Hipolito, Jr. v. Calleja
REITERATIONFacts
The Antecedents: Petitioners, officers of the San Miguel Corporation Employees Union (SMCEU), impugned a decision of the Bureau of Labor Relations (BLR) that affirmed the invalidity of the disqualification/expulsion of private respondent from the union and ordered petitioners to return P130,000.00 paid to Atty. Raymundo Hipolito III as attorney's fees. Private respondent, an employee of San Miguel Corporation, filed two complaints against petitioners, alleging arbitrary expulsion from the union without due process, illegal appointment of the union treasurer, violation of Labor Code provisions, unilateral appointment of Atty. Hipolito III as union counsel without board resolution and illegal payment of P130,000.00 in fees, and failure to reimburse legitimate expenses. Procedural History: The Med-Arbiter declared the expulsion of private respondent invalid, ordered his reinstatement, declared Rodolfo Destura as the legally constituted Acting Treasurer, considered the amount paid to Atty. Hipolito III as payment for services rendered, and denied other claims. The BLR modified the Med-Arbiter's order, directing petitioners to return P130,000.00 to the union for illegal payment to Atty. Hipolito III. The Petition: Petitioners sought to annul the BLR decision, arguing that private respondent was not a rank and file employee and thus disqualified from union membership, and that the payment of attorney's fees was valid.
Issue(s)
Whether the public respondent committed grave abuse of discretion in holding that private respondent was illegally dismissed from the union. Whether the public respondent committed grave abuse of discretion in ordering petitioners to return P130,000.00 to the union paid to Atty. Hipolito III.
Ruling
The Supreme Court affirmed the BLR's decision declaring the disqualification/expulsion of private respondent from the union as invalid. However, the Court set aside the portion of the BLR decision ordering petitioners to return P130,000.00 to the union, deeming the payment as reasonable compensation for services rendered by Atty. Hipolito III on a quantum meruit basis.
Ratio Decidendi
On the invalidity of private respondent's expulsion: The Court held that the public respondent did not commit grave abuse of discretion in affirming the Med-Arbiter's declaration that private respondent is a rank and file employee. This was supported by a certification from the corporation stating his position is non-supervisory and by previous rulings of the Supreme Court recognizing his rank and file status. Therefore, his disqualification and expulsion from the union were invalid. On the return of attorney's fees: The Court found that while there was no board resolution appointing Atty. Hipolito III as union counsel or authorizing the payment of fees, the facts established that he had rendered services as union counsel in the negotiation and consummation of the 1986 Collective Bargaining Agreement (CBA). The board of directors, including private respondent, had acknowledged and utilized his services, and the benefits secured from these services redounded to the union's advantage. Consequently, the Court ruled that Atty. Hipolito III was entitled to reasonable compensation for his professional services on a quantum meruit basis. The Court considered the amount of P130,000.00 as reasonable compensation for the services rendered, taking into account the labor, time, and responsibility involved, as well as the benefits secured for the union. Thus, the payment was deemed a reasonable expenditure of union funds, and petitioners were not required to return the amount.
Main Doctrine
While a union board resolution is generally required for the engagement of legal counsel and authorization of attorney's fees, services rendered to the union with the knowledge, acquiescence, and acceptance of benefits by the board may be compensated on a quantum meruit basis, entitling the counsel to reasonable attorney's fees.