G.R. No. 240810. February 28, 2022.
GLORIA PAJE, LOLITA GOMEZ, MIRIAM CATACUTAN, ESTRELLA ZAPATA, GLORIA SUMANG, JUANITA JULIETA DINGAL, MYRA AMANTE, AND FE S. BERNARDO, PETITIONERS, VS. SPIC N’ SPAN SERVICE CORPORATION, RESPONDENT.

FACTS

Petitioners were merchandisers for Swift Foods, Inc. (Swift) but were hired and assigned by respondent Spic N’ Span Service Corporation, a labor contractor. On March 13, 1998, petitioners filed a complaint for illegal dismissal with money claims against both Swift and Spic N’ Span. The labor arbiter initially dismissed petitioners’ complaint but held Swift and Spic N’ Span jointly and severally liable for the claims of two other co-complainants. The National Labor Relations Commission (NLRC) later held that Spic N’ Span was the true employer and dismissed the complaint against Swift. The Court of Appeals reversed the NLRC, reinstated the complaint, and remanded the case to the labor arbiter for computation of petitioners’ money claims (backwages, separation pay, and service incentive leave pay). This Court affirmed the Court of Appeals’ decision with an additional award of nominal damages.
Pending appeal, on September 18, 2008, Swift paid petitioners the amount of P3,588,785.30, which represented exactly half of the total computed money claims of P7,177,570.60. Petitioners executed a Quitclaim and Release in favor of Swift upon receipt. After this Court’s decision became final, petitioners moved for a writ of execution against Spic N’ Span for the balance. The labor arbiter issued a partial writ, but upon Spic N’ Span’s motion, quashed it, ruling that the quitclaim in favor of Swift also extinguished Spic N’ Span’s liability. The NLRC and the Court of Appeals affirmed, holding that the quitclaim redounded to Spic N’ Span’s benefit pursuant to Article 1217 of the Civil Code on solidary obligations.

ISSUE

Whether the quitclaim executed by petitioners in favor of Swift Foods, Inc. operates to discharge respondent Spic N’ Span Service Corporation, as a solidary debtor, from its liability for the remaining balance of petitioners’ money claims.

RULING

No. The quitclaim does not discharge Spic N’ Span from its liability for the unpaid balance. The Court ruled that while Swift and Spic N’ Span were held jointly and severally liable as solidary debtors, the quitclaim executed by petitioners was a remission or condonation of the obligation, not a payment. Under Article 1217 of the Civil Code, remission made by the creditor concerning the share of one solidary debtor benefits the others only for that share, unless the remission was expressly granted to all the debtors. The Quitclaim and Release was explicitly and exclusively in favor of Swift Foods, Inc. and/or its officers. There was no mention of Spic N’ Span. Therefore, the remission pertained only to Swift’s share of the solidary obligation. Consequently, Spic N’ Span remains liable for the unpaid half of the total adjudged money claims. The Court reversed the Court of Appeals and reinstated the partial writ of execution against Spic N’ Span for the balance.