Periquet vs. NLRC

A motion for execution of a judgment must be filed within five years from the date it becomes final and executory, and a quitclaim voluntarily entered into with full understanding of its terms and supported by credible and reasonable consideration is binding on the parties and may not later be disowned simply because of a change of mind.

Corazon Periquet was employed as a toll collector by the Construction Development Corporation of the Philippines (CDCP), later renamed Philippine National Construction Corporation (PNCC). She was dismissed for willful breach of trust and unauthorized possession of accountable toll tickets allegedly found in her purse during a surprise inspection. Both Section 6, Rule 39 of the Revised Rules of Court and Article 224 of the Labor Code, as amended by Republic Act No. 6715, prescribe a five-year period within which a final and executory judgment may be enforced by motion.

Corazon Periquet was employed as a toll collector by the Construction Development Corporation of the Philippines (CDCP). She was dismissed for willful breach of trust and unauthorized possession of accountable toll tickets allegedly found in her purse during a surprise inspection. Claiming she had been "framed," she filed a complaint for illegal dismissal. The labor arbiter sustained her complaint in a decision dated May 10, 1979, ordering her reinstatement within ten days without loss of seniority rights and with full back wages computed from the date of her dismissal up to the date of her actual reinstatement. On appeal, the NLRC affirmed this decision in toto on August 29, 1980.

Rather than pressing for immediate reinstatement, the petitioner entered into a compromise agreement with CDCP on September 16, 1980, in which she waived her right to reinstatement and received P14,000.00 representing her back wages from the date of her dismissal to the date of the agreement. At that time, the decision could still have been elevated on certiorari before the Supreme Court, and there remained a possibility of reversal. The petitioner thereafter secured employment as a kitchen dispatcher at the Tito Rey Restaurant, where she worked from October 1982 to March 1987, receiving a monthly compensation of P1,904.00, which was higher than her salary at CDCP.

For reasons not disclosed by the record, the petitioner applied for re-employment with CDCP and was given the position of xerox machine operator on March 16, 1987, with a basic salary of P1,030.00 plus P461.33 in allowances, for a total of P1,491.33 monthly. On June 27, 1988, she wrote the new management of CDCP—now Philippine National Construction Corporation (PNCC)—asking that the rights granted her by the decision dated August 29, 1980 be recognized, claiming the waiver she had signed was invalid. On September 19, 1988, the Corporate Legal Counsel of PNCC recommended payment of P9,544.00, representing the balance of her back pay for three years at P654.00 per month, minus the P14,000.00 earlier paid.

On November 10, 1988, the petitioner accepted this additional amount and signed a second Quitclaim and Release, acknowledging full satisfaction of all her claims and demands, voluntarily waiving reinstatement to her former position as toll teller, certifying that the delay in her reinstatement was due to her own fault, and releasing PNCC from all claims of whatever nature. She expressed gratitude in a memorandum dated November 24, 1988, and PNCC adjusted her monthly salary from P2,014.00 to P3,588.00 in response to her inquiry about longevity pay and other benefits. Then, on March 11, 1989, nearly nine years after the NLRC affirmed the labor arbiter's decision, the petitioner filed a motion for the issuance of a writ of execution. The executive labor arbiter granted the motion on June 26, 1989, ordering payment of P205,207.42, and the amount was garnished by the NLRC sheriff on July 12, 1989. On September 11, 1989, the NLRC sustained CDCP's appeal, set aside the order, the writ, and the notice of garnishment, holding that the motion for execution was time-barred and that the two quitclaims were valid.

• Grave Abuse of Discretion: Petitioner contended that the NLRC decision was tainted with grave abuse of discretion and sought its reversal.
• Exception to the Five-Year Period: Petitioner argued that the five-year prescriptive period for execution by motion is not absolute, citing Lancita vs. Magbanua for the proposition that time during which execution is stayed or delayed by the debtor should be excluded from the prescriptive period, and that it was the private respondent that delayed and prevented execution of the judgment in her favor.
• Invalidity of Quitclaims: Petitioner claimed she was deceived into signing the quitclaims and that the waivers were invalid, asserting she was actually reinstated only on March 16, 1987, and should be granted back pay from November 28, 1978, the date of her dismissal, until the date of her reinstatement.
• Supersedeas Bond: Petitioner invoked Article 223 of the Labor Code to question the failure of the private respondent to file a supersedeas bond.

• Time-Barred Execution: Respondent argued that the motion for execution was filed beyond the five-year period prescribed by both the Rules of Court and the Labor Code, rendering it time-barred.
• Validity of Quitclaims: Respondent maintained that the two quitclaims signed by the petitioner were valid, as she voluntarily waived her right to reinstatement and acknowledged full settlement of her back wages and other benefits.
• Supersedeas Bond Not Required: The Solicitor General, arguing for the respondent's position, pointed out that the supersedeas bond under Article 223 is required only when there is an appeal from a decision with a monetary award, not from an order enforcing the decision, as in the case at bar.

• Timeliness of Execution: Whether the motion for execution filed almost nine years after the judgment became final and executory was time-barred under the five-year prescriptive period.
• Validity of Quitclaims: Whether the two quitclaims signed by the petitioner, waiving her right to reinstatement and acknowledging full settlement of her claims, were valid and binding.
• Computation of Back Wages: Whether the petitioner was entitled to back pay from the date of her dismissal in 1978 until her alleged reinstatement in 1987.
• Supersedeas Bond: Whether the private respondent's failure to file a supersedeas bond under Article 223 of the Labor Code barred it from appealing the order of execution.

• Timeliness of Execution: Yes, the motion was time-barred. The five-year prescriptive period under Section 6, Rule 39 of the Rules of Court and Article 224 of the Labor Code had lapsed, and no exception applied because the delay was attributable to the petitioner herself.
• Validity of Quitclaims: Yes, the quitclaims were valid and binding. Both were voluntarily entered into with full understanding of their terms and supported by credible and reasonable consideration, and could not be disowned simply because of a change of mind.
• Computation of Back Wages: No, back wages were limited to three years from the date of illegal dismissal, pursuant to established jurisprudence, and the petitioner's claim for back pay from 1978 to 1987 was rejected.
• Supersedeas Bond: No, the supersedeas bond requirement under Article 223 of the Labor Code applies only to appeals from decisions with monetary awards, not to orders enforcing a decision.

• Timeliness of Execution: Section 6, Rule 39 of the Revised Rules of Court provides that a judgment may be executed on motion within five years from the date of its entry or from the date it becomes final and executory; after that, it may be enforced only by independent action. Article 224 of the Labor Code contains a similar provision. The petitioner argued that the exception recognized in Lancita vs. Magbanua should apply—specifically, that time during which execution is stayed or delayed by the debtor should be excluded from the prescriptive period. However, the record showed that it was the petitioner who delayed, not the respondent. She did not demand reinstatement or complain when such demand was rejected; instead, she entered into a compromise agreement, secured other employment, applied for re-employment with CDCP on her own initiative, and signed a second quitclaim. There was no indication that she had been prevented from acting on her rights within the reglementary period. The statute of limitations was not devised against those who wish to act but cannot do so for causes beyond their control, but the petitioner's inaction was self-induced.

• Validity of Quitclaims: Not all waivers and quitclaims are invalid as against public policy. An agreement voluntarily entered into, representing a reasonable settlement, is binding on the parties and may not later be disowned simply because of a change of mind. The law steps in to annul a waiver only where there is clear proof that it was wangled from an unsuspecting or gullible person, or where the terms of settlement are unconscionable on their face. In this case, the petitioner signed the first compromise agreement on September 16, 1980, when the decision could still have been elevated on certiorari and reversed; she opted for the certainty of a cash settlement. She signed the second quitclaim on November 10, 1988, after accepting an additional P9,544.00, expressly certifying that the delay in her reinstatement was due to her own fault. Both waivers were executed with full understanding and supported by credible and reasonable consideration. The petitioner's pattern of signing waivers and then disowning them, of acknowledging full settlement and later claiming insufficiency, demonstrated a lack of candor and bona fides that undermined her position.

• Computation of Back Wages: Established jurisprudence limits back pay to three years from the date of illegal dismissal, during which period the dismissed employee is deemed unemployed without the necessity of proof. The petitioner's contention that she should be paid from 1978 to 1987 was rejected, even without regard to the fact that she was actually employed during most of that period at Tito Rey Restaurant, where she received a monthly compensation higher than her CDCP salary.

• Supersedeas Bond: Article 223 of the Labor Code requires a supersedeas bond only when there is an appeal from a decision with a monetary award. In this case, the appeal was taken from an order enforcing the decision, not from the decision itself. The Solictor General correctly pointed out this distinction, and the petitioner's invocation of Article 223 was therefore without merit.

• Validity of Quitclaims and Waivers — Not all waivers and quitclaims are invalid as against public policy. A quitclaim is binding where the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable. The law annuls a waiver only where there is clear proof that it was wangled from an unsuspecting or gullible person, or where the terms of settlement are unconscionable on its face. In this case, both quitclaims were upheld because the petitioner signed them voluntarily, understood their terms, and received reasonable consideration.

• Five-Year Period for Execution by Motion — Under Section 6, Rule 39 of the Rules of Court and Article 224 of the Labor Code, a judgment may be executed on motion within five years from the date it becomes final and executory. After the lapse of that period, and before it is barred by the statute of limitations, the judgment may be enforced only by independent action. The prescriptive period may be tolled where execution is stayed by the debtor's actions, but not where the delay is self-induced by the judgment creditor.

• Three-Year Limit on Back Wages — Back wages in illegal dismissal cases are limited to three years from the date of dismissal, during which period the dismissed employee is deemed unemployed without the necessity of proof. This doctrine was applied to reject the petitioner's claim for back pay spanning 1978 to 1987.

• "Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind." — This passage articulates the controlling doctrine on the validity of quitclaims in labor cases, establishing the standard for when a waiver will be upheld versus annulled.

• "It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction." — This defines the narrow exceptions under which a quitclaim may be invalidated, complementing the general rule of validity stated in the preceding passage.

• "The statute of limitation has not been devised against those who wish to act but cannot do so, for causes beyond their control." — This principle, quoted from Lancita vs. Magbanua, explains the equitable rationale for tolling the prescriptive period and why it did not apply to the petitioner, whose inaction was self-induced.

• Lancita vs. Magbanua, 7 SCRA 42 — Cited by the petitioner for the proposition that the five-year period for execution may be extended where execution was delayed by the debtor. The Court distinguished this case, finding that the delay here was caused by the petitioner's own inaction, not by the respondent.

• Mercury Drug Co., Inc. vs. CIR, 56 SCRA 694; Feati University Faculty Club vs. Feati University, 58 SCRA 395; Mariners Polytechnic School vs. Leogardo, Jr., G.R. No. 74271, March 31, 1989; Central Azucarera de Tarlac vs. Sampang, G.R. No. 84598, May 29, 1989 — Cited as the line of jurisprudence establishing the three-year limit on back wages in illegal dismissal cases, applied to reject the petitioner's claim for back pay from 1978 to 1987.

• Section 6, Rule 39, Revised Rules of Court — Provides that a judgment may be executed on motion within five years from the date of its entry or from the date it becomes final and executory; after such time, it may be enforced by independent action. Applied to hold the petitioner's motion for execution time-barred.

• Article 224, Labor Code, as amended by Republic Act No. 6715 — Contains a provision similar to Section 6, Rule 39, allowing issuance of a writ of execution on a judgment within five years from the date it becomes final and executory. Applied in conjunction with the Rules of Court to bar the motion for execution.

• Article 223, Labor Code — Governs the supersedeas bond requirement on appeal. The Court held that the bond is required only when there is an appeal from a decision with a monetary award, not from an order enforcing the decision, as in this case.

Narvasa (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concurred.