Serrano v. Ambassador Hotel
REITERATIONFacts
The Antecedents: Petitioner Nerie C. Serrano was employed by Ambassador Hotel, Inc. (AHI) from 1969 until her retirement in 2001, initially as an accountant and later as the head of the accounting department, with additional duties related to inventory and purchasing. In 1998, an intra-corporate dispute arose within AHI, leading to the dismissal of Simeon Nicolas Chan as President and the appointment of respondent Yolanda Chan as the new president. Concurrently, Serrano was dismissed for insubordination and loss of trust and confidence. Simeon Chan refused to recognize the board resolutions, and Serrano, under his orders, resisted Yolanda Chan's attempt to inspect the hotel's books, a right later affirmed by the Supreme Court. Following Yolanda Chan's assumption of the presidency in 2001, Serrano was instructed to prepare an account report and turn over assets, but she alleged being given no other assignments and subsequently filed for retirement. Procedural History: Serrano filed a complaint for nonpayment of salaries, 13th month pay, separation pay, retirement benefits, and damages. The Labor Arbiter ruled in her favor, awarding P1,323,693.36. The National Labor Relations Commission (NLRC) modified this, deleting the retirement pay award and reducing the total to P324,680.40, citing Serrano's receipt of SSS retirement benefits. Both parties appealed to the Court of Appeals (CA). The CA's Special Eighth Division, in CA-G.R. SP No. 100569, reversed the NLRC and reinstated the Labor Arbiter's award, holding that retirement pay under the Labor Code is distinct from SSS benefits and that AHI failed to prove payment. This decision was affirmed by the Supreme Court in G.R. No. 189313, which became final and executory. Meanwhile, in CA-G.R. SP No. 100612, the CA's Special Fourth Division, in a separate proceeding, modified the NLRC decision by deleting the unpaid salaries award, further reducing the amount to P27,376.80, and finding Serrano's salary computations self-serving. The Petition: Petitioner Nerie C. Serrano filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision and Resolution of the Court of Appeals' Special Fourth Division in CA-G.R. SP No. 100612. Serrano argues that the CA's decision in CA-G.R. SP No. 100612 should be declared without legal effect because it effectively contradicts the final and executory Decision of the Supreme Court in G.R. No. 189313. She contends that the principle of res judicata, specifically the bar by prior judgment, should have prevented the CA's Special Fourth Division from rendering a decision that ran counter to the Supreme Court's prior ruling on the same parties, subject matter, and cause of action. The petition seeks to uphold the finality of the Supreme Court's decision in G.R. No. 189313, which affirmed the Labor Arbiter's award.
Issue(s)
Whether the Court of Appeals' Special Fourth (4th) Division erred in rendering a decision that contradicts a final and executory Decision of the Supreme Court in G.R. No. 189313; and whether the principle of res judicata applies to bar the proceedings before the Court of Appeals' Special Fourth (4th) Division.
Ruling
The Court GRANTS the petition and SETS ASIDE the Decision and Resolution dated March 26, 2010 and May 19, 2011, respectively, of the CA in CA-G.R. SP No. 100612. The CA is ordered to adopt immediately a more effective system in its Internal Rules to avoid two (2) divisions independently and separately deciding two (2) cases which originated from a case decided by a court a quo or which involved the same parties and cause of action or common questions of law or facts to prevent the rendition of conflicting decisions by two divisions which should otherwise have been consolidated in the first place.
Ratio Decidendi
On the issue of res judicata and the conflicting CA decisions: The Court held that the Supreme Court's Resolution dated December 16, 2009, and its Resolution dated March 17, 2010, denying the motion for reconsideration with finality in G.R. No. 189313, should have definitively ended the controversy regarding petitioner Serrano's benefits. The appellate court's Special Fourth (4th) Division ought to have dismissed respondents' certiorari petition docketed as CA-G.R. SP No. 100612 in view of the Supreme Court's final pronouncements in G.R. No. 189313. The principle of "bar by prior judgment," a concept embraced within the doctrine of res judicata, demands such action. Section 47(b), Rule 39 of the Rules of Court clearly states that a judgment or final order is conclusive between the parties with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto. To apply this doctrine, there must be identity of parties, subject matter, and causes of action, all of which were present in this case. The parties in both G.R. No. 189313 and CA-G.R. SP No. 100612 were petitioner Serrano and respondents Chan and AHI. Both cases dealt with Serrano's entitlement to monetary benefits as an employee of AHI. Both originated from the same complaint lodged before the labor arbiter. Therefore, the Supreme Court's ruling in G.R. No. 189313, which affirmed the Labor Arbiter's decision granting Serrano's claimed unpaid salary, 13th month pay, and retirement benefits, was conclusive on the parties. The CA Special 4th Division's decision, which ran counter to this final ruling, offended the principle of res judicata. The Court emphasized that a final judgment is immutable and unalterable, even if it is perceived to be erroneous, to ensure an end to litigations and maintain peace and order. The Court also noted the judicial confusion and conflict caused by two divisions of the CA rendering conflicting decisions on cases involving the same parties and cause of action, and suggested improvements to the CA's Internal Rules regarding the consolidation of cases to prevent such occurrences.
Main Doctrine
A decision that has become final and executory, particularly one from the Supreme Court, is conclusive between the parties and bars any subsequent action or proceeding involving the same subject matter and cause of action, based on the principle of res judicata. Conflicting decisions from different divisions of the Court of Appeals arising from the same or related cases should be avoided through proper consolidation.