Leonen Cases

PHILIPPINE ELECTRIC CORPORATION (PHILEC) vs. COURT OF APPEALS, etc. G.R. No. 168612. December 10, 2014 LEONEN, J Case: Petition for Review on Certiorari of CA Decision Doctrine/s:  Unfair Labor Practice  Collective Bargaining Agreement (CBA)  An appeal to reverse or modify a Voluntary Arbitrator's award or decision must be led before the Court of Appeals within 10 calendar days from receipt of the award or decision. FACTS: PHILEC is a domestic corporation "engaged in the manufacture and repairs of high voltage transformers."Among its rank-and-file employees were Eleodoro V. Lipio and Emerlito C. Ignacio, Sr. former members of the PHILEC Workers' Union (PWU). PWU is a legitimate labor organization and the exclusive bargaining representative of PHILEC's rank-and-file employees. From 01 June 1989 to 31 May 1997, PHILEC and its rank-and-file employees were governed by CBAs providing for the following step increases in an employee's basic salary in case of promotion On 18 August 1997 and with the previous collective bargaining agreements already expired, PHILEC selected Lipio for promotion from Machinist under Pay Grade VIII to Foreman I (of the Tank Finishing Section, Distribution Transformer Manufacturing and Repair) under Pay Grade B. PHILEC served Lipio a memorandum instructing him to undergo training for the position of Foreman I beginning on 25 August 1997. PHILEC undertook to pay Lipio training allowance as provided in the memorandum. Ignacio, Sr., then DT-Assembler with Pay Grade VII, was likewise selected for training for the position of Foreman I. On September 17, 1997, PHILEC and PWU entered into a new CBA, effective retroactively on 01 June 1997 and expiring on 31 May 1999. PWU and PHILEC failed to amicably settle their grievance. Thus, on 21 December 1998, the parties led a submission agreement with the National Conciliation and Mediation Board, submitting that PHILEC's manner of implementing the step increases in connection with the promotion of individual complainants in relation to the provisions of Section 4, Article X of the CBA constitutes unfair labor practice. Voluntary Arbitrator Jimenez directed the parties to file their respective position papers. PWU’s Argument: For PHILEC's failure to apply the schedule of step increases under Article X of the 01 June 1997 CBA, PWU argued that PHILEC committed an unfair labor practice under Article 248 of the Labor Code.

PHILEC’s Argument: It emphasized that it promoted Lipio and Ignacio, Sr. while it was still negotiating a new CBA with PWU. PHILEC applied the "Modified SGV" pay grade scale in computing Lipio's and Ignacio, Sr.'s training allowance. PHILEC and PWU allegedly agreed to implement beginning on 09 May 1997, covered both rank-and-file and supervisory employees. Voluntary Arbitrator Jimenez held in the decision dated 13 August 1999, that PHILEC violated its CBA with PWU. According to Voluntary Arbitrator Jimenez, the 01 June 1997 CBA governed when PHILEC selected Lipio and Ignacio, Sr. for promotion on 18 & 21 August 1997. The provisions of the CBA being the law between the parties, PHILEC should have computed Lipio's and Ignacio, Sr.'s training allowance based on such CBA. Thus, Voluntary Arbitrator Jimenez ordered PHILEC to pay Lipio and Ignacio, Sr. training allowance based on Article X, Section 4 and Article IX of subject CBA. Voluntary Arbitrator Jimenez denied PHILEC's motion for partial reconsideration for lack of merit. PHILEC led a petition for certiorari before the CA. The latter affirmed Voluntary Arbitrator Jimenez's decision. CA denied due course and dismissed PHILEC's petition for certiorari for lack of merit. PHILEC led a motion for reconsideration, which the Court of Appeals denied. Hence, this case. ISSUE: WON Voluntary Arbitrator Jimenez gravely abused his discretion in directing PHILEC to pay Lipio's and Ignacio, Sr.'s training allowance based on Article X, Section 4 of the 01 June 1997 rank-and-file CBA. HELD: Petition Denied. AS TO THE PROPER REMEDY AND JURISDICTION OF THE VOLUNTARY ARBITRATOR The Voluntary Arbitrator's decision dated 13 August 1999 is already final and executory. PHILEC led before the CA a petition for certiorari under Rule 65 of the Rules of Court against Voluntary Arbitrator Jimenez's decision. This was not the proper remedy. Instead, the proper remedy to reverse or modify a Voluntary Arbitrator's or a panel of Voluntary Arbitrators' decision or award is to appeal the award or decision before the CA. A Voluntary Arbitrator or a panel of Voluntary Arbitrators has the exclusive original jurisdiction over grievances arising from the interpretation or implementation of CBAs. Should the parties agree, a Voluntary Arbitrator or a panel of Voluntary Arbitrators shall also resolve the parties' other labor disputes, including unfair labor practices and bargaining deadlocks. (Articles 261 and 262 of the Labor Code) Accordingly, violations of a CBA, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the CBA. For purposes of this article, gross violations of CBA shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

In Oceanic Bic Division (FFW), et al. v. Romero, et al., this Court ruled that "a voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity." Since the office of a Voluntary Arbitrator or a panel of Voluntary Arbitrators is considered a quasi-judicial agency, this court concluded that a decision or award rendered by a Voluntary Arbitrator is appealable before the CA. Under Section 9 of the Judiciary Reorganization Act of 1980, the CA has the exclusive original jurisdiction over decisions or awards of quasi-judicial agencies and instrumentalities. Despite Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary Arbitrator's decision must be appealed before the Court of Appeals within 10 calendar days from receipt of the decision as provided in the Labor Code. Appeal is a "statutory privilege," which may be exercised "only in the manner and in accordance with the provisions of the law." We ruled that Article 262-A of the Labor Code allows the appeal of decisions rendered by Voluntary Arbitrators. Statute provides that the Voluntary Arbitrator's decision "shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties." Being provided in the statute, this 10-day period must be complied with; otherwise, no appellate court will have jurisdiction over the appeal. This absurd situation occurs when the decision is appealed on the 11th to 15th day from receipt as allowed under the Rules, but which decision, under the law, has already become final and executory. Furthermore, under Article VIII, Section 5 (5) of the Constitution, this court "shall not diminish, increase, or modify substantive rights" in promulgating rules of procedure in courts. The 10-day period to appeal under the Labor Code being a substantive right, this period cannot be diminished, increased, or modified through the Rules of Court. The rule, therefore, is that a Voluntary Arbitrator's award or decision shall be appealed before the Court of Appeals within 10 days from receipt of the award or decision. Should the aggrieved party choose to file a motion for reconsideration with the Voluntary Arbitrator, the motion must be led within the same 10-day period since a motion for reconsideration is filed "within the period for taking an appeal." The petition for certiorari was filed beyond the 10-day reglementary period for filing an appeal. We cannot consider PHILEC's petition for certiorari as an appeal. There being no appeal seasonably filed in this case, Voluntary Arbitrator Jimenez's decision became final and executory after 10 calendar days from PHILEC's receipt of the resolution denying its motion for partial reconsideration. Voluntary Arbitrator Jimenez's decision is already "beyond the purview of this Court to act upon." PHILEC must pay training allowance based on the step increases provided in the June 1, 1997 collective bargaining agreement. The insurmountable procedural issue notwithstanding, the case will also fail on its merits. Voluntary Arbitrator Jimenez correctly awarded both Lipio and

Ignacio, Sr. training allowances based on the amounts and formula provided in the CBA. WHEREFORE, the petition for review on certiorari is DENIED. The CA’s decision dated May 25, 2004 is AFFIRMED. SPOUSES NICASIO AND DONELITA SAN PEDRO vs. ATTY. ISAGANI A. MENDOZA A.C. No. 5440. December 10, 2014 LEONEN, J: Case: Complaint for disbarment led by petitioners against respondent Doctrine/s:  Canon 16 of the Code of Professional Responsibility (hold in trust the money of a lawyer’s clients)  Rule 138, Section 25 of the Rules of Court: Unlawful Retention of Client’s Funds  Valid Retaining Lien FACTS: On or about 21 November 1996, complainants engaged the services of respondent to facilitate the transfer of title to property, in the name of Isabel Azcarraga Marcaida, to complainants. Complainants then gave respondent a check for the following:  P68,250.00 for the payment of transfer taxes  P13,800.00 for respondent's professional fee. Respondent failed to produce the title despite complainants' repeated follow-ups. However, respondent still failed to produce the title. Complainants subsequently referred the case to the barangay. Respondent refused to return the amount complainants gave for the transfer taxes. Complainants were then issued a certificate to file action. They also sent a letter demanding the refund of the money intended for the transfer taxes. Respondent still did not return the money. Respondent sent another letter to complainants and promised to settle the transfer of the land title. However, respondent reneged on this promise. Complainants were then forced to obtain a loan to secure the transfer of the title to the property in their names. Respondent’s argument: it was complainants who caused the three-year delay in the transfer of title to complainants' names. He argued that complainants were not able to furnish respondent several important documents:  original copy of the deed of extrajudicial petition;  affidavit of publication with the clippings of the published item in a newspaper of general circulation; and  a barangay certificate from the barangay where the property is located as required by BIR

The present administrative case was referred to the IBP for investigation, report and recommendation. They were required to submit their position papers. Respondent did not submit his position paper. The Investigating Commissioner submitted his findings and recommendation. He found that respondent violated Canon 16, Rules 16.01 and 16.03 of the Code of Professional Responsibility. The Investigating Commissioner found that both checks issued to respondent were encashed despite respondent's failure to facilitate the release of the title in the name of complainants. The Investigating Commissioner recommended the disciplinary action of "censure and warning.” The IBP Board of Governors adopted with modification the ndings of the Investigating Commissioner. It SUSPENDED respondent from the practice of law for 3 months and ordered to Return the amount of P68,250.00 to complainants within 30 days from receipt of notice. The IBP Board of Governors denied respondent's motion for Reconsideration. Respondent requested for a formal hearing but the manifestation and motion was denied by this court. ISSUE: WON respondent is guilty of violating Canon 16 of the Code of Professional Responsibility for failing to hold in trust the money of his clients. HELD: Yes. It has been said that "the practice of law is a privilege bestowed on lawyers who meet the high standards of legal proficiency and morality. Any conduct that shows a violation of the norms and values of the legal profession exposes the lawyer to administrative liability." An examination of the records reveals that respondent violated Canon 16 of the Code of Professional Responsibility. Similarly, Rule 138, Section 25 of the Rules of Court provides: Section 25. Unlawful retention of client's funds; contempt. — When an attorney unjustly retains in his hands money of his client after it has been demanded, he may be punished for contempt as an officer of the Court who has misbehaved in his official transactions; but proceedings under this section shall not be a bar to a criminal prosecution. A lawyer's duty under Canon 16 of the Code of Professional Responsibility is clear: The fiduciary nature of the relationship between counsel and client imposes on a lawyer the duty to, account for the money or property collected or received for or from the client, thus when a lawyer collects or receives money from his client for a particular purpose (such as for filing fees, registration fees, transportation and office expenses), he should promptly account to the client how the money was spent. If he does not use the money for its intended purpose, he must immediately return it to the client. His failure either to render an accounting or to return the money (if the intended purpose of the money does not materialize) constitutes a blatant disregard of Rule 16.01 of the Code of Professional Responsibility.

[The lawyer's] failure to return the client's money upon demand gives rise to the presumption that he has misappropriated it for his own use to the prejudice of and in violation of the trust reposed in him by the client. Complainants' alleged failure to provide the necessary documents to effect the transfer does not justify his violation of his duty under the Code of Professional Responsibility. Respondent's assertion of a valid lawyer's lien is also untenable. A valid retaining lien has the following elements: (1) lawyer-client relationship; (2) lawful possession of the client's funds, documents and papers; and (3) unsatisfied claim for attorney's fees. Respondent did not satisfy all the elements of a valid retaining lien. He did not present evidence as to an unsatisfied claim for attorney's fees. The enumeration of cases he worked on for complainants remains unsubstantiated. When there is no unsatisfied claim for attorney's fees, lawyers cannot validly retain their client's funds or properties. Furthermore, assuming that respondent had proven all the requisites for a valid retaining lien, he cannot appropriate for himself his client's funds without the proper accounting and notice to the client. MARIA THERESA G. GUTIERREZ vs. COA AND AUDITOR NARCISA DJ JOAQUIN G.R. No. 200628. January 13, 2015 LEONEN, J Case: Petition for Certiorari under Rule 65 of the Rules of Court assailing the June 5, 2008 withholding order and the Commission on Audit's January 31, 2012 decision holding Maria Theresa G. Gutierrez (Gutierrez) liable for the P10,105,687.25 that was lost through robbery. Doctrine/s:  Due Process in Administrative Proceedings  Accountable Officers  A cashier who is found to have been negligent in keeping the funds in his or her custody cannot be relieved from his or her accountability for amounts lost through robbery.  Test of Negligence FACTS: Gutierrez is a Cash Collecting Officer, with the designation of Cashier III at National Food Authority-National Capital Region, National District Office (NFA-NCR, NDO). On May 30, 2008, she had collections amounting to P9,390,834.00. On that day, she placed the collections in a wooden cabinet. The next day, Gutierrez's collections amounted to P1,505,625.00. Of that amount, P714,852.75 and an undeposited amount of P0.50 from March 2008 were placed in a wooden cabinet. The rest was placed in the safety vault.

The total undeposited collection as of March 31, 2008 was P10,896,459.50. Of that amount, P10,105,687.25 was placed in the "pearless" boxes in a wooden cabinet and P790,772.25 was placed in the safety vault. On June 1, 2008, at about 1:35 a.m., armed men in military uniforms with PNP identifications entered the NFA-NCR, NDO. The armed men disarmed NFA-NCR, NDO's security guards and took Gutierrez's undeposited collections. Lockheed Detective and Watchman Agency, Inc. was NFA-NCR, NDO's contracted security agency. The security guards’ affidavits stated that: armed men entered the NFA-NCR, NDO compound after they had been disarmed, threatened, and tied up. The security guards immediately reported the incident to the Valenzuela Police Station. COA State Auditor Joaquin, issued a demand letter to Gutierrez. Gutierrez was informed that she must immediately produce the missing funds amounting to P10,105,686.75. She was also ordered to submit within 72 hours a written explanation why such shortage occurred. He also issued a withholding order, addressed Musngi, Manager of NFA, North District Office. Musngi was informed that upon examination of Gutierrez's account on June 1, 2008, it was established that there was a P10,105,686.75 shortage in Gutierrez's accountabilities. Pursuant to Section 37 of Presidential Decree No. 1445, Musngi was directed to withhold Gutierrez's salaries and other emoluments so these could be applied to the satisfaction of the shortage. Gutierrez’ affidavit stated: she had been serving as National Food Authority's Cash Collecting Officer since 1985. Her office was located at the far end of the National Food Authority building. That was where the 6 "pearless" boxes and the cabinet where she kept her collections could be found. Since April 2008 or the start of the heavy operations, she had been putting some of the money in the "pearless" box, because of the volume, which she has to carry and keep safe at the cabinet inside. With the volume of money, the vault has not enough space to accommodate all of it. State Auditor Joaquin denied Gutierrez's appeal of the withholding order. State Auditor Joaquin informed Gutierrez that there was already a prima facie case for malversation against her under Article 217 of the Revised Penal Code. Atty. Rola, Jr., Director of the NFA- Enforcement, Investigation and Prosecution Department, submitted a memorandum addressed to the Administrator Navarro. He found that the security agency was solidarily liable with security guard Romeo Casta for the amount lost. He also found that Gutierrez, by keeping her collections in unsecured "pearless" boxes and not in a vault, was grossly negligent in safekeeping her collections.

Similar incidents of robbery at different NFA Offices involving Lockheed Detective and Watchman Agency, Inc. were reported between 2006 and 2008. COA Director Nabua issued a decision denying Gutierrez's appeal and expressing his agreement with the issuance of the withholding order. Gutierrez led a motion for reconsideration of the September 11, 2008 decision of Director Nabua on the ground that he did not give her a chance to file a memorandum of appeal before submission of the case for resolution. She also cited reversible error in upholding State Auditor Joaquin's order despite lack of factual and legal bases as ground for her motion. COA denied her request for relief from money accountability. It affirmed that Ms. Gutierrez shall be liable to pay to the NFA the missing amount of P10,105,687.25. This is without prejudice to the right of the NFA- NCR, NDO to proceed against Lockheed Detective and Watchman Agency, Inc. for the indemnification of the loss as security services provider to the NFA-NCR, NDO, Valenzuela City. ISSUES: 1) WON Gutierrez's due process rights were violated when COA decided her appeal without requiring her to file an appeal memorandum, and 2) WON Gutierrez is liable for the amounts lost through a robbery. HELD: 1) NO. Petitioner's arguments and the issues she raised are sufficiently expressed in her affidavit submitted to COA, her MR of the COA Director's decision, and her petition and memorandum submitted to this court. Even though petitioner was not able to file an appeal memorandum, she was able to state her substantive defenses in the pleadings she filed before the COA and this court. According to petitioner, the money that was lost through robbery was not a result of her negligence. She kept the money in "pearless" boxes for practical and not for malicious reasons. The decisions of the State Auditor, the Commission on Audit Director, and the Commission on Audit had considered these facts and defenses before they made conclusions against petitioner. Therefore, petitioner cannot say that her due process rights were violated for the lack of order to file an appeal memorandum. The right to counsel under Section 12 (1) of Article III of the Constitution applies in criminal proceedings, but not in administrative proceedings. It is a right given to persons accused of an offense during criminal investigation. Any proceeding conducted by an administrative body is not part of the criminal investigation or prosecution. In an administrative proceeding, a respondent has the option of engaging the services of counsel or not. This is clear from the provisions of Section 32, Article VII of Republic Act No. 2260 (otherwise known as the Civil Service Act) and Section 39, paragraph 2, Rule XIV (on

discipline) of the Omnibus Rules Implementing Book V of Executive Order No. 292 (otherwise known as the Administrative Code of 1987). Thus, the right to counsel is not always imperative in administrative investigations because such inquiries are conducted merely to determine whether there are facts that merit disciplinary measure against erring public officers and employees, with the purpose of maintaining the dignity of government service. As such, the hearing conducted by the investigating authority is not part of a criminal prosecution. In an administrative proceeding, if a person is found administratively liable, the corresponding penalty is imposed primarily to preserve public trust and protect the integrity of public service. Petitioner is not being accused of or investigated for a crime. The COA’s withholding order and its denial of petitioner's request for relief from shortage were issued after it had made a finding that the money entrusted to petitioner was lost. Any proceeding conducted prior to these issuances was for the purpose of determining if petitioner's salaries should be withheld or if petitioner should be relieved from her liability as a cashier. Moreover, petitioner's relief from accountability may be decided by the Commission on Audit at the first instance. This court in Ang Tibay v. Court of Industrial Relations ruled that administrative due process requires only the following: (a) The party should be allowed to present his or her own case and submit supporting evidence; (b) The deciding tribunal must consider the party's evidence; (c) There is evidence to support the tribunal's decision; (d) The evidence supporting the tribunal's decision must be substantial or such "relevant evidence as a reasonable mind might accept as adequate to support a conclusion;" (e) The tribunal's decision was based on the evidence presented or the records of the case disclosed to the parties; (f) The tribunal's decision must be based on the judges' independent consideration of the facts and law governing the case; and (g) The tribunal's decision must be rendered such that the issues of the case and the reasons for the decisions are known to the parties. In sum, due process in administrative proceedings does not necessarily require a trial type of hearing. Neither does it require an exchange of pleadings between or among the parties. Due process is satisfied if the party who is properly notified of allegations against him or her is given an opportunity to defend himself or herself against those allegations, and such defense was considered by the tribunal in arriving at its own independent conclusions. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain one's side, or an opportunity to seek a reconsideration of the action or ruling complained of.

ADMINISTRATIVE DUE PROCESS CANNOT BE FULLY EQUATED WITH DUE PROCESS IN ITS STRICT JUDICIAL SENSE FOR IT IS ENOUGH THAT THE PARTY IS GIVEN THE CHANCE TO BE HEARD BEFORE THE CASE AGAINST HIM IS DECIDED. 2) Yes. A person who is negligent in keeping the funds cannot be relieved from liability. Petitioner is negligent because she failed to use "that reasonable care and caution which an ordinarily prudent person would have used in the same situation." A cashier in her position would have used the vault to keep her collections. Petitioner failed to do this. Her negligence is made more pronounced by the fact that the collections kept in the vault were not taken by the robbers. Petitioner insists that the space in the vault was not enough to accommodate all her collections. She should have requested an additional vault wherein she could safely keep her collections. She could also have set aside time to deposit her collections for the day considering the amount of cash she had been collecting, in order to prevent its accumulation. As a cashier for the National Food Authority, petitioner qualified as an accountable officer under Presidential Decree No. 1445. Accountable officers are government officers whose duties require them to possess or be in custody of government funds or properties. They are in charge of the safekeeping of the funds or properties under their custody. Presidential Decree No. 1445 makes cashiers liable for the value of the money or property in their custody in case they were lost because of negligence or unlawful deposit, use, or application. The test of negligence is stated in Picart v. Smith, Jr.: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. ______________________________________________________________________________