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Philippine Supreme Court Jurisprudence > Year 2012 > September 2012 Decisions > G.R. No. 198662 - Radio
Mindanao Network, Inc. and Eric S. Canoy v. Domingo Z. Ybarola, et al.:

G.R. No. 198662 - Radio Mindanao Network, Inc. and Eric S. Canoy v. Domingo Z. Ybarola, et al.

ChanRobles On-Line Bar Review

SPECIAL SECOND DIVISION

[G.R. No. 198662 - September 12, 2012]

RADIO MINDANAO NETWORK, INC. and ERIC S. CANOY, Petitioners, v. DOMINGO Z. YBAROLA,
JR. and ALFONSO E. RIVERA, JR., Respondents.

RESOLUTION

BRION, J.:

We resolve the motion for reconsideration1 of petitioners Radio Mindanao Network, Inc. (RMN) and Eric
S. Canoy addressing our Resolution2 of December 7, 2011 which denied the appeal from the decision3
4
and the resolution of the Court of Appeals (CA) in CA-G.R. SP No. 109016.

Factual Background

Respondents Domingo Z. Ybarola, Jr. and Alfonso E. Rivera, Jr. were hired on June 15, 1977 and June 1,
1983, respectively, by RMN. They eventually became account managers, soliciting advertisements and
servicing various clients of RMN.

On September 15, 2002, the respondents services were terminated as a result of RMN s
reorganization/restructuring; they were given their separation pay P 631,250.00 for Ybarola, and P
481,250.00 for Rivera. Sometime in December 2002, they executed release/quitclaim affidavits.

DebtKollect Company, Inc. Dissatisfied with their separation pay, the respondents filed separate complaints (which were later
consolidated) against RMN and its President, Eric S. Canoy, for illegal dismissal with several money
claims, including attorney s fees. They indicated that their monthly salary rates were P 60,000.00 for
Ybarola and P 40,000.00 for Rivera.

The Compulsory Arbitration Proceedings

The respondents argued that the release/quitclaim they executed should not be a bar to the recovery of
the full benefits due them; while they admitted that they signed release documents, they did so due to
dire necessity.

The petitioners denied liability, contending that the amounts the respondents received represented a fair
and reasonable settlement of their claims, as attested to by the release/quitclaim affidavits which they
executed freely and voluntarily. They belied the respondents claimed salary rates, alleging that they each
received a monthly salary of P 9,177.00, as shown by the payrolls.

On July 18, 2007, Labor Arbiter Patricio Libo-on dismissed the illegal dismissal complaint, but ordered the
payment of additional separation pay to the respondents P 490,066.00 for Ybarola and P 429,517.55 for
Rivera.5ς rνl l

The labor arbiter adjusted the separation pay award based on the respondents Certificates of
ChanRobles Intellectual Property Compensation Payment/Tax Withheld showing that Ybarola and Rivera were receiving an annual salary of
P 482,477.61 and P 697,303.00, respectively.
Division
On appeal by the petitioners to the National Labor Relations Commission (NLRC), the NLRC set aside the
labor arbiter s decision and dismissed the complaint for lack of merit.6 It ruled that the withholding tax

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September-2012 Jurisprudence
A.C. No. 6753 - Mila Virtusio v. Atty. Grenalyn V.
Virtusio
A.M. No. RTJ-09-2182 Formerly A.M. No. 08-3007-RTJ
- Government Service Insurance System by Atty. Lucio
L. Yu, Jr. v. Executive Judge Maria Cancino-Erum,
Regional Trial Court, Br. 210, Mandaluyong City and
Presiding Judge Carlos A. Valenzuela, Regional Trial
court, Branch 213, Mandaluyong City
G.R. No. 148607, G.R. NO. 167202, G.R. NO. 167223
and G.R. NO. 167271 - Elsa B. Reyes v. Sandiganbayan
and People of the Philippines/Artemio C. Mendoza v.
Sandiganbayan and People of the Philippines/Elsa B.
Reyes v. People of the Philippines/Caridad A. Miranda
v. People of the Philippines
G.R. No. 153799, G.R. NO. 157169, G.R. NO. 157327
and G.R. NO. 157506 - Solidbank Union, et al. v.
Metropolitan Bank and Trust Company; Metropolitan
Bank and Trust Company v. Solidbank Union, et al.;
Solidbank Corporation, etc., et al. v. Solidbank Union, et
al.; Solidbank Union, et al. v. Metropolitan Bank and
Trust Company
G.R. No. 171107 - Anita C. Vianzon, Heirs of the late
Lucila Candelaria Gonzales v. Minople Macaraeg
G.R. No. 173425 - Fort Bonifacio Develoment
Corporation v. Commissioner of Internal Revenue and
Revenue District Officer, etc.
G.R. No. 175170 - Misamis Oriental II Electric Service
Cooperative (MORESCO II) v. Virgilio M. Cagalawan
G.R. No. 176343 - Trade and Investment Development
Corporation of the Phil. v. Rosario S. Manalang-
Demigillo
G.R. No. 184606 - People of the Philippines v. Calexto
D. Fundales
G.R. No. 188979 - People of the Philippines v.
Christopher Pareja y Velasco
G.R. No. 189486 and G.R. NO. 189699 - Simny G. Guy,
Geraldine G. Guy, Gladys G. Yao and the Heirs of the
late Grace G. Cheu v. Gilbert Guy/Simny G. Guy,
Geraldine G. Guy, Gladys G. Yao and the heirs of the
late Grace G. Cheu v. The Hon. Ofelia C. Calo, in her
capacity as Presiding Judge of the RTC-Mandaluyong
City-Branch 211 and Gilbert Guy
G.R. No. 191062 - People of the Philippine v. Mohamad
Angkob y Milang
G.R. No. 191753 - People of the Philippines v. Ronald
De Jesus y Apacible and Amelito Dela Cruz y Pua
G.R. No. 191837 - Maria Consolacion Rivera-Pascual v.
Spouses Marilyn Lim and George Lim and The Registry
of Deeds of Valenzuela City
G.R. No. 192117 and G.R. NO. 192118 - Association of
Southern Tagalog Electric Cooperatives, Inc., et al. v.
Energy Regulatory Commission/Central Luzon Electric
Cooperatives Association, Inc., et al. v. Energy
Regulatory Commission
G.R. No. 192945 - City of Iriga v. Camarines Sur III
Electric Cooperative Inc.
2 of 5
http://www.chanrobles.com/cralaw/2012septemberdecisions.php?id=524
certificate cannot be the basis of the computation of the respondents separation pay as the tax document
included the respondents cost-of-living allowance and commissions; as a general rule, commissions
cannot be included in the base figure for the computation of the separation pay because they have to be
earned by actual market transactions attributable to the respondents, as held by the Court in Soriano v.
NLRC7 and San Miguel Jeepney Service v. NLRC.8 The NLRC upheld the validity of the respondents
quitclaim affidavits as they failed to show that they were forced to execute the documents.
From the NLRC, the respondents sought relief from the CA through a Petition for Certiorari under Rule 65
of the Rules of Court.
The CA Decision and the Court s Ruling
In its decision9 of February 17, 2011, the CA granted the petition and set aside the assailed NLRC
dispositions. It reinstated the labor arbiter s separation pay award, rejecting the NLRC s ruling that the
respondents commissions are not included in the computation of their separation pay. It pointed out that
in the present case, the respondents earned their commissions through actual market transactions
attributable to them; these commissions, therefore, were part of their salary.
The appellate court declared the release/quitclaim affidavits executed by the respondents invalid for
being against public policy, citing two reasons: (1) the terms of the settlement are unconscionable; the
separation pay the respondents received was deficient by at least P 400,000.00 for each of them; and (2)
the absence of voluntariness when the respondents signed the document, it was their dire circumstances
and inability to support their families that finally drove them to accept the amount the petitioners
offered. Significantly, they dallied and it took them three months to sign the release/quitclaim affidavits.
The petitioners moved for reconsideration, but the CA denied the motion in a resolution10 dated
September 23, 2011. Thus, the petitioners appealed to this Court through a Petition for Review on
Certiorari under Rule 45 of the Rules of Court.
By a Resolution11 dated December 7, 2011, the Court denied the petition for failure to show any
reversible error or grave abuse of discretion in the assailed CA rulings.
The Motion for Reconsideration
The petitioners seek reconsideration of the Court s denial of their appeal on the ground that the CA, in
fact, committed reversible error in: (1) failing to declare that Canoy is not personally liable in the present
case; (2) disregarding the rule laid down in Talam v. National Labor Relations Commission12 on the
proper appreciation of quitclaims; and (3) disregarding prevailing jurisprudence which places on the
respondents the burden of proving that their commissions were earned through actual market
transactions attributable to them.
The petitioners fault the CA for not expressly declaring that no basis exists to hold Canoy personally
liable for the award to the respondents as they failed to specify any act Canoy committed against them
or to explain how Canoy participated in their dismissal. They express alarm as they believe that unless
the Court acts, the respondents will enforce the award against Canoy himself.
On the release/quitclaim issue, the petitioners bewail the CA s disregard of the Court s ruling in Talam
that the quitclaim that Francis Ray Talam, who was not an unlettered employee, executed was a
voluntary act as there was no showing that he was coerced into signing the instrument, and that he
received a valuable consideration for his less than two years of service with the company. They point out
that in this case, the labor arbiter and the NLRC correctly concluded that the respondents are hardly
unlettered employees, but intelligent, well-educated and who were too smart to be caught unaware of
what they were doing. They stress, too, that the respondents submitted no proof that they were in dire
circumstances when they executed the release/quitclaim document.
With regard to the controversy on the inclusion of the respondents commissions in the computation of
their separation pay, the petitioners reiterate their contention that the respondents failed to show proof
that they earned the commissions through actual market forces attributable to them.
The Respondents Position
Through their Comment/Opposition (to the Motion for Reconsideration),13 the respondents pray that the
motion be denied for lack of merit. They argue that the motion is based on arguments already raised in
the Petition for Review which had already been denied by this Court.
The respondents submit that the issue of Canoy s personal liability has become final and conclusive on
the parties as the petitioners failed to raise the issue on time. They maintain that as the records show,
the petitioners failed to raise the issue in their appeal to the NLRC and neither did they bring it up in their
motion for reconsideration of the CA s decision reinstating the labor arbiter s award.
The Petitioners Reply
In their reply (to the respondents Comment/Opposition),14 the petitioners ask that their petition be
reinstated to allow the full ventilation of the issues presented for consideration. They contend that the
respondents merely reiterated the CA pronouncements and have not confronted the issues raised and the
jurisprudence they cited.
On the question of Canoy s personal liability, the petitioners take exception to the respondents
submission that the matter had been resolved with finality and has become conclusive on them. They
assert that they did not raise the issue with the CA because there was no reason for them to do so as the
ruling then being reviewed was one which held that they were not liable to the respondents.
Our Ruling on the Motion for Reconsideration
We find the motion for reconsideration unmeritorious. The motion raises substantially the same
arguments presented in the petition and we find no compelling justification to grant the reconsideration
prayed for.
The petitioners insist that the respondents commissions were not part of their salaries, because they
failed to present proof that they earned the commission due to actual market transactions attributable to
them. They submit that the commissions are profit-sharing payments which do not form part of their
salaries. We are not convinced. If these commissions had been really profit-sharing bonuses to the
respondents, they should have received the same amounts, yet, as the NLRC itself noted, Ybarola and
Rivera received P 372,173.11 and P 586,998.50 commissions, respectively, in 2002.15 The variance in
amounts the respondents received as commissions supports the CA s finding that the salary structure of
the respondents was such that they only received a minimal amount as guaranteed wage; a greater part
of their income was derived from the commissions they get from soliciting advertisements; these
advertisements are the "products" they sell. As the CA aptly noted, this kind of salary structure does not
detract from the character of the commissions being part of the salary or wage paid to the employees for
services rendered to the company, as the Court held in Philippine Duplicators, Inc. v. NLRC.16 ς rνl l
The petitioners reliance on our ruling in Talam v. National Labor Relations Commission,17 regarding the
"proper appreciation of quitclaims," as they put it, is misplaced. While Talam, in the cited case, and
Ybarola and Rivera, in this case, are not unlettered employees, their situations differ in all other respects.
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G.R. No. 198662 - Radio Mindanao Network, Inc. and Eric S. Canoy v.... http://www.chanrobles.com/cralaw/2012septemberdecisions.php?id=524

G.R. No. 194014 - Philippine National Bank v. Spouses
Alejandro and Myrna Reblando
G.R. No. 195592 - Magdiwang Realty Corporation,
Renato P. Dragon and Esperanza Tolentino v. The
Manila Banking Corporation, substituted by First
Sovereign Asset Management [SPV-AMC], Inc.
G.R. No. 195619 - Planters Development Bank v. Julie
Chandumal
G.R. No. 196355 - Bienvenido William D. Lloren v. The
Commission on Elections, et al.
G.R. No. 196231 and G.R. NO. 196232 - Emilio A.
Gonzales III v. Office of the President of the
Philippines, acting through and represented by
Executive Secretary Paquito N. Ochoa, Jr., et
al./Wendell Barreras-Sulit v. Atty. Paquito N. Ochoa,
Jr., in his capacity as Executive Secretary, Office of the
President, Atty. Dennis F. Ortiz, et al.
G.R. No. 197528 - Pert/CPM Manpower Exponent Co.,
Inc. v. Amando A. Vinuya, et al.
In Talam, the employee received a valuable consideration for his less than two years of service with the
company;18 he was not shortchanged and no essential unfairness took place. In this case, as the CA
noted, the separation pay the respondents each received was deficient by at least P 400,000.00; thus,
they were given only half of the amount they were legally entitled to. To be sure, a settlement under
these terms is not and cannot be a reasonable one, given especially the respondents length of service 25
years for Ybarola and 19 years for Rivera. The CA was correct when it opined that the respondents were
in dire straits when they executed the release/quitclaim affidavits. Without jobs and with families to
support, they dallied in executing the quitclaim instrument, but were eventually forced to sign given their
circumstances.
Lastly, the petitioners are estopped from raising the issue of Canoy's personal liability. They did not raise
it before the NLRC in their appeal from the labor arbiter's decision, nor with the CA in their motion for
reconsideration of the appellate court's judgment. The risk of having Canoy's personal liability for the
judgment award did not arise only with the filing of the present petition, it had been there all along - in
the NLRC, as well as in the CA.
WHEREFORE, premises considered, we hereby DENY the motion for reconsideration with finality. No
second motion for reconsideration shall be entertained. Let judgment be entered in due course.
SO ORDERED.
Endnotes:

G.R. No. 198662 - Radio Mindanao Network, Inc. and

Eric S. Canoy v. Domingo Z. Ybarola, et al. 1 Rollo, pp. 204-220.

G.R. No. 199084 - Antonia P. Ceron v. Commission on 2 Id. at 202-203.

Elections, et al.
3 Id. at 8-21; dated February 17, 2011I.
G.R. No. 200951 - People of the Philippines v. Jose
Almodiel alias "Dodong Astrobal" 4 Id. at 23-24; dated September 23, 2011.
A.M. OCA IPI No. 04-1606-MTJ : Atty. Arturo Juanito 5
T. Maturan v. Judge Lizabeth Gutierrez-Torres, Id. at 69-84.
Metropolitan Trial Court, Branch 60, Mandaluyong City
6 Id. at 103-111; Resolution dated January 26, 2009.
A.C. No. 6753 - Mila Virtusio v. Atty. Grenalyn V.
Virtusio 7 239 Phil. 119 (1987).

A.M. No. MTJ-07-1666 : Gerlie M. Uy and Ma. 8 332 Phil. 804 (1996).
Consolacion T. Bascug v. Judge Erwin B. Javellana,
Municipal Trial Court, La Castellana, Negros Occidental 9 Supra note 3.
A.M. No. P-06-2161 : Atty. Dennis A. Velasco v. Myra 10 Supra note 4.
L. Baterbonia/In Re: Report on the financial audit
conducted in the RTC, Branch 38, Alabel etc. 11 Supra note 2.
A.M. No. P-11-2920 : Lucia Nazar Vda. De Feliciano v.
12 G.R. No. 175040, April 6, 2010, 617 SCRA 408.
Romeo L. Rivera, Sheriff IV, Regional Trial Court, Office
of the Clerk of Court, Valenzuela City
13 Rollo, pp. 236-245.
A.M. No. P-12-3086 : Office of the Court Administrator
v. Susana R. Fontanilla, Clerk of Court, MCTC, San 14 Id. at 248-255.
Narciso-Buenavista, San Narciso, Quezon
15 Supra note 6, at 107.
A.M. No. P-12-3087 : Dionisio P. Pilot v. Renato B.
Baron, Sheriff IV, Regional Trial Court, Br. 264, Pasig 16
City
G.R. No. 110068, November 11, 1993, 227 SCRA 747, 753.
17 Supra note 12.
A.M. No. RTJ-09-2182 Formerly A.M. No. 08-3007-RTJ
- Government Service Insurance System by Atty. Lucio
18 Supra note 1, at 211.
L. Yu, Jr. v. Executive Judge Maria Cancino-Erum,
Regional Trial Court, Br. 210, Mandaluyong City and
Presiding Judge Carlos A. Valenzuela, Regional Trial chanrobl es vi rt ual l aw l i brary

court, Branch 213, Mandaluyong City

A.M. No. RTJ-11-2271 : Lucio O. Magtibay v. Judge

Cader P. Indar, Al Haj., RTC, Branch 14 Cotabato City

G.R. No. 148607, G.R. NO. 167202, G.R. NO. 167223 Back to Home | Back to Main
and G.R. NO. 167271 - Elsa B. Reyes v. Sandiganbayan
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1909 1910 1911 1912 1913 1914 1915 1916
and G.R. NO. 157506 - Solidbank Union, et al. v.
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Geraldine G. Guy, Gladys G. Yao and the Heirs of the
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Geraldine G. Guy, Gladys G. Yao and the heirs of the
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Angkob y Milang

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her heirs namely, Eugenio M. Guizano, Jr., Emmanuel
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G.R. No. 191753 - People of the Philippines v. Ronald

De Jesus y Apacible and Amelito Dela Cruz y Pua

G.R. No. 191837 - Maria Consolacion Rivera-Pascual v.

Spouses Marilyn Lim and George Lim and The Registry
of Deeds of Valenzuela City

G.R. No. 192117 and G.R. NO. 192118 - Association of

Southern Tagalog Electric Cooperatives, Inc., et al. v.
Energy Regulatory Commission/Central Luzon Electric
Cooperatives Association, Inc., et al. v. Energy
Regulatory Commission

G.R. No. 192945 - City of Iriga v. Camarines Sur III

Electric Cooperative Inc.

G.R. No. 193753 : Living @ Sense, Inc. v. Malayan

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G.R. No. 193854 : People of the Philippines v. Dina

Dulay y Pascual

G.R. No. 194014 - Philippine National Bank v. Spouses

Alejandro and Myrna Reblando

G.R. No. 195592 - Magdiwang Realty Corporation,

Renato P. Dragon and Esperanza Tolentino v. The
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G.R. No. 195619 - Planters Development Bank v. Julie

Chandumal

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Philippines

G.R. No. 196355 - Bienvenido William D. Lloren v. The

Commission on Elections, et al.

G.R. No. 196231 and G.R. NO. 196232 - Emilio A.

Gonzales III v. Office of the President of the
Philippines, acting through and represented by
Executive Secretary Paquito N. Ochoa, Jr., et
al./Wendell Barreras-Sulit v. Atty. Paquito N. Ochoa,
Jr., in his capacity as Executive Secretary, Office of the
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and Kristina David v. OSG Shipmanagement Manila,
Inc. and/or Michaelmar Shipping Services

G.R. No. 197528 - Pert/CPM Manpower Exponent Co.,

Inc. v. Amando A. Vinuya, et al.

G.R. No. 198662 - Radio Mindanao Network, Inc. and

Eric S. Canoy v. Domingo Z. Ybarola, et al.

G.R. No. 199084 - Antonia P. Ceron v. Commission on

Elections, et al.

G.R. No. 199082 : Jose Miguel T. Arroyo v. Department

of Justice, et al./Benjamin S. Abalos, Sr. v. Hon. Leila
de Lima, in her capacity as Secretary of Justice, et
al./Gloria Macapagal-Arroyo v. Commission on
Elections, etc., et al.

G.R. No. 199547 : The New Philippine Skylanders, Inc.

and/or Jennifer M. Eñano-Bote v. Francisco N. Dakila

G.R. No. 200529 : People of the Philippines v. Juanito

Garcia y Gumay @ Wapog

G.R. No. 200951 - People of the Philippines v. Jose

Almodiel alias "Dodong Astrobal"

G.R. No. 202914 : Government Service Insurance

System, etc. v. Heidi B. Chua

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