A.C.

Ransom vs NLRC

Facts: On June 6, 1961, employees of AC Ransom, most being members of the AC Ransom Labor Union, went on
strike. The said strike was lifted on June 21 with most of the strikers being allowed to resume their work. However, 22
strikers were refused reinstatement.

During 1969, the Hernandez family (owners of AC RANSOM) organized another corporation under the name of
Rosario Industrial Corporation. The said company dealt in the same type of business as AC Ransom.

The issue of back wages was brought before the Court of Industrial Relations which rendered a decision ordering the
22 strikers to be reinstated with back wages.

On April 2, 1973, RANSOM filed an application for clearance to close or cease operations. The same was granted by
the Ministry of Labor and Employment. Although it has stopped operations, RANSOM has continued its personality as
a corporation.

A motion of execution was filed by the Union against AC Ransom but the former was unable to collect due to the
inability to find leviable assets of the company. The Union subsequently asked the officers of Ransom to be personally
liable for payment of the back wages. The motion was granted by the Labor Arbiter but was subsequently reversed by
the NLRC.

The NLRC held that the general rule prevails that officers of the corporation are liable personally for official acts,
unless they have exceeded their authority; that in the absence of evidence showing that the officers mentioned in the
Order of the Labor 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.

Issue: WON the officers of the corporation should be held personally liable to pay for the back wages.

Ruling:YES. Court set aside NLRC ruling and reinstated GENILO ORDER with modification that personal liability for
the backwages of the 22 strikers be limited to Ruben Hernandez (President of RANSOM in 1974), jointly and severally
with other Presidents of RANSOM from 1972 up to the time corporate life was terminated.

If the employer is a corporation, Article 212 (c) of the Labor Code provides: '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. 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 employer". The responsible officer of an
employer corporation can be held personally, not to say even criminally, liable for non-payment of back wages, which
is provided in the Minimum Wage Law, Section 15(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.

Since non-payment of the back wages of the 22 strikers has been a continuing situation, personal liability of the
RANSOM President, at the time the back wages were ordered 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.