Case Digest (G.R. No. 96795)
Facts:
Antonio M. Corral sought a resolution ordering immediate execution of a Court decision dated 11 May 1993 finding that he, a yardman of Pepsi-Cola Distributors of the Philippines, Inc. (PCD), had been illegally dismissed, and ordering PCD’s reinstatement of him without loss of seniority and payment of three (3) years backwages. PCD’s motion for reconsideration was denied with finality on 9 June 1993, judgment became final and executory on 1 July 1993, and a writ of execution was served on PCD on 7 March 1994 through its counsel, but no action followed.
A notice of garnishment was then served on PCD’s depository bank, PNB, Cubao Branch, Quezon City, yet the bank refused release of P134,162.71, claiming the account belonged to Pepsi-Cola Products Philippines, Inc. (PCPPI). After the Labor Arbiter ordered PCPPI to comply (relying on prior Pepsi-Cola cases) and PCPPI’s subsequent motions were denied, PCPPI obtained a temporary restraining order from the NLRC, and Corral filed the present omnibus petition after the restraining order allegedly expired, arguing that PCPPI as successor-in-interest must answer for PCD’s liabilities.
Issues:
- Whether PCPPI is liable for the obligations incurred by PCD under the 11 May 1993 decision.
- Whether PCPPI was afforded due process in the execution proceedings notwithstanding that it was not previously impleaded as a party-respondent.
- Whether the NLRC’s temporary restraining order impeded enforcement of the writ of execution despite having allegedly expired.
Ruling:
The Court granted the petition and remanded the case to the NLRC for execution of the 11 May 1993 decision, holding that PCPPI could not evade liability for PCD’s illegal dismissal obligations. It ruled that PCPPI’s defenses had already been rejected in materially similar Pepsi-Cola cases, and it considered the continued refusal to comply as an attempt to delay final justice.
On the due process contention, the Court held that PCPPI was heard on the successor-in-interest issue when counsel appeared and manifested consent to have the matter submitted for resolution during the relevant NLRC hearing. It further concluded that, with the temporary restraining order already having expired, there was no longer any legal impediment to enforcement.
Ratio:
The Court relied on its prior rulings in Pepsi-Cola Bottling Co. v. NLRC and Pepsi Cola Distributors of the Philippines, Inc. v. NLRC, where it had judicially settled that PCPPI, as successor-in-interest of PCD, is answerable for liabilities incurred by the predecessor for illegal dismissal cases filed while the predecessor still existed and continued business operations under the successor. It emphasized that the issue of successor liability had been previously resolved and could no longer be relitigated.
As to due process, the Court found that PCPPI effectively participated in the proceedings on whether it was the successor-in-interest, through the appearance and manifestation of counsel’s consent to submit the issue for resolution. Given that the temporary restraining order had already expired, the Court directed immediate execution to prevent further unjust delay.
Doctrine:
- A successor-in-interest may be held liable for the predecessor’s obligations when the successor continues the business and the complaint was filed while the predecessor was still in existence.
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