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14. G.R. No.

126625 September 18, 1997 terminating the services of private

KANLAON CONSTRUCTION respondents and its other employees.In
ENTERPRISES CO., INC., petitioner, 1990, private respondents filed separate
vs. NATIONAL LABOR RELATIONS complaints against petitioner before Sub-
COMMISSION, 5TH DIVISION, and Regional Arbitration Branch XII, Iligan
BENJAMIN RELUYA, JR., EDGARDO City. Numbering forty-one (41) in all, they
GENAYAS, ERNESTO CANETE, claimed that petitioner paid them wages
PROTACIO ROSALES, NESTOR below the minimum and sought payment of
BENOYA, RODOLFO GONGOB, their salary differentials and thirteenth-
DARIO BINOYA, BENJAMIN month pay. Engineers Estacio and Dulatre
BASMAYOR, ABELARDO SACURA, were named co-respondents.
MIRA, NEMESIO LACAR, JOSEPH The preliminary conferences before the
CABIGKIS, RODRIGO CILLON, labor arbiters were attended by Engineers
VIRGILIO QUIZON, GUARINO Estacio and Dulatre and private respondents.
EVANGELISTA, ALEJANDRO GATA, At the conference of June 11, 1990 before
BENEDICTO CALAGO, NILO GATA, Arbiter Siao, Engineer Estacio admitted
DIONISIO PERMACIO, JUANITO petitioner’s liability to private respondents
SALUD, ADOR RIMPO, FELIPE and agreed to pay their wage differentials
ORAEZ, JULIETO TEJADA, and thirteenth-month pay on June 19, 1990.
TEOTIMO LACIO, ONOFRE QUIZON, As a result of this agreement, Engineer
RUDY ALVAREZ, CRESENCIO Estacio allegedly waived petitioner’s right to
FLORES, ALFREDO PERMACIO, file its position paper. 1 Private respondents
CRESENCIO ALVIAR, HERNANI declared that they, too, were dispensing with
SURILLA, DIOSDADO SOLON, their position papers and were adopting their
CENON ALBURO, ZACARIAS ORTIZ, complaints as their position paper.
BAGO, JERRY VARGAS, EDUARDO Extension was denied by the LA Siao and
BUENO, PASCUAL HUDAYA, ordered the employer company to pay the
ROGELIO NIETES, and REYNALDO employees.Petitioner appealed to respondent
NIETES, respondents. National Labor Relations Commission. It
alleged that it was denied due process and
FACTS: that Engineers Estacio and Dulatre had no
Petitioner is a domestic corporation authority to represent and bind petitioner.
engaged in the construction business NLRC affirmed the decisions of the Labor
nationwide with principal office at No. 11 Arbiters.
Yakan St., La Vista Subdivision, Quezon
City. In 1988, petitioner was contracted by RULING:
the National Steel Corporation to construct It has been established that petitioner is a
residential houses for its plant employees in private domestic corporation with principal
Steeltown, Sta. Elena, Iligan City. Private address in Quezon City. The complaints
respondents were hired by petitioner as against petitioner were filed in Iligan City
laborers in the project and worked under the and summons served on Engineer Estacio in
supervision of Engineers Paulino Estacio Iligan City. The question now is whether
and Mario Dulatre. In 1989, the project Engineer Estacio was an agent and
neared its completion and petitioner started authorized representative of petitioner.
Under the Revised Rules of Court, 7 service of the Philippines in cases referred thereto
upon a private domestic corporation or by the latter. . . . 10
partnership must be made upon its officers,
such as the president, manager, secretary, A non-lawyer may appear before the labor
cashier, agent, or any of its directors. These arbiters and the NLRC only if: (a) he
persons are deemed so integrated with the represents himself as a party to the case; (b)
corporation that they know their he represents an organization or its
responsibilities and immediately discern members, with written authorization from
what to do with any legal papers served on them: or (c) he is a duly-accredited member
them. of any legal aid office duly recognized by
the Department of Justice or the Integrated
In the case at bar, Engineer Estacio, assisted Bar of the Philippines in cases referred to by
by Engineer Dulatre, managed and the latter. 11Engineers Estacio and Dulatre
supervised the construction project. 9 were not lawyers. Neither were they duly-
According to the Solicitor General and accredited members of a legal aid office.
private respondents, Engineer Estacio Their appearance before the labor arbiters in
attended to the project in Iligan City and their capacity as parties to the cases was
supervised the work of the employees authorized under the first exception to the
thereat. As manager, he had sufficient rule. However, their appearance on behalf of
responsibility and discretion to realize the petitioner required written proof of
importance of the legal papers served on authorization. It was incumbent upon the
him and to relay the same to the president or arbiters to ascertain this authority especially
other responsible officer of petitioner. since both engineers were named co-
Summons for petitioner was therefore respondents in the cases before the arbiters.
validly served on him.Engineer Estacio’s Absent this authority, whatever statements
appearance before the labor arbiters and his and declarations Engineer Estacio made
promise to settle the claims of private before the arbiters could not bind petitioner.
respondents is another matter.
Nevertheless, even assuming that Engineer
The general rule is that only lawyers are Estacio and Atty. Abundiente were
allowed to appear before the labor arbiter authorized to appear as representatives of
and respondent Commission in cases before petitioner, they could bind the latter only in
them. The Labor Code and the New Rules of procedural matters before the arbiters and
Procedure of the NLRC, nonetheless, lists respondent Commission. Petitioner’s
three (3) exceptions to the rule, viz: Sec. 6. liability arose from Engineer Estacio’s
Appearances. — . . . . A non-lawyer may alleged promise to pay. A promise to pay
appear before the Commission or any Labor amounts to an offer to compromise and
Arbiter only if: requires a special power of attorney or the
(a) he represents himself as party to the case; express consent of petitioner. The authority
(b) he represents the organization or its to compromise cannot be lightly presumed
members, provided that he shall be made to and should be duly established by evidence.
present written proof that he is properly
authorized; or Sec. 7. Authority to bind party. — Attorneys
(c) he is a duly-accredited member of any and other representatives of parties shall
legal aid office duly recognized by the have authority to bind their clients in all
Department of Justice or the Integrated Bar matters of procedure; but they cannot,
without a special power of attorney or him and petitioner nor was his name
express consent, enter into a compromise included in the semi-monthly payroll. On
agreement with the opposing party in full or January 22, 1996, he was dismissed from his
partial discharge of a client’s claim. employment for allegedly misappropriating
P38,000.00 which was intended for payment
After petitioner’s alleged representative by petitioner of its value added tax (VAT) to
failed to pay the workers’ claims as the Bureau of Internal Revenue (BIR).
promised, Labor Arbiters Siao and Palangan
did not order the parties to file their Petitioner on the other hand claims that
respective position papers. The arbiters private respondent was not its employee but
forthwith rendered a decision on the merits only the uncle of Amelita Malabed, the
without at least requiring private owner of petitioner St. Martin’s Funeral
respondents to substantiate their complaints. Home. Sometime in 1995, private
The parties may have earlier waived their respondent, who was formerly working as
right to file position papers but petitioner’s an overseas contract worker, asked for
waiver was made by Engineer Estacio on the financial assistance from the mother of
premise that petitioner shall have paid and Amelita. Since then, as an indication of
settled the claims of private respondents at gratitude, private respondent voluntarily
the scheduled conference. Since petitioner helped the mother of Amelita in overseeing
reneged on its “promise,” there was a failure the business.
to settle the case amicably. This should have
prompted the arbiters to order the parties to January 1996, the mother of Amelita passed
file their position papers. away, so the latter then took over the
management of the business. She then
Sec.3.Submission of Position discovered that there were arrears in the
Papers/Memorandum. — Should the parties payment of taxes and other government fees,
fail to agree upon an amicable settlement, in although the records purported to show that
whole or in part, during the conferences, the the same were already paid. Amelita then
Labor Arbiter shall issue an order stating made some changes in the business
therein the matters taken up and agreed upon operation and private respondent and his
during the conferences and directing the wife were no longer allowed to participate in
parties to simultaneously file their respective the management thereof. As a consequence,
verified position papers. the latter filed a complaint charging that
petitioner had illegally terminated his
15. G.R. No. 130866 September 16, 1998 employment the labor arbiter rendered a
ST. MARTIN FUNERAL HOME, decision in favor of petitioner on October
petitioner, vs. NATIONAL LABOR 25, 1996 declaring that no employer-
RELATIONS COMMISSION and employee relationship existed between the
BIENVENIDO ARICAYOS, respondents. parties and, therefore, his office had no
jurisdiction over the case. Private respondent
FACTS: appealed to the NLRC. NLRC remanded the
Private respondent alleges that he started case to LA. MR was filed by the petitioner
working as Operations Manager of which was denied.
petitioner St. Martin Funeral Home on
February 6, 1995. However, there was no RULING:
contract of employment executed between 1) HISTORY: the legal history of the
NLRC. It was first established in the finality of the decision of the NLRC may
Department of Labor by P.D. No. 21 on already have lapsed as contemplated in
October 14, 1972, and its decisions were Section 223 of the Labor Code, it has been
expressly declared to be appealable to the held that this Court may still take
Secretary of Labor and, ultimately, to the cognizance of the petition for certiorari on
President of the Philippines. jurisdictional and due process considerations
if filed within the reglementary period under
May 1, 1974, P.D. No. 442 enacted the Rule 65.
Labor Code of the Philippines, the same to
take effect six months after its promulgation. The Court is, therefore, of the considered
8 Created and regulated therein is the opinion that ever since appeals from the
present NLRC which was attached to the NLRC to the Supreme Court were
Department of Labor and Employment for eliminated, the legislative intendment was
program and policy coordination only. 9 that the special civil action of certiorari was
Initially, Article 302 (now, Article 223) and still is the proper vehicle for judicial
thereof also granted an aggrieved party the review of decisions of the NLRC. The use of
remedy of appeal from the decision of the the word “appeal” in relation thereto and in
NLRC to the Secretary of Labor, but P.D. the instances we have noted could have been
No. 1391 subsequently amended said a lapsus plumae because appeals by
provision and abolished such appeals. No certiorari and the original action for
appellate review has since then been certiorari are both modes of judicial review
provided for. The argument that this Court addressed to the appellate courts. The
has no jurisdiction to review the decisions of important distinction between them,
the NLRC, and formerly of the Secretary of however, and with which the Court is
Labor, since there is no legal provision for particularly concerned here is that the
appellate review thereof, the Court special civil action of certiorari is within the
nevertheless rejected that thesis. It held that concurrent original jurisdiction of this Court
there is an underlying power of the courts to and the Court of Appeals; 23 whereas to
scrutinize the acts of such agencies on indulge in the assumption that appeals by
questions of law and jurisdiction even certiorari to the Supreme Court are allowed
though no right of review is given by statute; would not subserve, but would subvert, the
that the purpose of judicial review is to keep intention of Congress as expressed in the
the administrative agency within its sponsorship speech on Senate Bill No. 1495.
jurisdiction and protect the substantial rights
of the parties; and that it is that part of the 2)Appeal.
checks and balances which restricts the -review of NLRC Decision is through Rule
separation of powers and forestalls arbitrary 65.
and unjust adjudications.The remedy of the -jurisdiction: SC AND CA
aggrieved party is to timely file a motion for -by way of hierarchy: the review shall be
reconsideration as a precondition for any initially filed before CA.
further or subsequent remedy, 12 and then
seasonably avail of the special civil action of
certiorari under Rule 65, 13 for which said
Rule has now fixed the reglementary period
of sixty days from notice of the decision.
Curiously, although the 10-day period for
17. [G.R. No. 126322. January 16, 2002] this case by public respondent triggered the
YUPANGCO COTTON MILLS, INC., filing of the instant petition.
petitioner, vs. COURT OF APPEALS,
HON. URBANO C. VICTORIO, SR., “In all of the foregoing actions, petitioner
Presiding Judge, RTC Branch 50, Manila, raised a common issue, which is that it is the
RODRIGO SY MENDOZA, owner of the properties located in the
SAMAHANG MANGGAGAWA NG compound and buildings of Artex
ARTEX (SAMAR-ANGLO) represented Development Corporation, which were
by its Local President RUSTICO erroneously levied upon by the sheriff of the
CORTEZ, and WESTERN GUARANTY NLRC as a consequence of the decision
CORPORATION, respondents. rendered by the said Commission in a labor
case docketed as NLRC-NCR Case No. 00-
FACTS: 05-02960-90.”[2]On March 29, 1996, the
“From the records before us and by Court of Appeals promulgated a decision[3]
petitioner’s own allegations and admission, dismissing the petition on the ground of
it has taken the following actions in forum shopping and that petitioner’s remedy
connection with its claim that a sheriff of the was to seek relief from this Court.
National Labor Relations Commission
“erroneously and unlawfully levied” upon On April 18, 1996, petitioner filed with the
certain properties which it claims as its own. Court of Appeals a motion for
reconsideration of the decision.[4] Petitioner
“1. It filed a notice of third-party claim with argued that the filing of a complaint for
the Labor Arbiter on May 4, 1995. accion reinvindicatoria with the Regional
“2. It filed an Affidavit of Adverse Claim Trial Court was proper because it is a
with the National Labor Relations remedy specifically granted to an owner
Commission (NLRC) on July 4, 1995, (whose properties were subjected to a writ
which was dismissed on August 30, 1995, of execution to enforce a decision rendered
by the Labor Arbiter. in a labor dispute in which it was not a
“3. It filed a petition for certiorari and party) by Section 17 (now 16), Rule 39,
prohibition with the Regional Trial Court of Revised Rules of Court and by the doctrines
Manila, Branch 49, docketed as Civil Case laid down in Sy v. Discaya,[5] Santos v.
No. 95-75628 on October 6, 1995. The Bayhon[6] and Manliguez v. Court of
Regional Trial Court dismissed the case on Appeals.[7]On August 27, 1996, the Court
October 11, 1995 for lack of merit. of Appeals denied petitioner’s motion for
“4. It appealed to the NLRC the order of the reconsideration
Labor Arbiter dated August 13, 1995 which
dismissed the appeal for lack of merit on RULING:
December 8, 1995. 1) FORUM SHOPPING. There is no forum-
“5. It filed an original petition for mandatory shopping where two different orders were
injunction with the NLRC on November 16, questioned, two distinct causes of action and
1995. This was docketed as Case No. issues were raised, and two objectives were
NLRC-NCR-IC. 0000602-95. This case is sought.In the case at bar, there was no
still pending with that Commission. identity of parties, rights and causes of
“6. It filed a complaint in the Regional Trial action and reliefs sought.
Court in Manila which was docketed as
Civil Case No. 95-76395. The dismissal of
The case before the NLRC where Labor which issued the writ, the latter not being a
Arbiter Reyes issued a writ of execution on condition sine qua non for the former. In
the property of petitioner was a labor dispute such proper action, the validity and
between Artex and Samar-Anglo. Petitioner sufficiency of the title of the third-party
was not a party to the case. The only issue claimant will be resolved and a writ of
petitioner raised before the NLRC was preliminary injunction against the sheriff
whether or not the writ of execution issued may be issued.
by the labor arbiter could be satisfied against
the property of petitioner, not a party to the 20. G.R. No. 161003 May 6, 2005
labor case.On the other hand, the accion FELIPE O. MAGBANUA, CARLOS DE
reinvindicatoria filed by petitioner in the LA CRUZ, REMY ARNAIZ, BILLY
trial court was to recover the property ARNAIZ, ROLLY ARNAIZ, DOMINGO
illegally levied upon and sold at auction. SALARDA, JULIO CAHILIG and
Hence, the causes of action in these cases NICANOR LABUEN, petitioners,
were different. vs.
RIZALINO UY, respondent.
2) THIRD PARTY CLAIM. a third party
whose property has been levied upon by a FACTS:
sheriff to enforce a decision against a “As a final consequence of the final and
judgment debtor is afforded with several executory decision of the Supreme Court in
alternative remedies to protect its interests. Rizalino P. Uy v. National Labor Relations
The third party may avail himself of Commission, et. al. (GR No. 117983,
alternative remedies cumulatively, and one September 6, 1996) which affirmed with
will not preclude the third party from modification the decision of the NLRC in
availing himself of the other alternative NLRC Case No. V-0427-93, hearings were
remedies in the event he failed in the remedy conducted [in the National Labor Relations
first availed of.Thus, a third party may avail Commission Sub-Regional Arbitration
himself of the following alternative Branch in Iloilo City] to determine the
remedies: amount of wage differentials due the eight
a) File a third party claim with the sheriff of (8) complainants therein, now [petitioners].
the Labor Arbiter, and As computed, the award amounted to
b) If the third party claim is denied, the third P1,487,312.69 x x x.
party may appeal the denial to the
NLRC.[13] “On February 3, 1997, [petitioners] filed a
Motion for Issuance of Writ of
The remedies above mentioned are Execution.“On May 19, 1997, [respondent]
cumulative and may be resorted to by a Rizalino Uy filed a Manifestation requesting
third-party claimant independent of or that the cases be terminated and closed,
separately from and without need of availing stating that the judgment award as computed
of the others. If a third-party claimant opted had been complied with to the satisfaction of
to file a proper action to vindicate his claim [petitioners]. Said Manifestation was also
of ownership, he must institute an action, signed by the eight (8) [petitioners].
distinct and separate from that in which the Together with the Manifestation is a Joint
judgment is being enforced, with the court Affidavit dated May 5, 1997 of [petitioners],
of competent jurisdiction even before or attesting to the receipt of payment from
without need of filing a claim in the court
[respondent] and waiving all other benefits The appellate court denied petitioners’
due them in connection with their complaint. motion for reconsideration for having been
filed out of time.
“On June 3, 1997, [petitioners] filed an
Urgent Motion for Issuance of Writ of RULING:
Execution wherein they confirmed that each 1) COMPROMISE AFTER FINAL
of them received P40,000 from [respondent] JUDGMENT. A compromise agreement is a
on May 2, 1997.“On June 9, 1997, contract whereby the parties make reciprocal
[respondent] opposed the motion on the concessions in order to resolve their
ground that the judgment award had been differences and thus avoid or put an end to a
fully satisfied. In their Reply, [petitioners] lawsuit.11 They adjust their difficulties in
claimed that they received only partial the manner they have agreed upon,
payments of the judgment award.“On disregarding the possible gain in litigation
October 20, 1997, six (6) of the eight (8) and keeping in mind that such gain is
[petitioners] filed a Manifestation requesting balanced by the danger of losing. Verily, the
that the cases be considered closed and compromise may be either extrajudicial (to
terminated as they are already satisfied of prevent litigation) or judicial (to end a
what they have received (a total of litigation).
P320,000) from [respondent]. Together with
said Manifestation is a Joint Affidavit in the A compromise must not be contrary to law,
local dialect, dated October 20, 1997, of the morals, good customs and public policy; and
six (6) [petitioners] attesting that they have must have been freely and intelligently
no more collectible amount from executed by and between the parties. To
[respondent] and if there is any, they are have the force of law between the parties, it
abandoning and waiving the same. must comply with the requisites and
principles of contracts. Upon the parties, it
“On February 27, 1998, the Labor Arbiter has the effect and the authority of res
issued an order denying the motion for judicata, once entered into.
issuance of writ of execution and
[considered] the cases closed and terminated When a compromise agreement is given
x x x.“On appeal, the [National Labor judicial approval, it becomes more than a
Relations Commission (hereinafter contract binding upon the parties. Having
‘NLRC’)] reversed the Labor Arbiter and been sanctioned by the court, it is entered as
directed the immediate issuance of a writ of a determination of a controversy and has the
execution, holding that a final and executory force and effect of a judgment. It is
judgment can no longer be altered and that immediately executory and not appealable,
quitclaims and releases are normally except for vices of consent or forgery. The
frowned upon as contrary to public nonfulfillment of its terms and conditions
policy.”The CA held that compromise justifies the issuance of a writ of execution;
agreements may be entered into even after a in such an instance, execution becomes a
final judgment. Thus, petitioners validly ministerial duty of the court.
released respondent from any claims, upon
the voluntary execution of a waiver pursuant General Rule: Article 2040 of the Civil
to the compromise agreement. Code does not refer to the validity of a
compromise agreement entered into after
final judgment. Moreover, an important
requisite, which is lack of knowledge of the The principle of novation supports the
final judgment, is wanting in the present validity of a compromise after final
case. judgment. Novation, a mode of
extinguishing an obligation,43 is done by
Exceptions: The issue involving the validity changing the object or principal condition of
of a compromise agreement notwithstanding an obligation, substituting the person of the
a final judgment is not novel. Jesalva v. debtor, or surrogating a third person in the
Bautista upheld a compromise agreement exercise of the rights of the creditor.44
that covered cases pending trial, on appeal,
and with final judgment. The Court noted For an obligation to be extinguished by
that Article 2040 impliedly allowed such another, the law requires either of these two
agreements; there was no limitation as to conditions: (1) the substitution is
when these should be entered into. Palanca unequivocally declared, or (2) the old and
v. Court of Industrial Relations sustained a the new obligations are incompatible on
compromise agreement, notwithstanding a every point.45 A compromise of a final
final judgment in which only the amount of judgment operates as a novation of the
back wages was left to be determined. The judgment obligation, upon compliance with
Court found no evidence of fraud or of any either requisite.46 In the present case, the
showing that the agreement was contrary to incompatibility of the final judgment with
law, morals, good customs, public order, or the compromise agreement is evident,
public policy. Gatchalian v. Arlegui upheld because the latter was precisely entered into
the right to compromise prior to the to supersede the former.
execution of a final judgment. The Court
ruled that the final judgment had been 2) WAIVER OF QUITCLAIMS. The
novated and superseded by a compromise presence or the absence of counsel when a
agreement. Also, Northern Lines, Inc. v. waiver is executed does not determine its
Court of Tax Appeals recognized the right to validity. There is no law requiring the
compromise final and executory judgments, presence of a counsel to validate a waiver.
as long as such right was exercised by the The test is whether it was executed
proper party litigants. voluntarily, freely and intelligently; and
whether the consideration for it was credible
There is no justification to disallow a and reasonable. Where there is clear proof
compromise agreement, solely because it that a waiver was wangled from an
was entered into after final judgment. The unsuspecting or a gullible person, the law
validity of the agreement is determined by must step in to annul such transaction.
compliance with the requisites and
principles of contracts, not by when it was In the present case, petitioners failed to
entered into. As provided by the law on present any evidence to show that their
contracts, a valid compromise must have the consent had been vitiated.
following elements: (1) the consent of the
parties to the compromise, (2) an object “Should the parties arrive at any agreement
certain that is the subject matter of the as to the whole or any part of the dispute,
compromise, and (3) the cause of the the same shall be reduced to writing and
obligation that is established. signed by the parties and their respective
counsel, or authorized representative, if
any,50 before the Labor Arbiter.
“The settlement shall be approved by the
Labor Arbiter after being satisfied that it
was voluntarily entered into by the parties
and after having explained to them the terms
and consequences thereof.

“A compromise agreement entered into by

the parties not in the presence of the Labor
Arbiter before whom the case is pending
shall be approved by him, if after
confronting the parties, particularly the
complainants, he is satisfied that they
understand the terms and conditions of the
settlement and that it was entered into freely
and voluntarily by them and the agreement
is not contrary to law, morals, and public

This provision refers to proceedings in a

mandatory/conciliation conference during
the initial stage of the litigation. Such
provision should be made applicable to the
proceedings in the pre-execution conference,
for which the procedure for approving a
waiver after final judgment is not stated.
There is no reason to make a distinction
between the proceedings in
mandatory/conciliation and those in pre-
execution conferences.