Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 168979 December 2, 2013

REBECCA PACAA-CONTRERAS and ROSALIE PACAA, Petitioners,

vs.
ROVILA WATER SUPPLY, INC., EARL U KOKSENG, LILIA TORRES, DALLA P.
ROMANILLOS and MARISSA GABUYA, Respondents.

DECISION

BRION, J.:

Before the Court is a petition for review on certiorari1 under Rule 4 of the Rules of Court
seeking the reversal of the decision2 dated January 27, 2005 and the resolution3 dated June 6,
2005 of the Courts of Appeals (CA) in CA-G.R. SP No. 71551. The CA set aside the orders dated
February 28, 20024 and April 1, 20025 of the Regional Trial Court (RTC), Branch 8, Cebu City,
which denied the motion to dismiss for reconsideration respectively, of respondents Rovila Water
Supply, Inc. (Rovilla, Inc.), Earl U. Kokseng, Lialia Torres, Dalla P. Romanillos and Marissa
Gabuya.

THE FACTUAL ANTECEDENTS

Petitioners Rebecca Pacaa-Contreras and Rosalie Pacaa, children of Lourdes Teves Pacaa and
Luciano Pacaa, filed the present case against Rovila Inc., Earl, Lilia, Dalla and Marisa for
accounting and damages.6

The petitioners claimed that their family has long been known in the community to be engaged in
the water supply business; they operated the "Rovila Water Supply" from their family residence
and were engaged in the distribution of water to customers in Cebu City. The petitioners alleged
that Lilia was a former trusted employee in the family business who hid business records and
burned and ransacked the family files. Lilia also allegedly posted security guards and barred the
members of the Pacaa family from operating their business. She then claimed ownership over
the family business through a corporation named "Rovila Water Supply, Inc." (Rovila Inc.) Upon
inquiry with the Securities and Exchange Commission (SEC), the petitioners claimed that Rovila
Inc. was surreptitiously formed with the respondents as the majority stockholders. The
respondents did so by conspiring with one another and forming the respondent corporation to
takeover and illegally usurp the family business registered name.7
In forming the respondent corporation, the respondents allegedly used the name of Lourdes as
one of the incorporators and made it appear in the SEC documents that the family business was
operated in a place other than the Pacaa residence. Thereafter, the respondents used the Pacaa
familys receipts and the deliveries and sales were made to appear as those of the respondent
Rovila Inc. Using this scheme, the respondents fraudulently appropriated the collections and
payments.8

The petitioners filed the complaint in their own names although Rosalie was authorized by
Lourdes through a sworn declaration and special power of attorney (SPA). The respondents filed
a first motion to dismiss on the ground that the RTC had no jurisdiction over an intra-corporate
controversy.9

The RTC denied the motion. On September 26, 2000, Lourdes died10 and the petitioners
amended their complaint, with leave of court, on October 2, 2000 to reflect this development.11

They still attached to their amended complaint the sworn declaration with SPA, but the caption
of the amended complaint remained the same.12

On October 10, 2000, Luciano also died.13

The respondents filed their Answer on November 16, 2000.14

The petitioners sister, Lagrimas Pacaa-Gonzales, filed a motion for leave to intervene and her
answer-in-intervention was granted by the trial court. At the subsequent pre-trial, the respondents
manifested to the RTC that a substitution of the parties was necessary in light of the deaths of
Lourdes and Luciano. They further stated that they would seek the dismissal of the complaint
because the petitioners are not the real parties in interest to prosecute the case. The pre-trial
pushed through as scheduled and the RTC directed the respondents to put into writing their
earlier manifestation. The RTC issued a pre-trial order where one of the issues submitted was
whether the complaint should be dismissed for failure to comply with Section 2, Rule 3 of the
Rules of Court which requires that every action must be prosecuted in the name of the real party
in interest.15

On January 23, 2002,16 the respondents again filed a motion to dismiss on the grounds, among
others, that the petitioners are not the real parties in interest to institute and prosecute the case
and that they have no valid cause of action against the respondents.

THE RTC RULING

The RTC denied the respondents motion to dismiss. It ruled that, save for the grounds for
dismissal which may be raised at any stage of the proceedings, a motion to dismiss based on the
grounds invoked by the respondents may only be filed within the time for, but before, the filing
of their answer to the amended complaint. Thus, even granting that the defenses invoked by the
respondents are meritorious, their motion was filed out of time as it was filed only after the
conclusion of the pre-trial conference. Furthermore, the rule on substitution of parties only
applies when the parties to the case die, which is not what happened in the present case.17

The RTC likewise denied the respondents motion for reconsideration.18

The respondents filed a petition for certiorari under Rule 65 of the Rules of Court with the CA,
invoking grave abuse of discretion in the denial of their motion to dismiss. They argued that the
deceased spouses Luciano and Lourdes, not the petitioners, were the real parties in interest. Thus,
the petitioners violated Section 16, Rule 3 of the Rules of Court on the substitution of parties.19

Furthermore, they seasonably moved for the dismissal of the case20 and the RTC never acquired
jurisdiction over the persons of the petitioners as heirs of Lourdes and Luciano.21

THE CA RULING

The CA granted the petition and ruled that the RTC committed grave abuse of discretion as the
petitioners filed the complaint and the amended complaint as attorneys-in-fact of their parents.
As such, they are not the real parties in interest and cannot bring an action in their own names;
thus, the complaint should be dismissed22 pursuant to the Courts ruling in Casimiro v. Roque
and Gonzales.23

Neither are the petitioners suing as heirs of their deceased parents. Pursuant to jurisprudence,24
the petitioners should first be declared as heirs before they can be considered as the real parties
in interest. This cannot be done in the present ordinary civil case but in a special proceeding for
that purpose. The CA agreed with the respondents that they alleged the following issues as
affirmative defenses in their answer: 1) the petitioners are not the real parties in interest; and 2)
that they had no legal right to institute the action in behalf of their parents.25

That the motion to dismiss was filed after the period to file an answer has lapsed is of no
moment. The RTC judge entertained it and passed upon its merit. He was correct in doing so
because in the pre-trial order, one of the submitted issues was whether the case must be
dismissed for failure to comply with the requirements of the Rules of Court. Furthermore, in
Dabuco v. Court of Appeals,26 the Court held that the ground of lack of cause of action may be
raised in a motion to dismiss at anytime.27

The CA further ruled that, in denying the motion to dismiss, the RTC judge acted contrary to
established rules and jurisprudence which may be questioned via a petition for certiorari. The
phrase "grave abuse of discretion" which was traditionally confined to "capricious and whimsical
exercise of judgment" has been expanded to include any action done "contrary to the
Constitution, the law or jurisprudence[.]"28

THE PARTIES ARGUMENTS

The petitioners filed the present petition and argued that, first, in annulling the interlocutory
orders, the CA unjustly allowed the motion to dismiss which did not conform to the rules.29

Specifically, the motion was not filed within the time for, but before the filing of, the answer to
the amended complaint, nor were the grounds raised in the answer. Citing Section 1, Rule 9 of
the Rules of Court, the respondents are deemed to have waived these grounds, as correctly held
by the RTC.30

Second, even if there is non-joinder and misjoinder of parties or that the suit is not brought in the
name of the real party in interest, the remedy is not outright dismissal of the complaint, but its
amendment to include the real parties in interest.31

Third, the petitioners sued in their own right because they have actual and substantial interest in
the subject matter of the action as heirs or co-owners, pursuant to Section 2, Rule 3 of the Rules
of Court.32

Their declaration as heirs in a special proceeding is not necessary, pursuant to the Courts ruling
in Marabilles, et al. v. Quito.33

Finally, the sworn declaration is evidentiary in nature which remains to be appreciated after the
trial is completed.34

The respondents reiterated in their comment that the petitioners are not the real parties in
interest.35

They likewise argued that they moved for the dismissal of the case during the pre-trial
conference due to the petitioners procedural lapse in refusing to comply with a condition
precedent, which is, to substitute the heirs as plaintiffs. Besides, an administrator of the estates of
Luciano and Lourdes has already been appointed.36

The respondents also argued that the grounds invoked in their motion to dismiss were timely
raised, pursuant to Section 2, paragraphs g and i, Rule 18 of the Rules of Court. Specifically, the
nature and purposes of the pre-trial include, among others, the dismissal of the action, should a
valid ground therefor be found to exist; and such other matters as may aid in the prompt
disposition of the action. Finally, the special civil action of certiorari was the proper remedy in
assailing the order of the RTC.37
THE COURTS RULING

We find the petition meritorious.

Petition for certiorari under Rule 65 is a proper remedy for a denial of a motion to dismiss
attended by grave abuse of discretion

In Barrazona v. RTC, Branch 61, Baguio City,38 the Court held that while an order denying a
motion to dismiss is interlocutory and non-appealable, certiorari and prohibition are proper
remedies to address an order of denial made without or in excess of jurisdiction. The writ of
certiorari is granted to keep an inferior court within the bounds of its jurisdiction or to prevent it
from committing grave abuse of discretion amounting to lack or excess of jurisdiction.

The history and development of the ground "fails to state a cause of action" in the 1940, 1964
and the present 1997 Rules of Court Preliminarily, a suit that is not brought in the name of the
real party in interest is dismissible on the ground that the complaint "fails to state a cause of
action."39

Pursuant to jurisprudence,40 this is also the ground invoked when the respondents alleged that
the petitioners are not the real parties in interest because: 1) the petitioners should not have filed
the case in their own names, being merely attorneys-in-fact of their mother; and 2) the petitioners
should first be declared as heirs. A review of the 1940, 1964 and the present 1997 Rules of Court
shows that the fundamentals of the ground for dismissal based on "failure to state a cause of
action" have drastically changed over time. A historical background of this particular ground is in
order to preclude any confusion or misapplication of jurisprudence decided prior to the
effectivity of the present Rules of Court. The 1940 Rules of Court provides under Section 10,
Rule 9 that:

Section 10. Waiver of defenses- Defenses and objections not pleaded either in a motion to
dismiss or in the answer are deemed waived; except the defense of failure to state a cause of
action, which may be alleged in a later pleading, if one is permitted, or by motion for judgment
on the pleadings, or at the trial on the merits; but in the last instance, the motion shall be
disposed of as provided in section 5 of Rule 17 in the light of any evidence which may have been
received. Whenever it appears that the court has no jurisdiction over the subject-matter, it shall
dismiss the action. [underscoring supplied]

This provision was essentially reproduced in Section 2, Rule 9 of the 1964 Rules of Court, and
we quote:

Section 2. Defenses and objections not pleaded deemed waived. Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived; except the failure to
state a cause of action which may be alleged in a later pleading, if one is permitted, or by motion
for judgment on the pleadings, or at the trial on the merits; but in the last instance, the motion
shall be disposed of as provided in section 5 of Rule 10 in the light of any evidence which may
have been received. Whenever it appears that the court has no jurisdiction over the subject-
matter, it shall dismiss the action. [underscoring supplied]

Under the present Rules of Court, this provision was reflected in Section 1, Rule 9, and we
quote:

Section 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in
a motion to dismiss or in the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that
there is another action pending between the same parties for the same cause, or that the action is
barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.
[underscoring supplied]

Notably, in the present rules, there was a deletion of the ground of "failure to state a cause of
action" from the list of those which may be waived if not invoked either in a motion to dismiss or
in the answer. Another novelty introduced by the present Rules, which was totally absent in its
two precedents, is the addition of the period of time within which a motion to dismiss should be
filed as provided under Section 1, Rule 16 and we quote:

Section 1. Grounds. Within the time for but before filing the answer to the complaint or
pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
xxx [underscoring supplied]

All these considerations point to the legal reality that the new Rules effectively restricted the
dismissal of complaints in general, especially when what is being invoked is the ground of
"failure to state a cause of action." Thus, jurisprudence governed by the 1940 and 1964 Rules of
Court to the effect that the ground for dismissal based on failure to state a cause of action may be
raised anytime during the proceedings, is already inapplicable to cases already governed by the
present Rules of Court which took effect on July 1, 1997. As the rule now stands, the failure to
invoke this ground in a motion to dismiss or in the answer would result in its waiver. According
to Oscar M. Herrera,41 the reason for the deletion is that failure to state a cause of action may be
cured under Section 5, Rule 10 and we quote:

Section 5. Amendment to conform to or authorize presentation of evidence. When issues not

raised by the pleadings are tried with the express or implied consent of the parties they shall be
treated in all respects as if they had been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to the evidence and to raise these issues
may be made upon motion of any party at any time, even after judgment; but failure to amend
does not effect the result of the trial of these issues. If evidence is objected to at the trial on the
ground that it is not within the issues made by the pleadings, the court may allow the pleadings
to be amended and shall do so with liberality if the presentation of the merits of the action and
the ends of substantial justice will be subserved thereby. The court may grant a continuance to
enable the amendment to be made.

With this clarification, we now proceed to the substantial issues of the petition.

The motion to dismiss in the present case based on failure to state a cause of action was not
timely filed and was thus waived

Applying Rule 16 of the Rules of Court which provides for the grounds for the dismissal of a
civil case, the respondents grounds for dismissal fall under Section 1(g) and (j), Rule 16 of the
Rules of Court, particularly, failure to state a cause of action and failure to comply with a
condition precedent (substitution of parties), respectively. The first paragraph of Section 1,42

Rule 16 of the Rules of Court provides for the period within which to file a motion to dismiss
under the grounds enumerated. Specifically, the motion should be filed within the time for, but
before the filing of, the answer to the complaint or pleading asserting a claim. Equally important
to this provision is Section 1,43

Rule 9 of the Rules of Court which states that defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived, except for the following grounds: 1) the
court has no jurisdiction over the subject matter; 2) litis pendencia; 3) res judicata; and 4)
prescription. Therefore, the grounds not falling under these four exceptions may be considered as
waived in the event that they are not timely invoked. As the respondents motion to dismiss was
based on the grounds which should be timely invoked, material to the resolution of this case is
the period within which they were raised. Both the RTC and the CA found that the motion to
dismiss was only filed after the filing of the answer and after the pre-trial had been concluded.
Because there was no motion to dismiss before the filing of the answer, the respondents should
then have at least raised these grounds as affirmative defenses in their answer. The RTCs
assailed orders did not touch on this particular issue but the CA ruled that the respondents did,
while the petitioners insist that the respondents did not. In the present petition, the petitioners
reiterate that there was a blatant non-observance of the rules when the respondents did not amend
their answer to invoke the grounds for dismissal which were raised only during the pre-trial and,
subsequently, in the subject motion to dismiss.44

The divergent findings of the CA and the petitioners arguments are essentially factual issues.
Time and again, we have held that the jurisdiction of the Court in a petition for review on
certiorari under Rule 45, such as the present case, is limited only to questions of law, save for
certain exceptions. One of these is attendant herein, which is, when the findings are conclusions
without citation of specific evidence on which they are based.45

In the petition filed with the CA, the respondents made a passing allegation that, as affirmative
defenses in their answer, they raised the issue that the petitioners are not the real parties in
interest.46

On the other hand, the petitioners consistently argued otherwise in their opposition47 to the
motion to dismiss, and in their comment48 and in their memorandum49 on the respondents
petition before the CA. Our examination of the records shows that the CA had no basis in its
finding that the respondents alleged the grounds as affirmative defenses in their answer. The
respondents merely stated in their petition for certiorari that they alleged the subject grounds in
their answer. However, nowhere in the petition did they support this allegation; they did not even
attach a copy of their answer to the petition. It is basic that the respondents had the duty to prove
by substantial evidence their positive assertions. Considering that the petition for certiorari is an
original and not an appellate action, the CA had no records of the RTCs proceedings upon which
the CA could refer to in order to validate the respondents claim. Clearly, other than the
respondents bare allegations, the CA had no basis to rule, without proof, that the respondents
alleged the grounds for dismissal as affirmative defenses in the answer. The respondents, as the
parties with the burden of proving that they timely raised their grounds for dismissal, could have
at least attached a copy of their answer to the petition. This simple task they failed to do. That the
respondents did not allege in their answer the subject grounds is made more apparent through
their argument, both in their motion to dismiss50 and in their comment,51 that it was only during
the pre-trial stage that they verbally manifested and invited the attention of the lower court on
their grounds for dismissal. In order to justify such late invocation, they heavily relied on Section
2(g) and (i), Rule 1852 of the Rules of Court that the nature and purpose of the pre-trial include,
among others, the propriety of dismissing the action should there be a valid ground therefor and
matters which may aid in the prompt disposition of the action. The respondents are not correct.
The rules are clear and require no interpretation. Pursuant to Section 1, Rule 9 of the Rules of
Court, a motion to dismiss based on the grounds invoked by the respondents may be waived if
not raised in a motion to dismiss or alleged in their answer. On the other hand, "the pre-trial is
primarily intended to make certain that all issues necessary to the disposition of a case are
properly raised. The purpose is to obviate the element of surprise, hence, the parties are expected
to disclose at the pre-trial conference all issues of law and fact which they intend to raise at the
trial, except such as may involve privileged or impeaching matter."53

The issues submitted during the pre-trial are thus the issues that would govern the trial proper.
The dismissal of the case based on the grounds invoked by the respondents are specifically
covered by Rule 16 and Rule 9 of the Rules of Court which set a period when they should be
raised; otherwise, they are deemed waived.
The Dabuco ruling is inapplicable in the present case; the ground for dismissal "failure to state a
cause of action" distinguished from "lack of cause of action"

To justify the belated filing of the motion to dismiss, the CA reasoned out that the ground for
dismissal of "lack of cause of action" may be raised at any time during the proceedings, pursuant
to Dabuco v. Court of Appeals.54

This is an erroneous interpretation and application of Dabuco as will be explained below.

First, in Dabuco, the grounds for dismissal were raised as affirmative defenses in the answer
which is in stark contrast to the present case.

Second, in Dabuco, the Court distinguished between the dismissal of the complaint for "failure to
state a cause of action" and "lack of cause of action." The Court emphasized that in a dismissal of
action for lack of cause of action, "questions of fact are involved, [therefore,] courts hesitate to
declare a plaintiff as lacking in cause of action. Such declaration is postponed until the
insufficiency of cause is apparent from a preponderance of evidence.

Usually, this is done only after the parties have been given the opportunity to present all relevant
evidence on such questions of fact."55

In fact, in Dabuco, the Court held that even the preliminary hearing on the propriety of lifting the
restraining order was declared insufficient for purposes of dismissing the complaint for lack of
cause of action. This is so because the issues of fact had not yet been adequately ventilated at that
preliminary stage. For these reasons, the Court declared in Dabuco that the dismissal by the trial
court of the complaint was premature. In the case of Macaslang v. Zamora,56 the Court noted
that the incorrect appreciation by both the RTC and the CA of the distinction between the
dismissal of an action, based on "failure to state a cause of action" and "lack of cause of action,"
prevented it from properly deciding the case, and we quote:

Failure to state a cause of action and lack of cause of action are really different from each other.
On the one hand, failure to state a cause of action refers to the insufficiency of the pleading, and
is a ground for dismissal under Rule 16 of the Rules of Court. On the other hand, lack of cause
[of] action refers to a situation where the evidence does not prove the cause of action alleged in
the pleading. Justice Regalado, a recognized commentator on remedial law, has explained the
distinction: xxx What is contemplated, therefore, is a failure to state a cause of action which is
provided in Sec. 1(g) of Rule 16. This is a matter of insufficiency of the pleading. Sec. 5 of Rule
10, which was also included as the last mode for raising the issue to the court, refers to the
situation where the evidence does not prove a cause of action. This is, therefore, a matter of
insufficiency of evidence. Failure to state a cause of action is different from failure to prove a
cause of action. The remedy in the first is to move for dismissal of the pleading, while the
remedy in the second is to demur to the evidence, hence reference to Sec. 5 of Rule 10 has been
eliminated in this section. The procedure would consequently be to require the pleading to state a
cause of action, by timely objection to its deficiency; or, at the trial, to file a demurrer to
evidence, if such motion is warranted. [italics supplied]

Based on this discussion, the Court cannot uphold the dismissal of the present case based on the
grounds invoked by the respondents which they have waived for failure to invoke them within
the period prescribed by the Rules. The Court cannot also dismiss the case based on "lack of
cause of action" as this would require at least a preponderance of evidence which is yet to be
appreciated by the trial court. Therefore, the RTC did not commit grave abuse of discretion in
issuing the assailed orders denying the respondents motion to dismiss and motion for
reconsideration. The Court shall not resolve the merits of the respondents grounds for dismissal
which are considered as waived.

Other heirs of the spouses Pacaa to be impleaded in the case.

It should be emphasized that insofar as the petitioners are concerned, the respondents have
waived the dismissal of the complaint based on the ground of failure to state a cause of action
because the petitioners are not the real parties in interest. At this juncture, a distinction between a
real party in interest and an indispensable party is in order. In Carandang v. Heirs of de Guzman,
et al.,57 the Court clarified these two concepts and held that "[a] real party in interest is the party
who stands to be benefited or injured by the judgment of the suit, or the party entitled to the
avails of the suit. On the other hand, an indispensable party is a party in interest without whom
no final determination can be had of an action, in contrast to a necessary party, which is one who
is not indispensable but who ought to be joined as a party if complete relief is to be accorded as
to those already parties, or for a complete determination or settlement of the claim subject of the
action. xxx If a suit is not brought in the name of or against the real party in interest, a motion to
dismiss may be filed on the ground that the complaint states no cause of action. However, the
dismissal on this ground entails an examination of whether the parties presently pleaded are
interested in the outcome of the litigation, and not whether all persons interested in such outcome
are actually pleaded. The latter query is relevant in discussions concerning indispensable and
necessary parties, but not in discussions concerning real parties in interest. Both indispensable
and necessary parties are considered as real parties in interest, since both classes of parties stand
to be benefited or injured by the judgment of the suit."

At the inception of the present case, both the spouses Pacaa were not impleaded as parties-
plaintiffs. The Court notes, however, that they are indispensable parties to the case as the alleged
owners of Rovila Water Supply. Without their inclusion as parties, there can be no final
determination of the present case. They possess such an interest in the controversy that a final
decree would necessarily affect their rights, so that the courts cannot proceed without their
presence. Their interest in the subject matter of the suit and in the relief sought is inextricably
intertwined with that of the other parties.58

Jurisprudence on the procedural consequence of the inclusion or non-inclusion of an

indispensable party is divided in our jurisdiction. Due to the non-inclusion of indispensable
parties, the Court dismissed the case in Lucman v. Malawi, et al.59 and Go v. Distinction
Properties Development Construction, Inc.,60 while in Casals, et al. v. Tayud Golf and Country
Club et al.,61 the Court annulled the judgment which was rendered without the inclusion of the
indispensable parties. In Arcelona et al. v. Court of Appeals62 and Bulawan v. Aquende,63 and
Metropolitan Bank & Trust Company v. Alejo et al.64 the Court ruled that the burden to implead
or order the impleading of an indispensable party rests on the plaintiff and on the trial court,
respectively. Thus, the non-inclusion of the indispensable parties, despite notice of this infirmity,
resulted in the annulment of these cases. In Plasabas, et al. v. Court of Appeals, et al.,65 the
Court held that the trial court and the CA committed reversible error when they summarily
dismissed the case, after both parties had rested their cases following a protracted trial, on the
sole ground of failure to implead indispensable parties. Non-joinder of indispensable parties is
not a ground for the dismissal of an action. The remedy is to implead the non-party claimed to be
indispensable. However, in the cases of Quilatan, et al. v. Heirs of Quilatan, et al.66 and
Lagunilla, et al. v. Monis, et al.,67 the Court remanded the case to the RTC for the impleading of
indispensable parties. On the other hand, in Lotte Phil. Co., Inc. v. Dela Cruz,68 PepsiCo, Inc. v.
Emerald Pizza, 69 and Valdez Tallorin, v. Heirs of Tarona, et al.,70 the Court directly ordered
that the indispensable parties be impleaded. Mindful of the differing views of the Court as
regards the legal effects of the non-inclusion of indispensable parties, the Court clarified in
Republic of the Philippines v. Sandiganbayan, et al.,71 that the failure to implead indispensable
parties is a curable error and the foreign origin of our present rules on indispensable parties
permitted this corrective measure. This cited case held:

Even in those cases where it might reasonably be argued that the failure of the Government to
implead the sequestered corporations as defendants is indeed a procedural aberration xxx, slight
reflection would nevertheless lead to the conclusion that the defect is not fatal, but one
correctible under applicable adjective rules e.g., Section 10, Rule 5 of the Rules of Court
[specifying the remedy of amendment during trial to authorize or to conform to the evidence];
Section 1, Rule 20 [governing amendments before trial], in relation to the rule respecting
omission of so-called necessary or indispensable parties, set out in Section 11, Rule 3 of the
Rules of Court. It is relevant in this context to advert to the old familiar doctrines that the
omission to implead such parties "is a mere technical defect which can be cured at any stage of
the proceedings even after judgment"; and that, particularly in the case of indispensable parties,
since their presence and participation is essential to the very life of the action, for without them
no judgment may be rendered, amendments of the complaint in order to implead them should be
freely allowed, even on appeal, in fact even after rendition of judgment by this Court, where it
appears that the complaint otherwise indicates their identity and character as such indispensable
parties." Although there are decided cases wherein the non-joinder of indispensable parties in
fact led to the dismissal of the suit or the annulment of judgment, such cases do not jibe with the
matter at hand. The better view is that non-joinder is not a ground to dismiss the suit or annul the
judgment. The rule on joinder of indispensable parties is founded on equity. And the spirit of the
law is reflected in Section 11, Rule 3 of the 1997 Rules of Civil Procedure. It prohibits the
dismissal of a suit on the ground of non-joinder or misjoinder of parties and allows the
amendment of the complaint at any stage of the proceedings, through motion or on order of the
court on its own initiative. Likewise, jurisprudence on the Federal Rules of Procedure, from
which our Section 7, Rule 3 on indispensable parties was copied, allows the joinder of
indispensable parties even after judgment has been entered if such is needed to afford the moving
party full relief. Mere delay in filing the joinder motion does not necessarily result in the waiver
of the right as long as the delay is excusable.

In Galicia, et al. v. Vda. De Mindo, et al.,72 the Court ruled that in line with its policy of
promoting a just and inexpensive disposition of a case, it allowed the intervention of the
indispensable parties instead of dismissing the complaint. Furthermore, in Commissioner
Domingo v. Scheer,73 the Court cited Salvador, et al. v. Court of Appeals, et al.74 and held that
the Court has full powers, apart from that power and authority which are inherent, to amend the
processes, pleadings, proceedings and decisions by substituting as party-plaintiff the real party in
interest. The Court has the power to avoid delay in the disposition of this case, and to order its
amendment in order to implead an indispensable party. With these discussions as premises, the
Court is of the view that the proper remedy in the present case is to implead the indispensable
parties especially when their non-inclusion is merely a technical defect. To do so would serve
proper administration of justice and prevent further delay and multiplicity of suits. Pursuant to
Section 9, Rule 3 of the Rules of Court, parties may be added by order of the court on motion of
the party or on its own initiative at any stage of the action. If the plaintiff refuses to implead an
indispensable party despite the order of the court, then the court may dismiss the complaint for
the plaintiffs failure to comply with a lawful court order.75

The operative act that would lead to the dismissal of the case would be the refusal to comply
with the directive of the court for the joinder of an indispensable party to the case.76

Obviously, in the present case, the deceased Pacaas can no longer be included in the complaint
as indispensable parties because of their death during the pendency of the case. Upon their death,
however, their ownership and rights over their properties were transmitted to their heirs,
including herein petitioners, pursuant to Article 77477 in relation with Article 77778 of the Civil
Code.

In Orbeta, et al. v. Sendiong,79 the Court acknowledged that the heirs, whose hereditary rights
are to be affected by the case, are deemed indispensable parties who should have been impleaded
by the trial court. Therefore, to obviate further delay in the proceedings of the present case and
given the Courts authority to order the inclusion of an indispensable party at any stage of the
proceedings, the heirs of the spouses Pacaa, except the petirioners who are already parties to the
case are Lagrimas Pacaa-Gonzalez who intervened in the case, are hereby ordered impleaded as
parties-plaintiffs.

WHEREFORE, the petition is GRANTED. The decision dated January 27, 2005 and the
resolution date June 6, 2005 of the Court of Appeals in CA-G.R. SP No. 71551 are REVERSED
and SET ASIDE. The heirs of the spouses Luciano and Lourdes Pacaa, except herein petitioner
and Lagrimas Pacaa-Gonzalez, are ORDERED IMPLEADED as parties plaintiffs and the RTC
is directed tp proceed with the trial of the case with DISPATCH.

SO ORDERED.

Republic of the Philippines

Supreme Court

Manila

SECOND DIVISION

ARNOLD JAMES M. YSIDORO, G.R. No. 171513

Petitioner,

- versus -
HON. TERESITA J. LEONARDO-

DE CASTRO, HON. DIOSDADO M.

PERALTA and HON. EFREN N.

DE LA CRUZ, in their official capacities

as Presiding Justice and Associate Justices,

respectively, of the First Division of the

Sandiganbayan, and NIERNA S. DOLLER,

Respondents.

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

PEOPLE OF THE PHILIPPINES, G.R. No. 190963

Petitioner,

Present:

CARPIO, J., Chairperson,

- versus - BRION,

PEREZ,

SERENO, and

REYES, JJ.

FIRST DIVISION OF THE Promulgated:

SANDIGANBAYAN and ARNOLD

JAMES M. YSIDORO,
 Respondents. February 6, 2012

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

DECISION

BRION, J.:

Before us are consolidated petitions assailing the rulings of the Sandiganbayan in

Criminal Case No. 27963, entitled People of the Philippines v. Arnold James M. Ysidoro.

G.R. No. 171513 is a petition for certiorari and prohibition under Rule 65 of the Rules of
Court (Rules) filed by petitioner Arnold James M. Ysidoro to annul the resolutions, dated July 6,
20051[1] and January 25, 2006,2[2] of the Sandiganbayan granting the Motion to Suspend
Accused Pendente Lite.

G.R. No. 190963, on the other hand, is a petition for certiorari under Rule 65 filed by the
People of the Philippines through the Office of the Special Prosecutor (People) to annul and set
aside the decision,3[3] dated October 1, 2009, and the resolution, 4[4] dated December 9, 2009,
of the Sandiganbayan which acquitted Ysidoro for violation of Section 3(e) of Republic Act
(R.A.) No. 3019 (Anti-Graft and Corrupt Practices Acts), as amended.

4
 The Antecedents

Ysidoro, as Municipal Mayor of Leyte, Leyte, was charged before the Sandiganbayan,
with the following information:

That during the period from June 2001 to December 2001 or for sometime
prior or subsequent thereto, at the Municipality of Leyte, Province of Leyte,
Philippines, and within the jurisdiction of [the] Honorable Court, above-
named accused, ARNOLD JAMES M. YSIDORO, a public officer, being the
Municipal Mayor of Leyte, Leyte, in such capacity and committing the
offense in relation to office, with deliberate intent, with manifest partiality and
evident bad faith, did then and there willfully, unlawfully and criminally,
withhold and fail to give to Nierna S. Doller, Municipal Social Welfare and
Development Officer (MSWDO) of Leyte, Leyte, without any legal basis, her
RATA for the months of August, September, October, November and
December, all in the year 2001, in the total amount of TWENTY-TWO
THOUSAND ONE HUNDRED TWENTY-FIVE PESOS (P22,125.00),
Philippine Currency, and her Productivity Pay in the year 2000, in the amount
of TWO THOUSAND PESOS (P2,000.00), Philippine Currency, and despite
demands made upon accused to release and pay her the amount of P22,125.00
and P2,000.00, accused failed to do so, thus accused in the course of the
performance of his official functions had deprived the complainant of her
RATA and Productivity Pay, to the damage and injury of Nierna S. Doller and
detriment of public service.5[5]

Ysidoro filed an omnibus motion to quash the information and, in the alternative, for
judicial determination of probable cause,6[6] which were both denied by the Sandiganbayan. In
due course, Ysidoro was arraigned and he pleaded not guilty.

6
 The Sandiganbayan Preventively Suspends Ysidoro

On motion of the prosecution,7[7] the Sandiganbayan preventively suspended Ysidoro

for ninety (90) days in accordance with Section 13 of R.A. No. 3019, which states:

Any incumbent public officer against whom any criminal prosecution under a
valid information under this Act or under Title 7, Book II of the Revised Penal
Code or for any offense involving fraud upon government or public funds or
property whether as a simple or as complex offense and in whatever stage of
execution and mode of participation, is pending in court, shall be suspended
from office.

Ysidoro filed a motion for reconsideration, and questioned the necessity and the duration
of the preventive suspension. However, the Sandiganbayan denied the motion for
reconsideration, ruling that -

Clearly, by well established jurisprudence, the provision of Section 13,

Republic Act 3019 make[s] it mandatory for the Sandiganbayan to suspend,
for a period not exceeding ninety (90) days, any public officer who has been
validly charged with a violation of Republic Act 3019, as amended or Title 7,
Book II of the Revised Penal Code or any offense involving fraud upon
government of public funds or property.8[8]

Ysidoro assailed the validity of these Sandiganbayan rulings in his petition (G.R. No.
171513) before the Court. Meanwhile, trial on the merits in the principal case continued before
the Sandiganbayan. The prosecution and the defense presented their respective evidence.

The prosecution presented Nierna S. Doller as its sole witness. According to Doller, she
is the Municipal Social Welfare Development Officer of Leyte. She claimed that Ysidoro ordered

8
her name to be deleted in the payroll because her husband transferred his political affiliation and
sided with Ysidoros opponent. After her name was deleted from the payroll, Doller did not
receive her representation and transportation allowance (RATA) for the period of August 2001 to
December 2001. Doller also related that she failed to receive her productivity bonus for the year
2000 (notwithstanding her performance rating of VS) because Ysidoro failed to sign her
Performance Evaluation Report. Doller asserted that she made several attempts to claim her
RATA and productivity bonus, and made representations with Ysidoro, but he did not act on her
requests. Doller related that her family failed to meet their financial obligations as a result of
Ysidoros actions.

To corroborate Dollers testimony, the prosecution presented documentary evidence in the

form of disbursement vouchers, request for obligation of allotment, letters, excerpts from the
police blotter, memorandum, telegram, certification, order, resolution, and the decision of the
Office of the Deputy Ombudsman absolving her of the charges.9[9]

On the other hand, the defense presented seven (7) witnesses,10[10] including Ysidoro,
and documentary evidence. The defense showed that the withholding of Dollers RATA was due
to the investigation conducted by the Office of the Mayor on the anomalies allegedly committed
by Doller. For this reason, Ysidoro ordered the padlocking of Dollers office, and ordered Doller
and her staff to hold office at the Office of the Mayor for the close monitoring and evaluation of
their functions. Doller was also prohibited from outside travel without Ysidoros approval.

The Sandiganbayan Acquits Ysidoro

In a decision dated October 1, 2009, 11[11] the Sandiganbayan acquitted Ysidoro and held that
the second element of the offense that there be malice, ill-motive or bad faith was not present.
The Sandiganbayan pronounced:

10

11
 This Court acknowledges the fact that Doller was entitled to RATA. However,
the antecedent facts and circumstances did not show any indicia of bad faith
on the part of [Ysidoro] in withholding the release of Dollers RATA.

In fact, this Court believes that [Ysidoro] acted in good faith and in
honest belief that Doller was not entitled to her RATA based on the opinion of
the COA resident Auditor and Section 317 of the Government Accounting and
Auditing Manual.

It may be an erroneous interpretation of the law, nonetheless,

[Ysidoros] reliance to the same was a clear basis of good faith on his part in
withholding Dollers RATA.

With regard to the Productivity Incentive Bonus, Doller was aware that
the non-submission of the Performance Evaluation Form is a ground for an
employees non-eligibility to receive the Productivity Incentive Bonus:

a) Employees disqualification for performance-based

personnel actions which would require the rating for the
given period such as promotion, training or scholarship
grants, and productivity incentive bonus if the failure of the
submission of the report form is the fault of the employees.

Doller even admitted in her testimonies that she failed to submit her
Performance Evaluation Report to [Ysidoro] for signature.

There being no malice, ill-motive or taint of bad faith, [Ysidoro] had

the legal basis to withhold Dollers RATA and Productivity pay.12[12] (italics
supplied)

In a resolution dated December 9, 2009,13[13] the Sandiganbayan denied the

prosecutions motion for reconsideration, reasoning that -

It must be stressed that this Court acquitted [Ysidoro] for two

reasons: firstly, the prosecution failed to discharge its burden of

12

13
 proving that accused Ysidoro acted in bad faith as stated in paragraph
1 above; and secondly, the exculpatory proof of good faith xxx.

Needless to state, paragraph 1 alone would be enough ground

for the acquittal of accused Ysidoro. Hence, the COA Resident Auditor
need not be presented in court to prove that [Ysidoro] acted in good
faith. This is based on the legal precept that when the prosecution fails
to discharge its burden, an accused need not even offer evidence in his
behalf. 14[14] (italics supplied)

Supervening events occurred after the filing of Ysidoros petition which rendered the issue
in G.R. No. 171513 i.e., the propriety of his preventive suspension moot and academic. First,
Ysidoro is no longer the incumbent Municipal Mayor of Leyte, Leyte as his term of office
expired in 2007. Second, the prosecution completed its presentation of evidence and had rested
its case before the Sandiganbayan. And third, the Sandiganbayan issued its decision acquitting
Ysidoro of the crime charged.

In light of these events, what is left to resolve is the petition for certiorari filed by the
People on the validity of the judgment acquitting Ysidoro of the criminal charge.

The Peoples Petition

The People posits that the elements of Section 3(e) of R.A. No. 3019 have been duly
established by the evidence, in that:

First. [Ysidoro] was the Municipal Mayor of Leyte, Leyte when he

ordered the deletion of private complainants name in the payroll for RATA
and productivity pay.

Second. He caused undue injury to [Doller] when he ordered the

withholding of her RATA and productivity pay. It is noteworthy that
complainant was the only official in the municipality who did not receive her
RATA and productivity pay even if the same were already included in the
budget for that year. x x x

14
 Consequently, [Doller] testified that her family suffered actual and
moral damages due to the withholding of her benefits namely: a) the
disconnection of electricity in their residence; x x x b) demand letters from
their creditors; x x x c) her son was dropped from school because they were
not able to pay for his final exams; x x x d) [h]er children did not want to go
to school anymore because they were embarrassed that collectors were
running after them.

Third. Accused clearly acted in evident bad faith as he used his

position to deprive [Doller] of her RATA and productivity pay for the period
mentioned to harass her due to the transfer of political affiliation of her
husband.15[15] (emphasis supplied)

The People argues16[16] that the Sandiganbayan gravely abused its discretion, and exceeded its,
or acted without, jurisdiction in not finding Ysidoro in bad faith when he withheld Dollers RATA
and deprived her of her productivity bonus. The Sandiganbayan failed to take into account that:
first, the Commission on Audit (COA) resident auditor was never presented in court; second, the
documentary evidence showed that Doller continuously discharged the functions of her office
even if she had been prevented from outside travel by Ysidoro; third, Ysidoro refused to release
Dollers RATA and productivity bonus notwithstanding the dismissal by the Ombudsman of the
cases against her for alleged anomalies committed in office; and fourth, Ysidoro caused Dollers
name to be dropped from the payroll without justifiable cause, and he refused to sign the
disbursement vouchers and the request for obligation of allotment so that Doller could claim her
RATA and her productivity bonus.

In the same manner, the People asserts that the Sandiganbayan gravely abused its
discretion when it ruled that Doller was not eligible to receive the productivity bonus for her
failure to submit her Performance Evaluation Report. The Sandiganbayan disregarded the
evidence showing the strained relationship and the maneuverings made by Ysidoro so that he
could deny her this incentive.

15

16
In his Comment,17[17] Ysidoro prays for the dismissal of the petition for procedural and
substantive infirmities. First, he claims that the petition was filed out of time considering the
belated filing of the Peoples motion for reconsideration before the Sandiganbayan. He argues
that by reason of the late filing of the motion for reconsideration, the present petition was filed
beyond the 60-day reglementary period. Ysidoro also argues that the 60-day reglementary period
should have been counted from the Peoples receipt of the Sandiganbayans decision since no
motion for reconsideration was seasonably filed. Second, Ysidoro claims that the
Sandiganbayans ruling was in accord with the evidence and the prosecution was not denied due
process to properly avail of the remedy of a writ of certiorari. And third, Ysidoro insists that he
can no longer be prosecuted for the same criminal charge without violating the rule against
double jeopardy.

The Issue Raised

The ultimate issue to be resolved is whether the Sandiganbayan gravely abused its discretion and
exceeded its, or acted without, jurisdiction when it acquitted Ysidoro of the crime charged.

The Courts Ruling

We first resolve the preliminary issue raised by Ysidoro on the timeliness of the Peoples
petition for certiorari. The records show that the motion for reconsideration was filed by the
People before the Sandiganbayan on the last day of the 15-day reglementary period to file the
motion which fell on October 16, 2009, a Friday. Although the date originally appearing in the
notice of hearing on the motion was September 22, 2009 (which later on was corrected to
October 22, 2009), the error in designating the month was unmistakably obvious considering the
date when the motion was filed. In any case, the error cannot detract from the circumstance that
the motion for reconsideration was filed within the 15-day reglementary period. We consider,
too, that Ysidoro was not deprived of due process and was given the opportunity to be heard on
the motion. Accordingly, the above error cannot be considered fatal to the right of the People to
file its motion for reconsideration. The counting of the 60-day reglementary period within which
to file the petition for certiorari will be reckoned from the receipt of the People of the denial of
its motion for reconsideration, or on December 10, 2009. As the last day of the 60-day
reglementary period fell on February 8, 2010, the petition which was filed on February 5, 2010
was filed on time.

17
 Nevertheless, we dismiss the petitions for being procedurally and substantially
infirm.

A Review of a Judgment of Acquittal

Generally, the Rules provides three (3) procedural remedies in order for a party to appeal
a decision of a trial court in a criminal case before this Court. The first is by ordinary appeal
under Section 3, Rule 122 of the 2000 Revised Rules on Criminal Procedure. The second is by a
petition for review on certiorari under Rule 45 of the Rules. And the third is by filing a special
civil action for certiorari under Rule 65. Each procedural remedy is unique and provides for a
different mode of review. In addition, each procedural remedy may only be availed of depending
on the nature of the judgment sought to be reviewed.

A review by ordinary appeal resolves factual and legal issues. Issues which have not been
properly raised by the parties but are, nevertheless, material in the resolution of the case are also
resolved in this mode of review. In contrast, a review on certiorari under a Rule 45 petition is
generally limited to the review of legal issues; the Court only resolves questions of law which
have been properly raised by the parties during the appeal and in the petition. Under this mode,
the Court determines whether a proper application of the law was made in a given set of facts. A
Rule 65 review, on the other hand, is strictly confined to the determination of the propriety of the
trial courts jurisdiction whether it has jurisdiction over the case and if so, whether the exercise of
its jurisdiction has or has not been attended by grave abuse of discretion amounting to lack or
excess of jurisdiction.

While an assailed judgment elevated by way of ordinary appeal or a Rule 45 petition is

considered an intrinsically valid, albeit erroneous, judgment, a judgment assailed under Rule 65
is characterized as an invalid judgment because of defect in the trial courts authority to rule.
Also, an ordinary appeal and a Rule 45 petition tackle errors committed by the trial court in the
appreciation of the evidence and/or the application of law. In contrast, a Rule 65 petition resolves
jurisdictional errors committed in the proceedings in the principal case. In other words, errors of
judgment are the proper subjects of an ordinary appeal and in a Rule 45 petition; errors of
jurisdiction are addressed in a Rule 65 petition.

As applied to judgments rendered in criminal cases, unlike a review via a Rule 65

petition, only judgments of conviction can be reviewed in an ordinary appeal or a Rule 45
petition. As we explained in People v. Nazareno,18[18] the constitutional right of the accused
against double jeopardy proscribes appeals of judgments of acquittal through the remedies of
ordinary appeal and a Rule 45 petition, thus:

18
 The Constitution has expressly adopted the double jeopardy policy and
thus bars multiple criminal trials, thereby conclusively presuming that a
second trial would be unfair if the innocence of the accused has been
confirmed by a previous final judgment. Further prosecution via an
appeal from a judgment of acquittal is likewise barred because the
government has already been afforded a complete opportunity to prove the
criminal defendants culpability; after failing to persuade the court to enter a
final judgment of conviction, the underlying reasons supporting the
constitutional ban on multiple trials applies and becomes compelling. The
reason is not only the defendants already established innocence at the first trial
where he had been placed in peril of conviction, but also the same untoward
and prejudicial consequences of a second trial initiated by a government who
has at its disposal all the powers and resources of the State. Unfairness and
prejudice would necessarily result, as the government would then be allowed
another opportunity to persuade a second trier of the defendants guilt while
strengthening any weaknesses that had attended the first trial, all in a process
where the governments power and resources are once again employed against
the defendants individual means. That the second opportunity comes via an
appeal does not make the effects any less prejudicial by the standards of
reason, justice and conscience.19[19] (emphases supplied)

However, the rule against double jeopardy cannot be properly invoked in a Rule 65
petition, predicated on two (2) exceptional grounds, namely: in a judgment of acquittal rendered
with grave abuse of discretion by the court; and where the prosecution had been deprived of due
process.20[20] The rule against double jeopardy does not apply in these instances because a Rule
65 petition does not involve a review of facts and law on the merits in the manner done in an
appeal. In certiorari proceedings, judicial review does not examine and assess the evidence of
the parties nor weigh the probative value of the evidence. 21[21] It does not include an inquiry on
the correctness of the evaluation of the evidence. 22[22] A review under Rule 65 only asks the
question of whether there has been a validly rendered decision, not the question of whether the

19

20

21

22
 is to determine
decision is legally correct.23[23] In other words, the focus of the review
24
whether the judgment is per se void on jurisdictional grounds. [24]

Applying these legal concepts to this case, we find that while the People was
procedurally correct in filing its petition for certiorari under Rule 65, the petition does not raise
any jurisdictional error committed by the Sandiganbayan. On the contrary, what is clear is the
obvious attempt by the People to have the evidence in the case reviewed by the Court under the
guise of a Rule 65 petition. This much can be deduced by examining the petition itself which
does not allege any bias, partiality or bad faith committed by the Sandiganbayan in its
proceedings. The petition does not also raise any denial of the Peoples due process in the
proceedings before the Sandiganbayan.

We observe, too, that the grounds relied in the petition relate to factual errors of judgment
which are more appropriate in an ordinary appeal rather than in a Rule 65 petition. The grounds
cited in the petition call for the Courts own appreciation of the factual findings of the
Sandiganbayan on the sufficiency of the Peoples evidence in proving the element of bad faith,
and the sufficiency of the evidence denying productivity bonus to Doller.

The Merits of the Case

Our consideration of the imputed errors fails to establish grave abuse of discretion
amounting to lack or excess of jurisdiction committed by the Sandiganbayan. As a rule,
misapplication of facts and evidence, and erroneous conclusions based on
evidence do not, by the mere fact that errors were committed, rise to the level of
grave abuse of discretion.25[25] That an abuse itself must be grave must be
amply demonstrated since the jurisdiction of the court, no less, will be

23

24

25
affected.26[26] We have previously held that the mere fact, too, that a court
erroneously decides a case does not necessarily deprive it of jurisdiction. 27[27]

Jurisprudence has defined grave abuse of discretion amounting to lack or

excess of jurisdiction in this wise:

Grave abuse of discretion is defined as capricious or whimsical exercise

of judgment as is equivalent to lack of jurisdiction. The abuse of discretion
must be patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and
despotic manner by reason of passion and hostility.28[28]

Under this definition, the People bears the burden of convincingly

demonstrating that the Sandiganbayan gravely abused its discretion in the
appreciation of the evidence. We find that the People failed in this regard.

We find no indication from the records that the Sandiganbayan acted arbitrarily,
capriciously and whimsically in arriving at its verdict of acquittal. The settled rule is that
conviction ensues only if every element of the crime was alleged and proved. 29[29] In this case,
Ysidoro was acquitted by the Sandiganbayan for two reasons: first, his bad faith (an element of
the crime charged) was not sufficiently proven by the prosecution evidence; and second, there
was exculpatory evidence of his good faith.

26

27

28

29
 As bad faith is a state of mind, the prosecution must present evidence of the overt acts or
omissions committed by Ysidoro showing that he deliberately intended to do wrong or cause
damage to Doller by withholding her RATA. However, save from the testimony of Doller of the
strained relationship between her and Ysidoro, no other evidence was presented to support
Ysidoros bad faith against her. We note that Doller even disproved Ysidoros bad faith when she
admitted that several cases had been actually filed against her before the Office of the
Ombudsman. It bears stressing that these purported anomalies were allegedly committed in
office which Ysidoro cited to justify the withholding of Dollers RATA.

The records also show other acts that tend to negate Ysidoros bad faith under the
circumstances. First, the investigation of the alleged anomalies by Ysidoro was corroborated by
the physical transfer of Doller and her subordinates to the Office of the Mayor and the
prohibition against outside travel imposed on Doller. Second, the existence of the Ombudsmans
cases against Doller. And third, Ysidoros act of seeking an opinion from the COA Auditor on the
proper interpretation of Section 317 of the Government Accounting and Auditing Manual before
he withheld the RATA. This section provides:

An official/employee who was wrongly removed or prevented from performing his

duties is entitled to back salaries but not RATA. The rationale for the grant of
RATA is to provide the official concerned additional fund to meet necessary
expenses incidental to and connected with the exercise or the discharge of the
functions of an office. If he is out of office, [voluntarily] or involuntarily, it
necessarily follows that the functions of the office remain undischarged (COA,
Dec. 1602, October 23, 1990). And if the duties of the office are not discharged,
the official does not and is not supposed to incur expenses. There being no
expenses incurred[,] there is nothing to be reimbursed (COA, Dec. 2121 dated
June 28, 1979).30[30]

Although the above provision was erroneously interpreted by Ysidoro and the COA
Auditor, the totality of the evidence, to our mind, provides sufficient grounds to create
reasonable doubt on Ysidoros bad faith. As we have held before, bad faith does not simply
connote bad judgment or negligence but imputes a dishonest purpose or some moral obliquity
and conscious doing of a wrong or a breach of a sworn duty through some motive or intent, or
ill-will to partake the nature of fraud. 31[31] An erroneous interpretation of a provision of law,
30

31
absent any showing of some dishonest or wrongful purpose, does not constitute and does not
necessarily amount to bad faith.32[32]

Similarly, we find no inference of bad faith when Doller failed to receive the productivity
bonus. Doller does not dispute that the receipt of the productivity bonus was premised on the
submission by the employee of his/her Performance Evaluation Report. In this case, Doller
admitted that she did not submit her Performance Evaluation Report; hence, she could not have
reasonably expected to receive any productivity bonus. Further, we cannot agree with her self-
serving claim that it was Ysidoros refusal that led to her failure to receive her productivity bonus
given that no other hard evidence supported this claim. We certainly cannot rely on Dollers
assertion of the alleged statement made by one Leo Apacible (Ysidoros secretary) who was not
presented in court. The alleged statement made by Leo Apacible that the mayor will get angry
with him and he might be laid off, 33[33] in addition to being hearsay, did not even establish the
actual existence of an order from Ysidoro or of his alleged maneuverings to deprive Doller of her
RATA and productivity bonus.

In light of these considerations, we resolve to dismiss the Peoples

petition. We cannot review a verdict of acquittal which does not impute or show
any jurisdictional error committed by the Sandiganbayan.
WHEREFORE, premises considered, the Court hereby resolves to:

1. DISMISS the petition for certiorari and prohibition, docketed as G.R. No. 171513,
filed by Arnold James M. Ysidoro for being moot and academic.

2. DISMISS the petition for certiorari, docketed as G.R. No. 190963, filed by the
People of the Philippines, through the Office of the Special Prosecutor, for lack of
merit.

SO ORDERED.

32

33
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No 166995 January 13, 2014

DENNIS T. VILLAREAL, Petitioner,

vs.
CONSUELO C. ALIGA, Respondent.

DECISION

PERALTA, J.:

Challenged in this petition for review on certiorari under Rule 45 of the 1997 Revised Rules of
Civil Procedure (Rules) are the April 27, 2004 Decision1 and August 10, 2004 Resolution,2 of
the Court of Appeals (CA) in CA-G.R. R No. 25581entitled People of he Philippines v. Consuelo
Cruz Aliga which acquitted respondent Consuelo C. Aliga (Aliga) from the offense charged and,
in effect, reversed and set aside the July 12, 2001 Decision3 of the Regional Trial Court RTC),
Branch 147, Makati City.

On October 31, 1996, an Information was filed against respondent Aliga for the crime of
Qualified Theft thru Falsification of Commercial Document, committed as follows:

That on or about the 30th day of October 1996, in the City of Makati, Philippines, a place within
the jurisdiction of this Honorable Court, the above-named accused, being then an accountant of
Dentrade Inc., herein represented by Dennis T. Villareal, and who has access to the companys
checking accounts did then and there willfully, unlawfully and feloniously with grave abuse of
confidence, with intent [to] gain and without the consent of the owner thereof, take, steal and
carry away from complainants office, United Coconut Planters Bank Check No. HOF 681039
dated October 24, 1996 in the amount of P5,000.00, once in possession of said check, did then
and there willfully, unlawfully and feloniously falsify the amount by changing it to P65,000.00
and having the same encashed with the bank, thereafter misappropriate and convert to her own
personal use and benefit the amount of P60,000.00 to the damage and prejudice of the herein
complainant, Dentrade Inc., in the aforementioned amount of P60,000.00.4

During her arraignment on December 6, 1996, respondent Aliga pleaded not guilty.5 After the
RTC resolved to deny petitioners motion for issuance of a hold departure order against
respondent Aliga and the latters motion to suspend proceedings,6 trial on the merits ensued.
Both the prosecution and the defense were able to present the testimonies of their witnesses and
their respective documentary exhibits.

The Court of Appeals, substantially adopting the trial courts findings, narrated the relevant facts
as follows:

Apart from the documentary exhibits "A" to "F", the combined testimonies of the prosecution
witnesses Elsa Doroteo, Diosdado Corompido, Yolanda Martirez and NBI agent John Leonard
David tend to establish the following factual milieu:

Complainant Dennis T. Villareal is the President and General Manager of Dentrade, Inc., a
corporation with principal office address at the 7/F Citibank Center 8741 Paseo de Roxas, Makati
City. As a businessman, Villareal maintains checking accounts with the head office of China
Banking Corporation (Chinabank) in Paseo de Roxas and United Coconut Planters Bank (UCPB)
in Makati Avenue, both banks are located in Makati City. He has under his employ, Elsa Doroteo,
as executive secretary, Diosdado Corompido, as messenger, Yolanda Martirez, as chief
accountant, [respondent] Consuelo Cruz Aliga and Annaliza Perez, as accounting clerks.
[Respondent] has custody of the personal checks of Villareal. She prepares the personal checks
by typing its contents and submits them to Villareal for his signature. After the signed checks are
delivered to her, she in turn, gives the checks to the messenger for encashment with the bank.

Sometime in October 1996, Villareals governess asked Doroteo for the payment covering the
year 1995 for his childrens teacher in horseback riding. Doroteo replied that the said fees had
been paid. To verify the matter, Doroteo instructed Perez, one of the accounting clerks, to
produce the originals of the returned checks from [the] personal account of Villareal. Upon
examining the returned checks, Doroteo found out that the fees for the horseback riding
instructor had indeed been paid and that there were large encashments reflected on the checks in
typewritten form. Doroteo informed Villareal of her findings. Villareal examined the returned
checks and was surprised as he never authorized the large encashments.

Upon advice of his lawyer, Atty. Victor Lazatin of the ACCRA Law Offices, Mr. Villareal sent a
letter to the National Bureau of Investigation (NBI) asking for assistance in the investigation of
the matter (Exh. "A"). A few days thereafter, NBI agents John Leonard David and Rafael Ragos
arrived at the Dentrade office. They examined the particular checks which involved large
amounts and interviewed Doroteo.

When asked by the two NBI agents, Villareal told them that there were three (3) checks pending
for his signature, UCPB checks, all in petty cash: one check was for P1,000.00, another for
P5,000.00, and the last one for P6,000.00. They were all in typewritten form which [respondent]
prepared. As suggested by the NBI agents, Villareal signed the three (3) checks. Doroteo had the
three checks photocopied then released their originals to [respondent].

On instruction of Villareal, Doroteo and NBI agent David went to UCPB the next day hoping
that one of the checks will be encashed. At or about 3:00 p.m. on that day, Doroteo asked the
bank teller if Villareals three checks were encashed. The bank teller informed Doroteo that
UCPB check in the amount of P65,000.00 was encashed. Doroteo was surprised because she was
then holding a photocopy of the original check for P5,000.00 while she saw the teller holding a
check for P65,000.00 but the check number and date were exactly the same as that of its
photocopy. Obviously, the number "6" was intercalated in the check by adding the said number
before the digits "5,000.00." Upon Doroteos request, the teller gave her a photocopy of the
supposedly altered check.

Doroteo reported back to the Dentrade office and handed to Villareal the photocopy of the check
bearing the amount of P65,000.00. When summoned, [respondent] arrived then executed a
statement voluntarily giving back the amount of P60,000.00 to Villareal in the presence of his
lawyers Lazatin and Vallente, and Doroteo. The said statement was in the handwriting of
[respondent] (Exh. "D"), which reads:

"After being confronted by Mr. Dennis T. Villareal, I am voluntarily surrendering the P60,000.00
as part of the proceeds of UCPB check # 681039 dated October 30, 1996 as follows (in
P1,000.00 bills) (serial no. of P1,000.00 bills subject of the statement)."

Doroteo photocopied the P1,000.00 bills (Exh. "E"). After [respondent] admitted the taking of
the excess amount of P60,000.00, the NBI agents placed her under arrest and took her to the NBI
detention center.

According to witness Corompido, Villareals messenger, at 10:00 a.m. of October 30, 1996, he
was bound for UCPB, Makati Avenue branch. [Respondent] requested him to pay her
"Extelcom" bill and asked him to meet her at the UCPB bank. After several minutes, the two met
at the bank. [Respondent] handed to Corompido her "Extelcom" bill and one personal check of
Villareal in the amount of P65,000.00. [Respondent] returned to the Dentrade [office].
Corompido gave to the teller [respondents] "Extelcom" payment and also the personal check of
Villareal for P65,000.00. The teller release the P65,000.00 to Corompido who signed on the
stamped portion of the check. [Respondent] Aliga has a different version for her defense. She
claimed that on October 30, 1996 at around 2:30 p.m., the NBI agents arrested her but they did
[not] inform [her] of her constitutional rights to remain silent and to be assisted by counsel; that
she was actually an accounting assistant to Dentrades chief accountant, Yolanda Martirez, the
accounting clerk being Annaliza Perez; that she was not in charge of Villareals personal
checking account, but Martirez; that Perez was the one in custody of the [checkbooks] pertaining
to the personal checking accounts of Villareal with UCPB and [Chinabank]; that Doroteo was in
possession of another [checkbook] and kept it in Villareals residence.

[Respondent] admitted that the UCPB and Chinabank checks were also used for the
replenishment of the cash advances made by Villareal; that the replenishment was prepared using
a typewriter by Martirez, Perez, Doroteo and herself; that there was no regulation or control
mechanism in their office where the responsibility for preparing any particular check on the
personal account of Villareal could be identified; that the issuance of checks against the personal
checking accounts at the UCPB and Chinabank were frequent, from 5 to 12 checks daily; and
that there were no accompanying vouchers to record the purposes for which the checks were
issued; and that it was Martirez who monitors Villareals personal checks at the UCPB and
Chinabank.7

Additionally, respondent Aliga claimed that Perez, Doroteo, and Martirez are also using
typewriter in the check preparation.8 Moreover, at the time she was summoned by Villareal
inside his office, the two NBI agents (David and Ragos) and Villareals counsels (Attys. Lazatin
and Vallente) were joined in by NBI Director Toledo.9 The extent of the NBIs participation is
disputed. While respondent Aliga10 maintained that she was already arrested by the NBI at the
moment she was called to the office of Villareal, David11 testified that they were merely silent
spectators therein, just witnessing the confrontation or interview conducted by Villareal and not
even talking to respondent Aliga.

The RTC succinctly opined that the evidence of the prosecution is very clear that respondent
Aliga must have been the one who made the intercalation in the subject check, and that even
without her written admission (Exhibit "D"), the evidence presented constitutes proof beyond
reasonable doubt. The July 12, 2001 Decision disposed:

WHEREFORE, in view of the foregoing, the Court, finding the accused CONSUELO CRUZ
ALIGA guilty beyond reasonable doubt of the crime charged, hereby sentences her to suffer an
indeterminate sentence of 14 years, 8 months of reclusion temporal as the minimum to 20 years
of reclusion temporal as the maximum.

It appearing that the amount of P60,000.00 subject of the offense was already returned by the
accused, the Court hereby absolves the accused of civil liability in this case.

SO ORDERED.12

Respondent Aliga appealed to the CA, which, on April 27, 2004, reversed and set aside the
judgment of the RTC on the grounds that: (1) her admission or confession of guilt before the NBI
authorities, which already qualifies as a custodial investigation, is inadmissible in evidence
because she was not informed of her rights to remain silent and to have competent and
independent counsel preferably of her own choice; and (2) the totality of the circumstantial
evidence presented by the prosecution is insufficient to overcome the presumption of innocence
of the accused.

Petitioners motion for reconsideration was denied by the CA on August 10, 2004; hence, this
petition raising the issues for resolution as follows:

I.

THE COURT OF APPEALS GRAVELY ERRED IN DECLARING INADMISSIBLE

RESPONDENTS VOLUNTARY ADMISSION OF GUILT, ON ITS CLEARLY
SPECULATIVE AND CONJECTURAL PREMISE THAT RESPONDENTS FREEDOM OF
ACTION WAS IMPAIRED WHEN SHE MADE THE ADMISSION, CONSIDERING THAT:

A. AS LAID DOWN BY THIS HONORABLE COURT, AN ADMISSION OF GUILT

SHIFTS THE BURDEN TO THE DEFENSE TO SHOW THAT IT WAS EXTRACTED
BY FORCE OR DURESS.

B. CONTRARY TO THE JURISPRUDENTIAL GUIDELINES LAID DOWN BY THIS

HONORABLE COURT, THE COURT OF APPEALS ERRONEOUSLY CONCLUDED
THAT RESPONDENT WAS "EFFECTIVELY PLACED UNDER CUSTODIAL
INVESTIGATION" BY THE SHEER PHYSICAL PRESENCE OF THE NBI AGENTS
WHEN THE ADMISSION WAS MADE. C. RESPONDENTS VOLUNTARY
ADMISSION WAS MADE TO A PRIVATE INDIVIDUAL, I.E., PETITIONER
HEREIN.

II.

THE COURT OF APPEALS GRAVELY ERRED, IF NOT ACTED IN EXCESS OF ITS

JURISDICTION, WHEN IT CONCLUDED THAT THE PROSECUTIONS EVIDENCE WAS
INSUFFICIENT TO OVERCOME RESPONDENTS PRESUMPTION OF INNOCENCE,
CONSIDERING THAT:

A. CONTRARY TO THIS HONORABLE COURTS JURISPRUDENTIAL RULING,

THE COURT OF APPEALS ENTIRELY OVERLOOKED THE EVIDENCE ON
RECORD AND EXACTED DIRECT EVIDENCE FROM THE PROSECUTION.

B. THE COURT OF APPEALS ERRONEOUS CONCLUSION THAT RESPONDENT

IS INNOCENT IS BASED ON ITS FINDING OF A SUPPOSED INSUFFICIENCY OF
EVIDENCE WHICH IS CONTRADICTED BY THE EVIDENCE ON RECORD.
 C. THE COURT OF APPEALS DEPARTED FROM SETTLED JURISPRUDENCE,
REQUIRING FROM THE PROSECUTION A QUANTUM OF EVIDENCE GREATER
THAN PROOF BEYOND REASONABLE DOUBT, WHEN IT:

1. ERRONEOUSLY RULED THAT THE PROSECUTION FAILED TO

DISCOUNT THE POSSIBILITY THAT SOMEONE ELSE COULD HAVE
CAUSED THE ALTERATION ON THE CHECK; AND

2. FAULTING THE PROSECUTION FOR NOT PRESENTING PETITIONER

AS A WITNESS.

D. THE COURT OF APPEALS GRAVELY ERRED WHEN, BASED ON NOTHING MORE

THAN RESPONDENTS DENIALS, IT DEPARTED FROM THE WELL-SETTLED RULE
LAID DOWN BY THIS HONORABLE COURT THAT THE TRIAL COURTS FINDINGS OF
FACT AND CONCLUSIONS BASED THEREON, AS WELL AS ITS ASSESSMENT OF THE
CREDIBILITY OF THE WITNESSES, ARE CONCLUSIVE UPON APPELLATE COURTS.13

On the other hand, respondent Aliga countered that:

I.

THE PETITION FOR REVIEW ON CERTIORARI SHOULD BE DISMISSED FOR RAISING

ONLY QUESTIONS OF FACTS.

II.

THE PETITION FOR REVIEW ON CERTIORARI SHOULD BE DISMISSED ON THE

GROUND OF DOUBLE JEOPARDY.

III.

PETITIONER HAS NO STANDING TO FILE THE INSTANT PETITION FOR REVIEW ON

CERTIORARI.

IV.

WITHOUT PREJUDICE TO THE FOREGOING ARGUMENTS, THE PETITION FOR

REVIEW ON CERTIORARI SHOULD BE DISMISSED FOR FAILURE TO SHOW THAT
THE COURT OF APPEALS COMMITTED GRIEVOUS ERROR IN ISSUING THE 27 APRIL
2004 AND 10 AUGUST 2004 DECISIONS; ON THE CONTRARY, THE DECISIONS
APPEAR TO BE IN ACCORD WITH THE FACTS AND THE APPLICABLE LAW AND
JURISPRUDENCE.14
The petition is unmeritorious.

The petition should have been filed

by the State through the OSG

Petitioner took a procedural misstep when he filed the present petition without the representation
of the Office of the Solicitor General (OSG). In Bautista v. Cuneta-Pangilinan,15 We
underscored:

x x x The authority to represent the State in appeals of criminal cases before the Supreme Court
and the CA is solely vested in the Office of the Solicitor General (OSG). Section 35 (1), Chapter
12, Title III, Book IV of the 1987 Administrative Code explicitly provides that the OSG shall
represent the Government of the Philippines, its agencies and instrumentalities and its officials
and agents in any litigation, proceeding, investigation or matter requiring the services of lawyers.
It shall have specific powers and functions to represent the Government and its officers in the
Supreme Court and the CA, and all other courts or tribunals in all civil actions and special
proceedings in which the Government or any officer thereof in his official capacity is a party.
The OSG is the law office of the Government.

To be sure, in criminal cases, the acquittal of the accused or the dismissal of the case against him
can only be appealed by the Solicitor General, acting on behalf of the State. The private
complainant or the offended party may question such acquittal or dismissal only insofar as the
civil liability of the accused is concerned. In a catena of cases, this view has been time and again
espoused and maintained by the Court. In Rodriguez v. Gadiane, it was categorically stated that
if the criminal case is dismissed by the trial court or if there is an acquittal, the appeal on the
criminal aspect of the case must be instituted by the Solicitor General in behalf of the State. The
capability of the private complainant to question such dismissal or acquittal is limited only to the
civil aspect of the case. The same determination was also arrived at by the Court in Metropolitan
Bank and Trust Company v. Veridiano II. In the recent case of Bangayan, Jr. v. Bangayan, the
Court again upheld this guiding principle.

Worthy of note is the case of People v. Santiago, wherein the Court had the occasion to bring this
issue to rest. The Court elucidated:

It is well settled that in criminal cases where the offended party is the State, the interest of the
private complainant or the private offended party is limited to the civil liability. Thus, in the
prosecution of the offense, the complainant's role is limited to that of a witness for the
prosecution. If a criminal case is dismissed by the trial court or if there is an acquittal, an appeal
therefrom on the criminal aspect may be undertaken only by the State through the Solicitor
General. Only the Solicitor General may represent the People of the Philippines on appeal. The
private offended party or complainant may not take such appeal. However, the said offended
party or complainant may appeal the civil aspect despite the acquittal of the accused.

In a special civil action for certiorari filed under Section 1, Rule 65 of the Rules of Court
wherein it is alleged that the trial court committed a grave abuse of discretion amounting to lack
of jurisdiction or on other jurisdictional grounds, the rules state that the petition may be filed by
the person aggrieved. In such case, the aggrieved parties are the State and the private offended
party or complainant. The complainant has an interest in the civil aspect of the case so he may
file such special civil action questioning the decision or action of the respondent court on
jurisdictional grounds. In so doing, complainant should not bring the action in the name of the
People of the Philippines. The action may be prosecuted in [the] name of said complainant.

Thus, the Court has definitively ruled that in a criminal case in which the offended party is the
State, the interest of the private complainant or the private offended party is limited to the civil
liability arising therefrom. If a criminal case is dismissed by the trial court or if there is an
acquittal, an appeal of the criminal aspect may be undertaken, whenever legally feasible, only by
the State through the Solicitor General. As a rule, only the Solicitor General may represent the
People of the Philippines on appeal. The private offended party or complainant may not
undertake such appeal.16

In the case at bar, the petition filed essentially assails the criminal, not the civil, aspect of the CA
Decision. It must even be stressed that petitioner never challenged before the CA, and in this
Court, the RTC judgment which absolved respondent Aliga from civil liability in view of the
return of the P60,000.00 subject matter of the offense on October 30, 1996. Therefore, the
petition should have been filed only by the State through the OSG. Petitioner lacks the
personality or legal standing to question the CA Decision because it is only the OSG which can
bring actions on behalf of the State in criminal proceedings before the Supreme Court and the
CA. Unlike in Montaez v. Cipriano17 where we adopted a liberal view, the OSG, in its
Comment on this case,18 neither prayed that the petition be granted nor expressly ratified and
adopted as its own the petition for the People of the Philippines. Instead, it merely begged to
excuse itself from filing a Comment due to conflict of interest and for not having been impleaded
in the case.

A judgment of acquittal may be

assailed only in a petition for certiorari
under Rule 65 of the Rules of Court

Petitioner also committed another procedural blunder. A petition for certiorari under Rule 65 of
the Rules should have been filed instead of herein petition for review on certiorari under Rule 45.
The People may assail a judgment of acquittal only via petition for certiorari under Rule 65 of
the Rules. If the petition, regardless of its nomenclature, merely calls for an ordinary review of
the findings of the court a quo, the constitutional right of the accused against double jeopardy
would be violated.19 The Court made this clear in People v. Sandiganbayan (First Div.),20 thus:

x x x A petition for review on certiorari under Rule 45 of the Rules of Court and a petition for
certiorari under Rule 65 of the Rules of Court are two and separate remedies. A petition under
Rule 45 brings up for review errors of judgment, while a petition for certiorari under Rule 65
covers errors of jurisdiction or grave abuse of discretion amounting to excess or lack of
jurisdiction. Grave abuse of discretion is not an allowable ground under Rule 45. A petition for
review under Rule 45 of the Rules of Court is a mode of appeal. Under Section 1 of the said
Rule, a party aggrieved by the decision or final order of the Sandiganbayan may file a petition
for review on certiorari with this Court:

Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional
Trial Court, or other courts whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition shall raise only questions of law which
must be distinctly set forth.

However, the provision must be read in relation to Section 1, Rule 122 of the Revised Rules of
Court, which provides that any party may appeal from a judgment or final order "unless the
accused will thereby be placed in double jeopardy." The judgment that may be appealed by the
aggrieved party envisaged in the Rule is a judgment convicting the accused, and not a judgment
of acquittal. The State is barred from appealing such judgment of acquittal by a petition for
review.

Section 21, Article III of the Constitution provides that "no person shall be twice put in jeopardy
of punishment for the same offense." The rule is that a judgment acquitting the accused is final
and immediately executory upon its promulgation, and that accordingly, the State may not seek
its review without placing the accused in double jeopardy. Such acquittal is final and
unappealable on the ground of double jeopardy whether it happens at the trial court or on appeal
at the CA. Thus, the State is proscribed from appealing the judgment of acquittal of the accused
to this Court under Rule 45 of the Rules of Court.

xxxx

A judgment of acquittal may be assailed by the People in a petition for certiorari under Rule 65
of the Rules of Court without placing the accused in double jeopardy. However, in such case, the
People is burdened to establish that the court a quo, in this case, the Sandiganbayan, acted
without jurisdiction or grave abuse of discretion amounting to excess or lack of jurisdiction.
Grave abuse of discretion generally refers to capricious or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or virtual refusal to perform a duty imposed by law, or to
act in contemplation of law or where the power is exercised in an arbitrary and despotic manner
by reason of passion and hostility. No grave abuse of discretion may be attributed to a court
simply because of its alleged misapplication of facts and evidence, and erroneous conclusions
based on said evidence. Certiorari will issue only to correct errors of jurisdiction, and not errors
or mistakes in the findings and conclusions of the trial court.21

The nature of certiorari action was expounded in People v. Court of Appeals (Fifteenth Div.):22

x x x Certiorari alleging grave abuse of discretion is an extraordinary remedy. Its use is confined
to extraordinary cases wherein the action of the inferior court is wholly void. Its aim is to keep
the inferior court within the parameters of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction. No grave abuse of
discretion may be attributed to the court simply because of its alleged misappreciation of facts
and evidence. While certiorari may be used to correct an abusive acquittal, the petitioner in such
extraordinary proceeding must clearly demonstrate that the lower court blatantly abused its
authority to a point so grave as to deprive it of its very power to dispense justice.23

and further in First Corporation v. Former Sixth Division of the Court of Appeals:24

It is a fundamental aphorism in law that a review of facts and evidence is not the province of the
extraordinary remedy of certiorari, which is extra ordinem beyond the ambit of appeal. In
certiorari proceedings, judicial review does not go as far as to examine and assess the evidence
of the parties and to weigh the probative value thereof. It does not include an inquiry as to the
correctness of the evaluation of evidence. x x x It is not for this Court to re-examine conflicting
evidence, re-evaluate the credibility of the witnesses or substitute the findings of fact of the court
a quo.25

The case does not fall within the

exception to rule on double jeopardy

Indeed, a judgment of acquittal, whether ordered by the trial or the appellate court, is final,
unappealable, and immediately executory upon its promulgation.26 The rationale for the rule is
elucidated in the oft-cited case of People v. Hon. Velasco:27

The fundamental philosophy highlighting the finality of an acquittal by the trial court cuts deep
into "the humanity of the laws and in a jealous watchfulness over the rights of the citizen, when
brought in unequal contest with the State. x x x." Thus, Green expressed the concern that "(t)he
underlying idea, one that is deeply ingrained in at least the Anglo-American system of
jurisprudence, is that the State with all its resources and power should not be allowed to make
repeated attempts to convict an individual for an alleged offense, thereby subjecting him to
embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety
and insecurity, as well as enhancing the possibility that even though innocent, he may be found
guilty."

It is axiomatic that on the basis of humanity, fairness and justice, an acquitted defendant is
entitled to the right of repose as a direct consequence of the finality of his acquittal. The
philosophy underlying this rule establishing the absolute nature of acquittals is "part of the
paramount importance criminal justice system attaches to the protection of the innocent against
wrongful conviction." The interest in the finality-of-acquittal rule, confined exclusively to
verdicts of not guilty, is easy to understand: it is a need for "repose," a desire to know the exact
extent of one's liability. With this right of repose, the criminal justice system has built in a
protection to insure that the innocent, even those whose innocence rests upon a jurys leniency,
will not be found guilty in a subsequent proceeding.

Related to his right of repose is the defendants interest in his right to have his trial completed by
a particular tribunal. This interest encompasses his right to have his guilt or innocence
determined in a single proceeding by the initial jury empanelled to try him, for societys
awareness of the heavy personal strain which the criminal trial represents for the individual
defendant is manifested in the willingness to limit Government to a single criminal proceeding to
vindicate its very vital interest in enforcement of criminal laws. The ultimate goal is prevention
of government oppression; the goal finds its voice in the finality of the initial proceeding. As
observed in Lockhart v. Nelson, "(t)he fundamental tenet animating the Double Jeopardy Clause
is that the State should not be able to oppress individuals through the abuse of the criminal
process." Because the innocence of the accused has been confirmed by a final judgment, the
Constitution conclusively presumes that a second trial would be unfair.28

People v. Court of Appeals (Fifteenth Div.)29 also stated:

x x x The finality-of-acquittal doctrine has several avowed purposes. Primarily, it prevents the
State from using its criminal processes as an instrument of harassment to wear out the accused by
a multitude of cases with accumulated trials. It also serves the additional purpose of precluding
the State, following an acquittal, from successively retrying the defendant in the hope of securing
a conviction. And finally, it prevents the State, following conviction, from retrying the defendant
again in the hope of securing a greater penalty. In People v. Velasco, we stressed that an acquitted
defendant is entitled to the right of repose as a direct consequence of the finality of his acquittal x
x x.30

However, the rule against double jeopardy is not without exceptions, which are: (1) Where there
has been deprivation of due process and where there is a finding of a mistrial, or (2) Where there
has been a grave abuse of discretion under exceptional circumstances.31 Unfortunately for
petitioner, We find that these exceptions do not exist in this case.
First, there is no deprivation of due process or a mistrial.1wphi1 In fact, petitioner did not make
any allegation to that effect. What the records show is that during the trial, both parties had more
than sufficient occasions to be heard and to present their evidence. The same is true during the
appeal before the CA. The State, represented by the OSG, was not deprived of a fair opportunity
to prove its case.

And second, no grave abuse of discretion could be attributed to the CA. It could not be said that
its judgment was issued without jurisdiction, and, for this reason, void. Again, petitioner did not
even allege that the CA gravely abused its discretion. Instead, what he asserted was that the CA
"gravely erred" in the evaluation and assessment of the evidence presented by the parties.
Certainly, what he questioned was the purported errors of judgment or those involving
misappreciation of evidence or errors of law, which, as aforesaid, cannot be raised and be
reviewed in a Rule 65 petition. To repeat, a writ of certiorari can only correct errors of
jurisdiction or those involving the commission of grave abuse of discretion, not those which call
for the evaluation of evidence and factual findings.

x x x Any error committed in the evaluation of evidence is merely an error of judgment that
cannot be remedied by certiorari. An error of judgment is one in which the court may commit in
the exercise of its jurisdiction. An error of jurisdiction is one where the act complained of was
issued by the court without or in excess of jurisdiction, or with grave abuse of discretion which is
tantamount to lack or in excess of jurisdiction and which error is correctible only by the
extraordinary writ of certiorari. Certiorari will not be issued to cure errors by the trial court in its
appreciation of the evidence of the parties, and its conclusions anchored on the said findings and
its conclusions of law. Since no error of jurisdiction can be attributed to public respondent in her
assessment of the evidence, certiorari will not lie.32

Upon perusal of the records, it is Our considered view that the conclusions arrived at by the CA
cannot, by any measure, be characterized as capricious, whimsical or arbitrary. While it may be
argued that there have been instances where the appreciation of facts might have resulted from
possible lapses in the evaluation of the evidence, nothing herein detracts from the fact that
relevant and material evidence was scrutinized, considered and evaluated as proven by the CAs
lengthy discussion of its opinion. We note that the petition basically raises issues pertaining to
alleged errors of judgment not errors of jurisdiction which is tantamount to an appeal contrary to
the express injunction of the Constitution the Rules of Court and prevailing jurisprudence.
Conformably then we need not embark upon review of the factual and evidentiary issues raised
by petitioner as these are obviously not within the realm of Our jurisdiction.

WHEREFORE, the instant petition is DISMISSED for lack of merit. The acquittal of herein
respondent Consuelo C. Aliga by the Court of Appeals in its April 27, 2004 Decision and August
10, 2004 Resolution in CA-G.R. CR No. 25581 entitled People of the Philippines v. Consuelo
Cruz Aliga is AFFIRMED.
No pronouncement as to costs.

SO ORDERED.

FIRST DIVISION

G.R. No. 155306, August 28, 2013

MALAYANG MANGGAGAWA NG STAYFAST PHILS., INC., Petitioner, v. NATIONAL

LABOR RELATIONS COMMISSION, STAYFAST PHILIPPINES, INC./ MARIA
ALMEIDA, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

This petition for Certiorari under Rule 65 of the Rules of Court seeks a review and reversal of
the Decision1 dated July 1, 2002 of the Court of Appeals in CA-G.R. SP No. 59465, which
dismissed the petition for certiorari of petitioner Malayang Mangggagawa ng Stayfast Phils.,
Inc.

The Labor Arbiter and the National Labor Relations Commission (NLRC) made similar findings
of fact. Petitioner and Nagkakaisang Lakas ng Manggagawa sa Stayfast (NLMS-Olalia) sought
to be the exclusive bargaining agent of the employees of respondent company, Stayfast
Philippines, Inc. A certification election was conducted on December 29, 1995.2 Out of the 223
valid votes cast, petitioner garnered 109 votes while NLMS-Olalia received 112 votes and 2
votes were for No Union.3 Thus, the Med-Arbiter who supervised the certification election
issued an Order dated January 9, 1996 certifying NLMS-Olalia as the sole and exclusive
bargaining agent of all rank and file employees of respondent company.4 cralaw virtualaw library

Petitioner appealed the Order of the Med-Arbiter to the Secretary of Labor and Employment. The
Secretary of Labor and Employment initially set aside the Order of the Med-Arbiter and called
for run-off election between petitioner and NLMS-Olalia. On motion of NLMS-Olalia, however,
the Secretary of Labor and Employment reconsidered his earlier decision and restored the Med-
Arbiters Order dated January 9, 1996. Petitioner elevated the matter via petition for certiorari to
this Court.5 The petition, docketed as G.R. No. 125957, was dismissed in a Resolution dated
January 14, 1998.6cralaw virtualaw library

Meanwhile, NLMS-Olalia demanded to collectively bargain with respondent company. The latter
rejected petitioners demand, insisting that it would negotiate a collective bargaining agreement
only with whichever union is finally certified as the sole and exclusive bargaining agent of the
workers. Nevertheless, NLMS-Olalia went on strike on April 1, 1997 until it was temporarily
restrained eight days later.7 cral aw virtualaw library
Subsequently, on June 5, 1997, petitioner filed its own notice of strike in the National
Conciliation and Mediation Board (NCMB). Respondent company opposed petitioners move
and filed a motion to dismiss on the ground that petitioner was not the certified bargaining agent
and therefore lacked personality to file a notice of strike.8 Thereafter, the parties were able to
make concessions during the conciliation-mediation stage in the NCMB which led petitioner to
withdraw its notice of strike.9 In this connection, the NCMB issued a Certification dated July 31,
1997 which reads:
CERTIFICATION

TO WHOM IT MAY CONCERN: cralawlibrary

This is to certify that it appears from the Minutes/Agreement of conciliation conference dated
July 15, 1997, which was further confirmed by Conciliator/Mediator Gil Caragayan[,] the Notice
of Strike filed by MMSP-Independent on June [5], 1997, against Stayfast Philippines, Inc. is
considered dropped/withdrawn from the business calendar of this office.

It is further certified that there is no new Notice of Strike filed by the same union.

This certification is being issued upon the written request of Atty. Edgardo R. Abaya.

July 31, 1997.

(Sgd.) LEOPOLDO B. DE JESUS

Director II10 cralaw virtualaw library

On July 21, 1997, however, petitioners members staged a sit-down strike to dramatize their
demand for a fair and equal treatment as respondent company allegedly continued to
discriminate against them. Respondent company issued a memorandum requiring the alleged
participants in the sit-down strike to explain within 24 hours why they should not be
terminated or suspended from work for infraction of company rules and regulations pertaining to
unauthorized work stoppage, acts inimical to company interest, and disregard of instruction of
immediate supervisor to perform assigned task. As no one complied with the memorandum
within the 24-hour deadline, respondent company promptly terminated the service of the
participants in the sit-down strike on July 22, 1997. Consequently, on July 23, 1997, petitioner
staged a strike and filed a complaint for unfair labor practice, union busting and illegal lockout
against respondent company and its General Manager, Maria Almeida, in the NLRC.11 cralaw virtualaw library

In support of its complaint, petitioner alleged that respondents had repeatedly committed acts of
discrimination, such as the denial of the use of the company canteen for purposes of conducting a
strike vote, the constant denial of applications of petitioners members for leave to attend
hearings in relation to certain labor cases while similar applications of members of the other
union were approved, and the suspension of petitioners president for being absent due to
attendance in hearings of labor cases involving petitioners members. Petitioner further claimed
that the termination of about 127 of its officers and members constituted union busting and
unlawful lockout.12 cralaw virtualaw library

For its part, respondent company claimed that petitioner lacked legal authority to go on strike
since it is a minority union. As petitioner withdrew its notice of strike during the proceedings in
the NCMB, the strike conducted by petitioner was illegal as it constituted a wildcat strike and
later became a full-blown strike on July 23, 1997. Petitioner committed illegal acts during the
strike and obstructed the free ingress and egress from respondent companys premises.13 cral aw virtualaw library

On April 27, 1999, the Labor Arbiter rendered a Decision which ruled that, while petitioner may
file a notice of strike on behalf of its members, petitioner failed to cite any instance of
discrimination or harassment when it filed its notice of strike on June 5, 1997 and the incidents
mentioned as discriminatory occurred after the filing of the said notice. Moreover, assuming the
strike was legal at the beginning, it became illegal when petitioner committed acts prohibited
under Article 264(e) of the Labor Code, such as acts of violence, coercion and intimidation and
obstruction of the free ingress to and egress from respondent companys premises. Also,
petitioner was supposed to have made a self-imposed prohibition to stage a strike when it
submitted its labor dispute with respondent company for compulsory arbitration in the afternoon
of July 23, 1997. Yet, petitioner continued with its strike. For these reasons, the Labor Arbiter
dismissed the petition.14 The dispositive portion of the Labor Arbiters Decision dated April 27,
1999 reads:
PREMISES CONSIDERED, the complaint is hereby dismissed for lack of merit.15 cral aw virtualaw library

Petitioner appealed but, in a Resolution dated January 31, 2000, the NLRC upheld the Labor
Arbiters Decision. According to the NLRC, the actuations of petitioner were patently illegal
because the sit-down strike staged on July 21, 1997 was made barely a week after petitioner
withdrew its notice of strike, with prejudice, on account of the concessions agreed upon by the
parties. Petitioner filed no new notice of strike that could have supported its charges of
discriminatory acts and unfair labor practice. Moreover, no evidence was presented to establish
such charges. Also, petitioners members were given the opportunity to explain their violation of
respondent companys rules on unauthorized work stoppage, acts inimical to company interest
and disregard of instruction of immediate supervisor to perform assigned task. Thus, the NLRC
dismissed petitioners appeal.16 The dispositive portion of the NLRCs Resolution dated January
31, 2000 reads:
WHEREFORE, premises considered, the decision under review is AFFIRMED, and
complainants appeal, DISMISSED, for lack of merit.17 cralaw virtualaw library

Petitioner filed a motion for reconsideration but the NLRC denied it in a Resolution dated April
10, 2000.18cral aw virtualaw library

Petitioner filed a petition for certiorari in the Court of Appeals, docketed as CA-G.R. SP No.
59465, on the following grounds:
(A) RESPONDENT NLRC COMMITTED GROSS AND GRAVE ABUSE OF DISCRETION
WHEN IT UPHELD THE LABOR ARBITERS DECISION.

(B) COMPLAINANTS/APPELLANTS WHOSE TERMINATION RESULTED FROM THE

UNFAIR LABOR PRACTICE[,] UNION-BUSTING AND UNLAWFUL LOCKOUT OF
HEREIN RESPONDENT ARE ENTITLED TO REINSTATEMENT WITH FULL
BACKWAGES.

(C) COMPLAINANTS, BY REASON OF THE ARBITRARY ACTION IN WANTON

DISREGARD OF THE LEGAL RIGHTS OF HEREIN [COMPLAINANTS,] ARE ENTITLED
TO DAMAGES AND ATTORNEYS FEES.19 cralaw virtualaw library
In a Decision dated July 1, 2002, the Court of Appeals found that petitioner was seeking a review
of the findings of fact and conclusion of the Labor Arbiter which was sustained by the NLRC.
The Court of Appeals found no cogent reason to indulge petitioner. It applied the rule that
findings of fact made by the Labor Arbiter and affirmed by the NLRC are considered by the
appellate court as binding if supported by substantial evidence. The Court of Appeals ruled that
the NLRC Resolution dated January 31, 2000 was supported by justifiable reason and cannot be
faulted with grave abuse of discretion. Petitioner failed to establish that the NLRC committed
grave abuse of discretion. Moreover, a petition for certiorari is not used to correct a lower
tribunals appreciation of evidence and findings of fact. Thus, the Court of Appeals dismissed the
petition. The dispositive portion of the Court of Appeals Decision dated July 1, 2002 reads: cral awlibrary

WHEREFORE, foregoing premises considered, the Petition, having no merit, in fact and in law,
is hereby DENIED DUE COURSE and ORDERED DISMISSED. Resultantly, the assailed
Resolution[s] are AFFIRMED, with costs to Petitioner.20 cralaw virtualaw library

Hence, this petition for certiorari21 under Rule 65 of the Rules of Court.

According to petitioner, it interposes appeal on the judgment of the Honorable Justices of the
Court of Appeals on the following grounds:
(1) The Honorable Justices of the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they upheld the rulings of the NLRC and
disregarded the constitutional protection of labor as well as Article 248 (e) and Article 263 of the
Labor Code.

(2) The Honorable Justices of the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they upheld the decision of the NLRC that the
termination of complainants/appellants were valid and corollary thereto no reinstatement[,]
backwages, damages and attorneys fees were awarded.22 cral aw virtualaw library

In discussing the above grounds, petitioner claims that the discriminatory acts of respondent
company and its General Manager against petitioners members constituted unfair labor practice
under Article 248(e) of the Labor Code, as amended. The termination of employment of
petitioners 127 officers and members constituted union-busting and unlawful lockout. As the
said officers and members were unlawfully dismissed from employment, they are entitled to
reinstatement with full backwages. The arbitrary action of respondent company and its General
Manager wantonly disregarded the legal rights of petitioners officers and members thereby
entitling said officers and members to damages and attorneys fees.23 cral aw virtualaw library

Respondent company and its General Manager, for their part, question the timeliness of the
petition which was filed 52 days after petitioners receipt of the Decision of the Court of
Appeals. They point out that petitioner should have filed a petition for review under Rule 45 of
the Rules of Court within 15 days from receipt of a copy of the Court of Appeals Decision.
Respondent company and its General Manager also argue that the sit-down strike which
subsequently became a full blown strike conducted by petitioner was illegal as it had previously
withdrawn its notice of strike. The illegality of the strike was compounded by the commission of
prohibited acts like the blocking of the entry and exit points of respondent companys premises.
Also, petitioners officers and employees were afforded due process before they were dismissed
as they were issued a memorandum requiring them to explain their participation in the illegal sit-
down strike but they simply ignored the said memorandum.24 cral aw virtualaw library

The petition fails for many reasons.

First, this petition for certiorari is a wrong remedy.

A petition for certiorari under Rule 65 of the Rules of Court is a special civil action that may be
resorted to only in the absence of appeal or any plain, speedy and adequate remedy in the
ordinary course of law.25 Contrary to petitioners claim in the Jurisdictional Facts portion of its
petition that there was no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law other than this petition for certiorari, the right recourse was to appeal to this Court
in the form of a petition for review on certiorari under Rule 45 of the Rules of Court, Section 1
of which provides:
Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from
a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of
Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with
the Supreme Court a verified petition for review on certiorari. The petition may include an
application for a writ of preliminary injunction or other provisional remedies and shall raise only
questions of law, which must be distinctly set forth. The petitioner may seek the same provisional
remedies by verified motion filed in the same action or proceeding at any time during its
pendency.
For purposes of appeal, the Decision dated July 1, 2002 of the Court of Appeals was a final
judgment as it denied due course to, and dismissed, the petition. Thus, the Decision disposed of
the petition of petitioner in a manner that left nothing more to be done by the Court of Appeals in
respect to the said case. Thus, petitioner should have filed an appeal by petition for review on
certiorari under Rule 45, not a petition for certiorari under Rule 65, in this Court. Where the
rules prescribe a particular remedy for the vindication of rights, such remedy should be availed
of.

The proper remedy to obtain a reversal of judgment on the merits, final order or resolution is
appeal. This holds true even if the error ascribed to the court rendering the judgment is its lack of
jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse of
discretion in the findings of fact or of law set out in the decision, order or resolution. The
existence and availability of the right of appeal prohibits the resort to certiorari because one of
the requirements for the latter remedy is that there should be no appeal.26 cral aw virtualaw library

Petitioner cannot mask its failure to file an appeal by petition for review under Rule 45 of the
Rules of Court by the mere expedient of conjuring grave abuse of discretion to avail of a petition
for certiorari under Rule 65. The error of petitioner becomes more manifest in light of the
following pronouncement in Balayan v. Acorda27:
It bears emphasis that the special civil action for certiorari is a limited form of review and is a
remedy of last recourse. The Court has often reminded members of the bench and bar that this
extraordinary action lies only where there is no appeal nor plain, speedy and adequate remedy in
the ordinary course of law. It cannot be allowed when a party to a case fails to appeal a judgment
despite the availability of that remedy, certiorari not being a substitute for a lapsed or lost
appeal. Where an appeal is available, certiorari will not prosper, even if the ground therefor is
grave abuse of discretion. x x x. (Citations omitted.)
Moreover, certiorari is not and cannot be made a substitute for an appeal where the latter remedy
is available but was lost through fault or negligence.28 In this case, petitioner received the
Decision dated July 1, 2002 on August 2, 2002 and, under the rules,29 had until August 19, 2002
to file an appeal by way of a petition for review in this Court. Petitioner let this period lapse
without filing an appeal and, instead, filed this petition for certiorari on October 1, 2002.

Second, even assuming that a petition for certiorari is the correct remedy in this case, petitioner
failed to comply with the requirement of a prior motion for reconsideration.

As a general rule, a motion for reconsideration is a prerequisite for the availment of a petition for
certiorari under Rule 65.30 The filing of a motion for reconsideration before resort to certiorari
will lie is intended to afford the public respondent an opportunity to correct any actual or fancied
error attributed to it by way of re-examination of the legal and factual aspects of the case.31 While
there are well recognized exceptions to this rule,32 this petition is not covered by any of those
exceptions. The Court of Appeals was not given any opportunity either to rectify whatever error
it may have made or to address the ascription and aspersion of grave abuse of discretion thrown
at it by petitioner. Nor did petitioner offer any compelling reason to warrant a deviation from the
rule. The instant petition for certiorari is therefore fatally defective.

Third, petitioner was not able to establish its allegation of grave abuse of discretion on the part of
the Court of Appeals.

Where a petition for certiorari under Rule 65 of the Rules of Court alleges grave abuse of
discretion, the petitioner should establish that the respondent court or tribunal acted in a
capricious, whimsical, arbitrary or despotic manner in the exercise of its jurisdiction as to be
equivalent to lack of jurisdiction.33 This is so because grave abuse of discretion is well-defined
and not an amorphous concept that may easily be manipulated to suit ones purpose. In this
connection, Yu v. Judge Reyes-Carpio34 is instructive:
The term grave abuse of discretion has a specific meaning. An act of a court or tribunal can
only be considered as with grave abuse of discretion when such act is done in a capricious or
whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion
must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal
to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is
exercised in an arbitrary and despotic manner by reason of passion and hostility. Furthermore,
the use of a petition for certiorari is restricted only to truly extraordinary cases wherein the act
of the lower court or quasi-judicial body is wholly void. From the foregoing definition, it is
clear that the special civil action of certiorari under Rule 65 can only strike an act down for
having been done with grave abuse of discretion if the petitioner could manifestly show that such
act was patent and gross. x x x. (Citations omitted.)
In this case, nowhere in the petition did petitioner show that the issuance of the Decision dated
July 1, 2002 of the Court of Appeals was patent and gross that would warrant striking it down
through a petition for certiorari. Aside from a general statement in the Jurisdictional Facts
portion of the petition and the sweeping allegation of grave abuse of discretion in the general
enumeration of the grounds of the petition,35 petitioner failed to substantiate its imputation of
grave abuse of discretion on the part of the Court of Appeals. No argument was advanced to
show that the Court of Appeals exercised its judgment capriciously, whimsically, arbitrarily or
despotically by reason of passion and hostility. Petitioner did not even discuss how or why the
conclusions of the Court of Appeals were made with grave abuse of discretion. Instead, petitioner
limited its discussion on its version of the case, which had been already rejected both by the
Labor Arbiter and the NLRC. Thus, petitioner failed in its duty to demonstrate with definiteness
the grave abuse of discretion that would justify the proper availment of a petition for certiorari
under Rule 65 of the Rules of Court.

Fourth, petitioner essentially questioned the factual findings of the Labor Arbiter and the NLRC.
Petitioner cannot properly do that in a petition for certiorari.

Petitioner used the Discussion/Arguments portion of its petition to refute the findings of fact of
the Labor Arbiter which was upheld by the NLRC. In particular, petitioner reiterated its position
that respondent company and its General Manager committed discriminatory acts against
petitioners members which constituted unfair labor practice; that the termination of employment
of petitioners officers and members was a case of union-busting and unlawful lockout; and, that
the said officers and members were unlawfully dismissed from employment and are therefore
entitled to reinstatement with full backwages, plus damages and attorneys fees.36 For petitioner
to question the identical findings of the Labor Arbiter and the NLRC is to raise a question of fact.
However, it is settled that questions of fact cannot be raised in an original action for certiorari.37
Only established or admitted facts can be considered.38Romys Freight Service v. Castro39
explains the rationale of this rule:
The Supreme Court is not a trier of facts, more so in the consideration of the extraordinary writ
of certiorari where neither questions of fact nor of law are entertained, but only questions of lack
or excess of jurisdiction or grave abuse of discretion. The sole object of the writ is to correct
errors of jurisdiction or grave abuse of discretion. The phrase grave abuse of discretion has a
precise meaning in law, denoting abuse of discretion too patent and gross as to amount to an
evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in
contemplation of law, or where the power is exercised in an arbitrary and despotic manner by
reason of passion and personal hostility. It does not encompass an error of law. Nor does it
include a mistake in the appreciation of the contending parties respective evidence or the
evaluation of their relative weight. (Citations omitted.)
Fifth, considering that petitioner basically presented an issue of fact, its petition for certiorari
crumbles in view of the identical findings of the Labor Arbiter and the NLRC which were further
upheld by the Court of Appeals.

The Court of Appeals correctly ruled that findings of fact made by Labor Arbiters and affirmed
by the NLRC are not only entitled to great respect, but even finality, and are considered binding
if the same are supported by substantial evidence.40 That ruling is based on established case law.41
Furthermore, in arriving at the said ruling, the Court of Appeals even reviewed the rationale of
the Labor Arbiters decision and was convinced that there was justifiable reason for the NLRC to
uphold the same.42 This Court finds no compelling reason to rule otherwise.

Sixth, even on the merits, the case of petitioner has no leg to stand on.
Petitioners case rests on the alleged discriminatory acts of respondent company against
petitioners officers and members. However, both the Labor Arbiter and the NLRC held that
there was no sufficient proof of respondent companys alleged discriminatory acts.43 Thus,
petitioners unfair labor practice, union-busting and unlawful lockout claims do not hold water.
Moreover, the established facts as found by the NLRC are as follows: the sit-down strike made
by petitioners officers and members on July 21, 1997 was in violation of respondent companys
rules, and petitioners officers and members ignored the opportunity given by respondent
company for them to explain their misconduct, which resulted in the termination of their
employment.44 The Court of Appeals ruled that the said findings were supported by substantial
evidence.45 This Court finds that such ruling of the appellate court is not grave abuse of
discretion, nor could it be considered wrong.

In sum, there is an abundance of reasons, both procedural and substantive, which are all fatal to
petitioners cause. In contrast, the instant petition for certiorari suffers from an acute scarcity of
legal and factual support.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 191215 February 3, 2014

THENAMARIS PHILIPPINES, INC. (Formerly INTERMARE MARITIME AGENCIES,

INC.)/ OCEANIC NAVIGATION LTD. and NICANOR B. ALTARES, Petitioners,
vs.
COURT OF APPEALS and AMANDA C. MENDIGORIN (In behalf of her deceased
husband GUILLERMO MENDIGORIN), Respondents.

DECISION

DEL CASTILLO, J.:

This Petition for Certiorari filed under Rule 65 of the Rules of Court assails the Resolution1
dated November 20, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 110808 for allegedly
having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.
The CA, through the said Resolution, entertained private respondent's Petition for Certiorari2
despite having been filed 15 days late and allowed her to correct the technical infirmities therein.
Also assailed is the CA's February 10, 2010 Resolution3 denying petitioners' Motion for
Reconsideration with Prayer to Dismiss4 and giving private respondent another chance to cure
the remaining deficiencies of the petition.

Factual Antecedents

This case stemmed from a complaint for death benefits, unpaid salaries, sickness allowance,
refund of medical expenses, damages and attorneys fees filed by Amanda C. Mendigorin
(private respondent) against petitioner Thenamaris Philippines, Inc., formerly Intermare
Maritime Agencies, Inc./Oceanic Navigation Ltd., (Thenamaris), represented by its general
manager, Capt. Nicanor B. Altares (petitioner), filed with the Labor Arbiter (LA). Private
respondent is the widow of seafarer Guillermo M. Mendigorin (Guillermo) who was employed
by Thenamaris for 27 years as an oiler and eventually, as second engineer in the latters vessels.
Guillermo was diagnosed with and died of colon cancer during the term of the employment
contract between him and Thenamaris.

Ruling of the Labor Arbiter

Ultimately, the LA promulgated his Decision5 dated January 29, 2008 in favor of private
respondent. Thus:

WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of the

complainant [herein private respondent] and finding respondents [herein petitioners] liable to pay
jointly and severally: (a) death benefits amounting to US $50,000.00 at its peso equivalent at the
time of actual payment; (b) reimbursement of medical expenses amounting to P102,759.74; [(c)]
moral and exemplary damages amounting to P100,000.00 and P50,000.00 respectively; and (d)
attorneys fees in the [amount of] ten percent (10%) of the total monetary award.

All other claims are DENIED.6

Ruling of the National Labor Relations Commission (NLRC)

On appeal, the NLRC reversed7 the LAs Decision.

Private respondent moved for reconsideration.8 In a Resolution9 dated June 29, 2009, however,
her motion was denied for lack of merit.

Private respondent, through counsel, received the June 29, 2009 Resolution of the NLRC on July
8, 2009. Sixty-two days thereafter, or on September 8, 2009, she filed a Motion for Extension of
Time to File Petition for Certiorari10 before the CA. Private respondent alleged that she had until
September 7, 2009 (as September 6, 2009, the actual last day for filing, fell on a Sunday) within
which to file a petition for certiorari. However, as her counsel was then saddled and occupied
with equally important cases, it would be impossible for him to file the petition on time,
especially since the case involves voluminous documents necessary in the preparation thereof.
Accordingly, private respondent asked for an extension of 15 days from September 7, 2009, or
until September 22, 2009, within which to file the petition.

On September 22, 2009, private respondent filed her Petition for Certiorari11 before the CA.

Action of the Court of Appeals

In a Resolution12 dated November 20, 2009, the CA noted that private respondents Petition for
Certiorari was filed 15 days late and suffers from procedural infirmities. Nonetheless, in the
interest of substantial justice, the CA entertained the petition and directed private respondent to
cure the technical flaws in her petition. Thus:

The Court, in the interest of justice, resolved to NOTE the petition for certiorari filed on
September 22, 2009, albeit the same was filed fifteen (15) days late.

A perusal of the instant petition reveals the following procedural infirmities, namely:

(1) The attached Verification/Certification of Non-Forum Shopping does not conform

with the requirements under Section 12, Rule II of the 2004 Rules of Notarial Practice, as
a Community Tax Certificate is no longer considered competent evidence of an affiants
identity; and

(2) Except for the copy of the Motion for Reconsideration filed with the National Labor
Relations Commission, no other copies of pertinent and relevant pleadings/documents are
attached therewith, such as petitioners Complaint, respondents Memorandum of Appeal,
petitioners Opposition to Respondents Appeal, if any, all of which may aid this Court in
judiciously resolving the issues raised in the petition.

ACCORDINGLY, this Court, in line with the rule that cases should be determined on the merits,
after full opportunity to all parties for ventilation of their causes and defenses have been given,
rather than on technicality or some procedural imperfections, resolved to DIRECT petitioner to
submit anew a Verification/Certification of Non-Forum Shopping which complies with the
requirements of the rules, and clear and legible copies of the aforementioned
pleadings/documents, within ten (10) days from receipt of notice hereof.

SO ORDERED.13 (Emphasis in the original)

Petitioners filed a Motion for Reconsideration with Prayer to Dismiss,14 strongly opposing
private respondents Motion for Extension to File Petition for Certiorari for being an absolutely
prohibited pleading. Citing Laguna Metts Corporation v. Court of Appeals,15 petitioners argued
that A.M. No. 07-7-12-SC16 effectively rendered the 60-day period for filing a petition for
certiorari non-extendible after it deleted portions of Rule 65 pertaining to extension of time to
file petition. Thus, as the rule now stands, petitions for certiorari must be filed strictly within 60
days from notice of judgment or from the order denying a motion for reconsideration.17

Petitioners also contended that even assuming that an extension is still allowable, private
respondents motion for extension is nevertheless a useless piece of paper as it was filed beyond
the 60-day period for filing a petition for certiorari.

Lastly, petitioners asserted that as private respondents motion for extension is a prohibited
pleading, as well as one filed outside of the reglementary period, then private respondents
Petition for Certiorari is a mere scrap of paper with no remedial value whatsoever. Consequently,
the Decision of the NLRC has become final and executory and is beyond the ambit of judicial
review.

In the meantime, private respondent submitted her Compliance18 with the CAs Resolution of
November 20, 2009. Nevertheless, she still failed to attach thereto copies of her Complaint filed
before the LA and Memorandum filed with the NLRC.

In a Resolution19 dated February 10, 2010, the CA denied petitioners motion and, instead, gave
private respondent one last opportunity to fully comply with its November 20, 2009 Resolution
by submitting clear and legible copies of the still lacking pleadings within five days from notice
thereof.

Thus, the present Petition for Certiorari.

Entry of Judgment20 was already issued by the NLRC on August 13, 2009. Per NLRC Rules, the
June 29, 2009 Resolution became final and executory on July 18, 2009 and was recorded in the
Book of Entries of Judgment.

Issues

1. THE PUBLIC RESPONDENT CA COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
NOTED THE PETITION FOR CERTIORARI FILED BY THE PRIVATE
RESPONDENT INSTEAD OF DISMISSING IT OUTRIGHT FOR HAVING BEEN
FILED BEYOND THE MANDATORY AND JURISDICTIONAL 60-DAY PERIOD
REQUIRED BY SECTION 4, RULE 65 OF THE RULES OF COURT, AS AMENDED
BY A.M. NO. 07-7-12-SC.

2. THE PUBLIC RESPONDENT CA COMMITTED GRAVE ABUSE OF

DISCRETION WHEN, IN NOTING THE VERY LATE PETITION FILED BY THE
PRIVATE RESPONDENT, IT GROSSLY IGNORED THIS HONORABLE COURTS
 VERY RECENT RULING IN LAGUNA METTS CORPORATION v. COURT OF
APPEALS, ARIES C. CAALAM AND GERALDINE ESGUERRA (G.R. NO. 185220,
JULY 27, 2009), WHICH DISALLOWED ANY MOTIONS FOR EXTENSION OF
TIME TO FILE A PETITION FOR CERTIORARI UNDER RULE 65.21 (Underscoring
and emphasis in the original)

Our Ruling

There is merit in the petition.

In Republic v. St. Vincent de Paul Colleges, Inc.22 we had the occasion to settle the seeming
conflict on various jurisprudence touching upon the issue of whether the period for filing a
petition for certiorari may be extended. In said case we stated that the general rule, as laid down
in Laguna Metts Corporation v. Court of Appeals,23 is that a petition for certiorari must be filed
strictly within 60 days from notice of judgment or from the order denying a motion for
reconsideration. This is in accordance with the amendment introduced by A.M. No. 07-7-12-
SC24 where no provision for the filing of a motion for extension to file a petition for certiorari
exists, unlike in the original Section 4 of Rule 6525 which allowed the filing of such a motion
but only for compelling reason and in no case exceeding 15 days.26 Under exceptional cases,
however, and as held in Domdom v. Third and Fifth Divisions of the Sandiganbayan,27 the 60-
day period may be extended subject to the courts sound discretion. In Domdom, we stated that
the deletion of the provisions in Rule 65 pertaining to extension of time did not make the filing
of such pleading absolutely prohibited. "If such were the intention, the deleted portion could just
have simply been reworded to state that no extension of time to file the petition shall be
granted. Absent such a prohibition, motions for extension are allowed, subject to the courts
sound discretion."28

Then in Labao v. Flores,29 we laid down some of the exceptions to the strict application of the
60-day period rule, thus:

[T]here are recognized exceptions to their strict observance, such as: (1) most persuasive and
weighty reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to
comply with the prescribed procedure; (3) good faith of the defaulting party by immediately
paying within a reasonable time from the time of the default; (4) the existence of special or
compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the
fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing
that the review sought is merely frivolous and dilatory; (8) the other party will not be unjustly
prejudiced thereby; (9) fraud, accident, mistake or excusable negligence without appellants
fault; (10) peculiar legal and equitable circumstances attendant to each case; (11) in the name of
substantial justice and fair play; (12) importance of the issues involved; and (13) exercise of
sound discretion by the judge guided by all the attendant circumstances.1wphi1 Thus, there
should be an effort on the part of the party invoking liberality to advance a reasonable or
meritorious explanation for his/her failure to comply with the rules.

In this case, counting 60 days from her counsels receipt of the June 29, 2009 NLRC Resolution
on July 8, 2009, private respondent had until September 7, 2009 to file her petition or a motion
for extension, as September 6, 2009, the last day for filing such pleading, fell on a Sunday.
However, the motion was filed only on September 8, 2009.30 It is a fundamental rule of remedial
law that a motion for extension of time must be filed before the expiration of the period sought to
be extended; otherwise, the same is of no effect since there would no longer be any period to
extend, and the assailed judgment or order will have become final and executory.31

Additionally, as cited earlier in Labao, there should be an effort on the part of the litigant
invoking liberality to satisfactorily explain why he or she was unable to abide by the rules.32
Here, the reason offered for availing of the motion for extension is the heavy workload of private
respondents counsel, which is hardly a compelling or meritorious reason as enunciated in Labao.
Time and again, we have held that the excuse of "heavy workload is relative and often self-
serving. Standing alone, it is not a sufficient reason to deviate from the 60-day rule."33

Thus, private respondents motion for extension should have been denied outright.

Notably, the CAs November 20, 2009 Resolution refrained from ruling on the timeliness of
private respondents motion for extension. Instead, it directly ruled on the Petition for Certiorari
as seen by its statement "[t]he Court x x x resolved to NOTE the petition for certiorari x x x,
albeit the same was filed fifteen (15) days late." To our mind, the foregoing pronouncement is an
indirect acknowledgment on the part of the CA that the motion for extension was indeed filed
late. Yet it opted to still entertain and "note" the Petition for Certiorari, justifying its action as
being "in the interest of justice."

We do not approve of the CAs ruling on the matter because, as the motion for extension should
have been denied outright, it necessarily follows that the Petition for Certiorari is, in the words of
petitioners, a "mere scrap of paper with no remedial value whatsoever."

In Negros Slashers, Inc. v. Teng,34 which likewise dealt with the late filing of a petition for
certiorari, we recognized that although procedural rules ought to be strictly enforced by courts in
order to impart stability in the legal system, we have, nonetheless, relaxed the rigid application of
the rules of procedure in several cases to afford the parties the opportunity to fully ventilate their
cases on the merits. This is because the ends of justice would be better served if the parties were
given the chance to argue their causes and defenses. We are likewise constantly reminded that the
general objective of procedure is to facilitate the application of justice to the opposing claims of
the competing parties and always be guided by the principle that procedure must not hinder but,
rather, promote the administration of justice. Concomitant thereto:
Courts have the prerogative to relax procedural rules of even the most mandatory character,
mindful of the duty to reconcile both the need to speedily put an end to litigation and the parties
right to due process. In numerous cases, this Court has allowed liberal construction of the rules
when to do so would serve the demands of substantial justice and equity. x x x35

Here, even assuming that the late filing of the petition would merit relaxation of the rules, the
CAs resolution would have only been acceptable had private respondent shown respect for the
rules by submitting a petition for certiorari which is sufficient in form. In contrast, what private
respondent filed was a petition plagued by several infirmities. Worse, when the CA allowed
petitioner to cure the deficiencies, she failed to fully comply such that she had to be given, albeit
undeservingly, one last chance to submit the still lacking copies of the pertinent pleadings
required of her by the CA.

More importantly, the CA should have dismissed the petition outright in view of the fact that the
June 29, 2009 Resolution of the NLRC denying private respondents Motion for Reconsideration
had already become final and executory as of July 18, 2009.36 Thus, it has no jurisdiction to
entertain the petition, except to order its dismissal. In Labao, we held that:

The NLRCs resolution became final ten (10) days after counsels receipt, and the respondents
failure to file the petition within the required (60)-day period rendered it impervious to any
attack through a Rule 65 petition for certiorari. Thus, no court can exercise jurisdiction to review
the resolution.

Needless to stress, a decision that has acquired finality becomes immutable and unalterable and
may no longer be modified in any respect, even if the modification is meant to correct erroneous
conclusions of fact or law and whether it will be made by the court that rendered it or by the
highest court of the land. All the issues between the parties are deemed resolved and laid to rest
once a judgment becomes final and executory; execution of the decision proceeds as a matter of
right as vested rights are acquired by the winning party. Just as a losing party has the right to
appeal within the prescribed period, the winning party has the correlative right to enjoy the
finality of the decision on the case. After all, a denial of a petition for being time-barred is
tantamount to a decision on the merits. Otherwise, there will be no end to litigation, and this will
set to naught the main role of courts of justice to assist in the enforcement of the rule of law and
the maintenance of peace and order by settling justiciable controversies with finality.37

In sum, the CA committed grave abuse of discretion when it extended underserved and
unwarranted liberality to private respondent. "There is grave abuse of discretion when there is an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in
contemplation of law as when the judgment rendered is not based on law and evidence but on
caprice, whim and despotism xx x."38 Such is present here as shown by the CA's obstinate
refusal to dismiss the case despite the late filing of the motion for extension and the flimsy
excuse for the extension sought, the late filing of the petition and the numerous infirmities
attending the same, and private respondent's continued defiance of its directive. These
circumstances serve to highlight private respondent's propensity to disregard the very rules that
the courts, the litigants and the lawyers are duty-bound to follow.

WHEREFORE, the petition is hereby GRANTED. The assailed Court of Appeals Resolutions
dated November 20, 2009 and February 10, 2010 are REVERSED and SET ASIDE for having
been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. The
Petition for Certiorari filed by private respondent Amanda C. Mendigorim in CA-G.R. SP No.
110808 is DISMISSED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 173590 December 9, 2013

PHILIPPINE POSTAL CORPORATION, Petitioner,

vs.
COURT OF APPEALS and CRISANTO G. DE GUZMAN, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated April 4, 2006 July 19,
2006 of the Court of Appeals (CA) in CA-G.R. SP No. 88891 which reversed and set aside the
Resolutions dated November 23, 20044 and January 6, 20055 of petitioner Philippine Postal
Corporation (PPC), through its then Postmaster General and Chief Executive Officer (CEO)
Dario C. Rama (PG Rama), finding that the latter gravely abused its discretion when it revived
the administrative charges against respondent Crisanto G. De Guzman (De Guzman) despite their
previous dismissal.

The Facts

Sometime in 1988, De Guzman, then a Postal Inspector at the Postal Services Office,6 was
investigated by Regional Postal Inspector Atty. Raul Q. Buensalida (Atty. Buensalida) in view of
an anonymous complaint charging him of dishonesty and conduct grossly prejudicial to the best
interest of the service.7 As a result thereof, Atty. Buensalid are commended8 that De Guzman be
formally charged with twelve (12) counts of the same offenses and eventually be relieved from
his post to protect the employees and witnesses from harassment.

Since the Postal Services Office was then a line-agency of the Department of Transportation and
Communication(DOTC), Atty. Buensalidas investigation report was forwarded to the said
departments Investigation Security and Law Enforcement Staff (ISLES) for further evaluation
and approval. Contrary to the findings of Atty. Buensalida, however, the ISLES, through a
Memorandum9dated February 26, 1990prepared by Director Antonio V. Reyes (Dir. Reyes),
recommended that De Guzman be exonerated from the charges against him due to lack of merit.
The said recommendation was later approved by DOTC Assistant Secretary Tagumpay R.
Jardiniano (Asec. Jardiniano) in a Memorandum10 dated May 15, 1990.

On February 6, 1992, Republic Act No. (RA)7354,11 otherwise known as the Postal Service
Act of 1992, was passed. Pursuant to this law, the Postal Services Office under the DOTC was
abolished, and all its powers, duties, and rights were transferred to the PPC.12 Likewise, officials
and employees of the Postal Services Office were absorbed by the PPC.13

Subsequently, or on July 16, 1993, De Guzman, who had by then become Chief Postal Service
Officer, was formally charged14 by the PPC, through Postmaster General Eduardo P. Pilapil(PG
Pilapil), for the same acts of dishonesty, gross violation of regulations, and conduct grossly
prejudicial to the best interest of the service, and the Anti-graft law, committed as follows:

Investigation disclosed that while you were designated as Acting District Postal Inspector with
assignment at South Cotabato District, Postal Region XI, Davao City, you personally made
unauthorized deductions and/or cuttings from the ten (10%) percent salary differential for the
months of January-March, 1988,when you paid each of the employees of the post office at
Surallah, South Cotabato, on the last week of April 1988, and you intentionally failed to give to
Postmaster Juanito D. Dimaup, of the said post office his differential amounting to P453.91,
Philippine currency; that you demanded and required Letter Carrier Benjamin Salero, of the
aforestated post office to give fifty (P50.00) pesos out of the aforesaid differential; that you
personally demanded, take away and encashed the salary differential check No. 008695317 in the
total amount of P1,585.67, Philippine currency, of Postmaster Benjamin C. Charlon, of the post
office at Lake Cebu, South Cotabato, for your own personal gain and benefit to the damage and
prejudice of the said postmaster; that you personally demanded, required and received from
Postmaster Peniculita B. Ledesma, of the post office of Sto. Nio, South Cotabato, the amount of
P300.00, P200.00 and P100.00 for hazard pay, COLA differential and contribution to the affair
"Araw ng Kartero and Christmas Party," respectively; that you personally demanded and
required Letter Carrier Feliciano Bayubay, of the post office at General Santos City to give
money in the amount of P1,000.00, Philippine Currency, as a condition precedent for his
employment in this Corporation, and you again demanded and personally received from the said
letter carrier the amount of P300.00 Philippine currency, as gift to the employees of the Civil
Service Commission, Davao City to facilitate the release of Bayubays appointment; that you
demanded and forced Postmaster Felipe Collamar, Jr.,of the post office at Maitum, South
Cotabato to contribute and/or produce one (1) whole Bariles fish for shesami (sic), and you also
required and received from the aforesaid postmaster the amount of P500.00 Philippine currency;
that you demanded and required Postmaster Diosdado B. Delfin to give imported wine and/or
700.00, Philippine currency, for gift to the outgoing Regional Director Escalada; and that you
failed to liquidate and return the substantial amount of excess contributionson April, 1987, June,
1987 and December, 1987,for Postal Convention at MSU, arrival of Postmaster General Banayo
and Araw ng Kartero and Christmas Party, respectively, for your own personal gain and benefit
to the damage and prejudice of all the employees assigned at the aforementioned district.

In a Decision15dated August 15, 1994, De Guzman was found guilty as charged and was
dismissed from the service. Pertinently, its dispositive reads that [i]n the interest of the
service, it is directed that this decision be implemented immediately.16

It appears, however, that the a fore-stated decision was not implemented until five (5) years later
when Regional Director Mama S. Lalanto (Dir. Lalanto) issued a Memorandum17 dated August
17, 1999 for this purpose. De Guzman lost no time in filing a motion for reconsideration,18
claiming that: (a) the decision sought to be implemented was recalled on August 29, 1994 by PG
Pilapil himself; and (b)since the decision had been dormant for more than five (5)years, it may
not be revived without filing another formal charge. The motion was, however, denied in a
Resolution19 dated May 14, 2003, pointing out that De Guzman failed to produce a copy of the
alleged recall order even if he had been directed to do so.

Undaunted, De Guzman filed a second motion for reconsideration, which was resolved20 on
June 2, 2003 in his favor in that: (a) the Resolution dated May 14, 2003 denying De Guzmans
first motion for Reconsideration was recalled; and (b) a formal hearing of the case was ordered to
be conducted as soon as possible. After due hearing, the PPC, through PG Rama, issued a
Resolution21 dated November 23, 2004, finding De Guzman guilty of the charges against him
and consequently dismissing him from the service. It was emphasized therein that when De
Guzman was formally charged on July 16, 1993, the complainant was the PPC, which had its
own charter and was no longer under the DOTC. Thus, the ISLES Memorandum dated February
26, 1990 prepared by Dir. Reyes which endorsed the exoneration of De Guzman and the
dismissal of the complaints against him was merely recommendatory. As such, the filing of the
formal charge on July 16, 1993 was an obvious rejection of said recommendation.22

De Guzmans motion for reconsideration was denied initially in a Resolution23 dated January 6,
2005, but the motion was, at the same time, considered as an appeal to the PPC Board of
Directors (Board).24 The Board, however, required PG Rama to rule on the motion. Thus, in a
Resolution25 dated May 10, 2005, PG Rama pointed out that, being the third motion for
reconsideration filed by De Guzman, the same was in gross violation of the rules of procedure
recognized by the PPC, as well as of the Civil Service Commission (CSC), which both allowed
only one (1) such motion to be entertained.26 It was further held that res judicata was unavailing
as the decision exonerating De Guzman was only a ruling after a fact-finding investigation.
Hence, the same could not be considered as a dismissal on the merits but rather, a dismissal made
by an investigative body which was not clothed with judicial or quasi-judicial power.27

Meanwhile, before the issuance of the Resolution dated May 10, 2005, De Guzman elevated his
case on March 12, 200528 to the CA via a special civil action for certiorari and mandamus,29
docketed as CA-G.R. SP No. 88891, imputing grave abuse of discretion amounting to lack or
excess of jurisdiction in that: (a) the case against him was a mere rehash of the previous
complaint already dismissed by the DOTC, and therefore, a clear violation of the rule on res
judicata; (b) the assailed PPC Resolutions did not consider the evidences submitted by De
Guzman; (c) the uncorroborated, unsubstantiated and contradictory statements contained in the
affidavits presented became the bases of the assailed Resolutions; (d) the Resolution dated
November 23, 2004 affirmed a non-existent decision; (e) Atty. Buensalida was not a credible
witness and his testimony bore no probative value; and(f) the motion for reconsideration filed by
De Guzman of the Resolution dated November 23, 2004 is not the third motion for
reconsideration filed by him.

On June 10, 2005, De Guzman appealed30 the Resolution dated May 10, 2005 before the PPC
Board, which resolution was allegedly received by De Guzman on May 26, 2005. Almost a year
later, the Board issued a Resolution31 dated May 25, 2006,denying the appeal and affirming with
finality the Decision dated August 15, 1994 and the Resolution dated May 14, 2003. The motion
for reconsideration subsequently filed by De Guzman was likewise denied in aResolution32
dated June 29, 2006. On April 4, 2006, the CA rendered a Decision33 in CA-G.R. SP No.
88891, reversing the PPC Resolutions dated November 23, 2004 and January 6, 2005,
respectively. It held that the revival of the case against De Guzman constituted grave abuse of
discretion considering the clear and unequivocal content of the Memorandum dated May 15,
1990 duly signed by Asec. Jardiniano that the complaint against De Guzman was already
dismissed.

Aggrieved, PPC moved for reconsideration which was, however, denied in a Resolution34 dated
July 19, 2006, hence, the instant petition.

Meanwhile, on July 26, 2006, De Guzman filed an appeal of the PPC Boards Resolutions dated
May 25, 2006 and June 29, 2006 with the CSC35 which was, however, dismissedin Resolution
No. 08081536 dated May 6, 2008. The CSC equally denied De Guzmans motion for
reconsideration there from in Resolution No. 09007737 dated January 14, 2009.

The Issues Before the Court

The essential issues for the Courts resolution are whether: (a) De Guzman unjustifiably failed to
exhaust the administrative remedies available to him; (b) De Guzman engaged inforum-
shopping; and (c) the investigation conducted by the DOTC, through the ISLES, bars the filing
of the subsequent charges by PPC.

The Courts Ruling

The petition is meritorious.

A. Exhaustion of administrative remedies.

The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the
administrative agencies to carry out their functions and discharge their responsibilities within the
specialized areas of their respective competence. It is presumed that an administrative agency, if
afforded an opportunity to pass upon a matter, will decide the same correctly, or correct any
previous error committed in its forum. Furthermore, reasons of law, comity and convenience
prevent the courts from entertaining cases proper for determination by administrative agencies.
Hence, premature resort to the courts necessarily becomes fatal to the cause of action of the
petitioner.38 PPC claims that De Guzman failed to subscribe to the rule on exhaustion of
administrative remedies since he opted to file a premature certiorari case before the CA instead
of filing an appeal with the PPC Board, or of an appeal to the CSC, which are adequate remedies
under the law.39

The Court agrees with PPCs submission.

Under Section 21(d) of RA7354, the removal by the Postmaster General of PPC officials and
employees below the rank of Assistant Postmaster General may be appealed to the Board of the
PPC, viz.:

Sec.21.Powers and Functions of the Postmaster General. as the Chief Executive Officer, the
Postmaster General shall have the following powers and functions:

xxxx

(d) to appoint, promote, assign, reassign, transfer and remove personnel below the ranks of
Assistant Postmaster General: Provided, That in the case of removal of officials and employees,
the same may be appealed to the Board;

xxxx
This remedy of appeal to the Board is reiterated in Section 2(a), Rule II of the Disciplinary Rules
and Procedures of the PPC, which providesfurther that the decision of the Board is, in turn,
appeal able to the CSC, viz.:

Section2. DISCIPLINARY JURISDICTION. (a) The Board of Directors shall decide upon
appeal the decision of the Postmaster General removing officials and employees from the
service. (R.A. 7354, Sec. 21 (d)). The decision of the Board of Directors is appeal able to the
Civil Service Commission. It is well-established that the CSC has jurisdiction over all employees
of government branches, subdivisions, instrumentalities, and agencies, including government-
owned or controlled corporations with original charters, and, as such, is the sole arbiter of
controversies relating to the civil service.40 The PPC, created under RA7354, is a government-
owned and controlled corporation with an original charter. Thus, being an employee of the PPC,
De Guzman should have, after availing of the remedy of appeal before the PPC Board, sought
further recourse before the CSC. Records, however, disclose that while De Guzman filed on June
10, 2005 a notice of appeal41 to the PPC Board and subsequently appealed the latters ruling to
the CSC on July 26, 2006, the sewere all after he challenged the PPC Resolution dated
November 23, 2004 (wherein he was adjudged guilty of the charges against him and
consequently dismissed from the service) in a petition for certiorari and mandamus before the
CA(docketed as CA-G.R. SP No. 88891). That the subject of De Guzmans appeal to the Board
was not the Resolution dated November 23, 2004 but the Resolution dated May 10, 2005
denying the motion for reconsideration of the first - mentioned resolution is of no moment. In
Alma Jose v. Javellana,42 the Court ruled that an appeal from an order denying a motion for
reconsideration of a final order or judgment is effectively an appeal from the final order or
judgment itself.43 Thus, finding no cogent explanation on DeGuzmans endor any justifiable
reason for his premature resort to a petition for certiorari and mandamus before the CA, the
Court holds that he failed to adhere to the rule on exhaustion of administrative remedies which
should have warranted the dismissal of said petition.

B. Forum-shopping.

PPC further submits that De Guzman violated the rule on forum-shopping since he still appealed
the order of his dismissal before the PPC Board, notwithstanding the pendency of his petition for
certiorari before the CA identically contesting the same.44

The Court also concurs with PPC on this point.

Aside from violating the rule on exhaustion of administrative remedies, De Guzman was also
guilty of forum-shopping by pursuing two (2) separate remedies petition for certiorari and
appeal that have long been held to be mutually exclusive, and not alternative or cumulative
remedies.45 Evidently, the ultimate reliefsought by said remedies whichDe Guzmanfiled
only within a few months from each other46 is one and the same the setting aside of the
resolution dismissing him from the service. As illumined in the case of Sps. Zosa v. Judge
Estrella,47 where in several precedents have been cited on the subject matter:48

The petitions are denied. The present controversy is on all fours with Young v. Sy, in which we
ruled that the successive filing of a notice of appeal and a petition for certiorari both to assail the
trial courts dismissal order for non-suit constitutes forum shopping. Thus,

Forum shopping consists of filing multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, for the purpose of obtaining a favorable judgment.

There is forum shopping where there exist: (a) identity of parties, or at least suchparties as
represent the same interests in both actions; (b) identity of rights asserted and relief prayed for,
the relief being founded on the same facts; and (c) the identity of the two preceding particulars is
such that any judgment rendered in the pending case, regardless of which party is successful
would amount to res judicata.

Ineluctably, the petitioner, by filing an ordinary appeal and a petition for certiorari with the CA,
engaged in forum shopping. When the petitioner commenced the appeal, only four months had
elapsed prior to her filing with the CA the Petition for Certiorari under Rule 65 and which
eventually came up to this Court by way of the instant Petition (re: Non-Suit). The elements of lit
is pendentia are present between the two suits. As the CA, through its Thirteenth Division,
correctly noted, both suits are founded on exactly the same facts and refer to the same subject
matter the RTC Orders which dismissed Civil Case No. SP-5703 (2000) for failure to
prosecute. In both cases, the petitioner is seeking the reversal of the RTC orders. The parties, the
rights asserted, the issues professed, and the reliefs prayed for, are all the same. It is evident that
the judgment of one forum may amount to res judicata in the other.

xxxx

The remedies of appeal and certiorari under Rule 65 are mutually exclusive and not alternative or
cumulative. This is a firm judicial policy. The petitioner cannot hedge her case by wagering two
or more appeals, and, in the event that the ordinary appeal lags significantly behind the others,
she cannot post facto validate this circumstance as a demonstration that the ordinary appeal had
not been speedy or adequate enough, in order to justify the recourse to Rule 65. This practice, if
adopted, would sanction the filing of multiple suits in multiple fora, where each one, as the
petitioner couches it, becomes a precautionary measure for the rest, thereby increasing the
chances of a favorable decision. This is the very evil that the proscription on forum shopping
seeks to put right. In Guaranteed Hotels, Inc. v. Baltao, the Court stated that the grave evil
sought to be avoided by the rule against forum shopping is the rendition by two competent
tribunals of two separate and contradictory decisions. Unscrupulous party litigants, taking
advantage of a variety of competent tribunals, may repeatedly try their luck in several different
fora until a favorable result is reached. To avoid the resultant confusion, the Court adheres
strictly to the rules against forum shopping, and any violation of these rules results in the
dismissal of the case.

Thus, the CA correctly dismissed the petition for certiorari and the petition for review (G.R. No.
157745) filed with this Court must be denied for lack of merit.

We also made the same ruling in Candido v. Camacho, when the respondent therein assailed
identical court orders through both an appeal and a petition for an extraordinary writ.

Here, petitioners questioned the June 26, 2000 Order, the August 21, 2000 Clarificatory Order,
and the November 23, 2000 Omnibus Order of the RTC via ordinary appeal (CA-G.R. CV No.
69892) and through a petition for certiorari(CA-G.R. SP No. 62915) in different divisions of the
same court. The actions were filed with a months interval from each one. Certainly, petitioners
were seeking to obtain the same relief in two different divisions with the end in view of
endorsing which ever proceeding would yield favorable consequences. Thus, following settled
jurisprudence, both the appeal and the certiorari petitions should be dismissed.(Emphases
supplied; citations omitted)

Similar thereto, the very evil that the prohibition on forum-shopping was seeking to prevent
conflicting decisions rendered by two (2) different tribunalsresulted from De Guzmans abuse
of the processes. Since De Guzmans appeal before the PPC Board was denied in its
Resolutions49dated May 25, 2006 and June 29, 2006, De Guzmans ought the review of said
resolutions before the CSC where he raised yet again the defense of res judicata. Nonetheless,
the CSC, in its Resolution No. 08081550 dated May 6, 2008, affirmed De Guzmans dismissal,
affirming "the Resolutions of the PPC Board of Directors dismissing De Guzman from the
service for Dishonesty, Gross Violation of Regulations, and Conduct Grossly Prejudicial to the
Best Interest of the Service."51

De Guzmans motion for reconsideration of the aforesaid Resolution was similarly denied by the
CSC in its Resolution No. 09007752 dated January 14, 2009. On the other hand, the petition for
certiorari, which contained De Guzmans prayer for the reversal of Resolutions dated November
23, 2004 and January 6, 2005 dismissing him from the service, was granted by the CA much
earlier on April 4, 2006. It should be pointed out that De Guzman was bound by his
certification53 with the CA that if he should thereafter learn that a similar action or proceeding
has been filed or is pending before the Supreme Court, the Court of Appeals, or any other
tribunal or agency, he undertake[s]to report that fact within five (5) days therefrom to
[the]Honorable Court.54 Nothing, however, appears on record that De Guzman had informed
the CA of his subsequent filing of a notice of appeal before the PPC from the Resolution dated
May 10, 2005. By failing to do so, De Guzman committed a violation of his certification against
forum-shopping with the CA, which has been held to be a ground for dismissal of an action
distinct from forum-shopping itself.55

Moreover, De Guzmans contention56 that the filing of the notice of appeal from the said
Resolution was only "taken as a matter of precaution"57 cannot extricate him from the effects of
forum-shopping. He was fully aware when he filed CA-G.R. SP No. 88891 that PG Ramahad
forwarded the records of the case to the PPC Board for purposes of appeal.58 Yet, he decided to
bypass the administrative machinery. And this was not the first time he did so. In his Comment to
the instant petition, De Guzman claimed59 that in response to the Memorandum60 dated August
17, 1999 issued by Dir. Lalanto implementing his dismissal from service, he not only filed a
motion for reconsideration but he likewise challenged the actions of the PPC before the Regional
Trial Court of Manila through a petition for mandamus docketed as Case No. 99-95442. Even
when CA-G.R. SP No. 88891 was decided in De Guzmans favor on April 4, 2006, and PPCs
motion for reconsideration was denied on July 19, 2006, De Guzman nonetheless filed on July
26, 2006 an appeal before the CSC from the denial by the PPC Board of his Notice of Appeal
dated June 7, 2005 as pointed out in CSC Resolution No. 090077.61 While De Guzman did
inform the CSC that he previously filed a petition for certiorari with the CA, he failed to
disclose the fact that the CA had already rendered a decision thereon resolving the issue of
res judicata,62 which was the very same issue before the CSC.

Verily, unscrupulous party litigants who, taking advantage of a variety of competent tribunals,
repeatedly try their luck in several different for a until a favorable result is reached63 cannot be
allowed to profit from their wrongdoing. The Court emphasizes strict adherence to the rules
against forum-shopping, and this case is no exception. Based on the foregoing, the CA should
have then dismissed the petition for certiorari filed by De Guzman not only for being violative of
the rule on exhaustion of administrative remedies but also due to forum-shopping.

In addition, it may not be amiss to state that De Guzmans petition for certiorari was equally
dismissible since one of the requirements for the availment thereof is precisely that there should
be no appeal. It is well-settled that the remedy to obtain reversal or modification of the judgment
on the merits is to appeal. This is true even if the error, or one of the errors, ascribed to the
tribunal rendering the judgment is its lack of jurisdiction over the subject matter, or the exercise
of power in excess thereof, or grave abuse of discretion in the findings of fact or of law set out in
the decision.64 In fact, under Section 30, Rule III (C) of the Disciplinary Rules and Procedures
of the PPC, among the grounds for appeal to the PPC Board from an order or decision of
dismissal are: (a) grave abuse of discretion on the part of the Postmaster General; and (b) errors
in the finding of facts or conclusions of law which, if not corrected, would cause grave and
irreparable damage or injury to the appellant. Clearly, therefore, with the remedy of appeal to the
PPC Board and thereafter to the CSC available to De Guzman, certiorari to the CA should not
have been permitted.
In this relation, it bears noting that PPC has sufficiently addressed De Guzmans argument that
an appeal would not be a speedy and adequate remedy considering that the resolution dismissing
him from service was to be "implemented immediately."65

To elucidate, on February 24, 2005, before De Guzman filed the petition for certiorari dated
March 12, 2005, the PPC Board had passed Board Resolution66 No. 2005-14 adopting a
"Corporate Policy that henceforth the decision of the Postmaster General in administrative cases
when the penalty is removal or dismissal, the same shall not be final and executory pending
appeal to the Office of the Board of Directors." Shortly thereafter, or on March 8, 2005, PG
Rama issued Philpost Administrative Order67 No. 05-05 pursuant to the aforementioned Board
Resolution, the pertinent portions of which are quoted hereunder:

1. Decisions of the Postmaster General in administrative cases where the penalty imposed is
removal/dismissal from the service shall not be final and executory pending appeal to the Office
of the PPC Board of Directors x x x

2. Decisions of the Postmaster General in administrative cases where the penalty imposed is
removal/dismissal from the service shall be executory pending appeal to the Civil Service
Commission;

3. Respondents who have pending appealed administrative cases to the PPC Board of Directors
are entitled to report back to office and receive their respective salary and benefits beginning at
the time they reported back to work. No back wages shall be allowed by virtue of the PPC Board
Resolution No. 2005-14;

4. Following the Civil Service Rules and Regulations, back wages can only be recovered in case
the respondent is exonerated of the administrative charges on appeal; and

5. PPC Board Resolution No. 2005-14 took effect on 24 February 2005. x x x

PPC further claimed that instead of reporting for work while his motion for reconsideration and,
subsequently, his appeal were pending, "[De Guzman] voluntarily elected to absent himself."
Much later, however, De Guzman "finally reported back [to]work and thereby received his salary
and benefits in full for the covered period."68 De Guzman failed to sufficiently rebut these
claims, except to say that he was never given any copy of the aforementioned board resolution
and administrative order.69 Therefore, considering that his dismissal was not to be executed by
PPC immediately (if he had appealed the same), De Guzmans contention that an appeal would
not be a speedy and adequate remedysimilarly deserves no merit.

C. Res judicata.
De Guzman likewise failed to convince the Court of the applicability of the doctrine of res
judicata for having been charged of the same set of acts for which he had been exculpated by the
ISLES of the DOTC whose recommendation for the dismissal of the complaint against De
Guzman was subsequently approved by then DOTC Asec. Jardiniano.

The Court agrees with PPCs argument that there was no formal charge filed by the DOTC
against De Guzman and, as such, the dismissal of the complaint against him by Asec. Jardiniano,
upon the recommendation of the ISLES, did not amount to a dismissal on the merits that would
bar the filing of another case.

While the CA correctly pointed out that it was the DOTC, through its Department Head, that had
disciplinary jurisdiction over employees of the then Bureau of Posts, including De Guzman, it
however proceeded upon the presumption that De Guzman had been formally charged. But he
was not.

Pertinent is Section 16 of the Uniform Rules on Administrative Cases in the Civil Service which
reads as follows:

Section 16. Formal Charge. After a finding of a prima facie case, the disciplining authority
shall formally charge the person complained of. The formal charge shall contain a
specification of charge(s), a brief statement of material or relevant facts, accompanied by
certified true copies of the documentary evidence, if any, sworn statements covering the
testimony of witnesses, a directive to answer the charge(s) in writing under oath in not less than
seventy-two (72) hours from receipt thereof, an advice for the respondent to indicate in his
answer whether or not he elects a formal investigation of the charge(s), and a notice that he is
entitled to be assisted by a counsel of his choice. (Emphasis supplied)

The requisite finding of a prima facie case before the disciplining authority shall formally charge
the person complained of is reiterated in Section 9, Rule III (B) of the Disciplinary Rules and
Procedures of the PPC, to wit:

Section 9. FORMAL CHARGE. When the Postmaster General finds the existence of a
prima facie case, the respondent shall be formally charged. He shall be furnished copies of
the complaint, sworn statements and other documents submitted by the complainant, unless he
had already received the same during the preliminary investigation. The respondent shall be
given at least seventy-two (72) hours from receipt of said formal charge to submit his answer
under oath, together with the affidavits of his witnesses and other evidences, and a statement
indicating whether or not he elects a formal investigation. He shall also be informed of his right
to the assistance of a counsel of his choice. If the respondent already submitted his comment and
counter-affidavits during the preliminary investigation, he shall be given the opportunity to
submit additional evidence. (Emphasis supplied)
The investigation conducted by the ISLES, which "provides, performs, and coordinates security,
intelligence, fact-finding, and investigatory functions for the Secretary, the Department, and
Department-wide official undertakings,"70 was intended precisely for the purpose of
determining whether or not a prima facie case against De Guzman existed. Due to insufficiency
of evidence, however, no formal charge was filed against De Guzman and the complaint against
him was dismissed by Asst. Secretary Jardiniano.

In order that res judicata may bar the institution of a subsequent action, the following requisites
must concur: (a) the former judgment must be final; (b) it must have been rendered by a court
having jurisdiction over the subject matter and the parties; (c) it must be a judgment on the
merits; and (d) there must be between the first and the second actions (i) identity of parties, (ii)
identity of subject matter, and (iii) identity of cause of action.71

A judgment may be considered as one rendered on the merits when it determines the rights and
liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory
objections; or when the judgment is rendered after a determination of which party is right, as
distinguished from a judgment rendered upon some preliminary or formal or merely technical
point.72

In this case, there was no "judgment on the merits" in contemplation of the above-stated
definition. The dismissal of the complaint against De Guzman in the Memorandum73 dated May
15, 1990 of Asec. Jardiniano was a result of a fact-finding investigation only for purposes of
determining whether a prima facie case exists and a formal charge for administrative
offenses should be filed. This being the case, no rights and liabilities of the parties were
determined therein with finality. In fact, the CA, conceding that the ISLES was "a mere fact-
finding body," pointed out that the Memorandum74 dated February 26, 1990 issued by Dir.
Reyes recommending the dismissal of the complaint against De Guzman "did not make any
adjudication regarding the rights of the parties."75

Hence, for the reasons above-discussed, the Court holds that PPC did not gravely abuse its
discretion when it revived the case against De Guzman despite the previous dismissal thereof by
Asec. Jardiniano. Since said dismissal was not a judgment on the merits, the doctrine of res
judicata does not apply.

In fine, due to the errors of the CA as herein detailed, the Court hereby grants the present petition
and accordingly reverses and sets aside the farmer's dispositions. The Resolutions dated
November 23, 2004 and January 6, 2005 of the PPC ordering De Guzman's dismissal from the
service are thus reinstated.

WHEREFORE, the petition is GRANTED. The Decision dated April 4, 2006 and the Resolution
dated July 19, 2006 of the Court of Appeals in CA-G.R. SP No. 88891 are REVERSED and SET
ASIDE, and the Resolutions dated November 23, 2004 and January 6, 2005 of petitioner
Philippine Postal Corporation are hereby REINSTATED.

SO ORDERED.

FIRST DIVISION

G.R. No. 157900, July 22, 2013

ZUELLIG FREIGHT AND CARGO SYSTEMS, Petitioner, v. NATIONAL LABOR

RELATIONS COMMISSION AND RONALDO V. SAN MIGUEL, Respondents.

DECISION

BERSAMIN, J.:

The mere change in the corporate name is not considered under the law as the creation of a new
corporation; hence, the renamed corporation remains liable for the illegal dismissal of its
employee separated under that guise.

The Case

Petitioner employer appeals the decision promulgated on November 6, 2002,1 whereby the Court
of Appeals (CA) dismissed its petition for certiorari and upheld the adverse decision of the
National Labor Relations Commission (NLRC) finding respondent Ronaldo V. San Miguel to
have been illegally dismissed.

Antecedents

San Miguel brought a complaint for unfair labor practice, illegal dismissal, non-payment of
salaries and moral damages against petitioner, formerly known as Zeta Brokerage Corporation
(Zeta).2 He alleged that he had been a checker/customs representative of Zeta since December
16, 1985; that in January 1994, he and other employees of Zeta were informed that Zeta would
cease operations, and that all affected employees, including him, would be separated; that by
letter dated February 28, 1994, Zeta informed him of his termination effective March 31, 1994;
that he reluctantly accepted his separation pay subject to the standing offer to be hired to his
former position by petitioner; and that on April 15, 1994, he was summarily terminated, without
any valid cause and due process.
San Miguel contended that the amendments of the articles of incorporation of Zeta were for the
purpose of changing the corporate name, broadening the primary functions, and increasing the
capital stock; and that such amendments could not mean that Zeta had been thereby dissolved.3

On its part, petitioner countered that San Miguels termination from Zeta had been for a cause
authorized by the Labor Code; that its non-acceptance of him had not been by any means
irregular or discriminatory; that its predecessor-in-interest had complied with the requirements
for termination due to the cessation of business operations; that it had no obligation to employ
San Miguel in the exercise of its valid management prerogative; that all employees had been
given sufficient time to make their decision whether to accept its offer of employment or not, but
he had not responded to its offer within the time set; that because of his failure to meet the
deadline, the offer had expired; that he had nonetheless been hired on a temporary basis; and that
when it decided to hire another employee instead of San Miguel, such decision was not arbitrary
because of seniority considerations.4

Decision of the Labor Arbiter

On November 15, 1999, Labor Arbiter Francisco A. Robles rendered a decision holding that San
Miguel had been illegally dismissed,5 to wit:cralavvonlinelawlibrary

Contrary to respondents claim that Zeta ceased operations and closed its business, we believe
that there was merely a change of business name and primary purpose and upgrading of stocks of
the corporation. Zuellig and Zeta are therefore legally the same person and entity and this was
admitted by Zuelligs counsel in its letter to the VAT Department of the Bureau of Internal
Revenue on 08 June 1994 (Reply, Annex A). As such, the termination of complainants
services allegedly due to cessation of business operations of Zeta is deemed illegal.
Notwithstanding his receipt of separation benefits from respondents, complainant is not estopped
from questioning the legality of his dismissal.6

xxx x

WHEREFORE, in view of the foregoing, complainant is found to have been illegally dismissed.
Respondent Zuellig Freight and Cargo Systems, Inc. is hereby ordered to pay complainant his
backwages from April 1, 1994 up to November 15, 1999, in the amount of THREE HUNDRED
TWENTY FOUR THOUSAND SIX HUNDRED FIFTEEN PESOS (P324,615.00).

The same respondent is ordered to pay the complainant Ronaldo San Miguel attorneys fees
equivalent to ten percent (10%) of the total award.

All other claims are dismissed.

SO ORDERED.7

Decision of the NLRC

Petitioner appealed, but the NLRC issued a resolution on April 4, 2001,8 affirming the decision
of the Labor Arbiter.
The NLRC later on denied petitioners motion for reconsideration via its resolution dated June
15, 2001.9

Decision of the CA

Petitioner then filed a petition for certiorari in the CA, imputing to the NLRC grave abuse of
discretion amounting to lack or excess of jurisdiction, as follows:
cral avvonlinelawlibrary

1. In failing to consider the circumstances attendant to the cessation of business of Zeta; chanroblesvirtualawlibrary

2. In failing to consider that San Miguel failed to meet the deadline Zeta fixed for its
employees to accept the offer of petitioner for re-employment; chanrobl esvirtualawlibrary

3. In failing to consider that San Miguels employment with petitioner from April 1 to 15,
1994 could in no way be interpreted as a continuation of employment with Zeta; chanrobl esvirtualawlibrary

4. In admitting in evidence the letter dated January 21, 1994 of petitioners counsel to the
Bureau of Internal Revenue; and

5. In awarding attorneys fees to San Miguel based on Article 2208 of the Civil Code and
Article 111 of the Labor Code.

On November 6, 2002, the CA promulgated its assailed decision dismissing the petition for
certiorari,10viz:
cralavvonlinelawlibrary

A careful perusal of the records shows that the closure of business operation was not validly
made. Consider the Certificate of Filing of the Amended Articles of Incorporation which clearly
shows that petitioner Zuellig is actually the former Zeta as per amendment dated January 21,
1994. The same observation can be deduced with respect to the Certificate of Filing of Amended
By-Laws dated May 10, 1994. As aptly pointed out by private respondent San Miguel, the
amendment of the articles of incorporation merely changed its corporate name, broadened its
primary purpose and increased its authorized capital stocks. The requirements contemplated in
Article 283 were not satisfied in this case. Good faith was not established by mere registration
with the Securities and Exchange Commission (SEC) of the Amended Articles of Incorporation
and By-Laws. The factual milleu of the case, considered in its totality, shows that there was no
closure to speak of. The termination of services allegedly due to cessation of business operations
of Zeta was illegal. Notwithstanding private respondent San Miguels receipt of separation
benefits from petitioner Zuellig, the former is not estopped from questioning the legality of his
dismissal.

Petitioner Zuelligs allegation that the five employees who refused to receive the termination
letters were verbally informed that they had until 6:00 p.m. of March 1, 1994 to receive the
termination letters and sign the employment contracts, otherwise the former would be
constrained to withdraw its offer of employment and seek for replacements in order to ensure the
smooth operations of the new company from its opening date, is of no moment in view of the
foregoing circumstances. There being no valid closure of business operations, the dismissal of
private respondent San Miguel on alleged authorized cause of cessation of business pursuant to
Article 283 of the Labor Code, was utterly illegal. Despite verbal notice that the employees had
until 6:00 p.m. of March 1, 1994 to receive the termination letters and sign the employment
contracts, the dismissal was still illegal for the said condition is null and void. In point of facts
and law, private respondent San Miguel remained an employee of petitioner Zuellig. If at all, the
alleged closure of business operations merely operates to suspend employment relation since it is
not permanent in character.

Where there is no showing of a clear, valid, and legal cause for the termination of employment,
the law considers the matter a case of illegal dismissal and the burden is on the employer to
prove that the termination was for a valid or authorized cause.

Findings of facts of the NLRC, particularly when both the NLRC and Labor Arbiter are in
agreement, are deemed binding and conclusive upon the Supreme Court.

As regards the second and last argument advanced by petitioner Zuellig that private respondent
San Miguel is not entitled to attorneys fees, this Court finds no reason to disturb the ruling of the
public respondent NLRC. Petitioner Zuellig maintains that the factual backdraft (sic) of this
petition does not call for the application of Article 2208 of the Civil Code and Article 111 of the
Labor Code as private respondents wages were not withheld. On the other hand, public
respondent NLRC argues that paragraphs 2 and 3, Article 2208 of the Civil Code and paragraph
(a), Article 111 of the Labor Code justify the award of attorneys fees. NLRC was saying to the
effect that by petitioner Zuelligs act of illegally dismissing private respondent San Miguel, the
latter was compelled to litigate and thus incurred expenses to protect his interest. In the same
passion, private respondent San Miguel contends that petitioner Zuellig acted in gross and
evident bad faith in refusing to satisfy his plainly valid, just and demandable claim.

After careful and judicious evaluation of the arguments advanced to support the propriety or
impropriety of the award of attorneys fees to private respondent San Miguel, this Court finds the
resolutions of public respondent NLRC supported by laws and jurisprudence. It does not need
much imagination to see that by reason of petitioner Zuelligs feigned closure of business
operations, private respondent San Miguel incurred expenses to protect his rights and interests.
Therefore, the award of attorneys fees is in order.

WHEREFORE, in view of the foregoing, the resolutions dated April 4, 2001 and June 15, 2001
of the National Labor Relations Commission affirming the November 15, 1999 decision of the
Labor Arbiter in NLRC NCR 05-03639-94 (CA No. 022861-00) are hereby AFFIRMED and the
instant petition for certiorari is hereby DENIED and ordered DISMISSED.

SO ORDERED.

Hence, petitioner appeals.

Issues

Petitioner asserts that the CA erred in holding that the NLRC did not act with grave abuse of
discretion in ruling that the closure of the business operation of Zeta had not been bona fide,
thereby resulting in the illegal dismissal of San Miguel; and in holding that the NLRC did not act
with grave abuse of discretion in ordering it to pay San Miguel attorneys fees.11

In his comment,12 San Miguel counters that the CA correctly found no grave abuse of discretion
on the part of the NLRC because the ample evidence on record showed that he had been illegally
terminated; that such finding accorded with applicable laws and jurisprudence; and that he was
entitled to back wages and attorneys fees.

In its reply,13 petitioner reiterates that the cessation of Zetas business, which resulted in the
severance of San Miguel from his employment, was valid; that the CA erred in upholding the
NLRCs finding that San Miguel had been illegally terminated; that his acknowledgment of the
validity of his separation from Zeta by signing a quitclaim and waiver estopped him from
claiming that it had subsequently employed him; and that the award of attorneys fees had no
basis in fact and in law.

Ruling

The petition for review on certiorari is denied for its lack of merit.

First of all, the outcome reached by the CA that the NLRC did not commit any grave abuse of
discretion was borne out by the records of the case. We cannot undo such finding without
petitioner making a clear demonstration to the Court now that the CA gravely erred in passing
upon the petition for certiorari of petitioner.

Indeed, in a special civil action for certiorari brought against a court or quasi-judicial body with
jurisdiction over a case, petitioner carries the burden of proving that the court or quasi-judicial
body committed not a merely reversible error but a grave abuse of discretion amounting to lack
or excess of jurisdiction in issuing the impugned order.14 Showing mere abuse of discretion is not
enough, for it is necessary to demonstrate that the abuse of discretion was grave. Grave abuse of
discretion means either that the judicial or quasi-judicial power was exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, or that the respondent judge, tribunal
or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or board exercising judicial or quasi-
judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of
jurisdiction.15 Under the circumstances, the CA committed no abuse of discretion, least of all
grave, because its justifications were supported by the records and by the applicable laws and
jurisprudence.

Secondly, it is worthy to point out that the Labor Arbiter, the NLRC, and the CA were united in
concluding that the cessation of business by Zeta was not a bona fide closure to be regarded as a
valid ground for the termination of employment of San Miguel within the ambit of Article 283 of
the Labor Code. The provision pertinently reads: cralavvonlinelawlibrary

Article 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Department of
Labor and Employment at least one (1) month before the intended date thereof. x x x.

The unanimous conclusions of the CA, the NLRC and the Labor Arbiter, being in accord with
law, were not tainted with any abuse of discretion, least of all grave, on the part of the NLRC.
Verily, the amendments of the articles of incorporation of Zeta to change the corporate name to
Zuellig Freight and Cargo Systems, Inc. did not produce the dissolution of the former as a
corporation. For sure, the Corporation Code defined and delineated the different modes of
dissolving a corporation, and amendment of the articles of incorporation was not one of such
modes. The effect of the change of name was not a change of the corporate being, for, as well
stated in Philippine First Insurance Co., Inc. v. Hartigan:16 The changing of the name of a
corporation is no more the creation of a corporation than the changing of the name of a natural
person is begetting of a natural person. The act, in both cases, would seem to be what the
language which we use to designate it imports a change of name, and not a change of being.

The consequences, legal and otherwise, of the change of name were similarly dealt with in P.C.
Javier & Sons, Inc. v. Court of Appeals,17 with the Court holding thusly:cralavvonlinelawlibrary

From the foregoing documents, it cannot be denied that petitioner corporation was aware of First
Summa Savings and Mortgage Banks change of corporate name to PAIC Savings and Mortgage
Bank, Inc. Knowing fully well of such change, petitioner corporation has no valid reason not to
pay because the IGLF loans were applied with and obtained from First Summa Savings and
Mortgage Bank. First Summa Savings and Mortgage Bank and PAIC Savings and Mortgage
Bank, Inc., are one and the same bank to which petitioner corporation is indebted. A change in
the corporate name does not make a new corporation, whether effected by a special act or
under a general law. It has no effect on the identity of the corporation, or on its property,
rights, or liabilities. The corporation, upon such change in its name, is in no sense a new
corporation, nor the successor of the original corporation. It is the same corporation with a
different name, and its character is in no respect changed. (Bold underscoring supplied for
emphasis)

In short, Zeta and petitioner remained one and the same corporation. The change of name did not
give petitioner the license to terminate employees of Zeta like San Miguel without just or
authorized cause. The situation was not similar to that of an enterprise buying the business of
another company where the purchasing company had no obligation to rehire terminated
employees of the latter.18 Petitioner, despite its new name, was the mere continuation of Zetas
corporate being, and still held the obligation to honor all of Zetas obligations, one of which was
to respect San Miguels security of tenure. The dismissal of San Miguel from employment on the
pretext that petitioner, being a different corporation, had no obligation to accept him as its
employee, was illegal and ineffectual.

And, lastly, the CA rightfully upheld the NLRCs affirmance of the grant of attorneys fees to
San Miguel. Thereby, the NLRC did not commit any grave abuse of its discretion, considering
that San Miguel had been compelled to litigate and to incur expenses to protect his rights and
interest. In Producers Bank of the Philippines v. Court of Appeals,19 the Court ruled that
attorneys fees could be awarded to a party whom an unjustified act of the other party compelled
to litigate or to incur expenses to protect his interest. It was plain that petitioners refusal to
reinstate San Miguel with backwages and other benefits to which he had been legally entitled
was unjustified, thereby entitling him to recover attorneys fees.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on
November 6, 2002; and ORDERS petitioner to pay the costs of suit.

SO ORDERED.