Supervening events

Supervening events include matters that the parties were unaware of before or during trial as they were not yet existing during that time.

In a case for illegal dismissal filed by respondents Edilberto Lequin and three others against petitioners Dutch Movers Inc. (DMI) and/or spouses Cesar Lee and Yolanda Lee, the National Labor Relations Commission (NLRC) found for the former. The NLRC decision became final and executory. Consequently, respondents filed a motion for writ of execution. Pending its resolution, they filed a manifestation and motion to implead stating that upon investigation, they discovered that DMI no longer operates. They averred that petitioners Cesar Lee and Yolanda Lee who managed and operated DMI consistently represented to them that they were its owners.

The Labor Arbiter (LA) issued an order holding petitioners liable for the judgment awards. Petitioners moved to quash the writ of execution, contending that the order was void because the LA has no jurisdiction to modify the final and executory NLRC decision. The motion was denied. The NLRC reversed the LA. The Court of Appeals (CA) in turn reversed the NLRC and affirmed the writ of execution issued by the LA.

Did the CA commit a reversible error?

Ruling: No.

To begin with, the Court is not a trier of facts and only questions of law may be raised in a petition under Rule 45 of the Rules of Court. This rule, nevertheless, allows certain exceptions, which include such instance where the factual findings of the CA are contrary to those of the lower court or tribunal. Considering the divergent factual findings of the CA and the NLRC in this case, the Court deems it necessary to examine, review and evaluate anew the evidence on record.

Moreover, after a thorough review of the records, the Court finds that contrary to petitioners’ claim, Valderrama v. National Labor Relations Commission, 326 Phil. 477 (1996) and David v. Court of Appeals, 375 Phil. 177 (1999) are applicable here. In said cases, the Court held that the principle of immutability of judgment, or the rule that once a judgment has become final and executory, the same can no longer be altered or modified and the court’s duty is only to order its execution, is not absolute. One of its exceptions is when there is a supervening event occurring after the judgment becomes final and executory, which renders the decision unenforceable.

To note, a supervening event refers to facts that transpired after a judgment has become final and executory, or to new situation that developed after the same attained finality. Supervening events include matters that the parties were unaware of before or during trial as they were not yet existing during that time.

In Valderrama, the supervening event was the closure of Commodex, the company therein, after the decision became final and executory, and without any showing that it filed any proceeding for bankruptcy. The Court held that therein petitioner, the owner of Commodex, was personally liable for the judgment awards because she controlled the company.

Similarly, supervening events transpired in this case after the NLRC decision became final and executory, which rendered its execution impossible and unjust. Like in Valderrama, during the execution stage, DMI ceased its operation, and the same did not file any formal notice regarding it. Added to this, in their opposition to the motion to implead, spouses Smith revealed that they only lent their names to petitioners, and they were included as incorporators just to assist the latter in forming DMI; after such undertaking, spouses Smith immediately transferred their rights in DMI to petitioners, which proved that petitioners were the ones in control of DMI, and used the same in furthering their business interests. (Del Castillo, J., SC 1st Division, Dutch Movers, Inc., et.al. vs. Edilberto Lequin, et.al., G.R. No. 210032, April 25, 2017).