Yu v. SR Metals, Inc.

SPECIAL SECOND DIVISION

[G.R. No. 214249. October 17, 2018.]

HENRY E. YU, ET AL., petitioners, vs. SR METALS, INC., ET AL., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated 17 October 2018which reads as follows:

"G.R. No. 214249 (Henry E. Yu, et al. v. SR Metals, Inc., et al.). — This resolves the Motion and Manifestation with Leave to Plead This Honorable Court to Rule on the Partial Motion for Reconsideration Filed by Petitioners on Its Resolution Dated 5 April 20171 filed by counsel for petitioners, Atty. Jose Sonny G. Matula (Atty. Matula), on December 12, 2017.

The factual antecedents appear as follows:

On March 17, 2017, counsel for respondent SR Metals, Inc. (SRMI) filed a Manifestation (With Prayer for Dismissal)2 averring that the following individuals executed a "Compromise Agreement" in favor of SRMI before Regional Arbitration Branch XIII-Butuan City:

1. Jimmy G. Alber

2. Felicito G. Daan, Sr.

3. Janifer C. Daan

4. Virgilia A. Empron

5. Eric G. Maraon

6. Leonard S. Villaren

7. Evelyn G. Mansal

8. Marijul O. Ondap CAIHTE

On even date, SRMI also filed a Manifestation (With Prayer for Dismissal)3 stating that the following individuals executed a "Quitclaim and Release with Motion to Dismiss" in favor of SRMI before Regional Arbitration Branch XIII-Butuan City:

1. Genes C. Capon

2. Mark Decryl B. Osorio

3. Freddie M. Beltran

4. Peter John D. Cordova

5. Reynaldo C. Gato

6. Jerry L. Lopez

7. Henry E. Yu

8. Victor S. Ruales

9. Edwin R. Baybay

10. Pablito G. Olayon

11. Ronilo D. Cordova

12. Aldo D. Diapolet

13. Crisanto D. Diapolet

14. Roel E. Villaespin

15. Edgar R. Rebagos, Sr.

16. Silverio P. Ombico, Jr.

17. Junipher Quita

18. Ronito A. Rama

19. Diego R. Gonzaga

In addition, it was noted that the following individuals executed a "Compromise Agreement" in favor of SRMI before Regional Arbitration Branch XIII-Butuan City: DETACa

1. Constancio B. Madrona, Jr.

2. Jovanie Bantilan

3. Jose C. Sabio

4. Remegildo P. Rodriguez

As proof of its two Manifestations, SRMI attached as Annexes the copies of the compromise agreement, as well as quitclaim and release with motion to dismiss, signed by the above-named individuals. 4

On April 5, 2017, the Court resolved to note the two Manifestations of SRMI. 5

Subsequently, on June 19, 2017, Atty. Matula filed a Partial Motion for Reconsideration of the Resolution dated 5 April 2017. 6 He contended that the supposed compromise agreements, which the above-named individuals signed without their counsel, were unjust and unconscionable. According to him, the purported amounts given were too low compared to what they would have received because each would already be entitled to at least P300,000.00 on backwages. It was noted that the above-named individuals were ordinary lowly workers from a rural area who were confronted with the harsh necessities of life. These considering, the rulings on Galicia v. NLRC7 and R & E Transport, Inc. v. Latag8 apply. Atty. Matula, thus, prayed for the reconsideration of the April 5, 2017 Resolution by reinstating the above-named individuals as party-litigants and be treated as such until the merits of the case are finally disposed.

Our September 25, 2017 Decision disposing the case did not specifically rule on Atty. Matula's motion. However, it was acknowledged that Capon, Ruales, Osorio, Beltran, Gato, Yu, Rebagos, Sr., Baybay, Olayon, Villaespin, Peter John and Ronilo Cordova, Crisanto and Aldo Diapolet, Ombico, Jr., Lopez, and Bantilan have amicably settled their cases against SRMI. 9

Hence, Atty. Matula filed the instant Motion and Manifestation, which substantially reiterates the assertions in his previous motion.

On March 13, 2018, SRMI filed its Comment, 10 countering that the compromise agreements are valid, final and binding on the grounds that:

x x x (1) there was neither vitiation of consent nor coercion when [petitioners] executed the said compromise agreements; (2) the compromise agreement duly approved by the Labor Arbiter was a judicial compromise that had the effects of res judicata and was immediately executory; (3) the amounts paid were just and reasonable at the time as the case was still pending and there was no certainty as to how long the case would come to finality; (4) the assistance of a counsel during the execution was not necessary; (5) prior compromise agreements entered into between [above-named petitioners] and [respondent SRMI] had been approved by the executive labor arbiter; and (7) the compromise agreements were executed not necessarily as a settlement of a valid claim, but because it was the settlement of the controversy. 11 aDSIHc

Atty. Matula's Motion and Manifestation is denied.

We agree with the contention of SRMI that the presence and/or assistance of a counsel at the time an employee executes a quitclaim/compromise agreement in favor of an employer is not determinative of its validity. As held in Magbanua v. Uy: 12

The presence or the absence of counsel when a waiver is executed does not determine its validity. There is no law requiring the presence of a counsel to validate a waiver. The test is whether it was executed voluntarily, freely and intelligently; and whether the consideration for it was credible and reasonable. Where there is clear proof that a waiver was wangled from an unsuspecting or a gullible person, the law must step in to annul such transaction. 13

The rule was reiterated in the fairly recent case of Atty. Agustin, et al. v. Cruz-Herrera: 14

It is settled that parties may enter into a compromise agreement without the intervention of their lawyer. This precedes from the equally settled rule that a client has an undoubted right to settle a suit without the intervention of his lawyer for he is generally conceded to have the exclusive control over the subject-matter of the litigation and may, at any time before judgment, if acting in good faith, compromise, settle, and adjust his cause of action out of court without his attorney's intervention, knowledge, or consent, even though he has agreed with his attorney not to do so. Hence, the absence of a counsel's knowledge or consent does not invalidate a compromise agreement. 15

Atty. Matula, likewise, fails to convince Us that the challenged quitclaims/compromise agreements should be nullified.

It is the policy of the State "to promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes." 16 Pursuant thereto, Article 233 of the Labor Code, as amended, provides: ETHIDa

ART. 233. [227] Compromise Agreements. — Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court, shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

Similar to a waiver or quitclaim, a compromise agreement is a valid and binding agreement between the parties, provided that: (1) it constitutes a credible and reasonable settlement; (2) it was voluntarily, freely and intelligently executed by the parties; and (3) it is not contrary to law, morals, good customs and public policy. 17

In the present case, Atty. Matula did not directly dispute the genuineness and due execution of each compromise agreement and quitclaim and release with motion to dismiss signed by the above-named individuals. He even failed to present any concrete evidence to show that their individual consent had been vitiated. There is no solid proof that those who opted to settle the case were defrauded, forced or intimidated, or that they were mistaken into executing the quitclaims/compromise agreements. It was not shown that the employees were inveigled or pressured into signing them by an unscrupulous employer seeking to evade its legal responsibilities and that the quitclaims/compromise agreements were entered into in bad faith by the workers and their employer to resolve a pending controversy.

Even if it were true that those who signed the quitclaims/compromise agreements are just "ordinary lowly workers from a rural area who were confronted with the harsh necessities of life," such fact alone does not automatically warrant a finding that vices of consent were present at the time they entered into an amicable settlement. It should have been shown with particularity that they did not fully comprehend and realize the consequences of their acts or that they were unlettered, unsuspecting or gullible persons who need special protection. Indeed, courts cannot invalidate on the basis of unsubstantiated allegations. cSEDTC

On the contrary, records indubitably demonstrate that the above-named individuals gave their personal and specific consent with a full understanding of the stakes involved. Alber, Felicito and Janifer Daan, Empron, Maraon, Villaren, Mansal, Ondap, Madrona, Jr., Bantilan, Sabio, and Rodriguez, personally appeared and acknowledged before Executive Labor Arbiter Exequiel M. Dayot III of Regional Arbitration Branch XIII-Butuan City, that they understood the compromise agreements and that the same were their voluntary acts and deeds. Similarly, all of the quitclaim and release with motion to dismiss were subscribed and sworn to before Notary Public Ma. Louella A. Mendoza-Yu (for Capon, Osorio, Beltran, Gato, Yu, and Ruales), Executive Labor Arbiter Nicodemus G. Palangan (for Peter John and Ronilo Cordova, Lopez, Ombico, Jr., and Gonzaga), and Administrative Officer V Robert M. Aying (for Baybay, Olayon, Aldo and Crisanto Diapolet, Villaespin, Rebagos, Quita, and Rama). In the absence of satisfactory proof to contradict the legal presumptions, 18 it shall be assumed that they voluntarily entered into and fully understood the contents and effect of the documents they signed.

The Court, likewise, cannot give credence to the allegation that the amounts given to the above-named individuals were too low compared to what they would have received as each would already be entitled to at least P300,000.00 on backwages. Such general statement fails to convince Us for lack of specific computation on each of the individuals involved. In the absence thereof, We cannot determine with certainty that the amounts received as settlement were indeed unconscionably or unreasonably low.

Notably, to date, the quitclaims/compromise agreements have not been repudiated by any of the above-named individuals, through filing of a manifestation or motion before the Court or the courts a quo, on the ground of vitiated consent or that the consideration thereof was grossly disproportionate.

To conclude, We remind that a compromise has the effect and authority of res judicata upon the parties even without judicial approval. 19 Once entered into, it has the force of law between the parties and is conclusive upon them. 20

WHEREFORE, the Motion and Manifestation with Leave to Plead This Honorable Court to Rule on the Partial Motion for Reconsideration Filed by Petitioners on Its Resolution Dated 5 April 2017 filed by counsel for petitioners, Atty. Jose Sonny G. Matula, on December 12, 2017, is DENIED. SDAaTC

SO ORDERED."

Very truly yours,

MARIA LOURDES C. PERFECTODivision Clerk of CourtBy:(SGD.) TERESITA AQUINO TUAZONDeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 2094-2099.

2.Id. at 1945-1947.

3.Id. at 1974-1977.

4. See id. at 1948-1971, 1978-2008. The documents show as follows:

 

Name	Date of Execution	Amount Received
Jimmy G. Alber	June 2, 2015	Php10,000.00
Felicito G. Daan, Sr.	June 2, 2015	Php15,000.00
Janifer C. Daan	July 1, 2015	Php10,000.00
Virginia A. Empron	July 1, 2015	Php10,000.00
Eric G. Maraon	July 21, 2016	Php10,000.00
Leonard S. Villaren	September 30, 2015	Php10,000.00
Evelyn G. Mansal	December 9, 2015	Php15,000.00
Marijul O. Ondap	December 15, 2015	Php15,000.00
Constancio B. Madrona, Jr.	August 23, 2016	Php10,000.00
Jovanie Bantilan	July 28, 2015	Php10,000.00
Jose C. Sabio	July 28, 2015	Php10,000.00
Remegildo P. Rodriguez	August 24, 2015	Php10,000.00
Genes C. Capon Mark Decryl B. Osorio Freddie M. Beltran	December 15, 2011	Php60,000.00
Peter John D. Cordova	May 31, 2012	Php6,000.00
Reynaldo C. Gato	December 2011	Php20,000.00
Jerry L. Lopez	June 20, 2012	Php6,000.00
Henry E. Yu Victor S. Ruales	December 2011	Php40,000.00
Edwin R. Baybay	December 23, 2011	Php20,000.00
Pablito G. Olayon	February 8, 2012	Php20,000.00
Ronilo D. Cordova	June 20, 2012	Php6,000.00
Aldo D. Diapolet Crisanto D. Diapolet Roel E. Villaespin	May 28, 2012	Php18,000.00
Edgar R. Rebagos, Sr.	December 23, 2011	Php20,000.00
Silverio P. Ombico, Jr.	June 20, 2012	Php6,000.00
Junipher Quita	December 7, 2012	Php6,000.00
Ronito A. Rama	October 30, 2012	Php6,000.00
Diego R. Gonzaga	May 31, 2012	Php6,000.00

 

5.Id. at 2031-2032.

6.Id. at 2062-2067.

7. 342 Phil. 342 (1997).

8. 467 Phil. 355 (2004).

9. See Rollo, p. 2081, citing pp. 175, 387-388, 397-398, 1836.

10.Rollo, pp. 2104-2114.

11.Id. at 2109-2110.

12. 497 Phil. 511 (2005).

13.Id. at 525.

14. 726 Phil. 533 (2014).

15.Id. at 544, citing Malvar v. Kraft Food Phils., Inc., et al., 717 Phil. 427, 449-450 (2013) and J-Phil Marine, Inc. and/or Candava, et al. v. NLRC, et al., 583 Phil. 671, 675-676 (2008).

16. Article 218 (211) of the Labor Code, as amended.

17. See Sara Lee Phils., Inc. v. Macatlang, et al., 750 Phil. 646, 657-658 (2015); KEPHILCO Malaya Employees Union v. KEPCO Philippines Corp.(3rd Division Resolution), G.R. No. 199546, December 3, 2014; Pepsi-Cola Products Philippines, Inc. v. Molon, et al., 704 Phil. 120, 142 (2013); Eurotech Hair Systems, Inc. v. Go, 532 Phil. 317, 325 (2006); and Wack Wack Golf & Country Club v. NLRC, 496 Phil. 180, 194-195 (2005).

18. Section 3, Rule 131 of the Rules of Court provides:

   Sec. 3.Disputable presumptions. — The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence:

   (a) That a person is innocent of crime or wrong;

xxx xxx xxx

   (c) That a person intends the ordinary consequences of his voluntary act;

   (d) That a person takes ordinary care of his concerns;

xxx xxx xxx

   (f) That money paid by one to another was due to the latter;

xxx xxx xxx

   (p) That private transactions have been fair and regular;

xxx xxx xxx

   (r) That there was a sufficient consideration for a contract;

xxx xxx xxx

   (x) That acquiescence resulted from a belief that the thing acquiesced in was conformable to the law or fact;

xxx xxx xxx

   (ff) That the law has been obeyed.

xxx xxx xxx

19. Pepsi-Cola Products Philippines, Inc. v. Molon, et al., supra note 17, at 143 and J-Phil Marine, Inc. and/or Candava, et al. v. NLRC, et al., supra note 15, at 675.

20. KEPHILCO Malaya Employees Union v. KEPCO Philippines Corp.(3rd Division Resolution), supra note 17; D.M. Wenceslao and Associates, Inc. v. Santos (1st Division Resolution), G.R. No. 191811, June 4, 2014; Wenphil Corporation v. Abing, et al., 731 Phil. 685, 701 (2014); Madriaga v. Court of Appeals, 501 Phil. 589, 607 (2005); and PNOC-EDC v. Abella, 489 Phil. 515, 535 (2005).