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[G.R. No. 188169, November 28, 2011] NIÑA JEWELRY MANUFACTURING OF METAL ARTS, INC. (OTHERWISE   KNOWN AS NIÑA MANUFACTURI...
On August 13, 2004, Niña Jewelry imposed a policy for goldsmiths requiring them topost cash bonds or deposits in varying a...
their fellow goldsmiths that they will bring the matter to the Labor Commission.Complainants did not anymore report for wo...
The respondents filed a Petition for Certiorari[10] before the CA ascribing patent errors inthe appreciation of facts and ...
[w]e hold that Niña Jewelrys unilateral imposition of cash deposits or salary deductionon [the] petitioners is illegal. Fo...
II.WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDINGTHAT THERE WAS CONSTRUCTIVE DISMISSAL IN THE PRESENT CASE A...
Further, the respondents claim that there was no plausible reason for them to abandontheir employment considering the leng...
The petitioners also point out that the doctrines in Hantex[29] and Anflo Management[30]cited by the respondents find no a...
xxx [R]ule 45 limits us to the review of questions of law raised against the assailed CAdecision, In ruling for legal corr...
WHEN THEY WERE REQUIRED TO PUT UP CASH BOND OR SIGN ANAUTHORIZATION FOR DEDUCTION.                                        ...
United States in the first week of September of 2004, the latter even called to inquirefrom him why the respondents were n...
reinstated. We find that the presumption relied upon by the CA pales in comparison tothe substantial evidence offered by t...
inclination would still be to strictly construe the same against the employer becauseevidently, the posting of cash bonds ...
[5]      Id. at 164-167.[6]      Id. at 54 and 56.[7]      Id. at 195-196[8]      Id. at 77-78.[9]      Id. at 113-114.[10...
offered by any person.[25]   Sec. 13. Wage deduction. Deductions from the wages of the employees may be madeby the employe...
[34]        Id. at 233.[35]  A MA Computer College-East Rizal, et al v. Allan Raymond Ignacio, G.R. No.178520, June 23, 20...
FIRST DIVISION                           [G.R. No. 185918, April 18, 2012] LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., P...
5. ALEXANDER ALLORDE                   80,471.786. WILFREDO ESCOBAR                    80,160.637. FERDINAND              ...
accordance with the foregoing modifications.SO ORDERED.[5]The complaining security guards and UP filed their respective mo...
Guaranty Deposit, Scholarship Fund, Student Fund, Publications, Research Grants, andMiscellaneous Trust Account. UP argued...
government must first be filed with the Commission on Audit (COA).Lockheed moved to reconsider the amended decision but th...
precedent that would likely affect the relationship between the public and private sectors.Lastly, Lockheed contends that ...
We cannot subscribe to Lockheed’s argument that NEA is not similarly situated with UPbecause the COA’s jurisdiction over t...
[7]      Id. at 39-56.[8]      Id. at 55.[9]      Id. at 57-64.[10]       Id. at 65.[11]       Id. at 74.[12]       Id. at...
controlled corporations, including their subsidiaries, and other self-governing boards,commissions, or agencies of the Gov...
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Additional l abor cases

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Additional l abor cases

  1. 1. [G.R. No. 188169, November 28, 2011] NIÑA JEWELRY MANUFACTURING OF METAL ARTS, INC. (OTHERWISE KNOWN AS NIÑA MANUFACTURING AND METAL ARTS, INC.) AND ELISEA B. ABELLA, PETITIONERS, VS. MADELINE C. MONTECILLO AND LIZA M. TRINIDAD, RESPONDENTS. DECISIONREYES, J.: The CaseBefore us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Courtassailing the January 9, 2009 Decision[2] and the May 26, 2009 Resolution[3] of the Courtof Appeals (CA) in CA-G.R. SP No. 01755. The dispositive portion of the assailedDecision reads:WHEREFORE, the Decision dated August 31, 2005 and Resolution dated October 28,2005 of the National Labor Relations Commission (NLRC), Founh Division, Cebu City,in NLRC Case No. V-000363-2005 are REVERSED and SET ASIDE, and a new onerendered ordering Niña jewelry Manufacturing:(1) to reinstate petitioners to their respective positions as goldsmiths without loss of seniority rights and other privileges; and(2) to pay petitioners their full backwages inclusive of allowances and other benefits or their monetary equivalent computed from the time their compensation was withheld up to their actual reinstatement.The case is REMANDED to the Labor Arbiter for the RECOMPUTATION of the totalmonetary award due to petitioners in accord with this decision. The Labor Arbiter isORDERED to submit his compliance within thirty; (30) days from notice of thisdecision, with copies furnished to the parties.[4] (citations omitted)The assailed Resolution denied the petitioners Motion for Reconsideration.[5] The Factual AntecedentsMadeline Montecillo (Madeline) and Liza Trinidad (Liza), hereinafter referred tocollectively as the respondents, were first employed as goldsmiths by the petitioner NiñaJewelry Manufacturing of Metal Arts, Inc. (Niña Jewelry) in 1996 and 1994, respectively.Madelines weekly rate was P1,500.00 while Lizas was P2,500.00. Petitioner EliseaAbella (Elisea) is Niña Jewelrys president and general manager.There were incidents of theft involving goldsmiths in Niña Jewelrys employ.
  2. 2. On August 13, 2004, Niña Jewelry imposed a policy for goldsmiths requiring them topost cash bonds or deposits in varying amounts but in no case exceeding 15% of thelatters salaries per week. The deposits were intended to answer for any loss or damagewhich Niña Jewelry may sustain by reason of the goldsmiths fault or negligence inhandling the gold entrusted to them. The deposits shall be returned upon completion ofthe goldsmiths work and after an accounting of the gold received.Niña Jewelry alleged that the goldsmiths were given the option not to post deposits, butto sign uthorizations allowing the former to deduct fronm the latters salaries amounts notexceeding 15% of their take home pay should it be found that they lost the gold entrustedto them. The respondents claimed otherwise insisting that Niña Jewelry left thegoldsmiths with no option but to post the deposits. The respondents alleged that theywere constructively dismissed by Niña Jewelry as their continued employments weremade dependent on their readiness to post the required deposits.NIña Jewelry averred that on August 14, 2004, the respondents no longer reported forwork and signinfied their defiance against the new policy which at that point had noteven been implemented yet.On September 7, 2004, the respondents filed against Niña Jewelry complaints [6] forillegal dismissal and for the award of separation pay.On September 20, 2004, the respondents filed their amended complaints[7] whichexcluded their earlier prayer for separation pay but sought reinstatement and payment ofbackwages, attorneys fees and 13th month pay.Labor Arbiter Jose! Gutierrez (LA Gutierrez) dismissed the respondents complaints forlack of merit but ordered Niña Jewelry to pay Madeline the sum of P3,750.00, and Liza,P6,250.00, representing their proportionate entitlements to 13th month pay for the year2004. LA Gutierrez ratiocinated that:Their [respondents] claim is self-serving. As evidence to (sic) their claims that they weremade to sign blank trust receipts, complainants presented Annexes A[,] C and C. Ourexamination, however, shows that they are not blank trust receipts but rather they arefilled up trust receipts.The undisputed facts show that complainants were piece workers of the respondent whoare engaged in the processing of gold into various jewelry pieces. Because of the natureof its business, respondent was plagued with too many incidents of theft from its pieceworkers, x x x This deposit [not exceeding 15% of the salary for the week of the pieceworker] is released back upon completion of work and after accounting of the goldreceived by him or her. There is an alternative, however, the piece worker may opt not togive a deposit, instead sign an authorization to allow the respondent to deduct from thesalary an amount not to exceed 15% of his take home pay, should it be found out that helost the gold [entrusted] to him or her due to his or her fault or negligence. Thecomplainants did not like to post a deposit, or sign an authorization. They instead told
  3. 3. their fellow goldsmiths that they will bring the matter to the Labor Commission.Complainants did not anymore report for work and did not anymore perform theirtasks. ,The fact of complainants not being dismissed from employment was duly attestedto by his co-workers who executed their Joint Affidavit under oath, Annex 4.As further evidence to prove that they were dismissed, complainants presented theminutes of [the] Sept. 7, 2004 conference.We examined the statements therein, we find that there is no admission on the part of therespondents that they terminate[d] the complainants from employment. Respondents onlyinform[ed] the complainants to put up the appropriate cash bond before they could beallowed to return back to work which they previously refused to perform, as a sign oftheir protest to the requirement to post cash bond or to sign an authorization.xxxxx x x It is clearly shown that complainants were paid with their 13Ll1 month pay for theyear 200 f 2002 and 2003. However, for the year 2004, considering that complainantshave worked until the month of August, we rule to grant them the proportionate 13thmonth pay as there is no showing that they were already paid.,The other money claimsare denied for lack of merit, xxx.[8]The respondents filed an appeal before the NLRC which affirmed LA Gutierrezsdismissal of the amended complaints but deleted the award of 13n month pay based onfindings that the former had contracted unpaid individual loans from Niña Jewelry. TheNLRC found that:xxx [I]t was complainants who refused to work with the respondents when they wererequired to post cash bond or sign an authorization for deduction for the gold materialthey received and to be manufactured into various jewelries, xxx We find it logicallysound for the latter [Niña Jewelry] to innovate certain policy or rule to protect its ownbusiness. To deprive them of such prerogative [management prerogative] will be likenedto killing the goose that lays the golden eggs."xxx [C]omplainants failed to prove their affirmative allegations in the respectivecomplaints that they were indeed dismissed. On the contrary, respondents haveconvincingly shown that if (sic) were complainants who voluntarily abandoned from(sic) their work by refusing to abide with the newly adopted company policy of puttingup a cash bond or signing an authorization for deduction for the gold materials entrustedto them in case of loss or pilferage.xxx [B]oth complainants are still indebted with (sic) the respondents in the amounts ofP5,118.63 in the case of Madeline Montecillo and P7,963.11 in the case of LizaMontecillo. Such being the case[,] Madeline Montecilo has still on account payable ofP1,368.63 while Liza Montecillo is still indebted of P1,713.71. This principle ofoffsetting of credit should be allowed to preclude unjust enrichment at the expense of therespondents. [9]
  4. 4. The respondents filed a Petition for Certiorari[10] before the CA ascribing patent errors inthe appreciation of facts and application of jurisprudence on the part of the NLRC whenit ruled that what occurred was not a case of illegal dismissal but of abandonment ofwork.On January 9, 2009, the CA rendered the now assailed Decision[11]reversing the findingsof the LA and the NLRC. The CA ruled:According to [the] private respondents, they required a deposit or cash bond from [the]petitioners in order to secure their interest against gold thefts committed by some of theiremployees. If the employee fails to make the required deposit, he will not be given goldto work on. Further, [the] private respondents admitted during the conciliationproceedings before Executive Labor Arbiter Violeta Ortiz-Bantug that [the] petitionerswould only be allowed back to work after they had posted the proportionate cash bond.The Labor Code of the Philippines provides:ART. 113. Wage Deduction. - No employer, in his own behalf or in behalf of any person,shall make any deduction from the wages of his employees, except:(a) In cases where the worker is insured with his consent by the employer, and thededuction is to recompense the employer for the amount paid by him as premium on theinsurance;(b) For union dues, in cases where the right of the worker or his union to check-off hasbeen recognized by the employer or authorized in writing by the individual workerconcerned; and(c) In cases where the employer is authorized by law or regulations isued by Secretary ofLabor.Article 114. Deposits for loss or damage. - No employer shall require his work to makedeposits from which deductions shall be made for the reimbursement of loss of ordamage to tools, materials, or equipment supplied by the employer, except when theemployer is engaged in such trades, occupations or business where the practice of makingdeposits is a recognized one, or is necessary of desirable as determined by the Secretaryof Labor in appropriate rules and regulations.Applying these provisions to the case at bar, before [the] petitioners may be required todeposit cash or agree to a salary deduction proportionate to the value of gold delivered tothem, the employer must comply with the relevant conditions imposed by law. Hence,the latter must prove that there is an existing law or regulation authorizing it to imposesuch burden on its employees. And, in case of deposit, that it is engaged in a trade,occupation or business where such requirement is a recognized practice. Niña Jewelryobviuosly failed in this respect. Surely, mere invocation of management prerogativecannot excempt it from compliance with the strict requirements of law. Accordingly,
  5. 5. [w]e hold that Niña Jewelrys unilateral imposition of cash deposits or salary deductionon [the] petitioners is illegal. For that matter, when Ni[ñ]a Jewelry refused to giveassignment to [the] petitioner or to admit them back to work because they failed to givecash deposit or agree to a salary deduction, it was deemed to have constructivelydismissed [the] petitioners. Obviously, such deposit or salary deduction was imposed asa condition for [the] petitioners continuing employment. Non-compliance indubitablymeant termination of [the] petitioners employment. Suldao vs. Cimech SystemConstruction, Inc. [12] enunciated:Constructive dismissal or a constructive discharge has been defined as quitting becausecontinued employment is rendered impossible, unreasonable or unlikely, as an offerinvolving a demotion in rank and a diminution in pay. There is constructive dismissalwhen the continued employment is rendered impossible so as to foreclose any choice onthe employees part except to resign from such employment.The fact that [the] petitioners lost no time in filing the complaint for illegal dismissallucidly negates [the] private respondents claim that the former had abandoned their work.A contrary notion would not only be illogical but also absurd.[13] Indeed, prompt filing ofa case for illegal dismissal, on one hand, is anathema to the concept of abandonment, onthe other.Finally, under Article 279 of the Labor Code, an illegally dismissed employee is entitledto reinstatement without loss of seniority rights and other privileges; full backwages,inclusive of allowances; and other benefits or their monetary equivalent computed fromthe time his compensation was withheld from him up to the time of his actualreinstatement. [14] x x x.As for damages, it is a rule that moral damages may be recovered where the dismissal ofthe employee was attended by bad faith or fraud or constituted an act oppressive to labor,or was done in a manner contrary to morals, good customs or public policy, x x x [w]efind that private respondents did not act with oppression, bad faith or fraud. Theyimposed a cash bond or deposit on here in petitioners in the honest belief that it was thebest way to protect their interest against gold theft in the company, x x x. [15] (somecitations omitted) The IssuesThe following are to be solved in the instant Petition for Review:[16] I.WHETHER OR NOT THE COURT OF APPEALS GROSSLY ERRED IN GIVINGDUE COURSE TO THE PETITION [under Rule 65 of the Rules of Court], IN EFFECT,FINDING GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR EXCESSOF JURISDICTION ON THE PART OF THE NLRC, DESPITE THE FACT THATTHE SUBJECT DECISION AND RESOLUTION THEREIN ARE IN PERFECTACCORD WITH THE EVIDENCE ON RECORD AND APPLICABLE LAWS.
  6. 6. II.WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDINGTHAT THERE WAS CONSTRUCTIVE DISMISSAL IN THE PRESENT CASE ANDORDERING RESPONDENTS REINSTATEMENT AS WELL AS THE PAYMENTOF THEIR BACKWAGES AND OTHER MONETARY BENEFITS WITHOUTFACTUAL OR LEGAL BASES. [17]The petitioners now argue that the CA should have outrightly dismissed the petition filedbefore it as the respondents had resorted to an erroneous mode of appeal. The argumentsraised in the petition were the same ones already passed upon by the LA and NLRC.what the respondents sought was the CAs re-evaluation of the facts and evidence. Thepetition was thus based on purported errors of judgement which are beyond the provinceof a petition for certiorari.The petitioners likewise insists that the respondents abandoned their work without duenotice and to the prejudice of the former. The respondents are goldsmiths whose skillsare indispensible to a jewelry manufacturing business, thus, it is not in accord with bothlogic and experience for the petitioners to just fire them only to rain new workers.Moreover, in the complaints and amended complaints, the respondents did not claim forreinstatement, hence, implying their admission that they were not terminated.Further, under Articles 114 and 115[19] of the Labor Code, an employer may require aworker to post a deposit even before a loss or damage has occurred, provided thatdeductions from the deposit can be made only upon proof that the worker is liable for theloss or damage. In case no loss or damage is incurred, the deposit shall be returned to theworker after the conduct of an accounting which was what happened in the case at bar.This is a valid exercise of management prerogative the scope of which includes thesetting of policies relative to working methods, procedures to be followed and workingregulations. [20]The petitioners stress that they did not transgress the respondents rights. Therespondents, who expressed to their co-workers their lack of fear to have their lack of fearto have their employment severed, are motivated by their greed to the extract money fromthe petitioners.The petitioners conclude that the CA should have accorded respect to the findings of theLA and the NLRC especialy since they were not arrived at arbitarirly or in disregard ofhe evidence on record.In the respondents Comment, [21] they reiterate the arguments they had presented in theproceedings below. The respondents emphasize that when they pleaded for reinstatementduring the conference with the petitioners on September 7, 2004, the latter openlyadmitted without reservation that the former will only be allowed to return to work if theywill post the required cash bond.
  7. 7. Further, the respondents claim that there was no plausible reason for them to abandontheir employment considering the length of their service and the fact that they were beingpaid rates above the minimum wage. Citing Hantex Trading Co. Inc. v. Court of Appeals,[22] the respondents argue that no employee in his right mind would recklessly abandonhis job to join the ranks of the unemployed and choose to unduly expose his family tohunger and untold hardship.Besides, in Anflo Management & Investment Corp. v. Rodolfo Bolanio, [23] this Court hadthe occasion to state that the filing of a complaint for illegal dismissal is inconsistent witha charge of abandonment, for an employee who takes steps to protest his lay off cannotby any logic be said to have abandoned his work.The respondents also claim that the petitioners misrepresented to this Court that theformer did not pray for reinstatement as the dorsal portions of the amended complaintsindicate otherwise.Moreover, the petitioners failed to prove their authority granted by either the law, orregulations issued by the Secretary of Labor, allowing them to require their workers topost deposits. The petitioners also failed to establish that Niña Jewelry is engaged in atrade, occupation or business where the practice of making deposits is a recognized oneor is considered as necessary or desirable by the Secretary of Labor.Citing Sections 12, [24] 13 [25] and 14, [26] Book III, Rule VIII of the Omnibus RulesImplementing the Labor Code (Omnibus Rules), the respondents posit that salarydeductions made prior to the occurrence of loss or damage are illegal and constitute asundue interferences in the workers disposal of their wages. Further, the workers mustfirst be given the opportunity to show cause why deductions should not be made. If to bemade, deductions should be fair, reasonable and should not exceed the actual loss ordamage. In the case at bar the respondents were required to post cash bonds even whenthere is no proof yet of their fault or negligence.In the petitioners Reply,[27] they averred that the day after Niña Jewelry required from itsemployees the posting of deposits and even before the policy was actually implemented,the respondents promptly stopped reporting for work despite Eliseks attempt to get intouch with them. The petitioners convened the employees to discuss the propriety ofimposing the new policy and to afford them ample opportunity to air their concerns. Therespondents acts contravene Article 19 of the New Civil Code (NCC) which requiresevery person to act with justice, give everyone his due and observe honesty and goodfaith.Further, it is clear in the Minutes of the Conciliation Proceedings[28] before the LA thatthe respondents were not willing to be reinstated and preferred instead the payment ofseparation pay. Hence, no prayer for reinstatement was indicated in the originalcomplaints filed by them. As an afterthought, however, they amended their complaints toreflect that they were likewise seeking for reinstatement.
  8. 8. The petitioners also point out that the doctrines in Hantex[29] and Anflo Management[30]cited by the respondents find no application in the case at bar. In Hantex, the employerpresented mere cash vouchers to prove abandonment by the employee. In the case beforeus, sufficient evidence show that the respondents abandoned their work. In AnfloManagement, the employer expressly uttered words terminating the employee who inturn filed a complaint the day right after the incident. In the case now under ourconsideration, the respondents merely made a bare claim of illegal dismissal.Rightly so in Abad v. Roselle Cinema,[31] it was ruled that an employers claim of nothaving Terminated an employee, when supported by substantial evidence, should not beoutrightly overcome by the argument that an employee would not have filed a complaintfor illegal dismissal if he were not really dismissed. The circumstances surrounding theseparation from employment should be taken into account.Under Article 114 of the Labor Code, the Secretary of Labor is conferred the authority topromulgate rules determining the circumstances when the making of deposits is deemedrecognized, necessary or desirable. However, Section 14,[32] Book III, Rule VIII of theOmnibus Rules does not define those circumstances. What is defined is the circumstanceswhen deductions can be made. It can thus be inferred that the intention is for the courts todetermine on a case to case basis what should be considered as recognized, necessary ordesirable especially in the light of the existence of myriads of businesses which arepractically impossible to enumerate in modern society. The petitioners hence argue thatthe validity of requiring cash deposits should be scrutinized with due consideration of itsreasonableness and necessity. Further, Article 1306 of the NCC allows contractingparties to establish stipulations, clauses, terms and conditions which they may deemconvenient provided they do not contravene the law, morals, good customs, public orderor public policy. In the case at bar, the policy adopted by the petitioners was neitherunreasonable nor oppressive. It was intended to benefit all the contracting parties.Lastly, while the respondents raise the issue of the illegality of deductions, thepetitioners stress that it is academic because no deduction was actually made yet. The Courts RulingThe instant petition is partially meritorious.The petitioners raise the procedural issue of whether or not the CA validly gave duecourse to the petition for certiorari filed before it under Rule 65 of the Rules of Court. Asthe substantive issue of whether or not the petitioners constructively dismissed therespondents is closely-intertwined with the procedural question raised, they will beresolved jointly.Yolanda Mercado, et al. v. AMA Computer College-Paranaque City, Inc.33 is instructiveas to the nature of a petition for review on certiorari under Rule 45, and a petition forcertiorari under Rule 65, viz:
  9. 9. xxx [R]ule 45 limits us to the review of questions of law raised against the assailed CAdecision, In ruling for legal correctness, we have to view the CA decision in the samecontext that the petition for certiorari it ruled upon was presented to it; we have toexamine the CA decision from the prism of whether it correctly determined thepresence or absence of grave abuse of discretion in the NLRC decision before it, noton the basis of whether the NLRC decision on the merits of the case was correct. Inother words, we have to be keenly aware that the CA undertook a Rule 65 review, not areview on appeal, of the NLRC decision challenged before it. This is the approach thatshould be basic in a Rule 45 review of a CA ruling in a labor case. In question form, thequestion to ask is: Did the CA correctly determine whether the NLRC committedgrave abuse of discretion in ruling on the case?[34]It is thus settled that this Court is bound by the CAs factual findings. The rule, however,admits of exceptions, among which is when the CAs findings are contrary to those of thetrial court or administrative body exercising quasi-judicial functions from which theaction originated.[35] The case before us falls under the aforementioned exception.The petitioners argue that the respondents resorted to an erroneous mode of appeal as theissues raised in the petition lodged before the CA essentially sought a re-evaluation offacts and evidence, hence, based on purported errors of judgment which are outside theambit of actions which can be aptly filed under Rule 65.We agree.Again in Mercado, [36] we ruled that:xxx [I]n certiorari proceedings under Rule 65 of the Rules of Court, the appellate courtdoes not assess and weigh the sufficiency of evidence upon which the Labor Arbiter andthe NLRC based their conclusion. The query in this proceeding is limited to thedetermination of whether or not .the NLRC acted without or in excess of its jurisdictionor with grave abuse of discretion in rendering its decision. However, as an exception,the appellate court may examine and measure the factual findings of the NLRC ifthe same are not supported by substantial evidence, x x x.[37]In the case at bench, in the petition for certiorari under Rule 65 filed by the respondentsbefore the CA, the following issues were presented for resolution: I.WHETHER OR NOT PUBLIC RESPONDENT [NLRC] committed patent errors in theappreciation of facts and application of pertinent jurisprudence amounting to grave abuseof discretion or lack or in excess of jurisdiction WHEN IT HELD THAT PRIVATERESPONDENTS [herein petitioners] ARE NOT GUILTY OF ILLEGAL DISMISSALBECAUSE IT WAS THE PETITIONERS [herein private respondents] WHOABANDONED THEIR JOB AND REFUSED TO WORK WITH RESPONDENTS
  10. 10. WHEN THEY WERE REQUIRED TO PUT UP CASH BOND OR SIGN ANAUTHORIZATION FOR DEDUCTION. II.WHETHER OR NOT PUBLIC RESPONDENT committed patent errors in theappreciation of facts and application of pertinent jurisprudence amounting to grave abuseof discretion or lack or in excess of jurisdiction WHEN IT DID NOT ORDER THEREINSTATEMENT OF HEREIN PETITIONERS AND DELETED THE AWARD OF13th MONTH PAY AND DENIED THE CLAIMS OF ATTORNEYS FEES,DAMAGES AND FULL BACKWAGES. [38]Essentially, the issues raised by the respondents for resolution by the CA were anchoredon an alleged misappreciation of facts and evidence by the NLRC and the LA when theyboth ruled that abandonment of work and not constructive dismissal occurred.We agree with the petitioners that what the respondents sought was a re-evaluation ofevidence, which, as a general rule cannot be properly done in a petition for certiorariunder Rule 65, save in cases where substantial evidence to support the NLRCs findingsare wanting.In Honorable Ombudsman Simeon Marcelo v. Leopoldo Bungubung,[39 ]the Court definedsubstantial evidence and laid down guidelines relative to of decisions rendered byadministrative agencies in the exercise of their quasi-judicial power, viz:xxx Substantial evidence is more than a mere scintilla of evidence. It means such relevantevidence as a reasonable mind might accept as adequate to support a conclusion, even ifother minds equally reasonable might conceivably opine otherwise. Second, in reviewingadministrative decisions of the executive branch of the government, the findings of factsmade therein are to be respected so long as they are supported by substantial evidence.Hence, it is not for the reviewing court to weigh the conflicting evidence, determine thecredibility of witnesses, or otherwise substitute its judgment for that of the administrativeagency with respect to the sufficiency of evidence. Third, administrative decisions inmatters within the executive jurisdiction can only be set aside on proof of gross abuse ofdiscretion, fraud, or error of law. These principles negate the power of the reviewingcourt to re-examine the sufficiency of the evidence in an administrative case as iforiginally instituted therein, and do not authorize the court to receive additional evidencethat was not submitted to the administrative agency concerned.[40] (citations omitted)We find the factual findings of the LA and the NLRC that the respondents were notdismissed are supported by substantial evidence.In the Joint Affidavit[41] executed by Generoso Fortunaba, Erdie Pilares and CrisantoIgnacio, all goldsmiths under Niña Jewelrys employ, they expressly stated that they havepersonal knowledge of the fact that the respondents were not terminated fromemployment. Crisanto Ignacio likewise expressed that after Elisea returned from the
  11. 11. United States in the first week of September of 2004, the latter even called to inquirefrom him why the respondents were not reporting for work. We observe that therespondents had neither ascribed any ill-motive on the part of their fellow goldsmiths noroffered any explanation as to why the latter made declarations adverse to their cause.Hence, the statements of the respondents fellow goldsmiths deserve credence. This isespecially true in the light of the respondents failure to present any notice of terminationissued by the petitioners. It is settled that there can be dismissal even in the absence of atermination notice.[42] However, in the case at bench, we find that the acts of thepetitioners towards the respondents do not at all amount to constructive dismissal.Constructive dismissal occurs when there is cessation of work because continuedemployment is rendered impossible, unreasonable or unlikely; when there is a demotionin rank or diminution in pay or both; or when a clear discrimination, insensibility, ordisdain by an employer becomes unbearable to the employee. [43]In the case now under our consideration, the petitioners did not whimsically or arbitrarilyimpose the policy to post cash bonds or make deductions from the workers salaries. Asattested to by the respondents fellow goldsmiths in their Joint Affidavit, the workerswere convened and informed of the reason behind the implementation of the new policy.Instead of airing their concerns, the respondents just promptly stopped reporting forwork.Although the propriety of requiring cash bonds seems doubtful for reasons to bediscussed hereunder, we find no grounds to hold that the respondents were dismissedexpressly or even constructively by the petitioners. It was the respondents who merelystopped reporting for work. While it is conceded that the new policy will impose anadditional burden on the part of the respondents, it was not intended to result in theirdemotion. Neither is a diminution in pay intended because as long as the workers observedue diligence in the performance of their tasks, no loss or damage shall result from theirhandling of the gold entrusted to them, hence, all the amounts due to the goldsmiths shallstill be paid in full. Further, the imposition of the new policy cannot be viewed as an acttantamount to discrimination, insensibility or disdain against the respondents. For one,the policy was intended to be implemented upon all the goldsmiths in Niña Jewelrysemploy and not solely upon the respondents. Besides, as stressed by the petitioners, thenew policy was intended to merely curb the incidences of gold theft in the work place.The new policy can hardly be said to be disdainful or insensible to the workers as torender their continued employment unreasonable, unlikely or impossible.On September 7, 2004, or more or less three weeks after the imposition of the newpolicy, the respondents filed their complaints for illegal dismissal which include theirprayer for the payment of separation pay. On September 20, 2004, they filed amendedcomplaints seeking for reinstatement instead.The CA favored the respondents argument that the latter could not have abandoned theirwork as it can be presumed that they would not have filed complaints for illegal dismissalhad they not been really terminated and had they not intended themselves to be
  12. 12. reinstated. We find that the presumption relied upon by the CA pales in comparison tothe substantial evidence offered by the petitioners that it was the respondents whostopped reporting for work and were not dismissed at all.In sum, we agree with the petitioners that substantial evidence support the LAs and theNLRCs findings that no dismissal occurred. Hence, the CA should not have given duecourse to and granted the petition for certiorari under Rule 65 filed by the respondentsbefore it.In view of our disquisition above that the findings of the LA and the NLRC that noconstructive dismissal occurred are supported by substantial evidence, the CA thus erredin giving due course to and granting the petition filed before it. Hence, it is not evennecessary anymore to resolve the issue of whether or not the policy of posting cash bondsor making deductions from the goldsmiths salaries is proper. However, considering thatthere are other goldsmiths in Niña Jewelrys employ upon whom the policy challenged bythe respondents remain to be enforced, in the interest of justice and to put things to rest,we shall resolve the issue.Article 113 of the Labor Code is clear that there are only three exceptions to the generalrule that no deductions from the employees salaries can be made. The exception whichfinds application in the instant petition is in cases where the employer is authorized bylaw or regulations issued by the Secretary of Labor to effect the deductions. On the otherhand, Article 114 states that generally, deposits for loss or damages are not allowedexcept in cases where the employer is engaged in such trades, occupations or businesswhere the practice of making deposits is a recognized one, or is necessary or desirable asdetermined by the Secretary of Labor in appropriate rules or regulations.While employers should generally be given leeways in their exercise of managementprerogatives, we agree with the respondents and the CA that in the case at bar, thepetitioners had failed to prove that their imposition of the new policy upon the goldsmithsunder Niña Jewelrys employ falls under the exceptions specified in Articles 113 and 114of the Labor Code.The petitioners point out that Section 14, Book III, Rule VIII of the Omnibus Rules doesnot define the circumstances when the making of deposits is deemed recognized,necessary or desirable. The petitioners then argue that the intention of the law is for thecourts to determine on a case to case basis what should be regarded as recognized,necessary or desirable and to test an, employers policy of requiring deposits on the basesof its reasonableness and necessity.We are not persuaded.Articles 113 and 114 of the Labor Code are clear as to what are the exceptions to thegeneral prohibition against requiring deposits and effecting deductions from theemployees salaries. Hence, a statutory construction of the aforecited provisions is notcalled for. Even if we were however called upon to interpret the provisions, our
  13. 13. inclination would still be to strictly construe the same against the employer becauseevidently, the posting of cash bonds and the making of deductions from the wages wouldinarguably impose an additional burden upon the employees.While the petitioners are not absolutely precluded from imposing the new policy, theycan only do so upon compliance with the requirements of the law. In other words, thepetitioners should first establish that the making of deductions from the salaries isauthorized by law, or regulations issued by the Secretary of Labor. Further, the posting ofcash bonds should be proven as a recognized practice in the jewelry manufacturingbusiness, or alternatively, the petitioners should seek for the determination by theSecretary of Labor through the issuance of appropriate rules and regulations that thepolicy the former seeks to implement is necessary or desirable in the conduct of business.The petitioners failed in this respect. It bears stressing that without proofs that requiringdeposits and effecting deductions are recognized practices, or without securing theSecretary of Labors determination of the necessity or desirability of the same, theimposition of new policies relative to deductions and deposits can be made subject toabuse by the employers. This is not what the law intends.In view of the foregoing, we hold that no dismissal, constructive or otherwise, occurred.The findings of the NLRC and the LA that it was the respondents who stopped reportingfor work are supported by substantial evidence. Hence, the CA erred when it re-evaluatedthe parties respective evidence and granted the petition filed before it. However, weagree with the CA that it is baseless for Nifia Jewelry to impose its new policy upon thegoldsmiths under its employ without first complying with the strict requirements of thelaw.WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailedDecision and Resolution of the CA dated January 9, 2009 and May 26, 2009,respectively, are REVERSED only in so far as they declared that the respondents wereconstructively dismissed and entitled to reinstatement and payment of backwages,allowances and benefits. However, the CAs ruling that the petitioners imposition of itsnew policy upon the respondents lacks legal basis, stands.SO ORDERED.Carpio, Brion, Perez, and Sereno, JJ., concur.[1] Rollo , pp. 26-52.[2] Penned by Associaie justice Amy C Lazaro-Javier, with Associate Justices Francisco P.Acosta and Rodil V. Zalameda. concurring; id. at 12-20.[3] Id. at 22.[4] Id. at 19-20.
  14. 14. [5] Id. at 164-167.[6] Id. at 54 and 56.[7] Id. at 195-196[8] Id. at 77-78.[9] Id. at 113-114.[10] Id. at 128-146.[11] Supra note 2.[12] G.R.No. 171392, October 30, 2006, 506 SCRA 256, 260-261.[13] Far East Agricultural Supply, Inc. v. Lebatique, G.R. No. 162813, February 12, 2007,515 SCRA 491.[14] De Guzman v. NLRC, G.R. No. 167701, December 12, 2007, 540 SCRA 21, 34.[15] Rollo , pp. 16-18.[16] Supra note 1.[17] Id. at 34.[18] Please see the Joint Affidavit of Generoso Portunoba, Erdie Pilares and CrisantoIgnacio, id. at 161-162.[19] Art. 115. Limitations. - No deduction from the deposits of an employee for the actualamount of the loss or damage shall be made unless the employee has been heard thereon,and his responsibility has been clearly shown.[20] Citing San Miguel Corporation v. Ubaldo, G. R. No. 92859, February 1, 1993, 218SCRA 293.[21] Rollo , pp. 182-188.[22] 438 Phil 737 (2002).[23] 439 Phil 309 (2002).[24] Sec. 12. Non-interference in disposal of wages. No employer shall limit or otherwiseinterfere with the freedom of any employee to dispose of his wages and employer shallin any manner oblige any of his employees to patronize any store or avail of services
  15. 15. offered by any person.[25] Sec. 13. Wage deduction. Deductions from the wages of the employees may be madeby the employer in any of the following cases:(a) When the deductions are authorized by law, including deductions for the insurancepremiums advanced by the employer in behalf of the employee as well as union dueswhere the right to check-off has been recognized by the employer or authorized in writingby the individual employee himself;(b) When the deductions are with the written authorization of the employees for paymentto a third person and the employer agrees to do so, provided that the latter does notreceive any pecuniary benefit, directly or indirectly, from the transaction.[26] Sec. 14. Deductions for loss or damages. - Where the employer is engaged in a trade,occupation or business where the practice of making deductions or reciuiring deposits isrecognized, to answer for the reimbursement of loss or damage to tools, materials, 01equipment supplied by the employer to the employee, the employer may make wagedeductions or require the employees to make deposits from which deductions shall bemade, subject to the following conditions:(a) That the employee concerned is clearly shown to be responsible for the loss ordamage;(b) That the employee is given reasonable opportunity to show cause why deductionshould not be made;(c) That the amount of sucn deductions is fair and reasonable and shall not exceed theactual loss or damage; and(d) That the deduction from the wages of the employees does not exceed 20% of theemployees wages in a week.[27] Rollo , pp. 210-220[28] Id. at 194.[29] Supra note 22.[30] Supra note 23.[31] 520 Phil 135, 146 (2006).[32] Supra note 26.[33] G.R. No. 183572, April 13, 2010, 618 SCRA 218, citing Montoya v. TrammedManila Corporation, G.R. No. 183329, August 27, 2009, 596 SCRA 334, 343.
  16. 16. [34] Id. at 233.[35] A MA Computer College-East Rizal, et al v. Allan Raymond Ignacio, G.R. No.178520, June 23, 2009, 590 SCRA 633, 651.[36] Supra note 33, citing Protacio v. Laya Mananghaya & Co., G.R. No. 168654, March25, 2009, 582 SCRA417,427.[37] id. at 232.[38] Rollo , p. 134.[ 39] G.R. No. 175201, April 23: 2008, 552 SCRA 589. citing Montemayor v. Bundalian,453 Phil 158, 167(2003).[40] Id. at 598.[41] Supra note 18.[42] Odilon Martinez v. B&B Fish Broker, G.R. No. 179985, September 18, 2009, 600SCRA 691.[43] Fe La Rosa, et al. v. Ambassador Hotel, G.R. No. 177059, March 13, 2009
  17. 17. FIRST DIVISION [G.R. No. 185918, April 18, 2012] LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., PETITIONER, VS. UNIVERSITY OF THE PHILIPPINES, RESPONDENT. DECISIONVILLARAMA, JR., J.:Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of CivilProcedure, as amended, assailing the August 20, 2008 Amended Decision[1] andDecember 23, 2008 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No.91281.The antecedent facts of the case are as follows:Petitioner Lockheed Detective and Watchman Agency, Inc. (Lockheed) entered into acontract for security services with respondent University of the Philippines (UP).In 1998, several security guards assigned to UP filed separate complaints againstLockheed and UP for payment of underpaid wages, 25% overtime pay, premium pay forrest days and special holidays, holiday pay, service incentive leave pay, night shiftdifferentials, 13th month pay, refund of cash bond, refund of deductions for the MutualBenefits Aids System (MBAS), unpaid wages from December 16-31, 1998, andattorney’s fees.On February 16, 2000, the Labor Arbiter rendered a decision as follows:WHEREFORE, premises considered, respondents Lockheed Detective and WatchmanAgency, Inc. and UP as job contractor and principal, respectively, are hereby declared tobe solidarily liable to complainants for the following claims of the latter which are foundmeritorious.Underpaid wages/salaries, premium pay for work on rest day and special holiday, holidaypay, 5 days service incentive leave pay, 13th month pay for 1998, refund of cash bond(deducted at P50.00 per month from January to May 1996, P100.00 per month from June1996 and P200.00 from November 1997), refund of deduction for Mutual Benefits AidsSystem at the rate of P50.00 a month, and attorney’s fees; in the total amount ofP1,184,763.12 broken down as follows per attached computation of the Computation and[E]xamination Unit of this Commission, which computation forms part of this Decision:1. JOSE SABALAS P77,983.622.TIRSO DOMASIAN 76,262.703. JUAN TAPEL 80,546.034. DINDO MURING 80,546.03
  18. 18. 5. ALEXANDER ALLORDE 80,471.786. WILFREDO ESCOBAR 80,160.637. FERDINAND 78,595.53VELASQUEZ8. ANTHONY GONZALES 76,869.979. SAMUEL ESCARIO 80,509.7810. PEDRO FAILORINA 80,350.8711. MATEO TANELA 70,590.5812. JOB SABALAS 59,362.4013. ANDRES DACANAYAN 77,403.7314. EDDIE OLIVAR ____77,403.7 3 P1,077,057.38plus 10% attorney’s fees 107,705.74GRAND TOTAL AWARD P1,184,763.12Third party respondent University of the Philippines is hereby declared to be liable toThird Party Complainant and cross claimant Lockheed Detective and Watchman Agencyfor the unpaid legislated salary increases of the latter’s security guards for the years 1996to 1998, in the total amount of P13,066,794.14, out of which amount the amounts duecomplainants here shall be paid.The other claims are hereby DISMISSED for lack of merit (night shift differential and13th month pay) or for having been paid in the course of this proceedings (salaries forDecember 15-31, 1997 in the amount of P40,140.44).The claims of Erlindo Collado, Rogelio Banjao and Amor Banjao are herebyDISMISSED as amicably settled for and in consideration of the amounts of P12,315.72,P12,271.77 and P12,819.33, respectively.SO ORDERED.[3]Both Lockheed and UP appealed the Labor Arbiter’s decision. By Decision[4] dated April12, 2002, the NLRC modified the Labor Arbiter’s decision. The NLRC held:WHEREFORE, the decision appealed from is hereby modified as follows: 1. Complainants’ claims for premium pay for work on rest day and special holiday, and 5 days service incentive leave pay, are hereby dismissed for lack of basis. 2. The respondent University of the Philippines is still solidarily liable with Lockheed in the payment of the rest of the claims covering the period of their service contract.The Financial Analyst is hereby ordered to recompute the awards of the complainants in
  19. 19. accordance with the foregoing modifications.SO ORDERED.[5]The complaining security guards and UP filed their respective motions forreconsideration. On August 14, 2002, however, the NLRC denied said motions.As the parties did not appeal the NLRC decision, the same became final and executory onOctober 26, 2002.[6] A writ of execution was then issued but later quashed by the LaborArbiter on November 23, 2003 on motion of UP due to disputes regarding the amount ofthe award. Later, however, said order quashing the writ was reversed by the NLRC byResolution[7] dated June 8, 2004, disposing as follows:WHEREFORE, premises considered, we grant this instant appeal. The Order dated 23November 2003 is hereby reversed and set aside. The Labor Arbiter is directed to issue aWrit of Execution for the satisfaction of the judgment award in favor of Third-Partycomplainants.SO ORDERED.[8]UP moved to reconsider the NLRC resolution. On December 28, 2004, the NLRCupheld its resolution but with modification that the satisfaction of the judgment award infavor of Lockheed will be only against the funds of UP which are not identified as publicfunds.The NLRC order and resolution having become final, Lockheed filed a motion for theissuance of an alias writ of execution. The same was granted on May 23, 2005.[9]On July 25, 2005, a Notice of Garnishment[10] was issued to Philippine National Bank(PNB) UP Diliman Branch for the satisfaction of the award of P12,142,522.69 (inclusiveof execution fee).In a letter[11] dated August 9, 2005, PNB informed UP that it has received an order ofrelease dated August 8, 2005 issued by the Labor Arbiter directing PNB UP DilimanBranch to release to the NLRC Cashier, through the assigned NLRC Sheriff Max L.Lago, the judgment award/amount of P12,142,522.69. PNB likewise reminded UP thatthe bank only has 10 working days from receipt of the order to deliver the garnishedfunds and unless it receives a notice from UP or the NLRC before the expiry of the 10-day period regarding the issuance of a court order or writ of injunction discharging orenjoining the implementation and execution of the Notice of Garnishment and Writ ofExecution, the bank shall be constrained to cause the release of the garnished funds infavor of the NLRC.On August 16, 2005, UP filed an Urgent Motion to Quash Garnishment.[12] UP contendedthat the funds being subjected to garnishment at PNB are government/public funds. Ascertified by the University Accountant, the subject funds are covered by Savings AccountNo. 275-529999-8, under the name of UP System Trust Receipts, earmarked for Student
  20. 20. Guaranty Deposit, Scholarship Fund, Student Fund, Publications, Research Grants, andMiscellaneous Trust Account. UP argued that as public funds, the subject PNB accountcannot be disbursed except pursuant to an appropriation required by law. The LaborArbiter, however, dismissed the urgent motion for lack of merit on August 30, 2005.[13]On September 2, 2005, the amount of P12,062,398.71 was withdrawn by the sheriff fromUP’s PNB account.[14]On September 12, 2005, UP filed a petition for certiorari before the CA based on thefollowing grounds: I.The concept of “solidary liability” by an indirect employer notwithstanding, respondentNLRC gravely abused its discretion in a manner amounting to lack or excess ofjurisdiction by misusing such concept to justify the garnishment by the executing Sheriffof public/government funds belonging to UP. II.Respondents NLRC and Arbiter LORA acted without jurisdiction or gravely abused theirdiscretion in a manner amounting to lack or excess of jurisdiction when, by means of anAlias Writ of Execution against petitioner UP, they authorized respondent Sheriff togarnish UP’s public funds. Similarly, respondent LORA gravely abused her discretionwhen she resolved petitioner’s Motion to Quash Notice of Garnishment addressed to, andintended for, the NLRC, and when she unilaterally and arbitrarily disregarded an officialCertification that the funds garnished are public/government funds, and thereby allowedrespondent Sheriff to withdraw the same from PNB. III.Respondents gravely abused their discretion in a manner amounting to lack or excess ofjurisdiction when they, despite prior knowledge, effected the execution that causedparalyzation and dislocation to petitioner’s governmental functions.[15]On March 12, 2008, the CA rendered a decision[16] dismissing UP’s petition forcertiorari. Citing Republic v. COCOFED,[17] which defines public funds as moneysbelonging to the State or to any political subdivisions of the State, more specificallytaxes, customs, duties and moneys raised by operation of law for the support of thegovernment or the discharge of its obligations, the appellate court ruled that the fundssought to be garnished do not seem to fall within the stated definition.On reconsideration, however, the CA issued the assailed Amended Decision. It held thatwithout departing from its findings that the funds covered in the savings account soughtto be garnished do not fall within the classification of public funds, it reconsiders thedismissal of the petition in light of the ruling in the case of National ElectrificationAdministration v. Morales[18] which mandates that all money claims against the
  21. 21. government must first be filed with the Commission on Audit (COA).Lockheed moved to reconsider the amended decision but the same was denied in theassailed CA Resolution dated December 23, 2008. The CA cited Manila InternationalAirport Authority v. Court of Appeals[19] which held that UP ranks with MIAA, agovernment instrumentality exercising corporate powers but not organized as a stock ornon-stock corporation. While said corporations are government instrumentalities, they areloosely called government corporate entities but not government-owned and controlledcorporations in the strict sense.Hence this petition by Lockheed raising the following arguments: 1. RESPONDENT UP IS A GOVERNMENT ENTITY WITH A SEPARATE AND DISTINCT PERSONALITY FROM THE NATIONAL GOVERNMENT AND HAS ITS OWN CHARTER GRANTING IT THE RIGHT TO SUE AND BE SUED. IT THEREFORE CANNOT AVAIL OF THE IMMUNITY FROM SUIT OF THE GOVERNMENT. NOT HAVING IMMUNITY FROM SUIT, RESPONDENT UP CAN BE HELD LIABLE AND EXECUTION CAN THUS ENSUE. 2. MOREOVER, IF THE COURT LENDS IT ASSENT TO THE INVOCATION OF THE DOCTRINE OF STATE IMMUNITY, THIS WILL RESULT [IN] GRAVE INJUSTICE. 3. FURTHERMORE, THE PROTESTATIONS OF THE RESPONDENT ARE TOO LATE IN THE DAY, AS THE EXECUTION PROCEEDINGS HAVE ALREADY BEEN TERMINATED.[20]Lockheed contends that UP has its own separate and distinct juridical entity from thenational government and has its own charter. Thus, it can be sued and be held liable.Moreover, Executive Order No. 714 entitled “Fiscal Control and Management of theFunds of UP” recognizes that “as an institution of higher learning, UP has always grantedfull management and control of its affairs including its financial affairs.”[21] Therefore, itcannot shield itself from its private contractual liabilities by simply invoking the publiccharacter of its funds. Lockheed also cites several cases wherein it was ruled that fundsof public corporations which can sue and be sued were not exempt from garnishment.Lockheed likewise argues that the rulings in the NEA and MIAA cases are inapplicable. Itcontends that UP is not similarly situated with NEA because the jurisdiction of COA overthe accounts of UP is only on a post-audit basis. As to the MIAA case, the liability ofMIAA pertains to the real estate taxes imposed by the City of Paranaque while theobligation of UP in this case involves a private contractual obligation. Lockheed alsoargues that the declaration in MIAA specifically citing UP was mere obiter dictum.Lockheed moreover submits that UP cannot invoke state immunity to justify andperpetrate an injustice. UP itself admitted its liability and thus it should not be allowed torenege on its contractual obligations. Lockheed contends that this might create a ruinous
  22. 22. precedent that would likely affect the relationship between the public and private sectors.Lastly, Lockheed contends that UP cannot anymore seek the quashal of the writ ofexecution and notice of garnishment as they are already fait accompli.For its part, UP contends that it did not invoke the doctrine of state immunity from suit inthe proceedings a quo and in fact, it did not object to being sued before the labordepartment. It maintains, however, that suability does not necessarily mean liability. UPargues that the CA correctly applied the NEA ruling when it held that all money claimsmust be filed with the COA.As to alleged injustice that may result for invocation of state immunity from suit, UPreiterates that it consented to be sued and even participated in the proceedings below.Lockheed cannot now claim that invocation of state immunity, which UP did not invokein the first place, can result in injustice.On the fait accompli argument, UP argues that Lockheed cannot wash its hands fromliability for the consummated garnishment and execution of UP’s trust fund in theamount of P12,062,398.71. UP cites that damage was done to UP and the beneficiariesof the fund when said funds, which were earmarked for specific educational purposes,were misapplied, for instance, to answer for the execution fee of P120,123.98 unilaterallystipulated by the sheriff. Lockheed, being the party which procured the illegalgarnishment, should be held primarily liable. The mere fact that the CA set aside the writof garnishment confirms the liability of Lockheed to reimburse and indemnify inaccordance with law.The petition has no merit.We agree with UP that there was no point for Lockheed in discussing the doctrine of stateimmunity from suit as this was never an issue in this case. Clearly, UP consented to besued when it participated in the proceedings below. What UP questions is the hastygarnishment of its funds in its PNB account.This Court finds that the CA correctly applied the NEA case. Like NEA, UP is a juridicalpersonality separate and distinct from the government and has the capacity to sue and besued. Thus, also like NEA, it cannot evade execution, and its funds may be subject togarnishment or levy. However, before execution may be had, a claim for payment of thejudgment award must first be filed with the COA. Under Commonwealth Act No. 327,[22]as amended by Section 26 of P.D. No. 1445,[23] it is the COA which has primaryjurisdiction to examine, audit and settle “all debts and claims of any sort” due from orowing the Government or any of its subdivisions, agencies and instrumentalities,including government-owned or controlled corporations and their subsidiaries. Withrespect to money claims arising from the implementation of Republic Act No. 6758,[24]their allowance or disallowance is for COA to decide, subject only to the remedy ofappeal by petition for certiorari to this Court.[25]
  23. 23. We cannot subscribe to Lockheed’s argument that NEA is not similarly situated with UPbecause the COA’s jurisdiction over the latter is only on post-audit basis. A reading ofthe pertinent Commonwealth Act provision clearly shows that it does not make anydistinction as to which of the government subdivisions, agencies and instrumentalities,including government-owned or controlled corporations and their subsidiaries whosedebts should be filed before the COA.As to the fait accompli argument of Lockheed, contrary to its claim that there is nothingthat can be done since the funds of UP had already been garnished, since the garnishmentwas erroneously carried out and did not go through the proper procedure (the filing of aclaim with the COA), UP is entitled to reimbursement of the garnished funds plus interestof 6% per annum, to be computed from the time of judicial demand to be reckoned fromthe time UP filed a petition for certiorari before the CA which occurred right after thewithdrawal of the garnished funds from PNB.WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.Petitioner Lockheed Detective and Watchman Agency, Inc. is ordered to REIMBURSErespondent University of the Philippines the amount of P12,062,398.71 plus interest of6% per annum, to be computed from September 12, 2005 up to the finality of thisDecision, and 12% interest on the entire amount from date of finality of this Decisionuntil fully paid.No pronouncement as to costs.SO ORDERED.Leonardo-De Castro, (Acting Chairperson), Peralta,* Bersamin, and Reyes,** JJ., concur.* Designated additional member per Raffle dated April 2, 2012.** Designated additional member per Raffle dated April 16, 2012.[1] Rollo, pp. 47-50. Penned by Associate Justice Arcangelita M. Romilla-Lontok withAssociate Justices Mariano C. Del Castillo (now a member of this Court) and Romeo F.Barza concurring.[2] Id. at 52-53.[3] CA rollo, pp. 23-24.[4] Id. at 22-38.[5] Id. at 37.[6] Id. at 44, citing NLRC records, p. 868.
  24. 24. [7] Id. at 39-56.[8] Id. at 55.[9] Id. at 57-64.[10] Id. at 65.[11] Id. at 74.[12] Id. at 66-73.[13] Id. at 79-81.[14] Id. at 10.[15] Id.[16] Id. at 122-134.[17] G.R. Nos. 147062-64, December 14, 2001, 372 SCRA 462, 481.[18] G.R. No. 154200, June 24, 2007, 528 SCRA 79, 90-91.[19] G.R. No. 155650, July 20, 2006, 495 SCRA 591, 618-619.[20] Rollo, p. 17.[21] Id. at 24-25.[22] AN ACT FIXING THE TIME WITHIN WHICH THE AUDITOR GENERALSHALL RENDER HIS DECISIONS AND PRESCRIBING THE MANNER OFAPPEAL THEREFROM.[23] ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THEPHILIPPINES. Section 26 thereof provides:Section 26. General jurisdiction. – The authority and powers of the Commission shallextend to and comprehend all matters relating to auditing procedures, systems andcontrols, the keeping of the general accounts of the Government, the preservation ofvouchers pertaining thereto for a period of ten years, the examination and inspection ofthe books, records, and papers relating to those accounts; and the audit and settlement ofthe accounts of all persons respecting funds or property received or held by them in anaccountable capacity, as well as the examination, audit, and settlement of all debts andclaims of any sort due from or owing to the Government or any of its subdivisions,agencies and instrumentalities. The said jurisdiction extends to all government-owned or
  25. 25. controlled corporations, including their subsidiaries, and other self-governing boards,commissions, or agencies of the Government, and as herein prescribed, including non-governmental entities subsidized by the government, those funded by donations throughthe government, those required to pay levies or government share, and those for whichthe government has put up a counterpart fund or those partly funded by the government.[24] Compensation and Position Classification Act of 1989.[25] National Electrification Administration v. Morales, supra note 18, at 89-91.

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