National Waterworks and Sewerage Authority v. National Waterworks and Sewerage Authority Consolidated Unions
REITERATIONFacts
The Antecedents: A series of cases were filed before the defunct Court of Industrial Relations (CIR) involving the National Waterworks and Sewerage Authority (NWSA) and the NWSA Consolidated Unions concerning collective bargaining agreements, backwages, and attorney's fees. NWSA employees and workers prevailed, and their unions were awarded attorney's fees. Procedural History: The controversy before the Supreme Court stemmed from a CIR Order dated July 15, 1970, directing the issuance of a writ of execution against NWSA for P48,000.00, representing Atty. Atanacio Pacis's 6% attorney's fees on P800,000.00 already paid to NWSA employees and workers. This was followed by a CIR Resolution dated August 11, 1970, denying NWSA's motion for reconsideration. NWSA sought review of these issuances. The Petition: NWSA filed a petition for review on certiorari, assailing the CIR Order and Resolution. NWSA argued that the CIR committed grave abuse of discretion by ordering the execution of attorney's fees despite a previous CIR Order dated June 16, 1966, which directed the disbursement of P800,000.00 to employees without including Atty. Pacis's fees. NWSA also contended it was not Atty. Pacis's client and that its motion for reconsideration was erroneously denied as filed out of time.
Issue(s)
Whether the CIR committed a grave abuse of discretion in ordering the execution of attorney's fees for Atty. Pacis despite a prior order directing disbursement of funds without such fees. Whether NWSA, not being the client of Atty. Pacis, can be held liable for his attorney's fees. Whether NWSA's motion for reconsideration was correctly denied for being filed out of time.
Ruling
The Supreme Court annulled and set aside the assailed CIR Order dated July 15, 1970, and the CIR Resolution dated August 11, 1970. Costs were de officio.
Ratio Decidendi
On the issue of the CIR's grave abuse of discretion and NWSA's liability for Atty. Pacis's attorney's fees: The Court ruled that NWSA could not be held liable to pay Atty. Pacis the separate sum of P18,000.00 (part of the P48,000.00 claim) for attorney's fees from the P300,000.00 already paid. NWSA had followed the CIR Order of June 16, 1966, which directed the disbursement of P800,000.00 to employees and workers and specified the segregation of attorney's fees for Attys. Cid, Bocobo, and the unions, but inadvertently omitted Atty. Pacis's share. The Court found that NWSA could not be faulted for strictly adhering to this subsequent order, which was deemed more controlling than the earlier CIR Order of November 27, 1964, that fixed Atty. Pacis's fees. The Court emphasized that NWSA's adherence to the June 16, 1966 order did not constitute bad faith or gross negligence. The Court further noted that the P300,000.00 payment had already been disbursed two years prior to the July 18, 1968 CIR Order directing payment to Atty. Pacis, making such payment impossible from that disbursement. The Court concluded that NWSA cannot be held liable for the negligence of Atty. Pacis in failing to assert his rights promptly or to call NWSA's attention to the omission. On the issue of NWSA not being Atty. Pacis's client: The Court reasoned that NWSA cannot be held liable for Atty. Pacis's attorney's fees without establishing a lawyer-client relationship between them, which the Court found untenable. The Court reiterated that NWSA had already paid the aggregate sum of P800,000.00 to its employees and workers, which included the shares of attorney's fees as determined by the CIR Order of June 16, 1966. To compel NWSA to pay an additional P48,000.00 would exceed the actual sum awarded to its workers and employees. Therefore, NWSA's recourse was to pay according to the tenor of the June 16, 1966 order, and Atty. Pacis's claim should be against his clients, the NWSA Consolidated Unions. On the procedural issue of the motion for reconsideration being filed out of time: The Court found a procedural flaw in the denial of NWSA's motion for reconsideration. While Section 17-A of the CIR Rules prescribed a four-day period for filing a motion for reconsideration in certification cases, the records did not establish that the cases were certified by the President to the CIR. Instead, the Notice of Order attached to the CIR Order of July 15, 1970, indicated a five-day reglementary period for filing a motion for reconsideration, consistent with Rules 15, 16, and 17 of the CIR Rules for non-certified cases. Under these rules, NWSA's motion for reconsideration was filed on time. The Court also noted that the CIR Order of July 15, 1970, was patently defective for insisting on NWSA paying Atty. Pacis's fees when NWSA had already complied with the June 16, 1966 CIR Order. In view of this anomalous situation and the procedural defect, the CIR Order of July 15, 1970, was annulled in the interest of substantial justice, having been issued with grave abuse of discretion.
Main Doctrine
The Supreme Court annulled the Court of Industrial Relations (CIR) Order and Resolution, holding that the National Waterworks and Sewerage Authority (NWSA) could not be compelled to pay attorney's fees to Atty. Atanacio Pacis from funds already disbursed in accordance with a subsequent, controlling CIR Order, and that Atty. Pacis's recourse was to collect from his clients, the NWSA Consolidated Unions, due to NWSA's adherence to the June 16, 1966 CIR Order which inadvertently omitted Pacis's fees.