FIRST DIVISION
[G.R. No. 117097.March 21, 1997]
SAMAHAN NG OPTOMETRISTS SA PILIPINAS, ILOCOS SUR-ABRA CHAPTER,
EDUARDO MA. GUIRNALDA, DANTE G. PACQUING and OCTAVIO A. DE
PERALTA,petitioners, vs. ACEBEDO INTERNATIONAL CORPORATION and the
HON. COURT OF APPEALS,respondents.
D E C I S I O N
HERMOSISIMA, JR.,J.:
Before us is a petition seeking the review and ultimately the
reversal of the decision[1]of the Court of Appeals[2]which rejected
what petitioners vehemently claim to be a prohibition, under
Republic Act (RA.) No. 1998, popularly known as the old Optometry
Law, against the employment by corporations, usually optical shops
and eyeware stores, of optometrists, such practice, according to
petitioners, being an indirect violation of the rule against
corporations exercising professions reserved only to natural
persons. Petitioners understandably did not welcome the herein
assailed decision because they have, earlier, obtained a
decision[3]favorable to them from the Regional Trial Court of
Candon, Ilocos Sur, Branch 23, presided over by Judge Gabino
Balbin, Jr. The said judge had, in the main, ruled that the
operations of private respondent Acebedo International Corporation
involves the practice of optometry which is precluded by RA. No.
1998.
The undisputed facts of the case, as found by the respondent
Court of Appeals and quoted by petitioners, are as follows:
"On February 22, 1991, x x x [private respondent] filed an
application with the Office of the Mayor of Candon, Ilocos Sur, for
the issuance of a permit for the opening and operation of a branch
of the Acebedo Optical in that municipality.
The application was opposed by the x x x [petitioner] Samahan ng
Optometrists sa Pilipinas (SOP) which contended that x x x [private
respondent] is a juridical entity not qualified to practice
optometry.
On March 6, 1991, x x x [private respondent] filed its answer,
arguing it is not the corporation, but the optometrists employed by
it, who would be practicing optometry.
On April 17, 1991, the Mayor of Candon created a committee,
composed of "public respondents Eduardo Ma. Guirnalda, Dante G.
Pacquing and Octavio de Peralta, to pass on [private respondent's]
application.
On September 26, 1991 the committee rendered a decision denying
[private respondent's] application for a mayor's permit to operate
a branch in Candon and ordering x x x [private respondent] to close
its establishment within fifteen (15) days from receipt of the
decision. Acebedo moved for a reconsideration but its motion was
denied on November 14, 1991. x x x [Private respondent] was ordered
to close its establishment within ten (10) days from receipt of the
order.
On December 9, 1991, x x x [private respondent] filed with the
Court of Appeals a petition forcertiorari(CA G.R SP No. 26782),
questioning the decision of respondent committee. Its petition,
however, was referred to the courta quo, which on December 16,
1992, dismissed Acebedo's petition. Hence, x x x [the] appeal [to
the respondent Court of Appeals]."[4]The singular issue, admittedly
extensively debated and intensely contested not only by the members
of the optometry profession and the players in the business of
selling optical ware, supplies, substances and instruments but also
by the members of the Senate during the deliberations respecting R
A. 8050, otherwise known as Revised New Optometry Law, is this: May
corporations, engaged in the business of selling optical wares,
supplies, substances and instruments which, as an incident to and
in the ordinary course of the business hire optometrists, be said
to be practicing the profession of optometry which, by legal
mandate, may only be engaged in by natural persons possessed of
specific legal qualifications?
The trial court resolved this issue in the affirmative. In so
finding, it explained, thus:
"The denial of the application of Acebedo rested on the grounds
that it is operating an optical shop and it is practicing optometry
where its charter does not grant to it authority to practice the
former. Acebedo submits that the findings of the Commission have no
basis both in law and in fact. It argues that the hiring of
optometrists by the petitioner is merely incidental to its main
business which is the sale of optical products. Acebedo contends
further that its employees have a personality separate and distinct
from that of Acebedo which is a juridical entity, and it cannot
therefore be considered as engaged in optometry.
The Court disagrees.
Quoted for the enlightenment of both parties is a portion of the
contested Decision, to wit:
'The visit revealed the following:
1.The establishment was manned by three personnel: Dr. Salvador
Pagarigan, optometrist; Miss Lilibeth Begonia, receptionist; and a
laboratory technician, who refused to give his name;
2.There were several shelves containing eyeglasses;
3.There were benches where, according to Miss Begonia, would-be
clients can sit while waiting for their turn to be examined;
4.An examination room complete with an optical chair and optical
charts; and,
5.An optical laboratory.'
The Court is very much aware of the existence of several shops
owned by Acebedo. They are operating up to the present. But the
Court has to rely in this case on the findings of the Commission
created by the Mayor of Candon in the absence of proof that the
same was arrived at hastily and without regard for the rights of
the parties. In fact, the contested Decision was issued only after
an ocular inspection was conducted and the parties have submitted
their respective memorandum.
The findings of the Commission reveal that the operation of
Acebedo's local shop involves the practice of optometry. If indeed
Acebedo is engaged in the sale of optical products, the absence of
sales clerks more than demonstrate its real business. In the
contested Decision, the floor plan of the shop was even commented
on as that of an optical shop. As noted by the members of the
Commission, there was also a banner in front of the shop
prominently display advertising free consultations (libreng
consulta sa mata). These facts, taken together, denote that Acebedo
was operating in Candon an optical shop contrary to law.
While it is also true that a corporation has a personality
separate and distinct from that of its personnel, the veil of
corporate fiction cannot be used for the purpose of some illegal
activity. The veil of corporate fiction can be pierced, as in this
case, and the acts of the personnel of the corporation will be
considered as those of the corporation. Acebedo then is engaged in
the practice of optometry."[5]Disagreeing with the foregoing
decision of the trial court, private respondent appealed therefrom
and asked the respondent Court of Appeals to reverse the same on
the ground that the courta quoerred in concluding that private
respondent was engaged in the practice of optometry by operating an
optical shop.
Respondent appellate court found that private respondent's
contentions merited the reversal of the courta quo's decision. The
respondent court, speaking through Court of Appeals Presiding
Justice, now Supreme Court Associate Justice Vicente V. Mendoza,
ratiocinated in this wise:
"First.x x x [Private respondent] maintains that it is not
practicing optometry nor is it operating an optical clinic. The
contention has merit. The amended Articles of Incorporation of x x
x [private respondent] in part states:
PRIMARY PURPOSES
1.To own, maintain, conduct, operate and carry on the business
of dispensing opticians and optical establishments, and in the
course of the business, to buy, sell, ship, store and otherwise
use, deal in, acquire and dispose of every kind of optical,
ophthalmic and scientific instrument, glass, lens, optical
solutions or equipment necessary or convenient to the operation and
conduct of the general business of dispensing opticians.
SECONDARY PURPOSES
. . . .
3.To do all and everything necessary, suitable or proper for the
accomplishment of any of the purposes, the attainment of any of the
objects, or in the exercise of any of the powers herein set forth,
either alone or in conjunction with other corporations, firms or
individuals and either as principal or agents and to do every other
act or acts, thing or things, incidental or appurtenant to or
growing out of or connected with the abovementioned objects,
purposes or powers.
Clearly, the corporation is not an optical clinic. Nor is it but
rather the optometrists employed by it who are engaged in the
practice of optometry. Petitioner-appellant simply dispenses
optical and ophthalmic instruments and supplies.
Indeed, the Optometry Law (Rep. Act No. 1998), which x x x
[petitioners] cite, does not prohibit corporations, like x x x
[private respondent; from employing licensed optometrists.
What it prohibits is the practice of the profession without
license by those engaged in it. This is clear from Sec. 2 of the
law which provides:
No person shall practice or attempt to practice optometry as
defined in this Act, without holding a valid certificate of
registration as optometrist issued to him by the Board of Examiners
in Optometry herein created and in accordance with the provisions
hereof: Provided, that valid certificates of registration as
optometrists shall be issued to optometrists of good moral
character now registered in accordance with the provisions of
chapter thirty-three of the Revised Administrative Code, who shall,
by application within a period of one year from the effectivity of
this Act, be exempt from the provisions of sections eleven, twelve
and twenty-three of this Act. . . .
The prohibition is thus addressed to natural persons who are
required to have a valid certificate of registration as
optometrist' and who must be of 'good moral character'. The
prohibition can have no application to x x x [private respondent]
which is not itself engaged in the practice of optometry. As the
Professional Regulation Commission said, "Acebedo Optical, Acebedo
Optical Clinic, Acebedo Optical Co., Inc. and Acebedo
International, Inc. are not natural persons who can take the
Optometrist licensure examinations. They are not, and cannot be
registered as Optometrist under RA 1998 [The Optometry
Law].'"[6]Petitioners filed a Motion for Reconsideration of the
aforegoing decision. It was, however, denied by respondent
appellate court. Hence, this petition anchored on the following
sole ground:
"ISSUE
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN DECLARING
THAT PRIVATE RESPONDENT ACEBEDO INTERNATIONAL CORPORATION DOES NOT
VIOLATE THE OPTOMETRY LAW (R. A. NO. 1998) WHEN IT EMPLOYS
OPTOMETRISTS TO ENGAGE IN THE PRACTICE OF OPTOMETRY UNDER ITS NAME
AND FOR ITS BEHALF
The herein petitioner most respectfully submits that the private
respondent Acebedo International Corporation flagrantly violates R.
A. No. 1998 and the Corporation Code of the Philippines when it
employs optometrists to engage in the practice of optometry under
its name and for its behalf."[7]We hold that the petition lacks
merit.
Private respondent does not deny that it employs optometrists
whose role in the operations of its optical shops is to administer
the proper eye examination in order to determine the correct type
and grade of lenses to prescribe to persons purchasing the same
from private respondent's optical shops. Petitioners vehemently
insist that in so employing said optometrists, private respondent
is in effect itself practicing optometry. Such practice,
petitioners conclude, is in violation of RA. No. 1998, which, it
must be noted at this juncture, has been repealed and superseded by
RA. 8050.
Petitioners' contentions are, however, untenable. The fact that
private respondent hires optometrists who practice their profession
in the course of their employment in private respondent's optical
shops, does not translate into a practice of optometry by private
respondent itself. Private respondent is a corporation created and
organized for the purpose of conducting the business of selling
optical lenses or eyeglasses, among others. The clientele of
private respondent understably, would largely be composed of
persons with defective vision and thus need the proper lenses to
correct the same and enable them to gain normal vision. The
determination of the proper lenses to sell to private respondent's
clientele entails the employment of optometrists who have been
precisely trained for that purpose. Private respondent's business
is not the determination itself of the proper lenses needed by
persons with defective vision. Private respondent's business,
rather, is the buying and importing of eyeglasses and lenses and
other similar or allied instruments from suppliers thereof and
selling the same to consumers.
For petitioners' argument to hold water, there need be clear
showing that RA. No. 1998 prohibits a corporation from hiring
optometrists, for only then would it be undeniably evident that the
intention of the legislature is to preclude the formation of the
so-called optometry corporations because such is tantamount to the
practice of the profession of optometry which is legally
exercisable only by natural persons and professional partnerships.
We have carefully reviewed RA. No. 1998 however, and we find
nothing therein that supports petitioner's insistent claims.[8]It
is significant to note that even under RA. No. 8050, known as the
Revised Optometry Law,[9]we find no prohibition against the hiring
by corporations of optometrists. The pertinent provisions of RA.
No. 8050, regarding the practice of optometry, are reproduced below
for ready reference:
"THE PRACTICE OF OPTOMETRY
SEC. 4.Acts Constituting the practice of Optometry. Any of the
following acts constitute the practice of optometry:
a)The examination of the human eye through the employment of
subjective and objective procedures, including the use of specific
topical diagnostic pharmaceutical agents or drugs and instruments,
tools, equipment, implements, visual aids, apparatuses, machines,
ocular exercises and related devices, for the purpose of
determining the condition and acuity of human vision to correct and
improve the same in accordance with subsections (b), (c) and (d)
hereof; vision to correct and improve the same in accordance with
subsections (b), (c) and (d) hereof;
b)The prescription and dispensing of ophthalmic lenses, prisms,
contact lenses and their accessories and solutions, frames and
their accessories, and supplies for the purpose of correcting and
treating defects, deficiencies and abnormalities of vision.
c)The conduct of ocular exercises and vision training, the
provision of orthoptics and other devices and procedures to aid and
correct abnormalities of human vision, and the installation of
prosthetic devices;
d)The counseling of patients with regard to vision and eye care
and hygiene;
e)The establishment of offices, clinics, and similar places
where optometric services are offered; and
f)The collection of professional fees for the performance of any
of the acts mentioned in paragraphs (a), (b), (c) and (d) of this
section.
SEC. 5.Prohibition Against the Unauthorized Practice of
Optometry. - No person shall practice optometry as defined in
Section 3 of this Act nor perform any of the acts, constituting the
practice of optometry as setforth in Section 4 hereof, without
having been first admitted to the practice of this profession under
the provisions of this Act and its implementing rules and
regulations: Provided, That this prohibition shall not apply to
regularly licensed and duly registered physicians who have received
post-graduate training in the diagnosis and treatment of eye
diseases: Provided, however, That the examination of the human eye
by duly registered physicians in connection with the physical
examination of patients shall not be considered as practice of
optometry: Provided, further, That public health workers trained
and involved in the government's blindness prevention program may
conduct only visual acuity test and visual screening.
SEC. 6Disclosure of Authority to Practice. An optometrist shall
be required to indicate his professional license number and the
date of its expiration in the documents he issues or signs in
connection with the practice of his profession. He shall also
display his certificate of registration in a conspicuous area of
his clinic or office."
All told, there is no law that prohibits the hiring by
corporations of optometrists or considers the hiring by
corporations of optometrists as a practice by the corporation
itself of the profession of optometry.
WHEREFORE, the instant petition is hereby DISMISSED.
Costs against the petitioners.
SO ORDERED.
DOCTORS ROSA P. ALFAFARA, VIVIAN DYHONGPO, MARIA TORRES, EMMA
YBAEZ, ELSA CABARDO, REBECCA SANTIAGO, PRISCILLA NARVASA, SUSIE
CHAN, CLARO CINCO, FELIPE CINCO, CARMEN MODESTO, FELISA LIMKIMSO,
ARLENE DORIO, ROSALINDA BONO, and SUSAN YU, in their own behalf and
in behalf of all the other 80 optometrists-members of the SAMAHAN
NG OPTOMETRISTS SA PILIPINAS-CEBU CHAPTER,petitioners, vs. ACEBEDO
OPTICAL, CO., INC.,respondent.D E C I S I O N
MENDOZA,J.:
This is a petition for review oncertiorariof the
decision,[1]dated January 20, 2000, of the Court of Appeals,
setting aside the decision,[2]dated September 3, 1993, of the
Regional Trial Court, Branch 9, Cebu City, which enjoined
respondent Acebedo Optical Co., Inc., its agents, representatives,
and/or employees from practicing optometry, as defined in 1(a) of
Republic Act No. 1998, in the province and cities of Cebu, and the
resolution, dated May 10, 2001, of the appeals court denying
petitioners motion for reconsideration.
Petitioners are optometrists.They brought, in their own behalf
and in behalf of 80 other optometrists, who are members of the
Samahan ng Optometrists sa Pilipinas-Cebu Chapter, an injunctive
suit in the Regional Trial Court, Branch 9, Cebu City to enjoin
respondent Acebedo Optical Co., Inc. and its agents,
representatives, and/or employees from practicing optometry in the
province of Cebu.In their complaint, they alleged that respondent
opened several optical shops in Cebu and announced to the public,
through leaflets, newspapers, and other forms of advertisement, the
availability of ready-to-wear eyeglasses for sale at P60.00 each
and free services by optometrists in such outlets.They claimed
that, through the licensed optometrists under its employ,
respondent had been engaging in the practice of optometry by
examining the human eye, analyzing the ocular functions,
prescribing ophthalmic lenses, prisms, and contact lenses; and
conducting ocular exercises, visual trainings, orthoptics,
prosthetics, and other preventive or corrective measures for the
aid, correction, or relief of the human eye.They contended that
such acts of respondent were done in violation of the Optometry Law
(R.A. No. 1998)[3]and the Code of Ethics for Optometrists,
promulgated by the Board of Examiners in Optometry on July 11,
1983.They sought payment to them of attorneys fees, litigation
expenses, and the costs of the suit.[4]The trial court at first
dismissed the suit but, on motion of petitioners, reinstated the
action and granted their prayer for a writ of preliminary
injunction and/or restraining order.Petitioners argued that the
case involved a pure question of law,i.e.,whether or not
respondents hiring of optometrists was violative of the applicable
laws, and that, as such, the case was an exception to the rule
requiring exhaustion of administrative remedies as a condition for
the filing of an injunctive suit.They further alleged that the
Board of Optometry held itself to be without jurisdiction over the
president of respondent Acebedo Company as he was not duly
registered with the Professional Regulation Commission.
In its answer, respondent averred that the advertisements
referred to by petitioner were part of its promotion to make known
to the public the opening of its new branches in Cebu; that
incidental to its business of selling optical products, it hired
duly licensed optometrists who conducted eye examination,
prescribed ophthalmic lenses, and rendered other services; that it
exercised neither control nor supervision over the optometrists
under its employ; and that the hired optometrists exercised neither
control nor supervision in the sale of optical products and
accessories by respondent.By way of special and affirmative
defense, respondent stated that the optometrists should be
impleaded as party-defendants because they were indispensable
parties; that the trial court had no jurisdiction over the case;
that the filing of the complaint was barred byres judicataas
similar suits had been previously dismissed by the Court of First
instance of Lucena City and the Securities and Exchange Commission;
and that the petitioners were guilty of forum-shopping.Respondent
sought the recovery ofP100,000.00 as moral damages,P500,000.00 as
exemplary damages, andP100,000.00 as attorneys fees.[5]During the
pre-trial conference, the parties entered into the following
stipulation of facts: that the petitioners were duly licensed
optometrists; that the petitioners were all members of the Samahan
ng Optometrists ng Pilipinas (SOP)-Cebu Chapter; that SOP-Cebu
Chapter was a chapter of SOP Incorporated, a national organization;
that the SOP-Cebu Chapter had a program called Sight Saving Month;
that the Sight Saving Month program was also a program of the SOP
nationwide; that petitioners SOP Sight Saving Month program
provided free consultations; that respondent was a corporation with
several outlets in Cebu; that respondent was selling optical
products and ready-to-wear eyeglasses of limited grades; that
during the opening of its new branches in Cebu, the respondent
advertised its products through leaflets, newspapers, and other
similar means, such as streamers and loudspeakers on board a
vehicle; that respondent hired optometrists who conducted eye
examinations, prescribed ophthalmic lenses, and rendered other
optometry services; and that while the hired optometrists received
their salary from respondent, they are not precluded from seeking
other sources of income.[6]The evidence for the petitioners showed
that respondent advertised its ready-to-wear eyeglasses in
newspapers, posters pasted on the walls, and announcements made in
roving jeeps.A witness testified that he purchased a pair of
eyeglasses for P66.00 (P60.00 plus P6.00 for VAT) without any prior
eye examination by an optometrist.A week later, he had vision
difficulty and consulted an optometrist who advised him to buy a
pair of eyeglasses with the correct grade.Petitioners thus sought
to prove that the selling of ready-to-wear eyeglasses by respondent
was detrimental to the public.
On the other hand, respondent maintained that before the
customers purchased the ready-to-wear eyeglasses on display, they
either have a prior prescription from an optometrist or had to be
examined first by the branch optometrist.Customers thus had the
option either to buy the ready-to-wear eyeglasses on display or to
order a new pair of eyeglasses.
After hearing, judgment was rendered in favor of petitioners.The
trial court found that the hiring of licensed optometrists by the
respondent was unlawful because it resulted in the practice of the
optometry profession by respondent, a juridical person.It ruled
that respondent could not raise the issue ofres judicataas there
was no decision on the merits of the case rendered by any court of
competent jurisdiction and, consequently, petitioners could not be
guilty of forum-shopping.As to petitioners failure to implead the
optometrists in the employ of respondent, the trial court explained
that since the issue involved the propriety of respondents hiring
of optometrists to perform optometry services, the optometrists did
not have to be impleaded as defendants.As to whether respondents
selling of ready-to-wear eyeglasses to customers without prior eye
examination violated the applicable laws and was detrimental to the
public, the trial court ruled that petitioners failed to
substantiate such claim.
Respondent appealed to the Court of Appeals contending that the
trial court erred in holding that respondent was illegally engaged
in the practice of Optometry; that being indispensable parties, the
licensed optometrists employed by respondent should have been
impleaded as defendants; and that the trial court erred in not
holding that petitioners, by filing several harassment suits before
various fora, were guilty of forum-shopping.
The Court of Appeals reversed the decision of the trial court
and dismissed the complaint of petitioners.Citing the case
ofSamahan ng Optometrists sa Pilipinas, Ilocos Sur-Abra Chapter v.
Acebedo International Corporation,[7]the appeals court ruled that
respondents hiring of licensed optometrists did not constitute
practice of optometry nor violate any law.As to the second issue
raised, the Court of Appeals stated that since the complaint was
lodged solely against respondent for its hiring of optometrists,
whatever decision the trial court would render would solely affect
respondent since what was sought to be restrained was the
employment of licensed optometrists; hence, the optometrists were
not indispensable parties.Anent the issue of forum-shopping, the
appeals court found no cogent reason to reverse the findings of the
trial court that the administrative case before the Professional
Regulation Commission was not decided on the merits while the
letters of petitioners sent to government officials did not
constitute judicial proceedings.
Petitioners filed a motion for reconsideration but their motion
was denied.Hence, this petition alleging that the Court of Appeals
erred in holding that respondent Acebedo was not engaged in the
practice of optometry.
The petition has no merit.
First.Petitioners contend that the ruling inSamahan ng
Optometrists sa Pilipinas, Ilocos Sur-Abra Chapter v. Acebedo
International Corporation[8]is no longer controlling because of the
later case ofApacionado v.Professional Regulation
Commission.[9]InApacionado,petitioners Ma. Cristina Apacionado and
Zenaida Robil, who were employed by Acebedo as optometrists, were
suspended from the practice of optometry for two (2) years by the
Board of Optometry for violation of R.A. No. 1998 and Art. III, 6
of the Code of Ethics for Optometrists for having participated in
the promotional advertisement of Acebedo, entitledLibreng Konsulta
sa Mata: Reading Glasses P60.00,held from July 5-14, 1989 in
Tuguegarao, Cagayan.In affirming the suspension of the
optometrists, the Professional Regulation Commission found that by
rendering professional services to Acebedos clientele (free eye
consultations and refractions), petitioners were guilty of
unprofessional conduct.Consequently, their professional licenses as
optometrists were suspended for two (2) years.This was because the
services of the two optometrists were the ones being offered to the
public for free.The decision of the Professional Regulation
Commission was affirmed by the Court of Appeals and later by this
Court.As our resolution, dated July 12, 1999,[10]stated in
pertinent parts:
Thus, the instant petition which must likewise fail.
The Court finds the decision of the Court of Appeals to be in
accordance with the law.The Rules and Regulation[s] of the Board of
Examiners for [O]ptometry are quite explicit, and Rule 56
provides:
Rule 56. Acts Constituting Unprofessional Conduct.- It shall be
considered unprofessional for any registered optometrist:
(1)To make optometric examinations outside of his regular
clinic, unless he shall have received an unsolicited written
request by the person or persons to be examined;
(2)To advertise a price or prices [of] spectacle frames,
mountings, or ophthalmic lenses and other ophthalmic devices used
in the practice of Optometry and to be associated with, or remain
in the employ of, any person who does such advertising;
.
(4) To advertise free examination, examination included,
discounts, installments, wholesale and retail, or similar words and
phrases which would tend to remove the spirit of
professionalism;
.
(11) To use Mobile Units for conducting refraction in any area
within ten (10) kilometers of a Municipality.
Likewise, Section 6 of the Code of Ethics for optometrists
states:
SEC. 6.The following are deemed, among others, to be unethical
and are deemed to constitute unprofessional conduct:
.
c. Performing optometric examination outside of the regular
office, unless he shall have received unsolicited request to make
such an examination.
.
u. To use Mobile Units for conducting refraction in any area
within ten (10) kilometers of a Municipality.
These provisions petitioners, through Acebedo, were found to
have violated.
Petitioners cannot deny that it was their skills as optometrists
as well as their licenses which Acebedo used in order to enable
itself to render optometric services to its clientele.Under such
arrangement, petitioners acted as tools of Acebedo so that the
latter can offer the whole package of services to its
clientele.
Corollarily, Republic Act No. 1998 pertinently provides:
SEC. 20.Revocation or suspension of certificate. - The Board
may, after giving proper notice and hearing to thepartyconcerned,
revoke or suspend a certificate of registration for the causes
mentioned in the next preceding section, or for unprofessional
conduct.
Having knowingly allowed themselves to be used as tools in
furtherance of [the] unauthorized practice of optometry,
petitioners are clearly liable for unethical and unprofessional
practice of their profession.The Court, thus finds no error
committed by the Court of Appeals.
WHEREFORE, petition is denied due course.
Petitioners cite the Tennessee Supreme Court statement inLens
Crafter, Inc. v. Sunquist,[11]stating that:
The logical result would be that corporations and business
partnerships might practice law, medicine, dentistry or any other
profession by the simple expedient of employing licensed
agents.And, if this were permitted, professional standards would be
practically destroyed and professions requiring special training
would be commercialized, to the public detriment.The ethics of any
profession is based upon personal or individual responsibility.
The contention has no merit.An optometrist is a person who has
been certified by the Board of Optometry and registered with the
Professional Regulation Commission as qualified to practice
optometry in the Philippines.[12]Thus, only natural persons can
engage in the practice of optometry and not
corporations.Respondent, which is not a natural person, cannot take
the licensure examinations for optometrist and, therefore, it
cannot be registered as an optometrist under R.A. No. 1998.It is
noteworthy that, inApacionado,the Court did not find Acebedo to be
engaged in the practice of optometry.The optometrists in that case
were found guilty of unprofessional conduct and their licenses were
suspended for two (2) years for having participated, in their
capacities as optometrists, in the implementation of the
promotional advertisement of Acebedo. In contrast, in the case at
bar, respondent is merely engaged in the business of selling
optical products, not in the practice of optometry, whether
directly or indirectly, through its hired optometrists.
InSamahan ngOptometrists sa Pilipinas, Ilocos Sur-Abra Chapter
v. Acebedo International Corporation,[13]petitioners opposed
respondent Acebedos application for a municipal permit to operate a
branch in Candon, Ilocos Sur.They brought suit to enjoin respondent
Acebedo from employing optometrists as this allegedly constituted
an indirect violation of R.A. No. 1998, which prohibits
corporations from exercising professions reserved only to natural
persons.The committee created by the Mayor of Candon to pass on
Acebedos application denied the same and ordered the closure of
Acebedo optical shops.Acebedo appealed but its appeal was dismissed
by the trial court on the ground that it was practicing
optometry.On appeal, the Court of Appeals held that Acebedo was not
operating as an optical clinic nor engaged in the practice of
optometry, although it employed licensed optometrists.Acebedo
simply dispensed optical and ophthalmic instruments and supplies.It
was pointed out that R.A. No. 1998 does not prohibit corporations
from employing licensed optometrists.What it prohibits is the
practice of optometry by individuals who do not have a license to
practice.The prohibition is addressed to natural persons who are
required to have a valid certificate of registration as optometrist
and who must be of good moral character. This Court affirmed the
ruling of the appeals court and explained that even under R.A. No.
8050 (Revised Optometry Law) there is no prohibition against the
hiring by corporations of optometrists. The fact that Acebedo hired
optometristswhopracticed their profession in the course of their
employment in Acebedos optical shops did not mean that it was
itself engaged in the practice of optometry.
We see no reason to deviate from the ruling that a duly licensed
optometrist is not prohibited from being employed by respondent and
that respondent cannot be said to be exercising the optometry
profession by reason of such employment.
Second.Petitioners argue that an optometrist, who is employed by
a corporation, such as Acebedo, is not acting on his own capacity
but as an employee or agent of the corporation.They contend that,
as a mere employee or agent, such optometrist cannot be held
personally liable for his acts done in the course of his employment
as an optometrist under the following provisions of the Civil
Code.Thus,
Art. 1897. The agent who acts as such is not personally liable
to the party with whom he contracts, unless he expressly binds
himself or exceeds the limits of his authority without giving such
party sufficient notice of his powers.
Art.1910. The principal must comply with all the obligations
which the agent may have contracted within the scope of his
authority.
As for any obligation wherein the agent has exceeded his power,
the principal is not bound except when he ratifies it expressly or
tacitly.
This contention likewise has no merit.While the optometrists are
employees of respondent, their practice of optometry is separate
and distinct from the business of respondent of selling optical
products.They are personally liable for acts done in the course of
their practice in the same way that if respondent is sued in court
in connection with its business of selling optical products, the
optometrists need not be impleaded as party defendants.In that
regard, the Board ofOptometry and the Professional Regulation
Commission regulate their practice and have exclusive original
jurisdiction over them.
In the later case ofAcebedo Optical Company, Inc. v. Court of
Appeals,[14]petitioner Acebedo was granted by the City Mayor of
Iligan a business permit subject to certain conditions, to wit:
1.Since it is a corporation, Acebedo cannot put up an optical
clinic but only a commercial store;
2.Acebedo cannot examine and/or prescribe reading and similar
optical glasses for patients, because these are functions of
optical clinics;
3.Acebedo cannot sell reading and similar eyeglasses without a
prescription having first been made by an independent optometrist
(not its employee)or independent optical clinic.Acebedo can only
sell directly to the public, without need of a prescription,
Ray-Ban and similar eyeglasses;
4.Acebedo cannot advertise optical lenses and eyeglasses, but
can advertise Ray-Ban and similar glasses and frames;
5.Acebedo is allowed to grind lenses but only upon the
prescription of an independent optometrist.
The Samahang Optometrist sa Pilipinas-Iligan Chapter sought the
cancellation and/or revocation of Acebedos permit on the ground
that it had violated the conditions for its business permit.After
due investigation, Acebedo was found guilty of violating the
conditions of its permit and, as a consequence, its permit was
cancelled.Acebedo was advised that its permit would not be
renewed.Acebedo filed a petition forcertiorari, prohibition, and
mandamus in the Regional Trial Court, but its petition was
dismissed for non-exhaustion of administrative remedies.Acebedo
then filed a petition for certiorari, prohibition, and mandamus
with the Court of Appeals.At first, its petition was dismissed.On
appeal, however, the decision of the Court of Appeals was
reversed.This Court held that a business permit is issued primarily
to regulate the conduct of a business and, therefore, the City
Mayor cannot, through the issuance of such permit, regulate the
practice of a profession, like optometry.This Court held Acebedo to
be entitled to a permit to do business as an optical shop because,
although it had duly licensed optometrists in its employ, it did
not apply for a license to engage in the practice of optometry as a
corporate body or entity.
WHEREFORE, the petition is DENIED for lack of showing that the
Court of Appeals committed a reversible error.
SO ORDERED.
CONCEPT BUILDERS, INC.,petitioner,vs. THE NATIONAL LABOR
RELATIONS COMMISSION, (First Division); and Norberto Marabe,
Rodolfo Raquel, Cristobal Riego, Manuel Gillego, Palcronio Giducos,
Pedro Aboigar, Norberto Comendador, Rogello Salut, Emilio Garcia,
Jr., Mariano Rio, Paulina Basea, Aifredo Albera, Paquito Salut,
Domingo Guarino, Romeo Galve, Dominador Sabina, Felipe Radiana,
Gavino Sualibio, Moreno Escares, Ferdinand Torres, Felipe Basilan,
and Ruben Robalos,respondents.D E C I S I O N
HERMOSISIMA, JR.,J.:The corporate mask may be lifted and the
corporate veil may be pierced when a corporation is just but the
alter ego of a person or of another corporation. Where badges of
fraud exist; where public convenience is defeated; where a wrong is
sought to be justified thereby, the corporate fiction or the notion
of legal entity should come to naught.The law in these instances
will regard the corporation as a mere association of persons and,
in case of two corporations, merge them into one.
Thus, where a sister corporation is used as a shield to evade a
corporations subsidiary liability for damages, the corporation may
not be heard to say that it has a personality separate and distinct
from the other corporation.The piercing of the corporate veil comes
into play.
This special civil action ostensibly raises the question of
whether the National Labor Relations Commission committed grave
abuse of discretion when it issued a break-open order to the
sheriff to be enforced against personal property found in the
premises of petitioners sister company.
Petitioner Concept Builders, Inc., a domestic corporation, with
principal office at355Maysan Road, Valenzuela, Metro Manila, is
engaged in the construction business.Private respondents were
employed by said company as laborers, carpenters and riggers.
On November, 1981, private respondents were served individual
written notices of termination of employment by petitioner,
effective onNovember 30, 1981.It was stated in the individual
notices that their contracts of employment had expired and the
project in which they were hired had been completed.
Public respondent found it to be, the fact, however, that at the
time of the termination of private respondents employment, the
project in which they were hired had not yet been finished and
completed.Petitioner had to engage the services of sub-contractors
whose workers performed the functions of private respondents.
Aggrieved, private respondents filed a complaint for illegal
dismissal, unfair labor practice and non-payment of their legal
holiday pay, overtime pay and thirteenth-month pay against
petitioner.
OnDecember 19, 1984, the Labor Arbiter rendered
judgment1ordering petitioner to reinstate private respondents and
to pay them back wages equivalent to one year or three hundred
working days.
OnNovember 27,1985,the National Labor Relations Commission
(NLRC) dismissed the motion for reconsideration filed by petitioner
on the ground that the said decision had already become final and
executory.2OnOctober 16, 1986, the NLRC Research and Information
Department made the finding that private respondents backwages
amounted to P199,800.00.3OnOctober 29, 1986, the Labor Arbiter
issued a writ of execution directing the sheriff to execute the
Decision, datedDecember 19, 1984.The writ was partially satisfied
through garnishment of sums from petitioners debtor, the
Metropolitan Waterworks and Sewerage Authority, in the amount of
P81,385.34.Said amount was turned over to the cashier of the
NLRC.
OnFebruary 1, 1989, an Alias Writ of Execution was issued by the
Labor Arbiter directing the sheriff to collect from herein
petitioner the sum of P117,414.76, representing the balance of the
judgment award, and to reinstate private respondents to their
former positions.
On July 13, 1989, the sheriff issued a report stating that he
tried to serve the alias writ of execution on petitioner through
the security guard on duty but the service was refused on the
ground that petitioner no longer occupied the premises.
On September 26, 1986, upon motion of private respondents, the
Labor Arbiter issued a second alias writ of execution.
The said writ had not been enforced by the special sheriff
because, as stated in his progress report, datedNovember 2,
1989:
1. All the employees inside petitioners premises at355Maysan
Road, Valenzuela, Metro Manila, claimed that they were employees of
Hydro Pipes Philippines, Inc. (HPPI) and not by respondent;
2. Levy was made upon personal properties he found in the
premises;
3. Security guards with high-powered guns prevented him from
removing the properties he had levied upon.4The said special
sheriff recommended that a break-open order be issued to enable him
to enter petitioners premises so that he could proceed with the
public auction sale of the aforesaid personal properties onNovember
7, 1989.
OnNovember 6, 1989, a certain Dennis Cuyegkeng filed a
third-party claim with the Labor Arbiter alleging that the
properties sought to be levied upon by the sheriff were owned by
Hydro (Phils.), Inc. (HPPI) of which he is the Vice-President.
OnNovember 23, 1989, private respondents filed a Motion for
Issuance of a Break-Open Order, alleging that HPPI and petitioner
corporation were owned by the same incorporator! stockholders.They
also alleged that petitioner temporarily suspended its business
operations in order to evade its legal obligations to them and that
private respondents were willing to post an indemnity bond to
answer for any damages which petitioner and HPPI may suffer because
of the issuance of the break-open order.
In support of their claim against HPPI, private respondents
presented duly certified copies of the General Informations Sheet,
datedMay 15, 1987, submitted by petitioner to the Securities and
Exchange Commission (SEC) and the General Information Sheet,
datedMay15,1987, submitted by HPPI to the Securities and Exchange
Commission.
The General Information Sheet submitted by the petitioner1
revealed the following:
1.Breakdown of Subscribed CapitalName of StockholderAmount
Subscribed
HPPIP6,999,500.00
Antonio W. Lim2,900,000.00
Dennis S. Cuyegkeng300.00
Elisa C. Lim100,000.00
Teodulo R. Dino100.00
Virgilio O. Casino100.00
2.Board of DirectorsAntonio W. LimChairman
Dennis S. CuyegkengMember
Elisa C. LimMember
Teodulo R. DinoMember
Virgilio O. CasinoMember
3.Corporate OfficersAntonio W. LimPresident
Dennis S. CuyegkengAssistant to the President
Elisa 0. LimTreasurer
Virgilio O. CasinoCorporate Secretary
4.Principal Office355 Maysan Road
Valenzuela, MetroManila.5On the other hand, the General
Information Sheet of HPPI revealed the following:
1.Breakdown of Subscribed CapitalName of StockholderAmount
Subscribed
Antonio W. LimP400,000.00
Elisa C. Lim57,700.00
AWL Trading455,000.00
Dennis S. Cuyegkeng40,100.00
Teodulo R. Dino100.00
Virgilio O. Casino100.00
2.Board of DirectorsAntonio W. LimChairman
Elisa C. LimMember
Dennis S. CuyegkengMember
Virgilio O. CasinoMember
Teodulo R. DinoMember
3. Corporate OfficersAntonio W. LimPresident
Dennis S. CuyegkengAssistant to the President
Elisa O. LimTreasurer
Virgilio O. CasinoCorporate Secretary
4. Principal Office355 Maysan Road, Valenzuela,
MetroManila.6OnFebruary 1, 1990, HPPI filed an Opposition to
private respondents motion for issuance of a break-open order,
contending that HPPI is a corporation which is separate and
distinct from petitioner. HPPI also alleged that the two
corporations are engaged in two different kinds of businesses,
i.e., HPPI is a manufacturing firm while petitioner was then
engaged in construction.
OnMarch 2, 1990, the Labor Arbiter issued an Order which denied
private respondents motion for break-open order.
Private respondents then appealed to the NLRC. OnApril 23, 1992,
the NLRC set aside the order of the Labor Arbiter, issued a
break-open order and directed private respondents to file a
bond.Thereafter, it directed the sheriff to proceed with the
auction sale of the properties already levied upon. It dismissed
the third-party claim for lack of merit.
Petitioner moved for reconsideration but the motion was denied
by the NLRC in a Resolution, datedDecember 3, 1992.
Hence, the resort to the present petition.
Petitioner alleges that the NLRC committed grave abuse of
discretion when it ordered the execution of its decision despite a
third-party claim on the levied property.Petitioner further
contends, that the doctrine of piercing the corporate veil should
not have been applied, in this case, in the absence of any showing
that it created HPPI in order to evade its liability to private
respondents.It also contends that HPPI is engaged in the
manufacture and sale of steel, concrete and iron pipes, a business
which is distinct and separate from petitioners construction
business.Hence, it is of no consequence that petitioner and HPPI
shared the same premises, the same President and the same set of
officers and subscribers.7We find petitioners contention to be
unmeritorious.
It is a fundamental principle of corporation law that a
corporation is an entity separate and distinct from its
stockholders and from other corporations to which it may be
connected.8But, this separate and distinct personality of a
corporation is merely a fiction created by law for convenience and
to promote justice.9So, when the notion of separate juridical
personality is used to defeat public convenience, justify wrong,
protect fraud or defend crime, or is used as a device to defeat the
labor laws,10this separate personality of the corporation may be
disregarded or the veil of corporate fiction pierced.11This is true
likewise when the corporation is merely an adjunct, a business
conduit or an alter ego of another corporation.12The conditions
under which the juridical entity may be disregarded vary according
to the peculiar facts and circumstances of each case.No hard and
fast rule can be accurately laid down, but certainly, there are
some probative factors of identity that will justify the
application of the doctrine of piercing the corporate veil, to
wit:
1.Stock ownership by one or common ownership of both
corporations.
2.Identity of directors and officers.
3.The manner of keeping corporate books and records.
4.Methods of conducting the business.13The SEC en banc explained
the instrumentality rule which the courts have applied in
disregarding the separate juridical personality of corporations as
follows:
Where one corporation is so organized and controlled and its
affairs are conducted so that it is, in fact, a mere
instrumentality or adjunct of the other, the fiction of the
corporate entity of the instrumentality may be disregarded.The
control necessary to invoke the rule is not majority or even
complete stock control but such domination of finances, policies
and practices that the controlled corporation has, so to speak, no
separate mind, will or existence of its own, and is but a conduit
for its principal. It must be kept in mind that the control must be
shown to have been exercised at the time the acts complained of
took place.Moreover, the control and breach of duty must
proximately cause the injury or unjust loss for which the complaint
is made.The test in determining the applicability of the doctrine
of piercing the veil of corporate fiction is as follows:
1. Control, not mere majority or complete stock control, but
complete domination, not only of finances but of policy and
business practice in respect to the transaction attacked so that
the corporate entity as to this transaction had at the time no
separate mind, will or existence of its own;2. Such control must
have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal
duty, or dishonest and unjust act in contravention of plaintiffs
legal rights; and3. The aforesaid control and breach of duty must
proximately cause the injury or unjust loss complained of.The
absence of any one of these elements prevents piercing the
corporate veil. in applying the instrumentality or alter ego
doctrine, the courts are concerned with reality and not form, with
how the corporation operated and the individual defendants
relationship to that operation.14Thus, the question of whether a
corporation is a mere alter ego, a mere sheet or paper corporation,
a sham ora subterfuge is purely one of fact.15In this case, the
NLRC noted that, while petitioner claimed that it ceased its
business operations onApril 29, 1986, it filed an Information Sheet
with the Securities and Exchange Commission onMay 15, 1987, stating
that its office address is at355Maysan Road, Valenzuela, Metro
Manila. On the other hand, HPPI, the third-party claimant,
submitted on the same day, a similar information sheet stating that
its office address is at355Maysan Road, Valenzuela, Metro
Manila.
Furthermore, the NLRC stated that:
Both information sheets were filed by thesameVirgilio O. Casino
as the corporate secretary of both corporations. It would also not
be amiss to note that both corporations had thesamepresident, the
same board of directors, thesamecorporate officers, and
substantially thesamesubscribers.From the foregoing, it appears
that, among other things, the respondent (herein petitioner) and
the third-party claimant shared the same address and/or premises.
Under this circumstances, (sic) it cannot be said that the property
levied upon by the sheriff were not of respondents.16Clearly,
petitioner ceased its business operations in order to evade the
payment to private respondents of backwages and to bar their
reinstatement to their former positions.HPPI is obviously a
business conduit of petitioner corporation and its emergence was
skillfully orchestrated to avoid the financial liability that
already attached to petitioner corporation.
The facts in this case are analogous toClaparols v. Court of
Industrial Relations17where we had the occasion to rule:
Respondent courts findings that indeed the Claparols Steel and
Nail Plant, which ceased operation of June 30, 1957, was SUCCEEDED
by the Claparols Steel Corporation effective the next day, July 1,
1957, up to December 7, 1962, when the latter finally ceased to
operate, were not disputed by petitioner. it is very clear that the
latter corporation was a continuation and successor of the first
entity x x x. Both predecessors and successor were owned and
controlled by petitioner Eduardo Claparols and there was no break
in the succession and continuity of the same business. This
avoiding-the-liability scheme is very patent, considering that 90%
of the subscribed shares of stock of the Claparols Steel
Corporation (the second corporation) was owned by respondent x x x
Claparols himself, and all the assets of the dissolved Claparols
Steel and Nail Plant were turned over to the emerging Claparols
Steel Corporation.It is very obvious that the second corporation
seeks the protective shield of a corporate fiction whose veil in
the present case could, and should, be pierced as it was
deliberately and maliciously designed to evade its financial
obligation to its employees.
In view of the failure of the sheriff, in the case at bar, to
effect a levy upon the property subject of the execution, private
respondents had no other recourse but to apply for a break-open
order after the third-party claim of HPPI was dismissed for lack of
merit by the NLRC. This is in consonance with Section 3, Rule VII
of the NLRC Manual of Execution of Judgment which provides
that:
Should the losing party, his agent or representative, refuse or
prohibit the Sheriff or his representative entry to the place where
the property subject of execution is located or kept, the judgment
creditor may apply to the Commission or Labor Arbiter concerned for
a break-open order.Furthermore, our perusal of the records shows
that the twin requirements of due notice and hearing were complied
with. Petitioner and the third-party claimant were given the
opportunity to submit evidence in support of their claim.
Hence, the NLRC did not commit any grave abuse of discretion
when it affirmed the break-open order issued by the Labor
Arbiter.
Finally, we do not find any reason to disturb the rule that
factual findings of quasi-judicial agencies supported by
substantial evidence are binding on this Court and are entitled to
great respect, in the absence of showing of grave abuse of a
discretion.18WHEREFORE, the petition is DISMISSED and the assailed
resolutions of the NLRC, datedApril 23, 1992andDecember 3, 1992,
are AFFIRMED.
SO ORDERED.
Padilla (Chairman), Bellosillo, Vitug,andKapunan,
JJ.,concur.
ENRIQUEZ SECURITY SERVICES, INC.,petitioner,vs.VICTOR A.
CABOTAJE,respondent.
D E C I S I O N
CORONA,J.:Sometime in January 1979, respondent Victor A.
Cabotaje was employed as a security guard by Enriquez Security and
Investigation Agency (ESIA). On November 13, 1985, petitioner
Enriquez Security Services, Inc. (ESSI) was incorporated.
Respondent continued to work as security guard in petitioners
agency.
On reaching the age of 60 in July 1997,1respondent applied for
retirement.
Petitioner acknowledged that respondent was entitled to
retirement benefits but opposed his claim that the computation of
such benefits must be reckoned from January 1979 when he started
working for ESIA. It claimed that the benefits must be computed
only from November 13, 1985 when ESSI was incorporated.
Respondent consequently filed a complaint in the National Labor
Relations Commission (NLRC) seeking the payment of retirement
benefits under Republic Act No. (RA) 7641, otherwise known as the
Retirement Pay Law.2On January 15, 1999, labor arbiter Eduardo
Carpio decided in respondents favor:
Complainant is entitled to retirement pay. This entitlement was
not denied by respondents. xxx The computation of this benefits
shall cover the entire period of his employment from January 1979
up to July 16, 1997 based on his latest monthly salary ofP5,383.15
per the payroll sheet submitted by respondents. While respondents
claim that respondent corporation was merely registered with the
DOTC on November 13, 1985, they did not deny however that
complainant was an employee of the then Enriquez Security and
Investigation Agency, and that complainants services with the said
security agency up to the present respondent corporation was
uninterrupted. The obligation of the new company involves not only
to absorb the workers of the dissolved company, but also to include
the length of service earned by the absorbed employee with their
former employer as well. To rule otherwise would be manifestly less
than fair, certainly less than just and equitable.
xxx xxx xxx
WHEREFORE, judgment is hereby rendered ordering respondents to
pay complainant the grand total amount ofP228,581.00 representing
his retirement benefits and other money claims.
SO ORDERED.3On appeal, the NLRC set aside the labor arbiters
award of one-month salary for every year of service for being
excessive. It ruled that under RA 7641, respondent Cabotaje was
entitled to retirement pay equivalent only to one-half month salary
for every year of service. Thus:
WHEREFORE, the assailed decision is hereby set aside and a new
one entered ordering respondents to pay complainant the amount
ofP76,710.60 representing his retirement benefits.
SO ORDERED.4On March 15, 2000, the NLRC denied petitioners
motion for reconsideration.5On May 25, 2000, petitioner filed a
special civil action for certiorari6with the Court of Appeals.
On September 26, 2000, the appellate court affirmed the NLRC
decision.7It also denied the motion for reconsideration on May 8,
2001.8Hence, this petition for review on certiorari9on the
following issues:
1. [w]hether or not the Retirement [Pay] Law has retroactive
effect.
2. [w]hether the whole 5 days service incentive leave or just a
portion thereof equivalent to 1/12 should be included in the month
salary for purposes of computing the retirement pay.
3. [w]hether or not the length of service of a retired employee
in a dissolved company (his former employer) should be included in
his length of service with his last employer for purposes of
computing the retirement pay.10We find no merit in the
petition.
First.Petitioners contention that RA 7641 cannot be applied
retroactively has long been settled in the Guidelines for Effective
Implementation of RA 7641 issued on October 24, 1996 by the
Department of Labor and Employment. Paragraph B of the guidelines
provides:
In reckoning the length of service, the period of employment
with the same employer before the effectivity date of the law on
January 7, 1993 should be included.
Thus, inRufina Patis Factory v. Lucas, Sr.,11we held:
RA 7641 is undoubtedly a social legislation. The law has been
enacted as a labor protection measure and as a curative statute
that absent a retirement plan devised by, an agreement with, or a
voluntary grant from, an employer can respond, in part at least, to
the financial well-being of workers during their twilight years
soon following their life of labor. There should be little doubt
about the fact thatthe law can apply to labor contracts still
existing at the time the statute has taken effect, and thatits
benefits can be reckoned not only from the date of the laws
enactment but retroactively to the time said employment contracts
have started.(emphasis ours)Second.Petitioners insistence that only
1/12 of the service incentive leave (SIL) should be included in the
computation of the retirement benefit has no basis. Section 1, RA
7641 provides:
x x x Unless the parties provide for broader inclusions, the
term one-half (1/2) month salary shall mean fifteen (15) days plus
one-twelfth (1/12) of the 13th month pay and the cash equivalent of
not more than five (5) days of service incentive leave. x x x
Section 5.2, Rule II of the Implementing Rules of Book VI of the
Labor Code further clarifies what comprises the "1/2 month salary"
due a retiring employee:
5.2Components of One-half (1/2) Month Salary. For the purpose of
determining the minimum retirement pay due an employee under this
Rule, the term "one-half month salary" shall include all the
following:
(a) Fifteen (15) days salary of the employee based on his latest
salary rate. x x x;
(b) The cash equivalent of not more than five (5) days of
service incentive leave;(c) One-twelfth of the 13th month pay due
an employee;
(d) All other benefits that the employer and employee may agree
upon that should be included in the computation of the employees
retirement pay.
The foregoing rules are clear that the whole 5 days of SIL are
included in the computation of a retiring employees pay.
Third.It is a well-entrenched doctrine that the Supreme Court
does not pass upon questions of fact in an appeal by certiorari
under Rule 45.12It is not our function to assess and evaluate the
evidence all over again13where the findings of the quasi-judicial
agency and the appellate court on the matter coincide.
The consistent rulings of the labor arbiter, the NLRC and the
appellate court should be respected and petitioners veil of
corporate fiction should likewise be pierced. These are based on
the following uncontroverted facts: (1) respondent worked with ESIA
and petitioner ESSI; (2) his employment with both security agencies
was continuous and uninterrupted; (3) both agencies were owned by
the Enriquez family and (4) petitioner ESSI maintained its office
in the same place where ESIA previously held office.14The attempt
to make the security agencies appear as two separate entities, when
in reality they were but one, was a devise to defeat the law and
should not be permitted. Although respect for corporate personality
is the general rule, there are exceptions. In appropriate cases,
the veil of corporate fiction may be pierced as when it is used as
a means to perpetrate a social injustice or as a vehicle to evade
obligations. Petitioner was thus correctly ordered to pay
respondents retirement under RA 7641, computed from January 1979 up
to the time he applied for retirement in July 1997.
WHEREFORE,the petition is herebyDENIED.Theassailed decision and
resolution of the Court of Appeals areAFFIRMED.Costs against
petitioner.
SO ORDERED.
THIRD DIVISIONTHE HEIRS OF THE LATE PANFILO V.
PAJARILLO,Petitioners,-versus-THE HON. COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION and SAMAHAN NG MGA MANGGAGAWA NG PANFILO
V. PAJARILLO, ALFREDO HOYOHOY, HERMINIO CASTILLO, BERNARDO ROCO,
RODOLFO TORRES, JULIAN JORVINA, LOURDES ROCO, FLORITA YAPOC, MARLON
ALDANA, PARALUMAN ULANG, TOLENTINO SANHI, JOHNNY SORIANO, ANDRES
CALAQUE, ROBERTO LAVAREZ, FRANCISCO MORALES, SALVACION PERINA,
ANTONIO ABALA, ROMEO SALONGA, AUGUR M. MANIPOL, BIENVENIDA TEQUIL,
MARIO ELEP, ALADINO LATIGO, BERNARDINE BANSAL, PEDRO DE BAGUIO,
RICARDO CALICA, LAURA CO, VICENTE RECANA, ELENA TOLLEDO, ALFREDO
PLAZA, SR., HERMINIO BALDONO, FELIPE YAPOC, ARISTON NIPA, and
ALFONSO C. BALDOMAR,Respondents.G.R. No. 155056-57Present:
YNARES-SANTIAGO,J.,Chairperson,AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES,JJ.
Promulgated:
October 19, 2007
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - -x
D E C I S I O N
CHICO-NAZARIO,J.:
In this Petition for Review onCertiorariunder Rule 45 of the
Rules of Court,[1]petitioners, heirs of Panfilo V. Pajarillo, seek
to set aside the Decision,[2]and Resolution,[3]dated 12 March 2002
and 28 August 2002, respectively, of the Court of Appeals in
CA-G.R. SP No. 54330 and CA-G.R. SP No. 54331, reversing the twoPer
CuriamOrders dated 28 October 1996 and 10 January 1997,[4]of the
National Labor Relations Commission (NLRC) in NLRC NCR Cases No.
08-03013-87 and 01-00331-88.
Stripped of the non-essentials, the facts are as follows:
Panfilo V. Pajarillo (Panfilo) was the owner and operator of
several buses plying certain routes in Metro Manila. He used the
namePVP Linerin his buses. Private respondents were employed as
drivers, conductors and conductresses by Panfilo.
During their employment with Panfilo, private respondents worked
at least four times a week or for an average of fifteen working
days per month. They were required to observe a work schedule
starting from4:00in the morning up to10:00in the evening on a
straight time basis.Private respondent drivers were paid a daily
commission of 10%, while private respondent conductors and
conductresses received a daily commission of 7%.In sum, each of the
private respondents earned an average daily commission of
aboutP150.00 a day.They were not given emergency cost of living
allowance (ECOLA), 13thmonth pay, legal holiday pay and service
incentive leave pay.[5]
The following were deducted from the private respondents daily
commissions: (a) costs of washing the assigned buses; (b) terminal
fees; (c) fees for sweeping the assigned buses; (d) fees paid to
thebarangay tanodat bus terminals; and (e) rental fees for the use
of stereo in the assigned buses. Any employee who refused such
deductions were either barred from working or dismissed from
work.[6]Thereafter, private respondents and several co-employees
formed a union calledSAMAHAN NG MGA MANGGAGAWA NG PANFILO V.
PAJARILLO(respondent union).The Department of Labor and Employment
(DOLE) issued a Certificate of Registration in favor of the
respondent union.[7]
Upon learning of the formation of respondent union, Panfilo and
his children ordered some of the private respondents to sign a
document affirming their trust and confidence in Panfilo and
denying any irregularities on his part.Other private respondents
were directed to sign a blank document which turned out to be a
resignation letter.Private respondents refused to sign the said
documents, hence, they were barred from working or were dismissed
without hearing and notice.Panfilo and his children and relatives
also formed a company union where they acted as its directors and
officers.[8]
On25 August 1987, respondent union and several employees filed a
Complaint for unfair labor practice and illegal deduction before
the Labor Arbiter withPanfilo V. Pajarillo Lineras
party-respondent.This was docketed asNLRC/NCR Case No.
00-08-03013-87.[9]On28 September 1987, the respondent union filed
an Amended Complaint alleging this time not only unfair labor
practice and illegal deduction but also illegal dismissal.[10]
On20 January 1988, respondent union and several employees filed
another Complaint for violation of labor standard laws claiming
non-payment of (1) ECOLA, (2) 13thmonth pay, (3) overtime pay, (4)
legal holiday pay, (5) premium pay, and (6) service incentive
leave.The party-respondents in this complaint werePVP LINER INC.
and PANFILO V. PAJARILLO, as its General Manager/Operator.This was
docketed as NLRC Case No. 00-01-00331-88.[11]
Notifications and summons with respect to NLRC/NCR Case No.
00-08-03013-87were addressed and sent toPANFILO V. PAJARILLO,
President/Manager, Panfilo V. Pajarillo Liner,Pasig Line St., Sta.
Ana, Manilaon31 August 1987.The Registry Return Receipt dated4
September 1987was addressed toPanfilo V. Pajarillo,and a signature
therein appears on top of the signature of the name of the
addressee.[12]With regard to NLRC Case No.
00-01-00331-88,notifications and summonses wereaddressed and sent
toTHE PRESIDENT/MANAGER, PVP Liner Inc. and Panfilo V.
Pajarillo,2175 Zamora Street, Sta. Ana, Manilaon 25 January
1988.The Registry Return Receipt dated4 February 1988wasaddressed
toPVP Liner Inc.and was signed by a certainIrene G. Pajarilloas the
addressees agent.[13]Panfilo denied the charges in the
complaints.He maintained that private respondents were not
dismissed from work on account of their union activities; that
private respondents and several of their co-employees either
resigned or were separated from work, or simply abandoned their
employment long before the respondent union was organized and
registered with the DOLE; that the private respondents are not
entitled to ECOLA and 13thmonth pay because they received wages
above the minimum provided by law; that the private respondents are
not entitled to overtime and legal holiday pay because these are
already included in their daily commissions; that the private
respondents are not entitled to five days incentive leave pay
because they work only four days a week; that no deductions were
made in the daily commissions of the private respondents; that the
private respondents voluntarily and directly paid certain
individuals forbarangayprotection and for the cleaning of the
assigned buses; that he had no participation in these
activities/arrangements; that the private respondents were not
dismissed from work; and that the private respondents either
abandoned their jobs or voluntarily resigned from work.[14]
Upon motion of Panfilo, the complaints in NLRC/NCR Case No.
00-08-03013-87and NLRC Case No. 00-01-00331-88were
consolidated.[15]On29 January 1991, Panfilo died.[16]
After hearing and submission by both parties of their respective
position papers and memoranda, Labor Arbiter Manuel P. Asuncion
(Arbiter Asuncion) rendered a Decision[17]dated28 December 1992,
dismissing the consolidated complaints for lack of merit.Thus:
IN THE LIGHT OF ALL THE FOREGOING CONSIDERATIONS, the complaint
should be as it is hereby dismissed for lack of merit.
Respondent union appealed to the NLRC.On18 June 1996, the NLRC
reversed the decision of Arbiter Asuncion and ordered the
reinstatement of, and payment of backwages,ECOLA,13thmonth pay,
legal holiday pay and service incentive leave pay to, private
respondents.[18]The dispositive portion of the NLRC decision
reads:
Wherefore, the appealed decision is hereby set
aside.Accordingly, judgment is hereby rendered directing:
(1)The respondent, PVP Liner, Inc. to reinstate to their former
positions, without loss of seniority rights and other benefits, the
following complainants:Alfredo [Hoyohoy], Bernardo Roco, Rodolfo
Torres, Julian Jorvina, Florita Yapoc, Marlon Aldana, Paraluman
Ulang, Tolentino Sanhi, Johnny Soriano, Andres Calaque, Roberto
Lavarez, Francisco Morales, Salvacion Perina, Antonio Abala,
Alfonso Baldomar, Jr., Romeo Salonga, Augur Manipol, Bienvenida
Tequil, Mario Elep, Aladino Latigo, Bernardine Bansal, Pedro de
Baguio, Ricardo Calica, Laura Co, Vicente Recana, Elena Tolledo,
Alfredo Plaza, Sr., Herminio Baldono, Felioe Yapoc, Ariston Nipa
and Herminia Castillo and to pay them their backwages corresponding
to a period of three (3) years without qualifications and
deductions;
(2)The same respondent PVP Liner, Inc. to pay amounts to be
computed in a hearing called for said purpose by the Arbitration
Branch of Origin, the aforesaid complainants their claims for
emergency cost of living allowance (ECOLA), 13thmonth pay, legal
holiday pay and service incentive leave benefits subject to the
three-year prescriptive period provided under Article 291 of the
Labor Code, as amended;
(3)The dismissal of the claims on alleged illegal deductions of
the respondents for lack of merits; and
(4)The dismissal of the case of Lourdes Roco due to
prescription.
All other claims of the complainants and the respondents are
likewise DISMISSED, for being without merit.
The Arbitration Branch of Origin is hereby directed to enforce
this decision.
Panfilos counsel filed a motion for reconsideration which was
partially granted by the NLRC in its Order dated28 October 1996, to
wit:
Dictated, however, by the imperatives of due process, we find it
more judicious to just remand this case for further hearing on key
questions of:
1)whether or not PVP Liner Inc. was properly impleaded as party
respondent in the consolidated cases below;
2)whether or not summons was properly served on said corporation
below; and
3)whether or not the subject cases can be considered as
principally money claims which have to be litigated in
intestate/testate proceedings involving the estate of the late
Panfilo V. Pajarillo.
WHEREFORE, our decision datedJune 18, 1996is hereby set aside.
Let this case be remanded to the NCR Arbitration Branch for further
hearing on the questions above-mentioned.[19]
Respondent union filed a motion for reconsideration of the
above-stated Order, but this was denied by the NLRC in its Order
dated10 January 1997.[20]Thus, respondent union filed a Petition
forCertiorariunder Rule 65 before this Court. Pursuant, however, to
our ruling inSt. MartinFuneral Home v.National Labor Relations
Commission,[21]we remanded the petition to the Court of Appeals for
proper disposition.
On12 March 2002, the Court of Appeals rendered a Decision
granting the respondent unions petition and nullifying the Orders
dated28 October 1996and10 January 1997of the NLRC.It also
reinstated the Decision dated18 June 1986of the NLRC.[22]The
appellate court decreed:
WHEREFORE, premises considered, the PETITION FOR CERTIORARI is
hereby GRANTED. Accordingly, the Order datedOctober 28
1996andJanuary 10, 1997of the NLRC are hereby NULLIFIED and its
Decision dated 18 June 1986 be REINSTATED.
Panfilos counsel filed a motion for reconsideration of the said
decision but this was denied by the appellate court in its
Resolution dated28 August 2002.[23]
Herein petitioners, as heirs of Panfilo, filed the instant
petition before this Court assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARRIVING AT
THE CONCLUSION THAT PVP LINER INC. WAS PROPERLY MISPLEADED, WHICH
IS A NON-EXISTING CORPORATION.
II.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT
CONSIDERING THAT THERE WAS NO PROPER AND EFFECTIVE SERVICE OF
SUMMONS.
III.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN PIERCING THE
VEIL OF CORPORATE ENTITY OF PVP PAJARILLO LINER INC.
IV.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REINSTATING
THE ORDER OF THE NLRC DATEDJUNE 18, 1996, WHICH DECLARED THAT
PRIVATE RESPONDENTS WERE ILLEGALLY DISMISSED.[24]
Anent the first issue,petitioners alleged that the Decision
dated 18 June 1996 of the NLRC, orderedPVP Liner Inc.to reinstate
private respondents and pay their backwages, ECOLA,13thmonth pay,
legal holiday pay and service incentive leave pay; that there was
no such entity asPVP Liner Inc.organized and existing in the
Philippines;that it was not possible for Arbiter Asuncion and the
NLRC to acquire jurisdiction over a non-existing company; that
there can never be a service of summons or notice to a non-existent
entity; that the true employer of private respondents was Panfilo
as the sole proprietor/operator of passenger buses doing business
under the tradename,PVP Liner,and notPVP LinerInc. which was
non-existent; that Panfilo never usedPVP LinerInc.as his tradename;
that the present operator of PVP Liner buses isP.V.PAJARILLO LINER,
a corporation duly registered with the Securities and Exchange
Commission; that at the time the instant case was filed before
Arbiter Asuncion in1987, the latter did not have jurisdiction
overP.V.PAJARILLO LINERbecause it was organized and duly registered
only on 22 January1990; thatP.V.PAJARILLO LINERhas a separate and
distinct personality from Panfilo as the sole operator of PVP Liner
buses; that, therefore,P.V.PAJARILLO LINERcannot be made a party or
impleaded in the present case; that the amended complaint in
NLRC/NCR Case No. 00-08-03013-87impleaded as
party-respondentPANFILO V. PAJARILLO LINERand PANFILO V. PAJARILLO,
as operator and responsible officer;thatPVP LinerInc. was not
impleaded in the instant case; and that no summons was ever served
onPVP LinerInc. in NLRC/NCR Case No. 00-08-03013-87.[25]The
contentions are bereft of merit.
In the Complaint dated20 January 1988,PVP Liner Inc. and Panfilo
were impleaded as party-respondents, thus:
That respondent PVP Liner, Inc., is a private business entity,
engaged in transportation of passengers, duly organized and
existing pursuant to law and for this purpose maintains its
principal office at 2175, Zamora Street, Sta. Ana, Manila;while
individual respondent [Panfilo] is the General Manager/Operator and
may be served with summons, notices and other processes at the
aforementioned principal office.[26]
Panfilo did not question in his position paper or in his motion
for consolidation of the complaints the foregoing
allegations.Neither did he assail the inclusion ofPVP Liner Inc. as
party-respondent in respondent unions position paper dated6 June
1988.
In Panfilos position paper as well as in the records of the
proceedings before Arbiter Asuncion, there is nothing that shows
that Panfilo challenged the jurisdiction of Arbiter Asuncion
overPVP Liner Inc.When Arbiter Asuncion decided in favor of
Panfilo, the latter said nothing about the inclusion ofPVP Liner
Inc. as party respondent and the lack of jurisdiction of Arbiter
Asuncion over the same.It was only when the NLRC rendered a
Decision adverse to Panfilo that the latter alleged the
non-existence ofPVP Liner Inc.and the fact that Arbiter Asuncion
and the NLRC had no jurisdiction over it.
Petitioners are now precluded from questioning the inclusion
ofPVP Liner Inc. as party-respondent as well as the jurisdiction of
Arbiter Asuncion and the NLRC over them under the principle
ofestoppel.It is settled that the active participation of a party
against whom the action was brought, coupled with his failure to
object to the jurisdiction of the court or quasi-judicial body
where the action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of the
case and will bar said party from later on impugning the court or
bodys jurisdiction.[27]This Court has time and again frowned upon
the undesirable practice of a party submitting his case for
decision and then accepting the judgment only if favorable, and
attacking it for lack of jurisdiction when adverse.[28]
It is apparent thatPanfilo V. Pajarillo LinerandPVP Liner Inc.
are one and the same entity belonging to one and the same person,
Panfilo.WhenPVP Liner Inc. andPanfilo V. Pajarillo Linerwere
impleaded as party-respondents, it was Panfilo, through counsel,
who answered the complaints and filed the position papers, motions
for reconsideration and appeals.It was also Panfilo, through
counsel, who participated in the hearings and proceedings. In fact,
Abel Pajarillo (Abel), son of Panfilo, testified before Arbiter
Asuncion that he was the operations manager ofPVP Liner
Inc.[29]Further, both Panfilo andPVPLiner Inc. were charged jointly
and severally in the aforesaid complaints.
Aproposthe second issue, petitioners alleged that the notices
and summons were received by a certain Irene G. Pajarillo (Irene)
for and in behalf of the PVP Liner Inc.; that Irene was neither and
could not have been the President/Manager of PVP Liner Inc., the
latter being non-existent; and that Irene was not an officer of
P.V. Pajarillo Liner.[30]
Sections 4 and 5 of Rule IV of the Revised Rules of Procedure of
the NLRC provides the rule for the service of summonses and notices
in NLRC cases,viz:
Sec. 4.Service of notices and resolutions. a) Notices or summons
and copies of orders, resolutions or decisions shall be served
personally by the bailiff or the duly authorized public officer or
by registered mail on the parties to the case within five (5) days
from receipt thereof by the serving officer.
Sec. 5.Proof and completeness of service. The return
isprimafacieproof of the facts indicated therein. Service by
registered mail is complete upon receipt by the addressee or his
agent.[31]
Records show that Irene received the summons for NLRC Case No.
00-01-00331-88on4 February 1988in behalf of PVP Liner Inc.These
summonses wereaddressed and sent toTHE PRESIDENT/MANAGER, PVP Liner
Inc. and Panfilo V. Pajarillo,2175 Zamora Street, Sta. Ana,
Manilaon 25 January 1988.The Registry Return Receipt dated4
February 1988wasaddressed toPVP Liner Inc.and was signed by Irene
as the addressees agent.[32]Abel, one of the heirs of Panfilo and
the Operations Manager of PVP Liner Inc., testified during the
hearing before Arbiter Asuncion that Irene was one of the
secretaries of PVP Liner Inc.[33]Hence, there was a valid service
of summons.
Regarding the third issue, petitioners posited thatP.V.
Pajarillo Liner Inc.is an independent corporation and cannot be
considered as an adjunct or extension of Panfilo as the sole
operator of PVP Liner buses; and that at the timeP.V. Pajarillo
Liner Inc. was established, it had no liability or obligation which
it tried to shield or circumvent.[34]
It is a fundamental principle of corporation law that a
corporation is an entity separate and distinct from its
stockholders and from other corporations to which it may be
connected.However, this separate and distinct personality of a
corporation is merely a fiction created by law for convenience and
to promote justice.Hence, when the notion of separate juridical
personality is used to defeat public convenience, justify wrong,
protect fraud or defend crime, or is used as a device to defeat
labor laws, this separate personality of the corporation may be
disregarded or the veil of the corporate fiction pierced.This is
true likewise when the corporation is merely an adjunct, a business
conduit or an alter ego of another corporation. The corporate mask
may be lifted and the corporate veil may be pierced when a
corporation is but the alter ego of a person or another
corporation.[35]
It is apparent that Panfilo started his transportation business
as the sole owner and operator of passenger buses utilizing the
namePVP Linerfor his buses.After being charged by respondent union
of unfair labor practice, illegal deductions, illegal dismissal and
violation of labor standard laws, Panfilo transformed his
transportation business into a family corporation, namely,P.V.
Pajarillo Liner Inc.He and petitioners were the incorporators,
stockholders and officers therein.P.V. Pajarillo Inc. and the sole
proprietorship of Panfilo have the same business address.P.V.
Pajarillo Inc.also uses the namePVP Linerin its buses. Further, the
license to operate or franchise of the sole proprietorship was
merely transferred toP.V.Pajarillo Liner Inc.The testimony of Abel
during the hearing before Arbiter Asuncion is revealing, thus:
Q:Mr. Pajarillo, when did you start assuming the functions of
operations manager of PVP Liner?
A:Seven years from now, sometime in the year 1984 or 1985,
sir.
Q:Do you have any written appointment as Operations Manager?
A:No, sir.
Q:I noticed that your surname is Pajarillo you are one way or
another related to Mr. Panfilo V. Pajarillo, is that correct?
Witness:
A:I am the son of Panfilo Pajarillo, sir.
Q:In so far as PVP Liner is concerned and being the operations
manager, are you aware if it is a single proprietor or a
corporation?
A:At the start it was a single proprietorship, lately, it has
become a family corporation.
Atty. Flores, Jr. (to witness)
Q:When you became the Operations Manager of PVP Liner, is it a
single proprietor or a family Corporation?
A:It was a single proprietorship.
Q:Mr. Witness, since PVP Liner is a transportation business it
has a license to operate these buses?
A:Yes, there is, sir.
Atty. Flores, Jr. (to witness)
Q:In whose name was it registered?
A:Before it was with my father Panfilo V. Pajarillo, sir.
Q:Do I understand that the licensing of this transportation
company was transferred to another person?A:It was never
transferred to another person, except now, that it has been
transferred to a corporation.[36]
It is clear from the foregoing thatP.V. Pajarillo Liner Inc. was
a mere continuation and successor of the sole proprietorship of
Panfilo.It is also quite obvious that Panfilo transformed his sole
proprietorship into a family corporation in a surreptitious attempt
to evade the charges of respondent union. Given these
considerations, Panfilo andP.V. PajarilloLiner Inc. should be
treated as one and the same person for purposes of
liability.[37]
Finally, petitioners averred that no unfair labor practice was
committed, and that private respondents were not illegally
dismissed from work.
In its Decision dated18 June 1996, the NLRC made an exhaustive
discussion of the allegations and evidence of both parties as
regards unfair labor practice and illegal dismissal.It concluded
that private respondents, officers and members of respondent union
were dismissed by reason of their union activities and that there
was no compliance with substantial and procedural due process in
terminating their services.It also held that the private
respondents who were not members of the respondent union were also
dismissed without just or valid cause, and that they were denied
due process. These factual findings and conclusions were supported
by substantial evidence comprised of affidavits, sworn statements,
testimonies of witnesses during hearings before Arbiter Asuncion,
and other documentary evidence.These findings were sustained by the
Court of Appeals.
The rule is that findings of fact of quasi-judicial agencies
like the NLRC are accorded by this Court not only respect but even
finality if they are supported by substantial evidence, or that
amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.[38]We find no compelling reason
to deviate from such findings of the NLRC as affirmed by the Court
of Appeals.
Consequently, the private respondents are entitled to
reinstatement, backwages and other privileges and benefits under
Article 279 of the Labor Code.Separation pay may be given in lieu
of reinstatement if the employee concerned occupies a position of
trust and confidence.In the case at bar, however, the private
respondents, as former bus drivers, conductors and conductresses of
petitioners, donothold the position of trust and
confidence.[39]
Nonetheless, it appears from the records that some of the
private respondents, namely,Augur Manipol, Rodolfo Torres, Ricardo
Calica, Paraluman Ulang, Edith Chua, Alfredo Hoyohoy, Johnny
Soriano, Bernardo Roco, Tolentino Sanhi, Salvacion Perina, Pedro L.
de Baguio, Ariston Nipa, Felipe Yapoc, Laura Co, Bienvenida Tequil,
Roberto Lavarez, Francisco Morales and Herminio Castillo,had
executed a Quitclaim/Release discharging petitionersfrom any and
all claims by way of unpaid wages, separation pay, overtime pay,
differential pay, ECOLA, 13thmonth pay, holiday pay, service
incentiveleave pay or otherwise.[40]
Generally, deeds of release, waivers, or quitclaims cannot bar
employees from demanding benefits to which they are legally
entitled or from contesting the legality of their dismissal, since
quitclaims are looked upon with disfavor and are frowned upon as
contrary to public policy. Where, however, the person making the
waiver has done so voluntarily, with a full understanding thereof,
and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as being a valid and binding
undertaking.[41]
There is no showing that the executions of these quitclaims were
tainted with deceit or coercion.On the contrary, each of the
private respondentsSinumpaang Salaysay,which accompanied the
quitclaims, evinces voluntariness and full understanding of the
execution and consequence of the quitclaim.In their saidSinumpaang
Salaysay, the private respondents stated that their lawyer had
extensively explained to them the computation and the actual amount
of consideration they would receive; that they were not forced or
tricked by their lawyer in accepting the same; and that they
already received the amount of consideration.[42]
Further, the considerations received by the private respondents
were credible and reasonable because they were not grossly
disproportionate to the computation by the NLRC of the amount of
backwages and other money claims.[43]
Given these circumstances, the quitclaims should be considered
as binding on the private respondents who executed them.It is
settled that a legitimate waiver which represents a voluntary and
reasonable settlement of a workers claim should be respected as the
law between the parties.[44]Accordingly, the private respondents
who made such quitclaims are already precluded from claiming
reinstatement, backwages, ECOLA, 13THmonth pay, legal holiday pay,
service incentive leave pay, and other monetary claims.
With regard to the other private respondents who did not execute
such quitclaims, they are entitled to reinstatement, backwages,
ECOLA, 13THmonth pay, legal holiday pay and service incentive leave
pay in accordance with the computation of the NLRC.
WHEREFORE,the petition is herebyDENIED.The Decision and
Resolutiondated 12 March 2002 and 28 August 2002, respectively, of
the Court of Appeals in CA-G.R. SP No. 54330 and CA-G.R. SP No.
54331, are herebyAFFIRMEDwith the followingMODIFICATIONS:(1)Private
respondentsAugur Manipol, Rodolfo M. Torres, Ricardo Calica,
Paraluman Ulang, Edith Chua, Alfredo Hoyohoy, Johnny Soriano,
Bernardo Roco, Tolentino Sanhi, Salvacion Perina, Pedro L. de
Baguio, Ariston Nipa, Felipe Yapoc, Laura Co, Bienve