CARMEN B. DY-DUMALASA VS DOMINGO SABADO S. FERNANDEZ

CARMEN B. DY-DUMALASA

VS

DOMINGO SABADO S. FERNANDEZ
593 SCRA 656, (2009)

Procedural rules governing service of summons, in quasi-judicial proceedings, are not strictly construed.

Domingo Fernandez, et al., former employees of Helios Manufacturing Corporation (HELIOS), filed a complaint for illegal dismissal or illegal closure of business, non-payment of salaries and other money claims against HELIOS. The Labor Arbiter found that the closure of the Muntinlupa office/plant was a sham, as HELIOS simply relocated its operations to a new plant in Carmona, Cavite under the new name of ―Pat & Suzara,‖ in response to the newly-established local union. HELIOS and it Board of Directors and stockholders were held liable.

The NLRC modified the Labor Arbiter’s Order, holding that Dumalasa is not jointly and severally liable with HELIOS for Fernandez, et al.’s claim, there being no showing that she acted in bad faith nor that HELIOS cannot pay its obligations. Dumalasa moved for reconsideration, but this was denied, hence, she appealed to the Court of Appeals.

The appellate court reversed and set aside the NLRC Resolution, holding that what the NLRC, in effect, modified was not the Order denying the Motion to Quash the Writ of Execution, but the Labor Arbiter’s Decision itself. This is an impermissible act since the Decision has become final and executor; hence, it could no longer be reversed or modified.

Respecting NLRC’s pronouncement that Dumalasa was not jointly and severally liable, the appellate court held that the same is a superfluity since there was no statement, either in the main case or in the Writ, that the liability is solidary. Therefore, Dumalasa is merely jointly liable for the judgment award. Dumalasa moved for reconsideration of the appellate court’s Decision, which was denied. Hence, this petition.

ISSUES:
1.) Whether or not the Labor Arbiter acquired jurisdiction over Dumalasa
2.) Whether or not Dumalasa is solidarily liable with HELIOS for the judgment award

HELD:
Contrary to Dumalasa’s contention, the Labor Arbiter acquired jurisdiction over her person regardless of the fact that there was allegedly no valid service of summons. It bears noting that, in quasi-judicial proceedings, procedural rules governing service of summons are not strictly construed. Substantial compliance therewith is sufficient. In the cases at bar, Dumalasa, her husband and three other relatives, were all individually impleaded in the complaint. The Labor Arbiter furnished her with notices of the scheduled hearings and other processes. It is undisputed that HELIOS, of which she and her therein co-respondents in the subject cases were the stockholders and managers, was in fact heard, proof of which is the attendance of her husband, President-General Manager of HELIOS, together with counsel in one such scheduled hearing and the Labor Arbiter’s consideration of their position paper in arriving at the Decision, albeit the same position paper was belatedly filed.

Clearly, Dumalasa was adequately represented in the proceedings conducted by the Labor Arbiter by the lawyer retained by HELIOS. Taking into account the peculiar circumstances of the cases, HELIOS’ knowledge of the pendency thereof and its efforts to resist them are deemed to be knowledge and action of petitioner. That Dumalasa and her fellow members of the Board refused to heed the summons and avail of the opportunity to defend themselves as they instead opted to hide behind the corporate veil does not shield them from the application of labor laws.

Dumalasa cannot now thus question the implementation of the Writ of Execution on her on the pretext that jurisdiction was not validly acquired over her person or that HELIOS has a separate and distinct personality as a corporate entity. To apply the normal precepts on corporate fiction and the technical rules on service of summons would be to overturn the bias of the Constitution and the laws in favor of labor.

On Carmen’s liability, a perusal of the Labor Arbiter’s Decision readily shows that, notwithstanding the finding of bad faith on the part of the management, the dispositive portion did not expressly mention the solidary liability of the officers and Board members, including Dumalasa.

Ineluctably, absent a clear and convincing showing of the bad faith in effecting the closure of HELIOS that can be individually attributed to petitioner as an officer thereof, and without the pronouncement in the Decision that she is being held solidarily liable, petitioner is only jointly liable.

The Court in fact finds that the present action is actually a last-ditch attempt on the part of Dumalasa to wriggle its way out of her share in the judgment obligation and to discuss the defenses which she failed to interpose when given the opportunity. Even as Dumalasa avers that she is not questioning the final and executory Decision of the Labor Arbiter and admits liability, albeit only joint, still, she proceeds to interpose the defenses that jurisdiction was not acquired over her person and that HELIOS has a separate juridical personality.

As for Dumalasa’s questioning the levy upon her house and lot, she conveniently omits to mention that the same are actually conjugal property belonging to her and her husband. Whether petitioner is jointly or solidarily liable for the judgment obligation, the levied property is not fully absolved from any lien except if it be shown that it is exempt from execution.