Case Digest (G.R. No. L-16619)
Facts:
This case revolves around a petition for review on certiorari filed by a collective group of petitioners, including Eduardo Gilbert Dinoyo and others (referred to as Dinoyo et al.), against several respondents, including Undaloc Construction Company, Inc and its corporate officers, Spouses Cirilo and Gina Undaloc. The events leading to this petition originate from an illegal dismissal complaint filed by the petitioners on November 16, 2011, culminating in a favorable judgment in their favor by a Labor Arbiter who awarded them nearly P3.7 million in back wages and damages. The respondent, Undaloc Inc., subsequently appealed this decision to the National Labor Relations Commission (NLRC), ordering the submission of a partial cash bond, which was filed beyond the 10-day regulatory period and included several irregularities. Despite this, the NLRC accepted the bond, reversed the Labor Arbiter's decision, determining that no constructive dismissal or abandonment occurred. PetitionersCase Digest (G.R. No. L-16619)
Facts:
- Parties and Initial Complaint
- Petitioners: Eduardo Dinoyo, Rodelio Nengasca, Agapito Arcillas, Leonardo F. Campomayor, Jr., Eduardo Merafuentes, Rogelio G. Oyon-Oyon, Marcelino Rafols, Eunolie Sabejon, Benito Sedantes, Teofilo Basalo, Noel Calinada, Romeo De la Cruz, Eduardo Rebusto, Cesario Desoacedo, Benedicto Talaid, Esmeraldo Monterola, Heracleo Requinto, Dionisio Sabayton, Agapito Pucot, Kenneth Dinoyo, Ben Doroy, Wedjoseph Escuzar, Wilmar Acabo, Allan Tecson, Leonilo Lanojan, Efryn Ochavillo, and the heirs of the late Avelino Dinoyo (represented by Kenneth Dinoyo).
- Respondents:
- Undaloc Construction Company, Inc.
- Cigin Construction & Development Corporation
- Spouses Cirilo and Gina Undaloc.
- Rulings in the Labor Case and NLRC Proceedings
- The petitioners initially filed complaints for illegal dismissal and were awarded a total of P3,693,474.68 in backwages, money claims, moral and exemplary damages, and attorney’s fees.
- Undaloc Inc. filed an appeal with the National Labor Relations Commission (NLRC) and, in the process, posted a partial cash bond (P300,000.00) after the reglementary period.
- A supersedeas bond was later filed by Undaloc Inc., which was marred by several technical irregularities:
- The counsel did not sign the Joint Affidavit of genuineness.
- The bond’s effective period was misstated (up to May 3, 2013, instead of lasting until finality).
- There was no proof of security deposit or collateral.
- No certificate of accreditation from the Supreme Court accompanied the bond.
- The NLRC accepted the supersedeas bond despite the discrepancies and reversed the Labor Arbiter’s decision.
- In its Decision dated July 31, 2012, the NLRC:
- Set aside the prior Labor Arbiter decisions.
- Ordered the reinstatement of most complainants without backwages (except for those who had resigned voluntarily and executed quitclaims).
- Court of Appeals (CA) Developments
- Petitioners elevated the NLRC decision to the CA through CA-G.R. SP No. 07306.
- While CA proceedings were pending, Undaloc Inc. ceased operations and Cigin Construction & Development Corporation was established.
- On September 4, 2015, the CA reinstated the Labor Arbiter’s decision, ruling that:
- The petitioners were constructively dismissed.
- The resignations and executed quitclaims of certain complainants could not be deemed voluntary.
- Malice or bad faith on the part of Cirilo Undaloc was not sufficiently proven to justify holding him solidarily liable with the corporation.
- Subsequent motions:
- Petitioners filed a Motion for Reconsideration, with a subsequent motion to join Cigin Corp. and spouses Cirilo and Gina Undaloc as additional respondents.
- The CA denied the motion and supplemental filings on the ground that non-impleaded parties could not be held liable without due process.
- Labor Arbiter and Execution Proceedings
- On July 6, 2017, the Labor Arbiter issued an Order modifying the execution of the judgment:
- Declared additional respondents—Cirilo Undaloc, Gina Undaloc, and Cigin Corp.—jointly and severally liable with Undaloc Inc.
- Cited evidence of corporate evasion, including the transfer of vehicles registered in the name of Undaloc Inc. to Cigin Corp.
- Observed that both Undaloc Inc. and Cigin Corp. were family corporations with the spouses Undaloc as the controlling officers.
- Additional fact findings:
- Undaloc Inc. had ceased operations without filing for bankruptcy.
- Asset investigations revealed that Undaloc Inc. held a trivial amount (P3,366.52) in its bank account.
- There was a history of transferring business assets (e.g., vehicles) possibly to evade remedial obligations.
- Subsequent Developments and Relief Petitions
- Following the Labor Arbiter’s Order, Undaloc Inc. filed a Verified Petition for a Temporary Restraining Order (TRO) on July 17, 2017, though only Undaloc Inc. was initially impleaded.
- The NLRC, on July 24, 2017, issued a TRO to enjoin further execution of the Labor Arbiter’s Order, also directing immediate filing of case records.
- On May 11, 2018, the CA rendered a Decision setting aside the July 6, 2017 Labor Arbiter Order, citing:
- The modification as a void attempt to alter the final and executory decision previously rendered in CA-G.R. SP No. 07306.
- Observations that the cessation of Undaloc Inc. (occurring in 2012) was not a supervening event warranting a modification.
- Petitioners later filed arguments challenging this line of reasoning, contending that measures were necessary to secure the collection of the judgment award.
- Arguments of the Parties
- Petitioners’ Arguments:
- Asserted that the inclusion of Cigin Corp. and the spouses Undaloc as solidarily liable, when executed during the judgment collection stage, was proper even after a final decision.
- Maintained that the asset transfers and corporate restructuring were designed to frustrate execution of the judgment award.
- Respondents’ Arguments:
- Alleged that petitioners were engaging in forum shopping by pursuing remedies already decided upon in CA-G.R. SP No. 07306.
- Maintained that the issues of corporate veil piercing had already been settled and were not subject to re-litigation.
- Emphasized that the cessation of Undaloc Inc. did not constitute a supervening event justifying the subsequent modification.
Issues:
- Forum Shopping
- Whether the petitioners (Dinoyo, et al.) are guilty of forum shopping by seeking a Motion to Hold All Respondents Solidarily Liable during the execution stage despite the already final and executory CA decision in CA-G.R. SP No. 07306.
- Modification of Final Judgment and Piercing the Corporate Veil
- Whether the Labor Arbiter validly modified the final and executory judgment of the CA to pierce the corporate veil of Undaloc Inc. and Cigin Corp., thereby holding the additional respondents (Cirilo and Gina Undaloc, and Cigin Corp.) solidarily liable for the monetary award.
- Whether the evidentiary basis—such as asset transfers, corporate restructuring, and observed bad faith—sufficiently justifies such a modification even after judgment finality.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)