Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-69494 June 10, 1986

A.C. RANSOM LABOR UNION-CCLU, petitioner,

vs.
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.

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 Pinas Rizal, where it has been engaged in the manufacture mainly of ink and articles associated with
ink.

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 P28million 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 RANSOM's 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 respondent's 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
respondent's 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 respondent's officers and agents, we agree with the contention of the
respondent-appellant that there is nothing in the Order dated May 11, 1986 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.

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.

We now come to the NLRC's decision upholding non-personal liabilities of the individual respondents herein for back
wages of the 22 strikers.

(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 fill 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.

(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 his 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.

(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 operation 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.

(e) Considering that non-payment of the back wages of the 22 strikers has been a continuing situation, it is our opinion
What 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 x-ray 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.

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.

SO ORDERED.

Abad Santos (Chairman), Yap, Cruz and Paras, * , JJ., concur.

Narvasa, J., took no part.

Footnotes

* Justice Edgardo L. Paras was designated to sit in the First Division in hell of Justice Andres R.
Narvasa, who inhibited himself.