Borra vs. Court of Appeals

A final and executory judgment determining that no employer-employee relationship exists between parties operates as res judicata by conclusiveness of judgment in a subsequent case between the same parties involving a different cause of action, precluding re-litigation of the employer-employee relationship issue even where the subsequent case seeks a different relief.

Hawaiian Philippine Company (HPCO) operates as a depository of sugar at its warehouse, where sugar planters and traders have their sugar hauled by workers engaged through independent contractors. Petitioners are workers who were originally engaged by contractor Jose Castillon to handle and withdraw sugar at HPCO's warehouse. When Castillon ceased acting as contractor, Fela Contractor replaced him and absorbed the workers. Petitioners filed two separate labor complaints against HPCO — one for regularization and another for monetary benefits — both of which turned on the threshold question of whether an employer-employee relationship existed between them and HPCO. An earlier case, "Perez vs. Hawaiian Philippine Company" (RAB Case No. 06-04-10169-95), had already ruled that petitioners were employees of Castillon, not HPCO, covering the period 1987 to 1995.

On September 12, 1997, the petitioners — workers at the sugar warehouse of Hawaiian Philippine Company (HPCO) — filed two separate complaints before the NLRC Regional Arbitration Branch No. VI in Bacolod City. The first, docketed as RAB Case No. 06-09-10698-97, was filed against HPCO alone and sought recognition as regular employees, together with the benefits received by regular employees for three years prior to filing. The second, docketed as RAB Case No. 06-09-10699-97, impleaded both HPCO and Fela Contractor and sought payment of unpaid wages, holiday pay, allowances, 13th month pay, service incentive leave pay, and moral and exemplary damages for the three years preceding the complaint.

On October 16, 1997, HPCO moved to consolidate the two cases, but the Labor Arbiter denied the motion on October 20, 1997. On January 9, 1998, HPCO moved to dismiss RAB Case No. 06-09-10698-97 on the ground of res judicata, citing the earlier final case "Humphrey Perez, et al. vs. Hawaiian Philippine Co." (RAB Case No. 06-04-10169-95), which included the present petitioners among its complainants and had ruled that they were employees of contractor Jose Castillon, not of HPCO. The Labor Arbiter granted the motion on July 9, 1998, but the NLRC reversed on appeal, reinstated the complaint, and remanded for further proceedings. The CA affirmed the NLRC on January 12, 2001, and the Supreme Court denied HPCO's petition for review (G.R. No. 151801) on November 12, 2002, holding that the Perez case covered a different period (1987–1995) and a different contractor (Castillon), while the regularization case was filed on September 12, 1997, by which time Fela Contractor had replaced Castillon, thus involving different causes of action requiring factual determination of Fela Contractor's role.

Meanwhile, on December 21, 1998, the Labor Arbiter rendered a decision in RAB Case No. 06-09-10699-97, holding that no employer-employee relationship existed between HPCO and the petitioners. The Labor Arbiter found that Fela Contractor had replaced Jose Castillon as the contractor of the sugar traders and planters, absorbed Castillon's workers, and employed them. A letter dated February 15, 1996 from Fela Contractor's representative Jardinico to HPCO's Administrative Manager confirmed that the former workers of Castillon had been absorbed and employed by Fela as of March 1, 1996. The Labor Arbiter concluded that HPCO was merely the depository of sugar and had no employer-employee relations with the complainants. No appeal was taken from this decision, and it became final and executory.

Relying on the finality of the decision in RAB Case No. 06-09-10699-97, HPCO filed another motion to dismiss RAB Case No. 06-09-10698-97, again invoking res judicata. On August 12, 2003, the Labor Arbiter denied the motion. HPCO elevated the matter to the CA via a petition for certiorari and prohibition. The CA granted the petition, annulled the Labor Arbiter's August 12, 2003 Order, and ordered the dismissal of RAB Case No. 09-10698-97. The CA denied petitioners' motion for reconsideration on January 14, 2005, prompting the present petition.

• Jurisdiction of the CA: Petitioners argued that the CA acted without jurisdiction in taking cognizance of HPCO's second certiorari petition, because the Supreme Court in G.R. No. 151801 had already lodged jurisdiction in the Labor Arbiter by directing remand for further proceedings, and no intervening or supervening event rendered that ruling inapplicable.
• Identity of Subject Matter and Cause of Action: Petitioners contended that the CA gravely abused its discretion in disregarding established facts on record showing identity of subject matter and cause of action between the cases decided in G.R. No. 151801 and CA-G.R. SP No. 78729, which should have precluded the CA from taking cognizance of the second petition.
• Forum Shopping: Petitioners asserted that HPCO committed forum shopping by simultaneously and successively filing identical motions to dismiss before different Labor Arbiters and two petitions for certiorari before the CA.

• Jurisdiction of the Court of Appeals: Whether the CA had jurisdiction to take cognizance of HPCO's petition for certiorari assailing the Labor Arbiter's Order denying the motion to dismiss, notwithstanding the Supreme Court's prior directive in G.R. No. 151801 to remand the case for further proceedings.
• Res Judicata (Conclusiveness of Judgment): Whether the final and executory decision of the Labor Arbiter in RAB Case No. 06-09-10699-97, which ruled that no employer-employee relationship existed between HPCO and petitioners, bars further litigation of the regularization claim in RAB Case No. 06-09-10698-97 under the doctrine of conclusiveness of judgment.
• Forum Shopping: Whether HPCO was guilty of forum shopping in filing successive motions to dismiss and petitions for certiorari before the CA.

• Jurisdiction of the Court of Appeals: Yes. The CA properly took cognizance of the certiorari petition, jurisdiction over the subject matter being conferred by law and not determined by the parties or by prior directives; the extraordinary writ of certiorari was available where the denial of the motion to dismiss was tainted with grave abuse of discretion.
• Res Judicata (Conclusiveness of Judgment): Yes. The final and executory decision in RAB Case No. 06-09-10699-97, which determined that no employer-employee relationship existed between HPCO and petitioners, operated as conclusiveness of judgment, barring re-litigation of that issue in RAB Case No. 06-09-10698-97.
• Forum Shopping: No. HPCO was not guilty of forum shopping because its successive motions to dismiss were premised on different factual bases — the first on the Perez case and the second on the final decision in RAB Case No. 06-09-10699-97.

• Jurisdiction of the Court of Appeals: Jurisdiction over the subject matter is conferred by law and cannot be set aside by the courts or the parties. The Supreme Court's directive in G.R. No. 151801 to remand the case for further proceedings merely required resolution of the factual issue of whether Fela Contractor stepped into the shoes of Castillon — it did not divest the CA of its jurisdiction over a certiorari petition. Under Section 3, Rule V of the NLRC Rules of Procedure, an order denying a motion to dismiss is interlocutory and not appealable. However, Rule 41 of the Rules of Court, applied suppletorily, provides that where a judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65. Where the denial of a motion to dismiss is tainted with grave abuse of discretion, certiorari is proper. HPCO alleged and established grave abuse of discretion in the Labor Arbiter's denial, thus the CA correctly assumed jurisdiction.

• Res Judicata (Conclusiveness of Judgment): The threshold issue in both RAB Case No. 06-09-10698-97 and RAB Case No. 06-09-10699-97 was whether an employer-employee relationship existed between HPCO and the petitioners. The Labor Arbiter's decision in RAB Case No. 06-09-10699-97, which became final and executory, ruled that no such relationship existed and that petitioners' real employer was Fela Contractor. Under the doctrine of conclusiveness of judgment — a facet of res judicata applicable where there is identity of parties but no identity of causes of action — any right, fact, or matter directly adjudged in a former suit by a court of competent jurisdiction is conclusively settled and cannot again be litigated between the same parties in any future action, whether for the same or a different cause of action. Only identities of parties and issues are required. Because the employer-employee relationship issue was squarely adjudged in RAB Case No. 06-09-10699-97, the Labor Arbiter committed grave abuse of discretion in denying HPCO's motion to dismiss the regularization case, since petitioners could not be regularized as employees of one who was not their employer.

• Forum Shopping: Forum shopping requires identity of parties, identity of rights asserted and reliefs prayed for founded on the same facts, and identity such that any judgment would amount to res judicata. HPCO's first motion to dismiss in 1998 was based on the Perez case (covering 1987–1995 under contractor Castillon), while its second motion to dismiss was based on the final decision in RAB Case No. 06-09-10699-97 (covering the period under Fela Contractor). Because the two motions rested on totally different facts and issues, the elements of forum shopping were absent.

• Res Judicata — Conclusiveness of Judgment — Where there is identity of parties in the first and second cases but no identity of causes of action, the first judgment is conclusive only as to those matters actually and directly controverted and determined. Any right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on the merits is conclusively settled and cannot again be litigated between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the two actions is the same. Only identities of parties and issues are required. Applied in this case: the final decision in RAB Case No. 06-09-10699-97 conclusively settled the absence of an employer-employee relationship between HPCO and petitioners, barring re-litigation of that issue in the regularization case.

• Certiorari from Denial of Motion to Dismiss (Labor Cases) — Under the NLRC Rules of Procedure, an order denying a motion to dismiss is interlocutory and not appealable. The aggrieved party's remedy is to file an answer, proceed to trial, and appeal in due course. However, certiorari under Rule 65 is available where the denial is tainted with grave abuse of discretion, pursuant to Rule 41 of the Rules of Court applied suppletorily.

• Forum Shopping — Forum shopping is the repetitive availing of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and raising substantially the same issues. The elements are: (a) identity of parties or parties representing the same interests; (b) identity of rights asserted and reliefs prayed for, founded on the same facts; and (c) identity of the two preceding particulars such that any judgment would amount to res judicata. Where successive motions to dismiss rest on different factual bases, forum shopping does not exist.

• "Hence, there is no point in determining the main issue raised in RAB Case No. 06-09-10698-97, i.e., whether petitioners may be considered regular employees of private respondent, because, in the first place, they are not even employees of the latter." — This passage encapsulates the ratio decidendi: the conclusiveness of judgment on the employer-employee relationship issue precludes any determination of the regularization claim.

• "conclusiveness of judgment finds application when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction." — This is the canonical formulation of conclusiveness of judgment as quoted by the Court, defining the operative conditions for the doctrine's application.

• "What is important in determining whether forum-shopping exists is the vexation caused the courts and parties-litigants by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issues." — This passage states the controlling standard for forum shopping, applied to distinguish HPCO's successive motions based on different factual predicates.

• Hawaiian Philippine Company vs. Borra, G.R. No. 151801, November 12, 2002 — Prior Supreme Court ruling affirming the CA and holding that the Perez case and the regularization case involved different causes of action and periods, requiring factual determination of Fela Contractor's role. Distinguished in the present case because the factual issue it called for had already been settled by the final decision in RAB Case No. 06-09-10699-97.

• Metro Drug Distribution, Inc. vs. Metro Drug Corporation Employees Association-Federation of Free Workers, 508 Phil. 47 (2005) — Cited for the rule that an order denying a motion to dismiss is interlocutory and not appealable, and that certiorari is available only where the denial is tainted with grave abuse of discretion.

• Antonio vs. Sayman Vda. de Monje, G.R. No. 149624, September 29, 2010, 631 SCRA 471 — Cited for the comprehensive definition and distinction between the two aspects of res judicata: bar by prior judgment and conclusiveness of judgment.

• Pentacapital Investment Corporation vs. Mahinay, G.R. Nos. 171736 and 181482, July 5, 2010, 623 SCRA 284 — Cited for the definition and elements of forum shopping, applied to determine that HPCO's successive motions to dismiss did not constitute forum shopping.

• Section 3, Rule V, NLRC Rules of Procedure — Provides that a motion to dismiss on grounds of lack of jurisdiction, improper venue, prior judgment, prescription, or forum shopping shall be immediately resolved by the Labor Arbiter, and that an order denying the motion is not appealable. Applied to establish that the Labor Arbiter's denial of HPCO's motion to dismiss was interlocutory and not appealable, but certiorari was available for grave abuse of discretion.

• Rule 41, Section 1, Rules of Court — Provides that where a judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65. Applied suppletorily to labor cases to justify the CA's jurisdiction over HPCO's certiorari petition.

• Section 3, Rule IV, NLRC Rules of Procedure — Provides for consolidation of cases pending before different Labor Arbiters in the same Regional Arbitration Branch involving the same employer and issues, or the same parties and different issues, whenever practicable. Cited to criticize the Labor Arbiter's denial of HPCO's motion to consolidate, which would have avoided sixteen years of delay.

• Section 1, Rule 31, 1997 Rules of Civil Procedure — Allows consolidation of actions involving a common question of law or fact. Cited in support of the observation that the Labor Arbiter should have consolidated the two cases.

Presbitero J. Velasco, Jr. (Chairperson), Roberto A. Abad, Jose Catral Mendoza, and Marvic Mario Victor F. Leonen concurred with the decision of Justice Diosdado M. Peralta.