SUPREME COURT

FIRST DIVISION
A.C. RANSOM LABOR UNION-CCLU,
Petitioner,
-versus-

G.R. No. L-69494

June 10, 1986

NATIONAL
LABOR
RELATIONS
COMMISSION, First Division, A.C.
RANSOM (PHILS.) CORPORATION,
RUBEN HERNANDEZ, MAXIMO C.
HERNANDEZ, JR., PORFIRIO R.
VALENCIA, LAURA H. CORNEJO,
FRANCISCO
HERNANDEZ,
CELESTINO C. HERNANDEZ & MA.
ROSARIO HERNANDEZ,
Respondents.
x---------------------------------------------------x
DECISION
MELENCIO-HERRERA, J.:
The facts relevant to this case may be related as follows:
1. Respondent A. C. Ransom (Philippines) Corporation
(RANSOM, for short) was established in 1933 by Maximo C.
Hernandez, Sr. It was a family corporation, the

stockholders of which were/are members of the Hernandez

family. It has a compound in Las Pias, Rizal, where it has
been engaged in the manufacture mainly of ink and articles
associated with ink.
chanroblespublishingcompany

2. On June 6, 1961, employees of RANSOM, most of them being

members of petitioner Labor UNION, went on strike and
established a picket line which, however, was lifted on June
21st with most of the strikers returning and being allowed to
resume their work by RANSOM. Twenty-two (22) strikers
were refused reinstatement by the Company.
3. During 1969, the same Hernandez family organized another
corporation, Rosario Industrial Corporation (ROSARIO, for
short) which also engaged, in the RANSOM Compound, in
the business of manufacture of ink and products associated
with ink.
4. The strike became the subject of Cases Nos. 2848 - ULP and
2880 - ULP of the Court of Industrial Relations which, on
December 19, 1972, ordered RANSOM its officers and
agents, to reinstate the 22 strikers with back wages from
July 25, 1969.
5. On April 2, 1973, RANSOM filed an application for clearance
to close or cease operations effective May 1, 1973, which was
granted by the Ministry of Labor and Employment in its
Order of June 7, 1973, without prejudice to the right of
employees to seek redress of grievance, if any. Although it
has stopped operations. RANSOM has continued its
personality as a corporation. For practical purposes,
reinstatement of the 22 strikers has been precluded. As a
matter of fact, reinstatement is not an issue in this case.
6. Back wages of the 22 strikers were subsequently computed at
P164,984.00, probably in early 1974. The exact date is not
reflected in the record.
7

Up to September 9, 1976, petitioner UNION had filed about

ten (10) motions for execution against RANSOM; but all of

them could not be implemented, presumably for failure to

find leviable assets of RANSOM; although it appears that, in
1975, RANSOM had sold machineries and equipment for P2
million to Revelations Manufacturing Corporation.
8. Directly related to this case is the last Motion for Execution,
dated December 18, 1978, filed by petitioner UNION wherein
it asked that officers and agents of RANSOM be held
personally liable for payment of the back wages. That Motion
was granted by Labor Arbiter, Tito F. Genilo, on March 11,
1980 (The GENILO ORDER), wherein he expressly
authorized a Writ of Execution to be issued for P164,984.00
(the back wages) against RANSOM and seven officers and
directors of the Company who are the named individual
respondents herein. RANSOM took an appeal to NLRC
which affirmed the GENILO ORDER, except as modified in
the body of its decision of July 31, 1984.
9. In RANSOMs appeal to the NLRC, two issues were raised:
(a)

One of the issues was:

THE
DECISION
OF
THE
INDUSTRIAL
RELATIONS COURT HAVING BECOME FINAL
AND EXECUTORY IN 1973, IS IT ENFORCEABLE
BY A WRIT OF EXECUTION ISSUED IN 1980 OR
MORE THAN FIVE YEARS AFTER THE FINALITY
OF THE DECISION SOUGHT TO BE ENFORCED?

The corresponding ruling made by NLRC was:

Perforce, respondents theory that execution
proceedings must stop after the lapse of five (5)
years and that a motion to revive need be filed, must
fail. Suffice it to state also that the statute of
limitations has been devised to operate primarily
against those who sleep on their rights, not against
those who assert their right but fail for causes
beyond their control. The above recital of facts
contradicts respondents contention that the CIR

decision of August 19, 1972 had remained dormant

to require a motion to revive.
(b)

The second issue raised was:

IS THE JUDGMENT AGAINST A CORPORATION
TO REINSTATE ITS DISMISSED EMPLOYEES
WITH BACKWAGES, ENFORCEABLE AGAINST
ITS OFFICERS AND AGENTS, IN THEIR
INDIVIDUAL,
PRIVATE
AND
PERSONAL
CAPACITIES, WHO WERE NOT PARTIES IN THE
CASE
WHERE
THE
JUDGMENT
WAS
RENDERED;

The NLRC ruling was:

As to the liability of the respondents officers and
agents, we agree with the contention of the
respondent-appellant that there is nothing in the
Order dated May 11, 1980 that would justify the
holding of the individual officers and agents of
respondent in their personal capacity. As a general
rule, officers of the corporation are not liable
personally for the official acts unless they have
exceeded the scope of their authority. In the absence
of evidence showing that the officers mentioned in
the Order of the Labor Arbiter dated March 11, 1980
have exceeded their authority, the writ of execution
can not be enforced against them, especially so since
they were not given a chance to be heard.
chanroblespublishingcompany

RANSOM and the seven individual respondents in this case have not
appealed from the ruling of the NLRC that Section 6, Rule 39, is not
invocable by them in regards to the execution of the decision of
December 19, 1972. Hence, the issue can no longer be raised herein.
Even if the said section were applicable, the 5-year period therein
mentioned may not have expired by December 18, 1978 because the
period should be counted only from the time the back wages were
determined, which could have been in early 1974.
chanroblespublishingcompany

We now come to the NLRCs decision upholding non-personal

liabilities of the individual respondents herein for back wages of the
22 strikers.
chanroblespublishingcompany

(a)

Article 265 of the Labor Code, in part, expressly provides:

Any worker whose employment has been terminated as a
consequence of an unlawful lockout shall be entitled to
reinstatement with full back wages.

Article 273 of the Code provides that:

Any person violating any of the provisions of Article 265 of this
Code shall be punished by a fine of not exceeding five hundred
pesos and/or imprisonment for not less than one (1) day nor
more than six (6) months.
chanroblespublishingcompany

(b) How can the foregoing provisions be implemented when the

employer is a corporation? The answer is found in Article 212 (c)
of the Labor Code which provides:
(c) Employer includes any person acting in the interest of an
employer, directly or indirectly. The term shall not include any
labor organization or any of its officers or agents except when
acting as employer.
The foregoing was culled from Section 2 of RA 602, the Minimum
Wage Law. Since RANSOM is an artificial person, it must have an
officer who can be presumed to be the employer, being the person
acting in the interest of (the) employer RANSOM. The corporation,
only in the technical sense, is the employer.
The responsible officer of an employer corporation can be held
personally, not to say even criminally, liable for non-payment of back
wages. That is the policy of the law. In the Minimum Wage Law,
Section 15(b) provided:
(b) If any violation of this Act is committed by a corporation,
trust, partnership or association, the manager or in his default,
the person acting as such when the violation took place, shall be

responsible. In the case of a government corporation, the

managing head shall be made responsible, except when shown
that the violation was due to an act or commission of some
other person, over whom he has no control, in which case the
latter shall be held responsible.
In PD 525, where a corporation fails to pay the emergency allowance
therein provided, the prescribed penalty shall be imposed upon the
guilty officer or officers of the corporation.
chanroblespublishingcompany

(c) If the policy of the law were otherwise, the corporation employer
can have devious ways for evading payment of back wages. In the
instant case, it would appear that RANSOM, in 1969, foreseeing
the possibility or probability of payment of back wages to the 22
strikers, organized ROSARIO to replace RANSOM, with the latter
to be eventually phased out if the 22 strikers win their case.
RANSOM actually ceased operations on May 1, 1973, after the
December 19, 1972 Decision of the Court of Industrial Relations
was promulgated against RANSOM.
(d) The record does not clearly identify the officer or officers of
RANSOM directly responsible for failure to pay the back wages of
the 22 strikers. In the absence of definite proof in that regard, we
believe it should be presumed that the responsible officer is the
President of the corporation who can be deemed the chief
operation officer thereof. Thus, in RA 602, criminal
responsibility is with the Manager or in his default, the person
acting as such. In RANSOM, the President appears to be the
Manager.
chanroblespublishingcompany

(e) Considering that non-payment of the back wages of the 22

strikers has been a continuing situation, it is our opinion that the
personal liability of the RANSOM President, at the time the back
wages were ordered to be paid should also be a continuing joint
and several personal liabilities of all who may have thereafter
succeeded to the office of president; otherwise, the 22 strikers
may be deprived of their rights by the election of a president
without leviable assets.
chanroblespublishingcompany

WHEREFORE, the questioned Decision of the National Labor

Relations Commission is SET ASIDE, and the Order of Labor
Arbiter Tito F. Genilo of March 11, 1980 is reinstated with the
modification that personal liability for the back wages due the 22
strikers shall be limited to Ruben Hernandez, who was President of
RANSOM in 1974, jointly and severally with other Presidents of the
same corporation who had been elected as such after 1972 or up to
the time the corporate life was terminated.
chanroblespublishingcompany

SO ORDERED.
Abad Santos, Yap, Cruz and Paras,[**] JJ., concur.
Narvasa, J., no part.
chanroblespublishingcompany

chanroblespublishingcompany

[**] Justice Eduardo L. Paras was designated to sit in the First Division in lieu of
Justice Andres R. Narvasa, who inhibited himself.
chanroblespublishingcompany