Category: LATEST SUPREME COURT CASES


CASE 2011-0159:  HOME DEVELOPMENT MUTUAL FUND (HDMF) VS. Spouses FIDEL and FLORINDA R. SEE and Sheriff MANUEL L. ARIMADO (G.R. NO. 170292, 22 JUNE 2011, DEL CASTILLO, J.) SUBJECT: CERTIORARI (BRIEF TITLE: HOME DEVELOPMENT VS. SEE).

 

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SUBJECT/DOCTRINE/DIGEST:

 

 

RESPONDENT SPOUSES WON IN AN AUCTION SALE OF PAG-IBIG AND PAID THE PRICE TO THE SHERIFF. SHERIFF USED THE MONEY AND DID NOT REMIT TO PAG-IBIG. WHEN RESPONDENTS ASKED FOR THE TITLE PAG-IBIG REFUSED. RESPONDENTS SUED PAG-IBIG AND SHERIFF FOR DELIVERY OF TITLE. THE PARTIES ENTERED INTO COMPROMISE AGREEMENT WHICH PROVIDES THAT SHERIFF PAYS PAG-IBIG AND THE LATTER WILL DELIVER TITLE TO RESPONDENTS. IF SHERIFF FAILS TO PAY, COURT SHALL RESOLVE THE LEGAL ISSUE ON WHETHER PAG-IBIG IS OBLIGATED TO DELIVER TITLE. COURT ISSUED DECISION DIRECTING PARTIES TO ABIDE BY THE COMPROMISE AGREEMENT. SHERIFF DID NOT PAY. SPOUSES ASKED FOR EXECUTION. COURT ISSUED ANOTHER DECISION ORDERING PAG-IBIG TO DELIVER TITLE. PAG-IBIG FILED AT CA PETITION FOR CERTIORARI ON THE GROUND THAT COURT DID NOT CONDUCT TRIAL PRIOR TO ISSUANCE OF SECOND DECISION AND THAT THE SECOND DECISION AMENDED THE FIRST DECISION.

 

 

WAS CERTIORARI PETITION PROPER?

 

 

NO. RTC DID NOT COMMIT GRAVE ABUSE OF DISCRETION. TRIAL WAS NOT NECESSARY BECAUSE ONLY LEGAL ISSUE WAS TO BE RESOLVED. THE SECOND DECISION DID NOT AMEND THE FIRST DECISION BECAUSE IT  WAS PURSUANT TO THE FIRST DECISION WHICH  APPROVED THE COMPROMISE AGREEMENT. UNDER THE AGREEMENT THE COURT SHALL RESOLVE THE LEGAL ISSUE ON WHETHER PAG-IBIG IS LIABLE TO DELIVER TITLE IN CASE THE SHERIFF FAILS TO PAY.

 

As to Pag-ibig’s argument that the February 21, 2002 Decision of the RTC is null and void for having been issued without a trial, it is a mere afterthought which deserves scant consideration.  The Court notes that Pag-ibig did not object to the absence of a trial when it sought a reconsideration of the February 21, 2002 Decision.  Instead, Pag-ibig raised the following lone argument in their motion:

            3.  Consequently, [Pag-ibig] should not be compelled to release the title to other [respondent-spouses] See because Manuel Arimado [has] yet to deliver to [Pag-ibig] the sum of P 272,000.00.[1][43]              

 

           

Under the Omnibus Motion Rule embodied in Section 8 of Rule 15 of the Rules of Court, all available objections that are not included in a party’s motion shall be deemed waived. 

            Pag-ibig next argues that the February 21, 2002 Decision of the trial court, in ordering Pag-ibig to release the title despite Sheriff Arimado’s failure to remit the P272,000.00 to Pag-ibig, “modified” the October 31, 2001 Decision.  According to Pag-ibig, the October 31, 2001 Decision allegedly decreed that Pag-ibig would deliver the title to respondent-spouses only after Sheriff Arimado has paid the P272,000.00.[2][44]  In other words, under its theory, Pag-ibig cannot be ordered to release the title if Sheriff Arimado fails to pay the said amount.

            The Court finds no merit in this argument.  The October 31, 2001 Decision (as well as the Compromise Agreement on which it is based) does not provide that Pag-ibig cannot be ordered to release the title if Sheriff Arimado fails to pay.  On the contrary, what the Order provides is that if Sheriff Arimado fails to pay, the trial court shall litigate (and, necessarily, resolve) the issue of whether Pag-ibig is obliged to release the title.  This is based on paragraph 6 of the Compromise Agreement which states that in the event Sheriff Arimado fails to pay, “the [respondent-spouses] shall be entitled to an immediate writ of execution without further notice to [Sheriff] Arimado and the issue as to whether [Pag-ibig] shall be liable for the release of the title to [respondent spouses] under the circumstances or allegations narrated in the complaint shall continue to be litigated upon in order that the Honorable Court may resolve the legality of said issue.”  In fact, the trial court, in its October 31, 2001 Decision, already set the hearing of the same “on December 14, 2001 at 9:00 o’clock in the morning.”[3][45]

 

                It is thus clear from both the October 31, 2001 Decision and the Compromise Agreement that the trial court was authorized to litigate and resolve the issue of whether Pag-ibig should release the title upon Sheriff Arimado’s failure to pay the P272,000.00.  As it turned out, the trial court eventually resolved the issue against Pag-ibig, i.e., it ruled that Pag-ibig is obliged to release the title.  In so doing, the trial court simply exercised the authority provided in the October 31, 2001 Decision (and stipulated in the Compromise Agreement).  The trial court did not thereby “modify” the October 31, 2001 Decision.

 

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SINCE RTC DID NOT COMMIT GRAVE ABUSE OF DISCRETION, WHAT SHOULD HAVE BEEN THE REMEDY OF PAG-IBIG?

 

APPEAL UNDER RULE 41. CERTIORARI IS A REMEDY OF LAST  RESORT. IT IS NOT A SUBSTITUTE FOR A LOST APPEAL.

“[C]ertiorari is a limited form of review and is a remedy of last recourse.”[4][36]  It is proper only when appeal is not available to the aggrieved party.[5][37]  In the case at bar, the February 21, 2002 Decision of the trial court was appealable under Rule 41 of the Rules of Court because it completely disposed of respondent-spouses’ case against Pag-ibig.  Pag-ibig does not explain why it did not resort to an appeal and allowed the trial court’s decision to attain finality.  In fact, the February 21, 2002 Decision was already at the stage of execution when Pag-ibig belatedly resorted to a Rule 65 Petition for Certiorari.  Clearly, Pag-ibig lost its right to appeal and tried to remedy the situation by resorting to certiorari.  It is settled, however, that certiorari is not a substitute for a lost appeal, “especially if the [party’s] own negligence or error in [the] choice of remedy occasioned such loss or lapse.”[6][38] 

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PAG-IBIG FILED CERTIORARI WITHIN 60 DAYS FROM RECEIPT OF WRIT OF EXECUTION. WAS CERTIORARI FILED WITHIN THE PERIOD REQUIRED?

 

NO. THE 60 DAY PERIOD IS COUNTED FROM RECEIPT OF JUDGMENT.

            Moreover, even assuming arguendo that a Rule 65 certiorari could still be resorted to, Pag-ibig’s petition would still have to be dismissed for having been filed beyond the reglementary period of 60 days from notice of the denial of the motion for reconsideration.[7][39]  Pag-ibig admitted receiving the trial court’s Order denying its Motion for Reconsideration on March 22, 2002;[8][40] it thus had until May 21, 2002 to file its petition for certiorari.  However, Pag-ibig filed its petition only on May 24, 2002,[9][41] which was the 63rd day from its receipt of the trial court’s order and obviously beyond the reglementary 60-day period. 

            Pag-ibig stated that its petition for certiorari was filed “within sixty (60) days from receipt of the copy of the writ of execution by petitioner [Pag-ibig] on 07 May 2002,” which writ sought to enforce the Decision assailed in the petition.[10][42]  This submission is beside the point.  Rule 65, Section 4 is very clear that the reglementary 60-day period is counted “from notice of the judgment, order or resolution” being assailed, or “from notice of the denial of the motion [for reconsideration],” and not from receipt of the writ of execution which seeks to enforce the assailed judgment, order or resolution.  The date of Pag-ibig’s receipt of the copy of the writ of execution is therefore immaterial for purposes of computing the timeliness of the filing of the petition for certiorari.

            Since Pag-ibig’s petition for certiorari before the CA was an improper remedy and was filed late, it is not even necessary to look into the other issues raised by Pag-ibig in assailing the February 21, 2002 Decision of the trial court and the CA’s rulings sustaining the same.  At any rate, Pag-ibig’s arguments on these other issues are devoid of merit.

 

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FIRST DIVISION

 

HOME DEVELOPMENT MUTUAL FUND (HDMF),   G.R. No.  170292

     Petitioner,

  Present:

 

   
    CORONA, C.J., Chairperson,

- versus -

  LEONARDO-DE CASTRO,
    DELCASTILLO,
    PEREZ, and
Spouses FIDEL and FLORINDA R. SEE and Sheriff MANUEL L. ARIMADO,   MENDOZA, JJ. 

Promulgated:

 Respondents.

   June 22, 2011

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

 

D E C I S I O N

 

DEL CASTILLO, J.:

            A party that loses its right to appeal by its own negligence cannot seek refuge in the remedy of a writ of certiorari.

            This is a Petition for Review on Certiorari[11][1] under Rule 45 of the Rules of Court assailing the August 31, 2005 Decision,[12][2] as well as the October 26, 2005 Resolution,[13][3] of the Court of Appeals (CA) in CA-G.R. SP No. 70828.  The dispositive portion of the assailed CA Decision reads thus:

                WHEREFORE, premises considered, the instant petition is DENIED DUE COURSE and is accordingly DISMISSED.  The assailed Decision of the Regional Trial Court, Branch 6, Legazpi City dated February 21, 2002 and its Order dated March 15, 2002 are AFFIRMED.

                SO ORDERED.[14][4]

Factual Antecedents

 

            Respondent-spouses Fidel and Florinda See (respondent-spouses) were the highest bidders in the extrajudicial foreclosure sale of a property[15][5] that was mortgaged to petitioner Home Development Mutual Fund or Pag-ibig Fund (Pag-ibig).  They paid the bid price of P272,000.00 in cash to respondent Sheriff Manuel L. Arimado (Sheriff Arimado).  In turn, respondent-spouses received a Certificate of Sale wherein Sheriff Arimado acknowledged receipt of the purchase price, and an Official Receipt No. 11496038 dated January 28, 2000 from Atty. Jaime S. Narvaez, the clerk of court with whom Sheriff Arimado deposited the respondent-spouses’ payment.[16][6] 

            Despite the expiration of the redemption period, Pag-ibig refused to surrender its certificate of title to the respondent-spouses because it had yet to receive the respondent-spouses’ payment from Sheriff Arimado[17][7] who failed to remit the same despite repeated demands.[18][8]  It turned out that Sheriff Arimado withdrew from the clerk of court the P272,000.00 paid by respondent-spouses, on the pretense that he was going to deliver the same to Pag-ibig.  The money never reached Pag-ibig and was spent by Sheriff Arimado for his personal use.[19][9]

            Considering Pag-ibig’s refusal to recognize their payment, respondent-spouses filed a complaint for specific performance with damages against Pag-ibig and Sheriff Arimado before Branch 3 of the Regional Trial Court (RTC) of LegazpiCity. The complaint alleged that the law on foreclosure authorized Sheriff Arimado to receive, on behalf of Pag-ibig, the respondent-spouses’ payment.  Accordingly, the payment made by respondent-spouses to Pag-ibig’s authorized agent should be deemed as payment to Pag-ibig.[20][10]  It was prayed that Sheriff Arimado be ordered to remit the amount of P 272,000.00 to Pag-ibig and that the latter be ordered to release the title to the auctioned property to respondent-spouses.[21][11]

            Pag-ibig admitted the factual allegations of the complaint (i.e., the bid of respondent-spouses,[22][12] their full payment in cash to Sheriff Arimado,[23][13] and the fact that Sheriff Arimado misappropriated the money[24][14]) but maintained that respondent-spouses had no cause of action against it.  Pag-ibig insisted that it has no duty to deliver the certificate of title to respondent-spouses unless Pag-ibig actually receives the bid price.  Pag-ibig denied that the absconding sheriff was its agent for purposes of the foreclosure proceedings.[25][15]

            When the case was called for pre-trial conference, the parties submitted their Compromise Agreement for the court’s approval.  The Compromise Agreement reads:

                Undersigned parties, through their respective counsels[,] to this Honorable Court respectfully submit this Compromise Agreement for their mutual interest and benefit that this case be amicably settled, the terms and conditions of which are as follows:

1.     [Respondent] Manuel L. Arimado, Sheriff IV RTC, Legazpi acknowledges his obligation to the Home Development Mutual Fund (PAG-IBIG), Regional Office V, Legazpi City and/or to [respondent-spouses] the amount of P300,000.00, representing payment for the bid price and other necessary expenses incurred by the [respondent-spouses], the latter being the sole bidder of the property subject matter of the Extrajudicial Foreclosure Sale conducted by Sheriff Arimado on January 14, 2000, at the Office of the Clerk of Court, RTC, Legazpi;

x x x x

3.     Respondent Manuel L. Arimado due to urgent financial need acknowledge[s] that he personally used the money paid to him by [respondent-spouses] which represents the bid price of the above[-]mentioned property subject of the foreclosure sale.  The [money] should have been delivered/paid by Respondent Arimado to Home Development Mutual Fund (PAG-IBIG) as payment and in satisfaction of its mortgage claim.

4.     Respondent Manuel L. Arimado obligates himself to pay in cash to [petitioner] Home Development Mutual Fund (PAG-IBIG) the amount of P272,000.00 representing full payment of its claim on or before October 31, 2001 [so] that the title to the property [could] be released by PAG-IBIG to [respondent-spouses].  An additional amount of P28,000.00 shall likewise be paid by [respondent] Arimado to the [respondent-spouses] as reimbursement for litigation expenses;

5.     [Petitioner] Home Development Mutual Fund (PAG-IBIG) shall upon receipt of the P272,000.00 from [respondent] Manuel L. Arimado release immediately within a period of three (3) days the certificate of title of the property above-mentioned to [respondent-spouses] being the rightful buyer or owner of the property;

6.     In the event [respondent] Manuel L. Arimado fails to pay [petitioner] Home Development Mutual Fund (PAG-IBIG), or, [respondent-spouses] the amount of P272,000.00 on or before October 31, 2001, the [respondent-spouses] shall be entitled to an immediate writ of execution without further notice to respondent Manuel L. Arimado and the issue as to whether [petitioner] Home Development Mutual Fund (PAG-IBIG) shall be liable for the release of the title to [respondent spouses] under the circumstances or allegations narrated in the complaint shall continue to be litigated upon in order that the Honorable Court may resolve the legality of said issue;

7.  In the event [respondent] Manuel L. Arimado complies with the payment as above-stated, the parties mutually agree to withdraw all claims and counterclaim[s] they may have against each other arising out of the above-entitled case.[26][16] 

 

 

The trial court approved the compromise agreement and incorporated it in its Decision dated October 31, 2001.  The trial court stressed the implication of paragraph 6 of the approved compromise agreement:

Accordingly, the parties are enjoined to comply strictly with the terms and conditions of their Compromise Agreement.

                In the event that [respondent] Manuel L. Arimado fails to pay [petitioner] HDMF (Pag-ibig), or [respondent-spouses] the amount of P272,000.00 on October 31, 2001, the Court, upon motion of [respondent-spouses], may issue the necessary writ of execution.

                In this connection, with respect to the issue as to whether or not [petitioner] HDMF (Pag-ibig) shall be liable for the release of the title of the [respondent-spouses] under the circumstances narrated in the Complaint which necessitates further litigation in court, let the hearing of the same be set on December 14, 2001 at 9:00 o’clock in the morning. 

                SO ORDERED.[27][17]

None of the parties sought a reconsideration of the aforequoted Decision.

            When Sheriff Arimado failed to meet his undertaking to pay on or before October 31, 2001, the trial court proceeded to rule on the issue of whether Pag-ibig is liable to release the title to respondent-spouses despite non-receipt of their payment.[28][18] 

Ruling of the Regional Trial Court[29][19]

 

            The trial court rendered its Decision dated February 21, 2002 in favor of respondent-spouses, reasoning as follows:  Under Article 1240 of the Civil Code, payment is valid when it is made to a person authorized by law to receive the same.  In foreclosure proceedings, the sheriff is authorized by Act No. 3135 and the Rules of Court to receive payment of the bid price from the winning bidder.  When Pag-ibig invoked the provisions of these laws by applying for extrajudicial foreclosure, it likewise constituted the sheriff as its agent in conducting the foreclosure and receiving the proceeds of the auction.  Thus, when the respondent-spouses paid the purchase price to Sheriff Arimado, a legally authorized representative of Pag-ibig, this payment effected a discharge of their obligation to Pag-ibig. 

            The trial court thus ordered Pag-ibig to deliver the documents of ownership to the respondent-spouses.  The dispositive portion reads thus:

                WHEREFORE, premises considered, decision is hereby rendered in favor of the [respondent-spouses] and against the [petitioner] HDMF, ordering said [petitioner] to execute a Release and/or Discharge of Mortgage, and to deliver the same to the [respondent-spouses] together with the documents of ownership and the owner’s copy of Certificate of Title No. T-78070 covering the property sold [to respondent-spouses] in the auction sale within ten (10) days from the finality of this decision.

                Should [petitioner] HDMF fail to execute the Release and/or Discharge of Mortgage and to deliver the same together with the documents of ownership and TCT No. T-78070 within ten (10) days from the finality of this decision, the court shall order the Clerk of Court to execute the said Release and/or Discharge of Mortgage and shall order the cancellation of TCT No. T-78070 and the issuance of a second owner’s copy thereof.

                SO ORDERED.[30][20]

 

 

            Pag-ibig filed a motion for reconsideration on the sole ground that “[Pag-ibig] should not be compelled to release the title to x x x [respondent-spouses] See because Manuel Arimado [has] yet to deliver to [Pag-ibig] the sum of P272,000.00.”[31][21]

            The trial court denied the motion on March 15, 2002.  It explained that the parties’ compromise agreement duly authorized the court to rule on Pag-ibig’s liability to respondent-spouses despite Sheriff Arimado’s non-remittance of the proceeds of the auction.[32][22]

            Pag-ibig received the denial of its motion for reconsideration on March 22, 2002[33][23] but took no further action.  Hence, on April 23, 2002, the trial court issued a writ of execution of its February 21, 2002 Decision.[34][24]

            On May 24, 2002,[35][25] Pag-ibig filed before the CA a Petition for Certiorari under Rule 65 in order to annul and set aside the February 21, 2002 Decision of the trial court.  Pag-ibig argued that the February 21, 2002 Decision, which ordered Pag-ibig to deliver the title to respondent-spouses despite its non-receipt of the proceeds of the auction, is void because it modified the final and executory Decision dated October 31, 2001.[36][26]  It maintained that the October 31, 2001 Decision already held that Pag-ibig will deliver its title to respondent-spouses only upon receipt of the proceeds of the auction from Sheriff Arimado.  Since Sheriff Arimado did not remit the said amount to Pag-ibig, the latter has no obligation to deliver the title to the auctioned property to respondent-spouses.[37][27] 

            Further, Pag-ibig contended that the February 21, 2002 Decision was null and void because it was issued without affording petitioner the right to trial.[38][28]  

Ruling of the Court of Appeals[39][29]

 

 

            The CA denied the petition due course.  The CA noted that petitioner’s remedy was to appeal the February 21, 2002 Decision of the trial court and not a petition for certiorari under Rule 65.  At the time the petition was filed, the Decision of the trial court had already attained finality.  The CA then held that the remedy of certiorari was not a substitute for a lost appeal.[40][30] 

            The CA also ruled that petitioner’s case fails even on the merits.  It held that the February 21, 2002 Decision did not modify the October 31, 2001 Decision of the trial court.  The latter Decision of the trial court expressly declared that in case Sheriff Arimado fails to pay the P272,000.00 to Pag-ibig, the court will resolve the remaining issue regarding Pag-ibig’s obligation to deliver the title to the respondent-spouses.[41][31] 

            As  to  the  contention that petitioner  was  denied due process when no trial was conducted for the reception of evidence, the CA held that there was no need for the trial court to conduct a full-blown trial given that the facts of the case were already admitted by Pag-ibig and what was decided in the February 21, 2002 Decision was only a legal issue.[42][32]

            Petitioner filed a motion for reconsideration[43][33] which was denied for lack of merit in the Resolution dated October 26, 2005.[44][34]

Issues

 

            Petitioner then raises the following issues for the Court’s consideration:

            1.  Whether certiorari was the proper remedy;

            2.  Whether the February 21, 2002 Decision of the trial court modified its October 31, 2001 Decision based on the compromise agreement;

            3.  Whether petitioner was entitled to a trial prior to the rendition of the February 21, 2002 Decision.

 

 

Our Ruling

 

 

            Petitioner argues that the CA erred in denying due course to its petition for certiorari and maintains that the remedy of certiorari is proper for two reasons:  first, the trial court rendered its February 21, 2002 Decision without the benefit of a trial; and second, the February 21, 2002 Decision modified the October 31, 2001 Decision, which has already attained finality. These are allegedly two recognized instances where certiorari lies to annul the trial court’s Decision because of grave abuse of discretion amounting to lack of jurisdiction.[45][35] 

            The argument does not impress.

            “[C]ertiorari is a limited form of review and is a remedy of last recourse.”[46][36]  It is proper only when appeal is not available to the aggrieved party.[47][37]  In the case at bar, the February 21, 2002 Decision of the trial court was appealable under Rule 41 of the Rules of Court because it completely disposed of respondent-spouses’ case against Pag-ibig.  Pag-ibig does not explain why it did not resort to an appeal and allowed the trial court’s decision to attain finality.  In fact, the February 21, 2002 Decision was already at the stage of execution when Pag-ibig belatedly resorted to a Rule 65 Petition for Certiorari.  Clearly, Pag-ibig lost its right to appeal and tried to remedy the situation by resorting to certiorari.  It is settled, however, that certiorari is not a substitute for a lost appeal, “especially if the [party’s] own negligence or error in [the] choice of remedy occasioned such loss or lapse.”[48][38] 

            Moreover, even assuming arguendo that a Rule 65 certiorari could still be resorted to, Pag-ibig’s petition would still have to be dismissed for having been filed beyond the reglementary period of 60 days from notice of the denial of the motion for reconsideration.[49][39]  Pag-ibig admitted receiving the trial court’s Order denying its Motion for Reconsideration on March 22, 2002;[50][40] it thus had until May 21, 2002 to file its petition for certiorari.  However, Pag-ibig filed its petition only on May 24, 2002,[51][41] which was the 63rd day from its receipt of the trial court’s order and obviously beyond the reglementary 60-day period. 

            Pag-ibig stated that its petition for certiorari was filed “within sixty (60) days from receipt of the copy of the writ of execution by petitioner [Pag-ibig] on 07 May 2002,” which writ sought to enforce the Decision assailed in the petition.[52][42]  This submission is beside the point.  Rule 65, Section 4 is very clear that the reglementary 60-day period is counted “from notice of the judgment, order or resolution” being assailed, or “from notice of the denial of the motion [for reconsideration],” and not from receipt of the writ of execution which seeks to enforce the assailed judgment, order or resolution.  The date of Pag-ibig’s receipt of the copy of the writ of execution is therefore immaterial for purposes of computing the timeliness of the filing of the petition for certiorari.

            Since Pag-ibig’s petition for certiorari before the CA was an improper remedy and was filed late, it is not even necessary to look into the other issues raised by Pag-ibig in assailing the February 21, 2002 Decision of the trial court and the CA’s rulings sustaining the same.  At any rate, Pag-ibig’s arguments on these other issues are devoid of merit.

            As to Pag-ibig’s argument that the February 21, 2002 Decision of the RTC is null and void for having been issued without a trial, it is a mere afterthought which deserves scant consideration.  The Court notes that Pag-ibig did not object to the absence of a trial when it sought a reconsideration of the February 21, 2002 Decision.  Instead, Pag-ibig raised the following lone argument in their motion:

            3.  Consequently, [Pag-ibig] should not be compelled to release the title to other [respondent-spouses] See because Manuel Arimado [has] yet to deliver to [Pag-ibig] the sum of P 272,000.00.[53][43]            

 

           

Under the Omnibus Motion Rule embodied in Section 8 of Rule 15 of the Rules of Court, all available objections that are not included in a party’s motion shall be deemed waived. 

            Pag-ibig next argues that the February 21, 2002 Decision of the trial court, in ordering Pag-ibig to release the title despite Sheriff Arimado’s failure to remit the P272,000.00 to Pag-ibig, “modified” the October 31, 2001 Decision.  According to Pag-ibig, the October 31, 2001 Decision allegedly decreed that Pag-ibig would deliver the title to respondent-spouses only after Sheriff Arimado has paid the P272,000.00.[54][44]  In other words, under its theory, Pag-ibig cannot be ordered to release the title if Sheriff Arimado fails to pay the said amount.

            The Court finds no merit in this argument.  The October 31, 2001 Decision (as well as the Compromise Agreement on which it is based) does not provide that Pag-ibig cannot be ordered to release the title if Sheriff Arimado fails to pay.  On the contrary, what the Order provides is that if Sheriff Arimado fails to pay, the trial court shall litigate (and, necessarily, resolve) the issue of whether Pag-ibig is obliged to release the title.  This is based on paragraph 6 of the Compromise Agreement which states that in the event Sheriff Arimado fails to pay, “the [respondent-spouses] shall be entitled to an immediate writ of execution without further notice to [Sheriff] Arimado and the issue as to whether [Pag-ibig] shall be liable for the release of the title to [respondent spouses] under the circumstances or allegations narrated in the complaint shall continue to be litigated upon in order that the Honorable Court may resolve the legality of said issue.”  In fact, the trial court, in its October 31, 2001 Decision, already set the hearing of the same “on December 14, 2001 at 9:00 o’clock in the morning.”[55][45]

 

                It is thus clear from both the October 31, 2001 Decision and the Compromise Agreement that the trial court was authorized to litigate and resolve the issue of whether Pag-ibig should release the title upon Sheriff Arimado’s failure to pay the P272,000.00.  As it turned out, the trial court eventually resolved the issue against Pag-ibig, i.e., it ruled that Pag-ibig is obliged to release the title.  In so doing, the trial court simply exercised the authority provided in the October 31, 2001 Decision (and stipulated in the Compromise Agreement).  The trial court did not thereby “modify” the October 31, 2001 Decision.

            WHEREFORE, premises considered, the petition is DENIED. The assailed August 31, 2005 Decision, as well as the October 26, 2005 Resolution,  of  the Court of Appeals in CA-G.R. SP No. 70828 are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

  

WE CONCUR:

 

RENATO C. CORONA

Chief Justice

Chairperson

 

 

 

 

TERESITA J. LEONARDO-DE CASTRO  

Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

 

 

JOSE CATRAL MENDOZA

Associate Justice

 

 

 

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

 

            Pursuant to Section 13, Article VIII of the Constitution, 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][43]         Id. at 23-24.

[2][44] Petition in CA-G.R. SP No. 70828, p. 8; id. at 40.

[3][45]Id.at 17.

[4][36]          Heirs of Lourdes Padilla v. Court of Appeals, 469 Phil. 196, 204 (2004).

[5][37]          Rules of Court, Rule 41, Section 1, in relation to Rule 65, Section 1. 

[6][38]          David v. Cordova, 502 Phil. 626, 638 (2005).

[7][39]          Rules of Court, Rule 65, Section 4.

[8][40]          Petition in CA-G.R. SP No. 70828, p. 3; CA rollo, p. 35.

[9][41]          Petitioner’s Memorandum, p. 7; rollo, p. 158.

[10][42]         Petition in CA-G.R. SP No. 70828, p. 4; CA rollo, p. 36.

     Per Special Order No. 1022 dated June 10, 2011.

[11][1]          Rollo, pp. 9-29.

[12][2]         Id. at 30-35; penned by Associate Justice Estela M. Perlas-Bernabe and concurred in by Associate Justices Elvi John S. Asuncion and Hakim S. Abdulwahid.

[13][3]         Id. at 36.

[14][4]          CA Decision, p. 5; id. at 34.

[15][5]          The mortgaged property was covered by Transfer Certificate of Title No. 78070 and more particularly described as follows:

                A parcel of land (Lot 2583-C of the subdivision plan) situated in the barrio of Tagas, Municipalityof Daraga, Albay; bounded on the E., by Calle Sto. Domingo; on the S., by Lot 2583-B; on the W., by Lot 2583-D and on the N., by Lot2583-E x x x containing an area of Two Hundred Fifty Three (253) sq. m. (RTC Decision dated October 31, 2001, p. 2; CA rollo, p. 16.)

[16][6]          Complaint, pp. 1-2; rollo, pp. 37 and 42.

[17][7]         Id. at 3; id. at 38.

[18][8]          Answer, pp. 2-3; id. at 44-45.

[19][9]          RTC Decision dated February 21, 2002, p. 1; CA rollo, p. 19.

[20][10]         Complaint, pp. 3-5; rollo, pp. 38-40.

[21][11]        Id. at 5-6; id. at 40-41.

[22][12]         Paragraph 3 of the Answer, p. 1; id. at 43.

[23][13]         Paragraphs 4 and 5 of the Answer, pp. 1-2; id. at 43-44.

[24][14]         Paragraph 8 of the Answer, p. 2; id. at 44.

[25][15]         Answer, pp. 2-3; id. at 44-45.

[26][16]         RTC Decision dated October 31, 2001, pp. 1-2; CA rollo, pp. 15-16.

[27][17]        Id. at 3-4; id. at 17-18; penned by Judge Wenceslao R. Villanueva, Jr.

[28][18]         Order dated February 21, 2002, id. at 55.

[29][19]         RTC Decision dated February 21, 2002, id. at 19-22; penned by Judge Vladimir B. Brusola.

[30][20]        Id. at 22.

[31][21]         Motion for Reconsideration, id. at 23-24.

[32][22]         Order dated March 15, 2002, id. at 27.

[33][23]         CA Petition, p. 3; id. at 35.

[34][24]        Id. at 13-14.

[35][25]         Petitioner’s Memorandum p. 7; rollo, p. 158.

[36][26]         CA Petition, p. 7; CA rollo, p. 39.

[37][27]        Id. at 5-7; id. at 37-39.

[38][28]        Id. at 8; id. at 40.

[39][29]         Rollo, pp. 30-35.

[40][30]         CA Decision, pp. 4-5; id. at 33-34.

[41][31]        Id. at 5; id. at 34.

[42][32]        Id.; id.

[43][33]         CA rollo, pp. 366-384.

[44][34]         Rollo, p. 36.

[45][35]         Petitioner’s Memorandum, pp. 15-17; id. at 166-168.

[46][36]         Heirs of Lourdes Padilla v. Court of Appeals, 469 Phil. 196, 204 (2004).

[47][37]         Rules of Court, Rule 41, Section 1, in relation to Rule 65, Section 1. 

[48][38]         David v. Cordova, 502 Phil. 626, 638 (2005).

[49][39]         Rules of Court, Rule 65, Section 4.

[50][40]         Petition in CA-G.R. SP No. 70828, p. 3; CA rollo, p. 35.

[51][41]         Petitioner’s Memorandum, p. 7; rollo, p. 158.

[52][42]         Petition in CA-G.R. SP No. 70828, p. 4; CA rollo, p. 36.

[53][43]        Id. at 23-24.

[54][44]         Petition in CA-G.R. SP No. 70828, p. 8; id. at 40.

[55][45]        Id. at 17.

CASE 2011-0158: UNIVERSITY PLANS INCORPORATED VS. BELINDA P. SOLANO, TERRY A. LAMUG, GLENDA S. BELGA, MELBA S. ALVAREZ, WELMAR R. NAMATA, MARIETTA D. BACHO AND MANOLO L. CENIDO (G.R. NO. 170416, 22 JUNE 2011, DEL CASTILLO, J.) SUBJECTS: NLRC APPEAL BOND; MOTION TO REDUCE BOND. (BRIEF TITLE: UNIVERSITY PLANS VS. SOLANO)

 

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

 

SUBJECT/DOCTRINE/DIGEST:

 

 

PETITIONER WAS ADJUDGED LIABLE FOR ILLEGAL DISMISSAL. IT FILED AN  APPEAL WITH NLRC WITH MOTION TO REDUCE BOND AND POSTED BOND OF P30K ON THE GROUND THAT IT WAS UNDER RECEIVERSHIP. NLRC DENIED MOTION TO REDUCE BOND AND REQUIRED PETITIONER TO POST P3M BOND ON THE GROUND THAT THE BOND IS FIXED BY LAW. WAS NLRC CORRECT?

 

NO. UNDER THE NLRC RULES BOND MAY BE REDUCED ON MERITORIOUS GROUND AND UPON POSTING OF BOND IN REASONABLE AMOUNT IN RELATION TO THE MONETARY AWARD.

 

Notably, however, under Section 6, Rule VI of the NLRC’s  Revised  Rules of Procedure, the bond may be reduced albeit only on meritorious grounds and upon posting of a partial bond in a reasonable amount in relation to the monetary award.  Suffice it to state that while said Rules “allows the Commission to reduce the amount of the bond, the exercise of the authority is not a matter of right on the part of the movant, but lies within the sound discretion of the NLRC upon a showing of meritorious grounds.”[1][26]

XXXXXXXXXXXXXXXXXXX

WHAT DOES THE LABOR CODE PROVIDES REGARDING APPEAL BOND?

Article 223 of the Labor Code provides in part:

Article 223.  Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. x x x

x x x x

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.  (Emphasis supplied.)

x x x x.

XXXXXXXXXXXXXXXXXXXXX

WHAT DOES THE REVISED RULES OF PROCEDURE OF NLRC PROVIDE REGARDING APPEAL BOND?

 

While pertinent portions of Sections 4 and 6, Rule VI of the Revised Rules of Procedure of the NLRC read:

SECTION 4. REQUISITES FOR PERFECTION OF APPEAL – a) The appeal shall be: 1) filed within the reglementary period provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; 4) in three (3) legibly typewritten or printed copies; and 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties.

                                x x x x

SECTION 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney’s fees.

x x x x

                No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.  x x x   (Emphasis supplied.)

 

The abovementioned provisions highlight the importance of posting a cash or surety bond in the perfection of an appeal to the NLRC from the Labor Arbiter’s judgment involving a monetary award.  Thus, in Ramirez v. Court of Appeals,[2][24] this Court held, viz:

            Under the Rules, appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond.

                The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter.  The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected ‘only upon the posting of a cash or surety bond.’  The word ‘only’ in Article 223 of the Labor Code makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer’s appeal may be perfected.  The word ‘may’ refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal.  The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction.[3][25]   (Emphasis supplied; citations omitted.)

 

XXXXXXXXXXXXXXXXXXXX

WHAT ARE THE GUIDELINES FOR REDUCTION OF APPEAL BOND?

           

[T]HE BOND REQUIREMENT ON APPEALS INVOLVING MONETARY AWARDS HAS BEEN AND MAY BE RELAXED IN MERITORIOUS CASES. 

 

THESE CASES INCLUDE INSTANCES IN WHICH

 

(1) THERE WAS SUBSTANTIAL COMPLIANCE WITH THE RULES,

 

(2) SURROUNDING FACTS AND CIRCUMSTANCES CONSTITUTE MERITORIOUS GROUNDS TO REDUCE THE BOND,

 

(3) A LIBERAL INTERPRETATION OF THE REQUIREMENT OF AN APPEAL BOND WOULD SERVE THE DESIRED OBJECTIVE OF RESOLVING CONTROVERSIES ON THE MERITS, OR

 

(4) THE APPELLANTS, AT THE VERY LEAST, EXHIBITED THEIR WILLINGNESS AND/OR GOOD FAITH BY POSTING A PARTIAL BOND DURING THE REGLEMENTARY PERIOD. 

 

CONVERSELY THE REDUCTION OF THE BOND IS NOT WARRANTED WHEN NO MERITORIOUS GROUND IS SHOWN TO JUSTIFY THE SAME; THE APPELLANT ABSOLUTELY FAILED TO COMPLY WITH THE REQUIREMENT OF POSTING A BOND, EVEN IF PARTIAL; OR WHEN THE CIRCUMSTANCES SHOW THE EMPLOYER’S UNWILLINGNESS TO ENSURE THE SATISFACTION OF ITS WORKERS’ VALID CLAIMS.[4][29]

In Nicol v. Footjoy Industrial Corporation,[5][27] the Court reviewed the jurisprudence[6][28] respecting the bond requirement for perfecting appeal and summarized the guidelines under which the NLRC must exercise its discretion in considering an appellant’s motion for reduction of bond, viz:

[T]he bond requirement on appeals involving monetary awards has been and may be relaxed in meritorious cases.  These cases include instances in which (1) there was substantial compliance with the Rules, (2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond during the reglementary period. 

Conversely the reduction of the bond is not warranted when no meritorious ground is shown to justify the same; the appellant absolutely failed to comply with the requirement of posting a bond, even if partial; or when the circumstances show the employer’s unwillingness to ensure the satisfaction of its workers’ valid claims.[7][29]

XXXXXXXXXXXXXXXXXXX

CITE A CASE SIMILAR TO THE CASE AT HAND?

 

THE NICOL CASE.

In Nicol, the Labor Arbiter ordered the employer to pay the employees monetary award in the total amount of P51,956,314.00. When the employer appealed to the NLRC, it claimed that it was in dire financial condition and thus moved to reduce the bond to P10 million, for which it posted a surety bond.  The NLRC however denied the motion and required the employer to file an additional bond of P41,956,314.00.  Failing to do so, the NLRC dismissed the employer’s appeal for non-perfection thereof.  

On appeal, the CA held that the NLRC should have determined the merit of employer’s grounds for the reduction of its appeal bond through the reception of evidence instead of requiring it to put up a bond in the equivalent amount of the award without regard to its reasons and arguments, and without determining for itself what amount would be reasonable under the circumstances.  Hence, it directed the NLRC to consider the employer’s motion to reduce bond after receiving evidence thereon, and upon a timely posting of the required reasonable supersedeas bond, to give due course to the appeal and to determine the merits of the case.

When the case reached this Court, we affirmed the CA’s ruling that the NLRC gravely abused its discretion in denying the motion to reduce bond peremptorily without considering the evidence presented.  We further ruled, viz::

[T]he NLRC was not precluded from making a preliminary determination of their [the employer] financial capability to post the required bond, without necessarily passing upon the merits.  Since the intention is merely to give the NLRC an idea of the justification for the reduced bond, the evidence for the purpose would necessarily be less than the evidence required for a ruling on the merits.

Indeed, it only bears stressing that the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases.  On the contrary, the Labor Code explicitly mandates it to ‘use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.[8][30]

XXXXXXXXXXXXXX

 

WAS THE MOTION TO REDUCE BOND FILED BY PETITIONER MERITORIOUS?

 

YES. THE DOCUMENTS PETITIONER PRESENTED SHOW THAT IT IS UNDER RECEIVERSHIP.  ITS OFFICERS ARE PROHIBITED BY SEC TO WITHRAW FROM ITS FUNDS. SEC HAS FROZEN ITS ASSETS. HOW THEN CAN IT RAISE THE SUM OF P30M AS APPEAL BOND?

The NLRC erred in not considering the merit or lack of merit of petitioner’s Motion to Reduce Bond.

 

 

Petitioner attached to its Motion to Reduce Bond the SEC Orders dated August 23, 1999 and May 23, 2000. The Order of August 23, 1999 is a Cease and Desist Order which, among others, prohibited the officers and agents of petitioner from withdrawing from its trust funds or from making any disposition thereof and, ordered the freeze of all its assets and properties.  On the other hand, the May 23, 2000 Order reads in part that:

In view of the voluntary request for receivership of the University Plans, Inc. (UPI), after being found to have a Trust Fund and Capital Deficiency, unable to pay the same despite its commitment to pay, and pursuant to Presidential Decree No. 902-A, as amended, University Plans, Inc. is therefore, placed under the management and control of a RECEIVER x x x[9][31] (Emphasis supplied.)

            From the said SEC Orders, it is unmistakable that petitioner was under receivership.  And from the tenor and contents of said Orders, it is possible that petitioner has no liquid asset which it could use to post the required amount of bond.  Also, it is quite understandable that because of petitioner’s financial state, it cannot raise the amount of more than P3 million within a period of 10 days from receipt of the Labor Arbiter’s judgment. 

            However, the NLRC ignored petitioner’s allegations and instead remained adamant that since the amount of bond is fixed by law, petitioner must post an additional bond of more than P3 million.  This, to us, is an utter disregard of the provision of the Labor Code and of the NLRC Revised Rules of Procedure allowing the reduction of bond in meritorious cases.  While the NLRC tried to correct this error in its March 21, 2003 Resolution[10][32] by further explaining that it was not persuaded by petitioner’s alleged incapability of posting the required amount of bond for failure to submit financial statement, list of sources of income and other details with respect to the alleged receivership, we still find the hasty denial of the motion to reduce bond not proper.

Notwithstanding petitioner’s failure to submit its financial statement and list of sources of income and to give more details relative to its receivership, it was nevertheless able to show through the abovementioned SEC Orders that it was indeed under a state of receivership.  This should have been sufficient reason for the NLRC to not outrightly deny petitioner’s motion.  As to the lacking documents and details on the receivership, it is true that they are needed by the NLRC in determining petitioner’s capacity to post the required amount of bond.  However, their absence should not lead to the outright denial of the motion since as earlier discussed, the NLRC is not precluded from conducting a preliminary determination on the merit or lack of merit of a motion to reduce bond. Here, considering the clear showing of petitioner’s state of receivership, the NLRC should have conducted such preliminary determination and therein require the submission of said documents and other necessary evidence before proceeding to resolve the subject motion.  After all, the present case falls under those cases where the bond requirement on appeal may be relaxed considering that (1) there was substantial compliance with the Rules;[11][33] (2) the surrounding facts and circumstances constitute meritorious grounds to reduce the bond; and (3) the petitioner, at the very least, exhibited its willingness and/or good faith by posting a partial bond during the reglementary period.  Also, such a procedure would be in keeping with the Labor Code’s mandate to ‘use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.’[12][34]  We thus find error on the part of the NLRC when it denied petitioner’s Motion to Reduce Bond and likewise on the part of the CA when it affirmed said denial. 

 

 

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

 

FIRST DIVISION

 

UNIVERSITY PLANS INCORPORATED,   G.R. No.  170416

Petitioner,

   
    Present:
              – versus -    
        CORONA, C.J., Chairperson,
BELINDA P. SOLANO,   LEONARDO-DE CASTRO,
TERRY A. LAMUG,   DELCASTILLO,
GLENDA S. BELGA,   PEREZ, and
MELBA S. ALVAREZ,   MENDOZA,⃰ ⃰ JJ.
WELMA R. NAMATA,MARIETTA D. BACHO 

and MANOLO L. CENIDO,

   Promulgated:

Respondents.

  June 22, 2011

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

 

D E C I S I O N

 

DEL CASTILLO, J.:

            The National Labor Relations Commission (NLRC) is not precluded from conducting a preliminary determination of the merit or lack of merit of a motion to reduce bond.[13][1]

            This Petition for Review on Certiorari assails the Decision[14][2] dated October 27, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 77397 which denied the Petition for Certiorari filed before it.  Likewise assailed is the CA Resolution[15][3] dated November 10, 2005 denying the Motion for Reconsideration thereto.

Factual Antecedents

 

            Respondents Belinda P. Solano (Solano), Terry A. Lamug (Lamug), Glenda S. Belga (Belga), Melba S. Alvarez (Alvarez), Welma R. Namata (Namata), Marietta D. Bacho (Bacho) and Manolo L. Cenido (Cenido) filed before the Labor Arbiter complaints for illegal dismissal, illegal deductions, overriding commissions, unfair labor practice, moral and exemplary damages, and actual damages against petitioner University Plans Incorporated. 

Ruling of the Labor Arbiter

In a Decision[16][4] dated July 31, 2000, the Labor Arbiter found petitioner guilty of illegal dismissal and ordered respondents’ reinstatement as well as the payment of their full backwages, proportionate 13th month pay, moral/exemplary damages, and attorney’s fees, viz:

WHEREFORE, premises considered, therespondentsUniversityPlans, Inc., Ernesto D. Tuazon, Joel D. Paguio, Maribel Sto. Domingo and Renato P. Dragon are hereby ordered to reinstate the seven complainants to their former positions without loss of seniority rights and other appurtenant benefits and to pay said complainants jointly and severally the amounts computed as follows:

 

Backwages

13th Month Pay

Moral/Exemplary Damages

1.  Belinda Solano P701,666.66 P30,000.00

P10,000.00

2.  Glenda S. Belga   245,583.33   10,500.00          

 10,000.00

3.  Welma R. Namata   245,583.33   10,500.00       

 10,000.00

4.  Melba S. Almarez   243,168.33     8,085.00

 10,000.00

5.  Marrieta D. Bacho   191,317.75     4,930.75      

 10,000.00

6.  Terry E. Lamug   505,833.33     7,500.00

 10,000.00

7.  Manolo L. Ceñido   801,937.50    36,993.75      

 10,000.00

Respondents are likewise ordered to pay attorney’s fees equivalent to ten (10%) percent of the judgment award.

All other claims are hereby dismissed for lack of merit.

SO ORDERED.[17][5]

Ruling of the National Labor Relations Commission

 

            Petitioner filed before the NLRC its Memorandum on Appeal[18][6] as well as a Motion to Reduce Bond.[19][7] Simultaneous with the filing of said pleadings, it posted a cash bond in the amount of P30,000.00. 

In its Motion to Reduce Bond, petitioner alleged that it was under receivership and that it cannot dispose of its assets at such a short notice.  Because of this, it could not post the required bond.  Nevertheless, it has P30,000.00 available for immediate disposition and thus prayed that said amount be deemed sufficient to satisfy the required bond for the perfection of its appeal.

            In an Order[20][8] dated April 25, 2001, the NLRC denied petitioner’s Motion to Reduce Bond and directed it to post an additional appeal bond in the amount of P3,013,599.50 within an unextendible period of 10 days from notice, otherwise the appeal shall be dismissed for non-perfection.  In resolving the motion, the NLRC held that the amount of the appeal bond is fixed by law pursuant to Article 223 of the Labor Code which provides in part that:

Article 223.  Appeal . – x x x

                In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. (Emphasis ours.)

                x x x x

 

 

            Petitioner filed a Motion for Reconsideration[21][9] insisting that the NLRC has the discretion to reduce the appeal bond upon motion of appellant and on meritorious grounds.  It argued that the fact that it was under receivership and could not dispose of any or all of its assets without prior court approval are meritorious grounds justifying the reduction of the appeal bond. 

The NLRC, however, denied petitioner’s motion for reconsideration in a Resolution[22][10] dated March 21, 2003.  It ruled that while it has the discretion to reduce the appeal bond, it is nevertheless not persuaded that petitioner was incapable of posting the required bond.  It noted that petitioner failed to submit any financial statement or provide details anent its alleged receivership or its sources of income. Citing Rubber World (Phils.) Inc. v. National Labor Relations Commission[23][11] where the Security and Exchange Commission (SEC) issued an Order of Suspension of Payments, the NLRC noted that this was not obtaining in the present case.  And since the appeal was not perfected due to petitioner’s failure to post the required bond, the NLRC dismissed the same.

Unsatisfied, petitioner went to the CA through a Petition for Certiorari.[24][12]

 

Ruling of the Court of Appeals

 

In a Decision[25][13] dated October 27, 2004, the CA held that the NLRC in meritorious cases and upon motion by the appellant may reduce the amount of the bond.  However, in order for the NLRC to exercise this discretion, it is imperative for the petitioner to show veritable proof that it is entitled to the same.  Since petitioner failed to provide the NLRC with sufficient basis to determine its incapacity to post the required appeal bond, the CA opined that the NLRC’s denial of petitioner’s Motion to Reduce Bond was justified.  Hence, it denied the petition. 

As  petitioner’s   Motion  for  Reconsideration[26][14]  was  likewise  denied  in  a

Resolution[27][15] dated November 10, 2005, petitioner is now before this Court through the present Petition for Review on Certiorari.[28][16]

Issues

            Petitioner advances the following grounds:

I.

THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR WHEN IT DID NOT CONSIDER THE FACT THAT PETITIONER UNIVERSITY PLANS, INC. IS UNDER RECEIVERSHIP.

II.

THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR WHEN IT FAILED TO CONSIDER AND DISPOSE OF THE MERITS OF THE CASE.

A.                     THERE WAS ABSENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN RESPONDENTS SOLANO, BELGA, NAMATA, LAMUG AND ALVAREZ AND UPI.

B.                      RESPONDENT BACHO WAS VALIDLY RETRENCHED.

C.                      RESPONDENT CENIDO WAS DISMISSED FOR CAUSE.

III.

THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR, WHEN IT FAILED TO APPRECIATE THE FACT [THAT] MESSRS. ERNESTO D. TUAZON AND JOEL D. PAGUIO, MS. MARIBEL STO. DOMINGO AND MR. RENATO DRAGON, WERE IMPROPERLY IMPLEADED AND CONSEQUENTLY, THE LABOR ARBITER DID NOT ACQUIRE JURISDICTION OVER THEM.

IV.

CONSEQUENTLY, IT IS SIMPLY GRAVE ABUSE OF DISCRETION, NOT TO MENTION GROSS AND PALPABLE ERROR FOR THE HONORABLE COURT OF APPEALS TO HAVE UPHELD THE LABOR ARBITER’S ORDER OF REINSTATEMENT OF RESPONDENTS AND TO PAY THEM BACKWAGES, MORAL AND EXEMPLARY DAMAGES AND 10% ATTORNEY’S FEES.[29][17]

 

The Parties’ Arguments

 

                Petitioner stresses that it is under receivership pursuant to Presidential Decree No. 902-A.  As such, all pending actions for claims are automatically stayed to enable the management committee or the rehabilitation receiver to effectively exercise its powers free from any judicial or extrajudicial interference.  And since such suspension is automatic, there is no need for it to submit an Order of Suspension of Payments from the SEC, contrary to the ruling of the NLRC.  The Cease and Desist Order[30][18] dated August 23, 1999 and the May 23, 2000 Order[31][19] placing petitioner under receivership both issued by the SEC would have sufficed.

  Also, since its assets could not be disposed of nor could a case be filed against its receiver without prior leave of court pursuant to Section 6, Rule 59 of the Rules of Court,[32][20] petitioner argues it was difficult for it to raise the required amount of the bond.  Petitioner insists that the NLRC should have considered these circumstances when it resolved its Motion to Reduce Bond and likewise by the CA when it affirmed the NLRC’s denial of said motion.  Besides, this Court, in several cases, has relaxed the requirement of posting an appeal bond as a condition for perfecting an appeal under Article 223 of the Labor Code in line with the desired objective of resolving the controversies on the merits.

            Petitioner likewise faults the CA when it did not dispose of the case on the merits.  It then insists that there is no employer-employee relationship between it and respondents Solano, Belga, Namata, Lamug and Alvarez; that respondent Bacho was validly retrenched; that respondent Cenido was dismissed for cause; and consequently, that they are all not entitled to reinstatement, backwages, moral and exemplary damages, and attorney’s fees.  It also asserts that its officers should not have been held jointly and severally liable to respondents.

            For their part, respondents aver that the CA correctly affirmed the NLRC’s denial of petitioner’s Motion to Reduce Bond.  Aside from the very clear provisions of Article 223 of the Labor Code and of Section 6, Rule VI of the NLRC Rules of Procedure on the matter, the discretion to reduce the appeal bond rests upon the NLRC and only in justifiable and meritorious cases.  And since petitioner failed to justify its claim to a reduction of the appeal bond, the NLRC properly denied its motion. 

            Respondents likewise assert that petitioner has already lost its right to appeal considering that same was not perfected when it failed to put up the required appeal bond within the time prescribed by the NLRC.  Because of this, the Labor Arbiter’s Decision became final and executory and, hence, the NLRC did not err in not touching upon the merits of the appeal.

            Meanwhile, in the Memorandum[33][21] filed by respondent Solano, she informs this Court that upon verification from the SEC, petitioner was placed under liquidation as early as 2002. This can further be deduced from the September 1, 2003 Order[34][22] of the SEC designating Atty. Francis Carlo D. Taparan as its liquidator and from the February 13, 2007 letter[35][23] of SEC Secretary C.A. Gerard M. Lukban, which quoted excerpts from the minutes of the April 13, 2005 SEC Meeting designating him as petitioner’s new liquidator. In view of these, respondents argue that petitioner’s claim of receivership has already lost significance and therefore has become moot and academic.

Our Ruling

There is merit in the petition.

Posting of bond is indispensable to the perfection of an appeal in cases involving monetary awards from the Decision of the Labor Arbiter.

Article 223 of the Labor Code provides in part:

Article 223.  Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. x x x

x x x x

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.  (Emphasis supplied.)

x x x x.

While pertinent portions of Sections 4 and 6, Rule VI of the Revised Rules of Procedure of the NLRC read:

SECTION 4. REQUISITES FOR PERFECTION OF APPEAL – a) The appeal shall be: 1) filed within the reglementary period provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; 4) in three (3) legibly typewritten or printed copies; and 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties.

                                x x x x

SECTION 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney’s fees.

x x x x

                No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.  x x x   (Emphasis supplied.)

 

The abovementioned provisions highlight the importance of posting a cash or surety bond in the perfection of an appeal to the NLRC from the Labor Arbiter’s judgment involving a monetary award.  Thus, in Ramirez v. Court of Appeals,[36][24] this Court held, viz:

            Under the Rules, appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond.

                The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter.  The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected ‘only upon the posting of a cash or surety bond.’  The word ‘only’ in Article 223 of the Labor Code makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer’s appeal may be perfected.  The word ‘may’ refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal.  The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction.[37][25]   (Emphasis supplied; citations omitted.)

 

 

When the amount of bond may be reduced.

 

 

            Notably, however, under Section 6, Rule VI of the NLRC’s  Revised  Rules of Procedure, the bond may be reduced albeit only on meritorious grounds and upon posting of a partial bond in a reasonable amount in relation to the monetary award.  Suffice it to state that while said Rules “allows the Commission to reduce the amount of the bond, the exercise of the authority is not a matter of right on the part of the movant, but lies within the sound discretion of the NLRC upon a showing of meritorious grounds.”[38][26]

In Nicol v. Footjoy Industrial Corporation,[39][27] the Court reviewed the jurisprudence[40][28] respecting the bond requirement for perfecting appeal and summarized the guidelines under which the NLRC must exercise its discretion in considering an appellant’s motion for reduction of bond, viz:

[T]he bond requirement on appeals involving monetary awards has been and may be relaxed in meritorious cases.  These cases include instances in which (1) there was substantial compliance with the Rules, (2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond during the reglementary period. 

Conversely the reduction of the bond is not warranted when no meritorious ground is shown to justify the same; the appellant absolutely failed to comply with the requirement of posting a bond, even if partial; or when the circumstances show the employer’s unwillingness to ensure the satisfaction of its workers’ valid claims.[41][29]

The NLRC is not precluded from conducting a preliminary determination of the merit or lack of merit of a motion to reduce bond.

In Nicol, the Labor Arbiter ordered the employer to pay the employees monetary award in the total amount of P51,956,314.00. When the employer appealed to the NLRC, it claimed that it was in dire financial condition and thus moved to reduce the bond to P10 million, for which it posted a surety bond.  The NLRC however denied the motion and required the employer to file an additional bond of P41,956,314.00.  Failing to do so, the NLRC dismissed the employer’s appeal for non-perfection thereof.  

On appeal, the CA held that the NLRC should have determined the merit of employer’s grounds for the reduction of its appeal bond through the reception of evidence instead of requiring it to put up a bond in the equivalent amount of the award without regard to its reasons and arguments, and without determining for itself what amount would be reasonable under the circumstances.  Hence, it directed the NLRC to consider the employer’s motion to reduce bond after receiving evidence thereon, and upon a timely posting of the required reasonable supersedeas bond, to give due course to the appeal and to determine the merits of the case.

When the case reached this Court, we affirmed the CA’s ruling that the NLRC gravely abused its discretion in denying the motion to reduce bond peremptorily without considering the evidence presented.  We further ruled, viz::

[T]he NLRC was not precluded from making a preliminary determination of their [the employer] financial capability to post the required bond, without necessarily passing upon the merits.  Since the intention is merely to give the NLRC an idea of the justification for the reduced bond, the evidence for the purpose would necessarily be less than the evidence required for a ruling on the merits.

Indeed, it only bears stressing that the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases.  On the contrary, the Labor Code explicitly mandates it to ‘use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.[42][30]

The NLRC erred in not considering the merit or lack of merit of petitioner’s Motion to Reduce Bond.

 

 

Petitioner attached to its Motion to Reduce Bond the SEC Orders dated August 23, 1999 and May 23, 2000. The Order of August 23, 1999 is a Cease and Desist Order which, among others, prohibited the officers and agents of petitioner from withdrawing from its trust funds or from making any disposition thereof and, ordered the freeze of all its assets and properties.  On the other hand, the May 23, 2000 Order reads in part that:

In view of the voluntary request for receivership of the University Plans, Inc. (UPI), after being found to have a Trust Fund and Capital Deficiency, unable to pay the same despite its commitment to pay, and pursuant to Presidential Decree No. 902-A, as amended, University Plans, Inc. is therefore, placed under the management and control of a RECEIVER x x x[43][31] (Emphasis supplied.)

            From the said SEC Orders, it is unmistakable that petitioner was under receivership.  And from the tenor and contents of said Orders, it is possible that petitioner has no liquid asset which it could use to post the required amount of bond.  Also, it is quite understandable that because of petitioner’s financial state, it cannot raise the amount of more than P3 million within a period of 10 days from receipt of the Labor Arbiter’s judgment. 

            However, the NLRC ignored petitioner’s allegations and instead remained adamant that since the amount of bond is fixed by law, petitioner must post an additional bond of more than P3 million.  This, to us, is an utter disregard of the provision of the Labor Code and of the NLRC Revised Rules of Procedure allowing the reduction of bond in meritorious cases.  While the NLRC tried to correct this error in its March 21, 2003 Resolution[44][32] by further explaining that it was not persuaded by petitioner’s alleged incapability of posting the required amount of bond for failure to submit financial statement, list of sources of income and other details with respect to the alleged receivership, we still find the hasty denial of the motion to reduce bond not proper.

Notwithstanding petitioner’s failure to submit its financial statement and list of sources of income and to give more details relative to its receivership, it was nevertheless able to show through the abovementioned SEC Orders that it was indeed under a state of receivership.  This should have been sufficient reason for the NLRC to not outrightly deny petitioner’s motion.  As to the lacking documents and details on the receivership, it is true that they are needed by the NLRC in determining petitioner’s capacity to post the required amount of bond.  However, their absence should not lead to the outright denial of the motion since as earlier discussed, the NLRC is not precluded from conducting a preliminary determination on the merit or lack of merit of a motion to reduce bond. Here, considering the clear showing of petitioner’s state of receivership, the NLRC should have conducted such preliminary determination and therein require the submission of said documents and other necessary evidence before proceeding to resolve the subject motion.  After all, the present case falls under those cases where the bond requirement on appeal may be relaxed considering that (1) there was substantial compliance with the Rules;[45][33] (2) the surrounding facts and circumstances constitute meritorious grounds to reduce the bond; and (3) the petitioner, at the very least, exhibited its willingness and/or good faith by posting a partial bond during the reglementary period.  Also, such a procedure would be in keeping with the Labor Code’s mandate to ‘use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.’[46][34]  We thus find error on the part of the NLRC when it denied petitioner’s Motion to Reduce Bond and likewise on the part of the CA when it affirmed said denial. 

In view of the foregoing, a remand of this case to the NLRC for the conduct of preliminary determination of the merit or lack of merit of petitioner’s Motion to Reduce Bond is proper.  In so doing, the NLRC is also reminded to consider respondent Solano’s allegation that petitioner is now under liquidation and to receive evidence thereon so that it may judiciously resolve the Motion to Reduce Bond.  As regards the issues relating to the substantial merits of the case, we shall leave the same to the NLRC.  This is because should the NLRC eventually find the Motion to Reduce Bond meritorious, it shall give due course to the appeal upon the timely posting of a reasonable amount of  supersedeas bond it deems appropriate under the circumstances, and shall then proceed to determine the merits of the case. 

WHEREFORE, the petition is GRANTED. The assailed Decision dated October 27, 2004 and Resolution dated November 10, 2005 of the Court of Appeals in CA-G.R. SP No. 77397 are REVERSED and SET ASIDE.  This case is ordered remanded to the National Labor Relations Commission for the conduct of preliminary determination of the merit or lack of merit of petitioner’s Motion to Reduce Bond.  Should the National Labor Relations Commission find the Motion to Reduce Bond meritorious, it is directed to give due course to the appeal upon timely filing of a reasonable supersedeas bond in an amount it deems appropriate under the circumstances, and to hear and resolve the case with dispatch.

            SO ORDERED

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

 

 

RENATO C. CORONA

Chief Justice

Chairperson

TERESITA J. LEONARDO-DE CASTRO  

Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

 

 

 

 

 

 

 

 

 

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

 

            Pursuant to Section 13, Article VIII of the Constitution, 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][26]Id. at 765.

[2][24] G.R. No. 182626, December 4, 2009, 607 SCRA 752, 761-762.

[3][25]Id.

[4][29] Nicol v. Footjoy Industrial Corporation, supra note 1 at 318.

[5][27] Supra note 1.

[6][28] Star Angel Handicraft v. National Labor Relations Commission, G.R. No. 108914, September 20, 1994, 236 SCRA 580; Rural Bank of Coron (Palawan), Inc. v. Cortes, G.R. No. 164888, December 6, 2006, 510 SCRA 443; Postigo v. Philippine Tuberculosis Society, Inc., G.R. No. 155146, January 24, 2006, 479 SCRA 628; Rosewood Processing, Inc. v. National Labor Relations Commission, 352 Phil. 1013 (1998); Blancaflor v. National Labor Relations Commission, G.R. No. 101013, February 2, 1993, 218 SCRA 366; Rada v. National Labor Relations Commission, G.R. No. 96078, January 9, 1992, 205 SCRA 69; YBL (Your Bus Line) v. National Labor Relations Commission, G.R. No. 93381, September 28, 1990, 190 SCRA 160; Nationwide Security and Allied Services, Inc. v. National Labor Relations Commission, 341 Phil. 393 (1997); Ong v. Court of Appeals, G.R. No. 152494, September 22, 2004, 438 SCRA 668; Calabash Garments, Inc. v. National Labor Relations Commission, 329 Phil. 226 (1996); Biogenerics Marketing and Research Corporation v. National Labor Relations Commission, 372 Phil. 653 (1999); Ciudad Fernandina Food Corporation (CFFC) Employees Union-Associated Labor Unions v. Court of Appeals, G.R. No. 166594, July 20, 2006, 495 SCRA 807.

[7][29] Nicol v. Footjoy Industrial Corporation, supra note 1 at 318.

[8][30]Id. at 312.

[9][31] CA rollo, p. 161.

[10][32]         In this Resolution, the NLRC denied petitioner’s Motion for Reconsideration of the Order denying the Motion to Reduce Bond, and dismissed the appeal for non-perfection thereof.

[11][33]         Petitioner filed a Memorandum on Appeal, paid the appeal fee, and posted a partial bond of P30,000.00 within the reglementary period; See the Memorandum on Appeal and the marginal notations thereon, rollo, pp. 112-124.

[12][34]         Nicol v. Footjoy Industrial Corporation, supra note 1 at 312.

     Also spelled as “Almarez” in some parts of the records.

⃰ ⃰   Per Special Order No. 1022 dated June 10, 2011.

[13][1] Nicol v. Footjoy Industrial Corporation, G.R. No. 159372, July 27, 2007, 528 SCRA 300, 312-313.

[14][2] CA rollo, pp. 214-221; penned by Associate Justice Danilo B. Pine and concurred in by Associate Justices Rodrigo V. Cosico and Vicente S.E. Veloso.

[15][3]Id. at 240-241.

[16][4]Id. at 124-141.

[17][5]Id. at 140-141.

[18][6]Id. at 142-155.

[19][7]Id. at 156-157.

[20][8]Id. at 41-44.

[21][9]Id. at 45-49.

[22][10]        Id. at 51-55.

[23][11]         391 Phil. 318 (2000).

[24][12]        Id. at 4-36.

[25][13]        Id. at 214-221.

[26][14]        Id. at 225-237.

[27][15]        Id. at 240-241.

[28][16]         Rollo, pp. 9-39.

[29][17]        Id. at 19-20.

[30][18]         CA rollo, pp. 158-159; In this Cease and Desist Order, petitioner, its officers and agents were prohibited from further selling, soliciting or offering any kind of pre-need plans to the public; from collecting premiums/installments due from planholders; from withdrawing from its trust funds or any kind of disposition thereof.  All of petitioner’s assets and properties, regardless of nature and location were likewise ordered frozen.  This Order was issued after petitioner failed to comply with the SEC directive to complete its trust fund deficiencies and to submit its actual valuation report and audited financial statements, among others.

[31][19]         Id. at 161-162;  This Order placed petitioner under the management and control of a receiver, enumerated the power and responsibilities of the latter, and appointed Atty. Edgar Tarriela as such receiver.

[32][20]         Sec. 6. General powers of receiver. – Subject to the control of the court in which the action or proceeding is pending, a receiver shall have the power to bring and defend, in such capacity, actions in his own name; to take and keep possession of the property in controversy; to receive rents; to collect debts due to himself as receiver or to the fund, property, estate, person, or corporation of which he is the receiver, to compound for and compromise the same; to make transfers; to pay outstanding debts; to divide the money and other property that shall remain among the persons legally entitled to receive the same; and generally to do such acts respecting the property as the court may authorize.  However, funds in the hands of a receiver may be invested only by order of the court upon the written consent of all the parties to the action.

[33][21]         Rollo, pp. 275-287.

[34][22]        Id. at 288, 290.

[35][23]        Id. at 291.

[36][24]         G.R. No. 182626, December 4, 2009, 607 SCRA 752, 761-762.

[37][25]        Id.

[38][26]        Id. at 765.

[39][27]         Supra note 1.

[40][28]         Star Angel Handicraft v. National Labor Relations Commission, G.R. No. 108914, September 20, 1994, 236 SCRA 580; Rural Bank of Coron (Palawan), Inc. v. Cortes, G.R. No. 164888, December 6, 2006, 510 SCRA 443; Postigo v. Philippine Tuberculosis Society, Inc., G.R. No. 155146, January 24, 2006, 479 SCRA 628; Rosewood Processing, Inc. v. National Labor Relations Commission, 352 Phil. 1013 (1998); Blancaflor v. National Labor Relations Commission, G.R. No. 101013, February 2, 1993, 218 SCRA 366; Rada v. National Labor Relations Commission, G.R. No. 96078, January 9, 1992, 205 SCRA 69; YBL (Your Bus Line) v. National Labor Relations Commission, G.R. No. 93381, September 28, 1990, 190 SCRA 160; Nationwide Security and Allied Services, Inc. v. National Labor Relations Commission, 341 Phil. 393 (1997); Ong v. Court of Appeals, G.R. No. 152494, September 22, 2004, 438 SCRA 668; Calabash Garments, Inc. v. National Labor Relations Commission, 329 Phil. 226 (1996); Biogenerics Marketing and Research Corporation v. National Labor Relations Commission, 372 Phil. 653 (1999); Ciudad Fernandina Food Corporation (CFFC) Employees Union-Associated Labor Unions v. Court of Appeals, G.R. No. 166594, July 20, 2006, 495 SCRA 807.

[41][29]         Nicol v. Footjoy Industrial Corporation, supra note 1 at 318.

[42][30]        Id. at 312.

[43][31]         CA rollo, p. 161.

[44][32]         In this Resolution, the NLRC denied petitioner’s Motion for Reconsideration of the Order denying the Motion to Reduce Bond, and dismissed the appeal for non-perfection thereof.

[45][33]         Petitioner filed a Memorandum on Appeal, paid the appeal fee, and posted a partial bond of P30,000.00 within the reglementary period; See the Memorandum on Appeal and the marginal notations thereon, rollo, pp. 112-124.

[46][34]         Nicol v. Footjoy Industrial Corporation, supra note 1 at 312.

CASE 2011-157: MA. LIGAYA B. SANTOS VS. LITTON MILLS INCORPORATED AND/OR ATTY. RODOLFO MARINO (G.R. NO. 170646, 22 JUNE 2011,  DEL CASTILLO, J.) SUBJECTS: SUBSEQUENT AND SUBSTANTIAL COMPLIANCE CURES TECHNICAL DEFECTS; ILLEGAL DISMISSAL).

 

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

 

 

SUBJECT/DOCTRINE/ DIGEST:

 

 

PETITIONER’S LABOR COMPLAINT WAS DISMISSED BY THE LABOR ARBITER FOR LACK OF MERIT. HER APPEAL TO NLRC WAS ALSO DISMISSED FOR LACK OF MERIT. C.A. DISMISSED ALSO HER CERTIORARI PETITION FOR FAILURE TO INDICATE THE ADDRESSES OF THE PARTIES AND FOR  FAILURE TO STATE WHAT SHOULD BE STATED IN THE CERTIFICATION ON FORUM SHOPPING.  WAS C.A. CORRECT.

 

NO. THERE WAS SUBSEQUENT AND SUBSTANTIAL  COMPLIANCE IN PETITIONER’S MOTION FOR RECONSIDERATION. THERE SHE STATED THE NAMES OF THE PARTIES AND SHE CORRECTED HER CERTIFICATION ON FORUM SHOPPING.

 

THE CASE WAS REMANDED TO THE CA FOR FURTHER PROCEEDINGS.

It is settled that “subsequent and substantial compliance may call for the relaxation of the rules of procedure.”[1][33]  The Court has time and again relaxed the rigid application of the rules to offer full opportunity for parties to ventilate their causes and defenses in order to promote rather than frustrate the ends of justice.[2][34]  Because there was substantial and subsequent compliance in this case, we resolve to apply the liberal construction of the rules if only to secure the greater interest of justice.  Thus, the CA should have given due course to the petition.

 

 

NOTE: REMEMBER THE KEY WORDS: “SUBSEQUENT AND SUBSTANTIAL COMPLIANCE.”

 

XXXXXXXXXXXXXXXXXXXXX

 

 

WHAT IS THE RULE ON FILING PETITION FOR CERTIORARI?

 

SECTION 3, RULE 46 OF THE RULES OF COURT.

Under Section 3, Rule 46 of the Rules of Court, petitions for certiorari shall contain, among others, the full names and actual addresses of all the petitioners and respondents.  The petitioner should also submit together with the petition a sworn certification that (a) he has not theretofore commenced any other action involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, he must state the status of the same; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall promptly inform the court within five days therefrom.  The Rule explicitly provides that failure to comply with these requirements shall be sufficient ground to dismiss the petition.

XXXXXXXXXXXXXXXXXXXXX

 

 

PETITIONER, INSTEAD OF STATING THE ADDRESSES OF THE PARTIES STATED THEIR COUNSELS AND THEIR ADDRESSES. IS THERE COMPLIANCE WITH THE RULES?

 

YES. IT IS IN ACCORD WITH THE RULE THAT IF PARTIES ARE REPRESENTED BY COUNSELS, NOTICE TO COUNSELS IS NOTICE TO THE PARTIES.

            In the petition for certiorari filed before the CA, petitioner indeed failed to indicate the actual addresses of the parties.  However, she clearly mentioned that the parties may be served with the Court’s notices or processes through their respective counsels whose addresses were clearly specified, viz:

                Petitioner is of legal age, married, Filipino and may be served with notices, resolutions, decisions and other processes at the office address of the undersigned counsel.

                Public respondent National Labor Relations Commission (NLRC) is a quasi-judicial government agency clothed by law with exclusive appellate jurisdiction over all cases decided by labor arbiters (Article 217, b, P.D. 442, as amended).  Respondent Labor Arbiter Pablo Espiritu, Jr. is a Labor Arbiter at the National Capital Region of the NLRC and clothed by law [with] the authority to hear and decide termination disputes and all claims arising from employer-employee relations (Article 217, Labor Code, as amended).  They may be served with notices, resolutions, decisions and other processes atPPSTABuilding,Banawe Street,Quezon City.

                Private respondent Litton Mills, Inc. (Company for short) is a domestic corporation engaged in the business of manufacturing textile materials.  Individual respondent Atty. Rodolfo Marino is its personnel manager.  They may be served with notices, resolutions, decisions and other processes through their counsel, Baizas Magsino Recinto Law Offices, Suite 212 Cityland Pioneer, 128 Pioneer Street, Highway Hills, MandaluyongCity.[3][26]

To us, the mention of the parties’ respective counsel’s addresses constitutes substantial compliance with the requirements of Section 3, Rule 46 of the Rules of Court which provides in part that “[t]he petition shall contain the full names and actual addresses of all the petitioners and respondents.”  Our observation further finds support in Section 2, Rule 13 which pertinently provides that “[i]f any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the Court.”  As we held in Garrucho v. Court of Appeals,[4][27] “[n]otice or service made upon a party who is represented by counsel is a nullity.  Notice to the client and not to his counsel of record is not notice in law.”

Moreover, in her motion for reconsideration, petitioner explained that she was of the honest belief that the mention of the counsel’s address was sufficient compliance with the rules.  At any rate, she fully complied with the same when she indicated in her Motion for Reconsideration the actual addresses of the parties.[5][28]  Hence, we are at a loss why the CA still proceeded to deny petitioner’s petition for certiorari and worse, even declared that: “Instead of [rectifying] the deficiencies of the petition, the petitioner chose to avoid compliance, arguing more than revising the mistakes explicitly pointed out.”[6][29]

XXXXXXXXXXXXXXXXXX

 

PETITIONER IN HER PETITION FAILED TO INDICATE THAT THERE IS NO OTHER PENDING CASES BETWEEN THE PARTIES AT THE FILING THEREOF. WAS HER VERIFICATION DEFECTIVE?

 

NO. WITH RESPECT TO THE CONTENT OF THE CERTIFICATION THE RULE ON SUBSTANTIVE COMPLIANCE APPLIES.

The second ground for the CA’s denial of petitioner’s petition for certiorari was her alleged failure to indicate in her Verification and Certification of non-forum shopping that there were no other pending cases between the parties at the time of filing thereof.  For reference, we reproduce below the pertinent portions of the said petition for certiorari, viz:

Verification With Certification

 

                I, LIGAYA B. SANTOS, subscribing under oath, depose and state:

                1.  I am the petitioner in the above-entitled case;

                2.  I have caused the preparation and filing of the foregoing petition;

                3. I have read the contents of the same and declare that they are true and correct of my personal knowledge;

                4.  I certify that I have not caused the filing to the Court of Appeals, to the Supreme Court or to any other Court or body of a case similar to the instant petition and should I learn that the existence or pendency of a similar case at the Court of Appeals, the Supreme Court or any other Court or body, I undertake to inform this Court within five (5) days from knowledge.

                                                                                (Sgd.) LIGAYA B. SANTOS[7][30]

A reading of said Verification with Certification reveals that petitioner nonetheless certified therein that she has not filed a similar case before any other court or tribunal and that she would inform the court if she learns of a pending case similar to the one she had filed therein.  This, to our mind is more than substantial compliance with the requirements of the Rules.  It has been held that “with respect to the contents of the certification[,] x x x the rule on substantial compliance may be availed of.”[8][31]  Besides, in her Motion for Reconsideration, petitioner rectified the deficiency in said Verification with Certification, viz:

VERIFICATION & CERTIFICATION

OF NON-FORUM SHOPPING

 

                I, LIGAYA SANTOS, resident of261 B Rodriguez Avenue, Manggahan,PasigCity, after being sworn in accordance with law, depose and state:

                I am the petitioner in the above-entitled case;

                I have caused the preparation and filing of the foregoing Motion for Reconsideration;

                I have read the contents of the same and declare that they are true and correct of my personal knowledge;

                I certify that I have not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and to the best of my knowledge, no such other action is pending therein and should I learn that the same or similar action or claim has been filed or is pending, I [shall] immediately inform this Honorable Court within five (5) days from knowledge or notice.

                                                                                (Sgd.) LIGAYA B. SANTOS

                                                                                                        Affiant[9][32]

 

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

 

 

FIRST DIVISION

 

MA. LIGAYA B. SANTOS,   G.R. No. 170646

Petitioner,

   
    Present:

 

   

 

  CORONA, C.J., Chairperson,

- versus -

  LEONARDO-DE CASTRO,

 

  DELCASTILLO,

 

  PEREZ, and
    MENDOZA, JJ.
LITTON MILLS INCORPORATED    
and/or ATTY. RODOLFO MARIÑO,⃰ ⃰   Promulgated:

Respondents.

  June 22, 2011

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

 

D E C I S I O N

 

DEL CASTILLO, J.:

 

“Once again, we must stress that the technical rules of procedure should be used to promote, not frustrate, the cause of justice.  While the swift unclogging of court dockets is a laudable aim, the just resolution of cases on their merits, however, cannot be sacrificed merely in order to achieve that objective.  Rules of procedure are tools designed not to thwart but to facilitate the attainment of justice; thus, their strict and rigid application may, for good and deserving reasons, have to give way to, and be subordinated by, the need to aptly dispense substantial justice in the normal course.”[10][1]

This Petition for Review on Certiorari[11][2] assails the March 10, 2005 Resolution[12][3] of the Court of Appeals (CA) in CA-G.R. SP No. 88601, which dismissed petitioner Ma. Ligaya B. Santos’ (petitioner) Petition for Certiorari filed therewith for being defective in form, as well as the November 29, 2005 Resolution[13][4] which denied her Motion for Reconsideration.  Likewise sought to be set aside are the August 27, 2004 and November 30, 2004 Resolutions[14][5] of the National Labor Relations Commission (NLRC) and the November 28, 2003 Decision[15][6] of Labor Arbiter Pablo C. Espiritu, Jr. in NLRC NCR Case No. 00-02-01560-2003, which dismissed petitioner’s complaint for illegal dismissal against respondents Litton Mills, Inc. (respondent Litton Mills) and/or Atty. Rodolfo Mariño (respondent Atty. Mariño).

Factual Antecedents

 

            Petitioner was hired on December 5, 1989 by respondent Litton Mills, a company engaged in the business of manufacturing textile materials.  It used to sell its used sludge oil and other waste materials through its Plant Administration and Services Department, wherein petitioner was assigned as clerk.

On September 28, 2002,[16][7] respondent Atty. Mariño, personnel manager of respondent Litton Mills, directed petitioner to explain in writing why no disciplinary action should be imposed on her after having been caught engaging in an unauthorized arrangement with a waste buyer.  Allegedly, petitioner has been demanding money from a certain Leonardo A. Concepcion (Concepcion) every time he purchases scrap and sludge oil from the company and threatening to withhold the release of the purchased materials by delaying the release of official delivery receipt and gate pass if he would not oblige.  Respondent Atty. Mariño also informed petitioner that she will be placed under preventive suspension for 15 days pending investigation of her case. 

In her letter-reply,[17][8] petitioner denied  the accusation  and  explained that her

job is merely clerical in nature and that she has no authority to hold the release of purchased waste items.  Petitioner averred that the P2,000.00 she obtained fromConcepcion was in payment for the loan she had extended toConcepcion’s wife; and, that her practice of lending money to increase her income cannot be considered as an irregularity against her employer.

Meanwhile, a criminal complaint for robbery/extortion was lodged before the City Prosecutor of Pasig City against petitioner which was eventually filed in court.[18][9] 

On October 1, 2002, respondent Atty. Mariño notified petitioner that an administrative investigation is scheduled on October 4, 2002 and requested her to appear and present her defenses on the charges.  During the hearing, petitioner, represented by three officers of the union of which she was a member, submitted a Motion for Reinvestigation[19][10] (which she also filed in the criminal case for extortion), with a Counter-Affidavit[20][11] attached therein.  She pointed out that it is not within her power to intimidate or threaten any buyer regarding the release of the company’s waste items.  Petitioner also presented a copy of her handwritten notes[21][12] showing a list of entries representing the debts owed to her by different debtors includingConcepcion’s wife. 

On October 11, 2002, petitioner received a Letter of Termination[22][13] from respondents for obtaining or accepting money as a result of an unauthorized arrangement with a waste buyer, an act considered as affecting company interests, in violation of Section 2.04 of the company’s Code of Conduct for Employee Discipline.[23][14]  On February 4, 2003, petitioner filed a Complaint[24][15] for illegal dismissal against respondents which was later amended to include a prayer for moral and exemplary damages and attorney’s fees.

 

Ruling of the Labor Arbiter

In a Decision dated November 28, 2003, the Labor Arbiter dismissed the complaint after finding that there was just cause for dismissal and proper observance of due process.  The Labor Arbiter ruled that the pendency of the criminal case for extortion is an indication that there is sufficient evidence that petitioner is responsible for the offense charged, and that only substantial evidence and not proof beyond reasonable doubt is necessary for a valid dismissal.  The Labor Arbiter was not convinced that the money which petitioner received fromConcepcionwas intended as payment for a loan and even if it was, it is still unauthorized and prohibited by the company rules.  The claim for damages was likewise dismissed for lack of merit.

 

Ruling of the National Labor Relations Commission

 

            On appeal, petitioner argued that the Labor Arbiter erred in relying on the pending criminal case in finding her dismissal as valid and claimed that the charge should first be proven.  She thereafter filed an Urgent Manifestation[25][16] to inform the tribunal that on April 20, 2004, the Regional Trial Court of Pasig City, Branch 167 has rendered a Decision[26][17] acquitting her of the criminal charge and declaring that she merely demanded payment for a loan and thus did not illegally exact money from Concepcion.

The NLRC, however, affirmed the findings of the Labor Arbiter in its Resolution dated August 27, 2004.[27][18]  It held that petitioner’s acquittal in the criminal case has no bearing on the illegal dismissal case since she was dismissed for accepting money by reason of an unauthorized arrangement with a client.  This, according to the NLRC, is an infraction of the company’s Code of Conduct for employees punishable by dismissal even for the first violation.

In its Resolution dated November 30, 2004,[28][19] the NLRC denied petitioner’s Motion for Reconsideration.

Ruling of the Court of Appeals

 

            Petitioner filed a Petition for Certiorari[29][20] with the CA.  However, in a Resolution dated March 10, 2005, the CA dismissed the petition for failure of the petitioner to indicate in the petition the actual addresses of the parties and to state in the Verification and Certification of non-forum shopping that there were no other pending cases between the parties at the time of filing.  The March 10, 2005 Resolution reads:

Petition is hereby DISMISSED due to the following jurisdictional flaws:

1.              Actual addresses of the parties were not disclosed in the petition in contravention of Sec. 3, Rule 46, 1997 Rules of Civil Procedure;

2.              Non-conformity to the required verification and certification of non-forum shopping by failure to state that there were no other pending cases between the parties at the time of filing (See Sections 4 and 5, Rule 7 and Sec. 1, Rule 65 in relation to Sec. 3, Rule 46 of the 1997 Rules of Civil Procedure). Deficiency is equivalent to the non-filing thereof.

SO ORDERED.[30][21]

            Petitioner filed a Motion for Reconsideration[31][22] explaining that her petition substantially complied with the provisions of Section 3, Rule 46 of the Rules of Court because it indicated that the parties may be served with notices and processes of the Court through their respective counsels whose addresses were specifically mentioned therein.  She also insisted that although the Verification and Certification attached to the petition was an abbreviated version, the same still substantially complied with the Rules.  Nonetheless, she submitted her faithful compliance with the Rules by indicating the complete addresses of the parties and of their counsels and submitting a revised Verification and Certification of non-forum shopping.  At the same time, she contended that her excusable lapse is not enough reason to dismiss her meritorious petition.

            On November 29, 2005,[32][23] the CA rendered its Resolution denying the motion for reconsideration.  The said Resolution reads:

                Instead of [rectifying] the deficiencies of the petition, the petitioner chose to avoid compliance, arguing more than revising the mistakes explicitly pointed out.

                WHEREFORE, for lack of merit, petitioner’s March 31, 2005 Motion for Reconsideration is hereby DENIED.

                SO ORDERED.[33][24]

Issues

 

            Hence, this petition anchored on the following grounds:

WITH DUE RESPECT, THE COURT OF APPEALS HAD SHOWN HOSTILITY AGAINST THE PETITIONER AND ACTED DESPOTICALLY BECAUSE THE DEFICIENCIES IN THE PETITION WERE DULY CORRECTED AND THE EXPLANATION MADE FOR THE ALLOWANCE OF THE PETITION IS MERELY TO POINT OUT THAT THIS HONORABLE SUPREME COURT HAD SHOWN LENIENCY EVEN IN MORE SERIOUS CASES AND THAT PETITIONER HAS A MERITORIOUS CASE.

WITH DUE RESPECT, THE NLRC AND THE LABOR ARBITER COMMITTED A SERIOUS ERROR AND ABUSED THEIR DISCRETION IN FINDING THAT PETITIONER OBTAINED OR ACCEPTED MONEY CONSEQUENT OF AN UNAUTHORIZED ARRANGEMENT WITH A WASTE BUYER DESPITE CLEAR EVIDENCE TO THE CONTRARY AND THE FINDINGS OF THE REGIONAL TRIAL COURT THAT THE P2,000.00 DEMANDED BY THE PETITIONER IS FOR THE PAYMENT OF A LOAN.[34][25]

Petitioner questions the propriety of the CA’s dismissal of her petition despite correction of the deficiencies in faithful compliance with the rules. She prays for liberality and leniency for the minor lapses she committed so that substantial justice would not be sacrificed at the altar of technicalities.

            Petitioner also questions the propriety of the labor tribunals’ declaration that her dismissal from employment was legal.  She contends that her act of extending a loan to a person and consequently demanding payment for the same should not be considered as sufficient ground for the imposition of the supreme penalty of dismissal.

 

Our Ruling

 

            We partly grant the petition.

Rules of procedure should be relaxed when there is substantial and subsequent compliance.

 

 

            Under Section 3, Rule 46 of the Rules of Court, petitions for certiorari shall contain, among others, the full names and actual addresses of all the petitioners and respondents.  The petitioner should also submit together with the petition a sworn certification that (a) he has not theretofore commenced any other action involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, he must state the status of the same; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall promptly inform the court within five days therefrom.  The Rule explicitly provides that failure to comply with these requirements shall be sufficient ground to dismiss the petition.

            In the petition for certiorari filed before the CA, petitioner indeed failed to indicate the actual addresses of the parties.  However, she clearly mentioned that the parties may be served with the Court’s notices or processes through their respective counsels whose addresses were clearly specified, viz:

                Petitioner is of legal age, married, Filipino and may be served with notices, resolutions, decisions and other processes at the office address of the undersigned counsel.

                Public respondent National Labor Relations Commission (NLRC) is a quasi-judicial government agency clothed by law with exclusive appellate jurisdiction over all cases decided by labor arbiters (Article 217, b, P.D. 442, as amended).  Respondent Labor Arbiter Pablo Espiritu, Jr. is a Labor Arbiter at the National Capital Region of the NLRC and clothed by law [with] the authority to hear and decide termination disputes and all claims arising from employer-employee relations (Article 217, Labor Code, as amended).  They may be served with notices, resolutions, decisions and other processes atPPSTABuilding,Banawe Street,Quezon City.

                Private respondent Litton Mills, Inc. (Company for short) is a domestic corporation engaged in the business of manufacturing textile materials.  Individual respondent Atty. Rodolfo Marino is its personnel manager.  They may be served with notices, resolutions, decisions and other processes through their counsel, Baizas Magsino Recinto Law Offices, Suite 212 Cityland Pioneer, 128 Pioneer Street, Highway Hills, MandaluyongCity.[35][26]

To us, the mention of the parties’ respective counsel’s addresses constitutes substantial compliance with the requirements of Section 3, Rule 46 of the Rules of Court which provides in part that “[t]he petition shall contain the full names and actual addresses of all the petitioners and respondents.”  Our observation further finds support in Section 2, Rule 13 which pertinently provides that “[i]f any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the Court.”  As we held in Garrucho v. Court of Appeals,[36][27] “[n]otice or service made upon a party who is represented by counsel is a nullity.  Notice to the client and not to his counsel of record is not notice in law.”

Moreover, in her motion for reconsideration, petitioner explained that she was of the honest belief that the mention of the counsel’s address was sufficient compliance with the rules.  At any rate, she fully complied with the same when she indicated in her Motion for Reconsideration the actual addresses of the parties.[37][28]  Hence, we are at a loss why the CA still proceeded to deny petitioner’s petition for certiorari and worse, even declared that: “Instead of [rectifying] the deficiencies of the petition, the petitioner chose to avoid compliance, arguing more than revising the mistakes explicitly pointed out.”[38][29]

The second ground for the CA’s denial of petitioner’s petition for certiorari was her alleged failure to indicate in her Verification and Certification of non-forum shopping that there were no other pending cases between the parties at the time of filing thereof.  For reference, we reproduce below the pertinent portions of the said petition for certiorari, viz:

Verification With Certification

 

                I, LIGAYA B. SANTOS, subscribing under oath, depose and state:

                1.  I am the petitioner in the above-entitled case;

                2.  I have caused the preparation and filing of the foregoing petition;

                3. I have read the contents of the same and declare that they are true and correct of my personal knowledge;

                4.  I certify that I have not caused the filing to the Court of Appeals, to the Supreme Court or to any other Court or body of a case similar to the instant petition and should I learn that the existence or pendency of a similar case at the Court of Appeals, the Supreme Court or any other Court or body, I undertake to inform this Court within five (5) days from knowledge.

                                                                                (Sgd.) LIGAYA B. SANTOS[39][30]

A reading of said Verification with Certification reveals that petitioner nonetheless certified therein that she has not filed a similar case before any other court or tribunal and that she would inform the court if she learns of a pending case similar to the one she had filed therein.  This, to our mind is more than substantial compliance with the requirements of the Rules.  It has been held that “with respect to the contents of the certification[,] x x x the rule on substantial compliance may be availed of.”[40][31]  Besides, in her Motion for Reconsideration, petitioner rectified the deficiency in said Verification with Certification, viz:

VERIFICATION & CERTIFICATION

OF NON-FORUM SHOPPING

 

                I, LIGAYA SANTOS, resident of261 B Rodriguez Avenue, Manggahan,PasigCity, after being sworn in accordance with law, depose and state:

                I am the petitioner in the above-entitled case;

                I have caused the preparation and filing of the foregoing Motion for Reconsideration;

                I have read the contents of the same and declare that they are true and correct of my personal knowledge;

                I certify that I have not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and to the best of my knowledge, no such other action is pending therein and should I learn that the same or similar action or claim has been filed or is pending, I [shall] immediately inform this Honorable Court within five (5) days from knowledge or notice.

                                                                                (Sgd.) LIGAYA B. SANTOS

                                                                                                        Affiant[41][32]

It is settled that “subsequent and substantial compliance may call for the relaxation of the rules of procedure.”[42][33]  The Court has time and again relaxed the rigid application of the rules to offer full opportunity for parties to ventilate their causes and defenses in order to promote rather than frustrate the ends of justice.[43][34]  Because there was substantial and subsequent compliance in this case, we resolve to apply the liberal construction of the rules if only to secure the greater interest of justice.  Thus, the CA should have given due course to the petition.

Anent the arguments raised by petitioner pertaining to the merits of the case, we deem it proper to remand the adjudication thereof to the CA.

            WHEREFORE, the Petition for Review on Certiorari is PARTLY GRANTED. The assailed March 10, 2005 and November 29, 2005 Resolutions of the Court of Appeals in CA-G.R. SP No. 88601, are hereby SET ASIDE.  The case is REMANDED to the Court of Appeals which is directed to give due course to the petition and adjudicate the same on the merits with dispatch.

SO ORDERED.

 

                                    MARIANO C. DEL CASTILLO

                                    Associate Justice

WE CONCUR:

 

 

 

RENATO C. CORONA

Chief Justice

Chairperson

 

 

TERESITA J. LEONARDO-DE CASTRO  

Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

 

 

JOSE CATRAL MENDOZA

Associate Justice

 

 

 

 

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

 

            Pursuant to Section 13, Article VIII of the Constitution, 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][33] Security Bank Corporation v. Indiana Aerospace University, 500 Phil. 51, 60 (2005).

[2][34] Quintano v. National Labor Relations Commission, 487 Phil. 412, 426 (2004).

[3][26] CA rollo, pp. 4-5.

[4][27] 489 Phil. 150, 156 (2005).

[5][28] CA rollo, p. 154.

[6][29] See Resolution of November 29, 2005, id. at 177.

[7][30]Id. at 16.

[8][31] Ching v. The Secretary of Justice, 517 Phil. 151, 166 (2006). See also Ateneo de Naga University v. Manalo, 497 Phil. 635, 646 (2005); MC Engineering Inc. v. National Labor Relations Commission, 412 Phil. 614, 622 (2001).

[9][32] CA rollo, p. 157.

   Per Special Order No. 1022 dated June 10, 2011.

⃰ ⃰   Also referred as Atty. Rodolfo Marino in some parts of the records.

[10][1] Fiel v. Kris Security Systems, Inc., 448 Phil.657, 662 (2003).

[11][2] Rollo, pp. 10-25.

[12][3] CA rollo, pp. 148-149; penned by Associate Justice Vicente Q. Roxas and concurred in by Associate Justices Portia Aliño-Hormachuelos and Juan Q. Enriquez, Jr.

[13][4]Id. at 159.

[14][5]Id. at 18-27 and 28-29, respectively; penned by Presiding Commissioner Raul T. Aquino and concurred in by Commissioners Victoriano R. Calaycay and Angelita A. Gacutan.

[15][6]Id. at 30-41.

[16][7]Id. at 94.

[17][8] Dated September 29, 2002, id. at 95-96.

[18][9] See Investigation Report of Police dated September 30, 2002, id. at 97.

[19][10]         Id at 107-109.

[20][11]        Id. at 110-112.

[21][12]        Id. at 113-115.

[22][13]        Id. at 117.

[23][14]        Id. at 121.

[24][15]        Id. at 119-120.

[25][16]        Id. at 143-146.

[26][17]        Id. at 142-146.

[27][18]        Id. at 18-27.

[28][19]        Id. at 28-29.

[29][20]        Id. at 2-17.

[30][21]        Id. at 148.

[31][22]        Id. at 152-158.

[32][23]        Id. at 159.

[33][24]        Id.

[34][25]         Rollo, p. 19.

[35][26]         CA rollo, pp. 4-5.

[36][27]         489 Phil. 150, 156 (2005).

[37][28]         CA rollo, p. 154.

[38][29]         See Resolution of November 29, 2005, id. at 177.

[39][30]        Id. at 16.

[40][31]         Ching v. The Secretary of Justice, 517 Phil. 151, 166 (2006). See also Ateneo de Naga University v. Manalo, 497 Phil. 635, 646 (2005); MC Engineering Inc. v. National Labor Relations Commission, 412 Phil. 614, 622 (2001).

[41][32]         CA rollo, p. 157.

[42][33]         Security Bank Corporation v. Indiana Aerospace University, 500 Phil. 51, 60 (2005).

[43][34]         Quintano v. National Labor Relations Commission, 487 Phil. 412, 426 (2004).

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