G.R. No. L-17775; February 28, 1963
Jaime Villafuerte, petitioner-appellee, vs. Elias T. Marfil, Deputy Sheriff of Quezon City, Julian E. Estella, Hearing Officer of Regional Office 3, Department of Labor and Gorgonia Quijano, respondents-appellants.

FACTS

Gorgonia Quijano filed a complaint for unpaid wages against Jaime Villafuerte before Regional Office 3 of the Department of Labor. During proceedings, Villafuerte, to avoid distraction from his duties, consented to a settlement of P200. However, the labor attorney refused a postal money order, insisting on cash. A subsequent hearing was set, which Villafuerte failed to attend due to a mandatory staff conference, sending a representative to request postponement. Hearing Officer Julian E. Estella denied the request, declared Villafuerte in default, and later rendered a judgment ordering payment.
Villafuerte moved to set aside the default judgment and appealed to the Labor Standards Commission. The hearing officer initially allowed the appeal but later dismissed it upon a motion arguing a party in default loses standing. After Villafuerte’s petition for relief was denied, the hearing officer granted execution of the judgment. To enjoin this, Villafuerte filed a petition for a writ of preliminary injunction in the Court of First Instance of Rizal, which was granted. The parties subsequently submitted the case for judgment based on a stipulation of facts.

ISSUE

The sole issue is whether the provisions of Reorganization Plan No. 20-A, particularly Section 25, which grants regional offices of the Department of Labor original and exclusive jurisdiction over money claims like unpaid wages, are valid.

RULING

The Supreme Court affirmed the trial court’s judgment, declaring the labor regional office’s judgment null and void and enjoining its execution. The legal logic is grounded in the settled doctrine of separation of powers and the constitutional limits on executive authority. Reorganization Plan No. 20-A was promulgated by the Executive branch. By granting the Department of Labor’s regional offices original and exclusive jurisdiction to hear and decide money claims, the Plan effectively conferred judicial power upon an administrative body. Judicial power, under the Constitution, is vested solely in the Supreme Court and such lower courts as may be established by law.
The Court, citing its prior rulings in Corominas, Jr. vs. Labor Standards Commission, De Vera vs. Supitran, and Davao Far Eastern Commercial Co. vs. Montemayor, held that the Plan was an invalid exercise of executive power, as it encroached upon the legislative prerogative to define the jurisdiction of courts. Since the regional office derived its authority from a void plan, it acted without jurisdiction. Consequently, all proceedings undertaken, including the default judgment against Villafuerte, were null and void for lack of a competent tribunal. The injunction against the execution of that judgment was therefore proper.