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RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.185160July24,2013

POLYMERRUBBERCORPORATIONandJOSEPHANG,Petitioners,
vs.
BAYOLOSALAMUDING,Respondent.

DECISION

REYES,J.:

Theinstantpetition1assailstheDecision2datedJune30,2008oftheCourtofAppeals(CA)inCAG.R.SPNo.
98387directingtherecallofthealiaswritofexecutionandtheliftingofthenoticeoflevyonthesharesofstocks
ofpetitionerJosephAng(Ang).TheResolution3datedNovember5,2008deniedthemotionforreconsideration
thereof.

Theantecedentfactsareasfollows:

Herein respondent Bayolo Salamuding (Salamuding), Mariano Gulanan and Rodolfo Raif (referred to as the
complainants) were employees of petitioner Polymer Rubber Corporation (Polymer), who were dismissed after
allegedlycommittingcertainirregularitiesagainstPolymer.

On July 24, 1990, the three employees filed a complaint against Polymer and Ang (petitioners) for unfair labor
practice,illegaldismissal,nonpaymentofovertimeservices,violationofPresidentialDecreeNo.851,withprayer
forreinstatementandpaymentofbackwages,attorneysfees,moralandexemplarydamages.4

OnNovember21,1990,theLaborArbiter(LA)renderedadecision,thedispositiveportionofwhichreads:

WHEREFORE, judgment is hereby rendered dismissing the complainant unfair labor practice (sic) but directing
therespondentthefollowing:

1. Reinstate complainants to their former position with full back wages from the time they were illegally
dismisseduptothetimeofreinstatement.

2.Topayindividualcomplainantstheir13thmonthpayandfortheyear1990inthefollowingamount:

a.MarianoGulanan..P3,194

b.RodolfoRaif.P3,439

c.BayoloSalamudingP3,284

3.TopayindividualcomplainantsovertimeintheamountofP1,335each.

4.TopayindividualcomplainantsovertimeintheamountofP6,608.80each.

5.TopayindividualcomplainantsmoralandexemplarydamagesintheamountofP10,000each.

6.Topayattorneysfeeequivalenttoten(10)percentofthetotalmonetaryawardofthecomplainants.

SOORDERED.5

AwritofexecutionwassubsequentlyissuedonApril18,1991toimplementtheaforesaidjudgment.6

ThepetitionersappealedtotheNationalLaborRelationsCommission(NLRC).
On April 7, 1992, the NLRC affirmed the decision of the LA with modifications. The NLRC deleted the award of
moral and exemplary damages, service incentive pay, and modified the computation of 13th month pay.7 The
correspondingEntryofJudgmentwasmadeonSeptember25,1992,8andanaliaswritofexecutionwasissued
onOctober29,1992,basedontheNLRCdecision.9

ThecasewassubsequentlyelevatedtotheSupremeCourt(SC)onapetitionforcertiorari.InaResolutiondated
September29,1993,theCourtaffirmedthedispositionoftheNLRCwiththefurthermodificationthattheawardof
overtimepaytothecomplainantswasdeleted.10

OnSeptember30,1993,Polymerceaseditsoperations.11

UponamotiondatedNovember11,1994,theLAaquoissuedawritofexecutiononNovember16,1994based
on the SC resolution. Since the writ of execution was returned unsatisfied, another alias writ of execution was
issuedonJune4,1997.12

Inthelatterpartof2004,Polymerwithallitsimprovementsinthepremiseswasguttedbyfire.13

OnDecember2,2004,thecomplainantsfiledaMotionforRecomputationandIssuanceofFifth(5th)AliasWritof
Execution. The Research and Computation Unit of the NLRC came up with the total amount of P2,962,737.65.
Due to the failure of the petitioners to comment/oppose the amount despite notice, the LA approved said
amount.14

Thus,onApril26,2005,theLAissueda5thAliasWritofExecution15prayedforcommandingthesherifftocollect
theamount.

In the implementation of this alias writ of execution dated April 26, 2005, the shares of stocks of Ang at USA
ResourcesCorporationwerelevied.

On November 10, 2005, the petitioners moved to quash the 5th alias writ of execution, and to lift the notice of
garnishment.16Theyallegedthat:a)AngshouldnotbeheldjointlyandseverallyliablewithPolymersinceitwas
onlythelatterwhichwasheldliableinthedecisionoftheLA,NLRCandtheSupremeCourtb)thecomputation
ofthemonetaryawardinfavorofthecomplainantsintheamountofP2,962,737.65wasmisleading,anomalous
andhighlyerroneousandc)thedecisionsoughttobeenforcedbymeremotionisalreadybarredbythestatute
oflimitations.17

InanOrder18datedDecember16,2005,theLAgrantedthemotion.TheLAorderedthequashalandrecallof
thewritofexecution,aswellastheliftingofthenoticeoflevyonAngssharesofstocks.

TheLAruledthattheDecisiondatedNovember21,1990didnotcontainanypronouncementthatAngwasalso
liable.ToholdAngliableatthisstagewhenthedecisionhadlongbecomefinalandexecutorywillvarythetenor
ofthejudgment,orinexcessofitsterms.Astotheextentofthecomputationofthebackwages,thesamemust
only cover the period during which the company was in actual operation. Further, the LA found that the
complainantsmotiontoexecutetheLAsdecisionwasalreadybarredbythestatuteoflimitations.Thefalloofthe
decisionreads:

WHEREFORE,premisesallconsidered,anorderisherebyrenderedquashingandrecallingtheWritofExecution
andliftingtheNoticeofLevyontheSharesofStocksofrespondentJosephAng.19

On appeal, the NLRC affirmed the findings of the LA in a Decision20 dated September 27, 2006. It, however,
made a pronouncement that the complainants did not sleep on their rights as they continued to file series of
motions for the execution of the monetary award and are, thus, not barred by the statute of limitations. The
appeal on the aspect of the lifting of the notice of levy on the shares of stocks of Ang was dismissed. The
dispositiveportionofthedecisionreadsasfollows:

WHEREFORE,theassailedOrderdatedDecember16,2005isherebyAFFIRMEDwithMODIFICATIONdeclaring
therightsofthecomplainantstoexecutetheDecisiondatedNovember21,1990nothavingbarredbythestatute
oflimitations.Theappealishereby,DISMISSEDforlackofmerit.21

OnJanuary12,2007,theNLRCdeniedthemotionforreconsiderationoftheforegoingdecision.22

Undeterred,SalamudingfiledaPetitionforCertiorari23beforetheCA.

On June 30, 2008, the CA found merit with the petition.24 The CA stated that there has to be a responsible
personorpersonsworkingintheinterestofPolymerwhomayalsobeconsideredastheemployer,invokingthe
casesofNYKIntl.KnitwearCorp.Phils.v.NLRC25andA.C.RansomLaborUnionCCLUv.NLRC.26SinceAng
as the director of Polymer was considered the highest ranking officer of Polymer, he was therefore properly
impleadedandmaybeheldjointlyandseverallyliablefortheobligationsofPolymertoitsdismissedemployees.
Thus,thedispositiveportionoftheassaileddecisionreadsasfollows:

WHEREFORE,thepetitionisgrantedinpart.TheDecisiondatedSeptember27,2006andtheResolutiondated
January 12, 2007 of respondent NLRC are hereby annulled and set aside insofar as they direct the recall and
quashaloftheWritofExecutionandliftingoftheNoticeofLevyonthesharesofstockofrespondentJosephAng.
TheOrderdatedDecember16,2005oftheHonorableLaborArbiterRamonValentinC.Reyesisnullified.

LettherecordsofthecaseberemandedtotheLaborArbiterforexecutionoftheDecisiondatedNovember21,
1990asmodifiedbytheNLRCagainsttherespondentsPolymerRubberCorporationandJosephAng.27

AggrievedbytheCAdecision,thepetitionersfiledtheinstantpetitionraisingthefollowingquestionsoflaw:

a.ThatuponthefinalityoftheDecision,thesamecannolongerbealteredormodified

b.ThattheOfficeroftheCorporationcannotbepersonallyheldliableandbemadetopaytheliabilityofthe
corporation

c.Thatthelosingpartycannotbeheldliabletopaythesalariesandbenefitsoftheemployeesbeyondthe
companies[sic]existence

d.Thattheseparationpayofemployeesofthecompanywhichhascloseditsbusinesspermanentlyisonly
halfmonthsalaryforeveryyearofservice.28

Thereismeritinthepetition.

"A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations
incurredasaresultofthedirectorsandofficersactsascorporateagents,arenottheirpersonalliabilitybutthe
directresponsibilityofthecorporationtheyrepresent.Asarule,theyareonlysolidarilyliablewiththecorporation
fortheillegalterminationofservicesofemployeesiftheyactedwithmaliceorbadfaith."29

Toholdadirectororofficerpersonallyliableforcorporateobligations,tworequisitesmustconcur:(1)itmustbe
allegedinthecomplaintthatthedirectororofficerassentedtopatentlyunlawfulactsofthecorporationorthatthe
officerwasguiltyofgrossnegligenceorbadfaithand(2)theremustbeproofthattheofficeractedinbadfaith.30

Intheinstantcase,theCAimputedbadfaithonthepartofthepetitionerswhenPolymerceaseditsoperations
thedayafterthepromulgationoftheSCresolutionin1993whichwasallegedlymeanttoevadeliability.TheCA
found it necessary to pierce the corporate fiction and pointed at Ang as the responsible person to pay for
Salamudings money claims. Except for this assertion, there is nothing in the records that show that Ang was
responsible for the acts complained of. At any rate, we find that it will require a great stretch of imagination to
conclude that a corporation would cease its operations if only to evade the payment of the adjudged monetary
awardsinfavorofthree(3)ofitsemployees.

ThedispositiveportionoftheLADecisiondatedNovember21,1990whichSalamudingattemptstoenforcedoes
notmentionthatAngisjointlyandseverallyliablewithPolymer.AngismerelyoneoftheincorporatorsofPolymer
and to single him out and require him to personally answer for the liabilities of Polymer is without basis. In the
absenceofafindingthatheactedwithmaliceorbadfaith,itwaserrorfortheCAtoholdhimresponsible.

InAlilingv.Feliciano,31theCourtexplainedtowit:

TheCAheldthepresidentofWWWEC,JoseB.Feliciano,SanMateoandLariosajointlyandseverallyliablefor
themonetaryawardsofAlilingonthegroundthattheofficersareconsidered"employers"actingintheinterestof
the corporation. The CA cited NYK International Knitwear Corporation Philippines (NYK) v. National Labor
RelationsCommissioninsupportofitsargument.Notably,NYKinturncitedA.C.RansomLaborUnionCCLUv.
NLRC.

SuchrulinghasbeenreversedbytheCourtinAlbav.Yupangco,wheretheCourtruled:

"By Order of September 5, 2007, the Labor Arbiter denied respondents motion to quash the 3rd alias writ.
Brushingasiderespondentscontentionthathisliabilityismerelyjoint,theLaborArbiterruled:

Suchissueregardingthepersonalliabilityoftheofficersofacorporationforthepaymentofwagesandmoney
claims to its employees, as in the instant case, has long been resolved by the Supreme Court in a long list of
cases[A.C.RansomLaborUnionCLUvs.NLRC(142SCRA269)andreiteratedinthecasesofChuavs.NLRC
(182 SCRA 353), Gudez vs. NLRC (183 SCRA 644)]. In the aforementioned cases, the Supreme Court has
expressly held that the irresponsible officer of the corporation (e.g., President) is liable for the corporations
obligationstoitsworkers.Thus,respondentYupangco,beingthepresidentoftherespondentYLLandandUltra
Motors Corp., is properly jointly and severally liable with the defendantcorporations for the labor claims of
ComplainantsAlbaandDeGuzman.xxx

xxxx

Asreflectedabove,theLaborArbiterheldthatrespondentsliabilityissolidary.

Thereissolidaryliabilitywhentheobligationexpresslysostates,whenthelawsoprovides,orwhenthenatureof
the obligation so requires. MAM Realty Development Corporation v. NLRC, on solidary liability of corporate
officersinlabordisputes,enlightens:

xxxAcorporationbeingajuridicalentity,mayactonlythroughitsdirectors,officersandemployees. Obligations
1 w p h i1

incurredbythem,actingassuchcorporateagentsarenottheirsbutthedirectaccountabilitiesofthecorporation
theyrepresent.Truesolidaryliabilitiesmayattimesbeincurredbutonlywhenexceptionalcircumstanceswarrant
suchas,generally,inthefollowingcases:

1.Whendirectorsandtrusteesor,inappropriatecases,theofficersofacorporation:

(a)votefororassenttopatentlyunlawfulactsofthecorporation

(b)actinbadfaithorwithgrossnegligenceindirectingthecorporateaffairs

xxxx

In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the
corporationfortheterminationofemploymentofemployeesdonewithmaliceorinbadfaith."32(Citationsomitted
andunderscoringours)

ToholdAngpersonallyliableatthisstageisquiteunfair.ThejudgmentoftheLA,asaffirmedbytheNLRCand
laterbytheSChadalreadylongbecomefinalandexecutory.Ithasbeenheldthatafinalandexecutoryjudgment
can no longer be altered. The judgment may no longer be modified in any respect, even if the modification is
meanttocorrectwhatisperceivedtobeanerroneousconclusionoffactorlaw,andregardlessofwhetherthe
modificationisattemptedtobemadebythecourtrenderingitorbythehighestCourtoftheland.33 "Since the
aliaswritofexecutiondidnotconform,isdifferentfromandthuswentbeyondorvariedthetenorofthejudgment
which gave it life, it is a nullity. To maintain otherwise would be to ignore the constitutional provision against
deprivingapersonofhispropertywithoutdueprocessoflaw."34

Anent the computation of their liability for the payment of separation pay in lieu of reinstatement in favor of
Salamuding, the Court agrees with the ruling of the LA that it must be computed only up to the time Polymer
ceased operations in September 1993. The computation must be based on the number of days when Polymer
was in actual operation.35 It cannot be held liable to pay separation pay beyond such closure of business
becauseeveniftheillegallydismissedemployeeswouldbereinstated,theycouldnotpossiblyworkbeyondthe
timeofthecessationofitsoperation.36InthecaseofChronicleSecuritiesCorp.v.NLRC,37weruledthateven
anemployerwhois"foundguiltyofunfairlaborpracticeindismissinghisemployeemaynotbeorderedsotopay
backwagesbeyondthedateofclosureofbusinesswheresuchclosurewasduetolegitimatebusinessreasons
andnotmerelyanattempttodefeattheorderofreinstatement."38

WHEREFORE,thepetitionisGRANTED.TheDecisiondatedJune30,2008andtheResolutiondatedNovember
5, 2008 of the Court of Appeals in CAG.R. SP No. 98387 are SET ASIDE. The Decision of the National Labor
RelationsCommissiondatedSeptember27,2006isREINSTATED.Lettherecordsofthecaseberemandedto
theLaborArbiterforpropercomputationoftheawardinaccordancewiththisdecision.

SOORDERED.

BIENVENIDOL.REYES
AssociateJustice

WECONCUR:

MARIALOURDESP.A.SERENO
ChiefJustice
Chairperson

TERESITAJ.LEONARDODECASTRO LUCASP.BERSAMIN
AssociateJustice AssociateJustice
MARTINS.VILLARAMA,JR.
AssociateJustice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had
beenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourt'sDivision.

MARIALOURDESP.A.SERENO
ChiefJustice

Footnotes

1Rollo,pp.316.

2 Penned by Associate Justice Sixto C. Marella, Jr., with Associate Justices Edgardo F. Sundiam and
MoninaArevaloZenarosa,concurringid.at1731.

3Id.at3334.

4Id.at18.

5Id.at1819.

6Id.at19.

7Id.at1920.

8CArollo,p.28.

9Rollo,p.20.

10CArollo,p.29.

11Rollo,p.26.

12CArollo,pp.2930.

13Rollo,p.28.

14CArollo,pp.4850.

15Id.

16Id.at5155.

17Id.

18Id.at4047.

19Id.at47.

20Id.at2636.

21Id.at35.

22Id.at3739.

23Id.at224.

24Rollo,pp.1731.
25445Phil.654(2003).

26226Phil.199(1986).

27Rollo,pp.3031.

28Id.at10.

29 Peaflor v. Outdoor Clothing Manufacturing Corporation, G.R. No. 177114, April 13, 2010, 618 SCRA
208,216.

30Franciscov.Mallen,Jr.,G.R.No.173169,September22,2010,631SCRA118,123124.

31G.R.No.185829,April25,2012,671SCRA186.

32Id.at218219.

33ManningInternationalCorp.v.NLRC,G.R.No.83018,March13,1991,195SCRA155,161.

34Albav.Yupangco,G.R.No.188233,June29,2010,622SCRA503,509,citingB.E.SanDiego,Inc.v.
Alzul,G.R.No.169501,June8,2007,524SCRA402,433andCabangv.Basay,G.R.No.180587,March
20,2009,582SCRA172.

35DurabuiltRecappingPlant&Co.v.NLRC,236Phil.351,358(1987).

36J.A.T.GeneralServicesv.NLRC,465Phil.785,798799(2004).

37486Phil.560(2004).

38Id.at572,citingPizzaInn/ConsolidatedFoodsCorporationv.NLRC,G.R.No.L74531,June28,1988,
162SCRA773,778.

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