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Republic of the Philippines
SUPREME COURT

FIRST DIVISION

G.R. No. 153180 September 2, 2005

MANILA ELECTRIC COMPANY (MERALCO), Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MANUEL H. DELOS¹ SANTOS, Respondent.

DECISION

QUISUMBING, J.:

For review on certiorari is the Decision,² dated September 25, 2001, of the Court of Appeals in CA-G.R. SP No. 61445 affirming the Resolution³ dated April 26, 2000, of the National Labor Relations Commission (NLRC), which upheld the Decision⁴ dated July 12, 1999, of the Labor Arbiter finding private respondent’s dismissal illegal and ordering his reinstatement with backwages. Likewise impugned is the Resolution⁵ dated April 29, 2002, of the Court of Appeals denying petitioner’s motion for reconsideration of its assailed decision.

The antecedent facts, as summarized by the Court of Appeals, are as follows:

The petitioner Manila Electric Company (MERALCO) hired private respondent Manuel H. Delos Santos as a collector on December 6, 1978. On May 11, 1990, about twelve years later, he was terminated for allegedly misappropriating company funds while serving as accounts investigator.

The controversy started on August 6, 1988, when private respondent was assigned to collect the Found Connected Account (FC account), with Account No. 27533-1694-16 located at 3rd Road, De Mesa Compound, Ilaya, Alabang, Muntinlupa, Metro Manila in the name of Orlando De Guzman, whose electric service was disconnected.

Before the Labor Arbiter, private respondent alleged that on August 6, 1988 at 3:00 p.m., he collected and received from one Mrs. Vivien De Guzman, the sum of ₱2,510 as payment for electric bill and reconnection fee outstanding in the account of Orlando De Guzman. Respondent claimed he issued official receipt numbers 251258-87 and 251259-87, without counting the money tendered. When he submitted the duplicate copies of the receipts in the office, he discovered the payment was ₱30 short. Thus, he noted on the duplicate copies of the receipts, the word "cancelled," and on the control billing assigned sheet, "attended contacted Mrs." He further stated that at around 4:30 p.m. the same day, he went back to Mrs. De Guzman’s house to return the insufficient payment. However, Mrs. De Guzman was not home and so he gave the money to the latter’s housemaid, Victoria Arigoring.

In his pleadings, private respondent also alleged that sometime in 1988, a certain customer of petitioner, one Danilo Santos, had an overdue account because of differential billing. Since the account was within his area, he went to said customer’s place to collect the outstanding balance. He was informed that payment had been remitted to a certain Mr. Bernardo at petitioner’s Alabang branch office. Thus, private respondent noted in the receipt that the amount had been so remitted to Mr. Bernardo.

Private respondent alleged that he likewise came to know of some reimbursements of petty cash involving another collection officer and that he was surprised to learn that he was thereafter implicated in several collection cases. On September 6, 1988, he was placed under preventive suspension and on September 8, 1988, was summoned by petitioner’s legal service department regarding several complaints against him.

Meanwhile, sometime in January 1989, the electric service of Orlando De Guzman was disconnected. This prompted Mrs. De Guzman to file a complaint with petitioner’s Alabang Branch claiming that she had already settled the account. The head of the branch referred the complaint to their internal audit division for investigation.

On March 3, 1989, the audit report found private respondent liable for misappropriation of funds. The report alleged that Mrs. De Guzman made a statement on April 3, 1989 before petitioner’s legal services department that on August 6, 1988, she tendered her payment of the FC account to private respondent.

Thereafter, on April 8, 1989, a notice of investigation was served upon private respondent requesting him to appear before a formal administrative investigation to answer the charges against him. After private respondent and the administrative officer of the Alabang branch office had submitted their respective sworn statements, the committee issued a report finding private respondent guilty of misappropriation. Forthwith, on May 11, 1990, petitioner served on private respondent a notice of termination. Thus, the latter filed a complaint for illegal dismissal.

To support his claim, private respondent presented the sworn statement dated May 8, 1989, of Mrs. De Guzman attesting that private respondent came back to her house on the same day to return the insufficient payment. Mrs. De Guzman further stated that since she was not home at the time, it was her housemaid, Victoria Arigoring, who actually received the same. However, the housemaid unfortunately forgot to immediately surrender the money and only did so belatedly when she had returned from the province. Arigoring also executed a sworn statement dated November 14, 1995, corroborating the statement of Mrs. De Guzman. When presented as witness, Arigoring testified that private respondent indeed returned on the same day the money he collected from Mrs. De Guzman.

After hearing the parties, the Labor Arbiter ruled for private respondent, thus:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the complainant, Manuel H. [D]elos Santos, by the respondent Manila Electric Company, was illegal and the respondent is hereby ordered to reinstate immediately the aforesaid employee to his former position or an equivalent position in the respondent company, without loss of seniority rights and other privileges.

Furthermore, the respondent is hereby ordered to pay the complainant the amount of SEVEN HUNDRED TWENTY-FOUR THOUSAND THREE HUNDRED FIFTY PESOS (₱724,350.00), representing his backwages for the period from May 11, 1990 up to July 11, 1999, it being understood that the aforesaid amount of backwages awarded to the complainant under this Decision shall be subject to a further adjustment up to the reinstatement of the aforesaid employee.

Likewise, the respondent is ordered to pay the complainant attorney’s fees equivalent to ten percent (10%) of the total monetary award.

The claims of the complainant for moral and exemplary damages against the respondent are hereby DISMISSED for lack of merit.⁶

Aggrieved by the Labor Arbiter’s decision, petitioner appealed to the NLRC. However, finding no merit in petitioner’s arguments, the NLRC affirmed the assailed decision except with regard to the award of attorney’s fees, which was deleted. Thus, decreed the NLRC:

WHEREFORE, in the light of the foregoing, the appealed Decision of Labor Arbiter Francisco A. Robles dated July 12, 1999 is hereby AFFIRMED en toto.

SO ORDERED.⁷

The petitioner’s motion for reconsideration was denied. On appeal, the Court of Appeals likewise found no reason to disturb the NLRC’s resolution, which affirmed the decision of the Labor Arbiter. The appellate court dismissed the petition thus:

WHEREFORE, premises considered, and finding no grave abuse of discretion on the part of public respondent National Labor Relations Commission, the assailed resolutions of the NLRC are hereby AFFIRMED.

SO ORDERED.⁸

Petitioner’s motion for reconsideration of the said decision was likewise denied by the Court of Appeals for lack of merit. Undeterred, petitioner now comes to this Court on a petition for review on certiorari essentially raising the following issues:

(a) Whether the Honorable Court of Appeals erred in arriving at the conclusion that private respondent did not commit misappropriation, thereby rendering his dismissal unjustified and illegal; and

(b) Whether the Honorable Court of Appeals erred in affirming the award of attorney’s fees in favor of private respondent.

The core issue is the validity of private respondent’s dismissal by the petitioner. Petitioner insists the conclusion arrived at by the Court of Appeals that private respondent did not commit misappropriation of company funds is absurd in the light of two established facts. First, in view of the alleged return of the money to Mrs. De Guzman’s housemaid, private respondent should have instinctively demanded the corresponding surrender of the official receipts he issued. Second, since payment was insufficient, private respondent should not have reconnected the electric service, but he did. Petitioner likewise asserts that the Court of Appeals erred in affirming the award of attorney’s fees for lack of legal basis.

For his part, private respondent maintains that his return of the money to Mrs. De Guzman was testified to by the latter’s housemaid, Victoria Arigoring. Moreover, he claims Arigoring’s testimony was corroborated by Mrs. De Guzman herself who stated that she actually received the money from Arigoring, albeit belatedly. As to the second issue, private respondent posits that petitioner’s disregard of his valid defense, despite overwhelming evidence in support thereof, constitutes bad faith entitling him to the award of attorney’s fees.

We find the petition bereft of merit, and rule in favor of private respondent.

With regard to the first issue, we are convinced that private respondent did not misappropriate the amount of ₱2,540.90 he collected from Mrs. De Guzman. His actual return on the same day of the money was established beyond a shadow of doubt. Under cross-examination, witness Victoria Arigoring testified candidly and straightforwardly as follows:

ATTY. MAGPAYO

You stated here that Mr. [D]elos Santos returned to the house of Mrs. De Guzman. Do you recall what time he came back to the house on that particular day?

WITNESS

That same day at about 4:00 P.M.

ATTY. MAGPAYO

Do you know why he came back to the house of Mrs. De Guzman?

WITNESS

Yes. He returned the money to me because … he cancelled his copy of the receipt and I was advised to tell Mrs. [De] Guzman to return the OR to their office.⁹

The foregoing testimony was even corroborated by Mrs. De Guzman in her sworn affidavit dated May 8, 1989.

We are inclined to give Arigoring’s testimony the weight and credence the Labor Arbiter gave it. She is a disinterested witness who had no stake whatsoever in the outcome of this case. Arigoring and Mrs. De Guzman had no relation to private respondent. We find no reason why they would risk criminal sanction for perjury and waste time and energy to lie in behalf of private respondent, both were only testifying to the truth.

The petitioner insists private respondent misappropriated the ₱2,540.90 by writing the word "cancelled" on the face of the duplicate yellow copies of the receipts and then writing on the control billing assigned sheet the words "attended contacted Mrs." To our mind, far from incriminating private respondent, these acts support private respondent’s claim that he did not misappropriate but indeed returned the money. It was private respondent’s way of rectifying an error, by canceling the receipts he mistakenly issued for an insufficient payment and thereafter returning on the very same day the money he received.

We find a flaw in petitioner’s assertion that private respondent’s reconnecting the electric service, although the payment was insufficient, was an indication that he misappropriated petitioner’s funds. As pointed out by the Labor Arbiter, petitioner did not adduce any evidence that private respondent caused the said reconnection. The assertion has no probative value unless proven. When private respondent cancelled the receipts, the petitioner should have been put on notice that there was something unusual, before it allowed the reconnection.

In dismissal cases, the employer carries the burden of proving that the dismissal is in order. Article 277 (b) of the Labor Code states in no uncertain terms:

…The burden of proving that the termination was for a valid or authorized cause shall rest on the employer.…

Thus, where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal.¹⁰ Time and again we have said that for an employee’s dismissal to be valid, two essential requisites must be met: (a) the dismissal must be for a valid cause; and (b) the employee must be afforded due process. There being no valid cause proved by petitioner for the dismissal of private respondent, the dismissal shall be deemed illegal. Here, the first requirement is lacking.

Finally, as to the issue of attorney’s fees, we hold that private respondent is entitled to an award of a reasonable amount of attorney’s fees pursuant to Article 2208¹¹ of the Civil Code. In view of the attendant circumstances in this case, the award of attorney’s fees made by the Labor Arbiter consisting of 10% of the total monetary award is reasonable, and should be upheld.

WHEREFORE, the petition is DENIED. The assailed decision dated September 25, 2001, and resolution dated April 29, 2002, of the Court of Appeals in CA-G.R. SP No. 61445 are hereby AFFIRMED with MODIFICATION. The award of attorney’s fees equivalent to ten percent (10%) of the total monetary award is reinstated. Costs against the petitioner.

SO ORDERED.

LEONARDO A. QUISUMBING

Associate Justice

The Lawphil Project - Arellano Law Foundation

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