GR 150861; (January, 2008) (Digest)
G.R. No. 150861 ; January 22, 2008
AL ARELLANO, ET AL., petitioners, vs. POWERTECH CORPORATION, WILLIE CABOBOS and COURT OF APPEALS, respondents.
FACTS
Petitioners, employees of Powertech Corporation, filed a complaint for illegal dismissal and money claims. A Labor Arbiter ruled in favor of twenty petitioners, awarding them over P2.5 million. During Powertech’s appeal to the NLRC, Carlos Gestiada, acting under a broad Special Power of Attorney (SPA) executed by his co-petitioners, signed a quitclaim and release in favor of Powertech for a consideration of P150,000. Based on this, Powertech moved to withdraw its appeal, which the NLRC granted. However, Powertech’s check for P150,000 bounced. Petitioners then moved to nullify the quitclaim for lack of consideration.
The NLRC voided the quitclaim, reinstated the appeal, and ordered a new bond. Subsequently, Powertech paid Gestiada P150,000. Gestiada, with new counsel, and Powertech filed a joint motion to dismiss based on this compromise. The original counsel opposed, arguing the amount was unconscionable and covered only Gestiada’s personal claims. The NLRC denied the joint motion, finding the P150,000 was received by Gestiada solely for his own backwages, not for the collective claims of all petitioners. The Court of Appeals reversed the NLRC, upholding the validity of the quitclaim based on the SPA.
ISSUE
Whether the quitclaim and release executed by the attorney-in-fact, Carlos Gestiada, is valid and binding upon all the petitioners.
RULING
The Supreme Court reversed the Court of Appeals and reinstated the NLRC resolution. The quitclaim is invalid and not binding on the petitioners. The legal logic rests on two primary grounds. First, the purported compromise lacked consideration for the other petitioners. Gestiada himself admitted the P150,000 was payment solely for his individual backwages, not for the claims of his co-petitioners. A waiver of monetary claims is a personal right requiring the individual consent of each worker. The SPA, no matter how broad, cannot legitimize a settlement that extinguishes the distinct claims of twenty-one other individuals without their specific, personal approval and without any corresponding benefit accruing to them.
Second, while a general SPA can authorize an agent to compromise, the law requires such authority to be express. The Court found the SPA granted to Gestiada was excessively broad and unqualified, which facilitated the inequitable outcome. The Court emphasized that principals, especially workers in labor cases, must circumscribe such powers by stipulating, for instance, a minimum acceptable settlement amount or making the agent’s acts subject to the principal’s approval. This safeguards against agents settling for amounts grossly disadvantageous to the group. Here, the quitclaim, secured with a check that was initially dishonored and for a sum drastically lower than the P2.5 million judgment, was unconscionable and invalid.