SYLLABI/SYNOPSIS EN BANC

(d) Failure to Turn-over to IBP Donations from Private Individuals and to Account for the same (e) Refusal to Turn-over to the IBP Employee Records and Money pertaining to the Employees Loan and Savings Association

[A.C. No. 4826. January 27, 1999]

(f) Appropriation of Office Property for his and his Familys Personal use (g) Extending Loans at an interest to IBP Employees

IN THE MATTER OF THE PETITION TO REMOVE ATTY. JOSE A. GRAPILON AS PRESIDENT, INTEGRATED BAR OF THE PHILIPPINES. ROSALIA VILLARUEL, ASUNCION ILAGAN, ROSALINA VILLARUEL, ROBERTO MANUSON, EVELYN MELGAR, NIDA PEARANDA, THELMA PADILLA, MARY LOU MANATLAO, HERMINIO CEPILLO, CRISTINA NALDA, TERESITA PERALTA, EDEN ENCINARES, GLORIA COUSART, EMMA PAGUNSAN, and DELIA MORTERA (EMPLOYEES OF THE NATIONAL OFFICE, INTEGRATED BAR OF THE PHILIPPINES),complainants, vs. ATTY. JOSE A. GRAPILON and the INTEGRATED BAR OF THE PHILIPPINES BOARD OF GOVERNORS, respondents. RESOLUTION VITUG, J.: I Rosalia Villaruel, Asuncion Ilagan, Rosalina Villaruel, Roberto Manuson, Evelyn Melgar, Nida Pearanda, Thelma Padilla, Mary Lou Manatlao, Herminio Cepillo, Cristina Nalda, Teresita Peralta, Eden Encinares, Gloria Cousart, Emma Pagunsan and Delia Mortera, all employees of the Integrated Bar of the Philippines (IBP), sought, in a letter-complaint, dated 20 November 1997, addressed to Chief Justice Andres R. Narvasa and the Associate Justices of the Supreme Court, the removal from office of IBP National President Jose Aguila Grapilon. The complainants charged the IBP official with (a) Immorality (b) Questionable Disbursement of Funds (c) Dishonesty

(h) Issuance of Unreasonable/ Illegal / Arbitrary / Whimsical and Oppressive Orders (i) Oppression / Harassment (j) Appointment of Employees who hail from the Visayas Region and whose Services are not needed (k) Appointment of Atty. Eulogia Cueva, a cousin of Atty. Grapilon, to the post of National Executive Director and Commissioner of the Commission on Bar Discipline (CBD) (l) Organization of a Secret Society Shortly after receiving a copy of the complaint, Atty. Grapilon filed with the IBP Board of Governors a request for a sixty-day leave of absence effective 28 November 1997. The Board of Governors, in its resolution of 24 November 1997, endorsed the request to this Court without comment or action x x x (for) being a direct consequence of the Petition filed with the Supreme Court which has (since) acquired jurisdiction over the matter. In the same resolution, the Board of Governors resolved to create a fact-finding committee tasked(a) to determine the procedures and requirements for the disbursements of funds of the IBP, particularly those subject of the Petition, and to recommend appropriate measures to insure that IBP funds are properly disbursed; (b) to determine the procedures and practices being used by the IBP personnel in the safekeeping and custody of official records and documents, it appearing that certain records and documents which should remain only with a particular department or office are readily available to practically any person, and to recommend appropriate measures and controls to ensure that all official records and documents are properly safeguarded;

(c) to determine the extent and causes of any conflict or friction between and among IBP employees, particularly the petitioners and the respondents in the Petition or those alluded to therein, and recommend appropriate measures to prevent further degradation in the working relationships between and among IBP employees as well as remedy whatever damage may have been done to the same.[1] The committee was composed of Judge Sixto C. Marella, Jr., as Chairman, and IBP Manila IV Chapter President Vicente Pulido and IBP former President Mervyn G. Encanto, as members. In its resolution of 09 December 1997, the Court required Atty. Grapilon to comment on the complaint against him. In a letter dated 13 December 1997, IBP National Secretary Roland B. Inting required complainants, pursuant to a directive by the Board of Governors, to explain, within five (5) working days, why no disciplinary action should be taken against them for committing acts inimical to the IBP, in main: 1. For going to the media in airing (their) complaint against the President of the IBP, when complaints against lawyers and judges are confidential in nature; 2. For by-passing the Board of Governors in (their) complaint against (their) fellow employees and the National Executive Director. 3. For causing damage to the name and integrity of the IBP as an institution.[2] Ibid., p. 140. In the meantime, complainants were preventively suspended with pay by IBP to protect (it) against the unauthorized use of confidential documents and further protect the properties of the IBP xxx. Complainants forthwith submitted to the Court a Supplemental Petition with Reiterated Motion for Suspension of Atty. Grapilon and for the Issuance of a Cease and Desist Order against the IBP, claiming that by continuing to act as IBP President, Atty. Grapilon had succeeded in creating an unreasonable and hostile atmosphere for them, rendering their continued employment humiliating, demeaning and impossible. Complainants, moreover, denied having sought media coverage and alleged that ABS-CBN must have only somehow learned of their complaint. Complainants stressed that their complaint against Atty. Grapilon was not in his capacity as a lawyer but as the National President of the IBP. In its resolution of 13 January 1995, the Court directed respondents to likewise comment on the supplemental petition.

When complainants had refused to recognize the authority of the fact-finding committee created by the IBP Board of Governors, the latter decided to terminate the services of complainants except for one of them who was, instead, merely suspended from work without pay; thus: WHEREFORE, in view of the foregoing considerations, respondents Asuncion Ilagan, Rosalia Villaruel, Rosalina Villaruel, Roberto Manuson, Evelyn Melgar, Nida Pearanda, Thelma Padilla, Mary Lou Manatlao, Herminio Cepillo, Cristina Nalda, Teresita Peralta, Eden Encinares, Gloria Cousart, Emma Pagunsan and Delia Mortera are hereby DISMISSED and terminated from their respective employment in the Integrated Bar of the Philippines effective January 16, 1998. Respondent Soledad Afroilan is hereby SUSPENDED for a period of FIVE (5) working days without pay, and with a warning that commission of similar acts shall be dealt with more severely. SO ORDERED.[3] Following the filing by Atty. Grapilon and the IBP Board of Governors of their respective comments, the Court, in a resolution, dated 27 January 1998, resolved; as follows: Considering that the resolution of this administrative case would require an inquiry into and evaluation of the respective factual allegations of the contending parties, the COURT hereby CONSTITUTES an AD HOC Committee composed of, Mr. Justice Jorge S. Imperial, as Chairman, Mme. Justice Minerva P. Gonzaga-Reyes and Mr. Justice Jesus M. Elbinias, as members, of the Court of Appeals for the reception and evaluation of evidence to be presented by both parties and thereafter to make its report and its recommendations on the matter within ninety (90) days from receipt of the records.[4] At the start of the investigation by the Ad Hoc Committee, some of the accusations against Atty. Grapilon were dropped by complainants, a fact which was confirmed by their counsel in the hearing of 21 May 1998. The Ad Hoc Committee accordingly confined itself to the remaining charges which, along with the Committees findings, will now be discussed by the Court in seriatim; viz:

A.

Immorality

Atty. Grapilon had engaged in an adulterous relationship with Mrs. Radie Yacapin Cariaga, an IBP employee and wife of Atty. Rolando Cariaga, according to the complainants, one of whom, Rosalia Villaruel, averred that on 27 April 1997, while they were at the Agta Beach Resort in

Almeria, Biliran, after attending the IBP National Convention in Cebu City, she saw Mrs. Cariaga hurriedly leaving the room of Atty. Grapilon at around 5:00 a.m. and repairing to the room assigned to her (Mrs. Cariaga), Sol Afroilan and Marissa Almorena. Villaruels testimony was disputed by SP04 Hildeyardo Enage and SP04 Rolando Lepasana who had provided the round-the-clock security for Atty. Grapilon and the IBP staff, as well as by Almorena who shared the bed with Mrs. Cariaga, each of whom gave respective sworn statements before the Ad Hoc Committee. The Ad Hoc Committee observed: Between the sole testimony of Petitioner Mrs. Villaruel and that of the policemen, the latters testimony is entitled to greater credibility, being disinterested witnesses (sic). Furthermore, even assuming, arguendo, that Mrs. Cariaga did come out of the bedroom where Atty. Grapilon was assigned to sleep, it should be noted that SP04 Lepasana was also in the same room and thus, it is hard to believe that anything immoral occurred therein.[5] Complainant Asuncion Ilagan declared that on 09 May 1997, during a Chapter visitation in Pampanga, the IBP officials were invited by Atty. Wilfredo Untalan, former IBP Central Luzon Governor, to go to the hotel casino. The group included, among other members of the party, Atty. Grapilon, Atty. Buen Zamar, Legal Aid Lawyer of IBP Pampanga Chapter, Atty. Isagani Cruz and Mrs. Cariaga. While at the casino, Ilagan asserted, she noticed Atty. Grapilon and Mrs. Cariaga holding hands. Later, Atty. Grapilon told Ilagan that he and Mrs. Cariaga were falling in love with each other. Inside the car, she could sense Atty. Grapilon and Mrs. Cariaga kissing each other. Atty. Untalan declared to the contrary, pointing out that the place was crowded and that he had to continually discuss with Atty. Grapilon matters pertaining to the elections of the IBP Board of Governors. 8. Many times I had to seat (sic) close to and consult with Atty. Grapilon considering that the elections for IBP Board of Governors was forthcoming and Atty. Sergio Cruz, one of our companions was a candidate for a governor of Central Luzon. 9. At no time during the said occasion did I notice any amorous interaction between Atty. Grapilon and Ms. Cariaga. Neither did I see them holding hands. Neither did my wife notice anything unusual, otherwise, she should have told me of the same knowing that Atty. Grapilon is a married man. As a matter of fact, none of our companions ever talked about such holding hand or whispering even in jesting manner. Much more the place was crowded by the presence of too many people and discretions of this nature are never displayed openly.[6]

The statement was corroborated by Atty. Zamar who attested that he did not notice anything unusual in the behavior of either Atty. Grapilon or Mrs. Cariaga. 10. At no time (did) I notice anything unusual about Atty. Grapilon and Mrs. Cariaga. As a matter of fact, I can clearly see beneath the two small tables as they were not covered by table cloth(es) and during our entire (sic) at said restaurant, I did not see Atty. Grapilon and Ms. Cariaga holding hands nor whispering to each other. What I know is that we were all discussing in normal voice or at higher pitch as there were many guests at the time and a band was playing.[7] The alleged incident inside the car between Atty. Grapilon and Mrs. Cariaga, likewise asseverated by Ilagan, was refuted by the driver of the car, one Cornelio Bulado. 7. Si Atty. Grapilon, Mrs. Cariaga at Mrs. Ilagan ay tumulak pabalik mga hating-gabi na at lulan sa (sic) Honda Civic na minamaneho ko kung saan si Mrs. Ilagan ay naka-upo sa unahan at si Atty. Grapilon at Mrs. Cariaga naman ay nakaupo sa likuran. 8. Sa loob ng biyahe mula Angeles hangang sa naihatid ko si Atty. Grapilon, Mrs. Cariaga at Mrs. Ilagan ako ay walang napuna na kakaibang kilos nina Atty. Grapilon at Mrs. Cariaga, lalo na ang kabulaanang bintang ni Mrs. Ilagan na narinig niya silang nagbubulungan at naglalapat ang mga labi.[8] The Ad Hoc Committee, on this count against respondent, made this finding: x x x (I)t is hard to believe that the alleged adulterous romance should be openly exhibited in full public view by Atty. Grapilon as President of the IBP and in the company of other coofficers during a chapter visit. As against the Affidavit of Sionie Ilagan, and those of Atty. Untalan and Atty. Zamar, on whether or not the holding hands incident occurred, the latter should prevail for the statements contained therein come from an unprejudiced and independent source. Besides, Sionie Ilagan admitted during her testimony that since she did not look back, her only basis for concluding that Atty. Grapilon and Mrs. Cariaga were kissing each other was because of the sounds she heard. Besides, Asuncion (Sionie) Ilagan testified that she had never been close to Atty. Grapilon and it is therefore improbable that respondent would confide to her that he was falling in love with Mrs. Cariaga. Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be credible in itself. In the instant case and under the circumstances, the alleged immoral acts were not probable.[9]

Ilagan claimed that on 18 July 1997, while they were in Cebu City, she shared a room in the house of Atty. Arthur Lim with Mrs. Cariaga and that, at around 3:00 a.m., Atty. Grapilon Joined Mrs. Cariaga on the bed. Then, after a few minutes, Atty. Grapilon left the room. The assertion was dismissed by Atty. Leo Pruel, P/Ins. Romeo Quilaquil and Mrs. Virginia Grapilon who stated in their sworn statements that they, together with Atty. Grapilon and one Domingo Profitana, Jr., spent that particular evening conversing at the terrace except for a while when Mrs. Lim gave a quick tour of the house. P/Ins. Quilaquil left the group but the rest, except for Mrs. Cariaga who repaired early to the room she shared with Mrs. Ilagan, stayed until about 5:00 a.m., when Atty. and Mrs. Grapilon decided to go back to their room for the morning shower and to prepare their luggage for the morning departure. Mrs. Cariaga decried what she termed to be malicious imputations against her. The Ad Hoc Committee found Ilagans asseverations to be wanting in credibility. The allegation of Sionie Ilagan that respondent went to bed with Radie Cariaga while she was also in the same room is not only contrary to common human experience but is unbelievable. It is preposterous that Atty. Grapilon, or any other person for that matter, who is not a sex pervert, would lie in bed . . ., make obscene movements in the bed, with sighs of passions from both of them (referring to respondent and Mrs. Radie Cariaga) knowing that another person is around watching a very private act, while his wife is wide awake conversing with the other visitors inside the same house. Certainly, a man would not dare arouse his wifes suspicion by leaving her sight without permission at an unholy early morning hour. She would naturally inquire where the husband is if the latter stays out for a longer time than necessary to the comfort room.[10]

Committee noted, in connection with IBPs purchase of a piano, that the canvass bid was done away with, per Atty. Sison-Cruz, so as to enable the IBP to take advantage of a promotional sale by Lyric Piano and Organ Corporation which gave the IBP a discount of P8,000.00.

C.

Failure to Turn-Over to IBP, and to Account for, Donations from Private Individuals.

Complainants charged Atty. Grapilon with having solicited cash from lawyers and private individuals, purportedly for the 14th month pay of IBP employees in December of 1995, and that during the 6th National Convention Of Lawyers in Cebu City in April 1997, then Senator Edgardo Angara had donated to the IBP the amount of P50,000.00 but Atty. Grapilon failed to turn over the sum to the IBP Cashier nor to account for the same. The Ad Hoc Committee, in its report, held that the allegation of solicitation was not substantiated with either names or particulars thereof. Indeed, it noted, Atty. Grapilon was not the IBP President in 1995. Anent the allegation that Atty. Grapilon failed to turn-over the donation of then Senator Angara to the IBP, Atty. Peter John D. Calderon, IBP Cebu Chapter President, confirmed that the money had been with them (IBP Cebu Chapter) all along.

D.

Refusal to Turn-Over to the IBP Employees the Records and Money of the Employees Savings and Loan Association and Extending

Loan at an interest to IBP Employees

B.

Questionable Disbursement of Funds

Complainants claimed that the renovation of the National Legal Aid Office of the IBP Building, amounting to P1.4 million, was awarded to R.E.G. Builders without any bidding. Neither was a bidding conducted, according to the same complainants, when IBP purchased a piano. The Ad Hoc Committee found that a canvass bid was, in fact, conducted by the IBP, participated in by A.M. Construction Pallones, with an offer of P1,480,912.00; Jenus Construction, tendering an offer of P1,620,000.00; and R.E.G. Builders, whose offer came out to be the lowest atP1,400,00.00. Atty. Ester Sison-Cruz, IBP National Secretary, in her affidavit, attested to the foregoing. The contract was signed by Atty. Grapilon upon the authority of the IBP Board of Governors per its resolution No. XIII-97-26. The Ad Hoc

At one time in 1994, then Executive Director Grapilon urged the IBP employees to organize a savings and loan association. After the association was organized, the amount of P100.00 (P50.00 every 15th and 30th of the month), denominated JAG 2, started to be deducted from the salaries of employees. Complainants alleged that they had proposed that the funds be transferred from Atty. Grapilons name to that of the association but Atty. Grapilon had reacted with anger, constraining them to promptly drop the proposal. Atty. Grapilon was also accused of engaging in money lending activity using IBP time. According to the Ad Hoc Committee, the Minutes of the Meeting of the IBP Board of Governors on 23 April 1994 would indicate that the organization of the Savings and Loan Association was the result of an agreement between Atty. Grapilon, then IBP Executive Director, and the IBP employees. It was agreed that the initial fund of P500,00.00 was to be generated from recoverable investments from the IBP President, the Executive Vice President, the treasurer and the members of the Board of Governors, should they wish to

contribute, and other future shareholders. In the meantime, the amount of P500,000.00 was contributed by Atty. Grapilon as a loan or as an advance which was later denominated JAG 2 in the payslip of the employees. In June 1994, the IBP employees agreed to contribute P100.00 monthly to the fund, P50.00 of which was to be deducted on the 15th, and another P50.00 on the 30th, of each month. The Ad Hoc Committee observed that while the sums collected were deposited in the account of Atty. Grapilon, the rules on the monthly contributions, however, were formulated by a loan committee composed of six members elected by the employees. The loans from the initial contribution of Atty. Grapilon were charged an interest (initially, 10%, and later 14%, per annum) which earning was divided equally between the association and Atty. Grapilon by way of return on investments. Atty. Grapilon tried to excuse himself from the task of approving the loans but apparently the employees could not agree on who should be his substitute.

Atty. De Vera: I want you to tell us. What did he exactly say that you considered to be nasty, because I noticed you did not say that in your affidavit? Witness: He told me that I am hard headed, He was already shouting at me then, that Im hardheaded, that I dont follow his orders. And then he even kicked the monoblock chair. Atty. De Vera: Thats all that happened? Witness: Yes, Sir.

E.

Oppression / Harassment

Justice Imperial: And thats all he said? Witness: Yes, Your Honor. And then after that he went to his room and he called me again and after that he repeated to tell me that I am hardheaded and that I needed to follow him and that I should support him because my husband and he are provincemates.[12] The Ad Hoc Committee dismissed the allegation, expressing at the same time the view that (i)t is not uncommon for a manager to reach the limit of his patience and blow his top when the subordinates are perceived to be hardheaded and intransigent. Thus, no oppression and humiliation can be attributed to respondent for his above acts. [13] Rosalina Villaruel, on her part, complained that Atty. Grapilon had accused her of stealing P500.00, and that he would not allow her to take her lunch until her work was over. The Ad Hoc Committee remarked: The above complaints are the result of petty misunderstanding in a working relationship between a manager and his secretary. If indeed the stealing charge was serious, a memorandum would have been issued, requiring Rosalina to explain why no disciplinary measure should be imposed on her for dishonesty. However, none was made.

Complainants described Atty. Grapilon to be a sadistic person, prone to violence, and a person who thrives in insulting and humiliating and making his employees suffer. Bobby Manuson claimed that in November 1995, Atty. Grapilon, upon learning of supposed inquiries being made about him by Manuson, confronted the latter and, in front of several lady employees of the IBP, opened the zipper of his trousers. The Ad Hoc Committee did not find the statement worthy of credence; it said: It is quite unbelievable however that from November, 1995 when the alleged oppressive or humiliating act was committed by Atty. Grapilon against his person, Mr. Manuson decided to keep quiet, and it was only after two years had elapsed, that he complained about the incident. In the interim, Manuson did not complain to anybody, write a letter to Atty. Grapilon to protest the way he was treated, or tell Atty. Grapilon that he never talked about his life, which would have been his natural reaction to the accusation made against him. If indeed the alleged act considered by him as humiliating and oppressive was committed by respondent, Petitioner Bobby Manuson would have complained and filed his case immediately before the IBP Board of Governors or before the then IBP President. At that time, Atty. Grapilon was not yet the president of IBP.[11] Evelyn Melgar bewailed her having been shouted at and called names by Atty. Grapilon. She testified:

Furthermore, contrary to her claims, Atty. Grapilon assigned some IBP employees to man the executive offices and to answer telephone calls during lunch break. Strangely, despite the alleged oppression and humiliation she continuously suffered from Atty. Grapilon since 1993, Rosalina Villaruel never filed a complaint with the Board or previous IBP President, nor was there an effort on her part to talk to Atty. Grapilon or write him about the sufferings she had to bear as his secretary.[14] Teresita Peralta averred that sometime in 1996, while Atty. Grapilon had two male visitors, she was asked to call the office of then Solicitor General Raul Goco. While she was still on the phone talking to a member of the Solicitor Generals staff, Atty. Grapilon grabbed the phone from her and muttered, the employees in (this) office (do) not know how to talk over the phone, to her great embarrassment. The Ad Hoc Committee took account of the joint affidavit executed by the two guests of Atty. Grapilon, who there narrated; thus: 3. After his other visitors left, we were entertained by Atty. Grapilon. While we were discussing about our case, Atty. Grapilon requested an IBP employee -- a middle aged woman, short and a bit fat with fair complexion -- who was then at our vicinity to dial a certain telephone number; 4. The said woman grumbled but nevertheless obeyed Atty. Grapilon. While talking to someone over the phone, we heard her very impolite words and she was already shouting at the person at the other end of the line. Atty. Grapilon then requested the IBP employee to hand him over the phone. At that point, he apologized to the person at the other end of the line for the impolite words of the said employee; 5. After apologizing to the person at the end of the line, Atty. Grapilon talked to the said IBP employee and told her to be polite and use proper language to whoever is at the other end of the telephone line. At this point we overheard the said IBP employee saying that: bakit kasi ako ang u-utusan para mag tawag sa telepono hindi naman ako secretary dito, meron naman siyang secretary. Atty. Grapilon overheard her also so he called the said employee and in a polite and civil manner told her that: Please dont do that to me specially in front of my visitors. Mga kababayan ko sila, further he said that: Nakikiusap lang naman ako sa yo na pakitawagan mo si Sol. Gen. Goco at wag mong bastusin kung sino man ang kausap mo sa kabilang telepono dahil nakakahiya, lalo na pag mga abogado ang kausap nyo dahil sila ang nagbibigay ng inyong pangsweldo;

6. At that point, the said woman IBP employee turned her back and left chafing and mincing some harsh words and on the way out of the room, she threw the papers she was holding on a nearby table, kicked one of the plastic chairs along the passage way and slammed the door; 7. Atty. Grapilon shook his head and apologized to us for the manners and conduct of the said employee. He told us that the said employee is the Cashier of the IBP. [15] Peralta asserted that, at another time, Atty. Grapilon had requested her to bring to his office the check and voucher for the engineer who renovated the third floor of the building. After receiving the check and the voucher, Atty. Grapilon asked her to leave but, choosing to remain, she saw the engineer/contractor bring out his personal check, thereby insinuating that Atty. Grapilon was paid a consideration for the transaction. The Ad Hoc Committee found it most unlikely for Atty. Grapilon, if he indeed committed any anomaly, to conduct it in the presence of complainant Peralta; it opined: It would be unthinkable for Atty. Grapilon to do the above imputed act. Common sense dictates that nobody will allow himself to be placed in an incriminating situation specially if he intends to do an illegal act. To allegedly receive a check from a contractor in the presence of a third person who is not privy to a transaction is not believable, specially since respondent Grapilon is a lawyer.[16] Eden Encinares charged that once while she was inside the IBP Presidents room, in the presence of Bobby Manuson and Carlito Villarin, Atty. Grapilon threw his coat at her, yelling, huwag kayong makihalo sa mga matatanda sa opisina, kagaya nina Emma, Sally at iba pa. Later, she changed her statement and claimed that Villarin was outside the room when it happened. She changed her mind for the third time and reverted to her previous statement that Villarin was with her and Manuson. Carlito Villarin contradicted the testimony of Encinares and insisted that Atty. Grapilon threw his coat on the chair and not at Encinares. The Ad Hoc Committee, on the foregoing charges of oppression and harassment, concluded: In view of the foregoing, on the issue of oppression and humiliation allegedly committed by Atty. Grapilon upon the persons of the herein petitioners, the incidents narrated by them are nothing but unfounded or shallow accusations probably emanating from certain personal biases of petitioners or personality differences with the head of office. The mere

fact that respondent might be ill tempered, does not talk in a soft voice, harshly calls the attention of the employees when they do not act according to his standard of behavior or is not an ideal employer, are not sufficient ground, under the circumstances, to even call his attention thereto, much less provide a cause for his removal as President of the IBP. [17]

On 23 March 1998, a petition to cite the IBP Board of Governors for contempt was filed, allegedly for its failure to comply with the resolution, dated 03 February 1998, of the Court with a prayer that the IBP Board of Governors be directed to reinstate complainants actually or in the payroll. In response, the IBP Board of Governors sought the dismissal of the charges against it on the following grounds: A. The action taken by the IBP Board against the petitioners and the acts for which petitioners were dismissed are not proper subject matter of the instant proceedings considering that they have no direct substantive relation to the instant administrative proceedings against Atty. Jose A. Grapilon. B. Petitioners were validly dismissed considering that they were guilty of committing acts inimical to the interest of the IBP. C. The subject matter of petitioners Supplemental Petition and Motion to Implead is a simple labor dispute that is within the original and exclusive jurisdiction of the National Labor Relations Commission. D. Under Section 12, Article 1 of the By-laws of the IBP, respondent IBP Board and its governors are not liable for the dismissal of petitioners. E. The Supreme Court Resolution dated 23 February 1998 should be modified by directory (sic) that the suspension of petitioners pending resolution of the present case should be without pay.[18] According to the IBP Board of Governors, the complaint against it, being a simple labor dispute, was within the province of the National Labor Relations Commission to consider. Complainants countered that their dismissal was the outcome of an attempt of the IBP Board of Governors to protect Atty. Grapilon from the Administrative case. Complainants held the issues on this score to be 2. Whether or not the IBP Board performed an act of reprisal against the IBP employees when it terminated their employment. 3. Whether or not the IBP Board had already prejudged the IBP employees as having already committed acts inimical to the interests of the IBP before the hearing on 10 January 1998.

F.

Organization of a Secret Society

Finally, complainants denounced Atty. Grapilon for having supposedly organized a secret society, also known as the JAG Brotherhood, within the IBP whose members, composed of people close to Atty. Grapilon, enjoyed special treatment and privileges. In their sworn statements, Efren G. Marquira, Ramil A. Perucho, Gerardo Viciano, Jose Allan Apelit, Mario Kalingag and Emmanuel Erena stated that membership in the association purely was voluntary and non-coercive and that it counted among its members employees and nonemployees of IBP alike. The Ad Hoc Committee found no evidence to sustain any wrongdoing on the part of Atty. Grapilon who neither provided funds for the organization and its activities nor accorded special treatment to its members. II An offshoot of the case against Atty. Grapilon was the complaint filed against the IBP Board of Governors following the preventive suspension (with pay) of complainants by the Board of Governors. Shortly after complainants had refused to recognize the authority of the fact-finding committee created by the Board of Governors, the latter, pursuant to the IBP resolution of 10 January 1998, dismissed from the service Asuncion Ilagan, Rosalia Villaruel, Rosalina Villaruel, Roberto Manuson, Evelyn Melgar, Nida Pearanda, Thelma Padilla, Mary Lou Manatlao, Herminio Cepillo, Cristina Nalda, Teresita Peralta, Eden Encinares, Gloria Cousart, Emma Pagunsan and Delia Mortera, and suspended Soledad Afroilan for five days without pay. The Court, in its 03 February 1998 resolution, granted the prayer of complainants for the inclusion of the IBP Board of Governors also as party respondents to this case. This incident, as well as the motion to nullify the IBP resolution of 10 January 1998, was itself referred by the Court to the Ad Hoc Committee. The Court thereupon directed the parties to maintain the status quo ante at the time of the adoption of the aforesaid IBP Resolution, dated 10 January 1998, without prejudice to the authority of the Ad Hoc Committee to modify this directive such as the evidence may warrant."

4. Whether or not the 10 January 1998 Resolution of the IBP Board terminating the IBP employees should be declared as null and void for being violative of the IBP employees right to due process.[19] The IBP Board of Governors, on its part, saw the case as presenting issues as (1) Whether or not the Honorable Supreme Court and the Honorable Ad Hoc Committee have jurisdiction over causes of action of the petitioners against respondent IBP Board considering that said causes of action fall under the definition of a labor dispute properly under the original and exclusive jurisdiction of the Labor Arbiters of the National Labor Relations Commission (the NLRC). (2) Assuming arguendo that the Honorable Supreme Court and the Honorable Ad Hoc Committee have jurisdiction over the termination dispute between petitioners and respondent IBP Board: a. Whether or not there was just cause to terminate petitioners; and b. Whether or not respondent IBP Board observed procedural due process in dismissing petitioners. (3) Whether or not respondent IBP Board may be held liable for the termination of petitioners considering that, under Section 12, Article 1 of the By-Laws of the IBP Board shall not be answerable for any damage resulting from its actions done and taken under authority of the ByLaws.[20] Anent the issue of jurisdiction, the Ad Hoc Committee correctly observed that the instant case had not been the first time that the Court opted to exercise administrative jurisdiction over a case against the IBP President. In Bar Matter No. 565, the Court, in its resolution of 15 October 1991, approved the report of the Ad Hoc Committee[21] which took cognizance of the complaint of staff members of the IBP against then IBP President Eugene A. Tan and his administration. The charges there included favoritism or discrimination in the hiring of officers and employees of the IBP and extravagant and irregular expenditures of IBP funds. As the Ad Hoc Committee so pertinently points out in its reportThere are three sets of charges involved in this case: the complaint against President Grapilon, the charges against the petitioners, and the complaint against the IBP Board.

1. With respect to the complaint against the IBP President and the IBP Board, we agree with the petitioners that the Supreme Court may cause the investigation not only of the charges filed against the IBP President but also against the IBP Board of Governors and mete disciplinary sanctions if necessary. It need not be gainsaid that IBP officers should set the example for maintaining rigid ethical standards of professional conduct for the Philippine Bar and as correctly put by petitioners, the Supreme Court must insure that the IBP observe the duty to promote respect for the law and legal processes. It will be recalled that in the case of IBP President Euguene Tan in Bar Matter No. 565 the charges filed against IBP President Tan and his administration were contained in a letter-complaint addressed to the Chief Justice filed by several staff members of the IBP; the Supreme Court found the actuations of Atty. Tan as constituting grave abuse of authority and serious misconduct in Office, which would have warranted his removal from office, but in view of the fact that he had earlier tendered his resignation as IBP President and his term of office already expired on June 30, 1991, the Court imposed the penalty of severe censure. Also, in Bar Matter No. 491 entitled In the Matter of the Inquiry into the 1989 Elections of the IBP, the Supreme Court acted on the basis of newspaper columns in the Malaya, the Philippine Standard, Philippine Free Press criticizing the electioneering and extravaganza that characterized the campaign conducted by the candidates for IBP President in the 1989 elections, and created a committee of five justices to conduct a formal inquiry. The Supreme Court approved the recommendation of said committee to annul the IBP elections held on June 3, 1989 and ordered the holding of special elections within three months; pending such special elections, a caretaker board was appointed to administer the affairs of the IBP. Considering the allegations of the petitioners that the purported inimical acts imputed to them as described in the show-cause order of IBP are a direct consequence of the petition which they filed with the Supreme Court, that their termination is an act of reprisal for filing the petition , that the IBP Board has acted against the petitioners with malice and unfairness, with manifest partiality, and with pre-judgment, and that the IBP Board is protecting the IBP President, the Supreme Court may, in the exercise of its supervisory powers over the IBP, properly take cognizance of the petitioners complaint against the IBP Board and cause an investigation thereof to be conducted. Stated otherwise, if the accusations made by the petitioners that the IBP dismissed the employees with malice and manifest partiality, and as an act of reprisal against the employees are substantiated, the actuations of the IBP Board would be attended with gross abuse of authority and would constitute serious misconduct. Thus the prayer to implead the IBP Board of Governors as party respondent in Adm. Case No. 4826 was granted by the S.C. in its Resolution of February 3, 1998.

2. As regards the charges against petitioners who are all non-lawyers and are admittedly employees of the IBP, is also correct that, as an employer, it has the authority to conduct an administrative investigation of its employees, who are ordinary workers, and to discipline them for misconduct for committing acts inimical to the IBP, and that under Section 217 of the Labor Code (PD No. 422, as amended), the termination dispute would fall within the original and exclusive jurisdiction of a labor arbiter whose decision is subject to the exclusive appellate jurisdiction of the National Labor Relations Commission. However, because the actuations of the IBP Board in connection with the administrative action taken against the petitioners have been challenged before the Supreme Court, the authority of the IBP Board, and eventually the Labor Arbiter and the NLRC, cannot be held to be exclusive of the prerogative of the Supreme Court, pursuant to the latters supervisory powers over the IBP, to exercise its own administrative jurisdiction over the matter.[22] III Concluding its report on the investigation, the Ad Hoc Committee made the following recommendations to the Court, thus: 1. All the charges against Atty. Jose Aguila Grapilon should be DISMISSED. 2. The motion to cite the IBP Board for contempt should be DISMISSED. 3. The order dismissing the petitioners is valid; the act of publicly airing their accusations against Atty. Grapilon is SERIOUS MISCONDUCT that warrants DISMISSAL from the service. 4. The respondent IBP Board shall implement the status quo ante order of the Supreme Court by paying the petitioners their salaries effective January 16, 1998, up to the date of the approval of the recommendation of the Committee to uphold the validity of the dismissal of the petitioners from the service.[23]

the claim that certain funds of the IBP Employees Savings and Loan Association have been placed in his personal account, albeit sufficiently explained, the Court deems it proper, to direct Atty. Grapilon to immediately cause the transfer of the funds from his name to that of the association. The members of the IBP Employees Savings and Loan Association are strongly advised to organize a Board of Directors which can carry out the task of managing the funds of the association, including the approval of loan transactions, in order to avoid any misimpression of irregularity if the procedures thus far practiced would be allowed to continue. B. As regards the alleged recourse to media by complainants in making public their complaints against Atty. Grapilon, Ma. Elena Manolita Gazeta Catbagan, ABS-CBN reporter, admitted that while complainants were at first reluctant to talk, they were persuaded ultimately, however, by the idea that the television interview could enhance their case. Josie Sison, another ABS-CBN journalist, likewise stated in her testimony that one of the complainants had agreed to meet the reporters to be sent by ABS-CBN. In addition, Ramoncito Yuson, the security guard detained at the IBP parking lot, testified that Eden Encinares, Sally Villaruel and Vicky Villaruel met with the ABS-CBN crew, while another security guard, Diana Pedrano, stated that the television crew asked for Sionie and Vicky, referring to Asuncion Ilagan and Vicky Villaruel. Eden Encinares herself said that five of the complainants had been interviewed and all of them were present during the interview. Finally, Atty. Rolando Inting, the IBP Secretary, declared that Asuncion Ilagan, Rosalia Villaruel , Rosalina Villaruel and Tessie Peralta admitted to him that complainants sought the ABS-CBN by common agreement for fear that the Supreme Court might not promptly heed their complaint. The Ad Hoc Committee held that the IBP Board of Governors was justified in instituting the investigation against complaints. The Committee stated: Respondent Board cites the cases of Lopez vs. Chronicle Publications Employees Association and St. Marys College vs. NLRC wherein the Supreme Court held that the publication by employees of charges which ridicule the employers officials or its management and sully its reputation, is a reprehensible act inimical to the employers interests and constitutes gross misconduct which is a just cause for the termination of their employment. Petitioners counter that the cited case cannot be invoked by the IBP because no statement was made by the petitioners against their employer, the IBP, that would malign, ridicule or disparage the IBP. The IBP Boards position has merit.

IV

A. The Court has closely reviewed the findings of the Ad Hoc Committee on the various charges against respondent Grapilon and the latters response to each count, and it is inclined to agree, such as can be gleaned from the above disquisition, with the Ad Hoc Committee in concluding that the accusations have not been properly substantiated. Nevertheless, relative to

The Minutes of the Board Meeting held on December 13, 1997 narrate the discussions that preceded the adoption of Resolution No. XIII-1997-127, and show that the Board received the report of Atty. Grapilon on the Divisive and other deleterious effects of the filing of the complaint: At present, there is a great divide in the National Office where the sixteen (16) employees are left free to do whatever they want to do and against the majority of the employees who have signed, and we will present later the expression of support, to the National President. The National President right now is hampered in his unusual task of directing and delegating very important tasks in the National Office. While prudence dictates that we should not, even communicate with these employees, it is so difficult for a Chief executive to pursue programs and policies without the total cooperation of all employees in the national office. As of now, some of the sixteen (16) employees are doing what they are assigned to do, like the one in the accounting, three (3) in bar discipline; but those assigned to the office of the Executive Vice President and Journal are directed to do things they have not been previously doing, tasks like posting membership due, determining qualified members to receive the Journal. There are many things to be done in the National Office and if the President, through the Executive Director, would not be effective anymore in doing his job, we believe that certain actions must be done by the Board of Governors. Complainants from the library, property and the membership list division are often seen huddling together even during office hours and so we believe that lawyers membership dues are not justifiably being spent. The three (3) other male complainants just go about loitering in the national office just hovering over the desks of those working and they find their own sweet time staying outside of the third floor and again, huddling in the cashiers office who are also among the complainants. We find that we cannot work anymore effectively. There was an extended discussion on further problems concerning the present crisis after Atty. Grapilon made his report. Among the opinions ventilated at the meeting were that of Governor Okit that the wide publicity given to tri-media by the complainants has really damaged the name of the IBP; and of Governor Barrera to the effect that at stake in this controversy is the institution of the IBP and it affects not only President Grapilon x x x who happens to be the Chief executive of the IBP. Although Governor Pilando had reservations as to whether the proceeding should be an investigation or a confrontation with the employees. Resolution No. XIII was adopted by the Board, and the show-cause order was eventually promulgated. Under the circumstances, the IBP Board properly took action on the media incident. As the highest governing body of the Integrated Bar empowered to appoint employees and implicity administratively discipline them, the IBP Board had the power to conduct an administrative

investigation of its own employees whose public accusations against the IBPs highest national officer have a tendency to erode the reputation and integrity of the Board itself, and the public airing of which grievances have brought about tension and disrupted the work in the national office. Certainly, the Board cannot fold its hands and be a mere spectator to a public exposure of alleged anomalies in the disbursements of IBP funds, among other things, ventilated by its own employees in the media. Moreover, the imputations of immorality, dishonesty and oppression, albeit personally directed against the President, were exposed in TV programs despite the confidentiality rule contained in Rule 139-B, Section 10 of the Rules of Court that mandates that proceedings against members of the bar should be private and confidential. Public accusations made by employees which sully the reputation of the officers of the employer corporation and disrupt the good order and decorum therein have been held inimical to the employers interest and considered as misconduct. The argument that the complaint in the Supreme Court sought the ouster of Atty. Grapilon as President and not his disbarment as a member of the Philippine Bar is unavailing; the complaint was filed in the Office of the Bar Confidant; if the charges are substantiated, the Supreme Court is not precluded from meting disciplinary sanctions as in disbarment proceedings. Parenthetically, it is more tenable for the IBP employees to file a complaint for misconduct against a member of the Bar, because private parties may file such complaints, than it is for them to seek the ouster of the IBP President from office, considering that said employees are non-lawyers and are not members of the IBP.[24] The Ad Hoc Committee observed that the IBP Board of Governors had complied with the requirements of the law; thus: The petitioners were twice notified by IBP Secretary Roland Inting of the clarificatory hearing scheduled on January 10, 1998 (on December 13-15, 1997 and on January 6, 1998). They were duly notified of the specific charges that were raised against them. They appeared at the meeting with their counsel but only to manifest their conformity with the position taken by their counsel that the Board had no jurisdiction. The Board proceeded to hear the evidence consisting of the testimony of these employees (Ramoncito Yuson, Benito Yuson [resigned], Diana Pedrano, and Ma. Rizalina Almocera) and after deliberation resolved to terminate the fifteen petitioners. The Resolution of January 10, 1998 stated that the respondents have committed serious misconduct in making public the letter-complaint against the IBP President which maligned as well as ridiculed them, causing disruption of activities and good order of the IBP. The Resolution also stated that all the respondents (except Soledad Afroilan) were found to have committed serious misconduct in vehemently refusing to submit to the authority of the Board of Governors, as the highest policy-

making and disciplinary body of the IBP, to conduct inquiry on the actions they committed in deliberately going to the media in connection with their grievances against the IBP President. There was due compliance with the requirement of notice and opportunity to be heard with respect to the charges that arose out of the incident that took place on November 21, 1997. The clarificatory hearing set on January 10, 1998 was intended to give the petitioners the opportunity to answer the charges arising from the media interview on November 21, 1997. By their refusal to participate at the hearing they may be deemed to have forfeited their right to be heard in their defense.[25] and opined that [W]ith respect to the charge that the petitioners committed serious misconduct for refusing to submit to the authority of the Board of Governors at the hearing on January 10, 1998, there was no notice to the petitioners that such refusal to recognize the authority of the Board would be a cause for disciplinary action. Petitioners did not receive any written notice or warning that their refusal to participate at the said hearing would amount to insubordination and misconduct which is also a cause for disciplinary action. Accordingly while petitioners may be disciplined for arrogance and insubordination for refusing to submit to the authority of the Board of Governors, procedural due process requires that they should have been charged in writing for this offense. They cannot be dismissed for insubordination on the same occasion when it was committed. Thus it has been held that there is partial deprivation of the employees right to procedural due process where the offense is not among those for which he has been charged in writing. It is less than fair for management to charge an employee with one offense and then to dismiss herein for having committed another offense with which he had not been charged and against which he was therefore unable adequately to defend himself. As to whether the act of petitioners in deliberately airing their grievances in the media is sufficient ground to support the penalty of dismissal, the IBP correctly argues that these questions essentially involve a termination dispute between an employer and its employees and should properly be submitted to the Labor Arbiter as provided under Article 217 of the Labor Code. Needless to state, the Supreme Court should not be unnecessarily burdened or saddled with the resolution of disputes arising out of a simple employer-employee relation between the IBP and its employees. And there is no compelling reason for the IBP employees to be treated differently from other employees of private corporations. What is important is that the Supreme Court is satisfied that the IBP Board has not acted with malice, partiality or prejudgment, which would justify administrative action against them as

members of the Philippine Bar, and the Committee finds that these accusations have not been substantiated. However, since the validity of the order of dismissal has already been placed in issue before the Committee, and evidence has been adduced by both parties, the Committee believes that without establishing a precedent, the Supreme Court may rule on the question. From the evidence already presented before the Committee, there is sufficient basis for finding petitioners guilty of serious misconduct, warranting termination of their services, for their act of deliberately publicizing in nationwide television the complaints that they have filed against the IBP President, many of which they eventually withdrew. The act is clearly inimical to the public interest of the IBP, whose directors were not even informed of the filing of the charges beforehand, and is disruptive of good order and discipline in the IBP office. The two cases invoked by IBP cited earlier are in point. In the case of Lopez, Sr. vs. Chronicle Publication Employees Association, et al., supra, the employee published his suspicion that his employer was exerting political pressure on a public official to thwart some legitimate activities of the employees. The charge, the court said, amounted to a public accusation that would sully the employers reputation, and the act was inimical to the employers interest. The fact that the same was made in the union newspaper does not alter its deleterious character nor shield or protect a reprehensible act on the ground that it is a union activity, because such end can be achieved without resort to improper conduct or behavior. The act of the employees may be considered as a misconduct which is a just cause for dismissal. And in the case of St. Marys College vs. NLRC, supra, the employees admitted authorship of a widely circulated Manifesto, which ridiculed the officials of the school and demanded their removal and which disrupted the good order and decorum of the school. It was held that this constitutes gross misconduct which is a just cause for the termination of their employment. In this case, the petitioners drew attention to the filing of their petition for the removal of the IBP President on a wide range of charges, including immorality, the illegal disbursement of IBP funds, oppression and harassment, by going on nationwide television. No justifiable or unselfish purpose would be served by such media exposure of the complaint already filed with the Supreme Court, and therefore covered by the mantle of confidentiality, except to sensationalize the same and defile the reputation of the IBP officials concerned.[26] The Court, nevertheless, finds the penalty of dismissal from service of complainants to be rather harsh. Complainants apparently have not acted with clear malice in refusing to take cognizance of the authority of the IBP fact-finding committee on their impression that this Court,

where their complaint against Atty. Grapilon pends, is vested with jurisdiction not only over the main case but also over the incidents arising therefrom. Nevertheless, as the Ad Hoc Committee has so aptly intimated, complainants cannot be said to be entirely faultless. C. The status quo ante contained in the Courts resolution of 03 February 1998 is unequivocal. It effectively enjoined the IBP Board of Governors to maintain the standing situation prior to 10 January 1998, i.e., that complainants remain suspended with pay during these proceedings until otherwise resolved. The Ad Hoc Committee itself has noted: In connection with reinstatement, petitioners have taken the position that the IBP should have immediately complied with the 3 February 1998 Resolution of the Supreme Court because on its face it clearly directs the IBP Board to do so. However, the IBP consistently resisted immediate compliance, insisting that the status quo ante issue was necessarily linked to the question of nullity of the 10 January 1998 Resolution. In its Very Urgent Ex-Parte Motion for Simultaneous Resolution filed on June 25, 1998. The respondent IBP Board prayed that the issue on the status quo ante be resolved simultaneously with and not earlier than the resolution of the main case because the resolution of the former would be a pre-judgment of the latter. Earlier, in its Comment dated February 27, 1998 filed with the Ad Hoc Committee, the IBP Board prayed for a modification of the February 3, 1998 resolution of the Supreme Court. The Ad Hoc Committee allowed the presentation of evidence on the status quo issue principally because there was prima facie merit in the position taken by IBP that the issue on the legality of the dismissal of the petitioners should be resolved first because this question is necessarily linked to the status quo ante issue, and resolution of the status quo issue would prejudge the entire case. It is recalled that at the pre-trial, the petitioners manifested that if turns out that they were not entitled to their positions, they would not agree to return the salaries that would have been paid them. The estimated amount needed for the monthly salaries of the 15 petitioners is P136,518.24 and this amount comes from members funds or dues. The IBP argued that the enforcement of petitioner version of the status quo ante will cause grave and irreparable injury to the IBP; on the other hand, petitioners will be entitled to adequate relief by way of backwages should they be found to have been illegally dismissed. Because of the practically continuous settings of the dates of hearing, the Ad Hoc Committee deferred resolution of the status quo ante issue which is necessarily linked to the contempt incident, until the main case is decided on the merits. The bone of contention between the parties is whether the status quo ante at the time of IBP Resolution dated 10 January 1998 was that petitioners were already dismissed for cause, as contended by IBP, or that petitioners were suspended employees with pay, as contended by petitioners.

We agree with the petitioners that what the Supreme Court had in mind in its Resolution directing the maintenance of the status quo ante was the status of petitioners of being under preventive suspension with pay. The terms of the 3 February 1998 Resolution are clear and require no interpretation that the status referred to was that status before the 10 January 1998 Resolution which dismissed the petitioners-employees. At the time of the adoption of the Resolution, the Supreme Court was aware that the IBP had issued its 10 January 1998 dismissing the petitioners; the status quo ante clearly referred to the employment status before dismissal, i.e. suspension with pay. The IBP Board itself admitted that the status quo referred to was that petitioners were suspended with pay in its Comment dated February 27, 1998 filed with the Ad Hoc Committee. This was the initial interpretation of the IBP itself as indicated in its Comment filed on February 27, 1998 with the Supreme Court seeking a modification of the February 3, 1998 Resolution. However, the Board subsequently took the position that after the investigation which ended on January 10, 1998, the petitioners were ordered dismissed and were no longer under preventive suspension; after investigation they were already terminated and were no longer suspended employees entitled to pay. This later position is not tenable. Petitioners correctly point out that it would not have been necessary for the Supreme Court to issue the status quo ante order if the IBP employees were already deemed terminated. Since it was only on January 10, 1998 that the employees were ordered dismissed, the Supreme Court must have referred to the status before such dismissal. Any other interpretation would be strained and uncalled for. By directing the restoration of petitioners status of being under suspension with pay, pending determination of the validity of the January 10, 1998 Resolution, the Supreme Court must have been motivated by compassion for the plight of the employees in the same manner that the IBP Board itself had initially granted them pay while under suspension for humanitarian reasons. xxx xxx xxx.

However, the fact that the respondents failed to immediately restore the petitioners to their status as employees under preventive suspension is not an act punishable as indirect contempt. IBP has established its defense of good faith as shown by the following: (1) The directive to maintain the status quo ante was without prejudice to the authority of the Ad Hoc Committee to modify this directive such as the evidence may warrant. In its Comment filed with the Ad Hoc Committee on February 23, 1998, the IBP Board prayed that the Resolutions of the Supreme Court be modified by directing that the suspension of petitioners should be without pay, pending the resolution of the case. The IBP Board pointed out, among other things, that it would be inequitable to allow petitioners to receive compensation without rendering services.

(2) In its Comment to the Petition to Cite Respondent IBP Board for Contempt, the Board argued that there was no necessity for the immediate restoration of petitioners status as suspended employees with pay because the petitioners rights will be adequately protected since they will be entitled to backwages if their dismissal is declared invalid. Moreover, in view of the manifestation of the petitioners that they were not willing to refund what salaries would have been paid to them, if their dismissal is upheld, there would be grave and irreparable injury to the IBP if the Supreme Court Resolution were immediately complied with. (3) The February 3 Resolution of the Supreme Court did not grant the prayer of petitioners that IBP be ordered to cease and desist from enforcing its January 10, 1998 Resolution and did not expressly order the reinstatement of the petitioners. There was plausible reason to opine that the Supreme Court could not have intended to place petitioners under preventive suspension with pay for an indefinite period, otherwise it would unequivocally have so stated, and made the order immediately executory. Contempt proceedings are commonly treated as criminal in nature, and all reasonable doubt must be resolved in favor of the alleged contemner. And a person cannot be held for contempt unless the act that is required to be done is clearly and exactly defined. Under the circumstances, we do not find respondent IBP Board liable for contempt.[27] In conclusion, after a thorough consideration of the case, the Court accepts and adopts for the most part the report, findings and recommendations of the Ad Hoc Committee subject to the modifications heretofore discussed and hereafter finally adjudged in the dispositive portions of this resolution. A passing remark. In his letter, dated 04 May 1998, Associate Justice Jesus M. Elbinias informed the Court, through the Clerk of Court, that he was recusing himself from the case for personal reasons. The Court, entertaining no doubt on the independence of mind and objectivity of Mr. Justice Elbinias, in its resolution of 05 May 1998, rejected His Honors inhibition for lack of merit. That notwithstanding, Justice Elbinias did not sign the report and recommendations submitted by the Ad Hoc Committee and instead manifested his non-participation in the proceedings. The Court cannot help but express disappointment over his disregard of its 05 thMay 1998 directive. WHEREFORE, the Court resolves, as it is hereby so RESOLVED: 1. To DISMISS all the charges against Atty. Jose Grapilon for lack of merit;

2. To DIRECT Atty. Grapilon to immediately transfer, or cause the transfer of the funds of the IBP Savings and Loan Association from his name to the name of the Association, its Board of Directors or its duly authorized representatives; 3. To DIRECT the IBP Board of Governors to reinstate complainants to their former positions; 4. To DIRECT complainants to pay a FINE of P2,000.00 each for precipitately seeking media attention to air their complaints; and 5. To DIRECT the IBP Board of Governors to fully implement the status quo ante order of 03 February 1998 by paying the salaries of complainants from 10 January 1998 until their reinstatement to service or the payment of separation, as the case may be, and to ADMONISH the IBP Board of Governors for its failure to comply with said status quo ante order of 03 February 1998. IT IS SO DIRECTED. Davide, Jr., C.J., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Panganiban, Martinez, Quisumbing, Purisima, Pardo, and Buena, JJ, concur. Gonzaga-Reyes, J., no part.

A.M. No. 1048 July 14, 1995 WELLINGTON REYES, complainant, vs. ATTY. SALVADOR M. GAA, respondent.

photographed, fingerprinted and record checked. Respondent declined to give a sworn statement to explain his side of the case, invoking his right against self-incrimination. On the same date, the NBI recommended the prosecution of respondent for violation of Section 3(b) of R.A. No. 3019. On April 13, 1971, the NBI recommended to the Secretary of Justice the filing of administrative charges and the institution of disbarment proceedings against him.

PER CURIAM: This administrative complaint for disbarment charges respondent, a former Assistant City Fiscal of manila, with malpractice and willful violation of his oath as an attorney. I On March 30, 1971, at around 9:00 A.M. complainant reported to the National Bureau of Investigation (NBI) that he had been the victim of extortion by respondent, an Assistant City Fiscal of Manila, who was investigating a complaint for estafa filed by complainant's business rival. According to complainant, he had given respondent P500.00 on March 1, 1971 and a total of P500.00 on three other occasions. He said that another "payoff" was scheduled at 11:00 A.M. that day in respondent's office at the City Hall. An entrapment was set up by the NBI. Complainant furnished the NBI agents several peso bills totalling P150.00 for marking. The paper bills were sent to the Forensic and Chemistry Division of the NBI and subsequently returned to complainant for the use in the entrapment. When complainant went to respondent's office, he was told that the latter would not return until around 2:30 P.M. So complainant and the NBI agents went back at around 2:30 P.M. As there were other persons doing business with respondent, complainant had to wait for thirty minutes. When finally complainant was able to see respondent, the latter greeted him in Tagalog "Ano ba ang sa iyo?" Complainant answered "Hindi tayo nagkita kaninang umaga." To which respondent replied "Oo, kanina pa kita hinihintay." Complainant then handed to respondent the marked money which he placed inside his right pocket. The NBI agents then apprehended respondent and brought him to the NBI Forensic and Chemistry Division for examination. Respondent's hands were found positive of the yellow florescent powder applied earlier to the marked money. Respondent was thereafter taken to the Office of the Anti-Organized Crime Division of the NBI where he was On April 21, 1971, President Marcos suspended respondent from office pending investigation and disposition of his administrative case (Case No. 74). Aside from the criminal complaint and Administrative Case No. 74, two other cases were earlier filed against respondent: namely, Administrative Case No. 10 for Grave Misconduct filed by one Angel Alora on October 13, 1969, wherein respondent was found guilty as charged and was recommended for suspension; and Administrative Case No. 10-A. for partiality filed by Fabiola Fajardo on April 26, 1970, which was pending resolution. In his answer to the complaint for disbarment, respondent asserted that complainant surreptitiously planted the marked money in his pocket without his knowledge and consent. He further said that the criminal case (IS No. 71-6558) filed against him by the NBI at the instance of complainant was still pending preliminary investigation by the City Fiscal of Manila. In connection with the incident of March 30, 1971, he said that he had filed a criminal complaint for incriminatory machination, perjury and attempted corruption of a public official against complainant with the City Fiscal of Manila. In reply to the answer, complainant denied that the several cases against respondent were motivated by revenge, malice or personal ill will. He said that the investigating fiscal had recommended the dismissal of the charges filed by respondent against him. In a resolution dated December 23, 1971, this Court resolved to refer the disbarment case to the Solicitor General for investigation, report and recommendation. However, upon the adoption of Rule 139-B of the Revised Rules of Court., the case was transferred to the IBP Board of Governors for investigation and disposition. On March 15, 1993, Commissioner Vicente Q. Roxas of the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) recommended that respondent be disbarred. Said

recommendation was approved by the IBP Board of Governors in its resolution dated March 26, 1994. II We agree with the recommendation of the IBP Board of Governors. In the case at bench, respondent was caught in flagrante delicto in the act of receiving the marked money from complainant during the entrapment conducted by the NBI agents, which resulted in his arrest and the subsequent filing of administrative and criminal cases against him. In his defense, respondent merely denied the charge of extortion and retorted that the marked money was planted by complainant. It is settled that affirmative testimony is given greater weight than negative testimony (Delos Reyes v. Aznar, 179 SCRA 653 [1989]). When the integrity of a member of the bar is challenged, it is not enough that he denies the charges against him; he must meet the issue and overcome the evidence against him (Malcolm, Legal and Judicial Ethics 93 [1949]). He must show proof that he still maintains that degree of morality and integrity which at all times is expected of him (Bayasen v. Court of Appeals, 103 SCRA 197 [1981]; Vda. de Ramos v. Court of Appeals, 81 SCRA 393 [1978]). Where the misconduct of a lawyer as a government official is of such a character as to affect his qualification as a lawyer or to show moral delinquency, then he may be disciplined as a member of the bar on such grounds (Gonzales-Austria v. Abaya, 176 SCRA 634 [1989]). The extortion committed by respondent constitutes misconduct as a public official, which also constitutes a violation of his oath as a lawyer. The lawyer's oath (Revised Rules of Court, Rule 138, Section 18; People v. De Luna, 102 Phil. 968 [1958]), imposes upon every lawyer the duty to delay no man for money or malice. The lawyer's oath is a source of his obligations and its violation is a ground for his suspension, disbarment or other disciplinary action (Agpalo, Legal Ethics 66-67 [1983]). WHEREFORE, respondent is DISBARRED and his name is ordered STRICKEN OFF from the Roll of Attorneys. Let a copy of this resolution be furnished the Bar Confidant and the Integrated Bar of the Philippines and spread on the personal records of respondent. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 150135 October 30, 2006

petition sanctioned under Section 2(c) of Rule 41 on Appeal from the RTCs, and governed by Rule 45 of the 1997 Rules of Civil Procedure. The Facts On September 1, 1999, spouses Antonio F. Algura and Lorencita S.J. Algura filed a Verified Complaint dated August 30, 19994 for damages against the Naga City Government and its officers, arising from the alleged illegal demolition of their residence and boarding house and for payment of lost income derived from fees paid by their boarders amounting to PhP 7,000.00 monthly. Simultaneously, petitioners filed an Ex-Parte Motion to Litigate as Indigent Litigants,5 to which petitioner Antonio Algura's Pay Slip No. 2457360 (Annex "A" of motion) was appended, showing a gross monthly income of Ten Thousand Four Hundred Seventy Four Pesos (PhP 10,474.00) and a net pay of Three Thousand Six Hundred Sixteen Pesos and Ninety Nine Centavos (PhP 3,616.99) for [the month of] July 1999.6 Also attached as Annex "B" to the motion was a July 14, 1999 Certification7 issued by the Office of the City Assessor of Naga City, which stated that petitioners had no property declared in their name for taxation purposes. Finding that petitioners' motion to litigate as indigent litigants was meritorious, Executive Judge Jose T. Atienza of the Naga City RTC, in the September 1, 1999 Order,8 granted petitioners' plea for exemption from filing fees. Meanwhile, as a result of respondent Naga City Government's demolition of a portion of petitioners' house, the Alguras allegedly lost a monthly income of PhP 7,000.00 from their boarders' rentals. With the loss of the rentals, the meager income from Lorencita Algura's sari-sari store and Antonio Algura's small take home pay became insufficient for the expenses of the Algura spouses and their six (6) children for their basic needs including food, bills, clothes, and schooling, among others. On October 13, 1999, respondents filed an Answer with Counterclaim dated October 10, 1999,9 arguing that the defenses of the petitioners in the complaint had no cause of action, the spouses' boarding house blocked the road right of way, and said structure was a nuisance per se. Praying that the counterclaim of defendants (respondents) be dismissed, petitioners then filed their Reply with Ex-Parte Request for a Pre-Trial Setting10 before the Naga City RTC on October 19, 1999. On February 3, 2000, a pre-trial was held wherein respondents asked for five (5) days within which to file a Motion to Disqualify Petitioners as Indigent Litigants. On March 13, 2000, respondents filed a Motion to Disqualify the Plaintiffs for Non-Payment of Filing Fees dated March 10, 2000.11 They asserted that in addition to the more than PhP 3,000.00

SPOUSES ANTONIO F. ALGURA and LORENCITA S.J. ALGURA, petitioners, vs. THE LOCAL GOVERNMENT UNIT OF THE CITY OF NAGA, ATTY. MANUEL TEOXON, ENGR. LEON PALMIANO, NATHAN SERGIO and BENJAMIN NAVARRO, SR., respondents.

DECISION

VELASCO, JR., J.: Anyone who knows how James Baldwin has extremely ever expensive struggled it is with to be poverty poor.

The Constitution affords litigantsmoneyed or poorequal access to the courts; moreover, it specifically provides that poverty shall not bar any person from having access to the courts.1 Accordingly, laws and rules must be formulated, interpreted, and implemented pursuant to the intent and spirit of this constitutional provision. As such, filing fees, though one of the essential elements in court procedures, should not be an obstacle to poor litigants' opportunity to seek redress for their grievances before the courts. The Case This Petition for Review on Certiorari seeks the annulment of the September 11, 2001 Order of the Regional Trial Court (RTC) of Naga City, Branch 27, in Civil Case No. 99-4403 entitled Spouses Antonio F. Algura and Lorencita S.J. Algura v. The Local Government Unit of the City of Naga, et al., dismissing the case for failure of petitioners Algura spouses to pay the required filing fees.2 Since the instant petition involves only a question of law based on facts established from the pleadings and documents submitted by the parties,3 the Court gives due course to the instant

net income of petitioner Antonio Algura, who is a member of the Philippine National Police, spouse Lorencita Algura also had a mini-store and a computer shop on the ground floor of their residence along Bayawas St., Sta. Cruz, Naga City. Also, respondents claimed that petitioners' second floor was used as their residence and as a boarding house, from which they earned more than PhP 3,000.00 a month. In addition, it was claimed that petitioners derived additional income from their computer shop patronized by students and from several boarders who paid rentals to them. Hence, respondents concluded that petitioners were not indigent litigants. On March 28, 2000, petitioners subsequently interposed their Opposition to the Motion12 to respondents' motion to disqualify them for non-payment of filing fees. On April 14, 2000, the Naga City RTC issued an Order disqualifying petitioners as indigent litigants on the ground that they failed to substantiate their claim for exemption from payment of legal fees and to comply with the third paragraph of Rule 141, Section 18 of the Revised Rules of Court directing them to pay the requisite filing fees.13 On April 28, 2000, petitioners filed a Motion for Reconsideration of the April 14, 2000 Order. On May 8, 2000, respondents then filed their Comment/Objections to petitioner's Motion for Reconsideration. On May 5, 2000, the trial court issued an Order14 giving petitioners the opportunity to comply with the requisites laid down in Section 18, Rule 141, for them to qualify as indigent litigants. On May 13, 2000, petitioners submitted their Compliance15 attaching the affidavits of petitioner Lorencita Algura16and Erlinda Bangate,17 to comply with the requirements of then Rule 141, Section 18 of the Rules of Court and in support of their claim to be declared as indigent litigants. In her May 13, 2000 Affidavit, petitioner Lorencita Algura claimed that the demolition of their small dwelling deprived her of a monthly income amounting to PhP 7,000.00. She, her husband, and their six (6) minor children had to rely mainly on her husband's salary as a boarders' rentals when the Local Government Unit of the City of Naga, through its officers, demolished part of their house because from that time, only a few boarders could be accommodated; that the income from the small store, the boarders, and the meager salary of Antonio Algura were insufficient for their basic necessities like food and clothing, considering that the Algura spouses had six (6) children; and that she knew that petitioners did not own any real property. Thereafter, Naga City RTC Acting Presiding Judge Andres B. Barsaga, Jr. issued his July 17, 200018 Order denying the petitioners' Motion for Reconsideration.

Judge Barsaga ratiocinated that the pay slip of Antonio F. Algura showed that the "GROSS INCOME or TOTAL EARNINGS of plaintiff Algura [was] 10,474.00 which amount [was] over and above the amount mentioned in the first paragraph of Rule 141, Section 18 for pauper litigants residing outside Metro Manila."19 Said rule provides that the gross income of the litigant should not exceed PhP 3,000.00 a month and shall not own real estate with an assessed value of PhP 50,000.00. The trial court found that, in Lorencita S.J. Algura's May 13, 2000 Affidavit, nowhere was it stated that she and her immediate family did not earn a gross income of PhP 3,000.00. The Issue Unconvinced of the said ruling, the Alguras instituted the instant petition raising a solitary issue for the consideration of the Court: whether petitioners should be considered as indigent litigants who qualify for exemption from paying filing fees. The Ruling of the Court The petition is meritorious. A review of the history of the Rules of Court on suits in forma pauperis (pauper litigant) is necessary before the Court rules on the issue of the Algura spouses' claim to exemption from paying filing fees. When the Rules of Court took effect on January 1, 1964, the rule on pauper litigants was found in Rule 3, Section 22 which provided that: Section 22. Pauper litigant.Any court may authorize a litigant to prosecute his action or defense as a pauper upon a proper showing that he has no means to that effect by affidavits, certificate of the corresponding provincial, city or municipal treasurer, orpoliceman which provided them a monthly amount of PhP 3,500.00, more or less. Also, they did not own any real property as certified by the assessor's office of Naga City. More so, according to her, the meager net income from her small sari-sari store and the rentals of some boarders, plus the salary of her husband, were not enough to pay the family's basic necessities.

To buttress their position as qualified indigent litigants, petitioners also submitted the affidavit of Erlinda Bangate, who attested under oath, that she personally knew spouses Antonio Algura and

Lorencita Algura, who were her neighbors; that they derived substantial income from their boarders; that they lost said income from their otherwise. Such authority[,] once given[,] shall include an exemption from payment of legal fees and from filing appeal bond, printed record and printed brief. The legal fees shall be a lien to any judgment rendered in the case [favorable] to the pauper, unless the court otherwise provides. From the same Rules of Court, Rule 141 on Legal Fees, on the other hand, did not contain any provision on pauper litigants. On July 19, 1984, the Court, in Administrative Matter No. 83-6-389-0 (formerly G.R. No. 64274), approved the recommendation of the Committee on the Revision of Rates and Charges of Court Fees, through its Chairman, then Justice Felix V. Makasiar, to revise the fees in Rule 141 of the Rules of Court to generate funds to effectively cover administrative costs for services rendered by the courts.20 A provision on pauper litigants was inserted which reads: Section 16. Pauper-litigants exempt from payment of court fees.Pauper-litigants include wage earners whose gross income do not exceed P2,000.00 a month or P24,000.00 a year for those residing in Metro Manila, and P1,500.00 a month or P18,000.00 a year for those residing outside Metro Manila, or those who do not own real property with an assessed value of not more than P24,000.00, or not more than P18,000.00 as the case may be. Such exemption shall include exemption from payment of fees for filing appeal bond, printed record and printed brief. The legal fees shall be a lien on the monetary or property judgment rendered in favor of the pauper-litigant. To be entitled to the exemption herein provided, the pauper-litigant shall execute an affidavit that he does not earn the gross income abovementioned, nor own any real property with the assessed value afore-mentioned [sic], supported by a certification to that effect by the provincial, city or town assessor or treasurer. When the Rules of Court on Civil Procedure were amended by the 1997 Rules of Civil Procedure (inclusive of Rules 1 to 71) in Supreme Court Resolution in Bar Matter No. 803 dated April 8, 1997, which became effective on July 1, 1997, Rule 3, Section 22 of the Revised Rules of Court was superseded by Rule 3, Section 21 of said 1997 Rules of Civil Procedure, as follows:

Section 21. Indigent party.A party may be authorized to litigate his action, claim or defense as an indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who has no money or property sufficient and available for food, shelter and basic necessities for himself and his family. Such authority shall include an exemption from payment of docket and other lawful fees, and of transcripts of stenographic notes which the court may order to be furnished him. The amount of the docket and other lawful fees which the indigent was exempted from paying shall be a lien on any judgment rendered in the case favorable to the indigent, unless the court otherwise provides. Any adverse party may contest the grant of such authority at any time before judgment is rendered by the trial court. If the court should determine after hearing that the party declared as an indigent is in fact a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall issue for the payment thereof, without prejudice to such other sanctions as the court may impose. At the time the Rules on Civil Procedure were amended by the Court in Bar Matter No. 803, however, there was no amendment made on Rule 141, Section 16 on pauper litigants. On March 1, 2000, Rule 141 on Legal Fees was amended by the Court in A.M. No. 00-2-01-SC, whereby certain fees were increased or adjusted. In this Resolution, the Court amended Section 16 of Rule 141, making it Section 18, which now reads: Section 18. Pauper-litigants exempt from payment of legal fees.Pauper litigants (a) whose gross income and that of their immediate family do not exceed four thousand (P4,000.00) pesos a month if residing in Metro Manila, and three thousand (P3,000.00) pesos a month if residing outside Metro Manila, and (b) who do not own real property with an assessed value of more than fifty thousand (P50,000.00) pesos shall be exempt from the payment of legal fees. The legal fees shall be a lien on any judgment rendered in the case favorably to the pauper litigant, unless the court otherwise provides. To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and his immediate family do not earn the gross income abovementioned, nor do they own any real property with the assessed value aforementioned, supported by an affidavit of a disinterested person attesting to the truth of the litigant's affidavit.

Any falsity in the affidavit of a litigant or disinterested person shall be sufficient cause to strike out the pleading of that party, without prejudice to whatever criminal liability may have been incurred. It can be readily seen that the rule on pauper litigants was inserted in Rule 141 without revoking or amendingSection 21 of Rule 3, which provides for the exemption of pauper litigants from payment of filing fees. Thus, on March 1, 2000, there were two existing rules on pauper litigants; namely, Rule 3, Section 21 and Rule 141, Section 18. On August 16, 2004, Section 18 of Rule 141 was further amended in Administrative Matter No. 042-04-SC, which became effective on the same date. It then became Section 19 of Rule 141, to wit: Sec. 19. Indigent litigants exempt from payment of legal fees. INDIGENT LITIGANTS (A) WHOSE GROSS INCOME AND THAT OF THEIR IMMEDIATE FAMILY DO NOT EXCEED AN AMOUNT DOUBLE THE MONTHLY MINIMUM WAGE OF AN EMPLOYEE AND (B) WHO DO NOT OWN REAL PROPERTY WITH A FAIR MARKET VALUE AS STATED IN THE CURRENT TAX DECLARATION OF MORE THAN THREE HUNDRED THOUSAND (P300,000.00) PESOS SHALL BE EXEMPT FROM PAYMENT OF LEGAL FEES. The legal fees shall be a lien on any judgment rendered in the case favorable to the indigent litigant unless the court otherwise provides. To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and his immediate family do not earn a gross income abovementioned, and they do not own any real property with the fair value aforementioned, supported by an affidavit of a disinterested person attesting to the truth of the litigant's affidavit. The current tax declaration, if any, shall be attached to the litigant's affidavit. Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to dismiss the complaint or action or to strike out the pleading of that party, without prejudice to whatever criminal liability may have been incurred. (Emphasis supplied.) Amendments to Rule 141 (including the amendment to Rule 141, Section 18) were made to implement RA 9227 which brought about new increases in filing fees. Specifically, in the August 16, 2004 amendment, the ceiling for the gross income of litigants applying for exemption and that of their immediate family was increased from PhP 4,000.00 a month in Metro Manila and PhP 3,000.00 a month outside Metro Manila, to double the monthly minimum wage of an employee; and

the maximum value of the property owned by the applicant was increased from an assessed value of PhP 50,000.00 to a maximum market value of PhP 300,000.00, to be able to accommodate more indigent litigants and promote easier access to justice by the poor and the marginalized in the wake of these new increases in filing fees. Even if there was an amendment to Rule 141 on August 16, 2004, there was still no amendment or recall of Rule 3, Section 21 on indigent litigants. With this historical backdrop, let us now move on to the sole issuewhether petitioners are exempt from the payment of filing fees. It is undisputed that the Complaint (Civil Case No. 99-4403) was filed on September 1, 1999. However, the Naga City RTC, in its April 14, 2000 and July 17, 2000 Orders, incorrectly applied Rule 141, Section 18 on Legal Fees when the applicable rules at that time were Rule 3, Section 21 on Indigent Party which took effect on July 1, 1997 and Rule 141, Section 16 on Pauper Litigants which became effective on July 19, 1984 up to February 28, 2000. The old Section 16, Rule 141 requires applicants to file an ex-parte motion to litigate as a pauper litigant by submitting an affidavit that they do not have a gross income of PhP 2,000.00 a month or PhP 24,000.00 a year for those residing in Metro Manila and PhP 1,500.00 a month or PhP 18,000.00 a year for those residing outside Metro Manila or those who do not own real property with an assessed value of not more than PhP 24,000.00 or not more than PhP 18,000.00 as the case may be. Thus, there are two requirements: a) income requirementthe applicants should not have a gross monthly income of more than PhP 1,500.00, and b) property requirementthey should not own property with an assessed value of not more than PhP 18,000.00. In the case at bar, petitioners Alguras submitted the Affidavits of petitioner Lorencita Algura and neighbor Erlinda Bangate, the pay slip of petitioner Antonio F. Algura showing a gross monthly income of PhP 10,474.00,21 and a Certification of the Naga City assessor stating that petitioners do not have property declared in their names for taxation.22 Undoubtedly, petitioners do not own real property as shown by the Certification of the Naga City assessor and so the property requirement is met. However with respect to the income requirement, it is clear that the gross monthly income of PhP 10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00 income of Lorencita Algura when combined, were above the PhP 1,500.00 monthly income threshold prescribed by then Rule 141, Section 16 and therefore, the income requirement was not satisfied. The trial court was therefore correct in disqualifying petitioners Alguras as indigent litigants although the court should have applied Rule 141, Section 16 which was in effect at the time of the filing of the application on September 1, 1999. Even if Rule 141, Section 18 (which superseded Rule 141, Section 16 on

March 1, 2000) were applied, still the application could not have been granted as the combined PhP 13,474.00 income of petitioners was beyond the PhP 3,000.00 monthly income threshold. Unrelenting, petitioners however argue in their Motion for Reconsideration of the April 14, 2000 Order disqualifying them as indigent litigants23 that the rules have been relaxed by relying on Rule 3, Section 21 of the 1997 Rules of Civil procedure which authorizes parties to litigate their action as indigents if the court is satisfied that the party is "one who has no money or property sufficient and available for food, shelter and basic necessities for himself and his family." The trial court did not give credence to this view of petitioners and simply applied Rule 141 but ignored Rule 3, Section 21 on Indigent Party. The position of petitioners on the need to use Rule 3, Section 21 on their application to litigate as indigent litigants brings to the fore the issue on whether a trial court has to apply both Rule 141, Section 16 and Rule 3, Section 21 on such applications or should the court apply only Rule 141, Section 16 and discard Rule 3, Section 21 as having been superseded by Rule 141, Section 16 on Legal Fees. The Court rules that Rule 3, Section 21 and Rule 141, Section 16 (later amended as Rule 141, Section 18 on March 1, 2000 and subsequently amended by Rule 141, Section 19 on August 16, 2003, which is now the present rule) are still valid and enforceable rules on indigent litigants. For one, the history of the two seemingly conflicting rules readily reveals that it was not the intent of the Court to consider the old Section 22 of Rule 3, which took effect on January 1, 1994 to have been amended and superseded by Rule 141, Section 16, which took effect on July 19, 1984 through A.M. No. 83-6-389-0. If that is the case, then the Supreme Court, upon the recommendation of the Committee on the Revision on Rules, could have already deleted Section 22 from Rule 3 when it amended Rules 1 to 71 and approved the 1997 Rules of Civil Procedure, which took effect on July 1, 1997. The fact that Section 22 which became Rule 3, Section 21 on indigent litigant was retained in the rules of procedure, even elaborating on the meaning of an indigent party, and was also strengthened by the addition of a third paragraph on the right to contest the grant of authority to litigate only goes to show that there was no intent at all to consider said rule as expunged from the 1997 Rules of Civil Procedure. Furthermore, Rule 141 on indigent litigants was amended twice: first on March 1, 2000 and the second on August 16, 2004; and yet, despite these two amendments, there was no attempt to delete Section 21 from said Rule 3. This clearly evinces the desire of the Court to maintain the two (2) rules on indigent litigants to cover applications to litigate as an indigent litigant.

It may be argued that Rule 3, Section 21 has been impliedly repealed by the recent 2000 and 2004 amendments to Rule 141 on legal fees. This position is bereft of merit. Implied repeals are frowned upon unless the intent of the framers of the rules is unequivocal. It has been consistently ruled that: (r)epeals by implication are not favored, and will not be decreed, unless it is manifest that the legislature so intended. As laws are presumed to be passed with deliberation and with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing a statute[,] it was not intended to interfere with or abrogate any former law relating to same matter, unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or unless the reason for the earlier act is beyond peradventure removed. Hence, every effort must be used to make all acts stand and if, by any reasonableconstruction they can be reconciled, the later act will not operate as a repeal of the earlier.24 (Emphasis supplied). Instead of declaring that Rule 3, Section 21 has been superseded and impliedly amended by Section 18 and later Section 19 of Rule 141, the Court finds that the two rules can and should be harmonized. The Court opts to reconcile Rule 3, Section 21 and Rule 141, Section 19 because it is a settled principle that when conflicts are seen between two provisions, all efforts must be made to harmonize them. Hence, "every statute [or rule] must be so construed and harmonized with other statutes [or rules] as to form a uniform system of jurisprudence."25 In Manila Jockey Club, Inc. v. Court of Appeals, this Court enunciated that in the interpretation of seemingly conflicting laws, efforts must be made to first harmonize them. This Court thus ruled: Consequently, every statute should be construed in such a way that will harmonize it with existing laws. This principle is expressed in the legal maxim 'interpretare et concordare leges legibus est optimus interpretandi,' that is, to interpret and to do it in such a way as to harmonize laws with laws is the best method of interpretation.26 In the light of the foregoing considerations, therefore, the two (2) rules can stand together and are compatible with each other. When an application to litigate as an indigent litigant is filed, the court shall scrutinize the affidavits and supporting documents submitted by the applicant to determine if the applicant complies with the income and property standards prescribed in the present Section 19 of Rule 141that is, the applicant's gross income and that of the applicant's immediate family do not exceed an amount double the monthly minimum wage of an employee; and the applicant

does not own real property with a fair market value of more than Three Hundred Thousand Pesos (PhP 300,000.00). If the trial court finds that the applicant meets the income and property requirements, the authority to litigate as indigent litigant is automatically granted and the grant is a matter of right. However, if the trial court finds that one or both requirements have not been met, then it would set a hearing to enable the applicant to prove that the applicant has "no money or property sufficient and available for food, shelter and basic necessities for himself and his family." In that hearing, the adverse party may adduce countervailing evidence to disprove the evidence presented by the applicant; after which the trial court will rule on the application depending on the evidence adduced. In addition, Section 21 of Rule 3 also provides that the adverse party may later still contest the grant of such authority at any time before judgment is rendered by the trial court, possibly based on newly discovered evidence not obtained at the time the application was heard. If the court determines after hearing, that the party declared as an indigent is in fact a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall issue or the payment of prescribed fees shall be made, without prejudice to such other sanctions as the court may impose. The Court concedes that Rule 141, Section 19 provides specific standards while Rule 3, Section 21 does not clearly draw the limits of the entitlement to the exemption. Knowing that the litigants may abuse the grant of authority, the trial court must use sound discretion and scrutinize evidence strictly in granting exemptions, aware that the applicant has not hurdled the precise standards under Rule 141. The trial court must also guard against abuse and misuse of the privilege to litigate as an indigent litigant to prevent the filing of exorbitant claims which would otherwise be regulated by a legal fee requirement. Thus, the trial court should have applied Rule 3, Section 21 to the application of the Alguras after their affidavits and supporting documents showed that petitioners did not satisfy the twin requirements on gross monthly income and ownership of real property under Rule 141. Instead of disqualifying the Alguras as indigent litigants, the trial court should have called a hearing as required by Rule 3, Section 21 to enable the petitioners to adduce evidence to show that they didn't have property and money sufficient and available for food, shelter, and basic necessities for them and their family.27 In that hearing, the respondents would have had the right to also present evidence to refute the allegations and evidence in support of the application of the petitioners to litigate as indigent litigants. Since this Court is not a trier of facts, it will have to remand the case to the trial court to determine whether petitioners can be considered as indigent litigants using the standards set in Rule 3, Section 21.

Recapitulating the rules on indigent litigants, therefore, if the applicant for exemption meets the salary and property requirements under Section 19 of Rule 141, then the grant of the application is mandatory. On the other hand, when the application does not satisfy one or both requirements, then the application should not be denied outright; instead, the court should apply the "indigency test" under Section 21 of Rule 3 and use its sound discretion in determining the merits of the prayer for exemption. Access to justice by the impoverished is held sacrosanct under Article III, Section 11 of the 1987 Constitution. The Action Program for Judicial Reforms (APJR) itself, initiated by former Chief Justice Hilario G. Davide, Jr., placed prime importance on 'easy access to justice by the poor' as one of its six major components. Likewise, the judicial philosophy of Liberty and Prosperity of Chief Justice Artemio V. Panganiban makes it imperative that the courts shall not only safeguard but also enhance the rights of individualswhich are considered sacred under the 1987 Constitution. Without doubt, one of the most precious rights which must be shielded and secured is the unhampered access to the justice system by the poor, the underprivileged, and the marginalized. WHEREFORE, the petition is GRANTED and the April 14, 2000 Order granting the disqualification of petitioners, the July 17, 2000 Order denying petitioners' Motion for Reconsideration, and the September 11, 2001 Order dismissing the case in Civil Case No. RTC-99-4403 before the Naga City RTC, Branch 27 are ANNULLED andSET ASIDE. Furthermore, the Naga City RTC is ordered to set the "Ex-Parte Motion to Litigate as Indigent Litigants" for hearing and apply Rule 3, Section 21 of the 1997 Rules of Civil Procedure to determine whether petitioners can qualify as indigent litigants. No costs. SO ORDERED. Quisumbing, J., Chairperson, Carpio, Carpio Morales, and Tinga, JJ., concur.