AMELITA M. ESCAREAL, RUBIROSA VERSOZA AND DAVE FRANCISCO M. VELASCO, PETITIONERS, VS. PHILIPPINE AIRLINES, INC., PATRIA T. CHIONG, JORGE MA. CUI, JR., NATIONAL LABOR RELATIONS C…

Escareal versus Philippine Airlines

The Case

This is a petition for review brought by three regular cabin attendants of Philippine Airlines against the airline and its officers, arising from a labor dispute over a one-year suspension imposed on them for declining to serve a delayed international flight in order to assert their rest period under a collective bargaining agreement. The case matters because it is the Supreme Court's clean statement of res judicata in a setting where both contending parties, each dissatisfied with the same labor tribunal ruling, separately filed their own petitions for certiorari in the Court of Appeals. The Court holds that the first appellate decision to become final bars the second petition, even though the second petition attacks a different portion of the same ruling.

Procedural History

The cabin attendants filed a complaint for unfair labor practices before the National Labor Relations Commission, which was raffled to Labor Arbiter Manuel Caday. The Labor Arbiter declared the one-year suspension illegal and ordered reinstatement with backwages of 228,000 pesos each, plus unenjoyed benefits and attorney's fees, dismissing the claim for damages. On appeal, the National Labor Relations Commission affirmed the factual findings but modified the award, holding that only eleven of the twelve months of suspension were illegal, reducing the judgment award to 209,000 pesos each plus benefits for eleven months, and affirming the attorney's fees. Both sides moved for reconsideration, and both motions were denied.

Philippine Airlines then filed its own original action for certiorari in the Court of Appeals, assigned to its Thirteenth Division. The cabin attendants filed a consolidated comment and opposition. Later, they too filed their own petition for certiorari, assigned to the Special Eleventh Division. The airline moved to consolidate the two petitions, but consolidation was denied because the first petition had already been decided. The Thirteenth Division dismissed the airline's petition and affirmed the labor tribunal in full, and that decision became final and executory. The Special Eleventh Division then dismissed the cabin attendants' petition on the ground of res judicata. Their motion for reconsideration was denied, so they came to the Supreme Court by petition for review.

Facts

The three petitioners were regular international cabin attendants of Philippine Airlines receiving a monthly salary of 19,000 pesos. They were assigned to Flight PR501 from Manila to Singapore, scheduled to depart at three in the afternoon on 3 April 1997. At the pre-flight briefing, the flight purser announced that departure was moved to five-thirty in the afternoon because the aircraft would arrive late, and that the crew would receive a per diem of thirty-three US dollars because of the reduced rest period. The petitioners received the per diem without incident.

At the airport, the crew learned the aircraft was still unavailable, which meant further delay. The petitioners informed the airline's line administrator and their union that they intended to back out of the flight, citing the reduction of their rest period below the minimum guaranteed by the collective bargaining agreement. The union coordinated with the scheduling office, and it was agreed that it was better for the airline that the petitioners assert their rest period while still in Manila rather than in Singapore. The petitioners returned their per diem, reported to the scheduling office, and arranged their next duty. The flight left with replacement cabin attendants and arrived in Singapore without further incident.

Despite their explanation that they were asserting a contractual right, the airline charged them administratively for conspiracy or concerted action, loitering or abandonment of post, refusal to take assignment, and withholding cooperation. Without acting on their motion to dismiss or for a bill of particulars, the airline found them guilty and imposed a one-year suspension without pay. This led to the labor complaint and the long procedural path that followed.

Issues

• Whether or not the decision of the Court of Appeals in the first petition, once final, constitutes res judicata barring the second petition filed by the cabin attendants.
• Whether or not there is identity of parties, subject matter, and cause of action between the two petitions for certiorari.
• Whether or not the final and executory judgment may be annulled or set aside to avoid sacrificing justice to technicality.

Applicable Provisions

Section 38 of the collective bargaining agreement provides:

Section 38. After the tour of duty, a cabin attendant shall be allowed a rest period of at least twice the number of flight duty hours in his tour-of-duty before he is assigned to another tour-of-duty. The minimum rest period after a tour-of-duty will be twelve (12) hours.

This is the contractual right the petitioners invoked when they declined the flight, and it frames the merits of the labor dispute.

Paragraph (b) of Section 47 of Rule 39 of the Rules of Court provides:

Sec. 47. Effect of judgments or final orders. The effect of a judgment or a final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows: (b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity.

This is the provision the Court construes, and it supplies the preclusive effect that defeats the second petition.

Ruling

On the first issue, the Court ruled that res judicata applies. A judgment that is final is conclusive not only as to the matter directly adjudged but as to any other matter that could have been raised in relation thereto. The matter directly adjudged in the first petition was the legality of the eleven-month suspension, and the remaining one-month suspension is a matter that could have been raised in relation thereto and is actually and necessarily included in that resolution.

On the second issue, the Court found all four requisites of res judicata present: the former judgment is final; it was rendered on the merits; it was rendered by a court with jurisdiction over the subject matter and the parties; and there is identity of parties, subject matter, and cause of action. The Court defined subject matter as the item with respect to which the controversy has arisen, and cause of action as an act or omission of one party in violation of the legal right of the other. The sole and common objective of both petitions was to secure the reversal of the same labor tribunal decision, so the subject matter and cause of action in both is that assailed decision. Causes of action are identical when there is identity in the facts essential to the maintenance of the two actions, or where the same evidence will sustain both.

On the third issue, the Court refused to annul the final judgment. The remedies to annul a final and executory judgment are a petition for relief from judgment on the ground of fraud, accident, mistake, or excusable negligence, a petition for annulment of judgment on the ground of extrinsic fraud and lack of jurisdiction, or a direct or collateral attack against a judgment void on its face. None of these grounds was alleged, and the petitioners had their day in court, having filed a complaint, their own petition, and a lengthy consolidated comment. The Court stressed that res judicata wards off endless litigation, ensures the stability of judgments, guards against inconsistent decisions on the same set of facts, and prevents a party from being vexed twice on the same cause.

Doctrine

Res judicata applies when there is identity of parties, subject matter, and cause of action, and its requisites are: the former judgment must be final; it must be on the merits; it must have been rendered by a court with jurisdiction over the subject matter and the parties; and there must be identity of parties, subject matter, and cause of action. Where both contending parties separately elevate the same labor tribunal judgment by their own petitions for certiorari, the first appellate decision in one petition, once it assumes finality, constitutes res judicata on the other petition. A final judgment is conclusive not only as to the matter directly adjudged but as to any other matter that could have been raised in relation thereto, as Paragraph (b) of Section 47 of Rule 39 provides.

Disposition

The Supreme Court affirmed the decision and resolution of the Court of Appeals dismissing the petition, with no pronouncement as to costs. The airline prevailed on the procedural bar.

Remember This

Memorize this line: when both sides separately challenge the same labor ruling by their own petitions for certiorari, the first appellate decision to become final is res judicata on the other. Examiners use this case to test the four requisites of res judicata and the rule that a final judgment bars matters that could have been raised in relation to the matter adjudged.