DESTILLERIA LIM TUACO & COMPANY, INC., PETITIONER, VS. HON. GUSTAVO VICTORIANO, ETC., ET AL., RESPONDENTS.

This is a petition for certiorari with preliminary injunction to annul
an order of the Court of First Instance of Rizal granting the motion of
herein respondent Engracio Verian for a writ of execution to enforce an
alleged judgment of the Wage Administration Service. Upon the filing of
the corresponding bond, this Court issued the writ of preliminary
injunction prayed for.

The record shows that on March 23,
1956, herein respondent Engracio Verian filed a claim with the Wage
Administrative Service (called WAS for short) for overtime
compensation, vacation and severance pay against herein petitioner, a
corporation duly organized and existing under Philippine Laws. The case
was investigated by a regional investigator, and on June 28, 1956, said
investigator rendered his “findings and recommendations” holding the
respondent corporation liable to pay the claimant Engracio Verian in
the sum of P5,780.38 for overtime compensation and separation pay, and
requesting said corporation to deposit the amount due Verian.

On July 20, 1956, the corporation, thru counsel, filed a “motion to
review” the “findings and recommendations”, alleging that the claim for
overtime compensation has already prescribed and claimant, who was
allegedly dismissed in May, 1954, is not entitled to separation pay
under Rep. Act 1052 (Termination Pay Law) which took effect only on
June 12, 1954.

Acting upon the motion, the regional
attorney, on August 6, 1956, issued a resolution dismissing the claim
for severance pay, but, concurring “with the result of the findings and
recommendation of the investigator”, held the corporation liable to
claimant for overtime compensation.

On October 25, 1956, the
respondent corporation, filed a petition for rehearing alleging that
the “findings and recommendations” of the regional investigator are
with out basis in fact and in law. With the petition for re-hearing
still pending resolution, the claimant Engracio Verian, on November 5,
1956, filed with the court of First Instance of Rizal a motion for the
execution of the “decision” of the WAS, which, according to him, has
already become final. The corporation opposed the motion; nevertheless,
the respondent Judge of the court below, on November 27, 1957, issued
the order complained of, granting the motion for execution. A writ of
execution was accordingly issued on December 12, 1957 to enforce and
satisfy the so-called judgment of the WAS. A motion for reconsideration
of the order and/or quashal of the writ of execution issued pursuant
thereto on the ground of lack of jurisdiction having been denied, the
corporation filed the present petition for certiorari with prayer for
preliminary injunction.

The issue raised is not new. In the case of Winch vs.
P. J. Keiner Co., Ltd. (104 Phil., 735; 55 Off. Gaz. [35] 7337), this
Court pointed out that a claimant, who, instead of going directly to
court, files his claim with the WAS, may pursue three steps or methods
by which he may enforce his claim. Thus, once a claim is filed, the
same shall be assigned to an investigator whose function shall be to
mediate and endeavor to induce the parties to settle the claim by
amicable agreement. This function is called mediation. If an agreement
is arrived at then the same becomes binding and must be complied with.
Another method refers to arbitration. This is resorted to if no
amicable agreement is arrived at between the parties. The investigator
shall ask the parties whether they are willing to submit the case to
arbitration and if they do then they should subscribe to an agreement
in writing which shall be signed by them before the investigator. If
they do agree to arbitration as stated, the decision of the arbitrator
shall be binding, final and conclusive between them. Finally, in the
even mediation fails and the parties are not willing to arbitrate then
the claim shall be assigned to a Claims Attorney who, if he finds the
claim meritorious and the employee is indigent, shall prepare the
corresponding complaint to be submitted to a competent court. (See also
Cebrero vs. Talaman, 103 Phil., 687; Ponce vs. Co King
Lian, 107 Phil., 263; 57 Off. Gaz. [26] 4762.) Only through these
modes—mediation, arbitration, or court action—may the WAS cause the
employer to satisfy the employee’s claim for unpaid wages, and the WAS
has no authority to render a “decision”, in the sense this term is used
in legal parlance, on the claim for wages, except insofar as it has to
determine whether, in its opinion, the claim is meritorious, as a
condition precedent to the institution before any competent court of an
ordinary action for the recovery of the sum of money it considers due
to the claimant. (Potente vs. Saulog Transit, Inc., 105 Phil.,
525.) “It is only when an arbitration agreement or compromise is
entered into between the parties that a judgment can be rendered by the
WAS and enforced by the Courts.” (Ortega vs. Saulog Transit,
Inc., 105 Phil., 907; 57 Off. Gaz., [46] 8299). Where the parties did
not enter into a written agreement to submit, their dispute to the WAS
for arbitration “whatever decision or judgment the WAS may have
rendered in the case is not binding upon the parties, and a writ of
execution issued by the Court of First Instance to enforce it is
unauthorized and illegal.” (Garcia vs. Garcia, 106 Phil., 413; 57 Off. Gaz. [3], 460.)

In the present case, lit does not appear that the parties had submitted
the case to arbitration in an agreement in writing signed before the
investigator. The WAS investigator merely conducted an investigation
and thereafter-rendered his “findings and recommendations.” Such
“findings and recommendations” obviously was no judgment at all, that
is a judgment that could be enforced through a writ of execution. It
is, under the law, nothing more than a finding that the claim is
meritorious and justifies the filing of a complaint in court.
Consequently it is not binding and conclusive on herein petitioner and
cannot be executed by mere petition for execution without trial and
decision on the merits.

The case of Brillantes vs.
Castro, (99 Phil., 497; 56 Off. Gaz. [29] 4621) cited by claimant in
his motion for execution and relied upon by the court below in the
order complained of is not applicable in the instant case. There was in
that case an express arbitration agreement signed by the parties
submitting their cases to the investigation and decision of the WAS.
(Cebrero vs. Talaman, supra; Ponce vs. Co King Lian, supra.)

Wherefore, the petition must be, as it is hereby, granted, and the
preliminary injunction heretofore issued made permanent. Without costs.

Paras, C. J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion and Barrera, JJ., concur.