Almirante: Effect of party’s failure to appeal

Labor Case Digest

RESPONDENT Noel Sacramento Saluta filed a complaint for illegal dismissal and money claims against petitioner Celia Atienza and CRV Corp. He alleged that he was hired as a company driver by CRV Corp. and was assigned to drive for the petitioner, one of the company’s top officials and was paid P9,000 monthly salary.

CRV Corp. had been impleaded, duly notified of this suit and properly served with legal process but it never participated in the case by sending an authorized representative or filing a single pleading.

When the case reached the Court of Appeals (CA), it found the respondent to have been illegally dismissed and ordered both the CRV Corp. and the petitioner liable to the respondent for the payment of backwages, separation pay, wage differentials, holiday pay, 13th month pay and service incentive leave pay.

Only the petitioner appealed from the CA decision to the Supreme Court. CRV Corp. did not. The Supreme Court reversed and set aside the CA decision and affirmed the Labor Arbiter’s decision finding that the respondent is a personal driver of the petitioner.

Does the CRV Corp. benefit from the Supreme Court decision?

Ruling: No.

At this juncture, this Court takes this opportune time to emphasize that a reversal of a judgment on appeal is binding on the parties to the suit, but shall not benefit the parties against whom the judgment was rendered in the court a quo, but who did not join in the appeal, unless their rights and liabilities and those of the parties appealing are so interwoven and dependent as to be inseparable, in which case a reversal as to one operates as a reversal as to all.

It is basic that under the general doctrine of separate juridical personality, stockholders of a corporation enjoy the principle of limited liability: the corporate debt is not the debt of the stockholder. This is because a corporation has a separate and distinct personality from those who represent it.

Although a reversal of the judgment as to one would operate as a reversal as to all where the rights and liabilities of those who did not appeal and those of the party appealing are so interwoven and dependent on each other as to be inseparable, CRV Corp. and petitioner have no commonality of interest because each bears the injury of an adverse judgment. CRV Corp. will not be harmed had petitioner been held liable to pay the respondent his unpaid wages. Conversely, petitioner did not suffer any monetary injury when CRV Corp. was made liable to pay the respondent his unpaid wages.

Even if petitioner is allegedly one of CRV Corp.’s top officials, such hypothetical fact does not translate, or even imply that she will be financially injured by an adverse money-claim judgment against the latter. Much like stockholders, corporate officers and employees only have an inchoate right (only to the extent of their valid collectibles in the form of salaries and benefits) to the assets of the corporation which, in turn, is the real owner of the assets by virtue of its separate juridical personality.

Moreover, no evidence was offered by both parties that the petitioner was equipped with a board resolution (even if belatedly submitted) or, at least, authorized by corporate by-laws to represent CRV Corp. in the instant suit. Therefore, petitioner’s appeal cannot benefit CRV Corp. (Celia Atienza vs. Noel Sacramento Saluta, G.R. 233413, June 17, 2019).


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