ROSARIO A. GAA vs.

THE HONORABLE COURT OF APPEALS, EUROPHIL INDUSTRIES CORPORATION, and

CESAR R. ROXAS, Deputy Sheriff of Manila, No. L-44169. December 3, 1985.*

Facts:

Europhil Industries filed an action for damages against Gaa, a building administrator, for having
perpetrated certain acts that Europhil Industries considered a trespass upon its rights, namely, cutting of
its electricity, and removing its name from the building directory and gate passes of its officials and
employees. The court rendered judgment against Gaa and a writ of garnishment was issued pursuant
thereto, garnishing Gaa’s salary, commission and/or remuneration.

Thereafter, Gaa filed a motion to lift said garnishment on the ground that her "salaries, commission
and/or remuneration" are exempted from execution under Article 1708 of the New Civil Code. Said
Motion was denied as well as its MR.

On a petition for certiorari before the CA, the latter dismissed the petition and held that petitioner is not
a mere laborer as contemplated under Article 1708 as the term laborer does not apply to one who holds
a managerial or supervisory position like that of petitioner, but only to those "laborers occupying the
lower strata.

ART. 1708. The laborer' s wage shall not be subject to execution or attachment,
except for debts incurred for food, shelter, clothing and medical attendance."

Issue:

1. Is Gaa considered a laborer as to exempt his salary from garnishment under art. 1708?
2. Whether or not CA was correct in interpreting Article 1708 of the New Civil Code?

Ruling:

1. NO. It is beyond dispute that petitioner is not an ordinary or rank and file laborer but "a
responsibly place employee," of El Grande Hotel, responsible for planning, directing, controlling,
and coordinating the activities of all housekeeping personnel. Considering the importance of
petitioner's function in El Grande Hotel, it is undeniable that petitioner is occupying a position
equivalent to that of a managerial or supervisory position.
In its broadest sense, the word "laborer" includes everyone who performs any kind of mental or
physical labor, but as commonly and customarily used and understood, it only applies to one
engaged in some form of manual or physical labor.
In Kline vs. Russel, 113 Ga. 1085, 39 SE 477, citing Oliver vs. Macon Hardware Co., supra, it was
held that a laborer, within the statute exempting from garnishment the wages of a "laborer," is
one whose work depends on mere physical power to perform ordinary manual labor, and not
one engaged in services consisting mainly of work requiring mental skill or business capacity,
and involving the exercise of intellectual faculties.

2. Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared
what are to be exempted from attachment and execution. The term "wages" as distinguished
from "salary", applies to the compensation for manual labor, skilled or unskilled, paid at stated
times, and measured by the day, week, month, or season, while "salary" denotes a higher
degree of employment, or a superior grade of services, and implies a position of office: by
 contrast, the term "wages" indicates considerable pay for a lower and less responsible character
of employment, while "salary" is suggestive of a larger and more important service.
The distinction between wages and salary was adverted to in Bell vs. Indian Livestock Co. (Tex.
Sup.), 11 S.W. 344, wherein it was said: " 'Wages' are the compensation given to a hired person
for service, and the same is true of 'salary'. The words seem to be synonymous, convertible
terms, though we believe that use and general acceptation have given to the word 'salary' a
significance somewhat different from the word 'wages' in this: that the former is understood to
relate to position of office, to be the compensation given for official or other service, as
distinguished from 'wages', the compensation for labor."
Therefore, CA was correct in ruling that Gaa’s salaries, commission and other remuneration due
her from the El Grande Hotel do not constitute wages due a laborer which, under Article 1708 of
the Civil Code, are not subject to execution or attachment.

Matling Industrial and Commercial Corporation, et

al. v. Coros
G.R. No. 157802, 13 October 2010

FACTS:

After his dismissal by Matling as its Vice President for Finance and Administration, the respondent
filed a complaint for illegal suspension and illegal dismissal against Matling and some of its
corporate officers (petitioners) in the NLRC. Matling moved to dismiss the complaint on the ground
of lack of jurisdiction because the issue was intra-corporate inasmuch as the respondent was a
member of Matling’s Board of Directors aside from being its Vice-President for Finance and
Administration prior to his termination.

Coros, in opposing the motion filed by Matling, alleged that his status as a member of the Board was
doubtful since he was not formally elected and he did not own a single share of stock. Even
assuming that he had been a Director of Matling, he had been removed as the Vice President for
Finance and Administration, not as a Director, a fact that the notice of his termination dated April 10,
2000 showed.

Labor Arbiter (LA) ruled in favor of Matling. On appeal, the NLRC reversed the decision of the LA
and ruled that the case is cognizable by the LA. Matling appealed to the CA through a petition for
certiorari which the CA dismissed as well.

ISSUE:

Whether or not Coros was a stockholder/member of the Matling’s Board of Directors .

RULING:
No. Conformably with Section 25, a position must be expressly mentioned in the By-Laws in order to
be considered as a corporate office. Thus, the creation of an office pursuant to or under a By-Law
enabling provision is not enough to make a position a corporate office.

An “office” is created by the charter of the corporation and the officer is elected by the directors or
stockholders. On the other hand, an employee occupies no office and generally is employed not by
the action of the directors or stockholders but by the managing officer of the corporation who also
determines the compensation to be paid to such employee. In this case, respondent was appointed
vice president for nationwide expansion by Malonzo, petitioner’s general manager, not by the board
of directors of petitioner. It was also Malonzo who determined the compensation package of
respondent. Thus, respondent was an employee, not a “corporate officer.”

Moreover, the Board of Directors of Matling could not validly delegate the power to create a
corporate office to the President, in light of Section 25 of the Corporation Code requiring the Board
of Directors itself to elect the corporate officers. Verily, the power to elect the corporate officers was
a discretionary power that the law exclusively vested in the Board of Directors, and could not be
delegated to subordinate officers or agents.22 The office of Vice President for Finance and
Administration created by Matling’s President pursuant to By Law No. V was an ordinary, not a
corporate, office. 

To emphasize, the power to create new offices and the power to appoint the officers to occupy them
vested by By-Law No. V merely allowed Matling’s President to create non-corporate offices to be
occupied by ordinary employees of Matling. Such powers were incidental to the President’s duties as
the executive head of Matling to assist him in the daily operations of the business.

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, 

vs.

JOY C. CABILES, Respondent.

G.R. No. 170139               August 5, 2014

PONENTE: Leonen

TOPIC:  Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022

FACTS:
                Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency.

                Respondent Joy Cabiles was hired thus signed a one-year employment contract

for a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co.
Ltd. (Wacoal) on June 26, 1997. She alleged that in her employment contract, she
agreed to work as quality control for one year. In Taiwan, she was asked to work as a
cutter.

                Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal
informed Joy, without prior notice, that she was terminated and that “she should
immediately report to their office to get her salary and passport.” She was asked to
“prepare for immediate repatriation.” Joy claims that she was told that from June 26 to
July 14, 1997, she only earned a total of NT$9,000.15 According to her, Wacoal
deducted NT$3,000 to cover her plane ticket to Manila.

                On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC
against petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LA’s
decision. CA affirmed the ruling of the National Labor Relations Commission finding
respondent illegally dismissed and awarding her three months’ worth of salary,
the reimbursement of the cost of her repatriation, and attorney’s fees

ISSUE:

                Whether or not Cabiles was entitled to the unexpired portion of her salary due
to illegal dismissal.

HELD:

                YES. The Court held that the award of the three-month equivalent of
respondent’s salary should be increased to the amount equivalent to the unexpired term
of the employment contract.

                In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc.,

this court ruled that the clause “or for three (3) months for every year of the unexpired
term, whichever is less” is unconstitutional for violating the equal protection clause and
substantive due process.

                A statute or provision which was declared unconstitutional is not a law. It

“confers no rights; it imposes no duties; it affords no protection; it creates no office; it is
inoperative as if it has not been passed at all.”

                The Court said that they are aware that the clause “or for three (3) months for
every year of the unexpired term, whichever is less” was reinstated in Republic Act No.
8042 upon promulgation of Republic Act No. 10022 in 2010.
Ruling on the constitutional issue

                In the hierarchy of laws, the Constitution is supreme. No branch or office of

the government may exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that supports such exercise. The
Constitution cannot be trumped by any other law. All laws must be read in light of the
Constitution. Any law that is inconsistent with it is a nullity.

                Thus, when a law or a provision of law is null because it is

inconsistent with the Constitution, the nullity cannot be cured by
reincorporation or reenactment of the same or a similar law or provision.
A law or provision of law that was already declared unconstitutional remains as such
unless circumstances have so changed as to warrant a reverse conclusion.

                The Court observed that the reinstated clause, this time as provided in Republic
Act. No. 10022, violates the constitutional rights to equal protection and due process.96
Petitioner as well as the Solicitor General have failed to show any compelling change in
the circumstances that would warrant us to revisit the precedent.

                The Court declared, once again, the clause, “or for three (3) months for every
year of the unexpired term, whichever is less” in Section 7 of Republic Act No. 10022
amending Section 10 of Republic Act No. 8042 is declared unconstitutional and,
therefore, null and void.