G.R. No.
100113 September 3, 1991 There shall be an independent Commission on Elections composed of a
RENATO CAYETANO, petitioner,
vs.
CHRISTIAN MONSOD, HON. JOVITO R. SALONGA, COMMISSION ON
APPOINTMENT, and HON. GUILLERMO CARAGUE, in his capacity as
Secretary of Budget and Management, respondents.
Renato L. Cayetano for and in his own behalf.
Sabina E. Acut, Jr. and Mylene Garcia-Albano co-counsel for petitioner.
PARAS, J.:
We are faced here with a controversy of far-reaching proportions. While
ostensibly only legal issues are involved, the Court's decision in this case
would indubitably have a profound effect on the political aspect of our
national existence.
The 1987 Constitution provides in Section 1 (1), Article IX-C:
There shall be a Commission on Elections composed of a Chairman
and six Commissioners who shall be natural-born citizens of the
Philippines and, at the time of their appointment, at least thirty-five
years of age, holders of a college degree, and must not have been
candidates for any elective position in the immediately preceding -
elections. However, a majority thereof, including the Chairman,
shall be members of the Philippine Bar who have been engaged in
the practice of law for at least ten years. (Emphasis supplied)
The aforequoted provision is patterned after Section l(l), Article XII-C of the
1973 Constitution which similarly provides:
Chairman and eight Commissioners who shall be natural-born citizens of
the Philippines and, at the time of their appointment, at least thirty-five
years of age and holders of a college degree. However, a majority thereof,
including the Chairman, shall be members of the Philippine Bar who have
been engaged in the practice of law for at least ten years.' (Emphasis
supplied)
Regrettably, however, there seems to be no jurisprudence as to what
constitutes practice of law as a legal qualification to an appointive office.
Black defines "practice of law" as:
The rendition of services requiring the knowledge and the
application of legal principles and technique to serve the interest of
another with his consent. It is not limited to appearing in court, or
advising and assisting in the conduct of litigation, but embraces the
preparation of pleadings, and other papers incident to actions and
special proceedings, conveyancing, the preparation of legal
instruments of all kinds, and the giving of all legal advice to clients.
It embraces all advice to clients and all actions taken for them in
matters connected with the law. An attorney engages in the
practice of law by maintaining an office where he is held out to be-
an attorney, using a letterhead describing himself as an attorney,
counseling clients in legal matters, negotiating with opposing
counsel about pending litigation, and fixing and collecting fees for
services rendered by his associate. (Black's Law Dictionary, 3rd ed.)
The practice of law is not limited to the conduct of cases in court. (Land
Title Abstract and Trust Co. v. Dworken, 129 Ohio St. 23, 193 N.E. 650) A
person is also considered to be in the practice of law when he:
 ... for valuable consideration engages in the business of advising
person, firms, associations or corporations as to their rights under
the law, or appears in a representative capacity as an advocate in
proceedings pending or prospective, before any court,
commissioner, referee, board, body, committee, or commission
constituted by law or authorized to settle controversies and there,
in such representative capacity performs any act or acts for the
purpose of obtaining or defending the rights of their clients under
the law. Otherwise stated, one who, in a representative capacity,
engages in the business of advising clients as to their rights under
the law, or while so engaged performs any act or acts either in
court or outside of court for that purpose, is engaged in the
practice of law. (State ex. rel. Mckittrick v..C.S. Dudley and Co., 102
S.W. 2d 895, 340 Mo. 852)
This Court in the case of Philippine Lawyers Association v.Agrava, (105 Phil.
173,176-177) stated:
The practice of law is not limited to the conduct of cases
or litigation in court; it embraces the preparation of pleadings and
other papers incident to actions and special proceedings, the
management of such actions and proceedings on behalf of clients
before judges and courts, and in addition, conveying. In general,
all advice to clients, and all action taken for them in
matters connected with the law incorporation services, assessment
and condemnation services contemplating an appearance before a
judicial body, the foreclosure of a mortgage, enforcement of a
creditor's claim in bankruptcy and insolvency proceedings, and
conducting proceedings in attachment, and in matters of estate
and guardianship have been held to constitute law practice, as do
the preparation and drafting of legal instruments, where the work
done involves the determination by the trained legal mind of the
legal effect of facts and conditions. (5 Am. Jr. p. 262, 263).
(Emphasis supplied)
Practice of law under modem conditions consists in no small part of
work performed outside of any court and having no immediate
relation to proceedings in court. It embraces conveyancing, the
giving of legal advice on a large variety of subjects, and the
preparation and execution of legal instruments covering an
extensive field of business and trust relations and other
affairs. Although these transactions may have no direct connection
with court proceedings, they are always subject to become involved
in litigation. They require in many aspects a high degree of legal
skill, a wide experience with men and affairs, and great capacity for
adaptation to difficult and complex situations. These customary
functions of an attorney or counselor at law bear an intimate
relation to the administration of justice by the courts. No valid
distinction, so far as concerns the question set forth in the order,
can be drawn between that part of the work of the lawyer which
involves appearance in court and that part which involves advice
and drafting of instruments in his office. It is of importance to the
welfare of the public that these manifold customary functions be
performed by persons possessed of adequate learning and skill, of
sound moral character, and acting at all times under the heavy trust
obligations to clients which rests upon all attorneys.
(Moran, Comments on the Rules of Court, Vol. 3 [1953 ed.] , p. 665-
666, citing In re Opinion of the Justices [Mass.], 194 N.E. 313,
quoted in Rhode Is. Bar Assoc. v. Automobile Service Assoc. [R.I.]
179 A. 139,144). (Emphasis ours)
The University of the Philippines Law Center in conducting orientation
briefing for new lawyers (1974-1975) listed the dimensions of the practice
of law in even broader terms as advocacy, counselling and public service.
 One may be a practicing attorney in following any line of
employment in the profession. If what he does exacts knowledge of
the law and is of a kind usual for attorneys engaging in the active
practice of their profession, and he follows some one or more lines
of employment such as this he is a practicing attorney at law within
the meaning of the statute. (Barr v. Cardell, 155 NW 312)
Practice of law means any activity, in or out of court, which requires the
application of law, legal procedure, knowledge, training and experience.
"To engage in the practice of law is to perform those acts which are
characteristics of the profession. Generally, to practice law is to give notice
or render any kind of service, which device or service requires the use in
any degree of legal knowledge or skill." (111 ALR 23)
The following records of the 1986 Constitutional Commission show that it
has adopted a liberal interpretation of the term "practice of law."
MR. FOZ. Before we suspend the session, may I make a
manifestation which I forgot to do during our review of the
provisions on the Commission on Audit. May I be allowed to make a
very brief statement?
THE PRESIDING OFFICER (Mr. Jamir).
The Commissioner will please proceed.
MR. FOZ. This has to do with the qualifications of the members of
the Commission on Audit. Among others, the qualifications provided
for by Section I is that "They must be Members of the Philippine
Bar" — I am quoting from the provision — "who have been engaged
in the practice of law for at least ten years".
To avoid any misunderstanding which would result in excluding members
of the Bar who are now employed in the COA or Commission on Audit, we
would like to make the clarification that this provision on qualifications
regarding members of the Bar does not necessarily refer or involve actual
practice of law outside the COA We have to interpret this to mean that as
long as the lawyers who are employed in the COA are using their legal
knowledge or legal talent in their respective work within COA, then they
are qualified to be considered for appointment as members or
commissioners, even chairman, of the Commission on Audit.
This has been discussed by the Committee on Constitutional Commissions
and Agencies and we deem it important to take it up on the floor so that
this interpretation may be made available whenever this provision on the
qualifications as regards members of the Philippine Bar engaging in the
practice of law for at least ten years is taken up.
MR. OPLE. Will Commissioner Foz yield to just one question.
MR. FOZ. Yes, Mr. Presiding Officer.
MR. OPLE. Is he, in effect, saying that service in the COA by a lawyer
is equivalent to the requirement of a law practice that is set forth in
the Article on the Commission on Audit?
MR. FOZ. We must consider the fact that the work of COA, although
it is auditing, will necessarily involve legal work; it will involve legal
work. And, therefore, lawyers who are employed in COA now would
have the necessary qualifications in accordance with the Provision
on qualifications under our provisions on the Commission on Audit.
And, therefore, the answer is yes.
 MR. OPLE. Yes. So that the construction given to this is that this is
equivalent to the practice of law.
MR. FOZ. Yes, Mr. Presiding Officer.
MR. OPLE. Thank you.
... ( Emphasis supplied)
Section 1(1), Article IX-D of the 1987 Constitution, provides, among others,
that the Chairman and two Commissioners of the Commission on Audit
(COA) should either be certified public accountants with not less than ten
years of auditing practice, or members of the Philippine Bar who have
been engaged in the practice of law for at least ten years. (emphasis
supplied)
Corollary to this is the term "private practitioner" and which is in many
ways synonymous with the word "lawyer." Today, although many lawyers
do not engage in private practice, it is still a fact that the majority of
lawyers are private practitioners. (Gary Munneke, Opportunities in Law
Careers [VGM Career Horizons: Illinois], [1986], p. 15).
At this point, it might be helpful to define private practice. The term, as
commonly understood, means "an individual or organization engaged in
the business of delivering legal services." (Ibid.). Lawyers who practice
alone are often called "sole practitioners." Groups of lawyers are called
"firms." The firm is usually a partnership and members of the firm are the
partners. Some firms may be organized as professional corporations and
the members called shareholders. In either case, the members of the firm
are the experienced attorneys. In most firms, there are younger or more
inexperienced salaried attorneyscalled "associates." (Ibid.).
The test that defines law practice by looking to traditional areas of law
practice is essentially tautologous, unhelpful defining the practice of law as
that which lawyers do. (Charles W. Wolfram, Modern Legal Ethics [West
Publishing Co.: Minnesota, 1986], p. 593). The practice of law is defined as
the performance of any acts . . . in or out of court, commonly understood
to be the practice of law. (State Bar Ass'n v. Connecticut Bank & Trust Co.,
145 Conn. 222, 140 A.2d 863, 870 [1958] [quoting Grievance Comm. v.
Payne, 128 Conn. 325, 22 A.2d 623, 626 [1941]). Because lawyers perform
almost every function known in the commercial and governmental realm,
such a definition would obviously be too global to be
workable.(Wolfram, op. cit.).
The appearance of a lawyer in litigation in behalf of a client is at once the
most publicly familiar role for lawyers as well as an uncommon role for the
average lawyer. Most lawyers spend little time in courtrooms, and a large
percentage spend their entire practice without litigating a case. (Ibid., p.
593). Nonetheless, many lawyers do continue to litigate and the litigating
lawyer's role colors much of both the public image and the self perception
of the legal profession. (Ibid.).
In this regard thus, the dominance of litigation in the public mind reflects
history, not reality. (Ibid.). Why is this so? Recall that the late Alexander
SyCip, a corporate lawyer, once articulated on the importance of a lawyer
as a business counselor in this wise: "Even today, there are still uninformed
laymen whose concept of an attorney is one who principally tries cases
before the courts. The members of the bench and bar and the informed
laymen such as businessmen, know that in most developed societies today,
substantially more legal work is transacted in law offices than in the
courtrooms. General practitioners of law who do both litigation and non-
litigation work also know that in most cases they find themselves spending
more time doing what [is] loosely desccribe[d] as business counseling than
in trying cases. The business lawyer has been described as the planner, the
diagnostician and the trial lawyer, the surgeon. I[t] need not [be] stress[ed]
that in law, as in medicine, surgery should be avoided where internal
medicine can be effective." (Business Star, "Corporate Finance Law," Jan.
11, 1989, p. 4).
In the course of a working day the average general practitioner wig engage
in a number of legal tasks, each involving different legal doctrines, legal
skills, legal processes, legal institutions, clients, and other interested
parties. Even the increasing numbers of lawyers in specialized practice wig
usually perform at least some legal services outside their specialty. And
even within a narrow specialty such as tax practice, a lawyer will shift from
one legal task or role such as advice-giving to an importantly different one
such as representing a client before an administrative agency.
(Wolfram, supra, p. 687).
By no means will most of this work involve litigation, unless the lawyer is
one of the relatively rare types — a litigator who specializes in this work to
the exclusion of much else. Instead, the work will require the lawyer to
have mastered the full range of traditional lawyer skills of client
counselling, advice-giving, document drafting, and negotiation. And
increasingly lawyers find that the new skills of evaluation and mediation
are both effective for many clients and a source of employment. (Ibid.).
Most lawyers will engage in non-litigation legal work or in litigation work
that is constrained in very important ways, at least theoretically, so as to
remove from it some of the salient features of adversarial litigation. Of
these special roles, the most prominent is that of prosecutor. In some
lawyers' work the constraints are imposed both by the nature of the client
and by the way in which the lawyer is organized into a social unit to
perform that work. The most common of these roles are those of
corporate practice and government legal service. (Ibid.).
In several issues of the Business Star, a business daily, herein below quoted
are emerging trends in corporate law practice, a departure from the
traditional concept of practice of law.
We are experiencing today what truly may be called a revolutionary
transformation in corporate law practice. Lawyers and other
professional groups, in particular those members participating in
various legal-policy decisional contexts, are finding that
understanding the major emerging trends in corporation law is
indispensable to intelligent decision-making.
Constructive adjustment to major corporate problems of today
requires an accurate understanding of the nature and implications
of the corporate law research function accompanied by an
accelerating rate of information accumulation. The recognition of
the need for such improved corporate legal policy formulation,
particularly "model-making" and "contingency planning," has
impressed upon us the inadequacy of traditional procedures in
many decisional contexts.
In a complex legal problem the mass of information to be
processed, the sorting and weighing of significant conditional
factors, the appraisal of major trends, the necessity of estimating
the consequences of given courses of action, and the need for fast
decision and response in situations of acute danger have prompted
the use of sophisticated concepts of information flow theory,
operational analysis, automatic data processing, and electronic
computing equipment. Understandably, an improved decisional
structure must stress the predictive component of the policy-
making process, wherein a "model", of the decisional context or a
segment thereof is developed to test projected alternative courses
of action in terms of futuristic effects flowing therefrom.
Although members of the legal profession are regularly engaged in
predicting and projecting the trends of the law, the subject of
corporate finance law has received relatively little organized and
formalized attention in the philosophy of advancing corporate legal
education. Nonetheless, a cross-disciplinary approach to legal
research has become a vital necessity.
Certainly, the general orientation for productive contributions by
those trained primarily in the law can be improved through an early
introduction to multi-variable decisional context and the various
approaches for handling such problems. Lawyers, particularly with
either a master's or doctorate degree in business administration or
management, functioning at the legal policy level of decision-
making now have some appreciation for the concepts and
analytical techniques of other professions which are currently
engaged in similar types of complex decision-making.
Truth to tell, many situations involving corporate finance problems
would require the services of an astute attorney because of the
complex legal implications that arise from each and every
necessary step in securing and maintaining the business issue
raised. (Business Star, "Corporate Finance Law," Jan. 11, 1989, p. 4).
In our litigation-prone country, a corporate lawyer is assiduously
referred to as the "abogado de campanilla." He is the "big-time"
lawyer, earning big money and with a clientele composed of the
tycoons and magnates of business and industry.
Despite the growing number of corporate lawyers, many people
could not explain what it is that a corporate lawyer does. For one,
the number of attorneys employed by a single corporation will vary
with the size and type of the corporation. Many smaller and some
large corporations farm out all their legal problems to private law
firms. Many others have in-house counsel only for certain matters.
Other corporation have a staff large enough to handle most legal
problems in-house.
A corporate lawyer, for all intents and purposes, is a lawyer who
handles the legal affairs of a corporation. His areas of concern or
jurisdiction may include, inter alia: corporate legal research, tax
laws research, acting out as corporate secretary (in board
meetings), appearances in both courts and other adjudicatory
agencies (including the Securities and Exchange Commission), and
in other capacities which require an ability to deal with the law.
At any rate, a corporate lawyer may assume responsibilities other
than the legal affairs of the business of the corporation he is
representing. These include such matters as determining policy and
becoming involved in management. ( Emphasis supplied.)
In a big company, for example, one may have a feeling of being
isolated from the action, or not understanding how one's work
actually fits into the work of the orgarnization. This can be
frustrating to someone who needs to see the results of his work
first hand. In short, a corporate lawyer is sometimes offered this
fortune to be more closely involved in the running of the business.
Moreover, a corporate lawyer's services may sometimes be
engaged by a multinational corporation (MNC). Some large MNCs
provide one of the few opportunities available to corporate lawyers
to enter the international law field. After all, international law is
practiced in a relatively small number of companies and law firms.
Because working in a foreign country is perceived by many as
glamorous, tills is an area coveted by corporate lawyers. In most
cases, however, the overseas jobs go to experienced attorneys
while the younger attorneys do their "international practice" in law
libraries. (Business Star, "Corporate Law Practice," May 25,1990, p.
4).
This brings us to the inevitable, i.e., the role of the lawyer in the
realm of finance. To borrow the lines of Harvard-educated lawyer
Bruce Wassertein, to wit: "A bad lawyer is one who fails to spot
problems, a good lawyer is one who perceives the difficulties, and
the excellent lawyer is one who surmounts them." (Business Star,
"Corporate Finance Law," Jan. 11, 1989, p. 4).
Today, the study of corporate law practice direly needs a "shot in
the arm," so to speak. No longer are we talking of the traditional
law teaching method of confining the subject study to the
Corporation Code and the Securities Code but an incursion as well
into the intertwining modern management issues.
Such corporate legal management issues deal primarily with three
(3) types of learning: (1) acquisition of insights into current
advances which are of particular significance to the corporate
counsel; (2) an introduction to usable disciplinary skins applicable
to a corporate counsel's management responsibilities; and (3) a
devotion to the organization and management of the legal function
itself.
These three subject areas may be thought of as intersecting circles,
with a shared area linking them. Otherwise known as "intersecting
managerial jurisprudence," it forms a unifying theme for the
corporate counsel's total learning.
Some current advances in behavior and policy sciences affect the
counsel's role. For that matter, the corporate lawyer reviews the
globalization process, including the resulting strategic repositioning
that the firms he provides counsel for are required to make, and
the need to think about a corporation's; strategy at multiple levels.
The salience of the nation-state is being reduced as firms deal both
with global multinational entities and simultaneously with sub-
national governmental units. Firms increasingly collaborate not
only with public entities but with each other — often with those
who are competitors in other arenas.
Also, the nature of the lawyer's participation in decision-making
within the corporation is rapidly changing. The modem corporate
lawyer has gained a new role as a stakeholder — in some cases
participating in the organization and operations of governance
through participation on boards and other decision-making roles.
Often these new patterns develop alongside existing legal
institutions and laws are perceived as barriers. These trends are
complicated as corporations organize for global operations. (
Emphasis supplied)
The practising lawyer of today is familiar as well with governmental
policies toward the promotion and management of technology.
New collaborative arrangements for promoting specific
technologies or competitiveness more generally require approaches
from industry that differ from older, more adversarial relationships
and traditional forms of seeking to influence governmental policies.
And there are lessons to be learned from other countries. In
Europe, Esprit, Eureka and Race are examples of collaborative
efforts between governmental and business Japan's MITI is world
famous. (Emphasis supplied)
Following the concept of boundary spanning, the office of the
Corporate Counsel comprises a distinct group within the
managerial structure of all kinds of organizations. Effectiveness of
both long-term and temporary groups within organizations has
been found to be related to indentifiable factors in the group-
context interaction such as the groups actively revising their
knowledge of the environment coordinating work with outsiders,
promoting team achievements within the organization. In general,
such external activities are better predictors of team performance
than internal group processes.
In a crisis situation, the legal managerial capabilities of the
corporate lawyer vis-a-vis the managerial mettle of corporations
are challenged. Current research is seeking ways both to anticipate
effective managerial procedures and to understand relationships of
financial liability and insurance considerations. (Emphasis supplied)
Regarding the skills to apply by the corporate counsel, three factors
are apropos:
First System Dynamics. The field of systems dynamics has been
found an effective tool for new managerial thinking regarding both
planning and pressing immediate problems. An understanding of
the role of feedback loops, inventory levels, and rates of flow,
enable users to simulate all sorts of systematic problems —
physical, economic, managerial, social, and psychological. New
programming techniques now make the system dynamics principles
more accessible to managers — including corporate counsels.
(Emphasis supplied)
Second Decision Analysis. This enables users to make better
decisions involving complexity and uncertainty. In the context of a
law department, it can be used to appraise the settlement value of
litigation, aid in negotiation settlement, and minimize the cost and
risk involved in managing a portfolio of cases. (Emphasis supplied)
Third Modeling for Negotiation Management. Computer-based
models can be used directly by parties and mediators in all lands of
negotiations. All integrated set of such tools provide coherent and
effective negotiation support, including hands-on on instruction in
these techniques. A simulation case of an international joint
venture may be used to illustrate the point.
[Be this as it may,] the organization and management of the legal
function, concern three pointed areas of consideration, thus:
Preventive Lawyering. Planning by lawyers requires special skills
that comprise a major part of the general counsel's responsibilities.
They differ from those of remedial law. Preventive lawyering is
concerned with minimizing the risks of legal trouble and maximizing
legal rights for such legal entities at that time when transactional or
similar facts are being considered and made.
Managerial Jurisprudence. This is the framework within which are
undertaken those activities of the firm to which legal consequences
attach. It needs to be directly supportive of this nation's evolving
economic and organizational fabric as firms change to stay
competitive in a global, interdependent environment. The practice
and theory of "law" is not adequate today to facilitate the
relationships needed in trying to make a global economy work.
Organization and Functioning of the Corporate Counsel's Office. The
general counsel has emerged in the last decade as one of the most
vibrant subsets of the legal profession. The corporate counsel hear
 responsibility for key aspects of the firm's strategic issues, including
structuring its global operations, managing improved relationships
with an increasingly diversified body of employees, managing
expanded liability exposure, creating new and varied interactions
with public decision-makers, coping internally with more complex
make or by decisions.
This whole exercise drives home the thesis that knowing corporate
law is not enough to make one a good general corporate counsel
nor to give him a full sense of how the legal system shapes
corporate activities. And even if the corporate lawyer's aim is not
the understand all of the law's effects on corporate activities, he
must, at the very least, also gain a working knowledge of the
management issues if only to be able to grasp not only the basic
legal "constitution' or makeup of the modem corporation.
"Business Star", "The Corporate Counsel," April 10, 1991, p. 4).
The challenge for lawyers (both of the bar and the bench) is to have
more than a passing knowledge of financial law affecting each
aspect of their work. Yet, many would admit to ignorance of vast
tracts of the financial law territory. What transpires next is a
dilemma of professional security: Will the lawyer admit ignorance
and risk opprobrium?; or will he feign understanding and risk
exposure? (Business Star, "Corporate Finance law," Jan. 11, 1989, p.
4).
Respondent Christian Monsod was nominated by President Corazon C.
Aquino to the position of Chairman of the COMELEC in a letter received by
the Secretariat of the Commission on Appointments on April 25, 1991.
Petitioner opposed the nomination because allegedly Monsod does not
possess the required qualification of having been engaged in the practice
of law for at least ten years.
On June 5, 1991, the Commission on Appointments confirmed the
nomination of Monsod as Chairman of the COMELEC. On June 18, 1991, he
took his oath of office. On the same day, he assumed office as Chairman of
the COMELEC.
Challenging the validity of the confirmation by the Commission on
Appointments of Monsod's nomination, petitioner as a citizen and
taxpayer, filed the instant petition for certiorari and Prohibition praying
that said confirmation and the consequent appointment of Monsod as
Chairman of the Commission on Elections be declared null and void.
Atty. Christian Monsod is a member of the Philippine Bar, having passed
the bar examinations of 1960 with a grade of 86-55%. He has been a dues
paying member of the Integrated Bar of the Philippines since its inception
in 1972-73. He has also been paying his professional license fees as lawyer
for more than ten years. (p. 124, Rollo)
After graduating from the College of Law (U.P.) and having hurdled the
bar, Atty. Monsod worked in the law office of his father. During his stint in
the World Bank Group (1963-1970), Monsod worked as an operations
officer for about two years in Costa Rica and Panama, which involved
getting acquainted with the laws of member-countries negotiating loans
and coordinating legal, economic, and project work of the Bank. Upon
returning to the Philippines in 1970, he worked with the Meralco Group,
served as chief executive officer of an investment bank and subsequently of
a business conglomerate, and since 1986, has rendered services to various
companies as a legal and economic consultant or chief executive officer. As
former Secretary-General (1986) and National Chairman (1987) of
NAMFREL. Monsod's work involved being knowledgeable in election law.
He appeared for NAMFREL in its accreditation hearings before the Comelec.
In the field of advocacy, Monsod, in his personal capacity and as former Co-
Chairman of the Bishops Businessmen's Conference for Human
Development, has worked with the under privileged sectors, such as the
farmer and urban poor groups, in initiating, lobbying for and engaging in
affirmative action for the agrarian reform law and lately the urban land
reform bill. Monsod also made use of his legal knowledge as a member of
the Davide Commission, a quast judicial body, which conducted numerous
hearings (1990) and as a member of the Constitutional Commission (1986-
1987), and Chairman of its Committee on Accountability of Public Officers,
for which he was cited by the President of the Commission, Justice Cecilia
Muñoz-Palma for "innumerable amendments to reconcile government
functions with individual freedoms and public accountability and the party-
list system for the House of Representative. (pp. 128-129 Rollo) ( Emphasis
supplied)
Just a word about the work of a negotiating team of which Atty. Monsod
used to be a member.
In a loan agreement, for instance, a negotiating panel acts as a
team, and which is adequately constituted to meet the various
contingencies that arise during a negotiation. Besides top officials
of the Borrower concerned, there are the legal officer (such as the
legal counsel), the finance manager, and an operations officer (such
as an official involved in negotiating the contracts) who comprise
the members of the team. (Guillermo V. Soliven, "Loan Negotiating
Strategies for Developing Country Borrowers," Staff Paper No. 2,
Central Bank of the Philippines, Manila, 1982, p. 11). (Emphasis
supplied)
After a fashion, the loan agreement is like a country's Constitution;
it lays down the law as far as the loan transaction is concerned.
Thus, the meat of any Loan Agreement can be compartmentalized
into five (5) fundamental parts: (1) business terms; (2) borrower's
representation; (3) conditions of closing; (4) covenants; and (5)
events of default. (Ibid., p. 13).
In the same vein, lawyers play an important role in any debt
restructuring program. For aside from performing the tasks of
legislative drafting and legal advising, they score national
development policies as key factors in maintaining their countries'
sovereignty. (Condensed from the work paper, entitled "Wanted:
Development Lawyers for Developing Nations," submitted by L.
Michael Hager, regional legal adviser of the United States Agency
for International Development, during the Session on Law for the
Development of Nations at the Abidjan World Conference in Ivory
Coast, sponsored by the World Peace Through Law Center on
August 26-31, 1973). ( Emphasis supplied)
Loan concessions and compromises, perhaps even more so than
purely renegotiation policies, demand expertise in the law of
contracts, in legislation and agreement drafting and in
renegotiation. Necessarily, a sovereign lawyer may work with an
international business specialist or an economist in the formulation
of a model loan agreement. Debt restructuring contract
agreements contain such a mixture of technical language that they
should be carefully drafted and signed only with the advise of
competent counsel in conjunction with the guidance of adequate
technical support personnel. (See International Law Aspects of the
Philippine External Debts, an unpublished dissertation, U.S.T.
Graduate School of Law, 1987, p. 321). ( Emphasis supplied)
A critical aspect of sovereign debt restructuring/contract
construction is the set of terms and conditions which determines
the contractual remedies for a failure to perform one or more
elements of the contract. A good agreement must not only define
 the responsibilities of both parties, but must also state the recourse
open to either party when the other fails to discharge an obligation.
For a compleat debt restructuring represents a devotion to that
principle which in the ultimate analysis is sine qua non for foreign
loan agreements-an adherence to the rule of law in domestic and
international affairs of whose kind U.S. Supreme Court Justice
Oliver Wendell Holmes, Jr. once said: "They carry no banners, they
beat no drums; but where they are, men learn that bustle and bush
are not the equal of quiet genius and serene mastery." (See Ricardo
J. Romulo, "The Role of Lawyers in Foreign Investments," Integrated
Bar of the Philippine Journal, Vol. 15, Nos. 3 and 4, Third and Fourth
Quarters, 1977, p. 265).
Interpreted in the light of the various definitions of the term Practice of
law". particularly the modern concept of law practice, and taking into
consideration the liberal construction intended by the framers of the
Constitution, Atty. Monsod's past work experiences as a lawyer-economist,
a lawyer-manager, a lawyer-entrepreneur of industry, a lawyer-negotiator
of contracts, and a lawyer-legislator of both the rich and the poor — verily
more than satisfy the constitutional requirement — that he has been
engaged in the practice of law for at least ten years.
Besides in the leading case of Luego v. Civil Service Commission, 143 SCRA
327, the Court said:
Appointment is an essentially discretionary power and must be
performed by the officer in which it is vested according to his best
lights, the only condition being that the appointee should possess
the qualifications required by law. If he does, then the appointment
cannot be faulted on the ground that there are others better
qualified who should have been preferred. This is a political
question involving considerations of wisdom which only the
appointing authority can decide. (emphasis supplied)
No less emphatic was the Court in the case of (Central Bank v. Civil Service
Commission, 171 SCRA 744) where it stated:
It is well-settled that when the appointee is qualified, as in this
case, and all the other legal requirements are satisfied, the
Commission has no alternative but to attest to the appointment in
accordance with the Civil Service Law. The Commission has no
authority to revoke an appointment on the ground that another
person is more qualified for a particular position. It also has no
authority to direct the appointment of a substitute of its choice. To
do so would be an encroachment on the discretion vested upon the
appointing authority. An appointment is essentially within the
discretionary power of whomsoever it is vested, subject to the only
condition that the appointee should possess the qualifications
required by law. ( Emphasis supplied)
The appointing process in a regular appointment as in the case at bar,
consists of four (4) stages: (1) nomination; (2) confirmation by the
Commission on Appointments; (3) issuance of a commission (in the
Philippines, upon submission by the Commission on Appointments of its
certificate of confirmation, the President issues the permanent
appointment; and (4) acceptance e.g., oath-taking, posting of bond, etc. . .
. (Lacson v. Romero, No. L-3081, October 14, 1949; Gonzales, Law on Public
Officers, p. 200)
The power of the Commission on Appointments to give its consent to the
nomination of Monsod as Chairman of the Commission on Elections is
mandated by Section 1(2) Sub-Article C, Article IX of the Constitution which
provides:
 The Chairman and the Commisioners shall be appointed by the
President with the consent of the Commission on Appointments for
a term of seven years without reappointment. Of those first
appointed, three Members shall hold office for seven years, two
Members for five years, and the last Members for three years,
without reappointment. Appointment to any vacancy shall be only
for the unexpired term of the predecessor. In no case shall any
Member be appointed or designated in a temporary or acting
capacity.
Anent Justice Teodoro Padilla's separate opinion, suffice it to say
that his definition of the practice of law is the traditional or
stereotyped notion of law practice, as distinguished from the
modern concept of the practice of law, which modern connotation
is exactly what was intended by the eminent framers of the 1987
Constitution. Moreover, Justice Padilla's definition would require
generally a habitual law practice, perhaps practised two or three
times a week and would outlaw say, law practice once or twice a
year for ten consecutive years. Clearly, this is far from the
constitutional intent.
Upon the other hand, the separate opinion of Justice Isagani Cruz states
that in my written opinion, I made use of a definition of law practice which
really means nothing because the definition says that law practice " . . . is
what people ordinarily mean by the practice of law." True I cited the
definition but only by way of sarcasm as evident from my statement that
the definition of law practice by "traditional areas of law practice is
essentially tautologous" or defining a phrase by means of the phrase itself
that is being defined.
Justice Cruz goes on to say in substance that since the law covers almost all
situations, most individuals, in making use of the law, or in advising others
on what the law means, are actually practicing law. In that sense, perhaps,
but we should not lose sight of the fact that Mr. Monsod is a lawyer, a
member of the Philippine Bar, who has been practising law for over ten
years. This is different from the acts of persons practising law, without first
becoming lawyers.
Justice Cruz also says that the Supreme Court can even disqualify an
elected President of the Philippines, say, on the ground that he lacks one
or more qualifications. This matter, I greatly doubt. For one thing, how can
an action or petition be brought against the President? And even assuming
that he is indeed disqualified, how can the action be entertained since he
is the incumbent President?
We now proceed:
The Commission on the basis of evidence submitted doling the public
hearings on Monsod's confirmation, implicitly determined that he
possessed the necessary qualifications as required by law. The judgment
rendered by the Commission in the exercise of such an acknowledged
power is beyond judicial interference except only upon a clear showing of
a grave abuse of discretion amounting to lack or excess of jurisdiction. (Art.
VIII, Sec. 1 Constitution). Thus, only where such grave abuse of discretion is
clearly shown shall the Court interfere with the Commission's judgment. In
the instant case, there is no occasion for the exercise of the Court's
corrective power, since no abuse, much less a grave abuse of discretion,
that would amount to lack or excess of jurisdiction and would warrant the
issuance of the writs prayed, for has been clearly shown.
Additionally, consider the following:
(1) If the Commission on Appointments rejects a nominee by the
President, may the Supreme Court reverse the Commission, and
 thus in effect confirm the appointment? Clearly, the answer is in In view of the foregoing, this petition is hereby DISMISSED.
the negative.
SO ORDERED.
(2) In the same vein, may the Court reject the nominee, whom the
Commission has confirmed? The answer is likewise clear.

(3) If the United States Senate (which is the confirming body in the
U.S. Congress) decides to confirm a Presidential nominee, it would
be incredible that the U.S. Supreme Court would still reverse the
U.S. Senate.

Finally, one significant legal maxim is:

We must interpret not by the letter that killeth, but by the spirit
that giveth life.

Take this hypothetical case of Samson and Delilah. Once, the procurator of
Judea asked Delilah (who was Samson's beloved) for help in capturing
Samson. Delilah agreed on condition that —

No blade shall touch his skin;

No blood shall flow from his veins.

When Samson (his long hair cut by Delilah) was captured, the procurator
placed an iron rod burning white-hot two or three inches away from in
front of Samson's eyes. This blinded the man. Upon hearing of what had
happened to her beloved, Delilah was beside herself with anger, and
fuming with righteous fury, accused the procurator of reneging on his
word. The procurator calmly replied: "Did any blade touch his skin? Did any
blood flow from his veins?" The procurator was clearly relying on the
letter, not the spirit of the agreement.
 Republic of the Philippines
Supreme Court
Manila PERALTA, J.:

EN BANC
This is a petition for certiorari[1] questioning the validity
ATTY. REYNANTE B. ORCEO, G.R. No. 190779 of Resolution No. 8714 insofar as it provides that the term firearm
Petitioner, includes airsoft guns and their replicas/imitations, which results in their
Present:
coverage by the gun ban during the election period this year.
PUNO, C.J.,* Resolution No. 8714 is entitled Rules and Regulations on the: (1)
CARPIO,** Bearing, Carrying or Transporting of Firearms or other Deadly Weapons;
CORONA, and (2) Employment, Availment or Engagement of the Services of Security
CARPIO MORALES,
Personnel or Bodyguards, During the Election Period for the May 10, 2010
VELASCO, JR.,
NACHURA, National and Local Elections. The Resolution was promulgated by the
- versus - LEONARDO-DE CASTRO, Commission on Elections (COMELEC) on December 16, 2009, and took
BRION, effect on December 25, 2009.
PERALTA,
BERSAMIN,
DEL CASTILLO, Resolution No. 8714 contains the implementing rules and
ABAD, regulations of Sec. 32 (Who May Bear Firearms) and Section 33 (Security
VILLARAMA, JR., Personnel and Bodyguards) of Republic Act (R.A.) No. 7166, entitled An Act
PEREZ, and
MENDOZA, JJ. Providing for Synchronized National and Local Elections and for Electoral
Reforms, Authorizing Appropriations Therefor, and for Other Purposes.
COMMISSION ON ELECTIONS, Promulgated:
Respondent. March 26, 2010 Section 1 of Resolution No. 8714 prohibits an unauthorized person
x---- ------------------------------------------------------------------------------------x
from bearing, carrying or transporting firearms or other deadly weapons in
public places, including all public buildings, streets, parks, and private
DECISION
vehicles or public conveyances, even if licensed to possess or carry the
same, during the election period.
Under Section 2 (b) of Resolution No. 8714, the term firearm
includes airgun, airsoft guns, and their replica/imitation in whatever form
that can cause an ordinary person to believe that they are real. Hence,
airsoft guns and their replicas/imitations are included in the gun ban
during the election period from January 10, 2010 to June 9, 2010.
Petitioner claims that he is a real party-in-interest, because he has
been playing airsoft since the year 2000. The continuing implementation of
Resolution No. 8714 will put him in danger of sustaining direct injury or
make him liable for an election offense[2] if caught in possession of an
airsoft gun and its replica/imitation in going to and from the game site and
playing the sport during the election period.
Petitioner contends that the COMELEC gravely abused its discretion
amounting to lack or excess of jurisdiction in including airsoft guns and
their replicas/imitations in the definition of firearm in Resolution No. 8714,
since there is nothing in R.A. No. 7166 that mentions airsoft guns and their
replicas/imitations. He asserts that the intendment of R.A. No. 7166 is that
the term firearm refers to real firearm in its common and ordinary usage.
In support of this assertion, he cites the Senate deliberation on the
bill,[3] which later became R.A. No. 7166, where it was clarified that an
unauthorized person caught carrying a firearm during the election period is
guilty of an election offense under Section 261 (q) of the Omnibus Election
Code.
Further, petitioner alleges that there is no law that covers airsoft
guns. By including airsoft guns in the definition of firearm, Resolution No.
8714, in effect, criminalizes the sport, since the possession of an airsoft
gun or its replica/imitation is now an election offense, although there is
still no law that governs the use thereof.
Petitioner prays that the Court render a decision as follows: (1)
Annulling Resolution No. 8714 insofar as it includes airsoft guns and their
replicas/imitations within the meaning of firearm, and declaring the
Resolution as invalid; (2) ordering the COMELEC to desist from further
implementing Resolution No. 8714 insofar as airsoft guns and
their replicas/imitations are concerned; (3) ordering the COMELEC to
amend Resolution No. 8714 by removing airsoft guns and their
replicas/imitations within the meaning of firearm; and (4) ordering the
COMELEC to issue a Resolution directing the Armed Forces of the
Philippines, Philippine National Police and other law enforcement agencies
deputized by the COMELEC to desist from further enforcing Resolution No.
8714 insofar as airsoft guns and their replicas/imitations are concerned.
The main issue is whether or not the COMELEC gravely abused its
discretion in including airsoft guns and their replicas/imitations in the term
firearm in Section 2 (b) of R.A. No. 8714.
 The Court finds that the COMELEC did not commit grave abuse of
discretion in this case.
R.A. No. 7166 (An Act Providing for Synchronized National and Local
Elections and for Electoral Reforms, Authorizing Appropriations Therefor,
and for Other Purposes)[4] provides:
SEC. 32. Who May Bear Firearms. − During the election
period, no person shall bear, carry or transport firearms or
other deadly weapons in public places, including any building,
street, park, private vehicle or public conveyance, even if
licensed to possess or carry the same, unless authorized in
writing by the Commission. The issuance of firearms licenses
shall be suspended during the election period.
Only regular members or officers of the Philippine
National Police, the Armed Forces of the Philippines and other
law enforcement agencies of the Government who are duly
deputized in writing by the Commission for election duty may
be authorized to carry and possess firearms during the
election period: Provided, That, when in the possession of
firearms, the deputized law enforcement officer must be: (a)
in full uniform showing clearly and legibly his name, rank and
serial number, which shall remain visible at all times; and (b)
in the actual performance of his election duty in the specific
area designated by the Commission.
xxxx
SEC. 35. Rules and Regulations. The Commission
shall issue rules and regulations to implement this Act. Said
rules shall be published in at least two (2) national
newspapers of general circulation.
Pursuant to Section 35 of R.A. No. 7166, the COMELEC
promulgated Resolution No. 8714, which contains the implementing rules
and regulations of Sections 32 and 33 of R.A. No. 7166. The pertinent
portion of the Resolution states:
NOW, THEREFORE, pursuant to the powers vested in
it by the Constitution of the Republic of the Philippines, the
Omnibus Election Code (B.P. Blg. 881), Republic Acts Nos.
6646, 7166, 8189, 8436, 9189, 9369 and other elections
laws, the Commission RESOLVED, as it hereby RESOLVES, to
promulgate the following rules and regulations to
implement Sections 32 and 33 of Republic Act No. 7166 in
connection with the conduct of the May 10, 2010 national
and local elections:
SECTION 1. General Guiding Principles. During the
election period: (a) no person shall bear, carry or
transport firearms or other deadly weapons in public
places, including all public buildings, streets, parks, and
private vehicles or public conveyances, even if licensed to
possess or carry the same; and (b) no candidate for public
office, including incumbent public officers seeking election
to any public office, shall employ, avail himself of or engage
the services of security personnel or bodyguards, whether
or not such bodyguards are regular members or officers of
the Philippine National Police (PNP), the Armed Forces of
the Philippines (AFP) or other law enforcement agency of SEC. 4. Who May Bear Firearms. − Only the following
the Government. persons who are in the regular plantilla of the PNP or AFP or
other law enforcement agencies are authorized to bear,
The transport of firearms of those who are engaged carry or transport firearms or other deadly weapons during
in the manufacture, importation, exportation, purchase, the election period:
sale of firearms, explosives and their spare parts or those
involving the transportation of firearms, explosives and (a) Regular member or officer of the PNP, the AFP
their spare parts, may, with prior notice to the Commission, and other law enforcement agencies of the
be authorized by the Director General of the PNP provided Government, provided that when in the
that the firearms, explosives and their spare parts are possession of firearm, he is: (1) in the regular
immediately transported to the Firearms and Explosives plantilla of the said agencies and is receiving
Division, CSG, PNP. regular compensation for the services rendered
in said agencies; and (2) in the agency-prescribed
SEC. 2. Definition of Terms. As used in this uniform showing clearly and legibly his name,
Resolution: rank and serial number or, in case rank and serial
number are inapplicable, his agency-issued
(a) Election Period refers to the election identification card showing clearly his name and
period prescribed in Comelec Resolution No. 8646 dated 14 position, which identification card shall remain
July 2009 which is from 10 January 2010 to 09 June 2010; visible at all times; (3) duly licensed to possess
firearm and to carry the same outside of
(b) Firearm shall refer to the "firearm" residence by means of a valid mission order or
as defined in existing laws, rules and regulations. The term letter order; and (4) in the actual performance of
also includes airgun, airsoft guns, and their official law enforcement duty, or in going to or
replica/imitation in whatever form that can cause an returning from his residence/barracks or official
ordinary person to believe that they are real; station.
xxxx
(c) Deadly weapon includes bladed
instrument, handgrenades or other explosives, except (b) Member of privately owned or operated
pyrotechnics. security, investigative, protective or intelligence
xxxx agencies duly authorized by the PNP, provided
that when in the possession of firearm, he is: (1)
 in the agency-prescribed uniform with his
agency-issued identification card prominently
displayed and visible at all times, showing clearly
his name and position; and (2) in the actual
performance of duty at his specified place/area
of duty.
xxxx
SEC. 8. Enforcement. Any person who, not wearing
the authorized uniform mentioned herein, bears, carries or
transports firearm or other deadly weapon, shall be
presumed unauthorized to carry firearms and subject to
arrest.[5]
Petitioner contends that under R.A. No. 7166, the term firearm
connotes real firearm. Moreover, R.A. No. 7166 does not mention airsoft
guns and their replicas/imitations. Hence, its implementing rules and
regulations contained in Resolution No. 8714 should not include airsoft
guns and their replicas/imitations in the definition of the term firearm.
The Court is not persuaded.
Holy Spirit Homeowners Association, Inc. v. Defensor[6] held:
Where a rule or regulation has a provision not
expressly stated or contained in the statute being
implemented, that provision does not necessarily contradict
the statute. A legislative rule is in the nature of subordinate
legislation, designed to implement a primary legislation by
providing the details thereof. All that is required is that the
regulation should be germane to the objects and purposes
of the law; that the regulation be not in contradiction to,
but in conformity with, the standards prescribed by the
law.[7]
Evidently, the COMELEC had the authority to promulgate
Resolution No. 8714 pursuant to Section 35 of R.A. No. 7166. It was
granted the power to issue the implementing rules and regulations of
Sections 32 and 33 of R.A. No. 7166. Under this broad power, the
COMELEC was mandated to provide the details of who may bear, carry or
transport firearms or other deadly weapons, as well as the definition of
firearms, among others. These details are left to the discretion of the
COMELEC, which is a constitutional body that possesses special knowledge
and expertise on election matters, with the objective of ensuring the
holding of free, orderly, honest, peaceful and credible elections.
In its Comment,[8] the COMELEC, represented by the Office of the
Solicitor General, states that the COMELECs intent in the inclusion of
airsoft guns in the term firearm and their resultant coverage by the
election gun ban is to avoid the possible use of recreational guns in sowing
fear, intimidation or terror during the election period. An ordinary citizen
may not be able to distinguish between a real gun and an airsoft gun. It is
fear subverting the will of a voter, whether brought about by the use of a
real gun or a recreational gun, which is sought to be averted. Ultimately,
the objective is to ensure the holding of free, orderly, honest, peaceful and
credible elections this year.
Contrary to petitioners allegation, there is a regulation that governs
the possession and carriage of airsoft rifles/pistols, namely, Philippine
National Police (PNP) Circular No. 11 dated December 4, 2007,
entitled Revised Rules and Regulations Governing the Manufacture,
Importation, Exportation, Sale, Possession, Carrying of Airsoft Rifles/Pistols
and Operation of Airsoft Game Sites and Airsoft Teams. The Circular
defines an airsoft gun as follows:
Airsoft Rifle/Pistol x x x includes battery operated,
spring and gas type powered rifles/pistols which discharge
plastic or rubber pellets only as bullets or ammunition. This
differs from replica as the latter does not fire plastic or
rubber pellet.
PNP Circular No. 11 classifies the airsoft rifle/pistol as a special type
of air gun, which is restricted in its use only to sporting activities, such as
war game simulation.[9]Any person who desires to possess an airsoft
rifle/pistol needs a license from the PNP, and he shall file his application in
accordance with PNP Standard Operating Procedure No. 13, which
prescribes the procedure to be followed in the licensing of firearms.[10] The
minimum age limit of the applicant is 18 years old.[11] The Circular also
requires a Permit to Transport an airsoft rifle/pistol from the place of
residence to any game or exhibition site.[12]
A license to possess an airsoft gun, just like ordinary licenses in
other regulated fields, does not confer an absolute right, but only a
personal privilege to be exercised under existing restrictions, and such as
may thereafter be reasonably imposed.[13]
The inclusion of airsoft guns and airguns in the term firearm in
Resolution No. 8714 for purposes of the gun ban during the election period
is a reasonable restriction, the objective of which is to ensure the
holding of free, orderly, honest, peaceful and credible elections.
However, the Court excludes the replicas and imitations
of airsoft guns and airguns from the term firearm under Resolution No.
8714, because they are not subject to any regulation, unlike airsoft guns.
Petitioner further contends that Resolution No. 8714 is not in
accordance with the State policies in these constitutional provisions:
Art. II, Sec. 12. The State recognizes the sanctity of
family life and shall protect and strengthen the family as a
basic autonomous social institution. x x x
Art. XV, Sec. 1. The State recognizes the Filipino
family as the foundation of the nation. Accordingly, it shall
strengthen its solidarity and actively promote its total
development.
 Art. II, Sec. 17. The State shall give priority to x x x
sports to foster patriotism and nationalism, accelerate social
progress, and promote total human liberation and
development.
Petitioner asserts that playing airsoft provides bonding moments
among family members. Families are entitled to protection by the society
and the State under the Universal Declaration of Human Rights. They are
free to choose and enjoy their recreational activities. These liberties,
petitioner contends, cannot be abridged by the COMELEC.
In its Comment, the COMELEC, through the Solicitor General, states
that it adheres to the aforementioned state policies, but even
constitutional freedoms are not absolute, and they may be abridged to
some extent to serve appropriate and important interests.
As a long-time player of the airsoft sport, it is presumed that
petitioner has a license to possess an airsoft gun. As a lawyer, petitioner
is aware that
a licensee of an airsoft gun is subject to the restrictions imposed upon him
by PNP Circular No. 11 and other valid restrictions, such as Resolution No.
8714. These restrictions exist in spite of the aforementioned State policies,
which do not directly uphold a licensees absolute right to possess or carry
an airsoft gun under any circumstance.
Petitioners allegation of grave abuse of discretion by respondent
COMELEC implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction or, in other words, the exercise of power
in an arbitrary manner by reason of passion, prejudice or personal hostility,
and it must be so patent or gross as to amount to an evasion of a positive
duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.[14]
The Court holds that the COMELEC did not gravely abuse its
discretion in including airsoft guns and airguns in the term firearm in
Resolution No. 8714 for purposes of the gun ban during the election
period, with the apparent objective of ensuring free, honest, peaceful and
credible elections this year. However, the replicas and imitations
of airsoft guns and airguns are excluded from the term firearm in
Resolution No. 8714.
WHEREFORE, the petition is PARTLY GRANTED insofar as the
exclusion of replicas and imitations of airsoft guns from the term firearm is
concerned. Replicas and imitations of airsoft guns and airguns are hereby
declared excluded from the term firearm in Resolution No. 8714. The
petition is DISMISSED in regard to the exclusion of airsoft guns from the
term firearm in Resolution No. 8714. Airsoft guns and airguns are covered
by the gun ban during the election period.
No costs.
SO ORDERED.
 FIRST DIVISION
Respondents are the owners of the lands in question which have been
reclassified from agricultural into non-agricultural uses by virtue of a
DEPARTMENT OF AGRARIAN G.R. No. 165547 municipal zoning ordinance, and are included in the comprehensive land
REFORM, as represented by its use plan of the Municipality of Alabel.
Secretary, RENE C. VILLA, Present:
Petitioner, The antecedents are as follows:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ, The Province of Sarangani was created pursuant to Republic Act No. 7228
- versus - CORONA, on March 16, 1992, composed of seven (7) municipalities, namely, Alabel,
AZCUNA, and Glan, Maasin, Maitum, Malapatan, Malungon and Kiamba which were
GARCIA, JJ. segregated from the Province of South Cotabato. Under said Act,
SARANGANI AGRICULTURAL the Municipality of Alabel was made the capital of the new province where
CO., INC., ACIL CORPORATION, Promulgated: the capitol building and all other national and provincial offices shall be
NICASIO ALCANTARA and established.[2]
TOMAS ALCANTARA, January 24, 2007
Respondents. On February 14, 1997, the Sangguniang Bayan of Alabel passed Resolution
No. 97-08 or Resolution Adopting and Endorsing the Ten-Year Municipal
x ----------------------------------------------------------------------------------------- x Comprehensive Development Plan (MCDP 1995-2005) of
the Municipality of Alabel and Its Land Use Development Plan and Zoning
Ordinance for Adoption and Approval of the Provincial Governor,
DECISION Honorable Priscilla L. Chiongbian, Thru The Honorable Sangguniang
Panlalawigan of Sarangani Province.

AZCUNA, J.:
This is a petition for review[1] by the Department of Agrarian Reform (DAR)
seeking the reversal of the Decision and Resolution, dated July 19, 2004
and September 24, 2004, respectively, of the Court of Appeals in CA-G.R.
SP No. 79899, entitled Sarangani Agricultural Co, Inc., et al. v. Hon. Manuel
Domingo, et al.
On January 30, 1998, pursuant to Municipal Zoning Ordinance No. 08,
Series of 1997, and to accelerate the development and urbanization of
Alabel, the Sangguniang Bayan of Alabel passed Resolution No. 98-03
reclassifying lots that were located within the built-up areas, based on the
1995-2005 Land Use Plan of the municipality, from agricultural to non-
agricultural uses.[3]
On March 2, 1998, the Sangguniang Panlalawigan of Sarangani approved (T-4811)
Resolution No. 98-018 or the Resolution Adopting the Ten-Year Municipal T-48812
SACI 7 12.3265 12.3265
Comprehensive Development Plan (MCDP 1995-2205) and the Land Use (T-4812)
Development Plan and Zoning Ordinance of the Municipality of Alabel, T-(10885)
Sarangani Per Resolution No. 97-08 and Municipal Ordinance No. 97-08, S. Nicasio Alcantara 10 20.9149 20.9149
T-44538
of 1997 of the Sangguniang Bayan of Alabel. A portion of the area involving SACI T-9210 2 12.1425 12.1425
376.5424 hectares, however, was covered by the Comprehensive Agrarian T-14359
Reform Law (R.A. No. 6657) commercial farms deferment scheme.[4] Tomas Alcantara 39 10.9390 10.9390
(T-1185)
Nicasio Alcantara Untitled 53 5.0672 5.0672
The Zoning Certification issued by the office of the Municipal T-(41758)
Planning and Development Council (MPDC) showed that respondents ACIL Corporation 806 3.3115 3.3115
(T-4150)
properties located at Barangay Maribulan, Alabel were among those
SACI Untitled 807 6.7871 6.7871
reclassified from agricultural and pasture land to residential, commercial
institutional, light industrial and open space in the 1995-2005 land use plan
of Alabel. [5]
Accompanying SACIs application for conversion were the documents
On July 2, 1998, respondent Sarangani Agricultural Company, Inc.
required under the Department of Agrarian Reform (DAR) Administrative
(SACI) filed an application for land use conversion of the following parcels
Order No. 7, Series of 1997.[6]
of land with an aggregate area of 1,005 hectares:
Subsequently, a Site Inspection Report was prepared by the
Housing and Land Use Regulatory Board (HLURB) Regional Office (Region
Registered TCT No. Lot No. Area Area Applied
XI) and was indorsed to DAR Secretary Horacio R. Morales, Jr.
Owner (Ha.) (Ha.)
SACI T-7207 1-C 52.4365 52.4365 On March 16, 1999, the Provincial Agrarian Reform Council (PARC) and the
T -48807 Provincial Land Use Technical Committee (PLUTC)[7] conducted an
SACI 2 181.3353 181.3353
(T-4807) inspection of the subject properties. In a Memorandum dated July 9, 1999,
T -48808 the PLUTC recommended that SACIs application be made subject to the
SAC I 3 281.0874 281.0874
(T-4808) following conditions: 1) presentation by SACI of its development plan; 2)
T -48809 submission of the lacking documents; 3) re-survey and segregation of the
SACI 4 241.7880 241.7880
(T-4809) property according to use or project in coordination with the DAR Regional
T-48810 Office; and, 4) submission of the resulting map indicating the technical
SAC I 5 40.6738 40.6738
(T-4810) description of the area per actual use/project attested by the Regional
SACI T -48811 6 137.0340 137.0340 Director.

Meanwhile, on March 22, 1999, members of the Sarangani Agrarian
Reform Beneficiaries Association, Inc. (SARBAI) sent a letter-petition to the
DAR Secretary oppposing the application for land use conversion filed by
SACI. SARBAI alleged that its members were merely forced to sign the
waiver of rights, considering that the commercial farm deferment period
ended on June 15, 1998. Later, an Urgent Petition for the Denial of Land
Use Conversion Application of Banana Commercial Farm of SACI was filed
by SARBAI and was received by the PARC Secretariat on July 14, 1999.
In the March 30, 2000 deliberation of the PLUTC, the committee agreed to
recommend the disapproval of 158.0672 hectares that had been planted
with bananas and coconuts. The committee noted that said portion of the
property was still viable for agriculture, irrigated, with Notice of Coverage,
and under protest or with opposition from SARBAI. It likewise
recommended that the decision as to the rest of the area applied for
conversion shall be deferred subject to the submission of the following
within a period of thirty (30) days: 1) a five-year comprehensive
development plan; 2) a survey plan signed by the Regional Technical
Director of Land Management Service and noted by the DAR Regional
Director (Region XI); 3) SACIs proof of undertaking, which will contain the
package of benefits it intends to give to the affected farm workers except
those working in the banana plantation; 4) the concurrence of all the
workers who would be affected by the proposed conversion, which
concurrence should be noted by the Municipal Agrarian Reform Office
(MARO) and acknowledged by a notary public.
On its part, SACI contended that 1) its projects were aligned to address the
current and anticipated commercial and residential needs of Sarangani
province, and the removal of any portion of its property included in its
comprehensive development plan will affect the viability of the plan; 2) the
banana plantations will be transformed into a socialized housing
subdivision which will be made available to the displaced workers and the
other low income earners of Alabel; 3) the company will construct and
install power generation facilities in the entire area; 4) at the time the
application for land use conversion was filed, no Notice of Coverage was
ever issued by DAR, and the subsequent issuance of such notice was highly
irregular because the same may be issued only after the final resolution of
the application for land use conversion; and 5) the previous Order of
Deferment cannot be a legal barrier to the filing of an application for land
use conversion.
On November 9, 2000, DAR Secretary Horacio R. Morales, Jr. denied SACIs
application for land use conversion. The pertinent portion of the Order
reads:
The proponent also submitted another DA
certification stating that 12 parcels of land (Lot Nos. 2, 3, 4,
5, 6, 7, 12, 807, 53, 10, 39 and 806) with an area of
816.7401 hectares, located at Maribulan, Alabel, Sarangani
are part of expansion for urbanizing areas. Though
discussed on several meetings, no decision was made on the
application since the applicant was not able to comply with
the documentary requirements and clarify the issues raised
by the Committee.
[I]n [the] 30 March 2000 Meeting of the PLUTC, the
Committee deliberated again [on] the subject application
and agreed to recommend the disapproval of 158.0672
hectares area planted to banana[s] and coconuts. The
Committee noted that said portion of the property is still
viable for agriculture, irrigated, with Notice of Coverage and
with protest or opposition from SARBAI. The Committee
also agreed to request the DAR to determine the metes and
bounds of the area planted to banana[s] and coconuts vis--
vis areas devoted to other enterprises. Relative to the rest
of the area applied for conversion, the committee deferred
its decision subject to the submission of a 5-year
comprehensive development plan, showing among others,
the schedule of development by phase, the specific lots
involved and the corresponding proposed use.
The Committee acceded to the request of SACI and
deferred its recommendation to deny conversion of that
portion of the property planted to banana[s] and coconut[s]
pending submission of a manifesto or SACIs proof of
undertaking that it will compensate farm workers affected
by showing, among others, the schedule of development by
phase, the specific lots involved and the corresponding
proposed use [of] the conversion, concurred by the
workers/oppositors, noted by the MARO and duly notarized.
The Committee also requested SACI to submit details of the
pomelo farm in Malandag being offered as a replacement
farm for the relocation of the farm workers. SACI was given
a 30-day period to submit these documents.
SACI, however, failed to submit the oath of undertaking to
pay disturbance compensation to affected workers being
required by the Committee and as provided under DAR
Administrative Order No. 01, Series of 1999. Instead, SACI
submitted an undertaking executed by the affected workers
stating that they are amenable to the package of benefits
offered by the company. Nevertheless, those who executed
the deed of undertaking did not represent the majority of
the farm workers. Out of the 95 regular banana workers
only 45 and eight (8) supervisors including four (4) workers
who were not included in the workers master list of SACI
executed a deed of undertaking. As regards the 105-hectare
pomelo farm, SACI failed to affirm whether they are going
to pursue their offer. Likewise, DAR Region XI reported that
coverage of the same area is on-going, and a different group
of potential beneficiaries have already been identified.
Therefore, it could no longer be offered as a relocation site.
Foregoing considered, the Committee, during its 18 August
2000 Meeting, sustained its earlier recommendation to
deny the conversion of that portion of the property planted
to bananas and coconuts.
With regard to the rest. of the area, the Committee
deferred its decision subject to the delineation by the SACI
of the total area that they can develop within the allowed
five-year period. Likewise, the PLUTC is requesting the SACI
to submit a revised five-year development plan that will
show the schedule of development by phase, by year, and
the proposed use for each parcel of land.
WHEREFORE, premises considered, it is hereby ordered
that:
1. The application filed by the Sarangani Agricultural
Company, Inc. (SACI), represented by Cynthia Adao-Prat,
involving parcels of land planted to banana[s] and
coconut[s] and with Notice of Coverage identified as TCT
 Nos. T-10885 (20.9149 ha.), T-14359 (10.9390 ha.), T-41718
(3.3115 ha.), OCT No. V-19574 or T-9210 (12.1425
ha.), Lot 807 (6.7871 ha.) and portion of P-V-125 (95.00 ha.)
and [an] area covered by Lot 53 (5.0672 ha.) with an
aggregate area of 154.622 [actually it is 154.1622] hectares
is hereby DENIED. The Dar Regional Office of Region XI is
hereby instructed to determine the metes and bounds of
the area subject for distribution to the qualified FWBs.
2. The resolution of the application involving the rest
of the area applied for conversion is DEFERRED pending
submission by the applicant of a revised five-year
development plan indicating the specific use of each parcel
of land.
SO ORDERED.[8]
Petitioner filed a Motion for Reconsideration of the above decision
but the same was denied by the Court of Appeals in a Resolution,
dated September 24, 2004.
Their Motion for Reconsideration of the above Order having been denied,
respondents appealed to the Office of the President (O.P. Case No. 02-1-
47.4, alleging that the Secretary of Agrarian Reform committed serious
errors in 1) finding that a notice of coverage had been issued for the
banana area of the landholdings; 2) giving undue significance to the
protest or opposition by SARBAI; 3) requiring a deed of undertaking even
after applicant-appellants written commitment to pay whatever lawful
obligation SACI may incur as a consequence of the conversion; 4) holding
that farms with commercial farm deferment cannot be applied for
conversion; 5) ruling that irrigated lands suitable for agriculture were
disqualified for conversion; and 6) ruling that applicant-appellant had not
submitted a five-year development plan.[9]
In a Decision dated June 30, 2003, the Office of the President
through Presidential Assistant Manuel C. Domingo dismissed the appeal
and affirmed in toto the challenged DAR Orders. Respondents motion for
reconsideration was denied,[10] so they filed with the Court of Appeals a
petition for review raising substantially the same issues.
On July 19, 2004, the Court of Appeals rendered a Decision granting
the petition, the dispositive portion of which reads:
WHEREFORE, premises considered, the
present petition is hereby GIVEN DUE COURSE.
Consequently, the assailed Decision and Order dated June
30, 2003 and September 12, 2003, respectively, of the
Office of the President, as well as the Orders dated
November 9, 2000 and August 28, 2002 of the DAR
Secretary are hereby REVERSED and SET ASIDE insofar as
the DAR directs the MARO of Alabel, Sarangani to proceed
with the distribution of the banana and coconut areas
subject of the June 16, 1998 Notice of Coverage. The
Secretary of the Department of Agrarian Reform is hereby
directed to issue a conversion order covering the aforesaid
area under the terms and conditions as provided in
pertinent guidelines of the department. As to the rest of the
area applied for conversion, action on which has been
deferred, the DAR Regional Office (DAR Region No. XI) is
hereby DIRECTED to expedite the processing and evaluation
of petitioners land use conversion application in accordance
 with the provisions of DAR AO No.7, Series of 1997, and DAR
AO No. 01-99 whenever the provisions of the latter issuance
are made applicable to those applications filed before its
effectivity.
The DAR Secretary and all officers and employees
acting on his behalf are hereby enjoined from proceeding
with the distribution of petitioners lands under compulsory
acquisition provided in Sec. 16 of R.A. No. 6657. Whatever
actions already taken in pursuance of the June 16,
1998 Notice of Coverage under CARP are hereby nullified
for DARs failure to observe due process therein.
No pronouncement as to costs.
SO ORDERED.[11]
Hence, this petition alleging that the Court of Appeals erred:
I Sec. 11. Commercial Farming. Commercial farms,
WHEN IT RULED THAT THE JUNE 16, 1998 NOTICE OF
COVERAGE WAS ILLEGAL AS DAR ALLEGEDLY FAILED TO
OBSERVE DUE PROCESS.
II
WHEN IT RULED THAT DAR SHOULD USE
THE COMPREHENSIVE LAND USE PLANS AND
ACCOMPANYING ORDINANCE OF THE LOCAL SANGGUNIAN
AS PRIMARY REFERENCE SO AS NOT TO DEFEAT THE VERY
PURPOSE OF THE LOCAL GOVERNMENT UNIT (LGU)
CONCERNED IN RECLASSIFYING CERTAIN AREAS TO ACHIEVE
SOCIAL AND ECONOMIC BENEFITS IN PURSUANCE TO ITS
MANDATE TOWARDS THE GENERAL WELFARE.
III
WHEN IT FAILED TO TAKE INTO CONSIDERATION THE
BASIC PROVISIONS AND PRINCIPLES OF LAW WITH SPECIAL
ATTENTION TO THE REQUIREMENTS
OR PRECONDITIONS FOR LAND CLASSIFICATION/CONVERSIO
N AND THE BASIC MANDATE OF THE CARP.
With regard to the first issue on due process, this Court holds that, under
the circumstances, a notice of coverage is not an indispensable
requirement before DAR can acquire the subject lots or commercial farms,
which are covered by a deferment period[12] under the Comprehensive
Agrarian Reform Law (CARL) or R.A. No 6657 upon its effectivity on June
15, 1998. The pertinent provision of the law states:
which are private agricultural lands devoted to saltbeds,
fruit farms, orchards, vegetables and cut-flower farms,
cacao, coffee and rubber plantations, shall be subject to
immediate compulsory acquisition and distribution after ten
(10) years from the effectivity of this Act.[13] In the case of
new farms, the ten-year period shall begin from the first
year of commercial production and operation, as
determined by the DAR. During the ten-year period, the
Government shall initiate steps necessary to acquire these
lands, upon payment of just compensation for the land and
the improvements thereon, preferably in favor of organized
 cooperatives or associations, which shall thereafter manage
the said lands for the workers-beneficiaries. (AS amended
by R.A. 7881; Rules and regulations on the acquisition,
valuation compensation and distribution of deferred
commercial farms DAR AO No. 09, s. 1998)
DAR Administrative Order No.9, Series of 1998,[14] on the Rules and
Regulations on the Acquisition, Valuation, Compensation and Distribution
of Deferred Commercial Farms applies to all commercial farms as defined
under Section 11 of R.A. No. 6657:[15]
SEC. 2. Statement of Policies. The acquisition,
valuation, compensation, distribution, operation and
management of deferred commercial farms shall be
governed by the following policies:
(a) All commercial farms whose deferment expired
as of June 15, 1998 shall be subject to immediate
acquisition and distribution under the Comprehensive
Agrarian Reform Program (CARP). Those whose deferments
have yet to expire will be acquired and distributed only
upon expiration of their respective deferment period as
originally determined by the Department of Agrarian reform
(DAR), or earlier if the DAR determines that the purpose for
which it was deferred no longer exists and revokes its
deferment;
The process of acquisition of these commercial farms by DAR is
specifically provided under Article III, Section 9 of the above administrative
order, to wit:
SEC. 9. Procedure for Acquisition.The acquisition of
deferred commercial farms shall be governed by the
following procedures:
(a) Voluntary Offer to Sell/Compulsory Acquisition
1) The Order of Deferment previously issued over the
landholding shall serve, upon expiration of the deferment
period of the subject commercial farm, as the Notice of
Coverage,[16]supported by the Compliance Work Program
and Summary of Exceptions (Form A) originally submitted
with the approved deferment application. However, for
record purposes, the landowner shall be served a Notice of
Expiration of Deferment (Annex 2) which shall contain a
reminder of his right of retention, should he wish to
exercise the same;
2) In general, the procedure for acquisition shall
follow DAR Administrative Order No. 01, Series of 1998, as
amended by DAR Administrative Order No. 02, Series of
1996, entitled Revised Rules and Procedures governing the
Acquisition of Agricultural Lands subject of Voluntary offer
to Sell and Compulsory Acquisition Pursuant to Republic Act
No. 6657, subject to certain modifications intended to
expedite the process as provided herein.
Clearly, it was unnecessary for petitioner to issue a notice of
coverage to respondents in order to place the properties in question under
CARP coverage. Hence, the contention by respondents that due process
was not duly observed by petitioner must fail. Accordingly, the denial of
the application for conversion must be upheld.

As regards the second issue, DAR Administrative Order No. 7, Series
of 1997, or the Omnibus Rules and Procedures Governing Conversion of
Agricultural Lands to Non-agricultural Uses prescribes the guidelines for
land use conversion:
VI. POLICIES AND GUIDELINES
A.
B. General Guidelines
b) Conversion may be allowed if at the time of the
application, the lands are reclassified as commercial,
industrial, residential or other non-agricultural in the
new or revised town plans promulgated by the local
government unit (LGU) and approved by the Housing
and Land Use Regulatory Board (HLURB) or by the
Sangguniang Panlalawigan (SP) after June 15, 1988,
in accordance with Section 20 of R.A. No. 7160, as
implemented by MC No. 54, and Executive Order No.
72, Series of 1993[17] of the Office of the President.
In connection with the afore-stated administrative order, Section
20 of Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, empowers the local government units to reclassify
agricultural lands:
Sec. 20. Reclassification of Lands. - (a) A city or municipality
may, through an ordinance passed by the Sanggunian after
conducting public hearings for the purpose, authorize the
reclassification of agricultural lands and provide for the
manner of their utilization or disposition in the following
cases: (1) when the land ceases to be economically feasible
and sound for agricultural purposes as determined by the
Department of Agriculture or (2) where the land shall have
substantially greater economic value for residential,
commercial, or industrial purposes, as determined by the
Sanggunian concerned: Provided, That such reclassification
shall be limited to the following percentage of the total
agricultural land area at the time of the passage of the
ordinance:
(1) For highly urbanized and independent
component cities, FIFTEEN PERCENT (15%);
(2) For component cities and first to third class
municipalities, ten percent (10%), and
(3) For fourth to sixth class municipalities, five
percent (5%); Provided further, That agricultural
lands distributed to agrarian reform beneficiaries
pursuant to Republic Act No. 6657, otherwise known
as The Comprehensive Agrarian Reform Law, shall
not be affected by the said reclassification and the
conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
(c) The local government units shall in conformity
with existing laws, continue to prepare their
respective comprehensive land use plans enacted
though zoning ordinances which shall be the primary
and dominant bases for the future use of land
 resources: Provided, That the requirements for food
production, human settlements, and industrial
expansion shall be taken into consideration in the
preparation of such plans.
(e) Nothing in this section shall be construed as
repealing, amending or modifying in any manner the
provisions of R.A. No. 6657.[18]
Memorandum Circular No. 54 Prescribing the Guidelines Governing
Section 20 of R.A. No. 7160 Otherwise Known as the Local Government
Code of 1991 Authorizing Cities and Municipalities to Reclassify
Agricultural Lands Into Non-Agricultural Uses issued by President Fidel V.
Ramos on June 8, 1993 specified the scope and limitations on the power of
the cities and municipalities to reclassify agricultural lands into other uses.
It provided that all ordinances authorizing reclassification of agricultural
lands shall be subject to the review and approval of the province in the
case of component cities or municipalities, or by the HLURB for highly
urbanized or independent component cities in accordance with Executive
Order No. 72, Series of 1993, thus:
SECTION 4. Use of the comprehensive land use
plans[19]and ordinances as primary reference documents in
land use conversions. - Pursuant to RA 6657 and EO 129-A,
actions on applications for land use conversions on
individual landholdings shall remain as the responsibility of
DAR, which shall utilize as its primary reference documents
the comprehensive land use plans and accompanying
ordinance passed upon and approved by the LGUs
concerned, together with the National Land Use Policy.
Hence, with regard to agricultural lands that have been reclassified
for non-agricultural uses by the local government unit concerned, the CA is
correct in declaring that DAR should refer to the comprehensive land use
plans and the ordinances of the Sanggunian in assessing land use
conversion applications, thus:
Construing Sec. 20 of the Local Government
Code and the subsequent administrative issuances
implementing the same, we are of the opinion that while
the DAR retains the responsibility for approving or
disapproving applications for land use conversion filed by
individual landowners on their landholdings, the exercise of
such authority should be confined to compliance with the
requirements and limitations under existing laws and
regulations, such as the allowable percentage of agricultural
[area] to be reclassified, ensuring sufficient food production,
areas non-negotiable for conversion and those falling under
environmentally critical areas or highly restricted for
conversion under the NIPAS law. Definitely, the DARs power
in such cases may not be exercised in such a manner as to
defeat the very purpose of the LGU concerned in
reclassifying certain areas to achieve social and economic
benefits in pursuit of its mandate towards the general
welfare. Precisely, therefore, the DAR is required to use the
comprehensive land use plans and accompanying
ordinances of the local Sanggunian as primary references in
evaluating applications for land use conversion filed by
individual landowners. In this case, petitioners have already
complied with the standard requirements laid down under
the applicable rules and regulations of the DAR....[20]
 The conversion of agricultural lands into non-agricultural uses shall
be strictly regulated and may be allowed only when the conditions
prescribed under R.A. No. 6657 are present.[21] In this regard, the Court
agrees with the ratiocination of the CA that DARs scope of authority in
assessing land use conversion applications is limited to examining whether
the requirements prescribed by law and existing rules and regulations have
been complied with. This holds true in the present case where, because of
the creation of the Province of Sarangani and in view of its thrust to
urbanize, particularly its provincial capital which is
the Municipality of Alabel, the local government has reclassified certain
portions of its land area from agricultural to non-agricultural. Thus, to
reiterate, in accordance with E.O. No. 72, Series of 1993, and subject to the
limitations prescribed by law, DAR should utilize the comprehensive land
use plans in evaluating the land use conversion application of respondents
whose lands have already been reclassified by the local government for
non-agricultural uses.
This is not to say, however, that every property of respondents
which is included in the comprehensive land use plan of
the Municipality of Alabel shall be automatically granted non-coverage.
As mentioned earlier, said application is subject to the limitations and
conditions prescribed by law. One such limitation that is present here is
that a portion of respondents property of 376.5424 hectares, a portion
totaling 154.622 [or 154.1622] hectares which are planted to bananas and
coconuts, are covered by CARLs ten-year deferment scheme, which has
expired on June 15, 1998. By law, these lands are subject to redistribution
to CARP beneficiaries upon the lapse of the ten-year period, counted from
the date of the effectivity of the CARL or R.A. No. 6657 on June 15, 1988,
which was way before the creation of the Province of Sarangani and the
eventual reclassification of the agricultural lands into non-agricultural in
the Municipality of Alabel where respondents properties are located.
In short, the creation of the new Province of Sarangani, and the
reclassification that was effected by the Municipality of Alabel did not
operate to supersede the applicable provisions of R.A. No. 6657.
Moreover, Section 20 of the LGC of 1991 on the reclassification of
lands explicitly states that [n]othing in this section shall be construed as
repealing, amending or modifying in any manner the provisions of R.A.
No. 6657. Thus, where the law speaks in clear and categorical language,
there is no room for interpretation. There is only room for application.[22]
In view of the foregoing, the Court deems it unnecessary to
discuss the third issue presented in the petition.
WHEREFORE, the petition is PARTLY GRANTED insofar as the issue
on due process is concerned. In connection with this, the denial by the
Department of Agrarian Reform (DAR) of respondents application for
conversion with regard to the 154.622 [or 154.1622] hectares, the
deferment period of which has already expired, is AFFIRMED; and the
Orders of the DAR dated November 9, 2000 and August 28, 2002, directing
the MARO of Alabel, Sarangani to proceed with the distribution of the
banana and coconut areas subject of the June 16, 1998 Notice of Coverage,
are REINSTATED. The Decision and Resolution, dated July 19,
2004 and September 24, 2004, respectively, of the Court of Appeals in CA-
G.R. SP No. 79899, are hereby MODIFIED accordingly.
No costs.
SO
ORDE
RED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. NO. 192105 December 9, 2013
ANTONIO LOCSIN, II, Petitioner,
vs.
MEKENI FOOD CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
In the absence of specific terms and conditions governing a car plan
agreement between the employer and employe former may not retain the
installment payments made by the latter on the car plan and treat them as
rents for the use of the service vehicle, in the event that the employee
ceases his employment and is unable to complete the installment
payments on the vehicle. The underlying reason is that the service vehicle
was precisely used in the former' s business; any personal benefit obtained
by the employee from its use is merely incidental. This Petition for Review
on Certiorari1 assails the January 27, 2010 Decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 109550, as well as its April 23, 2010
Resolution3 denying petitioner’s Motion for Partial Reconsideration.4
Factual Antecedents
In February 2004, respondent Mekeni Food Corporation(Mekeni)–a
Philippine company engaged in food manufacturing and meat processing –
offered petitioner Antonio Locsin II the position of Regional Sales Manager
to over see Mekeni’s National Capital Region Supermarket/Food Service
and South Luzon operations. In addition to a compensation and benefit
package, Mekeni offered petitioner a car plan, under which one-half of the
cost of the vehicle is to be paid by the company and the other half to be
deducted from petitioner’s salary. Mekeni’s offer was contained in an
Offer Sheet5 which was presented to petitioner.
Petitioner began his stint as Mekeni Regional Sales Manager on March 17,
2004. To be able to effectively cover his appointed sales territory, Mekeni
furnished petitioner with a used Honda Civic car valued at ₱280,000.00,
which used to be the service vehicle of petitioner’s immediate supervisor.
Petitioner paid for his 50% share through salary deductions of ₱5,000.00
each month.
Subsequently, Locsin resigned effective February 25, 2006. By then, a total
of ₱112,500.00 had been deducted from his monthly salary and applied as
part of the employee’s share in the car plan. Mekeni supposedly put in an
equivalent amount as its share under the car plan. In his resignation letter,
petitioner made an offer to purchase his service vehicle by paying the
outstanding balance thereon. The parties negotiated, but could not agree
on the terms of the proposed purchase. Petitioner thus returned the
vehicle to Mekeni on May 2, 2006.
Petitioner made personal and written follow-ups regarding his unpaid
salaries, commissions, benefits, and offer to purchase his service vehicle.
Mekeni replied that the company car plan benefit applied only to
employees who have been with the company for five years; for this reason,
the balance that petitioner should pay on his service vehicle stood at
₱116,380.00 if he opts to purchase the same.
On May 3, 2007, petitioner filed against Mekeni and/or its President,
Prudencio S. Garcia, a Complaint6for the recovery of monetary claims
consisting of unpaid salaries, commissions, sick/vacation leave benefits,
and recovery of monthly salary deductions which were earmarked for his
cost-sharing in the car plan. The case was docketed in the National Labor
Relations Commission(NLRC), National Capital Region(NCR), Quezon City as
NLRC NCR CASE NO. 00-05-04139-07.
On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a
Decision,7 decreeing as follows: WHEREFORE, in the light of the foregoing
premises, judgment is hereby rendered directing respondents to turn-over
to complainant x x x the subject vehicle upon the said complainant’s
payment to them of the sum of ₱100,435.84.SO ORDERED.8 Ruling of the
National Labor Relations Commission On appeal,9 the Labor Arbiter’s
Decision was reversed in a February 27, 2009 Decision10 of the NLRC, thus:
WHEREFORE, premises considered, the appeal is hereby Granted. The
assailed Decision dated October 30, 2007 is hereby REVERSED and SET
ASIDE and a new one entered ordering respondent-appellee Mekeni Food
Corporation to pay complainant-appellee the following:
1.Unpaid Salary in the amount of ₱12,511.45;
2.Unpaid sick leave/vacation leave pay in the amount of
₱14,789.15;
3.Unpaid commission in the amount of ₱9,780.00; and
4.Reimbursement of complainant’s payment under the car plan
agreement in the amount of ₱112,500.00; and
5.The equivalent share of the company as part of the complainant’s
benefit under the car plan 50/50 sharing amounting to
₱112,500.00.
Respondent-Appellee Mekeni Food Corporation is hereby authorized to
deduct the sum of ₱4,736.50 representing complainant-appellant’s cash
advance from his total monetary award.
All other claims are dismissed for lack of merit.
SO ORDERED.11 The NLRC held that petitioner’s amortization payments on
his service vehicle amounting to ₱112,500.00 should be reimbursed; if not,
unjust enrichment would result, as the vehicle remained in the possession
and ownership of Mekeni.
On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a
Decision,7 decreeing as follows:
WHEREFORE, in the light of the foregoing premises, judgment is hereby
rendered directing respondents to turn-over to complainant x x xthe
subject vehicle upon the said complainant’s payment to them of the sum
of ₱100,435.84.
SO ORDERED.8
Ruling of the National Labor Relations Commission
On appeal,9 the Labor Arbiter’s Decision was reversedin a February 27,
2009 Decision10of the NLRC, thus:
WHEREFORE, premises considered, the appeal is hereby Granted. The
assailed Decision dated October 30, 2007 is hereby REVERSED and SET
ASIDE and a new one entered ordering respondent-appellee Mekeni Food
Corporation to pay complainant-appellee the following:
1.Unpaid Salary in the amount of ₱12,511.45;
2.Unpaid sick leave/vacation leave pay in the amount of
₱14,789.15;
3.Unpaid commission in the amount of ₱9,780.00; and
4.Reimbursement of complainant’s payment under the car plan
agreement in the amount of ₱112,500.00; and
5.The equivalent share of the company as part of the complainant’s
benefit under the car plan 50/50 sharing amounting to
₱112,500.00.
Respondent-Appellee Mekeni Food Corporation is hereby authorized to
deduct the sum of ₱4,736.50 representing complainant-appellant’s cash
advance from his total monetary award.
All other claims are dismissed for lack of merit.
SO ORDERED.11
The NLRC held that petitioner’s amortization payments on his service
vehicle amounting to ₱112,500.00 should be reimbursed; if not, unjust
enrichment would result, as the vehicle remained in the possession and
ownership of Mekeni.
In addition, the employer’s share in the monthly car plan payments should
likewise be awarded to petitioner because it forms part of the latter’s
benefits under the car plan. It held further that Mekeni’s claim that the
company car plan benefit applied only to employees who have been with
the company for five years has not been substantiated by its evidence, in
which case the car plan agreement should be construed in petitioner’s
favor. Mekeni moved to reconsider, but in an April 30, 2009
Resolution,12 the NLRC sustained its original findings.
Ruling of the Court of Appeals
Mekeni filed a Petition for Certiorari13 with the CA assailing the NLRC’s
February 27, 2009 Decision, saying that the NLRC committed grave abuse
of discretion in holding it liable to petitioner as it had no jurisdiction to
resolve petitioner’s claims, which are civil in nature.
On January 27, 2010, the CA issued the assailed Decision, decreeing as
follows:
WHEREFORE, the petition for certiorari is GRANTED. The Decision of the
National Labor Relations Commission dated 27 February 2009, in NLRC
NCR Case No. 00-05-04139-07, and its Resolution dated 30 April 2009
denying reconsideration thereof, are MODIFIED in that the reimbursement
of Locsin’s payment under the car plan in the amount of ₱112,500.00, and
the payment to him of Mekeni’s 50% share in the amount of ₱112,500.00
are DELETED. The rest of the decision is AFFIRMED.
SO ORDERED.14
In arriving at the above conclusion, the CA held that the NLRC possessed
jurisdiction over petitioner’s claims, including the amounts he paid under
the car plan, since his Complaint against Mekeni is one for the payment of
salaries and employee benefits. With regard to the car plan arrangement,
the CA applied the ruling in Elisco Tool Manufacturing Corporation v. Court
of Appeals,15 where it was held that –
First. Petitioner does not deny that private respondent Rolando Lantan
acquired the vehicle in question under a car plan for executives of the
Elizalde group of companies. Under a typical car plan, the company
advances the purchase price of a car to be paid back by the employee
through monthly deductions from his salary. The company retains
ownership of the motor vehicle until it shall have been fully paid for.
However, retention of registration of the car in the company’s name is only
a form of a lien on the vehicle in the event that the employee would
abscond before he has fully paid for it. There are also stipulations in car
plan agreements to the effect that should the employment of the
employee concerned be terminated before all installments are fully paid,
the vehicle will be taken by the employer and all installments paid shall be
considered rentals per agreement.16
In the absence of evidence as to the stipulations of the car plan
arrangement between Mekeni and petitioner, the CA treated petitioner’s
monthly contributions in the total amount of ₱112,500.00 as rentals for
the use of his service vehicle for the duration of his employment with
Mekeni. The appellate court applied Articles 1484-1486 of the Civil
Code,17 and added that the installments paid by petitioner should not be
returned to him inasmuch as the amounts are not unconscionable. It made
the following pronouncement:
Having used the car in question for the duration of his employment, it is
but fair that all of Locsin’s payments be considered as rentals therefor
which may be forfeited by Mekeni. Therefore, Mekeni has no obligation to
return these payments to Locsin. Conversely, Mekeni has no right to
demand the payment of the balance of the purchase price from Locsin
since the latter has already surrendered possession of the vehicle.18
Moreover, the CA held that petitioner cannot recover Mekeni’s
corresponding share in the purchase price of the service vehicle, as this
would constitute unjust enrichment on the part of petitioner at Mekeni’s
expense.
The CA affirmed the NLRC judgment in all other respects. Petitioner filed
his Motion for Partial Reconsideration,19but the CA denied the same in its
April 23, 2010 Resolution.
Thus, petitioner filed the instant Petition; Mekeni, on the other hand, took
no further action.
Issue
Petitioner raises the following solitary issue:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS ERRED IN
NOT CONSIDERING THE CAR PLAN PRIVILEGE AS PART OF THE
COMPENSATION PACKAGE OFFERED TO PETITIONER AT THE INCEPTION OF
HIS EMPLOYMENT AND INSTEAD LIKENED IT TO A CAR LOAN ON
INSTALLMENT, IN SPITE OF THE ABSENCE OF EVIDENCE ONRECORD.20
Petitioner’s Arguments
In his Petition and Reply,21 petitioner mainly argues that the CA erred in
treating his monthly contributions to the car plan, totaling ₱112,500.00, as
rentals for the use of his service vehicle during his employment; the car
plan which he availed ofwasa benefit and it formed part of the package of
economic benefits granted to him when he was hired as Regional Sales
Manager. Petitioner submits that this is shown by the Offer Sheet which
was shown to him and which became the basis for his decision to accept
the offer and work for Mekeni.
Petitioner adds that the absence of documentary or other evidence
showing the terms and conditions of the Mekeni company car plan cannot
justify a reliance on Mekeni’s self-serving claimsthat the full terms thereof
applied only to employees who have been with the company for at least
five years; in the absence of evidence, doubts should be resolved in his
favor pursuant to the policy of the law that affords protection to labor, as
well asthe principle that all doubts shouldbe construed to its benefit.
Finally, petitioner submits that the ruling in the Elisco Tool casecannot
apply to his case because the car plan subject of the said case involved a
car loan, which his car plan benefit was not; it was part of his
compensation package, and the vehicle was an important component of
his work which required constant and uninterrupted mobility. Petitioner
claims that the car plan was in fact more beneficial to Mekeni than to him;
besides, he did not choose to avail of it, as it was simply imposed upon
him. He concludes that it is only just that his payments should be refunded
and returned to him.
Petitioner thus prays for the reversal of the assailed CA Decision and
Resolution, and that the Court reinstate the NLRC’s February 27, 2009
Decision.
Respondent’s Arguments
In its Comment,22 Mekeni argues that the Petition does not raise questions
of law, but merely of fact, which thus requires the Court to review anew
issues already passed upon by the CA – an unauthorized exercise given
that the Supreme Court is not a trier of facts, nor is it its function to
analyze or weigh the evidence of the parties all over again.23 It adds that
the issue regarding the car plan and the conclusions of the CA drawn from
the evidence on record are questions of fact.
Mekeni asserts further that the service vehicle was merely a loan which
had to be paid through the monthly salary deductions.If it is not allowed to
recover on the loan, this would constitute unjust enrichment on the part of
petitioner.
Our Ruling
The Petition is partially granted.
To begin with, the Court notes that Mekeni did not file a similar petition
questioning the CA Decision; thus, it is deemed to have accepted what was
decreed. The only issue that must be resolved in this Petition, then, is
whether petitioner is entitled to a refund of all the amounts applied to the
cost of the service vehicle under the car plan.
When the conclusions of the CA are grounded entirely on speculation,
surmises and conjectures, or when the inferences made by it are
manifestly mistaken or absurd, its findings are subject to review by this
Court.24
From the evidence on record, it is seen that the Mekeni car plan offered to
petitioner was subject to no other term or condition than that Mekeni shall
cover one-half of its value, and petitioner shall in turn pay the other half
through deductions from his monthly salary.Mekeni has not shown, by
documentary evidence or otherwise, that there are other terms and
conditions governing its car plan agreement with petitioner. There is no
evidence to suggest that if petitioner failed to completely cover one-half of
the cost of the vehicle, then all the deductions from his salary going to the
cost of the vehicle will be treated as rentals for his use thereof while
working with Mekeni, and shall not be refunded. Indeed, there is no such
stipulation or arrangement between them. Thus, the CA’s reliance
on Elisco Toolis without basis, and its conclusions arrived at in the
questioned decision are manifestly mistaken. To repeat what was said
in Elisco Tool –
First. Petitioner does not deny that private respondent Rolando Lantan
acquired the vehicle in question under a car plan for executives of the
Elizalde group of companies. Under a typical car plan, the company
advances the purchase price of a car to be paid back by the employee
through monthly deductions from his salary. The company retains
ownership of the motor vehicle until it shall have been fully paid for.
However, retention of registration of the car in the company’s name is only
a form of a lien on the vehicle in the event that the employee would
abscond before he has fully paid for it. There are also stipulations in car
plan agreements to the effect that should the employment of the
employee concerned be terminated before all installments are fully paid,
the vehicle will be taken by the employer and all installments paid shall be
considered rentals per agreement.25 (Emphasis supplied)
It was made clear in the above pronouncement that installments made on
the car plan may be treated as rentals only when there is an express
stipulation in the car plan agreement to such effect. It was therefore
patent error for the appellate court to assume that, even in the absence of
express stipulation, petitioner’s payments on the car plan may be
considered as rentals which need not be returned.
Indeed, the Court cannot allow that payments made on the car plan should
be forfeited by Mekeni and treated simply as rentals for petitioner’s use of
the company service vehicle. Nor may they be retained by it as purported
loan payments, as it would have this Court believe. In the first place, there
is precisely no stipulation to such effect in their agreement. Secondly, it
may not be said that the car plan arrangement between the parties was a
benefit that the petitioner enjoyed; on the contrary, it wasan absolute
necessity in Mekeni’s business operations, which benefit edit to the fullest
extent: without the service vehicle, petitioner would have been unable to
rapidly cover the vast sales territory assigned to him, and sales or
marketing of Mekeni’s products could not have been booked or made fast
enough to move Mekeni’s inventory. Poor sales, inability to market
Mekeni’s products, a high rate of product spoil age resulting from stagnant
inventory, and poor monitoring of the sales territory are the necessary
consequences of lack of mobility. Without a service vehicle, petitioner
would have been placed at the mercy of inefficient and unreliable public
transportation; his official schedule would have been dependent on the
arrival and departure times of buses or jeeps, not to mention the
availability of seats in them. Clearly, without a service vehicle, Mekeni’s
business could only prosper at a snail’s pace, if not completely paralyzed.
Its cost of doing business would be higher as well. The Court expressed just
such a view in the past. Thus –
In the case at bar, the disallowance of the subject car plan benefits would
hamper the officials in the performance of their functions to promote and
develop trade which requires mobility in the performance of official
business. Indeed, the car plan benefits are supportive of the
implementation of the objectives and mission of the agency relative to the
nature of its operation and responsive to the exigencies of the
service.26 (Emphasis supplied) Any benefit or privilege enjoyed by
petitioner from using the service vehicle was merely incidental and
insignificant, because for the most part the vehicle was under Mekeni’s
control and supervision. Free and complete disposal is given to the
petitioner only after the vehicle’s cost is covered or paid in full. Until then,
the vehicle remains at the beck and call of Mekeni. Given the vast territory
petitioner had to cover to be able to perform his work effectively and
generate business for his employer, the service vehicle was an absolute
necessity, or else Mekeni’s business would suffer adversely. Thus, it is clear
that while petitioner was paying for half of the vehicle’s value, Mekeni was
reaping the full benefits from the use thereof.
In light of the foregoing, it is unfair to deny petitioner a refund of all his
contributions to the car plan.1âwphi1 Under Article 22 of the Civil Code,
"[e]very person who through an act of performance by another, or any
other means, acquires or comes into possession of something at the
expense of the latter without just or legal ground, shall return the same to
him." Article 214227of the same Code likewise clarifies that there are
certain lawful, voluntary and unilateral acts which give rise to the juridical
relation of quasi-contract, to the end that no one shall be unjustly enriched
or benefited at the expense of another. In the absence of specific terms
and conditions governing the car plan arrangement between the petitioner
and Mekeni, a quasi-contractual relation was created between them.
Consequently, Mekeni may not enrich itself by charging petitioner for the
use of its vehicle which is otherwise absolutely necessaryto the full and
effective promotion of its business. It may not, under the claim that
petitioner’s payments constitute rents for the use of the company vehicle,
refuse to refund what petitioner had paid, for the reasons that the car plan
did not carry such a condition; the subject vehicle is an old car that is
substantially, if not fully, depreciated; the car plan arrangement benefited
Mekeni for the most part; and any personal benefit obtained by petitioner
from using the vehicle was merely incidental.
Conversely, petitioner cannot recover the monetary value of Mekeni’s
counterpart contribution to the cost of the vehicle; that is not property or
money that belongs to him, nor was it intended to be given to him in lieu
of the car plan. In other words, Mekeni’s share of the vehicle’s cost was
not part of petitioner’s compensation package. To start with, the vehicle is
an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by
failing to refund petitioner’s payments, so should petitioner not be
awarded the value of Mekeni’s counter part contribution to the car plan,
as this would unjustly enrich him at Mekeni’s expense.
There is unjust enrichment ''when a person unjustly retains a benefit to the
loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity and good conscience."
The principle of unjust enrichment requires two conditions: (1) that a
person is benefited without a valid basis or justification, and (2) that such
benefit is derived at the expense of another. The main objective of the
principle against unjust enrichment is to prevent one from enriching
himself at the expense of another without just cause or consideration. x x
x28
WHEREFORE, the Petition is GRANTED IN PART. The assailed January 27,
2010 Decision and April 23, 2010 Resolution of the Court of Appeals in CA-
G.R. SP No. 109550 are MODIFIED, in that respondent Mekeni Food
Corporation is hereby ordered to REFUND petitioner Antonio Locsin II's
payments under the car plan agreement in the total amount
of₱112,500.00.
Thus, except for the counterpart or equivalent share of Mekeni Food
Corporation in the car plan agreement amounting to ₱112,500.00, which is
DELETED, the February 27, 2009 Decision of the National Labor Relations
Commission is affirmed in all respects.
SO ORDERED.
+G.R. No. 187226 January 28, 2015
CHERYLL SANTOS LEUS, Petitioner,
vs.
ST. SCHOLASTICA'S COLLEGE WESTGROVE and/or SR. EDNA QUIAMBAO,
OSB, Respondents.
DECISION
REYES, J.:
Cheryll Santos Leus (petitioner) was hired by St. Scholastica's College
Westgrove (SSCW), a Catholic educational institution, as a non-teaching
personnel, engaged in pre-marital sexual relations, got pregnant out of
wedlock, married the father of her child, and was dismissed by SSCW, in
that order. The question that has to be resolved is whether the petitioner's
conduct constitutes a ground for her dismissal.
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision1 dated
September 24, 2008 and Resolution2 dated March 2, 2009 issued by the
Court of Appeals (CA) in CA-G.R. SP No. 100188, which affirmed the
Resolutions dated February 28, 20073 and May 21, 20074 of the National
Labor Relations Commission (NLRC)in NLRC CA No. 049222-06.
The Facts
SSCW is a catholic and sectarian educational institution in Silang, Cavite. In
May 2001, SSCW hired the petitioner as an Assistant to SSCW’s Director of
the Lay Apostolate and Community Outreach Directorate.
Sometime in 2003, the petitioner and her boyfriend conceived a child out
of wedlock. When SSCW learned of the petitioner’s pregnancy, Sr. Edna
Quiambao (Sr. Quiambao), SSCW’s Directress, advised her to file a
resignation letter effective June 1, 2003. In response, the petitioner
informed Sr. Quiambao that she would not resign from her employment
just because she got pregnant without the benefit of marriage.5
On May 28, 2003, Sr. Quiambao formally directed the petitioner to explain
in writing why she should not be dismissed for engaging in pre-marital
sexual relations and getting pregnant as a result thereof, which amounts to
serious misconduct and conduct unbecoming of an employee of a Catholic
school.6
In a letter7 dated May 31, 2003, the petitioner explained that her
pregnancy out of wedlock does not amount to serious misconduct or
conduct unbecoming of an employee. She averred that she is unaware of
any school policy stating that being pregnant out of wedlock is considered
as a serious misconduct and, thus, a ground for dismissal. Further, the
petitioner requested a copy of SSCW’s policy and guidelines so that she
may better respond to the charge against her. On June 2, 2003, Sr.
Quiambao informed the petitioner that, pending the promulgation of a
"Support Staff Handbook," SSCW follows the 1992 Manual of Regulations
for Private Schools (1992 MRPS) on the causes for termination of
employments; that Section 94(e) of the 1992 MRPS cites "disgraceful or
immoral conduct" as a ground for dismissal in addition to the just causes
for termination of employment provided under Article 282 of the Labor
Code.8
On June 4, 2003, the petitioner, through counsel, sent Sr. Quiambao a
letter,9 which, in part, reads:
To us, pre-marital sex between two consenting adults without legal
impediment to marry each other who later on married each other does not
fall within the contemplation of "disgraceful or immoral conduct" and
"serious misconduct" of the Manual of Regulations for Private Schools and
the Labor Code of the Philippines.
Your argument that what happened to our client would set a bad example
to the students and other employees of your school is speculative and is
more imaginary than real. To dismiss her on that sole ground constitutes
grave abuse of management prerogatives.
Considering her untarnished service for two years, dismissing her with her
present condition would also mean depriving her to be more secure in
terms of financial capacity to sustain maternal needs.10
In a letter11 dated June 6, 2003, SSCW, through counsel, maintained that
pre-marital sexual relations, evenif between two consenting adults without
legal impediment to marry, is considered a disgraceful and immoral
conduct or a serious misconduct, which are grounds for the termination of
employment under the 1992 MRPS and the Labor Code. That SSCW, as a
Catholic institution of learning, has the right to uphold the teaching of the
Catholic Church and expect its employees to abide by the same. They
further asserted that the petitioner’s indiscretion is further aggravated by
the fact that she is the Assistant to the Director of the Lay Apostolate and
Community Outreach Directorate, a position of responsibility that the
students look up to as rolemodel. The petitioner was again directed to
submit a written explanation on why she should not be dismissed.
On June 9, 2003, the petitioner informed Sr. Quiambao that she adopts her
counsel’s letter dated June 4, 2003 as her written explanation.12
Consequently, in her letter13 dated June 11, 2003, Sr. Quiambao informed
the petitioner that her employment with SSCW is terminated on the
ground of serious misconduct. She stressed that pre-marital sexual
relations between two consenting adults with no impediment to marry,
even if they subsequently married, amounts to immoral conduct. She
further pointed out that SSCW finds unacceptable the scandal brought
about by the petitioner’s pregnancy out of wedlock as it ran counter to the
moral principles that SSCW stands for and teaches its students.
Thereupon, the petitioner filed a complaint for illegal dismissal with the
Regional Arbitration Branch of the NLRC in Quezon City against SSCW and
Sr. Quiambao (respondents). In her position paper,14 the petitioner
claimed that SSCW gravely abused its management prerogative as there
was no just cause for her dismissal. She maintained that her pregnancy out
of wedlock cannot be considered as serious misconduct since the same is a
purely private affair and not connected in any way with her duties as an
employee of SSCW. Further, the petitioner averred that she and her
boyfriend eventually got married even prior to her dismissal.
For their part, SSCW claimed that there was just cause to terminate the
petitioner’s employment with SSCW and that the same is a valid exercise
of SSCW’s management prerogative. They maintained that engaging in pre-
marital sex, and getting pregnant as a result thereof, amounts to a
disgraceful or immoral conduct, which is a ground for the dismissal of an
employee under the 1992 MRPS.
They pointed out that SSCW is a Catholic educational institution, which
caters exclusively to young girls; that SSCW would lose its credibility if it
would maintain employees who do not live up to the values and teachings
it inculcates to its students. SSCW further asserted that the petitioner,
being an employee of a Catholic educational institution, should have
strived to maintain the honor, dignity and reputation of SSCW as a Catholic
school.15
The Ruling of the Labor Arbiter
On February 28, 2006, the Labor Arbiter (LA) rendered a Decision,16 in
NLRC Case No. 6-17657-03-C which dismissed the complaint filed by the
petitioner. The LA found that there was a valid ground for the petitioner’s
dismissal; that her pregnancy out of wedlock is considered as a "disgraceful
and immoral conduct." The LA pointed out that, as an employee of a
Catholic educational institution, the petitioner is expected to live up to the
Catholic values taught by SSCW to its students. Likewise, the LA opined
that:
Further, a deep analysis of the facts would lead us to disagree with the
complainant that she was dismissed simply because she violate[d] a
Catholic [teaching]. It should not be taken in isolation but rather it should
be analyzed in the lightof the surrounding circumstances as a whole. We
must also take into [consideration] the nature of her work and the nature
of her employer-school. For us, it is not just an ordinary violation. It was
committed by the complainant in an environment where her strict
adherence to the same is called for and where the reputation of the school
is at stake. x x x.17
The LA further held that teachers and school employees, both in their
official and personal conduct, must display exemplary behavior and act in a
manner that is beyond reproach.
The petitioner appealed to the NLRC, insisting that there was no valid
ground for the termination of her employment. She maintained that her
pregnancy out of wedlock cannot be considered as "serious misconduct"
under Article 282 of the Labor Code since the same was not of such a grave
and aggravated character. She asserted that SSCW did not present any
evidence to establish that her pregnancy out of wedlock indeed eroded the
moral principles that it teaches its students.18
The Ruling of the NLRC
On February 28, 2007, the NLRC issued a Resolution,19 which affirmed the
LA Decision dated February 28, 2006. The NLRC pointed out that the
termination of the employment of the personnel of private schools is
governed by the 1992 MRPS; that Section 94(e) thereof cites "disgraceful
or immoral conduct" as a just cause for dismissal, in addition to the
grounds for termination of employment provided for under Article 282 of
the Labor Code. The NLRC held that the petitioner’s pregnancy out of
wedlock is a "disgraceful or immoral conduct" within the contemplation of
Section 94(e) of the 1992 MRPS and, thus, SSCW had a valid reason to
terminate her employment.
The petitioner sought reconsideration20 of the Resolution dated February
28, 2007 but it was denied by the NLRC in its Resolution21 dated May 21,
2007.
Unperturbed, the petitioner filed a petition22 for certiorari with the CA,
alleging that the NLRC gravely abused its discretion in ruling that there was
a valid ground for her dismissal. She maintained that pregnancy out of
wedlock cannot be considered as a disgraceful or immoral conduct; that
SSCW failed to prove that its students were indeed gravely scandalized by
her pregnancy out of wedlock. She likewise asserted that the NLRC erred in
applying Section 94(e) of the 1992 MRPS.
The Ruling of the CA
On September 24, 2008, the CA rendered the herein assailed
Decision,23 which denied the petition for certiorari filed by the petitioner.
The CA held that it is the provisions of the 1992 MRPS and not the Labor
Code which governs the termination of employment of teaching and non-
teaching personnel of private schools, explaining that:
It is a principle of statutory construction that where there are two statutes
that apply to a particular case, that which was specially intended for the
said case must prevail. Petitioner was employed by respondent private
Catholic institution which undeniably follows the precepts or norms of
conduct set forth by the Catholic Church. Accordingly, the Manual of
Regulations for Private Schools followed by it must prevail over the Labor
Code, a general statute. The Manual constitutes the private schools’
Implementing Rules and Regulations of Batas Pambansa Blg. 232 or the
Education Act of 1982. x x x.24
The CA further held that the petitioner’s dismissal was a valid exercise of
SSCW’s management prerogative to discipline and impose penalties on
erring employees pursuant toits policies, rules and regulations. The CA
upheld the NLRC’s conclusion that the petitioner’s pregnancy out of
wedlock is considered as a "disgraceful and immoral conduct" and, thus, a
ground for dismissal under Section 94(e) of the 1992 MRPS. The CA
likewise opined that the petitioner’s pregnancy out of wedlock is
scandalous per segiven the work environment and social milieu that she
was in, viz:
Under Section 94 (e) of the [MRPS], and even under Article 282 (serious
misconduct) of the Labor Code, "disgraceful and immoral conduct" is a
basis for termination of employment.
xxxx
Petitioner contends that her pre-marital sexual relations with her
boyfriend and her pregnancy prior to marriage was not disgraceful or
immoral conduct sufficient for her dismissal because she was not a
member of the school’s faculty and there is no evidence that her
pregnancy scandalized the school community.
We are not persuaded. Petitioner’s pregnancy prior to marriage is
scandalous in itself given the work environment and social milieu she was
in. Respondent school for young ladies precisely seeks to prevent its
students from situations like this, inculcating in them strict moral values
and standards. Being part of the institution, petitioner’sprivate and public
life could not be separated. Her admitted pre-marital sexual relations was
a violation of private respondent’s prescribed standards of conduct that
views pre-marital sex as immoral because sex between a man and a
woman must only take place within the bounds of marriage.
Finally, petitioner’s dismissal is a valid exercise of the employer-school’s
management prerogative to discipline and impose penalties on erring
employees pursuant to its policies, rules and regulations. x x x.25 (Citations
omitted)
The petitioner moved for reconsideration26 but it was denied by the CA in
its Resolution27 dated March 2, 2009.
Hence, the instant petition.
Issues
Essentially, the issues set forth by the petitioner for this Court’s decision
are the following: first, whether the CA committed reversible error in
ruling that it is the 1992 MRPS and not the Labor Code that governs the
termination of employment of teaching and non-teaching personnel of
private schools; and second, whether the petitioner’spregnancy out of
wedlock constitutes a valid ground to terminate her employment.
The Ruling of the Court
The Court grants the petition.
First Issue: Applicability of the 1992 MRPS
The petitioner contends that the CA, in ruling that there was a valid ground
to dismiss her, erred in applying Section 94 of the 1992 MRPS. Essentially,
she claims that the 1992 MRPS was issued by the Secretary of Education as
the revised implementing rules and regulations of Batas Pambansa Bilang
232 (BP 232) or the "Education Act of 1982." That there is no provision in
BP 232, which provides for the grounds for the termination of employment
of teaching and non-teaching personnel of private schools. Thus, Section
94 of the 1992 MRPS, which provides for the causes of terminating an
employment, isinvalid as it "widened the scope and coverage" of BP 232.
The Court does not agree.
The Court notes that the argument against the validity of the 1992 MRPS,
specifically Section 94 thereof, is raised by the petitioner for the first time
in the instant petition for review. Nowhere in the proceedings before the
LA, the NLRC or the CA did the petitioner assail the validity of the
provisions of the 1992 MRPS.
"It is well established that issues raised for the first time on appeal and not
raised in the proceedings in the lower court are barred by estoppel. Points
of law, theories, issues, and arguments not brought to the attention of the
trial court ought not to be considered by a reviewing court, as these
cannot be raised for the first time on appeal. To consider the alleged facts
and arguments belatedly raised would amount to trampling on the basic
principles of fair play, justice, and due process."28
In any case, even if the Court were to disregard the petitioner’s belated
claim of the invalidity of the 1992 MRPS, the Court still finds the same
untenable.
The 1992 MRPS, the regulation in force at the time of the instant
controversy, was issued by the Secretary of Education pursuant to BP 232.
Section 7029 of BP 232 vests the Secretary of Education with the authority
to issue rules and regulations to implement the provisions of BP 232.
Concomitantly, Section 5730 specifically empowers the Department of
Education to promulgate rules and regulations necessary for the
administration, supervision and regulation of the educational system in
accordance with the declared policy of BP 232.
The qualifications of teaching and non-teaching personnel of private
schools, as well as the causes for the termination of their employment, are
an integral aspect of the educational system of private schools.
Indubitably, ensuring that the teaching and non-teaching personnel of
private schools are not only qualified, but competent and efficient as well
goes hand in hand with the declared objective of BP 232 – establishing and
maintaining relevant quality education.31 It is thus within the authority of
the Secretary of Education to issue a rule, which provides for the dismissal
of teaching and non-teaching personnel of private schools based on their
incompetence, inefficiency, or some other disqualification.
Moreover, Section 69 of BP 232 specifically authorizes the Secretary of
Education to "prescribe and impose such administrative sanction as he
may deem reasonable and appropriate in the implementing rules and
regulations" for the "[g]ross inefficiency of the teaching or non-teaching
personnel" of private schools.32 Accordingly, contrary to the petitioner’s
claim, the Court sees no reason to invalidate the provisions of the 1992
MRPS, specifically Section 94 thereof. Second Issue: Validity of the
Petitioner’s Dismissal
The validity of the petitioner’s dismissal hinges on the determination of
whether pregnancy out of wedlock by an employee of a catholic
educational institution is a cause for the termination of her employment.
In resolving the foregoing question,the Court will assess the matter from a
strictly neutral and secular point of view – the relationship between SSCW
as employer and the petitioner as an employee, the causes provided for by
law in the termination of suchrelationship, and the evidence on record.
The ground cited for the petitioner’s dismissal, i.e., pre-marital sexual
relations and, consequently, pregnancy outof wedlock, will be assessed as
to whether the same constitutes a valid ground for dismissal pursuant to
Section 94(e) of the 1992 MRPS.
The standard of review in a Rule 45
petition from the CA decision in
labor cases.
In a petition for review under Rule 45 of the Rules of Court, such as the
instant petition, where the CA’s disposition in a labor case is sought to be
calibrated, the Court’s review isquite limited. In ruling for legal correctness,
the Court has to view the CA decision in the same context that the petition
for certiorari it ruled upon was presented to it; the Court has to examine
the CA decision from the prism of whether it correctly determined the
presence or absence of grave abuse of discretion in the NLRC decision
before it, not on the basis of whether the NLRC decision on the merits of
the case was correct.33
The phrase "grave abuse of discretion" is well-defined in the Court’s
jurisprudence. It exists where an act of a court or tribunal is performed
with a capricious or whimsical exercise ofjudgment equivalent to lack of
jurisdiction.34 The determination of the presence or absence of grave
abuse of discretion does not include an inquiry into the correctness of the
evaluation of evidence, which was the basis of the labor agency in reaching
its conclusion.35
Nevertheless, while a certiorari proceeding does not strictly include an
inquiry as to the correctness of the evaluation of evidence (that was the
basis of the labor tribunals in determining their conclusion), the
incorrectness of its evidentiary evaluation should not result in negating the
requirement of substantial evidence. Indeed, when there is a showing that
the findings or conclusions, drawn from the same pieces of evidence, were
arrived at arbitrarily or in disregard of the evidence on record, they may be
reviewed by the courts. In particular, the CA can grant the petition for
certiorariif it finds that the NLRC, in its assailed decision or resolution,
made a factual finding not supported by substantial evidence. A decision
that is not supported by substantial evidence is definitely a decision
tainted with grave abuse of discretion.36
The labor tribunals’ respective
conclusions that the petitioner’s
pregnancy is a "disgraceful or
immoral conduct" were arrived at
arbitrarily.
The CA and the labor tribunals affirmed the validity of the petitioner’s
dismissal pursuant to Section 94(e) of the 1992 MRPS, which provides that:
Sec. 94. Causes of Terminating Employment – In addition to the just causes
enumerated in the Labor Code, the employment of school personnel,
including faculty, may be terminated for any of the following causes:
xxxx
e. Disgraceful or immoral conduct;
xxxx
The labor tribunals concluded that the petitioner’s pregnancy out of
wedlock, per se, is "disgraceful and immoral"considering that she is
employed in a Catholic educational institution. In arriving at such
conclusion, the labor tribunals merely assessed the fact of the petitioner’s
pregnancy vis-à-visthe totality of the circumstances surrounding the same.
However, the Court finds no substantial evidence to support the
aforementioned conclusion arrived at by the labor tribunals. The fact of
the petitioner’s pregnancy out of wedlock, without more, is not enough to
characterize the petitioner’s conduct as disgraceful or immoral. There must
be substantial evidence to establish that pre-marital sexual relations and,
consequently, pregnancy outof wedlock, are indeed considered disgraceful
or immoral.
The totality of the circumstances
surrounding the conduct alleged to
be disgraceful or immoral must be
assessed against the prevailing
norms of conduct.
In Chua-Qua v. Clave,37 the Court stressed that to constitute immorality,
the circumstances of each particular case must be holistically considered
and evaluated in light of the prevailing norms of conductand applicable
laws.38Otherwise stated, it is not the totality of the circumstances
surrounding the conduct per se that determines whether the same is
disgraceful or immoral, but the conduct that is generally accepted by
society as respectable or moral. If the conduct does not conform to what
society generally views as respectable or moral, then the conduct is
considered as disgraceful or immoral. Tersely put, substantial evidence
must be presented, which would establish that a particular conduct,
viewed in light of the prevailing norms of conduct, is considered
disgraceful or immoral.
Thus, the determination of whether a conduct is disgraceful or immoral
involves a two-step process: first, a consideration of the totality of the
circumstances surrounding the conduct; and second, an assessment of the
said circumstances vis-à-visthe prevailing norms of conduct, i.e., what the
society generally considers moral and respectable.
That the petitioner was employed by a Catholic educational institution per
se does not absolutely determine whether her pregnancy out of wedlock is
disgraceful or immoral. There is still a necessity to determine whether the
petitioner’s pregnancy out of wedlock is considered disgraceful or immoral
in accordance with the prevailing norms of conduct.
Public and secular morality should
determine the prevailing norms of
conduct, not religious morality.
However, determining what the prevailing norms of conduct are
considered disgraceful or immoral is not an easy task. An individual’s
perception of what is moral or respectable is a confluence of a myriad of
influences, such as religion, family, social status, and a cacophony of
others. In this regard, the Court’s ratiocination in Estrada v. Escritor39 is
instructive.
In Estrada, an administrative case against a court interpreter charged with
disgraceful and immoral conduct, the Court stressed that in determining
whether a particular conduct can be considered as disgraceful and
immoral, the distinction between public and secular morality on the one
hand, and religious morality, on the other, should be kept in mind.40 That
the distinction between public and secular morality and religious morality
is important because the jurisdiction of the Court extends only to public
and secular morality.41 The Court further explained that:
The morality referred to in the law is public and necessarily secular, not
religiousx x x. "Religious teachings as expressed in public debate may
influence the civil public order but public moral disputes may be resolved
only on grounds articulable in secular terms." Otherwise, if government
relies upon religious beliefs in formulating public policies and morals, the
resulting policies and morals would require conformity to what some
might regard as religious programs or agenda.The non-believers would
therefore be compelled to conform to a standard of conduct buttressed by
a religious belief, i.e., to a "compelled religion," anathema to religious
freedom. Likewise, if government based its actions upon religious beliefs, it
would tacitly approve or endorse that belief and thereby also tacitly
disapprove contrary religious or non-religious views that would not
support the policy. As a result, government will not provide full religious
freedom for all its citizens, or even make it appear that those whose beliefs
are disapproved are second-class citizens. Expansive religious freedom
therefore requires that government be neutral in matters of religion;
governmental reliance upon religious justification is inconsistent with this
policy of neutrality.
In other words, government action, including its proscription of immorality
as expressed in criminal law like concubinage, must have a secular
purpose. That is, the government proscribes this conduct because it is
"detrimental (or dangerous) to those conditions upon which depend the
existence and progress of human society" and not because the conduct is
proscribed by the beliefs of one religion or the other. Although admittedly,
moral judgments based on religion might have a compelling influence on
those engaged in public deliberations over what actions would be
considered a moral disapprobation punishable by law. After all, they might
also be adherents of a religion and thus have religious opinions and moral
codes with a compelling influence on them; the human mind endeavors to
regulate the temporal and spiritual institutions of society in a uniform
manner, harmonizing earth with heaven. Succinctly put, a law could be
religious or Kantian or Aquinian or utilitarian in its deepest roots, but it
must have an articulable and discernible secular purpose and justification
to pass scrutiny of the religion clauses.x x x.42(Citations omitted and
emphases ours)
Accordingly, when the law speaks of immoral or, necessarily, disgraceful
conduct, it pertains to public and secular morality; it refers to those
conducts which are proscribed because they are detrimental to conditions
upon which depend the existence and progress of human society. Thus, in
Anonymous v. Radam,43 an administrative case involving a court utility
worker likewise charged with disgraceful and immoral conduct, applying
the doctrines laid down in Estrada, the Court held that:
For a particular conduct to constitute "disgraceful and immoral" behavior
under civil service laws, it must be regulated on account of the concerns of
public and secular morality. It cannot be judged based on personal bias,
specifically those colored by particular mores. Nor should it be grounded
on "cultural" values not convincingly demonstrated to have been
recognized in the realm of public policy expressed in the Constitution and
the laws. At the same time, the constitutionally guaranteed rights (such as
the right to privacy) should be observed to the extent that they protect
behavior that may be frowned upon by the majority.
Under these tests, two things may be concluded from the fact that an
unmarried woman gives birth out of wedlock:
(1) if the father of the child is himself unmarried, the woman is not
ordinarily administratively liable for disgraceful and immoral
conduct.It may be a not-so-ideal situation and may cause
complications for both mother and child but it does not give cause
for administrative sanction. There is no law which penalizes an
unmarried mother under those circumstances by reason of her
sexual conduct or proscribes the consensual sexual activity
between two unmarried persons. Neither does the situation
contravene any fundamental state policy as expressed in the
Constitution, a document that accommodates various belief
systems irrespective of dogmatic origins.
(2) if the father of the child born out of wedlock is himself married
to a woman other thanthe mother, then there is a cause for
administrative sanction against either the father or the mother. In
sucha case, the "disgraceful and immoral conduct" consists of
having extramarital relations with a married person. The sanctity of
marriage is constitutionally recognized and likewise affirmed by our
statutes as a special contract of permanent union. Accordingly,
judicial employees have been sanctioned for their dalliances with
married persons or for their own betrayals of the marital vow of
fidelity.
In this case, it was not disputed that, like respondent, the father of her
child was unmarried. Therefore, respondent cannot be held liable for
disgraceful and immoral conduct simply because she gave birth to the child
Christian Jeon out of wedlock.44 (Citations omitted and emphases ours)
Both Estrada and Radamare administrative cases against employees in the
civil service. The Court, however, sees no reason not to apply the doctrines
enunciated in Estrada and Radamin the instant case. Estrada and
Radamalso required the Court to delineate what conducts are considered
disgraceful and/or immoral as would constitute a ground for dismissal.
More importantly, as in the said administrative cases, the instant case
involves an employee’s security of tenure; this case likewise concerns
employment, which is not merely a specie of property right, but also the
means by which the employee and those who depend on him live.45
It bears stressing that the right of an employee to security of tenure is
protected by the Constitution. Perfunctorily, a regular employee may not
be dismissed unless for cause provided under the Labor Code and other
relevant laws, in this case, the 1992 MRPS. As stated above, when the law
refers to morality, it necessarily pertains to public and secular morality and
not religious morality. Thus, the proscription against "disgraceful or
immoral conduct" under Section 94(e) of the 1992 MRPS, which is made as
a cause for dismissal, must necessarily refer to public and secular morality.
Accordingly, in order for a conduct tobe considered as disgraceful or
immoral, it must be "‘detrimental (or dangerous) to those conditions upon
which depend the existence and progress of human society’ and not
because the conduct is proscribed by the beliefs of one religion or the
other."
Thus, in Santos v. NLRC,46 the Court upheld the dismissal of a teacher who
had an extra-marital affair with his co-teacher, who is likewise married, on
the ground of disgraceful and immoral conduct under Section 94(e) of the
1992 MRPS. The Court pointed out that extra-marital affair is considered as
a disgraceful and immoral conduct is an afront to the sanctity of marriage,
which is a basic institution of society, viz:
We cannot overemphasize that having an extra-marital affair is an afront
to the sanctity of marriage, which is a basic institution of society. Even our
Family Code provides that husband and wife must live together, observe
mutual love, respect and fidelity. This is rooted in the fact that both our
Constitution and our laws cherish the validity of marriage and unity of the
family. Our laws, in implementing this constitutional edict on marriage and
the family underscore their permanence, inviolability and solidarity.47
The petitioner’s pregnancy out of
wedlock is not a disgraceful or
immoral conduct since she and the
father of her child have no
impediment to marry each other.
In stark contrast to Santos, the Court does not find any circumstance in this
case which would lead the Court to conclude that the petitioner
committed a disgraceful or immoral conduct. It bears stressing that the
petitioner and her boyfriend, at the time they conceived a child, had no
legal impediment to marry. Indeed, even prior to her dismissal, the
petitioner married her boyfriend, the father of her child. As the Court held
in Radam, there is no law which penalizes an unmarried mother by reason
of her sexual conduct or proscribes the consensual sexual activity between
two unmarried persons; that neither does such situation contravene any
fundamental state policy enshrined in the Constitution.
Admittedly, the petitioner is employed in an educational institution where
the teachings and doctrines of the Catholic Church, including that on pre-
marital sexual relations, is strictly upheld and taught to the students. That
her indiscretion, which resulted in her pregnancy out of wedlock, is
anathema to the doctrines of the Catholic Church. However, viewed
against the prevailing norms of conduct, the petitioner’s conduct cannot
be considered as disgraceful or immoral; such conduct is not denounced by
public and secular morality. It may be an unusual arrangement, but it
certainly is not disgraceful or immoral within the contemplation of the law.
To stress, pre-marital sexual relations between two consenting adults who
have no impediment to marry each other, and, consequently, conceiving a
child out of wedlock, gauged from a purely public and secular view of
morality, does not amount to a disgraceful or immoral conduct under
Section 94(e) of the 1992 MRPS.
Accordingly, the labor tribunals erred in upholding the validity of the
petitioner’s dismissal. The labor tribunals arbitrarily relied solely on the
circumstances surrounding the petitioner’s pregnancy and its supposed
effect on SSCW and its students without evaluating whether the
petitioner’s conduct is indeed considered disgraceful or immoral in view of
the prevailing norms of conduct. In this regard, the labor tribunals’
respective haphazard evaluation of the evidence amounts to grave abuse
of discretion, which the Court will rectify.
The labor tribunals’ finding that the petitioner’s pregnancy out of wedlock
despite the absence of substantial evidence is not only arbitrary, but a
grave abuse of discretion, which should have been set right by the CA.
There is no substantial evidence to
prove that the petitioner’s pregnancy
out of wedlock caused grave scandal
to SSCW and its students.
SSCW claimed that the petitioner was primarily dismissed because her
pregnancy out of wedlock caused grave scandal to SSCW and its students.
That the scandal brought about by the petitioner’s indiscretion prompted
them to dismiss her. The LA upheld the respondents’ claim, stating that:
In this particular case, an "objective" and "rational evaluation" of the facts
and circumstances obtaining in this case would lead us to focus our
attention x x x on the impact of the act committed by the complainant. The
act of the complainant x x x eroded the moral principles being taught and
project[ed] by the respondent [C]atholic school to their young lady
students.48 (Emphasis in the original)
On the other hand, the NLRC opined that:
In the instant case, when the complainant-appellant was already
conceiving a child even before she got married, such is considered a
shameful and scandalous behavior, inimical to public welfare and policy. It
eroded the moral doctrines which the respondent Catholic school, an
exclusive school for girls, is teaching the young girls. Thus, when the
respondent-appellee school terminated complainant-appellant’s services,
it was a valid exercise of its management prerogative. Whether or not she
was a teacher is of no moment. There is no separate set of rules for non-
teaching personnel. Respondents-appellees uphold the teachings of the
Catholic Church on pre-marital sex and that the complainant-appellant as
an employee of the school was expected to abide by this basic principle
and to live up with the standards of their purely Catholic values. Her
subsequent marriage did not take away the fact that she had engaged in
pre-marital sex which the respondent-appellee school denounces as the
same is opposed to the teachings and doctrines it espouses.49 (Emphasis
ours)
Contrary to the labor tribunals’ declarations, the Court finds that SSCW
failed to adduce substantial evidence to prove that the petitioner’s
indiscretion indeed caused grave scandal to SSCW and its students. Other
than the SSCW’s bare allegation, the records are bereft of any evidence
that would convincingly prove that the petitioner’s conduct indeed
adversely affected SSCW’s integrity in teaching the moral doctrines, which
it stands for. The petitioner is only a non-teaching personnel; her
interaction with SSCW’s students is very limited. Itis thus quite impossible
that her pregnancy out of wedlock caused such a grave scandal, as claimed
by SSCW, as to warranther dismissal.
Settled is the rule that in termination cases, the burden of proving that the
dismissal of the employees was for a valid and authorized cause rests on
the employer. It is incumbent upon the employer to show by substantial
evidence that the termination of the employment of the employees was
validly made and failure to discharge that duty would mean that the
dismissal is not justified and therefore illegal.50 "Substantial evidence is
more than a mere scintilla of evidence. It means such relevant evidence as
a reasonable mind might accept as adequateto support a conclusion, even
if other minds equally reasonable mightconceivably opine otherwise."51
Indubitably, bare allegations do not amount to substantial evidence.
Considering that the respondents failed to adduce substantial evidence to
prove their asserted cause for the petitioner’s dismissal, the labor tribunals
should not have upheld their allegations hook, line and sinker. The labor
tribunals’ respective findings, which were arrived at sans any substantial
evidence, amounts to a grave abuse of discretion, which the CA should
have rectified. "Security of tenure is a right which may not be denied on
mere speculation of any unclearand nebulous basis."52
The petitioner’s dismissal is not a
valid exercise of SSCW’s
management prerogative.
The CA be labored the management prerogative of SSCW to discipline its
employees. The CA opined that the petitioner’s dismissal is a valid exercise
of management prerogative to impose penalties on erring employees
pursuant to its policies, rules and regulations.
The Court does not agree.
The Court has held that "management is free to regulate, according to its
own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay off of workers and discipline,
dismissal and recall of workers. The exercise of management prerogative,
however, is not absolute as it must beexercised in good faith and with due
regard to the rights of labor." Management cannot exercise its prerogative
in a cruel, repressive, or despotic manner.53
SSCW, as employer, undeniably has the right to discipline its employees
and, if need be, dismiss themif there is a valid cause to do so. However, as
already explained, there is no cause to dismiss the petitioner. Her conduct
is not considered by law as disgraceful or immoral. Further, the
respondents themselves have admitted that SSCW, at the time of the
controversy, does not have any policy or rule against an employee who
engages in pre-marital sexual relations and conceives a child as a result
thereof. There being no valid basis in law or even in SSCW’s policy and
rules, SSCW’s dismissal of the petitioner is despotic and arbitrary and, thus,
not a valid exercise of management prerogative.
In sum, the Court finds that the petitioner was illegally dismissed as there
was no just cause for the termination of her employment. SSCW failed to
adduce substantial evidence to establish that the petitioner’s conduct, i.e.,
engaging in pre-marital sexual relations and conceiving a child out of
wedlock, assessed in light of the prevailing norms of conduct, is considered
disgraceful or immoral. The labor tribunals gravely abused their discretion
in upholding the validity of the petitioner’s dismissal as the charge against
the petitioner lay not on substantial evidence, but on the bare allegations
of SSCW. In turn, the CA committed reversible error in upholding the
validity of the petitioner’s dismissal, failing torecognize that the labor
tribunals gravely abused their discretion in ruling for the respondents.
The petitioner is entitled to
separation pay, in lieu of actual
reinstatement, full backwages and
attorney’s fees, but not to moral and
exemplary damages.
Having established that the petitioner was illegally dismissed, the Court
now determines the reliefs thatshe is entitled to and their extent. Under
the law and prevailing jurisprudence, "an illegally dismissed employee is
entitled to reinstatement as a matter of right."54 Aside from the instances
provided under Articles 28355 and 28456 of the Labor Code, separation pay
is, however, granted when reinstatement is no longer feasible because of
strained relations between the employer and the employee. In cases of
illegal dismissal, the accepted doctrine is that separation pay is available in
lieu of reinstatement when the latter recourse is no longer practical or in
the best interest of the parties.57
In Divine Word High School v. NLRC,58 the Court ordered the employer
Catholic school to pay the illegally dismissed high school teacher
separation pay in lieu of actual reinstatement since her continued
presence as a teacher in the school "may well bemet with antipathy and
antagonism by some sectors in the school community."59
In view of the particular circumstances of this case, it would be more
prudent to direct SSCW to pay the petitioner separation pay inlieu of
actual reinstatement. The continued employment of the petitioner with
SSCW would only serve to intensify the atmosphere of antipathy and
antagonism between the parties. Consequently, the Court awards
separation pay to the petitioner equivalent to one (1) month pay for every
year of service, with a fraction of at least six (6) months considered as one
(1) whole year, from the time of her illegal dismissal up to the finality of
this judgment, as an alternative to reinstatement.
Also, "employees who are illegally dismissed are entitled to full backwages,
inclusive of allowances and other benefits or their monetary equivalent,
computed from the time their actual compensation was withheld from
them up to the time of their actual reinstatement but if reinstatement is
no longer possible, the backwages shall be computed from the time of
their illegal termination up to the finality of the decision."60 Accordingly,
the petitioner is entitled to an award of full backwages from the time she
was illegally dismissed up to the finality of this decision.
Nevertheless, the petitioner is not entitled to moral and exemplary
damages. "A dismissed employee isentitled to moral damages when the
dismissal is attended by bad faith or fraud or constitutes an act oppressive
to labor, or is done in a manner contrary to good morals, good customs or
public policy. Exemplary damages may be awarded if the dismissal is
effected in a wanton, oppressive or malevolent manner."61
"Bad faith, under the law, does not simply connote bad judgment or
negligence.1âwphi1 It imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, or a breach of a known duty
through some motive or interest or ill will that partakes of the nature of
fraud."62
"It must be noted that the burden of proving bad faith rests on the one
alleging it"63 since basic is the principle that good faith is presumed and he
who alleges bad faith has the duty to prove the same.64 "Allegations of bad
faith and fraud must be proved by clear and convincing evidence."65
The records of this case are bereft of any clear and convincing evidence
showing that the respondents acted in bad faith or in a wanton or
fraudulent manner in dismissing the petitioner. That the petitioner was
illegally dismissed is insufficient to prove bad faith. A dismissal may be
contrary to law but by itself alone, it does not establish bad faith to entitle
the dismissed employee to moral damages. The award of moral and
exemplary damages cannot be justified solely upon the premise that the
employer dismissed his employee without cause.66
However, the petitioner is entitled to attorney’s fees in the amount of 10%
of the total monetary award pursuant to Article 11167 of the Labor Code.
"It is settled that where an employee was forced to litigate and, thus, incur
expenses to protect his rights and interest, the award of attorney’s fees is
legally and morally justifiable."68
Finally, legal interest shall be imposed on the monetary awards herein
granted at the rate of six percent (6%) per annumfrom the finality of this
judgment until fully paid.69
WHEREFORE, in consideration of the foregoing disquisitions, the petition is
GRANTED. The Decision dated September 24, 2008 and Resolution dated
March 2, 2009 of the Court of Appeals in CA-G.R. SP No. 100188 are hereby
REVERSED and SET ASIDE.
The respondent, St. Scholastica’s College Westgrove, is hereby declared
guilty of illegal dismissal and is hereby ORDERED to pay the petitioner,
Cheryll Santos Leus, the following: (a) separation pay in lieu of actual
reinstatement equivalent to one (1) month pay for every year of service,
with a fraction of at least six (6) months considered as one (1) whole year
from the time of her dismissal up to the finality of this Decision; (b) full
backwages from the time of her illegal dismissal up to the finality of this
Decision; and (c) attorney’s fees equivalent to ten percent (10%) of the
total monetary award. The monetary awards herein granted shall earn
legal interest at the rate of six percent (6%) per annumfrom the date of the
finality of this Decision untilfully paid. The case is REMANDED to the Labor
Arbiter for the computation of petitioner’s monetary awards.

SO ORDERED.