G.R. No.
145587 October 26, 2007
EDI-STAFFBUILDERS INTERNATIONAL, INC.,
petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
ELEAZAR S. GRAN, respondents.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari1 seeks to set aside
the October 18, 2000 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 56120 which affirmed the January
15, 1999 Decision3 and September 30, 1999 Resolution4
rendered by the National Labor Relations Commission
(NLRC) (Third Division) in POEA ADJ (L) 94-06-2194,
ordering Expertise Search International (ESI), EDI-
Staffbuilders International, Inc. (EDI), and Omar Ahmed Ali
Bin Bechr Est. (OAB) jointly and severally to pay Eleazar S.
Gran (Gran) the amount of USD 16,150.00 as unpaid
salaries.
The Facts
Petitioner EDI is a corporation engaged in recruitment and
placement of Overseas Filipino Workers (OFWs).5 ESI is
another recruitment agency which collaborated with EDI to
process the documentation and deployment of private
respondent to Saudi Arabia.
Private respondent Gran was an OFW recruited by EDI,
and deployed by ESI to work for OAB, in Riyadh, Kingdom
of Saudi Arabia.6
It appears that OAB asked EDI through its October 3, 1993
letter for curricula vitae of qualified applicants for the
position of "Computer Specialist."7 In a facsimile
transmission dated November 29, 1993, OAB informed EDI
that, from the applicants' curricula vitae submitted to it for
evaluation, it selected Gran for the position of "Computer
Specialist." The faxed letter also stated that if Gran agrees
to the terms and conditions of employment contained in it,
one of which was a monthly salary of SR (Saudi Riyal)
2,250.00 (USD 600.00), EDI may arrange for Gran's
immediate dispatch.8
After accepting OAB's offer of employment, Gran signed an
employment contract9 that granted him a monthly salary of
USD 850.00 for a period of two years. Gran was then
deployed to Riyadh, Kingdom of Saudi Arabia on February
7, 1994.
Upon arrival in Riyadh, Gran questioned the discrepancy in
his monthly salary—his employment contract stated USD
850.00; while his Philippine Overseas Employment Agency
(POEA) Information Sheet indicated USD 600.00 only.
However, through the assistance of the EDI office in
Riyadh, OAB agreed to pay Gran USD 850.00 a month.10
After Gran had been working for about five months for OAB,
his employment was terminated through OAB's July 9, 1994
letter,11 on the following grounds:
1
1. Non-compliance to contract requirements by the
recruitment agency primarily on your salary and contract
duration.
2. Non-compliance to pre-qualification requirements by the
recruitment agency[,] vide OAB letter ref. F-5751-93, dated
October 3, 1993.12
3. Insubordination or disobedience to Top Management
Order and/or instructions (non-submittal of daily activity
reports despite several instructions).
On July 11, 1994, Gran received from OAB the total amount
of SR 2,948.00 representing his final pay, and on the same
day, he executed a Declaration13 releasing OAB from any
financial obligation or otherwise, towards him.
After his arrival in the Philippines, Gran instituted a
complaint, on July 21, 1994, against ESI/EDI, OAB, Country
Bankers Insurance Corporation, and Western Guaranty
Corporation with the NLRC, National Capital Region,
Quezon City, which was docketed as POEA ADJ (L) 94-06-
2194 for underpayment of wages/salaries and illegal
dismissal.
The Ruling of the Labor Arbiter
In his February 10, 1998 Decision,14 Labor Arbiter Manuel
R. Caday, to whom Gran's case was assigned, ruled that
there was neither underpayment nor illegal dismissal.
The Labor Arbiter reasoned that there was no
underpayment of salaries since according to the POEA-
Overseas Contract Worker (OCW) Information Sheet,
Gran's monthly salary was USD 600.00, and in his
Confirmation of Appointment as Computer Specialist, his
monthly basic salary was fixed at SR 2,500.00, which was
equivalent to USD 600.00.
Arbiter Caday also cited the Declaration executed by Gran,
to justify that Gran had no claim for unpaid salaries or
wages against OAB.
With regard to the issue of illegal dismissal, the Labor
Arbiter found that Gran failed to refute EDI's allegations;
namely, (1) that Gran did not submit a single activity report
of his daily activity as dictated by company policy; (2) that
he was not qualified for the job as computer specialist due
to his insufficient knowledge in programming and lack of
knowledge in ACAD system; (3) that Gran refused to follow
management's instruction for him to gain more knowledge
of the job to prove his worth as computer specialist; (4) that
Gran's employment contract had never been substituted;
(5) and that Gran was paid a monthly salary of USD 850.00,
and USD 350.00 monthly as food allowance.
Accordingly, the Labor Arbiter decided that Gran was validly
dismissed from his work due to insubordination,
disobedience, and his failure to submit daily activity reports.
Thus, on February 10, 1998, Arbiter Caday dismissed
Gran's complaint for lack of merit.
Dissatisfied, Gran filed an Appeal15 on April 6, 1998 with
the NLRC, Third Division. However, it appears from the
records that Gran failed to furnish EDI with a copy of his
Appeal Memorandum.
The Ruling of the NLRC
The NLRC held that EDI's seemingly harmless transfer of
Gran's contract to ESI is actually "reprocessing," which is a
prohibited transaction under Article 34 (b) of the Labor
Code. This scheme constituted misrepresentation through
the conspiracy between EDI and ESI in misleading Gran
and even POEA of the actual terms and conditions of the
OFW's employment. In addition, it was found that Gran did
not commit any act that constituted a legal ground for
dismissal. The alleged non-compliance with contractual
stipulations relating to Gran's salary and contract duration,
and the absence of pre-qualification requirements cannot
be attributed to Gran but to EDI, which dealt directly with
OAB. In addition, the charge of insubordination was not
substantiated, and Gran was not even afforded the required
notice and investigation on his alleged offenses.
Thus, the NLRC reversed the Labor Arbiter's Decision and
rendered a new one, the dispositive portion of which reads:
WHEREFORE, the assailed decision is SET ASIDE.
Respondents Expertise Search International, Inc., EDI
Staffbuilders Int'l., Inc. and Omar Ahmed Ali Bin Bechr Est.
(OAB) are hereby ordered jointly and severally liable to pay
the complainant Eleazar Gran the Philippine peso
equivalent at the time of actual payment of SIXTEEN
THOUSAND ONE HUNDRED FIFTY US DOLLARS
(US$16,150.00) representing his salaries for the unexpired
portion of his contract.
SO ORDERED.16
Gran then filed a Motion for Execution of Judgment17 on
March 29, 1999 with the NLRC and petitioner receiving a
copy of this motion on the same date.18
To prevent the execution, petitioner filed an Opposition19 to
Gran's motion arguing that the Writ of Execution cannot
issue because it was not notified of the appellate
proceedings before the NLRC and was not given a copy of
the memorandum of appeal nor any opportunity to
participate in the appeal.
Seeing that the NLRC did not act on Gran's motion after
EDI had filed its Opposition, petitioner filed, on August 26,
1999, a Motion for Reconsideration of the NLRC Decision
after receiving a copy of the Decision on August 16,
1999.20
The NLRC then issued a Resolution21 denying petitioner's
Motion for Reconsideration, ratiocinating that the issues
and arguments raised in the motion "had already been
amply discussed, considered, and ruled upon" in the
Decision, and that there was "no cogent reason or patent or
palpable error that warrant any disturbance thereof."
Unconvinced of the NLRC's reasoning, EDI filed a Petition
for Certiorari before the CA. Petitioner claimed in its petition
that the NLRC committed grave abuse of discretion in
giving due course to the appeal despite Gran's failure to
perfect the appeal.
2
The Ruling of the Court of Appeals
The CA subsequently ruled on the procedural and
substantive issues of EDI's petition.
On the procedural issue, the appellate court held that
"Gran's failure to furnish a copy of his appeal memorandum
[to EDI was] a mere formal lapse, an excusable neglect and
not a jurisdictional defect which would justify the dismissal
of his appeal."22 The court also held that petitioner EDI
failed to prove that private respondent was terminated for a
valid cause and in accordance with due process; and that
Gran's Declaration releasing OAB from any monetary
obligation had no force and effect. The appellate court
ratiocinated that EDI had the burden of proving Gran's
incompetence; however, other than the termination letter,
no evidence was presented to show how and why Gran
was considered to be incompetent. The court held that
since the law requires the recruitment agencies to subject
OFWs to trade tests before deployment, Gran must have
been competent and qualified; otherwise, he would not
have been hired and deployed abroad.
As for the charge of insubordination and disobedience due
to Gran's failure to submit a "Daily Activity Report," the
appellate court found that EDI failed to show that the
submission of the "Daily Activity Report" was a part of
Gran's duty or the company's policy. The court also held
that even if Gran was guilty of insubordination, he should
have just been suspended or reprimanded, but not
dismissed.
The CA also held that Gran was not afforded due process,
given that OAB did not abide by the twin notice
requirement. The court found that Gran was terminated on
the same day he received the termination letter, without
having been apprised of the bases of his dismissal or
afforded an opportunity to explain his side.
Finally, the CA held that the Declaration signed by Gran did
not bar him from demanding benefits to which he was
entitled. The appellate court found that the Declaration was
in the form of a quitclaim, and as such is frowned upon as
contrary to public policy especially where the monetary
consideration given in the Declaration was very much less
than what he was legally entitled to—his backwages
amounting to USD 16,150.00.
As a result of these findings, on October 18, 2000, the
appellate court denied the petition to set aside the NLRC
Decision.
Hence, this instant petition is before the Court.
The Issues
Petitioner raises the following issues for our consideration:
I. WHETHER THE FAILURE OF GRAN TO FURNISH A
COPY OF HIS APPEAL MEMORANDUM TO PETITIONER
EDI WOULD CONSTITUTE A JURISDICTIONAL DEFECT
AND A DEPRIVATION OF PETITIONER EDI'S RIGHT TO
DUE PROCESS AS WOULD JUSTIFY THE DISMISSAL
OF GRAN'S APPEAL.
II. WHETHER PETITIONER EDI HAS ESTABLISHED BY
WAY OF SUBSTANTIAL EVIDENCE THAT GRAN'S
TERMINATION WAS JUSTIFIABLE BY REASON OF
INCOMPETENCE. COROLLARY HERETO, WHETHER
THE PRIETO VS. NLRC RULING, AS APPLIED BY THE
COURT OF APPEALS, IS APPLICABLE IN THE INSTANT
CASE.
III. WHETHER PETITIONER HAS ESTABLISHED BY WAY
OF SUBSTANTIAL EVIDENCE THAT GRAN'S
TERMINATION WAS JUSTIFIABLE BY REASON OF
INSUBORDINATION AND DISOBEDIENCE.
IV. WHETHER GRAN WAS AFFORDED DUE PROCESS
PRIOR TO TERMINATION.
V. WHETHER GRAN IS ENTITLED TO BACKWAGES
FOR THE UNEXPIRED PORTION OF HIS CONTRACT.23
The Court's Ruling
The petition lacks merit except with respect to Gran's failure
to furnish EDI with his Appeal Memorandum filed with the
NLRC.
First Issue: NLRC's Duty is to Require Respondent to
Provide Petitioner a Copy of the Appeal
Petitioner EDI claims that Gran's failure to furnish it a copy
of the Appeal Memorandum constitutes a jurisdictional
defect and a deprivation of due process that would warrant
a rejection of the appeal.
This position is devoid of merit.
In a catena of cases, it was ruled that failure of appellant to
furnish a copy of the appeal to the adverse party is not fatal
to the appeal.
In Estrada v. National Labor Relations Commission,24 this
Court set aside the order of the NLRC which dismissed an
appeal on the sole ground that the appellant did not furnish
the appellee a memorandum of appeal contrary to the
requirements of Article 223 of the New Labor Code and
Section 9, Rule XIII of its Implementing Rules and
Regulations.
Also, in J.D. Magpayo Customs Brokerage Corp. v. NLRC,
the order of dismissal of an appeal to the NLRC based on
the ground that "there is no showing whatsoever that a
copy of the appeal was served by the appellant on the
appellee"25 was annulled. The Court ratiocinated as
follows:
The failure to give a copy of the appeal to the adverse party
was a mere formal lapse, an excusable neglect. Time and
again We have acted on petitions to review decisions of the
Court of Appeals even in the absence of proof of service of
a copy thereof to the Court of Appeals as required by
Section 1 of Rule 45, Rules of Court. We act on the
petitions and simply require the petitioners to comply with
the rule.26 (Emphasis supplied.)
The J.D. Magpayo ruling was reiterated in Carnation
Philippines Employees Labor Union-FFW v. National Labor
3
Relations Commission,27 Pagdonsalan v. NLRC,28 and in
Sunrise Manning Agency, Inc. v. NLRC.29
Thus, the doctrine that evolved from these cases is that
failure to furnish the adverse party with a copy of the appeal
is treated only as a formal lapse, an excusable neglect, and
hence, not a jurisdictional defect. Accordingly, in such a
situation, the appeal should not be dismissed; however, it
should not be given due course either. As enunciated in
J.D. Magpayo, the duty that is imposed on the NLRC, in
such a case, is to require the appellant to comply with the
rule that the opposing party should be provided with a copy
of the appeal memorandum.
While Gran's failure to furnish EDI with a copy of the Appeal
Memorandum is excusable, the abject failure of the NLRC
to order Gran to furnish EDI with the Appeal Memorandum
constitutes grave abuse of discretion.
The records reveal that the NLRC discovered that Gran
failed to furnish EDI a copy of the Appeal Memorandum.
The NLRC then ordered Gran to present proof of service. In
compliance with the order, Gran submitted a copy of Camp
Crame Post Office's list of mail/parcels sent on April 7,
1998.30 The post office's list shows that private respondent
Gran sent two pieces of mail on the same date: one
addressed to a certain Dan O. de Guzman of Legaspi
Village, Makati; and the other appears to be addressed to
Neil B. Garcia (or Gran),31 of Ermita, Manila—both of
whom are not connected with petitioner.
This mailing list, however, is not a conclusive proof that EDI
indeed received a copy of the Appeal Memorandum.
Sec. 5 of the NLRC Rules of Procedure (1990) provides for
the proof and completeness of service in proceedings
before the NLRC:
Section 5.32 Proof and completeness of service.—The
return is prima facie proof of the facts indicated therein.
Service by registered mail is complete upon receipt by the
addressee or his agent; but if the addressee fails to claim
his mail from the post office within five (5) days from the
date of first notice of the postmaster, service shall take
effect after such time. (Emphasis supplied.)
Hence, if the service is done through registered mail, it is
only deemed complete when the addressee or his agent
received the mail or after five (5) days from the date of first
notice of the postmaster. However, the NLRC Rules do not
state what would constitute proper proof of service.
Sec. 13, Rule 13 of the Rules of Court, provides for proofs
of service:
Section 13. Proof of service.—Proof of personal service
shall consist of a written admission of the party served or
the official return of the server, or the affidavit of the party
serving, containing a full statement of the date, place and
manner of service. If the service is by ordinary mail, proof
thereof shall consist of an affidavit of the person mailing of
facts showing compliance with section 7 of this Rule. If
service is made by registered mail, proof shall be made by
such affidavit and registry receipt issued by the mailing
office. The registry return card shall be filed immediately
upon its receipt by the sender, or in lieu thereof the
unclaimed letter together with the certified or sworn copy of
the notice given by the postmaster to the addressee
(emphasis supplied).
Based on the foregoing provision, it is obvious that the list
submitted by Gran is not conclusive proof that he had
served a copy of his appeal memorandum to EDI, nor is it
conclusive proof that EDI received its copy of the Appeal
Memorandum. He should have submitted an affidavit
proving that he mailed the Appeal Memorandum together
with the registry receipt issued by the post office;
afterwards, Gran should have immediately filed the registry
return card.
Hence, after seeing that Gran failed to attach the proof of
service, the NLRC should not have simply accepted the
post office's list of mail and parcels sent; but it should have
required Gran to properly furnish the opposing parties with
copies of his Appeal Memorandum as prescribed in J.D.
Magpayo and the other cases. The NLRC should not have
proceeded with the adjudication of the case, as this
constitutes grave abuse of discretion.
The glaring failure of NLRC to ensure that Gran should
have furnished petitioner EDI a copy of the Appeal
Memorandum before rendering judgment reversing the
dismissal of Gran's complaint constitutes an evasion of the
pertinent NLRC Rules and established jurisprudence.
Worse, this failure deprived EDI of procedural due process
guaranteed by the Constitution which can serve as basis for
the nullification of proceedings in the appeal before the
NLRC. One can only surmise the shock and dismay that
OAB, EDI, and ESI experienced when they thought that the
dismissal of Gran's complaint became final, only to receive
a copy of Gran's Motion for Execution of Judgment which
also informed them that Gran had obtained a favorable
NLRC Decision. This is not level playing field and
absolutely unfair and discriminatory against the employer
and the job recruiters. The rights of the employers to
procedural due process cannot be cavalierly disregarded
for they too have rights assured under the Constitution.
However, instead of annulling the dispositions of the NLRC
and remanding the case for further proceedings we will
resolve the petition based on the records before us to avoid
a protracted litigation.33
The second and third issues have a common matter—
whether there was just cause for Gran's dismissal—hence,
they will be discussed jointly.
Second and Third Issues: Whether Gran's dismissal is
justifiable by reason of incompetence, insubordination, and
disobedience
In cases involving OFWs, the rights and obligations among
and between the OFW, the local recruiter/agent, and the
foreign employer/principal are governed by the employment
contract. A contract freely entered into is considered law
between the parties; and hence, should be respected. In
formulating the contract, the parties may establish such
stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy.34
4
In the present case, the employment contract signed by
Gran specifically states that Saudi Labor Laws will govern
matters not provided for in the contract (e.g. specific causes
for termination, termination procedures, etc.). Being the law
intended by the parties (lex loci intentiones) to apply to the
contract, Saudi Labor Laws should govern all matters
relating to the termination of the employment of Gran.
In international law, the party who wants to have a foreign
law applied to a dispute or case has the burden of proving
the foreign law. The foreign law is treated as a question of
fact to be properly pleaded and proved as the judge or labor
arbiter cannot take judicial notice of a foreign law. He is
presumed to know only domestic or forum law.35
Unfortunately for petitioner, it did not prove the pertinent
Saudi laws on the matter; thus, the International Law
doctrine of presumed-identity approach or processual
presumption comes into play.36 Where a foreign law is not
pleaded or, even if pleaded, is not proved, the presumption
is that foreign law is the same as ours.37 Thus, we apply
Philippine labor laws in determining the issues presented
before us.
Petitioner EDI claims that it had proven that Gran was
legally dismissed due to incompetence and insubordination
or disobedience.
This claim has no merit.
In illegal dismissal cases, it has been established by
Philippine law and jurisprudence that the employer should
prove that the dismissal of employees or personnel is legal
and just.
Section 33 of Article 277 of the Labor Code38 states that:
ART. 277. MISCELLANEOUS PROVISIONS39
(b) Subject to the constitutional right of workers to security
of tenure and their right to be protected against dismissal
except for a just and authorized cause and without
prejudice to the requirement of notice under Article 283 of
this Code, the employer shall furnish the worker whose
employment is sought to be terminated a written notice
containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and to
defend himself with the assistance of his representative if
he so desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken
by the employer shall be without prejudice to the right of the
workers to contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the National
Labor Relations Commission. The burden of proving that
the termination was for a valid or authorized cause shall
rest on the employer. x x x
In many cases, it has been held that in termination disputes
or illegal dismissal cases, the employer has the burden of
proving that the dismissal is for just and valid causes; and
failure to do so would necessarily mean that the dismissal
was not justified and therefore illegal.40 Taking into account
the character of the charges and the penalty meted to an
employee, the employer is bound to adduce clear, accurate,
consistent, and convincing evidence to prove that the
dismissal is valid and legal.41 This is consistent with the
principle of security of tenure as guaranteed by the
Constitution and reinforced by Article 277 (b) of the Labor
Code of the Philippines.42
In the instant case, petitioner claims that private respondent
Gran was validly dismissed for just cause, due to
incompetence and insubordination or disobedience. To
prove its allegations, EDI submitted two letters as evidence.
The first is the July 9, 1994 termination letter,43 addressed
to Gran, from Andrea E. Nicolaou, Managing Director of
OAB. The second is an unsigned April 11, 1995 letter44
from OAB addressed to EDI and ESI, which outlined the
reasons why OAB had terminated Gran's employment.
Petitioner claims that Gran was incompetent for the
Computer Specialist position because he had "insufficient
knowledge in programming and zero knowledge of [the]
ACAD system."45 Petitioner also claims that Gran was
justifiably dismissed due to insubordination or disobedience
because he continually failed to submit the required "Daily
Activity Reports."46 However, other than the
abovementioned letters, no other evidence was presented
to show how and why Gran was considered incompetent,
insubordinate, or disobedient. Petitioner EDI had clearly
failed to overcome the burden of proving that Gran was
validly dismissed.
Petitioner's imputation of incompetence on private
respondent due to his "insufficient knowledge in
programming and zero knowledge of the ACAD system"
based only on the above mentioned letters, without any
other evidence, cannot be given credence.
An allegation of incompetence should have a factual
foundation. Incompetence may be shown by weighing it
against a standard, benchmark, or criterion. However, EDI
failed to establish any such bases to show how petitioner
found Gran incompetent.
In addition, the elements that must concur for the charge of
insubordination or willful disobedience to prosper were not
present.
In Micro Sales Operation Network v. NLRC, we held that:
For willful disobedience to be a valid cause for dismissal,
the following twin elements must concur: (1) the employee's
assailed conduct must have been willful, that is,
characterized by a wrongful and perverse attitude; and (2)
the order violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties
which he had been engaged to discharge.47
EDI failed to discharge the burden of proving Gran's
insubordination or willful disobedience. As indicated by the
second requirement provided for in Micro Sales Operation
Network, in order to justify willful disobedience, we must
determine whether the order violated by the employee is
reasonable, lawful, made known to the employee, and
pertains to the duties which he had been engaged to
discharge. In the case at bar, petitioner failed to show that
the order of the company which was violated—the
submission of "Daily Activity Reports"—was part of Gran's
duties as a Computer Specialist. Before the Labor Arbiter,
EDI should have provided a copy of the company policy,
5
Gran's job description, or any other document that would
show that the "Daily Activity Reports" were required for
submission by the employees, more particularly by a
Computer Specialist.
Even though EDI and/or ESI were merely the local
employment or recruitment agencies and not the foreign
employer, they should have adduced additional evidence to
convincingly show that Gran's employment was validly and
legally terminated. The burden devolves not only upon the
foreign-based employer but also on the employment or
recruitment agency for the latter is not only an agent of the
former, but is also solidarily liable with the foreign principal
for any claims or liabilities arising from the dismissal of the
worker.48
Thus, petitioner failed to prove that Gran was justifiably
dismissed due to incompetence, insubordination, or willful
disobedience.
Petitioner also raised the issue that Prieto v. NLRC,49 as
used by the CA in its Decision, is not applicable to the
present case.
In Prieto, this Court ruled that "[i]t is presumed that before
their deployment, the petitioners were subjected to trade
tests required by law to be conducted by the recruiting
agency to insure employment of only technically qualified
workers for the foreign principal."50 The CA, using the
ruling in the said case, ruled that Gran must have passed
the test; otherwise, he would not have been hired.
Therefore, EDI was at fault when it deployed Gran who was
allegedly "incompetent" for the job.
According to petitioner, the Prieto ruling is not applicable
because in the case at hand, Gran misrepresented himself
in his curriculum vitae as a Computer Specialist; thus, he
was not qualified for the job for which he was hired.
We disagree.
The CA is correct in applying Prieto. The purpose of the
required trade test is to weed out incompetent applicants
from the pool of available workers. It is supposed to reveal
applicants with false educational backgrounds, and expose
bogus qualifications. Since EDI deployed Gran to Riyadh, it
can be presumed that Gran had passed the required trade
test and that Gran is qualified for the job. Even if there was
no objective trade test done by EDI, it was still EDI's
responsibility to subject Gran to a trade test; and its failure
to do so only weakened its position but should not in any
way prejudice Gran. In any case, the issue is rendered
moot and academic because Gran's incompetency is
unproved.
Fourth Issue: Gran was not Afforded Due Process
As discussed earlier, in the absence of proof of Saudi laws,
Philippine Labor laws and regulations shall govern the
relationship between Gran and EDI. Thus, our laws and
rules on the requisites of due process relating to termination
of employment shall apply.
Petitioner EDI claims that private respondent Gran was
afforded due process, since he was allowed to work and
improve his capabilities for five months prior to his
termination.51 EDI also claims that the requirements of due
process, as enunciated in Santos, Jr. v. NLRC,52 and
Malaya Shipping Services, Inc. v. NLRC,53 cited by the CA
in its Decision, were properly observed in the present case.
This position is untenable.
In Agabon v. NLRC,54 this Court held that:
Procedurally, (1) if the dismissal is based on a just cause
under Article 282, the employer must give the employee
two written notices and a hearing or opportunity to be heard
if requested by the employee before terminating the
employment: a notice specifying the grounds for which
dismissal is sought a hearing or an opportunity to be heard
and after hearing or opportunity to be heard, a notice of the
decision to dismiss; and (2) if the dismissal is based on
authorized causes under Articles 283 and 284, the
employer must give the employee and the Department of
Labor and Employment written notices 30 days prior to the
effectivity of his separation.
Under the twin notice requirement, the employees must be
given two (2) notices before their employment could be
terminated: (1) a first notice to apprise the employees of
their fault, and (2) a second notice to communicate to the
employees that their employment is being terminated. In
between the first and second notice, the employees should
be given a hearing or opportunity to defend themselves
personally or by counsel of their choice.55
A careful examination of the records revealed that, indeed,
OAB's manner of dismissing Gran fell short of the two
notice requirement. While it furnished Gran the written
notice informing him of his dismissal, it failed to furnish
Gran the written notice apprising him of the charges against
him, as prescribed by the Labor Code.56 Consequently, he
was denied the opportunity to respond to said notice. In
addition, OAB did not schedule a hearing or conference
with Gran to defend himself and adduce evidence in
support of his defenses. Moreover, the July 9, 1994
termination letter was effective on the same day. This
shows that OAB had already condemned Gran to dismissal,
even before Gran was furnished the termination letter. It
should also be pointed out that OAB failed to give Gran the
chance to be heard and to defend himself with the
assistance of a representative in accordance with Article
277 of the Labor Code. Clearly, there was no intention to
provide Gran with due process. Summing up, Gran was
notified and his employment arbitrarily terminated on the
same day, through the same letter, and for unjustified
grounds. Obviously, Gran was not afforded due process.
Pursuant to the doctrine laid down in Agabon,57 an
employer is liable to pay nominal damages as indemnity for
violating the employee's right to statutory due process.
Since OAB was in breach of the due process requirements
under the Labor Code and its regulations, OAB, ESI, and
EDI, jointly and solidarily, are liable to Gran in the amount
of PhP 30,000.00 as indemnity.
Fifth and Last Issue: Gran is Entitled to Backwages
We reiterate the rule that with regard to employees hired for
a fixed period of employment, in cases arising before the
effectivity of R.A. No. 804258 (Migrant Workers and
6
Overseas Filipinos Act) on August 25, 1995, that when the
contract is for a fixed term and the employees are
dismissed without just cause, they are entitled to the
payment of their salaries corresponding to the unexpired
portion of their contract.59 On the other hand, for cases
arising after the effectivity of R.A. No. 8042, when the
termination of employment is without just, valid or
authorized cause as defined by law or contract, the worker
shall be entitled to the full reimbursement of his placement
fee with interest of twelve percent (12%) per annum, plus
his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the
unexpired term whichever is less.60
In the present case, the employment contract provides that
the employment contract shall be valid for a period of two
(2) years from the date the employee starts to work with the
employer.61 Gran arrived in Riyadh, Saudi Arabia and
started to work on February 7, 1994;62 hence, his
employment contract is until February 7, 1996. Since he
was illegally dismissed on July 9, 1994, before the
effectivity of R.A. No. 8042, he is therefore entitled to
backwages corresponding to the unexpired portion of his
contract, which was equivalent to USD 16,150.
Petitioner EDI questions the legality of the award of
backwages and mainly relies on the Declaration which is
claimed to have been freely and voluntarily executed by
Gran. The relevant portions of the Declaration are as
follows:
I, ELEAZAR GRAN (COMPUTER SPECIALIST) AFTER
RECEIVING MY FINAL SETTLEMENT ON THIS DATE
THE AMOUNT OF:
S.R. 2,948.00 (SAUDI RIYALS TWO THOUSAND NINE
HUNDRED FORTY EIGHT ONLY)
REPRESENTING COMPLETE PAYMENT
(COMPENSATION) FOR THE SERVICES I RENDERED
TO OAB ESTABLISHMENT.
I HEREBY DECLARE THAT OAB EST. HAS NO
FINANCIAL OBLIGATION IN MY FAVOUR AFTER
RECEIVING THE ABOVE MENTIONED AMOUNT IN
CASH.
I STATE FURTHER THAT OAB EST. HAS NO
OBLIGATION TOWARDS ME IN WHATEVER FORM.
I ATTEST TO THE TRUTHFULNESS OF THIS
STATEMENT BY AFFIXING MY SIGNATURE
VOLUNTARILY.
SIGNED.
ELEAZAR GRAN
Courts must undertake a meticulous and rigorous review of
quitclaims or waivers, more particularly those executed by
employees. This requirement was clearly articulated by
Chief Justice Artemio V. Panganiban in Land and Housing
Development Corporation v. Esquillo:
Quitclaims, releases and other waivers of benefits granted
by laws or contracts in favor of workers should be strictly
scrutinized to protect the weak and the disadvantaged. The
waivers should be carefully examined, in regard not only to
the words and terms used, but also the factual
circumstances under which they have been executed.63
(Emphasis supplied.)
This Court had also outlined in Land and Housing
Development Corporation, citing Periquet v. NLRC,64 the
parameters for valid compromise agreements, waivers, and
quitclaims:
Not all waivers and quitclaims are invalid as against public
policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the
parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on
its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of what
he was doing, and the consideration for the quitclaim is
credible and reasonable, the transaction must be
recognized as a valid and binding undertaking. (Emphasis
supplied.)
Is the waiver and quitclaim labeled a Declaration valid? It is
not.
The Court finds the waiver and quitclaim null and void for
the following reasons:
1. The salary paid to Gran upon his termination, in the
amount of SR 2,948.00, is unreasonably low. As correctly
pointed out by the court a quo, the payment of SR 2,948.00
is even lower than his monthly salary of SR 3,190.00 (USD
850.00). In addition, it is also very much less than the USD
16,150.00 which is the amount Gran is legally entitled to get
from petitioner EDI as backwages.
2. The Declaration reveals that the payment of SR 2,948.00
is actually the payment for Gran's salary for the services he
rendered to OAB as Computer Specialist. If the Declaration
is a quitclaim, then the consideration should be much much
more than the monthly salary of SR 3,190.00 (USD 850.00)
—although possibly less than the estimated Gran's salaries
for the remaining duration of his contract and other benefits
as employee of OAB. A quitclaim will understandably be
lower than the sum total of the amounts and benefits that
can possibly be awarded to employees or to be earned for
the remainder of the contract period since it is a
compromise where the employees will have to forfeit a
certain portion of the amounts they are claiming in
exchange for the early payment of a compromise amount.
The court may however step in when such amount is
unconscionably low or unreasonable although the
employee voluntarily agreed to it. In the case of the
Declaration, the amount is unreasonably small compared to
the future wages of Gran.
3. The factual circumstances surrounding the execution of
the Declaration would show that Gran did not voluntarily
and freely execute the document. Consider the following
chronology of events:
7
a. On July 9, 1994, Gran received a copy of his letter of
termination;
b. On July 10, 1994, Gran was instructed to depart Saudi
Arabia and required to pay his plane ticket;65
c. On July 11, 1994, he signed the Declaration;
d. On July 12, 1994, Gran departed from Riyadh, Saudi
Arabia; and
e. On July 21, 1994, Gran filed the Complaint before the
NLRC.
The foregoing events readily reveal that Gran was "forced"
to sign the Declaration and constrained to receive the
amount of SR 2,948.00 even if it was against his will—since
he was told on July 10, 1994 to leave Riyadh on July 12,
1994. He had no other choice but to sign the Declaration as
he needed the amount of SR 2,948.00 for the payment of
his ticket. He could have entertained some apprehensions
as to the status of his stay or safety in Saudi Arabia if he
would not sign the quitclaim.
4. The court a quo is correct in its finding that the
Declaration is a contract of adhesion which should be
construed against the employer, OAB. An adhesion
contract is contrary to public policy as it leaves the weaker
party—the employee—in a "take-it-or-leave-it" situation.
Certainly, the employer is being unjust to the employee as
there is no meaningful choice on the part of the employee
while the terms are unreasonably favorable to the
employer.66
Thus, the Declaration purporting to be a quitclaim and
waiver is unenforceable under Philippine laws in the
absence of proof of the applicable law of Saudi Arabia.
In order to prevent disputes on the validity and
enforceability of quitclaims and waivers of employees under
Philippine laws, said agreements should contain the
following:
1. A fixed amount as full and final compromise settlement;
2. The benefits of the employees if possible with the
corresponding amounts, which the employees are giving up
in consideration of the fixed compromise amount;
3. A statement that the employer has clearly explained to
the employee in English, Filipino, or in the dialect known to
the employees—that by signing the waiver or quitclaim,
they are forfeiting or relinquishing their right to receive the
benefits which are due them under the law; and
4. A statement that the employees signed and executed the
document voluntarily, and had fully understood the contents
of the document and that their consent was freely given
without any threat, violence, duress, intimidation, or undue
influence exerted on their person.
It is advisable that the stipulations be made in English and
Tagalog or in the dialect known to the employee. There
should be two (2) witnesses to the execution of the
quitclaim who must also sign the quitclaim. The document
should be subscribed and sworn to under oath preferably
before any administering official of the Department of Labor
and Employment or its regional office, the Bureau of Labor
Relations, the NLRC or a labor attaché in a foreign country.
Such official shall assist the parties regarding the execution
of the quitclaim and waiver.67 This compromise settlement
becomes final and binding under Article 227 of the Labor
Code which provides that:
[A]ny compromise settlement voluntarily agreed upon with
the assistance of the Bureau of Labor Relations or the
regional office of the DOLE, shall be final and binding upon
the parties and the NLRC or any court "shall not assume
jurisdiction over issues involved therein except in case of
non-compliance thereof or if there is prima facie evidence
that the settlement was obtained through fraud,
misrepresentation, or coercion.
It is made clear that the foregoing rules on quitclaim or
waiver shall apply only to labor contracts of OFWs in the
[G.R. No. L-54204. September 30, 1982.]
NORSE MANAGEMENT CO. (PTE) and PACIFIC SEAMEN
SERVICES, INC., Petitioners, v. NATIONAL SEAMEN
BOARD, HON. CRESCENCIO M. SIDDAYAO, OSCAR M.
TORRES, REBENE C. CARRERA and RESTITUTA C.
ABORDO, Respondents.
Bito, Misa & Lozada Law Offices, for Petitioners.
The Solicitor General for Respondents.
Jose A. Rico for private respondent Abordo.
SYNOPSIS
Restituta C. Abordo filed a complaint for "death
compensation benefits" before the National Seamen
Board, for the death of her husband, who died in the
course of employment with petitioner company, as
Second Engineer in a vessel of Singaporean Registry.
Abordo claims that she is entitled to compensation
based’ on Singaporean laws while petitioners contend
otherwise since respondent Board cannot take judicial
notice of the Workmen’s Insurance Law of Singapore.
Petitioners offered Abordo P30,000.00; benefits under
Singaporean law were greater. The respondent Board
decided in favor of the respondent Abordo On appeal,
the Ministry of Labor affirmed the decision. Petitioner
company came to this Court on certiorari praying that
the decision of the Seamen Board, affirmed by the
Ministry of Labor, he nullified for basing been rendered
without jurisdiction and for making an award beyond
the maximum allowable. The records show, however,
that the "Employment Agreement" between Abordo’s
husband and petitioner company provides that
compensation shall be paid under Philippine Law or the
8
absence of proof of the laws of the foreign country agreed
upon to govern said contracts. Otherwise, the foreign laws
shall apply.
WHEREFORE, the petition is DENIED. The October 18,
2000 Decision in CA-G.R. SP No. 56120 of the Court of
Appeals affirming the January 15, 1999 Decision and
September 30, 1999 Resolution of the NLRC
is AFFIRMED with the MODIFICATION that petitioner EDI-
Staffbuilders International, Inc. shall pay the amount of PhP
30,000.00 to respondent Gran as nominal damages for
non-compliance with statutory due process.
No costs.
SO ORDERED.
law of the registry of petitioners’ vessel, whichever is
greater.
The Supreme Court DENIED the petition for lack of
merit. It ruled that the Employment Agreement is clear
as to which law to apply; and that since respondent
Board under Article 20 of the Labor Code has original
and exclusive jurisdiction over all matters relative to
employer-employee relationship involving Filipino
seamen for overseas employment, it is assumed to be
familiar with pertinent Singaporean laws relative to
workmen’s compensation.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS;
EMPLOYMENT CONTRACT; TERMS AND CONDITIONS
ARE BINDING ON THE PARTIES. — In the
aforementioned "Employment Agreement" between
petitioners and the late Napoleon B. Abordo, it is clear
that the death compensation claimed shall be paid
under Philippine law or the law of registry of
petitioners’ vessel whichever is greater. Since private
respondent was offered P30,000.00 only by petitioners,
Singaporean law which granted greater benefits was
properly applied in this case.
2. ID.; LABOR CODE; NATIONAL SEAMEN BOARD;
ORIGINAL AND EXCLUSIVE JURISDICTION OVER ALL
CASES INVOLVING EMPLOYER-EMPLOYEE RELATIONS
INVOLVING FILIPINO SEAMEN. — Article 20, Labor Code
of the Philippines, provides that the National Seamen
Board has original and exclusive jurisdiction over all
matters or cases including money claims, involving
employer-employee relations, arising out of or by virtue
of any law or contracts involving Filipino seamen for
overseas employment. Thus, ills safe to assume that the
Board is familiar with pertinent Singapore maritime
laws relative to workers’ compensation.
3. ID.; ID.; ID.; BOARD MAY APPLY RULE ON JUDICIAL
NOTICE. — The National Seamen Board may apply the
rule on judicial notice and, in administrative
proceedings, the technical rules of procedure-
particularly of evidence-applied in judicial trials, do not
strictly apply" (Oromeca Lumber Co Inc. v. Social
Security Commission, 4 SCRA ll88).
4. ID.; ID.; RULE ON CONSTRUCTION AND
INTERPRETATION OF PROVISIONS THEREOF. — Finally,
Article IV of the Labor Code provides that "all doubts in
the implementation and interpretation of the provisions
of this code, including its implementing rules and
regulations, shall be resolved in favor of labor."
DECISION
RELOVA, J.:
In this petition for certiorari, petitioners pray that the
order dated June 20, 1979 of the National Seamen
board, and the decision dated December 11, 1979 of
the Ministry of Labor be nullified and set aside, and that
"if petitioners are found liable to private respondent,
such a liability be reduced to P30,000.00 only, in
accordance with respondent NSB’s Standard Format of
a Service Agreement."cralaw virtua1aw library
Napoleon B. Abordo, the deceased husband of private
respondent Restituta C. Abordo, was the Second
Engineer of M.T. "Cherry Earl" when he died from an
apoplectic stroke in the course of his employment with
petitioner NORSE MANAGEMENT COMPANY (PTE). The
M.T. "Cherry Earl" is a vessel of Singaporean Registry.
The late Napoleon B. Abordo at the time of his death
was receiving a monthly salary of US$850.00 (Petition,
page 5).
In her complaint for "death compensation benefits,
accrued leave pay and time-off allowances, funeral
expenses, attorney’s fees and other benefits and reliefs
available in connection with the death of Napoleon B.
Abordo," filed before the National Seamen Board,
Restituta C. Abordo alleged that the amount of
compensation due her from petitioners Norse
Management Co. (PTE) and Pacific Seamen Services,
9
Inc., principal and agent, respectively, should be based
on the law where the vessel is registered. On the other
hand, petitioners contend that the law of Singapore
should not be applied in this case because the National
Seamen Board cannot take judicial notice of the
Workmen’s Insurance Law of Singapore. As an
alternative, they offered to pay private respondent
Restituta C. Abordo the sum of P30,000.00 as death
benefits based on the Board’s Memorandum Circular
No. 25 which they claim should apply in this
case.cralawnad
The Hearing Officer III, Rebene C. Carrera of the
Ministry of Labor and Employment, after hearing the
case, rendered judgment on June 20, 1979, ordering
herein petitioners "to pay jointly and severally the
following:jgc:chanrobles.com.ph
"I. US$30,600 (the 36-month salary of the deceased) or
its equivalent in Philippine currency as death
compensation benefits;
II. US$500.00 or its equivalent in Philippine currency as
funeral expenses;
III. US$3,110 or 10% of the total amount recovered as
attorney’s fees.
"It is also ordered that payment must be made thru the
National Seamen Board within ten (10) days from
receipt of this decision."cralaw virtua1aw library
Petitioners appealed to the Ministry of Labor. On
December 11, 1979, the Ministry rendered its decision
in this case as follows:jgc:chanrobles.com.ph
"Motion for reconsideration fixed by respondents from
the Order of this Board dated 20 June 1979 requiring
them to pay complainant, jointly and severally, the
amount of Thirty-four thousand and two hundred ten
dollars ($34,210.00) representing death benefits,
funeral expenses and attorney’s fees.
"The facts in the main are not disputed. The deceased,
husband of complainant herein, was employed as a
Second Engineer by respondents and served as such in
the vessel ‘M.T. Cherry Earl’ until that fatal day in May
1978 when, while at sea, he suffered an apoplectic
stroke and died four days later or on 29 May 1978. In
her complaint filed before this Board, Abordo argued
that the amount of compensation due her should be
based on the law where the vessel is registered, which
is Singapore law. Agreeing with said argument, this
Board issued the questioned Order. Hence this Motion
for Reconsideration.
"In their motion for reconsideration, respondents
strongly argue that the law of Singapore should not be
applied in the case considering that their responsibility
was not alleged in the complaint that no proof of the
existence of the Workmen’s Insurance Law of Singapore
was ever presented and that the Board cannot take
judicial notice of the Workmen’s Insurance Law of
Singapore. As an alternative, they offered to pay
complainant the amount of Thirty Thousand Pesos
(P30,000.00) as death benefits based on this Board’s
Memorandum Circular No. 25 which, they maintained,
should apply in thus case.
"The only issue we are called upon to rule is whether or
not the law of Singapore ought to be applied in this
case.
"After an exhaustive study of jurisprudence on the
matter, we rule in the affirmative. Respondents came
out with a well-prepared motion which, to our mind, is
more appropriate and perhaps acceptable in the regular
court of justice. Nothing is raised in their motion but
question of evidence. But evidence is usually a matter of
procedure of which this Board, being merely a
quasijudicial body, is not strict about.
"It is true that the law of Singapore was not alleged and
proved in the course of the hearing. And following
Supreme Court decisions in a long line of cases that a
foreign law, being a matter of evidence, must be alleged
and proved, the law of Singapore ought not to be
recognized in this case. But it is our considered opinion
that the jurisprudence on this matter was never meant
to apply to cases before administrative or quasijudicial
bodies such as the National Seamen Board. For well-
settled also is the rule that administrative and
quasijudicial bodies are not bound strictly by technical
rules. It has always been the policy of this Board, as
enunciated in a long line of cases, that in cases of valid
claims for benefits on account of injury or death while
in the course of employment, the law of the country in
which the vessel is registered shall be considered. We
see no reason to deviate from this well-considered
policy. Certainly not on technical grounds as movants
herein would like us to.
"WHEREFORE, the motion for reconsideration is hereby
denied and the Order of this Board dated 20 June 1979
affirmed. Let execution issue immediately."cralaw
virtua1aw library
10
In Section 5(B) of the "Employment Agreement"
between Norse Management Co. (PTE) and the late
Napoleon B. Abordo, which is Annex "C" of the
Supplemental Complaint, it was stipulated
that:chanrobles law library : red
"In the event of illness or injury to Employee arising out
of and in the course of his employment and not due to
his own willful misconduct and occurring whilst on
board any vessel to which he may be assigned, but not
any other time, the EMPLOYER will provide employee
with free medical attention, including hospital
treatment, also essential medical treatment in the
course of repatriation and until EMPLOYEE’s arrival at
his point of origin, If such illness or injury incapacitates
the EMPLOYEE to the extent the EMPLOYEE’s services
must be terminated as determined by a qualified
physician designated by the EMPLOYER and provided
such illness or injury was not due in part or whole to his
willful act, neglect or misconduct compensation shall be
paid to employee in accordance with and subject to the
limitations of the Workmen’s Compensation Act of the
Republic of the Philippines or the Workmen’s Insurance
Law of registry of the vessel whichever is greater."
(Italics supplied)
In the aforementioned "Employment Agreement"
between petitioners and the late Napoleon B. Abordo, it
is clear that compensation shall be paid under
Philippine Law or the law of registry of petitioners’
vessel, whichever is greater. Since private respondent
Restituta C. Abordo was offered P30,000.00 only by the
petitioners, Singapore law was properly applied in this
case.
The "Employment Agreement" is attached to the
Supplemental Complaint of Restituta C. Abordo and,
therefore, it forms part thereof. As it is familiar with
Singapore Law, the National Seamen Board is justified in
taking judicial notice of and in applying that law. In the
case of Virjen Shipping and Marine Services, Inc. v.
National Seamen Board, et al (L-41297), the respondent
Board promulgated a decision, as
follows:jgc:chanrobles.com.ph
"The facts established and/or admitted by the parties
are the following that the late Remigio Roldan was hired
by the respondent as Ordinary Seamen on board the
M/V ‘Singapura Pertama,’ a vessel of Singapore
Registry; that on September 27, 1973, the deceased
Remigio Roldan met an accident resulting in his death
while on board the said M/V ‘Singapura Pertama’ during
the performance of his duties; that on December 3,
1973, the respondent Virjen Shipping and Marine
Services, Inc. paid to the complainant Natividad Roldan
the amount of P6,000.00 representing Workmen’s
Compensation benefits and donations of the company;
that the amount of P4,870 was spent by the respondent
company as burial expenses of the deceased Remigio
Roldan.
"The only issue therefore remaining to be resolved by
the Board in connection with the particular case, is
whether or not under the existing laws (Philippine and
foreign), the complainant Natividad Roldan is entitled to
additional benefits other than those mentioned earlier.
The Board takes judicial notice, (as a matter of fact, the
respondent having admitted in its memorandum) of the
fact that ‘Singapura Pertama’ is a foreign vessel of
Singapore Registry and it is the policy of this Board that
in case of award of benefits to seamen who were either
injured in the performance of its duties or who died
while in the course of employment is to consider the
benefits allowed by the country where the vessel is
registered. Likewise, the Board takes notice that
Singapore maritime laws relating to workmen’s
compensation benefits are similar to that of the
Hongkong maritime laws which provides that in case of
death, the heirs of the deceased seaman should receive
the equivalent of 36 months wages of the deceased
seaman; in other words, 36 months multiplied by the
basic monthly wages. In the employment contract
submitted with this Board, the terms of which have
never been at issue, is shown that the monthly salary of
the deceased Remigio Roldan at the time of his death
was US$80.00; such that, 36 months multiplied by $80
would come up to US$2,880 and at the rate of P7.00 to
$1.00, the benefits due the claimant would be P20,160.
However, since there was voluntary payment made in
the amount of P6,000 and funeral expenses which
under the Workmen’s Compensation Law had a
maximum of P200.00, the amount of P6,200.00 should
be deducted from P20,160 and the difference would be
P13,960.00.
[G.R. No. 72494. August 11, 1989.]
HONGKONG AND SHANGHAI BANKING CORPORATION,
Petitioner, v. JACK ROBERT SHERMAN, DEODATO
RELOJ AND THE INTERMEDIATE APPELLATE COURT,
Respondents.
Quiason, Makalintal, Barot & Torres for Petitioner.
Alejandro, Aranzaso & Associates for Private
Respondents.
11
"WHEREFORE, the Board orders the respondent Virjen
Shipping and Marine Services, Inc. to pay the
complainant Natividad Roldan the amount of
P13,960.00 within ten (10) days from receipt of this
Decision. The Board also orders the respondent that
payment should be made through the National Seamen
Board."cralaw virtua1aw library
The foregoing decision was assailed as null and void for
allegedly having been rendered without jurisdiction and
for awarding compensation benefits beyond the
maximum allowable and on the ground of res judicata.
This Court in its resolution dated October 27, 1975 and
December 12, 1975, respectively dismissed for lack of
merit the petition as well as the motion for
reconsideration in said G.R. No. L-41297.
Furthermore, Article 20, Labor Code of the Philippines,
provides that the National Seamen Board has original
and exclusive jurisdiction over all matters or cases
including money claims, involving employer-employee
relations, arising out of or by virtue of any law or
contracts involving Filipino seamen for overseas
employment. Thus, it is safe to assume that the Board is
familiar with pertinent Singapore maritime laws relative
to workmen’s compensation. Moreover, the Board may
apply the rule on judicial notice and, "in administrative
proceedings, the technical rules of procedure —
particularly of evidence — applied in judicial trials, do
not strictly apply." (Oromeca Lumber Co. Inc. v. Social
Security Commission, 4 SCRA 1188).
Finally, Article IV of the Labor Code provides that "all
doubts in the implementation and interpretation of the
provisions of this code, including its implementing rules
and regulations, shall be resolved in favor of
labor.chanrobles virtual lawlibrary
For lack of merit, this petition is DENIED.
SO ORDERED.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; VENUE; STIPULATIONS AS
TO VENUE BETWEEN PARTIES DOES NOT PRECLUDE
FILING OF SUITS IN THE RESIDENCE OF PLAINTIFF OR
DEFENDANT. — A stipulation as to venue does not
preclude the filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, Rules of Court, in
the absence of qualifying or restrictive word a in the
agreement which would indicate that the place named
is the only venue agreed upon by the parties. (Polytrade
Corporation v. Blanco, G.R. No. L-27033, December 31,
1969 and other cases cited)
2. INTERNATIONAL LAW; JURISDICTION, DEFINED. — In
International Law, jurisdiction is often defined as the
right of a State to exercise authority over persons and
things within its boundaries subject to certain
exceptions.
3. ID.; SOVEREIGNTY; CONCEPT, CONSTRUED. — A State
does not assume jurisdiction over traveling sovereigns,
ambassadors and diplomatic representatives of other
States, and foreign military units stationed in or
marching through State territory with the permission of
the latter’s authorities. This authority, which finds its
source in the concept of sovereignty, is exclusive within
and throughout the domain of the State. A State is
competent to take hold of any judicial matter it sees fit
by making its courts and agencies assume jurisdiction
over all kinds of cases brought before them (J. Salonga,
Private International Law, 1981, pp. 37-38).
4. ID.; JURISDICTION; PRINCIPLE OF FORUM NON
CONVENIENS; APPLICATION OF PRINCIPLE ADDRESSED
TO THE SOUND DISCRETION OF THE COURT. — Whether
a suit should be entertained or dismissed on the basis of
the principle of forum non conveniens depends largely
upon the facts of the particular case and is addressed to
the, sound discretion of the trial court (J. Salonga,
Private International Law, 1981, p. 49).
5. REMEDIAL LAW; ACTIONS; APPEAL, A DEFENDANT
CANNOT PLEAD ANY DEFENSE NOT INTERPOSED IN THE
COURT BELOW. — Lastly, private respondents allege
that neither the petitioner based at Hongkong nor its
Philippine branch is involved in the transaction sued
upon. This is a vain attempt on their part to further
thwart the proceedings below inasmuch as well-known
is the rule that a defendant cannot plead any defense
that has not been interposed in the court below.
DECISION
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision
of the Intermediate Appellate Court (now Court of
12
Appeals) dated August 2, 1985, which reversed the
order of the Regional Trial Court dated February 28,
1985 denying the Motion to Dismiss filed by private
respondents Jack Robert Sherman and Deodato
Reloj.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
A complaint for collection of a sum of money (pp. 49-52,
Rollo) was filed by petitioner Hongkong and Shanghai
Banking Corporation (hereinafter referred to as
petitioner BANK) against private respondents Jack
Robert Sherman and Deodato Reloj, docketed as Civil
Case No. Q-42850 before the Regional Trial Court of
Quezon City, Branch 84.
It appears that sometime in 1981, Eastern Book Supply
Service PTE, Ltd. (hereinafter referred to as COMPANY),
a company incorporated in Singapore applied with, and
was granted by, the’ Singapore branch of petitioner
BANK an overdraft facility in the maximum amount of
Singapore dollars 200,000.00 (which amount was
subsequently increased to Singapore dollar 375,000.00)
with interest at 3% over petitioner BANK’s prime rate,
payable monthly, on amounts due under said overdraft
facility; as a security for the repayment by the
COMPANY of sum advanced by petitioner BANK to it
through the aforesaid overdraft facility, on October 7,
1982, both private respondents and a certain Robin de
Clive Lowe, all of whom were directors of the COMPANY
at such time, executed a Joint and Several Guarantee (p.
53, Rollo) in favor of petitioner BANK whereby private
respondents and Lowe agreed to pay, jointly and
severally, on demand all sums owed by the COMPANY
to petitioner BANK under the a forestated overdraft
facility.
The Joint and Several Guarantee provides, inter alia,
that:jgc:chanrobles.com.ph
"This guarantee and all rights, obligations and liabilities
arising hereunder shall be construed and determined
under and may be enforced in accordance with the laws
of the Republic of Singapore. We hereby agree that the
Courts of Singapore shall have jurisdiction overall
disputes arising under this guarantee . . ." (p. 33-A,
Rollo).
The COMPANY failed to pay its obligation. Thus,
petitioner BANK demanded payment of the obligation
from private respondents, conformably with the
provisions of the Joint and Several Guarantee. Inasmuch
as the private respondents still failed to pay, petitioner
BANK filed the abovementioned complaint.

On December 14, 1984, private respondents filed a
motion to dismiss (pp. 54-56, Rollo) which was opposed
by petitioner BANK (pp. 58-62, Rollo). Acting on the
motion, the trial court issued an order dated February
28, 1985 (pp. 6465, Rollo), which read as
follows:jgc:chanrobles.com.ph
"In a Motion to Dismiss filed on December 14, 1984, the
defendants seek the dismissal of the complaint on two
grounds, namely:jgc:chanrobles.com.ph
"1. That the court has no jurisdiction over the subject
matter of the complaint; and
"2. That the court has no jurisdiction over the persons
of the defendants.
"In the light of the Opposition thereto filed by plaintiff,
the Court finds no merit in the motion.
"On the first ground, defendants claim that by virtue of
the provision in the Guarantee (the actionable
document) which reads —
"This guarantee and all rights, obligations and liabilities
arising hereunder shall be construed and determined
under and may be enforced in accordance with the laws
of the Republic of Singapore. We hereby agree that the
courts in Singapore shall have jurisdiction over all
disputes arising under this guarantee,’
the Court has no jurisdiction over the subject matter of
the case. The Court finds and concludes otherwise.
There is nothing in the Guarantee which says that the
courts of Singapore shall have jurisdiction to the
exclusion of the courts of other countries or nations.
Also, it has long been established in law and
jurisprudence that jurisdiction of courts is fixed by law;
it cannot be conferred by the will, submission or
consent of the parties.
"On the second ground, it is asserted that defendant
Robert Sherman is not a citizen nor a resident of the
Philippines. This argument holds no water. Jurisdiction
over the persons of defendants is acquired by service of
summons and copy of the complaint on them. There
has been a valid service of summons on both
defendants and in fact the same is admitted when said
defendants filed a ‘Motion for Extension of Time to File
Responsive Pleading’ on December 5, 1984.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph
13
"WHEREFORE, the Motion to Dismiss is hereby DENIED.
"SO ORDERED."cralaw virtua1aw library
A motion for reconsideration of the said order was filed
by private respondents which was, however, denied (p.
66, Rollo). Private respondents then filed before the
respondent Intermediate Appellate Court (now Court of
Appeals) a petition for prohibition with preliminary
injunction and/or prayer for a restraining order (pp. 39-
48, Rollo). On August 2, 1985, the respondent Court
rendered a decision (p. 37, Rollo), the dispositive
portion of which reads:jgc:chanrobles.com.ph
"WHEREFORE, the petition for prohibition with
preliminary injunction is hereby GRANTED. The
respondent Court is enjoined a taking from further
cognizance of the case and to dismiss the same for filing
with the proper court of Singapore which is the proper
forum. No costs.
SO ORDERED."cralaw virtua1aw library
The motion for reconsideration was denied (p. 38,
Rollo),hence, the present petition.
The main issue is whether or not Philippine courts have
jurisdiction over the suit.
The controversy stems from the interpretation of a
provision in the Joint and Several Guarantee, to
wit:jgc:chanrobles.com.ph
"(14) This guarantee and all rights, obligations and
liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance
with the laws of the Republic of Singapore. We hereby
agree that the Courts in Singapore shall have
jurisdiction over all disputes arising under this
guarantee . . ." (p. 53-A, Rollo)
In rendering the decision in favor of private
respondents, the Court of Appeals made the following
observations (pp. 35-36, Rollo):jgc:chanrobles.com.ph
"There are significant aspects of the case to which our
attention is invited. The loan was obtained by Eastern
Book Service PTE, Ltd., a company, incorporated in
Singapore. The loan was granted by the Singapore
Branch of Hongkong and Shanghai Banking Corporation.
The Joint and Several Guarantee was also concluded in
Singapore. The loan was in Singaporean dollars and the
repayment thereof also is the same currency. The
transaction, to say the least, took place in Singaporean
setting in which the law of that country is the measure
by which that relationship of the panties will be
governed.
x x x them before a foreign court and in the process incur
"Contrary to the position taken by respondents, the
guarantee agreement commands that any litigation will
be before the courts of Singapore and that the rights
and obligations of the parties shall be constructed and
determined in accordance with the laws of the Republic
of Singapore. A closer examination of paragraph 14 of
the Guarantee Agreement upon which the motion to
dismiss is based, employs in clear and unmistakable (sic)
terms the word ‘shall’ which under statutory
construction is mandatory.
"Thus, it was ruled that:chanrob1es virtual 1aw library
‘. . . the word ‘shall’ is imperative, operating to impose a
duty which may be enforced’ (Dizon v. Encarnacion, 9
SCRA 714).
"There is nothing more imperative and restrictive than
what the agreement categorically commands that ‘all
rights, obligations, and liabilities arising hereunder shall
be construed and determined under and may be
enforced in accordance with the laws of the Republic of
Singapore."cralaw virtua1aw library
While it is true that "the transaction took place in
Singaporean setting" and that the Joint and Several
Guarantee contains a choice-of-forum clause, the very
essence of due process dictates that the stipulation
that" [t]his guarantee and all rights, obligations and
liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance
with the laws of the Republic of Singapore. We hereby
agree that the Courts in Singapore shall have
jurisdiction over all disputes arising under this
guarantee" be liberally construed. One basic principle
underlies all rules of jurisdiction in International Law: a
State does not have jurisdiction in the absence of some
reasonable basis for exercising it, whether the
proceedings are in rem, quasi in rem or in personam. To
be reasonable, the jurisdiction must be based on some
minimum contacts that will not offend traditional
notions of fair play and substantial justice (J. Salonga,
Private International Law, 1981, p. 46). Indeed, as
pointed-out by petitioner BANK at the outset, the
instant case presents a very odd situation. In the
14
ordinary habits of life, anyone would be disinclined to
litigate before a foreign tribunal, with more reason as a
defendant. However, in this case, private respondents
are Philippine residents (a fact which was not disputed
by them) who would rather face a complaint against
considerable expenses, not to mention inconvenience,
than to have a Philippine court try and resolve the case.
Private respondents’ stance is hardly comprehensible,
unless their ultimate intent is to evade, or at least delay,
the payment of a just obligation.chanrobles law library
The defense of private respondents that the complaint
should have been filed in Singapore is based merely on
technicality. They did not even claim, much less prove,
that the filing of the action here will cause them any
unnecessary trouble, damage, or expense. On the other
hand, there is no showing that petitioner BANK filed the
action here just to harass private respondents.
In the case of Polytrade Corporation v. Blanco, G.R. No.
L-27033, October 31, 1969, 30 SCRA 187, it was
ruled:jgc:chanrobles.com.ph
". . . An accurate reading, however, of the stipulation,
"The parties agree to sue and be sued in the Courts of
Manila,’ does not preclude the filing of suits in the
residence of plaintiff or defendant. The plain meaning is
that the parties merely consented to be sued in Manila.
Qualifying or restrictive words which would indicate
that Manila and Manila alone is the venue are totally
absent therefrom. We cannot read into that clause that
plaintiff and defendant bound themselves to file suits
with respect to the last two transactions in question
only or exclusively in Manila. For, that agreement did
not change or transfer venue. It simply is permissive.
The parties solely agreed to add the courts of Manila as
tribunals to which they may resort. They did not waive
their right to pursue remedy in the courts specifically
mentioned in Section 2(b) of Rule 4. Renuntiatio non
praesumitur."cralaw virtua1aw library
This ruling was reiterated in the case of Neville Y. Lamis
Ents., Et. Al. v. Lagamon, etc., Et Al., G.R. No. 57250,
October 30, 1981, 108 SCRA 740, where the stipulation
was" (i)n case of litigation, jurisdiction shall be vested in
the Court of Davao City." We
held:jgc:chanrobles.com.ph
"Anent the claim that Davao City had been stipulated as
the venue, suffice it to say that a stipulation as to venue
does not preclude the filing of suits in the residence of
plaintiff or defendant under Section 2 (b), Rule 4, Rules
of Court, in the absence of qualifying or restrictive word
a in the agreement which would indicate that the place
named is the only venue agreed upon by the
parties."cralaw virtua1aw library
Applying the foregoing to the case at bar, the parties
did not thereby stipulate that only the courts of
Singapore, to the exclusion of all the rest, has
jurisdiction. Neither did the clause in question operate
to divest Philippine courts of jurisdiction, In
International Law, jurisdiction is often defined as the
right of a State to exercise authority over persons and
things within its boundaries subject to certain
exceptions. Thus, a State does not assume jurisdiction
over traveling sovereigns, ambassadors and diplomatic
representatives of other States, and foreign military
units stationed in or marching through State territory
with the permission of the latter’s authorities. This
authority, which finds its source in the concept of
sovereignty, is exclusive within and throughout the
domain of the State. A State is competent to take hold
of any judicial matter it sees fit by making its courts and
agencies assume jurisdiction over all kinds of cases
brought before them (J. Salonga, Private International
Law, 1981, pp. 37-38).
As regards the issue on improper venue, petitioner
BANK avers that the objection to improper venue has
been waived. However, We agree with the ruling of the
respondent Court that:jgc:chanrobles.com.ph
"While in the main, the motion to dismiss fails to
categorically use with exactitude the words ‘improper
venue’ it can be perceived from the general thrust and
context of the motion that what is meant is improper
venue. The use of the word ‘jurisdiction’ was merely an
attempt to copy-cat the same word employed in the
guarantee agreement but conveys the concept of
`venue.’ Brushing aside all technicalities, it would
appear that jurisdiction was used loosely as to be
synonymous with venue. It is in this spirit that this Court
must view the motion to dismiss. . . ." (p. 35, Rollo).
[G.R. No. 136804. February 19, 2003.]
MANUFACTURERS HANOVER TRUST CO. and/or
CHEMICAL BANK, Petitioners, v. RAFAEL MA.
GUERRERO, Respondent.
DECISION
CARPIO, J.:
15
At any rate, this issue is now of no moment because We
hold that venue here was properly laid for the same
reasons discussed above.
The respondent Court likewise ruled that (pp. 36-37,
Rollo):jgc:chanrobles.com.ph
". . .In a convict problem, a court will simply refuse to
entertain the case if it is not authorized by law to
exercise jurisdiction. And even if it is so authorized, it
may still refuse to entertain the case by applying the
principle of forum non conveniens. . . ."cralaw
virtua1aw library
However, whether a suit should be entertained or
dismissed on the basis of the principle of forum non
conveniens depends largely upon the facts of the
particular case and is addressed to the, sound discretion
of the trial court (J. Salonga, Private International Law,
1981, p. 49). Thus, the respondent Court should not
have relied on such principle.
Although the Joint and Several Guarantee prepared by
petitioner BANK is a contract of adhesion and that
consequently, it cannot be permitted to take a stand
contrary to the stipulations of the contract, substantial
bases exist for petitioner BANK’s choice of forum, as
discussed earlier.
Lastly, private respondents allege that neither the
petitioner based at Hongkong nor its Philippine branch
is involved in the transaction sued upon. This is a vain
attempt on their part to further thwart the proceedings
below inasmuch as well-known is the rule that a
defendant cannot plead any defense that has not been
interposed in the court below.
ACCORDINGLY, the decision of the respondent Court is
hereby REVERSED and the decision of the Regional Trial
Court is REINSTATED, with costs against private
respondents. This decision is immediately executory.
SO ORDERED.
The Case
This is a petition for review under Rule 45 of the Rules
of Court to set aside the Court of Appeals 1 Decision of
August 24, 1998 and Resolution of December 14, 1998
in CA-G.R. SP No. 42310 2 affirming the trial court’s
denial of petitioners’ motion for partial summary
judgment.chanrob1es virtua1 1aw 1ibrary
The Antecedents
On May 17, 1994, respondent Rafael Ma. Guerrero
("Guerrero" for brevity) filed a complaint for damages
against petitioner Manufacturers Hanover Trust Co.
and/or Chemical Bank ("the Bank" for brevity) with the
Regional Trial Court of Manila ("RTC" for brevity).
Guerrero sought payment of damages allegedly for (1)
illegally withheld taxes charged against interests on his
checking account with the Bank; (2) a returned check
worth US$18,000.00 due to signature verification
problems; and (3) unauthorized conversion of his
account. Guerrero amended his complaint on April 18,
1995.
On September 1, 1995, the Bank filed its Answer
alleging, inter alia, that by stipulation Guerrero’s
account is governed by New York law and this law does
not permit any of Guerrero’s claims except actual
damages. Subsequently, the Bank filed a Motion for
Partial Summary Judgment seeking the dismissal of
Guerrero’s claims for consequential, nominal,
temperate, moral and exemplary damages as well as
attorney’s fees on the same ground alleged in its
Answer. The Bank contended that the trial should be
limited to the issue of actual damages. Guerrero
opposed the motion.
The affidavit of Alyssa Walden, a New York attorney,
supported the Bank’s Motion for Partial Summary
Judgment. Alyssa Walden’s affidavit ("Walden affidavit"
for brevity) stated that Guerrero’s New York bank
account stipulated that the governing law is New York
law and that this law bars all of Guerrero’s claims
except actual damages. The Philippine Consular Office in
New York authenticated the Walden
affidavit.chanrob1es virtua1 1aw 1ibrary
The RTC denied the Bank’s Motion for Partial Summary
Judgment and its motion for reconsideration on March
6, 1996 and July 17, 1996, respectively. The Bank filed a
petition for certiorari and prohibition with the Court of
Appeals assailing the RTC Orders. In its Decision dated
August 24, 1998, the Court of Appeals dismissed the
petition. On December 14, 1998, the Court of Appeals
denied the Bank’s motion for reconsideration.
Hence, the instant petition.
16
The Ruling of the Court of Appeals
The Court of Appeals sustained the RTC orders denying
the motion for partial summary judgment. The Court of
Appeals ruled that the Walden affidavit does not serve
as proof of the New York law and jurisprudence relied
on by the Bank to support its motion. The Court of
Appeals considered the New York law and jurisprudence
as public documents defined in Section 19, Rule 132 of
the Rules on Evidence, as follows:jgc:chanrobles.com.ph
"SEC. 19. Classes of Documents. — For the purpose of
their presentation in evidence, documents are either
public or private.
Public documents are:chanrob1es virtual 1aw library
(a) The written official acts, or records of the official acts
of the sovereign authority, official bodies and tribunals,
and public officers, whether of the Philippines, or of a
foreign country;
x x x."cralaw virtua1aw library
The Court of Appeals opined that the following
procedure outlined in Section 24, Rule 132 should be
followed in proving foreign law:jgc:chanrobles.com.ph
"SEC. 24. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by
an official publication thereof or by a copy attested by
the officer having the legal custody of the record, or by
his deputy, and accompanied, if the record is not kept in
the Philippines, with a certificate that such officer has
the custody. If the office in which the record is kept is in
a foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and
authenticated by the seal of his office."cralaw virtua1aw
library
The Court of Appeals likewise rejected the Bank’s
argument that Section 2, Rule 34 of the old Rules of
Court allows the Bank to move with the supporting
Walden affidavit for partial summary judgment in its
favor. The Court of Appeals clarified that the Walden
affidavit is not the supporting affidavit referred to in
Section 2, Rule 34 that would prove the lack of genuine
issue between the parties. The Court of Appeals
concluded that even if the Walden affidavit is used for
purposes of summary judgment, the Bank must still
comply with the procedure prescribed by the Rules to
prove the foreign law.chanrob1es virtua1 1aw 1ibrary
The Issues
The Bank contends that the Court of Appeals committed
reversible error in —
". . . HOLDING THAT [THE BANK’S] PROOF OF FACTS TO
SUPPORT ITS MOTION FOR SUMMARY JUDGMENT MAY
NOT BE GIVEN BY AFFIDAVIT;
. . . HOLDING THAT [THE BANK’S] AFFIDAVIT, WHICH
PROVES FOREIGN LAW AS A FACT, IS "HEARSAY" AND
THEREBY ‘CANNOT SERVE AS PROOF OF THE NEW YORK
LAW RELIED UPON BY PETITIONERS IN THEIR MOTION
FOR SUMMARY JUDGMENT . . .’." 3
First, the Bank argues that in moving for partial
summary judgment, it was entitled to use the Walden
affidavit to prove that the stipulated foreign law bars
the claims for consequential, moral, temperate, nominal
and exemplary damages and attorney’s fees.
Consequently, outright dismissal by summary judgment
of these claims is warranted.
Second, the Bank claims that the Court of Appeals
mixed up the requirements of Rule 35 on summary
judgments and those of a trial on the merits in
considering the Walden affidavit as "hearsay." The Bank
points out that the Walden affidavit is not hearsay since
Rule 35 expressly permits the use of affidavits.
Lastly, the Bank argues that since Guerrero did not
submit any opposing affidavit to refute the facts
contained in the Walden affidavit, he failed to show the
need for a trial on his claims for damages other than
actual.
The Court’s Ruling
The petition is devoid of merit.
The Bank filed its motion for partial summary judgment
pursuant to Section 2, Rule 34 of the old Rules of Court
which reads:jgc:chanrobles.com.ph
"Section 2. Summary judgment for defending party. — A
party against whom a claim, counterclaim, or cross-
claim is asserted or a declaratory relief is sought may, at
17
any time, move with supporting affidavits for a
summary judgment in his favor as to all or any part
thereof."cralaw virtua1aw library
A court may grant a summary judgment to settle
expeditiously a case if, on motion of either party, there
appears from the pleadings, depositions, admissions,
and affidavits that no important issues of fact are
involved, except the amount of damages. In such event,
the moving party is entitled to a judgment as a matter
of law. 4
In a motion for summary judgment, the crucial question
is: are the issues raised in the pleadings genuine, sham
or fictitious, as shown by affidavits, depositions or
admissions accompanying the motion? 5
A genuine issue means an issue of fact which calls for
the presentation of evidence as distinguished from an
issue which is fictitious or contrived so as not to
constitute a genuine issue for trial. 6
A perusal of the parties’ respective pleadings would
show that there are genuine issues of fact that
necessitate formal trial. Guerrero’s complaint before
the RTC contains a statement of the ultimate facts on
which he relies for his claim for damages. He is seeking
damages for what he asserts as "illegally withheld taxes
charged against interests on his checking account with
the Bank, a returned check worth US$18,000.00 due to
signature verification problems, and unauthorized
conversion of his account." In its Answer, the Bank set
up its defense that the agreed foreign law to govern
their contractual relation bars the recovery of damages
other than actual. Apparently, facts are asserted in
Guerrero’s complaint while specific denials and
affirmative defenses are set out in the Bank’s
answer.chanrob1es virtua1 1aw 1ibrary
True, the court can determine whether there are
genuine issues in a case based merely on the affidavits
or counter-affidavits submitted by the parties to the
court. However, as correctly ruled by the Court of
Appeals, the Bank’s motion for partial summary
judgment as supported by the Walden affidavit does
not demonstrate that Guerrero’s claims are sham,
fictitious or contrived. On the contrary, the Walden
affidavit shows that the facts and material allegations as
pleaded by the parties are disputed and there are
substantial triable issues necessitating a formal trial.
There can be no summary judgment where questions of
fact are in issue or where material allegations of the
pleadings are in dispute. 7 The resolution of whether a
foreign law allows only the recovery of actual damages
is a question of fact as far as the trial court is concerned
since foreign laws do not prove themselves in our
courts. 8 Foreign laws are not a matter of judicial notice.
9 Like any other fact, they must be alleged and proven.
Certainly, the conflicting allegations as to whether New
York law or Philippine law applies to Guerrero’s claims
present a clear dispute on material allegations which
can be resolved only by a trial on the merits.
Under Section 24 of Rule 132, the record of public
documents of a sovereign authority or tribunal may be
proved by (1) an official publication thereof or (2) a copy
attested by the officer having the legal custody thereof.
Such official publication or copy must be accompanied,
if the record is not kept in the Philippines, with a
certificate that the attesting officer has the legal
custody thereof. The certificate may be issued by any of
the authorized Philippine embassy or consular officials
stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office. The
attestation must state, in substance, that the copy is a
correct copy of the original, or a specific part thereof, as
the case may be, and must be under the official seal of
the attesting officer.
Certain exceptions to this rule were recognized in
Asiavest Limited v. Court of Appeals 10 which held
that:jgc:chanrobles.com.ph
"x x x:chanrob1es virtual 1aw library
Although it is desirable that foreign law be proved in
accordance with the above rule, however, the Supreme
Court held in the case of Willamette Iron and Steel
Works v. Muzzal, that Section 41, Rule 123 (Section 25,
Rule 132 of the Revised Rules of Court) does not
exclude the presentation of other competent evidence
to prove the existence of a foreign law. In that case, the
Supreme Court considered the testimony under oath of
an attorney-at-law of San Francisco, California, who
quoted verbatim a section of California Civil Code and
who stated that the same was in force at the time the
obligations were contracted, as sufficient evidence to
establish the existence of said law. Accordingly, in line
with this view, the Supreme Court in the Collector of
Internal Revenue v. Fisher Et. Al., upheld the Tax Court
in considering the pertinent law of California as proved
by the respondents’ witness. In that case, the counsel
for respondent "testified that as an active member of
the California Bar since 1951, he is familiar with the
revenue and taxation laws of the State of California.
18
When asked by the lower court to state the pertinent
California law as regards exemption of intangible
personal properties, the witness cited Article 4, Sec.
13851 (a) & (b) of the California Internal and Revenue
Code as published in Derring’s California Code, a
publication of Bancroft-Whitney Co., Inc. And as part of
his testimony, a full quotation of the cited section was
offered in evidence by respondents." Likewise, in
several naturalization cases, it was held by the Court
that evidence of the law of a foreign country on
reciprocity regarding the acquisition of citizenship,
although not meeting the prescribed rule of practice,
may be allowed and used as basis for favorable action,
if, in the light of all the circumstances, the Court is
"satisfied of the authenticity of the written proof
offered." Thus, in a number of decisions, mere
authentication of the Chinese Naturalization Law by the
Chinese Consulate General of Manila was held to be
competent proof of that law." (Emphasis
supplied)chanrob1es virtua1 1aw 1ibrary
The Bank, however, cannot rely on Willamete Iron and
Steel Works v. Muzzal or Collector of Internal Revenue
v. Fisher to support its cause. These cases involved
attorneys testifying in open court during the trial in the
Philippines and quoting the particular foreign laws
sought to be established. On the other hand, the
Walden affidavit was taken abroad ex parte and the
affiant never testified in open court. The Walden
affidavit cannot be considered as proof of New York law
on damages not only because it is self-serving but also
because it does not state the specific New York law on
damages. We reproduce portions of the Walden
affidavit as follows:jgc:chanrobles.com.ph
"3. In New York," [n]ominal damages are damages in
name only, trivial sums such as six cents or $1. Such
damages are awarded both in tort and contract cases
when the plaintiff establishes a cause of action against
the defendant, but is unable to prove" actual damages.
Dobbs, Law of Remedies, § 3.32 at 294 (1993). Since
Guerrero is claiming for actual damages, he cannot ask
for nominal damages.
4. There is no concept of temperate damages in New
York law. I have reviewed Dobbs, a well-respected
treatise, which does not use the phrase "temperate
damages" in its index. I have also done a computerized
search for the phrase in all published New York cases,
and have found no cases that use it. I have never heard
the phrase used in American law.
5. The Uniform Commercial Code ("UCC") governs many
aspects of a Bank’s relationship with its depositors. In
this case, it governs Guerrero’s claim arising out of the
non-payment of the $18,000 check. Guerrero claims
that this was a wrongful dishonor. However, the UCC
states that "justifiable refusal to pay or accept" as
opposed to dishonor, occurs when a bank refuses to pay
a check for reasons such as a missing indorsement, a
missing or illegible signature or a forgery, § 3-510,
Official Comment 2. . . . to the Complaint, MHT returned
the check because it had no signature card on . . . and
could not verify Guerrero’s signature. In my opinion,
consistent with the UCC, that is a legitimate and
justifiable reason not to pay.
6. Consequential damages are not available in the
ordinary case of a justifiable refusal to pay. UCC 1-106
provides that "neither consequential or special or
punitive damages may be had except as specifically
provided in the Act or by other rule of law." UCC 4-103
further provides that consequential damages can be
recovered only where there is bad faith. This is more
restrictive than the New York common law, which may
allow consequential damages in a breach of contract
case (as does the UCC where there is a wrongful
dishonor).
7. Under New York law, requests for lost profits,
damage to reputation and mental distress are
considered consequential damages. Kenford Co., Inc. v.
Country of Erie, 73 N.Y.2d 312, 319, 540 N.Y.S.2d 1, 4-5
(1989) (lost profits); Motif Construction Corp. v. Buffalo
Savings Bank, 50 A.D.2d 718, 374 N.Y.S..2d 868, 869-70
(4th Dep’t 1975) damage to reputation); Dobbs, Law of
Remedies §12.4(1) at 63 (emotional distress).
8. As a matter of New York law, a claim for emotional
distress cannot be recovered for a breach of contract.
Geler v. National Westminster Bank U.S.A., 770 F. Supp.
210, 215 (S.D.N.Y. 1991); Pitcherello v. Moray Homes,
Ltd., 150 A.D.2d 860, 540 N.Y.S.2d 387, 390 (3d Dep’t
1989) Martin v. Donald Park Acres, 54 A.D.2d 975, 389
N.Y.S..2d 31, 32 (2nd Dep’t 1976). Damage to reputation
is also not recoverable for a contract. Motif
Construction Corp. v. Buffalo Savings Bank, 374 N.Y.S.2d
at 869-70.
9. In cases where the issue is the breach of a contract to
purchase stock, New York courts will not take into
consideration the performance of the stock after the
breach. Rather, damages will be based on the value of
the stock at the time of the breach, Aroneck v. Atkin, 90
A.D.2d 966, 456 N.Y.S.2d 558, 559 (4th Dep’t 1982),
19
app. den. 59 N.Y.2d 601, 449 N.E.2d 1276, 463 N.Y.S.2d
1023 (1983).chanrob1es virtua1 1aw 1ibrary
10. Under New York law, a party can only get
consequential damages if they were the type that
would naturally arise from the breach and if they were
"brought within the contemplation of parties as the
probable result of the breach at the time of or prior to
contracting." Kenford Co., Inc. v. Country of Erie, 73
N.Y.2d 312, 319, 540 N.Y.S.2d 1, 3 (1989), (quoting
Chapman v. Fargo, 223 N.Y. 32, 36 (1918).
11. Under New York law, a plaintiff is not entitled to
attorneys’ fees unless they are provided by contract or
statute. E.g., Geler v. National Westminster Bank, 770 F.
Supp. 210, 213 (S.D.N.Y. 1991); Camatron Sewing Mach,
Inc. v. F.M. Ring Assocs., Inc., 179 A.D.2d 165, 582
N.Y.S.2d 396 (1st Dep’t 1992); Stanisic v. Soho
Landmark Assocs., 73 A.D.2d 268, 577 N.Y.S.2d 280, 281
(1st Dep’t 1991). There is no statute that permits
attorney’s fees in a case of this type.
12. Exemplary, or punitive damages are not allowed for
a breach of contract, even where the plaintiff claims the
defendant acted with malice. Geler v. National
Westminster Bank, 770 F. Supp. 210, 215 (S.D.N.Y.
1991); Catalogue Service of . . . chester 11 v. Insurance
Co. of North America, 74 A.D.2d 837, 838, 425 N.Y.S.2d
635, 637 (2d Dep’t 1980); Senior v. Manufacturers
Hanover Trust Co., 110 A.D.2d 833, 488 N.Y.S.2d 241,
242 (2d Dep’t 1985).
13. Exemplary or punitive damages may be recovered
only where it is alleged and proven that the wrong
supposedly committed by defendant amounts to a fraud
aimed at the public generally and involves a high moral
culpability. Walker v. Sheldon, 10 N.Y.2d 401, 179
N.E.2d 497, 223 N.Y.S.2d 488 (1961).
14. Furthermore, it has been consistently held under
New York law that exemplary damages are not available
for a mere breach of contract for in such a case, as a
matter of law, only a private wrong and not a public
right is involved. Thaler v. The North Insurance
Company, 63 A.D.2d 921, 406 N.Y.S.2d 66 (1st Dep’t
1978)." 12
The Walden affidavit states conclusions from the
affiant’s personal interpretation and opinion of the facts
of the case vis a vis the alleged laws and jurisprudence
without citing any law in particular. The citations in the
Walden affidavit of various U.S. court decisions do not
constitute proof of the official records or decisions of
the U.S. courts. While the Bank attached copies of some
of the U.S. court decisions cited in the Walden affidavit,
these copies do not comply with Section 24 of Rule 132
on proof of official records or decisions of foreign
courts.
The Bank’s intention in presenting the Walden affidavit
is to prove New York law and jurisprudence. However,
because of the failure to comply with Section 24 of Rule
132 on how to prove a foreign law and decisions of
foreign courts, the Walden affidavit did not prove the
current state of New York law and jurisprudence. Thus,
the Bank has only alleged, but has not proved, what
New York law and jurisprudence are on the matters at
issue.
Next, the Bank makes much of Guerrero’s failure to
submit an opposing affidavit to the Walden affidavit.
However, the pertinent provision of Section 3, Rule 35
of the old Rules of Court did not make the submission of
an opposing affidavit mandatory,
thus:jgc:chanrobles.com.ph
"SEC. 3. Motion and proceedings thereon. — The
motion shall be served at least ten (10) days before the
time specified for the hearing. The adverse party prior
to the day of hearing may serve opposing affidavits.
After the hearing, the judgment sought shall be
rendered forthwith if the pleadings, depositions and
admissions on file, together with the affidavits, show
that, except as to the amount of damages, there is no
genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law." (Emphasis supplied)
It is axiomatic that the term "may" as used in remedial
law, is only permissive and not mandatory. 13
Guerrero cannot be said to have admitted the
averments in the Bank’s motion for partial summary
judgment and the Walden affidavit just because he
failed to file an opposing affidavit. Guerrero opposed
the motion for partial summary judgment, although he
did not present an opposing affidavit. Guerrero may not
G.R. No. 178551 October 11, 2010
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and
MINISTRY OF PUBLIC HEALTH-KUWAIT Petitioners,
vs.
MA. JOSEFA ECHIN, Respondent.
DECISION
20
have presented an opposing affidavit, as there was no
need for one, because the Walden affidavit did not
establish what the Bank intended to prove. Certainly,
Guerrero did not admit, expressly or impliedly, the
veracity of the statements in the Walden affidavit. The
Bank still had the burden of proving New York law and
jurisprudence even if Guerrero did not present an
opposing affidavit. As the party moving for summary
judgment, the Bank has the burden of clearly
demonstrating the absence of any genuine issue of fact
and that any doubt as to the existence of such issue is
resolved against the movant. 14
Moreover, it would have been redundant and pointless
for Guerrero to submit an opposing affidavit considering
that what the Bank seeks to be opposed is the very
subject matter of the complaint. Guerrero need not file
an opposing affidavit to the Walden affidavit because
his complaint itself controverts the matters set forth in
the Bank’s motion and the Walden affidavit. A party
should not be made to deny matters already averred in
his complaint.
There being substantial triable issues between the
parties, the courts a quo correctly denied the Bank’s
motion for partial summary judgment. There is a need
to determine by presentation of evidence in a regular
trial if the Bank is guilty of any wrongdoing and if it is
liable for damages under the applicable
laws.chanrob1es virtua1 1aw 1ibrary
This case has been delayed long enough by the Bank’s
resort to a motion for partial summary judgment.
Ironically, the Bank has successfully defeated the very
purpose for which summary judgments were devised in
our rules, which is, to aid parties in avoiding the
expense and loss of time involved in a trial.
WHEREFORE, the petition is DENIED for lack of merit.
The Decision dated August 24, 1998 and the Resolution
dated December 14, 1998 of the Court of Appeals in CA-
G.R. SP No. 42310 is AFFIRMED.
SO ORDERED.
CARPIO MORALES, J.:
Josefina Echin (respondent) was hired by petitioner
ATCI Overseas Corporation in behalf of its principal-co-
petitioner, the Ministry of Public Health of Kuwait (the
Ministry), for the position of medical technologist under
a two-year contract, denominated as a Memorandum of
Agreement (MOA), with a monthly salary of
US$1,200.00.

Under the MOA,1 all newly-hired employees undergo a
probationary period of one (1) year and are covered by
Kuwait’s Civil Service Board Employment Contract No. 2.
Respondent was deployed on February 17, 2000 but
was terminated from employment on February 11,
2001, she not having allegedly passed the probationary
period.
As the Ministry denied respondent’s request for
reconsideration, she returned to the Philippines on
March 17, 2001, shouldering her own air fare.
On July 27, 2001, respondent filed with the National
Labor Relations Commission (NLRC) a complaint2 for
illegal dismissal against petitioner ATCI as the local
recruitment agency, represented by petitioner, Amalia
Ikdal (Ikdal), and the Ministry, as the foreign principal.
By Decision3 of November 29, 2002, the Labor Arbiter,
finding that petitioners neither showed that there was
just cause to warrant respondent’s dismissal nor that
she failed to qualify as a regular employee, held that
respondent was illegally dismissed and accordingly
ordered petitioners to pay her US$3,600.00,
representing her salary for the three months unexpired
portion of her contract.
On appeal of petitioners ATCI and Ikdal, the NLRC
affirmed the Labor Arbiter’s decision by Resolution4 of
January 26, 2004. Petitioners’ motion for
reconsideration having been denied by Resolution5 of
April 22, 2004, they appealed to the Court of Appeals,
contending that their principal, the Ministry, being a
foreign government agency, is immune from suit and, as
such, the immunity extended to them; and that
respondent was validly dismissed for her failure to meet
the performance rating within the one-year period as
required under Kuwait’s Civil Service Laws. Petitioners
further contended that Ikdal should not be liable as an
officer of petitioner ATCI.
By Decision6 of March 30, 2007, the appellate court
affirmed the NLRC Resolution.
In brushing aside petitioners’ contention that they only
acted as agent of the Ministry and that they cannot be
held jointly and solidarily liable with it, the appellate
court noted that under the law, a private employment
agency shall assume all responsibilities for the
implementation of the contract of employment of an
overseas worker, hence, it can be sued jointly and
21
severally with the foreign principal for any violation of
the recruitment agreement or contract of employment.
As to Ikdal’s liability, the appellate court held that under
Sec. 10 of Republic Act No. 8042, the "Migrant and
Overseas Filipinos’ Act of 1995," corporate officers,
directors and partners of a recruitment agency may
themselves be jointly and solidarily liable with the
recruitment agency for money claims and damages
awarded to overseas workers.
Petitioners’ motion for reconsideration having been
denied by the appellate court by Resolution7 of June 27,
2007, the present petition for review on certiorari was
filed.
Petitioners maintain that they should not be held liable
because respondent’s employment contract specifically
stipulates that her employment shall be governed by
the Civil Service Law and Regulations of Kuwait. They
thus conclude that it was patent error for the labor
tribunals and the appellate court to apply the Labor
Code provisions governing probationary employment in
deciding the present case.
Further, petitioners argue that even the Philippine
Overseas Employment Act (POEA) Rules relative to
master employment contracts (Part III, Sec. 2 of the
POEA Rules and Regulations) accord respect to the
"customs, practices, company policies and labor laws
and legislation of the host country."
Finally, petitioners posit that assuming arguendo that
Philippine labor laws are applicable, given that the
foreign principal is a government agency which is
immune from suit, as in fact it did not sign any
document agreeing to be held jointly and solidarily
liable, petitioner ATCI cannot likewise be held liable,
more so since the Ministry’s liability had not been
judicially determined as jurisdiction was not acquired
over it.
The petition fails.
Petitioner ATCI, as a private recruitment agency, cannot
evade responsibility for the money claims of Overseas
Filipino workers (OFWs) which it deploys abroad by the
mere expediency of claiming that its foreign principal is
a government agency clothed with immunity from suit,
or that such foreign principal’s liability must first be
established before it, as agent, can be held jointly and
solidarily liable.
In providing for the joint and solidary liability of private
recruitment agencies with their foreign principals,
Republic Act No. 8042 precisely affords the OFWs with a
recourse and assures them of immediate and sufficient
payment of what is due them. Skippers United Pacific v.
Maguad8 explains:
. . . [T]he obligations covenanted in the recruitment
agreement entered into by and between the local agent
and its foreign principal are not coterminous with the
term of such agreement so that if either or both of the
parties decide to end the agreement, the
responsibilities of such parties towards the contracted
employees under the agreement do not at all end, but
the same extends up to and until the expiration of the
employment contracts of the employees recruited and
employed pursuant to the said recruitment agreement.
Otherwise, this will render nugatory the very purpose
for which the law governing the employment of workers
for foreign jobs abroad was enacted. (emphasis
supplied)
The imposition of joint and solidary liability is in line
with the policy of the state to protect and alleviate the
plight of the working class.9 Verily, to allow petitioners
to simply invoke the immunity from suit of its foreign
principal or to wait for the judicial determination of the
foreign principal’s liability before petitioner can be held
liable renders the law on joint and solidary liability
inutile.
As to petitioners’ contentions that Philippine labor laws
on probationary employment are not applicable since it
was expressly provided in respondent’s employment
contract, which she voluntarily entered into, that the
terms of her engagement shall be governed by
prevailing Kuwaiti Civil Service Laws and Regulations as
in fact POEA Rules accord respect to such rules, customs
and practices of the host country, the same was not
substantiated.
Indeed, a contract freely entered into is considered the
law between the parties who can establish stipulations,
clauses, terms and conditions as they may deem
convenient, including the laws which they wish to
govern their respective obligations, as long as they are
not contrary to law, morals, good customs, public order
or public policy.
It is hornbook principle, however, that the party
invoking the application of a foreign law has the burden
of proving the law, under the doctrine of processual
presumption which, in this case, petitioners failed to
22
discharge. The Court’s ruling in EDI-Staffbuilders Int’l., v.
NLRC10 illuminates:
In the present case, the employment contract signed by
Gran specifically states that Saudi Labor Laws will
govern matters not provided for in the contract (e.g.
specific causes for termination, termination procedures,
etc.). Being the law intended by the parties (lex loci
intentiones) to apply to the contract, Saudi Labor Laws
should govern all matters relating to the termination of
the employment of Gran.
In international law, the party who wants to have a
foreign law applied to a dispute or case has the burden
of proving the foreign law. The foreign law is treated as
a question of fact to be properly pleaded and proved as
the judge or labor arbiter cannot take judicial notice of
a foreign law. He is presumed to know only domestic or
forum law.
Unfortunately for petitioner, it did not prove the
pertinent Saudi laws on the matter; thus, the
International Law doctrine of presumed-identity
approach or processual presumption comes into play.
Where a foreign law is not pleaded or, even if pleaded,
is not proved, the presumption is that foreign law is the
same as ours. Thus, we apply Philippine labor laws in
determining the issues presented before us. (emphasis
and underscoring supplied)
The Philippines does not take judicial notice of foreign
laws, hence, they must not only be alleged; they must
be proven. To prove a foreign law, the party invoking it
must present a copy thereof and comply with Sections
24 and 25 of Rule 132 of the Revised Rules of Court
which reads:
SEC. 24. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by
an official publication thereof or by a copy attested by
the officer having the legal custody of the record, or by
his deputy, and accompanied, if the record is not kept in
the Philippines, with a certificate that such officer has
the custody. If the office in which the record is kept is in
a foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and
authenticated by the seal of his office. (emphasis
supplied)
SEC. 25. What attestation of copy must state. —
Whenever a copy of a document or record is attested
for the purpose of the evidence, the attestation must
state, in substance, that the copy is a correct copy of
the original, or a specific part thereof, as the case may
be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a
court having a seal, under the seal of such court.
To prove the Kuwaiti law, petitioners submitted the
following: MOA between respondent and the Ministry,
as represented by ATCI, which provides that the
employee is subject to a probationary period of one (1)
year and that the host country’s Civil Service Laws and
Regulations apply; a translated copy11 (Arabic to
English) of the termination letter to respondent stating
that she did not pass the probation terms, without
specifying the grounds therefor, and a translated copy
of the certificate of termination,12 both of which
documents were certified by Mr. Mustapha Alawi, Head
of the Department of Foreign Affairs-Office of Consular
Affairs Inslamic Certification and Translation Unit; and
respondent’s letter13 of reconsideration to the
Ministry, wherein she noted that in her first eight (8)
months of employment, she was given a rating of
"Excellent" albeit it changed due to changes in her shift
of work schedule.
These documents, whether taken singly or as a whole,
do not sufficiently prove that respondent was validly
terminated as a probationary employee under Kuwaiti
civil service laws. Instead of submitting a copy of the
pertinent Kuwaiti labor laws duly authenticated and
translated by Embassy officials thereat, as required
under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the
translations of the MOA and the termination letter
which does not prove at all that Kuwaiti civil service
laws differ from Philippine laws and that under such
Kuwaiti laws, respondent was validly terminated. Thus
the subject certifications read:
xxxx
This is to certify that the herein attached translation/s
from Arabic to English/Tagalog and or vice versa
was/were presented to this Office for review and
certification and the same was/were found to be in
order. This Office, however, assumes no responsibility
as to the contents of the document/s.
23
This certification is being issued upon request of the
interested party for whatever legal purpose it may
serve. (emphasis supplied)1avvphi1
Respecting Ikdal’s joint and solidary liability as a
corporate officer, the same is in order too following the
express provision of R.A. 8042 on money claims, viz:
SEC. 10. Money Claims.—Notwithstanding any provision
of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have
the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing
of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment including claims for actual moral,
exemplary and other forms of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims
under this section shall be joint and several. This
provision shall be incorporated in the contract for
overseas employment and shall be a condition
precedent for its approval. The performance bond to be
filed by the recruitment/placement agency, as provided
by law, shall be answerable for all money claims or
damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the
case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the
aforesaid claims and damages. (emphasis and
underscoring supplied)
WHEREFORE, the petition is DENIED. SO ORDERED.