JOSE SERRANO, PETITIONER, VS. LUIS SERRANO, MARCELINO MONTANTE AND HON. COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

Jose Serrano versus Luis Serrano

The Case

This is a petition for review by certiorari brought by Jose Serrano against Luis Serrano and Marcelino Montante, the two workers who sued him, and against the Court of Industrial Relations. Jose Serrano hired the two men to build his apartment house in Manila. They claimed they worked twelve hours a day, were never paid their basic wages or their overtime pay, and were then illegally dismissed. They asked for their wages, their overtime compensation, and reinstatement. Jose Serrano answered that there was no employer-employee relationship at all, and that the labor court had no jurisdiction because the claim was a mere money claim. The case matters because it fixes two rules every labor lawyer must know: jurisdiction over the subject matter is determined by the allegations of the complaint, and a court may defer ruling on a motion to dismiss until after the evidence is closed.

Procedural History

The two workers filed their petition with the Court of Industrial Relations. Jose Serrano moved to dismiss on the ground of lack of jurisdiction. The court deferred its ruling on that motion and directed the parties to present their evidence. The workers presented their evidence, and Jose Serrano presented the testimony of several witnesses. After several postponed hearings, during which Jose Serrano repeatedly failed to appear, the court deemed the case submitted for decision. It then issued the order complained of, finding that the workers were entitled to recover their wages and overtime compensation, and directing the Examining Division of the Court to compute the amounts. It did not order reinstatement, because the construction of the house had already been finished. Jose Serrano moved for reconsideration, and the court en banc affirmed the order. He then brought this appeal by certiorari to the Supreme Court.

Facts

Jose Serrano engaged the services of Luis Serrano and Marcelino Montante in the construction of his apartment house at Number 1317 Makata Street, Manila. The two men alleged that they worked twelve hours a day but were paid neither their basic daily wages nor the corresponding overtime compensation. Luis Serrano was dismissed on April 30, 1960, and Marcelino Montante on May 30, 1960. At that time, the record shows, the construction was still incomplete.

The workers brought their grievances to the proper labor officials, but the corresponding petition could not be filed until July 7, 1960. In his answer, Jose Serrano denied the existence of an employer-employee relationship and attacked the jurisdiction of the Court of Industrial Relations, arguing that the case involved only money claims, that the house had already been completed, and that the complaining employees did not exceed thirty in number.

At the hearings, Jose Serrano moved for dismissal on the ground of lack of jurisdiction, but the court deferred its ruling and directed the parties to present evidence. He later moved for an ocular inspection of the house, which was denied because an inspection could not settle whether the house had been completed before or after July 7, 1960. He then asked for a continuance, which was also denied. Required to present such other evidence as he had, he declined and left the courtroom. On the next scheduled hearing he did not appear. On a later date he again failed to appear, and the workers moved to consider the case submitted. The court held that, having been given sufficient time to adduce his evidence and having failed to take advantage of the opportunity, Jose Serrano had waived his right to present additional evidence, and it deemed the case submitted.

Issues

• Whether or not the Court of Industrial Relations had jurisdiction over the subject matter of the case, considering that it allegedly involved only money claims and that reinstatement had become impossible.
• Whether or not Jose Serrano was denied due process when the lower court issued its order before he had rested his case and before the court had resolved his motion to dismiss.

Applicable Provisions

The decision does not quote any statutory provision. It rests on settled jurisprudence, which it states in its own words. On the test of jurisdiction, the Court lays down the governing rule:

The court's jurisdiction over the subject matter of a litigation is determined by the allegations of the complaint.

This rule bears on the case because the petition of the two workers alleged an employer-employee relationship, illegal dismissal, and a prayer for reinstatement, and those allegations were sufficient to confer jurisdiction on the labor court.

On the authority of the labor court over money claims, the Court states the settled doctrine:

It being settled that the Court of Industrial Relations has jurisdiction over claims for overtime compensation when coupled with a prayer for reinstatement, it is clear that the satisfaction of the unpaid wages may likewise be ordered incidentally to said jurisdiction.

This rule bears on the case because the prayer for reinstatement carried the money claims with it, even though reinstatement itself had become impossible.

Ruling

On the first issue, the Court held that the labor court had jurisdiction. Jurisdiction over the subject matter is determined by the allegations of the complaint, and the allegations in the workers' petition were sufficient to confer that jurisdiction. The Court rejected the argument that the completion of the house stripped the court of power. It found that the workers were dismissed on April 30 and May 30, 1960, and that the record affirmatively showed that the construction was then incomplete. The evidence also showed that the workers had seasonably brought their grievances to the proper labor officials, although the petition could not be filed until July 7, 1960. Since the labor court has jurisdiction over claims for overtime compensation when coupled with a prayer for reinstatement, the satisfaction of the unpaid wages could likewise be ordered incidentally to that jurisdiction.

On the second issue, the Court held that there was no denial of due process. A court has ample discretion to defer its action upon a motion to dismiss until after the parties have introduced all their evidence and submitted the case for decision on the merits. Under the circumstances, the Court was not prepared to hold that the lower court had abused its discretion. The Court was further satisfied that the petitioner's behavior indicated either that he had virtually submitted the case for decision or that he had no additional evidence to introduce. He did not claim that he had any such evidence, much less intimate its nature. The Court also noted that the evidence of record substantially bore out the findings of fact in the order complained of.

Doctrine

First, jurisdiction over the subject matter of a litigation is determined by the allegations of the complaint, not by the defenses raised in the answer nor by the eventual outcome of the case. If the complaint alleges an employer-employee relationship, an illegal dismissal, and a prayer for reinstatement, the labor court acquires jurisdiction, and the subsequent completion of the project does not divest it.

Second, the Court of Industrial Relations has jurisdiction over claims for overtime compensation when coupled with a prayer for reinstatement, and the satisfaction of unpaid wages may be ordered incidentally to that jurisdiction.

Third, a court has ample discretion to defer its action upon a motion to dismiss until after the parties have introduced all their evidence and submitted the case for decision on the merits. A party who declines to present evidence when required, and who repeatedly fails to appear, waives his right to adduce further evidence and cannot later claim denial of due process.

Disposition

The Supreme Court affirmed the order of the Court of Industrial Relations, with costs against Jose Serrano.

Remember This

Memorize this line: jurisdiction over the subject matter is determined by the allegations of the complaint. Examiners use this case to test the jurisdictional test in labor cases and the rule that a court may defer ruling on a motion to dismiss until after the evidence is closed, so that a party who abandons the hearings cannot cry denial of due process.