J.A.B. Bulao & Associates

CASE 2011-0233: PHILIPPINE NATIONAL BANK VS. COMMISSIONER OF INTERNAL REVENUE (G.R. NO. 172458, 14 DECEMBER 2011, LEONARDO-DE CASTRO, J.) SUBJECT: FAILURE TO COMPLY WITH THE FORMAL REQUIREMENTS OF THE REVISED RULES OF THE COURT OF TAX APPEALS AND THE RULES OF COURT IN FILING A PETITION FOR REVIEW WITH THE CTA EN BANC.  (BRIEF TITLE: PNB VS. CIR)

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DISPOSITIVE:

WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

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Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

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

D E C I S I O N

LEONARDO-DE CASTRO, J.:

This Petition for Review on Certiorari^[1][1] seeks to reverse and set aside the January 27, 2006^[2][2] and April 19, 2006^[3][3] Resolutions of the Court of Tax Appeals En Banc (CTA En Banc) in C.T.A. E.B. NO. 145, which dismissed outright the Petition for Review filed by the Philippine National Bank (PNB) dated December 27, 2005 for being filed four days beyond the additional 15 days granted to file such petition.

On April 15, 1999, petitioner PNB filed with the Bureau of Internal Revenue (BIR) its Tentative Return for 1998 with the documents enumerated in the “List of Attachments to Annual Income Tax Return Calendar Year Ended December 31, 1998” enclosed.  On September 30, 1999, PNB filed its Amended Income Tax Return for 1998, with the corresponding attachments to an amended annual income tax return appended, including copies of the Certificates and Schedule of Creditable Withholding Taxes for 1998.  PNB likewise filed its Corporate Quarterly Returns for the calendar year 1998.^[4][4]

On February 8, 2001, PNB filed with respondent Commissioner of Internal Revenue (CIR) an administrative claim for refund in the amount of ₱6,028,594.00, which were payments made in excess of its income tax liability for 1998.^[5][5]

As BIR did not act upon PNB’s claim for refund, PNB, on March 30, 2001, filed with the Second Division of the Court of Tax Appeals (CTA Division) a Petition for Review,^[6][6] and prayed that it be refunded or issued a tax credit certificate in the amount of ₱6,028,594.00, representing creditable taxes withheld from PNB’s income from the sale of real property, rental income, commissions, and management fees for the taxable year 1998.

In his Answer,^[7][7] the CIR alleged that PNB’s claim for refund/tax credit is subject first to an investigation and that it failed to establish its right to a refund.

After PNB had rested its case, the CIR manifested that he would not be presenting evidence.  The parties were thereafter required to submit their memoranda.^[8][8]

On May 19, 2003, the BIR issued in PNB’s favor Tax Credit Certificate No. SN 023837 for ₱4,154,353.42, leaving a balance of ₱1,874,240.58 out of PNB’s total claim of ₱6,028,594.00.  PNB then informed the CTA Division of such tax credit certificate, and manifested that its acceptance was without prejudice to recovering the balance of its total claim.^[9][9]

Consequently, the CIR filed a Motion,^[10][10] asking that he be allowed to present evidence on PNB’s excluded claim.  The CIR argued that the amount of ₱1,874,240.58 was disallowed because it was not remitted to the BIR, as verified by its Regional Accounting Division.^[11][11]

On August 11, 2005, the CTA Division rendered its Decision,^[12][12] the dispositive portion of which reads:

            WHEREFORE, premises considered, the present Petition For Review is hereby partially GRANTED.  Respondent is hereby ORDERED to REFUND or ISSUE a Tax Credit Certificate in favor of herein petitioner in the amount of ₱1,428,661.66, representing the latter’s unutilized creditable withholding tax for the year 1998.^[13][13]

The CTA Division held that payments of withholding taxes for a certain taxable year were creditable to the payee’s income tax liability as determined after it had filed its income tax returns the following year.  The CTA Division said that since PNB posted net losses, it was not liable for any income tax and consequently, the taxes withheld during the course of the taxable year, which was 1998, while collected legally under Revenue Regulations No. 02-98, Section 2.57 (B), became untenable and took on the nature of erroneously collected taxes at the end of that year.  The CTA Division averred that while the right to a refund is not automatic and must be established by sufficient evidence, there is nothing in the Tax Code that would suggest that the actual remittance of the withholding tax is a condition precedent to claim for a tax refund.  Moreover, the CTA Division added, that the CIR failed to present the certification to prove his contention of PNB’s non-remittance of the disallowed amount.  However, the CTA Division affirmed the disallowance of eight transactions, amounting to ₱445,578.92 as they had already been reported as income for other years, had not been recorded, or were not supported by pertinent documents.^[14][14] 

On September 14, 2005, PNB filed a Motion for Partial Reconsideration,^[15][15] asserting its entitlement to be refunded the amount of ₱445,578.92, by explaining each transaction involved and pinpointed by the CTA Division.  This however was still denied by the CTA Division in its Resolution^[16][16] dated November 15, 2005, for lack of merit.

Aggrieved, PNB, filed a partial appeal by way of Petition for Review^[17][17] under Section 18 of Republic Act No. 9282^[18][18] before the CTA En Banc, to review and modify  the CTA Division’s August 11, 2005 Decision.  This petition was received by the CTA En Banc on December 27, 2005, four days beyond the additional 15 days granted to PNB to file its petition.

Thus, on January 27, 2006, the CTA En Banc issued a Resolution^[19][19]  denying due course and consequently dismissing PNB’s petition for the following reasons:

1)                  The Petition For Review was filed four (4) days late on December 27, 2005, the reglementary deadline for the timely filing of such petition being December 23, 2005.

Appeal is a statutory privilege and must be exercised in the manner provided by law.  Therefore, perfection of an appeal in the manner and within the period prescribed by law is not only mandatory, but jurisdictional, and non-compliance is fatal having the effect of rendering the judgment final and executory (Cabellan vs. Court of Appeals, 304 SCRA 119).  Not only that, late appeals deprives the appellate court of jurisdiction to alter the final judgment much less entertain the appeal (Pedrosa vs. Hill, 257 SCRA 373).

2)                  The petition is not accompanied by the duplicate original or certified true copies of the assailed Decision dated August 11, 2005 and Resolution dated November 15, 2005, in violation of Section 2, Rule 6 of the Revised Rules of the Court of Tax Appeals, in relation to Section 6, Rule 43 of the Rules of Court.

3)                  The Petition does not contain an Affidavit of Service, in violation of Section 13, Rule 13 of the Rules of Court.

In the case of Policarpio vs. Court of Appeals, 269 SCRA 344, 351, the Supreme Court did not hesitate to dismiss the petition for failure to attach an affidavit of service.

Lastly, Section 7 of Rule 43 of the Rules of Court provides that:

            SEC. 7.  Effect of failure to comply with requirements.– The failure of the petitioner to comply with any of the foregoing requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of service of the petition, and the contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof.”

Persistent in its claim, PNB filed a Motion for Reconsideration with Manifestation of Compliance^[20][20] on February 23, 2006, and answered each ground propounded by the CTA En Banc in its Resolution.

PNB asserted that its petition was filed on December 23, 2005, which was the last day of the additional 15-day period granted by the CTA En Banc, via LBC Express, as shown by the copy of LBC Official Receipt No. 12990350^[21][21] dated December 23, 2005.  PNB explained that its counsel, Atty. Flerida P. Zaballa-Banzuela, accompanied by her administrative assistant, tried to personally file the petition with the CTA En Banc on December 23, 2005.  However, PNB claimed, that due to heavy traffic, Atty. Zaballa-Banzuela arrived at the CTA office in Quezon City at 4:30 p.m., just as the CTA personnel were leaving the CTA premises in their shuttle bus.^[22][22]

PNB attached to its Motion the Affidavit^[23][23] of Christopher Sarmiento, the Security Guard who was then assigned at the CTA main gate.  Sarmiento averred that he did not allow Atty. Zaballa-Banzuela to enter the CTA compound because there was no one left to receive her document.  He also alleged that Atty. Zaballa-Banzuela even tried to ask some of the CTA personnel who were on board the CTA shuttle that passed her by, if they could receive her document, but they declined.  This was corroborated by Atty. Zaballa-Banzuela’s administrative assistant, Macrina J. Cataniag, in her Affidavit,^[24][24] also annexed to PNB’s Motion.

PNB argued that while its petition was deposited with LBC Express on December 23, 2005, very well within the reglementary period, CTA En Banc received it only on December 27, 2005, as December 24 to 26, 2005 were holidays.^[25][25]

 Addressing the second ground that the CTA En Banc used to dismiss the petition, PNB said that its non-submission of the duplicate original or certified true copy of the CTA Division’s decision and resolution was not intended for delay but was “mere inadvertence and unintentional, but an honest mistake, an oversight, an unintentional omission, and a human error occasioned by too much pressure of work.”^[26][26]

In compliance, PNB attached to its Motion the Affidavit of Service^[27][27] and certified true copies of the CTA Division’s decision and resolution supposed to be attached to its petition before the CTA En Banc.

On April 19, 2006, the CTA En Banc denied PNB’s motion for lack of merit.  The CTA En Banc held that “absent any cogent explanation [to not] comply with the rules, the rules must apply to the petitioner as they do to all.”^[28][28]  The CTA En Banc ratiocinated in this wise: 

It is a jurisprudential rule that the date [of] delivery of pleadings to a private letter-forwarding agency is not to be considered as the date of filing thereof in court, and that in such cases, the date of actual receipt by the court, and not the date of delivery to the private carrier, is deemed the date of filing of that pleading (Benguet Electric Corporation, Inc. vs. NLRC, 209 SCRA 60-61).  Clearly, the present Petition For Review was filed four (4) days late.

            The instant Petition For Review is an appeal from the decision of the Court in Division.  Accordingly, the applicable rule is that the fifteen-day reglementary period to perfect an appeal is mandatory and jurisdictional in nature; that failure to file an appeal within the reglementary period renders the assailed decision final and executory and no longer subject to review (Armigos vs. Court of Appeals, 179 SCRA 1; Jocson vs. Baguio, 179 SCRA 550).  Petitioner had thus lost its right to appeal from the decision of this Court in Division.^[29][29]

The CTA En Banc added:

            Although petitioner subsequently attached to its present motion, certified true copies of the assailed Decision, dated August 11, 2005, and Resolution, dated November 15, 2005, and the Affidavit of Service, this did not stop the questioned decision from becoming final and executory.  It has been held that strict compliance with procedural requirements in taking an appeal cannot be substituted by “good faith compliance”.  To rule otherwise would defeat the very purpose of the rules of procedure, i.e., to “facilitate the orderly administration of justice” (Santos vs. Court of Appeals, 198 SCRA 806, 810; Ortiz vs. Court of Appeals, 299 SCRA 712).^[30][30]

PNB thereafter filed a Petition for Review^[31][31] before this Court on June 16, 2006, which was the last day of the additional thirty days it was granted^[32][32] to file such petition.

In order to convince this Court to allow its petition, PNB posits the following arguments:

I

THE HONORABLE COURT OF TAX APPEALS EN BANC ERRED IN FAILING TO CONSIDER THE EXPLANATION SUBMITTED BY PNB IN ITS MOTION FOR RECONSIDERATION WITH MANIFESTATION OF COMPLIANCE WITH RESPECT TO THE FILING OF THE PETITION ON DECEMBER 23, 2005 (THE DUE DATE FOR FILING THEREOF) VIA LBC SERVICE INSTEAD OF REGISTERED MAIL WITH RETURN CARD.

II

THE PROCEDURAL LAPSE OBSERVED BY THE HONORABLE COURT OF TAX APPEALS SHOULD BE LIBERALLY CONSTRUED IN THE INTEREST OF SUBSTANTIAL JUSTICE, AS POSTULATED IN VARIOUS SUPREME COURT DECISIONS.

III

THE PETITION FILED BY PNB BEFORE THE CTA EN BANC RAISES A MERITORIOUS LEGAL DEFENSE WARRANTING JUDICIAL RESOLUTION.^[33][33]

PNB once again narrated the circumstances leading to its counsel’s decision to mail its petition for review via LBC Express, a private letter-forwarding company, instead of registered mail.  It claims that since this Court has repeatedly pronounced the primacy of substantive justice over technical rules, then its procedural lapses should likewise be excused, especially since no substantial rights of the CIR are affected.

This Court’s Ruling

 The only issue to be resolved here is whether or not this Court should require the CTA En Banc to give due course to C.T.A. E.B. No. 145 despite PNB’s failure to comply with the formal requirements of the Revised Rules of the Court of Tax Appeals and the Rules of Court in filing a petition for review with the CTA En Banc.

Not having been successfully convinced by PNB, we answer the above issue in the negative.

This Court would like to underscore the fact that PNB failed to comply with not just one, but three procedural rules when it filed its petition for review with the CTA En Banc.

Petition was filed late

It is stated under Section 3, Rule 1 of the Revised Rules of the Court of Tax Appeals that the Rules of Court shall apply suppletorily.  Thus, the manner in which petitions are filed before the CTA is also covered by the relevant provision of the Rules of Court, to wit:

          Rule 13. x x x.

                x x x x

Sec. 3. Manner of filing.  The filing of pleadings, appearances, motions, notices, orders, judgments and all other papers shall be made by presenting the original copies thereof, plainly indicated as such, personally to the clerk of court or by sending them by registered mail.  In the first case, the clerk of court shall endorse on the pleading the date and hour of filing.  In the second case, the date of the mailing of motions, pleadings, or any other papers or payments or deposits, as shown by the post office stamp on the envelope or the registry receipt, shall be considered as the date of their filing, payment, or deposit in court.  The envelope shall be attached to the record of the case.  (Emphases ours.)

To recall, PNB filed its petition with the CTA En Banc four days beyond the extended period granted to it to file such petition.  PNB argues that it was filed on time since it was mailed on the last day of the extended period, which was on December 23, 2005.  It has been established that a pleading “filed by ordinary mail or by private messengerial service x x x is deemed filed on the day it is actually received by the court, and not on the day it was mailed or delivered to the messengerial service.”^[34][34]  In Benguet Electric Cooperative, Inc. v. National Labor Relations Commission,^[35][35] we said:

The established rule is that the date of delivery of pleadings to a private letter-forwarding agency is not to be considered as the date of filing thereof in court, and that in such cases, the date of actual receipt by the court, and not the date of delivery to the private carrier, is deemed the date of filing of that pleading.^[36][36]

It is worthy to note that PNB already asked for an additional period of 15 days within which to file its petition for review with the CTA En Banc.  This period expired on December 23, 2005.  Knowing fully well that December 23, 2005 not only fell on a Friday, followed by three consecutive non-working days, but also belonged to the busiest holiday season of the year, PNB should have exercised more prudence and foresight in filing its petition. 

It is, however, curious why PNB chose to risk the holiday traffic in an effort to personally file its petition with the CTA En Banc, when it already filed a copy to the other party, the CIR, via registered mail.^[37][37]  Considering the circumstances, it would have been more logical for PNB to send its petition to the CTA En Banc on the same occasion it sent a copy to the CIR, especially since that day was already the last day given to PNB to file its petition.  Moreover, PNB offered no justification as to why it sent its petition via ordinary mail instead of registered mail.  “Service by ordinary mail is allowed only in instances where no registry service exists.”^[38][38]  Rule 13, Section 7 reads:

Sec. 7. Service by mail.  Service by registered mail shall be made by depositing the copy in the post office, in a sealed envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his residence, if known, with postage fully pre-paid, and with instructions to the postmaster to return the mail to the sender after ten (l0) days if undelivered.  If no registry service is available in the locality of either the sender or the addressee, service may be done by ordinary mail. (Emphasis ours.)

Petition was not accompanied by the

required duplicate originals or certified

true copies of the decision and resolution

being assailed, and Affidavit of Service

          The following provisions are instructive:

Section 2, Rule 6 of the Revised Rules of the Court of Tax Appeals:

SEC. 2. Petition for review; contents. – The petition for review shall contain allegations showing the jurisdiction of the Court, a concise statement of the complete facts and a summary statement of the issues involved in the case, as well as the reasons relied upon for the review of the challenged decision.  The petition shall be verified and must contain a certification against forum shopping as provided in Section 3, Rule 46 of the Rules of Court.  A clearly legible duplicate original or certified true copy of the decision appealed from shall be attached to the petition. (Emphasis supplied.)

Section 4(b), Rule 8 of the Revised Rules of the Court of Tax Appeals:

Sec. 4(b) An appeal from a decision or resolution of the Court in Division on a motion for reconsideration or new trial shall be taken to the Court by petition for review as provided in Rule 43 of the Rules of Court.  The Court en banc shall act on the appeal.

Sections 6, Rule 43 of the Rules of Court:

Sec. 6. Contents of the petition. The petition for review shall (a) state the full names of the parties to the case, without impleading the court or agencies either as petitioners or respondents; (b) contain a concise statement of the facts and issues involved and the grounds relied upon for the review; (c) be accompanied by a clearly legible duplicate original or a certified true copy of the award, judgment, final order or resolution appealed from, together with certified true copies of such material portions of the record referred to therein and other supporting papers; and (d) contain a sworn certification against forum shopping as provided in the last paragraph of section 2, Rule 42. The petition shall state the specific material dates showing that it was filed within the period fixed herein. (Emphasis ours.)

This Court has already upheld the mandatory character of attaching duplicate originals or certified true copies of the assailed decision to a petition for review.^[39][39]  Moreover, pursuant to Section 7, Rule 43 of the Rules of Court, non-compliance with such mandatory requirement is a sufficient ground to dismiss the petition, viz:

            Sec. 7. Effect of failure to comply with requirements. The failure of the petitioner to comply with any of the foregoing requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of service of the petition, and the contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof.  (Emphasis ours.)

          Anent the failure to attach the Affidavit of Service, Section 13, Rule 13 of the Rules of Court provides:

Sec. 13. Proof of service.  Proof of personal service shall consist of a written admission of the party served, or the official return of the server, or the affidavit of the party serving, containing a full statement of the date, place and manner of service. If the service is by ordinary mail, proof thereof shall consist of an affidavit of the person mailing of facts showing compliance with section 7 of this Rule. If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office.  The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together with the certified or sworn copy of the notice given by the postmaster to the addressee.

          Although the failure to attach the required affidavit of service is not fatal if the registry receipt attached to the petition clearly shows service to the other party, ^[40][40] it must be remembered that this was not the only rule of procedure PNB failed to satisfy.  In Suarez v. Judge Villarama, Jr.^[41][41] we said: 

It is an accepted tenet that rules of procedure must be faithfully followed except only when, for persuasive and weighting reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his failure to comply with the prescribed procedure.  Concomitant to a liberal interpretation of the rules of procedure, however, should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules.^[42][42]

This Court agrees with the CTA En Banc that PNB has not demonstrated any cogent reason for this Court to take an exception and excuse PNB’s blatant disregard of the basic procedural rules in a petition for review.  Furthermore, the timely perfection of an appeal is a mandatory requirement.  One cannot escape the rigid observance of this rule by claiming oversight, or in this case, lack of foresight.  Neither can it be trifled with as a “mere technicality” to suit the interest of a party.  Verily, the periods for filing petitions for review and for certiorari are to be observed religiously.  “Just as [the] losing party has the privilege to file an appeal within the prescribed period, so does the winner have the x x x right to enjoy the finality of the decision.”^[43][43]  In Air France Philippines v. Leachon,^[44][44] we held:

Procedural rules setting the period for perfecting an appeal or filing an appellate petition are generally inviolable.  It is doctrinally entrenched that appeal is not a constitutional right but a mere statutory privilege.  Hence, parties who seek to avail of the privilege must comply with the statutes or rules allowing it.  The requirements for perfecting an appeal within the reglementary period specified in the law must, as a rule, be strictly followed.  Such requirements are considered indispensable interdictions against needless delays, and are necessary for the orderly discharge of the judicial business.  For sure, the perfection of an appeal in the manner and within the period set by law is not only mandatory, but jurisdictional as well.  Failure to perfect an appeal renders the judgment appealed from final and executory.^[45][45]

While it is true that the Court may deviate from the foregoing rule, this is true only if the appeal is meritorious on its face.  The Court has not hesitated to relax the procedural rules in order to serve and achieve substantial justice.  “In the circumstances obtaining in this case however, the occasion does not warrant the desired relaxation.”^[46][46]  PNB has not offered any meritorious legal defense to justify the suspension of the rules in its favor.  The CTA Division has taken into consideration all of the evidence submitted by the PNB, and actually allowed it a refund of ₱1,428,661.66, in addition to the ₱4,154,353.42 the BIR already gave.  The CTA Division explained why it disallowed the remaining balance of ₱445,578.92 in its Decision dated August 11, 2005.  When PNB moved to reconsider this decision, it did not offer the CTA any other evidence or explanation aside from the ones the CTA Division had already evaluated.  Nevertheless, the CTA carefully considered and deliberated anew PNB’s grounds, albeit they found them lacking in merit.  Thus, it cannot be said that PNB was deprived of its day in court, as in fact, it was given all the time it had asked for. 

While PNB may believe that it has a meritorious legal defense, this must be weighed against the need to halt an abuse of the flexibility of procedural rules.  It is well established that faithful compliance with the Rules of Court is essential for the prevention and avoidance of unnecessary delays and for the organized and efficient dispatch of judicial business.^[47][47] 

WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

                                                 TERESITA J. LEONARDO-DE CASTRO

                                       Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, 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

CASE 2011-0232: MA. JOY TERESA BILBAO VS. SAUDI ARABIAN AIRLINES (G.R. NO. 183915, 14 DECEMBER 2011, LEONARDO-DE CASTRO, J ) SUBJECT: RESIGNATION (BRIEF TITLE: BILBAO VS. SAUDI ARABIAN AIRLINE)

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DISPOSITIVE

WHEREFORE, the petition is DENIED.  The Decision dated May 30, 2008 and the Resolution dated July 22, 2008 of the Court of Appeals in CA-G.R. No. 102319 are AFFIRMED.

SO ORDERED.

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Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

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

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Before the Court is a petition for review on certiorari seeking the reversal of the May 30, 2008 Decision^[1][1] of the Court of Appeals in CA-G.R. No. 102319 and its July 22, 2008 Resolution^[2][2] denying petitioner Ma. Joy Teresa O. Bilbao’s (Bilbao) motion for reconsideration.  The assailed decision affirmed the ruling of the National Labor Relations Commission (NLRC) which held thatBilbao was not illegally dismissed and had voluntarily resigned.  The NLRC reversed and set aside the decision of the Labor Arbiter which ruled that Bilbao, together with two other complainants, was illegally dismissed by respondent Saudi Arabian Airlines (Saudia) and ordered the payment of full backwages, separation pay, and attorney’s fees. 

          The facts are as follows:

         Bilbaowas a former employee of respondent Saudia, having been hired as a Flight Attendant on May 13, 1986 until her separation from Saudia in September 2004.  During the course of her employment,Bilbaowas assigned to work at the Manila Office, although the nature of her work as a flight attendant entailed regular flights fromManilatoJeddah,Saudi Arabia, and back.

          On August 25, 2004, the In-Flight Service Senior Manager of Saudia assigned in Manilareceived an inter-office Memorandum dated August 17, 2004 from its Jeddah Office regarding the transfer of 10 flight attendants from Manilato Jeddah effective September 1, 2004.  The said memorandum explained that such transfer was made “due to operational requirements.”^[3][3] Bilbao was among the 10 flight attendants to be transferred.

         Bilbaoinitially complied with the transfer order and proceeded to Jeddah for her new assignment.  However, on September 7, 2004, she opted to resign and relinquish her post by tendering a resignation letter, which reads:

Jeddah IFS Base Manager (F)

F/A  Maria Joy Teresa O. Bilbao

PRN:  3006078

22  /  07  /  1425 H     7  /  09  /  2004

RESIGNATION

I am tendering my resignation with one (1) month notice effective 18 October 2004.  Thank you for the support you have given me during my 18 years of service.

                                                            (signed)

                                                            ________________

                                                            F/A’s SIGNATURE

                                                            3006078         

(signed)                                                September 7, 2004

_________________

AMIN GHABRA

SNR. MGR. IFS JED (F)

(signed)

ABDULLAH BALKHOYOUR

GM IFS CABIN CREW

8/8/1425

21/9/04                                                ADMIN ACKNOWLEDGEMENT / DATE^[4][4]

           On October 28, 2004, Bilbao executed and signed an Undertaking^[5][5] similar to that of a Receipt, Release and Quitclaim wherein she acknowledged receipt of a sum of money as “full and complete end-of-service award with final settlement and have no further claims whatsoever against Saudi Arabian Airlines.”^[6][6] 

          In spite of this signed Undertaking, however, on July 20, 2005,Bilbaofiled with the NLRC a complaint for reinstatement and payment of full backwages; moral, exemplary and actual damages; and attorney’s fees.  Two of the other flight attendants who were included in the list for transfer to Jeddah, Shalimar Centi-Mandanas and Maria Lourdes Castells, also filed their respective complaints against Saudia.  These complaints were eventually consolidated into NLRC-NCR Case Nos. 00-07-06315-05 and 00-08-06745-05, and assigned to Labor Arbiter Ramon Valentin C. Reyes.

          For her part,Bilbaomaintained that her resignation from Saudia was not voluntary.  She narrated that she was made to sign a pre-typed resignation letter and was even reminded that the same was a better option than termination which would tarnish her record of service with Saudia. Bilbaoand her co-complainants shared a common theory that their transfer to Jeddah was a prelude to their termination since they were all allegedly between 39 and 40 years of age.

          Upon the other hand, Saudia averred that the resignation letters fromBilbaoand her co-complainants were voluntarily made since they were actually hand-written and duly signed.  Saudia asserted thatBilbaoand her co-complainants were not subjected to any force, intimidation, or coercion when they wrote said resignation letters and even their undertakings, after receiving without protest a generous separation package despite the fact that employees who voluntarily resign are not entitled to any separation pay.  Saudia also added that the transfer of flight attendants from their Manila Office to the Jeddah Office was a valid exercise of its management prerogative. 

          On August 31, 2006, Labor Arbiter Reyes rendered a Decision^[7][7] declaring that Bilbao, together with co-complainants Centi-Mandanas and Castells, was illegally dismissed, and ordering Saudia to pay each of the complainants full backwages from the time of the illegal dismissal until the finality of the decision, separation pay of one month for every year of service less the amount already received, plus ten percent (10%) attorney’s fees on the amounts actually determined to be due the complainants. 

           Saudia filed an appeal before the NLRC alleging thatBilbaoand her co-complainants voluntarily executed their resignation letters and undertakings; thus, they were not illegally dismissed.  Moreover, Saudia opined thatBilbaoand her co-complainants’ claim of illegal dismissal was a mere afterthought as they waited for almost one year from the date of their alleged dismissal to file their respective complaints. 

         Bilbaofollowed suit and also appealed before the NLRC, arguing that she was entitled to the payment of moral and exemplary damages since her termination was allegedly attended by bad faith, fraud and deceit. 

          On June 25, 2007, the NLRC granted Saudia’s appeal, and reversed and set aside the decision of the Labor Arbiter.  The decretal portion of the NLRC decision reads:

WHEREFORE, the foregoing premises considered, the respondents’ appeal is hereby GRANTED.  The decision appealed from is REVERSED and SET ASIDE and a new one is issued finding the respondent not guilty of illegal dismissal.

For lack of merit, the complainant Bilbao’s appeal is DISMISSED.

Accordingly, the complaint is DISMISSED.^[8][8]

          In a Resolution^[9][9] dated October 26, 2007, the NLRC amended its earlier Resolution dated June 25, 2007, to state that Castells and Centi-Mandanas were also not entitled to moral and exemplary damages.  Moreover, the NLRC failed to find any compelling justification or valid reason to modify, alter or reverse its earlier resolution, thus:

WHEREFORE, the foregoing premises considered, the Appeals and Motions for Reconsideration of complainants Maria Lourdes Castells and Shalimar Centi-Mandanas are hereby DISMISSED for lack of merit.

Likewise, the Motion for Reconsideration of Maria Joy Teresa Bilbao is DENIED.

No further motion of similar nature shall be entertained.^[10][10]

          Bilbaowent to the Court of Appeals via a petition for certiorari alleging grave abuse of discretion on the part of the NLRC in ruling that she was not illegally dismissed and not entitled to the payment of moral and exemplary damages. 

          On May 30, 2008, the Court of Appeals affirmed the Resolutions of the NLRC dated June 25, 2007 and October 26, 2007, and held that the resignation of Bilbaowas “of her own free will and intelligent act.”^[11][11] 

          Dissatisfied,Bilbaofiled a motion for reconsideration which was denied by the Court of Appeals in the Resolution dated July 22, 2008. 

          Hence, the instant petition for review filed byBilbaoon the following grounds:

6.  GROUND FOR THIS PETITION/ISSUES

6.1.  The Court of Appeals committed reversible error in upholding the erroneous Decision of the NLRC, Third Division which Decision reversed the Labor Arbiter’s findings.  The Court of Appeals decided the case in a way probably not in accord with law or with applicable decisions of the Supreme Court.

6.2.  The Court of Appeals committed palpable error in ruling that petitioner was not forced to resign; the Court of Appeals decided the case in a way probably not in accord with law and contrary to applicable decisions of the Supreme Court.

6.3.  The Court of Appeals committed patent mistake in ruling that the petitioners’ (sic) termination was valid because respondent had the right to terminate the petitioner even without just cause; this is an outright violation of the Labor Code and applicable laws and jurisprudence; The Court of Appeals likewise erred in validating the resignation because it was accompanied with words of gratitude and payment of separation benefits.^[12][12]

In her Petition^[13][13] dated September 15, 2008, Bilbao asserts that the initial step of Saudia in transferring her to Jeddah was, by itself, constructive dismissal since the transfer order was unreasonable, discriminatory, attended by bad faith, and would result to demotion in rank or diminution in pay.  Moreover,Bilbao maintains that her resignation letter was not voluntarily made as it was in a pre-typed form supplied by Saudia, and was accomplished when she was under pressure and had no choice but to resign.  Lastly,Bilbao insists that the undertaking or waiver and quitclaim that she signed in favor of Saudia was invalid as she particularly puts in issue the voluntariness of its execution.

In its Comment^[14][14] dated November 14, 2008, Saudia preliminarily asserts that the petition raises the factual issue of whether or not Bilbao voluntarily resigned from her employment with Saudia, which is not proper for a petition for review under Rule 45 of the Rules of Court, thus warranting its outright dismissal.  Nonetheless, Saudia presents its arguments and contends that it validly exercised its management prerogative in transferringBilbao to another work station.  Saudia then enumerates the following factual circumstances which allegedly reveal the voluntariness ofBilbao’s resignation, to wit:

a)      [Bilbao’s] resignation letter was penned in her own handwriting and duly signed by her;

b)      [Bilbao] tendered her letter of resignation in Jeddah, KSA on 07 September 2004;

c)      [Bilbao] is of sufficient age and discretion, could read, write, and understand English and a college graduate;

d)     There is no proof that any material or physical force was applied on her person or her family;

e)      [Bilbao] then voluntarily executed an Undertaking acknowledging receipt of various sums of money and irrevocably and unconditionally releasing Saudia, its directors, stockholders, officers and employees from any claim or demand whatsoever in law or equity which they may have in connection with her employment with respondent;

f)       [Bilbao] received generous financial benefits without protest;

g)      It took [Bilbao] at least one (1) year from the date of the alleged dismissal to file her Complaint against [Saudia]; and 

h)      The intimidation, force or coercion allegedly employed by [Saudia] surfaced, for the first time, when the Complaint were (sic) filed on 20 July 2005, which was then amended on 01 September 2005.^[15][15]

Lastly, Saudia claims thatBilbaois not entitled to any award of moral and exemplary damages since there is no dismissal, much less illegal dismissal committed by Saudia, asBilbaovoluntarily resigned from her employment.

This Court finds no merit in the petition.

At the outset, it bears stressing that the jurisdiction of this Court in a petition for review under Rule 45 of the Rules of Court, as amended, is generally confined only to errors of law.  It does not extend to questions of fact.  This rule, however, admits of exceptions, such as in the instant case, where the findings of fact and the conclusions of the Labor Arbiter are inconsistent with those of the NLRC and the Court of Appeals.^[16][16]  To recall, the Labor Arbiter found that Saudia illegally dismissedBilbao, while the NLRC and the Court of Appeals are in agreement thatBilbao voluntarily tendered her resignation. 

          After a review of the case, we uphold the findings of the Court of Appeals thatBilbaovoluntarily resigned from her employment with Saudia.  Her resignation letter and undertaking that evidenced her receipt of separation pay, when taken together with her educational attainment and the circumstances surrounding the filing of the complaint for illegal dismissal, comprise substantial proof ofBilbao’s voluntary resignation. 

          Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment.  It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment.  As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether he or she, in fact, intended to sever his or her employment.^[17][17]

          In the instant case,Bilbaotendered her resignation letter a week after her transfer to the Jeddah office.  In the said letter,Bilbaoexpressed her gratitude for the support which Saudia had given her for her eighteen years of service.  Clearly, her use of words of appreciation and gratitude negates the notion that she was forced and coerced to resign.  Besides, the resignation letter was hand-written byBilbaoon a Saudia form and was in English, a language she is conversant in. 

Additionally, instead of immediately filing a complaint for illegal dismissal after she was allegedly forced to resign,Bilbaoexecuted an Undertaking in favor of Saudia, wherein she declared that she received her full and complete end-of-service award with final settlement, to wit:

I, the undersigned employee

Name/ MARIA JOY TERESA O. BILBAO

PRN/ 3006078

hereby declare that I have received my full and complete end-of-service award with final settlement and have no further claims whatsoever against Saudi Arabian Airlines.

By signing this undertaking, I also fully Understand that any other future claims filed by me shall not be considered, accepted, or entertained.

Name: MARIA JOY TERESA O. BILBAO

PRN: 3006078

Signature: (SGD.)

Date: October 25, 2004^[18][18]

What is more,Bilbaowaited for more than 10 months after her separation from Saudia to file a complaint for illegal dismissal. 

Despite the foregoing circumstances,Bilbaomaintains that she was forced and coerced into writing the said resignation letter in the form prepared by Saudia, and that she was left with no other option but to resign.  Saudia, on the other hand, claims thatBilbao’s resignation was voluntary, thus, there could be no illegal dismissal.

Even assuming that Saudia prepared the form in whichBilbaowrote her resignation letter as claimed, this Court is not convinced that she was coerced and intimidated into signing it. Bilbaois no ordinary employee who may not be able to completely comprehend and realize the consequences of her acts.  She is an educated individual.  It is highly improbable that with her long years in the profession and her educational attainment, she could be tricked and forced into doing something she does not intend to do.  Under these circumstances, it can hardly be said thatBilbaowas coerced into resigning from Saudia.

Besides, Bilbaodid not adduce any competent evidence to prove that she was forced or threatened by Saudia.  It must be remembered that for intimidation to vitiate consent, the following requisites must be present: (1) that the intimidation caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be real or serious, there being evident disproportion between the evil and the resistance which all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil; and (4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or property.^[19][19]  In the instant case,Bilbao did not prove the existence of any one of these essential elements.  Bare and self-serving allegations of coercion or intimidation, unsubstantiated by evidence, do not constitute proof to sufficiently support a finding of forced resignation.  It would be utterly unfair and unjust to hold that Saudia illegally dismissedBilbao and to impose upon it the burden of accepting backBilbao who unequivocally and voluntarily manifested her intent and willingness to sever her employment ties.

Anent the Undertaking signed by Bilbao, this Court is of the opinion that the same was validly and voluntarily executed.  Indeed, not all waivers and quitclaims are invalid as against public policy.  There are legitimate waivers and quitclaims that represent a voluntary and reasonable settlement of workers’ claims which should be respected by the courts as the law between the parties.^[20][20]  And if such agreement was voluntarily entered into and represented a reasonable settlement, it is binding on the parties and should not later be disowned. 

Periquet v. National Labor Relations Commission,^[21][21] held that:

Not all waivers and quitclaims are invalid as against public policy.  If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind.  It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction.  But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. x x x.^[22][22]

This Court quotes with approval the finding of the NLRC, to wit:

Having signed the waiver, it is hard to conclude that [Bilbaowas] merely forced by the necessity to execute the “undertaking.” [Bilbaois] not [a] gullible nor unsuspecting [person] who can easily be tricked or inveigled and, thus, need the extra protection of law.  [She is a] well-educated and highly experienced flight [attendant].  The “undertaking” executed by [Bilbaois] therefore considered valid and binding on [her] and [Saudia].

Due to [her] voluntary resignation, [Bilbaois] actually not entitled to any separation pay benefits.  Thus, the financial package given to [her] is more than sufficient consideration for [her] execution of the “undertaking.”^[23][23]

          Clearly then,Bilbao’s claim that she was illegally dismissed cannot be sustained.  There is no showing that the Undertaking and resignation letter were executed byBilbaounder force or intimidation. Bilbao’s claims for reinstatement, payment of backwages without loss of seniority rights and with interest, moral and exemplary damages, and attorney’s fees must inevitably fail. 

          This Court has always reminded that:

Although the Supreme Court has, more often than not, been inclined towards the workers and has upheld their cause in their conflicts with the employers, such inclination has not blinded it to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.  An employee who resigns and executes a quitclaim in favor of the employer is generally stopped from filing any further money claims against the employer arising from the employment.^[24][24]

          WHEREFORE, the petition is DENIED.  The Decision dated May 30, 2008 and the Resolution dated July 22, 2008 of the Court of Appeals in CA-G.R. No. 102319 are AFFIRMED.

SO ORDERED.

                                                 TERESITA J. LEONARDO-DE CASTRO

                                       Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, 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

CASE 2011-0231: EVILINA C. BANAAG VS. OLIVIA C. ESPELETA, INTERPRETER III, BRANCH 82, REGIONAL TRIAL COURT, QUEZON CITY (A.M. NO. P-11-3011, 16 DECEMBER 2011, PERLAS-BERNABE, J.) SUBJECT: DISGRACEFUL AND IMMORAL CONDUCT; SUBSTANTIAL EVIDENCE; (BRIEF TITLE: BANAAN VS. ESPELITA)

========================== 

DISPOSITIVE:

WHEREFORE, respondent OLIVIA C. ESPELETA is found GUILTY of Disgraceful and Immoral Conduct. In view of her resignation, a FINE in the amount of P50,000.00 is imposed on respondent, to be deducted from her accrued leave credits, if sufficient; otherwise, she is ORDERED to pay the amount of the fine directly to this Court.

The Employees Leave Division, Office of Administrative Services of the Office of the Court Administrator, is DIRECTED to compute respondent’s accrued leave credits, if any, and deduct therefrom the amount representing the payment of the fine.

Let a copy of this Decision be filed in the personal record of respondent.

SO ORDERED.

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

SUBJECT/DOCTRINE/DIGEST

ESPELITA, A COURT INTERPRETER  MAINTAINED AN ILLICIT RELATIONSHIP WITH A CERTAIN MR. BANAAG EVIDENCED BY BANK DEPOSIT SLIPS MADE BY THE LATTER IN FAVOR OF ESPELITA. WHAT OFFENSE DID ESPELITA COMMIT?

DISGRACEFUL AND IMMORAL CONDUCT.

XXXXXXXXXXXXXXXXX

WHAT IS THE OFFENSE OF DISGRACEFUL AND IMMORAL CONDUCT?

IT IS  “AN ACT WHICH VIOLATES THE BASIC NORM OF DECENCY, MORALITY AND DECORUM ABHORRED AND CONDEMNED BY THE SOCIETY” AND “CONDUCT WHICH IS WILLFUL, FLAGRANT OR SHAMELESS, AND WHICH SHOWS A MORAL INDIFFERENCE TO THE OPINIONS OF THE GOOD AND RESPECTABLE MEMBERS OF THE COMMUNITY.”

After a careful evaluation of the records of the instant case, the Court finds respondent Olivia C. Espeleta guilty of Disgraceful and Immoral Conduct under Section 46(b)(5), Chapter 7, Subtitle A, Title I, Book V of the Administrative Code of 1987 which, as defined in Section 1 of CSC Resolution No. 100912 dated May 17, 2010 (Revised Rules on the Administrative Offense of Disgraceful and Immoral Conduct), is “an act which violates the basic norm of decency, morality and decorum abhorred and condemned by the society” and “conduct which is willful, flagrant or shameless, and which shows a moral indifference to the opinions of the good and respectable members of the community.”

XXXXXXXXXXXXXXXXX

WHAT IS THE DEGREE OF SUCH OFFENSE?

GRAVE.

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WHAT IS THE PENALTY?

SUSPENSION FROM THE SERVICE FOR SIX (6) MONTHS AND ONE (1) DAY TO ONE (1) YEAR FOR THE FIRST OFFENSE, AND DISMISSAL FOR THE SECOND OFFENSE.²⁷

Respondent’s act of maintaining an illicit relationship with a married man comes within the purview of disgraceful and immoral conduct,²⁶ which is classified as a grave offense punishable with suspension from the service for six (6) months and one (1) day to one (1) year for the first offense, and dismissal for the second offense.²⁷

XXXXXXXXXXXXXXXXX

ARE THERE PRECEDENTS?

YES. SOME PRECEDENTS ARE AS FOLLOWS:

In Sealana-Abbu vs. Laurenciana-Huraño²⁸ (2007), where two court stenographers engaged in an illicit affair were suspended for one (1) year, the Court emphasized that “(i)t is morally reprehensible for a married man or woman to maintain intimate relations with another person of the opposite sex other than his or her spouse.” In Elape vs. Elape²⁹ (2008), a process server of the RTC was suspended for six (6) months and one (1) day for cohabiting with his mistress, abandoning his family and depriving them of financial support. Another process server was suspended for the same period in Regir vs. Regir³⁰ (2009) for carrying on an illicit relationship with a woman not his wife, with whom he begot a child. Recently, in Babante-Caples vs. Caples³¹ (2010), a utility worker in the MTC, who had resigned, was nonetheless ordered to pay a fine for maintaining an illicit relationship with a woman not his wife.

As in Babante-Caples, respondent herein was given the opportunity to be heard and refute the charges against her; yet, she chose not to file any comment. Instead, as aptly pointed out by the OCA, respondent rather hastily tendered her resignation on June 11, 2009, just a few days after receipt on June 2, 2009³² of the 1^st Indorsement specifically requiring her to answer the letter-complaint. That respondent fully intended to run away from accountability for her indiscretions is betrayed by her perfectly-timed departure for theUnited States of America shortly after her resignation. Respondent’s actuations when confronted with the charges against her are, thus, strongly indicative of guilt on her part.

XXXXXXXXXXXXXXXXX

HOW DID THE COURT EVALUATE THE EVIDENCE AGAINST ESPELITA?

IN THIS WISE:

The deposit slips indicating various amounts credited both directly and indirectly to respondent’s account indubitably prove the allegation that she had been receiving substantial amounts of money from complainant’s husband, in callous disregard of the heartache and financial dislocation of the latter’s family. There could thus not be any serious doubt that respondent was indeed in an intimate relationship with Avelino, a married man.

XXXXXXXXXXXXXXX

WHAT IS THE DEGREE OF EVIDENCE APPLIED BY THE COURT?

SUBSTANTIAL EVIDENCE.

XXXXXXXXXXXXXXXX

WHAT IS SUBSTANTIAL EVIDENCE?

THAT AMOUNT OF RELEVANT EVIDENCE THAT A REASONABLE MIND MIGHT ACCEPT AS ADEQUATE TO SUPPORT A CONCLUSION, IS REQUIRED.³³

XXXXXXXXXXXXX

WHEN IS THE STANDARD OF SUBSTANTIAL EVIDENCE SATISFIED?

WHEN THERE IS REASONABLE GROUND TO BELIEVE THAT RESPONDENT IS RESPONSIBLE FOR THE MISCONDUCT COMPLAINED OF, EVEN IF SUCH EVIDENCE MIGHT NOT BE OVERWHELMING OR EVEN PREPONDERANT.³⁴

In administrative proceedings, only substantial evidence, i.e., that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion, is required.³³ The standard of substantial evidence is satisfied when there is reasonable ground to believe that respondent is responsible for the misconduct complained of, even if such evidence might not be overwhelming or even preponderant.³⁴

XXXXXXXXXXXXXXX

WHY SHOULD IMMORAL CONDUCT BE PENALIZED STRICTLY?

BECAUSE THE IMAGE OF A COURT OF JUSTICE IS MIRRORED IN THE CONDUCT, OFFICIAL AND OTHERWISE, OF THE PERSONNEL WHO WORK THEREAT, FROM THE JUDGE TO THE LOWEST OF ITS PERSONNEL. COURT EMPLOYEES HAVE BEEN ENJOINED TO ADHERE TO THE EXACTING STANDARDS OF MORALITY AND DECENCY IN THEIR PROFESSIONAL AND PRIVATE CONDUCT IN ORDER TO PRESERVE THE GOOD NAME AND INTEGRITY OF COURTS OF JUSTICE.”³⁵

XXXXXXXXXXXXX

BUT ESPELITA HAS ALREADY RESIGNED. WILL SHE STILL BE SANCTIONED?

YES, BY PAYING FINE  OF P50,000.00.. RESIGNATION SHOULD NOT BE USED EITHER AS AN ESCAPE OR AS AN EASY WAY OUT TO EVADE AN ADMINISTRATIVE SANCTION.

“It cannot be overstressed that the image of a court of justice is mirrored in the conduct, official and otherwise, of the personnel who work thereat, from the judge to the lowest of its personnel. Court employees have been enjoined to adhere to the exacting standards of morality and decency in their professional and private conduct in order to preserve the good name and integrity of courts of justice.”³⁵ This Court has thus consistently penalized court personnel who had been found wanting of such standards, even if they have precipitately resigned from their positions. Resignation should not be used either as an escape or as an easy way out to evade an administrative liability or an administrative sanction.³⁶

Had respondent not resigned from the service, she would have been suspended for six months and one day in accordance with the prescribed penalty in the Uniform Rules on Administrative Cases in the Civil Service³⁷, this being her first offense involving immorality. Instead, the Court adopts the OCA’s recommended fine in the amount of P50,000.00 not exceeding respondent’s six months’ salary, which may be deducted from her accrued leave credits, if sufficient.

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

EN BANC

x—————————————————————————————–x

DECISION

PERLAS-BERNABE, J.:

“Can a man scoop fire into his lap without his clothes being burned? Can a man walk on hot coals without his feet being scorched?” So goes an early admonition against immorality from the Holy Book that is as valuable today as it was thousands of years ago. In the judiciary, “moral integrity is more than a virtue; it is a necessity”.¹ A court employee who has fallen short of the exacting standards of morality and decency has to face the consequences, even after the embers have died and the scars have faded.

The Facts

The present administrative case originated from a letter-complaint² dated May 3, 2009 filed by complainant Evelina C. Banaag before the Office of the Court Administrator (OCA) charging respondent Olivia C. Espeleta with Gross Immorality and Conduct Prejudicial to the Best Interest of the Service for engaging in an illicit and immoral relationship with her husband, Avelino C. Banaag.

Evelina met Olivia for the first time in October 2005 when the latter accompanied Gloria Tubtub to her house at JB Crystal Building, Quirino Highway, Lagro, Quezon City, to request for encashment of a check in the amount of P11,000.00. It turned out that the check, which Evelina encashed out of pity for Gloria who was her “sister” in a Marriage Encounter group and who told her that she needed money for her grandchild who was supposedly hospitalized, actually belonged to Olivia. According to Gloria, she did not intend to deceive her friend but only wanted to help Olivia, who gave her a “small token” for the transaction.³

At the same meeting, Olivia introduced herself as a court interpreter in the Regional Trial Court (RTC) ofQuezon City, Branch 82. Believing that Olivia could assist her and her husband in their pending cases before the court, Evelina introduced Olivia to her husband who, after learning that they both hail from Batangas, asked for Olivia’s cellphone number. Little did Evelina know that said casual meeting would eventually blossom into an amorous relationship between Olivia and her husband.

Evelina claimed that she learned about the affair the following year, 2006, when her husband asked to withdraw P180,000.00 from their joint bank account to lend to his brother, Reynaldo, who was then confined in the hospital. She later found out from the latter’s wife, Ana Fe, that Avelino gave him (Reynaldo) only P80,000.00. Ana Fe cautioned Evelina against releasing more money to her husband who has a mistress working at the City Hall.

Upon investigation, Evelina learned that on two separate occasions in 2006, her husband had gone to Olivia’s house in San Jose Del Monte, Bulacan, accompanied by his friend, Engr. Pacifico “Jun” R. Sabigan. On both occasions, according to Sabigan, they had some drinks, and Olivia danced. Avelino, already tipsy, danced with her. Although Sabigan did not witness any compromising exchanges between the two, nonetheless, Avelino had confided to him that he and Olivia were seeing each other, and that he had been giving Olivia P5,000.00 for her groceries.⁴

Evelina confronted her husband right away. He was tight-lipped at first, but he eventually admitted his romantic involvement with Olivia. Worse, Evelina discovered that her husband, using their conjugal funds, had been depositing substantial amounts of money to Olivia’s Landbank account⁵ for three years spanning 2006 to 2009, as well as to the Metrobank account⁶ of the latter’s daughter, Ana Kharmela E. Rules. He also made deposits to the Landbank accounts of Olivia’s co-employees, Pacencia Rodriguez⁷ and Olga Abesamis⁸. When confronted, Olga allegedly confirmed that the deposits to her account were for the benefit of Olivia who, at that time, had no ATM card.

Evelina claimed that more than P3 Million had been deposited to Olivia’s account but she was able to retain in her possession deposit slips amounting only to P1.429 Million, having lost the others in a scuffle with her husband, who tore them to pieces and flushed them in the toilet. For a long time, Avelino was the administrator of the family-owned JB Crystal Building, which earned rentals that he himself collected in cash. This, Evelina surmised, enabled her husband to support Olivia financially.

To bolster her claims, Evelina attached to her letter-complaint (1) photocopies⁹ of cash deposit slips evidencing Avelino’s deposits to Olivia’s account wherein he indicated his relationship to the latter as a “cousin”, as well as to the accounts of Olivia’s daughter and co-employees; and (2) summaries¹⁰ of unremitted rentals from their commercial building and unauthorized withdrawals made by Avelino from their bank account. She likewise submitted in evidence the affidavits executed by Gloria Tubtub¹¹ and Engr. Sabigan¹² confirming the illicit relationship.

The Action and Recommendation of the OCA

The OCA directed respondent Olivia to comment on the letter-complaint within ten (10) days from receipt of its 1^st Indorsement¹³ dated May 18, 2009. However, Olivia failed to comply therewith. A similar notice¹⁴ was subsequently issued by the OCA on August 19, 2009, to no avail. On January 21, 2010, the OCA reported¹⁵ the matter to this Court recommending that Olivia be directed for the last time to submit her comment otherwise the case against her shall be resolved on the basis of the record on file. Accordingly, the First Division issued the pertinent Resolution¹⁶ dated April 28, 2010, which was, however, returned unserved with the notation “No occupant at given address”. It was served anew per Resolution¹⁷ dated August 16, 2010, but was likewise returned unserved for the reason “RTS-Moved”.¹⁸ The Court thereafter sent the case back to the OCA for evaluation, report and recommendation.¹⁹

Upon verification with the Office of Administrative Services (OAS), it was found that Olivia had filed a letter²⁰ of resignation dated June 11, 2009, which was favorably endorsed²¹ both by the Presiding Judge of Branch 82 and the Executive Judge of the RTC. In a subsequent letter²² dated August 12, 2009, Presiding Judge Severino B. De Castro, Jr. informed the OCA that Olivia had gone to the United States, and that it was not known whether she intended to return to the country. Hence, upon the recommendation²³ of the OCA, the resignation was accepted by this Court on February 26, 2010 without prejudice to the outcome of the instant administrative case.

On August 11, 2011, the OCA reported its findings²⁴ on the case and recommended that:

1. The instant administrative matter be RE-DOCKETED as a regular administrative complaint against Olivia C. Espeleta, former Interpreter III. Regional Trial Court, Branch 82,Quezon City; and

2. Respondent Olivia C. Espeleta be found GUILTY of Gross Immoral Conduct, and be ORDERED to pay a FINE in the amount of P50,000.00, which may be deducted from whatever sums that are due her, as accrued leave credits, if sufficient.²⁵

The Issue

The only issue to be resolved is whether respondent Olivia C. Espeleta is guilty of immoral conduct.

The Ruling of the Court

After a careful evaluation of the records of the instant case, the Court finds respondent Olivia C. Espeleta guilty of Disgraceful and Immoral Conduct under Section 46(b)(5), Chapter 7, Subtitle A, Title I, Book V of the Administrative Code of 1987 which, as defined in Section 1 of CSC Resolution No. 100912 dated May 17, 2010 (Revised Rules on the Administrative Offense of Disgraceful and Immoral Conduct), is “an act which violates the basic norm of decency, morality and decorum abhorred and condemned by the society” and “conduct which is willful, flagrant or shameless, and which shows a moral indifference to the opinions of the good and respectable members of the community.”

Respondent’s act of maintaining an illicit relationship with a married man comes within the purview of disgraceful and immoral conduct,²⁶ which is classified as a grave offense punishable with suspension from the service for six (6) months and one (1) day to one (1) year for the first offense, and dismissal for the second offense.²⁷

In Sealana-Abbu vs. Laurenciana-Huraño²⁸ (2007), where two court stenographers engaged in an illicit affair were suspended for one (1) year, the Court emphasized that “(i)t is morally reprehensible for a married man or woman to maintain intimate relations with another person of the opposite sex other than his or her spouse.” In Elape vs. Elape²⁹ (2008), a process server of the RTC was suspended for six (6) months and one (1) day for cohabiting with his mistress, abandoning his family and depriving them of financial support. Another process server was suspended for the same period in Regir vs. Regir³⁰ (2009) for carrying on an illicit relationship with a woman not his wife, with whom he begot a child. Recently, in Babante-Caples vs. Caples³¹ (2010), a utility worker in the MTC, who had resigned, was nonetheless ordered to pay a fine for maintaining an illicit relationship with a woman not his wife.

As in Babante-Caples, respondent herein was given the opportunity to be heard and refute the charges against her; yet, she chose not to file any comment. Instead, as aptly pointed out by the OCA, respondent rather hastily tendered her resignation on June 11, 2009, just a few days after receipt on June 2, 2009³² of the 1^st Indorsement specifically requiring her to answer the letter-complaint. That respondent fully intended to run away from accountability for her indiscretions is betrayed by her perfectly-timed departure for theUnited States of America shortly after her resignation. Respondent’s actuations when confronted with the charges against her are, thus, strongly indicative of guilt on her part.

The deposit slips indicating various amounts credited both directly and indirectly to respondent’s account indubitably prove the allegation that she had been receiving substantial amounts of money from complainant’s husband, in callous disregard of the heartache and financial dislocation of the latter’s family. There could thus not be any serious doubt that respondent was indeed in an intimate relationship with Avelino, a married man.

In administrative proceedings, only substantial evidence, i.e., that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion, is required.³³ The standard of substantial evidence is satisfied when there is reasonable ground to believe that respondent is responsible for the misconduct complained of, even if such evidence might not be overwhelming or even preponderant.³⁴

“It cannot be overstressed that the image of a court of justice is mirrored in the conduct, official and otherwise, of the personnel who work thereat, from the judge to the lowest of its personnel. Court employees have been enjoined to adhere to the exacting standards of morality and decency in their professional and private conduct in order to preserve the good name and integrity of courts of justice.”³⁵ This Court has thus consistently penalized court personnel who had been found wanting of such standards, even if they have precipitately resigned from their positions. Resignation should not be used either as an escape or as an easy way out to evade an administrative liability or an administrative sanction.³⁶

Had respondent not resigned from the service, she would have been suspended for six months and one day in accordance with the prescribed penalty in the Uniform Rules on Administrative Cases in the Civil Service³⁷, this being her first offense involving immorality. Instead, the Court adopts the OCA’s recommended fine in the amount of P50,000.00 not exceeding respondent’s six months’ salary, which may be deducted from her accrued leave credits, if sufficient.

WHEREFORE, respondent OLIVIA C. ESPELETA is found GUILTY of Disgraceful and Immoral Conduct. In view of her resignation, a FINE in the amount of P50,000.00 is imposed on respondent, to be deducted from her accrued leave credits, if sufficient; otherwise, she is ORDERED to pay the amount of the fine directly to this Court.

The Employees Leave Division, Office of Administrative Services of the Office of the Court Administrator, is DIRECTED to compute respondent’s accrued leave credits, if any, and deduct therefrom the amount representing the payment of the fine.

Let a copy of this Decision be filed in the personal record of respondent.

SO ORDERED.

ESTELA M. PERLAS-BERNABE

Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO JR.

Associate Justice Associate Justice

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

BIENVENIDO L. REYES

Associate Justice

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 Lledo vs. Lledo, A.M. No. P-95-1167, December 21, 1998, 300 SCRA 310.

2 Rollo, pp. 1-5.

3 See Affidavit of Gloria Tubtub dated June 10, 2009, id. , p. 102.

4 See Affidavit of Engr. Pacifico R. Sabigan dated June 10, 2009, id., p. 104.

5 As evidenced by deposit slips, id., pp. 27-76.

6 Id., pp. 83-86.

7 Id., p. 81.

8 Id., pp. 78-80.

9 Id., pp. 27-86.

10 Id., pp. 90-101.

11 Id., p.102.

12 Id., p. 104.

13 Id., p. 107.

14 1st Tracer dated August 19, 2009, id., p. 109.

15 Id., pp. 316-317.

16 Id., pp. 319-320.

17 Id., p. 327.

18 Per Resolution dated March 23, 2011, id., p. 328.

19 Per Resolution dated June 1, 2011, id., p. 329.

20 Id., p. 330.

21 Id., pp. 332 and 333.

22 Id., p. 336.

23 See Memorandum dated February 17, 2010, id., pp. 340-341.

24 Id., pp. 343-350.

25 Id., p. 350.

26 Babante-Caples vs. Caples, A.M. No. HOJ-10-03 (Formerly A.M. OCA IPI No. 09-04-HOJ), November 15, 2010, 634 SCRA 498.

27 Section 52(A)(15), Rule IV of CSC Resolution No. 99-1936 dated August 31, 1999 (Revised Uniform Rules on Administrative Cases in the Civil Service).

28 A.M. No. P-05-2091, August 28, 2007, 531 SCRA 289.

29 A.M. No. P-08-2431, (formerly OCA IPI No. 03-1682-P), April 16, 2008, 551 SCRA 403.

30 A.M. No. P-06-2282, August 7, 2009, 595 SCRA 455.

31 Supra, note 26.

32 See Registry Return Receipt, 1^st Indorsement dated May 18, 2009, Rollo, p. 107 (dorsal portion).

33 Supra, note 26.

34 Re: Complaint of Mrs. Corazon S. Salvador against Spouses Noel and Amelia Serafico, A.M. No. 2008-20-SC, March 15, 2010.

35 Gibas, Jr. vs. Gibas, A.M. No. P-09-2651, March 23, 2011, citing Bucatcat vs. Bucatcat, 380 Phil. 555, 567 (2000).

36 Cajot vs. Cledera, A.M. No. O-98-1262, February 12, 1998, 286 SCRA 238.

37 Supra, note 27.