STA. CECILIA SAWMILLS, INC., PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS AND TAGKAWAYAN LABOR UNION, RESPONDENTS.

Sta. Cecilia Sawmills versus Court of Industrial Relations

The Case

This is a petition brought by Sta. Cecilia Sawmills, Incorporated, which I shall call the Company, against the Court of Industrial Relations and the Tagkawayan Labor Union, which I shall call the Union. The Company asks the Supreme Court to review and reverse an order of the Court of Industrial Relations, affirmed by that court sitting en banc, which authorized the Company to deduct thirty percent of a sum of back wages and to pay that deduction to the Union's counsel as attorney's fees, and to deposit the balance with the court. The case matters because it teaches the bar candidate how a final judgment is carried into execution, how an attorney's charging lien is enforced against a fund in the hands of a party, and who has the legal standing to object to defects in a notice of that lien.

Procedural History

The case began in the Court of Industrial Relations, in two cases entitled Tagkawayan Labor Union against Sta. Cecilia Sawmills, Incorporated and others. The Supreme Court, on February 29, 1964, modified the decision of the Court of Industrial Relations and ordered the Company to pay three months of back wages to 113 dismissed workers. That decision became final and executory.

On August 6, 1964, the Union's counsel filed an urgent motion for execution. At the hearing, the parties entered into an agreement, which the Court of Industrial Relations embodied in an order dated October 27, 1964. The Company then submitted its computation, fixing the back wages at 35,263 pesos and 50 centavos. On November 4, 1964, a notice of charging liens on back wages was filed. On November 11, 1964, the Presiding Judge issued an order authorizing the deduction of thirty percent and directing payment to counsel, with the balance to be deposited with the court. The Company sought reconsideration, which the Court of Industrial Relations en banc denied. The Company then brought the present appeal to the Supreme Court.

Facts

The Supreme Court had ordered the Company to pay three months of back wages to 113 workers who were members of the Union. When the Union's counsel moved for execution, the parties agreed that only 113 workers, and not 401, were entitled to the three months of wages, and that the Company would prepare the computation and submit it to counsel for approval. The Company computed the total at 35,263 pesos and 50 centavos.

Counsel for the Union then filed a notice of charging liens, signed by himself as counsel and by the Union's treasurer and assistant treasurer. The notice claimed thirty percent of the sum as compensation for eleven years of services rendered before the Court of Industrial Relations and the Supreme Court, including unrefunded expenses for transcripts and pleadings. It prayed that the Company be authorized to deduct that thirty percent and pay it to counsel, and that the balance be retained until further order of the court.

The Presiding Judge granted the prayer. The Company objected that the notice had not been served on it or on the laborers, and that ordering the deposit of the balance in court effectively amended the Supreme Court's decision, which had directed no such deposit.

Issues

• Whether or not the Court of Industrial Relations may order the deposit of the back wages with the court as part of the process of executing a final decision that did not itself provide for such a deposit.
• Whether or not the absence of proof of service of the notice of charging liens upon the laborers invalidates the order enforcing the attorney's lien.
• Whether or not the Company has the standing to raise, as a defense, the failure to serve the notice upon the laborers.

Applicable Provisions

The decision does not quote any statutory provision. It rests on the settled rule that the manner of executing a judgment is governed by law, which is deemed part of the decision itself. The Court states the governing principle in these words:

Decisions do not usually specify the manner of execution thereof, the same being governed by law, which, for all intents and purposes, is part of the decision itself.

This principle bears on the case because it answers the Company's claim that the deposit ordered by the Court of Industrial Relations amended the final judgment of the Supreme Court.

Ruling

On the first issue, the Court held that the deposit of the amount is merely part of the process of executing the Supreme Court's decision. Since the manner of execution is governed by law, and that law is part of the decision itself, the order to deposit the balance with the court did not amend the judgment. The appeal on this ground is manifestly devoid of merit.

On the second issue, the Court held that the notice of charging liens bears the signatures of the proper officers of the Union, which had brought the action on behalf of the laborers who were its members. That signature cured the objection that service upon the laborers had not been shown.

On the third issue, the Court held that the Company has no authority to represent the laborers in connection with the alleged absence of proof of service, and cannot complain of it or set it up as a defense, for that defense belongs to the laborers exclusively. The Court added that the notice itself stated that a copy had been furnished the Company's counsel, and that the Company had in fact filed a motion for reconsideration of the order granting the prayer. The Company therefore had full opportunity to state its objections. Moreover, the record showed no valid ground to contest either the validity of the lien or the amount claimed.

Doctrine

A final judgment is executed in the manner prescribed by law, and that law is deemed part of the decision itself. A court does not amend a judgment when it directs a deposit of the judgment amount as part of the process of execution.

An attorney's charging lien upon a fund of back wages may be enforced by deducting the fees from the fund and paying them to counsel, where the notice of the lien is signed by the proper officers of the union that litigated on behalf of its member workers.

The objection that a notice of lien was not served upon the laborers is a defense that belongs to the laborers exclusively. An employer has no standing to raise it, especially where its own counsel received a copy and it had the opportunity to oppose the lien and the amount claimed.

Disposition

The Supreme Court affirmed the order and the resolution appealed from, with costs against the Company, Sta. Cecilia Sawmills, Incorporated.

Remember This

Memorize this line: the manner of executing a judgment is governed by law, and that law is part of the decision itself. Examiners use this case to test execution of final judgments, the enforcement of attorney's charging liens against back wages, and the rule that a party may raise only defenses that belong to it.