Thursday, February 04, 2010

Feb 1 round-up: Be careful with those quitclaims

It's the lovely month of February, and the Supreme Court gives us six decisions to start the month.

The Court fines Davao Judge in the amount of PHP 11,000 for delay in deciding a criminal case.

Then, the Court rules that a rural bank president who obtained an PhP 8 Million loan from his bank through a conduit may be charged separately for violation of the DOSRI law (Sec. 83 of RA 337) and Estafa through Falsification of Commercial Documents (Art. 315(1)(b) of the Revised Penal Code. The Court reiterates that the remedy for the denial of a Motion to Quash is not Certiorari under Rule 65, and restates the requisites for the issuance of the writ of preliminary injunction.

The Court further declares that a delay in the filing of formal charges for the crime of Robbery with homecide by a year does not weaken the credibility of the the testimonies of the prosecution weakness. The Court also rules that the identification of the accused from mug shots presented at a camp does not necessarily mean that the identification was suggestive and therefore invalid.

The Court also affirms the conviction of an accused who raped his ten year old nice five times in one night. The Court similarly rules in the case of another rapist who ravaged his stepdaughter countless times.

In labor law, the Court rules against the effort of Goodrich employees to nullify their quitclaims, which they executed upon termination from their employer. The Court rules,

It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees. In certain cases, however, the Court has given effect to quitclaims executed by employees if the employer is able to prove the following requisites, to wit: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law.

Our pronouncement in Periquet v. National Labor Relations Commission on this matter cannot be more explicit:

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.

In the case at bar, both the Labor Arbiter and the NLRC ruled that respondents executed the quitclaims absent any coercion from the petitioners following their voluntary resignation from the company.

In their Comment[19] dated October 1, 2009, respondents themselves admitted that they were not coerced to sign the quitclaims. They, however, maintain that two (2) reasons moved them to sign the said documents: first, they believed Goodrich was terminating its business on account of financial hardship; and second, they thought petitioners will pay them the full amount of their compensation. Respondents insist that they were deceived into signing the quitclaims when they learned that they were not paid their full monetary benefits and after discovering that the company did not really close shop, but instead only assumed a different company name.

We are not persuaded.

First, the contents of the quitclaim documents that have been signed by the respondents are simple, clear and unequivocal. The records of the case are bereft of any substantial evidence to show that respondents did not know that they were relinquishing their right short of what they had expected to receive and contrary to what they have so declared. Put differently, at the time they were signing their quitclaims, respondents honestly believed that the amounts received by them were fair and reasonable settlements of the amounts which they would have received had they refused to voluntarily resign from the said company.

Second, respondents claim that they were deceived because petitioners did not really terminate their business since Mr. Chua Goy had set up another company with the same line of business as Goodrich. Such contention, however, was not proven during the hearing before the Labor Arbiter and the NLRC. Hence, such claim is based only on respondents’ surmises and speculations which, unfortunately, can never be used as a valid and legal ground to repudiate respondents’ quitclaims.

And third, the considerations received by the respondents from Goodrich do not appear to be grossly inadequate vis-à-vis what they should receive in full. As correctly pointed out by the NLRC, the total awards computed by the Labor Arbiter will definitely even be lesser after deducting the 13th month pay for the years 2002 and 2003, which have already been received by the respondents prior to the filing of their complaints, but which the Labor Arbiter still included in his computation. The difference between the amounts expected from those that were received may, therefore, be considered as a fair and reasonable bargain on the part of both parties.

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