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.
DECISION
REYES, J.:
The Case
Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court
assailing the January 9, 2009 Decision[2] and the May 26, 2009 Resolution[3] of the Court
of Appeals (CA) in CA-G.R. SP No. 01755. The dispositive portion of the assailed
Decision 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 one
rendered 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 total
monetary award due to petitioners in accord with this decision. The Labor Arbiter is
ORDERED to submit his compliance within thirty; (30) days from notice of this
decision, with copies furnished to the parties.[4] (citations omitted)
The assailed Resolution denied the petitioners' Motion for Reconsideration.[5]
The Factual Antecedents
Madeline Montecillo (Madeline) and Liza Trinidad (Liza), hereinafter referred to
collectively as the respondents, were first employed as goldsmiths by the petitioner Niña
Jewelry Manufacturing of Metal Arts, Inc. (Niña Jewelry) in 1996 and 1994, respectively.
Madeline's weekly rate was P1,500.00 while Liza's was P2,500.00. Petitioner Elisea
Abella (Elisea) is Niña Jewelry's president and general manager.
There were incidents of theft involving goldsmiths in Niña Jewelry's employ.

2. On August 13, 2004, Niña Jewelry imposed a policy for goldsmiths requiring them to
post cash bonds or deposits in varying amounts but in no case exceeding 15% of the
latter's salaries per week. The deposits were intended to answer for any loss or damage
which Niña Jewelry may sustain by reason of the goldsmiths' fault or negligence in
handling the gold entrusted to them. The deposits shall be returned upon completion of
the goldsmiths'' work and after an accounting of the gold received.
Niña Jewelry alleged that the goldsmiths were given the option not to post deposits, but
to sign uthorizations allowing the former to deduct fronm the latter's salaries amounts not
exceeding 15% of their take home pay should it be found that they lost the gold entrusted
to them. The respondents claimed otherwise insisting that Niña Jewelry left the
goldsmiths with no option but to post the deposits. The respondents alleged that they
were constructively dismissed by Niña Jewelry as their continued employments were
made dependent on their readiness to post the required deposits.
NIña Jewelry averred that on August 14, 2004, the respondents no longer reported for
work and signinfied their defiance against the new policy which at that point had not
even been implemented yet.
On September 7, 2004, the respondents filed against Niña Jewelry complaints [6] for
illegal dismissal and for the award of separation pay.
On September 20, 2004, the respondents filed their amended complaints[7]' which
excluded their earlier prayer for separation pay but sought reinstatement and payment of
backwages, attorney's fees and 13th month pay.
Labor Arbiter Jose! Gutierrez (LA Gutierrez) dismissed the respondents' complaints for
lack 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 year
2004. LA Gutierrez ratiocinated that:
Their [respondents] claim is self-serving. As evidence to (sic) their claims that they were
made to sign blank trust receipts, complainants presented Annexes 'A'[,] 'C' and 'C'. Our
examination, however, shows that they are not blank trust receipts but rather they are
filled up trust receipts.
The undisputed facts show that complainants were piece workers of the respondent who
are engaged in the processing of gold into various jewelry pieces. Because of the nature
of its business, respondent was plagued with too many incidents of theft from its piece
workers, x x x This deposit [not exceeding 15% of the salary for the week of the piece
worker] is released back upon completion of work and after accounting of the gold
received by him or her. There is an alternative, however, the piece worker may opt not to
give a deposit, instead sign an authorization to allow the respondent to deduct from the
salary an amount not to exceed 15% of his take home pay, should it be found out that he
lost the gold [entrusted] to him or her due to his or her fault or negligence. The
complainants did not like to post a deposit, or sign an authorization. They instead told

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 their
tasks. ,The fact of complainants not being dismissed from employment was duly attested
to by his co-workers who executed their Joint Affidavit under oath, Annex '4'.
As further evidence to prove that they were dismissed, complainants presented the
minutes of [the] Sept. 7, 2004 conference.
We examined the statements therein, we find that there is no admission on the part of the
respondents that they terminate[d] the complainants from employment. Respondents only
inform[ed] the complainants to put up the appropriate cash bond before they could be
allowed to return back to work which they previously refused to perform, as a sign of
their protest to the requirement to post cash bond or to sign an authorization.
xxxx
x x x It is clearly shown that complainants were paid with their 13Ll1 month pay for the
year 200 f 2002 and 2003. However, for the year 2004, considering that complainants
have worked until the month of August, we rule to grant them the proportionate 13th
month pay as there is no showing that they were already paid.,The other money claims
are denied for lack of merit, xxx.[8]
The respondents filed an appeal before the NLRC which affirmed LA Gutierrez's
dismissal of the amended complaints but deleted the award of 13n month pay based on
findings that the former had contracted unpaid individual loans from Niña Jewelry. The
NLRC found that:
xxx [I]t was complainants who refused to work with the respondents when they were
required to post cash bond or sign an authorization for deduction for the gold material
they received and to be manufactured into various jewelries, xxx We find it logically
sound for the latter [Niña Jewelry] to innovate certain policy or rule to protect its own
business. To deprive them of such prerogative [management prerogative] will be likened
to 'killing the goose that lays the golden eggs."
xxx [C]omplainants failed to prove their affirmative allegations in the respective
complaints that they were indeed dismissed. On the contrary, respondents have
convincingly shown that if (sic) were complainants who voluntarily abandoned from
(sic) their work by refusing to abide with the newly adopted company policy of putting
up a cash bond or signing an authorization for deduction for the gold materials entrusted
to them in case of loss or pilferage.
xxx [B]oth complainants are still indebted with (sic) the respondents in the amounts of
P5,118.63 in the case of Madeline Montecillo and P7,963.11 in the case of Liza
Montecillo. Such being the case[,] Madeline Montecilo has still on account payable of
P1,368.63 while Liza Montecillo is still indebted of P1,713.71. This principle of
offsetting of credit should be allowed to preclude unjust enrichment at the expense of the
respondents. [9]

4. The respondents filed a Petition for Certiorari[10] before the CA ascribing patent errors in
the appreciation of facts and application of jurisprudence on the part of the NLRC when
it ruled that what occurred was not a case of illegal dismissal but of abandonment of
work.
On January 9, 2009, the CA rendered the now assailed Decision[11]reversing the findings
of 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 their
employees. If the employee fails to make the required deposit, he will not be given gold
to work on. Further, [the] private respondents admitted during the conciliation
proceedings before Executive Labor Arbiter Violeta Ortiz-Bantug that [the] petitioners
would 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 the
deduction is to recompense the employer for the amount paid by him as premium on the
insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has
been recognized by the employer or authorized in writing by the individual worker
concerned; and
(c) In cases where the employer is authorized by law or regulations isued by Secretary of
Labor.
Article 114. Deposits for loss or damage. - No employer shall require his work to make
deposits from which deductions shall be made for the reimbursement of loss of or
damage to tools, materials, or equipment supplied by the employer, except when the
employer is engaged in such trades, occupations or business where the practice of making
deposits is a recognized one, or is necessary of desirable as determined by the Secretary
of Labor in appropriate rules and regulations.
Applying these provisions to the case at bar, before [the] petitioners may be required to
deposit cash or agree to a salary deduction proportionate to the value of gold delivered to
them, 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 impose
such 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 Jewelry
obviuosly failed in this respect. Surely, mere invocation of management prerogative
cannot excempt it from compliance with the strict requirements of law. Accordingly,

5. [w]e hold that Niña Jewelry's unilateral imposition of cash deposits or salary deduction
on [the] petitioners is illegal. For that matter, when Ni[ñ]a Jewelry refused to give
assignment to [the] petitioner or to admit them back to work because they failed to give
cash deposit or agree to a salary deduction, it was deemed to have constructively
dismissed [the] petitioners. Obviously, such deposit or salary deduction was imposed as
a condition for [the] petitioners' continuing employment. Non-compliance indubitably
meant termination of [the] petitioners' employment. Suldao vs. Cimech System
Construction, Inc. [12] enunciated:
Constructive dismissal or a constructive discharge has been defined as quitting because
continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank and a diminution in pay. There is constructive dismissal
when the continued employment is rendered impossible so as to foreclose any choice on
the employee's part except to resign from such employment.
The fact that [the] petitioners lost no time in filing the complaint for illegal dismissal
lucidly 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 of
a case for illegal dismissal, on one hand, is anathema to the concept of abandonment, on
the other.
Finally, under Article 279 of the Labor Code, an illegally dismissed employee is entitled
to reinstatement without loss of seniority rights and other privileges; full backwages,
inclusive of allowances; and other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual
reinstatement. [14] x x x.
As for damages, it is a rule that moral damages may be recovered where the dismissal of
the 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]e
find that private respondents did not act with oppression, bad faith or fraud. They
imposed a cash bond or deposit on here in petitioners in the honest belief that it was the
best way to protect their interest against gold theft in the company, x x x. [15] (some
citations omitted)
The Issues
The following are to be solved in the instant Petition for Review:[16]
I.
WHETHER OR NOT THE COURT OF APPEALS GROSSLY ERRED IN GIVING
DUE COURSE TO THE PETITION [under Rule 65 of the Rules of Court], IN EFFECT,
FINDING GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR EXCESS
OF JURISDICTION ON THE PART OF THE NLRC, DESPITE THE FACT THAT
THE SUBJECT DECISION AND RESOLUTION THEREIN ARE IN PERFECT
ACCORD WITH THE EVIDENCE ON RECORD AND APPLICABLE LAWS.

6. II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING
THAT THERE WAS CONSTRUCTIVE DISMISSAL IN THE PRESENT CASE AND
ORDERING RESPONDENTS' REINSTATEMENT AS WELL AS THE PAYMENT
OF THEIR BACKWAGES AND OTHER MONETARY BENEFITS WITHOUT
FACTUAL OR LEGAL BASES. [17]
The petitioners now argue that the CA should have outrightly dismissed the petition filed
before it as the respondents had resorted to an erroneous mode of appeal. The arguments
raised in the petition were the same ones already passed upon by the LA and NLRC.
what the respondents sought was the CA's re-evaluation of the facts and evidence. The
petition was thus based on purported errors of judgement which are beyond the province
of a petition for certiorari.
The petitioners likewise insists that the respondents abandoned their work without due
notice and to the prejudice of the former. The respondents are goldsmiths whose skills
are indispensible to a jewelry manufacturing business, thus, it is not in accord with both
logic 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 for
reinstatement, hence, implying their admission that they were not terminated.
Further, under Articles 114 and 115[19] of the Labor Code, an employer may require a
worker to post a deposit even before a loss or damage has occurred, provided that
deductions from the deposit can be made only upon proof that the worker is liable for the
loss or damage. In case no loss or damage is incurred, the deposit shall be returned to the
worker 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 the
setting of policies relative to working methods, procedures to be followed and working
regulations. [20]
The petitioners stress that they did not transgress the respondents' rights. The
respondents, who expressed to their co-workers their lack of fear to have their lack of fear
to have their employment severed, are motivated by their greed to the extract money from
the petitioners.
The petitioners conclude that the CA should have accorded respect to the findings of the
LA and the NLRC especialy since they were not arrived at arbitarirly or in disregard of
he evidence on record.
In the respondents' Comment, [21] they reiterate the arguments they had presented in the
proceedings below. The respondents emphasize that when they pleaded for reinstatement
during the conference with the petitioners on September 7, 2004, the latter openly
admitted without reservation that the former will only be allowed to return to work if they
will post the required cash bond.

7. Further, the respondents claim that there was no plausible reason for them to abandon
their employment considering the length of their service and the fact that they were being
paid 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 abandon
his job to join the ranks of the unemployed and choose to unduly expose his family to
hunger and untold hardship.
Besides, in Anflo Management & Investment Corp. v. Rodolfo Bolanio, [23] this Court had
the occasion to state that the filing of a complaint for illegal dismissal is inconsistent with
a charge of abandonment, for an employee who takes steps to protest his lay off cannot
by any logic be said to have abandoned his work.
The respondents also claim that the petitioners misrepresented to this Court that the
former did not pray for reinstatement as the dorsal portions of the amended complaints
indicate otherwise.
Moreover, the petitioners failed to prove their authority granted by either the law, or
regulations issued by the Secretary of Labor, allowing them to require their workers to
post deposits. The petitioners also failed to establish that Niña Jewelry is engaged in a
trade, occupation or business where the practice of making deposits is a recognized one
or 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 Rules
Implementing the Labor Code (Omnibus Rules), the respondents posit that salary
deductions made prior to the occurrence of loss or damage are illegal and constitute as
undue interferences in the workers' disposal of their wages. Further, the workers must
first be given the opportunity to show cause why deductions should not be made. If to be
made, deductions should be fair, reasonable and should not exceed the actual loss or
damage. In the case at bar the respondents were required to post cash bonds even when
there is no proof yet of their fault or negligence.
In the petitioners' Reply,[27] they averred that the day after Niña Jewelry required from its
employees the posting of deposits and even before the policy was actually implemented,
the respondents promptly stopped reporting for work despite Elisek's attempt to get in
touch with them. The petitioners convened the employees to discuss the propriety of
imposing the new policy and to afford them ample opportunity to air their concerns. The
respondents' acts contravene Article 19 of the New Civil Code (NCC) which requires
every person to act with justice, give everyone his due and observe honesty and good
faith.
Further, it is clear in the Minutes of the Conciliation Proceedings[28] before the LA that
the respondents were not willing to be reinstated and preferred instead the payment of
separation pay. Hence, no prayer for reinstatement was indicated in the original
complaints filed by them. As an afterthought, however, they amended their complaints to
reflect that they were likewise seeking for reinstatement.

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 employer
presented mere cash vouchers to prove abandonment by the employee. In the case before
us, sufficient evidence show that the respondents abandoned their work. In Anflo
Management, the employer expressly uttered words terminating the employee who in
turn filed a complaint the day right after the incident. In the case now under our
consideration, the respondents merely made a bare claim of illegal dismissal.
Rightly so in Abad v. Roselle Cinema,[31] it was ruled that an employer's claim of not
having Terminated an employee, when supported by substantial evidence, should not be
outrightly overcome by the argument that an employee would not have filed a complaint
for illegal dismissal if he were not really dismissed. The circumstances surrounding the
separation from employment should be taken into account.
Under Article 114 of the Labor Code, the Secretary of Labor is conferred the authority to
promulgate rules determining the circumstances when the making of deposits is deemed
recognized, necessary or desirable. However, Section 14,[32] Book III, Rule VIII of the
Omnibus Rules does not define those circumstances. What is defined is the circumstances
when deductions can be made. It can thus be inferred that the intention is for the courts to
determine on a case to case basis what should be considered as recognized, necessary or
desirable especially in the light of the existence of myriads of businesses which are
practically impossible to enumerate in modern society. The petitioners hence argue that
the validity of requiring cash deposits should be scrutinized with due consideration of its
reasonableness and necessity. Further, Article 1306 of the NCC allows contracting
parties to establish stipulations, clauses, terms and conditions which they may deem
convenient provided they do not contravene the law, morals, good customs, public order
or public policy. In the case at bar, the policy adopted by the petitioners was neither
unreasonable nor oppressive. It was intended to benefit all the contracting parties.
Lastly, while the respondents raise the issue of the illegality of deductions, the
petitioners stress that it is academic because no deduction was actually made yet.
The Court's Ruling
The instant petition is partially meritorious.
The petitioners raise the procedural issue of whether or not the CA validly gave due
course to the petition for certiorari filed before it under Rule 65 of the Rules of Court. As
the substantive issue of whether or not the petitioners constructively dismissed the
respondents is closely-intertwined with the procedural question raised, they will be
resolved jointly.
Yolanda Mercado, et al. v. AMA Computer College-Paranaque City, Inc.33 is instructive
as to the nature of a petition for review on certiorari under Rule 45, and a petition for
certiorari under Rule 65, viz:

9. xxx [R]ule 45 limits us to the review of questions of law raised against the assailed CA
decision, In ruling for legal correctness, we have to view the CA decision in the same
context that the petition for certiorari it ruled upon was presented to it; we have to
examine the CA decision from the prism of whether it correctly determined the
presence or absence of grave abuse of discretion in the NLRC decision before it, not
on the basis of whether the NLRC decision on the merits of the case was correct. In
other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it. This is the approach that
should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the
question to ask is: Did the CA correctly determine whether the NLRC committed
grave abuse of discretion in ruling on the case?[34]
It is thus settled that this Court is bound by the CA's factual findings. The rule, however,
admits of exceptions, among which is when the CA's findings are contrary to those of the
trial court or administrative body exercising quasi-judicial functions from which the
action 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 the
issues raised in the petition lodged before the CA essentially sought a re-evaluation of
facts and evidence, hence, based on purported errors of judgment which are outside the
ambit 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 court
does not assess and weigh the sufficiency of evidence upon which the Labor Arbiter and
the NLRC based their conclusion. The query in this proceeding is limited to the
determination of whether or not .the NLRC acted without or in excess of its jurisdiction
or 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 if
the 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 respondents
before the CA, the following issues were presented for resolution:
I.
WHETHER OR NOT PUBLIC RESPONDENT [NLRC] committed patent errors in the
appreciation of facts and application of pertinent jurisprudence amounting to grave abuse
of discretion or lack or in excess of jurisdiction WHEN IT HELD THAT PRIVATE
RESPONDENTS [herein petitioners] ARE NOT GUILTY OF ILLEGAL DISMISSAL
BECAUSE IT WAS THE PETITIONERS [herein private respondents] WHO
ABANDONED THEIR JOB AND REFUSED TO WORK WITH RESPONDENTS

10. WHEN THEY WERE REQUIRED TO PUT UP CASH BOND OR SIGN AN
AUTHORIZATION FOR DEDUCTION.
II.
WHETHER OR NOT PUBLIC RESPONDENT committed patent errors in the
appreciation of facts and application of pertinent jurisprudence amounting to grave abuse
of discretion or lack or in excess of jurisdiction WHEN IT DID NOT ORDER THE
REINSTATEMENT OF HEREIN PETITIONERS AND DELETED THE AWARD OF
13th MONTH PAY AND DENIED THE CLAIMS OF ATTORNEY'S FEES,
DAMAGES AND FULL BACKWAGES. [38]
Essentially, the issues raised by the respondents for resolution by the CA were anchored
on an alleged misappreciation of facts and evidence by the NLRC and the LA when they
both ruled that abandonment of work and not constructive dismissal occurred.
We agree with the petitioners that what the respondents sought was a re-evaluation of
evidence, which, as a general rule cannot be properly done in a petition for certiorari
under Rule 65, save in cases where substantial evidence to support the NLRC's findings
are wanting.
In Honorable Ombudsman Simeon Marcelo v. Leopoldo Bungubung,[39 ]the Court defined
substantial evidence and laid down guidelines relative to of decisions rendered by
administrative agencies in the exercise of their quasi-judicial power, viz:
xxx Substantial evidence is more than a mere scintilla of evidence. It means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion, even if
other minds equally reasonable might conceivably opine otherwise. Second, in reviewing
administrative decisions of the executive branch of the government, the findings of facts
made 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 the
credibility of witnesses, or otherwise substitute its judgment for that of the administrative
agency with respect to the sufficiency of evidence. Third, administrative decisions in
matters within the executive jurisdiction can only be set aside on proof of gross abuse of
discretion, fraud, or error of law. These principles negate the power of the reviewing
court to re-examine the sufficiency of the evidence in an administrative case as if
originally instituted therein, and do not authorize the court to receive additional evidence
that 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 not
dismissed are supported by substantial evidence.
In the Joint Affidavit[41] executed by Generoso Fortunaba, Erdie Pilares and Crisanto
Ignacio, all goldsmiths under Niña Jewelry's employ, they expressly stated that they have
personal knowledge of the fact that the respondents were not terminated from
employment. Crisanto Ignacio likewise expressed that after Elisea returned from the

11. United States in the first week of September of 2004, the latter even called to inquire
from him why the respondents were not reporting for work. We observe that the
respondents had neither ascribed any ill-motive on the part of their fellow goldsmiths nor
offered any explanation as to why the latter made declarations adverse to their cause.
Hence, the statements of the respondents' fellow goldsmiths deserve credence. This is
especially true in the light of the respondents' failure to present any notice of termination
issued by the petitioners. It is settled that there can be dismissal even in the absence of a
termination notice.[42] However, in the case at bench, we find that the acts of the
petitioners towards the respondents do not at all amount to constructive dismissal.
Constructive dismissal 'occurs when there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion
in rank or diminution in pay or both; or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee. [43]
In the case now under our consideration, the petitioners did not whimsically or arbitrarily
impose the policy to post cash bonds or make deductions from the workers' salaries. As
attested to by the respondents' fellow goldsmiths in their Joint Affidavit, the workers
were convened and informed of the reason behind the implementation of the new policy.
Instead of airing their concerns, the respondents just promptly stopped reporting for
work.
Although the propriety of requiring cash bonds seems doubtful for reasons to be
discussed hereunder, we find no grounds to hold that the respondents were dismissed
expressly or even constructively by the petitioners. It was the respondents who merely
stopped reporting for work. While it is conceded that the new policy will impose an
additional burden on the part of the respondents, it was not intended to result in their
demotion. Neither is a diminution in pay intended because as long as the workers observe
due diligence in the performance of their tasks, no loss or damage shall result from their
handling of the gold entrusted to them, hence, all the amounts due to the goldsmiths shall
still be paid in full. Further, the imposition of the new policy cannot be viewed as an act
tantamount to discrimination, insensibility or disdain against the respondents. For one,
the policy was intended to be implemented upon all the goldsmiths in Niña Jewelry's
employ and not solely upon the respondents. Besides, as stressed by the petitioners, the
new 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 to
render their continued employment unreasonable, unlikely or impossible.
On September 7, 2004, or more or less three weeks after the imposition of the new
policy, the respondents filed their complaints for illegal dismissal which include their
prayer for the payment of separation pay. On September 20, 2004, they filed amended
complaints seeking for reinstatement instead.
The CA favored the respondents' argument that the latter could not have abandoned their
work as it can be presumed that they would not have filed complaints for illegal dismissal
had they not been really terminated and had they not intended themselves to be

12. reinstated. We find that the presumption relied upon by the CA pales in comparison to
the substantial evidence offered by the petitioners that it was the respondents who
stopped reporting for work and were not dismissed at all.
In sum, we agree with the petitioners that substantial evidence support the LA's and the
NLRC's findings that no dismissal occurred. Hence, the CA should not have given due
course to and granted the petition for certiorari under Rule 65 filed by the respondents
before it.
In view of our disquisition above that the findings of the LA and the NLRC that no
constructive dismissal occurred are supported by substantial evidence, the CA thus erred
in giving due course to and granting the petition filed before it. Hence, it is not even
necessary anymore to resolve the issue of whether or not the policy of posting cash bonds
or making deductions from the goldsmiths' salaries is proper. However, considering that
there are other goldsmiths in Niña Jewelry's employ upon whom the policy challenged by
the 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 general
rule that no deductions from the employees' salaries can be made. The exception which
finds application in the instant petition is in cases where the employer is authorized by
law or regulations issued by the Secretary of Labor to effect the deductions. On the other
hand, Article 114 states that generally, deposits for loss or damages are not allowed
except in cases where the employer is engaged in such trades, occupations or business
where the practice of making deposits is a recognized one, or is necessary or desirable as
determined by the Secretary of Labor in appropriate rules or regulations.
While employers should generally be given leeways in their exercise of management
prerogatives, we agree with the respondents and the CA that in the case at bar, the
petitioners had failed to prove that their imposition of the new policy upon the goldsmiths
under Niña Jewelry's employ falls under the exceptions specified in Articles 113 and 114
of the Labor Code.
The petitioners point out that Section 14, Book III, Rule VIII of the Omnibus Rules does
not 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 the
courts to determine on a case to case basis what should be regarded as recognized,
necessary or desirable and to test an, employer's policy of requiring deposits on the bases
of 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 the
general prohibition against requiring deposits and effecting deductions from the
employees' salaries. Hence, a statutory construction of the aforecited provisions is not
called for. Even if we were however called upon to interpret the provisions, our

13. inclination would still be to strictly construe the same against the employer because
evidently, the posting of cash bonds and the making of deductions from the wages would
inarguably impose an additional burden upon the employees.
While the petitioners are not absolutely precluded from imposing the new policy, they
can only do so upon compliance with the requirements of the law. In other words, the
petitioners should first establish that the making of deductions from the salaries is
authorized by law, or regulations issued by the Secretary of Labor. Further, the posting of
cash bonds should be proven as a recognized practice in the jewelry manufacturing
business, or alternatively, the petitioners should seek for the determination by the
Secretary of Labor through the issuance of appropriate rules and regulations that the
policy 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 requiring
deposits and effecting deductions are recognized practices, or without securing the
Secretary of Labor's determination of the necessity or desirability of the same, the
imposition of new policies relative to deductions and deposits can be made subject to
abuse 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 reporting
for work are supported by substantial evidence. Hence, the CA erred when it re-evaluated
the parties' respective evidence and granted the petition filed before it. However, we
agree with the CA that it is baseless for Nifia Jewelry to impose its new policy upon the
goldsmiths under its employ without first complying with the strict requirements of the
law.
WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed
Decision 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 were
constructively dismissed and entitled to reinstatement and payment of backwages,
allowances and benefits. However, the CA's ruling that the petitioners' imposition of its
new 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. [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 Crisanto
Ignacio, id. at 161-162.
[19]
Art. 115. Limitations. - No deduction from the deposits of an employee for the actual
amount 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, 218
SCRA 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 otherwise
interfere with the freedom of any employee to dispose of his wages and employer shall
in any manner oblige any of his employees to patronize any store or avail of services

15. offered by any person.
[25]
Sec. 13. Wage deduction. Deductions from the wages of the employees may be made
by the employer in any of the following cases:
(a) When the deductions are authorized by law, including deductions for the insurance
premiums advanced by the employer in behalf of the employee as well as union dues
where the right to check-off has been recognized by the employer or authorized in writing
by the individual employee himself;
(b) When the deductions are with the written authorization of the employees for payment
to a third person and the employer agrees to do so, provided that the latter does not
receive 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 is
recognized, to answer for the reimbursement of loss or damage to tools, materials, 01
equipment supplied by the employer to the employee, the employer may make wage
deductions or require the employees to make deposits from which deductions shall be
made, subject to the following conditions:
(a) That the employee concerned is clearly shown to be responsible for the loss or
damage;
(b) That the employee is given reasonable opportunity to show cause why deduction
should not be made;
(c) That the amount of sucn deductions is fair and reasonable and shall not exceed the
actual loss or damage; and
(d) That the deduction from the wages of the employee's does not exceed 20% of the
employee's 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. Trammed
Manila Corporation, G.R. No. 183329, August 27, 2009, 596 SCRA 334, 343.

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, March
25, 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, 600
SCRA 691.
[43]
Fe La Rosa, et al. v. Ambassador Hotel, G.R. No. 177059, March 13, 2009

17. FIRST DIVISION
[G.R. No. 185918, April 18, 2012]
LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., PETITIONER,
VS. UNIVERSITY OF THE PHILIPPINES, RESPONDENT.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the August 20, 2008 Amended Decision[1] and
December 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 a
contract for security services with respondent University of the Philippines (UP).
In 1998, several security guards assigned to UP filed separate complaints against
Lockheed and UP for payment of underpaid wages, 25% overtime pay, premium pay for
rest days and special holidays, holiday pay, service incentive leave pay, night shift
differentials, 13th month pay, refund of cash bond, refund of deductions for the Mutual
Benefits Aids System (MBAS), unpaid wages from December 16-31, 1998, and
attorney’s fees.
On February 16, 2000, the Labor Arbiter rendered a decision as follows:
WHEREFORE, premises considered, respondents Lockheed Detective and Watchman
Agency, Inc. and UP as job contractor and principal, respectively, are hereby declared to
be solidarily liable to complainants for the following claims of the latter which are found
meritorious.
Underpaid wages/salaries, premium pay for work on rest day and special holiday, holiday
pay, 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 June
1996 and P200.00 from November 1997), refund of deduction for Mutual Benefits Aids
System at the rate of P50.00 a month, and attorney’s fees; in the total amount of
P1,184,763.12 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 P77,983.62
2.TIRSO DOMASIAN 76,262.70
3. JUAN TAPEL 80,546.03
4. DINDO MURING 80,546.03

18. 5. ALEXANDER ALLORDE 80,471.78
6. WILFREDO ESCOBAR 80,160.63
7. FERDINAND 78,595.53
VELASQUEZ
8. ANTHONY GONZALES 76,869.97
9. SAMUEL ESCARIO 80,509.78
10. PEDRO FAILORINA 80,350.87
11. MATEO TANELA 70,590.58
12. JOB SABALAS 59,362.40
13. ANDRES DACANAYAN 77,403.73
14. EDDIE OLIVAR ____77,403.7
3
P1,077,057.38
plus 10% attorney’s fees 107,705.74
GRAND TOTAL AWARD P1,184,763.12
Third party respondent University of the Philippines is hereby declared to be liable to
Third Party Complainant and cross claimant Lockheed Detective and Watchman Agency
for the unpaid legislated salary increases of the latter’s security guards for the years 1996
to 1998, in the total amount of P13,066,794.14, out of which amount the amounts due
complainants here shall be paid.
The other claims are hereby DISMISSED for lack of merit (night shift differential and
13th month pay) or for having been paid in the course of this proceedings (salaries for
December 15-31, 1997 in the amount of P40,140.44).
The claims of Erlindo Collado, Rogelio Banjao and Amor Banjao are hereby
DISMISSED 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 April
12, 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. accordance with the foregoing modifications.
SO ORDERED.[5]
The complaining security guards and UP filed their respective motions for
reconsideration. 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 on
October 26, 2002.[6] A writ of execution was then issued but later quashed by the Labor
Arbiter on November 23, 2003 on motion of UP due to disputes regarding the amount of
the award. Later, however, said order quashing the writ was reversed by the NLRC by
Resolution[7] dated June 8, 2004, disposing as follows:
WHEREFORE, premises considered, we grant this instant appeal. The Order dated 23
November 2003 is hereby reversed and set aside. The Labor Arbiter is directed to issue a
Writ of Execution for the satisfaction of the judgment award in favor of Third-Party
complainants.
SO ORDERED.[8]
UP moved to reconsider the NLRC resolution. On December 28, 2004, the NLRC
upheld its resolution but with modification that the satisfaction of the judgment award in
favor of Lockheed will be only against the funds of UP which are not identified as public
funds.
The NLRC order and resolution having become final, Lockheed filed a motion for the
issuance 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 (inclusive
of execution fee).
In a letter[11] dated August 9, 2005, PNB informed UP that it has received an order of
release dated August 8, 2005 issued by the Labor Arbiter directing PNB UP Diliman
Branch 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 that
the bank only has 10 working days from receipt of the order to deliver the garnished
funds 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 or
enjoining the implementation and execution of the Notice of Garnishment and Writ of
Execution, the bank shall be constrained to cause the release of the garnished funds in
favor of the NLRC.
On August 16, 2005, UP filed an Urgent Motion to Quash Garnishment.[12] UP contended
that the funds being subjected to garnishment at PNB are government/public funds. As
certified by the University Accountant, the subject funds are covered by Savings Account
No. 275-529999-8, under the name of UP System Trust Receipts, earmarked for Student

20. Guaranty Deposit, Scholarship Fund, Student Fund, Publications, Research Grants, and
Miscellaneous Trust Account. UP argued that as public funds, the subject PNB account
cannot be disbursed except pursuant to an appropriation required by law. The Labor
Arbiter, 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 from
UP’s PNB account.[14]
On September 12, 2005, UP filed a petition for certiorari before the CA based on the
following grounds:
I.
The concept of “solidary liability” by an indirect employer notwithstanding, respondent
NLRC gravely abused its discretion in a manner amounting to lack or excess of
jurisdiction by misusing such concept to justify the garnishment by the executing Sheriff
of public/government funds belonging to UP.
II.
Respondents NLRC and Arbiter LORA acted without jurisdiction or gravely abused their
discretion in a manner amounting to lack or excess of jurisdiction when, by means of an
Alias Writ of Execution against petitioner UP, they authorized respondent Sheriff to
garnish UP’s public funds. Similarly, respondent LORA gravely abused her discretion
when she resolved petitioner’s Motion to Quash Notice of Garnishment addressed to, and
intended for, the NLRC, and when she unilaterally and arbitrarily disregarded an official
Certification that the funds garnished are public/government funds, and thereby allowed
respondent Sheriff to withdraw the same from PNB.
III.
Respondents gravely abused their discretion in a manner amounting to lack or excess of
jurisdiction when they, despite prior knowledge, effected the execution that caused
paralyzation and dislocation to petitioner’s governmental functions.[15]
On March 12, 2008, the CA rendered a decision[16] dismissing UP’s petition for
certiorari. Citing Republic v. COCOFED,[17] which defines public funds as moneys
belonging to the State or to any political subdivisions of the State, more specifically
taxes, customs, duties and moneys raised by operation of law for the support of the
government or the discharge of its obligations, the appellate court ruled that the funds
sought to be garnished do not seem to fall within the stated definition.
On reconsideration, however, the CA issued the assailed Amended Decision. It held that
without departing from its findings that the funds covered in the savings account sought
to be garnished do not fall within the classification of public funds, it reconsiders the
dismissal of the petition in light of the ruling in the case of National Electrification
Administration v. Morales[18] which mandates that all money claims against the

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 the
assailed CA Resolution dated December 23, 2008. The CA cited Manila International
Airport Authority v. Court of Appeals[19] which held that UP ranks with MIAA, a
government instrumentality exercising corporate powers but not organized as a stock or
non-stock corporation. While said corporations are government instrumentalities, they are
loosely called government corporate entities but not government-owned and controlled
corporations 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 the
national 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 the
Funds of UP” recognizes that “as an institution of higher learning, UP has always granted
full management and control of its affairs including its financial affairs.”[21] Therefore, it
cannot shield itself from its private contractual liabilities by simply invoking the public
character of its funds. Lockheed also cites several cases wherein it was ruled that funds
of 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. It
contends that UP is not similarly situated with NEA because the jurisdiction of COA over
the accounts of UP is only on a post-audit basis. As to the MIAA case, the liability of
MIAA pertains to the real estate taxes imposed by the City of Paranaque while the
obligation of UP in this case involves a private contractual obligation. Lockheed also
argues that the declaration in MIAA specifically citing UP was mere obiter dictum.
Lockheed moreover submits that UP cannot invoke state immunity to justify and
perpetrate an injustice. UP itself admitted its liability and thus it should not be allowed to
renege on its contractual obligations. Lockheed contends that this might create a ruinous

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 of
execution 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 in
the proceedings a quo and in fact, it did not object to being sued before the labor
department. It maintains, however, that suability does not necessarily mean liability. UP
argues that the CA correctly applied the NEA ruling when it held that all money claims
must be filed with the COA.
As to alleged injustice that may result for invocation of state immunity from suit, UP
reiterates 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 invoke
in the first place, can result in injustice.
On the fait accompli argument, UP argues that Lockheed cannot wash its hands from
liability for the consummated garnishment and execution of UP’s trust fund in the
amount of P12,062,398.71. UP cites that damage was done to UP and the beneficiaries
of 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 unilaterally
stipulated by the sheriff. Lockheed, being the party which procured the illegal
garnishment, should be held primarily liable. The mere fact that the CA set aside the writ
of garnishment confirms the liability of Lockheed to reimburse and indemnify in
accordance with law.
The petition has no merit.
We agree with UP that there was no point for Lockheed in discussing the doctrine of state
immunity from suit as this was never an issue in this case. Clearly, UP consented to be
sued when it participated in the proceedings below. What UP questions is the hasty
garnishment of its funds in its PNB account.
This Court finds that the CA correctly applied the NEA case. Like NEA, UP is a juridical
personality separate and distinct from the government and has the capacity to sue and be
sued. Thus, also like NEA, it cannot evade execution, and its funds may be subject to
garnishment or levy. However, before execution may be had, a claim for payment of the
judgment 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 primary
jurisdiction to examine, audit and settle “all debts and claims of any sort” due from or
owing the Government or any of its subdivisions, agencies and instrumentalities,
including government-owned or controlled corporations and their subsidiaries. With
respect 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 of
appeal by petition for certiorari to this Court.[25]

23. We cannot subscribe to Lockheed’s argument that NEA is not similarly situated with UP
because the COA’s jurisdiction over the latter is only on post-audit basis. A reading of
the pertinent Commonwealth Act provision clearly shows that it does not make any
distinction as to which of the government subdivisions, agencies and instrumentalities,
including government-owned or controlled corporations and their subsidiaries whose
debts should be filed before the COA.
As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing
that can be done since the funds of UP had already been garnished, since the garnishment
was erroneously carried out and did not go through the proper procedure (the filing of a
claim with the COA), UP is entitled to reimbursement of the garnished funds plus interest
of 6% per annum, to be computed from the time of judicial demand to be reckoned from
the time UP filed a petition for certiorari before the CA which occurred right after the
withdrawal 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 REIMBURSE
respondent University of the Philippines the amount of P12,062,398.71 plus interest of
6% per annum, to be computed from September 12, 2005 up to the finality of this
Decision, and 12% interest on the entire amount from date of finality of this Decision
until 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 with
Associate 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. [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 GENERAL
SHALL RENDER HIS DECISIONS AND PRESCRIBING THE MANNER OF
APPEAL THEREFROM.
[23]
ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE
PHILIPPINES. Section 26 thereof provides:
Section 26. General jurisdiction. – The authority and powers of the Commission shall
extend to and comprehend all matters relating to auditing procedures, systems and
controls, the keeping of the general accounts of the Government, the preservation of
vouchers pertaining thereto for a period of ten years, the examination and inspection of
the books, records, and papers relating to those accounts; and the audit and settlement of
the accounts of all persons respecting funds or property received or held by them in an
accountable capacity, as well as the examination, audit, and settlement of all debts and
claims 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. 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 through
the government, those required to pay levies or government share, and those for which
the 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.