Monteverde v. Court of Industrial Relations
REITERATIONFacts
1. The Antecedents: Petitioners, alleging dismissal from employment by Filipinas Biscuit Company (FIBISCO) and its general manager, James Huang, for union organizing activities, filed a charge of unfair labor practice against the company and its manager. The respondents denied the existence of an employer-employee relationship. 2. Procedural History: The Court of Industrial Relations (CIR) initially found FIBISCO and James Huang guilty of unfair labor practice and ordered reinstatement with back wages. However, pending FIBISCO's motion for reconsideration, the petitioners' counsel, Atty. Juan G. Sison, Jr., moved to dismiss the case, which the CIR granted. Petitioners later engaged new counsel and sought to execute the original decision, but the CIR denied their motion for execution. A subsequent motion for reconsideration was also denied, though one judge dissented, advocating for the reinstatement of the original decision. 3. The Petition: The petitioners seek reinstatement of the CIR's March 21, 1968 decision, arguing that the subsequent dismissal of their unfair labor practice case was erroneous. They contend the CIR erred in dismissing the case based on their counsel's motion without verifying the counsel's authority to compromise or settle the litigation, citing Rule 138, Section 23 of the Revised Rules of Court. The petitioners assert they never authorized such a settlement. The Court, applying precedent, fixes back wages at three years without qualification or deduction.
Issue(s)
Whether the Court of Industrial Relations correctly dismissed the unfair labor practice case based on the motion of the petitioners' counsel without inquiring into his authority to compromise. Whether the petitioners are entitled to the execution of the March 21, 1968 decision.
Ruling
The resolution of the Court of Industrial Relations dated August 14, 1968, dismissing Case No. 3969-ULP and declaring it terminated, is set aside. The decision of the CIR dated March 21, 1968, is reinstated and ordered to be executed. Respondent Filipinas Biscuit Company (FIBISCO) is ordered to pay the petitioners backwages for three (3) years without qualification and deduction. This decision is immediately executory.
Ratio Decidendi
On the dismissal of the case without inquiry into counsel's authority: The Court held that the CIR erred in dismissing the unfair labor practice case solely on the motion of Atty. Juan G. Sison, Jr., without inquiring into his authority to compromise the case. It is elementary that lawyers cannot, without special authority, compromise their client's litigation or receive anything in discharge of a client's claim but the full amount in cash, as provided in Section 23, Rule 138 of the Revised Rules of Court. The CIR did not even ascertain the nature of the settlement allegedly entered into between Atty. Sison and FIBISCO. Since the petitioners denied authorizing Atty. Sison to settle their litigation, any such settlement would be void. Therefore, the CIR's dismissal was erroneous and lacked due process for the petitioners. On the entitlement to execution of the decision: Given that the dismissal of the case was erroneous, the original decision of March 21, 1968, which found FIBISCO and James Huang guilty of unfair labor practice and ordered reinstatement with back wages, must be reinstated and executed. To avoid protracted delay in the execution of the award for back wages, the Court applied the precedent set in Mercury Drug Co. vs. CIR, followed in subsequent cases, of fixing the amount of back wages to a just and reasonable level without qualification or deduction. Under the circumstances, the Court fixed the back wages at three (3) years without qualification and deduction.
Main Doctrine
A lawyer cannot compromise their client's litigation without special authority. The Court of Industrial Relations erred in dismissing an unfair labor practice case based solely on the motion of the petitioners' counsel without inquiring into his authority to compromise or settle the case.