GR 175366; (August, 2008) (Digest)
G.R. No. 175366 ; August 11, 2008
J-PHIL MARINE, INC., JESUS CANDAVA, and NORMAN SHIPPING SERVICES, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and WARLITO E. DUMALAOG, respondents.
FACTS
Warlito Dumalaog, a cook on overseas vessels, filed a complaint against petitioners J-Phil Marine, Inc., its president, and its foreign principal for various monetary claims, including disability benefits, alleging he suffered heart and thyroid ailments from his duties. The Labor Arbiter dismissed the complaint, but the NLRC reversed the decision and awarded Dumalaog US$50,000 in disability benefits. Petitioners’ subsequent petition for certiorari at the Court of Appeals was dismissed on procedural grounds.
During the pendency of the petitioners’ Petition for Review on Certiorari before the Supreme Court, Dumalaog, against his counsel’s advice, voluntarily entered into a compromise agreement with petitioners. He executed a Quitclaim and Release, subscribed before a Labor Arbiter, accepting P450,000 as full settlement. Petitioners filed a Manifestation informing the Court of this settlement. Dumalaog’s counsel, however, filed an opposition, not objecting to the dismissal of the petition but arguing the settlement amount was unconscionably low compared to the NLRC award and praying, invoking parens patriae, that the Court order payment of the balance.
ISSUE
Whether the compromise agreement and quitclaim executed by Dumalaog are valid and binding, thereby warranting the dismissal of the petition.
RULING
Yes, the compromise agreement is valid and binding, and the petition is dismissed. Article 227 of the Labor Code provides that a voluntarily agreed compromise settlement is final and binding upon the parties, and courts shall not assume jurisdiction except in cases of non-compliance or if prima facie evidence shows it was obtained through fraud, misrepresentation, or coercion. The Court applied Article 2037 of the Civil Code suppletorily, which grants a compromise the effect of res judicata.
The compromise is valid as Dumalaog signed the quitclaim voluntarily with full understanding, and the consideration was received. The presence of counsel is not a requirement for validity, as established in Eurotech Hair Systems, Inc. v. Go; personal and specific consent suffices. The fact that the document was subscribed before a Labor Arbiter bolsters its regularity. The objection raised by Dumalaog’s counsel regarding the alleged unconscionability of the amount cannot be sustained. Only the client-principal, Dumalaog, can impugn the agreement on such grounds. An attorney acts as an agent, and their acts bind the principal only within the scope of authority. By entering into the compromise himself, Dumalaog effectively superseded his counsel’s authority on the matter of settlement. There is no evidence of fraud intended to deprive the counsel of fees, which were separately acknowledged for payment. Consequently, the binding compromise terminates the dispute.