G.R. No.

130866 September 16, 1998

ST. MARTIN FUNERAL HOME, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO ARICAYOS, respondents.

The present petition for certiorari stemmed from a complaint for illegal dismissal filed by herein private respondent before
the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga.
Private respondent alleges that he started working as Operations Manager of petitioner St. Martin Funeral Home on
February 6, 1995. However, there was no contract of employment executed between him and petitioner nor was his name
included in the semi-monthly payroll. On January 22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by petitioner of its value added tax (VAT) to the Bureau of
Internal Revenue (BIR). 1

Petitioner on the other hand claims that private respondent was not its employee but only the uncle of Amelita Malabed,
the owner of petitioner St. Martin's Funeral Home. Sometime in 1995, private respondent, who was formerly working as an
overseas contract worker, asked for financial assistance from the mother of Amelita. Since then, as an indication of
gratitude, private respondent voluntarily helped the mother of Amelita in overseeing the business.

In January 1996, the mother of Amelita passed away, so the latter then took over the management of the business. She
then discovered that there were arrears in the payment of taxes and other government fees, although the records
purported to show that the same were already paid. Amelita then made some changes in the business operation and
private respondent and his wife were no longer allowed to participate in the management thereof. As a consequence, the
latter filed a complaint charging that petitioner had illegally terminated his employment. 2

Based on the position papers of the parties, the labor arbiter rendered a decision in favor of petitioner on October 25,
1996 declaring that no employer-employee relationship existed between the parties and, therefore, his office had no
jurisdiction over the case. 3

Not satisfied with the said decision, private respondent appealed to the NLRC contending that the labor arbiter erred (1) in
not giving credence to the evidence submitted by him; (2) in holding that he worked as a "volunteer" and not as an
employee of St. Martin Funeral Home from February 6, 1995 to January 23, 1996, or a period of about one year; and (3)
in ruling that there was no employer-employee relationship between him and petitioner.4

On June 13, 1997, the NLRC rendered a resolution setting aside the questioned decision and remanding the case to the
labor arbiter for immediate appropriate proceedings.5 Petitioner then filed a motion for reconsideration which was denied
by the NLRC in its resolution dated August 18, 1997 for lack of merit, 6 hence the present petition alleging that the NLRC
committed grave abuse of discretion.7

Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent and opportune to
reexamine the functional validity and systemic practicability of the mode of judicial review it has long adopted and still
follows with respect to decisions of the NLRC. The increasing number of labor disputes that find their way to this Court
and the legislative changes introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor
Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now
stridently call for and warrant a reassessment of that procedural aspect.

We prefatorily delve into the legal history of the NLRC. It was first established in the Department of Labor by P.D. No. 21
on October 14, 1972, and its decisions were expressly declared to be appealable to the Secretary of Labor and,
ultimately, to the President of the Philippines.

On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to take effect six months after its
promulgation. 8 Created and regulated therein is the present NLRC which was attached to the Department of Labor and
Employment for program and policy coordination only. 9 Initially, Article 302 (now, Article 223) thereof also granted an
aggrieved party the remedy of appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391
subsequently amended said provision and abolished such appeals. No appellate review has since then been provided for.

Thus, to repeat, under the present state of the law, there is no provision for appeals from the decision of the NLRC. 10 The
present Section 223, as last amended by Section 12 of R.A. No. 6715, instead merely provides that the Commission shall
decide all cases within twenty days from receipt of the answer of the appellee, and that such decision shall be final and
executory after ten calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court has no jurisdiction to review the decisions of
the NLRC, and formerly of the Secretary of Labor, since there is no legal provision for appellate review thereof, the Court
nevertheless rejected that thesis. It held that there is an underlying power of the courts to scrutinize the acts of such
agencies on questions of law and jurisdiction even though no right of review is given by statute; that the purpose of judicial
review is to keep the administrative agency within its jurisdiction and protect the substantial rights of the parties; and that it
is that part of the checks and balances which restricts the separation of powers and forestalls arbitrary and unjust
adjudications. 11

Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the remedy of the aggrieved party is to
timely file a motion for reconsideration as a precondition for any further or subsequent remedy, 12 and then seasonably
avail of the special civil action of certiorari under Rule 65, 13 for which said Rule has now fixed the reglementary period of
sixty days from notice of the decision. Curiously, although the 10-day period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of the Labor Code, it has been held that this Court may still take
cognizance of the petition for certiorari on jurisdictional and due process considerations if filed within the reglementary
period under Rule 65. 14

Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally provided as follows:

Sec. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary
writs or processes, whether or not in aid of its appellate jurisdiction;

(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards, or commissions, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1)
of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive evidence and perform
any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.

These provisions shall not apply to decisions and interlocutory orders issued under the Labor Code of the Philippines and
by the Central Board of Assessment Appeals. 15

Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902 effective March 18, 1995, to wit:

Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary
writs or processes, whether or not in aid of its appellate jurisdiction;

(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act,
and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.

The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and
perform any and all acts necessary to resolve factual issues raised in cases falling within its original and
appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. Trials or
hearings in the Court of Appeals must be continuous and must be completed within, three (3) months,
unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the lower appellate court, 16 the following
amendments of the original provisions of Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:

1. The last paragraph which excluded its application to the Labor Code of the Philippines and the Central Board of
Assessment Appeals was deleted and replaced by a new paragraph granting the Court of Appeals limited powers to
conduct trials and hearings in cases within its jurisdiction.

2. The reference to the Labor Code in that last paragraph was transposed to paragraph (3) of the section, such that the
original exclusionary clause therein now provides "except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis supplied).

3. Contrarily, however, specifically added to and included among the quasi-judicial agencies over which the Court of
Appeals shall have exclusive appellate jurisdiction are the Securities and Exchange Commission, the Social Security
Commission, the Employees Compensation Commission and the Civil Service Commission.

This, then, brings us to a somewhat perplexing impassè, both in point of purpose and terminology. As earlier explained,
our mode of judicial review over decisions of the NLRC has for some time now been understood to be by a petition
for certiorari under Rule 65 of the Rules of Court. This is, of course, a special original action limited to the resolution of
jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all cases that have been brought to us, grave
abuse of discretion amounting to lack of jurisdiction.

It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate jurisdiction to the
Court of Appeals over all final adjudications of the Regional Trial Courts and the quasi-judicial agencies generally or
specifically referred to therein except, among others, "those falling within the appellate jurisdiction of the Supreme Court in
accordance with . . . the Labor Code of the Philippines under Presidential Decree No. 442, as amended, . . . ." This would
necessarily contradict what has been ruled and said all along that appeal does not lie from decisions of the NLRC. 17 Yet,
under such excepting clause literally construed, the appeal from the NLRC cannot be brought to the Court of Appeals, but
to this Court by necessary implication.

The same exceptive clause further confuses the situation by declaring that the Court of Appeals has no appellate
jurisdiction over decisions falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of B.P. No. 129, and those specified cases in Section 17 of the Judiciary Act of 1948. These
cases can, of course, be properly excluded from the exclusive appellate jurisdiction of the Court of Appeals. However,
because of the aforementioned amendment by transposition, also supposedly excluded are cases falling within the
appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is illogical and impracticable, and
Congress could not have intended that procedural gaffe, since there are no cases in the Labor Code the decisions,
resolutions, orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for
that matter.

A review of the legislative records on the antecedents of R.A. No. 7902 persuades us that there may have been an
oversight in the course of the deliberations on the said Act or an imprecision in the terminology used therein. In fine,
Congress did intend to provide for judicial review of the adjudications of the NLRC in labor cases by the Supreme Court,
but there was an inaccuracy in the term used for the intended mode of review. This conclusion which we have reluctantly
but prudently arrived at has been drawn from the considerations extant in the records of Congress, more particularly on
Senate Bill No. 1495 and the Reference Committee Report on S. No. 1495/H. No. 10452. 18

19
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship speech from which we reproduce
the following excerpts:

The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129, reorganized the Court of
Appeals and at the same time expanded its jurisdiction and powers. Among others, its appellate
jurisdiction was expanded to cover not only final judgment of Regional Trial Courts, but also all final
judgment(s), decisions, resolutions, orders or awards of quasi-judicial agencies, instrumentalities, boards
and commissions, except those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948.
 Mr. President, the purpose of the law is to ease the workload of the Supreme Court by the transfer of
some of its burden of review of factual issues to the Court of Appeals. However, whatever benefits that
can be derived from the expansion of the appellate jurisdiction of the Court of Appeals was cut short by
the last paragraph of Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the
"decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central
Board of Assessment Appeals.

Among the highest number of cases that are brought up to the Supreme Court are labor cases. Hence,
Senate Bill No. 1495 seeks to eliminate the exceptions enumerated in Section 9 and, additionally,
extends the coverage of appellate review of the Court of Appeals in the decision(s) of the Securities and
Exchange Commission, the Social Security Commission, and the Employees Compensation Commission
to reduce the number of cases elevated to the Supreme Court. (Emphases and corrections ours)

xxx xxx xxx

Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides the ideal situation of
drastically reducing the workload of the Supreme Court without depriving the litigants of the privilege of
review by an appellate tribunal.

In closing, allow me to quote the observations of former Chief Justice Teehankee in 1986 in the Annual
Report of the Supreme Court:

. . . Amendatory legislation is suggested so as to relieve the Supreme Court of the burden

of reviewing these cases which present no important issues involved beyond the
particular fact and the parties involved, so that the Supreme Court may wholly devote its
time to cases of public interest in the discharge of its mandated task as the guardian of
the Constitution and the guarantor of the people's basic rights and additional task
expressly vested on it now "to determine whether or not there has been a grave abuse of
discretion amounting to lack of jurisdiction on the part of any branch or instrumentality of
the Government.

We used to have 500,000 cases pending all over the land, Mr. President. It has been cut down to 300,000
cases some five years ago. I understand we are now back to 400,000 cases. Unless we distribute the
work of the appellate courts, we shall continue to mount and add to the number of cases pending.

In view of the foregoing, Mr. President, and by virtue of all the reasons we have submitted, the Committee
on Justice and Human Rights requests the support and collegial approval of our Chamber.

xxx xxx xxx

Surprisingly, however, in a subsequent session, the following Committee Amendment was introduced by the said sponsor
and the following proceedings transpired: 20

Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance with the Constitution," add
the phrase "THE LABOR CODE OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED." So that it
becomes clear, Mr. President, that issues arising from the Labor Code will still be appealable to the
Supreme Court.

The President. Is there any objection? (Silence) Hearing none, the amendment is approved.

Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was also discussed with
our Colleagues in the House of Representatives and as we understand it, as approved in the House, this
was also deleted, Mr. President.

The President. Is there any objection? (Silence) Hearing none, the amendment is approved.

Senator Roco. There are no further Committee amendments, Mr. President.

Senator Romulo. Mr. President, I move that we close the period of Committee amendments.
 The President. Is there any objection? (Silence) Hearing none, the amendment is approved. (Emphasis
supplied).

xxx xxx xxx

Thereafter, since there were no individual amendments, Senate Bill No. 1495 was passed on second reading and being a
certified bill, its unanimous approval on third reading followed. 21 The Conference Committee Report on Senate Bill No.
1495 and House Bill No. 10452, having theretofore been approved by the House of Representatives, the same was
likewise approved by the Senate on February 20, 1995, 22 inclusive of the dubious formulation on appeals to the Supreme
Court earlier discussed.

The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of the word "appeal" in relation thereto and in the instances we have
noted could have been a lapsus plumae because appeals by certiorari and the original action for certiorari are both modes
of judicial review addressed to the appellate courts. The important distinction between them, however, and with which the
Court is particularly concerned here is that the special civil action of certiorari is within the concurrent original jurisdiction
of this Court and the Court of Appeals; 23 whereas to indulge in the assumption that appeals by certiorari to the Supreme
Court are allowed would not subserve, but would subvert, the intention of Congress as expressed in the sponsorship
speech on Senate Bill No. 1495.

Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that recourse from the NLRC to
the Court of Appeals as an initial step in the process of judicial review would be circuitous and would prolong the
proceedings. On the contrary, as he commendably and realistically emphasized, that procedure would be advantageous
to the aggrieved party on this reasoning:

On the other hand, Mr. President, to allow these cases to be appealed to the Court of Appeals would give
litigants the advantage to have all the evidence on record be reexamined and reweighed after which the
findings of facts and conclusions of said bodies are correspondingly affirmed, modified or reversed.

Under such guarantee, the Supreme Court can then apply strictly the axiom that factual findings of the
Court of Appeals are final and may not be reversed on appeal to the Supreme Court. A perusal of the
records will reveal appeals which are factual in nature and may, therefore, be dismissed outright by
minute resolutions. 24

While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law, on this score we add
the further observations that there is a growing number of labor cases being elevated to this Court which, not being a trier
of fact, has at times been constrained to remand the case to the NLRC for resolution of unclear or ambiguous factual
findings; that the Court of Appeals is procedurally equipped for that purpose, aside from the increased number of its
component divisions; and that there is undeniably an imperative need for expeditious action on labor cases as a major
aspect of constitutional protection to labor.

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme
Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all
such petitions should hence forth be initially filed in the Court of Appeals in strict observance of the doctrine on the
hierarchy of courts as the appropriate forum for the relief desired.

Apropos to this directive that resort to the higher courts should be made in accordance with their hierarchical order, this
pronouncement in Santiago vs. Vasquez, et al. 25 should be taken into account:

One final observation. We discern in the proceedings in this case a propensity on the part of petitioner,
and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to
disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite
the fact that the same is available in the lower courts in the exercise of their original or concurrent
jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only
because of the imposition upon the precious time of this Court but also because of the inevitable and
resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or
referred to the lower court as the proper forum under the rules of procedure, or as better equipped to
resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this
Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate
 courts or where exceptional and compelling circumstances justify availment of a remedy within and calling
for the exercise of our primary jurisdiction.

WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby REMANDED, and all pertinent
records thereof ordered to be FORWARDED, to the Court of Appeals for appropriate action and disposition consistent
with the views and ruling herein set forth, without pronouncement as to costs.

SO ORDERED.

PUREFOODS CORPORATION, Petitioner, v. NAGKAKAISANG SAMAHANG MANGGAGAWA NG PUREFOODS

RANK-AND-FILE, ST. THOMAS FREE WORKERS UNION, PUREFOODS GRANDPARENT FARM WORKERS UNION
and PUREFOODS UNIFIED LABOR ORGANIZATION, Respondents.
 DECISION

NACHURA, J.:

The petitioner, Purefoods Corporation, in this Rule 45 petition seeks the reversal of the appellate court's dismissal of
its certiorari petition, and our consequent review of the labor commission's finding that it committed unfair labor practice
and illegally dismissed the concerned union members.

Three labor organizations and a federation are respondents in this case' Nagkakaisang Samahang Manggagawa Ng
Purefoods Rank-And-File (NAGSAMA-Purefoods), the exclusive bargaining agent of the rank-and-file workers of
Purefoods' meat division throughout Luzon; St. Thomas Free Workers Union (STFWU), of those in the farm in Sto.
Tomas, Batangas; and Purefoods Grandparent Farm Workers Union (PGFWU), of those in the poultry farm in Sta. Rosa,
Laguna. These organizations were affiliates of the respondent federation, Purefoods Unified Labor Organization (PULO). 1

On February 8, 1995, NAGSAMA-Purefoods manifested to petitioner corporation its desire to re-negotiate the collective
bargaining agreement (CBA) then due to expire on the 28th of the said month. Together with its demands and proposal,
the organization submitted to the company its January 28, 1995 General Membership Resolution approving and
supporting the union's affiliation with PULO, adopting the draft CBA proposals of the federation, and authorizing a
negotiating panel which included among others a PULO representative. While Purefoods formally acknowledged receipt
of the union's proposals, it refused to recognize PULO and its participation, even as a mere observer, in the negotiation.
Consequently, notwithstanding the PULO representative's non-involvement, the negotiation of the terms of the CBA still
resulted in a deadlock. A notice of strike was then filed by NAGSAMA-Purefoods on May 15, 1995. In the subsequent
conciliation conference, the deadlock issues were settled except the matter of the company's recognition of the union's
affiliation with PULO.2

In the meantime, STFWU and PGFWU also submitted their respective proposals for CBA renewal, and their general
membership resolutions which, among others, affirmed the two organizations' affiliation with PULO. Consistent with its
stance, Purefoods refused to negotiate with the unions should a PULO representative be in the panel. The parties then
agreed to postpone the negotiations indefinitely.3

On July 24, 1995, however, the petitioner company concluded a new CBA with another union in its farm in Malvar,
Batangas. Five days thereafter, or on July 29, 1995, at around 8:00 in the evening, four company employees facilitated
the transfer of around 23,000 chickens from the poultry farm in Sto. Tomas, Batangas (where STFWU was the exclusive
bargaining agent) to that in Malvar. The following day, the regular rank-and-file workers in the Sto. Tomas farm were
refused entry in the company premises; and on July 31, 1995, 22 STFWU members were terminated from employment.
The farm manager, supervisors and electrical workers of the Sto. Tomas farm, who were members of another union, were
nevertheless retained by the company in its employ.4

Aggrieved by these developments, the four respondent labor organizations jointly instituted a complaint for unfair labor
practice (ULP), illegal lockout/dismissal and damages, docketed as NLRC Case No. NLRC-NCR-00-07-05159-95, with
the Labor Arbitration Branch of the National Labor Relations Commission (NLRC).5

In the proceedings before the Labor Arbiter (LA), Purefoods interposed, among others, the defenses that PULO was not a
legitimate labor organization or federation for it did not have the required minimum number of member unions; that the
closure of the Sto. Tomas farm was not arbitrary but was the result of the financial non-viability of the operations therein,
or the consequence of the landowner's pre-termination of the lease agreement; that the other complainants had no cause
of action considering that it was only the Sto. Tomas farm which was closed; that the termination of the employees
complied with the 30-day notice requirement and that the said employees were paid 30-day advance salary in addition to
separation pay; and that the concerned union, STFWU, lost its status as bargaining representative when the Sto. Tomas
farm was closed.6

On August 17, 1999, the LA rendered a Decision7 dismissing the complaint, and declaring that the company neither
committed ULP nor illegally dismissed the employees.

On appeal, the NLRC reversed the ruling of the LA, ordered the payment of P500,000.00 as moral and exemplary
damages and the reinstatement with full backwages of the STFWU members. In its March 16, 2001 Decision (CA No.
022059-00), the labor commission ruled that the petitioner company's refusal to recognize the labor organizations'
affiliation with PULO was unjustified considering that the latter had been granted the status of a federation by the Bureau
of Labor Relations; and that this refusal constituted undue interference in, and restraint on the exercise of the employees'
right to self-organization and free collective bargaining. The NLRC said that the real motive of the company in the sudden
closure of the Sto. Tomas farm and the mass dismissal of the STFWU members was union busting, as only the union
members were locked out, and the company subsequently resumed operations of the closed farm under a new contract
with the landowner. Because the requisites of a valid lockout were absent, the NLRC concluded that the company
committed ULP. The dispositive portion of the NLRC decision reads:

WHEREFORE, respondent Purefoods Corporation is hereby directed to reinstate effective October 1, 2000 employees-
members of the STFWU-PULO who were illegally locked out on July 30, 1995 and to pay them their full backwages.

SO ORDERED.

Its motion for reconsideration having been denied,8 the petitioner corporation filed a Rule 65 petition before the Court of
Appeals (CA) docketed as CA-G.R. SP No. 66871.

In the assailed October 25, 2001 Resolution, 9 the appellate court dismissed outright the company's Petition
for Certiorari on the ground that the verification and certification of non-forum shopping was defective since no proof of
authority to act for and on behalf of the corporation was submitted by the corporation's senior vice-president who signed
the same; thus, the petition could not be deemed filed for and on behalf of the real party-in-interest. Then, the CA, in its
November 22, 2001 Resolution,10 denied petitioner's motion for reconsideration of the dismissal order.

Dissatisfied, petitioner instituted before us the instant Petition for Review on Certiorari under Rule 45.

The petition is denied.

Section 1, Rule 65 of the Rules of Court explicitly mandates that the Petition for Certiorari shall be accompanied by a
sworn certification of non-forum shopping.11 When the petitioner is a corporation, inasmuch as corporate powers are
exercised by the board, the certification shall be executed by a natural person authorized by the corporation's board of
directors.12 Absent any authority from the board, no person, not even the corporate officers, can bind the
corporation.13 Only individuals who are vested with authority by a valid board resolution may sign the certificate of non-
forum shopping in behalf of the corporation, and proof of such authority must be attached to the petition. 14 Failure to
attach to the certification any proof of the signatory's authority is a sufficient ground for the dismissal of the petition. 15

In the instant case, the senior vice-president of the petitioner corporation signed the certificate of non-forum shopping. No
proof of his authority to sign the said certificate was, however, attached to the petition. Thus, applying settled
jurisprudence, we find that the CA committed no error when it dismissed the petition.

The Court cannot even be liberal in the application of the rules because liberality is warranted only in instances when
there is substantial compliance with the technical requirements in pleading and practice, and when there is sufficient
explanation that the non-compliance is for a justifiable cause, such that the outright dismissal of the case will defeat the
administration of justice.16 Here, the petitioner corporation, in its motion for reconsideration before the appellate court and
in its petition before us, did not present a reasonable explanation for its non-compliance with the rules. Further, it cannot
be said that petitioner substantially complied therewith, because it did not attach to its motion for reconsideration any
proof of the authority of its signatory. It stands to reason, therefore, that this Court now refuses to condone petitioner's
procedural transgression.

We must reiterate that the rules of procedure are mandatory, except only when, for the most persuasive of reasons, they
may be relaxed to relieve a litigant of an injustice not commensurate to the degree of his thoughtlessness in not complying
therewith.17 While technical rules of procedure are not designed to frustrate the ends of justice, they are provided to effect
the proper and orderly disposition of cases and effectively prevent the clogging of court dockets.18

Be that as it may, this Court has examined the records if only to dispel any doubt on the propriety of the dismissal of the
case, and we found no abuse of discretion, much more a grave one, on the part of the labor commission in reversing the
ruling of the LA.

It is crystal clear that the closure of the Sto. Tomas farm was made in bad faith. Badges of bad faith are evident from the
following acts of the petitioner: it unjustifiably refused to recognize the STFWU's and the other unions' affiliation with
PULO; it concluded a new CBA with another union in another farm during the agreed indefinite suspension of the
collective bargaining negotiations; it surreptitiously transferred and continued its business in a less hostile environment;
and it suddenly terminated the STFWU members, but retained and brought the non-members to the Malvar farm.
Petitioner presented no evidence to support the contention that it was incurring losses or that the subject farm's lease
agreement was pre-terminated. Ineluctably, the closure of the Sto. Tomas farm circumvented the labor organization's right
to collective bargaining and violated the members' right to security of tenure.19

The Court reiterates that the Petition for Certiorari under Rule 65 of the Rules of Court filed with the CA will prosper only if
there is clear showing of grave abuse of discretion or an act without or in excess of jurisdiction on the part of the
NLRC.20 It was incumbent, then, for petitioner to prove before the appellate court that the labor commission capriciously
and whimsically exercised its judgment tantamount to lack of jurisdiction, or that it exercised its power in an arbitrary or
despotic manner by reason of passion or personal hostility, and that its abuse of discretion is so patent and gross as to
amount to an evasion of a positive duty enjoined or to act at all in contemplation of law. 21 Here, as aforesaid, no such
proof was adduced by petitioner. We, thus, declare that the NLRC ruling is not characterized by grave abuse of discretion.
Accordingly, the same is also affirmed.

However, this Court makes the following observations and modifications:

We deem as proper the award of moral and exemplary damages. We hold that the sudden termination of the STFWU
members is tainted with ULP because it was done to interfere with, restrain or coerce employees in the exercise of their
right to self-organization. Thus, the petitioner company is liable for the payment of the aforesaid damages. 22 Notable,
though, is that this award, while stated in the body of the NLRC decision, was omitted in the dispositive portion of the said
ruling. To prevent any further confusion in the implementation of the said decision, we correct the dispositive portion of the
ruling to include the payment of P500,000.00 as moral and exemplary damages to the illegally dismissed STFWU
members.

As to the order of reinstatement, the Court modifies the same in that if it is no longer feasible considering the length of
time that the employees have been out of petitioner's employ, 23 the company is ordered to pay the illegally dismissed
STFWU members separation pay equivalent to one (1) month pay, or one-half (1/2) month pay for every year of service,
whichever is higher.24

The releases and quitclaims, as well as the affidavits of desistance, 25 signed by the concerned employees, who were then
necessitous men at the time of execution of the documents, are declared invalid and ineffective. They will not bar the
workers from claiming the full measure of benefits flowing from their legal rights. 26

WHEREFORE, premises considered, the Petition for Review on Certiorari is DENIED. The October 25, 2001 and the
November 22, 2001 Resolutions of the Court of Appeals in CA-G.R. SP No. 66871 are AFFIRMED. The March 16, 2001
Decision of the National Labor Relations Commission in NLRC-NCR-00-07-05159-95 (CA No. 022059-00)
is AFFIRMED with the MODIFICATION that petitioner company is ordered to: (1) reinstate the illegally dismissed STFWU
members and pay them full backwages from the time of illegal termination up to actual reinstatement; (2) if reinstatement
is no longer feasible, pay the illegally dismissed STFWU members their separation pay equivalent to one month pay, or
one-half month pay for every year of service, whichever is higher; and (3) pay moral and exemplary damages in the
aggregate amount of P500,000.00 to the said illegally dismissed STFWU members.

G.R. No. 115849 January 24, 1996

FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers Bank of the Philippines) and MERCURIO
RIVERA, petitioners,
vs.
COURT OF APPEALS, CARLOS EJERCITO, in substitution of DEMETRIO DEMETRIA, and JOSE
JANOLO, respondents.

DECISION

PANGANIBAN, J.:

In the absence of a formal deed of sale, may commitments given by bank officers in an exchange of letters and/or in a
meeting with the buyers constitute a perfected and enforceable contract of sale over 101 hectares of land in Sta. Rosa,
Laguna? Does the doctrine of "apparent authority" apply in this case? If so, may the Central Bank-appointed conservator
of Producers Bank (now First Philippine International Bank) repudiate such "apparent authority" after said contract has
been deemed perfected? During the pendency of a suit for specific performance, does the filing of a "derivative suit" by
the majority shareholders and directors of the distressed bank to prevent the enforcement or implementation of the sale
violate the ban against forum-shopping?

Simply stated, these are the major questions brought before this Court in the instant Petition for review on certiorari under
Rule 45 of the Rules of Court, to set aside the Decision promulgated January 14, 1994 of the respondent Court of
Appeals1 in CA-G.R CV No. 35756 and the Resolution promulgated June 14, 1994 denying the motion for reconsideration.
The dispositive portion of the said Decision reads:

WHEREFORE, the decision of the lower court is MODIFIED by the elimination of the damages awarded under
paragraphs 3, 4 and 6 of its dispositive portion and the reduction of the award in paragraph 5 thereof to
P75,000.00, to be assessed against defendant bank. In all other aspects, said decision is hereby AFFIRMED.

All references to the original plaintiffs in the decision and its dispositive portion are deemed, herein and hereafter,
to legally refer to the plaintiff-appellee Carlos C. Ejercito.

Costs against appellant bank.

The dispositive portion of the trial court's2 decision dated July 10, 1991, on the other hand, is as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the
defendants as follows:

1. Declaring the existence of a perfected contract to buy and sell over the six (6) parcels of land situated at Don
Jose, Sta. Rosa, Laguna with an area of 101 hectares, more or less, covered by and embraced in Transfer
Certificates of Title Nos. T-106932 to T-106937, inclusive, of the Land Records of Laguna, between the plaintiffs
as buyers and the defendant Producers Bank for an agreed price of Five and One Half Million (P5,500,000.00)
Pesos;

2. Ordering defendant Producers Bank of the Philippines, upon finality of this decision and receipt from the
plaintiffs the amount of P5.5 Million, to execute in favor of said plaintiffs a deed of absolute sale over the
aforementioned six (6) parcels of land, and to immediately deliver to the plaintiffs the owner's copies of T.C.T.
Nos. T-106932 to T- 106937, inclusive, for purposes of registration of the same deed and transfer of the six (6)
titles in the names of the plaintiffs;

3. Ordering the defendants, jointly and severally, to pay plaintiffs Jose A. Janolo and Demetrio Demetria the sums
of P200,000.00 each in moral damages;

4. Ordering the defendants, jointly and severally, to pay plaintiffs the sum of P100,000.00 as exemplary damages
;

5. Ordering the defendants, jointly and severally, to pay the plaintiffs the amount of P400,000.00 for and by way of
attorney's fees;
 6. Ordering the defendants to pay the plaintiffs, jointly and severally, actual and moderate damages in the amount
of P20,000.00;

With costs against the defendants.

After the parties filed their comment, reply, rejoinder, sur-rejoinder and reply to sur-rejoinder, the petition was given due
course in a Resolution dated January 18, 1995. Thence, the parties filed their respective memoranda and reply
memoranda. The First Division transferred this case to the Third Division per resolution dated October 23, 1995. After
carefully deliberating on the aforesaid submissions, the Court assigned the case to the undersigned ponente for the
writing of this Decision.

The Parties

Petitioner First Philippine International Bank (formerly Producers Bank of the Philippines; petitioner Bank, for brevity) is a
banking institution organized and existing under the laws of the Republic of the Philippines. Petitioner Mercurio Rivera
(petitioner Rivera, for brevity) is of legal age and was, at all times material to this case, Head-Manager of the Property
Management Department of the petitioner Bank.

Respondent Carlos Ejercito (respondent Ejercito, for brevity) is of legal age and is the assignee of original plaintiffs-
appellees Demetrio Demetria and Jose Janolo.

Respondent Court of Appeals is the court which issued the Decision and Resolution sought to be set aside through this
petition.

The Facts

The facts of this case are summarized in the respondent Court's Decision 3 as follows:

(1) In the course of its banking operations, the defendant Producer Bank of the Philippines acquired six parcels of
land with a total area of 101 hectares located at Don Jose, Sta. Rose, Laguna, and covered by Transfer
Certificates of Title Nos. T-106932 to T-106937. The property used to be owned by BYME Investment and
Development Corporation which had them mortgaged with the bank as collateral for a loan. The original plaintiffs,
Demetrio Demetria and Jose O. Janolo, wanted to purchase the property and thus initiated negotiations for that
purpose.

(2) In the early part of August 1987 said plaintiffs, upon the suggestion of BYME investment's legal counsel, Jose
Fajardo, met with defendant Mercurio Rivera, Manager of the Property Management Department of the defendant
bank. The meeting was held pursuant to plaintiffs' plan to buy the property (TSN of Jan. 16, 1990, pp. 7-10). After
the meeting, plaintiff Janolo, following the advice of defendant Rivera, made a formal purchase offer to the bank
through a letter dated August 30, 1987 (Exh. "B"), as follows:

August 30, 1987

The Producers Bank of the Philippines

Makati, Metro Manila

Attn. Mr. Mercurio Q. Rivera

Manager, Property Management Dept.

Gentleman:

I have the honor to submit my formal offer to purchase your properties covered by titles listed hereunder located
at Sta. Rosa, Laguna, with a total area of 101 hectares, more or less.

TCT NO. AREA

T-106932 113,580 sq.
m.
 T-106933 70,899 sq.
m.
T-106934 52,246 sq.
m.
T-106935 96,768 sq.
m.
T-106936 187,114 sq.
m.
T-106937 481,481 sq.
m.

My offer is for PESOS: THREE MILLION FIVE HUNDRED THOUSAND (P3,500,000.00) PESOS, in cash.

Kindly contact me at Telephone Number 921-1344.

(3) On September 1, 1987, defendant Rivera made on behalf of the bank a formal reply by letter which is
hereunder quoted (Exh. "C"):

September 1, 1987

JP M-P GUTIERREZ ENTERPRISES

142 Charisma St., Doña Andres II
Rosario, Pasig, Metro Manila

Attention: JOSE O. JANOLO

Dear Sir:

Thank you for your letter-offer to buy our six (6) parcels of acquired lots at Sta. Rosa, Laguna (formerly owned by
Byme Industrial Corp.). Please be informed however that the bank's counter-offer is at P5.5 million for more than
101 hectares on lot basis.

We shall be very glad to hear your position on the on the matter.

Best regards.

(4) On September 17, 1987, plaintiff Janolo, responding to Rivera's aforequoted reply, wrote (Exh. "D"):

September 17, 1987

Producers Bank
Paseo de Roxas
Makati, Metro Manila

Attention: Mr. Mercurio Rivera

Gentlemen:

In reply to your letter regarding my proposal to purchase your 101-hectare lot located at Sta. Rosa, Laguna, I
would like to amend my previous offer and I now propose to buy the said lot at P4.250 million in CASH..

Hoping that this proposal meets your satisfaction.

(5) There was no reply to Janolo's foregoing letter of September 17, 1987. What took place was a meeting on
September 28, 1987 between the plaintiffs and Luis Co, the Senior Vice-President of defendant bank. Rivera as
well as Fajardo, the BYME lawyer, attended the meeting. Two days later, or on September 30, 1987, plaintiff
Janolo sent to the bank, through Rivera, the following letter (Exh. "E"):

The Producers Bank of the Philippines

Paseo de Roxas, Makati
Metro Manila

Attention: Mr. Mercurio Rivera

Re: 101 Hectares of Land

in Sta. Rosa, Laguna

Gentlemen:

Pursuant to our discussion last 28 September 1987, we are pleased to inform you that we are accepting your offer
for us to purchase the property at Sta. Rosa, Laguna, formerly owned by Byme Investment, for a total price of
PESOS: FIVE MILLION FIVE HUNDRED THOUSAND (P5,500,000.00).

Thank you.

(6) On October 12, 1987, the conservator of the bank (which has been placed under conservatorship by the
Central Bank since 1984) was replaced by an Acting Conservator in the person of defendant Leonida T.
Encarnacion. On November 4, 1987, defendant Rivera wrote plaintiff Demetria the following letter (Exh. "F"):

Attention: Atty. Demetrio Demetria

Dear Sir:

Your proposal to buy the properties the bank foreclosed from Byme investment Corp. located at Sta. Rosa,
Laguna is under study yet as of this time by the newly created committee for submission to the newly designated
Acting Conservator of the bank.

For your information.

(7) What thereafter transpired was a series of demands by the plaintiffs for compliance by the bank with what
plaintiff considered as a perfected contract of sale, which demands were in one form or another refused by the
bank. As detailed by the trial court in its decision, on November 17, 1987, plaintiffs through a letter to defendant
Rivera (Exhibit "G") tendered payment of the amount of P5.5 million "pursuant to (our) perfected sale agreement."
Defendants refused to receive both the payment and the letter. Instead, the parcels of land involved in the
transaction were advertised by the bank for sale to any interested buyer (Exh, "H" and "H-1"). Plaintiffs demanded
the execution by the bank of the documents on what was considered as a "perfected agreement." Thus:

Mr. Mercurio Rivera

Manager, Producers Bank
Paseo de Roxas, Makati
Metro Manila

Dear Mr. Rivera:

This is in connection with the offer of our client, Mr. Jose O. Janolo, to purchase your 101-hectare lot located in
Sta. Rosa, Laguna, and which are covered by TCT No. T-106932 to 106937.

From the documents at hand, it appears that your counter-offer dated September 1, 1987 of this same lot in the
amount of P5.5 million was accepted by our client thru a letter dated September 30, 1987 and was received by
you on October 5, 1987.
 In view of the above circumstances, we believe that an agreement has been perfected. We were also informed
that despite repeated follow-up to consummate the purchase, you now refuse to honor your commitment. Instead,
you have advertised for sale the same lot to others.

In behalf of our client, therefore, we are making this formal demand upon you to consummate and execute the
necessary actions/documentation within three (3) days from your receipt hereof. We are ready to remit the agreed
amount of P5.5 million at your advice. Otherwise, we shall be constrained to file the necessary court action to
protect the interest of our client.

We trust that you will be guided accordingly.

(8) Defendant bank, through defendant Rivera, acknowledged receipt of the foregoing letter and stated, in its
communication of December 2, 1987 (Exh. "I"), that said letter has been "referred . . . to the office of our
Conservator for proper disposition" However, no response came from the Acting Conservator. On December 14,
1987, the plaintiffs made a second tender of payment (Exh. "L" and "L-1"), this time through the Acting
Conservator, defendant Encarnacion. Plaintiffs' letter reads:

PRODUCERS BANK OF
THE PHILIPPINES
Paseo de Roxas,
Makati, Metro Manila

Attn.: Atty. NIDA ENCARNACION

Central Bank Conservator

We are sending you herewith, in - behalf of our client, Mr. JOSE O. JANOLO, MBTC Check No. 258387 in the
amount of P5.5 million as our agreed purchase price of the 101-hectare lot covered by TCT Nos. 106932,
106933, 106934, 106935, 106936 and 106937 and registered under Producers Bank.

This is in connection with the perfected agreement consequent from your offer of P5.5 Million as the purchase
price of the said lots. Please inform us of the date of documentation of the sale immediately.

Kindly acknowledge receipt of our payment.

(9) The foregoing letter drew no response for more than four months. Then, on May 3, 1988, plaintiff, through
counsel, made a final demand for compliance by the bank with its obligations under the considered perfected
contract of sale (Exhibit "N"). As recounted by the trial court (Original Record, p. 656), in a reply letter dated May
12, 1988 (Annex "4" of defendant's answer to amended complaint), the defendants through Acting Conservator
Encarnacion repudiated the authority of defendant Rivera and claimed that his dealings with the plaintiffs,
particularly his counter-offer of P5.5 Million are unauthorized or illegal. On that basis, the defendants justified the
refusal of the tenders of payment and the non-compliance with the obligations under what the plaintiffs considered
to be a perfected contract of sale.

(10) On May 16, 1988, plaintiffs filed a suit for specific performance with damages against the bank, its Manager
Rivers and Acting Conservator Encarnacion. The basis of the suit was that the transaction had with the bank
resulted in a perfected contract of sale, The defendants took the position that there was no such perfected sale
because the defendant Rivera is not authorized to sell the property, and that there was no meeting of the minds
as to the price.

On March 14, 1991, Henry L. Co (the brother of Luis Co), through counsel Sycip Salazar Hernandez and
Gatmaitan, filed a motion to intervene in the trial court, alleging that as owner of 80% of the Bank's outstanding
shares of stock, he had a substantial interest in resisting the complaint. On July 8, 1991, the trial court issued an
order denying the motion to intervene on the ground that it was filed after trial had already been concluded. It also
denied a motion for reconsideration filed thereafter. From the trial court's decision, the Bank, petitioner Rivera and
conservator Encarnacion appealed to the Court of Appeals which subsequently affirmed with modification the said
judgment. Henry Co did not appeal the denial of his motion for intervention.

In the course of the proceedings in the respondent Court, Carlos Ejercito was substituted in place of Demetria and Janolo,
in view of the assignment of the latters' rights in the matter in litigation to said private respondent.
On July 11, 1992, during the pendency of the proceedings in the Court of Appeals, Henry Co and several other
stockholders of the Bank, through counsel Angara Abello Concepcion Regala and Cruz, filed an action (hereafter, the
"Second Case") — purportedly a "derivative suit" — with the Regional Trial Court of Makati, Branch 134, docketed as Civil
Case No. 92-1606, against Encarnacion, Demetria and Janolo "to declare any perfected sale of the property as
unenforceable and to stop Ejercito from enforcing or implementing the sale"4 In his answer, Janolo argued that the Second
Case was barred by litis pendentia by virtue of the case then pending in the Court of Appeals. During the pre-trial
conference in the Second Case, plaintiffs filed a Motion for Leave of Court to Dismiss the Case Without Prejudice. "Private
respondent opposed this motion on the ground, among others, that plaintiff's act of forum shopping justifies the dismissal
of both cases, with prejudice."5 Private respondent, in his memorandum, averred that this motion is still pending in the
Makati RTC.

In their Petition6 and Memorandum7 , petitioners summarized their position as follows:

I.

The Court of Appeals erred in declaring that a contract of sale was perfected between Ejercito (in substitution of
Demetria and Janolo) and the bank.

II.

The Court of Appeals erred in declaring the existence of an enforceable contract of sale between the parties.

III.

The Court of Appeals erred in declaring that the conservator does not have the power to overrule or revoke acts
of previous management.

IV.

The findings and conclusions of the Court of Appeals do not conform to the evidence on record.

On the other hand, petitioners prayed for dismissal of the instant suit on the ground 8 that:

I.

Petitioners have engaged in forum shopping.

II.

The factual findings and conclusions of the Court of Appeals are supported by the evidence on record and may no
longer be questioned in this case.

III.

The Court of Appeals correctly held that there was a perfected contract between Demetria and Janolo (substituted
by; respondent Ejercito) and the bank.

IV.

The Court of Appeals has correctly held that the conservator, apart from being estopped from repudiating the
agency and the contract, has no authority to revoke the contract of sale.

The Issues

From the foregoing positions of the parties, the issues in this case may be summed up as follows:

1) Was there forum-shopping on the part of petitioner Bank?

 2) Was there a perfected contract of sale between the parties?

3) Assuming there was, was the said contract enforceable under the statute of frauds?

4) Did the bank conservator have the unilateral power to repudiate the authority of the bank officers and/or to
revoke the said contract?

5) Did the respondent Court commit any reversible error in its findings of facts?

The First Issue: Was There Forum-Shopping?

In order to prevent the vexations of multiple petitions and actions, the Supreme Court promulgated Revised Circular No.
28-91 requiring that a party "must certify under oath . . . [that] (a) he has not (t)heretofore commenced any other action or
proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to
the best of his knowledge, no such action or proceeding is pending" in said courts or agencies. A violation of the said
circular entails sanctions that include the summary dismissal of the multiple petitions or complaints. To be sure, petitioners
have included a VERIFICATION/CERTIFICATION in their Petition stating "for the record(,) the pendency of Civil Case No.
92-1606 before the Regional Trial Court of Makati, Branch 134, involving a derivative suit filed by stockholders of
petitioner Bank against the conservator and other defendants but which is the subject of a pending Motion to Dismiss
Without Prejudice.9

Private respondent Ejercito vigorously argues that in spite of this verification, petitioners are guilty of actual forum
shopping because the instant petition pending before this Court involves "identical parties or interests represented, rights
asserted and reliefs sought (as that) currently pending before the Regional Trial Court, Makati Branch 134 in the Second
Case. In fact, the issues in the two cases are so interwined that a judgement or resolution in either case will constitute res
judicata in the other." 10

On the other hand, petitioners explain 11 that there is no forum-shopping because:

1) In the earlier or "First Case" from which this proceeding arose, the Bank was impleaded as a defendant,
whereas in the "Second Case" (assuming the Bank is the real party in interest in a derivative suit), it was plaintiff;

2) "The derivative suit is not properly a suit for and in behalf of the corporation under the circumstances";

3) Although the CERTIFICATION/VERIFICATION (supra) signed by the Bank president and attached to the
Petition identifies the action as a "derivative suit," it "does not mean that it is one" and "(t)hat is a legal question
for the courts to decide";

4) Petitioners did not hide the Second Case at they mentioned it in the said VERIFICATION/CERTIFICATION.

We rule for private respondent.

To begin with, forum-shopping originated as a concept in private international law.12 , where non-resident litigants are
given the option to choose the forum or place wherein to bring their suit for various reasons or excuses, including to
secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more
friendly venue. To combat these less than honorable excuses, the principle of forum non conveniens was developed
whereby a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most "convenient"
or available forum and the parties are not precluded from seeking remedies elsewhere.

In this light, Black's Law Dictionary 13 says that forum shopping "occurs when a party attempts to have his action tried in a
particular court or jurisdiction where he feels he will receive the most favorable judgment or verdict." Hence, according
to Words and Phrases14 , "a litigant is open to the charge of "forum shopping" whenever he chooses a forum with slight
connection to factual circumstances surrounding his suit, and litigants should be encouraged to attempt to settle their
differences without imposing undue expenses and vexatious situations on the courts".

In the Philippines, forum shopping has acquired a connotation encompassing not only a choice of venues, as it was
originally understood in conflicts of laws, but also to a choice of remedies. As to the first (choice of venues), the Rules of
Court, for example, allow a plaintiff to commence personal actions "where the defendant or any of the defendants resides
or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff" (Rule 4, Sec, 2 [b]). As
to remedies, aggrieved parties, for example, are given a choice of pursuing civil liabilities independently of the criminal,
arising from the same set of facts. A passenger of a public utility vehicle involved in a vehicular accident may sue on culpa
contractual, culpa aquiliana or culpa criminal — each remedy being available independently of the others — although he
cannot recover more than once.

In either of these situations (choice of venue or choice of remedy), the litigant actually shops for a forum of his
action, This was the original concept of the term forum shopping.

Eventually, however, instead of actually making a choice of the forum of their actions, litigants, through the
encouragement of their lawyers, file their actions in all available courts, or invoke all relevant remedies
simultaneously. This practice had not only resulted to (sic) conflicting adjudications among different courts and
consequent confusion enimical (sic) to an orderly administration of justice. It had created extreme inconvenience
to some of the parties to the action.

Thus, "forum shopping" had acquired a different concept — which is unethical professional legal practice. And this
necessitated or had given rise to the formulation of rules and canons discouraging or altogether prohibiting the
practice. 15

What therefore originally started both in conflicts of laws and in our domestic law as a legitimate device for solving
problems has been abused and mis-used to assure scheming litigants of dubious reliefs.

To avoid or minimize this unethical practice of subverting justice, the Supreme Court, as already mentioned, promulgated
Circular 28-91. And even before that, the Court had prescribed it in the Interim Rules and Guidelines issued on January
11, 1983 and had struck down in several cases 16 the inveterate use of this insidious malpractice. Forum shopping as "the
filing of repetitious suits in different courts" has been condemned by Justice Andres R. Narvasa (now Chief Justice)
in Minister of Natural Resources, et al., vs. Heirs of Orval Hughes, et al., "as a reprehensible manipulation of court
processes and proceedings . . ." 17 when does forum shopping take place?

There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable
opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in
the courts but also in connection with litigations commenced in the courts while an administrative proceeding is
pending, as in this case, in order to defeat administrative processes and in anticipation of an unfavorable
administrative ruling and a favorable court ruling. This is specially so, as in this case, where the court in which the
second suit was brought, has no jurisdiction.18

The test for determining whether a party violated the rule against forum shopping has been laid dawn in the 1986 case of
Buan vs. Lopez 19 , also by Chief Justice Narvasa, and that is, forum shopping exists where the elements of litis
pendentia are present or where a final judgment in one case will amount to res judicata in the other, as follows:

There thus exists between the action before this Court and RTC Case No. 86-36563 identity of parties, or at least
such parties as represent the same interests in both actions, as well as identity of rights asserted and relief
prayed for, the relief being founded on the same facts, and the identity on the two preceding particulars is such
that any judgment rendered in the other action, will, regardless of which party is successful, amount to res
adjudicata in the action under consideration: all the requisites, in fine, of auter action pendant.

xxx xxx xxx

As already observed, there is between the action at bar and RTC Case No. 86-36563, an identity as regards
parties, or interests represented, rights asserted and relief sought, as well as basis thereof, to a degree sufficient
to give rise to the ground for dismissal known as auter action pendant or lis pendens. That same identity puts into
operation the sanction of twin dismissals just mentioned. The application of this sanction will prevent any further
delay in the settlement of the controversy which might ensue from attempts to seek reconsideration of or to
appeal from the Order of the Regional Trial Court in Civil Case No. 86-36563 promulgated on July 15, 1986,
which dismissed the petition upon grounds which appear persuasive.

Consequently, where a litigant (or one representing the same interest or person) sues the same party against whom
another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are still
pending, the defense of litis pendencia in one case is bar to the others; and, a final judgment in one would constitute res
judicata and thus would cause the dismissal of the rest. In either case, forum shopping could be cited by the other party
as a ground to ask for summary dismissal of the two 20 (or more) complaints or petitions, and for imposition of the other
sanctions, which are direct contempt of court, criminal prosecution, and disciplinary action against the erring lawyer.

Applying the foregoing principles in the case before us and comparing it with the Second Case, it is obvious that there
exist identity of parties or interests represented, identity of rights or causes and identity of reliefs sought.

Very simply stated, the original complaint in the court a quo which gave rise to the instant petition was filed by the buyer
(herein private respondent and his predecessors-in-interest) against the seller (herein petitioners) to enforce the alleged
perfected sale of real estate. On the other hand, the complaint 21 in the Second Case seeks to declare such purported sale
involving the same real property "as unenforceable as against the Bank", which is the petitioner herein. In other words, in
the Second Case, the majority stockholders, in representation of the Bank, are seeking to accomplish what the Bank itself
failed to do in the original case in the trial court. In brief, the objective or the relief being sought, though worded differently,
is the same, namely, to enable the petitioner Bank to escape from the obligation to sell the property to respondent. In
Danville Maritime, Inc. vs. Commission on Audit. 22 , this Court ruled that the filing by a party of two apparently different
actions, but with the same objective, constituted forum shopping:

In the attempt to make the two actions appear to be different, petitioner impleaded different respondents therein
— PNOC in the case before the lower court and the COA in the case before this Court and sought what seems to
be different reliefs. Petitioner asks this Court to set aside the questioned letter-directive of the COA dated October
10, 1988 and to direct said body to approve the Memorandum of Agreement entered into by and between the
PNOC and petitioner, while in the complaint before the lower court petitioner seeks to enjoin the PNOC from
conducting a rebidding and from selling to other parties the vessel "T/T Andres Bonifacio", and for an extension of
time for it to comply with the paragraph 1 of the memorandum of agreement and damages. One can see that
although the relief prayed for in the two (2) actions are ostensibly different, the ultimate objective in both actions is
the same, that is, approval of the sale of vessel in favor of petitioner and to overturn the letter-directive of the COA
of October 10, 1988 disapproving the sale. (emphasis supplied).

In an earlier case 23 but with the same logic and vigor, we held:

In other words, the filing by the petitioners of the instant special civil action for certiorari and prohibition in this
Court despite the pendency of their action in the Makati Regional Trial Court, is a species of forum-shopping. Both
actions unquestionably involve the same transactions, the same essential facts and circumstances. The
petitioners' claim of absence of identity simply because the PCGG had not been impleaded in the RTC suit, and
the suit did not involve certain acts which transpired after its commencement, is specious. In the RTC action, as in
the action before this Court, the validity of the contract to purchase and sell of September 1, 1986, i.e., whether or
not it had been efficaciously rescinded, and the propriety of implementing the same (by paying the pledgee banks
the amount of their loans, obtaining the release of the pledged shares, etc.) were the basic issues. So, too, the
relief was the same: the prevention of such implementation and/or the restoration of the status quo ante. When
the acts sought to be restrained took place anyway despite the issuance by the Trial Court of a temporary
restraining order, the RTC suit did not become functus oficio. It remained an effective vehicle for obtention of
relief; and petitioners' remedy in the premises was plain and patent: the filing of an amended and supplemental
pleading in the RTC suit, so as to include the PCGG as defendant and seek nullification of the acts sought to be
enjoined but nonetheless done. The remedy was certainly not the institution of another action in another forum
based on essentially the same facts, The adoption of this latter recourse renders the petitioners amenable to
disciplinary action and both their actions, in this Court as well as in the Court a quo, dismissible.

In the instant case before us, there is also identity of parties, or at least, of interests represented. Although the plaintiffs in
the Second Case (Henry L. Co. et al.) are not name parties in the First Case, they represent the same interest and entity,
namely, petitioner Bank, because:

Firstly, they are not suing in their personal capacities, for they have no direct personal interest in the matter in
controversy. They are not principally or even subsidiarily liable; much less are they direct parties in the assailed contract
of sale; and

Secondly, the allegations of the complaint in the Second Case show that the stockholders are bringing a "derivative suit".
In the caption itself, petitioners claim to have brought suit "for and in behalf of the Producers Bank of the Philippines" 24 .
Indeed, this is the very essence of a derivative suit:

An individual stockholder is permitted to institute a derivative suit on behalf of the corporation wherein he
holdsstock in order to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue,
 or are the ones to be sued or hold the control of the corporation. In such actions, the suing stockholder is
regarded as a nominal party, with the corporation as the real party in interest. (Gamboa v. Victoriano, 90 SCRA
40, 47 [1979]; emphasis supplied).

In the face of the damaging admissions taken from the complaint in the Second Case, petitioners, quite strangely, sought
to deny that the Second Case was a derivative suit, reasoning that it was brought, not by the minority shareholders, but by
Henry Co et al., who not only own, hold or control over 80% of the outstanding capital stock, but also constitute the
majority in the Board of Directors of petitioner Bank. That being so, then they really represent the Bank. So, whether they
sued "derivatively" or directly, there is undeniably an identity of interests/entity represented.

Petitioner also tried to seek refuge in the corporate fiction that the personality Of the Bank is separate and distinct from its
shareholders. But the rulings of this Court are consistent: "When the fiction is urged as a means of perpetrating a fraud or
an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, the achievement or
perfection of a monopoly or generally the perpetration of knavery or crime, the veil with which the law covers and isolates
the corporation from the members or stockholders who compose it will be lifted to allow for its consideration merely as an
aggregation of individuals." 25

In addition to the many cases 26 where the corporate fiction has been disregarded, we now add the instant case, and
declare herewith that the corporate veil cannot be used to shield an otherwise blatant violation of the prohibition against
forum-shopping. Shareholders, whether suing as the majority in direct actions or as the minority in a derivative suit,
cannot be allowed to trifle with court processes, particularly where, as in this case, the corporation itself has not been
remiss in vigorously prosecuting or defending corporate causes and in using and applying remedies available to it. To rule
otherwise would be to encourage corporate litigants to use their shareholders as fronts to circumvent the stringent rules
against forum shopping.

Finally, petitioner Bank argued that there cannot be any forum shopping, even assuming arguendo that there is identity of
parties, causes of action and reliefs sought, "because it (the Bank) was the defendant in the (first) case while it was the
plaintiff in the other (Second Case)",citing as authority Victronics Computers, Inc., vs. Regional Trial Court, Branch 63,
Makati, etc. et al., 27 where Court held:

The rule has not been extended to a defendant who, for reasons known only to him, commences a new action
against the plaintiff — instead of filing a responsive pleading in the other case — setting forth therein, as causes
of action, specific denials, special and affirmative defenses or even counterclaims, Thus, Velhagen's and King's
motion to dismiss Civil Case No. 91-2069 by no means negates the charge of forum-shopping as such did not
exist in the first place. (emphasis supplied)

Petitioner pointed out that since it was merely the defendant in the original case, it could not have chosen the forum in
said case.

Respondent, on the other hand, replied that there is a difference in factual setting between Victronics and the present suit.
In the former, as underscored in the above-quoted Court ruling, the defendants did not file any responsive pleading in the
first case. In other words, they did not make any denial or raise any defense or counter-claim therein In the case before us
however, petitioners filed a responsive pleading to the complaint — as a result of which, the issues were joined.

Indeed, by praying for affirmative reliefs and interposing counter–claims in their responsive pleadings, the petitioners
became plaintiffs themselves in the original case, giving unto themselves the very remedies they repeated in the Second
Case.

Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is the vexation caused
the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or
related causes and/or to grant the same or substantially the same reliefs, in the process creating the possibility of
conflicting decisions being rendered by the different fora upon the same issue. In this case, this is exactly the problem: a
decision recognizing the perfection and directing the enforcement of the contract of sale will directly conflict with a
possible decision in the Second Case barring the parties front enforcing or implementing the said sale. Indeed, a final
decision in one would constitute res judicata in the other 28 .

The foregoing conclusion finding the existence of forum-shopping notwithstanding, the only sanction possible now is the
dismissal of both cases with prejudice, as the other sanctions cannot be imposed because petitioners' present counsel
entered their appearance only during the proceedings in this Court, and the Petition's VERIFICATION/CERTIFICATION
contained sufficient allegations as to the pendency of the Second Case to show good faith in observing Circular 28-91.
The Lawyers who filed the Second Case are not before us; thus the rudiments of due process prevent us from motu
propio imposing disciplinary measures against them in this Decision. However, petitioners themselves (and particularly
Henry Co, et al.) as litigants are admonished to strictly follow the rules against forum-shopping and not to trifle with court
proceedings and processes They are warned that a repetition of the same will be dealt with more severely.

Having said that, let it be emphasized that this petition should be dismissed not merely because of forum-shopping but
also because of the substantive issues raised, as will be discussed shortly.

The Second Issue: Was The Contract Perfected?

The respondent Court correctly treated the question of whether or not there was, on the basis of the facts established, a
perfected contract of sale as the ultimate issue. Holding that a valid contract has been established, respondent Court
stated:

There is no dispute that the object of the transaction is that property owned by the defendant bank as acquired
assets consisting of six (6) parcels of land specifically identified under Transfer Certificates of Title Nos. T-106932
to T-106937. It is likewise beyond cavil that the bank intended to sell the property. As testified to by the Bank's
Deputy Conservator, Jose Entereso, the bank was looking for buyers of the property. It is definite that the plaintiffs
wanted to purchase the property and it was precisely for this purpose that they met with defendant Rivera,
Manager of the Property Management Department of the defendant bank, in early August 1987. The procedure in
the sale of acquired assets as well as the nature and scope of the authority of Rivera on the matter is clearly
delineated in the testimony of Rivera himself, which testimony was relied upon by both the bank and by Rivera in
their appeal briefs. Thus (TSN of July 30, 1990. pp. 19-20):

A: The procedure runs this way: Acquired assets was turned over to me and then I published it in the form
of an inter-office memorandum distributed to all branches that these are acquired assets for sale. I was
instructed to advertise acquired assets for sale so on that basis, I have to entertain offer; to accept offer,
formal offer and upon having been offered, I present it to the Committee. I provide the Committee with
necessary information about the property such as original loan of the borrower, bid price during the
foreclosure, total claim of the bank, the appraised value at the time the property is being offered for sale
and then the information which are relative to the evaluation of the bank to buy which the Committee
considers and it is the Committee that evaluate as against the exposure of the bank and it is also the
Committee that submit to the Conservator for final approval and once approved, we have to execute the
deed of sale and it is the Conservator that sign the deed of sale, sir.

The plaintiffs, therefore, at that meeting of August 1987 regarding their purpose of buying the property, dealt with
and talked to the right person. Necessarily, the agenda was the price of the property, and plaintiffs were dealing
with the bank official authorized to entertain offers, to accept offers and to present the offer to the Committee
before which the said official is authorized to discuss information relative to price determination. Necessarily, too,
it being inherent in his authority, Rivera is the officer from whom official information regarding the price, as
determined by the Committee and approved by the Conservator, can be had. And Rivera confirmed his authority
when he talked with the plaintiff in August 1987. The testimony of plaintiff Demetria is clear on this point (TSN of
May 31,1990, pp. 27-28):

Q: When you went to the Producers Bank and talked with Mr. Mercurio Rivera, did you ask him point-
blank his authority to sell any property?

A: No, sir. Not point blank although it came from him, (W)hen I asked him how long it would take because
he was saying that the matter of pricing will be passed upon by the committee. And when I asked him
how long it will take for the committee to decide and he said the committee meets every week. If I am not
mistaken Wednesday and in about two week's (sic) time, in effect what he was saying he was not the one
who was to decide. But he would refer it to the committee and he would relay the decision of the
committee to me.

Q — Please answer the question.

A — He did not say that he had the authority (.) But he said he would refer the matter to the committee
and he would relay the decision to me and he did just like that.
 "Parenthetically, the Committee referred to was the Past Due Committee of which Luis Co was the Head, with
Jose Entereso as one of the members.

What transpired after the meeting of early August 1987 are consistent with the authority and the duties of Rivera
and the bank's internal procedure in the matter of the sale of bank's assets. As advised by Rivera, the plaintiffs
made a formal offer by a letter dated August 20, 1987 stating that they would buy at the price of P3.5 Million in
cash. The letter was for the attention of Mercurio Rivera who was tasked to convey and accept such offers.
Considering an aspect of the official duty of Rivera as some sort of intermediary between the plaintiffs-buyers with
their proposed buying price on one hand, and the bank Committee, the Conservator and ultimately the bank itself
with the set price on the other, and considering further the discussion of price at the meeting of August resulting in
a formal offer of P3.5 Million in cash, there can be no other logical conclusion than that when, on September 1,
1987, Rivera informed plaintiffs by letter that "the bank's counter-offer is at P5.5 Million for more than 101
hectares on lot basis," such counter-offer price had been determined by the Past Due Committee and approved
by the Conservator after Rivera had duly presented plaintiffs' offer for discussion by the Committee of such
matters as original loan of borrower, bid price during foreclosure, total claim of the bank, and market value.
Tersely put, under the established facts, the price of P5.5 Million was, as clearly worded in Rivera's letter (Exh.
"E"), the official and definitive price at which the bank was selling the property.

There were averments by defendants below, as well as before this Court, that the P5.5 Million price was not
discussed by the Committee and that price. As correctly characterized by the trial court, this is not credible. The
testimonies of Luis Co and Jose Entereso on this point are at best equivocal and considering the gratuitous and
self-serving character of these declarations, the bank's submission on this point does not inspire belief. Both Co
ad Entereso, as members of the Past Due Committee of the bank, claim that the offer of the plaintiff was never
discussed by the Committee. In the same vein, both Co and Entereso openly admit that they seldom attend the
meetings of the Committee. It is important to note that negotiations on the price had started in early August and
the plaintiffs had already offered an amount as purchase price, having been made to understand by Rivera, the
official in charge of the negotiation, that the price will be submitted for approval by the bank and that the bank's
decision will be relayed to plaintiffs. From the facts, the official bank price. At any rate, the bank placed its official,
Rivera, in a position of authority to accept offers to buy and negotiate the sale by having the offer officially acted
upon by the bank. The bank cannot turn around and later say, as it now does, that what Rivera states as the
bank's action on the matter is not in fact so. It is a familiar doctrine, the doctrine of ostensible authority, that if a
corporation knowingly permits one of its officers, or any other agent, to do acts within the scope of an apparent
authority, and thus holds him out to the public as possessing power to do those acts, the corporation will, as
against any one who has in good faith dealt with the corporation through such agent, he estopped from denying
his authority (Francisco v. GSIS, 7 SCRA 577, 583-584; PNB v. Court of Appeals, 94 SCRA 357, 369-370;
Prudential Bank v. Court of Appeals, G.R. No. 103957, June 14, 1993). 29

Article 1318 of the Civil Code enumerates the requisites of a valid and perfected contract as follows: "(1) Consent of the
contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is
established."

There is no dispute on requisite no. 2. The object of the questioned contract consists of the six (6) parcels of land in Sta.
Rosa, Laguna with an aggregate area of about 101 hectares, more or less, and covered by Transfer Certificates of Title
Nos. T-106932 to T-106937. There is, however, a dispute on the first and third requisites.

Petitioners allege that "there is no counter-offer made by the Bank, and any supposed counter-offer which Rivera (or Co)
may have made is unauthorized. Since there was no counter-offer by the Bank, there was nothing for Ejercito (in
substitution of Demetria and Janolo) to accept." 30 They disputed the factual basis of the respondent Court's findings that
there was an offer made by Janolo for P3.5 million, to which the Bank counter-offered P5.5 million. We have perused the
evidence but cannot find fault with the said Court's findings of fact. Verily, in a petition under Rule 45 such as this, errors
of fact — if there be any - are, as a rule, not reviewable. The mere fact that respondent Court (and the trial court as well)
chose to believe the evidence presented by respondent more than that presented by petitioners is not by itself a reversible
error. In fact, such findings merit serious consideration by this Court, particularly where, as in this case, said courts
carefully and meticulously discussed their findings. This is basic.

Be that as it may, and in addition to the foregoing disquisitions by the Court of Appeals, let us review the question of
Rivera's authority to act and petitioner's allegations that the P5.5 million counter-offer was extinguished by the P4.25
million revised offer of Janolo. Here, there are questions of law which could be drawn from the factual findings of the
respondent Court. They also delve into the contractual elements of consent and cause.
The authority of a corporate officer in dealing with third persons may be actual or apparent. The doctrine of "apparent
authority", with special reference to banks, was laid out in Prudential Bank vs. Court of Appeals31 , where it was held that:

Conformably, we have declared in countless decisions that the principal is liable for obligations contracted by the
agent. The agent's apparent representation yields to the principal's true representation and the contract is
considered as entered into between the principal and the third person (citing National Food Authority vs.
Intermediate Appellate Court, 184 SCRA 166).

A bank is liable for wrongful acts of its officers done in the interests of the bank or in the course of
dealings of the officers in their representative capacity but not for acts outside the scape of their authority
(9 C.J.S., p. 417). A bank holding out its officers and agents as worthy of confidence will not be permitted
to profit by the frauds they may thus be enabled to perpetrate in the apparent scope of their employment;
nor will it be permitted to shirk its responsibility for such frauds even though no benefit may accrue to the
bank therefrom (10 Am Jur 2d, p. 114). Accordingly, a banking corporation is liable to innocent third
persons where the representation is made in the course of its business by an agent acting within the
general scope of his authority even though, in the particular case, the agent is secretly abusing his
authority and attempting to perpetrate a fraud upon his principal or some other person, for his own
ultimate benefit (McIntosh v. Dakota Trust Co., 52 ND 752, 204 NW 818, 40 ALR 1021).

Application of these principles is especially necessary because banks have a fiduciary relationship with the public
and their stability depends on the confidence of the people in their honesty and efficiency. Such faith will be
eroded where banks do not exercise strict care in the selection and supervision of its employees, resulting in
prejudice to their depositors.

From the evidence found by respondent Court, it is obvious that petitioner Rivera has apparent or implied authority to act
for the Bank in the matter of selling its acquired assets. This evidence includes the following:

(a) The petition itself in par. II-i (p. 3) states that Rivera was "at all times material to this case, Manager of the
Property Management Department of the Bank". By his own admission, Rivera was already the person in charge
of the Bank's acquired assets (TSN, August 6, 1990, pp. 8-9);

(b) As observed by respondent Court, the land was definitely being sold by the Bank. And during the initial
meeting between the buyers and Rivera, the latter suggested that the buyers' offer should be no less than P3.3
million (TSN, April 26, 1990, pp. 16-17);

(c) Rivera received the buyers' letter dated August 30, 1987 offering P3.5 million (TSN, 30 July 1990, p.11);

(d) Rivera signed the letter dated September 1, 1987 offering to sell the property for P5.5 million (TSN, July 30, p.
11);

(e) Rivera received the letter dated September 17, 1987 containing the buyers' proposal to buy the property for
P4.25 million (TSN, July 30, 1990, p. 12);

(f) Rivera, in a telephone conversation, confirmed that the P5.5 million was the final price of the Bank (TSN,
January 16, 1990, p. 18);

(g) Rivera arranged the meeting between the buyers and Luis Co on September 28, 1994, during which the
Bank's offer of P5.5 million was confirmed by Rivera (TSN, April 26, 1990, pp. 34-35). At said meeting, Co, a
major shareholder and officer of the Bank, confirmed Rivera's statement as to the finality of the Bank's counter-
offer of P5.5 million (TSN, January 16, 1990, p. 21; TSN, April 26, 1990, p. 35);

(h) In its newspaper advertisements and announcements, the Bank referred to Rivera as the officer acting for the
Bank in relation to parties interested in buying assets owned/acquired by the Bank. In fact, Rivera was the officer
mentioned in the Bank's advertisements offering for sale the property in question (cf. Exhs. "S" and "S-1").

In the very recent case of Limketkai Sons Milling, Inc. vs. Court of Appeals, et. al.32 , the Court, through Justice Jose A. R.
Melo, affirmed the doctrine of apparent authority as it held that the apparent authority of the officer of the Bank of P.I. in
charge of acquired assets is borne out by similar circumstances surrounding his dealings with buyers.
To be sure, petitioners attempted to repudiate Rivera's apparent authority through documents and testimony which seek
to establish Rivera's actual authority. These pieces of evidence, however, are inherently weak as they consist of Rivera's
self-serving testimony and various inter-office memoranda that purport to show his limited actual authority, of which
private respondent cannot be charged with knowledge. In any event, since the issue is apparent authority, the existence
of which is borne out by the respondent Court's findings, the evidence of actual authority is immaterial insofar as the
liability of a corporation is concerned 33 .

Petitioners also argued that since Demetria and Janolo were experienced lawyers and their "law firm" had once acted for
the Bank in three criminal cases, they should be charged with actual knowledge of Rivera's limited authority. But the Court
of Appeals in its Decision (p. 12) had already made a factual finding that the buyers had no notice of Rivera's actual
authority prior to the sale. In fact, the Bank has not shown that they acted as its counsel in respect to any acquired assets;
on the other hand, respondent has proven that Demetria and Janolo merely associated with a loose aggrupation of
lawyers (not a professional partnership), one of whose members (Atty. Susana Parker) acted in said criminal cases.

Petitioners also alleged that Demetria's and Janolo's P4.25 million counter-offer in the letter dated September 17,
1987 extinguished the Bank's offer of P5.5 million 34 .They disputed the respondent Court's finding that "there was a
meeting of minds when on 30 September 1987 Demetria and Janolo through Annex "L" (letter dated September 30, 1987)
"accepted" Rivera's counter offer of P5.5 million under Annex "J" (letter dated September 17, 1987)", citing the late Justice
Paras35 , Art. 1319 of the Civil Code 36 and related Supreme Court rulings starting with Beaumont vs. Prieto 37 .

However, the above-cited authorities and precedents cannot apply in the instant case because, as found by the
respondent Court which reviewed the testimonies on this point, what was "accepted" by Janolo in his letter dated
September 30, 1987 was the Bank's offer of P5.5 million as confirmed and reiterated to Demetria and Atty. Jose Fajardo
by Rivera and Co during their meeting on September 28, 1987. Note that the said letter of September 30, 1987 begins
with"(p)ursuant to our discussion last 28 September 1987 . . .

Petitioners insist that the respondent Court should have believed the testimonies of Rivera and Co that the September 28,
1987 meeting "was meant to have the offerors improve on their position of P5.5. million." 38 However, both the trial court
and the Court of Appeals found petitioners' testimonial evidence "not credible", and we find no basis for changing this
finding of fact.

Indeed, we see no reason to disturb the lower courts' (both the RTC and the CA) common finding that private
respondents' evidence is more in keeping with truth and logic — that during the meeting on September 28, 1987, Luis Co
and Rivera "confirmed that the P5.5 million price has been passed upon by the Committee and could no longer be
lowered (TSN of April 27, 1990, pp. 34-35)"39 . Hence, assuming arguendo that the counter-offer of P4.25 million
extinguished the offer of P5.5 million, Luis Co's reiteration of the said P5.5 million price during the September 28, 1987
meeting revived the said offer. And by virtue of the September 30, 1987 letter accepting this revived offer, there was a
meeting of the minds, as the acceptance in said letter was absolute and unqualified.

We note that the Bank's repudiation, through Conservator Encarnacion, of Rivera's authority and action, particularly the
latter's counter-offer of P5.5 million, as being "unauthorized and illegal" came only on May 12, 1988 or more than seven
(7) months after Janolo' acceptance. Such delay, and the absence of any circumstance which might have justifiably
prevented the Bank from acting earlier, clearly characterizes the repudiation as nothing more than a last-minute attempt
on the Bank's part to get out of a binding contractual obligation.

Taken together, the factual findings of the respondent Court point to an implied admission on the part of the petitioners
that the written offer made on September 1, 1987 was carried through during the meeting of September 28, 1987. This is
the conclusion consistent with human experience, truth and good faith.

It also bears noting that this issue of extinguishment of the Bank's offer of P5.5 million was raised for the first time on
appeal and should thus be disregarded.

This Court in several decisions has repeatedly adhered to the principle that points of law, theories, issues of fact
and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be,
considered by a reviewing court, as they cannot be raised for the first time on appeal (Santos vs. IAC, No. 74243,
November 14, 1986, 145 SCRA 592).40

. . . It is settled jurisprudence that an issue which was neither averred in the complaint nor raised during the trial in
the court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play,
justice and due process (Dihiansan vs. CA, 153 SCRA 713 [1987]; Anchuelo vs. IAC, 147 SCRA 434 [1987];
 Dulos Realty & Development Corp. vs. CA, 157 SCRA 425 [1988]; Ramos vs. IAC, 175 SCRA 70 [1989]; Gevero
vs. IAC, G.R. 77029, August 30, 1990).41

Since the issue was not raised in the pleadings as an affirmative defense, private respondent was not given an
opportunity in the trial court to controvert the same through opposing evidence. Indeed, this is a matter of due process.
But we passed upon the issue anyway, if only to avoid deciding the case on purely procedural grounds, and we repeat
that, on the basis of the evidence already in the record and as appreciated by the lower courts, the inevitable conclusion is
simply that there was a perfected contract of sale.

The Third Issue: Is the Contract Enforceable?

The petition alleged42 :

Even assuming that Luis Co or Rivera did relay a verbal offer to sell at P5.5 million during the meeting of 28
September 1987, and it was this verbal offer that Demetria and Janolo accepted with their letter of 30 September
1987, the contract produced thereby would be unenforceable by action — there being no note, memorandum or
writing subscribed by the Bank to evidence such contract. (Please see article 1403[2], Civil Code.)

Upon the other hand, the respondent Court in its Decision (p, 14) stated:

. . . Of course, the bank's letter of September 1, 1987 on the official price and the plaintiffs' acceptance of the
price on September 30, 1987, are not, in themselves, formal contracts of sale. They are however clear
embodiments of the fact that a contract of sale was perfected between the parties, such contract being binding in
whatever form it may have been entered into (case citations omitted). Stated simply, the banks' letter of
September 1, 1987, taken together with plaintiffs' letter dated September 30, 1987, constitute in law a sufficient
memorandum of a perfected contract of sale.

The respondent Court could have added that the written communications commenced not only from September 1, 1987
but from Janolo's August 20, 1987 letter. We agree that, taken together, these letters constitute sufficient memoranda —
since they include the names of the parties, the terms and conditions of the contract, the price and a description of the
property as the object of the contract.

But let it be assumed arguendo that the counter-offer during the meeting on September 28, 1987 did constitute a "new"
offer which was accepted by Janolo on September 30, 1987. Still, the statute of frauds will not apply by reason of the
failure of petitioners to object to oral testimony proving petitioner Bank's counter-offer of P5.5 million. Hence, petitioners —
by such utter failure to object — are deemed to have waived any defects of the contract under the statute of frauds,
pursuant to Article 1405 of the Civil Code:

Art. 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of article 1403, are ratified by the failure
to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them.

As private respondent pointed out in his Memorandum, oral testimony on the reaffirmation of the counter-offer of P5.5
million is a plenty — and the silence of petitioners all throughout the presentation makes the evidence binding on them
thus;

A Yes, sir, I think it was September 28, 1987 and I was again present because Atty. Demetria told me to
accompany him we were able to meet Luis Co at the Bank.

Q Now, what transpired during this meeting with Luis Co of the Producers Bank?

A Atty. Demetria asked Mr. Luis Co whether the price could be reduced, sir.

Q What price?

A The 5.5 million pesos and Mr. Luis Co said that the amount cited by Mr. Mercurio Rivera is the final price and
that is the price they intends (sic) to have, sir.

Q What do you mean?.

 A That is the amount they want, sir.

Q What is the reaction of the plaintiff Demetria to Luis Co's statement (sic) that the defendant Rivera's counter-
offer of 5.5 million was the defendant's bank (sic) final offer?

A He said in a day or two, he will make final acceptance, sir.

Q What is the response of Mr. Luis Co?.

A He said he will wait for the position of Atty. Demetria, sir.

[Direct testimony of Atty. Jose Fajardo, TSN, January 16, 1990, at pp. 18-21.]

Q What transpired during that meeting between you and Mr. Luis Co of the defendant Bank?

A We went straight to the point because he being a busy person, I told him if the amount of P5.5 million could still
be reduced and he said that was already passed upon by the committee. What the bank expects which was
contrary to what Mr. Rivera stated. And he told me that is the final offer of the bank P5.5 million and we should
indicate our position as soon as possible.

Q What was your response to the answer of Mr. Luis Co?

A I said that we are going to give him our answer in a few days and he said that was it. Atty. Fajardo and I and Mr.
Mercurio [Rivera] was with us at the time at his office.

Q For the record, your Honor please, will you tell this Court who was with Mr. Co in his Office in Producers Bank
Building during this meeting?

A Mr. Co himself, Mr. Rivera, Atty. Fajardo and I.

Q By Mr. Co you are referring to?

A Mr. Luis Co.

Q After this meeting with Mr. Luis Co, did you and your partner accede on (sic) the counter offer by the bank?

A Yes, sir, we did.? Two days thereafter we sent our acceptance to the bank which offer we accepted, the offer of
the bank which is P5.5 million.

[Direct testimony of Atty. Demetria, TSN, 26 April 1990, at pp. 34-36.]

Q According to Atty. Demetrio Demetria, the amount of P5.5 million was reached by the Committee and it is not
within his power to reduce this amount. What can you say to that statement that the amount of P5.5 million was
reached by the Committee?

A It was not discussed by the Committee but it was discussed initially by Luis Co and the group of Atty. Demetrio
Demetria and Atty. Pajardo (sic) in that September 28, 1987 meeting, sir.

[Direct testimony of Mercurio Rivera, TSN, 30 July 1990, pp. 14-15.]

The Fourth Issue: May the Conservator Revoke

the Perfected and Enforceable Contract.

It is not disputed that the petitioner Bank was under a conservator placed by the Central Bank of the Philippines during the
time that the negotiation and perfection of the contract of sale took place. Petitioners energetically contended that the
conservator has the power to revoke or overrule actions of the management or the board of directors of a bank, under
Section 28-A of Republic Act No. 265 (otherwise known as the Central Bank Act) as follows:
 Whenever, on the basis of a report submitted by the appropriate supervising or examining department, the
Monetary Board finds that a bank or a non-bank financial intermediary performing quasi-banking functions is in a
state of continuing inability or unwillingness to maintain a state of liquidity deemed adequate to protect the interest
of depositors and creditors, the Monetary Board may appoint a conservator to take charge of the assets, liabilities,
and the management of that institution, collect all monies and debts due said institution and exercise all powers
necessary to preserve the assets of the institution, reorganize the management thereof, and restore its viability.
He shall have the power to overrule or revoke the actions of the previous management and board of directors of
the bank or non-bank financial intermediary performing quasi-banking functions, any provision of law to the
contrary notwithstanding, and such other powers as the Monetary Board shall deem necessary.

In the first place, this issue of the Conservator's alleged authority to revoke or repudiate the perfected contract of sale was
raised for the first time in this Petition — as this was not litigated in the trial court or Court of Appeals. As already stated
earlier, issues not raised and/or ventilated in the trial court, let alone in the Court of Appeals, "cannot be raised for the first
time on appeal as it would be offensive to the basic rules of fair play, justice and due process." 43

In the second place, there is absolutely no evidence that the Conservator, at the time the contract was perfected, actually
repudiated or overruled said contract of sale. The Bank's acting conservator at the time, Rodolfo Romey, never objected
to the sale of the property to Demetria and Janolo. What petitioners are really referring to is the letter of Conservator
Encarnacion, who took over from Romey after the sale was perfected on September 30, 1987 (Annex V, petition) which
unilaterally repudiated — not the contract — but the authority of Rivera to make a binding offer — and which unarguably
came months after the perfection of the contract. Said letter dated May 12, 1988 is reproduced hereunder:

May 12, 1988

Atty. Noe C. Zarate

Zarate Carandang Perlas & Ass.
Suite 323 Rufino Building
Ayala Avenue, Makati, Metro-Manila

Dear Atty. Zarate:

This pertains to your letter dated May 5, 1988 on behalf of Attys. Janolo and Demetria regarding the six (6)
parcels of land located at Sta. Rosa, Laguna.

We deny that Producers Bank has ever made a legal counter-offer to any of your clients nor perfected a "contract
to sell and buy" with any of them for the following reasons.

In the "Inter-Office Memorandum" dated April 25, 1986 addressed to and approved by former Acting Conservator
Mr. Andres I. Rustia, Producers Bank Senior Manager Perfecto M. Pascua detailed the functions of Property
Management Department (PMD) staff and officers (Annex A.), you will immediately read that Manager Mr.
Mercurio Rivera or any of his subordinates has no authority, power or right to make any alleged counter-offer. In
short, your lawyer-clients did not deal with the authorized officers of the bank.

Moreover, under Sec. 23 and 36 of the Corporation Code of the Philippines (Bates Pambansa Blg. 68.) and Sec.
28-A of the Central Bank Act (Rep. Act No. 265, as amended), only the Board of Directors/Conservator may
authorize the sale of any property of the corportion/bank..

Our records do not show that Mr. Rivera was authorized by the old board or by any of the bank conservators
(starting January, 1984) to sell the aforesaid property to any of your clients. Apparently, what took place were just
preliminary discussions/consultations between him and your clients, which everyone knows cannot bind the
Bank's Board or Conservator.

We are, therefore, constrained to refuse any tender of payment by your clients, as the same is patently violative of
corporate and banking laws. We believe that this is more than sufficient legal justification for refusing said alleged
tender.

Rest assured that we have nothing personal against your clients. All our acts are official, legal and in accordance
with law. We also have no personal interest in any of the properties of the Bank.
 Please be advised accordingly.

Very truly yours,

(Sgd.) Leonida T. Encarnacion

LEONIDA T. EDCARNACION
Acting Conservator

In the third place, while admittedly, the Central Bank law gives vast and far-reaching powers to the conservator of a bank,
it must be pointed out that such powers must be related to the "(preservation of) the assets of the bank, (the
reorganization of) the management thereof and (the restoration of) its viability." Such powers, enormous and extensive as
they are, cannot extend to the post-facto repudiation of perfected transactions, otherwise they would infringe against the
non-impairment clause of the Constitution 44 . If the legislature itself cannot revoke an existing valid contract, how can it
delegate such non-existent powers to the conservator under Section 28-A of said law?

Obviously, therefore, Section 28-A merely gives the conservator power to revoke contracts that are, under existing law,
deemed to be defective — i.e., void, voidable, unenforceable or rescissible. Hence, the conservator merely takes the
place of a bank's board of directors. What the said board cannot do — such as repudiating a contract validly entered into
under the doctrine of implied authority — the conservator cannot do either. Ineluctably, his power is not unilateral and he
cannot simply repudiate valid obligations of the Bank. His authority would be only to bring court actions to assail such
contracts — as he has already done so in the instant case. A contrary understanding of the law would simply not be
permitted by the Constitution. Neither by common sense. To rule otherwise would be to enable a failing bank to become
solvent, at the expense of third parties, by simply getting the conservator to unilaterally revoke all previous dealings which
had one way or another or come to be considered unfavorable to the Bank, yielding nothing to perfected contractual rights
nor vested interests of the third parties who had dealt with the Bank.

The Fifth Issue: Were There Reversible Errors of Facts?

Basic is the doctrine that in petitions for review under Rule 45 of the Rules of Court, findings of fact by the Court of
Appeals are not reviewable by the Supreme Court. In Andres vs. Manufacturers Hanover & Trust Corporation, 45 , we held:

. . . The rule regarding questions of fact being raised with this Court in a petition for certiorari under Rule 45 of the
Revised Rules of Court has been stated in Remalante vs. Tibe, G.R. No. 59514, February 25, 1988, 158 SCRA
138, thus:

The rule in this jurisdiction is that only questions of law may be raised in a petition for certiorari under Rule 45 of
the Revised Rules of Court. "The jurisdiction of the Supreme Court in cases brought to it from the Court of
Appeals is limited to reviewing and revising the errors of law imputed to it, its findings of the fact being conclusive
" [Chan vs. Court of Appeals, G.R. No. L-27488, June 30, 1970, 33 SCRA 737, reiterating a long line of
decisions]. This Court has emphatically declared that "it is not the function of the Supreme Court to analyze or
weigh such evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been
committed by the lower court" (Tiongco v. De la Merced, G. R. No. L-24426, July 25, 1974, 58 SCRA 89; Corona
vs. Court of Appeals, G.R. No. L-62482, April 28, 1983, 121 SCRA 865; Baniqued vs. Court of Appeals, G. R. No.
L-47531, February 20, 1984, 127 SCRA 596). "Barring, therefore, a showing that the findings complained of are
totally devoid of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of
discretion, such findings must stand, for this Court is not expected or required to examine or contrast the oral and
documentary evidence submitted by the parties" [Santa Ana, Jr. vs. Hernandez, G. R. No. L-16394, December
17, 1966, 18 SCRA 973] [at pp. 144-145.]

Likewise, in Bernardo vs. Court of Appeals 46 , we held:

The resolution of this petition invites us to closely scrutinize the facts of the case, relating to the sufficiency of
evidence and the credibility of witnesses presented. This Court so held that it is not the function of the Supreme
Court to analyze or weigh such evidence all over again. The Supreme Court's jurisdiction is limited to reviewing
errors of law that may have been committed by the lower court. The Supreme Court is not a trier of facts. . . .

As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goldrock Construction and Development Corp. 47 :

The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals, are final
and conclusive and may not be reviewed on appeal. Among the exceptional circumstances where a
 reassessment of facts found by the lower courts is allowed are when the conclusion is a finding grounded entirely
on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or impossible;
when there is grave abuse of discretion in the appreciation of facts; when the judgment is premised on a
misapprehension of facts; when the findings went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee. After a careful study of the case at bench, we find none of the above
grounds present to justify the re-evaluation of the findings of fact made by the courts below.

In the same vein, the ruling of this Court in the recent case of South Sea Surety and Insurance Company
Inc. vs. Hon. Court of Appeals, et al. 48 is equally applicable to the present case:

We see no valid reason to discard the factual conclusions of the appellate court, . . . (I)t is not the function of this
Court to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties,
particularly where, such as here, the findings of both the trial court and the appellate court on the matter coincide.
(emphasis supplied)

Petitioners, however, assailed the respondent Court's Decision as "fraught with findings and conclusions which were not
only contrary to the evidence on record but have no bases at all," specifically the findings that (1) the "Bank's counter-offer
price of P5.5 million had been determined by the past due committee and approved by conservator Romey, after Rivera
presented the same for discussion" and (2) "the meeting with Co was not to scale down the price and start negotiations
anew, but a meeting on the already determined price of P5.5 million" Hence, citing Philippine National Bank vs. Court of
Appeals 49 , petitioners are asking us to review and reverse such factual findings.

The first point was clearly passed upon by the Court of Appeals 50 , thus:

There can be no other logical conclusion than that when, on September 1, 1987, Rivera informed plaintiffs by
letter that "the bank's counter-offer is at P5.5 Million for more than 101 hectares on lot basis, "such counter-offer
price had been determined by the Past Due Committee and approved by the Conservator after Rivera had duly
presented plaintiffs' offer for discussion by the Committee . . . Tersely put, under the established fact, the price of
P5.5 Million was, as clearly worded in Rivera's letter (Exh. "E"), the official and definitive price at which the bank
was selling the property. (p. 11, CA Decision)

. . . The argument deserves scant consideration. As pointed out by plaintiff, during the meeting of September 28,
1987 between the plaintiffs, Rivera and Luis Co, the senior vice-president of the bank, where the topic was the
possible lowering of the price, the bank official refused it and confirmed that the P5.5 Million price had been
passed upon by the Committee and could no longer be lowered (TSN of April 27, 1990, pp. 34-35) (p. 15, CA
Decision).

The respondent Court did not believe the evidence of the petitioners on this point, characterizing it as "not credible" and
"at best equivocal and considering the gratuitous and self-serving character of these declarations, the bank's submissions
on this point do not inspire belief."

To become credible and unequivocal, petitioners should have presented then Conservator Rodolfo Romey to testify on
their behalf, as he would have been in the best position to establish their thesis. Under the rules on evidence 51 , such
suppression gives rise to the presumption that his testimony would have been adverse, if produced.

The second point was squarely raised in the Court of Appeals, but petitioners' evidence was deemed insufficient by both
the trial court and the respondent Court, and instead, it was respondent's submissions that were believed and became
bases of the conclusions arrived at.

In fine, it is quite evident that the legal conclusions arrived at from the findings of fact by the lower courts are valid and
correct. But the petitioners are now asking this Court to disturb these findings to fit the conclusion they are espousing,
This we cannot do.

To be sure, there are settled exceptions where the Supreme Court may disregard findings of fact by the Court of
Appeals 52 . We have studied both the records and the CA Decision and we find no such exceptions in this case. On the
contrary, the findings of the said Court are supported by a preponderance of competent and credible evidence. The
inferences and conclusions are seasonably based on evidence duly identified in the Decision. Indeed, the appellate court
patiently traversed and dissected the issues presented before it, lending credibility and dependability to its findings. The
best that can be said in favor of petitioners on this point is that the factual findings of respondent Court did not correspond
to petitioners' claims, but were closer to the evidence as presented in the trial court by private respondent. But this alone
is no reason to reverse or ignore such factual findings, particularly where, as in this case, the trial court and the appellate
court were in common agreement thereon. Indeed, conclusions of fact of a trial judge — as affirmed by the Court of
Appeals — are conclusive upon this Court, absent any serious abuse or evident lack of basis or capriciousness of any
kind, because the trial court is in a better position to observe the demeanor of the witnesses and their courtroom manner
as well as to examine the real evidence presented.

Epilogue.

In summary, there are two procedural issues involved forum-shopping and the raising of issues for the first time on appeal
[viz., the extinguishment of the Bank's offer of P5.5 million and the conservator's powers to repudiate contracts entered
into by the Bank's officers] — which per se could justify the dismissal of the present case. We did not limit ourselves
thereto, but delved as well into the substantive issues — the perfection of the contract of sale and its enforceability, which
required the determination of questions of fact. While the Supreme Court is not a trier of facts and as a rule we are not
required to look into the factual bases of respondent Court's decisions and resolutions, we did so just the same, if only to
find out whether there is reason to disturb any of its factual findings, for we are only too aware of the depth, magnitude
and vigor by which the parties through their respective eloquent counsel, argued their positions before this Court.

We are not unmindful of the tenacious plea that the petitioner Bank is operating abnormally under a government-
appointed conservator and "there is need to rehabilitate the Bank in order to get it back on its feet . . . as many people
depend on (it) for investments, deposits and well as employment. As of June 1987, the Bank's overdraft with the Central
Bank had already reached P1.023 billion . . . and there were (other) offers to buy the subject properties for a substantial
amount of money." 53

While we do not deny our sympathy for this distressed bank, at the same time, the Court cannot emotionally close its eyes
to overriding considerations of substantive and procedural law, like respect for perfected contracts, non-impairment of
obligations and sanctions against forum-shopping, which must be upheld under the rule of law and blind justice.

This Court cannot just gloss over private respondent's submission that, while the subject properties may currently
command a much higher price, it is equally true that at the time of the transaction in 1987, the price agreed upon of P5.5
million was reasonable, considering that the Bank acquired these properties at a foreclosure sale for no more than P3.5
million 54 . That the Bank procrastinated and refused to honor its commitment to sell cannot now be used by it to promote
its own advantage, to enable it to escape its binding obligation and to reap the benefits of the increase in land values. To
rule in favor of the Bank simply because the property in question has algebraically accelerated in price during the long
period of litigation is to reward lawlessness and delays in the fulfillment of binding contracts. Certainly, the Court cannot
stamp its imprimatur on such outrageous proposition.

WHEREFORE, finding no reversible error in the questioned Decision and Resolution, the Court hereby DENIES the
petition. The assailed Decision is AFFIRMED. Moreover, petitioner Bank is REPRIMANDED for engaging in forum-
shopping and WARNED that a repetition of the same or similar acts will be dealt with more severely. Costs against
petitioners.

SO ORDERED.

.
G.R. No. 101021. April 6, 1993. SAN MIGUEL CORPORATION, petitioner,vs.THE NATIONAL LABOR RELATIONS
COMMISSION and MARIO BRAGANCIA, respondents.Angara, Abello, Concepcion, Regala & Cruz for
petitioner.Potenciano A. Flores, Jr. for private respondent.

Before us is a petition for certiorari seeking to nullify the Resolution dated June 14, 1991 (Annex "K", p. 115, Rollo) of
public respondent National Labor Relations Commission (NLRC, hereafter) in NLRC NCR CA No. 000933-90, as well as
the Resolution dated July 19, 1991 (Annex "M", p. 141 Rollo), which denied petitioner's motion for reconsideration, both
for having been allegedly issued with grave abuse of discretion amounting to lack of jurisdiction.

We shall rely on the narration of facts of the NLRC.

On February 6, 1990, private respondent Mario Bragancia, a machine operator in the Feeding Section, Main Bottling
Department of petitioner San Miguel Corporation was dismissed from service. The cause of the termination, per version of
petitioner, was that Bragancia, together with a, certain Cornelio Caoili, assaulted Florentino Sevilla, a co-employee, when
the latter refused to join a boycott of overtime work.

Bragancia denied the charge, claiming that his role in the incident was merely to pacify the protagonists, Caoili and
Sevilla, and sought, through the CBA-established grievance committee, a reconsideration of his dismissal. When the
grievance committee sustained his termination, private respondent filed, on July 4, 1990, a complaint for unfair labor
practice and illegal dismissal, with prayer for actual, moral, and exemplary damages.

On September 17, 1990, petitioner filed a motion to dismiss the case for alleged lack of jurisdiction on the part of the
Labor Arbiter over the subject matter of the complaint, claiming that since Bragancia had sought reconsideration of his
dismissal from the grievance machinery established pursuant to Section 2, Article III of the CBA, then any recourse
therefrom should be before a panel of voluntary arbitrators in accordance with the same CBA, citing in support thereof
Article 261 of the Labor Code, as amended, which provides:

The voluntary arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances . . . arising from the interpretation or enforcement of company personnel policies referred to in the
immediately preceding Article . . .

Petitioner's motion was favorably viewed by Labor Arbiter Ernesto Dinopol who issued on October 9, 1990, an Order
(Annex "H", p. 83, Rollo) disposing:

Wherefore, all the foregoing premises considered, the Motion to Dismiss being impressed with merit, is hereby granted,
and this case, conformably with paragraph 1(c) of Article 217 of the Code, is hereby referred to the voluntary arbitration as
provided for in the collective bargaining agreement.

Records (Annex "I", p. 86, Rollo) show that Bragancia's counsel received a copy of the aforesaid order on October 23,
1990. He filed his Appeal-Memorandum on November 5, 1990, maintaining that the Labor Arbiter had jurisdiction over his
complaint. Following NLRC rules, however, he should have filed his appeal on November 2, 1990, the tenth calendar day.

Nonetheless, the NLRC ruled in his favor and remanded the case to the arbitration branch for further proceedings (p. 121,
Rollo).

Petitioner's motion for reconsideration was denied for lack of merit on July 19, 1991. Hence, the instant petition, with
petitioner contending that:

Respondent NLRC acted with grave abuse of discretion in resolving individual respondent's appeal considering that the
appealed order had already become final and executory.

II

Respondent NLRC acted with grave abuse of discretion in reversing the labor arbiter's order dismissing the complaint for
lack of jurisdiction and remanding the case to the grievance machinery. (p. 12, Rollo.)
Petitioner is correct in pointing out that the ten-day period fixed by Article 223 of the Labor Code, concerning appeals from
decisions or orders of the Labor Arbiter contemplates "calendar" days and not "working" days (Vir-Jen Shipping and
Marine Services v. NLRC, 115 SCRA 347 [1982]; Ernesto Dizon, Jr. vs. NLRC, et al., 181 SCRA 477 [1990]); and that if
the last day to appeal falls on a Saturday, the act is still due on that day, Saturday being a business day (Olacao v. NLRC,
177 SCRA 38 [1989]).

Moreover, we have consistently ruled that perfection of an appeal within the ten-day reglementary period is not only
mandatory but jurisdictional. Thus, in the case of Paramount Vinyl Corp. vs. NLRC, et al. (190 SCRA 533 [1990]), we
stated:

Well-settled is the rule that the perfection of an appeal within the statutory or reglementary period is not only mandatory,
but also jurisdictional. Failure to interpose a timely appeal (or a motion for reconsideration) renders the assailed decision,
order or award final and executory that deprives the appellate body of any jurisdiction to alter the final judgment [Cruz v.
WCC, G.R. No. L-42739, January 31, 1978, 81 SCRA 445; Volkshel Labor Union v. NLRC, G.R. No. L-39686, June 28,
1980, 98 SCRA 314; Acda v. Minister of Labor, G.R. No. 51607, December 15, 1982, 119 SCRA 306; Rizal Empire
Insurance Group v. NLRC, G.R. No. 73140, May 29, 1987, 150 SCRA 565; MAI Philippines, Inc. v. NLRC, G.R. No,
73662, June 18, 1987, 151 SCRA 196; Narag v. NLRC, G.R. No. 69628, October 28, 1987, 155 SCRA 199; John Clement
Consultants, Inc. v. NLRC, G.R. No. 72096, January 29, 1988, 157 SCRA 635; Bongay v. Martinez, G.R. No. 77188,
March 14, 1988, 158 SCRA 552; Manuel L. Quezon University v. Manuel L. Quezon Educational Institution, G.R No.
82312, April 19, 1989, 172 SCRA 597]. (at pp. 533-534.)

On the basis of the foregoing, it is clear that the NLRC abused its discretion when it entertained Bragancia's appeal. Labor
Arbiter Ernesto Dinopol's decision had already become final and executory when the Union/Bragancia filed their Appeal-
Memorandum on November 5, 1990, 3 days too late.

WHEREFORE, the petition is hereby GRANTED. The challenged Resolutions of June 14, 1991 and July 19, 1991 are
hereby SET ASIDE and the decision of Labor Arbiter Ernesto Dinopol referring the case to Voluntary Arbitration is hereby
REINSTATED.

The temporary restraining order issued on March 2, 1992 is hereby LIFTED. No special pronouncement is made as to
costs.

[G.R. No. 114761. January 19, 2000.]

ALEMAR’S SIBAL & SONS, INC., Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, NLM-KATIPUNAN
(representing the group of CHARITO ALIMORONG), Respondents.

The petition before the Court is for certiorari 1 to set aside the resolutions of the National Labor Relations Commission 2
dismissing the appeal of petitioner and upholding the order of the Labor Arbiter to proceed with the execution of the
decision rendered in favor of private Respondent.chanrobles virtual lawlibrary

On January 30, 1984, private respondent NLM Katipunan, representing the group of Charito Alimurong, filed with the
Department of Labor and Employment a notice of strike, 3 raising charges of unfair labor practice (ULP) and illegal
dismissal against petitioner. Thereafter, the charges were elevated to respondent National Labor Relations Commission
(NLRC) for compulsory arbitration. 4

On April 29, 1985, Labor Arbiter Emilio V. Peñalosa rendered a decision 5 ordering petitioner to pay private respondent
separation pay equivalent to one-half (½) month pay for every year of service.

On December 23, 1985, the Research and Information Unit of the NLRC submitted its computation of the separation pay
due to private respondent, which amounted to a total of P207,365.33.

On January 4, 1988, private respondent filed with the Labor Arbiter a motion for execution of the decision of the Labor
Arbiter. Petitioner did not file any opposition thereto.

At the hearing held on April 19, 1988, petitioner and private respondent agreed to the computation of the separation pay.
The terms of settlement are as follows:jgc:chanrobles.com.ph

"As agreed upon by the parties, a downpayment of P20,736.53 will be paid in May 1988 which is equivalent to 10% of the
total money judgment. In June 1988, P41,473.06 will be paid by respondent and the rest covering the initial forty four (44)
will be paid July 1988. The balance of the P207,365.20 will be spread over a fifteen (15) months period."cralaw virtua1aw
library

"(Sgd) Counsel (Sgd) Counsel

for Complainant for Respondent" 6

Thus, Labor Arbiter Jose de Vera directed petitioner to pay the agreed amount of P20,736.53 representing 10% of the
total amount of the separation pay due the complainants on May 16, 1988.

On June 10, 1988, the Rehabilitation Receiver of petitioner submitted a Manifestation with Motion, 7 alleging that
petitioner was not yet in a position to comply with the directive of Labor Arbiter de Vera for the reason that it was still
under Rehabilitation Receivership by virtue of the order of the Securities and Exchange Commission (SEC) dated August
1, 1984. Thus, it sought deferment of such payment until the SEC will issue an order formally approving the rehabilitation
of petitioner and allowing complainants to file their claims with the Rehabilitation Receiver.

Due to the failure of petitioner to comply with its obligation to pay the first batch of complainants their separation pay, the
Labor Arbiter granted the motion for execution of private respondent in an order dated July 18, 1988.

On August 5, 1988, petitioner filed a motion for reconsideration of the order granting the motion for execution, contesting
the amount computed by the Research Information Unit of the National Labor Relations Commission.chanrobles virtual
lawlibrary

On September 9, 1988, Labor Arbiter Jose De Vera denied the motion, stating as follows:jgc:chanrobles.com.ph

". . . respondent failed to manifest any objection or to submit its comment on the computation made by the Research and
Information Unit, this Branch. In fact, on March 17, 1988, it submitted a proposal as to how the complainants’ claim for
separation pay would be satisfied. Further, when the complainants agreed to accept payment of their separation pay on
scheduled basis, the first payment of P20,736.53 scheduled in May 1988, which was agreed upon by the parties, said
respondent failed to comply and instead, it filed a Manifestation with Motion praying for the deferment of execution until
the Securities and Exchange Commission issues an Order formally approving the rehabilitation of the Respondent.

Besides, the respondent Motion for Reconsideration is filed out of time considering that as per bailiff’s return, respondent
received the questioned Order on July 26, 1988 while its Motion was filed only on August 5, 1988, or more than ten (10)
days from receipt of the Order." 8

On September 26, 1988, petitioner filed with the Labor Arbiter a Motion to Suspend Execution, 9 citing as reason therefor
the order issued by the Securities and Exchange Commission which states:jgc:chanrobles.com.ph

"All actions for claims against the corporation before any court, tribunal or body are suspended accordingly." 10

On October 27, 1988, petitioner appealed the Labor Arbiter’s order 11 for the issuance of a writ of execution to the NLRC.
In a decision dated October 13, 1993, the NLRC dismissed the appeal. On February 2, 1994, the NLRC likewise denied
the petitioner’s motion for reconsideration.

Hence, this petition. 12

Petitioner contends that public respondent should have denied the order of the Labor Arbiter for the immediate payment of
separation pay in favor of private Respondent. Petitioner insists that a stay of execution of monetary award is justified in
this case because of the order of the Securities and Exchange Commission suspending all claims against petitioner
pending before any court, tribunal or body.

The Solicitor General, in his Manifestation, 13 recommends that the petition be given due course without prejudice to the
subsequent receipt of separation pay by private respondent in accordance with the preference and concurrence of credits
under the Civil Code, the Insolvency Law and Article 110 of the Labor Code.

Respondent National Labor Relations Commission, on the other hand, contends that petitioner is bound by its agreement
with private respondent as to the computation of separation pay to be paid. The NLRC emphasizes that the order of
execution made by the Labor Arbiter had reached finality and stresses that petitioner’s succeeding motions had been filed
out of time. 14

We note that at the time this petition had been filed on May 4, 1994, petitioner had been placed under rehabilitation
receivership. Jurisprudence has established that a stay of execution may be warranted by the fact that a petitioner
corporation has been placed under rehabilitation receivership. 15 However, it is undisputed that on March 5, 1997, the
Securities and Exchange Commission issued an order approving the proposed rehabilitation plan of petitioner and placing
it under liquidation pursuant to Presidential Decree 902-A. Subject to the control of the SEC, the liquidator, Ledesma,
Saludo & Associates, 16 was ordered to "wind up the affairs of the corporation, continue to manage the corporation for
purposes of liquidation in order to protect the interest of its creditors and avoid dissipation, loss, wastage, or destruction of
the remaining assets and other properties of the corporation and to ensure orderly payment of claims against such
corporation in accordance with applicable laws." 17

Thus, petitioner pointed out that the SEC’s order suspending all claims against it pending before any other court, tribunal
or body was pursuant to the rehabilitation receivership proceedings. Such order was necessary to enable the
rehabilitation receiver to effectively exercise its powers free from any judicial or extra-judicial interference that might
unduly hinder the rescue of the distressed company. 18 Since receivership proceedings have ceased and petitioner’s
rehabilitation receiver and liquidator, Ledesma Saludo & Associates, has been given the imprimatur to proceed with
corporate liquidation, the cited order of the Securities and Exchange Commission has been rendered functus officio. Thus,
there is no legal impediment for the execution of the decision of the Labor Arbiter for the payment of separation
pay.chanrobles.com : law library

Considering that petitioner’s monetary obligation to private respondent is long overdue and that petitioner has signified its
willingness to comply with such obligation by entering into an agreement with private respondent as to the amount and
manner of payment, petitioner can not delay satisfaction of private respondent’s claim. However, due to events
subsequent to the filing of this petition, private respondent must present its claim with the rehabilitation receiver and
liquidator of petitioner, subject to the rules on preference of credits.

WHEREFORE, the Court hereby DISMISSES the petition and directs private respondent to file its claim with the
rehabilitation receiver/liquidator of petitioner in SEC EB No. 81 entitled "In the Matter of the Liquidation of Alemar’s Sibal &
Sons" pending before the Securities and Exchange Commission.

No costs.

SO ORDERED.chanrobles virtua| |aw |ibrary

Davide, Jr., C.J., Puno, Kapunan and Ynares-Santiago, JJ., concur.