G.R. No. 240810 - Paje vs. Spic N' Span Service Corp.

Petitioners: Gloria Paje, Lolita Gomez, Miriam Catacutan, Estrella Zapata, Gloria Sumang, Juanita Julieta Dingal, Myra Amante, and Fe S. Bernardo; employed as merchandisers for Swift Foods, Inc. (Swift) and hired through Spic N' Span Service Corporation (Spic N' Span).
Respondent: Spic N' Span, a domestic company engaged in supplying human resource services, also acting as the labor-only contractor in the case.
Initial complaint was filed on March 13, 1998, for illegal dismissal with money claims against both Swift and Spic N' Span.
The labor arbiter dismissed the complaint of petitioners but held Swift and Spic N' Span jointly and severally liable for the money claims of other co-complainants.
Subsequent appeals were filed with the National Labor Relations Commission (NLRC) and later with the Court of Appeals.

The NLRC resolved that Spic N' Span was the true employer and dismissed the complaint against Swift, awarding backwages only to some co-complainants, while sustaining the dismissal of petitioners’ complaint.
Petitioners filed a Motion for Reconsideration with the NLRC, which was denied.
The Court of Appeals reversed the NLRC decision by setting aside the dismissal of petitioners’ complaint and remanding the case to compute the money claims (backwages, separation pay, and service incentive leave pay) while leaving unaffected the settlement of claims for the co-complainants Edelisa David and Inocencio Fernandez.
Both Spic N' Span and Swift filed respective petitions for review, with Swift’s petition being denied for being defective.

On September 18, 2008, Swift paid petitioners P3,588,785.30, which was exactly half of the total computed amount due (P7,177,570.60) as determined by the fiscal examiner.
Concurrent with this partial payment, petitioners executed a Quitclaim and Release indicating full and complete settlement of any claims related to unpaid wages, separation pay, overtime pay, and other claims incident to their past employment.
The document explicitly stated that the release was in favor of Swift Foods Corp./Swift Foods, Inc. and made no reference to respondent Spic N’ Span.
After finalizing earlier proceedings, petitioners filed a Motion for the Issuance of a Writ of Execution for the remaining balance from Spic N' Span.
The labor arbiter issued a Partial Writ of Execution to collect P3,858,785.30 from Spic N’ Span (which includes nominal damages), but Spic N’ Span moved to quash this writ, arguing that the executed quitclaim, being in favor of Swift, released them from liability.
Both the labor arbiter and the NLRC denied petitioners’ claims with respect to respondent, as earlier decisions upheld the interpretation that the quitclaim discharged liabilities to the benefit of the employer under the concept of solidary liability and agency.

Petitioners contended that the quitclaim was meant to release only Swift, asserting that they accepted the partial payment with the understanding that the balance would be the responsibility of Spic N’ Span, given the solidary nature of the obligations.
They further argued that the Quitclaim and Release was unconscionable in relation to the total claim, being only half of the total amount due, and that they were unassisted by counsel when signing the document.
Respondent argued that the language of the quitclaim – discharging “Swift … from any and all claims” – should be given its plain meaning, and since solidary liability applies, the release extended to Spic N’ Span as well because they acted as Swift’s agent.
Respondent further contended that various prior decisions of the labor tribunals and the Court of Appeals had already supported the interpretation that the quitclaim operated to release both parties from further liability.

Whether the quitclaim and release executed by the petitioners, which explicitly released Swift in full settlement of their claims, should also be interpreted to discharge respondent Spic N’ Span from its liability.

Does the express language of the quitclaim, which omits any reference to Spic N’ Span, support a construction that limits its effect solely to Swift?
Can the principle of solidary liability be invoked to extend the effect of the release to cover Spic N’ Span, even though only half of the total judgment award was paid and the quitclaim was executed without legal assistance?