G.R. No. 197074 . September 12, 2018.
CITIBANK, N.A., Petitioner, vs. PRISCILA B. ANDRES AND PEDRO S. CABUSAY, JR., Respondents.

FACTS

Respondents Priscila Andres and Pedro Cabusay, Jr., employees of Citibank, N.A., were investigated for alleged irregularities in the SpeedCollect Unit. Faced with the prospect of termination and a report to the Bangko Sentral ng Pilipinas, they submitted resignation letters. They subsequently filed a complaint for constructive dismissal. The Labor Arbiter dismissed the complaint, but the NLRC First Division reversed this, ruling in favor of the respondents in its October 20, 2005 Decision. Petitioner’s motion for reconsideration was denied by the NLRC First Division in a Resolution dated December 28, 2007. A copy of this Resolution was mailed to petitioner’s counsel of record, PECABAR, on February 15, 2008. Meanwhile, new collaborating counsel, RMBSA, had entered its appearance on January 25, 2008, and PECABAR formally withdrew on February 19, 2008. An Entry of Judgment was issued on April 18, 2008.
Upon respondents’ motion for execution, petitioner filed an urgent motion to set aside finality of judgment, claiming it was denied due process as its new counsel, RMBSA, did not receive copies of the December 2007 Resolution, the Entry of Judgment, or a Notice of Hearing. The NLRC Second Division granted petitioner’s motion, setting aside the finality of the judgment. The Court of Appeals, however, annulled the NLRC Second Division’s ruling, reinstating the final and executory status of the NLRC First Division’s Decision. The CA held that service upon the counsel of record, PECABAR, was valid and binding upon petitioner.

ISSUE

Whether the service of the NLRC First Division’s December 28, 2007 Resolution upon the former counsel of record, PECABAR, constituted valid service that bound the petitioner and rendered the decision final and executory.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The service of the December 28, 2007 Resolution upon PECABAR, the counsel of record at that time, was valid and effective. Notice to counsel is notice to the client. The entry of appearance by a new collaborating counsel does not automatically terminate the authority of the original counsel of record. For the substitution of counsel to be effective, there must be a formal withdrawal of appearance by the original counsel and a formal entry of appearance by the new counsel, duly communicated to the tribunal and the adverse party. Here, PECABAR was still the counsel of record when the Resolution was served on February 15, 2008. Its subsequent withdrawal four days later did not retroactively invalidate the prior service. Petitioner’s claim of non-receipt by its new counsel is immaterial, as the binding service was correctly made upon its counsel of record. Consequently, the period to appeal lapsed, and the NLRC First Division’s Decision became final and executory. The NLRC Second Division gravely abused its discretion in setting aside the final judgment based on an invalid claim of denial of due process. The Court emphasized the importance of the finality of judgments and the rule that a client is bound by the actions, or inaction, of its counsel.