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GR No 154295
GR No 154295
154295
lawphil.net/judjuris/juri2005/jul2005/gr_154295_2005.html
SECOND DIVISION
DECISION
TINGA, J.:
At issue in this Petition for Review1 on certiorari under Rule 45 is whether or not lack of
jurisdiction over the subject matter of the case, heard and decided by the labor arbiter,
may be raised for the first time before the National Labor Relations Commission (NLRC)
by a litigant who had actively participated in the proceedings, which it belatedly
questioned.
In May 1998, he obtained a loan from one of the dealers whom he dealt with, Gloria A. de
Manuel (De Manuel), amounting to Nine Thousand Pesos (₱9,000.00). After paying One
Thousand One Hundred Twenty-five Pesos (₱1,125.00), respondent reneged on the
balance of his loan. De Manuel wrote a letter dated 6 July 1998 to petitioner, and seeking
assistance for collection on the remainder of the loan. She claimed that when
respondent became remissed on his personal obligation, he stopped collecting
periodically the outstanding dues of De Manuel2
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On 9 July 1998, petitioner sent a letter addressed to respondent, requiring an explanation
for the transaction with De Manuel, as well as for his failure to pay back the loan
according to the conditions agreed upon. In his reply letter3 dated 13 July 1998,
respondent admitted having incurred the loan, but offered no definitive explanation for
his failure to repay the same.
On September 7, 1998, he was handed the Payroll Change Advice 7 (PCA), indicating his
new assignment to the Traffic and Order Department of Metromedia. Nonetheless,
respondent stopped reporting for work. On 16 September 1998, he sent a letter8 to
petitioner communicating his refusal to accept the transfer.
WHEREFORE, the respondents are hereby ordered to reinstate the complainant to his
former position, with full backwages from the time his salary was withheld until he is
actually reinstated. As of this date, the complainant’s backwages has reached the sum of
₱97,324.17. The respondents are further directed to pay the complainant his 13th month
pay for 1998 in the sum of ₱3,611.89. The claims for allowance and unpaid commission
are dismissed for lack of sufficient basis to make an award.
SO ORDERED.10
Petitioner lodged an appeal with the NLRC, raising as a ground the lack of jurisdiction of
the labor arbiter over respondent’s complaint. Significally, this issue was not raised by
petitioner in the proceedings before the Labor Arbiter. In its Decision11 dated 16 March
2001, the NLRC reversed the Labor Arbiter on the ground that thee latter had no
jurisdiction over the case, it being a grievance issue properly cognizable by the voluntary
arbitrator. The decretal portion of the NLRC Decision reads:
WHEREFORE, the decision under review is REVERSED and SET ASIDE, and a new one
entered, DISMISSING the complaint for lack of jurisdiction.
SO ORDERED. 12
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The motion for reconsideration having been denied on 18 May 2001, respondent
elevated the case before the Court of Appeals (CA) through a petition for certiorari13
under Rule 65.
The CA Fifteenth Division reversed the Decision of NLRC, and reinstated the earlier ruling
of the Labor Arbiter. Adopting the doctrines by this Court in the cases of Alfredo Marquez
v. Sec. of Labor14 and ABS-CBN Supervisors Employees Union Members v. ABS-CBN
Broadcasting Corporation,15 the CA ruled that the active participation of the party against
whom the action was brought, coupled with his failure to object to the jurisdiction of the
court or quasi-judicial body where the action is pending, is tantamount to an invocation
of that jurisdiction and a willingness to abide by the resolution of the case and will bar
said party from later on impugning the court or body’s jurisdiction. The appellate court
then disposed the case in this wise:
WHEREFORE, foregoing premises considered, the petition having merit, in fact and in
law, is hereby GIVEN DUE COURSE. Accordingly, the challenged resolution/decision and
orders of public respondent NLRC are hereby REVERSED and SET ASIDE and the
decision of the Labor Arbiter dated May 28, 1999 REINSTATED with a slight
modification, that the 13th month pay be in the amount of ₱7,430.50. No costs.
SO ORDERED.16
Petitioner sought reconsideration17 of the above Decision18 but the CA denied the motion
in the assailed Resolution19 dated 27 June 2002. Hence, its recourse to this Court,
elevating the following issues:
I.
II.
WHETHER OR NOT THE AWARD OF 13TH MONTH PAY BY THE LABOR ARBITER MAY BE
MODIFIED, NOTWITHSTANDING THAT THE SAME WAS NEVER ASSIGNED AS AN ERROR.
Anent the first assignment of error, there are divergent jurisprudential doctrines
touching on this issue. On the one hand are the cases of Martinez v. Merced,20 Marquez v.
Secretary of Labor,21 Ducat v. Court of Appeals ,22 Bayoca v. Nogales,23 Jimenez v. Patricia,24
Centeno v. Centeno,25 and ABS-CBN Supervisors Employee Union Members v. ABS-CBN
Broadcasting Corporation,26 all adhering to the doctrine that a party’s active participation
in the actual proceedings before a court without jurisdiction will estop him from assailing
such lack of jurisdiction. Respondent heavily relies on this doctrinal jurisprudence.
27 28 29 3/12
On the other hand, the cases of Dy v. NLRC, 27 La Naval Drug v. CA,28 De Rossi vs. CA29 and
Union Motors Corporation v. NLRC 30 buttress the position of petitioner that jurisdiction is
conferred by law and lack of jurisdiction may be questioned at any time even on appeal.
The Court of Appeals adopted the principles in the cases of Martinez, Marquez and ABS-
CBN in resolving the jurisdictional issue presented for its resolution, to wit:
Indeed, we agree with petitioner that private respondent was estopped from raising the
question of jurisdiction before public respondent NLRC and the latter gravely abused its
discretion in addressing said question in private respondents’ favor. As early as Martinez
vs. De la Merced, 174 SCRA 182, the Supreme Court has clearly ruled thus: "For it has been
consistently held by this Court that while lack of jurisdiction may be assailed at any stage, a
party’s active participation in the proceedings before a court without jurisdiction will estop
such party from assailing such lack of jurisdiction."
....
The same principle was adopted by the Highest Tribunal in the case of Alfredo Marquez
vs. Sec. of Labor, 171 SCRA 337 and quoted in the latter case of ABS-CBN Supervisors
Employees Union Members vs. ABS-CBN Broadcasting Corporation, 304 SCRA 497, where it
was ruled that: "The active participation of the party against whom the action was brought,
coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where
the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to
abide by the resolution of the case and will bar said party from later on impugning the court
or body’s jurisdiction."31
We rule differently. A cursory glance at these cases will lead one to the conclusion that a
party who does not raise the jurisdictional question at the outset will be estopped to
raise it on appeal. However, a more circumspect analysis would reveal that the cases
cited by respondent do not fall squarely within the issue and factual circumstances of
the instant case. We proceed to demonstrate.
The notion that the defense of lack of jurisdiction may be waived by estoppel on the
party invoking the same most prominently emerged in Tijam v. Sibonghanoy.32 Indeed,
the Marquez case relied upon by the CA is in turn grounded on Tijam, where We held
that:
. . . a party can not invoke the jurisdiction of a court to secure affirmative relief against
his opponent and, after obtaining or failing to obtain such relief, repudiate or question
that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by
way of explaining the rule, it was further said that the question whether the court had
jurisdiction either of the subject-matter of the action or of the parties is barred from
such conduct not because the judgment or order of the court is valid and conclusive as
an adjudication, but for the reason that such a practice can not be tolerated—obviously
for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
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encountering an adverse decision on the merits, it is too late for the loser to question the
jurisdiction or power of the court . . . And in Littleton vs. Burges, 16 Wyo, 58, the Court said
that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a
particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction
to escape a penalty.33
However, Tijam represented an exceptional case wherein the party invoking lack of
jurisdiction did so only after fifteen (15) years, and at a stage when the proceedings had
already been elevated to the Court of Appeals. Even Marquez recognizes that Tijam
stands as an exception, rather than a general rule.34 The CA perhaps though felt
comfortable citing Marquez owing to the pronouncement therein that the Court would
not hesitate to apply Tijam even absent the extraordinary circumstances therein:
". . . where the entertainment of the jurisdictional issue at a belated stage of the
proceedings will result in a failure of justice and render nugatory the constitutional
imperative of protection to labor."35
In this case, jurisdiction of the labor arbiter was questioned as early as during appeal
before the NLRC, whereas in Marquez, the question of jurisdiction was raised for the first
time only before this Court. The viability of Marquez as controlling doctrine in this case is
diminished owing to the radically different circumstances in these two cases. A similar
observation can be made as to the Bayoca and Jimenez cases.36
Neither do the other like-minded cases squarely settle the issue in favor of the
respondent. In the case of Martinez, the issue is not jurisdiction by estoppel but waiver of
preliminary conference. In that case, we said:
The case of Ducat was categorical in saying that if the parties acquiesced in submitting an
issue for determination by the trial court, they are estopped from questioning the
jurisdiction of the same court to pass upon the issue. But this should be taken in the
context of the "agreement" of the parties. We quote from said case:
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Petitioner’s filing of a Manifestion and Urgent Motion to Set Parameters of Computation
is indicative of its conformity with the questioned order of the trial court referring the
matter of computation of the excess to SGV and simultaneously thereafter, the issuance
of a writ of possession. If petitioner thought that subject order was wrong, it could have
taken recourse to the Court of Appeals but petitioner did not. Instead he manifested his
acquiescence in the said order by seeking parameters before the trial court. It is now too
late for petitioner to question subject order of the trial court. Petitioner cannot be
allowed to make a mockery of judicial processes, by changing his position from one of
the agreement to disagreement, to suit his needs. If the parties acquiesced in submitting
an issue for determination by the trial court, they are estopped from questioning the
jurisdiction of the same court to pass upon the issue. Petitioner is consequently
estopped from questioning subject order of the trial court.38
Evidently, none of these cited precedents squarely operates as stare decisis on this case,
involving as they did different circumstances. The question now lies as to whether the
precedents cited by petitioner are more apropos to this case.
Petitioner seeks to convince this Court that the instant case falls squarely within the
purview of this Court’s ruling in the case of Dy. Admittedly, a different factual mileu was
present insofar as the questioned jurisdiction was alleged to have been properly lodged
in the SEC instead of NLRC. Yet the rationale employed by the Court therein warrants
serious consideration. The aforementioned case was ruled in this wise:
. . . .More importantly, estoppel cannot be invoked to prevent this Court from taking up
the question of jurisdiction, which has been apparent on the face of the pleadings since
the start of litigation before the Labor Arbiter. It is well settled that the decision of a
tribunal not vested with appropriate jurisdiction is null and void. Thus, in Calimlim vs.
Ramirez, this Court held:
"A rule that had been settled by unquestioned acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court over the subject matter of the action is
a matter of law and may not be conferred by consent or agreement of the parties. The
lack of jurisdiction of a court may be raised at any stage of the proceedings, even on
appeal. This doctrine has been qualified by recent pronouncements which stemmed
principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however,
that the holding in said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstances involved in Sibonghanoy which
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justified the departure from the accepted concept of non-waivability of objection to
jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but
rather the general rule, virtually overthrowing altogether the time honored principle that
the issue of jurisdiction is not lost by waiver or by estoppel.
....
"It is neither fair nor legal to bind a party by the result of a suit or proceeding which was
taken cognizance of in a court which lacks jurisdiction over the same irrespective of the
attendant circumstances. The equitable defense of estoppel requires knowledge or
consciousness of the facts upon which it is based. The same thing is true with estoppel
by conduct which may be asserted only when it is shown, among others, that the
representation must have been made with knowledge of the facts and that the party to
whom it was made is ignorant of the truth of the matter (De Castro vs. Gineta, 27 SCRA
623). The filing of an action or suit in a court that does not possess jurisdiction to
entertain the same may not be presumed to be deliberate and intended to secure a
ruling which could later be annulled if not favorable to the party who filed such suit or
proceeding in a court that lacks jurisdiction to take cognizance of the same, such act may
not at once be deemed sufficient basis of estoppel. It could have been te result of an
honest mistake or of divergent interpretation of doubtful legal provisions. If any fault is
to be imputed to a party taking such course of action, part of the blame should be placed
on the court which shall entertain the suit, thereby lulling the parties into believing that
they pursued their remedies in the correct forum. Under the rules, it is the duty of the
court to dismiss an action `whenever it appears that court has no jurisdiction over the
subject matter.' (Section 2, Rule 9, Rules of Court) Should the Court render a judgment
without jurisdiction, such judgment may be impeached or annulled for lack of jurisdiction
(Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of the same (Art. 1144, par.
3, Civil Code)."40
The jurisdiction of the Labor Arbiter was assailed in the cases of De Rossi v. NLRC41 and
Union Motors Corporation v. NLRC42 during appeal to the NLRC. Since the same
circumstance obtains in this case, the rulings therein, favorable as they are to the
petitioner, are germane.
Petitioner maintains that MICC can not question now the issue of jurisdiction of the
NLRC, considering that MICC did not raise this matter until after the case had been
brought on appeal to the NLRC. However, it has long been established as a rule, that
jurisdiction of a tribunal, agency, or office, is conferred by law, and its lack of jurisdiction
may be questioned at any time even on appeal. In La Naval Drug Corporation vs. Court of
Appeals, 236 SCRA 78, 90, this Court said:
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"Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it
appears that the court has no jurisdiction over the subject matter, the action shall be
dismissed. This defense may be interposed at any time, during appeal or even after final
judgment. Such is understandable, as this kind of jurisdiction is conferred by law and not
within the courts, let alone the parties, to themselves determine or conveniently set
aside."43
The long-established rule is that jurisdiction over a subject matter is conferred by law.
[Ilaw at Buklod ng Manggaggawa v. NLRC, 219 SCRA 536 (1993); Atlas Developer & Steel
Industries, Inc. v. Sarmiento Enterprises, Inc., 184 SCRA 153 (1990); Tijam v. Sibonghanoy, 23
SCRA 29, 30 (1968)]. Estoppel does not apply to confer jurisdiction to a tribunal that has
none over a cause of action. Where it appears that the court or tribunal has no
jurisdiction, then the defense may be interposed at any time, even on appeal or even
after final judgment. Moreover, the principle of estoppel cannot be invoked to prevent
this court from taking up the question of jurisdiction.44
The rulings in Lozon v. NLRC 45 addresses the issue at hand. This Court came up with a
clear rule as to when jurisdiction by estoppel applies and when it does not:
Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it
appears that the court has no jurisdiction over the subject matter, the action shall be
dismissed (Section 2, Rule 9, Rules of Court). This defense may be interposed at any time,
during appeal (Roxas vs. Rafferty, 37 Phil. 957) or even after final judgment (Cruzcosa vs.
Judge Concepcion, et al., 101 Phil. 146). Such is understandable, as this kind of jurisdiction
is conferred by law and not within the courts, let alone the parties, to themselves
determine or conveniently set aside. In People vs. Casiano (111 Phil. 73, 93-94), this Court,
on the issue of estoppel, held:
Verily, Lozon, Union Motors, Dy and De Rossi aptly resolve the jurisdictional issue obtaining
in this case. Applying the guidelines in Lozon, the labor arbiter assumed jurisdiction when
he should not. In fact, the NLRC correctly reversed the labor arbiter’s decision and
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ratiocinated:
....
In line with the cases cited above and applying the general rule that estoppel does not
confer jurisdiction, petitioner is not estopped from assailing the jurisdiction of the labor
arbiter before the NLRC on appeal.
Since jurisdiction does not lie with the Labor Arbiter, it is futile to discuss about the
computation of the 13th month pay.
WHEREFORE, the questioned decision of the Labor Arbiter and the Court of Appeals are
hereby REVERSED and SET ASIDE, and the decision of the NLRC in dismissing the
complaint for lack of jurisdiction REINSTATED.
SO ORDERED.
Footnotes
2 9/12
2 Id. at 87.
3 Id. at 88-89.
4 Id. at 90-91.
6 Id. at 92.
7 Id. at 93.
8 Id. at 95.
9 Id. at 118-122.
10 Id. at 122
12 Id. at 158-159.
13 Id. at 161-185.
14 G.R. No. 80685, March 16, 1989, 171 SCRA 337, 346.
16 Rollo, p. 44.
17 Id. at 48-58.
19 Id. at 47.
26 10/12
26 Supra note 15.
33 Id. at 564.
35 Ibid.
36 To be sure, the Court is not unaware of the ruling in Calimlim v. Ramirez, G.R. No.
L-34362, November 19, 1982, 118 SCRA 399, reiterated in Dy v. NLRC, G.R. No.
68544, October 27, 1986, 146 SCRA 211, to the effect that the ruling in Sibonghanoy
being an exception to the general rule that the lack of jurisdiction of a court may be
raised at any stage of the proceedings, even on appeal should not be applied in the
absence of the pivotal element of laches." Marquez, supra note 14.
37Martinez v. Merced, supra note 20 at 189 citing Tajonera v. Lamoroza, (1981) 110
SCRA 438; Nieta v. Manila Banking Corporation, (1983) 124 SCRA 455.
46 Id. at 12-13.
47 Rollo, p. 154.
48 11/12
48 Id. at 157-158.
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