J Phil Vs NLRC

G.R. No.
175366
J-PHIL MARINE, INC. and/or JESUS CANDAVA and NORMAN SHIPPING SERVICES,
Petitioners,
- versus -

NATIONAL LABOR
RELATIONS COMMISSION and WARLITO E.
DUMALAOG,
Respondents

CARPIO MORALES, J.:

Warlito E. Dumalaog (respondent), who served as cook aboard vessels plying overseas, filed on March 4, 2002 before
the National Labor Relations Commission (NLRC) a pro-forma complaint
[1]
against petitioners manning agency J-Phil Marine,
Inc. (J-Phil), its then president Jesus Candava, and its foreign principal Norman Shipping Services for unpaid money claims,
moral and exemplary damages, and attorneys fees.

Respondent thereafter filed two amended pro forma complaints
[2]
praying for the award of overtime pay, vacation
leave pay, sick leave pay, and disability/medical benefits, he having, by his claim, contracted enlargement of the heart and
severe thyroid enlargement in the discharge of his duties as cook which rendered him disabled.

Respondents total claim against petitioners was P864,343.30 plus P117,557.60 representing interest
and P195,928.66 representing attorneys fees.
[3]

By Decision
[4]
of August 29, 2003, Labor Arbiter Fe Superiaso-Cellan dismissed respondents complaint for lack of
merit.

On appeal,
[5]
the NLRC, by Decision of September 27, 2004, reversed the Labor Arbiters decision and awarded
US$50,000.00 disability benefit to respondent. It dismissed respondents other claims, however, for lack of basis or
jurisdiction.
[6]
Petitioners Motion for Reconsideration
[7]
having been denied by the NLRC,
[8]
they filed a petition for
certiorari
[9]
before the Court of Appeals.

By Resolution
[10]
of September 22, 2005, the Court of Appeals dismissed petitioners petition for, inter alia, failure to
attach to the petition all material documents, and for defective verification and certification. Petitioners Motion for
Reconsideration of the appellate courts Resolution was denied;
[11]
hence, they filed the present Petition for Review on
Certiorari.

During the pendency of the case before this Court, respondent, against the advice of his counsel, entered into a
compromise agreement with petitioners. He thereupon signed a Quitclaim and Release subscribed and sworn to before the
Labor Arbiter.
[12]

On May 8, 2007, petitioners filed before this Court a Manifestation
[13]
dated May 7, 2007 informing that, inter
alia, they and respondent had forged an amicable settlement.

On July 2, 2007, respondents counsel filed before this Court a Comment and Opposition (to Petitioners Manifestation
of May 7, 2007)
[14]
interposing no objection to the dismissal of the petition but objecting to the absolution of petitioners from
paying respondent the total amount of Fifty Thousand US Dollars (US$50,000.00) or approximately P2,300,000.00, the amount
awarded by the NLRC, he adding that:

There being already a payment of P450,000.00, and invoking the doctrine of parens patriae,
we pray then [to] this Honorable Supreme Court that the said amount be deducted from the [NLRC]
judgment award of US$50,000.00, or approximately P2,300,000.00, and petitioners be furthermore
ordered to pay in favor of herein respondent [the] remaining balance thereof.

x x x x
[15]
(Emphasis in the original; underscoring supplied)

Respondents counsel also filed before this Court, purportedly on behalf of respondent, a Comment
[16]
on the present
petition.

The parties having forged a compromise agreement as respondent in fact has executed a Quitclaim and Release, the
Court dismisses the petition.

Article 227 of the Labor Code provides:

Any compromise settlement, including those involving labor standard laws, voluntarily agreed
upon by the parties with the assistance of the Department of Labor, shall be final and binding upon the
parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues
involved therein except in case of non-compliance thereof or if there is prima facieevidence that the
settlement was obtained through fraud, misrepresentation, or coercion. (Emphasis and underscoring
supplied)

In Olaybar v. NLRC,
[17]
the Court, recognizing the conclusiveness of compromise settlements as a means to end labor
disputes, held that Article 2037 of the Civil Code, which provides that [a] compromise has upon the parties the effect and
authority of res judicata, applies suppletorily to labor cases even if the compromise is not judicially approved.
[18]

That respondent was not assisted by his counsel when he entered into the compromise does not render it null and
void. Eurotech Hair Systems, Inc. v. Go
[19]
so enlightens:

A compromise agreement is valid as long as the consideration is reasonable and the employee
signed the waiver voluntarily, with a full understanding of what he was entering into. All that is
required for the compromise to be deemed voluntarily entered into is personal and specific individual
consent. Thus, contrary to respondents contention, the employees counsel need not be present at the
time of the signing of the compromise agreement.
[20]
(Underscoring supplied)

It bears noting that, as reflected earlier, the Quitclaim and Waiver was subscribed and sworn to before the Labor
Arbiter.

Respondents counsel nevertheless argues that [t]he amount of Four Hundred Fifty Thousand Pesos (P450,000.00)
given to respondent on April 4, 2007, as full and final settlement of judgment award, is unconscionably low, and un-[C]hristian,
to say the least.
[21]
Only respondent, however, can impugn the consideration of the compromise as being unconscionable.

The relation of attorney and client is in many respects one of agency, and the general rules of agency apply to such
relation.
[22]
The acts of an agent are deemed the acts of the principal only if the agent acts within the scope of his
authority.
[23]
The circumstances of this case indicate that respondents counsel is acting beyond the scope of his authority in
questioning the compromise agreement.

That a client has undoubtedly the right to compromise a suit without the intervention of his lawyer
[24]
cannot be
gainsaid, the only qualification being that if such compromise is entered into with the intent of defrauding the lawyer of the
fees justly due him, the compromise must be subject to the said fees.
[25]
In the case at bar, there is no showing that respondent
intended to defraud his counsel of his fees. In fact, the Quitclaim and Release, the execution of which was witnessed by
petitioner J-Phils president Eulalio C. Candava and one Antonio C. Casim, notes that the 20% attorneys fees would be paid 12
April 2007 P90,000.

WHEREFORE, the petition is, in light of all the foregoing discussion, DISMISSED.

Let a copy of this Decision be furnished respondent, Warlito E. Dumalaog, at his given address at No. 5-B Illinois
Street, Cubao, Quezon City.

SO ORDERED.

J Phil Vs NLRC

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