A.C. RANSOM LABOR UNION-CCLU, petitioner, vs.

December 19, 1972 Decision of the Court of Industrial

NATIONAL LABOR RELATIONS COMMISSION, First Relations was promulgated against RANSOM.
Division, A.C. RANSOM (PHILS.) CORPORATION, RUBEN
HERNANDEZ, MAXIMO C. HERNANDEZ, JR., PORFIRIO Same; Same; Same; Same; Absent definite proof as to the
R. VALENCIA, LAURA H. CORNEJO, FRAN-CISCO
identity of an officer or officers of the corporation directly
HERNANDEZ, CELESTINO C. HERNANDEZ & MA.
ROSARIO HERNANDEZ, respondents.
liable for failure to pay backwages, the responsible officer is
the president of the corporation jointly and severally with other
Labor Law; Illegal Dismissal; Backwages; Liability for presidents of the same
payment of backwages by an employer corporation; Officer of
a corporation, acting in the interest of a corporation, is _______________
presumed to be the employer.—Since RANSOM is an artificial
person, it must have an officer who can be presumed to be the * FIRST DIVISION
employer, being the “person acting in the interest of (the)
employer” RANSOM. The corporation, only in the technical 270
sense, is the employer.
270 SUPREME COURT REPORTS ANNOTATED
Same; Same; Same; Same; Responsible officer of an employer A.C. Ransom Labor Union—CCLU vs. NLRC
corporation can be held personally and criminally liable for
non-payment of back wages to workers.—The responsible corporation.—The record does not clearly identify “the officer
officer of an employer corporation can be held personally, not or officers” of RANSOM directly responsible for failure to pay
to say even criminally, liable for non-payment of back wages. the back wages of the 22 strikers. In the absence of definite
proof in that regard, we believe it should be presumed that the
Same; Same; Same; Same; Reason for policy of the law to hold responsible officer is the President of the corporation who can
an employer corporation liable for payment of backwages; be deemed the chief operation officer thereof. Thus, in RA 602,
Case at bar.—If the policy of the law were otherwise, the criminal responsibility is with the “Manager or in his default,
corporation employer can have devious ways for evading the person acting as such.” In RANSOM, the President appears
payment of back wages. In the instant case, it would appear to be the Manager. (e) Considering that non-payment of the
that RANSOM, in 1969, foreseeing the possibility or back wages of the 22 strikers has been a continuing situation, it
probability of payment of back wages to the 22 strikers, is our opinion that the personal liability of the RANSOM
organized ROSARIO to replace RANSOM, with the latter to President, at the time the back wages were ordered to be paid
be eventually phased out if the 22 strikers win their case. should also be a continuing joint and several personal liabilities
RANSOM actually ceased operations on May 1, 1973, after the of all who may have thereafter succeeded to the office of
president; otherwise, the 22 strikers may be deprived of their 271
rights by the election of a president without leviable assets.
VOL. 142, JUNE 10, 1986 271
PETITION to review the decision of the National Labor A.C. Ransom Labor Union—CCLU vs. NLRC
Relations Commission.
1. associated with ink.
The facts are stated in the opinion of the Court.
2. 4. The strike became the subject of Cases Nos. 2848—
ULP and 2880—ULP of the Court of Industrial
MELENCIO-HERRERA, J.:
Relations which, on December 19, 1972, ordered
RANSOM “its officers and agents”, to reinstate the 22
The facts relevant to this case may be related as follows:
strikers with back wages from July 25, 1969.
3. 5. On April 2, 1973, RANSOM filed an application for
1. 1. Respondent A. C. Ransom (Philippines) Corporation
clearance to close or cease operations effective May 1,
(RANSOM, for short) was established in 1933 by
1973, which was granted by the Ministry of Labor and
Maximo C. Hernandez, Sr. It was a “family”
Employment in its Order of June 7, 1973, without
corporation, the stockholders of which were/are
prejudice to the right of employees to seek redress of
members of the Hernandez family. It has a compound
grievance, if any. Although it has stopped operations,
in Las Piñas, Rizal, where it has been engaged in the
RANSOM has continued its personality as a
manufacture mainly of ink and articles associated with
corporation. For practical purposes, reinstatement of the
ink.
22 strikers has been precluded. As a matter of fact,
2. 2. On June 6, 1961, employees of RANSOM, most of
reinstatement is not an issue in this case.
them being members of petitioner Labor UNION, went
4. 6. Back wages of the 22 strikers were subsequently
on strike and established a picket line which, however,
computed at P164,984.00, probably in early 1974. The
was lifted on June 21st with most of the strikers
exact date is not reflected in the record.
returning and being allowed to resume their work by
5. 7. Up to September 9, 1976, petitioner UNION had
RANSOM. Twenty-two (22) strikers were refused
filed about ten (10) motions for execution against
reinstatement by the Company.
RANSOM; but all of them could not be implemented,
3. 3. During 1969, the same Hernandez family organized
presumably for failure to find leviable assets of
another corporation, Rosario Industrial Corporation
RANSOM; although it appears that, in 1975, RANSOM
(ROSARIO, for short) which also engaged, in the
had sold machineries and equipment for P2 million to
RANSOM Compound, in the business of manufacture
Revelations Manufacturing Corporation.
of ink and products
6. 8. Directly related to this case is the last Motion for
Execution, dated December 18, 1978, filed by petitioner
 UNION wherein it asked that officers and agents of limitations has been devised to operate primarily against those
RANSOM be held personally liable for payment of the who sleep on their rights, not against those who assert their
back wages. That Motion was granted by Labor Arbiter, right but fail for causes beyond their control. The above recital
Tito F. Genilo, on March 11, 1980 (The GENILO of facts contradicts respondent’s contention that the CIR
ORDER), wherein he expressly authorized a Writ of decision of August 19, 1972 had remained dormant to require a
Execution to be issued for P164,984.00 (the back motion to revive.”
wages) against RANSOM and seven officers and
directors of the Company who are the named individual 1. (b) The second issue raised was:
respondents herein. RANSOM took an appeal to NLRC
which affirmed the GENILO ORDER, except as “IS THE JUDGMENT AGAINST A CORPORATION TO
modified in the body of its decision of July 31, 1984. REINSTATE ITS DISMISSED EMPLOYEES WITH
7. 9. In RANSOM’S appeal to the NLRC, two issues were BACKWAGES, ENFORCEABLE AGAINST ITS OFFICERS
raised: AND AGENTS, IN THEIR INDIVIDUAL, PRIVATE AND
PERSONAL CAPACITIES, WHO WERE NOT PARTIES IN
272 THE CASE WHERE THE JUDGMENT WAS RENDERED;”

272 SUPREME COURT REPORTS ANNOTATED The NLRC ruling was:

A.C. Ransom Labor Union—CCLU vs. NLRC
“As to the liability of the respondent’s officers and agents, we
agree with the contention of the respondent-appellant that there
1. (a) One of the issues was:
is nothing in the Order dated May 11, 1980 that would justify
the holding of the individual officers and agents of respondent
“THE DECISION OF THE INDUSTRIAL RELATIONS
in their personal capacity. As a general rule, officers of the
COURT HAVING BECOME FINAL AND EXECUTORY IN
corporation are not liable personally for the official acts unless
1973, IS IT ENFORCEABLE BY A WRIT OF EXECUTION
they have exceeded the scope of their authority. In the absence
ISSUED IN 1980 OR MORE THAN FIVE YEARS AFTER
of evidence showing that the officers mentioned in the Order of
THE FINALITY OF THE DECISION SOUGHT TO BE
the Labor Arbiter dated March 11, 1980 have exceeded their
ENFORCED?”
authority, the writ of execution can not be enforced against
them, especially so since they were not given a chance to be
The corresponding ruling made by NLRC was:
heard.”
“Perforce, respondent’s theory that execution proceedings must
RANSOM and the seven individual respondents in this case
stop after the lapse of five (5) years and that a motion to revive
need be filed, must fail. Suffice it to state also that the statute of
273 1. (b) How can the foregoing provisions be implemented
when the employer is a corporation? The answer is
VOL. 142, JUNE 10, 1986 273 found in Article 212 (c) of the Labor Code which
A.C. Ransom Labor Union—CCLU vs. NLRC provides:
2. “(c) ‘Employer’ includes any person acting in the
interest of an employer, directly or indirectly. The term
have not appealed from the ruling of the NLRC that Section 6, shall not include any labor organization or any of its
Rule 39, is not invocable by them in regards to the execution of officers or agents except when acting as employer.”
the decision of December 19, 1972. Hence, the issue can no
longer be raised herein. Even if the said section were
The foregoing was culled from Section 2 of RA 602, the
applicable, the 5-year period therein mentioned may not have
Minimum Wage Law. Since RANSOM is an artificial person,
expired by December 18, 1978 because the period should be
it must have an officer who can be presumed to be the
counted only from the time the back wages were determined,
employer, being the “person acting in the interest of (the)
which could have been in early 1974.
employer” RANSOM. The corporation, only in the technical
sense, is the employer.
We now come to the NLRC’s decision upholding non-personal
liabilities of the individual respondents herein for back wages
274
of the 22 strikers.

1. (a) Article 265 of the Labor Code, in part, expressly 274 SUPREME COURT REPORTS ANNOTATED
provides: A.C. Ransom Labor Union—CCLU vs. NLRC

“Any worker whose employment has been terminated as a The responsible officer of an employer corporation can be held
consequence of an unlawful lockout shall be entitled to personally, not to say even criminally, liable for non-payment
reinstatement with full back wages.” of back wages. That is the policy of the law. In the Minimum
Wage Law, Section 15(b) provided:
Article 273 of the Code provides that:
1. “(b) If any violation of this Act is committed by a
“Any person violating any of the provisions of Article 265 of corporation, trust, partnership or association, the
this Code shall be punished by a fine of not exceeding five manager or in his default, the person acting as such
hundred pesos and/or imprisonment for not less than one (1) when the violation took place, shall be responsible. In
day nor more than six (6) months.” 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 paid should also be a continuing joint and several
which case the latter shall be held responsible.” personal liabilities of all who may

In PD 525, where a corporation fails to pay the emergency 275

allowance therein provided, the prescribed penalty “shall be
imposed upon the guilty officer or officers” of the corporation. VOL. 142, JUNE 10, 1986 275
A.C. Ransom Labor Union—CCLU vs. NLRC
1. (c) If the policy of the law were otherwise, the
have thereafter succeeded to the office of president;
corporation employer can have devious ways for
otherwise,the 22 strikers may be deprived of their rights by the
evading payment of back wages. In the instant case, it
electionof a president without leviable assets.
would appear that RANSOM, in 1969, foreseeing the
possibility or probability of payment of back wages to
WHEREFORE, the questioned Decision of the National Labor
the 22 strikers, organized ROSARIO to replace
Relations Commission is SET ASIDE, and the Order of Labor
RANSOM, with the latter to be eventually phased out if
Arbiter Tito F. Genilo of March 11, 1980 is reinstated with the
the 22 strikers win their case. RANSOM actually
modification that personal liability for the back wages due the
ceased operations on May 1, 1973, after the December
22 strikers shall be limited to Ruben Hernandez, who was
19, 1972 Decision of the Court of Industrial Relations
President of RANSOM in 1974, jointly and severally with
was promulgated against RANSOM.
other Presidents of the same corporation who had been elected
2. (d) The record does not clearly identify “the officer or
as such after 1972 or up to the time the corporate life was
officers” of RANSOM directly responsible for failure to
terminated.
pay the back wages of the 22 strikers. In the absence of
definite proof in that regard, we believe it should be
presumed that the responsible officer is the President of SO ORDERED.
the corporation who can be deemed the chief operation
officer thereof. Thus, in RA 602, criminal responsibility
is with the “Manager or in his default, the person acting
as such.” In RANSOM, the President appears to be the
Manager.
3. (e) Considering that non-payment of the back wages of
the 22 strikers has been a continuing situation, it is our
opinion that the personal liability of the RANSOM
President, at the time the back wages were ordered to be