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G.R. No. 163786. February 16, 2005.

* Times Transportation
TIMES TRANSPORTATION COMPANY, INC., Company, Inc. vs. Sotelo
petitioner, vs. SANTOS SOTELO, CONRADO B. TAMO, LEOPOLDO NANA, NELIE BOSE,
SALONGA, SAMSON C. SOLIVEN, BIENVENIDO F. DEMETRIO HERRERA, RODOLFO ABELLA, ALVIN
MALANA, JR., JOVITO V. ALCAUSIN, EFREN A. ELEFANTE, REDENTOR GARCIA, JERRY
RAMOS, RODRIGO P. CABUSAO, JR., EDGAR G. PALACPAC, JOSE PAET, ARTHUR IBEA, ELIZER
PONCE, RONALD ALLAN PARIÑAS, RODEL PALO, BORJA, EDMUNDO ASPIRAS, JOSE V. PESCADOR,
REYNALDO R. RAGUCOS, MARIO T. TOLEDO, WILLIAM GARCIA, ERNESTO P. MANGULABNAN,
BERNARDINO PADUA, DOMINGO P. BILAN, BENJAMIN B. BLAZA, JOSELITO P. CACABELOS,
ARNEL VALLEDORES, RAMON RETUTA, JR., LEON R. GALANTA, JR., MARIANO P. TEJADA,
PANTALEON TABANGIN, ALBERTO PANDO, PEDRITO C. ORTIZ, JR., NESTOR E. BALCITA,
VIRGILIO E. OBAR, EULOGIO D. DIGA, SR., FLOR BURBANO, HERNANDO A. PIMENTEL, ALEX
DANIEL LLADO, RONILO BALTAZAR, MARITO A. GOMEZ, ARNALDO P. BOSE, NAPOLEON
PANDO, LEOPOLDO FUNTILA, GERRY B. BALDERAS, CARLINO V. RULLODA, JR., RANDY R.
CARRIDO, WILLIAM A. TABUCOL, ANTONIO L. AMODO, CORNELIO R. RAGUINI, ROBERT CERIA,
RAMOS, SR., PABLO P. PADRE, HENRY B. GANIR, JUANITO U. UGALDE, ALBERTO PAJO, ALFREDO
TEOTIMO R. REQUILMAN, CIPRIANO ULPINDO, VALOROSO, RUFINO ADRIATICO, BARTOLOME C.
ROGER BABIDA, SAMUEL PERALTA, BONIFACIO EDROSOLAN, JR., REYNANTE A. ALCAIN,
TUMALIP, EDGAR ABLOG, EFREN ABELLA, NOELITO SUSA and VICENTE NAVA, respondents.
RODRIGO RABOY, RENATO SILVA, GEORGE
PERALTA, RONILO BARBOSA, JULIAN BUENAFE, Labor Law; Actions; Litis Pendentia; Pleadings and
Practice; Litis pendentia as a ground for dismissal of an
FLORENCIO CARIÑO, BERNIE TUMBAGA,
action refers to that situation wherein another action is
RODRIGO CABAÑERO, ELMER pending between the same parties for the same cause of action
_______________ and the second action becomes unnecessary and vexatious;
There is no litis pendentia relative to the two labor cases
* FIRST DIVISION. where one pertains to the alleged error of the NLRC in not
588
upholding the dismissal of all the striking employees in spite
of the latter’s ruling that the second strike was illegal, while
588 SUPREME COURT
the issue in the other case is the validity of the retrenchment
REPORTS implemented by the employer prior to the second strike and
ANNOTATED the subsequent dismissal of the striking employees.—Litis
pendentia as a ground for dismissal of an action refers to that
situation wherein another action is pending between the surety bond issued by a reputable bonding company duly
same parties for the same cause of action and the second accredited by the NLRC in the amount equivalent to the
action becomes unnecessary and vexatious. We agree with monetary award in the judgment appealed from. The
the findings of the Court of Appeals that there is no litis perfection of an appeal in the manner and within the period
pendentiaas the two cases involve dissimilar causes of action. prescribed by law is not only mandatory but also
The first case, now pending with the Third Division, pertains jurisdictional, and failure to perfect an appeal has the effect
to the alleged error of the NLRC in not upholding the of making the judgment final and executory. However, in
dismissal of allthe striking employees (not only of the 23 several cases, we have relaxed the rules regarding the appeal
strikers so declared to have lost their employment) in spite bond especially where it must necessarily yield to the
of the latter’s ruling that the second strike was illegal. None broader interest of substantial justice. The Rules of
of the respondents herein were among those deemed Procedure of the NLRC allows for the reduction of the appeal
terminated by virtue of the NLRC decision. In the instant bond upon motion of the appellant and on meritorious
case, the issue is the validity of the retrenchment grounds. It is required however that such motion is filed
implemented by Times prior to within the reglementary period to appeal.
589 Same; Same; To extend the period of appeal is to prolong
the resolution of the case, a circumstance which would give
VOL. 451, 589
the employer the opportunity to wear out the energy and
FEBRUARY 16, meager resources of the workers to the point that they would
2005 be constrained to give up for less than what they deserve in
Times Transportation law.—The records reveal that Times, Mencorp and the
Company, Inc. vs. Sotelo Spouses Mendoza’s motion to reduce the bond was denied
the second strike and the subsequent dismissal of the and the NLRC ordered them to post the required
striking employees. As such, there can be no question that amount within an unextendible period of ten (10) days.
respondents were still employees of Times when they were However, instead of complying with the directive, Times filed
retrenched. In short, the outcome of this case does not hinge another motion for reconsideration of the order of denial.
on the legality of the second strike or the validity of the Several weeks later, Mencorp posted an additional bond,
dismissal of the striking employees, which issues are yet to which was still less than the required amount. Three (3)
be resolved in G.R. Nos. 148500-01. Consequently, litis months after the filing of the motion for reconsideration, the
pendentia does not arise. NLRC reversed its previous order and granted the motion for
Same; Appeals; Appeal Bonds; The Supreme Court has reduction of bond. We agree with the Court of Appeals that
relaxed the rules regarding the appeal bond especially where the foregoing constitutes grave abuse of discretion on the
it must necessarily yield to the broader interest of substantial part of the
justice.—Article 223 of the Labor Code provides that in case 590
of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or
590 SUPREME asserted “inaccuracies” without specifying which aspect of
COURT REPORTS the computation was inaccurate. If Times and Mencorp truly
ANNOTATED believed that there were errors in the computation, they
could have presented their own computation for comparison.
Times Transportation As to the claim of financial difficulties, suffice it to say that
Company, Inc. vs. Sotelo the law does not require outright payment of the total
NLRC. By delaying the resolution of Times’ motion for monetary award, but only the posting of a bond to ensure
reconsideration, it has unnecessarily prolonged the period of that the award will be eventually paid should the appeal fail.
appeal. We have held that to extend the period of appeal is What Times has to pay is a moderate and reasonable sum for
to prolong the resolution of the case, a circumstance which the premium for such bond. The impression thus created was
would give the employer the opportunity to wear out the that Times, Mencorp and the Spouses Mendoza were clearly
energy and meager resources of the workers to the point that circumventing, if not altogether dodging, the rules on the
they would be constrained to give up for less than what they posting of appeal bonds.
deserve in law. The NLRC is well to take notice of our Same; Corporation Law; Piercing the Veil of Corporate
pronouncement in Santos v. Velarde: The Court is aware that Fiction; Requisites; Piercing the veil of corporate fiction is
the NLRC is not bound by the technical rules of procedure warranted only in
and is allowed to be liberal in the interpretation of rules in 591
deciding labor cases. However, such liberality should not be
applied in the instant case as it would render futile the very VOL. 451, 591
purpose for which the principle of liberality is adopted . . FEBRUARY 16,
. From the decision of the Labor Arbiter, it took the NLRC 2005
four months to rule on the “motion” for exemption to pay Times Transportation
bond and another four months to decide the merits of the Company, Inc. vs. Sotelo
case. This Court has repeatedly ruled that delay in the
cases when the separate legal entity is used to defeat
settlement of labor cases cannot be countenanced. Not only
public convenience, justify wrong, protect fraud, or defend
does it involve the survival of an employee and his loved ones
crime, such that in the case of two corporations, the law will
who are dependent on him . . ., it also wears down the meager
regard the corporations as merged into one.—We have held
resources of the workers . . . (Emphasis supplied)
that piercing the corporate veil is warranted only in cases
Same; Same; The law does not require outright payment
when the separate legal entity is used to defeat public
of the total monetary award, but only the posting of a bond to
convenience, justify wrong, protect fraud, or defend crime,
ensure that the award will be eventually paid should the
such that in the case of two corporations, the law will regard
appeal fail—what the employer has to pay is a moderate and
the corporations as merged into one. It may be allowed only
reasonable sum for the premium for such bond.—Times and
if the following elements concur: (1) control—not mere stock
Mencorp failed to substantiate their allegations of errors in
control, but complete domination—not only of finances, but
the computation of the monetary award. They merely
of policy and business practice in respect to the transaction
attacked; (2) such control must have been used to commit a 592 SUPREME COURT
fraud or a wrong to perpetuate the violation of a statutory or REPORTS
other positive legal duty, or a dishonest and an unjust act in ANNOTATED
contravention of a legal right; and (3) the said control and
breach of duty must have proximately caused the injury or
Times Transportation
unjust loss complained of. Company, Inc. vs. Sotelo
(TEU) was formed and issued a certificate of union
PETITION for review on certiorari of the decision and registration. Times challenged the legitimacy of TEU by
resolution of the Court of Appeals. filing a petition for the cancellation of its union
registration.
The facts are stated in the opinion of the Court. On March 3, 1997, TEU held a strike in response to
Cesar B. Brillantes for petitioner. Times’ alleged attempt to form a rival union and its
Saladero & Bunao Law Office for respondents. dismissal of the employees identified to be active union
members. Upon petition by Times, then Labor
YNARES-SANTIAGO, J.: Secretary, and now Associate Justice of this Court,
Leonardo A. Quisumbing, assumed jurisdiction over the
This petition for review on certiorari assails the decision
case and referred the matter to the NLRC for
of the Court of Appeals dated January 30, 2004 in CA-
compulsory arbitration. The case was docketed as
G.R. SP No. 75291, which set aside the decision and
1

NLRC NCR CC-000134-97. A return-to-work order was


resolution of the National Labor Relations Commission,
likewise issued on March 10, 1997.
and its resolution dated May 24, 2004 denying 2

In a certification election held on July 1, 1997, TEU


reconsideration thereof.
was certified as the sole and exclusive collective
Petitioner Times Transportation Company, Inc.
bargaining agent in Times. Consequently, TEU’s
(Times) is a corporation engaged in the business of land
president wrote the management of Times and
transportation. Prior to its closure in 1997, the Times
requested for collective bargaining. Times refused on
Employees Union
_______________
the ground that the decision of the Med-Arbiter
upholding the validity of the certification election was
1 Penned by Associate Justice Juan Q. Enriquez, Jr. as concurred not yet final and executory.
in by Associate Justices Roberto A. Barrios and Arsenio J. Magpale of TEU filed a Notice of Strike on August 8, 1997.
the Thirteenth Division. Rollo, pp. 50-63.
2 Rollo, p. 49.
Another conciliation/mediation proceeding was
conducted for the purpose of settling the brewing
592 dispute. In the meantime, Times’ management
implemented a retrenchment program and notices of
retrenchment dated September 16, 1997 were sent to “WHEREFORE, the respondents’ first strike, conducted
some of its employees, including the respondents from March 3, 1997 to March 12, 1997, is hereby declared
herein, informing them of their retrenchment effective LEGAL; its second strike, which commenced on October 17,
30 days thereafter. 1997, is hereby declared ILLEGAL. Consequently, those . . .
23 persons who participated in the illegal strike . . . are
On October 17, 1997, TEU held a strike vote on
deemed to have lost their employment status and were
grounds of unfair labor practice on the part of Times.
therefore validly dismissed from employment: . . .
For alleged participation in what it deemed was an The respondents’ “Motion to Implead Mencorp Transport
illegal strike, Times terminated all the 123 striking Systems, Inc. and/or Virginia Mendoza and/or Santiago
employees by virtue of two notices dated October 26, Rondaris” is hereby DENIED for lack of merit.
1997 and November 24, 1997. On November 17, 1997,
3
SO ORDERED.” 6

then DOLE Secretary Quisumbing issued the second


return-to-work order certifying the dispute to the Times and TEU both appealed the decision of the
_______________ NLRC, which the Court of Appeals affirmed on
November 17, 2000. Upon denial of its motion for
7

3 Annexes “R” and “R-1”, Rollo, pp. 138-142. reconsideration, Times filed a petition for review on
593 certiorari, docketed as G.R. Nos. 148500-01, now
8

VOL. 451, 593 pending with the Third Division of this Court. TEU
FEBRUARY 16, 2005 likewise appealed but its petition was denied due
Times Transportation course.
_______________
Company, Inc. vs. Sotelo
NLRC. While the strike was ended, the employees were 4 Deeds of Sale, Annexes “D”, “D-1” to “D-6”.
no longer admitted back to work. 5 Rollo, pp. 154-170.
6 Id., pp. 169-170.
In the meantime, by December 12, 1997, Mencorp 7 Id., pp. 171-180.

Transport Systems, Inc. (Mencorp) had acquired 8 Copy of Petition, Annex “V”, Rollo, pp. 181-214.

ownership over Times’ Certificates of Public


594
Convenience and a number of its bus units by virtue of
several deeds of sale. Mencorp is controlled and
4
594 SUPREME COURT
operated by Mrs. Virginia Mendoza, daughter of REPORTS
Santiago Rondaris, the majority stockholder of Times. ANNOTATED
On May 21, 1998, the NLRC rendered a decision in 5
Times Transportation
the cases certified to it by the DOLE, the dispositive Company, Inc. vs. Sotelo
portion of which read:
In 1998, and after the closure of Times, the retrenched held liable of the unfair labor practice herein to
employees, including practically all the respondents CEASE AND DESIST therefore (sic);
herein, filed cases for illegal dismissal, money claims 2. 2.respondents Times Transit (sic) Company, Inc.
and unfair labor practices against Times before the and/or Santiago Rondaris and Mencorp Transport
Systems Company, Inc. and/or Virginia Mendoza
Regional Arbitration Branch in San Fernando City, La
and Reynaldo Mendoza to cause the reinstatement
Union. Times filed a Motion to Dismiss but on October
therein of complainants to their former positions
30, 1998, the arbitration branch ordered the archiving without loss of seniority rights and benefits and to
of the cases pending resolution of G.R. Nos. 148500-01. 9
pay jointly and severally
The dismissed employees did not interpose an appeal
from said Order. Instead, they withdrew their _______________
complaints with leave of court and filed a new set of
Annex “X”, Rollo, pp. 221-224.
cases before the National Capital Region Arbitration
9

Branch. This time, they impleaded Mencorp and the 595


Spouses Reynaldo and Virginia Mendoza. Times sought VOL. 451, 595
the dismissal of these cases on the ground of litis FEBRUARY 16, 2005
pendentia and forum shopping. On January 31, 2002, Times Transportation
Labor Arbiter Renaldo O. Hernandez rendered a Company, Inc. vs. Sotelo
decision stating: said complainants full back wages reckoned from their
“WHEREFORE, premises considered, judgment is hereby respective dates of illegal dismissal as above-indicated, until
entered FINDING that the dismissals of complainants, actually reinstated or in lieu of such reinstatement, at the
excluding the expunged ones, by respondent Times Transit option of said complainants, payment of their separation pay
(sic) Company, Inc. effected, participated in, authorized or of one (1) month pay per year of service, reckoned from their
ratified by respondent Santiago Rondaris constituted the date of hire as above-indicated, until actual payment and/or
prohibited act of unfair labor practice under Article 248(a) finality of this decision;
and (e) of the Labor Code, as amended and hence, illegal and
that the sale of said respondent company to respondents 1. 3.and finally for respondents Times Transit (sic)
Mencorp Transport Systems Company (sic), Inc. and/or Company, Inc. and/or Santiago Rondaris to pay
Virginia Mendoza and Reynaldo Mendoza was simulated jointly and severally said complainants as moral and
and/or effected in bad faith, ORDERING: exemplary damages the combined amount of
P75,000.00 and 5% of the total award as attorney’s
1. 1.respondents Times Transit (sic) Company, Inc. and fees.
Santiago Rondaris as the officer administratively All other claims of complainants are dismissed for
lack of merit. 596 SUPREME COURT
... REPORTS
ANNOTATED
SO ORDERED.” 10

Times Transportation
The monetary award amounted to P43,347,341.69. On Company, Inc. vs. Sotelo
March 4, 2002, Times, Mencorp and the Spouses bond. Thus far, the total amount of bond posted was P15
Mendoza submitted their respective memorandum of million. On August 7, 2002, the NLRC granted the
appeal to the NLRC with motions to reduce the bond. Motion for Reduction of Bond and approved the P10
Mencorp posted a P5 million bond issued by Security million additional appeal bond. 12

Pacific Assurance Corp. (SPAC). On April 30, 2002, the On September 17, 2002, the NLRC rendered its
NLRC issued an order disposing of the said motion, decision, stating:
thus: “WHEREFORE, the foregoing premises duly considered, the
“WHEREFORE, premises considered, the Urgent Motion for decision appealed from is hereby VACATED. The records of
Reduction of Bond is denied for lack of merit. Respondents these consolidated cases are hereby ordered REMANDED to
are hereby ordered to complete the bond equivalent to the the Arbitration Branch of origin for disposition and for the
monetary award in the Labor Arbiter’s Decision, within an conduct of appropriate proceedings for a decision to be
unextendible period of ten (10) days from receipt hereof, rendered with dispatch.
otherwise, the appeal shall be dismissed for non-perfection SO ORDERED.” 13

thereof.
SO ORDERED.” 11
Reconsideration thereof was denied by the NLRC on
October 30, 2002. Thus, the respondents appealed to the
On May 18, 2002, Times moved to reconsider said order Court of Appeals by way of a petition for certiorari,
arguing mainly that it did not have sufficient funds to attributing grave abuse of discretion on the NLRC for:
put up the required bond. On July 26, 2002, Mencorp (1) not dismissing the appeals of Times, Mencorp and
and the Spouses Mendoza posted an additional P10 the Spouses Mendoza despite their failure to post the
million appeal required bond; (2) remanding the case for further
_______________ proceedings despite the sufficiency of the evidence
10 Rollo, pp. 259-260.
presented by the parties; (3) not sustaining the labor
11 Id., p. 279. arbiter’s ruling that they were illegally dismissed; (4)
not affirming the labor arbiter’s ruling that there was
596
no litis pendentia; and (5) not ruling that Times and
Mencorp are one and the same entity.
On January 30, 2004, the Court of Appeals rendered herein petitioners hitherto lost their right to
the decision now assailed in this petition, the decretal appeal to the NLRC on account of their
portion of which states: purported failure to post an adequate appeal
“WHEREFORE, based on the foregoing, the instant petition bond, radically departed from the accepted and
is hereby GRANTED. The assailed Decision and Resolution usual course of judicial proceedings, not to
of the NLRC are hereby SET ASIDE. The Decision of the mention resolved said issue in a manner and
Labor Arbiter dated January 31, 2002 is hereby fashion antithetical to existing jurisprudence.
REINSTATED.
3. III.Petitioner, furthermore, respectfully
SO ORDERED.” 14

maintains that the Honorable Court a quo, in


_______________ applying wholesale the doctrine of piercing the
veil of corporate fiction and finding Times’ co-
12 Id., p. 313.
13 Id., p. 334. petitioners liable for the former’s obligations,
14 Id., p. 62. resolved the matter in a manner contradictory
to existing applicable laws and dispositions of
597
VOL. 451, 597 this Honorable Court, and departed from the
accepted and usual course of judicial
FEBRUARY 16, 2005
proceedings with regard to admitting evidence
Times Transportation
to sustain the application of such principle.15

Company, Inc. vs. Sotelo


Times, Mencorp and the Spouses Mendoza filed Motions The petition lacks merit.
for Reconsideration, which were denied in a resolution As to the first issue, Times argues that there exists
promulgated on May 24, 2004. Hence, this petition for an identity of issues, rights asserted, relief sought and
review based on the following grounds: causes of action between the present case and the one
concerning the legality of the second strike, which is
1. I.Petitioner respectfully maintains that the now pending with the Third Division of this Court. As
Honorable Court a quo, in not dismissing the such, the Court of Appeals erred in not dismissing the
complaints against the petitioner on the ground case at bar on the ground of litis pendentia.
of lis pendens, decided the matter in a way not _______________
in accord with existing laws and applicable
decisions of this Honorable Court. 15 Id., pp. 33-34.
2. II.Petitioner, further, respectfully maintains that 598
the Honorable Court a quo, in determining that
598 SUPREME COURT comply with the statute or rules. The rules for
REPORTS perfecting an appeal must be strictly followed as they
ANNOTATED are considered indispensable interdictions against
Times Transportation needless delays and for orderly discharge of judicial
Company, Inc. vs. Sotelo business. Section 3(a), Rule VI of the NLRC Rules of
17

Litis pendentia as a ground for dismissal of an action Procedure outlines the requisites for perfecting an
refers to that situation wherein another action is appeal, to wit:
_______________
pending between the same parties for the same cause of
action and the second action becomes unnecessary and 16 University Physicians Services, Inc. v. Court of Appeals, 381 Phil.

vexatious. We agree with the findings of the Court of


16 54, 67; 324 SCRA 52, 61 (2000).
17 Corporate Inn Hotel v. Lizo, G.R. No. 148279, 27 May 2004, 429
Appeals that there is no litis pendentia as the two cases
SCRA 573.
involve dissimilar causes of action. The first case, now
pending with the Third Division, pertains to the alleged 599
error of the NLRC in not upholding the dismissal VOL. 451, 599
of all the striking employees (not only of the 23 strikers FEBRUARY 16, 2005
so declared to have lost their employment) in spite of Times Transportation
the latter’s ruling that the second strike was illegal. Company, Inc. vs. Sotelo
None of the respondents herein were among those SECTION 3. Requisites for Perfection of Appeal.—a) The
deemed terminated by virtue of the NLRC decision. Appeal shall be filed within the reglementary period as
In the instant case, the issue is the validity of the provided in Section 1 of this Rule and shall be under oath
retrenchment implemented by Times prior to the second with proof of payment of the required appeal fee and the
strike and the subsequent dismissal of the striking posting of a cash or surety bond as provided in Section 6 of
employees. As such, there can be no question that this Rule; shall be accompanied by memorandum of appeal
which shall state the grounds relied upon and the arguments
respondents were still employees of Times when they
in support thereof; the relief prayed for and a statement of
were retrenched. In short, the outcome of this case does the date when the appellant received the appealed decision,
not hinge on the legality of the second strike or the order or award and proof of service on the other party of such
validity of the dismissal of the striking employees, appeal.
which issues are yet to be resolved in G.R. Nos. 148500- A mere notice of appeal without complying with the other
01. Consequently, litis pendentiadoes not arise. requisites aforestated shall not stop the running of the period
Anent the issue on whether Times perfected its for perfecting an appeal. (Emphasis supplied)
appeal to the NLRC, the right to appeal is a statutory
right and one who seeks to avail of the right must
Article 223 of the Labor Code provides that in case of a Times Transportation
judgment involving a monetary award, an appeal by the Company, Inc. vs. Sotelo
employer may be perfected only upon the posting of a allows for the reduction of the appeal bond upon motion
cash or surety bond issued by a reputable bonding of the appellant and on meritorious grounds. It is
20

company duly accredited by the NLRC in the amount required however that such motion is filed within the
equivalent to the monetary award in the judgment reglementary period to appeal.
appealed from. The perfection of an appeal in the The records reveal that Times, Mencorp and the
manner and within the period prescribed by law is not Spouses Mendoza’s motion to reduce the bond was
only mandatory but also jurisdictional, and failure to denied and the NLRC ordered them to post the required
perfect an appeal has the effect of making the judgment amount within an unextendible period of ten (10)
final and executory. However, in several cases, we have
18
days. However, instead of complying with the directive,
21

relaxed the rules regarding the appeal bond especially Times filed another motion for reconsideration of the
where it must necessarily yield to the broader interest order of denial. Several weeks later, Mencorp posted an
of substantial justice. The Rules of Procedure of the
19
additional bond, which was still less than the required
NLRC amount. Three (3) months after the filing of the motion
_______________ for reconsideration, the NLRC reversed its previous
18 Buenaobra v. Lim King Guan, G.R. No. 150147, 20 January order and granted the motion for reduction of bond.
2004, 420 SCRA 359, 364. We agree with the Court of Appeals that the
19 Where the labor arbiter’s decision failed to state the exact total
foregoing constitutes grave abuse of discretion on the
amount due which would be the basis of the bond (Your Bus Line v. part of the NLRC. By delaying the resolution of Times’
National Labor Relations Commission, G.R. No. 93381, 28 September
1990, 190 SCRA 160; Rada v. National Labor Relations motion for reconsideration, it has unnecessarily
Commission, G.R. No. 96078, 9 January 1992, 205 SCRA 69); where prolonged the period of appeal. We have held that to
the labor arbiter included moral and exemplary damages in the extend the period of appeal is to prolong the resolution
computation of the appeal bond (Erectors, Inc. v. National Labor
of the case, a circumstance which would give the
Relations Commission, G.R. No. 93690, 10 October 1991, 202 SCRA
597); where it was deemed that there was substantial compliance with employer the opportunity to wear out the energy and
the filing of the appeal and a bond though in an amount less meager resources of the workers to the point that they
600
would be constrained to give up for less than what they
600 SUPREME COURT deserve in law. The NLRC is well to take notice of our
22

REPORTS pronouncement in Santos v. Velarde: 23

_______________
ANNOTATED
than the proper appeal bond (Coral Point Development Corporation completing the appeal bond. Neither ground is well-
v. National Labor Relations Commission, 383 Phil. 456; 326 SCRA
554 [2000]).
taken.
20 Section 6, Rule VI. Times and Mencorp failed to substantiate their
21 Rollo, pp. 278-279. allegations of errors in the computation of the monetary
22 Globe General Services and Security Agency v. National Labor
award. They merely asserted “inaccuracies” without
Relations Commission, 319 Phil. 531, 537; 249 SCRA 408, 414 (1995).
23 G.R. No. 140753, 30 April 2003, 402 SCRA 321.
specifying which aspect of the computation was
inaccurate. If Times and Mencorp truly believed that
601 there were errors in the computation, they could have
VOL. 451, 601 presented their own computation for comparison. As to
FEBRUARY 16, 2005 the claim of financial difficulties, suffice it to say that
Times Transportation the law does not require outright payment of the total
Company, Inc. vs. Sotelo monetary award, but only the posting of a bond to
The Court is aware that the NLRC is not bound by the ensure that the award will be eventually paid should
technical rules of procedure and is allowed to be liberal in the the appeal fail. What Times has to pay is a moderate
interpretation of rules in deciding labor cases. However, such and reasonable sum for the premium for such bond. The 25

liberality should not be applied in the instant case as it would impression thus created was
render futile the very purpose for which the principle of _______________
liberality is adopted . . . From the decision of the Labor
Arbiter, it took the NLRC four months to rule on the “motion” 24Id., p. 329.
for exemption to pay bond and another four months to decide 25Biogenerics Marketing and Research Corporation v. National
the merits of the case. This Court has repeatedly ruled that Labor Relations Commission, 372 Phil. 653, 661; 313 SCRA 748, 755
delay in the settlement of labor cases cannot be (1999).
countenanced. Not only does it involve the survival of an 602
employee and his loved ones who are dependent on him . . ., 602 SUPREME COURT
it also wears down the meager resources of the workers . . REPORTS
. (Emphasis supplied)
24

ANNOTATED
The NLRC’s reversal of its previous order of denial lacks Times Transportation
basis. In the first motion, Mencorp and Spouses Company, Inc. vs. Sotelo
Mendoza moved for the reduction of the appeal bond on that Times, Mencorp and the Spouses Mendoza were
the ground that the computation of the monetary award clearly circumventing, if not altogether dodging, the
was highly suspicious and anomalous. In their motion rules on the posting of appeal bonds.
for reconsideration of the NLRC’s denial, Mencorp and On the propriety of the piercing of the corporate veil,
the Spouses Mendoza cited financial difficulties in Times claims that “to drag Mencorp, [Spouses] Mendoza
and Rondaris into the picture on the purported ground 28R & E Transport, Inc. v. Latag, G.R. No. 155214, 13 February
2004, 422 SCRA 698 citing Philippine National Bank & National
that a fictitious sale of Times’ assets in their favor was Sugar Development Corporation v. Andrada Electric & Engineering
consummated with the end in view of frustrating the Company, G.R. No. 142936, 17 April 2002, 381 SCRA 244, 255.
ends of justice and for purposes of evading compliance
603
with the judgment is . . . the height of judicial
VOL. 451, 603
arrogance.” The Court of Appeals believes otherwise
26

and reckons that Times and Mencorp failed to adduce


FEBRUARY 16, 2005
evidence to refute allegations of collusion between Times Transportation
them. Company, Inc. vs. Sotelo
We have held that piercing the corporate veil is The following findings of the Labor Arbiter, which were
warranted only in cases when the separate legal entity cited and affirmed by the Court of Appeals, have not
is used to defeat public convenience, justify wrong, been refuted by Times, to wit:
protect fraud, or defend crime, such that in the case of
two corporations, the law will regard the corporations 1. 1.The sale was transferred to a corporation
as merged into one. It may be allowed only if the
27
controlled by V. Mendoza, the daughter of
following elements concur: (1) control—not mere stock respondent S. Rondaris of [Times] where she
control, but complete domination—not only of finances, is/was also a director, as proven by the articles
but of policy and business practice in respect to the of incorporation of [Mencorp];
transaction attacked; (2) such control must have been 2. 2.All of the stockholders/incorporators of
used to commit a fraud or a wrong to perpetuate the [Mencorp]: Reynaldo M. Mendoza, Virginia R.
violation of a statutory or other positive legal duty, or a Mendoza, Vernon Gerard R. Mendoza, Vivian
dishonest and an unjust act in contravention of a legal Charity R. Mendoza, Vevey Rosario R. Mendoza
right; and (3) the said control and breach of duty must are all relatives of respondent S. Rondaris;
have proximately caused the injury or unjust loss 3. 3.The timing of the sale evidently was to negate
complained of. 28
the employees/complainants/members’ right to
_______________ organization as it was effected when their union
(TEU) was just organized/requesting [Times] to
26Petition, Rollo, p. 41. bargain;
27Velarde v. Lopez, Inc., G.R. No. 153886, 14 January 2004, 419
SCRA 422, 431; see also Gala v. Ellice Agro-Industrial ...
Corporation, G.R. No. 156819, 11 December 2003, 418 SCRA 431, 4. 5.[Mencorp] never obtained a franchise since its
446; Retuya v. Dumarpa, G.R. No. 148848, 5 August 2003, 408 SCRA supposed incorporation in 10 May 1994 but at
315, 327. present, all the buses of [Times] are already
being run/operated by respondent [Mencorp], Petition denied, judgment and resolution affirmed.
the franchise of [Times] having been transferred Notes.—The requisites of lis pendens as a ground for
to it.29 dismissal of a complaint are: (1) identity of parties or at
least such representing the same interest in both
We uphold the findings of the labor arbiter and the actions; (2) identity of rights asserted as prayed for, the
Court of Appeals. The sale of Times’ franchise as well as relief being founded on the same facts; and (3) the
most of its bus units to a company owned by Rondaris’ identity in both cases is such that the judgment that
daughter and family members, right in the middle of a may be rendered in the pending case, regardless of
labor dispute, is highly suspicious. It is evident that the which party is successful, would amount to res
transaction was made in order to remove Times’ judicata to the other case. (Atienza vs. Court of
remaining assets from the reach of any judgment that Appeals, 232 SCRA 737[1994])
may be rendered in the unfair labor practice cases filed Where judgment in either of two cases will not
against it. necessarily foreclose the other on the basis of res
WHEREFORE, premises considered, the petition is judicata there can be no dismissal on account of litis
DENIED. The decision of the Court of Appeals in CA- pendentia. (Yu vs. Court of Appeals, 232 SCRA
G.R. SP No. 75291 dated January 30, 2004 and its 594[1994])
resolution dated May 24, 2004, are hereby
AFFIRMED in toto. ——o0o——
_______________

29 Rollo, pp. 257-258.

604
604 SUPREME COURT
REPORTS
ANNOTATED
Times Transportation
Company, Inc. vs. Sotelo
SO ORDERED.
Davide, Jr. (C.J.,
Chairman), Carpio and Azcuna, JJ., concur.
Quisumbing, J., No Part, due prior action in
DOLE.