G.R. No. 81830 October 1, 1990
Raymundo Hipolito, Jr., in his capacity as President and Chief Executive of San Miguel Corporation Employees Union (SMCEU) and Rodolfo Destura, Union Treasurer, petitioners, vs. Hon. Pura Ferrer-Calleja, Bureau of Labor Relations Director, Department of Labor and Employment, Manila, Hon. Edgardo De La Cruz, Med-Arbiter, National Capital Region, Department of Labor and Employment, Manila and Daniel L. Borbon II, respondents.

FACTS

Petitioners Raymundo Hipolito, Jr. and Rodolfo Destura, as President and Treasurer of the San Miguel Corporation Employees Union (SMCEU-PTGWO), were charged by private respondent Daniel Borbon II, a union member, with several illegal acts. These included Borbon’s arbitrary expulsion from the union, the illegal appointment of Destura as treasurer, and the unilateral appointment and payment of P130,000 in attorney’s fees to Atty. Raymundo Hipolito III, the president’s son, without proper board approval. The Med-Arbiter declared Borbon’s expulsion invalid and ordered his reinstatement but considered the payment to Atty. Hipolito as legal for services rendered. Both parties appealed to the Bureau of Labor Relations (BLR).
The BLR Director affirmed the invalidity of Borbon’s expulsion but modified the Med-Arbiter’s order by directing petitioners to return the P130,000 to the union coffers, finding the payment illegal due to the lack of a board resolution authorizing the appointment and compensation of Atty. Hipolito as union counsel. Petitioners elevated the case to the Supreme Court, contesting both the reinstatement order and the directive to return the attorney’s fees.

ISSUE

The issues for resolution are: (1) Whether public respondent committed grave abuse of discretion in affirming that private respondent was illegally dismissed from the union; and (2) Whether the order for petitioners to return the P130,000 paid as attorney’s fees was proper.

RULING

The Supreme Court affirmed the BLR’s decision regarding Borbon’s reinstatement but set aside the order to return the attorney’s fees. On the first issue, the Court found no grave abuse of discretion. The evidence, including a certification from San Miguel Corporation and prior related Supreme Court resolutions, conclusively established that Borbon was a rank-and-file employee, not a supervisor. Therefore, his expulsion from the union, which was based on an alleged supervisory status, was invalid as it violated the union’s own constitution and by-laws and was unsupported by the facts.
On the second issue, the Court ruled that while Atty. Hipolito’s appointment lacked a formal board resolution, the union board’s subsequent actions ratified his representation. The board members, including Borbon, signed documents and a Memorandum of Agreement related to CBA negotiations where Atty. Hipolito acted as counsel, and the union benefited from his services, which resulted in a favorable collective bargaining agreement. Consequently, the principle of quantum meruit applied. Considering the extensive services rendered, including travel, prolonged negotiations, strike preparations, and the substantial benefits secured for the union members, the Court deemed the P130,000 fee reasonable compensation. Thus, petitioners were not required to return the amount to the union funds.