ANTONIO M. VILLANUEVA AND FULGENCIO B. LAVAREZ, PETITIONERS, VS. HONORABLE ABEDNEGO O. ADRE, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 22, 11TH JUDICIAL REGION, AND LUCIO VE…

The central question in the petition at bar is whether or not the
regular courts may stay an execution decreed by the labor arbiters and what the
consequences are of such a recourse to the courts.

The case began from a complaint, dated January 6, 1977, for recovery of unpaid
thirteenth-month pay filed by the Sarangani Marine
and General Workers Union-ALU with the Department of Labor (Regional Office No.
Xl, General Santos
City) against the South Cotabato Integrated Port Services, Inc. (SCIPSI), a
Philippine corporation.  Later,
thirty-seven SCIPSI employees, non-union members apparently, filed their own
complaint.  The labor arbiter
consolidated the twin complaints and after hearing, ordered a dismissal on December 29, 1977.  On appeal, however the National Labor
Relations Commission, on June 9, 1981,
reversed and accordingly, ordered the private respondents, SCIPSI and its
president and general manager.  Lucio Veiayo, to pay the
thirteenth-month pays demanded. The private respondents’ motion for
reconsideration was denied, and the decision has since attained finality.

Thereafter, the parties, on orders of the labor arbiter, were
made to appear before a corporate auditing examiner to determine the private
respondents’ exact liability.  On October 24, 1986, the corporate
auditing examiner submitted an accounting and found the private respondents
liable in the total sum of P1,134,000.00.  Thereupon, the private respondents interposed
an objection and prayed for a revision. 
It appears, however, that the private respondents never pursued their
exceptions.^[1]

On January 16, 1987,
the union moved for execution and pursuant thereto, the labor arbiter issued a
writ of execution.  As a result, the
sheriff levied on two parcels of land, both registered in Lucio
Velayo’s name, with an area of 400 and 979 square
meters.

On February 14, 1987,
both SCIPSI and Velayo petitioned this Court^[2]
on certiorari with injunction on the ground,
fundamentally, that the Department of Labor’s examiner erred in her
determination of the private respondents pecuniary liabilities.

On February 16, 1987, Velayo alone filed
a petition with the respondent court (Special Case No. 227) on a cause of action based on an alleged
irregular execution, on the ground that he “was never a party to the labor
case”^[3]
and that “a corporation (that is, SCIPSI] has a separate and distinct
personality from incorporators, stockholders and officers.”^[4]

On February 17, 1987,
the respondent court issued a temporary restraining order enjoining execution of the judgment in the
aforementioned labor cases.  On March 5, 1987, the petitioner moved
for dismissal for lack of jurisdiction and litis pendentia.

On the strength of this Court’s decision in National Mines and Allied Workers Union v. Vera,^[5] the trial judge denied the motion to
dismiss.  Reconsideration having been
likewise denied, the union as well as the labor arbiter (Antonio Villanueva) and the sheriff (Fulgencio
Lavarez) themselves, on October 22, 1987, instituted these certiorari
proceedings.^[6]

Meanwhile, on April 27,
1988, the parties (in G.R. Nos. 77300-01) submitted a Compromise
Agreement whereby the private respondents agreed to pay, in installments, the
reduced sum of P637,400.00 to the workers. 
On May 11, 1988, we
issued a Resolution approving the Compromise Agreement, and considering the
cases (G.R. Nos. 77300-01) closed and terminated.^[7]

At the same time, we issued (in this petition) a Resolution
requiring the private respondents and/or counsel, Atty. Oscar Dinopol, to show cause why they should not be held in
contempt for forum-shopping.  On December
9, 1988, Atty. Dinopol filed a manifestation praying
for dismissal “not because it has become moot and academic in view of the
compromise agreement executed by the parties in G.R. Nos. 77300-01 [but
because] the subject or cause of action [thereof] is totally different from the
cause of action in the above-entitled case.”^[8]

On whether or not this case has become moot and academic in view
of the compromise reached in G.R. Nos. 77300-01, the Court rules in the
affirmative.  It should be noted that the
instant petition has been brought as a result
of the execution of the judgment rendered below, and since the parties, by
virtue of the compromise, have spelled out the manner by which payment shall be
made, execution by means of levy, the question confronting the court
herein, may no longer be carried out. 
Nevertheless, because of the ethical implications of the acts of the
private respondents, the Court is constrained to render its judgment if only to forestall future similar acts and
for the guidance of the bench and the bar.

We likewise render
judgment notwithstanding Atty. Oscar Dinopol’s
pending prayer for extension of time to file his comment to our show cause
Resolution of November 7, 1988.  We consider his manifestation, dated November 29, 1988, urging us not to
dismiss this case for having become moot and academic but because the petition
lacks merit as his comment.  We do so for
one because it has been the position of the private respondents that Special
Case No. 227 and G.R. Nos. 77300-01 could stand together and for another,
because of the compelling need to dispose of labor cases with utmost
dispatch.  We take this as his defense to
that show-cause Resolution. 
Parenthetically, we find
him mistaken for supposing that our Resolution is based on the simultaneous
commencement of Special Case No. 227 and G.R. Nos. 77300-01.  This is not the act that forced suspicions on
our part of efforts by the private respondents to “shop for a friendly
forum”.  Rather, it is the
institution of Special Case No. 227,
despite the pendency of the labor proceedings below,
that led us to those suspicions.  G.R.
Nos. 773007-01, on the other hand, were brought primarily on the question of
the exact amount SCIPSI is liable to pay.  It is on its face, a legitimate ground for certiorari, and for this reason
we accepted the parties’ compromise reached there, instead of dismissing it.

There is forum-shopping whenever, as a result of an adverse
opinion in one forum, a party seeks a favorable opinion (other than by appeal
or certiorari) in another.  The
principle applies not only with respect to suits filed in the courts but also
in connection with litigations commenced in the courts while an administrative proceeding is pending,
as in this case, in order to defeat administrative processes and in
anticipation of an unfavorable administrative ruling and a favorable court
ruling.  This is specially so, as in this
case, where the court in which the second suit was brought, has no
jurisdiction.

Accordingly, the respondent court must be held to be in error
assuming jurisdiction over Special Case No. 227.  It is well-established that the courts cannot
enjoin execution of judgment rendered by the National Labor Relations
Commission.^[9]

The respondent Lucio Velayo’s reliance upon National Mines and Allied Workers
Union v. Vera^[10]
is not well-taken.  In that case, the
properties involved belonged to third persons, a development that provided a
civil dimension to the labor case, and a development that gave the courts the
jurisdiction.  In the case at bar,
however, Velayo cannot be said to be a stranger to the proceedings for a
number of reasons.  First, and as pointed
out by the Solicitor General, and as the records will amply show, he, Velayo, was a party to the proceedings below where he took
part actively in defense of his case.  We
quote:

x        x          x

It is not true that Lucio Velayo was not a party in the labor cases.  The caption of the labor cases shows he was a
respondent.  The records of the labor
cases show that he participated in the proceedings therein, without raising the
issue that he was not a party nor the employer of the complainants.  Thus, the Motion for Reconsideration dated August 7, 1981 attached to the
Petition as Annex B was filed by both SCIPS and Lucio
Velayo.  SCIPS
and Velayo discussed the merits of the cases in said
motion and there was nary a mention of the allegation of Velayo
now that he was not a party in
the cases nor an employer of the complainants. 
Likewise, the Exception and/or Opposition to Report of Examiner dated
November 13, 1986, attached to the Petition as Annex F, was also filed by both
SCIPS and Velayo and, like the Motion for
Reconsideration aforementioned, it does not mention anything about Velayo not being a party and not being an employer of
complainants.^[11]

Certainly, he cannot now be heard to say that he was no party to
the controversy.

The fact that he was never mentioned in the pleadings before the
petitioner-labor arbiter is of no moment. 
The fact is that he himself had questioned the findings of the corporate
auditor (in G.R. Nos. 77300-01) and this is enough evidence that he admits
personal liability, although he does not agree with the amount supposedly due
from him.  His remonstrances
came too late in the day.

But other than estoppel, the law itself
stands as a formidable obstacle to Velayo’s
claims.  In A.C. Ransom Labor Union-CCLU
v. NLRC^[12]
we held that in case of corporations it is the president who responds
personally for violation of the labor pay laws. 
We quote:

Article 273 of the Code provides that:

“Any person violating
any of the provisions of Article 265 of this Code shall be punished by a fine
of not exceeding five hundred pesos and/or imprisonment for not less than one
(1) day nor more than six (6) months.”

(b)     How can the foregoing
provisions be implemented when the employer is a corporation? The answer is
found in Article 212(c) of the Labor Code which provides:

“(c)    Employer’
includes any person acting in the interest of an employer, directly or
indirectly.  The term shall not include
any labor organization or any of its officers or agents except when acting as
employer.”

The foregoing was culled
from Section 2 of RA 602, the Minimum Wage Law. 
Since RANSOM is an artificial person, it must have an
officer who can be presumed to be the employer, being the “person acting
in the interest of (the) employer” RANSOM. 
The corporation, only in the technical sense is the employer.

The responsible officer of
an employer corporation can be held personally, hot to say even criminally,
liable for non-payment of back wages. 
That is the policy of the law.  In
the Minimum Wage Law, Section 15(b) provided:

“(b)    If any violation
of this Act is committed by a corporation, trust, partnership or association,
the manager or in his default, the person acting as such when the violation
took place, shall be responsible.  In the
case of a government corporation, the managing head shall be made responsible,
except when shown that the violation was due to an act or commission of some
other person, over whom he has no control, in which case the latter shall be
held responsible.”

In PD 525, where a corporation fails to pay the emergency allowance
therein provided, the prescribed penalty “shall be imposed upon the guilty
officer or officers” of the corporation.

(c)     If the policy of the
law were otherwise, the corporation employer can have devious ways for evading
payment of back wages.  In the instant
case, it would appear that RANSOM, in 1969, foreseeing the possibility or
probabi­lity of payment of back wages to the 22 strikers, organized ROSARIO
to replace RANSOM, with the latter to be eventually phased out if the 22
strikers win their case.  RANSOM actually
ceased operations on May 1, 1973,
after the December 19, 1972
Decision of the Court of Industrial Relations was promulgated against RANSOM.

(d)     The record does not
clearly identify “the officer or officers” of RANSOM directly
responsible for failure to pay the back wages of the 22 strikers.  In the absence of definite proof in that
regard, we believe it should be presumed that the responsible officer is the
President of the corporation who can be deemed the chief operation officer
thereof.  Thus, in RA 602, criminal
responsibility is with the “Manager or in his default, the person acting as such.” In RANSOM, the President
appears to be the Manager.

(e)     considering that
non-payment of the back wages of
the 22 strikers has been a continuing situation, it is our opinion that the
personal liability of the RANSOM President at the time the back wages were
ordered to be paid should also be a continuing joint and several personal
liabilities of all who may have thereafter succeeded to the office of
president; otherwise, the 22 strikers may be deprived of their rights by the
election of a president without leviable assets.^[13]

Accordingly, Velayo cannot be excused
from payment of SCIPS’s liability by mere reason of SCIPSI’s separate corporate existence.  The theory of corporate entity, in the first
place, was not meant to promote unfair objectives or otherwise, to shield
them.  This Court has not hesitated in
penetrating the veil of corporate fiction when it would defeat the ends
envisaged by law,^[14]
not to mention the clear decree of the Labor Code.

And if Velayo truly had a valid
objection (to the levy on his properties), he could have raised it at the
earliest hour, and in the course of the labor proceedings themselves.  But, as we earlier indicated, he raised nary
a finger there, and he cannot raise it now, much less in a separate
proceeding.  He is not only estopped, litis pendencia is a bar to such a separate action.^[15]

While the instant case has been rendered moot and academic by
reason of the out-of-court settlement between the parties, that development
will not absolve Velayo and/or his counsel, Atty.
Oscar Dinopol^[16]
from charges of forum-shopping.  In Buan v. Lopez, Jr., supra, we declared
that forum-shopping is an act of malpractice that constitutes contempt of
court.

In this connection,
we reject Atty. Dinopol’s pretense that no identity
exists between Special Case No. 227 and the labor case that had precipitated
it.  The fact remains that in Special Case no. 227, he assails the execution
of the judgment of the National Labor Relations Commission, the same relief he
could have asked for in the very labor proceeding.  The fact that he likewise prayed for damages
therein will not alter the essence of the petition — to stay execution — and
in which the claim for damages is but
an incidental relief.

Clearly, both Velayo and Atty. Dinopol must account for forum-shopping.

WHEREFORE, judgment is rendered: (1) DISMISSING the
petition for having become moot and academic;
(2) ORDERING the respondent judge to dismiss Special Case No. 227; (3)
DECLARING the respondent, Lucio Velayo
and Atty. Oscar Dinopol IN CONTEMPT and ORDERING them
to pay a fine ofP1,000.00 each within five (5) days from notice; and (4)
SUSPENDING Atty. Oscar Dinopol, for a period of three
(3) months effective from notice, from the practice of law.  Let a copy of this Decision be entered in his
record.

THIS DECISION IS IMMEDIATELY EXECUTORY.

IT IS SO ORDERED.

Melencio-Herrera, (Chairman), Paras, Padilla, and Regalado, JJ., concur.

^[1]
See rollo, 10.

^[2]
South Cotabato Integrated Port Services, Inc. and/or Lucio Velayo v. Hon.
Antonio Villanueva, etc., et al., G.R. Nos. 77300-01.

^[3]
Rollo, id., 113.

^[4]
Id., 114.

^[5]
No. L-44230, November 19, 1984.
133 SCRA 259.

^[6]
The union was impleaded on December 11, 1987. The original petition named
the labor arbiter and the sheirff alone as
petitioners.

^[7]
G.R. Nos. 77300-01, rollo, 200.

^[8]
Rollo (this case), id., 287.

^[9]
Ambrosio v. Salvador,
No, L-47651, December 11, 1978,
87 SCRA 217; see also Associated Labor Unions (ALU-TUCP) v. Borromeo, G.R. No. 75736, September 29, 1988.

^[10]
Supra.

^[11]
Rollo, id., 281-282.

^[12]
No. L-69494, June 10, 1986,
142 SCRA 269.

^[13]
Supra, 273-275.

^[14]
Laguna Transportation Co., Inc. v. SSS, 107 Phil. 833 (1960).

^[15]
Buan v. Lopez, Jr., No. L-70513, October 13, 1986, 145 SCRA 34.

^[16]
It was Atty. Dinopol who filed the petition with the
respondent judge. See rollo, id.,
112-118.