DIOSDADO GUZMAN, ULYSSES URBIZTONDO, and

ARIEL RAMACULA, petitioners,

vs.
NATIONAL UNIVERSITY and DOMINGO L. JHOCSON in
his capacity as President of National
University,respondents.
Petitioners Diosdado Guzman, Ulysses Urbiztondo and Ariel
Ramacula, students of respondent National University, have
come to this Court to seek relief from what they describe as
their school's "continued and persistent refusal to allow them
to enrol." In their petition "for extraordinary legal and
equitable remedies with prayer for preliminary mandatory
injunction" dated August 7, 1984, they allege:
1) that respondent University's avowed reason
for its refusal to re-enroll them in their
respective courses is "the latter's participation
in peaceful mass actions within the premises of
the University.
2) that this "attitude of the (University) is simply
a continuation of its cavalier if not hostile
attitude to the student's exercise of their basic
constitutional and human rights already
recorded in Rockie C. San Juan vs. National
University, S.C. G.R. No. 65443 (1983) and its
utter contempt for the principle of due process
of law to the prejudice of petitioners;" and
3) that "in effect petitioners are subjected to the
extreme penalty of expulsion without cause or if
there be any, without being informed of such
cause and without being afforded the
opportunity to defend themselves. Berina v.
Philippine Maritime Institute (117 SCRA 581
[1983]).

In the comment filed on September 24, 1986 for respondent

University and its President pursuant to this Court's
requirement therefor 1 , respondents make the claim:
1) that "petitioners' failure to enroll for the first semester of
the school year 1984-1985 is due to their own fault and not
because of their allegedexercise of their constitutional and
human rights;"
2) that petitioner Urbiztondo, sought to re-enroll only on July
5, 1986 "when the enrollment period was already closed;"
3) that as regards petitioner Guzman, his "academic
showing" was "poor", "due to his activities in leading
boycotts of classes"; that when his father was notified of this
development sometime in August, 1982, the latter had
demanded that his son "reform or else we will recall him to
the province"; that Guzman was one of the petitioners in G.R.
No. 65443 entitled "Rockie San Juan, et al. vs. National
University, et al.," at the hearing of which on November 23,
1983 this Court had admonished "the students involved (to)
take advantage and make the most of the opportunity given
to them to study;" that Guzman "however continued to lead
or actively participate in activities within the university
premises, conducted without prior permit from school
authorities, that disturbed or disrupted classes therein;" that
moreover, Guzman "is facing criminal charges for malicious
mischief before the Metropolitan Trial Court of Manila (Crim.
Case No. 066446) in connection with the destruction of
properties of respondent University on September 12, 1983 ",
and "is also one of the defendants in Civil Case No. 8320483
of the Regional Trial Court of Manila entitled 'National
University, Inc. vs. Rockie San Juan et al.' for damages arising
from destruction of university properties
4) that as regards petitioner Ramacula, like Guzman "he
continued to lead or actively participate, contrary to the spirit

of the Resolution dated November 23, 1983 of this ... Court

(in G.R. No. 65443 in which he was also one of the
petitioners) and to university rules and regulations, within
university premises but without permit from university
officials in activities that disturbed or disrupted classes;" and
5) that petitioners have "failures in their records, (and) are
not of good scholastic standing. "
Respondents close their comment with the following
assertions, to wit:
1) By their actuations, petitioners must be deemed to have
forfeited their privilege, if any, to seek enrollment in
respondent university. The rights of respondent university, as
an institution of higher learning, must also be respected. It is
also beyond comprehension why petitioners, who continually
despise and villify respondent university and its officials and
faculty members, should persist in seeking enrollment in an
institution that they hate.
2) Under the circumstances, and without regard to legal
technicalities, it is not to the best interest of all concerned
that petitioners be allowed to enroll in respondent university.
3) In any event, petitioners' enrollment being on the
semestral basis, respondents cannot be compelled to enroll
them after the end of the semester.
On October 2, 1984 this Court issued a resolution reading as
follows:
... Acting on the Comment submitted by
respondent, the Court Resolved to NOTE the
same and to require a REPLY to such Comment.
The Court further Resolved to ISSUE a
MANDATORY INJUNCTION, enjoining respondent

to allow the enrolment of petitioners for the

coming semester without prejudice to any
disciplinary proceeding to which any or all of
them may be subjected with their right to lawful
defense recognized and respected. As regards
petitioner Diosdado Guzman, even if it be a fact
that there is a pending criminal charge against
him for malicious mischief, the Court
nonetheless is of the opinion that, as abovenoted, without prejudice to the continuation of
any disciplinary proceeding against him, that he
be allowed to resume his studies in the
meanwhile. As shown in Annex 2 of the petition
itself, Mr. Juan P. Guzman, father of said
petitioner, is extending full cooperation with
petitioners to assure that whatever protest or
grievance petitioner Guzman may have would
be ventilated in a lawful and peaceful manner.
Petitioners' REPLY inter alia
1) denied that Urbiztondo attempted to enroll only on July 5,
1984 (when enrollment was already closed), it being alleged
that "while he did try to enroll that day, he also attempted to
do so several times before that date, all to no avail, because
respondents ... persistently refused to allow him to do so"
respondents' ostensible reason being that Urbiztondo (had)
participated in mass actions ... within the school premises,"
although there were no existing disciplinary charge against
petitioner Urbiztondo" at the time;
2) asserted that "neither the text nor the context of the
resolution 2 justifies the conclusion that "petitioners' right to
exercise their constitutional freedoms" had thereby been
restricted or limited; and

3) alleged that "the holding of activities (mass action) in the

school premises without the permission of the school ... can
be explained by the fact that the respondents persistently
refused to issue such permit repeatedly sought by the
students. "
On November 23, 1984, this Court promulgated another
resolution, this time reading as follows:
... The Court, after considering the pleadings
filed and deliberating on the issues raised in the
petition for extraordinary legal and equitable
remedies with prayer for preliminary mandatory
injunction as well as the respondents' comment
on the petition and the reply of counsel for
petitioners to the respondents' comment,
Resolved to (a) give DUE COURSE to the
petition; (b) consider the respondents' comment
as ANSWER to the petition; and (c) require the
parties to file their respective MEMORANDA
within twenty (20) days from notice. ... .
Immediately apparent from a reading of respondents'
comment and memorandum is the fact that they had never
conducted proceedings of any sort to determine whether or
not petitioners-students had indeed led or participated "in
activities within the university premises, conducted without
prior permit from school authorities, that disturbed or
disrupted classes therein" 3 or perpetrated acts of
"vandalism, coercion and intimidation, slander, noise barrage
and other acts showing disdain for and defiance of University
authority." 4 Parenthetically, the pendency of a civil case for
damages and a criminal case for malicious mischief against
petitioner Guzman, cannot, without more, furnish sufficient
warrant for his expulsion or debarment from re-enrollment.
Also apparent is the omission of respondents to cite this
Court to any duly published rule of theirs by which students

may be expelled or refused re-enrollment for poor scholastic

standing.
Under the Education Act of 1982, 5 the petitioners, as
students, have the right among others "to freely choose their
field of study subject to existing curricula and to continue
their course therein up to graduation, except in case of
academic deficiency, or violation of disciplinary
regulations." 6Petitioners were being denied this right, or
being disciplined, without due process, in violation of the
admonition in the Manual of Regulations for Private
Schools 7 that "(n)o penalty shall be imposed upon any
student except for cause as defined in ... (the) Manual and/or
in the school rules and regulations as duly promulgated and
only after due investigation shall have been
conducted." 8 This Court is therefore constrained, as in Berina
v. Philippine Maritime Institute, 9 to declare illegal this act of
respondents of imposing sanctions on students without due
investigation.
Educational institutions of course have the power to "adopt
and enforce such rules as may be deemed expedient for ...
(its) government, ... (this being)" incident to the very object
of incorporation, and indispensable to the successful
management of the college." 10 The rules may include those
governing student discipline. Indeed, the maintenance of
"good school discipline" is a duty specifically enjoined on
"every private school" by the Manual of Regulations for
Private Schools; 11 and in this connection, the Manual further
provides that... The school rules governing discipline and the
corresponding sanctions therefor must be
clearly specified and defined in writing and
made known to the students and/or their
parents or guardians. Schools shall have the
authority and prerogative to promulgate such

rules and regulations as they may deem

necessary from time to time effective as of the
date of their promulgation unless otherwise
specified. 12
But, to repeat, the imposition of disciplinary sanctions
requires observance of procedural due process. And it bears
stressing that due process in disciplinary cases involving
students does not entail proceedings and hearings similar to
those prescribed for actions and proceedings in courts of
justice. The proceedings in student discipline cases may be
summary; and cross-examination is not, 'contrary to
petitioners' view, an essential part thereof. There are withal
minimum standards which must be met to satisfy the
demands of procedural due process; and these are, that (1)
the students must be informed in writing of the nature and
cause of any accusation against them; (2) they shag have
the right to answer the charges against them, with the
assistance of counsel, if desired; (3) they shall be informed of
the evidence against them; (4) they shall have the right to
adduce evidence in their own behalf; and (5) the evidence
must be duly considered by the investigating committee or
official designated by the school authorities to hear and
decide the case.
WHEREFORE, the petition is granted and the respondents are
directed to allow the petitioners to re-enroll or otherwise
continue with their respective courses, without prejudice to
any disciplinary proceedings to which any or all of them may
be subjected in accordance with the standards herein set
forth.
SO ORDERED.

BABELO BERINA, MARILOU ELAGDON, ERNESTO

ROBERTO and JESUS SORIAO, petitioners,
vs.
PHILIPPINE MARITIME INSTITUTE, TOMAS CLOMA and
JAIME CLOMA, respondents.
ABAD SANTOS, J.:
Babelo Beria, Marilou Elagdon, Ernesto Roberto and Jesus
Soriao are students of the Philippine Maritime Institute, PMI
for short. In their petition which is styled FOR
EXTRAORDINARY AND EQUITABLE REMEDY WITH
PRELIMINARY INJUNCTION, they claim that PMI, five weeks
after school had started, posted sometime in August, 1981, a
notice that there would be a 15% increase in tuition fees
retroactive to the start of the current semester; that the
students met and took positive steps in respect of the
problem; that their representatives held dialogues with the
school administration; "that, in reaction to these legitimate
student activities and without compliance with due process
respondents commencing on October 15, 1981 issued
expulsion orders against Jesus Soriao, Ernesto Roberto, and
Babelo Berina and an indefinite suspension against Marilou
Elagdon;" that the penalties were imposed without due
process and had the effect of negating the petitioners' right
to free speech, peaceful assembly and petition for redress of
grievances. The petitioners pray that the expulsion and
suspension orders be annulled and that while the case is
pending resolution they be restored to their status as
students of the PMI,
On November 10, 1981, We required PMI and its officers who
were included as respondents to comment on the petition.
We also issued a temporary restraining order commanding
the respondents to refrain from carrying out the expulsion
and suspension orders.

PMI filed its comment as required where it said that the 15%
increase in tuition fee had been authorized by the Ministry of
Education and Culture; and denied that the action taken
against the petitioners was in response to their activities in
connection with the tuition fee increase. The comment also
advances the arguments that this Court lacks jurisdiction to
entertain the petition because it involves "matters that are
well within the competence and jurisdiction of the lower
courts to pass upon, as even more serious matters and cases
of greater consequences are normally brought before them at
the first instance prior to any appeal to the Supreme Court,
and there are no valid and impelling excuses to warrant a
direct recourse to the Highest Tribunal in the judicial
hierarchy."
We are not called upon to determine the validity or propriety
of the tuition fee increase of 15% five weeks after the classes
for the current semester had started. The issue in this case is
limited to the question as to whether or not the petitioners
were denied by the respondents their constitutional rights to
due process, free speech, peaceful assembly and petition to
redress of grievances. Treating the petition as having been
filed under Rule 65 of the Rules of Court as the petitioners
assert, We have no doubt that there is no absence of
jurisdiction.
Typical of the expulsion orders is that which was issued to
petitioner Jesus Soriao on October 15, 1981, which has been
marked as Annex A of the petition and which reads as
follows:
For conduct unbecoming as a Cadet, you are
hereby dropped from the roll of students of the
School.

That your actuations and behavior as reported

and seen leave no other recourse hence this
action.
That on September 9th, you with another
student was (sic) caught inside the STC Building,
distributing leaflets, enticing and coercing other
students to join the slated demonstration.
In the subsequent days, you were caught again
by the undersigned campaigning and
distributing leaflets, enjoining other students to
join the boycott.
That all these actions are contrary to MEC
regulations and directives that appropriate
action had to be taken.
For your guidance.
The suspension order which was issued for Marilou Elagdon
on October 20, 1981, which has been marked Annex C of the
petition reads:
Please be informed that C/miss ELAGDON,
Marilou is hereby suspended from her classes
for conduct unbecoming of a Cadetee as against
the rules and regulation of the School.
Let the above-named student see the
undersigned and in the meantime she remained
suspended until clearance is given by this office.
For your guidance.
The comment does not positively assert that in imposing the
expulsion and suspension orders there was observance of

due process which simply means that the petitioners should

have been given an opportunity to defend themselves. It was
only after the petitioners had said in their reply that the
respondents failed to traverse the denial of due process that
the latter invoked the legal presumption "that the ordinary
course of business has been followed" (Sec. 5(q), Rule 131,
Rules of Court)."
It is obvious from the expulsion and suspension orders that
the petitioners were denied due process,res ipsa loquitur. For
the orders are bereft of the sides of the petitioners. Hence
the legal presumption of regularity cannot be availed in the
instant case.
WHEREFORE, the petition is granted; the expulsion and
suspension orders are hereby set aside but without prejudice
to the power of the respondents to formally charge the
petitioners for violation(s) of reasonable school rules and
regulations and after due notice to hear and decide the
charge. No special pronouncement as to costs.
SO ORDERED.
DE LA SALLE UNIVERSITY, INC., EMMANUEL SALES,
RONALD HOLMES, JUDE DELA TORRE, AMPARO RIO,
CARMELITA QUEBENGCO, AGNES YUHICO and JAMES
YAP, petitioners,
vs.
THE COURT OF APPEALS, HON. WILFREDO D. REYES, in
his capacity as Presiding Judge of Branch 36, Regional
Trial Court of Manila, THE COMMISSION ON HIGHER
EDUCATION, THE DEPARTMENT OF EDUCATION
CULTURE AND SPORTS, ALVIN AGUILAR, JAMES PAUL
BUNGUBUNG, RICHARD REVERENTE and ROBERTO
VALDES, JR., respondents.

DECISION
REYES, R.T., J.:
NAGTATAGIS sa kasong ito ang karapatang mag-aral
ng apat na estudyante na nasangkot sa away ng
dalawang fraternity at ang karapatang akademiko ng
isang pamantasan.
PRIVATE respondents Alvin Aguilar, James Paul Bungubung,
Richard Reverente and Roberto Valdes, Jr. are members of
Tau Gamma Phi Fraternity who were expelled by the De La
Salle University (DLSU) and College of Saint Benilde
(CSB)1 Joint Discipline Board because of their involvement in
an offensive action causing injuries to petitioner James Yap
and three other student members of Domino Lux Fraternity.
This is the backdrop of the controversy before Us pitting
private respondents' right to education vis-a-vis the
University's right to academic freedom.
ASSAILED in this Petition for Certiorari, Prohibition and
Mandamus under Rule 65 of the Rules of Court are the
following: (1) Resolution of the Court of Appeals (CA) dated
July 30, 1996 dismissing DLSU's petition for certiorariagainst
respondent Judge and private respondents Aguilar,
Bungubung, Reverente, and Valdes, Jr.; 2 (2) Resolution of the
CA dated October 15, 1996 denying the motion for
reconsideration;3 (3) Order dated January 7, 1997 of the
Regional Trial Court (RTC), Branch 36 Manila granting private
respondent Aguilar's motion to reiterate writ of preliminary
injunction;4 and (4) Resolution No. 181-96 dated May 14,
1996 of the Commission on Higher Education (CHED)
exonerating private respondent Aguilar and lowering the
penalties for the other private respondents from expulsion to
exclusion.5
Factual Antecedents

Gleaned from the May 3, 1995 Decision of the DLSU-CSB Joint

Discipline Board, two violent incidents on March 29, 1995
involving private respondents occurred:
x x x From the testimonies of the complaining
witnesses, it appears that one week prior to March 29,
1995, Mr. James Yap was eating his dinner alone in
Manang's Restaurant near La Salle, when he overheard
two men bad-mouthing and apparently angry at
Domino Lux. He ignored the comments of the two.
When he arrived at his boarding house, he mentioned
the remarks to his two other brods while watching
television. These two brods had earlier finished eating
their dinner at Manang's. Then, the three, together
with four other persons went back to Manang's and
confronted the two who were still in the restaurant. By
admission of respondent Bungubung in his testimony,
one of the two was a member of the Tau Gamma Phi
Fraternity. There was no rumble or physical violence
then.
After this incident, a meeting was conducted between
the two heads of the fraternity through the
intercession of the Student Council. The Tau Gamma
Phi Fraternity was asking for an apology. "Kailanganng
apology" in the words of respondent Aguilar. But no
apology was made.
Then, 5 members of the Tau Gamma Phi Fraternity
went to the tambayan of the Domino Lux Fraternity in
the campus. Among them were respondents
Bungubung, Reverente and Papio. They were looking
for a person whose description matched James Yap.
According to them, this person supposedly "nambastos
ng brod." As they could not find Mr. Yap, one of them
remarked "Paano ba iyan. Pasensiya na lang."

Came March 29, 1995 and the following events.

Ten minutes before his next class at 6:00 p.m., Mr.
James Yap went out of the campus using the
Engineering Gate to buy candies across Taft Avenue.
As he was about to re-cross Taft Avenue, he heard
heavy footsteps at his back. Eight to ten guys were
running towards him. He panicked. He did not know
what to do. Then, respondent Bungubung punched him
in the head with something heavy in his hands
"parang knuckles." Respondents Reverente and Lee
were behind Yap, punching him. Respondents
Bungubung and Valdes who were in front of him, were
also punching him. As he was lying on the street,
respondent Aguilar kicked him. People shouted; guards
arrived; and the group of attackers left.
Mr. Yap could not recognize the other members of the
group who attacked him. With respect to respondent
Papio, Mr. Yap said "hindi ko nakita ang mukha niya,
hindi ko nakita sumuntok siya." What Mr. Yap saw was
a long haired guy also running with the group.
Two guards escorted Mr. Yap inside the campus. At this
point, Mr. Dennis Pascual was at the Engineering Gate.
Mr. Pascual accompanied Yap to the university clinic;
reported the incident to the Discipline Office; and
informed his fraternity brods at their tambayan.
According to Mr. Pascual, their head of the Domino Lux
Fraternity said: "Walang gagalaw. Uwian na lang."
Mr. Ericson Cano, who was supposed to hitch a ride
with Dennis Pascual, saw him under the clock in Miguel
Building. However, they did not proceed directly for
home. With a certain Michael Perez, they went towards
the direction of Dagonoy Street because Mr. Pascual

was supposed to pick up a book for his friend from

another friend who lives somewhere in the area.
As they were along Dagonoy Street, and before they
could pass the Kolehiyo ng Malate Restaurant, Mr.
Cano first saw several guys inside the restaurant. He
said not to mind them and just keep on walking.
However, the group got out of the restaurant, among
them respondents Reverente, Lee and Valdes. Mr. Cano
told Mr. Lee: "Ayaw namin ng gulo." But, respondent
Lee hit Mr. Cano without provocation. Respondent
Reverente kicked Mr. Pascual and respondent Lee also
hit Mr. Pascual. Mr. Cano and Mr. Perez managed to run
from the mauling and they were chased by respondent
Lee and two others.
Mr. Pascual was left behind. After respondent
Reverente first kicked him, Mr. Pascual was gangedupon by the rest. He was able to run, but the group
was able to catch up with him. His shirt was torn and
he was hit at the back of his head with a lead pipe.
Respondent Lee who was chasing Cano and Perez,
then returned to Mr. Pascual.
Mr. Pascual identified respondents Reverente and Lee,
as among those who hit him. Although Mr. Pascual did
not see respondent Valdes hit him, he identified
respondent Valdez (sic) as also one of the members of
the group.
In fact, Mr. Cano saw respondent Valdes near Mr.
Pascual. He was almost near the corner of Leon Guinto
and Estrada; while respondent Pascual who managed
to run was stopped at the end of Dagonoy along Leon
Guinto. Respondent Valdes shouted: "Mga putang-ina
niyo." Respondent Reverente hit Mr. Pascual for the
last time. Apparently being satisfied with their

handiwork, the group left. The victims, Cano, Perez and

Pascual proceeded to a friend's house and waited for
almost two hours, or at around 8:00 in the evening
before they returned to the campus to have their
wounds treated. Apparently, there were three cars
roaming the vicinity.6
The mauling incidents were a result of a fraternity war. The
victims, namely: petitioner James Yap and Dennis Pascual,
Ericson Cano, and Michael Perez, are members of the
"Domino Lux Fraternity," while the alleged assailants, private
respondents Alvin Aguilar, James Paul Bungubung, Richard
Reverente and Roberto Valdes, Jr. are members of "Tau
Gamma Phi Fraternity," a rival fraternity.
The next day, March 30, 1995, petitioner Yap lodged a
complaint7 with the Discipline Board of DLSU charging private
respondents with "direct assault." Similar complaints 8 were
also filed by Dennis Pascual and Ericson Cano against Alvin
Lee and private respondents Valdes and Reverente. Thus,
cases entitled "De La Salle University and College of St.
Benilde v. Alvin Aguilar (AB-BSM/9152105), James Paul
Bungubung (AB-PSM/9234403), Robert R. Valdes, Jr. (BS-BSAPM/9235086), Alvin Lee (EDD/9462325), Richard Reverente
(AB-MGT/9153837) and Malvin A. Papio (AB-MGT/9251227)"
were docketed as Discipline Case No. 9495-3-25121.
The Director of the DLSU Discipline Office sent separate
notices to private respondents Aguilar, Bungubung and
Valdes, Jr. and Reverente informing them of the complaints
and requiring them to answer. Private respondents filed their
respective answers.9
As it appeared that students from DLSU and CSB 10 were
involved in the mauling incidents, a joint DLSU-CSB Discipline
Board11 was formed to investigate the incidents. Thus,
petitioner Board Chairman Emmanuel Sales sent notices of

hearing12 to private respondents on April 12, 1995. Said

notices uniformly stated as follows:
Please be informed that a joint and expanded
Discipline Board had been constituted to hear and
deliberate the charge against you for violation of CHED
Order No. 4 arising from the written complaints of
James Yap, Dennis C. Pascual, and Ericson Y. Cano.
You are directed to appear at the hearing of the Board
scheduled on April 19, 1995 at 9:00 a.m. at the Bro.
Connon Hall for you and your witnesses to give
testimony and present evidence in your behalf. You
may be assisted by a lawyer when you give your
testimony or those of your witnesses.
On or before April 18, 1995, you are further directed to
provide the Board, through the Discipline Office, with a
list of your witnesses as well as the sworn statement of
their proposed testimony.

of the time, respondent Bungubung goes home alone

sans driver. But on this particular date, respondent
Bungubung said that his dad asked his permission to
use the car and thus, his dad instructed this driver
Carillo to pick-up his son. Mr. Carillo is not a family
driver, but works from 8:00 a.m. to 5:00 p.m. for the
Philippine Ports Authority where the elder Bungubung
is also employed.
Thus, attempting to corroborate the alibi of respondent
Bungubung, Mr. Carillo said that he arrived at La Salle
at 4:56 p.m.; picked-up respondent at 5:02 p.m.; took
the Roxas Blvd. route towards respondent's house in
BF Paraaque (on a Wednesday in Baclaran); and
arrived at the house at 6:15 p.m. Respondent
Bungubung was dropped-off in his house, and taking
the same route back, Mr. Carillo arrived at the South
Harbor at 6:55 p.m. the Philippine Ports Authority is
located at the South Harbor.14
xxxx

Your failure to appear at the scheduled hearing or your

failure to submit the list of witnesses and the sworn
statement of their proposed testimony will be
considered a waiver on your part to present evidence
and as an admission of the principal act complained of.
For your strict compliance.13
During the proceedings before the Board on April 19 and 28,
1995, private respondents interposed the common defense
of alibi, summarized by the DLSU-CSB Joint Discipline Board
as follows:
First, in the case of respondent Bungubung, March 29,
1995 was one of the few instances when he was
picked-up by a driver, a certain Romeo S. Carillo. Most

Secondly, respondent Valdes said that he was with his

friends at McDonald's Taft just before 6:00 p.m. of
March 29, 1995. He said that he left McDonald at 5:50
p.m. together to get some medicine at the university
clinic for his throat irritation. He said that he was at the
clinic at 5:52 p.m. and went back to McDonald, all
within a span of 3 or even 4 minutes.
Two witnesses, a certain Sharon Sia and the girlfriend
of respondent Valdes, a certain Jorgette Aquino,
attempted to corroborate Valdez' alibi.15
xxxx

Third, respondent Reverente told that (sic) the Board

that he was at his home at 5:00 p.m. of March 29,
1995. He said that he was given the responsibility to
be the paymaster of the construction workers who
were doing some works in the apartment of his
parents. Although he had classes in the evening, the
workers according to him would wait for him
sometimes up to 9:00 p.m. when he arrives from his
classes. The workers get paid everyday.
Respondent Reverente submitted an affidavit,
unsigned by the workers listed there, supposedly
attesting to the fact that he paid the workers at the
date and time in question.16
xxxx
Fourth, respondent Aguilar "solemnly sw[ore] that [he]
left DLSU at 5:00 p.m. for Camp Crame for a meeting
with some of the officers that we were preparing." 17
On May 3, 1995, the DLSU-CSB Joint Discipline Board issued a
Resolution18 finding private respondents guilty. They were
meted the supreme penalty of automatic
expulsion,19 pursuant to CHED Order No. 4.20 The dispositive
part of the resolution reads:
WHEREFORE, considering all the foregoing, the Board
finds respondents ALVIN AGUILAR (AB-BSM/9152105),
JAMES PAUL BUNGUBUNG (AB-PSM/9234403), ALVIN
LEE (EDD/94623250) and RICHARD V. REVERENTE (ABMGT/9153837) guilty of having violated CHED Order
No. 4 and thereby orders their automatic expulsion.
In the case of respondent MALVIN A. PAPIO (ABMGT/9251227), the Board acquits him of the charge.

SO ORDERED.21
Private respondents separately moved for
reconsideration22 before the Office of the Senior VicePresident for Internal Operations of DLSU. The motions were
all denied in a Letter-Resolution23 dated June 1, 1995.
On June 5, 1995, private respondent Aguilar filed with the
RTC, Manila, against petitioners a petition for certiorariand
injunction under Rule 65 of the Rules of Court with prayer for
temporary restraining order (TRO) and/or writ of preliminary
injunction. It was docketed as Civil Case No. 95-74122 and
assigned to respondent Judge of Branch 36. The petition
essentially sought to annul the May 3, 1995 Resolution of the
DLSU-CSB Joint Discipline Board and the June 1, 1995 LetterResolution of the Office of the Senior Vice-President for
Internal Affairs.
The following day, June 6, 1995, respondent Judge issued a
TRO24 directing DLSU, its subordinates, agents,
representatives and/or other persons acting for and in its
behalf to refrain and desist from implementing Resolution
dated May 3, 1995 and Letter-Resolution dated June 1, 1995
and to immediately desist from barring the enrollment of
Aguilar for the second term of school year (SY) 1995.
Subsequently, private respondent Aguilar filed an ex
parte motion to amend his petition to correct an allegation in
paragraph 3.2125 of his original petition. Respondent Judge
amended the TRO26 to conform to the correction made in the
amended petition.27
On June 7, 1995, the CHED directed DLSU to furnish it with
copies of the case records of Discipline Case No. 9495-325121,28 in view of the authority granted to it under Section
77(c) of the Manual of Regulations for Private Schools
(MRPS).

On the other hand, private respondents Bungubung and

Reverente, and later, Valdes, filed petitions-inintervention29 in Civil Case No. 95-74122. Respondent Judge
also issued corresponding temporary restraining orders to
compel petitioner DLSU to admit said private respondents.
On June 19, 1995, petitioner Sales filed a motion to
dismiss30 in behalf of all petitioners, except James Yap. On
June 20, 1995, petitioners filed a supplemental motion to
dismiss31 the petitions-in-intervention.
On September 20, 1995, respondent Judge issued an
Order32 denying petitioners' (respondents there) motion to
dismiss and its supplement, and granted private
respondents' (petitioners there) prayer for a writ of
preliminary injunction. The pertinent part of the Order reads:
For this purpose, respondent, its agents,
representatives or any and all other persons acting for
and in its behalf is/are restrained and enjoined from
1. Implementing and enforcing the Resolution
dated May 3, 1995 ordering the automatic
expulsion of petitioner and the petitioners-inintervention from the De La Salle University and
the letter-resolution dated June 1, 1995,
affirming the Resolution dated May 3, 1995; and
2. Barring the enrolment of petitioner and
petitioners-in-intervention in the courses offered
at respondent De La Salle University and to
immediately allow them to enroll and complete
their respective courses/degrees until their
graduation thereat in accordance with the
standards set by the latter.

WHEREFORE, the ancillary remedy prayed for is

granted. Respondent, its agents, representatives, or
any and all persons acting for and its behalf are hereby
restrained and enjoyed from:
1. Implementing and enforcing the Resolution
dated May 3, 1995 ordering the automatic
expulsion of petitioner and petitioners-inintervention and the Letter-Resolution dated
June 1, 1995; and
2. Barring the enrollment of petitioner and
petitioners-in-intervention in the courses offered
at respondent (De La Salle University) and to
forthwith allow all said petitioner and
petitioners-in-intervention to enroll and
complete their respective courses/degrees until
their graduation thereat.
The Writ of Preliminary Injunction shall take effect
upon petitioner and petitioners-in-intervention posting
an injunctive bond in the amount of P15,000.00
executed in favor of respondent to the effect that
petitioner and petitioners-in-intervention will pay to
respondent all damages that the latter may suffer by
reason of the injunction if the Court will finally decide
that petitioner and petitioners-in-intervention are not
entitled thereto.
The motion to dismiss and the supplement thereto is
denied for lack of merit. Respondents are directed to
file their Answer to the Petition not later than fifteen
(15) days from receipt thereof.
SO ORDERED.33

Despite the said order, private respondent Aguilar was

refused enrollment by petitioner DLSU when he attempted to
enroll on September 22, 1995 for the second term of SY
1995-1996. Thus, on September 25, 1995, Aguilar filed with
respondent Judge an urgent motion to cite petitioners
(respondents there) in contempt of court. 34Aguilar also
prayed that petitioners be compelled to enroll him at DLSU in
accordance with respondent Judge's Order dated September
20, 1995. On September 25, 1995, respondent Judge
issued35 a writ of preliminary injunction, the relevant portion
of which reads:
IT IS HEREBY ORDERED by the undersigned of the
REGIONAL TRIAL COURT OF MANILA that until further
orders, you the said DE LA SALLE University as well as
your subordinates, agents, representatives, employees
and any other person assisting or acting for or on your
behalf, to immediately desist from implementing the
Resolution dated May 3, 1995 ordering the automatic
expulsion of petitioner and the intervenors in DLSU,
and the letter-resolution dated June 1, 1995 affirming
the said Resolution of May 3, 1995 and to immediately
desist from barring the enrolment of petitioner and
intervenors in the courses offered at DLSU and to allow
them to enroll and complete their degree courses until
their graduation from said school.36
On October 16, 1995, petitioner DLSU filed with the CA a
petition for certiorari37 (CA-G.R. SP No. 38719) with prayer for
a TRO and/or writ of preliminary injunction to enjoin the
enforcement of respondent Judge's September 20, 1995
Order and writ of preliminary injunction dated September 25,
1995.
On April 12, 1996, the CA granted petitioners' prayer for
preliminary injunction.

On May 14, 1996, the CHED issued its questioned

Resolution No. 181-96, summarily disapproving the
penalty of expulsion for all private respondents. As for
Aguilar, he was to be reinstated, while other private
respondents were to be excluded.38 The Resolution
states:
RESOLUTION 181-96
RESOLVED THAT THE REQUEST OF THE DE LA SALLE
UNIVERSITY (DLSU), TAFT AVENUE, MANILA FOR THE
APPROVAL OF THE PENALTY OF EXPULSION IMPOSED
ON MR. ALVIN AGUILAR, JAMES PAUL BUNGUBUNG,
ROBERT R. VALDES, JR., ALVIN LEE AND RICHARD V.
REVERENTE BE, AS IT IS HEREBY IS, DISAPPROVED.
RESOLVED FURTHER, THAT THE COMMISSION DIRECT
THE DLSU TO IMMEDIATELY EFFECT THE
REINSTATEMENT OF MR. AGUILAR AND THE LOWERING
OF THE PENALTY OF MR. JAMES PAUL BUNGUBUNG, MR.
ROBER R. VALDEZ, JR., (sic) MR. ALVIN LEE AND MR.
RICHARD V. REVERENTE FROM EXPULSION TO
EXCLUSION.39
Despite the directive of CHED, petitioner DLSU again
prevented private respondent Aguilar from enrolling and/or
attending his classes, prompting his lawyer to write several
demand letters40 to petitioner DLSU. In view of the refusal of
petitioner DLSU to enroll private respondent Aguilar, CHED
wrote a letter dated June 26, 1996 addressed to petitioner
Quebengco requesting that private respondent Aguilar be
allowed to continue attending his classes pending the
resolution of its motion for reconsideration of Resolution No.
181-96. However, petitioner Quebengco refused to do so,
prompting CHED to promulgate an Order dated September
23, 1996 which states:

Acting on the above-mentioned request of Mr. Aguilar

through counsel enjoining De La Salle University
(DLSU) to comply with CHED Resolution 181-96 (Re:
Expulsion Case of Alvin Aguilar, et al. v. DLSU)
directing DLSU to reinstate Mr. Aguilar and finding the
urgent request as meritorious, there being no other
plain and speedy remedy available, considering the set
deadline for enrollment this current TRIMESTER, and in
order to prevent further prejudice to his rights as a
student of the institution, DLSU, through the proper
school authorities, is hereby directed to allow Mr. Alvin
Aguilar to provisionally enroll, pending the
Commission's Resolution of the instant Motion for
Reconsideration filed by DLSU.
SO ORDERED.41
Notwithstanding the said directive, petitioner DLSU, through
petitioner Quebengco, still refused to allow private
respondent Aguilar to enroll. Thus, private respondent
Aguilar's counsel wrote another demand letter to petitioner
DLSU.42
Meanwhile, on June 3, 1996, private respondent Aguilar,
using CHED Resolution No. 181-96, filed a motion to
dismiss43 in the CA, arguing that CHED Resolution No. 181-96
rendered the CA case moot and academic.
On July 30, 1996, the CA issued its questioned
resolution granting the motion to dismiss of private
respondent Aguilar, disposing thus:
THE FOREGOING CONSIDERED, dismissal of herein
petition is hereby directed.
SO ORDERED.44

On October 15, 1996, the CA issued its resolution

denying petitioners' motion for reconsideration, as
follows:
It is obvious to Us that CHED Resolution No. 181-96 is
immediately executory in character, the pendency of a
Motion for Reconsideration notwithstanding.
After considering the Opposition and for lack of merit,
the Motion for Reconsideration is hereby denied.
SO ORDERED.45
On October 28, 1996, petitioners requested transfer of case
records to the Department of Education, Culture and Sports
(DECS) from the CHED.46 Petitioners claimed that it is the
DECS, not CHED, which has jurisdiction over expulsion cases,
thus, necessitating the transfer of the case records of
Discipline Case No. 9495-3-25121 to the DECS.
On November 4, 1996, in view of the dismissal of the petition
for certiorari in CA-G.R. SP No. 38719 and the automatic
lifting of the writ of preliminary injunction, private respondent
Aguilar filed an urgent motion to reiterate writ of preliminary
injunction dated September 25, 1995 before respondent RTC
Judge of Manila.47
On January 7, 1997, respondent Judge issued its
questioned order granting private respondent
Aguilar's urgent motion to reiterate preliminary
injunction. The pertinent portion of the order reads:
In light of the foregoing, petitioner Aguilar's urgent
motion to reiterate writ of preliminary injunction is
hereby granted, and respondents' motion to dismiss is
denied.

The writ of preliminary injunction dated September 25,

1995 is declared to be in force and effect.
Let a copy of this Order and the writ be served
personally by the Court's sheriff upon the respondents
at petitioners' expense.

1. Whether it is the DECS or the CHED which has legal

authority to review decisions of institutions of higher
learning that impose disciplinary action on their
students found violating disciplinary rules.
2. Whether or not petitioner DLSU is within its rights in
expelling private respondents.

SO ORDERED.48
Accordingly, private respondent Aguilar was allowed to
conditionally enroll in petitioner DLSU, subject to the
continued effectivity of the writ of preliminary injunction
dated September 25, 1995 and to the outcome of Civil Case
No. 95-74122.
On February 17, 1997, petitioners filed the instant petition.
On June 15, 1998, We issued a TRO49 as prayed for by the
urgent motion for the issuance of a TRO50 dated June 4, 1998
of petitioners, and enjoined respondent Judge from
implementing the writ of preliminary injunction dated
September 25, 1995 issued in Civil Case No. 95-74122,
effective immediately and until further orders from this
Court.
On March 27, 2006, private respondent Aguilar filed his
manifestation51 stating that he has long completed his course
at petitioner DLSU. He finished and passed all his enrolled
subjects for the second trimester of 1997-1998, as indicated
in his transcript of records52 issued by DLSU. However,
despite having completed all the academic requirements for
his course, DLSU has not issued a certificate of
completion/graduation in his favor.
Issues
We are tasked to resolve the following issues:

2.a Were private respondents accorded due

process of law?
2.b Can petitioner DLSU invoke its right to
academic freedom?
2.c Was the guilt of private respondents proven
by substantial evidence?
3. Whether or not the penalty imposed by DLSU on
private respondents is proportionate to their misdeed.
Our Ruling
Prefatorily, there is merit in the observation of
petitioners53 that while CHED Resolution No. 181-96
disapproved the expulsion of other private respondents, it
nonetheless authorized their exclusion from petitioner DLSU.
However, because of the dismissal of the CA case, petitioner
DLSU is now faced with the spectacle of having two different
directives from the CHED and the respondent Judge CHED
ordering the exclusion of private respondents Bungubung,
Reverente, and Valdes, Jr., and the Judge ordering petitioner
DLSU to allow them to enroll and complete their degree
courses until their graduation.
This is the reason We opt to decide the whole case on the
merits, brushing aside technicalities, in order to settle the
substantial issues involved. This Court has the power to take

cognizance of the petition at bar due to compelling reasons,

and the nature and importance of the issues raised warrant
the immediate exercise of Our jurisdiction.54 This is in
consonance with our case law now accorded near-religious
reverence that rules of procedure are but tools designed to
facilitate the attainment of justice, such that when its rigid
application tends to frustrate rather than promote substantial
justice, this Court has the duty to suspend their operation. 55
I. It is the CHED, not DECS, which has the
power of supervision and review over
disciplinary cases decided by institutions
of higher learning.
Ang CHED, hindi ang DECS, ang may kapangyarihan ng
pagsubaybay at pagrepaso sa mga desisyong
pandisiplina ng mga institusyon ng mas mataas na
pag-aaral.
Petitioners posit that the jurisdiction and duty to review
student expulsion cases, even those involving students in
secondary and tertiary levels, is vested in the DECS not in
the CHED. In support of their stance, petitioners cite Sections
4,56 15(2) & (3),57 54,58 57(3)59 and 7060 of Batas Pambansa
(B.P.) Blg. 232, otherwise known as the "Education Act of
1982."
According to them, Republic Act (R.A.) No. 7722 did not
transfer to the CHED the DECS' power of supervision/review
over expulsion cases involving institutions of higher learning.
They say that unlike B.P. Blg. 232, R.A. No. 7722 makes no
reference to the right and duty of learning institutions to
develop moral character and instill discipline among its
students. The clear concern of R.A. No. 7722 in the creation
of the CHED was academic, i.e., the formulation,
recommendation, setting, and development of academic
plans, programs and standards for institutions of higher

learning. The enumeration of CHED's powers and functions

under Section 8 does not include supervisory/review powers
in student disciplinary cases. The reference in Section 3 to
CHED's "coverage" of institutions of higher education is
limited to the powers and functions specified in Section 8.
The Bureau of Higher Education, which the CHED has
replaced and whose functions and responsibilities it has
taken over, never had any authority over student disciplinary
cases.
We cannot agree.
On May 18, 1994, Congress approved R.A. No. 7722,
otherwise known as "An Act Creating the Commission on
Higher Education, Appropriating Funds Thereof and for other
purposes."
Section 3 of the said law, which paved the way for the
creation of the CHED, provides:
Section 3. Creation of the Commission on Higher
Education. In pursuance of the abovementioned
policies, the Commission on Higher Education is
hereby created, hereinafter referred to as Commission.
The Commission shall be independent and separate
from the Department of Education, Culture and Sports
(DECS) and attached to the office of the President for
administrative purposes only. Its coverage shall be
both public and private institutions of higher education
as well as degree-granting programs in all post
secondary educational institutions, public and private.
The powers and functions of the CHED are enumerated in
Section 8 of R.A. No. 7722. They include the following:

Sec. 8. Powers and functions of the Commission. The

Commission shall have the following powers and
functions:

It is of public knowledge that petitioner DLSU is a private

educational institution which offers tertiary degree programs.
Hence, it is under the CHED authority.

xxxx

Third, the policy of R.A. No. 772261 is not only the

protection, fostering and promotion of the right of all citizens
to affordable quality education at all levels and the taking of
appropriate steps to ensure that education shall be
accessible to all. The law is likewise concerned with
ensuring and protecting academic freedom and with
promoting its exercise and observance for the continued
intellectual growth of students, the advancement of learning
and research, the development of responsible and effective
leadership, the education of high-level and middle-level
professionals, and the enrichment of our historical and
cultural heritage.

n) promulgate such rules and regulations and exercise

such other powers and functions as may be necessary
to carry out effectively the purpose and objectives of
this Act; and
o) perform such other functions as may be necessary
for its effective operations and for the continued
enhancement of growth or development of higher
education.
Clearly, there is no merit in the contention of petitioners that
R.A. No. 7722 did not transfer to the CHED the DECS' power
of supervision/review over expulsion cases involving
institutions of higher learning.
First, the foregoing provisions are all-embracing. They make
no reservations of powers to the DECS insofar as institutions
of higher learning are concerned. They show that the
authority and supervision over all public and private
institutions of higher education, as well as degree-granting
programs in all post-secondary educational institutions,
public and private, belong to the CHED, not the DECS.
Second, to rule that it is the DECS which has authority to
decide disciplinary cases involving students on the tertiary
level would render nugatory the coverage of the CHED,
which is "both public and private institutions of higher
education as well as degree granting programs in all post
secondary educational institutions, public and private." That
would be absurd.

It is thus safe to assume that when Congress passed R.A. No.

7722, its members were aware that disciplinary cases
involving students on the tertiary level would continue to
arise in the future, which would call for the invocation and
exercise of institutions of higher learning of their right to
academic freedom.
Fourth, petitioner DLSU cited no authority in its bare claim
that the Bureau of Higher Education, which CHED replaced,
never had authority over student disciplinary cases. In fact,
the responsibilities of other government entities having
functions similar to those of the CHED were transferred to
the CHED.62
Section 77 of the MRPS63 on the process of review in student
discipline cases should therefore be read in
conjunction with the provisions of R.A. No. 7722.
Fifth, Section 18 of R.A. No. 7722 is very clear in stating
that "[j]urisdiction over DECS-supervised or chartered

state-supported post-secondary degree-granting

vocational and tertiary institutions shall be
transferred to the Commission [On Higher
Education]." This provision does not limit or
distinguish that what is being transferred to the CHED is
merely the formulation, recommendation, setting and
development of academic plans, programs and standards for
institutions of higher learning, as what petitioners would
have us believe as the only concerns of R.A. No. 7722. Ubi
lex non distinguit nec nos distinguere debemus: Where the
law does not distinguish, neither should we.
To Our mind, this provision, if not an explicit grant of
jurisdiction to the CHED, necessarily includes the transfer
to the CHED of any jurisdiction which the DECS might have
possessed by virtue of B.P. Blg. 232 or any other law or rule
for that matter.
IIa. Private respondents were accorded due process of
law.
Ang mga private respondents ay nabigyan ng tamang
proseso ng batas.
The Due Process Clause in Article III, Section 1 of the
Constitution embodies a system of rights based on moral
principles so deeply imbedded in the traditions and feelings
of our people as to be deemed fundamental to a civilized
society as conceived by our entire history.64 The
constitutional behest that no person shall be deprived of life,
liberty or property without due process of law is solemn and
inflexible.65
In administrative cases, such as investigations of students
found violating school discipline, "[t]here are withal minimum
standards which must be met before to satisfy the demands
of procedural due process and these are: that (1) the

students must be informed in writing of the nature and cause

of any accusation against them; (2) they shall have the right
to answer the charges against them and with the assistance
if counsel, if desired; (3) they shall be informed of the
evidence against them; (4) they shall have the right to
adduce evidence in their own behalf; and (5) the evidence
must be duly considered by the investigating committee or
official designated by the school authorities to hear and
decide the case."66
Where a party was afforded an opportunity to participate in
the proceedings but failed to do so, he cannot complain of
deprivation of due process.67 Notice and hearing is the
bulwark of administrative due process, the right to which is
among the primary rights that must be respected even in
administrative proceedings.68 The essence of due process is
simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's
side or an opportunity to seek reconsideration of the action
or ruling complained of.69So long as the party is given the
opportunity to advocate her cause or defend her interest in
due course, it cannot be said that there was denial of due
process.70
A formal trial-type hearing is not, at all times and in all
instances, essential to due process it is enough that the
parties are given a fair and reasonable opportunity to explain
their respective sides of the controversy and to present
supporting evidence on which a fair decision can be
based.71 "To be heard" does not only mean presentation of
testimonial evidence in court one may also be heard
through pleadings and where the opportunity to be heard
through pleadings is accorded, there is no denial of due
process.72
Private respondents were duly informed in writing of the
charges against them by the DLSU-CSB Joint Discipline Board

through petitioner Sales. They were given the opportunity to

answer the charges against them as they, in fact, submitted
their respective answers. They were also informed of the
evidence presented against them as they attended all the
hearings before the Board. Moreover, private respondents
were given the right to adduce evidence on their behalf and
they did. Lastly, the Discipline Board considered all the
pieces of evidence submitted to it by all the parties before
rendering its resolution in Discipline Case No. 9495-3-25121.
Private respondents cannot claim that they were denied due
process when they were not allowed to cross-examine the
witnesses against them. This argument was already rejected
in Guzman v. National University73where this Court held that
"x x x the imposition of disciplinary sanctions requires
observance of procedural due process. And it bears stressing
that due process in disciplinary cases involving students does
not entail proceedings and hearings similar to those
prescribed for actions and proceedings in courts of justice.
The proceedings in student discipline cases may be
summary; and cross examination is not, x x x an essential
part thereof."
IIb. Petitioner DLSU, as an institution of higher
learning, possesses academic freedom which includes
determination of who to admit for study.
Ang petitioner DLSU, bilang institusyon ng mas
mataas na pag-aaral, ay nagtataglay ng kalayaang
akademiko na sakop ang karapatang pumili ng mga
mag-aaral dito.
Section 5(2), Article XIV of the Constitution guaranties all
institutions of higher learning academic freedom. This
institutional academic freedom includes the right of the
school or college to decide for itself, its aims and objectives,
and how best to attain them free from outside coercion or

interference save possibly when the overriding public interest

calls for some restraint.74 According to present jurisprudence,
academic freedom encompasses the independence of an
academic institution to determine for itself (1) who may
teach, (2) what may be taught, (3) how it shall teach, and (4)
who may be admitted to study.75
It cannot be gainsaid that "the school has an interest in
teaching the student discipline, a necessary, if not
indispensable, value in any field of learning. By instilling
discipline, the school teaches discipline. Accordingly, the
right to discipline the student likewise finds basis in the
freedom "what to teach."76 Indeed, while it is categorically
stated under the Education Act of 1982 that students have a
right "to freely choose their field of study, subject to existing
curricula and to continue their course therein up to
graduation,"77 such right is subject to the established
academic and disciplinary standards laid down by the
academic institution. Petitioner DLSU, therefore, can very
well exercise its academic freedom, which includes its free
choice of students for admission to its school.
IIc. The guilt of private respondents Bungubung,
Reverente and Valdes, Jr. was proven by substantial
evidence.
Ang pagkakasala ng private respondents na sina
Bungubung, Reverente at Valdes, Jr. ay napatunayan
ng ebidensiyang substansyal.
As has been stated earlier, private respondents interposed
the common defense of alibi. However, in order that alibi
may succeed as a defense, "the accused must establish by
clear and convincing evidence (a) his presence at another
place at the time of the perpetration of the offense and (b)
the physical impossibility of his presence at the scene of the
crime."78

On the other hand, the defense of alibi may not be

successfully invoked where the identity of the assailant has
been established by witnesses.79 Positive identification of
accused where categorical and consistent, without any
showing of ill motive on the part of the eyewitness testifying,
should prevail over the alibi and denial of appellants whose
testimonies are not substantiated by clear and convincing
evidence.80 Well-settled is the rule that denial and alibi, being
weak defenses, cannot overcome the positive testimonies of
the offended parties.81
Courts reject alibi when there are credible eyewitnesses to
the crime who can positively identify the accused. 82Alibi is an
inherently weak defense and courts must receive it with
caution because one can easily fabricate an
alibi.83 Jurisprudence holds that denial, like alibi, is inherently
weak and crumbles in light of positive declarations of truthful
witnesses who testified on affirmative matters that accused
were at the scene of the crime and were the victim's
assailants. As between categorical testimonies that ring of
truth on one hand and a bare denial on the other, the former
must prevail.84 Alibi is the weakest of all defenses for it is
easy to fabricate and difficult to disprove, and it is for this
reason that it cannot prevail over the positive identification of
accused by the witnesses.85
The required proof in administrative cases, such as in student
discipline cases, is neither proof beyond reasonable doubt
nor preponderance of evidence but only substantial
evidence. According to Ang Tibay v. Court of Industrial
Relations,86 it means "such reasonable evidence as a
reasonable mind might accept as adequate to support a
conclusion."
Viewed from the foregoing, We reject the alibi of private
respondents Bungubung, Valdes Jr., and
Reverente.1awphi1They were unable to show convincingly

that they were not at the scene of the crime on March 29,
1995 and that it was impossible for them to have been there.
Moreover, their alibi cannot prevail over their positive
identification by the victims.
We hark back to this Court's pronouncement affirming the
expulsion of several students found guilty of hazing:
No one can be so myopic as to doubt that the
immediate reinstatement of respondent students who
have been investigated and found guilty by the
Disciplinary Board to have violated petitioner
university's disciplinary rules and standards will
certainly undermine the authority of the administration
of the school. This we would be most loathe to do.
More importantly, it will seriously impair petitioner
university's academic freedom which has been
enshrined in the 1935, 1973 and the present 1987
Constitution.87
Certainly, private respondents Bungubung, Reverente and
Valdes, Jr. do not deserve to claim a venerable institution as
their own, for they may foreseeably cast a malevolent
influence on the students currently enrolled, as well as those
who come after them.88 It must be borne in mind that
universities are established, not merely to develop the
intellect and skills of the studentry, but to inculcate lofty
values, ideals and attitudes; nay, the development, or
flowering if you will, of the total man.89
As for private respondent Aguilar, however, We are inclined
to give credence to his alibi that he was at Camp Crame in
Quezon City at the time of the incident in question on March
29, 1995. This claim was amply corroborated by the
certification that he submitted before the DLSU-CSB Joint
Discipline Board, to wit:

CERTIFICATION
TO WHOM THIS MAY CONCERN:
We, the undersigned, hereby declare and affirm
by way of this Certification that sometime on
March 29, 1995, at about and between 4:30 P.M.
and 5:30 P.M., we were together with Alvin A.
Aguilar, at Kiangan Hall, inside Camp Crame,
Quezon City, meeting in connection with an
affair of our class known as Class 7, Batch 89 of
the Philippine Constabulary discussing on the
proposed sponsorship of TAU GAMMA PHI from
said Batch '89 affair.
That the meeting was terminated at about 6:30 P.M.
that evening and Alvin Aguilar had asked our
permission to leave and we saw him leave Camp
Crame, in his car with the driver.
April 18, 1995, Camp Crame, Quezon City.90
The said certification was duly signed by PO3 Nicanor R.
Faustino (Anti-Organized Crime CIC, NCR), PO3 Alejandro D.
Deluviar (ODITRM, Camp Crame, Quezon City), PO2 Severino
C. Filler (TNTSC, Camp Crame, Quezon City), and PO3 Ireneo
M. Desesto (Supply Center, PNPLSS). The rule is that alibi
assumes significance or strength when it is amply
corroborated by credible and disinterested witnesses. 91 It is
true that alibi is a weak defense which an accused can easily
fabricate to escape criminal liability. But where the
prosecution evidence is weak, and betrays lack of credibility
as to the identification of defendant, alibi assumes
commensurate strength. This is but consistent with the
presumption of innocence in favor of accused. 92

Alibi is not always undeserving of credit, for there are times

when accused has no other possible defense for what could
really be the truth as to his whereabouts at the crucial time,
and such defense may, in fact, tilt the scales of justice in his
favor.93
III. The penalty of expulsion imposed by DLSU on
private respondents is disproportionate to their
misdeed.
Ang parusang expulsion na ipinataw ng DLSU sa
private respondents ay hindi angkop sa kanilang
pagkakasala.
It is true that schools have the power to instill discipline in
their students as subsumed in their academic freedom and
that "the establishment of rules governing university-student
relations, particularly those pertaining to student discipline,
may be regarded as vital, not merely to the smooth and
efficient operation of the institution, but to its very
survival."94 This power, however, does not give them the
untrammeled discretion to impose a penalty which is not
commensurate with the gravity of the misdeed. If the
concept of proportionality between the offense committed
and the sanction imposed is not followed, an element of
arbitrariness intrudes. That would give rise to a due process
question.95
We agree with respondent CHED that under the
circumstances, the penalty of expulsion is grossly
disproportionate to the gravity of the acts committed by
private respondents Bungubung, Reverente, and Valdes, Jr.
Each of the two mauling incidents lasted only for few seconds
and the victims did not suffer any serious injury. Disciplinary
measures especially where they involve suspension,
dismissal or expulsion, cut significantly into the future of a
student. They attach to him for life and become a mortgage

of his future, hardly redeemable in certain cases. Officials of

colleges and universities must be anxious to protect it,
conscious of the fact that, appropriately construed, a
disciplinary action should be treated as an educational tool
rather than a punitive measure. 96

Present:

Accordingly, We affirm the penalty of exclusion97 only, not

expulsion,98 imposed on them by the CHED. As such,
pursuant to Section 77(b) of the MRPS, petitioner DLSU may
exclude or drop the names of the said private respondents
from its rolls for being undesirable, and transfer credentials
immediately issued.

- versus - AUSTRIA-MARTINEZ,

WHEREFORE, the petition is PARTIALLY GRANTED. The

Court of Appeals Resolutions dated July 30, 1996 and dated
October 15, 1996, and Regional Trial Court of Manila, Branch
36, Order dated January 7, 1997 areANNULLED AND SET
ASIDE, while CHED Resolution 181-96 dated May 14, 1996
is AFFIRMED.
Petitioner DLSU is ordered to issue a certificate of
completion/graduation in favor of private respondent Aguilar.
On the other hand, it may exclude or drop the names of
private respondents Bungubung, Reverente, and Valdes, Jr.
from its rolls, and their transfer credentials immediately
issued.
SO ORDERED.
PHILIPPINE LONG DISTANCE G.R. Nos. 164684-85

PUNO, J., Chairman,

CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO,* JJ.

ANTONIO Q. TIAMSON,
Respondent. Promulgated:

November 11, 2005

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

TELEPHONE COMPANY, INC.,

Petitioner,

DECISION

CALLEJO, SR., J.:

Being questioned in this petition for review on certiorari is
the Decision[1] of the Court of Appeals (CA) dated April 16,
2004 in CA-G.R. SP Nos. 51855 and 52247, and the
Resolution dated July 27, 2004 denying the motion for
reconsideration thereof.

On April 16, 1986, the Philippine Long Distance Telephone

Company, Inc. (PLDT) employed Antonio Q. Tiamson as a
Radio Technician II (JG4). He was assigned at the companys
North Luzon Toll Network Division, Clark Transmission
Maintenance Center (Clark-TMC) in Pampanga. After the
expiration of the probationary period, he was extended
regular appointment for the same position.
In a Letter[2] dated July 29, 1994, Anthony Dy Dee, the
President of the Angeles City Telephone System and
Datelcom Corporation, informed PLDT of his complaint
against its employees assigned in Clark-TMC, stating therein
that he suspected them to be in cohorts with the local
subscribers in effecting illegal overseas calls. Acting on the
letter-complaint, PLDT immediately dispatched a team of
inspectors and investigators from its Quality Control and
Inspection Department (QCID) and Security Division to
conduct surveillance operations in the area. On August 2,
1994, Vidal Busa, a radio technician, was caught in flagrante
delicto while monitoring an illegally connected overseas call
using the radio facilities of the companys Clark-TMC Radio
Room.[3]

The QCID, likewise, requested the Switching Network Division

at PLDTs Sampaloc National Toll Center to print the
CAMA[4] tape recording of all long distance calls originating
from the PLDT Clark Exchange Traffic for the period of July 29
to August 2, 1994. The printout revealed that a total of 469
fraudulent overseas and local calls were connected and
completed at the PLDT Clark-TMC Radio Room for the said
period. Three overseas calls to Saudi Arabia made on August
1, 1994 were imputed to Tiamson who appeared to be on
duty from 10:00 p.m. to 6:00 a.m.[5]

The QCID conducted its initial investigation on August 2,

1994, where Busa readily admitted his involvement in the
illegal connection of overseas calls. In his sworn statement,
he specifically named Arnel Cayanan, his Shift Supervisor,
Antonio Tiamson and Paul Cruzada, both radio technicians, as
the other employees actively engaged in the illegal practice.
He stated that he knew about this because whenever he
would relieve them from their tour of duty, he would see that
the circuit was engaged.[6]

On August 3, 1994, during a confrontation between Busa and

Tiamson, the former reiterated his earlier statement that the
latter was involved in the illegal act of connecting overseas
calls.[7] For his part, Tiamson admitted that he knew how to
make an overseas call using the companys radio equipment
and that he learned how to do so through hands-on
experimentation and intensive reading of operating manuals.
He, however, denied having actually made an illegal
connection of overseas calls. He declared that he knew of the
wrongdoings of Busa and even disconnected the latters
overseas telephone calls whenever he (Tiamson) was on
duty. Tiamson claimed that he failed to report the actuations

of Busa because the latter was his supervisor and was afraid
to antagonize him.[8]

On August 5, 1994, there was another confrontation

proceeding between Busa, Tiamson, Cruzada and Cayanan.
In their sworn statements, Busa and Cruzada testified that,
sometimes when they relieve Cayanan from his duty, they
would discover an illegal connection and an on-going
conversation in the line.[9] Tiamson maintained that he
disconnected the illegal calls of Busa, while Cayanan
implicated his subordinates.

The QCID recommended that administrative action for

serious misconduct be instituted against the said employees.
Consequently, the company issued to Tiamson an Inter-Office
Memorandum dated August 12, 1994, charging him with
violation of the companys disciplinary rules and regulations.
He was, likewise, required to explain within 72 hours why he
should not be dismissed, thus:

Investigation of the complaint indicated hereunder disclosed

that:

1.
Complainant Mr. Anthony Dy, President DATELCOM
Corp.

2.
The decrease of toll revenue for DATELCOM
Angeles/Mabalacat Exchange due to fraudulent overseas call
scam was complained and notified by Mr. A. Dy to Mrs. B. G.
Gendrano Clark Exchange Division Head on July 26, 1994.

3.
The complainant requested assistance to NBI and PLDT
QCI to apprehend the personnel responsible for the illegal
connection.

4.
A clue was provided by Mr. Anthony Dy that the illegal
overseas call was coming from Clark-TMC through taped and
equipment monitoring.

5. In the QCI investigation, you were implicated by your

fellow Radio Technician Mr. Vidal C. Busa as involved in the
case. You admitted you know how to operate the Lenkurt
26600 Signalling Test Set to initiate a call but denied doing it
for personal gain or interest but you failed to report the
anomaly to your superior as one of your supervisors was
involved in the fraudulent case.

The acts described above are in violation of the Companys

rules and regulations and is punishable with dismissal from
the service.

In view of the above, please explain in writing within 72

hours from receipt hereof why you should not be dismissed
from the service for the acts described above. You may elect
to be heard if you so desire. [10]

Meanwhile, Tiamson was placed under preventive suspension

on August 16, 1994.[11]

On August 18, 1994, Tiamson submitted his written

explanation denying any participation in the illegal activities
at PLDTs Clark-TMC. He averred that Busas statement against
him was malicious and untrue and that he was the one
relieving Busa from his tour of duty and not the other way
around. He insisted that on August 1, 1994, his tour of duty
was from 6:00 a.m. to 10:00 p.m.[12]

PLDT found his explanation unsatisfactory and inadequate in

substance. Thus, it issued an Inter-Office Memo [13] dated
October 5, 1994, terminating Tiamsons employment effective
October 7, 1994 on the ground of serious misconduct and/or
fraud.

Tiamson filed a complaint against PLDT for illegal suspension,

illegal dismissal, damages and other monetary claims,
docketed as NLRC Case No. RAB-III-07-6414-95.

The Labor Arbiter resolved the case in favor of Tiamson:

WHEREFORE, premises considered, judgment is hereby

rendered declaring respondent PLDT guilty of illegal dismissal
and it is hereby ordered to reinstate complainant to his
former position without loss of seniority rights and with full
backwages reckoned from the date of his dismissal up to his
actual or payroll reinstatement at the option of the
respondent, which as of this date is in the amount of Three
Hundred Seventy-Two Thousand Eight Hundred Twenty-Five
and 32/100 (P372,825.32) Pesos.

Further, respondent is ordered to pay complainant attorneys

fee in the amount of Thirty-Seven Thousand Two Hundred
Eighty-Two and 53/100 (P37,282.53) Pesos.

The claims for moral and exemplary damages are dismissed

for lack of evidence.

SO ORDERED.[14]

The Labor Arbiter declared that the complainant could not

have made any illegal connection on August 1, 1994 from
10:00 p.m. to 6:00 a.m. because he was off-duty.

PLDT elevated the case to the National Labor Relations

Commission (NLRC). On August 31, 1998, the NLRC ruled that
while there was just cause for Tiamsons dismissal, the
penalty of dismissal was too harsh. Hence, the NLRC ordered
that Tiamson be reinstated to his former position without loss
of seniority rights, but without backwages. [15]
Both parties moved to reconsider the decision, but the NLRC
denied the motions for lack of merit.[16]
PLDT filed a petition for certiorari before the CA, assailing the
NLRCs order of reinstatement despite a categorical finding
that Tiamson was guilty of illegal connection of overseas
calls. The petition was docketed as CA-G.R. SP No. 51855.
Tiamson filed a similar petition, assailing the deletion of the
award of backwages and attorneys fees. This was docketed
as CA-G.R. SP No. 52247. The CA, thereafter, ordered the
consolidation of the two petitions.
On April 16, 2004, the CA reinstated the decision of the Labor
Arbiter, thus:

WHEREFORE, the petition by the PLDT under CA-G.R. SP No.

51855 is DENIED DUE COURSE and DISMISSED while the
petition by Antonio Tiamson under CA-G.R. SP No. 52247
is GIVEN DUE COURSE and GRANTED, and the Decision
dated October 15, 1997 of the Labor Arbiter which was set
aside by the NLRC, is hereby REINSTATED in its fullness and
without modifications.
SO ORDERED.[17]
The CA held that Busas sworn statement was not worthy of
credence, a mere afterthought, the contents of which were
seriously flawed. The appellate court found it difficult to
believe Busas assertion that, on several occasions when he
came to relieve the respondent, a circuit was in use which
the latter would turn off before leaving. In this regard, the
appellate court noted that Busas work shift preceded that of
the respondent, such that it would be impossible for him to
see the respondent make an illegal connection. [18]
The CA likewise opined that the respondent was denied due
process when he was not apprised of nor given the
opportunity to confute the charge that during his duty on
August 1, 1994, three overseas calls to Saudi Arabia were
recorded in the CAMA tape.[19]
The petitioner timely filed a motion for reconsideration, which
the CA denied in its Resolution[20] dated July 27, 2004.
The petitioner now comes before this Court, alleging that:
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN
REINSTATING THE DECISION OF THE ARBITER A QUO AS SAID
DECISION WAS NOT IN ACCORD WITH LAW AND CONTRARY
TO THE EVIDENCE ON RECORD.[21]

The petitioner submits that it has presented more than

substantial evidence to prove that the respondent was
involved in the illegal connection of overseas calls. The
petitioner avers that the CA erred in holding that Busas
sworn statement was not credible. According to the CA, it
would have been impossible for Busa to see the respondent
making an illegal connection since his tour of duty preceded
that of the respondent. The petitioner, however, asserts that
there was a rotation of the employees tour of duty such that,
at times, it was Busa who would take over from the
respondent; hence, Busa had the occasion to personally see
the respondent connecting illegal calls. In support of this, the
petitioner proffers the copy of logbook entries from July 13 to
August 3, 1994, which was attached to its Memorandum of
Appeal filed with the NLRC. The logbook shows that on
several occasions, it was Busa who took over from the
respondent.[22]
The petitioner further asserts that the respondent failed to
show that Busa was actuated and impelled by improper
motive and bad faith in executing his sworn statement.
[23]
The records show that Busa, from the very start, had
categorically and unequivocally named the respondent as
one of those engaged in the illegal connection of overseas
calls.[24] Moreover, Busas sworn statement had been
corroborated by the printout of the CAMA tapes (which
disclosed that during the respondents August 1, 1994 duty,
three fraudulent calls to Saudi Arabia were illegally made),
[25]
as well as Cayanans sworn statement implicating the
respondent.[26]
The petitioner submits that the respondents offense was
serious in character and merits the penalty of dismissal from
employment. It contends that the respondent was accorded
the full measure of due process before he was dismissed: he
was given a notice which apprised him of the charge against

him and required him to explain why he should not be

dismissed, and later, a notice of termination. The petitioner
claims that the Labor Code simply requires that the
employee be given a written notice containing a statement of
the causes of termination. It insists that the printout of the
recording of the CAMA tapes showing that three illegal
connections were made on August 1, 1994 is a mere
evidentiary matter that need not be mentioned in the notice.
[27]

For his part, the respondent avers that Busas statement was
uncorroborated and hearsay for lack of cross-examination. He
insists that Busa could not have seen him make illegal
connections since the latters shift came before his. [28]
The petitioner replies that an affidavit may be admissible
even if the witness is not presented during trial because
technical rules are not strictly followed in proceedings before
the Labor Arbiter and the NLRC. [29]
The petition has no merit.
It is a settled rule that factual findings of labor officials, who
are deemed to have acquired expertise in matters within
their respective jurisdictions, are generally accorded not only
respect but even finality.[30] Moreover, in a petition for review
oncertiorari under Rule 45, the Supreme Court reviews only
errors of law and not errors of facts.[31] However, where there
is divergence in the findings and conclusions of the NLRC, on
the one hand, from those of the Labor Arbiter and the Court
of Appeals, on the other, the Court is constrained to examine
the evidence.[32]

In termination cases, the burden of proof rests upon the

employer to show that the dismissal is for just and valid

cause; failure to do so would necessarily mean that the

dismissal was illegal.[33] The employers case succeeds or fails
on the strength of its evidence and not on the weakness of
the employees defense. If doubt exists between the evidence
presented by the employer and the employee, the scales of
justice must be tilted in favor of the latter. [34] Moreover, the
quantum of proof required in determining the legality of an
employees dismissal is only substantial evidence. Substantial
evidence is more than a mere scintilla of evidence or relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise. [35]
In this case, the appellate court ruled for respondent
Tiamson, ratiocinating as follows:
The issues posed by both parties involve the evaluation of
the findings of facts by the agencies a quo. While the general
rule is that factual issues could not be properly raised and
considered in a petition for certiorari, it however admits of
this exception that a disharmony between the factual
findings of the Labor Arbiter and those of the NLRC opens the
door to review thereof by the Supreme Court (Asuncion vs.
National Labor Relations Commission, 362 SCRA 56),
including, of course, the Court of Appeals.
The crux of both petitions is whether the NLRC with its
findings quoted below, was correct in setting aside the
disposition of the Labor Arbiter:
We disagree that respondent failed to present evidence
linking complainant to the illegal connection scam. As
pointed out by the respondent, co-employee Busa and
Cayanan in the course of their investigation implicated
complainants participation in illegal overseas connection.
Complainant also failed to refute respondents evidence that
on August 1, 1994, while he was on duty, three (3) overseas

calls to Saudi Arabia were recorded in cama tape (Annex 4, p.

30, records).
However, we consider the penalty of dismissal too harsh
considering that respondent imposed a sixty (60)-day
suspension on Paul Cruzada, a co-employee of complainant
who submitted (sic) culpability. For where a lesser punitive
penalty would suffice, the supreme penalty of dismissal
should be visited (Almira vs. B.F. Goodrich, 58 SCRA 120).
Under the circumstances, reinstatement but without
backwages is appropriate (pp. 39-40, Rollo)
Our review of the records reveals that among the three
employees who issued sworn statements, namely, Busa,
Cayanan and Cruzada, it was only Busa who directly
implicated Tiamson and it was done inexplicably only in his
second sworn statement. It does not inspire credence as it
comes as an afterthought and the contents are seriously
flawed on material points. Looming large is the claim of Busa
that on several occasions when he came to relieve Tiamson,
he observed that his circuit was logged on and in use, and
Tiamson would then put it off before leaving. This is a canard
because the shift of Busa was from 1:00 p.m. to 6:00 a.m.
and of course ahead of the 6:00 a.m. to 2:00 p.m. shift of
Tiamson who came in as his reliever. Their tours of duty was
in the converse order of what Busa claimed, and so he spoke
with a forked tongue when he stated that Tiamson at the
preceding shift had his circuit logged on and switched this off
when he left.
A no less important point is the undisputed fact that Tiamson
was not given the opportunity to confute the charge that on
August 1, 1994 while he was on duty, three (3) overseas calls
to Saudi Arabia were recorded in the cama tape. This was not
indicated in the memorandum sent to him on August 12,
1994, the full text of which reads:

August 12, 1994

TO : MR. ANTONIO Q. TIAMSON Radio Tech II Clark TMC
FROM : Division Head, North Luzon Toll Network
SUBJECT: ADMINISTRATIVE CASE
--------------------------------------------Investigation of the complaint indicated hereunder disclosed
that:
1. Complainant Mr. Anthony Dy, President DATELCOM Corp.
2. The decrease of toll revenue for DATELCOM
Angeles/Mabalacat Exchange due to fraudulent overseas call
scam was complained and notified by Mr. A. Dy to Mrs. H. G.
Gendrano Clark Exchange Division Head on July 26, 1994.
3. The complainant requested assistance to NBI and PLDT
QCI to apprehend the personnel responsible for the illegal
connection.
4. A clue was provided by Mr. Anthony Dy that the illegal
overseas call was coming from Clark-TMC through taped and
equipment monitoring.
5. In the QCI investigation, you were implicated by your
fellow Radio Technician Mr. Vidal C. Busa as involved in the
case. You admitted you know how to operate the Lenkurt
26600 Signalling Test Set to initiate a call but denied doing it
for personal gain or interest but you failed to report the
anomaly to your superior as one of your supervisors was
involved in the fraudulent case.

The acts described above are in violation of the Companys

rules and regulations and is punishable with dismissal from
the service.
In view of the above, please explain in writing within 72
hours from receipt hereof why you should not be dismissed
from the service for the acts described above. You may elect
to be heard if you so desire.
Please be informed also that you will be placed under
preventive suspension which will take effect on August 16,
1994 pending resolution of the case.
If no written explanation is received from you within the said
period of 72 hours, this case will be decided on the basis of
the evidence on hand. (p. 227, Rollo)
(SGD.)
ARMANDO A. ABESAMIS
Procedural due process requires that an employee be
apprised of the charge against him, given reasonable time to
answer the same, allowed ample opportunity to be heard
and defend himself, and assisted by a representative if the
employee so desires (Concorde Hotel vs. Court of Appeals,
362 SCRA 583; underlining supplied). Procedural due process
requires that the employer serve the employees to be
dismissed two (2) written notices before the termination of
their employment is effected: (a) the first, to apprise them of
the particular acts or omission for which their dismissal is
sought; and (b) second, to inform them of the decision of the
employer that they are being dismissed (Perpetual Help
Credit Cooperative, Inc. vs. Faburada, 366 SCRA 693;
underlining supplied). The Labor Arbiter, therefore,
was correct in ruling that Tiamson was indeed illegally
dismissed from his employment.[36]

T 26 - Ang ibig mo sabihin, ginagawa din nina Mr. Tiamson at

Cruzada
The petitioner maintains that contrary to the findings and
conclusions of the appellate court, it has established through
substantial evidence that there was just cause for the
respondents dismissal. To bolster such contention, the
petitioner adduces the following documentary evidences: (1)
the sworn statements of Vidal Busa specifically implicating
the respondent; (2) the sworn statement of Arnel Cayanan;
and (3) the printout of the CAMA tape, recording the
unauthorized overseas calls originating from Clark-TMC
during the respondents tour of duty.
The respondent disputes the admissibility of Busas sworn
statements for being hearsay since the latter was not
presented for cross-examination. This argument, however, is
not persuasive because the rules of evidence are not strictly
observed in proceedings before administrative bodies like the
NLRC where decisions may be reached on the basis of
position papers only.[37]
The Court agrees with the contentions of the respondent and
the findings and rulings of the CA.
The petitioner indeed failed to adduce substantial evidence
to prove that the dismissal of the respondent was for a just
cause. In his first sworn statement, Busa implicated the
respondent in the illegal connections of overseas calls in this
manner:
T 25 - Bukod sa iyo, sinu-sino pa sa mga kasamahan mo ang
tinuruan ni Mr. Cayanan ng sistemang ito?
S - Sina Antonio Tiamson at Paul Cruzada na pawang mga
Radio Technicians din.

ang magpa-patch ng mga tawag sa abroad o overseas?

S - Opo.
T 27 - Paano mo naman nasisiguro ito?
S - Nakikita ko po.

T 28 - Paano mo naman nakita samantalang magka-iba ang

tour of duty
ninyo?
S - Pag nag-relyebo kami ay naaabutan kong naka-engage
ang circuit at pag tinanong ko ay sinasabi nga nilang may
tawag sila at kasalukuyang nag-uusap ang magkabilang
parties.[38]
During the confrontation between Busa and the respondent,
the former likewise made the following statements:
T 3 - Ayon sa iyo, ginagawa rin ni Mr. Tiamson ang magkukunekta ng mga illegal na tawag overseas sa pamamagitan
ng pag-gamit ng inyong Radio Equipment. Tama ba ito?
S - Tama po, Sir.
T 4 - Paano mo nalaman na ginagawa rin ni Mr. Tiamson ito?
S - Dahil nakikita ko siyang nagkukunekta at ilang beses ko
ring nadatnan kapag nag-relyebo kami na gumagana ang
circuit na ang ibig sabihin ay may nag-uusap. At bago siya

aalis ay inilalagay niya sa normal position ang linyang

ginamit niya.

the respondent and the other annotations in the said printout

are handwritten and unsigned.

T 5 - Kailan pa ito gingawa ni Mr. Tiamson kung natatandaan

mo pa?

The ruling in Asuncion v. National Labor Relations

Commission[43] is instructive on how such document should
be treated. In that case, the employer submitted a
handwritten listing and computer printouts to establish the
charges against the employee. The handwritten listing was
not signed, and while there was a computer-generated
listing, the entries of time and other annotations therein were
also handwritten and unsigned. The Court ruled that the
handwritten listing and unsigned computer printouts were
unauthenticated, hence, unreliable. Mere self-serving
evidence (of which the listing and printouts are of that
nature) should be rejected as evidence without any rational
probative value even in administrative proceedings. [44]

S - Sa natatandaan ko ginagawa niya ito magmula noong

1992 pa.
T 6 - Ayon pa rin sa iyo, alam din ni Mr. Tiamson na ginagawa
rin ni Mr. Cayanan itong mga illegal activities na ito. Paano
mo nasabi na alam ni Mr. Tiamson itong ginagawa ni Mr.
Cayanan
S - Kasi magkakasama kami at kaming apat lang nina Mr.
Cayanan, Mr.Tiamson, Mr. Cruzada at ako ang nakaka-alam
niyang operation na iyan.[39]
On the other hand, during the confrontation among all four
employees implicated in the matter, Cayanan testified that
he was aware that his subordinates were engaged in illegal
activities. However, he failed to specifically mention who
these subordinates were.[40]
Although admissible in evidence, affidavits being self-serving
must be received with caution. This is because the adverse
party is not afforded any opportunity to test their veracity.
[41]
By themselves, generalized and pro forma affidavits
cannot constitute relevant evidence which a reasonable mind
may accept as adequate.[42] There must be some other
relevant evidence to corroborate such affidavits.
On this point, the petitioner submits that the printout of the
CAMA tapes corroborated Busas sworn statement. A perusal
of the printout, however, shows that it is not authenticated
by the proper officer of the company. Moreover, the name of

Thus, in Uichico v. National Labor Relations Commission,

[45]
the Court elucidated the extent of the liberality of
procedure in administrative actions:
It is true that administrative and quasi-judicial bodies like the
NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, this procedural rule should
not be construed as a license to disregard certain
fundamental evidentiary rules. While the rules of evidence
prevailing in the courts of law or equity are not controlling in
proceedings before the NLRC, the evidence presented before
it must at least have a modicum of admissibility for it to be
given some probative value. [46]
The decisions of this Court, while adhering to a liberal view in
the conduct of proceedings before administrative agencies,
have nonetheless consistently required some proof of
authenticity or reliability as a condition for the admission of
documents.[47] Absent any such proof of authenticity, the

printout of the CAMA tape should be considered inadmissible,

hence, without any probative weight.
To conclude, the petitioner has not established by substantial
evidence that there was just cause for the respondents
termination from his employment. The sworn statements of
Busa and Cayanan alone are not sufficient to establish that
the respondent was guilty of serious misconduct. In light of
such finding, there is no need to delve into whether or not
the respondent was afforded due process when he was
dismissed by the petitioner.

WHEREFORE, premises considered, the petition is DENIED

DUE COURSE. The Decision of the Court of Appeals dated
April 16, 2004, and its Resolution dated July 27, 2004 in CAG.R. SP Nos. 51855 and 52247 are AFFIRMED.

SO ORDERED.

prior to dismissal. Does the violation by a comptroller-finance

officer of explicit instructions from senior management on
how the available liquid resources of the company are to be
controlled and disbursed, such violation resulting in the
collapse of the company's cash flow constitute loss of trust
and confidence sufficient to justify termination of such
management officer? Where the presence of just cause is
shown, what is the consequence of the non-observance of
due process? Is an internal audit sufficient compliance with
the due process requirement? These are the questions that
confronted this Court in resolving this petition
for certiorari assailing the Resolution[1] of the National Labor
Relations Commission (NLRC),[2] which affirmed in toto the
decision of the Labor Arbiter[3] dated December 21, 1992.
After due deliberation and consultation of the petition, the
comments filed by the Solicitor General and the private
respondent as well as the reply thereto, the Court gave due
course to the petition and considered the case submitted for
resolution, without requiring the parties to submit the
memoranda.
The Facts

MGG MARINE SERVICES, INC. and/or DOROTEO C.

GARLAN and CESAR ROTILO, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and ELIZABETH A.
MOLINA, respondents.
DECISION
PANGANIBAN, J.:
To justify fully the dismissal of an employee, the employer as
a rule must prove (a) that the termination was due to a just
cause and (b) that the employee was afforded due process

Private respondent was initially employed by the MGG Marine

Services, Inc. (MGG) on July 1, 1988.
On March 25, 1990, the president of MGG, petitioner Doroteo
C. Garlan, went to the United States for a brief sojourn. On
March 1, 1990, before his departure, he appointed private
respondent as comptroller and the over-all supervisor,
concurrently with her then position as financial officer. As
comptroller, private respondent was tasked to hold in trust
for the company corporate funds to pay its obligations as
authorized by the president and the board of
directors. Petitioner Garlan instructed private respondent to
pay the company's obligations as they fell due. Ma. Lourdes

G. Unson, vice-president of MGG who also traveled to the

United States, left with private respondent 79 prepared and
pre-signed checks, 16 in blank and 63 with specific amounts
on them, with corresponding vouchers containing the amount
of debts due and the names of the creditors. Private
respondent was specifically told to pay only the creditors
mentioned in the cash vouchers and to place on each of the
16 blank checks the amount stated in the corresponding
check voucher. The said checks were made payable to
private respondent, who upon withdrawal of the money from
the bank, was to pay the same to the creditors.
At the time the aforementioned officers left for abroad, the
company had about P1.5 million in its bank account. The
total amount payable to the creditors as appearing in the
check vouchers corresponding to the 16 blank checks was
P224,131.50. All payments of the company were
programmed in accordance with its plans and budget for the
purpose of maintaining the optimal level of cash reserve.
When the corporate officers returned from their trip in June
1990, they were dismayed to learn that the company's
deposits in the bank was reduced to only P5,720.00. It turned
out that private respondent disobeyed the instructions given
her not to pay more than what was specified in check
vouchers. She increased the amounts she wrote on the blank
checks so that instead of paying only P224,131.50 as
budgeted, she withdrew from the bank an aggregate sum of
P1,515,823.00. Likewise, she paid some creditors who were
not specified in the cash vouchers. When the company had to
pay an obligation of P15,000.00 on June 7, 1990, private
respondent could only withdraw P5,720.00.
In her pleadings, private respondent did not give a
satisfactory explanation as to why she violated the
instruction given her except to claim that she did not profit

by a single centavo from the withdrawals which she paid to

company creditors.
MGG filed estafa charges against private respondent which
were however dismissed.
On November 12, 1990, MGG terminated private
respondent's employment for loss of trust and
confidence. She then filed a complaint for illegal dismissal
against MGG and its officers.
In a decision dated December 21, 1992, the Labor Arbiter
held that: (1) the dismissal was illegal; (2) MGG should pay
private respondent (a) separation pay equivalent to one
month's salary for every year of service, it appearing that
strained relations between the parties rendered
reinstatement impractical; (b) thirteenth month pay in the
amount of P16,083.32; (c) overtime pay in the amount of
P21,977.52; (d) unpaid salary in the amount of P31,166.66;
(e) moral damages in the amount of P50,000.00 for the
wrongful and malicious dismissal in bad faith; and (f)
attorneys fees.[4]
The Labor Arbiter noted:
In the case at bar, except for their bare self-serving allegation
that the complainant had allegedly misappropriated
corporate funds, no proof whatsoever was adduced by
respondents and not even a scintilla of evidence was
presented to show that the complainant had in fact
defrauded the company to the tune of more than a million
pesos. The complainant on the other hand successfully
defended herself from said accusations by proving that she
was in fact authorized to disburse the corporate funds in
question for the purpose of settling the companys various
accounts with its different creditors. Significantly,
respondents made no claim at all that a single centavo went

to the pocket of complainant. Moreover, the complaint for

estafa filed against the complainant was dismissed by Asst.
City Prosecutor Eudoxia T. Gualberto in a resolution dated
September 30, 1991 and a subsequent motion for
reconsideration of said dismissal was denied by the City
Prosecutor of Manila.[5]
MGG appealed the Labor Arbiters decision to NLRC. In a
Resolution dated February 28, 1994, NLRC dismissed the
appeal and affirmed in toto the appealed decision.
Hence this petition for certiorari.
The Issues
The issues in this case are:
(1) Was there lawful cause for the dismissal of private
respondent?
(2) Did petitioners comply with the procedural requirements
for valid dismissal? and
(3) Were petitioners accorded due process at the hearing
before the Labor Arbiter?
The First Issue:
Loss of Trust and Confidence in the Employee
MGG asserts that it was legally justified in dismissing private
respondent on the ground of loss of trust and confidence.
We find that there is basis for MGGs loss of trust and
confidence in private respondent, who does not deny that
she entered on the blank checks amounts in excess of what
had been provided for in the cash vouchers, and made

payments to creditors other than those specified in said

vouchers. In his decision, the Labor Arbiter said that the
herein petitioners (respondents therein) filed a position paper
explaining the basis of such loss of confidence and defining
the damage wrought by private respondent Molina, thus: 5a
For their part, respondents filed a position paper stating that
from the time complainant was appointed as liquidation
officer up to her designation as comptroller of the company,
she was tasked to hold in trust corporate funds; that in March
1990 when respondent Doroteo Garlan left for the United
States, complainant was instructed to take care of the
financial requirements of the company and to disburse
amounts payable to creditors as they became due and
payable; that respondent corporation through its vicepresident, Ma. Lourdes Unson prepared several check
vouchers with the corresponding blank checks with the
amounts reflected on the check vouchers; that said checks
were made payable to complainant for her to facilitate the
drawing of cash from the drawee banks so that cash
vouchers would then be used in paying creditors; that
complainant disbursed corporate funds not as instructed but
with unexplained misappropriation or the blank checks that
were supposed to have been filled up with amounts reflected
on the corresponding check vouchers were intercolated (sic)
with amounts different and more than she was instructed to
place; that an audit was made and it was discovered that
complainant was able to draw, with the use of falsified
checks the amount of P1,515,823.00, instead of the amount
of P224,131.50 or an excess of P1,291,691.50, which amount
remains unexplained up to the present; that complainant
was asked to explain the over-drawing of corporate funds but
she has failed and in fact refused to submit any explanations;
(Italics supplied)

This was buttressed by the affidavit of petitioners witness

Renato Jose O. Unson, who explained the limits of Molinas
authority as well as the cash flow damage that her violations
thereof caused the company:5b
(7) Before MGGs senior management left for abroad last
March 25, 1990, being a small company with limited
resources, senior management set up a very strict budget so
that its company obligations would be met and paid as they
fell due. Molina was informed of the purpose of senior
management in setting up a strict budget and
implementation thru the issuance of various checks;
(8) Thus, several checks including eleven (11) blank checks
with their corresponding check vouchers specifying the
amount to be placed and the purpose for which the funds
were to be used were left with Molina who enjoyed complete
trust and confidence from senior management. Molina knew
that she was under very strict and specific instructions to fill
in the blank checks with amounts only in accordance with the
corresponding check vouchers and to disburse said funds in
accordance with the purpose indicated in the respective
check voucher.
Thus Molina knew that she had no authority to fill in the
blank checks with amounts different from that as
instructed. She also knew that she had no authority to
disburse funds to purposes different from that indicated in
the individual check vouchers;
(9) All the time that senior management was abroad, senior
management was constantly in touch with Molina thru
overseas phone calls. In fact, during the first two weeks (from
March 25, 1990) management called up Molina at least seven
times.

Up to the time of arrival sometime June, 1990. Molina

consistently informed senior management that everything
was normal and that the business, its operations, funds;
collections and accounts were in accordance with plans and
the budget.
xxx xxx xxx
(12) A corresponding company audit was conducted wherein
Molina was further allowed to explain her actuations. It was
then discovered that by taking advantage of the blank
checks, she was able to withdraw amounts in excess of
instructions.
In fact, within the short period from March 27, 1990 to April
6, 1990 (senior management left March 25, 1990) Molina
withdrew close to P1,000,000.00 pesos in excess of that
instructed her by already encashing six (6) of the blank
checks with amounts in excess of those instructed her.
MGGs funds, were so depleted that Molina on June 7, 1990,
could not withdraw the amount she was authorized, that is,
even if she was instructed to put the amount of P15,000.00
in the blank check, Molina only placed and withdrew the
amount of P5,720.00 only;
In all, Molina without any authority whatsoever, by placing in
the blank checks amounts in excess of what she was
specifically instructed, withdrew about P1,282,411.00
thereby creating liability and causing damage and prejudice
to MGG. It should be noted that these excess amounts were
part of the unbudgeted and unappropriated corporate funds
which only senior management had the right to withdraw or
cause to withdraw;
(13) In short, Molinas authority was limited to the physical
withdrawal of MGGs budgeted and appropriated funds from

the bank as indicated in the checks/check vouchers and to

disburse said funds in accordance with specific instructions
given her;
The above instructions of senior management were not
denied by Molina in her testimony before said Arbiter: 5c
Q. - When they left for the U.S. did they leave you any
vouchers?
Miss Molina
A. - They left me vouchers and my guideline (sic) are here
(producing a list with the date therein March 27 consisting of
8 pages). They left me this one as my guidelines (sic) is
supported by 79 checks, 16 blank checks and 63 with the
amount.
Q. - And these 16 blank checks that you mentioned these
were left with you with attached checks?
A. - Yes, sir.
Summing the prejudice caused by private respondent,
petitioners allege as follows in their Petition [6]before us:
x x x While private respondent was authorized to withdraw
from company coffers approximately P200,000.00, by fillingin the checks amounts in excess of those mentioned in the
check vouchers, she was able to withdraw approximately
P1.4 million thereby abruptly reducing the companys reserve
funds by as much as P1.2 million (TSN, June 9, 1992, pp. 4344). Thus, when the senior officers returned from the United
States, they were surprised to find out that the companys
reserve funds have significantly dwindled to such an extent
that private respondent on June 7, 1990, could not withdraw
the amount she was authorized, that is, even if she was

instructed to put the amount of P15,000.00 in blank check,

Molina could only place and withdraw the amount of
P5,720.00. (par. 12, Affidavit of Atty. Unson dated March 26,
1992; Annex D hereof). Obviously, by June 7, 1990, the
companys reserve funds have been reduced to a measly
P5,720.00 by reason of the over-withdrawal of private
respondent.
Bearing in mind the purposes and objectives of setting-up the
reserve fund, it is respectfully maintained that the abrupt
reduction thereof from P1.4 million pesos to the measly sum
P5,720.00 in a span of three (3) months from March to June
7, 1990, brought untold miseries on petitioner MGG.Petitioner
found its checks bouncing one after the other. It failed to
meet its financial obligations to its preferred creditors. It had
to source financial resources elsewhere in order to pay its
due and demandable debts, not to mention its obligations to
its employees.
It is, therefore, incorrect for public respondent NLRC to rule
that private respondents act of over-withdrawing from the
companys reserve funds did not cause any damage or
prejudice unto petitioner MGG.
The Labor Arbiter labored under the wrong impression that
private respondent was dismissed merely because she
embezzled company funds saying that "x x x except for their
bare self-serving allegation that the complainant (private
respondent herein) had allegedly misappropriated corporate
funds, no proof whatsoever was adduced by respondents
(petitioner herein) and not even a scintilla of evidence was
presented to show that the complainant had in fact
defrauded the company to the tune of more than a million
pesos (supra). The NLRC, also falling into the same error as
the Labor Arbiter, said:

x x x the complainant had shown to Our satisfaction that in

the questioned transactions, she never defrauded the
company as the monies so defrayed were used to settle
various corporate accounts x x x.[7]
The NLRC and the Labor Arbiter did not realize that the acts
of private respondent complained of had placed the company
in great jeopardy and disturbed its financial stability, thereby
causing it real and actual damage.[8]
Indeed, private respondents disobedience and precipitated
actions caused great damage to the companys cash flow. In
the harsh world of business, cash flow is as important as and
oftentimes, even more critical than profitability. So long as an
enterprise has enough liquidity (cash) to pay its workers,
requisition fuel, meet office rentals, maintain its equipment
and satisfy its life-line creditors within tolerable limits, it will
survive and bridge better days for its recovery. But once it
fails to pay such bills because its liquid resources are
improvidently used and disbursed, as private respondent did
in the instant case, it runs the all-too-real risk
of immediate collapse. No wonder, petitioners were rightfully
aghast when upon their return from abroad, they discovered
that their treasury was almost completely drained, with a
measly P5,720.00 remaining.
Private respondent took it upon herself to disburse the
company funds in amounts and for purposes of her own
discretion, and in disregard of the program and plans of the
company. She arrogated to herself the combined powers of
the management and the board of directors of the company.
An employer cannot be compelled to retain an employee who
is guilty of acts inimical to the interests of the employer. [9] A
company has the right to dismiss its employees if only as a
measure of self-protection.[10] This is all the more true in the

case of supervisors or personnel occupying positions of

responsibility.[11]
In the instant case, let it be remembered that the private
respondent is not an ordinary rank-and-file employee. She is
the Comptroller-Finance Officer who unarguably violated her
duty of controlling cash flow and specific instructions on how
the very limited cash of the company was to be spent. It
would be extremely oppressive and cruel to require
petitioners to retain in their innermost sanctum of
management an officer (not just a rank-and-file employee)
who has admitted not only violating specific instructions but
also to being completely unreliable and untrustworthy in the
discharge of her duty to safeguard the cash flow of the
company.
That the complaint for estafa filed by MGG against private
respondent was dismissed is also of no moment. The rule is
that an employees acquittal in a criminal case does not
preclude a finding that he has been guilty of acts inimical to
the employers interest.[12]
Corollarily, proof beyond reasonable doubt of an employees
misconduct is not required in dismissing and employee on
the ground of loss of trust and confidence. The quantum of
proof required is only substantial evidence. [13] In the case
before us, there was an admitted, actual and real breach of
duty committed by private respondent, which was the basis
of MGGs loss of trust and confidence in her.
While it is true that initially during the proceedings before the
labor tribunals, petitioners were also faulting Molina for
estafa, in addition to loss of confidence, they have
abandoned misappropriation, in the instant petition, as a
ground for dismissal (since the criminal complaint against her
was dismissed) and instead relied on the second ground,
namely, loss of confidence resulting from her disobedience

and unfaithfulness in the discharge of her duties which we

hold as sufficient cause for her dismissal under the
circumstances.
The Second Issue: Procedural Due Process
To constitute a completely valid and faultless dismissal, it is
well-settled that the employer must show not only sufficient
ground therefor but it must also prove that it observed
procedural due process by giving the employee two notices:
one, of the intention to dismiss, indicating therein his acts or
omissions complained against, and two, notice of the
decision to dismiss; and an opportunity to answer and rebut
the charges against him, in between such notices.
The twin requirements of notice and hearing constitute
essential elements of due process in cases of employee
dismissal: the requirement of notice is intended to inform the
employee concerned of the employers intent to dismiss and
the reason for the proposed dismissal; upon the other hand,
the requirement of hearing affords the employee an
opportunity to answer his employers charges against him
accordingly to defend himself therefrom before dismissal is
effected. Neither of these two requirements can be dispensed
with without running afoul of the due process requirement of
the 1987 Constitution.[14]
In the case before us, the petitioners found out about the
excess withdrawals when an audit was conducted. The record
is devoid of any showing that private respondent was given
notice of the charges against her. Neither was she given a
hearing or opportunity to present her defense. The only
allegation of petitioners was that she was asked questions
about her withdrawals during the audit. But these are too
scant and too bare to amount to due process. There was no
indication of the nature and the type of questions asked, the
process of the supposed inquiry, the time and opportunity

given for her defense, and the degree of explanation allowed

her.
When this issue was brought up by the Solicitor General in
his Comment, all that the petitioners could say in their Reply
was:
There is no dispute that private respondent Molina was
audited upon arrival of the senior management from the
United States and that she herself admits that she was asked
questions and was allowed to explain her side (pp. 28-18
(sic), TSN, July 26, 1991).[15]
Plainly, this is not sufficient compliance with due process. An
audit cannot take the place of the twin requirements of
notices and hearing. At the very least, petitioners failed to
show they followed these requirements.
There is also no showing that the requirements of due
process were adequately met by the petitioners.
The law requires that the employer must furnish the worker
sought to be dismissed with two (2) written notices before
termination of employment can be legally effected: (1) notice
which apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the
employers decision to dismiss him. (Sec. 13, BP 130; Sec. 2-6
Rule XIV, Book V, Rules and Regulations Implementing the
Labor Code as amended). Failure to comply with the
requirements taints the dismissal with illegality. This
procedure is mandatory; in the absence of which, any
judgment reached by management is void and inexistent
(Tingson, Jr. v. NLRC, 185 SCRA 498 [1990]; National Service
Corp. v. NLRC, 168 SCRA 122 [1988]; Ruffy v. NLRC, 182
SCRA 365 [1990]).[16]

This failure to show due process taints the dismissal. This

does not mean however that the private respondent would
be entitled to backwages or reinstatement or even
separation pay.[17] Under prevailing jurisprudence, she is
entitled only to indemnity or damages, the amount of which
depends on the peculiar circumstances of each case. [18]
In Wenphil Corporation vs. NLRC, et al.[19], which is the
leading example of these indemnity cases, the private
respondent had an altercation with a co-employee, as a
result of which both were suspended the following morning,
and in the afternoon of the same day private respondent was
dismissed. In justifying his dismissal, the Court held:
The Court holds that the policy of ordering the reinstatement
to the service of an employee without loss of seniority and
the payment of his wages during the period of his separation
until his actual reinstatement but not exceeding three (3)
years without qualification or deduction, when it appears he
was not afforded due process, although his dismissal was
found to be for just and authorized cause in an appropriate
proceedings in the Ministry of Labor and Employment, should
be re-examined. It will be highly prejudicial to the interests of
the employer to impose on him the services of an employee
who has been shown to be guilty of the charges that
warranted his dismissal from employment. Indeed, it will
demoralize the rank and file if the undeserving, if not
undesirable, remains in the service.
Thus in the present case, where the private respondent, who
appears to be of violent temper, caused trouble during office
hours and even defied his superiors as they tried to pacify
him, should not be rewarded with re-employment and back
wages. It may encourage him to do even worse and will
render a mockery of the rules of discipline that employees
are required to observe. Under the circumstances the

dismissal of the private respondent for just cause should be

maintained. He has no right to return to his former employer.
However, the petitioner must nevertheless be held to
account for failure to extend to private respondent his right
to an investigation before causing his dismissal. The rule is
explicit as above discussed. The dismissal of an employee
must be for just or authorized cause and after due
process.Petitioner committed an infraction of the second
requirement. Thus, it must be imposed a sanction for its
failure to give a formal notice and conduct an investigation
as required by law before dismissing petitioner from
employment. Considering the circumstances of this case
petitioner must indemnify the private respondent the amount
of P1,000.00. The measure of this award depends on the
facts of each case and the gravity of the omission committed
by the employer.
In Rubberworld (Phils.) Inc. et al. vs. NLRC, et al. [20] the
employer was also ordered to pay the private respondent
P1,000.00 as indemnification for (petitioners) failure to
observe the requirements of due process prior to termination
of private respondents employment for just cause. Following
this doctrine, the Court in Aurelio vs. NLRC, et al.[21] ruled that
where there was a valid ground to dismiss an employee but
there was non-observance of due process x x x only a
sanction must be imposed upon the employer x x x and that
the NLRC erred when it awarded separation pay x x x.
In Reta vs. NLRC, et al.,[22] the award was raised to
P10,000.00 considering that petitioner was given his walking
papers and forced to leave his ship in a foreign port x x x.
The said sum of P10,000.00 was considered fair, reasonable
and realistic in Alhambra Industries Inc. vs. NLRC et al.,[23] the
Court adding that termination of a worker for cause, even
without procedural due process, does not warrant

reinstatement, but the employer incurs liability for damages.

[24]

In striking down the claim for backwages and separation pay

where just cause is clearly shown, the Court, through Mr.
Justice Florenz D. Regalado in Cathedral School of Technology
vs. NLRC, et al., (supra), said:
x x x (B)ackwages are granted on the basis of equity for
earnings which a worker or employee has lost due to his
illegal dismissal, where private respondents dismissal is for
just cause, as is the case herein, there is no factual or legal
basis to order payment of backwages; otherwise, private
respondent would be unjustly enriching herself at the
expense of petitioners. Where the employees dismissal was
for a just cause, it would be neither fair nor just to allow the
employee to recover something he has not earned or could
not have earned.
Neither can there be an award for separation pay. In
Cosmopolitan Funeral Homes, Inc. vs. Maalat, et al., we
reiterated the categorical abandonment of the doctrine that
employees dismissed for cause are entitled to separation pay
on the ground of social and compassionate justice. x x x
(citations omitted.)
In the instant case, following the jurisprudence firmly
established in the aforecited cases, she is entitled to
indemnity of P1,000.00.
The Third Issue:
Due Process at the Labor Arbiters Forum
Petitioners maintained that they were denied due process
when the Labor Arbiter considered the case submitted for

resolution notwithstanding the fact that petitioners had

manifested their intention to present additional evidence.
We do not agree.
Petitioners first asked to be allowed to present additional
evidence at the hearing on June 9, 1992 but they manifested
that the documents they intended to present were not then
available. The Labor Arbiter allowed petitioners to present
the documents at the next hearing, July 7, 1994. As that next
hearing day was declared a special non-working holiday, the
case was reset to August 4, 1992. Inasmuch as the counsel
for petitioners had to attend to another urgent matter on
August 4, 1992, he failed to appear at the hearing, although
he filed a motion for postponement. The Labor Arbiter denied
the motion and issued an order considering the case as
submitted for resolution. On motion for reconsideration of
petitioners, the Labor Arbiter reset the case for the reception
of additional evidence on October 30, 1992. Petitioners again
failed to appear on said date, prompting the Labor Arbiter to
consider the case submitted for resolution.
Under the foregoing circumstances we cannot say that the
Labor Arbiter abused his discretion in considering the case
submitted for resolution on October 30, 1992. There is no
denial of due process where the party was given an
opportunity to present his case, which he did not take
advantage of.
That being the case, the claim of private respondent for
thirteenth month pay (P16,083.32), overtime pay
(P21,977.56), and unpaid salary (P31,166.66) stands
unrebutted.
Refutation of Mr. Justice Punos Dissent

The dissenting opinion of Mr. Justice Reynato S. Puno

contends that there is substantial evidence on record to
justify the factual finding of the Arbiter and the NLRC, and
thus faults the majority with a deviation from the age-old rule
that we accord the highest consideration to the factual
findings of labor arbiters especially when they are affirmed
by the NLRC.
There is no such deviation. The labor tribunals, as stated
earlier, found the private respondents dismissal unjustified
because the complainant had shown to Our satisfaction that
in the questioned transactions, she never defrauded the
company as the monies so defrayed were used to settle
various corporate accounts x x x[25] and none of such monies
went to her private pocket. This is correct and if that is all
that private respondent was faulted with, we would have
supported the tribunal a quo all the way. But, to repeat, we
are not finding her guilty of any dishonesty. We find that her
ill-considered, imprudent and precipitate acts of misusing the
very limited cash of the company, in violation of her inherent
duties as Comptroller/Finance Officer and of the specific
instructions of top management caused the near collapse of
the company. We are not reversing the factual findings that
private respondent was NOT guilty of any fraud. But based on
the facts as found by the arbiter and the respondent
Commission and borne out by the records, viz., (a)
petitioners position paper before the labor arbiter, (b)
affidavit of witness Renato Unson, (c) admissions of private
respondent during her testimony before the labor arbiter,
and (d) pertinent allegations in the petition before us, we
conclude that there is more than sufficient basis for the
companys loss of trust and confidence in private
respondent. Even Mr. Justice Puno concedes that (and we
quote him) there is no doubt that private respondent entered
on the blank checks amounts in excess of what had been
specified in the cash vouchers and she also made payments

to creditors other than those named in said vouchers. This

critical fact, conceded by our esteemed colleague, was
altogether ignored by the respondent Commission and the
arbiter. In short, we used the same facts brought out before
the lower tribunals in arriving at our conclusion of law a
conclusion such tribunals ought to have made also.
Our dissenting colleague also maintains that private
respondent had authority to make the above-described
alterations in the checks and in paying creditors other than
those named in the vouchers, in the absence of specific
instructions. His contention lacks basis.Such instructions,
aside from having been presented in petitioners position
paper before the arbiter as well as through the testimony of
witness Renato Unson, were also expressly admitted by
respondent Molina in her testimony as quoted in the dissent
when she produced her guideline 8 pages long on how the 79
checks, 16 blank checks and 63 with amounts were to be
spent/used.
And even assuming arguendo that there were no specific
written instructions, still, Molina was not a mere clerk but a
high corporate officer whose primary and usual duty is/was to
control corporate funds. While in hindsight it is easy to blame
petitioners for not documenting their instructions as insisted
by the dissent, it is however not difficult to understand that
ordinary business activities are performed in the normal
course without anticipation nor foreknowledge of litigation,
often with dispatch and usually with a minimum of
documentation. Considering that the matter of paying off
creditors subject to the constraints of the companys available
funds is a fairly routine business activity and part and parcel
of the normal job functions of a comptroller or finance officer,
and considering further that blank checks and supporting
vouchers which were all in writing had been prepared in
advance, specific detailed written instructions on what to do

with them would have been appropriate only for a nonthinking clerk and would have been unusual in fact, even
insulting for such comptroller-finance officer. But the
immutable fact is that such instructions were in fact
documented. And that notwithstanding, respondent Molina
still acted imprudently and contrary to those instructions.
Mr. Justice Puno also argues that there is no evidence to
support petitioners claims of bouncing checks as a result of
Molinas acts. But the majoritys ruling is NOT based at all on
such claims of bouncing checks, but on the precipitate acts of
the comptroller which jeopardized the cash flow of the
company. Where a companys current cash resources are not
enough to pay off all current liabilities and obligations, it is
the fundamental role of a comptroller/finance officer, even in
the total absence of specific instructions, to allocate available
funds to the most critical and immediate needs and to see to
it that there are funds left over to enable the company to
continue operations. Where available funds are not sufficient
to meet all obligations, it is a most basic rule in management
to adhere to an order of priorities in the settlement of
accounts. In such situation, payment of lower-priority
obligations must necessarily be postponed. For instance,
paying office rentals in advance is not objectionable per se,
since such obligation must be paid anyway. But where such
advance payment prevents the company from discharging
more pressing obligations like payment of wages, it is
precipitate and ill-considered. And where the actuations of a
comptroller/finance officer, instead of keeping the company
afloat, almost shipwrecks it upon the shoals of illiquidity and
bankruptcy, there is certainly a cause for loss of trust and
confidence in the ability and judgment of said
comptroller/finance officer.
Lastly, we pass sub silencio Mr. Justice Punos submission for
the Court to re-examine the NLRCs ruling on strained

relations. In view of our holding that there was just cause for
the dismissal, such NLRC ruling is now clearly irrelevant in
this Decision.
Summation
IN SUM, we rule that the dismissal of private respondent had
substantial basis. But because petitioners have failed to show
strict observance of due process they should, in accordance
with prevailing jurisprudence, pay indemnity of P1,000.00. In
addition, they should also pay private respondent the
unrebutted claims for thirteenth month pay, overtime pay
and unpaid salary. So too, we delete the award of moral
damages and attorneys fees in the absence of proof of bad
faith and malice on the part of petitioners.
WHEREFORE, the petition is partially GRANTED. The
dismissal of private respondent is deemed with just
cause. The assailed Resolution is hereby SET ASIDE and
ANNULLED. Instead, petitioners are ordered to pay to private
respondent the following sums,viz., (a) indemnity of
P1,000.00, (b) thirteenth month pay of P16,083.32, (c)
overtime pay of P21,977.56 and (d) unpaid salary of
P31,166.66.
SO ORDERED.

PHILIPPINE SAVINGS BANK, Petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION and VICTORIA T.
CENTENO, Respondents.
.
DECISION

MENDOZA, J.:
This is a petition for certiorari to annul the decision of the
National Labor Relations Commission in NLRC Case No. RB-IV2-1554-85, affirming the decision of the Labor Arbiter, which
found petitioner guilty of illegal dismissal, and the resolution
of the NLRC denying reconsideration.
The facts are as follows:
Private respondent Victoria T. Centeno started, as a bank
teller of petitioner Philippine Savings Bank, onNovember 3,
1965. Through the years she was promoted, becoming
on February 4, 1985, assistant cashier of petitioners Taytay
branch, at a salary of P2,672.00 a month.
From September 17, 1984 to November 15, 1984, private
respondent was acting branch cashier, substituting for Mrs.
Victoria Ubaa, who had gone on maternity leave. As acting
branch cashier, private respondent was in charge of the cash
in the vault and the preparation of the daily cash proof sheet,
which was a daily record of the cash in the vault and was
used as basis in determining the starting balance on the next
banking day.
On November 16, 1984, Mrs. Victoria Ubaa reported back to
work. Before turning over the cash to Mrs. Ubaa, private
respondent Centeno deposited P356,400.00 in the
Metropolitan Bank and Trust Co. (Metrobank). However, what
appeared as amount deposited in the November 16, 1984
cash proof and batch sheets of the cashier and clearing clerk,
was P371,400.00, and not P356,400.00 as shown in the
Metrobank passbook. Petitioner later charged that private
respondent falsified the deposit slip and made it appear that
she had deposited P371,400.00 when actually she had
deposited only P356,400.00.

On December 18, 1984, the branch accounting clerk, Lolita

Oliveros, discovered a discrepancy between the cash deposit
recorded (P371,400.00) in the cash proof and batch sheets
and the deposit actually made (P356,400.00) as reflected in
the Metrobank passbook. She called the attention of the
clearing clerk, Alberto C. Jose, to the matter. They reviewed
the records and found that what had been attached to the
debit ticket of Jose was a deposit slip for P356,400.00, and
not for P371,400.00.
An audit team reviewed the account of the branch and found
a P15,000.00 shortage incurred onNovember 16, 1984, the
day private respondent turned over her accountability to Mrs.
Ubaa after the latters maternity leave.
A committee was formed to investigate the shortage. Private
respondent, the branch manager, Eladio C. Laurena, the
cashier, Victoria N. Ubaa, the clearing clerk, Alberto C. Jose,
and two other employees were called to the investigation.
The committee found private respondent accountable for the
shortage. 1Hence, on January 7, 1985, private respondent
was given a memorandum which stated:
In connection with the shortage of P15,000.00 at Taytay
Branch which has been recently discovered by the Auditing
Department which shortage appears to have been
deliberately perpetuated through falsifications of various
documents, all of which appear to have been done by you,
you are hereby required to submit your explanation within
seventy two (72) hours from receipt of this memo why no
administrative and/or disciplinary action shall be taken
against you.
In the meantime, you are hereby preventively suspended for
a period of thirty (30) days effectiveJanuary 8, 1985.
(Emphasis added)

The manager, cashier, clearing clerk and a teller, were also

given "show-cause" memoranda, but only private respondent
was placed under preventive suspension.
All those required to show cause filed their respective
answers, except private respondent. Instead she requested
the banks vice-president, Antonio Viray, on January 15, 1985,
to give her until January 18, 1985 within which to file her
answer on the ground that she needed to consult her lawyer.
Her request was granted but private respondent nonetheless
failed to answer the charges against her.
On February 4, 1985, private respondent was dismissed by
the bank. The memorandum to her read:
Memorandum
To : MS. VICTORIA T. CENTENO
Assistant Cashier
Taytay Branch
* * * * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * *
This is in connection with the shortage of P15,000.00 at
Taytay Branch which was incurred while you were in charge
of the vault. Immediately after the discovery of the shortage,
through the memorandum of the undersigned dated January
7, 1985 addressed to you, we required you to explain within
seventy two (72) hours from receipt of said memo why no
administrative and/or disciplinary action should be taken
against you. Despite the lapse of the extension period you
requested within which to submit your explanation, and up
this date, you have not submitted your explanation.

After carefully evaluating the evidence presented and

considering your failure to explain the shortage which
tantamounts to admission of guilt, we have no alternative but
to conclude, as we hereby conclude, that you were the one
who misappropriated the shortage of P15,000.00. You have
therefore forfeited the confidence that the Bank has reposed
on you as an officer.
IN VIEW OF THE FOREGOING, Management hereby dismisses
you FOR CAUSE effective immediately with forfeiture of all
benefits. The Bank reserves the right to take such actions it
may deem necessary for the recovery of the P15,000.00.
(Emphasis added)
Private respondent sued petitioner for illegal dismissal before
the Labor Arbiter. Aside from claiming that her dismissal was
without basis, she claimed that she was denied due process
because she had not been informed of the specific acts for
which she was dismissed. She claimed that during her 19
years of service in petitioner bank, she never "[played] fast
and loose with bank funds."
Petitioner alleged that private respondent was dismissed for
loss of trust and confidence as a result of the shortage,
which, according to petitioner, she tried to conceal by
falsifying the banks cash proof sheet and the tellers vale.
Petitioner claimed that private respondent was accorded due
process prior to her dismissal.
On September 15, 1988, the Labor Arbiter found petitioner
guilty of having illegally dismissed private respondent and of
denying her due process. Accordingly the Labor Arbiter
ordered:
WHEREFORE, responsive to the foregoing, judgment is as it is
hereby entered in favor of complainant and against
respondent:

1. Considering the termination of complainant illegal;

2. Ordering respondent to reinstate complainant to her
former position or equivalent position with full backwages
from the time of her unlawful termination and until actually
reinstated without loss of seniority rights and other privileges
appertaining to her position;
3. Ordering respondent to pay complainant moral and
exemplary damages in the amounts of Fifty Thousand Pesos
(P50,000.00) and Ten Thousand Pesos (P10,000.00),
respectively; and,
4. Ordering respondent to pay complainant attorneys fees
equivalent to ten (10%) per cent of the total award.

Hence this petition. Petitioner claims that the NLRC

gravely abused its discretion in:
a) holding that private respondent Centeno was
denied due process of law prior to her dismissal; and
b) failing to fully discuss all the six (6) assigned errors
raised by the petitioner in its appeal by ignoring:
1) the valid ground wherein petitioner based its
termination of the service of private respondent, and
that is loss of confidence;
2) the specific circumstances that led the petitioner to
lose its trust and confidence on private respondent;
and

SO ORDERED.
On appeal, the NLRC affirmed with modification thus:
PREMISES CONSIDERED, the Decision of September
15, 1988 is hereby MODIFIED with the deletion of
awards representing moral/exemplary damages and
attorneys fees. However, the award of backwages and
other benefits shall not exceed three (3) years as laid
down by the Supreme Court. Respondent is hereby
directed to pay complainant backwages in the amount
of NINETY SIX THOUSAND ONE HUNDRED NINETY TWO
PESOS (P96,192.00) and/or other benefits due. The
other findings stand AFFIRMED.
SO ORDERED.
Both parties moved for reconsideration, but their
motions were denied by the NLRC in its resolution
on July 8, 1993.

3) the applicable settled law and jurisprudence that

the private respondent, having been validly
dismissed, is not entitled to reinstatement and
backwages.
First. Contrary to the finding of the Labor Arbiter and
the NLRC, private respondent was notified of the
charge against her through a memorandum sent to
her on January 7, 1985. Indeed she knew the reason
for the "show-cause" order because before that, she
and other employees had been asked to attend an
investigation. The law requires that the employer
must furnish the worker sought to be dismissed with
two (2) written notices before termination may be
validly effected: first, a notice apprising the employee
of the particular acts or omission for which his
dismissal is sought and, second, a subsequent notice
informing the employee of the decision to dismiss
him. 2 In accordance with this requirement, private

respondent was given the required notices, on January

7, 1985 and then on February 4, 1985.

much to require petitioner to hear private respondent

before the latter can be dismissed.

The NLRC ruled that an investigation should have

been conducted prior to private respondents
dismissal. As already noted, however, private
respondent was informed of the charges against her
and given an opportunity to answer the charges. Upon
her request, she was given until January 18, 1985
within which to file her answer. But she failed to file
her answer. Of course she later tried to explain that
she did not find it necessary to do so because "there
was, after all, no ground for any action against
[her] . . . and [she] did not feel obligated, therefore,
to dispute the action which was baseless and
unfounded." 3Furthermore, she claimed she thought
"the Committee had prejudged the case against
her."4crlwvirtualibrry

Happily, no liability was imposed on petitioner by

either the Labor Arbiter or the NLRC despite the
finding that petitioner had denied private respondent
due process. Accordingly, all that we need to do in this
case is to record our finding that petitioner fully
complied with its duty under the law to accord due
process to private respondent.

Whatever her reason might have been, the fact is that

petitioner waived the right to be heard in an
investigation. Due process is not violated where a
person is not heard because he has chosen not to give
his side of the case. If he chooses to be silent when he
has a right to speak, he cannot later be heard to
complain that he was silenced. 5 Private respondent
having chosen not to answer, should not be allowed to
turn the tables on her employer and claim that she
was denied due process. Indeed, the requirement of
due process is satisfied when a fair and reasonable
opportunity to explain his side of the controversy is
afforded the party. A formal or trial-type hearing is
not at all times and in all circumstances essential,
especially when the employee chooses not to
speak. 6 Under the circumstance of this case, it is too

Second. Petitioner also claims that the NLRC gravely

abused its discretion in not passing upon three (3)
errors assigned by it on appeal.
We find the contention without merit. In affirming the
Labor Arbiter, the NLRC found the evidence supporting
the Labor Arbiters factual findings to be substantial
and for this reason apparently found it unnecessary to
make a separate discussion. Factual findings of
administrative agencies are generally accorded
respect and even finality in this Court if they are
supported by substantial
evidence. 7crlwvirtualibrry
Petitioner makes a "reconstruction" of the facts which,
according to it, shows how the shortage incurred on
November 16, 1984 was concealed. The
"reconstruction" is as follows:
A) During the turn-over of the cash in vault by Mrs.
Victoria Centeno to Mrs. Victoria Ubaa, after counting
the cash in vault, no formal recording of how much
cash was actually turned over was done. However,
from the Cash Proof in November 16, 1984, it could be
reconstructed and determined whether there is a
shortage or not by the following figures:

Cash Balance, Nov. 15 84 P589,572.02

[P 46,202.64] [P333,402.64]

Deduct: Cash Vales of

CORRECT CASH BALANCE

Tellers at start of

November 16, 1984 P503,695.14

banking day

Cash Balance per Cash

Pico of Teller No. 1 P19,207.06

Proof November 16, 1984 P488,695.14

Pico of Teller No. 2 P21,666.21

SHORTAGE P 15,000.00

Pico of Teller No. 3 P21,995.25 [P 62,868.52]

B) The above P15,000.00 shortage was covered up in

two (2) ways or stages:

Balance: Paper Bills & Coins P536,703.50

Deduct: Deposit with Metrobank P356,400.00
Balance that should have been
turned over P170,303.50
Additional Vale-Coins-Teller 3 P 11.00
Balance P170,292.50
Add: Sorted Paper Bills turned
over by the tellers to the
cashiers:
Teller No. 1 P100,000.00
Teller No. 1 P 40,000.00
Teller No. 2 P147,200.00

First: In the original or untampered cash proof, the

deposit to Metrobank was written originally as
P371,400.00 instead of the actual deposit of
P356,400.00. The writing of the P371,400.00 deposit
to Metrobank was based on a deposit slip for
P371,400.00 given to Mrs. Victoria Ubaa by Mrs.
Victoria Centeno. The same deposit slip for
P371,400.00 was also given to Mr. Alberto Jose, the
Clearing clerk, who used the same to enter the
P371,400.00 deposit with Metrobank in the Batch
Sheet, as well as in the preparation of the Debit and
Credit Tickets. The P15,000.00 shortage, which is the
difference between P371,400.00 and P356,400.00 was
therefore concealed in the P371,400.00 deposit to
Metrobank, which actually and truly was for
P356,400.00 only.
Second: When the genuine deposit slip to Metrobank
for P356,400.00 was placed in the Cash Proof file and
the spurious deposit slip for P371,400.00 was
removed by whoever was responsible for the
shortage, the cashproof will NOT BE BALANCED, so

that the second step was to ADD P15,000.00 to the

P11.00 cash vale of Teller No. 3 to make it appear as if
the vale was for P15,011.00. In this way, the cash
proof will again be balanced, since the decrease of
P15,000.00 in deposit with Metrobank from
P371,400.00 to P356,400.00 was shifted to the
P15,011.00 vale which was actually P11.00 only.
Though the P371,400.00 deposit slip is now missing,
the insertion of the P15,000.00 in the vale of Teller
No. 3 is very apparent, since the duplicate vale in the
possession of the Teller has not been tampered and
remains as P11.00. Incidentally, it had not missed the
petitioners attention also that, by force of habit, Teller
No. 3 was accustomed to placing a "hyphen" across
the centavo figures in her Tellers vales when there
was no centavo entry thereon; the added figures
amounting to P15,000.00 on the other hand did not
contain such a "hyphen" in the centavo of the vale,
leading us to believe that the addition of P15,000.00
could not have been made by the Teller concerned".
(Affidavit of Norberto Robleza dated 09 October 1985,
pp. 4-6)
Loss of trust and confidence is a cause for dismissing
an employee who is entrusted with fiducial matters, or
with the custody, handling or care and protection of
the employers property. 8 There is no dispute about
this. But the employer must clearly and convincingly
establish the facts and incidents upon which its loss of
confidence in the employee may be fairly made to
rest, otherwise, the dismissal will be rendered
illegal. 9crlwvirtualibrry
Petitioners claim is that although private respondent
deposited only P356,400.00 in the Metrobank, she
filled up a deposit slip showing the deposit to be

P371,400.00 and this amount was recorded in the

cash proof sheet and batch sheet for November 16,
1984. But there is no evidence to show this. The
falsified deposit slip allegedly made by private
respondent was not presented. Petitioner claimed it
was missing. But as private respondent testified the
amount of P356,400.00 which she deposited was
recorded in the Metrobank passbook. She gave this
passbook to Mrs. Ubaa on November 16, 1984. Yet the
supposed discrepancy was not noticed by Mrs. Ubaa in
preparing the cash proof sheet and the debit sheet
who recorded P371,400.00 as having been deposited
in Metrobank. Petitioners allegation that Ms. Centeno
misled the cashier and the clearing clerk into
recording P371,400.00 cannot therefore be given
credence.
Indeed, private respondent denied that she gave Mrs.
Ubaa a falsified deposit slip showing a deposit of
P371,400.00 because after the Metrobank picked up
the deposit she made, private respondent handed to
Mrs. Ubaa the deposit slip of P356,400.00 together
with the cash proof sheet of November 15, 1984 and
the key to the vault. 10 Besides, Mrs. Ubaa as already
stated, had the passbook. She could not have failed to
notice that the amount deposited was P356,400.00
and not P371,400.00 as the bank now claims it was
made to understand on November 16, 1984.
Petitioner claims that the party responsible for
concealing the shortage altered the tellers vale and
made it appear that the vale of Teller 3 (Antonette
Reyes) was P15,011.00 when the fact was that it was
only for P11.00 as shown in the duplicate vale in the
possession of Reyes. This claim is subject to two
objections. First, it was not shown that private

respondent had custody of the vale or, if she had

access to the document, that private respondent was
the only one who had such access to it, so as to make
her the only possible author of the alteration. Second,
the fact that the altered vale of Teller 3 in the
possession of the bank was not in the tellers
customary way of recording does not necessarily
mean that the vale she had was the authentic vale
while that given to the clearing clerk was falsified.
She could have altered her usual practice of
recording.
It is noteworthy that the shortage was incurred on the
day (November 16, 1984) the branch regular cashier,
Mrs. Victoria Ubaa, reported for work. It was she in
fact who prepared the cash proof sheet. The alteration
in the cash proof sheet on that day could not have
been made by private respondent. As an NBI
handwriting expert stated under cross examination:
WITNESS
A The supplemental report is also an answer to the
first. The requested analysis should center on the
handwritings of the two (2) persons, Mrs. Victoria
Ubaa and Mrs. Victoria Centeno. In my first report
dated December 3, 1985 my findings are as follows:
The no. 1 states that there are existing fundamental
differences between the questioned handwritings or
figures appearing on the questioned document and
the standard handwritings/figures appearing on the
standard documents marked as "SV-1" thru "SV-9" and
those standards were the handwritings of one Victoria
Ubaa. The result of which is that the questioned
handwritings and the standard handwritings were not
written by one and the same person. And then in
statement that the submitted standards, signatures

under the specimen named Victoria Centeno any

findings whether Victoria Centeno or not is the writer
of the questioned handwritings, so I made the
supplemental report to make a definite answer that all
the figures and handwritings appearing on the cash
proof sheet which is being questioned were not
written by Victoria Centeno to answer this phrase.
(Emphasis supplied)
Furthermore, the cash proof sheet and the vale were
kept in the banks vault, the key to which was held
only by Mrs. Ubaa, as cashier of the bank. 11 Any
alteration in the documents by private respondent or
by any party could, therefore, have easily been
discovered by the cashier.
Petitioner further claims that private respondents
accounting method did not correctly reflect the bills
from previous banking days and that taking into
account all the entries, the amount not reflected was
equivalent to the shortage. This contention is without
merit. While the accounting method adopted by
private respondent was different from the method
used by Mrs. Ubaa, private respondents method was
nonetheless an acceptable bank procedure according
to Mr. Robleza, petitioners own witness. 12 The method
adopted by private respondent was accurate,
otherwise it could not have been allowed by the bank.
Indeed private respondent was acting cashier for two
months, from September 17, 1984 to November 15,
1984. During that period no shortage was ever
reported. At the time the cash in the vault was turned
over to Mrs. Ubaa, it was counted and the failure to
record its amount at that time can only mean one
thing: that the cash turned over to Mrs. Ubaa

corresponded with the amount recorded in the cash

proof sheet on November 15, 1984.

DECISION
PANGANIBAN, J.:

Private respondent had faithfully served petitioner

bank for 19 years. Starting as a bank teller, she
steadily rose to the position of assistant branch
cashier. Considering this fact, petitioner should have
been more careful in determining liability for the loss
rather than merely relying on what it calls
circumstantial evidence of guilt. The fact that only
private respondent did not answer the charge when
required in the memorandum of petitioner is not an
indication of her guilt. While we recognize that
petitioner has a wide latitude in dismissing a bank
officer, nonetheless, the evidence on which it acts
must be substantial.
As the dismissal of private respondent is illegal, she is
entitled to reinstatement to her former position
without loss of seniority rights and to the payment to
her of backwages. 13 The NLRC correctly limited the
award of backwages to three years, consistent with
the rule at the time of private respondents
dismissal. 14 R.A. No. 6715, which amended Art. 279 of
the Labor Code, awarding full backwages to illegally
dismissed employees, cannot be retroactively applied
to dismissals taking place before its effectivity on
March 21, 1989. 15crlwvirtualibrry
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
RAYCOR AIRCONTROL SYSTEMS, INC., petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION AND
ROLANDO LAYA, et al., respondents.

Were private respondents, employed by petitioner in its

business of installing airconditioning systems in buildings,
project employees or regular employees? And were their
dismissals "due to (petitioner's) present business status" and
effective the day following receipt of notice legal? Where
both the petitioner and the respondents fail to present
sufficient and convincing evidence to prove their respective
claims, how should the case be decided?
This Court answers the foregoing questions in resolving this
petition for certiorari assailing the
Decision[1] promulgated November 29, 1993 by the National
Labor Relations Commission,[2] which set aside and reversed
the decision of the labor arbiter [3] dated 22 January 1993, as
well as the subsequent order of respondent Commission
denying petitioner's motion for reconsideration.
The Facts
Petitioner's sole line of business is installing airconditioning
systems in the buildings of its clients. In connection with such
installation work, petitioner hired private respondents
Roberto Fulgencio, Rolando Laya, Florencio Espina, Romulo
Magpili, Ramil Hernandez, Wilfredo Brun, Eduardo Reyes,
Crisostomo Donompili, Angelito Realingo, Hernan Delima,
Jaime Calipayan, Jorge Cipriano, Carlito de Guzman, Susano
Atienza, and Gerardo de Guzman, who worked in various
capacities as tinsmith, leadman, aircon mechanic, installer,
welder and painter. Private respondents insist that they had
been regular employees all along, but petitioner maintains
that they were project employees who were assigned to work
on specific projects of petitioner, and that the nature of
petitioner's business -- mere installation (not manufacturing)

of aircon systems and equipment in buildings of its clients -prevented petitioner from hiring private respondents as
regular employees. As found by the labor arbiter, their
average length of service with petitioner exceeded one year,
with some ranging from two to six years (but private
respondents claim much longer tenures, some allegedly
exceeding ten years).
In 1991, private respondent Laya and fourteen other
employees of petitioner filed NLRC NCR Case No. 00-0302080-92 for their "regularization". This case, was dismissed
on May 20, 1992 for want of cause of action.[4]
On different dates in 1992, they were served with uniformlyworded notices of "Termination of Employment" by petitioner
"due to our present business status", which terminations
were to be effective the day following the date of receipt of
the notices. Private respondents felt they were given their
walking papers after they refused to sign a "Contract
Employment" providing for, among others, a fixed period of
employment which "automatically terminates without
necessity of further notice" or even earlier at petitioner's sole
discretion.
Because of the termination, private respondents filed three
cases of illegal dismissal against petitioner, alleging that the
reason given for the termination of their employment was not
one of the valid grounds therefor under the Labor Code. They
also claimed that the termination was without benefit of due
process.
The three separate cases filed by private respondents
against petitioner, docketed as NLRC-NCR 00-03-05930-92,
NLRC NCR 00-05-02789-92, and NLRC NCR 00-07-03699-92,
were subsequently consolidated. The parties were given
opportunity to file their respective memoranda and other
supplemental pleadings before the labor arbiter.

On January 22, 1993, the Labor Arbiter issued his

decision dismissing the complaints for lack of
merit. He reasoned that the evidence showed that the
individual complainants (private respondents) were project
employees within the meaning of Policy Instructions No. 20
(series of 1977)[5] of the Department of Labor and
Employment, having been assigned to work on specific
projects involving the installation of air-conditioning units as
covered by contracts between their employer and the latter's
clients. Necessarily, the installation of airconditioning
systems "must come to a halt as projects come and go", and
"(o)f consequence, the [petitioner] cannot hire workers in
perpetuity. And as project employees, private respondents
would not be entitled to termination pay, separation pay,
holiday premium pay, etc.; and neither is the employer
required to secure a clearance from the Secretary of Labor in
connection with such termination.
Private respondents appealed to the respondent NLRC, which
in its November 29, 1993 Decision reversed the arbiter and
found private respondents to have been regular employees
illegally dismissed. The respondent Commission made the
following four-paragraph disquisition:
"From the above rules, it can easily be- gleaned that
complainants belong to a work pool from which the
respondent company drew its manpower requirements. This
is buttressed by the fact that many of the complainants have
been employed for long periods of time already.
We doubt respondent's assertion that complainants were
really assigned to different projects. The 'Contract
Employment' which it submitted (see pp. 32-38, record)
purporting to show particular projects are not reliable nay
even appears to have been contrived. The names of the
projects clearly appear to have been recently typewritten. In
the 'Contract Employment' submitted by complainants (see

p. 65, record), no such name of project appears. Verily,

complainants were non-project employees.
Anent the dismissal of complainants, suffice it to state that
the same was capricious and whimsical as shown by the
vague reason proffered by respondent for said dismissal
which is 'due to our present business states' (should read
'status') is undoubtedly not one of the valid causes for
termination of an employment. We are thus inclined to give
credence to complainants' allegation that they were eased
out of work for their refusal to sign the one-sided 'Contract
Employment.'
The fact that complainants were dismissed merely to spite
them is made more manifest by respondent's failure to make
a report of dismissal or secure a clearance from the
Department of Labor (see pp. 196 and 197, record) as
required under P.I. No. 20 and their publication of an
advertisement for replacements for the same positions held
by complainants (see p. 298, record). Even assuming that
complainants were project employees, their unceremonious
dismissal coupled with the attempt to replace them via the
newspaper advertisement entitles them to reinstatement
with backwages under P.I., No. 20."
The dispositive portion followed immediately and read:
"WHEREFORE, the appealed Decision is hereby SET ASIDE
and a new one entered ordering respondent to:
1. Immediately reinstate complainants (private respondents)
to their former positions without loss of seniority rights and
privileges; and
2. Pay them full backwages from the time they were
dismissed up to the time they are actually reinstated."

Petitioner's motion for reconsideration was denied by public

respondent on February 23, 1994 for lack of merit. Hence,
this petition.
Issues
Petitioner charges public respondent NLRC with grave abuse
of discretion in finding private respondents to have been nonproject employees and illegally dismissed, and in ordering
their reinstatement with full backwages.
For clarity's sake, let us re-state the pivotal questions
involved in the instant case as follows: whether private
respondents were project employees or regular (non-project)
employees, and whether or not they were legally dismissed.
In support of its petition, petitioner reiterates the same points
it raised before the tribunals below: that it is engaged solely
in the business of installation of airconditioning units or
systems in the buildings of its clients. It has no permanent
clients with continuous projects where its workers could be
assigned; neither is it a manufacturing firm. Most of its
projects last from two to three months. (The foregoing
matters were never controverted by private respondents.)
Thus, for petitioner, work is "not done in perpetuity but
necessarily comes to a halt when the installation of
airconditioning units is completed."
On the basis of the foregoing, petitioner asserts that it could
not have hired private respondents as anything other than
project employees. It further insists that "(a)t the incipience
of hiring, private respondents were appraised (sic) that their
work consisted only in the installation of airconditioning units
and that as soon as the installation is completed, their work
ceases and that they have to wait for another installation
projects (sic)." In other words, their work was co-terminous
with the duration of the project, and was not continuous or

uninterrupted as claimed by them. Petitioner also claims that

the private respondents signed project contracts of
employment indicating the names of the projects or buildings
they are working on. And when between projects, there
project employees were free to work elsewhere with other
establishments.
Private respondents controverted these assertions of
petitioner, claiming that they had worked continuously for
petitioner for several years, some of them as long as ten
years, and thus, by operation of law had become regular
employees.
The Court's Ruling
Ordinarily, the findings made by the NLRC are entitled to
great respect and are even clothed with finality and deemed
binding on this Court, except that when such findings are
contrary to those of the labor arbiter, this Court may choose
to re-examine the same, as we hereby do in this case nor.
The First Issue: Project Employees or Regular
Employees?
An Unfounded Conclusion
We scoured the assailed Decision for any trace of
arbitrariness, capriciousness or grave abuse of discretion,
and noted that the respondent Commission first cited the
facts of the case, then quoted part of the arbiter's
disquisition along with relevant portions of Policy Instructions
No. 20, after which it immediately leapt to the conclusion
that "(F)rom the above rules, it can easily be gleaned that
complainants belong to a work pool from which the
respondent company drew its manpower requirements. This
is buttressed by the fact that many of the complainants have
been employed for long periods of time

already." (underscoring supplied) By reason of such "finding",

respondent NLRC concluded that private respondents
were regular (not project) employees, but failed to indicate
the basis for such finding and conclusion. For our part, we
combed the Decision in search of such basis. However,
repeated scrutiny of the provisions of Policy Instructions No.
20 pertaining to work pools merely raised further questions.
"Members of a work pool from which a construction company
draws its project employees, if considered employees of the
construction company while in the work pool, are non-project
employees or employees for an idefinite period. If they are
employed in a particular project, the completion of the
project or of any phase thereof will not mean severance of
employer-employee relationship.
However, if the workers in the workpool are free to leave
anytime and offer their services to other employers then they
are project employees employed by a construction company
in a particular project or in a phase thereof."
A careful reading of the aforequoted and preceding
provisions establishes the fact that project employees may
or may not be members of a workpool, (that is, the
employer may or may not have formed a work pool at
all), and in turn, members of a work pool could be
either project employees or regular employees. In the
instant case, respondent NLRC did not indicate how private
respondents came to be considered members of a work pool
as distinguished from ordinary (non-work pool) employees. It
did not establish that a work pool existed in the first
place. Neither did it make any finding as to whether the
herein private respondents were indeed free to leave anytime
and offer their services to other employers, as vigorously
contended by petitioner, despite the fact that such a
determination would have been critical in defining the
precise nature of private respondents' employment. Clearly,

the NLRC's conclusion of regular employment has no factual

support and is thus unacceptable.
Conclusion Based on Unwarranted Assumption of Bad
Faith
Immediately thereafter, respondent Commission determined
-- without sufficient basis -- that complainants were nonproject employees. We quote:
"We doubt respondent's (petitioner's) assertion that
complainants (private respondents) were really assigned to
different projects. The "Contract Employment" which it
submitted (see pp. 32-38, record) purporting to show
particular pojects are not reliable nay even appears to have
been contrived. The names of the projects clearly appear to
have been recently typewritten. In the 'Contract
Employment' submitted by complainants (see p. 65, record),
no such name of project appears. Verily, complainants were
non-project employees." (underscoring supplied)
The basis for respondent NLRC's statement that the contracts
were contrived was the fact that the names of projects
clearly appeared to have been typed in only after the
contracts had been prepared. However, our examination of
the contracts (presented by petitioner as Annexes "A", "B",
"B-1", "C", "D", "E" and "F"[6] to its Position Paper dated July
30, 1992 filed with the labor arbiter) did not lead inexorably
to the conclusion that these were "contrived". Said Annexes
were photocopies of photocopies of the original "Contract
Employments",[7] and the names of projects had been typed
onto these photocopies, meaning that the originals of said
contracts probably did not indicate the project names. But
this alone did not automatically or necessarily mean that
petitioner had committed any falsehood or fraud, or had any
intent to deceive or impose upon the tribunals below,
because the names of the projects could have been

typed/filled in good faith, nunc pro tunc, in order to supply

the data which ought to have been indicated in the originals
at the time those were issued, but which for some reason or
other were omitted. In short, the names of projects could
have been filled in simply in order to make the contracts
speak the truth more clearly or completely. Notably, no
reason was advanced for not according the petitioner the
presumption of good faith. Respondent NLRC, then, made an
unwarranted assumption that bad faith and fraudulent intent
attended the filling in of the project names in said
Annexes. In any event, it can be easily and clearly
established with the use of the naked eye that the dates and
durations of the projects and/or work assignments had been
typed into the original contracts, and therefore, petitioner's
failure to indicate in the originals of the contracts the
name(s) of the project(s) to which private respondents were
assigned does not necessarily mean that they could not have
been project employees. (Incidentally, we should make
mention here that what is or is not stated in a contract does
not control nor change the Juridical nature of an employment
relationship since the same is determined and fixed by
law. As a matter of fact, we note that there is no requirement
in Policy Instructions No. 20 that project employees should be
issued written contracts of employment, let alone that a
written contract should indicate the name of the project to
which the employee concerned is being assigned.)
Statutory Basis for Determining Nature of
Employment
The parties and their respective counsel, as well as
respondent Commission and the Solicitor General, should
have re-read and carefully studied ALU-TUCP vs. National
Labor Relations Commission,[8] which is highly instructional
on this question:

"The law on the matter is Article 280 of the Labor Code which
reads in full:
'Article 280. Regular and Casual Employment -- The
provisions of the written agreement to the contrary
notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has
been fixed for a specific project or undertaking the
completion or termination of which has been determined at
the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and
the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in
which he is employed and his employment shall continue
while such activity exists.' xxx
xxxxxxxxx
x x x For, as is evident from the provisions of Article 280 of
the Labor Code, quoted earlier, the principal test for
determining whether particular employees are properly
characterized as 'project employees' as distinguished from
'regular employees,' is whether or not the 'project
employees' were assigned to carry out a 'specific project or
undertaking,' the duration (and scope) of which were
specified at the time the employees were engaged for that
project. (underscoring ours)

In the realm of business and industry, we note that 'project'

could refer to x x x a particular job or undertaking that is
within the regular or usual business of the employer
company, but which is distinct and separate, and identifiable
as such, from the other undertakings of the company. Such
job or undertaking begins and ends at determined or
determinable times. The typical example of this x x x type of
project is a particular construction job or project of a
construction company. A construction company ordinarily
carried out two or more discrete identifiable construction
projects: e.g., a twenty-five.story hotel in Makati; a
residential condominium building in Baguio City; and a
domestic air terminal in Iloilo City. Employees who are hired
for the carrying out of one of these separate projects, the
scope and duration of which has been determined and made
known to the employees at the time of employment, are
properly treated as 'project employees,' and their services
may be lawfully terminated at completion of the project."
The same decision goes on to say: [9]
"x x x The simple fact that the employment of petitioners as
project employees had gone beyond one (1) year, does not
detract from, or legally dissolve, their status as project
employees. The second paragraph of Article 280 of the Labor
Code, quoted above, providing that an employee who has
served for at least one (1) year, shall be considered a regular
employee, relates to casual employees, not to project
employees.
In the case of Mercado, Sr. vs. National Labor Relations
Commission (201 SCRA 332 [1991]), this Court ruled that the
proviso in the second paragraph of Article 280 relates only
to casual employees and is not applicable to those who fall
within the definition of said Article's first paragraph,
i.e.. project employees. x x x"

Incidentally, we should mention that both respondent

Commission and the Solicitor General were in error in
concluding based on private respondents' claimed length of
employment (allegedly for over ten years) that they were
regular employees. Sad to state, the Solicitor General in his
arguments tried to "force-fit" private respondents into the
"regular employee" category and completedly disregarded
the critical distinctions set forth in ALU-TUCP and earlier
cases.
Inconclusive Evidence
Based on the foregoing considerations, it is patent that, in
the instant case, there needs to be a finding as to whether or
not the duration and scope of the project or projects were
determined or specified and made known to herein private
respondents at the time of their engagement. The labor
arbiter tried to do this, relying heavily on the "Contract(s)
Employment" presented in petitioner's Annexes as well as on
private respondents' own Annex "A"[10] attached to their
Position Paper, and citing the fact that the said contracts of
employment indicated the duration of the projects to which
the private respondents had been assigned. He then held
that "(t)here is no denial that complainants were assigned to
work in these projects,"[11] and concluded that they were
indeed project employees.
But the arbiter completed ignored the fact that all the
"Contract(s) Employment" presented in evidence by both
petitioner and private respondents had been signed only by
petitioner's president and general manager, Luis F. Ortega,
but not by the employees concerned, who had precisely
refused to sign them. The said contracts therefore could in no
wise be deemed conclusive evidence. Thus, private
respondents faulted the labor arbiter for giving credence and
probative value to said contracts. Besides, they claimed, only
seven contracts in all were presented in evidence, pertaining

to seven individual employees, while there are fifteen

employees involved in the complaints. Moreover, these
contracts, purportedly issued either in July or December of
1991, except for one dated May 1992), were all one-shot
contracts of short duration, the longest being for about five
months. Now, inasmuch as petitioner had not denied nor
rebutted private respondents' allegations that they had each
worked several years for the petitioner, the obvious question
is, why didn't petitioner produce in evidence similar contracts
for all the other years that private respondents had worked
as project employees? To these points, petitioner offered no
explanation whatsoever.
Failure to Discharge Burden of Proof
For that matter, it seems self-evident to this Court that, even
if the contracts presented by petitioner had been signed by
the employees concerned, still, they would not constitute
conclusive proof of petitioner's claim. After all, in the usual
scheme of things, contract terms are normally dictated by
the employer and simply acceded to and accepted by the
employee, who may be desperate for work and therefore in
no position to bargain freely or negotiate terms to his liking.
In any event, petitioner in this case undoubtedly could have
presented additional evidence to buttress its claim. For
instance, petitioner could have presented copies of its
contracts with its clients, to show the time, duration and
scope of past installation projects.The data from these
contracts could then have been correlated to the data which
could be found in petitioner's payroll records for, let us say,
the past three years or so,[12] to show that private
respondents had been working intermittently as and when
they were assigned to said projects, and that their
compensation had been computed on the basis of such
work. But petitioner did not produce such additional

evidence, and we find that it failed to discharge its burden of

proof.
It is not so much that this Court cannot appreciate
petitioner's contentions about the nature of its business and
its inability to maintain a large workforce on its permanent
payroll. Private respondents have admitted that petitioner is
engaged only in the installation (not manufacture) of aircon
systems or units in buildings, and since such a line of
business would obviously be highly (if not wholly) dependent
on the availability of buildings or projects requiring such
installation services, which factor no businessman, no matter
how savvy, can accurately forecast from year to year, it can
be easily surmised that petitioner, aware that its revenues
and income would be unpredictable, would always try to keep
its overhead costs to a minimum, and would naturally want
to engage workers on a per-project or per-building basis only,
retaining very few employees (if any) on its permanent
payroll. It would also have been more than glad if its
employees found other employment elsewhere, in between
projects. To our mind, it appears rather unlikely that
petitioner would keep private respondents -- all fifteen of
them -- continuously on its permanent payroll for, say, ten or
twelve years, knowing fully well that there would be periods
(of uncertain duration) when no project can be had. To
illustrate, let us assume that private respondents (who were
each making about P118.00 to P119.50 per day in 1991)
were paid only P100.00 per day. If the fifteen were, as they
claimed, regular employees entitled to their wages
regardless of whether or not they were assigned to work on
any project, the overhead for their salaries alone -- computed
at P100.00/day for 30 days in a month -- would come to no
less than P45,000.00 a month, or P540,000.00 a year, not
counting 13th month pay, Christmas bonus, SSS/Medicare
premium payments, sick leaves and service incentives
leaves, and so forth. Even if petitioner may have been able to

afford such overhead costs, it certainly does not make

business sense for it or anyone else to do so, and is in every
sense contrary to human nature, not to mention common
business practice. On this score alone, we believe that
petitioner could have made out a strong case. Which is why
we have difficulty understanding its failure to present clear
and convincing evidence on this point, it being doctrinal that
in illegal dismissal cases, the employer always has the
burden of proof.[13]
Petitioner's problem of weak evidence was further
compounded by certain documentary evidence in the records
below which controverted petitioner's position, or, at the very
least, tended to confuse rather than clarify matters. For
instance, we noted that in their Memorandum of Appeal
dated February 17, 1993 filed with the respondent
Commission, herein private respondents had attached as
annexes thereto the following documents:
1. As Annex "B" thereof, a Certification dated January 28,
1992, signed by one Flora P. Perez, Administrative/Accountant
of Raycor, certifying that "x x x Mr. Roberto B. Fulgencio (one
of the private respondents) has been connected with the
undersigned corporation (Raycor) from August 22, 1986 to
May 18, 1991 and September 01, 1990 to January 25, 1992
as Aircon Installer";
2. As Annex "C" thereof, a Certification dated May 7, 1985,
signed by Luis F. Ortega, President and General Manager of
herein petitioner corporation, to the effect that "x x x Mr.
Jaime Calipayan (another one of the private respondents) has
been connected with the undersigned corporation from June
18, 1982 up to present as a Mechanical Installer ; and
3. As Annex "D" thereof, a Certification dated June 06, 1991,
likewise signed by Luis G. Ortega, president and general
manager of Raycor, certifying that "x x x Mr. Susano A.

Atienza (still another of the private respondents) has been

connected with the undersigned corporation from October
10, 1983 up to present as Aircon Mechanic/Technician".
Understandably, private respondents made big capital out of
these certifications. But, while petitioner failed utterly to offer
rebutting evidence, still and all, we are not prepared to
conclude on the basis of these certifications alone that
private respondents were indeed regular employees. First of
all, said certifications refer only to three out of the fifteen
private respondents, so what could be true of them may not
necessarily apply with respect to the other twelve. Moreover,
the certifications do not categorically state that the three
employees had been permanent employees of Raycor. In
other words, they do not necessarily overturn petitioner's
contention that private respondents were project employees,
since it is still possible to read the documents a saying that
the named employees were working as project employees
during the periods therein specified. This is especially so
since the said certifications were prepared by nonlawyers who in all likelihood were not aware of the potential
legal implications and ramifications of what were ostensibly
innocuous certifications. As held in one recent case, "x x x it
is however not difficult to understand that ordinary business
activities are performed in the normal course without
anticipation nor foreknowledge of litigation, often with
dispatch and usually with a minimum of documentation.
[14]
Nonetheless, all things considered, the certifications,
issued by petitioner itself, tend to put its claims in serious
doubt.
The situation was still further aggravated by the manner in
which petitioner dismissed private respondents. As found by
respondent Commission, the reason given for the dismissals,
i.e., "due to our present business status," is vague, to say the
least, and unarguably is not one of the valid or just causes

provided by law for termination of an employment, whatever

its classification. But more significantly -- if indeed private
respondents were project employees, there would have been
no need to terminate them by sending them notices of
termination, inasmuch as their employment ceases "as a
result of the completion of the project or any phase thereof in
which they are employed," per Policy Instruction No. 20
itself. Thus, if petitioner resorted to such dismissals, there is
the unavoidable inference that petitioner regarded the
private respondents as regular employees after all. But
again, this is inconclusive, since the notices of termination
were signed, and in all likelihood prepared, by the president
and general manager of petitioner, probably sans any legal
advice or awareness of the implications of such a move.
All the aforesaid conflicting data have the net effect of
casting doubt upon and clouding the real nature of the
private respondents' employment status. And we are
mandated by law to resolve all doubts in favor of labor. For
which reason, we hereby hold that private respondents were
regular employees of the petitioner.
Having arrived at basically the same results as respondent
NLRC with respect to private respondents' employment
status, did this Court waste its time and effort in reexamining the instant case? The answer is in the negative,
this Court cannot affirm a decision or judgment based on
erroneous findings and conclusions, for justice can never be
adequately dispensed to all parties if a judgment is not
grounded on the truth.
Second Issue: Terminations Illegal
On the second issue of alleged illegality of the subject
dismissals, we agree with respondent Commission when it
held, as mentioned above, that "the same was capricious
and whimsical as shown by the vague reason proffered by

respondent for said dismissal which is 'due to our present

business states' (should read 'status') is undoubtedly not one
of the valid causes for termination of an employment." True
indeed, for neither trhe Labor Code nor Policy Instructions No.
20 allows termination on such ground. Even Art. 283 of the
Labor Code as amended, which treats of retrenchments and
closures due to business losses, requires that the employer
first serve written notice on the workers and the Department
of Labor at least one month before the intended date thereof;
and in certain cases, separation pay must be paid. And it
cannot be denied that in the instant case, petitioner did not
afford them due process thru the twin requirements of notice
and hearing,[15] as the terminations took effect the day
following receipt of the notices of termination.Ineluctably, the
said terminations are not in accordance with law and
therefore illegal.

RM 306 20TH CENTURY BLDG.

632 SHAW BLVD., MAND.
METRO MANILA"
Unmistakably, petitioner, in placing the ad, must have had at
least one project, maybe more, "in the pipeline" at that time,
and was clearly in need of replacements for private
respondents whom it had just fired. Thus, the dismissals
could hardly have been due to a valid cause, not even due to
petitioner's alleged "present business status". On this count
as well, the dismissals were illegal.

MECHANICAL INSTALLERS

And lastly, we should mention that an order for reinstatement

with payment of backwages must be based on the correct
premises. This point is best illustrated by considering the last
ratiocination utilized by public respondent: "Even assuming
that complainants were project employees, their
unceremonious dismissal coupled with the attempt to
replace them via the newspaper advertisement entitles them
to reinstatement with backwages under P.I. No. 20." There is
a world of difference between reinstatement as project
employees and reinstatement as regular employees, but the
difference was obviously lost on the respondent NLRC.

TINSMITHS

Conclusion

WELDERS/PIPEFITTERS

We reiterate that this Court waded through the records of this

case searching for solid evidence upon which to decide the
case either way. But all told, neither party managed to make
out a clear case. Therefore, considering that in illegal
dismissal cases, the employer always has the burden of
proof, and considering further that the law mandates that all
doubts, uncertainties, ambiguities, and insufficiencies be
resolved in favor of labor, we perforce rule against petitioner
and in favor of private respondents.

On top of that, there is evidence of the bad faith of petitioner

in terminating the private respondents. Petitioner placed an
ad[16] in the classified ads section of the People's Journal,
sometime in June 1992[17] which read:
"WANTED IMMEDIATELY

APPLY IN PERSON:
RAYCOR AIR CONTROL
SYSTEMS, INC.

WHEREFORE, the foregoing considered, the assailed

Decision is hereby SET ASIDE and a new one rendered
holding that petitioner had failed to discharge its burden of
proof in the instant case and
therefore ORDERING the reinstatement of private
respondents as regular employees of petitioner, without loss
of seniority rights and privileges and with payment of
backwages from the day they were dismissed up to the time
they are actually reinstated. No costs.
SO ORDERED.
WALLEM MARITIME SERVICES, INC., and WALLEM SHIP
MANAGEMENT, LTD., Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION and ELIZABETH
INDUCTIVO, Respondents.
DECISION
BELLOSILLO, J.:
WALLEM MARITIME SERVICES, INC. and WALLEM SHIP
MANAGEMENT LTD. in this petition forcertiorari assail for
having been rendered with grave abuse of discretion the 30
June 1997 Resolution of the National Labor Relations
Commission dismissing their appeal for lack of merit, as well
as its 29 August 1997 Resolution denying reconsideration
thereof. 1
Sometime in May 1993, Pan-Fil Co. Inc., as manning and
crewing agent in the Philippines of Wallem Ship Management
Ltd. (WALLEM MANAGEMENT), hired Faustino Inductivo as
utilityman for "MT Rowan," a vessel owned and operated by
WALLEM MANAGEMENT, a Hongkong based shipping
company. The employment contract of Faustino Inductivo was
good for ten (10) months with a compensation of US$360.00
monthly basic salary, US$201.00 fixed monthly overtime pay,

and a monthly vacation leave with pay for six (6) days. As
was the standard procedure, Faustino Inductivo underwent
pre-employment medical examination and was found by his
employers doctors to be physically fit for work. So, on 13
May 1993, he was told to board as he did the "MT
Rowan." chanroblesvirtuallawlibrary
In November 1993 Wallem Maritime Services, Inc. (WALLEM
SERVICES) took over as WALLEM MANAGEMENTS manning
and crewing agent in the Philippines. Faustino Inductivo, who
was advised of the takeover, opted to remain on the vessel
and to continue his employment under the manning agency
of WALLEM SERVICES. Barely two (2) months before the
expiration of his employment contract, or on 17 January
1994, he was discharged from the vessel. His Seamans Book
2 and Wages Account 3 indicated that the cause of the
discharge was "mutual consent, on completion of 8 months
and 5 days." Accordingly, he disembarked in Hong Kong,
travelled to Manila alone and then returned to his hometown
in Nueva Ecija.
On 19 January 1994, two (2) days after his arrival in the
Philippines, he was hospitalized at the Yamsuan Medical
Clinic in Gapan, Nueva Ecija, after complaining of occasional
coughing and chest pains. The clinical diagnosis was
pneumonities, bilateral. As his condition worsened, Faustino
Inductivo was rushed to the Lung Center of the Philippines
where a mass was found on his right lung and another on his
right neck. His doctor advised him to undergo biopsy
treatment, but since he was scared he requested to go on
medication at home instead. Two (2) days thereafter,
Faustino Inductivo returned to the hospital, this time at the
De Ocampo Memorial Medical Center. Dr. Alfredo Sales, his
attending physician, found on examination the presence of
water in his lungs causing shortness of breath. For
insufficiency of medical facilities, however, he was
transferred to the Makati Medical Center where his doctor
finally abandoned all hopes for his recovery as his disease
was already in its advanced stage. He succumbed to his
illness on 23 April 1994 and the autopsy report showed as
cause of death disseminated intravascular coagulations,
septecalmia, pulmonary congestion and multiple intestinal

obstruction secondary to multiple adhesions. 4

Before Faustino Inductivos death, or sometime in February
1994, herein private respondent Elizabeth Inductivo went to
petitioners to claim the balance of her husbands leave
wages. She also inquired about his sickness benefits as he
was then very sick. Petitioners however informed her that her
husband was not entitled to sickness benefits because he
was not sick at the time he was "offsigned" from the vessel;
he was "offsigned" from the vessel on "mutual consent" and
not on medical grounds; and since he failed to advise or
notify petitioners in writing within seventy-two (72) hours of
his alleged sickness benefits was deemed forfeited.
Consequently, at the instance of Faustino Inductivo, private
respondent filed an affidavit-complaint against petitioners for
the payment of sickness and insurance benefits. After
Faustino Inductivo died his complaint was amended by
private respondent to include death benefits.
On 24 September 1996 the Labor Arbiter 5 rendered a
decision in favor of private respondent ordering petitioners to
pay complainant, for herself and in her capacity as guardian
of her two (2) minor children, as follows: US$50,000.00 as
death benefits; US$14,000.00 as childrens allowances; and
US$1,000.00 as burial expenses.
On appeal the NLRC sustained the Labor Arbiter. In its
Resolution of 30 June 1997 the NLRC held in part
It may be true that the deceased failed to report to
respondent Wallem Maritime within seventy two hours after
arrival in the Philippines but it could not be denied also that
the deceased was sick when he arrived. Human mind
dictates that a medical consultation at the nearest clinic is
necessary before anything else. The wife could not
immediately advise the respondent due to the situation of
her deceased husband . . . The allegation of the complainant
that her husband was repatriated upon petition of the crew
due to the deteriorating physical condition of Faustino
Inductivo, was not denied by Respondent. The defense of the
latter that the repatriation of the deceased was by "mutual
consent" and not discharged medically deserves scant

consideration. It is to be emphasized that the illness was

contracted during the deceaseds employment on board "MT
Rowan." Suffice it to say that the death of Faustino Inductivo
is compensable under the circumstances.
Their motion for reconsideration having been denied by the
NLRC in its Resolution of 29 August 1997, petitioners are now
before us imputing grave abuse of discretion on the part of
the NLRC in: (a) totally disregarding the evidence on record;
(b) ignoring and disregarding the existing law and
jurisprudence on the matter; and, (c) affirming in toto the
Labor Arbiters award of death compensation in favor of
private Respondent.
The pivotal issue to be resolved is whether the death of
Faustino Inductivo is compensable as to entitle his wife and
children to claim death benefits. Petitioners insist that it is
not compensable for two (2) principal reasons: first, Faustino
Inductivo was offsigned from the vessel "MT Rowan" based
on "mutual consent" and not on medical grounds, and the
cancer which caused his death was not contracted during his
employment but was a pre-existing condition; and second,
Faustino Inductivo failed to comply with the mandatory
seventy-two (72)-hour reporting requirement prescribed by
the POEA standard employment contract, and therefore his
right to claim benefits was deemed forfeited.
Petitioners would want to impress upon this Court that
Faustino Inductivo was still in good health when he
disembarked from "MT Rowan," as shown in his Seamans
Book indicating that the cause of his discharge was "mutual
consent in writing" and not on medical grounds.
We disagree. From all indications, Faustino Inductivo was
already in a deteriorating physical condition when he left the
vessel. This is the only plausible reason why with barely two
(2) months away from the expiration of his employment
contract he was all of a sudden and with no rational
explanation discharged from the vessel. This conclusion is
buttressed by the events that transpired immediately upon
his arrival in the Philippines, i.e., he was hospitalized two (2)
days later and died three (3) months after.

the autopsy report. Ostensibly, cancer was not in the list.

Thus, as succinctly observed by the Labor Arbiter
While its true that the seaman was offsigned from the vessel
by "mutual consent," what could have been the compelling
reason why only less than two (2) months away before the
expiration of his employment contract, he decided to
disembark. Then there is the question about the true state of
his health at the time he disembarked. The puzzle of course
is why two (2) days upon his disembarkation complainants
husband lapsed into his ordeal immediately serious at the
onset without any sign of relief until his last breath barely
three months thereafter.chanrobles virtual lawlibrary
It is indeed unthinkable that the deceased seaman at the
homestretch of his voyage would suddenly seek the end of
his employment for no reason at all. There is only one logical
explanation for this given the circumstances that took place
immediately after disembarkation. Complainants husband
was already seriously ill when he (was) discharged from the
vessel. This conclusion is supported by the fact that barely
two (2) days upon his arrival in the Philippines, he was
rushed to a local medical clinic for some serious symptoms.
There being no relief after six (6) days of medical attendance,
the late seaman was transferred to the Lung Center of the
Philippines. Again, as there was likewise no relief obtained
the family was constrained to seek further work-outs in two
(2) other hospitals, the last of which was at the Makati
Medical Center where all clinical procedures and work-outs
were ruled out as of no consequence since the deceaseds
condition at the time was already irreversible.
There is likewise no merit in petitioners theory that Faustino
Inductivo died of cancer which was pre-existing and could not
have been contracted during the eight (8)-month period of
his employment at the vessel. Primarily, both the Death
Certificate 6 and Autopsy Report of Faustino Inductivo never
mentioned that the cause of death was cancer. What was
mentioned was "septicemia," if we go by the Death
Certificate, and "disseminated intravascular coagulations,
septecalmia, pulmonary congestion, multiple intestinal
obstruction secondary to multiple adhesions," if we refer to

Indeed, there was never any categorical or conclusive finding

that Faustino Inductivo was afflicted with cancer. Petitioners
extensive discussion in support of their "cancer theory" is
nothing more than mere speculations cloaked in medical
gibberish. Moreover, we agree with private respondent that
opinions of petitioners doctors to this effect should not be
given evidentiary weight as they are palpably self-serving
and biased in favor of petitioners, and certainly could not be
considered independent. These medical opinions cannot
prevail over the entries in the Death Certificate and Autopsy
Report.
Furthermore, before Faustino Inductivo was made to sign the
employment contract with petitioners he was required to
undergo, as a matter of procedure, medical examinations and
was declared fit to work by no less than petitioners doctors.
Petitioners cannot now be heard to claim that at the time
Faustino Inductivo was employed by them he was afflicted
with a serious disease, and that the medical examination
conducted on the deceased seaman was not exploratory in
nature such that his disease was not detected in the first
instance. Being the employer, petitioners had all the
opportunity to pre-qualify, screen and choose their applicants
and determine whether they were medically, psychologically
and mentally fit for the job upon employment. The moment
they have chosen an applicant they are deemed to have
subjected him to the required pre-qualification
standards.chanrobles.com:cralaw:red
But even assuming that the ailment of Faustino Inductivo was
contracted prior to his employment on board "MT Rowan,"
this is not a drawback to the compensability of the disease. It
is not required that the employment be the sole factor in the
growth, development or acceleration of the illness to entitle
the claimant to the benefits provided therefor. It is enough
that the employment had contributed, even in a small
degree, to the development of the disease and in bringing
about his death.
It is indeed safe to presume that, at the very least, the nature

of Faustino Inductivos employment had contributed to the

aggravation of his illness if indeed it was pre-existing at
the time of his employment and therefore it is but just that
he be duly compensated for it. It cannot be denied that there
was at least a reasonable connection between his job and his
lung infection, which eventually developed into septicemia
and ultimately caused his death. As a utilityman on board the
vessel, he was exposed to harsh sea weather, chemical
irritants, dusts, etc., all of which invariably contributed to his
illness.
Neither is it necessary, in order to recover compensation,
that the employee must have been in perfect condition or
health at the time he contracted the disease. Every
workingman brings with him to his employment certain
infirmities, and while the employer is not the insurer of the
health of the employees, he takes them as he finds them and
assumes the risk of liability. If the disease is the proximate
cause of the employees death for which compensation is
sought, the previous physical condition of the employee is
unimportant and recovery may be had therefor independent
of any pre-existing disease. 7
On the alleged failure of private respondent to comply with
the seventy-two (72)-hour reporting requirement, the POEA
Standard Employment Contract Governing the Employment
of All Filipino Seamen on Board Ocean Going Vessel, 8
provides in part
. . . the seaman shall submit himself to a post-employment
medical examination by the company-designated physician
within three working days upon his return, except when he is
physically incapacitated to do so, in which case a written
notice to the agency within the same period is deemed as
compliance. Failure of the seaman to comply with the
mandatory requirement shall result in his forfeiture of the
right to claim the above benefits (Emphasis supplied).
Admittedly, Faustino Inductivo did not subject himself to
post-employment medical examination within three (3) days
from his return to the Philippines, as required by the above
provision of the POEA standard employment contract. But

such requirement is not absolute and admits of an exception,

i.e., when the seaman is physically incapacitated from
complying with the requirement. Indeed, for a man who was
terminally ill and in need of urgent medical attention one
could not reasonably expect that he would immediately
resort to and avail of the required medical examination,
assuming that he was still capable of submitting himself to
such examination at that time. It is quite understandable that
his immediate desire was to be with his family in Nueva Ecija
whom he knew would take care of him. Surely, under the
circumstances, we cannot deny him, or his surviving heirs
after his death, the right to claim benefits under the
law.chanroblesvirtuallawlibrary
Similarly, neither could private respondent Elizabeth
Inductivo be expected to have thought of, much less had the
leisure of time to travel all the way to Manila, to notify
petitioners of her husbands condition. Her primary concern
then was to take care of her husband who was at the brink of
death.
At any rate, it appears that in early February 1994 private
respondent went to petitioners to claim the balance of her
husbands leave wages. She then informed petitioners of the
condition of her husband as well as his confinement in a
hospital, and inquired about the sickness benefits she
intended to claim. This was more than sufficient actual notice
to petitioners.
It is relevant to state that the POEA standard employment
contract is designed primarily for the protection and benefit
of Filipino seamen in the pursuit of their employment on
board ocean-going vessels. Its provisions must, therefore, be
construed and applied fairly, reasonably and liberally in favor
or for the benefit of the seamen and their dependents. Only
then can its beneficent provisions be fully carried into effect.
Finally, petitioner WALLEM SERVICES as manning agent is
jointly and severally liable with its principal, WALLEM
MANAGEMENT, for the claims of the heirs of Faustino
Inductivo in accordance with Sec. 1, Rule II of the POEA Rules
and Regulations. 9

WHEREFORE, the petition is DISMISSED. The assailed

Resolutions of public respondent National Labor Relations
Commission dated 30 June 1997 and 29 August 1997,
respectively dismissing petitioners appeal for lack of merit
and denying reconsideration thereof, are AFFIRMED.
Petitioners are ordered to pay, jointly and severally, the
following amounts to private respondent for herself and in
her capacity as guardian of her two (2) minor children:
US$50,000.00 as death benefits; US$14,000.00 as childrens
allowances; and US$1,000.00 as burial expenses. Costs
against petitioners.
SO ORDERED.cralawnad
CONRADO SAMILLANO and MYRNA V.
SAMILLANO, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION, DAN-AGSA DAKBAYAN BROADCASTING
CORPORATION RADIO STATION DXDD, MSGR. JESUS
DOSADO and SIMPLICIA NERI, .
DECISION
PADILLA, J.:
This petition for certiorari under Rule 65 of the Rules of Court
refers to two (2) cases filed by petitioner-spouses Conrado
and Myrna Samillano against private respondents Dan-ag sa
Dakbayan Broadcasting Corporation-Radio Station DXDD
and/or Msgr. Jesus Dosado and/or Simplicia Neri, Chairman of
the Board and Manager respectively of said respondent
corporation.
The first case, filed by petitioner-spouses on 8 February 1991,
is a complaint for illegal demotion while the second
complaint filed on 20 May 1991 is for illegal dismissal,
payment of backwages, commissions and other monetary
claims.

The two (2) complaints before Regional Arbitration Branch

No. 10, Cagayan de Oro City of the National Labor Relations
Commission (NLRC) docketed as NLRC RAB Case Nos. 10-0300195 and 10-06-00371-91 were later consolidated since
they involve the same parties and issues.
The undisputed facts of the two (2) cases are as follows:
1. Petitioner-spouses Conrado and Myrna Samillano were
hired by private respondents on 1 October 1981 and 1
August 1983 respectively;
2. On 2 October 1990, Conrado Samillano was transferred to
the Technical Department as an SSB Operator from his
previous position as Traffic Supervisor of private respondent
corporation. On the same day, his wife Myrna V. Samillano
was transferred to the AM Production Department from her
position as cashier of respondent corporation;
3. As a result of the transfers, the petitioner-spouses filed the
complaint for illegal demotion contending that the transfers
resulted in loss of commissions and violated their security of
tenure;
4. On 20 May 1991, petitioner-spouses filed the complaint for
illegal dismissal contending that private respondents
terminated their employment on 23 April 1991 without any
lawful cause;
5. Private respondents relied on allegations that petitionerspouses misappropriated funds of the radio station and
committed acts of insubordination which resulted in loss of
trust and confidence, upon which their dismissals were
based;
6. In a supplemental position paper, herein petitioners
contended that their demotion and subsequent dismissal

were retaliatory acts of private respondents for their having

reported violations by private respondents of labor laws
particularly underpayment/nonpayment of salaries and other
benefits;

The labor arbiter further upheld managements prerogative,

in the absence of bad faith, to protect its rights in relation to
the alleged offenses committed by petitioners. The
demotions of petitioners were therefore upheld.

Labor Arbiter Noel Augusto S. Magbanua, to whom the cases

were assigned, found that sometime in July 1989, the
Department of Labor and Employment conducted an
inspection of the premises of private respondent corporation
and initially found deficiencies in wages and other benefits
given to employees.

With respect to the dismissal of petitioners from

employment, however, the labor arbiter found that the
alleged misappropriations of funds committed by petitioners
were not adequately substantiated. Hence, the dismissal of
petitioners was declared illegal.

It was further determined that in March or April 1990, private

respondents conducted meetings with their employees
seeking a compromise of the unpaid benefits. Some
employees executed waivers of further claims against private
respondents. Herein petitioners refused to sign said waivers.
The labor arbiter formulated the following issues for
resolution: 1 crlwvirtualibrry
1) whether complainants demotion and subsequent
termination of employment were retaliatory acts for
complainants having allegedly reported respondents
violations of labor laws,

The labor arbiter ruled however that instead of

reinstatement, it would be for the best interest of the parties
considering the strained relations between them, to award
petitioners separation pay equivalent to one (1) month salary
for every year of service. Full backwages were not awarded
based on findings that petitioners acted in an arrogant and
uncooperative manner during the investigation of their case
which could be a possible reason why private respondents
were not able to prove the formers involvement in the
financial irregularities subject of this case. 2 Only six (6)
months backwages were awarded to each of the
complainants (herein petitioners).
Finally, the labor arbiter denied petitioners claims for unpaid
commissions for lack of evidence.

2) whether complainants demotions were illegal; and

3) whether complainants terminations from employment
were illegal.
The labor arbiter resolved the first two (2) issues in the
negative. He declared that no evidence was presented to
show that the demotions of petitioners were linked to their
reporting of alleged violations by private respondents of the
Labor Code.

Appeal by private respodnents to the NLRC was dismissed

on 9 February 1994 for their failure to properly perfect their
appeal. The NLRC found that private respondents had filed
their notice of appeal without attaching thereto their appeal
memorandum as required by Section 3 Rule VI of the Rules of
Procedure of the NLRC. There was therefore failure to perfect
the appeal within the reglementary period of ten (10) days
from receipt of the assailed labor arbiters decision.

On 30 June 1994, the NLRC reinstated the appeal based on

findings that while the notice of appeal and appeal
memorandum were received by the NLRC on 15 July 1993
and 20 July 1993 respectively, or way beyond the period for
appeal which expired on 3 July 1993, both pleadings were,
however, actually mailed on 2 July 1993 as evidenced by
Registry Receipt No. 77 of the Tangub Post
Office. 3 crlwvirtualibrry
On the merits of the appeal, the NLRC ruled that private
respondents have substantiated their claim of having lost
trust and confidence in petitioners due to serious
irregularities in the performance of their duties.
The NLRC held that, contrary to the findings of the labor
arbiter, an audit report submitted by a certain Domeciano
Adaya dated 17 September 1990 showed substantial
evidence of petitioners involvement in irregularities including
misappropriations of funds, non-turnover of collections and
misuse of funds for personal purposes. The NLRC relied on
reports made by Janice Poncianos, the Finance Department
Business Head of respondent corporations radio station
addressed to the station manager as well as the report of the
station manager to the chairman of the board of respondent
corporation on the alleged acts of herein
petitioners. 4 crlwvirtualibrry
Based on the above findings, the NLRC set aside the assailed
decision and ruled that petitioners were validly dismissed.
However, private respondents were ordered to indemnify
petitioners the amount ofP2,000.00 each for violation of the
latters right to due process. The NLRC agreed with the
petitioners that there was no formal investigation wherein
the latter were given the chance to defend themselves
against the charges levelled against
them. 5 crlwvirtualibrry

In their petition before this Court, it is argued by petitioners

that:
1. The NLRC gravely abused its discretion in holding that the
dismissals of herein petitioners were valid; and
2. The NLRC gravely abused its discretion in merely imposing
a sanction on private respondents for violation of petitioners
right to due process. 6 crlwvirtualibrry
Before ruling on the merits of this petition, the Court takes
notice of a peculiar circumstance regarding the appeal of the
private respondents from the decision of the labor arbiter.
In the resolution reinstating private respondents appeal, the
NLRC found that the notice of appeal and memorandum on
appeal were received on 15 July 1993 and 20 July 1993
respectively. The reason for reinstating the appeal was the
finding that both pleadings were actually mailed on 2 July
1993 as evidenced by Registry Receipt No. 77 postmarked on
the same date at the Tangub City Post Office.
It is unexplained however why two (2) pleadings mailed
together using a single registry receipt and presumably
contained in one (1) envelope would be received on two (2)
different dates. It should be pointed out that in the motion for
reconsideration of the resolution dismissing the appeal,
herein private respondents averred mailing only the notice of
appeal and a postal money order to cover appeal fees on 2
July l993. Be that as it may, the Court shall proceed to
resolve this case on the merits despite the possible
technicality of the appeal being filed late with the NLRC. The
NLRC is however reminded to be more accurate in recording
the dates of mailing and receipt of pleadings filed before it
since this is essential in the speedy and correct disposition of
cases.

Petitioners do not dispute before this Court the validity of

their re-assignments. It is clear that the re-assignments were
a valid exercise of management prerogative pending
investigation of the alleged irregularities. The purpose of the
re-assignments is no different from that of preventive
suspension which private respondents could likewise have
validly imposed on petitioners; to protect the employers
property pending investigation of the alleged malfeasance or
misfeasance committed by the
employee. 7crlwvirtualibrry
In the present case, the labor arbiter correctly held that there
is no evidence to show that the transfer of petitioners to
other positions and the subsequent termination of their
employment were retaliatory acts of private respondents for
petitioners reporting of the alleged violations by private
respondents of the Labor Code.
The legality of petitioners dismissal would be determined
based on whether or not private respondents have proved
the basis for loss of trust and confidence upon which the
dismissals are based.
In China City Restaurant Corporation v. NLRC
thus:

the Court held

The NLRC based its decision upholding petitioners dismissal

on the conclusion that the irregularities involving petitioners
were more than sufficient to make out a case of loss of trust
and confidence. 9 crlwvirtualibrry
Said irregularities allegedly involving petitioners were
enumerated in An Updated Report dated 17 August 1990
submitted by the Finance Department Business Head Janice
Procianos and various letter-memos to petitioners as well as
the audit report dated 17 September 1990 submitted by
Domeciano Adaya.
But petitioners correctly argue that the above-mentioned
documents do not provide enough basis for termination of
their employment based on loss of trust and confidence.
The Adaya audit report in part reads:
"I am suggesting with a request that the above-mentioned
observations be reviewed and confirmed by the Station
Accountant, Bookkeeper, Collector and Cashier or Cash
Custodian in my presence in fairness to everyone before I
give conclusion, implication or opinion to these observations.
They may also give comments or raise objections, if any. The
comments or objections may be made orally or in writing.

"For loss of trust and confidence to be a valid ground for the

dismissal of employees, it must be substantial and not
arbitrary, whimsical, capricious or concocted.

In this connection, as I dont have line authority over the

personnel concerned may I request you to ask them to
review and confirm by observations."

Irregularities or malpractices should not be allowed to escape

the scrutiny of this Court. Solicitude for the protection of the
rights of the working class are of prime importance. Although
this is not a license to disregard the rights of management,
still the Court must be wary of the ploys of management to
get rid of employees it considers as undesirable."

There is no evidence to show that herein private respondents

undertook to review and/or confirm the observations
contained in the audit report as recommended by the audit
report itself.
On the contrary, even in their comment on the petition filed
with this Court, which respondents later adopted as their

memorandum, the dismissal of herein petitioners is justified

mainly on the basis of said audit report submitted by
Domeciano Adaya. 10 crlwvirtualibrry
It is, however, clear from the above-quoted portion of the
audit report that the findings contained therein do not
categorically find herein petitioners guilty of committing
irregularities. The clear import of the said audit report is that
further investigation and verification would be necessary to
pinpoint the source of the irregularities.
There is thus no evidence on record to show that any further
investigation and verification were done by private
respondents. What is apparent is that petitioners were made
to answer charges of misconduct based on suspicions which
lacked adequate basis.
While the law and this Court recognize the right of an
employer to dismiss an employee based on loss of trust and
confidence, the formers evidence must clearly and
convincingly establish the facts upon which the loss of trust
and confidence in the employee is
based. 11 crlwvirtualibrry
In the present case, the unsubstantiated suspicions and
baseless conclusions of private respondents do not provide
legal justification for dismissing herein petitioners. The doubt
in this case should be resolved in favor of labor pursuant to
the social justice policy of labor laws and the Constitution.
Finally, on petitioners right to due process, we uphold the
NLRC findings that no formal investigation was conducted
prior to dismissal of petitioners. Private respondents thus
failed to adequately comply with the requirement that an
employee should be given the opportunity to be heard and to
defend himself before he is dismissed. In San Antonio v.
NLRC, 12 the Court stated that "Proper compliance with the

twin requirements of notice and hearing are conditions sine

qua non before a dismissal may be validly effected. x x x Any
procedural shortcut, that effectively allows an employer to
assume the roles of both accuser and judge at the same
time, should not be countenanced." (emphasis supplied).
In the present case, the notices/memoranda to petitioners
requiring explanations/answers to the charges against them
were plainly meant to provide a semblance of compliance
with the due process requirement which the NLRC correctly
ruled to be inadequate.
The Court will not be deceived by schemes to circumvent the
requirements of law and the Constitution. For failure to fully
comply with the requirements of due process, private
respondents should, as a matter of course, indemnify the
petitioners but we refrain from awarding damages on this
score since we are awarding separation pay and backwages
due to petitioners illegal dismissal.
The above-finding that petitioners were illegally dismissed
normally requires that they be reinstated to their former or
equivalent positions with full backwages. In this case,
however, the relationships between petitioners and private
respondents have undoubtedly become very strained, hence,
separation pay in lieu of reinstatement is proper. 13 However,
as a consequence of petitioners illegal dismisal, full
backwages from date of dismissal to the finality of this
decision are due the petitioners in line with the ruling in the
Bustamante case. 14 crlwvirtualibrry
WHEREFORE, the decision appealed from is hereby SET
ASIDE and a new one entered:
1. DECLARING the dismissal from employment of petitioners
NULL and VOID;

2. ORDERING private respondents to pay petitioners

separation pay at the rate of ONE-HALF (1/2) MONTH salary
for every year of service; and
3. ORDERING private respondents to pay petitioners full
backwages from date of illegal dismissal to the finality of this
decision.
SO ORDERED.

STOLT-NIELSEN MARINE SERVICES (PHILS.), INC. and

STOLT-NIELSEN, INC., Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION, PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION and EDUARDO
MONSALE, Respondents.
DECISION
VITUG, J.:
In a petition for certiorari, Stolt-Nielsen Marine Services
(Phils.), Inc., and Stolt-Nielsen Inc., seek to annul and set
aside the resolutions of 27 January 1992 and 25 March 1992
1 of the National Labor Relations Commission ("NLRC")
affirming the decision of 20 April 1990 2 of the Philippine
Overseas Employment Administration ("POEA"), in POEA Case
No. (M) 89-03-208, which has held both petitioners (herein)
Jointly and severally liable for various monetary awards in
favor of private respondent, Eduardo S Monsale, their hired
seaman.
Petitioner Stolt-Nielsen Marine Services (Phils.), Inc. (SNMSI
for brevity), on 26 May 1977, took to its employ in various
capacities private respondent Eduardo Monsale. His fealty to
his employer for ten (10) continuous years earned for him an

award, given on 28 June 1988, for dedicated service to the

Stolt-Nielsen fleet. On 21 October 1988, SNMSI and private
respondent executed a Contract of Shipboard Employment
and Crew Agreement under which the latter, this time, was to
serve as an engine fitter on board Stolt Crown Vessel for a
period of ten months commencing on 09 December 1988.
The contract provided that Monsale would get a monthly
basic pay of five hundred twenty-five U.S. dollars
(US$525.00), fixed overtime pay of two hundred fifty U.S.
dollars (US$250.00), and longevity pay of sixty U.S. dollars
(US$60.00), with leave benefits of six (6) days per month. 3
On 09 December 1988, private respondent boarded the Stolt
Crown vessel. Captain Erkiaga, a Spanish national, instantly
ordered him to perform work connected with the berthing
and unberthing maneuvers on the upper deck of the ship.
Private respondent followed the captains order despite his
contract that called for a different assignment. Uneasy,
however, about the change in his job detail, private
respondent inquired- from Captain Erkiaga if his transfer had
been communicated to the SNMSI. He was told that the new
work assignment had been communicated to Stolt-Nielsen,
Inc., which thereupon radioed back its approval.
On 29 January 1989, a Sunday and his scheduled rest day,
private-respondent was ordered to clean the deck cargo tank
using "toline" chemical, a toxic substance detrimental to the
respiratory system. He was not provided with a protective
mask. The risk to his health notwithstanding, private
respondent again followed Captain Erkiagas order. He
worked for seventeen (17) hours from 5:00 that morning until
10:00 in the evening.
Due to his exposure to the pungent chemical, private
respondent suffered from chest pains and dizziness. On 01
February 1989, he was unable to report for work but he
informed First Engineer Juan J. Ruiz about his physical
condition. Ruiz, unfortunately, neither mentioned the matter
to Captain Erkiaga nor summoned the vessels resident
physician to attend to him. Captain Erkiaga interpreted
private respondents failure to work to be an act of
disobedience and immediately ordered him, along with some

other seamen, to report on deck "within five minutes" to

clean up the deck cargo tank. Despite his illness, private
respondent tried to reach the deck on time but he was
unable to make it. The incident was entered in the log book;
viz:jgc:chanrobles.com.ph
"0830 Fitter Eduardo Monsale and Alfonso Garino have
refused to work in the tank cleaning when ordered to do so.

"1. FIVE THOUSAND SIX HUNDRED SIXTEEN US DOLLARS

(US$5,616.00) or its equivalent in Philippine Currency at the
time of actual payment, representing complainants salaries
for the unexpired portion of his employment contract;
"2. FOUR HUNDRED NINETY NINE AND 20/100 US DOLLARS
(US$499.20) or its equivalent in Philippine Currency at the
time of actual payment, representing complainants
unremitted salary for the month of January 1989; and

"0845 They are informed of the above entry in the log book.
"0845 They comment that they are not refusing to go to work
but only to work in the tanks. They are informed their
contract is terminated as to today, for repeated disobedience
to lawful orders of their superiors." 4

"3. TWO THOUSAND TWO HUNDRED FIFTY US DOLLARS

(US$2,250.00) or its equivalent in Philippine Currency at the
time of actual payment, representing complainants fixed
overtime pay.
"All other claims are dismissed for lack of merit.

On 07 February 1989, private respondent was repatriated to

the Philippines. Upon arrival in Manila two days later, private
respondent went to the manning agents physician, Dr. Fidel
Chua, who found him to be suffering from bronchitis. On 10
February 1989, he made a written report on the
circumstances of his case, furnishing with a copy thereof the
manning agents Capt. Maximiano Hernandez. The latter
confirmed the termination of private respondents
employment.
On 13 March 1 989, private respondent went to the bank to
get his salary for the months of January and February 1989.
He learned that his salary allotments were not remitted by
petitioners. On 08 March 1989, private respondent filed with
the POEA a complaint for illegal dismissal and contract
substitution.
The POEA, ruling in favor of private respondent,
held:jgc:chanrobles.com.ph
"WHEREFORE, premises considered, judgment is herebyrendered ordering respondents Stolt Nielsen Marine Services
Philippines and Stolt Nielsen, Inc. to pay jointly and severally
complainant Eduardo S. Monsale the
following:jgc:chanrobles.com.ph

"SO ORDERED." 5
On appeal, the NLRC, in its resolution of 27 January 1992,
affirmed the POEA decision and ruled that the POEA had not
gravely abused its discretion. The NLRC added that
petitioners were afforded ample opportunity to present their
side in the proceedings before the POEA. Petitioners motion
for reconsideration was denied.
In the petition for certiorari, instant, several submissions
have been made but, as so encapsulized by the Solicitor
General, the controversy really revolves around the following
issues:jgc:chanrobles.com.ph
"I. WHETHER OR NOT PRIVATE RESPONDENT WAS ILLEGALLY
DISMISSED.
"II. WHETHER OR NOT PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN AWARDING PRIVATE
RESPONDENT FIXED OVERTIME (PAY) IN THE AMOUNT OF
US$2,500.00.
"III.. WHETHER OR NOT THE PRESENT CONTROVERSY
SHOULD HAVE BEEN REFERRED TO THE GRIEVANCE

COMMITTEE PROVIDED UNDER THE COLLECTIVE BARGAINING

AGREEMENT." 6
It is averred that public respondents have failed to aptly
consider petitioner "s evidence showing private respondent
"s "repeated refusal to obey the orders of the master,
"amounting" to serious misconduct and/or gross
insubordination or disobedience," 7 to be the real cause for
the questioned dismissal. The argument is anchored on the
evidentiary value of the log book entries, 8 and in the
holdings of the Court in Haverton Shipping Ltd. v. NLRC 9 and
Abacast Shipping and Management Agency, Inc. v. NLRC. 10
It should be stressed at the outset that the employer has the
burden of proving that the dismissal of an employee is for a
just cause. 11 In an attempt to discharge this burden,
petitioners have merely presented, by way of annexes to
their position paper before the POEA and reply to private
respondents position paper, copies of log book abstracts In
Abacast Shipping, the Court has ruled that entries in the
ships log book are prima facie evidence of the incident only
if the logbook itself containing such entries or photocopies of
the pertinent pages thereof are presented in evidence; hence

The Court, no different from public respondents, finds it hard

to believe, let alone to conclude, that private respondent has
been guilty of willful disobedience to warrant dismissal.
Willful disobedience of the employers lawful order envisages
the concurrence of at least two requisites: (a) The
employees assailed conduct must have been intentional and
characterized by a "wrongful and perverse attitude;" and (b)
the order violated must have been reasonable, lawful, and
made known to the employee and should pertain to the
duties which he has been engaged to discharge. 13 It is
possible that private respondent may have indeed shown
some reluctance to the captains order; nevertheless, he
ultimately did comply with the orders of the captain. Not the
least insignificant is that the Captains assignments have not
been the contractually assigned tasks of private Respondent.
Petitioners call attention to the "mutual assistance" proviso
of the collective bargaining agreement;
viz:jgc:chanrobles.com.ph
"Sec. 6. Mutual assistance shall be exercised by all
officers/ratings regardless of rank and position assisting each
other in the working of the vessel both in engine room, deck
and tank cleaning included. (sic)" 14

"The log book is a respectable record that can be relied upon

to authenticate the charges filed and the procedure taken
against the employees prior to their dismissal. Curiously,
however, no entry from such log book was presented at all in
this case. What was offered instead was the shipmasters
report, which was later claimed to be a collation of excerpts
from such book.

As has been so correctly pointed out by the POEA, however,

the above provision, falling under the general item, "Working
Hours," is primarily for properly computing extra
compensation, and it is not intended to coerce, compel or
force the crew members to perform jobs other than what
they have been contracted for. 15 The Court, even then,
shares POEAs observation that

"It would have been a simple matter, considering the ease of

reproducing the same, to make photocopies of the pertinent
pages of the log book to substantiate the petitioners
contention. Why this was not done is something that
reasonably arouses the curiosity of this Court and suggests
that there probably were no entries in the log book at all that
could have proved the alleged offenses of the private
respondents." 12

"Respondents CBA provision on mutual assistance should be

applied with leniency. If respondents defense will be given
credence, then the job designations in the employment
contract will be rendered inutile. All other members of the
crew can be requested to perform jobs other than what they
are contracted for and if they refuse, they could be
terminated for insubordination. Such defense, definitely,
cannot be allowed for this is in square defiance of the
institutional mandate of protection to labor." 16

Providing assistance to other members of the crew in their

jobs on board a vessel when needed or required is violative
neither of labor laws nor of the employment contract except
when such assistance becomes regularly imposed.
In his case, private respondent was made to perform various
tasks other than his contractually assigned work from the
very moment he boarded the vessel.
Even when an employee is found to have transgressed the
employers rules, in the actual imposition of penalties upon
the erring employee, due consideration must still be given to
his length of service and the number of violations committed
during his employ. 17 The penalty must in no case be unduly
harsh and grossly disproportionate. 18
The law so requires, as a vital component of due process, an
observance of the twin requirements of notice and hearing
before the dismissal of an employee.
Thus, it could not be enough for his dismissal that private
respondent was "advised of his infractions and given the
opportunity to explain his side" after he had supposedly
"refused to assist in the berthing and unberthing maneuvers,
and that when he refused to clean the cargo tank, the
"pertinent portion of the CBA on mutual assistance was read
to him." 19 The procedure was far short of the legal
mandate.

subsequent notice which informs the employee of the

employers decision to dismiss him." 20
In another case 21 the Court has
explained:jgc:chanrobles.com.ph
"An employee cannot just be separated from his employment
without according him his constitutional right of due process,
consisting of the proper notice and hearing. No notice of any
form, apprising of the proffered charges, was served on
petitioner, much less was a hearing conducted wherein he
could have defended himself. The fact that the defense
interposed at the hearing would be outlandish or pure
nonsense, is not a ground to cut short the procedure for
dismissal. As this Court ruled in Seahorse Maritime
Corporation vs National Labor Relations Commission, 173
SCRA 390 (1989), that before a seaman can be dismissed
and discharged from the vessel, it is required that he be
given a written notice regarding the charges against him and
that he be afforded a formal investigation where he could
defend himself personally or through a representative. Fear
of any possible trouble that might be caused by the
dismissed employee on board the vessel upon being
informed of his dismissal is not a reason to dispense with the
requirement." 22

The Court has once said:jgc:chanrobles.com.ph

"We agree with petitioners, however, that private respondent

is not entitled to the overtime pay awarded to him by the
POEA. The ruling in National Shipyards and Steel Corporation
v. CIR and Malondras 23 is in point, and there the Court,
through Justice J.B.L. Reyes, has said:jgc:chanrobles.com.ph

"On the issue of due process . . ., the law requires the

employer to furnish the worker whose employment is sought
to be terminated a written notice containing a statement of
the cause or causes for termination and shall afford him
ample opportunity to be heard and to defend himself with the
assistance of a representative. Specifically, the employer
must furnish the worker with two (2) written notices before
termination of employment can be legally effected: (a) notice
which apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (b) the

"We can not agree with the Court below that respondent
Malondras should be paid overtime compensation for every
hour in excess of the regular working hours that he was on
board his vessel or barge each day, irrespective of whether
or not he actually put in work during those hours. Seamen
are: required to. stay on board their vessels by the very
nature of their duties, and it is for this reason that, in addition
to their regular compensation, they are given free living
quarters and subsistence allowances when required to be on
board; It could not have been the purpose of our law to

require their employers to pay them overtime even when

they are not actually working: otherwise, overtime even
when they are not actually working: otherwise, every sailor
on board a vessel would be entitled to overtime for sixteen
hours each day, even if he had spent all those hours resting
or sleeping in his bunk, after his regular tour of duty. The
correct criterion in determining whether or not sailors are
entitled to overtime pay is not, therefore, whether they were
on board and can not leave ship beyond the regular eight
working hours a day, but whether they actually rendered
service in excess of said number of hours." 24
Anent the matter on jurisdiction, the issue was mooted by
petitioners active participation in the proceedings below. In
Marquez v. Secretary of Labor, 25 the Court
said:jgc:chanrobles.com.ph
". . . The active participation of the party against whom the
action was brought, coupled with his failure to object to the
jurisdiction of the court or quasi-judicial body where the
action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of the
case and will bar said party from later on impugning the
court or bodys jurisdiction." 26
WHEREFORE, the herein questioned resolutions of the NLRC
are AFFIRMED subject to the modification that the award of
overtime pay in the amount of Two Thousand Two Hundred
Fifty U.S. dollars (US S2,250.00) is deleted. No costs.
SO ORDERED.
DELFIN GARCIA, doing business under the name
NAPCO-LUZMART, Inc., Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION and CARLITO
LACSON, Respondents.
DECISION
GONZAGA-REYES, J.:

Before us is a Petition for Certiorari under Rule 65 of the

Rules of Court to annul and set aside the decision of the
National Labor Relations Commission 1 in NLRC CA No. L001268 dated April 12, 1994 which affirmed the decision of
the Sub-Regional Arbitration Branch No. I in Dagupan City
finding that the private respondent Carlito Lacson was
constructively dismissed by the petitioner Delfin Garcia doing
business under the name NAPCO-LUZMART, Inc. and
awarding respondent backwages and separation
pay.chanroblesvirtuallawlibrary
The following facts as adopted by the National Labor
Relations Commission (NLRC) are
uncontroverted:jgc:chanrobles.com.ph
"Complainant Carlito Lacson was employed on March 5, 1987
as boiler operator technician by Northwest Agro-Marine
Products Corporation (NAPCO). On December 12, 1990
respondent Luzmart, Inc., acquired NAPCO in a foreclosure
sale. Both companies were managed by respondent Delfin
Garcia.
On January 28, 1993, there was a mauling incident which
involved the complainant and Julius Z. Viray, his immediate
supervisor and allegedly a friend and compadre of
respondent Garcia. As complainant suffered injuries as a
result thereof he reported the matter to police authorities
and he sought treatment at the Teofilo Sison Memorial
Provincial Hospital. Both the complainant and Viray were
asked to explain their sides. After the submission of the
written explanations, Delfin Garcia suspended both of them
from work for a period of one month effective April 15, 1993.
In the same suspension order, complainant was further
directed to explain in writing why he should not be dealt with
disciplinary action or terminated for his continued absences
from February 15, 1993 up to the date of the memorandum
order. Complainant filed a complaint for illegal dismissal and
other monetary claims but the same was dismissed without
prejudice. On September 1, 1993, the complainant refiled
this case." 2
The Labor Arbiter 3 ruled in favor of the respondent Carlito

Lacson (LACSON). Petitioner NAPCO-Luzmart (LUZMART)

appealed to the NLRC which affirmed the decision of the
Labor Arbiter after finding that the Labor Arbiter did not
commit any reversible error. The NLRC however deleted the
award of attorneys fees in favor of LACSON. Its decision,
which adopted the conclusions of the Labor Arbiter,
reads:jgc:chanrobles.com.ph
"In finding for the complainant, the Labor Arbiter
ruled:chanrob1es virtual 1aw library
The issues to be resolved in this case are: (1) whether or not
the complainant was dismissed from his employment; (2)
whether or not he is entitled to his claim for overtime
services, separation pay, 13th month pay, premium pay for
working on holidays and rest days, separation pay, 13th
month pay and service incentive leave pay; and, (3) whether
or not the complainant is considered an employee of the
respondents since March 1987.
The first issue: Respondent Delfin Garcia insists that he did
not dismiss the complainant and that he can return to his
work after his one month suspension, (affidavit of respondent
Garcia, marked as Annex "H" of his position paper). On the
other hand, complainant Lacson maintains that he reported
for work several times but respondent Garcia refused to take
him back and that the former told him to look for another
job.chanrobles.com.ph : virtual law library
Let us scrutinize the evidence. The incident involving the
complainant and Julius Viray, also an employee of the
respondents, wherein Viray allegedly mauled the
complainant, happened on January 28, 1993. On February
1993, the complainant submitted his handwritten explanation
blaming Viray as the aggressor. According to the
complainant, Viray was drunk at the time of the incident and
although he avoided Viray, the latter armed with a lead pipe,
followed him and wanted to kill him (Annex "C"
complainant). Viray also submitted his handwritten
explanation on February 2, 1993 (see Annex "E-1" of
respondents position paper). Viray only stated that a
"heated argument transpired." On March 31, 1993,

respondent Garcia issued a Memorandum suspending both

the complainant and Viray for one (1) month effective April
15, 1993 and at the same time required the complainant to
explain why he should not be terminated for being absent
from Feb. 15, 1993, (Annex "F", respondents). The question
is, why did it take respondent Delfin Garcia one (1) month or
more to decide and issue an order suspending the
complainant and Viray? Why did he not suspend the two
immediately after the incident? This leads credence to the
complainants allegation that he reported for work after
submitting his explanation but respondent Garcia refused to
admit him back and told him to take a vacation or to look for
another work, hence he decided to file a complaint against
him on Feb, 4, 1993, which was later dismissed without
prejudice, the reason for the dismissal of which was not
explained to us by the complainant. Moreover, it is true that
the complainant failed to report for work since Feb. 15, 1993,
why did respondent Garcia not issue an order or
memorandum after the complainant failed to report for a
number of days and directing the complainant to report
immediately otherwise his employment will be terminated?
We also agree with the complainants argument that the
respondents should not have asked him to explain his alleged
failure to report for work since Feb. 15, 1993, because he has
already filed a complaint against Garcia earlier.
The second issue; Annexes "G", "G-1" to "G-14" of the
respondents, which are samples of respondents payroll, show
that whenever the complainant rendered overtime services,
he was paid accordingly. Is he entitled to his claim for 13th
monthpay, service incentive leave pay, vacation in sick leave
pay and separation pay? Respondents maintain that since
the complainant was employed by them only on February 1,
1991, he has no right to claim benefits that arose before his
employment with them. That since he was not dismissed
from his employment, he is not also entitled to his claim for
separation pay. (The resolution of this issue will also resolve
the second issue)
Respondents argue that the services of the complainant with
NAPCO since March 1987, cannot be credited or counted to
his length of service with LUZMART because his subsequent

employment with LUZMART is a new employment as shown in

his employment contract (Annex "D" respondents) with
LUZMART.chanrobles virtual lawlibrary
In the case of MDII Supervisors and Confidential Employees
Association (FFW) v. Presidential Assistant on Legal Affairs,
79 SCRA 40 (1977), the Supreme Court ruled that:chanrob1es
virtual 1aw library
. . . And there is no law which requires the purchaser to
absorb the employees of the selling corporation.
As there is no such law, the most that the purchasing
company may do, for purposes of public policy and social
justice, is to give preference to the qualified separated
employees of the selling company, who in their judgment are
necessary in the continued operation of the business
establishment. This RCAM did. It required private respondents
to reapply as new employees as a condition for rehiring
subject to the usual probationary status, the latters past
services with the petitioners, transferors not recognized (San
Felipe Neri School of Mandaluyong, Inc., et. Al. Vs. NLRC,
Roman Catholic Archbishop of Manila (RCAM), et. al., G.R. No.
78350, Sept. 11, 1991.).
Except for his bare allegation that LUZMART was only
organized by the controlling stockholders of NAPCO to
acquire or gain control of the latter, the complainant did not
present sufficient evidence to prove his allegation, LUZMART
is an entirely new corporation or entity with a distinct
personality from NAPCO, and is not an alter ego of NAPCO.
Therefore, LUZMART is not under obligation to absorb the
workers of NAPCO or to absorb the length of service earned
by its employees.
The respondents are therefore correct in their assertion that
they should not be answerable for the complainants claim
for benefits that may be due him before January 1, 1991.
As we have discussed earlier, the complainant herein was
constructively dismissed from his employment by respondent
Delfin Garcia because of the latters refusal to admit him

back to work inspite of the complainants insistence to

resume his work after he has given his explanation.
On appeal, respondent contends that the Labor Arbiter erred
in awarding backwages to the complainant from February 1,
1993 up to the date of the promulgation of the decision, and
in awarding separation pay of one month pay for every year
of service.
We are in full accord with the Labor Arbiters conclusion that
the complainant was constructively dismissed by the
respondent Delfin Garcia when he refused to admit the
complainant despite his insistence to go back to work.
However, we delete the award of attorneys fees as this is not
a case of unlawful withholding of wages.
WHEREFORE, premises considered, the appealed decision is
modified by deleting the award of attorneys fees. In all other
respect, the same is affirmed.
SO ORDERED." 4
LUZMARTs motion for reconsideration 5 was denied hence,
this petition wherein LUZMART claims that the NLRC
committed grave abuse of discretion in holding that LACSON
was illegally dismissed.chanrobles virtual lawlibrary
In support of its petition, LUZMART claims that LACSON was
not dismissed but was merely suspended as shown by the
March 31, 1993 memorandum. 6 His suspension was a
consequence of the imposition of disciplinary measures on
him as fighting within the company premises constitutes
serious misconduct and disorderly behavior. The fact that
LUZMART did not immediately suspend him after the fighting
incident does not establish that he was dismissed from his
employment as there is no law which requires an employer to
immediately rule on any infraction under investigation after
the filing of the explanation of the person under
investigation. Neither is LACSON entitled to backwages nor
separation pay as these are only granted to employees who
have been illegally dismissed from work and not to

employees like LACSON who abandoned his employment as

he failed to report to work from February 15, 1993 to March
31, 1993. 7

circumstances, both documents appear to have been

prepared in contemplation of the pending illegal dismissal
case filed against LUZMART.

We resolve to affirm the judgment of the NLRC.

The contention that LACSON abandoned his employment is

also without merit. Mere absence or failure to report for work,
after notice to return, is not enough to amount to such
abandonment. 13 For a valid finding of abandonment, two
factors must be present, viz; (1) the failure to report for work
or absence without valid or justifiable reason; and (2) a clear
intention to sever the employer-employee relationship, 14
with the second element as the more determinative factor
being manifested by some overt acts. 15 There must be a
concurrence of the intention to abandon and some overt acts
from which an employee may be deduced as having no more
intention to work. 16 Such intent to discontinue the
employment must be shown by clear proof that it was
deliberate and unjustified. 17

LUZMARTs claim that LACSON was merely suspended and

was still employed by LUZMART does not convince us that
LACSON was not dismissed from his employment. Said claim
was a mere afterthought to preempt or thwart the impending
illegal dismissal case filed by LACSON against LUZMART. As
found by the labor arbiter, LACSONs failure to report to work
was due to LUZMARTs refusal to admit him back. In fact,
LUZMART told him to go on vacation or to look for other work.
8
LACSONs dismissal is clearly established by the following
chronology of events: The mauling incident occurred on
January 28, 1993. LACSON submitted his written explanation
of the event on February 1, 1993. On February 4, 1993,
LACSON attempted to report for work but LUZMART refused
to admit him. On February 11, 1993, LACSON filed an action
for illegal dismissal with the NLRC. 9 On April 13, 1993,
LUZMART sent LACSON the memorandum ordering LACSONs
suspension dated on March 31, 1993. By this time, LUZMART
already knew of the pending illegal dismissal case against it
as it was already directed by the NLRC to submit its position
paper on April 5, 1993. LUZMARTs reliance on the March 31,
1993 memorandum 10 and the February 1-15, 1993 payroll
11 to prove that LACSON was merely suspended is therefore
unavailing. The March 31, 1993 memorandum is at most selfserving; a ploy to cover up the dismissal of LACSON since this
was issued after LUZMART had knowledge of the illegal
dismissal case filed against it by LACSON on February 11,
1993. Likewise, the veracity of the February 1-15, 1993
payroll that purportedly shows that LACSON was included in
LUZMARTs payroll is of doubtful probative value. First of all, it
does not contain a certification by Charito Fernandez at its
back page, unlike the other payrolls 12 attached as annexes
to LUZMARTs petition. Secondly, said payroll does not
contain the signatures of the other employees as proof that
they received their salaries for the said period. Given these

LACSONs absence from work was not without a valid reason.

It was petitioner who did not allow him to work and in fact
told him to go on vacation or to look for other work. This is
tantamount to a constructive dismissal which is defined as a
"quitting because continued employment is rendered
impossible, unreasonable or unlikely; as an offer involving a
demotion in rank and diminution in pay" 18 . Since LACSON
was denied entry into his workplace, it was impossible for
him to return to work. It would be unjust to allow herein
petitioners to claim as a ground for abandonment a situation
which they themselves had brought about. 19 Moreover,
LACSONs filing of the complaint for illegal dismissal on
February 11, 1993, or seven days after his alleged
abandonment, negates said charge. It is highly illogical for an
employee to "abandon" his employment and thereafter file a
complaint for illegal dismissal. 20
We also do not agree with LUZMART that LACSON gave just
cause for the imposition of disciplinary measures upon him.
Although fighting within company premises may constitute
serious misconduct under Article 282 21 of the Labor Code
and may be a just cause to terminate ones employment 22 ,
every fight within company premises in which an employee is

involved would not warrant his dismissal. This is especially

true when the employee concerned did not instigate the fight
and was in fact the victim who was constrained to defend
himself. In the present case, it appears that LACSON was
assaulted by Julius Viray (VIRAY), a co-employee, after they
were questioned about missing diesel fuel. LACSON
attempted to avoid the conflict since VIRAY was intoxicated
but VIRAY followed him and after an exchange of words,
VIRAY punched him while saying "Papatayin Kita" (I will kill
you). After being punched a second time, LACSON punched
back. He thereafter ran towards the dressing plant after his
companion, a certain DANNY, told him to run. VIRAY was
persistent and followed LACSON and continued delivering
punches at him. LACSON ran away for a second time but
VIRAY still pursued him and even armed himself with a lead
pipe. LACSON sustained wounds on his head and forehead
due to VIRAYs use of the lead pipe. The Medico-Legal
Certificate 23 issued by the Gov. Teofilo Sison Memorial
Hospital corroborates LACSONs injuries. Given the above
circumstances, it is not difficult to understand why LACSON
had to defend himself.chanrobles virtual lawlibrary
Even assuming that there was just cause to dismiss LACSON,
strict compliance by the employer with the demands of both
procedural and substantive due process is a condition sine
qua non for the termination to be declared valid. The law
requires that the employer must furnish the worker sought to
be dismissed with two written notices before termination of
employment can be legally effected:chanrob1es virtual 1aw
library
1. notice which apprises the employee of the particular acts
or omissions for which his dismissal is sought; and
2. the subsequent notice which informs the employee of the
employers decision to dismiss him. 24
It is unclear whether LUZMART complied with the first
required written notice; apparently, LACSON was able to give
his account of the fight. However, even assuming that
LUZMART complied with the first written notice i.e. the charge
against LACSON with fighting within company premises, the

evidence fails to show compliance with the second notice

requirement; to inform LACSON of the decision to dismiss
him. Such failure to comply with said requirements taints
LACSONs dismissal with illegality.
An illegally dismissed employee is entitled to 1) either
reinstatement or separation pay if reinstatement is no longer
viable, and 2) backwages. 25 In the present case, LACSON is
entitled to be reinstated, as there is no evidence to show that
reinstatement is no longer possible considering LUZMARTs
position in this appeal is that LACSON was never dismissed
but merely suspended. He is also entitled to backwages
computed from the time of illegal dismissal, in this case on
February 4, 1993 26 (not February 1, 1993 as found by the
NLRC) up to the time of actual reinstatement, without
qualification or deduction 27 .
WHEREFORE, the assailed decision of the NLRC is AFFIRMED
and the instant petition is hereby DISMISSED with the
MODIFICATION that LUZMART reinstate LACSON to his former
position and pay him backwages computed from the date of
illegal dismissal on February 4, 1993 up to the time of actual
reinstatement.
No pronouncement as to costs.
SO ORDERED.
ARSENIO P. LUMIQUED (deceased), Regional Director,
DAR CAR, Represented by his Heirs, Francisca A.
Lumiqued, May A. Lumiqued, Arlene A. Lumiqued and
Richard A. Lumiqued, Petitioners, v. Honorable
APOLINIO G. EXEVEA, ERDOLFO V. BALAJADIA and
FELIX T. CABADING, ALL Members of Investigating
Committee, created by DOJ Order No. 145 on May 30,
1992; HON. FRANKLIN M. DRILON, SECRETARY OF
JUSTICE, HON. ANTONIO T. CARPIO, CHIEF Presidential
Legal Adviser/Counsel; and HON. LEONARDO A.
QUISIMBING, Senior Deputy Executive Secretary of the
Office of the President, and JEANNETTE OBARZAMUDIO, Private Respondent, Respondents.

DECISION
ROMERO, J.:
Does the due process clause encompass the right to be
assisted by counsel during an administrative inquiry?
Arsenio P. Lumiqued was the Regional Director of the
Department of Agrarian Reform Cordillera Autonomous
Region (DAR-CAR) until President Fidel V. Ramos dismissed
him from that position pursuant to Administrative Order No.
52 dated May 12, 1993. In view of Lumiqueds death on May
19, 1994, his heirs instituted this petition
for certiorari and mandamus, questioning such order.
The dismissal was the aftermath of three complaints filed by
DAR-CAR Regional Cashier and private respondent Jeannette
Obar-Zamudio with the Board of Discipline of the DAR. The
first affidavit-complaint dated November 16, 1989,1charged
Lumiqued with malversation through falsification of official
documents. From May to September 1989, Lumiqued
allegedly committed at least 93 counts of falsification by
padding gasoline receipts. He even submitted a vulcanizing
shop receipt worth P550.00 for gasoline bought from the
shop, and another receipt for P660.00 for a single vulcanizing
job. With the use of falsified receipts, Lumiqued claimed and
was reimbursed the sum of P44,172.46. Private respondent
added that Lumiqued seldom made field trips and preferred
to stay in the office, making it impossible for him to consume
the nearly 120 liters of gasoline he claimed everyday.
In her second affidavit-complaint dated November 22,
1989,2 private respondent accused Lumiqued with violation
of Commission on Audit (COA) rules and regulations, alleging
that during the months of April, May, July, August, September
and October, 1989, he made unliquidated cash advances in
the total amount of P116,000.00. Lumiqued purportedly

defrauded the government by deliberately concealing his

unliquidated cash advances through the falsification of
accounting entries in order not to reflect on `Cash advances
of other officials under code 8-70-600 of accounting rules.
The third affidavit-complaint dated December 15,
1989,3 charged Lumiqued with oppression and harassment.
According to private respondent, her two previous complaints
prompted Lumiqued to retaliate by relieving her from her
post as Regional Cashier without just cause.
The three affidavit-complaints were referred in due course to
the Department of Justice (DOJ) for appropriate action. On
May 20, 1992, Acting Justice Secretary Eduardo G.
Montenegro issued Department Order No. 145 creating a
committee to investigate the complaints against Lumiqued.
The order appointed Regional State Prosecutor Apolinario
Exevea as committee chairman with City Prosecutor Erdolfo
Balajadia and Provincial Prosecutor Felix Cabading as
members. They were mandated to conduct an investigation
within thirty days from receipt of the order, and to submit
their report and recommendation within fifteen days from its
conclusion.
The investigating committee accordingly issued
a subpoena directing Lumiqued to submit his counteraffidavit on or before June 17, 1992. Lumiqued, however,
filed instead an urgent motion to defer submission of his
counter-affidavit pending actual receipt of two of private
respondents complaints. The committee granted the motion
and gave him a five-day extension.
In his counter-affidavit dated June 23, 1992, 4 Lumiqued
alleged, inter alia, that the cases were filed against him to
extort money from innocent public servants like him, and
were initiated by private respondent in connivance with a
certain Benedict Ballug of Tarlac and a certain Benigno

Aquino III. He claimed that the apparent weakness of the

charge was bolstered by private respondents execution of an
affidavit of desistance.5chanroblesvirtuallawlibrary
Lumiqued admitted that his average daily gasoline
consumption was 108.45 liters. He submitted, however, that
such consumption was warranted as it was the aggregate
consumption of the five service vehicles issued under his
name and intended for the use of the Office of the Regional
Director of the DAR. He added that the receipts which were
issued beyond his region were made in the course of his
travels to Ifugao Province, the DAR Central Office in Diliman,
Quezon City, and Laguna, where he attended a seminar.
Because these receipts were merely turned over to him by
drivers for reimbursement, it was not his obligation but that
of auditors and accountants to determine whether they were
falsified. He affixed his signature on the receipts only to
signify that the same were validly issued by the
establishments concerned in order that official transactions
of the DAR-CAR could be carried out.
Explaining why a vulcanizing shop issued a gasoline receipt,
Lumiqued said that he and his companions were cruising
along Santa Fe, Nueva Vizcaya on their way to Ifugao when
their service vehicle ran out of gas. Since it was almost
midnight, they sought the help of the owner of a vulcanizing
shop who readily furnished them with the gasoline they
needed. The vulcanizing shop issued its own receipt so that
they could reimburse the cost of the gasoline. Domingo
Lucero, the owner of said vulcanizing shop, corroborated this
explanation in an affidavit dated June 25, 1990. 6 With respect
to the accusation that he sought reimbursement in the
amount of P660.00 for one vulcanizing job, Lumiqued
submitted that the amount was actually only P6.60. Any error
committed in posting the amount in the books of the
Regional Office was not his personal error or accountability.

To refute private respondents allegation that he violated COA

rules and regulations in incurring unliquidated cash advances
in the amount of P116,000.00, Lumiqued presented a
certification7 of DAR-CAR Administrative Officer Deogracias F.
Almora that he had no outstanding cash advances on record
as of December 31, 1989.
In disputing the charges of oppression and harassment
against him, Lumiqued contended that private respondent
was not terminated from the service but was merely relieved
of her duties due to her prolonged absences. While admitting
that private respondent filed the required applications for
leave of absence, Lumiqued claimed that the exigency of the
service necessitated disapproval of her application for leave
of absence. He allegedly rejected her second application for
leave of absence in view of her failure to file the same
immediately with the head office or upon her return to work.
He also asserted that no medical certificate supported her
application for leave of absence.
In the same counter-affidavit, Lumiqued also claimed that
private respondent was corrupt and dishonest because a COA
examination revealed that her cash accountabilities from
June 22 to November 23, 1989, were short byP30,406.87.
Although private respondent immediately returned the
amount on January 18, 1990, the day following the
completion of the cash examination, Lumiqued claimed that
she should be relieved from her duties and assigned to jobs
that would not require handling of cash and money matters.
Committee hearings on the complaints were conducted on
July 3 and 10, 1992, but Lumiqued was not assisted by
counsel. On the second hearing date, he moved for its
resetting to July 17, 1992, to enable him to employ the
services of counsel. The committee granted the motion, but
neither Lumiqued nor his counsel appeared on the date he

himself had chosen, so the committee deemed the case

submitted for resolution.
On August 12, 1992, Lumiqued filed an urgent motion for
additional hearing,8 alleging that he suffered a stroke on July
10, 1992. The motion was forwarded to the Office of the
State Prosecutor apparently because the investigation had
already been terminated. In an order dated September 7,
1992,9 State Prosecutor Zoila C. Montero denied the
motion, viz:
The medical certificate given show(s) that respondent was
discharged from the Sacred Heart Hospital on July 17, 1992,
the date of the hearing, which date was upon the request of
respondent (Lumiqued). The records do not disclose that
respondent advised the Investigating committee of his
confinement and inability to attend despite his discharge,
either by himself or thru counsel. The records likewise do not
show that efforts were exerted to notify the Committee of
respondents condition on any reasonable date after July 17,
1992. It is herein noted that as early as June 23, 1992,
respondent was already being assisted by counsel.
Moreover an evaluation of the counter-affidavit submitted
reveal(s) the sufficiency, completeness and thoroughness of
the counter-affidavit together with the documentary evidence
annexed thereto, such that a judicious determination of the
case based on the pleadings submitted is already possible.
Moreover, considering that the complaint-affidavit was filed
as far back as November 16, 1989 yet, justice can not be
delayed much longer.
Following the conclusion of the hearings, the investigating
committee rendered a report dated July 31, 1992, 10 finding
Lumiqued liable for all the charges against him. It made the
following findings:

After a thorough evaluation of the evidences (sic) submitted

by the parties, this committee finds the evidence submitted
by the complainant sufficient to establish the guilt of the
respondent for Gross Dishonesty and Grave Misconduct.
That most of the gasoline receipts used by the respondent in
claiming for the reimbursement of his gasoline expenses
were falsified is clearly established by the 15 Certified Xerox
Copies of the duplicate receipts (Annexes G-1 to G-15) and
the certifications issued by the different gasoline stations
where the respondent purchased gasoline. Annexes `G-1 to
`G-15 show that the actual average purchase made by the
respondent is about 8.46 liters only at a purchase price of
P50.00, in contrast to the receipts used by the respondent
which reflects an average of 108.45 liters at a purchase price
of P550.00. Here, the greed of the respondent is made
manifest by his act of claiming reimbursements of more than
10 times the value of what he actually spends. While only 15
of the gasoline receipts were ascertained to have been
falsified, the motive, the pattern and the scheme employed
by the respondent in defrauding the government has,
nevertheless, been established.
That the gasoline receipts have been falsified was not
rebutted by the respondent. In fact, he had in effect admitted
that he had been claiming for the payment of an average
consumption of 108.45 liters/day by justifying that this was
being used by the 4 vehicles issued to his office. Besides he
also admitted having signed the receipts.
Respondents act in defrauding the government of a
considerable sum of money by falsifying receipts constitutes
not only Dishonesty of a high degree but also a criminal
offense for Malversation through Falsification of Official
Documents.

This committee likewise finds that the respondent have

(sic) unliquidated cash advances in the year 1989 which is in
violation of established office and auditing rules. His cash
advances totalling to about P116,000.00 were properly
documented. The requests for obligation of allotments and
the vouchers covering the amounts were all signed by him.
The mere certification issued by the Administrative Officer of
the DAR-CAR cannot therefore rebut these concrete
evidences (sic).
On the third complaint, this committee likewise believes that
the respondents act in relieving the complainant of her
functions as a Regional Cashier on December 1, 1989 was an
act of harassment. It is noted that this was done barely two
weeks after the complainant filed charges against her (sic).
The recommendation of Jose G. Medina of the Commission on
Audit came only on May 11, 1990 or almost six months after
the respondents order relieving the complainant was issued.
His act in harassing a subordinate employee in retaliation to
a complaint she filed constitute(s) Gross Misconduct on the
part of the respondent who is a head of office.
The affidavits of Joseph In-uyay and Josefina Guting are of no
help to the respondent. In fact, this only show(s) that he is
capable of giving bribes if only to have the cases against him
dismissed. He could not have given a certain Benigno Aquino
III the sum of P10,000.00 for any other purpose.

desistance11would not prevent the issuance of a resolution on

the matter considering that what was at stake was not only
the violation of complainants (herein private respondents)
personal rights but also the competence and fitness of the
respondent (Lumiqued) to remain in public office. He opined
that, in fact, the evidence on record could call for a punitive
action against the respondent on the initiative of the DAR.
On December 17, 1992, Lumiqued filed a motion for
reconsideration of the findings of the Committee with the
DOJ.12 Undersecretary Ramon S. Esguerra indorsed the
motion to the investigating committee.13 In a letter dated
April 1, 1993, the three-member investigating committee
informed Undersecretary Esguerra that the committee had
no more authority to act on the same (motion for
reconsideration) considering that the matter has already
been forwarded to the Office of the President and that their
authority under Department Order No. 145 ceased when they
transmitted their report to the DOJ.14 Concurring with this
view, Undersecretary Esguerra informed Lumiqued that the
investigating committee could no longer act on his motion for
reconsideration. He added that the motion was also
prematurely filed because the Office of the President (OP)
had yet to act on Secretary Drilons
recommendation.15chanroblesvirtuallawlibrary

Accordingly, the investigating committee recommended

Lumiqueds dismissal or removal from office, without
prejudice to the filing of the appropriate criminal charges
against him.

On May 12, 1993, President Fidel V. Ramos himself issued

Administrative Order No. 52 (A.O. No. 52),16 finding Lumiqued
administratively liable for dishonesty in the alteration of
fifteen gasoline receipts, and dismissing him from the
service, with forfeiture of his retirement and other benefits.
Thus:

Acting on the report and recommendation, former Justice

Secretary Franklin M. Drilon adopted the same in his
Memorandum to President Fidel V. Ramos dated October 22,
1992. He added that the filing of the affidavit of

That the receipts were merely turned over to him by his

drivers and that the auditor and accountant of the DAR-CAR
should be the ones to be held liable is untenable. The
receipts in question were signed by respondent for the

purpose of attesting that those receipts were validly issued

by the commercial establishments and were properly
disbursed and used in the official business for which it was
intended.
This Office is not about to shift the blame for all these to the
drivers employed by the DAR-CAR as respondent would want
us to do.
The OP, however, found that the charges of oppression and
harassment, as well as that of incurring unliquidated cash
advances, were not satisfactorily established.
In a petition for appeal17 addressed to President Ramos,
Lumiqued prayed that A.O. No. 52 be reconsidered and that
he be reinstated to his former position with all the benefits
accorded to him by law and existing rules and regulations.
This petition was basically premised on the affidavit dated
May 27, 1993, of a certain Dwight L. Lumiqued, a former
driver of the DAR-CAR, who confessed to having authored the
falsification of gasoline receipts and attested to petitioner
Lumiqueds being an honest man who had no premonition
that the receipts he (Dwight) turned over to him were
altered.18crlwvirtualibrry
Treating the petition for appeal as a motion for the
reconsideration of A.O. No. 52, the OP, through Senior Deputy
Executive Secretary Leonardo A. Quisumbing, denied the
same on August 31, 1993.
Undaunted, Lumiqued filed a second motion for
reconsideration, alleging, among other things, that he was
denied the constitutional right to counsel during the
hearing.19 On May 19, 1994,20 however, before his motion
could be resolved, Lumiqued died. On September 28,
1994,21 Secretary Quisumbing denied the second motion for
reconsideration for lack of merit.

Hence, the instant petition

for certiorari and mandamus praying for the reversal of the
Report and Recommendation of the Investigating Committee,
the October 22, 1992, Memorandum of then Justice Secretary
Drilon, A.O. No. 52 issued by President Ramos, and the orders
of Secretary Quisumbing. In a nutshell, it prays for the
payment of retirement benefits and other benefits accorded
to deceased Arsenio Lumiqued by law, payable to his heirs;
and the backwages from the period he was dismissed from
service up to the time of his death on May 19,
1994.22chanroblesvirtuallawlibrary
Petitioners fault the investigating committee for its failure to
inform Lumiqued of his right to counsel during the hearing.
They maintain that his right to counsel could not be waived
unless the waiver was in writing and in the presence of
counsel. They assert that the committee should have
suspended the hearing and granted Lumiqued a reasonable
time within which to secure a counsel of his own. If
suspension was not possible, the committee should have
appointed a counsel de oficio to assist him.
These arguments are untenable and misplaced. The right to
counsel, which cannot be waived unless the waiver is in
writing and in the presence of counsel, is a right afforded a
suspect or an accused during custodial investigation. 23 It is
not an absolute right and may, thus, be invoked or rejected
in a criminal proceeding and, with more reason, in an
administrative inquiry. In the case at bar, petitioners invoke
the right of an accused in criminal proceedings to have
competent and independent counsel of his own choice.
Lumiqued, however, was not accused of any crime in the
proceedings below. The investigation conducted by the
committee created by Department Order No. 145 was for the
purpose of determining if he could be held administratively
liable under the law for the complaints filed against him. The

order issued by Acting Secretary of Justice Montenegro states

thus:
In the interest of the public service and pursuant to the
provisions of existing laws, a Committee to conduct the
formal investigation of the administrative complaint for
oppression, dishonesty, disgraceful and immoral conduct,
being notoriously undesirable and conduct prejudicial to the
best interest of the service against Mr. ARSENIO P.
LUMIQUED, Regional Director, Department of Agrarian
Reform, Cordillera Autonomous Region, is hereby created x x
x.24chanroblesvirtuallawlibrary
As such, the hearing conducted by the investigating
committee was not part of a criminal prosecution. This was
even made more pronounced when, after finding Lumiqued
administratively liable, it hinted at the filing of criminal case
for malversation through falsification of public documents in
its report and recommendation.
Petitioners misconception on the nature of the
investigation 25 conducted against Lumiqued appears to have
been engendered by the fact that the DOJ conducted it. While
it is true that under the Administrative Code of 1987, the DOJ
shall administer the criminal justice system in accordance
with the accepted processes thereof consisting in the
investigation of the crimes, prosecution of offenders and
administration of the correctional system,26 conducting
criminal investigations is not its sole function. By its power to
perform such other functions as may be provided by
law, 27 prosecutors may be called upon to conduct
administrative investigations. Accordingly, the investigating
committee created by Department Order No. 145 was dutybound to conduct the administrative investigation in
accordance with the rules therefor.

While investigations conducted by an administrative body

may at times be akin to a criminal proceeding, the fact
remains that under existing laws, a party in an administrative
inquiry may or may not be assisted by counsel,irrespective of
the nature of the charges and of the respondents capacity to
represent himself and no duty rests on such a body to furnish
the person being investigated with counsel. 28 In an
administrative proceeding such as the one that transpired
below, a respondent (such as Lumiqued) has the option of
engaging the services of counsel or not. This is clear from the
provisions of Section 32, Article VII of Republic Act No.
226029 (otherwise known as the Civil Service Act) and Section
39, paragraph 2, Rule XIV (on discipline) of the Omnibus
Rules Implementing Book V of Executive Order No.
29230 (otherwise known as the Administrative Code of 1987).
Excerpts from the transcript of stenographic notes of the
hearings attended by Lumiqued31 clearly show that he was
confident of his capacity and so opted to represent himself.
Thus, the right to counsel is not imperative in administrative
investigations because such inquiries are conducted merely
to determine whether there are facts that merit disciplinary
measures against erring public officers and employees, with
the purpose of maintaining the dignity of government
service.
Furthermore, petitioners reliance on Resolution No. 94-0521
of the Civil Service Commission on the Uniform Procedure in
the Conduct of Administrative Investigation stating that a
respondent in an administrative complaint must be informed
of his right to the assistance of a counsel of his choice, 32 is
inappropriate. In the first place, this resolution is applicable
only to cases brought before the Civil Service
Commission.33 Secondly, said resolution, which is dated
January 25, 1994, took effect fifteen days following its
publication in a newspaper of general circulation, 34 much
later than the July 1992 hearings of the investigating

committee created by Department Order No. 145. Thirdly,

the same committee was not remiss in the matter of
reminding Lumiqued of his right to counsel. Thus at the July
3, 1992, hearing, Lumiqued was repeatedly appraised of his
option to secure services of counsel:

In the course of private respondents damaging testimony,

the investigating committee once again reminded Lumiqued
of his need for a counsel. Thus:

RSP EXEVEA:

Q. (To Director Lumiqued) You really wish to go through with

this even without your counsel?

This is an administrative case against Director Lumiqued.

Director Lumiqued is present. The complainant is present,
Janet Obar-Zamudio. Complainant has just been furnished
with a copy of the counter-affidavit of the respondent. Do you
have a counsel, Director?
DIR. LUMIQUED:

CP BALAJADIA:

DIRECTOR LUMIQUED:
A. I think so, Sir.
CP BALAJADIA:

I did not bring anybody, Sir, because when I went to see him,
he told me, Sir, that he has already set a hearing, morning
and afternoon today.

Let us make it of record that we have been warning you to

proceed with the assistance of counsel but you said that you
can take care of yourself so we have no other alternative but
to proceed.36 (Underscoring supplied)

RSP EXEVEA:

Thereafter, the following colloquies transpired:

So, we will proceed with the hearing even without your

counsel? You are willing to proceed with the hearing even
without your counsel?

CP BALAJADIA:

DIR. LUMIQUED:

We will suspend in the meantime that we are waiting for the

supplemental affidavit you are going to present to us. Do you
have any request from the panel of investigators, Director
Lumiqued?

Yes, I am confident...
DIRECTOR LUMIQUED:
CP BALAJADIA:

DIR. LUMIQUED:

I was not able to bring a lawyer since the lawyer I requested

to assist me and was the one who prepared my counteraffidavit is already engaged for a hearing and according to
him he is engaged for the whole month of July.

That is my concern.35 (Underscoring supplied)

RSP EXEVEA:

You are confident that you will be able to represent yourself?

We cannot wait...

FISCAL BALAJADIA:

CP BALAJADIA:

I notice also Mr. Chairman that the respondent is not being

represented by a counsel. The last time he was asked to
invite his lawyer in this investigation. May we know if he has
a lawyer to represent him in this investigation?

Why dont you engage the services of another counsel. The

charges against you are quite serious. We are not saying you
are guilty already. We are just apprehensive that you will go
through this investigation without a counsel. We would like
you to be protected legally in the course of this investigation.
Why dont you get the services of another counsel. There are
plenty here in Baguio...
DIRECTOR LUMIQUED:

DIR. LUMIQUED:
There is none Sir because when I went to my lawyer, he told
me that he had set a case also at 9:30 in the other court and
he told me if there is a possibility of having this case
postponed anytime next week, probably Wednesday so we
will have good time (sic) of presenting the affidavit.

I will try to see, Sir...

FISCAL BALAJADIA:
CP BALAJADIA:
Please select your date now, we are only given one month to
finish the investigation, Director Lumiqued.

Are you moving for a postponement Director? May I throw

this to the panel. The charges in this case are quite serious
and he should be given a chance to the assistance of a
counsel/lawyer.

RSP EXEVEA:
RSP EXEVEA:
We will not entertain any postponement. With or without
counsel, we will proceed.
CP BALAJADIA:
Madam Witness, will you please submit the document which
we asked for and Director Lumiqued, if you have other
witnesses, please bring them but reduce their testimonies in
affidavit form so that we can expedite with the
proceedings.37chanroblesvirtuallawlibrary
At the hearing scheduled for July 10, 1992, Lumiqued still did
not avail of the services of counsel. Pertinent excerpts from
said hearing follow:

And is (sic) appearing that the supplemental-affidavit has

been furnished him only now and this has several documents
attached to it so I think we could grant him one last
postponement considering that he has already asked for an
extension.
DIR. LUMIQUED:
Furthermore Sir, I am now being bothered by my heart
ailment.38chanroblesvirtuallawlibrary
The hearing was reset to July 17, 1992, the date when
Lumiqued was released from the hospital. Prior to said date,

however, Lumiqued did not inform the committee of his

confinement. Consequently, because the hearing could not
push through on said date, and Lumiqued had already
submitted his counter-affidavit, the committee decided to
wind up the proceedings. This did not mean, however, that
Lumiqued was short-changed in his right to due process.
Lumiqued, a Regional Director of a major department in the
executive branch of the government, graduated from the
University of the Philippines (Los Baos) with the degree of
Bachelor of Science major in Agriculture, was a recipient of
various scholarships and grants, and underwent training
seminars both here and abroad.39 Hence, he could have
defended himself if need be, without the help of counsel, if
truth were on his side. This, apparently, was the thought he
entertained during the hearings he was able to attend. In his
statement, That is my concern, one could detect that it had
been uttered testily, if not exasperatedly, because of the
doubt or skepticism implicit in the question, You are confident
that you will be able to represent yourself? despite his having
positively asserted earlier, Yes, I am confident. He was
obviously convinced that he could ably represent himself.
Beyond repeatedly reminding him that he could avail himself
of counsel and as often receiving the reply that he is
confident of his ability to defend himself, the investigating
committee could not do more. One can lead a horse to water
but cannot make him drink.

indispensable. The legal profession was not engrafted in the

due process clause such that without the participation of its
members, the safeguard is deemed ignored or violated. The
ordinary citizen is not that helpless that he cannot validly act
at all except only with a lawyer at his side.
In administrative proceedings, the essence of due process is
simply the opportunity to explain ones side. One may be
heard, not solely by verbal presentation but also, and
perhaps even much more creditably as it is more practicable
than oral arguments, through pleadings. 41 An actual hearing
is not always an indispensable aspect of due process. 42 As
long as a party was given the opportunity to defend his
interests in due course, he cannot be said to have been
denied due process of law, for this opportunity to be heard is
the very essence of due process.43 Moreover, this
constitutional mandate is deemed satisfied if a person is
granted an opportunity to seek reconsideration of the action
or ruling complained of.44 Lumiqueds appeal and his
subsequent filing of motions for reconsideration cured
whatever irregularity attended the proceedings conducted by
the committee.45crlwvirtualibrry

The right to counsel is not indispensable to due process

unless required by the Constitution or the law. In Nera v.
Auditor General,40 the Court said:

The constitutional provision on due process safeguards life,

liberty and property.46 In the early case of Cornejo v. Gabriel
and Provincial Board of Rizal 47 the Court held that a public
office is not property within the sense of the constitutional
guarantee of due process of law for it is a public trust or
agency. This jurisprudential pronoucement has been
enshrined in the 1987 Constitution under Article XI, Section 1
on accountability of public officers, as follows:

x x x. There is nothing in the Constitution that says that a

party in a non-criminal proceeding is entitled to be
represented by counsel and that, without such
representation, he shall not be bound by such proceedings.
The assistance of lawyers, while desirable, is not

Section 1. Public office is a public trust. Public officers and

employees must at all times be accountable to the people,
serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest
lives.

When the dispute concerns ones constitutional right to

security of tenure, however, public office is deemed
analogous to property in a limited sense; hence, the right to
due process could rightfully be invoked. Nonetheless, the
right to security of tenure is not absolute. Of equal weight is
the countervailing mandate of the Constitution that all public
officers and employees must serve with responsibility,
integrity, loyalty and efficiency.48 In this case, it has been
clearly shown that Lumiqued did not live up to this
constitutional precept.
The committees findings pinning culpability for the charges
of dishonesty and grave misconduct upon Lumiqued were
not, as shown above, fraught with procedural mischief. Its
conclusions were founded on the evidence presented and
evaluated as facts. Well-settled in our jurisdiction is the
doctrine that findings of fact of administrative agencies must
be respected as long as they are supported by substantial
evidence, even if such evidence is not overwhelming or
preponderant.49 The quantum of proof necessary for a finding
of guilt in administrative cases is only substantial evidence or
such relevant evidence as a reasonable mind might accept as
adequate to support a
conclusion.50chanroblesvirtuallawlibrary
Consequently, the adoption by Secretary Drilon and the OP of
the committees recommendation of dismissal may not in any
way be deemed tainted with arbitrariness amounting to
grave abuse of discretion. Government officials are presumed
to perform their functions with regularity. Strong evidence is
not necessary to rebut that presumption,51 which petitioners
have not successfully disputed in the instant case.
Dishonesty is a grave offense penalized by dismissal under
Section 23 of Rule XIV of the Omnibus Rules Implementing
Book V of the Administrative Code of 1987. Under Section 9
of the same Rule, the penalty of dismissal carries with it

cancellation of eligibility, forfeiture of leave credits and

retirement benefits, and the disqualification for
reemployment in the government service. The instant
petition, which is aimed primarily at the payment of
retirement benefits and other benefits plus backwages from
the time of Lumiqueds dismissal until his demise, must,
therefore, fail.
WHEREFORE, the instant petition
for certiorari and mandamus is hereby DISMISSED and
Administrative Order No. 52 of the Office of the President is
AFFIRMED. Costs against petitioners.
SO ORDERED.

JOSE L. ATIENZA, JR., MATIAS V. DEFENSOR, JR., RODOLFO G.

VALENCIA, DANILO E. SUAREZ, SOLOMON R. CHUNGALAO,
SALVACION ZALDIVAR-PEREZ, HARLIN CAST-ABAYON, MELVIN
G. MACUSI and ELEAZAR P.
QUINTO, Petitioners, v. COMMISSION ON ELECTIONS,
MANUEL A. ROXAS II, FRANKLIN M. DRILON and J.R.
NEREUS O. ACOSTA, Respondents.
DECISION
ABAD, J.:
This petition is an offshoot of two earlier cases already
resolved by the Court involving a leadership dispute within a
political party. In this case, the petitioners question their
expulsion from that party and assail the validity of the
election of new party leaders conducted by the respondents.
Statement of the Facts and the Case

For a better understanding of the controversy, a brief recall

of the preceding events is in order.
On July 5, 2005 respondent Franklin M. Drilon (Drilon), as
erstwhile president of the Liberal Party (LP), announced his
party's withdrawal of support for the administration of
President Gloria Macapagal-Arroyo. But petitioner Jose L.
Atienza, Jr. (Atienza), LP Chairman, and a number of party
members denounced Drilon's move, claiming that he made
the announcement without consulting his party.
On March 2, 2006 petitioner Atienza hosted a party
conference to supposedly discuss local autonomy and party
matters but, when convened, the assembly proceeded to
declare all positions in the LP's ruling body vacant and
elected new officers, with Atienza as LP president.
Respondent Drilon immediately filed a petition 1cralaw with
the Commission on Elections (COMELEC) to nullify the
elections. He claimed that it was illegal considering that the
party's electing bodies, the National Executive Council
(NECO) and the National Political Council (NAPOLCO), were
not properly convened. Drilon also claimed that under the
amended LP Constitution,2cralaw party officers were elected
to a fixed three-year term that was yet to end on November
30, 2007.
On the other hand, petitioner Atienza claimed that the
majority of the LP's NECO and NAPOLCO attended the March
2, 2006 assembly. The election of new officers on that
occasion could be likened to "people power," wherein the LP
majority removed respondent Drilon as president by direct
action. Atienza also said that the amendments3cralaw to the
original LP Constitution, or the Salonga Constitution, giving
LP officers a fixed three-year term, had not been properly
ratified. Consequently, the term of Drilon and the other
officers already ended on July 24, 2006.

On October 13, 2006, the COMELEC issued a

resolution,4cralaw partially granting respondent Drilon's
petition. It annulled the March 2, 2006 elections and ordered
the holding of a new election under COMELEC supervision. It
held that the election of petitioner Atienza and the others
with him was invalid since the electing assembly did not
convene in accordance with the Salonga Constitution. But,
since the amendments to the Salonga Constitution had not
been properly ratified, Drilon's term may be deemed to have
ended. Thus, he held the position of LP president in a
holdover capacity until new officers were elected.
Both sides of the dispute came to this Court to challenge the
COMELEC rulings. On April 17, 2007 a divided Court issued a
resolution,5cralawgranting respondent Drilon's petition and
denying that of petitioner Atienza. The Court held, through
the majority, that the COMELEC had jurisdiction over the
intra-party leadership dispute; that the Salonga Constitution
had been validly amended; and that, as a consequence,
respondent Drilon's term as LP president was to end only on
November 30, 2007.
Subsequently, the LP held a NECO meeting to elect new party
leaders before respondent Drilon's term expired. Fifty-nine
NECO members out of the 87 who were supposedly qualified
to vote attended. Before the election, however, several
persons associated with petitioner Atienza sought to clarify
their membership status and raised issues regarding the
composition of the NECO. Eventually, that meeting installed
respondent Manuel A. Roxas II (Roxas) as the new LP
president.
On January 11, 2008 petitioners Atienza, Matias V. Defensor,
Jr., Rodolfo G. Valencia, Danilo E. Suarez, Solomon R.
Chungalao, Salvacion Zaldivar-Perez, Harlin Cast-Abayon,
Melvin G. Macusi, and Eleazar P. Quinto, filed a petition for
mandatory and prohibitory injunction6cralaw before the

COMELEC against respondents Roxas, Drilon and J.R. Nereus

O. Acosta, the party secretary general. Atienza, et al. sought
to enjoin Roxas from assuming the presidency of the LP,
claiming that the NECO assembly which elected him was
invalidly convened. They questioned the existence of a
quorum and claimed that the NECO composition ought to
have been based on a list appearing in the party's 60th
Anniversary Souvenir Program. Both Atienza and Drilon
adopted that list as common exhibit in the earlier cases and
it showed that the NECO had 103 members.
Petitioners Atienza, et al. also complained that Atienza, the
incumbent party chairman, was not invited to the NECO
meeting and that some members, like petitioner Defensor,
were given the status of "guests" during the meeting.
Atienza's allies allegedly raised these issues but respondent
Drilon arbitrarily thumbed them down and "railroaded" the
proceedings. He suspended the meeting and moved it to
another room, where Roxas was elected without notice to
Atienza's allies.
On the other hand, respondents Roxas, et al. claimed that
Roxas election as LP president faithfully complied with the
provisions of the amended LP Constitution. The party's 60th
Anniversary Souvenir Program could not be used for
determining the NECO members because supervening events
changed the body's number and composition. Some NECO
members had died, voluntarily resigned, or had gone on
leave after accepting positions in the government. Others
had lost their re-election bid or did not run in the May 2007
elections, making them ineligible to serve as NECO members.
LP members who got elected to public office also became
part of the NECO. Certain persons of national stature also
became NECO members upon respondent Drilon's
nomination, a privilege granted the LP president under the
amended LP Constitution. In other words, the NECO

membership was not fixed or static; it changed due to

supervening circumstances.
Respondents Roxas, et al. also claimed that the party
deemed petitioners Atienza, Zaldivar-Perez, and Cast-Abayon
resigned for holding the illegal election of LP officers on
March 2, 2006. This was pursuant to a March 14, 2006
NAPOLCO resolution that NECO subsequently ratified.
Meanwhile, certain NECO members, like petitioners Defensor,
Valencia, and Suarez, forfeited their party membership when
they ran under other political parties during the May 2007
elections. They were dropped from the roster of LP members.
On June 18, 2009 the COMELEC issued the assailed resolution
denying petitioners Atienza, et al.'s petition. It noted that the
May 2007 elections necessarily changed the composition of
the NECO since the amended LP Constitution explicitly made
incumbent senators, members of the House of
Representatives, governors and mayors members of that
body. That some lost or won these positions in the May 2007
elections affected the NECO membership. Petitioners failed to
prove that the NECO which elected Roxas as LP president
was not properly convened.
As for the validity of petitioners Atienza, et al.'s expulsion as
LP members, the COMELEC observed that this was a
membership issue that related to disciplinary action within
the political party. The COMELEC treated it as an internal
party matter that was beyond its jurisdiction to resolve.
Without filing a motion for reconsideration of the COMELEC
resolution, petitioners Atienza, et al. filed this petition
for certiorari under Rule 65.
The Issues Presented

Respondents Roxas, et al. raise the following threshold

issues:
1. Whether or not the LP, which was not impleaded in the
case, is an indispensable party; and
2. Whether or not petitioners Atienza, et al., as ousted LP
members, have the requisite legal standing to question
Roxas election.
Petitioners Atienza, et al., on the other hand, raise the
following issues:
3. Whether or not the COMELEC gravely abused its discretion
when it upheld the NECO membership that elected
respondent Roxas as LP president;
4. Whether or not the COMELEC gravely abused its discretion
when it resolved the issue concerning the validity of the
NECO meeting without first resolving the issue concerning
the expulsion of Atienza, et al. from the party; and
5. Whether or not respondents Roxas, et al. violated
petitioners Atienza, et al.'s constitutional right to due process
by the latter's expulsion from the party.
The Court's Ruling
One. Respondents Roxas, et al. assert that the Court should
dismiss the petition for failure of petitioners Atienza, et al. to
implead the LP as an indispensable party. Roxas, et al. point
out that, since the petition seeks the issuance of a writ of
mandatory injunction against the NECO, the controversy
could not be adjudicated with finality without making the LP a
party to the case.7cralaw

But petitioners Atienza, et al.'s causes of action in this case

consist in respondents Roxas, et al.'s disenfranchisement of
Atienza, et al. from the election of party leaders and in the
illegal election of Roxas as party president. Atienza, et al.
were supposedly excluded from the elections by a series of
"despotic acts" of Roxas, et al., who controlled the
proceedings. Among these acts are Atienza, et al.'s expulsion
from the party, their exclusion from the NECO, and
respondent Drilon's "railroading" of election proceedings.
Atienza, et al. attributed all these illegal and prejudicial acts
to Roxas, et al.
Since no wrong had been imputed to the LP nor had some
affirmative relief been sought from it, the LP is not an
indispensable party. Petitioners Atienza, et al.'s prayer for the
undoing of respondents Roxas, et al.'s acts and the
reconvening of the NECO are directed against Roxas, et al.
Two. Respondents Roxas, et al. also claim that petitioners
Atienza, et al. have no legal standing to question the election
of Roxas as LP president because they are no longer LP
members, having been validly expelled from the party or
having joined other political parties.8cralaw As non-members,
they have no stake in the outcome of the action.
But, as the Court held in David v. MacapagalArroyo,9cralaw legal standing in suits is governed by the "real
parties-in-interest" rule under Section 2, Rule 3 of the Rules
of Court. This states that "every action must be prosecuted
or defended in the name of the real party-in-interest." And
"real party-in-interest" is one who stands to be benefited or
injured by the judgment in the suit or the party entitled to
the avails of the suit. In other words, the plaintiff's standing is
based on his own right to the relief sought. In raising
petitioners Atienza, et al.'s lack of standing as a threshold
issue, respondents Roxas, et al. would have the Court

hypothetically assume the truth of the allegations in the

petition.
Here, it is precisely petitioners Atienza, et al.'s allegations
that respondents Roxas, et al. deprived them of their rights
as LP members by summarily excluding them from the LP
roster and not allowing them to take part in the election of its
officers and that not all who sat in the NECO were in the
correct list of NECO members. If Atienza, et al.'s allegations
were correct, they would have been irregularly expelled from
the party and the election of officers, void. Further, they
would be entitled to recognition as members of good
standing and to the holding of a new election of officers using
the correct list of NECO members. To this extent, therefore,
Atienza, et al. who want to take part in another election
would stand to be benefited or prejudiced by the Court's
decision in this case. Consequently, they have legal standing
to pursue this petition.
Three. In assailing respondent Roxas election as LP
president, petitioners Atienza, et al. claim that the NECO
members allowed to take part in that election should have
been limited to those in the list of NECO members appearing
in the party's 60th Anniversary Souvenir Program. Atienza, et
al. allege that respondent Drilon, as holdover LP president,
adopted that list in the earlier cases before the COMELEC and
it should thus bind respondents Roxas, et al. The Court's
decision in the earlier cases, said Atienza, et al., anointed
that list for the next party election. Thus, Roxas, et al. in
effect defied the Court's ruling when they removed Atienza
as party chairman and changed the NECO's
composition.10cralaw
But the list of NECO members appearing in the party's 60th
Anniversary Souvenir Program was drawn before the May
2007 elections. After the 2007 elections, changes in the
NECO membership had to be redrawn to comply with what

the amended LP Constitution required. Respondent Drilon

adopted the souvenir program as common exhibit in the
earlier cases only to prove that the NECO, which supposedly
elected Atienza as new LP president on March 2, 2006, had
been improperly convened. It cannot be regarded as an
immutable list, given the nature and character of the NECO
membership.
Nothing in the Court's resolution in the earlier cases implies
that the NECO membership should be pegged to the party's
60th Anniversary Souvenir Program. There would have been
no basis for such a position. The amended LP Constitution did
not intend the NECO membership to be permanent. Its
Section 2711cralaw provides that the NECO shall include all
incumbent senators, members of the House of
Representatives, governors, and mayors who were LP
members in good standing for at least six months. It follows
from this that with the national and local elections taking
place in May 2007, the number and composition of the NECO
would have to yield to changes brought about by the
elections.
Former NECO members who lost the offices that entitled
them to membership had to be dropped. Newly elected ones
who gained the privilege because of their offices had to come
in. Furthermore, former NECO members who passed away,
resigned from the party, or went on leave could not be
expected to remain part of the NECO that convened and held
elections on November 26, 2007. In addition, Section 27 of
the amended LP Constitution expressly authorized the party
president to nominate "persons of national stature" to the
NECO. Thus, petitioners Atienza, et al. cannot validly object
to the admission of 12 NECO members nominated by
respondent Drilon when he was LP president. Even if this
move could be regarded as respondents Roxas, et al.'s way of
ensuring their election as party officers, there was certainly

nothing irregular about the act under the amended LP

Constitution.
The NECO was validly convened in accordance with the
amended LP Constitution. Respondents Roxas, et al.
explained in details how they arrived at the NECO
composition for the purpose of electing the party
leaders.12cralaw The explanation is logical and consistent
with party rules. Consequently, the COMELEC did not gravely
abuse its discretion when it upheld the composition of the
NECO that elected Roxas as LP president.
Petitioner Atienza claims that the Court's resolution in the
earlier cases recognized his right as party chairman with a
term, like respondent Drilon, that would last up to November
30, 2007 and that, therefore, his ouster from that position
violated the Court's resolution. But the Court's resolution in
the earlier cases did not preclude the party from disciplining
Atienza under Sections 2913cralaw and 4614cralaw of the
amended LP Constitution. The party could very well remove
him or any officer for cause as it saw fit.
Four. Petitioners Atienza, et al. lament that the COMELEC
selectively exercised its jurisdiction when it ruled on the
composition of the NECO but refused to delve into the
legality of their expulsion from the party. The two issues, they
said, weigh heavily on the leadership controversy involved in
the case. The previous rulings of the Court, they claim,
categorically upheld the jurisdiction of the COMELEC over
intra-party leadership disputes.15cralaw
But, as respondents Roxas, et al. point out, the key issue in
this case is not the validity of the expulsion of petitioners
Atienza, et al. from the party, but the legitimacy of the NECO
assembly that elected respondent Roxas as LP president.
Given the COMELEC's finding as upheld by this Court that the
membership of the NECO in question complied with the LP

Constitution, the resolution of the issue of whether or not the

party validly expelled petitioners cannot affect the election of
officers that the NECO held.
While petitioners Atienza, et al. claim that the majority of LP
members belong to their faction, they did not specify who
these members were and how their numbers could possibly
affect the composition of the NECO and the outcome of its
election of party leaders. Atienza, et al. has not bothered to
assail the individual qualifications of the NECO members who
voted for Roxas. Nor did Atienza, et al. present proof that the
NECO had no quorum when it then assembled. In other
words, the claims of Atienza, et al. were totally unsupported
by evidence.
Consequently, petitioners Atienza, et al. cannot claim that
their expulsion from the party impacts on the party
leadership issue or on the election of respondent Roxas as
president so that it was indispensable for the COMELEC to
adjudicate such claim. Under the circumstances, the validity
or invalidity of Atienza, et al.'s expulsion was purely a
membership issue that had to be settled within the party. It is
an internal party matter over which the COMELEC has no
jurisdiction.
What is more, some of petitioner Atienza's allies raised
objections before the NECO assembly regarding the status of
members from their faction. Still, the NECO proceeded with
the election, implying that its membership, whose
composition has been upheld, voted out those objections.
The COMELEC's jurisdiction over intra-party disputes is
limited. It does not have blanket authority to resolve any and
all controversies involving political parties. Political parties
are generally free to conduct their activities without
interference from the state. The COMELEC may intervene in

disputes internal to a party only when necessary to the

discharge of its constitutional functions.
The COMELEC's jurisdiction over intra-party leadership
disputes has already been settled by the Court. The Court
ruled in Kalaw v. Commission on Elections 16cralaw that the
COMELEC's powers and functions under Section 2, Article IXC of the Constitution, "include the ascertainment of the
identity of the political party and its legitimate officers
responsible for its acts." The Court also declared in another
case17cralaw that the COMELEC's power to register political
parties necessarily involved the determination of the persons
who must act on its behalf. Thus, the COMELEC may resolve
an intra-party leadership dispute, in a proper case brought
before it, as an incident of its power to register political
parties.
The validity of respondent Roxas election as LP president is a
leadership issue that the COMELEC had to settle. Under the
amended LP Constitution, the LP president is the issuing
authority for certificates of nomination of party candidates
for all national elective positions. It is also the LP president
who can authorize other LP officers to issue certificates of
nomination for candidates to local elective posts. 18cralaw In
simple terms, it is the LP president who certifies the official
standard bearer of the party.
The law also grants a registered political party certain rights
and privileges that will redound to the benefit of its official
candidates. It imposes, too, legal obligations upon registered
political parties that have to be carried out through their
leaders. The resolution of the leadership issue is thus
particularly significant in ensuring the peaceful and orderly
conduct of the elections.19cralaw
Five. Petitioners Atienza, et al. argue that their expulsion
from the party is not a simple issue of party membership or

discipline; it involves a violation of their constitutionallyprotected right to due process of law. They claim that the
NAPOLCO and the NECO should have first summoned them to
a hearing before summarily expelling them from the party.
According to Atienza, et al., proceedings on party discipline
are the equivalent of administrative proceedings 20cralaw and
are, therefore, covered by the due process requirements laid
down in Ang Tibay v. Court of Industrial Relations. 21cralaw
But the requirements of administrative due process do not
apply to the internal affairs of political parties. The due
process standards set in Ang Tibay cover only administrative
bodies created by the state and through which certain
governmental acts or functions are performed. An
administrative agency or instrumentality "contemplates an
authority to which the state delegates governmental power
for the performance of a state function." 22cralaw The
constitutional limitations that generally apply to the exercise
of the state's powers thus, apply too, to administrative
bodies.
The constitutional limitations on the exercise of the state's
powers are found in Article III of the Constitution or the Bill of
Rights. The Bill of Rights, which guarantees against the
taking of life, property, or liberty without due process under
Section 1 is generally a limitation on the state's powers in
relation to the rights of its citizens. The right to due process
is meant to protect ordinary citizens against arbitrary
government action, but not from acts committed by private
individuals or entities. In the latter case, the specific statutes
that provide reliefs from such private acts apply. The right to
due process guards against unwarranted encroachment by
the state into the fundamental rights of its citizens and
cannot be invoked in private controversies involving private
parties.23cralaw

Although political parties play an important role in our

democratic set-up as an intermediary between the state and
its citizens, it is still a private organization, not a state
instrument. The discipline of members by a political party
does not involve the right to life, liberty or property within
the meaning of the due process clause. An individual has no
vested right, as against the state, to be accepted or to
prevent his removal by a political party. The only rights, if
any, that party members may have, in relation to other party
members, correspond to those that may have been freely
agreed upon among themselves through their charter, which
is a contract among the party members. Members whose
rights under their charter may have been violated have
recourse to courts of law for the enforcement of those rights,
but not as a due process issue against the government or
any of its agencies.

the political processes to operate without undue interference.

It is also consistent with the state policy of allowing a free
and open party system to evolve, according to the free
choice of the people.25cralaw

But even when recourse to courts of law may be made,

courts will ordinarily not interfere in membership and
disciplinary matters within a political party. A political party is
free to conduct its internal affairs, pursuant to its
constitutionally-protected right to free association. In Sinaca
v. Mula,24cralaw the Court said that judicial restraint in
internal party matters serves the public interest by allowing

WHEREFORE, the Court DISMISSES the petition and UPHOLDS

the Resolution of the Commission on Elections dated June 18,
2009 in COMELEC Case SPP 08-001.

To conclude, the COMELEC did not gravely abuse its

discretion when it upheld Roxas election as LP president but
refused to rule on the validity of Atienza, et al.'s expulsion
from the party. While the question of party leadership has
implications on the COMELEC's performance of its functions
under Section 2, Article IX-C of the Constitution, the same
cannot be said of the issue pertaining to Atienza, et al.'s
expulsion from the LP. Such expulsion is for the moment an
issue of party membership and discipline, in which the
COMELEC cannot intervene, given the limited scope of its
power over political parties.

SO ORDERED.