Pantorilla, Erin Alexandria C.

ETHICS 11428
BSA 2-A 2:30 – 4:00 PM

Read the ff. cases involving consequences of illegal dismissal. Summarize the significant antecedents to
the following cases and explain the basis of the decision of the Court.

1. Full Backwages
BANI RURAL BANK INC. V. DE GUZMAN (G.R. NO. 170904)

Antecedents:
One of the crucial precedents in this case is the loan agreement between Bani Rural Bank and
respondent De Guzman for the sum of Php 1,000,000. The debt was secured by a property mortgage
over a plot of land owned by De Guzman, among other things. De Guzman, however, failed to make
the required loan payments, which prompted the bank to file a complaint in order to foreclose on the
mortgage.

Decision of the Court and its basis:

 In this case, the Supreme Court disagreed with the Court of Appeals' ruling and supported
Bani Rural Bank Inc. The bank had complied with all legal requirements for extrajudicial
foreclosure, according to the court, including posting notices and publishing the notice of sale.
 The court also noted that the respondent De Guzman had not offered any evidence that the
bank had broken any laws. The Court's decision to foreclose on the mortgage and sell the
property met De Guzman's outstanding loan obligation.

2. Reinstatement
CAPARAS V. PHILAMLIFE (G.R. NO. 82976)

Antecedents:
One of the crucial precedents in this case is the Php 100,000 insurance coverage that Philam Life
gave to the petitioner, Caparas. According to the terms of the policy, Caparas' wife was to get the
proceeds in the event of his dying. Philam Life refused to provide Caparas' wife the insurance
proceeds after he passed away, stating that Caparas had misled on his application. According to
Philam Life, Caparas was accused of hiding his medical history, particularly his history of
hypertension and heart disease. Following that, the wife of Caparas filed a claim for the division of the
insurance proceeds, but the trial court sided with Philam Life. Following the Supreme Court's
decision, the wife appealed to the Court.

Decision of the Court and its basis:

 The Supreme Court found in favor of Caparas' wife and mandated that Philam Life pay the
insurance proceeds. The Court determined that Philam Life had not succeeded in
demonstrating that Caparas' application for insurance contained substantial
misrepresentations.
 The Court stated that there was no evidence of hypertension or heart disease found during
the Philam Life medical examination. Additionally, the Court discovered that Philam Life made
no further inquiries or investigations into Caparas' medical history. The Court reached the
conclusion that Philam Life lacked justification to refuse to pay the proceeds of the insurance
to Caparas' wife. For the wife's delay in receiving the insurance benefits, the court additionally
gave her damages.
3. Moral Damages
FORD PHILIPPINES INC. V. OBOZA (G.R. NO. 99039)

Antecedents:
One of the crucial precedents in this case is the sale of a Ford Fiera car by the petitioner, Ford
Philippines, to the respondent, Oboza. The warranty on the vehicle was only valid for 20,000 miles or
one year, whichever came first. But after a few months, the vehicle started having mechanical
problems, forcing Oboza to take it to a licensed Ford shop for repair. The car was fixed several times,
but the problems persisted. Oboza requested a replacement or refund, but Ford Philippines rejected
him because the warranty had already expired. Oboza then brought a lawsuit alleging a breach of
warranty and damages, but the trial court rejected the allegation.

Decision of the Court and its basis:

 • The defendant, Oboza, won his case in court after arguing that Ford Philippines Inc. sacked
him unfairly. According to the court, the corporation fired Oboza without completing the
procedures required by due process. During the investigation, they didn't offer him a chance
to defend himself, and they didn't notify him in writing of the charges against him or the
evidence backing them.
 The defendant, Oboza, won his case in court after arguing that Ford Philippines Inc. sacked
him unfairly. According to the court, the corporation fired Oboza without completing the
procedures required by due process. During the investigation, they didn't offer him a chance
to defend himself, and they didn't notify him in writing of the charges against him or the
evidence backing them.

4. Exemplary Damages
MONTINOLA V. PHILIPPINE AIRLINES (G.R. NO. 198656)

Antecedents:
There was a Philippine AirLines employee involved who had been discharged from her post. Due
to allegations that Maritess Montinola, a PAL flight attendant, was a member of a drug smuggling
network, she was barred from flying in 2005. After an investigation, Montinola was found to be guilty,
and as a result, her job was terminated. When she filed a case for wrongful termination, she alleged
that the company had violated her right to due process. When the case was initially heard in the labor
tribunals, Montinola received back pay and other benefits. The corporation appealed the labor
tribunals' decision, and it was upheld by the Court of Appeals. Following that, PAL filed a petition with
the Supreme Court asking for a review, arguing that the lower courts' decision was invalid. The
Supreme Court reached the same conclusion as the lower courts, holding that the employer violated
the due process requirements when it terminated Montinola. Because Montinola was denied the
opportunity to cross-examine the witnesses who gave false testimony about her during the
investigation, the court particularly found that her right to due process had been violated. The incident
serves as a reminder of the importance of following the necessary procedures when terminating an
employee's employment and of defending the rights of workers.

Decision of the Court and its basis:

 Maritess Montinola, a former PAL flight attendant who was terminated from her post, won
support from the Supreme Court. The court decided that PAL had violated Montinola's right to
due process by firing her from her position. In addition, the court emphasized that Montinola
was denied the opportunity to cross-examine the witnesses who gave testimony against her,
which is an essential component of due process.
 The court also found that the company's statements were not supported by any factual proof,
just hearsay information. The court ruled that Montinola's termination was illegal as a result,
and it mandated that PAL rehire Montinola and reimburse her for lost wages and benefits.
Because Montinola's right to due process had been abridged, the Supreme Court decided as
it did. This right is essential for preserving such rights at work because it is guaranteed by the
Constitution to all employees, regardless of their position or status.
5. Nominal Damages
BUGHAW V. TREASURE ISLAND CORPORATION (G.R. 173151)

Antecedents:
An employee named Bughaw sued his former employer, Treasure Island Corporation, for
wrongful termination in the case known as Bughaw v. Treasure Island Corporation (G.R. 173151).
Without completing the correct processes, Bughaw's termination from his position as a security guard
at the company's resort was made. The company said he had gone without permission, but Bughaw
insisted his boss had given him the go-ahead. When Bughaw complained to the labor authority, the
company was forced to reinstate him, and he received a number of financial awards. The company,
however, refused to abide by the order and appealed to the Court of Appeals. The Court of Appeals
overturned the labor department's decision, finding that there was enough evidence to support the
company's claim that Bughaw had been absent without permission. When Bughaw appealed the
ruling to the Supreme Court, it took his side. Because the corporation was unable to prove that
Bughaw was guilty of the accusations made against him, the Supreme Court ruled that he was not
given a fair trial during the entire investigation. Because of this, the court ordered Bughaw's
reinstatement as well as back pay and benefits from the moment of his illegal firing. The incident
serves as a reminder of the value of a careful review and due process when dismissing an employee,
as well as the need for businesses to preserve workers' fundamental rights.

Decision of the Court and its basis:

 • In the case of Bughaw v. Treasure Island Corporation (G.R. 173151), the court ultimately
ruled in favor of Treasure Island Corporation. The decision was made in light of a number of
factors, including the absence of a valid claim by Bughaw to the contested property and the
considerable investments made in its development and improvement by Treasure Island
Corporation.
 As a result of her lack of a sincere effort to support her claim, the court determined that
Bughaw did not merit ownership. Overall, the court reached a just and equitable resolution
for all parties in this case after carefully examining the relevant facts and supporting
evidence.