Archive for January, 2011


ANTONIO A. ABOC VS. METROPOLITAN BANK AND TRUST COMPANY (G.R. NOS. 170542-43); METROPOLITAN BANK AND TRUST COMPANY VS. ANTONIO A. ABOC (G.R. NO. 176460) (13 DECEMBER 21010, MENDOZA, J.)

 

X —————————————————————————- X

D E C I S I O N

 

MENDOZA, J.:

Assailed in these consolidated petitions for review is the October 28, 2005 Decision[1][1] of the Court of Appeals-Cebu City (CA) disposing two consolidated cases, CA-G.R. SP. No. 80747 and CA-G.R. SP. No. 81363. The CA Decision affirmed the Decision[2][2] of the National Labor Relations Commission (NLRC) which reversed the Decision[3][3] of the Labor Arbiter (LA) finding Antonio A. Aboc (Aboc) to have been illegally dismissed by the Metropolitan Bank and Trust Company (Metrobank).

 

These two cases stemmed from a complaint for illegal dismissal and damages filed by Aboc against Metrobank on October 1, 1998. 

In his position paper,[4][4] Aboc, the Regional Operations Coordinator of Metrobank in Cebu City with a monthly salary of  P11,980.00, alleged that on August 29, 1988, he started working as a loans clerk. He was given merit increases and awarded promotions during his employment because of his highly satisfactory performance. For nine years, he maintained an unblemished employment record until he received an inter-office letter[5][5] on January 29, 1998, requiring him to explain in writing the charges that he had actively participated in the lending activities of his immediate supervisor, Wynster Y. Chua (Chua), the Branch Manager of Metrobank where he was assigned.

Aboc wrote a letter[6][6] to Metrobank explaining that he had no interest whatsoever in the lending business of Chua because it was solely owned by the latter.  He admitted, however, that he did some acts for Chua in connection with his lending activity. He did so because he could not say “no” to Chua because of the latter’s influence and ascendancy over him and because of his “utang na loob” (debt of gratitude).[7][7]

His participation in the lending activity was limited to ministerial acts such as the preparation of deposit and withdrawal slips and the typing of statement of accounts for some clients of Chua.  In fact, Chua wrote a letter to Metrobank absolving him of any responsibility and participation in his lending activities. Despite the same, Metrobank still dismissed him on February 12, 1998.

Metrobank, on the other hand, replied that sometime in November 1995, Chua, Judith Eva Cabrido (assistant manager), Arthur Arcepi (accountant), and Aboc organized a credit union known as Cebu North Road Investment (CNRI). Said officers and employees used Metrobank’s premises, equipment and facilities in their lending business. Apparently, its head office was not informed of the organization of CNRI. Had it been informed of the organization of said credit union, it would not have tolerated or approved of it because the nature of its business would be in conflict, inimical, and in competition with its banking business.  Moreover, they did not register CNRI with the Securities and Exchange Commission (SEC) and with the Department of Trade and Industry (DTI). The lending and investment business of CNRI was confined not only to the employees of Metrobank but also to outsiders, including clients of the bank.[8][8]

Metrobank also disclosed that on August 13, 1996, Aboc and his companions created another credit union, the First Fund Access (FFA), which opened accounts with Metrobank under fictitious names. Again, it was not informed of the existence of this credit union.

In September 1997, Chua and Aboc were observed to have openly convinced outsiders and clients of Metrobank to patronize their lending and investment business. During the investigation conducted by Metrobank on January 15, 1998, it was discovered that Aboc solicited investors including its clients for said credit union. He also induced bank clients to withdraw their accounts and invest them in CNRI.  He even signed as one of the signatories in the trust receipts of some bank clients.

During the administrative investigation, Metrobank likewise discovered that Aboc committed the following acts:

1.     Preparation of all necessary documents on deposits/placements and loans of said lending activities.

2.     Preparation of checks and acting as co-signatory of Chua in payment for matured deposits/placements or proceeds of loans to the damage and prejudice of Metrobank.

 Metrobank required Aboc to submit a written explanation why he should not be dismissed for cause and attend a conference in the morning of February 10, 1998 at the Visayas Regional Office, Fuente Osmeña Center, Cebu City, in which he was allowed to bring a counsel of his own choice. On February 6, 1998, he submitted his written explanation. On February 10, 1998, he attended the conference.

Thereafter, Metrobank found that Aboc’s actions constituted serious misconduct and a breach of trust and confidence. On February 12, 1998, Metrobank terminated  his services.

 

Ruling of the Labor Arbiter

After the parties had submitted their respective position papers, the LA rendered her decision on July 12, 1999, finding that Aboc was illegally dismissed from the service by Metrobank. The dispositive portion of her decision reads:

WHEREFORE, VIEWED FROM THE FOREGOING, judgment is hereby rendered declaring complainant Antonio Aboc to have been illegally dismissed from the service by respondent Metropolitan Bank and Trust Company (Metrobank). Consequently, same respondent Metrobank is hereby ordered to reinstate complainant Aboc to his former position or to a substantially equivalent position without loss of seniority rights and other privileges, and to pay said complainant the following, to wit:

1.       Backwages

February 12, 1998 to July 12, 1999

P11, 980.00 x 18 months …………………..P215, 640.00

13th month = 1 yr ……….P11, 980.00

                     5 mons ……P  4, 991.66

                                         P 16, 971.66

Service Incentive Leave (P11, 980.00 divided

by 26 = P460.76 x 5 ………………2,303.80   P19,275.46   P234, 915.46

 

2. 10% Attorney’s Fees……………………………………..P  23, 491.54

GRAND TOTAL AWARD———————————P258, 407.00[9][9]

The LA reasoned out that Metrobank failed to prove by clear and convincing evidence the charges of serious misconduct, breach of trust and loss of confidence against Aboc. His lending activities were not foreign to Metrobank in the sense that credit unions commonly existed in its other branches and that said credit unions were handled by its high ranking employees.

The LA added that Aboc’s participation in the lending activities was due to “force of circumstance.” He was an “unwilling participant” in the business of his superior because  he could not just say “no” to Chua in view of the latter’s moral ascendancy over him. In fact, Chua vouched for his non-participation in the lending business. According to the LA, to sanction the penalty of dismissal against Aboc would be unfair.[10][10]

Moreover, the LA ruled that Metrobank did not comply with the due process requirement in dismissing Aboc because no hearing was conducted after he was required to explain. He was never informed that he was going to be investigated in connection with the charges being leveled against him. The conference set up by Metrobank could not be considered a substitute to the actual holding of a hearing.

Ruling of the National

Labor Relations Commission

 

 

            On December 11, 2002, the NLRC set aside the decision of the LA but ordered Metrobank to pay Aboc reinstatement wages from July 12, 1999 to September 16, 1999; salary increase from January 2000 to June 2001; Christmas bonus for the year 2000; 13th month pay differential for the year 2000; and salary differential for July and August 2001. The dispositive portion of the NLRC Decision reads:

WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby set aside and vacated and a new one entered dismissing the complaint. However, respondent Metropolitan Bank and Trust Company is hereby ordered to pay the following amounts with respect to complainant’s reinstatement pending appeal:

1.       Reinstatement Wages (July 12, 1999 to

      September 16, 1999 at P11, 980.00)                          P23, 960.00

2.      Salary Increase from January 2000 to

June 2001 at P1, 500.00/month                                   27, 000.00

            3.   Christmas Bonus CY 2000                                               18, 030.00

            4.   13th Month Pay Differential for CY 2000                        1, 500.00

            5.   Salary Diff’l for July & Aug. 2001                                      7, 200.00

                                                                                                Total     P77, 690.00

SO ORDERED.[11][11]

            The NLRC ruled that Aboc was guilty of serious misconduct and breach of trust and loss of confidence based on the following overt acts:

1.     Complainant (Aboc) was an organizer of both CNRI and FFA, business entities which directly competed with the line of business of respondent (Metrobank);

2.     Complainant was a responsible officer of both credit unions and actively participated in their transactions, using the respondent bank’s office, facilities, and equipments.

3.     Complainant, as bank officer, had the serious responsibility of reporting to respondent the establishment of CNRI and FFA but he deliberately failed to do so.

4.     Petitioner admits having opened new accounts bearing fictitious names knowing fully well that it was against bank policy.

 

 

The NLRC wrote that Aboc’s loyalty should be first and foremost to Metrobank. This consideration should be over and above whatever personal debts of gratitude he owed Chua.

On due process, the NLRC ruled that Metrobank fully complied with the two-notice rule under the Labor Code.  It sent an inter-office letter dated July 16, 1998 to Aboc asking him to explain why his services should not be terminated for cause. Subsequently, Aboc submitted a written explanation dated February 6, 1998.  He was likewise invited to a conference, which he attended on February 10, 1998, purposely to give him the chance to explain his side and to adduce evidence in his behalf.

On the monetary awards, the NLRC explained that Aboc was entitled to receive them because he was included in the payroll by Metrobank as he was ordered reinstated by the LA.

Both Aboc and Metrobank were not satisfied with the NLRC Decision. The former filed a motion for reconsideration[12][12] while the latter filed a motion for partial reconsideration[13][13] on the monetary award.

On September 17, 2003, the NLRC issued a resolution[14][14] affirming its finding of valid dismissal but modifying the monetary award by directing Metrobank to pay Aboc his CBA benefits during his reinstatement pending appeal and his salary during the period stated therein, thereby partially granting Aboc’s motion for reconsideration and denying Metrobank’s motion for partial consideration.

Aggrieved, Metrobank challenged the grant of monetary award in a petition[15][15] before the CA, docketed as CA-G.R. SP. No. 80747, while Aboc questioned the validity of his dismissal in a petition,[16][16] docketed as CA-G.R.SP. No. 81363. The two petitions were consolidated by the CA because they involved the same parties and intertwined issues.

 

 

Ruling of the Court of Appeals

 

 

On October 28, 2005, the CA rendered its decision affirming the decision of the NLRC, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered as follows:

1. In CA-G.R. No. 807407, the petition is partially granted insofar as the finding of public respondent on the validity and legality of the dismissal of private respondent Antonio A. Aboc.

2. In CA-G.R. No. 81363, the petition is partially granted insofar as the grant of the monetary award in favor of petitioner Antonio A. Aboc.

No pronouncement as to costs.

SO ORDERED.[17][17]

 The CA wrote that Aboc’s participation in the organization of two (2) credit unions operating inside Metrobank without its knowledge and consent was inimical to the welfare of the bank. The lending and investment transactions of the credit unions directly competed with the business of Metrobank.  Aboc held a position that required loyalty and exercise of sound judgment.

The CA also agreed with the NLRC that Aboc was duly afforded ample opportunity to defend himself during the conference conducted on February 10, 1998 reasoning that a formal trial-type hearing was not, at all times, essential to due process. Aboc was able to explain his side and submit evidence during the conference.

On the monetary award, as Aboc was ordered reinstated as an employee of Metrobank pending appeal, the CA held that he was entitled to receive his monetary claims.

Dissatisfied with the assailed CA Decision, both parties filed their respective petitions before this Court. Aboc’s petition was docketed as G.R. No. 170542-43 and Metrobank’s petition as G.R. No. 176460. On June 4, 2007, this Court issued a resolution[18][18] consolidating the two petitions because they have the same set of facts and involve the same parties and issues.

 

 

ISSUES

 

 

1.     Whether or not the Court of Appeals erred in ruling that Antonio A. Aboc was validly dismissed by the Metropolitan Bank and Trust Company.

 

2.     Whether or not the Court of Appeals erred in ruling that the Metropolitan Bank and Trust Company was liable to pay the monetary award claimed by Antonio A. Aboc.

 

 

Position of Aboc

Aboc basically contends that:

1. Metrobank’s CA petition should have been dismissed for being filed out of time and for failing to comply with the procedural requirements. Metrobank’s counsel of record, E.F. Rosello and Associates Law Office, received a copy of the September 17, 2003 CA Resolution on September 26, 2003.  Therefore, it had until November 25, 2003 within which to file its petition. The petition, however, was filed after November 25, 2003 only because the Verification and Certification of Non-Forum Shopping therein was notarized only on November 27, 2003.  Moreover, the petition did not contain a Statement of Material Dates and Proof of Service thereof on the opposing party.

2. He was illegally dismissed as he was not guilty of serious misconduct and breach of trust.  Being “an organizer” of credit unions like CNRI and FFA did not necessarily make him guilty of serious misconduct or breach of trust and confidence because the operation of credit unions and cooperatives were not prohibited or, at the very least, tolerated by Metrobank. In fact, all Metrobank branches practically maintained credit unions of their own. Metrobank even “failed to present a single written rule or regulation that suggested even remotely that credit unions were prohibited.”[19][19]

3.  He was effectively deprived of his rights to due process because the interrogation conducted by Metrobank’s representatives at its head office in Manila clearly smacked of oppression, intimidation and coercion. Metrobank exerted moral coercion, undue ascendancy and undue influence over him, a hapless and helpless employee.

Position of Metrobank

 

Metrobank argues that:

1. The date of the filing of its petition should be reckoned from September 29, 2003, the date the law firm of Rayala Alonso and Partners received the September 17, 2003 CA Resolution because said law firm took active participation in the proceedings while the law office of E.F. Rosello and Associates had already ceased taking active part.

2. Bank employees, as per Bank Policy, were prohibited from engaging in informal credit union activities. Aboc engaged in an irregular activity for profit, which directly competed with Metrobank’s business. The acts committed by Aboc – organizing and acting as auditor of the CNRI and FFA credit unions; opening the accounts of CNRI and FFA with Metrobank under his name and his companions; soliciting investors including the clients of Metrobank; opening accounts for the credit unions under fictitious names to hide the lending and investment activities of said credit unions; and inducing a respondent bank’s client to withdraw her account with Metrobank and to invest it instead with CNRI- constituted wrong and improper conduct warranting dismissal for serious misconduct and loss of trust and confidence.

3. The dispositive portion of the reversed decision of the LA merely made mention of reinstatement, payment of backwages, 13th month pay, service incentive leave pay, and attorney’s fees. It was silent on the salary increase from January 2000 to June 2001, salary increase differentials, 13th month pay, and award of bonuses. Therefore, these should have been deleted and no other monetary awards should have been given to Aboc.

4. The computation of  Aboc’s backwages should be limited to the rate of wage at the time of his separation from the service, excluding the salary increases and those under the collective bargaining agreement.  Since the salary increase from January 2000 to June 2001 would have the effect of increasing  Aboc’s base salary, it should not have been awarded.  If he was not entitled to salary increases, he should not be awarded salary increase differentials or wage differentials as well as 13th month pay differentials.

5. The granting of a bonus is a management prerogative.  Aboc is not entitled to receive bonuses because he participated in activities competing with Metrobank’s main business instead of remaining loyal to it.

 

The Court’s Ruling 

After an assiduous assessment of the records, the Count finds no cogent reason to disturb the subject decision of the CA.

On the procedural issue raised by Aboc regarding Metrobank’s alleged belated filing of its petition before the CA, the records show that all pleadings filed by Metrobank, since the filing of its Motion For Partial Reconsideration dated January 15, 2003, was prepared and filed by Rayala Alonso and Partners. Aboc knew all along that Metrobank was being represented by said firm since his counsel furnished the latter a copy of his motion for reconsideration.

It appears that Rayala Alonso and Partners received a copy of the September 17, 2003 NLRC decision on September 29, 2003. For said reason, Metrobank is correct in asserting that it timely filed its petition on November 7, 2004.

Nonetheless, granting that Metrobank belatedly filed its petition, a delay of just two (2) days should not be fatal. Litigations should be decided on the merits of the case, not on mere technicalities.

The court has the discretion to dismiss or not to dismiss an appellant’s appeal. It is a power conferred on the court, not a duty. The discretion must be a sound one, to be exercised in accordance with the tenets of justice and fair play, having in mind the circumstances obtaining in each case. Technicalities, however, must be avoided. The law abhors technicalities that impede the cause of justice. The court’s primary duty is to render or dispense justice.

Litigations must be decided on their merits and not on technicality. Every party litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the unacceptable plea of technicalities. Thus, dismissal of appeals purely on technical grounds is frowned upon where the policy of the court is to encourage hearings of appeals on their merits and the rules of procedure ought not to be applied in a very rigid, technical sense; rules of procedure are used only to help secure, not override substantial justice. It is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.[20][20]

On Aboc’s termination, Article 282 of the Labor Code states:

ART. 282. TERMINATION BY EMPLOYER. – An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.

In termination cases, the burden of proof rests on the employer to show that the dismissal was for a just cause or authorized cause. An employee’s dismissal due to serious misconduct and loss of trust and confidence must be supported by substantial evidence. Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.[21][21]

In the case at bench, Metrobank’s evidence clearly shows that the acts of Aboc in helping Chua organize the CNRI and FFA credit unions and in the operations thereof constituted serious misconduct or  breach of trust and confidence. In response to the inter-office letter[22][22] sent by Metrobank on January 29, 1998, Aboc submitted his Explanation[23][23] dated February 6, 1998, admitting having committed said acts but claiming that he was only an “unwilling participant” doing a ministerial job.

During the investigation conducted on January 15, 1998 at Metrobank’s head office in Makati City, however, the following facts were established:

1. He was one of the organizers of the CNRI and FFA credit unions and acted as auditor of said credit unions.

2. He and his co-organizers did not inform Metrobank about the existence of said credit unions.

3. CNRI and FFA opened an account with Metrobank under the names Wynster Chua, Judith Eva Cabrido and Antonio Aboc.

4. He solicited investors including Metrobank clients for said credit unions, and signed as one of the signatories in the Trust Certificate of Marlyn Belleza and Grace Lim.

5. He and Chua opened accounts for the said credit unions under the fictitious names of Vicente Belocura and Romeo Gonzales, respectively.

6. He induced a certain Nerinilda Arcipe (Nerinilda), a non-employee of Metrobank, to withdraw her UNISA account with Metrobank and invest it with CNRI.

7. The regional and local checks in the names of Belocura, John BK Chua, John AJ. Jazal, and Wynster Chua, issued in connection with the business activities of CNRI and FFA were treated as bills purchases and the proceeds thereof were immediately withdrawn without waiting for three (3) to five (5) days clearing in violation of Metrobank’s control system.

Indeed, Aboc’s participation in the lending and investment activities of CNRI and FFA was highly irregular and clearly in conflict with Metrobank’s business. The irregularity of his act was evident from the fact that he deliberately failed to inform Metrobank about the existence of CNRI and FFA. Though he expressed apprehension and was not pleased with the way Chua was running the lending business, he never informed or, at least, sought advice from his employer. Instead of doing so, he actively participated in the business of Chua which competed against that of Metrobank.

Moreover, Aboc knew about the subject credit union’s non-registration with the Central Bank or any proper government institution. Being an experienced banker, he should have known that the lending activities of the subject credit unions were questionable, if not, illegal, due to its non-registration. Again, Aboc chose not to inform his employer about this and, instead, participated in the operations of the subject credit unions.

The fact that Aboc opened accounts for the subject credit unions under fictitious names can only mean that the group had something to hide. 

Under the above circumstances, the Court cannot subscribe to the assertion that he was just an “unwilling participant” doing a “ministerial” job for the subject credit unions. Certainly, the acts of 1) opening an account under fictitious names; 2) solicitation of Metrobank clients to invest in their credit union; 3) co-signing of trust receipts; and 4) inducement of an investor to withdraw her account and transfer it to the subject credit unions, were certainly not “ministerial” tasks of an “unwilling participant.”  He was just not a runner doing errands for Chua; he was the auditor for CNRI and FFA and actively participated in their lending activities.

Aboc cannot be saved by Chua’s letter[24][24] dated February 17, 1998 explaining that Aboc had no participation whatsoever in said lending activities. Metrobank was his employer, not Chua. Most important, Metrobank was paying his salary and other benefits in exchange for his services. Therefore, Aboc’s loyalty should first and foremost be to Metrobank. Ironically, Aboc did not return the favor. He chose his personal interest over that of Metrobank.

The Court cannot give weight to the argument that Metrobank was aware of the proliferation of credit unions in practically all of its branches and did not prohibit the operation thereof. Contrary to Aboc’s position, Metrobank issued notices to all its employees regarding the prohibition on the practice of borrowing and lending money among its officers, employees, and bank clients.  Metrobank’s notices were dated June 15, 1988[25][25] and August 30, 1995.[26][26] 

 Aboc’s highly irregular participation in the lending business of CNRI and FFA jeopardized the business of Metrobank. CNRI and FFA were practically competing with the business of Metrobank by soliciting investors including clients of the bank for their credit unions.  Aboc admitted that he was able to induce Nerinilda, the widow of a former branch accountant of Metrobank, to withdraw her UNISA account with Metrobank and invest it with their credit union. This was confirmed by Nerinilda herself in her affidavit[27][27] dated December 11, 1997.

 To extricate himself, Aboc also argues that Metrobank failed to comply with the requirements of due process in dismissing him because he was not properly investigated. According to him, the interrogation conducted by Metrobank was done in an atmosphere of fear, oppression, intimidation, and coercion.

The Court is not persuaded.

The evidence shows that he was afforded due process. The essence of due process is an opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain one’s side. A formal or trial-type hearing is not essential.[28][28]  In this regard, the Court agrees with the CA when it wrote:

Regarding the procedural requirements of notice and hearing, records show Aboc was duly notified through the letter dated 29 January 1998 asking him to explain why his services should not be terminated. In fact, Aboc replied to the same by submitting a written explanation on 6 February 1998. We likewise find that he was duly afforded ample opportunity to defend himself during the conference conducted on 10 February. Aboc’s contention that the conference he attended cannot substitute the “hearing mandated by the Labor Code is bereft of merit. A formal trial-type hearing is not at all times and in all instances essential to due process. It is enough that the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based.[29][29]

 The Court, however, cannot also accommodate Metrobank.

The monetary award granted to Aboc was warranted under the law and jurisprudence. Article 223 of the Labor Code reads, in part:

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.

In the case at bench, it cannot be denied that Metrobank opted to reinstate Aboc in its payroll. Since Metrobank chose payroll reinstatement for Aboc, the Court agrees with the CA that he then became a reinstated regular employee.  This means that he was restored to his previous position as a regular employee without loss of seniority rights and other privileges appurtenant thereto. His payroll reinstatement put him on equal footing with the other regular Metrobank employees insofar as entitlement to the benefits given under the Collective Bargaining Agreement is concerned.

The fact that the decision of the LA was reversed on appeal has no controlling significance. The rule is that even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until final reversal by the higher court.[30][30]

WHEREFORE, the October 28, 2005 Decision of the Court of Appeals is AFFIRMED. 

SO ORDERED.

 

 

 

JOSE CATRAL MENDOZA

                                                                                       Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

ANTONIO EDUARDO B. NACHURA     DIOSDADO M. PERALTA

               Associate Justice                                    Associate Justice

 

 

ROBERTO A. ABAD

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                   ANTONIO T. CARPIO

                          Associate Justice

                                                                 Chairperson, Second Division

 

 

C E R T I F I C A T I O N

 

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                                      RENATO C. CORONA

                                                                               Chief Justice


 


[1][1] Rollo  (G.R. Nos. 170542-43), pp. 246-257. Penned by Associate Justice Pampio A. Abarintos with Associate Justice Mercedes Gozo-Dadole and Associate Justice Enrico A. Lanzanas, concurring.

[2][2] Rollo (G.R. Nos. 170542-43), pp. 441-455.

[3][3] Id. at 91-101. Penned by Labor Arbiter Julie C. Rendoque.

[4][4] Id. at 39-47.

[5][5] Id. at 53.

[6][6] Id. at 54-56.

[7][7] Id. at 55.

[8][8] Rollo (G.R. Nos. 170542-43), Position Paper for the Respondents, pp. 59-72, p. 60.

[9][9]   Rollo (G.R. Nos. 170542-43), p. 100.

[10][10] Id. at 95-96.

[11][11] Id. at 161-162.

[12][12] Id. at 164-180.

[13][13] Id. at 181-184.

[14][14] Id. at 186-190.

[15][15] Id. at 221-243.

[16][16] Id. at 191-220.

[17][17] Id. at 257.

[18][18] Rollo (G.R. No. 176460), p. 406.

[19][19] Rollo (G.R. Nos. 170542-43), p. 28.

[20][20] Voltaire I. Rovira v. Heirs of Jose C. Deleste, G.R. No. 160825, March 26, 2010.

[21][21] Caltex (Philippines) Inc. v. Hermie G. Agad, G.R. No. 162017, April 23, 2010.

[22][22] Rollo (G.R. Nos. 170542-43), p. 53.

[23][23] Id. at 54-56.

[24][24] Id. at  57.

[25][25] Id. at 338.

[26][26] Id. at 339.

[27][27] Id. at 73-74.

[28][28] Maralit v. Philippine National Bank, G.R. No. 163788, August 24, 2009, 596 SCRA 662, citing Philippine Long Distance Company v. Bolso, G.R. No. 159701, 17 August 2007, 530 SCRA 550, 564-565.

[29][29] Rollo (G.R. Nos. 170542-43), pp. 255-256.

[30][30] See College of the Immaculate Conception v. NLRC & Atty. Marius F. Carlos, Ph.D., G.R. No. 167563, March 22, 2010.

CASE 2011-0242: BAGUIO TRINITY DEVELOPERS, INC., HEREIN REPRESENTED BY RICARDO JULIAN VS. THE HEIRS OF JOSE RAMOS AND THE HEIRS OF LEOPOLDO AND VICTORINA NEPA; AND THE           HONORABLE COURT OF APPEALS (G.R. NO. 188381, 14 DECEMBER 2011, ABAD, J.) SUBJECT: REQUIREMENT IN A PETITION FOR ANNULMENT OF JUDGMENT OF THE SUBMISSION OF A CERTIFIED TRUE COPY OF THE ASSAILED JUDGMENT OR ORDER;  LACHES AS A BAR TO A PROPERTY OWNER’S ACTION TO ANNUL A RECONSTITUTED VERSION OF HIS TITLE REGISTERED IN ANOTHER PERSON’S NAME. (BRIEF TITLE: BAGUIO TRINITY VS. HEIRS OF RAMON).

 

====================

 

 

DISPOSITIVE:

 

 

WHEREFORE, the Court GRANTS the petition and sets aside the Court of Appeals Resolutions dated May 8, 2008 and November 7, 2008 and directs such court to hear and decide the merits of the petition for annulment of judgment.

 

        SO ORDERED.

 

====================

 

 

SUBJECT/ DOCTRINE/DIGEST:

 

 

A PIECE OF LAND WAS TITLED TO TWO OWNERS.  BAGUIO TRINITY DEVELOPERS INC. WAS ONE OF THEM. IT FILED A CASE AT MTC TO ANNUL AN RTC DECISION RECONSTITUTING THE TITLE TO THE OTHER OWNER. MTC DISMISSED THE CASE ON THE GROUND THAT IT CANNOT ANNUL AN ORDER OF AN RTC, A HIGHER COURT. BAGUIO TRINITY FILED A CASE AT RTC WHICH DISMISSED ALSO THE CASE BECAUSE IT CANNOT ANNUL AN ORDER OF A CO-EQUAL COURT. IT FILED A CASE AT CA BUT CA DISMISSED IT BECAUSE BAGUIO TRINITY DID NOT ATTACH TO ITS PETITION AN ORIGINAL COPY OF THE DECISION SOUGHT TO BE ANNULLED AND BECAUSE OF LACHES. IS CA DECISION CORRECT?

 

 

NO. THE 1990 EARTHQUAKE RESULTED IN THE LOSS OR DESTRUCTION OF THE RTC RECORDS OF THE CASE.  THE ADMINISTRATION OF JUSTICE CANNOT STOP TO GRIND BECAUSE OF SUCH LOSS AND NO ONE SHOULD SUFFER OR BENEFIT FROM IT.

 

XXXXXXXXXXXXXXXXX

 

 

WHAT IS THE PURPOSE OF SECTION 4, RULE 47 OF THE RULES OF COURT WHICH PROVIDES THAT “A CERTIFIED COPY OF THE JUDGMENT OR FINAL ORDER OR RESOLUTION SHALL BE ATTACHED TO THE ORIGINAL COPY OF THE PETITION INTENDED FOR THE COURT AND INDICATED AS SUCH BY THE PETITIONER,”

 

 

TO ENSURE THAT THE COURT IS SHOWN A GENUINE COPY OF THE CHALLENGED JUDGMENT OR FINAL ORDER BEFORE IT ACTS ON THE PETITION.

 

 

        Evidently, when Section 4, Rule 47 of the Rules of Civil Procedure provided that “a certified copy of the judgment or final order or resolution shall be attached to the original copy of the petition intended for the court and indicated as such by the petitioner,” it wanted to ensure that the Court is shown a genuine copy of the challenged judgment or final order before it acts on the petition.

 

        The Court is aware of the necessity of mandating strict compliance with procedural rules. Here, however, the 1990 earthquake resulted in the loss or destruction of the RTC records of the case.  The administration of justice cannot stop to grind because of such loss and no one should suffer or benefit from it.

 

 

XXXXXXXXXXXXXXXX

 

 

WHO CAN ISSUE A CERTIFIED COPY OF THE LOST ORDERS?

 

 

THE PUBLIC OFFICER IN CUSTODY OF THE ORIGINAL DOCUMENT. IN THIS CASE THE CLERK OF COURT.

 

XXXXXXXXXXXXXX

 

 

THE CLERK OF COURT ISSUED A CERTIFICATION THAT THE RELEVANT RECORDS ARE NO LONGER AVAILABLE HAVING BEEN LOST TO AN EARTHQUAKE. SINCE A CERTIFIED COPY CANNOT BE ISSUED, IS THERE A REMEDY?

 

 

YES. THAT THE RECORD CUSTODIAN COULD NO LONGER ISSUE A CERTIFIED COPY SHOULD NOT OF COURSE PREVENT AN AGGRIEVED PARTY FROM PURSUING HIS PETITION.  THE RULES ALLOW SUCH PARTY TO SUBMIT APPROPRIATE SECONDARY EVIDENCE.

 

 

XXXXXXXXXXXXXXXXXXXXXXX

 

 

DID BAGUIO TRINITY SUBMIT SECONDARY EVIDENCE?

 

 

YES. IT SUBMITTED  FAITHFUL COPIES OF THE  CHALLENGED RECONSTITUTION ORDERS, AUTHENTICATED BY A VERIFIED STATEMENT THAT THESE ARE COPIES OF THE ORIGINAL ORDERS. 

 

 

        And who can issue a certified copy of the lost orders?  The answer is that it can be issued by the public officer in custody of the original of the document.[1][4]  Here, it is the clerk of court of the RTC that issued the challenged reconstitution orders.  But the clerk of court issued a certification, conformably with Section 28 of Rule 132, that the relevant records are no longer available having been lost to an earthquake.  That the record custodian could no longer issue a certified copy should not of course prevent an aggrieved party from pursuing his petition.  The rules allow such party to submit appropriate secondary evidence.

 

        Section 5, Rule 130 of the Rules of Evidence provides that when the original document has been lost and its unavailability has been established, a party “may prove its contents by a copy or by a recital of its contents in some authentic document or by the testimony of witnesses in the order stated.”  Copies of the challenged reconstitution orders from the LRA or the Register of Deeds are of course available to petitioner Baguio Trinity.  But it could just as validly submit faithful copies of its challenged reconstitution orders, authenticated by a verified statement that these are copies of the original orders.  The Baguio Trinity did.  Consequently, the CA had no valid reason denying its petition for failure to attach a copy of the assailed reconstitution orders. 

 

XXXXXXXXXXXXX

 

 

CA REQUIRED ALSO COPIES OF DOCUMENTS AND PLEADINGS FILED DURING THE RECONSTITUTION PROCEEDINGS. ARE THESE NECESSARY?

 

 

 

NOT AT THIS STAGE. THEY COULD BE VERY WELL ADDUCED DURING THE HEARING SINCE THEIR RELEVANCE COULD HARDLY BE DISCERNED UNTIL THE ISSUES HAVE BEEN JOINED.

 

 

 

        As for copies of documents and pleadings filed during the reconstitution proceedings, the notices of hearing, and the titles issued to petitioner’s predecessors-in-interest, which the CA wanted petitioner Baguio Trinity to submit, these could very well be adduced during the hearing since their relevance could hardly be discerned until the issues have been joined.

 

XXXXXXXXXXXXXXXX

 

 

THE CA ALSO DISMISSED THE PETITION ON THE GROUND OF LACHES. IT WAS FILED ONLY 12 YEARS FROM 1995 WHEN IT LEARNED OF THE RECONSTITUTION ORDERS. IS CA CORRECT?

 

 

NO. IT IS NOT RIGHT FOR THE CA TO DISMISS SUCH ACTION BY REASON OF LACHES SIMPLY BECAUSE NO INACTION IS EVIDENT ON BAGUIO TRINITY’S PART.  IN FACT, IT HAD BEEN AN UNINTENTIONAL OBJECT OF RELAY BETWEEN THE LOWER COURTS WHICH CONTRIBUTED TO THE DELAY IN THE PROCEEDINGS. 

 

 

ALSO, THERE IS  CONFLICT BETWEEN THE TWO SETS OF TITLES. IT MUST BE RESOVED.  THE PRESENT STANDOFF CANNOT REMAIN INDEFINITELY UNDER A TITLING SYSTEM THAT ASSURES THE EXISTENCE OF ONLY ONE VALID TITLE FOR EVERY PIECE OF REGISTERED LAND.  EVIDENTLY, LACHES CANNOT BAR AN ACTION SOUGHT TO RELIEVE SUCH INTOLERABLE STANDOFF. 

 

 

        Two.  The CA also dismissed petitioner’s action for annulment of final orders on the further ground that such action is already barred by laches.  The CA pointed out that petitioner Baguio Trinity learned of the reconstitution orders as early as 1995.  Still, the action for the annulment of those orders was filed only 12 years later on December 21, 2007. 

 

The RTC of Agoo ordered the reconstitution of the Grabiles title when, if Baguio Trinity’s allegations were to be believed, the original of such title actually existed and had since been replaced through subsequent sales, terminating their ownership of the property.  As things now stand, two sets of titles covering the same property, one based on transactions emanating from the original and another based on the reconstituted titles exist.  One has to give way to the other.

 

Petitioner Baguio Trinity initially brought an action to annul the reconstituted versions of the Grabiles’ title before the MTC of Rosario, La Union, on September 14, 1995 but that court dismissed the same for lack of jurisdiction and opined that it should be filed with the RTC.

 

  Baguio Trinity filed a second action on December 3, 1997 for recovery of property, declaration of nullity of the titles, and damages before the RTC of Agoo, Branch 32, against the Ramos and Nepa heirs who held the reconstituted titles.  But the RTC dismissed the action on May 31, 2004 saying that it cannot annul the orders issued by a co-equal court. This, the CA Sixth Division affirmed and held that Baguio Trinity should have availed itself of a petition for annulment under Rule 47.

 

 Baguio Trinity finally filed before the CA an action for annulment of the reconstitution orders on the ground that the RTC did not have jurisdiction to issue them.  It is not right for the CA to dismiss such action by reason of laches simply because no inaction is evident on Baguio Trinity’s part.  In fact, it had been an unintentional object of relay between the lower courts which contributed to the delay in the proceedings. 

 

The petition for annulment alleged serious charges which if true can invalidate respondents’ title. Such title had been subjected to two reconstitution proceedings that could have divested the true owner of title over his property. The conflict between the two sets of titles has to be resolved.  The present standoff cannot remain indefinitely under a titling system that assures the existence of only one valid title for every piece of registered land.  Evidently, laches cannot bar an action sought to relieve such intolerable standoff. 

 

====================

 

 

THIRD DIVISION

 

 

BAGUIO TRINITY DEVELOPERS,  G.R. No. 188381

INC., herein represented by

RICARDO JULIAN,

                        Petitioner,                        Present:

                                                  VELASCO, JR., J., Chairperson,

        – versus –                                   PERALTA,

  ABAD,

  SERENO,* and

  PERLAS-BERNABE, JJ.

THE HEIRS OF JOSE RAMOS

and THE HEIRS OF LEOPOLDO

and VICTORINA NEPA; and the             Promulgated:

HONORABLE COURT OF APPEALS,

                        Respondents.              December 14, 2011

 

x ————————————————————————————— x

 

 

DECISION

 

ABAD, J.:

 

 

The case is about a) the requirement in a petition for annulment of judgment of the submission of a certified true copy of the assailed judgment or order and b) laches as a bar to a property owner’s action to annul a reconstituted version of his title registered in another person’s name.

 

 

 

The Facts and the Case

 

        Spouses Meliton Grabiles and Leona Calderon (the Grabiles) were the original registered owners of a 2,933-square-meter lot in Rosario, La Union.[2][1]  After a number of successive transfers the lot was eventually sold to petitioner Baguio Trinity Developers, Inc. on January 3, 1994, resulting in the issuance of Transfer Certificate of Title T-38340 in its name.

 

        It appears, however, that in 1985 Anastacio Laroco and Leona Javier filed a reconstitution proceeding before Branch 31 of the Regional Trial Court (RTC) of Agoo, La Union, covering the Grabiles’ original title.  But for some reasons, the RTC’s order of October 20, 1986 directed the reconstitution of the title in the name of one Maria Bernal.  This order was annotated on the Grabiles’ Original Certificate of Title (OCT) 1082 issued by the Register of Deeds of La Union. 

 

In 1986, Melicia Silva filed a second petition purportedly on behalf of the Grabiles for the reconstitution of their original title also before Branch 31 of the RTC of Agoo.  In its order of October 28, 1986, the RTC ordered the reconstitution of the title in the name of the Grabiles as OCT RO-4717.  Entry 89953 of this reconstituted original title stated that the property had been sold in 1939 to a certain Jose Ramos.  So, too, in 1944, the southern portion of the lot, covering 1,372 square meters, was sold to Quirini Parrocha who in turn sold it in 1955 to the spouses Leopoldo and Victorina Nepa (the Nepas).  Respondents in this case are the heirs of these two buyers, Jose Ramos and the Nepas (the Ramos and Nepa heirs).

 

        On September 14, 1995 petitioner Baguio Trinity filed a complaint for recovery and declaration of nullity of title and damages before the Municipal Trial Court (MTC) of Rosario, La Union, against the Ramos and Nepa heirs who held reconstituted titles over the property.  Since Baguio Trinity presented the issue on the validity of the reconstituted titles issued by the RTC, a superior court, the MTC dismissed the complaint for lack of jurisdiction.

 

        On December 3, 1997 petitioner Baguio Trinity filed a second complaint for recovery of property, declaration of nullity of title, and damages before the RTC of Agoo, Branch 32. But, by Order of May 31, 2004, the RTC dismissed the complaint for lack of jurisdiction after finding that the assessed value of the subject property was below P20,000.00.  Moreover, the court said that it could not annul an order issued by a co-equal court. The RTC also denied Baguio Trinity’s motion for reconsideration, prompting it to file a petition for certiorari with the Court of Appeals (CA) on October 13, 2004.  On September 13, 2007[3][2] the CA dismissed the petition, stating that Baguio Trinity’s remedy should have been a petition to annul judgment under Rule 47 of the Rules of Court.

 

Three years later from the time the RTC dismissed the complaint or on December 20, 2007 petitioner Baguio Trinity filed with the CA a petition for annulment of the reconstitution orders that the RTC of Agoo, Branch 31, issued on October 20, 1986 and October 28, 1986, impleading the Ramos and Nepa heirs. Baguio Trinity claimed that the RTC had no jurisdiction to order reconstitution for the Grabiles’ title since this was not lost. Further, the Grabiles could not have authorized anyone to institute the proceedings on their behalf since they had been long dead. Thus, the orders should be annulled for lack of jurisdiction.

 

        On May 8, 2008 the CA[4][3] dismissed the petition on the grounds that it failed to attach a) a certified copy of the RTC Order dated October 20, 1986, and b) copies of the affidavits of witnesses and the documents, and the pleadings filed during the reconstitution proceedings, the notices of hearing, and the titles issued to petitioner’s predecessors-in-interest in support of petitioner’s cause of action. Further, petitioner paid insufficient docket fees.

 

        Petitioner Baguio Trinity filed a motion for reconsideration and attached a copy of the affidavit of Cresencio Aspiras, their immediate predecessor, together with copies of reconstituted titles issued to previous owners to show the chain of ownership before Baguio Trinity acquired title to the property.  It also paid the deficiency in the docket fees and explained that a certified true copy of the assailed Order cannot be obtained because the records were destroyed during the July 16, 1990 earthquake per RTC Certification of November 14, 2007.

 

        But the CA denied petitioner’s motion of November 7, 2008, citing Section 4, par. 2 of Rule 47 which provides that a “certified copy of the judgment or final order shall be attached to the original copy of the petition.”   The mandatory tenor of the requirement, said the CA, precluded Baguio Trinity’s submission of some other copy of such judgment or final order. 

 

        In any event, the CA held that the petition was barred by laches since Baguio Trinity had notice of the reconstitution orders as early as 1995 when it filed an action (the first that it filed) for declaration of nullity of titles and damages before the MTC, a wrong court.  Baguio Trinity filed its action to annul the orders of reconstitution with the CA only on December 21, 2007 or 12 years after that court affirmed the RTC order dismissing the complaint (the second action filed) before the RTC of Agoo, Branch 32. 

 

        Because the CA denied petitioner Baguio Trinity’s motion for reconsideration of its ruling in its resolution of April 24, 2009, petitioner has taken recourse to this Court.

 

 

The Issue

 

        The only issue before this Court is whether or not the CA erred in dismissing petitioner Baguio Trinity’s action for annulment of judgment a) by reason of its failure to comply with the requirement of submission of certified true copies of the assailed RTC orders; and b) on ground of laches.

 

The Court’s Rulings

 

One.  In denying the petition before it, one of the grounds the CA gave was that petitioner Baguio Trinity failed to attach to its petition for annulment of judgment a “certified copy of the judgment or final order,” which requirement is mandatory.  Without it, the court “would have no bases to form a decision.”  Besides, said the CA, petitioner could have obtained a certified copy of the same from the Land Registration Authority (LRA) which is usually furnished a copy, just as petitioner was able to secure a copy of the October 28, 1986 Order from the LRA.  The Register of Deeds is also usually furnished a copy of such order.

 

        Evidently, when Section 4, Rule 47 of the Rules of Civil Procedure provided that “a certified copy of the judgment or final order or resolution shall be attached to the original copy of the petition intended for the court and indicated as such by the petitioner,” it wanted to ensure that the Court is shown a genuine copy of the challenged judgment or final order before it acts on the petition.

 

        The Court is aware of the necessity of mandating strict compliance with procedural rules. Here, however, the 1990 earthquake resulted in the loss or destruction of the RTC records of the case.  The administration of justice cannot stop to grind because of such loss and no one should suffer or benefit from it.

        And who can issue a certified copy of the lost orders?  The answer is that it can be issued by the public officer in custody of the original of the document.[5][4]  Here, it is the clerk of court of the RTC that issued the challenged reconstitution orders.  But the clerk of court issued a certification, conformably with Section 28 of Rule 132, that the relevant records are no longer available having been lost to an earthquake.  That the record custodian could no longer issue a certified copy should not of course prevent an aggrieved party from pursuing his petition.  The rules allow such party to submit appropriate secondary evidence.

 

        Section 5, Rule 130 of the Rules of Evidence provides that when the original document has been lost and its unavailability has been established, a party “may prove its contents by a copy or by a recital of its contents in some authentic document or by the testimony of witnesses in the order stated.”  Copies of the challenged reconstitution orders from the LRA or the Register of Deeds are of course available to petitioner Baguio Trinity.  But it could just as validly submit faithful copies of its challenged reconstitution orders, authenticated by a verified statement that these are copies of the original orders.  The Baguio Trinity did.  Consequently, the CA had no valid reason denying its petition for failure to attach a copy of the assailed reconstitution orders. 

 

        Notably, the respondent Ramos and Nepa heirs have not questioned the authenticity of the submitted copies.  At any rate, the Court notes that petitioner Baguio Trinity attached certified machine copies of the assailed Orders supplied by the LRA as annexes to the present petition.

 

        As for copies of documents and pleadings filed during the reconstitution proceedings, the notices of hearing, and the titles issued to petitioner’s predecessors-in-interest, which the CA wanted petitioner Baguio Trinity to submit, these could very well be adduced during the hearing since their relevance could hardly be discerned until the issues have been joined.

 

        Two.  The CA also dismissed petitioner’s action for annulment of final orders on the further ground that such action is already barred by laches.  The CA pointed out that petitioner Baguio Trinity learned of the reconstitution orders as early as 1995.  Still, the action for the annulment of those orders was filed only 12 years later on December 21, 2007. 

 

The RTC of Agoo ordered the reconstitution of the Grabiles title when, if Baguio Trinity’s allegations were to be believed, the original of such title actually existed and had since been replaced through subsequent sales, terminating their ownership of the property.  As things now stand, two sets of titles covering the same property, one based on transactions emanating from the original and another based on the reconstituted titles exist.  One has to give way to the other.

 

Petitioner Baguio Trinity initially brought an action to annul the reconstituted versions of the Grabiles’ title before the MTC of Rosario, La Union, on September 14, 1995 but that court dismissed the same for lack of jurisdiction and opined that it should be filed with the RTC.

 

  Baguio Trinity filed a second action on December 3, 1997 for recovery of property, declaration of nullity of the titles, and damages before the RTC of Agoo, Branch 32, against the Ramos and Nepa heirs who held the reconstituted titles.  But the RTC dismissed the action on May 31, 2004 saying that it cannot annul the orders issued by a co-equal court. This, the CA Sixth Division affirmed and held that Baguio Trinity should have availed itself of a petition for annulment under Rule 47.

 

 Baguio Trinity finally filed before the CA an action for annulment of the reconstitution orders on the ground that the RTC did not have jurisdiction to issue them.  It is not right for the CA to dismiss such action by reason of laches simply because no inaction is evident on Baguio Trinity’s part.  In fact, it had been an unintentional object of relay between the lower courts which contributed to the delay in the proceedings. 

 

The petition for annulment alleged serious charges which if true can invalidate respondents’ title. Such title had been subjected to two reconstitution proceedings that could have divested the true owner of title over his property. The conflict between the two sets of titles has to be resolved.  The present standoff cannot remain indefinitely under a titling system that assures the existence of only one valid title for every piece of registered land.  Evidently, laches cannot bar an action sought to relieve such intolerable standoff. 

 

        WHEREFORE, the Court GRANTS the petition and sets aside the Court of Appeals Resolutions dated May 8, 2008 and November 7, 2008 and directs such court to hear and decide the merits of the petition for annulment of judgment.

 

        SO ORDERED.

 

 

ROBERTO A. ABAD

                                                    Associate Justice

 

 

WE CONCUR:

 

 

 

 

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson

 

 

 

 

 

 

 

 

 

      DIOSDADO M. PERALTA       MA. LOURDES P. A. SERENO

                Associate Justice                              Associate Justice

 

 

 

 

ESTELA M. PERLAS-BERNABE

Associate Justice

 

 

 

 

ATTESTATION

 

        I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

 

                                              PRESBITERO J. VELASCO, JR.

                                                     Associate Justice

                                    Chairperson, Third Division               

 

 

 

CERTIFICATION

 

        Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

 

 

                                                   RENATO C. CORONA

                                                    Chief Justice

 

 

 


 


[1][4]  Rules of Civil Procedure, Rule 130, Sec. 7; also in Rule 132, Sec. 24.

* Designated as additional member in lieu of Associate Justice Jose Catral Mendoza, per Raffle dated December 12, 2011.

[2][1]  Under Original Certificate of Title 1082 issued by the Register of Deeds, La Union.

[3][2] Penned by Associate Justice Andres B. Reyes, Jr. with the concurrence of Associate Justices Jose C. Mendoza (now a Member of the Court) and Ramon M. Bato, Jr., CA rollo, pp. 122-131.

[4][3] Penned by Associate Justice Rebecca De Guia-Salvador with the concurrence of Associate Justices Vicente S.E. Veloso and Apolinario D. Bruselas, Jr., rollo, pp. 72-73.

[5][4]  Rules of Civil Procedure, Rule 130, Sec. 7; also in Rule 132, Sec. 24.

RETIRED EMPLOYEE, MUNICIPAL TRIAL COURT, SIBONGA, CEBU VS. MERLYN G. MANUBAG, CLERK OF COURT II, MUNICIPAL TRIAL COURT, SIBONGA, CEBU (A.M. NO. P-10-2833, 14 DECEMBER 2010, PER CURIAM.

X —————————————————————————- X

 

DIGEST:

 

MANUBAG FALSIFIED HER PDS DATED MAY 12, 2008 BY STATING THEREIN THAT SHE WAS A BSC GRADUATE OF COLEGIO DE SAN JOSE RECOLETOS IN 1984 WHEN IN FACT SHE WAS NOT. THE ENTRIES MADE BY MANUBAG WERE BELIED BY DEMETRIO L. QUIRANTE, UNIVERSITY REGISTRAR OF SAN JOSE RECOLETOS, IN A CERTIFICATION STATING THAT THEIR OFFICE DOES NOT HAVE THE ORIGINAL RECORD OF MANUBAG.

WHAT OFFENSE DID MANUBAG COMMIT. WHAT IS THE PENALTY?

MANUBAG COMMITTED DISHONESTY BY MISREPRESENTATION AND FALSIFICATION OF AN OFFICIAL DOCUMENT. PENALTY IS DISMISSAL WITH FOREFEITURE OF RETIREMENT BENEFITS.

X —————————————————————————- X

DOCTRINES:

 

 

 

MAKING INCORRECT ENTRIES IN PERSONAL DATA SHEET (PDS) BY LETTING IT APPEAR THAT ONE FINISHED A 4 YEAR COURSE WHEN IN FACT SHE FINISHED ONLY A TWO YEARS COURSE CONSTITUTED DISHONESTY BY MISREPRESENTATION AND FALSIFICATION OF OFFICIAL DOCUMENT. PENALTY: DISMISSAL WITH FORFEITURE OF ALL RETIREMENT BENEFITS.

The OCA found that the incorrect entries made by Manubag in her Personal Data Sheet (PDS) constituted dishonesty by misrepresentation and falsification of an official document and, thus, recommended that she be dismissed from service, effective immediately, with forfeiture of all retirement benefits.

The Court agrees with the recommendation of the OCA.

WHAT IS DISHONESTY?

Dishonesty means “a disposition to lie, cheat, deceive or defraud; untrustworthiness; lack of integrity, lack of honesty, probity or integrity in principle; lack of fairness and straightforwardness; disposition to defraud, deceive or betray.”[1][4]

It need not be overstressed that the administrative function of clerks of court, like Manubag, is very important for the proper administration of justice. As such, clerks of court must be persons of integrity and honesty. The image of the court of justice is reflected in the conduct, whether official or personal, of its personnel, from the highest to the lowest official. As mentioned in the Court’s Resolution in the case of Bulalat v. Adil:[2][5]

This Court has consistently underscored the heavy burden and responsibility that court personnel are saddled with in view of their exalted positions as keepers of the public faith. No position demands greater moral uprightness from its occupant than a judicial office. Indeed, the responsibilities of a public officer as enshrined in the Constitution are not mere rhetoric to be taken as idealistic sentiments. These are working standards and attainable goals that should be matched with actual deeds.  Because respondent has failed to live up to the stringent standards of his office, we have no other recourse but to sanction him for his despicable conduct.

 

 

DISHONESTY CARRIES EXTREME PENALTY OF DISMISSAL FROM THE SERVICE

Indeed, being in the nature of a grave offense, dishonesty carries the extreme penalty of dismissal from the service with forfeiture of retirement benefits except accrued leave credits and perpetual disqualification for re-employment in the government service.[3][8]

 

          The Court has been explicit. In the case of Ramos v. Mayor:[4][9]

Under Section 52 (A)(1) and (A)(6), Rule IV of the “Uniform Rules on Administrative Cases in the Civil Service” (Resolution No. 99-1936 dated August 31, 1999), respondent’s act of making untruthful declarations in his PDS renders him administratively liable for falsification of public document and dishonesty which are classified as grave offenses and, thus, warrant the corresponding penalty of dismissal from the service even if either of them is respondent’s first offense. Section 58 of Rule IV thereof states that the penalty of dismissal shall carry with it the cancellation of eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the government service, unless otherwise provided in the decision.[5][10]

 

          In Adm. Case for Dishonesty & Falsification Against Luna,[6][11] this Court emphasized that “every employee of the judiciary should be an example of integrity, uprightness and honesty.  Like any public servant, he must exhibit the highest sense of honesty and integrity not only in the performance of his official duties but in his personal and private dealings with other people, to preserve the court’s good name and standing.” Manubag indubitably failed to meet the strict standards set for a court employee, hence, she does not deserve to remain in the judiciary.  

X —————————————————————————- X

 

 

 

 

 

D E C I S I O N

 

Per Curiam:

 

 

At bench is an administrative complaint filed against respondent Merlyn G. Manubag (Manubag), Clerk of Court II of the Municipal Trial Court, Sibonga, Cebu (MTC).  

The case stemmed from the undated Letter-Complaint sent by an anonymous retired employee (complainant) charging her with: (1) Falsification of Public Documents; (2) Immorality; and (3) Gambling during Office Hours.[7][1]

          For Falsification of Public Documents, the complainant alleged that Manubag submitted a fake diploma and falsified her school records to make it appear that she was a graduate of a four-year secretarial course when, in fact, she only finished a two-year course at a certain university in Cebu City. The complainant claimed that Manubag’s appointment was approved because the latter’s backer, a certain Francisca Kong, was the live-in partner of Judge Emilio T. Reyes, then presiding judge of the MTC of Sibonga, Cebu.

          For Immorality, the complainant alleged that while still legally married to a certain Sergio Manubag, who had been giving her monthly support for their minor son, respondent and a certain Boy Alicaya lived together as husband and wife.  They had a son who was registered and baptized with Boy Alicaya as the father.

          For Gambling During Office Hours, the complainant averred that Manubag played mahjong during office hours at the residence of Angelic Dadula-Ortiz in Poblacion, Sibonga, Cebu, every afternoon.  She even told the players that Sibonga MTC Judge Delfin H. Decierdo was not a capable judge.

          In her Comment dated October 24, 2007,[8][2] Manubag denied the charges against her. To belie the allegation that she submitted a falsified diploma or school records to support her appointment, she pointed out that she qualified and passed the Career Service Professional Examination given by the Civil Service Commission (CSC) held in Cebu City on July 31, 1998.  She explained that the CSC required the submission of all pertinent documents, including her school records, which were all scrutinized for authenticity.  Apparently, her requirements were in order, otherwise, she would not have been able to take the examination.

          As regards the charge of immorality, Manubag confirmed that her husband had been providing support for the subsistence of their minor son.  She claimed that the Boy Alicaya mentioned in the complaint was just a family friend, being a barkada of her younger brother, and that it was impossible to have a relationship with him as he had his own family.  She stressed that she has been living with her parents and an unmarried brother in the family compound.

          As to the allegation that she gambled during office hours, she averred that this would be physically impossible, considering that the presiding judge of her court was always in the office during working hours and he was the signatory in her daily time record.  She admitted, however, that after 5:00 o’clock in the afternoon, before going home, she would sometimes pass by the residence of Angelic Dadula-Ortiz and there were occasions when the family members of the latter were playing mahjong.  She remarked that perhaps the complainant saw her within the vicinity of the residence of Angelic Dadula-Ortiz during these occasions and then presumed that she was there during the whole afternoon.

In this Court’s Resolution dated March 11, 2009,[9][3] the administrative complaint was referred to the Executive Judge of the Regional Trial Court, Branch 26, Argao, Cebu (RTC), for investigation, report and recommendation.

          Judge Maximo A. Perez (Judge Perez) of the RTC prepared a Report and recommended that Manubag be found GUILTY of Dishonesty, fined the sum of P10,000.00, reprimanded and warned that a commission of the same or similar offense would be dealt with more severely.         

The Report submitted by Judge Perez was noted and the same was referred to the Office of the Court Administrator (OCA) for evaluation, report and recommendation within sixty (60) days from notice.

In its Memorandum dated February 22, 2010, the OCA made the following recommendations:

(1)       that the administrative complaint be RE-DOCKETED as a regular administrative matter; and

(2)       that respondent Merlyn G. Manubag, Clerk of Court II, Municipal Trial Court, Sibonga, Cebu, be found GUILTY of Dishonesty and DISMISSED from the service, effective immediately, with forfeiture of all retirement benefits. 

The OCA made the following explanation:

In administrative proceedings, the quantum of proof necessary for a finding of guilt is substantial evidence or such relevant evidence as a reasonable mind may accept as adequate to support a conclusion.  Well-entrenched is the rule that substantial proof, and not clear and convincing evidence or proof beyond reasonable doubt, is sufficient as basis for the imposition of any disciplinary action upon the employee.  The standard of substantial evidence is satisfied where the employer, as in this case the Court, has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of trust and confidence demanded by his position (Filoteo v. Calago, A.M. No. P-04-1815, October 18, 2007; Section 5, Rule 133 of the Rules of Court).

            Anent the issue of falsification of public documents, there is substantial evidence to hold the respondent guilty of dishonesty for falsifying an official document.

            Dishonesty is defined as intentionally making a false statement on any material fact, or practicing or attempting to practice any deception or fraud in securing his examination, appointment or registration.  Dishonesty is a serious offense which reflects a persons character and exposes the moral decay which virtually destroys his honor, virtue and integrity.  It is a malevolent act that has no place in the judiciary, as no other office in the government service exacts a greater demand for moral righteousness from an employee than a position in the judiciary (Office of the Court Administrator vs. Bermejo, AM No.  P-2004, March 14, 2008).

            The Court does not tolerate dishonesty.  Persons involved in the dispensation of justice, from the highest official to the lowest clerk, must live up to the strictest standards of integrity, probity, uprightness and diligence in the public service.  As the assumption of public office is impressed with paramount public interest, which requires the highest standards of ethical  standards, persons aspiring for public office must observe honesty, candor and faithful compliance with the law (De Guzman v. delos Santos, A.M. No. 2008-8-SC [18 December 2002]).

            In the instant complaint, the respondent denies having submitted a falsified diploma or school records to support his appointment as Clerk of Court of the Municipal Trial Court of Sibonga, Cebu, but she does not deny possession of the falsified school records.  In fact, in her Personal Data Sheet (PDS), dated May 12, 2008, it is reflected that she is a BSC Graduate of Colegio de San Jose Recoletos in 1984, contrary to the certification of Mr. Demetrio L. Quirante, University Registrar of San Jose Recoletos, that their office does not have the original record of the respondent.  Furthermore, the said registrar certified that the machine copy of the transcript of record of the respondent has the following deficiencies and observations and the same are quoted, as follows: ‘a.  Our exact date of graduation for summer 1984 is May 12 (not May 24) 1984; b,.  We do not have the course Bachelor of Science in Commerce major in Commerce; c.  It seems that the course appearing in the copy of the TOR should have been Bachelor of Science in Commerce major in Accounting.’

            The importance of accomplishing a PDS with utmost honesty cannot be stressed enough (Re:  Anonymous Complaint Against Mr. Rodel M. Gabriel, A.M. No.  2005-18-SC [19 April 2006]).  Its accomplishment is required under the Civil Service Rules and Regulations, and since it is a requirement in connection with employment in the government, the making of an untruthful statement therein is intimately connected with such employment (Administrative Case For Dishonesty and Falsification of Official Document Against Noel V. Luna SC Chief Judicial Staff Officer, AM No.  2003-7-SC [15 December 2003]).

            Indeed, respondent’s act of stating in her PDS that she was a college graduate when the truth is otherwise amounts to dishonesty by misrepresentation and falsification of an official document.

            Under Section 23, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order 292, the Administrative Code of 1987 and other Pertinent Civil Service Laws, dishonesty and falsification of public document are considered grave offenses for which the penalty of dismissal is prescribed even for the first offense.  Section 9 of said Rule likewise provides that the penalty of dismissal shall carry with it cancellation of eligibility, forfeiture of leave credits and retirement benefits, and the disqualification from re-employment in the government service.  This penalty is without prejudice to criminal liability of the respondent (Civil Service Commission v. Sta. Ana, A.M. No. P-03-1696 [30 April 2003]).

            Anent the charges of immorality and gambling during office hours, the evidence on records failed to provide the needed quantum of proof to hold the respondent liable of the said charges.  The record shows bare allegations which are not substantiated by testimonial or documentary evidence.  It is ruled that within the field of administrative law, while strict rules of evidence are not applicable to quasi-judicial proceedings, nevertheless, in adducing evidence constitutive of substantial evidence, the basic rule that mere allegation is not evidence cannot be disregarded (Marcelo v. Court of Appeals, G.R. No.  175201, April 23, 2008). [Underscoring and emphasis supplied]

 

THE COURT’S RULING

          The OCA found that the incorrect entries made by Manubag in her Personal Data Sheet (PDS) constituted dishonesty by misrepresentation and falsification of an official document and, thus, recommended that she be dismissed from service, effective immediately, with forfeiture of all retirement benefits.

The Court agrees with the recommendation of the OCA.

Dishonesty means “a disposition to lie, cheat, deceive or defraud; untrustworthiness; lack of integrity, lack of honesty, probity or integrity in principle; lack of fairness and straightforwardness; disposition to defraud, deceive or betray.”[10][4]

It need not be overstressed that the administrative function of clerks of court, like Manubag, is very important for the proper administration of justice. As such, clerks of court must be persons of integrity and honesty. The image of the court of justice is reflected in the conduct, whether official or personal, of its personnel, from the highest to the lowest official. As mentioned in the Court’s Resolution in the case of Bulalat v. Adil:[11][5]

This Court has consistently underscored the heavy burden and responsibility that court personnel are saddled with in view of their exalted positions as keepers of the public faith. No position demands greater moral uprightness from its occupant than a judicial office. Indeed, the responsibilities of a public officer as enshrined in the Constitution are not mere rhetoric to be taken as idealistic sentiments. These are working standards and attainable goals that should be matched with actual deeds.  Because respondent has failed to live up to the stringent standards of his office, we have no other recourse but to sanction him for his despicable conduct.

In this case, Manubag falsified her PDS dated May 12, 2008 by stating therein that she was a BSC Graduate of Colegio de San Jose Recoletos in 1984 when in fact she was not. The entries made by Manubag were belied by Demetrio L. Quirante, University Registrar of San Jose Recoletos, in a certification stating that their office does not have the original record of Manubag.  He further certified that the machine copy of the transcript of record of Manubag has the following deficiencies as observed and the same are quoted, as follows:

a.     Our exact date of graduation for Summer 1984 is May 12 (not May 24), 1984;

b.  We do not have the course Bachelor of Science in Commerce major in Commerce;

c.    It seems that the course appearing in the copy of the TOR should have been Bachelor of Science in Commerce major in Accounting.[12][6]

It cannot be denied that Manubag, through falsifying an official document, gained undue advantage over qualified applicants to the same position. This Court simply cannot tolerate this as she has deprived a deserving individual. All things being equal, another employee who possesses similar qualifications should have been appointed had it not been for the misrepresentations of Manubag.   

The significance of accomplishing PDS with utmost honesty cannot be overemphasized. It is a requirement under Civil Service Rules and Regulations in connection with one’s employment in the government.  Thus, the making of false statements in completing the PDS is intimately connected with such employment. Making erroneous entries to accomplish the PDS amounts to dishonesty and falsification of an official document. Dishonesty and falsification are considered grave offenses for which the extreme penalty of dismissal from the service of employees found guilty of such offenses is prescribed even for the first offense.[13][7]

Indeed, being in the nature of a grave offense, dishonesty carries the extreme penalty of dismissal from the service with forfeiture of retirement benefits except accrued leave credits and perpetual disqualification for re-employment in the government service.[14][8]

 

          The Court has been explicit. In the case of Ramos v. Mayor:[15][9]

Under Section 52 (A)(1) and (A)(6), Rule IV of the “Uniform Rules on Administrative Cases in the Civil Service” (Resolution No. 99-1936 dated August 31, 1999), respondent’s act of making untruthful declarations in his PDS renders him administratively liable for falsification of public document and dishonesty which are classified as grave offenses and, thus, warrant the corresponding penalty of dismissal from the service even if either of them is respondent’s first offense. Section 58 of Rule IV thereof states that the penalty of dismissal shall carry with it the cancellation of eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the government service, unless otherwise provided in the decision.[16][10]

 

          In Adm. Case for Dishonesty & Falsification Against Luna,[17][11] this Court emphasized that “every employee of the judiciary should be an example of integrity, uprightness and honesty.  Like any public servant, he must exhibit the highest sense of honesty and integrity not only in the performance of his official duties but in his personal and private dealings with other people, to preserve the court’s good name and standing.” Manubag indubitably failed to meet the strict standards set for a court employee, hence, she does not deserve to remain in the judiciary.

WHEREFORE, respondent Merlyn G. Manubag is DISMISSED from the service, with forfeiture of all retirement benefits, except accrued leave credits, and with prejudice to re-employment in any branch, agency or instrumentality of the government including government-owned or controlled corporations.

          SO ORDERED

RENATO C. CORONA

                                                   Chief Justice

ANTONIO T. CARPIO                     CONCHITA CARPIO MORALES

             Associate Justice                                          Associate Justice

 

 

 

 

                     (On leave)

PRESBITERO J. VELASCO, JR.      ANTONIO EDUARDO B. NACHURA

Associate Justice                                       Associate Justice

                                                                                      (On leave)

TERESITA J. LEONARDO-DE CASTRO       ARTURO D. BRION

                           Associate Justice                                     Associate Justice

 

 

 

 

 

 

 

 

 

DIOSDADO M. PERALTA                             LUCAS P. BERSAMIN

Associate Justice                                                Associate Justice

 

 

MARIANO C. DEL CASTILLO                        ROBERTO A. ABAD

               Associate Justice                                           Associate Justice

                                                                                           (No part)

MARTIN S. VILLARAMA, JR.                JOSE PORTUGAL PEREZ

                 Associate Justice                                        Associate Justice

 

 

 

 

 

 

JOSE CATRAL MENDOZA             MARIA LOURDES P.A. SERENO

              Associate Justice                                        Associate Justice

 

                                                           

 


 


[1][4] Bulalat v. Adil, A.M. No. SCC-05-10-P, October 19, 2007, 537 SCRA 44, 48.

[2][5] Id. at 49-50.

[3][8]  Judge Madrid v. Quebral, A.M. Nos. P-03-1744 and P-03-1745, 459 Phil. 306, 318 (2003). 

[4][9]  (Formerly OCA I.P.I No. 04-1879-P), A.M. No. P-05-1998, October 24, 2008, 570 SCRA 22, 30-31.

[5][10]  Supra note  7.

[6][11] A.M. No. 2003-7-SC, 463 Phil. 878, 889 (2003).

[7][1] Rollo, pp. 28-29.

[8][2]  Id. at 19-20.

[9][3] Id. at 32-33.

[10][4] Bulalat v. Adil, A.M. No. SCC-05-10-P, October 19, 2007, 537 SCRA 44, 48.

[11][5] Id. at 49-50.

[12][6] Rollo, p. 10.

[13][7]  Ramos v. Mayor, A.M. No. P-05-1998, October 24, 2008, 570 SCRA 22, 31.

[14][8]  Judge Madrid v. Quebral, A.M. Nos. P-03-1744 and P-03-1745, 459 Phil. 306, 318 (2003). 

[15][9]  (Formerly OCA I.P.I No. 04-1879-P), A.M. No. P-05-1998, October 24, 2008, 570 SCRA 22, 30-31.

[16][10]  Supra note  7.

[17][11] A.M. No. 2003-7-SC, 463 Phil. 878, 889 (2003).