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
Piñas, 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.
chanroblespublishingcompany

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. chanroblespublishingcompany

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. chanroblespublishingcompany

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. chanroblespublishingcompany

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. chanroblespublishingcompany

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;” chanroblespublishingcompany

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, 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
inviolable 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 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 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.”

(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. chanroblespublishingcompany

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.”chanroblespublishingcompany
 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. chanroblespublishingcompany

Abad Santos, Yap, Cruz and Paras,[**] JJ., concur. chanroblespublishingcompany

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