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COURT OF APPEALS BY: COC TERESITA R.

MARIGOMEN, Complainant,

A.M. No. CA-11-24-P


(formerly A.M. OCA I.P.I. No. 10-163-CA-P)

Present: CARPIO, J., Chairperson, BRION, PEREZ, SERENO, and REYES, JJ. Promulgated: November 16, 2011

- versus -

ENRIQUE E. MANABAT, JR., Security Guard I, Court of Appeals, Manila, Respondent.

x------------------------------------------------------------------------------------x RESOLUTION BRION, J.:

We resolve the present administrative complaint filed against Enrique E. Manabat, Jr. (respondent), Security Guard 1 (SG1) of the Court of Appeals (CA), Manila, for gross neglect of duty and conduct prejudicial to the best interest of the service by the accidental firing of his service pistol inside the CA guardhouse on June 8, 2009. In an Investigation Report[1] dated June 15, 2009, Mr. Reynaldo V. Dianco, Chief of the CA Security Services Unit, informed Hon. Justice Normandie B. Pizarro, Chairperson of the CA Security and Safety Committee, that at around 8:00 a.m. of June 8, 2009, the respondent, who was inside the guardhouse, accidentally fired his service pistol, a 9mm FEG Hungary, while in the process of unloading it for turnover to SG1 Miguel Tamba, the guard on duty for the next shift. In the

same report, Mr. Dianco recommended that the respondent be dismissed from the service for gross neglect of duty. The matter was forwarded to the CA Clerk of Court, Atty. Teresita R. Marigomen, for investigation.[2] On June 22, 2009, the CA Clerk of Court filed a formal charge [3] against the respondent for gross neglect of duty and conduct prejudicial to the best interest of the service. The respondent was directed to file a written answer, under oath, within five (5) days from receipt thereof. In his verified answer,[4] the respondent explained that the firing of his service pistol on June 8, 2009 was purely accidental, it was not done with evident bad faith, and it did not cause undue injury to any party; hence, his dismissal from the service for gross neglect of duty is unwarranted. He narrated that, to his surprise, the pistol went off after he removed the magazine and while emptying the chamber load; that immediately after the incident, he reported the same to the CA Clerk of Court; and that in turning over the pistol to SG1 Tamba, he observed the usual and safety procedure of pointing the guns muzzle towards the ground, particularly to the inner wall of the guardhouse, and at a safe distance from his coofficer a fact attested to by SG1 Tamba in an affidavit attached to his answer.[5] As cause of the accidental discharge, the respondent intimated that his pistol may have been defective because during their recent firing course at Camp Crame, service pistols of the model 9mm FEG Hungary used in the shooting exercises malfunctioned; that the malfunctioning of the 9mm FEG Hungary pistols was made known to Justice Pizarro; and that their police instructor at Camp Crame recommended that they no longer use the 9mm FEG Hungary pistols as they may encounter problems with them in the future. The respondent reiterated these arguments in the position paper[6] he subsequently filed with the CA. After the investigation, the CA Clerk of Court did not find the respondent guilty of gross neglect of duty and conduct prejudicial to the best interest of the service. However, the CA Clerk of Court found the respondent liable for simple neglect of duty, and recommended the penalty of one (1) month and one (1) day suspension without pay, with a stern warning that a repetition of the same offense would be dealt with more severely. The CA Clerk of Court forwarded the Investigation Report and Recommendation[7] to CA Presiding Justice Andres B.

Reyes, Jr., who adopted the recommended penalty and forwarded the records of the instant case to this Court.[8] In an Indorsement[9] dated March 24, 2010, the Office of the Court Administrator (OCA) required the respondent to file his comment on the formal charge against him for gross neglect of duty and conduct prejudicial to the best interest of the service. In his comment,[10] the respondent stressed that the incident was purely accidental; that he had complied with the standard procedure in unloading his pistol, but despite this, the pistol still went off without his fault. For this reason, he argued that the recommended penalty of dismissal from the service is highly improper and he prayed that the charges against him be dismissed for insufficiency of evidence. Also, he related that he had been employed with the CA for eleven (11) years and that his latest performance rating for the period of January to June 2009 was very satisfactory. After a review of the records, the OCA agreed with the CAs finding that the respondent is guilty of simple neglect of duty. For one, the OCA did not find the elements of gross negligence present in the case. The OCA, however, could not absolve the respondent from liability because the latter, by accidentally firing his service pistol, still failed to exercise the diligence required in the proper discharge of his functions; that the respondent should have been extra careful in handling his firearm while turning it over to SG1 Tamba. The OCA belied the respondents claim that his service pistol was defective for there was evidence which showed that the exact same service pistol issued to him was in good condition and has never been reported for any malfunction this fact was attested to by former SG1 Marcialito Villaflor and SG1 Romeo Pimentel, to whom the same service pistol had earlier been issued.[11] Also, the OCA did not find the respondent liable for the offense of conduct prejudicial to the best interest of the service because the records do not show that the respondents negligent act compromised the integrity and efficacy of the government service.[12]

In its Recommendation[13] to this Court, the OCA enumerated the previous infractions committed by the respondent: that in March 1999, the respondent was reprimanded for discourtesy with stern warning; that in November 2001, he was sternly reprimanded for unprofessional behavior and acts prejudicial to the service; and that in June 2005, he was suspended for a month for habitual absenteeism. The OCA, however, noted that the respondents performance rating for the periods of January to June 2008 and July to December 2008 were both very satisfactory and that simple neglect of duty is not one of the offenses for which the respondent was previously found guilty. Due to these considerations, the OCA agreed with the CA and submitted that the respondent be suspended for one (1) month and one (1) day, without pay, and be sternly warned that a repetition of the same or similar offense shall be dealt with more severely. THE COURTS RULING We agree with the OCAs recommendation and find respondent Enrique E. Manabat, Jr. administratively liable for simple neglect of duty. The unexpected discharge of a firearm may occur for a variety of reasons. It can be the result of mechanical failure such as wear, faulty assembly, damage or faulty design of the firearm, but most often, undesired discharges result from operator error or due to the carelessness or ineptness of the person handling the firearm. It is for the latter reason that our court security personnel are taught the basic rules of firearm or gun safety in order to prevent incidents of undesired discharges. To exculpate himself from liability, the respondent contended that the discharge might have been caused by a mechanical failure; that his service pistol may have been defective because 9mm FEG Hungary pistols used during their recent firing course at Camp Crame malfunctioned. This incident at Camp Crame, however, is barely proof that the respondents pistol is defective. One cannot simply generalize, based from such incident, that all 9mm FEG Hungary pistols used by the CA security personnel are defective. To bolster his theory, the respondent should have presented evidence to show that his service pistol was, at that time, not mechanically sound, particularly in light of the evidence that the pistol is in good working condition.

In ruling out mechanical causes, it can only be concluded that the undesired discharge of the respondents service pistol was the result of his own negligence; in the usual course of things, a firearm that is being unloaded should not discharge if gun safety procedures had been strictly followed. What cannot be denied is that the gun fired and the firing could not have happened unless there was a bullet in the guns chamber. Assuming that the respondent did indeed remove the magazine and did indeed cock the gun to eject whatever bullet that might have been in the chamber, obviously, he simply cocked the gun and did not visually examine if the chamber was clear. This is a basic and elementary precaution that every gun handler, more so a security guard who is provided a gun for his duties, should know. The next question to be resolved is whether the respondents negligence, in causing the undesired discharge of his service pistol, is gross in nature. We rule in the negative. Simple neglect of duty is defined as the failure of an employee to give proper attention to a required task or to discharge a duty due to carelessness or indifference.[14] On the other hand, gross neglect of duty is characterized by want of even the slightest care, or by conscious indifference to the consequences, or by flagrant and palpable breach of duty.[15] We cannot consider the respondents negligence as gross in nature because there is nothing in the records to show that the respondent willfully and intentionally fired his service pistol. Also, at the time of the incident, the respondent did observe most of the safety measures required in unloading his firearm. As attested to by SG1 Tamba who was the lone eyewitness to the incident, the respondent did point the pistols muzzle towards a s afe direction, i.e., to the ground, at the time it was being unloaded and when it unexpectedly went off a fact evidenced by the bullet mark on the floor of the guardhouse.[16] We also agree with the OCA that the respondent is not liable for conduct prejudicial to the best interest of the service. Although the Revised Uniform Rules on Administrative Cases in the Civil Service[17] does not provide for a definition or enumerate acts that constitute such an offense, we held that conduct prejudicial to

the best interest of the service refers to acts or omissions that violate the norm of public accountability and diminish or tend to diminish the peoples faith in the Judiciary.[18] Here, we do not find the respondents negligent act to have an adverse reflection on the Judiciarys integrity. Under Section 52, Rule IV of the Uniform Rules on Administrative Cases in the Civil Service,[19] simple neglect of duty is classified as a less grave offense, punishable by suspension without pay for one (1) month and one (1) day to six (6) months for the first offense. Considering the respondents performance ratings and that this is his first offense for simple neglect of duty, we impose upon him the penalty of suspension in the minimum period. ACCORDINGLY, premises considered, respondent Enrique E. Manabat, Jr., Security Guard I of the Court of Appeals, Manila, is SUSPENDED for one (1) month and one (1) day, without pay, for simple neglect of duty. He is further DIRECTED to undergo, during his suspension, a firearm handling security course with the appropriate unit of the Philippine National Police, at his own expense, and shall be deemed to have completely served his suspension only upon submission of proof of the completion of this course. He is WARNED that a repetition of the same or similar offense shall be dealt with more severely. Let a copy of this Resolution be given to the Presiding Justice, Court of Appeals, Manila, with the suggestion that the firearms and ammunition issued to the CA security force be technically examined for their mechanical safety and working order. SO ORDERED. KAISAHAN AT KAPATIRAN NG MGA MANGGAGAWA AT KAWANI SA MWCEAST ZONE UNION and EDUARDO BORELA, representing its members, Petitioners, G.R. No. 174179 Present:

CARPIO, J.,

Chairperson, BRION, - versus PEREZ, SERENO, and REYES, JJ.

MANILA WATER COMPANY, INC., Respondent.

Promulgated:

November 16, 2011

x------------------------------------------------------------------------------------x

DECISION

BRION, J.:

We resolve the petition for review on certiorari[1] filed by the petitioners, Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union

(Union) and Eduardo Borela, assailing the decision[2] and the resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 83654.[4]

The Factual Antecedents The background facts are not disputed and are summarized below. The Union is the duly-recognized bargaining agent of the rank-and-file employees of the respondent Manila Water Company, Inc. (Company) while Borela is the Union President.[5] On February 21, 1997, the Metropolitan Waterworks and Sewerage System (MWSS) entered into a Concession Agreement (Agreement) with the Company to privatize the operations of the MWSS.[6] Article 6.1.3 of the Agreement provides that the Concessionaire shall grant [its] employees benefits no less favorable than those granted to MWSS employees at the time of [their] separation from MWSS.[7] Among the benefits enjoyed by the employees of the MWSS were the amelioration allowance (AA) and the cost-ofliving allowance (COLA) granted in August 1979, pursuant to Letter of Implementation No. 97 issued by the Office of the President.[8] The payment of the AA and the COLA was discontinued pursuant to Republic Act No. 6758, otherwise known as the Salary Standardization Law, which integrated the allowances into the standardized salary. [9] Nonetheless, in 2001, the Union demanded from the Company the payment of the AA and the COLA during the renegotiation of the parties Collective Bargaining Agreement (CBA).[10] The Company initially turned down this demand, however, it subsequently agreed to an amendment of the CBA on the matter, which provides:
The Company shall implement the payment of the Amelioration Allowance and Cost of Living [A]llowance retroactive August 1, 1997 should the MWSS decide to pay its employees and all its former employees or upon award of a favorable order by the MWSS Regulatory Office or upon receipt of [a] final court judgment.[11]

Thereafter, the Company integrated the AA into the monthly payroll of all its employees beginning August 1, 2002, payment of the AA and the COLA after an appropriation was made and approved by the MWSS Board of Trustees. The Company, however, did not subsequently include the COLA since the Commission on Audit disapproved its payment because the Company had no funds to cover this benefit.[12] As a result, the Union and Borela filed on April 15, 2003 a complaint against the Company for payment of the AA, COLA, moral and exemplary damages, legal

interest, and attorneys fees before the National Labor Relations Commission (NLRC).[13] The Compulsory Arbitration Rulings In his decision of August 20, 2003, Labor Arbiter Aliman D. Mangandog (LA) ruled in favor of the petitioners and ordered the payment of their AA and COLA, six percent (6%) interest of the total amount awarded, and ten percent (10%) attorneys fees.[14] On appeal by the Company, the NLRC affirmed with modification the LAs decision.[15] It set aside the award of the COLA benefits because the claim was not proven and established, but ordered the Company to pay the petitioners their accrued AA of about P107,300,000.00 in lump sum and to continue paying the AA starting August 1, 2002. It also upheld the award of 10% attorneys fees to the petitioners. In its Motion for Partial Reconsideration of the NLRCs December 19, 2003 decision, the Company pointed out that the award of ten percent (10%) attorneys fees to the petitioners is already provided for in their December 19, 2003 Memorandum of Agreement (MOA) which mandated that attorneys fees shall be deducted from the AA and CBA receivables.[16] This compromise agreement, concluded between the parties in connection with a notice of strike filed by the Union in 2003,[17] provides among others that:[18]
31. Attorneys fees 10% to be deducted from AA and CBA receivables. 32. All other issues are considered withdrawn.[19]

In their Opposition, the petitioners argued that the MOA only covered the payment of their share in the contracted attorneys fees, but did not include the attorneys fees awarded by the NLRC. To support their claim, the petitioners submitted Borelas affidavit which relevantly stated:
2. On December 19, 2003, in settlement of the notice of Strike for CBA Deadlock, Manila Water Company, Inc. and the Union entered into an Agreement settling the deadlock issued (sic) of the CBA negotiation including [the] payment of the AA and the mode of payment thereof. 3. Considering that the AA payment was included in the Agreement, the Union representation deemed it wise, for practical reason, to authorize the

company to immediately deduct from the benefits that will be received by the member/employees the 10% attorneys fees in conformity with our contract with our counsel. 4. The 10% attorneys fees paid by the members/employees is separate and distinct from the obligation of the company to pay the 10% awarded attorneys fees which we also gave to our counsel as part of our contingent fee agreement. 5. There was no agreement that we are going to shoulder the entire attorneys fees as this would cost us 20% of the amount we would recover. There was also no agreement that the 10% attorneys fees in the MOA represents the entire attorneys cost because the said payment represents only our compliance of our share in the attorneys fees in conformity with our contract. Likewise, we did not waive the awarded 10% attorneys fees because the same belongs to our counsel and not to us and beyond our authority.[20] (emphasis ours)

The NLRC subsequently denied both parties Motions for Partial Reconsideration,[21] prompting the Company to elevate the case to the CA via a petition for certiorari under Rule 65 of the Rules of Court. It charged the NLRC of grave abuse of discretion in sustaining the award of attorneys fees on the grounds that: (1) it is contrary to the MOA[22] concerning the payment of attorneys fees; (2) there was no finding of unlawful withholding of wages or bad faith on the part of the Company; and (3) the attorneys fees awarded are unconscionable. The CA Decision In its Decision promulgated on March 6, 2006,[23] the CA modified the assailed NLRC rulings by deleting [t]he order for respondent MWCI to pay attorneys fees equivalent to 10% of the total judgment awards. The CA recognized the binding effect of the MOA between the Company and the Union; it stressed that any further award of attorneys fees is unfounded considering that it did not find anything in the Agreement that is contrary to law, morals, good customs, public policy or public order. In resolving the issue, the CA cited our ruling in Traders Royal Bank Employees Union-Independent v. NLRC,[24] where we distinguished between the two commonly accepted concepts of attorneys fees the ordinary and the extraordinary. We held in that case that under its ordinary concept, attorneys fees are the reasonable compensation paid to a lawyer by his client for legal services

rendered. On the other hand, we ruled that in its extraordinary concept, attorneys fees represent an indemnity for damages ordered by the court to be paid by the losing party in a litigation based on what the law provides; it is payable to the client not to the lawyer, unless there is an agreement to the contrary. The CA noted that the fees at issue in this case fall under the extraordinary concept the NLRC having ordered the Company, as losing party, to pay the Union and its members ten percent (10%) attorneys fees. It found the award without basis under Article 111 of the Labor Code which provides that attorneys fees equivalent to ten percent (10%) of the amount of wages recovered may be assessed only in cases of unlawful withholding of wages. The CA ruled that the facts of the case do not indicate any unlawful withholding of wages or bad faith attributable to the Company. It also held that the additional grant of 10% attorneys fees violates Article 111 of the Labor Cod e considering that the MOA between the parties already ensured the payment of 10% attorneys fees, deductible from the AA and CBA receivables of the Unions members. The CA thus adjudged the NLRC decision awarding attorneys fees to have been rendered with grave abuse of discretion. The Union and Borela moved for reconsideration, but the CA denied the motion in its resolution of August 15, 2006.[25] Hence, the present petition. The Petition The petitioners seek a reversal of the CA rulings on the sole ground that the appellate court committed a reversible error in reviewing the factual findings of the NLRC and in substituting its own findings an action that is not allowed under Rule 65 of the Rules of Court. They question the CAs re-evaluation of the evidence, particularly the MOA, and its conclusion that there was no unlawful withholding of wages or bad faith attributable to the Company, thereby contradicting the factual findings of the NLRC. They also submit that a petition for certiorari under Rule 65 is confined only to issues of jurisdiction or grave abuse of discretion, and does not include the review of the NLRCs evaluation of the evidence and its factual findings.[26] The petitioners argue that in the present case, all the parties arguments and evidence relating to the award of attorneys fees were carefully studied and weighed by the NLRC. As a result, the NLRC gave credence to Borelas affidavit claiming that the attorneys fees paid by the Unions members are separate and

distinct from the attorneys fees awarded by the NLRC. The petitioners stress that whether the NLRC is correct in giving credence to Borelas affidavit is a question that the CA cannot act upon in a petition for certiorari unless grave abuse of discretion can be shown.[27] The Case for the Company In its Memorandum filed on September 7, 2007,[28]the Company argues that the correctness of the NLRCs interpretation of the provision of the MOA, the reasonableness of the attorneys fees in question, and the application or interpretation of a provision of the Labor Code on the matter are questions of law which the CA validly inquired into in the certiorari proceedings. It argues that the CA correctly ruled that the NLRC acted with grave abuse of discretion when it affirmed the LAs award of attorneys fees despite the absence of a finding of any unlawful withholding of wages or bad faith on the part of the Company. It finally contends that the Unions demand, together with the NLRC award, is unconscionable as it represents 20% of the amount due or about P21.4 million. Issues The core issues posed for our resolution are: (1) whether the CA can review the factual findings of the NLRC in a Rule 65 petition; and (2) whether the NLRC gravely abused its discretion in awarding ten percent (10%) attorneys fees to the petitioners. The Courts Ruling We find the petition and its arguments meritorious.

On the CAs Review of the NLRCs Factual Findings We agree with the petitioners that as a rule, the CA cannot undertake a reassessment of the evidence presented in the case in certiorari proceedings under Rule 65 of the Rules of Court.[29] However, the rule admits of exceptions. In Mercado v. AMA Computer College-Paraaque City, Inc.,[30] we held that the CA may examine the factual findings of the NLRC to determine whether or not its conclusions are supported by substantial evidence, whose absence justifies a finding of grave abuse of discretion. We ruled:
We agree with the petitioners that, as a rule in certiorari proceedings under Rule 65 of the Rules of Court, the CA does not assess and weigh each piece of evidence introduced in the case. The CA only examines the factual findings of the NLRC to determine whether or not the conclusions are supported by substantial evidence whose absence points to grave abuse of discretion amounting to lack or excess of jurisdiction. In the recent case of Protacio v. Laya Mananghaya & Co., we emphasized that: As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court, the appellate court does not assess and weigh the sufficiency of evidence upon which the Labor Arbiter and the NLRC based their conclusion. The query in this proceeding is limited to the determination of whether or not the NLRC acted without or in excess of its jurisdiction or with grave abuse of discretion in rendering its decision. However, as an exception, the appellate court may examine and measure the factual findings of the NLRC if the same are not supported by substantial evidence. The Court has not hesitated to affirm the appellate courts reversals of the decisions of labor tribunals if they are not supported by substantial evidence. [31] (italics and emphasis supplied; citation omitted)

As discussed below, our review of the records and of the CA decision shows that the CA erred in ruling that the NLRC gravely abused its discretion in awarding the petitioners ten percent (10%) attorneys fees without basis in fact and in

law. Corollary to the above-cited rule is the basic approach in the Rule 45 review of Rule 65 decisions of the CA in labor cases which we articulated in Montoya v. Transmed Manila Corporation[32] as a guide and reminder to the CA. We laid down that:
In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the review of questions of law raised against the assailed CA decision. In ruling for legal correctness, we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it; we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case?[33] (italics and emphases supplied)

In the present case, we are therefore tasked to determine whether the CA correctly ruled that the NLRC committed grave abuse of discretion in awarding 10% attorneys fees to the petitioners. On the Award of Attorneys Fees

Article 111 of the Labor Code, as amended, governs the grant of attorneys fees in labor cases:

Art. 111. Attorneys fees.- (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of wages recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorneys fees which exceed ten percent of the amount of wages recovered.

Section 8, Rule VIII, Book III of its Implementing Rules also provides, viz.:

Section 8. Attorneys fees. Attorneys fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party.

We explained in PCL Shipping Philippines, Inc. v. National Labor Relations Commission[34]that there are two commonly accepted concepts of attorneys fees the ordinary and extraordinary. In its ordinary concept, an attorneys fee is the reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be assessed. In its extraordinary concept, attorneys fees are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party. The instances when these may be awarded are enumerated in Article 2208 of the Civil Code, specifically in its paragraph 7 on actions for recovery of wages, and is payable not to the lawyer but to the

client,unless the client and his lawyer have agreed that the award shall accrue to the lawyer as additional or part of compensation.[35]

We also held in PCL Shipping that Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorneys fees and that Article 111 is an exception to the declared policy of strict construction in the award of attorneys fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. In carrying out and interpreting the Labor Code's provisions and implementing regulations, the employee's welfare should be the primary and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as embodied in Article 4 of the Labor Code (which provides that "[a]ll doubts in the implementation and interpretation of the provisions of [the Labor Code], including its implementing rules and regulations, shall be resolved in favor of labor") and Article 1702 of the Civil Code (which provides that "[i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer).[36]

We similarly so ruled in RTG Construction, Inc. v. Facto[37]and in Ortiz v. San Miguel Corporation.[38] In RTG Construction, we specifically stated:

Settled is the rule that in actions for recovery of wages, or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interests, a monetary award by way of attorneys fees is justifiable under Article 111 of the Labor Code; Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article 2208 of the Civil Code. The award of attorneys fees is proper, and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly.[39] (emphasis ours)

In PCL Shipping, we found the award of attorneys fees due and appropriate since the respondent therein incurred legal expenses after he was forced to file an action for recovery of his lawful wages and other benefits to protect his rights.[40] From this perspective and the above precedents, we conclude that the CA erred in ruling that a finding of the employers malice or bad faith in withholding wages must precede an award of attorneys fees under Article 111 of the Labor Code. To reiterate, a plain showing that the lawful wages were not paid without justification is sufficient.

In the present case, we find it undisputed that the union members are entitled to their AA benefits and that these benefits were not paid by the Company. That the Company had no funds is not a defense as this was not an insuperable cause that was cited and properly invoked. As a consequence, the union members represented by the Union were compelled to litigate and incur legal expenses. On these bases, we find no difficulty in upholding the NLRCs award of ten percent (10%) attorneys fees.

The more significant issue in this case is the effect of the MOA provision that attorneys fees shall be deducted from the AA and CBA receivables. In this regard, the CA held that the additional grant of 10% attorneys fees by the NLRC violates Article 111 of the Labor Code, considering that the MOA between the parties already ensured the payment of 10% attorneys fees deductible from the AA and CBA receivables of the Unions members. In addition, the Company also argues that the Unions demand, together with the NLRC award, is unconscionable as it represents 20% of the amount due or about P21.4 million.

In Traders Royal Bank Employees Union-Independent v. NLRC,[41] we expounded on the concept of attorneys fees in the context of Article 111 of the Labor Code, as follows:

In the first place, the fees mentioned here are the extraordinary attorneys fees recoverable as indemnity for damages sustained by and payable to the prevailing part[y]. In the second place, the ten percent (10%) attorneys fees provided for in Article 111 of the Labor Code and Section 11, Rule VIII, Book III of the Implementing Rules is the maximum of the award that may thus be granted. Article 111 thus fixes only the limit on the amount of attorneys fees the victorious party may recover in any judicial or administrative proceedings and it does not even prevent the NLRC from fixing an amount lower than the ten percent (10%) ceiling prescribed by the article when circumstances warrant it.[42] (emphases ours; citation omitted)

In the present case, the ten percent (10%) attorneys fees awarded by the NLRC on the basis of Article 111 of the Labor Code accrue to the Unions members as indemnity for damages and not to the Unions counsel as compensation for his legal services, unless, they agreed that the award shall be given to their counsel as additional or part of his compensation; in this case the Union bound itself to pay 10% attorneys fees to its counsel under the MOA and also gave up the attorneys fees awarded to the Unions members in favor of their counsel. This is supported by Borelas affidavit which stated that *t+he 10% attorneys fees paid by the members/employees is separate and distinct from the obligation of the company to pay the 10% awarded attorneys fees which we also gave to our counsel as part of our contingent fee agreement.[43] The limit to this agreement is that the indemnity for damages imposed by the NLRC on the losing party (i.e., the Company) cannot exceed ten percent (10%).

Properly viewed from this perspective, the award cannot be taken to mean an additional grant of attorneys fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal

obligation than the one contracted under the MOA. Simply stated, the attorneys fees contracted under the MOA do not refer to the amount of attorneys fees awarded by the NLRC; the MOA provision on attorneys fees does not have any bearing at all to the attorneys fees awarded by the NLRC under Article 111 of the Labor Code. Based on these considerations, it is clear that the CA erred in ruling that the LAs award of attorneys fees violated the maximum limit of ten percent (10%) fixed by Article 111 of the Labor Code.

Under this interpretation, the Companys argument that the attorneys fees are unconscionable as they represent 20% of the amount due or about P21.4 million is more apparent than real. Since the attorneys fees awarded by the LA pertained to the Unions members as indemnity for damages, it was totally within their right to waive the amount and give it to their counsel as part of their contingent fee agreement. Beyond the limit fixed by Article 111 of the Labor Code, such as between the lawyer and the client, the attorneys fees may exceed ten percent (10%) on the basis of quantum meruit, as in the present case.[44] WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed decision dated March 6, 2006 and the resolution dated August 15, 2006 of the Court of Appeals in CA-G.R. SP No. 83654 are REVERSED and SET ASIDE. The Labor Arbiters award of attorneys fees equivalent to ten percent (10%) of the total judgment award is hereby REINSTATED. No pronouncement as to costs. SO ORDERED. JUDGE RENE B. BACULI, Complainant, A.C. No. 8920 Present: BRION, J.,* Acting Chairperson, DEL CASTILLO,** PEREZ,

- versus -

MENDOZA,*** and SERENO, JJ. Promulgated: ATTY. MELCHOR A. BATTUNG, Respondent. September 28, 2011

x------------------------------------------------------------------------------------x DECISION BRION, J.:

Before us is the resolution[1] of the Board of Governors of the Integrated Bar of the Philippines (IBP) finding Atty. Melchor Battung liable for violating Rule 11.03, Canon 11 of the Code of Professional Responsibility and recommending that he be reprimanded. The complainant is Judge Rene B. Baculi, Presiding Judge of the Municipal Trial Court in Cities, Branch 2, Tuguegarao City. The respondent, Atty. Battung, is a member of the Bar with postal address on Aguinaldo St.,Tuguegarao City. Background Judge Baculi filed a complaint for disbarment[2] with the Commission on Discipline of the IBP against the respondent, alleging that the latter violated Canons 11[3] and 12[4] of the Code of Professional Responsibility. Violation of Canon 11 of the Code of Professional Responsibility Judge Baculi claimed that on July 24, 2008, during the hearing on the motion for reconsideration of Civil Case No. 2502, the respondent was shouting while arguing his motion. Judge Baculi advised him to tone down his voice but instead, the respondent shouted at the top of his voice. When warned that he

would be cited for direct contempt, the respondent shouted, Then cite me![5] Judge Baculi cited him for direct contempt and imposed a fine of P100.00. The respondent then left. While other cases were being heard, the respondent re-entered the courtroom and shouted, Judge, I will file gross ignorance against you! I am not afraid of you![6] Judge Baculi ordered the sheriff to escort the respondent out of the courtroom and cited him for direct contempt of court for the second time. After his hearings, Judge Baculi went out and saw the respondent at the hall of the courthouse, apparently waiting for him. The respondent again shouted in a threatening tone, Judge, I will file gross ignorance against you! I am not afraid of you! He kept on shouting, I am not afraid of you! and challenged the judge to a fight. Staff and lawyers escorted him out of the building.[7] Judge Baculi also learned that after the respondent left the courtroom, he continued shouting and punched a table at the Office of the Clerk of Court.[8] Violation of Canon 12 of the Code of Professional Responsibility According to Judge Baculi, the respondent filed dilatory pleadings in Civil Case No. 2640, an ejectment case. Judge Baculi rendered on October 4, 2007 a decision in Civil Case No. 2640, which he modified on December 14, 2007. After the modified decision became final and executory, the branch clerk of court issued a certificate of finality. The respondent filed a motion to quash the previously issued writ of execution, raising as a ground the motion to dismiss filed by the defendant for lack of jurisdiction. Judge Baculi asserted that the respondent knew as a lawyer that ejectment cases are within the jurisdiction of First Level Courts and the latter was merely delaying the speedy and efficient administration of justice.

The respondent filed his Answer,[9] essentially saying that it was Judge Baculi who disrespected him.[10] We quote from his Answer:
23. I only told Judge Rene Baculi I will file Gross ignorance of the Law against him once inside the court room when he was lambasting me[.] It was JUDGE BACULI WHO DISRESPECTED ME. He did not like that I just submit the Motion for Reconsideration without oral argument because he wanted to have an occasion to just HUMILIATE ME and to make appear to the public that I am A NEGLIGENT LAWYER, when he said YOU JUSTIFY YOUR NEGLIGENCE BEFORE THIS COURT making it an impression to the litigants and the public that as if I am a NEGLIGENT, INCOMPETENT, MUMBLING, and IRRESPONSIBLE LAWYER. These words of Judge Rene Baculi made me react[.] xxxx 28. Since I manifested that I was not going to orally argue the Motion, Judge Rene Baculi could have just made an order that the Motion for Reconsideration is submitted for resolution, but what he did was that he forced me to argue so that he will have the room to humiliate me as he used to do not only to me but almost of the lawyers here (sic).

24.

25.

Atty. Battung asked that the case against him be dismissed. The IBP conducted its investigation of the matter through Commissioner Jose de la Rama, Jr. In his Commissioners Report,[11] Commissioner De la Rama stated that during the mandatory conference on January 16, 2009, both parties merely reiterated what they alleged in their submitted pleadings. Both parties agreed that the original copy of the July 24, 2008 tape of the incident at the courtroom would be submitted for the Commissioners review. Judge Baculi submitted the tape and the transcript of stenographic notes on January 23, 2009.

Commissioner De la Rama narrated his findings, as follows:[12]


At the first part of the hearing as reflected in the TSN, it was observed that the respondent was calm. He politely argued his case but the voice of the complainant appears to be in high pitch. During the mandatory conference, it was also observed that indeed, the complainant maintains a high pitch whenever he speaks. In fact, in the TSN, where there was already an argument, the complainant stated the following: Court: Do not shout. Atty. Battung: Because the court is shouting. Court: This court has been constantly under this kind of voice Atty. Battung, we are very sorry if you do not want to appear before my court, then you better attend to your cases and do not appear before my court if you do not want to be corrected! (TSN, July 24, 2008, page 3) (NOTE: The underlined words we are very sorry [ were] actually uttered by Atty. Battung while the judge was saying the quoted portion of the TSN) That it was during the time when the complainant asked the following questions when the undersigned noticed that Atty. Battung shouted at the presiding judge. Court: Did you proceed under the Revised Rules on Summary Procedure? * Atty. Battung: It is not our fault Your Honor to proceed because we were asked to present our evidence ex parte. Your Honor, so, if should we were ordered (sic) by the court to follow the rules on summary procedure. (TSN page 3, July 24, 2008) It was observed that the judge uttered the following: Court: Do not shout. Atty. Battung: Because the court is shouting. (Page 3, TSN July 24, 2008) Note: * it was at this point when the respondent shouted at the complainant.

Thereafter, it was observed that both were already shouting at each other. Respondent claims that he was provoked by the presiding judge that is why he shouted back at him. But after hearing the tape, the undersigned in convinced that it was Atty. Battung who shouted first at the complainant. Presumably, there were other lawyers and litigants present waiting for their cases to be called. They must have observed the incident. In fact, in the joint-affidavit submitted by Elenita Pacquing et al., they stood as one in saying that it was really Atty. Battung who shouted at the judge that is why the latter cautioned him not to shout. The last part of the incident as contained in page 4 of the TSN reads as follows: Court: You are now ordered to pay a fine of P100.00. Atty. Battung: We will file the necessary action against this court for gross ignorance of the law. Court: Yes, proceed. (NOTE: Atty. Battung went out the courtroom) Court: Next case. Interpreter: Civil Case No. 2746. (Note: Atty. Battung entered again the courtroom) Atty. Battung: But what we do not like (not finished) Court: The next time Atty. Battung: We would like to clear Court: Sheriff, throw out the counsel, put that everything in record. If you want to see me, see me after the court. Next case.

Civil Case No. 2746 for Partition and Damages, Roberto Cabalza vs. Teresita Narag, et al. (nothing follows)

Commissioner De la Rama found that the respondent failed to observe Canon 11 of the Code of Professional Responsibility that requires a lawyer to observe and maintain respect due the courts and judicial officers. The respondent also violated Rule 11.03 of Canon 11 that provides that a lawyer shall abstain from scandalous, offensive or menacing language or behavior before the courts. The respondents argument that Judge Baculi provoked him to shout should not be given due consideration since the respondent should not have shouted at the presiding judge; by doing so, he created the impression that disrespect of a judge could be tolerated. What the respondent should have done was to file an action before the Office of the Court Administrator if he believed that Judge Baculi did not act according to the norms of judicial conduct. With respect to the charge of violation of Canon 12 of the Code of Professional Responsibility, Commissioner De la Rama found that the evidence submitted is insufficient to support a ruling that the respondent had misused the judicial processes to frustrate the ends of justice. Commissioner De la Rama recommended that the respondent be suspended from the practice of law for six (6) months. On October 9, 2010, the IBP Board of Governors passed a Resolution adopting and approving the Report and Recommendation of the Investigating Commissioner, with the modification that the respondent be reprimanded. The Courts Ruling We agree with the IBPs finding that the respondent violated Rule 11.03, Canon 11 of the Code of Professional Responsibility. Atty. Battung disrespected Judge Baculi by shouting at him inside the courtroom during court proceedings in

the presence of litigants and their counsels, and court personnel. The respondent even came back to harass Judge Baculi. This behavior, in front of many witnesses, cannot be allowed. We note that the respondent continued to threaten Judge Baculi and acted in a manner that clearly showed disrespect for his position even after the latter had cited him for contempt. In fact, after initially leaving the court, the respondent returned to the courtroom and disrupted the ongoing proceedings. These actions were not only against the person, the position and the stature of Judge Baculi, but against the court as well whose proceedings were openly and flagrantly disrupted, and brought to disrepute by the respondent. Litigants and counsels, particularly the latter because of their position and avowed duty to the courts, cannot be allowed to publicly ridicule, demean and disrespect a judge, and the court that he represents. The Code of Professional Responsibility provides:
Canon 11 - A lawyer shall observe and maintain the respect due the courts and to judicial officers and should insist on similar conduct by others. Rule 11.03 - A lawyer shall abstain from scandalous, offensive or menacing language or behavior before the Courts.

We ruled in Roxas v. De Zuzuarregui, Jr.[13] that it is the duty of a lawyer, as an officer of the court, to uphold the dignity and authority of the courts. Respect for the courts guarantees the stability of the judicial institution; without this guarantee, the institution would be resting on very shaky foundations. A lawyer who insults a judge inside a courtroom completely disregards the latters role, stature and position in our justice system. When the respondent publicly berated and brazenly threatened Judge Baculi that he would file a case for gross ignorance of the law against the latter, the respondent effectively acted in a manner tending to erode the public confidence in Judge Baculis competence and in his ability to decide cases. Incompetence is a matter that, even if true, must be handled with sensitivity in the manner provided under the Rules of Court; an objecting or complaining lawyer cannot act in a manner that puts the courts in a bad light and bring the justice system into disrepute.

The IBP Board of Governors recommended that Atty. Battung be reprimanded, while the Investigating Commissioner recommended a penalty of six (6) months suspension. We believe that these recommended penalties are too light for the offense. In Re: Suspension of Atty. Rogelio Z. Bagabuyo, Former Senior State Prosecutor,[14] we suspended Atty. Bagabuyo for one year for violating Rule 11.05, Canon 11, and Rule 13.02, Canon 13 of the Code of Professional Responsibility, and for violating the Lawyers Oath for airing his grievances against a judge in newspapers and radio programs. In this case, Atty. Battungs violations are no less serious as they were committed in the courtroom in the course of judicial proceedings where the respondent was acting as an officer of the court, and before the litigating public. His actions were plainly disrespectful to Judge Baculi and to the court, to the point of being scandalous and offensive to the integrity of the judicial system itself. WHEREFORE, in view of the foregoing, Atty. Melchor A. Battung is found GUILTY of violating Rule 11.03, Canon 11 of the Code of Professional Responsibility, for which he is SUSPENDED from the practice of law for one (1) year effective upon the finality of this Decision. He is STERNLY WARNED that a repetition of a similar offense shall be dealt with more severely. Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to the respondents personal record as an attorney; the Integrated Bar of the Philippines; the Department of Justice; and all courts in the country, for their information and guidance. SO ORDERED.

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