CASE DIGEST: Social Security Commission vs. Rizal Poultry and Livestock Association

 

SOCIAL SECURITY COMMISSION, petitioner, vs. RIZAL POULTRY and LIVESTOCK ASSOCIATION, INC., BSD AGRO INDUSTRIAL DEVELOPMENT CORPORATION and BENJAMIN SAN DIEGO, respondents

G.R. No. 167050. June 1, 2011.

 

FACTS:

The instant case stemmed from a petition filed by Alberto Angeles before the Social Security Commission to compel respondents Rizal Poultry and Livestock Association, Inc. or BSD Agro Industrial Development Corporation to remit to the Social Security System all contributions due for and in his behalf.

Angeles had earlier filed a complaint for illegal dismissal against BSD Agro and/or its owner, Benjamin San Diego. The Labor Arbiter initially found that Angeles was an employee and that he was illegally dismissed. On appeal, however, the NLRC reversed the Labor Arbiter’s Decision and held that no employer-employee relationship existed between Angeles and respondents. Angeles elevated the case to the Court of Appeals via petition for certiorari. The appellate court affirmed the NLRC ruling and upheld the absence of employer-employee relationship. Angeles moved for reconsideration but it was denied by the Court of Appeals. No further appeal was undertaken, hence, an entry of judgment was made on 26 May 2001.

At any rate, the SSC did not take into consideration the decision of the NLRC. It denied respondents’ motion to dismiss.

A subsequent motion for reconsideration filed by respondents was likewise denied. The SSC reiterated that the principle of res judicata does not apply in this case because of the “absence of the indispensable element of ‘identity of cause of action.

Unfazed, respondents sought recourse before the Court of Appeals by way of a petition for certiorari. The Court of Appeals reversed the rulings of the SSC and held that there is a common issue between the cases before the SSC and in the NLRC; and it is whether there existed an employer-employee relationship between Angeles and respondents. Thus, the case falls squarely under the principle of res judicata, particularly under the rule on conclusiveness of judgment.

After the denial of their motion for reconsideration, petitioner filed the instant petition.

ISSUE:

WHETHER OR NOT THE DECISION OF THE NLRC AND THE COURT OF APPEALS, FINDING NO EMPLOYER-EMPLOYEE RELATIONSHIP, CONSTITUTES RES JUDICATA AS A RULE ON CONCLUSIVENESS OF JUDGMENT AS TO PRECLUDE THE RELITIGATION OF THE ISSUE OF EMPLOYER-EMPLOYEE RELATIONSHIP IN A SUBSEQUENT CASE FILED BEFORE THE PETITIONER.

RULING:

Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness of judgment in Rule 39, Section 47(c).

There is “bar by prior judgment” when, as between the first case where the judgment was rendered and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case constitutes an absolute bar to the second action.

But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved therein. This is the concept of res judicata known as “conclusiveness of judgment.” Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the two actions is the same.

Thus, if a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit. Identity of cause of action is not required but merely identity of issue.

The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action. Should identity of parties, subject matter, and causes of action be shown in the two cases, then res judicata in its aspect as a “bar by prior judgment” would apply. If as between the two cases, only identity of parties can be shown, but not identical causes of action, then res judicata as “conclusiveness of judgment” applies.

Verily, the principle of res judicata in the mode of “conclusiveness of judgment” applies in this case. The first element is present in this case. The NLRC ruling was affirmed by the Court of Appeals. It was a judicial affirmation through a decision duly promulgated and rendered final and executory when no appeal was undertaken within the reglementary period.

As previously stated, an identity in the cause of action need not obtain in order to apply res judicata by “conclusiveness of judgment.” An identity of issues would suffice.

The mandatory coverage under the Social Security Act is premised on the existence of an employer-employee relationship.

The illegal dismissal case before the NLRC involved an inquiry into the existence or non-existence of an employer-employee relationship. The very same inquiry is needed in the SSC case. And there was no indication therein that there is an essential conceptual difference between the definition of “employee” under the Labor Code and the Social Security Act.

In the instant case, therefore, res judicata in the concept of “conclusiveness of judgment” applies. The judgment in the NLRC case pertaining to a finding of an absence of employer-employee relationship between Angeles and respondents is conclusive on the SSC case.