J.A.B. Bulao & Associates

CASE NO. 2011-0074: SLL INTERNATIONAL CABLES SPECIALIST AND SONNY L. LAGON VS. NATIONAL LABOR RELATIONS COMMISSION, 4^TH DIVISION, ROLDAN LOPEZ, EDGARDO ZUÑIGA AND DANILO CAÑETE (G.R. NO. 172161, 2 MARCH 2011, MENDOZA, J.) SUBJECTS: WAGE DIFFERENTIALS; ILLEGAL DISMISSAL. (BRIEF TITLE: SLL INTERNATIONAL VS. NLRC ET AL).

SECOND DIVISION

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D E C I S I O N

MENDOZA, J.:

Assailed in this petition for review on certiorari are the January 11, 2006 Decision^[1]  and the March 31, 2006 Resolution^[2]of the Court of Appeals (CA), in CA-G.R. SP No. 00598 which affirmed with modification the March 31, 2004 Decision^[3] and December 15, 2004 Resolution^[4] of the National Labor Relations Commission (NLRC). The NLRC Decision found the petitioners, SLL International Cables Specialist (SLL) and its manager, Sonny L. Lagon (petitioners), not liable for the illegal dismissal of Roldan Lopez, Danilo Cañete and Edgardo Zuñiga (private respondents) but held them jointly and severally liable for payment of certain monetary claims to said respondents.

A chronicle of the factual antecedents has been succinctly summarized by the CA as follows:

Sometime in 1996, and January 1997, private respondents Roldan Lopez (Lopez for brevity) and Danilo Cañete (Cañete for brevity), and Edgardo Zuñiga (Zuñiga for brevity) respectively, were hired by petitioner Lagon as apprentice or trainee cable/lineman. The three were paid the full minimum wage and other benefits but since they were only trainees, they did not report for work regularly but came in as substitutes to the regular workers or in undertakings that needed extra workers to expedite completion of work. After their training, Zuñiga, Cañete and Lopez were engaged as project employees by the petitioners in their Islacom project in Bohol. Private respondents started on March 15, 1997 until December 1997. Upon the completion of their project, their employment was also terminated. Private respondents received the amount ofP145.00, the minimum prescribed daily wage for Region VII. In July 1997, the amount of P145 was increased to P150.00 by the Regional Wage Board (RWB) and in October of the same year, the latter was increased to P155.00. Sometime in March 1998, Zuñiga and Cañete were engaged again by Lagon as project employees for its PLDT Antipolo, Rizal project, which ended sometime in (sic) the late September 1998. As a consequence, Zuñiga and Cañete’s employment was terminated. For this project, Zuñiga and Cañete received only the wage of P145.00 daily. The minimum prescribed wage for Rizal at that time wasP160.00.

Sometime in late November 1998, private respondents re-applied in the Racitelcom project of Lagon in Bulacan. Zuñiga and Cañete were re-employed. Lopez was also hired for the said specific project. For this, private respondents received the wage of P145.00. Again, after the completion of their project in March 1999, private respondents went home toCebu City.

On May 21, 1999, private respondents for the 4^th time worked with Lagon’s project in Camarin, Caloocan City with Furukawa Corporation as the general contractor. Their contract would expire on February 28, 2000, the period of completion of the project. From May 21, 1997-December 1999, private respondents received the wage of P145.00. At this time, the minimum prescribed rate for Manila was P198.00. In January to February 28, the three received the wage of P165.00. The existing rate at that time was P213.00.

For reasons of delay on the delivery of imported materials from Furukawa Corporation, the Camarin project was not completed on the scheduled date of completion. Face[d] with economic problem[s], Lagon was constrained to cut down the overtime work of its worker[s][,] including private respondents. Thus, when requested by private respondents on February 28, 2000 to work overtime, Lagon refused and told private respondents that if they insist, they would have to go home at their own expense and that they would not be given anymore time nor allowed to stay in the quarters. This prompted private respondents to leave their work and went home to Cebu. On March 3, 2000, private respondents filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13^th month pay for 1997 and 1998 and service incentive leave pay as well as damages and attorney’s fees.

In their answers, petitioners admit employment of private respondents but claimed that the latter were only project employees[,] for their services were merely engaged for a specific project or undertaking and the same were covered by contracts duly signed by private respondents. Petitioners further alleged that the food allowance of P63.00 per day as well as private respondents allowance for lodging house, transportation, electricity, water and snacks allowance should be added to their basic pay. With these, petitioners claimed that private respondents received higher wage rate than that prescribed in Rizal and Manila.

Lastly, petitioners alleged that since the workplaces of private respondents were all in Manila, the complaint should be filed there. Thus, petitioners prayed for the dismissal of the complaint for lack of jurisdiction and utter lack of merit. (Citations omitted.)

On January 18, 2001, Labor Arbiter Reynoso Belarmino (LA) rendered his decision^[5] declaring that his office had jurisdiction to hear and decide the complaint filed by private respondents. Referring to Rule IV, Sec. 1 (a) of the NLRC Rules of Procedure prevailing at that time,^[6] the LA ruled that it had jurisdiction because the “workplace,”  as defined in the said rule, included the place where the employee was supposed to report back after a temporary detail, assignment or travel, which in this case was Cebu.

As to the status of their employment, the LA opined that private respondents were regular employees because they were repeatedly hired by petitioners and they performed activities which were usual, necessary and desirable in the business or trade of the employer.

With regard to the underpayment of wages, the LA found that private respondents were underpaid. It ruled that the free board and lodging, electricity, water, and food enjoyed by them could not be included in the computation of their wages because these were given without their written consent.

The LA, however, found that petitioners were not liable for illegal dismissal.  The LA viewed private respondents’ act of going home as an act of indifference when petitioners decided to prohibit overtime work.^[7]

In its March 31, 2004 Decision, the NLRC affirmed the findings of the LA. In addition, the NLRC noted that not a single report of project completion was filed with the nearest Public Employment Office as required 
by the Department of Labor and Employment (DOLE) Department Order No. 19, Series of 1993.^[8]  The NLRC later denied^[9] the motion for reconsideration^[10] subsequently filed by petitioners.

When the matter was elevated to the CA on a petition for certiorari, it affirmed the findings that the private respondents were regular employees. It considered the fact that they performed functions which were the regular and usual business of petitioners. According to the CA, they were clearly members of a work pool from which petitioners drew their project employees.

The CA also stated that the failure of petitioners to comply with the simple but compulsory requirement to submit a report of termination to the nearest Public Employment Office every time private respondents’ employment was terminated was proof that the latter were not project employees but regular employees.

The CA likewise found that the private respondents were underpaid. It ruled that the board and lodging, electricity, water, and food enjoyed by the private respondents could not be included in the computation of their wages because these were given without their written consent. The CA added that the private respondents were entitled to 13^th month pay.

The CA also agreed with the NLRC that there was no illegal dismissal. The CA opined that it was the petitioners’ prerogative to grant or deny any request for overtime work and that the private respondents’ act of leaving the workplace after their request was denied was an act of abandonment.

In modifying the decision of the labor tribunal, however, the CA noted that respondent Roldan Lopez did not work in the Antipolo project and, thus, was not entitled to wage differentials.  Also, in computing the differentials for the period January and February 2000, the CA disagreed in the award of differentials based on the minimum daily wage of P223.00, as the prevailing minimum daily wage then was only P213.00. Petitioners sought reconsideration but the CA denied it in its March 31, 2006Resolution.^[11]

In this petition for review on certiorari,^[12] petitioners seek the reversal and setting aside of the CA decision anchored on this lone:

GROUND/

ASSIGNMENT OF ERROR

THE PUBLIC RESPONDENT NLRC COMMITTED A SERIOUS ERROR IN LAW IN AWARDING WAGE DIFFERENTIALS TO THE PRIVATE COMPLAINANTS ON THE BASES OF MERE TECHNICALITIES, THAT IS, FOR LACK OF WRITTEN CONFORMITY x x x AND LACK OF NOTICE TO THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE)[,] AND THUS, THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING WITH MODIFICATION THE NLRC DECISION IN THE LIGHT OF THE RULING IN THE CASE OF JENNY M. AGABON and VIRGILIO AGABON vs, NLRC, ET AL., GR NO. 158963, NOVEMBER 17, 2004, 442 SCRA 573, [AND SUBSEQUENTLY IN THE CASE OF GLAXO WELLCOME PHILIPPINES,  INC.  VS.   NAGAKAKAISANG  EMPLEYADO  NG 
WELLCOME-DFA (NEW –DFA), ET AL., GR NO. 149349, 11 MARCH 2005], WHICH FINDS APPLICATION IN THE INSTANT CASE BY ANALOGY.^[13]

Petitioners reiterated their position that the value of the facilities that the private respondents enjoyed should be included in the computation of the “wages” received by them. They argued that the rulings in Agabon v. NLRC^[14]and Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado Ng Wellcome-DFA^[15] should be applied by analogy, in the sense that the lack of written acceptance of the employees of the facilities enjoyed by them should not mean that the value of the facilities could not be included in the computation of the private respondents’ “wages.”

On November 29, 2006, the Court resolved to issue a Temporary Restraining Order (TRO) enjoining the public respondent from enforcing the NLRC and CA decisions until further orders from the Court.

After a thorough review of the records, however, the Court finds no merit in the petition.

This petition generally involves factual issues, such as, whether or not there is evidence on record to support the findings of the LA, the NLRC and the CA that private respondents were project or regular employees and that their salary differentials had been paid. This calls for a re-examination of the evidence, which the Court cannot entertain. Settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.  It is not the Court’s function  to assess and  evaluate  the  evidence

all over again, particularly where the findings of both the Labor tribunals and the CA concur. ^[16]

As a general rule, on payment of wages, a party who alleges payment as a defense has the burden of proving it.^[17]Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in the possession of the worker but in the custody and absolute control of the employer.^[18]

In this case, petitioners, aside from bare allegations that private respondents received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of payment.  Thus, petitioners utterly failed to discharge the onus probandi.

Private respondents, on the other hand, are entitled to be paid            the  minimum  wage,  whether  they  are  regular  or non-regular employees. 
Section 3, Rule VII of the Rules to Implement the Labor Code^[19] specifically enumerates those who are not covered by the payment of minimum wage. Project employees are not among them.

On whether the value of the facilities should be included in the computation of the “wages” received by private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less that 30% of the fair and reasonable value of such facilities. In such cases, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the latter, provided that such deduction is with the written authorization of the employees concerned.

Moreover, before the value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value.^[20]Mere availment is not sufficient to allow deductions from employees’ wages.^[21]

These requirements, however, have not been met in this case. SLL failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employee’s salaries. It also failed to provide proof of the employees’ written authorization, much less show how they arrived at their valuations.  At any rate, it is not even clear whether private respondents actually enjoyed said facilities.

         The Court, at this point, makes a distinction between “facilities” and “supplements.”  It is of the view that the food and lodging, or the electricity and water allegedly consumed by private respondents in this case were not facilities but supplements. In the case of Atok-Big Wedge Assn. v. Atok-Big Wedge Co.,^[22] the two terms were distinguished from one another in this wise:

“Supplements,” therefore, constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. “Facilities,” on the other hand, are items of expense necessary for the laborer’s and his family’s existence and subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.

In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers’ basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given.^[23]  In the case at bench, the items provided were given freely by SLL  for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects.

For said reason, the cases of Agabon and Glaxo are inapplicable in this case.  At any rate, these were cases of dismissal with just and authorized causes. The present case involves the matter of the failure of the petitioners to comply with the payment of the prescribed minimum wage.

The Court sustains the deletion of the award of differentials with respect to respondent Roldan Lopez. As correctly pointed out by the CA, he did not work for the project in Antipolo.

WHEREFORE, the petition is DENIED.  The temporary restraining order issued by the Court on November 29, 2006 is deemed, as it is hereby ordered, DISSOLVED.

SO ORDERED.

JOSE CATRAL MENDOZA

                                                                            Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

PRESBITERO J. VELASCO, JR.                MARIANO C. DEL CASTILLO  

                 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

^*  Designated as additional member in lieu of Associate Justice Antonio Eduardo B. Nachura per Special Order No. 933 dated January 24, 2011.

^**  Designated as additional member in lieu of Associate Justice Diosdado M. Peralta per Special Order No. 954 dated February 21, 2011.

^[1]  Rollo, pp. 48-60. Penned by Associate Justice Vicente L. Yap and concurred in by Associate Justice Arsenio J. Magpale and Associate Justice Apolinario D. Bruselas, Jr.

^[2]   Id. at 62-63.

^[3] Id. at 155-164.

^[4] Id. at 171-172.

^[5] Id. at 123-134.

^[6] Section 1. Venue. — (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complaint/petitioner.

For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to, their employers.

^[7] Rollo, p. 130.

^[8]  2.2     Indicators of project employment. – Either one or more of the following circumstances, among other, may be considered as indicators that an employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees’ terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies.

^[9]   Rollo, pp. 171-172.

^[10] Id. at 165-170.

^[11] Id. at 62-63.

^[12] Id. at 10-172.

^[13] Id. at 22.

^[14] 485 Phil. 248 (2004).

^[15] 493 Phil.410 (2005).

^[16] Stamford Marketing Corp. v. Julian, 468 Phil 34 (2004).

^[17] Far East Bank and Trust Company v. Querimit, 424 Phil. 721 (2002);  Sevillana v. I.T. (International) Corp., 408 Phil. 570 (2001); Villar v. National Labor Relations Commission,387 Phil. 706 (2000);  Audion Electric Co, Inc. v. NLRC, 367 Phil. 620 (1999);  Ropali Trading Corporation v. National Labor Relations Commission, 357 Phil. 314 (1998); National Semiconductor (HK) Distribution, Ltd. v. National Labor Relations Commission (4^th Division), 353 Phil. 551 (1998); Pacific Maritime Services, Inc. v. Ranay, 341 Phil. 716 (1997); Jimenez v. National Labor Relations Commission, 326 Phil. 89 (1996);  Philippine National Bank v. Court of Appeals, 326 Phil. 46 (1996); Good Earth Emporium, Inc. v. Court of Appeals, G.R. No. 82797, February 27, 1991, 194 SCRA 544, 552; Villaflor v. Court of Appeals, G.R. No. 46210, December 26, 1990, 192 SCRA 680, 690; Biala v. Court of Appeals, G.R. No. 43503, October 31, 1990, 191 SCRA 50, 59;  Servicewide Specialists, Inc. v. Intermediate Appellate Court, 255 Phil. 787 (1989).

^[18] Dansart Security Force & Allied Services Company v. Bagoy, G.R. No.  168495, July 2, 2010; G & M Philippines, Inc. v. Cruz, 496 Phil. 119 (2005); Villar v. National Labor Relations Commission, 387 Phil. 706.

^[19] Sec. 3. Coverage. – This Rule shall not apply to the following persons:

(a)                 Household or domestic helpers, including family drivers and persons in the personal service of another;

(b)            Homeworkers who are engaged in needlework;

(c)                 Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority in accordance with R.A. 3470, provided that such workers perform the work in their respective homes;

(d)                Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the Secretary of Labor; Provided, however, That such recommendation shall be given only for the purpose of making the cooperative viable and upon finding and certification of said Bureau, supported by adequate proof, that the cooperative cannot resort to other remedial measures without serious loss or prejudice to its operation except through its exemption from the requirements of this Rule. The exemption shall be subject to such terms and conditions and for such period of time as the Secretary of Labor may prescribe.

^[20] Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, 492 Phil. 892 (2005); Mabeza v. NLRC, 338 Phil. 386 (1997).

^[21] Mayon Hotel & Restaurant v. Adana, supra.

^[22] 97 Phil. 294 (1955).

^[23] States Marine Corporation and Royal Line, Inc. v. Cebu Seamen’s Association, Inc., 117 Phil. 307 (1963).

CASE NO. 2011-0073: SOUTH PACIFIC SUGAR CORPORATION AND SOUTH EAST ASIA SUGAR MILL CORPORATION VS. COURT OF APPEALS AND SUGAR REGULATORY ADMINISTRATION (G.R. NO. 180462, 9 FEBRAURY 2011, CARPIO, J.)  SUBJECTS: DEPUTIZATION OF COUNSEL BY OSG; CONVERSION FEE BID; RTC CANT DEPART FROM PLAIN AND EXPRESS LANGUAGE. (BRIEF TITLE: SOUTH PACIFIC SUGAR ET AL VS. CA ET AL).

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -x

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review on certiorari¹ of the 6 November 2007 Decision² of the Court of Appeals in CA-G.R. SP No. 100571, which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders³ as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236.

The Facts

In 1999, the government projected a shortage of some 500,000 metric tons of sugar due to the effects of El Niño and La Niña phenomena. To fill the expected shortage and to ensure stable sugar prices, then President Joseph Ejercito Estrada issued Executive Order No. 87, Series of 1999 (EO 87),⁴ facilitating sugar importation by the private sector.

Section 2 of EO 87 created a Committee on Sugar Conversion/Auction to determine procedures for sugar importation as well as for collection and remittance of conversion fee.

Under Section 3 of EO 87, sugar conversion is by auction and is subject to conversion fee to be remitted by respondent Sugar Regulatory Administration (SRA) to the Bureau of Treasury.

On 3 May 1999, the Committee on Sugar Conversion/Auction issued the Bidding Rules providing guidelines for sugar importation. Under the Bidding Rules, the importer pays 25% of the conversion fee within three working days from receipt of notice of the bid award and the 75% balance upon arrival of the imported sugar.

The Bidding Rules also provide that if the importer fails to make the importation or if the imported sugar fails to arrive on or before the set arrival date, 25% of the conversion fee is forfeited in favor of the SRA, to wit:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the Philippines on or before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor of the SRA and the imported sugar shall not be classified as “B” (domestic sugar) unless, upon application with the SRA and without objection of the Committee, the SRA allows such conversion after payment by the importer of 100% of the Conversion Fee applicable to the shipment.⁵ (Emphasis supplied)

The SRA forthwith authorized the importation of 300,000 metric tons of sugar, to be made in three tranches, as follows:

Tranche Volume Arrival Date

1^st 100,000MT 15 May-15 June 1999

2^nd 100,000MT 15 June-July 15 1999

3^rd 100,000MT 15 July-15 August 1999⁶

The Committee on Sugar Conversion/Auction caused the publication of the invitation to bid. Several sugar importers submitted sealed bid tenders. Petitioners Southeast Asia Sugar Mill Corporation (Sugar Mill) and South Pacific Sugar Corporation (Pacific Sugar) emerged as winning bidders for the 1^st, 2^nd, and 3^rd tranches.

For the 3^rd tranche, Sugar Mill submitted the winning bid of P286.80 per 50 kilogram for 10,000 metric tons of sugar, while Pacific Sugar submitted the winning bid of P285.99 per 50 kilogram for 20,000 metric tons of sugar, for a combined total volume of 30,000 metric tons of sugar.

Pursuant to the Bidding Rules, Sugar Mill paid 25% of the conversion fee amounting to P14,340,000.00, while Pacific Sugar paid 25% of the conversion fee amounting to P28,599,000.00.

As it turned out, Sugar Mill and Pacific Sugar (sugar corporations) delivered only 10% of their sugar import allocation, or a total of only 3,000 metric tons of sugar. They requested the SRA to cancel the remaining 27,000 metric tons of sugar import allocation blaming sharp decline in sugar prices. The sugar corporations sought immediate reimbursement of the corresponding 25% of the conversion fee amounting to P38,637,000.00.

The SRA informed the sugar corporations that the conversion fee would be forfeited pursuant to paragraph G.1 of the Bidding Rules. The SRA also notified the sugar corporations that the authority to reconsider their request for reimbursement was vested with the Committee on Sugar Conversion/Auction.

On 26 February 2002, the sugar corporations filed a complaint for breach of contract and damages in the Regional Trial Court (Branch 77) of Quezon City, docketed as Civil Case No. Q-02-46236.

In its notice of appearance,⁷ the Office of the Solicitor General (OSG) deputized Atty. Raul Labay of the SRA’s legal department to assist the OSG in this case, thus:

Please be informed that Atty. Raul M. Labay has been authorized to appear in this case, and therefore, should also be furnished with notices of hearings, orders, resolutions, decisions, and other processes. However, as the Solicitor General retains supervision and control of the representation in this case and has to approve withdrawal of the case, non-appeal, or other actions which appear to compromise the interests of the Government, only notices of orders, resolutions, and decisions served on him will bind the party represented.⁸

The Ruling of the RTC

The RTC held that paragraph G.1 of the Bidding Rules contemplated delay in the arrival of imported sugar, not cancellation of sugar importation. It concluded that the forfeiture provision did not apply to the sugar corporations which merely cancelled the sugar importation. In its 19 December 2006 Decision,⁹ the RTC ruled, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, ORDERING the defendant Sugar Regulatory Administration to pay plaintiffs the amount of P38,637,000.00 as reimbursement of 25% of the conversion fee they paid in 1999. The claim for legal interests, compensatory damages, exemplary damages, and attorney’s fees is hereby DENIED.

SO ORDERED.¹⁰

On 5 January 2007, the OSG received its copy of the RTC Decision.¹¹ On 24 January 2007, the deputized SRA counsel, Atty. RaulLabay, received his own copy of the Decision and filed a notice of appeal on 7 February 2007.¹²

The sugar corporations moved to expunge the notice of appeal on the ground that only the OSG, as the principal counsel, can decide whether an appeal should be made. The sugar corporations stressed that a lawyer deputized by the OSG has no authority to decide whether an appeal should be made.

The OSG filed its opposition¹³ to the motion to expunge the notice of appeal. The OSG pointed out that in its notice of appearance,¹⁴ it authorized SRA counsel Atty. Labay to assist the OSG in this case.

In its 26 June 2007 Order, the RTC granted the motion to expunge the notice of appeal. The OSG moved for reconsideration stressing that the OSG ratified Atty. Labay’s filing of a notice of appeal. The RTC, in its 6 August 2007 Order, denied the OSG’s motion for reconsideration.

In its 31 August 2007 Order, the RTC granted the sugar corporations’ motion for execution, to wit:

WHEREFORE, premises considered, the plaintiffs’ motion for execution is hereby granted. Accordingly, issue a writ of execution for the enforcement of the decision rendered in this case.

SO ORDERED.¹⁵

Accordingly, the RTC issued on 6 September 2007 a Writ of Execution and on 12 September 2007 an Amended Writ of Execution.

Aggrieved, the SRA filed in the Court of Appeals a petition for certiorari under Rule 65 seeking to set aside the RTC’s 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution.

The Ruling of the Court of Appeals

The Court of Appeals held that the deputized SRA counsel had authority to file a notice of appeal. The appellate court thus directed the RTC to give due course to the appeal that Atty. Labay timely filed. The decretal part of its 6 November 2007 Decision reads:

WHEREFORE, premises considered, the present petition is hereby GIVEN DUE COURSE and the writ prayed for accordingly GRANTED. The Orders dated June 26, 2007, August 6, 2007, and August 31, 2007, as well as the Writ of Execution dated September 6, 2007 and Amended Writ of Execution dated September 12, 2007 issued in Civil Case No. Q-02-46236 of the Regional Trial Court of Quezon City, Branch 77 are hereby all ANNULLED and SET ASIDE. Said court is hereby DIRECTED to GIVE DUE COURSE to the Notice of Appeal dated February 7, 2007 filed by Atty. Raul M. Labay in behalf of petitioner Sugar Regulatory Administration.

No pronouncement as to costs.

SO ORDERED.¹⁶

Dissatisfied with the decision of the Court of Appeals, the sugar corporations filed in this Court a petition for review on certiorari.

The Issues

The issues are (1) whether a deputized SRA counsel may file a notice of appeal and (2) whether the sugar corporations are entitled to reimbursement of P38,637,000.00 in conversion fee.

The Court’s Ruling

The petition lacks merit.

The sugar corporations contend that the deputized SRA counsel, Atty. Labay, was not authorized to file a notice of appeal; that the OSG, as the principal counsel, had the sole authority to file a notice of appeal; that certiorari may not be interposed as a substitute for the lost remedy of appeal; and that the subject conversion fee amounting to P38,637,000.00 remained as private funds in view of its summary forfeiture and as such, it could not be deemed part of public funds.

The OSG counters that assuming Atty. Labay had no authority to file the notice of appeal, the defect was cured when the OSG subsequently filed its opposition to the sugar corporations’ motion to expunge the notice of appeal. The OSG claims that if the denial of the appeal is sustained, the SRA would no longer have a remedy to assail the RTC decision adjudging it liable to reimburse the sugar corporations P38,637,000.00 in conversion fee despite the admitted failure of the sugar corporations to comply with their contractual undertaking to import sugar.

The deputized SRA counsel may file a notice of appeal.

Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987¹⁷ authorizes the OSG to represent the SRA, a government agency established pursuant to Executive Order No. 18, Series of 1986,¹⁸ in any litigation, proceeding, investigation, or matter requiring the services of lawyers. It provides:

SEC. 35. Powers and Functions. – The Office of the Solicitor General shall represent the Government of the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter requiring the services of lawyers. When authorized by the President or head of the office concerned, it shall also represent government owned or controlled corporations. The Office of the Solicitor General shall constitute the law office of the Government and, as such, shall discharge duties requiring the services of lawyers. (Emphasis supplied)

The OSG is empowered to deputize legal officers of government departments, bureaus, agencies, and offices in cases involving their respective offices. Paragraph 8 of the same section reads:

(8) Deputize legal officers of government departments, bureaus, agencies, and offices to assist the Solicitor General and appear or represent the Government in cases involving their respective offices, brought before the courts and exercise supervision and control over such legal officers with respect to such cases. (Emphasis supplied)

In National Power Corporation v. Vine Development Corporation,¹⁹ this Court ruled that the deputization by the OSG of NAPOCOR counsels in cases involving the NAPOCOR included the authority to file a notice of appeal. The Court explained that the OSG could have withdrawn the appeal if it believed that the appeal would not advance the government’s cause. The Court held that even if the deputized NAPOCOR counsel had no authority to file a notice of appeal, the defect was cured by the OSG’s subsequent manifestation that the deputized NAPOCOR counsel had authority to file a notice of appeal.

The sugar corporations’ reliance on another NAPOCOR case, National Power Corporation v. NLRC,²⁰ is misplaced. There, service of the decision was never made on the OSG, the principal counsel for NAPOCOR. Only the deputized NAPOCOR counsel was served a copy of the decision. Hence, the Court held that the period to appeal the decision did not commence to run. The Court explained that service of the decision on the deputized NAPOCOR counsel was insufficient and not binding on the OSG. This was why the Court stated in that case that the deputized NAPOCOR counsel had no authority to decide whether an appeal should be made.

Noteworthy, in National Power Corporation v. Vine Development Corporation, both the OSG and the deputized NAPOCOR counsel were served copies of the decision subject of the appeal. In National Power Corporation v. NLRC, only the deputized NAPOCOR counsel was furnished a copy of the appealed decision. Hence, the differing rulings by this Court.

In the present case, records show that both the OSG and the deputized SRA counsel were served copies of the RTC decision subject of the appeal. Thus, what applies is National Power Corporation v. Vine Development Corporation. Applying here the doctrine laid down in the said case, deputized SRA counsel Atty. Labay is, without a doubt, authorized to file a notice of appeal.

Assuming Atty. Labay had no authority to file a notice of appeal, such defect was cured when the OSG subsequently filed its opposition to the motion to expunge the notice of appeal. As the OSG explained, its reservation²¹ to “approve the withdrawal of the case, the non-appeal, or other actions which appear to compromise the interest of the government” was meant to protect the interest of the government in case the deputized SRA counsel acted in any manner prejudicial to government. Obviously, what required the approval of the OSG was the non-appeal, not the appeal, of a decision adverse to government.

We hold that the RTC should have given due course to the notice of appeal that Atty. Labay timely filed. Thus, the 19 December 2006 Decision of the RTC in Civil Case No. Q-02-46236 cannot be deemed to have attained finality.

The next logical step is to remand the case to the RTC. However, a remand would only delay the resolution of this case and frustrate the ends of justice. As a rule, remand is avoided in the following instances: (a) where the ends of justice would not be served; (b) where public interest demands an early disposition of the case; or (c) where the trial court already received all the evidence presented by both parties, and the Supreme Court is in a position, based upon said evidence, to decide the case on its merits.²² All three conditions are present here.

The sugar corporations are not entitled to reimbursement

of 25% of the conversion fee amounting to P38,637,000.00.

Section 2 of EO 87 granted the Committee on Sugar Conversion/Auction power to promulgate rules governing sugar importation by the private sector. It provides:

SEC. 2. Committee on Sugar Conversion/Auction. – There is hereby created a Committee on Sugar Conversion/Auction which shall be headed by the DA, with the following as members: NEDA, DTI, DOF, SRA, and a representative each from the sugar planters’ group and the sugar millers’ group. The Committee is hereby authorized to determine the parameters and procedures on the importation of sugar by the private sector, and the collection and remittance of the fee for the conversion of sugar from “C” (reserve sugar) to “B” (domestic sugar). (Emphasis supplied)

Pursuant to this authority, the Committee issued the Bidding Rules subject of the controversy, paragraph G.1 of which provides that if the importer fails to make the importation, 25% of the conversion fee shall be forfeited in favor of the SRA, thus:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the Philippines on or before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor of the SRA and the imported sugar shall not be classified as “B” (domestic sugar) unless, upon application with the SRA and without objection of the Committee, the SRA allows such conversion after payment by the importer of 100% of the Conversion Fee applicable to the shipment.²³ (Emphasis supplied)

In joining the bid for sugar importation, the sugar corporations are deemed to have assented to the Bidding Rules, including the forfeiture provision under paragraph G.1. The Bidding Rules bind the sugar corporations. The latter cannot rely on the lame excuse that they are not aware of the forfeiture provision.

At the trial, Teresita Tan testified that the Bidding Rules were duly published in a newspaper of general circulation.²⁴ Vicente Cenzon, a sugar importer who participated in the bidding for the 3^rd tranche, testified that he attended the pre-bid conference where the Bidding Rules were discussed and copies of the same were distributed to all the bidders.²⁵

On the other hand, all that the sugar corporations managed to come up with was the self-serving testimony of its witness, DanielFajardo, that the sugar corporations were not informed of the forfeiture provision in the Bidding Rules.²⁶

The Bidding Rules passed through a consultative process actively participated by various government agencies and their counterpart in the private sector: the Department of Agriculture, the National Economic Development Authority, the Department of Trade and Industry, the Department of Finance, the Sugar Regulatory Administration, and a representative each from the sugar planters’ group and the sugar millers’ group.²⁷

We find nothing in the forfeiture provision of the Bidding Rules that is contrary to law, morals, good customs, public order, or public policy. On the contrary, the forfeiture provision fully supports government efforts to aid the country’s ailing sugar industry. Conversion fees, including those that are forfeited under paragraph G.1 of the Bidding Rules, are automatically remitted to the Bureau of Treasury and go directly to the Agricultural Competitiveness Enhancement Fund.²⁸

It is unrefuted that the sugar corporations failed in their contractual undertaking to import the remaining 27,000 metric tons of sugar specified in their sugar import allocation. Applying paragraph G.1 of the Bidding Rules, such failure is subject to forfeiture of the 25% of the conversion fee the sugar corporations paid as part of their contractual undertaking.

The RTC gravely erred in ordering the SRA to return the forfeited conversion fee to the sugar corporations. Its strained interpretation that paragraph G.1 of the Bidding Rules contemplates cases of delay in the arrival of imported sugar but not cases of cancellation of sugar importation defies logic and the express provision of paragraph G.1. If delay in the arrival of imported sugar is subject to forfeiture of 25% of the conversion fee, with more reason is outright failure to import sugar, by cancelling the sugar importation altogether, subject to forfeiture of the 25% of the conversion fee.

Plainly and expressly, paragraph G.1 identifies two situations which would bring about the forfeiture of 25% of the conversion fee: (1)when the importer fails to make the importation or (2) when the imported sugar fails to arrive in the Philippines on or before the set arrival date. It is wrong for the RTC to interpret the forfeiture provision in a way departing from its plain and express language.

Where the language of a rule is clear, it is the duty of the court to enforce it according to the plain meaning of the word. There is no occasion to resort to other means of interpretation.²⁹

WHEREFORE, we DENY the petition. We AFFIRM the 6 November 2007 Decision of the Court of Appeals in CA-G.R. SP No. 100571, which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236. Further, the 19 December 2006 Decision of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236 is SET ASIDE.

Costs against petitioners.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

ANTONIO EDUARDO B. NACHURA

Associate Justice

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE C. MENDOZA

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.

ANTONIO T. CARPIO

Associate Justice

Chairperson

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 Under Rule 45 of the Rules of Court.

2 Rollo, pp. 49-66. Penned by then Associate Justice Martin S. Villarama, Jr., now a Member of this Court, with Associate Justices Noel G. Tijam and Sesinando E. Villon, concurring.

3 Id. at 102-103, 104-105, and 106.

4 Effective 1 April 1999.

5 Rollo, p. 50.

6 Id. at 68.

7 Id. at 110-111. Dated 17 March 2003.

8 Id. at 110.

9 Id. at 67-76.

10 Id. at 76.

11 Id. at 91.

12 Id. at 52.

13 Id. at 93-100.

14 Id. at 95.

15 Id. at 106.

16 Id. at 65-66.

17 Otherwise known as Executive Order No. 292.

18 Creating a Sugar Regulatory Administration. Effective 28 May 1986.

19 394 Phil. 76 (2000).

20 339 Phil. 89 (1997).

21 In its Notice of Appearance dated 17 March 2003.

22 Dela Peña v. Court of Appeals, G.R. No. 177828, 13 February 2009, 579 SCRA 396.

23 Rollo, p. 50.

24 Id. at 73.

25 Id. at 71.

26 Id. at 73.

27 Section 2, EO 87.

SEC. 2. Committee on Sugar Conversion/Auction. – There is hereby created a Committee on Sugar Conversion/Auction which shall be headed by the DA, with the following as members: NEDA, DTI, DOF, SRA, and representative each from the sugar planters’ group and the sugar millers’ group. The Committee is hereby authorized to determine the parameters and procedures on the importation of sugar by the private sector, and the collection and remittance of the fee for the conversion of sugar from “C” to “B”.

28 Section 3, EO 87.

SEC. 3. Conduct of Auction for Sugar Conversion. – x x x The “Conversion Fee” shall be remitted to the Bureau of Treasury and may be used to pay the arrears of government in the Agricultural Competitiveness Enhancement Fund.

29 Del Mar v. PAGCOR, 411 Phil. 430 (2001).