Civ Pro Cases Full Text

Salenga vs. Court of Appeals February 1, 2012.G.R. No.
174941 p2
Commissioners of Customs vs. Hypermix Feeds Corporation February 1, 2012.G.R.
No. 179579.* P33
Negros Slashers, Inc. vs. Teng G.R. No. 187122. February 22, 2012.*
P46
Sazon vs. Vasquez-Menancio February 22, 2012.G.R. No. 192085.*
P60
The Board of Regents of the Mindanao State University vs. Osop February 22, 2012.
G.R. No. 172448.*
P70
February 1, 2012.G.R. No. 174941.*
ANTONIO P. SALENGA and NATIONAL LABOR RELATIONS

COMMISSION, petitioners,vs. COURT OF APPEALS and CLARK
DEVELOPMENT CORPORATION, respondents.
Corporation Law; Board of Directors; A corporation can only exercise its powers
and transact its business through its board of directors and through its officers and
agents when authorized by a board resolution or its bylaws.It is clear from the
NLRC Rules of Procedure that appeals must be verified and certified against forumshopping by the parties-in-interest themselves. In the case at bar, the parties-ininterest are petitioner Salenga, as the employee, and respondent Clark Development
Corporation as the employer. A corporation can only exercise its powers and transact
its business through its board of directors and through its officers and agents when
authorized by a board resolution or its bylaws. The power of a corporation to sue and
be sued is exercised by the board of directors. The physical acts of the corporation,
like the signing of documents, can be performed only by natural persons duly
authorized for the purpose by corporate bylaws or by a specific act of the board. The
purpose of verification is to secure an assurance that the allegations in the pleading
are true and correct and have been filed in good faith. Thus, we agree with
petitioner that, absent the requisite board resolution, neither Timbol-Roman nor
Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of
Declaration allegedly on behalf of respondent corporation, may be considered as the
appellant and employer referred to by Rule VI, Sections 4 to 6 of the NLRC Rules
of Procedure
Remedial Law; Civil Procedure; Appeals; The perfection of an appeal within the
period prescribed by law is jurisdictional, and the lapse of the appeal period deprives
the courts of jurisdiction to alter the final judgment.Time and again, we have said
that the perfection of an appeal within the period prescribed by law is jurisdictional,
and the lapse of the appeal period deprives the courts of jurisdiction to alter the
final judgment. Thus, there is no other recourse but to respect the findings and
ruling of the labor arbiter. Clearly, therefore, the CA committed grave abuse of
discretion in entertaining the Petition filed before it after the NLRC had dismissed
the case based on lack of jurisdiction. The assailed CA Decision did not even resolve
petitioner Salengas consistent and persistent claim that the NLRC should not
_______________
* SECOND DIVISION.
636
SUPREME COURT
36
REPORTS ANNOTATED
Salenga vs. Court of Appeals
have taken cognizance of the appeal in the first place, absent a board resolution.
Thus, LA Darlucios Decision with respect to the liability of the corporation still
stands.
Corporation Law; Clark Development Corporation; Clark Development
Corporation, a government-owned or -controlled corporation without an original
charter, was incorporated under the Corporation Code. Pursuant to Article IX-B, Sec.
2(1), the civil service embraces only those government-owned or-controlled
corporations with original charter. As such, respondent Clark Development
Corporation and its employees are covered by the Labor Code and not by the Civil
Service Law.Respondent CDC owes its existence to Executive Order No. 80 issued
by then President Fidel V. Ramos. It was meant to be the implementing and
operating arm of the Bases Conversion and Development Authority (BCDA) tasked
to manage the Clark Special Economic Zone (CSEZ). Expressly, respondent was
formed in accordance with Philippine corporation laws and existing rules and
regulations promulgated by the SEC pursuant to Section 16 of Republic Act (R.A.)
7227. CDC, a government-owned or -controlled corporation without an original
charter, was incorporated under the Corporation Code. Pursuant to Article IX-B,
Sec. 2(1), the civil service embraces only those government-owned or -controlled
corporations with original charter. As such, respondent CDC and its employees are
covered by the Labor Code and not by the Civil Service Law, consistent with our
ruling inNASECO v. NLRC, 168 SCRA 122 (1988), in which we established this
distinction.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.
Defensor, Lantion, Villamor & Tolentino Law Offices for petitioner.
Jose Cornelio Lukban for respondents.
SERENO,J.:
The present Petition forCertiorari under Rule 65 assails the Decision1 of
the Court of Appeals (CA) promulgated on 13 September
_______________
1 Penned by Associate Justice Edgardo P. Cruz, with Associate Justices Romeo A. Brawner and Jose C.
Mendoza concurring; Rollo, pp. 240-254.
637
VOL. 664, FEBRUARY 1, 637

2012
2005, dismissing the Complaint for illegal dismissal filed by petitioner
Antonio F. Salenga against respondent Clark Development Corporation

(CDC). The dispositive portion of the assailed Decision states:
WHEREFORE, premises considered, the original and supplemental petitions
areGRANTED. The assailed resolutions of the National Labor Relations
Commission
dated
September
10,
2003
and
January
21,
2004
areANNULLED and SET ASIDE. The complaint filed by Antonio B. Salenga
against Clark Development is DISMISSED. Consequently, Antonio B. Salenga is
ordered to restitute to Clark Development Corporation the amount of P3,222,400.00,
which was received by him as a consequence of the immediate execution of said
resolutions, plus interest thereon at the rate of 6% per annum from date of such
receipt until finality of this judgment, after which the interest shall be at the rate of
12% per annum until said amount is fully restituted.
SO ORDERED.
2
The undisputed facts are as follows:

On 22 September 1998, President/Chief Executive Officer (CEO) Rufo
Colayco issued an Order informing petitioner that, pursuant to the
decision of the board of directors of respondent CDC, the position of head
executive assistantthe position held by petitionerwas declared
redundant. Petitioner received a copy of the Order on the same day and
immediately went to see Colayco. The latter informed him that the Order
had been issued as part of the reorganization scheme approved by the
board of directors. Thus, petitioners employment was to be terminated
thirty (30) days from notice of the Order.
On 17 September 1999, petitioner filed a Complaint for illegal dismissal
with a claim for reinstatement and payment of back wages, benefits, and
moral and exemplary damages against respondent CDC and Colayco. The
Complaint was filed with the National Labor Relations CommissionRegional Arbitration Branch (NLRC-RAB) III in San Fernando,
Pampanga. In defense, respondents, represented by the Office of the

Government Corporate Counsel (OGCC), alleged that
_______________
2 Id., at p. 253.
638
63
8
SUPREME COURT
REPORTS ANNOTATED
the NLRC had no jurisdiction to entertain the case on the ground that
petitioner was a corporate officer and, thus, his dismissal was an intracorporate matter falling properly within the jurisdiction of the Securities
and Exchange Commission (SEC).
On 29 February 2000, labor arbiter (LA) Florentino R. Darlucio issued a
Decision3 in favor of petitioner Salenga. First, the LA held that the NLRC
had jurisdiction over the Complaint, considering that petitioner was not a
corporate officer but a managerial employee. He held the position of head
executive assistant, categorized as a Job Level 12 position, not subject to
election or appointment by the board of directors.
Second, the LA pointed out that respondent CDC and Colayco failed to
establish a valid cause for the termination of petitioners employment. The
evidence presented by respondent CDC failed to show that the position of
petitioner was superfluous as to be classified redundant. The LA further
pointed out that respondent corporation had not disputed the argument of
petitioner Salenga that his position was that of a regular employee.
Moreover, the LA found that petitioner had not been accorded the right to
due process. Instead, the latter was dismissed without the benefit of an
explanation of the grounds for his termination, or an opportunity to be
heard and to defend himself.
Finally, considering petitioners reputation and contribution as a
government employee for 40 years, the LA awarded moral damages
amounting to P2,000,000 and exemplary damages of P500,000. The
dispositive portion of the LAs Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring

respondent Clark Development Corporation and Rufo Colayco guilty of illegal
dismissal and for which they are ordered, as follows:
To reinstate complainant to his former or equivalent position without loss of
seniority rights and privileges;1.
To pay complainant his backwages reckoned from the date of his dismissal on
September 22, 1998 until actual reinstatement or2.
_______________
3 Id., at pp. 577-604.
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2012
merely reinstatement in the payroll which as of this date is in the amount
of P722,400.00;
To pay complainant moral damages in the amount of P2,000,000.00; and,3.

To pay complainant exemplary damages in the amount of P500,000.00.4.
SO ORDERED.4
At the time the above Decision was rendered, respondent CDC was
already under the leadership of Sergio T. Naguiat. When he received the
Decision on 10 March 2000, he subsequently instructed Atty. Monina C.
Pineda, manager of the Corporate and Legal Services Department and
concurrent corporate board secretary, not to appeal the Decision and to so
inform the OGCC.5
Despite these instructions, two separate appeals were filed before LA
Darlucio on 20 March 2000. One appeal6was from the OGCC on behalf of
respondent CDC and Rufo Colayco. The OGCC reiterated its allegation
that petitioner was a corporate officer, and that the termination of his
employment was an intra-corporate matter. The Memorandum of Appeal
was verified and certified by Hilana Timbol-Roman, the executive vice
president of respondent CDC. The Memorandum was accompanied by a
UCPB General Insurance Co., Inc.supersedeas bond covering the amount
due to petitioner as adjudged by LA Darlucio. Timbol-Roman and OGCC
lawyer Roy Christian Mallari also executed on 17 March 2000 a Joint
Affidavit of Declaration wherein they swore that they were the respective
authorized representative and counsel of respondent corporation.
However, the Memorandum of Appeal and the Joint Affidavit of

Declaration were not accompanied by a board resolution from
respondents board of directors authorizing either Timbol-Roman
or Atty. Mallari, or both, to pursue the case or to file the appeal on
behalf of respondent.
_______________
4 Id., at pp. 603-604.
5 Id., at p. 688.
6 Id., at pp. 647-658.
640
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0
SUPREME COURT
REPORTS ANNOTATED
It is noteworthy that Naguiat, who was president/CEO of respondent
CDC from 3 February 2000 to 5 July 2000, executed an Affidavit on 20

March 2002,7wherein he stated that without his knowledge, consent or
approval, Timbol-Roman and Atty. Mallari filed the above-mentioned
appeal. He further alleged that their statements were false.
The second appeal, meanwhile, was filed by former CDC President/CEO
Rufo Colayco. Colayco alleged that petitioner was dismissed not on 22
September 1998, but twice on 9 March 1999 and 23 March 1999. The
dismissal was allegedly approved by respondents CDC board of directors
pursuant to a new organizational structure. Colayco likewise stated that
he had posted a supersedeasbondthe same bond taken out by TimbolRomanissued by the UCPB General Insurance Co. dated 17 March 2000
in order to secure the monetary award, exclusive of moral and exemplary
damages.
Petitioner thereafter opposed the two appeals on the grounds that both
appellants, respondent CDCas allegedly represented by Timbol-Roman
and Atty. Mallariand Rufo Colayco had failed to observe Rule VI,
Sections 4 to 6 of the NLRC Rules of Procedure; and that appellants had
not been authorized by respondents board of directors to represent the

corporation and, thus, they were not the employer whom the Rules
referred to. Petitioner also alleged that appellants failed to refute the
findings of LA Darlucio in the previous Decision.
In the meantime, while the appeal was pending, on 19 October 2000,
respondents board chairperson and concurrent President/CEO Rogelio L.
Singson ordered the reinstatement of petitioner to the latters former
position as head executive assistant, effective 24 October 2000.8
On 28 May 2001, respondent CDCs new President/CEO Emmanuel Y.
Angeles issued a Memorandum, which offered all managers of respondent
corporation an early separation/redundancy program. Those who wished to
avail themselves of the program were to be given the equivalent of their
1.25-month basic salary for every
_______________
7 Id., at pp. 606-607.
8 Id., at p. 739.
641

2012
year of service and leave credits computed on the basis of the same 1.25-
month equivalent of their basic salary.9

In August 2001, respondent CDC offered another retirement plan
granting higher benefits to the managerial employees. Thus, on 12
September 2001, petitioner filed an application for the early retirement
program, which Angeles approved on 3 December 2001.
Meanwhile, in the proceedings of the NLRC, petitioner received on 12
September 2001 its 30 July 2001 Decision10 on the appeal filed by TimbolRoman and Colayco. It is worthy to note that the said Decision referred to
the reports of reviewer arbiters Cristeta D. Tamayo and Thelma M.
Concepcion, who in turn found that petitioner Salenga was a corporate
officer of CDC. Nevertheless, the First Division of the NLRC upheld LA
Darlucios ruling that petitioner Salenga was indeed a regular employee. It
also found that redundancy, as an authorized cause for dismissal, has not
been sufficiently proven, rendering the dismissal illegal. However, the
NLRC held that the award of exemplary and moral damages were
unsubstantiated. Moreover, it also dropped Colayco as a respondent to the
case, since LA Darlucio had failed to provide any ground on which to
anchor the formers solidary liability.
Petitioner Salenga thereafter moved for a partial reconsideration of the
above-mentioned Decision. He sought the reinstatement of the award of
exemplary and moral damages. He likewise insisted that the NLRC should
not have entertained the appeal on the following grounds: (1) respondent
CDC did not file an appeal and did not post the required cash or surety
bond; (2) both Timbol-Roman and Colayco were admittedly not real
parties-in-interest; (3) they were not the employer or the employers
authorized representative and, thus, had no right to appeal; and (4) both
appeals had not been perfected for failure to post the required cash or
surety bond. In other words, petitioners theory revolved on the fact that
neither Timbol-Roman nor Colayco was authorized to represent the
corporation, so the corpora_______________
9 Id., at p. 743.
10 Penned by Commissioner Vicente S.E. Veloso, with Commissioners Roy V. Seeres and Alberto R.
Quimpo concurring; id., at pp. 810-830.
642
64
2
SUPREME COURT
REPORTS ANNOTATED
tion itself did not appeal LA Darlucios Decision. As a result, that Decision
should be considered as final and executory.

For its part, the OGCC also filed a Motion for Reconsideration 11 of the
NLRCs 30 July 2001 Decision insofar as the finding of illegal dismissal
was concerned. It no longer questioned the commissions finding
that petitioner was a regular employee, but instead insisted that he

had been dismissed as a consequence of his redundant position. The
motion, however, was not verified by the duly authorized representative of

respondent CDC.
On 5 December 2002, the NLRC denied petitioner Salengas Motion for
Partial Reconsideration and dismissed the Complaint. The dispositive
portion of the Resolution12 reads as follows:
WHEREFORE, complainants partial motion for reconsideration is denied. As
recommended by Reviewer Arbiters Cristeta D. Tamayo in her August 2, 2000
report and Thelma M. Concepcion in her November 25, 2002 report, the decision of
Labor Arbiter Florentino R. Darlucio dated 29 February 2000 is set aside.
The complaint below is dismissed for being without merit.
SO ORDERED.
13
Meanwhile, pending the Motions for Reconsideration of the NLRCs 30

July 2001 Decision, another issue arose with regard to the computation of
the retirement benefits of petitioner. Respondent CDC did not immediately
give his requested retirement benefits, pending clarification of the
computation of these benefits. He claimed that the computation of his
retirement benefits should also include the forty (40) years he had been in
government service in accordance with Republic Act No. (R.A.) 8291, or the
GSIS Act, and should not be limited to the length of his employment with
respondent corporation only, as the latter insisted.
_______________
11 Id., at pp. 1142-1146.
12 Id., at pp. 862-875.
13 Id., at p. 874.
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2012
In a letter dated 14 March 2003, petitioner Salengas counsel wrote to
the board of directors of respondent to follow up the payment of the

retirement benefits allegedly due to petitioner.14
Pursuant to the NLRCs dismissal of the Complaint of petitioner
Salenga, Angeles subsequently denied the formers request for his
retirement benefits, to wit:15
Please be informed that we cannot favorably grant your clients claim for
retirement benefits considering that Clark Development Corporations dismissal of
Mr. Antonio B. Salenga had been upheld by the National Labor Relations
Commission through a Resolution dated December 5, 2002...
x x xx x xx x x
As it is, the said Resolution dismissed the Complaint filed by Mr. Salenga for
being without merit. Consequently, he is not entitled to receive any retirement pay
from the corporation.
Meanwhile, petitioner Salenga filed a second Motion for Reconsideration

of the 5 December 2002 Resolution of the NLRC, reiterating his claim that
it should not have entertained the imperfect appeal, absent a proper
verification and certification against forum-shopping from the duly
authorized representative of respondent CDC. Without that authority,
neither could the OGCC act on behalf of the corporation.
The OGCC, meanwhile, resurrected its old defense that the NLRC had
no jurisdiction over the case, because petitioner Salenga was a corporate
officer.
The parties underwent several hearings before the NLRC First Division.
During these times, petitioner Salenga demanded from the OGCC to
present a board resolution authorizing it or any other person to represent
the corporation in the proceedings. This, the OGCC failed to do.
After giving due course to the Motion for Reconsideration filed by
petitioner Salenga, the NLRC issued a Resolution16on 10 September
_______________
14 Id., at pp. 955-959.
15 Id., at p. 961.
644
64
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SUPREME COURT
REPORTS ANNOTATED
2003, partially granting the motion. This time, the First Division of the
NLRC held that, absent a board resolution authorizing Timbol-Roman to

file the appeal on behalf of respondent CDC, the appeal was not perfected
and was thus a mere scrap of paper. In other words, the NLRC had no
jurisdiction over the appeal filed before it.
The NLRC further held that respondent CDC had failed to show that
petitioner Salengas dismissal was pursuant to a valid corporate
reorganization or board resolution. It also deemed respondent estopped
from claiming that there was indeed a redundancy, considering that
petitioner Salenga had been reinstated to his position as head executive
assistant. While it granted the award of moral damages, it nevertheless
denied exemplary damages. Thus, the dispositive portion of its Decision
reads:
WHEREFORE,
premises
considered,
the
complainants
Motion
for
Reconsideration is GRANTED and We set aside our Resolution of December 5, 2002.

The Decision of the Labor Arbiter dated February 29, 2000 is REINSTATED with
the MODIFICATION that:
Being a nominal party, respondent Rufo Colayco is declared to be not jointly and
severally liable with respondent Clark Development Corporation;1.)
Respondent Clark Development Corporation is ordered to pay the complainant
his full backwages and other monetary claims to which he is entitled under
the decision of the Labor Arbiter;2.)
Respondent CDC is likewise ordered to pay the complainant moral and
exemplary damages as provided under the Labor Arbiters Decision; and3.)
All other money claims are DENIED for lack of merit.4.)
In the meantime, respondent CDC is ordered to pay the complainant his
retirement benefits without further delay.
SO ORDERED.17
_______________
16 Penned by Commissioner Roy V. Seeres, with Commissioners Romeo L. Go and Victoriano R.
Calaycay concurring, id., at pp. 1162-1174.
17 Id., at pp. 1173-1174.
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2012
On
3
October
2003,
the
OGCC
filed
a
Motion
for
Reconsideration18 despite the absence of a verification and the certification
against forum shopping.
On 21 January 2004, the motion was denied by the NLRC for lack of
merit.19
On 5 February 2004, the executive clerk of the NLRC First Division
entered the judgment on the foregoing case. Thereafter, on 9 February
2004, the NLRC forwarded the entire records of the case to the NLRC-RAB
III Office in San Fernando, Pampanga for appropriate action.
On 4 March 2004, petitioner Salenga filed a Motion for Issuance of Writ
of Execution before the NLRC-RAB III, Office of LA Henry D. Isorena. The
OGCC opposed the motion on the ground that it had filed with the CA a
Petition forCertiorari seeking the reversal of the NLRC Decision dated 30
July 2001 and the Resolutions dated 10 September 2003 and 21 January
2004, respectively. It is noteworthy that, again, there was no board
resolution attached to the Petition authorizing its filing.
Despite the pending Petition with the CA, LA Isorena issued a Writ of
Execution enforcing the 10 September 2003 Resolution of the NLRC. On 1
April 2004, the LA issued an Order 20 to the manager of the Philippine
National Bank, Clark Branch, Angeles City, Pampanga, to immediately
release in the name of NLRC-RAB III the amount of P3,222,400
representing partial satisfaction of the judgment award, including the
execution fee of P31,720.
Respondent CDC filed with the CA in February 2004 a Petition
for Certiorariwith a prayer for the issuance of a temporary restraining
order and/or a writ of preliminary injunction. However, the Petition still
lacked a board resolution from the board of directors of respondent
corporation authorizing its then President Angeles to verify and certify the
Petition on behalf of the board. It was only on 16 March
_______________
18 Id., at pp. 1176-1209.
19 Id., at p. 1212.
20 Id., at p. 1467.
646
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SUPREME COURT
REPORTS ANNOTATED
2004 that counsel for respondent filed a Manifestation/Motion 21 with an
attached Secretarys Certificate containing the boards Resolution No. 86,

Series of 2001. The Resolution authorized Angeles to represent respondent
corporation in prosecuting, maintaining, or compromising any lawsuit in
connection with its business.
Meanwhile, in the proceedings before LA Isorena, both respondent
CDCs legal department and the OGCC on 6 April 2004 filed their
respective Motions to Quash Writ of Execution. 22They both cited the failure
to afford to respondent due process in the issuance of the writ. They
claimed that the pre-conference hearing on the execution of the judgment
had not pushed through. They also reiterated that the Petition
forCertiorari dated 11 February 2004 was still pending with the CA.
Both motions were denied by LA Isorena for lack of factual and legal
bases.
On 6 May 2004, respondent filed with LA Isorena another Motion to
Quash Writ of Execution, again reiterating the pending Petition with the
CA.
This active exchange of pleadings and motions and the delay in the
payment of his money claims eventually led petitioner Salenga to file an
Omnibus Motion23 before LA Isorena. In his motion, he recomputed the
amount due him representing back wages, other benefits or allowances,
legal interests and attorneys fees. He also prayed for the computation of
his retirement benefits plus interests in accordance with R.A. 8291 24 and
R.A. 1616.25He insisted that since respondent CDC was a governmentowned and -controlled corporation (GOCC), his previous government
service totalling 40 years must also be credited in the computation of his
retirement pay. Thus, he demanded the
_______________
21 Id., at pp. 1458-1461.
22 Id., at p. 1472.
23 Id., at pp. 1504-1530.
24 Philippine Government Service Insurance System Act of 1997.
25 Amending Commonwealth Act No. 186, or the Government Service Insurance Act.
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2012
payment of the total amount of P23,920,772.30, broken down as follows:
From the illegal dismissal suit:

(In
Recomputed
award
Legal interest
Attorneys fees
Litigation expenses
250,000d.
Retirement
Retirement
gratuity
Unused
vacation
and
sick
leave
Legal
interest
Attorneys fees
1,147,781.90d.
Philippine peso)A.
3,758,786a.
5,089,342.58b.
1,196,052.80c.
payB.
6,987,944a.
1,440,328b.
4,050,544.96c.
On 11 May 2004, the CA issued a Resolution 26ordering petitioner

Salenga to comment on the Petition and holding in abeyance the issuance
of a temporary restraining order.
The parties thereafter filed their respective pleadings.
On 19 July 2004, the CA temporarily restrained the NLRC from
enforcing the Decision dated 29 February 2000 for a period of 60
days.27After the lapse of the 60 days, LA Isorena issued a Notice of
Hearing/Conference scheduled for 1 October 2004 on petitioners Omnibus
Motion dated 7 May 2004.
Meanwhile, on 24 September 2004, the CA issued another
Resolution,28this time denying the application for the issuance of a writ of
preliminary injunction, after finding that the requisites for the issuance of
the writ had not been met.
Respondent CDC subsequently filed a Supplemental Petition 29 with the
CA, challenging the computation petitioner Salenga made in his Omnibus
Motion filed with the NLRC. Respondent alleged that the examiner had
erred in including the other years of government ser_______________
26 Rollo, p. 1498.
27 Id., at pp. 1931-1932.
28 Id., at pp. 1975-1976.
29 Id., at pp. 1983-1991.
648
64
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SUPREME COURT
REPORTS ANNOTATED
vice in the computation of retirement benefits. It claimed that, since
respondent corporation was created under the Corporation Code,

petitioner Salenga was not covered by civil service laws. Hence, his
retirement benefits should only be limited to the number of years he had
been employed by respondent.
Subsequently, respondent CDC filed an Omnibus Motion 30 to admit the
Supplemental Petition and to reconsider the CAs Resolution denying the
issuance of a writ of preliminary injunction. In the motion, respondent
alleged that petitioner Salenga had been more than sufficiently paid the
amounts allegedly due him, including the award made by LA Darlucio. On
12 March 2002, respondent CDC had issued a check amounting to
P852,916.29, representing petitioners retirement pay and terminal pay.
Meanwhile, on 2 April 2004, P3,254,120 representing the initial award was
debited from the account of respondent CDC.
On 7 February 2005, respondent CDC filed a Motion 31 once again asking
the CA to issue a writ of preliminary injunction in the light of a scheduled
14 February 2005 conference called by LA Mariano Bactin, who had taken
over the case from LA Isorena.
At the 14 February 2005 hearing, the parties failed to reach an amicable
settlement and were thus required to submit their relevant pleadings and
documents in support of their respective cases.
On 16 February 2005, the CA issued a Resolution32admitting the

Supplemental Petition filed by respondent, but denying the prayer for the
issuance of an injunctive writ.
Thereafter, on 8 March 2005, LA Bactin issued an Order33 resolving the
Omnibus Motion filed by petitioner Salenga for the recomputation of the
monetary claims due him. In the Order, LA Bactin denied petitioners
Motion for the recomputation of the award of back wages, benefits,
allowances and privileges based on the 29 February 2000 Decision of LA
Darlucio. LA Bactin held that since the Decision
_______________
30 Id., at pp. 1978-1982.
31 Id., at pp. 2154-2155.
32 Id., at pp. 2206-2207.
33 Id., at pp. 2240-2257.
649

2012
had become final and executory, he no longer had jurisdiction to amend or
to alter the judgment.

Anent the second issue of the computation of retirement benefits, LA
Bactin also denied the claim of petitioner Salenga, considering that the
latters retirement benefits had already been paid. The LA, however, did
not rule on whether petitioner was entitled to retirement benefits, either
under the Government Service Insurance System (GSIS) or under the
Social Security System (SSS), and held that this issue was beyond the
expertise and jurisdiction of a LA.
Petitioner Salenga thereafter appealed to the NLRC, which granted the
appeal in a Resolution34dated 22 July 2005. First, it was asked to resolve
the issue of the propriety of having the Laguesma Law Office represent
respondent CDC in the proceedings before the LA. The said law firm
entered its appearance as counsel for respondent during the pre-execution
conference/hearing on 1 October 2004. On this issue, the NLRC held that
respondent corporations legal department, which had previously been
representing the corporation, was not validly substituted by the Laguesma

Law Office. In addition, the NLRC held that respondent had failed to
comply with Memorandum Circular No. 9, Series of 1998, which strictly
prohibits the hiring of lawyers of private law firms by GOCCs without the
prior written conformity and acquiescence of the Office of Solicitor
General, as the case may be, and the prior written concurrence of the
Commission on Audit (COA). Thus, the NLRC held that all actions and
submissions undertaken by the Laguesma Law Office on behalf of
respondent were null and void.
The second issue raised before the NLRC was whether LA Bactin acted
without jurisdiction in annulling and setting aside the formers final and
executory judgment contained in its 10 September 2003 Resolution,
wherein it held that the appeal had not been perfected, absent the
necessary board resolution allowing or authorizing Timbol-Roman and
Atty. Mallari to file the appeal. On this issue, the NLRC stated:
_______________
34 Id., at pp. 2260-2275.
650
65
0
SUPREME COURT
REPORTS ANNOTATED
The final and executory judgment in this case is clearly indicated in the
dispositive portion of Our Resolution promulgated on September 10, 2003
GRANTING complainants motion for reconsideration, SETTING ASIDE Our
Resolution of December 5, 2002, and REINSTATING the Decision of the Labor
Arbiter dated February 29, 2000 with the following modification[s]: (1) declaring
respondent Rufo Colayco not jointly and severally liable with respondent Clark
Development Corporation; (2) ordering respondent CDC to pay the complainant his
full backwages and other monetary claims to which he is entitled under the decision
of the Labor Arbiter; (3) ordering respondent CDC to pay complainant moral and
exemplary damages as provided under the Labor Arbiters Decision; and (4)
ordering respondent CDC to pay the complainant his retirement benefits without
further delay. This was entered in the Book of Entry of Judgment as final and
executory effective as of February 2, 2004.
Implementing this final and executory judgment, Arbiter Isorena issued an

Order dated May 24, 2004, DENYING respondents Motion to Quash the Writ of
Execution dated March 22, 2004, correctly stating thusly:
Let it be stressed that once a decision has become final and executory, it
becomes the ministerial duty of this Office to issue the corresponding writ of
execution. The rationale behind it is based on the fact that the winning party
has suffered enough and it is the time for him to enjoy the fruits of his labor
with dispatch. The very purpose of the pre-execution conference is to explore
the possibility for the parties to arrive at an amicable settlement to satisfy
the judgment award speedily, not to delay or prolong its implementation.
Thus, when Arbiter Bactin, who took over from Arbiter Isorena upon the latters
filing for leave of absence due to poor health in January 2005, issued the appealed
Order nullifying, instead of implementing, the final and executory judgment of this
Commission, the labor arbiter a quo acted WITHOUT JURISDICTION.
xxxxxx xxx
WHEREFORE, premises considered, the appeal of herein complainant is hereby
35
GRANTED, and We declare NULL AND VOID the appealed Order of March 8, 2005
and SET ASIDE said Order; We direct the immediate issuance of the corresponding
Alias Writ of Execution to enforce the final and executory judgment of this
Commission as contained in Our September 10, 2003 Resolution.
_______________
35 Id., at pp. 2264-2265.
651

2012
SO ORDERED.
36
Unwilling to accept the above Resolution of the NLRC, the Laguesma

Law Office filed a Motion for Reconsideration dated 29 August 2005 with
the NLRC. Again, the motion lacked proper verification and certification
against non-forum shopping.
In the meantime, the OGCC also filed with the CA a Motion for the
Issuance of a Writ of Preliminary Injunction dated 30 August
200537 against the NLRCs 22 July 2005 Resolution. The OGCC alleged
that the issues in the Resolution addressed monetary claims that were
raised by petitioner Salenga only in his Omnibus Motion dated 7 May 2004
or after the issuance of the 10 September 2003 Decision of LA Darlucio.

Thus, the OGCC insisted that the NLRC had no jurisdiction over the issue,
for the matter was still pending with the CA.
The OGCC likewise filed another Motion for Reconsideration 38 dated 31
August 2005 with the NLRC. The OGCC maintained that it was only
acting in a collaborative manner with the legal department of respondent
CDC, for which the former remained the lead counsel. The OGCC
reiterated that, as the statutory counsel of GOCCs, it did not need
authorization from them to maintain a case, and thus, LA Bactin had
jurisdiction over that case. Finally, it insisted that petitioner Salenga was
not covered by civil service laws on retirement, the CDC having been
created under the Corporation Code.
On 13 September 2005, the CA promulgated the assailed Decision.
Relying heavily on the reports of Reviewer Arbiters Cristeta D. Tamayo
and Thelma M. Concepcion, it held that petitioner Salenga was a corporate
officer. Thus, the issue before the NLRC was an intra-corporate dispute,
which should have been lodged with the Securities and Exchange
Commission (SEC), which had jurisdiction over the case at the time the
issue arose. The CA likewise held that the NLRC committed grave abuse of
discretion when it allowed and granted
_______________
36 Id., at p. 2274.
37 Id., at pp. 2277-2281
38 Id., at pp. 2299-2318.
652
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SUPREME COURT
REPORTS ANNOTATED
petitioner Salengas second Motion for Reconsideration, which was a
prohibited pleading.
Petitioner subsequently filed a Motion for Reconsideration on 7 October
2005, alleging that the CA committed grave abuse of discretion in
reconsidering the findings of fact, which had already been found to be
conclusive against respondent; and in taking cognizance of the latters

Petition which had not been properly verified.
The CA, finding no merit in petitioners allegations, denied the motion
in its 17 August 2006 Resolution.
On 4 September 2006, petitioner Salenga filed a Motion for Extension of
Time to File a Petition for Review on Certiorari under Rule 45, praying for
an extension of fifteen (15) days within which to file the Petition. The
motion was granted through this Courts Resolution dated 13 September
2006. The case was docketed as G.R. No. 174159.
On
25
September
2006,
however,
petitioner
filed
a
Manifestation39 withdrawing the motion. He manifested before us that he
would instead file a Petition forCertiorari under Rule 65, which was
eventually docketed as G.R. No. 174941. On 7 July 2008, this Court,
through a Resolution, considered the Petition for Review in G.R. No.
174159 closed and terminated.
Petitioner raises the following issues for our resolution:
I.
The Court of Appeals acted without jurisdiction in reviving and re-litigating the
factual issues and matters of petitioners illegal dismissal and retirement benefits.
II.
The Court of Appeals had no jurisdiction to entertain the original Petition as a
remedy for an appeal that had actually not been filed, absent a board resolution
allowing the appeal.
_______________
39 Id., at pp. 30-35.
653

2012
III.
The Court of Appeals acted with grave abuse of discretion when it did the following:
It failed to dismiss the original and supplemental Petitions despite the lack of a
board resolution authorizing the filing thereof.a.
It failed to dismiss the Petitions despite the absence of a proper verification and
certification against non-forum shopping.b.
It failed to dismiss the Petitions despite respondents failure to inform it of the

pending proceedings before the NLRC involving the same issues.c.
It failed to dismiss the Petitions on the ground of forum shopping.d.
It did not dismiss the Petition when respondent failed to attach to it certified
true copies of the assailed NLRC 30 July 2001 Decision; 10 September 2003
Resolution; 21 January 2004 Resolution; copies of material portions of the
record as are referred to therein; and copies of pleadings and documents
relevant and pertinent thereto.e.
It did not act on respondents failure to serve on the Office of the Solicitor
General a copy of the pleadings, motions and manifestations the latter had
filed before the Court of Appeals, as well as copies of pertinent court
resolutions and decisions, despite the NLRC being a party to the present
case.f.
It disregarded the findings of fact and conclusions of law arrived at by LA
Darlucio, subjecting them to a second analysis and evaluation and
supplanting them with its own findings.g.
It granted the Petition despite respondents failure to show that the NLRC
committed grave abuse of discretion in rendering the latters 30 July 2001
Decision, 10 September 2003 Resolution and 21 January 2004 Resolution.h.
It dismissed the complaint for illegal dismissal and ordered the restitution of the
P3,222,400 already awarded to petitioner, plus interest thereon.i.
In its defense, private respondent insists that the present Petition

forCertiorari under Rule 65 is an improper remedy to question the
Decision of the CA, and thus, the case should be dismissed outright.
Nevertheless, it reiterates that private petitioner was a corporate
654
65
4
SUPREME COURT
REPORTS ANNOTATED
officer whose employment was dependent on board action. As such, private
petitioners employment was an intra-corporate controversy cognizable by

the SEC, not the NLRC. Private respondent also asserts that it has
persistently sought the reversal of LA Darlucios Decision by referring to
the letters sent to the OGCC, as well as Verification and Certificate
against forum-shopping. However, these documents were signed only
during Angeles time as private respondents president/CEO, and not of the

former presidents. Moreover, private respondent contends that private
petitioner is not covered by civil service laws, thus, his years in
government service are not creditable for the purpose of determining the
total amount of retirement benefits due him. In relation to this, private
respondent enumerates the amounts already paid to private petitioner.
The Courts Ruling
The Petition has merit.
This Court deigns it proper to collapse the issues in this Petition to
simplify the matters raised in what appears to be a convoluted case. First,
we need to determine whether the NLRC and the CA committed grave
abuse of discretion amounting to lack or excess of jurisdiction, when they
entertained respondents so-called appeal of the 29 February 2000
Decision rendered by LA Darlucio.
Second, because of the turn of events, a second issuethe computation
of retirement benefitscropped up while the first case for illegal dismissal
was still pending. Although the second issue may be considered as
separate and distinct from the illegal dismissal case, the issue of the
proper computation of the retirement benefits was nevertheless considered
by the relevant administrative bodies, adding more confusion to what
should have been a simple case to begin with.
The
NLRC
had
no
jurisdiction
to
entertain
the
appeal
filed
byTimbol-Roman
and
former CDC CEO Colayco.

To recall, on 29 February 2000, LA Darlucio rendered a Decision in
favor of petitioner, stating as follows:655
2012
xxx Complainant cannot be considered as a corporate officer because at the time
of his termination, he was holding the position of Head Executive Assistant which is
categorized as a Job Level 12 position that is not subject to the election or
appointment by the Board of Directors. The approval of Board Resolution Nos. 200
and 214 by the Board of Directors in its meeting held on February 11, 1998 and
March 25, 1998 clearly refers to the New CDC Salary Structure where the pay
adjustment was based and not to complainants relief as Vice-President, Joint
Ventures and Special Projects. While it is true that his previous positions are
classified as Job Level 13 which are subject to board confirmation, the status of his
appointment was permanent in nature. In fact, he had undergone a six-month
probationary period before having acquired the permanency of his appointment.
However, due to the refusal of the board under then Chairman Victorino Basco to
confirm his appointment, he was demoted to the position of Head Executive
Assistant. Thus, complainant correctly postulated that he was not elected to his
position and his tenure is not dependent upon the whim of the board xxx
xxxxxx xxx
Anent the second issue, this Office finds and so holds that respondents have
miserably failed to show or establish the valid cause in terminating the services of
complainant.
xxxxxx xxx
In the case at bar, respondents failed to adduce any evidence showing that the
position of Head Executive Assistant is superfluous. In fact, they never disputed the
argument advanced by complainant that the position of Head Executive Assistant
was classified as a regular position in the Position Classification Study which is an
essential component of the Organizational Study that had been approved by the
CDC board of directors in 1995 and still remains intact as of the end of 1998.
Likewise, studies made since 1994 by various management consultancy groups have
determined the need for the said position in the Office of the President/CEO in
relation to the vision, mission, plans, programs and overall corporate goals and
objectives of respondent CDC. There is no evidence on record to show that the
position of Head Executive Assistant was abolished by the Board of Directors in its
meeting held in the morning of September 22, 1998. The minutes of the meeting of
the board on said date, as well as its other three meetings held in the month of
September 1998 (Annexes B, C, D and E, Complainants Reply), clearly reveal
that no abolition or reorganization plan was discussed by the board. Hence, the
ground of redundancy is merely a device made by respondent Colayco in order to
ease out the complainant from the respondent corporation.656
65
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SUPREME COURT
REPORTS ANNOTATED
Moreover, the other ground for complainants dismissal is unclear and unknown
to him as respondent did not specify nor inform the complainant of the alleged
recent developments xxx
This Office is also of the view that complainant was not accorded his right to due
process prior to his termination. The law requires that the employer must furnish
the worker sought to be dismissed with two (2) written notices before termination
may be validly effected: first, a notice apprising the employee of the particular acts
or omissions for which his dismissal is sought and, second, a subsequent notice
informing the employee of the decision to dismiss him. In the case at bar,
complainant was not apprised of the grounds of his termination. He was not given
the opportunity to be heard and defend himself xxx
40
The OGCC, representing respondent CDC and former CEO Colayco

separately appealed from the above Decision. Both alleged that they had
filed the proper bond to cover the award granted by LA Darlucio.
It is clear from the NLRC Rules of Procedure that appeals must be
verified and certified against forum-shopping by the parties-in-interest
themselves. In the case at bar, the parties-in-interest are petitioner
Salenga, as the employee, and respondent Clark Development Corporation
as the employer.
A corporation can only exercise its powers and transact its business
through its board of directors and through its officers and agents when
authorized by a board resolution or its bylaws. The power of a corporation
to sue and be sued is exercised by the board of directors. The physical acts
of the corporation, like the signing of documents, can be performed only by
natural persons duly authorized for the purpose by corporate bylaws or by
a specific act of the board. The purpose of verification is to secure an
assurance that the allegations in the pleading are true and correct and
have been filed in good faith.41
_______________
40 Id., at pp. 593-598.
41 Firme v. Bukal Enterprises and Development Corp., 460 Phil. 321; 414 SCRA 190 (2003).
657

2012
Thus, we agree with petitioner that, absent the requisite board

resolution, neither Timbol-Roman nor Atty. Mallari, who signed the
Memorandum of Appeal and Joint Affidavit of Declaration allegedly on
behalf of respondent corporation, may be considered as the appellant and
employer referred to by Rule VI, Sections 4 to 6 of the NLRC Rules of
Procedure, which state:
REQUISITES FOR PERFECTION OF APPEAL.(a) The Appeal shall be filed

within the reglementary period as provided in Section 1 of this Rule;
4.SECTION shall be verified by appellant himself in accordance with
Section 4, Rule 7 of the Rules of Court, with proof of payment of the required
appeal fee and the posting of a cash or surety bond as provided in Section 6 of this
Rule; shall be accompanied by memorandum of appeal in three (3) legibly
typewritten copies which shall state the grounds relied upon and the arguments in
support thereof; the relief prayed for; and a statement of the date when the
appellant received the appealed decision, resolution or order and a certificate of
non-forum shopping with proof of service on the other party of such appeal. A mere
notice of appeal without complying with the other requisites aforestated shall not
stop the running of the period for perfecting an appeal.
The appellee may file with the Regional Arbitration Branch or Regional Office
where the appeal was filed, his answer or reply to appellants memorandum of
appeal, not later than ten (10) calendar days from receipt thereof. Failure on the
part of the appellee who was properly furnished with a copy of the appeal to file his
answer or reply within the said period may be construed as a waiver on his part to
file the same.(b)
Subject to the provisions of Article 218, once the appeal is perfected in
accordance with these Rules, the Commission shall limit itself to reviewing and
deciding specific issues that were elevated on appeal.(c)
APPEAL FEE.5. SECTIONThe appellant shall pay an appeal fee of one
hundred fifty pesos (P150.00) to the Regional Arbitration Branch or Regional Office,
and the official receipt of such payment shall be attached to the records of the case.
BOND.In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award,6.SECTION an appeal by the employer may be
perfected only upon the posting of a cash or surety bond. The appeal bond
shall either be in cash or surety in an amount equivalent to the monetary award,
exclusive of damages and attorneys fees.658
65
8
SUPREME COURT
REPORTS ANNOTATED
In case of surety bond, the same shall be issued by a reputable bonding company
duly accredited by the Commission or the Supreme Court, and shall be accompanied
by:
a joint declaration under oath by the employer, his counsel, and the
bonding company, attesting that the bond posted is genuine, and shall be in
effect until final disposition of the case.(a)
a copy of the indemnity agreement between the employer-appellant and
bonding company; and(b)
a copy of security deposit or collateral securing the bond.(c)
A certified true copy of the bond shall be furnished by the appellant to the
appellee who shall verify the regularity and genuineness thereof and immediately
report to the Commission any irregularity.
Upon verification by the Commission that the bond is irregular or not genuine,
the Commission shall cause the immediate dismissal of the appeal.
No motion to reduce bond shall be entertained except on meritorious grounds and
upon the posting of a bond in a reasonable amount in relation to the monetary
award.
The filing of the motion to reduce bond without compliance with the requisites in
the preceding paragraph shall not stop the running of the period to perfect an
appeal. (Emphasis supplied)
The OGCC failed to produce any valid authorization from the board of
directors despite petitioner Salengas repeated demands. It had been given
more than enough opportunity and time to produce the appropriate board
resolution, and yet it failed to do so. In fact, many of its pleadings,
representations, and submissions lacked board authorization.
We cannot agree with the OGCCs attempt to downplay this procedural
flaw by claiming that, as the statutorily assigned counsel for GOCCs, it
does not need such authorization. InConstantino-David v. PangandamanGania,42 we exhaustively explained why it was necessary for government
agencies or instrumentalities to execute the verification and the
certification against forum-shopping through their duly authorized
representatives. We ruled thereon as follows:
_______________
42 456 Phil. 273, 294-298; 409 SCRA 80, 93-97 (2003).
659

2012
But the rule is different where the OSG is acting as counsel of record for a
government agency. For in such a case it becomes necessary to determine
whether the petitioning government body has authorized the filing of the
petition and is espousing the same stand propounded by the OSG. Verily, it
is not improbable for government agencies to adopt a stand different from
the position of the OSG since they weigh not just legal considerations but
policy repercussions as well. They have their respective mandates for
which they are to be held accountable, and the prerogative to determine
whether further resort to a higher court is desirable and indispensable

under the circumstances.
The verification of a pleading, if signed by the proper officials of the
client agency itself, would fittingly serve the purpose of attesting that the
allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in

good faith. Of course, the OSG may opt to file its own petition as a Peoples
Tribune but the representation would not be for a client office but for its own
perceived best interest of the State.
The case of Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc., is
not also a precedent that may be invoked at all times to allow the OSG to sign the
certificate of non-forum shopping in place of the real party-in-interest. The ruling
therein mentions merely that the certification of non-forum shopping executed by
the OSG constitutes substantial compliance with the rule since the OSG is the only
lawyer for the petitioner, which is a government agency mandated under Section 35,
Chapter 12, Title III, Book IV, of the 1987 Administrative Code (Reiterated under
Memorandum Circular No. 152 dated May 17, 1992) to be represented only by the
Solicitor General.
By its very nature, substantial compliance is actually inadequate observance of
the requirements of a rule or regulation which are waived under equitable
circumstances to facilitate the administration of justice there being no damage or
injury caused by such flawed compliance. This concept is expressed in the statement
the rigidity of a previous doctrine was thus subjected to an inroad under the
concept of substantial compliance. In every inquiry on whether to accept
substantial compliance, the focus is always on the presence of equitable conditions
to administer justice effectively and efficiently without damage or injury to the spirit
of the legal obligation.
xxx xxx xxx
The fact that the OSG under the 1987 Administrative Code is the only
lawyer for a government agency wanting to file a petition,
660
66
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SUPREME COURT
REPORTS ANNOTATED
or complaint for that matter, does not operate per se to vest the OSG with
the authority to execute in its name the certificate of non-forum shopping
for a client office. For, in many instances, client agencies of the OSG have
legal departments which at times inadvertently take legal matters
requiring court representation into their own hands without the

intervention of the OSG. Consequently, the OSG would have no personal
knowledge of the history of a particular case so as to adequately execute

the certificate of non-forum shopping; and even if the OSG does have the
relevant information, the courts on the other hand would have no way of
ascertaining the accuracy of the OSGs assertion without precise

references in the record of the case. Thus, unless equitable circumstances
which are manifest from the record of a case prevail, it becomes necessary
for the concerned government agency or its authorized representatives to
certify for non-forum shopping if only to be sure that no other similar case
or incident is pending before any other court.
We recognize the occasions when the OSG has difficulty in securing the attention
and signatures of officials in charge of government offices for the verification and
certificate of non-forum shopping of an initiatory pleading. This predicament is
especially true where the period for filing such pleading is non-extendible or can no
longer be further extended for reasons of public interest such as in applications for
the writ ofhabeas corpus, in election cases or where sensitive issues are involved.
This quandary is more pronounced where public officials have stations outside
Metro Manila.
But this difficult fact of life within the OSG, equitable as it may seem, does not
excuse it from wantonly executing by itself the verification and certificate of nonforum shopping. If the OSG is compelled by circumstances to verify and certify the
pleading in behalf of a client agency, the OSG should at least endeavor to inform the
courts of its reasons for doing so, beyond instinctivelyciting City Warden of the
Manila City Jail v. Estrella andCommissioner of Internal Revenue v. S.C. Johnson
and Son, Inc.
Henceforth, to be able to verify and certify an initiatory pleading for
non-forum shopping when acting as counsel of record for a client agency,
the OSG must (a) allege under oath the circumstances that make
signatures of the concerned officials impossible to obtain within the period
for filing the initiatory pleading; (b) append to the petition or complaint
such authentic document to prove that the party-petitioner or complainant
authorized the filing of the petition or complaint and understood and

adopted the allegations set forth therein, and an affirmation that no action
or claim involving the
661

2012
same issues has been filed or commenced in any court, tribunal or quasi-
judicial agency; and, (c) undertake to inform the court promptly and
reasonably of any change in the stance of the client agency.
Anent the document that may be annexed to a petition or complaint
under letter (b) hereof, the letter-endorsement of the client agency to the
OSG, or other correspondence to prove that the subject-matter of the

initiatory pleading had been previously discussed between the OSG and its
client, is satisfactory evidence of the facts under letter (b) above. In this
exceptional situation where the OSG signs the verification and certificate
of non-forum shopping, the court reserves the authority to determine the
sufficiency
of
the
OSGs
action
as
measured
by
the
considerations discussed herein. (Emphasis ours, italics provided)
equitable
The ruling cited above may have pertained only to the Office of the
Solicitor Generals representation of government agencies and
instrumentalities, but we see no reason why this doctrine cannot be

applied to the case at bar insofar as the OGCC is concerned.
While in previous decisions we have excused transgressions of these
rules, it has always been in the context of upholding justice and fairness
under exceptional circumstances. In this case, though, respondent failed to
provide any iota of rhyme or reason to compel us to relax these
requirements. Instead, what is clear to us is that the so-called appeal was
done against the instructions of then President/CEO Naguiat not to file an
appeal. Timbol-Roman, who signed the Verification and the Certification
against forum-shopping, was not even an authorized representative of the
corporation. The OGCC was equally remiss in its duty. It ought to have
advised respondent corporation, the proper procedure for pursuing an
appeal. Instead, it maintained the appeal and failed to present any valid
authorization from respondent corporation even after petitioner had
questioned OGCCs authority all throughout the proceedings. Thus, it is
evident that the appeal was made in bad faith.
The unauthorized and overzealous acts of officials of respondent CDC
and the OGCC have led to a waste of the governments time and resources.
More alarmingly, they have contributed to the injustice done to petitioner
Salenga. By taking matters into their own hands,
662
66
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SUPREME COURT
REPORTS ANNOTATED
these officials let the case drag on for years, depriving him of the
enjoyment of property rightfully his. What should have been a simple case
of illegal dismissal became an endless stream of motions and pleadings.
Time and again, we have said that the perfection of an appeal within the
period prescribed by law is jurisdictional, and the lapse of the appeal
period deprives the courts of jurisdiction to alter the final judgment. 43Thus,
there is no other recourse but to respect the findings and ruling of the
labor arbiter. Clearly, therefore, the CA committed grave abuse of
discretion in entertaining the Petition filed before it after the NLRC had
dismissed the case based on lack of jurisdiction. The assailed CA Decision

did not even resolve petitioner Salengas consistent and persistent claim
that the NLRC should not have taken cognizance of the appeal in the first
place, absent a board resolution. Thus, LA Darlucios Decision with respect
to the liability of the corporation still stands.
However, we note from that Decision that Rufo Colayco was made
solidarily liable with respondent corporation. Colayco thereafter filed his
separate appeal. As to him, the NLRC correctly held in its 30 July 2001
Decision that he may not be held solidarily responsible to petitioner. As a
result, it dropped him as respondent. Notably, in the case at bar, petitioner
does not question that ruling.
Based on the foregoing, all other subsequent proceedings regarding the
issue of petitioners dismissal are null and void for having been conducted
without jurisdiction. Thus, it is no longer incumbent upon us to rule on the
other errors assigned in the matter of petitioner Salengas dismissal.
CDC
is
not
under
the
civil
service
laws on retirement.
While the case was still persistently being pursued by the OGCC, a new
issue arose when petitioner Salenga reached retirement age:
_______________
43 Galima v. Court of Appeals, 166 Phil. 1231; 16 SCRA 140 (1977).
663

2012
whether his retirement benefits should be computed according to civil
service laws.
To recall, the issue of how to compute the retirement benefits of
petitioner was raised in his Omnibus Motion dated 7 May 2004 filed before
the NLRC after it had reinstated LA Darlucios original Decision. The
issue was not covered by petitioners Complaint for illegal dismissal, but
was a different issue altogether and should have been properly addressed
in a separate Complaint. We cannot fault petitioner, though, for raising the
issue while the case was still pending with the NLRC. If it were not for the
appeal undertaken by Timbol-Roman and the OGCC through Atty.
Mallari, the issue would have taken its proper course and would have been
raised in a more appropriate time and manner. Thus, we deem it proper to
resolve the matter at hand to put it to rest after a decade of litigation.
Petitioner Salenga contends that respondent CDC is covered by the
GSIS Law. Thus, he says, the computation of his retirement benefits
should include all the years of actual government service, starting from
the original appointment forty (40) years ago up to his retirement.
Respondent CDC owes its existence to Executive Order No. 80 issued by
then President Fidel V. Ramos. It was meant to be the implementing and
operating arm of the Bases Conversion and Development Authority
(BCDA) tasked to manage the Clark Special Economic Zone (CSEZ).
Expressly, respondent was formed in accordance with Philippine
corporation laws and existing rules and regulations promulgated by the
SEC pursuant to Section 16 of Republic Act (R.A.) 7227. 44CDC, a
government-owned or -controlled corporation without an original charter,
was incorporated under the Corporation Code. Pursuant to Article IX-B,
Sec. 2(1), the civil service embraces only those government-owned or
-controlled corporations with original charter. As such, respondent CDC
and its employees are covered by the Labor Code and not by the Civil
Service Law, consistent with our ruling in NASECO v. NLRC,45 in which
we established this distinc_______________
44 E.O. No. 80, Sec. 1.
45 250 Phil. 129; 168 SCRA 122 (1988).
664
66
4
SUPREME COURT
REPORTS ANNOTATED
tion. Thus, in Gamogamo v. PNOC Shipping and Transport Corp.,46 we
held:
Retirement results from a voluntary agreement between the employer and the
employee whereby the latter after reaching a certain age agrees to sever his
employment with the former.
Since the retirement pay solely comes from Respondents funds, it is but natural
that Respondent shall disregard petitioners length of service in another company
for the computation of his retirement benefits.
Petitioner was absorbed by Respondent from LUSTEVECO on 1 August 1979.
Ordinarily, his creditable service shall be reckoned from such date. However, since
Respondent took over the shipping business of LUSTEVECO and agreed to assume
without
interruption
all
the
service
credits
of
petitioner
with
LUSTEVECO, petitioners creditable service must start from 9 November 1977
when he started working with LUSTEVECO until his day of retirement on 1 April
1995. Thus, petitioners creditable service is 17.3333 years.
We cannot uphold petitioners contention that his fourteen years of service with
the DOH should be considered because his last two employers were governmentowned and controlled corporations, and fall under the Civil Service Law. Article
IX(B), Section 2 paragraph 1 of the 1987 Constitution states
The civil service embraces all branches, subdivisions, instrumentalities,
and agencies of the Government, including government-owned or controlled
corporations with original charters.(1)2.Sec.
It is not at all disputed that while Respondent and LUSTEVECO are
government-owned and controlled corporations, they have no original
charters; hence they are not under the Civil Service Law. InPhilippine
National Oil Company-Energy Development Corporation v. National Labor Relations
Commission, we ruled:
xxx Thus under the present state of the law, the test in determining
whether a government-owned or controlled corporation is subject to the Civil
Service Law are [sic] the manner of its creation, such that government
corporations created by special charter(s) are subject to its provisions while
those incorporated under the General Corporation Law are not within its
coverage. (Emphasis supplied)
_______________
46 431 Phil. 510, 521-522; 381 SCRA 742, 750-751 (2002).
665

2012
Hence, petitioner Salenga is entitled to receive only his retirement

benefits based only on the number of years he was employed with the
corporation under the conditions provided under its retirement plan, as
well as other benefits given to him by existing laws.
WHEREFORE, in view of the foregoing, the Petition in G.R. No. 174941
is partially GRANTED. The Decision of LA Darlucio is REINSTATED
insofar as respondent corporations liability is concerned. Considering that
petitioner did not maintain the action against Rufo Colayco, the latter is
not solidarily liable with respondent Clark Development Corporation.
The case is REMANDED to the labor arbiter for the computation of
petitioners retirement benefits in accordance with the Social Security Act
of 1997 otherwise known as Republic Act No. 8282, deducting therefrom
the sums already paid by respondent CDC. If any, the remaining amount
shall be subject to the legal interest of 6% per annumfrom the filing date of
petitioners Omnibus Motion on 11 May 2004 up to the time this judgment
becomes final and executory. Henceforth, the rate of legal interest shall be
12% until the satisfaction of judgment.
SO ORDERED.
Carpio (Chairperson), Brion, Perez and Reyes, JJ., concur.
Petition partially granted.
Note.The period of appeal and the perfection of appeal are not mere
technicalities to be so lightly regarded, for they are essential to the finality

of judgments, a notion underlying the stability of our judicial system; The
short period of five days as the period to appeal recognizes the essentiality
of time in election protests, in order that the will of the electorate is
ascertained as soon as possible so that the winning candidate is not
deprived of the right to assume office, and so that any doubt that can cloud
the incumbency of the truly deserving winning candidate is quickly
removed. (Gomez-Castillo vs. Commission on Elections, 621 SCRA 499
[2010])
o0o
February 1, 2012.G.R. No. 179579.*
COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF

THE
PORT
OF
SUBIC,
petitioners, vs. HYPERMIX
FEEDS
CORPORATION, respondent.
Remedial Law; Civil Procedure; Declaratory Relief; Requirements of an Action for
Declaratory Relief.The requirements of an action for declaratory relief are as follows: (1)
there must be a justiciable controversy; (2) the controversy must be between persons whose
interests are adverse; (3) the party seeking declaratory relief must have a legal interest in
the controversy; and (4) the issue involved must be ripe for judicial determination.
Administrative Law; Right to be Heard; When the administrative rule goes beyond
merely providing for the means that can facilitate or render least cumbersome the
implementation of the law but substantially increases the burden of those governed, it
behooves the agency to accord at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the force and effect of law.
When an administrative rule is merely interpretative in nature, its applicability needs
nothing further than its bare issuance, for it gives no real consequence more than what the
law itself has already prescribed. When, on the other hand, the administrative rule goes
beyond merely providing for the means that can facilitate or render least cumbersome the
implementation of the law but substantially increases the burden of those governed, it
behooves the agency to accord at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the force and effect of law.
Constitutional Law; Bill of Rights; Equal Protection Clause; The equal protection clause
means that no person or class ofpersons shall be deprived of the same protection of laws
enjoyed by other persons or other classes in the same place in like circumstances.Going now
to the content of CMO 27-3003, we likewise hold that it is unconstitutional for being
violative of the equal protection clause of the Constitution. The equal protection clause
means that no person or class of persons shall be deprived of the same protection of laws
enjoyed by other persons or other classes in the same place in like circumstances. Thus, the
guarantee of the equal protection of laws is not violated if
_______________
* SECOND DIVISION.
667
VOL. 664,
6
FEBRUARY 1, 2012
67
Commissioners of Customs
vs. Hypermix Feeds Corporation
there is a reasonable classification. For a classification to be reasonable, it must be

shown that (1) it rests on substantial distinctions; (2) it is germane to the purpose of the
law; (3) it is not limited to existing conditions only; and (4) it applies equally to all members
of the same class.
Administrative Law; Delegation of Powers; Rules and regulations, which are the
product of a delegated power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority granted by the legislature
to the administrative agency.It is well-settled that rules and regulations, which are the
product of a delegated power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority granted by the legislature
to the administrative agency. It is required that the regulation be germane to the objects
and purposes of the law; and that it be not in contradiction to, but in conformity with, the
standards prescribed by law.
PETITION for review on certiorari of the decision and resolution of the

Court of Appeals.
Office of the Solicitor General for petitioners.
Efren L. Cordero for respondent.
SERENO,J.:
Before us is a Petition for Review under Rule 45, 1assailing the
Decision2 and the Resolution3 of the Court of Appeals (CA), which nullified
the Customs Memorandum Order (CMO) No. 27-20034 on the tariff
classification of wheat issued by petitioner Commissioner of Customs.
The antecedent facts are as follows:
On 7 November 2003, petitioner Commissioner of Customs issued CMO
27-2003. Under the Memorandum, for tariff purposes, wheat
_______________
1 Rollo, pp. 124-142.
2 Id., at pp. 33-46.
3 Id., at p. 47.
4 Records, pp. 16-18.
668
668
SUPREME COURT
REPORTS ANNOTATED
Commissioners of Customs vs.
Hypermix Feeds Corporation
was classified according to the following: (1) importer or consignee; (2)

country of origin; and (3) port of discharge. 5 The regulation provided an
exclusive list of corporations, ports of discharge, commodity descriptions
and countries of origin. Depending on these factors, wheat would be
classified either as food grade or feed grade. The corresponding tariff for
food grade wheat was 3%, for feed grade, 7%.
CMO 27-2003 further provided for the proper procedure for protest or
Valuation and Classification Review Committee (VCRC) cases. Under this
procedure, the release of the articles that were the subject of protest
required the importer to post a cash bond to cover the tariff differential. 6
_______________
5 SUBJECT: Tariff Classification of Wheat
In order to monitor more closely wheat importations and thus prevent their misclassification, the
following are hereby prescribed:
For tariff purposes, wheat shall be classified as follows:1.
Under HS 1001.9090 (Food Grade) when all the following elements are present:1.1
the importer/consignee of the imported wheat is a flour miller as per attached list
(Annex A), which shall form as integral part of this Order1.1.1
the wheat importation consists of any of those listed in Annex A according to the
country of origin indicated therein1.1.2
the wheat importation is entered/unloaded in the Port of Discharge indicated opposite
the name of the flour miller, as per Annex A1.1.3
Under HS 1001.9010 (Feed Grade)1.2
When any or all of the elements prescribed under 1.1 above is not present.1.2.1
All other wheat importations by non-flour millers,1.2.2 i.e., importers/consignees
NOT listed in Annex A
6 SUBJECT: Tariff Classification of Wheat
xxxxxx xxx
Any issue arising from this Order shall be resolved in an appropriate protest or VCRC case.2.
In case of a VCRC case, the following applies:3.
669
VOL. 664, FEBRUARY 1,

669
2012
A month after the issuance of CMO 27-2003, on 19 December 2003,

respondent filed a Petition for Declaratory Relief 7 with the Regional Trial
Court (RTC) of Las Pias City. It anticipated the implementation of the
regulation on its imported and perishable Chinese milling wheat in transit
from China.8 Respondent contended that CMO 27-2003 was issued without
following the mandate of the Revised Administrative Code on public
participation, prior notice, and publication or registration with the
University of the Philippines Law Center.
Respondent also alleged that the regulation summarily adjudged it to be
a feed grade supplier without the benefit of prior assessment and
examination; thus, despite having imported food grade wheat, it
_______________
The shipment may qualify for Tentative Release upon payment of the taxes and duties
as per declaration and the posting of cash bond to cover the tariff differential.3.1
The Tentative Release granted by the VCRC shall, prior to the release of the shipment
from Customs custody, be subject to representative. For this purpose, the District/Port
Collector concerned shall forward to the Office of the Commissioner the Tentative Release
papers, together with all pertinent shipping and supporting documents, including, but not
limited to, contract of sale, phytosanitary certificate and certificate of quality. In the case
of Outports, the required documents shall be faxed to the Office of the Commissioner of
Customs to any of these numbers: 527-1953/527-4573.3.2
In resolving the classification issue, the VCRC shall consider the import/consignee,
type/source of wheat and port of discharge of the wheat importation, as indicated in Annex
A, and require the proofs/evidences (3.3sic), including, but not limited to, proofs of sale
or consumption of said wheat importation, certificate of quality issued by manufacturing
country and contract of sale.
Any VCRC decision adverse to the government shall be subject to automatic review by
the Commissioner of Customs.3.4
7 Rollo, pp. 158-168.
8 Records, p. 12.
670
670
SUPREME COURT
REPORTS ANNOTATED
would be subjected to the 7% tariff upon the arrival of the shipment,

forcing them to pay 133% more than was proper.
Furthermore, respondent claimed that the equal protection clause of the
Constitution was violated when the regulation treated non-flour millers
differently from flour millers for no reason at all.
Lastly, respondent asserted that the retroactive application of the
regulation was confiscatory in nature.
On 19 January 2004, the RTC issued a Temporary Restraining Order
(TRO) effective for twenty (20) days from notice.9Petitioners thereafter filed
a Motion to Dismiss.10 They alleged that: (1) the RTC did not have
jurisdiction over the subject matter of the case, because respondent was
asking for a judicial determination of the classification of wheat; (2) an
action for declaratory relief was improper; (3) CMO 27-2003 was an
internal administrative rule and not legislative in nature; and (4) the
claims of respondent were speculative and premature, because the Bureau
of Customs (BOC) had yet to examine respondents products. They likewise
opposed the application for a writ of preliminary injunction on the ground
that they had not inflicted any injury through the issuance of the
regulation; and that the action would be contrary to the rule that
administrative issuances are assumed valid until declared otherwise.
On 28 February 2005, the parties agreed that the matters raised in the
application for preliminary injunction and the Motion to Dismiss would
just be resolved together in the main case. Thus, on 10 March 2005, the
RTC rendered its Decision11 without having to resolve the application for
preliminary injunction and the Motion to Dismiss.
The trial court ruled in favor of respondent, to wit:
WHEREFORE, in view of the foregoing, the Petition is GRANTED and the subject
Customs Memorandum Order 27-2003 is declared INVALID and OF NO FORCE AND
EFFECT. Respondents Commissioner of Customs, the District Collector of Subic or anyone
acting in their behalf are to immedi_______________
9 Rollo, pp. 58-59.
10 Id., at pp. 60-78.
11 Id., at pp. 108-114; penned by Judge Romeo C. De Leon.

671

671
2012
ately cease and desist from enforcing the said Customs Memorandum Order 27-2003.
SO ORDERED.
12
The RTC held that it had jurisdiction over the subject matter, given that
the issue raised by respondent concerned the quasi-legislative powers of
petitioners. It likewise stated that a petition for declaratory relief was the
proper remedy, and that respondent was the proper party to file it. The
court considered that respondent was a regular importer, and that the
latter would be subjected to the application of the regulation in future
transactions.
With regard to the validity of the regulation, the trial court found that
petitioners had not followed the basic requirements of hearing and
publication in the issuance of CMO 27-2003. It likewise held that
petitioners had substituted the quasi-judicial determination of the
commodity by a quasi-legislative predetermination.13 The lower court
pointed out that a classification based on importers and ports of discharge
were violative of the due process rights of respondent.
Dissatisfied with the Decision of the lower court, petitioners appealed to
the CA, raising the same allegations in defense of CMO 27-2003. 14 The
appellate court, however, dismissed the appeal. It held that, since the
regulation affected substantial rights of petitioners and other importers,
petitioners should have observed the requirements of notice, hearing and
publication.
Hence, this Petition.
Petitioners raise the following issues for the consideration of this Court:
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
WHICH IS NOT IN ACCORD WITH THE LAW AND PREVAILING
JURISPRUDENCE.I.
_______________
12 Id., at p. 114.
13 Id., at p. 112.
14 Id., at pp. 117-122.
672
672
SUPREME COURT
REPORTS ANNOTATED
THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE
TRIAL COURT HAS JURISDICTION OVER THE CASE.II.
The Petition has no merit.

We shall first discuss the propriety of an action for declaratory relief.
Rule 63, Section 1 provides:
Who may file petition.Any person interested under a deed, will, contract or other
written instrument, or whose rights are affected by a statute, executive order or regulation,
ordinance, or any other governmental regulation may, before breach or violation thereof,
bring an action in the appropriate Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of his rights or duties, thereunder.
The requirements of an action for declaratory relief are as follows: (1)

there must be a justiciable controversy; (2) the controversy must be
between persons whose interests are adverse; (3) the party seeking
declaratory relief must have a legal interest in the controversy; and (4) the
issue involved must be ripe for judicial determination. 15 We find that the
Petition filed by respondent before the lower court meets these
requirements.
First, the subject of the controversy is the constitutionality of CMO 272003 issued by petitioner Commissioner of Customs. InSmart
Communications v. NTC,16 we held:
The determination of whether a specific rule or set of rules issued by an administrative
agency contravenes the law or the constitution is within the jurisdiction of the regular
courts.Indeed, the Constitution vests the power of judicial review or the power to
declare a law, treaty, international or executive agreement, presidential decree,
order, instruction, ordinance, or regulation in the courts, including the regional
trial courts. This is within the scope of judicial power, which includes the
authority of the courts to determine in an appropriate action the validity of the
acts of the political departments.Judicial
_______________
15 Tolentino v. Board of Accountancy, 90 Phil. 83 (1951).
16 456 Phil. 145; 408 SCRA 678 (2003).
673

673
2012
power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government. (Emphasis supplied)
Meanwhile, in Misamis Oriental Association of Coco Traders, Inc. v.

Department of Finance Secretary,17 we said:
xxx [A] legislative rule is in the nature of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. xxx
In addition such rule must be published. On the other hand, interpretative rules are
designed to provide guidelines to the law which the administrative agency is in charge of
enforcing.
Accordingly, in considering a legislative rule a court is free to make three
inquiries: (i) whether the rule is within the delegated authority of the
administrative agency; (ii) whether it is reasonable; and (iii) whether it was
issued pursuant to proper procedure. But the court is not free to substitute its
judgment as to the desirability or wisdom of the rule for the legislative body, by its
delegation of administrative judgment, has committed those questions to administrative
judgments and not to judicial judgments. In the case of an interpretative rule, the inquiry is
not into the validity but into the correctness or propriety of the rule. As a matter of power a
court, when confronted with an interpretative rule, is free to (i) give the force of law to the
rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some
intermediate degree of authoritative weight to the interpretative rule. (Emphasis supplied)
Second, the controversy is between two parties that have adverse

interests. Petitioners are summarily imposing a tariff rate that respondent
is refusing to pay.
Third, it is clear that respondent has a legal and substantive interest in
the implementation of CMO 27-2003. Respondent has adequately shown
that, as a regular importer of wheat, on 14 August 2003, it has actually
made shipments of wheat from China to Subic. The shipment was set to
arrive in December 2003. Upon its arrival, it
_______________
17 G.R. No. 108524, 10 November 1994, 238 SCRA 63, 69-70.
674
674
SUPREME COURT
REPORTS ANNOTATED
would be subjected to the conditions of CMO 27-2003. The regulation calls
for the imposition of different tariff rates, depending on the factors

enumerated therein. Thus, respondent alleged that it would be made to
pay the 7% tariff applied to feed grade wheat, instead of the 3% tariff on
food grade wheat. In addition, respondent would have to go through the
procedure under CMO 27-2003, which would undoubtedly toll its time and
resources. The lower court correctly pointed out as follows:
xxx As noted above, the fact that petitioner is precisely into the business of importing
wheat,each and every importation will be subjected to constant disputes which
will result into (sic) delays in the delivery, setting aside of funds as cash bond
required in the CMO as well as the resulting expenses thereof. It is easy to see
that business uncertainty will be a constant occurrence for petitioner. That the
sums involved are not minimal is shown by the discussions during the hearings
conducted as well as in the pleadings filed. It may be that the petitioner can later on
get a refund but such has been foreclosed because the Collector of Customs and the
Commissioner of Customs are bound by their own CMO. Petitioner cannot get its refund
with the said agency. We believe and so find that Petitioner has presented such a stake in
the outcome of this controversy as to vest it with standing to file this petition. (Emphasis
18
supplied)
Finally, the issue raised by respondent is ripe for judicial determination,

because litigation is inevitable19 for the simple and uncontroverted reason
that respondent is not included in the enumeration of flour millers
classified as food grade wheat importers. Thus, as the trial court stated, it
would have to file a protest case each time it imports food grade wheat and
be subjected to the 7% tariff.
It is therefore clear that a petition for declaratory relief is the right

remedy given the circumstances of the case.
Considering that the questioned regulation would affect the substantive
rights of respondent as explained above, it therefore follows
_______________
18 Rollo, p. 112.
19 Office of the Ombudsman v. Ibay, 416 Phil. 659; 364 SCRA 281 (2001).
675

675
2012
that petitioners should have applied the pertinent provisions of Book VII,
Chapter 2 of the Revised Administrative Code, to wit:
3.SectionFiling.(1) Every agency shall file with the University of the Philippines
Law Center three (3) certified copies of every rule adopted by it. Rules in force on the date of
effectivity of this Code which are not filed within three (3) months from that date shall not
thereafter be the bases of any sanction against any party of persons.
xxx xxx xxx
9.SectionPublic Participation.(1) If not otherwise required by law, an agency shall,
as far as practicable, publish or circulate notices of proposed rules and afford interested
parties the opportunity to submit their views prior to the adoption of any rule.
In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall
have been published in a newspaper of general circulation at least two (2) weeks before the
first hearing thereon.(2)
In case of opposition, the rules on contested cases shall be observed.(3)
When an administrative rule is merely interpretative in nature, its

applicability needs nothing further than its bare issuance, for it gives no
real consequence more than what the law itself has already prescribed.
When, on the other hand, the administrative rule goes beyond merely
providing for the means that can facilitate or render least cumbersome the
implementation of the law but substantially increases the burden of those
governed, it behooves the agency to accord at least to those directly
affected a chance to be heard, and thereafter to be duly informed, before
that new issuance is given the force and effect of law.20
Likewise, in Taada v. Tuvera,21 we held:

The clear object of the above-quoted provision is to give the general public
adequate notice of the various laws which are to regulate their actions and
conduct as citizens. Without such notice and
_______________
20 Commissioner of Internal Revenue v. Michel J. Lhuiller Pawnshop Inc., 453 Phil. 1043; 406 SCRA 178
(2003).
21 220 Phil. 422; 136 SCRA 27 (1985).
676
676
SUPREME COURT
REPORTS ANNOTATED
publication, there would be no basis for the application of the maxim ignorantia legis non
excusat. It would be the height of injustice to punish or otherwise burden a
citizen for the transgression of a law of which he had no notice whatsoever, not
even a constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the
publication of laws taken so vital significance that at this time when the people have
bestowed upon the President a power heretofore enjoyed solely by the legislature. While the
people are kept abreast by the mass media of the debates and deliberations in theBatasan
Pambansa and for the diligent ones, ready access to the legislative records no such
publicity
accompanies
the
law-making
process
of
the
President.Thus,
without
publication, the people have no means of knowing what presidential decrees have
actually been promulgated, much less a definite way of informing themselves of
the specific contents and texts of such decrees. (Emphasis supplied)
Because petitioners failed to follow the requirements enumerated by the

Revised Administrative Code, the assailed regulation must be struck
down.
Going now to the content of CMO 27-3003, we likewise hold that it is
unconstitutional for being violative of the equal protection clause of the
Constitution.
The equal protection clause means that no person or class of persons
shall be deprived of the same protection of laws enjoyed by other persons or
other classes in the same place in like circumstances. Thus, the guarantee
of the equal protection of laws is not violated if there is a reasonable
classification. For a classification to be reasonable, it must be shown that

(1) it rests on substantial distinctions; (2) it is germane to the purpose of
the law; (3) it is not limited to existing conditions only; and (4) it applies
equally to all members of the same class.22
Unfortunately, CMO 27-2003 does not meet these requirements. We do
not see how the quality of wheat is affected by who imports it, where it is
discharged, or which country it came from.
_______________
22 Philippine Rural Electric Cooperatives Association, Inc. v. The Secretary, Department of Interior and
Local Government, 451 Phil. 683; 403 SCRA 558 (2003).
677

677
2012
Thus, on the one hand, even if other millers excluded from CMO 27-2003
have imported food grade wheat, the product would still be declared as
feed grade wheat, a classification subjecting them to 7% tariff. On the
other hand, even if the importers listed under CMO 27-2003 have imported
feed grade wheat, they would only be made to pay 3% tariff, thus depriving
the state of the taxes due. The regulation, therefore, does not become
disadvantageous to respondent only, but even to the state.
It is also not clear how the regulation intends to monitor more closely
wheat importations and thus prevent their misclassification. A careful
study of CMO 27-2003 shows that it not only fails to achieve this end, but
results in the opposite. The application of the regulation forecloses the
possibility that other corporations that are excluded from the list import
food grade wheat; at the same time, it creates an assumption that those
who meet the criteria do not import feed grade wheat. In the first case,
importers are unnecessarily burdened to prove the classification of their
wheat imports; while in the second, the state carries that burden.
Petitioner Commissioner of Customs also went beyond his powers when
the regulation limited the customs officers duties mandated by Section
1403 of the Tariff and Customs Law, as amended. The law provides:
Section1403.Duties of Customs Officer Tasked to Examine, Classify, and Appraise

Imported Articles.The customs officer tasked to examine, classify, and appraise imported
articles shall determine whether the packages designated for examination and
their contents are in accordance with the declaration in the entry, invoice and
other pertinent documents and shall make return in such a manner as to indicate
whether the articles have been truly and correctly declared in the entry as
regard their quantity, measurement, weight, and tariff classification and not
imported contrary to law. He shall submit samples to the laboratory for analysis when
feasible to do so and when such analysis is necessary for the proper classification, appraisal,
and/or admission into the Philippines of imported articles.
Likewise, the customs officer shall determine the unit of quantity in which they
are usually bought and sold, and appraise the imported articles in accordance
with Section 201 of this Code.678
678
SUPREME COURT
REPORTS ANNOTATED
Failure on the part of the customs officer to comply with his duties shall subject him to
the penalties prescribed under Section 3604 of this Code.
The provision mandates that the customs officer must first assess and
determine the classification of the imported article before tariff may be
imposed. Unfortunately, CMO 23-2007 has already classified the article
even before the customs officer had the chance to examine it. In effect,
petitioner Commissioner of Customs diminished the powers granted by the
Tariff and Customs Code with regard to wheat importation when it no
longer required the customs officers prior examination and assessment of

the proper classification of the wheat.
It is well-settled that rules and regulations, which are the product of a
delegated power to create new and additional legal provisions that have
the effect of law, should be within the scope of the statutory authority
granted by the legislature to the administrative agency. It is required that
the regulation be germane to the objects and purposes of the law; and that
it be not in contradiction to, but in conformity with, the standards
prescribed by law.23
In summary, petitioners violated respondents right to due process in

the issuance of CMO 27-2003 when they failed to observe the requirements
under the Revised Administrative Code. Petitioners likewise violated
respondents right to equal protection of laws when they provided for an
unreasonable classification in the application of the regulation. Finally,
petitioner Commissioner of Customs went beyond his powers of delegated
authority when the regulation limited the powers of the customs officer to
examine and assess imported articles.
WHEREFORE, in view of the foregoing, the Petition is DENIED.
SO ORDERED.
Carpio (Chairperson), Brion, Perez and Reyes, JJ., concur.
Petition denied.
_______________
23 Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles v. Home Development Mutual Fund, 389
Phil. 296; 333 SCRA 777 (2000).
679

679
2012
Note.Court treats the petition for declaratory relief as one for
mandamus if the issue involved has far-reaching implications. (Gamboa vs.

Teves, 652 SCRA 690 [2011])
o0o
G.R. No. 187122. February 22, 2012.*
NEGROS SLASHERS, INC., RODOLFO C. ALVAREZ AND VICENTE

TAN, petitioners, vs. ALVIN L. TENG, respondent.
Remedial Law; Procedural Rules and Technicalities; Rules of procedure are strictly
enforced by courts in order to impart stability in the legal system.Ordinarily, rules of
procedure are strictly enforced by courts in order to impart stability in the legal system.
However, in not a few instances, we relaxed the rigid application of the rules of procedure to
afford the parties the opportunity to fully ventilate their cases on the merits. This is in line
with the time honored principle that cases should be decided only after giving all the
parties the chance to argue their causes and defenses. In that way, the ends of justice would
be better served. For indeed, the general objective of procedure is to facilitate the
application of justice to the rival claims of contending parties, bearing always in mind that
procedure is not to hinder but to promote the administration of justice.
Same; Civil Procedure; Forum Shopping; Elements of Forum Shopping.For forum
shopping to exist, it is necessary that (a) there be identity of parties or at least such parties
that represent the same interests in both actions; (b) there be 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 one action will, regardless
of which party is successful, amount to res judicata in the other action. Petitioners are
correct as to the first two requisites of forum shopping. First, there is identity of parties
involved: Negros Slashers Inc. and respondent
_______________
* FIRST DIVISION.
630
6
30
SUPREME COURT
REPORTS ANNOTATED
Negros Slashers, Inc. vs.
Teng
Teng. Second, there is identity of rights asserted i.e., the right of management to
terminate employment and the right of an employee against illegal termination. However,
the third requisite of forum shopping is missing in this case. Any judgment or ruling of the
Office of the Commissioner of the MBA will not amount to res judicata.
Same; Same; Res Judicata, Defined; Words and Phrases; Res Judicata is defined as
a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment.As defined in Agustin v. Delos Santos, 576 SCRA 576 (2009),Res Judicata is
defined as a matter adjudged; a thing judicially acted upon or decided; a thing or
matter settled by judgment. According to the doctrine of res judicata, an existing final
judgment or decree rendered on the merits, and without fraud or collusion, by a court of
competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the
rights of the parties or their privies, in all other actions or suits in the same or any other
judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first
suit. To state simply, a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all
points and matters determined in the former suit. (Emphasis supplied.) To clarify, res
judicata is defined in jurisprudence as to have four basic elements: (1) the judgment sought
to bar the new action must be final; (2) the decision must have been rendered by a court
having jurisdiction over the subject matter and the parties; (3) the disposition of the case
must be a judgment on the merits; and (4) there must be as between the first and second
action, identity of parties, subject matter, and causes of action.
Labor Law; Termination of Employment; Management Prerogative; While the employer
has the inherent right to discipline, including that of dismissing its employees, this
prerogative is subject to the regulation by the State in the exercise of its police power.As an
employee of the Negros Slashers, Teng was expected to report for work regularly. Missing a
team game is indeed a punishable offense. Untying of shoelaces when the game is not yet
finished is also irresponsible and unprofessional. However, we agree with the Labor Arbiter
that such isolated foolishness of an employee does not justify the extreme penalty of
dismissal from service. Petitioners could have opted to impose a fine or suspension on Teng
for his unacceptable
631
VOL. 666, FEBRUARY

22, 2012
31
Negros Slashers, Inc. vs.

Teng
conduct. Other forms of disciplinary action could also have been taken after the
incident to impart on the team that such misconduct will not be tolerated. In Sagales v.
Rustans Commercial Corporation, 572 SCRA 89 (2008), this Court ruled: Truly, while the
employer has the inherent right to discipline, including that of dismissing its employees,
this prerogative is subject to the regulation by the State in the exercise of its police power.
In this regard, it is a hornbook doctrine that infractions committed by an employee
should merit only the corresponding penalty demanded by the circumstance. The
penalty must be commensurate with the act, conduct or omission imputed to the
employee and must be imposed in connection with the disciplinary authority of
the employer. (Emphasis in the original.) In the case at bar, the penalty handed out by
the petitioners was the ultimate penalty of dismissal. There was no warning or admonition
for respondents violation of team rules, only outright termination of his services for an act
which could have been punished appropriately with a severe reprimand or suspension.
PETITION for review on certiorari of the decision and resolution of the

Court of Appeals.
Roberto C. Leong for petitioners.
Ambray, Castillo Law Firm for respondent.
VILLARAMA, JR.,J.:
Before us is a petition for review on certiorari assailing the
Decision1 dated September 17, 2008 and Resolution2 dated February 11,
2009 of the Court of Appeals (CA) in CA-G.R. SP No. 00817. The appellate
court had reversed and set aside the
_______________
1 Rollo, pp. 87-99. Penned by Associate Justice Francisco P. Acosta with Associate Justices Amy C.
Lazaro-Javier and Edgardo L. Delos Santos concurring.
2 Id., at p. 100.
632
63
2
SUPREME COURT
REPORTS ANNOTATED
Negros Slashers, Inc. vs. Teng
September 10, 2004 Decision3 and March 21, 2005 Resolution4 of the
National Labor Relations Commission (NLRC) and reinstated with
modification the Decision5 of the Labor Arbiter finding respondent to have
been illegally dismissed.
The facts are undisputed.
Respondent Alvin Teng is a professional basketball player who started
his career as such in the Philippine Basketball Association and then later
on played in the Metropolitan Basketball Association (MBA).
On February 4, 1999, Teng signed a 3-year contract 6 (which included a
side contract and agreement for additional benefits and bonuses) with the
Laguna Lakers. Before the expiration of his contract with the Laguna
Lakers on December 31, 2001, the Lakers traded and/or transferred Teng
to petitioner Negros Slashers, with the latter assuming the obligations of
Laguna Lakers under Tengs unexpired contract, including the monthly
salary of P250,000, P50,000 of which remained to be the obligation of the
Laguna Lakers. On March 28, 2000, the management of the Laguna
Lakers formally informed Teng of his transfer to the Negros Slashers. 7Teng
executed with the Negros Slashers the Players Contract of Employment. 8
On Game Number 4 of the MBA Championship Round for the year 2000
season, Teng had a below-par playing performance. Because of this, the
coaching staff decided to pull him out of the game. Teng then sat on the
bench, untied his shoelaces and donned his practice jersey. On the
following game, Game Number 5 of the Championship Round, Teng calledin sick and did not play.
_______________
3 Id., at pp. 70-79.
4 Id., at pp. 80-81.
5 Id., at pp. 54-69.
6 CA Rollo, pp. 53-55.
7 Id., at p. 56.
8 Id., at pp. 96-99.
633

2012
633
On November 21, 2000, Vicente Tan, Finance Head of Negros Slashers,

wrote9Teng requiring him to explain in writing why no disciplinary action
should be taken against him for his precipitated absence during the crucial
Game 5 of the National Championship Round. He was further informed
that a formal investigation would be conducted on November 28, 2000. The

hearing, however, did not push through because Teng was absent on the
said scheduled investigation. Hearing was rescheduled for December 11,
2000. On said date, the investigation proceeded, attended by Tengs
representatives, Atty. Arsenio Yulo and Atty. Jose Aspiras. 10 A subsequent
meeting was also conducted attended by the management, coaching staff
and players of the Negros Slashers team, wherein the team members and
coaching staff unanimously expressed their sentiments against Teng and
their opposition against the possibility of Teng joining back the team. 11
On March 16, 2001, the management of Negros Slashers came up with
a decision, and through its General Manager, petitioner Rodolfo Alvarez,
wrote12 Teng informing him of his termination from the team.
On July 28, 2001, Teng filed a complaint before the Office of the
Commissioner of the MBA pursuant to the provision of the Uniform
Players Contract which the parties had executed. Subsequently,
on November 6, 2001, Teng also filed an illegal dismissal case with the
Regional Arbitration Branch No. VI of the NLRC.13
On July 16, 2002, the Labor Arbiter issued a decision finding Tengs
dismissal illegal and ordering petitioner Negros Slashers, Inc. to pay
Teng P2,530,000 representing his unpaid salaries, separation pay and
attorneys fees. The Labor Arbi_______________
9 Id., at p. 101.
10 Id., at pp. 104-109.
11 Id., at pp. 108-112.
12 Id., at pp. 60-61.
13 Rollo, pp. 45-46, 89; CA Rollo, p. 186.
634
63
4
SUPREME COURT
REPORTS ANNOTATED
ter ruled that the penalty of dismissal was not justified since the grounds
relied upon by petitioners did not constitute serious misconduct or willful
disobedience or insubordination that would call for the extreme penalty of
dismissal from service. The dispositive portion of the Labor Arbiters
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the
dismissal of complainant illegal and respondents Negros Slashers, Inc. are hereby ordered
to PAY complainant the total sum of TWO MILLION FIVE HUNDRED THIRTY
THOUSAND
(P2,530,000.00)
PESOS representing
complainants
unpaid
salaries,
separation pay and attorneys fee, the award to be deposited with this Office within ten (10)
days from receipt of this Decision.
All other claims are hereby DISMISSED for lack of merit.
SO ORDERED.
14
The case was then appealed to the NLRC. On September 10, 2004, the
NLRC issued a Decision setting aside the July 16, 2002 Decision of the
Labor Arbiter and entering a new one dismissing the complaint for being
premature since the arbitration proceedings before the Commissioner of
the MBA were still pending when Teng filed his complaint for illegal
dismissal. The dispositive portion of the NLRC Decision reads:
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter a
quo is hereby REVERSED and SET ASIDE. A new one is entered, dismissing the instant
case for being premature.
SO ORDERED.
15
Teng filed a motion for reconsideration, but it was denied for being filed
beyond the ten-day reglementary period pro_______________
14 Id., at pp. 68-69.
15 Id., at p. 78.
635

2012
635
vided for in Section 15,16 Rule VII of the NLRC Rules of Procedure.
Aggrieved, Teng filed a petition for certiorari with the CA assailing the
NLRC Decision dated September 10, 2004 and the Resolution dated March
21, 2005 denying his motion for reconsideration.
On September 17, 2008 the CA rendered the assailed Decision setting
aside the September 10, 2004 Decision and March 21, 2005 Resolution of
the NLRC and reinstating with modification the Labor Arbiters Decision.
The CA reinstated the findings of the Labor Arbiter that Teng was
illegally dismissed because the grounds relied upon by petitioners were not
enough to merit the supreme penalty of dismissal. The CA held that there
was no serious misconduct or willful disobedience or insubordination on
Tengs part. On the issue of jurisdiction, the CA ruled that the Labor
Arbiter had jurisdiction over the case notwithstanding the pendency of
arbitration proceedings in the Office of the Commissioner of the MBA.
Petitioners sought reconsideration of the above ruling, but their motion

was denied by the CA in a Resolution17 dated February 11, 2009.
Petitioners now come to this Court assailing the Decision
dated September 17, 2008 and Resolution dated February 11, 2009 of the
CA.
_______________
1615. SectionMotions
for
Reconsideration.Motion
for
reconsideration
of
any
decision/resolution/order of the Commission shall not be entertained except when based on palpable or
patent errors, provided that the motion is under oath and filed within ten (10) calendar days from receipt
of decision/resolution/order, with proof of service that a copy of the same has been furnished, within the
reglementary period, the adverse party, and provided further, that only one such motion from the same
party shall be entertained.
xxxx
17 Rollo, pp. 100-102.
636
63
6
SUPREME COURT
REPORTS ANNOTATED
Firstly, petitioners argue that respondent Teng and his counsel

committed a blatant violation of the rule against forum shopping.
Petitioners aver that on July 28, 2001, Teng filed a complaint before the
MBA pursuant to the voluntary arbitration provision of the Uniform
Players Contract he executed with Negros Slashers, Inc. During the
pendency of said complaint, Teng filed another complaint for illegal
dismissal with the Labor Arbiter. It is petitioners position that Teng lied
by certifying under oath that there is no similar case pending between him
and Negros Slashers, Inc., when in fact, months before he had filed a
complaint with the MBA alleging the same factual antecedents and raising
the same issues.
Secondly, petitioners argue that the CA erred in ruling that Tengs
offenses were just minor lapses and irresponsible action not warranting
the harsh penalty of dismissal. Petitioners allege that the CA paid scant
attention to two very important pieces of evidence which would clearly
show the gravity and seriousness of the offenses committed by Teng.
Petitioners claim that these two documents, i.e., the minutes of the
meeting18 of players, management, and coordinating staff, and a
petition19 by the players to the management not to allow Teng to come back
to the team, would show that Teng should not have been treated as an
ordinary working man who merely absented himself by feigning sickness
when called upon to work. Petitioners argue that the nature of the work
and team atmosphere should have been considered and given credence. By
neglecting these two documents, the CA failed to appreciate the gravity of
the misconduct committed by Teng and the effects it had on the basketball
organization.
Petitioners also argue that respondents petition forcertiorari with the
CA should have been dismissed outright because it was filed beyond the
reglementary period. Petitioners point
_______________
18 CA Rollo, pp. 108-112.
19 Id., at p. 113.
637

2012
637
out that Teng received the NLRC Decision on October 15, 2004 and
therefore had ten days20 or until October 25, 2004 within which to file a
motion for reconsideration. But he filed his motion for reconsideration only
on October 26, 2004 and said motion was denied21 on March 21, 2005 for
being filed late. Thereafter he filed his petition for certiorari22with the CA
on June 20, 2005. Petitioners contend that the petition for certiorariwas
filed beyond the period allowed by the Rules of Court because the 60-day
period to file the petition forcertiorari should have started to run from the
receipt of the NLRC decision on October 15, 2004. And it should have
expired on December 14, 2004 because it was as if no motion for
reconsideration was filed in the NLRC. Further, petitioners argue that the
CA could not take cognizance of the case because it is a settled rule
that certiorari as a special civil action will not lie unless a motion for
reconsideration is first filed before the NLRC to allow it an opportunity to
correct its errors. In this case, since the motion for reconsideration was
filed late, it should have been treated as if no motion for reconsideration
was filed.
Teng, on the other hand, maintains that there is no violation of the rule
against forum shopping. He submits that he indeed filed his complaint
before the MBA as early as July 28, 2001. Unfortunately, for more than
three months, the supposed voluntary arbitration failed to yield any result
until the MBA itself was dissolved. It was only on November 2001, after
exhausting the arbitration process, did he file his complaint before the
Labor Arbiter. In other words, it was only after the MBA failed to come up
with a resolution on the matter did he opt to seek legal redress elsewhere.
_______________
20 Section 15, Rule VII of the NLRC Rules of Procedure, supranote 15.
21 Rollo, p. 80.
22 CA Rollo, pp. 2-20.
638
63
8
SUPREME COURT
REPORTS ANNOTATED
On the merits, Teng relies on the reasoning of the Labor Arbiter in

finding that his alleged lapses and misconduct were too minor to justify
the extreme penalty of dismissal from service. In large part, he quotes the
Labor Arbiters decision, and emphasizes the Labor Arbiters statements
that (1) loosening of the shoe laces and the donning of the practice jersey
are not indicative of serious misconduct that would justify dismissal from
employment; (2) it cannot be concluded that he merely feigned sickness
when he informed the Coach of his inability to play during Game No. 5;
and (3) there is no showing of any bad faith or ill motive on his part that
would qualify his actions as serious, severe and grave as to warrant
termination from service.
Teng also argues that the CA aptly clarified and explained the legal
reason why the petition for certiorariwas given due course despite some
procedural lapses regarding the motion for reconsideration with the
NLRC. Teng stresses that jurisprudence allows the relaxation of
procedural rules even of the most mandatory character in the interest of
substantial justice. In this particular case, justice and equity calls for the
relaxation of the reglementary period for filing a motion for
reconsideration as well as the rule prohibiting the filing of a petition
for certiorariwithout first filing a motion for reconsideration.
Simply put, the basic issues for our resolution are as follows: (1) whether
the CA erred in giving due course to respondent Tengs petition
for certiorari despite its late filing; (2) whether Teng violated the rule on
forum shopping when he filed a complaint for illegal dismissal with the
Regional Arbitration Branch of the NLRC while a similar complaint was
pending in the Office of the Commissioner of the MBA; and (3) whether the
CA erred in ruling that Tengs dismissal from the Negros Slashers Team
was unjustified and too harsh considering his misconduct.
The petition is bereft of merit.639
2012
639
On the first issue raised by petitioners, we rule that the CA did not
commit a reversible error in giving due course to Tengs petition
forcertiorari although said petition was filed late. Ordinarily, rules of
procedure are strictly enforced by courts in order to impart stability in the
legal system. However, in not a few instances, we relaxed the rigid
application of the rules of procedure to afford the parties the opportunity
to fully ventilate their cases on the merits. This is in line with the time
honored principle that cases should be decided only after giving all the
parties the chance to argue their causes and defenses. In that way, the
ends of justice would be better served. For indeed, the general objective of
procedure is to facilitate the application of justice to the rival claims of
contending parties, bearing always in mind that procedure is not to hinder
but to promote the administration of justice.23In Ong Lim Sing, Jr. v. FEB
Leasing and Finance Corporation,24 we ruled:
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 x
Indeed the prevailing trend is to accord party litigants the amplest

opportunity for the proper and just determination of their causes, free
from the constraints of needless technicalities.
Here, besides the fact that a denial of the recourse to the CA would
serve more to perpetuate an injustice and violation
_______________
23 Republic Cement Corporation v. Guinmapang, G.R. No. 168910, August 24, 2009, 596 SCRA 688,
695.
24 G.R. No. 168115, June 8, 2007, 524 SCRA 333, 343, citing Barnes v. Padilla, G.R. No. 160753, June
28, 2005, 461 SCRA 533, 539.
640
64
0
SUPREME COURT
REPORTS ANNOTATED
of Tengs rights under our labor laws, we find that as correctly held by the
CA, no intent to delay the administration of justice could be attributed to
Teng. The CA therefore did not commit reversible error in excusing Tengs
one-day delay in filing his motion for reconsideration and in giving due
course to his petition forcertiorari.
As regards the second issue, we likewise find no merit in petitioners

claim that respondents act of filing a complaint with the Labor Arbiter
while the same case was pending with the Office of the Commissioner of
the MBA constituted forum shopping.
For forum shopping to exist, it is necessary that (a) there be identity of
parties or at least such parties that represent the same interests in both
actions; (b) there be 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 one action
will, regardless of which party is successful, amount to res judicata in the
other action.25
Petitioners are correct as to the first two requisites of forum
shopping. First, there is identity of parties involved: Negros Slashers Inc.
and respondent Teng.Second, there is identity of rights asserted i.e., the
right of management to terminate employment and the right of an
employee against illegal termination. However, the third requisite of forum
shopping is missing in this case. Any judgment or ruling of the Office of
the Commissioner of the MBA will not amount to res judicata. As defined
in Agustin v. Delos Santos,26
_______________
25 Korea Exchange Bank v. Gonzales, G.R. Nos. 142286-87, April 15, 2005, 456 SCRA 224, 243,
citing Benedicto v. Court of Appeals, G.R. No. 125359, September 4, 2001, 364 SCRA 334, 345.
26 G.R. No. 168139, January 20, 2009, 576 SCRA 576, 585, citing Oropeza Marketing Corporation v.
Allied Banking Corporation, G.R. No. 129788, December 3, 2002, 393 SCRA 278, 285-286, quoting Blacks
Law Dictionary, 4th Ed. (1968) 1470,Philippine National
641

2012
641

Res Judicata is defined as a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment. According to the doctrine of res
judicata, an existing final judgment or decree rendered on the merits, and without fraud or
collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction,
is conclusive of the rights of the parties or their privies, in all other actions or suits in the
same or any other judicial tribunal of concurrent jurisdiction on the points and matters in
issue in the first suit. To state simply, a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later
suits on all points and matters determined in the former suit. (Emphasis supplied.)
To clarify, res judicata is defined in jurisprudence as to have four basic

elements: (1) the judgment sought to bar the new action must be final; (2)
the decision must have been rendered by a court having jurisdiction over
the subject matter and the parties; (3) the disposition of the case must be a
judgment on the merits; and (4) there must be as between the first and
second action, identity of parties, subject matter, and causes of action. 27
Here, although contractually authorized to settle disputes, the Office of
the Commissioner of the MBA is not a court of competent jurisdiction as
contemplated by law with respect to the application of the doctrine of res
judicata.At best, the Office of the Commissioner of the MBA is a private
mediator or go-between as agreed upon by team management and a player
in the MBA Players Contract of Employment. 28Any judgment that the
Office of the Commissioner of the MBA
_______________
Bank v. Barreto, 52 Phil. 818, 823-824 (1929), Taganas v. Emuslan, G.R. No. 146980, September 2,
2003, 410 SCRA 237, 241-242.
27 Social Security Commission v. Rizal Poultry and Livestock Association, Inc., G.R. No. 167050, June
1, 2011, 650 SCRA 50, 57-58, citing Oropeza Marketing Corporation v. Allied Banking Corporation, id., at
p. 287.
28 Rollo, p. 47.
642
64
2
SUPREME COURT
REPORTS ANNOTATED
may render will not result in a bar for seeking redress in other legal
venues. Hence, respondents action of filing the same complaint in the
Regional Arbitration Branch of the NLRC does not constitute forum
shopping.
On the third issue, we find that the penalty of dismissal handed out
against Teng was indeed too harsh.
We understand petitioners in asserting that a basketball organization is
a team-based enterprise and that a harmonious working relationship
among team players is essential to the success of the organization. We also
take into account the petition of the other team members voicing out their
desire to continue with the team without Teng. We note likewise the
sentiments of the players and coaching staff during the meeting
of February 4, 2001 stating how they felt when Teng abandoned them
during a crucial Game Number 5 in the MBA championship round.
Petitioners rely heavily on the alleged effects of Tengs actions on the
rest of the team. However, such reaction from team members is expected
after losing a game, especially a championship game. It is also not unlikely
that the team members looked for someone to blame after they lost the
championship games and that Teng happened to be the closest target of
the teams frustration and disappointment. But all these sentiments and
emotions from Negros Slashers players and staff must not blur the eyes of
the Court from objectively assessing Tengs infraction in order to

determine whether the same constitutes just ground for dismissal. The
incident in question should be clear: Teng had a below-par performance
during Game Number 4 for which he was pulled out from the game, and
then he untied his shoelaces and donned his practice jersey. In Game
Number 5, he did not play.
As an employee of the Negros Slashers, Teng was expected to report for
work regularly. Missing a team game is indeed a punishable offense.
Untying of shoelaces when the game is not yet finished is also
irresponsible and unprofessional.
643

2012
643
However, we agree with the Labor Arbiter that such isolated foolishness of
an employee does not justify the extreme penalty of dismissal from service.
Petitioners could have opted to impose a fine or suspension on Teng for his
unacceptable conduct. Other forms of disciplinary action could also have
been taken after the incident to impart on the team that such misconduct
will not be tolerated.
In Sagales v. Rustans Commercial Corporation,29this Court ruled:
Truly, while the employer has the inherent right to discipline, including that of dismissing
its employees, this prerogative is subject to the regulation by the State in the exercise of its
police power.
In this regard, it is a hornbook doctrine that infractions committed by an employee
should merit only the corresponding penalty demanded by the circumstance. The
penalty must be commensurate with the act, conduct or omission imputed to the
employee and must be imposed in connection with the disciplinary authority of
the employer. (Emphasis in the original.)
In the case at bar, the penalty handed out by the petitioners was the
ultimate penalty of dismissal. There was no warning or admonition for
respondents violation of team rules, only outright termination of his
services for an act which could have been punished appropriately with a
severe reprimand or suspension.
WHEREFORE,
the
petition
for
review
oncertiorari is
DENIED for lack of merit and the Decision of the Court of Appeals dated
September 17, 2008 and Resolution dated
_______________
29 G.R. No. 166554, November 27, 2008, 572 SCRA 89, 104, citing Manila Trading and Supply Co. v.
Zulueta, 69 Phil. 485, 486 (1940), Caltex Refinery Employees Association (CREA) v. National Labor
Relations Commission (Third Division), G.R. No. 102993, July 14, 1995, 246 SCRA 271, 279; Radio
Communications of the Phils., Inc. v. NLRC, G.R. No. 102958, June 25, 1993, 223 SCRA 656, 667.
644
64
4
SUPREME COURT
REPORTS ANNOTATED
February 11, 2009, in CA-G.R. SP No. 00817 are hereby AFFIRMED.

With costs against the petitioners.
SO ORDERED.
Corona (C.J., Chairperson), Leonardo-De Castro, Bersamin and PerlasBernabe,** JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.It is acknowledged that an employer has free rein and enjoys a
wide latitude of discretion to regulate all aspects of employment, including

the prerogative to instill discipline on his employees and to impose
penalties, including dismissal, if warranted, upon erring employees.
(Caong, Jr. vs. Regualos, 640 SCRA 597 [2011]).
The managements prerogative of transferring and reassigning
employees from one area of operation to another in order to meet the
requirements of the business is generally not constitutive of constructive
dismissal. (Bello vs. Bonifacio Security Services, Inc., 655 SCRA 143.
[2011].)
o0o
_______________
** Designated additional member per Special Order No. 1203 dated February 17, 2012.
February 22, 2012.G.R. No. 192085.*
CARIDAD SEGARRA SAZON, petitioner, vs.LETECIA VASQUEZMENANCIO, represented by attorney-in-fact EDGAR S. SEGARRA,
respondent.
Remedial Law; Civil Procedure; Appeals; When a case is appealed, the appellate court
has the power to review the case in its entirety.In Heirs of Carlos Alcaraz v. Republic of the
Philippines, 464 SCRA 280 (2005), we reiterated the cardinal rule that when a case is
appealed, the appellate court has the power to review the case in its entirety, to wit: In any
event, when petitioners interposed an appeal to the Court of Appeals, the appealed case
was thereby thrown wide open for review by that court, which is thus necessarily
empowered to come out with a judgment as it thinks would be a just determination of the
controversy. Given this power, the appellate court has the authority to either affirm, reverse
or modify the appealed decision of the trial court. To withhold from the appellate court its
power to render an entirely new decision would violate its power of review and would, in
effect, render it incapable of correcting patent errors committed by the lower courts. Thus,
we agree with respondent that the CA was free to affirm, reverse, or modify either the
Decision or the Order of the RTC.
Same; Same; Same; Factual findings of the trial court are accorded high respect and
are generally not disturbed by appellate courts, unless found to be clearly arbitrary or
baseless.Factual findings of the trial court are accorded high respect and are generally not
disturbed by appellate courts, unless found to be clearly arbitrary or baseless. This Court
does not review the factual findings of an appellate court, unless these findings are
mistaken, absurd, speculative, conjectural, conflicting, tainted with grave abuse of
discretion, or contrary to the findings culled by the trial court of origin.
Civil Law; Human Relations; Quantum Meruit; Unjust Enrichment; The doctrine of
quantum meruit (as much as one deserves) prevents undue enrichment based on the
equitable postulate that it is
_______________
* SECOND DIVISION.
708
7
08
SUPREME COURT
REPORTS ANNOTATED
Sazon vs. Vasquez-Menancio
unjust for a person to retain benefit without paying for it.The doctrine of quantum
meruit(as much as one deserves) prevents undue enrichment based on the equitable
postulate that it is unjust for a person to retain benefit without paying for it. Being an
equitable principle, it should only be applied if no express contract was entered into, and no
specific statutory provision is applicable. Although petitioner was given the authority to set
the amount of her salary, she failed to do so. Thus, she should at least be given what she
merits for her services. We find no reason to reverse the finding of both the RTC and the CA
that P1,000 per month for 15 years is a just, reasonable, and fair compensation to petitioner
for administering respondents properties. The lower court is ordered to add this amount to
the deductibles that petitioner is able to prove or, if the deductibles exceed the monetary
value of the income generated by the properties, to add this amount to whatever respondent
ends up owing petitioner.
PETITION for review on certiorari of a decision of the Court of Appeals.

The Law Firm of Dupaya & Dupaya for petitioner.
Rodrigo R. Reantaso for respondent.
SERENO,J.:
The present case stems from a Complaint for Recovery of Possession of
Real Properties, Accounting and Injunction1 filed by Leticia VasquezMenancio (respondent) against Caridad S. Sazon (petitioner) in the
Regional Trial Court (RTC) of Ligao City, Albay. The RTC ruled in favor of
respondent, but reversed itself when petitioner filed a Motion for
Reconsideration (MR). Respondent appealed the case to the Court of
Appeals (CA), but it affirmed the first Decision of the RTC. She filed
another MR, but the CA denied it for lack of merit.
_______________
1 Rollo, pp. 74-77.
709

2012
709
The Case
Before us is a Petition for Review 2 under Rule 45 of the Rules of Court,
assailing the 26 November 2009 Decision3of the appellate court in CA-GR
CV No. 91570. The challenged Decision disposed as follows:
WHEREFORE, the appeal is DISMISSED. The Decisiondated 31 July 2007 of the
Regional
Trial
Court,
Branch
13,
Ligao
City,
in
Civil
Case
No.
T-1944
is AFFIRMED withMODIFICATION in that Caridad S. Sazon is ORDEREDto pay

Leticia Vasquez-Menancio the amount of P908,112.62, representing the unremitted fruits
and income of the subject properties from 1979 to 1997. This is already net of
administration expenses, allowance for compensation and proved real estate taxes paid.
The Decision is affirmed in all other respects.
SO ORDERED.
Antecedents
Respondent is a resident of the United States of America. Sometime in
1979, she entrusted the management, administration, care and
preservation of her properties to petitioner. These properties are more

specifically described as follows:
Residential lot, with an area of 573 sq. m., located in Zone III, Libon, Albay, declared under Tax No. 097-030066 in the sum of P24,070.00I.
Residential lot, with an area of 299 sq. m., located in Zone III, Libon, Albay, declared under Tax No. 097-00300115 in the sum of P12,560.00II.
_______________
2 Id., at pp. 29-39.
3 Id., at pp. 58-69; penned by Associate Justice Ricardo R. Rosario and concurred in by Associate Justices Jose C. Reyes, Jr. and Magdangal M.
de Leon.
4 Rollo, pp. 68-69.
710
710
SUPREME COURT
REPORTS
ANNOTATED
Residential lot, with an area of 873 sq. m., located in San Antonio St., Libon, Albay, declared under Tax No.
097-003-00068 in the sum of P36,670.00III.
Irrigated riceland, Cad. Lot No. 852, with an area of 3.1304 hectares, located at San Isidro, Libon, Albay,
declared under Tax No. 07-039-235 in the sum of P96,580.00IV.
Irrigated riceland, with an area of 1.5652 hectares, located at Bololo Centro, Libon, Albay, declared under Tax
No. 07-005-104 in the sum of P48,290.00V.
Irrigated riceland, with an area of .6720 hectares, located at Bololo Centro, Libon, Albay, declared under Tax
No. 07-005-103 in the sum of P29,730.00VI.
Irrigated riceland, with an area of .6380 hectares, located at Balagon Centro, Libon, Albay, declared under
Tax No. 07-005-222 in the sum of P19,680.00VII.
Coconut land, with an area of ten (10) hectares, located at Macabugos, Libon, Albay, declared under Tax No.
07-023-85 in the sum of P42,840.00VIII.
Coconut land, with an area of 3.7102 hectares, located at Macabugos, Libon, Albay, declared under Tax No.
07-023-86 in the sum of P15,740.00IX.5
The properties shall hereinafter be referred to individually as Lot I,

Lot II and so on for brevity.
Respondent avers that Lots I to IX are productive, and that petitioner as
the administrator has collected and received all the fruits and income
accruing therefrom. Petitioner, on the other hand, claims that several of
the properties do not produce any fruit or generate any income at all, 6and
that any supposed income derived from them is not sufficient to answer for
all the expenses incurred to maintain them.7
_______________
5 Id., at pp. 74-75.
6 Id., at p. 81.
7 Id., at pp. 13-14.
711

2012
711
According to respondent, petitioner never rendered a full accounting of

the fruits and income derived from the properties, but has instead
appropriated and in fact applied these for her own use and benefit.
Denying this allegation, petitioner presented five lettersdated 21
January 1983, 12 March 1984, 15 September 1986, 2 December 1988, and
one undatedwhich had been sent to respondent as proof of the
accounting.8
Furthermore, petitioner denies receipt of any letter asking her to make
an accounting or to remit the fruits collected from the properties. 9 She
further avers that, since the start of her agency agreement with
respondent, the latter never answered any of the communications
petitioner had sought to initiate.10
As a result of the foregoing, respondent revoked, in writing, all the
powers and authority of administration granted to petitioner effective
March 1997. Thereafter, the former demanded that petitioner return
and/or turn over the possession and administration of the properties.
Respondent claims that she made repeated verbal, and served written,
demands upon petitioner, asking the latter to render an accounting and to
remit the owners share of the fruits. Petitioner, however, continued to fail
and to refuse to perform her obligation. 11 In fact, she continues to hold on
to the properties and the management and administration thereof.
Further, she continues to collect, receive, and keep all the income
generated by the properties.
Thus, on 30 October 1997, respondent filed her Complaint with
Preliminary Injunction,12 praying that the RTC order petitioner to render
an accounting and remit all the fruits and
_______________
8 Id., at p. 32.
9 Id., at p. 80.
10 Supra note 6.
11 Id., at p. 75.
12 Id., at p. 59.
712
71
2
SUPREME COURT
REPORTS ANNOTATED
income the latter, as the administrator, received from the properties.

In her Answer with Counterclaim,13 petitioner alleges as follows:
Lot area of 573 sq.m.is being leased by Salome S. Segarra which is duly covered by a Lease Contract
executed during the effectivity of the Special Power of Attorney granted to the herein defendant.
Furthermore, the said Lease Contract was entered into with the express consent, and without any
objection on the part of the plaintiff since she was consulted prior to its execution; xxx,2.a.
Lot area of 299 sq. m.This is included in the [L]ease [C]ontract above-mentioned.2.b.
Lot area of 873 sq. m.This is likewise duly covered by a Lease Contract executed between the herein
defendant as lessee and Ana C. Segarra when the latter was still the administrator of the properties of
the plaintiff. The said Lease Contract was likewise entered into with the express consent and without
any objection on the part of the plaintiff since she was again consulted prior to its execution; xxx.2.c.
Lot area of 3.1304 hectaresthis is administered as to 2/3 of the total land area but not as to the other 1/3 as
the same is owned by the defendants mother Ana C. Segarra by virtue of a contract of sale from Mrs.
Josefina Segarra, the co-owner of the plaintiff over the said land; xxx,2.d.
Lot area of 1.5652 hectares and .6720 hectares are not owned by the plaintiff but that of the mother of the
herein defendant Ana C. Segarra by virtue of a Deed of Redemption, as in fact, they are in possession
thereof as owners and not as administrator of the plaintiff; xxx,2.e.
Lot area of .6380 hectaressaid land is presently possessed by the alleged administrator of the plaintiff yet
the plaintiff still seeks the return of the same which con-2.f.
_______________
13 Id., at pp. 78-87.
713
VOL. 666, FEBRUARY

22, 2012
713
stitutes an act that trifles with the administration of justice and further prove that this groundless case was
filed with this court purely to harass the herein defendant;
Lot area of 10 hectares and Lot area of 3.7102 hectaresthe herein defendant is no longer in possession of
these lots as in fact, the fruits of these lands are not being turned over to the defendant ever since the
plaintiff revoked the authority given to the defendant, xxx.2.g.14
In short, petitioner argues that respondent has no cause of action

against her for the following reasons:15
The properties that cannot be returned because they are under valid
lease agreementsLots I-IIIand those that have been transferred
to a third party by virtue of contracts of sale with corresponding
deeds of redemptionLots V and VIcan no longer be given to
respondent;1.16
Some properties are already in respondents possessionLots IV and
VII-IX.2.17
By way of compulsory counterclaim, petitioner is asking this Court to

order respondent to return the one-third portion of Lot IV allegedly owned
by petitioners mother and the fruits collected therefrom.18
During the pretrial conference held on 24 July 1998, the parties agreed
that respondent already had possession over Lots IV, VII, VIII, and IX.
They also agreed that all the income derived from Lots I to IX since 1979
were received by petitioner.19
_______________
14 Id., at pp. 78-80.
15 Id., at p. 83.
16 Id., at pp. 81-82.
17 Id., at pp. 83-84.
18 Id., at p. 84.
19 Id., at p. 91.
714
71
4
SUPREME COURT
REPORTS ANNOTATED
In a Decision20 dated 31 July 2007, the RTC ruled in favor of

respondents. The dispositive portion thereof reads:
WHEREFORE, the foregoing premises duly considered, judgment is hereby rendered in
favor of plaintiff Leticia Vasquez-Menancio and against defendant Caridad S. Sazon, as
follows:
ordering the defendant to turn over the possession, management and administration of
all the properties enumerated in paragraph 2 of the complaint, except parcels 4, 7, 8 and 9
which were already under plaintiffs possession since August, 1977, to the plaintiff, thru
attorney-in-fact Edgar S. Segarra;a)
ordering the defendant to remit to the plaintiff the total sum of P1,265,493.75
representing unremitted fruits and income of the subject properties, less the amount of
P150,000.00 by way of administration expenses incurred by defendant;b)
ordering the defendant to pay the plaintiff the sum of P50,000.00 as moral damages;c)
ordering the defendant to reimburse the plaintiff the sum of P20,000.00 as and for
attorneys fees, plus the sum of P1,000.00 for every court appearance of counsel; andd)
ordering the defendant to pay the costs of the suit.e)
On the other hand, plaintiff Leticia Vasquez-Menancio is hereby ordered to pay
defendant Caridad S. Sazon the total sum of P180,000.00, representing the latters
compensation in administering the formers properties based on quantum meruit.
SO ORDERED.
21
Petitioner filed her MR on 20 August 2007 questioning the trial courts

Decision to rely on the computation made by respondents attorney-in-fact.
These computations, reflected in paragraph (b) of the dispositive portion,
were used by the RTC to determine the prices of palay, corn and copra at
the time that petitioner administered the properties. Realizing, however,
that it should have considered the Certifications
_______________
20 Id., at pp. 88-102, Civil Case No. T-1944, penned by Judge William B. Volante.
21 Id., at pp. 101-102.
715
715
2012
issued by the National Food Authority (NFA) and the Philippine

Coconut Authority (PCA) for that purpose, the RTC ruled in favor of
respondent and partly reversed its 28 March 2008 Decision, the dispositive
portion of which reads:
WHEREFORE, the foregoing premises duly considered, the Court resolves to
set aside the Decision dated July 31, 2007. In lieu thereof, a new decision is hereby
rendered as follows:
ordering the defendant Caridad S. Sazon to turn over the possession, management and
administration of all the properties enumerated in paragraph 2 of the complaint, except
parcels 4, 7, 8 and 9 which were already under plaintiffs possession since August, 2007, to
plaintiff Leticia Vasquez-Menancio, thru her attorney-in-fact Edgar S. Segarra;a)
ordering the defendant to render full, accurate and complete accounting of all the fruits
and proceeds of the subject properties during the period of her administration; andb)
ordering the defendant to reimburse the plaintiff the sum of P20,000.00, as and for
attorneys fees;c)
Costs against defendant.
SO ORDERED. (Emphasis supplied in the original)
22
Still aggrieved, petitioner raised the matter to the CA, but it dismissed
her appeal. It affirmed the trial courts 31 July 2007 Decision, except for
the amount ordered to be remitted to respondent, which was reduced to
P908,112.62. The MR filed by petitioner was also denied on 29 April 2010.23
Petitioner is now asking this Court to set aside the CAs Decision. 24
In questioning the Decision of the CA, petitioner first raises a

procedural issue. She argues that the appellate court should not have
affirmed the RTC Decision in this case, be_______________
22 Id., at p. 17.
23 Id., at pp. 72-73.
24 Id., at p. 54.
716
71
6
SUPREME COURT
REPORTS ANNOTATED
cause when the trial court abandoned its original Decision, the latter
impliedly admitted that it had committed erroneous findings of
facts.25Respondent argues that the CA had the power to affirm the RTCs
second Decisionthe Resolution on the MRbecause the entire case was
opened for review upon appeal.
We agree with respondent.
In Heirs of Carlos Alcaraz v. Republic of the Philippines,26 we reiterated
the cardinal rule that when a case is appealed, the appellate court has the
power to review the case in its entirety, to wit:
In any event, when petitioners interposed an appeal to the Court of Appeals, the
appealed case was thereby thrown wide open for review by that court, which is thus
necessarily empowered to come out with a judgment as it thinks would be a just
determination of the controversy. Given this power, the appellate court has the authority to
either affirm, reverse or modify the appealed decision of the trial court. To withhold from
the appellate court its power to render an entirely new decision would violate its power of
review and would, in effect, render it incapable of correcting patent errors committed by the
lower courts.
Thus, we agree with respondent that the CA was free to affirm, reverse,
or modify either the Decision or the Order of the RTC.
Next, petitioner avers that she cannot turn over possession of Lots I to
III, because these are subject of valid lease agreements. None of the
parties question the appellate courts finding that the lease agreements
covering Lots I-III should be respected. After all, when petitioner entered
into these agreements, she acted within her authority as respondents
agent.27
_______________
25 Id., at p. 21.
26 502 Phil. 521, 536; 464 SCRA 280, 294-295 (2005).
27 Rollo, pp. 66-67.
717

2012
717
In this matter, we agree with the CA in its ruling that even though the
lease agreements covering these lots should be respected, petitioner must
turn over the administration of the leases to respondents attorney-infact.28 The reason is that respondent has already revoked the authority of
petitioner as administrator. Hence, the latter no longer has the right to
administer the properties or to receive the income they generate on

respondents behalf.
With respect to the one-third portion of Lot IV, the parties also agree
that the sale of one-third of this lot to petitioners mother should be
respected by respondent.29Lot IV has been in the latters possession since
1997. Since it is not controverted that one-third of this lot is now owned by
petitioners mother, respondent should turn over possession of the
corresponding one-third portion and remit all fruits collected therefrom
since 1997.
Petitioner questions the factual findings of the appellate court. She
claims that the CA erred in finding that the reason why petitioner
allegedly never rendered an accounting of income is because the
respondent never demanded it.30 According to petitioner, she never
claimed that this was the reason why she never rendered an accounting of
income. In fact, she insists that she actually sent letters of accounting to
respondent. Supposedly, she only said that respondent never demanded
accounting from her to refute the claim of respondent that such demand
letter was sent to her.
Petitioner insists, however, that Article 1891 of the Civil Code contains a
few of the obligations owed by an agent to his principal, viz.:
Every agent is bound to render an account of his transactions and to deliver to the
principal whatever he may haveArt. 1891.
_______________
28 Id., at p. 67.
29 Id.
30 Id., at p. 28.
718
71
8
SUPREME COURT
REPORTS ANNOTATED
received by virtue of the agency, even though it may not be owing to the principal.
Every stipulation exempting the agent from the obligation to render an account shall be
void.
It is evident that the reason behind the failure of petitioner to render an

accounting to respondent is immaterial. What is important is that the
former fulfill her duty to render an account of the relevant transactions
she entered into as respondents agent.
Petitioner claims that in the course of her administration of the
properties, the letters she sent to respondent should be considered as a
fulfillment of her obligation, as respondents agent, to render an
accounting of her administration.31 Both the RTC and the CA found these
letters insufficient. We agree. Petitioner was the administrator of
respondents properties for 18 years or from 1979 to 1997, and four letters
within 18 years can hardly be considered as sufficient to keep the principal
informed and updated of the condition and status of the latters properties.
As to Lots V and VI, petitioner avers that ownership thereof was
transferred to her mother through a Deed of Redemption, 32 viz.:
Defendant averred that her mother owned parcels 5 and 6. She Identified a Deed of
Redemption purporting to have transferred the property to her mother. When the deed was
executed, plaintiff was in the United States but defendants mother notified her. She saw
her mother putting 100-peso bills amounting to P6,500.00 in a big brown envelope to pay for
the lot. Her father Simeon Segarra who just came from the United States gave her the
money.
33
On this matter, the RTC found thus:

_______________
31 Id., at p. 32.
32 Id., at p. 96.
33 Id.
719

2012
719

As regards parcels 5 and 6, the defendant averred that they were owned by her mother
Ana Segarra because she was the one who redeemed the properties. But the evidence
extant in the records disclosed that the said parcels of land were declared for taxation
purposes in the name of plaintiff Leticia Vasquez-Menancio. In many cases, it has been
repeatedly held that although tax declarations are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of an owner for no one in his
right mind would be paying taxes for a property that is not under his actual or at least
constructive possession. Hence, the fruits and profits of these properties shall still incur to
the plaintiff.
34
For its part, the CA held as follows:

To prove that one of Leticias properties now belongs to her mother, Ana Segarra, Sazon
presented evidence showing that when Ana was still the administrator of Leticias
properties, she redeemed Leticias property that was sold by Leticias father to vendee-aretro, Loreto San Andres-Seda. However, the Deed of Redemption clearly shows that Ana
redeemed the property only in her capacity as attorney-in-fact of Leticia, and not in her
personal capacity.
35
Factual findings of the trial court are accorded high respect and are
generally not disturbed by appellate courts, unless found to be clearly
arbitrary or baseless.36 This Court does not review the factual findings of
an appellate court, unless these findings are mistaken, absurd,
speculative, conjectural, conflicting, tainted with grave abuse of discretion,
or contrary to the findings culled by the trial court of origin. 37
Although the pronouncement of the trial court is not identical to that of
the CA, the declaration of one corroborates the findings of the other. We
rule that the findings of the lower court and the CA regarding Lots V and
VI should be re_______________
34 Id., at p. 99.
35 Id., at p. 61.
36 People v. Agunias, 344 Phil. 467; 279 SCRA 52 (1997).
37 Ramirez v. Court of Appeals, 356 Phil. 10; 294 SCRA 512 (1998).
720
72
0
SUPREME COURT
REPORTS ANNOTATED
spected. The mother of petitioner purchased both of these lots in her

capacity as respondents attorney-in-fact, which explains why these lots
werefor taxation purposesdeclared in the name of respondent.
Petitioner bewails the appellate courts supposed failure to rule on her
claim that respondent promised to give the former a 20% commission for
the sale of respondents properties in Las Pias, Quiapo; and Fraternal,

Sampaloc, Manila.38 We rule that petitioner failed to prove that this
agreement had been entered into. No other evidence, except for her
testimony, was presented to prove that an agreement of this nature had
been entered into between the parties.39
Finally, the crux of the present Petition is the determination of the
value of all the fruits and proceeds collected from respondents properties
from 1979 to 1997 and the total sum thereof.
Petitioner does not deny that she never remitted to respondent any of
the fruits or income derived from the properties. Instead, petitioner claims
that (1) the properties did not produce any fruit or generate any income at
all;40 (2) any supposed income derived from the properties was not sufficient
to answer for all the expenses incurred to maintain them; 41 and (3) she was
never compensated for the services she rendered as the administrator of
respondents properties.
As previously mentioned, every agent is bound to deliver to the principal
whatever the former may have received by virtue of the agency, even
though that amount may not be owed to the principal.42
In determining the value of the fruits, the RTCin its original Decision
relied on the computation submitted by
_______________
38 Rollo, pp. 45-46.
39 See Rollo, pp. 45-47.
40 Supra note 6.
41 Supra note 7.
42 CIVIL CODE OF THE PHILIPPINES, Art. 1891.
721

2012
721
respondents attorney-in-fact and ordered petitioner to remit to respondent

the total sum of P1,265,493.75, to wit:
At the outset, it may be stated that plaintiffs attorney-in-fact Edgar S. Segarra, being a
farmer himself and a resident of the area where the subject properties are located can best
testify regarding the income thereof. In preparing a computation of income of his principal,
plaintiff Leticia Vasquez-Menancio, he consulted people from the agrarian sector, as well as
grains buyers. He also referred to the lease contracts entered into between the former
administratrix and the tenants. Based on his computation, the amount which represented
the fruits of the properties being administered by the defendant but were not remitted to
the plaintiff totaled P1,265,493.75 xxx, which amount to the mind of the Court, is not
colossal but a reasonable claim, especially in this instance where the subject properties
have been administered by defendant and her mother for more than (10) years.
43
The computation is based on the alleged prevailing price of P8.75 per

kilo forpalay and P12 per kilo for copra. The trial court also ordered
respondent to reimburse petitioner in the amount of P150,000
representing the administrative expenses the latter incurred as the agent.
Furthermore, petitioner was awarded P180,000 as compensation for
administering respondents properties. Lastly, petitioner was ordered to
pay respondent attorneys fees in the amount of P20,000 plus P1,000 for
every appearance of counsel.
In the Order of the RTC reversing its Decision, it found that it should
have considered the Certifications issued by the NFA and PCA with
respect to the prevailing prices of palay, corn, and copra at the time of
petitioners administration. These Certifications revealed that the
prevailing prices from 1979 to 1997 were as follows: (1) from P1.75 to P8
per kilo for palay; (2) from P1to P6 per kilo for corn; and (3) from P3.15 to
P10.77 per kilo for copra. The RTC found that the parties failed to prove
the exact quantity and quality of harvests for
_______________
43 Rollo, p. 98.
722
72
2
SUPREME COURT
REPORTS ANNOTATED
the period. Consequently, it ordered petitioner to render full, accurate,

and complete accounting of all the fruits and proceeds of the subject
properties during the period of her administration.44
The CA affirmed the RTCs original Decision and ordered petitioner to
pay respondent the amount of P1,315,533.75even though the trial court
had ordered the return of only P1,265,493.75representing the total value
of the fruits and rents derived from the properties from 1979 to 1997 less
the P150,000 administrative expenses, the P180,000 compensation for
administering the properties, and the P77,221.13 real estate taxes paid by
petitioner from 1979 to 1997.
We disagree with the appellate courts finding with respect to the total
value of fruits and rents earned by the properties from 1979 to 1997.
As found by the RTC, the following computation of the amounts owed by
petitioner to respondent was submitted by the latters attorney-in-fact,
Edgar S. Segarra:
Witness Edgar S. Segarra testified that the properties which were administered by
defendant Caridad S. Sazon consisted of residential and agricultural lands. Caridad Sazon
leased the residential lots to one Salome Segarra in the amount of 100 pesos a month since
1988. Another parcel of land was leased to defendants mother Ana Segarra in exchange for
one sack or 46 kilograms of palay for a period of 20 years. A cornland which is being
tenanted by Orlando Macalinao produced P72,000.00. The computation was based on a
75/25 sharing plan multiplied by the price of corn at 6 pesos and again multiplied by 15
years, the number of years that the properties were being tenanted. Another riceland was
tilled by the defendants husband. This 1.56 hectares Riceland produced 1,932 kilograms of
rice per year and at P8.75 a kilogram, for 14 years, the amount which was not remitted to
the plaintiff amounted to P836,670.00. Another property, located at Libon, Albay,
containing an area of .6720 hectare and tilled by defendants husband produced harvest
amounting to P121,030.00. Further, a riceland with an area
_______________
44 Id., at p. 125.
723

2012
723

of .6380 hectare being farmed by the defendants daughter produced P183,720.00. Two
coconut lands, located at Macabugos, Libon, Albay, produced coconuts made into copras,
thus bringing in profits of about P705,600.00.
The foregoing amounts correspond to the years by which the properties were
administered by the defendant, the number of crops they harvested, the sharing plan, and
the prevailing price of the produce during the years of administration. He also asked the
comprador (buyer of grains) about the prices and consulted employees of the department of
Agrarian Reform regarding the sharing of the crops. The lease contracts affecting the
properties were also considered. All these amounts were never remitted by the defendant to
the owner-plaintiff.
45
Petitioner correctly posits that it was wrong for the CA to base the
computation of unremitted fruits and rents solely on the evidence
submitted by respondents attorney-in-fact, as this computation was
obviously self-serving. Furthermore, the Certifications issued by the NFA
and PCA should have been be given weight, as they are documentary
evidence issued by government offices mainly responsible for determining
the buying/selling price ofpalay, corn, and other food and coconut products.
We shall review the findings of fact of the Court of Appeals in view of
some inconsistencies with those of the trial court and the evidence on
record.
This Court is convinced that the Certifications are genuine, authentic,
valid, and issued in the proper exercise and regular performance of the
issuing authoritys official duties. Under Section 3(m), Rule 131 of the
Revised Rules of Court, there is a legal presumption that official duty has
been regularly performed. No evidence was presented to rebut or dispute
this presumption.
_______________
45 Id., at pp. 93-94.
724
72
4
SUPREME COURT
REPORTS ANNOTATED
Petitioner claims that several of the properties did not produce any fruit
or generate any income at all.46However, the trial court found that not only
was there evidence on record showing that the properties administered
yielded agricultural produce and rents, but petitioner herself had testified
that the properties increased when she served as administrator. In effect,

she admitted that the properties indeed generated income. 47
This Court is left with no other choice but to order both parties to
present their evidence in support of their respective claims considering
that no evidence was submitted to prove the quantity and quality of
harvests for the relevant period. Neither the RTC nor the CA was able to
explain or present a breakdown to show how it arrived at the supposed
amount representing the total value of the fruits and rents derived from
the properties.
The trial court correctly ordered petitioner to render full, accurate, and
complete accounting of all the fruits and proceeds of the subject properties
during the period of her administration. However, it should have also
ordered petitioner to present all her evidence regarding the alleged
transportation expenses, attorneys fees, docket fees, and other fees; 48the
total amount expended for the purchase of respondents Las Pias
property;49 and the total amount of real property taxes paid. These claimed
expenses, if and when duly proven by sufficient evidence, should be
deducted from the total income earned by the properties.
Both parties should be required to present their evidence to finally
resolve the following issues: (1) the total amount of the income generated
by Lots I to IX during the administration of petitioner; and (2) the total
amount of expenses incurred by
_______________
46 Supra note 6.
47 Supra note 34.
48 Rollo, p. 95.
49 TSN, 21 June 2002, pp. 34-35.
725

2012
725
petitioner that should be borne by respondent as the owner of the

properties, or the total deductibles in petitioners favor.
There is no doubt that petitioner is entitled to compensation for the
services she rendered. Respondent does not deny that she never paid the
former, since they had no agreement regarding the amount, the
determination of which she left to petitioner.50
Petitioner now argues that since the expenses for the maintenance of
the properties exceeded whatever income they generated, then whatever is
left of the income should now belong to her as compensation. 51 She says
that the admission of the respondent admitted during cross-examination
that she expected petitioner to fix her own salary out of the remaining
income, if any, of the administered property is enough reason to reverse
and Decision and Resolution of the CA.52
The contention is not acceptable. Considering that neither of the parties
was able to prove how much the properties earned, this Court cannot just
agree with petitioners claim that whatever is left of this income, after the
expenses have been deducted, should be considered as her salary. To begin
with, she repeatedly claimed that all the income derived from these
properties was insufficient to cover even just the expenses; thus, there is
no remaining income left to speak of.
We have already ruled that petitioner should be compensated for the
services she rendered. Since there was no exact amount agreed upon, and
she failed to fix her own salary despite the authority given to her, the RTC
correctly applied the doctrine of quantum meruit. With respect to this
matter, the trial court found thus:
And where the payment is based on quantum meruit, the amount of recovery would only be
the reasonable value of the thing or services
_______________
50 Rollo, pp. 92-93.
51 Id., at p. 53.
52 Id.
726
72
6
SUPREME COURT
REPORTS ANNOTATED
rendered regardless of any agreement as to value. In the instant case, the amount of
P1,000.00 per month for 15 years representing defendants compensation for administering
plaintiffs properties appears to be just, reasonable and fair.
53
The doctrine of quantum meruit (as much as one deserves) prevents

undue enrichment based on the equitable postulate that it is unjust for a
person to retain benefit without paying for it. 54 Being an equitable
principle, it should only be applied if no express contract was entered into,
and no specific statutory provision is applicable. Although petitioner was
given the authority to set the amount of her salary, she failed to do so.
Thus, she should at least be given what she merits for her services. We
find no reason to reverse the finding of both the RTC and the CA that
P1,000 per month for 15 years is a just, reasonable, and fair compensation
to petitioner for administering respondents properties. The lower court is

ordered to add this amount to the deductibles that petitioner is able to
prove or, if the deductibles exceed the monetary value of the income
generated by the properties, to add this amount to whatever respondent
ends up owing petitioner.
We delete the award of moral damages and attorneys fees in the
absence of proof of bad faith and malice on the part of petitioner.
WHEREFORE, in view of the foregoing, the Petition is PARTLY
GRANTED, as follows:
Petitioner Caridad S. Sazon is ordered to TURN OVER the possession,
management, and administration of Lots I, II, III, V, and VI to
respondent Leticia Vasquez-Menancio through the latters attorneyin-fact, Edgar S. Segarra.(1)
_______________
53 Id., at p. 101.
54 See Soler v. Court of Appeals, 410 Phil. 264, 273; 358 SCRA 57, 64 (2001).
727

2012
727
Respondent is ordered to TURN OVER the possession, management,

and administration of one-third of Lot IV to petitioner.(2)
The case is REMANDED to the Regional Trial Court of Ligao City,
Albay, the court of origin, which is ordered to do the following:(3)
ORDER petitioner to render full, accurate, and complete

accounting of all the fruits and proceeds earned by respondents
properties during petitioners administration thereof;(a)
ORDER petitioner to submit a detailed list with a breakdown of
all her claimed expenses, including but not limited to the
following: maintenance expenses including transportation
expenses, legal expenses, attorneys fees, docket fees, etc; the
total amount expended for the purchase of respondents Las
Pias property;(b)55and the total amount of real property
taxes paid, all for the period 1979 to 1997;
ORDER the parties to submit their evidence to prove the exact
quantity and quality of the harvests or the fruits produced by
the properties and all the expenses incurred in maintaining
them from 1979 to 1997;(c)
DETERMINE the total amount earned by the properties by using
as basis the declaration of the National Food Authority and the
Philippine Coconut Authority with respect to the prevailing
prices of(d) palay, corn, and copra for the period 1979 to 1997;
and
SUBTRACT from the determined total amount the expenses
proven by petitioner and the(e)
_______________
55 Supra note 48.
728
72
8
SUPREME COURT
REPORTS ANNOTATED
P180,000 serving as her compensation for administering the

properties from 1979 to 1997.
COSTS against petitioner.
SO ORDERED.
Carpio (Chairperson), Villarama, Jr.,** Perez andReyes, JJ., concur.
Petition partly granted.
Notes.There is unjust enrichment when a person unjustly retains a
benefit to the loss of another, or when a person retains the money or
property of another against the fundamental principles of justice, equity
and good conscience. (Yap vs. Commission on Audit, 619 SCRA 154 [2010])
Quantum meruit means that in an action for work and labor, payment
shall be made in such amount as the plaintiff reasonably deserves. (Heirs
of Ramon C. Gaite vs. The Plaza, Inc., 640 SCRA 576 [2011])
o0o
_______________
** Designated as Acting Member of the Second Division vice Associate Justice Arturo D. Brion per
Special Order No. 1195 dated 15 February 2012.
February 22, 2012.G.R. No. 172448.*
THE BOARD OF REGENTS OF THE MINDANAO STATE UNIVERSITY

represented by its Chairman, petitioner, vs. ABEDIN LIMPAO OSOP,
respondent.
Remedial Law; Civil Procedure; Intervention; Jurisprudence describes intervention as
a remedy by which a third party, not originally impleaded in the proceedings, becomes a
litigant therein to enable him, her or it to protect or preserve a right or interest which may be
affected by such proceedings.Jurisprudence describes intervention as a remedy by which
a third party, not originally impleaded in the proceedings, becomes a litigant therein to
enable him, her or it to protect or preserve a right or interest which may be affected by such
proceedings. The right to intervene is not an absolute right; it may only be permitted by
the court when the movant establishes facts which satisfy the requirements of the law
authorizing it. While undoubtedly, MSU has a legal interest in the outcome of the case, it
may not avail itself of the remedy of intervention in CA-G.R. SP No. 82052 simply because
MSU is not a third party in the proceedings herein.
PETITION for review on certiorari of a decision of the Court of Appeals.

The Solicitor General for petitioner.
_______________
* FIRST DIVISION.
468
468
SUPREME COURT
REPORTS ANNOTATED
The Board of Regents of the

Mindanao State University vs.
Osop
Acharon, Alconera, Merced and Associates for respondent.

LEONARDO-DE CASTRO,J.:
This Petition for Review under Rule 45 of the Rules of Court assails the
Decision1dated March 14, 2006 of the Court of Appeals in CA-G.R. SP No.
82052. The Court of Appeals dismissed the Petition for Certiorari filed by
therein petitioner Dr. Macapado A. Muslim (Muslim) and declared the
Motion for Intervention of the Board of Regents of the Mindanao State
University (MSU) as a stray pleading proscribed by Rule 19, Section 2 of
the Rules of Court.
The instant controversy arose from the following factual background:
Herein respondent Abedin Limpao Osop (Osop) is the former Chancellor
of the Mindanao State University-General Santos City (MSU-GSC)
campus. Osop retired in 1987 under the Early Retirement Law, but several
years after his retirement, he was appointed by Moner M. Bajunaid, then
MSU-GSC Chancellor, as a substitute for another professor of the
Electrical Engineering Department, College of Engineering, of MSU-GSC,
who was on study leave. Osops appointment took effect on July 1, 1994.2
In 1997, Muslim, the succeeding Chancellor of MSU-GSC, renewed
Osops appointment as Assistant Professor IV, effective January 1, 1997
until December 31, 1997. His appointment was duly noted by the MSU
Board of Regents during its 166th Meeting held at DECS Conference
Room, U.L. Complex, Meralco Avenue, Pasig City, on February 19, 1997. 3
_______________
1 Rollo, pp. 54-65; penned by Associate Justice Rodrigo F. Lim, Jr. with Associate Justices Teresita DyLiacco Flores and Ramon R. Garcia, concurring.
2 Records, Vol. 1, p. 49.

3 Id., at pp. 21-56.
469

2012
469

Osop
Muslim allowed Osop to continue teaching at MSU-GSC even after

December 31, 1997. On April 17, 1998, Muslim issued Special Order No.
144-98C designating Osop as Chairperson of the Electrical Engineering
Department, College of Engineering, of MSU-GSC, with a term of office
from April 18, 1998 to April 17, 1999, unless revoked or amended by
competent authority.4
However, on July 15, 1998, Muslim caused to be served upon the College
of Engineering and other offices of MSU-GSC a letter 5dated July 14, 1998
addressed to Osop that reads in full:
Dear Prof. Osop:
In view of the return to the campus of Prof. Danilo Dadula for whom you have been
serving as substitute since July 1, 1994, and considering the expiration of your temporary
appointment last December 31, 1997, I regret to inform you that your services with the
university will have to end. And since I am not renewing your appointment, you are hereby
advised to cease from reporting to duty effective immediately. Moreover, you should clear
yourself from monetary and other official accountabilities with the university.
On behalf of MSU-GSC, we thank you for your services.
Very truly yours,
(signed)
MACAPADO
A.
MUSLIM,
Ph.
D.
Chancellor
Muslim also issued Memorandum Order No. 010-98C6 dated July 14,
1998, addressed to Virgilio Ramos (Ramos), Dean of the College of
Engineering of MSU-GSC, concerning the expiration and non-renewal of
Osops appointment and directing Ramos to already distribute Osops
teaching load to
_______________
4 Id., at p. 56.
5 Id., at p. 61.
6 Id., at p. 62.
470
470
SUPREME COURT
REPORTS ANNOTATED

Osop
the remaining faculty members of the College. In the same Memorandum

Order, Muslim asked Ramos to explain the latters failure to include Osop
in the list of substitute faculty members which he submitted to the Office
of the Chancellor before the start of the 1st semester of 1998.
In compliance with Memorandum Order No. 010-98C, Ramos explained
in his letter dated July 16, 1998 that there was no request for the
appointment of a substitute for Prof. Danilo Dadula (Dadula) when the

latter went on a study leave. He explained:
Basing on our records, there was no request for substitute of Engr. Danilo P. Dadula
when he went on study leave in June 1994.
On 17 June 1994, Engr. Noel S. Gunay, then the Chairman of the Electrical Engineering
Department, recommended the hiring of Prof. Abedin Limpao Osop in view of the study
leave of Julito G. Fuerzas, PEE. Chancellor Moner M. Bajunaid, in his letter dated 30 June
1994, informed Dean Carlos B. Cuanan of the approval of the higher management to hire
Prof. Abedin Limpao Osop as substitute of Engr. Julito G. Fuerzas effective 1 July 1994.
After more than a semester, Engr. Fuerzas stopped schooling but did not return to this
campus. Since then, Prof. Abedin Limpao Osop went on teaching with the College of
Engineering and his appointment was renewable yearly as those on probationary status.
Per DBM Plantilla of Personnel, page 336 of 444 pages, Prof. Abedin Limpao Osop has
an item. For this, I presumed Prof. A.L. Osop was not a contractual or substitute faculty of
the college.
xxxx
Regarding the distribution of Prof. A. L. Osops teaching load to appropriate faculty
members at this time poses some problems. He is handling major courses in electrical
engineering and the electrical engineers have excessive overload.
xxxx
It has been noted and experienced that real excessive overload is more on the number of
preparations than on overload teaching units. For the interest of our students and with
much concern on the efficient delivery of instruction, the faculty of the Electrical Engineering
Department could not absorb the load of Prof. A. L. Osop. Since his
471

2012
471

Osop
load are major EE courses, the same could not be handled by any of the faculty in the other
departments.
In view thereof, may we request for the reconsideration of your decision to terminate the
services of Prof. Abedin Limpao Osop.
Muslim responded by issuing handwritten Memorandum Order No. 01298C8 dated July 17, 1998, in which he reiterated his earlier order to Ramos
to already distribute Osops teaching load.
On July 21, 1998, Osop filed before the Regional Trial Court (RTC) of
General Santos City, Branch 22, a Complaint for Injunction with Prayer
for Writ of Preliminary Injunction/Temporary Restraining Order (TRO),
Damages and Attorneys Fees against Muslim and Ramos. The Complaint
was docketed as Civil Case No. 6381.9
Osop filed two days later, on July 23, 1998, an Urgent Motion for Writ of
Preliminary Mandatory Injunction and/or Temporary Restraining Order.
At the hearing held the very next day, on July 24, 1998, the RTC issued an
Order in which it noted the absence of Muslim, and to give chance for the
possibility of an amicable settlement, it reset the hearing for the issuance
of a TRO to July 27, 1998. Nevertheless, in the same Order, the RTC
already directed Osop to submit a bond of P20,000.00 to answer for
damages that Muslim and Ramos might suffer if it turns out that Osop
was not entitled to an injunction/TRO. Osop filed his injunction/TRO bond
on July 27, 1998.
At the hearing of Osops application for the issuance of a TRO on July
27, 1998, the RTC issued an Order, 10whereby, in consideration of the
principle of exhaustion of administrative remedies, it suggested that Osop

first write Muslim to seek
_______________
7 Id., at pp. 64-65.
8 Id., at p. 63.
9 Id., at pp. 5-14.
10 Id., at p. 110.
472
472
SUPREME COURT
REPORTS ANNOTATED

Osop
reconsideration of Muslims letter and Memorandum Order No. 010-98C

both dated July 14, 1998. Osop accordingly wrote Muslim such a letter
dated July 27, 1998.11
Muslim endorsed Osops letter dated July 27, 1998 to Emily
Marohombsar (Marohombsar), then MSU President. In a letter 12 dated
August 7, 1998, Marohombsar wrote:
Based on the meticulous study made, the management is not legally nor morally under
obligation to retain Prof. Osop in the service or liable for the non-renewal of his
appointment the nature of which was temporary and contingent on the return of Prof.
Danilo Dadula. With the return of Prof. Dadula, the renewal of the appointment of Prof.
Osop would have been an unjustifiable superfluity.
This Office, concurring with the opinion of Director Imam, upholds your position on the
case of Prof. Osop.
Marohombsars aforequoted decision was based on the Brief from the

MSU Human Resources Development Office dated August 6, 1998, signed
by Director Lomala O. Imam, stating that [t]he issue is not one of
termination or dismissal but an expiration of an appointment which is not
permanent in nature and that [t]he renewal or non-renewal of a
temporary or probationary appointment is a management prerogative. 13
On August 6, 1998, Muslim and Ramos filed before the RTC a Motion to
Dismiss Civil Case No. 6381 citing the following grounds: (1) lack of cause
of action due to non-exhaustion of administrative remedies and noninclusion of indispensable parties; (2) appointment in a temporary
character; (3) presumption of regularity; and (4) forum shopping.14
_______________
11 Id., at p. 119.
12 Rollo, p. 81.
13 Id., at p. 82.
14 Records, Vol. I, p. 201.
473

2012
473

Osop
The RTC issued an Omnibus Order on September 10, 1998, dismissing

Civil Case No. 6381, for the following reasons:
The complaint is essentially one for illegal dismissal filed by [herein respondent] Abedin
Limpao Osop, a faculty member of the Mindanao State University (MSU), against
defendant Macapagal A. Muslim, Chancellor of the MSU, and Virgilio Ramos, Dean of the
College of Engineering of the same university. A party aggrieved by a decision, ruling, order
or action of an agency of the government involving termination of services may appeal to
the Civil Service Commission. Regional Trial Courts have no jurisdiction to entertain cases
involving dismissal of officers and employees covered by the Civil Service Law. (Mateo v.
C.A., 247 SCRA 284). The Civil Service Commission is the sole arbiter of all controversies
pertaining to the Civil Service. (Dario v. Mison, 176 SCRA 84).
15
Thus, the RTC decreed:

WHEREFORE, in view of the foregoing, the instant complaint is hereby DISMISSED
for lack of jurisdiction. Accordingly, [Osops] application for preliminary injunction, being
merely ancillary to the principal action is also hereby dismissed without prejudice. The
injunction bond is cancelled ipso facto.
16
he RTC denied Osops Motion for Reconsideration in an Order 17 dated

September 25, 1998, prompting him to file with the Court of Appeals a
Petition for Certiorari andMandamus,18 under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 49966, in which he argued,inter alia,
that:
The issue of removal from office of [Osop], who is faculty member of a state university, is
beyond the jurisdiction of the Civil Service Commission;2)
xxxx
_______________
15 Id., at p. 264.
16 Id., at p. 265.
17 Id., at pp. 343-344.
18 Id., at pp. 347-370.

474
474
SUPREME COURT
REPORTS ANNOTATED

Osop
In Civil Case No. 6381 [Osop] is suing [Muslim and Ramos] also for damages, a subject
matter that is beyond the jurisdiction of the Civil Service Commission.4)
19
In the meantime, concerned students of MSU-GSC filed before the Civil

Service Commission (CSC) Regional Office No. 11 a Complaint for the
illegal termination of Osop by Muslim. CSC Regional Office No. 11 issued
an Order dated November 27, 1998 finding that Osops termination was in
order given that his appointment as a substitute was good only until the
return of the person being substituted.20
Eventually, on June 7, 1999, the Court of Appeals rendered a
Decision21 in CA-G.R. SP No. 49966, granting Osops Petition for Certiorari,
based on the following ratiocination:
Anent the order of the Civil Service Commission Regional Office dated November 27,
1998 holding the termination of [Osop] as legal, we agree with [Osop] that this finding
should not be legally binding upon him because he is not a party to the complaint
apparently initiated by alleged concerned students of MSU-GSC.
Secondly, [Osops] side of the issue was never heard because only Muslim was allowed to
adduce evidence hence a denial of due process on the part of [Osop].
Coming now to the issue of whether or not [Osops] complaint was correctly dismissed by
the trial court for having failed to exhaust administrative remedies and that consequently
this case falls with the Civil Service Commission, we answer in the negative.
[Osop] cites Sections 4, 5 and 6(e)(h) of the MSU charter R.A. 1387 as amended by R.A.
Nos. 1893, 3791, 3868, to wit:
The government of said University is vested in a board of regents to be known as
the Board of Regents of the Mindanao State University. (R.A. 1893)4.Sec.
_______________
19 Id., at pp. 356-357.
20 Id., at pp. 418-420.
21 Id., at pp. 426-434.
475

2012
475

Osop
The Mindanao State University shall have the general powers set out in Section
thirteen of Act Numbered Fourteen hundred and fifty-nine and the administration of
said university and the exercise of its corporate powers are hereby vested exclusively
in the Board of Regents and in the President of the University, insofar as authorized
by said Board.5.Sec.
The Board of Regents shall have the following powers of administration and the
exercise of the powers of the corporation.6.Sec.
xxxx
To appoint, on the recommendation of the President of the University, professors,
instructors, lecturers, and other employees of the University; to fix their
compensation, hours of service, and such other duties and conditions as it may deem
proper; to grant to them in its discretion leave of absence under such regulations as
it may promulgate, any provisions of law to the contrary notwithstanding, and to

remove them for cause after an investigation and hearing shall have been had; and to
extend with their consent the tenure of faculty members of the University beyond the
age of sixty-five, any other provision of law to the contrary notwithstanding, on
recommendation of the President of the University, whenever in his opinion their
services are specially needed; Provided, however, that no extension of service shall be
made beyond the age of seventy.(e)
xxxx
To prescribe rules for its own government, and to enact for the government of the
University such general ordinances and regulations, not contrary to law, as are
consistent with the purposes of the University as defined in Section 2 of this Act.
(h)
Moreover, Article 152 of the Code of MSU provides:
152.Art.Terms and Conditions of Appointment.The precise terms and
conditions of every appointment shall be stated in writing. In case of a non-renewal
of a probationary appointment the person so concerned shall be so informed in
writing at least sixty days before the termination date.476
476
SUPREME COURT
REPORTS ANNOTATED

Osop
Proceeding from all the foregoing, it appears clearly that the authority to remove is
vested in the Board of Regents and only after an investigation and hearing.
Due process was clearly not observed in the removal of [Osop]. First of all, only the Board
of Regents have the power of removal which must be for cause and after an investigation
and hearing shall have been had. Secondly, even a mere probationary appointment requires
that in case of non-renewal the person so concerned shall be informed in writing at least
sixty (60) days before termination date. These basic requisites were not at all observed in
the termination of [Osop].
Therefore, we agree with [Osop] that his non-referral of the matter of his removal to the
Board of Regents before he resorted to court action is accepted as an exception to the
doctrine of exhaustion of administrative remedies.
The doctrine of exhaustion of administrative remedies admits of several exception[s], to
wit:
When there is a violation of due process.1.
xxxx
On another point, the two grounds relied upon by Muslim for terminating [Osop] to wit:
(1) that Prof. Danilo Dadula for whom [Osop] has been serving as substitute since July 1,
1997 had already returned to MSU, and: (2) [Osops] temporary appointment expired on
December 31, 1997, clearly appears to be without basis.
[Osop] contends and respondent Muslim does not deny that the notation vice Danilo
Dadula on study grant contained in [Osops] appointment is erroneous because [Osop] was
recruited as a substitute for Engineer Julito Fuerzas.
Assuming that [Osop] merely substituted for Dadula, [Muslim] does not deny that Danilo
Dadula returned to MSU General Santos from his study grant in June 1996 and has taught
in the Department of Mechanical Engineering of the College of Engineering since then up
to April 1998. During the said period, [Osop] was also teaching in the said University and
before the letter of July 15, 1998 advising [Osop] of his termination, he was teaching at the
same time as Dadula for which he was never asked to leave contrary to Muslims claim that
[Osop] merely acted as a substitute of Dadula. Meanwhile Dadula has filed a leave of
absence and has not reported for duty for
477

2012
477

Osop
the first semester of SY 1998-1999. To repeat, from June 1996 up to April 1998, Dadula and
[Osop] taught together in the College of Engineering of MSU. Hence, if [Osop] was merely a
substitute for Dadula, he should have been required to leave as early as June 1996, upon
Dadulas return.
Further, contradicting Muslims claim that [Osop] is a mere substitute of Dadula on
April 17, 1998, Muslim issued Special Order 144-98C designating [Osop] as Chairperson of
the Electrical Engineering Department of the College of Engineering with a term of office
from April 18, 1998 up to April 17, 1999. Clearly, therefore, when [Osop] continued teaching
up to July 15, 1998 and even his appointment as Chairperson of the Electrical Engineering
Department until April 17, 1999 by Muslim himself, his appointment has ceased to be
probationary in character.
22
In the end, the Court of Appeals decreed:

WHEREFORE, premises considered, the petition forcertiorari is GRANTED. The
Omnibus Order of the RTC of General Santos City, Branch 22 dated September 10, 1998 is
hereby SET ASIDE. The RTC is directed to hear and try Civil Case No. 6381 with utmost
dispatch.
23
The Motion for Reconsideration of Muslim and Ramos was denied by the
Court of Appeal in its Resolution dated November 11, 1999.24
Muslim then appealed the foregoing judgment of the Court of Appeals in
CA-G.R. SP No. 49966 by way of a Petition for Review before this Court,
docketed as G.R. No. 141276. However, in a Resolution dated July 3, 2000,
the Court denied Muslims Petition for Review; and in a Resolution dated
April 4, 2001, the Court likewise denied Muslims Motion for
Reconsideration.25
_______________
22 Id., at pp. 429-434.
23 Id., at p. 434.
24 Id., at p. 478.
25 Id., at p. 507.
478
478
SUPREME COURT
REPORTS ANNOTATED

Osop
On June 26, 2001, Osop filed an Amended Complaint 26 before the RTC
impleading MSU as a defendant in Civil Case No. 6381. Despite the
opposition of Muslim and Ramos, the RTC admitted the Amended
Complaint in its Order27dated July 11, 2001, which reads:
Considering that no responsive pleading has yet been filed by [Muslim and Ramos], the
amended complaint is hereby ADMITTED.
WHEREFORE, the defendants Macapado Muslim and Virgilio Ramos are ordered to file
their answers within ten (10) days from today, and as prayed for by the counsel of [Osop],
issue the corresponding summons to newly impleaded defendant Mindanao State University
(MSU) at its main office in Marawi City. The summons to defendant MSU, Marawi City
shall be sent via registered mail to the Clerk of Court of Marawi City who is requested to
serve the same and thereafter to make a return to this court.
The Solicitor General is hereby ordered to enter his appearance as counsel for defendant
Macapado A. Muslim and Virgilio Ramos, who were both sued in their official and personal
capacities and defendant MSU.
Muslim and Ramos, through counsel, Atty. Emmanuel C. Fontanilla,

filed their Answer to Amended Complaint on July 20, 2001.28
On July 27, 2001, RTC Clerk of Court Asuncion de Leon Omila served
summons upon MSU at its main campus in Marawi City which required
the university to enter its appearance in Civil Case No. 6381 and to
answer Osops Amended Complaint within 15 days after service of said
summons.29
The Office of the Solicitor General (OSG) entered its appearance before
the RTC in Civil Case No. 6381 on September 14, 2001 as counsel for
Muslim, Ramos, and MSU (Muslim, et
_______________
26 Id., at pp. 508-517.
27 Id., at p. 589.
28 Id., at pp. 632-642.
29 Id., at p. 660.
479

2012
479

Osop
al.). The OSG requested that it be furnished with a copy of the Amended
Complaint and that the period to file the answer be suspended until
receipt of said Amended Complaint.30In its Order31 dated September 26,
2001, the RTC granted the OSG a period of 15 days from receipt of a copy
of the Amended Complaint from Osop within which to file a responsive
pleading.
For failure of MSU to file an answer to the Amended Complaint within

the given period, Osop filed a Motion to Declare Defendant MSU in
Default.32 Osops Motion was denied by the RTC in its Order33 dated
February 1, 2002 since there was no proof as to when the OSG received a
copy of the Amended Complaint from Osop.
The OSG filed a Manifestation on February 14, 2002 which stated that
upon verification with its Record Section, it discovered that Atty.
Fontanilla, counsel for Muslim and Ramos, was actually deputized by the
OSG to handle Civil Case No. 6381; and that MSU is adopting the Answer
to the Amended Complaint already filed by Ramos and Muslim, as all the
defendants in said case were in the same position.34
Osop filed a Motion for Reconsideration of the RTC Order dated
February 1, 2002 denying his Motion to Declare Defendant MSU in
Default. In another Order35dated June 21, 2002, the RTC denied Osops
Motion for Reconsideration for being moot and academic in light of the
Manifestation of the OSG that MSU was adopting the Answer to the
Amended Complaint of Muslim and Ramos.
_______________
30 Id., at pp. 664-668.
31 Id., at p. 670.
32 Id., at p. 751.
33 Records, Vol. II, p. 23.
34 Id., at pp. 46-48.
35 Id., at p. 101.
480
480
SUPREME COURT
REPORTS ANNOTATED

Osop
Meanwhile, Osop filed on January 11, 2002 a Motion for Summary

Judgment36 in Civil Case No. 6381, to which Muslim and Ramos filed on
January 16, 2002 an Opposition.37
In an Order38 dated October 21, 2002, Judge Antonio Lubao of RTCBranch 22 voluntarily inhibited himself from further hearing Civil Case
No. 6381 to avoid conflict of interest considering that he was a faculty
member at the MSU College of Law. Thus, the case was re-raffled to RTCBranch 37, presided over by Judge Eddie R. Rojas.
After an exchange of pleadings among the parties, the RTC issued an
Order39dated March 20, 2003, which granted Osops Motion for Summary
Judgment in Civil Case No. 6381 pursuant to Rule 35, Section 1 of the
Rules of Court. The RTC explicated that:
The law itself determines when a summary judgment is proper. Under the rules,
summary judgment is appropriate when there are no genuine issues of fact which call for
the presentation of evidence in a full-blown trial. Even if on their face the pleading appear
to raise issues, when the affidavits, depositions and admissions show that such issues are
not genuine, then summary judgment as prescribed by the rules must ensure as a matter of
law. What is crucial for determination, therefore, is the presence of a genuine issue as to
any material fact.
A genuine issue is an issue of fact which require (sic) the presentation of evidence as
distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded
appear uncontested or undisputed, then there is no real or genuine issue or question as to
the facts, and summary judgment is called for. The party who moves for summary judgment
has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the
issue posed in the complaint is patently unsubstantial so as not to constitute a genuine

issue of trial.
_______________
36 Records, Vol. I, pp. 759-782.
37 Records, Vol. II, pp. 1-7.
38 Id., at pp. 111-112.
39 Id., at pp. 121-123.
481

2012
481

Osop
Applying these (sic) principle to the present case, it can be said that [Osop] has clearly
demonstrate (sic) the absence of any genuine issue of fact, as well as the issue posed by
[Muslim, et al.] that [Osop] is a contractual employee is patently unsubstantial so as not to
constitute a genuine issue for a full-blown trial.
From the decision rendered by the Seventeenth Division Court of Appeals concerning the
petition for Certiorari and Mandamus filed by [Osop], in this case it ruled that the
appointment of [Osop] by [Muslim] ceases to be probationary in character when the former
was allowed to continue teaching up to July 15, 1998 (sic) and even appointed as
Chairperson of the Electrical Engineering Department. The issue raised by [Muslim, et al.]
in their answer that [Osop] is a contractual employee is indeed patently unsubstantial as to
constitute a genuine issue in this case for trial. Once and for all, such an issue has already
been settled by the honorable Court of Appeals whose decision has become final and
executory. Thus, there was no more genuine issue that was left to be tried except the
amount of damages and attorneys fees.
xxxx
After having been taken into account the foregoing premises and pleadings of the parties
in support of their respective stand on the matter under consideration as well as from the
implied admissions arising from the failure of [Muslim, et al.] to set forth reasons why
[they] could not truthfully either admit or deny those matters alleged in the amended
complaint, and having concluded from the attendant circumstances that [Osop] is entitled
to judgment as a matter of law for such amount as may be found to be due him in damages.
Consequently, the RTC disposed:

WHEREFORE, a summary judgment is hereby rendered in favor of [Osop] by ordering
[Muslim and Ramos] or their successors, and defendant Mindanao State University to give
teaching loads to [Osop] and to pay such amount as may be found to be due him in
damages.482
482
SUPREME COURT
REPORTS ANNOTATED

Osop
For the meantime, let this case be called for trial to resolve the sole issue of damages
that may be awarded in favor of [Osop] on May 30, 2003, at 2:00 oclock in the afternoon.
40
Muslim, et al. filed a Motion for Reconsideration of the aforementioned

Order on April 1, 2003, which Osop opposed.
Osop, for his part, filed a Motion for Execution Pending Appeal, and
Muslim, et al. filed a Comment thereon.
In an Order41 dated August 21, 2003, the RTC denied the Motion for
Reconsideration of the Order dated March 20, 2003 filed by Muslim, et al.,
thus:
In resolving [Muslim, et al.s] Motion for Reconsideration, the Court casts doubt on the
veracity of [Muslim, et al.s] claim that the findings of the Court of Appeals as to the
appointment of [Osop] was a mere opinion and that there could be no final determination on
the matters not principally raised before it. It was emphasized in the ruling of the
Honorable Supreme Court in the case of Padua vs. Robles, G.R. No. 127930, December 15,
2000, which lays down the rules in construing judgments. It was held that the sufficiency
and efficacy of a judgment must be tested by its substance rather than its form. In
construing a judgment, its legal effects including such effects that necessarily follows
because of legal implications, rather than the language used, govern. Also, its meaning,
operations, and consequences must be ascertained like any other written instrument. If the
record shows that the judgment could not have been rendered without deciding the
particular matter, it will be considered as having settled that matter as to all future actions
between the parties, and if a judgment necessarily presupposes certain premises, they are
as conclusive as the judgment itself. Reasons for the rule are that a judgment is an
adjudication on all the matters which are essential to support it, and that every proposition
assumed or decided by the court leading up to the final conclusions and upon which such
conclusion is based is as effectually passed upon as the ultimate question which is solved.
Thus a judgment rest on the intent of the court
_______________
40 Id., at p. 123.
41 Id., at pp. 241-243.
483

2012
483

Osop
as gathered from every part thereof, including the situation to which it applies and
attendant circumstances.
[Muslim, et al.] lost sight of the fact that the court gave due course to [Osops] Motion for
Summary Judgment only after finding that the issue raised by them in their answer was
patently unsubstantial as to constitute a genuine issue. Inasmuch as [Muslim, et al.] failed
to show a plausible ground of defense something fairly arguable and of substantial
character, they cannot therefore further insist that they have a genuine issue to warrant
this Court to hear and try the above-entitled case.
Hence, in the present recourse, [Muslim, et al.s] Motion for Reconsideration is hereby
denied due course for bereft of any merit.
In the same Order, the RTC granted Osops Motion for Execution
Pending Appeal, to wit:
Anent [Osops] Motion for Execution Pending Appeal, it alleged that [Osop] has been
unemployed for almost five (5) years and if [Muslim, et al.s] appeal on the resolution of this
Court, it will be just for the purpose of delaying the termination of the case and to cause
further misery to [Osop].
Section 2, Rule 39 of the 1997 Rules of Civil Procedure, lays down the rule for execution
pending appeal, categorized as discretionary execution. It is evident from the said provision
that a primary consideration for allowing execution pending appeal would be the existence
of good reasons. In turn, good reasons has been held to consist of compelling
circumstances justifying the immediate execution lest judgment becomes illusory. Such
reason must constitute superior circumstances demanding urgency which will outweigh the
injury or damages should the losing party secure a reversal of the resolution issued by this
Court.
After weighing the reasons presented, the Court deemed it wise to give due course to
[Osops] Motion for Execution Pending Appeal. The effective and efficient administration of
justice requires that the prevailing party should not be deprived of the fruits of the verdict
rendered in his favor. The system of judicial review should not be misused and abused to
evade the decision/order from attaining finality.484
484
SUPREME COURT
REPORTS ANNOTATED

Osop
With the foregoing reasons, [Osops] Motion for Execution Pending Appeal is hereby
given due course, but insofar as to the giving of teaching loads to [Osop] only inasmuch as
no amount of damages could be ascertained at this moment.
Let therefore a Writ of Execution Pending Appeal be issued in this case directing
[Muslim and Ramos] or their successors and defendant Mindanao State University to give
teaching loads to [Osop] with a bond fix at Five Thousand (P5,000.00) Pesos.
42
Muslim, et al., filed a Motion for Reconsideration 43of the Order dated
August 21, 2003, which Osop again opposed.44
On October 1, 2003, Osop filed a Motion for Partial Execution (Based on
a Final Executory Judgment) praying that a writ of execution be issued
ordering Muslim, et al. to give him teaching loads.45
Two days after, on October 3, 2003, Muslim, et al. filed a Second Motion
for Reconsideration and Supplement to the Opposition (also Reply to
Motion for Partial Execution).46
In an Order47 dated October 9, 2003 the RTC denied Muslim, et al.s
Second Motion for Reconsideration and Supplement to the Opposition (also
Reply to Motion for Partial Execution) for being a pro forma motion.
Subsequently, the RTC issued an Order 48 dated November 10, 2003
granting Osops Motion for Partial Execution and ordering the issuance of
a writ for the partial execution of the Order dated March 20, 2003,
particularly, for its directive that Muslim, et al. give Osop teaching load.
_______________
42 Id., at pp. 242-243.
43 Id., at pp. 263-266.

44 Id., at pp. 280-281.
45 Id., at pp. 290-291.
46 Id., at pp. 309-314.
47 Id., at p. 328.
48 Id., at pp. 366-372.
485

2012
485

Osop
RTC Clerk of Court Fulgar issued the Writ of Execution 49 the next day,
November 11, 2003. As shown in the Sheriffs Return 50 dated November 17,
2003, original copies of RTC Order dated November 10, 2003 and Writ of
Execution dated November 11, 2003 were duly served upon Muslim, et
al. on November 12, 2003.
Aggrieved, Muslim, in his personal capacity,51 filed on January 12, 2004,
with the Court of Appeals, a Petition for Certiorari and Prohibition with
Prayer for a Writ of Preliminary and Instant Issuance of Temporary
Restraining Order, which was docketed as CA-G.R. SP No. 82052.52Muslim
averred that in issuing the Order dated November 10, 2003, the RTC
committed grave abuse of discretion amounting to lack or excess of
jurisdiction as it:
Consider[ed] the Decision of the Court of Appeals in a1.Certiorari as a

judgment on the merit.
Plac[ed] the action in the lower court within the purview of summary
procedure.2.
Grant[ed] partial execution.3.
Consider[ed] the order of finding no genuine issue as a final order.4.53
After the parties filed their respective Memorandum, the Court of

Appeals issued a Resolution dated October 6, 2004 considering the case
submitted for decision.54
On January 14, 2005, MSU, through the OSG, filed before the Court of
Appeals a Motion to Intervene (with Motion to
_______________
49 Id., at pp. 382-383.
50 Id., at p. 384.
51 In the Amended Complaint, Muslim was sued not only in his official capacity but also in his
personal capacity.
53 Id., at p. 430.
54 Id., at p. 669.
486
486
SUPREME COURT
REPORTS ANNOTATED

Osop
Admit Memorandum) in CA-G.R. SP No. 82052.55 Osop opposed the

intervention of MSU.56
The Court of Appeals rendered its Decision in CA-G.R. SP No. 82052 on
March 14, 2006, dismissing Muslims Petition forCertiorari and
Prohibition.57It held that:
In the instant case, it is indubitably shown that the main issue that needs to be
resolved is whether or not [Osop] was a probationary employee. In CA-G.R. SP No. 49966,
the appellate court, despite the fact that the issue brought therein was whether or not
public respondent gravely abused his discretion in dismissing the case for lack of
jurisdiction, nevertheless ruled that the appointment of [Osop] ceased to be probationary in
character. Respondent judge merely took judicial notice of the appellate courts findings that
[Osop] had indeed ceased to be a probationary employee. To Our assessment, what
respondent judge may have had on his mind was that even if he decided otherwise, the case
would still be appealed to the Court of Appeals which, as adverted to, already made a
finding that [Osop] was a permanent employee. Moreover, the appellate courts decision was
also binding between the parties; it was deemed to be the law of the case, hence, it was
only proper for public respondent to conform to this Courts decision.
xxxx
A trial court which has jurisdiction over the person and subject matter of the case, can
grant a motion for summary judgment, and such is within its power or authority in law to
perform. Its propriety rests on its sound exercise of discretion and judgment. In the event
that it errs in finding that there is no genuine issue to thus call for the rendition of a
summary judgment, the resulting decision may not be set aside either directly or indirectly
by petition for certiorari, but may only be corrected on appeal or other direct review. The
court a quocategorically stated that its March 20, 2003 [Order] had become final and
executory as quoted hereunder:
A review of the records of the case will show that the [Muslim, et al.] received the
Order dated [20] March 2003,
_______________
55 Id., at pp. 681-718.
56 Id., at pp. 944-946.
57 Muslims Motion for Reconsideration is still pending in court.
487

2012
487

Osop
granting the summary judgment, on March 25, 2003. On that date, the fifteen (15)
days prescriptive period within which to file an appeal began to run. Instead of
preparing an appeal, [Muslim, et al.] filed their Motion for Reconsideration on April
1, 2003. The filing of the said Motion interrupted the reglementary period to appeal.
By that time, however, eight (8) days had already lapsed; thus, from their receipt of
the Order dated August 21, 2003, denying their Motion for Reconsideration, on
September 2, 2003, they had only seven (7) days left or until September 9, 2003
within which to file a notice of appeal. However, on said date, [Muslim, et al.] filed
another Motion for Reconsideration praying that the order for execution pending
appeal be recalled. On October 9, 2003, an Order had been issued denying
[Muslim, et al.s] Motion for Reconsideration, copy of which was received by
[Muslim, et al.] on that same day.
Again, carefully going over the records, the Court finds that the Orders issued
were already final and executory. [Muslim, et al.] received the Order granting the
summary judgment of [Osop] dated March 20, 2003. Hence, they had until
September 9, 2003 within which to file its appeal. [Muslim, et al.] filed a Motion for
Reconsideration and the Court on its Order dated August 21, 2003 denied the same.
[Muslim, et al.] received a copy of the denial of its Motion for Reconsideration, which
was considered pro-forma, was likewise denied on October 9, 2003, [Muslim,et al.]
received copy of the order of denial on that very same day. Such second motion for
reconsideration filed by [Muslim, et al.], being a pro-forma, does (sic) not toll the
running of the period to perfect an appeal or any remedy provided by law. Thus, it
can be concluded that the subject orders issued by this Court are now final and
executory. Now, once a judgment attains finality it becomes the ministerial duty of
the trial court to order its execution.
Indeed, it bears stressing that the right to appeal is not a natural right or a part of due
process. It is a procedural remedy of statutory origin and, as such, may be exercised only in
the manner and within the time frame provided by the provisions of law authorizing its
exercise. Failure of a party to perfect an appeal within the period fixed by law renders the
decision sought to be appealed final and executory. After a decision is declared final and
executory,
488
488
SUPREME COURT
REPORTS ANNOTATED

Osop
vested rights are acquired by the winning party who has the right to enjoy the finality of the
case.
To determine whether a judgment or order is final or interlocutory, the test is: Does it
leave something to be done in the trial court with respect to the merits of the case ? If it does,
it is interlocutory, if it does not, it is final. A final judgment is one that disposes of a case in
a manner that leaves nothing more to be done by the court in respect thereto. A summary
judgment is one which is final as it already adjudicated the issues and determined the
rights of the parties. It is only interlocutory when the court denies a motion for summary
judgment or renders a partial summary judgment as there would still be issues left to be
determined by the court. In the instant case, the March 20, 2003 Order was unequivocal,
other than setting a hearing to determine the amount of damages, but had, on the other
hand, already disposed of the case. As such, the issuance of the November 10, 2003 Order
granting the motion for partial execution was proper as the summary judgment already
became final and executory as adverted to.
In
petition
for certiorari,
even
if,
in
the
greater
interest
of
substantial
justice, certiorarimay be availed of, it must be shown that the trial court acted with grave
abuse of discretion amounting to lack or excess of jurisdiction, that is, that the trial court
exercised its powers in an arbitrary or despotic manner by reason of passion or personal
hostilities, so patent and gross as to amount to an evasion or virtual refusal to perform the
duty enjoined or to act in contemplation of law. We find that such abuse is not extant in the
instant case.
58
Muslim filed a Motion for Reconsideration of the foregoing judgment on

May 9, 200659 and a Supplemental Motion for Reconsideration on June 23,
2006.60
On July 11, 2006, the Court of Appeals issued a Resolution stating that
it received on June 8, 2006 a copy of the instant Petition (G.R. No. 172448)
filed by MSU; and since said Petition assails its Decision dated March 14,
2006 in CA-G.R. SP
_______________
58 Rollo, pp. 60-65.
59 CA Rollo, pp. 575-586.
60 Id., at pp. 886-904.
489

2012
489

Osop
No. 82052, it was constrained to await the ruling of the Supreme Court in
G.R. No. 172448. Hence, the Court of Appeals opted to hold in abeyance
the resolution of Muslims Motion for Reconsideration and Supplemental
Motion for Reconsideration of the Decision dated March 14, 2006 in CAG.R. SP No. 82052.
The issue relevant to the Petition at bar insofar as MSU is concerned
arises from the pronouncement of the Court of Appeals in the same
Decision dated March 14, 2006 in CA-G.R. SP No. 82052 quoted
hereunder:
At the outset this case was deemed submitted for decision on October 6, 2004. On
January 10, 2005, this Court received a Motion to Intervene (with Motion to Admit
Memorandum) filed by Mindanao State University (MSU) through the Office of the Solicitor
General (OSG). However, Section 2, Rule 19 of the Rules of Court, allows intervention only
at any time before rendition of judgment by the trial court, and We hold the motion to
intervene is a stray pleading and is deemed not filed.
61
The instant Petition of MSU presented the following assignment of

errors:
I
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS
MOTION FOR INTERVENTION WAS IMPROVIDENTLY FILED.
II
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENTS
MOTION FOR SUMMARY JUDGMENT WAS PROPER ALTHOUGH PETITIONER
PRESENTED
DEFENSES
IN
THEIR
ANSWER
TO
AMENDED
COMPLAINT
TENDERING FACTUAL ISSUES WHICH REQUIRE TRIAL ON THE MERITS.

_______________
490
490
SUPREME COURT
REPORTS ANNOTATED

Osop
III
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENT
ACQUIRED PERMANENT STATUS.
IV
THE COURT OF APPEALS GRAVELY ERRED UPHOLDING THE TRIAL COURTS
ORDER GRANTING RESPONDENT MOTION FOR ISSUANCE OF PARTIAL WRIT OF
EXECUTION.
62
MSU anchors its right to intervene on Rule 19, Section 1 of the Rules of
Court. MSU stresses that it has a legal interest in the controversy
considering that, ultimately, it will be the one liable for the relief Osop
prays for, particularly, Osops reinstatement at MSU-GSC.
Rule 19, Section 1 of the Rules of Court provides:
1.SectionWho may intervene.A person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property in the
custody of the court or of an officer thereof may, with leave of court, be allowed to intervene
in the action. The court shall consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties, and whether or not the
intervenors rights may be fully protected in a separate proceeding.
In Alfelor v. Halasan,63 the Court held that:
Under this Rule, intervention shall be allowed when a person has (1) a legal interest in
the matter in litigation; (2) or in the success of any of the parties; (3) or an interest against
the parties; (4) or when he is so situated as to be adversely affected by a distribution or
disposition of property in the custody of the court or an officer thereof.
64
_______________
62 Rollo, pp. 24-25.
63 G.R. No. 165987, March 31, 2006, 486 SCRA 451.
64 Id., at p. 460.
491

2012
491

Osop
Jurisprudence describes intervention as a remedy by which a third

party, not originally impleaded in the proceedings, becomes a litigant
therein to enable him, her or it to protect or preserve a right or interest
which may be affected by such proceedings. 65 The right to intervene is not
an absolute right; it may only be permitted by the court when the movant
establishes facts which satisfy the requirements of the law authorizing
it.66
While undoubtedly, MSU has a legal interest in the outcome of the case,
it may not avail itself of the remedy of intervention in CA-G.R. SP No.
82052 simply because MSU is not a third party in the proceedings herein.
In Osops Amended Complaint before the RTC, MSU was already

impleaded as one of the defendants in Civil Case No. 6381. MSU came
under the jurisdiction of the RTC when it was served with summons. It
participated in Civil Case No. 6381, where it was represented by Atty.
Fontanilla, counsel for Muslim and Ramos, who was deputized by the OSG
as counsel for MSU. MSU adopted the Answer to the Amended Complaint
of its co-defendants, Muslim and Ramos, and also joined Muslim and
Ramos in subsequent pleadings filed before the RTC in Civil Case No.
6381. Evidently, the rights and interests of MSU were duly presented
before the RTC in Civil Case No. 6381. Unfortunately, the RTC issued the
Orders dated March 20, 2003 and August 21, 2003 in Civil Case No. 6381
adverse to MSU and its co-defendants, Muslim and Ramos.
The Orders dated March 20, 2003 and August 21, 2003 of the RTC in
Civil Case No. 6381 granted summary judgment in Osops favor. Muslim
filed his Petition for Certiorari and Prohibition in CA-G.R. SP No. 82052
which is still pending
_______________
65 Asias Emerging Dragon Corporation v. Department of Transportation and Communications, G.R.
No. 169914, March 24, 2008, 549 SCRA 44, 48.
66 Id., at p. 51.
492
492
SUPREME COURT
REPORTS ANNOTATED

Osop
before the Court of Appeals (which has yet to resolve Muslims Motion for
Reconsideration and Supplemental Motion for Reconsideration).
Consequently, we are careful not to make any declarations herein that will
prematurely judge the merits of CA-G.R. SP No. 82052.
MSU, on its part, neither filed an appeal nor a Petition
for Certiorari before the Court of Appeals to challenge the adverse RTC
Orders. MSU sat on its rights. Despite receiving on September 2, 2003 67 a
copy of the RTC Order dated August 21, 2003 (denying the Motion for
Reconsideration of the RTC Order dated March 20, 2003 filed by MSU,
together with Muslim and Ramos) in Civil Case No. 6381, MSU did not act
until it filed its Motion for Intervention on January 14, 2005 68 in CA-G.R.
SP No. 82052, after an interval of 16 months. Evidently, it was already
way beyond the reglementary period for MSU to file an appeal (15
days)69 or a Petition for Certiorari (60 days).70 The RTC Orders dated March
20, 2003 and August 21, 2003 had already become final and executory as
to MSU. It cannot now circumvent the finality of the RTC Orders by
seeking to intervene in CA-G.R. SP No. 82052 and thereby, to unduly
benefit from the timely action taken by Muslim, who alone, filed the
Petition in CA-G.R. SP No. 82052.
In view of the foregoing, the Court finds no further need to address the
other assignment of errors of MSU. Given that the Court of Appeals did
not allow MSU to intervene in CA-G.R. SP No. 82052, it has no personality
to question the judgment of the appellate court in this case.
WHEREFORE, the instant Petition for Review is hereby DENIED.
_______________
67 Records, Vol. II, p. 368.
68 Id., at pp. 681-718.
69 Rules of Court, Rule 41, Sec. 3.
70 Id., Rule 65, Sec. 4.
493

2012
493

Osop
SO ORDERED.
Corona (C.J., Chairperson), Bersamin, Villarama, Jr. and PerlasBernabe,** JJ., concur.
Petition denied.
Notes.Intervention is a remedy by which a third party, not originally
impleaded in the proceedings, becomes a litigant therein to enable him,
her or it to protect or preserve a right or interest which may be affected by
such proceedings. (Mactan-Cebu International Airport Authority vs. Heirs
of Estanislao Mioza, 641 SCRA 520 [2011])
The remedy of intervention is not proper where it will have the effect of
retarding the principal suit or delaying the trial of the action. (Id.)
o0o

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Salenga vs. Court of Appeals February 1, 2012.G.R. No.

February 1, 2012.G.R. No. 174941.*

ANTONIO P. SALENGA and NATIONAL LABOR RELATIONS

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

VOL. 664, FEBRUARY 1, 637

Antonio F. Salenga against respondent Clark Development Corporation

The undisputed facts are as follows:

Pampanga. In defense, respondents, represented by the Office of the

WHEREFORE, premises considered, judgment is hereby rendered declaring

VOL. 664, FEBRUARY 1, 639

To pay complainant moral damages in the amount of P2,000,000.00; and,3.

However, the Memorandum of Appeal and the Joint Affidavit of

CDC from 3 February 2000 to 5 July 2000, executed an Affidavit on 20

not been authorized by respondents board of directors to represent the

VOL. 664, FEBRUARY 1, 641

month equivalent of their basic salary.9

should be considered as final and executory.

that petitioner was a regular employee, but instead insisted that he

motion, however, was not verified by the duly authorized representative of

Meanwhile, pending the Motions for Reconsideration of the NLRCs 30

VOL. 664, FEBRUARY 1, 643

the board of directors of respondent to follow up the payment of the

Meanwhile, petitioner Salenga filed a second Motion for Reconsideration

NLRC held that, absent a board resolution authorizing Timbol-Roman to

Reconsideration is GRANTED and We set aside our Resolution of December 5, 2002.

VOL. 664, FEBRUARY 1, 645

attached Secretarys Certificate containing the boards Resolution No. 86,

VOL. 664, FEBRUARY 1, 647

From the illegal dismissal suit:

On 11 May 2004, the CA issued a Resolution 26ordering petitioner

respondent corporation was created under the Corporation Code,

On 16 February 2005, the CA issued a Resolution32admitting the

VOL. 664, FEBRUARY 1, 649

to alter the judgment.

representing the corporation, was not validly substituted by the Laguesma

Implementing this final and executory judgment, Arbiter Isorena issued an

VOL. 664, FEBRUARY 1, 651

Unwilling to accept the above Resolution of the NLRC, the Laguesma

or after the issuance of the 10 September 2003 Decision of LA Darlucio.

conclusive against respondent; and in taking cognizance of the latters

VOL. 664, FEBRUARY 1, 653

It failed to dismiss the Petitions despite respondents failure to inform it of the

In its defense, private respondent insists that the present Petition

petitioners employment was an intra-corporate controversy cognizable by

during Angeles time as private respondents president/CEO, and not of the

former CDC CEO Colayco.

The OGCC, representing respondent CDC and former CEO Colayco

VOL. 664, FEBRUARY 1, 657

Thus, we agree with petitioner that, absent the requisite board

REQUISITES FOR PERFECTION OF APPEAL.(a) The Appeal shall be filed

VOL. 664, FEBRUARY 1, 659

whether further resort to a higher court is desirable and indispensable

The verification of a pleading, if signed by the proper officials of the

imagination or a matter of speculation, and that the pleading is filed in

legal departments which at times inadvertently take legal matters

requiring court representation into their own hands without the

knowledge of the history of a particular case so as to adequately execute

ascertaining the accuracy of the OSGs assertion without precise