THIRD DIVISION
[G.R. No. 204163. September 23, 2020.]
HO-WOONG COMPANY, INC., JISOO1JANG, WEE2SOO JANG, ET AL., petitioners,vs. OBRERO PILIPINO COMPANY, INC. CHAPTER-CLO, MERLITA ARGUELLES, ET AL., respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedSeptember 23, 2020, which reads as follows:
"G.R. No. 204163 (Ho-Woong Company, Inc., Jisoo Jang, Wee Soo Jang, et al. v. Obrero Pilipino Company, Inc. Chapter-CLO, Merlita Arguelles, et al.). — On appeal is the April 16, 2012 Decision 3 issued by the Court of Appeals (CA) in CA-G.R. SP No. 121590, which affirmed the May 31, 2011 4 and July 29, 2011 5 Resolutions issued by the Third Division of the National Labor Relations Commission (NLRC) in NLRC LPRJC No. 04-0018-2011 dismissing the Petition for Relief from Judgment filed by petitioners.
The CA recounted the antecedents of the case as follows:
Petitioner Ho-Woong Company, Inc. ("petitioner Ho-Woong") is a corporation duly organized and existing under the laws of the Philippines with petitioners Jisoo Jang and Wee Soo Jang as officers thereof. On the other hand, herein private respondents were the former employees of petitioner Ho-Woong at its office and factory located at J.P. Villegas St., San Pedro, Sto. Tomas, Batangas.
The instant case arose when, on July 23, 2010, Labor Arbiter Melchisedek A. Guan ("labor arbiter") rendered a Decision in NLRC SRAB IV-07-9752-09-B ("labor case") directing herein petitioner Ho-Woong to pay herein private respondents the total amount of One Million Three Hundred Ninety Three Thousand Eight Hundred Three Pesos and Ninety-Nine Centavos (P1,393,803.99) representing the private respondents' salary differentials, thirteenth (13th) month pay and service incentive leave pay. Pursuant to the said decision, the labor arbiter issued a Writ of Execution on November 5, 2010 the pertinent portion of which provides as follows:
"[Respondents] move for the issuance of a writ of execution to implement the decision rendered by undersigned dated 23 July 2010. Records disclose that the copy of the decision sent to [petitioners] by registered mail was returned with the notation 'Return to Sender: company closed.' [Petitioners], however, failed to notify this office of their forwarding address.
As the mail containing the decision in the above-entitled cases was not duly received by [petitioners] for reasons attributable to them and as it has been shown that the delivery of the mail is valid were it not for the addressee's failure to notify this Office of their forwarding address, service was deemed completed five (5) days after the said mail was served (to) herein [petitioners].
There being no appeal interposed by any of the parties from the decision sought to be executed, the same became final and executory on 11 September 2010. Hence, the issuance of a writ of execution is appropriate."
It was only on February 21, 2011 when petitioners allegedly learned of the July 23, 2010 decision and the subsequent writ of execution of the labor arbiter. On the said date, a sheriff from the NLRC went to the premises of the petitioners' closed factory in Batangas and posted copies of the notice of sale of properties on public auction within the said premises.
Subsequently, the petitioners filed in the NLRC a petition for relief from judgment claiming that petitioner Ho-Woong had already ceased its business operations and closed its factory as early as on September 5, 2009. Thus, petitioners maintained that they had not received any summons, notices or orders from the labor arbiter in connection with the labor case that was filed against them. Consequently, they contended that they were denied due process since they were not given any opportunity to present evidence that would controvert the allegations that were hurled against them by the private respondents.
Further, the petitioners claimed that the appearance of a certain Oscar Villapando ("Villapando") and the latter's participation in the proceedings that were conducted before the labor arbiter was without their knowledge and consent. They denied that they authorized Villapando to represent them in the labor case and to act for and in their behalf. According to the petitioners, Villapando merely acted pursuant to an authorization letter that was signed by a certain Melanie D. Salazar ("Salazar") who was not an employee of petitioner Ho-Woong, but rather, an employee of an agency which formerly provided subcontracting services to the petitioners.
Consequently, on May 31, 2011, the NLRC issued the assailed resolution dismissing the petition for relief from judgment that was filed by herein petitioners. The dispositive portion of the said resolution reads as follows:
"WHEREFORE, the petition for relief from judgment filed by Ho-Woong Company, Inc., Jisoo Jang and Wee Soo Jang is hereby DISMISSED.
SO ORDERED."
In dismissing the petition for relief from judgment that was filed by the petitioners, the NLRC raised the following points:
1) The petitioners failed to explain why the letter of Salazar which authorized Villapando to represent the petitioners in the labor case bore the petitioner Ho-Woong's letterhead and address;
2) The petitioners failed to specifically name the employment agency which allegedly provided them with the sub-contracting services;
3) The petition for relief from judgment lacked an affidavit of merit;
4) The petitioners failed to support by sworn affidavits their allegations that were raised in the petition such as their not being properly served with summons, notices of hearings and copies of the decision and writ of execution;
5) The petitioners failed to substantiate their allegation that they had already ceased their business operations or had already closed its (sic) company; and
6) The petitioners failed to submit any proof such as a board resolution authorizing petitioner Jisoo Jang to file the petition for relief from judgment in behalf of petitioner Ho-Woong.
Consequently, the petitioners filed their Motion for Reconsideration of the assailed May 31, 2011 resolution that was issued by the NLRC. On July 29, 2011, however, the NLRC issued another resolution which denied the petitioners' motion for reconsideration. The dispositive portion of the said resolution reads:
"ACCORDINGLY, the instant Motion for Reconsideration is hereby DENIED for lack of merit.
No further Motions for Reconsideration shall be entertained.
SO ORDERED." 6
Undaunted, petitioners filed a Petition for Certiorari with the CA, which considered the following issue for resolution: whether or not the NLRC committed grave abuse of discretion when it dismissed the Petition for Relief from Judgment by herein petitioners. 7
On April 16, 2012, the CA rendered the assailed Decision, the dispositive portion of which states:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the instant petition. The resolutions dated May 31, 2011 and July 29, 2011 of the Third Division of the National Labor Relations Commission in NLRC LPRJC No. 04-0018-2011 are AFFIRMED.
SO ORDERED. 8
The CA found no grave abuse of discretion on the part of the NLRC in dismissing the Petition for Relief from Judgment filed by petitioners. In fact, it found the dismissal warranted in view of petitioners' failure to comply with the requirements of Rule 38 of the Revised Rules of Court (Rules).
First, the CA held that the petition was filed out of time. Under Rule 38, the petition for relief must be filed within sixty (60) days after the petitioner learns of the judgment sought to be set aside, and not more than six (6) months after such judgment was entered. These periods must concur, are not extendible and are never interrupted. 9 According to the CA, there is no indication in the records that the petition for relief was filed within the given periods. Assuming as true, petitioners' assertion that they learned of the labor arbiter's July 23, 2010 Decision only on February 21, 2011, the petition was dated April 8, 2011, while the verification of Jisoo Jang attached to the petition was dated April 12, 2011. The petition was thus filed almost nine (9) months after the labor arbiter rendered his decision. 10
Moreover, the CA ruled that the petition was not accompanied by affidavits of merit showing the fraud, accident, mistake or excusable negligence on which the petition is based. It cited the ruling in Garcia v. Court of Appeals11 which held that the affidavit of merit is an indispensable requirement under the Rules. It serves as jurisdictional basis for a court to entertain a petition for relief and without which the court where such petition is filed is not called upon to entertain the same. 12 Citing Insular Life Savings and Trust Company v. Runes, Jr., 13 the CA further held that a petition for relief from judgment is an equitable remedy that is allowed only in exceptional cases where there is no other available or adequate remedy under the law. The serious defects attending the petition for relief warrant outright dismissal. While rules of procedure are not cast in stone, it is equally true that strict compliance with the Rules is indispensable for the prevention of needless delays and for the orderly and expeditious dispatch of judicial business. 14
Petitioners filed their Motion for Reconsideration, but it was denied by the CA. Hence, this petition.
Petitioners insist that an affidavit of merit would have contained the same allegations as the petition for relief, hence, it would be superfluous. Besides, since the company had closed and ceased business operations, it no longer retained employees who would have been able to execute sworn statements. Jisoo Jang's verification of the petition could be considered substantial compliance with the requirement for submission of an affidavit of merit. 15
Moreover, petitioners argue that a strict interpretation of the six (6)-month period to file a petition for relief will result in manifest injustice inasmuch as they were deprived of their right to due process. 16 Petitioners maintain that their office premises/factory had long been closed, and that they learned of the July 23, 2010 Decision and Writ of Execution issued by the labor arbiter only of February 21, 2011 when the sheriff from the NLRC posted copies of the Notice of Sale on Public Auction within their company premises located on J.P. Villegas St., San Pedro, Sto. Tomas, Batangas. 17 Petitioners invoke the Court to set aside technicalities to prevent a miscarriage of justice, and pray, among others, for the CA decision to be set aside; that they be granted relief from the labor arbiter's decision; and be allowed to submit the appropriate pleadings in relation to the case. 18
The petition is meritorious.
A closer examination of the incidents shows that petitioners were not appropriately informed of the proceedings before the labor arbiter that would have allowed them to participate and present their defense. Hence, they should have been allowed to seek relief from judgment in pursuit of their substantial rights.
Records show that petitioners had been supposedly represented by one Oscar Villapando (Villapando) in the proceedings before the labor arbiter on the strength of a letter 19 signed by HR Officer Melanie D. Salazar written on Ho-Woong Company, Inc.'s letterhead. The letter states in full:
June 18, 2009
Dear Sir/Ma'am:
Good Day!
This is to authorize Mr. Oscar Villapando to represent Ho-Woong Company, Inc. to attend the hearing for any labor case for HO-WOONG COMPANY, INC.
Thank you very much.
Sincerely,
Ms. Melanie D. Salazar
Three points must be made in this regard.
First, it appears from the record that there was no other representative that appeared on behalf of Ho-Woong in the labor case except Villapando. 20 The record also bears that on June 16, 2009, Labor Arbiter Melchisedek Guan (LA Guan) presided over mediation and conciliation proceedings wherein the "parties appeared." 21 However, the above-quoted letter, which supposedly evidenced Villapando's authority to represent Ho-Woong, was not issued until two (2) days after the proceeding, or on June 18, 2009. Clearly, something is amiss here.
Second, Villapando, a non-lawyer, was not qualified to represent Ho-Woong. Under the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules) which was in force at the time the complaint was filed, a non-lawyer may represent a corporation only in the following instances:
SECTION 8. APPEARANCES. — x x x
b) A non-lawyer may appear as counsel in any of the proceedings before the Labor Arbiter or Commission only under the following conditions:
(1) he represents himself as party to the case;
(2) he represents a legitimate labor organization; x x x
(3) he represents a member or members of a legitimate labor organization that is existing within the employer's establishment, who are parties to the case: x x x;
(4) he is a duly-accredited member of any legal aid office recognized by the Department of Justice or Integrated Bar of the Philippines: x x x;
(5) he is the owner or president of a corporation or establishment which is a party to the case: Provided, that he presents: (i) a verified certification attesting that he is authorized to represent said corporation or establishment; and (ii) a copy of the resolution of the board of directors of said corporation, or other similar resolution or instrument issued by said establishment, granting him such authority.
c) A non-lawyer who appears in contravention of this Section shall not be recognized in any proceedings before the Labor Arbiter or the Commission.
The only allowable circumstance under the 2005 NLRC Rules in which a non-lawyer like Villapando can represent Ho-Woong before the labor arbiter or the NLRC is when he is the owner or president of the company. Even then, he would have to submit (i) a verified certification attesting that he is authorized to represent the company, and (ii) a copy of the resolution of the board of directors of the company or other similar resolution or instrument issued by the company granting him such authority, before he may be allowed to participate in the proceedings. However, Villapando was obviously not the owner or president of Ho-Woong. 22 This fact alone should have raised a red flag for the labor arbiter. Not being the owner or president of Ho-Woong, Villapando naturally would never be able to submit the caliber of documents described in the 2005 NLRC Rules to substantiate his right to represent the company.
This brings us to our third point.
Considering that Villapando's authority to represent Ho-Woong was not established, his presence in the proceedings should not have been recognized by LA Guan, and his failure to file pleadings not held binding on Ho-Woong.
Under Section 8 (c) quoted above, a non-lawyer who appears in contravention of Section 8 (b) shall not be recognized in any proceedings before the Labor Arbiter or the Commission. The 2005 NLRC Rules are clear. Unfortunately, they were unforgivably overlooked by both LA Guan and the Third Division of the NLRC. LA Guan accepted Villapando's authority to appear on behalf of Ho-Woong in the mediation and conciliation proceedings on the basis of Melanie Salazar's (Salazar) letter, and later penalized Ho-Woong for failure to submit pleadings. He held in his Joint Decision that only complainants filed their position papers. 23 Moreover:
As it is, [petitioners] failed to submit their pleadings in the arbitration proceedings. This leaves the proposition of [respondents] that they were not paid their money claims uncontested. 24
The absence of a defense or controverting evidence subsequently compelled LA Guan to declare private respondents entitled to monetary benefits.
What is more unfortunate, however, is that the NLRC failed to see the defect. In its May 31, 2011 Resolution dismissing petitioners' petition for relief, it criticized petitioners' failure, among others, to explain why the letter of Salazar bore Ho-Woong's letterhead and address, and failure to submit proof such as a board resolution authorizing Jisoo Jang to file the petition for relief. 25
We find it preposterous for the NLRC Third Division to question Jisoo Jang's authority to file the petition for relief, while not similarly finding issue on Villapando's standing to appear on behalf of Ho-Woong in the first place. The NLRC failed to recognize that petitioner Jisoo Jang was one of the defendants in the NLRC case and an officer of Ho-Woong. 26 On the contrary, Villapando's relationship with the company was not even established. The NLRC, moreover, criticized Jisoo Jang for failing to submit a board resolution in his bid to protect his and his co-petitioners' interest, and despite the allegation that the company has closed. At the same time, it found nothing wrong with the fact that Villapando was not similarly armed with a board resolution, yet he was allowed to participate in the proceedings before the labor arbiter and later prejudice the company.
Decisions of the NLRC are reviewable by the CA through a special civil action for certiorari under Rule 65 of the Rules of Court. This means that the CA must look at an NLRC decision and ascertain if it merits a reversal exclusively on the basis of the presence of grave abuse of discretion amounting to lack or excess of jurisdiction. Necessarily, when a CA decision is brought before the court through a petition for review on certiorari under Rule 45, the question of law presented is whether the CA correctly ruled on the presence or absence of grave abuse of discretion on the part of the NLRC. 27
In light of the circumstances discussed above, We hold that the CA erred in finding that the assailed NLRC resolutions which dismissed the petition for relief were not tainted with grave abuse of discretion.
Grave abuse of discretion, amounting to lack or excess of jurisdiction, has been defined as the capricious and whimsical exercise of judgment amounting to or equivalent to lack of jurisdiction. There is grave abuse of discretion when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Labor officials commit grave abuse of discretion when their factual findings are arrived at arbitrarily or in disregard of the evidence, 28 such as in this case.
True, the petition for relief was burdened with procedural defects. Among others, it was filed out of time and it lacked the required affidavit of merit. However, primary consideration should be given to evidence showing that petitioners were not properly served with summons and appropriately represented in the labor arbitration. The irregularity in the proceedings sought to be reopened bears on the very jurisdiction of the labor arbiter over the persons of petitioners and their right to due process.
In Republic v. De Leon, 29 We held that in a petition directly assailing the jurisdiction of the court, an affidavit of merit has no practical value. An attack on the jurisdiction of the court is given such primary recognition in our jurisprudence that this defense can properly be raised for the first time even on appeal. Certainly, an affidavit of merit, which essentially deals with facts constituting petitioner's defense and/or basis of such defense, has no place in a pleading that advances an argument that goes down to the very root of the proceedings. 30
Moreover, where the movant has been deprived of his day in court through no fault or negligence on his part and because no notice of hearing was furnished him in advance so as to enable him to prepare for trial, the judgment or order is absolutely null and void for denying him his day in court, a constitutional right. In such case, the judgment or order suffers from an inherent procedural defect and is absolutely void. Under such circumstances, no showing of merits is necessary to support an application to have the order vacated. 31
In any event, what should guide judicial action is the principle that a party-litigant should be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty, honor, or property on technicalities. The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed. 32
WHEREFORE, the petition is GRANTED. The assailed April 16, 2012 Decision of the Court of Appeals in CA-G.R. SP No. 121590 is REVERSED and SET ASIDE. The case is REMANDED to the National Labor Relations Commission for the hearing on the petition for affirmative relief.
SO ORDERED."(Zalameda, J., on wellness leave.)
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1. "Jisso" in some parts of the rollo.
2. "Wi" in some parts of the rollo.
3.Rollo, pp. 39-51; penned by Associate Justice Isaias P. Dicdican with Associate Justices Jane Aurora C. Lantion and Danton Q. Bueser, concurring.
4.Id. at 55-59; penned by Presiding Commissioner Alex A. Lopez with Commissioners Gregorio O. Bilog III and Pablo C. Espiritu, Jr., concurring.
5.Id. at 60-61.
6.Id. at 40-43; citations omitted.
7.Id. at 43.
8.Id. at 49-50.
9.Id. at 47.
10.Id.
11. 279 Phil. 242 (1991).
12.Id. at 253.
13. 479 Phil. 995 (2004).
14.Rollo, pp. 48-49.
15.Id. at 25-26.
16.Id. at 30.
17.Id. at 32-33.
18.Id. at 35.
19.Id. at 103.
20.Id. at 211;
One of the recitals in the writ of execution attached to the records states:
WHEREAS, records disclosed that during the scheduled mandatory conference x x x a representative of the respondents in the person of Mr. Oscar Villapando, appeared and actively participated in the conciliation proceedings and even asked for extension of time within which to file their position paper x x x.
21.Id. at 185.
22.Id. at 22; In the petition, petitioners describe Villapando as connected with an employment agency that previously provided subcontracting services to Ho-Woong Company.
23.Id. at 185-186.
24.Id. at 189.
25.Id. at 57-58.
26.Id. at 10-11.
27.PNB v. Gregorio, 818 Phil. 321, 335 (2017).
28.Protective Maximum Security Agency, Inc. v. Fuentes, 753 Phil. 482, 505 (2015); citation omitted.
29. 101 Phil. 773 (1957).
30.Id. at 780.
31.Solaria v. Dela Cruz, 122 Phil. 1218, 1223 (1966), citing Valerio v. Tan, 97 Phil. 558, 561 (1955).
32.Heirs of Zaulda v. Zaulda, 729 Phil. 639, 652 (2014).