Title
Calderon Sr. vs. Court of Appeals
Case
G.R. No. L-52235
Decision Date
Oct 28, 1980
A dispute over unpaid salaries, allowances, and damages, deemed a civil case due to allegations of fraud and oppression, not a labor issue.
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Case Digest (G.R. No. L-52235)

Facts:

Background of the Case

  • Private respondent, Atty. Antonio C. Amor, served as the Executive Vice President of Luzon Brokerage Corporation (LBC) from October 1971 to November 1, 1976. He received regular salaries, allowances, reimbursable expenses, and annual bonuses during this period.
  • On November 2, 1976, petitioner Jose D. Calderon, Sr. acquired full ownership of LBC and its sister companies. Private respondent claims that Calderon, Sr. induced him to remain as Executive Vice President with the same compensation and benefits, including the promise to assign him 1,200 LBC shares of stock.
  • Private respondent continued in his role until his resignation on December 31, 1977, triggered by his inclusion as a defendant in Civil Case No. Q-24052, which made his position untenable.
  • After his resignation, private respondent demanded payment of unpaid salaries, allowances, and bonuses from May 1977 to December 31, 1977, but petitioners refused to pay.

Filing of the Complaint

  • On March 3, 1978, private respondent filed a Complaint (Civil Case No. 28845) with a prayer for Preliminary Attachment before the Court of First Instance of Rizal, Branch XXI. He alleged that petitioners "wilfully and deliberately violated his legal rights by fraudulently withholding, refusing, and failing to pay his valid claims," causing him moral, actual, and other damages.
  • He sought payment of P229,355.38 for unpaid salaries, allowances, and reimbursable expenses, as well as moral damages totaling P1.7 million, bringing the total claim to "at least P2 million."
  • Additionally, private respondent demanded the assignment of 1,200 LBC shares as promised by Calderon, Sr.

Motion to Dismiss

  • Petitioners moved to dismiss the Complaint, arguing that the trial court lacked jurisdiction because the claims arose from employer-employee relations, which fall under the exclusive jurisdiction of the Labor Arbiter under Presidential Decree No. 442 (the Labor Code).
  • The trial court, presided by Judge Gregorio C. Pineda, denied the motion, holding that the employer-employee relationship no longer existed between the parties.

Certiorari Proceedings

  • On May 11, 1978, petitioners filed a Certiorari petition with the Court of Appeals (CA-G.R. No. SP-07858) challenging the trial court's denial of their Motion to Dismiss.
  • On May 1, 1978, Presidential Decree No. 1367 amended the Labor Code, removing the Labor Arbiter's jurisdiction over claims for moral or other forms of damages.
  • On July 6, 1978, LBC withdrew as a co-petitioner in the Certiorari case, leaving Calderon, Sr., Jose F. Calderon, Belen F. Calderon, Alejandro F. Dizon, and Artimon R. Ala as the remaining petitioners.
  • On July 31, 1979, the Court of Appeals dismissed the Certiorari petition, upholding the trial court's jurisdiction based on the curative and retrospective nature of PD No. 1367, as interpreted in Garcia vs. Martinez.
  • The Appellate Court also denied petitioners' Motion for Reconsideration on December 6, 1979.

Petition for Review

  • Petitioners filed a Petition for Review on Certiorari before the Supreme Court, challenging the Court of Appeals' decision. The Supreme Court issued a Restraining Order on February 25, 1980, halting the trial court proceedings.

Issue:

  1. Whether the regular courts or the Labor Arbiters of the National Labor Relations Commission (NLRC) have exclusive jurisdiction over the case involving claims for unpaid salaries, allowances, reimbursable expenses, and damages.
  2. Whether the withdrawal of LBC from the Certiorari proceedings rendered the issue of jurisdiction moot.

Ruling:

The Supreme Court denied the Petition for Certiorari and upheld the decision of the Court of Appeals. The Court ruled that:

  1. The case is intrinsically a civil dispute, not a labor controversy, because the claims for unpaid salaries, allowances, and reimbursable expenses are intertwined with allegations of fraudulent and oppressive conduct, which fall under civil law.
  2. The withdrawal of LBC from the proceedings did not affect the jurisdiction of the trial court, as the case primarily involves a civil dispute rather than an employer-employee relationship.
  3. The amendatory provisions of PD No. 1367, which removed the Labor Arbiter's jurisdiction over claims for moral and other forms of damages, are curative and retrospective in nature, thereby curing the trial court's lack of jurisdiction at the time the claim was filed.

Ratio:

  1. Jurisdiction Over Civil vs. Labor Disputes: The Court emphasized that the existence of an employer-employee relationship alone does not determine jurisdiction. The case involves a civil dispute because the claims for unpaid salaries and allowances are tied to allegations of fraudulent and oppressive conduct, which are governed by civil law (Articles 1701 and 21 of the Civil Code).
  2. Nature of Claims: The claims for unpaid salaries and allowances are in the nature of actual or compensatory damages arising from a breach of obligation, while the moral damages stem from the alleged oppressive and fraudulent refusal to pay. These issues are beyond the jurisdiction of Labor Arbiters.
  3. Curative and Retrospective Effect of PD No. 1367: The amendment introduced by PD No. 1367, which removed the Labor Arbiter's jurisdiction over claims for moral and other forms of damages, is curative and applies retrospectively. This amendment resolved the conflict of jurisdiction between regular courts and labor agencies.
  4. Withdrawal of LBC: The withdrawal of LBC from the proceedings did not affect the jurisdiction of the trial court, as the case primarily involves a civil dispute and not an employer-employee relationship.

Conclusion:

The Supreme Court upheld the jurisdiction of the regular courts over the case, ruling that the claims for unpaid salaries, allowances, and damages are civil in nature and not within the exclusive jurisdiction of the Labor Arbiters. The Court also affirmed the curative and retrospective effect of PD No. 1367, which clarified the jurisdictional boundaries between regular courts and labor agencies.


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