J.A.B. Bulao & Associates

CASE NO. 2011-0094: ERLINDA R. TAROG VS. ATTY. ROMULO  L. RICAFORT (A.C. No. 8253, 15 MARCH 2011) SUBJECT: DISBARMENT. (BRIEF TITLE: TAROG VS. ATTY. RICAFORT).

Republic of the Philippines

Supreme Court

Manila

EN BANC

x————————————————————————————-x

D E C I S I O N

PER CURIAM:

We resolve a complaint for disbarment for alleged grave misconduct brought against Atty. Romulo L. Ricafort for his failure to account for and to return the sums of money received from his clients for purposes of the civil action to recover their property from a foreclosing banking institution he was handling for them. The original complainant was Arnulfo A. Tarog, but his wife, Erlinda R. Tarog, substituted him upon his intervening death.

Antecedents

In 1992, the Tarogs sought the advice of Atty. Jaime L. Miralles regarding their bank-foreclosed property located in the Bicol Region. Atty. Miralles advised them to engage a Bicol-based attorney for that purpose. Thus, they went to see Atty. Ricafort accompanied by Vidal Miralles, their friend who was a brother of Atty. Miralles.^[1] They ultimately engaged Atty. Ricafort as their attorney on account of his being well-known in the community, and being also the Dean of the College of Law of Aquinas University where their son was then studying.

Having willingly accepted the engagement, Atty. Ricafort required the Tarogs to pay P7,000.00 as filing fee, which they gave to him.^[2] He explained the importance of depositing P65,000.00 in court to counter the P60,000.00 deposited by Antonio Tee, the buyer of the foreclosed property. After they informed him that they had only P60,000.00, he required them to add some more amount (dagdagan niyo ng konti).^[3] To raise the P65,000.00 for the Tarogs, therefore, Vidal solicited a loan from one Sia with the guarantee of his brother Atty. Miralles. Sia issued a check in that amount in the name of Arnulfo.^[4]

On November 7, 1992, the Tarogs and Vidal went to the office of Atty. Ricafort to deliver the P65,000.00. When Arnulfo said that he had first to encash the check at the bank, Atty. Ricafort persuaded him to entrust the check to him instead so that he (Atty. Ricafort) would be the one to encash it and then deposit the amount in court. On that representation, Arnulfo handed the check to Atty. Ricafort.^[5]

After some time, the Tarogs visited Atty. Ricafort to verify the status of the consignation. Atty. Ricafort informed them that he had not deposited the amount in court, but in his own account. He promised to return the money, plus interest. Despite several inquiries about when the amount would be returned, however, the Tarogs received mere assurances from Atty. Ricafort that the money was in good hands.

The Tarogs further claimed that the Regional Trial Court, Branch 52, in Sorsogon (RTC), where their complaint for annulment of sale was being heard, had required the parties to file their memoranda. Accordingly, they delivered  P15,000.00 to Atty. Ricafort for that purpose, but he did not file the memorandum.^[6]

When it became apparent to the Tarogs that Atty. Ricafort would not make good his promise of returning the P65,000.00, plus interest, Arnulfo demanded by his letter dated December 3, 2002 that Atty. Ricafort return the  P65,000.00, plus interest, and theP15,000.00 paid for the filing of the memorandum.^[7] Yet, they did not receive any reply from Atty. Ricafort.

In his defense, Atty. Ricafort denied that the P65,000.00 was intended to be deposited in court, insisting that the amount was payment for his legal services under a “package deal,” that is, the amount included his acceptance fee, attorney’s fee, and appearance fees from the filing of the complaint for annulment of sale until judgment, but excluding appeal. He claimed that the fees were agreed upon after considering the value of the property, his skill and experience as a lawyer, the labor, time, and trouble involved, and his professional character and social standing; that at the time he delivered the check, Arnulfo read, understood, and agreed to the contents of the complaint, which did not mention anything about any consignation;^[8] and that Arnulfo, being a retired school principal, was a learned person who would not have easily fallen for any scheme like the one they depicted against him.

Findings of the IBP Commissioner

Following his investigation, Commissioner Wilfredo E.J.E. Reyes of the Integrated Bar of the Philippines-Commission on Bar Discipline rendered his Report and Recommendation dated October 7, 2004,^[9] in which he concluded that:

It is respectfully recommended that respondent, Atty. Romulo L. Ricafort be DISBARRED and be ordered to return the amount of P65,000 and P15,000 which he got from his client.

RESPECTFULLY SUBMITTED.

Commissioner Reyes regarded the testimonies of Erlinda and Vidal more credible than the testimony of Atty. Ricafort, observing:

Based on the said testimony, statements and actuations of complainant Erlinda Tarog and his collaborating witness, we find their statements to be credible.

Atty. Ricafort in his testimony attempted to show that the amount of P65,000.00 was paid to him by the complainant as acceptance fee on a package deal basis and under said deal, he will answer the filing fee, attorney’s fees and other expenses incurred up to the time the judgment is rendered.  He presented a transcript of stenographic notes wherein it was stated that complainant himself did not consign the money in court.  The respondent admitted in his testimony that he did not have any retainer agreement nor any memorandum signed or any receipt which would prove that the amount of P65,000.00 was received as an acceptance fee for the handling of the case.

Atty. Romulo Ricafort stated that there was no retainer agreement and that he issued only receipt because the late Arnulfo Tarog will not pay unless a receipt is issued.

The Undersigned Commissioner asked the respondent “Basically you describe that thing that will happen in the litigation related to the payment of fees.  But when you received that P65,000.00 did you not put anything there that you will describe the nature of legal work which you will undertake considering that you have considered this P65,000.00 as your attorney’s fees?  And Atty. Ricafort stated:  Yes I did.  I do not know why they were not showing the receipt.  That is a big amount, Your Honor.  They demanded for me the receipt of P30,000.00 how much more with thatP65,000.00.  They demanded for the receipt of that P65,000.00 but I cannot explain the reason why……

During the clarificatory questioning, the Undersigned Commissioner also asked Atty. Ricafort why he did not answer the demand letter sent by Arnulfo Tarog and the proof of service of the said letter was presented by the complainant. Conveniently, Atty. Ricafort stated that he did not receive the letter and it was received by their helper who did not forward the letter to him. He also adopted the position that the complainant was demanding the P65,000.00 wherefore this case was filed. When confronted by the testimony of Mr. Vidal Miralles, the respondent Atty. Ricafort just denied the allegation that he received the P65,000.00 for deposit to the court. He also denied that Mr. Miralles has visited his residence for follow-up the reimbursement.

The Undersigned Commissioner asked the respondent if he has personal animosity with Arnuldo Tarog, Erlinda Tarog and Vidal Miralles and if there are any reason why this case was filed against him.  In his answer the respondent stated that we have been very good friends for the past ten (10) years and he said that in fact he was surprised when the complaint was filed against him and they even attached the decision of the Supreme Court for his suspension and maybe they are using this case to be able to collect from him.

The main defense of the respondent is that the complainant in this case testified that the total amount to redeem his property is P240,000.00 and when asked whether he consigned the money to the court to redeem the property he answered in the negative.

The alleged payment of P65,000.00 was made prior to the said testimony sometime in 1992. Hence, it was stated on complainant’s affidavit that on November 7, 1992, prior to filing said complaint I had given him the sum of Sixty Five Thousand Pesos to be deposited to the Regional Trial Court representing redemption money of the Real Estate Mortgage. The amount of P65,000.00 is very much close to the amount of the principal obligation of the complainant and it is not surprising for a non-lawyer to hold on to the belief that with the filing of the case for annulment of foreclosure his case would be strengthened by making a deposit in court hence, the motivation to produce the deposit was logical and natural insofar as the complainant is concerned. The testimony of the complainant in court that the bank needed P240,000.00 for the redemption of the property will have no bearing on the actuation of the complainant who has been required to deposit P65,000.00 by his lawyer. The Undersigned Commission has no alternative but to believe in the credibility and truthfulness of complainant’s narration that of Mrs. Erlinda Tarog and Vidal Miralles.^[10]

Commissioner Reyes concluded that Atty. Ricafort violated Canon 15, and Rules 16.01, 16.02 and 16.03 of Canon 16 of theCode of Professional Responsibility by taking advantage of the vulnerability of his clients and by being dishonest in his dealings with them by refusing to return the amount of P65,000.00 to them.

On November 4, 2004, the IBP Board of Governors adopted  Resolution No. XVI-2004-473,^[11] resolving to return the matter to Commissioner Reyes for a clarification of whether or not there was evidence to support the claim that the P65,000.00 had been in payment of attorney’s fees and other expenses.

On October 11, 2005, Commissioner Reyes issued a second Report and Recommendation,^[12] in which he declared that Atty. Ricafort did not present any retainer agreement or receipt to prove that the amount of P65,000.00 had been part of his attorney’s fees; that Atty. Ricafort had willfully ignored the demand of Arnulfo by not replying to the demand letter; that, instead, Atty. Ricafort had insisted that the househelp who had received the demand letter had not given it to him; and that in his (Commissioner Reyes) presence, Atty. Ricafort had also promised to the complainant that he would settle his liability, but Atty. Ricafort did not make good his promise despite several resettings to allow him to settle his obligation.

Action of IBP Board of Governors

Through Resolution No. XVII-2006-569,^[13] therefore, the IBP Board of Governors adopted and approved the Report and Recommendation of Commissioner Reyes and recommended the disbarment of Atty. Ricafort and the order for him to return the amounts of P65,000.00 and P15,000.00 to Erlinda, viz:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case herein made part of this Resolution as Annex “A” and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that Respondent has taken advantage of his client [sic] vulnerability and has been dishonest with his dealings to his client, Atty. Romulo L. Ricafort is hereby DISBARRED and Ordered to Return the amount of P65,000 andP15,000 to complainant.

Atty. Ricafort moved for reconsideration,^[14] maintaining that a retainer agreement was immaterial because he had affirmed having received the P65,000.00 and having issued a receipt for the amount; that he had not kept the receipt because “the practice of lawyers in most instances is that receipt is issued without duplicate as it behooves upon the client to demand for a receipt;”^[15] that considering that the Tarogs had produced a photocopy of the receipt he had issued for the P30,000.00 in connection with their appeal, it followed that a similar receipt for attorney’s fees had been made at the time when the case had been about to be filed in the RTC; that the testimonies of Erlinda and Vidal were inconsistent with Arnulfo’s affidavit; and that he did not receive Arnulfo’s demand letter, which was received by one Gemma Agnote (the name printed on the registry receipt), whom he did not at all know.

Acting on Atty. Ricafort’s motion for reconsideration, the IBP Board of Governors downgraded the penalty from disbarment to indefinite suspension,^[16] thus:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the Recommendation of the Board of Governors First Division of the above-entitled case, herein made part of this Resolution as Annex “A”; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, the Motion for Reconsideration is hereby DENIED with modification of Resolution No. XVII-2006-509 of the Board of Governors dated 18 November 2006, that in lieu of the Disbarment of Atty. Romulo Ricafort, he is INDEFINITELY SUSPENDED from the practice of law and Ordered to return the amount of P65,000 and P15,000 to complainant.

Atty. Ricafort filed a second motion for reconsideration,^[17] assailing the resolution of the IBP Board of Governors for violating Section 12, Rule 139-B of the Rules of Court requiring the decision of the IBP Board of Governors to be in writing and to clearly and distinctly state the facts and reasons on which the decision was based.

Hence, the administrative case is now before the Court for resolution.

Ruling

We affirm the findings of the Commissioner Reyes, because they were supported by substantial evidence. However, we impose the penalty of disbarment instead of the recommended penalty of indefinite suspension, considering that Atty. Ricafort committed a very serious offense that was aggravated by his having been previously administratively sanctioned for a similar offense on the occasion of which he was warned against committing a similar offense.

A.

Version of the complainants was

more credible than version of Atty. Ricafort

Atty. Ricafort admitted receiving the P65,000.00 from the Tarogs. Even so, we have two versions about the transaction. On the one hand, the Tarogs insisted that the amount was to be consigned in court for purposes of their civil case; on the other hand, Atty. Ricafort claimed that the amount was for his fees under a “package deal” arrangement.

Commissioner Reyes considered the Tarogs’ version more credible.

We hold that Commissioner Reyes’ appreciation of the facts was correct and in accord with human experience.

Firstly, it is easier to believe that Atty. Ricafort persuaded the Tarogs on the need for that amount to be deposited in court for purposes of their civil case. Being non-lawyers, they had no idea about the requirement for them to consign any amount in court, due to the substantive and procedural implications of such requirement being ordinarily known only to lawyers. Their ready and full reliance on Atty. Ricafort’s representations about the requirement to consign that amount in court was entirely understandable in view of their awareness of Atty. Ricafort’s standing in the legal community of the place. Besides, as Commissioner Reyes observed, it was not far-fetched for the Tarogs to believe that an amount close in value to their original obligation was necessary to be deposited in court to boost their chances of recovering their property.

Secondly, Atty. Ricafort’s denial of receipt of Arnulfo’s demand letter was incredible. He already initially admitted receiving the letter through a househelp.^[18] His denial came only subsequently and for the first time through his motion for reconsiderationdated December 30, 2006,^[19] in which he completely turned about to declare that the Gemma Agnote who had received the letter was unknown to him.^[20] Expectedly, Commissioner Reyes disregarded his denial, because not only was the denial an apparently belated afterthought, it was even contradicted by his earlier admission of receipt. In any event, the fact that Gemma Agnote was even the househelp whom Atty. Ricafort had adverted to becomes very plausible under the established circumstances.

Thirdly, Atty. Ricafort explained that he had no copies of the receipts for the P65,000.00 and P15,000.00 issued to the Tarogs because “the practice of lawyers in most instances is that receipt is issued without duplicate as it behooves upon the client to demand for a receipt.”^[21] But such explanation does not persuade us. Ethical and practical considerations made it both natural and imperative for him to issue receipts, even if not demanded, and to keep copies of the receipts for his own records. He was all too aware that he was accountable for the moneys entrusted to him by the clients, and that his only means of ensuring accountability was by issuingand keeping receipts. Rule 16.01 of the Code of Professional Responsibility expressly enjoins such accountability, viz:

Rule 16.01 – A lawyer shall account for all money or property collected or received for or from the client.

Definitely, Atty. Ricafort had a highly fiduciary and confidential relation with the Tarogs. As such, he was burdened with the legal duty to promptly account for all the funds received from or held by him for them.^[22]

And, fourthly, to buttress his denial that the P65,000.00 was not intended for deposit in court, Atty. Ricafort insisted that Arnulfo did not object to the omission from the complaint in the civil action of any mention of consignation. However, the complaint that he himself had written and filed for the Tarogs contradicted his insistence, specifically in its paragraph 16, which averred the plaintiffs’ (i.e., Tarogs) readiness and willingness to deposit the amount of P69,345.00 (inclusive of the redemption price and interest) in court, thus:

16. And to show willingness and sincerity of the plaintiffs, they are ready and willing to deposit the amount of P69,345.00 as redemption price plus reasonable accrued interests, if there are any; ^[23]

Nor could the Tarogs have conjured or invented the need for consignation. The consignation was a notion that could have emanated only from him as their lawyer. In fact, Erlinda recalled while testifying before the IBP Commission on Bar Discipline that they had brought to their meeting with Atty. Ricafort only P60,000.00 for the consignation, but that Atty. Ricafort had to instruct them to raise the amount. The excerpt of her pertinent testimony follows:

Comm. Reyes:    Madam Witness, in this affidavit you stated that your late husband and Mr. Vidal Miralles went to the office of Atty. Ricafort to advise the latter that we already had the sum of P65,000.00 in the form of check, how did you come to know this fact?

Witness:             Paano po ba sabi nya na magdeposit ng P65,000.00 tapos may P60,000.00 kami sabi niya dagdagan niyo ng konti.

Comm. Reyes:    Kinausap ba niya kayo?

Witness:             Nandoon po ako.

Comm. Reyes:    Where you present when the check was given?

Witness:             Yes.

Comm. Reyes:    So, alam niyo, nakita niyo na binigay yong P65,000.00 na tseke?

Witness:             Opo.

Comm. Reyes:    Alam niyo ba kung ano ang nangyari doon sa tseke na idiniposit?

Witness:             Noong una sinabi niya sa amin na ididiposit niya sa court.

Comm. Reyes:    Nalaman niyo ba na hindi naman pala idiniposit sa court?

Witness:             Opo.

Comm. Reyes:    Kailan niyo nalaman?

Witness:             Nagsabi siya tapos sinabi pa niya na yong interest sa bank ay ibinigay niya sa amin ang sabi naming salamat.^[24]

B.

Atty. Ricafort’s acts and actuations constituted

serious breach of his fiduciary duties as an attorney

The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in dealing with the moneys entrusted to lawyers because of their fiduciary relationship.^[25] In particular, Rule 16.01 of the Code of Professional Responsibilitystates:

Rule 16.01 – A lawyer shall account for all money or property collected or received for or from the client.

Undoubtedly, Atty. Ricafort was required to hold in trust any money and property of his clients that came into his possession,^[26] and he needed to be always mindful of the trust and confidence his clients reposed in him.^[27] Thus, having obtained the funds from the Tarogs in the course of his professional employment, he had the obligation to deliver such funds to his clients (a) when they became due, or (b) upon demand.^[28]

Furthermore, Rule 16.02 of the Code of Professional Responsibility, imposes on an attorney the positive obligation to keep all funds of his client separate and apart from his own and from those of others kept by him, to wit:

Rule 16.02 – A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

Atty. Ricafort’s act of obtaining P65,000.00 and P15,000.00 from the Tarogs under the respective pretexts that the amount would be deposited in court and that he would prepare and file the memorandum for the Tarogs erected a responsibility to account for and to use the amounts in accordance with the particular purposes intended. For him to deposit the amount of P65,000.00 in his personal account without the consent of the Tarogs and not return it upon demand, and for him to fail to file the memorandum and yet not return the amount of P15,000.00 upon demand constituted a serious breach of his fiduciary duties as their attorney. He reneged on his duty to render an accounting to his clients showing that he had spent the amounts for the particular purposes intended.^[29] He was thereby presumed to have misappropriated the moneys for his own use to the prejudice of his clients and in violation of the clients’ trust reposed in him.^[30]  He could not escape liability, for upon failing to use the moneys for the purposes intended, he should have immediately returned the moneys to his clients.^[31]

Atty. Ricafort’s plain abuse of the confidence reposed in him by his clients rendered him liable for violation of Canon 16,^[32]particularly Rule 16.01, supra, and Canon 17,^[33] all of the Code of Professional Responsibility. His acts and actuations constituted a gross violation of general morality and of professional ethics that impaired public confidence in the legal profession and deserved punishment.^[34]

Without hesitation, therefore, we consider Atty. Ricafort’s acts and conduct as gross misconduct, a serious charge under Rule 140 of the Rules of Court, to wit:

Section 8. Serious charges. – Serious charges include:

xxx

3. Gross misconduct constituting violations of the Code of Judicial Conduct;

xxx

That this offense was not the first charged and decided against Atty. Ricafort aggravated his liability. In Nuñez v. Ricafort,^[35]decided in 2002, the Court found him to have violated Rules 1.01^[36] of Canon 1 and Rule 12.03^[37] and Rule 12.04^[38] of Canon 12 of the Code of Professional Responsibility in relation to his failure to turn over the proceeds of the sale of realty to the complainant (who had authorized him to sell the realty in her behalf). His failure to turn over the proceeds compelled the complainant to commence in the RTC a civil action to recover the proceeds against him and his wife. The

Court meted on him the penalty of indefinite suspension, and warned him against the commission of similar acts, stating:

We concur with the findings of the Investigating Commissioner, as adopted and approved by the Board of Governors of the IBP, that respondent Atty. Romulo Ricafort is guilty of grave misconduct in his dealings with complainant. Indeed, the record shows respondent’s grave misconduct and notorious dishonesty.

There is no need to stretch one’s imagination to arrive at an inevitable conclusion that respondent gravely abused the confidence that complainant reposed in him and committed dishonesty when he did not turn over the proceeds of the sale of her property. Worse, with palpable bad faith, he compelled the complainant to go to court for the recovery of the proceeds of the sale and, in the process, to spend money, time and energy therefor. Then, despite his deliberate failure to answer the complaint resulting in his having been declared in default, he appealed from the judgment to the Court of Appeals. Again, bad faith attended such a step because he did not pay the docket fee despite notice. Needless to state, respondent wanted to prolong the travails and agony of the complainant and to enjoy the fruits of what rightfully belongs to the latter. Unsatisfied with what he had already unjustly and unlawfully done to complainant, respondent issued checks to satisfy the alias writ of execution. But, remaining unrepentant of what he had done and in continued pursuit of a clearly malicious plan not to pay complainant of what had been validly and lawfully adjudged by the court against him, respondent closed the account against which the checks were drawn. There was deceit in this. Respondent never had the intention of paying his obligation as proved by the fact that despite the criminal cases for violation of B.P. Blg. 22, he did not pay the obligation.

All the foregoing constituted grave and gross misconduct in blatant violation of Rule 1.01 of Canon 1 of the Code of Professional Responsibility which provides:

A lawyer shall not engage in unlawful, dishonest and immoral or deceitful conduct.

Respondent’s claim of good faith in closing his account because he thought complainant has already encashed all checks is preposterous. The account was closed on or before 26 February 1996. He knew that there were still other checks due on 29 February 1996 and 15 March 1996 which could not be encashed before their maturity dates.

By violating Rule 1.01 of Canon 1 of the Code of Professional Responsibility, respondent diminished public confidence in the law and the lawyers (Busiños v. Ricafort, 283 SCRA 407 [1997]; Ducat v. Villalon,

337 SCRA 622 [2000]). Instead of promoting such confidence and respect, he miserably failed to live up to the standards of the legal profession (Gonato v. Adaza, 328 SCRA 694 [2000]; Ducat v. Villalon, supra).

Respondent’s act of issuing bad checks in satisfaction of the alias writ of execution for money judgment rendered by the trial court was a clear attempt to defeat the ends of justice. His failure to make good the checks despite demands and the criminal cases for violation of B.P. Blg. 22 showed his continued defiance of judicial processes, which he, as an officer of the court, was under continuing duty to uphold.^[39]

Bearing in mind his administrative record, and considering that the penalty for violation of Canon 16 ranges from suspension for six months,^[40] to suspension for one year,^[41] to suspension for two years,^[42] depending on the amount involved and the severity of the lawyer’s misconduct, we rule that disbarment is the commensurate punishment for Atty. Ricafort, who has shown no reformation in his handling of trust funds for his clients.

WHEREFORE, we find and declare Atty. Romulo L. Ricafort guilty of a violation of Canon 16, Rule 16.01 and Canon 17 of the Code of Professional Responsibility and, accordingly, disbar him. The Bar Confidant is directed to strike out his name from the Roll of Attorneys.

Atty. Ricafort is ordered to return to Erlinda R. Tarog the sums of P65,000.00 and P15,000.00, plus interest of six percent per annum reckoned from the demand made on December 3, 2002, within twenty days from notice.

This decision is effective immediately.

Let a copy of this decision be furnished to the Office of the Court Administrator for circulation to all courts, and to the Integrated Bar of the Philippines, for its reference.

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

   MARTIN S. VILLARAMA, JR.           JOSE PORTUGAL PEREZ

                 Associate Justice                                   Associate Justice

JOSE CATRAL MENDOZA          MARIA LOURDES P. A. SERENO

           Associate Justice                                       Associate Justice

^[1]       Rollo, p. 126.

^[2]       Id., p. 132.

^[3]       Id., p. 183 (TSN dated June 18, 2004).

^[4]       Id., p. 135.

^[5]       Id., p. 126.

^[6]       Id., p. 127.

^[7]       Id., p. 167.

^[8]       Id., p. 85.

^[9]       Id., pp. 207-217.

^[10]     Id., pp. 213-216.

^[11]     Id, p. 206.

^[12]     Id., pp. 203-205.

^[13]     Id., p. 201.

^[14]     Id., pp. 219-227.

^[15]     Id., p. 222.

^[16]     Id., p. 231.

^[17]     Id., p. 240.

^[18]     Id., p. 214.

^[19]     Id., pp. 219-227.

^[20]     Id., p. 225.

^[21]     Id., p. 222.

^[22]     Garcia v. Manuel, A. C. No. 5811, January 20, 2003, 395 SCRA 386.

^[23]     Rollo, p. 34.

^[24]     Id., pp. 182-185 (TSN dated June 18, 2004).

^[25]     Berbano v. Barcelona, A.C. No. 6084, September 3, 2003, 410 SCRA 258, 266.

^[26]     Rollon v. Naraval, A.C. No. 6424, March 4, 2005, 452 SCRA 675, 683.

^[27]     Garcia v. Bala, A.C. No. 5039, November 25, 2005, 476 SCRA 85, 92.

^[28]     Rule 16.03, Canon 16, Code of Professional Responsibility; Garcia v. Manuel, supra, note 22.

^[29]     Mejares v. Romana, A.C. No. 6196, March 17, 2004, 425 SCRA 577.

^[30]     Almendarez, Jr. v. Langit,  A.C. No. 7057, July 25, 2006, 496 SCRA 402, 407; Espiritu v. Ulep, A.C. No. 5808, May 4, 2005, 458 SCRA 1, 9; Aldovino v. Pujalte, Jr. A.C. No. 5082, February 17, 2004, 423 SCRA 135, 140.

^[31]     Celaje v. Soriano, A.C. No. 7418, October 9, 2007, 535 SCRA 217, 222.

^[32]     CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

^[33]     CANON 17 – A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.

^[34]     Almendarez, Jr. v. Langit, supra; Espiritu v. Ulep, supra.

^[35]     A.C. No. 5054, May 29, 2002, 382 SCRA 381.

^[36]     Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

^[37]     Rule 12.03 – A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so.

^[38]     Rule 12.04 – A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse Court processes.

^[39]     Nuñez v. Ricafort, supra, pp. 386-387.

^[40]     Espiritu v. Ulep, supra.

^[41]     Meneses v. Macalino, A.C. No. 6651, February 27, 2006, 483 SCRA 212; Unity Fishing Development Corporation v. Macalino, A.C. No. 4566, December 10, 2004, 446 SCRA 11.

^[42]     Mortera v. Pagatpatan, A.C. No. 4562, June 15, 2005, 460 SCRA 99.

CASE NO. 2011-0093: SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO – UNION PRESIDENT VS. CHARTER CHEMICAL AND COATING CORPORATION (G.R. NO.  169717, 16 MARCH 2011, DEL CASTILLO, J.) SUBJECTS: CERTIFICATION ELECTION; LEGITIMACY OF RANK AND FILE LABOR UNION. (BRIEF TITLE: SAMAHANG MANGGAGAWA ET AL VS. CHARTER CHEMICAL). 

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

DEL CASTILLO, J.:

The right to file a petition for certification election is accorded to a labor organization provided that it complies with the requirements of law for proper registration. The inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeal’s March 15, 2005 Decision^[1] in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision^[2] of the Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005 Resolution^[3] denying petitioner union’s motion for reconsideration.

Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region.

On April 14, 1999, respondent company filed an Answer with Motion to Dismiss^[4] on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union.^[5]

Med-Arbiter’s Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision^[6] dismissing the petition for certification election.  The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate, “Sama-samang Pahayag ng Pagsapi at Authorization,” and “Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas” were not executed under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code^[7] in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was, thus, fatally defective.

The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of respondent company.

As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining.

Department of Labor and Employment’s Ruling

On July 16, 1999, the DOLE initially issued a Decision^[8] in favor of respondent company dismissing petitioner union’s appeal on the ground that the latter’s petition for certification election was filed out of time. Although the DOLE ruled, contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there was no independent evidence presented to establish respondent company’s claim that some members of petitioner union were holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it took judicial notice that another union, i.e., Pinag-isang LakasManggagawa sa Charter Chemical and Coating Corporation, previously filed a petition for certification election on January 16, 1998. The Decision granting the said petition became final and executory on September 16, 1998 and was remanded for immediate implementation. Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election in an unorganized establishment should be filed prior to the finality of the decision calling for a certification election. Considering that petitioner union filed its petition only on February 14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January 13, 2000 Decision, the DOLE found that a review of the records indicates that no certification election was previously conducted in respondent company. On the contrary, the prior certification election filed by Pinag-isang Lakas Manggagawa  sa Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed by the DOLE for being filed out of time. Hence, there was no obstacle to the grant of petitioner union’s petition for certification election, viz:

WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of this Office dated 16 July 1999 is MODIFIEDto allow the certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation with the following choices:

1.              Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for Empowerment and Reform (SMCC-SUPER); and

2.              No Union.

Let the records of this case be remanded to the Regional Office of origin for the immediate conduct of a certification election, subject to the usual pre-election conference.

SO DECIDED.^[9]

Court of Appeal’s Ruling

            On March 15, 2005, the CA promulgated the assailed Decision, viz:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated January 13, 2000 and February 17, 2000 are hereby [ANNULLED] and SET ASIDE.

                SO ORDERED.^[10]

In nullifying the decision of the DOLE, the appellate court gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code. It, likewise, upheld the Med-Arbiter’s finding that petitioner union consisted of both rank-and-file and supervisory employees.  Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be remedied through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling inToyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union.^[11] Thus, considering that petitioner union is not a legitimate labor organization, it has no legal right to file a petition for certification election.

Issues

I

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in granting the respondent [company’s] petition for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject of the respondent company[’s] petition was already settled with finality and barred from being re-litigated.

II

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [union’s] membership is [a] ground for the cancellation of petitioner [union’s] legal personality and dismissal of [the] petition for certification election.

III

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath the local charter certificate issued by its mother federation and list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner [union’s] legal personality as a labor organization and for the dismissal of the petition for certification election.^[12]

Petitioner Union’s Arguments

Petitioner union claims that the litigation of the issue as to its legal personality to file the subject petition for certification election is barred by the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled that petitioner union complied with all the documentation requirements and that there was no independent evidence presented to prove an illegal mixture of supervisory and rank-and-file employees in petitioner union. After the promulgation of this Decision, respondent company did not move for reconsideration, thus, this issue must be deemed settled.

Petitioner union further argues that the lack of verification of its charter certificate and the alleged illegal composition of its membership are not grounds for the dismissal of a petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they grounds for the cancellation of a union’s registration under Section 3, Rule VIII of said issuance. It contends that what is required to be certified under oath by the local union’s secretary or treasurer and attested to by the local union’s president are limited to the union’s constitution and by-laws, statement of the set of officers, and the books of accounts.

Finally, the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an independent petition for cancellation pursuant to Section 5, Rule V, Book IV of the Rules to Implement the Labor Code and the doctrine enunciated in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands Empoyees Union-PTGWO.^[13]

Respondent Company’s Arguments

Respondent company asserts that it cannot be precluded from challenging the July 16, 1999 Decision of the DOLE. The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and, from this decision, respondent company timely filed its motion for reconsideration.

On the issue of lack of verification of the charter certificate, respondent company notes that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, expressly requires that the charter certificate be certified under oath.

It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union^[14] continues to be good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition for certification election as was done here.

Our Ruling

            The petition is meritorious.

The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of the DOLE.

A review of the records indicates that the issue as to petitioner union’s legal personality has been timely and consistently raised by respondent company before the Med-Arbiter, DOLE, CA and now this Court. In its July 16, 1999 Decision, the DOLE found that petitioner union complied with the documentation requirements of the Labor Code and that the evidence was insufficient to establish that there was an illegal mixture of supervisory and rank-and-file employees in its membership. Nonetheless, the petition for certification election was dismissed on the ground that another union had previously filed a petition for certification election  seeking to  represent  the  same  bargaining unit  in respondent company.

Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE reversed its previous ruling.  It upheld the right of petitioner union to file the subject petition for certification election because its previous decision was based on a mistaken appreciation of facts.^[15] From this adverse decision, respondent company timely moved for reconsideration by reiterating its previous arguments before the Med-Arbiter that petitioner union has no legal personality to file the subject petition for certification election.

The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the parties timely moved for reconsideration. The issue then as to the legal personality of petitioner union to file the certification election was properly raised before the DOLE, the appellate court and now this Court.

The charter certificate need not be certified under oath by the local union’s secretary or treasurer and attested to by its president.

Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 9481^[16] which took effect on June 14, 2007.^[17]This law introduced substantial amendments to the Labor Code. However, since the operative facts in this case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No. 6715,^[18] amending Book V of the Labor Code, and the rules and regulations^[19] implementing R.A. No. 6715, as amended by D.O. No. 9,^[20]series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.^[21]

In the main, the CA ruled that petitioner union failed to comply with the requisite documents for registration under Article 235 of the Labor Code and its implementing rules. It agreed with the Med-Arbiter that the Charter Certificate, Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus, petitioner union cannot be accorded the status of a legitimate labor organization.

We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, provides:

Section 1. Chartering and creation of a local chapter — A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following:

(a)  A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

(b)  The names of the local/chapter’s officers, their addresses, and the principal office of the local/chapter; and

(c)  The local/chapter’s constitution and by-laws provided that where the local/chapter’s constitution and by-laws [are] the same as [those] of the federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),^[22] which was decided under the auspices of D.O. No. 9, Series of 1997, we ruled – 

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapter’s officers x x x certify or attest to a document which they had no hand in the preparation of.^[23] (Emphasis supplied) 

In accordance with this ruling, petitioner union’s charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,^[24] (2) the names of its officers, their addresses, and its principal office,^[25] and (3) its constitution and by-laws^[26]— the last two requirements having been executed under oath by the proper union officials as borne out by the records.

The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However, petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article 245^[27] of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union^[28] (hereinafter Toyota).

Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in evidence the job descriptions^[29] of the aforesaid employees. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling within the definition of supervisory employees under Article 212(m)^[30] of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by the appellate court, that petitioner union consisted of both rank-and-file and supervisory employees.

Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. The appellate court’s reliance on Toyota is misplaced in view of this Court’s subsequent ruling inRepublic v. Kawashima Textile Mfg., Philippines, Inc.^[31] (hereinafter Kawashima).  In Kawashima, we explained at length how and why the Toyota doctrine no longer holds sway under the altered state of the law and rules applicable to this case, viz:

R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization.

It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions):

“Sec. 1. Who may join unions. – x x x Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; Provided, that those supervisory employees who are included in an existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)

and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:

“Sec. 1. Where to file. – A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. The petition shall be in writing and under oath.

Sec. 2. Who may file. – Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition.

The petition, when filed by a legitimate labor organization, shall contain, among others:

x x x x

(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. (Emphasis supplied)

By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election.

Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:

“Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code.
x x x x

In the case at bar, as respondent union’s membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election.” (Emphasis supplied)

In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members.

It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules – that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees – was removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining unit, thus:

Rule XI

Certification Elections

x x x x

Sec. 4. Forms and contents of petition. – The petition shall be in writing and under oath and shall contain, among others, the following: x x x (c) The description of the bargaining unit.

In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997 Amended Omnibus Rules, although the specific provision involved therein was only Sec. 1, Rule VI, to wit:

“Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: a) a charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) the names of the local/chapter’s officers, their addresses, and the principal office of the local/chapter; and (c) the local/ chapter’s constitution and by-laws; provided that where the local/chapter’s constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.”

which does not require that, for its creation and registration, a local or chapter submit a list of its members.

Then came Tagaytay Highlands Int’l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for certification election. This time, given the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code.

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members.

More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for cancellation of union registration filed by the employer in 1999 against a rank-and-file labor organization on the ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court in Tagaytay Highlands,San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules.^[32] [Underline supplied]

The applicable law and rules in the instant case are the same as those in Kawashima because the present petition for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees; it had the right to file the subject petition for certification election.

The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings.

Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election proceedings. As we explained in Kawashima:

                Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employer’s only right in the proceeding is to be notified or informed thereof.

The amendments to the Labor Code and its implementing rules have buttressed that policy even more.^[33]

WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000 Decision of the Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.

No pronouncement as to costs.

SO ORDERED.

                                     MARIANO C. DEL CASTILLO

             Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

JOSE PORTUGAL PEREZ

Associate Justice

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, it is hereby certified 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]       Rollo, pp. 29-36; penned by Associate Justice Estela M. Perlas-Bernabe and concurred in by Associate Justices Elvi John S. Asuncion and Hakim S. Abdulwahid.

^[2]       Id. at 74-75.

^[3]       Id. at 38.

^[4]       Id. at 214-223.

^[5]       Id. at 215-220.

^[6]       Id. at 40-50.

^[7]       PRESIDENTIAL DECREE NO. 442, as amended.

^[8]       Rollo, pp. 52-54.

^[9]       Id. at 75.

^[10]     Id. at 36.

^[11]     335 Phil. 1045 (1997).

^[12]     Rollo, pp. 12-13.

^[13]     443 Phil. 841 (2003).

^[14]     Supra note 11.

^[15]     Upon reconsideration, the DOLE noted that the other union which allegedly filed a prior petition for certification election was prevented from doing so because its petition for certification election was filed out of time. Thus, there was no obstacle to the conduct of a certification election in respondent company.

^[16]     “An Act Strengthening the Workers’ Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, as Amended, Otherwise Known as the Labor Code of the Philippines.”

^[17]     Republic v. Kawashima Textile Mfg., Philippines, Inc., G.R. No. 160352, July 23, 2008, 559 SCRA 386, 396.

^[18]     “An Act to Extend Protection to Labor, Strengthen the Constitutional Rights of Workers to Self-Organization, Collective Bargaining and Peaceful Concerted Activities, and Foster Industrial Peace and Harmony.”  Effective March 21, 1989.

^[19]     Approved on May 24, 1989.

^[20]     Effective: June 21, 1997.

^[21]     Supra note 17 at 396-397.

^[22]     504 Phil. 376 (2005).

^[23]     Id. at 400.

^[24]     DOLE records, p. 51.

^[25]     Id. at 43-44.

^[26]     Id. at 25-40.

^[27]     Article 245. Ineligibility of Managerial Employees to Join Any Labor Organization; Right of Supervisory Employees.— x x x Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. x x x

^[28]     Supra note 11.

^[29]     Respondent company claimed that the batchman, mill operator and leadman perform, among others, the following functions:

        Prepares, coordinates and supervises work schedules and activities of subordinates or helpers in their respective area of responsibility.

1.       Recommends the reduction, increase, transfer and number of employees assigned to them.

2.       Sees to it that daily production schedules and outputs are carried on time.

3.       Coordinates with their respective managers the needed raw materials and the quality of finished products. (Rollo, p. 220)

^[30]     Article 212(m) of the Labor Code, states in part: “Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. x x x”

^[31]     Supra note 17.

^[32]     Id. at 402-407.

^[33]     Id. at 408.