Civil Procedure Midterm Cases Batch 2

Civil Procedure WMSU LLB2A 2015 Atty. Floriza P. Sales

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C I V I L P R O C E D U R E C A S E S M I D T E R M S

( B A T C H 2 )

TABLE OF CONTENTS

Sweet Lines Inc., vs Teves; GR No. L-37750 .................................................................................................................. 2

Arquero vs Flojo; GR No. L-68111 .................................................................................................................................. 10

Executive Secretary vs Gordon; GR. No. 134171 ...................................................................................................... 14

SAMMA-LIKHA vs SAMMA Corp.; GR No. 167141 .................................................................................................... 20

Maranaw Hotels vs CA, et al.; GR No. 149660 ............................................................................................................ 32

Sto. Tomas University Hospital vs Surla; GR No. 129718 ..................................................................................... 38

Manchester Devt Corp. vs CA; GR No. 75919 ............................................................................................................ 45

Sun Insurance Office vs Asuncion; GR No. 79937-38.............................................................................................. 50

Sweet Lines Inc., vs Teves; GR No. L-37750 ................................................................................................................ 58

Mijares vs Ranada; GR No. 139325 ................................................................................................................................ 66

Macasaet vs Co; GR No. 156759 ....................................................................................................................................... 85


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SWEET LINES INC., VS TEVES; GR NO. L-37750

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-37750 May 19, 1978

SWEET LINES, INC., petitioner, vs. HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and ROGELIO TIRO, respondents.

Filiberto Leonardo, Abelardo C. Almario & Samuel B. Abadiano for petitioner.

Leovigildo Vallar for private respondents.

SANTOS, J.:

This is an original action for Prohibition with Pre Injunction filed October 3, 1973 to restrain respondent Judge from proceeding further with Civil Case No. 4091, entitled Leovigildo D. Tandog, Jr. and Rogelio Tiro v. Sweet Lines, Inc." after he denied petitioner's Motion to Dismiss the complaint, and the Motion for Reconsideration of said order. 1

Briefly, the facts of record follow. Private respondents Atty. Leovigildo Tandog and Rogelio Tiro, a contractor by professions, bought tickets Nos. 0011736 and 011737 for Voyage 90 on December 31, 1971 at the branch office of petitioner, a shipping company transporting inter-island passengers and cargoes, at Cagayan de Oro City. Respondents were to board petitioner's vessel, M/S "Sweet Hope" bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel was not proceeding to Bohol, since many passengers were bound for Surigao, private respondents per advice, went to the branch office for proper relocation to M/S "Sweet Town". Because the said vessel was already filled to capacity, they were forced to agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." Private respondents alleged that they were, during the trip," "exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits," and that the tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and they were constrained to pay for other tickets. In view thereof, private respondents sued petitioner for damages and for breach of contract of carriage in the alleged sum of P10,000.00 before respondents Court of First Instance of Misamis Oriental. 2


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Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised on the condition printed at the back of the tickets, i.e., Condition No. 14, which reads:

14. It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu. 3

The motion was denied by the trial court. 4 Petitioner moved to reconnsider the order of denial, but no avail. 5 Hence, this instant petition for prohibition for preliminary injunction, 'alleging that the respondent judge has departed from the accepted and usual course of judicial preoceeding" and "had acted without or in excess or in error of his jurisdicton or in gross abuse of discretion. 6

In Our resolution of November 20, 1973, We restrained respondent Judge from proceeding further with the case and required respondent to comment. 7 On January 18, 1974, We gave due course to the petition and required respondent to answer. 8 Thereafter, the parties submitted their respesctive memoranda in support of their respective contentions. 9

Presented thus for Our resolution is a question is aquestion which, to all appearances, is one of first impression, to wit Is Condition No. 14 printed at the back of the petitioner's passage tickets purchased by private respondents, which limits the venue of actions arising from the contract of carriage to theCourt of First Instance of Cebu, valid and enforceable? Otherwise stated, may a common carrier engaged in inter-island shipping stipulate thru condition printed at the back of passage tickets to its vessels that any and all actions arising out of the ocntract of carriage should be filed only in a particular province or city, in this case the City of Cebu, to the exclusion of all others?

Petitioner contends thaty Condition No. 14 is valid and enforceable, since private respndents acceded to tit when they purchased passage tickets at its Cagayan de Oro branch office and took its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol that the condition of the venue of actions in the City of Cebu is proper since venue may be validly waived, citing cases; 10 that is an effective waiver of venue, valid and binding as such, since it is printed in bold and capital letters and not in fine print and merely assigns the place where the action sing from the contract is institution likewise citing cases; 11 and that condition No. 14 is unequivocal and mandatory, the words and phrases "any and all", "irrespective of where it is issued," and "shag" leave no doubt that the intention of Condition No. 14 is to fix the venue in the City of Cebu, to the exclusion of other places; that the orders of the respondent Judge are an unwarranted departure from established jurisprudence governing the case; and that he acted without or in excess of his jurisdiction in is the orders complained of. 12

On the other hand, private respondents claim that Condition No. 14 is not valid, that the same is not an essential element of the contract of carriage, being in itself a different agreement which requires the mutual consent of the parties to it; that they had no say in its preparation, the existence of which they could not refuse, hence, they had no choice but to pay for the tickets and to avail of petitioner's shipping facilities out of necessity; that the carrier "has been exacting too much from the public by inserting impositions in the passage tickets too burdensome to bear," that the condition which was printed in fine letters is an imposition on the riding public and does not bind respondents, citing cases; 13 that while venue 6f actions may be transferred


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from one province to another, such arrangement requires the "written agreement of the parties", not to be imposed unilaterally; and that assuming that the condition is valid, it is not exclusive and does not, therefore, exclude the filing of the action in Misamis Oriental, 14

There is no question that there was a valid contract of carriage entered into by petitioner and private respondents and that the passage tickets, upon which the latter based their complaint, are the best evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and object, are present. As held inPeralta de Guerrero, et al. v. Madrigal Shipping Co., Inc., 15

It is a matter of common knowledge that whenever a passenger boards a ship for transportation from one place to another he is issued a ticket by the shipper which has all the elements of a written contract, Namely: (1) the consent of the contracting parties manifested by the fact that the passenger boards the ship and the shipper consents or accepts him in the ship for transportation; (2) cause or consideration which is the fare paid by the passenger as stated in the ticket; (3) object, which is the transportation of the passenger from the place of departure to the place of destination which are stated in the ticket.

It should be borne in mind, however, that with respect to the fourteen (14) conditions one of which is "Condition No. 14" which is in issue in this case printed at the back of the passage tickets, these are commonly known as "contracts of adhesion," the validity and/or enforceability of which will have to be determined by the peculiar circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced. For, "(W)hile generally, stipulations in a contract come about after deliberate drafting by the parties thereto, ... there are certain contracts almost all the provisions of which have been drafted only by one party, usually a corporation. Such contracts are called contracts of adhesion, because the only participation of the party is the signing of his signature or his 'adhesion' thereto. Insurance contracts, bills of lading, contracts of make of lots on the installment plan fall into this category" 16

By the peculiar circumstances under which contracts of adhesion are entered into namely, that it is drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the other party, in this instance the passengers, private respondents, who cannot change the same and who are thus made to adhere thereto on the "take it or leave it" basis certain guidelines in the determination of their validity and/or enforceability have been formulated in order to that justice and fan play characterize the relationship of the contracting parties. Thus, this Court speaking through Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock Insurance Co., 17 and later through Justice Fernando in Fieldman Insurance v. Vargas, 18 held

The courts cannot ignore that nowadays, monopolies, cartels and concentration of capital endowed with overwhelm economic power, manage to impose upon parties d with them y prepared 'agreements' that the weaker party may not change one whit his participation in the 'agreement' being reduced to the alternative 'to take it or leave it,' labelled since Raymond Saleilles 'contracts by adherence' (contracts d' adhesion) in contrast to those entered into by parties bargaining on an equal footing. Such contracts (of which policies of insurance and international bill of lading are prime examples) obviously cap for greater


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strictness and vigilance on the part of the courts of justice with a view to protecting the weaker party from abuses and imposition, and prevent their becoming traps for the unwary.

To the same effect and import, and, in recognition of the character of contracts of this kind, the protection of the disadvantaged is expressly enjoined by the New Civil Code

In all contractual property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the courts must be vigilant for his protection. 19

Considered in the light Of the foregoing norms and in the context Of circumstances Prevailing in the inter-island ship. ping industry in the country today, We find and hold that Condition No. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons first, under circumstances obligation in the inter-island ship. ping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets, on which Condition No. 14 is Printed in fine letters, and second, Condition No. 14 subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable passengers in different s of the country who, under Condition No. 14, will have to file suits against petitioner only in the City of Cebu.

1. It is a matter of public knowledge, of which We can take judicial notice, that there is a dearth of and acute shortage in inter- island vessels plying between the country's several islands, and the facilities they offer leave much to be desired. Thus, even under ordinary circumstances, the piers are congested with passengers and their cargo waiting to be transported. The conditions are even worse at peak and/or the rainy seasons, when Passengers literally scramble to whatever accommodations may be availed of, even through circuitous routes, and/or at the risk of their safety their immediate concern, for the moment, being to be able to board vessels with the hope of reaching their destinations. The schedules are as often as not if not more so delayed or altered. This was precisely the experience of private respondents when they were relocated to M/S "Sweet Town" from M/S "Sweet Hope" and then any to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits, " because even the latter was filed to capacity.

Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets received from crowded/congested counters, more often than not during rush hours, for conditions that may be printed much charge them with having consented to the conditions, so printed, especially if there are a number of such conditions m fine print, as in this case. 20

Again, it should be noted that Condition No. 14 was prepared solely at the ms of the petitioner, respondents had no say in its preparation. Neither did the latter have the opportunity to take the into account prior to the purpose chase of their tickets. For, unlike the small print provisions of contracts the common example of contracts of adherence which are entered into by the insured in his awareness of said conditions, since the insured is afforded the op to and co the same, passengers of inter-island v do not have the same chance, since their alleged adhesion is presumed only from the fact that they purpose chased the tickets.


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It should also be stressed that slapping companies are franchise holders of certificates of public convenience and therefore, posses a virtual monopoly over the business of transporting passengers between the ports covered by their franchise. This being so, shipping companies, like petitioner, engaged in inter-island shipping, have a virtual monopoly of the business of transporting passengers and may thus dictate their terms of passage, leaving passengers with no choice but to buy their tickets and avail of their vessels and facilities. Finally, judicial notice may be taken of the fact that the bulk of those who board these inter-island vested come from the low-income groups and are less literate, and who have little or no choice but to avail of petitioner's vessels.

2. Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue may be changed or transferred from one province to another by agreement of the parties in writing t to Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid where it practically negates the action of the claimants, such as the private respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote 21 the ends of justice. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause inconvenience to, much less prejudice, petitioner.

Public policy is ". . . that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good ... 22 Under this principle" ... freedom of contract or private dealing is restricted by law for the good of the public. 23 Clearly, Condition No. 14, if enforced, will be subversive of the public good or interest, since it will frustrate in meritorious cases, actions of passenger cants outside of Cebu City, thus placing petitioner company at a decided advantage over said persons, who may have perfectly legitimate claims against it. The said condition should, therefore, be declared void and unenforceable, as contrary to public policy to make the courts accessible to all who may have need of their services.

WHEREFORE, the petition for prohibition is DISMISS. ED. The restraining order issued on November 20, 1973, is hereby LIFTED and SET ASIDE. Costs against petitioner.

Fernando (Chairman), Aquino, Concepcion, Jr., JJ., concur.

Antonio, J., reserves his vote.

Separate Opinions


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BARREDO, J., concurring:

I concur in the dismissal of the instant petition.

Only a few days ago, in Hoechst Philippines, Inc. vs. Francisco Torres, et al., G. R. No. L-44351, promulgated May 18, 1978, We made it clear that although generally, agreements regarding change of venue are enforceable, there may be instances where for equitable considerations and in the better interest of justice, a court may justify the laying of, the venue in the place fixed by the rules instead of following written stipulation of the parties.

In the particular case at bar, there is actually no written agreement as to venue between the parties in the sense contemplated in Section 3 of Rule 4, which governs the matter. I take it that the importance that a stipulation regarding change of the venue fixed by law entails is such that nothing less than mutually conscious agreement as to it must be what the rule means. In the instant case, as well pointed out in the main opinion, the ticket issued to private respondents by petitioner constitutes at best a "contract of adhesion". In other words, it is not that kind of a contract where the parties sit down to deliberate, discuss and agree specifically on all its terms, but rather, one which respondents took no part at all in preparing, since it was just imposed upon them when they paid for the fare for the freight they wanted to ship. It is common knowledge that individuals who avail of common carriers hardly read the fine prints on such tickets to note anything more than the price thereof and the destination designated therein.

Under these circumstances, it would seem that, since this case is already in respondent court and there is no showing that, with its more or less known resources as owner of several inter-island vessels plying between the different ports of the Philippines for sometime already, petitioner would be greatly inconvenienced by submitting to the jurisdiction of said respondent court, it is best to allow the proceedings therein to continue. I cannot conceive of any juridical injury such a step can cause to anyone concerned. I vote to dismiss the petition.

Separate Opinions

BARREDO, J., concurring:

I concur in the dismissal of the instant petition.

Only a few days ago, in Hoechst Philippines, Inc. vs. Francisco Torres, et al., G. R. No. L-44351, promulgated May 18, 1978, We made it clear that although generally, agreements regarding change of venue are enforceable, there may be instances where for equitable considerations and in the better interest of justice, a court may justify the laying of, the venue in the place fixed by the rules instead of following written stipulation of the parties.

In the particular case at bar, there is actually no written agreement as to venue between the parties in the sense contemplated in Section 3 of Rule 4, which governs the matter. I take it that


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the importance that a stipulation regarding change of the venue fixed by law entails is such that nothing less than mutually conscious agreement as to it must be what the rule means. In the instant case, as well pointed out in the main opinion, the ticket issued to private respondents by petitioner constitutes at best a "contract of adhesion". In other words, it is not that kind of a contract where the parties sit down to deliberate, discuss and agree specifically on all its terms, but rather, one which respondents took no part at all in preparing, since it was just imposed upon them when they paid for the fare for the freight they wanted to ship. It is common knowledge that individuals who avail of common carriers hardly read the fine prints on such tickets to note anything more than the price thereof and the destination designated therein.

Under these circumstances, it would seem that, since this case is already in respondent court and there is no showing that, with its more or less known resources as owner of several inter-island vessels plying between the different ports of the Philippines for sometime already, petitioner would be greatly inconvenienced by submitting to the jurisdiction of said respondent court, it is best to allow the proceedings therein to continue. I cannot conceive of any juridical injury such a step can cause to anyone concerned. I vote to dismiss the petition.

Footnotes

1 Rollo, p. 2.

2 Id, P. 12, Annex "B",

3 Id., p. 18, Annex "C".

4 Id., p. 20, Annex "D".

5 Id., pp. 21 an d 26, Annexes "E" and "F"

6 Rollo, p. 5; Petition, paars. 8, 9 &10.

7 Id., p. 30.

8 Id., p. 47.

9 Id., pp. 66 and 76.

10 Manila Company vs. Attorney General 20 Phil 523; Central Azucarera de Tarlac vs. de Loon, 56 Phil 129; Marquez Lain Cay vs. Del Rosario, 55 Phil 622; Abuton vs. Paler, 54 Phil 519, De la Rosa vs. De Borja, 53 Phil 990; Samson vs. Carra 50 Phil 647, See Rollo, p. 77.

11 Central Azucarera de Tarlac vs. de Leon, supra; Air France v C , 18 SCRA, (Sept. 28, 1966), p. 155, Id, pp. 77 and 80.

12 Rollo, pp. 81-81, Memorandum of Petitioner.


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13 Shewaram v PAL Inc., G.R. No. L-20099, July 7, 1966, 17 SCRA 606-612; Mirasol vs. Robert Dollar and Company, 53 Phil 124, See Rollo, p. 79.

14 Rollo. pp- 66-70, Memorandum of Respondents, citing Polytrade Corporation v. Blanco, 30 SCRA 187-191.

15 106 Phil 485 (1959).

16 Paras, Civil Code of the Philippines, Seventh ed., Vol. 1, p. 80.

17 98 Phil 95 (1955).

18 L-24833. 25 SCRA 70 (1968).

19 Civil Code, Art. 24.

20 Condition No. 14 is the last condition printed at the back of the 4 x 6 inches pa tickets.

21 See Nicolas v. Reparations Commission et al G. R. No. L-28649 (21 May 1975), 64 SCRA 111, 116.

22 Ferrazini v. Gsell, 34 Phil 711-712 (1916).

23 Id., p. 712.


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ARQUERO VS FLOJO; GR NO. L-68111


Manila

SECOND DIVISION

G.R. No. L-68111 December 20, 1988

BERNOLI P. ARQUERO, petitioner, vs. HONORABLE NAPOLEON J. FLOJO, Presiding Judge, Branch VI, Regional Trial Court, Second Judicial Region, Aparri, Cagayan and RADIO COMMUNICATION OF THE PHILIPPINES (RCPI), respondents.

Hermenegildo G. Rapanan for petitioner.

Treas, Pagada & Associates for respondents.

PARAS, J.:

On November 27, 1983, the petitioner and private respondent Radio Communications of the Philippines, Inc. (RCPI), entered into a contract for services for the transmission of a telegraphic message thru RCPI's branch office in Aparri, Cagayan to Atty. Eleazar S. Calasan at his office address in Quiapo, Manila. The text of the telegram contract form for transmission (as well as the telegram itself) reads:

Send the following message subject to the condition that the RCPI shall not be liable for any damage howsoever same may arise except for the refund of telegraphic tolls. The sender agrees that as a condition precedent for a cause of action against the RCPI any complaint relative to the transmittal of this telegram must be brought to the attention of the company within three months from date, and that venue thereof shall be in the courts of Quezon City alone and in no other courts.

ATTY. CALASAN ROOM 401 PAYAWAL BLDG. 709 PATERNO, QUIAPO, MANILA

CONGRATULATIONS PREPARE ONE XEROX COPY DECISION SEE YOU BONI'S BIRTHDAY.

BERNOLI


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(Annex "D", P. 16, Rollo)

Atty. Eleazar S. Calasan received a copy of the telegram the next day but he was made to pay the sum of P 7.30 for delivery charges. Thereafter, on November 30, 1983, at the birthday party of Asst. Fiscal Bonifacio Sison in Quezon City, Atty. Calasan confronted and censured the petitioner anent the said telegram. Despite the petitioner's explanation that the telegram had been duly paid for he was branded as a "stingy mayor who cannot even afford to pay the measely sum of P 7.30 for the telegram," (p. 2 Memorandum; p. 55, Rollo) in the presence of many persons.

Thus, the petitioner filed an action for damages against RCPI before the Regional Trial Court of Aparri, Cagayan. RCPI filed a motion to dismiss on the ground of improper venue, contending that pursuant to the service contract, the parties had agreed that the venue of any action which may arise out of the transmittal of the telegram shall be in the courts of Quezon City alone.

On February 13, 1984, the trial court dismissed the case and denied the motion for reconsideration re said dismissal.

Hence, the instant petition. Citing the case of Sweet Lines, Inc. v. Bernardo Teves, et al., 83 SCRA 361, the petitioner claims that the condition with respect to venue appearing on the ready printed form of RCPI's telegram for transmission is void and unenforceable because the petitioner had no hand in its preparation. The Court there held that contracts of adhesion, where the provisions have been drafted only by one party and the only participation of the other party is the signing of his signature or his adhesion thereto, are contrary to public policy as they are injurious to the public or public good.

WE DISAGREE.

The agreement of the parties in the case at bar as to venue is not contrary to law, public order, public policy, morals or good customs.

The parties do not dispute that in the written contract sued upon, it was expressly stipulated that any action relative to the transmittal of the telegram against the RCPI must be brought in the Courts of Quezon City alone. We note that neither party to the contract reserved the right to choose the venue of action as fixed by law (i.e., where the plaintiff or defendant resides, at the election of the plaintiff [par. 'b'], Section 2, Rule 4, Revised Rules of Court), as is usually done if the parties purported to retain that right of election granted by the Rules. Such being the case, it can reasonably be inferred that the parties intended to definitely fix the venue of action, in connection with the written contract sued upon, in the courts of Quezon City only. Section 3, Rule 4, Revised Rules of Court sanctions such stipulation by providing that "by written agreement of the parties the venue of action may be changed or transferred from one province to another." (Bautista vs. de Borja, 18 SCRA 474). As aptly held in the case of Central Azucarera de Tarlac vs. De Leon, 56 Phil. 169,

By said agreement the parties waived the legal venue, and such waiver is valid and legally effective, because it was merely a personal privilege they waived, which is not contrary to public policy or to the prejudice of third persons. It is a


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general principle that a person may renounce any right which the law give unless such renunciation is expressly prohibited or the right conferred is of such nature that its renunciation would be against public policy.

In Sweet Lines, Inc. vs. Teves, et al. supra, the Supreme Court, in declaring the stipulation which limited the venue of actions as void and unenforceable held:

By the peculiar circumstances under which contracts of adhesion are entered intonamely, that it is drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the other party, in this instance the passengers, private respondents, who cannot change the same and who are thus made to adhere hereto on the 'take it or leave it' basiscertain guidelines in the determination of their validity and/or enforceability have been formulated in order to insure that justice and fair play characterize the relationship of the contracting parties.

It is a matter of public knowledge, of which we can take judicial notice, that there is a dearth of and acute shortage in inter-island vessels plying between the country's several islands, and the facilities they offer leave much to be desired. Thus, even under ordinary circumstances, the piers are congested with passengers and their cargo waiting to be transported. The conditions are even worse at peak and/or the rainy seasons, when passengers literally scramble to secure whatever accommodations may be availed of, even through circuitous routes, and/or at the risk of their safety. ... Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets received from crowded/congested counters, more often than not during rush hours, for conditions that may be printed thereon, much less charge them with having consented to the conditions, so printed, especially if there are a number. of such conditions in fine print, as in this case.

It should also be stressed that shipping companies are franchise holders of certificates of public convenience and, therefore, possess a virtual monopoly over the business of transporting passengers between the ports covered by their franchise. This being so, shipping companies, like petitioner, engaged in inter-island shipping, have a virtual monopoly of the business of transporting passengers and may thus dictate their terms of passage, leaving passengers with no choice but to buy their tickets and avail of their vessels and facilities. Finally, judicial notice may be taken of the fact that the bulk of those who board these inter-island vessels come from the low-income groups and are less literate, and who have little or no choice but to avail of petitioner's vessels.

In the instant case, the condition with respect to venue in the telegram form for transmission was printed clearly in the upper front portion of the form. Considering the petitioner's educational attainment (being a lawyer by profession and the Municipal Mayor of Sta. Teresita, Cagayan), he must be charged with notice of the condition limiting the venue to Quezon City, and by affixing his signature thereon, he signified his assent thereto. Thus, the ruling in Sweet Lines, Inc. vs. Teves, et al., is not applicable in this case.


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WHEREFORE, the petition is hereby DISMISSED for lack of merit.

SO ORDERED.

Melencio-Herrrera (Chairperson), Padilla and Regalado, JJ., concur.

Sarmiento J., is on leave.


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EXECUTIVE SECRETARY VS GORDON; GR. NO. 134171


Manila

EN BANC

G.R. No. 134171 November 18, 1998

THE EXECUTIVE SECRETARY and ARTURO C. LOMIBAO, petitioners, vs. RICHARD J. GORDON, ANACLETO M. DIAS, and ORLANDO E. MENDIOLA, respondents.

MENDOZA, J.:

This is a petition to declare respondents Richard J. Gordon, Anacleto M. Diaz, and Orlando E. Mendiola in contempt of court. Respondents Diaz and Mendiola are the counsels of respondent Gordon in G.R. No. 134071, entitled "Richard J. Gordon v. The Hon. Executive Secretary, Felicito Payumo and Senior Superintendent Arturo C. Lomibao." The petitioners in this case are the respondents in that case.

The aforesaid case was filed on June 29, 1998 because of respondent Gordon's apprehension that he would be removed and replaced as chairman of the Subic Bay Metropolitan Authority (SBMA) upon the change of administration from President Fidel V. Ramos to President Joseph Ejercito Estrada. The petition was for prohibition to prevent Gordon's ouster as chairman of the SBMA on the ground that he had a fixed term of office of six years which would not expire until February 10, 2004.

As respondent Gordon apprehended, upon assuming office on June 30, 1998, President Joseph Ejercito Estrada issued Administrative Order No. 1, "recalling, withdrawing, and canceling the appointment of Richard J. Gordon as Chairman of the Subic Bay Metropolitan Authority for a term of six (6) years, dated February 10, 1998, by former President Fidel V. Ramos."

On July 1, 1998, instead of pressing his motion for a temporary restraining order, respondent Gordon fried a "Notice of Withdrawal of [his] Petition." This was done at 9:21 in the morning. At 11:30 A.M. of that same day, he filed a petition for certiorari and prohibition in the Regional Trial Court of Olongapo City, where it was docketed as Civil Case No. 255-0-98.

The filing of the case in the Olongapo court gave rise to the present petition to declare respondents in contempt of court filed by Executive Secretary Ronaldo Zamora and Arturo C.


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Lomibao. The petition is filed against respondents Richard Gordon and his counsel Anacleto M. Diaz and Orlando E. Medina, the latter having filed the case in the Olongapo City Regional Trial Court after filing a notice of withdraw the case pending in this Court. Petitioners charge that "the act of respondents in filing two (2) petitions involving the same issues before this Court and the Regional Trial Court at Olongapo City, both pending, constitutes forum-shopping and contempt of court."

Petitioners cite the following provision of Rule 7, 5 of the Rules of Civil Procedure as basis for their action:

Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.

This provision applies to petitions for certiorari and prohibition.

In its resolution of July 7, 1998, this Court granted respondents' prayer for leave to withdraw their petition in G.R. No. 134071, without prejudice to the disposition of the present petition for contempt.

Respondents deny the charge against them. They contend that they in fact complied with Rule 7, 5 of the Rules of Court by disclosing in the certification of non-forum shopping attached to their petition for certiorari and prohibition before the Regional Trial Court of Olongapo City, the existence and subsequent withdrawal of their petition for prohibition before this Court. They argue that, as held in PCGG v. Sandiganbayan, 1 it is neither forum-shopping nor defiance of a court's authority for a party to file a case in the lower court, even after applying for a similar relief in the Supreme Court, where such party had first sought the withdrawal of the case before the Supreme Court in order to seek recourse before the lower court.


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We find for respondents.

Forum-shopping consists of filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus, it has been held that there is forum-shopping

(1) whenever as a result of an adverse decision in one forum, a party seeks a favorable decision (other than by appeal or certiorari) in another, 2 or

(2) if, after he has filed a petition before the Supreme Court, a party files another before the Court of Appeals since in such case he deliberately splits appeals "in the hope that even as one case in which a particular remedy is sought is dismissed, another case (offering a similar remedy) would still be open," 3 or

(3) where a party attempts to obtain a preliminary injunction in another court after failing to obtain the same from the original court. 4

In Chemphil Export & Import Corp. vs. Court of Appeals, 5 the Court, summarizing the rulings on the issue of what constitutes forum-shopping, stated:

Forum-shopping or the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition, has been characterized as an act of malpractice that is prohibited and condemned as trifling with the Courts and abusing their processes. It constitutes improper conduct which tends to degrade the administration of justice. It has also been aptly described as deplorable because it adds to the congestion of the already heavily burdened dockets of the courts.

Conversely, since a party resorts to forum-shopping in order to increase his chances of obtaining a favorable decision or action, a party cannot be said to have sought to improve his chances of obtaining a favorable decision or action where no unfavorable decision has ever been rendered against him in any of the cases he has brought before the courts. 6

In the case at bar, although respondent Richard J. Gordon filed a petition for prohibition before this Court and, after two days, filed substantially the same petition before the Regional Trial Court of Olongapo City, the fact remains that (1) before filing his petition in the Olongapo court he first flied a notice of withdrawal of his petition which this Court later granted and (2) he withdrew his petition in this Court for the following reason:

Due, however, to the present policy of the Court requiring parties and their counsel to adhere strictly to the hierarchy of courts and in order to obviate any technical objection on this ground, petitioner has deemed it fit to withdraw, as


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he hereby withdraws, the instant petition so that it may be filed in the proper court where it can be ventilated on its merits.

No adverse decision had been rendered by this Court against respondent Gordon for which reason he thought it proper to institute the second action in the trial court. The situation he found himself in is similar to that in which a party, after filing a suit, realizes he made a mistake because the court in which he has brought the case has no jurisdiction. He, therefore, withdraws his action and refiles it in the proper forum. For, indeed, the policy of this Court respecting the hierarchy of courts and consequently prohibiting the filing of a petition in this Court in view of the concurrent jurisdiction with the lower courts has been consistently observed in the absence of any compelling reason for departing from such policy. It is clear from respondents' actions and explanation that they had no intention of disregarding court processes. They in fact complied with Rule 7, 5 of the Rules of Civil Procedure.

This case is distinguishable from E. Razon, Inc. v. The Philippine Port Authority. 7 In the E. Razon case, petitioners, after filing a petition for certiorari with prayer for the issuance of a temporary restraining order in the Supreme Court, filed an hour later a similar petition before the Regional Trial Court and, having been assured of a favorable action by the latter court, then sought the withdrawal of the petition in this Court. Petitioners were found guilty of forum-shopping. "The acts of petitioners constitute a clear case of forum-shopping an act of malpractice that is proscribed and condemned as trifling with the courts and abusing their processes," it was held.

In contrast, in the case at bar, respondent Gordon filed a notice of withdrawal of his petition before this Court prior to the filing of his petition in the Regional Trial Court as the appropriate forum. While it is true he and his counsels did not wait for this Court to act on the "Notice of Withdrawal of Petition" filed by them before filing substantially the same petition in the Regional Trial Court, the Court understands their situation. They were faced with a predicament: Administrative Order I ousting respondent Gordon from the chairmanship of the SMBA had been issued and was in fact about to be enforced hence a writ of preliminary injunction had to be obtained if respondent Gordon was to remain in office.

A similar predicament confronted the parties in PCGG v. Sandiganbayan (Minute Resolution, G.R. Nos. 105808, 105809, and 109592, July 22, 1997), cited by respondents. There, as found by this Court

As regards TMEE's lawyers, they obviously believed that under this Court's dispositions just reviewed, it was their client, instead of the PCGG, that had the right to vote the sequestered shares, prior to the determination by the Sandiganbayan of whether or not there would be dissipation, loss or wastage of corporate assets if TMEE were permitted to vote said shares. They wished their client to exercise that right to vote at the stockholders' meeting of January 10, 1997; but PCIB was adamant in its position that it should be the PCGG which should be accorded the right to vote. Time being of the essence, said lawyers be took themselves to this Court; on December 23, 1996, they filed here an "Urgent Motion for Issuance of a Temporary Restraining Order."


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A few days' reflection, however, apparently made them doubt that the Court would act on their motion because in its Resolution of December 3, 1996 it had said "that no further motion for reconsideration or clarification of the issues treated or, of the dispositions herein made, will be entertained." They thus decided that relief should properly be sought in the Securities & Exchange Commission which in their view had "jurisdiction to act on the subject matter (which) refers to the corporate acts of PCIB and its corporate officers (Garcia Jr. vs. Sandiganbayan 237 SCRA 552) (their cause) not being directly aimed at the PCGG as an entity, but at a private corporation (Holiday Inn [Phils.] vs. Sandiganbayan, et al. 186 SCRA 447]." But first they had to withdraw their motion for TRO before this Court. This they sought to do by filing on January 9, 1997, a "Notice of Withdrawal of 'Urgent Motion for Issuance of a Restraining Order.'" That done, they filed the corresponding petition with the Securities & Exchange Commission to stop the PCIB stockholders' meeting scheduled the following day, as above narrated.

This Court considered the parties' predicament with understanding and overlooked their lapse:

The Court sees no reason to reject this explanation of the TMEE lawyers, or to doubt their good faith. Their explanation is not on its face implausible; it is in truth consistent with the admitted facts on record. Considering that condemnation for contempt should not be made lightly, and that the power to punish for contempt should be exercised on the preservative and not on the vindictive principle, the Court finds no difficulty whatever in reaching the conclusion that there was no willful disregard or defiance of its orders, or forum-shopping, by the TMEE lawyers or, through his permissiveness, by the SEC Hearing Officer.

By no means does the Court by the present decision wish to convey the impression that it will tolerate any act of disrespect or discourtesy. To be sure, respondents could have apologized at the very least for the time of the Court which they had taken and made an effort to explain why they have to refile their case without awaiting the Court's resolution on their notice of withdrawal of the petition. But, exercising restraint lest a contrary action be seen as mere peeve or petulance, and considering this case instead with compassion, bearing in mind that the purpose of contempt is preservative rather than punitive, this Court has chosen to overlook respondents' lapse.

WHEREFORE, the petition for contempt is DISMISSED.

SO ORDERED.

Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Quisumbing, Purisima and Pardo, JJ., concur.

Panganiban, J., took no part.

Martinez, J., is on leave.


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Footnotes

1 G.R. Nos. 105808, 105809, & 109592, Resolution of July 22, 1997.

2 First Philippine International Bank v. Court of Appeals, 252 SCRA 256 (1996); Paredes, Jr. v. Sandiganbayan; 252 SCRA 641 (1996); Washington Distillers, Inc. v. Court of Appeals, 260 SCRA 821 (1996); A Prime Security Services, Inc. v. Drilon, 246 SCRA 439 (1995); Chemphil Export & Import Corp. v. Court of Appeals, 251 SCRA 257 (1995).

3 Borromeo v. Intermediate Appellate Court, 255 SCRA 75 (1996).

4 Fil-Estate Golf and Development, Inc. v. Court of Appeals, 265 SCRA 614 (1996).

5 251 SCRA 257, 291-292 (1995).

6 International Container Terminal Services, Inc. v. Court of Appeals, 249 SCRA 389 (1995).

7 151 SCRA 233 (1987).


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SAMMA-LIKHA VS SAMMA CORP.; GR NO. 167141


Manila

FIRST DIVISION

G.R. No. 167141 March 13, 2009

SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSA (SAMMA-LIKHA), Petitioner, vs. SAMMA CORPORATION, Respondent.

D E C I S I O N

This is a petition for review on certiorari1 of the August 31, 2004 decision2 and February 15, 2005 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 77156.

Petitioner Samahan ng mga Manggagawa sa Samma Lakas sa Industriya ng Kapatirang Haligi ng Alyansa (SAMMA-LIKHA) filed a petition for certification election on July 24, 2001 in the Department of Labor and Employment (DOLE), Regional Office IV.4 It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate labor organization registered with the DOLE; (2) it sought to represent all the rank-and-file employees of respondent Samma Corporation; (3) there was no other legitimate labor organization representing these rank-and-file employees; (4) respondent was not a party to any collective bargaining agreement and (5) no certification or consent election had been conducted within the employer unit for the last 12 months prior to the filing of the petition.

Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of non-forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.5

In an order dated November 12, 2002, med-arbiter Arturo V. Cosuco ordered the dismissal of the petition on the following grounds: (1) lack of legal personality for failure to attach the certificate of registration purporting to show its legal personality; (2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a certificate of non-forum shopping.6

Petitioner moved for reconsideration on November 29, 2001. The Regional Director of DOLE Regional Office IV forwarded the case to the Secretary of Labor. Meanwhile, on December 14, 2002, respondent filed a petition for cancellation of petitioners union registration in the DOLE Regional Office IV.7


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On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion for reconsideration as an appeal, rendered a decision reversing the order of the med-arbiter. He ruled that the legal personality of a union cannot be collaterally attacked but may only be questioned in an independent petition for cancellation of registration. Thus, he directed the holding of a certification election among the rank-and-file employees of respondent, subject to the usual pre-election conference and inclusion-exclusion proceedings.8

On January 23, 2003 or six days after the issuance of said decision, respondent filed its comment on the motion for reconsideration of petitioner, asserting that the order of the med-arbiter could only be reviewed by way of appeal and not by a motion for reconsideration pursuant to Department Order (D.O.) No. 9, series of 1997.9

On February 6, 2003, respondent filed its motion for reconsideration of the January 17, 2003 decision. In a resolution dated April 3, 2003, Secretary Patricia A. Sto. Tomas denied the motion.10

Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE Regional Office IV, issued a resolution revoking the charter certificate of petitioner as local chapter of LIKHA Federation on the ground of prohibited mixture of supervisory and rank-and-file employees and non-compliance with the attestation clause under paragraph 2 of Article 235 of the Labor Code.11 On May 6, 2003, petitioner moved for the reconsideration of this resolution.12

Respondent filed a petition for certiorari13 in the CA assailing the January 17, 2003 decision and April 3, 2003 resolution of the Secretary of Labor. In a decision dated August 31, 2004, the CA reversed the same.14 It denied reconsideration in a resolution dated February 15, 2005. It held that Administrative Circular No. 04-94 which required the filing of a certificate of non-forum shopping applied to petitions for certification election. It also ruled that the Secretary of Labor erred in granting the appeal despite the lack of proof of service on respondent. Lastly, it found that petitioner had no legal standing to file the petition for certification election because its members were a mixture of supervisory and rank-and-file employees.15

Hence, this petition.

The issues for our resolution are the following: (1) whether a certificate for non-forum shopping is required in a petition for certification election; (2) whether petitioners motion for reconsideration which was treated as an appeal by the Secretary of Labor should not have been given due course for failure to attach proof of service on respondent and (3) whether petitioner had the legal personality to file the petition for certification election.

Requirement of Certificate Of Non-Forum Shopping Is Not Required in a Petition For Certification Election


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In ruling against petitioner, the CA declared that under Administrative Circular No. 04-94,16 a certificate of non-forum shopping was required in a petition for certification election. The circular states:

The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint, counterclaim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or applicationwherein a party asserts his claim for relief. (Emphasis supplied)

According to the CA, a petition for certification election asserts a claim, i.e., the conduct of a certification election. As a result, it is covered by the circular.17

We disagree.

The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims, petitions or applications where contending parties litigate their respective positions regarding the claim for relief of the complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a "petition," is not a litigation but an investigation of a non-adversarial and fact-finding character.18

Such proceedings are not predicated upon an allegation of misconduct requiring relief, but, rather, are merely of an inquisitorial nature. The Board's functions are not judicial in nature, but are merely of an investigative character. The object of the proceedings is not the decision of any alleged commission of wrongs nor asserted deprivation of rights but is merely the determination of proper bargaining units and the ascertainment of the will and choice of the employees in respect of the selection of a bargaining representative. The determination of the proceedings does not entail the entry of remedial orders to redress rights, but culminates solely in an official designation of bargaining units and an affirmation of the employees' expressed choice of bargaining agent.19 (Emphasis supplied)

In Pena v. Aparicio,20 we ruled against the necessity of attaching a certification against forum shopping to a disbarment complaint. We looked into the rationale of the requirement and concluded that the evil sought to be avoided is not present in disbarment proceedings.

[The] rationale for the requirement of a certification against forum shopping is to apprise the Court of the pendency of another action or claim involving the same issues in another court, tribunal or quasi-judicial agency, and thereby precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse of court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of the courts. Furthermore, the rule proscribing forum shopping seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue inconvenience upon the other party, and save the precious time of the courts. It also aims to prevent the embarrassing situation of two or more courts or agencies rendering conflicting resolutions or decisions upon the same issue.


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It is in this light that we take a further look at the necessity of attaching a certification against forum shopping to a disbarment complaint. It would seem that the scenario sought to be avoided, i.e., the filing of multiple suits and the possibility of conflicting decisions, rarely happens in disbarment complaints considering that said proceedings are either "taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person." Thus, if the complainant in a disbarment case fails to attach a certification against forum shopping, the pendency of another disciplinary action against the same respondent may still be ascertained with ease.21 (Emphasis supplied)

The same situation holds true for a petition for certification election. Under the omnibus rules implementing the Labor Code as amended by D.O. No. 9,22 it is supposed to be filed in the Regional Office which has jurisdiction over the principal office of the employer or where the bargaining unit is principally situated.23 The rules further provide that where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall be automatically consolidated.24 Hence, the filing of multiple suits and the possibility of conflicting decisions will rarely happen in this proceeding and, if it does, will be easy to discover.

Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is no requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03, series of 2003 which replaced the former.25

Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the requirement for a certificate of non-forum shopping is inapplicable to such a petition.

Treatment of Motion for Reconsideration as an Appeal

The CA ruled that petitioners motion for reconsideration, which was treated as an appeal by the Secretary of Labor, should not have been given due course for lack of proof of service in accordance with the implementing rules as amended by D.O. No. 9:

Section 12. Appeal; finality of decision. The decision of the Med-Arbiter may be appealed to the Secretary for any violation of these Rules. Interloculory orders issued by the Med-Arbiter prior to the grant or denial of the petition, including order granting motions for intervention issued after an order calling for a certification election, shall not be appealable. However, any issue arising therefrom may be raised in the appeal on the decision granting or denying the petition.

The appeal shall be under oath and shall consist of a memorandum of appeal specifically stating the grounds relied upon by the appellant with the supporting arguments and evidence. The appeal shall be deemed not filed unless accompanied by proof of service thereof to appellee.26 (Emphasis supplied)

In accepting the appeal, the Secretary of Labor stated:

[Petitioners] motion for reconsideration of the Med-Arbiters Order dated November 12, 2002 was verified under oath by [petitioners] president Gil Dispabiladeras before Notary Public


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Wilfredo A. Ruiz on 29 November 2002, and recorded in the Notarial Register under Document No. 186, Page No. 38, Book V, series of 2002. On page 7 of the said motion also appears the notation "copy of respondent to be delivered personally with the name and signature of one Rosita Simon, 11/29/02." The motion contained the grounds and arguments relied upon by [petitioner] for the reversal of the assailed Order. Hence, the motion for reconsideration has complied with the formal requisites of an appeal.

The signature of Rosita Simon appearing on the last page of the motion can be considered as compliance with the required proof of service upon respondent. Rosita Simons employment status was a matter that should have been raised earlier by [respondent]. But [respondent] did not question the same and slept on its right to oppose or comment on [petitioners] motion for reconsideration. It cannot claim that it was unaware of the filing of the appeal by [petitioner], because a copy of the indorsement of the entire records of the petition to the Office of the Secretary "in view of the memorandum of appeal filed by Mr. Jesus B. Villamor" was served upon the employer and legal counsels Atty. Ismael De Guzman and Atty. Anatolio Sabillo at the Samma Corporation Office, Main Avenue, PEZA, Rosario, Cavite on December 5, 2002.27 (Emphasis supplied)

The motion for reconsideration was properly treated as an appeal because it substantially complied with the formal requisites of the latter. The lack of proof of service was not fatal as respondent had actually received a copy of the motion. Consequently, it had the opportunity to oppose the same. Under these circumstances, we find that the demands of substantial justice and due process were satisfied.

We stress that rules of procedure are interpreted liberally to secure a just, speedy and inexpensive disposition of every action. They should not be applied if their application serves no useful purpose or hinders the just and speedy disposition of cases. Specifically, technical rules and objections should not hamper the holding of a certification election wherein employees are to select their bargaining representative. A contrary rule will defeat the declared policy of the State1avvphi1.zw+

to promote the free and responsible exercise of the right to self-organization through the establishment of asimplified mechanism for the speedy registration of labor organizations and workers associations,determination of representation status, and resolution of intra and inter-union disputes.28 xxx (Emphasis supplied)

Legal Personality of Petitioner

Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for certification election.

We agree.

LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FED-LC. Subsequently, petitioner as its local chapter was issued its charter certificate


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no. 2-01.29 With certificates of registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:

Section 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules.30

- 0 -

Section 3. Acquisition of legal personality by local chapter. - A local/chapter constituted in accordance with Section 1 of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein. Upon compliance with all the documentary requirements, the Regional Office or Bureau of Labor Relations shall issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor organizations.31

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation of certificate of registration.32 Unless petitioners union registration is cancelled in independent proceedings, it shall continue to have all the rights of a legitimate labor organization, including the right to petition for certification election.

Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality of a labor organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor Relations in its registry of legitimate labor organizations or (b) its legal personality has been revoked or cancelled with finality in accordance with the rules.33

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In a resolution dated April 14, 2003, petitioners charter certificate was revoked by the DOLE. But on May 6, 2003, petitioner moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution revoking petitioners charter certificate had attained finality. However, in this petition, petitioner prayed that its charter certificate be "reinstated in the roster of active legitimate labor [organizations]."34 This cannot be granted here. To repeat, the proceedings on a petition for cancellation of registration are independent of those of a petition for certification election. This case originated from the latter. If it is shown that petitioners legal personality had already been revoked or cancelled with finality in accordance with the rules, then it is no longer a legitimate labor organization with the right to petition for a certification election.

A Final Note

Respondent, as employer, had been the one opposing the holding of a certification election among its rank-and-file employees. This should not be the case. We have already declared that, in certification elections, the employer is a bystander; it has no right or material interest to assail the certification election.35


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[This] Court notes that it is petitioner, the employer, which has offered the most tenacious resistance to the holding of a certification election among its monthly-paid rank-and-file employees. This must not be so, for the choice of a collective bargaining agent is the sole concern of the employees. The only exception to this rule is where the employer has to file the petition for certification election pursuant to Article 258 of the Labor Code because it was requested to bargain collectively, which exception finds no application in the case before us. Its role in a certification election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as that of a mere bystander. It has no legal standing in a certification election as it cannot oppose the petition or appeal the Med-Arbiter's orders related thereto. . .36

WHEREFORE, the petition is hereby GRANTED. Let the records of the case be remanded to the office of origin, the Regional Office IV of the Department of Labor and Employment, for determination of the status of petitioners legal personality. If petitioner is still a legitimate labor organization, then said office shall conduct a certification election subject to the usual pre-election conference.

SO ORDERED.

RENATO C. CORONA Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO* Associate Justice

ANTONIO T. CARPIO** Associate Justice

Acting Chairperson

TERESITA J. LEONARDO-DE CASTRO Associate Justice

ARTURO D. BRION*** Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO Acting Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.


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LEONARDO A. QUISUMBING Acting Chief Justice

Footnotes

* Per Special Order No. 584 dated March 3, 2009.

** Per Special Order No. 583 dated March 3, 2009.

*** Per Special Order No. 570 dated February 12, 2009.

1 Under Rule 45 of the Rules of Court.

2 Penned by Associate Justice Bienvenido L. Reyes and concurred in by Associate Justices Eugenio S. Labitoria (retired) and Fernanda Lampas Peralta of the Special Fourth Division of the Court of Appeals.Rollo, pp. 25-37.

3 Id., pp. 45-47.

4 Docketed as case no. RO400-0107-RU-006; id., p. 26.

5 Id., p. 84.

6 Id.

7 Id. Captioned "In Re: Petition for Cancellation of Charter/Union Registration of Samahan ng mga Manggagawa sa Samma (Samma-Likha), Samma Corporation, Petitioner, versus Samahan ng mga Manggagawa sa Samma (Samma-Likha), Respondent," docketed as RO400-0212-AU-002; id., p. 62.

8 Id., pp. 80-82.

9 Id., p. 27.

10 Id., pp. 77-79.

11 Id. pp. 62-76.

12 Id., p. 28.

13 Under Rule 65; id., p. 25.

14 Id., p. 37.


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15 Id., pp. 6-12.

16 Made effective on April 1, 1994; Pena v. Aparicio, A.C. No. 7298, 25 June 2007, 525 SCRA 444, 451.

17 Rollo, p. 32.

18 Association of the Court of Appeals Employees v. Ferrer-Calleja, G.R. No. 94716, 15 November 1991, 203 SCRA 597, 605, citing Associated Labor Unions (ALU) v. Ferrer-Calleja, G.R. No. 85085, 6 November 1989, 179 SCRA 127, 130-131.

19 Bulakea Restaurant & Caterer v. CIR, 150-A Phil. 445, 453 (1972), citing LVN Pictures, Inc. v. Philippine Musicians Guild (FFW) and CIR, L-12582 and Sampaguita Pictures, Inc. v. Philippine Musicians Guild (FFW) and CIR, L-12598, decided jointly on 28 January 1961, 1 SCRA 132, 135-136.

20 Supra note 16.

21 Id., pp. 454- 455, citations omitted.

22 Before they were amended by D.O. No. 40-03, series of 2003.

23 Section 2, Rule XI of the implementing rules as amended by D.O. No. 9, series of 1997.

24 Id.

25 Id., Section 4; Section 4, Rule VIII in D.O. 40-03. Section 4 of Rule XI of the implementing rules as amended by D.O. No. 9, series of 1997 states:

Section 4. Form and contents of petition. - The petition shall be in writing and under oath and shall contain, among others, the following:

(a) The name of petitioner, its address, and affiliation if appropriate, the date of its registration and number of its certificate of registration if petitioner is a federation, national union or independent union, or the date it was reported to the Department if it is a local/chapter;

(b) The name, address and nature of the employers business;

(c) The description of the bargaining unit;

(d) The approximate number of employees in the bargaining unit;

(e) The names and addresses of other legitimate labor organizations in the bargaining unit;

(f) A statement indicating any of the following circumstances:


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(i) That the bargaining unit is unorganized or that there is no registered collective bargaining agreement covering the employees in the bargaining unit;

(ii) If there exists a duly registered collective bargaining agreement, that the petition is filed within the sixty-day freedom period of such agreement; or

(iii) If another union had been previously certified in a valid certification, consent or run-off election or voluntarily recognized in accordance with Rule X of these Rules, that the petition is filed outside the one-year period from such certification or run-off election and no appeal is pending thereon, or from the time the fact of recognition was entered into the records of such union.

(g) In an organized establishment, the signatures of at least twenty-five (25%) percent of all employees in the appropriate bargaining unit which shall be attached to the petition at the time of its filing; and

(h) Other relevant facts.

On the other hand, Section 4 of Rule VIII of the implementing rules as amended by D.O. No. 40-03, series of 2003 provides:

Section. 4. Form and contents of petition. - The petition shall be in writing, verified under oath by the president of petitioning labor organization. Where the petition is filed by a federation or national union, it shall be verified under oath by the president or its duly authorized representative. The petition shall contain the following:

(a) the name of petitioner, its address, and affiliation if appropriate, the date and number of its certificate of registration. If the petition is filed by a federation or national union, the date and number of the certificate of registration or certificate of creation of chartered local;

(b) the name, address and nature of employers business;

(c) the description of the bargaining unit;

(d) the approximate number of employees in the bargaining unit;

(e) the names and addresses of other legitimate labor unions in the bargaining unit;

(f) A statement indicating any of the following circumstances:


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1) that the bargaining unit is unorganized or that there is no registered collective bargaining agreement covering the employees in the bargaining unit;

2) if there exists a duly registered collective bargaining agreement, that the petition is filed within the sixty-day freedom period of such agreement; or

3) if another union had been previously recognized voluntarily or certified in a valid certification, consent or run-off election, that the petition is filed outside the one-year period from entry of voluntary recognition or conduct of certification or run-off election and no appeal is pending thereon.

g) in an organized establishment, the signature of at least twenty-five percent (25%) of all employees in the appropriate bargaining unit shall be attached to the petition at the time of its filing; and

h) other relevant facts. xxx

26 Section 12, Implementing Rules of Book V, Rule XI, as amended by D.O. No. 9.

27 Rollo, pp. 78-79.

28 Section 1, Implementing Rules of Book V, Rule II, as amended by D.O. No. 9.

29 This was reported to the Bureau of Labor Relations (BLR) on June 26, 2001 in accordance with Rule VI, as amended by D.O. No. 9. Thus, the BLR issued a certificate of creation of local/chapter no. LIKHA-11;rollo, pp. 26, 67.

30 Section 5, Implementing Rules of Book V, Rule V, as amended by D.O. No. 9.

31 Id., Section 3, Rule VI.

32 Tagaytay Highlands Intl Golf Club Inc. v. Tagaytay Highlands Employees Union-PGTWO, 443 Phil. 841, 852 (2003); San Miguel Corporation (Mandaue Packaging Products Plants) v. MPPP-SMPP-SMAMRFU-FFW, G.R. No. 152356, 16 August 2005, 467 SCRA 107, 132.

33 Section 11, paragraph II, Implementing Rules of Book V, Rule XI, as amended by D.O. No. 9.

34 Rollo, p. 12 of petitioners memorandum.

35 SMC Quarry 2 Workers Union-February Six Movement (FSM) Local Chapter No. 1564 v. Titan Megabags Industrial Corporation, G.R. No. 150761, 19 May 2004, 428 SCRA 524,


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528, citing Toyota Motor Phils. Corporation Workers Association (TMPCWA) v. Court of Appeals, G.R. No. 148924, 24 September 2003, 412 SCRA 69.

36 San Miguel Foods, Inc.-Cebu B-Meg Feed Plant v. Laguesma, G.R. No. 116172, 10 October 1996, 263 SCRA 68, 81-82. This was reiterated in Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and Employment, G.R. No. 157146, 29 April 2005, 457 SCRA 730, 742.


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MARANAW HOTELS VS CA, ET AL.; GR NO. 149660


Manila

FIRST DIVISION

G.R. No. 149660 January 20, 2009

MARANAW HOTELS AND RESORT CORP., Petitioner, vs. COURT OF APPEALS, SHERYL OABEL AND MANILA RESOURCE DEVELOPMENT CORP., Respondents.

D E C I S I O N

PUNO, C.J.:

Before the Court is a petition for review on certiorari assailing a resolution issued by the Court of Appeals. The resolution denied the petition for review filed by petitioner Maranaw Hotels and Resort Corp.

The present proceedings emanate from a complaint for regularization, subsequently converted into one for illegal dismissal, filed before Labor Arbiter Madjayran H. Ajan by private respondent Sheryl Oabel.

It appears that private respondent Oabel was initially hired by petitioner as an extra beverage attendant on April 24, 1995. This lasted until February 7, 1997.1 Respondent worked in Century Park Hotel, an establishment owned by the petitioner.

On September 16, 1996,2 petitioner contracted with Manila Resource Development Corporation.3 Subsequently, private respondent Oabel was transferred to MANRED, with the latter deporting itself as her employer.4 MANRED has intervened at all stages of these proceedings and has consistently claimed to be the employer of private respondent Oabel. For the duration of her employment, private respondent Oabel performed the following functions:

Secretary, Public Relations Department: February 10, 1997 - March 6, 1997

Gift Shop Attendant: April 7, 1997 - April 21, 1997

Waitress: April 22, 1997 - May 20, 1997

Shop Attendant: May 21, 1997 - July 30, 19985


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On July 20, 1998, private respondent filed before the Labor Arbiter a petition for regularization of employment against the petitioner. On August 1, 1998, however, private respondent Oabel was dismissed from employment.6Respondent converted her petition for regularization into a complaint for illegal dismissal.

Labor Arbiter Madjayran H. Ajan rendered a decision on July 13, 1999, dismissing the complaint against the petitioner. The decision held:

While complainant alleged that she has been working with the respondent hotel in different department (sic) of the latter on (sic) various capacities (although not all departments are part and parcel of the hotels), complainant never disputed the fact that her work with the same were on a per function basis or on a "need basis" co-terminus with the function she was hired for.Considering that complainant job (sic) with the respondent hotel was on a per function basis or on a "need basis", complainant could not even be considered as casual employee or provisional employee. Respondent hotel consider (sic) complainant, at most, a project employee which does not ripened (sic) into regular employee (sic).7

Private respondent appealed before the National Labor Relations Commission (NLRC). The NLRC reversed the ruling of the Labor Arbiter and held that: (1) MANRED is a labor-only contractor, and (2) private respondent was illegally dismissed.

Of the first holding, the NLRC observed that under the very terms of the service contract, MANRED shall provide the petitioner not specific jobs or services but personnel and that MANRED had insufficient capitalization and was not sufficiently equipped to provide specific jobs.8 The NLRC likewise observed that the activities performed by the private respondent were directly related to and usually necessary or desirable in the business of the petitioner.9

With respect to the termination of private respondents employment, the NLRC held that it was not effected for a valid or just cause and was therefore illegal. The dispositive portion of the ruling reads thus:

WHEREFORE, the decision appealed from is hereby REVERSED. xxxx Respondents Century Park Hotel and Manila Resource Development Corporation are hereby declared jointly and severally liable for the following awards in favor of complainant: 1) her full backwages and benefits from August 1, 1998 up to the date of her actual reinstatement; 2) her salary differentials, share in the service charges, service incentive leave pay and 13th month pay from July 20, 1995 to July 31, 1998.

SO ORDERED.10

Petitioner subsequently appealed before the Court of Appeals. In a resolution, the appellate court dismissed the petition on account of the failure of the petitioner to append the board resolution authorizing the counsel for petitioner to file the petition before the Court of Appeals. The Court of Appeals held:

After a careful perusal of the records of the case, We resolve to DISMISS the present petition on the ground of non-compliance with the rule on certification against forum shopping taking into


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account that the aforesaid certification was subscribed and verified by the Personnel Director of petitioner corporation without attaching thereto his authority to do so for and in behalf of petitioner corporation per board resolution or special power of attorney executed by the latter.11

Petitioner duly filed its motion for reconsideration which was denied by the Court of Appeals in a resolution dated August 30, 2001.12

In the present petition for review, the petitioner invokes substantial justice as justification for a reversal of the resolution of the Court of Appeals.13 Petitioner likewise contends that the filing of a motion for reconsideration with the certificate of non-forum shopping attached constitutes substantial compliance with the requirement.14

There is no merit to the petition.

Well-settled is the rule that the certificate of non-forum shopping is a mandatory requirement. Substantial compliance applies only with respect to the contents of the certificate but not as to its presence in the pleading wherein it is required.

Petitioners contention that the filing of a motion for reconsideration with an appended certificate of non forum-shopping suffices to cure the defect in the pleading is absolutely specious. It negates the very purpose for which the certification against forum shopping is required: to inform the Court of the pendency of any other case which may present similar issues and involve similar parties as the one before it. The requirement applies to both natural and juridical persons.

Petitioner relies upon this Courts ruling in Digital Microwave Corp. v. Court of Appeals15 to show that its Personnel Director has been duly authorized to sign pleadings for and in behalf of the petitioner. Petitioner, however, has taken the ruling in Digital Microwave out of context. The portion of the ruling in Digital Microwaveupon which petitioner relies was in response to the issue of impossibility of compliance by juridical persons with the requirements of Circular 28-91.16 The Courts identification of duly authorized officers or directors as the proper signatories of a certificate of non forum-shopping was in response to that issue. The ruling does not, however, ipso facto clothe a corporate officer or director with authority to execute a certificate of non-forum shopping by virtue of the formers position alone.

Any doubt on the matter has been resolved by the Courts ruling in BPI Leasing Corp. v. Court of Appeals17where this Court emphasized that the lawyer acting for the corporation must be specifically authorized to sign pleadings for the corporation.18 Specific authorization, the Court held, could only come in the form of a board resolution issued by the Board of Directors that specifically authorizes the counsel to institute the petition and execute the certification, to make his actions binding on his principal, i.e., the corporation.19

This Court has not wavered in stressing the need for strict adherence to procedural requirements. The rules of procedure exist to ensure the orderly administration of justice. They are not to be trifled with lightly.


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For this reason alone, the petition must already be dismissed. However, even if this grave procedural infirmity is set aside, the petition must still fail. In the interest of averting further litigation arising from the present controversy, and in light of the respective positions asserted by the parties in the pleadings and other memoranda filed before this Court, the Court now proceeds to resolve the case on the merits.

Petitioner posits that it has entered into a service agreement with intervenor MANRED. The latter, in turn, maintains that private respondent Oabel is its employee and subsequently holds itself out as the employer and offers the reinstatement of private respondent.

Notably, private respondents purported employment with MANRED commenced only in 1996, way after she was hired by the petitioner as extra beverage attendant on April 24, 1995. There is thus much credence in the private respondents claim that the service agreement executed between the petitioner and MANRED is a mere ploy to circumvent the law on employment, in particular that which pertains on regularization.

In this regard, it has not escaped the notice of the Court that the operations of the hotel itself do not cease with the end of each event or function and that there is an ever present need for individuals to perform certain tasks necessary in the petitioners business. Thus, although the tasks themselves may vary, the need for sufficient manpower to carry them out does not. In any event, as borne out by the findings of the NLRC, the petitioner determines the nature of the tasks to be performed by the private respondent, in the process exercising control.

This being so, the Court finds no difficulty in sustaining the finding of the NLRC that MANRED is a labor-only contractor.20 Concordantly, the real employer of private respondent Oabel is the petitioner.

It appears further that private respondent has already rendered more than one year of service to the petitioner, for the period 1995-1998, for which she must already be considered a regular employee, pursuant to Article 280 of the Labor Code:

Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. (Emphasis supplied)


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