Mindanao State University

MSU College of Law

Iligan Extension

CASE DIGESTS
for
CASES #4 and #5

In Compliance for the Course Subject on Labor Law Review

Submitted by:
GROUP 3

Balisco, Herald
Baud, Sittie Rainnie M.
Hamed, Mohamadkalid M.
Minaga-Jamil, Wahida
Manaros, AmerHussien
Tabao, Moh’dAsrin A.

Fifth Year
Submitted to:
Labor Arbiter Abdul Azis U. Metmug
September 14, 2019
JAIME MONTEALEGRE CHAMON'TE, INC., -versus-
SPOUSES ABRAHAM and REMEDIOS DE VERA,
Facts:

JersonServandil (Servandil) filed a complaint for illegal dismissal against A.

De Vera Corporation (Corporation). The LA rendered a Decision against the
Corporation, finding it guilty of illegal dismissal and holding it liable to Servandil for
backwages, separation pay and unpaid salary.
The corporation filed an appeal before the NLRC, which was dismissed for
lack of jurisdiction because of the failure to post the appeal bond. The NLRC, in its
Resolution dated January 31, 2005, likewise denied the corporation's motion for
reconsideration.
The CA likewise denied the petition for certiorari filed before it. When the
case was elevated to the Supreme Court, the petition was denied on April 23, 2007
for failure to show any reversible error in the CA Decision.
On March 15, 2005, the NLRC issued an Entry of Judgment declaring that its
January 31, 2005 Resolution had become final and executory. A Writ of Execution
dated May 22, 2007 was issued commanding the sheriff to proceed against the
movable and immovable properties of the corporation and respondent Abraham De
Vera.
When the Writ of Execution was returned unsatisfied, Servandil moved for
the issuance of an alias writ of execution which was granted. Pursuant to this writ, a
parcel of land (property) registered in the name of respondents was levied upon and
sold to petitioners Jaime BilanMontealegre and Chamon'te, Inc. (petitioners) at a
public auction on May 16, 2008. As no redemption was made during the period
provided by law, petitioners filed an omnibus motion seeking the issuance of a final
deed of sale, cancellation of title in the name of respondents, and the issuance of a
new title in their names.
It was during this time that respondents realized that only the corporation
was impleaded as party-respondent in Servandil's complaint for illegal dismissal.
Thus, respondents filed a verified counter-manifestation with omnibus motion
stating that the property sold at auction does not belong to the judgment debtor, the
corporation, but to respondents, who were not impleaded as party-respondents in
the case for illegal dismissal. They likewise claimed that the property was conjugal
and there was no showing that an advantage or benefit accrued to their conjugal
partnership.
The LA denied respondents' omnibus motion.
Aggrieved, respondents filed a petition before the NLRC with prayer for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary
injunction to enjoin the LA or his representative from enforcing the August 25, 2011
Order. On October 10, 2011 and November 3, 2011, the NLRC issued a TRO and a
writ of preliminary injunction, respectively.
However, on March 29, 2012, it denied respondents' petition, affirming in
toto the August 25, 2011 Order of the LA. The NLRC noted that respondent Abraham
filed an earlier omnibus motion dated May 19, 2008, which sought to annul the
Notice of Sheriffs Sales for the levy and public sale of the property, and this omnibus
motion was resolved in an Order dated December 8, 2009.
The December 8, 2009 Order declared that the levy and sale of the property
is valid. Such Order became final and executory. The NLRC held that respondents are
prohibited to question a final and executory December 8, 2009 Order. The NLRC
rejected respondent Abraham's argument that the corporation is a distinct entity
and therefore, its creditors cannot go after his property. The NLRC declared that the
validity of the levy and sale of the property couldn’t likewise be questioned on the
basis that the property levied upon is a conjugal property of respondents. The NLRC
denied respondents' motion for reconsideration.
Respondents filed a petition for certiorari before the CA. The CA granted the
petition and reversed the NLRC Resolutions. The CA denied petitioners' motion for
reconsideration. Hence, this petition.
Issues:

Whether or not the CA correctly declared null the writs of execution issued
by the LA and the subsequent orders and resolutions of the LA and NLRC
implementing said writs of execution against respondents' property.
Held:

The CA acted correctly. As a general rule, a writ of execution must strictly

conform to every particular of the judgment to be executed. It should not vary the
terms of the judgment it seeks to enforce, nor may it go beyond the terms of the
judgment sought to be executed, otherwise, if it is in excess of or beyond the original
judgment or award, the execution is void. Furthermore, the power of the courts in
executing judgments extends only to properties unquestionably belonging to the
judgment debtor and liability may even be incurred by the sheriff for levying
properties not belonging to the judgment debtor.
Here, it is undisputed that the final and executory November 27, 2003 LA
Decision adjudged the corporation guilty of illegal dismissal and ordered it to pay
Servandil separation pay and backwages. It did not mention respondents' liability.
Nevertheless, the Writ of Execution dated May 22, 2007 and the Alias Writ of
Execution dated February 11, 2008 was directed against the movable and
immovable properties of both the corporation and respondent Abraham. Clearly, the
writs of execution here exceeded the terms of the final and executory judgment of
the LA.
Consequently, the CA correctly set aside the levy and sale of the subject
property pursuant to said writs and the August 25, 2011 Order, which directed the
issuance of a Final Deed of Sale in favor of petitioners, for being the offshoot of a
void execution, as well as the NLRC Resolutions dated March 29, 2012 and May 28,
2012, which affirmed the August 25, 2011 Order.43
 Petitioners also want us to disregard the corporation's separate personality
and hold respondent Abraham De Vera liable. Petitioners allege that the corporation
has already ceased to operate and there is no other way by which the LA judgment
could have been satisfied other than through the levy and sale of the property
belonging to respondent Abraham De Vera. Consequently, they claim that the levy
and sale of the property pursuant to the writs of execution and orders of the LA are
likewise valid. Contrary to petitioners' assertions, the piercing of the veil of
corporate fiction is unwarranted in this case.
In Lozada v. Mendoza, We likewise ruled that the general rule is corporate
officers are not held solidarily liable with the corporation for separation pay because
the corporation is invested by law with a personality separate and distinct from
those persons composing it as well as from that of any other legal entity to which it
may be related. To hold a director or officer personally liable for corporate
obligation is the exception and it only occurs when the following requisites are
present: (1) the complaint must allege that the director or officer assented to the
patently unlawful acts of the corporation, or that the director or officer was guilty of
gross negligence or bad faith; and (2) there must be proof that the director or officer
acted in bad faith.
Here, the two requisites are wanting. Servandil's complaint failed to allege or
impute bad faith or malice on the part of respondent Abraham De Vera. There was
likewise nothing in the November 27, 2003 LA Decision that would establish that
respondent Abraham De Vera acted in bad faith when Servandil was dismissed from
the service. There was likewise no invocation of bad faith on the part of respondent
Abraham De Vera to evade any judgment against the corporation.
Hence, respondent Abraham may not be held liable as the corporation's
responsible officer and so, the claim that the levy and sale of the property pursuant
to the writs of execution and orders of the LA are invalid.
 F.F. CRUZ & CO., INC.,Petitioner, - versus - JOSE ~ B.
GALANDEZ, DOMINGO I. SAJUELA, and MARLON D.
NAMOC, Respondents.

G.R. No. 236496

Facts:

Respondents were employed as warehouseman, purchaser, and welder,

respectively, by petitioner, a company engaged in the construction business.

Sometime in April and May 2011, respondents were issued notices of

termination on the ground of retirement. Respondents initially filed a complaint
before the DOLE on the ground that they were illegally dismissed since they have not
yet reached the compulsory retirement age, and instead, were compelled to retire
without their consent.

As petitioner failed to honor its undertaking, the DOLE referred the matter to
the NLRC, for which complaints for illegal dismissal with money claims were filed by
respondents against petitioner.

The Labor Arbiter (LA) ruled in favor of respondents declaring them to have
been illegally dismissed, and as such, were ordered reinstated to their former
positions without loss of seniority rights. Accordingly, petitioner and its officers
were ordered to jointly and solidarily pay respondents the total monetary award of
Pl79,864.69151representing their full backwages reckoned from the time of their
dismissal until December 16, 2011, 13th month pay, as well as 10% attorney's fees.

Feeling aggrieved, petitioner appealed to the NLRC, and in a Decision dated

July 17, 2012 (NLRC Decision) affirmed the LA's ruling finding respondents to have
been illegally dismissed, and as such, are entitled to reinstatement with backwages.
NLRC recomputed respondents' backwages and attorney's fees in the total amount
of P363,047.682subject to further re-computation until the latter's reinstatement.

Petitioner's motion for reconsideration was denied.

1
See Computation; id.at 111-112. Backwages, 13th month pay, and attorney's fees are
broken down as follows:
2
The monetary awards as computed by the NLRC (subject to re-computation) were as
follows:

Respondents sought to enforce the afore-mentioned NLRC Decision,

demanding petitioner to reinstate them and to pay their full backwages. They also
proposed to be paid separation pay equivalent to one (1) month pay for every year
of service should reinstatement be no longer possible.

On March 25, 2013, petitioner undertook to settle and pay respondents their
adjudged monetary award in the total aggregate amount of P363,047.68, for which
the latter executed a Quitclaim and Release in consideration thereof before a
Notary Public.

Believing to have settled in full its monetary obligations to respondents,

petitioner filed a Manifestation dated April 4, 2013 to the NLRC seeking to declare
the case closed and terminated. Later, the NLRC approved the subject quitclaims and
declared the case closed and terminated after finding the amicable settlement
between petitioner and respondents to be valid and not contrary to law, morals, and
public policy.

Respondents moved for reconsideration on the ground that the execution

thereof was attended by fraud or deceit. Later on, NLRC denied the motion for
reconsideration.

Respondents elevated the matter to the CA via a petition for certiorari

contending that the NLRC committed grave abuse of discretion when it approved the
quitclaim not in accordance with the NLRC rules of procedure and in ruling that the
same represented their full monetary judgment award.

The CA gave due course to the petition and set aside the NLRC.

Issue: Whether or not the questioned Quitclaims and Releases were invalid.
Ruling:

Quitclaims are contracts in the nature of a compromise where parties make

concessions, a lawful device to avoid litigation3. It is a valid and binding agreement
between the parties, provided that it constitutes a credible and reasonable
settlement and the one accomplishing it has done so voluntarily and with a full
understanding of its import.4 In so doing, the parties adjust their difficulties in the
manner they have agreed upon, disregarding the possible gain in litigation and
keeping in mind that such gain is balanced by the danger of losing. 5 While quitclaims
are generally intended for the purpose of preventing or putting an end to a lawsuit,
jurisprudence nonetheless holds that the parties are not precluded from entering
into a compromise even if a final judgment had already been rendered.

As pointed out in Magbanua v. Uy, 6 "[t]here is no justification to disallow a

compromise agreement, solely because it was entered into after final judgment. The
validity of the agreement is determined by compliance with the requisites and
principles of contracts, not by when it was entered into.

3
Pilipinas Shell Foundation, Inc. v. Fredeluces, 785 Phil. 409, 442 (20 I 6).
4
Pepsi-Cola Products Philippines, Inc. v Molon, 704 Phil. 120, 142 (2013).
5
Cosmos Bottling Corporation v. Nagrama. Jr., 57 !Phil. 281, 309 (2008).
6
497 Phil. 511 (2005).
 For a deed of release, waiver, and quitclaim to be valid, it must be shown that:
(a) there was no fraud or deceit on the part of any parties; (b) that the consideration
for the quitclaim is credible and reasonable; and ( c) that the contract is not contrary
to law, public order, public policy, morals or good customs, or prejudicial to a third
person with a right recognized by law.7 The burden rests on the employer to prove
that the quitclaim constitutes a credible and reasonable settlement of what an
employee is entitled to recover, and that the one accomplishing it has done so
voluntarily and with a full understanding of its import.8

However, records disclose that petitioner was only able to partly comply
with the NLRC Decision by paying respondents Galandez and Sajuela the amount of
123,230.25 each, and Namoc the sum of Pl 16,587.18, representing their backwages,
13th month pay and attorney's fees as provisionally computed by the NLRC as of July
17, 2012.

Petitioner insists that the amount received by respondents represent the full
settlement of their claims, and that they had agreed to waive not only their right to
reinstatement but also to the additional backwages that would have accrued up until
the time they are reinstated (additional backwages).

The Court disagrees that respondents waived their right to be reinstated but
agrees on the waiver of the additional backwages.

Indeed, as the Court discerns, the consideration, therefore, for respondents in

acceding to the Quitclaim and Release was to realize the expeditious settlement of
petitioner's monetary obligations (13th month pay, backwages, and attorney's fees),
without, however, compromising their right to get back their jobs and continue to
earn a living in petitioner's employ (reinstatement aspect). To the Court, this is the
evident intent of the parties as may be gathered from their contemporaneous and
subsequent acts.

In fine, the CA correctly ruled that the NLRC gravely abused its discretion in
completely relieving petitioner from all of its obligations (both in its monetary and
reinstatement aspects) under the final and executory NLRC Decision.

Quitclaim and Release duly signed by the parties. Cognizant of their intent as
explained-above, the Quitclaim and Release remains valid; however, it should be
interpreted as a fair and reasonable settlement between the parties only of the
monetary
aspect of the NLRC Decision, but not of its reinstatement aspect, which hence, should
be implemented as a matter of course.

Be that as it may, the Court is aware that "there may be instances where
reinstatement is not a viable remedy or where the relations between the employer
and employee have been so severely strained that it is not advisable to order
reinstatement, or where the employee decides not to be reinstated. In such events,
the employer will instead be ordered to pay separation pay.

7
See Universal Robina Sugar Milling Co, vsCaballeda, 582 Phil. 118, 135 (2008).
8
See Sy vs. Neai, lnc.,G.R. No.213748, November27,2017.