RAYMUNDO HIPOLITO, JR., IN HIS CAPACITY AS PRESIDENT AND CHIEF EXECUTIVE OF SAN MIGUEL CORPORATION EMPLOYEES UNION (SMCEU) AND RODOLFO DESTURA, UNION TREASURER, PETITIONERS, VS.…

Petitioners impugn the decision of the public respondent Bureau
of Labor Relations (BLR) in BLR Case No. A-10-354-87 (NCR-OD-M-5-421-87) which
affirms the order of the Med-Arbiter declaring as invalid the
disqualification/expulsion of private respondent from the union and modifies
the same order by requiring petitioners to return to the union the amount of
One Hundred Thirty Thousand Pesos (P130,000.00) previously paid by them to
Atty. Raymundo Hipolito III
as attorney’s fees.

Petitioners Hipolito and Destura were the then President and Treasurer,
respectively, of San Miguel Corporation Employees Union (SMCEU-PTGWO), a
legitimate labor organization composed of monthly salaried employees of San
Miguel Corporation.  Private respondent Borbon is employed as a Safety Engineer in the Magnolia
Division of the same corporation.

Two complaints, docketed as Case Nos. NCR-IRD-C-5-302-87 and
NCR-OD-M-5-421-87, were filed with the Med-Arbiter by
private respondent against petitioners in their capacity as union officers of
SMCEU?PTGWO.  Private respondent
alleged that the following illegal acts were committed by petitioner Hipolito, as hold-over president of the union:

1.  arbitrary, summary
and whimsical expulsion of complainant [private respondent] Borbon
from union membership without due process and in utter disregard of the
procedure provided in the union’s constitution and by-laws;

2.  illegal appointment
of Rodolfo Destura as union treasurer;

3.  violation of Article
242 (i), (j) and (k) of the Labor Code; (now Art.
241)

4.  unilateral appointment by respondent Hipolito, Jr. of his son, Atty. Raymundo
Hipolito III as union counsel without the benefit of
an
approved Resolution of the Board of Directors and illegal payment of P130,000
for legal fees; and

5.  failure of respondent Hipolito,
Jr. to reimburse legitimate expenses incurred by complainant prior to and
including CBA negotiation period up to April 30, 1987 [Rollo,
pp. 44-45.]

On September 18, 1987,
the Med-Arbiter Edgardo dela
Cruz rendered a resolution, the dispositive portion
of which reads:

Wherefore, premises considered, judgment is rendered as follows:

1.       Declaring the
disqualification and/or expulsion of complainant Daniel Borbon
II invalid and ordering his reinstatement as union member from receipt of this
resolution;

2.       Declaring respondent
Rodolfo Destura as the legally constituted Acting
Treasurer;

3.       Declaring Atty. Raymundo Hipolito III as not duly
appointed by the union’s Board of Directors but considers any amount paid as
legal, and for services rendered, by an attorney to his client;

4.       Denying the claim for
reimbursement of complainant for alleged expenses incurred for the union for
lack of sufficient evidence;

5.       Dismissing the claim
for the removal of respondents for lack of substantial and direct evidence.

The counterclaim for damages, moral and exemplary, fees in the
amounts of P500,000.00; P200,000.00 or P50,000.00
respectively are denied for lack of jurisdiction.

SO ORDERED.

[Resolution of the Med-Arbiter; Rollo, p. 11]

Private respondent appealed item numbers 2, 3, 4 and 5 of the dispositive portion of the resolution to the BLR, while
petitioners appealed item number 1.  On January 22, 1988, public respondent
BLR Director Pura Ferrer-Calleja
rendered a decision modifying the Med-Arbiter’s order as follows:

WHEREFORE, premises considered, the ORDER of the Med-Arbiter dated 18 September 1987 is modified to the
extent that respondents Raymundo Hipolito,
Jr. and Rodolfo Destura are hereby ordered to return
to the Union the amount of One Hundred Thirty Thousand
Pesos (P130,000.00) that they illegally paid to ATTY.
RAYMUNDO HIPOLITO III, as attorney’s or professional services fees.

SO ORDERED.

[Decision of the Director of Bureau of
Labor Relations, Annex “B” to the Petition; Rollo,
p. 11]

Hence, this petition.  Private respondent and the Solicitor General
filed their respective Comments. 
Petitioners thereafter filed their Reply.  The parties submitted their memoranda, after
which the case was deemed submitted.

For resolution by the court is whether or not public respondent
committed grave abuse of discretion in (1) holding that private respondent was
illegally dismissed from the union and (2) in ordering petitioners to return to
the union the amount of One Hundred Thirty Thousand Pesos (P130,000.00) which
they had previously paid to Atty. Hipolito.

With respect to private respondent’s removal from the union,
petitioners claim that private respondent is not a rank and file employee
because he holds the position of safety engineer and as such, exercises
supervisory functions in the corporation. 
Therefore, in accordance with the union’s rules which disallow the
membership of persons exercising supervisory powers [Article IV, Sections 2 and
9, par. B of the SMCEU constitution and by-laws; Annex “I” to the
Petition; Rollo, pp. 68, 73,] private respondent is
disqualified to be a union member.

The argument is devoid of merit. 
Public respondent’s declaration that private
respondent is a rank and file employee is supported by the evidence.  First, there is a certification signed by the
Assistant Vice-President and Personnel and Administrative Manager of San Miguel
Corporation, Magnolia Division [Annex “3” to the Comment; Rollo, p. 118] stating that private respondent occupies a
position that is non-supervisory. 
Second, private respondent’s status as a rank and file employee had been
recognized in two previous related petitions [G.R. Nos. 82183 and 80141]
decided by this Court.  Thus, the
decision in G.R. No. 80141 incorporated the resolution in G.R. No. 82183 dated
May 4, 1988 [Annex “5” to the Comment of Private Respondent; Rollo, p. 121] which in part, states: “that
petitioner’s petition to disqualify Daniel Borbon
from running for office in the union had already been resolved in BLR Case No.
1-354-87 (NCR OD-M-5-421-87) where Borbon was
declared a rank and file employee, hence, qualified to join, form or assist in
the formation of a labor organization.” [SMCEU-PTGWO v. Ferrer-Calleja, G.R. No. 80141, July 5,1989.]

Public respondent, therefore, did not commit grave abuse of
discretion when it affirmed the declaration of the Med-Arbiter that private
respondent was a rank and file employee and accordingly, his disqualification
and/or expulsion from the union was invalid.

We now resolve the issue of whether or not public respondent
committed grave abuse of discretion when it ordered petitioners to return to
the union the amount of P130,000.00 that they
previously paid to Atty. Hipolito.

In the complaint filed before the Med-Arbiter, the illegal acts
allegedly committed by petitioner Hipolito included
the unilateral appointment of Atty. Hipolito as union
counsel, and the payment to the latter of P130,000.00
as legal fees.  According to private
respondent, there was no resolution from the union’s board of directors either
appointing Atty. Hipolito as counsel or authorizing
the payment of attorney’s fees.  Under
the SMCEU constitution, it is the board of directors which has the power to
engage the services of a legal counsel and to fix his compensation [Section 2,
Article VI; Rollo, pp. 75-76.]

The Med-Arbiter found that the union’s board did not engage the
services of Atty. Hipolito as union counsel, but
ruled that the attorney’s fees collected, if any, should be considered as
payment for services rendered as a professional.

On appeal, public respondent BLR upheld the Med-Arbiter’s finding
that the appointment was made without board authority but declared that since
the appointment was ultra vires, it is
illegal, and therefore Atty. Hipolito is not entitled
to any legal fee.  As a consequence,
petitioners were ordered to return to the union the amount of P130,000.00 paid to Atty. Hipolito.

There is a need to clarify that Atty. Hipolito
is not asked to return to the union the money paid him.  He is not even a party to this case.  It is the petitioners who have been ordered
to pay back the union the amount of P130,000.00.  Ultimately, the order to return the money
rests on the premise that the payment by petitioners is a case of illegal
disbursement of union funds.

There is no question that there was no board resolution
appointing Atty. Hipolito as union counsel.  Petitioners, however, maintain that the
absence of a board resolution should not negate the fact that Atty. Hipolito had rendered service to the union for which he
deserved remuneration.

We sustain petitioners’ argument. 
The record establishes clearly that Atty. Hipolito
had acted as union counsel in the negotiation and consummation of the 1986
Collective Bargaining Agreement (CBA) entered into between the San Miguel
Corporation management and SMCEU-PTGWO [Rollo, pp.
149-150.] The same parties signed a Memorandum of Agreement which outlined the
terms as to wage increase, scope of bargaining unit, and effectivity
of the CBA [Rollo, p. 91.] These
documents, signed by the members of the board (including private respondent),
evidence two occasions where the members of the board clearly recognized the
representation of the union by Atty. Hipolito.

Thus, while it is true that Atty. Hipolito
was not appointed by the board, the facts of the case show that not only did
the board itself acknowledge and make use of the services of Atty. Hipolito, but that such services redounded to the benefit
of the union [Rollo, pp. 141- 148.] Taken together,
these circumstances, i.e., that notwithstanding the absence of an express
authority from the board, Atty. Hipolito represented
the union with the knowledge and acquiescence of the board, and the acceptance
of benefits arising from the service rendered, entitle Atty. Hipolito to the reasonable value of his professional
services on a quantum meruit basis.

In determining the amount of attorney’s fees on quantum meruit, the Court invariably takes into
account the amount and character of the services rendered, the labor, time and
trouble involved, the nature and importance of the activity in which the
services were rendered, the responsibility imposed, and the results secured
[Delgado v. De la Rama, 43 Phil. 419 (1922); Occena v. Marquez G.R. No. L-27396, September 30, 1974, 60 SCRA 38.]

In this case, We consider the following
facts which remain undisputed on the record: 
Atty. Hipolito served as union counsel in the
1986-1989 CBA.  In the process of
negotiations, Atty. Hipolito had to travel to
different negotiation places and offices [Rollo, p.
131.]  For nearly ten months prior to the
conclusion of the CBA, pickets were staged and a strike vote had to be taken [Rollo, p. 22, 131.] 
Upon its conclusion, the CBA extended to each covered employee benefits
ranging from a P2,500.00 salary increase across the
board to a P2,000.00 mid-year gratuity pay [Rollo,
pp. 141-148.]  In view of the foregoing,
the Court declares the amount of P130,000.00
previously paid to Atty. Hipolito to be reasonable
compensation for services rendered.

Thus, petitioners’ payment of P130,000.00
as legal fees in favor of Atty. Hipolito is deemed a
reasonable expenditure of union funds. 
Accordingly, petitioners need not return the said amount to the union.

WHEREFORE, the decision of the Director
of Bureau of Labor Relations in BLR Case No. A-10-354-87 (NCR-OD-M-5-­421-87)
is AFFIRMED insofar as it declares invalid the disqualification/expulsion of
private respondent from the union.  The
portion of the decision which orders petitioners to return to the union the
amount of One Hundred Thirty Thousand Pesos (P130,000.00)
that they paid to Atty. Raymundo Hipolito
III as attorney’s or professional services fees is hereby SET ASIDE.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr.,
Feliciano, and Bidin,
JJ., concur.