby ordered, jointly and severally:
a. To reinstate within ten (10) days herein complainants to their
former positions without loss of seniority rights with full
backwages from actual dismissal to actual reinstatement;
b. To declare the respondents (petitioners herein) guilty of unfair
labor practice for terminating complainants due to their union
activities, which is union-busting, and to pay a fine of Ten
petitioners are liable, whether Park Hotel, Percy and Harbutt are jointly and
severally liable with Burgos for the dismissal of respondents.
Park Hotel argued that it is not liable on the ground that respondents were
not its employees. On the other hand, Percy and Harbutt argued that the CA
committed error in piercing the corporate veil between them and respondent
corporations, thereby making them all solidarily liable to the respondents.
To begin with, it is significant to note that the LA, the NLRC and the CA were
unanimous in their findings that respondents were dismissed without just
cause and due process. They were also in agreement that unfair labor
practice was committed against respondents. We reiterate the rule that
findings of fact of the Court of Appeals, particularly where it is in absolute
agreement with that of the NLRC and the LA, as in this case, are accorded
not only respect but even finality and are deemed binding upon this Court so
long as they are supported by substantial evidence. 23 The function of this
Court is limited to the review of the appellate courts alleged errors of law. It
is not required to weigh all over again the factual evidence already
considered in the proceedings below.24 In any event, we found no compelling
reason to disturb the unanimous findings and conclusions of the CA, the
NLRC and the LA with respect to the finding of illegal dismissal.
The requisites for a valid dismissal are: (a) the employee must be afforded
due process, i.e., he must be given an opportunity to be heard and defend
himself; and (b) the dismissal must be for a valid cause as provided in Article
282 of the Labor Code, or for any of the authorized causes under Articles 283
and 284 of the same Code. 25 In the case before us, both elements are
completely lacking. Respondents were dismissed without any just or
authorized cause and without being given the opportunity to be heard and
defend themselves. The law mandates that the burden of proving the validity
of the termination of employment rests with the employer. Failure to
discharge this evidentiary burden would necessarily mean that the dismissal
was
not
justified
and,
therefore,
illegal.
Unsubstantiated
suspicions,
documents
presented
by
Soriano,
it
appears
that
Soriano's
payroll
Petitioners,
vs.
REY SALAC, WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE
BELONIO, LOLIT SALINEL and BUDDY BONNEVIE, Respondents.
x-----------------------x
G.R. No. 152710
HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of
Department of Labor and Employment (DOLE), HON. ROSALINDA D.
PHILIPPINES
STEADFAST
SERVIZO
INTERNATIONAL
INTERNATIONALE,
RECRUITMENT
CORP.,
INC.,
VERDANT
SERVICES
LTD.
CO.,
SSC
MULTI-SERVICES,
DMJ
by
its
proprietress,
MARCELINA
I.
PAGSIBIGAN,
Respondents.
x-----------------------x
G.R. No. 167590
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE
EXECUTIVE SECRETARY, the HONORABLE SECRETARY OF LABOR AND
EMPLOYMENT
(DOLE),
ADMINISTRATION
the
(POEA),
PHILIPPINE
the
OVERSEAS
OVERSEAS
EMPLOYMENT
WORKERS
WELFARE
RELATIONS
COMMISSION
(NLRC),
the
HONORABLE
and
the
COMMISSION
ON
AUDIT
(COA),
Petitioners,
vs.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. (P ASEI),
Respondent.
x-----------------------x
G.R. Nos. 182978-79
BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner,
vs.
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of
daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC., and
JAIME ORTIZ (President of White Falcon Services, Inc.), Respondents.
x-----------------------x
G.R. Nos. 184298-99
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of
deceased
daughter,
Jasmin
G.
Cuaresma),
Petitioners,
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICES EXPORTER
AND PROMOTION, INC., Respondents.
DECISION
ABAD, J.:
These consolidated cases pertain to the constitutionality of certain provisions
of Republic Act 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995.
The Facts and the Case
On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant
Workers and Overseas Filipinos Act of 1995 that, for among other purposes,
sets the Governments policies on overseas employment and establishes a
and all other orders, circulars and issuances that are inconsistent with the
policy of deregulation under R.A. 8042.
Prompted by the RTCs above actions, the government officials concerned
filed the present petition in G.R. 152642 seeking to annul the RTCs decision
and have the same enjoined pending action on the petition.
On April 17, 2002 the Philippine Association of Service Exporters, Inc.
intervened in the case before the Court, claiming that the RTC March 20,
2002 Decision gravely affected them since it paralyzed the deployment
abroad of OFWs and performing artists. The Confederated Association of
Licensed Entertainment Agencies, Incorporated (CALEA) intervened for the
same purpose.4
On May 23, 2002 the Court 5 issued a TRO in the case, enjoining the Quezon
City RTC, Branch 96, from enforcing its decision.
In a parallel case, on February 12, 2002 respondents Asian Recruitment
Council Philippine Chapter, Inc. and others (Arcophil, et al.) filed a petition for
certiorari and prohibition with application for TRO and preliminary injunction
against the DOLE Secretary, the POEA Administrator, and the TESDA
Director-General,6 before the RTC of Quezon City, Branch 220, to enjoin the
latter from implementing the 2002 Rules and Regulations Governing the
Recruitment and Employment of Overseas Workers and to cease and desist
from issuing other orders, circulars, and policies that tend to regulate the
recruitment and placement of OFWs in violation of the policy of deregulation
provided in Sections 29 and 30 of R.A. 8042.
On March 12, 2002 the Quezon City RTC rendered an Order, granting the
petition and enjoining the government agencies involved from exercising
regulatory functions over the recruitment and placement of OFWs. This
prompted the DOLE Secretary, the POEA Administrator, and the TESDA
SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,
procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when
undertaken by a non-license or non-holder of authority contemplated under
Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as
the Labor Code of the Philippines: Provided, That such non-license or nonholder, who, in any manner, offers or promises for a fee employment abroad
to two or more persons shall be deemed so engaged. It shall likewise include
the following acts, whether committed by any person, whether a nonlicensee, non-holder, licensee or holder of authority:
xxxx
SEC. 7. Penalties.
(a) Any person found guilty of illegal recruitment shall suffer the
penalty of imprisonment of not less than six (6) years and one
(1) day but not more than twelve (12) years and a fine not less
than two hundred thousand pesos (P200,000.00) nor more than
five hundred thousand pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not less than
five hundred thousand pesos (P500,000.00) nor more than one
million
pesos
(P1,000,000.00)
shall
be
imposed
if
illegal
offense was committed or where the offended party actually resides at the
time of the commission of the offense.
The RTC of Manila declared Section 6 unconstitutional after hearing on the
ground that its definition of "illegal recruitment" is vague as it fails to
distinguish between licensed and non-licensed recruiters 11 and for that
reason gives undue advantage to the non-licensed recruiters in violation of
the right to equal protection of those that operate with government licenses
or authorities.
But "illegal recruitment" as defined in Section 6 is clear and unambiguous
and, contrary to the RTCs finding, actually makes a distinction between
licensed and non-licensed recruiters. By its terms, persons who engage in
"canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers" without the appropriate government license or authority are guilty
of illegal recruitment whether or not they commit the wrongful acts
enumerated in that section. On the other hand, recruiters who engage in the
canvassing,
enlisting,
etc.
of
OFWs,
although
with
the
appropriate
Apparently, the Manila RTC did not agree that the law can impose such grave
penalties upon what it believed were specific acts that were not as
condemnable as the others in the lists. But, in fixing uniform penalties for
each of the enumerated acts under Section 6, Congress was within its
prerogative to determine what individual acts are equally reprehensible,
consistent with the State policy of according full protection to labor, and
deserving of the same penalties. It is not within the power of the Court to
question the wisdom of this kind of choice. Notably, this legislative policy has
been further stressed in July 2010 with the enactment of R.A. 10022 12 which
increased even more the duration of the penalties of imprisonment and the
amounts of fine for the commission of the acts listed under Section 7.
Obviously, in fixing such tough penalties, the law considered the unsettling
fact that OFWs must work outside the countrys borders and beyond its
immediate protection. The law must, therefore, make an effort to somehow
protect them from conscienceless individuals within its jurisdiction who,
fueled by greed, are willing to ship them out without clear assurance that
their contracted principals would treat such OFWs fairly and humanely.
As the Court held in People v. Ventura,13 the State under its police power
"may prescribe such regulations as in its judgment will secure or tend to
secure the general welfare of the people, to protect them against the
consequence of ignorance and incapacity as well as of deception and fraud."
Police power is "that inherent and plenary power of the State which enables
it to prohibit all things hurtful to the comfort, safety, and welfare of society."14
The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that
allowing the offended parties to file the criminal case in their place of
residence would negate the general rule on venue of criminal cases which is
the place where the crime or any of its essential elements were committed.
Venue, said the RTC, is jurisdictional in penal laws and, allowing the filing of
obtaining justice for their daughter. Consequently, the Court held the foreign
employer Rajab and Silsilah, White Falcon, Becmen, and the latters
corporate directors and officers jointly and severally liable to the Cuaresmas
for: 1) P2,500,000.00 as moral damages; 2) P2,500,000.00 as exemplary
damages; 3) attorneys fees of 10% of the total monetary award; and 4) cost
of suit.
On July 16, 2009 the corporate directors and officers of Becmen, namely,
Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio and Eddie De Guzman
(Gumabay, et al.) filed a motion for leave to Intervene. They questioned the
constitutionality of the last sentence of the second paragraph of Section 10,
R.A. 8042 which holds the corporate directors, officers and partners jointly
and solidarily liable with their company for money claims filed by OFWs
against their employers and the recruitment firms. On September 9, 2009
the Court allowed the intervention and admitted Gumabay, et al.s motion for
reconsideration.
The key issue that Gumabay, et al. present is whether or not the 2nd
paragraph of Section 10, R.A. 8042, which holds the corporate directors,
officers, and partners of recruitment and placement agencies jointly and
solidarily liable for money claims and damages that may be adjudged
against the latter agencies, is unconstitutional.
In
G.R.
167590
(the
PASEI
case),
the
Quezon
City
RTC
held
as
WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the petitions
for having become moot and academic.1wphi1
In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial Court
ofManila dated December 8, 2004 and DECLARES Sections 6, 7, and 9 of
Republic Act 8042 valid and constitutional.
In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court
HOLDS the last sentence of the second paragraph of Section 10 of Republic
Act 8042 valid and constitutional. The Court, however, RECONSIDERS and
SETS ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298-99
that held intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio,
and Eddie De Guzman jointly and solidarily liable with respondent Becmen
Services Exporter and Promotion, Inc. to spouses Simplicia and Mila
Cuaresma for lack of a finding in those cases that such intervenors had a
part in the act or omission imputed to their corporation.
SO ORDERED.
TIMOTEO H. SARONA,
Petitioner,
Present:
- versus -
CARPIO, J.,
Chairperson,
PEREZ,
SERENO,
REYES, and
BERNABE, JJ.
CESAR S. TAN,
Promulgated:
Respondents.
January 18, 2012
x-----------------------------------------------------------------------------------------x
DECISION
REYES, J.:
This is a petition for review under Rule 45 of the Rules of Court from
the May 29, 2008 Decision1 of the Twentieth Division of the Court of Appeals
(CA) in CA-G.R. SP No. 02127 entitled Timoteo H. Sarona v. National Labor
Relations Commission, Royale Security Agency (formerly Sceptre Security
Agency) and Cesar S. Tan (Assailed Decision), which affirmed the National
Labor Relations Commissions (NLRC) November 30, 2005 Decision and
January 31, 2006 Resolution, finding the petitioner illegally dismissed but
limiting the amount of his backwages to three (3) monthly salaries. The CA
likewise affirmed the NLRCs finding that the petitioners separation pay
should be computed only on the basis of his length of service with
respondent Royale Security Agency (Royale). The CA held that absent any
showing that Royale is a mere alter ego of Sceptre Security Agency
(Sceptre), Royale cannot be compelled to recognize the petitioners tenure
with Sceptre. The dispositive portion of the CAs Assailed Decision states:
WHEREFORE, in view of the foregoing, the instant petition
is PARTLY GRANTED, though piercing of the corporate veil is
hereby denied for lack of merit. Accordingly, the assailed
Decision
and
Resolution
of
the
NLRC
respectively
dated
November 30, 2005 and January 31, 2006 are hereby AFFIRMED
as to the monetary awards.
SO ORDERED. 2
Factual Antecedents
On June 20, 2003, the petitioner, who was hired by Sceptre as a
security guard sometime in April 1976, was asked by Karen Therese Tan
(Karen), Sceptres Operation Manager, to submit a resignation letter as the
same was supposedly required for applying for a position at Royale. The
petitioner was also asked to fill up Royales employment application form,
which was handed to him by Royales General Manager, respondent Cesar
Antonio Tan II (Cesar).3
After several weeks of being in floating status, Royales Security
Officer, Martin Gono (Martin), assigned the petitioner at Highlight Metal Craft,
Inc. (Highlight Metal) from July 29, 2003 to August 8, 2003. Thereafter, the
petitioner was transferred and assigned to Wide Wide World Express, Inc.
(WWWE, Inc.). During his assignment at Highlight Metal, the petitioner used
the
patches
and
agency
cloths
of
Sceptre
and
it
was
only
when he was posted at WWWE, Inc. that he started using those of Royale.4
On September 17, 2003, the petitioner was informed that his
assignment at WWWE, Inc. had been withdrawn because Royale had
allegedly been replaced by another security agency. The petitioner, however,
shortly discovered thereafter that Royale was never replaced as WWWE,
Inc.s security agency. When he placed a call at WWWE, Inc., he learned that
his fellow security guard was not relieved from his post.5
short,
respondent
wanted
to
impress
before
us
that
expressed
in
clearly
certain
and
unequivocal
acts,
however,
an
interim
abandonment,
there
must
be
that
is
required
to
constitute
as
held
in
the
case
of
Pampanga
Sugar
Development Co., Inc. vs. NLRC, 272 SCRA 737 where the
Supreme Court ruled:
The immediate filing of a complaint for
[i]llegal
[d]ismissal
by
an
employee
is
the
respondents
were
ordered
to
pay
the
petitioner
separation pay equivalent to his one (1) month salary in consideration of his
tenure with Royale, which lasted for only one (1) month and three (3) days.
In
this
The petitioner, on the other hand, did not appeal LA Gutierrezs May 11,
2005 Decision but opted to raise the validity of LA Gutierrezs adverse
findings with respect to piercing Royales corporate personality and
computation of his separation pay in his Reply to the respondents
Memorandum of Appeal. As the filing of an appeal is the prescribed remedy
and no aspect of the decision can be overturned by a mere reply, the NLRC
dismissed the petitioners efforts to reverse LA Gutierrezs disposition of
these issues. Effectively, the petitioner had already waived his right to
by
merely
filing
Reply
to
Respondents
Appeal
Memorandum.13
By way of this Petition, the petitioner would like this Court to revisit the
computation of his backwages, claiming that the same should be computed
from the time he was illegally dismissed until the finality of this decision. 17
The petitioner would likewise have this Court review and examine anew the
factual allegations and the supporting evidence to determine if the CA erred
in its refusal to pierce Royales corporate mask and rule that it is but a mere
continuation or successor of Sceptre. According to the petitioner, the
erroneous computation of his separation pay was due to the CAs failure, as
well as the NLRC and LA Gutierrez, to consider evidence conclusively
demonstrating that Royale and Sceptre are one and the same juridical entity.
The petitioner claims that since Royale is no more than Sceptres alter ego, it
should recognize and credit his length of service with Sceptre.18
The petitioner claimed that Royale and Sceptre are not separate legal
persons for purposes of computing the amount of his separation pay and
other benefits under the Labor Code. The piercing of Royales corporate
personality is justified by several indicators that Royale was incorporated for
the sole purpose of defeating his right to security of tenure and circumvent
payment of his benefits to which he is entitled under the law: (i) Royale was
holding office in the same property used by Sceptre as its principal place of
business;19 (ii) Sceptre and Royal have the same officers and employees; 20
(iii) on October 14, 1994, Roso, the sole proprietor of Sceptre, sold to Aida,
and her husband, Wilfredo Gracia K. Tan (Wilfredo), 21 the property used by
Sceptre as its principal place of business; 22 (iv) Wilfredo is one of the
incorporators of Royale;23 (v) on May 3, 1999, Roso ceded the license to
operate Sceptre issued by the Philippine National Police to Aida; 24 (vi) on July
28, 1999, the business name Sceptre Security & Detective Agency was
registered with the Department of Trade and Industry (DTI) under the name
of Aida;25 (vii) Aida exercised control over the affairs of Sceptre and Royale,
as she was, in fact, the one who dismissed the petitioner from employment; 26
(viii) Karen, the daughter of Aida, was Sceptres Operation Manager and is
one of the incorporators of Royale;27 and (ix) Cesar Tan II, the son of Aida was
one of Sceptres officers and is one of the incorporators of Royale.28
In their Comment, the respondents claim that the petitioner is barred
from questioning the manner by which his backwages and separation pay
were computed. Earlier, the petitioner moved for the execution of the NLRCs
November 30, 2005 Decision 29 and the respondents paid him the full amount
of the monetary award thereunder shortly after the writ of execution was
issued.30 The respondents likewise maintain that Royales separate and
the
award
November
30,
under
2005
the
NLRCs
Decision
is
the
petitioner
is
not
widow,
Sonia,
the
amount
of
P3,649,800.00,
The finality of the NLRCs decision does not preclude the filing of a
petition for certiorari under Rule 65 of the Rules of Court. That the NLRC
issues an entry of judgment after the lapse of ten (10) days from the parties
receipt of its decision36 will only give rise to the prevailing partys right to
move for the execution thereof but will not prevent the CA from taking
cognizance of a petition for certiorari on jurisdictional and due process
considerations.37 In turn, the decision rendered by the CA on a petition for
certiorari may be appealed to this Court by way of a petition for review on
certiorari under Rule 45 of the Rules of Court. Under Section 5, Article VIII of
the Constitution, this Court has the power to review, revise, reverse, modify,
or affirm on appeal or certiorari as the law or the Rules of Court may provide,
final judgments and orders of lower courts in x x x all cases in which only an
error or question of law is involved. Consistent with this constitutional
regardless
of
the
nature
of
the
action
or
proceedings
Rule
45
confined
to
Nevertheless,
Petition
should
questions
of
this
has
Court
be
law.
the
if
the
findings
in
assailed
by
the
evidence
on
record
or
there
was
patent
it
become
as
the
in
his
respondents
final
petitioner
reply
appeal
and
only
to
the
may
be
is
necessary
for
just
is
continuation
or
successor of Sceptre.
and distinct from the persons composing it, as well as from any other legal
entity to which it may be related. This is basic.45
Equally well-settled is the principle that the corporate mask may be
removed or the corporate veil pierced when the corporation is just an alter
ego of a person or of another corporation. For reasons of public policy and in
the interest of justice, the corporate veil will justifiably be impaled only when
it becomes a shield for fraud, illegality or inequity committed against third
persons.46
Hence, any application of the doctrine of piercing the corporate veil
should be done with caution. A court should be mindful of the milieu where it
is to be applied. It must be certain that the corporate fiction was misused to
such an extent that injustice, fraud, or crime was committed against another,
in disregard of rights. The wrongdoing must be clearly and convincingly
established; it cannot be presumed. Otherwise, an injustice that was never
unintended may result from an erroneous application.47
Whether the separate personality of the corporation should be pierced
hinges on obtaining facts appropriately pleaded or proved. However, any
piercing of the corporate veil has to be done with caution, albeit the Court
will not hesitate to disregard the corporate veil when it is misused or when
necessary in the interest of justice. After all, the concept of corporate entity
was not meant to promote unfair objectives.48
The doctrine of piercing the corporate veil applies only in three (3)
basic areas, namely: 1) defeat of public convenience as when the corporate
fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud
cases or when the corporate entity is used to justify a wrong, protect fraud,
or defend a crime; or 3) alter ego cases, where a corporation is merely a
farce since it is a mere alter ego or business conduit of a person, or where
the
corporation is so organized and controlled and its affairs are so conducted as
to make it merely an instrumentality, agency, conduit or adjunct of another
corporation.49
In this regard, this Court finds cogent reason to reverse the CAs
findings. Evidence abound showing that Royale is a mere continuation or
successor of Sceptre and fraudulent objectives are behind Royales
incorporation and the petitioners subsequent employment therein. These
are plainly suggested by events that the respondents do not dispute and
which the CA, the NLRC and LA Gutierrez accept as fully substantiated but
misappreciated as insufficient to warrant the use of the equitable weapon of
piercing.
As correctly pointed out by the petitioner, it was Aida who exercised
control and supervision over the affairs of both Sceptre and Royale. Contrary
to the submissions of the respondents that Roso had been the only one in
sole control of Sceptres finances and business affairs, Aida took over as
early as 1999 when Roso assigned his license to operate Sceptre on May 3,
1999.50 As further proof of Aidas acquisition of the rights as Sceptres sole
proprietor, she caused the registration of the business name Sceptre
Security & Detective Agency under her name with the DTI a few months
after Roso abdicated his rights to Sceptre in her favor. 51 As far as Royale is
concerned, the respondents do not deny that she has a hand in its
management and operation and possesses control and supervision of its
employees, including the petitioner. As the petitioner correctly pointed out,
that Aida was the one who decided to stop giving any assignments to the
petitioner and summarily dismiss him is an eloquent testament of the power
she wields insofar as Royales affairs are concerned. The presence of actual
common control coupled with the misuse of the corporate form to perpetrate
oppressive
or
manipulative
conduct
or
evade
performance
of
legal
Also, Sceptre and Royale have the same principal place of business. As early
as October 14, 1994, Aida and Wilfredo became the owners of the property
used by Sceptre as its principal place of business by virtue of a Deed of
Absolute
Sale
they
executed
with
Roso.57
Royale,
shortly
after
its
Royale also claimed a right to the cash bond which the petitioner
posted when he was still with Sceptre. If Sceptre and Royale are indeed
separate entities, Sceptre should have released the petitioners cash bond
when he resigned and Royale would have required the petitioner to post a
new cash bond in its favor.
Taking the foregoing in conjunction with Aidas control over Sceptres
and Royales business affairs, it is patent that Royale was a mere subterfuge
for Aida. Since a sole proprietorship does not have a separate and distinct
personality from that of the owner of the enterprise, the latter is personally
liable. This is what she sought to avoid but cannot prosper.
Effectively, the petitioner cannot be deemed to have changed
employers as Royale and Sceptre are one and the same. His separation pay
should, thus, be computed from the date he was hired by Sceptre in April
1976 until the finality of this decision. Based on this Courts ruling in
Masagana Concrete Products, et al. v. NLRC, et al.,58 the intervening period
between the day an employee was illegally dismissed and the day the
decision finding him illegally dismissed becomes final and executory shall be
considered in the computation of his separation pay as a period of imputed
or putative service:
Separation pay, equivalent to one month's salary for every
year of service, is awarded as an alternative to reinstatement
when the latter is no longer an option. Separation pay is
computed from the commencement of employment up to the
time of termination, including the imputed service for which the
employee is entitled to backwages, with the salary rate
prevailing at the end of the period of putative service being the
basis for computation.59
period
covered
in
the
time
unlawfully
the
employee
terminated
until
was
the
effectively
terminate
the
employment
of
an
illegally
dismissed
of
the
salaries
or
wages,
plus
all
other
benefits
and
fraud, are in order. Moral damages may be recovered where the dismissal of
the employee was tainted by bad faith or fraud, or where it constituted an
act oppressive to labor, and done in a manner contrary to morals, good
customs or public policy while exemplary damages are recoverable only if
the dismissal was done in a wanton, oppressive, or malevolent manner. 69
WHEREFORE, premises considered, the Petition is hereby GRANTED.
We REVERSE and SET ASIDE the CAs May 29, 2008 Decision in C.A.-G.R.
SP No. 02127 and order the respondents to pay the petitioner the following
minus the amount of (P23,521.67) paid to the petitioner in satisfaction of the
NLRCs November 30, 2005 Decision in NLRC Case No. V-000355-05:
a) full backwages and other benefits computed from October 1, 2003
(the date Royale illegally dismissed the petitioner) until the finality of
this decision;
b) separation pay computed from April 1976 until the finality of this decision
at the rate of one month pay per year of service;
c) ten percent (10%) attorneys fees based on the total amount of the
awards under (a) and (b) above;
d) moral damages of Twenty-Five Thousand Pesos (P25,000.00); and
5. exemplary damages of Twenty-Five Thousand Pesos (P25,000.00).
This case is REMANDED to the labor arbiter for computation of the
separation pay, backwages, and other monetary awards due the petitioner.
SO ORDERED.
HERMOCILLO
NAPALCRUZ,
WALTER
BUHIAN,
ELISEO
ABDUSAID
H.
DAMBONG,
LORINDA
M.
MUTIA,
DOMINADOR DEL ROSARIO, JOEL E. TRONO, HUSSIN A. JAWAJI, JULASNAM JAKARIA, LUZVIMINDA A. NOLASCO, VILMA G. GASCO,
MORITA S. MARMETO, PROCESA JUANICO, ANTONIO A. MONDRAGON,
JR., JESSICA F. QUIACHON, PACITA G. MEDINA, ARNEL S. SANTOS,
ANECITA T. TARAS, TOMINDAO T. TARAS, NULCA C. SABDANI, AKMAD
A. SABDANI, ROWENA J. GARCIA, LINA P. CASAS, MARLYN G.
FRANCISCO, MERCEDITA MAQUINANO, NICOLAS T. RIO, TERESITA A.
CASINAS, VIRGILIO F. IB-IB, PANTALEON S. ROJAS, JR., EVELYN V.
BEATINGO, MATILDE G. HUSSIN, ESPERANZA I. LLEDO, ADOLFINA
DELA MERCED, LAURA E. SANTOS, ROGACIANA MAQUILING, ALELIE
D. SAMSON, SHIRLEY L. ALVAREZ, MAGDALENA A. MARCOS, VIRGINIA
S.
ESPINOSA,
ANTONIO
C.
GUEVARA,
AUGUSTA
S.
DE
JESUS,
MARILYN
RUFINO,
JOSE
AGUSTIN,
EFREN
RIVERA,
and
LIBERATO
BAGALANON,
Petitioners,
vs.
MAR FISHING CO., INC., MIRAMAR FISHING CO., INC., ROBERT BUEHS
AND JEROME SPITZ. Respondents.
DECISION
SERENO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court, seeking a review of the Court of Appeals (CA) 19
March 2004 and 12 May 2005 Resolutions in CA-G.R. SP NO. 82651. The
appellate court had dismissed the Petition for Review on the ground that it
lacked a Verification and Certification against forum shopping.
The pertinent facts are as follows:
On 28 June 2001, respondent Mar Fishing Co., Inc. (Mar Fishing), engaged in
the business of fishing and canning of tuna, sold its principal assets to corespondent Miramar Fishing Co., Inc. (Miramar) through public bidding. 1 The
proceeds of the sale were paid to the Trade and Investment Corporation of
the Philippines (TIDCORP) to cover Mar Fishings outstanding obligation in the
amount of P 897,560,041.26.2 In view of that transfer, Mar Fishing issued a
Memorandum dated 23 October 2001 informing all its workers that the
Before this Court, 124 petitioners raise the issue of whether the CA gravely
erred in dismissing their Petition for Review on the ground that their pleading
lacked a Verification and Certification against forum shopping.23
The Rules of Court provide that a petition for certiorari must be verified and
accompanied by a sworn certification of non-forum shopping. 24 Failure to
comply with these mandatory requirements shall be sufficient ground for the
dismissal of the petition.25 Considering that only 3 of the 228 named
petitioners signed the requirement, the CA dismissed the case against them,
as they did not execute a Verification and Certification against forum
shopping.
Petitioners invoke substantial compliance with procedural rules when their
Manifestation already contains a Verification and Certification against forum
shopping executed by 161 signatories. They heavily rely on Jaro v. Court of
Appeals,26 citing Piglas-Kamao v. National Labor Relations Commission and
Cusi-Hernandez v. Diaz, in which we discussed that the subsequent
submission of the missing documentary attachments with the Motion for
Reconsideration amounted to substantial compliance.
However, this very case does not involve a failure to attach the Annexes.
Rather, the procedural infirmity consists of omission the failure to sign a
Verification and Certification against forum shopping. Addressing this defect
squarely, we have already resolved that because of noncompliance with the
requirements governing the certification of non-forum shopping, no error
could be validly attributed to the CA when it ordered the dismissal of the
special civil action for certiorari. 27 The lack of certification against forum
shopping is not curable by mere amendment of a complaint, but shall be a
cause for the dismissal of the case without prejudice. 28 Indeed, the general
rule is that subsequent compliance with the requirements will not excuse a
party's failure to comply in the first instance.29 Thus, on procedural aspects,
the appellate court correctly dismissed the case.
However, this Court has recognized that the merit of a case is a special
circumstance or compelling reason that justifies the relaxation of the rule
requiring verification and certification of non-forum shopping. 30 In order to
fully resolve the issue, it is thus necessary to determine whether technical
rules were brushed aside at the expense of substantial justice. 31 This Court
will then delve into the issue on (1) the solidary liability of Mar Fishing and
Miramar to pay petitioners monetary claims and (2) the reckoning period for
the award of back wages.
For a dismissal based on the closure of business to be valid, three (3)
requirements must be established. Firstly, the cessation of or withdrawal
from business operations must be bona fide in character. Secondly, there
must be payment to the employees of termination pay amounting to at least
one-half (1/2) month pay for each year of service, or one (1) month pay,
whichever is higher. Thirdly, the company must serve a written notice on the
employees and on the DOLE at least one (1) month before the intended
termination.32
In their Petition for Review on Certiorari, petitioners did not dispute the
conclusion of the LA and the NLRC that Mar Fishing had an authorized cause
to dismiss its workers. Neither did petitioners challenge the computation of
their separation pay.
Rather, they questioned the holding that only Mar Fishing was liable for their
monetary claims.33
Basing
their
conclusion
on
the
Memorandum
of
Agreement
and
same entity, given the commonality of their directors and the similarity of
their business venture in tuna canning plant operations.34
At the fore, the question of whether one corporation is merely an alter ego of
another is purely one of fact generally beyond the jurisdiction of this Court. 35
In any case, given only these bare reiterations, this Court sustains the ruling
of the LA as affirmed by the NLRC that Miramar and Mar Fishing are separate
and distinct entities, based on the marked differences in their stock
ownership.36 Also, the fact that Mar Fishings officers remained as such in
Miramar does not by itself warrant a conclusion that the two companies are
one and the same. As this Court held in Sesbreo v. Court of Appeals, the
mere showing that the corporations had a common director sitting in all the
boards without more does not authorize disregarding their separate juridical
personalities.37
Neither can the veil of corporate fiction between the two companies be
pierced by the rest of petitioners submissions, namely, the alleged take-over
by Miramar of Mar Fishings operations and the evident similarity of their
businesses. At this point, it bears emphasizing that since piercing the veil of
corporate fiction is frowned upon, those who seek to pierce the veil must
clearly establish that the separate and distinct personalities of the
corporations are set up to justify a wrong, protect a fraud, or perpetrate a
deception.38 This, unfortunately, petitioners have failed to do. In Indophil
Textile Mill Workers Union vs. Calica, we ruled thus:39
In the case at bar, petitioner seeks to pierce the veil of corporate entity of
Acrylic, alleging that the creation of the corporation is a devi[c]e to evade
the application of the CBA between petitioner Union and private respondent
company. While we do not discount the possibility of the similarities of the
businesses of private respondent and Acrylic, neither are we inclined to apply
the doctrine invoked by petitioner in granting the relief sought. The fact that
the businesses of private respondent and Acrylic are related, that some of
the employees of the private respondent are the same persons manning and
providing for auxiliary services to the units of Acrylic, and that the physical
plants, offices and facilities are situated in the same compound, it is our
considered opinion that these facts are not sufficient to justify the piercing of
the corporate veil of Acrylic. (Emphasis supplied.)
Having been found by the trial courts to be a separate entity, Mar Fishing
and not Miramar is required to compensate petitioners. Indeed, the back
wages and retirement pay earned from the former employer cannot be filed
against the new owners or operators of an enterprise.40
Evidently, the assertions of petitioners fail on both procedural and
substantive aspects.1wphi1 Therefore, no special reasons exist to reverse
the CAs dismissal of the case due to their failure to abide by the mandatory
procedure for filing a petition for review on certiorari. Given the correctness
of the appellate courts ruling and the lack of appropriate remedies, this
Court will no longer dwell on the exact computation of petitioners claims for
back wages, which have been sufficiently threshed out by the LA and the
NLRC. Judicial review of labor cases does not go beyond an evaluation of the
sufficiency of the evidence upon which labor officials' findings rest.41
While we sympathize with the situation of the workers in this case, we
cannot disregard, absent compelling reasons, the factual determinations and
the legal doctrines that support the findings of the courts a quo. Generally,
the findings of fact and the conclusion of the labor courts are not only
accorded great weight and respect, but are even clothed with finality and
deemed binding on this Court, as long as they are supported by substantial
evidence.42
On a final note, this Court reminds the parties seeking the ultimate relief of
certiorari to observe the rules, since nonobservance thereof cannot be
brushed aside as a "mere technicality." 43 Procedural rules are not to be
Republic
of
the
Philippines
SUPREME
COURT
Manila
SECOND DIVISION
G.R. No. 167291
PRINCE
TRANSPORT,
and
Mr.
RENATO
CLAROS,
Petitioners,
vs.
DIOSDADO GARCIA, LUISITO GARCIA, RODANTE ROMERO, REX BARTOLOME, FELICIANO
GASCO, JR., DANILO ROJO, EDGAR SANFUEGO, AMADO GALANTO, EUTIQUIO LUGTU, JOEL
GRAMATICA, MIEL CERVANTES, TERESITA CABANES, ROE DELA CRUZ, RICHELO BALIDOY,
VILMA PORRAS, MIGUELITO SALCEDO, CRISTINA GARCIA, MARIO NAZARENO, DINDO
TORRES, ESMAEL RAMBOYONG, ROBETO* MANO, ROGELIO BAGAWISAN, ARIEL SNACHEZ,
ESTAQULO VILLAREAL, NELSON MONTERO, GLORIA ORANTE, HARRY TOCA, PABLITO
MACASAET and RONALD GARCITA Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court praying
for the annulment of the Decision1 and Resolution2 of the Court of Appeals (CA) dated December
20, 2004 and February 24, 2005, respectively, in CA-G.R. SP No. 80953. The assailed Decision
reversed and set aside the Resolutions dated May 30, 2003 3 and September 26, 20034 of the
National Labor Relations Commission (NLRC) in CA No. 029059-01, while the disputed Resolution
denied petitioners' Motion for Reconsideration.
The present petition arose from various complaints filed by herein respondents charging
petitioners with illegal dismissal, unfair labor practice and illegal deductions and praying for the
award of premium pay for holiday and rest day, holiday pay, service leave pay, 13th month pay,
moral and exemplary damages and attorney's fees.
Respondents alleged in their respective position papers and other related pleadings that they were
employees of Prince Transport, Inc. (PTI), a company engaged in the business of transporting
passengers by land; respondents were hired either as drivers, conductors, mechanics or
inspectors, except for respondent Diosdado Garcia (Garcia), who was assigned as Operations
Manager; in addition to their regular monthly income, respondents also received commissions
equivalent to 8 to 10% of their wages; sometime in October 1997, the said commissions were
reduced to 7 to 9%; this led respondents and other employees of PTI to hold a series of meetings
to discuss the protection of their interests as employees; these meetings led petitioner Renato
Claros, who is the president of PTI, to suspect that respondents are about to form a union; he made
known to Garcia his objection to the formation of a union; in December 1997, PTI employees
requested for a cash advance, but the same was denied by management which resulted in
demoralization on the employees' ranks; later, PTI acceded to the request of some, but not all, of
the employees; the foregoing circumstances led respondents to form a union for their mutual aid
and protection; in order to block the continued formation of the union, PTI caused the transfer of all
union members and sympathizers to one of its sub-companies, Lubas Transport (Lubas); despite
such transfer, the schedule of drivers and conductors, as well as their company identification
cards, were issued by PTI; the daily time records, tickets and reports of the respondents were also
filed at the PTI office; and, all claims for salaries were transacted at the same office; later, the
business of Lubas deteriorated because of the refusal of PTI to maintain and repair the units being
used therein, which resulted in the virtual stoppage of its operations and respondents' loss of
employment.
Petitioners, on the other hand, denied the material allegations of the complaints contending that
herein respondents were no longer their employees, since they all transferred to Lubas at their
own request; petitioners have nothing to do with the management and operations of Lubas as well
as the control and supervision of the latter's employees; petitioners were not aware of the
existence of any union in their company and came to know of the same only in June 1998 when
they were served a copy of the summons in the petition for certification election filed by the union;
that before the union was registered on April 15, 1998, the complaint subject of the present
petition was already filed; that the real motive in the filing of the complaints was because PTI
asked respondents to vacate the bunkhouse where they (respondents) and their respective
families were staying because PTI wanted to renovate the same.
Subsequently, the complaints filed by respondents were consolidated.
On October 25, 2000, the Labor Arbiter rendered a Decision, 5 the dispositive portion of which reads
as follows:
WHEREFORE, judgment is hereby rendered:
1. Dismissing the complaints for Unfair Labor Practice, non-payment of holiday pay and
holiday premium, service incentive leave pay and 13th month pay;
Dismissing the complaint of Edgardo Belda for refund of boundary-hulog;
2. Dismissing the complaint for illegal dismissal against the respondents Prince
Transport, Inc. and/or Prince Transport Phils. Corporation, Roberto Buenaventura, Rory
Bayona, Ailee Avenue, Nerissa Uy, Mario Feranil and Peter Buentiempo;
3. Declaring that the complainants named below are illegally dismissed by Lubas
Transport; ordering said Lubas Transport to pay backwages and separation pay in lieu
of reinstatement in the following amount:
Complainants
Backwages
Separation Pay
P222,348.70
P79,456.00
203,350.00
54,600.00
145,250.00
13,000.00
221,500.00
30,000.00
221,500.00
60,000.00
130,725.00
29,250.00
265,800.00
60,000.00
221,500.00
50,000.00
265,800.00
60,000.00
130,725.00
29,250.00
221,500.00
70,000.00
265,800.00
60,000.00
130,725.00
35,100.00
145,250.00
19,500.00
265,800.00
60,000.00
221,500.00
60,000.00
265,800.00
50,000.00
221,500.00
40,000.00
221,500.00
40,000.00
174,300.00
23,400.00
130,725.00
17,550.00
130,725.00
17,550.00
301,500.00
30,000.00
221,500.00
30,000.00
145,250.00
19,500.00
265,800.00
60,000.00
263,100.00
60,000.00
264,600.00
60,000.00
295,000.00
40,000.00
354,000.00
48,000.00
295,000.00
40,000.00
354,000.00
84,000.00
(33) Tita Go
295,000.00
70,000.00
295,000.00
50,000.00
295,000.00
40,000.00
354,000.00
48,000.00
354,000.00
48,000.00
295,000.00
40,000.00
295,000.00
40,000.00
(40)Edgardo Bangcoro
354,000.00
36,000.00
4. Ordering Lubas Transport to pay attorney's fees equivalent to ten (10%) of the total
monetary award; and
6. Ordering the dismissal of the claim for moral and exemplary damages for lack merit.
SO ORDERED.6
The Labor Arbiter ruled that petitioners are not guilty of unfair labor practice in the absence of
evidence to show that they violated respondents right to self-organization. The Labor Arbiter also
held that Lubas is the respondents employer and that it (Lubas) is an entity which is separate,
distinct and independent from PTI. Nonetheless, the Labor Arbiter found that Lubas is guilty of
illegally dismissing respondents from their employment.
Respondents filed a Partial Appeal with the NLRC praying, among others, that PTI should also be
held equally liable as Lubas.
In a Resolution dated May 30, 2003, the NLRC modified the Decision of the Labor Arbiter and
disposed as follows:
WHEREFORE, premises considered, the appeal is hereby PARTIALLY GRANTED. Accordingly, the
Decision appealed from is SUSTAINED subject to the modification that Complainant-Appellant
Edgardo Belda deserves refund of his boundary-hulog in the amount of P446,862.00; and that
Complainants-Appellants Danilo Rojo and Danilo Laurel should be included in the computation of
Complainants-Appellants claim as follows:
Complainants
Backwages
Separation Pay
P355,560.00
P48,000.00
P357,960.00
P72,000.00
perform any and all acts necessary to resolve factual issues raised in cases falling within its
original and appellate jurisdiction, including the power to grant and conduct new trials or further
proceedings. x x x
However, equally settled is the rule that factual findings of labor officials, who are deemed to have
acquired expertise in matters within their jurisdiction, are generally accorded not only respect but
even finality by the courts when supported by substantial evidence, i.e., the amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. 14 But these
findings are not infallible. When there is a showing that they were arrived at arbitrarily or in
disregard of the evidence on record, they may be examined by the courts. 15 The CA can grant the
petition for certiorari if it finds that the NLRC, in its assailed decision or resolution, made a factual
finding not supported by substantial evidence. 16 It is within the jurisdiction of the CA, whose
jurisdiction over labor cases has been expanded to review the findings of the NLRC. 17
In this case, the NLRC sustained the factual findings of the Labor Arbiter. Thus, these findings are
generally binding on the appellate court, unless there was a showing that they were arrived at
arbitrarily or in disregard of the evidence on record. In respondents' petition for certiorari with the
CA, these factual findings were reexamined and reversed by the appellate court on the ground that
they were not in accord with credible evidence presented in this case. To determine if the CA's
reexamination of factual findings and reversal of the NLRC decision are proper and with sufficient
basis, it is incumbent upon this Court to make its own evaluation of the evidence on record. 18
After a thorough review of the records at hand, the Court finds that the CA did not commit error in
arriving at its own findings and conclusions for reasons to be discussed hereunder.
Firstly, petitioners posit that the petition filed with the CA is fatally defective, because the attached
verification and certificate against forum shopping was signed only by respondent Garcia.
The Court does not agree.
While the general rule is that the certificate of non-forum shopping must be signed by all the
plaintiffs in a case and the signature of only one of them is insufficient, the Court has stressed that
the rules on forum shopping, which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such absolute literalness as to subvert its
own ultimate and legitimate objective.19 Strict compliance with the provision regarding the
certificate of non-forum shopping underscores its mandatory nature in that the certification cannot
be altogether dispensed with or its requirements completely disregarded. 20 It does not, however,
prohibit substantial compliance therewith under justifiable circumstances, considering especially
that although it is obligatory, it is not jurisdictional.21
In a number of cases, the Court has consistently held that when all the petitioners share a common
interest and invoke a common cause of action or defense, the signature of only one of them in the
certification against forum shopping substantially complies with the rules. 22 In the present case,
there is no question that respondents share a common interest and invoke a common cause of
action. Hence, the signature of respondent Garcia is a sufficient compliance with the rule
governing certificates of non-forum shopping. In the first place, some of the respondents actually
executed a Special Power of Attorney authorizing Garcia as their attorney-in-fact in filing a petition
for certiorari with the CA.23
The Court, likewise, does not agree with petitioners' argument that the CA should not have given
due course to the petition filed before it with respect to some of the respondents, considering that
these respondents did not sign the verification attached to the Memorandum of Partial Appeal
earlier filed with the NLRC. Petitioners assert that the decision of the Labor Arbiter has become
final and executory with respect to these respondents and, as a consequence, they are barred from
filing a petition for certiorari with the CA.
With respect to the absence of some of the workers signatures in the verification, the verification
requirement is deemed substantially complied with when some of the parties who undoubtedly
have sufficient knowledge and belief to swear to the truth of the allegations in the petition had
signed the same. Such verification is deemed a sufficient assurance that the matters alleged in the
petition have been made in good faith or are true and correct, and not merely speculative.
Moreover, respondents' Partial Appeal shows that the appeal stipulated as complainants-appellants
"Rizal Beato, et al.", meaning that there were more than one appellant who were all workers of
petitioners.
In any case, the settled rule is that a pleading which is required by the Rules of Court to be
verified, may be given due course even without a verification if the circumstances warrant the
suspension of the rules in the interest of justice. 24 Indeed, the absence of a verification is not
jurisdictional, but only a formal defect, which does not of itself justify a court in refusing to allow
and act on a case. 25 Hence, the failure of some of the respondents to sign the verification attached
to their Memorandum of Appeal filed with the NLRC is not fatal to their cause of action.
Petitioners also contend that the CA erred in applying the doctrine of piercing the corporate veil
with respect to Lubas, because the said doctrine is applicable only to corporations and Lubas is not
a corporation but a single proprietorship; that Lubas had been found by the Labor Arbiter and the
NLRC to have a personality which is separate and distinct from that of PTI; that PTI had no hand in
the management and operation as well as control and supervision of the employees of Lubas.
The Court is not persuaded.
On the contrary, the Court agrees with the CA that Lubas is a mere agent, conduit or adjunct of
PTI. A settled formulation of the doctrine of piercing the corporate veil is that when two business
enterprises are owned, conducted and controlled by the same parties, both law and equity will,
when necessary to protect the rights of third parties, disregard the legal fiction that these two
entities are distinct and treat them as identical or as one and the same. 26 In the present case, it
may be true that Lubas is a single proprietorship and not a corporation. However, petitioners
attempt to isolate themselves from and hide behind the supposed separate and distinct
personality of Lubas so as to evade their liabilities is precisely what the classical doctrine of
piercing the veil of corporate entity seeks to prevent and remedy.
Thus, the Court agrees with the observations of the CA, to wit:
As correctly pointed out by petitioners, if Lubas were truly a separate entity, how come that it was
Prince Transport who made the decision to transfer its employees to the former? Besides, Prince
Transport never regarded Lubas Transport as a separate entity. In the aforesaid letter, it referred to
said entity as "Lubas operations." Moreover, in said letter, it did not transfer the employees; it
"assigned" them. Lastly, the existing funds and 201 file of the employees were turned over not to a
new company but a "new management."27
The Court also agrees with respondents that if Lubas is indeed an entity separate and independent
from PTI why is it that the latter decides which employees shall work in the former?
What is telling is the fact that in a memorandum issued by PTI, dated January 22, 1998, petitioner
company admitted that Lubas is one of its sub-companies. 28 In addition, PTI, in its letters to its
employees who were transferred to Lubas, referred to the latter as its "New City Operations Bus." 29
Moreover, petitioners failed to refute the contention of respondents that despite the latters
transfer to Lubas of their daily time records, reports, daily income remittances of conductors,
schedule of drivers and conductors were all made, performed, filed and kept at the office of PTI. In
fact, respondents identification cards bear the name of PTI.
It may not be amiss to point out at this juncture that in two separate illegal dismissal cases
involving different groups of employees transferred by PTI to other companies, the Labor Arbiter
handling the cases found that these companies and PTI are one and the same entity; thus, making
them solidarily liable for the payment of backwages and other money claims awarded to the
complainants therein.30
Petitioners likewise aver that the CA erred and committed grave abuse of discretion when it
ordered petitioners to reinstate respondents to their former positions, considering that the issue of
reinstatement was never brought up before it and respondents never questioned the award of
separation pay to them.
The Court is not persuaded.
It is clear from the complaints filed by respondents that they are seeking reinstatement. 31
In any case, Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the
relief sought, but may add a general prayer for such further or other reliefs as may be deemed just
and equitable. Under this rule, a court can grant the relief warranted by the allegation and the
proof even if it is not specifically sought by the injured party; the inclusion of a general prayer may
justify the grant of a remedy different from or together with the specific remedy sought, if the facts
alleged in the complaint and the evidence introduced so warrant.321avvphi1
Moreover, in BPI Family Bank v. Buenaventura,33 this Court ruled that the general prayer is broad
enough "to justify extension of a remedy different from or together with the specific remedy
sought." Even without the prayer for a specific remedy, proper relief may be granted by the court if
the facts alleged in the complaint and the evidence introduced so warrant. The court shall grant
relief warranted by the allegations and the proof even if no such relief is prayed for. The prayer in
the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not
otherwise specifically prayed for. 34 In the instant case, aside from their specific prayer for
reinstatement, respondents, in their separate complaints, prayed for such reliefs which are
deemed just and equitable.
As to whether petitioners are guilty of unfair labor practice, the Court finds no cogent reason to
depart from the findings of the CA that respondents transfer of work assignments to Lubas was
designed by petitioners as a subterfuge to foil the formers right to organize themselves into a
union. Under Article 248 (a) and (e) of the Labor Code, an employer is guilty of unfair labor
practice if it interferes with, restrains or coerces its employees in the exercise of their right to selforganization or if it discriminates in regard to wages, hours of work and other terms and conditions
of employment in order to encourage or discourage membership in any labor organization.
Indeed, evidence of petitioners' unfair labor practice is shown by the established fact that, after
respondents' transfer to Lubas, petitioners left them high and dry insofar as the operations of
Lubas was concerned. The Court finds no error in the findings and conclusion of the CA that
petitioners "withheld the necessary financial and logistic support such as spare parts, and repair
and maintenance of the transferred buses until only two units remained in running condition." This
left respondents virtually jobless.
WHEREFORE, the instant petition is denied. The assailed Decision and Resolution of the Court of
Appeals, dated December 20, 2004 and February 24, 2005, respectively, in CA-G.R. SP No. 80953,
are AFFIRMED.
SO ORDERED.
G.R. No. 179015
UNITED
PLANTERS
BANK,
Petitioner,
vs.
PLANTERS PRODUCTS, INC., JANET LAYSON and GREGORY GREY, Respondents.
DECISION
ABAD, J.:
This case is about the liability of the bank for a transaction entered into by its branch manager in
connivance with a client.
The Facts and the Case
Respondent Planters Products, Incorporated (PPI), a fertilizer manufacturer, entered into an
arrangement with respondent Janet Layson for the delivery of fertilizers to her, payable from the
proceeds of the loan that petitioner United Coconut Planters Bank (UCPB) extended to her. On
February 11, 1980 Layson executed a document called "pagares," written on the dorsal side of a
UCPB promissory note.1 The pagares stated that Layson had an approved loan with UCPB-Iloilo
Branch for P200,000.00. The second portion of the pagares, signed by that branchs manager
respondent Gregory Grey, stated that the "assignment has been duly accepted and payment duly
guaranteed within 60 days from PPIs Invoice." Specifically, the pagares said:
I/We irrevocably assign the proceeds of this Promissory Note to Planters Products, Inc., for the
account of Janet Layson as payment for my fertilizer/agchemicals withdrawals covered by Invoice
Nos. _______ for application to my fertilizer line.
I/We hereby attest and affirm that I/We have an approved loan with United Coconut Planters Bank,
Iloilo Branch, in the amount of Pesos "TWO HUNDRED THOUSAND (P200,000.00) which is allotted
for fertilizer.
Sgd.
JANET LAYSON
Feb. 11, 1980
Assignment accepted and payment unconditionally guaranteed within sixty (60) days from Planters
Products, Inc. Invoice date up to Pesos: Two Hundred Thousand (P200,000.00) only.
Sgd.
GREGORY
GREY
Manager
Subsequently, Layson executed a third document "Letter Guarantee by the Dealer," stating that
she binds herself to pay PPI the face value of the pagares in case UCPB did not pay the same at
maturity. But contrary to her undertakings, on the following day, February 12, 1980, Layson
withdrew with branch manager Greys connivance the P200,000.00 loan that UCPB granted her.
On the strength of the three documents, PPI delivered quantities of fertilizers to Layson. Layson
and Grey duplicated their transactions with PPI on February 18 and 27, 1980 covering two loans of
P100,000.00 each.
On April 28, 1980 PPI presented the documents of the financed transactions to UCPB for collection.
But the bank denied the claim on the ground that it neither authorized the transactions nor the
execution of the documents which were not part of its usual banking transactions. UCPB claimed
that branch manager Grey exceeded his authority in guaranteeing payment of Laysons purchases
on credit. The pagares, said UCPB, were illegal and void since banking laws prohibit bank officers
from guaranteeing loans of bank clients.
Consequently, in April 1980 PPI sued Layson, UCPB, and Grey for breach of contract with damages
before the Regional Trial Court (RTC) of Makati.2 Grey died while the case was on trial. Although the
RTC ordered Greys substitution by any of his heirs, no one came to substitute him. Trial proceeded
without prejudice to the claims against his estate.
On April 28, 1999 the RTC rendered a decision, absolving UCPB from liability for the value of the
fertilizer products that PPI sold to Layson on credit. Since Grey acted in excess of his authority in
guaranteeing the payment of the pagares and in involving himself in the transaction, UCPB cannot
be bound by the same. Further, the promissory notes, on the dorsal side of which appeared the
pagares, were not in negotiable form. They had neither a fixed date of maturity nor a fixed amount
of obligation. The pagares is also void under the Civil Code because the prestation, Greys act of
guaranteeing the loan, is prohibited under Section 83 of the General Banking Act.
The court held Layson liable to PPI a) for P399,966.25 with 6% interest from the time it filed its
complaint until fully paid and b) for attorneys fees of P30,000.00. Since Grey impliedly admitted3
having no authority on his own to grant Layson the credit accommodation and UCPBs guarantee
to pay for the fertilizers she bought, the court found him subsidiarily liable for the principal
amount. PPI appealed the decision to the Court of Appeals (CA).
On March 22, 2007 the CA rendered a decision, reversing that of the RTC and declaring UCPB
jointly and severally liable with Layson for the latters obligation to PPI to the extent of
P200,000.00 covering the February 11, 1980 credit accommodation. The court deleted the award
for attorneys fees. As regard to the second and third pagares, the CA ruled that PPI failed to prove
the subsequent assignments. Essentially, the CA ruled
that Laysons pagares were in the nature of assignment of credit, consisting in the proceeds of the
loan that UCPB granted her. Since UCPB, acting through Grey, undertook to deliver those proceeds
to PPI in payment of the fertilizers she was going to buy, UCPB is bound by such undertaking.
UCPB brings the present petition for review of the CA decision.
Issues Presented
GREY
Manager
UCPB cannot be bound by Greys above undertaking since he appears to have made it in his
personal capacity. He signed it under his own name, not in UCPBs name or as its branch manager.
Indeed, the wordings of the undertaking do not at all make any allusion to UCPB.
Besides, by its tenor, Greys undertaking was a guarantee. It says, "payment unconditionally
guaranteed within sixty (60) days from Planters Products, Inc. Invoice date up to Pesos: Two
Hundred Thousand (P200,000.00) only." As it happens, bank guarantees are highly regulated
transactions under the law.6 They are undertakings that are not so casually issued by banks or by
their branch managers at the dorsal side of a clients promissory note as if an afterthought. A bank
guarantee is a contract that binds the bank and so may be entered into only under authority
granted by its board of directors. Such authority does not appear on any document. Indeed, PPI
had no right to expect branch manager Grey to issue one without such authorization.
Notably, the evidence shows that on February 11, 1980, claiming that UCPB had already approved
her loan of P200,000.00, Layson assigned all the proceeds of such loan to PPI in payment of
fertilizers she wanted to buy from it. For his part, Grey agreed to the assignment and, apparently
without authority from the bank, undertook to guarantee the payment of the pagares.
Notwithstanding this undertaking, however, Grey released the P200,000.00 proceeds of the loan to
Layson the next day, February 12, 1980. It is evident that Grey connived with Layson to lure PPI to
deliver to her fertilizers worth P200,000.00 on credit.
UCPB also adduced evidence that Grey lent Layson that P200,000.00 without proper authorization
from the bank.1wphi1 The authority the bank gave him for unilaterally extending unsecured loans
has a ceiling of P10,000.00 only. Grey needed under UCPBs Revised Branch Lending Authority7 the
unanimous approval8 of the Branch Credit Committee,9 of which he was only a member, before he
can grant a higher loan of the kind.
With UCPB absolved of any liability, the Court affirms the ruling of the RTC of Makati that finds
Layson primarily liable to PPI with the latter having the right of recourse to Grey in the event that it
could not recover from her. Importantly, Layson never denied her business dealings with PPI and
her receipt of PPIs fertilizer products. This admission cements her liability for the fertilizers she got
from it.
Two. The CA properly deleted the award of attorneys fees in favor of UCPB. Such fees may be
awarded when one was compelled to litigate and incurred expenses to protect his interests or
when the suit filed was baseless or when the defendant acted in bad faith in filing or impleading
the litigant. Here, however, PPI had good reason to implead UCPB since, after all, its branch
manager played a pivotal role in facilitating the anomalous transaction. Thus, it cannot be said that
PPI acted in bad faith in impleading the bank.
WHEREFORE, the Court GRANTS the petition, REVERSES the decision of the Court of Appeals in CAG.R. CV 67364 dated March 22, 2007, and REINSTATES in toto the decision of the Regional Trial
Court of Makati.
SO ORDERED.
G.R. Nos. 174941
ANTONIO
P.
SALENGA
February 1, 2012
and
NATIONAL
LABOR
RELATIONS
COMMISSION,
Petitioners,
vs.
COURT OF APPEALS and CLARK DEVELOPMENT CORPORATION, Respondents.
DECISION
SERENO, J.:
The present Petition for Certiorari under Rule 65 assails the Decision1 of the Court of Appeals (CA)
promulgated on 13 September 2005, dismissing the Complaint for illegal dismissal filed by
petitioner Antonio F. Salenga against respondent Clark Development Corporation (CDC). The
dispositive portion of the assailed Decision states:
WHEREFORE, premises considered, the original and supplemental petitions are GRANTED. The
assailed resolutions of the National Labor Relations Commission dated September 10, 2003 and
January 21, 2004 are ANNULLED and SET ASIDE. The complaint filed by Antonio B. Salenga against
Clark Development is DISMISSED. Consequently, Antonio B. Salenga is ordered to restitute to Clark
Development Corporation the amount of P3,222,400.00, which was received by him as a
consequence of the immediate execution of said resolutions, plus interest thereon at the rate of
6% per annum from date of
such receipt until finality of this judgment, after which the interest shall be at the rate of 12% per
annum until said amount is fully restituted.
SO ORDERED.2
The undisputed facts are as follows:
On 22 September 1998, President/Chief Executive Officer (CEO) Rufo Colayco issued an Order
informing petitioner that, pursuant to the decision of the board of directors of respondent CDC, the
position of head executive assistant the position held by petitioner was declared redundant.
Petitioner received a copy of the Order on the same day and immediately went to see Colayco. The
latter informed him that the Order had been issued as part of the reorganization scheme approved
by the board of directors. Thus, petitioners employment was to be terminated thirty (30) days
from notice of the Order.
On 17 September 1999, petitioner filed a Complaint for illegal dismissal with a claim for
reinstatement and payment of back wages, benefits, and moral and exemplary damages against
respondent CDC and Colayco. The Complaint was filed with the National Labor Relations
Commission-Regional Arbitration Branch (NLRC-RAB) III in San Fernando, Pampanga. In defense,
respondents, represented by the Office of the Government Corporate Counsel (OGCC), alleged that
the NLRC had no jurisdiction to entertain the case on the ground that petitioner was a corporate
officer and, thus, his dismissal was an intra-corporate matter falling properly within the jurisdiction
of the Securities and Exchange Commission (SEC).
On 29 February 2000, labor arbiter (LA) Florentino R. Darlucio issued a Decision3 in favor of
petitioner Salenga. First, the LA held that the NLRC had jurisdiction over the Complaint, considering
that petitioner was not a corporate officer but a managerial employee. He held the position of head
executive assistant, categorized as a Job Level 12 position, not subject to election or appointment
by the board of directors.
Second, the LA pointed out that respondent CDC and Colayco failed to establish a valid cause for
the termination of petitioners employment. The evidence presented by respondent CDC failed to
show that the position of petitioner was superfluous as to be classified "redundant." The LA further
pointed out that respondent corporation had not disputed the argument of petitioner Salenga that
his position was that of a regular employee. Moreover, the LA found that petitioner had not been
accorded the right to due process. Instead, the latter was dismissed without the benefit of an
explanation of the grounds for his termination, or an opportunity to be heard and to defend
himself.
Finally, considering petitioners reputation and contribution as a government employee for 40
years, the LA awarded moral damages amounting to P2,000,000 and exemplary damages of
P500,000. The dispositive portion of the LAs Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring respondent Clark
Development Corporation and Rufo Colayco guilty of illegal dismissal and for which they are
ordered, as follows:
1. To reinstate complainant to his former or equivalent position without loss of seniority rights and
privileges;
2. To pay complainant his backwages reckoned from the date of his dismissal on September 22,
1998 until actual reinstatement or merely reinstatement in the payroll which as of this date is in
the amount of P722,400.00;
3. To pay complainant moral damages in the amount of P2,000,000.00; and,
4. To pay complainant exemplary damages in the amount of P500,000.00.
SO ORDERED.4
At the time the above Decision was rendered, respondent CDC was already under the leadership of
Sergio T. Naguiat. When he received the Decision on 10 March 2000, he subsequently instructed
Atty. Monina C. Pineda, manager of the Corporate and Legal Services Department and concurrent
corporate board secretary, not to appeal the Decision and to so inform the OGCC.5
Despite these instructions, two separate appeals were filed before LA Darlucio on 20 March 2000.
One appeal6 was from the OGCC on behalf of respondent CDC and Rufo Colayco. The OGCC
reiterated its allegation that petitioner was a corporate officer, and that the termination of his
employment was an intra-corporate matter. The Memorandum of Appeal was verified and certified
by Hilana Timbol-Roman, the executive vice president of respondent CDC. The Memorandum was
accompanied by a UCPB General Insurance Co., Inc. supersedeas bond covering the amount due to
petitioner as adjudged by LA Darlucio. Timbol-Roman and OGCC lawyer Roy Christian Mallari also
executed on 17 March 2000 a Joint Affidavit of Declaration wherein they swore that they were the
"respective authorized representative and counsel" of respondent corporation. However, the
Memorandum of Appeal and the Joint Affidavit of Declaration were not accompanied by a board
resolution from respondents board of directors authorizing either Timbol-Roman or Atty. Mallari, or
both, to pursue the case or to file the appeal on behalf of respondent.
It is noteworthy that Naguiat, who was president/CEO of respondent CDC from 3 February 2000 to
5 July 2000, executed an Affidavit on 20 March 2002,7 wherein he stated that without his
knowledge, consent or approval, Timbol-Roman and Atty. Mallari filed the above-mentioned appeal.
He further alleged that their statements were false.
The second appeal, meanwhile, was filed by former CDC President/CEO Rufo Colayco. Colayco
alleged that petitioner was dismissed not on 22 September 1998, but twice on 9 March 1999 and
23 March 1999. The dismissal was allegedly approved by respondents CDC board of directors
pursuant to a new organizational structure. Colayco likewise stated that he had posted a
supersedeas bond the same bond taken out by Timbol-Roman issued by the UCPB General
Insurance Co. dated 17 March 2000 in order to secure the monetary award, exclusive of moral and
exemplary damages.
Petitioner thereafter opposed the two appeals on the grounds that both appellants, respondent
CDC as allegedly represented by Timbol-Roman and Atty. Mallari and Rufo Colayco had failed to
observe Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure; and that appellants had not been
authorized by respondents board of directors to represent the corporation and, thus, they were
not the "employer" whom the Rules referred to. Petitioner also alleged that appellants failed to
refute the findings of LA Darlucio in the previous Decision.
In the meantime, while the appeal was pending, on 19 October 2000, respondents board
chairperson and concurrent President/CEO Rogelio L. Singson ordered the reinstatement of
petitioner to the latters former position as head executive assistant, effective 24 October 2000.8
On 28 May 2001, respondent CDCs new President/CEO Emmanuel Y. Angeles issued a
Memorandum,
which
offered
all
managers
of
respondent
corporation
an
early
separation/redundancy program. Those who wished to avail themselves of the program were to be
given the equivalent of their 1.25-month basic salary for every year of service and leave credits
computed on the basis of the same 1.25-month equivalent of their basic salary.9
In August 2001, respondent CDC offered another retirement plan granting higher benefits to the
managerial employees. Thus, on 12 September 2001, petitioner filed an application for the early
retirement program, which Angeles approved on 3 December 2001.
Meanwhile, in the proceedings of the NLRC, petitioner received on 12 September 2001 its 30 July
2001 Decision10 on the appeal filed by Timbol-Roman and Colayco. It is worthy to note that the
said Decision referred to the reports of reviewer arbiters Cristeta D. Tamayo and Thelma M.
Concepcion, who in turn found that petitioner Salenga was a corporate officer of CDC.
Nevertheless, the First Division of the NLRC upheld LA Darlucios ruling that petitioner Salenga was
indeed a regular employee. It also found that redundancy, as an authorized cause for dismissal,
has not been sufficiently proven, rendering the dismissal illegal. However, the NLRC held that the
award of exemplary and moral damages were unsubstantiated. Moreover, it also dropped Colayco
as a respondent to the case, since LA Darlucio had failed to provide any ground on which to anchor
issue arose with regard to the computation of the retirement benefits of petitioner. Respondent
CDC did not immediately give his requested retirement benefits, pending clarification of the
computation of these benefits. He claimed that the computation of his retirement benefits should
also include the forty (40) years he had been in government service in accordance with Republic
Act No. (R.A.) 8291, or the GSIS Act, and should not be limited to the length of his employment
with respondent corporation only, as the latter insisted.
In a letter dated 14 March 2003, petitioner Salengas counsel wrote to the board of directors of
respondent to follow up the payment of the retirement benefits allegedly due to petitioner.14
Pursuant to the NLRCs dismissal of the Complaint of petitioner Salenga, Angeles subsequently
denied the formers request for his retirement benefits, to wit:15
Please be informed that we cannot favorably grant your clients claim for retirement benefits
considering that Clark Development Corporation's dismissal of Mr. Antonio B. Salenga had been
upheld by the National Labor Relations Commission through a Resolution dated December 5,
2002...
xxx
xxx
xxx
As it is, the said Resolution dismissed the Complaint filed by Mr. Salenga for being without merit.
Consequently, he is not entitled to receive any retirement pay from the corporation.
Meanwhile, petitioner Salenga filed a second Motion for Reconsideration of the 5 December 2002
Resolution of the NLRC, reiterating his claim that it should not have entertained the imperfect
appeal, absent a proper verification and certification against forum-shopping from the duly
authorized representative of respondent CDC. Without that authority, neither could the OGCC act
on behalf of the corporation.
The OGCC, meanwhile, resurrected its old defense that the NLRC had no jurisdiction over the case,
because petitioner Salenga was a corporate officer.
The parties underwent several hearings before the NLRC First Division. During these times,
petitioner Salenga demanded from the OGCC to present a board resolution authorizing it or any
other person to represent the corporation in the proceedings. This, the OGCC failed to do.
After giving due course to the Motion for Reconsideration filed by petitioner Salenga, the NLRC
issued a Resolution16 on 10 September 2003, partially granting the motion. This time, the First
Division of the NLRC held that, absent a board resolution authorizing Timbol-Roman to file the
appeal on behalf of respondent CDC, the appeal was not perfected and was thus a mere scrap of
paper. In other words, the NLRC had no jurisdiction over the appeal filed before it.
The NLRC further held that respondent CDC had failed to show that petitioner Salengas dismissal
was pursuant to a valid corporate reorganization or board resolution. It also deemed respondent
estopped from claiming that there was indeed a redundancy, considering that petitioner Salenga
had been reinstated to his position as head executive assistant. While it granted the award of
moral damages, it nevertheless denied exemplary damages. Thus, the dispositive portion of its
Decision reads:
WHEREFORE, premises considered, the complainants Motion for Reconsideration is GRANTED and
We set aside our Resolution of December 5, 2002. The Decision of the Labor Arbiter dated February
29, 2000 is REINSTATED with the MODIFICATION that:
1.) Being a nominal party, respondent Rufo Colayco is declared to be not jointly and severally liable
with respondent Clark Development Corporation;
2.) Respondent Clark Development Corporation is ordered to pay the complainant his full
backwages and other monetary claims to which he is entitled under the decision of the Labor
Arbiter;
3.) Respondent CDC is likewise ordered to pay the complainant moral and exemplary damages as
provided under the Labor Arbiters Decision; and
4.) All other money claims are DENIED for lack of merit.
In the meantime, respondent CDC is ordered to pay the complainant his retirement benefits
amounts allegedly due him, including the award made by LA Darlucio. On 12 March 2002,
respondent CDC had issued a check amounting to P852,916.29, representing petitioners
retirement pay and terminal pay. Meanwhile, on 2 April 2004, P3,254,120 representing the initial
award was debited from the account of respondent CDC.
On 7 February 2005, respondent CDC filed a Motion31 once again asking the CA to issue a writ of
preliminary injunction in the light of a scheduled 14 February 2005 conference called by LA
Mariano Bactin, who had taken over the case from LA Isorena.
At the 14 February 2005 hearing, the parties failed to reach an amicable settlement and were thus
required to submit their relevant pleadings and documents in support of their respective cases.
On 16 February 2005, the CA issued a Resolution32 admitting the Supplemental Petition filed by
respondent, but denying the prayer for the issuance of an injunctive writ.
Thereafter, on 8 March 2005, LA Bactin issued an Order33 resolving the Omnibus Motion filed by
petitioner Salenga for the recomputation of the monetary claims due him. In the Order, LA Bactin
denied petitioners Motion for the recomputation of the award of back wages, benefits, allowances
and privileges based on the 29 February 2000 Decision of LA Darlucio. LA Bactin held that since
the Decision had become final and executory, he no longer had jurisdiction to amend or to alter
the judgment.
Anent the second issue of the computation of retirement benefits, LA Bactin also denied the claim
of petitioner Salenga, considering that the latters retirement benefits had already been paid. The
LA, however, did not rule on whether petitioner was entitled to retirement benefits, either under
the Government Service Insurance System (GSIS) or under the Social Security System (SSS), and
held that this issue was beyond the expertise and jurisdiction of a LA.
Petitioner Salenga thereafter appealed to the NLRC, which granted the appeal in a Resolution34
dated 22 July 2005. First, it was asked to resolve the issue of the propriety of having the Laguesma
Law Office represent respondent CDC in the proceedings before the LA. The said law firm entered
its appearance as counsel for respondent during the pre-execution conference/hearing on 1
October 2004. On this issue, the NLRC held that respondent corporations legal department, which
had previously been representing the corporation, was not validly substituted by the Laguesma
Law Office. In addition, the NLRC held that respondent had failed to comply with Memorandum
Circular No. 9, Series of 1998, which strictly prohibits the hiring of lawyers of private law firms by
GOCCs without the prior written conformity and acquiescence of the Office of Solicitor General, as
the case may be, and the prior written concurrence of the Commission on Audit (COA). Thus, the
NLRC held that all actions and submissions undertaken by the Laguesma Law Office on behalf of
respondent were null and void.
The second issue raised before the NLRC was whether LA Bactin acted without jurisdiction in
annulling and setting aside the formers final and executory judgment contained in its 10
September 2003 Resolution, wherein it held that the appeal had not been perfected, absent the
necessary board resolution allowing or authorizing Timbol-Roman and Atty. Mallari to file the
appeal. On this issue, the NLRC stated:
The final and executory judgment in this case is clearly indicated in the dispositive portion of Our
Resolution
promulgated
on
September
10,
2003
GRANTING
complainants
motion
for
reconsideration, SETTING ASIDE Our Resolution of December 5, 2002, and REINSTATING the
Decision of the Labor Arbiter dated February 29, 2000 with the following modification[s]: (1)
declaring respondent Rufo Colayco not jointly and severally liable with respondent Clark
Development Corporation; (2) ordering respondent CDC to pay the complainant his full backwages
and other monetary claims to which he is entitled under the decision of the Labor Arbiter; (3)
ordering respondent CDC to pay complainant moral and exemplary damages as provided under the
Labor Arbiters Decision; and (4) ordering respondent CDC to pay the complainant his retirement
benefits without further delay. This was entered in the Book of Entry of Judgment as final and
executory effective as of February 2, 2004.
Implementing this final and executory judgment, Arbiter Isorena issued an Order dated May 24,
2004, DENYING respondents Motion to Quash the Writ of Execution dated March 22, 2004,
correctly stating thusly:
"Let it be stressed that once a decision has become final and executory, it becomes the ministerial
duty of this Office to issue the corresponding writ of execution. The rationale behind it is based on
the fact that the winning party has suffered enough and it is the time for him to enjoy the fruits of
his labor with dispatch. The very purpose of the pre-execution conference is to explore the
possibility for the parties to arrive at an amicable settlement to satisfy the judgment award
speedily, not to delay or prolong its implementation."
Thus, when Arbiter Bactin, who took over from Arbiter Isorena upon the latters filing for leave of
absence due to poor health in January 2005, issued the appealed Order nullifying, instead of
implementing, the final and executory judgment of this Commission, the labor arbiter a quo acted
WITHOUT JURISDICTION.35
xxx
xxx
xxx
WHEREFORE, premises considered, the appeal of herein complainant is hereby GRANTED, and We
declare NULL AND VOID the appealed Order of March 8, 2005 and SET ASIDE said Order; We direct
the immediate issuance of the corresponding Alias Writ of Execution to enforce the final and
executory judgment of this Commission as contained in Our September 10, 2003 Resolution.
SO ORDERED.36
Unwilling to accept the above Resolution of the NLRC, the Laguesma Law Office filed a Motion for
Reconsideration dated 29 August 2005 with the NLRC. Again, the motion lacked proper verification
and certification against non-forum shopping.
In the meantime, the OGCC also filed with the CA a Motion for the Issuance of a Writ of Preliminary
Injunction dated 30 August 200537 against the NLRCs 22 July 2005 Resolution. The OGCC alleged
that the issues in the Resolution addressed monetary claims that were raised by petitioner Salenga
only in his Omnibus Motion dated 7 May 2004 or after the issuance of the 10 September 2003
Decision of LA Darlucio. Thus, the OGCC insisted that the NLRC had no jurisdiction over the issue,
for the matter was still pending with the CA.
The OGCC likewise filed another Motion for Reconsideration38 dated 31 August 2005 with the
NLRC. The OGCC maintained that it was only acting in a collaborative manner with the legal
department of respondent CDC, for which the former remained the lead counsel. The OGCC
reiterated that, as the statutory counsel of GOCCs, it did not need authorization from them to
maintain a case, and thus, LA Bactin had jurisdiction over that case. Finally, it insisted that
petitioner Salenga was not covered by civil service laws on retirement, the CDC having been
created under the Corporation Code.
On 13 September 2005, the CA promulgated the assailed Decision. Relying heavily on the reports
of Reviewer Arbiters Cristeta D. Tamayo and Thelma M. Concepcion, it held that petitioner Salenga
was a corporate officer. Thus, the issue before the NLRC was an intra-corporate dispute, which
should have been lodged with the Securities and Exchange Commission (SEC), which had
jurisdiction over the case at the time the issue arose. The CA likewise held that the NLRC
committed grave abuse of discretion when it allowed and granted petitioner Salengas second
Motion for Reconsideration, which was a prohibited pleading.
Petitioner subsequently filed a Motion for Reconsideration on 7 October 2005, alleging that the CA
committed grave abuse of discretion in reconsidering the findings of fact, which had already been
found to be conclusive against respondent; and in taking cognizance of the latters Petition which
had not been properly verified.
The CA, finding no merit in petitioners allegations, denied the motion in its 17 August 2006
Resolution.
On 4 September 2006, petitioner Salenga filed a Motion for Extension of Time to File a Petition for
Review on Certiorari under Rule 45, praying for an extension of fifteen (15) days within which to
file the Petition. The motion was granted through this Courts Resolution dated 13 September
2006. The case was docketed as G.R. No. 174159.
On 25 September 2006, however, petitioner filed a Manifestation39 withdrawing the motion. He
manifested before us that he would instead file a Petition for Certiorari under Rule 65, which was
eventually docketed as G.R. No. 174941. On 7 July 2008, this Court, through a Resolution,
considered the Petition for Review in G.R. No. 174159 closed and terminated.
Petitioner raises the following issues for our resolution:
I.
The Court of Appeals acted without jurisdiction in reviving and re-litigating the factual issues and
matters of petitioners illegal dismissal and retirement benefits.
II.
The Court of Appeals had no jurisdiction to entertain the original Petition as a remedy for an appeal
that had actually not been filed, absent a board resolution allowing the appeal.
III.
The Court of Appeals acted with grave abuse of discretion when it did the following:
a. It failed to dismiss the original and supplemental Petitions despite the lack of a board resolution
authorizing the filing thereof.
b. It failed to dismiss the Petitions despite the absence of a proper verification and certification
against non-forum shopping.
c. It failed to dismiss the Petitions despite respondents failure to inform it of the pending
proceedings before the NLRC involving the same issues.
d. It failed to dismiss the Petitions on the ground of forum shopping.
e. It did not dismiss the Petition when respondent failed to attach to it certified true copies of the
assailed NLRC 30 July 2001 Decision; 10 September 2003 Resolution; 21 January 2004 Resolution;
copies of material portions of the record as are referred to therein; and copies of pleadings and
documents relevant and pertinent thereto.
f. It did not act on respondents failure to serve on the Office of the Solicitor General a copy of the
pleadings, motions and manifestations the latter had filed before the Court of Appeals, as well as
copies of pertinent court resolutions and decisions, despite the NLRC being a party to the present
case.
g. It disregarded the findings of fact and conclusions of law arrived at by LA Darlucio, subjecting
them to a second analysis and evaluation and supplanting them with its own findings.
h. It granted the Petition despite respondents failure to show that the NLRC committed grave
abuse of discretion in rendering the latters 30 July 2001 Decision, 10 September 2003 Resolution
and 21 January 2004 Resolution.
i. It dismissed the complaint for illegal dismissal and ordered the restitution of the P3,222,400
already awarded to petitioner, plus interest thereon.
In its defense, private respondent insists that the present Petition for Certiorari under Rule 65 is an
improper remedy to question the Decision of the CA, and thus, the case should be dismissed
outright. Nevertheless, it reiterates that private petitioner was a corporate officer whose
employment was dependent on board action. As such, private petitioners employment was an
intra-corporate controversy cognizable by the SEC, not the NLRC. Private respondent also asserts
that it has persistently sought the reversal of LA Darlucios Decision by referring to the letters sent
to the OGCC, as well as Verification and Certificate against forum-shopping. However, these
documents were signed only during Angeles time as private respondents president/CEO, and not
of the former presidents. Moreover, private respondent contends that private petitioner is not
covered by civil service laws, thus, his years in government service are not creditable for the
purpose of determining the total amount of retirement benefits due him. In relation to this, private
respondent enumerates the amounts already paid to private petitioner.
The Courts Ruling
The Petition has merit.
This Court deigns it proper to collapse the issues in this Petition to simplify the matters raised in
what appears to be a convoluted case. First, we need to determine whether the NLRC and the CA
committed grave abuse of discretion amounting to lack or excess of jurisdiction, when they
entertained respondents so-called appeal of the 29 February 2000 Decision rendered by LA
Darlucio.
Second, because of the turn of events, a second issue the computation of retirement benefits
cropped up while the first case for illegal dismissal was still pending. Although the second issue
may be considered as separate and distinct from the illegal dismissal case, the issue of the proper
computation of the retirement benefits was nevertheless considered by the relevant administrative
bodies, adding more confusion to what should have been a simple case to begin with.
The
to
NLRC
entertain
Timbol-Roman
had
no
the
appeal
and
jurisdiction
filed
by
former
complainant correctly postulated that he was not elected to his position and his tenure is not
dependent upon the whim of the boardxxx
xxx
xxx
xxx
Anent the second issue, this Office finds and so holds that respondents have miserably failed to
show or establish the valid cause in terminating the services of complainant.
xxx
xxx
xxx
In the case at bar, respondents failed to adduce any evidence showing that the position of Head
Executive Assistant is superfluous. In fact, they never disputed the argument advanced by
complainant that the position of Head Executive Assistant was classified as a regular position in
the Position Classification Study which is an essential component of the Organizational Study that
had been approved by the CDC board of directors in 1995 and still remains intact as of the end of
1998. Likewise, studies made since 1994 by various management consultancy groups have
determined the need for the said position in the Office of the President/CEO in relation to the
vision, mission, plans, programs and overall corporate goals and objectives of respondent CDC.
There is no evidence on record to show that the position of Head Executive Assistant was abolished
by the Board of Directors in its meeting held in the morning of September 22, 1998. The minutes of
the meeting of the board on said date, as well as its other three meetings held in the month of
September 1998 (Annexes "B", "C", "D" and "E", Complainants Reply), clearly reveal that no
abolition or reorganization plan was discussed by the board. Hence, the ground of redundancy is
merely a device made by respondent Colayco in order to ease out the complainant from the
respondent corporation.
Moreover, the other ground for complainants dismissal is unclear and unknown to him as
respondent did not specify nor inform the complainant of the alleged recent developmentsxxx
This Office is also of the view that complainant was not accorded his right to due process prior to
his termination. The law requires that the employer must furnish the worker sought to be
dismissed with two (2) written notices before termination may be validly effected: first, a notice
apprising the employee of the particular acts or omissions for which his dismissal is sought and,
second, a subsequent notice informing the employee of the decision to dismiss him. In the case at
bar, complainant was not apprised of the grounds of his termination. He was not given the
opportunity to be heard and defend himselfxxx40
The OGCC, representing respondent CDC and former CEO Colayco separately appealed from the
above Decision. Both alleged that they had filed the proper bond to cover the award granted by LA
Darlucio.
It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against
forum-shopping by the parties-in-interest themselves. In the case at bar, the parties-in-interest are
petitioner Salenga, as the employee, and respondent Clark Development Corporation as the
employer.
A corporation can only exercise its powers and transact its business through its board of directors
and through its officers and agents when authorized by a board resolution or its bylaws. The power
of a corporation to sue and be sued is exercised by the board of directors. The physical acts of the
corporation, like the signing of documents, can be performed only by natural persons duly
authorized for the purpose by corporate bylaws or by a specific act of the board. The purpose of
verification is to secure an assurance that the allegations in the pleading are true and correct and
have been filed in good faith.41
Thus, we agree with petitioner that, absent the requisite board resolution, neither Timbol-Roman
nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly
on behalf of respondent corporation, may be considered as the "appellant" and "employer"
referred to by Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure, which state:
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. - (a) The Appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be verified by appellant himself in
accordance with Section 4, Rule 7 of the Rules of Court, with proof of payment of the required
appeal fee and the posting of a cash or surety bond as provided in Section 6 of this Rule; shall be
accompanied by memorandum of appeal in three (3) legibly typewritten copies which shall state
the grounds relied upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, resolution or order and a
certificate of non-forum shopping with proof of service on the other party of such appeal. A mere
notice of appeal without complying with the other requisites aforestated shall not stop the running
of the period for perfecting an appeal.
(b) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal
was filed, his answer or reply to appellant's memorandum of appeal, not later than ten (10)
calendar days from receipt thereof. Failure on the part of the appellee who was properly furnished
with a copy of the appeal to file his answer or reply within the said period may be construed as a
waiver on his part to file the same.
(c) Subject to the provisions of Article 218, once the appeal is perfected in accordance with these
Rules, the Commission shall limit itself to reviewing and deciding specific issues that were elevated
on appeal.
SECTION 5. APPEAL FEE. -The appellant shall pay an appeal fee of one hundred fifty pesos
(P150.00) to the Regional Arbitration Branch or Regional Office, and the official receipt of such
payment shall be attached to the records of the case.
SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a cash or
surety bond. The appeal bond shall either be in cash or surety in an amount equivalent to the
monetary award, exclusive of damages and attorneys fees.
In case of surety bond, the same shall be issued by a reputable bonding company duly accredited
by the Commission or the Supreme Court, and shall be accompanied by:
(a) a joint declaration under oath by the employer, his counsel, and the bonding company,
attesting that the bond posted is genuine, and shall be in effect until final disposition of the case.
(b) a copy of the indemnity agreement between the employer-appellant and bonding company;
and
(c) a copy of security deposit or collateral securing the bond.
A certified true copy of the bond shall be furnished by the appellant to the appellee who shall
verify the regularity and genuineness thereof and immediately report to the Commission any
irregularity.
Upon verification by the Commission that the bond is irregular or not genuine, the Commission
shall cause the immediate dismissal of the appeal.
No motion to reduce bond shall be entertained except on meritorious grounds and upon the
posting of a bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding
paragraph shall not stop the running of the period to perfect an appeal. (Emphasis supplied)
The OGCC failed to produce any valid authorization from the board of directors despite petitioner
Salengas repeated demands. It had been given more than enough opportunity and time to
produce the appropriate board resolution, and yet it failed to do so. In fact, many of its pleadings,
representations, and submissions lacked board authorization.
We cannot agree with the OGCCs attempt to downplay this procedural flaw by claiming that, as
the statutorily assigned counsel for GOCCs, it does not need such authorization. In ConstantinoDavid v. Pangandaman-Gania,42 we exhaustively explained why it was necessary for government
agencies or instrumentalities to execute the verification and the certification against forumshopping through their duly authorized representatives. We ruled thereon as follows:
But the rule is different where the OSG is acting as counsel of record for a government agency. For
in such a case it becomes necessary to determine whether the petitioning government body has
authorized the filing of the petition and is espousing the same stand propounded by the OSG.
Verily, it is not improbable for government agencies to adopt a stand different from the position of
the OSG since they weigh not just legal considerations but policy repercussions as well. They have
their respective mandates for which they are to be held accountable, and the prerogative to
determine whether further resort to a higher court is desirable and indispensable under the
circumstances.
The verification of a pleading, if signed by the proper officials of the client agency itself, would
fittingly serve the purpose of attesting that the allegations in the pleading are true and correct and
not the product of the imagination or a matter of speculation, and that the pleading is filed in good
faith. Of course, the OSG may opt to file its own petition as a "People's Tribune" but the
representation would not be for a client office but for its own perceived best interest of the State.
The case of Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc., is not also a precedent
that may be invoked at all times to allow the OSG to sign the certificate of non-forum shopping in
place of the real party-in-interest. The ruling therein mentions merely that the certification of nonforum shopping executed by the OSG constitutes substantial compliance with the rule since "the
OSG is the only lawyer for the petitioner, which is a government agency mandated under Section
35, Chapter 12, Title III, Book IV, of the 1987 Administrative Code (Reiterated under Memorandum
Circular No. 152 dated May 17, 1992) to be represented only by the Solicitor General."
By its very nature, "substantial compliance" is actually inadequate observance of the requirements
of a rule or regulation which are waived under equitable circumstances to facilitate the
administration of justice there being no damage or injury caused by such flawed compliance. This
concept is expressed in the statement "the rigidity of a previous doctrine was thus subjected to an
inroad under the concept of substantial compliance." In every inquiry on whether to accept
"substantial compliance," the focus is always on the presence of equitable conditions to administer
justice effectively and efficiently without damage or injury to the spirit of the legal obligation.
xxx
xxx
xxx
The fact that the OSG under the 1987 Administrative Code is the only lawyer for a government
agency wanting to file a petition, or complaint for that matter, does not operate per se to vest the
OSG with the authority to execute in its name the certificate of non-forum shopping for a client
office. For, in many instances, client agencies of the OSG have legal departments which at times
inadvertently take legal matters requiring court representation into their own hands without the
intervention of the OSG. Consequently, the OSG would have no personal knowledge of the history
of a particular case so as to adequately execute the certificate of non-forum shopping; and even if
the OSG does have the relevant information, the courts on the other hand would have no way of
ascertaining the accuracy of the OSG's assertion without precise references in the record of the
case. Thus, unless equitable circumstances which are manifest from the record of a case prevail, it
becomes necessary for the concerned government agency or its authorized representatives to
certify for non-forum shopping if only to be sure that no other similar case or incident is pending
before any other court.
We recognize the occasions when the OSG has difficulty in securing the attention and signatures of
officials in charge of government offices for the verification and certificate of non-forum shopping
of an initiatory pleading. This predicament is especially true where the period for filing such
pleading is non-extendible or can no longer be further extended for reasons of public interest such
as in applications for the writ of habeas corpus, in election cases or where sensitive issues are
involved. This quandary is more pronounced where public officials have stations outside Metro
Manila.
But this difficult fact of life within the OSG, equitable as it may seem, does not excuse it from
wantonly executing by itself the verification and certificate of non-forum shopping. If the OSG is
compelled by circumstances to verify and certify the pleading in behalf of a client agency, the OSG
should at least endeavor to inform the courts of its reasons for doing so, beyond instinctively citing
City Warden of the Manila City Jail v. Estrella and Commissioner of Internal Revenue v. S.C. Johnson
and Son, Inc.
Henceforth, to be able to verify and certify an initiatory pleading for non-forum shopping when
acting as counsel of record for a client agency, the OSG must (a) allege under oath the
circumstances that make signatures of the concerned officials impossible to obtain within the
period for filing the initiatory pleading; (b) append to the petition or complaint such authentic
document to prove that the party-petitioner or complainant authorized the filing of the petition or
complaint and understood and adopted the allegations set forth therein, and an affirmation that no
action or claim involving the same issues has been filed or commenced in any court, tribunal or
quasi-judicial agency; and, (c) undertake to inform the court promptly and reasonably of any
change in the stance of the client agency.
Anent the document that may be annexed to a petition or complaint under letter (b) hereof, the
letter-endorsement of the client agency to the OSG, or other correspondence to prove that the
subject-matter of the initiatory pleading had been previously discussed between the OSG and its
client, is satisfactory evidence of the facts under letter (b) above. In this exceptional situation
where the OSG signs the verification and certificate of non-forum shopping, the court reserves the
authority to determine the sufficiency of the OSG's action as measured by the equitable
considerations discussed herein. (Emphasis ours, italics provided)
The ruling cited above may have pertained only to the Office of the Solicitor Generals
representation of government agencies and instrumentalities, but we see no reason why this
doctrine cannot be applied to the case at bar insofar as the OGCC is concerned.
While in previous decisions we have excused transgressions of these rules, it has always been in
the context of upholding justice and fairness under exceptional circumstances. In this case,
though, respondent failed to provide any iota of rhyme or reason to compel us to relax these
requirements. Instead, what is clear to us is that the so-called appeal was done against the
instructions of then President/CEO Naguiat not to file an appeal. Timbol-Roman, who signed the
Verification
and
the
Certification
against
forum-shopping,
was
not
even
an
authorized
representative of the corporation. The OGCC was equally remiss in its duty. It ought to have
advised respondent corporation, the proper procedure for pursuing an appeal. Instead, it
maintained the appeal and failed to present any valid authorization from respondent corporation
even after petitioner had questioned OGCCs authority all throughout the proceedings. Thus, it is
evident that the appeal was made in bad faith.
The unauthorized and overzealous acts of officials of respondent CDC and the OGCC have led to a
waste of the governments time and resources. More alarmingly, they have contributed to the
injustice done to petitioner Salenga. By taking matters into their own hands, these officials let the
case drag on for years, depriving him of the enjoyment of property rightfully his. What should have
been a simple case of illegal dismissal became an endless stream of motions and pleadings.
Time and again, we have said that the perfection of an appeal within the period prescribed by law
is jurisdictional, and the lapse of the appeal period deprives the courts of jurisdiction to alter the
final judgment.43 Thus, there is no other recourse but to respect the findings and ruling of the
labor arbiter. Clearly, therefore, the CA committed grave abuse of discretion in entertaining the
Petition filed before it after the NLRC had dismissed the case based on lack of jurisdiction. The
assailed CA Decision did not even resolve petitioner Salengas consistent and persistent claim that
the NLRC should not have taken cognizance of the appeal in the first place, absent a board
resolution. Thus, LA Darlucios Decision with respect to the liability of the corporation still stands.
However, we note from that Decision that Rufo Colayco was made solidarily liable with respondent
corporation. Colayco thereafter filed his separate appeal. As to him, the NLRC correctly held in its
30 July 2001 Decision that he may not be held solidarily responsible to petitioner. As a result, it
dropped him as respondent. Notably, in the case at bar, petitioner does not question that ruling.
Based on the foregoing, all other subsequent proceedings regarding the issue of petitioners
dismissal are null and void for having been conducted without jurisdiction. Thus, it is no longer
incumbent upon us to rule on the other errors assigned in the matter of petitioner Salengas
dismissal.
CDC is not under the civil service laws on retirement.
While the case was still persistently being pursued by the OGCC, a new issue arose when petitioner
Salenga reached retirement age: whether his retirement benefits should be computed according to
civil service laws.
To recall, the issue of how to compute the retirement benefits of petitioner was raised in his
Omnibus Motion dated 7 May 2004 filed before the NLRC after it had reinstated LA Darlucios
original Decision. The issue was not covered by petitioners Complaint for illegal dismissal, but was
a different issue altogether and should have been properly addressed in a separate Complaint. We
cannot fault petitioner, though, for raising the issue while the case was still pending with the NLRC.
If it were not for the "appeal" undertaken by Timbol-Roman and the OGCC through Atty. Mallari, the
issue would have taken its proper course and would have been raised in a more appropriate time
and manner. Thus, we deem it proper to resolve the matter at hand to put it to rest after a decade
of litigation.
Petitioner Salenga contends that respondent CDC is covered by the GSIS Law. Thus, he says, the
computation of his retirement benefits should include all the years of actual government service,
starting from the original appointment forty (40) years ago up to his retirement.
Respondent CDC owes its existence to Executive Order No. 80 issued by then President Fidel V.
Ramos. It was meant to be the implementing and operating arm of the Bases Conversion and
Development Authority (BCDA) tasked to manage the Clark Special Economic Zone (CSEZ).
Expressly, respondent was formed in accordance with Philippine corporation laws and existing
rules and regulations promulgated by the SEC pursuant to Section 16 of Republic Act (R.A.)
7227.44 CDC, a government-owned or -controlled corporation without an original charter, was
incorporated under the Corporation Code. Pursuant to Article IX-B, Sec. 2(1), the civil service
embraces only those government-owned or -controlled corporations with original charter. As such,
respondent CDC and its employees are covered by the Labor Code and not by the Civil Service
Law, consistent with our ruling in NASECO v. NLRC,45 in which we established this distinction.
Thus, in Gamogamo v. PNOC Shipping and Transport Corp.,46 we held:
Retirement results from a voluntary agreement between the employer and the employee whereby
the latter after reaching a certain age agrees to sever his employment with the former.
Since the retirement pay solely comes from Respondent's funds, it is but natural that Respondent
shall disregard petitioner's length of service in another company for the computation of his
retirement benefits.
Petitioner was absorbed by Respondent from LUSTEVECO on 1 August 1979. Ordinarily, his
creditable service shall be reckoned from such date. However, since Respondent took over the
shipping business of LUSTEVECO and agreed to assume without interruption all the service credits
of petitioner with LUSTEVECO, petitioner's creditable service must start from 9 November 1977
when he started working with LUSTEVECO until his day of retirement on 1 April 1995. Thus,
petitioner's creditable service is 17.3333 years.
We cannot uphold petitioner's contention that his fourteen years of service with the DOH should be
considered because his last two employers were government-owned and controlled corporations,
and fall under the Civil Service Law. Article IX(B), Section 2 paragraph 1 of the 1987 Constitution
states
Sec. 2. (1)The civil service embraces all branches, subdivisions, instrumentalities, and agencies of
the Government, including government-owned or controlled corporations with original charters.
It is not at all disputed that while Respondent and LUSTEVECO are government-owned and
controlled corporations, they have no original charters; hence they are not under the Civil Service
Law. In Philippine National Oil Company-Energy Development Corporation v. National Labor
Relations Commission, we ruled:
xxx "Thus under the present state of the law, the test in determining whether a governmentowned or controlled corporation is subject to the Civil Service Law are [sic] the manner of its
creation, such that government corporations created by special charter(s) are subject to its
provisions while those incorporated under the General Corporation Law are not within its
coverage." (Emphasis supplied)
Hence, petitioner Salenga is entitled to receive only his retirement benefits based only on the
number of years he was employed with the corporation under the conditions provided under its
retirement plan, as well as other benefits given to him by existing laws.1wphi1
WHEREFORE, in view of the foregoing, the Petition in G.R. No. 174941 is partially GRANTED. The
Decision of LA Darlucio is REINSTATED insofar as respondent corporations liability is concerned.
Considering that petitioner did not maintain the action against Rufo Colayco, the latter is not
solidarily liable with respondent Clark Development Corporation.
The case is REMANDED to the labor arbiter for the computation of petitioners retirement benefits
in accordance with the Social Security Act of 1997 otherwise known as Republic Act No. 8282,
deducting therefrom the sums already paid by respondent CDC. If any, the remaining amount shall
be subject to the legal interest of 6% per annum from the filing date of petitioners Omnibus
Motion on 11 May 2004 up to the time this judgment becomes final and executory. Henceforth, the
rate of legal interest shall be 12% until the satisfaction of judgment.
SO ORDERED.
COPPER
MINES,
INC.,
Petitioner,
vs.
DR. LUIS D. DIZON, Respondent.
DECISION
PEREZ, J.:
For review1 are the Decision2 dated 9 May 2008 and Resolution 3 dated 1 July
2008 of the Court of Appeals in CA-G.R. SP No. 99947. In the assailed
decision, the Court of Appeals declared as void ab initio petitioners
applications for Mineral Production Sharing Agreements (MPSA) but held as
valid a similar application of the respondent. The decision was a reversal of
the ruling4 of the Office of the President (OP) in O.P. Case No. 06-C-113 and a
reinstatement of the previous orders5 issued by the Secretary of the
Department of Environment and Natural Resources (DENR). The decretal
portion of the decision of the appellate court accordingly reads:6
WHEREFORE, the petition is GRANTED. The assailed decision dated
December 4, 2006 and resolution dated June 20, 2007 of the Office of the
President are hereby REVERSED and SET ASIDE. The orders dated December
29, 2005 and February 14, 2006 issued by the Secretary of the Department
of Environment and Natural Resources are REINSTATED.
The antecedents are as follows:
The 57 Mining Claims
On 13 November 1935, Celestino M. Dizon (Celestino) filed with the Office of
the Mining Recorder,7 Declarations of Location8 over fifty-seven (57) mining
claims in San Marcelino, Zambales. The 57 mining claims, with an aggregate
area of 513 hectares, were thereby recorded in the following manner:9
1. Twenty-nine (29) mining claims were registered in the name of
Celestino.
2. Twelve (12) mining claims were registered in the name of
Maria D. Dizon, the wife of
3. Eleven (11) mining claims were registered in the name of
Helen D. Dizon, a daughter of Celestino.
4. Three (3) mining claims were registered in the name of the
heirs of Eustaquio L. Dizon, who was the father of Celestino.
5. Two (2) mining claims were registered in the name of the heirs
of Tiburcia M. Dizon, who was the mother of Celestino.
In 1966, herein petitioner Dizon Copper-Silver Mines, Inc. was organized. 10
Among its incorporators were Celestino and his son, herein respondent Dr.
Luis D. Dizon.11
registered
claim-owners,
assigned
their
57
mining
claims
to
petitioner.12
On 6 September 1975, petitioner entered into an Operating Agreement13 with
Benguet Corporation14 (Benguet). In such agreement, petitioner authorized
Benguet to, among others, "explore, equip, develop and operate" the 57
mining claims.15
In 1977, Celestino died.
In 1978, the 57 mining claims became the subject of a mining lease
application16 with the Bureau of Mines. 17 Consequently, on 1 February 1980,
the government issued five (5) Mining Lease Contracts (MLCs) covering six
(6) out of the 57 mining claims. They are:18
1. MLC No. MRD-211 issued in favor of the heirs of Celestino;
2. MLC No. MRD-212 issued in favor of the heirs of Celestino;
3. MLC No. MRD-213 issued in favor of Maria D. Dizon;
4. MLC No. MRD-219 issued in favor of Helen D. Dizon;
5. MLC No. MRD-222 issued in favor of the heirs of Celestino.
The MLCs were issued for a term of twenty-five (25) years, or up to 31
January 2005.19
The MPSA Applications
On 4 July 1991, Benguet filed an MPSA application with the DENR. 20 The
application, designated as MPSA-P-III-16,21 seeks to place all existing mining
correct,
supplement
and
register
any
corrected,
supplemented,
filed
or
registered."
b. Letter dated 14 June 1991 of petitioner to Benguet, 60
which was appended in MPSA-P-III-16. In the said letter,
petitioner, thru its then president Mr. Juvencio D. Dizon,
signified its conformity with the proposal of Benguet to file
a production sharing agreement application covering the
57 mining claims.61
2. Benguet, by submitting the complete requirements for an
MPSA application in MPSA-P-III-16, fully complied with the
requirements of Sections 112 and 113 of Republic Act No. 7942.62
Thus, petitioner still has the preferential right over any other
similar applicants to pursue the area covered by the subject 57
mining claims.63
subject claims were actually issued by the government in the names of Maria
Dizon, Helen Dizon and the heirs of Celestinonot in favor of the petitioner. 72
Hence, such mining leases could not be included in MPSA-P-III-16 for possible
conversion into MPSAs without securing the individual consent of the
recognized lessees thereof. Needless to state, authorization by the petitioner
in connection with the mining claims covered by the MLCs, if there was any,
would not be material.
Second. With respect to the remaining 51 mining claims not under MLCs, this
Court finds absolutely nothing in the Operating Agreement between
petitioner and Benguet that can reasonably be construed as giving the latter
authority to file an MPSA application thereon. After perusal of the records,
this Court finds that the provisions of the Operating Agreement relied upon
by petitioner in arguing otherwise, were taken out of context:
1. Benguets authority "to acquire real rights" under Section
1.01(b) is actually limited only to such rights "as indicated in the
Development
Program"
of
the
Operating
Agreement. 73
Operating
Agreement
that
actually
requires
prior
under the term "major contracts" for the simple reason that it will
re-define the very relations between the owners of the existing
mining claims and the government with respect to such claims.
In connection with the foregoing, the Letter dated 14 June 1991,
appended in MPSA-P-III-16, cannot be considered as valid
authorization from petitioner. There was no showing that the
board of directors of petitioner approved of Benguets proposal to
file an MPSA application.
4. Neither can Section 9.04, which constituted Benguet as
attorney-in-fact
of
petitioner,
be
construed
as
sufficient
the concerned mining claims in consonance with Section 2, Article XII of the
Constitution.79 The policy introduced by the 1987 Constitution, therefore,
represents a significant shift in the hitherto existing relations between the
government and mining claimants. This considerable change in the former
system of mining leases under previous mining laws, in turn, makes it
difficult for this Court to fathom that petitioner and Benguet contemplated
the execution of MPSAs as part of their Operating Agreement. To hold
otherwise, would simply stretch the limits of reason and human foresight.
Accordingly, this Court agrees with the finding of the DENR and the Court of
Appeals that MPSA-P-III-16 was filed by Benguet without any valid
authorization and, therefore, cannot be considered as a valid MPSA
application.
Effect of the Invalidity of MPSA-P-III-16
In order to fully understand the effect of the invalidity of MPSA-P-III-16 on the
mining claims of the petitioner and its rights thereto, the relevant provisions
of Republic Act No. 7942 as well as its IRR must be considered.
In so far as the 6 mining claims under MLCs are concerned, Section 112 of
Republic Act No. 7942 applies. The provision provides for the non-impairment
and continued recognition of existing valid mining leases, which means that
the subject leases will remain valid until their expiration, i.e. on 31 January
2005.80
On the other hand, the 51 mining claims not covered by MLCs are subject to
Section 113 of Republic Act No. 7942. The said section gives "holders of
existing mining claims, lease or quarry applications" with "preferential rights
to enter into any mode of mineral agreement with the government" within
two (2) years from the promulgation of the rules and regulations
implementing said law.81
Section 113 was further clarified by Section 273 of the IRR 82 of Republic Act
No. 7942 and by DENR Memorandum Order (M.O.) No. 97-07. The pertinent
provisions of DENR M.O. 97-07 states:
Section 4. Date of Deadline Under Sections 272 and 273 of the IRR
Consistent with pertinent national policy, the September 13, 1997 deadline
under Section 272 of the IRR and the September 14, 1997 deadline under
Section 273 of the IRR, which fall on a Saturday and Sunday, respectively,
shall be imposed on September 15, 1997.
xxxx
Section 8. Claimants/Applicants Required to File Mineral Agreement
Only holders of mining claims and lease/quarry applications filed prior to the
effectivity of the Act which are valid and existing as defined in Section 5
hereof who have not filed any Mineral Agreement applications over areas
covered by such mining claims and lease/quarry applications are required to
file Mineral Agreement applications pursuant to Section 273 of the IRR on or
before September 15, 1997; Provided, that the holder of such a mining claim
or lease/quarry application involved in a mining dispute/ease shall instead
file on or before said deadline a Letter of Intent to file the necessary Mineral
Agreement application; Provided, further, That if the mining claim or
lease/quarry application is not determined to be invalid in the dispute/case,
the claimant or applicant shall have thirty (30) days from the final resolution
of the dispute/case to filed the necessary Mineral Agreement application;
Provided, finally, that failure by the claimant or applicant to file the
necessary Mineral Agreement application within said thirty (30)-day period
shall result in the abandonment of such claim or application, after which, any
area covered by the same shall be opened for Mining Applications.
Exploration
Corporation
v.
Macroasia
Corporation,
this
Court
jurisdiction.
Administrative
decisions
on
matter
within
the
III-03-05 was filed at a time when the 6 mining claims covered therein were
still under subsisting MLCs in favor of the Dizons 93 and, hence, still closed to
mining applications.94
In choosing to act favorably on MPSA-P-III-05-05, the DENR Secretary merely
exercised its rightful discretion to determine who among competing mining
applicants is more qualified for a mining agreement. This consideration,
aside from the fact that petitioners MPSA-P-III-03-05 covers areas still closed
to mining applications when it was filed, underscores the reasonableness of
the orders of the DENR Secretary. This Court finds itself heavy-handed to
disturb them.
WHEREFORE, the instant petition is DENIED. The appealed Decision dated 9
May 2008 and Resolution dated 1 July 2008 of the Court of Appeals in CAG.R. SP No. 99947 are hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
LUCILA V. JOSON,
Petitioners,
Present:
CARPIO, J.,
Chairperson,
- versus -
BRION,
PEREZ,
SERENO, and
REYES, JJ.
ALFREDO M. JOSON,
Promulgated:
Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
PEREZ, J.:
Respondent Alfredo M. Joson (Alfredo), on the other hand, was the General
Manager, incorporator, director and stockholder of petitioner corporation.
The controversy of this case arose from the following factual milieu:
Before petitioner corporation was officially incorporated,38 respondent
has already been engaged by petitioner Lucila, in her capacity as President
of Marc Marketing, Inc., to work as the General Manager of petitioner
corporation. It was formalized through the execution of a Management
Contract39 dated 16 January 1994 under the letterhead of Marc Marketing,
Inc.40 as petitioner corporation is yet to be incorporated at the time of its
execution. It was explicitly provided therein that respondent shall be entitled
to 30% of its net income for his work as General Manager. Respondent will
also be granted 30% of its net profit to compensate for the possible loss of
opportunity to work overseas.41
37
38
39
40
41
For the parties failure to settle the case amicably, the Labor Arbiter
required them to submit their respective position papers. Respondent
complied but petitioners opted to file a Motion to Dismiss grounded on the
Labor Arbiters lack of jurisdiction as the case involved an intra-corporate
controversy, which jurisdiction belongs to the SEC [now with the Regional
Trial Court (RTC)].51 Petitioners similarly raised therein the ground of
prescription of respondents monetary claim.
declaring
[respondents]
dismissal
from
1.
2.
3.
the
time
P21,600,000.00;
of
promulgation
amounted
to
4.
The
Labor
Arbiter
then
declared
respondents
dismissal
from
that
petitioners
failed
to
present
any
evidence
to
justify
respondents dismissal.
54
55
56
employment
without
valid
cause
and
without
due
process.
Nevertheless, it ordered the records of the case remanded to the NLRC for
the determination of the appropriate amount of monetary awards to be given
to respondent. The Court of Appeals, thus, decreed:
57
58
59
Petitioners are now before this Court with the following assignment of
errors:
I.
THE COURT OF APPEALS ERRED AND COMMITTED GRAVE ABUSE
OF
DISCRETION
JURISDICTION
IN
IN
DECIDING
RESOLVING
THAT
A
THE
PURELY
NLRC
HAS
THE
INTRA-CORPORATE
II.
ASSUMING,
GRATIS
ARGUENDO,
THAT
THE
NLRC
HAS
AND
CORPORATION].
III.
MARC
II
MARKETING,
INC.
[PETITIONER
ASSUMING
GRATIS
ARGUENDO
THAT
THE
NLRC
HAS
IV.
Petitioners fault the Court of Appeals for having sustained the Labor
Arbiters finding that respondent was not a corporate officer under petitioner
corporations by-laws. They insist that there is no need to amend the
corporate by-laws to specify who its corporate officers are. The resolution
issued by petitioner corporations Board of Directors appointing respondent
as General Manager, coupled with his assumption of the said position,
positively made him its corporate officer. More so, respondents position,
being a creation of petitioner corporations Board of Directors pursuant to its
by-laws, is a corporate office sanctioned by the Corporation Code and the
doctrines previously laid down by this Court. Thus, respondents removal as
60
Petitioners further contend that respondents claim for 30% of the net
profit of petitioner corporation was anchored on the purported Management
Contract dated 16 January 1994. It should be noted, however, that said
Management Contract was executed at the time petitioner corporation was
still nonexistent and had no juridical personality yet. Such being the case,
respondent cannot invoke any legal right therefrom as it has no legal and
binding effect on petitioner corporation. Moreover, it is clear from the Articles
of Incorporation of petitioner corporation that respondent was its director
and stockholder. Indubitably, respondents claim for his share in the profit of
petitioner corporation was based on his capacity as such and not by virtue of
any employer-employee relationship.
Petitioners further avow that even if the present case does not pose an
intra-corporate controversy, still, the Labor Arbiters multi-million peso
awards in favor of respondent were erroneous. The same was merely based
on the latters self-serving computations without any supporting documents.
an error for the Court of Appeals to hold petitioner Lucila solidarily liable with
petitioner corporation.
entity.
It
also
includes
controversies
in
the
election
or
64
65
66
67
xxxx
68
69
70
71
in
its
corporate
by-laws.
The
enabling
clause
in
petitioner
72
73
corporations
by-laws].
Regrettably,
the
[NLRC]
assumption
that
it
were
an
authentic
board
dismissal
was
done
with
the
conformity
of
petitioner
With all the foregoing, this Court is fully convinced that, indeed,
respondent, though occupying the General Manager position, was not a
corporate officer of petitioner corporation rather he was merely its employee
occupying a high-ranking position.
officer
but
merely
its
employee,
and
that,
consequently,
jurisdiction belongs to the Labor Arbiter, this Court will now determine if
respondents dismissal from employment is illegal.
In termination cases, the burden of proving just and valid cause for
dismissing an employee from his employment rests upon the employer. The
of
undertaking
operation
unless
the
of
the
closing
is
establishment
for
the
purpose
or
of
of
closures
or
cessation
of
operations
of
78
79
80
81
of
employment
under
Article
283,
is
business
losses
or
financial
reverses,
the
82
cause,
however,
petitioner
corporation
failed
to
observe
standards
substantially observed:
83
84
of
due
process
shall
be
xxxx
service
of
written
notice
to
the
thirty
days
before
effectivity
of
the
was
intended
not
only
to
enable
the
85
The records of this case disclosed that there was absolutely no written
notice given by petitioner corporation to the respondent and to the DOLE
prior to the cessation of its business operations. This is evident from the fact
that petitioner corporation effected respondents dismissal on the same date
that it decided to stop and cease its business operations. The necessary
consequence of such failure to comply with the one-month prior written
notice rule, which constitutes a violation of an employees right to statutory
due process, is the payment of indemnity in the form of nominal damages. 86
In Culili v. Eastern Telecommunications Philippines, Inc., this Court further
held:
There
is
psychological
effect
or
stigma
in
immediately finding ones self laid off from work. This is exactly
why our labor laws have provided for mandating procedural due
process clauses. Our laws, while recognizing the right of
employers to terminate employees it cannot sustain, also
recognize the employees right to be properly informed of
the impending severance of his ties with the company he
is working for. x x x.
86
that
where
the
of
the
due
process
requirements,
the
initiated
by
the
employer's
exercise
of
his
corporation,
much
less,
its
provisions
fixing
respondents
This Court, however, finds it proper to still remand the records to the
Labor Arbiter to conduct further proceedings for the sole purpose of
determining the compensation that respondent was actually receiving during
the period that he was the General Manager of petitioner corporation for the
proper computation of his separation pay.
SO ORDERED.