RUBEN DELFIN, BENITO DOLOSA, CORNELIO AGUILAR, ANASTACIO GORDOLA, CESAR PANALIGAN, LUIS VIESCA, VICENTE GUADAMOR, JUAN CAGATIN, SIMEON CHICA, REYNALDO CINCO, WILFREDO IPAS, SIME…

This petition seeks the reversal of the decision of then Deputy
Minister of Labor Amado Inciong
which affirmed the decision of the National Labor Relations Commission in NLRC
Case No. LR-4320. 
The said decision of the NLRC reversed the decision of Labor Arbiter
Jose T. Collado, Jr., which ordered the reinstatement
of complainants (herein petitioners) to their former positions without loss of
seniority and other personnel privileges.

The facts of the case, as succinctly stated by the Solicitor
General, are as follows:

“The 136 petitioners herein are former employees of private
respondent Atlantic Container Corporation (hereinafter called Atlantic
for brevity).  Petitioners organized
themselves into the Atlantic Container Employees Organization and affiliated
with the Federation of Democratic Labor Unions (hereinafter called FEDLU for
brevity).  (petition,
pp. 1-4)

“On February 11, 1964,
Atlantic and FEDLU executed a Collective Bargaining
Agreement which was amended on August
31, 1964.  Claiming that Atlantic
and its General Manager, private respondent Roberto Jacinto, refused to
implement the Collective Bargaining, Agreement and its amendment, petitioners
and FEDLU struck on February 16, 1966.  Thereafter, the Atlantic Container Employees
Organization and FEDLU filed Case No. 5195-ULP in the Court of Industrial
Relations (hereinafter called CIR for brevity) charging Atlantic,
Roberto Jacinto and one Hedy F. Jacinto as follows:

‘Through the verified complaint filed by
the Prosecutor of the Court, complainants charge the respondents of unfair
labor practice within the meaning of Section 4(a), subsections 1, 2, and 6 in
relation to Section 13 of Republic Act No. 875. 
It is specifically alleged that on February 11, 1964 and August 31,
1964, the company and complainants entered into a collective bargaining agreement
and a supple­mental agreement respectively, which provide, among others, for
union shop, grievance procedure, check-off of union dues and increase of
salary; that respondents, in bad faith refused to implement said provisions of
the agreements notwithstanding complainants’ repeated demands; that soon
thereafter, respondents rotated the permanent employees who are active members
of the union; that on account of said acts of respondents, the union filed a
notice of strike on February 9, 1966 and on February 16, 1966 it actually
declared a strike; and that during the strike, respondents told Benito Dolosa that he would be reinstated if he resigned as
president of the union and dissolved the same.’ (Petition, ANNEX A, pp. 1-2)

“On November 16, 1972,
a Decision was rendered by the CIR in Case No. 5195-ULP (Petition, ANNEX “A”),
dismissing the case with respect to Hedy F. Jacinto,
but finding:

‘x x x Atlantic Container Corporation and
Roberto Jacinto, x x x
guilty of unfair labor practice (and ordering them) to cease and desist from
further committing the same; to reinstate complainants striking members Benito Dolosa, Anastacio Gordola, Antonio Moreno, Jose Orzal,
Cornelio Aguilar, Ernesto Hausan and Mauro Wagan, with back wages from February 16, 1966 up to a
period of three years, without loss of seniority and to make good the benefits
herein found to have been denied them.’

“On November 27, 1972
and December 6, 1972, the
Atlantic Container Employees Organization and FEDLU filed motions to reconsider
aforesaid Decision, presumably for the reinstatement of all the petitioners
herein, but the CIR denied the motions for being pro forma and
for having been filed out of time (Petition, ANNEX “B”).

“Because Atlantic allegedly stopped operating prior to the
rendition of the Decision in Case No. 5195-ULP, which stoppage of operation
petitioners claim they actually learned in 1973 after an investigation, the 136
petitioners herein filed Charge No. 5701-ULP (Petition, ANNEX “C”) in the CIR
on February 12, 1974, alleging in part as follows:

‘3.      The
complainants, members of the Atlantic Container Employees Organization, or ACEO
affiliated with the Federation of Democratic Labor Unions (FEDLU) are employees
of the Atlantic Container Corporation with whom it had a subsisting collective
bargaining agreement that Atlantic wastesly (sic)
traversed directly and/or indirectly to the extent that, in protest of the
latter’s unfair labor practices, complainants staged a strike which
subsequently was filed before, and decided by the Court of Industrial Relations
on November 16, 1972, in Case No. 5195-ULP, copy of which decision is made as
integral part hereof as Annex “A” the judgment became final and executory.

‘4.           To defeat the
law, the judgment, supra, and the herein complainants, Inland Industries Inc.,
was concocted and subsequentIy registered as a
corporate entity by Lazaro Arriola,
Bienvenido Katalbas, Aurora
Jereza, Goshi de Yulo and Paz Yulo, alter egos and
conduits of Atlantic Container, to engage, as it indeed engaged in the
identical business as Atlantic Container absorbing, as it did all the assets
including but not limited to the facilities and machineries of the latter.  (vide:  Sec. 2(c), RA 875)

‘The judgment in Case No. 5195 became inutile, because Atlantic
Container supposedly ceased operations to effect the lock-out- of the
complainants accomplished by setting the respondent Inland Industries, Inc.,
which thereafter continued to do the business of Atlantic Container.’
(Petition, ANNEX “C”, pp. 3-4)

“Named respondents in the above case were Atlantic, Roberto Jacinto,
Inland Industries, Inc., Lazaro Arriola,
Bienvenido Katalbas, Aurora
Jereza, Goshi de Yulo, and Paz Yulo, as
incorporators thereof, were impleaded on the claim
that they were the alter ego of Atlantic, Inland Industries
having allegedly been organized “x x x to engage, as it indeed engaged in the identical business
as Atlantic Container, absorbing, as it did, all the assets including but not
limited to the facilities and machineries of the latter.” (Petition, p. 6;
ANNEX “C”)

“When the CIR was abolished, Charge No.
5701-ULP was transferred to the NLRC where the case was docketed as Case No. LR-4320 (Petition, p. 6; ANNEXES “D” AND “D-1”).  On December
29, 1975, NLRC Arbiter Jose T. Collado
rendered a Decision (Petition, ANNEX “E”) the dispositive
portion of which is:

‘IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, respondents Roberto
Jacinto, Atlantic Container Corporation, Inland Industries, Inc., Lazaro Arriola, Bienvenido Katalbas, Paz Yulo, Goshi de Yulo and Aurora Jereza are hereby
ordered, in their joint and several capacities, to reinstate complainants to
their former positions without loss of seniority and other personnel privileges
and to pay back wages of three (3) years without any deduction from earnings
elsewhere.

‘Considering, however, that not all complainants evinced their
desire to prosecute the case, the award is extended only to those who testified
and/or presented their respective manifestation of prosecuting their causes of
action x x x.’

“Only 86 out of the 136 Petitioners in Case No.
LR-4320 (Charge No. 5701-ULP) were ordered so
reinstated.

“Respondents in Case No. LR-4320 (Charge
No. 5701-ULP) appealed to the NLRC (Petition, p. 7).  On September
15, 1976, the NLRC, acting through public respondents Commissioners
Diego P. Atienza, Geronimo Q. Quadra and Cleto Villatuva, set aside the
Decision of Arbiter Collado and dismissed
petitioners’ complaint for unfair labor practice (Petition, ANNEX “F”).  The dismissal was based on three (3) grounds,
viz:  (a) res judicata, in
that Case No. LR-4320 (Charge No. 5701-ULP) was barred by the prior judgment in
Case No. 5195; (b) that petitioners’ cause of action had prescribed; and (c)
that Atlantic and Inland Industries, Inc., were distinct and separate entities.

“Petitioners appealed to the Secretary
(now Minister) of Labor who on December
28, 1978, through respondent Deputy Minister Inciong,
rendered a Decision affirming the Decision of the NLRC (Petition, ANNEX
“H”).  Petitioners moved to reconsider
the Decision dated December 29, 1978, but their motion was denied by respondent
Deputy Minister in an Order dated May 11, 1979 (Petition, ANNEX “I” AND
“J”).  (pp. 148-153, Rollo)

On July 3, 1989, petitioners filed the instant petition charging
public respondents NLRC and Deputy Minister Amado Inciong with grave abuse of discretion in annulling the
decision of the Labor Arbiter and ordering the dismissal of the complaint for
unfair labor practice in Case No. LR-4320 (originally Charge
No. 5701 before the CIR was abolished and hereinafter referred to as the second
case).  On July 9, 1979, We required
the respondents to file their comments to the petition.  (p. 101, Rollo).

Respondents, Inland Industries, Inc., Lazaro
Arriola, Buenvenido Katalbas, Aurora Jereza, Goshi de Yulo and Paz Yu filed
their Comment on August 30, 1979 (p. 120-131, Rollo)
raising the same arguments raised before the Labor Arbiter, to wit:  1) that the charge subject of the petition is
barred by res judicata;
2) that petitioners’ cause of action had prescribed and that the same is now barred
by laches; and 3) that the corporate and distinct
personality of respondent Inland was not successfully pierced.

Respondents Atlantic Container Corporation and Roberto Jacinto
filed their Comments (pp. 136-141, Rollo) on September 10, 1979 raising the same
arguments as respondents Inland, et al.

The Solicitor General, on the other hand, filed his Comment (pp.
148-161, Rollo) dated October 10, 1979.  His stand was different from that taken by
public respondents NLRC and Deputy Minister Inciong,
and he joined the petitioners in their arguments.

Petitioners argue that public respondents NLRC and then Deputy
Minister of Labor Amado Inciong
committed grave abuse of discretion when it ordered the dismissal of their
complaint on the following grounds:  a) their
cause of action is barred by the principle of res
judicata; b) their cause of action is barred
by prescription; and c) private respondents Atlantic Container Corporation and
Inland Industries, Inc. were separate and distinct entities.

According to the petitioners, Case No. 5195 (hereinafter referred
to as the first case), brought before the Court of Industrial Relations was
singularly initiated and prosecuted by FEDLU, the labor union.  It did not enumerate any one of the 136
strikers who were the complainants in the second case, subject of this
petition.  Petitioners further contend
that the respondents in the first case were Atlantic,
Roberto Jacinto and Hedy F. Jacinto while in the
second case, the respondents were Atlantic, Roberto
Jacinto, Inland Industries, Inc., Lazaro Arriola, Bienvenido Katalbas, Paz Yulo, Goshi de Yulo and Aurora Jereza.  Moreover,
the petitioners, adopting the view of the Solicitor General in his Comment,
contend that the second case is based on two causes of action namely, (1) one
predicated on fraud x x x,
and (2) the other based on private respondent’s violation of the CBA which
culminated in a strike.  In the first
case, however, the cause of action is violation of the CBA only.  Hence, the second case is not barred by the prior
judgment in the first complaint.

The resolution of this petition rests primarily on the issue of
whether or not the second case (Case No. LR-4320) is barred by the prior
judgment in the first case (Case No. 5195) and if not, whether or not
petitioners’ cause of action had prescribed.

For a prior judgment to constitute a bar to a subsequent case,
the following requisites must concur:  a)
it must be a final judgment or order; (b) the court rendering the same must
have jurisdiction over the subject matter and over the parties; (c) it must be
a judgment or order on the merits, and (d) there must be between the two cases
identity of parties, subject matter and cause of action (Ibabao
v. IAC, No. 74848, May 20, 1987, 150 SCRA 76).

There is no question that the first three (3) requisites are
present in this case.  First, the
decision in the first complaint had already become final and executory.  The
motion for reconsideration filed by the union in that case was denied by the
CIR and no petition questioning the denial was brought to this court.  The fact of its finality was admitted by the
petitioners in their second complaint [Par. 3, Charge (Complaint), ULP-5701,
pp. 42-46, Rollo]. 
Second, the Court of Industrial Relations (CIR) which rendered the
decision had jurisdiction over the subject matter and over the parties.  Third, the judgment rendered therein was a
judgment on the merits of the case after the parties presented their evidence,
oral and documentary.

Going now to the fourth requisite, private respondents NLRC and
then Deputy Minister Inciong did not commit any grave
abuse of discretion amounting to lack of jurisdiction when they ruled that
there is, between the first and the second complaints, identity of causes of
action, subject matter and parties.

The Solicitor General, contends that there are two (2) causes of
action in the charge subject of this petition, namely:  (1) the unfair labor practices committed by
Atlantic; and 2) the alleged fraudulent closure of Atlantic and the birth of
inland which were actually one and the same corporation, with the purpose of avading its obligations to Atlantic’s employees.  We do not agree.  There is an identity of cause of action in
the two cases, that is, the unfair labor practices committed by Atlantic
against its employees during its existence. 
The obligations of Atlantic arising from the acts of unfair labor
practices committed against its employees during the former’s
existence were already settled in the first case.  It is clear that whatever cause of action
individual petitioners had against Atlantic for
violations of the CBA constituting an unfair labor practice act had already
been heard in the first case.  The union
presented its evidence, oral and documentary although only those who testified
were ordered reinstated.  The allegation
regarding the fraudulent closure of Atlantic and the
establishment of Inland for the purpose of evading its obligations to the former’s employees for unfair labor practice comes to play
only in the execution or enforcement of the final and executory
decision in the first case.  It cannot,
when joined with the unfair labor charges already settled in the first case,
make out a different cause of action.

While it is true that the complainants in the
first charge was the union, in reality it had no material interest in
the outcome of the case.  The real party
who stands to be benefited or defeated by a case brought in the name of the
union are the union members themselves.  Since the judgment therein had become final
and executory, the subsequent filing of another ULP
charge against Atlantic for the same violations committed during its existence, is barred by res
judicata. 
The bringing of the same action in the name of the individual members of
the union will not take out the case from the ambit of the principle of res judicata.  Neither will the bringing in of new
respondents in the name of the new corporation Inland, its incorporators and
private respondent Roberto Jacinto, who is also its General Manager, help
petitioners’ cause.

It should be noted that in the decision of the first complaint,
only seven (7) of the members of the union were ordered reinstated “inasmuch as
complainants and/or their witnesses failed to present any evidence, oral or
documentary, as to who were those other union members who joined the strike.”
In the second complaint, Labor Arbiter Jose T. Collado
ordered the reinstatement of only eight-six (86) of the 136 petitioners-members
of the union “considering, x x x,
that not all complainants evinced their desire to prosecute the case, and “the
award (was) extended only to those who testified and/or presented their
respective manifestation of prosecuting their causes of action x x x.” If We were to allow the
second complaint to prosper for the eighty-six (86) (out of 136)
petitioners-members union after only seven (7) were ordered reinstated in the
first complaints, nothing would deter the other members of the union who were
not yet ordered to be reinstated from bringing a third complaint and there
would be no end to the litigation until all of the members of the union are
ordered reinstated.

We have already held that when a labor union accuses an employer
of acts of unfair labor practice allegedly committed during a given period of
time, the charges should include all acts of unfair labor practice committed
against any and all members of the union during that period.  The union should not, upon dismissal of the
charges first preferred, be allowed to split its cause of action and harass the
employer with subsequent charges based upon acts committed during the same
period of time (Dionela, et al. v. CIR, No. L-19334, August 31, 1963, 8 SCRA 832 at 837).  The underlying philosophy of the doctrine of res judicata is
that parties ought not to be permitted to litigate the same issue more than
once; that when a right or fact has been juducially
tried and determined by a court of competent jurisdiction, or an opportunity
for such a trial has been given,
the judgment of the court, so long as it remains unreversed,
should be conclusive upon the parties and those in privity
with them in law or estate, (Marabao v. Mendoza, 119
SCRA 97 Sy Cao v. CA, 132
SCRA 302).  It is to the interest of the
public that there should be an end to litigation by the same parties and their
privies over a subject once fully and fairly adjudicated.  Interest republicae
ut sit
finis litium.  (Valera v. Banez, supra; Masagana Telemart, Inc. v. CA, 135 SCRA 694, cited in Ibabao v. IAC, No. 74848, May 20, 1987, 150 SCRA
76).

The issue of whether or not the second ULP charge had prescribed
need not be resolved by Us in view of Our finding that
res judicata
had set in.

We agree however, with the Labor Arbiter’s finding that the
closure of Atlantic and the establishment of Inland for the purpose of avoiding
any obligation which may be adjudged against the former in favor of its
employees was substantially proven.  As
observed by Labor Arbiter Jose T. Collado:

“On the connection of Inland Industries, Inc. to Atlantic Container
Corporation, neither respondents presented evidence to negate complainants’
exhibits.  Inland merely submitted a
supposed mortgage executed by Roberto A. Jacinto and his wife of Atlantics
machineries/assets to the Development Bank of the Philippines and its
incorporation papers.  Conversely, it
should be noted that the respondents did not question the validity of Atlantic
Container Corporation and Roberto A. Jacinto’s
culpability for unfair labor practices having adopted as evidence, as
heretofore stated, the CIR judgment.

“Also, unrebutted are the documental
proofs that Lazaro Arriola
and Bienvenido Katalbas
were co-employees of the complainants (reflected in the SSS records); Roberto
A. Jacinto, Atlantic Container Corporation’s General manager, who wrote the SSS
on August 9, 1967 informing it of Atlantic’s closure ‘as of May, 1966’ due to
labor strike since February, 1966.” (Exh.
“D”), reappeared later as Inland’s General Manager in
his letter to the SSS (Exh. “F”), and Inland’s official birth on July 29, 1966 immediately after
Roberto A. Jacinto declared Atlantic as non-existent.

“On the basis of the foregoing, it can be safely concluded that
Inland Industries, was conceived with the specific end of rendering moot and
academic any relief emanating, from Atlantic Container Corporation’s unfair labor
practices.  This is very apparent from
the records of this case as a whole.

“Under the circumstances, piercing the corporate veil is
permissible, especially so when a second entity is born and generated to
subvert the law and the purpose of its creation and Inland Industries, Inc. was
precisely registered by Roberto A. Jacinto to defeat the legitimate claims and
aspirations of the herein complainants. 
In that act, Roberto A. Jacinto, clearly the owner of Atlantic Container
Corporation and Inland Industries, Inc., resorted to the corporate of Inland’s distinctness of personality to defeat public
convenience, justify wrongdoing, protect fraud and perpetrate deception, and
primordial of them all, to escape liability for his unfair labor practice
acts.” (pp. 52-53, Rollo)

This is a sufficient reason, for the purpose of enforcing the
judgment in the first case, for applying the rule that when a second entity is
born or generated to subvert the law, resort to corporate fiction of
distinctness of personality is prevented.

ACCORDINGLY, judgment is hereby rendered:  a) AFFIRMING the dismissal of the complaint
in NLRC Case No. LR-4320; and b) REVERSING the findings of public respondents with
regard to distinctness of personality of Atlantic and Inland for purposes of
compliance with their obligations to the former’s
employees as adjudged in Case No. 5195-ULP.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Griño-Aquino, JJ., concur.