G.R. No. L-58610 September 30, 1982BABELO BERINA, MARILOU ELAGDON, ERNESTO ROBERTO and JESUS SORIAO, petitioners, vs.PHILIPPINE MARITIME INSTITUTE, TOMAS CLOMA and JAIME CLOMA, respondents. ABAD SANTOS, J.:Babelo Beriña, Marilou Elagdon, Ernesto Roberto and Jesus Soriao are students of the Philippine Maritime Institute, PMI for short. In their petition which is styled FOR EXTRAORDINARY AND EQUITABLE REMEDY WITH PRELIMINARY INJUNCTION, they claim that PMI, five weeks after school had started, posted sometime in August, 1981, a notice that there would be a 15% increase in tuition fees retroactive to the start of the current semester; that the students met and took positive steps in respect of the problem; that their representatives held dialogues with the school administration; "that, in reaction to these legitimate student activities and without compliance with due process respondents commencing on October 15, 1981 issued expulsion orders against Jesus Soriao, Ernesto Roberto, and Babelo Berina and an indefinite suspension against Marilou Elagdon;" that the penalties were imposed without due process and had the effect of negating the petitioners' right to free speech, peaceful assembly and petition for redress of grievances. The petitioners pray that the expulsion and suspension orders be annulled and that while the case is pending resolution they be restored to their status as students of the PMI,On November 10, 1981, We required PMI and its officers who were included as respondents to comment on the petition. We also issued a temporary restraining order commanding the respondents to refrain from carrying out the expulsion and suspension orders.PMI filed its comment as required where it said that the 15% increase in tuition fee had been authorized by the Ministry of Education and Culture; and denied that the action taken against the petitioners was in response to their activities in connection with the tuition fee increase. The comment also advances the arguments that this Court lacks jurisdiction to entertain the petition because it involves "matters that are well within the competence and jurisdiction of the lower courts to pass upon, as even more serious matters and cases of greater consequences are normally brought before them at the first instance prior to any appeal to the Supreme Court, and there are no valid and impelling excuses to warrant a direct recourse to the Highest Tribunal in the judicial hierarchy."We are not called upon to determine the validity or propriety of the tuition fee increase of 15% five weeks after the classes for the current semester had started. The issue in this case is limited to the question as to whether or not the petitioners were denied by the respondents their constitutional rights to due process, free speech, peaceful assembly and petition to redress of grievances. Treating the petition as having been filed under Rule 65 of the Rules of Court as the petitioners assert, We have no doubt that there is no absence of jurisdiction.Typical of the expulsion orders is that which was issued to petitioner Jesus Soriao on October 15, 1981, which has been marked as Annex A of the petition and which reads as follows:

For conduct unbecoming as a Cadet, you are hereby dropped from the roll of students of the School.That your actuations and behavior as reported and seen leave no other recourse hence this action.That on September 9th, you with another student was (sic) caught inside the STC Building, distributing leaflets, enticing and coercing other students to join the slated demonstration.In the subsequent days, you were caught again by the undersigned campaigning and distributing leaflets, enjoining other students to join the boycott.That all these actions are contrary to MEC regulations and directives that appropriate action had to be taken.For your guidance.

The suspension order which was issued for Marilou Elagdon on October 20, 1981, which has been marked Annex C of the petition reads:

Please be informed that C/miss ELAGDON, Marilou is hereby suspended from her classes for conduct unbecoming of a Cadetee as against the rules and regulation of the School.Let the above-named student see the undersigned and in the meantime she remained suspended until clearance is given by this office.For your guidance.

The comment does not positively assert that in imposing the expulsion and suspension orders there was observance of due process which simply means that the petitioners should have been given an opportunity to defend themselves. It was only after the petitioners had said in their reply that the respondents failed to traverse the denial of due process that the latter invoked the legal presumption "that the ordinary course of business has been followed" (Sec. 5(q), Rule 131, Rules of Court)."It is obvious from the expulsion and suspension orders that the petitioners were denied due process,res ipsa loquitur. For the orders are bereft of the sides of the petitioners. Hence the legal presumption of regularity cannot be availed in the instant case.WHEREFORE, the petition is granted; the expulsion and suspension orders are hereby set aside but without prejudice to the power of the respondents to formally charge the petitioners for violation(s) of reasonable school rules and regulations and after due notice to hear and decide the charge. No special pronouncement as to costs.SO ORDERED.

G.R. No. 127980             December 19, 2007DE LA SALLE UNIVERSITY, INC., EMMANUEL SALES, RONALD HOLMES, JUDE DELA TORRE, AMPARO RIO, CARMELITA QUEBENGCO, AGNES YUHICO and JAMES YAP, petitioners, vs.THE COURT OF APPEALS, HON. WILFREDO D. REYES, in his capacity as Presiding Judge of Branch 36, Regional Trial Court of Manila, THE COMMISSION ON HIGHER EDUCATION, THE DEPARTMENT OF EDUCATION CULTURE AND SPORTS, ALVIN AGUILAR, JAMES PAUL BUNGUBUNG, RICHARD REVERENTE and ROBERTO VALDES, JR., respondents.

D E C I S I O NREYES, R.T., J.:NAGTATAGIS sa kasong ito ang karapatang mag-aral ng apat na estudyante na nasangkot sa away ng dalawang fraternity at ang karapatang akademiko ng isang pamantasan.PRIVATE respondents Alvin Aguilar, James Paul Bungubung, Richard Reverente and Roberto Valdes, Jr. are members of Tau Gamma Phi Fraternity who were expelled by the De La Salle University (DLSU) and College of Saint Benilde (CSB)1 Joint Discipline Board because of their involvement in an offensive action causing injuries to petitioner James Yap and three other student members of Domino Lux Fraternity. This is the backdrop of the controversy before Us pitting private respondents' right to education vis-a-vis the University's right to academic freedom.ASSAILED in this Petition for Certiorari, Prohibition and Mandamus under Rule 65 of the Rules of Court are the following: (1) Resolution of the Court of Appeals (CA) dated July 30, 1996 dismissing DLSU's petition for certiorariagainst respondent Judge and private respondents Aguilar, Bungubung, Reverente, and Valdes, Jr.;2 (2) Resolution of the CA dated October 15, 1996 denying the motion for reconsideration;3 (3) Order dated January 7, 1997 of the Regional Trial Court (RTC), Branch 36 Manila granting private respondent Aguilar's motion to reiterate writ of preliminary injunction;4 and (4) Resolution No. 181-96 dated May 14, 1996 of the Commission on Higher Education (CHED) exonerating private respondent Aguilar and lowering the penalties for the other private respondents from expulsion to exclusion.5

Factual Antecedents

Gleaned from the May 3, 1995 Decision of the DLSU-CSB Joint Discipline Board, two violent incidents on March 29, 1995 involving private respondents occurred:

x x x From the testimonies of the complaining witnesses, it appears that one week prior to March 29, 1995, Mr. James Yap was eating his dinner alone in Manang's Restaurant near La Salle, when he overheard two men bad-mouthing and apparently angry at Domino Lux. He ignored the comments of the two. When he arrived at his boarding house, he mentioned the remarks to his two other brods while watching television. These two brods had earlier finished eating their dinner at Manang's. Then, the three, together with four other persons went back to Manang's and confronted the two who were still in the restaurant. By admission of respondent Bungubung in his testimony, one of the two was a member of the Tau Gamma Phi Fraternity. There was no rumble or physical violence then.After this incident, a meeting was conducted between the two heads of the fraternity through the intercession of the Student Council. The Tau Gamma Phi Fraternity was asking for an apology. "Kailanganng apology" in the words of respondent Aguilar. But no apology was made.Then, 5 members of the Tau Gamma Phi Fraternity went to the tambayan of the Domino Lux Fraternity in the campus. Among them were respondents Bungubung, Reverente and Papio. They were looking for a person whose description matched James Yap. According to them, this person supposedly "nambastos ng brod." As they could not find Mr. Yap, one of them remarked "Paano ba iyan. Pasensiya na lang."Came March 29, 1995 and the following events.Ten minutes before his next class at 6:00 p.m., Mr. James Yap went out of the campus using the Engineering Gate to buy candies across Taft Avenue. As he was about to re-cross Taft Avenue, he heard heavy footsteps at his back. Eight to ten guys were running towards him. He panicked. He did not know what to do. Then, respondent Bungubung punched him in the head with something heavy in his hands – "parangknuckles." Respondents Reverente and Lee were behind Yap, punching him. Respondents Bungubung and Valdes who were in front of him, were also punching him. As he was lying on the street, respondent Aguilar kicked him. People shouted; guards arrived; and the group of attackers left.Mr. Yap could not recognize the other members of the group who attacked him. With respect to respondent Papio, Mr. Yap said "hindi ko nakita ang mukha niya, hindi ko nakita sumuntok siya." What Mr. Yap saw was a long haired guy also running with the group.Two guards escorted Mr. Yap inside the campus. At this point, Mr. Dennis Pascual was at the Engineering Gate. Mr. Pascual accompanied Yap to the university clinic; reported the incident to the Discipline Office; and informed his fraternity brods at their tambayan. According to Mr. Pascual, their head of the Domino Lux Fraternity said: "Walang gagalaw. Uwian na lang."Mr. Ericson Cano, who was supposed to hitch a ride with Dennis Pascual, saw him under the clock in Miguel Building. However, they did not proceed directly for home. With a certain Michael Perez, they went towards the direction of Dagonoy Street because Mr. Pascual was supposed to pick up a book for his friend from another friend who lives somewhere in the area.As they were along Dagonoy Street, and before they could pass the Kolehiyo ng Malate Restaurant, Mr. Cano first saw several guys inside the restaurant. He said not to mind them and just keep on walking. However, the group got out of the restaurant, among them respondents Reverente, Lee and Valdes. Mr. Cano told Mr. Lee: "Ayaw namin ng gulo." But, respondent Lee hit Mr. Cano without provocation. Respondent Reverente kicked Mr. Pascual and respondent Lee also hit Mr. Pascual. Mr. Cano and Mr. Perez managed to run from the mauling and they were chased by respondent Lee and two others.Mr. Pascual was left behind. After respondent Reverente first kicked him, Mr. Pascual was ganged-upon by the rest. He was able to run, but the group was able to catch up with him. His shirt was torn and he was hit at the back of his head with a lead pipe. Respondent Lee who was chasing Cano and Perez, then returned to Mr. Pascual.

Mr. Pascual identified respondents Reverente and Lee, as among those who hit him. Although Mr. Pascual did not see respondent Valdes hit him, he identified respondent Valdez (sic) as also one of the members of the group.In fact, Mr. Cano saw respondent Valdes near Mr. Pascual. He was almost near the corner of Leon Guinto and Estrada; while respondent Pascual who managed to run was stopped at the end of Dagonoy along Leon Guinto. Respondent Valdes shouted: "Mga putang-ina niyo." Respondent Reverente hit Mr. Pascual for the last time. Apparently being satisfied with their handiwork, the group left. The victims, Cano, Perez and Pascual proceeded to a friend's house and waited for almost two hours, or at around 8:00 in the evening before they returned to the campus to have their wounds treated. Apparently, there were three cars roaming the vicinity.6

The mauling incidents were a result of a fraternity war. The victims, namely: petitioner James Yap and Dennis Pascual, Ericson Cano, and Michael Perez, are members of the "Domino Lux Fraternity," while the alleged assailants, private respondents Alvin Aguilar, James Paul Bungubung, Richard Reverente and Roberto Valdes, Jr. are members of "Tau Gamma Phi Fraternity," a rival fraternity.The next day, March 30, 1995, petitioner Yap lodged a complaint7 with the Discipline Board of DLSU charging private respondents with "direct assault." Similar complaints8 were also filed by Dennis Pascual and Ericson Cano against Alvin Lee and private respondents Valdes and Reverente. Thus, cases entitled "De La Salle University and College of St. Benilde v. Alvin Aguilar (AB-BSM/9152105), James Paul Bungubung (AB-PSM/9234403), Robert R. Valdes, Jr. (BS-BS-APM/9235086), Alvin Lee (EDD/9462325), Richard Reverente (AB-MGT/9153837) and Malvin A. Papio (AB-MGT/9251227)" were docketed as Discipline Case No. 9495-3-25121.The Director of the DLSU Discipline Office sent separate notices to private respondents Aguilar, Bungubung and Valdes, Jr. and Reverente informing them of the complaints and requiring them to answer. Private respondents filed their respective answers.9

As it appeared that students from DLSU and CSB10 were involved in the mauling incidents, a joint DLSU-CSB Discipline Board11 was formed to investigate the incidents. Thus, petitioner Board Chairman Emmanuel Sales sent notices of hearing12 to private respondents on April 12, 1995. Said notices uniformly stated as follows:

Please be informed that a joint and expanded Discipline Board had been constituted to hear and deliberate the charge against you for violation of CHED Order No. 4 arising from the written complaints of James Yap, Dennis C. Pascual, and Ericson Y. Cano.You are directed to appear at the hearing of the Board scheduled on April 19, 1995 at 9:00 a.m. at the Bro. Connon Hall for you and your witnesses to give testimony and present evidence in your behalf. You may be assisted by a lawyer when you give your testimony or those of your witnesses.On or before April 18, 1995, you are further directed to provide the Board, through the Discipline Office, with a list of your witnesses as well as the sworn statement of their proposed testimony.Your failure to appear at the scheduled hearing or your failure to submit the list of witnesses and the sworn statement of their proposed testimony will be considered a waiver on your part to present evidence and as an admission of the principal act complained of.For your strict compliance.13

During the proceedings before the Board on April 19 and 28, 1995, private respondents interposed the common defense of alibi, summarized by the DLSU-CSB Joint Discipline Board as follows:

First, in the case of respondent Bungubung, March 29, 1995 was one of the few instances when he was picked-up by a driver, a certain Romeo S. Carillo. Most of the time, respondent Bungubung goes home alone sans driver. But on this particular date, respondent Bungubung said that his dad asked his permission to use the car and thus, his dad instructed this driver Carillo to pick-up his son. Mr. Carillo is not a family driver, but works from 8:00 a.m. to 5:00 p.m. for the Philippine Ports Authority where the elder Bungubung is also employed.Thus, attempting to corroborate the alibi of respondent Bungubung, Mr. Carillo said that he arrived at La Salle at 4:56 p.m.; picked-up respondent at 5:02 p.m.; took the Roxas Blvd. route towards

respondent's house in BF Parañaque (on a Wednesday in Baclaran); and arrived at the house at 6:15 p.m. Respondent Bungubung was dropped-off in his house, and taking the same route back, Mr. Carillo arrived at the South Harbor at 6:55 p.m. the Philippine Ports Authority is located at the South Harbor.14

x x x xSecondly, respondent Valdes said that he was with his friends at McDonald's Taft just before 6:00 p.m. of March 29, 1995. He said that he left McDonald at 5:50 p.m. together to get some medicine at the university clinic for his throat irritation. He said that he was at the clinic at 5:52 p.m. and went back to McDonald, all within a span of 3 or even 4 minutes.Two witnesses, a certain Sharon Sia and the girlfriend of respondent Valdes, a certain Jorgette Aquino, attempted to corroborate Valdez' alibi.15

x x x xThird, respondent Reverente told that (sic) the Board that he was at his home at 5:00 p.m. of March 29, 1995. He said that he was given the responsibility to be the paymaster of the construction workers who were doing some works in the apartment of his parents. Although he had classes in the evening, the workers according to him would wait for him sometimes up to 9:00 p.m. when he arrives from his classes. The workers get paid everyday.Respondent Reverente submitted an affidavit, unsigned by the workers listed there, supposedly attesting to the fact that he paid the workers at the date and time in question.16

x x x xFourth, respondent Aguilar "solemnly sw[ore] that [he] left DLSU at 5:00 p.m. for Camp Crame for a meeting with some of the officers that we were preparing."17

On May 3, 1995, the DLSU-CSB Joint Discipline Board issued a Resolution18 finding private respondents guilty. They were meted the supreme penalty of automatic expulsion,19 pursuant to CHED Order No. 4.20 The dispositive part of the resolution reads:

WHEREFORE, considering all the foregoing, the Board finds respondents ALVIN AGUILAR (AB-BSM/9152105), JAMES PAUL BUNGUBUNG (AB-PSM/9234403), ALVIN LEE (EDD/94623250) and RICHARD V. REVERENTE (AB-MGT/9153837) guilty of having violated CHED Order No. 4 and thereby orders their automatic expulsion.In the case of respondent MALVIN A. PAPIO (AB-MGT/9251227), the Board acquits him of the charge.SO ORDERED.21

Private respondents separately moved for reconsideration22 before the Office of the Senior Vice-President for Internal Operations of DLSU. The motions were all denied in a Letter-Resolution23 dated June 1, 1995.On June 5, 1995, private respondent Aguilar filed with the RTC, Manila, against petitioners a petition for certiorariand injunction under Rule 65 of the Rules of Court with prayer for temporary restraining order (TRO) and/or writ of preliminary injunction. It was docketed as Civil Case No. 95-74122 and assigned to respondent Judge of Branch 36. The petition essentially sought to annul the May 3, 1995 Resolution of the DLSU-CSB Joint Discipline Board and the June 1, 1995 Letter-Resolution of the Office of the Senior Vice-President for Internal Affairs.The following day, June 6, 1995, respondent Judge issued a TRO24 directing DLSU, its subordinates, agents, representatives and/or other persons acting for and in its behalf to refrain and desist from implementing Resolution dated May 3, 1995 and Letter-Resolution dated June 1, 1995 and to immediately desist from barring the enrollment of Aguilar for the second term of school year (SY) 1995.Subsequently, private respondent Aguilar filed an ex parte motion to amend his petition to correct an allegation in paragraph 3.2125 of his original petition. Respondent Judge amended the TRO26 to conform to the correction made in the amended petition.27

On June 7, 1995, the CHED directed DLSU to furnish it with copies of the case records of Discipline Case No. 9495-3-25121,28 in view of the authority granted to it under Section 77(c) of the Manual of Regulations for Private Schools (MRPS).

On the other hand, private respondents Bungubung and Reverente, and later, Valdes, filed petitions-in-intervention29 in Civil Case No. 95-74122. Respondent Judge also issued corresponding temporary restraining orders to compel petitioner DLSU to admit said private respondents.On June 19, 1995, petitioner Sales filed a motion to dismiss30 in behalf of all petitioners, except James Yap. On June 20, 1995, petitioners filed a supplemental motion to dismiss31 the petitions-in-intervention.On September 20, 1995, respondent Judge issued an Order32 denying petitioners' (respondents there) motion to dismiss and its supplement, and granted private respondents' (petitioners there) prayer for a writ of preliminary injunction. The pertinent part of the Order reads:

For this purpose, respondent, its agents, representatives or any and all other persons acting for and in its behalf is/are restrained and enjoined from –

1. Implementing and enforcing the Resolution dated May 3, 1995 ordering the automatic expulsion of petitioner and the petitioners-in-intervention from the De La Salle University and the letter-resolution dated June 1, 1995, affirming the Resolution dated May 3, 1995; and2. Barring the enrolment of petitioner and petitioners-in-intervention in the courses offered at respondent De La Salle University and to immediately allow them to enroll and complete their respective courses/degrees until their graduation thereat in accordance with the standards set by the latter.

WHEREFORE, the ancillary remedy prayed for is granted. Respondent, its agents, representatives, or any and all persons acting for and its behalf are hereby restrained and enjoyed from:

1. Implementing and enforcing the Resolution dated May 3, 1995 ordering the automatic expulsion of petitioner and petitioners-in-intervention and the Letter-Resolution dated June 1, 1995; and2. Barring the enrollment of petitioner and petitioners-in-intervention in the courses offered at respondent (De La Salle University) and to forthwith allow all said petitioner and petitioners-in-intervention to enroll and complete their respective courses/degrees until their graduation thereat.

The Writ of Preliminary Injunction shall take effect upon petitioner and petitioners-in-intervention posting an injunctive bond in the amount of P15,000.00 executed in favor of respondent to the effect that petitioner and petitioners-in-intervention will pay to respondent all damages that the latter may suffer by reason of the injunction if the Court will finally decide that petitioner and petitioners-in-intervention are not entitled thereto.The motion to dismiss and the supplement thereto is denied for lack of merit. Respondents are directed to file their Answer to the Petition not later than fifteen (15) days from receipt thereof.SO ORDERED.33

Despite the said order, private respondent Aguilar was refused enrollment by petitioner DLSU when he attempted to enroll on September 22, 1995 for the second term of SY 1995-1996. Thus, on September 25, 1995, Aguilar filed with respondent Judge an urgent motion to cite petitioners (respondents there) in contempt of court.34 Aguilar also prayed that petitioners be compelled to enroll him at DLSU in accordance with respondent Judge's Order dated September 20, 1995. On September 25, 1995, respondent Judge issued35 a writ of preliminary injunction, the relevant portion of which reads:

IT IS HEREBY ORDERED by the undersigned of the REGIONAL TRIAL COURT OF MANILA that until further orders, you the said DE LA SALLE University as well as your subordinates, agents, representatives, employees and any other person assisting or acting for or on your behalf, to immediately desist from implementing the Resolution dated May 3, 1995 ordering the automatic expulsion of petitioner and the intervenors in DLSU, and the letter-resolution dated June 1, 1995 affirming the said Resolution of May 3, 1995 and to immediately desist from barring the enrolment of petitioner and intervenors in the courses offered at DLSU and to allow them to enroll and complete their degree courses until their graduation from said school.36

On October 16, 1995, petitioner DLSU filed with the CA a petition for certiorari37 (CA-G.R. SP No. 38719) with prayer for a TRO and/or writ of preliminary injunction to enjoin the enforcement of respondent Judge's September 20, 1995 Order and writ of preliminary injunction dated September 25, 1995.On April 12, 1996, the CA granted petitioners' prayer for preliminary injunction.On May 14, 1996, the CHED issued its questioned Resolution No. 181-96, summarily disapproving the penalty of expulsion for all private respondents. As for Aguilar, he was to be reinstated, while other private respondents were to be excluded.38 The Resolution states:

RESOLUTION 181-96RESOLVED THAT THE REQUEST OF THE DE LA SALLE UNIVERSITY (DLSU), TAFT AVENUE, MANILA FOR THE APPROVAL OF THE PENALTY OF EXPULSION IMPOSED ON MR. ALVIN AGUILAR, JAMES PAUL BUNGUBUNG, ROBERT R. VALDES, JR., ALVIN LEE AND RICHARD V. REVERENTE BE, AS IT IS HEREBY IS, DISAPPROVED.RESOLVED FURTHER, THAT THE COMMISSION DIRECT THE DLSU TO IMMEDIATELY EFFECT THE REINSTATEMENT OF MR. AGUILAR AND THE LOWERING OF THE PENALTY OF MR. JAMES PAUL BUNGUBUNG, MR. ROBER R. VALDEZ, JR., (sic) MR. ALVIN LEE AND MR. RICHARD V. REVERENTE FROM EXPULSION TO EXCLUSION.39

Despite the directive of CHED, petitioner DLSU again prevented private respondent Aguilar from enrolling and/or attending his classes, prompting his lawyer to write several demand letters40 to petitioner DLSU. In view of the refusal of petitioner DLSU to enroll private respondent Aguilar, CHED wrote a letter dated June 26, 1996 addressed to petitioner Quebengco requesting that private respondent Aguilar be allowed to continue attending his classes pending the resolution of its motion for reconsideration of Resolution No. 181-96. However, petitioner Quebengco refused to do so, prompting CHED to promulgate an Order dated September 23, 1996 which states:

Acting on the above-mentioned request of Mr. Aguilar through counsel enjoining De La Salle University (DLSU) to comply with CHED Resolution 181-96 (Re: Expulsion Case of Alvin Aguilar, et al. v. DLSU) directing DLSU to reinstate Mr. Aguilar and finding the urgent request as meritorious, there being no other plain and speedy remedy available, considering the set deadline for enrollment this current TRIMESTER, and in order to prevent further prejudice to his rights as a student of the institution, DLSU, through the proper school authorities, is hereby directed to allow Mr. Alvin Aguilar to provisionally enroll, pending the Commission's Resolution of the instant Motion for Reconsideration filed by DLSU.SO ORDERED.41

Notwithstanding the said directive, petitioner DLSU, through petitioner Quebengco, still refused to allow private respondent Aguilar to enroll. Thus, private respondent Aguilar's counsel wrote another demand letter to petitioner DLSU.42

Meanwhile, on June 3, 1996, private respondent Aguilar, using CHED Resolution No. 181-96, filed a motion to dismiss43 in the CA, arguing that CHED Resolution No. 181-96 rendered the CA case moot and academic.On July 30, 1996, the CA issued its questioned resolution granting the motion to dismiss of private respondent Aguilar, disposing thus:

THE FOREGOING CONSIDERED, dismissal of herein petition is hereby directed.SO ORDERED.44

On October 15, 1996, the CA issued its resolution denying petitioners' motion for reconsideration, as follows:It is obvious to Us that CHED Resolution No. 181-96 is immediately executory in character, the pendency of a Motion for Reconsideration notwithstanding.After considering the Opposition and for lack of merit, the Motion for Reconsideration is hereby denied.SO ORDERED.45

On October 28, 1996, petitioners requested transfer of case records to the Department of Education, Culture and Sports (DECS) from the CHED.46 Petitioners claimed that it is the DECS, not CHED, which has jurisdiction over expulsion cases, thus, necessitating the transfer of the case records of Discipline Case No. 9495-3-25121 to the DECS.

On November 4, 1996, in view of the dismissal of the petition for certiorari in CA-G.R. SP No. 38719 and the automatic lifting of the writ of preliminary injunction, private respondent Aguilar filed an urgent motion to reiterate writ of preliminary injunction dated September 25, 1995 before respondent RTC Judge of Manila.47

On January 7, 1997, respondent Judge issued its questioned order granting private respondent Aguilar's urgent motion to reiterate preliminary injunction. The pertinent portion of the order reads:

In light of the foregoing, petitioner Aguilar's urgent motion to reiterate writ of preliminary injunction is hereby granted, and respondents' motion to dismiss is denied.The writ of preliminary injunction dated September 25, 1995 is declared to be in force and effect.Let a copy of this Order and the writ be served personally by the Court's sheriff upon the respondents at petitioners' expense.SO ORDERED.48

Accordingly, private respondent Aguilar was allowed to conditionally enroll in petitioner DLSU, subject to the continued effectivity of the writ of preliminary injunction dated September 25, 1995 and to the outcome of Civil Case No. 95-74122.On February 17, 1997, petitioners filed the instant petition.On June 15, 1998, We issued a TRO49 as prayed for by the urgent motion for the issuance of a TRO50 dated June 4, 1998 of petitioners, and enjoined respondent Judge from implementing the writ of preliminary injunction dated September 25, 1995 issued in Civil Case No. 95-74122, effective immediately and until further orders from this Court.On March 27, 2006, private respondent Aguilar filed his manifestation51 stating that he has long completed his course at petitioner DLSU. He finished and passed all his enrolled subjects for the second trimester of 1997-1998, as indicated in his transcript of records52 issued by DLSU. However, despite having completed all the academic requirements for his course, DLSU has not issued a certificate of completion/graduation in his favor.

IssuesWe are tasked to resolve the following issues:

1. Whether it is the DECS or the CHED which has legal authority to review decisions of institutions of higher learning that impose disciplinary action on their students found violating disciplinary rules.2. Whether or not petitioner DLSU is within its rights in expelling private respondents.

2.a Were private respondents accorded due process of law?2.b Can petitioner DLSU invoke its right to academic freedom?2.c Was the guilt of private respondents proven by substantial evidence?

3. Whether or not the penalty imposed by DLSU on private respondents is proportionate to their misdeed.

Our RulingPrefatorily, there is merit in the observation of petitioners53 that while CHED Resolution No. 181-96 disapproved the expulsion of other private respondents, it nonetheless authorized their exclusion from petitioner DLSU. However, because of the dismissal of the CA case, petitioner DLSU is now faced with the spectacle of having two different directives from the CHED and the respondent Judge – CHED ordering the exclusion of private respondents Bungubung, Reverente, and Valdes, Jr., and the Judge ordering petitioner DLSU to allow them to enroll and complete their degree courses until their graduation.This is the reason We opt to decide the whole case on the merits, brushing aside technicalities, in order to settle the substantial issues involved. This Court has the power to take cognizance of the petition at bar due to compelling reasons, and the nature and importance of the issues raised warrant the immediate exercise of Our jurisdiction.54 This is in consonance with our case law now accorded near-religious reverence that rules of procedure are but tools designed to facilitate the attainment of justice, such that when its rigid application tends to frustrate rather than promote substantial justice, this Court has the duty to suspend their operation.55

I. It is the CHED, not DECS, which has thepower of supervision and review over

disciplinary cases decided by institutionsof higher learning.Ang CHED, hindi ang DECS, ang may kapangyarihan ng pagsubaybay at pagrepaso sa mga desisyong pandisiplina ng mga institusyon ng mas mataas na pag-aaral.Petitioners posit that the jurisdiction and duty to review student expulsion cases, even those involving students in secondary and tertiary levels, is vested in the DECS not in the CHED. In support of their stance, petitioners cite Sections 4,56 15(2) & (3),57 54,58 57(3)59 and 7060 of Batas Pambansa (B.P.) Blg. 232, otherwise known as the "Education Act of 1982."According to them, Republic Act (R.A.) No. 7722 did not transfer to the CHED the DECS' power of supervision/review over expulsion cases involving institutions of higher learning. They say that unlike B.P. Blg. 232, R.A. No. 7722 makes no reference to the right and duty of learning institutions to develop moral character and instill discipline among its students. The clear concern of R.A. No. 7722 in the creation of the CHED was academic, i.e., the formulation, recommendation, setting, and development of academic plans, programs and standards for institutions of higher learning. The enumeration of CHED's powers and functions under Section 8 does not include supervisory/review powers in student disciplinary cases. The reference in Section 3 to CHED's "coverage" of institutions of higher education is limited to the powers and functions specified in Section 8. The Bureau of Higher Education, which the CHED has replaced and whose functions and responsibilities it has taken over, never had any authority over student disciplinary cases.We cannot agree.On May 18, 1994, Congress approved R.A. No. 7722, otherwise known as "An Act Creating the Commission on Higher Education, Appropriating Funds Thereof and for other purposes."Section 3 of the said law, which paved the way for the creation of the CHED, provides:

Section 3. Creation of the Commission on Higher Education. – In pursuance of the abovementioned policies, the Commission on Higher Education is hereby created, hereinafter referred to as Commission.The Commission shall be independent and separate from the Department of Education, Culture and Sports (DECS) and attached to the office of the President for administrative purposes only. Its coverage shall be both public and private institutions of higher education as well as degree-granting programs in all post secondary educational institutions, public and private.

The powers and functions of the CHED are enumerated in Section 8 of R.A. No. 7722. They include the following:

Sec. 8. Powers and functions of the Commission. – The Commission shall have the following powers and functions:

x x x xn) promulgate such rules and regulations and exercise such other powers and functions as may be necessary to carry out effectively the purpose and objectives of this Act; ando) perform such other functions as may be necessary for its effective operations and for the continued enhancement of growth or development of higher education.

Clearly, there is no merit in the contention of petitioners that R.A. No. 7722 did not transfer to the CHED the DECS' power of supervision/review over expulsion cases involving institutions of higher learning.First, the foregoing provisions are all-embracing. They make no reservations of powers to the DECS insofar as institutions of higher learning are concerned. They show that the authority and supervision over all public and private institutions of higher education, as well as degree-granting programs in all post-secondary educational institutions, public and private, belong to the CHED, not the DECS.Second, to rule that it is the DECS which has authority to decide disciplinary cases involving students on the tertiary level would render nugatory the coverage of the CHED, which is "both public and private institutions of higher education as well as degree granting programs in all post secondary educational institutions, public and private." That would be absurd.

It is of public knowledge that petitioner DLSU is a private educational institution which offers tertiary degree programs. Hence, it is under the CHED authority.Third, the policy of R.A. No. 772261 is not only the protection, fostering and promotion of the right of all citizens to affordable quality education at all levels and the taking of appropriate steps to ensure that education shall be accessible to all. The law is likewise concerned with ensuring and protecting academic freedom and with promoting its exercise and observance for the continued intellectual growth of students, the advancement of learning and research, the development of responsible and effective leadership, the education of high-level and middle-level professionals, and the enrichment of our historical and cultural heritage.It is thus safe to assume that when Congress passed R.A. No. 7722, its members were aware that disciplinary cases involving students on the tertiary level would continue to arise in the future, which would call for the invocation and exercise of institutions of higher learning of their right to academic freedom.Fourth, petitioner DLSU cited no authority in its bare claim that the Bureau of Higher Education, which CHED replaced, never had authority over student disciplinary cases. In fact, the responsibilities of other government entities having functions similar to those of the CHED were transferred to the CHED.62

Section 77 of the MRPS63 on the process of review in student discipline cases should therefore be read in conjunction with the provisions of R.A. No. 7722.Fifth, Section 18 of R.A. No. 7722 is very clear in stating that "[j]urisdiction over DECS-supervised or chartered state-supported post-secondary degree-granting vocational and tertiary institutions shall be transferred to the Commission [On Higher Education]." This provision does not limit or distinguish that what is being transferred to the CHED is merely the formulation, recommendation, setting and development of academic plans, programs and standards for institutions of higher learning, as what petitioners would have us believe as the only concerns of R.A. No. 7722. Ubi lex non distinguit nec nos distinguere debemus: Where the law does not distinguish, neither should we.To Our mind, this provision, if not an explicit grant of jurisdiction to the CHED, necessarily includes the transfer to the CHED of any jurisdiction which the DECS might have possessed by virtue of B.P. Blg. 232 or any other law or rule for that matter.IIa. Private respondents were accorded due process of law.Ang mga private respondents ay nabigyan ng tamang proseso ng batas.The Due Process Clause in Article III, Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history.64 The constitutional behest that no person shall be deprived of life, liberty or property without due process of law is solemn and inflexible.65

In administrative cases, such as investigations of students found violating school discipline, "[t]here are withal minimum standards which must be met before to satisfy the demands of procedural due process and these are: that (1) the students must be informed in writing of the nature and cause of any accusation against them; (2) they shall have the right to answer the charges against them and with the assistance if counsel, if desired; (3) they shall be informed of the evidence against them; (4) they shall have the right to adduce evidence in their own behalf; and (5) the evidence must be duly considered by the investigating committee or official designated by the school authorities to hear and decide the case."66

Where a party was afforded an opportunity to participate in the proceedings but failed to do so, he cannot complain of deprivation of due process.67 Notice and hearing is the bulwark of administrative due process, the right to which is among the primary rights that must be respected even in administrative proceedings.68 The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek reconsideration of the action or ruling complained of.69So long as the party is given the opportunity to advocate her cause or defend her interest in due course, it cannot be said that there was denial of due process.70

A formal trial-type hearing is not, at all times and in all instances, essential to due process – it is enough that the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based.71 "To be heard" does not only mean

presentation of testimonial evidence in court – one may also be heard through pleadings and where the opportunity to be heard through pleadings is accorded, there is no denial of due process.72

Private respondents were duly informed in writing of the charges against them by the DLSU-CSB Joint Discipline Board through petitioner Sales. They were given the opportunity to answer the charges against them as they, in fact, submitted their respective answers. They were also informed of the evidence presented against them as they attended all the hearings before the Board. Moreover, private respondents were given the right to adduce evidence on their behalf and they did. Lastly, the Discipline Board considered all the pieces of evidence submitted to it by all the parties before rendering its resolution in Discipline Case No. 9495-3-25121.Private respondents cannot claim that they were denied due process when they were not allowed to cross-examine the witnesses against them. This argument was already rejected in Guzman v. National University73 where this Court held that "x x x the imposition of disciplinary sanctions requires observance of procedural due process. And it bears stressing that due process in disciplinary cases involving students does not entail proceedings and hearings similar to those prescribed for actions and proceedings in courts of justice. The proceedings in student discipline cases may be summary; and cross examination is not, x x x an essential part thereof."IIb. Petitioner DLSU, as an institution of higher learning, possesses academic freedom which includes determination of who to admit for study.Ang petitioner DLSU, bilang institusyon ng mas mataas na pag-aaral, ay nagtataglay ng kalayaang akademiko na sakop ang karapatang pumili ng mga mag-aaral dito.Section 5(2), Article XIV of the Constitution guaranties all institutions of higher learning academic freedom. This institutional academic freedom includes the right of the school or college to decide for itself, its aims and objectives, and how best to attain them free from outside coercion or interference save possibly when the overriding public interest calls for some restraint.74 According to present jurisprudence, academic freedom encompasses the independence of an academic institution to determine for itself (1) who may teach, (2) what may be taught, (3) how it shall teach, and (4) who may be admitted to study.75

It cannot be gainsaid that "the school has an interest in teaching the student discipline, a necessary, if not indispensable, value in any field of learning. By instilling discipline, the school teaches discipline. Accordingly, the right to discipline the student likewise finds basis in the freedom "what to teach."76 Indeed, while it is categorically stated under the Education Act of 1982 that students have a right "to freely choose their field of study, subject to existing curricula and to continue their course therein up to graduation,"77 such right is subject to the established academic and disciplinary standards laid down by the academic institution. Petitioner DLSU, therefore, can very well exercise its academic freedom, which includes its free choice of students for admission to its school.IIc. The guilt of private respondents Bungubung, Reverente and Valdes, Jr. was proven by substantial evidence.Ang pagkakasala ng private respondents na sina Bungubung, Reverente at Valdes, Jr. ay napatunayan ng ebidensiyang substansyal.As has been stated earlier, private respondents interposed the common defense of alibi. However, in order that alibi may succeed as a defense, "the accused must establish by clear and convincing evidence (a) his presence at another place at the time of the perpetration of the offense and (b) the physical impossibility of his presence at the scene of the crime."78

On the other hand, the defense of alibi may not be successfully invoked where the identity of the assailant has been established by witnesses.79 Positive identification of accused where categorical and consistent, without any showing of ill motive on the part of the eyewitness testifying, should prevail over the alibi and denial of appellants whose testimonies are not substantiated by clear and convincing evidence.80 Well-settled is the rule that denial and alibi, being weak defenses, cannot overcome the positive testimonies of the offended parties.81

Courts reject alibi when there are credible eyewitnesses to the crime who can positively identify the accused.82Alibi is an inherently weak defense and courts must receive it with caution because one can easily fabricate an alibi.83 Jurisprudence holds that denial, like alibi, is inherently weak and crumbles in light of

positive declarations of truthful witnesses who testified on affirmative matters that accused were at the scene of the crime and were the victim's assailants. As between categorical testimonies that ring of truth on one hand and a bare denial on the other, the former must prevail.84 Alibi is the weakest of all defenses for it is easy to fabricate and difficult to disprove, and it is for this reason that it cannot prevail over the positive identification of accused by the witnesses.85

The required proof in administrative cases, such as in student discipline cases, is neither proof beyond reasonable doubt nor preponderance of evidence but only substantial evidence. According to Ang Tibay v. Court of Industrial Relations,86 it means "such reasonable evidence as a reasonable mind might accept as adequate to support a conclusion."Viewed from the foregoing, We reject the alibi of private respondents Bungubung, Valdes Jr., and Reverente.1awphi1They were unable to show convincingly that they were not at the scene of the crime on March 29, 1995 and that it was impossible for them to have been there. Moreover, their alibi cannot prevail over their positive identification by the victims.We hark back to this Court's pronouncement affirming the expulsion of several students found guilty of hazing:

No one can be so myopic as to doubt that the immediate reinstatement of respondent students who have been investigated and found guilty by the Disciplinary Board to have violated petitioner university's disciplinary rules and standards will certainly undermine the authority of the administration of the school. This we would be most loathe to do.More importantly, it will seriously impair petitioner university's academic freedom which has been enshrined in the 1935, 1973 and the present 1987 Constitution.87

Certainly, private respondents Bungubung, Reverente and Valdes, Jr. do not deserve to claim a venerable institution as their own, for they may foreseeably cast a malevolent influence on the students currently enrolled, as well as those who come after them.88 It must be borne in mind that universities are established, not merely to develop the intellect and skills of the studentry, but to inculcate lofty values, ideals and attitudes; nay, the development, or flowering if you will, of the total man.89

As for private respondent Aguilar, however, We are inclined to give credence to his alibi that he was at Camp Crame in Quezon City at the time of the incident in question on March 29, 1995. This claim was amply corroborated by the certification that he submitted before the DLSU-CSB Joint Discipline Board, to wit:

C E R T I F I C A T I O NTO WHOM THIS MAY CONCERN:

We, the undersigned, hereby declare and affirm by way of this Certification that sometime on March 29, 1995, at about and between 4:30 P.M. and 5:30 P.M., we were together with Alvin A. Aguilar, at Kiangan Hall, inside Camp Crame, Quezon City, meeting in connection with an affair of our class known as Class 7, Batch 89 of the Philippine Constabulary discussing on the proposed sponsorship of TAU GAMMA PHI from said Batch '89 affair.

That the meeting was terminated at about 6:30 P.M. that evening and Alvin Aguilar had asked our permission to leave and we saw him leave Camp Crame, in his car with the driver.April 18, 1995, Camp Crame, Quezon City.90

The said certification was duly signed by PO3 Nicanor R. Faustino (Anti-Organized Crime CIC, NCR), PO3 Alejandro D. Deluviar (ODITRM, Camp Crame, Quezon City), PO2 Severino C. Filler (TNTSC, Camp Crame, Quezon City), and PO3 Ireneo M. Desesto (Supply Center, PNPLSS). The rule is that alibi assumes significance or strength when it is amply corroborated by credible and disinterested witnesses.91 It is true that alibi is a weak defense which an accused can easily fabricate to escape criminal liability. But where the prosecution evidence is weak, and betrays lack of credibility as to the identification of defendant, alibi assumes commensurate strength. This is but consistent with the presumption of innocence in favor of accused.92

Alibi is not always undeserving of credit, for there are times when accused has no other possible defense for what could really be the truth as to his whereabouts at the crucial time, and such defense may, in fact, tilt the scales of justice in his favor.93

III. The penalty of expulsion imposed by DLSU on private respondents is disproportionate to their misdeed.

Ang parusang expulsion na ipinataw ng DLSU sa private respondents ay hindi angkop sa kanilang pagkakasala.It is true that schools have the power to instill discipline in their students as subsumed in their academic freedom and that "the establishment of rules governing university-student relations, particularly those pertaining to student discipline, may be regarded as vital, not merely to the smooth and efficient operation of the institution, but to its very survival."94 This power, however, does not give them the untrammeled discretion to impose a penalty which is not commensurate with the gravity of the misdeed. If the concept of proportionality between the offense committed and the sanction imposed is not followed, an element of arbitrariness intrudes. That would give rise to a due process question.95

We agree with respondent CHED that under the circumstances, the penalty of expulsion is grossly disproportionate to the gravity of the acts committed by private respondents Bungubung, Reverente, and Valdes, Jr. Each of the two mauling incidents lasted only for few seconds and the victims did not suffer any serious injury. Disciplinary measures especially where they involve suspension, dismissal or expulsion, cut significantly into the future of a student. They attach to him for life and become a mortgage of his future, hardly redeemable in certain cases. Officials of colleges and universities must be anxious to protect it, conscious of the fact that, appropriately construed, a disciplinary action should be treated as an educational tool rather than a punitive measure.96

Accordingly, We affirm the penalty of exclusion97 only, not expulsion,98 imposed on them by the CHED. As such, pursuant to Section 77(b) of the MRPS, petitioner DLSU may exclude or drop the names of the said private respondents from its rolls for being undesirable, and transfer credentials immediately issued.WHEREFORE, the petition is PARTIALLY GRANTED. The Court of Appeals Resolutions dated July 30, 1996 and dated October 15, 1996, and Regional Trial Court of Manila, Branch 36, Order dated January 7, 1997 areANNULLED AND SET ASIDE, while CHED Resolution 181-96 dated May 14, 1996 is AFFIRMED.

PHILIPPINE LONG DISTANCE            G.R. Nos. 164684-85TELEPHONE COMPANY, INC.,

Petitioner,                                                                    Present:

                                                                PUNO, J., Chairman,- versus -                                                 AUSTRIA-MARTINEZ,

                                                                        CALLEJO, SR.,                                                                        TINGA, and                                                                        CHICO-NAZARIO,* JJ.  ANTONIO Q. TIAMSON,                       

Respondent.                             Promulgated: 

                                                                        November 11, 2005 x-----------------------------------------------------------------------------------------x 

DECISION CALLEJO, SR., J.:         

Being questioned in this petition for review on certiorari is the Decision[1] of the Court of Appeals (CA) dated April 16, 2004 in CA-G.R. SP Nos. 51855 and 52247, and the Resolution dated July 27, 2004 denying the motion for reconsideration thereof.            On April 16, 1986, the Philippine Long Distance Telephone Company, Inc. (PLDT) employed Antonio Q. Tiamson as a Radio Technician II (JG4).  He was assigned at the company’s North Luzon Toll Network Division, Clark Transmission Maintenance Center (Clark-TMC) in Pampanga. After the expiration of the probationary period, he was extended regular appointment for the same position.         

In a Letter[2] dated July 29, 1994, Anthony Dy Dee, the President of the Angeles City Telephone System and Datelcom Corporation, informed PLDT of his complaint against its employees assigned in Clark-TMC, stating therein that he suspected them to be in cohorts with the local subscribers in effecting illegal overseas calls. Acting on the letter-complaint, PLDT immediately dispatched a team of inspectors and investigators from its Quality Control and Inspection Department (QCID) and Security Division to conduct surveillance operations in the area.  On August 2, 1994, Vidal Busa, a radio technician, was caught in flagrante delicto while monitoring an illegally connected overseas call using the radio facilities of the company’s Clark-TMC Radio Room.[3]

 The QCID, likewise, requested the Switching Network Division at PLDT’s Sampaloc National Toll Center to

print the CAMA[4] tape recording of all long distance calls originating from the PLDT Clark Exchange Traffic 

for the period of July 29 to August 2, 1994. The printout revealed that a total of 469 fraudulent overseas and local calls were connected and completed at the PLDT Clark-TMC Radio Room for the said period. Three overseas calls to Saudi Arabia made on August 1, 1994 were imputed to Tiamson who appeared to be on duty from 10:00 p.m. to 6:00 a.m.[5]

 The QCID conducted its initial investigation on August 2, 1994, where Busa readily admitted his involvement in

the illegal connection of overseas calls. In his sworn statement, he specifically named Arnel Cayanan, his Shift Supervisor, Antonio Tiamson and Paul Cruzada, both radio technicians, as the other employees actively engaged in the illegal practice. He stated that he knew about this because whenever he would relieve them from their tour of duty, he would see that the circuit was engaged.[6]

 On August 3, 1994, during a confrontation between Busa and Tiamson, the former reiterated his earlier statement

that the latter was involved in the illegal act of connecting overseas calls. [7] For his part, Tiamson admitted that he knew how to make an overseas call using the company’s radio equipment and that he learned how to do so through hands-on experimentation and intensive reading of operating manuals. He, however, denied having actually made an illegal connection of overseas calls.  He declared that he knew of the wrongdoings of Busa and even disconnected the latter’s overseas telephone calls whenever he (Tiamson) was on duty. Tiamson claimed that he failed to report the actuations of Busa because the latter was his supervisor and was afraid to antagonize him.[8] 

 On August 5, 1994, there was another confrontation proceeding between Busa, Tiamson, Cruzada and Cayanan.

In their sworn statements, Busa and Cruzada testified that, sometimes when they relieve Cayanan from his duty, they would discover an illegal connection and an on-going conversation in the line.[9]  Tiamson maintained that he disconnected the illegal calls of Busa, while Cayanan implicated his subordinates.

 The QCID recommended that administrative action for serious misconduct be instituted against the said

employees. Consequently, the company issued to Tiamson an Inter-Office Memorandum dated August 12, 1994, charging him with violation of the company’s disciplinary rules and regulations.  He was, likewise, required to explain within 72 hours why he should not be dismissed, thus:

             Investigation of the complaint indicated hereunder disclosed that:

 1.      Complainant – Mr. Anthony Dy, President DATELCOM Corp. 2.      The decrease of toll revenue for DATELCOM Angeles/Mabalacat Exchange due to fraudulent

overseas call scam was complained and notified by Mr. A. Dy to Mrs. B. G. Gendrano – Clark Exchange Division Head on July 26, 1994.

 3.      The complainant requested assistance to NBI and PLDT QCI to apprehend the personnel

responsible for the illegal connection. 

4.      A clue was provided by Mr. Anthony Dy that the illegal overseas call was coming from Clark-TMC through taped and equipment monitoring.

5.  In the QCI investigation, you were implicated by your fellow Radio Technician Mr. Vidal C. Busa as involved in the case. You admitted you know how to operate the Lenkurt 26600 Signalling Test Set to initiate a call but denied doing it for personal gain or interest but you failed to report the anomaly to your superior as one of your supervisors was involved in the fraudulent case.

 The acts described above are in violation of the Company’s rules and regulations and is

punishable with dismissal from the service. 

In view of the above, please explain in writing within 72 hours from receipt hereof why you should not be dismissed from the service for the acts described above. You may elect to be heard if you so desire. …[10]

                                                

Meanwhile, Tiamson was placed under preventive suspension on August 16, 1994.[11]

 On August 18, 1994, Tiamson submitted his written explanation denying any participation in the illegal activities

at PLDT’s Clark-TMC. He averred that Busa’s statement against him was malicious and untrue and that he was the one relieving Busa from his tour of duty and not the other way around.  He insisted that on August 1, 1994, his tour of duty was from 6:00 a.m. to 10:00 p.m.[12]

 PLDT found his explanation unsatisfactory and inadequate in substance. Thus, it issued an Inter-Office

Memo[13] dated October 5, 1994, terminating Tiamson’s employment effective October 7, 1994 on the ground of serious misconduct and/or fraud.

 Tiamson filed a complaint against PLDT for illegal suspension, illegal dismissal, damages and other monetary

claims, docketed as NLRC Case No. RAB-III-07-6414-95.  The Labor Arbiter resolved the case in favor of Tiamson:

 WHEREFORE, premises considered, judgment is hereby rendered declaring respondent PLDT

guilty of illegal dismissal and it is hereby ordered to reinstate complainant to his former position without loss of seniority rights and with full backwages reckoned from the date of his dismissal up to his actual or payroll reinstatement at the option of the respondent, which as of this date is in the amount of Three Hundred Seventy-Two Thousand Eight Hundred Twenty-Five and 32/100 (P372,825.32) Pesos.

 Further, respondent is ordered to pay complainant attorney’s fee in the amount of Thirty-Seven

Thousand Two Hundred Eighty-Two and 53/100 (P37,282.53) Pesos. The claims for moral and exemplary damages are dismissed for lack of evidence. SO ORDERED.[14]

 The Labor Arbiter declared that the complainant could not have made any illegal connection on August 1, 1994

from 10:00 p.m. to 6:00 a.m. because he was off-duty. PLDT elevated the case to the National Labor Relations Commission (NLRC). On August 31, 1998, the NLRC

ruled that while there was just cause for Tiamson’s dismissal, the penalty of dismissal was too harsh. Hence, the NLRC ordered that Tiamson be reinstated to his former position without loss of seniority rights, but without backwages.[15]

 Both parties moved to reconsider the decision, but the NLRC denied the motions for lack of merit.[16]

 

PLDT filed a petition for certiorari before the CA, assailing the NLRC’s order of reinstatement despite a categorical finding that Tiamson was guilty of illegal connection of overseas calls. The petition was docketed as CA-G.R. SP No. 51855. Tiamson filed a similar petition, assailing the deletion of the award of backwages and attorney’s fees. This was docketed as CA-G.R. SP No. 52247. The CA, thereafter, ordered the consolidation of the two petitions.           On April 16, 2004, the CA reinstated the decision of the Labor Arbiter, thus:

 WHEREFORE, the petition by the PLDT under CA-G.R. SP No. 51855 is DENIED DUE

COURSE and DISMISSED while the petition by Antonio Tiamson under CA-G.R. SP No. 52247 is GIVEN DUE COURSE and GRANTED, and the Decision dated October 15, 1997 of the Labor Arbiter which was set aside by the NLRC, is hereby REINSTATED in its fullness and without modifications.

 SO ORDERED.[17]

          

The CA held that Busa’s sworn statement was not worthy of credence,  a mere afterthought, the contents of which were seriously flawed. The appellate court found it difficult to believe Busa’s assertion that, on several occasions when he came to relieve the respondent, a circuit was in use which the latter would turn off before leaving. In this regard, the appellate court noted that Busa’s work shift preceded that of the respondent, such that it would be impossible for him to see the respondent make an illegal connection.[18]

 The CA likewise opined that the respondent was denied due process when he was not apprised of nor given the

opportunity to confute the charge that during his duty on August 1, 1994, three overseas calls to Saudi Arabia were recorded in the CAMA tape.[19]

 The petitioner timely filed a motion for reconsideration, which the CA denied in its Resolution [20] dated July 27,

2004. The petitioner now comes before this Court, alleging that: … THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN REINSTATING THE DECISION OF THE ARBITER A QUO AS SAID DECISION WAS NOT IN ACCORD WITH LAW AND CONTRARY TO THE EVIDENCE ON RECORD.[21]

 The petitioner submits that it has presented more than substantial evidence to prove that the respondent was

involved in the illegal connection of overseas calls. The petitioner avers that the CA erred in holding that Busa’s sworn statement was not credible. According to the CA, it would have been impossible for Busa to see the respondent making an illegal connection since his tour of duty preceded that of the respondent. The petitioner, however, asserts that there was a rotation of the employees’ tour of duty such that, at times, it was Busa who would take over from the respondent; hence, Busa had the occasion to personally see the respondent connecting illegal calls. In support of this, the petitioner proffers the copy of logbook entries from July 13 to August 3, 1994, which was attached to its Memorandum of Appeal filed with the NLRC. The logbook shows that on several occasions, it was Busa who took over from the respondent.[22]

 The petitioner further asserts that the respondent failed to show that Busa was actuated and impelled by improper

motive and bad faith in executing his sworn statement.[23] The records show that Busa, from the very start, had categorically and unequivocally named the respondent as one of those engaged in the illegal connection of overseas calls.[24]  Moreover, Busa’s sworn statement had been corroborated by the printout of the CAMA tapes (which disclosed that during the respondent’s August 1, 1994 duty, three fraudulent calls to Saudi Arabia were illegally made), [25] as well as Cayanan’s sworn statement implicating the respondent.[26]

 The petitioner submits that the respondent’s offense was serious  in character and merits the penalty of dismissal

from employment. It contends that the respondent was accorded the full measure of due process before he was dismissed: he was given a notice which apprised him of the charge against him and required him to explain why he should not be dismissed, and later, a notice of termination. The petitioner claims that the Labor Code simply requires that the employee be given a written notice containing a statement of the causes of termination.  It insists that the printout of the recording of the CAMA tapes showing that three illegal connections were made on August 1, 1994 is a mere evidentiary matter that need not be mentioned in the notice.[27]

 For his part, the respondent avers that Busa’s statement was uncorroborated and hearsay for lack of cross-

examination. He insists that Busa could not have seen him make illegal connections since the latter’s shift came before his.[28]

 The petitioner replies that an affidavit may be admissible even if the witness is not presented during trial because

technical rules are not strictly followed in proceedings before the Labor Arbiter and the NLRC.[29]

 The petition has no merit. It is a settled rule that factual findings of labor officials, who are deemed to have acquired expertise in matters

within their respective jurisdictions, are generally accorded not only respect but even finality. [30] Moreover, in a petition for review on certiorari under Rule 45, the Supreme Court reviews only errors of law and not errors of facts. [31] However, where there is divergence in the findings and conclusions of the NLRC, on the one hand, from those of the Labor Arbiter and the Court of Appeals, on the other, the Court is constrained to examine the evidence.[32]

 In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid

cause; failure to do so would necessarily mean that the dismissal was illegal. [33] The employer’s case succeeds or fails on the strength of its evidence and not on the weakness of the employee’s defense. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. [34] Moreover, the quantum of proof required in determining the legality of an employee’s dismissal is only substantial evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.[35]

 In this case, the appellate court ruled for respondent Tiamson, ratiocinating as follows:

 The issues posed by both parties involve the evaluation of the findings of facts by the agencies a

quo. While the general rule is that factual issues could not be properly raised and considered in a petition for certiorari, it however admits of this exception that a disharmony between the factual findings of the Labor Arbiter and those of the NLRC opens the door to review thereof by the Supreme Court (Asuncion vs. National Labor Relations Commission, 362 SCRA 56), including, of course, the Court of Appeals.

 The crux of both petitions is whether the NLRC with its findings quoted below, was correct in

setting aside the disposition of the Labor Arbiter: 

We disagree that respondent failed to present evidence linking complainant to the illegal connection scam. As pointed out by the respondent, co-employee Busa and Cayanan in the course of their investigation implicated complainant’s participation in illegal overseas connection.  Complainant also failed to refute respondent’s evidence that on August 1, 1994, while he was on duty, three (3) overseas calls to Saudi Arabia were recorded in cama tape (Annex 4, p. 30, records).

 However, we consider the penalty of dismissal too harsh considering that respondent

imposed a sixty (60)-day suspension on Paul Cruzada, a co-employee of complainant who submitted (sic) culpability.  For where a lesser punitive penalty would suffice, the supreme penalty of dismissal should be visited (Almira vs. B.F. Goodrich, 58 SCRA 120).  Under the circumstances, reinstatement but without backwages is appropriate (pp. 39-40, Rollo)

 Our review of the records reveals that among the three employees who issued sworn statements, namely, Busa, Cayanan and Cruzada,  it was only Busa who directly implicated Tiamson and it was done inexplicably only in his second sworn statement. It does not inspire credence as it comes as an afterthought and the contents are seriously flawed on material points.  Looming large is the claim of Busa that on several occasions when he came to relieve Tiamson, he observed that his circuit was logged on and in use, and Tiamson would then put it off before leaving.  This is a canard because the shift of Busa was from 1:00 p.m. to 6:00 a.m. and of course ahead of the 6:00 a.m. to 2:00 p.m. shift of Tiamson who came in as his reliever.  Their tours of duty was in the converse order of what Busa claimed, and so he spoke with a forked tongue when he stated that Tiamson at the preceding shift had his circuit logged on and switched this off when he left.

 A no less important point is the undisputed fact that Tiamson was not given the opportunity to

confute the charge that on August 1, 1994 while he was on duty, three (3) overseas calls to Saudi Arabia were recorded in the cama tape.  This was not indicated in the memorandum sent to him on August 12, 1994, the full text of which reads:

                                                                  August 12, 1994 

TO                 : MR. ANTONIO Q. TIAMSON – Radio Tech II Clark TMCFROM      : Division Head, North Luzon Toll NetworkSUBJECT: ADMINISTRATIVE CASE- - - - - - -  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -      

Investigation of the complaint indicated hereunder disclosed that: 

1.  Complainant Mr. Anthony Dy, President DATELCOM Corp. 

2. The decrease of toll revenue for DATELCOM Angeles/Mabalacat Exchange due to fraudulent overseas call scam was complained and notified by Mr. A. Dy to Mrs. H. G. Gendrano – Clark Exchange Division Head on July 26, 1994.

 3. The complainant requested assistance to NBI and PLDT QCI to apprehend the

personnel responsible for the illegal connection. 

4.  A clue was provided by Mr. Anthony Dy that the illegal overseas call was coming from Clark-TMC through taped and equipment monitoring. 

           5. In the QCI investigation, you were implicated by your fellow Radio Technician Mr. Vidal C. Busa as involved in the case. You admitted you know how to operate the Lenkurt 26600 Signalling Test Set to initiate a call but denied doing it for personal gain or interest but you failed to report the anomaly to your superior as one of your supervisors was involved in the fraudulent case. 

         The acts described above are in violation of the Company’s rules and regulations and is punishable with dismissal from the service.           In view of the above, please explain in writing within 72 hours from receipt hereof why you should not be dismissed from the service for the acts described above.  You may elect to be heard if you so desire.          Please be informed also that you will be placed under preventive suspension which will take effect on August 16, 1994 pending resolution of the case.          If no written explanation is received from you within the said period of 72 hours, this case will be decided on the basis of the evidence on hand. (p. 227, Rollo)                                                                       (SGD.)                                                     ARMANDO A. ABESAMIS

             Procedural due process requires that an employee be apprised of the charge against him, given reasonable time to answer the same, allowed ample opportunity to be heard and defend himself, and assisted by a representative if the employee so desires (Concorde Hotel vs. Court of Appeals, 362 SCRA 583; underlining supplied). Procedural due process requires that the employer serve the employees to be dismissed two (2) written notices before the termination of their employment is effected: (a) the first,  to apprise them of the particular acts or omission for which their dismissal is sought; and (b) second, to inform them of the decision of the employer that they are being dismissed (Perpetual Help Credit Cooperative, Inc. vs. Faburada, 366 SCRA 693; underlining supplied). The Labor Arbiter, therefore, was correct in ruling that Tiamson was indeed illegally dismissed from his employment.[36]

 The petitioner maintains that contrary to the findings and conclusions of the appellate court, it has established

through substantial evidence that there was just cause for the respondent’s dismissal. To bolster such contention, the petitioner adduces the following documentary evidences: (1) the sworn statements of Vidal Busa specifically implicating the respondent; 

(2) the sworn statement of Arnel Cayanan; and (3) the printout of the CAMA tape, recording the unauthorized overseas calls originating from Clark-TMC during the respondent’s tour of duty.

 The respondent disputes the admissibility of Busa’s sworn statements for being hearsay since the latter was not

presented for cross-examination. This argument, however, is not persuasive because the rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where decisions may be reached on the basis of position papers only.[37]

 The Court agrees with the contentions of the respondent and the findings and rulings of the CA. The petitioner indeed failed to adduce substantial evidence to prove that the dismissal of the respondent was for a

just cause.  In his first sworn statement, Busa implicated the respondent in the illegal connections of overseas calls in this manner:

 T 25 - Bukod sa iyo, sinu-sino pa sa mga kasamahan mo ang tinuruan ni   Mr. Cayanan ng sistemang ito?S   - Sina Antonio Tiamson at Paul Cruzada na pawang mga Radio Technicians din. T 26 - Ang ibig mo sabihin, ginagawa din nina Mr. Tiamson at Cruzada               ang magpa-patch ng mga tawag sa abroad o overseas?S      - Opo. T 27 - Paano mo naman nasisiguro ito?S      - Nakikita ko po. T 28 - Paano mo naman nakita samantalang magka-iba ang tour of duty              ninyo?S      - Pag nag-relyebo kami ay naaabutan kong naka-engage ang circuit at pag tinanong ko ay sinasabi

nga nilang may tawag sila at kasalukuyang nag-uusap ang magkabilang parties.[38]

  During the confrontation between Busa and the respondent, the former likewise made the following statements: T 3  -  Ayon sa iyo, ginagawa rin ni Mr. Tiamson ang magku-kunekta ng mga illegal na tawag overseas sa

pamamagitan ng pag-gamit ng inyong Radio Equipment. Tama ba ito?S      -  Tama po, Sir. T 4   -  Paano mo nalaman na  ginagawa rin ni Mr. Tiamson ito?S   - Dahil nakikita ko siyang nagkukunekta at ilang beses ko ring nadatnan kapag nag-relyebo kami na

gumagana ang circuit na ang ibig sabihin ay may nag-uusap. At bago siya aalis ay inilalagay niya sa normal position ang linyang ginamit niya.

 T 5  -  Kailan pa ito gingawa ni Mr. Tiamson kung natatandaan mo pa?S     -  Sa natatandaan ko ginagawa niya ito magmula noong 1992 pa. T 6 -  Ayon pa rin sa iyo, alam din ni Mr. Tiamson na ginagawa rin ni Mr. Cayanan itong mga illegal

activities na ito. Paano mo nasabi na alam ni Mr. Tiamson itong ginagawa ni Mr. Cayanan S   -  Kasi magkakasama kami at kaming apat lang nina Mr. Cayanan, Mr.Tiamson, Mr. Cruzada at ako

ang nakaka-alam niyang operation na iyan.[39]

 

 On the other hand, during the confrontation among all four employees implicated in the matter, Cayanan testified

that he was aware that his “subordinates” were engaged in illegal activities. However, he failed to specifically mention who these subordinates were.[40]

 Although admissible in evidence, affidavits being self-serving must be received with caution.  This is because the

adverse party is not afforded any opportunity to test their veracity.[41] By themselves, generalized and pro forma affidavits cannot constitute relevant evidence which a reasonable mind may accept as adequate. [42] There must be some other relevant evidence to corroborate such affidavits.

 On this point, the petitioner submits that the printout of the CAMA tapes corroborated Busa’s sworn statement. A

perusal of the printout, however, shows that it is not authenticated by the proper officer of the company. Moreover, the name of the respondent and the other annotations in the said printout are handwritten and unsigned.

 The ruling in Asuncion v. National Labor Relations Commission[43] is instructive on how such document should

be treated.  In that case, the employer submitted a handwritten listing and computer printouts to establish the charges against the employee. The handwritten listing was not signed, and while there was a computer-generated listing, the entries of time and other annotations therein were also handwritten and unsigned. The Court ruled that the handwritten listing and unsigned computer printouts were unauthenticated, hence, unreliable. Mere self-serving evidence (of which the listing and printouts are of that nature) should be rejected as evidence without any rational probative value even in administrative  proceedings.[44]

                     Thus, in Uichico v. National Labor Relations Commission,[45] the Court elucidated the extent of the liberality of procedure in administrative actions:

…  It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value. …[46]

  The decisions of this Court, while adhering to a liberal view in the conduct of proceedings before administrative

agencies, have nonetheless consistently required some proof of authenticity or reliability as a condition for the admission of documents.[47] Absent any such proof of authenticity, the printout of the CAMA tape should be considered inadmissible, hence, without any probative weight.

 To conclude, the petitioner has not established by substantial evidence that there was just cause for the

respondent’s termination from his employment. The sworn statements of Busa and Cayanan alone are not sufficient to establish that the respondent was guilty of serious misconduct. In light of such finding, there is no need to delve into whether or not the respondent was afforded due process when he was dismissed by the petitioner.

 WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The Decision of the Court of

Appeals dated April 16, 2004, and its Resolution dated July 27, 2004 in CA-G.R. SP Nos. 51855 and 52247 are AFFIRMED.

 

[G.R. No. 114313.  July 29, 1996]

MGG MARINE SERVICES, INC. and/or DOROTEO C. GARLAN and CESAR ROTILO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ELIZABETH A. MOLINA, respondents.

D E C I S I O N

PANGANIBAN, J.:

To justify fully the dismissal of an employee, the employer — as a rule — must prove (a) that the termination was due to a just cause and (b) that the employee was afforded due process prior to dismissal.  Does the violation by a comptroller-finance officer of explicit instructions from senior management on how the available liquid resources of the company are to be controlled and disbursed, such violation resulting in the collapse of the company's cash flow constitute loss of trust and confidence sufficient to justify termination of such management officer?  Where the presence of just cause is shown, what is the consequence of the non-observance of due process?  Is an internal audit sufficient compliance with the due process requirement?  These are the questions that confronted this Court in resolving this petition for certiorari assailing the Resolution[1] of the National Labor Relations Commission (NLRC),[2]which affirmed in toto the decision of the Labor Arbiter[3] dated December 21, 1992.

After due deliberation and consultation of the petition, the comments filed by the Solicitor General and the private respondent as well as the reply thereto, the Court gave due course to the petition and considered the case submitted for resolution, without requiring the parties to submit the memoranda.

The Facts

Private respondent was initially employed by the MGG Marine Services, Inc. (MGG) on July 1, 1988.

On March 25, 1990, the president of MGG, petitioner Doroteo C. Garlan, went to the United States for a brief sojourn.  On March 1, 1990, before his departure, he appointed private respondent as comptroller and the over-all supervisor, concurrently with her then position as financial officer.  As comptroller, private respondent was tasked to hold in trust for the company corporate funds to pay its obligations as authorized by the president and the board of directors.  Petitioner Garlan instructed private respondent to pay the company's obligations as they fell due.  Ma. Lourdes G. Unson, vice-president of MGG who also traveled to the United States, left with private respondent 79 prepared and pre-signed checks, 16 in blank and 63 with specific amounts on them, with corresponding vouchers containing the amount of debts due and the names of the creditors.  Private respondent was specifically told to pay only the creditors mentioned in the cash vouchers and to place on each of the 16 blank checks the amount stated in the corresponding check voucher.   The said checks were made payable to private respondent, who upon withdrawal of the money from the bank, was to pay the same to the creditors.

At the time the aforementioned officers left for abroad, the company had about P1.5 million in its bank account.  The total amount payable to the creditors as appearing in the check vouchers corresponding to the 16 blank checks was P224,131.50.  All payments of the company were programmed in accordance with its plans and budget for the purpose of maintaining the optimal level of cash reserve.

When the corporate officers returned from their trip in June 1990, they were dismayed to learn that the company's deposits in the bank was reduced to only P5,720.00.  It turned out that private respondent disobeyed the instructions given her not to pay more than what was specified in check vouchers.  She increased the amounts she wrote on the blank checks so that instead of paying only P224,131.50 as budgeted, she withdrew from the bank an aggregate sum of P1,515,823.00.  Likewise, she paid some creditors who were not specified in the cash vouchers.  When the company had to pay an obligation of P15,000.00 on June 7, 1990, private respondent could only withdraw P5,720.00.

In her pleadings, private respondent did not give a satisfactory explanation as to why she violated the instruction given her except to claim that she did not profit by a single centavo from the withdrawals which she paid to company creditors.

MGG filed estafa charges against private respondent which were however dismissed.

On November 12, 1990, MGG terminated private respondent's employment for loss of trust and confidence.  She then filed a complaint for illegal dismissal against MGG and its officers.

In a decision dated December 21, 1992, the Labor Arbiter held that: (1) the dismissal was illegal; (2) MGG should pay private respondent (a) separation pay equivalent to one month's salary for every year of service, it appearing that strained relations between the parties rendered reinstatement impractical; (b) thirteenth month pay in the amount of P16,083.32; (c) overtime pay in the amount of P21,977.52; (d) unpaid salary in the amount of P31,166.66; (e) moral damages in the amount of P50,000.00 for the “wrongful and malicious dismissal in bad faith”; and (f) attorney’s fees.[4]

The Labor Arbiter noted:

“In the case at bar, except for their bare self-serving allegation that the complainant had allegedly misappropriated corporate funds, no proof whatsoever was adduced by respondents and not even a scintilla of evidence was presented to show that the complainant had in fact defrauded the company to the tune of more than a million pesos.  The complainant on the other hand successfully defended herself from said accusations by proving that she was in fact authorized to disburse the corporate funds in question for the purpose of settling the company’s various accounts with its different creditors.  Significantly, respondents made no claim at all that a single centavo went to the pocket of complainant.  Moreover, the complaint for estafa filed against the complainant was dismissed by Asst. City Prosecutor Eudoxia T. Gualberto in a resolution dated September 30, 1991 and a subsequent motion for reconsideration of said dismissal was denied by the City Prosecutor of Manila.”[5]

MGG appealed the Labor Arbiter’s decision to NLRC.  In a Resolution dated February 28, 1994, NLRC dismissed the appeal and affirmed in toto the appealed decision.

Hence this petition for certiorari.

The Issues

The issues in this case are:

(1)              Was there lawful cause for the dismissal of private respondent?

(2)              Did petitioners comply with the procedural requirements for valid dismissal? and

(3)              Were petitioners accorded due process at the hearing before the Labor Arbiter?

The First Issue:

Loss of Trust and Confidence in the Employee

MGG asserts that it was legally justified in dismissing private respondent on the ground of loss of trust and confidence.

We find that there is basis for MGG’s loss of trust and confidence in private respondent, who does not deny that she entered on the blank checks amounts in excess of what had been provided for in the cash vouchers, and made payments to creditors other than those specified in said vouchers.  In his decision, the Labor Arbiter said that the herein petitioners (respondents therein) filed a position paper explaining the basis of such loss of confidence and defining the damage wrought by private respondent Molina, thus:5a

“For their part, respondents filed a position paper stating that from the time complainant was appointed as liquidation officer up to her designation as comptroller of the company, she was tasked to hold in trust corporate funds; that in March 1990 when respondent Doroteo Garlan left for the United States, complainant was instructed to take care of the financial requirements of the company and to disburse amounts payable to creditors as they became due and payable; that respondent corporation through its vice-president, Ma. Lourdes Unson prepared several check vouchers with the corresponding blank checks with the amounts reflected on the check vouchers; that said checks were made payable to complainant for her to facilitate the drawing of cash from the drawee banks so that cash vouchers would then be used in paying creditors; that complainant disbursed corporate funds not as instructed but with unexplained misappropriation or the blank checks that were supposed to have been filled up with amounts reflected on the corresponding check vouchers were intercolated (sic) with amounts different and more than she was instructed to place; that an audit was made and it was discovered that complainant was able to draw, with the use of falsified checks the amount of P1,515,823.00, instead of the amount of P224,131.50 or an excess of P1,291,691.50, which amount remains unexplained up to the present; that complainant was asked to explain the over-drawing of corporate funds but she has failed and in fact refused to submit any explanations;” (Italics supplied)

This was buttressed by the affidavit of petitioners’ witness Renato Jose O. Unson, who explained the limits of Molina’s authority as well as the “cash flow” damage that her violations thereof caused the company:5b

“(7)     Before MGG’s senior management left for abroad last March 25, 1990, being a small company with limited resources, senior management set up a very strict budget so that its company obligations would be met and paid as they fell due.  Molina was informed of the purpose of senior management in setting up a strict budget and implementation thru the issuance of various checks;

(8)      Thus, several checks including eleven (11) blank checks with their corresponding check vouchers specifying the amount to be placed and the purpose for which the funds were to be used were left with Molina who enjoyed complete trust and confidence from senior management.  Molina knew that she was under very strict and specific instructions to fill in the blank checks with amounts only in accordance with the corresponding check vouchers and to disburse said funds in accordance with the purpose indicated in the respective check voucher.

Thus Molina knew that she had no authority to fill in the blank checks with amounts different from that as instructed.  She also knew that she had no authority to disburse funds to purposes different from that indicated in the individual check vouchers;

(9)      All the time that senior management was abroad, senior management was constantly in touch with Molina thru overseas phone calls.  In fact, during the first two weeks (from March 25, 1990) management called up Molina at least seven times.

Up to the time of arrival sometime June, 1990.  Molina consistently informed senior management that everything was normal and that the business, its operations, funds; collections and accounts were in accordance with plans and the budget.

xxx                                   xxx                                        xxx

(12)    A corresponding company audit was conducted wherein Molina was further allowed to explain her actuations.  It was then discovered that by taking advantage of the blank checks, she was able to withdraw amounts in excess of instructions.

In fact, within the short period from March 27, 1990 to April 6, 1990 (senior management left March 25, 1990) Molina withdrew close to P1,000,000.00 pesos in excess of that instructed her by already encashing six (6) of the blank checks with amounts in excess of those instructed her.

MGG’s funds, were so depleted that Molina on June 7, 1990, could not withdraw the amount she was authorized, that is, even if she was instructed to put the amount of P15,000.00 in the blank check, Molina only placed and withdrew the amount of P5,720.00 only;

In all, Molina without any authority whatsoever, by placing in the blank checks amounts in excess of what she was specifically instructed, withdrew about P1,282,411.00 thereby creating liability and causing damage and prejudice to MGG.  It should be noted that these excess amounts were part of the unbudgeted and unappropriated corporate funds which only senior management had the right to withdraw or cause to withdraw;

(13)    In short, Molina’s authority was limited to the physical withdrawal of MGG’s budgeted and appropriated funds from the bank as indicated in the checks/check vouchers and to disburse said funds in accordance with specific instructions given her”;

The above instructions of senior management were not denied by Molina in her testimony before said Arbiter:5c

Q. - When they left for the U.S. did they leave you any vouchers?

Miss Molina

A. - They left me vouchers and my guideline (sic) are here (producing a list with the date therein — March 27 consisting of 8 pages).  They left me this one as my guidelines (sic) is supported by 79 checks, 16 blank checks and 63 with the amount.

Q. - And these 16 blank checks that you mentioned these were left with you with attached checks?

A. - Yes, sir.

Summing the prejudice caused by private respondent, petitioners allege as follows in their Petition[6]before us:

“x x x While private respondent was authorized to withdraw from company coffers approximately P200,000.00, by filling-in the checks amounts in excess of those mentioned in the check vouchers, she was able to withdraw approximately P1.4 million thereby abruptly reducing the company’s reserve funds by as much as P1.2 million (TSN, June 9, 1992, pp. 43- 44).  Thus, when the senior officers returned from the United States, they were surprised to find out that the company’s reserve funds have significantly dwindled to such an extent that private respondent ‘on June 7, 1990, could not withdraw the amount she was authorized, that is, even if she was instructed to put the amount of P15,000.00 in blank check, Molina could only place and withdraw the amount of P5,720.00.’ (par. 12, Affidavit of Atty. Unson dated March 26, 1992; Annex “D” hereof).  Obviously, by June 7, 1990, the company’s reserve funds have been reduced to a measly P5,720.00 by reason of the over-withdrawal of private respondent.

“Bearing in mind the purposes and objectives of setting-up the reserve fund, it is respectfully maintained that the abrupt reduction thereof from P1.4 million pesos to the measly sum P5,720.00 in a span of three (3) months from March to June 7, 1990, brought untold miseries on petitioner MGG.  Petitioner found its checks bouncing one after the other.  It failed to meet its financial obligations to its preferred creditors.  It had to source financial resources elsewhere in order to pay its due and demandable debts, not to mention its obligations to its employees.

“It is, therefore, incorrect for public respondent NLRC to rule that private respondent’s act of over-withdrawing from the company’s reserve funds did not cause any damage or prejudice unto petitioner MGG.”

The Labor Arbiter labored under the wrong impression that private respondent was dismissed merely because she embezzled company funds saying that "x x x except for their bare self-serving allegation that the complainant (private respondent herein) had allegedly misappropriated corporate funds, no proof whatsoever was adduced by respondents (petitioner herein) and not even a scintilla of evidence was presented to show that the complainant had in fact defrauded the company to the tune of more than a million pesos” (supra).  The NLRC, also falling into the same error as the Labor Arbiter, said:

“x x x the complainant had shown to Our satisfaction that in the questioned transactions, she never defrauded the company as the monies so defrayed were used to settle various corporate accounts x x x”.[7]

The NLRC and the Labor Arbiter did not realize that the acts of private respondent complained of had placed the company in great jeopardy and disturbed its financial stability, thereby causing it real and actual damage.[8]

Indeed, private respondent’s disobedience and precipitated actions caused great damage to the company’s cash flow.  In the harsh world of business, cash flow is as important as — and oftentimes, even more critical than — profitability.  So long as an enterprise has enough liquidity (cash) to pay its workers, requisition fuel, meet office rentals, maintain its equipment and satisfy its life-line creditors within tolerable limits, it will survive and bridge better days for its recovery.  But once it fails to pay such bills because its liquid resources are improvidently used and disbursed, as private respondent did in the instant case, it runs the all-too-real risk of immediate collapse.  No wonder, petitioners were rightfully aghast when upon their return from abroad, they discovered that their treasury was almost completely drained, with a measly P5,720.00 remaining.

Private respondent took it upon herself to disburse the company funds in amounts and for purposes of her own discretion, and in disregard of the program and plans of the company. She arrogated to herself the combined powers of the management and the board of directors of the company.

An employer cannot be compelled to retain an employee who is guilty of acts inimical to the interests of the employer.[9] A company has the right to dismiss its employees if only as a measure of self-protection.[10] This is all the more true in the case of supervisors or personnel occupying positions of responsibility.[11]

In the instant case, let it be remembered that the private respondent is not an ordinary rank-and-file employee.  She is the Comptroller-Finance Officer who unarguably violated her duty of controlling cash flow and specific instructions on how the very limited cash of the company was to be spent.  It would be extremely oppressive and cruel to require petitioners to retain in their innermost sanctum of management an officer (not just a rank-and-file employee) who has admitted not only violating specific instructions but also to being completely unreliable and untrustworthy in the discharge of her duty to safeguard the cash flow of the company.

That the complaint for estafa filed by MGG against private respondent was dismissed is also of no moment.  The rule is that an employee’s acquittal in a criminal case does not preclude a finding that he has been guilty of acts inimical to the employer’s interest.[12]

Corollarily, proof beyond reasonable doubt of an employee’s misconduct is not required in dismissing and employee on the ground of loss of trust and confidence.  The quantum of proof required is only substantial evidence.[13] In the case before us, there was an admitted, actual and real breach of duty committed by private respondent, which was the basis of MGG’s loss of trust and confidence in her.

While it is true that initially during the proceedings before the labor tribunals, petitioners were also faulting Molina for estafa, in addition to loss of confidence, they have abandoned misappropriation, in the instant petition, as a ground for dismissal (since the criminal complaint against her was dismissed) and instead relied on the second ground, namely, loss of confidence resulting from her disobedience and unfaithfulness in the discharge of her duties — which we hold as sufficient cause for her dismissal under the circumstances.

The Second Issue: Procedural Due Process

To constitute a completely valid and faultless dismissal, it is well-settled that the employer must show not only sufficient ground therefor but it must also prove that it observed procedural due process by giving the employee two notices: one, of the intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss; and an opportunity to answer and rebut the charges against him, in between such notices.

“The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal; upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s charges against him accordingly to defend himself therefrom before dismissal is effected.  Neither of these

two requirements can be dispensed with without running afoul of the due process requirement of the 1987 Constitution.”[14]

In the case before us, the petitioners found out about the excess withdrawals when an audit was conducted.  The record is devoid of any showing that private respondent was given notice of the charges against her.  Neither was she given a hearing or opportunity to present her defense.  The only allegation of petitioners was that she was asked questions about her withdrawals during the audit.  But these are too scant and too bare to amount to due process.  There was no indication of the nature and the type of questions asked, the process of the supposed inquiry, the time and opportunity given for her defense, and the degree of explanation allowed her.

When this issue was brought up by the Solicitor General in his Comment, all that the petitioners could say in their Reply was:

“There is no dispute that private respondent Molina was audited upon arrival of the senior management from the United States and that she herself admits that she was asked questions and was allowed to explain her side (pp. 28-18 (sic), TSN, July 26, 1991).”[15]

Plainly, this is not sufficient compliance with due process.  An audit cannot take the place of the twin requirements of notices and hearing.  At the very least, petitioners failed to show they followed these requirements.

“There is also no showing that the requirements of due process were adequately met by the petitioners.

“The law requires that the employer must furnish the worker sought to be dismissed with two (2) written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him.  (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the Labor Code as amended).  Failure to comply with the requirements taints the dismissal with illegality.  This procedure is mandatory; in the absence of which, any judgment reached by management is void and inexistent (Tingson, Jr. v. NLRC, 185 SCRA 498 [1990]; National Service Corp. v. NLRC, 168 SCRA 122 [1988]; Ruffy v. NLRC, 182 SCRA 365 [1990]).”[16]

This failure to show due process taints the dismissal.  This does not mean however that the private respondent would be entitled to backwages or reinstatement or even separation pay. [17] Under prevailing jurisprudence, she is entitled only to indemnity or damages, the amount of which depends on the peculiar circumstances of each case.[18]

In Wenphil Corporation vs. NLRC, et al.[19], which is the leading example of these “indemnity cases,” the private respondent had an altercation with a co-employee, as a result of which both were suspended the following morning, and in the afternoon of the same day private respondent was dismissed.  In justifying his dismissal, the Court held:

“The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority and the payment of his wages during the period of his separation until his actual reinstatement but not exceeding three (3) years without qualification or deduction, when it appears he was not afforded due process, although his dismissal was found to be for just and authorized cause in an appropriate proceedings in the Ministry of Labor and Employment, should be re-examined.  It will be highly prejudicial to the interests of the employer to impose on him the services of an employee who has been shown to be guilty of the charges that warranted his dismissal from employment.  Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remains in the service.

Thus in the present case, where the private respondent, who appears to be of violent temper, caused trouble during office hours and even defied his superiors as they tried to pacify him, should not be rewarded with re-employment and back wages.  It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe.  Under the circumstances the dismissal of the private respondent for just cause should be maintained.  He has no right to return to his former employer.

However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal.  The rule is explicit as above discussed.  The dismissal of an employee must be for just or authorized cause and after due process.  Petitioner committed an infraction of the second requirement.  Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment.  Considering the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00.  The measure of this award depends on the facts of each case and the gravity of the omission committed by the employer.”

In Rubberworld (Phils.) Inc. et al. vs. NLRC, et al.[20] the employer was also ordered to pay the private respondent P1,000.00 “as indemnification for (petitioners’) failure to observe the requirements of due process prior to termination of private respondent’s employment for just cause.” Following this doctrine, the Court in Aurelio vs. NLRC, et al.[21] ruled that “where there was a valid ground to dismiss an employee but there was non-observance of due process x x x only a sanction must be imposed upon the employer x x x” and that “the NLRC erred when it awarded separation pay x x x.”

In Reta vs. NLRC, et al.,[22] the award was raised to P10,000.00 “considering that petitioner was given his walking papers and forced to leave his ship in a foreign port x x x.” The said sum of P10,000.00 was considered “fair, reasonable and realistic” in Alhambra Industries Inc. vs. NLRC et al.,[23] the Court adding that “termination of a worker for cause, even without procedural due process, does not warrant reinstatement, but the employer incurs liability for damages.”[24]

In striking down the claim for backwages and separation pay where just cause is clearly shown, the Court, through Mr. Justice Florenz D. Regalado in Cathedral School of Technology vs. NLRC, et al., (supra), said:

“x x x (B)ackwages are granted on the basis of equity for earnings which a worker or employee has lost due to his illegal dismissal, where private respondent’s dismissal is for just cause, as is the case herein, there is no factual or legal basis to order payment of backwages; otherwise, private respondent would be unjustly enriching herself at the expense of petitioners.  Where the employee’s dismissal was for a just cause, it would be neither fair nor just to allow the employee to recover something he has not earned or could not have earned.

Neither can there be an award for separation pay.  In Cosmopolitan Funeral Homes, Inc. vs. Maalat, et al., we reiterated the categorical abandonment of the doctrine that employees dismissed for cause are entitled to separation pay on the ground of social and compassionate justice.  x x x” (citations omitted.)

In the instant case, following the jurisprudence firmly established in the aforecited cases, she is entitled to indemnity of P1,000.00.

The Third Issue:

Due Process at the Labor Arbiter’s Forum

Petitioners maintained that they were denied due process when the Labor Arbiter considered the case submitted for resolution notwithstanding the fact that petitioners had manifested their intention to present additional evidence.

We do not agree.

Petitioners first asked to be allowed to present additional evidence at the hearing on June 9, 1992 but they manifested that the documents they intended to present were not then available.  The Labor Arbiter allowed petitioners to present the documents at the next hearing, July 7, 1994.  As that next hearing day was declared a special non-working holiday, the case was reset to August 4, 1992.  Inasmuch as the counsel for petitioners had to attend to another urgent matter on August 4, 1992, he failed to appear at the hearing, although he filed a motion for postponement.  The Labor Arbiter denied the motion and issued an order considering the case as submitted for resolution.  On motion for reconsideration of petitioners, the Labor Arbiter reset the case for the

reception of additional evidence on October 30, 1992.  Petitioners again failed to appear on said date, prompting the Labor Arbiter to consider the case submitted for resolution.

Under the foregoing circumstances we cannot say that the Labor Arbiter abused his discretion in considering the case submitted for resolution on October 30, 1992.  There is no denial of due process where the party was given an opportunity to present his case, which he did not take advantage of.

That being the case, the claim of private respondent for thirteenth month pay (P16,083.32), overtime pay (P21,977.56), and unpaid salary (P31,166.66) stands unrebutted.

Refutation of Mr. Justice Puno’s Dissent

The dissenting opinion of Mr. Justice Reynato S. Puno contends that “there is substantial evidence on record to justify the factual finding of the Arbiter and the NLRC,” and thus faults the majority with a deviation from the “age-old rule that we accord the highest consideration to the factual findings of labor arbiters especially when they are affirmed by the NLRC.”

There is no such deviation.  The labor tribunals, as stated earlier, found the private respondent’s dismissal unjustified because “the complainant had shown to Our satisfaction that in the questioned transactions, she never defrauded the company as the monies so defrayed were used to settle various corporate accounts x x x”[25] and none of such “monies” went to her private pocket.  This is correct — and if that is all that private respondent was faulted with, we would have supported the tribunal a quo all the way.  But, to repeat, we are not finding her guilty of any dishonesty.  We find that her ill-considered, imprudent and precipitate acts of misusing the very limited cash of the company, in violation of her inherent duties as Comptroller/Finance Officer and of the specific instructions of top management caused the near collapse of the company.   We are not reversing the factual findings that private respondent was NOT guilty of any fraud.  But based on the facts as found by the arbiter and the respondent Commission and borne out by the records, viz., (a) petitioner’s position paper before the labor arbiter, (b) affidavit of witness Renato Unson, (c) admissions of private respondent during her testimony before the labor arbiter, and (d) pertinent allegations in the petition before us, we conclude that there is more than sufficient basis for the company’s “loss of trust and confidence” in private respondent.  Even Mr. Justice Puno concedes that (and we quote him) “there is no doubt that private respondent entered on the blank checks amounts in excess of what had been specified in the cash vouchers and she also made payments to creditors other than those named in said vouchers.” This critical fact, conceded by our esteemed colleague, was altogether ignored by the respondent Commission and the arbiter.  In short, we used the same facts brought out before the lower tribunals in arriving at our conclusion of law — a conclusion such tribunals ought to have made also.

Our dissenting colleague also maintains that private respondent had authority to make the above-described alterations in the checks and in paying “creditors other than those named in the vouchers,” in the absence of specific instructions.  His contention lacks basis.  Such instructions, aside from having been presented in petitioner’s position paper before the arbiter as well as through the testimony of witness Renato Unson, were also expressly admitted by respondent Molina in her testimony as quoted in the dissent when she produced her “guideline” — 8 pages long — on how the “79 checks, 16 blank checks and 63 with amounts” were to be spent/used.

And even assuming arguendo that there were no specific written instructions, still, Molina was not a mere clerk but a high corporate officer whose primary and usual duty is/was to control corporate funds.  While in hindsight it is easy to blame petitioners for not documenting their instructions as insisted by the dissent, it is however not difficult to understand that ordinary business activities are performed in the normal course without anticipation nor foreknowledge of litigation, often with dispatch and usually with a minimum of documentation. Considering that the matter of paying off creditors subject to the constraints of the company’s available funds is a fairly routine business activity and part and parcel of the normal job functions of a comptroller or finance officer, and considering further that blank checks and supporting vouchers — which were all in writing — had been prepared in advance, specific detailed written instructions on what to do with them would have been appropriate only for a non-thinking clerk and would have been unusual — in fact, even insulting — for such “comptroller-finance officer.” But the immutable fact is that such instructions were in fact

documented.  And that notwithstanding, respondent Molina still acted imprudently and contrary to those instructions.

Mr. Justice Puno also argues that there is no evidence to support petitioners’ claims of “bouncing checks” as a result of Molina’s acts.  But the majority’s ruling is NOT based at all on such claims of bouncing checks, but on the precipitate acts of the comptroller which jeopardized the cash flow of the company.  Where a company’s current cash resources are not enough to pay off all current liabilities and obligations, it is the fundamental role of a comptroller/finance officer, even in the total absence of “specific instructions,” to allocate available funds to the most critical and immediate needs and to see to it that there are funds left over to enable the company to continue operations.  Where available funds are not sufficient to meet all obligations, it is a most basic rule in management to adhere to an order of priorities in the settlement of accounts.  In such situation, payment of lower-priority obligations must necessarily be postponed.  For instance, paying office rentals in advance is not objectionable per se, since such obligation must be paid anyway.  But where such advance payment prevents the company from discharging more pressing obligations like payment of wages, it is precipitate and ill-considered.  And where the actuations of a comptroller/finance officer, instead of keeping the company afloat, almost shipwrecks it upon the shoals of illiquidity and bankruptcy, there is certainly a cause for loss of trust and confidence in the ability and judgment of said comptroller/finance officer.

Lastly, we pass sub silencio Mr. Justice Puno’s submission for the Court to re-examine the NLRC’s ruling on “strained relations.” In view of our holding that there was just cause for the dismissal, such NLRC ruling is now clearly irrelevant in this Decision.

Summation

IN SUM, we rule that the dismissal of private respondent had substantial basis.  But because petitioners have failed to show strict observance of due process they should, in accordance with prevailing jurisprudence, pay indemnity of P1,000.00.  In addition, they should also pay private respondent the unrebutted claims for thirteenth month pay, overtime pay and unpaid salary.  So too, we delete the award of moral damages and attorney’s fees in the absence of proof of bad faith and malice on the part of petitioners.

WHEREFORE, the petition is partially GRANTED.  The dismissal of private respondent is deemed with just cause.  The assailed Resolution is hereby SET ASIDE and ANNULLED.  Instead, petitioners are ordered to pay to private respondent the following sums, viz., (a) indemnity of P1,000.00, (b) thirteenth month pay of P16,083.32, (c) overtime pay of P21,977.56 and (d) unpaid salary of P31,166.66.

SO ORDERED.