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[G.R. No. 144767. March 21, 2002.] DILY DANY NACPIL, petitioner, vs. INTERNATIONAL BROADCASTING CORPORATION, respondent.

Cruz Enverga & Lucero for petitioner. The Government Corporate Counsel for respondent. SYNOPSIS Petitioner was the Assistant General Manager for Finance/Administration and Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC). Upon his assumption of the IBC Presidency, Emiliano Templo allegedly harassed and pressured petitioner into resigning until the latter was forced to retire. However, Templo refused to pay him his retirement benefits and refused to recognize petitioner's employment. Hence, petitioner filed with the Labor Arbiter a complaint for illegal dismissal and nonpayment of benefits. The Labor Arbiter ruled in favor of petitioner. IBC appealed to the NLRC, but the same was dismissed. IBC then filed with the Court of Appeals a petition for certiorari under Rule 65, which petition was granted by the appellate court and the decisions of the Labor Arbiter and the NLRC were reversed and set aside. Petitioner then filed this instant petition. CIDcHA In affirming the decision of the Court of Appeals, the Supreme Court ruled that the Labor Arbiter had no jurisdiction over the case for illegal dismissal and non-payment of benefits filed by petitioner. As petitioner's appointment as comptroller required the approval and formal action of the IBC's Board of Directors to become valid, it is clear, therefore, that petitioner is a corporate officer whose dismissal may be the subject of a controversy cognizable by the SEC under Section 5(c) of P.D. 902-A which includes controversies involving both election and appointment of corporate directors, trustees, officers, and managers. Had petitioner been an ordinary employee, such board action would not have been required. The Court has consistently held that where there is a finding that any decision was rendered without jurisdiction, the action shall be dismissed. Such defense can be interposed at any time, during appeal or even after final judgment. It must be noted that under Section 5.2 of the Securities Regulation Code (Republic Act No. 8799) which was signed into law on July 19, 2002, the SEC's jurisdiction over all cases enumerated in Section 5 of P.D. 902-A has been transferred to the Regional Trial Courts. SYLLABUS 1. COMMERCIAL LAW; CORPORATION LAW; SECURITIES AND EXCHANGE COMMISSION; JURISDICTION; HOW DETERMINED. — The Court has consistently held that there are two elements to be considered in determining whether the SEC has jurisdiction over the controversy, to wit: (1) the status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy. CHcETA 2. ID.; ID.; PRIVATE CORPORATIONS; BY-LAWS; MAY AUTHORIZE THE BOARD OF DIRECTORS TO APPOINT SUCH OTHER OFFICERS AS MAY BE NECESSARY. — The Court has held that in most cases the

"by-laws may and usually do provide for such other officers," and that where a corporate office is not specifically indicated in the roster of corporate offices in the by-laws of a corporation, the board of directors may also be empowered under the by-laws to create additional officers as may be necessary. 3. ID.; ID.; SECURITIES AND EXCHANGE COMMISSION; HAS JURISDICTION OVER CONTROVERSIES INVOLVING BOTH THE ELECTION AND APPOINTMENT OF CORPORATE DIRECTORS, TRUSTEES, OFFICERS, AND MANAGERS; CASE AT BAR. — As petitioner's appointment as comptroller required the approval and formal action of the IBC's Board of Directors to become valid, it is clear therefore holds that petitioner is a corporate officer whose dismissal may be the subject of a controversy cognizable by the SEC under Section 5(c) of P.D. 902-A which includes controversies involving both election and appointment of corporate directors, trustees, officers, and managers. Had petitioner been an ordinary employee, such board action would not have been required. 4. REMEDIAL LAW; COURTS; JURISDICTION; CONFERRED ONLY BY THE CONSTITUTION OR BY LAW. — The Court has consistently held that where there is a finding that any decision was rendered without jurisdiction, the action shall be dismissed. Such defense can be interposed at any time, during appeal or even after final judgment. It is a well-settled rule that jurisdiction is conferred only by the Constitution or by law. It cannot be fixed by the will of the parties; it cannot be acquired through, enlarged or diminished by, any act or omission of the parties. IHaCDE DECISION KAPUNAN, J p: This is a petition for review on certiorari under Rule 45, assailing the Decision of the Court of Appeals dated November 23, 1999 in CA-G.R. SP No. 52755 1 and the Resolution dated August 31, 2000 denying petitioner Dily Dany Nacpil's motion for reconsideration. The Court of Appeals reversed the decisions promulgated by the Labor Arbiter and the National Labor Relations Commission (NLRC), which consistently ruled in favor of petitioner. Petitioner states that he was Assistant General Manager for Finance/Administration and Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC) from 1996 until April 1997. According to petitioner, when Emiliano Templo was appointed to replace IBC President Tomas Gomez III sometime in March 1997, the former told the Board of Directors that as soon as he assumes the IBC presidency, he would terminate the services of petitioner. Apparently, Templo blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez, for the prior mismanagement of IBC. Upon his assumption of the IBC presidency, Templo allegedly harassed, insulted, humiliated and pressured petitioner into resigning until the latter was forced to retire. However, Templo refused to pay him his retirement benefits, allegedly because he had not yet secured the clearances from the Presidential Commission on Good Government and the Commission on Audit. Furthermore, Templo allegedly refused to recognize petitioner's employment, claiming that petitioner was not the Assistant General Manager/Comptroller of IBC but merely usurped the powers of the Comptroller. Hence, in 1997, petitioner filed with the Labor Arbiter a complaint for illegal dismissal and non-payment of benefits.

Instead of filing its position paper, IBC filed a motion to dismiss alleging that the Labor Arbiter had no jurisdiction over the case. IBC contended that petitioner was a corporate officer who was duly elected by the Board of Directors of IBC; hence, the case qualities as an intra-corporate dispute falling within the jurisdiction of the Securities and Exchange Commission (SEC). However, the motion was denied by the Labor Arbiter in an Order dated April 22, 1998. 2 On August 21, 1998, the Labor Arbiter rendered a Decision stating that petitioner had been illegally dismissed. The dispositive portion thereof reads: WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the complainant and against all the respondents, jointly and severally, ordering the latter: 1. To reinstate complainant to his former position without diminution of salary or loss of seniority rights, and with full backwages computed from the time of his illegal dismissal on May 16, 1997 up to the time of his actual reinstatement which is tentatively computed as of the date of this decision on August 21, 1998 in the amount of P1,231,750.00 (i.e., P75,000.00 a month x 15.16 months = P1,137,000.00 plus 13th month pay equivalent to 1/12 of P1,137,000.00 = P94,750.00 or the total amount of P1,231,750.00). Should complainant be not reinstated within ten (10) days from receipt of this decision, he shall be entitled to additional backwages until actually reinstated. 2. a) b) c) Likewise, to pay complainant the following: P2 Million as and for moral damages; P500,000.00 as and for exemplary damages; plus and (sic) Ten (10%) percent thereof as and for attorney's fees.

SO ORDERED. 3 IBC appealed to the NLRC, but the same was dismissed in a Resolution dated March 2, 1999, for its failure to file the required appeal bond in accordance with Article 223 of the Labor Code. 4 IBC then filed a motion for reconsideration that was likewise denied in a Resolution dated April 26, 1999. 5 IBC then filed with the Court of Appeals a petition for certiorari under Rule 65, which petition was granted by the appellate court in its Decision dated November 23, 1999. The dispositive portion of said decision states: WHEREFORE, premises considered, the petition for Certiorari is GRANTED. The assailed decisions of the Labor Arbiter and the NLRC are REVERSED and SET ASIDE and the complaint is DISMISSED without prejudice. SO ORDERED. 6 Petitioner then filed a motion for reconsideration, which was denied by the appellate court in a Resolution dated August 31, 2000.

Hence, this petition. Petitioner Nacpil submits that: I. THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER WAS APPOINTED BY RESPONDENT'S BOARD OF DIRECTORS AS COMPTROLLER. THIS FINDING IS CONTRARY TO THE COMMON, CONSISTENT POSITION AND ADMISSION OF BOTH PARTIES. FURTHER, RESPONDENT'S BY-LAWS DOES NOT INCLUDE COMPTROLLER AS ONE OF ITS CORPORATE OFFICERS. II. THE COURT OF APPEALS WENT BEYOND THE ISSUE OF THE CASE WHEN IT SUBSTITUTED THE NATIONAL LABOR RELATIONS COMMISSION'S DECISION TO APPLY THE APPEAL BOND REQUIREMENT STRICTLY IN THE INSTANT CASE. THE ONLY ISSUE FOR ITS DETERMINATION IS WHETHER NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN DOING THE SAME. 7 The issue to be resolved is whether the Labor Arbiter had jurisdiction over the case for illegal dismissal and non-payment of benefits filed by petitioner. The Court finds that the Labor Arbiter had no jurisdiction over the same. Under Presidential Decree No. 902-A (the Revised Securities Act), the law in force when the complaint for illegal dismissal was instituted by petitioner in 1997, the following cases fall under the exclusive of the SEC: a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, members of associations or organizations registered with the Commission; b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the State insofar as it concerns their individual franchise or right to exist as such entity; c) Controversies in the election or appointment of directors, trustees, officers, or managers of such corporations, partnerships or associations; d) Petitions of corporations, partnerships, or associations to be declared in the state of suspension of payments in cases where the corporation, partnership or association possesses property to cover all of its debts but foresees the impossibility of meeting them when they respectively fall due or in cases where the corporation, partnership or association has no sufficient assets to cover its liabilities, but is under the Management Committee created pursuant to this decree. (Emphasis supplied.)

The Court has consistently held that there are two elements to be considered in determining whether the SEC has jurisdiction over the controversy, to wit: (1) the status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy. 8 Petitioner argues that he is not a corporate officer of the IBC but an employee thereof since he had not been elected nor appointed as Comptroller and Assistant Manager by the IBC's Board of Directors. He points out that he had actually been appointed as such on January 11, 1995 by the IBC's General Manager, Ceferino Basilio. In support of his argument, petitioner underscores the fact that the IBC's ByLaws does not even include the position of comptroller in its roster of corporate officers. 9 He therefore contends that his dismissal is a controversy falling within the jurisdiction of the labor courts. 10 Petitioner's argument is untenable. Even assuming that he was in fact appointed by the General Manager, such appointment was subsequently approved by the Board of Directors of the IBC. 11 That the position of Comptroller is not expressly mentioned among the officers of the IBC in the By-Laws is of no moment, because the IBC's Board of Directors is empowered under Section 25 of the Corporation Code 12 and under the corporation's By-Laws to appoint such other officers as it may deem necessary. The By-Laws of the IBC categorically provides: XII. OFFICERS The officers of the corporation shall consist of a President, a Vice-President, a Secretary-Treasurer, a General Manager, and such other officers as the Board of Directors may from time to time does fit to provide for. Said officers shall be elected by majority vote of the Board of Directors and shall have such powers and duties as shall hereinafter provide (Emphasis supplied). 13 The Court has held that in most cases the "by-laws may and usually do provide for such other officers," 14 and that where a corporate office is not specifically indicated in the roster of corporate offices in the by-laws of a corporation, the board of directors may also be empowered under the by-laws to create additional officers as may be necessary. 15 An "office" has been defined as a creation of the charter of a corporation, while an "officer" as a person elected by the directors or stockholders. On the other hand, an "employee" occupies no office and is generally employed not by action of the directors and stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. 16 As petitioner's appointment as comptroller required the approval and formal action of the IBC's Board of Directors to become valid, 17 it is clear therefore holds that petitioner is a corporate officer whose dismissal may be the subject of a controversy cognizable by the SEC under Section 5(c) of P.D. 902-A which includes controversies involving both election and appointment of corporate directors, trustees, officers, and managers. 18 Had petitioner been an ordinary employee, such board action would not have been required. Thus, the Court of Appeals correctly held that:

the Court has previously held that the relationship of a person to a corporation. since compliance with the requirement of posting of a cash or surety bond in an amount equivalent to the monetary award in the judgment appealed from has been held to be both mandatory and jurisdictional. 23 It is a well-settled rule that jurisdiction is conferred only by the Constitution or by law. any act or omission of the parties. without prejudice to the filing of an appropriate action in the proper court. 902-A. but instead by the incidents of the relationship as they actually exist. 24 Considering the foregoing. the Decision of the Labor Arbiter had long become final and executory and thus.2 of the Securities Regulation Code (Republic Act No. It cannot be fixed by the will of the parties. The Court has consistently held that where there is a finding that any decision was rendered without jurisdiction. Clearly. and in deciding the case on the merits. the Court of Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction in giving due course to the IBC's petition for certiorari.Since complainant's appointment was approved unanimously by the Board of Directors of the corporation. enlarged or diminished by. The rule is that dismissal or non-appointment of a corporate officer is clearly an intra-corporate matter and jurisdiction over the case properly belongs to the SEC. The inclusion of such money claims does not convert the issue into a simple labor problem. during appeal or even after final judgment. The IBC's failure to post an appeal bond within the period mandated under Article 223 of the Labor Code has been rendered immaterial by the fact that the Labor Arbiter did not have jurisdiction over the case since as stated earlier. 22 Hence. it cannot be acquired through. 25 . the corporation. 20 It is likewise of no consequence that petitioner's complaint for illegal dismissal includes money claims. Such defense can be interposed at any time. 8799) which was signed into law by then President Joseph Ejercito Estrada on July 19. the Court holds that no error was committed by the Court of Appeals in dismissing the case filed before the Labor Arbiter. he is therefore considered a corporate officer and his claim of illegal dismissal is a controversy that falls under the jurisdiction of the SEC as contemplated by Section 5 of P. It must be noted that under Section 5. for such claims are actually part of the perquisites of his position in.D. the action shall be dismissed. the issues raised by petitioner against the IBC are matters that come within the area of corporate affairs and management. and constitute a corporate controversy in contemplation of the Corporation Code. 902-A has been transferred to the Regional Trial Courts.D. whether as officer or agent or employee is not determined by the nature of the services performed. 21 Petitioner further argues that the IBC failed to perfect its appeal from the Labor Arbiter's Decision for its non-payment of the appeal bond as required under Article 223 of the Labor Code. and therefore linked with his relations with. the SEC's jurisdiction over all cases enumerated in Section 5 of P. 2000. the same is in the nature of an intra-corporate controversy. not to the NLRC. 19 As to petitioner's argument that the nature of his functions is recommendatory thereby making him a mere managerial officer.

NLRC-NCR 00-05-03798-97. at 56-57. . 15. 12. Jr. Petitioner. Id. p. at 32. JJ. SO ORDERED. 2. at 14. Saura vs. Tabang vs. SP No. J. is on official leave.. 13. vs. who shall be a director.. Decision of the Labor Arbiter in Case No. . Resolution of the National Labor Relations Commission. the petition is hereby DISMISSED and the Decision of the Court of Appeals in CA-G. at 29. p. 16. Id. 28. a secretary who shall be a resident and citizen of the Philippines. 117. 11. 8. Lozano vs. Union Motors vs. De los Santos. dated March 2. National Labor Relations Commission and Dily Daly Nacpil.. 539 (1999). Rollo. 4. 6. Id. C.. Respondents. Davide. Ibid. Corporate officers. at 64-69. Petition.WHEREFORE. 10. NLRC.. . Section 25 of the Corporation Code explicitly states: SECTION 25. Second Division. Id. and Ynares-Santiago. 266 SCRA 462 (1997). Footnotes 1.R. 1997. a treasurer who may or may not be a director. 9. 5. 1999. Intercontinental Broadcasting Corporation. concur.. 3. at 14-17. and such other officers as may be provided for in the by-laws . Id. Rollo. Puno. NLRC. Rollo. Id. 14.. quorum. 314 SCRA 531.. — Immediately after their election. 274 SCRA 452 (1997). at 108.. Saura. Id. 313 SCRA 465 (1999). 52755 is AFFIRMED.. See Minutes of the Annual Stockholders' Meeting of the IBC on January 17. Jr.J. 7.. p. the directors of a corporation must formally organize by the election of a president. 14.

March 20.17. Office of the MOLE. supra. MALLARI. Rollo. LORENZO MANARANG. 106615. Fortune Cement Corporation vs. TOROBIA SERRANO. 109978 & 139379 March 20. 192 SCRA 315 (1990). 108591. 18. No. 108591. That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over the cases. Court of Appeals. See Article XII of the By-laws of IBC. BEN GARCIA. 19. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. CELESTINA TORNO. ALFREDO DE GUZMAN. Nos. Petition. March 20. MALLARI and MARCELINA I. G. No. pp. and JUANITO VITAL. PERCASIO CATACUTAN.R. 2002. NLRC.R. CELESTINO MAGAT. 24. petitioners. IGNACIO ARCEGA. EMILIO DE MESA. 270 SCRA 613 (1997). vs.R. 280 SCRA 226 (1997). ET AL. VICENTE MALLARI. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. 2002.] SPOUSES ELIGIO P. 21 22.2 of the Securities Regulation Code provides: The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided. 193 SCRA 258 (1991). Tolentino vs. 2002 SPS. 20. 25. Rollo. JUAN PANGILINAN. Union Motors Corporation vs. 23. RAFAEL MANALO. 109452. I n c.) C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. NLRC. respondents. NLRC. Inc.] . Section 5. 106615. vs. [G. (Emphasis supplied. Cagayan de Oro Coliseum. IGNACIO ARCEGA. MARIETA JACINTO. 31. supra Note 13. p. ELIGIO AND MARCELINA MALLARI vs. THIRD DIVISION [G. Ongkingco vs. 18-22.

L-61093. JUAN PANGILINAN. vs. vs. Pampanga and SPOUSES ELIGIO MALLARI and MARCELINA MALLARI. MALLARI and MARCELINA I. March 20.R. EMILIO DE MESA. CELESTINO MAGAT. Erlich B. CELESTINO MAGAT. petitioners. March 20. PERCASIO CATACUTAN. No. BEN GARCIA. EMILIO DE MESA. ALFREDO DE GUZMAN. San Fernando. et al. No. 106615 & 109452.R. VICENTE MALLARI. and JUAN PANGILINAN. for Sps. IGNACIO ARCEGA. PERCASIO CATACUTAN. No. MALLARI and MARCELINA I. TOROBIA SERRANO. PONCE. VICENTE MALLARI. BEN GARCIA. IGNACIO ARCEGA. JUAN PANGILINAN. SYNOPSIS Ignacio Arcega. CELESTINA TORNO.R. JUANITO VITAL. and JUANITO VITAL. However.] SPOUSES ELIGIO P. MALLARI. and JUANITO VITAL. MARIETA JACINTO. respondents. Eligio and Marcelina Mallari. 3844. CELESTINA TORNO. E. RAFAEL MANALO. Yuseco. Nos. No. Jr. ALFREDO DE GUZMAN. 2002. TOROBIA SERRANO. [G. No. LORENZO MANARANG. Branch XLVI.R. BEN GARCIA. CELESTINO MAGAT.A. 109978.P. RAFAEL MANALO. MALLARI. MARIETA JACINTO. as amended. EMILIO DE MESA. HONORABLE NORBERTO C. petitioners. Ocampo and Joaquin P. vs. RAFAEL MANALO. ALFREDO DE GUZMAN. respondents. PERCASIO CATACUTAN. IGNACIO ARCEGA.IGNACIO ARCEGA. LORENZO MANARANG. 109452. TOROBIA SERRANO. JUAN PANGILINAN. CELESTINO MAGAT. They filed before the lower court a petition for redemption of their respective landholdings pursuant to Republic Act No.R. March 20. respondents. LORENZO MANARANG. TOROBIA SERRANO.R. MARIETA JACINTO. EMILIO DE MESA.] SPOUSES ELIGIO P. 108591 and for respondents in G. RAFAEL MANALO. MALLARI. 3844 (The Agricultural Land Reform Code). the trial court denied the petition on the ground that they failed to comply with the jurisdictional requirements of Section 12 of R. 109452. petitioners. No. vs. respondents. VICENTE MALLARI. PERCASIO CATACUTAN. Barraquias for petitioners in G. were among the tenants-cultivators of a parcel of agricultural land owned by spouses Roberto Wijangco and Asuncion Robles that was foreclosed by the Philippine National Bank (PNB). 139379. 109978. and JUANITO VITAL. The issue reached this Court in G. 2002. Regional Trial Court Judge. [G. petitioners. 2002. Cipriano Tan for petitioner in G..] SPOUSES ELIGIO P. The CA set aside the order of denial and remanded the case to the RTC for further proceedings. This Court upheld the right of redemption of Arcega. Mallari & Associates. VICENTE MALLARI. MARIETA JACINTO. ALFREDO DE GUZMAN. MALLARI and MARCELINA I. [G. Hermenigildo D. et al. LORENZO MANARANG.R. respondents herein. CELESTINA TORNO. BEN GARCIA. and remanded the case to the lower court for . CELESTINA TORNO.

ID. — We are dismayed by RTC Judge Norberto C.B. 6389." Thus. LABOR AND SOCIAL LEGISLATIONS. Under Section 11. et al. CEDScA 2. from the time the Land Bank Certification dated January 15.further proceedings. hence. should be impleaded in Agrarian Case No. SDTIaE The RTC ruling was erroneous. REMEDIAL LAW. as amended.R.'s petition for redemption. VIOLATED IN CASE AT BAR." as eloquently declared by Justice J. For "there is only one Supreme Court from whose decisions all other courts should take their bearings. L-61093 which had acquired the character of res judicata and can no longer be challenged. No. TRIAL COURT IS EMPOWERED TO DROP OR ADD A PARTY TO THE CASE. as agricultural lessees under R. especially of this Court.. the subsequent cancellation by the LBP of its earlier Certification cannot affect the right already acquired by Arcega.A. The instant petition involving the same issues passed upon in G.A. Judge Ponce should know that it is the duty of the lower courts to obey the Decisions of this Court and render obeisance to its status as the apex of hierarchy of courts. As correctly held by the CA. et al. 3844.. LOWER COURT CANNOT REVERSE OR SET ASIDE THE DECISIONS OR ORDERS OF SUPERIOR COURT. "are deemed the cultivatorsowners of their respective landholdings" under R. 3844. and that the said Certification "is equivalent to a consignation or tender of payment in court. No. as amended. L61093. ID. CIVIL PROCEDURE.A. "are deemed the cultivators-owners of their respective landholdings" under R.A. Reyes.R. No. Ponce's non-adherence to our ruling in G. as amended. upon motion of any party "or on its own initiative at any stage of the action and on such terms as are just. as agricultural lessees under R. No. 1982. Again. the RTC dismissed for the second time Arcega. It should not have dismissed Arcega. 1982 was presented to the RTC on January 20. SYLLABUS 1. the trial court is empowered to drop or add a party to the case. REPUBLIC ACT NO. A lower court cannot reverse or set aside the decisions or orders of a superior court. et al's petition for redemption on the ground that there was no valid tender of payment and consignation in court of the redemption price. NOT AFFECTED BY SUBSEQUENT CANCELLATION BY THE LAND BANK OF THE PHILIPPINES OF ITS CERTIFICATION TO FINANCE THE REDEMPTION ISSUED EARLIER. Rule 3 of the 1997 Rules of Civil Procedure. as amended. This Court had sustained such right in the Decision in G. from the time the Land Bank Certification dated January 15. We have sustained such right in our decision . — The LBP is the agency of the Government mandated to finance the redemption under Section 12 of R. PARTIES.A. — As correctly held by the CA. and that the said Certification "is equivalent to a consignation or tender of payment in court. No. for to do so will nullify the essence of review and negate the principle of hierarchy of courts. Arcega. 1982. 3844. et al. 1908.L. Arcega et al." Thus." 3.A. et al. as amended by R. 3844. the subsequent cancellation by the LBP of its earlier Certification cannot affect the right already acquired by Arcega. 1982 was presented to the RTC on January 20. 3844 (THE AGRICULTURAL LAND REFORM CODE). the issue of dismissal reached this Court. RIGHT OF REDEMPTION BY AGRICULTURAL LESSEES. 1990. L-61093 should not have reached this Court once more. PRINCIPLE OF HIERARCHY OF COURTS. 3844.R. as amended. On November 8.

L-61093 which has acquired the character of res judicata and can no longer be challenged. Nos. Nos. being the highest bidder. ownership thereof was consolidated in the name of PNB. San Fernando. or 20% of the purchase price. the lots were awarded to PNB. the PNB foreclosed the mortgage contract. 3 On July 22. 1981. as down payment.in G. one of which is Lot No. located at Barrio Maimpis. Pampanga.C. the tenants of Lot No. 109978 and 139379) valiantly assert their right of redemption. 109452. 3664. 27 tenants of Lot No. After more than two (2) decades since the petition for redemption was filed with the trial court. also at San Fernando. It is thus imperative that we write finis to these cases. 1908 before the then Court of Agrarian Relations (CAR). Pampanga. SICDAa DECISION SANDOVAL-GUTIERREZ.000. No. The spouses declined the offer. the PNB executed in favor of spouses Eligio and Marcelina Mallari (respondents in G. Several Transfer Certificates of Title (TCTs) were then issued to it by the Register of Deeds. 1 which is the subject of this case. It was formerly owned by spouses Roberto Wijangco and Asuncion Robles under T. upon abolition of the CAR. 1978.R. 27507-R of the Registry of Deeds. the PNB (as the mortgagee- . Among those titles is TCT No. same province.000. Pursuant to their agreement. On March 17. In the auction sale that followed. 154516-R covering Lot No. 1980. 3664 and their other lots to the Philippine National Bank (PNB). the contending parties are still squabbling for their respective interests in the subject land.T. the Wijangcos mortgaged Lot No.R.892. Unable to pay their indebtedness. 109452. 3664 instituted Agrarian Case No. 106615. Pampanga. 3664 tried to redeem it at P5. No. Before the Mallari spouses could pay the first amortization. 109978 and 139379) a Deed of Promise to Sell 2 two (2) parcels of land.00. described as Lot No. The balance of P1. The undisputed facts are: The land in controversy is an agricultural lot planted to sugarcane. No. 3664.00 per hectare. prompting the tenants to seek the assistance of the then Ministry (now Department) of Agrarian Reform in initiating the redemption with the request that the Land Bank of the Philippines (LBP) be called to finance the same.R.R.000. The action sought to compel the Wijangco spouses (as the former owners). 3664 of the San Fernando Cadastre. hence.R. it was issued a Certificate of Sale.00 was to be paid in three (3) equal yearly installments from 1981 to 1983. No. On July 10. 1962. the Mallari spouses paid PNB the sum of P473. 108591 and respondents in G. The contract likewise provides that PNB shall retain ownership and title to the lots until the Mallari spouses shall have paid the last installment. 108591 and petitioners in G. This case was automatically absorbed by the Regional Trial Court (RTC). On March 16. 106615. Branch I at San Fernando. Branch 46. Spouses Wijangco failed to redeem the lots within the reglementary period. J p: These consolidated petitions involve a parcel of agricultural land over which the 14 tenants-cultivators (petitioners in G.

transferee and vendor) and the Mallari spouses (as the vendees under the Deed of Promise to Sell) to allow the tenants to redeem their respective landholdings in Lot No. Basilio Estanislao.A. Subsequently. 6. the above-named tenants (hereinafter referred to as Arcega. AS AMENDED . et al.) filed with the RTC a "Motion To Direct the Land Bank of the Philippines to Issue a Certificate of Availability of Funds" for the purpose of financing the redemption of their respective landholdings. 12. 13. three (3) more tenants withdrew from the case. 11. thereby leaving only 14 tenants as petitioners. 5 In the said order. 10. they presented a Certification dated January 15. Mr. This motion was denied by the RTC in an Order dated December 24. During the hearing of this motion. 5. pursuant to the provisions of Republic Act No. were required to show cause why the case should not be dismissed for their failure to make a tender of payment and/or consignation. as amended by Republic Act No. et al. 4. thus: "CERTIFICATION TO FINANCE REDEMPTION OF ESTATE UNDER R. on November 18. they filed a motion for reconsideration. 7. NO. 3844. 3844 (The Agricultural Land Reform Code). Forthwith. 1981. Ignacio Arcega Alfredo de Guzman Ben Garcia Celestino Magat Juanito Vital Percasio Catacutan Torobia Manalo-Serrano Celestina Torno Marieta Jacinto Vicente Mallari Rafael Manalo Juan Pangilinan Lorenzo Manarang Emilio de Mesa 4 Meanwhile. 14. Arcega. 9. 8. namely: 1. 3. 6389 (The Code of Agrarian Reforms of the Philippines). 1981. 10 out of the 27 tenants entered into a compromise agreement with the Mallari spouses. 1982 6 issued by the LBP signed by its President. 2. 3664. During the initial stage of the hearing before the RTC.

9 They maintained that the period of redemption had already prescribed and that Arcega. et al. as amended. The complaints sought the dissolution of the tenancy relationship between the Mallari spouses and Arcega. Pampanga. This Court. L-61093. No. subject matter of a Redemption Case . hence. 8 The CA then set aside the assailed Order and remanded the case to the RTC for further proceedings. SP-13807-CAR. . Arcega. the RTC. interposed an appeal to the Intermediate Appellate Court (now Court of Appeals [CA]). the petition for redemption (Agrarian Case No.R. The CA ruled that it was not necessary for Arcega. and (2) the petition for redemption was filed beyond the 180-day reglementary period. with the Provincial Adjudication Board of the Department of Agrarian Reform. Maimpis. "Issued at Manila. 1908-P '81. No. docketed as CAR Case No.A. Yap. pending the hearing of the agrarian case. 3844 because (1) the Certification to Finance Redemption issued by the LBP is merely conditional. "Corresponding fund shall be set aside upon receipt of the order or directive from the Honorable Court and payment therefor shall be effected upon compliance with the Bank's Guidelines and Policies on the matter. Region III."This is to certify that the LAND BANK OF THE PHILIPPINES shall finance the acquisition of the landholding situated in Bo. the Mallari spouses challenged the CA Decision before this Court by way of a petition for review on certiorari. 1908) was remanded to the RTC for further proceedings. holding that (1) Arcega. No. as required by law. and (2) that it is not necessary for the lessee to make a tender of payment and/or consignation of the amount of redemption price since the Certification issued by the Land Bank that it will finance the redemption of the property in question is sufficient compliance with Section 12 of R. the Mallari spouses filed 14 separate complaints against Arcega. denied the petition in a Decision dated May 25." Despite the above Certification. . San Fernando. 3844. to tender payment and/or consign the redemption price as the Certification issued by the Land Bank will suffice. as amended. 3844. Pursuant to this Decision. Unsatisfied. and their payment of annual rentals corresponding to the six (6) agricultural crop years for the period from 19831984 to 1988-1989. did not make any valid tender of payment or consignation of the redemption price. docketed therein as CA-G. et al. et al. through former Chief Justice Pedro L. docketed as DARAB Case Nos. 7 denied Arcega. this 15th day of January.A. 1988. 1982. et al. Republic Act No. did not constitute a valid consignation of the redemption price. in an Order dated January 27. 1982. et al. et al. docketed as G.'s motion for reconsideration and dismissed the petition for redemption on the ground that they failed to comply with the jurisdictional requirements of Section 12 of R. and that the exercise of the right of redemption was made within the 180-day period. . if found in consonance with the provisions of Section 12. and with the relevant policies and procedures laid down by the Land Bank Board of Directors. 144-P '89 to 160-P '89. In November of 1989. et al.R.'s right of redemption has not yet prescribed because no notice in writing of the sale was ever given by the vendee upon the tenants as agricultural lessees of the land. No.

the RTC rendered a Decision dismissing for the second time Arcega. in legal contemplation. Act No.) liable for back rentals of their respective landholdings for the period covered from agricultural crop years 1982-1983 up to 1989- . nothing more. 3664 is justified. What the RTC should have done. questions regarding appellants' (Arcega. 2. standing alone.R. 1980. 3844.777. convincing and overwhelming evidence that the Petition for Redemption had already prescribed as it was filed beyond the 180-day period provided for under Section 12 of Rep. upon receipt of the record of the case.745. the denial of plaintiffs' Petition for Redemption of Lot No." 12 In due time.R. Act No. the said petition is hereby dismissed accordingly.) compliance with the jurisdictional requirements of Section 12. there was no valid tender of payment and consignation in court of the redemption price since the Land Bank Certification does not satisfy the requirements of Section 12 of Rep. 1990. 11 On November 8.70. as amended by Rep. docketed therein as CA-G. in utter disregard of the Decision of this Court in G. as amended. 3. SP CAR 25209. thus: " . 1990. Act No. 3844. considering the foregoing premises and finding the Petition for Redemption filed by the plaintiffs over Lot No. . There exist uncontroverted. et al. et al. 3844. . 6389. guidelines and rules and regulations of the Land Bank of the Philippines as prescribed under its Circular Letter No. et al. policies.'s petition for redemption. the CA rendered a Decision reversing the RTC Decision. was to have resolved the question on the reasonable amount of the redemption price. There is a dearth of competent and satisfactory evidence on the part of the plaintiffs establishing or fixing the reasonable amount of the redemption price as no evidence to this effect was presented by the plaintiffs during trial of the case and the testimony of plaintiff Rafael Manalo. "WHEREFORE. the valid certification that complies with the requirements. et al. were already passed upon by the Supreme Court (in the 1988 Mallari case) when it affirmed the CA's ruling which set aside the order of dismissal and remanded the case to the court a quo for further proceedings. and is not. San Fernando. On June 9. both legally and factually. dated February 25." xxx xxx xxx "The RTC committed reversible error when it held appellants (Arcega. Pampanga to be without legal or factual merit. 1992.On June 18. due to the following reasons: 1. to pay the back rentals for the said agricultural years in the aggregate amount of P1. No. et al. Republic Act No. Act No. appealed the RTC Decision to the CA. 3664 of the San Fernando Cadastre. as amended by Rep. 6389. the RTC issued an Order 10 requiring Arcega. In accordance with the existing law and jurisprudence. The pertinent portions of the RTC Decision read: "By way of resume. Arcega. L-61093. and 3. spelled no difference as the case has no leg of support to lean on.

on January 6. Order dated November 12. as amended by R. the Mallaris' claim for rentals must perforce fail. L-61093.A.'s motion for reconsideration of the October 22. No. on June 5. the Provincial Adjudication Board of the DAR rendered a Decision in DARAB Case Nos. 1993. 1992 granting the said spouses' "Motion to Guard Sugar Cane Production in the Disputed Landholdings". 106615. Arcega. 106615. 1991 Decision of the Provincial Adjudication Board and ordering it to hold in abeyance action on the cases until such time that the petition for redemption shall have been finally resolved by this Court.1990. whether or not Arcega. On February 4. Arcega. the Decision dated 08 November 1990. Branch XLVI.. docketed as DARAB Case No. No. 1993 denying Arcega. San Fernando. Eventually. Third Judicial Region. This DARAB decision was upheld by the CA in a Decision . filed directly with this Court a special civil action for certiorari with prayer for the issuance of a temporary restraining order and/or preliminary mandatory injunction. Order dated January 14. 1991. 1992. Meanwhile. b. which is equivalent to consignation or tender of payment in court. They submit the same issue passed upon by this Court in G. Order dated November 3. Pampanga. is hereby SET ASIDE. e. spouses Mallari filed with this Court the present petition for review on certiorari challenging the CA Decision.R. 1993.R. et al. 1992 denying Arcega. 6389." 13 On September 25. 1992. appealed the said decision to the DAR Adjudication Board (DARAB). No. 144-P '89 to 160-P '89 (for dissolution of tenancy relationship between Arcega. et al. xxx xxx xxx "WHEREFORE. and d. there being no convincing evidence in the record on the matter. No. 0397. of the Regional Trial Court.A. Order dated December 2. et al. docketed as G. No. et al. 1992 granting the Mallari spouses' "Motion to Turn Over/Deliver Funds in Sheriff's Custody".'s motion for reconsideration of the order dated November 12. pending our resolution of G. i. Appellants cannot be compelled to pay rentals for the use of the landholdings in question of which they are deemed the cultivators-owners thereof from the time the Land Bank Certification was presented. and the spouses Mallari) in favor of the spouses Mallari. 1992 order which directed Sheriff Anastacio C. docketed as G. 14 The petition assails the following orders of the trial court: a. The record of the case is hereby REMANDED to the trial court only for the purpose of determining the price and consideration to be paid by plaintiffs-appellants for redeeming their respective landholdings. Considering that they had validly and promptly exercised their right of redemption according to law. No. Dizon to turn over the net proceeds of the sugar cane production for the crop year 1991-1992 to the OIC and Branch Clerk of Court of the RTC. et al.R. 108591. complied with the jurisdictional requirements of Section 12 of R. the DARAB rendered a Decision setting aside the June 5. et al. Let the Land Bank of the Philippines be impleaded as a party defendant. 3844.R. on valid tender of payment and consignation and on the timely exercise of their right of redemption. c.

R. 1990 which dismissed for the second time Arcega. 1994. No.777. In effect. and. et al.R.R. Arcega. spouses Mallari question the June 9. spouses Mallari filed with this Court their fourth petition for review on certiorari. spouses Mallari challenge the April 30. 109452. et al. 1990 directing Arcega.70 as rentals for the agricultural years 19821983 to 1989-1990. Consequently. failed to exercise their right of redemption. 106615 before this Court. et al. the RTC. No. et al. 1992 directing them to deliver to the Mallari spouses their shares corresponding to the agricultural crop year 1991-1992. et al.R. 15 which noted that "the holding in abeyance of the DARAB cases is the prudent and proper course to take in the meantime" in view of the pendency of G. 1993 Decision. the Mallari spouses filed with this Court their third petition for review on certiorari. R. 106615. 109978. 1992 and January 14. the said orders held that Arcega.R. this time challenging the CA Decision dated April 30.R. In G. 109452. and whether or not the period to redeem has expired. erred in affirming the DARAB Decision suspending the proceedings in DARAB Case Nos. The issue here is whether or not the LBP Certification to Finance the Redemption is a sufficient compliance with the jurisdictional requirements of Section 12. 1992 requiring Arcega. 1993 which recognize spouses Mallari's right to demand payment of back rentals for the agricultural crop year 1991-1992.A. docketed as G. No. No. November 12. 1993. did not exercise their right of redemption. 1992 CA Decision reversing the RTC Decision dated November 8. filed with the CA a petition for certiorari impugning the said November 4.'s petition for redemption in Agrarian Case No.R. Arcega. On June 2. No. to render an accurate accounting or report on the number of truckloads/tons of sugarcane produced from their landholdings for the crop year 1991-1992. 16 This CA decision set aside. 106615. Disregarding the above pending incidents. No. spouses Mallari contend that the CA. 108591. . 1908. Thereupon. No.R. 139379 assailing the said CA Decision. On July 9. December 2.745. 1992. 1999. In G. In G. et al. 1992. In G. 1994 RTC Order. Both orders are again based on the RTC's finding that Arcega. in its March 10. on November 4.dated March 10. 144-P '89 to 160-P '89. to render an accounting on the sugarcane produced from their landholdings for the crop year 1991-1992. et al. to pay the couple P1. 3844. as amended. 1992 directing them to deliver to spouses Mallari their shares in the sugarcane production by way of annual rentals for the agricultural crop year 1991-1992. and the Order dated May 14. the RTC a) Order dated February 5. et al. b) Order dated May 14. 109978. 1992 which required Arcega. docketed as G. 1993. issued an Order 17 granting the Mallari spouses' motion for the issuance of an alias writ of execution of the Order dated June 18. Following is the enumeration of the present consolidated petitions specifying the issues involved. No. docketed as G. 1993. assail the validity of the RTC Orders dated November 3. This prompted spouses Mallari to file with this Court another petition for review on certiorari. No. for having been issued with grave abuse of discretion. No. the CA rendered a Decision 18 holding that the issue on the payment of the redemption price is pending resolution by this Court (for the second time) in G. 1993 CA Decision reversing and setting aside the RTC Order dated February 5.R.

R. the Mallari spouses assail the validity of the July 9. No. xxx xxx xxx "The Department of Agrarian Reform shall initiate. 139379.R. Lessee's right of redemption.e. That where there are two or more agricultural lessees.A. 6389. and shall have priority over any other right of legal redemption.A. to pay the couple back rentals for the agricultural years 1982-1983 to 1989-1990. et al.A. No. 106615.. i. Section 12 provides: "SEC. complied with the jurisdictional requirements regarding tender of payment and consignation and their timely exercise of the right of redemption under Section 12 of R. while the Land Bank shall finance said redemption as in the case of pre-emption. such right of redemption has not yet prescribed because no notice in writing of the sale was ever given by the vendee upon the tenants as agricultural lessees of the land. — In case the landholding is sold to a third person without the knowledge of the agricultural lessee. If the tenants (the herein private respondents) had the right to redeem the property under the law upon the sale of the property to PNB in 1978. No. 3844. as amended. the Mallari spouses challenged the CA decision before this Court in G. 12. can exercise their right of redemption under Section 12. in G. No. This order of dismissal was reversed by the CA which remanded the case to the RTC for further proceedings. The right of redemption under this Section may be exercised within one hundred eighty days from notice in writing which shall be served by the vendee on all lessees affected and the Department of Agrarian Reform upon the registration of the sale. on the grounds that: (1) the Certification issued by the LBP did not constitute a valid consignation of the redemption price. No. and resolved the said issue in favor of Arcega.In G. The redemption price shall be the reasonable price of the land at the time of the sale. 1982. It bears stressing that the resolution of the issues raised in the present consolidated petitions hinges on the determination of the issue in G. Thus. L-61093. It must be recalled that Arcega. as required by law. 106615. and (2) the petition for redemption was filed beyond the 180-day period as required by law. as amended by R. et al.'s petition for redemption in Agrarian Case No. we now consider G. the latter shall have the right to redeem the same at a reasonable price and consideration: Provided. affirmed the CA decision. et al..R. R. L-61093.R. 1908 was first dismissed by the RTC on January 27.R. thus: "Petitioners' (Mallari spouses) contention is without merit. et al. 1999 CA Decision setting aside the RTC Order of November 4. No. However. No. whether or not Arcega." (Emphasis ours) This Court. No. The PNB was made a party-defendant in the petition for redemption filed by private respondents (tenants) with the Court of Agrarian Relations. et al. raising the issue of whether or not Arcega. 1994 which required Arcega. and the PNB has not appealed the decision of the Intermediate Appellate Court holding that the private respondents had the right to redeem the property as the . 3844. each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him.

agricultural lessees thereof. he may consign it with the court . Expectedly. ' True. the same is hereby DISMISSED. "Section 11 of R. rendered the November 8. again appealed to the CA the RTC Decision. A certification from the Land Bank to finance the redemption when presented will suffice. on the price of the landholding to the agricultural lessor. . . said redemption as in the case of pre-emption. xxx xxx xxx "The appellate court correctly ruled that it is not necessary for the lessee to make a tender of payment and/or consignation of the amount of redemption price. said provision does not appear in Section 12 thereof.. However." 19 (Emphasis Ours) In violation of this Court's ruling. . . prescribes the period within which the right of redemption must be exercised by the agricultural lessees. [he] must either tender payment of. et al. in its June 9. 1990 Decision dismissing for the second time Arcega. No. L-61093. . But certainly there is nothing in the law which provides that without such written notice. the agricultural lessees can not exercise their right of redemption. No. Arcega. through Judge Norberto Ponce. there is no doubt that within the context of the Code and in line with this Court's exhortation that a liberal interpretation of the Code's provisions is imperative.'s petition for redemption based on the very same grounds which were already passed upon and rejected by this Court in G.' Hence. invoking this Court's pronouncement in G. which is one hundred eighty days from written notice from the vendee of the property upon registration of the sale. have no cause of action against them simply because the deed of conditional sale executed in their favor by the PNB has not yet been registered. The CA. 3844. L-61093. No. it is not necessary for tenants-redemptioners to make a tender of payment and/or consignation of the redemption price. "SO ORDERED. . . If the agricultural lessee agrees with the terms and condition of the sale . it is explicitly provided in Section 12 that `the Department of Agrarian Reform shall initiate while the Land Bank shall finance. as amended. the lessee-preemptioner and the lessee-redemptioner have the same rights and are in the same footing and category insofar as the availment of the facilities of the Land Bank and the Ministry of Agrarian Reform are concerned. as amended. as agricultural lessees of the land. being the transferee of the land in question by virtue of the unregistered deed of conditional sale.R. If the latter refuses to accept such tender or presentment. et al. . the RTC. 3844. . which refers to the lessees' right of redemption. Moreover. to give it full force and effect to its clear intent. . . Insofar as the petitioners are concerned. "Republic Act No. . 1992 Decision. finding the petition without merit. . "Accordingly. stressed that the questions .R. . with costs against petitioner. or present a certificate from the Land Bank that it shall make payment . and that a certification issued by the Land Bank that it will finance the redemption of the property in question is sufficient. is a provision on the lessee's right of pre-emption and provides that: `. they can not claim that the tenants.A.

Reyes. No." as eloquently declared by Justice J. Under Section 11. 1982. The RTC ruling is erroneous. No." since the court a quo "had never. 1992.A. nothing more. L-61093 should not have reached this Court once more. et al. and that the said Certification "is equivalent to a consignation or tender of payment in court. No. as amended. The CA is correct. Jesli A. Arcega. 1992. as amended by R. from the time the Land Bank Certification dated January 15. 1908. The instant petition involving the same issues passed upon in G. especially of this Court. According to the RTC.A. 1908. "are deemed the cultivators-owners of their respective landholdings" under R. The RTC further noted that inasmuch as the LBP was not impleaded as a party in the Agrarian Case No. It should not have dismissed Arcega. this supervening event brushed aside and laid to rest the claim of Arcega. the subsequent cancellation by the LBP of its earlier Certification cannot affect the right already acquired by Arcega. signed by its President. 3844.R. acquired jurisdiction on the Land Bank. et al." The LBP is the agency of the Government mandated to finance the redemption under Section 12 of R.'s petition for redemption. No. A lower court cannot reverse or set aside the decisions or orders of a superior court. No. et al. as amended. through a letter dated September 11. Mr. We are dismayed by RTC Judge Norberto C.A. Ponce's non-adherence to our ruling in G. cancelled the LBP Certification of January 15.relative to Arcega. Republic Act No.R. We have sustained such right in our Decision in G. the trial court is empowered to drop or add a party to the case. 1982. 6389. as amended. et al.R.'s compliance with the jurisdictional requirements of Section 12. and that what the RTC should have done upon receipt of the records was to resolve the question on the reasonable amount of the redemption price. hence. et al. 3844. L-61093 which has acquired the character of res judicata and can no longer be challenged. no judgment of the court could be "binding and enforceable against the Land Bank. 20 It appears from the records that the LBP. Judge Ponce should know that it is the duty of the lower courts to obey the Decisions of this Court and render obeisance to its status as the apex of hierarchy of courts. Lapus. should be impleaded in Agrarian Case No. upon motion of any party "or on its own initiative at any stage of the action and on such terms as are just. L-61093." WHEREFORE: . in its Order dated November 3. As correctly held by the CA. were already passed upon by this Court in G. No.B.L. 3844. at any stage of the proceedings.A. for to do so will nullify the essence of review and negate the principle of hierarchy of courts.R. 3844." 21 Thus. to the subject landholdings. as agricultural lessees under R. as amended. 1982 was presented to the RTC on January 20. Rule 3 of the 1997 Rules of Civil Procedure. For "there is only one Supreme Court from whose decisions all other courts should take their bearings. L-61093.

The petitions of spouses Mallari in G. 30887 and CA-G. 7. San Fernando Pampanga for further proceedings with dispatch. No. Rollo of G.R.095. 36100 are AFFIRMED. et al. 25209. 106615.54 . No.R. Court of Appeals. November 12. J. 103-143. in G. Volume I. Rollo of G. 3. Footnotes 1. RTC Records.. 106615. 6. and 5. Panganiban and Carpio. pp. SP No. Melo.. RTC Records. 4. CA-G. CA-G. SO ORDERED. 40. No. abroad on official business. Agrarian Case No.1. 1992 and January 14. 607-608. 8. 11.R.. 1993 are REVERSED and SET ASIDE. I. p. 39-40. 82. 2. SP CAR No. December 2. JJ. The RTC is further ORDERED to submit to this Court a progress report of the status of Agrarian Case No. 41. pp. SP No. 1004-1009. No. p. Ibid. Ibid. 9. RTC Records.057. 3. pp.R. 4. Vol. pp. Mallari vs. p. 1908 is REMANDED to the RTC. The RTC is ORDERED to implead the LBP in Agrarian Case No. The petition of Arcega. 1908. 2. 161 SCRA 503 (1988). 109452. Ibid. 10. 178-181. Ignacio Arcega P 81. 227-232. 108591 is GRANTED and the appealed RTC Orders dated November 3. pp. Rollo of G. SP Case No. 2. 1908 every 3 months until this Court's Decision is fully implemented.R.R. Vitug. Branch 46. Broken down as follows: 1. concur.R.. IV. pp. 106615. 1992.R. 5. 30085.. Vol. 106615. 1992. Nos.R. 109978 and 139379 are DENIED and the assailed Decisions of the Court of Appeals in CA-G.65 Percasio Catacutan 165.

142-143.662. Albert vs. 36-37. pp. 108591. 8. No. No. 13. Ibid.508. pp.. 106615.971. Ibid. 29-34.. 13. 139379. 32-35. Rollo of G. .601. Mallari vs. 19. 106615. 6.035.47 Lorenzo Manarang 140. p. 14.R.777.949.3.309. 15. 104 SCRA 619 (1981). Ben Garcia 74. No.R.11 Juan Pangilinan 118. 12.14 Celestina Torno 170. 2-18. 14.475. 20.52 Alfredo de Guzman Marieta Jacinto 152. 49-51. pp. Rollo of G.31 Celestino Magat 102.R. Rollo of G.116. Rollo of G.R.28 Rafael Manalo 158. pp. 9. 11. 18. 50. pp.R.259. 508-510. No. citing Baltazar vs. Court of Appeals.02 Emilio de Mesa 133.R.25 91. 7. pp. 109978.031. 21. pp. No. 4.745.46 Vicente Mallari 94.80 Juanito Vital ————— Total P1. 25-34. No.705.04 Torobia Serrano94.23 12.70 168. 16. pp. 109452. Court of First Instance of Manila. 5. 23 SCRA 948 (1968). Court of Appeals. Rollo of G. 10. supra. 17. Rollo of G.

2002 FRANCISCO N. Jr. which lacks force for adjudication. however. the CA reversed the trial court's orders by: enjoining the private prosecutor from appearing for petitioner Villanueva. Jr. two complaints for falsification of public documents were filed. ET AL. No. Jr. COURT OF APPEALS and ROQUE VILLADORES. Thus. 142947 March 19. for private respondent. The trial court denied the motion for disqualification on the ground that the aforecited reason for the motion was a mere obiter dictum. as an offended party was not necessary. I n c. ruling: that the pronouncement of the CA to the effect that petitioner Villanueva. SYNOPSIS Petitioner Villanueva. vs.. COURT OF APPEALS. is not an offended party in the criminal cases is not an obiter dictum as it touched upon a matter clearly raised by respondent Villadores in his petition assailing the admission of the Amended Informations. SECOND DIVISION [G. 2002. appearing as the offended party. While the CA admitted that the addition of petition Villanueva. JR.C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a.] FRANCISCO N. VILLANUEVA. and in ordering the name of petitioner Villanueva. G. VILLANUEVA. Jr. as a result of the crimes committed by the accused.R. respondent Villadores moved for the disqualification of the private prosecutor for petitioner Villanueva. Jr.R. IBC 13. in line with the pronouncement of the CA in its decision that petitioner Villanueva. Jr. be stricken from the records. respondents. vs. prevailed. Subsequently. Rico & Associates for petitioner. among them. Subsequently. The trial court admitted the Amended Informations. it held that the admission of the amended informations due to that .. THE HON. Jr. The Solicitor General for public respondent. including herein respondent Villadores as an accused in said criminal cases. however. petitioner. IBC 13 appealed at the NLRC and filed an appeal bond. Jr.. The surety. Cecilio V. however. could not have sustained damages from the crimes because it was IBC 13 who secured the falsified surety bond to appeal from the labor case wherein petitioner Villanueva. Suarez. Jr. The CA also found no grave abuse of discretion on the part of the trial court in admitting the Amended Informations. Jr. the private prosecutor for petitioner Villanueva. On certiorari. filed a motion to admit Amended Informations alleging damages sustained by petitioner Villanueva. Jr. JR. No. 142947. March 19. in the criminal cases. filed a complaint for illegal dismissal against several parties. issued falsified documents for the appeal bond. When judgment was rendered in petitioner's favor. The Supreme Court affirmed the CA decision.

as an offended party is not necessary. did not by itself amount to grave abuse of discretion amounting to lack or excess of jurisdiction. an error of judgment that the court may commit in the exercise of its jurisdiction is not correctible through the original special . every error committed by a court would deprive it of its jurisdiction and every erroneous judgment would be a void judgment. was "whether Francisco N. When a court exercised its jurisdiction an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. Jr. Jr. but such did not amount to an error of jurisdiction. the pronouncement of the appellate court in CA-G. was the offended party was. by a judge. SP No. Jr. Otherwise stated. while the appellate court in CA-G.R. It is a remark made. there was an error of judgment. CASE AT BAR. made on some other ground. PROPER REMEDY TO CORRECT ERRORS OF JURISDICTION AND NOT ERRORS OF JUDGMENT. — All the foregoing issues boil down to the issue of whether or not the pronouncement of the appellate court in CA-G. CASE AT BAR. JUDGMENT. it held that the admission of the amended informations due to the amendment to include petitioner Villanueva. is the offended party. DEFINED." that is. or even though. OBITER DICTUM. and led up to the final conclusion.R. An obiter dictum has been defined as an opinion expressed by a court upon some question of law which is not necessary to the decision of the case before it. on the particular point. in his decision upon a cause. there is an error of judgment but such did not amount to an error of jurisdiction. aCTADI 2. 46103 to the effect that petitioner Villanueva. "by the way.R. SPECIAL CIVIL ACTIONS. Accordingly. If it did. CERTIORARI. Jr. or upon a point not necessarily involved in the determination of the cause. SP No.. or introduced by way of illustration. 46103 admitted that the addition of petitioner Villanueva. or opinion expressed. Argument on whether petitioner Villanueva. Villanueva. otherwise than it did. although only incidentally involved. the result reached might have been the same if the court had held.amendment did not by itself constitute grave abuse of discretion amounting to lack of jurisdiction. Among the issues upon which the petition for certiorari in CA-G. Otherwise stated. SP No. Jr. clearly raised by respondent Villadores. The body of the decision contains discussion on that point and it clearly mentioned certain principles of law.R. Such are not binding as precedent. It has been held that an adjudication on any point within the issues presented by the case cannot be considered as obiter dictum. incidentally or collaterally. which was availed of respondent Villadores. 94-138744-45 is obiter dictum. and not directly upon the question before him. REMEDIAL LAW. which are presented and decided in the regular course of the consideration of the case. or analogy or argument. The special civil action for certiorari. and this rule applies to all pertinent questions. thus. 46103 is not an obiter dictum as it touched upon a matter clearly raised by respondent Villadores in his petition assailing the admission of the Amended Informations. or might have been. a point expressly decided does not lose its value as a precedent because the disposition of the case is. Based on the foregoing. EFFECT. Thus. HSATIC SYLLABUS 1. and to any statement as to matter on which the decision is predicated. ID. 46103 was anchored. — Clearly then. is a remedy designed for the correction of errors of jurisdiction and not errors of judgment. ACTIONS. by reason of other points in the case. is not an offended party in Criminal Cases Nos. SP No.

SP No. However.. "People of the Philippines v. in Criminal Cases Nos.. respectively. filed a complaint for illegal dismissal against several parties. IBC 13 filed Surety Bond No. both documents were subsequently found to be falsified. DaEATc Respondent Villadores is one of the accused in the amended informations in Criminal Cases Nos. on a petition for review before the Department of Justice (DOJ). Villanueva. Eulalio Diaz III were dismissed by the City Prosecutor's Office which." . Atty. Alberto Adriano and Rolando Advincula. 94-138744-45 which denied respondent Roque Villadores's motion for disqualification of Rico and Associates as private prosecutor for petitioner Francisco N. filed anew a Motion to Admit Amended Informations alleging damages sustained by private complainant. however. herein petitioner Villanueva. IBC 13.civil action of certiorari. The charges against respondent Villadores and Atty. Branch 41.R. and the motion for reconsideration thereof. 1993 supposedly issued by BF's Vice-President. IBC 13 appealed to the National Labor Relations Commission (NLRC). 94138744 and 94-138745 entitled.. Branch 41." for Falsification of Public Document before the Regional Trial Court of Manila. Jr. 1998 2 and December 4. Tomas Bernardo. Nonetheless. found probable cause against the other respondents. Rico and Associates. When the labor arbiter 4 ruled in favor of petitioner Villanueva. among them. SP No. It appears that petitioner Villanueva. In compliance.R. Roque Villadores. 2000 in CA-G. G (16) 00136 issued by BF General Insurance Company. SDHAcI DECISION DE LEON. The incident was referred to the City Prosecutor's Office by the trial court.. In effect. the appellate court in CA-G. Jr. Accordingly. Villanueva. as a result of the crimes committed by the accused. Following the arraignment of respondent Villadores. 46103 merely held that respondent Villadores chose the wrong remedy. Jr. 1998 3 of the Regional Trial Court of Manila. (BF) with the Confirmation Letter dated September 20. Thus. the two (2) complaints for falsification of public document were filed before the Manila City Prosecutor's Office.. JR. Inc. Jr. the latter affirmed the dismissal against Diaz but ordered the inclusion of respondent Villadores as an accused in the two (2) criminal cases. Jr. the fiscal's office submitted a Motion to Admit Amended Informations with the following amendment: "to the prejudice of Francisco N. and of public interest and in violation of public faith and destruction of truth as therein proclaimed. 5 As an appeal bond. 50235 reversing the two (2) Orders dated August 27. J p: Before us is a petition for review on certiorari of the Decision 1 of the Court of Appeals dated April 12. the original informations were amended to include respondent Villadores among those charged. the private prosecutor.

46103. thus: A reading of the aforecited decision of the Court of Appeals clearly shows that the aforecited reason for the motion is a mere obiter dictum. 1997. 1997 denying his motion for reconsideration thereof. Jr.R. SP No. Entote. before Branch 41 of the Regional Trial Court of Manila. Jr. Said petition. 8 Subsequently. 1997 which admitted the second amended informations. 1998 the trial court denied the motion for disqualification ratiocinating. Jr. SP No. found that the trial court committed no grave abuse of discretion in admitting the amended informations and dismissed the petition of respondent Villadores. It must be underscored that it was IBC 13 who secured the falsified surety bond for the purpose of the appeal it had taken from an adverse judgment of the labor case filed by Francisco N. respondent Villadores moved for the disqualification of Rico and Associates as private prosecutor for petitioner Villanueva. As held by the Supreme Court. 7 The decision in CA-G. 46103 became final and executory on July 18. 57 SCRA. sought to annul the Order of the trial court dated October 10. 1998. which in effect upheld and/or affirmed the questioned Order of this Court admitting the amended informations. respondent Villadores interposed on November 26. Villanueva. If there be anyone who was prejudiced. Respondent Villadores subsequently filed a Manifestation and/or Motion for Reconsideration but the same was denied in an Order dated October 24. to wit: 10 Incidentally. acting thru its Eleventh Division.The Motion was granted by the trial court and the amended informations were admitted in an Order dated October 10. 6 IEDHAT In a Decision dated June 22. Thus. the appellate court.R. It is merely an expression of an opinion with no binding force for purposes of res judicata (City of Manila vs. Rico and Associates opposed said motion on the ground that the above-quoted pronouncement of the appellate court is a mere obiter dictum. . an obiter dictum lacks force of adjudication. 508-509). 11 In an Order 12 dated August 27. Jr. 1974. June 28. What is controlling is the dispositive portion of the subject decision of the Court of Appeals which denied due course and ordered dismissed the petition of the movant questioning the Order of this Court granting the Motion to Admit Informations and admitting the Amended Informations that include the name of Francisco N.R. 1998. Villanueva. 46103. 1997. We are one with the petitioner when it argued that Francisco N. 9 in line with the following pronouncement of the appellate court in CA-G. himself and wherein the latter prevailed. it was IBC 13 when it purchased a fake surety bond. SP No.. as the private offended party. 1997 a petition for certiorari with the Court of Appeals. which was docketed as CA-G. as well as the Order dated October 24. Villanueva. We see no reason how Villanueva could have sustained damages as a result of the falsification of the surety appeal bond and its confirmation letter when it could have even redounded to his own benefit if the appeal would be dismissed as a result of the forgery. is not the offended party in these cases.

COURT OF APPEALS UPHELD THE AMENDMENT OF THE INFORMATIONS IN SAID CASES TO STATE THAT THE CRIMES WERE COMMITTED TO THE PREJUDICE OF FRANCISCO N. 1998. IS AN OFFENDED PARTY IN CRIMINAL CASE NOS. JR. SP NO. VILLANUEVA. DESPITE THE FACT THAT IN CA-G. COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE NAME OF FRANCISCO N.R. 50235. JR. 94-138744-45 be stricken out from the records. VILLANUEVA. 94-138744-45. 46103 to the effect that petitioner Villanueva. AND PURSUANT TO THE DOCTRINE OF RES JUDICATA. this petition anchored on the following grounds: 17 THE HON. 16 Hence. APPEARING AS THE OFFENDED PARTY BE STRICKEN FROM THE RECORDS. 46103. JR. VILLANUEVA. 1999. SP NO. COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO APPRECIATE THAT THE MATTER OF WHETHER OR NOT FRANCISCO N. appearing as the offended party in Criminal Cases Nos.. 14 Thus. AS A MERE OBITER DICTUM. 1998 denying the Motion for Disqualification as well as its subsequent Order dated December 4.R.Reconsideration 13 was sought by respondent Villadores but the same was denied by the trial court in its Order dated December 4. COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO CONSIDER THE PRONOUNCEMENT IN CA-G. 2000. THE SAME COULD NO LONGER BE RELITIGATED IN CA-G. 1998. SP No.R. VILLANUEVA. THE HON. 94138744-45 HAD BEEN RESOLVED WITH FINALITY IN THE AFFIRMATIVE IN CA-G. IS NOT AN OFFENDED PARTY. on January 7. VILLANUEVA. Jr. THE HON. WAS IN FACT AN AGGRIEVED PARTY. JR. SaHTCE . the appellate court rendered its now challenged decision which reversed and set aside the two (2) Orders of the trial court dated August 27.R. Jr..R. COURT OF APPEALS SERIOUSLY ERRED IN ENJOINING RICO & ASSOCIATES FROM APPEARING AS PRIVATE PROSECUTOR AND/OR AS COUNSEL FOR FRANCISCO N. VILLANUEVA. THE HON. SP NO. JR. 94-138744-45 is obiter dictum. IN CRIMINAL CASE NOS. THE HON. The appellate court directed that the name of petitioner Villanueva. SP NO. JR. SP No.. IT UPHELD THE AMENDMENT OF THE INFORMATIONS SO AS TO STATE THAT THE CRIMES CHARGED WERE COMMITTED TO THE PREJUDICE OF FRANCISCO N. 15 On April 12. 50235. COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO APPRECIATE THAT FRANCISCO N. seeking the annulment of the trial court's Order dated August 27. 46103 THAT FRANCISCO N. 46103 WHERE THE HON. 1998 denying reconsideration. docketed therein as CA-G. VILLANUEVA. is not an offended party in Criminal Cases Nos. respondent Villadores filed a petition for certiorari with the Court of Appeals.. 1998 and December 4. JR.. All the foregoing issues boil down to the issue of whether or not the pronouncement of the appellate court in CA-G.R.

in substance or form. 46103 was anchored. which are presented and decided in the regular course of the consideration of the case. and none of such points can be regarded as having the status of a dictum. SP No. Jr. but the court actually decides all such points.An obiter dictum has been defined as an opinion expressed by a court upon some question of law which is not necessary to the decision of the case before it. and this rule applies to all pertinent questions. was the offended party was. However. and not directly upon the question before him.R. Amendment. So. which is quoted hereunder: SEC. was "whether Francisco N. the appellate court had this to say: At the centerfold of this controversy is Section 14 of Rule 110. or opinion expressed. SP No. or introduced by way of illustration. A decision which the case could have turned on is not regarded as obiter dictum merely because. although only incidentally involved. It has been held that an adjudication on any point within the issues presented by the case cannot be considered as obiter dictum. incidentally or collaterally. when that decision is carefully and thoroughly read. Jr." that is. made on some other ground. and one point should not be denied authority merely because another point was more dwelt on and more fully argued and considered. "by the way. and led up to the final conclusion. In denying the petition for certiorari in CA-G. 18 Based on the foregoing. the result reached might have been the same if the court had held. otherwise than it did. The body of the decision contains discussion on that point and it clearly mentioned certain principles of law. the case as an authoritative precedent as to every point decided. at any time before the accused pleads. Such are not binding as precedent. 1st paragraph. 20 The decision of the appellate court in CA-G. be regarded as dicta. and to any statement as to matter on which the decision is predicated. also. or even though. such conflict is revealed to be more illusory than real. on the particular point. brought forward after the case has been disposed of on one ground. or upon a point not necessarily involved in the determination of the cause. 46103. Villanueva. thus. Accordingly. SP No. It is a remark made. by reason of other points in the case. nor does a decision on one proposition make statements of the court regarding other propositions dicta. clearly raised by respondent Villadores. owing to the disposal of the contention.R. without leave of court. a point expressly decided does not lose its value as a precedent because the disposition of the case is. it was necessary to consider another question. and thereafter and during the trial as to all . — The information or complaint may be amended. SP No.R. 14. nor can an additional reason in a decision. 46103 allegedly show a conflict between the pronouncements in the body of the decision and the dispositive portion thereof. 19 Argument on whether petitioner Villanueva. or might have been. the pronouncement of the appellate court in CA-G. Among the issues upon which the petition for certiorari in CA-G.R. where a case presents two (2) or more points. 46103 is not an obiter dictum as it touched upon a matter clearly raised by respondent Villadores in his petition assailing the admission of the Amended Informations. in his decision upon a cause. is the offended party. by a judge. or analogy or argument. any one of which is sufficient to determine the ultimate issue.

the crime of falsification of public document does not require for its essential elements damage or intent to cause damage. no leave of court is necessary and the prosecution is free to do so even in matters of substance and in form. In essence. accused petitioner is not in any way prejudiced in his rights with such amendment which. would no longer be available after the amendment is made. the test as to when the rights of an accused are prejudiced by the amendment of a complaint or information is. What seems to be more crucial here is the fact that the crime charged in the two informations is falsification of public document committed by a private individual defined and penalized under Article 172. In the final analysis. Madayag. would no longer be available after the amendment is made. Accordingly. Teehankee vs." Needless to state. supra]. even if the amendment is only as to matter of form. 211 and Aquino. Mateo. 96 Phil. in Our considered opinion. the inclusion of the name of Francisco N. any evidence the accused might have under his defense in the original informations is still very much available to him and applicable to the amended informations. Donato. the more complicated situation involves an amendment sought after the accused had already been arraigned. Jr.. Reyes. when the same can be done without prejudice to the rights of the accused. 913. as the prejudiced complainant in the cases appears to be not substantial. 1886. would be inapplicable to the complaint or information as amended [People vs. supra]. Po Giok To. 66 SCRA 38 (1975). Teehankee vs. amendment of a criminal charge sheet depends much on the time when the change is requested. 13th Division. In sum. 1976 ed. 984]. Given the above aphorisms. and when any evidence the accused might have. which is. only as to matters of form when the same can be done without prejudice to the rights of the accused [Draculan vs. Villanueva. Madayag. p. All other matters are merely of form [Almeda vs. by leave and at the discretion of the court. Conformably. when a defense under the complaint or information. that it should not be prejudicial to the accused. Apropos. p. People vs. 324. Likewise. the primary consideration is whether the intended amendment is only as to matter of form and same could be done without prejudice to the rights of the accused. Pacana. . see Revised Penal Code. alter or modify the crime charged nor any possible defense. of the Revised Penal Code. In other words. Vol. Montenegro. the evil sought to be punished and sanctioned by the offense of falsification of public document is the violation of the public faith and the destruction of the trust as therein solemnly proclaimed [People vs. Teehankee vs. and when any evidence the accused might have. paragraph 1. Villaluz. Luis B.matters of form. Substantial amendment as a consequence is proscribed. is only a matter of form under the standards laid down in the cases above-cited. On the other hand. If before arraignment it is a matter of right. one other criteria must accompany it for its admission. as it originally stood. citing Decisions of the Supreme Court of Spain of December 23. Madayag. the inclusion of the name of Francisco N. Relative to the second instance. 159 SCRA 236 (1988). 25 Phil. This time amendment can only be made by a prior leave and at the discretion of the court. 207 SCRA 134 (1992)]. 47 Phil 48. 140 SCRA 425 (1985). It did not change. substantial matters in the complaint or information is the recital of facts constituting the offense charged and determinative of the jurisdiction of the court. 2.

Jr. We are in one with the petitioner when it argued that Francisco N. is a remedy designed for the correction of errors of jurisdiction and not errors of judgment. 46103 merely held that respondent Villadores chose the wrong remedy. SP No. the appellate court in CA-G. It is significant to mention that the intervention of petitioner Villanueva. If there be anyone who was prejudiced. Jr. DHcESI The special civil action for certiorari. 25 and not raised in criminal cases before the trial court as a ground for his inclusion as a "prejudiced party. must fail.Villanueva. a meaningless surplusage therein. 24 However. himself and wherein the latter prevailed. did not by itself amount to grave abuse of discretion amounting to lack or excess of jurisdiction. Incidentally. In fact. cAHIST . It cannot be legally used for any other purpose [Silverio vs. Thus. as an offended party is not necessary. 28 SCRA 891 (1969)].R. Jr. every error committed by a court would deprive it of its jurisdiction and every erroneous judgment would be a void judgment. We see no reason how Villanueva could have sustained damages as a result of the falsification of the surety appeal bond and its confirmation letter when it could have even redounded to his own benefit if the appeal would be dismissed as a result of the forgery. We find no grave abuse of discretion on the part of the lower court in admitting the second amended informations albeit such amendment is totally irrelevant and unnecessary to the crime charged. Jr. Otherwise stated. The mere fact that the court decides the question wrongly is utterly immaterial to the question of jurisdiction [Estrada vs. Sto Domingo. there is an error of judgment but such did not amount to an error of jurisdiction. When a court exercised its jurisdiction an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. it was IBC 13 when it purchased a fake surety bond. Jr. Villanueva. And writs of certiorari are issued only for the correction of errors of jurisdiction or grave abuse of discretion amounting to lack or in excess of jurisdiction. such alleged error should have been brought by petitioner Villanueva. in IBC's appeal of the illegal dismissal case. Viewed from the above ratiocinations. in the criminal cases as an offended party is apparently predicated 23 on the reduction by the NLRC. is not the offended party in these cases. If it did. would then be merely a superfluity in the information. an error of judgment that the court may commit in the exercise of its jurisdiction is not correctible through the original special civil action of certiorari. Court of Appeals." In view of all the foregoing. 21 Clearly then. while the appellate court in CA-G. 22 In effect. it held that the admission of the amended informations due to the amendment to include petitioner Villanueva. SP No. 141 SCRA 527 (1986)]. 46103 admitted that the addition of petitioner Villanueva. being devoid of merit. of the monetary award to which he is entitled. it is even highly doubted if civil damages may be awarded in such transgression of the law. which was availed of respondent Villadores. Jr. It must be underscored that it was IBC 13 who secured the falsified surety bond for the purpose of the appeal it had taken from an adverse judgment of the labor case filed by Francisco N. despite finding the appeal as not perfected due to the posting of the spurious appeal bond.R. Villanueva. Jr. the instant petition. to the appropriate forum.

pp. 8. 11. 276 SCRA 212. 291. 258. p. supra. 255-266. pp. pp. supra. Penned by Judge Rodolfo A. Regino. the instant petition is hereby DENIED.. and the Decision of the Court of Appeals dated April 12. 33-34. 10. 2000 in CA-G. Jr. pp. 55-56. Rollo. Rollo. Court of Tax Appeals. 47-53. Rollo. 13. See Note No. 223 [1997]. Quisumbing and Buena. Rollo. Former Fourth Division. 17. Vasquez. pp. 120 [1974]. Footnotes 1. pp. 2. Rollo. 15. Bellosillo. . Rollo. 005714-93. pp. 2. Rollo. SP No. pp. 300-303. 3. No costs. 50235 is AFFIRMED. 00-03-01890-92. 54. Martin. 289-290. concur. Rollo. Auyong Hian v. Mendoza. 18. 311-318. pp. See Note No. Docketed as NLRC-NCR CA No. Ponferrada. See Note No. Jr. JJ. p.WHEREFORE. and Teodoro P. 14. 9. Court of Appeals. Lorenzo in NLRC-NCR Case No. 3. 7. pp. p. 5. 292-294. Rollo. Penned by Associate Justice Bernardo P. 12. Abesamis and concurred in by Associate Justices Conchita Carpio-Morales and Candido V. 19. 16. Penned by Associate Justice Conrado M. SO ORDERED. 59 SCRA 110. Penned by Labor Arbiter Oswald B. 295-299. and concurred in by Associate Justices Fermin A. 6. 4. Delta Motors Corporation v.R. 1. Rollo. 284-290. Rollo. Rivera. Rollo. supra. Rollo.

and JOSE ABRAZALDO. I n c G.R. 24. No. petitioners. They assailed the findings of facts and conclusions of law made by the Board. 144817. actively participated in the proceedings. petitioners received an adverse judgment. Martin Funeral Homes v. They. Vinoya for private respondent. COURT OF APPEALS and SERGIO O. Pedro G. They went to . pp. respondents.] JOSE OCA. 64-76. Petitioners denied the allegation of respondent. petitioners elevated the case to the Court of Appeals on a petition for review on certiorari. vs. the Supreme Court En Banc declared that "all appeals from the NLRC to the Supreme Court via petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure should henceforth be initially filed in the Court of Appeals as the appropriate forum for relief desired in strict observance of the doctrine on the hierarchy of courts. pp. 21. March 7. vs. SYNOPSIS Respondent." C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. 21 Corpus Juris Secundum § 190. Department of Agrarian Reform Adjudication Board (DARAB) against petitioners. Judgment was rendered in favor of respondent who was declared a bona fide tenant of the property. leasehold and damages with the Office of the Provincial Adjudicator. 23. National Labor Relations Commission. 407-408. 2002 JOSE OCA. Jamer v. the case does not fall within the jurisdiction of the Provincial Adjudicator. 646 [1997]. NLRC. Italics supplied.R. Rollo. Magno for petitioners. COURT OF APPEALS. Rollo.20. GUTLAY. In St. Petitioners appealed to the Department of Agrarian Reform Adjudication Board which affirmed in toto the decision of the Provincial Adjudicator. 287-290. 278 SCRA 632. 2002. FIRST DIVISION [G. Rollo. RODOLFO O. ISABELO OCA. ET AL. pp." filed a complaint for peaceful possession. Again. claiming to be a "share-tenant-caretaker. 144817 March 7. however. 25. 39-40. Aggrieved. ABALOS. ET AL. Gabriel A. lessees of the subject fishponds. No. 295 SCRA 494 [1998]. 22. and that since respondent is not their tenant or caretaker.

ID. estoppel or waiver may operate as a shield to prevent a party from belatedly resorting to this form of defense. The rule is that the active participation of the party against whom the action was brought. ID. they voluntarily submitted to the jurisdiction of the adjudicator. Neither can they claim that they were prevented from contesting its jurisdiction during the eight years this case was under litigation. JURISDICTION OVER THE SUBJECT MATTER. In the first place.. is statutorily determined. 3. Such is the case in the case at bar where petitioners diligently participated in the proceedings below thereby voluntarily submitting to the jurisdiction of the adjudicator. however. This is evidenced by the fact that they have tendered responsive pleadings. ID... Such is understandable as this kind of jurisdiction. This kind of defense can be invoked even for the first time on appeal or after final judgment. However.. EXCEPTION. neither is it conferred by acquiescence of the court. CASE AT BAR. REMEDIAL LAW. coupled with his failure to object to the jurisdiction of the court or administrative body where the action is pending.. In highly meritorious and exceptional circumstances..this Court assailing the absence of jurisdiction of the Provincial Adjudicator over the subject matter of the action.. LACK OF JURISDICTION OVER THE SUBJECT MATTER CAN BE INVOKED EVEN FOR THE FIRST TIME ON APPEAL. ID. 2. or the Court of Appeals. this rule does not apply in cases of waiver or estoppel by laches. ID. It cannot be conferred by the voluntary act or agreement of the parties. Consequently. ACTIONS. Well to emphasize. — An error in jurisdiction over the subject matter can be objected to at any instance. Jurisdiction over the subject matter is conferred by the Constitution and the law and an error in this jurisdiction can be objected to at any instance. ID. their act or omission. it is neither for the courts nor the parties to violate or disregard the rule. Notwithstanding the presence of numerous opportunities in the various stages of this case to contest the adjudicator's exercise of jurisdiction. not once did they register a hint of protest. this matter being legislative in character. SYLLABUS 1. The petition was denied. they must not be allowed to deny his jurisdiction after submitting to it. petitioners diligently participated in the litigation below. is not absolute. we find the petitioners guilty of estoppel by laches. By their conduct. or waived or enlarged or diminished by. they never disputed the jurisdiction of the Provincial Adjudicator at any stage of the proceeding: whether in the Provincial Office level. DETERMINED EXCLUSIVELY BY THE CONSTITUTION AND THE LAW. Instead. In the case at bar. 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 DARAB. — The well-entrenched rule is that jurisdiction over the subject matter is determined exclusively by the Constitution and the law. — This rule on timing. ID. attended conferences participated in the hearings and appealed adverse decisions against them. . as the lack of it affects the very authority of the court to take cognizance of the action. to stress. it cannot be acquired through.

FILING OF COUNTERCLAIM. they would hire workers or laborers paid either on a daily or "piece-work" basis. with Motion for the Issuance of Interlocutory Order. the Adjudicator to "order the (petitioners) to fix with the (respondent) the lease rental of the parcels of fishpond.. — By filing a counterclaim. He allegedly has been performing all the phases of farm work needed for the production of bangus. Dagupan City. He then asserts that he has been in peaceful possession. It prayed for. they themselves are the cultivators and have not engaged any caretaker or tenant thereon. in consideration of the . in the amount representing 25% of the average net normal harvest of Bangus annually.. however. which are located at Bolosan and Mangaldan. is the sole and exclusive owner of two fishponds commonly called the "Perew" and the "Fabian" properties. 1992. respondent became their industrial partner over the Salayog property. when he requested from them his share of the harvest. respectively. They cannot now insist the want of it only after an unfavorable decision was issued against them. Lingayen. Instead of acceding to his request. The four petitioners are the civil law lessees of another called the "Salayog" property also located at Bolosan. while he gets the sari-sari fishes as his share. The only contribution of petitioners Jose and Isabelo Oca are their lands. Pangasinan. A Complaint for Peaceful Possession. Pursuant to the sharing agreement imposed by the petitioners. J p: This case arose from a dispute concerning tenancy relations over four parcels of fishpond property located in the province of Pangasinan. Pangasinan. that he had already waived his right as such. cultivation and care of the aforesaid fishponds from the time he received those from the petitioners Oca brothers until the first week of May 1992. among other things. Region I. though. subject of this case. 1999 with the Office of the Provincial Adjudicator. ID. Leasehold and Damages. They asserted that as owners or civil law lessees of the fishponds. petitioners demanded that he vacate the ponds. all the bangus produced from the above fishponds belong to them. petitioners denied that respondent is a tenant/caretaker of the fishponds subject of the present controversy. Abalos claims to be the "share-tenant-caretaker" of the above fishponds. ID. to afterwards deny that same jurisdiction to escape a penalty.. From time to time. Petitioners Jose Oca and Isabelo Oca are the co-owners of a fishpond known in the locality as the "Purong" property. HEacDA Respondent Sergio O." 2 In their Answer (with Counterclaim) filed on July 23. Petitioner Jose Oca. Department of Agrarian Reform Adjudication Board (DARAB). 1 was filed by the respondent against petitioners on July 9. EAcHCI DECISION PUNO. The party is barred from such conduct not because the judgment or order of the court is valid but because such a practice cannot be tolerated for reasons of public policy. situated in Bolosan. they recognized and expressly invoked the jurisdiction of the Provincial Adjudicator. on the other hand. ID. AN INVOCATION OF JURISDICTION. They insisted. Petitioners acknowledged that in 1985.4. 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 (by advancing a counterclaim).

WHEREFORE. 4. premises considered. work and care of the fishpond in question. In all other respects. Rule XIV of the Revised Rules of Procedure of the DARAB.000. As per "Agreement" dated October 5. the dispositive portion of which reads: "WHEREFORE. the Court of Appeals promulgated the presently assailed Decision. They prayed for the dismissal of the Complaint and payment of damages. 2000." 5 They grounded the petition on the alleged errors in the Board's finding of facts and conclusion of law. and that co-owned by petitioners Jose Oca and Isabelo Oca. The Board on April 18. and Enforcing the right of the plaintiff to become the agricultural lessee in the fishpond in question. Making permanent the restraining order for the Defendants (herein Petitioners) not to disturbed (sic) plaintiff's peaceful possession. private respondent consequently waived any interests he had thereon. Pangasinan to assist the plaintiff and defendants. SO ORDERED. They filed a Petition for Review on Certiorari. judgment is hereby rendered: 1. the Court takes exception to the finding of public respondent (DARAB) that private respondent (herein respondent) is a tenant with regard to the "Salayog" property. the Office of the Provincial Adjudicator issued a Decision in favor of the respondent. And having sold his share and interest on the "Salayog" property. to determine and fix the lease rentals of the fishpond in question.sum of P140. the Decision appealed from is MODIFIED. 2. the pertinent portion of which reads: LLpr "However. the Decision appealed from is hereby MODIFIED. Declaring the Plaintiff (herein Respondent) as bona fide tenant of the parcels of fishpond in question." 3 The above Decision was appealed by the petitioners to the Department of Agrarian Reform Adjudication Board. "pursuant to Section 54 of the Comprehensive Agrarian Reform Law in relation to Section 1. Consequently. 1992. they argued that since respondent is not their tenant or caretaker. 1985. petitioners (herein petitioners) and private respondent became civil law colessees with respect to said properties . . the case is not within the jurisdiction of the Provincial Adjudicator. Jose Oca and Isabelo Oca. private respondent is declared as bonafide tenant only with regard to the parcels of fishpond property exclusively owned by petitioner Jose Oca. which caused them grave and irreparable damages. On September 25. 4 Petitioners then sought relief with the Court of Appeals. 3. Ordering the Municipal Agrarian Officer of Mangaldan. . On August 18." 6 .00. 1996 affirmed in toto the Decision of the Provincial Adjudicator. To conclude.

they never disputed the jurisdiction of the Provincial Adjudicator at any stage of the proceeding: whether in the . Sibonghanoy 16 that a party may be barred by estoppel by laches from invoking this plea for the first time on appeal for the purpose of annulling everything done in the case with the active participation of said party invoking the plea. 10 An error in jurisdiction over the subject matter can be objected to at any instance." 18 In the case at bar. to stress. Did the Honorable Court of Appeals err in upholding or affirming the Decision of the DARAB in this case? 4. 12 This kind of defense can be invoked even for the first time on appeal 13 or after final judgment. could or should have been done earlier. we find the petitioners guilty of estoppel by laches. their act or omission. In the first place. nor in the Court of Appeals?" 7 The petition is bereft of merit. we have held in the leading case of Tijam v. or waived or enlarged or diminished by. to do that which. like the subject matter of this case. however. covered by the Comprehensive Agrarian Reform Law. this matter being legislative in character. is statutorily determined. Does the Department of Agrarian Reform Adjudication Board have jurisdiction over cases involving fishponds? 3. it is neither for the courts nor the parties to violate or disregard the rule. such that controversies relative to production or tillage therein come under the jurisdiction of the Department of Agrarian Reform Adjudication Board? 2. They advanced a new argument assailing the supposed lack of jurisdiction of the Provincial Adjudicator over the subject matter of the action. In highly meritorious and exceptional circumstances. 17 We defined laches as "failure or neglect for an unreasonable and unexplained length of time. it cannot be acquired through. It is negligence or omission to assert a right within a reasonable time. is not absolute. neither is it conferred by acquiescence of the court. by exercising due diligence. We begin where petitioners ended. Could the issue of jurisdiction be raised for the first time on Appeal in the Supreme Court. warranting presumption that the party entitled to assert it has abandoned it or has declined to assert it. STcEIC The well-entrenched rule is that jurisdiction over the subject matter is determined exclusively by the Constitution and the law. 15 This rule on timing. 14 Such is understandable as this kind of jurisdiction. Are fishponds. The jugular issue is can they be permitted to impugn for the first time the jurisdiction of the Provincial Adjudicator at this stage of the case.Petitioners elevated the case before us and filed the instant petition. when the same has not been raised in the DARAB. 8 It cannot be conferred by the voluntary act or agreement of the parties. 9 Well to emphasize. They raised the following issues: "1. 11 as the lack of it affects the very authority of the court to take cognizance of the action. estoppel or waiver may operate as a shield to prevent a party from belatedly resorting to this form of defense. Thus.

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.J. A great deal of time. which upheld it in succession. compliance with what apparently is an inevitable legal obligation. Kapunan and Ynares-Santiago. not once did they register a hint of protest. By their conduct. Notwithstanding the presence of numerous opportunities in the various stages of this case to contest the adjudicator's exercise of jurisdiction. ASIETa SO ORDERED.. 20 It also bears emphasis that petitioners instituted a counterclaim against the respondent. The shift of stance in attacking solely the alleged lack of jurisdiction of the adjudicator is a flimsy ruse or excuse to delay. In their petition before us. Permitting petitioners to assail the jurisdiction of the Provincial Adjudicator at this late stage of the case would mean rendering useless all the proceedings held below. Cost against the petitioners. Consequently. The ends of justice and equity require that petitioners should not be allowed to defeat the tenant's right by belatedly raising the issue of jurisdiction. Davide. or the Court of Appeals. . The rule is that the active participation of the party against whom the action was brought.Provincial Office level. 19 Instead. 22 IDEHCa But this is not all. the instant petition is hereby DENIED. to afterwards deny that same jurisdiction to escape a penalty. if not totally avoid. They failed to question their findings of facts or conclusions of law. a tenant who cannot afford the discomforts of a protracted litigation. This is especially oppressive for the respondent. They prayed not only for the dismissal of the case but likewise asked for the payment of damages based on the latter's purported bad faith. effort and resources would be put to waste both on the part of the litigants and of the State. Jr. By filing a counterclaim. 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 (by advancing a counterclaim). IN VIEW WHEREOF. they voluntarily submitted to the jurisdiction of the adjudicator. they recognized and expressly invoked the jurisdiction of the Provincial Adjudicator.. they must not be allowed to deny his jurisdiction after submitting to it. coupled with his failure to object to the jurisdiction of the court or administrative body where the action is pending. This is evidenced by the fact that they have tendered responsive pleadings. petitioners only impugn the jurisdiction of the Provincial Adjudicator without arguing a single issue in respect of the merits of his Decision. Neither can they claim that they were prevented from contesting its jurisdiction during the eight years this case was under litigation. the DARAB. C. petitioners diligently participated in the litigation below. They cannot now insist the want of it only after an unfavorable decision was issued against them. finding no cogent reason to reverse or modify the assailed Decision. concur.. attended conferences participated in the hearings and appealed adverse decisions against them. 21 The party is barred from such conduct not because the judgment or order of the court is valid but because such a practice cannot be tolerated for reasons of public policy. JJ. as well as the Decisions of the DARAB and the Court of Appeals.

6. Judge Concepcion. p. 20. Marquez v. Ibid. Court of Appeals. 64. 957 (1918). 5. Ibid. 146 (1957). 18. 5. Docketed as Agrarian Case No. Rollo. 4. 19. 6. Supra note 12. Cruzcasa v. pp. p. p. Petition. La Campana Food Products. 7. supra. SP No. Tijam v. p. 13. 71. I n c . 8. Tijam v. 1039. 10. Remedial Law Compendium (1997). Court of Appeals. v. Sibonghanoy. 4. et al.R. Sibonghanoy. La Naval Drug Corporation v. p. 25. 236 SCRA 78 (1994). De Leon v. DARAB Case No. Rollo. p. 11. Petition. 8. p. 17. Decision. 16. 7-8. 21. La Naval Drug Corporation v.. 102 SCRA 370 (1981). 245 SCRA 166 (1995). p. supra. Rollo. Court of Appeals. Rollo. Complaint. 22. 50. 21-22. Decision. pp. 11. 40611. 14. Petition.Footnotes 1. 434-P-92. 223 SCRA 150 (1993). 15. Inc. Rollo. Director of Lands v. 101 Phil. CA-G. p. Court of Appeals. Rafferty. Rollo. I Regalado. 22. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. 8. 7. 9. Rollo. Roxas v. 171 SCRA 337 (1989). Secretary of Labor. 23 SCRA 29 (1968). 37 Phil. 2. p. Petition. p. Court of Appeals. 12. 21. p. 3.

considering that the three accused conspired with each other in convincing private complainants to apply for overseas job and giving them the guaranty that they would be hired as domestic helpers in Italy although they were not licensed to do so. contracting.R.R. vs. Espiritu for accused Karl Reichl.] PEOPLE OF THE PHILIPPINES. including referrals. KARL AND YOLANDA REICHL FIRST DIVISION [G. provided that any person or entity which. KARL REICHL. KARL REICHL and YOLANDA GUTIERREZ DE REICHL. 2002 PEOPLE OF THE PHIL. utilizing. including the prohibited practices enumerated under Article 34 of (the Labor Code). promising or advertising for employment. LABOR AND SOCIAL LEGISLATION. contract services. Nos. 141221-36 March 7. transporting. SPS. accused-appellants. plaintiff-appellee. to be undertaken by non-licensees or non-holders of authority. Appellants promised overseas employment to private complainants and required them to prepare the necessary documents and to pay the placement fees. although they did not have any license to do so. The prosecution was able to prove beyond reasonable doubt that appellants were engaged in activities that fall within the definition of recruitment and placement under the Labor Code.G. The law imposes a higher penalty when the illegal recruitment is committed by a syndicate or in large scale as they are considered an offense involving ." The term "recruitment and placement" refers to any act of canvassing. however. SYNOPSIS Appellants were found guilty of five counts of estafa and one count of syndicated and large scale illegal recruitment. could not be convicted for illegal recruitment committed in large scale based on several informations filed by only one complainant. and YOLANDA GUTIERREZ DE REICHL. enlisting. accused. SYLLABUS 1. locally or abroad. this appeal. hiring or procuring workers. Nos. March 7. offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. ILLEGAL RECRUITMENT. 141221-36. whether for profit or not. appellants are liable for illegal recruitment committed by a syndicate and estafa. ELABORATED. 2002. — Article 38 of the Labor Code defines illegal recruitment as "any recruitment activities. Hence. in any manner. The appealed decision was affirmed and the petition was dismissed. Renecio R. Hence. vs. Solicitor General for plaintiff-appellee. Appellants. FRANCISCO HERNANDEZ (at large).

2. Thus. NOT APPRECIATED. 6. although they did not have any license to do so. The acts of recruitment were committed from June 1992 until January 1993 in Batangas City. and that they paid the corresponding placement fee but were not able to leave the country.. UPHELD IN THE ABSENCE OF ILL MOTIVE. ID. Karl and Yolanda Reichl themselves gave assurances to private complainants that they would seek employment for them in Italy.. and then he returned to the Philippines and stayed in Batangas from October 21. ID.. PRESENT IN CASE AT BAR. EVIDENCE. The evidence on record shows that they promised overseas employment to private complainants and required them to prepare the necessary documents and to pay the placement fee. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction.. especially since they corroborate each other on the material points.. on the other hand. even if the spouses were staying in Manila. ID.. 1992 until September 19. CRIMINAL LAW. NOT AFFECTED BY MINOR INCONSISTENCIES.economic sabotage. it does not prevent them from going to Batangas to engage in their recruitment business. — It appears that the three accused worked as a team and they conspired and cooperated with each other in recruiting domestic helpers purportedly to be sent to Italy. PRESENT IN CASE AT BAR. — The minor lapses in the testimony of these witnesses pointed out by accused-appellants in their brief do not impair their credibility. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group.. ID. 1992. enterprise or scheme. Yolanda Reichl. ID. ID. claimed that he was in Manila on the dates alleged in the various informations.e. 1992. i. Francisco Hernandez remitted the . The defense has not shown any ill motive for these witnesses to falsely testify against accused-appellants if it were not true that they met with the Reichl spouses and the latter represented themselves to have the capacity to secure gainful employment for them abroad. that they met with the three accused several times. 4. DENIAL AND ALIBI. — Private complainants Narcisa Hernandez. 5. the prosecution was able to prove beyond reasonable doubt that accused-appellants engaged in activities that fall within the definition of recruitment and placement under the Labor Code. We do not see any reason to doubt the truthfulness of their testimony. ID. ETIHCa 3. CREDIBILITY OF WITNESSES. — In the case at bar.. Karl Reichl was in Manila from July 29. REMEDIAL LAW. There is illegal recruitment when one who does not possess the necessary authority or license gives the impression of having the ability to send a worker abroad. that the three accused promised to give them overseas employment. — Accused-appellants' defense of denial and alibi fail to impress us. CONSPIRACY. Leonora Perez and Charito Balmes categorically stated that Karl and Yolanda Reichl told them that they would provide them overseas employment and promised them that they would be able to leave the country on a specified date. It is of judicial notice that Batangas City is only a few hours' drive from Manila. It has been held that truth-telling witnesses are not always expected to give error-free testimonies considering the lapse of time and the treachery of human memory. Francisco Hernandez introduced Karl and Yolanda Reichl to the job applicants as his business partners.

Estafa under Article 315. 315 (2) of the Revised Penal Code provided the elements of estafa are present.000. ID.. we hold that accusedappellants should be held liable for illegal recruitment committed by a syndicate which is also punishable by life imprisonment and a fine of one hundred thousand pesos (P100. ESTAFA. influence. CRIMINAL LAW. be convicted of estafa under Art. a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. Thus. or by means of similar deceits executed prior to or simultaneously with the commission of the fraud. the offended party suffered damages. We note that each information was filed by only one complainant. WHEN PRESENT. When the Labor Code speaks of illegal recruitment 'committed against three (3) or more persons individually or as a group.000. The Court held in People vs. . ILLEGAL RECRUITMENT COMMITTED BY A SYNDICATE. Such act clearly constitutes estafa under Article 315 (2) of the Revised Penal Code.00. . In other words. NOT PRESENT WHERE SEVERAL INFORMATIONS WERE FILED BY ONLY ONE COMPLAINANT. fraudulent act or fraudulent means of the accused-appellant and as a result thereof. LABOR AND SOCIAL LEGISLATION. We agree with accused-appellants that they could not be convicted for illegal recruitment committed in large scale based on several informations filed by only one complainant. business or imaginary transactions. — Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction. in addition. TASCEc DECISION . Reyes: ". paragraph 2 of the Revised Penal Code is committed by any person who defrauds another by using a fictitious name. property. ILLEGAL RECRUITMENT IN LARGE SCALE. although they did not have any authority or license. prosecutions for single crimes of illegal recruitment can be cummulated to make out a case of large scale illegal recruitment.payments given by the applicants to the Reichl spouses and the latter undertook to process the applicants' papers. agency. The offended party must have relied on the false pretense. credit. otherwise. 7. or falsely pretends to possess power. — A person who is convicted of illegal recruitment may.' it must be understood as referring to the number of complainants in each case who are complainants therein.00) under Article 39 of the Labor Code. It has been shown that Karl Reichl. Yolanda Reichl and Francisco Hernandez conspired with each other in convincing private complainants to apply for an overseas job and giving them the guaranty that they would be hired as domestic helpers in Italy although they were not licensed to do so. each of the accused shall be equally liable for the acts of his co-accused even if he himself did not personally take part in its execution. PENALTY. enterprise or scheme defined under the first paragraph of Article 38 of the Labor Code. It is by this representation that they induced private complainants to pay a placement fee of P150. There being conspiracy. — Accused-appellants argue that the trial court erred in convicting accused-appellants of illegal recruitment in large scale by cumulating the individual informations filed by private complainants." DHSaCA 8. 9. qualifications. It has been proved in this case that accused-appellants represented themselves to private complainants to have the capacity to send domestic helpers to Italy.

spouses Karl and Yolanda Reichl. Karl Reichl and Yolanda Gutierrez Reichl in their personal capacities were neither licensed nor authorized by the POEA to recruit workers for overseas employment. 3 and where Karl Reichl pledged to refund to private complainants the total sum of P1. but she could not yet leave for Austria because the hotels were fully booked at that time because of the Christmas season. Narcisa's departure was again scheduled on January 5. Anicel Umahon. and two documents signed by the Reichl spouses where they admitted that they promised to secure Austrian tourist visas for private complainants and that they would return all the expenses incurred by them if they are not able to leave by March 24.00 representing the amounts they paid for the processing of their papers.000. Edwin Coleng. 6528. She paid the fee in three installments. Only the Reichl spouses were tried and convicted by the trial court as Francisco Hernandez remained at large. 6439. the second installment of P25. 6434.000. she also saw the other applicants Melanie Bautista. required her to pay the amount of P150. otherwise. 6437. Francisco Hernandez issued a receipt for the first and second installments 5 but not for the third. together with Francisco Hernandez. 1992 but was not able to do so. 1 In April 1993. 6438. the applicants met with the three accused at the residence of private complainant Charito Balmes and asked them to refund the payment if they could not send them abroad. Reichl promised to ensure private complainants' departure by April. The accused set the departure of Narcisa and that of the other applicants several times but these proved to be empty promises.000. was first to testify for the prosecution. She gave the money to Francisco Hernandez in the presence of the Reichl spouses at Matira's residence. 2 the receipts for the payment made by private complainants. 6529.00 on December 27. Analiza Perez and Maricel Matira. but it still did not push through. She paid the first installment of P50. 6 . 1992. they would return their payment. eight (8) informations for syndicated and large scale illegal recruitment and eight (8) informations for estafa were filed against accused-appellants. SITCcE The evidence for the prosecution consisted of the testimonies of private complainants. 1993.00 on July 14. 6429. She stated that Francisco Hernandez introduced her to the spouses Karl and Yolanda Reichl at the residence of a certain Hilarion Matira at Kumintang Ibaba. a teacher. The meeting resulted in an agreement which was reduced into writing and signed by Karl Reichl. Estela Manalo. Karl Reichl explained that she would get her transit visa to Italy in Austria. 6430. Karl and Yolanda Reichl told Narcisa that they could find her a job as domestic helper in Italy. In March 1993. 6431. Spouses Karl Reichl and Yolanda Gutierrez de Reichl guilty of five (5) counts of estafa and one (1) count of syndicated and large scale illegal recruitment. J p: This is an appeal from the Joint Decision of the Regional Trial Court. Batangas City in Criminal Case Nos. 6436. 6428. Batangas City.388. 1993. a certification from the Philippine Overseas Employment Administration (POEA) that Francisco Hernandez. At the time. Mr. Narcisa was scheduled to leave on December 17. 6432. They. 1992.PUNO. 6435.00 on August 6.000.924. 4 Private complainant Narcisa Hernandez. however.00 for the processing of her papers and travel documents. 6433. Narcisa stated that they went to Manila several times supposedly to obtain a visa from the Austrian Embassy and Karl Reichl assured her that she would be able to leave once she gets her visa. 1992 and the third in the amount of P75. 6530 and 6531 finding accused-appellants.

In August 1992. her sister. 1992. 1992. Francisco Hernandez did not issue a receipt for the payment made by Charito because he told her that he would not betray her trust. They gave various excuses for their failure to depart.000.00 to Yolanda Reichl. Like the other applicants. Some time in January 1993. Yolanda and Karl Reichl nonetheless assured Leonora of employment as domestic helper in Italy with a monthly salary of $1.000. On November 25. Zamora St. After three weeks. spouses Karl and Yolanda Reichl. however. corroborated the latter's testimony that she paid a total amount of P100. 1992. Francisco issued a receipt for the payment.00 to the three accused. Francisco Hernandez informed the applicants that their departure would be postponed to December 17. Karl Reichl constantly assured them that they would land a job in Italy because he had connections in Vienna. The Reichl spouses promised her an overseas job. December 17 came and the applicants were still unable to leave as it was allegedly a holiday. 7 Janet Perez.00 to Francisco Hernandez who delivered the same to the spouses. Karl Reichl signed a document stating that he would refund the payment made by the applicants plus interest and other expenses.000. They said she and the other applicants would leave on December 17. Leonora. On December 11. Charito was not able to leave the country despite the numerous promises made by the accused.. Francisco Hernandez told her to prepare P150.000. she gave P25. He also asked her to prepare her passport and other papers to be used to secure a visa. Thus. When she accepted the offer. Francisco Hernandez and the Reichl spouses told Leonora to wait for about three weeks before she could leave. Francisco Hernandez went to the residence of Leonora and collected the sum of P50.000. Leonora handed her payment of P50. Francisco Hernandez again handed the money to the spouses. Francisco Hernandez invited Leonora and the other applicants to the house of Hilarion Matira in Batangas City to discuss some matters. Analiza Perez. The promised employment. introduced her to Francisco Hernandez at their residence in Dolor Subdivision. They proceeded to Kumintang Ibaba.00 for the processing of her papers.000. When the applicants were not able to leave on the designated date. The document was executed and signed at the house of one of the applicants.300. Tired of the recruiters' unfulfilled promises. Francisco Hernandez and the Reichl spouses promised the applicants that they would leave for Italy on January 5. 8 Private complainant Charito Balmes told a similar story when she testified before the court. the applicants decided to withdraw their application. However. Batangas City. Batangas City. at P.00 purportedly for the plane fare. Yolanda assured her that she would be able to work in Italy. until finally the Reichls told the applicants that Karl Reichl had so many business transactions in the Philippines that they would not be able to send them abroad and that . never materialized.Private complainant Leonora Perez also gave the following testimony: In July 1992. She said that Francisco Hernandez convinced her to apply for the job of domestic helper in Italy and required her to pay a fee of P150. 1992. Charito paid P20. Leonora's sister. Francisco Hernandez turned over the payment to the spouses so that they could secure a visa for her.00 to Francisco Hernandez in the presence of the Reichls. 1993. went to Ramada Hotel in Manila to meet with Karl and Yolanda Reichl.00. Batangas City and Francisco Hernandez introduced her to his business partners. together with her sister and Francisco Hernandez.00 to Francisco Hernandez. Francisco Hernandez convinced her to apply for a job in Italy.000. On February 16.000. Francisco Hernandez and the spouses again made another promise. 1993. Charito Balmes. Charito paid the amount of P70. At said meeting.00.

1993. passport. 12 Three receipts were issued for the payments. 16 Mr. however. They stayed there until August 26. the mother of private complainant Melanie Bautista. Upon his arrival. Melanie made the initial payment of P50. The accused. Hence. 1992. The Reichls promised to take care of Estela's papers and to secure a job for her abroad. 1992. police clearance and marriage contract.000. Francisco Hernandez issued a receipt for the payment. The payments were made at the house of Hilarion Matira and were received by Francisco Hernandez who. He came to the country on July 29. 17 Karl Reichl returned to the Philippines on October 21.they would refund their payment instead.000. he and his wife.. The Reichls vowed to return the payment if they fail on their promise. On June 26. Prior to this date. remitted them to the Reichl spouses. Francisco Hernandez allegedly approached him and sought his help in securing Austrian visas purportedly for his relatives. he was in various places in Europe. 10 Upon receipt of the payment. 15 The defense interposed denial and alibi. Estela was also not able to leave the country. She stated that in May 1992. 14 They paid P50.000.00 to be used for the processing of her papers and plane ticket. testified that his wife applied for the job of domestic helper abroad. In June 1992. Yolanda Reichl. Francisco Hernandez told her to prepare P150.000. and P55. Reichl stated that he first met Francisco Hernandez through a certain Jimmy Pineda around August 1992 at Manila Midtown Hotel. Accused-appellant Karl Reichl. 1993 in the amount of P51. 1992. they went to another hotel in Quezon City. 1992. Realizing that said business would not be viable.000. Rustico and his wife prepared all the relevant documents.000. Francisco . Francisco Hernandez was allegedly looking for a European equipment to be used for the quarrying operation of his friend. He also planned to establish a tourist spot somewhere in Batangas. claimed that he entered the Philippines on July 29. an Austrian citizen. stayed at the Manila Intercontinental Hotel. 1992.000. the husband of private complainant Estela Abel de Manalo. Francisco Hernandez introduced them to Karl and Yolanda Reichl who were allegedly sending workers to Italy. Karl Reichl advised Francisco Hernandez to instead look for a second-hand equipment from Taiwan or Japan. Karl Reichl returned to Vienna on September 19. in turn. i. they executed an agreement which was signed by Karl Reichl and stating that they would return the amounts paid by the applicants.e. 1992. After they left Manila Midtown Hotel. 11 and another on January 3.000.00 on June 5. On one occasion. As with the other applicants. they moved to Manila Midtown Hotel. Elemenita Bautista.00 to Francisco Hernandez who was then accompanied by Karl and Yolanda Reichl. 1992 to explore business opportunities in connection with the import and export of beer and sugar. he made some research on the background of the intended business. and paid a total placement fee of P130. Melanie applied for an overseas job through Francisco Hernandez. 1992. did not comply with their obligation.00 on August 8. Melanie made two other payments: one on August 6. On August 3. P25.00. Before accepting the deal.00. 9 Mrs. 1992 in the amount of P25. also took the witness stand. Francisco Hernandez gave the money to Yolanda Reichl. He never saw Francisco Hernandez again until he left for Vienna in September 1992. Karl Reichl refused and told him that he was planning to stay permanently in the Philippines.00 on January 3.00. 1992. 13 Rustico Manalo.

thus. She said that several persons were harassing her and pressuring her to pay private complainants the sum of at least P50. The dispositive portion of the decision reads: "WHEREFORE.000. in the above-mentioned Criminal Cases Nos. He signed the document as he felt he had no other option. 6433. 18 In his testimony before the trial court. Francisco Hernandez allegedly told him that private complainants would harm him and his family if he refused to sign it. Karl Reichl denied any knowledge about Francisco Hernandez's recruitment activities. 6439 and 6531. 21 After assessing the evidence presented by the parties. Yolanda Reichl further stated that she did not know of any reason why private complainants filed these cases against her and her husband. He said that Francisco Hernandez merely told him that he wanted to help his relatives go to Europe. 4 Buenafe Road. Reichl undertook to pay P1. NOT GUILTY of the crime of syndicated and large-scale illegal recruitment as charged in the above-mentioned Criminal Cases Nos.924. GUILTY beyond reasonable doubt of the crime of estafa. together with Francisco Hernandez. 6429. 6432. 6435. as charged. however. later went to see Mr. The Court hereby imposes upon the accused-spouses KARL REICHL and YOLANDA GUTIERREZ REICHL the following sentences: . Reichl at the house of his in-laws at No. 6428. 2. Leonora Perez. 4. Francisco Hernandez told him that he would also bring some of his relatives with him and he would introduce him to them. 6436 and 6528. He further denied that he promised private complainants that he would give them overseas employment. judgment is hereby rendered finding the accused spouses KARL REICHL and YOLANDA GUTIERREZ REICHL — 1.Hernandez invited him to an excursion at Sombrero Island. She claimed that she was in Manila on the dates alleged in the various informations.388. Karl Reichl. 20 Yolanda Gutierrez de Reichl corroborated the testimony of her husband and denied the charges against her. 6437 and 6529. 6430. was firm on his refusal. 6431. in the above-mentioned Criminal Cases Nos. 3. Batangas City and asked him if he could help her obtain an Austrian visa. she could not have committed the acts charged therein. 19 As regards the document where Mr.00 to private complainants. he claimed that he signed said document under duress. 6434.00. as charged. GUILTY beyond reasonable doubt of the crime of syndicated and large-scale illegal recruitment. There he met Narcisa Hernandez and Leonora Perez. the trial court rendered a decision convicting accused-appellants of one (1) count of illegal recruitment in large scale and six (6) counts of estafa. 6438 and 6530. NOT GUILTY of the crime of estafa as charged in the above-mentioned Criminal Cases Nos.

6433. 6428. For the 5 offenses. there being no mitigating or aggravating circumstance. 6438. there being no mitigating or aggravating circumstance. as maximum and to indemnify the complainant Leonora Perez in the amount of P100. 2.000. to suffer the indeterminate sentence of six (6) years of prision correccional as minimum to fourteen (14) years of reclusion temporal as maximum and to indemnify the complainant Estela Abel de Manalo in the amount of P130.000. 6430. 6431.1. and 7.00. 6. In Criminal Case No. and to indemnify the complainant Narcisa Hernandez in the amount of P150.00. to suffer the indeterminate sentence of six (6) years of prision correccional as minimum to sixteen (16) years of reclusion temporal.000. 5. 4. The trial court erred in convicting the accused-appellant of the crime of illegal recruitment on a large scale by cummulating five separate cases of illegal recruitment each filed by a single private complainant. 3. as maximum.00. 2. to suffer the indeterminate sentence of Six (6) Years of prision correccional. 6432. 3. to suffer the indeterminate sentence of six (6) years or prision correccional as minimum to thirteen (13) years of reclusion temporal as maximum and to indemnify the complainant Charito Balmes in the amount of P121. as minimum to Sixteen (16) Years of reclusion temporal. 6530. In Criminal Case No.00. of syndicated and large-scale illegal recruitment in Criminal Cases Nos. To pay the costs.00). there being no mitigating or aggravating circumstance. to suffer the penalty of life imprisonment. collectively. as maximum and to indemnify the complainant Melanie Bautista in the amount of P150. there being no mitigating or aggravating circumstance. In Criminal Case No.000. In Criminal Case No. and to pay a fine of One Hundred Thousand Pesos (P100. In Criminal Case No.00. The trial court erred in rendering as a matter of course an automatic guilty verdict against accused-appellant for the crime of estafa after a guilty verdict in a separate crime for illegal recruitment. 6438 and 6531." Accused-appellants appealed from the decision of the trial court. The trial court erred in finding accused-appellant Karl Reichl guilty of the crimes of estafa and illegal recruitment committed by syndicate and in large scale based on the evidence presented by the prosecution which miserably failed to establish guilt beyond reasonable doubt. . there being no mitigating or aggravating circumstance. SO ORDERED. to suffer the indeterminate sentence of six (6) years of prision correccional as minimum to eleven (11) years of prision mayor. They raise the following errors: "1. 6429.300.000.

provided that any person or entity which. transporting. especially since they corroborate each other on the material points." 22 The appeal is bereft of merit. Leonora Perez and Charito Balmes categorically stated that Karl and Yolanda Reichl told them that they would provide them overseas employment and promised them that they would be able to leave the country on a specified date. Reichl's claim that he was forced by Francisco Hernandez to sign said document. i. We are not convinced. the prosecution was able to prove beyond reasonable doubt that accused-appellants engaged in activities that fall within the definition of recruitment and placement under the Labor Code. We are not inclined to believe Mr. There is no . contract services. 26 Moreover. hiring or procuring workers. Private complainants Narcisa Hernandez. enlisting. 25 Accused-appellants assert that they merely undertook to secure Austrian visas for private complainants." The term "recruitment and placement" refers to any act of canvassing. 24 In the case at bar. enterprise or scheme. utilizing. it was shown that Karl Reichl signed a document marked as Exhibit "C" where he promised to refund the payments given by private complainants for the processing of their papers. to be undertaken by nonlicensees or non-holders of authority. The evidence on record shows that they promised overseas employment to private complainants and required them to prepare the necessary documents and to pay the placement fee. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction. offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. that the three accused promised to give them overseas employment. in any manner. and that they paid the corresponding placement fee but were not able to leave the country. locally or abroad. although they did not have any license to do so. whether for profit or not. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. They cite the document marked at Exhibit "J" stating that they promised to obtain Austrian tourist visas for private complainants.e. Article 38 of the Labor Code defines illegal recruitment as "any recruitment activities. which act did not constitute illegal recruitment. that they met with the three accused several times. The minor lapses in the testimony of these witnesses pointed out by accused-appellants in their brief do not impair their credibility. There is illegal recruitment when one who does not possess the necessary authority or license gives the impression of having the ability to send a worker abroad. including the prohibited practices enumerated under Article 34 of (the Labor Code). promising or advertising for employment. 23 The law imposes a higher penalty when the illegal recruitment is committed by a syndicate or in large scale as they are considered an offense involving economic sabotage. contracting.It is submitted that conviction in the latter crime does not ipso facto result in conviction in the former. including referrals. We do not see any reason to doubt the truthfulness of their testimony. It has been held that truth-telling witnesses are not always expected to give error-free testimonies considering the lapse of time and the treachery of human memory. The defense has not shown any ill motive for these witnesses to falsely testify against accused-appellants if it were not true that they met with the Reichl spouses and the latter represented themselves to have the capacity to secure gainful employment for them abroad..

The admission made by accused-appellants in Exhibit "J" that they promised to obtain Austrian visas for private complainants does not negate the fact that they also promised to procure for them overseas employment. each of the accused shall be equally liable for the acts of his co-accused even if he himself did not personally take part in its execution. Francisco Hernandez remitted the payments given by the applicants to the Reichl spouses and the latter undertook to process the applicants' papers.000. Philippines and within the jurisdiction of this Honorable Court. Accused-appellants' defense of denial and alibi fail to impress us. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. Mr. It is of judicial notice that Batangas City is only a few hours' drive from Manila. which was executed on a later date. procuring. on the other hand. claimed that he was in Manila on the dates alleged in the various informations. conspiring and confederating together.00. When he affixed his signature thereon. Such obligation arose from the promise of overseas placement made by him and his co-accused to private complainants. contracting. offering and promising for a fee to one Narcisa Autor de Hernandez and to more than three other persons.000.00. Francisco Hernandez introduced Karl and Yolanda Reichl to the job applicants as his business partners. Accused-appellants argue that the trial court erred in convicting accused-appellants of illegal recruitment in large scale by cummulating the individual informations filed by private complainants. accused-appellants promised to refund to each complainant an amount exceeding P150. that private complainants threatened to harm them if he did not sign the document. Reichl is an educated man and it cannot be said that he did not understand the contents of the paper he was signing. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. 1992 until September 19. job placement abroad. accused-appellants admitted that each of the private complainants paid the amount of P50. Furthermore. Batangas City. The eight informations for illegal recruitment are worded as follows: Criminal Case No. The acts of recruitment were committed from June 1992 until January 1993 in Batangas City. Yolanda Reichl. Kumintang Ibaba. 1992.showing. 1992 and sometime prior and subsequent thereto at Hilltop. by reason of which said Narcisa Autor de Hernandez relying on these misrepresentations. In fact. he in effect acknowledged his obligation to ensure the departure of private complainants and to provide them gainful employment abroad. in Exhibit "C". it appears that the three accused worked as a team and they conspired and cooperated with each other in recruiting domestic helpers purportedly to be sent to Italy. in Exhibit "J". and then he returned to the Philippines and stayed in Batangas from October 21. There being conspiracy. it does not prevent them from going to Batangas to engage in their recruitment business. This is an acknowledgment that accused-appellants received payments from the complainants not only for securing visas but also for their placement abroad. even if the spouses were staying in Manila. wilfully. 6429 "That on or about July 14. Thus. Karl Reichl was in Manila from July 29. 1992. Brgy. did then and there. Karl and Yolanda Reichl themselves gave assurances to private complainants that they would seek employment for them in Italy. the above-named accused. paid and/or gave . whether in his testimony or in that of his wife. However.

Brgy. to said accused. contracting. did then and there. did then and there. Philippines and within the jurisdiction of this Honorable Court. 6431 "That on or about July 1992 and sometime prior and subsequent thereto at Dolor Subdivision. wilfully. paid and/or gave the . Philippines and within the jurisdiction of this Honorable Court. Contrary to Law. conspiring and confederating together. by reason of which said Leonora Perez y Atienza relying on these misrepresentations. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. Brgy. 6435 "That on or about July 12. procuring.00) PESOS. to said accused. which acts constitute a violation of the said law. 1992 and sometime prior and subsequent thereto at Hilltop.000. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting." Criminal Case No. the above-named accused. Batangas City. job placement abroad. Contrary to Law. conspiring and confederating together. procuring. to said accused.000. Kumintang Ibaba. offering and promising for a fee to one Melanie Bautista y Dolor and to more than three other persons.000. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. wilfully. wilfully. Batangas City. Kumintang Ibaba. did then and there. procuring. which acts constitute a violation of the said law. contracting.00) PESOS.00) PESOS. paid and/or gave the amount of ONE HUNDRED THOUSAND (P100. 6433 "That on or about June 26. Contrary to Law.the amount of ONE HUNDRED FIFTY THOUSAND (P150. contracting. by reason of which said Melanie Bautista y Dolor relying on these misrepresentations." Criminal Case No. Philippine Currency. offering and promising for a fee to one Leonora Perez y Atienza and to more than three other persons. paid and/or gave the amount of ONE HUNDRED FIFTY THOUSAND (P150. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. job placement abroad. Philippine Currency. job placement abroad. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. Philippines and within the jurisdiction of this Honorable Court. Batangas City. Philippine Currency. conspiring and confederating together. the above-named accused. offering and promising for a fee to one Annaliza Perez y Atienza and to more than three other persons." Criminal Case No. 1992 and sometime prior and subsequent thereto at Hilltop. by reason of which said Annaliza Perez y Atienza relying on these misrepresentations. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. which acts constitute a violation of the said law. the above-named accused.

00) PESOS. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. procuring. by reason of which said Anicel Umahon y Delgado relying on these misrepresentations. which acts constitute a violation of the said law. Philippine Currency. conspiring and confederating together. procuring. 6437 "That on or about August 15. Contrary to Law.00) PESOS. Contrary to Law. wilfully. Batangas City. procuring. the above-named accused.amount of ONE HUNDRED SIXTY THOUSAND (P160. the above-named accused. Philippine Currency. by reason of which said Edwin Coling y Coling relying on these misrepresentations. did then and there.000. Philippine Currency. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. offering and promising for a fee to one Edwin Coling y Coling and to more than three other persons. Philippines and within the jurisdiction of this Honorable Court. wilfully. contracting. contracting. conspiring and confederating together. which acts constitute a violation of the said law. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. did then and there. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. which acts constitute a violation of the said law. Brgy. the above-named accused. job placement abroad. 6529 "That on or about July 1992 and sometime prior and subsequent thereto at Brgy. Sta. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. Batangas City." Criminal Case No. Philippines and within the jurisdiction of this Honorable Court. by reason of which said Estela Abel de Manalo relying on these misrepresentations. Kumintang Ibaba. to said accused. offering and promising for a fee to one Estela Abel de Manalo and to more than three other persons. Criminal Case No. 1992 and sometime prior and subsequent thereto at Hilltop. Rita Karsada. conspiring and confederating together. 6439 "That on or about June 5. paid and/or gave the amount of .00) PESOS. Brgy.000. job placement abroad. did then and there. Batangas City. job placement abroad. wilfully. Contrary to Law. contracting. paid and/or gave the amount of ONE HUNDRED THIRTY THOUSAND (P130. paid and/or gave the amount of ONE HUNDRED FIFTY THOUSAND (P150." Criminal Case No. to said accused. 1992 and sometime prior and subsequent thereto at Hilltop. Kumintang Ibaba.000. to said accused. Philippines and within the jurisdiction of this Honorable Court. offering and promising for a fee to one Anicel Umahon y Delgado and to more than three other persons.

Philippine Currency. offering and promising for a fee to one Charito Balmes y Cantos and to more than three other persons. Philippine Currency.300. which acts constitute a violation of the said law. Reyes: 27 ". which acts constitute a violation of the said law. does not serve to lower the penalty imposed upon accused-appellants. Yolanda Reichl and Francisco Hernandez conspired with each other in convincing private complainants to apply for an overseas job and giving them the guaranty that they would be hired as domestic helpers in Italy although they were not licensed to do so.00) PESOS. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction. Thus. Philippines and within the jurisdiction of this Honorable Court. prosecutions for single crimes of illegal recruitment can be cummulated to make out a case of large scale illegal recruitment. We agree with accused-appellants that they could not be convicted for illegal recruitment committed in large scale based on several informations filed by only one complainant. enterprise or scheme defined under the first paragraph of Article 38 of the Labor Code. to said accused. did then and there. procuring. 40 P. The Court held in People vs.000.' it must be understood as referring to the number of complainants in each case who are complainants therein. The charge was not only for illegal recruitment committed in large scale but also for illegal recruitment committed by a syndicate. It has been shown that Karl Reichl. Contrary to Law. Contrary to Law. unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by enlisting. 1992 and sometime prior and subsequent thereto at No. a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. 6531 "That on or about November 25." 28 This. conspiring and confederating together. Batangas City. however. . by reason of which said Charito Balmes y Cantos relying on these misrepresentations. knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and Employment or any other authorized government entity. When the Labor Code speaks of illegal recruitment 'committed against three (3) or more persons individually or as a group. Zamora Street.00). paid and/or gave the amount of ONE HUNDRED TWENTY ONE THOUSAND THREE HUNDRED PESOS (P121. wilfully.000.00) under Article 39 of the Labor Code. contracting. we hold that accused-appellants should be held liable for illegal recruitment committed by a syndicate which is also punishable by life imprisonment and a fine of one hundred thousand pesos (P100.ONE HUNDRED THIRTY THOUSAND (P130." Criminal Case No. In other words." We note that each information was filed by only one complainant. job placement abroad. the above-named accused. otherwise. to said accused. . .

fraudulent act or fraudulent means of the accused-appellant and as a result thereof. credit. Exhibit "J". pp. 6. 4-25. qualifications. Cortes. agency. It is by this representation that they induced private complainants to pay a placement fee of P150. June 15. Davide. paragraph 2 of the Revised Penal Code is committed by any person who defrauds another by using a fictitious name.00. The Decision appealed from is hereby AFFIRMED. 1994. Footnotes 1. Exhibit "C". Jr. Such act clearly constitutes estafa under Article 315 (2) of the Revised Penal Code. April 11. pp. Estafa under Article 315. 2-6. 9. 4-33. 7-19. JJ. pp. or falsely pretends to possess power.. 29 It has been proved in this case that accused-appellants represented themselves to private complainants to have the capacity to send domestic helpers to Italy. concur. A person who is convicted of illegal recruitment may.J. 1995. C. 11. Penned by Judge Liberato C. be convicted of estafa under Art. 1995.. influence. 5. Exhibit "A". IDASHa Cost against appellants. 7. or by means of similar deceits executed prior to or simultaneously with the commission of the fraud. Kapunan and Ynares-Santiago. 3. 2. we hold that the prosecution also proved the guilt of accused-appellants for the crime of estafa. April 18. business or imaginary transactions.000. Exhibit "K". Exhibit "M". property. 1993. 8. SO ORDERED. the offended party suffered damages. October 12. 10.Finally. although they did not have any authority or license. 315 (2) of the Revised Penal Code provided the elements of estafa are present. TSN. Exhibit "F". in addition. The offended party must have relied on the false pretense. TSN. 1994. 6-26. November 4. pp. TSN. the appeal is DISMISSED. 4. IN VIEW WHEREOF. TSN. . pp. Exhibit "L".. 12.

16. Article 13 (b). TSN. 21.R. Article 38 (b). 24. People vs.vs. 610. 177-178. 1997. pp. 29. 3-28. 1992. TSN. Manungas. Sagaydo. pp. People vs. ET AL. 341 SCRA 329 (2000). TSN. Quilatan. 10-19. 2-16. Exhibit "K". 26. February 25. 1997. TSN. March 6. 4-22. 1995. February 5. 15. 23.13. 27. Id. 20. 19-26. June 9. Appellant's Brief. People vs. December 10. 6-10. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. COURT OF APPEALS. I n c G. People vs. At p. pp. 2002 ANTONIO M. 18. June 9. 132048.] . pp. 27-30. pp. TSN. Rollo. 247 SCRA 780 (1995). People vs. pp. 1997. TSN. NUESA. 22. ET AL. 242 SCRA 264 (1995). pp.. TSN. pp. TSN. 132048 March 6. 19. pp. TSN. 1997. June 16. 4-44. 1996. November 7. 272. 1997. June 16. pp. 10-12. 14. Banzales. 231 SCRA 1 (1994). 341 SCRA 247 (2000). 22-28. 1996. 1997. 3-12. Labor Code. 1997. June 16. No. Goce. Labor Code. 17. 336 SCRA 64 (2000).R. No. pp. 25. SECOND DIVISION [G. September 4. June 9. pp. 28. pp. 2002.

petitioners. vs. it is petitioner who had been in possession of the land and had been cultivating the same. Private respondent filed a petition with the Provincial Adjudication Board for annulment of said order. ScaHDT The Supreme Court ruled that the revocation by the DAR Regional Director of the earlier Order of Award by the Secretary of Agriculture falls under the administrative functions of the DAR. HON. COURT OF APPEALS (14th Div. The DARAB and its Provincial Adjudicator or Board of Adjudicators acted erroneously and with grave abuse of discretion in taking cognizance of the case. CASE AT BAR. then overturning the decision of the DAR Regional Director . ANTONIO M. herein petitioner. Magabo for petitioners. Antonio Z. which have acquired expertise because their jurisdiction is confined to specific matters are accorded not only respect but even finality by the courts. After investigation. Regional Director of DAR. The said decision was affirmed by the DAR Appellate Adjudication Board and later on by the Court of Appeals.). Hence. care should be taken that administrative actions are not done without due regard to the jurisdictional boundaries set by the enabling law for each agency.HON. ordered the cancellation of the Order of Award in favor of private respondent. private respondent filed an application with the Regional Office of the Department of Agrarian Reform for the purchase of said lots claiming that he had complied with the conditions set forth in the order. AGRARIAN LAWS. The DARAB Provincial Adjudicator denied the petitioners' motion to dismiss and reversed the order of the Regional Director. filed a letter of protest against private respondent claiming that contrary to the manifestation of private respondent. HON. After twenty-one years. Petitioner filed his own application for said parcels in opposition to that of private respondent. JURISDICTION OF DEPARTMENT OF AGRARIAN REFORM. DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB) and JOSE VERDILLO. Nuesa. Castillo Law Office for private respondent J. petitioner. then overturning the decision of the DAR Regional Director and deciding the case on the merits without affording the petitioner the opportunity to present his case. Restituto Rivera. LABOR AND SOCIAL LEGISLATION. — The revocation by the Regional Director of DAR of the earlier Order of Award by the Secretary of Agriculture falls under the administrative functions of the DAR. Renan B. this petition for review. respondents. TIaCAc While it bears emphasizing that findings of administrative agencies. Verdillo. SYLLABUS 1. Herein petitioners filed a motion to dismiss the petition on the ground that the proper remedy was an appeal to the Secretary of the Department of Agrarian Reform from the order of the Regional Director. SYNOPSIS The Secretary of Agrarian Reform issued an Order of Award in favor of Jose Verdillo over two (2) parcels of agricultural land under certain conditions. The DARAB and its provincial adjudicator or board of adjudicators acted erroneously and with grave abuse of discretion in taking cognizance of the case. NUESA in his capacity as the Regional Director of DAR Region III and RESTITUTO RIVERA. Antonio M.

A.O. DEFINED. . tenants and other agrarian reform beneficiaries. failure on his/her part to comply with this requirement shall be sufficient cause for cancellation of this order and for allocation . J p: This petition for review seeks to reverse the decision 1 dated December 19. as the case may be. Nos. 27 and other agrarian laws and their implementing rules and regulations. ID. . cases. AGRARIAN DISPUTE." The DARAB has primary. E. 6389. or occupy and construct his/her house in case of residential lot and pay at least the first installment . 6657. 1997. changing or seeking to arrange terms or conditions of such tenurial arrangements. . issued in favor of the awardee(s) covering the lots without a certification issued by the Land Reform Project Team Leader of Land Settlement Superintendent that the awardee(s) has/have developed or . applicant. respectively. . . the implementation of the agrarian reform program. Centeno. maintaining. then Secretary of Agrarian Reform issued an "Order of Award" in favor of Jose Verdillo over two (2) parcels of agricultural land. or otherwise develop at least one-fourth of the area . 6657 (CARP LAW). NO. — Under Section 3(d) of R. . tenancy. original and appellate jurisdiction "to determine and adjudicate all agrarian disputes. 1972. petitioner and private respondent had no tenurial.. or lessor and lessee. the DARAB had no jurisdiction over the controversy and should not have taken cognizance of private respondent's petition in the first place. whether leasehold. DECISION QUISUMBING. fixing. . . No. or any agrarian relations whatsoever that could have brought this controversy between them within the ambit of the abovecited provision. R.D. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers. As held by this Court in Centeno vs.A. Bulacan. stewardship or otherwise over lands devoted to agriculture. 229. and that in no case shall an agreement to sell or deed of sale.A. . R." cDTACE 2. under the following conditions: That within a period of six (6) months from receipt of a copy. in favor of any qualified . are as follows: On May 25. "agrarian dispute" is defined to include "(d) . Lots 1932 and 1904 of the Buenavista Estate. whether the disputants stand in the proximate relation of farm operator and beneficiary.and deciding the case on the merits without affording the petitioner opportunity to present his case. ID. "the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving. . The facts of this case. of the Court of Appeals which upheld the ruling of the Department of Agrarian Reform Adjudication Board or DARAB in favor of private respondent Jose Verdillo. as borne by the records. the awardee(s) shall personally cultivate .A." In the case at bar. any controversy relating to tenurial arrangements.808 square meters. leasehold. . 6657 (CARP Law). including disputes concerning farmworkers associations or representation of persons in negotiating. P. landowner and tenant.. controversies. 3844 as amended by R.A. and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.496 and 19. Consequently. covering 14. San Ildefonso. . 228 and 129-A..

Order is hereby issued cancelling Order of Award dated May 25. 1993.) and 1904. Instead of filing an Answer to the Petition. Based on said investigation. Accordingly. for violation of the rules and regulations pertaining to the disposition of lots in landed estates and forfeiting whatever payments made by him on account thereof in favor of the government. .devoted to some productive enterprise at least one-half of the area thereof. 4 On January 24. hence. the Regional Director of DAR. 3 Petitioner had filed his own application for said parcels in opposition to that of private respondent. 1994. Agapito Garcia and Pablo Garcia for almost sixteen years prior to the entry of Restituto Rivera in 1972 for Lot 1904 and in 1986 for Lot 1932 (pt. . Psd-52045. . It is crystal clear that Jose Verdillo has culpably violated the terms and conditions of the Order of Award issued in his favor for lots covered thereby. 5 Aggrieved by the cancellation of his award. it was undoubtedly established that Lots 1932 (pt. 1994. the subject lots were previously tenanted by other persons namely. and not by a Petition with the DARAB Provincial Adjudicator. Psd-52045. or after twenty-one years. Buenavista Estate. for Annulment of said Order. HScDIC On December 27. under DAR Memorandum Circular No. a representative of the Department of Agrarian Reform Regional Office undertook an investigation to look into the conflicting claims of the petitioner and the private respondent. . it was found that: . private respondent filed an application with the Regional Office of the Department of Agrarian Reform for the purchase of said lots claiming that he had complied with the conditions set forth in the Order. 1993. These facts have never been refuted by Jose Verdillo who further testified that Restituto Rivera used to pay annual rental of 25 cavans for Lot 1932 (pt. xxx xxx xxx In the investigation . promulgated an Order whose decretal portion reads: WHEREFORE. or constructed his/her/their house therein in case of residential land. petitioner. 1972 issued in favor of Jose Verdillo for Lot 1932 (pt. premises considered. it is petitioner who had been in possession of the land and had been cultivating the same. 2 On August 26. Restituto Rivera.) and 15 cavans of palay for Lot 1904. herein petitioners (as respondents below) filed a Motion to Dismiss the Petition on the ground that the proper remedy was an appeal to the Secretary of the Department of Agrarian Reform from the Order of the Regional Director. Region III. Antonio M.) Restituto Rivera at the time of investigation is still in possession/cultivation of the lots in question. herein petitioner. the aforesaid Order had become final and . Let the application of Restituto Rivera to purchase these lots be processed in accordance with existing rules and regulations. the subject lots are hereby declared vacant and open for disposition in favor of qualified applicant. Nuesa. a Petition with the Provincial Adjudication Board. . 5-87. private respondent then filed on March 20.) and Lot 1904. were in possession/cultivation of tenants or other persons exclusive of Jose Verdillo . . filed a letter of protest against private respondent claiming that contrary to the manifestation of private respondent.

1995. The petitioners manifested that they were no longer submitting their position paper and were opting to rely solely on their Motion to Dismiss. Quezon City. Adjudicator for the Province of Bulacan. On May 2. promulgated a Decision denying the petitioners' Motion to Dismiss and reversing the Order of the Regional Director. and 3. 1994. Pampanga to immediately execute the necessary deed of conveyance and/or title of the subject landholdings in favor of petitioner. JOSE VERDILLO. 1996. Likewise. 10 Hence. 1994 issued by the then public respondent null and void being contrary to public policy. Department of Agrarian Reform. Regional Office. chose to resolve the case on the merits and on October 14. 2. 7 Petitioner Rivera filed a Motion for Reconsideration from said Decision. thus: WHEREFORE. 11 . the appeal is hereby DENIED by affirming the decision. 8 He then interposed an appeal before the DAR Appellate Adjudication Board (DARAB). however. 9 The Petition for Review filed by herein petitioners with the Court of Appeals was denied due course and ordered dismissed. in view of the foregoing. 6 The DARAB Provincial Adjudicator. the same is hereby AFFIRMED. decision is hereby rendered as follows: 1. II THAT THE HONORABLE COURT OF APPEALS ERRED IN INTERPRETING THE APPLICABLE AGRARIAN LAWS ON THE MATTER. in view of the foregoing. Diliman.executory. with costs against petitioner Rivera. 1994 of the Hon. Declaring the subject landholdings fully paid and all rights appurtenant thereto is vested to the herein petitioner. San Fernando. but it was denied by the DARAB Provincial Adjudicator. thus: WHEREFORE. Directing the Landed Estate Division. the Board issued its decision affirming that of the Provincial Adjudicator. dated October 14. Declaring the Order dated January 24. this Petition for Review raising the following errors: I THAT THE HONORABLE COURT OF APPEALS ERRED IN DENYING AND DISMISSING THE CLAIM OF THE PETITIONERS THAT THE DECISION OF THE BOARD (DARAB) WAS ISSUED IN EXCESS OF JURISDICTION. there being no cogent reason to disturb the Order of February 22.

Hence. which is under the administration and disposition of the DAR pursuant to the mandate of C. tantamount to or in excess or lack of jurisdiction. this case is not.A. Bulacan.Briefly stated. 1400. the Court of Appeals and the DARAB in affirming the decision of the Provincial Adjudicator of Bulacan committed grave abuse of discretion. C.e. cDSaEH Moreover. the Order of Director Nuesa dated January 24. which requires that lots within the Buenavista Estate shall be strictly awarded and/or disposed of to qualified tenant-beneficiaries. 1994. they conclude that the decision of Director Nuesa had already acquired finality. 15 Finally. of public petitioner had already become final and executory. no Motion for Reconsideration and/or appeal was interposed by private respondent. but involves the disposition of the lots subject of the controversy between private petitioner and private respondent. because when private respondent filed his petition to the DAR Provincial Adjudication Board on March 20. said Order dated January 24. According to petitioners. No. 1994. the Board (DARAB) acted in grave abuse of discretion tantamount to lack or excess of its jurisdiction. because public respondents in their questioned Orders/Decisions merely focused on the procedural aspect. 539. is in keeping with the mandate of the governing agrarian reform law. the matter falls under the exclusive jurisdiction and administrative competence of the DAR (Regional Director and Department Secretary) and not of the DARAB (including the Provincial Adjudicator and the Provincial Adjudication Board itself). No. strictly speaking. ECcTaS According to petitioners. whereas petitioner Rivera should be deemed to have acquired. 14 they claim private respondent Verdillo should be barred by estoppel. continuous and exclusive possession. Petitioners add that public respondents brushed aside the fact that this case involves the conflicting applications to purchase lots within the Buenavista Estate. Therefore. private respondent Jose Verdillo argues that no grave abuse was committed by the provincial adjudication officer and provincial board of adjudicators when they decided the case on the merits in resolving petitioners' Motion to Dismiss.A. petitioners argue. 16 In turn. adverse. a right to a government grant without the necessity of a certificate of title issued therein since the conditions set by law have been complied with by him. 12 as amended by R. Bulacan. They conclude that this being the case. a tenurial dispute there being no landlord and tenant relationship. while private respondent Verdillo had culpably violated the terms and conditions set forth in the Order of Award in 1972. occupation and cultivation of said lots for the last twenty-one (21) years.A. 539. by operation of law. avoiding the substantial merits of the case. and by the Central DARAB and the Court of Appeals when they . i. open.A.. against the DAR Regional Director of Region III and private petitioner Restituto Rivera for the annulment of Order. the issue for resolution is whether or not the Court of Appeals erred in denying petitioners' claim that in this case. 1994. San Ildefonso. No. Citing jurisprudence. they contend that this case involves the strict administrative implementation and award of lots within the Buenavista Estate. petitioners submit that public respondents grossly erred in affirming the decision of the Provincial Adjudicator at Malolos. as amended by R. 1400. No. They also assert that private petitioner Rivera is the one in peaceful. 13 According to petitioners.

D. (5) issuance. he contends. 20 In his Supplemental Memorandum. The DARAB and its provincial adjudicator or board of adjudicators acted erroneously and with grave abuse of discretion in taking cognizance of the case. private respondent contends that the findings of the tribunals a quo are based on substantial evidence. . the DARAB is not bound by the technical rules of procedure as provided under Sec. 1993. He claimed that he had complied with said Order of Award and had paid in full the purchase price of the subject lots as evidenced by Official Receipt No. 18 The Provincial Adjudication Board's action. cases. 1890249." The DARAB has primary. alter. there is no basis for the allegation that the Court of Appeals erred in appreciating applicable agrarian laws.affirmed said decision. 3 of the DARAB Rules of Procedure.D. Centeno. recall or cancellation of certificates of land transfer in cases outside the purview of P. because it was he who financed the cultivation and improvement of the land. orders. 816. original and appellate jurisdiction "to determine and adjudicate all agrarian disputes. 27 "the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program. sought to avoid unnecessary delays in the adjudication of agrarian disputes. 17 and Sec. we find the petition impressed with merit. shall be exclusively cognizable by the Secretary of Agrarian Reform. 21 Private respondent also argued that the January 24. citing the sworn statement of Herminia G. Garcia's affidavit. controversies. 2 of Rule 1 of the DARAB Rules. As held by this Court in Centeno vs. 22 Finally. 946 24 provides that matters involving the administrative implementation of the transfer of the land to the tenant-farmer under P. the wife of the deceased Agapito Garcia. then overturning the decision of the DAR Regional Director and deciding the case on the merits without affording the petitioner opportunity to present his case. 27 25 and amendatory and related decrees. 26 The revocation by the Regional Director of DAR of the earlier Order of Award by the Secretary of Agriculture falls under the administrative functions of the DAR. and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program . rules and regulations. No. Garcia. who declared that it was really private respondent Verdillo whom she considers to be the owner of the lots subject matter of the controversy. According to him. including: . 19 Moreover. We agree with petitioners that respondent Court of Appeals erred in holding that the DARAB and its officials have not committed grave abuse of discretion tantamount to excess or lack of jurisdiction in this case. modify or amend the order of the Secretary of the Department of Agrarian Reform. instructions. according to private respondent. private respondent further refuted the results of the DAR investigation dated December 27. No. P. Private respondent also cites the joint affidavit of Benedicta Villadarez and Normita Valenzuela corroborating Mrs. 23 After carefully perusing the records of this case and considering the contentions of the parties thereto. 1994 Order of Director Nuesa was irregular because he had no authority to reverse. . and the subsequent Order of Director Nuesa which found private respondent to have violated the terms of the Order of Award in 1972.D.

No. P. therefore. we find petitioner Restituto Rivera's plea to overturn the ruling of the Court of Appeals meritorious. 228 and 129-A. whether the disputants stand in the proximate relation of farm operator and beneficiary. any controversy relating to tenurial arrangements. 1994. E. petitioner and private respondent had no tenurial. including disputes concerning farmworkers associations or representation of persons in negotiating. "agrarian dispute" is defined to include "(d) . Given these circumstances. . whether leasehold. respondent DARAB officials and boards. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers. changing or seeking to arrange terms or conditions of such tenurial arrangements. leasehold. maintaining. This Order explicitly provides that "since land has a social function. . 6657. 29 Note that Administrative Order No. Series of 1990. this constituted a violation of the terms of the Order of Award issued in favor of private respondent as an awardee. In the investigation on December 27. aside from contravening the underlying principles of agrarian reform as a social justice measure. Nos. . 27 and other agrarian laws and their implementing rules and regulations. fixing.D.A. 1995. In this case. 1993. or lessor and lessee." 28 Under Section 3(d) of R. is REVERSED.under R. stewardship or otherwise over lands devoted to agriculture." In the case at bar. 1994. The order of DAR Regional Director for Region III dated January 24.O. While it bears emphasizing that findings of administrative agencies. 3. which have acquired expertise because their jurisdiction is confined to specific matters are accorded not only respect but even finality by the courts. are declared NULL and VOID and SET ASIDE. conducted by the Regional Officer of DAR. landowner and tenant. had overstepped their legal boundaries in taking cognizance of the controversy between petitioner Rivera and private respondent Verdillo as to who should be awarded Lots 1932 and 1904 of the Buenavista Estate. 6389. Consequently.A. the DARAB had no jurisdiction over the controversy and should not have taken cognizance of private respondent's petition in the first place. 30 care should be taken that administrative actions are not done without due regard to the jurisdictional boundaries set by the enabling law for each agency. and of the DARAB Provincial Adjudication Officer and Board dated October 14. the petition is GRANTED. in favor of petitioner Restituto Rivera is REINSTATED. it was established that the subject lots were in the possession and cultivation of persons other than the awardee Verdillo. provincial and central. R. 1997. 3844 as amended by R. HCTAEc WHEREFORE. tenants and other agrarian reform beneficiaries. and the order of DAR Appellate Adjudication Board on May 2. be distributed to the actual occupant/tillers" thereof. 6657 (CARP Law). there is a concomitant social responsibility in its ownership and should. Respondent appellate court erred in sustaining DARAB's unjustified action taken with grave abuse of discretion resulting in lack or excess of its jurisdiction. and February 22. governs the distribution and titling of lots in landed estates administered by the DAR. 1996. 229. Clearly. tenancy. or any agrarian relations whatsoever that could have brought this controversy between them within the ambit of the abovecited provision.A. The decision of the Court of Appeals dated December 19.A.

No.R. Petitioners cite the cases of Santiago Syjuco. and appropriating funds for its implementation. at 185. 184. at 31 only. Buena and De Leon. The Board and its Regional and Provincial Adjudicator shall not be bound by technical rules of procedure and evidence as prescribed in the Rules of Court. at 23. disputes or controversies in a most . 30-40. Castro. at 30-31.R. at 32. 7. G. 14. Section 3. 45664. Id. No. 9. 3. L-68636. Id. Id. Id. 15. Rollo. 1995. Footnotes 1. SO ORDERED. 6. Bellosillo. Rollo. 12. 13. Id. G. G.. Id. at 75. Id. Inc.R. 2. at 39. Id. Court of Appeals. 71694. Mendoza. No. at 74. providing for an instrumentality to carry out the policy. 175 SCRA 171 (1989).No pronouncement as to costs. 4. BA Finance Corporation. 200 SCRA 637 (1991) and National Power Corporation vs. 16. Id. and setting aside funds and authorizing the issuance of bonds for the payment of said lands. Id.. Order dated February 22. 17. 218 SCRA 41 (1993). pp. p. 11. Jr. 8. No. concur. at 22. Technical Rules not applicable. 10. 70403. at 31. An Act authorizing the President of the Philippines to acquire private lands for resale in small lots. An Act defining a Land Tenure Policy. vs. providing for the creation of an agency to carry out the purposes of this Act. Intermediate Appellate Court. but shall proceed to hear and decide all agrarian cases. Northern Cement Corporation vs. JJ. 5. 158 SCRA 408 (1988) and Nyco Sales Corporation vs.

261 SCRA 409. 241 SCRA 165. G. 27. at 204. Court of Appeals. xxx xxx xxx 18. 203-204. Court of Appeals.R. G. shall pay the household rentals when they fall due providing penalties therefor. 281 SCRA 657. 174 (1995). Jacinto vs. 111173. Office of the President. INC. 343 SCRA 153. No. 2002 NATIONAL BOOKSTORE. 21. 299 (2000). Construction.R. 159 (2000). No. 99346. No. 109992. These Rules shall be liberally construed to carry out the objectives of agrarian reform and to promote just. Philippine Savings Bank vs. Decreeing the Emancipation of Tenants from the Bondage of the Soil Transferring to Them the Ownership of the Land They Till and Providing the Instruments and Mechanism Therefor. ET AL. 327 SCRA 293. employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Id. at 221. expeditious and inexpensive adjudication and settlement of agrarian dispute. 20. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. at 220-221.expeditious manner. 24. 124540. vs. Id. G. G. 26. No. 23. Rule II.R. case. 19. Streamlining their Procedures and Other Purposes. 28. 22.R. at 224-225. COURT OF APPEALS. 25. I n c G. Providing the tenant-farmers/agricultural leases. Section 1 of the Revised Rules of Procedure of the DARAB. Section 2.R. 676 (1997). NLRC. See Heirs of the Late Herman Rey Santos vs. ET AL.R.. Id. matter or concern. 417 (1996). 29. 146741 February 27. 30. G. 140825. Rollo. . No. pp. Reorganizing the Courts of Agrarian Relations. Casa Filipina Realty Corporation vs. No. Id.

] NATIONAL BOOKSTORE. in order to constitute a just cause for the employee's dismissal. Gabriel as Head Cashier of the petitioner National Bookstore were dismissed from the service for gross neglect of duty and loss of confidence because of the loss of company funds that took place on June 28. RAMOS. February 27. with modification by deleting the award of damages and attorney's fees. INC. but its claim that private respondents were responsible therefor was not supported by any substantial evidence. No. The Labor Arbiter.R. 146741.SECOND DIVISION [G. Verily. Significantly. The latter ruled in their favor by ratiocinating that the documentary and testimonial evidence presented by the parties showed that although private respondents were afforded due process before being dismissed. therefore. LABOR CODE. GABRIEL. SDcITH The petition was without merit. Ymasa as Cash Custodian and Edna L. the neglect of duties must not only be gross but also habitual. it could only be a single or an isolated act that cannot be categorized as habitual. the Court of Appeals affirmed the NLRC decision. as amended. this petition. SYNOPSIS Private respondents Marietta M. — . although this Court found otherwise. Indeed. loss of trust and confidence to be a valid ground for dismissal must be based on a willful breach of trust and founded on clearly established facts. Likewise.. THaDEA SYLLABUS 1. and ALFREDO C. YMASA and EDNA L. TERMINATION OF EMPLOYMENT. COURT OF APPEALS SPECIAL EIGHTH DIVISION. On the other hand. respondents. 2002. The said decision was affirmed by the National Labor Relations Commission (NLRC). Thus. The onus of proving that the dismissal of the employee was for a valid and authorized cause rests on the employer and failure to discharge the same would mean that the dismissal was not justified and. LABOR AND SOCIAL LEGISLATIONS. Solicitor General for public respondent. vs. Public Attorney's Office for private respondents. Cornago for petitioner. illegal. the single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. NATIONAL LABOR RELATIONS COMMISSION. assuming arguendo that private respondents were negligent. They filed a complaint for illegal dismissal before the labor arbiter. Hence. not a just cause for their dismissal. DISMISSAL. the NLRC and the Court of Appeals were unanimous in declaring that there was no willful breach of confidence in the instant case as petitioners failed to establish with certainty the facts upon which it could be based. petitioners. Jesus R. hence. MARIETTA M. ONUS OF PROVING THAT DISMISSAL WAS FOR VALID AND AUTHORIZED CAUSE RESTS ON EMPLOYER. 282 of the Labor Code. petitioner National Bookstore lost some funds. their dismissal was not founded on valid and justifiable grounds as provided under Art. 1992 at the SM North Edsa Branch of petitioner.

MUST BE BASED ON ANY JUST OR AUTHORIZED CAUSES PROVIDED BY LAW. ID. ID. the employer must notify him in writing of the decision to dismiss him... 282 of the Labor Code or for any of the authorized causes under Arts. — The requisites for a valid dismissal are: (a) the employee must be afforded due process. — A perusal of the records of the case does not in any way show that private respondents were even remotely negligent of their duties so as to cause the loss of petitioner National Bookstore's funds. ID. ID. ID. ID. — Petitioner National Bookstore..... if he so desires. ID. a claim not controverted by petitioners. Moreover. — Anent the first requisite. Thus. ID. in order to constitute a just cause for the employee's dismissal. ID.. 7. stating clearly the reasons therefor. 6... NOT ESTABLISHED IN CASE AT BAR. he must be given an opportunity to be heard and to defend himself. as correctly pointed out by the Labor Arbiter in his decision.. (b) the dismissal must be for a valid cause as provided in Art. ID. ID. ID. ID. 2.. ID. TWO WRITTEN NOTICES REQUIRED. i.. NEGLECT OF DUTIES MUST NOT ONLY BE GROSS BUT ALSO HABITUAL.. 5. DHEaTS 8. 283 and 284 of the same Code.. ID. ID. ID. PROPERLY COMPLIED WITHIN CASE AT BAR. ID. and. on 29 August 1992 petitioner National Bookstore sent another written notice to private respondents informing them of its decision to terminate their services setting forth the reasons therefor..e. ID. On 30 July 1992 it gave private respondents an opportunity to explain why they should not be dismissed for the loss of company funds.. REQUISITES. GROSS NEGLIGENCE. ID. — Significantly. ID.The onus of proving that the dismissal of the employee was for a valid and authorized cause rests on the employer and failure to discharge the same would mean that the dismissal was not justified and therefore illegal... ID. CcSEIH 4. JUST OR AUTHORIZED CAUSES..... ID. the neglect of duties must not only be gross but also habitual. ID. ID. — Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence. — It must also show with convincing evidence that the dismissal was based on any of the just or authorized causes provided by law for termination of employment by an employer.. They were in fact subjected to a thorough body search by petitioner National Bookstore's lady guard before leaving their place of work on the date in issue.. ID. ID. Private respondents were able to illustrate with candor and sincerity the procedure they took prior to the loss which was witnessed by an employee of petitioner National Bookstore. ID. ID.. 3. the employer must furnish the employee with two (2) written notices: (a) a written notice containing a statement of the cause for the termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative. the single or isolated act of negligence does not constitute a . ID. and. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.. ID.. which private respondents immediately complied with by submitting their joint answer on 31 July 1992.. (b) if the employer decides to terminate the services of the employee. more than substantially observed this requirement.. DEFINED.. ID... or the entire absence of care..

ID. private respondents should be awarded separation pay in lieu of reinstatement computed at one (1) month salary for every year of service with a fraction of six (6) months equivalent to one (1) whole year. it could only be a single or an isolated act that cannot be categorized as habitual. they may only be awarded if the dismissal was shown to have been effected in a wanton. NOT PRESENT IN CASE AT BAR. 10.. resulted therefrom. not a just cause for their dismissal. ID. ID. EXEMPLARY DAMAGES. without justifiable excuse. PROPER.. for having been illegally dismissed after 21 March 1989. Certainly. Consequently. CANNOT BE JUSTIFIED SOLELY UPON PREMISE THAT EMPLOYER FIRED HIS EMPLOYEES WITHOUT JUST CAUSE OR DUE PROCESS. MUST BE BASED ON WILLFUL BREACH OF TRUST AND FOUNDED ON CLEARLY ESTABLISHED FACTS. i. thoughtlessly. or was oppressive to labor. LOSS OF TRUST AND CONFIDENCE. AWARDS OF ILLEGALLY DISMISSED EMPLOYEES.. These were not shown in the instant case. ID. they were entitled to reinstatement to their former positions without loss of seniority rights and payment of back wages. ID. ID. AWARD OF FULL BACK WAGES INCLUSIVE OF ALLOWANCES AND OTHER BENEFITS. ID. although we find otherwise. NOT ESTABLISHED IN CASE AT BAR.. wounded feelings. Award of moral damages cannot be justified solely upon the premise that the employer fired his employees without just cause or due process.. — The deletion of the award of damages is sustained for lack of sufficient basis to justify them. perhaps due to the lapse of time since their dismissal. private respondents.. that the act of dismissal was attended by bad faith or fraud. good customs. ID. CAN BE AWARDED IF PARTY INVOLVED ENTITLED TO MORAL OR COMPENSATORY DAMAGES... the finding that private respondents have been wrongfully dismissed does not automatically signify that petitioners are liable for moral and other damages. — Loss of trust and confidence to be a valid ground for dismissal must be based on a willful breach of trust and founded on clearly established facts. assuming arguendo that private respondents were negligent. the NLRC and the Court of Appeals were unanimous in declaring that there was no willful breach of confidence in the instant case as petitioners failed to establish with certainty the facts upon which it could be based. Additional facts must be pleaded and proved to warrant the grant of moral damages under the Civil Code. — As regards exemplary damages. knowingly and purposely.. or public policy.. petitioner National Bookstore lost some funds but that private respondents were responsible therefor was not supported by any substantial evidence.. 12. Indeed.. A breach is willful if it is done intentionally. heedlessly. — Consequently. MORAL DAMAGES.e. SEPARATION PAY PROPER IF REINSTATEMENT PROVES IMPRACTICABLE. or inadvertently. are granted full back wages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. CIVIL LAW. Verily. However. 9. hence. that social humiliation. if such reinstatement would prove impracticable and hardly in the best interest of the parties. oppressive or . ID. grave anxiety. or done in a manner contrary to morals. SDHAEC 11. and..just cause for the dismissal of the employee. CSHEAI 13. DAMAGES.. etc.. ID. as distinguished from an act done carelessly. conformably with established jurisprudence. ID. The Labor Arbiter. — Private respondents have been illegally dismissed. ID. ID.

e. one Maricen Cupcupin. Again. employed private respondent Marietta M. respectively...malevolent manner. private respondent Ymasa put the plastic bags inside her cabinet which she accordingly locked.. a Sunday. respectively. i. Monday. The counting was done in the presence of a watcher. it was only at around closing time at 8:30 in the evening of 28 June 1992 that the two (2) plastic bags earlier stored in private respondent Ymasa's cabinet were taken out. with the bag containing the money intended for deposit with INTERBANK placed on top. private respondents Ymasa and Gabriel were Cash Custodian and Head Cashier of petitioner National Bookstore. DEICaA On 28 June 1992. — As for attorney's fees. Inc. Gabriel on 2 September 1979. the counted money was placed inside two (2) separate plastic bags which were sealed with scotch tapes. The amount for deposit to PCIB was found short of P42. On 29 June 1992. ATTORNEY'S FEES. But before being deposited. which affirmed the Resolutions of the National Labor Relations Commission (NLRC) dated 8 October 1997 3 and 9 February 1999.70. 14. TADcCS DECISION BELLOSILLO.268. Thereafter.41 as attorney's fees to private respondents Marietta M. private respondents reported for work at their place of assignment. Gabriel. ID. These plastic bags and the day's sales placed in another bag euphemistically called "sandwich" were handed over to the Assistant Manager for safekeeping in the Branch vault. private respondents are entitled thereto as they were compelled to litigate with petitioners and incur expenses to enforce and protect their interests. The plastic bags were then tied together with rubber band.916. ID. or where the party involved is entitled to moral or compensatory damages.22 and P22. Ymasa and Edna L. The award by the Labor Arbiter of P22. . Since both Branch Manager Charito M.758. private respondents retrieved from the Assistant Manager the money already counted and placed inside the sealed plastic bags to be picked up by the roving tellers of INTERBANK and PCIB. being reasonable is sustained.. Gonzales and Assistant Branch Manager Roberto Tagalog were not in their offices. Ymasa on 14 February 1980 and private respondent Edna L. All efforts made to locate the missing amount failed. 4 Petitioner National Bookstore. the SM North Edsa Branch of petitioner National Bookstore to count the previous day's sales proceeds as a matter of routine. this was not adequately established by evidence. After preparing the corresponding deposit slips which Cupcupin accordingly signed. On 28 August 1992 when both claimed to have been illegally dismissed from employment. J p: This petition for review under Rule 45 seeks to set aside the 30 June 2000 Decision 1 and 10 January 2001 Resolution 2 of the Court of Appeals. Private respondent Ymasa counted the money intended to be deposited with INTERBANK while private respondent Gabriel attended to the money for deposit with PCIB. CASE AT BAR. the money was again counted. AWARDED FOR EMPLOYEES WHO WERE COMPELLED TO LITIGATE AND INCUR EXPENSES TO ENFORCE AND PROTECT THEIR INTEREST.

On 9 February 1999 petitioners sought reconsideration but the NLRC denied their motion. subjected them to a thorough body search. They asserted that "[they] have been in the service of the company for the past 13 years and it has been [their] practice to turn over [their] collection to [their] supervisor without any proof of receipt every end of the business day. petitioner National Bookstore's lady guard. Ms. moral and/or actual damages and attorney's fees. But after considering the strained relations among the parties brought about by the litigation. Thus.Thus. the documentary and testimonial evidence presented by the parties showed that although private respondents were afforded due process before being dismissed. on 8 March 1999 petitioners filed before the Court of Appeals a petition for certiorari imputing grave abuse of discretion on the part of the NLRC for affirming the decision of the Labor Arbiter albeit with modification. Ramos before the Labor Arbiter who ruled in favor of private respondents on 20 June 1994. the Labor Arbiter instead ordered petitioners to pay private respondents separation pay. 279 of the Labor Code. as amended. 9 Hence. On 8 October 1997 petitioners' appeal before the NLRC was denied. Padilla. Jr. On 30 June 2000 the Court of Appeals dismissed the petition for lack of merit and affirmed the resolutions of the NLRC dated 8 October 1997 and 9 February 1999. Roda Sungkip." cICHTD Petitioner National Bookstore. They emphasized that they had no access to petitioner National Bookstore's vault and that before leaving the office on both occasions and after doing their tasks. 5 According to the Labor Arbiter. notified them on 29 August 1992 of the termination of their services for gross neglect of duty and loss of confidence to take effect immediately and "without prejudice to appropriate legal action that the Management may take for the restitution of the missing Company funds. or that amount of evidence which a reasonable mind might accept as adequate to justify a conclusion. 8 Public respondent found no reason to deviate from the accepted doctrine that findings of fact of the NLRC affirming those of the Labor Arbiter are generally accorded respect and even finality when supported by substantial evidence. 7 Thus. after finding the explanations of private respondents unsatisfactory. why [they] should not be dismissed" for the loss of company funds. . private respondents filed a complaint for illegal dismissal against petitioner National Bookstore and/or its President Alfredo C. On 31 July 1992. 282 of the Labor Code. 1992. the Labor Arbiter declared private respondents to be entitled to reinstatement with payment of full back wages under Art. The Management also placed private respondents under preventive suspension effective immediately. their dismissal was not founded on valid and justifiable grounds as provided under Art. 6 The NLRC affirmed with modification the decision of the Labor Arbiter by deleting the award of damages and attorney's fees for lack of sufficient basis. back wages." On 4 February 1993." Moreover. this petition raising the basic issue of whether private respondents were illegally dismissed. Cornelio A. on 30 July 1992 the Management through Personnel Manager Atty. as amended. private respondents explained in writing what transpired on 28 and 29 June 1992. asked private respondents to "explain in writing not later than end of store hours on August 1. they appealed that they "have been honest and sincere to [their] work and religiously rendered [their] services to the company to the best of [their] ability. basically denying responsibility over the lost company funds.

it was not even shown that they had access to the vault where the money was kept. 283 14 and 284 15 of the same Code... Jr. Thus. 19 A perusal of the records of the case does not in any way show that private respondents were even remotely negligent of their duties so as to cause the loss of petitioner National Bookstore's funds. and. 18 Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence. It must also show with convincing evidence that the dismissal was based on any of the just or authorized causes provided by law for termination of employment by an employer. 11 The requisites for a valid dismissal are: (a) the employee must be afforded due process. or the entire absence of care. The onus of proving that the dismissal of the employee was for a valid and authorized cause rests on the employer 10 and failure to discharge the same would mean that the dismissal was not justified and therefore illegal. as correctly pointed out by the Labor Arbiter in his decision. 16 Petitioner National Bookstore. if he so desires. the single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.e. in order to constitute a just cause for the employee's dismissal. the neglect of duties must not only be gross but also habitual.We find for private respondents. which private respondents immediately complied with by submitting their joint answer on 31 July 1992. The petition is without merit. assuming arguendo that private respondents . Moreover. (b) if the employer decides to terminate the services of the employee. i. aTDcAH Anent the first requisite. Significantly. On 30 July 1992 it gave private respondents an opportunity to explain why they should not be dismissed for the loss of company funds. (b) the dismissal must be for a valid cause as provided in Art. more than substantially observed this requirement. "we are constrained to terminate your employment or services with the Company effective immediately for gross neglect of duty and loss of confidence. and. the employer must notify him in writing of the decision to dismiss him. 20 Verily." 17 Gross neglect of duty and loss of confidence are just causes for termination of employment by an employer. They were in fact subjected to a thorough body search by petitioner National Bookstore's lady guard before leaving their place of work on the date in issue. on 29 August 1992 petitioner National Bookstore sent another written notice to private respondents informing them of its decision to terminate their services setting forth the reasons therefor. stating clearly the reasons therefor. Moreover. Private respondents were able to illustrate with candor and sincerity the procedure they took prior to the loss which was witnessed by an employee of petitioner National Bookstore. To quote petitioner National Bookstore's Personnel Manager Padilla. But the burden imposed on petitioner National Bookstore does not stop here. a claim not controverted by petitioners. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. he must be given an opportunity to be heard and to defend himself. 282 12 of the Labor Code 13 or for any of the authorized causes under Arts. the employer must furnish the employee with two (2) written notices: (a) a written notice containing a statement of the cause for the termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative.

Certainly. the finding that private respondents have been wrongfully dismissed does not automatically signify that petitioners are liable for moral and other damages. or done in a manner contrary to morals. that the act of dismissal was attended by bad faith or fraud. they may only be awarded if the dismissal was shown to have been effected in a wanton. Consequently. without justifiable excuse. Indeed. 25 Consequently. 29 Again. 23 However. thoughtlessly. Gabriel. perhaps due to the lapse of time since their dismissal. wounded feelings. WHEREFORE. for having been illegally dismissed after 21 March 1989. resulted therefrom. heedlessly or inadvertently. private respondents should be awarded separation pay in lieu of reinstatement 24 computed at one (1) month salary for every year of service with a fraction of six (6) months equivalent to one (1) whole year. Ymasa and Edna L.. that social humiliation. and.. grave anxiety. good customs. this was not adequately established by evidence. private respondents.268. oppressive or malevolent manner. Additional facts must be pleaded and proved to warrant the grant of moral damages under the Civil Code. 22 The Labor Arbiter.916. SHaIDE The deletion of the award of damages is sustained for lack of sufficient basis to justify them. they are entitled to reinstatement to their former positions without loss of seniority rights and payment of back wages. or was oppressive to labor. Private respondents have been illegally dismissed. 21 A breach is willful if it is done intentionally. petitioner National Bookstore lost some funds but that private respondents were responsible therefor was not supported by any substantial evidence. However.22 and P22. IDcTEA On the other hand.e. conformably with established jurisprudence. it could only be a single or an isolated act that cannot be categorized as habitual. As regards exemplary damages. knowingly and purposely. Award of moral damages cannot be justified solely upon the premise that the employer fired his employee without just cause or due process. 30 The award by the Labor Arbiter of P22. etc. although we find otherwise. the Petition is DENIED for lack of merit. respectively.41 as attorney's fees to private respondents Marietta M. i.were negligent. hence. The Decision of the Court of Appeals dated 30 June 2000 and its Resolution of 10 January 2001 affirming the Resolutions of the National Labor . as distinguished from an act done carelessly. 28 or where the party involved is entitled to moral or compensatory damages. 27 These were not shown in the instant case. not a just cause for their dismissal. loss of trust and confidence to be a valid ground for dismissal must be based on a willful breach of trust and founded on clearly established facts. the NLRC and the Court of Appeals were unanimous in declaring that there was no willful breach of confidence in the instant case as petitioners failed to establish with certainty the facts upon which it could be based. if such reinstatement would prove impracticable and hardly in the best interest of the parties. or public policy. being reasonable is sustained. as for attorney's fees. private respondents are entitled thereto as they were compelled to litigate with petitioners and incur expenses to enforce and protect their interests. 26 are granted full back wages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement.

However. NLRC. Arboleda v. 8.R. 123880. NLRC.Relations Commission dated 8 October 1997 and 9 February 1999 are AFFIRMED. CA Rollo. Ramos are DIRECTED jointly and severally to reinstate private respondents Marietta M. and full back wages inclusive of allowances and other benefits or their monetary equivalent from 29 August 1992 up to the time of the finality of this Decision. CMP Federal Security Agency. 26-55. Petitioners National Bookstore.. Inc.R. 303 SCRA 26. NLRC.. Gothong Lines. No. Javier and Ireneo B. 243-255. 19-29. Resolution penned by Commissioner Joaquin A. Buena and De Leon. Decision penned by Associate Justice Ramon Mabutas. 9. and Alicia L.. Rollo. v.. 117963. Inc. pp. Javier was on leave. Maranaw Hotels and Resort Corporation v. and Alfredo C. Commissioner Lourdes C. Sabio. 307 SCRA 141. 11 February 1999..R. 6. petitioners are likewise DIRECTED to pay jointly and severally each private respondent separation pay equivalent to one (1) month salary for every year of service. No. Inc. 5. v. No. p. 303 SCRA 38. 18 May 1999. See Note 3. concurred in by Associate Justices Demetrio G. 308 SCRA 340. Inc. 11 February 1999. JJ. G. Jr. concurred in by Associate Justices Jose L. 15 February 1999. Sabio. 106648. 3. Santos.. G. id. No. Audion Electric Co. Demetria and Jose L. Costs against petitioners. Azcor Manufacturing. pp. citing Gabisay and Gomez v. . Rollo. Mendoza. a fraction of six (6) months being considered one (1) whole year. Genilo.. Jr. 11.. Jr.. pp. Jr. Gabriel to their former positions without loss of seniority rights plus payment of full back wages.R. 125298. Penned by Labor Arbiter Facundo L. 23 February 1999. G. which we AFFIRM. id. plus attorney's fees awarded by the Labor Arbiter. Sabio. concur. concurred in by Commissioner Ireneo B. See Note 4. 2. and concurred in by Associate Justices Demetrio G.R. 303 SCRA 164. 11 February 1999. Jr. Resolution penned by Associate Justice Ramon Mabutas. v. 303 SCRA 99. pp. NLRC.R. Tanodra. Ymasa and Edna L. Inc. 72. v. No. Bernardo. G. NLRC. NLRC. Leda. Jr. 10. 96685. See Note 1. G. Penned by Associate Justice Ramon Mabutas. Bernardo. 7. NLRC. 4. if reinstatement is no longer practicable. No. Quisumbing. G. No. 119509.R. Footnotes 1.. Demetria and Jose L. 303 SCRA 540. concurred in by Commissioners Lourdes C. ATICcS SO ORDERED. 26-55. Resolution penned by Commissioner Tito F. Jr. G. 108311. 17 June 1999. pp. 32-33. Records. Carlos A.

111222. 4343. a fraction of at least six (6) months being considered as one (1) whole year. 125212. and. See Note 12. — An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. Art. NLRC. (e) Other causes analogous to the foregoing. 22 November 1999. citing Department of Labor Manual. . 282. 18. Sec. NLRC. In case of termination due to the installation of labor-saving devices or redundancy. 595. The Labor Code With Comments and Cases. No. 13. Vol. See Note 10. G. v.R. That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service.12. Surigao del Norte Electric Cooperative v. p. Reprinted 2001. (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. 19. redundancy. Termination by Employer. 20. (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative.. 16. II.01[27]. 14. 22. NLRC. Art. Gatchalian. C & A Construction Co. Citibank v. 309 SCRA 233. whichever is greater. 28 June 1999. Jr. 128806. retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. Inc. 1999. 18 January 1995.. the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. 284. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices. No. Cesario Alvero Azucena. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses.R. G. See Note 10. G.R. 28 September 1999. v.. whichever is higher. Kams International. Fourth Ed. Art. 240 SCRA 212. whichever is higher. No. by serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. Closure of Establishment and Reduction of Personnel. 283.R. (b) Gross and habitual neglect by the employee of his duties. the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service. A fraction of at least six (6) months shall be considered as one (1) whole year. 315 SCRA 316. Inc. 318 SCRA 784. 17. 21. Underscoring supplied for emphasis. No. G. 15. 122279.— An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided. Ibid. Disease as Ground for Termination.

No. G. 130617. (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest . cannot be recovered. I n c G. 145 SCRA 713. 121324. v. 21 March 1989.R. vs. QUINCIANO GULDE FIRST DIVISION [G.R. vs.23.R. 2002. 259 SCRA 51. After an investigation of the incident. 111042. 29. 27. Go & Associates Law Office for respondent. In the absence of stipulation. he was dismissed from the service along with his truck helper for having been found to connive with the two pilferers. v. 149930 February 22. QUINCIANO GULDE. (New Civil Code). except: . NLRC. 24. NLRC.R. 28. De Guzman v. 25 November 1986. 149930. 2002 SULPICIO LINES. Dee Hua Liong Electrical Corp. other than judicial costs. The National Labor Relations Commission (NLRC) initially . No. SYNOPSIS Respondent herein was an employee of the petitioner for thirteen years until his termination on October 9. 98458. 315 SCRA Primero v. 26 October 1999. He was dismissed from service because of an incident where two looters were able to board and later disembark from the truck he was driving. NLRC. G. The labor arbiter ruled in favor of the petitioner and found the dismissal of respondent as valid. Lambo v. INC. carrying with them four pieces of basketball. 156 SCRA 435. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. 17 July 1996. 317 SCRA 420. No. . attorney's fees and expenses of litigation. G. No. 171 SCRA 415. 1996. Baduel Espina & Associates for petitioner. 312 SCRA 266.. 26. Intermediate Appellate Court. G. v.R. respondent. Pure Foods Corporation v. G.] SULPICIO LINES. 30 September 1999. petitioner.R. INC.R. .R. Dollfuss R. G. 72644. 14 December 1987. 2208. . 25. NLRC. No. NLRC. Cocoland Development Corp. Pepsi-Cola Products Philippines.R. Inc. No. No. Art. No. . 78591.. 587. Reyes. 72182. G. No. 30. 11 August 1999. February 22.

reversed the decision and declared that the respondent was illegally dismissed. However, the NLRC reversed itself when the petitioner filed a motion for reconsideration. The dismissal was held valid for loss of trust and confidence. Respondent elevated the case to the Supreme Court, but the same was referred to the Court of Appeals. The Court of Appeals reinstated the original decision of the NLRC and denied the motion for reconsideration of the petitioner. Hence, this petition for review before the Supreme Court. DCATHS The Supreme Court denied the petition for lack of merit. According to the Court, contrary to the allegations of petitioner, there was no sufficient evidence to show that respondent conspired with the thieves in stealing the four pieces of basketball from petitioner's truck. The Court noted that the respondent had been in petitioner's employ for thirteen years and was not guilty of any infraction during the period. The Court found it difficult to believe that the respondent would deliberately jeopardize his job for something as worthless as basketballs. DIEcHa SYLLABUS LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; TERMINATION OF EMPLOYMENT BY EMPLOYER; LOSS OF TRUST AND CONFIDENCE AS A GROUND; WHEN VALID. — The basic requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence. However, loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. Loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility or trust and confidence. He must be invested with confidence on delicate matters, such as custody handling or care and protection of the property and assets of the employer. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue to work for the employer. Further, well-settled is the rule that "for loss of trust and confidence to be a valid ground for dismissal of an employee, it must be substantial and founded on clearly established facts sufficient to warrant the employee's separation from employment." HaTAEc RESOLUTION KAPUNAN, J p: This is a petition for review on certiorari filed by Sulpicio Lines, Inc. assailing the Decision, dated February 28, 2001, of the Court of Appeals in CA-G.R. SP No. 51510 which declared the dismissal of respondent Quinciano Gulde illegal. Likewise assailed is the Resolution, dated August 21, 2001, of the appellate court denying petitioner's motion for reconsideration. As found by the CA, the factual background of the case is as follows: Petitioner Quinciano Gulde (respondent herein) and one Martin Manapat were employed as truck driver and truck helper of private respondent Sulpicio Lines, Inc. (SLI) (petitioner herein), respectively.

Petitioner Gulde has been in the employ of SLI for thirteen (13) years until his termination from the company on October 9, 1996. SIEHcA The incident which gave rise to the case at bar happened on September 15, 1996. It started after Gulde and Manapat picked up private respondent SLI's cargoes from Nasipit Port for delivery to its warehouse in Butuan City. It appears that two (2) persons by the name of Doming and Etat boarded their truck while they were in Nasipit. Manapat knew of the same since he was riding at the back of the truck. In his affidavit, Manatad related that while they were on their way to Butuan, Domeng and Etat slashed open the cargo where the basketballs were loaded. The two (2) were able to cart away four (4) basketballs when they alighted from the truck at the time petitioner Gulde stopped at the house of one Benedicto Cagampang, a checker of SLI at Calao Street, near the Agusan Institute of Technology (AIT), to give to him his medicines. Manapat added that he did not do anything to stop Domeng and Etat for fear for his life because they have weapons. Manapat further stated that petitioner Gulde was not aware that the two (2) persons boarded their truck. Petitioner Gulde only knew of the same when Manapat told him that Domeng and Etat stole four (4) basketballs. Manapat likewise added that they no longer reported the incident to SLI because one Boy Oco, who has a cargo in their truck and was following them, saw the incident that when Gulde stopped at Calao Street, Oco proceeded to the SLI's warehouse and reported the incident to the warehouseman. HAEDIS Thereafter, SLI reported the incident to the police and petitioner Gulde and Manapat were investigated. On October 1, 1996, they were further investigated by the SLI's officers and on October 9, 1996, they were dismissed for having been found guilty of connivance with the two pilferers. . . . 1 Based on the foregoing facts, the Labor Arbiter ruled in favor of petitioner finding that respondent's dismissal from employment was valid. On appeal, the NLRC initially reversed the decision of the Labor Arbiter. In its decision of April 30, 1998, the NLRC declared that respondent was illegally dismissed and ordered petitioner to reinstate him. The dispositive portion of the NLRC decision reads: WHEREFORE, the decision of the Labor Arbiter is hereby VACATED and SET ASIDE. A new decision is rendered declaring the dismissal of complainant Quinciano Gulde, illegal. As a consequence, respondent Sulpicio Lines, Inc. is directed to reinstate complainant to his former position without loss of seniority rights and other privileges. Respondent firm is further directed to pay complainant his full backwages, inclusive of allowance, and other benefits, from the time his compensation was withheld from him up to the time of his actual reinstatement. 2 However, when petitioner filed a motion for reconsideration, the NLRC reversed itself as it held that respondent's dismissal was valid for loss of trust and confidence. Respondent then elevated the case to the Supreme Court but following the pronouncement in St. Martin Funeral Homes vs. NLRC (295 SCRA 494 [1998]), the petition was referred to the CA. After consideration of the evidence on record, the CA rendered the assailed decision finding the dismissal of

respondent illegal. In effect, the CA reinstated the decision of the NLRC dated April 30, 1998. 3 Petitioner moved for reconsideration but it was denied for lack of merit. 4 Petitioner now comes to this Court alleging in the main that the CA erred in ruling that respondent's dismissal was illegal. Petitioner insists that there was just cause, i.e., loss of trust and confidence, for the termination of respondent's employment. The CA allegedly overlooked certain material facts that would prove that respondent conspired with the thieves in looting four (4) pieces of basketball from petitioner's truck. These facts are allegedly as follows: Firstly, respondent admitted that two looters have been constant riders on board the truck and in fact known to petitioner (should be respondent) and his truck helper; Secondly, respondent allowed the two thieves to board his truck from Nasipit Port to Butuan on the date of the pilferage; Thirdly, respondent deliberately stopped the truck and allowed the two looters to disembark carrying the pilfered cargo with them . . . ; Fourth, petitioner (should be respondent) did not report the pilferage to management despite his knowledge of the incident. . . . Lastly, when the theft was discovered, it was petitioner (should be respondent) and his helper who knew where the stolen items were stashed and in fact went to the place where they were hidden and retrieved them. 5 The petition is bereft of merit. The basic requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence. However, loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. 6 Loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility or trust and confidence. He must be invested with confidence on delicate matters, such as custody handling or care and protection of the property and assets of the employer. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue to work for the employer. 7 Further, well-settled is the rule that "for loss of trust and confidence to be a valid ground for dismissal of an employee, it must be substantial and founded on clearly established facts sufficient to warrant the employee's separation from employment." 8 In this case, contrary to the allegations of petitioner, there is no sufficient evidence to show that respondent conspired with the thieves in stealing four (4) pieces of basketball from petitioner's truck. As found by the CA:

[I]t can be gleaned that the evidence presented in the case did not clearly prove that petitioner wilfully breach his duty. It was not proven that indeed he connived with the thieves. The same was even commented upon by the NLRC when it said that the allegations that petitioner (respondent herein) knew the thieves were not even found in the police report. (p. 29, Rollo) Additionally, the reason given by the truck helper as to his inaction in preventing the thieves from taking the basketballs is not incredible. His reaction given the situation is not beyond human reaction to similar circumstances. It is a natural reaction to think about one's safety first before the safety of another's property. cAHIaE Likewise, contrary to petitioner's claim, respondent did not stop the truck to allow the looters to disembark. Rather, respondent made a brief stop at the house of a co-employee in Calao Street near the Agusan Institute of Technology to deliver his medicines. 9 In fact, as testified by Manapat, respondent's companion, respondent was not aware that the two pilferers boarded the truck and he learned about the theft only when Manapat told him about it. 10 In fine, petitioner failed to present sufficient evidence to show that respondent committed acts that would warrant his dismissal for loss of trust and confidence. It is significant to note that respondent had been in petitioner's employ for thirteen (13) years and it has not been shown that during this period he had been guilty of any infraction against petitioner. It is difficult to believe that he would deliberately jeopardize his job for something as worthless as basketballs. WHEREFORE, premises considered, the instant petition is hereby DENIED for lack of merit. SO ORDERED. Davide, Jr., C.J., Puno and Ynares-Santiago, JJ., concur. Footnotes 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Rollo, pp. 30-31. Id., at 32. Id., at 37. Id., at 40. Id., at 16-17. PLDT vs. NLRC, 303 SCRA 9 (1999). Sanchez vs. NLRC, 312 SCRA 727 (1999). Cruz vs. NLRC, 324 SCRA 770 (2000). See CA Decision, p. 2; Rollo, p. 30. Id.

C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a, I n c

G.R. No. 128118 February 15, 2002 GSIS vs. COURT OF APPEALS, ET AL. FIRST DIVISION [G.R. No. 128118. February 15, 2002.] GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. THE HONORABLE COURT OF APPEALS and CONRADO O. COLARINA, respondents. Legal Services Group for petitioner. Pejo Buenviaje & Associates for private respondent. SYNOPSIS The instant case involves fifteen (15) parcels of land originally titled in the name of Associated Agricultural Activities, Inc. (AAA), with a total land area of 32,398,264 square meters, situated in Barrio Malaran and Lamintao, Municipality of Dimasalang (now Uson), Masbate. The said parcels of land were mortgaged by AAA to petitioner Government Service Insurance System (GSIS) as security for the payment of its loan. When AAA failed to pay the loan, petitioner foreclosed the mortgage constituted on the lots. Petitioner was the highest bidder at the foreclosure sale. Within the one-year redemption period, private respondent Conrado O. Colarina purchased subject lots from AAA. Thereafter, he voluntarily offered to sell the said properties to the Department of Agrarian Reform (DAR). After the lapse of the redemption period, without a redemption of the subject lots being effected, petitioner consolidated ownership over the subject lots in its name. Thereafter, petitioner executed a Deed of Transfer of said lots in favor of the DAR pursuant to Executive Order No. 407. Despite repeated demands of private respondent, the Land Bank of the Philippines (LBP) and the DAR refused to determine and pay the just compensation for the controverted lots prompting him to file a case with the Regional Trial Court of Masbate. Petitioner moved for dismissal of the case on the ground of failure to state a cause of action. Petitioner argued that private respondent had no right to sell the lots to the DAR because what it acquired from AAA was only the right to redeem the lots in question. Failing to so redeem, he never became the owner of said lots and therefore was not a real party in interest in the case for determination and payment of just compensation. The trial court dismissed private respondent's complaint for failure to state a cause of action. On appeal, the Court of Appeals resolved to set aside the assailed orders of the trial court and directed it to proceed with the trial on the merits. Hence, the present petition. cETCID

it treated the motion to dismiss as a motion for summary judgment. the evaluation of the court a quo should be limited to the complaint itself. Notably. however. the word "offer. Without said approval and acceptance. At any rate. Admittedly. The Court also considered the fact that the questioned lots are already titled in the name of the farmer beneficiaries not by reason of the DAR's purchase thereof from private respondent. ask that he be compensated for that which was never bought from him." is subject to acceptance. THE RULING IS TENABLE UNDER THE CIRCUMSTANCES. The motion was allowed and favorably acted upon by the trial court. cede and convey after the foreclosure of his properties are the right to redeem the land. But whatever right private respondent acquired from AAA loses legal significance in the present case in view of his failure to redeem the foreclosed properties. private respondent failed to show that the DAR accepted and approved his offer to sell. much more. IN AS MUCH AS THE OPPOSITION TO THE MOTION TO DISMISS FILED BY PRIVATE RESPONDENT DID NOT TENDER A LEGAL ISSUE. when the motion to dismiss is based on lack of cause of action. CIVIL PROCEDURE. inasmuch as the opposition to the motion to dismiss filed by private respondent did not tender a genuine issue. Thus. — The decision of the Court of Appeals is premised on the ratiocination that since the motion to dismiss of petitioner is based on failure to state a cause of action. Indeed. use and enjoyment of the same during the period of redemption. According to the Court. therefore. Private respondent may have the right to offer for sale what he expects to be his. The voluntary offer to sell is in fact reviewed and evaluated by the DAR before a corresponding notice of acceptance is sent to the landowner. This is tenable under the circumstances. It must be noted. HICATc . the court a quo considered facts not stated in the complaint in assessing whether it states a cause of action. Private respondent offered absolutely no denial to the averment that what he acquired from AAA was merely the right of redemption which he never exercised within the redemption period. but he certainly has no right to sell what never became his. it is settled that the only rights which a mortgagor can legally transfer. it set aside the assailed orders of the trial court because the latter went beyond the allegations in the complaint in determining whether private respondent's complaint states a cause of action. Without the notice informing the landowner of the DAR's conformity with the offer to sell. In effect. REMEDIAL LAW. and the possession. the rule is that. but by reason of petitioner's transfer of ownership over said lots to the DAR.The Supreme Court set aside the Resolution of the Court of Appeals and reinstated the Order of the Regional Trial Court dismissing private respondent's complaint. that the motion to dismiss in the case at bar was filed by petitioner after it has filed an answer. Thus. THE TRIAL COURT DID NOT ERR IN TREATING THE MOTION TO DISMISS AS A MOTION FOR SUMMARY JUDGMENT. and the court cannot take cognizance of external facts or hold preliminary hearings to ascertain their existence. private respondent cannot validly presume that his offer to sell has been accepted by the DAR and that the latter will now assume the payment of the loan to the GSIS. only the statements in the complaint may be properly considered. the lower court can validly dispense with the trial and proceed to render a summary judgment. SYLLABUS 1. resulting in the consolidation of ownership in petitioner. private respondent cannot safely presume that his voluntary offer to sell was accepted by the DAR.

. but he certainly has no right to sell what never became his. ASK THAT HE BE COMPENSATED FOR THAT WHICH WAS NEVER BOUGHT FROM HIM. TcIAHS DECISION YNARES-SANTIAGO. 1997 Resolution 2 of the Court of Appeals 3 in CA-G. SP. When the one (1) year redemption period expired without private respondent exercising the right of redemption.. — While it is true that under DAR Administrative Order No. SERIES OF 1989. ADMINISTRATIVE LAW. 40610. ID. Civil Case Nos. 1996 5 Orders 6 of the Regional Trial Court of Masbate. which set aside the March 13. No. ID. VOLUNTARY OFFER TO SELL MUST BE ACCEPTED BY THE DAR. it is not necessary that the voluntary offeror of the lot be the registered owner thereof. The voluntary offer to sell is in fact reviewed and evaluated by the DAR before a corresponding notice of acceptance is sent to the landowner. J p: This is a petition for review under Rule 45 of the Rules of Court assailing the October 28.R. 407. series of 1989. — It is not disputed that the subject lots were not redeemed from petitioner. 1996 4 and the April 24. private respondent cannot validly presume that his offer to sell has been accepted by the DAR and that the latter will now assume the payment of the loan to the GSIS. ownership over the foreclosed properties was consolidated in the name of petitioner. because whatever right he may have had over said lots was defeated by the consolidation of ownership in the name of petitioner who turned over the subject lots to the DAR. Notably.2. but by reason of petitioner's transfer of ownership over said lots to the DAR. BUT HE CERTAINLY HAS NO RIGHT TO SELL WHAT NEVER BECAME HIS. Hence. Without said approval and acceptance. Branch 48. 1996 Decision 1 and the January 29. DEPARTMENT OF AGRARIAN REFORM (DAR). Without the notice informing the landowner of the DAR's conformity with the offer to sell. ADMINISTRATIVE ORDER NO. private respondent cannot safely presume that his voluntary offer to sell was accepted by the DAR. ID. 3. MUCH MORE. ask that he be compensated for that which was never bought from him. HE MAY HAVE THE RIGHT TO OFFER FOR SALE WHAT HE EXPECTS TO BE HIS." is subject to acceptance. in Spec. 3. PRIVATE RESPONDENT HAD NO PERSONALITY TO SUE FOR THE DETERMINATION OF JUST COMPENSATION BECAUSE HE FAILED TO SHOW THAT HIS OFFER WAS ACCEPTED BY DAR. The questioned lots are presently titled in the name of the farmer beneficiaries not by reason of the DAR's purchase thereof from private respondent. the Secretary of Agrarian Reform and the Land Bank of the Philippines (LBP). and more importantly. Clearly. 3. The instant case involves fifteen (15) parcels of land 8 originally titled in the name of Associated Agricultural Activities.. 4242-43. much more. The instant controversy stemmed from a complaint 7 for "Determination and Payment of Just Compensation" filed by private respondent against petitioner Government Service Insurance System (GSIS). the latter can legally transfer ownership therein to the DAR in compliance with Executive Order No. private respondent failed to show that the DAR accepted and approved his offer to sell. the word "offer. private respondent had no personality to sue for the determination and payment of just compensation of said lots because he failed to show that his offer was accepted by the DAR. . Private respondent may have the right to offer for sale what he expects to be his.

Transfer Certificate of Title No. Petitioner was the highest bidder at the foreclosure sale. 1989. He added that the balance shall be paid by him within one (1) year from payment of the aforesaid amount. the corresponding certificates of sale were issued. No. that the failure to redeem the said lots within the redemption period has the effect of consolidating the titles thereof in its name. 1988. In its Answer. After the lapse of the redemption period without a redemption of the subject lots being effected. with a total land area of 32. TCT Nos.O. Thereafter. 1995. 1989. petitioner filed a motion to dismiss 12 on the ground of failure to state a cause of action. private respondent informed petitioner of its willingness to pay 20% of the repurchase price within 30 days from receipt of the acceptance of his offer. the LBP and the DAR refused to determine and pay the just compensation for the controverted lots. 10 which mandates all government owned and controlled corporations to transfer to the DAR all landholdings suitable for agriculture. Failing to so redeem. on April 16. he voluntarily offered to sell the said properties to the Department of Agrarian Reform (DAR). When AAA failed to pay the loan. he never became the owner of said lots and therefore was not a real party in interest in the instant case for determination and payment of just compensation. 1988. private respondent purchased subject lots from AAA. and subsequently registered on May 19. in a letter dated May 18. Petitioner argued that private respondent had no right to sell the lots to the DAR because what it acquired from AAA was only the right to redeem the lots in question. private respondent informed petitioner of his offer to sell the properties to the DAR. in the name of the Republic of the Philippines. in the names of farmer beneficiaries to whom the lots were subsequently awarded. 11 petitioner alleged that it is the lawful owner of the lots in question. Private respondent manifested that since the properties in question were already under the coverage of the Comprehensive Agrarian Reform Program (CARP). and thereafter. 1990. petitioner consolidated ownership over the subject lots in its name. 407. within the one-year redemption period. 1993. Municipality of Dimasalang (now Uson). In a letter dated May 6. the payment of the redemption price to the GSIS shall be assumed by the government through the DAR and the LBP. 1989. By virtue of the transfer. it can validly transfer said lots to the DAR in compliance with E. private respondent filed the instant case.264 square meters. the Register of Deeds of Masbate issued on December 11. however. (AAA). that being the lawful owner of the lots. Masbate. Thereafter.Inc. Private respondent. 407. On September 19. received no reply from the petitioner. petitioner executed a Deed of Transfer of said lots in favor of the DAR pursuant to Executive Order No. Despite repeated demands of private respondent. in the name of petitioner. petitioner foreclosed the mortgage constituted on the lots. situated in Barrio Malaran and Lamintao.398. on November 3. On December 8. . T-103. These parcels of land were mortgaged by AAA to petitioner GSIS as security for the payment of its loan. Hence. 1990. 94 to TCT No. Likewise. T-7882 to T-7891. 9 On April 25. 1991. on November 5.

the trial court dismissed private respondent's complaint for failure to state a cause of action. Civil Case No. the respondent court set aside the assailed orders of the trial court and directed it to proceed with the trial on the merits. 1996. DISMISSED THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION. 1996 and April 24. II THE COURT OF APPEALS ERRED IN RULING THAT THE DECISION OF THE TRIAL COURT WAS BASED ON CONCLUSION DESPITE THE CLEAR ADMISSION BY RESPONDENT COLARINA IN THE COMPLAINT THAT THE SUBJECT PROPERTIES IN QUESTION HAVE BEEN FORECLOSED BY THE PETITIONER AND THERE WAS FAILURE TO EXERCISE THE RIGHT OF REDEMPTION DURING THE ONE (1) YEAR REGLEMENTARY PERIOD OF REDEMPTION BY THE MORTGAGOR OR HIS SUCCESSORS-IN-INTEREST. He simply declared that petitioner was a necessary party in this case being the mortgagee of the disputed lots. the instant petition on the following alleged errors: I THE COURT OF APPEALS ERRED WHEN IT FAILED TO TAKE JUDICIAL NOTICE THAT ONLY REGISTERED LANDOWNERS CAN AVAIL THEMSELVES OF VOLUNTARY OFFER TO SELL (VOS) UNDER THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP). The decretal portion thereof states: Viewed from the foregoing.In his Opposition to the Motion to Dismiss. in view of the foregoing. SO ORDERED. On March 13. The dispositive portion thereof reads: WHEREFORE. 13 private respondent did not dispute the claim of petitioner that he failed to redeem the properties within the allotted period. 1996. 4243. 15 Hence. Respondent Court is hereby directed to proceed with the hearing of Spec. AS SPECIFICALLY REQUIRED UNDER ACT 3135 as amended. On October 28. THE TRIAL COURT BASED ON THE ALLEGATIONS IN THE COMPLAINT AND NO OTHER. III THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE TRIAL COURT "DOUBTED" THE VERACITY OF THE COMPLAINT. 14 With the denial of his motion for reconsideration on April 24. the complaints of the above-entitled cases are hereby ordered DISMISSED with costs against the plaintiff. ON THE CONTRARY. respectively are hereby set aside. SO ORDERED. 1996. 1996. petition is hereby given due course and the Orders of respondent Court dated March 13. IV . private respondent appealed to the Court of Appeals.

MUCH LESS ADDUCED IN THE TRIAL COURT. the word "offer. it set aside the assailed orders of the trial court because the latter went beyond the allegations in the complaint in determining whether private respondent's complaint states a cause of action. the evaluation of the court a quo should be limited to the complaint itself. 17 It must be noted. The voluntary offer to sell is in fact reviewed and evaluated by the DAR before a corresponding notice of acceptance is sent to the landowner. WHICH WAS NOT AMONG THE EVIDENCE ALLEGED. however. resulting in the consolidation of ownership in petitioner. The applicable rules and procedure governing voluntary offer to sell (VOS) at the time private respondent made his offer provides: IV. cede and convey after the foreclosure of his properties are the right to redeem the land. Thus. it is not necessary that the voluntary offeror of the lot be the registered owner thereof. the lower court can validly dispense with the trial and proceed to render a summary judgment. and the court cannot take cognizance of external facts or hold preliminary hearings to ascertain their existence. Admittedly. The motion was allowed and favorably acted upon by the trial court. 18 Private respondent offered absolutely no denial to the averment that what he acquired from AAA was merely the right of redemption which he never exercised within the redemption period. At any rate. inasmuch as the opposition to the motion to dismiss filed by private respondent did not tender a genuine issue. 20 private respondent failed to show that the DAR accepted and approved his offer to sell. While it is true that under DAR Administrative Order No. the court a quo considered facts not stated in the complaint in assessing whether it states a cause of action. In effect. This is tenable under the circumstances. Thus. when the motion to dismiss is based on lack of cause of action. that the motion to dismiss in the case at bar was filed by petitioner after it has filed an answer. series of 1989. the rule is that. xxx xxx xxx Municipal Agrarian Reform Officer (MARO) xxx xxx . use and enjoyment of the same during the period of redemption. 19 But whatever right private respondent acquired from AAA loses legal significance in the present case in view of his failure to redeem the foreclosed properties. it treated the motion to dismiss as a motion for summary judgment. Indeed. only the statements in the complaint may be properly considered. Notably. 16 The decision of the Court of Appeals is premised on the ratiocination that since the motion to dismiss of petitioner is based on failure to state a cause of action. 3. Operating procedures The following procedures shall be observed for every Voluntary Offer to Sell (VOS): xxx B. therefore. and the possession." is subject to acceptance. Without said approval and acceptance. it is settled that the only rights which a mortgagor can legally transfer.THE COURT OF APPEALS ERRED WHEN IT CONSIDERED ANNEX "C-1" OF THE RESPONDENT'S PETITION. private respondent cannot safely presume that his voluntary offer to sell was accepted by the DAR.

ask that he be compensated for that which was never bought from him. determine the suitability/productivity of the land and prepare an investigation report with his findings and recommendations using CARP Form No. Refer the VOCF to the Regional Attorney for review and to determine completeness and legal sufficiency of the documents submitted. private respondent cannot validly presume that his offer to sell has been accepted by the DAR and that the latter will now assume the payment of the loan to the GSIS. Private respondent may have the right to offer for sale what he expects to be his. The questioned lots are presently titled in the name of the farmer beneficiaries not by reason of the DAR's purchase thereof from private respondent. Schedule an investigation of the land being offered for sale. If the subject landholdings is found not suited for agricultural productions. private respondent had no personality to sue for the determination and payment of just compensation of said lots because he failed to show that his offer was accepted by the DAR. and more importantly. because whatever right he may have had over said lots was defeated by the consolidation of ownership in the name of petitioner who turned over the subject lots to the DAR. Clearly. Hence. after which notify the local BARC accordingly and then invite the prospective beneficiaries to a conference at the site of the land. 8) .2. recommend the same for rejection. with copies thereof posted in a conspicuous place in the municipal building and barangay hall where the property is located (CARP Form No. When the one (1) year redemption period expired without private respondent exercising the right of redemption. 3. . much more. xxx C. It is not disputed that the subject lots were not redeemed from petitioner. without the notice informing the landowner of the DAR's conformity with the offer to sell. xxx D. 3. If the VOS is in order. ownership over the foreclosed properties was consolidated in the name of petitioner. . . but he certainly has no right to sell what never became his. but by reason of petitioner's transfer of ownership over said lots to the DAR. 2. the latter can legally transfer ownership therein to the DAR in compliance with Executive Order No. 21 Evidently. With the assistance of the BARC. notify the landowner of DAR's decision to acquire the land. xxx xxx Regional Director (RD) Review and evaluate the VOCF and supporting documents. 2. 1. xxx xxx Provincial Agrarian Reform Officer (PARO) 1. Review and evaluate the MARO's report and all pertinent documents relative to the landowner's compensation as attached to the VOCF. 407. . The notice shall be in writing and shall be served on the landowner by personal delivery or by registered mail.

Plan Psu-14504. 1. Lot No. agro-forestry lands and other lands of the public domain suitable for agriculture. in view of all the foregoing. 10. No. Philippine National Bank. C.T.C.1196. 6.C. 9.T. 1996 Decision and the January 29.. T. T-1197. Plan. 1. Presidential Commission on Good Government. T-1188. 6. 1997 Resolution of the Court of Appeals in CA-G. 5. Lot No. The October 28. T-1192. 3. government-owned and controlled corporations or financial institutions such as the Development Bank of the Philippines. No.C. 3. No. No. xxx xxx xxx SECTION 1. Plan Psu-9095. All Government instrumentalities including but not limited to government agencies. 2. pasture lands. Records. Lot No. No.C. Plan Psu-145404. p. p. 7. Issued by Judge Jacinta B. T.C. 1112). Ninth Division. p. 240. No. Lot No. Plan Psu-14504. Imperial (chairman). 1990. No.C. Rollo. 2. Composed of Associate Justices Corona Ibay-Somera (ponente). Lot No. Lot No. 1996 Orders of the Regional Trial Court of Masbate. 11-15. 24. State Colleges and Universities. JJ.R. p. Branch 48.C. T-1189.T.. Lot No. 36. Plan Psu-145404. The March 13. pp. Plan Psu-90598. Lot No.T. 8. Plan Psu-145404. No. Footnotes 1. 9. and titled — Accelerating the acquisition and distribution of agricultural lands. SO ORDERED. No. T-1190. Plan Psu-90598. Lot No. No. No. 40610 are SET ASIDE. 1. Republic Planters Bank.C. T-1193. Records. Department of Agriculture. T. Asset Privatization Trust. Civil Case Nos.J. fishponds. Records. Celia LipanaReyes (member) and Jorge S. shall immediately execute Deeds of Transfer in favor of . Records. pp. Lot No. Plan Psu-145404. Davide. T-1194.T.C. Plan Psu-90597. 4. SP.T. 4242-43 are REINSTATED. T. 1. Psu-14504. concur.WHEREFORE. Plan Psu-145404. 2. Plan Psu-14504 (Deed of Sale. Plan Psu-14. the petition is GRANTED. 10..T. T. Lot No. Records. 5. Dated June 14. 4.T. T. Jr. Lot No. T. Lot No. 2. 261. T. T. 8. Tambago. T.T. Rollo. T-1195. T. Lot No.T. 1996 and April 24. 3. 7. Plan Psu-597. Lot No. T-1191. p. Department of National Defense. Puno and Kapunan.C. in Spec.

p. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. pp. 3. 19.. 11. pp.. 536 [1951]. 320 SCRA 405. Rollo. 209. 1989. citing Drilon v. It shall be sufficient that. Deed of Donation. Court of Appeals. . Operating Procedures The following procedures shall be observed for every Voluntary Offer to Sell (VOS): A. Court of Appeals. 14. 16. the landowner/offeror can establish his ownership of the land. 13-14. I Moran. p. Administrative Order No. 18. 88 Phil. 237. assist the landowner in securing or transferring the Certificate of Title in his name to enable him to collect payment from LBP. Martinez. Vergara v. I n c .the Republic of the Philippines as represented by the Department of Agrarian Reform and surrender to the latter department all landholdings suitable for agriculture . . citing Aranzanso v. Records. p. 417 [1999]. 64. 20. 17. 15. through the series of documents submitted. p. 319 SCRA 323. After the documents of ownership have been submitted. . IV. Records. Litonjua v. 12. Rollo. 21. 241. 270 SCRA 211 [1997]. etc. L & R Corporation. xxx In case Certificate of Title is not yet in the name of landowner to submit instruments of acquisition such as Deed of Sale. Records. 327 [1999]. series of 1989. 1995 Edition. dated February 20. 13. 33-34. pp. xxx Landowner/Offeror xxx For Titled Property a) Certified photocopy of Certificate of Title of the land offered for sale. 607-608. Records. . . Comments on the Rules of Court.

a clerk in the service of petitioner city government. GALZOTE. 131392 February 6. After three (3) years of detention for the nonbailable offense. Balane Tamase Alampay Law Offices for petitioner. 2002 CITY GOVERNMENT OF MAKATI CITY vs. was arrested without a warrant and detained for a kidnapping charge. PRIOR APPLICATION FOR LEAVE OF ABSENCE NOT REQUIRED IN CASE AT BAR." MEANING OF. petitioner. vs. however.R. petitioner city government refused to reinstate her to her position because she failed to apply for leave of absence in proper form. Benjamin L." Petitioner city government. Bargas for private respondent. The Solicitor General for public respondent. if acquitted of the criminal charge.R. claimed that private respondent should be considered on AWOL (absent without leave) and should. be dropped from the rolls. BINAY in his capacity as Mayor of Makati City. Upon returning to work. petitioner city government placed her under suspension until the final disposition of her criminal case. private respondent was finally acquitted.. The Court ordered her immediate reinstatement and payment of backwages from 19 October 1994 up to the time of her actual reinstatement. 2002.] CITY GOVERNMENT OF MAKATI CITY represented herein by JEJOMAR C. No. No. February 6. CIVIL SERVICE COMMISSION and EUSEBIA R. Both the Civil Service Commission and the Court of Appeals held that private respondent should be reinstated because she should be considered "on automatic leave of absence for the period of her detention. EN BANC [G.e. Valero for City of Makati.G. however. SYNOPSIS Private respondent. — The Meaning of her suspension until the final disposition of her case is that should her case be dismissed she should be reinstated to her position with payment of back wages. SUSPENSION OF EMPLOYEE "UNTIL FINAL DISPOSITION OF HER CRIMINAL CASE. Three (3) days after her arrest. therefore. this official communication should be taken as an equivalent of prior approved leave of absence and this arrangement bound petitioner to allow private respondent to return to work after the termination of her case. SYLLABUS PUBLIC OFFICERS. TERMINATION OF EMPLOYMENT. SEHaTC The Supreme Court held that since the petitioner city government itself placed private respondent under suspension until disposition of her case. 131392. CIVIL SERVICE COMMISSION. ET AL. She did not have to apply for leave of absence since she was already suspended by her employer until . i. respondents. Victor A.

will his prolonged absence from office for more than one (1) year automatically justify his being dropped from the rolls without prior notice despite his being already placed under suspension by his employer until the termination of his case. SEIcAD DECISION BELLOSILLO. dropped her from the rolls without prior notice and without her knowledge. still required to file a formal application for leave of absence to ensure his reinstatement upon his acquittal and thus protect his security of tenure? Concomitantly. Private respondent cannot be faulted for failing to file prior to her detention an application for leave and obtain approval thereof. i. Upon her acquittal for lack of evidence and her release from detention she was denied reinstatement to her position. As she drew near her vindication she never did expect the worst to come to her. GALZOTE was employed as a lowly clerk in the service of the City Government of Makati City.. the arrangement bound the City Government to allow private respondent to return to her work after the termination of her case. With her meager income she was the lone provider for her children. But her simple life was disrupted abruptly when she was arrested without warrant and detained for more than three (3) years for a crime she did not commit. J p: Is a government employee who has been ordered arrested and detained for a non-bailable offense and for which he was suspended for his inability to report for work until the termination of his case. this official communication should be taken as an equivalent of a prior approved leave of absence since it was her employer itself which placed her under suspension and thus excused her from further formalities in applying for such leave. which finally resulted in his acquittal for lack of evidence? EUSEBIA R. up to the time of her actual reinstatement. since she was for all practical purposes incapacitated or disabled to do so. On the third year of her detention the city government lifted her suspension. Moreover. . or on 9 September 1991.e.her case would be terminated. Throughout her ordeal in detention she trusted the city government that the suspension imposed on her was only until the final disposition of her case. She was forced to seek recourse in the Civil Service Commission which ordered her immediate reinstatement with back wages from 19 October 1994. This act of petitioner indubitably recognized private respondent's predicament and thus allowed her to forego reporting for work during the pendency of her criminal case without the needless exercise of strict formalities. This pledge sufficiently served as legitimate reason for her to altogether dispense with the formal application for leave. much less gave her an opportunity to forthwith correct the omission of an application for leave of absence belatedly laid on her. The records clearly show that she had been advised three (3) days after her arrest. that petitioner City Government of Makati City had placed her under suspension until the final disposition of her criminal case. the date when she presented herself for reassumption of duties but was turned back by the city government. there was no reason to. At the very least. as in fact it was not required. if acquitted of the criminal charge.

The trial court strongly noted the failure of the prosecution to prove any act establishing her complicity in the crime. 88357 of the Regional Trial Court of Pasig. Without informing private respondent who was then already detained at the Rizal Provincial Jail. 8 and even as her trial for the criminal case was going on. 2 private respondent obtained favorable relief. The meaning of her suspension until the final disposition of her case is that should her case be dismissed she should be reinstated to her position with payment of back wages. 3 What follows is the pathetic story of private respondent Eusebia R. 10 On 19 October 1994 she requested the Municipal Personnel Officer as well as Mayor Jejomar Binay. Galzote and the automatic leave of absence espoused by the Civil Service Commission. and the City Government's insistence that the lowly clerk should have still gone through the formalities of applying for leave despite her detention. today we will do no less by resolving all doubts in favor of the humble employee in faithful obeisance to the constitutional mandate to afford full protection to labor.Petitioner went to the Court of Appeals. We have done justice to the workingman in the past. 4 On 6 September 1991 she was arrested without warrant and detained allegedly for kidnapping for ransom with physical injuries. and thereafter subjected to inquest proceedings 5 with the criminal case eventually docketed as Crim. she was dropped from the rolls of municipal employees effective 21 January 1993 for having been absent from work for more than one (1) year without official leave. 6 Incarcerated from then on. adopted and sustained by the Court of Appeals: Private respondent was employed as a clerk in the Department of Engineering and Public Works of Makati City. both of petitioner city government. in both the Civil Service Commission 1 and the Court of Appeals. 9 Three (3) years later. private respondent filed a letter-request with the CSC for the same cause. the case of petitioner City Government of Makati City revolves around a rotunda of doubt. In other words. Case No. the City Government thereafter changed its policy. for the lifting of her suspension and for her reinstatement to her position in accordance with the 9 September 1991 memorandum. private respondent's substantial compliance with the standing rules. she could not report for work as a result of which she was suspended from office by petitioner City Government starting 9 September 1991 until the final disposition of her case. at its worst. of which petitioner had actual notice. Plainly. and thus ordered her immediate release from detention. 7 Unfortunately. 11 On 4 August 1995. a dilemma concerning the legal status and implication of its suspension of private respondent Eusebia R. Galzote as recorded by the Civil Service Commission. private respondent Galzote was acquitted of the crime charged. She did not have to apply for leave of absence since she was already suspended by her employer until her case would be terminated. The instant case is therefore a dispute between. or on 22 September 1994. and the suspension order couched in simple language that she was being suspended until the final disposition of her criminal case. the requirement that private respondent should have filed an application for leave of absence in proper form. in . Against this concern is the punctilious adherence to technicality. or nearly a year after she made her request for reinstatement from petitioner City Government and no action was taken thereon. but private respondent was sustained and the petition was dismissed. 12 Consequently. however. Metro Manila.

that petitioner City Government of Makati City had placed her under suspension until the final disposition of her criminal case. (c) whether she may be deemed to have abandoned her position. the issues may be reduced to whether private respondent may be considered absent without leave or whether she abandoned her job as to justify being dropped from the service for not filing a formal application for leave. the arrangement bound the City Government to allow private respondent to return to her work after the termination of her case. or on 9 September 1991. But the situation momentarily suspending her from work persisted: petitioner City Government did not alter the modus vivendi with private . there was no reason to. Certainly. Galzote may be considered absent without leave. she presented herself to the Municipal Personnel Officer of petitioner City Government to report for work. until her actual resumption of duty. and when finally able to do so. At the very least. private respondent had a valid reason for failing to report for work as she was detained without bail. hence. private respondent did not have the least intention to go on AWOL from her post as Clerk III of petitioner.Resolution No. i. Petitioner would have private respondent declared on AWOL and faults her for failing to file an application for leave of absence under Secs. Encapsulated." The Court believes that private respondent cannot be faulted for failing to file prior to her detention an application for leave and obtain approval thereof. as in fact it was not required. 13 The City Government of Makati City filed a Petition for Review of the Resolution of the CSC but the same was denied by the Court of Appeals. Moreover. and. In the instant case. Indeed. As may be gleaned from the pleadings of the parties. private respondent would have lost no time in filing such piece of document. (b) whether due process had been observed before she was dropped from the rolls. which was the day she presented herself as reporting for work after her detention. The records clearly show that she had been advised three (3) days after her arrest. the issues are: (a) whether private respondent Eusebia R. This pledge sufficiently served as legitimate reason for her to altogether dispense with the formal application for leave.e. had she been told that it was still necessary for her to file an application for leave despite the 9 September 1991 assurance from petitioner. right after her release from detention. 960153 the CSC found merit in her submissions and ordered her immediate reinstatement to the position of Clerk III with back wages from 19 October 1994. 16 This act of petitioner indubitably recognized private respondent's predicament and thus allowed her to forego reporting for work during the pendency of her criminal case without the needless exercise of strict formalities. for AWOL means the employee leaving or abandoning his post without justifiable reason and without notifying his employer.. Hence. since she was for all practical purposes incapacitated or disabled to do so. not entitled to reinstatement with back salaries for not having filed a formal application for leave. this official communication should be taken as an equivalent of a prior approved leave of absence since it was her employer itself which placed her under suspension and thus excused her from further formalities in applying for such leave. thus sustaining the assailed Resolution of the CSC. 20 14 and 35 15 of the CSC Rules and rejects the CSC's ruling of an "automatic leave of absence for the period of her detention" since the "current Civil Service Law and Rules do not contain any specific provision on automatic leave of absence. if acquitted of the criminal charge.

Moreover. her ordeal in jail began on 6 September 1991 and ended only after her acquittal.respondent and lulled her into believing that its commitment that her suspension was only until the termination of her case was true and reliable. and that what he had in mind was to consider her as being on leave of absence without pay and their employer-employee relationship being merely deemed suspended. a void act though in law a mere scrap of paper nonetheless confers legitimacy upon past acts or omissions done in reliance thereof. in the meanwhile. prudence would have dictated petitioner. In placing private respondent under suspension until the final disposition of her criminal case. before depriving her of her legitimate right to return to her position. Under the circumstances private respondent was in. any error on his part should not prejudice private respondent. This fact is evident from the instant petition itself 17 and its attachments. But petitioner City Government would unceremoniously set aside its 9 September 1991 suspension order claiming that it was superseded three (3) years later by a memorandum dropping her from the rolls effective 21 January 1993 for absence "for more than one (1) year without official leave." 18 Hence. 20 Consequently. non in atrocitate. consistere. Paternal power should consist or be exercised in affection. as we have no reason to do so. 19 We find no basis for denying the application of this principle to the instant case which also involves a lowly worker in the public service. not in atrocity. This construction of the order of suspension is actually more consistent with logic as well as fairness and kindness to its author. the MPO. . Significantly. the suspension order was void since there was no pending administrative charge against private respondent so that she was not excused from filing an application for leave. not severed. Patria potestas in pietate debet. It is clear from the records that private respondent Galzote was arrested and detained without a warrant on 6 September 1991 for which reason she and her co-accused were subjected immediately to inquest proceedings. the Municipal Personnel Officer acted with competence so he presumably knew that his order of suspension was not akin to either suspension as penalty or preventive suspension since there was no administrative case against private respondent. As competence on the part of the MPO is presumed. For as we have held. namely. more particularly the incumbent city executive. the idea of a suspended employer-employee relationship is widely accepted in labor law to account for situations wherein laborers would have no work to perform for causes not attributable to them. much less retroactively apply such nullification to deprive private respondent of a compelling and valid reason for not filing the leave application. the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached. we certainly cannot nullify the City Government's order of suspension. to advise her that it was still necessary — although indeed unnecessary and a useless ceremony — to file such application despite the suspension order. in patria potestas. 21 It would indeed be ghastly unfair to prevent private respondent from relying upon the order of suspension in lieu of a formal leave application. thus leaving her no time to attend the formality of filing a leave application. the Information filed against them on 17 September 1991 as well as the Decision of the trial court acquitting private respondent of kidnapping and physical injuries. We do not agree. Hence.

As we ruled in Gonzales v. statements are. . because what cannot be done directly cannot be done indirectly " and. We find no relevance to the reference of petitioner City Government to the presumption of regularity in the performance of duties as regards the service of the memorandum upon private respondent which dropped her from the rolls. He changed his mind only after the public respondent. Notice by publication might have been proper if the address of petitioner were unknown. the subsequent memorandum dropping Galzote from the rolls effective 21 January 1993 should have been sent to her at the Rizal Provincial Jail where she had been detained and where she could have received it. . It is a fact that she relied upon this order. only when he filed his motion to reconsider said resolution. estoppel has bound petitioner to his prior admission. . hence. should be made to answer for the mix-up of private respondent as regards the leave application. and assumed that when the criminal case would be settled she could return to work without need of any other prior act. ruled that the "prohibitive mantle on nepotism would include designation. Strictly speaking. otherwise stated. Per Article 1431 of the Civil Code. petitioner must assume full responsibility for the consequences of its own act. the presumption would only cover the proposition that the . 22 In Laurel v. Nor can we give our concurrence to the further ruling of the respondent Commission that the denial of due process to the petitioner was cured by the publication of said notice in three (3) issues of the Philippine Journal. more specifically. 23 If it is true that the City Government of Makati City wanted to change its stance and consider the suspension memorandum as an error. . This Court will not confer validity upon the later memorandum which violates due process. or should be. as above indicated: the rule does not apply to designation — only to appointment. But as stressed above. and cannot be denied or disproved as against the person relying thereon. At the very least. it should be considered estopped from claiming that its order of suspension is void or that it did not excuse private respondent from filing an application for leave on account of her incarceration.At any rate. In the first place. Civil Service Commission we held — The sole ground invoked by him for exemption from the rule on nepotism is. construed against the one responsible for the confusion. issued barely three (3) days from the date of her arrest. through estoppel an admission or representation is rendered conclusive upon the person making it. In particular. they knew of petitioner's exact address in the United States and there appears no impediment for them to send the notice in this correct address . Since the officials of ATI knew the whereabouts of petitioner. 83-358. Civil Service Commission 24 — It is the ruling of the respondent Civil Service Commission that the sending of the said notice to the residence of petitioner constitutes "substantial" compliance with the demands of due process. it should have required private respondent to file an application for leave as it was its obligation to inform her of such requirement. The disputed ruling cuts too deeply on petitioner's right to continue his employment in the government and unduly dilutes the protection of due process . they have no legal warrant to notify him thru the newspapers. The ruling would have some allure if the address of the petitioner in the United States was not known to the officials of ATI and if his Philippine address was his last known address. in its Resolution No. Nothing less than strict compliance with the demands of due process should have been demanded by the respondent Commission from the officials of ATI in light of the equities of the case.

In Ramo the Dean of the Graduate Studies of the Leyte Normal School abandoned the deanship of the school and transferred to the National Manpower and Youth Council from where she was deriving her salary from the time she went on leave from the school. the affidavit of the party serving. what the Ramo and Quezon cases resolved was the adamant refusal of the employees concerned to return to work by their own choosing and the consistent demand of their respective employers to immediately resume their duties. Besides the voluntary act of the Chief Nurse to refuse the employment. a situation she did not wish for. she was arrested on a charge of kidnapping with serious physical injuries and consequently Criminal Case No. although actually unjust to her. Galzote remained in jail without filing any application for leave with the then Municipality of Makati. Branch 166 . . . the presumption stands on shaky foundation since." 25 Besides. Still and all. In contrast. 28 which dwell on the immateriality of sending the notice to drop the employees concerned from the rolls.03 During the pendency of the criminal case. even the delivery of the memorandum to private respondent's house is of doubtful veracity "in light of the non-submission by the petitioner of the corresponding proof of service. But these cases. and even suffer in silence. 1993 she was dropped from the rolls for her continued absence without official leave for more than a year. 26 The attention of the Court is invited to the cases of Ramo v. Thus — . . petitioner City Government of Makati City had actual and official knowledge of private respondent's incarceration by virtue of a valid process of detention (beginning September 1991 until she was declared innocent of the charges in 1994) as obvious from the admissions in the instant petition that left her no choice but to follow and obey. . as noted by the Court of Appeals. Metro Manila. the instant case involves the technicality of private respondent's failure to file a leave application on account of the representation of petitioner City Government to suspend her from work until her criminal case was terminated. 1991.City Government did serve the memorandum at the house of respondent. Elefaño 27 and Quezon v. much less cherish. are not in point. . containing a full statement of the date. which obliges it to send the notice to where private respondent was detained.02 On September 11.e. the employment could not have but meant so much to her and her family. Being the sole provider of her children. 2. cannot be denied. Borromeo. 88357 was filed against her at the Regional Trial Court of Pasig. On January 21. Petitioner's knowledge thereof.. her former employer. It must be stressed that it was the Dean herself who by desire and choice refused to report for work at the Leyte Normal School. It also refers to the legal and physical impediment of a pending criminal case that prevented her from reporting for work. place and manner of service. sadly. In other words. a lawful order of the court. 2. i. her employer did not also excuse her from filing a leave application. The case of Quezon involved an erring Chief Nurse of the Iligan City Hospital who went on an extended study leave despite the clear instructions for her to return to work immediately. It does not prove however that she received the memorandum or was sufficiently informed that she had been dropped from the rolls. and the absence of any legal impediment to her prompt compliance with the order.

Ramo and Quezon cases do not apply to the case before us. 41. i. 35 is now Sec. these provisions have been amended so that Sec. — Officers and employees in the Civil Service shall be entitled to leave of absence. Significantly. 63 now provides — . 91-1631 dated 27 December 1991 as amended by CSC MC No. the Code specifically vests the CSC to ordain — Sec. with or without pay. the government sat on the application for leave for an unreasonable period of time and the only time it acted on the application was to drop the employee unceremoniously from the rolls. 91-1631 dated 27 December 1991 entitled Rules Implementing Book V of Executive Order No. her reinstatement upon her acquittal. 20 of the Civil Service Rules is now Sec. Leave of Absence. The action of herein petitioner cuts too deeply into private respondent's right to continue her employment in the government and unduly dilutes the constitutional guarantees of security of tenure and due process. 292 and Other Pertinent Civil Service Laws which it has several times amended through memorandum circulars. Sec. as may be provided by law and the rules and regulations of the Civil Service Commission in the interest of the service. 20 or Sec. s. Petitioner City Government relies upon Secs. 63 as amended by CSC MC Nos. instead."32 and for matters concerning leaves of absence. the Administrative Code of 1987 further empowers the CSC to "prescribe.. While Sec. 52 of Rule XVI. 35 or Sec. s. 41. Pursuant thereto the CSC promulgated Resolution No. responsiveness. 1999. therefore. — Leave of absence for any reason other than illness of an official or employee or of any member of his immediate family must be contingent upon the needs of the service. and enforce rules and regulations for carrying into effect the provisions of the Civil Service Law and other pertinent laws. In Gonzales. integrity. 20 and 35 to debunk the CSC ruling of an automatic leave of absence. s.Clearly. Civil Service Commission 29 where we held that due process demands serving upon the employee himself the notice dropping him from the rolls. This factual setting in Gonzales fits snugly into the instant case where the City Government of Makati City slept on the request of private respondent to reinstate her on the basis of the condition in the order suspending her. Hence. adversely by dropping her from the service for not filing an application for leave. The holding of the Civil Service Commission that private respondent was on automatic leave of absence during the period of her detention must be sustained. The CSC is the constitutionally mandated central personnel agency of the Government tasked to "establish a career service and adopt measures to promote morale. and Sec. and institutionalize a management climate conducive to public accountability. amend. It devotes Rule XVI to leaves of absence. the grant of vacation leave shall be at the discretion of the head of department/agency. 1998 and 14. What should indeed apply is our ruling in Gonzales v. 60. progressiveness and courtesy in the civil service" 30 and "strengthen the merit and rewards system.e. on Leave of Absence. " 31 Besides. of Resolution No. 52 still reads — Approval of vacation leave. integrate all human resources development programs for all levels and ranks. 1998. without prior warning and out of the blue. after three (3) long years. efficiency.

the rule is susceptible of no other interpretation. because whether he likes it or not he could not possibly report to work. 33 However. Since the commission is an instrumentality of the state. 94-2795 and 95-5559). He shall. v. the Commission said — When Mr. be informed at his address appearing on 201 files or at his last known written address. . uniformly officially construed it to give to the railroad company the right to designate and select the compress at which the cotton is to be compressed either at origin. Since no separate administrative case was filed against him. exercising delegated powers. other means of seeking and granting an approved leave of absence. 35 and 63. there is no basis to separate him from the service. her act of requesting the Municipal Personnel Officer for reinstatement after she was released from jail shows that she had no intention to go on AWOL. As a general rule Secs. after all. (italics supplied) 38 . formalities and all. CSC was only interpreting its own rules on leave of absence and not a statutory provision 36 in coming up with this uniform rule. as well as Secs. for many years. the CSC like any other agency has the power to interpret its own rules and any phrase contained in them 37 with its interpretation significantly becoming part of the rules themselves. 20 and 52. . these provisions cannot be interpreted as exclusive and referring only to one mode of securing the approval of a leave of absence which would require an employee to apply for it. Vargas was in jail his services were considered automatically suspended. — An official or an employee who is continuously absent without approved leave for at least thirty (30) working days shall be considered on absence without official leave (AWOL) and shall be separated from the service or dropped from the rolls without prior notice. He is considered on automatic leave of absence for the period of his detention in jail. one of which is the CSC recognized rule of automatic leave of absence under specified circumstances. He could not be expected to file his corresponding application for leave of absence. Further. Railing Co. of his separation from the service. require an approved leave of absence to avoid being on AWOL. — In construing the above and similar antecedent rules bearing on the same subject. As observed in West Texas Compress & Warehouse Co. She is therefore on automatic leave of absence for the period of her detention there being no evidence to show that Galzote deliberately absented herself from work. Besides. Finally.F. It therefore follows that the interpretation officially placed on the order or rule by the commission becomes a part of the rule. Panhandle & S. 35 As properly noted. 34 There are. the railroad commission of this state has. its orders are of the same force as would be a like enactment by the Legislature. Based on the abovementioned decision. not later than five (5) days from its effectivity . CSC Resolution Nos. Vargas had been acquitted of the criminal charges levelled against him. before exceeding thirty (30) days of absence in order to avoid being dropped from the rolls. As the CSC states in its assailed Resolution — In a similar case (Cenon Vargas. Galzote is excused from filing her leave of absence because she could not report to work. however. in transit or at destination.Effect of absences without approved leave. Undoubtedly.

what is the weight of an interpretation given by an administrative agency to its own rules or regulations? Authorities sustain the doctrine that the interpretation given to a rule or regulation by those charged with its execution is entitled to the greatest weight by the Court construing such rule or regulation. 3038 . . APPEAL FROM DECISION OR ORDER OF THE DIRECTOR OF LANDS. — An appeal shall lie from a decision of the Director of Lands to the Secretary of Agriculture and Commerce within a period of sixty (60) days to be counted from the date the interested party received notice thereof unless a motion for reconsideration is filed within the said period. could they still invoke administrative relief by appealing to the Secretary of Agriculture and Natural Resources? Said Administrative official answers in the affirmative. 30 L Ed.This principle is not new to us. . The contemporaneous construction of a statute (and similarly of rules and regulations) by the executive officers of the government whose duty it is to execute it is entitled to great respect. 559). it may be asked: After the civil cases filed by the sub-lessees were thrown out of court. and such interpretation will be followed unless it appears to be clearly unreasonable or arbitrary (42 Am. it being the adopted policy of their office to consider the filing of civil actions in court as suspending the running of said period. 6 is in the nature of procedural rules promulgated by the Secretary of Agriculture and Natural Resources pursuant to the power bestowed on said administrative agency to promulgate rules and regulations necessary for the proper discharge and management of the functions imposed by law upon said office. . in which case. This Lands Administrative Order No. Jur. Looking at the question at issue in this case independently of the aforecited authorities. 6. . which reads as follows: SEC. . and such an interpretation becomes part of the rule (Foley vs. It must be remembered that Lands Administrative Order No. 55 SW [2d] 805. Benedict. Philbrick. . promulgated by the Secretary of the Agriculture and Commerce on May 1. 6 governing the promulgation of decisions and orders of the Director of Lands and providing for the prescriptive period within which appeals may be interposed was issued pursuant to the provisions of section 79(b) of the Revised Administrative Code. Araneta 39 this Court upheld the interpretation of the Department of Agriculture and Commerce of its own rules of procedure in suspending the period of appeal even if such action was nowhere stated therein. maintaining that the period of 60 days provided for by section 2 of the Lands Administrative Order No. 431). . . 120 U. . providing for the filing of appeals from decisions or orders of the Director of Lands to the said Department Secretary. Recognizing the existence of such rule-making authority. 52. MOTION FOR RECONSIDERATION. appeal shall be made within sixty (60) days from his receipt of notice of the order or decision of the Director of Lands disposing of the motion for reconsideration . . In Geukeko v. 6 aforequoted has not yet prescribed. We said — The main question at issue hinges on the interpretation of Section 2 of the Lands Administrative Order No. 1934. section 5 of Act No.S. 2. and should ordinarily control the construction of the statute by the courts (United States vs. 2874 and Act No. It has also been said that: An administrative body has power to interpret its own rules which have the force and effect of law. 86 ALR 477). 122 Tex 193.

We can also say that the interpretation given by the Department of Agriculture and Natural Resources to the provisions of section 2 of Lands Administrative Order No. whether it was a reasonable regulation under a due process test. in cases where the dispute concerns the interpretation by an agency of its own rules. that the CSC has no power to provide for exemptions since none is stated in the CSC rules." 41 An affirmative answer in each of these questions should caution us from discarding the agency's interpretation of it own rules. The interpretation of an agency of its own rules should be given more weight than the interpretation by that agency of the law it is merely tasked to administer (italics supplied). . If the rule on automatic leave of absence were already written in the CSC rules or truly an existing provision therein. . R-3). we should apply only these standards: "Whether the delegation of power was valid. Lands Administrative Order No. and if so. 539. To set aside the CSC ruling will not be consistent with the established principle above stated. 376. Rejecting the CSC ruling on an automatic leave of absence solely for want of a provision expressly and specifically allowing such leave would erroneously repudiate the difference between the agency's own understanding of its rules and its interpretation of a statute. we simply cannot set aside the former on the same grounds as we would overturn the latter. The same precept was enunciated in Bagatsing v. it would have easily implemented the CSC's institution of an automatic leave of absence. the rule of automatic leave of absence clearly falls within the constitutionally delegated power of the CSC and is reasonable under the circumstances to address absences from work which are not attributable to the concerned government employee. Given the greater weight accorded to an agency's interpretation of its own rules than to its understanding of the statute it seeks to implement. Verily. if petitioner City Government plainly applied the proper standards. The underlying idea seems to be that those officials are considered in a better position to decide controversies regarding the disposition of said Estate (italics supplied). further.. and consequently avoided declaring private respondent on AWOL. had upheld the validity and legality of the questioned bidding. It is hinted that the purported automatic leave of absence is a non-existent rule hence CSC has no power to interpret such non-existent provision. whether the regulation was within that delegation. In this connection. The difference is important and should not be glossed over to avoid compromising the authority of the CSC as the constitutionally mandated central personnel agency of the Government. then there would have been no reason for the instant case to ensue and be vigorously . Committee on Privatization 40 where we upheld the action of the Commission on Audit (COA) in validating the sale of Petron Corporation to Aramco Overseas Corporation on the basis of COA's interpretation of its own circular that set bidding and audit guidelines on the disposal of government assets — The COA itself. the agency that adopted the rules on bidding procedure to be followed by government offices and corporations. Commonwealth Act No. 6 appears to be reasonable for it merely reflects the intent of the law in placing the disposition of lands within the Tambobong Estate in the hands of the officials of the Land Department (Executive Order No. More specifically. In this regard.

Magtoto could not report for work because he was in a prison cell. Rule XVI of the Omnibus Rules Implementing Book V of Executive Order No. other events beyond the control of the employee may also force him to be absent from work. In fact. the rule on automatic leave of absence is part and parcel of the authority to drop employees from the rolls under Sec. Section 20 of the CSC Rules allows absences even without prior approved leave. We ruled — The employer tries to distance itself from the detention by stressing that the petitioner was dismissed due to prolonged absence. The detention cannot be divorced from prolonged absence. . 20. Hence. NLRC 43 where we considered a worker to have been on leave of absence without pay pending resolution of a criminal complaint for rebellion against him. akin to predicaments of illness.42 Indeed no tinge of arbitrariness can be ascribed to the concept of automatic leave of absence.disputed. Actually.. In these items of force majeure. Such refusal to be a ground therefor is. This kind of leave of absence is the substantial equivalent in the public sector of our ruling in Magtoto v. It is the latter cases. It is enough that the employer be informed of the absent employee's illness. One caused the other.g. the CSC would have no basis for interpreting its rules since all it had to do was to implement them. Mr. 292 . Thus. which in turn gave the employer a ground to dismiss the petitioner. Since the causes for the detention." Obviously. . the grant of vacation leave shall be at the discretion of the head of department/agency. anchored on the fact that there is no other impediment on the part of the employee concerned which would prevent him from filing said leave application (italics supplied). illness cannot be scheduled and is beyond the control of the absent employee so that contingency upon the needs of the service would be irrelevant. Significantly. 35 and other related provisions of the CSC rules on the requirement of an approved leave of absence. However. what the CSC interpreted in the case at bar were Secs. As explained by CSC — Dropping from the rolls of an employee who fails to file an application for leave during her absence is a non-disciplinary measure provided for under Section 35. we believe that private respondent has sufficiently informed petitioner City Government of her predicament for which no logical purpose arises for a prior leave of application. such as when the employee himself is kidnapped or arrested and detained for alleged crimes. if such legal concept were already in place. 63 of the CSC Rules for it tempers the exercise of such authority where the absences are beyond the control of the concerned employee. e. the employee is excused from filing an application for leave of absence provided that he informs the employer of the unfortunate event underlying his absence. But situations of illness are not the only instances of force majeure. which information is the effective substitute for a prior leave application. "[l]eave of absence for any reason other than illness of an official or employee or any member of his immediate family must be contingent upon the needs of the service. proved to be non- . 35 or Sec. In the instant case. Be it noted that the main concept of "dropping from the rolls" is the refusal of an employee to report for work or to go on absence without official leave (AWOL) despite the employer's notice to report. that the CSC sought to address in interpreting the CSC rules on leave of absence as including or contemplating an automatic leave of absence. of course. in case of illness.

. It was beyond the petitioner's power to limit the duration of his unfounded detention. his forced absences from duty resulting from his arrest and required attendance in court may not be considered official. The CSC Rules themselves (Sec. . Equitable considerations favor the petitioner. UP teaches that although academic freedom is not written in the CSC Rules on leave of absence. an exercise which like UP's academic freedom also has the Constitution as its basis. . 35 and 63 abovequoted) of Rule XVI of the Revised Civil Service Rules in recognition of UP's constitutionally guaranteed academic freedom to allow the university to continue employing a teacher-employee who had been on AWOL. In University of the Philippines v. we rule that the termination was illegal and reinstatement is warranted . Otherwise he shall be considered on leave without pay . 20 or Sec. This power logically flows from the task of the CSC to regulate the civil service in the country as ordained in the Constitution and mandated in the Administrative Code of 1987. It should not be difficult to find another item for him." (italics supplied).44 The same concept may also be found in Sec.existent. . With reasonableness as the standard. When the criminal charges filed are not the direct result of an act performed by him in connection with his official duties. . We therefore advocate equal treatment for CSC's reasonable implementation of its own rules in the specific and actual case of private respondent. 677 of The Revised Manual Instructions to Treasurers 45 — The attendance of a witness in his own behalf. The petitioner is a mere clerk. the CSC is far from being presumptuous when it states that other instances of force majeure (such as the arrest and detention of a civil servant for a crime she did not commit) may excuse the prior filing of an approved leave of absence. Neither do we doubt that the CSC has the power to allow exemptions from prior filing of leave applications. i. . must we recognize the CSC's accepted authority to incorporate as part of the CSC Rules its own interpretations thereof. if he has any. 35) do not limit the powers of the CSC in this regard to cases of illness only. This determination is an exercise of the CSC's constitutional mandates — certainly these mandates are not matters of mere excuses. The case of private respondent Galzote is not the first time that this Court has done away with the requirement of an approved leave of absence. academic freedom. Thus. . to secure his exoneration of charges or matter alleged against him is attendance for his own benefit. If he is not under suspension. if not with more reason. As between the employee and the employer. we can factor such freedom in establishing the validity of UP's action to override it. It was a matter purely within the discretion of the military authorities.e. then equally. . the remedy left for the petitioner is reinstatement to a substantially equivalent position . . if we could accept the exemption of UP from the CSC Rules on grounds not stated therein. the time consumed in such attendance shall be charged to his leave. the latter is in a singularly better position to shoulder the unfortunate consequences of the unfounded detention. He shall not in such case be entitled to salary (italics supplied). . Civil Service Commission 46 we disregarded the literal import of Sec. The employer is a stable company with a large work force . 33 47 (equivalent of Secs. Truly. . It was then the contention of the military that not even the courts of justice should inquire into the causes and the duration of detentions for rebellion-related offenses .

In two (2) other decisions of this Court. All in all. Needless to stress. Now we say. Under RA 6656 (An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of the Government Reorganization) and RA 7160 (The Local Government Code of 1991). Indeed the government cannot be left in the lurch. The fine line between these concerns may be difficult to clearly draw but if we only exerted extra effort to rebel against the allure of legal over-simplification. for that matter. she reported for work as soon as she was free to do so. even if he wanted to return. Clearly. In fact only from an enlightened corps of government workers and an effective CSC grows the professionalization of the bureaucracy. if private respondent's request for reinstatement with back wages is granted. we treated with compassion an absence although without prior leave for causes beyond the control of the absent employee. Manuel 50 we recognized that an employee may be forced to go on leave even if he no longer has any leave credits because of the administrative case that was filed against him. so that he is entitled to all the rights and privileges that should accrue to him by virtue of the office that he held. justice would have been done where it is truly due. This is very much consistent with the elementary rule that a government official or employee who had been illegally dismissed and whose reinstatement had later been ordered is considered as not having left his office. the petition of the City Government of Makati City is DENIED and the Decision of the Court of Appeals affirming Resolution No. but neither could we decree that government personnel be separated from their jobs indiscriminately regardless of fault. In Re: Pedro P. away from her growing children. civil servants who are found illegally dismissed or retrenched are entitled to full pay for the period of their separation. GALZOTE as Clerk III or a position of equivalent rank . In locking her out of her job. Perhaps only a miracle could have provided for them in her forced absence." 49 In Makabuhay v. Our final point. the constitutional mandates of the Civil Service Commission. the City Government illegally deprived her of the opportunity to work and so must be held liable for such unlawful action. It was but natural for him to move his family in the face of danger from his son's enemies and when he was in the province. An efficient and honest bureaucracy is never inconsistent with the emphasis on and the recognition of the basic rights and privileges of our civil servants or. but was unfortunately turned back by petitioner City Government. 960153 of the Civil Service Commission ordering the immediate reinstatement of private respondent EUSEBIA R. petitioner City Government cannot pin the blame on the private respondent Galzote for her failure to assume her work. he could not do so on account of the floods. Lastly. 48 we ruled that "the misfortunes that were visited upon his family and which prevented him from attending office were not of his own making and were beyond his control. Tiongson. enough should be enough. WHEREFORE. the benefits she will derive will not even be enough to compensate her for the untold sufferings and privations she went through while in jail. She must also be paid back wages and other benefits lawfully due her counted from 19 October 1994 when she presented herself for resumption of duties but was refused. we hold that private respondent must be reinstated as Clerk III or a position of equivalent rank and compensation in the City Government.

finds no application in the given situation. Ginzon vs. Gementiza vs. Jr. 21. Justice Josue N. Municipality of Murcia.and compensation in the rank and file service of petitioner City Government of Makati City with back wages from 19 October 1994 up to the time of her actual reinstatement is likewise AFFIRMED. Asedillo. Buena. concurring: I join Justice Bellosillo in his well-crafted and logically compelling ponencia. Jacinto vs. whenever possible. KAPUNAN. San Luis vs. Bellosillo. concur. Secretary of Education. J. 1 The reason of a law may cease in a given situation. It is a consecrated legal axiom that the reason of the law is the life of the law. or any misrepresentation or deception in connection with an application for leave. as opposed to Garcia vs. Puno. Culture and Sports. rules or regulations. Jr. Mr. 20. Chairman. Tan. 229 SCRA 677. 15. Commission on Audit. De Leon. however. the grant of vacation leave shall be at the discretion of the head of department/agency. 78 SCRA 175. in finding for private respondent Eusebia R. Ratio legis est anima. Hence. 113 SCRA 477. Bangalisan vs. which means the reason of the law is its soul. Leave of absence for any reason other than illness of an officer or employee or of any member of his family must be contingent upon the need of the service. 174 SCRA 258. Petitioner maintains that the dismissal of private respondent was justified as it insists on the strict application of the civil service rules on Absence Without Official Leave (AWOL): Sec. Laganapan vs. and Sandoval-Gutierrez. The law. CA. Gloria vs. Separate Opinions VITUG.. Pardo. 333 SCRA 849. Court of Appeals. 276 SCRA 619. This may happen when the purpose of the law sought to be achieved is accomplished. 281 SCRA 657. J. and Caniete vs. or the mischief sought to be repressed is prevented.. Sec. 158 SCRA 1. . Any violation of the leave laws. I would limit the award of back salaries to five years conformably with the pronouncement of this Court in a long line of cases (Cristobal vs. Petitioner assails the decision of the Court of Appeals affirming that of the Civil Service Commission which directed petitioner to reinstate private respondent. vs. though remaining in force and effect. Sec. Ynares-Santiago. in such a case.. of the effective date of such leave. Office of the President. Court of Appeals. 2 This truism holds true in the case at bar. dissenting: I concur with my esteemed colleague. shall be a ground for disciplinary action. Court of Appeals. by an act or event independent of the statute itself. Gallate. 154 SCRA 377. CA. SO ORDERED. Applications for vacation leave of absence for one full day or more shall be submitted on the prescribed form for action by the proper chief agency in advance. Melchor. JJ. 226 SCRA 356). 306 SCRA 287.

The requirement for leave application contemplated in Sections 20 and 35 cannot apply to extraordinary or abnormal situations such as the one private respondent was confronted with. 3 Invoking Sections 20 and 35 quoted above. The CSC recognized that the policy on absence without leave is not a hard and fast rule and admits of some exceptions such as the case of private respondent. petitioner argues that any absence without leave. Accordingly.Sec. on automatic leave of absence for the period of her detention there being no evidence to show that Galzote deliberately absented herself from work. He could not be expected to file his corresponding application for leave of absence. the Commission said: When Mr. was grave and carried with it the capital penalty of reclusion perpetua to death. kidnapping with serious physical injuries." "defiance" or "impertinence. Her life and liberty were then at stake. his services were considered automatically suspended. Her absence from work was clearly involuntary. when the exigencies of the service require the immediate presence and he fails/refuses to return to the service. because whether he likes it or not he could not possibly report to work. there is no basis to separate him from the service. During that time. but due to circumstances beyond her control. 95-5559). CSC Resolution Nos. private respondent could not obviously be expected to think of the formality of filing an application for leave. The criminal charge against her. is a ground for dropping of the officer or employee from the service. 35. It is undisputed that she was incarcerated and was not allowed to post bail. Galzote is excused from filing her leave of absence because she could not report to work. Petitioner's contention is untenable. Vargas had been acquitted of the criminal charges levelled against him. for whatever cause or reason. Since no separate administrative case was filed against him. These were the circumstances that were taken into account by the CSC when it held that private respondent cannot be considered on AWOL as she was considered on "automatic" leave of absence. nor for her superiors to grant it. Private respondent's failure to apply for leave was not because of her "whim. Finally. Officers and employees who are absent for at least thirty (30) days without approved leave are considered on Absence Without Leave (AWOL) and shall be dropped from the service after due notice. 94-2795. her act of requesting the Municipal Personnel Officer for reinstatement after she was released from jail show that she had no intention to go on AWOL. Based on the abovementioned decision. She is therefore. the CSC found in favor of private respondent as it cited its previous ruling in a case involving substantially similar facts: In a similar case (Cenon A. which would have been absurd if she did in the first place! In the situation she was in. Vargas was in jail. He is considered on automatic leave of absence for the period of his detention on jail. 5 . Vargas. she was not in the position to apply for leave of absence. Besides." as petitioner put it. 4 This interpretation of the CSC of the pertinent civil service rules is entitled to great weight and respect. However. the head of office may drop him for the service even prior to the expiration of the 30-day period abovestated.

was defective. that private respondent was even informed of the purported lifting of her suspension. Hence. It is very illogical on the part of an individual who is suspended from work to file a leave of absence during the duration of the suspension. may I respectfully request that the suspension issued on 9 September 1991 be lifted and that the undersigned be allowed to resume position as Clerk III. Petitioner. dated January 21. 8 the undersigned. It does not appear from the records. the manner by which she was dropped from the roll violated due process. 1991 as indicated in her employment record. 9 On the other hand. The CA aptly applied our ruling in Gonzales vs. NERY. be it noted. assumed that there is no need on her part to file an application for leave of absence. Even the service of the notice of termination. 1993. How would private respondent. in view of the suspension order. Jejomar Binay is revealing: On the second ground cited by Atty.Likewise. dated October 19. was not moving from one residence to another. The same was served at the home address of private respondent. petitioner now advances the view that the suspension was erroneous and void as there was then no administrative charge against private respondent. 10 These requisites were not observed in private respondent's case. according to petitioner. I agree with the CA that petitioner's act of suspending private respondent is incongruous to its position that private respondent went on AWOL. to know that her suspension was invalid? Since she was already under suspension. when petitioner fully knew that at that time private respondent was still in prison. the suspension was without basis. To my mind. The ruling would have some allure if the address of petitioner in the United States was not known to the officials of ATI and if his Philippine address was his last known address. why would she still file an application for leave for the duration thereof? Her letter to Hon. 7 However. which is quoted below in part: In view thereof. they knew of petitioner's exact address in the United States and there appears no impediment for them to send the notice in this correct address. Civil Service Commission 11 on this point: It is the ruling of the respondent Civil Service Commission that the sending of the said notice to the residence of the petitioner constitutes "substantial" compliance with the demands of due process. Private respondent was neither notified of the charge against her nor given the opportunity to present her side. As the CA rhetorically asked. But as stressed above. "For how can one who is suspended go on leave?" 6 Petitioner tried to downplay this inconsistency by stating that private respondent's suspension was lifted on December 8. however. The fundamental rule of due process requires that a person be accorded notice and an opportunity to be heard. In other words. private respondent should have filed an application for leave as she was not excused therefrom under the law. 1994. Private respondent's ignorance thereof is evident from her letter-request for reinstatement. this ratiocination is quite unfair. not being well versed in the fine points of the law. in the Department of Engineering and Public Works in this municipality. to .

They were aware that petitioner was not momentarily staying in his address in Quezon City where he could receive said notice. the Makati City government is correct in contending (1) that . having all the consequences of a voluntary resignation. While an abandonment of a position by an employee must be total and under such circumstances as to clearly indicate its absolute relinquishment. it is necessary to show that the incumbent has manifested a clear intention to abandon the office and its duties." 17 For the foregoing reasons. The law will infer an abandonment where the acts and conduct of the employee indicate that he has completely relinquished the duties of his position. Upon her acquittal. she was wrongfully implicated and imprisoned for a crime that she did not commit. Rather. it is grave abuse of discretion for the respondent Commission to hold that there was "substantial" compliance with the notice requirement of the due process. The disputed ruling cuts too deeply on petitioner's right to continue his employment in the government and unduly dilutes the protection of due process. The rule is: A position is held upon the implied condition that the employee will diligently and faithfully perform the duties assigned to him. in order to constitute abandonment. Faced with a choice between a decision that will serve justice and another that will deny it because of a too-strict interpretation of the law. The rule on abandonment by a public employee is explained in this manner: Abandonment of the duties of a position is generally regarded as a form of resignation. dissenting: With due respect. I believe that. We do not and must not unfeelingly apply the law as it is worded. an office cannot be abandoned without the intention by the officer to relinquish the same. petitioner's allegation that private respondent abandoned her position cannot hold water. 12 Finally. not only where his refusal to perform was willful but also where. private respondent's act of immediately requesting that she be reinstated to her position negates any claim that she abandoned the same. for the ultimate end of the law is justice. I concur with the majority opinion and vote to DENY the petition.. as earlier explained. PANGANIBAN. Private respondent had been unjustifiably dismissed from the service due to petitioner's rigid and unreasonable application of the civil service rules. on the basis of applicable laws and rules. Under the circumstances. we are not automatons. whether or not a position has been abandoned is dependent on his acts and conduct rather than his declared intention. albeit prolonged. will resolve in favor of the former. "[a]s judges.avoid service of legal notices. was certainly not due to any intention to relinquish her duties. he in good faith but mistakenly supposed he had no right to it. Bellosillo. though not intending to vacate the position. 14 Further. 16 Indeed. 13 In other words. Justice Josue N. the Court. 15 Private respondent's absence from work. although such intention may be inferred from conduct. Where it appears that the employee refuses or neglects to perform the duties of his position for so long a period of time and under such circumstances as to reasonably warrant the presumption that he does not desire or intend to perform the duties of his position he will be held to have abandoned it. J. yielding like robots to the literal command without regard to its cause and consequence. I dissent from the ponencia penned by Mr. as in this case.

" "Sec. Section 20 of the Rules states that the approval of a leave of absence is "contingent on the needs of the service. and (2) that she was not deprived of due process. when the exigencies of the service require his immediate presence and he fails/refuses to return to the service. unmistakably state that government employees who are AWOL for at least 30 days shall be dropped from the service: "Sec." Clearly. Moreover. It gives no regard for the reason for the absence. She is therefore on automatic leave of absence for the period of her detention ." Thus to secure such approval. . Officers and employees who are absent for at least thirty (30) days without approved leave are considered on Absence Without Leave (AWOL) and shall be dropped from the service after due notice. . Leave of absence for any reason other than illness of an officer or employee or of any member of his immediate family must be contingent upon the needs of the service. the grant of vacation leave shall be at the discretion of the head of department/agency. the current Civil Service Law and Rules do not contain any provision on automatic leaves of absence. inter alia. an incarcerated person is not prevented from communicating with the outside world. Galzote Was AWOL The ponencia of Justice Bellosillo upholds the Court of Appeals and the Civil Service Commission which considered Galzote "excused from filing her application for leave of absence because she could not report [for] work. Hence. cannot be presumed. . the head of office may drop him from the service even prior to the expiration of the thirty (30) day period abovestated. There being no specific or clear-cut provision allowing an automatic leave of absence. even on the ground of incarceration. However."1 I respectfully submit that this holding will not stand scrutiny and analysis. it becomes necessary for one to file an application for it before exceeding 30 days of absence in order to avoid being dropped from the rolls. the above regulation makes no distinction or qualification. 1. No Automatic Leave of Absence To begin with. The Rules. To stress. the abovequoted rule forecloses the possibility of such leave. It simply states that an employee who fails to report continuously for at least thirty days without an approved leave is considered absent without leave. This is not disputed. 35. it is granted only after evaluation of the "needs of the service. 20. After all. Galzote should be deemed absent without leave (AWOL) and dropped from the roll of employees." In providing for absence without approved leave.Respondent Eusebia R. the approval of a leave for any reason other than the illness of an officer or employee. or of any member of that employee's immediate family.

informing it of her plight and applying for leave. . with or without pay. It is essential to the proper delivery of service to the public." 2 Every public employee is bound to . The majority faults the Makati government for its "punctilious adherence to technicality" in requiring observance of the rule on leaves of absence. Even if she was deprived of her liberty. A public office is a public trust. she could not have physically reported for work during her incarceration. — Officers and employees in the Civil Service shall be entitled to leave of absence. .In this case. without an approved leave. private respondent's nonchalance with respect to her duties as a government employee should not be countenanced. 60. it is not a "useless ceremony" as the majority calls it. as between the ponencia's interpretation that would prejudice the government service and an interpretation that would promote and enhance it. integrity. I respectfully submit that an application for leave is not a mere formality. If government employees are given absolute discretion to be absent on their mere say-so. . The law is crystal clear. More important. surely the latter should be upheld. As can be seen from the legal provisions on leaves. still considers the grant subservient to the "interest of the service. rules and regulations. act primarily for the benefit of the public. . Leave of Absence. the law — EO 292 4 — provides: "Sec. "Public office requires utmost integrity and strictest discipline. The only leave of absence that a civil service employee like Galzote is entitled to is that which may be provided by law. and all public officers and employees must at all times be accountable to the people. The government cannot be left in the lurch. she retained the capacity to inform petitioner that she was still interested in her job. That information was necessary to enable the government to take appropriate measures to ensure the smooth delivery of its services to the public. the law itself. 3 Consequently. vacation leave or leave without pay — she cannot be said to have an approved leave. then the efficiency of public service will depend on the whim of the individual employee. there was nothing to stop her from writing to petitioner. Pursuant to the Civil Service Law and Rules. were to be left vacant for an indefinite period of time. as may be provided by law and the rules and regulations of the Civil Service Commission in the interest of the service. However. she should be dropped from the service. serve them with utmost responsibility. Public service would suffer if the position of a government employee. who just disappears without a word. Neither the law nor the rules and regulations of the CSC provide for automatic leaves of absence. . she was clearly AWOL. The rule of law requires no less. . while granting leaves of absence." Thus. True. it was the duty of Galzote to appraise the government of her inability to report for work. Having been absent for more than 30 days without an approved leave. since Galzote did not file an application for any type of leave — whether sick leave. loyalty and efficiency. Over and above the Civil Service Rules.

29 SCRA 350). "The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted.J. Deluao vs. In short. the law and the rules do not provide for "automatic" leaves of absences. 69 Phil. By such regulations. 422. Members of the Board of Administrators. 93 Phil. (University of Santo Tomas vs. the law itself cannot be extended.Much is also being argued about the acquittal of Galzote — that because she was released from detention. How can the Commission "interpret" a nonexisting provision? It is undisputed that the CSC Law and Rules do not provide for an "automatic" leave." 6 Verily. 109 Phil. The criminal charge was not the reason for the loss of her employment. see Collector of Internal Revenue vs. citing 12 C. L-21906. 42 SCRA 660. 8 the Court through then Justice (later Chief Justice) Ramon C. Wise & . Rules that subvert the statute cannot be sanctioned. 1971. "[o]urs is not the duty nor the power to amend the statute. Board of Tax Appeals.S. vs. as follows: "Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of law. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. As to invalid regulations. December 29. I disagree. An administrative agency cannot amend an act of Congress (Santos vs. Casteel. presents no interstitial space wherein to insert. In the present case however. Construction or interpretation is resorted to only in case of doubt on how to understand an existing legal provision. Aquino explained the limitations of administrative regulations adopted under legislative authority. Tupasi Molina." 5 Indeed. Manuel vs. "a meaning that does not appear nor is intended or reflected to appear in the very language of the statute cannot be placed therein. 382. August 29. there is no reason for interpretation or construction. 'judge-made innovations. 376. 1970. (U. She lost her job because of her unexplained absence for several years — her absence without an approved leave. Estenzo. of course. 419. L-25619. 845-46. but only for application. there is no room for doubt: very clearly. Respondent's entanglement in the crime of kidnapping was not instigated by petitioner. Maceran. has always adhered to the well-settled rule that "when the law speaks in clear and categorical language. in a number of cases. she was dropped from the rolls because she was AWOL. and should be for the sole purpose of carrying into effect its general supervisions. then she should ipso facto be returned to her old job and given back pay. Interpretation Refers Only to Extant Laws and Rules The ponencia also contends that the Civil Service Commission is granted sufficient residual authority via its power of "interpreting" its own rules. She was not dropped from the rolls because of the pending criminal case. This is clearly untenable. What is there to interpret? The Court. 319. 33 SCRA 585. which by the way. General Auditing Office. June 30. L-28952. 1969. Villaflor. Teoxon vs. supra). in the words of Cardozo. "' 7 In People v. to allow "automatic" leaves of absence.

dedicated. Del Mar vs.Co. 51 SCRA 340. I disagree. which wanted to retain the teacher. On the other hand. 349). who has been the recipient of scholarship grants and whose continuation in UP's faculty roster is thus "in the interest of the service. 1973. Meer. How then can Gonzales "fit snugly" in the present one? The majority also insists that in University of the Philippines v." . CA." Incongruent Citations The ponencia rules that Gonzales v. Phil. In the present case. Civil Service Commission. since the "city government of Makati had placed her under suspension. academic freedom is NOT involved at all."9 This principle has been reiterated by the Court in Shell Philippines v. vs. 676. it should be exempted from the scope of CSC Rules. Gonzales did not pass upon the critical issue of automatic leaves. I believe that the CSC has no power to interpret an inexistent rule. especially if such "interpretation" takes away the provision of Section 60 of EO 292 which mandates that leaves of absence shall be allowed only "in the interest of the service" — meaning. Veterans Administration. we should also allow herein private respondent — who was also AWOL — to resume her employment. thus. Herein Petition refers to an ordinary employee of the Makati government — not to a teaching personnel of the State University. At bottom. the employer. 11 Applying this principle to the instant case." did not apply for a leave of absence. it is the unwanted employee who is insisting on her employment. This is precisely the problem here — respondent did not apply for any leave. L-27299. Hence. a government employee who has rendered 36 years of his life to public service and who received two merit awards for his continuous. the ponencia opines that by the same token. 78 Phil. 655. In the present case. Galzote's Suspension Was Not Valid The ponencia also asserts that there was no need for Galzote to file an application for leave. here. June 27. the facts of the present proceedings are simply incongruent with those of the cited case. Gonzales involves the failure of the officials of the Agriculture Training Institute to act on the request for leave of absence without pay of therein petitioner. Central Bank of the Philippines" 10 and Land Bank of the Philippines v. Civil Service Commission 12 "fits snugly into the instant case. 13 — a Decision I had the honor of writing — this Court allowed UP to continue employing a teacher who had gone AWOL." I stress that it was UP. Again. whether with or without pay. approval cannot be presumed but may be granted only after considering "the exigencies of government service. The cited case was decided on the basis of UP's academic freedom to select its own teaching faculty. and faithful service in the government. respondent who was charged with the heinous crime of kidnapping with serious physical injuries and who was acquitted "on reasonable doubt. the issue in Gonzales involved the refusal of his superiors to approve his application." I disagree.

" At best then. This is most unfair. Thereafter. there is no pending administrative investigation involving dishonesty. as argued by the majority. if the charge against such officer or employee involves dishonesty. Neither was there. The Makati government is being made to pay for the absent employee's rank negligence or failure in applying for a leave of absence. Galzote can seek shelter in this void suspension order only for 90 days. or neglect in the performance of duty. 292 provides that '[t]he proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation. "estopped from claiming that its order of suspension is void. this letter. the appealed CA Decision requires the government to give back pay to respondent for the many years she did not work. That letter was delivered to her house. 1991 to December 8. the "suspension" imposed on her was clearly erroneous and void. The majority claims that to attribute to Galzote knowledge of the nullity of her suspension is "too harsh" on a "lowly clerk." 15 Assuming for the sake of argument that Galzote's preventive suspension was valid or that the Makati government is. She did not respond to." In this case. Consequently. she was not excused from filing an application for leave. she could indeed be dropped from the service thirty days after that date for being AWOL." In the present case. for which reason she was dropped from the rolls. "Under the aforesaid provision. much less contest. Finally. she should have applied for the required leave of absence. Galzote Was Accorded Due Process Section 35 of the Civil Service Rules provides that an employee who is on AWOL "shall be dropped from the service after due notice. informing her that she had been reported absent without leave for over a year. or neglect in the performance of duty. oppression or grave misconduct. it is the nature of the charge against an officer or employee which determines whether he may be placed under preventive suspension. . on September 9. 14 this Court has ruled that preventive suspension is valid only as an incident in a pending administrative investigation. 1991. Court of Appeals. "Section 51 of Executive Order No. the years she was unheard from. the years during which another employee performed what she should have done." Suffice it to say that "ignorance of the law excuses no one from compliance therewith. 1991. or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service. 1993. 2. Since her suspension was only from September 9. oppression or grave misconduct. Accordingly.In Bangalisan v. any charge against Galzote that would warrant her removal from the service." still it is hornbook doctrine under Section 52 of the Administrative Code that a preventive suspension is valid only for "a period of ninety (90) days after the date of suspension. petitioner sent Galzote a letter dated January 21.

how can a leave be ever automatic. It should be considered further that petitioner is a public corporation. 1993. in Quezon v. In the present case. when she herself did not bother to inform it of her situation. know. staying away from one's regular employment in the government or remaining on leave without pay is something that an employee can scarcely be unaware of. Our Ethical Standards Law requires public officials and employees to observe "utmost integrity and strictest discipline.The Court of Appeals assumed that petitioner knew of the continued incarceration of Galzote and thus opined that it knew her address to be the Rizal Provincial Jail. claim that their absence was "due to circumstances beyond their control. 16 this Court en banc — speaking through the learned Justice Florentino P. and keep track of the whereabouts of Galzote." They cannot be allowed to just "disappear" from their jobs and then. Metro Manila. as of January 21. . especially here where no application was even filed? Approval cannot be presumed. that the written notice contemplated in Rule XVI. respondent was not prevented by the alleged "circumstances beyond her control" from writing her superiors and advising them of her desire to resume work after her incarceration. Consequently. It is undisputed that she had not filed any application for leave of absence. Finally. It therefore follows that petitioner had no record of the reason for her continued absence. after many years. however. shows a total absence of support for such assumption. Borromeo. She was merely one of its many thousand employees. informing her that she was considered AWOL was due notice to her. An examination of the records. depending on the exigencies of the service." EPILOGUE OVER AND ABOVE the legalisms debated in the ponencia and in this opinion is the judicial policy of upholding public service. Thus." Indeed. So. Pasig. to expect it — specially its many officials — to take a special interest in. the letter addressed to private respondent and delivered to her house. Why should public service be prejudiced by her unexcused failure to apply for a legally required leave of absence? It must be stressed that approval of a leave application is not automatic. but is subject to the discretion of competent authorities. For it to rely on its records in ascertaining where to address notices to its numerous employees would be more in accord with reason and the exigencies of the public service. government service would greatly suffer if public servants are allowed unbridled liberty in finding excuses for the violation of simple rules. In the nature of things. would be unreasonable and unjustly burdensome on its part. Feliciano — has unanimously ruled that the notice contemplated by the Civil Service Rules is not jurisdictional in nature and the failure to give such notice does not prevent the dropping of the employee concerned from the government service. and in any case we now so hold. Section 33 is not jurisdictional in nature and that the failure to give such notice by the appropriate government office does not prevent the dropping of the employee concerned from the government service. Said the Court: "We read Isberto and Ramo to have held.

1. Const. is misplaced. Docketed as I.. p. 18. 3. Quisumbing and Carpio. Mendoza. C. Id. penned by CSC Chairman Corazon Alma G.. SP No. 50. Id. CA-G. 8. Gaminde. Pasig. Id. Id. 39-40. Crim. 166. I believe that the better policy is to uphold public service. 40195. Art.J. discipline and integrity. Art. 49. 7429. Jr. Id. Davide. pp. 12. 50-51. Paras and Lourdes K. 960153. Rollo. Jr. 2 Decision penned by Associate Justice Salvador J. with all due respect. 39-40. Footnotes 1... Id. 57-60. pp. 45. Ereneta. 59-60. Sec. id. This is just and fair. pp.. no benefits.What is more. The rule of law requires no less. 9 January 1996." not because of any finding that she did not participate in the crime.. pp. Rollo. Tayao-Jaguros. 9." This tear-jerking rhetoric. No. 3. Melo. Metro Manila. concurred in by Commissioners Ramon P. XIII. no approval. concurred in by Associate Justices Gloria C. par. 6. Resolution No. pp. Why should it pay for such alleged "untold sufferings"? Let it be remembered that she was acquitted "on reasonable doubt.. If compensation is due her. 24. pp. the years she was unheard from and the years that another person performed what she should have done. 5. 52-53. pp. 10... p. pp.. p..S. Id. the appealed CA Decision requires the government to give back pay to respondent for the many years she did not work.R. II. 7. Sec. The ponencia holds that the "back pay and benefits she would receive will not even be enough to compensate her for the untold sufferings and privations she went through while in jail. Case No. . Valdez. 13. then it should come from those who caused her alleged "privations" — from those who "maliciously prosecuted" her if any — not from her clearly innocent employer. 88357 was raffled to RTC-Br. I stress that the Makati government had absolutely nothing to do with her incarceration. Rollo. 57. Id. No work. No leave. 11.. 8-16. dissenting. JJ.. Jr. no pay. and Thelma P. 4. de Leon. No application. pp. 63-64. 47-48.. 68.

s. No. Rollo. she was arrested on a charge of kidnapping with serious physical injuries and consequently Criminal Case No. Rollo. 27. 1999. 2. G. G. 71562. 1998. No. p. No. 25. 17. 25. the date of the Information.R. 31. G. as amended by CSC MC Nos. 28. Art..g. De Agbayani. p. 19 SCRA 426. In par. 88357 was filed against her at the Regional Trial Court of Pasig." But crossreferred to the fact that private respondent was arrested sans an arrest warrant and later subjected to inquest proceedings. 63 of Rule XVI. 41. I (A). 26.R. 1991. 116781.02 of the Petition. Branch 166. L21696. 91-1631 dated 27 December 1991. Leave of Absence. 12. 3. Municipality of Malabang v. Sec. G. Metro Manila. but certainly earlier or on 6 September 1991. 24. 41. 28 March 1969. Bk. s. 71. 16. 18. No. 23. G. Philippine National Bank. 9 April 1987. 22.. Now Sec. V. 29.. 231127. 1998 and 14. 63-64. Court of Industrial Relations. 25 February 1967. 15. Id. 30 July 1981. No. No. 435. 70953. 52 of Rule XVI. Rollo. See e. 149 SCRA 205. pp. 5 September 1997. 20.14. Tomas Lao Construction v. IX-B.R. as amended by CSC MC No.R. No. 91-1631 dated 27 December 1991. 105752. s. of Res. 106 SCRA 221. pp. 203 SCRA 195. Visayan Stevedore Transportation Company v. No. Leave of Absence. . 226 SCRA 66.R. 28 October 1991. G. No. 278 SCRA 716. G. NLRC. the City Government avers that "On September 11. No. 21. 203-204. Ibid. See Note 24. 32. Rollo. 28113. of Res. Benito. 2 September 1993. 216. p. Sec. 27 SCRA 545. 556293. 29 April 1971 38 SCRA 429. 3. 19. the arrest could not have been made on 11 September 1991. Now Sec. supra. 50. p. Const. 30. 68-69. Ch. De Agbayani v. 49.R.R. 234.

50. Industrial Com. 45. 42. v. KAPUNAN. 29 December 1980. L-40872. No.W. Justice Artemio V. II The Revised Administrative Code with Annotations (1961). 140 SCRA 58. he shall be considered automatically separated from the service. 60 of the Administrative Code does not provide for any rule on leave of absence other than that civil servants are entitled to leaves of absence. Id. 101 SCRA 834. 64-66. 22 July 1975. No. 58-59. This provision states: "Under no circumstances shall leave without pay be granted for more than one year. p. (2d) 558. A. L-10182. that he shall.M. 35. 112399. 246 SCRA 334.W. 132860.R. Benedict. G. Id. 49. 14 July 1995. 325. No. 8. be notified in writing of the expiration thereof with a warning that if he fails to report for duty on said date. pp. its rules are of the Legislature. 808 (1932). 796. 38. 46. 7..S. Utah Hotel Co." 39. 44. Provided. United States of America. 24 December 1957. pp. 65 SCRA 181. 151 P2d 467. 294. J. 472 (1944). and its official interpretation placed upon the rule so enacted becomes a part of the rule. 40.G. 3 April 2001. p. within a reasonable time before the expiration of his one year leave of absence without pay. No. 18 November 1985. Martin. Rollo.ed. G... As a matter of fact." 48.. Sec.R. 812 (1933). concurring: . Cited in R. 352-353. "Since the board of regents exercises delegated powers. Rollo. 55 S. G. he will be dropped from the service. 36. Decision. 41. (2d) 805. 43. 560 (1929). v. p. 840. Id. 47. Norwegian Nitrogen Products Co. No. 19-20. No. Panganiban. Folley v. T-344. 77 L. 288 U. 37. 80. 34. Decision penned by Mr.R. If an employee who is on leave without pay for any reason fails to return to duty at the expiration of one year from the effective date of such leave. pp.33. 15 S. p. 184. 63370.

4.1. 16. 13. Pangan vs. p. CA Decision. 78 Phil. Sto. Rule XVI. 278. 3. 4. 13. p.. 15. 10. 6. p. p.W. Cult of Legalism. 100 N. Divinagracia vs. 1995. 625. 292 and Other Pertinent Civil Service Laws. Rollo. J. 15. 2. p. Government Insurance Board. 244 SCRA 640 (1995). 7. 1996. Court of Appeals. . ibid. January 6. 53 Phil 613. 217 (1947) citing Bocobo. (1990). October 27. 71. Civil Service Commission. pp. Makati Movement Against Graft and Corruption v. Dumlao. 2. Villamor. 1997. 9. 11. Rollo. Ibid. 2d 575 (1943). 150 SCRA 259 (1987). § 435. Viuda e Hijos de Crispulo Zamora v. 13. p. 2d 202 (1960) citing Mechem on Public Officers. De Gomez vs. 5. Statutory Construction. State of Nebraska v. rollo. Agpalo. 14. Alonzo vs. pp. J. City of Scottsbluff. See Note 3. Concurring opinion of Justice Perfecto in Ocampo Vda. Kapunan. 247 SCRA 108. J. Wright and Segado. 1929.. 6. 5. August 9. Omnibus Rules Implementing Book V of Executive Order No. 58-59. Ibid. 175 S.. Green.W. 2-3. One of the legal officers in petitioner's Office of the Municipal Attorney and Chief of Legal Division. Records. 12. 166 SCRA 375 (1988). 244 SCRA 595 (1995). dissenting: 1. CA Decision. p. Section 60. IAC. 3. p. State v. Tomas. 66. PANGANIBAN. 17. 960153. CSC Resolution No. September 28. 8. 2nd Ed. 226 SCRA 66 (1993). Rubenecia vs.

G. A. 2002. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. See also Jacinto v. 633. September 2. 407.R.. 2002. February 1. p.. 102390. J. 1954. Elefaño. respondents.R. per Feliciano. ROGELIO and ELIZA HEMEDEZ. Platon Martinez Flores San Pedro and Leano for petitioners. J. 1981. April 29. Court of Appeals. 2001. 132860. 12. 94 Phil. respondents. February 1.. February 20. Supra. p. No. 149 SCRA 205. Civil Code.. Salubre.] REY LAÑADA. J. 162 SCRA 628. 8. 102404. 1987. SECOND DIVISION [G. 1998. citing Ramo v. April 3. 7. July 30. 106 SCRA 221. 1984. 913. July 31. 13. 1996. Mankiad v. 226 SCRA 66. 276 SCRA 619. et al. April 9. 15. v..R. petitioner. 216. vs. and FRANCIS SANTOS. 862. 234. 127 SCRA 724. COURT OF APPEALS and SPS. COURT OF APPEALS. 1997.R. COURT OF APPEALS and SPS. ET AL. 2001. Ganzon. Land Bank of the Philippines v. 728. July 5. 1977. per Regalado. citing Chang Yung Fa et al. Crisolo v. J (later CJ). 633. Art. Central Bank of the Philippines. v. 16. Macadaeg. vs. per Francisco. 9. 79 SCRA 450. 97 Phil.M. October 18. 6. February 26. 407. J. 458. 3. 2002 REY LAÑADA vs. [G. 11. petitioners. No. 102390 & 102404 February 1. Tanodbayan. ROGELIO and ELIZA HEMEDEZ. CA. per Bengzon.5. Inc.] NESTLE PHILIPPINES. November 25. 258 SCRA 404. Supra. . No. June 27. Espino v. p. 864. MTJ-00-1255. per Escolin. J. 10. 14. Shell Philippines. per Panganiban. I n c G. 1993. Ibid. 1955. Nos. INC.

Lañada.Augustin C. The Supreme Court held that there is no reason to strictly construe the phrase "the party to whom the request is directed" to refer solely or personally to the petitioners themselves. Vied Vemir Garcia Hemedez which happened in a dispersal operation during a strike staged by the Union of Filipino Employees on account of alleged unfair labor practices committed by Nestle Philippines. IMPLIED ADMISSION. Sangco for private respondent. . Private respondents desired the petitioners to admit once again the very matters they had dealt with in their respective answers.. there is no reason to strictly construe the phrase "the party to whom the request is directed" to refer solely or personally to the petitioners themselves. as correctly observed by the lower court. ID. CIVIL PROCEDURE. In the same vein. SYNOPSIS Spouses Hemedez filed an action for damages against several persons for the death of Dr.. as correctly observed by the lower court. Alimagno & P. — In the case at bar. Naperas for R. Cesar S. the subject matters of the request for admission are the same as the ultimate facts alleged in the complaint for which private respondents have filed their respective answers. THE PHRASE "THE PARTY TO WHOM THE REQUEST IS DIRECTED" DOES NOT REFER PERSONALLY TO PETITIONERS IN CASE AT BAR. the subject matters of the request for admission are the same as the ultimate facts alleged in the complaint for which the private respondents have filed their respective answers. Brion for J. SYLLABUS 1. bearing always in mind the aim to attain an expeditious administration of justice. DETERMINED BY COURTS. — The application of the rules on modes of discovery rests upon the sound discretion of the court. Moreover. Moreover. Through their respective counsel. 2. Galasao. MODES OF DISCOVERY. ID. neither is there a showing that petitioners Nestle and Santos did not authorize their respective counsel to file in their behalf the respective answers requested of them by private respondents in the latter's written request for admission. Inc. It need not be emphasized that upon the court's shoulders likewise rests the burden of determining whether the response of the requested party is a specific denial of the matters requested for admission. REMEDIAL LAW. SEHaDI The Hemedez spouses served the defendants a request for admission of the truth of the facts set forth in their complaint and the genuineness of each of the documents appended thereto. Marciano P. As this Court has said. Private respondents thus desired the petitioners to admit once again the very matters they had dealt with in their respective answers. defendants filed their verified answer to the request for admission.. the determination of the sanction to be imposed upon a party who fails to comply with the modes of discovery rests on the same sound judicial discretion. ID. APPLICABILITY THEREOF. It is the duty of the courts to examine thoroughly the circumstances of each case and to determine the applicability of the modes of discovery.

Lorenzo T. Cabuyao. 1989 or fifty-six (56) days thereafter. On October 29. It is indeed a fact that private respondents received a copy of the questioned Order of April 10. Inc. JR. Malaga. are as follows: IaESCH The Union of Filipro Employees (UFE) declared a strike on account of alleged unfair labor practices committed by Nestle Philippines. J p: May the counsel of a party to whom a written request for admission is addressed under Section 1. as well as the fire brigade of Cabuyao. On October 27. by the spouses Rogelio Hemedez and Eliza Garcia Hemedez. When it ruled on the omnibus motion which petitioners believe was filed out of time. OMNIBUS MOTION. In order that it could transfer its products from the Cabuyao factory to its warehouse in Taguig. (Nestle) and put up a picket line in front of the company's factory in Niugan." By denying the motion to strike out the answers of private respondents to petitioners' request for admission. Suffice it to state that the Order sought to be reconsidered by the lower court did not finally dispose of the merits of the case so that it should be covered by the reglementary period stated in Section 39. Nestle hired the trucks of the Alimagno brothers. as the . B-2762. Los Baños. — While the Court upholds the petitioners' contention on the propriety of an answer to a request for admission being filed by counsel. and Jesus.. Laguna. Constancio.. under the command of PC/Capt. Rey Lañada. and the members of the Cabuyao police department under the command of P/Maj. the National Labor Relations Commission (NLRC) issued a temporary restraining order (TRO) enjoining the UFE.. there is no merit in their contention on the late filing of private respondents' omnibus motion. 1987. Petitioners contend that the omnibus motion should have been filed within the 15-day reglementary period as required by Section 39 of the Judiciary Reorganization Act of 1980. barricading and obstructing the points of ingress and egress" from Nestle's Cabuyao plant.3. the lower court simply disposed of a matter that was. the lower court did not terminate the proceedings. IcDCaT DECISION DE LEON. 1989 and that they filed the omnibus motion by registered mail only on June 21. who was then the Officer-in-Charge of Cabuyao.. answer such request for his client? This is the question posed for resolution in these two (2) consolidated petitions for review on certiorari 1 of the Decision of the Court of Appeals dated July 24. Alexander Asinas of the UFE and Francis Santos of Nestle agreed to constitute a panel to discuss about the said trucks and the scabs allowed to sneak into the Cabuyao plant. ID. Jr. Nestle sought the assistance of both the 224th Philippine Constabulary (PC) Company in Camp Eldridge. 1987. NOT A FINAL DISPOSITION OF THE MERITS OF THE CASE. That section speaks of "final orders" and not interlocutory ones or those that leave "something to be done by the court before the case is finally decided on the merits. Laguna. ID. Metro Manila during the strike. Rule 26 of the Rules of Court. its sympathizers and agents to desist from "blocking. in a manner of speaking. 1989 on April 26. 1991 2 that resolved the issue in the negative. TIME WITHIN WHICH TO FILE. an action for damages. The facts attending the tragic incident that triggered the filing in the Regional Trial Court (RTC) of Laguna of Civil Case No. getting in the way of the expeditious disposition of the case. To enforce the TRO. CASE AT BAR.

notwithstanding that Dr. the brothers of Dr. Hemedez mustered strength to ask someone to inform his parents. and the overloaded cargo trucks waiting inside the compound to proceed with getting out of the plant. With gate cleared. he also sideswept a house off the road. At that moment. about the incident as he pleaded with people around to extricate him from under the truck. Dr. Andora. Hemedez. That was the situation in the dispersal operation when Dr. In Galasao's attempt to straighten his course. on his way home from his masteral class at the University of the Philippines College of Public Health. refused to unload the cargo of the truck for fear that the cargo might be looted. and run over and killed two (2) persons sitting on a bench near the parlor facing the Iglesia ni Cristo chapel. Hemedez was finally pulled out from under Galasao's truck. model 1975. Hemedez made the same plea to Capt. Roel. all five (5) trucks succeeded in leaving the compound. however. considering the length of the truck that was also overloaded. and asked the PC soldiers to unload or allow them to unload the truck's cargo. Santos signaled both the PC contingent to disperse the strikers at the barricades in front of the plant gate. Jr. Roel cut the ropes holding the canvass covering the load of the truck in preparation for its being lifted. It was two (2) hours later when the cargo was finally unloaded to other trucks that Dr. DOG-689. in apparent bad faith. began hitting the strikers with truncheons as water cannons from fire trucks assisted them in the dispersal operation that resulted in the arrest of fourteen (14) strikers and injuries to many others. and her daughter. the truck zigzagged northward until it reached the soft shoulder on the right side of the national road where Galasao abruptly swerved the truck to the left to avoid the strikers. He . both in uniform and in plain clothes. the truck went diagonally across to the left side of the road. bumped the car of Dr. and armed with armalites. However. Eliza Hemedez. got off the truck. Hemedez was the godson of Constancio Alimagno. was then leaving the Nestle compound in full speed. Thus. with plate No. Lañada and Jesus Alimagno who had arrived in the area. The truck stopped as it crashed into the chapel's reinforced concrete wall and post. Lañada who. proceeded to the chapel with a lead pipe in hand while his helpers armed themselves with stones. Mrs. Although stones thrown by some strikers broke the windshields of some trucks. Because Galasao did not stop nor slow it down. Laguna where he died shortly after arrival thereat. and.matter did not appear to have been covered by the TRO. through a doctor friend. a Ford Escort 4-door sedan.. After turning left to the national road. and brought to the Perpetual Help Hospital in Biñan. the PC contingent. rammed down a beauty parlor. Roel and Emeterio tried to pull Dr. namely. Galasao lost control of it. Galasao rose from his seat. Hemedez. followed by their mother. However. However. the cargo trucks began leaving the compound with some turning to the right and others to the left into the national road. Mrs. Pinned down by his overturned car. Hemedez out of his car to no avail. he was not able to swerve the truck back to the right to stay on course on the road. He stopped his car not knowing that the sixth ten-wheeler truck owned by Jesus Alimagno and driven by Pacifico Galasao. Sr. arrived. and dragged it until the car turned upside down. To avoid stones being thrown at his direction. Capt. Vied Vemir Garcia Hemedez arrived in the area on board his car. Galasao was driving in a crouching position. apparently anticipating an attack. The soldiers referred Roel to Capt. but she was met with the same adamant refusal to unload the cargo for fear that there might be looting. Emeterio and Rogelio. Lañada and some PC soldiers immediately rushed to the truck to prevent people from looting it.

. 3 On December 8. For his part. Inc. and attorney's fees. had a "trucking and hauling agreement" whereby Belltown agreed to "make deliveries of the products of Nestle" and assumed "liability for any injuries or damages to properties" that would arise from the agreement. Dionicio Hemedez. they ordered the lifting of the truck by Nestle's own forklift. undertook to pay for it. They interposed as special and affirmative defenses that Nestle and Belltown Transport Services. the mother of Jesus. The delayed unloading of the cargo from the truck thus rested upon Belltown's "sole judgment.00) representing loss of earnings of the deceased. Hemedez. The Hemedez family tried to pay Funeraria Dionicio for the funeral services rendered for Dr. the proximate cause of Dr. the spouses Rogelio and Eliza Hemedez.000. parents of Dr. They alleged that the accident happened in the course of an illegal strike and hence. Lañada dismissed the claims for his liability. In their answer to the complaint. He asserted that the unruly mob's attack on the trucks that built up a "monstrous traffic jam" caused the incident.died due to "Intra-thoracic hemorrhage. the Hemedez spouses served the defendants a request for admission of the truth of the facts set forth in their complaint and the genuineness of each of the documents appended thereto.000. as indispensable parties. While he and his men exerted all efforts to save all casualties and not just Dr. Thereafter.000. Hemedez but its owner. Hemedez witnessed in pain the agony of her helpless son as a consequence of the refusal of Capt. Jesus Alimagno." They set up a cross-claim against Galasao in order that he could reimburse them should they be adjudged liable. moral and exemplary damages." They averred that the complaint should be dismissed for failure to implead UFE. massive. Nestle and Santos denied liability for the death of Dr. Hemedez' death "was the violent assault by the strikers against the truck. Capt. Through their respective counsel. Hemedez. the plaintiffs misconstrued his acts "as refusal in their obsessive and hysterical desire to extricate their stricken relative from the place of the accident without regard to the welfare and well-being of the larger throng of persons some of whom were also injured who were just as well entitled to or deserving protection from the contingent of PC soldiers. and PC/Capt. and a counterclaim for attorney's fees for what they called an unfounded suit. Pacifico Galasao. refused to accept payment on the ground that Miguela Alimagno. Hemedez' death. filed Civil Case No. Eighty Thousand Pesos (P80. Hemedez. Lañada. B-2762 in the RTC of Laguna against Nestle. .00) as actual compensation for the destruction of his car. an independent contractor. Capt." He interposed a counterclaim for moral damages and attorney's fees arising from the plaintiffs' having unjustly impleaded him in the "baseless suit" designed to be a speculative monetary claim against Nestle. due to severe impact (Vehicular Accident). Francis Santos. its officers and striking members. Rey Lañada. Nestle and Santos. Lañada and the PC soldiers to help them save his life." Mrs. and Alimagno and Galasao filed their verified answer to the request for admission. 1987. They alleged further that the incident happened outside of Nestle's premises and that when they came to know about it.00) as indemnity for Dr.400. Eleven Million Four Hundred Thousand Pesos (P11. praying for the award of Thirty Thousand Pesos (P30.

the generalizations made in the answer were expected because the plaintiffs requests for admission were substantially identical with the allegations in their complaint. through their lawyers. 1989. and Constancio Alimagno. The Hemedez spouses sought a reconsideration of that Order through an omnibus motion (a) asserting that the matters sought to be admitted were "decisive on the respective liabilities of all defendants". since the purpose of verification is merely to serve as an assurance that the allegations in the pleading are true and correct and not the product of imagination. the lower court denied the omnibus motion except the prayer to amend the complaint. 1989 denying for lack of merit the Hemedez spouses' motion to strike out the defendants' answers and/or declare the matters sought to be admitted as impliedly admitted. The lower court concluded: A cursory reading of the adverted answers to the complaint would show that defendants have substantially complied with the requirements of the rules by so specifically denying the matters which they could not admit and indicating the reasons why they could not admit or deny the specific matters sought to be admitted. the absence of verification is formal and not jurisdictional. The veracity. First. On July 24. the defendants asserted that they observed the rules in filing their answers.Contending that under Section 2 of Rule 26 of the Rules of Court the parties themselves and not their counsel should personally answer the request for admission and hence the answer filed by their counsel in their behalf was "by nature based on hearsay. Nestle. the defendants were bound by the acts of the counsel of their choice." they sought the striking out of said answers. and that the pleading is filed in good faith. and (c) to allow amendment of the complaint would result in delay in the proceedings. Jr. to the request for admission. of their denial or uncommitted stand. is a matter that could be determined only in a full blown trial on the merit where parties could amply support their respective claim. thus leaving such matter controverted. Lañada opposed the omnibus motion on the grounds that: (a) it was filed out of time. Second. and (c) seeking permission to amend the complaint to implead as indispensable parties-defendants Belltown Transport Services. Third. the counsel of a defendant or defendants "reposed upon himself the same undertaking the defendant would have undertaken had he been the one who verified" the answer. (b) it raised no new matters not already taken up in the questioned Order. It held that the grounds relied upon by plaintiffs' counsel in his motion were "more formal than substantial" for several reasons." . On the other hand. (b) stressing the need to resolve the relevancy and materiality of the specific matters requested to be admitted and which were neither admitted nor denied by the defendants. Hence. the court could not "make a categorical ruling as to the veracity of the denials made by defendants of certain facts based on immateriality.. therefore. Santos and Capt. Fourth. by signing and verifying the answer to the request for admission. Magnolia Freight Services. irrelevancy or for lack of information until after it has considered in a full blown trial all the evidence presented and pertinent to the issue of the case. Inc. the trial court 4 issued an Order dated April 10. It stressed that in that particular stage of the proceedings.

Obviously objecting to the reply. No. No. the Court of Appeals rendered the Decision annulling the lower court's Orders of April 10. The First Division of this Court referred the petition to the Court of Appeals where it was docketed as CA-G. within a period designated in the request.R. should a person to whom a request for admission is addressed personally answer the request? Two (2) other collateral issues need resolution: (a) whether or not each answer of the requested party-defendant to the statements sought to be admitted is a specific denial in accordance with the rules. and remanding the case to the court a quo for proper proceedings." This is not the first time that the Court is faced with the issue of whether a party requested to make admissions may reply or answer through his counsel. not even his lawyer. As earlier stated.Refusing to budge from their stand. or within such further time as the court may allow on motion and notice. the matrix upon which the resolution of these petitions rests. Banco Filipino made the requested admissions but denied that the financing corporation had availed of the Home Financing Plan subject of controversy. Hence. Court of Appeals. Fortun. In resolving the issue of whether or not the answer to the request for admission under Rule 26 "should be made by the party himself and nobody else. the instant consolidated petitions for review on certiorari. Objections on the ground of irrelevancy or impropriety of the matter requested shall be promptly submitted to the court for resolution. state: SEC. 1989 and July 24. 1989. granting the motions to strike out the answers subject of the requests for admission and declaring each of the matters requested to be impliedly admitted. 1989 and docketed in this Court as G. which shall not be less than ten (10) days after service thereof. the party to whom the request is directed serves upon the party requesting the admission a sworn statement either denying specifically or setting forth in detail the reasons why he cannot truthfully either admit or deny those matters. 1991. The provision of Rule 26 of the Rules of Court. In PSCFC Financial Corporation v. and (b) whether or not the motion for reconsideration of the questioned Order of April 10. the petitioners offer for resolution the principal issue of whether or not an answer to a request for admission signed and sworn to by the counsel of the party so requested is sufficient compliance with the provisions of Rule 26 of the Rules of Court. 1989 was timely filed. 89399. 6 the petitioner therein served upon the Banco Filipino Savings and Mortgage Bank." (Italics supplied. Section 21 of Rule 138 states — . the petitioner therein made a second request for admission. 18894. 2. the Hemedez spouses sought the review of both Orders of the lower court via a petition for certiorari that was filed on August 16. Through Philip Sigfrid A.) 5 The issue for resolution thus calls for an interpretation of the phrase "the party to whom the request is directed.R. In other words. Implied admission. — Each of the matters of which an admission is requested shall be deemed admitted unless. On July 24. a written request for admission of the truth of certain factual matters. who was not yet a lawyer when Banco Filipino inaugurated its financing plan in 1968." the Court issued a Resolution stating as follows: The argument is untenable.

there is no reason to strictly construe the phrase "the party to whom the request is directed" to refer solely or personally to the petitioners themselves. 21. A request for admission is not intended to merely reproduce or reiterate the allegations of the requesting party's pleading but should set forth relevant evidentiary matters of fact. . 91). or in Rule 20 of the Rules of Court on pre-trial where the parties and their attorneys are both directed to appear before the court for a conference. cited in 27 C. Philip Sigfrid Fortun overstepped his authority. "pointless.SEC. as correctly observed by the Court of Appeals. whose purpose is to establish said party's cause of action or defense. (Italics supplied. East. neither is there a showing that petitioners Nestle and Santos did not authorize their respective counsel to file in their behalf the respective answers requested of them by private respondents in the latter's written request for admission. . the adverse party. Court of Appeals. . . even assuming arguendo that Atty. Private respondents thus desired the petitioners to admit once again the very matters they had dealt with in their respective answers. the theory of petitioner must not be taken seriously. and in all matters of ordinary judicial procedure . 1878 of the Civil Code which enumerates the instances when special powers of attorney are necessary. As this Court has said. Unless it serves that purpose. Banco Filipino has not objected to the response made by its counsel in its behalf. Nonetheless. Authority of attorney to appear. In Po v." and "a mere redundancy. as well as Sec. Rule 138. it is only his client. 71 A2d. so that for counsel to appear at the pre-trial in behalf of his client. it should not be restrictively construed to mean that a party may not engage the services of counsel to make the response in his behalf. and in taking appeals.) 7 In the case at bar. Terry 260.J. — An attorney is presumed to be properly authorized to represent any cause in which he appears. useless. as correctly observed by the lower court. the subject matters of the request for admission are the same as the ultimate facts alleged in the complaint for which private respondents have filed their respective answers. Interestingly. respondent Banco Filipino. otherwise. which has the prerogative to impugn his acts and not petitioner. nor should he be required to make a second denial of those already denied in his answer to the complaint. 752. Petitioner has not shown that the case at bar falls under any of the recognized exceptions as found in Art." Thus. it is. Section 23 of Rule 138 provides that "(a)ttorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing. it will negate the principles on agency in the Civil Code.S. and no written power of attorney is required to authorize him to appear in court for his client . of the Rules of Court. or documents described in and exhibited with the request. 23. Indeed." 8 . . this Court said: A party should not be compelled to admit matters of fact already admitted by his pleading and concerning which there is no issue (Sherr vs. when Rule 26 states that a party shall respond to the request for admission. . he must clothe the former with an adequate authority in the form of a special power of attorney or corporate resolution. Moreover.

1989 on April 26. Petitioners contend that the omnibus motion should have been filed within the 15-day reglementary period as required by Section 39 of the Judiciary Reorganization Act of 1980. Otherwise. The application of the rules on modes of discovery rests upon the sound discretion of the court. the Court emphasized that the rule on admission as a mode of discovery is intended "to expedite trial and to relieve parties of the costs of proving facts which will not be disputed on trial and the truth of which can be ascertained by reasonable inquiry. While the Court upholds the petitioners' contention on the propriety of an answer to a request for admission being filed by counsel. 10 In the latter case. 12 It need not be emphasized that upon the court's shoulders likewise rests the burden of determining whether the response of the requested party is a specific denial of the matters requested for admission. 1989 or fifty-six (56) days thereafter. getting in the way of the expeditious disposition of the case. 1 of Rule 26 requires that the request for admission must be served directly upon the party requested. 1989 and that they filed the omnibus motion by registered mail only on June 21. if the request for admission only serves to delay the proceedings by abetting redundancy in the pleadings. Private respondents who should be most interested in the speedy disposition of the case unfortunately and unwittingly caused its delay by a request for admission that only achieved nothing but further delay in the proceedings. the lower court did not terminate the proceedings. Court of Appeals 9 and in Concrete Aggregates Corporation v. there is no merit in their contention on the late filing of private respondents' omnibus motion. bearing always in mind the aim to attain an expeditious administration of justice. Court of Appeals. It is thus unfair and unreasonable for private respondents to expect the petitioners to answer the requests for admission that they in fact did not personally receive. Suffice it to state that the Order sought to be reconsidered by the lower court did not finally dispose of the merits of the case so that it should be covered by the reglementary period stated in Section 39. that party cannot be deemed to have admitted the genuineness of any relevant matters of fact set forth therein on account of failure to answer the request for admission. That section speaks of "final orders" 13 and not interlocutory ones or those that leave "something to be done by the court before the case is finally decided on the merits." Thus. in a manner of speaking. the lower court simply disposed of a matter that was. as the Court has observed in Briboneria. Moreover. 11 It is the duty of the courts to examine thoroughly the circumstances of each case and to determine the applicability of the modes of discovery. the determination of the sanction to be imposed upon a party who fails to comply with the modes of discovery rests on the same sound judicial discretion." 14 By denying the motion to strike out the answers of private respondents to petitioners' request for admission. the intended purpose for the rule will certainly be defeated. . When it ruled on the omnibus motion which petitioners believe was filed out of time. Private respondents' failure to serve copies of the request for admission directly upon the petitioners themselves suffices to warrant denial of the motion to strike out petitioners' responses to said request.The Court reiterated that ruling in Briboneria v. Sec. In the same vein. It is indeed a fact that private respondents received a copy of the questioned Order of April 10.

1991 is SET ASIDE. ponente. Per the Resolution of February 5. within a period designated in the request. 12. 298 SCRA 363 (1998). 334 Phil. 3. Dela Torre v. 670 (1988). 9." 6. v. or within such further time as the court may allow on motion. Bellosillo. Herrera and Cancio C. the party to whom the request is directed files and serves upon the party requesting the admission of a sworn statement either denying specifically the matters of which an admission is requested or setting forth in detail the reasons why he cannot truthfully either admit or deny those matters. B-2762. 4. 8. 2. 11. 842. 84). The questioned Decision of the Court of Appeals dated July 24. Insular Life Assurance Co. Complaint in Civil Case No.R. which shall not be less than fifteen (15) days after service thereof.. concurring. concur. 10.WHEREFORE.. . p. DAaEIc SO ORDERED. Footnotes 1. 2. which resolution shall be made as early as practicable. Presided by Judge Minita Chico-Nazario. 102390. Pepsi Cola Products Phils. JJ. 7. 93 (1994). Mendoza. Court of Appeals. the consolidated petitions for review on certiorari are GRANTED. 5. Benipayo. B-2762. Objections to any request for admission shall be submitted to the court by the party requested within the period for and prior to the filing of his sworn statement as contemplated in the preceding paragraph and his compliance therewith shall be deferred until such objections are resolved.. this rule states: "SEC. — Each of the matters of which an admission is requested shall be deemed admitted unless. 216 SCRA 838 (1992). with Associate Justices Manuel C.. 238 SCRA 88. Inc. Associate Justice Alfredo L. Under the 1997 Rules of Civil Procedure. Quisumbing and Buena. 77 (1997). and the Regional Trial Court of Laguna is ordered to proceed with dispatch in the resolution of Civil Case No. No. 1992 (Rollo. Garcia. Ltd.. Implied admission. 216 SCRA 607 (1992). p. 164 SCRA 668. Id. G.

La Union. BENGSON COMMERCIAL BUILDINGS. the GSIS itself. January 31. No. I nc. vs. INC.. (BENGSON) obtained loans from the GSIS secured by real estate and chattel mortgages. BAÑEZ. BENGSON filed with the trial court a motion for hearing on the costs of suit.. G. " 14. Sec. and MR. resolution.] GOVERNMENT SERVICE INSURANCE SYSTEM. vs. a writ was issued and 6. Pacifico C. 2002. 2002. BENGSON COMMERCIAL BLDGS. 137448.R. or decision appealed from: . No. YUSINGCO. award. 338 Phil.R. respondents. respondent. RTC-San Fernando. petitioner. The Legal Services Group counsel for GSIS.] GOVERNMENT SERVICE INSURANCE SYSTEM. Inc. Court of Appeals. Branch 26. the trial court ordered the issuance of an alias writ for the execution of the award of P31 million costs of suit. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. EN BANC [G. 137448 & 141454 January 31. awards. . which the court decided in favor of BENGSON. COURT OF APPEALS. the mortgaged properties were extra-judicially foreclosed and sold at public auction to the highest bidder. 141454. in his capacity as Corporate Secretary of SAN MIGUEL CORPORATION. petitioner. Philgreen Trading Construction Corporation v. resolutions. For BENGSON'S failure to settle its arrearages despite due notice. or decisions of any court in all cases shall be fifteen (15) days counted from the notice of the final order. SHERIFF MARIO ANACLETO M. After some time.R. JUDGE VICENTE PACQUING. The trial court issued an order awarding to BENGSON the sum of P31 million as costs of suit. Provincial Sheriff of La Union. A certificate of sale and new certificates of title were thereafter issued in favor of GSIS. Pursuant thereto. judgment. Abello Concepcion Regala & Cruz for respondent in G. 2002 GSIS vs. 433 (1997). Yadao for private respondent Bengson. 39 states that "(t)he period for appeal from final orders. INC. ENRIQUE LL. [G. 141454 SYNOPSIS Private respondent Bengson Commercial Buildings. Nos. No. January 31. judgments.13. BENGSON filed an action for the annulment of the foreclosure sale.R.2 million class "A" shares of stocks of San . BENGSON COMMERCIAL BUILDINGS.

R.. this petition. together with the corresponding levy and execution sale of the 6. ELEMENTS.R. 51131.Miguel Corporation owned by GSIS were garnished and later sold at public auction with BENGSON as the only bidder. (b) identity of rights asserted and relief prayed for. THERE IS NO FORUM-SHOPPING WHEN THE RELIEFS SOUGHT IN BOTH PETITIONS FOR CERTIORARI ARE DISTINCT FROM EACH OTHER. and (c) identity of the two preceding particulars such that any judgment rendered in the other action will. the relief being founded on the same facts. — Forumshopping is an act of a party against whom an adverse judgment or order has been rendered in one forum of seeking and possibly getting a favorable opinion in another forum. equity and justice. the civil action for certiorari and the appeal brought by a party do not involve the same issue. therefore be sustained. ID. respectively. No. amount to res judicata in the action under consideration.2 million shares of stock in San Miguel Corporation. or at least such parties as would represent the same interest in both actions. (b) identity of rights asserted and relief prayed for. GSIS argued that the Alias Writ of Execution. ID. TAcDHS SYLLABUS 1. the proscription against forum-shopping was not . there should be (a) identity of parties. In the second petition. 47669 was a special civil action for certiorari filed by GSIS after its petition for relief from the 6 April 1995 Order of the trial court and its motion for reconsideration were both denied in the 16 January 1997 Decision and 23 April 1998 Order of the trial court. 2. 136874 filed by GSIS and referred by us to the Court of Appeals. there is no forum-shopping where. Hence.R. For it to exist. Thus. CASE AT BAR. amount to res judicata in the action under consideration. which exempts the "funds and/or properties" of GSIS from attachment. and (2) the 8 January 1999 Order denying petitioner's Motion for Reconsideration with Motion to Quash the Alias Writ of Execution. Hence. the relief being founded on the same facts. REMEDIAL LAW. garnishment. The dismissal of both petitions on the ground of forum-shopping cannot. SP No. or at least such parties as would represent the same interest in both actions. for instance. For forum-shopping to exist. regardless of which party is successful. the petition in CA-G.. regardless of which party is successful. Hence. there should be (a) identity of parties. ID. — The petition in CA-G. was a petition for certiorari seeking the annulment of (1) the 16 December 1998 Order of the trial court directing the issuance of an alias writ of execution to enforce the 6 April 1995 Order. No. other than by appeal or special civil action for certiorari. It may also be the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. execution or levy. and (c) identity of the two preceding particulars such that any judgment rendered in the other action will. The Court of Appeals dismissed the petitions on the grounds of forum shopping.. 8291. ID. CIVIL PROCEDURE. On the other hand. The main issue or argument raised in the first petition was that the 6 April 1995 Order awarding P31 million costs of suit contradicted the pertinent provisions of the Rules of Court. Moreover. the reliefs sought in both petitions were distinct from each other. was void for being contrary to the provision of Republic Act No. FORUM-SHOPPING. which was formerly G.. the proscription against forum-shopping was not violated by GSIS. The Supreme Court ruled that the reliefs sought in the questioned petitions were distinct from each other. ACTIONS.

TIMELINESS OF FILING PETITION. The last paragraph thereof. SP No. On 29 April 1998. in the course thereof. it would reverse the denial or dismissal of the petition for relief from judgment. The purpose of this rule was to enable the appellate court to determine not only the existence of any of the grounds relied upon whether it be fraud.R. the appellant could assail the judgment on the merits. — We rule. SP No. and remand the case to the lower court for a new trial in accordance with then Section 7 of Rule 38 of the former Rules. ID. an order denying a petition for relief from judgment was subject to appeal and. PURPOSE. what was submitted was not a certified true copy of the 16 January 1997 Decision of the trial court. therefore. Instead. the Verification and Certificate on Non-Forum Shopping were executed by petitioner's counsel. set aside the judgment in the main case. which was docketed as CA-G. provides that no appeal may be taken from an order denying a petition for relief or any similar action seeking the relief from judgment. On 16 February 1997. 47669 had assailed the 23 April 1998 Order of the trial court denying petitioner's motion for reconsideration. SPECIAL CIVIL ACTIONS.violated by GSIS. — Under the former rule. CERTIORARI. ID. — It must be observed that if the petition in CA G. Hence. 47669 for non-compliance with some of the requirements mentioned in Section 3. it filed the petition for certiorari. ID.. On 11 June 1998. 5. PROPER REMEDY TO QUESTION ORDER DENYING PETITION FOR RELIEF FROM JUDGMENT. be sustained.. It then filed a Motion for Extension of Time to File Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Preliminary Injunction to question the 23 April 1998 Order of the trial court. it would not reverse or modify the judgment on the merits because the judgment involved had become final and executory.. 47669 and 51131 on the ground of forum-shopping cannot. This was also in itself a sufficient ground to dismiss the petition. SP Nos. It is undisputed that the petition was not accompanied with a clearly legible duplicate copy or a certified true copy of the judgment subject thereof. CIVIL PROCEDURE.. REMEDIAL LAW. but also and primarily the merit of appellant's cause of action or defense. ID. EFFECT OF NON-COMPLIANCE WITH REQUIREMENTS.. The dismissal of CA-G.R. however. PETITION SEASONABLY FILED.R. PETITION FOR RELIEF FROM JUDGMENT. Should the appellate court find that one of the grounds for relief from judgment existed and the petitioner had a good cause of action or defense. ID. CASE AT BAR. Rule 46 of the 1997 Rules of Civil Procedure. — [T]he 1997 Rules of Civil Procedure. accident. not by its duly authorized officer. petitioner filed a motion for reconsideration. aTcSID 6. however. as well as its 16 January 1997 Decision denying the petition for relief from judgment. ID. The records disclose that the petitioner received on 4 February 1997 a copy of the 16 January 1997 Decision denying its petition for relief from judgment. as stated in petitioner's motion for extension of time to file a petition. SP No. mistake or excusable negligence. CASE AT BAR. CONTENTS AND FILING. Indeed. PETITION. on this score alone the special civil action was properly dismissed by the Court of Appeals.R. Moreover. SPECIAL CIVIL ACTIONS. 3. 47669. allows the aggrieved party to file a special civil action for certiorari under . specifically Section 1(b) of Rule 41. that the Court of Appeals did not err in dismissing CA-G. the said petition could not have been said to have been filed out of time. it received a copy of the 23 April 1998 Order denying its motion for reconsideration. CERTIORARI. 4. as the case may be..

v. or excusable negligence.R. "Fraud is regarded as extrinsic or collateral. or in contemplation of law. the petition may be filed not later than 60 days from notice of the judgment. honor or property on mere technicalities. the Court held that to deny "the opportunity to right a clear error in the execution of judgment constitutes grave abuse of discretion. the negligence or mistake of counsel binds the client. CASE AT BAR.. AWARD OF COSTS OF SUIT IN THE AMOUNT OF THIRTY-ONE MILLION PESOS. PARDO. Inc. ID. National Labor Relations Commission." In Pacific Mills. the fraud must be extrinsic or collateral.. 'the effect of which prevents a party from having trial. order or proceeding be set aside. ID. but to the manner in which it was procured so that there is not a fair submission of the controversy.'" 3. MUST BE SUPPORTED BY PROOF OR EVIDENCE THEREOF. a real contest or from presenting all of his case to the court. or 43 days from receipt of the 24 April 1998 Order. J." To support such petition. separate opinion: 1.. — As a general rule. accident. GRAVE ABUSE OF DISCRETION. CIVIL PROCEDURE.000. ATTORNEYS.000. What should guide judicial action is that a party is given the fullest opportunity to establish the merits of his action or defense rather than for him to lose life. not to the judgment itself. provide that "when a judgment or final order is entered. its rigors must be relaxed to admit exceptions thereto and to prevent a miscarriage of justice. 7. LEGAL ETHICS. or where it operates upon matters pertaining. MUST BE EXTRINSIC OR COLLATERAL.. the court has the power to except a particular case from the operation of the rule whenever the purposes of justice require it. But if under the circumstances of the case. SP No.000. In other words. or any other proceeding is thereafter taken against a party in any court through fraud. ID. or learned. 2. In . for otherwise there would never be an end to a suit so long as a new counsel could be employed who could allege and show that the former counsel had not been sufficiently diligent. PETITION FOR RELIEF FROM JUDGMENTS. order. the rule deserts its proper office as an aid to justice and becomes a great hindrance and chief enemy. the trial court grievously erred amounting to grave abuse of discretion in denying GSIS's petition for relief from judgment. — The costs of suit in the amount of thirty-one million (P31. experienced.Rule 65 of the Rules. there must be proof or evidence thereof. CERTIORARI. he may file a petition in such court and in the same case praying that the judgment. EXCEPTION. SPECIAL CIVIL ACTIONS. mistake. FRAUD.00). — The 1997 Rules of Civil Procedure... REMEDIAL LAW. A CASE OF. or resolution sought to be annulled. as amended. ID. where a litigant commits acts outside of the trial of the case. Under Section 4 of Rule 65 of the new Rules.00) awarded to BENGSON was patently irregular and absurd. There is "grave abuse of discretion" where "a power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility so patent and gross as to amount to evasion of positive duty or virtual refusal to perform a duty enjoined by. Thus. 47669 was filed on 11 June 1998. AS A GROUND. The petition for certiorari in CA-G. and hence it was seasonably filed.000." It is at once patent that the trial court erred and gravely abused its discretion in awarding "costs of suit" to respondent Bengson in the amount of thirty-one million pesos (P31. ID. — [T]o annul a judgment on the ground of extrinsic or collateral fraud. NEGLIGENCE OR MISTAKE OF COUNSEL GENERALLY BINDS THE CLIENT.

.. a law or a principle in the discharge of his duties.. Escano. ID. unless the total amount claimed runs to billions of pesos for which the filing fees would amount to such sum. including the Court of Appeals. NOT PROVIDED BY THE RULE. ID. ID. — What is more. the trial court conducted a "hearing to receive evidence" on the "costs of suit. when the necessity of so doing was caused by other's breach of legal duty. we held that when there is "a failure to consider so basic and elemental a rule. ID. ID. COSTS. ID.000. and Municipal Trial Courts. the Sandiganbayan. Jr. the Court ruled that relief from judgment is an "act of grace" granted "when the demands of equity and justice should prompt the Court to give petitioner a last chance to defend his right or to protect his interest.00) was patently absurd and void. 'costs are in the nature of incidental damages allowed to the successful party to indemnify him against the expense of asserting his rights in court. ID. — In this jurisdiction. The aforecited rule limits the recovery of "costs of suit" to the items enumerated therein..000.. Thus. DEFINED. "and no . These provisions bind all lower courts.. ID. As heretofore stated. Thus. the items of costs and the specified amounts thereof are fixed in the rule." Consequently. REVISED RULES OF COURT... In Castanos v. The rules prescribe the procedure for taxation of costs. the only "costs" that a winning party may recover are those prescribed in Rule 142. Court of Appeals. the award of "costs of suit" in the amount of thirty-one million pesos (P31.National Power Corporation v." These costs have their own legal meaning and import.. the trial court's denial of the petition for relief from judgment was in grave abuse of discretion. for. A judgment may be annulled when issued with grave abuse of discretion. . It was so glaringly bloated that we would normally expect the trial court and the Court of Appeals to inquire into the absurdity of the award and not to dismiss GSIS's petition on the technical ground that relief from judgment was not a substitute for appeal lost through its counsel's gross inaction or neglect. ID. Clearly." the trial court's order granting "costs of suit" in the exorbitant amount of thirty one million pesos was patently void. — "Costs are certain allowances authorized by statute to reimburse the successful party for expenses incurred in prosecuting or defending an action or special proceedings. PROPER REMEDY TO ANNUL JUDGMENT ISSUED WITH GRAVE ABUSE OF DISCRETION." 4.. ID. Revised Rules of Court (1964 Revision). Any pecuniary award granted to a party in the form of "costs of suit" referred exclusively to the costs specified in Rule 142.'" 6.000. 5." All that must be done is for the prevailing party to give five (5) days written notice to the adverse party of the items of costs claimed by the prevailing party. HEARING TO RECEIVE EVIDENCE ON THE COSTS OF SUIT.. the Court of Tax Appeals. REFER EXCLUSIVELY TO THOSE SPECIFIED IN RULE 142. as it was said." Thus. 7. the Regional Trial Courts. verified by his oath or that of his attorney. — In this case. . the rule does not provide that the trial court shall conduct a hearing to determine the amount of the "costs of suit. CASE AT BAR. the trial court's award to respondent Bengson of thirty-one million pesos (P31.000. the prevailing party may recover only the costs fixed therein "and no other.. independent of the issues of "extrinsic fraud" and "gross negligence of counsel. No court may award costs in excess of the sums specified therein.00) as "costs of suit" cannot be justified by any stretch of the imagination. ID." This is a manifest error. a judge is either too incompetent and undeserving of the position and title he holds or he is too vicious that the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority..

4 On 23 June 1977. Branch 26) rendered a decision (1) nullifying .25 million and P3 million.J p: Before us are two consolidated cases docketed as G. 2794. SMC shares at that time were worth P67. which denied GSIS's petition for certiorari for having been filed out of time and for non-compliance with procedural requirements. the trial court (Regional Trial Court of San Fernando. La Union. No.50 per share. the GSIS itself. La Union. an action for the annulment of the foreclosure sale. He immediately levied on 6. ID. No. which were both filed by the Government Service Insurance System (GSIS. Thus. 51131 & 47699.. SP Nos. which dismissed GSIS's petitions on the ground of forum-shopping." Even if there be no objection to the items of costs. not otherwise: 8. JUDGMENT. Inc. .R. — [T]he procedure on how to execute a money judgment is prescribed in the Rules. As a security for the payment of these loans. the respondent sheriff grossly violated the Rule. cADSCT DECISION DAVIDE. specifying the items objected to.. the adverse party may object. After trial. The first is a petition for review on certiorari assailing the 24 November 1998 1 and 29 January 1999 2 Resolutions of the Court of Appeals in CA-G.R. 47669. The clerk of the court shall then tax the "costs. or in the aggregate sum of P4. the clerk of the court cannot tax costs in amounts more than that specified in the items prescribed in Rule 142. and hence.R.00) per share. BENGSON executed real estate and chattel mortgages in favor of GSIS. (hereafter BENGSON) obtained loans from GSIS on 20 August 1965 and 23 November 1971 in the amounts of P1. The second is a special civil action for certiorari challenging the 14 January 2000 Decision 3 of the Court of Appeals in the consolidated cases of CA-G." Within the five-day period. ID.R. BENGSON filed with then Court of First Instance of San Fernando. which was docketed as Civil Case No. For BENGSON's failure to settle its arrearages despite due notices. 141454. C. respectively.. JR. EXECUTION OF MONEY JUDGMENT. the mortgaged properties were extra-judicially foreclosed and sold at public auction to the highest bidder. SP No. stock market quotations. Either party may appeal to the court from the clerk's taxation.. A certificate of sale and new certificates of title were thereafter issued in favor of GSIS. degraded his office and laid himself open to charges of graft and corruption. On 26 May 1972. THcEaS The pertinent facts are as follows: Private respondent Bengson Commercial Buildings. for brevity).2 million shares of San Miguel Corporation owned by GSIS at its par value of five pesos (P5.000. PROCEDURE ON HOW TO EXECUTE A MONEY JUDGMENT. . 137448 and G. The respondent sheriff could easily check the market value of` the SMC shares by just reading the newspapers of general circulation. a patent nullity. obviously. VIOLATED IN CASE AT BAR. BENGSON sold to GSIS nine units of debenture bonds in the total amount of P900. the provincial sheriff of La Union did not follow the Rule.25 million. It is at this stage that the court takes part in the taxation of costs. Here. the sheriff's levy on shares of SMC that petitioner owned was excessive considering its market value. Plainly.other. .

It was only on 4 May 1995. filed with the trial court an Urgent Omnibus Motion. mortgaged jewelry.798. He also stated that GSIS had not received yet the said Order because its former counsel Atty. amounting to P42. Hence." cATDIH Incidentally. GSIS.000 for the debenture bonds.000 rental monthly until the properties are restored to BENGSON's possession. Atty. and (d) pay the costs. 13 .25 million loans at the legal rate of interest from the finality of the judgment. for to do otherwise would result in the deprivation of GSIS's property "without due process of law on mere technicality.9 million representing accrued monthly rentals and P20. car. and hence that decision of the Court of Appeals became final and executory on 10 February 1988. it did not file a motion for reconsideration or an appeal. and (4) directing GSIS to (a) restore to BENGSON full possession of the foreclosed properties. After the said order became final. stating that the Omnibus Motion should be considered by the court as a petition for relief from the 6 April 1995 Order. A copy of that order was received on that same date by GSIS's counsel Atty.. Terrado had been on AWOL since 6 April 1995. (b) restructure the P4.619. Manager of Legal Department II of GSIS Legal Services Group. (c) pay BENGSON P1. On 15 July 1988. Recto. 5 In its 19 January 1988 Decision in CA-G. foreclosed appliances. through its corporate counsel. and that this gross negligence of Atty.56. and the case was ordered remanded to the trial court for reception of evidence on the costs of suit and for the determination of the veracity of the provincial sheriff's report that the mortgaged properties were no longer in existence. (2) ordering the cancellation of the titles issued to GSIS and the issuance of new ones in the name of BENGSON." He then proceeded to discuss GSIS's "good and substantial defenses. the Court of Appeals affirmed with modification the decision of the court a quo. upon receipt of a copy of the order of execution. as well as a determination of their replacement value should GSIS fail to return them. 6 GSIS "did not lift a finger to question the legality and soundness of that decision". Atty. As stated in our decision in GSIS v. BENGSON filed with the trial court a Motion for Hearing on the Costs of Suit and submitted a Schedule of Costs of Suit. etc. Oscar Garcia. the questioned orders of the trial court. on 15 May 1995. unlawful and deliberate act of not filing the appropriate motion for the reconsideration of. Civil Case No. (3) ordering BENGSON to pay GSIS P900. Gines. Terrado was administratively charged with gross misconduct for his alleged willful. Rogelio Terrado. Terrado should not legally bind GSIS.R. on 5 June 1995. the trial court granted 9 Bengson's ex parte motion for execution. The trial court thus conducted hearings.the foreclosure of BENGSON's mortgaged properties. that GSIS became aware of the 6 April 1995 Order because Atty. 09361. or appeal from. 12 He was eventually found guilty and dismissed from the service. 7 which consisted of various loans owing to different persons. On 6 April 1995. Terrado had been absent without official leave (AWOL) since 6 April 1995. the trial court issued an order 8 awarding to BENGSON the sum of P31 million as costs of suit. or on 24 April 1995. 10 Attached to the motion was an affidavit of merit 11 executed by Margarito C.

docketed as G. (5) petitioner did not rebut BENGSON's evidence. Pursuant thereto. (3) equity or fairness could not be invoked as valid grounds for petition for relief from judgment. SP No. the trial court denied GSIS's Urgent Omnibus Motion.R. The Court thereafter referred the petition to the Court of Appeals for consideration and adjudication on the merits or any other action it would deem appropriate. was ordered consolidated with CA-G. 47669. SP No. SP No. seeking the annulment of both the 16 December 1998 and 8 January 1999 Orders of the trial court. (2) to grant the petition would be to revive the right to appeal which GSIS had irretrievably lost through its gross inaction. This case was docketed as CA-G. as three years had already lapsed since the issuance of the order awarding P31 million costs of suit. but only by its counsel. No. 47669. (4) the copy of the 16 January 1997 Decision was not a certified true copy. and (6) the questioned orders are already final and executory. On 31 January 1999. 136874. Upon denial on 8 January 1999 18 by the trial court of the Motion for Reconsideration with Motion to Quash Alias Writ of Execution. Petitioner received a copy of this order on 4 February 1997. with BENGSON as the only bidder.R. . In its 24 November 1998 Resolution. this Court issued a Temporary Restraining Order (TRO) 20 enjoining the implementation of the 6 April 1995 Order and the transfer. 136874.In its Decision 14 of 16 January 1997. 137448. and filed its motion for reconsideration on 16 February 1997. an alias writ was issued and 6. the trial court ordered 17 the issuance of an alias writ for the execution of the award of P31 million costs of suit adjudged in its 6 April 1995 Order. No.R. On 14 January 2000. CA-G.2 million Class "A" shares of stocks of San Miguel Corporation owned by GSIS were garnished and later sold at public auction. (5) no evidence of extrinsic or collateral fraud was adduced by GSIS. GSIS filed with us a petition. Its motion for reconsideration having been denied in the Order of 23 April 1998 of the trial court. on 16 December 1998. GSIS instituted on 11 June 1998 with the Court of Appeals a special civil action for certiorari. 19 GSIS filed with this Court a petition. No. which was docketed as G.R. 47669 for the following reasons: (1) the petition was filed out of time. (2) the Verification and Certification on Non-Forum Shopping were not done by petitioner's duly authorized officer. (4) the case could not be reopened because res judicata had already set in. 51131. Meanwhile.R.R. which was treated as a petition for relief from judgment.R. 15 which it received on 29 April 1998. When its motion for the reconsideration 16 of the Resolution of 24 November 1998 was denied by the Court of Appeals in its Resolution of 29 January 1999. SP No. On 29 November 1999. the Court of Appeals rendered a consolidated decision dismissing both petitions on the ground of forum-shopping and lifting the TRO issued in G. and (6) the assailed Order of 6 April 1995 had become final and executory. the Court of Appeals dismissed the petition in CA-G. SP No.R. (3) no copy of the relevant writ of execution allegedly issued on 24 April 1995 was attached to the petition. on the following grounds: (1) GSIS is bound by the negligence of its counsel. registration or issuance of new certificates of stocks in the name of BENGSON. 51131. 21 The petition was thus re-docketed as CA-G. which was then still pending in view of BENGSON's unresolved motion for partial reconsideration of the 29 January 1999 Resolution of the Court of Appeals.

No. which ascribes to the Court of Appeals grave abuse of discretion in dismissing CA-G. and as clarified in our 2 October 2000 Resolution. No. for instance.Hence. The main issue or argument raised in the first petition was that the 6 April Order awarding P31 million costs of suit contradicts the pertinent provisions of the Rules of Court. Hence.R. therefore. 23 it enjoined the following: (1) the implementation of the 14 January 2000 Decision of the Court of Appeals. and (2) the 8 January 1999 Order denying petitioner's Motion for Reconsideration with Motion to Quash the Alias Writ of Execution. GSIS filed with this Court a special civil action for certiorari with very urgent motion for the issuance of a preliminary injunction and/or TRO. 8291. No. ISCaTE We rule. and (c) identity of the two preceding particulars such that any judgment rendered in the other action will.R. 25 For it to exist.R. 47669 and 51131 on the ground of forum-shopping cannot. garnishment. 47669 was a special civil action for certiorari filed by GSIS after its petition for relief from the 6 April 1995 Order of the trial court and its motion for reconsideration were both denied in the 16 January 1997 Decision and 23 April 1998 Order of the trial court. (b) identity of rights asserted and relief prayed for. the proscription against forumshopping was not violated by GSIS. 26 Thus. regardless of which party is successful. is void for being contrary to the provision of Republic Act No. that the Court of Appeals did not err in dismissing CA-G. SP No. SP Nos. transfer. SP Nos.R.2 million shares of stock in San Miguel Corporation.R. 24 It may also be the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. was a petition for certiorari seeking the annulment of (1) the 16 December 1998 Order of the trial court directing the issuance of an alias writ of execution to enforce the 6 April 1995 Order. (2) the execution of the 6 April 1995 Order awarding P31 million costs of suit. the reliefs sought in both petitions were distinct from each other. the petition in CA-G.R. It is undisputed that the petition was not accompanied with a clearly legible duplicate copy . Rule 46 of the 1997 Rules of Civil Procedure. execution or levy. however. 136874 filed by GSIS and referred by us to the Court of Appeals. No. and (4) any disposition or alienation by BENGSON of said shares to third persons. SP No. We find merit in the petition docketed as G. A TRO 22 was issued on 7 February 2000. No. respectively.R. there is no forum-shopping where.R. 51131 and 47669 on the ground of forum-shopping. or at least such parties as would represent the same interest in both actions. The dismissal of CA-G. which was formerly G. Moreover. the relief being founded on the same facts. 141454 and consolidated with G. or registration of any disposition or issuance of new certificates of stocks in the name of BENGSON. amount to res judicata in the action under consideration. which exempts the "funds and/or properties" of GSIS from attachment. there should be (a) identity of parties.R. Forum-shopping is an act of a party against whom an adverse judgment or order has been rendered in one forum of seeking and possibly getting a favorable opinion in another forum. other than by appeal or special civil action for certiorari. 51131. GSIS argued that the Alias Writ of Execution. 137448. together with the corresponding levy and execution sale of the 6. 47669 for noncompliance with some of the requirements mentioned in Section 3. (3) the recording. 27 The petition in CA-G. the special civil action for certiorari and the appeal brought by a party do not involve the same issue. 141454. equity and justice. This petition was docketed as G. On the other hand. be sustained. In the second petition.

set aside the judgment in the main case. provides that no appeal may be taken from an order denying a petition for relief or any similar action seeking the relief from judgment. the petition may be filed not later than 60 days from notice of the judgment. which was docketed as CA-G. SP No. allows the aggrieved party to file a special civil action for certiorari under Rule 65 of the Rules. 47669 was filed on 11 June 1998. It then filed a Motion for Extension of Time to File Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Preliminary Injunction to question the 23 April 1998 Order of the trial court. mistake or excusable negligence. as the case may be. however. order. Moreover. and focused instead on. SP No. it received a copy of the 23 April 1998 Order denying its motion for reconsideration. the petition challenged. Instead. and hence it was seasonably filed. The last paragraph thereof. A plain reading of the petition in CA-G. SP No. it would not reverse or modify the judgment on the merits because the judgment involved had become final and executory.or a certified true copy of the judgment subject thereof. the 1997 Rules of Civil Procedure. The purpose of this rule was to enable the appellate court to determine not only the existence of any of the grounds relied upon whether it be fraud.R.R. as well as its 16 January 1997 Decision denying the petition for relief from judgment. 47669 had assailed the 23 April 1998 Order of the trial court denying petitioner's motion for reconsideration. As correctly pointed out by the Court of Appeals. not by its duly authorized officer. as stated in petitioner's motion for extension of time to file a petition. neither did it allege or show the "fraud" or "negligence" purportedly committed by its former counsel Atty. 29 an order denying a petition for relief from judgment was subject to appeal and. The petition for certiorari in CA-G. or 43 days from receipt of the 24 April 1998 Order. 47669. the Verification and Certificate on Non-Forum Shopping were executed by petitioner's counsel. discloses that GSIS did not assail the denial of both its petition for relief from judgment and its motion for reconsideration. On 29 April 1998. Under the former rule. it filed the petition for certiorari. SP No. Under Section 4 of Rule 65 of the new Rules. on this score alone the special civil action was properly dismissed by the Court of Appeals. however. On 16 February 1997. but also and primarily the merit of appellant's cause of action or defense. 28 It must be observed that if the petition in CA-G. The records disclose that the petitioner received on 4 February 1997 a copy of the 16 January 1997 Decision denying its petition for relief from judgment. Hence. Indeed. This was also in itself a sufficient ground to dismiss the petition. accident. the said petition could not have been said to have been filed out of time. petitioner filed a motion for reconsideration.R. 47669. Should the appellate court find that one of the grounds for relief from judgment existed and the petitioner had a good cause of action or defense. the appellant could assail the judgment on the merits. Terrado. specifically Section 1(b) of Rule 41. the 6 . what was submitted was not a certified true copy of the 16 January 1997 Decision of the trial court.R. On 11 June 1998. or resolution sought to be annulled. and remand the case to the lower court for a new trial in accordance with then Section 7 of Rule 38 of the former Rules. in the course thereof. it would reverse the denial or dismissal of the petition for relief from judgment. 30 On the other hand.

a certified true copy of the 16 January 1997 Decision. the remedy available to GSIS was a special civil action for certiorari pursuant to Section 1(b). These acts constituted gross negligence. did not rebut BENGSON's evidence on the costs of suit or. three years having elapsed since the issuance of the 6 April 1995 Order awarding P31 million costs of suit. if not fraud. When that petition was denied in the trial court's 16 January 1997 Decision. verify the schedule of costs and cross examine BENGSON's witnesses. Its Urgent Omnibus Motion was in fact treated as a petition for relief. as earlier discussed. with Atty. Rogelio Terrado. This deprived GSIS of the chance to move to reconsider or appeal the Order. GSIS's former counsel. for admission by the Court of Appeals. the duplicate original of the 23 April 1998 Order. It is readily apparent that part of GSIS's predicament stemmed from the negligence or mistake. (b) the defendant did not submit its comment [on] the veracity of the accounts contained in plaintiff's documentary exhibits. Along with the motion for reconsideration. From the Order of 23 April 1998 denying such motion. a copy of the 24 April 1995 Order of Execution. Much worse. of its former counsels. at the very least. Instead. he went on AWOL without informing GSIS of the said Order. it must be noted that in its motion for the reconsideration of the 24 November 1998 Resolution of the Court of Appeals. ascribe error to the Court of Appeals when it said that the petition was filed out of time. Terrado's negligence and act of fraud as grounds therefor. according to GSIS. a timely motion for reconsideration was filed. . If Atty. Worse. Rule 41 of the 1997 Rules of Civil Procedure. after personally going to the trial court. at the very least. Another remedy was available to it: a petition for relief from judgment. Atty. Atty. But petitioner was left with no recourse. it is undisputed that despite ample opportunity. A pattern of fraud perpetrated against GSIS is evident from the following statement of the trial court in its 6 April 1995 Order: TcEAIH (a) the defendant's [herein petitioner's] counsel previously opted not to present evidence to controvert plaintiff's [herein private respondent's] evidence in support of its claim for cost of suit. without any official trip or authorization to get a copy of the 6 April 1995 Order. and the Verification and Certificate on Non-Forum Shopping signed by GSIS's authorized officer. he allowed the 6 April 1995 Order awarding BENGSON P31 million costs of suit to attain finality by not filing a motion for reconsideration with the trial court or a petition with the Court of Appeals.April 1995 Order awarding to BENGSON P31 million costs of suit. therefore. We cannot. and resulted in the deprivation of GSIS of an opportunity to move to reconsider or appeal the adverse order. Indeed. This remedy was. and then prayed for its nullification. to put it mildly. Terrado's acts did not constitute fraud. Nevertheless. Terrado did not notify it of said Order and went on AWOL. GSIS (again through a new counsel) pointed out that the lengthy discussion on the 6 April 1995 Order was just to emphasize the grave injustice resulting from the trial court's denial of the petition for relief. they amounted to gross negligence. GSIS submitted.

Faustino R. that he received the decision but did not also inform the appellants about it. Madriaga stated that petitioner would be filing a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Preliminary Injunction to question the 23 April 1998 Order denying the motion for the reconsideration of the denial of the petition for relief from judgment. Atty. that the orders and decisions in the case just escaped his attention. 32 But if under the circumstances of the case. . the rule deserts its proper office as an aid to justice and becomes a great hindrance and chief enemy. the Deputy Sheriff of Quezon City. Atty. what he questioned was the 6 April 1995 Order. Tiongco. it appears that the petition was presented outside the reglementary period of sixty (60) days from notice of judgment. He also failed to attach a certified true copy of the Decision denying the petition for relief and the Order of Execution dated 24 April 1995. Madriaga. Tañega admitted to the court that he did not inform the appellants of the hearing. Appellants only came to know that an adverse decision had been promulgated when on May 12. its rigors must be relaxed to admit exceptions thereto and to prevent a miscarriage of justice. he was the one who signed the Verification and Certificate on Non-Forum Shopping. the court has the power to except a particular case from the operation of the rule whenever the purposes of justice require it. Moreover. and rightly so. by presenting a motion for reconsideration and/or filing a petition to set aside judgment. The rules should receive liberal interpretation in order to promote their object and to assist the parties in obtaining a just. experienced. Atty. it bears repeating that he did not attempt therein to show the gross negligence of GSIS's former counsel. that could justify relief from that final and executory order. because he forgot all about the case. Nevertheless due to the very peculiar circumstances obtaining in the premises. We consider that the rule was substantially complied with and the petition for relief from judgment was seasonably filed. . the negligence or mistake of counsel binds the client. 1961. v.however. As a general rule. which was already final and executory at the time. Atty. 31 for otherwise there would never be an end to a suit so long as a new counsel could be employed who could allege and show that the former counsel had not been sufficiently diligent. he never informed the latter about the matter. or learned. In the Motion for Extension of Time to File Petition for Certiorari. xxx xxx xxx Viewed from the strictly legal perspective. however. explaining that he had so many ejectment cases then. All these have prompted the Court of Appeals. speedy and inexpensive . served upon them a copy of [the] writ of execution ordering them to vacate the premises and to pay the amounts ordained therein . not an authorized officer of GSIS. as he forgot all about the same. thus compounding the predicament of GSIS. In the petition itself. rendered futile on account of procedural and substantive defects arising from the negligence or mistake of its next counsel. 33 Apropos is the ruling of this Court in People's Homesite & Housing Corp. What should guide judicial action is that a party is given the fullest opportunity to establish the merits of his action or defense rather than for him to lose life. to dismiss the petition. In other words. 34 thus: Although the above judgment was received by counsel for the appellants. honor or property on mere technicalities. Terrado. Neither did he take steps to protect the interests of his clients. And.

Thereafter. however. and the ground for relief from the 6 April 1995 Order of the trial court being evident. and pursuant to Section 6 of Rule 38 of the 1997 Rules of Civil Procedure the case shall stand as if the 6 April 1995 Order has never been issued. the 6 April 1995 Order of the trial court. Branch 26. which has proven prejudicial to the rights of his clients . are hereby REVERSED and SET ASIDE. He did not give any significance at all to the processes of the Court. No costs. There was something fishy and suspicious concerning the actuations of former counsel Atty. which shall then proceed to hear and determine the case as if a timely motion for a new trial or reconsideration has been granted by it. the petitions at bar are GRANTED. He deprived them of their day in court. San Fernando. and 14 January 2000. one should not insist that a notice to such irresponsible lawyer is also notice to his clients. 8 January 1999. SO ORDERED. by just alleging that he just forgot every process of the court affecting his clients. or are but a consequence of. as well as the 16 January 1997 Decision and 23 April 1998 Order of the trial court. The Resolutions of the Court of Appeals dated 24 November 1998. La Union. it might foster. the Courts are justified in excepting from its operation a particular case. should be looked into and adopted. SP No. as well as the 16 January 1997 Decision and 23 April 1998 Order of the Regional Trial Court. in the court's desire to make a short cut of the proceedings. in the higher interest of justice and equity. (Emphasis and italics ours. . 51131 are irretrievably linked with. The Temporary Restraining Order we issued on 7 February 2000 shall remain in effect until further orders from the Court. we shall reverse and set aside the 24 November 1998 and 8 January 1999 Resolutions of the Court of Appeals. . WHEREFORE. We find no better opportunity to apply this prerogative than in the case at bar. otherwise. Tañega in this case. . because he was so busy. When such technicality "deserts from being an aid to justice". according to the surrounding circumstances. and that such doctrine has beneficient effects upon the prompt dispensation of justice. TCaSAH There should be no dispute regarding the doctrine that normally notice to counsel is notice to parties.determination of every action. Footnotes omitted) Similarly. Counsel had simply ignored the rights of his clients by giving a lame and flimsy explanation that the court's processes just escaped his attention. Under this circumstance. Procedural technicality should not be made a bar to the vindication of a legitimate grievance. the court shall proceed to hear and determine the case as if a timely motion for a new trial or reconsideration has been granted by it. We shall then remand the case to the trial court. wittingly or unwittingly. The cases are hereby ordered remanded to the trial court. dangerous collusions to the detriment of justice.R. Its application to a given case. Since the issues raised in CA-G. It would then be easy for one lawyer to sell one's rights down the river. the said case shall be suspended or held in abeyance until after the aforementioned proceedings in the trial court shall have been finally resolved.

2 On February 10. J.00 at the legal rate of interest from the finality of this judgment.250. cITAaD On June 23.00 to pay at the rate of interest for the debenture bonds from finality of this judgment. 1995. Separate Opinions PARDO. Panganiban. in Civil Case No. Vitug. BENGSON obtained loans from the GSIS amounting to four million and two hundred fifty thousand pesos (P4. on September 30.. I wish to stress certain points in these cases. J.000. La Union.. Kapunan. and at the public auction sale. Pardo.Bellosillo. Sandoval-Gutierrez and Carpio. La Union. We quote the decretal portion: 7 "1. We rewind the facts. the Clerk of Court and ex-officio Sheriff. 1985. BENGSON paid amortizations to GSIS but later defaulted on its loans..000. However. Declaring the extra-judicial foreclosure of the plaintiff's properties by defendant null and void ab initio and directing defendant to restore plaintiff possession of said properties. Branch 26. 4 BENGSON filed with the Court of First Instance. 1977. Ynares-Santiago. This prompted GSIS to send BENGSON a letter 1 stating that unless BENGSON settled its arrearages GSIS would foreclose on the mortgaged properties. 1965 and November 23. 1971. I vote to annul expressly the order dated April 6. Ordering defendant to restructure the loans of Plaintiff amounting to P4. At first. province of La Union conducted a foreclosure of the mortgages on BENGSON's property mortgaged to GSIS. joins J. On August 20.000. Jr. GSIS emerged as the highest bidder.250. Branch 26. 2794 of the trial court. and submits a separate opinion. Quisumbing. Ordering plaintiff to pay P900. at San Fernando. JJ. "2. 5 After due trial. at the instance of GSIS.00). "3. Regional Trial Court. San Fernando an action for annulment of the foreclosure sale. De Leon. concur. . Pardo. Puno. and the Register of Deeds of La Union to cancel the titles issued to defendant and in lieu thereof to issue new ones in the name of plaintiff.. concurs in the result. 3 Four (4) days later. J p: I concur in the fallo to grant the petitions at bar. secured by real estate and chattel mortgages. the provincial sheriff issued to GSIS a certificate of sale covering the foreclosed properties. Melo. the trial court 6 rendered a judgment against GSIS violating the extra-judicial foreclosure of Bengson's mortgaged property and ordering GSIS to re-structure the loan. Buena. Mendoza. 1977.

00 on the subject loan.e. 9 On January 19. "6. "3. 1988. GSIS is ordered to restore to BENGSON full possession of those mortgaged properties in San Fernando. Ordering the defendant to pay costs. GSIS appealed to the Court of Appeals. "5. as appeared (sic) in the previous certificates of title as of the date BENGSON constituted the mortgage on those properties in favor of GSIS. All properties under the mortgage in question.00 representing the accrued monthly rentals belonging to plaintiff from February. BENGSON is ordered to pay GSIS the debenture bond with an aggregate face value of P900. and "5. "4. 1997. i. including the mortgage in question. "8. including those parcels of land situated in San Fernando. we affirm the appealed decision with MODIFICATION as follows: "1.00 until the properties are restored to the possession of plaintiff. quarterly: and to pay 14% interest per .000.900.000." 8 On October 11. is annulled.000."4. sitting as a cadastral court. 10 the Court of Appeals promulgated its decision ruling against GSIS and affirming the trial court's decision with modification.00 at the stipulated interest rate of 14% per annum. terms and conditions. Ordering defendant to reimburse to plaintiff P1. GSIS is ordered to reimburse BENGSON'S loan as promised. thereafter the monthly rental of P20. The foreclosure and auction sale on February 10. thus: 11 "Wherefore. "7. La Union. The writ of possession issued to GSIS as the highest bidder by the defunct Court of First Instance. The Court of Appeals remanded the case to the trial court. the restructuring to proceed from the premise that as of the foreclosure date. as well as all other terms and conditions provided for therein — except as qualified by the subsequent agreement of the parties regarding the promised loan restructuring and deferment of foreclosure by reason of the arrearages incurred shall — remain as originally stipulated upon by the parties. shall remain under mortgage in favor of GSIS. The interest rates per annum stated in the first and second mortgage loan contracts entered into between BENGSON and GSIS. February 10. 1997 of BENGSON's properties covered by real estate and chattel mortgages mentioned in the notice of sale issued by the La Union provincial sheriff are set aside. 1977 and. ordering it to receive evidence on the costs of suit.000. BENGSON had paid GSIS an aggregate amount of P288. 1985. La Union and in Quezon City. "2. as a consequence of said foreclosure sale. it being understood that all expenses to be incurred incidental to such title cancellation and issuance shall be borne by GSIS. The Register of Deeds of La Union is ordered to cancel the present certificates of title covering those properties and issue new ones in lieu thereof in the same names and with the same annotations.

that had become due quarterly.000. The entire record of this case is ordered remanded to the trial court and the latter is directed to ascertain whether such mortgaged properties as machineries. 19. did not verify the accounts in the schedule and did not cross examine BENGSON's witness.000. compounded monthly. to BENGSON.000. 1988. . cars. i. 1988.00) to cover the value of properties adjudged wrongly foreclosed. 13 In accordance with the judgment. as cost of suit. 16 During the hearings. etc. are in fact no longer in existence per report of the provincial sheriff. stock certificates. the Regent Theater building. the records were remanded to the trial court.000. 18 On April 6.annum. GSIS paid BENGSON almost thirty-eight million pesos (P38.798. Terrado did not rebut BENGSON's evidence. BENGSON filed with the trial court an "Omnibus Motion" including a prayer for reception of evidence on the costs of suit awarded to BENGSON. GSIS shall reimburse BENGSON the monthly rent of P20. equipment. etc.00). 14 On April 5. foreclosed appliances. The schedule listed persons from whom money was obtained and utilized.R. the trial court issued an order awarding "costs of suit" to BENGSON in the amount of thirty one million pesos (P31. GSIS's counsel. Civil Case 09361 dated Jan.56). 12 On March 14. the afore-quoted decision became final and executory. as GSIS could no longer return the properties themselves to BENGSON.00 representing income produced by one of the latter's mortgaged properties. 17 He also did not submit controverting evidence.. on the interest on the said debenture bond. Atty. ADCETI "10. "SO ORDERED (emphasis ours). in accordance with stipulations provided for therein. "No pronouncement as to cost of this appeal.e. as it hereby orders: "1. The defendant GSIS to pay the amount of P31 Million Pesos Philippine Currency to the plaintiff. to wit: 19 "WHEREFORE. "9. and other paraphernalia. to order. to receive evidence from the parties on the costs of suit awarded to it. and as prayed for by BENGSON. including the value of mortgaged jewelry. premises considered. as well as to determine their replacement value if GSIS fails to return them. this Court resolves in furtherance to the final and executory decision of the Court of Appeals CA-G. 1995.619. 15 BENGSON also submitted a "schedule of costs of suit" (hereafter "the schedule"). together with the land on which it stands. amounting to forty two million. 1988.000. from February 15. six hundred nineteen thousand and seven hundred and ninety-eight pesos and fifty-six centavos (P42. 1988. Rogelio P." On February 10. 1977 until GSIS shall have restored the full possession of said building.

the restructured loan agreement. and that the plaintiff and defendant GSIS to submit to this court for its approval.520. 1998. 27 however. 1998. the other depository bank of GSIS funds for the same amount under "hold order" by way of levy and/or garnishment for the same amount of P31. Terrado received a copy of the order on April 6. 26 cHTCaI On February 18. Regional Trial Court of San Fernando. 1995. 1998. On May 15. the copy of . the Court of Appeals 31 promulgated a resolution dismissing the petition on the grounds that: First. the verification and certification against non-forum shopping were done by GSIS's counsel and not by its duly authorized officer. The trial court reasoned: First. Fourth. to be furnished to the Land Bank. and the order of April 23. 1995. GSIS is bound by the negligence of its counsel. government corporate counsel Atty. Manila. res judicata applied and thus the case could not be reopened. the petition was filed three years after the issuance of the assailed order of the trial court and was thus filed out of time. Metro Manila. on April 23. 1995 order. Second. Escolta. Garcia. Fifth. "equity" and "fairness" were not valid grounds that could be invoked to grant a petition for relief from judgment. 21 GSIS immediately filed with the trial court an "urgent omnibus motion" through another lawyer. to grant the petition would be tantamount to reviving the right to appeal which had lapsed.000. Second. Terrado deliberately did not appeal the order because of fraud and gross negligence. GSIS filed with the trial court a motion for reconsideration of the afore-quoted "decision". "3. 23 GSIS averred that Atty. 1995. Atty. the trial court denied the motion. on November 24. by furnishing a copy of this Order to the Philippine National Bank (PNB). 28 On June 11. Third.000. 1997.690. GSIS averred that its former counsel. Fourth. Oscar I.25 Philippine Currency. Rogelio P. Atty. there was no evidence of extrinsic or collateral fraud. Makati. It was only then that GSIS became aware of the April 6. no copy of the relevant writ of execution was attached to the petition. the depository bank of the GSIS funds under "hold order" by way of levy and/or garnishment to secure satisfaction of judgment made by this court and for the same copy of this Order upon finality. Third."2." On April 24. 1995 order. 24 On January 16. GSIS received a copy of the order of execution dated April 24. 1997. 1997. the trial court by an order which it termed as "decision" dismissed the GSIS urgent omnibus motion (which it treated as a petition for relief from judgment). 1995. 20 On May 4. GSIS filed with the Court of Appeals a petition for certiorari 29 questioning the decision of the trial court dated January 16. The Office of the Provincial Sheriff. Terrado 22 did not inform it of the April 6. the trial court granted BENGSON's "ex-parte motion for execution" of the abovequoted order. La Union. 1975 for P4. 1995. That the restructuring date of the loan of the plaintiff is on August 4. to issue the Writ of Garnishment upon finality of this Order. 1997.00. 1998. 30 After due proceedings. "SO ORDERED. 25 Notice of this "decision" was received by the GSIS on February 7.

2794. 1999.m.25. province of La Union issued an alias writ of execution.000.690. 1995. 1998. That the restructuring date of the loan of the plaintiff is on August 4. province of La Union issued a certificate of sale of personal property on execution of six million two hundred thousand (6.00).000) class "A" shares . to be furnished to the Land Bank. 1998. 37 On December 26. 1998.000. as cost of suit. Fifth. to issue the Writ of Garnishment upon finality of this Order to the Philippine National Bank (PNB). 36 On December 23. We quote: 34 "Considering the above.the judgment dismissing the petition for relief from judgment is not a certified true copy. the clerk of court and ex-officio sheriff. 1998. "3. 1999. at two o'clock p. Philippine Currency. the clerk of court and ex-officio sheriff. La Union. before GSIS could file with the Court of Appeals a motion for reconsideration of its resolution. December 16. "2. province of La Union 38 issued a "notice of levy and garnishment" to the Corporate Secretary. the assailed order of the trial court has become final and executory. the clerk of court and ex-officio sheriff. attaching shares of stock of SMC owned by GSIS to cover the amount of thirty-one million pesos (P31. GSIS filed with the trial court a motion for reconsideration of the alias writ of execution. during hearing of the case. Regional Trial Court. the other depository bank of GSIS funds for the same amount under "hold order: by way of levy and/or garnishment for the same amount of P31. 40 On January 6. province of La Union issued a "notice of sale on execution" of the shares of stock in SMC owned by GSIS which were levied upon and scheduled for sale at public auction on January 6. at the Hall of Justice.520. 32 On December 16. 33 the trial court issued an order of alias execution in Civil Case No. Regional Trial of San Fernando.00. La Union. ordering: "1. The defendant GSIS to pay the amount of P31 Million Pesos Philippine Currency to the plaintiff. Escolta. Sixth. GSIS filed with the Court of Appeals a motion for reconsideration of its November 24. GSIS did not rebut the evidence that Bengson submitted. 1998.000. and that the plaintiff and defendant GSIS to submit to this court for its approval. let an Alias Writ of Execution be issued confirming the final and executory character of the Order dated April 6. the restructured loan agreement. 1975 for P4. Manila.000. the depository bank of the GSIS funds under "hold order" by way of levy and/or garnishment to secure satisfaction of judgment made by this court and for the same copy of this Order upon finality. 1998. 39 On December 28. SMC. San Fernando. the clerk of court and ex-officio sheriff. "SO ORDERED. 35 On December 21. Metro Manila." On the same day. 1998 resolution.200. Makati. The Office of the Provincial Sheriff.

San Miguel Corporation from transferring and/or registering. 1999. as well as from issuing new certificates of stock. 1999 is hereby LIFTED.000. the Court of Appeals 51 ordered the consolidation of CA-G." . or should there already be a transfer. from transferring. which had not been resolved. 1998. 1998. Bengson (the only bidder). SP 51131 and CA-G. the Court Resolved to: . 1999. in the name of private respondent Bengson Commercial Building.R. 47669. . SP No. the Court of Appeals denied GSIS's motion for reconsideration of its November 24. 2000. alienating. 51131 with CA-G. and the order of the trial court dated January 8." On January 25. 1999. the Court resolved to refer the petition to the Court of Appeals 46 for "consideration and adjudication on the merits or any other action as it may deem appropriate. THEREFORE. . 1999. selling or otherwise disposing of said shares of stock to any third person until further orders from this Court . 48 On March 29. 50 On November 29. SP No. the P6.R. SP No. 1998.(based at par value) of SMC owned by GSIS covering the sum of thirty-one million pesos (P31. Branch 26 from proceeding with the implementation of the decision in Civil Case No.. directing the issuance of an "alias writ of execution" to enforce its order of April 6. 1998 resolution. the Supreme Court issued a temporary restraining order. According to the Court of Appeals. GSIS filed with the Supreme Court a petition 43 to annul the order of the trial court dated December 16.200. 47669. Inc. 1999. CA-G.00) in favor of BENGSON and/or Romualdo F. No.. the petition is DISMISSED on the ground of forum-shopping. SP No. Corporate Secretary.000. for being issued with grave abuse of discretion amounting to lack of jurisdiction. La Union. 136974 on January 21. 52 On January 14.00 Class "A" Shares of Stock sold at public auction on January 7. The temporary restraining order issued in G. 1999. 41 On January 8. 2794 and respondent Enrique LL. the trial court denied the GSIS motion for reconsideration filed on December 23. the Court of Appeals promulgated a consolidated decision in CA-G. We quote the dispositive portion: 53 "WHEREFORE. 1995. (b) ISSUE the TEMPORARY RESTRAINING ORDER prayed for enjoining respondent Regional Trial Court. 1999. Inc. San Fernando." 47 On January 29. . 44 On January 21. GSIS filed with the Supreme Court a petition for review on certiorari 49 seeking the reversal of the resolution of the Court of Appeals promulgated on November 24.R. "SO ORDERED.R.000. 1999. 42 On January 15. 1999.R. denying petitioner's motion for reconsideration. Yusingco. enjoining private respondent Bengson Commercial Building.R. 47669 was still pending on account of a timely motion for reconsideration of the resolution of dismissal filed by BENGSON. . stating: 45 "NOW.

(who died recently) or anyone acting in his place as presiding judge. 2794. 2000. from recording. recorded or registered in its name until further orders from this Court. as well as issuing new certificates of stock. in the name of private respondent Bengson Commercial Buildings. selling or otherwise disposing of said shares of stock to any third person. alienating." 57 In Pacific Mills.000. There is "grave abuse of discretion" where "a power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility so patent and gross as to amount to evasion of positive duty or virtual refusal to perform a duty enjoined by. Inc. Thus. Bañez.R. No. San Fernando La Union. R. 2000. transferring. Inc.On January 31. SP No. "(c) The Corporate Secretary San Miguel Corporation. and respondent Mario Anacleto M. 55 On October 2." It is at once patent that the trial court erred and gravely abused its discretion in awarding "costs of suit" to respondent Bengson in the amount of thirty-one million pesos (P31.000. a petition for certiorari 54 with a very urgent motion for the issuance of a preliminary injunction or temporary restraining order questioning the Court of Appeals' decision of January 14. or its assignees. 2000. 58 the Court held that to deny "the opportunity to right a clear error in the execution of judgment constitutes grave abuse of discretion." The costs of suit in the amount of thirty-one million (P31. alienating. R. 51131. GSIS filed with the Supreme Court. Branch 26.2 million shares of stock any class of San Miguel Corporation auctioned on January 7. 1999. to wit: 56 "(a) Respondent Court of Appeals from enforcing its decision promulgated on January 14. v. of the Regional Trial Court.00). 137448 and G. if any such stock were transferred. the trial court grievously erred amounting to grave abuse of discretion in denying GSIS's petition for relief from judgment. selling or otherwise transferring. or in contemplation of law. TASCEc On February 7. 141454. 2000 and resolved to enjoin the following specific acts.00) awarded to BENGSON was patently irregular and absurd. "(d) Respondent Bengson Commercial Buildings.000. 2000. as Clerk of Court and Ex-Officio Sheriff. Inc. transferring and/or registering any disposition of the 6. "(b) Respondent Judge Vicente A. Relief from Judgment . for having been issued with grave abuse of discretion. we clarified the temporary restraining order of February 7. from exercising acts of ownership. are hereby enjoined from implementing and executing the decision in Civil Case No. Pacquing.000. 2000 in CA-G. National Labor Relations Commission. we issued a temporary restraining order as prayed for and resolved to consolidate G. No.

62 In National Power Corporation v. 'the effect of which prevents a party from having trial. a law or a principle in the discharge of his duties. 69 Any pecuniary award granted to a party in the form of "costs of suit" referred exclusively to the costs specified in Rule 142. he may file a petition in such court and in the same case praying that the judgment. No court may award costs in excess of the sums specified therein. Meaning of "Costs of Suit" "Costs are certain allowances authorized by statute to reimburse the successful party for expenses incurred in prosecuting or defending an action or special proceedings. 63 the Court ruled that relief from judgment is an "act of grace" granted "when the demands of equity and justice should prompt the Court to give petitioner a last chance to defend his right or to protect his interest. accident. 66 we held that when there is "a failure to consider so basic and elemental a rule. Court of Appeals. the fraud must be extrinsic or collateral. and Municipal Trial Courts. It was so glaringly bloated that we would normally expect the trial court and the Court of Appeals to inquire into the absurdity of the award 64 and not to dismiss GSIS's petition on the technical ground that relief from judgment was not a substitute for appeal lost through its counsel's gross inaction or neglect. 65 In Castanos v. mistake.. 'costs are in the nature of incidental damages allowed to the successful party to indemnify him against the expense of asserting his rights in court." IHEAcC In this case.'" 68 In this jurisdiction.000. the Court of Tax Appeals. a judge is either too incompetent and undeserving of the position and title he holds or he is too vicious that the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority. including the Court of Appeals. Revised Rules of Court (1964 Revision)." Thus. as amended. the award of "costs of suit" in the amount of thirty-one million pesos (P31." 67 These costs have their own legal meaning and import."' 60 True. to annul a judgment on the ground of extrinsic or collateral fraud. for. or where it operates upon matters pertaining.000. the Regional Trial Courts. or excusable negligence. A judgment may be annulled when issued with grave abuse of discretion. 61 there must be proof or evidence thereof." the trial court's order granting "costs of suit" in the exorbitant amount of thirty one million pesos was patently void. .The 1997 Rules of Civil Procedure. Thus. the Sandiganbayan. "Fraud is regarded as extrinsic or collateral. not to the judgment itself. as it was said. where a litigant commits acts outside of the trial of the case. a real contest or from presenting all of his case to the court. Jr. independent of the issues of "extrinsic fraud" and "gross negligence of counsel. Escano.00) was patently absurd and void." 59 To support such petition. when the necessity of so doing was caused by other's breach of legal duty. but to the manner in which it was procured so that there is not a fair submission of the controversy. order or proceeding be set aside. the only "costs" that a winning party may recover are those prescribed in Rule 142. or any other proceeding is thereafter taken against a party in any court through fraud. the trial court's denial of the petition for relief from judgment was in grave abuse of discretion. These provisions bind all lower courts. provide that "when a judgment or final order is entered.

000." Within the five-day period. the rule does not provide that the trial court shall conduct a hearing to determine the amount of the "costs of suit. the trial court's order dated April 6. It is at this stage that the court takes part in the taxation of costs." All that must be done is for the prevailing party to give five (5) days written notice to the adverse party of the items of costs claimed by the prevailing party. The costs shall be inserted in the judgment if taxed before its entry. how taxed. 8. The clerk of the court shall then tax the "costs. the clerk of the court cannot tax costs in amounts more than that specified in the items prescribed in Rule 142. Objections to the taxation shall be made in writing. Rule 39. the procedure on how to execute a money judgment is prescribed in the Rules.00 is plainly and patently ridiculous and absurd on its face. Rule 142.000. 9. It is void-ab-initio. how enforced." Clearly. the trial court's award to respondent Bengson of thirty-one million pesos (P31. 71 What is more. In superior courts." Even if there be no objection to the items of costs. — In inferior courts. Either party may appeal to the court from the clerk's taxation. verified by his oath or that of his attorney.The afore-cited rule limits the recovery of "costs of suit" to the items enumerated therein. specifying the items objected to. specifying the items objected to. not otherwise. the trial court conducted a "hearing to receive evidence" on the "costs of suit. Either party may appeal to the court from the clerk's taxation. and payment thereof shall be enforced by execution. the prevailing party may recover only the costs fixed therein "and no other. — (a) Immediate payment on demand." This is a manifest error.00) as "costs of suit" cannot be justified by any stretch of the imagination. the items of costs and the specified amounts thereof are fixed in the rule.000. The rules prescribe the procedure for taxation of costs. Execution of judgments for money. "and no other. 72 Again. With this notice shall be served a statement of the items of costs claimed by the prevailing party. Costs. provides: "SEC. or any other . costs shall be taxed by the clerk of the corresponding court on five days' written notice given by the prevailing party to the adverse party. Thus. the costs shall be inserted in the judgment if taxed before its entry and payment thereof shall be enforced by execution. The courts cannot vary or modify the above specified procedure in the taxation of costs.000." 70 Consequently. The judgment obligor shall pay in cash. 1995 awarding costs of suit in favor of respondent Bengson in the staggering amount of P31. certified bank check payable to the judgment obligee. Section 8. — The officer shall enforce an execution of a judgment for money by demanding from the judgment obligor the immediate payment of the full amount stated in the writ of execution and all lawful fees. Consequently. When the clerk's taxation had become final. Section 9 provides: "SEC. the costs shall be taxed by the municipal or city judge and included in the judgment. verified by his oath or that of his attorney. As heretofore stated. unless the total amount claimed runs to billions of pesos for which the filing fees would amount to such sum. the adverse party may object.

R. San Fernando. 141454. Per Reyes. G. province of La Union. GSIS v.R No. Rollo. degraded his office and laid himself open to charges of graft and corruption. 32-35. SP No. . Rollo.50 per share. the provincial sheriff of La Union did not follow the Rule. Supra note 4. E. The lawful fees shall be handed under proper receipt to the executing sheriff who shall turn over the said amount within the same day to the clerk of court of the court that issued the writ.R. 7. J. 3. 2. 280-281. Plainly. 2794 of the Regional Trial Court. La Union. 219 SCRA 727-728 [1993].A.. This case was also an offshoot of Civil Case No. the amount of the judgment debt under proper receipt directly to the judgment obligee or his authorized representative if present at the time of payment. Id. 25-43. G. the sheriff's levy on shares of SMC that petitioner owned was excessive considering its market value. The respondent sheriff could easily check the market value of the SMC shares by just reading the newspapers of general circulation. 2794.form of payment acceptable to the latter. Supreme Court. Footnotes 1. Bañez. could still be challenged. 36-42. Id. Gines. within ten (10) days from notice. Rollo. 51-56. to initiate administrative charges against respondent Clerk of Court and ex-officio sheriff.2 million shares of San Miguel Corporation owned by GSIS at its par value of five pesos (P5. the principal issue therein was whether the 19 January 1988 Decision of the Court of Appeals in CA-G. I vote to direct the Court Administrator. 6.R. 8. 28-31. No. 09361. See Statement of Facts. a patent nullity.. S. and violation of R. Atty. 4. for incompetence. See Statement of Facts. GSIS v. Mario Anacleto M. WHEREFORE. 47669. Section 3 (e). the respondent sheriff grossly violated the Rule.. 137448. CV No. SMC shares at that time were worth P67. in Civil Case No. He immediately levied on 6. 5.00) per share. stock market quotations. and hence. and Bello. which has been partially executed. R. Branch 26." HDcaAI xxx xxx xxx Here. No.R. at San Fernando. with Montoya. concurring. 1995. CA-G. JJ. 9. La Union.. No. 3019. Gines. 725-727 [1993]. serious misconduct. conduct prejudicial to the service. 219 SCRA 724. Rollo.. I vote to grant the petitions and to annul the order dated April 6. Thus. obviously. at 734. 137448. G.

R. Inc. 331 [1999]. Progressive Development Corp. Santo Tomas University Hospital v. 19. 25. Id. v.R. 308 SCRA 206.R. . 309 SCRA 578. supra. 15 December 2000. Rollo. Id. 29. 21-22. Inc. 70. SP No. Rollo. 12. 30. 137448. 47669. 301 SCRA 637. Court of Appeals. No. SP No. 22.R. G. 227-234. Sheriff of Manila. Id. Saura. Court of Appeals.R. Paquing. 13. 309 SCRA 474. 74. (Manila) v. Benguet Electric Cooperative. 148 [1986]. 294 SCRA 382. Id. Inc. 122-125. 17. Court of Appeals. 20. 520-521 [1999]. No. 16. 21. G. PNB-Republic Bank v. CA-G. 27-31. 28. 297 SCRA 30 [1998].10. 75. 314 SCRA 328. SP No. SP No. Surla. v. 306 SCRA 206 [1999]. People v. 23. CA-G. Inc. MSF Tire and Rubber.. Rollo.R. 137448. Rollo. 391 [1998]. 480 [1999]. No. SP No. Rule 41 of the former Rules. 47669. 51-53. 15. 145 SCRA 139. 77-80. Service Specialists. 24. Court of Appeals. 57-76. See also Yulienco v. 287 SCRA 449. CA-G. 18. 311 SCRA 784. Rollo.R. Surla. 11. 137448. Inc. Rollo. 475 [1999].R. CA-G. 790 [1999]. No. 135045. 313 SCRA 465. Santo Tomas University Hospital v.. 141454. 51131. 213-214 [1999]. Far Eastern Shipping Company v. Escorpizo v. 458 [1998]. v. Saura v. Court of Appeals. 585 [1999]. 26. v. Per Judge Vicente A. 316 SCRA 511. International School. G. Aquino v.. G.R. No. CA-G. 14. Rollo. 51131. 27. 235-244. Argel v. 655 [1999]. 238. Rollo. 23-26. Court of Appeals.. 51131. Court of Appeals. Court of Appeals. University of Baguio.. Id. Rollo. G. Section 2. 126-132.R. Flores. Gako.

Original Record. 24 August 2000. p. Annex "B". 47-48. 219 SCRA 724. No. G.R. 48-49. 141454. Rollo. Imperial.: 1. Rollo. Government Service Insurance System v. envelope showing date of posting by registered mail on October 11.R. 2. 13. 141454. 141454 Petition for Certiorari. Petition for Certiorari. Notice of this decision was received by the GSIS on October 4.R.31. Note 10. No. No.R. 1988 decision of the Court of Appeals was final and executory and could no longer be challenged. pp. Dated November 13. No. 250 SCRA 371. Gines. Petition for Certiorari.R.R. 15 December 2000. Government Service Insurance System v. Domingo. Government Insurance System v. See Statement of Facts. 10. pp. G. 374-375 [1995]. Rollo. Aguilar v. 727. 34. 615. pp. 139927 & 139936. 137448.R.R. 09361. 7. 11. 3. 6. G. No.R. G. Rollo. Original Record. Vol. PARDO. 22 November 2000. Petition for Review on Certiorari. 9. No.R. Sapad v. 138518. 137448. Court of Appeals. RTC Decision. p. Note 10. Gacutana-Fraile v. Court of Appeals. No. 1985. 32. G. Rollo. 158. Inc. 11. G. Notice of Appeal. supra. Gines. 12. supra. Note 10. No. 132153. G. p. pp. 27-28. 11. 1985. supra. CV No. 468 [1999]. Court of Appeals Decision. Apex Mining. pp. See Notice of Appeal. pp. 12 SCRA 471. G. 5. 326-348. Gines. No. Docketed as Civil Case No. 137448. G.R. In Government Service Insurance System v. . p. Note 10. 2794. 1. Petition for Review on Certiorari. See Statement of Facts. 8. Gines. presiding. Judge Antonio J. 1974 (Statement of Facts. Judge Bacalla. 615. Biglang-awa v. v.R. Annex "B". 33. 474-476 [1964]. Fineza. Docketed as CA-G. supra. Rollo. 605-614. 15 December 2000. 319 SCRA 456. J. 47. Rollo. 140321. G. G. the Court ruled that the January 19. at p. 141454. Annex "B". Gines. Government Service Insurance System v. Original Record. No. Barangay 24 of Legazpi City v. No. 726 [1993]). See Statement of Facts. 4. Court Appeals.

2000). Note 10. Rollo. No. 2796 dated April 6. Annex "E". Rollo. 36-42. Vol. No. 1998 (at back of p. G.R. 26. G. 586. 18. Original Record. 1995. Petition for Review on Certiorari. Under Rule 65. 137448. 57-76. Rollo. 28. 22. Terrado has been "absent without leave" since April 6. as amended. Order dated April 6. Annex "E". 1. supra. G. . Notice of this order was received by the GSIS on April 29. Annex "C". Petition for Review on Certiorari. Rollo. 51-56. envelope at p. Rollo. 3-94 to decide Civil Case No. was given in the said proceedings the privilege to produce counter-vailing evidence. 12). pp. 667-670. Petition for Review on Certiorari. G. No. Rollo. 21. 2.. See Statement of Facts. 2.14. Order of the Trial Court in Civil Case No. 271-276. 51-56. p. 1997 Rules of Civil Procedure. 19. urgent omnibus motion.R. Government Service Insurance System v. 708). 23. 2794 (G. No. Petition for Review on Certiorari. 137448. pp. 227-234. Gines. Annex "F".R. G. opted not to present any"). p. G. Petition for Review on Certiorari. 13. 137448. 25. 2. 1995. Original Record. G. Annex "F". 575-581. pp. Petition for Review on Certiorari. pp. Rollo. 29. 15. No. By registered mail posted on February 18. Vol. 52 (where the trial court held that. 16.R. Original Record. Vol. 13. Original Record. Vol. pp. Ibid.R. 51-56. No. No. 1997.R.R. 6.R. G. Petition for Review on Certiorari. pp.R. 141454. p. 572. 141454.R. Rollo. 1997. Rollo. No. dated April 23. GSIS filed administrative charges against him for failing to take appropriate steps to protect its interest (G. 137448. 13). 137448. Rollo. back of p. 137448. 1995. 701-708. Rollo.R. G. pp. pp. Rogelio P. No. p. 77-81. presiding (he died on August 15. pp. 6. G. p. 17. at p. RTC "decision" dated January 16. 137448. Subsequently. Pacquing. 2. Branch 26 became vacant and the Supreme Court authorized Judge Pacquing under Administrative Circular No. 1997. Annex "G". "Defendant however. Rollo.R. 137448. order. Petition for Certiorari. No. p. No. 27. This time with Judge Vicente A. 1998. pp. 731. No. at p. 24. order of January 16. Original Record. In the course of the proceedings. Rollo. Petition for Review on Certiorari. 20. Defendant however. 137448. Petition for Certiorari. Atty. 137448. pp.

No. CA Rollo. pp. 28-31. 141454. No. SP No. G. ponente.. province of La Union. 114.R. CA Rollo.R. 137448. 141454. SP No. 47669. 7). G. Bello. No. GSIS filed a motion for reconsideration of the November 24. SP No. SP No. Docketed as CA-G. Reyes. 137448. p. Bañez. 51131. Petition for Certiorari. Vol. G. pp. 33-46. CA-G. G. 60. 40. Clerk of Court and ex-Officio Sheriff. No. Petition for Review on Certiorari. Annex "1".R. In G. 32. 36. 45. Annex "2". Cosico and E. In CA-G. Original Record. pp. No. In G. Petition for Certiorari.30.R. 141454. 49. 51131. Rollo. Petition for Review on Certiorari. No. (Rollo. 46. pp. 33. 2. 1999. 141454. pp. No. 136874.R. R. p. Annex "E". 880-883. pp.R. Docketed as G. G. 33. 47669. concurring. Rollo. 28. On August 30. 35. 51131. 50. 7. 41. Rollo. Rollo. 44- Ibid. 48. R. 45. Petition for Certiorari. G.R. CA-G. p.R. 137448. Ibid.R. 141454. Rollo. Original Record.R. Court of Appeals Decision.R. J. pp. 34.. CA Rollo. 1998 (G. pp. Petition. 2.R. at p. 51131. 44. Vol. p. at p.R. San Miguel Corporation. 147-A-147-C). 2. G. Annex "A". 31-32. SP No. Annex "5". Court of Appeals Decision of November 24. 113. 772-773. Annex "B". . 47-48.R. 61-63.R. 51131. Rollo. Annex "B". 43. Annex "A". 32-35. Comment of Private Respondent. p. Rollo.R. Rollo. Original Record. SP No. 37. 31. SP No. No. 118. Mario Anacleto M. 137448. No. Vol. 779-783. No.R.R. pp. 1998 resolution only on December 21. 471. Rollo. No. 70. Comment of Private Respondent. Docketed as G.. 9-27. 47.R. 136874. Annex "A" Court of Appeals Decision. CA Rollo. 141454.R. 141454.R. 42. CA-G. 39. 47-48. 137448.T. Rollo. 23-30. CA Rollo. pp. 136874. Petition for Certiorari. Docketed as CA-G. pp. CA-G. Rollo.. San Miguel Corporation. No. Petition for Certiorari. 25-43. 25-43. pp. Annex "C". 141454. the Court resolved to give due course to the petition. CA Rollo. G. pp. G. G. Jr. No. 38. Rollo. G.R. pp. 3-20. No. p. No. pp. R. pp. p.V. Petition. Petition for Review on Certiorari. at pp. No. JJ.R. p.. 1998.

217. Rollo.S.R. citing 20 C. 70. Javier. No. Regidor v. Court of Appeals. 62. concurring. 1. Inc. 53 Jacinto. 71.R. 52. 224 SCRA 673 [1993]. 63. 367. 74 Phil. 55. 1997 Rules of Civil Procedure. 529. G. Singbengco v. Rule 142.. 321 Phil. Puno. 10 ( g ).J. ponente. G. concurring opinion of Justice Reynato S. Vol. Court of Appeals. 1997 Rules of Civil Procedure.51. p. 277. Petition for Certiorari. at p. No. pp.R. 2000. Top Management Programs Corporation v. 330 [1997]. Rules of Court in the Philippines. 530 [1998]). 356 Phil.R. 68. et seq.R. 218 SCRA 42 [1993]. 219 SCRA 530 [1993]. J. 66. Section 1. Cf. 527. Revised Rules of Court (1964 Revision). at p. No. Rollo. No. G. v. Revised Edition. 359 Phil. G. 222 SCRA 763 [1993]. 344 Phil. No. "Absurdity" means anything which is irrational. Rule 38. 69. 225 [1998]. 59. as amended. On March 22. 785-794. 57 [1996]. 67. G. No. Under Rule 65. 958-959 [1956]. Alejo v. Petition. Court of Appeals. Volume 2. 3-24. 25-43. 222. pp. 58. Revised Rules of Court (1964 Revision). 54. 137448. 327 Phil. Rule 142. JJ. 100 Phil. Corpus v. 137448. citing Commissioner of Internal Revenue v. Rollo. Arellano. Pascasio. Santos v. Garcia-Rueda v. 141454. Court of Appeals Decision. 323. pp. 141454. Court of Appeals. 65. 952. 43. unnatural or inconvenient that it cannot be supposed to have been within the intention of men of ordinary intelligence and discretion (Republic v. 1981. 61. 6. 60. Court of Appeals. p. 554 [1995].. Strait Times. 64. Court of Appeals. 94 [1943]. the Court gave due course to the petition in G. Sections 9. 141454 and reiterated the temporary restraining order issued on February 7. Barrios and Rosario.R. pp. 99 Phil. 299-301. Martin. Rollo. 141454. . Rollo. 257. 181 SCRA 130 [1990]. 57. 2000. Sec. Ibid. 56. 531 [1956]. Corpus.. 72. Annex "A". as amended.

PSEA sent PAFLU a notice of disaffiliation. 2002 PHIL. 127431. PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR RELATIONS COMMISSION. JOSEPH MARISOL. respondents. PSEA subsequently affiliated itself with the National Congress of Workers (NCW). DANILO CARBONEL.. LEONARDO REYES. Meanwhile. MANUEL EDA. (PSI). [G. SKYLANDERS. petitioners. No. ROLANDO FELIX.] PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW. SHARON CASTILLO. SECOND DIVISION [G. NLRC.R. January 31. NERISA MORTEL. JOCELYN FRONDA. petitioners. TEOFILO QUIRONG. Villones for petitioners in G. won in the certification election conducted among the rank and file employees of Philippine Skylanders. Several months later. NATIONAL LABOR RELATIONS COMMISSION. vs. No. ROMULO and FRANCISCO DAKILA. MARILES C. PEPITO RODILLAS. Dilig & Cris Allan Zafra and Valdez Medialdea Caraos collaborating counsels for private respondents. vs. MACARIO CABANIAS. 2002. Gerardo S.R. PAFLU filed a complaint for unfair labor practice against PSI for the latter's refusal to bargain collectively against its workers and for its recognition of PSEA-NCW. Albano Garcia & Diaz Law Offices for petitioner PSI. respondents. pending settlement of the controversy. 127374. 127374 & 127431 January 31. SYNOPSIS The Philippine Skylanders Employees Association (PSEA). Its rival union. Philippine Skylanders Employees Association — WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor. LABOR ARBITER EMERSON TUMANON. No. changed its name to Philippine Skylanders Employees Association-National Congress of Workers (PSEANCW). the Labor Arbiter declared PSEA's disaffiliation from PAFLU . PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and SERAFIN AYROSO. 127431. Jemelio L. I nc. RICARDO LUMBA. ET AL. a local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU) September.] PHILIPPINE SKYLANDERS. 2002. Nos. January 31. Thereafter. MANUEL CADIENTE and HERMINIA RIOSA. SECOND DIVISION. Inc.R. PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with the Department of Labor and Employment.R. INC.C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. G. ET AL. vs.

. 3.. free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation. ID... this is not a case where one (1) or two (2) members of the local union decided to disaffiliate from the mother federation. — The sole essence of affiliation is to increase. DcCASI The Supreme Court ruled that the pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. the latter upheld the decision of the Labor Arbiter. instead. and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence. ID. ID. HAS JURISDICTION TO ACT ON AN INTER-UNION CONFLICT. CASE AT BAR.invalid and held PSI.. the pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation.. but it is a case where almost all local union members decided to disaffiliate. ID. HAS RIGHT TO DISAFFILIATE FROM MOTHER FEDERATION. unaided by other support groups. ID. . we upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations.. — There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. Surely. As such. Liberty Cotton Mills. PSEA-PAFLU and their respective officers guilty of unfair labor practice. LABOR CODE. SOLE ESSENCE OF AFFILIATION IS TO INCREASE. The local unions remain the basic units of association. there are times when without succor and support local unions may find it hard. 4. — The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. or an equivalent of 92. ID. PENDENCY OF ELECTION PROTEST INVOLVING BOTH MOTHER FEDERATION AND LOCAL UNION DOES NOT BAR VALID DISAFFILIATION. local unions do not owe their creation and existence to the national federation to which they are affiliated but.. ID. to the will of their members. by collective action. COMMON BARGAINING POWER OF LOCAL UNIONS. There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway.. ID. ID. Admittedly. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local union.. Inc. BY COLLECTIVE ACTION.5% of the total union membership supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. On appeal to the NLRC. ID. SYLLABUS 1. LABOR ORGANIZATIONS. BUREAU OF LABOR RELATIONS. 2. In the landmark case of Liberty Cotton Mills Workers Union vs. the common bargaining power of local unions for the effective enhancement and protection of their interests. — The issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter. to secure justice for themselves. These present petitions for certiorari were filed by PSI and PSEA-NCW together with their respective officers pleading for a reversal of the NLRC's decision. LABOR AND SOCIAL LEGISLATION. LOCAL UNION.

SAcaDE 6.. CASE AT BAR. — The mere act of disaffiliation did not divest PSEA of its own personality. instead of protection.00 as damages. Its rival union. a local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU). ID.. LOCAL UNION. Recreant to its mission. PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of duty toward its members. Several months later. That. ID.5. PAFLU might have forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. the desires of the mother federation to protect its locals are not altogether to be shunned. should have been dismissed at the first instance for failure to state a cause of action. PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. won in the certification election conducted among the rank and file employees of Philippine Skylanders. It will however be to err greatly against the Constitution if the desires of the federation would be favored over those of its members. Romulo 3 and Francisco Dakila as well as the elected officers of the Philippine Skylanders Employees and Workers Association-PAFLU 4 guilty of unfair labor practice and ordering them to pay private respondent Philippine Association of Free Labor Union (PAFLU) September 5 P150. The complaint then for unfair labor practice lodged by PAFLU against PSI. at any rate. ID. Petitioners likewise seek the reversal of the 31 October 1996 Resolution of the NLRC denying their Motion for Reconsideration.000. For if it were otherwise. and to . Attached to the notice was a copy of the resolution adopted and signed by the officers and members of PSEA authorizing their local union to disaffiliate from its mother federation. COMPLAINT FOR UNFAIR LABOR PRACTICE FILED BY PARTY WITH NO LEGAL PERSONALITY SHOULD BE DISMISSED. IN WEIGHING CLAIMS OF LOCAL UNION AS AGAINST THOSE OF NATIONAL FEDERATION.. DTISaH In November 1993 the Philippine Skylanders Employees Association (PSEA). — Policy considerations dictate that in weighing the claims of a local union as against those of a national federation. ID. changed its name to Philippine Skylanders Employees Association — National Congress of Workers (PSEA-NCW). those of the former must be preferred. Inc. Inc. DECISION BELLOSILLO. neither did it give PAFLU the license to act independently of the local union. PSEA subsequently affiliated itself with the National Congress of Workers (NCW). Mariles C. THOSE OF FORMER MUST BE PREFERRED. UNFAIR LABOR PRACTICE. (PSI). PSEA and their respective officers. J p: This is a petition for certiorari 1 seeking to set aside the 31 July 1996 Decision 2 of the National Labor Relations Commission affirming the 30 June 1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders. Parenthetically though. LABOR ORGANIZATIONS.. is the policy of the law. there would be disregard and neglect of the lowly workingmen. pending settlement of the controversy. having been filed by a party which has no legal personality to institute the complaint.. Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor.

apparently oblivious to PSEA's shift of allegiance. Ayroso added that the members of the local union had unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to their interests. Pepito Rodillas.maintain continuity within the organization. namely Macario Cabanias. PAFLU averred that the local officers of PSEA-PAFLU. Rolando Felix. On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party respondents. PAFLU through Serafin Ayroso filed a complaint for unfair labor practice against PSI. was also liable for interfering with its employees' union activities. the company through its president and personnel manager. On the other hand. The . PSEA-NCW took the cudgels for its officers who were being sued in their capacities as former officers of PSEA-PAFLU and asserted that since PSEA was no longer affiliated with PAFLU. allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers in the newly-forged PSEA-NCW. Ricardo Lumba. On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with the Department of Labor and Employment. In support of this assertion. 9 In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI. Meanwhile. Romulo requesting a copy of PSI's audited financial statement. Manuel Cadiente. Teofilo Quirong. were equally guilty of unfair labor practice since they brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila. PSEA-PAFLU and their respective officers guilty of unfair labor practice. Ayroso explained that with the dismissal of PSEA-WATU's election protest the time was ripe for the parties to enter into a collective bargaining agreement. PAFLU Secretary General Serafin Ayroso wrote Mariles C. Manuel Eda. its president Mariles C. Danilo Carbonel. Nerisa Mortel. its president Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged that aside from PSI's refusal to bargain collectively with its workers. On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW. Leonardo Reyes. Romulo. Sharon Castillo. Through Ayroso PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby confirming his illicit participation in union activities. Joseph Mirasol. 6 Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair labor practice against Francisco Dakila. Jocelyn Fronda. 7 The two (2) complaints were thereafter consolidated. and Herminia Riosa. 8 PSI. and its personnel manager Dakila moved for the dismissal of the complaint on the ground that the issue of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. Ayroso or PAFLU for that matter had no personality to file the instant complaint. PSEA-NCW submitted in evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing Ayroso or PAFLU from instituting any action in their behalf. Agitated by PSI's recognition of PSEA-NCW.

Decision explained that despite PSEA-PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file employees, the company knowingly sanctioned and confederated with Dakila in actively assisting a rival union. This, according to the Labor Arbiter, was a classic case of interference for which PSI could be held responsible. As PSEA-NCW's personality was not accorded recognition, its collective bargaining agreement with PSI was struck down for being invalid. Ayroso's legal personality to file the complaint was sustained on the ratiocination that under the Labor Code no petition questioning the majority status of the incumbent bargaining agent shall be entertained outside of the sixty (60)-day period immediately before the expiry date of such five (5)-year term of the collective bargaining agreement that the parties may enter into. Accordingly, judgment was rendered ordering PSI, PSEAPAFLU and their officers to pay PAFLU P150,000.00 in damages. 10 PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA could not validly separate from PAFLU, join another national federation and subsequently enter into a collective bargaining agreement with its employercompany. 11 Petitioners separately moved for reconsideration but both motions were denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW together with their respective officers pleading for a reversal of the NLRC's Decision which they claimed to have been rendered in excess of jurisdiction. In due time, both petitions were consolidated. In these petitions, petitioner PSEA together with its officers argued that by virtue of their disaffiliation PAFLU as a mere agent had no authority to represent them before any proceedings. They further asserted that being an independent labor union PSEA may freely serve the interest of all its members and readily disaffiliate from its mother federation when circumstances so warrant. This right, they averred, was consistent with the constitutional guarantee of freedom of association. 12 For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's behavior. Having heard no objections or protestations from PAFLU relative to PSEA's disaffiliation, they reckoned that PSEA's subsequent association with NSW was done bona fide. 13 The Solicitor General filed a Manifestation in Lieu of Comment recommending that both petitions be granted. In his Manifestation, the Solicitor General argued against the Labor Arbiter's assumption of jurisdiction citing the following as reasons: first, there was no employer-employee relationship between complainant Ayroso and PSI over which the Labor Arbiter could rightfully assert his jurisdiction; second, since the case involved a dispute between PAFLU as mother federation and PSEA as local union, the controversy fell within the jurisdiction of the Bureau of Labor Relations; and lastly, the relationship of principal-agent between PAFLU and PSEA had been severed by the local union through the lawful exercise of its right of disaffiliation. 14

Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's disaffiliation. To be more precise, may PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and file employees? DHacTC At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter. 15 Nonetheless, with due recognition of this fact, we deem it proper to settle the controversy at this instance since to remand the case to the BLR would only mean intolerable delay for the parties. The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. 16 we upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations, local unions do not owe their creation and existence to the national federation to which they are affiliated but, instead, to the will of their members. The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for the effective enhancement and protection of their interests. Admittedly, there are times when without succor and support local unions may find it hard, unaided by other support groups, to secure justice for themselves. Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence. Such dictum has been punctiliously followed since then. 17 Upon an application of the aforecited principle to the issue at hand, the impropriety of the questioned Decisions becomes clearly apparent. There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. As such, the pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local union, or an equivalent of 92.5% of the total union membership supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is not a case where one (1) or two (2) members of the local union decided to disaffiliate from the mother federation, but it is a case where almost all local union members decided to disaffiliate. It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from subsequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its members. There is a further consideration that likewise argues for the granting of the petitions. It stands unchallenged that PAFLU instituted the complaint for unfair labor practice against the wishes of workers

whose interests it was supposedly protecting. The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. The complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA and their respective officers, having been filed by a party which has no legal personality to institute the complaint, should have been dismissed at the first instance for failure to state a cause of action. Policy considerations dictate that in weighing the claims of a local union as against those of a national federation, those of the former must be preferred. Parenthetically though, the desires of the mother federation to protect its locals are not altogether to be shunned. It will however be to err greatly against the Constitution if the desires of the federation would be favored over those of its members. That, at any rate, is the policy of the law. For if it were otherwise, instead of protection, there would be disregard and neglect of the lowly workingmen. WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers Association-NCW, together with their respective officers, are GRANTED. The Decision of the National Labor Relations Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine Skylanders and Workers Association-NCW, Philippine Skylanders, Inc. and their respective officers, guilty of unfair labor practice and ordering them to pay damages to private respondent Philippine Association of Free Labor Unions (PAFLU) September (now UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying reconsideration is REVERSED and SET ASIDE. No costs. SO ORDERED. Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur. Footnotes 1. This petition for certiorari was instituted with the Supreme Court on 23 December 1996. Hence, it does not come within our ruling in St. Martin Funeral Home v. National Labor Relations Commission and Bienvenido Aricayos (G.R. No. 130866, 16 September 1998, 295 SCRA 494) where we decreed that appeals from decisions of the National Labor Relations Commission should be initially presented to the Court of Appeals. 2. Decision penned by Commissioner Rogelio I. Rayala, concurred in by Commissioners Raul T. Aquino and Victoriano R. Calaylay, Second Division, National Labor Relations Commission; Rollo, G.R. No. 127374, pp. 45-57. 3. Spelled also as "Marites C. Romulo" and "Matules C. Romulo" in the records.

4. Private respondent PAFLU refuses to acknowledge PSEA's disaffiliation and continuously refers to petitioner local union as PSEA-PAFLU while the local union insists on its new affiliation — PSEA-NCW. Hence, PSEA, PSEA-PAFLU and PSEA-NCW refer to one and the same organization. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Now known as "Unified PAFLU." Original Records, pp. 4-16. Id., pp. 22-27. Id., pp. 101-123. Id., pp. 47-51. Decision penned by Labor Arbiter Emerson C. Tumanon; id., pp. 198-208. See Note 1. Id., pp. 13-44. Rollo, G.R. No. 127431, pp. 12-44. Id., pp. 206-239.

15. Sec. 1, Book V, Rules and Regulations Implementing the Labor Code: (2) "An inter-union dispute refers to any conflict between and among union members . . . including cases arising from chartering or affiliation of labor organizations." 16. No. L-33987, 4 September 1975, 66 SCRA 512.

17. Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, 28 February 2000, 326 SCRA 428; Tropical Hut Employees Union-CGW v. Tropical Hut Food Market, Inc., G.R. Nos. 43495-99, 20 January 1990, 181 SCRA 173; Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824, 19 June 1985, 137 SCRA 42; Adamson & Adamson Inc. v. CIR, No. L-35120, 31 January 1984, 127 SCRA 268; Villar v. Inciong, 206 Phil. 366, (1983); PINCO Employees and Workers Organization v. PINCOCO, 198 Phil. 166 (1982).

C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a, I n c.

G.R. No. 146775 January 30, 2002 SAN MIGUEL CORP. vs. COURT OF APPEALS, ET AL. FIRST DIVISION

[G.R. No. 146775. January 30, 2002.] SAN MIGUEL CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE M. ESPAÑOL, JR., Hon. CRESENCIANO B. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA, respondents. Estenzo Jamora and Solon for petitioner. The Solicitor General for respondents. SYNOPSIS The Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City and it discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. For failure of SMC to submit proof that it was paying regular Muslim holiday pay to its employees, Director Macaraya of the DOLE Iligan District issued a compliance order directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from receipt of the order. SMC appealed to the DOLE main office in Manila, but its appeal was dismissed for having been filed late. The dismissal of the appeal was later on reconsidered after it was found that the appeal was filed within the reglementary period. However, the appeal was still dismissed for lack of merit and the order of Director Macaraya was affirmed. SMC went to the Supreme Court for relief via a petition for certiorari, which this Court referred to the Court of Appeals. The Court of Appeals modified the Orders with regard to the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before the Supreme Court. The Supreme Court found no reason to reverse the decision of the Court of Appeals. Muslim holidays are provided under the Code of Muslim Personal Laws and should be read in conjunction with Article 94 of the Labor Code. There should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or religion. SCaEcD SYLLABUS 1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; CANNOT BE AVAILED OF AS SUBSTITUTE FOR LOST APPEAL. — Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal. For failure of petitioner to file a timely appeal, the questioned decision of the Court of Appeals had already become final and executory. 2. LABOR AND SOCIAL LEGISLATION; PRESIDENTIAL DECREE NO. 1083 (CODE OF MUSLIM PERSONAL LAWS); PAYMENT OF BENEFITS FOR MUSLIM HOLIDAYS; NO DISTINCTION BETWEEN MUSLIMS AND NON-MUSLIMS. — Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that "(t)he provisions of this Code shall be applicable only to Muslims . . . ." However, there

The Court of Appeals did not err in sustaining Undersecretary Español who stated: "Assuming arguendo that the respondent's position is correct. Article 3(3) of Presidential Decree No. Director IV of DOLE Iligan District Office issued a compliance order. VISITORIAL AND ENFORCEMENT POWER. STcHDC DECISION KAPUNAN. . ." 3. then by the same token. SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. of the Court of Appeals in CA-G. SDTIaE . SHALL BE EXERCISED BY THE SECRETARY OF LABOR AND EMPLOYMENT OR HIS DULY AUTHORIZED REPRESENTATIVES. CASE AT BAR. DOLE sent a copy of the inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta." At any rate. the issue could be resolved even without documentary proofs. conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. In any case. POWER TO ISSUE COMPLIANCE ORDER. In addition. Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. it was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. In the course of the inspection. LABOR CODE.. the appeal was still dismissed for lack of merit and the order of Director Macaraya was affirmed. However. 1083 also declares that ". J p: Assailed in the petition before us are the decision. Indeed. petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. the Department of Labor and Employment (DOLE). the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees.should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. The dismissal of the appeal for late filing was later on reconsidered in the order of 17 July 1998 after it was found that the appeal was filed within the reglementary period. 1 SMC contested the findings and DOLE conducted summary hearings on 19 November 1992.R. there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection. 28 May 1993 and 4 and 5 October 1993. The facts of the case are as follows: On 17 October 1992. ID. Iligan City. promulgated on 08 May 2000. nothing herein shall be construed to operate to the prejudice of a non-Muslim. SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filed late. Hence. Macaraya. Iligan District Office. promulgated on 18 October 2000. Still. Filomena. Hence. We must remind the respondent-appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or religion. — In the case before us. and the resolution. Alan M. dated 17 December 1993. SP-53269. directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and nonMuslim employees holiday pay within thirty (30) days from the receipt of the order.

1993. in the now questioned decision. promulgated on 08 May 2000. ruled. alleging that: PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY GRANTED MUSLIM HOLIDAY PAY TO NON-MUSLIM EMPLOYEES OF SMC-ILICOCO AND ORDERING SMC TO PAY THE SAME RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF THE PROMULGATION OF THE COMPLIANCE ORDER ISSUED ON DECEMBER 17. In National Irrigation Administration vs. his predicament being the effect of his deliberate inaction. 1083 AND PREVAILING JURISPRUDENCE. HAVE JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER AND SUBSEQUENT ORDERS.D. THE ASSAILED COMPLIANCE ORDER AND ALL SUBSEQUENT ORDERS. Martin Funeral Homes vs. 4 At the outset. . THE HON. petitioner came to this Court via a petition for certiorari under Rule 65 instead of an appeal under Rule 45 of the 1997 Rules of Civil Procedure. 1998 of Undersecretary Español. COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DECLARED THAT REGIONAL DIRECTOR MACARAYA.. DECISION AND RESOLUTION OF PUBLIC RESPONDENTS WERE ALL ISSUED WITH GRAVE ABUSE OF DISCRETION AND ARE VOID AB INITIO. INTENT AND PURPOSE OF P. Court of Appeals. SMC filed a petition for certiorari before this Court. HENCE. and the decision accordingly becomes final and executory. Let this case be remanded to the Regional Director for the proper computation of the said holiday pay. JR. 2 The appellate court. WHO ALL LIKEWISE ACTED WITH GRAVE ABUSE OF DISCRETION AND WITHOUT OR IN EXCESS OF THEIR JURISDICTION. (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65. the Order dated December 17. 3 Its motion for reconsideration having been denied for lack of merit. 5 the Court declared: . SO ORDERED. If the aggrieved party fails to do so within the reglementary period. which this Court referred to the Court of Appeals pursuant to St. IT BEING CONTRARY TO THE PROVISIONS. Jr. UNDERSECRETARY TRAJANO AND UNDERSECRETARY ESPAÑOL. WHEN IN FACT THEY HAVE NO JURISDICTION OR HAS LOST JURISDICTION OVER THE HEREIN LABOR STANDARD CASE. is hereby MODIFIED with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. he cannot avail himself of the writ of certiorari. NLRC. as follows: WHEREFORE. THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH GRAVE ABUSE OF DISCRETION IN THAT SAN MIGUEL CORPORATION WAS NOT ACCORDED DUE PROCESS OF LAW. . any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari.SMC went to this Court for relief via a petition for certiorari. 1993 of Director Macaraya and Order dated July 17. .

which would be but a continuation of the appellate process over the original case. North Cotabato. i. and Zamboanga and in such other Muslim provinces and cities as may hereafter be created. which states: Art. commemorating the end of the fasting season. speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. of Presidential Decree No. 170. respectively. 169. Rule 45 is clear that decisions. which falls on the first day of the tenth lunar month of Shawwal. – (1) Muslim holidays shall be officially observed in the Provinces of Basilan.which falls on the tenth day of the twelfth lunar month of Dhû'l- Art. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. the Court finds no reason to reverse the decision of the Court of Appeals. may be appealed to this Court by filing a petition for review. Title I. (b) Maulid-un-Nabî (Birthday of the Prophet Muhammad).. speedy and adequate remedy in the ordinary course of law against its perceived grievance. which falls on the first day of the first lunar month of Muharram.e. . A remedy is considered "plain. 8 otherwise known as the Code of Muslim Personal Laws. Maguindanao. 'Îd-ûl-Adhâ (Hari Raya Haji). xxx xxx xxx For the writ of certiorari under Rule 65 of the Rules of Court to issue. now Rule 45 and Rule 65. regardless of the nature of the action or proceeding involved.The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court. 6 Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal. Lanao del Norte. the questioned decision of the Court of Appeals had already become final and executory. of the 1997 Rules of Civil Procedure. Muslim holidays are provided under Articles 169 and 170. – The following are hereby recognized as legal Muslim 'Amun Jadîd (New Year). In any event. Marawi. Book V. and (e) Hijja. appeal was not only available but also a speedy and adequate remedy. Iligan. Provinces and cities where officially observed. holidays: (a) Official Muslim holidays. which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal. final orders or resolutions of the Court of Appeals in any case. a petitioner must show that he has no plain. Lanao del Sur. 7 For failure of petitioner to file a timely appeal. which falls on the twenty-seventh day of the seventh lunar month of Rajab. (c) Lailatul Isrâ Wal Mi'râj (Nocturnal Journey and Ascension of the Prophet Muhammad). In this case. (d) 'Îd-ul-Fitr (Hari Raya Puasa). 1083. Pagadian.

there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. . Muslim holidays may also be officially observed in other provinces and cities. Section B of the Labor Code." However. The Court of Appeals did not err in sustaining Undersecretary Español who stated: Assuming arguendo that the respondent's position is correct. At any rate. . Article 128. . and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays.(2) Upon proclamation by the President of the Philippines. . (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. 1083 provides that "(t)he provisions of this Code shall be applicable only to Muslims . as amended by Republic Act No. approved by then DOLE Secretary Bienvenido E. both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays. — (a) Every worker shall be paid his regular daily wage during regular holidays. the 1999 Handbook on Workers' Statutory Benefits. Petitioner asserts that Article 3(3) of Presidential Decree No. offices. the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the . . . Macaraya. . nothing herein shall be construed to operate to the prejudice of a non-Muslim. which provides: Art. Visitorial and enforcement power. and in cases where the relationship of employer-employee still exists. Article 3(3) of Presidential Decree No. agencies. Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. then by the same token. 1083 also declares that ". . . 7730. except in retail and service establishments regularly employing less than ten (10) workers. 94. — xxx xxx xxx (b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary. provides: "Article 128. Laguesma on 14 December 1999 categorically stated: Considering that all private corporations. 9 On the question regarding the jurisdiction of the Regional Director Allan M. We must remind the respondent-appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or religion. The foregoing provisions should be read in conjunction with Article 94 of the Labor Code." In addition. Right to holiday pay.

. as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No. xxx xxx xxx In the case before us. Fernan vs. Lanao del Sur. a series of summary hearings were conducted by DOLE on 19 November 1992. except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. and as aptly declared by Undersecretary Español. concur. Davide. Thus. M-000915-92 (Napoleon E. it "can never be a benchmark nor a guideline to the present case . Sulu and Tawi-Tawi. Finally. Puno. the NLRC Cagayan de Oro City declared. JJ. SMC could not claim that it was not given an opportunity to defend itself. Jr. 10 the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only incidental to the main case. the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders. SO ORDERED. . we sustain the Court of Appeals in finding that SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. . there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection." 12 WHEREFORE. Indeed. Hence. It is only upon Presidential Proclamation that Muslim holidays may be officially observed outside the Autonomous Region and generally extends to Muslims to enable them the observe said holidays..J. the petition is DISMISSED. Anent the allegation that petitioner was not accorded due process.labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. . Pardo and Ynares-Santiago. C. In that case. 11 The decision has no consequence to issues before us. In addition. Footnotes . the issue could be resolved even without documentary proofs. petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. In any case. Further. Muslim holidays are legally observed within the area of jurisdiction of the present Autonomous Region for Muslim Mindanao (ARMM). particularly in the provinces of Maguindanao. in view of the foregoing. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga).. in passing: We also deny the claims for Muslim holiday pay for lack of factual and legal basis. 28 May 1993 and 4 and 5 October 1993.

ROWENA ESLABON DIONISIO FIRST DIVISION [G. Codifying Muslim Personal Laws. 2002. vs. at 49. Civil Service Commission. 2. No. 4. p. January 29. 12. 10. 17-18. See GSIS vs.R. Public Attorney's Office for accused-appellant. pp. 3. 130170 January 29. Court of Appeals. p. 2002 PEOPLE OF THE PHIL. vs. Olisa. 6. I n c. 7. 130170. No. The Solicitor General for plaintiff-appellee. and Providing for Its Administration and for Other Purposes. plaintiff-appellee. ROWENA ESLABON DIONISIO.. Also Elena de Fuerta. JOSEFINA MALLARI y PENAFLOR (Acquitted) and DIANE DOBLE y MACATUMPAG (Acquitted). vs. 5. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a.] PEOPLE OF THE PHILIPPINES. at 264-265. Republic vs. accused-appellant. ROWENA ESLABON DIONISIO. Italics supplied. accused.1. A Decree to Ordain and Promulgate a Code Recognizing the System of Filipino Muslim Laws.. G. SYNOPSIS . Resolution. Rollo. promulgated on 21 July 1993 of the NLRC Cagayan de Oro City. Mathay. 93.R. 11. 8. Rollo. 313 SCRA 376 (1999). 312 SCRA 91 (1999). 295 SCRA 494 (1998). 9. Jr. Id. Rollo. 318 SCRA 255 (1999). Id. 304 SCRA 421 (1999). 61.

000 as placement fee for his application but nothing also happened.Appellant was found guilty of illegal recruitment in large scale. There she met appellant and Josefina Mallari who assured her of a job in Saudi Arabia. The absence of evidence as to an improper motive actuating the principal witnesses of the prosecution strongly tends to indicate that their testimony is worthy of full faith and credit. TCacIA 2. contract services. As such. or procuring workers. ID. Besides. whether for profit or not: . Accused-appellant cannot feign innocence by claiming that it was actually Molar who promised them overseas jobs.. any act of canvassing. and includes referrals. . hiring. CANNOT PREVAIL OVER POSITIVE TESTIMONIES. for as long as it is clearly established through the witnesses' respective testimonies. Moreover. 3. That it is appellant who transacted with them. RECRUITMENT AND PLACEMENT. SYLLABUS 1. the testimony of private complainants that accused-appellant was the person who transacted with them. CREDIBILITY OF WITNESSES. It gave credence to the categorical testimonies of complainants that it is appellant who separately recruited them for jobs abroad. Indeed. that the accused is the one involved in prohibited recruitment. — Private complainants did not harbor any ill motive to testify falsely against accusedappellant. it was held in a number of cases that even the absence of receipts is not fatal to the case of the prosecution. . defines recruitment and placement as ". — Article 13 (b) of the Labor Code.500. EVIDENCE. it is inconceivable that private complainants could be mistaken in their belief that it was accused-appellant who recruited them considering that it was she who personally talked with them on several occasions and received the sums of money for which she issued receipts where it was stated that the amount given was for "processing" and "POEA". Complainant Carandang and companions were likewise recruited by appellant and her cohorts to work in the Middle East. locally or abroad. He paid Dionisio P7. Complainant Castillo alleged that one Cora Molar enticed her to apply for overseas employment at the office of Jovial Trading and Employment Services. Castillo learned that the firm was neither licensed nor authorized to recruit workers for overseas employment. Complainant Meeks was also recruited and promised a job in South Korea. Hence. LABOR CODE. Carandang paid Dionisio P7. in light of her positive identification as private complainants' recruiter. PRESENT EVEN IN THE ABSENCE OF CONSIDERATION AS LONG AS OVERSEAS EMPLOYMENT WAS PROMISED. DENIAL. accused-appellant's mere denials cannot prevail over these positive and straightforward testimonies.000 for their services and documents. enlisting. utilizing. was correctly given credence and regarded as trustworthy. it is against human nature and experience for strangers to conspire and accuse another stranger of a most serious crime just to mollify their hurt feelings. — Private complainants were categorical and unequivocal in their statements that it was accused-appellant who separately recruited them during the same period of time for jobs abroad. REMEDIAL LAW. promising or advertising for employment. Castillo paid a total of P10. transporting. but nothing happened to the promised work abroad. cDEICH The Court affirmed the conviction of appellant. contracting. promised them jobs abroad and received money therefor. but nothing also happened. ID. LABOR AND SOCIAL LEGISLATION. UPHELD IN THE ABSENCE OF ILL MOTIVE. promised them jobs and received money therefor..

000. and 3) the accused committed the same against three or more persons individually or as group. ILLEGAL RECRUITMENT IN LARGE SCALE. When Castillo told them that she did not have the money at that time. Dionisio demanded another P1.. 1991. 2) the accused did not have the license or the authority to lawfully engage in the recruitment and placement of workers." Consequently. .. ID.000.00 and reimburse to private complainants the sums of money she collected. Again Dionisio assured Castillo that she would facilitate the processing of all necessary documents and that a job awaited Castillo abroad as governess and domestic helper. as appearing on the records.k. following the telephone instruction of Dionisio. a certain Cora Molar enticed private complainant Juanita Castillo to apply for overseas employment at the office of Jovial Trading and Employment Services.000. Quezon City. located at the third floor of the Villa Building in Cubao. On September 3. even in the absence of money given as consideration for accused-appellant's "services. since it was sufficiently demonstrated that she promised overseas employment to private complainants. finding accused-appellant Rowena Eslabon Dionisio guilty beyond reasonable doubt of the crime of illegal recruitment in large scale and sentencing her to suffer life imprisonment. Castillo handed over P4. Dionisio said that she could make a partial payment of P5. ..00 was remitted to Dionisio by Molar. 4.a. medical examination and NBI clearance. ELEMENTS. ID.00 and pay the balance later on. They demanded from Castillo P9.000. 1991.000. are as follows: Sometime in August 1991. Dionisio sent Molar to Castillo's house to collect the downpayment on August 12. pay a fine of P100. CHDTEA The factual antecedents of the case.00 to Molar.00 from Castillo. — The elements of the crime of illegal recruitment in large scale are the following: 1) the accused undertook a recruitment activity defined under Article 13 (b) or any prohibited practice under Article 34 of the Labor Code. a. she went back to the Cubao office on August 17. as evidenced by a receipt 2 signed by Molar. "Manay".00 as service fee and to defray expenses for passport. 1991. Lured by the prospect of working abroad. Branch 94 1 in Criminal Case No. According to Castillo. J p: Before us is an appeal from the decision of the Regional Trial Court of Quezon City. which she delivered on the same day as shown by a receipt 3 signed by Dionisio. where the P4.000. . . Q-91-26376. Dionisio and Mallari then promised to secure her a visa so she could leave immediately for the oil-rich kingdom." she would still be considered as having engaged in recruitment activities. EHSTDA DECISION YNARES-SANTIAGO. Dionisio and Mallari assured Castillo that they had the right connections and could send her to Saudi Arabia. Castillo went to the said office where she met accused-appellant Rowena Dionisio and Josefina Mallari.

did then and there wilfully. et al. in Quezon City. without first obtaining the required license and/or authority from the Department of Labor and Employment.00 on two separate occasions. it soon became apparent to Castillo that she was hoodwinked.000. which Carandang promptly gave on August 3. 1991. Dionisio informed Carandang and his other companions that they were to leave for the Middle East on October 31. ALBERTO MEEKS Y ADAN. without any authority of law. the above-named accused. and for a fee. ANTONIO GANZON Y GARDE. were not licensed recruiters. A day before the scheduled departure date. Doble and one Jane Doe alias "Cora Molar.000. conspiring together. 11 Thus." whose real identity was not established. Dionisio. they were told that the same was postponed to November 6. as promised. 4 Castillo secured a certification 5 to this effect from the POEA and forthwith. 1991. Carandang was further persuaded to part with the additional amount of P4.00. As testified by Alberto's wife. who accompanied him to the office of Jovial Trading and introduced him to Dionisio and Mallari. 8 Carandang likewise secured a certification 9 from the POEA and executed a sworn statement against Dionisio's group.500. they were again told that their plane tickets have not yet been released.After repeatedly following up her application with no result.00 as placement fee for Alberto's application for a job in South Korea. However. and later found employment in Saudi Arabia through the efforts of another recruitment agency. unlawfully and feloniously recruit and promise employment and/or job placement abroad to JUAN CARANDANG Y PRECILLA. on which date. Philippines. together with Juanito Castillo. 1991. Subsequently. JUANITO GOROSPE Y SANTILLAN. At about the same time. To confirm her suspicion. Carandang was introduced by a friend to Diana Doble. were charged before Branch 94 of the Regional Trial Court of Quezon City for large scale illegal recruitment. Mallari. Alberto was not able to go to South Korea. 1991. the Meeks spouses went to the office of Jovial Trading on September 9. Mallari and the firm known as Jovial Trading were neither licensed nor authorized to recruit workers for overseas employment. confederating with and mutually helping one another. when they found out from the POEA that Dionisio. ROBERTO CRISTOBAL Y FABRES and REYNALDO CASTILLO Y PELAEZ. private complainant Alberto Meeks was also purportedly duped by Dionisio and company. NOEL VILLANUEVA Y HENSON. 1991 and gave Dionisio P7. Dionisio asked for a processing fee of P3. Soon enough. went to Camp Karingal where she executed a sworn statement 6 against Dionisio and company. 1991. they all realized that they were fooled by Dionisio. on November 11. Noel Villanueva and Lito Gorospe. were likewise recruited to work abroad by accused-appellant and her cohorts. Dionisio issued and signed a receipt 10 for the said amount in the presence of Mallari and Doble. private complainant Juan Carandang. she went to the Philippine Overseas Employment Administration (POEA) office where she was informed that Dionisio. On the other hand. and within the jurisdiction of this Honorable Court. The information against them reads: cCaDSA That on or about the period comprised from August 1991 to October 1991. JUANITA CASTILLO Y ALVAREZ. covered by two receipts 7 signed by Dionisio dated September 23 and October 24. . Angelita. however.

000. 2018 of the Labor Code (P.00. premises considered. 14 The trial court rejected Dionisio's defense that the real illegal recruiter was Cora Molar. 1992. She did not openly or directly advertise herself as a recruiter. cosmetics and other goods. The other two accused. to indemnify the following private complainants: Juanita Castillo—P4. as certified by the POEA and the testimony of prosecution witness Benjamin Vasquez. this Court finds the accused Rowena Eslabon-Dionisio guilty beyond reasonable doubt of illegal recruitment committed on a large scale and sentences her to suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100. and to pay the costs. a POEA employee.D. Dionisio. 1995. On October 2. Juan Carandang—P4. decreeing as follows: WHEREFORE. SO ORDERED. 12 Upon arraignment on January 6. Trial on the merits then ensued. who rented a table in the office of Jovial Trading where Dionisio was the sole proprietor. Josefina Mallari and Diana Doble. The name of her . who did not possess the authority or license to conduct recruitment activities. are acquitted on ground of reasonable doubt. Mallari and Doble pleaded not guilty to the information. nor did she personally ask the private complainants to apply in her office for overseas jobs. 13 "Cora Molar" had absconded and remained at large. 442). 15 Accused-appellant Dionisio is now before us on the following assignment of errors: I THE TRIAL COURT ERRED IN GIVING FULL WEIGHT AND CREDENCE TO THE TESTIMONY OF THE COMPLAINANTS AND DISREGARDING THE THEORY OF ACCUSED ROWENA ESLABON DIONISIO. II THE TRIAL COURT ERRED IN FINDING DIONISIO GUILTY BEYOND REASONABLE DOUBT OF THE CRIME CHARGED AND OF ORDERING HER TO PAY FINE AND INDEMNIFICATION OF AMOUNTS TO COMPLAINANTS. Contrary to Law.00 and Alberto Meeks—P7.00. It disregarded Dionisio's claim that she received the money from the private complainants in behalf of Molar and that Dionisio was engaged only in the business of buying and selling slippers. The trial court gave credence to private complainants' testimonies that they were recruited by Dionisio. 16 Accused-appellant maintains that no conclusive proof was adduced by the prosecution to show that she engaged in recruitment activities. the trial court rendered judgment.000.That the crime described above is committed in large scale as the same was perpetrated against three (3) or more persons individually or as group as penalized under Article 38 and 39 as amended by P.00).D.500.000.

000. you were convinced by them? A. Rowena Dionisio and Josefina Mallari. 17 As such. as evidenced by receipts signed by her. And were you able to talk with them? Yes. sir. The absence of evidence as to an improper motive actuating the principal witnesses of the prosecution strongly tends to indicate that their testimony is worthy of full faith and credit. She further claims that she merely entertained Molar's clients in her absence since Molar rented a table in her office. A. They asked for a P9. Yes. Q. it is against human nature and experience for strangers to conspire and accuse another stranger of a most serious crime just to mollify their hurt feelings. was correctly given credence and regarded as trustworthy. she claims that she received the said money on behalf of Cora Molar and did not benefit from it in any way. We agree with the trial court's observation that private complainants did not harbor any ill motive to testify falsely against accused-appellant. Q. Q. What did you do when you were convinced? A. the testimony of private complainants that accused-appellant was the person who transacted with them. sir. "Jovial Trading. my medical examination and my NBI clearance. A.00? .firm. Indeed.000. Accused-appellant's submissions fail to convince us. Q. Accused-appellant admits that she received the various amounts of money from private complainants. When you said here that they were "malakas" and that they have connections with other agencies. However. that they can process our papers to send us abroad." alone implies that she was a merchant engaged in the buying and selling of goods and not a recruiter. And what did you do when you were told by them to give that P9. xxx xxx When you arrived at their office.00 service fee and they told me. whom did you meet? I met Rowena Eslabon Dionisio and Josefina Mallari. to process my papers including my passport. promised them jobs and received money therefor. 18 Juanita Castillo described how she was recruited by accused-appellant in this wise: IDTSaC xxx Q. Q. And what was the nature of the conversation? A. Rowena Dionisio and Josefina Mallari convinced me that they have a right connection and they are what you call it "malakas" and they can send us abroad.

Where did you give that P4. . Q.00. To whom did you give that amount? To Cora Molar. A. I told them that I don't have enough money that total of P9.00. Q.000. The representative. . A. Thru the instruction. Why? Were you instructed by Rowena? WITNESS Yes. thru the telephone. A. When was that? I gave the partial payment of P4. xxx WITNESS In our house. Josefina Mallari and Rowena Dionisio. the P4. Cubao. COURT I want to . sir.000. but they told me. A.00.00? xxx xxx A.000.000.000. Quezon City. you can give partial payment of P5. xxx xxx After you gave this P4. to Cora Molar through the instruction of Rowena Dionisio.000. Villa Building.00 only and later on the balance of P4. And who is that Cora Molar? xxx xxx Were you able to give partial payment to the herein accused? Yes. Q. I gave the money. Q. xxx Q. A.00 on August 12. Q. xxx Q. Q.A. 1991. And what did you do when you went there to their office? .000.00. When was that? August 17 of 1991. sir. what did you do next? I went to their office at 3rd Floor.

xxx xxx. what happened next? A. A.A. what did she do next? She told me to come back on a certain day in order to know if I will really have a visa. And were you able to give that money? Yes. she asked money from me to process the papers at the POEA. And after Cora Molar gave that money to Rowena Dionisio.000. 19 Similarly. they.000. A.00 because the visa is already ready and the amount is for the ticket. to Rowena Dionisio. How much did Eslabon ask from you? P3. A.500. Juan Carandang testified as follows: xxx Q. Q.00. Cora Molar gave this money to Dionisio. Q. xxx When you said. A. sir. xxx xxx Did you return as ordered by Rowena? A. And after talking with Eslabon that you are applying for work abroad. Q. A. sir. A. what did you do next? When she said that. A. . xxx xxx And after you paid her the sum of P3. Q. xxx xxx What transpired when you were accompanied by Doble to their office at Villa Building? I was introduced to Rowena Eslabon and she promised me that I will be working in Saudi Arabia. Was there a receipt for that purpose? None. I came back and she told me I will prepare money in the amount of P2. Q. xxx Q. whom are you referring to? Josefina Mallari and Rowena Dionisio. Q. Yes.00. They promised that they will do their best to get our visa right away or the soonest possible time so that we can be sent abroad. xxx Q.

Q. I came back and gave her the amount of P2. xxx And did you again give the sum of P2. Q. On Oct. A. 30. A. xxx xxx After giving the amount. When you were informed by Eslabon that on Oct. A. Last September 23. Q. And she told me when I called her to bring again some money. A. Q.500. I came back on October 24 and I brought the amount of P2. Q. xxx Q. Q. Where did you give that amount? I gave it to Rowena and she issued me a receipt. what transpired next? Rowena told me to call her next week and she told me I will ask for the result of my application. A. When I came back on October 30 to confirm whether we will proceed or not. you will be going to Saudi Arabia. Did you call her as requested? Yes. I cannot give but I told her I will come back.00. A. Q. Did you talk with somebody in the office of the lady? Yes.00.500. Was there a receipt to that effect? Yes.500. A. A. And did you give that amount? Yes. did you come back to the office of Eslabon on October 31? aEIADT A. she told me that it was postponed. 31. Q. A. I went to the office.00 as requested by Eslabon? On that date. xxx xxx Q.Q. Did you return? Yes. And did you bring as requested by Eslabon the money? Yes. . What was the conversation all about? A.

xxx xxx xxx What transpired at the office? She said we will be able to leave on Nov. locally or abroad. would be able to leave. Alberto. 6. I believed her and asked her when we will return. 20 The above testimonies were corroborated by Angelita Meeks. in light of her positive identification as private complainants' recruiter. Accused-appellant cannot feign innocence by claiming that it was actually Molar who promised them overseas jobs. A. xxx Q. hiring. who declared that her husband was promised employment by accused-appellant as a factory worker in South Korea. A." she would still be considered as having engaged in recruitment activities. and includes referrals. defines recruitment and placement as ". sir because the tickets were not released yet. that the accused is the one involved in prohibited recruitment. 6. or procuring workers. 24 Article 13 (b) of the Labor Code. . After you were informed by Miss Eslabon that your schedule for Saudi Arabia was postponed. promising or advertising for employment. transporting. it was held in a number of cases that even the absence of receipts is not fatal to the case of the prosecution. for as long as it is clearly established through the witnesses' respective testimonies. what did you do? A. accused-appellant's mere denials cannot prevail over these positive and straightforward testimonies. xxx Q. whether for profit or not: . utilizing. since it . . 21 Private complainants were categorical and unequivocal in their statement that it was accused-appellant who separately recruited them during the same period of time for jobs abroad. She said the tickets were still under process and because of her convincing words. xxx xxx And on Nov. What was her reply? A. 22 Besides. it is inconceivable that private complainants could be mistaken in their belief that it was accused-appellant who recruited them considering that it was she who personally talked with them on several occasions and received the sums of money for which she issued receipts where it was stated that the amount given was for "processing" and "POEA".xxx xxx xxx Q. even in the absence of money given as consideration for accusedappellant's "services. . Consequently. contracting. Q. 23 Moreover. were you able to leave? No. xxx xxx. any act of canvassing. She was also personally assured by accused-appellant that her husband. enlisting. . I asked her why it was postponed and why we do not have ticket. contract services." (Italics ours). Hence.

2-5. Puno. TSN. the appealed decision of the Regional Trial Court of Quezon City. TSN. C. Footnotes 1. 6. Supra. WHEREFORE. 3. pp. October 6. 2. 7. at 125. Supra.. finding accused-appellant Rowena Eslabon-Dionisio GUILTY beyond reasonable doubt of the crime of illegal recruitment in large scale and imposing on her the penalty of LIFE IMPRISONMENT. 4-14. Jr.00 and to REIMBURSE the amounts received from private complainants. and sentencing her to pay a fine in the amount of P100. SO ORDERED. pp. 8. aIAcCH The elements of the crime of illegal recruitment in large scale are the following: 1) the accused undertook a recruitment activity defined under Article 13 (b) or any prohibited practice under Article 34 of the Labor Code. Ibid. at 119 & 120.. Supra. p.J. 2-3. at 118. 1992. 4. 5. 1992. note 2 at 2. note 2 at 117. 12. Kapunan and Pardo.000. Id. pp. 11. Presided by Judge Romeo F. April 29. concur. February 24.. 25 All the aforementioned elements were proven by the prosecution beyond reasonable doubt. Branch 94. JJ.. is AFFIRMED in toto. TSN. and 3) the accused committed the same against three or more persons individually or as a group. Zamora. . It was established that accused-appellant promised employment to the eight (8) complainants and that she was not authorized or licensed to engage in such activity as certified to by the POEA. Id.. 9. 116. Davide. 2) the accused did not have the license or the authority to lawfully engage in the recruitment and placement of workers. 10. RTC Records. Id.. 1992. note 2 at 122.was sufficiently demonstrated that she promised overseas employment to private complainants.

R. Yabut. COURT OF APPEALS. 232 SCRA 225. Rollo. 304 SCRA 504. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. G.] . Supra. at 9. 20. 14. 16. 2002. Naparan. Pabalan. See People v. HERBOSA. 18. HERBOSA.13. People v. 21.R. COURT OF APPEALS (Fifteenth Division). HERBOSA and ROSEMARIE L. 1992. 22. Comia.] EMMANUEL G. People v. Calonzo. 2002. People v. Mercado. 585 (1996). Id. No. People v. 316 SCRA 237. supra. People v. People v. 119086. 17. Goce.. citing People v. 277 SCRA 391 (1997). SECOND DIVISION [G. 23. August 3. 262 SCRA 574. citing People v. 262 SCRA 534. 119087. Guevarra. 306 SCRA 271. 25. 236 (1994). vs. 15. People v. 236 SCRA 185 (1994). Villafuerte. 119086 & 119087 January 25. 241 SCRA 216 (1995). I n c. note 11. p. 42. 2002 EMMANUEL G. 228 SCRA 489 (1993). ET AL. 225 SCRA 714 (1993). January 25. People v. Supra.. 540 (1996). Sendon. January 25. TSN. 24. Castillon. citing People v. 306 SCRA 111 (1999). Inc.. Bautista. Id. vs. Villas. citing People v. 19. Sendon. at 241. 247 SCRA 780 (1995). 249 (1999). respondents. p. note 8. Nos. note 2. People v. 276 (1999). No. 2. and PROFESSIONAL VIDEO EQUIPMENT a Division of Solid Distributors. [G. note 4 at 2-10. Supra. petitioners. 527 (1999). Supra.R. ET AL.

cannot claim that it exercised due care in the selection and supervision of its employees and that its employees are experienced in their respective trade. Agcaoili Law Offices for petitioners. the Supreme Court affirmed the decision of the Court of Appeals for the return affirmed the decision of the Court of Appeals for the return of the proceeds of the auction sale to Solid Corporation as the said decision became final and executory. HERBOSA. as in the case at bar. — The general rule that only questions of law may be raised on appeal in a petition for review under Rule 45 of the Rules of Court admits of certain exemptions. thus. PVE or respondent Solid Distributors. PVE. According to the Court. vs. PVE filed a notice of appeal and at the same time a motion for reconsideration on the issuance of a writ of execution. REMEDIAL LAW. Such defense may be availed of only where the liability arose from culpa aquiliana and not from culpa contractual. Consequently. the auction sale of certain properties was scheduled by the trial court. But still. On the other hand. a division of Solid Distributors. ACTIONS. however. moral damages. then filed an injunction with the Court of Appeals to restrain the scheduled auction sale. petitioner spouses filed the instant petition. the trial court ordered the execution of judgment. Dissatisfied by the decision rendered by the Court of Appeals. APPEAL. PVE opposed the motion on the allegation that it failed to receive notice of judgment as the mail matter was posted in a post office box which was not registered in their counsel's name. for private respondents. exemplary damages and attorney's fees. PVE filed a petition for mandamus before the Court of Appeals to compel the trial court to give due course to their appeal. The trial court gave due course to the appeal. The trial court rendered a decision in favor of the petitioner spouses. Inc. Escario. the court ordered the proceeds of the auction sale to be delivered to the corporation. Because of the auction sale. petitioners. EXCEPTIONS. DHEaTS The Supreme Court ordered private respondent PVE or Solid Distributors. to pay petitioner actual damages. respondents. The petition PVE was granted. ONLY QUESTIONS OF LAW MAY BE RAISED. namely: a) when the conclusion is a finding . Complications arose when the petitioners moved for the execution of judgment for failure of PVE to file a motion for reconsideration.EMMANUEL G. A summary judgment was rendered in favor of Solid Corporation. petitioner spouses appealed the decision to the Supreme Court. SYNOPSIS Petitioner spouses sued Professional Video Equipment (PVE). SYLLABUS 1. The restraining order issued by the appellate court came too late as the subject properties were already sold to the highest bidder. Inc. hence. The case stemmed from the failure of PVE to record on video the petitioner's wedding celebration. HERBOSA and ROSEMARIE L. The Court of Appeals rendered a consolidated decision. the trial court recalled the appeal. and SOLID CORPORATION. Solid Corporation filed a complaint with the Regional Trial Court for damages against petitioners and the sheriff alleging that it was the true owner of the properties levied upon and sold at public auction. Fidel B. COURT OF APPEALS (Fifteenth Division). Inc. Meanwhile. for breach of contract with damages. Jr.

moral damages are recoverable for breach of contract where the breach was wanton.. reckless.00) is also proper in accordance with Article 2208 of the Civil Code. MOTION FOR SUMMARY JUDGMENT. 4. ID. g) when the findings of the Court of Appeals are contrary to those of the trial court. However. CLAIM THEREFORE MUST BE INDEPENDENTLY IDENTIFIED AND JUSTIFIED. DAMAGES. APPLICATION IN CASE AT BAR. there is no defense to the action or claim which is clearly meritorious. In this connection. ID. in making its findings. 2. The wanton and reckless failure and neglect to timely check and remedy the video tape recorder by the PVE crew who are all employees of respondent Solid Distributors.00) as moral damages. moral and exemplary damages as well as attorney's fees must each be independently identified and justified.423. CIVIL LAW. or conjectures. affidavits and exhibits in support of the motion are sufficient to overcome the opposing papers and to justify the finding that. petitioners are entitled to actual damages at least in the amount of One Thousand Four Hundred Twenty-Three Pesos (P1. the petitioners who suffered mental anguish and tortured feelings thereby. aDSHCc 5. MORAL DAMAGES. to comply with its obligation under the video tape coverage contract. are liable for damages.000. WHEN RECOVERABLE FOR BREACH OF CONTRACT. ID. — The test for propriety of a motion for summary judgment is whether the pleadings.00) is justified. ACTIONS." For failure of PVE. Inc. would justify a different conclusion. went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee. EXEMPLARY DAMAGES. f) when the Court of Appeals. surmises.000. — The award of exemplary damages which is hereby fixed in the amount of Forty Thousand Pesos (P40. and j) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which. ECSaAc 3. WHEN JUSTIFIED. ID. as a matter of law. . negligence or delay.grounded entirely on speculations. b) when the inference made is manifestly mistaken.000. malicious or in bad faith. e) when the findings of fact are conflicting. the award of attorney's fees in the amount of Ten Thousand Pesos (P10. and those who in any manner contravene the tenor thereof.. — It is basic that the claim for actual. under the premises. are entitled to an award of One Hundred Thousand Pesos (P100. moral damages cannot be recovered in an action for breach of contract because such an action is not among those expressly mentioned in Article 2219 of the New Civil Code. a division of respondent solid Distributors. WHEN PROPER. i) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record. — Ordinarily. Additionally. Inc. to serve as a warning to all entities engaged in the same business to observe good faith and due diligence in the fulfillment of their contractual obligations. h) when the findings of fact are conclusions without citation of specific evidence on which they are based. indicates a malicious breach of contract and gross negligence on the part of said respondent in the discharge of its contractual obligations. oppressive or abusive. Article 1170 of the New Civil Code provides that "those who in the performance of their obligations are guilty of fraud.. d) when the judgment is based on a misapprehension of facts. c) where there is a grave abuse of discretion. or impossible..00) representing their downpayment in that contract. absurd. Consequently.. if properly considered. REMEDIAL LAW.

CV Nos. docketed as Civil Case No. 1983 in favor of the petitioners. J p: This is a Petition for Review on Certiorari of the decision 1 of the Court of Appeals in CA-G. 1983 filed a petition for relief from judgment 10 under Rule 38 of the Rules of Court essentially alleging that it failed to receive notice of the said judgment sought to be executed and that said failure was due to fraud and accident when the mail matter was posted in a post office box which was not registered in the name of PVE's former counsel.000. 1995 which denied the subsequent motion for reconsideration.. moral and exemplary damages including attorney's fees. the Court hereby renders judgment.00. Complications arose when the petitioners moved for execution on June 23. the mailing to its former counsel a copy of the decision by registered mail. 1982 petitioner spouses sued Professional Video Equipment (PVE for brevity).000. The facts show that on January 25. P10.00 for attorney's fees and to pay the costs of these proceedings. 8 PVE opposed the motion. 15346 and 15093 promulgated on October 20. the counterclaim is hereby DISMISSED. 9 and on July 27. the dispositive portion of which reads: FOR ALL THE FOREGOING CONSIDERATIONS. Inc. ordering defendant to pay the plaintiffs actual. The case stemmed from the failure of PVE to record on video the petitioners' wedding celebration allegedly due to the gross negligence of its crew as well as the lack of supervision on the part of the general manager of the PVE. as petitioners alleged. After trial the lower court rendered a decision 7 on January 3. R-82-4389. For insufficiency of evidence. SO ORDERED. . Branch 39.R. moral and exemplary damages in the amount of P100.DECISION DE LEON. 3 respectively. JR.. 6 PVE claimed that it had diligently supervised its VTR crew in the video recording of petitioners' wedding and reception and that its crew acted in good faith and with due care and proper diligence of a good father of a family. Petitioners also alleged that said failure on the part of PVE to perform its obligation caused deep disappointment. anxiety and an irreparable break in the continuity of an established family tradition of recording by film or slide historical and momentous family events especially wedding celebrations and for which they were entitled to be paid actual. In its Answer. R-83-21786. 1983 of the above judgment for failure of PVE to file a motion for reconsideration despite. 1994 which reversed the decision of the trial court in Civil Case No. R-82-4389 2 while affirming in toto the decision of the trial court in Civil Case No. a division of private respondent Solid Distributors. for breach of contract with damages 5 with the Regional Trial Court of Manila. and the resolution 4 promulgated on February 7.

that the levy on execution and the subsequent auction sale were illegal. SP No.000. Inc.00) which were levied upon and subsequently sold at public auction on December 8. Meanwhile.. a sister company of Solid Corporation. PVE filed a notice of appeal 12 from the order of November 10. The trial court gave due course to PVE's appeal 14 but it took no action on the motion for reconsideration of the order.R. 1983.000. Branch 54. officers and principal stockholders. the trial court denied the petition for relief from judgment and ordered the issuance of a writ of execution. petitioners filed an Answer 19 specifically denying that Solid Corporation was the owner of the personal properties levied upon and subsequently sold at public auction on December 8. Although a temporary restraining order was issued by the appellate court. 03470.R. the personal properties which had been levied upon were sold to Atty.00). 1984. They claimed that the showroom and offices located at 1000 J. Manila where the subject personal properties were then on display were owned and operated by respondent Solid Distributors.R. 1983.R. 02155 and AC-G. to restrain the scheduled auction sale. docketed as AC-G.000. the Court of Appeals rendered a consolidated decision 20 in AC-G. SP No. to compel the respondent trial court to give due course to its appeal. 1983. On January 18. As a result. 1983. 1983. 1983. 15 In view of the auction sale held on December 8. moral damages in the sum of One Million Pesos (P1. Ermita. it filed a motion for reconsideration 13 of the said order insofar as it directed the issuance of a writ of execution. 1984 its previous order giving due course to the appeal from its order dated November 10.00). 1983. Bocobo Street corner Kalaw Street. private respondent Solid Corporation. against Deputy Sheriff Angel Borja and the petitioners. On December 3.800. R-82-4389 in favor of the petitioners.In an order 11 dated November 10. thus a writ of execution was issued and an auction sale of certain personal properties levied upon by the deputy sheriff of the trial court was scheduled on December 8. R-83-21786. 1983 PVE filed a petition for injunction with the Court of Appeals. In addition. Santiago Gabionza. the same was served one hour late. 03470. SP No. as the highest bidder. Consequently. and that both corporations had interlocking directors. 02155. SP No.000. at 4:30 o'clock in the afternoon on the day of the auction sale on December 8.800. Jr. Solid Corporation essentially alleged in its complaint that it was the true owner of the electronic appliances valued at One Hundred Thirty Nine Thousand Eight Hundred Pesos (P139. filed a complaint for damages 18 with the Regional Trial Court of Manila. 1983 for the satisfaction of the judgment in Civil Case No. the dispositive portion of which reads: . exemplary damages in the sum of One Million Pesos (P1..000. Inc. the trial court recalled 16 on May 10. on December 13. and that it suffered actual and compensatory damages in the sum of One Hundred Thirty Nine Thousand Eight Hundred Pesos (P139. 1983. The action taken by the trial court prompted PVE to file a separate petition for mandamus 17 with the Court of Appeals.00) and attorney's fees of Two Hundred Thousand Pesos (P200. 1984. docketed as AC-G. On September 6.00). docketed as Civil Case No.

00). as the proceeds of the sale of plaintiffs property. we make no special pronouncement as to costs in this instance." The Court of Appeals denied the motion for reconsideration filed by the petitioner spouses on November 14. pesos. 23 in CA-G. Forthwith.(00) as the proceeds of the sale of plaintiff's properties and attorney's fees of P10. the trial court granted on June 23. Inc. and (2) the respondent court is hereby ordered to give due course to the petitioner's appeal in Civil Case No. plus costs. SO ORDERED. is not a party in the aforesaid Court of Appeals' cases.R.R.R. R-83-21786. On October 20. and. The appeal taken by the petitioner spouses to the Court of Appeals of the said Decision of the trial court in Civil Case No. 1987 the subsequent motion of herein respondent Solid Corporation for summary judgment in Civil Case No. pesos. SO ORDERED. The Court sentences defendants Emmanuel G. accordingly.000. Herbosa to deliver to the plaintiff the amount of P139. 1994 for having been allegedly filed out of time. 69008-09. 1984 for lack of merit. DISMISSING plaintiff's complaint and defendant's counterclaim. CV Nos.800. plus costs. the judgment therein does not bind the defendant and therefore the case as against it is hereby dismissed. respectively docketed as CA-G. and Ten Thousand (P10. docketed as G. R-82-4389.WHEREFORE. but which we denied in a resolution dated December 17. ordering the private defendants Emmanuel G.000. 15346. In both cases. 1988. the Court renders judgment: (1) In CA-G. 15093. AFFIRMING in toto the decision appealed from.R. The dispositive portion of the decision 21 of the trial court reads: WHEREFORE. Herbosa to pay plaintiff Solid Corporation the amount of One Hundred Thirty Nine Thousand Eight Hundred (P139. 1994 the Court of Appeals rendered its consolidated Decision.R. 137541. CV No. CV Nos. CV No. REVERSING the appealed decision.. Nos. Herbosa and Rosemarie L.800. Costs against the private respondents. R-83-21786 and the earlier appeal filed by respondent Solid Distributors. were ordered consolidated by the appellate court in its Resolution 22 dated February 23. the petition for injunction and mandamus are GRANTED and (1) the sheriff's sale is nullified and the respondents Emmanuel and Rosemarie Herbosa are ordered to deliver the proceeds of the sale to the Solid Corporation. summary judgment is hereby rendered in favor of the plaintiff. Petitioners appealed the above judgment of the appellate court to this Court through a petition for review on certiorari. Inc. 24 . in Civil Case No.00). Herbosa and Rosemarie L.00. as attorney's fees. the dispositive portion of which reads: "WHEREFORE. (2) In CA-G. Inc. 15093 and 15346. Considering that the defendant First Integrated Bonding Co. 15093 and 15346.

Inc. does not negate the finding of the lower court that breach of contract due to gross negligence on the part of PVE was duly proven by the petitioners. NLRC. AND EXEMPLARY DAMAGES IN THE AMOUNT OF P100.). Petitioners contend that their motion for reconsideration was filed within the reglementary period inasmuch as the ruling in the case of Imperial Victory Shipping Agency v. II THE COURT OF APPEALS ERRED WHEN.R. IN CA-G. NLRC 26 cited in the questioned resolution of the appellate court dated February 7. IV THE COURT OF APPEALS ALSO ERRED WHEN. 1995 was superseded by the decision of the Supreme Court in the case of Ramon Aquino v.R. IT ERRONEOUSLY AFFIRMED. IN FAVOR OF THE SPOUSES HERBOSA FOR HAVING ALLEGEDLY NO BASIS BOTH IN FACT AND IN LAW. Due to the presence of gross negligence on the part of PVE (a division of respondent Solid Distributors. 27 They also contend that the ruling of the Court of Appeals in CA-G.000. moral and exemplary damages including attorney's fees and costs. 15346.00 AS WELL AS ATTORNEY'S FEES IN THE AMOUNT OF P10. . IT REVERSED THE FINDING OF THE TRIAL COURT THAT PRIVATE RESPONDENT "PVE" IS GUILTY OF GROSS NEGLIGENCE IN THE PERFORMANCE OF ITS OBLIGATION BY SOLELY RELYING ON THE TRIAL COURT'S STATEMENT THAT PRIVATE RESPONDENT "PVE" FAILED TO PRESENT AN IOTA OF PROOF THAT IT EXERCISED EXTRAORDINARY CARE IN THE PROPER MAINTENANCE OF ITS EQUIPMENT USED IN THE COVERAGE. MORAL. CV NO. petitioner spouses filed the instant petition 25 raising the following assignment of errors: I THE COURT OF APPEALS ERRED IN HOLDING THAT THE PETITIONERS' MOTION FOR RECONSIDERATION DATED NOVEMBER 11. 15093. 02155 AND 03470. 15346 to the effect that the degree of diligence required under the contract was that of diligence of a good father of a family. III THE COURT OF APPEALS ERRED WHEN. and not extraordinary diligence as opined by the trial court. IN CA-G. THE DECISION OF THE TRIAL COURT WHICH RENDERED SUMMARY JUDGMENT IN THE ENTIRE CASE NOTWITHSTANDING THE APPARENT EXISTENCE OF A GENUINE ISSUE OF FACT CONCERNING THE OWNERSHIP OF PERSONAL PROPERTY LEVIED UPON WHICH ISSUE CLEARLY REMAINS UNAFFECTED BY THE DECISION OF THE COURT OF APPEALS IN CA-G. NLRC (200 SCRA 178) WHICH IS CLEARLY INAPPLICABLE IN THE CASE AT BAR. petitioners are entitled to an award of actual. CV NO.R. IN CA-G. 15346. 1994 WAS FILED OUT OF TIME WHEN IT RELIED ON THE CASE OF IMPERIAL VICTORY SHIPPING AGENCY vs. WITHOUT ANY LAWFUL BASIS.R.000. CV NO.Dissatisfied. SP NOS. IT TOTALLY SET ASIDE THE TRIAL COURT'S AWARD OF ACTUAL.R.00 PLUS COSTS OF SUIT. CV No.

1984 which was affirmed by the Supreme Court in a resolution dated December 17. which is the law of the case. Gerochi. and Solid Corporation invoke the ruling in the case of Azores v. SP Nos. Whether or not the petitioners are entitled to award of damages arising from breach of contract of service in Civil Case No. which was a Saturday. 1994. the Court of Appeals ruled that the petitioners had only until November 12. The said decision. In denying petitioners' motion for reconsideration filed on November 14. 2. NT and SA v.Additionally. Inc. CV Nos. 15346 and 15093 inasmuch as they had been furnished notice of its said decision on October 28. in effect. on appeal. raised questions of fact which cannot be done by the Supreme Court. there appears to be no basis for an award of damages contrary to the contention of the petitioners in the third assignment of error. R-82-4389. Whether or not the motion for reconsideration filed by the petitioners on November 14. R-83-21786 was improper since the question of ownership of the levied personal properties to satisfy the judgment in Civil Case No. Hence. within which to file a motion for reconsideration of its Decision dated October 20. as it is not a trier of facts. 29 and Imperial Victory Shipping Agency v. The appellate court cited the case of Imperial Victory Shipping where it was held that "if the last day to appeal fell on a Saturday. 02155 and 03470 which merely declared that the execution of the said judgment was void for being premature.. 02155 and 03470 promulgated on September 6. 1994. the act was still due on that day and not on the next succeeding business day. After having determined by the Court of Appeals that no cause of action exists against private respondent PVE.. et al. Lastly. NLRC 30 such that if the last day to appeal fell on a Saturday. private respondents maintain that summary judgment was properly rendered in Civil Case No.R. 3." . While private respondents concede that rules of procedure are intended to promote substantial justice. they emphasized that the perfection of appeal in the manner and within the period permitted by law is not only mandatory but jurisdictional. SP Nos. 1984. mandates that the petitioners were to deliver the proceeds of the sheriff's auction sale to herein private respondent Solid Corporation.R. Private respondents also invoke the well-settled rule that only questions of law may be entertained on appeal. R83-21786 in view of the Decision of the Court of Appeals in AC-G. On the other hand. petitioners contend that the summary judgment rendered by the trial court in Civil Case No. Jr. R-8321786 in favor of respondent Solid Corporation. 1994 in CA-G. By questioning in the instant petition public respondent appellate court's appreciation of the evidence on the issue of diligence. petitioners. R-82-4389 remains unaffected by the decision of the Court of Appeals in AC-G. the act was still due on that day. both private respondents Solid Distributors. the issues are: 1.R. 1994. SEC 28 which affirmed our ruling in the cases of Bank of America. 1994 was filed beyond the reglementary period. Whether or not the trial court correctly rendered summary judgment in Civil Case No.

this Court had issued an order directing court offices closed on Saturdays so that when the last day for filing of a pleading should fall on a Saturday. b) when the inference made is manifestly mistaken. Manila. Vedastro Sulit. respondent appellate court should not have denied outright petitioners' motion for reconsideration since the last day for the filing thereof fell on November 12. Del Pilar Street. thus necessitating further review of the evidence by this Court. Pursuant to the contract 33 PVE undertook to record on betamax format the wedding celebration of the petitioners starting with the pre-departure activities of the bride at her residence. e) when the findings of fact are conflicting. Ermita. Consequently. Petitioners paid PVE the amount of One Thousand Four Hundred Twenty-Three Pesos (P1. that even in the cases 31 invoked by the private respondents. we have already made pronouncements therein that. respondent PVE or respondent Solid Distributors. in making its findings.) for the betamax coverage of their then forthcoming wedding celebration scheduled in the morning of October 11. would justify a different conclusion. c) where there is a grave abuse of discretion.423. 1980 at around 6:30 o'clock in the morning 34 the PVE crew composed of the cameraman. arrived at the residence of the bride at 1694 M. followed by the wedding ceremony and the reception which had an approximate playback time of sixty (60) to ninety (90) minutes. Accordingly. Michael Rodriguez. i) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record. Inc. VTR (video tape recorder) operator.It should be noted. went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee. 1980. 32 Notably. 1994. as early as January 23. f) when the Court of Appeals. or conjectures. ACTIHa Likewise. H. 1993. surmises.00) as downpayment while the balance of One Thousand Five Hundred Thirty-Two Pesos (P1. R-82-4389 which is an action for breach of contract and damages and the appeal therefrom. provided the latter is not a holiday. and the driver and lightman. 1994 came after the issuance of our said order. They recorded the pre-departure activities of the bride before leaving for the Malate Church . Significantly. Felix Baguio. the motion for reconsideration which was filed by the petitioners on November 14. namely: a) when the conclusion is a finding grounded entirely on speculations. may not validly thwart the petitioners' instant petition for review of the decision of the Court of Appeals in CA-G. Inc. 15346 by arguing that the principal issue as to the existence of negligence involves a question of fact which cannot be raised on appeal. when the Receiving and Docket Section and the Cashier Section of the Court of Appeals were closed. It appears from the evidence adduced that the petitioner spouses contracted the services of PVE (a division of respondent Solid Distributors. absurd.R.00) was to be paid upon receipt of the finished video tape.532. d) when the judgment is based on a misapprehension of facts. the Court of Appeals and the trial court arrived at conflicting findings of fact in Civil Case No. g) when the findings of the Court of Appeals are contrary to those of the trial court. or impossible. and j) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which. if properly considered. the same should be done on the following Monday. on October 11. CV No. which was a Saturday. h) when the findings of fact are conclusions without citation of specific evidence on which they are based. however. The general rule that only questions of law may be raised on appeal in a petition for review under Rule 45 of the Rules of Court admits of certain exceptions.

In the instant case. 1980. that the alleged malfunctioning of the video tape recorder occurred at the beginning of the video coverage at the residence of the bride. in order that fortuitous event may exempt PVE or respondent Solid Distributors. a video tape production through photographs was not going to compensate for the betamax or film coverage of their actual wedding celebration and that there could be no event of similar significance insofar as petitioners are concerned. said respondent failed to substantiate its bare allegation by presenting in evidence the alleged defective transistor before the trial court. Manila where the wedding ceremonies were held at 9:00 o'clock in the morning. it is necessary that it be free from negligence. PVE was admittedly furnished earlier by the petitioners with a copy of the script 39 of the scenes to be recorded so that it could prepare and organize its contracted task. However. On October 19. PVE. Eric Sycip. 1980 PVE general manager. preferably at the beginning. Inc. Instead. At any rate. Manila. Malate. studio manager of PVE. the crew proceeded to the Manila Hotel in Intramuros. Having invoked fortuitous event. it was incumbent upon said respondent to adduce sufficient and convincing proof to establish its defense. Ben Zarate. Thereafter. PVE studio manager Ben Zarate even testified that ordinarily. The PVE crew miserably failed to detect the defect in the video tape recorder and that they discovered the same rather too late after the wedding reception at the Manila Hotel. On October 13. the standard playback test to monitor the functioning of the video tape recorder was required at every opportunity. There was more than sufficient time for the PVE crew to check the video tape recorder for the reason that they arrived at the bride's residence at 6:30 o'clock in the morning while they departed for the wedding ceremonies at the Malate Church at 9:00 o'clock in the morning. Eric Sycip sent a check 36 representing the amount of the downpayment which the petitioners did not accept. Deeply aggrieved. whom it never presented to testify during the trial of the case. a playback test on three (3) occasions. 41 A review of the records however. it presented another component 37 of the same kind. from liability. Inc. however.along Mabini Street. informed the petitioners that the videotape coverage of their wedding celebration was damaged due to mechanical defect in their equipment. a division of respondent Solid Distributors. allegedly conducted a playback test at the residence of the bride and that the next playback test was conducted after the wedding reception at the Manila Hotel where the defect in the video tape recorder was allegedly discovered for the first time. the petitioners rejected both of the proposed alternatives since. disclaimed any liability for the damaged videotape by invoking force majeure or fortuitous event and asserted that a defective transistor caused the breakdown in its video tape recorder. Besides. 40 Based on the investigation allegedly conducted by its officers. confirmed the damage and proposed to do a video tape production of their wedding celebration through photographs or a video coverage of any event of similar significance. claimed that its crew. raised doubts as to whether . according to them. PVE or respondent Solid Distributors. There appeared to be no valid reason why the alleged defect in the video tape recorder had gone undetected. 35 In addition. where the wedding reception followed at 10:30 o'clock in the morning.. however. Inc. middle and towards the end portions of the video coverage would have been sufficient. 38 The record shows.

the picture is clear as shown on the television. lasted for only two and a half minutes? Atty. lasting only for two and one half (2 1/2) minutes. This strongly suggests that any alleged defect in the video tape recorder could have easily been detected by the PVE crew at the residence of the bride had a sufficient playback test been conducted therein prior to their departure for the wedding ceremonies at the Malate Church. del Pilar and what is in focus is a residence No. 42 . the audio was working. the residence of the bride. The pertinent portion of the stenographic notes of the trial is reproduced. Interpreter: Then. H. . it has faded into complete non-appearance of the subject being taken. A very minimal portion. it is still visible that the screen is clear. Atty. . What is shown on screen now is that she was being made up by her artist and hairdresser in preparation for the forthcoming wedding. there appears to be snatches of the bride's face and again. Rosemarie de Leon.the crew actually conducted a playback test at the residence of the bride. 1694. the cassette is blurred and you cannot see any visible figure on the cassette tape. Atty. She is wearing an electric blue dressing gown. Court: It would seem that at this juncture. Agcaoili: And that from this point. of the pre-departure activities at the residence of the bride had been recorded while the rest of the video tape was damaged. there is complete darkness. (V)iew on (sic) the M. At this juncture. then suddenly. May we note the ringing sound apparently a telephone ringing which will indicate that the audio pick-up is being taken or at least. After four minutes of complete blurred. Mendoza: Agreed. your Honor. What is shown is the facade of the De Leon residence. They are shown to be made-up by the artist. no pictures registered after the few snatches of the bride. next in focus is apparently a bedroom of the bride. Court: In other words. and snatches on the screen which has a span of about . thus: Interpreter: We are about to witness the video coverage of the Herbosa Wedding on the television set. Agcaoili: May we stipulate that the good tape your Honor. the other members of the entourage is also in focus.

Ermita. 43 However. It is basic that the claim for actual. Manila. Inc. Manila. In the case of Go v.The misfortune that befell the then newly-wed couple. moral and exemplary damages as well as attorney's fees must each be independently identified and justified. oppressive or abusive. an occasion worth reliving in the succeeding years. indicates a malicious breach of contract and gross negligence on the part of said respondent in the discharge of its contractual obligations. Consequently.423. malicious or in bad faith. did not. Inc. The defect could have been detected earlier and remedial measures could have been made to ensure full video tape coverage of the petitioners' wedding celebration. may be availed of only where the liability arises from culpa aquilana and not from culpa contractual such as in the case at bar. we reiterate the following pronouncements therein where we also awarded moral damages on account of a malicious breach of contract similar to the case at bar. 46 The wanton and reckless failure and neglect to timely check and remedy the video tape recorder by the PVE crew who are all employees of respondent Solid Distributors.00) as moral damages. Inc. moral damages cannot be recovered in an action for breach of contract because such an action is not among those expressly mentioned in Article 2219 45 of the New Civil Code.000. are entitled to an award of One Hundred Thousand Pesos (P100. to wit: . reckless. But PVE or respondent Solid Distributors.. to comply with its obligation under the video tape coverage contract. 44 In this connection. a division of respondent Solid Distributors. as provided in the last paragraph of Article 2180 of the New Civil Code. Ordinarily. However. The failure to record on videotape the wedding celebration of the petitioners constitutes malicious breach of contract as well as gross negligence on the part of respondent Solid Distributors. Inc. on one hand. the award of damages to the petitioners cannot be lumped together as was done by the trial court. negligence or delay. Article 1170 of the New Civil Code provides that "those who in the performance of their obligations are guilty of fraud. cannot seek refuge under Article 2180 of the New Civil Code by claiming that it exercised due care in the selection and supervision of its employees and that its employees are experienced in their respective trade. Inc.00) representing their downpayment in that contract. Bocobo corner Kalaw Streets. the petitioners who suffered mental anguish and tortured feelings thereby. PVE or respondent Solid Distributors." For failure of PVE. and the locations of the required video tape coverage at the residence of the bride at M. petitioners herein. and those who in any manner contravene the tenor thereof. That defense. the importance of a wedding ceremony cannot be underestimated as it is the matrix of the family and. to check any possible mechanical defect in the video tape recorder. at 1000 J. Court of Appeals 47 we emphasized that "(i)n our society. petitioners are entitled to actual damages at least in the amount of One Thousand Four Hundred Twenty-Three Pesos (P1. Inc. H. moral damages are recoverable for breach of contract where the breach was wanton. Del Pilar Street." Further. Inc. Ermita. are liable for damages. We take judicial notice of the short distance between the office of PVE or respondent Solid Distributors. the Malate Church and the Manila Hotel. could have been avoided by a timely exercise of minimum prudence by the crew of PVE who are all employees of respondent Solid Distributors. therefore.

The award of exemplary damages which is hereby fixed in the amount of Forty Thousand Pesos (P40.000. 119087. did not err in sustaining the summary judgment rendered by the trial court in Civil Case No. Mendoza. the appealed decision of the Court of Appeals in CA-G. The test for propriety of a motion for summary judgment is whether the pleadings.R.. CV No. for injunction and mandamus. in G. Bellosillo. is ordered to pay the petitioners One Thousand Four Hundred Twenty-Three Pesos (P1. . judgment is hereby rendered as follows: (1) In G. 02155 and 03470. under the premises. and Ten Thousand Pesos (P10. Anent the third issue.423.00 . as a matter of law.00) as moral damages. JJ. the award of attorney's fees in the amount of Ten Thousand Pesos (P10. 15346 is REVERSED.Considering the sentimental value of the tapes and the fact that the event therein recorded — a wedding which in our culture is a significant milestone to be cherished and remembered — could no longer be reenacted and was lost forever. we hold that the Court of Appeals. specifically commands herein petitioners to "deliver the proceeds of the (auction) sale to Solid Corporation" due to the nullity of the sheriff's sale on December 8. SP Nos. affidavits and exhibits in support of the motion are sufficient to overcome the opposing papers and to justify the finding that.000. in CA-G. to serve as a warning to all entities engaged in the same business to observe good faith and due diligence in the fulfillment of their contractual obligations. One Hundred Thousand Pesos (P100. Private respondent Solid Distributors.00) by way of attorney's fees. there is no defense to the action or claim which is clearly meritorious. No. WHEREFORE. denied on December 17.00) as exemplary damages. 119086.000. 49 The decision of the Court of Appeals in AC G. SO ORDERED. in compensation for the mental anguish. CV No. 1983 for being premature. 69008 and 69009. Additionally. tortured feelings. R-83-21786.R.R.R. The said decision of the Court of Appeals became final and executory after this Court. concur. sleepless nights and humiliation that the appellees suffered and which under the circumstances could be awarded as allowed under Articles 2271 and 2218 of the Civil Code. 15093 is AFFIRMED. CV No. No pronouncement as to costs. and (2) In G. . 1984 the appeal therefrom instituted by herein petitioners.R.000. Quisumbing and Buena. 15346. Footnotes . Forty Thousand Pesos (P40.000.R. the appealed decision of the Court of Appeals in CA-G.00) as actual damages. No. Nos. Inc. the trial court was correct in awarding the appellees moral damages albeit in the amount of P75.00) is justified.000.R.00) is also proper in accordance with Article 2208 48 of the Civil Code.

No. G. pp. 143-151. Original Records. pp. p. 119086. G. 119086. G. 119086. 119086. Rollo. 31-37. Original Records. pp. No. See Note No. 10. G. 4. 285-289. 195. Original Records. 2. 3. 119086. 119087. No. 20. 119086. Verzola. 135-137. 5.R. 14. G. No. 119087. 4. Original Records. 119086. 23. 121-128. 119086. 9. Annex "A". G. Rollo. G. pp. No. pp. Torres. pp. G. 212-218.R. 24. 190-191. (retired Associate Justice of the Supreme Court) and Eubulo G.R. 208. 119086.R.R. Original Records. 12. 27-29. Original Records. 14-21. 2. G. No.R. See Note No. 22. Original Records. 178-179. No.R. Annex "B". pp. 6. 18. No.R. 130-132. 1-7. 19. 119086. G. 119086. No. G. No.R. 1-6.R. 11. Original Records.R. Original Records.R.R. p.A. pp. G. 165-166. G. 16. No. pp. 200-203. See Note No. 3. Rollo. 53-59. 7. No. pp. . 119086. pp. G. G. Original Records. 119087.R. 8. Original Records. pp. Original Records. Original Records.1. Original Records. 119086.R. G. 21. See Note No. 119086. 1. Original Records. No. 13. No. pp. Pardo (now Associate Justice of the Supreme Court) and concurred in by Associate Justices Justo P. Jr. No. p. Original Records. 206. No. 12.R. pp. G. Penned by then Associate Justice Bernardo P. 15. C. pp. pp. p.R. Original Records. 17. No.

28. 1981. Tan Chiong Sian v. Also Exhibit "1" for the defendant. 275 SCRA 267. T. S. Bank of America. Moral damages may be recovered in the following and analogous cases: . Manila Electric Co. 123547. Rollo. T. 33. 43.R. Rollo. pp. Article 2219 of the Civil Code provides: Art. 152. 662 (1924). 252 SCRA 387. 280 (1997). 710 (1920). N. 244 SCRA 713. Manila Railroad Co. 15 (1994). 900. Smith. 15 (1994). Per Manifestation dated May 9. 657. Solid Homes. 42. 82 (1993). Llenado. Court of Appeals. People v. S. Jr. 183 (1991). pp. 32. 39. v. Inchausti and Co. 18-19. 75-77. Martinez v. NT&SA v. 41. 261 SCRA 493. Gerochi. TSN dated June 26. 34. 230 SCRA 9. pp.. Del Pardo v. 504 (1996). 875. Floro v. Exhibit "6". N. 904 (1929). 17-18. 14-16. N. 31. 40. 1981... Exhibit "D-2". 392 (1996). SEC. 2-23. 2001. 40 Phil. 3-5. pp. No. Court of Appeals. 30. 27. 252 SCRA 387. 889-890 (1918). 1981. Manila Electric Railroad and Light Co. 52 Phil. Compania Transatlantica. pp. TSN dated June 26. 1981. 38. 45 Phil. 226 SCRA 76. 36. Exhibit "A". 720 (1995). Exhibit "C". May 21. 38 Phil. G. Castillo. 2219. S. Inc. Azores v.. T. 45. v. Supra. De Guia v. 16-18. 166 (1912). dated June 25. 44. 26.25. 200 SCRA 178. 22 Phil. 35. 392 (1996). 230 SCRA 9. pp. 37. 1981. 29. 1996. pp. Lasam v. 706. dated May 14. dated June 5.

COMMISSION ON AUDIT EN BANC [G. Acts and actions referred to in articles 21. 136. 1995.R. 47. 46. 147248-49. COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE PHILIPPINES. Nos. Court of Appeals. Vol. 48. abduction. 656. Nos. Illegal search. In the absence of stipulation. Illegal or arbitrary detention or arrest.] . attorney's fees and expenses of litigation. Malicious prosecution. V. 28. 147248-49 January 23. When exemplary damages are awarded. Seduction. or other lascivious acts. xxx xxx Sugay v. 198 SCRA 349. 2002. Acts mentioned in Article 309. 2002 BAYBAY WATER DISTRICT vs. 138-139 (1997). 352 (1991). C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. Quasi-delicts causing physical injuries. Adultery or concubinage.R.1) 2) 3) 4) 5) 6) 7) 8) 9) 10) A criminal offense resulting in physical injuries. 32. slander or any other form of defamation. cannot be recovered. 27. 339 Phil. TOLENTINO. rape. Libel. p. 29. I n c. January 23. except: 1) xxx 49. 30. G. Article 2208 of the Civil Code provides: Art. 34 and 35. other than judicial costs. 2208. 26.

ERLINDA MENDEZ. Petitioners further invoked management prerogative to justify the grant of allowances and other benefits to both the board of directors of BWD and its officers and employees. In the present case. HTCESI Among others. with the approval of the Local Water Utilities Administration (LWUA). Thus. With respect to the officers and employees of BWD. CANETE.D. Thus. it has been held that the terms and conditions of employment of government employees are governed by law. NILO RAMADA. vs. No.BAYBAY WATER DISTRICT. SYNOPSIS Before the Supreme Court is a special civil action for certiorari seeking the annulment of the decision of the Commission on Audit dated September 21. to directors of water districts. the cash gift granted . petitioners. they acquired a vested right to these benefits of which they cannot now be deprived without violating their property rights and the rule on nondiminution of benefits. 198. BWD Board of Directors. and other similarly situated Officers and Board Members of BWD. and to their officers and employees and that they continued doing so after the promulgation of the decision of the case. FERNANDEZ. the BWD board of directors are not employees of BWD. The same rule applied to officers and employees of BWD. Anent petitioners' claim that the disallowance undermines management prerogative to grant additional benefits. of the payment of various benefits to members of the board of directors and officers of petitioner Baybay Water District (BWD) in Baybay. 2000 and its Resolution dated January 30. as determined by the LWUA pursuant to P. DOMINGO COTIAMCO. Their function. implying that their relationship to the water district is more fiduciary than that of employer-employee. no matter how long continued. VIII. the Court held that the erroneous application and enforcement of the law by public officials does not estop the Government from making a subsequent correction of such errors. is limited to policy-making. Government Corporate Counsel for petitioners. General Manager. SAMUEL O. No. as defined by P. P. water districts have already been granting additional benefits to members of the board of directors. Civil Service Commission (201 SCRA 593 (1991) that water districts are government-owned and controlled corporations subject to the jurisdiction of the COA. the exercise of management prerogative by government corporations is limited by the provisions of the law applicable to them. 2001. affirming the disallowance by the Director. More specifically. COMMISSION ON AUDIT. represented by ERNESTO D.D. In denying the instant petition for certiorari. the law must be enforced even if it prejudices certain parties due to an error committed by public officials in granting the benefit.D. where there is an express provision of law prohibiting the grant of certain benefits. COA Regional Office No. In this case. Practice. 198 expressly prohibits the grant of compensation other than the payment of per diems. without more. the Court held that the existence of the said right presupposes the existence of an employeremployee relationship. No. the petitioners contended that even before the Court declared in Davao City Water District v. respondent. Leyte. The Solicitor General for respondent. 198. cannot give rise to any vested right if it is contrary to law.

In the same manner.. the disallowance of claims for transportation allowance did not fall under management prerogative as this did not pertain to the power of management to determine the terms and conditions of employment but pertain to whether or not the claims were properly accounted for. No.D. reads: Compensation. 2. No. 198. NLRC. in the same paragraph. which provides that "compensation" means "the basic pay or salary by an employee. TERM "COMPENSATION. SYLLABUS 1. and commonly-accepted meaning." The contention is untenable. 198. are governed by P. The definitions of the term "compensation" in these statutes are for limited purposes only and cannot be deemed to comprehend such other purposes not specifically included in the provisions thereof. P. excluding per diems.— Petitioners. §2(i). as amended by P. WORDS AND PHRASES IN A STATUTE MUST BE GIVEN THEIR NATURAL. By specifying the compensation which a director is entitled to receive and by limiting the amount he/she is allowed to receive in a month. No." CONSTRUED. and similar items for purposes of recognizing taxable income. No. GOVERNS THE COMPENSATION OF MEMBERS OF BOARD OF DIRECTORS OF WATER DISTRICTS. NLRC.D. They cite P. as already stated. PRESIDENTIAL DECREE NO. bonuses. 6686. ID. Under §13 of this Decree. BAYBAY WATER DISTRICT. Trajano. 198. wages. under §32 of the National Internal Revenue Code. ADMINISTRATIVE AGENCY. for each meeting of the board actually attended by him. whose rights to compensation. providing "No director shall receive other compensation" than the amount provided for per diems. per diem is precisely intended to be the compensation of members of board of directors of water districts. ordinary. salaries. ID. and.D. 8291. to support their contention that the prohibition against the payment of compensation other than per diems does not include the payment of allowances and other benefits. words and phrases in a statute must be given their natural. the law quite .A. No. No. commissions. The statutory provision invoked refers to the basis for the computation of employer and employee contributions to the GSIS as well as the benefits to which such employees are entitled. Indeed. pursuant to his employment/appointment. SECTION 13 THEREOF. ADMINISTRATIVE LAW.to the general manager as part of his Christmas bonus was in excess of that authorized by R. — Each director shall receive per diem. overtime pay. as it was contrary to law.D. — As far as the directors of the BWD are concerned. 1479. No. ID. ID.. ORDINARY. 768 and P. No director shall receive other compensation for services to the district. 1146. AND COMMONLY-ACCEPTED MEANING. also invoke the rulings of this Court in Kneebone v. These cases do not apply to this case.. Inc. Any per diem in excess of P50 shall be subject to approval of the Administration. They refer to the exclusion made by this Court of allowances and other benefits from the salaries of employees in the private sector. allowances and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under existing laws. Vengco v.D. and Philippine Duplicators. but no director shall receive per diems in any given month in excess of the equivalent of the total per diems of four meetings in any given month. Petitioners argue that the term "compensation" in the above provision does not include the allowances and per diems which had been disallowed in this case. not to the compensation of members of the board of directors of water districts. It cannot be justified by the exercise of management prerogative. v. to be determined by the board. CONSTRUED. due regard being given to the context in which the words and phrases are used. §13.A. "compensation" includes fees.. Furthermore. as amended by R.

— The function of the board shall be to establish policy. ID. P. rights and privileges are governed by the pertinent provisions of PD 198... in Resolution No. REASON. are deemed excluded from the coverage of the Salary Standardization Law.. ID. ID. and that their powers. SALARY STANDARDIZATION LAW DOES NOT APPLY TO MEMBERS OF THE BOARD OF DIRECTORS OF WATER DISTRICTS. More specifically. entitled "Policy Guidelines on Compensation and Other Benefits to WD Board of Directors. — Furthermore.. No. therefore. No.— R.." It is obvious that the Salary Standardization Law does not apply to petitioners because directors of water districts are in fact limited to policy-making and are prohibited from the management of the districts. 198 on the compensation of members of the board of directors of water districts are inconsistent with the provisions of the Salary Standardization Law. appointive or elective. 6758. ID. 164. where there is an express provision of law prohibiting the grant of certain benefits.. 3. as amended.. s. and as such are deemed excluded from the coverage of RA 6758.. ID.clearly indicates that directors of water districts are authorized to receive only the per diem authorized by law and no other compensation or allowance in whatever form. ID. now existing or hereafter created in the government. 6. 4. The Board shall not engage in the detailed management of the district.D. Functions Limited to Policy-Making.D. not by RA 6758 or Executive Order No. No. s. 198 expressly prohibits .— The erroneous application and enforcement of the law by public officers does not estop the Government from making a subsequent correction of such errors.. No. 94-002 of the DBM-CSC-LWUA-PAWD Oversight Committee states in pertinent part: As the WD Board of Directors' function is limited to policy-making under Sec...A. ID. ID. the law must be enforced even if it prejudices certain parties due to an error committed by public officials in granting the benefit. 18 of Presidential Decree 198.D. ID. including government-owned or controlled corporations and government financial institutions. ID. on full or part-time basis. MEMBERS OF BOARD OF DIRECTORS OF WATER DISTRICTS DO NOT RECEIVE SALARIES BUT PER DIEMS FOR THEIR COMPENSATION. 18. 313. 5. There is. the fact that §§12 and 17 of the Salary Standardization Law speak of allowances as "benefits" paid in addition to the salaries incumbents are presently receiving makes it clear that the law does not refer to the compensation of board of directors of water districts as these directors do not receive salaries but per diems for their compensation. §4 specifically provides that the Salary Standardization Law applies to "positions.— It is noteworthy that even the Local Water Utilities Administration (LWUA). ID. §18 described the functions of members of boards of directors of water districts as follows: Sec. 1995. ID... as such. P. ID. NOT INCONSISTENT WITH PROVISIONS OF SALARY STANDARDIZATION LAW. ID. it is the position of the Oversight Committee that said WD Directors are not to be treated as organic personnel. ID. acknowledges that directors of water districts are not organic personnel and. 198. ID. As already stated.... ERRONEOUS APPLICATION AND ENFORCEMENT OF THE LAW DOES NOT ESTOP THE GOVERNMENT FROM MAKING A SUBSEQUENT CORRECTION OF SUCH ERRORS. Memorandum Circular No. no basis for petitioners' contention that the provisions of P. as amended. PROHIBITS GRANT OF COMPENSATION OTHER THAN PAYMENT OF PER DIEMS." on which petitioners rely for authority to grant themselves additional benefits. 1994.

— Petitioners finally cite the grant of similar benefits to the directors of the National Power Corporation (NAPOCOR) to support their claim that board of directors are entitled to receive allowances and other benefits in addition to per diems. Unlike P. in recognition of their expertise on the specific matters under their jurisdiction. 1360). management prerogative refers to the right of an employer to regulate all aspects of employment. ID. To begin with. working methods. EXISTENCE OF THE RIGHT PRESUPPOSES EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP. 198. regulation regarding transfer of employees. it bears emphasis. the BWD board . there is no basis for such contention. The BWD board of directors' right to compensation.00.A.. such as the freedom to prescribe work assignments. With respect to the board of directors. The comparison drawn by petitioner between the BWD and NAPOCOR has no basis. LABOR AND SOCIAL LEGISLATION. No. as amended by P. is limited to per diems. Petitioners cannot thus claim similar treatment as the board of directors of NAPOCOR. no matter how long continued.— The same rule applies to the officers and employees of the BWD. Militante. FACTUAL FINDINGS OF QUASI-JUDICIAL AGENCIES.500. ID. REMEDIAL LAW. Practice. but they remained unrebutted by petitioners who simply relied on claims based on impairment of vested rights and diminution of benefits. The cash gift granted to Francis H. 9. 8. EVIDENCE. processes to be followed. P. which then applied.. ID.D. The grant of other allowances to NAPOCOR board members in COA Decision No. No.A. findings regarding the duplication of claims for the transportation allowance granted to various employees of the BWD are findings of fact by the Resident Auditor. cannot give rise to any vested right if it is contrary to law. the existence of such right presupposes the existence of an employer-employee relationship. the findings of the Resident Auditor were not only supported by the evidence.. MANAGEMENT PREROGATIVE. . 6686. No. R. EXPLAINED. therefore. without more. No.the grant of compensation other than the payment of per diems.D. BWD Manager. 6395. The Resident Auditor. lay-off and discipline. . subject only to the approval of the Secretary of Energy. to directors of water districts. No.000. as determined by the LWUA pursuant to P. 198.D. are generally accorded respect and even finality by this Court. LABOR STANDARDS. In the present case. It is well-settled that findings of fact of quasi-judicial agencies. The question is whether such claims were properly accounted for and not whether this disallowance will impair vested rights. 99-020 is based on the Revised NAPOCOR Charter (R. Clearly. ID. supervision of their work. GENERALLY ACCORDED RESPECT AND EVEN FINALITY IF SUPPORTED BY SUBSTANTIAL EVIDENCE. MEMBERS OF BOARD OF DIRECTORS OF WATER DISTRICTS CANNOT CLAIM SIMILAR BENEFITS GRANTED TO NAPOCOR BOARD MEMBERS. such as the COA. GRANT OF OTHER ALLOWANCES TO DIRECTORS OF NAPOCOR IS EXPRESSLY PROVIDED FOR IN ITS CHARTER. On the other hand.00 thereof as this amount was in excess of that authorized by law. In the present case.— Petitioners invoke management prerogative to justify the grant of allowances and other benefits to both the board of directors of BWD and its officers and employees. properly disallowed the P500.. provides that all government personnel are entitled to a Christmas bonus of one (1) month basic salary and additional cash gift of P1. BOARD OF DIRECTORS OF THE BWD ARE NOT EMPLOYEES OF BWD.00. the Charter of NAPOCOR expressly granted members of its board of directors the right to receive allowances in addition to their per diems. §13. if supported by substantial evidence. cEaSHC 7. which states: . for the year 1994 amounted to P1. and dismissal and recall of work.

VIII. 10. No.. thus pre-empting the exercise of any discretion by the water districts... Fernandez. Antonio R. ID. Ma. dated September 21. The members of the board. Josette B. ID. Mendez. Nilo T. Medina.A. Love Joy A. The cash gift granted to the general manager as part of his Christmas bonus was in excess of that authorized by R. ID. Palencia. Ramada. of the payment of various benefits to members of the board of directors and officers of petitioner Baybay Water District (BWD) in Baybay. Gorre.. to whom rice allowances had been given. EXERCISE THEREOF BY GOVERNMENT CORPORATIONS ARE LIMITED BY THE PROVISIONS OF THE LAWS APPLICABLE TO THEM. Ernesto L. Militante. It cannot be justified by the exercise of management prerogative as it is contrary to law. petitioners Domingo V. ID. The facts are as follows: In 1996. of the Commission on Audit 1 and its resolution. DISALLOWANCE OF THE DUPLICATION OF CLAIMS FOR TRANSPORTATION ALLOWANCE NOT A MANAGEMENT PREROGATIVE. J p: This is a special civil action for certiorari under Rule 64 of the 1997 Revised Rules of Court for annulment of the decision. Thus. and the other petitioners in this case were also served with similar notices. the right of directors of water districts to the payment of compensation is expressly provided for in P. 198. Virginia P. In the course of the audit. HCDaAS DECISION MENDOZA. Espinosa.D.. the officers who had approved the release of these benefits. Administrative Division Chief Erlinda A.— With respect to the officers and employees of BWD. their function. implying that their relationship to the water district is more fiduciary than that of employer-employee. Apolonio G. No. and Frank Bula. No. ID. Leyte. No. 2000. 2001. CSaHDT . it has been held that the terms and conditions of employment of government employees are governed by law. is limited to policy-making.. namely. P. dated January 30. as well as duplication of claims for cash gifts as part of the Christmas bonus of the general manager and traveling allowance of the officers of the BWD.of directors are not employees of BWD. and then General Manager Francis H.D. 11.— The disallowance of the duplication of claims for transportation allowance does not fall under management prerogative as this does not pertain to the power of management to determine the terms and conditions of employment but pertains to whether or not the claims are properly accounted for. COA Regional Office No. the Resident Auditor of the BWD conducted an audit of its 1994 accounts. 6686.D. the auditor disallowed payments of per diems in excess of those authorized by the Local Water Utilities Administration (LWUA) and P. as also noted before. Moreover. 198. were served with notices of disallowance. As already noted. 198. affirming the disallowance by the Director. Astorga. RATA (representation and transportation allowance) and rice allowances granted to the members of the board of directors of the BWD. the exercise of management prerogative by government corporations are limited by the provisions of the laws applicable to them. ID. as defined by P. C. Cotiamco.

which affirmed the findings of the Resident Auditor of Baybay. HOLDING THAT PETITIONERS ARE NOT ENTITLED TO RECEIVE OTHER BENEFITS PURSUANT TO SECTION 13 OF PD 198. alleging that the Commission erred in: I. Palencia -doMa. Accordingly. but the Resident Auditor denied their request on the ground that the disallowance had become final and executory. the dispositive portion of which reads: WHEREFORE. Cotiamco as payee Apolonio G. Gorre -do-do-do- Antonio R. VIII is hereby affirmed and the following persons cited in the various Notices of Disallowances. The BWD at first appealed to the COA Regional Office No. she advised them to make their appeal to the Commission on Audit. premises considered. the decision of the Director COA Regional Office No. P. Mendez. On September 21. Instead. Fernandez -doFrank Bula -do- are held liable. the Commission rendered a decision. Espinosa Ernesto L. HAS LEGAL BASIS. As their motion was denied by the Commission on January 30. Francis H. and then to the Commission on Audit. II. it is regretted that the instant appeal cannot be given due course for lack of merit. Ramada -doVirginia P. NOT HOLDING THAT THE GRANT OF THE SUBJECT BENEFITS TO THE DIRECTORS. AS AMENDED. . C. 2001.On May 30. OFFICERS AND EMPLOYEES OF BWD. they filed the present petition. Josette B. namely: Erlinda A. 2 Petitioners filed a motion for reconsideration. Militante -doDomingo V. Astorga -doLove Joy A. for approving the questioned payment and at the same time being payee. 1997. petitioners asked for a reconsideration. AND IS GUARANTEED BY THE CONSTITUTION. VIII at Tacloban City. 2000. Medina Nilo T. Leyte.

and excessive per diems to members of the board of directors of BWD. pursuant to his employment/appointment. would impair vested rights. No. Any per diem in excess of P50 shall be subject to approval of the Administration. 198. WHICH TOOK EFFECT IN JULY.A. bonuses." The contention is untenable.D. rice allowance. violate any rule against diminution of benefits. No. we hold that petitioners are not entitled to receive benefits and allowances in excess of those allowed by P. For the reasons hereafter given. As far as the directors of the BWD are concerned. No. and undermine the management prerogative of water districts. No. 1479. 8291. §13. 3 The issues raised in this case are as follows: (1) whether members of the board of directors of water districts are entitled to receive benefits in addition to those authorized to be paid pursuant to their charter and the guidelines of the LWUA after the effectivity of R. HOLDING THAT THE CONTINUED DISALLOWANCE OF THESE BENEFITS WOULD NOT VIOLATE THE POLICY OR RULE ON NON-DIMINUTION OF BENEFITS AND THE EQUITY RULE. (italics added) Petitioners argue that the term "compensation" in the above provision does not include the allowances and per diems which had been disallowed in this case. which provides that "compensation" means "the basic pay or salary by an employee. excluding per diems. and (3) whether the BWD officers and employees are entitled to receive benefits in excess of that authorized by law. NOT HOLDING THAT THE BENEFITS GRANTED TO BWD OFFICERS AND EMPLOYEES IS A MANAGEMENT PREROGATIVE WHICH ACT OR PRIVILEGE SHOULD ENJOY THE PRESUMPTION OF LEGALITY UNTIL OTHERWISE DECLARED BY THE COURTS AND THAT THE GRANT OF THESE BENEFITS NOT ONLY APPLIES TO THE PERMANENT EMPLOYEES BUT ALSO TO THE OFFICERS AND MEMBERS OF THE BOARD OF BWD. NOT HOLDING THAT SECTION 13 OF P. They cite P. as amended by P.A. the guidelines of the LWUA. No director shall receive other compensation for services to the district. and other applicable laws.D. reads: Compensation. but no director shall receive per diems in any given month in excess of the equivalent of the total per diems of four meetings in any given month. OTHERWISE KNOWN AS THE SALARY STANDARDIZATION LAW. 6758. 1989. IV. as amended by R. WAS ALREADY REPEALED AND/OR SUPERSEDED BY REPUBLIC ACT 6758.D.III. First. overtime pay. P. as well as the grant of RATA. to be determined by the board. No. No.D. No. AS AMENDED. 198. allowances and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under existing laws. 198. 1146. 4 §2(i).D. V. — Each director shall receive a per diem. for each meeting of the board actually attended by him. 768 and P. The statutory provision invoked refers to the basis for the computation of employer and employee contributions to the GSIS as well as the benefits to which such employees are .D. (2) whether the disallowance of duplication of claims of transportation allowance of various BWD employees.

In the same manner. v. 198. hazard pay. 12. under §32 of the National Internal Revenue Code. Petitioners contend that the prohibition in P.entitled. Inc. xx xxx xxx Sec. 5 Vengco v. 7 to support their contention that the prohibition against the payment of compensation other than per diems does not include the payment of allowances and other benefits. otherwise known as the Salary Standardization Law. except for representation and transportation allowances. Second. Trajano. Under §13 of this Decree. which took effect on July 1. 6758. "compensation" includes fees. per diem is precisely intended to be the compensation of members of board of directors of water districts. These cases do not apply to this case.D. words and phrases in a statute must be given their natural. wages. in the same paragraph. §13 against the grant of additional compensation to board members must be deemed repealed by virtue of §22 10 of R. whether in cash or in kind. 1989. 9 By specifying the compensation which a director is entitled to receive and by limiting the amount he/she is allowed to receive in a month. shall continue to receive such excess compensation. 6 and Philippine Duplicators. — Incumbents of positions presently receiving salaries and additional compensation/fringe benefits including those absorbed from local government units and other emoluments. 1989 not integrated into the standardized salary rates shall continue to be authorized. They contend that §13 of P. — All allowances. 198. and similar items for purposes of recognizing taxable income.D. NLRC.D. 198 is inconsistent with the following provisions of the Salary Standardization Law: Sec.A. providing "No director shall receive other compensation" than the amount provided for per diems. not to the compensation of members of the board of directors of water districts. 17. ordinary. shall be deemed included in the standardized salary rates herein prescribed. clothing and laundry allowances. are governed by P. and such other additional compensation not otherwise specified herein as may be determined by the DBM. No. Salaries of Incumbents. as already stated. Such other additional compensation. and. Consolidation of Allowances and Compensation. No. The definitions of the term "compensation" in these statutes are for limited purposes only and cannot be deemed to comprehend such other purposes not specifically included in the provisions thereof. commissions. 8 due regard being given to the context in which the words and phrases are used. also invoke the rulings of this Court in Kneebone v. No. being received by incumbents only as of July 1. The . whose rights to compensation. the law quite clearly indicates that directors of water districts are authorized to receive only the per diem authorized by law and no other compensation or allowance in whatever form. Indeed. allowances of foreign service personnel stationed abroad. subsistence allowance of marine officers and crew on board government vessels and hospital personnel. the aggregate of which exceeds the standardized salary rate as herein prescribed. and commonly-accepted meaning. which shall be referred to as transition allowance. No. Petitioners. They refer to the exclusion made by this Court of allowances and other benefits from the salaries of employees in the private sector. NLRC. salaries.

a unit thereof or of a group. educational. social. . These positions require thorough knowledge in the field of arts and sciences or learning acquired through completion of at least four (4) years of college studies. (b) Professional Non-Supervisory Category. coordinating. industrial and governmental functions. crafts or trades. Also included are positions involved in research and application of professional knowledge and methods to a variety of technological. application of managerial or supervisory skills required to carry out their basic duties and responsibilities involving functional guidance and control. organizing. manual or clerical lines of work which are short of professional work. appointive or elective." These positions. requiring some degree of professional. (c) Sub-Professional Supervisory Category. legal. controlling and overseeing within delegated authority the activities of an organization. professional nonsupervisory. including government-owned or controlled corporations and government financial institutions. namely: professional supervisory. and the rules and regulations for its implementation. leadership. requiring training and moderate experience or lower training but considerable experience and knowledge of a limited subject matter or skills in arts. technical or scientific knowledge and experience. economic. artistic or literary functions. §4 specifically provides that the Salary Standardization Law applies to "positions. the performance of technical tasks auxiliary to scientific research and development. 6758. We do not agree. — This category includes responsible positions of a managerial character involving the exercise of management functions such as planning. — The Position Classification System shall consist of classes of positions grouped into four main categories. now existing or hereafter created in the government. sub-professional supervisory. Position Classification System. Categorization of these classes of positions shall be guided by the following considerations: (a) Professional Supervisory Category. The positions in this category are assigned Salary Grade 8 to Salary Grade 30. — This category includes positions performing tasks which usually require the exercise of a particular profession or application of knowledge acquired through formal training in a particular field or just the exercise of a natural. and in the performance of religious. music and other branches of arts and letters. with their corresponding functions. No. and sub-professional non-supervisory. 5. directing. creative and artistic ability or talent in literature. are described as follows: Sec. The positions in this category are assigned Salary Grade 9 to Salary Grade 33. R. These positions require intensive and thorough knowledge of a specialized field usually acquired from completion of a bachelor's degree or higher degree courses. on full or part-time basis.A. — This category includes positions performing supervisory functions over a group of employees engaged in responsible work along technical.transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall receive in the future. drama. as well as line supervision.

s. it is the position of the Oversight Committee that said WD Directors are not to be treated as organic personnel. — The function of the board shall be to establish policy. no basis for petitioners' contention that the provisions of P. There is. trades or manual work. Civil Service Commission 11 that water districts are government-owned and controlled corporations subject . the fact that §§12 and 17 of the Salary Standardization Law speak of allowances as "benefits" paid in addition to the salaries incumbents are presently receiving makes it clear that the law does not refer to the compensation of board of directors of water districts as these directors do not receive salaries but per diems for their compensation. These positions usually require skills acquired through training and experience or completion of elementary education. 198. and that their powers. It is noteworthy that even the Local Water Utilities Administration (LWUA). 18. acknowledges that directors of water districts are not organic personnel and. entitled "Policy Guidelines on Compensation and Other Benefits to WD Board of Directors. rights and privileges are governed by the pertinent provisions of PD 198. 313. 1995. secondary or vocational education or completion of up to two (2) years of college education. as amended. No. No. 94-002 of the DBM-CSC-LWUA-PAWD Oversight Committee states in pertinent part: As the WD Board of Directors' function is limited to policy-making under Sec. It is obvious that the Salary Standardization Law does not apply to petitioners because directors of water districts are in fact limited to policy-making and are prohibited from the management of the districts. (d) Sub-Professional Non-Supervisory Category. in Resolution No. are deemed excluded from the coverage of the Salary Standardization Law. 1994.D. Functions Limited to Policy-Making. as such. — This category includes positions involved in structured work in support of office or fiscal operations or those engaged in crafts. 164. Third. as amended. s." on which petitioners rely for authority to grant themselves additional benefits. therefore. 18 of Presidential Decree 198. §18 described the functions of members of boards of directors of water districts as follows: Sec. Furthermore. Memorandum Circular No.These positions require knowledge acquired from secondary or vocational education or completion of up to two (2) years of college education. The Board shall not engage in the detailed management of the district. Petitioners contend that even before this Court declared in Davao City Water District v. P.D. The positions in this category are assigned Salary Grade 4 to Salary Grade 18. not by RA 6758 or Executive Order No. and as such are deemed excluded from the coverage of RA 6758. The positions in this category are assigned Salary Grade 1 to Salary Grade 10. 198 on the compensation of members of the board of directors of water districts are inconsistent with the provisions of the Salary Standardization Law.

13 As already stated. 198.A. BWD Manager. 6686. properly disallowed the P500. No.D.00 thereof as this amount was in excess of that authorized by law. (2) whether the disallowance of duplication of claims of transportation allowance to BWD employees.00.000. The Resident Auditor. without more. such as the COA. it was held that the circular issued by the Department of Budget and Management to implement the Salary Standardization Law. the issue resolved was the right of employees to receive RATA over and above the standardized salary after the effectivity of R. are generally accorded respect and even finality by this Court. where there is an express provision of law prohibiting the grant of certain benefits.D. contrary to the provisions of their charter and the resolution of the LWUA. and excessive . to repeat. findings regarding the duplication of claims for the transportation allowance granted to various employees of the BWD are findings of fact by the Resident Auditor.A. no matter how long continued. but they remained unrebutted by petitioners who simply relied on claims based on impairment of vested rights and diminution of benefits. Commission on Audit. 12 More specifically.00. It is well-settled that findings of fact of quasi-judicial agencies. 17 Philippine Ports Authority v. 18 and Manila International Airport Authority v. the law must be enforced even if it prejudices certain parties due to an error committed by public officials in granting the benefit. This contention too has no merit. in recognition of their expertise on the specific matters under their jurisdiction. Commission on Audit 19 is likewise erroneous. for the year 1994 amounted to P1. the findings of the Resident Auditor were not only supported by the evidence. 16 In the present case.to the jurisdiction of the COA. rice allowance. P. (1) whether members of the board of directors of water districts are entitled to receive even after the effectivity of the Salary Standardization Law benefits other than their authorized per diems. The question is whether such claims were properly accounted for and not whether this disallowance will impair vested rights. as determined by the LWUA pursuant to P. On the other hand. to directors of water districts. Practice. The erroneous application and enforcement of the law by public officers does not estop the Government from making a subsequent correction of such errors. P. cannot give rise to any vested right if it is contrary to law. 14 The same rule applies to the officers and employees of the BWD. Commission on Audit.500. No. Petitioners' reliance on De Jesus v. In De Jesus. in Philippine Ports Authority and Manila International Airport Authority. therefore. as well as the grant of RATA. 15 The cash gift granted to Francis H. No. was ineffective for lack of publication in the Official Gazette or in a newspaper of general circulation. R. Petitioners contend they have thus acquired a vested right to these benefits of which they cannot now be deprived without violating their property rights and the rule on non-diminution of benefits. 6758. with the approval of the Local Water Utilities Administration (LWUA). Militante. No. which then applied. water districts had already been granting additional benefits to members of the board of directors. if supported by substantial evidence. provides that all government personnel are entitled to a Christmas bonus of one (1) month basic salary and additional cash gift of P1. These cases are not in point as the issues in the present case are. 198 expressly prohibits the grant of compensation other than the payment of per diems. On the other hand. as required by law. which discontinued the payment of allowances and fringe benefits previously granted on top of basic salary. and to their officers and employees and that they continued doing so after the promulgation of the decision in that case.

6395. No. and (3) whether the BWD officers and employees are entitled to receive benefits in excess of that authorized by law. As already noted. No. lay-off and discipline. With respect to the officers and employees of BWD. 6686.D.A. is limited to policy-making. With respect to the board of directors. and upon approval of the Secretary of Energy. No. As the Commission pointed out in its decision COA Case No. management prerogative refers to the right of an employer to regulate all aspects of employment. 90-020: . Moreover. In the present case.D. there is no basis for such contention. 1360). shall receive such other allowances as the Board may prescribe. would impair vested rights and violate any rule against diminution of benefits and undermine the management prerogative of the BWD. as also noted before. . working methods. No. Petitioners invoke management prerogative to justify the grant of allowances and other benefits to both the board of directors of BWD and its officers and employees. any provision of law to the contrary notwithstanding. 198. 22 Thus. The comparison drawn by petitioner between the BWD and NAPOCOR has no basis. It cannot be justified by the exercise of management prerogative as it is contrary to law. regulation regarding transfer of employees. 21 implying that their relationship to the water district is more fiduciary than that of employer-employee. as defined by P. Fourth. their function. it has been held that the terms and conditions of employment of government employees are governed by law. No. . The cash gift granted to the general manager as part of his Christmas bonus was in excess of that authorized by R. the right of directors of water districts to the payment of compensation is expressly provided for in P. Petitioners finally cite the grant of similar benefits to the directors of the National Power Corporation (NAPOCOR) to support their claim that board of directors are entitled to receive allowances and other benefits in addition to per diems. Finally. Fifth. the existence of such right presupposes the existence of an employeremployee relationship. To begin with. and dismissal and recall of work.D. The grant of other allowances to NAPOCOR board members in COA Decision No.A. the BWD board of directors are not employees of BWD. 99-020 is based on the Revised NAPOCOR Charter (R. as amended by P. the exercise of management prerogative by government corporations are limited by the provisions of the laws applicable to them. 6. . thus pre-empting the exercise of any discretion by the water districts. 198. which states: Sec.per diems to members of the board of directors of BWD. the disallowance of the duplication of claims for transportation allowance does not fall under management prerogative as this does not pertain to the power of management to determine the terms and conditions of employment but pertains to whether or not the claims are properly accounted for. processes to be followed. supervision of their work. such as the freedom to prescribe work assignments. . 20 Clearly. The members of said Board shall receive a per diem of not to exceed Five Hundred Pesos for each regular or special meeting of the Board actually attended by them.

. Pardo. 26. 173 SCRA 155 (1989). De Leon. Increasing and Integrating the Social Security and Insurance Benefits of Government Employees and Facilitating the Payment Thereof under Commonwealth Act No. is limited to per diems. 9. Davide. §13. All allowances enjoyed by the board members were approved by the Ministry of Energy to conform with the imposition of an additional condition under the NPC Charter that the receipt of the allowances other than per diems should carry the approval of the MOE. 167 SCRA 99 (1988). Dalman. it bears emphasis. Unlike P.. Amending. Petitioners cannot thus claim similar treatment as the board of directors of NAPOCOR. concurs in the result. YnaresSantiago. Buena. as well as its resolution. 241 SCRA 380 (1995). Petition. No. p. the allowances are also valid and should remain part of the compensation of the members of the board.J. 6758. SO ORDERED. the petition for certiorari is DENIED and the decision of the Commission on Audit.D. 4. Per Chairman Celso D. Since the allowances were fixed at a time when the authority of the board to grant the same was still valid and effective.. Kapunan. Jr. concur. 5. Gangan and Commissioners Raul C. p.A. 6758 since these allowances were already being received and the board's right to these allowances was already established before the enactment of R. dated September 21.A. consistent with the policy of non-diminution of pay embodied under R. JJ. dated January 30. 3. 6. and for other purposes. 2000. Footnotes 1. p. Jr. 198. Quisumbing. Puno. The BWD board of directors' right to compensation. J.A. 7. WHEREFORE. subject only to the approval of the Secretary of Energy. Rollo. Sandoval-Gutierrez and Carpio. The entitlement to these allowances cannot be removed by R. Flores and Emmanuel M.. Vitug. Panganiban. Bellosillo. 167. as amended. 6758 or any subsequent law. 2001. 7. C. Rollo.. 2. is AFFIRMED. the Charter of NAPOCOR expressly granted members of its board of directors the right to receive allowances in addition to their per diems.The entitlement to per diems and other allowances by members of the board was originally derived from the revised NPC Charter. Melo. Expanding. .

19. October 18. THE HON. 128134. E. 238 SCRA 714 (1994). No. INC. Commission on Audit. 16. Grace Christian High School v.R. I n c. 14. Rodriguez. 22. Laysa v.A. Collector of Internal Revenue. 21. No. 13. respondents. Sec. Repealing Clause. 17. 22. or modified accordingly. 10. SECRETARY OF LABOR AND EMPLOYMENT. 28 SCRA 1119 (1969). petitioner. P. Cebu Portland Cement Co. 52 SCRA 92 (1973). Alliance of Government Workers (AGW) v. 18. 17 (1917). — All laws. amended. 9.R. Court of Appeals. §1. G. 12. G. 201 SCRA 593 (1991). OF LABOR AND EMPLOYMENT FIRST DIVISION [G. 7 SCRA 572 (1963). NLRC. Padilla Law Office for petitioner. 20. 256 SCRA 36 (1996). 209 Phil. SEC. decrees. Tierra International Construction Corp. Estapia. 15. 1 (1983). orders. 2002. §18. 281 SCRA 133 (1997). 146291 January 23. 2002 UNIVERSITY OF THE IMMACULATE CONCEPCION vs. 214 SCRA 653 (1992). Cleofe. U. 2000.. 294 SCRA 152 (1998). No. de Jesus. 198. 11. vs. 37 Phil. v. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a.] UNIVERSITY OF THE IMMACULATE CONCEPCION. . 146291. R. 6686.R. Espino v. rules or regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed. January 23. Inc. UNIVERSITY OF THE IMMACULATE CONCEPCION TEACHING AND NON-TEACHING EMPLOYEES UNION-FFW. v. The Minister of Labor. v. No. v.8.S.D.

CONCLUSIVE AND BINDING ON THE PARTIES AND NOT REVIEWABLE BY THE SUPREME COURT WHEN SUPPORTED BY SUBSTANTIAL EVIDENCE. It is not our function to review. the findings of fact of the Court of Appeals are conclusive and binding on the parties and are not reviewable by this Court. LABOR RELATIONS. Considering that the parties failed to reach an agreement regarding certain items of the CBA. failed to prove that this case falls within the exceptions. Questions of fact cannot be raised in an appeal via certiorari before the Supreme Court and are not proper for its consideration.— The issue raised involves a re-examination of the factual findings of the Court of Appeals. LABOR AND SOCIAL LEGISLATION. A question of fact would arise in such event. they still have the duty to negotiate a new collective bargaining agreement in good faith. FACTUAL FINDINGS OF THE COURT OF APPEALS. Nevertheless. NO NEW COLLECTIVE BARGAINING AGREEMENT ABSENT MEETING OF MINDS BETWEEN THE PARTIES. APPEAL VIA CERTIORARI. 2. examine and evaluate or weigh the probative value of the evidence presented. When supported by substantial evidence. petitioner insisted that a new collective bargaining agreement was concluded through the conciliation proceeding before the NCMB on all issues specified in the notice of strike. REMEDIAL LAW.The Solicitor General for respondents. APPEALS. the Court found that the Court of Appeals did not err in finding that there was still no new collective bargaining agreement because the parties had not reached a meeting of the minds. SYNOPSIS Petitioner filed the instant petition to set aside the decision of the Court of Appeals. unless the case falls under any of the exceptions to the rule. unless the case falls under any of the exceptions to the rule.— Petitioner failed to prove that the case falls within the exceptions.— We find that the Court of Appeals did not err in finding that there was still no new collective bargaining agreement because the parties had not reached a meeting of the minds. pursuant to the applicable provisions of the Labor Code. SYLLABUS 1. CASE AT BAR. which dismissed petitioner's petition and affirmed the orders of the Secretary of Labor and directing the parties to execute a collective bargaining agreement embodying the dispositions therein and all items agreed upon by the parties. The Court also found that no CBA could be concluded because of what the union perceived as illegal deductions from the 70% employees' share in the tuition fee increase from which the salary increases shall be charged. we may not review the findings of fact of the Court of Appeals. TDcCIS In denying the petition. EXPLAINED. QUESTIONS OF FACT CANNOT BE RAISED THEREIN. In its petition. and ruling that the strike declared by the respondent union was valid. When supported by substantial evidence. ID. A . In an appeal via certiorari. 3. Petitioner. however. the manner of computing the net incremental proceeds was yet to be agreed upon by the parties. the findings of fact of the Court of Appeals are conclusive and binding on the parties and are not reviewable by the Court. the Court held that it may not review the findings of fact of the Court of Appeals in an appeal via certiorari. COLLECTIVE BARGAINING AGREEMENT.. Also. EVIDENCE.

who assumed jurisdiction on January 23. the first in a series of three (3) notices of strike.. still no agreement was concluded by them because. 1995 only was set to resolve the distribution of the salary increase of the covered employees. 1994 conference. 1994. Also. as found by the Court of Appeals. pursuant to the applicable provisions of the Labor Code. the manner of computing the net incremental proceeds was yet to be agreed upon by the parties. are as follows: "Petitioner (University of the Immaculate Concepcion. there must be clear indications that the parties reached a meeting of the minds. hours of work and all other terms and conditions of employment in a bargaining unit. "On June 20. Davao City. no CBA could be concluded because of what the union perceived as illegal deductions from the 70% employees' share in the tuition fee increase from which the salary increases shall be charged. ID. As in all other contracts. J p: The Case In this appeal via certiorari. Selga St. ID. through the auspices of the National Conciliation and Mediation Board (NCMB). ID. met to negotiate a CBA. petitioner seeks to set aside the decision of the Court of Appeals. SECcIH DECISION PARDO. the Union filed with the NCMB a Notice of Strike. alleging deadlock in the CBA negotiations and unfair labor practices on the part of the . including mandatory provisions for grievances and arbitration machineries. 1994 and May 28. petitioner and the Union. among other reasons. and ruling that the strike declared by the union on 20 January 1995 was valid. Although it is true that the university and the union may have reached an agreement on the issues raised during the collective bargaining negotiations. IaAHCE The Facts The facts. the DOLE Secretary. they still have the duty to negotiate a new collective bargaining agreement in good faith. On two (2) occasions.. In this case.collective bargaining agreement (CBA) refers to the negotiated contract between a legitimate labor organization and the employer concerning wages. 1994. and Bonifacio St.— Petitioner insisted that a new collective bargaining agreement was concluded through the conciliation proceeding before the NCMB on all issues specified in the notice of strike.. CASE AT BAR. 1 which dismissed the University's petition and affirmed the orders of the Secretary of Labor and Employment 2 directing the parties to execute a collective bargaining agreement embodying the dispositions therein and all items agreed upon by the parties.. specifically on May 14. 4. Inc.. PARTIES HAVE DUTY TO NEGOTIATE IN GOOD FAITH WHERE NO AGREEMENT REGARDING CERTAIN ITEMS HAD BEEN REACHED BY THEM. The Court of Appeals found that "there are many items in the draft-CBA that were not even mentioned in the minutes of the July 20.) is a non-stock. non-profit educational institution with campuses at Fr." Considering the parties failed to reach an agreement regarding certain items of the CBA.

Petitioner denied the allegations in its Motion to Strike Out Notice of Strike (Annex "9" of Annex "A"." (Annex "8" of Annex "A". 'B. Petition). 1994. interference with union activities. and harassments. petitioner and the Union reached an agreement on some issues. Item (c) is adopted/agreed by the parties. NON-ECONOMIC ISSUES: UNION RECOGNITION and SECURITY 'Agreement: Both Parties agreed on the following: '1. 'II. WORKING SCHEDULE 'Agreement: Both parties agree as follows: '1. further consultations will be made on the proposed exclusion of secretaries. There will be Rank and Tenure Committee which management will establish by department. guidance counselor. That future employees hired after the signing of this CBA shall become members of the Union after having become regular employees. ECONOMIC ISSUE 'The parties agree to the economic package to be granted to the workers as increase in the amount equivalent to: '1st year: 75% of increment increase of Tuition Fees '2nd year: 80% — do — '3rd year: 80% — do — 'This settles the economic issue of this notice of strike. The salient portion of the minutes of the proceedings reads: 'I. In every committee. the union will be represented by 2-members who will be chosen by the union.petition in the form of "mass termination of teaching and non-teaching employees. registrar. accounting employees. discrimination. 'C. . '2. '2. 'On the coverage of the bargaining unit. SALARIES and WAGES: 'Agreement: Both parties agree as follows: '1. 'A. That provisions providing sanction will be removed. Petition). "During the parties' conciliation conference before the NCMB on July 20. Item (b) is removed.

DAEaTS "On November 8. p. the Union rejected the draft on the ground that the manner of computing the net incremental proceeds has yet to be agreed upon by the parties (Annexes "23". 1994. The minutes of that conference state: 'As a resolution to the issue left of the case. petitioner presented to the Union a draft of the CBA. the parties agree that the positions which management sought to be excluded from the bargaining unit be submitted to Voluntary Arbitration. Petition). 1994. 1994. Petition). 8). [petitioner's] cba proposals. "On December 9. 'This case is deemed settled and closed' (Annex "17" of Annex "A". or barely three (3) days after the Union's filing of its Second Notice of Strike. "In its letter to the Union dated December 12. therein alleging bargaining deadlock on "allocation of 5% (CBA) and distribution/computation of 70% incremental proceeds (RA 6728).'The parties agree to set another conference on July 26. petitioner terminated the employment of union member Gloria Bautista. 1994." and unfair labor practice by the petitioner in the form of "harassments. Petition). Petition. 1995. Petition). petition). 1994. "On December 12. After a study thereof. cashiers. the Union filed its Second Notice of Strike with the NCMB. Petition). petitioner filed with the NLRC Regional Arbitration Branch No. 1994 at 9:00 A.M. "23-A" and "24" of Annex "A". XI of the National Labor Relations Commission based in Davao City (Annex "28" of Annex "A". registrars. the panel of voluntary arbitrators rendered a decision excluding the secretaries. petitioner likewise terminated the employment of union board member Corazon Fernandez. As a consequence. XI in Davao City a complaint against the Union and its officers for unfair labor practices based on the following grounds: '(a) refusing to answer in writing. 1994. and within ten days required by law. union busting and correct implementation of COLA. (Comment. or on December 27. petitioner insists that the Union was bound to comply with the terms contained in the draft-CBA since said draft allegedly embodies all the items agreed upon by the parties during the conciliation sessions held by the NCMB (Annex "25" of Annex "A". petitioner and the Union agreed to submit to voluntary arbitration the issue concerning the exclusion of confidential employees from the collective bargaining unit. . Later. "In a subsequent conciliation conference of July 26. "Twenty (20) days later. 1994. guidance counselors and the chief of the accounting department of the petitioner from the coverage of the bargaining unit (Annex "41" of Annex "A". 5 of Annex "B". or on November 28." (Annex "26-A" of Annex "A". p. Bautista and Fernandez filed their complaints for illegal dismissal before the Regional Arbitration Branch No. Petition).' (Annex "16" of Annex "A". "On January 4.

even if the aforesaid CBA includes a no strike. on January 20. 'Finally. this Office hereby assumes jurisdiction over the entire labor dispute at University of the Immaculate Concepcion College. was elevated by the NLRC Regional Arbitration Branch to the Secretary of Labor (Annex "29" of Annex "A". all workers are directed to return to work within twenty-four (24) hours upon receipt of this Order and for management to accept them back under the same terms and conditions prior to the strike.) . and pursuant to Article 263 (g) of the Labor Code. Dispositively. and '(e) blatantly violating the aforesaid CBA.' (Annex "G" to private respondent's COMMENT. by filing a complaint for illegal dismissal of Ms. the NCMB in Region XI conducted a strike-vote balloting.' (Annex 29 of Annex "A" of Petition). even if its notice of strike by reason of the CBA deadlock had already been 'settled and closed. a grievance procedure and voluntary arbitration of any grievance the union may have. Petition). the parties are hereby directed to submit their respective position papers within ten (10) days from receipt hereof. the Union went on strike. even if there were so many issues unresolved and still to be discussed at the bargaining table. 1995 failed to bridge the differences between the parties. '(d) blatantly violating the aforesaid CBA. the outcome of which reveals that majority of the union members voted in favor of the holding of a strike. 1995. "The conciliation conference called by the NCMB on January 4. or on January 23. "The complaint. the order reads: 'WHEREFORE. thus directly circumventing the aforesaid procedures as regards the interpretation of the CBA and RA 6728 provisions on the net incremental proceeds of a tuition fee increase. docketed as NLRC Case No. ABOVE PREMISES CONSIDERED. the Secretary of Labor issued an order assuming jurisdiction over the labor dispute which was docketed as OS-AJ-003-95. refusing to sign the same. and when presented by the draft prepared by the [petitioner]. 1995. as amended. 'Accordingly. on the ground that there was still a deadlock in the CBA negotiations. by declaring a deadlock in the cba negotiations after just two days of negotiations. by resorting to another notice of strike. no lockout clause. 'Parties are further directed to cease and desist from committing any or all acts that might exacerbate the situation. '(c) refusing to comply with its promise to submit the final draft of the CBA agreed upon in the NCMB. True enough. "Three days later. RAB-XI-01. Thereafter. 'SO ORDERED. Gloria Bautista in the Regional Arbitration Branch without resorting to the grievance procedure and voluntary arbitration in the CBA.'(b) refusing to bargain in good faith.

Petition) . Mary Ann de Ramos 8. Accordingly. 6. the order reads: 'WHEREFORE. AEDISC 'The effects of the suspension and termination of the following union members: 1. 7. the Union filed its Third Notice of Strike. Delfa Diapuez 10. 1995. 'SO ORDERED. 3. the directives contained in the order dated 23 January 1995 is hereby reiterated.' (see pp. the respondent Secretary of Labor issued an order resolving the issues raised by the Union in its Motion for Reconsideration and Notice of Strike. 5-6 of Annex "B". they should likewise be accepted back to work under the same terms and conditions prevailing prior to the work stoppage. continuous intimidation of union members and defiance by the petitioner of the January 23. therein alleging mass termination of employees. 4. Paulina Palma Gil Gemma Galope Leah Cruza 14. 'The notice of strike filed on 10 March 1995. THE ABOVE-PREMISES CONSIDERED. 12. Jovita Mamburan Alma Villacarlos Josie Boston 11. "Before the Labor Secretary could act on the motion. Agapito Renomeron Rodolfo Andon 9."In time. 1995 Order of the Secretary of Labor. "On March 28. Dispositively. invoking the ruling of the voluntary arbitrators that certain classes of employees cannot be a part of the bargaining unit. 2. is hereby consolidated with the dispute subject of the above Order. petitioner suspended five (5) union members for failing to report to work within the period specified by the Secretary of Labor. also terminated the employment of twelve union members — supposedly holders of confidential positions — for refusing to resign from the Union. the Union filed a Motion for Reconsideration of the aforementioned order to seek a categorical declaration from the Secretary that the return-to-work order also covered Bautista and Fernandez inasmuch as the two (2) were dismissed during the pendency of the notice of strike. 1995. 5. "On March 10. Zenaida Canoy are hereby suspended pending determination of the legality thereof by this Office. Melanie de la Rosa Angelina Abadilla Leilan Concon 13. Petitioner.

'4. the Union stated that there was no CBA to speak of because what were agreed upon during the conciliation conference on 26 July 1994. '7. thus: 'On 27 February 1997. Promotion and lay-off. petitioner went to the Supreme Court on a petition for certiorari. Dismissal of Helen Jinon and Roselier Saga. '5. Staff development. Dismissal of Gloria Bautista and Corazon Fernandez.00 '2. which was referred to another Division of this Court. Substitution pay. '3. '2.00 SY 95-96 — 900. and Hospital assistance 'Non-Economic Issues '1. '3.00 SY 96-97 — 1. 1998 of the Secretary of Labor narrated the succeeding events. Health and insurance coverage. Conciliator-Mediators Mario F. all of which were denied by the same public respondent.000. The Union proposed to negotiate for the following items: 'Economic Issues '1. '4. and Union security . During the conciliation held in the afternoon of the same day. '8. Salary. "The assailed order of October 8. The Union manifested to reopen the negotiation of all the proposals including those that were previously agreed upon."Petitioner filed three (3) successive Motions for Partial Reconsideration. Retirement pay. Suspension of seven (7) union members for 7 days. '6. Teodoro went to Davao City to help the parties to come up with a settlement regarding their labor dispute. did not reflect the true intention of the parties and there was misunderstanding on the economic package. Dissatisfied. Honorarium pay. Santos and Leodegario M. SY 94-95 — P 800.

Sign and implement the CBA for three (3) years and re-open for the last two (2) years the economic provisions. subject to renegotiation of the economic provisions for the last two (2) years. Negotiate a new five (5) year CBA effective SY 97-98. This Office received the said Motion on 09 March 1998. premises considered. The pertinent portion of the challenged order reads: 'We cannot grant the Union's proposal to re-open the negotiation. Petition). 'COLLECTIVE BARGAINING DEADLOCK 'Salary Increases '1st year . the Union filed an Urgent Motion to Resolve the Above-Entitled Case.75% of increment increase of tuition fee '2nd year . "Finding the strike staged by the Union to be legal. 'WHEREFORE. On 26 February 1998. 'The parties failed to reach an agreement in any of their respective proposals. 15. bargaining deadlock and ULP are strikeable issues specifically provided under Article 263 (c) of the Labor Code. Nevertheless. the University presented two (2) options for negotiation namely: '1. the University contended that an agreement was reached during the conciliation conferences on 20 and 26 July 1994. valid. They therefore requested this Office to resolve the instant labor dispute.80% of increment increase of tuition fee '3rd year . Series of 1992. the Secretary of Labor resolved the labor dispute between the petitioner and the Union by directing the parties to execute a collective bargaining agreement. Guided by the agreements reached by the parties. or '2.. is in accordance with the mandatory requirements of the law. the University and the Union are directed to execute a collective bargaining agreement (CBA) embodying the dispositions contained herein as well as all items agreed upon by the parties. we rule that the strike declared by the Union on 20 January 1995. The CBA shall be effective for five (5) years starting SY 1995-96. this Office finds the following dispositions just and equitable. 'LEGALITY/ILLEGALITY OF THE STRIKE 'The strike undertaken by the Union on January 1995.e. the same shall be distributed in accordance with DECS Order No.'During the conciliation held in the morning of 28 February 1997.' (Annex "B".80% of increment increase of tuition fee 'To avoid differences of opinion in the distribution of these salary increases to the covered employees. The Union observed the mandatory requirements/procedures for a valid strike and the issues raised in the Notice of Strike i. was a valid exercise of the workers' rights under the Labor Code. Further. . hence.

A collective bargaining agreement (CBA) refers to the negotiated contract between a legitimate labor organization and the employer concerning wages. Roseller Saga and Helen Jinon. 10 A question of fact would arise in such event. 11 Questions of fact cannot be raised in an appeal via certiorari before the Supreme Court and are not proper for its consideration.' (Annex "B". petitioner filed with the Court of Appeals a petition for review assailing the ruling of the Secretary of Labor and Employment. Both motions for reconsideration were denied by the Secretary of Labor in his Resolution of September 10. we may not review the findings of fact of the Court of Appeals. 8 Petitioner failed to prove that the case falls within the exceptions. Petition). including mandatory provisions for grievances and arbitration machineries. namely. was not resolved in the order sought to be reconsidered. Petition). In an appeal via certiorari. hours of work and all other terms and conditions of employment in a bargaining unit. 6 When supported by substantial evidence. we find that the Court of Appeals did not err in finding that there was still no new collective bargaining agreement because the parties had not reached a meeting of the minds. the Court of Appeals promulgated a decision affirming the orders of the Secretary of Labor and Employment. The issue raised involves a re-examination of the factual findings of the Court of Appeals. On October 11. arguing that the issue of the legality of the termination of employment of two (2) employees. 1999 (Annex "D". The Union also filed its motion for partial reconsideration. 7 unless the case falls under any of the exceptions to the rule. 9 It is not our function to review. 4 Hence. The Court's Ruling We deny the petition.'SO ORDERED. there must be clear indications that the parties reached a meeting of the minds." 3 Subsequently. 2000. the findings of fact of the Court of Appeals are conclusive and binding on the parties and are not reviewable by this Court. . examine and evaluate or weigh the probative value of the evidence presented. TEcCHD "Petitioner filed a Manifestation and Motion for Partial Reconsideration (Annex "C". 5 The Issue The issue raised is whether the Court of Appeals erred in affirming the orders of the Secretary of Labor and Employment. Petition). 12 Nevertheless. 13 As in all other contracts. this appeal.

560-561). 122950. Court of Appeals. Also. Petition. Kapunan and Ynares-Santiago. they still have the duty to negotiate a new collective bargaining agreement in good faith. who assumed jurisdiction on January 23. 2001. concurring. Although it is true that the university and the union may have reached an agreement on the issues raised during the collective bargaining negotiations. pp. 1995 only was set to resolve the distribution of the salary increase of the covered employees. 2000. Petition.. Arriola v.. 326 [1998]. pp. 597 [1998] and Sarmiento v. 1998 and September 10.. Jr. C. No costs. 485-494. Annex "E". Rollo. On June 27. 353 Phil. 484-499. Cristobal v. and Reyes. JJ. 337 SCRA 464.. we gave due course to the petition (Rollo. OS-AJ-003-95 (NCMB-RBXI-NS-12028-94. Garcia. ponente. at pp. 5. 4. the manner of computing the net incremental proceeds was yet to be agreed upon by the parties. citing Congregation of the Virgin Mary v. Mahilum. . the DOLE Secretary. Rollo. 2. no CBA could be concluded because of what the union perceived as illegal deductions from the 70% employees' share in the tuition fee increase from which the salary increases shall be charged." 14 Considering the parties failed to reach an agreement regarding certain items of the CBA. Court of Appeals. Court of Appeals. The Court of Appeals found that "there are many items in the draft-CBA that were not even mentioned in the minutes of the July 20. respectively. Dated October 8. 845-846 [1998]. Court of Appeals. 1994 conference. 591. Puno. 6. 324 SCRA 85 [2000].. 2000. SO ORDERED. 1999. 320. Brawner.R. 2001. NCMB-RBXI-NS-03-004-95). No.In this case. Court of Appeals. pursuant to the applicable provisions of the Labor Code. SP No. Petition filed on February 1. 353 Phil. Bolanos v. Davide. 3. The Fallo WHEREFORE. among other reasons. JJ. G.J. 469 [2000].. 353 Phil. promulgated on October 11. Concepcion v. Footnotes 1. Sarmiento v.R. Petitioner insisted that a new collective bargaining agreement was concluded through the conciliation proceeding before the NCMB on all issues specified in the notice of strike. 834. still no agreement was concluded by them because. November 20. supra. Court of Appeals. concur. Jr. J. pp. In CA-G. the Court DENIES the petition and enjoins the parties to comply with the directive of the Secretary of Labor and Employment to negotiate a collective bargaining agreement in good faith. 484-499. Annex "E". 55670.

Intermediate Appellate Court. . Adolfo M. 734.7. 9. petitioners. 452 [1999]. 13. 743 [1998]. ANTONIO V. 16. 12. 332 Phil. ALFRED A. 228 SCRA 596 [1993]. Manila Fashions v. Bernardo v. 439.R. Beaterio del Santissimo Rosario de Molo. v. EDGARDO ESPIRITU in his capacity as Chairman of the PAL Inter-Agency Task Force created under Administrative Order No. Trade Unions of the Philippines v. vs. National Labor Relations Commission. G. DENNIS R. 2002. 10. AMBROCIO PALAD. Court of Appeals.. Court of Appeals. and ALEXANDER O. ARANAS. Estelito P. Commission on Elections. Arroyo v. Cheesman v. Corp. vs. (MABINI) for petitioners. JAIME J. Court of Appeals. EDGARDO ESPIRITU. I n c. HENRY SO UY. 228 SCRA 397 [1993]. OCAMPO. DAVID SORIMA. Guerzon for private respondent A. BIENVENIDO LAGUESMA in his capacity as Secretary of Labor and Employment.R. 348 Phil. RAMISO. Inc. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. Pepsi Cola Bottling Co. 11.. ET AL. Note 10. 8. 546.. Pilar Dev. 14. RIVERA. HON. v. Laguesma. v. JORGE P. Cebu Shipyard and Engineering Works. 9 [1968]. Navarro v. Atillo v. p. Rivera v. January 23. Mendoza for private respondents. Intermediate Appellate Court. BARRIENTOS. LUCIO TAN. MANOLO E. 591 [1994]. 121 [1996]. 125 Phil. and ISAGANI ALDEA. No. 236 SCRA 586. 2002 GERARDO F. Inc. Inc. Trade Union of the Philippines v. RIVERA. supra. Rollo. 135547 January 23. Barrientos. ET AL. 132 Phil. HON. 193 SCRA 93 [1991]. Integrity & Nationalism. Inc. Lim Kim Steel Builders. Ramos v. respondents. Laguesma. SECOND DIVISION [G.] GERARDO F. No. AQUINO. DELA ROSA. 146 SCRA 215 [1986]. JR. PHILIPPINE AIRLINES (PAL). 334 Phil. The Solicitor General for public respondent. 701 [1967]. Inc. 366 Phil. 216 SCRA 224 [1992]. Hi-Precision Steel Center. 555 [1997]. William Lines. 497. Movement of Attorney's for Brotherhood. 135547. BAUTISTA.

on the same date. seven officers and members of PALEA filed this petition to annul the September 27. SPECIAL CIVIL ACTIONS. Instead. One is to promote industrial stability and predictability. Nothing in Article 253-A of the Labor Code prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same. and (2) there is no plain. or with grave abuse of discretion amounting to lack or excess of jurisdiction. or an officer exercising judicial or quasi-judicial functions. Inasmuch as the agreement sought to promote industrial peace at PAL during its rehabilitation. or person. that the suspension of the PAL-PALEA CBA for a period of 10 years as provided therein was unconstitutional and contrary to public policy. Consequently. quasi-judicial. NOT PROPER REMEDIES IN CASE AT BAR. — The assailed agreement is clearly not the act of a tribunal. among others. The other purpose is to assign specific timetables wherein negotiations become a matter of right and requirement. aEcSIH The Court ruled that the assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the light of the severe financial situation faced by the employer. During the DOLE-supervised referendum. The PAL-PALEA agreement is a valid exercise of the freedom to contract.. 1998. Under the principle of inviolability of contracts guaranteed by the Constitution. ID. It is not the act of public respondents Finance Secretary Edgardo Espiritu and Labor Secretary Bienvenido Laguesma as functionaries of the Task Force. The first and second requisites . and (3) there is no appeal or any plain. quasijudicial or ministerial functions". speedy. said agreement satisfied the first purpose of Article 253-A. officer. or ministerial functions. For writs of prohibition. Philippine Airlines (PAL) ceased operations and sent notices of termination to its employees. majority of the union members accepted the PAL-PALEA agreement. what exists is a contract between a private firm and one of its labor unions. order or resolution of either public respondents involved. board. the Philippine Airlines Employees Association (PALEA) board wrote again to the Office of the President and submitted a proposal. PAL resumed domestic operations. speedy. CERTIORARI AND PROHIBITION. REMEDIAL LAW. However. and adequate remedy in the ordinary course of law. 1998. whether exercising judicial. board. Neither is there a judgment. or officer has acted without or in excess of jurisdiction. board... or person exercising judicial. ID. the contract must be upheld. 1998 agreement on the ground. a board. SYLLABUS 1. on September 23.SYNOPSIS To address the problems of the ailing flag carrier. ID. — The essential requisites for a petition for certiorari under Rule 65 are: (1) the writ is directed against a tribunal. but preventing the latter's closure. albeit entered into with the assistance of the Task Force. on October 7. The PAL management accepted the said PALEA proposal. 1998. This Court found no conflict between said agreement and Article 253-A of the Labor Code. with the peculiar and unique intention of not merely promoting industrial peace at PAL. ESSENTIAL REQUISITES. the requisites are: (1) the impugned act must be that of a "tribunal. and adequate remedy in the ordinary course of law. As a result. on September 27. corporation." 2. officer. Article 253-A has a two-fold purpose. (2) such tribunal.

Nothing in Article 253-A. a national concern. — The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the light of the severe financial situation faced by the employer. — In the instant case. but preventing the latter's closure. ID. prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same. ID. inasmuch as what is at stake here is industrial peace in the nation's premier airline and flag carrier. LABOR RELATIONS.. speedy. petitioners' proper remedy is an ordinary civil action for annulment of contract. Nevertheless.. Furthermore. NOTHING PROHIBITS THE PARTIES FROM WAIVING OR SUSPENDING THE MANDATORY TIMETABLES AND AGREEING ON THE REMEDIES TO ENFORCE THE SAME. As such. said agreement satisfies the first purpose of Article 253A.. Article 253-A has a two-fold purpose. While the petition is denominated as one for certiorari and prohibition. the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it is intended to serve. it was PALEA. ELUCIDATED. LABOR CODE. that voluntarily entered into the CBA with PAL. there is available to petitioners a plain. ID. Either case was the union's exercise of its right to collective bargaining. COLLECTIVE BARGAINING AGREEMENT.for certiorari and prohibition are therefore not present in this case. One is to promote industrial stability and predictability. hours of work and all other terms and conditions of employment. REVIEW OF THE FACTS AND FACTUAL ISSUES NOT THE FUNCTION OF THE SUPREME COURT. 5. ID.. The other is to assign specific timetables wherein negotiations become a matter of right and requirement. RIGHT TO FREE COLLECTIVE BARGAINING INCLUDES THE RIGHT TO SUSPEND IT.. including proposals for adjusting any grievances or questions arising under such agreement.. EXCEPTION. — Petitioners further assert that public respondents were partial towards PAL management. Neither certiorari nor prohibition is the remedy in the present case. ID. They allegedly pressured the PALEA leaders into accepting the agreement. aECTcA 4. ID.. ID. 6. This would involve review of the facts and factual issues raised in a special civil action for certiorari which is not the function of this Court. Inasmuch as the agreement sought to promote industrial peace at PAL during its rehabilitation. as the exclusive bargaining agent of PAL's ground employees. ID. with the peculiar and unique intention of not merely promoting industrial peace at PAL. LABOR AND SOCIAL LEGISLATIONS. considering the prayer of the parties principally we shall look into the substance of the petition. and adequate remedy in the ordinary course of law." The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. in the higher interest of justice and in view of the public interest involved. In construing a CBA. ID.. includes the right to suspend it. after all. The right to free collective bargaining. We find no conflict between said agreement and Article 253-A of the Labor Code. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA.. an action which properly falls under the jurisdiction of the regional trial courts.. Petitioners ask this Court to examine the circumstances that led to the signing of said agreement. The acts of public respondents in . ID. its object is actually the nullification of the PALPALEA agreement. 3. — A CBA is "a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages.

OBLIGATIONS AND CONTRACTS. Under Article 248(d) of the Labor Code. LABOR AND SOCIAL LEGISLATIONS. For this reason. — The questioned proviso of the agreement reads: a. We are unable to declare the objective of union security an unfair labor practice.. promoted the shared responsibility between workers and employers." The aforesaid provisions.. which provides: "b. a construction must be adopted as will give effect to all. but from the whole read together. the law has allowed stipulations for "union shop" and "closed shop" as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-à-vis the employer. . In the instant case. . Under Article 1374 of the Civil Code. — Petitioners' contention that the agreement installs PALEA as a virtual company union is also untenable. ID." 7. PALEA AS COMPANY UNION. . ID. but clauses must be interpreted in relation to one another to give effect to the whole.. CIVIL LAW. Under said article. taken together. ID. ID. clearly show the intent of the parties to maintain "union security" during the period of the suspension of the CBA. Said proviso cannot be construed alone. A CONSTRUCTION MUST BE ADOPTED AS WILL GIVE EFFECT TO ALL. NOT ESTABLISHED IN CASE AT BAR.. The 'union shop/maintenance of membership' provision under the PAL-PALEA CBA shall be respected." The case records are bare of any showing of such acts by PAL. a company union exists when the employer acts "[t]o initiate. FIVE-YEAR REPRESENTATION LIMIT APPLIES ONLY WHEN THERE IS AN EXTANT CBA IN FULL FORCE AND EFFECT. ID.. including the giving of financial or other support to it or its organizers or supporters. ADHCSE 9. Its objective is to assure the continued existence of PALEA during the said period. 10. and the exercised voluntary modes in settling disputes. The agreement afforded full protection to labor.. INTENT OF THE PARTIES TO MAINTAIN "UNION SECURITY" DURING THE PERIOD OF THE SUSPENSION OF THE (CBA) IS NOT UNFAIR LABOR PRACTICE. DECISION . assist or otherwise interfere with the formation or administration of any labor organization. ID. The legal effect of a contract is not determined alone by any particular provision disconnected from all others. — We also do not agree that the agreement violates the five-year representation limit mandated by Article 253-A. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the regular rank-and-file ground employees of the Company. the parties agreed to suspend the CBA and put in abeyance the limit on the representation period. IN CONSTRUING AN INSTRUMENT WITH SEVERAL PROVISIONS. — In construing an instrument with several provisions. LABOR CODE. The aforesaid provision must be read within the context of the next clause. dominate. 8.sanctioning the 10-year suspension of the PAL-PALEA CBA did not contravene the "protection to labor" policy of the Constitution. COLLECTIVE BARGAINING AGREEMENT. the representation limit for the exclusive bargaining agent applies only when there is an extant CBA in full force and effect. contracts cannot be construed by parts. It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. including conciliation to foster industrial peace. LABOR RELATIONS.

the PAL Employees Association (PALEA). 1998. Public respondent Edgardo Espiritu. On August 28. mediation (for) the purpose of arriving at a total and complete solution of the problem. On July 22. The strike ended four days later. The factual antecedents of this case are as follows: On June 5. From the issued shares of stock within the group of Mr. The Task Force was composed of the Departments of Finance. become partners in the boardroom and together. 3 . together with the Securities and Exchange Commission (SEC). of a plan to transfer shares of stock to its employees.000 fully paid shares of stock of Philippine Airlines with a par value of PHP5. 1998.899 union members. 16 creating an Inter-Agency Task Force (Task Force) to address the problems of the ailing flag carrier.00/share will be transferred in favor of each employee of Philippine Airlines in the active payroll as of September 15. J p: In this special civil action for certiorari and prohibition.QUISUMBING. Transportation and Communication. Chairman and Chief Executive Officer of PAL. PALEA went on strike to protest the retrenchment measures adopted by the airline.'' 1 Conciliation meetings were then held between PAL management and the three unions representing the airline's employees. 2 with the Task Force as mediator. causing serious losses to the financially beleaguered flag carrier. petitioners charge public respondents with grave abuse of discretion amounting to lack or excess of jurisdiction for acts taken in regard to the enforcement of the agreement dated September 27. PAL management submitted to the Task Force an offer by private respondent Lucio Tan. As a result. 2. On September 4. PAL's financial situation went from bad to worse. PAL pilots affiliated with the Airline Pilots Association of the Philippines (ALPAP) went on a three-week strike. 1998. he/she has the option to keep the shares or sells (sic) his/her shares to his/her union or other employees currently employed by PAL. we would request for a suspension of the Collective Bargaining Agreements (CBAs) for 10 years. 1998. the ownership of 60. then President Joseph E. Estrada issued Administrative Order No. We. 1998. PAL adopted a rehabilitation plan and downsized its labor force by more than one-third. Labor and Employment. The aggregate shares of stock transferred to PAL employees will allow them three (3) members to (sic) the PAL Board of Directors. between Philippine Airlines (PAL) and its union. 1998. we shall address and find solutions to the wide range of problems besetting PAL. then the Secretary of Finance. thus. Foreign Affairs. and Tourism. 3. Lucio Tan's holdings. when PAL and PALEA agreed to a more systematic reduction in PAL's work force and the payment of separation benefits to all retrenched employees. which affected 1. was designated chairman of the Task Force. In order for PAL to attain (a) degree of normalcy while we are tackling its problems. It was "empowered to summon all parties concerned for conciliation. Faced with bankruptcy. The pertinent portion of said plan reads: 1. Should any share-owning employee leave PAL.

055 voted in favor of Tan's offer while 1. PALEA shall. 1. 1998. The airline claimed that given its labor problems. 2. to prevent the imminent closure of PAL. subject to ratification by the general membership: 1.000 shares of stock with a par value of P5. Under intense pressure from PALEA members. 2. On September 23. PALEA sought the intervention of the Office of the President in immediately convening the parties. PAL informed the Task Force that it was shutting down its operations effective September 23. with adequate representation from both PAL management and PALEA. PAL ceased its operations and sent notices of termination to its employees. Each PAL employee shall be granted 60. the airline had no alternative but to close shop. 1998. the existing Labor-Management Coordinating Council shall be reorganized and revitalized. PALEA agrees. 4 On September 19. 1998. however. the PAL management. .738 PALEA members cast their votes in the referendum under DOLE supervision held on September 21-22. including the SEC under the direction of the Inter-Agency Task Force. the union's directors subsequently resolved to reject Tan's offer. On September 27. Lucio Tan's shareholdings. (to) the suspension of the PAL-PALEA CBA for a period of ten (10) years. rejected Tan's offer. be granted adequate representation in committees or bodies which deal with matters affecting terms and conditions of employment. provided the following safeguards are in place: a. preparatory to liquidating its assets and paying off its creditors. Likewise.00. however. the PALEA board wrote President Estrada anew.371 rejected it. as far as practicable. and FASAP.On September 10. the Board of Directors of PALEA voted to accept Tan's offer and requested the Task Force's assistance in implementing the same. rejected this counter-offer. Of the votes cast. 3. On September 18. ALPAP. rehabilitation was no longer feasible.799 out of 6. Two days later. the PALEA board again wrote the President proposing the following terms and conditions. 1998. subject to the ratification by the general membership. seeking his intervention. 1998. To enhance and strengthen labor-management relations. PALEA informed the Department of Labor and Employment (DOLE) that it had no objection to a referendum on the Tan's offer. PALEA. Union members. To assure investors and creditors of industrial peace. 5 Tan. from Mr. PAL shall continue recognizing PALEA as the duly certified bargaining agent of the regular rankand-file ground employees of the Company. 4. 1998. and hence. with three (3) seats in the PAL Board and an additional seat from government shares as indicated by His Excellency. 1998. 1998. PALEA offered a 10-year moratorium on strikes and similar actions and a waiver of some of the economic benefits in the existing CBA. On September 17.

5. PAL shall grant the benefits under the 26 July 1998 Memorandum of Agreement forged by and between PAL and PALEA. (2) Is the PAL-PALEA agreement of September 27. 6. 5. as officers and/or members of the PALEA Board of Directors. On the same date.b. On October 2. 1998. On October 7. 1998. NOR THE WAIVER. The 'union shop/maintenance of membership' provision under the PAL-PALEA CBA shall be respected. 1998 agreement entered into between PAL and PALEA on the following grounds: I PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED THEIR JURISDICTION IN ACTIVELY PURSUING THE CONCLUSION OF THE PAL-PALEA AGREEMENT AS THE CONSTITUTIONAL RIGHTS TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING. PALEA members who have been retrenched but have not received separation benefits shall be granted priority in the hiring/rehiring of employees. 7. The issues now for our resolution are: (1) Is an original action for certiorari and prohibition the proper remedy to annul the PAL-PALEA agreement of September 27. the provisions of the Labor Code shall apply. PAL resumed domestic operations. stipulating the suspension of the PALPALEA CBA unconstitutional and contrary to public policy? . to those employees who may opt to retire or be separated from the company. RATIFIED.324 PALEA members cast their votes in a DOLE-supervised referendum. 1998. and Aranas. In the absence of applicable Company rule or regulation. with full medical benefits. II PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED THEIR JURISDICTION IN PRESIDING OVER THE CONCLUSION OF THE PAL-PALEA AGREEMENT UNDER THREAT OF ABUSIVE EXERCISE OF PAL'S MANAGEMENT PREROGATIVE TO CLOSE BUSINESS USED AS SUBTERFUGE FOR UNION-BUSTING. MAY NOT BE WAIVED. 1998. Of the votes cast. PAL management accepted the PALEA proposal and the necessary referendum was scheduled. 61% were in favor of accepting the PAL-PALEA agreement. BEING FOUNDED ON PUBLIC POLICY. 6 Among the signatories to the letter were herein petitioners Rivera. No salary deduction. seven officers and members of PALEA filed this instant petition to annul the September 27. Ramiso. c. while 34% rejected it.

Petitioners further assert that public respondents were partial towards PAL management. considering the prayer of the parties principally we shall look into the substance of the petition. . Furthermore. albeit entered into with the assistance of the Task Force.O." and (2) there is no plain. corporation. whether exercising judicial. what exists is a contract between a private firm and one of its labor unions. inasmuch as what is at stake here is industrial peace in the nation's premier airline and flag carrier. order. a national concern. speedy. there is available to petitioners a plain. Neither is there a judgment. This would involve review of the facts and factual issues raised in a special civil action for certiorari which is not the function of this Court. petitioners aver that public respondents as functionaries of the Task Force. Respondents. The first and second requisites for certiorari and prohibition are therefore not present in this case. board. As such. public respondents did not perform any judicial and quasi-judicial act pertaining to jurisdiction. or an officer exercising judicial or quasi-judicial functions. speedy. board. officer. No. its object is actually the nullification of the PAL-PALEA agreement. a board. Instead. and adequate remedy in the ordinary course of law. The essential requisites for a petition for certiorari under Rule 65 are: (1) the writ is directed against a tribunal. 8 Petitioners allege grave abuse of discretion under Rule 65 of the 1997 Rules of Civil Procedure.Anent the first issue. officer. board. 12 Nevertheless. an action which properly falls under the jurisdiction of the regional trial courts. 1998 referendum during which the PALEA members ratified the agreement. It is not the act of public respondents Finance Secretary Edgardo Espiritu and Labor Secretary Bienvenido Laguesma as functionaries of the Task Force. or person exercising judicial. in the higher interest of justice 13 and in view of the public interest involved. Thus. 11 Neither certiorari nor prohibition is the remedy in the present case. or person. and (3) there is no appeal or any plain. consistent with the mandate of A. in turn. or resolution of either public respondents involved. 9 For writs of prohibition. quasi-judicial. speedy. They allegedly pressured the PALEA leaders into accepting the agreement. 16 and merely supervised the conduct of the October 3. or officer has acted without or in excess of jurisdiction. quasi-judicial or ministerial functions. While the petition is denominated as one for certiorari and prohibition. Cuaresma 7 and Enrile v. Salazar. argue that the public respondents merely served as conciliators or mediators. gravely abused their discretion and exceeded their jurisdiction when they actively pursued and presided over the PAL-PALEA agreement. the requisites are: (1) the impugned act must be that of a "tribunal. Furthermore." 10 The assailed agreement is clearly not the act of a tribunal. or with grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioners ask this Court to examine the circumstances that led to the signing of said agreement. and adequate remedy in the ordinary course of law. petitioners' proper remedy is an ordinary civil action for annulment of contract. (2) such tribunal. and adequate remedy in the ordinary course of law. or ministerial functions. respondents pray for the dismissal of the petition for violating the "hierarchy of courts" doctrine enunciated in People v.

20 The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the light of the severe financial situation faced by the employer. while the other provisions. the parties may exercise their rights under this Code. be for a term of five (5) years. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement. If any such agreement is entered into beyond six months. 15 Petitioners claim that the agreement was not meant merely to suspend the existing PAL-PALEA CBA. shall retroact to the day immediately following such date. Article 253-A has a . the parties shall agree on the duration of the retroactivity thereof. way beyond the maximum statutory life of a CBA. By agreeing to a 10-year suspension. — Any Collective Bargaining Agreement that the parties may enter into shall. in effect. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. may be negotiated not later than three years after the execution. but preventing the latter's closure. which expires on September 30. hours of work and all other terms and conditions of employment. We find the argument devoid of merit. 17 Petitioners submit that a 10-year CBA suspension is inordinately long. PALEA. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. insofar as representation is concerned. Terms of a Collective Bargaining Agreement. abdicated the workers' constitutional right to bargain for another CBA at the mandated time. the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it is intended to serve. In case of a deadlock in the renegotiation of the collective bargaining agreement. except for representation. It violates the "protection to labor" policy 16 laid down by the Constitution. petitioners contend that the controverted PAL-PALEA agreement is void because it abrogated the right of workers to self-organization 14 and their right to collective bargaining. but also to foreclose any renegotiation or any possibility to forge a new CBA for a decade or up to 2008.'' 18 The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. a CBA has a term of five years. insofar as the representation aspect is concerned. 19 In construing a CBA. Under this provision. with the peculiar and unique intention of not merely promoting industrial peace at PAL. We find no conflict between said agreement and Article 253-A of the Labor Code.On the second issue. 2000. including proposals for adjusting any grievances or questions arising under such agreement. Article 253-A of the Labor Code reads: ARTICLE 253-A. provided for in Article 253-A. A CBA is "a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages.

Nothing in Article 253-A. including conciliation to foster industrial peace.'' 21 Petitioners further allege that the 10-year suspension of the CBA under the PAL-PALEA agreement virtually installed PALEA as a company union for said period. The other is to assign specific timetables wherein negotiations become a matter of right and requirement. the law has allowed stipulations for "union shop" and "closed shop" as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-à-vis the employer. The legal effect of a contract is not determined alone by any particular provision disconnected from all others. It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. but from the whole read together. in violation of Article 253-A of the Labor Code mandating that an exclusive bargaining agent serves for five years only. it was PALEA. The acts of public respondents in sanctioning the 10-year suspension of the PAL-PALEA CBA did not contravene the "protection to labor" policy of the Constitution. taken together. as the exclusive bargaining agent of PAL's ground employees. 22 contracts cannot be construed by parts. said agreement satisfies the first purpose of Article 253-A. which provides: b. The questioned proviso of the agreement reads: a. includes the right to suspend it. The agreement afforded full protection to labor. prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same. Under Article 1374 of the Civil Code. clearly show the intent of the parties to maintain "union security" during the period of the suspension of the CBA. but clauses must be interpreted in relation to one another to give effect to the whole. In the instant case. Either case was the union's exercise of its right to collective bargaining. Said proviso cannot be construed alone. after all. Inasmuch as the agreement sought to promote industrial peace at PAL during its rehabilitation. In construing an instrument with several provisions. and the exercised voluntary modes in settling disputes. The 'union shop/maintenance of membership' provision under the PAL-PALEA CBA shall be respected. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the regular rankand-file ground employees of the Company. that voluntarily entered into the CBA with PAL. promoted the shared responsibility between workers and employers. The right to free collective bargaining. For this reason. a construction must be adopted as will give effect to all. One is to promote industrial stability and predictability.two-fold purpose. The aforesaid provisions. 24 . We are unable to declare the objective of union security an unfair labor practice. amounting to unfair labor practice. Its objective is to assure the continued existence of PALEA during the said period. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. 23 The aforesaid provision must be read within the context of the next clause.

766 (1998). Sec. G. Rule 65. at 101. 7. 3. 289 SCRA 159. 9. Buena and De Leon. ALPAP. 1997 RULES OF CIVIL PROCEDURE. Act No. the representation limit for the exclusive bargaining agent applies only when there is an extant CBA in full force and effect. . 67787. Id. 8. Bellosillo. Footnotes 1. concur. 2. Under said article.R. assist or otherwise interfere with the formation or administration of any labor organization. and the Flight Attendants and Stewards Association of the Philippines or FASAP. PALEA.. In the instant case. 172 SCRA 415. SO ORDERED. dominate. No pronouncement as to costs. Sec. Administrative Order No.. 1998. Mendoza." The case records are bare of any showing of such acts by PAL. 128540. 231 (1990). G. 7691. p. we are of the view that the PAL-PALEA agreement dated September 27. 424-425 (1989). 171 (1998).R. Sec. Under Article 248 (d) of the Labor Code. 2. No. No. Id. at 98. Suntay v. No. at 65-66... 92163-64.R.Petitioners' contention that the agreement installs PALEA as a virtual company union is also untenable. Batas Pambansa Blg. 10. 19. as amended by Rep. 11. 6. Rollo. 300 SCRA 760. Under the principle of inviolability of contracts guaranteed by the Constitution. is a valid exercise of the freedom to contract. Supra. Jr. Cuison v. the instant petition is DISMISSED.. including the giving of financial or other support to it or its organizers or supporters. there being no grave abuse of discretion shown. Id. 25 the contract must be upheld. Court of Appeals.R. 2. EDISaA We also do not agree that the agreement violates the five-year representation limit mandated by Article 253-A. G. 5. 132524. 129. 68. No. the parties agreed to suspend the CBA and put in abeyance the limit on the representation period. JJ. G. note 1 at 69. Cojuangco-Suntay. a company union exists when the employer acts "[t]o initiate. WHEREFORE. In sum. 16. 4. 186 SCRA 217.

Const. 638 (1996). Art III. L-24835. No. The various stipulations of a contract shall be interpreted together. NLRC. Art. G. 141 SCRA 179. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. 1374. Art. San Miguel Corporation Employees Union-PTGWO v. XIII.. 102132. 24.R. Davao Integrated Port Stevedoring Services v. Note 19 at 204. 330 Phil. NLRC. Davao Integrated Port Stevedoring Services v. 131457. 134903..] . 58768-70. Northern Lines Inc. 3.. 3.R. No. 8. No. ET AL. Sec.R. Liberty Flour Mills.. Sec. Art. 1987 Const. 289 SCRA 624. Abarquez.R. G. 3. No. 717-718 (1998). 502 (1998). Sec.R. 204 (1993). Inc. 180 SCRA 668. 293 SCRA 496. Go v.R. Const. Art. Reparations Commission v. v. Kiok Loy v. 20. attributing to the doubtful ones that sense which may result from all of them taken jointly. Fortich v. Inc. 21. Italics supplied. 18. 17. G. 134903 January 16. 220 SCRA 197. 13. No. January 16. G. 15. Art II. Abarquez. 2002 UNICRAFT INDUSTRIES INTERNATIONAL CORP. 584 (1998). 185 (1986). 19. Corona. No. III. 22. XIII. vs. Art. G. Sec. 2002. 10. 33 (1970). 25. Confesor. supra. Sec. Suarez v.12. G. 628. No. 18. XIII Sec. No. 300 SCRA 713. 645 (1998). et al. 145 Phil. Court of Appeals. 111262. ET AL. Nos. 16. 297 SCRA 574. G. Liberty Flour Mills Employees v.R. 23. 128395. I n c. No. No. L-54334. 24. G. 124723. G. NLRC. 679680 (1989). Const. FIRST DIVISION [G. Stolt-Nielsen Marine Services.R. Const. 128954. 14. COURT OF APPEALS.R. G.R.R.

UNICRAFT INDUSTRIES INTERNATIONAL CORPORATION, ROBERT DINO, CRISTINA DINO and MICHAEL LLOYD DINO, petitioners, vs. THE HON. COURT OF APPEALS, VOLUNTARY ARBITRATOR FLORANTE V. CALIPAY, DANILO ABARAO, ROGIETO ABARAO, BENJAMIN AVENTURADO, BENIGNO BELARMINO, FELIX BRAZIL, RENATO BRIONES, RECCIL ELCANA, ROLAND GERON, RICKY GIMENA, ROMEO INOC, NILIA MANDAWE, ANTONIO MANGABON, AMELITO MONTELIN, MATIAS ONGOS, ARTURO ORTEGA, ADRIANO PALO, JR., BERNARDO RAMOS, WILMA RANILE, EDGAR RIVERA, RAFAEL RONDINA, ANILO ROSALES, DIVINA ROSALES, ALONA SORTOÑES, VINCH TRUZ, WILSON VILLARTA, EMETERIO YBAS, ROMEO ABARAO, WILFREDO ABARAO, EUGENIO ABING, JAIME AGUSTIN, RUBEN RONDINA, LORENA SORTOÑES, respondents. Hermosisima & Inso Law Firm and Herrera Teehankee & Faylona for petitioners. Arnado & Associates for private respondents. The Solicitor General for public respondents. SYNOPSIS Private respondents filed a case of illegal dismissal against petitioners. Later, when Voluntary Arbitrator Calipay ruled in favor of private respondents, petitioners appealed. Petitioner company alleged that it was not given an opportunity to present its evidence because it received the notice of hearing later than the time set and hence, failed to attend the same. The Court ruled in favor of petitioners and remanded the case to the Voluntary Arbitrator for reception of evidence and further proceedings. Private respondents filed a motion for reconsideration. SEIcAD The Court remanded the case to the Voluntary Arbitrator and ruled that the award of separation pay cannot be executed before trial is terminated since to do so would be to preempt the proceedings before the voluntary arbitrator. The affirmance of the award of separation pay would be tantamount to a judicial declaration that private respondents were indeed illegally dismissed. Thus, the Court denied the motion of private respondents for lack of merit. SYLLABUS LABOR AND SOCIAL LEGISLATION, ILLEGAL DISMISSAL; SEPARATION PAY; AWARD THEREOF CANNOT BE EXECUTED BEFORE TRIAL IS TERMINATED. — In our Decision, we ordered the remand of the case of the voluntary arbitrator for reception of evidence for the petitioners. We ruled that the award of separation pay cannot be executed before trial is terminated since to do so would be to preempt the proceedings before the voluntary arbitrator. It is worth noting that the case filed was for illegal dismissal. The affirmance of the award of separation pay would be tantamount to a judicial declaration that private respondents were indeed illegally dismissed. PUNO, J., Dissenting Opinion: POLITICAL LAW; ADMINISTRATIVE LAW; DUE PROCESS; NOT VIOLATED WHERE THE SAME WAS GIVEN BUT NOT AVAILED OF. — The essence of due process in administrative proceedings is simply an

opportunity to explain one's side or an opportunity to seek a reconsideration of an action or ruling complained of. The proceedings before the voluntary arbitrator clearly showed that petitioners were given an opportunity to present their evidence but they refused to avail of this opportunity without any legal reason. Due process is not violated where one is given the opportunity to be heard, but chooses not to give his side. cADaIH RESOLUTION YNARES-SANTIAGO, J p: On March 26, 2001, a Decision was rendered annulling the assailed resolutions of the Court of Appeals as well as the decision of Voluntary Arbitrator Florante V. Calipay, and remanding the case to the Voluntary Arbitrator for reception of evidence for petitioners. TCDHaE Private respondents filed a Motion for Reconsideration 1 on May 15, 2001, a Supplemental Motion for Reconsideration 2 on July 30, 2001 and a 2nd Supplemental Motion for Reconsideration 3 on September 6, 2001. They argue, in sum, that petitioners were not deprived of due process considering that they were able to submit their position paper and supporting evidence; and that their failure to present additional evidence was through their own fault or inaction. It should be stressed that the issue of whether or not petitioners were denied due process in the proceedings before the voluntary arbitrator was laid to rest when the parties entered into a stipulation, which the Court of Appeals approved on April 22, 1997, wherein they agreed to remand the case to the voluntary arbitrator "so that the petitioners will be granted their day in court to prove their case." For reference, the stipulation is again reproduced as follows: STIPULATION PARTIES, through their respective counsel, unto this Honorable Court, most respectfully stipulate: 1. Both parties desire to put an end to the litigation before this Honorable Court, and instead refer the above-entitled case back to Voluntary Arbitrator Florante V. Calipay for further hearing under the following terms and conditions: a) The petitioners will put up a bond in the amount of P6.5 Million to be issued by the Visayan Surety & Insurance Company or any other accredited bonding company acceptable to private respondents to secure payment of the decision dated March 15, 1997 (Annex A of the Petition) rendered by Voluntary Arbitrator Calipay. b) The case will be referred back to Voluntary Arbitrator Calipay so that the petitioners will be granted their day in court to prove their case, the hearing thereat to treat the following issues: 1. Whether or not the complainants mentioned in Exhibit J of the Decision really filed their complaints before the NLRC; 2. Whether or not complainants were dismissed; if so, whether or not their dismissals were valid;

3. Whether or not complainants are entitled to separation pay, money claims, attorney's fees and litigation costs specified in the decision, Annex A of the petition; and 4. Whether or not Robert Dino, Cristina Dino and Michael Dino can be held liable for the claims of complainants. WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court to approve the foregoing Stipulation and to render a resolution in accordance therewith. 4 The proceedings, however, were not continued because Voluntary Arbitrator Florante V. Calipay declared that he has lost jurisdiction over the case when he rendered judgment therein. 5 Worse, the Court of Appeals, in violation of the parties' aforesaid stipulation, issued on June 18, 1998 a resolution ordering the partial execution of the decision of the voluntary arbitrator with respect to the award of separation pay and attorney's fees. Petitioners assail the resolution ordering the partial execution of the decision of the voluntary arbitrator arguing that the Court of Appeals deprived them of their day in court when it disregarded their agreement with private respondents for the remand of the case. In our Decision, we ordered the remand of the case to the voluntary arbitrator for reception of evidence for the petitioners. We ruled that the award of separation pay cannot be executed before trial is terminated since to do so would be to preempt the proceedings before the voluntary arbitrator. It is worth noting that the case filed was for illegal dismissal. The affirmance of the award of separation pay would be tantamount to a judicial declaration that private respondents were indeed illegally dismissed. WHEREFORE, the Motion for Reconsideration, the Supplemental Motion for Reconsideration, and the 2nd Supplemental Motion for Reconsideration are DENIED for lack of merit. This denial is FINAL. SO ORDERED. Kapunan and Pardo, JJ., concur. Davide, Jr., C.J., joins Mr. Justice Puno in his dissent. Puno, J., please see Dissent. Separate Opinions PUNO, J., dissenting opinion: Private respondents seek the reconsideration of the Court's Decision dated March 26, 2001 remanding the case to Voluntary Arbitrator Florante V. Calipay for reception of evidence and further proceedings. In the Decision sought to be reconsidered, the Court held that petitioners were deprived of due process when the voluntary arbitrator rendered a ruling declaring that private respondents were illegally dismissed without giving them an opportunity to present evidence. The ruling was grounded on the fact that neither petitioners nor their counsel were able to attend the hearing before the voluntary

arbitrator set for March 3, 1997 at 3:00 o'clock in the afternoon because they received the notice thereof only at 4:00 o'clock in the afternoon of the same date. With due respect to the majority, I submit otherwise. A more prudent examination of the records would reveal that petitioners were given ample opportunity to present their arguments and their supporting evidence before the voluntary arbitrator but they refused to do so. It appears that the complaints for illegal dismissal, underpayment/non-payment of wages, overtime pay, holiday pay, 13th month pay and service incentive leave were initially filed by private respondents before the National Labor Relations Commission Regional Arbitration Branch VII (NLRC RAB), Cebu City in July 1995. 1 In November 1995, after initial hearings, the parties submitted their position papers. Summary hearing was held and the case was submitted for resolution. The parties were given ten (10) days to file memoranda. On October 11, 1996, Labor Arbiter Dominador Almirante issued an Order referring the case to the National Conciliation and Mediation Board (NCMB) for voluntary arbitration pursuant to Policy Instruction No. 56 of the Secretary of Labor dated April 6, 1996. 2 On December 19, 1996, Florante V. Calipay was designated as voluntary arbitrator upon agreement of the parties. 3 On December 27, 1996, Director Teodorico Yosores, Officer-in-Charge, NCMB Region VII, informed Voluntary Arbitrator Calipay that he had been chosen by both parties as their voluntary arbitrator and forwarded to him the pertinent forms. 4 On January 9, 1997, petitioners filed a motion for re-selection of voluntary arbitrator which was heard on January 17, 1997. 5 On January 23, 1997, a hearing was conducted by Voluntary Arbitrator Calipay. Private respondents and their counsel were present together with petitioners' counsel. Voluntary Arbitrator Calipay issued an Order dated January 21, 1997 denying petitioners' motion for re-selection, defining the issues, and requiring the parties to submit their respective position papers and evidence within fifteen (15) days or up to February 7, 1997, thus: "xxx xxx xxx

WHEREFORE, by virtue of the powers and duties vested upon me as voluntary arbitrator, I hereby order both parties to submit their respective position papers and evidence, within fifteen (15) days from today, treating the following issues: a) whether or not the voluntary arbitrator had been validly selected by the parties and/or whether the same arbitrator had validly assumed jurisdiction over the case? b) Whether or not the complaining workers were legally dismissed? If not, what are their rights and remedies under the law?

Failure of any party to submit their position paper and/or evidence within the set period would (be) tantamount to waiver of such party to present the same. The case shall then be considered submitted for immediate resolution based on the (sic) what would thus far be submitted. xxx xxx xxx." 6

On February 10, 1997, the voluntary arbitrator issued an Order extending the period to submit their position papers and evidence for ten (10) days or up to February 17, 1997, with a warning that it would be the last extension. He again advised the parties that failure to submit the required position paper and evidence within the set period would constitute a waiver. The Order read: "During the last hearing, this Voluntary Arbitrator granted the parties fifteen (15) days to submit their respective position papers and all evidence they wish to submit. This period ended on 7 February 1997. In order to afford both parties adequate time and leeway, this Office extends such period for another ten (10) days or up to 17 February 1997, Monday, to file the required pleadings and evidence. In order for this arbitrator to comply with his legal duty for speedy proceedings, this shall be the last extension. DHITcS The parties are therefore advised that failure to comply with this order and/or failure (to) submit their position paper and evidence on the set period shall constitute waiver to do so. No further evidence shall be received after 17 February 1997. After the extended deadline, the arbitrator shall decide whether or not clarificatory hearing or trial is necessary. If in his judgment, none is necessary, the case shall be declared submitted for resolution. Otherwise, hearing shall be set, after which the case shall be considered submitted for resolution." 7 Private respondents filed their position paper and supporting evidence by mail within the given period. Petitioners, however, failed to do so. Nonetheless, private respondents attached to their position paper a copy of petitioners' position paper submitted in the proceedings before the NLRC RAB. 8 On February 20, 1997, Voluntary Arbitrator Calipay conducted a hearing upon due notice to both parties. Neither petitioners nor their counsel were present. On the other hand, counsel for private respondents appeared and moved for early resolution of the case. 9 Thus, Voluntary Arbitrator Calipay issued an Order dated February 24, 1997 setting another hearing for March 3, 1997 and giving petitioners up to said date within which to submit their position paper and supporting evidence if they so desire. The Order stated: "xxx xxx xxx

The respondents should have been in default already to submit any additional pleading or evidence, the set deadline of 17 February 1997 having long elapsed. Besides, this Office already had a copy of their position paper and evidence they earlier filed with the NLRC RAB VII. But in the interest of justice and equity, this Office is giving respondents up to the last hearing to submit any if they so desire, which is set on 3 March 1997 at 3:00 P.M. at the NCMB Region VII Office. After such last hearing, this case shall be submitted for resolution without further delay pursuant to law.

it is clear that petitioners were given reasonable opportunity to submit their position paper and supporting evidence to the voluntary arbitrator. On February 10. petitioners cannot complain that their position was never ventilated before the arbitrator. Despite the two extensions. the parties had submitted their position papers to the NLRC RAB which held a summary trial. 11 From the foregoing. but again. Petitioners. 2. Ibid. I vote to GRANT the motion for reconsideration.xxx xxx xxx. 1997 and they were given fifteen (15) days within which to submit the same. In their petition before this Court. private respondents and their counsel were present. The first Order directing the parties to file their respective position papers and evidence was issued on January 23. 668-684. money claims and attorney's fees. the voluntary arbitrator issued another Order extending the period for ten (10) days. petitioners failed to show that they were actually prejudiced by the fact that they were not able to file their position paper or attend the hearing before the voluntary arbitrator. 12 The foregoing narration of the proceedings before the voluntary arbitrator clearly shows that petitioners were given an opportunity to present their evidence but they refused to avail of this opportunity without any legal reason. 1997. failed to comply with the Order within the extended period. The essence of due process in administrative proceedings is simply an opportunity to explain one's side or an opportunity to seek a reconsideration of an action or ruling complained of. . The voluntary arbitrator was furnished a copy of the position paper submitted by petitioners to the NLRC RAB in connection with the proceedings therein. 14 IN VIEW WHEREOF. neither petitioners nor their counsel appeared. petitioners cannot be considered as having been denied due process. pp. 1997. 1997. but chooses not to give his side.. Footnotes 1. In the Orders directing them to file their position papers. 730-734. petitioners still failed to submit the required paper. Thus. Rollo. Prior to the referral of the case to NCMB and to Voluntary Arbitrator Calipay. No new issues were raised before the voluntary arbitrator and the matters that need to be resolved have been sufficiently threshed out in the proceedings before the NLRC RAB." 10 During the hearing on March 3. separation pay. They did not even offer any explanation for their omission. Due process is not violated where one is given the opportunity to be heard. and the former considered said position paper in rendering his Decision. however. The voluntary arbitrator nonetheless gave petitioners another chance to submit their position paper and evidence until March 3. the fundamental rule of due process that mandates notice and an opportunity to be heard has been sufficiently met in this case. 13 In truth. the first period having lapsed. 1997. On March 15. the parties were warned that failure to submit the same within the given period would be considered as waiver. the voluntary arbitrator rendered a Decision holding that private respondents were illegally dismissed and awarding them backwages. pp. Under these circumstances.

pp. 286 SCRA 401 (1998). 44-45. p. Pepsi Cola Products Philippines. 126322 January 16. NLRC. 14. 69. 2. CA Rollo. 1997. CA Rollo. 43. pp.3.. G. NLRC. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. vs. Ibid. 48-49. vs. No. Ibid. 9. 125-126. 6. PUNO. p. Laguesma. CA Rollo. see documents and files submitted to the CA by Voluntary Arbitrator Calipay. ET AL. Sr. CA Rollo. CA Rollo. Cindy and Linsy Garment vs.INC.R. 142-173. pp. See Paper Industries Corporation of the Philippines vs. pp. Inc. 46. Records. 292 SCRA 478 (1998). Michael Academy vs. 5. CA Rollo. 11. Caurdanetaan Piece Workers Union vs. 40. 5. pp. dissenting: 1. . See Order issued by Voluntary Arbitrator Calipay dated February 24. 2002 YUPANGCO COTTON MILLS. 284 SCRA 38 (1998). 48-49. I n c. CA Rollo. 331 SCRA 82 (2000). CA Rollo. Laguesma. St. 4. 8. 33-39. p. CA Rollo. NLRC. vs. 7. 42.. 13. COURT OF APPEALS. p. pp. Aparente. 762-769.. NLRC. 4. pp. 12. pp. CA Rollo. Minutes of Hearing. 765 ff. J. p. pp. 300 SCRA 66 (1998). 131-141. 3. 10. 330 SCRA 295 (2000). CA Rollo.

" The . ". No. it filed an adverse claim with the NLRC. hence. VICTORIO. The Court of Appeals dismissed the petition on the ground of forum shopping and lack of jurisdiction. URBANO C. The Supreme Court annulled the sale on execution of the subject property and the subsequent sale of the same. rights and causes of action and reliefs sought. As a consequence. Camitan for private respondent Western Guaranty Corp.FIRST DIVISION [G. FORUM SHOPPING.] YUPANGCO COTTON MILLS. RTC Branch 50. Mendoza. The Court ruled that there was no forum shopping in the case at bar as there was no identity of parties. While the injunction case was pending before the NLRC. The trial court dismissed the complaint. two distinct causes of action and issues were raised. petitioner filed a complaint for accion reivindicatoria with the Regional Trial Court of Manila. the petitioner filed this appeal before the Supreme Court. COURT OF APPEALS. SR.. 2002. SAMAHANG MANGGAGAWA NG ARTEX (SAMAR-ANGLO) represented by its Local President RUSTICO CORTEZ. vs. . Manila. CONSTRUED. SYNOPSIS The petitioner alleged that a sheriff of the National Labor Relations Commission (NLRC) erroneously levied upon certain properties which it claims ownership. RODRIGO SY MENDOZA. In the meantime. and two objectives were sought. respondents. we held: "What is truly important to consider in determining whether forum shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same reliefs. "There is no forum-shopping where two different orders were questioned. The case before the NLRC was a labor case on which petitioner was not a party. 126322. Court of Appeals.. petitioner filed an original mandatory injunction with the NLRC. petitioner brought the case to the Court of Appeals. INC. HON. for private respondent SAMAR-ANGLO & R. REMEDIAL LAW. Ermitaño Sangco Manzano & Associates for petitioner. Presiding Judge. SYLLABUS 1. and one will not preclude the third party from availing himself of the alternative remedies in the event he failed in the remedy first availed of. — In Golangco v. while the reivindicatoria case filed by the petitioner in the trial court was to recover the property illegally levied upon and sold at public auction. cHATSI The Supreme Court reversed the decision of the Court of Appeals. ACTIONS. Upon denial of the motion for reconsideration. Jr. . which was dismissed by the labor arbiter.R. and WESTERN GUARANTY CORPORATION. Potenciano Flores. Ninfa P. The Court also ruled that a third party may avail himself of alternative remedies cumulatively. in the process creating possibility of conflicting decisions being rendered by the different for a upon the same issues. The dismissal was appealed by the petitioner to the NLRC. but the same was also dismissed for lack of merit. petitioner. January 16.

. J p: . In Chemphil Export & Import Corporation v.. he could not. and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. of seeking another (and possible) opinion in another forum (other than by appeal or the special civil action of certiorari). Court of Appeals. we ruled that: "Forum-shopping or the act of a party against whom an adverse judgment has been rendered in one forum. a third party may still file a proper action with a competent court to recover ownership of the property illegally seized by the sheriff. This finds support in Section 17 (now 16). ID. the filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the Regional Trial Court. In light of the above. or complaint for damages to be charged against the bond filed by the judgment creditor in favor of the sheriff. but should file a separate reivindicatory action against the execution creditor or the purchaser of the property after the sale at public auction. Rule 39." A separate civil action for recovery of ownership of the property would not constitute interference with the powers or processes of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. appeal from the order denying his claim. ID. Such reivindicatory action is reserved to the third-party claimant. MAY AVAIL OF SEVERAL ALTERNATIVE REMEDIES FOR THE PROTECTION OF HIS INTEREST. The appeal that should be interposed if the term 'appeal' may properly be employed. and b) If the third party claim is denied. the third party may appeal the denial to the NLRC.. is a separate reivindicatory action against the execution creditor or the purchaser of the property after the sale at public auction. And. The property levied upon being that of a stranger is not subject to levy.rule is that "for forum-shopping to exist both actions must involve the same transactions. — Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of the parties to the action. Even if a third party claim was denied. ID." DTAcIa 2. THIRD PARTY CLAIMANT. ID. 3. Cayetano. And in Lorenzana v. ID. a separate action for recovery. FILING OF SEPARATE CIVIL ACTION FOR RECOVERY OF OWNERSHIP OF THE PROPERTY LEVIED SHOULD NOT BE CONSIDERED INTERFERENCE UPON THE MAIN ACTION. Thus. Thus. subject matter and issues. but in a separate action to be instituted by the third person. The third party may avail himself of alternative remedies cumulatively. — A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. we ruled that: "The rights of a third-party claimant should not be decided in the action where the third-party claim has been presented.. or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other would make a favorable disposition. the same circumstances.. upon a claim and prima-facie showing of ownership by the petitioner. cannot be considered as interference. Revised Rules of Court. The actions must also raise identical causes of action. the institution of such complaint will not make petitioner guilty of forum shopping. aDSHIC DECISION PARDO. or a complaint for damages against the bond filed by the judgment creditor in favor of the sheriff. a third party may avail himself of the following alternative remedies: a) File a third party claim with the sheriff of the Labor Arbiter. strictly speaking.

If filed an original petition for mandatory injunction with the NLRC on November 16. It appealed to the NLRC the order of the Labor Arbiter dated August 13. the Court of Appeals promulgated a decision 3 dismissing the petition on the ground of forum shopping and that petitioner's remedy was to seek relief from this Court. 1995. which was dismissed on August 30. 1995. which is that it is the owner of the properties located in the compound and buildings of Artex Development Corporation. The Regional Trial Court dismissed the case on October 11." 2 On March 29. This was docketed as Case No. It filed a complaint in the Regional Trial Court in Manila which was docketed as Civil Case No. petitioner raised a common issue. This case is still pending with that Commission. 1995 which dismissed the appeal for lack of merit on December 8. "4. 95-75628 on October 6. CEASaT The Facts The facts. petitioner filed with the Court of Appeals a motion for reconsideration of the decision. The dismissal of this case by public respondent triggered the filing of the instant petition. 4 Petitioner argued that the filing of a complaint for accion reivindicatoria with the Regional . 00-05-02960-90. It filed a petition for certiorari and prohibition with the Regional Trial Court of Manila. the Court of Appeals sustained the trial court's ruling that the remedies granted under Section 17. which were erroneously levied upon by the sheriff of the NLRC as a consequence of the decision rendered by the said Commission in a labor case docketed as NLRC-NCR Case No. are as follows: "From the records before us and by petitioner's own allegations and admission. NLRC-NCR-IC. not certiorari or mandamus. 1995. 1996. Rule 39 of the Rules of Court are not available to the petitioner because the Manual of Instructions for Sheriffs of the NLRC does not include the remedy of an independent action by the owner to establish his right to his property. 1995. "2.The Case The case is a petition for review on certiorari of the decision of the Court of Appeals 1 dismissing the petition ruling that petitioner was guilty of forum shopping and that the proper remedy was appeal in due course. as found by the Court of Appeals. In its decision. "6. 1996. 1995. On April 18. "In all of the foregoing actions. "3. "5. it has taken the following actions in connection with its claim that a sheriff of the National Labor Relations Commission "erroneously and lawfully levied" upon certain properties which it claims as its own. 0000602-95. Branch 49. It filed an Affidavit of Adverse Claim with the National Labor Relations Commission (NLRC) on July 4. It filed a notice of third-party claim with the Labor Arbiter on May 4. 1995. 1995 for lack of merit. "1. 9576395. by the Labor Arbiter. docketed as Civil Case No.

Trial Court was proper because it is a remedy specifically granted to an owner (whose properties were subjected to a writ of execution to enforce a decision rendered in a labor dispute in which it was not a party) by Section 17 (now 16). two distinct causes of action and issues were raised. Revised Rules of Court and by the doctrines laid down in Sy v. the Court of Appeals denied petitioner's motion for reconsideration. 9 The Issues The issues raised are (1) whether the Court of Appeals erred in ruling that petitioner was guilty of forum shopping. and (2) whether the Court of Appeals erred in dismissing the petitioner's accion reivindicatoria on the ground of lack of jurisdiction of the trial court. petitioner pointed out that neither the NLRC nor the Labor Arbiter is empowered to adjudicate matters involving ownership of properties. in the process creating possibility of conflicting decisions being rendered by the different for a upon the same issues. AECacS On August 27. Bayhon 6 and Manliguez v. Discaya. 10 we held: "What is truly important to consider in determining whether forum shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same reliefs. this appeal. ." (Italics ours) In the case at bar. were entirely distinct and separate from the reliefs sought and the issues involved in the proceedings before the Labor Arbiter and NLRC. Court of Appeals. 1996. not a party to the labor case. and two objectives were sought. 8 Hence. there was no identity of parties. In Golangco v. Besides. The only issue petitioner raised before the NLRC was whether or not the writ of execution issued by the labor arbiter could be satisfied against the property of petitioner. The case before the NLRC where Labor Arbiter Reyes issued a writ of execution on the property of petitioner was a labor dispute between Artex and Samar-Anglo. rights and causes of action and reliefs sought. Court of Appeals. 5 Santos v. presided over by respondent judge. we rule that there was no forum shopping. petitioner argued that the reliefs sought and the issues involved in the complaint for recovery of property and damages filed with the Regional Trial Court of Manila. The Court's Ruling On the first issue raised. Rule 39. Petitioner was not a party to the case. 7 In addition. "xxx xxx xxx "There is no forum-shopping where two different orders were questioned.

The rule is that "for forum-shopping to exist both actions must involve the same transactions. The actions must also raise identical causes of action. . to any third-party claimant unless a claim is made by the latter and unless an action for damages is brought by him against the officer within one hundred twenty (120) days from the date of the filing of the bond. indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. "The officer is not liable for damages. a third party may avail himself of the following alternative remedies: a) b) File a third party claim with the sheriff of the Labor Arbiter. the officer shall not be bound to keep the property. and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. on demand of the officer. the same shall be determined by the court issuing the writ of execution. the causes of action in these cases were different. 17 (now 16). unless such judgment creditor or his agent. Rule 39. and such person makes an affidavit of his title thereto or right to the possession thereof. — If property claimed by any other person than the judgment debtor or his agent. and a copy thereof upon the judgment creditor. subject matter and issues.On the other hand. and If the third party claim is denied. This finds support in Section 17 (now 16). a third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. and serve the same upon the officer making the levy. the accion reivindicatoria filed by petitioner in the trial court was to recover the property illegally levied upon and sold at auction. or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other would make a favorable disposition. Court of Appeals. stating the grounds of such right or title. Revised Rules of Court. Proceedings where property claimed by third person. In case of disagreement as to such value. to wit: cADTSH "SEC." On the second issue. 13 Even if a third party claim was denied. the same circumstances. Hence. 12 we ruled that: "Forum-shopping or the act of a party against whom an adverse judgment has been rendered in one forum. a third party may still file a proper action with a competent court to recover ownership of the property illegally seized by the sheriff. Thus. of seeking another (and possible) opinion in another forum (other than by appeal or the special civil action of certiorari). But nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property by any proper action. the third party may appeal the denial to the NLRC." 11 In Chemphil Export & Import Corporation v. for the taking or keeping of the property. The third party may avail himself of alternative remedies cumulatively.

et. "The aforesaid remedies are nevertheless without prejudice to 'any proper action' that a third-party claimant may deem suitable to vindicate 'his claim to the property. and in case the sheriff or levying officer is sued for damages as a result of the levy. An action for damages may be brought against the sheriff within one hundred twenty (120) days from the filing of the bond. by serving on the officer making the levy an affidavit of his title and a copy thereof upon the judgment creditor.' "Quite obviously. the claim will be denied. Rule 39. more specifically. obviously. Discaya. if the claimant's proof do not persuade the court of the validity of his title or right of possession thereto. The court does not and cannot pass upon the question of title to the property. too. It can require the sheriff to restore the property to the claimant's possession if warranted by the evidence. a third-party claimant may also avail of the remedy known as 'terceria. 14 we ruled that: "The right of a third-party claimant to file an independent action to vindicate his claim of ownership over the properties seized is reserved by Section 17 (now 16). or any officer duly representing it. with any character of finality. is limited to a determination of whether the sheriff has acted rightly or wrongly in the performance of his duties in the execution of judgment. and it may be brought against the sheriff and such other parties as may be alleged to have colluded with him in the supposedly wrongful . the actual damages adjudged by the court shall be paid by the National Treasurer out of such funds as may be appropriated for the purpose. if he has indeed taken hold of property not belonging to the judgment debtor. entirely distinct from that explicitly prescribed in Section 17 of Rule 39. What said court do in these instances.' Such a 'proper action' is. however. indemnifies the officer against such claim by a bond in a sum not greater than the value of the property levied on. on demand of the officer. is the Republic of the Philippines." (Italics ours) In Sy v. al. which is an action for damages brought by a third-party claimant against the officer within one hundred twenty (120) days from the date of the filing of the bond for the taking or keeping of the property subject of the 'terceria.' provided in Section 17 (now 16). Tating. this 'proper action' would have for its object the recovery of ownership or possession of the property seized by the sheriff. However.. a third person whose property was seized by a sheriff to answer for the obligation of a judgment debtor may invoke the supervisory power of the court which authorized such execution. It can treat of the matter only insofar as may be necessary to decide if the sheriff has acted correctly or not. the court may command that the property be released from the mistaken levy and restored to the rightful owner or possessor. Upon due application by the third person and after summary hearing. he shall be represented by the Solicitor General and if held liable therefor. construing the aforecited rule. unless such judgment creditor or his agent."When the party in whose favor the writ of execution runs. as well as damages resulting from the allegedly wrongful seizure and detention thereof despite the third-party claim. . . the filing of such bond shall not be required. "Independent of the above-stated recourse. The officer shall not be bound to keep the property.: "xxx xxx xxx "As held in the case of Ong v. Rule 39 of the Rules of Court. .

121 SCRA 748). if instituted by a stranger to the latter suit. 133 SCRA 141 [1984]). However. applies only when no third-party claimant is involved (Traders Royal Bank v. In such proper action. Centro La Paz. And. 1-313-85 in favor of Kamapi. "The general rule that no court has the power to interfere by injunction with the judgments or decrees of another court with concurrent or coordinate jurisdiction possessing equal power to grant injunctive relief. the latter not being a condition sine qua non for the former. Labor Arbiter Santos and the NLRC Sheriff filed a motion to dismiss the civil case instituted by respondent Carrera on the ground that the Regional Trial Court did not have jurisdiction over the labor case. Nevertheless. Eventually. the validity and sufficiency of the title of the third-party claimant will be resolved and a writ of preliminary injunction against the sheriff may be issued. respondent Carrera filed with Regional Trial Court. we ruled that: ". The power of the NLRC to execute its judgments extends only to properties unquestionably belonging to the judgment debtor (Special Servicing Corp. Consequently. with the court of competent jurisdiction even before or without need of filing a claim in the court which issued the writ. Bayhon. distinct and separate from that in which the judgment is being enforced.' as above pointed out. The trial court issued an order enjoining the enforcement of the writ of execution over the properties claimed by respondent Carrera pending the determination of the validity of the sale made in her favor by the judgment debtor Poly-Plastic Products and Anthony Ching. such as the judgment creditor himself. Such 'proper action. the institution of such complaint will not make petitioner guilty of forum shopping." (Emphasis and italics supplied) In light of the above. Labor Arbiter Santos issued an order allowing the execution to proceed against the property of Poly-Plastic Products. 15 In Santos v. the filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the Regional Trial Court. the NLRC Sheriff proceeded with the public auction sale. or a stranger to the action. When a third-party. respondent Priscilla Carrera filed a third-party claim alleging that Anthony Ching had sold the property to her. In dismissing the petition for certiorari filed by Labor Arbiter Santos. v. . . the NLRC affirmed the decision. Manila an action to recover the levied property and obtained a temporary restraining order against Labor Arbiter Diosana and the NLRC Sheriff from issuing a certificate of sale over the levied property. is and should be an entirely separate and distinct action from that in which execution has issued. "The remedies above mentioned are cumulative and may be resorted to by a third-party claimant independent of or separately from and without need of availing of the others. Kamapi obtained a writ of execution against the properties of Poly-Plastic products or Anthony Ching. If a third-party claimant opted to file a proper action to vindicate his claim of ownership.. upon posting by the judgment creditor of an indemnity bond. the claimant may vindicate his claim by an independent action in the . Thereafter. asserts a claim over the property levied upon. he must institute an action.execution proceedings. Also. Intermediate Appellate Court. 16 wherein Labor Arbiter Ceferina Diosana rendered a decision in NLRC NCR Case No.

18 we ruled that: "The rights of a third-party claimant should not be decided in the action where the third-party claim has been presented. Thus. cannot be considered as interference. the Court REVERSES the decision of the Court of Appeals and the resolution denying reconsideration. . . the Court renders judgment ANNULLING the sale on execution of the subject property conducted by NLRC Sheriff Anam Timbayan in favor of respondent SAMAR-ANGLO and the subsequent sale of the same to Rodrigo Sy Mendoza. Cayetano. but in a separate action to be instituted by the third person. The appeal that should be interposed if the term 'appeal' may properly be employed. the private respondent did not take any title to the properties sold thereunder . The Fallo WHEREFORE." (Italics ours) HTDcCE Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of the parties to the action. A sale unless preceded by a valid levy is void. or complaint for damages to be charged against the bond filed by the judgment creditor in favor of the sheriff. we ruled that: "The well-settled doctrine is that a 'proper levy' is indispensable to a valid sale on execution. 193 SCRA 158 [1991]. except the Court of Appeals. "A person other than the judgment debtor who claims ownership or right over the levied properties is not precluded. 19 In lieu thereof. Therefore. upon a claim and prima-facie showing of ownership by the petitioner. from taking other legal remedies. Court of Appeals. however. since there was no sufficient levy on the execution in question. 17 And in Lorenzana v. he could not. Rodrigo Sy Mendoza." (Italics ours) In Consolidated Bank and Trust Corp. strictly speaking. Costs against respondents. Such reivindicatory action is reserved to the third-party claimant.. v. a separate action for recovery." A separate civil action for recovery of ownership of the property would not constitute interference with the powers or processes of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. The Court declares the petitioner to be the rightful owner of the property involved and remands the case to the trial court to determine the liability of respondents SAMAR-ANGLO. and WESTERN GUARANTY CORPORATION to pay actual damages that petitioner claimed. . is a separate reivindicatory action against the execution creditor or the purchaser of the property after the sale at public auction. appeal from the order denying his claim. The property levied upon being that of a stranger is not subject to levy.proper civil court which may stop the execution of the judgment on property not belonging to the judgment debtor. but should file a separate reivindicatory action against the execution creditor or the purchaser of the property after the sale of public auction. or a complaint for damages against the bond filed by the judgment creditor in favor of the sheriff.

pp. Jr. In CA-G. SP No. 39700. 10. v. 382 [1990]. Annex "B". 7. 19. 771 [1997]. Annex "A". pp. pp. Note 1. filed on September 27. 63 SCRA 355 [1975].. 510 [1995]. . International Container Terminal Services. Court of Appeals. Supra. Petition. Note 8. Footnotes 1.. ponente. concurring. 15. 1996. 73-76.SO ORDERED. 410-438. 2. 4. JJ. Agana. 724-727). Bayer Philippines.R. 232 SCRA 427.. 65-76. Manliguez v. Petition. 1999. 17. concurring. Kapunan and Ynares-Santiago. 199 SCRA 252 [1991]. Rollo. CA Rollo. Section 2. 8. J. JJ. Court of Appeals.J. Petition. Puno. I n c. 65-71. at pp. Inc. 14. 67-68. 18. 78 SCRA 425 [1977]. 9. JJ. In CA-G. Inc. Note 7. v.. Supra. Jr. Petition. Abad Santos. 1996. pp. 6. Annex "A". On October 18.R. Abad Santos. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. 181 SCRA 378. 13. J. Rollo. Davide. 431-432 [1994]. 39700. 3. 4-63. and Agcaoili. and Agcaoili.. 5. we gave due course to the petition (Rollo. ponente. pp. Verzola.. concur. 319 Phil. promulgated on March 29.. 231 SCRA 257 [1994]. Supra. 232 SCRA 427 [1994]. Verzola. Rule VI of the Manual of Instructions for Sheriffs of the NLRC. SP No. Jr. 11. 16. pp. Rollo. 347 Phil. 12. Rollo. C.

Rule 65 of the Rules of Court is procedural or remedial in character and does not create new rights nor remove vested ones. 2000. this petition. an affiliate of the petitioner corporation. THIRD DIVISION [G. the sixty (60) day period shall be counted from notice of the denial of the said . In case a motion for reconsideration or new trial is timely filed. ET AL. which took effect on September 1. after Congress passed a law providing a liberal retirement benefits for the employees in the private sector. 144978 January 15. 144978. may be given retroactive effect. order or resolution. — The prevailing rule at the time was the July 21. the Rule was amended by this Court in AM No. The labor arbiter decided in favor of the private respondents. which had amended Section 4. NATIONAL LABOR RELATIONS COMMISSION. — The petition shall be filed not later than sixty (60) days from notice of the judgment. COURT OF APPEALS. When and where petition filed. According to the Court. LIBORIO VILLAFLOR and RONALDO CARDINALES. Petitioners filed a motion for reconsideration. 803. CARLOS YGAÑA. EFFECT THEREOF. No. petitioners. By virtue of this retroactive effect. The issue involved herein is whether or not the petition for certiorari is dismissible for being out of time. ET AL. 2002 UNIVERSAL ROBINA CORP. vs. respondents. The sixty-day period within which to file a petition for certiorari is reckoned from the receipt of the resolution denying the motion for reconsideration. 4. They were granted retirement benefits based on the company's retirement plan. The decision was affirmed by the NLRC. the subject petition herein was filed on time. Hence. AMENDMENT TO SECTION 4.. APPLICATION IN CASE AT BAR.G. However. However. whether such motion is required or not. RULE 65 OF THE RULES OF COURT IS PROCEDURAL IN CHARACTER. and/or LANCE Y. SYNOPSIS Private respondents herein were former employees of CFC Corporation. COURT OF APPEALS. CERTIORARI. petitioners filed a petition for review with the Court of Appeals. Hence. which was denied with finality. GOKONGWEI.] UNIVERSAL ROBINA CORPORATION.R. 2002. SYLLABUS REMEDIAL LAW. hence. The Court of Appeals dismissed the petition for having been filed out of time. 1998 resolution in Bar Matter No. January 15. Rule 65 of the Rules of Court. Juanitas Perez Bolos and Associates for petitioners. and the case was remanded to the Court of Appeals for further proceedings. the amendment to Section 4. vs. the Rule now reads as follows: "SEC. cIaCTS The Supreme Court granted the petition. No. they filed a consolidated complaint claiming for the retroactive entitlement to the enlarged benefits. 00-2-03-SC. As amended.R.

Congress enacted Republic Act No.46." (Italics supplied) The amendment under AM No. Labor Arbiter Eduardo J.743. which provided more liberal retirement benefits for employees in the private sector. 00-2-03-SC is procedural or remedial in character. Villaflor — P44. The Facts Respondents Carlos C. 1999 in favor of respondents. we have already ruled that the sixty-day period shall be reckoned from the receipt of the resolution denying the motion for reconsideration.motion. 2000 Resolutions 1 of the Court of Appeals (CA) in CA-GR SP No. Liborio Villaflor and Ronaldo Cardinales were employees of CFC Corporation. seeking to annul the May 18. AaIDHS DECISION PANGANIBAN. the instant petition is hereby DENIED due course and is ordered DISMISSED. Carpio rendered a Decision on January 15.55. thus.494. under the company's retirement plan. 7641. The Case Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. The first assailed Resolution disposed as follows: "WHEREFORE. premises considered. Consequently." 2 The second Resolution 3 denied petitioners' Motion for Reconsideration. they were granted. After proper proceedings. claiming retroactive entitlement to the enlarged benefits granted by RA 7641. 58695. The dispositive portion reads as follows: "WHEREFORE. It operates only in furtherance of the remedy or in confirmation of rights already existing. on the ground that rules regulating procedures should be made applicable to actions pending and undetermined at the time of their passage. contained in AM No. and Cardinales — P85. 2000 and August 21. an affiliate of the petitioner. / IEaHSD On January 7.456. J p: The sixty-day period within which to file a petition for certiorari is reckoned from the receipt of the resolution denying the motion for reconsideration. deemed applicable even if a petition had been filed before September 1. This amendment. 1993." 4 .86. 2000. Universal Robina Corporation. Upon retiring at the age of 60. benefits equivalent to one-half (1/2) month pay for every year of service. 00-2-03-SC. judgment is hereby rendered ordering [Petitioner] Universal Robina Corporation to pay [respondents] as follows: Ygana — P67. it is given retroactive effect. In a number of cases. respondents filed a consolidated Complaint before the National Labor Relations Commission (NLRC). Ygaña. It does not create new rights or remove vested ones.

but from receipt of the decision. 2000. 7 petitioners raise this lone issue: "Whether or not the Petition for Certiorari filed by the petitioners in CA G. 6 The Issue In their Memorandum. 1999 NLRC Resolution. On May 15. which the NLRC denied with finality via its December 29. 1999 Resolution. This rule does not contemplate that the 60-day period shall be counted from receipt of the motion for reconsideration. 58695 is dismissed for being filed out of time. aTcESI Ruling of the Court of Appeals In dismissing the Petition. reckoned from notice of such denial. In any event. order or resolution. the CA promulgated the first assailed Resolution dismissing the Petition for having been filed out of time. 2000. order or resolution sought to be assailed. which as earlier pointed out should not be the case. — If the petitioner had filed a motion for new trial or reconsideration in due time after notice of said judgment. a copy of which was received by petitioners on November 11. On May 18. ' "In the instant case." 8 The Court's Ruling . the labor arbiter was affirmed in the September 30. 1999.On February 26. . 1999. Petitioners received the resolution denying their motion for reconsideration on 14 March 2000 and filed the present petition only on 15 May 2000. . Clearly. If the motion is denied. Apparently. 1999. SP No. A copy of the Resolution was received by petitioners on June 23. since petitioners received the assailed NLRC Resolution on 11 November 1999 and filed their motion for reconsideration on 15 November 1999. this Petition." 5 Hence. This Resolution was received by petitioners on March 14. petitioners filed the subject Petition for Certiorari with the Court of Appeals. petitioners filed a Motion for Reconsideration. the period herein fixed shall be interrupted. but which shall not be less than five (5) days. Where And When Petition To Be Filed. the aggrieved party may file the petition within the remaining period. In due course. 4. the CA held: "Section 4. 2000. On November 15. four (4) days had elapsed.R. Rule 65 of the 1997 Rules of Civil Procedure provides that a special civil action for certiorari may be filed not later than sixty (60) days from notice of the judgment. 2000. . Such construction was made clear in the amendatory rule contained in Supreme Court En Banc Resolution dated 21 July 1998 which pertinently reads: 'SEC. petitioners interposed an appeal to the NLRC. petitioners reckoned the 60-days prescribed period for filing petition for certiorari from receipt of the resolution denying their motion for reconsideration. the petition was filed 6 days late..

. the CA did not err in dismissing the Petition.. whether such motion is required or not. HacADE Strictly speaking. When and where petition filed. it is given retroactive effect. order or resolution. — The petition may be filed not later than sixty (60) days from notice of the judgment. No.M.M. On March 14. the sixty (60) day period shall be counted from notice of the denial of the said motion. which had amended Section 4. Where and when petition to be filed. the Rule was amended by this Court in A. we hold that the Petition for Certiorari was filed on time. 4. the 60th day from the date on which they received the denial of their Motion for Reconsideration was May 13. had until May 15 — or the next working day. was deemed applicable even if a petition had been filed before September 1. Rule 65 of the Rules of Court. 2000. No. It does not create new rights or remove vested ones. They then filed with the CA their Petition for Certiorari on May 15. contained in AM No. but which shall not be less than five (5) days in any event. They. By virtue of this retroactive effect. 00-2-03-SC is procedural or remedial in character." However. order or resolution." (Italics supplied) The amendment under A. petitioners received a copy of the NLRC Resolution denying their Motion for Reconsideration. 00-2-03-SC. No extension of time to file the petition shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days. reckoned from notice of such denial. which was a Monday — to file their petition. Main Issue: Computation of the Period to File Petition Petitioners pray for liberality in the computation of the reglementary period within which to file a petition for certiorari under Section 4. 2000. As amended. In case a motion for reconsideration or new trial is timely filed. If the motion is denied. we have already ruled that the sixty-day period shall be reckoned from the receipt of the resolution denying the motion for reconsideration. thus. the Rule now reads as follows: 10 "SEC. 803. therefore. . 2000. Rule 65 of the Rules of Court.The Petition is meritorious. 4. order or resolution sought to be assailed. because the prevailing rule at the time was the July 21. on the . . which fell on a Saturday. the aggrieved party may file the petition within the remaining period. It operates only in furtherance of the remedy or in confirmation of rights already existing. 002-03-SC. 1998 Resolution in Bar Matter No. 2000. TCEaDI In a number of cases. "If the petition had filed a motion for new trial or reconsideration in due time after notice of said judgment. 11 This amendment. the period herein fixed shall be interrupted. which took effect on September 1. — The petition shall be filed not later than sixty (60) days from notice of the judgment. 9 as follows: "SEC. Strictly speaking.

1998. 2000. Circular No. upon this Court's receipt of the Memorandum for Petitioners. Villaflor and Cardinales. No. Circular No. No. 8. rollo. Unity Fishing Development Corp. No. 3. 4. and Pfizer Inc. February 2. 29. Both penned by Justice Buenaventura J. 7. G. Rollo. JJ. 10. G. v. chairman of the Seventh Division. 39-98. 143789. pp. 5. 2002 . Footnotes 1. The case was deemed submitted for decision on May 30. p..R. v Court of Appeals. No costs. 143389.R. 145415. G. 9. p. The Memorandum for Respondents. Galan.ground that rules regulating procedures should be made applicable to actions pending and undetermined at the time of their passage. Ibid. Flores Jr. C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a. Systems Factors Corporation v. May 25. of Juanitas Perez Bolos & Associates. 11. I n c. Rollo. with the concurrence of JJ. 6-7. concur. Rollo. 12 WHEREFORE. 2000 Resolution. 64. August 19. 2001. pp. September 5. Hilarion L. Rollo. Edgardo L. 2001. p. p. November 27. Melo. CSIcTa SO ORDERED. 2000. Aquino and Mercedes Gozo-Dadole. 21. 4. May 18. 56-2000. G. 12. pp. 1-2. The Memorandum for Petitioners was signed by Atty. National Labor Relations Commission. was filed on April 5.R. the Petition is hereby GRANTED and the assailed Resolutions SET ASIDE. p. signed by Respondents Ygaña. 6. 2001. Sandoval-Gutierrez and Carpio. 23. No. 143686 January 15. 2001. p. The case is REMANDED to the Court of Appeals for further proceedings. 5. 2. members. Vitug. 20-21.R. Guerrero.

INC. 143686. SYLLABUS LABOR AND SOCIAL LEGISLATION. According to the Court. The Secretary upheld PAL's action of unilaterally retiring Captain Collantes. this Court held: The aforestated sections explicitly declare.. vs. In the earlier case of Bulletin Publishing Corp. RETIREMENT. Alonso-Antonio and Partners for private respondent. respondent.PHILIPPINE AIRLINES. — The option of an employer to retire its employees is recognized as valid. TERMINATION OF EMPLOYMENT BY EMPLOYER. Reyes and Alex B. 2002. Upon denial of its petition and motion for reconsideration by the Court of Appeals. Sanchez.] PHILIPPINE AIRLINES. vs. HSaIDc The Supreme Court granted the petition of PAL. PAL filed a petition for certiorari with the Court of Appeals. AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES. Carpela. The order of the Secretary of DOLE was modified in that the basis of the retirement benefits should be based on the petitioner's own retirement plan and not under the provision of the Labor Code as the former would be beneficial to Captain Collantes. Jr. Also. The motion for reconsideration was denied by the Secretary. The Secretary also added that PAL should first consult the pilot concerned before implementing his retirement. petitioner. REQUIREMENT TO CONSULT EMPLOYEES PRIOR TO THEIR RETIREMENT DEFEATS THE EXERCISE BY MANAGEMENT OF ITS OPTION TO RETIRE THE SAID EMPLOYEES. Eduardo R. Cenizaa. INC. Hence. AIRLINE PILOTS ASSOCIATION OF THE PHIL. Nelson M. No. The Solicitor General for public respondent. FIRST DIVISION [G. The Secretary of DOLE assumed jurisdiction over the labor dispute. RATIONALE. January 15. v. And where . the option of an employer to retire its employees was recognized as valid and the requirement to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees. in no uncertain terms. that retirement of an employee may be done upon initiative and option of the management.R. Respondent (ALPAP) contended that the retirement of Captain Collantes constituted illegal dismissal and union busting. SYNOPSIS The labor dispute herein stemmed from the petitioner's (PAL) act of retiring airline pilot Captain Albino Collantes under their own (PAL-ALPAP) retirement plan. respondent filed a notice of strike with the Department of Labor and Employment (DOLE). He further ordered that the computation of the retirement benefits should be based on the Labor Code and not the PAL-ALPAP retirement plan. LABOR RELATIONS. for petitioner. PAL filed this petition for review with the Supreme Court. the directive requiring PAL to consult the pilot involved before exercising its option to retire him was deleted. Thus.

That there were numerous instances wherein management exercised its option to retire employees pursuant to the aforementioned provisions. 1998. Furthermore. when the Secretary of Labor and Employment imposed the added requirement that petitioner should consult its pilots prior to retirement. The Secretary further ordered that the basis of the computation of Captain Collantes' retirement benefits should be Article 287 of the Labor Code (as . 1991 of the Secretary of Labor and Employment in NCMB-NCR-N. Contending.R. The fact that there are some supervisory employees who have not yet been retired after 25 years with the company or have reached the age of sixty merely confirms that it is the singular prerogative of management. It seems only now when the question of the legality of a supervisors union has arisen that private respondents attempt to inject the dubious theory that the private respondents are entitled to form a union or go on strike because there is allegedly no retirement policy provided for their benefit. (PAL) and respondent Airline Pilots Association of the Philippines (ALPAP).there are cases of voluntary retirement. 2000 Decision 1 and the June 19. Article VII. the requirement to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees. It gives the pilot concerned an undue prerogative to assail the decision of management. stemmed from petitioner's act of unilaterally retiring airline pilot Captain Albino Collantes under Section 2. Pursuant to Article 263 (g) of the Labor Code. the Secretary of Labor overstepped the boundaries of reason and fairness when he imposed on petitioner the additional requirement of consulting each pilot prior to retiring him. inter alia. that the retirement of Captain Collantes constituted illegal dismissal and union busting. of the 1967 PAL-ALPAP Retirement Plan. he resolved a question which was outside of the issues raised. thereby depriving petitioner an opportunity to be heard on this point. the Secretary of the DOLE (hereafter referred to as Secretary) assumed jurisdiction over the labor dispute. the Secretary issued the assailed order upholding PAL's action of unilaterally retiring Captain Collantes and recognizing the same as a valid exercise of its option under Section 2. the exclusive bargaining representative of all commercial airline pilots of petitioner.S. As above noted. to retire supervisors or rank-and-file members when it deems fit. appears to be a fact which private respondents have not controverted. Hence. the same is effective only upon the approval of management. of the 1967 PAL-ALPAP Retirement Plan. TDcEaH On June 13. 1998 and Resolution 5 dated June 1. 54403 which affirmed the Order 4 dated June 13. 2000 Resolution 2 of the Court of Appeals 3 in CA-G. The instant labor dispute between petitioner Philippine Airlines. Due process only requires that notice be given to the pilot of petitioner's decision to retire him. Inc. J p: This is a petition for review on certiorari seeking to annul and set aside the March 2. at its option. Article VII. There should be no unfair labor practice committed by management if the retirement of private respondents were made in accord with the agreed option. ALPAP filed a Notice of Strike with the Department of Labor and Employment (DOLE). SP No. this assertion does not appear to have any factual basis. 12-514-97. ECcTaH DECISION YNARES-SANTIAGO. Surely.

PAL should first consult the pilot concerned before implementing his retirement. 12514-97. contending that: I THE QUESTION OF WHETHER OR NOT THE AMOUNT OF RETIREMENT PAY TO BE PAID UNDER SECTION 2. PAL filed with the Court of Appeals a petition for certiorari with prayer for injunction and temporary restraining order. In the interest of justice. 1999. the retirement benefits provided under Section 2 shall be adjusted to comply with Section 5. Article 1 of the PAL-ALPAP Collective Bargaining Agreement is limited only to union dues and other fees and assessments which are rightfully remitted to and are due ALPAP. 1998. it shall consult the pilot involved before the retirement is implemented. is hereby sustained.amended by Republic Act No. 1991. Article VII. The department takes notice of the Ex-parte Manifestation filed by PAL on June 10. this Office holds that whenever PAL exercises its option under Section 2. of Republic Act No. Hence. respectively. On September 24. (3) and PAL is not guilty of gross violation of the CBA insofar as the Wet Lease Agreement is concerned. PAL appealed to this Court. of the PAL-ALPAP Retirement Plan. premises considered. SO ORDERED. Article VII of the 1976 Retirement Plan. The above disposition shall be without prejudice to the parties' arriving at a voluntary settlement of the dispute. however. 7641. the National Conciliation and Mediation Board (NCMB) is hereby directed to continue assisting the parties in arriving at such a settlement. 2000. II . (4) The coverage of Section 6. Accordingly. The dispositive portion of the said order reads: WHEREFORE. this Office hereby issues the following resolutions: (1) PAL's action on Captain Albino Collantes is hereby recognized as a valid exercise of its option under Sections 1 and 2. 6 A motion for reconsideration of the foregoing order was denied by the Secretary on June 1. 2000. especially in connection with employer-employee relations in PAL. However. however. the Court of Appeals denied the petition and the motion for reconsideration of petitioner. 7641) and not Section 2. The Secretary added that in the exercise of its option to retire pilots. ARTICLE VII OF THE PAL-ALPAP RETIREMENT PLAN OF 1967 SHOULD BE INCREASED WAS NOT IN NCMB-NCR CASE NO. On March 2. (2) Said 1967 Retirement Plan which was incorporated as Article XXVII of the PAL-ALPAP Collective Bargaining Agreement. and June 19.

8 Hence.000 hours as a pilot for PAL. IT IS LEGALLY INCORRECT TO COMPEL PETITIONER TO CONSULT THE PILOT CONCERNED BEFORE RETIREMENT IS IMPLEMENTED.000. Any member who remains in the service of the Company after his normal retirement date may retire either at his option or at the option of the Company and when so retired he shall be entitled either (a) to a lump sum payment of P5.00 for each completed year of . or on which he logs his 20. whichever is the greater amount. The member who retires on his normal retirement shall be entitled to either (a) a lump sum payment of P100. applying the second paragraph of Article 287 of the Labor Code. 7 The Court of Appeals. (a) Any member who completed twenty (20) years of service as a pilot for PAL or has flown 20. Normal Retirement. III THE LAW GRANTS TO THE CONTRACTING PARTIES THE EXCLUSIVE RIGHT TO DETERMINE FOR THEMSELVES THE PROVISIONS OF A COLLECTIVE BARGAINING AGREEMENT. SECTION 2. Late Retirement. V ON THE ASSUMPTION THAT THE SECRETARY OF LABOR AND EMPLOYMENT MAY AMEND THE CBA AND THE PAL-ALPAP RETIREMENT PLAN OF 1967. IV THE SECRETARY OF LABOR AND EMPLOYMENT CANNOT AMEND THE CBA AND THE PAL-ALPAP RETIREMENT PLAN OF 1967 WITHOUT VIOLATING THE PROSCRIPTION AGAINST THE IMPAIRMENT OF CONTRACTS.000 hours for PAL shall be eligible for normal retirement. Article 287 of the Labor Code and not the 1967 PALALPAP Retirement Plan. The pertinent provision of the 1967 PAL-ALPAP Retirement Plan states: SECTION 1.A JUDGMENT THAT GOES BEYOND THE ISSUES AND PURPORTS TO ADJUDICATE SOMETHING UPON WHICH THE PARTIES WERE NOT HEARD IS IRREGULAR AND INVALID SINCE IT AMOUNTS TO A DENIAL OF DUE PROCESS. VI ON THE ASSUMPTION THAT THE SECRETARY OF LABOR AND EMPLOYMENT MAY AMEND THE CBA AND THE PAL-ALPAP RETIREMENT PLAN OF 1967.000. The normal retirement date is the date on which he completes twenty (20) years of service.00 or (b) to such termination pay benefits to which he may be entitled to under existing laws. IT IS LEGALLY INCORRECT AND INIQUITOUS TO COMPEL PETITIONER TO PAY RETIREMENT PAY IN ACCORDANCE WITH ARTICLE 287 OF THE LABOR CODE. held that an employee's retirement benefits under any collective bargaining and other agreement shall not be less than those provided in the Labor Code. should govern the computation of the benefits to be awarded to Captain Collantes.

who has served at least five (5) years in the said establishment. This is in addition to the amount of not less than P100. the pilot gets an amount equivalent to 240% of his gross monthly income for every year of service he rendered to petitioner. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. In case of retirement. whichever is the greater amount. each pilot stands to receive the full amount of the contribution. Upon retirement. the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: provided. In the absence of a retirement plan or agreement plan providing for retirement benefits of employees in the establishment. or (b) to such termination pay benefits to which he may be entitled under existing laws. 10 entered into between petitioner and respondent on May 30. Article 287 of the Labor Code: Art. the parties provided for a special scheme of retirement different from that contemplated in the Labor Code. 287. .000. Conversely. . 1972. . . compared to one who retires at the age of 60 years old. In sum. therefore. 9 A pilot who retires after twenty years of service or after flying 20. In any event. . . . Based on this peculiar circumstance that PAL pilots are in. aCcHEI On the other hand. but not beyond sixtyfive (65) years which is hereby declared as the compulsory retirement age.00 that he shall receive under the 1967 Retirement Plan. the provisions of Article 287 of the Labor Code could not have contemplated the situation of PAL's pilots. Retirement. Rather. a fraction of at least six (6) months being considered as one whole year. it was intended for those who have no more plans of employment after retirement. an employee upon reaching the age of sixty (60) years or more. and are thus in need of financial assistance and reward for the years that they have rendered service. That an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein. The PAL Pilots' Retirement Benefit Plan 11 is a retirement fund raised from contributions exclusively from petitioner of amounts equivalent to 20% of each pilot's gross monthly pay. Unless the parties provide for broader inclusions. .. — Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. however. . the term 'one-half (1/2) month salary' shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.000 hours would still be in the prime of his life and at the peak of his career. .service rendered as a pilot. petitioner contends that its pilots who retire below the retirement age of 60 years not only receive the benefits under the 1967 PAL-ALPAP Retirement Plan but also an equity of the retirement fund under the PAL Pilots' Retirement Benefit Plan.

In short, the retirement benefits that a pilot would get under the provisions of the above-quoted Article 287 of the Labor Code are less than those that he would get under the applicable retirement plans of petitioner. Finally, on the issue of whether petitioner should consult the pilot concerned before exercising its option to retire pilots, we rule that this added requirement, in effect, amended the terms of Article VII, Section 2 of the 1976 PAL-ALPAP Retirement Plan. The option of an employer to retire its employees is recognized as valid. 12 In the earlier case of Bulletin Publishing Corp. v. Sanchez, 13 this Court held: The aforestated sections explicitly declare, in no uncertain terms, that retirement of an employee may be done upon initiative and option of the management. And where there are cases of voluntary retirement, the same is effective only upon the approval of management. The fact that there are some supervisory employees who have not yet been retired after 25 years with the company or have reached the age of sixty merely confirms that it is the singular prerogative of management, at its option, to retire supervisors or rank-and-file members when it deems fit. There should be no unfair labor practice committed by management if the retirement of private respondents were made in accord with the agreed option. That there were numerous instances wherein management exercised its option to retire employees pursuant to the aforementioned provisions, appears to be a fact which private respondents have not controverted. It seems only now when the question of the legality of a supervisors union has arisen that private respondents attempt to inject the dubious theory that the private respondents are entitled to form a union or go on strike because there is allegedly no retirement policy for their benefit. As above noted, this assertion does not appear to have any factual basis. 14 Surely, the requirement to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees. It gives the pilot concerned an undue prerogative to assail the decision of management. Due process only requires that notice be given to the pilot of petitioner's decision to retire him. Hence, the Secretary of Labor overstepped the boundaries of reason and fairness when he imposed on petitioner the additional requirement of consulting each pilot prior to retiring him. Furthermore, when the Secretary of Labor and Employment imposed the added requirement that petitioner should consult its pilots prior to retirement, he resolved a question which was outside of the issues raised, thereby depriving petitioner an opportunity to be heard on this point. 15 WHEREFORE, in view of all the foregoing, the petition is GRANTED. The March 2, 2000 Decision and the June 19, 2000 Resolution of the Court of Appeals in CA-G.R. SP No. 54403 are REVERSED and SET ASIDE. The Order of the Secretary of Labor in NCMB-NCR-N.S. 12-514-97, dated June 13, 1998, is MODIFIED as follows: The retirement benefits to be awarded to Captain Albino Collantes shall be based on the 1967 PAL-ALPAP Retirement Plan and the PAL Pilots' Retirement Benefit Plan. The directive contained in subparagraph (2) of the dispositive portion thereof, which required petitioner to consult the pilot involved before exercising its option to retire him, is DELETED. The said Order is AFFIRMED in all other respects. SO ORDERED.

Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur. Footnotes 1. 2. Rollo, p. 32. Ibid., p. 41.

3. Associate Justices Rodrigo V. Cosico, ponente; Wenceslao I. Agnir, Jr., and Jose Sabio, Jr., concurring. 4. 5. 6. 7. 8. 9. 10. 11. Penned by Secretary Cresenciano B. Trajano; Rollo, p. 53. Penned by Secretary Bievenido E. Laguesma; Rollo, p. 101. Rollo, pp. 69-70. Ibid., pp. 15-16. Id., p. 38. Id., p. 188. Id., pp. 172-175. Id., pp. 192-201.

12. Progressive Development Corp., et al. v. NLRC, et al., G.R. No. 138826, October 30, 2000; Manuel L. Quezon University, et al. v. NLRC, et al., 274 SCRA 36, 46 [1997]. 13. 14. 15. 144 SCRA 628 [1986]. Ibid., at 640-641. Carlos v. Angeles, G.R. No. 142907, November 29, 2000.

C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a, I n c.

2001 G.R. No. 121327 December 20, 2001 CECILIO P. DE LOS SANTOS, ET AL. vs. NLRC, ET AL SECOND DIVISION

[G.R. No. 121327. December 20, 2001.] CECILIO P. DE LOS SANTOS and BUKLOD MANGGAGAWA NG CAMARA (BUMACA), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HON. COMMISSIONERS VICTORIANO R. CALAYCAY, RAUL T. AQUINO, and ROGELIO I. RAYALA, CAMARA STEEL INDUSTRIES INC., JOSELITO JACINTO, ALBERTO F. DEL PILAR, DENNIS ALBANO, MERCEDITA G. PASTRANA, TOP-FLITE and RAUL RUIZ, respondents. Cesar F. Maravilla, Jr. for petitioners. The Solicitor General for public respondent. Cabrillas Borja & De Ungria for private respondents. SYNOPSIS Petitioner De los Santos worked as a janitor at Camara Steel Industries. One day, while doing his usual chores, he momentarily left his pushcart to answer the call of Narciso Honrado, scrap in-charge, who summoned him to the company clinic. Thereafter, on his way out of the gate, the security guard on duty found 2 pieces of electric cable in the box handed to him by Honrado. Petitioner explained that the electric cord was declared a scrap by Honrado. The latter admitted responsibility. The general manager issued a memorandum acknowledging, receipt of Honrado's letter of apology and exculpated him of any wrongdoing. However, the company, through its counsel, still filed a criminal complaint for frustrated qualified theft against Honrado and herein petitioner De los Santos. The complaint was subsequently dismissed for lack of evidence. In the meantime, Camara Steel terminated De los Santos's services allegedly upon request of Top-Flite, his manpower agency. De los Santos sought recourse with the Labor Arbiter who rendered a decision ordering respondent Camara Steel to reinstate him to his former position without loss of seniority rights. Camara Steel went to the NLRC for recourse and Top-Flite filed its motion for intervention. The NLRC reversed the labor arbiter and ordered the return of the entire records of the case to the arbitration branch of origin for further proceedings. Hence, this petition for certiorari. HCacTI The Supreme Court reinstated the order of the labor arbiter and granted this petition. The Court recognized by more than substantial evidence the existence of an employer-employee relationship between De los Santos and Camara Steel and found Top-Flite to be a "labor-only" contractor, a mere supplier of labor to Camara Steel, the real employer. The Court also agreed with the labor arbiter's finding that De los Santos was illegally dismissed. TAECSD SYLLABUS 1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYER-EMPLOYEE RELATIONS; TERMINATION OF EMPLOYMENT BY EMPLOYER; LOSS OF CONFIDENCE AS A GROUND; NOT APPLICABLE TO TASK OF A JANITOR. — Art. 282. Termination by employer — An employer may terminate an employment for any of the following causes: . . . (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. . . . Of course, it must be stressed that

loss of confidence as a just cause for the termination of employment is based on the premise that the employee holds a position of trust and confidence, as when he is entrusted with responsibility involving delicate matters, and the task of a janitor does not fall squarely under this category. CAacTH

2. ID.; ID.; LABOR-ONLY CONTRACTING; ELEMENTS FOR VALIDITY; APPLICATION IN CASE AT BAR. — "Labor-only contracting" as defined in Sec. 4, par. (f), Rule VIII-A, Book III, of the Omnibus Rules Implementing the Labor Code states that a "labor-only" contractor, prohibited under this Rule, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal and the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account or responsibility; and, (b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. Applying the foregoing provisions, the Court finds Top-Flite to be a "labor-only" contractor, a mere supplier of labor to CAMARA STEEL, the real employer. Other than its open declaration that it is an independent contractor, no substantial evidence was adduced by Top-Flite to back up its claim. Its revelation that it provided a sweeper to petitioner would not suffice to convince this Court that it possesses adequate capitalization to undertake an independent business. Neither will the submission prosper that De los Santos did not perform a task directly related to the principal business of respondent CAMARA STEEL. As early as in Guarin v. NLRC we ruled that "the jobs assigned to the petitioners as mechanics, janitors, gardeners, firemen and grasscutters were directly related to the business of Novelty as a garment manufacturer," reasoning that "for the work of gardeners in maintaining clean and well-kept grounds around the factory, mechanics to keep the machines functioning properly, and firemen to look out for fires, are directly related to the daily operations of a garment factory." ACETIa 3. ID.; ID.; ADHERENCE TO STRINGENT TECHNICAL RULES THEREOF MAY BE RELAXED; RATIONALE; CASE AT BAR. — The records show that Top-Flite was not only impleaded in the aforementioned case but was in fact afforded an opportunity to be heard when it submitted a position paper. This much was admitted by Top-Flite in par. 5 of its Motion for Intervention where it stated that "movant submitted its position paper in the cases mentioned in the preceding paragraph but the Presiding Arbiter ignored the clear and legal basis of the position of the movant." In other words, the failure of Top-Flite to receive summons was not a fatal procedural flaw because it was never deprived of the opportunity to ventilate its side and challenge petitioner in its position paper, not to mention the comment which it submitted through counsel before this Court. It moved to intervene not because it had no notice of the proceedings but because its position paper allegedly was not considered by the Labor Arbiter. While jurisdiction over the person of the defendant can be acquired by service of summons, it can also be acquired by voluntary appearance, before the court which includes submission of pleadings in compliance with the order of the court or tribunal. A fortiori, administrative tribunals exercising quasijudicial powers are unfettered by the rigidity of certain procedural requirements subject to the observance of fundamental and essential requirements of due process in justiciable cases presented before them. In labor cases, a punctilious adherence to stringent technical rules may be relaxed in the

interest of the workingman. A remand of the case, as the NLRC envisions, would compel petitioner, a lowly worker, to tread once again the calvary of a protracted litigation and flagellate him into submission with the lash of technicality. HIACac DECISION BELLOSILLO, J p: This is a petition for certiorari under Rule 65 assailing the Decision of public respondent National Labor Relations Commission (NLRC) which remanded this case to the Labor Arbiter who ruled that petitioner Cecilio P. de los Santos was illegally dismissed by private respondent Camara Steel, Inc., and as a consequence, ordered his immediate reinstatement. Specifically, the dispositive portion of the Labor Arbiter's Decision promulgated 23 May 1999 states — WHEREFORE, premises considered, respondent Camara Steel Industries, Inc. is hereby ordered to reinstate complainant Cecilio de los Santos to his former position within ten (10) days from receipt of this Resolution without loss of seniority rights and other benefits with full back wages from date of dismissal up to actual date of reinstatement which is hereby computed as of even date as follows: From 8/23/93-12/15/93= P118 x 26 days x 3.73 mos. 12/16/93 - 3/29/94 = 3.73 mos. = 3.43 mos. = 12,039.30 P11,443.64

135 x 26 days x 3.43 mos.

———— Total Backwages as of 3/29/94 ======== Respondent Camara Steel Industries, Inc. is also ordered to pay complainant 10% for and as attorney's fees. All other claims are hereby dismissed for lack of merit. On 3 May 1991 petitioner De los Santos started working at Camara Steel Industries Inc. (CAMARA STEEL), a company engaged in the manufacture of steel products such as LPG cylinders and drums. He was first assigned at the LPG assembly line, then later, as operator of a blasting machine. While performing his task as such operator, he met an accident that forced him to go on leave for one and a half (1-1/2) months. Upon his return, he was designated as a janitor assigned to clean the premises of the company, and occasionally, to transfer scrap and garbage from one site to another. 1 On 11 May 1993 petitioner was doing his usual chores as a janitor of CAMARA STEEL when he momentarily left his pushcart to answer the call of Narciso Honrado, scrap in-charge, who summoned P23,482.94

CAMARA STEEL went to the NLRC for recourse.76 meters with a total estimated value of P50. There Honrado handed him a box which he placed on top of a drum in his pushcart for transfer to the other lot of the company near gate 2.26 inches each and another piece of 1. Secondly. be allowed to submit its own memorandum and other pleadings. Top-Flite filed a Motion for Intervention praying that it be permitted to intervene in the appeal as co-respondent and. CAMARA STEEL terminated his services. As noted by respondents. In its Decision. petitioner De los Santos explained that the electric cord was declared a scrap by Honrado whose instructions he was only following to transfer the same to the adjacent lot of the company as scrap. De los Santos sought recourse with the Labor Arbiter who on 29 March 1994 rendered a decision ordering respondent CAMARA STEEL to reinstate Delos Santos to his former position within ten (10) days without loss of seniority rights and other benefits with full back wages from date of dismissal up to actual reinstatement as herein before stated. as respondents have broadly implied. H and I which are time sheets of the complainant with Top-Flite and the corresponding time cards which he punches in for Camara Steel.00 to P100. issued a memorandum acknowledging receipt of his letter of apology and exculpated him of any wrongdoing. The complaint however was subsequently dismissed by the Provincial Prosecutor of Pasig for lack of evidence. NLRC specified the reasons for the remand to the Labor Arbiter — 4 First. however. the security guard on duty found in the box handed to him by Honrado two (2) pieces of electric cable measuring 2. but he has obviously omitted consideration of Annexes F. 3 On 23 May 1995 the NLRC reversed the Labor Arbiter and ordered the return of the entire records of the case to the arbitration branch of origin for further proceedings. the company through its counsel filed on 9 July 1993 a criminal complaint for frustrated qualified theft against Honrado and herein petitioner De los Santos. HTaSEA Narciso Honrado admitted responsibility for the haul and his error in declaring the electric cables as scrap. Apprehensive that he might be charged with theft. it was complainant's burden to prove this allegation as a fact. he has not submitted one piece of evidence to support his premise on this matter except for his sworn statement. G. The NLRC further noted that under the circumstances it became appropriate to conduct a formal hearing on the particular issue of whether an employer-employee relationship existed between the . The general manager. Taking an unexpected volte face. having alleged that he was an employee of Camara Steel. Aggrieved by his illegal termination. On his way out of gate 2. upon request of Top-Flite.00. alleged manpower agency of De los Santos. apparently appeased by Honrado's apology.him to the company clinic. the Arbiter maintained that the contract of services submitted by respondents was insufficient to prove that complainant was an employee of Top-Flite. accordingly. not merely through his uncorroborated statements but through independent evidence. however. 2 On 23 August 1993.

and.. which issue was determinative of the nature of petitioner's dismissal by CAMARA STEEL. Dennis Albano. according to the NLRC. All things considered. 00-08-05302-93 and the NLRC was therefore in error in remanding the case to the Labor Arbiter for further proceedings. (e) Annex "F-3" — Signature of Narisma. As pointed out by petitioner. approving. Personnel Manager of Camara Steel Industries Inc. it was necessary for the Labor Arbiter to issue the appropriate directive to summon Top-Flite as a necessary party to the case. (i) Annex "G-3" — Signature of Camara's Department Head where petitioner is working. That being so. the steel company terminated his employment after being allegedly caught committing theft. Mr. (f) Annex "G" — Daily Time Record of petitioner for 7/6/92 to 7/12/92. plainly and clearly show that the power of control and supervision over him was exercised solely and exclusively by the managers and supervisors of CAMARA STEEL. Top-Flite was made a party respondent in the illegal dismissal case docketed as NLRC-NCR No. for the manpower agency to submit its own evidence on the actual status of petitioner. All these pieces of evidence which. (j) Annex "H" to "H-1" — Petitioner's Daily Time Card (representative samples) with name and logo of Camara Steel Industries Inc. is the real employer of petitioner. Narisma. Even the power to dismiss was also lodged with CAMARA STEEL when it admitted in page 3 of its Reply that upon request by TopFlite. (b) Annex "F" — Petitioner's daily time record for 8/3/92 to 8/9/92. the errors in the disputed decision by the NLRC are: (a) NLRC violated due process of law when it did not consider the evidence on record. . also co-signing for approval. was in fact a "labor-only" contractor as borne out by a contract whereby Top-Flite undertook to supply CAMARA STEEL workers with "warm bodies" for its factory needs and edifices. where petitioner is working. according to petitioner De los Santos. approving in her capacity as Assistant Manager of Camara Steel. were not properly considered by NLRC. (c) Contrary to the finding of NLRC. approving. (c) Annex "F-1" — Signature of private respondent Mercedita Pastrana. with the exception of a bare assertion on his sworn statement. far from being his employer. (g) Annex "G-1" — Signature of Camara Steel Assistant Manager. as Department Head of Camara Steel Industries Inc. (b) CAMARA STEEL. he "has not submitted one piece of evidence to support his premise" 5 that he was in fact an employee of CAMARA STEEL. without which petitioner cannot render overtime. private respondent CAMARA STEEL avers that far from being its employee. Petitioner De los Santos contends that NLRC was in grave error when it ruled that. He insists that such contract was not a job contract but the supply of labor only.parties. De los Santos was merely a project employee of Top-Flite who was assigned as janitor in private respondent company. Reynaldo Narisma. and not Top-Flite. (k) Annex "J" — Affidavit of Complainant. Petitioner De los Santos also advances the view that Top-Flite. petitioner brings to our attention and specifies the pieces of evidence which he presented before the Labor Arbiter on 19 November 1993 — also appended as Annexes to petitioner's "Traverse to Camara's Position Paper and Reply:" (a) Annex "E" to "E-1" — Approval signature of Camara's Department head. he was an employee — a regular one at that — of CAMARA STEEL. cSDIHT In its comment. (h) Annex "G-2" — Signature of Camara's Personnel Manager. To underscore NLRC's oversight. (d) Annex "F-2" — Signature of private respondent Dennis Albano. he is of the firm belief that for all legal intents and purposes.

These allegations are contained in the affidavit 8 executed by De los Santos and were never disputed by CAMARA STEEL. Etched in an unending stream of cases are the four (4) standards in determining the existence of an employer-employee relationship. 6 Such allegation. In the maze and flurry of claims and counterclaims. De los Santos vigorously insists that he was the employee of respondent CAMARA STEEL which in turn was not only denying the allegation but was finger-pointing Top-Flite as petitioner's real employer. in whose premises he was allegedly caught stealing. Was De los Santos illegally dismissed? If so. De los Santos again objects to this assertion and claims that Top-Flite. according to private respondent CAMARA STEEL. by whom? Was his employer respondent CAMARA STEEL. 7 Respondent CAMARA STEEL further argues that crystal clear in the Motion for Intervention of Top-Flite is its allegation that it was in fact petitioner's real employer as his salaries and benefits during the contractual period were paid by Top-Flite. and. (b) the mode of payment of wages. Also remaining uncontroverted are the pieces of documentary evidence adduced by De los Santos consisting of daily time records marked Annexes "F" and "G" which. although bearing the heading and logo of Top-Flite. its timekeeper who worked under the direct supervision of one Renato Pacion. the manpower services which allegedly hired him? Inextricably intertwined in the resolution of these issues is the determination of whether there existed an employer-employee relationship between CAMARA STEEL and respondent De Los Santos. A finding that Top-Flite was a "labor-only" contractor reduces it to a mere agent of CAMARA STEEL which by statute would be responsible to the employees of the "labor-only" contractor as if such employees had been directly employed by the employer. were signed by officers of respondent CAMARA STEEL. or was it Top-Flite. In his petition. These ineluctably show that Top-Flite was not only a job contractor but was in truth and in fact the employer of petitioner. Incidentally. Most determinative among these factors is the so-called "control test. was merely a "labor-only" contractor. several contentious issues continue to stick out like a sore thumb. and whether Top-Flite was an "independent contractor" or a "labor-only" contractor.This much was acknowledged by Top-Flite in its Motion for Intervention filed before the NLRC. (d) the presence or absence of control of the putative employee's conduct. supports all along its theory that De los Santos' assignment to the latter as janitor was based on an independent contract executed between Top-Flite and CAMARA STEEL. we do not agree with NLRC's submission that the daily time records serve no other purpose than to establish merely the presence of De los Santos within the premises of CAMARA STEEL. namely: (a) the manner of selection and engagement of the putative employee. De los Santos was dismissed by CAMARA STEEL upon the recommendation of Top-Flite. a supervisor of CAMARA STEEL. far from being an employer. not only that. . De los Santos was hired by CAMARA STEEL after undergoing an interview with one Carlos Suizo. (c) the presence or absence of power of dismissal." As shown by the evidence on record. and Annexes "H" and "I" with the heading and logo of CAMARA STEEL.

which were signed by the company's officers. 282. De los Santos brings to our attention the contract of service 9 dated 8 February 1991 between CAMARA STEEL and Top-Flite which provides: . it was Narciso Honrado. and the task of a janitor does not fall squarely under this category. For sure. What is certain however is that while Honrado admitted. As provided for in the Labor Code: Art. in a letter of apology. particularly De los Santos. De los Santos was not only unceremoniously dismissed from service but was charged before the court for qualified theft (later dismissed by the public prosecutor for lack of evidence). prove that the company exercised the power of control and supervision over its employees.Contrarily. his culpability for the unfortunate incident and was unconditionally forgiven by the company. we are in full agreement with the Labor Arbiter's finding that he was illegally dismissed. . being the scrap in-charge. that he conspired with Honrado in bilking the company of its property. If Top-Flite was truly the employer of De los Santos." A cursory reading of the above declaration will confirm the fact that the dismissal of De los Santos could only be effected by CAMARA STEEL and not by Top-Flite as the latter could only "request" for De los Santos' dismissal. De los Santos cannot be held more guilty than Honrado who. these records. As correctly observed by the Labor Arbiter. There is dearth of proof to show that Top-Flite was the real employer of De los Santos other than a naked and unsubstantiated denial by CAMARA STEEL that it has no power of control over De los Santos. As to whether petitioner De los Santos was illegally terminated from his employment. . Petitioner De los Santos argues that Top-Flite was merely a "labor-only" contractor. . it must be stressed that loss of confidence as a just cause for the termination of employment is based on the premise that the employee holds a position of trust and confidence. who handed the box containing the electrical cables to De los Santos. . it would not be asking permission from or "requesting" respondent CAMARA STEEL to dismiss De los Santos considering that it could very well dismiss him without CAMARA STEEL's assent. No shred of evidence can show that De los Santos was aware of its contents. To fortify his stance. scrap in-charge. Of course. Termination by employment — An employer may terminate an employment for any of the following causes: . (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative . as when he is entrusted with responsibility involving delicate matters. All the foregoing considerations affirm by more than substantial evidence the existence of an employeremployee relationship between De los Santos and CAMARA STEEL. or if ever. Records would attest that even the power to dismiss was vested with CAMARA STEEL which admitted in its Reply that "Top-Flite requested CAMARA STEEL to terminate his employment after he was caught by the security guard committing theft. had the power to classify the cables concerned as scrap. TDcEaH Neither can we gratify CAMARA STEEL's contention that petitioner was validly dismissed for loss of trust and confidence.

" reasoning that "for the work of gardeners in maintaining clean and well- . work premises. janitors. However. industry and cooperative disposition of the person it employs to perform the job subject to this contract. The case of Tiu v. it being crucial that its character be measured in terms of and determined by the criteria set by statute. no substantial evidence was adduced by Top-Flite to back up its claim. and shall employ such persons only as are in possession of health certificates and police clearances . The preceding provisions do not give a clear and categorical answer as regards the real character of TopFlite's business.e. by the mere expedient of a unilateral declaration in a contract. the real employer. . "Labor-only contracting" as defined in Sec. supplies or places workers to perform a job. a mere supplier of labor to CAMARA STEEL. work or service for a principal and the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job. and 2) the contractor has substantial capital or investment in the form of tools. Its revelation that it provided a sweeper to petitioner would not suffice to convince this Court that it possesses adequate capitalization to undertake an independent business. whether as "labor-only" contractor. and. Be that as it may. Book III. cannot dictate. TopFlite.1) The contractor (Top-Flite) shall provide workers (non-skilled) six (6) days a week for the Client's (Camara) factory and edifices. both respondent CAMARA STEEL and Top-Flite 10 are adamant in their belief that the latter was not a "labor-only" contractor as they rely on another provision of the contract which states — 2) The Contractor warrants the honesty. 12 Neither will the submission prosper that De los Santos did not perform a task directly related to the principal business of respondent CAMARA STELL. and other materials which are necessary in the conduct of the business. of the Omnibus Rules Implementing the Labor Code states that a "labor-only" contractor. par. prohibited under this Rule. the character of its business. the invocation of the contract of service is a tacit admission by both parties that the employment of De los Santos was by virtue of such contract. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. firemen and grasscutters were directly related to the business of Novelty as a garment manufacturer. Other than its open declaration that it is an independent contractor. 4. Applying the foregoing provisions. work or service under its own account or responsibility. the Court finds Top-Flite to be a "labor-only" contractor. NLRC 13 we ruled that "the jobs assigned to the petitioners as mechanics. Rule VIII-A. As early as in Guarin v. gardeners. . reliability. is an arrangement where the contractor or subcontractor merely recruits. machineries. (f). or job contractor. NLRC 11 succinctly enunciates this statutory criteria — Job contracting is permissible only if the following conditions are met: 1) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method.. equipment. For whatever its worth. much less CAMARA STEEL. (b) The employees recruited. free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. i.

being a necessary party. 15 It moved to intervene not because it had no notice of the proceedings but because its position paper allegedly was not considered by the Labor Arbiter. Annex "J. administrative tribunals exercising quasi-judicial powers are unfettered by the rigidity of certain procedural requirements subject to the observance of fundamental and essential requirements of due process in justiciable cases presented before them.kept grounds around the factory. 87. not to mention the comment which it submitted through counsel before this Court. CAMARA STEEL obviously wants to impress upon us that Top-flite. 2. Quisumbing and De Leon. This much was admitted by Top-Flite in par. basically the same line of argument adopted by the NLRC in its decision to remand the case to the arbitration branch of origin. JJ. A fortiori. We are not persuaded. concur." 14 In other words. although impleaded as respondent in NLRC-NCR Cases Nos. 5 of its Motion for Intervention where it stated that "movant submitted its position paper in the cases mentioned in the preceding paragraph but the Presiding Arbiter ignored the clear and legal basis of the position of the movant. In labor cases." Records. J. .. was never summoned for which reason it was deprived of procedural due process... A remand of the case. Jr. Id. a lowly worker. are directly related to the daily operations of a garment factory. to tread once again the calvary of a protracted litigation and flagellate him into submission with the lash of technicality." In its comment respondent CAMARA STEEL emphatically argues that Top-Flite. SO ORDERED. a punctilious adherence to stringent technical rules may be relaxed in the interest of the workingman. Mendoza. the petition is GRANTED and the appealed Decision of the NLRC is REVERSED and SET ASIDE and the Decision of the Labor Arbiter promulgated 23 May 1999 is REINSTATED and ADOPTED as the Decision in this case. WHEREFORE. The records show that Top-Flite was not only impleaded in the aforementioned case but was in fact afforded an opportunity to be heard when it submitted a position paper. on official business Footnotes 1. would compel petitioner. as the NLRC envisions. it can also be acquired by voluntary appearance before the court which includes submission of pleadings in compliance with the order of the court or tribunal. mechanics to keep the machines functioning properly. While jurisdiction over the person of the defendant can be acquired by service of summons. subject of the present appeal. 00-0704761-93 and 00-0805061-93. the failure of Top-Flite to receive summons was not a fatal procedural flaw because it was never deprived of the opportunity to ventilate its side and challenge petitioner in its position paper. should have been summoned and the failure to do so would justify the remand of the case to the Labor Arbiter. and firemen to look out for fires. Buena. p..

Allan S." Rollo. 86010. INC." Rollo. G. 142824 December 19. December 19. 3 October 1989.R. Annex "C. As of 26 June 2000. 15. ET AL vs. Id. Montano for petitioners." Rollo. vs. 13. 12. No.R. 142824. 6. Rollo. p. p. 14. Annex "1" of respondent's Position Paper. Top-Flite's Comment. Castillo Laman Tan Pantaleon & San Jose Law Offices for private respondent. 8. Id.. 172. 21 February 1996. THERESA MONTEJO.3. p. INTERPHIL LABORATORIES. Annex "C. AND HONORABLE LEONARDO A. INTERPHIL LABORATORIES. 40-41. 2001 INTERPHIL LABORATORIES EMPLOYEES UNION-FFW. 9. 273. 4.. See Note 2. 57. 178 SCRA 267. Annex "J..] INTERPHIL LABORATORIES EMPLOYEES UNION-FFW. No. As shown in the Comment dated 30 October 1995.R.1 SCRA 254. respondents.R. Copyright 2000 CD Technologies Asia Inc G. 2001. . 95845. petitioners. QUISUMBING. Id. Id. Top-Flite has failed to comply with the Court resolution dated 28 April 1997 requiring it through the president Miguel Paraiso to submit its Memorandum. p. SECRETARY OF LABOR AND EMPLOYMENT. No. see Rollo. ET AL FIRST DIVISION [G. 168. 10.. 11. G. No. ENRICO GONZALES and MA.. 5." Annex "G. 7.

Also. CaDSHE SYLLABUS 1. Meanwhile. according to the labor arbiter. Upon failure to have a positive reaction. the members of the union admitted in their petition that they decided not to render overtime. This is evident from the opening proviso therein reading '(e)xcept as otherwise provided under this Code . such acts by the employees constituted a violation of their CBA. the labor arbiter submitted his recommendation on the case filed by the Company. Inc. Moreover. but failed. this petition for certiorari before the Supreme Court. The company had a Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993. SECRETARY OF LABOR AND EMPLOYMENT. but was denied. all the rank-and-file employees of the company started a work slowdown and an overtime boycott. the company filed with the National Labor Relations Commission (NLRC) a petition to declare illegal the union's overtime boycott and work slowdown. The Secretary of Labor adopted the recommendation declaring the overtime boycott and work slowdown as an illegal strike and declared the union officers concerned to have lost their employment status. and decide the same accordingly. Article 263(g) of the Labor Code was meant to make both the Secretary (or the various regional . HcTSDa The petition was denied due course and the decision of the Court of Appeals was affirmed. — The appellate court also correctly held that the question of the Secretary of Labor and Employment's jurisdiction over labor and labor-related disputes was already settled in International Pharmaceutical. The Court viewed the gesture of the respondent company as an act of generosity for which it should not be punished. More importantly. the respondent company in effect condoned the illegal acts they committed. Such admission confirmed the allegation of respondent company that petitioners engaged in overtime boycott and work slowdown which. some union officers wanted to discuss with the company vice-president for human resources the details of a new CBA. The Secretary of Labor issued an assumption order over the labor dispute and issued a return-to-work order. LABOR CODE. was taken as a means to coerce the company to yield to their unreasonable demands. vs. . . Secretary of Labor and Associated Labor Union (ALU) where the Court declared: In the present case. Article 217 of the Labor Code is not without. According to the Court. exceptions thereto. VESTED WITH JURISDICTION OVER LABOR AND LABOR-RELATED DISPUTES. The Petitioner union staged a strike. The union went to the Court of Appeals. the Court could not agree with the petitioners that in extending substantial separation package to some officers of the union.SYNOPSIS Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank and file employees of Interphil Laboratories. CONSTRUED. Inc. Petitioners moved for its reconsideration.' Plainly. In the meantime. LABOR AND SOCIAL LEGISLATIONS. Hence. including cases over which the labor arbiter has exclusive jurisdiction. . but the appellate court dismissed the petition. this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom. A few months before the expiration of the CBA. but contemplates. the parties tried to settle things. Necessarily. Hon. which the company considered to be an illegal strike. Later on. the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest.

FACTUAL FINDINGS OF THE LABOR ARBITER. It is evident from the foregoing provision that the working hours may be changed. the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same Code. however the company may change the prevailing work time at its discretion. DAESTI 3. it is axiomatic that the factual findings of the Labor Arbiter. — Anent the alleged misappreciation of the evidence proffered by the parties. The schedule of shift work shall be maintained. In any event. what is stated in the CBA. CASE AT BAR. NOT APPLICABLE IN LABOR CASES. ID.. the Secretary would not be able to effectively and efficiently dispose of the primary dispute. the two-shift schedule while their CBA was still in force and even prior thereto. In labor cases pending before the Commission or the Labor Arbiter.M. TaEIAS DECISION KAPUNAN. the rules of evidence prevailing in courts of law or equity are not controlling. must be accorded due respect by the Supreme Court. and that the employees shall observe such rules as have been laid down by the company. J p: . EFFECT THEREOF. Regular Working Hours — A normal workday shall consist of not more than eight (8) hours. In the case before us. EVIDENCE. REMEDIAL LAW. To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings. the report and recommendation of Labor Arbiter Caday was not only adopted by then Secretary of Labor Quisumbing but it was likewise affirmed by the Court of Appeals. the Labor Arbiter is not precluded from accepting and evaluating evidence other than. '(i)t is fundamental that a statute is to be read in a manner that would breathe life into it. As the employees assented by practice to this arrangement. It was established that the employees adhered to the said work schedule since 1988. CASE AT BAR. the parties stipulated: Section 1. subject to certain conditions. Otherwise. to 4:30 P. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours. The two-shift schedule effectively changed the working hours stipulated in the CBA.M. The employees are deemed to have waived the eight-hour schedule since they followed. WHEN ACCORDED DUE RESPECT BY THE SUPREME COURT. should such change be necessary in the operations of the Company. without any question or complaint. As we have said.directors) and the labor arbiters share jurisdiction. Here. In fine. taken conjointly and rationally construed to subserve the objective of the jurisdiction vested in the Secretary. ID. — The reliance on the parol evidence rule is misplaced. Hence. and even contrary to. when sufficiently supported by the evidence on record. Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of its clients. cSIACD 2. The regular working hours for the Company shall be from 7:30 A. they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours. Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases.. at the discretion of the company. PAROL EVIDENCE RULE. rather than defeat it. should such change be necessary for its operations.

all the rank-and-file employees of the company refused to follow their regular twoshift work schedule of from 6:00 a.. however.m. respondent company filed with the National Labor Relations Commission (NLRC) a petition to declare illegal petitioner union's "overtime boycott" and "work slowdown" which. the facts of the case are as follows: Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-andfile employees of Interphil Laboratories. Salazar acceded and a meeting was held on 15 April 1993 where the union officers asked whether Salazar would be amenable to make the new CBA effective for two (2) years.R..m. petitioner union submitted with respondent company its CBA proposal. Ocampo and Clemente again approached Salazar.m. thus substantially delaying the production of the company.Assailed in this petition for review on certiorari are the decision. promulgated on 29 December 1999.m. Prior to the expiration of the CBA or sometime in February 1993. to 6:00 a." To minimize the damage the overtime boycott was causing the company. the employees stopped working and left their workplace without sealing the containers and securing the raw materials they were working on. Allesandro G. On 03 September 1993. 00-09-05529-93. a union director. of the Court of Appeals in CA-G. They had a Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993. or on 16 April 1993. and the resolution. 1 Vice-PresidentHuman Resources Department of respondent company. Caday. and from 6:00 p. told Salazar that the employees would only return to their normal work schedule if the company would agree to their demands as to the effectivity and duration of the new CBA. The case. Culled from the questioned decision. SP No. They inquired once more about the CBA status and received the same reply from Salazar. 50978.m. and the latter filed its counter-proposal. declared that it would still be premature to discuss the matter and that the company could not make a decision at the moment. Salazar. 2 On 14 May 1993. Salazar again told the union officers that the matter could be better discussed during the formal renegotiations of the CBA. Inc. the union president. and 2:00 a. was approached by Nestor Ocampo. was assigned to Labor Arbiter Manuel R. Salazar immediately asked for a meeting with the union officers. promulgated on 05 April 2000. and Hernando Clemente. Salazar told the union officers that the matter could be best discussed during the formal negotiations which would start soon. Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. When Salazar inquired about the reason for their refusal to follow their normal work schedule. according to respondent company. amounted to illegal strike. the overtime boycott continued. At 2:00 p. Salazar. respectively. In the meeting.m. a company engaged in the business of manufacturing and packaging pharmaceutical products. The very next day.. docketed NLRC-NCR Case No. In April 1993. The two union officers inquired about the stand of the company regarding the duration of the CBA which was set to expire in a few months. the employees told him to "ask the union officers. starting 01 August 1993. the employees started to engage in a work slowdown campaign during the time they were working. to 6:00 p. Enrico Gonzales. In addition. Since the union was apparently unsatisfied with the answer of the company. In March 1993. a union director. .

however. including the fifty-three (53) terminated union officers. . 8 Then Secretary Quisumbing approved and adopted the report in his Order. However. Caday to be supported by substantial evidence.On 22 October 1993." 6 The same order pronounced that "(a)ll pending cases which are direct offshoots of the instant labor dispute are hereby subsumed herewith. and to pay all the unpaid accrued year end benefits of its employees in 1993. On 02 March 1994. shop stewards and union members back to work under the same terms and conditions prevailing prior to the strike. on 06 June 1994. Secretary of Labor Nieves Confesor issued an assumption order 4 over the labor dispute.. Despite objection by respondent company. Sol del Rosario to proceed with the hearing of the cases before them and to thereafter submit their report and recommendation to his office. . On 05 September 1995. failed to arrive at an agreement and on 15 November 1993. respondent company filed with the Office of the Secretary of Labor and Employment a petition for assumption of jurisdiction. On 16 March 1994. Secretary Confesor issued an order directing respondent company to "immediately accept all striking workers. On 12 February 1994. On 24 January 1994. Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A. the union staged a strike. Quisumbing. petitioner union was directed to "strictly and immediately comply with the return-to-work orders issued by (the) Office . after finding that the issues raised would require a formal hearing and the presentation of evidentiary matters. respondent company filed with the National Conciliation and Mediation Board (NCMB) an urgent request for preventive mediation aimed to help the parties in their CBA negotiations. the case before Labor Arbiter Caday continued. Declaring the respondent union officers namely: Nestor Ocampo President Carmelo Santos Vice-President Marites Montejo Treasurer/Board Member . finding the said Report of Labor Arbiter Manuel R. 3 The parties. directed Labor Arbiters Caday and M. petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly committed by respondent company. Acting Labor Secretary Jose S. On 14 February 1994. hence: WHEREFORE. Brillantes." 7 In the interim. this Office hereby RESOLVES to APPROVE and ADOPT the same as the decision in this case. dated 13 August 1997. petitioner union filed an "Urgent Manifestation and Motion to Consolidate the Instant Case and to Suspend Proceedings" seeking the consolidation of the case with the labor dispute pending before the Secretary of Labor. Labor Arbiter Caday held in abeyance the proceedings before him." 5 On the other hand. and judgment is hereby rendered: (1) (2) Declaring the 'overtime boycott' and 'work slowdown' as illegal strike.

9 We sustain the questioned decision. WHEN IT DID NOT DECLARE PRIVATE RESPONDENT'S ACT OF EXTENDING SUBSTANTIAL SEPARATION PACKAGE TO ALMOST ALL INVOLVED OFFICERS OF PETITIONER UNION. LIKE THE HONORABLE PUBLIC RESPONDENT IN THE PROCEEDINGS BELOW. DURING THE PENDENCY OF THE CASE. THERE WAS ANY MISDEED COMMITTED. Petitioner union moved for the reconsideration of the order but its motion was denied. IF INDEED.Rico Gonzales Auditor Rod Abuan Director Director Director Segundino Flores Hernando Clemente who spearheaded and led the overtime boycott and work slowdown. The union went to the Court of Appeals via a petition for certiorari. it is undisputed that the petition to declare the strike illegal before Labor Arbiter Caday was filed long before the Secretary of Labor and Employment issued the assumption order on 14 February 1994. the present recourse where petitioner alleged: THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS. AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT HELD THAT THE SECRETARY OF LABOR AND EMPLOYMENT HAS JURISDICTION OVER A CASE (A PETITION TO DECLARE STRIKE ILLEGAL) WHICH HAD LONG BEEN FILED AND PENDING BEFORE THE LABOR ARBITER. COMMITTED GRAVE ABUSE OF DISCRETION. AS TANTAMOUNT TO CONDONATION. THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION. On the matter of the authority and jurisdiction of the Secretary of Labor and Employment to rule on the illegal strike committed by petitioner union. AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION. and (3) Finding the respondents guilty of unfair labor practice for violating the then existing CBA which prohibits the union or any employee during the existence of the CBA from staging a strike or engaging in slowdown or interruption of work and ordering them to cease and desist from further committing the aforesaid illegal acts. In the now questioned decision promulgated on 29 December 1999. However. the appellate court dismissed the petition. THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION. Hence. AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT COMPLETELY DISREGARDED "PAROL EVIDENCE RULE" IN THE EVALUATION AND APPRECIATION OF EVIDENCE PROFERRED BY THE PARTIES. The union's motion for reconsideration was likewise denied. it cannot be denied that the issues of "overtime boycott" and "work slowdown" amounting to illegal strike before Labor Arbiter Caday are intertwined . to have lost their employment status.

Moreover. knowing fully well that there was also a directive for Labor Arbiter Caday to thereafter submit his report and recommendation to the Secretary. Inc.m.m. . the provisions of their CBA on working hours clearly stated that the normal working hours were "from 7:30 a. '(i)t is fundamental that a statute is to be read in a manner that would breathe life into it. petitioner union even asked Labor Arbiter Caday to suspend the proceedings before him and consolidate the same with the case before the Secretary of Labor.m. to 4:30 p. subject to certain conditions. Necessarily. including cases over which the labor arbiter has exclusive jurisdiction. This is evident from the opening proviso therein reading '(e)xcept as otherwise provided under this Code . Article 263(g) of the Labor Code was meant to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction. 12 Here. In fine. exceptions thereto. must be accorded due respect by the Supreme Court.' Plainly. it is axiomatic that the factual findings of the Labor Arbiter. Hon. Petitioner union maintained that the Labor Arbiter and the appellate court disregarded the "parol evidence rule" 13 when they upheld the allegation of respondent company that the work schedule of its employees was from 6:00 a. As we have said. We see no reason to depart from their findings.m. when sufficiently supported by the evidence on record. taken conjointly and rationally construed to subserve the objective of the jurisdiction vested in the Secretary. and decide the same accordingly. According to petitioner union. 11 Anent the alleged misappreciation of the evidence proffered by the parties.with the labor dispute before the Labor Secretary. In fact. the parties acceded and participated in the proceedings. to 6:00 p. the report and recommendation of Labor Arbiter Caday was not only adopted by then Secretary of Labor Quisumbing but was likewise affirmed by the Court of Appeals." 14 Petitioner union underscored that the regular work hours for the . . vs. As the appellate court pointed out. Article 217 of the Labor Code is not without. To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings. the subsequent participation of petitioner union in the continuation of the hearing was in effect an affirmation of the jurisdiction of the Secretary of Labor. this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom. the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same Code. rather than defeat it. but contemplates.m. and from 6:00 p. the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. When Acting Labor Secretary Brillantes ordered Labor Arbiter Caday to continue with the hearing of the illegal strike case. Otherwise. Secretary of Labor and Associated Labor Union (ALU) 10 where the Court declared: In the present case. The appellate court also correctly held that the question of the Secretary of Labor and Employment's jurisdiction over labor and labor-related disputes was already settled in International Pharmaceutical. the Secretary would not be able to effectively and efficiently dispose of the primary dispute. to 6:00 am. on 16 March 1994.

In labor cases pending before the Commission or the Labor Arbiter.M. It further contended that the Labor Arbiter as well as the Court of Appeals should not have admitted any other evidence contrary to what was stated in the CBA. at the discretion of the company. hearing of January 10. Proof of this is the case undisputedly filed by the union for and in behalf of its members. As Labor Arbiter Caday elucidated in his report: Respondents' attempt to deny the existence of such regular overtime schedule is belied by their own awareness of the existence of the regular overtime schedule of 6:00 A. at 2:00 P. 1994). to 6:00 P. 7-9. 9-10.M. Salazar during hearing on August 9. sometime at 6:00 A. should such change be necessary for its operations. As the employees assented by practice to this arrangement.M. and sometime at 6:00 P. of the following day that has been going on since 1988. The employees are deemed to have waived the eight-hour schedule since they followed. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours. his schedule was sometime at 6:00 A.M.M.. to 10:00 P. the two-shift schedule while their CBA was still in force and even prior thereto. It was established that the employees adhered to the said work schedule since 1988. the parties stipulated: Section 1.M. the CBA. 8.M. demanded that the company make a recomputation of the overtime records of the employees from 1987 (Exh. 1993. they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours. union Director Enrico C. The schedule of shift work shall be maintained. (tsn pp. to 4:30 P. testimony of Alessandro G. and 6:00 P. the rules of evidence prevailing in courts of law or equity are not controlling. In any event.M. to 6:00 A. pp.M.M. however the company may change the prevailing work time at its discretion. to 6:00 P. Even their own witness. what is stated in. Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of its clients. shift.M. Regular Working Hours — A normal workday shall consist of not more than eight (8) hours. which . of the 6:00 P. without any question or complaint. "P"). 6.M.. testified that when in 1992 he was still a Quality Control Inspector at the Sucat Plant of the company. wherein it is claimed that the company has not been computing correctly the night premium and overtime pay for work rendered between 2:00 A. The two-shift schedule effectively changed the working hours stipulated in the CBA. 16 Hence.. should such change be necessary in the operations of the Company. The reliance on the parol evidence rule is misplaced.M.M.M.s.M. he received the commensurate pay (t. the Labor Arbiter is not precluded from accepting and evaluating evidence other than. Likewise. The regular working hours for the Company shall be from 7:30 A.M. to 6:00 A. In fact. and even contrary to. 1994). while in the overtime permits. 9 to 12. and when on the 6 to 6 shifts. 15 Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases. the union Vice-President Carmelo C. to 6:00 A. In the case before us. and 6:00 A.company was only eight (8) hours. dated March 1. to 2:00 P.n. 17 It is evident from the foregoing provision that the working hours may be changed.M. Santos. Gonzales. and that the employees shall observe such rules as have been laid down by the company.

1993 up to March 7. all the rank and file employees of the company refused to follow their regular two-shift work schedule of 6:00 A. they abruptly stopped working at 2:00 P. he asked them why and their reply was "asked (sic) the union officers. to 6:00 P. Salazar which formed part of his direct testimony).M. p. it has become a habit to them to sign the overtime schedule weekly (t. all employees will return to the normal work schedule of two 12-hour shifts." Alarmed by the overtime boycott and the damage it was causing the company. respectively.M. and his answer was the same. to 6:00 A. 15. 1993. He answered that the matter could be best discussed during the formal renegotiations which anyway was to start soon. 1993. This testimonial narrations of Salazar was. 1994).M. In early April. The awareness of the respondent union. Salazar.. to 6:00 P. causing considerable delay in the production and complaints from the clients/customers (Exh. and union Director Enrico Gonzales.n. Acceding to the request. of the following day will be further shown in the discussion of the second issue. 1993 wherein the union officers asked him if he would agree to make the new CBA effective on August 1. April 16. he however had rendered overtime during those dates and was paid because unlike in other departments.n.s. the company's Vice-President-Human Resources Department. undisputed because the respondents' counsel waived his cross examination (t. Aside from the foregoing undisputed testimonies of Salazar. When answered that the management could not decide on the matter at the moment and to have it discussed and agreed upon during the formal renegotiations. hearing of January 10. the union president requested for a meeting to discuss the duration and effectivity of the CBA. his name appeared but without his signatures. 1993. a meeting was held on April 15. both amounting to illegal strike.s. "O".M.were passed around daily for the employees to sign. the very next day.M. . and 2:00 A. 1994). and 6:00 P.M. Affidavit of Alessandro G. to 6:00 A. as earlier said. with the support of the other union officers. sometime in February. 1994.M. 1993. This query was followed up sometime in March. he requested for a meeting with the union officers. 1993. its officers and members about the existence of the regular overtime schedule of 6:00 A. 1993 and the term thereof to be valid for only two (2) years. he asked them why the regular work schedule was not being followed by the employees. hearing on August 9. he was approached by the union President Nestor Ocampo and Union Director Hernando Clemente who asked him as to what was the stand of the company regarding the duration of the CBA between the company and which was set to expire on July 31.M.M. When he answered that it was still premature to discuss the matter. 18 As to the second issue of whether or not the respondents have engaged in "overtime boycott" and "work slowdown" from April 16. the overtime boycott continued and the employees at the same time employed a work slowdown campaign during working hours. In the meeting. pp. and 6:00 P. told him that if management would agree to a two-year duration for the new CBA and an effectivity date of August 1. As undisputably testified to by Mr. the evidence presented is equally crystal clear that the "overtime boycott" and "work slowdown" committed by the respondents amounted to illegal strike. 1993.. When he saw the workers leaving before the end of their shift. the testimonies of other Department Managers pointing to the union officers as the instigators of the overtime boycott and work slowdown.M. when after the 8-hours work. 26-31. Alessandro G. leaving their place of work without sealing the containers and securing the raw materials they were working on.

" Sinagot ko na ako ay Unyonista. Nadatnan ko doon ang halos lahat ng opisyales ng Unyon na sina: Nestor Ocampo Presidente Carmelo Santos Bise-Presidente Nanding Clemente Tess Montejo Director Chief Steward Segundo Flores Director Enrico Gonzales Auditor Boy Alcantara Shop Steward Rod Abuan Director at marami pang iba na hindi ko na maala-ala. Tinanong ako ni Rod Aguan kung bakit ako "nag-overtime" gayong "Binigyan ka na namin ng instruction na huwag pumasok. ako'y pinaligiran ng mga opisyales ng Unyon. Dany Tansiongco at Vicky Baron. Noong umaga ng ika-15 ng Abril 1993." "Management ka ba o Unyonista. sa opisina ng Unyon. Sinabi ko na wala akong maibigay na dahilan para lang hindi pumasok at "mag-overtime. ipinatawag ng Presidente ng Unyon na si Nestor Ocampo ang lahat ng tagamaintenance ng bawat departamento upang dumalo sa isang miting. miniting kami ng Shop Stewards namin na sina Ariel Abenoja. Sinabihan rin ako ni Tessie Montejo na siya namang Treasurer ng Unyon na 'Manny. Nakalipas ang dalawang buwan at noong unang bahagi ng Abril 1993. sinabi ni Rod Abuan. is quoted hereunder: "2. xxx xxx xxx . "5. Noon Pebrero 1993." "4. Tinanong niya muli kung bakit ako pumasok. Pagpasok ko. ako ay pinagmumura ng mga opisyales ng Unyon kaya't ako ay madaliang umalis. Sa miting na iyon. Noong ika-19 ng Abril 1993.the testimony of Epifanio Salumbides (Exh. pinilit mo pa ring pumasok. na mayroon ilalabas na memo ang Unyon na nag-uutos sa mga empleyado ng Kompanya na mag-imbento ng sari-saring dahilan para lang hindi sila makapagtrabaho ng "overtime". "3. na isang Direktor ng Unyon. huwag ka na lang pumasok sa Biyernes para hindi ka masabihan ng magtrabaho ng Sabado at Linggo' na siya namang araw ng "overtime" ko ." Pagkatapos nito. nagsabi na si Danny Tansiongco ng "showtime". ako ay ipinatawag ni Ariel Abenoja Shop Steward. Sinabihan kami na huwag ng mag-overtime pag nagbigay ng senyas ang Unyon ng "showtime. Dahil dito wala ng empleyadong nag-overtime at sabay-sabay silang umalis. 1993 na Sabado at Linggo. . "Y") a union member at the time the concerted activities of the respondents took place. . maliban sa akin. Ako ay pumasok rin noong Abril 17 at 18.

. the "overtime boycott" or "work slowdown" by the employees constituted a violation of their CBA. dated 12 April 1999. refusal to handle any merchandise. an inherently illegal activity essentially illegal even in the absence of a no-strike clause in a collective bargaining contract. she (Montejo) admitted that she could not answer how she was able to prepare the productivity reports from May 1993 to February 1994 because from April 1993 up to April 1994. 22 In Ilaw at Buklod ng Manggagawa vs. But undeniably. 1995). As such. or any other interference with any of the operations of the COMPANY during the term of . . 1993 up to March 7. to use the words of Labor Arbiter Caday. respondents' unjustified unilateral alteration of the 24-hour work schedule thru their concerted activities of "overtime boycott" and "work slowdown" from April 16. from all the foregoing. to force the petitioner company to accede to their unreasonable demands. secondary boycotts. 20 Petitioner union even admitted this in its Memorandum. a Quality Control Analyst. Theresa Montejo. . as well as in the petition before this Court. can be classified as a strike on an installment basis. (T)he concerted activity in question would still be illicit because contrary to the workers' explicit contractual commitment "that there shall be no strikes.s. For on cross-examination. hearing of February 27. . picketing. the respondents' denial of having a hand in the work slowdown since there was no change in the performance and work efficiency for the year 1993 as compared to the previous year was even rebuffed by their witness Ma. NLRC. sympathetic or general strikes. 1994. pp. . DaIAcC More importantly. 23 this Court ruled: . . .n. The Court is in substantial agreement with the petitioner's concept of a slowdown as a "strike on the installment plan. which both stated that "(s)ometime in April 1993." 21 Such admission confirmed the allegation of respondent company that petitioner engaged in "overtime boycott" and "work slowdown" which. is a slowdown. stoppage or slowdown of work. (their collective bargaining) agreement. filed with the Court of Appeals." as a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer. she was on union leave. Aside from this admission. 32-35. overtime boycott and work slowdown from April 16. sit-down strikes of any kind. decided not to render overtime. 1994 had resulted not only in financial losses to the company but also damaged its business reputation." What has just been said makes unnecessary resolution of SMC's argument that the workers' concerted refusal to adhere to the work schedule in force for the last several years. during the existence of the CBA. to stage a strike or engage in slowdown or interruption of work. on their own volition and in keeping with the regular working hours in the Company .Likewise. in relation to a labor . or statute or rule. members of herein petitioner. was taken as a means to coerce respondent company to yield to its unreasonable demands. because the higher production for the years previous to 1993 was reached when the employees regularly rendered overtime work. 19 It is thus undisputed that members of the union by their own volition decided not to render overtime services in April 1993. as correctly called by petitioner company . . the productivity reports she had earlier shown was not prepared by her since she had no personal knowledge of the reports (t. . Evidently. boycotts. 1993 up to March 7. which prohibits the union or employee. the comparison made by the respondents was of no moment. walkouts.

condoned the illegal acts they committed. retard production or their performance of duties and functions to compel management to grant their demands.J.dispute. to the employer's damage. because while the employees "continue to work and remain at their positions and accept the wages paid to them.. 24 Finally. considering perhaps the financial hardships experienced by its employees and the economic situation prevailing. Jr. Yet. and Ynares-Santiago. The Court also agrees that such a slowdown is generally condemned as inherently illicit and unjustifiable. WHEREFORE." . Footnotes . in effect. Hence. to do other work. JJ. . the petition is DENIED DUE COURSE and the 29 December 1999 decision of the Court of Appeals is AFFIRMED. without a complete stoppage of work. the company was merely complying with its legal obligations. concur. in extending substantial separation package to some officers of petitioner union during the pendency of this case." they at the same time "select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly. respondent company chose to let its employees avail of their separation benefits.. as an activity by which workers. Pardo. the Court cannot agree with the proposition that respondent company. Puno... they "work on their own terms. Respondent company correctly postured that at the time these union officers obtained their separation benefits. . they were still considered employees of the company. SO ORDERED. Davide. on official leave. C." in other words. The Court views the gesture of respondent company as an act of generosity for which it should not be punished. J. 25 Respondent company could have withheld these benefits pending the final resolution of this case.