G.R. No. 192318, 5 December 2016


Petitioner who won the labor case against Respondent’s company seeks to execute the decision regarding their awards. However, they still remain unpaid, hence Petitioner sought to have the decision executed not only on the properties of the company but to also include those of the respondent.

Respondent contends that he was denied due process as he was not a party to the labor case, nor was he even made aware of any part of the proceedings, denying the courts any jurisdiction over him or his assets.


Can respondent be held solidarily liable with his company?


No, He may not.

The CA properly concluded that the proceedings before the LA deprived the respondent of due process. Considering that the respondent was never impleaded as a party respondent and was never validly served with summons, the LA never acquired jurisdiction over his person. Perforce, the proceedings conducted and the decision rendered are nugatory and without effect. This utter lack of jurisdiction voids any liability of the respondent for any monetary award or judgment in favor of the petitioner.

The Court sustains the CA’s ruling that the respondent, as one of SEASUMCO’s corporate officer and stockholder, should not be held solidarily liable with the corporation for its monetary liabilities with the petitioner.

Here, the LA pierced the veil of corporate fiction of SEASUMCO and held the respondent, in his personal capacity, jointly and severally liable with the corporation for the enforcement of the monetary awards to the petitioner. Even assuming that the labor tribunals had jurisdiction over the respondent, it was still improper to hold him liable for SEASUMCO’s obligations to its employees.

An officer may not be held liable for the corporation’s labor obligations unless he acted with evident malice and/or bad faith in dismissing an employee.

“[Section 31of the Corporation Code is the governing law on personal liability of officers for the debts of the corporation. To hold a director or officer personally liable for corporate obligations, two requisites must concur:

(1) it must be alleged in the complaint that the director or officer assented to patently unlawful acts of the corporation or that the officer was guilty of gross negligence or bad faith; and
(2) there must be proof that the officer acted in bad faith.

Based on the records, the petitioner and the private respondents in the NLRC case failed to specifically allege either in their complaint or position paper that the respondent, as an officer of SEASUMCO, willfully and knowingly assented to the corporations’ patently unlawful act of closing the corporation, or that the respondent had been guilty of gross negligence or bad faith in directing the affairs of the corporation. In fact, there was no evidence at all to show the respondent’s participation in the petitioner’s illegal dismissal. Clearly, the twin requisites of allegation and proof of bad faith, necessary to hold the respondent personally liable for the monetary awards to the petitioner, are lacking.

*Case digest by Roger Angielo V. Atenta, JD-IV, Andres Bonifacio College, SY 2019-2020