Tan v. Timbal, Jr.
REITERATIONFacts
The Antecedents: Restituto Timbal, Jr. and Ernesto Valenciano, employees of Nationwide Steel Corporation (NSC), were issued letters by General Manager Conrado Tan requiring them to explain their involvement in a complaint filed with the Social Security System (SSS) alleging that NSC was not remitting employee premiums. Following their explanations, they were denied entry to the premises and handed memoranda indefinitely suspending them. Aggrieved, Timbal, Jr. and Valenciano filed a complaint for illegal dismissal against NSC and Conrado Tan. Procedural History: The Labor Arbiter ruled in favor of Timbal, Jr. and Valenciano, finding NSC guilty of illegal dismissal and ordering reinstatement with backwages. No appeal was filed, and the decision became final. When the writ of execution was unsatisfied, the complainants sought payment of separation pay and an alias writ of execution against NSC's officers and stockholders, including Conrado Tan, based on unpaid subscribed capital stock. The Labor Arbiter granted this, ordering Tan and others to pay their unpaid subscriptions. The NLRC later set aside this order and alias writ, ruling that stockholders were not automatically liable and a separate complaint was needed. Timbal, Jr. petitioned the Court of Appeals, which affirmed the NLRC's decision regarding other stockholders but reinstated the Labor Arbiter's order and alias writ against Conrado Tan. The Petition: Conrado Tan filed this petition for review on certiorari, arguing that the Court of Appeals erred in holding him jointly and severally liable with NSC for the monetary award. He contends that the Labor Arbiter's original decision, which became final and immutable, found only NSC liable and did not include him personally. The petition asserts that the alias writ of execution varied the tenor of the final judgment and that the Court of Appeals lacked jurisdiction to delve into findings of malice or bad faith not made by the Labor Arbiter in the original decision.
Issue(s)
Whether Conrado Tan is liable, jointly or severally with Nationwide Steel Corporation (NSC), for the monetary award in favor of Restituto Timbal, Jr. Whether the Court of Appeals committed a grave abuse of discretion in reinstating the Labor Arbiter's order and alias writ of execution against Conrado Tan.
Ruling
The petition is meritorious. The decision of the Court of Appeals is reversed and set aside, and the decision of the NLRC is affirmed. The petitioner, Conrado Tan, is not liable, jointly or severally, with NSC for the monetary award.
Ratio Decidendi
On the issue of Conrado Tan's liability: The Court held that the Labor Arbiter's original decision in NLRC Case No. NCR-00-08-03596-89 found only NSC liable for the monetary awards. This decision became final and executory, rendering it immutable and unalterable. The Labor Arbiter, NLRC, Court of Appeals, and the Supreme Court itself have no appellate jurisdiction to alter or reverse a final and executory decision. An order of execution that varies the tenor of the judgment or exceeds the terms thereof is a nullity. The alias writ of execution issued by the Labor Arbiter, which sought to enforce the judgment against Conrado Tan and other officers, varied the tenor of the original judgment which solely held NSC liable. Therefore, the alias writ and the proceedings related to it were null and void for lack of jurisdiction. The NLRC acted in accordance with law and jurisprudence when it set aside the Labor Arbiter's order and alias writ of execution. The NLRC correctly pointed out that petitioners were not impleaded as party respondents in the original labor case, and a separate complaint would be necessary to hold stockholders liable for unpaid subscriptions. The NLRC had not acquired jurisdiction over the stockholders in the original case. Therefore, the NLRC did not commit a grave abuse of discretion amounting to excess or lack of jurisdiction. On the issue of the Court of Appeals' jurisdiction: The Court reiterated that while corporate directors and officers may be solidarily liable with the corporation for termination of employment committed with malice or bad faith, this requires a finding of such malice or bad faith. In the instant case, the Labor Arbiter did not make any finding that petitioner Conrado Tan acted with malice or bad faith in ordering the suspension of the respondent. Neither did the original decision hold him liable jointly or severally with NSC. The Court of Appeals, in a petition for certiorari from the NLRC's decision, had no jurisdiction to delve into and resolve an issue already passed upon by the Labor Arbiter with finality, particularly the issue of malice or bad faith, which was not determined in the original proceedings. To do so would be to indirectly alter or amend the final and executory judgment, which is proscribed.
Main Doctrine
A writ of execution that varies the tenor of a final and executory judgment is a nullity. The Court of Appeals cannot delve into and resolve an issue already passed upon by the Labor Arbiter with finality, especially when it involves findings of malice or bad faith not made in the original decision.