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G.R. No.

196036, October 23, 2013

ELIZABETH M. GAGUI, Petitioners, v. SIMEON DEJERO AND TEODORO R.


PERMEJO, Respondent.

DECISION

SERENO, C.J.:

This is a Rule 45 Petition1 dated 30 March 2011 assailing the Decision2 and
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 104292, which affirmed the
Decision4 of the National Labor Relations Commission (NLRC) in NLRC Case No. OCW-
RAB-IV-4-392-96-RI, finding petitioner Elizabeth M. Gagui solidarily liable with the
placement agency, PRO Agency Manila, Inc., to pay respondents all the money claims
awarded by virtue of their illegal dismissal.

The antecedent facts are as follows:

On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed separate
Complaints5 for illegal dismissal, nonpayment of salaries and overtime pay, refund of
transportation expenses, damages, and attorney’s fees against PRO Agency Manila, Inc.,
and Abdul Rahman Al Mahwes.

After due proceedings, on 7 May 1997, Labor Arbiter Pedro Ramos rendered a
Decision,6 the dispositive portion of which reads:chanRoblesvirtualLawlibrary

WHEREFORE, ALL FOREGOING CONSIDERED, judgment is hereby rendered ordering


respondents Pro Agency Manila, Inc., and Abdul Rahman Al Mahwes to jointly and
severally pay complainants, as follows:

a) US$4,130.00 each complainant or a total of US$8,260.00, their unpaid salaries from


July 31, 1992 up to September 1993, less cash advances of total of SR11,000.00,
or its Peso equivalent at the time of payment;
b) US$1,032.00 each complainant for two (2) hours overtime pay for fourteen (14)
months of services rendered or a total of US$2,065.00 or its Peso equivalent at the
time of payment;
c) US$2,950.00 each complainant or a total of US$5,900.00 or its Peso equivalent at
the time of payment, representing the unexpired portion of their contract;
d) Refund of plane ticket of complainants Teodoro Parejo and Simeon Dejero from
Saudi Arabia to the Philippines, in the amount of P15,642.90 and P16,932.00
respectively;
e) Refund of excessive collection of placement fees in the amount of P4,000.00 each
complainant, or a total of P8,000.00;
f) Moral and exemplary damages in the amount of P10,000.00 each complainant, or a
total of P20,000.00;
g) Attorney’s fees in the amount of P48,750.00.

SO ORDERED.

Pursuant to this Decision, Labor Arbiter Ramos issued a Writ of Execution7 on 10 October
1997. When the writ was returned unsatisfied,8 an Alias Writ of Execution was issued, but
was also returned unsatisfied.9

On 30 October 2002, respondents filed a Motion to Implead Respondent Pro Agency


Manila, Inc.’s Corporate Officers and Directors as Judgment Debtors. 10 It included
petitioner as the Vice-President/Stockholder/Director of PRO Agency, Manila, Inc.

After due hearing, Executive Labor Arbiter Voltaire A. Balitaan issued an Order11 on 25
April 2003 granting respondents’ motion, to wit:chanRoblesvirtualLawlibrary

WHEREFORE, the motion to implead is hereby granted insofar as Merlita G. Lapuz and
Elizabeth M. Gagui as parties-respondents and accordingly held liable to complainant
jointly and solidarily with the original party-respondent adjudged liable under the Decision
of May 7, 1998. Let 2nd Alias Writ of Execution be issued for the enforcement of the
Decision consistent with the foregoing tenor.

SO ORDERED.

On 10 June 2003, a 2nd Alias Writ of Execution was issued,12 which resulted in the
garnishment of petitioner’s bank deposit in the amount of P85,430.48. 13 However, since
the judgment remained unsatisfied, respondents sought the issuance of a third alias writ
of execution on 26 February 2004.14

On 15 December 2004, Executive Labor Arbiter Lita V. Aglibut issued an Order 15 granting
respondents’ motion for a third alias writ. Accordingly, the 3rd Alias Writ of
Execution16 was issued on 6 June 2005, resulting in the levying of two parcels of lot
owned by petitioner located in San Fernando, Pampanga. 17

On 14 September 2005, petitioner filed a Motion to Quash 3rd Alias Writ of


Execution;18 and on 29 June 2006, a Supplemental Motion to Quash Alias Writ of
Execution.19 In these motions, petitioner alleged that apart from not being made aware
that she was impleaded as one of the parties to the case, 20 the dispositive portion of the
7 May 1997 Decision (1997 Decision) did not hold her liable in any form
whatsoever.21 More importantly, impleading her for the purpose of execution was
tantamount to modifying a decision that had long become final and executory. 22

On 26 June 2006, Executive Labor Arbiter Lita V. Aglibut issued an Order 23 denying
petitioner’s motions on the following grounds: (1) records disclosed that despite having
been given sufficient notices to be able to register an opposition, petitioner refused to do
so, effectively waiving her right to be heard;24 and (2) under Section 10 of Republic Act
No. 8042 (R.A. 8042) or the Migrant Workers and Overseas Filipinos Act of 1995,
corporate officers may be held jointly and severally liable with the placement agency for
the judgment award.25

Aggrieved, petitioner appealed to the NLRC, which rendered a Decision26 in the following
wise:chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the appeal of the respondent Elizabeth M. Gagui is


hereby DENIED for lack of merit. Accordingly, the Order of Labor Arbiter Lita V. Aglibut
dated June 26, 2006 is AFFIRMED.

SO ORDERED.

The NLRC ruled that “in so far as overseas migrant workers are concerned, it is R.A. 8042
itself that describes the nature of the liability of the corporation and its officers and
directors. x x x [I]t is not essential that the individual officers and directors be impleaded
as party respondents to the case instituted by the worker. A finding of liability on the part
of the corporation will necessarily mean the liability of the corporate officers or directors.”27

Upon appellate review, the CA affirmed the NLRC in a Decision 28 promulgated on 15


November 2010:chanRoblesvirtualLawlibrary

From the foregoing, the Court finds no reason to hold the NLRC guilty of grave abuse of
discretion amounting to lack or excess of jurisdiction in affirming the Order of Executive
Labor Arbiter Aglibut which held petitioner solidarily liable with PRO Agency Manila, Inc.
and Abdul Rahman Al Mahwes as adjudged in the May 7, 1997 Decision of Labor Arbiter
Pedro Ramos.

WHEREFORE, the Petition is DENIED.

SO ORDERED. (Emphasis in the original)

The CA stated that there was “no need for petitioner to be impleaded x x x because by
express provision of the law, she is made solidarily liable with PRO Agency Manila, Inc.,
for any and all money claims filed by private respondents.”29 The CA further said that this
is not a case in which the liability of the corporate officer must be established because an
allegation of malice must be proven. The general rule is that corporate officers, directors
and stockholders are not liable, except when they are made liable for their corporate act
by a specific provision of law, such as R.A. 8042. 30

On 8 and 15 December 2010, petitioner filed two Motions for Reconsideration, but both
were denied in a Resolution31 issued by the CA on 25 February 2011.

Hence, this Petition for Review filed on 30 March 2011.

On 1 August 2011, respondents filed their Comment,32 alleging that the petition had been
filed 15 days after the prescriptive period of appeal under Section 2, Rule 45 of the Rules
of Court.

On 14 February 2012, petitioner filed a Reply,33 countering that she has a fresh period of
15 days from 16 March 2011 (the date she received the Resolution of the CA) or up to 31
March 2011 to file the Petition.

ISSUES

From the foregoing, we reduce the issues to the following:

1. Whether or not this petition was filed on time; and

2. Whether or not petitioner may be held jointly and severally liable with PRO Agency
Manila, Inc. in accordance with Section 10 of R.A. 8042, despite not having been
impleaded in the Complaint and named in the Decision.

THE COURT’S RULING

Petitioner has a fresh period of 15 days within


which to file this petition, in accordance with
the Neypes rule.

We first address the procedural issue of this case.

In a misleading attempt to discredit this petition, respondents insist that by opting to file a
Motion for Reconsideration instead of directly appealing the CA Decision, petitioner
effectively lost her right to appeal. Hence, she should have sought an extension of time
to file her appeal from the denial of her motion.

This contention, however, deserves scant consideration. We agree with petitioner that
starting from the date she received the Resolution denying her Motion for
Reconsideration, she had a “fresh period” of 15 days within which to appeal to this Court.
The matter has already been settled in Neypes v. Court of Appeals,34 as
follows:chanRoblesvirtualLawlibrary

To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period of
15 days within which to file the notice of appeal in the Regional Trial Court, counted from
receipt of the order dismissing a motion for a new trial or motion for reconsideration.

Henceforth, this “fresh period rule” shall also apply to Rule 40 governing appeals from the
Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from
the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial
agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to the
Supreme Court. The new rule aims to regiment or make the appeal period uniform, to be
counted from receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or resolution.

Since petitioner received the CA Resolution denying her two Motions for Reconsideration
only on 16 March 2011, she had another 15 days within which to file her Petition, or until
31 March 2011. This Petition, filed on 30 March 2011, fell within the prescribed 15-day
period.

Petitioner may not be held jointly and severally liable, absent a finding that she was remiss
in directing the affairs of the agency.

As to the merits of the case, petitioner argues that while it is true that R.A. 8042 and the
Corporation Code provide for solidary liability, this liability must be so stated in the
decision sought to be implemented.35 Absent this express statement, a corporate officer
may not be impleaded and made to personally answer for the liability of the
corporation.36 Moreover, the 1997 Decision had already been final and executory for five
years and, as such, can no longer be modified.37 If at all, respondents are clearly guilty of
laches for waiting for five years before taking action against petitioner. 38

In disposing the issue, the CA cited Section 10 of R.A. 8042, stating that there was “no
need for petitioner to be impleaded x x x because by express provision of the law, she is
made solidarily liable with PRO Agency Manila, Inc., for any and all money claims filed by
private respondents.”39ChanRoblesVirtualawlibrary

We reverse the CA.

At the outset, we have declared that “R.A. 8042 is a police power measure intended to
regulate the recruitment and deployment of OFWs. It aims to curb, if not eliminate, the
injustices and abuses suffered by numerous OFWs seeking to work abroad.” 40

The pertinent portion of Section 10, R.A. 8042 reads as


follows:chanRoblesvirtualLawlibrary

SEC. 10. MONEY CLAIMS. - Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing
of the complaint, the claims arising out of an employer-employee relationship or by virtue
of any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for


any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and directors and partners as the case
may be, shall themselves be jointly and solidarily liable with the corporation or partnership
for the aforesaid claims and damages. (Emphasis supplied)cralawlawlibrary

In Sto. Tomas v. Salac,41 we had the opportunity to pass upon the constitutionality of this
provision. We have thus maintained:chanRoblesvirtualLawlibrary

The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of Section
10, R.A. 8042, which holds the corporate directors, officers, and partners of recruitment
and placement agencies jointly and solidarily liable for money claims and damages that
may be adjudged against the latter agencies, is unconstitutional.

x x x

But the Court has already held, pending adjudication of this case, that the liability
of corporate directors and officers is not automatic. To make them jointly and
solidarily liable with their company, there must be a finding that they were remiss
in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities. In the case of Becmen and White Falcon, while there is
evidence that these companies were at fault in not investigating the cause of Jasmin’s
death, there is no mention of any evidence in the case against them that intervenors
Gumabay, et al., Becmen’s corporate officers and directors, were personally involved in
their company’s particular actions or omissions in Jasmin’s case. (Emphasis
supplied)cralawlawlibrary

Hence, for petitioner to be found jointly and solidarily liable, there must be a separate
finding that she was remiss in directing the affairs of the agency, resulting in the illegal
dismissal of respondents. Examination of the records would reveal that there was no
finding of neglect on the part of the petitioner in directing the affairs of the agency. In fact,
respondents made no mention of any instance when petitioner allegedly failed to manage
the agency in accordance with law, thereby contributing to their illegal dismissal.

Moreover, petitioner is correct in saying that impleading her for the purpose of execution
is tantamount to modifying a decision that had long become final and
executory.42 The fallo of the 1997 Decision by the NLRC only held “respondents Pro
Agency Manila Inc., and Abdul Rahman Al Mahwes to jointly and severally pay
complainants x x x.”43 By holding her liable despite not being ordained as such by the
decision, both the CA and NLRC violated the doctrine on immutability of judgments.

In PH Credit Corporation v. Court of Appeals,44 we stressed that “respondent’s


[petitioner’s] obligation is based on the judgment rendered by the trial court. The
dispositive portion or the fallo is its decisive resolution and is thus the subject of
execution. x x x. Hence the execution must conform with that which is ordained or decreed
in the dispositive portion of the decision.”
In INIMACO v. NLRC,45 we also held thus:chanRoblesvirtualLawlibrary

None of the parties in the case before the Labor Arbiter appealed the Decision dated
March 10, 1987, hence the same became final and executory. It was, therefore, removed
from the jurisdiction of the Labor Arbiter or the NLRC to further alter or amend it. Thus,
the proceedings held for the purpose of amending or altering the dispositive portion of the
said decision are null and void for lack of jurisdiction. Also, the Alias Writ of Execution is
null and void because it varied the tenor of the judgment in that it sought to enforce the
final judgment against “Antonio Gonzales/Industrial Management Development Corp.
(INIMACO) and/or Filipinas Carbon and Mining Corp. and Gerardo Sicat,” which makes
the liability solidary.

In other words, “[o]nce a decision or order becomes final and executory, it is removed
from the power or jurisdiction of the court which rendered it to further alter or amend it. It
thereby becomes immutable and unalterable and any amendment or alteration which
substantially affects a final and executory judgment is null and void for lack of jurisdiction,
including the entire proceedings held for that purpose. An order of execution which varies
the tenor of the judgment or exceeds the terms thereof is a nullity.” 46

While labor laws should be construed liberally in favor of labor, we must be able to
balance this with the equally important right of petitioner to due process. Because the
1997 Decision of Labor Arbiter Ramos was not appealed, it became final and executory
and was therefore removed from his jurisdiction. Modifying the tenor of the judgment via
a motion impleading petitioner and filed only in 2002 runs contrary to settled
jurisprudence, rendering such action a nullity.

WHEREFORE, the Petition for Review on Certiorari is hereby GRANTED. The assailed
Decision dated 15 November 2010 and Resolution dated 25 February 2011 of the Court
of Appeals in CA-G.R. SP No. 104292 are
hereby REVERSED.chanRoblesvirtualLawlibrary

SO ORDERED.

G.R. No. 207132, December 06, 2016

ASSOCIATION OF MEDICAL CLINICS FOR OVERSEAS WORKERS, INC., (AMCOW),


REPRESENTED HEREIN BY ITS PRESIDENT, DR. ROLANDO
VILLOTE, Petitioner, v. GCC APPROVED MEDICAL CENTERS ASSOCIATION, INC.
AND CHRISTIAN CANGCO, Respondents.

G.R. No. 207205

HON. ENRIQUE T. ONA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT


OF HEALTH, Petitioner, v. GCC APPROVED MEDICAL CENTERS ASSOCIATION,
INC. AND CHRISTIAN E. CANGCO, Respondents.

DECISION

BRION, J.:

In these consolidated petitions for review on certiorari1 filed under Rule 45 of the Rules
of Court, by the Association of Medical Clinics for Overseas Workers, Inc. (AMCOW)
in GR No. 207132, and by Secretary Enrique T. Ona (Secretary Ona) of the Department
of Health (DOH) in GR No. 207205, we resolve the challenge to the August 10,
2012 decision2 and the April 12, 2013 order3 of the Regional Trial Court (RTC) of Pasay
City, Branch 108, in Sp. Civil Action No. R-PSY-10-04391-CV.4

The August 10, 2012 decision and April 12, 2013 order declared null and void ab
initio the August 23, 2010 and November 2, 2010 orders issued by the DOH directing
respondent GCC Approved Medical Centers Association, Inc. (GAMCA) to cease and
desist from implementing the referral decking system (these orders shall be alternately
referred to as DOH CDO letters).

I. The Antecedents

On March 8, 2001, the DOH issued Administrative Order No. 5, Series of 20015(AO 5-
01) which directed the decking or equal distribution of migrant workers among the
several clinics who are members of GAMCA.

AO 5-01 was issued to comply with the Gulf Cooperative Countries (GCC) States'
requirement that only GCC-accredited medical clinics/hospitals' examination results will
be honored by the GCC States' respective embassies. It required an OFW applicant to
first go to a GAMCA Center which, in turn, will refer the applicant to a GAMCA clinic or
hospital.

Subsequently, the DOH issued AO No. 106, Series of 20026holding in abeyance the
implementation of the referral decking system. The DOH reiterated its directive
suspending the referral decking system in AO No. 159, Series of 2004.7

In 2004, the DOH issued AO No. 167, Series of 20048repealing AO 5-01, reasoning that
the referral decking system did not guarantee the migrant workers' right to safe and
quality health service. AO 167-04 pertinently reads:
WHEREAS, after a meticulous and deliberate study, examination, and consultation about
the GAMCA referral decking system, the DOH believes that its mandate is to protect and
promote the health of the Filipino people by ensuring the rights to safe and quality health
service and reliable medical examination results through the stricter regulation of medical
clinics and other health facilities, which the referral decking system neither assures nor
guarantees.

NOW, THEREFORE, for and in consideration of the foregoing, the DOH hereby
withdraws, repeals and/or revokes Administrative Order No. 5, series of 2001, concerning
the referral decking system. Hence, all other administrative issuances, bureau circulars
and memoranda related to A.O. No. 5, series of 2001, are hereby withdrawn, repealed
and/revoked accordingly.
In Department Memorandum No. 2008-0210,9 dated September 26, 2008, then DOH
Secretary Francisco T. Duque III expressed his concern about the continued
implementation of the referral decking system despite the DOH's prior suspension
directives. The DOH directed the "OFW clinics, duly accredited/licensed by the DOH
and/or by the Philippine Health Insurance Corporation (PHILHEALTH) belonging to and
identified with GAMCA x x x to forthwith stop, terminate, withdraw or otherwise end
the x x x 'referral decking system.'"10

GAMCA questioned the DOH's Memorandum No. 2008-0210 before the Office of the
President (OP). In a decision11 dated January 14, 2010, the OP nullified Memorandum
No. 2008-0210.

On March 8, 2010, Republic Act (RA) No. 1002212lapsed into law without the
President's signature. Section 16 of RA No. 10022 amended Section 23 of RA No. 8042,
adding two new paragraphs - paragraphs (c) and (d). The pertinent portions of the
amendatory provisions read:
Section 16. Under Section 23 of Republic Act No. 8042, as amended, add new
paragraphs (c) and (d) with their corresponding subparagraphs to read as follows:

(c) Department of Health. - The Department of Health (DOH) shall regulate the
activities and operations of all clinics which conduct medical, physical, optical,
dental, psychological and other similar examinations, hereinafter referred to as
health examinations, on Filipino migrant workers as requirement for their overseas
employment. Pursuant to this, the DOH shall ensure that:

(c.1) The fees for the health examinations are regulated, regularly monitored and duly
published to ensure that the said fees are reasonable and not exorbitant;

(c.2) The Filipino migrant worker shall only be required to undergo health examinations
when there is reasonable certainty that he or she will be hired and deployed to the jobsite
and only those health examinations which are absolutely necessary for the type of job
applied for or those specifically required by the foreign employer shall be conducted;

(c.3) No group or groups of medical clinics shall have a monopoly of exclusively


conducting health examinations on migrant workers for certain receiving
countries;

(c.4) Every Filipino migrant worker shall have the freedom to choose any of the
DOH-accredited or DOH-operated clinics that will conduct his/her health examinations
and that his or her rights as a patient are respected. The decking practice, which
requires an overseas Filipino worker to go first to an office for registration and then
farmed out to a medical clinic located elsewhere, shall not be allowed;
(c.5) Within a period of three (3) years from the effectivity of this Act, all DOH regional
and/or provincial hospitals shall establish and operate clinics that can serve the health
examination requirements of Filipino migrant workers to provide them easy access to
such clinics all over the country and lessen their transportation and lodging expenses;
and

(c.6) All DOH-accredited medical clinics, including the DOH operated clinics, conducting
health examinations for Filipino migrant workers shall observe the same standard
operating procedures and shall comply with internationally accepted standards in their
operations to conform with the requirements of receiving countries or of foreign
employers/principals.

Any Foreign employer who does not honor the results of valid health examinations
conducted by a DOH-accredited or DOH-operated clinic shall be temporarily disqualified
from participating in the overseas employment program, pursuant to POEA rules and
regulations.

In case an overseas Filipino worker is found to be not medically fit upon his/her immediate
arrival in the country of destination, the medical clinic that conducted the health
examinations of such overseas Filipino worker shall pay for his or her repatriation back to
the Philippines and the cost of deployment of such worker.

Any government official or employee who violates any provision of this subsection shall
be removed or dismissed from service with disqualification to hold any appointive public
office for five (5) years. Such penalty is without prejudice to any other liability which he or
she may have incurred under existing laws, rules or regulations. [emphases and
underscoring supplied]
On August 13, 2010, the Implementing Rules and Regulations13 (IRR) of RA No. 8042,
as amended by RA No. 10022, took effect.

Pursuant to Section 16 of RA No. 10022, the DOH, through its August 23, 2010 letter-
order,14directed GAMCA to cease and desist from implementing the referral decking
system and to wrap up their operations within three (3) days from receipt thereof.
GAMCA received its copy of the August 23, 2010 letter-order on August 25, 2010.

On August 26, 2010, GAMCA filed with the RTC of Pasig City a petition for certiorari and
prohibition with prayer for a writ of preliminary injunction and/or temporary restraining
order (GAMCA's petition).15 It assailed: (1) the DOH's August 23, 2010 letter-order on the
ground of grave abuse of discretion; and (2) paragraphs c.3 and c.4, Section 16 of RA
No. 10022, as well as Section 1 (c) and (d), Rule XI of the IRR, as unconstitutional.

Meanwhile, the DOH reiterated - through its November 2, 2010 order - its directive that
GAMCA cease and desist from implementing the referral decking system. 16

On November 23, 2010, AMCOW filed an urgent motion for leave to intervene and to file
an opposition-in-intervention, attaching its opposition-in-intervention to its motion.17 In the
hearing conducted the following day, November 24, 2010, the RTC granted AMCOW's
intervention; DOH and GAMCA did not oppose AMCOW's motion. 18 AMCOW
subsequently paid the docket fees and submitted its memorandum.19

In an order20 dated August 1, 2011, the RTC issued a writ of preliminary


injunction21 directing the DOH to cease and desist from implementing its August 23, 2010
and November 2, 2010 orders. The RTC likewise issued an order denying the motion for
inhibition/disqualification filed by AMCOW.

On August 18, 2011, the DOH sought reconsideration of the RTC's August 1, 2011 order.

The assailed RTC rulings

In its August 10, 2012 decision,22 the RTC granted GAMCA's certiorari petition and
declared null and void ab initio the DOH CDO letters. It also issued a writ of prohibition
directing "the DOH Secretary and all persons acting on his behalf to cease and desist
from implementing the assailed Orders against the [GAMCA]."

The RTC upheld the constitutionality of Section 16 of RA No. 10022, amending


Section 23 of RA No. 8042, but ruled that Section 16 of RA No. 10022 does not apply
to GAMCA.

The RTC reasoned out that the prohibition against the referral decking system under
Section 16 of RA No. 10022 must be interpreted as applying only to clinics that conduct
health examination on migrant workers bound for countries that do not require the referral
decking system for the issuance of visas to job applicants.

It noted that the referral decking system is part of the application procedure in obtaining
visas to enter the GCC States, a procedure made in the exercise of the sovereign power
of the GCC States to protect their nationals from health hazards, and of their diplomatic
power to regulate and screen entrants to their territories. Under the principle of sovereign
equality and independence of States, the Philippines cannot interfere with this system
and, in fact, must respect the visa-granting procedures of foreign states in the same way
that they respect our immigration procedures.

Moreover, to restrain GAMCA which is a mere adjunct of HMC, the agent of GCC States,
is to restrain the GCC States themselves. To the RTC, the Congress was aware of this
limitation, pursuant to the generally accepted principles of international law under Article
II, Section 2 of the 1987 Constitution, when it enacted Section 16 of RA No. 10022.

The DOH and AMCOW separately sought reconsideration of the RTC's August 10, 2012
decision, which motions the RTC denied.23 The DOH and AMCOW separately filed the
present Rule 45 petitions.

On August 24, 2013, AMCOW filed a motion for consolidation 24 of the two petitions; the
Court granted this motion and ordered the consolidation of the two petitions in a resolution
dated September 17, 2013.25cralawred

In the resolution26 of April 14, 2015, the Court denied: (1) GAMCA's most urgent motion
for issuance of temporary restraining order/writ of preliminary injunction/status quo ante
order (with request for immediate inclusion in the Honorable Court's agenda of March 3,
2015, its motion dated March 2, 2015);27 and (2) the most urgent reiterating motion for
issuance of temporary restraining order/writ of preliminary injunction/status quo ante
order dated March 11, 2015.28

The Court also suspended the implementation of the permanent injunction issued by the
RTC of Pasay City, Branch 108 in its August 10, 2012 decision.

II. The Issues

The consolidated cases before us present the following issues:

First, whether the Regional Trial Court legally erred in giving due course to the petition
for certiorari and prohibition against the DOH CDO letters;

Second, whether the DOH CDO letters prohibiting GAMCA from implementing the
referral decking system embodied under Section 16 of Republic Act No. 10022 violates
Section 3, Article II of the 1987 Constitution for being an undue taking of property;

Third, whether the application of Section 16 of Republic Act No.10022 to the GAMCA
violates the international customary principles of sovereign independence and equality.

III. Our Ruling

A. The RTC legally erred when it gave due course to GAMCA's petition
for certiorari and prohibition.

The present case reached us through an appeal by certiorari (pursuant to Rule 45) of an
RTC ruling, assailing the decision based solely on questions of law. The RTC decision,
on the other hand, involves the grant of the petitions for certiorari and prohibition
(pursuant to Rule 65) assailing the DOH CDO letters for grave abuse of discretion.

The question before us asks whether the RTC made a reversible error of law when
it issued writs of certiorari and prohibition against the DOH CDO letters.

AMCOW questions the means by which GAMCA raised the issue of the legality of RA No.
10022 before the RTC. AMCOW posits that GAMCA availed of an improper remedy,
as certiorari and prohibition lie only against quasi-judicial acts, and quasi-judicial and
ministerial acts, respectively. Since the disputed cease and desist order is neither, the
RTC should have dismissed the petition outright for being an improper remedy.

We agree with the petitioners' assertion that the RTC erred when it gave due course to
GAMCA's petition for certiorari and prohibition, but we do so for different reasons.

1. Certiorari under Rules of Court and under the courts' expanded jurisdiction
under Art VIII, Section 1 of the Constitution, as recognized by jurisprudence.

A.1.a. The Current Certiorari Situation

The use of petitions for certiorari and prohibition under Rule 65 is a remedy that judiciaries
have used long before our Rules of Court existed.29 As footnoted below, these writs - now
recognized and regulated as remedies under Rule 65 of our Rules of Court - have been
characterized a "supervisory writs" used by superior courts to keep lower courts within
the confines of their granted jurisdictions, thereby ensuring orderliness in lower courts'
rulings.

We confirmed this characterization in Madrigal Transport v. Lapanday Holdings


Corporation,30 when we held that a writ is founded on the supervisory jurisdiction of
appellate courts over inferior courts, and is issued to keep the latter within the bounds of
their jurisdiction. Thus, the writ corrects only errors of jurisdiction of judicial and quasi-
judicial bodies, and cannot be used to correct errors of law or fact. For these mistakes of
judgment, the appropriate remedy is an appeal.31

This situation changed after 1987 when the new Constitution "expanded" the scope of
judicial power by providing that -
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government. (italics
supplied)32
In Francisco v. The House of Representatives,33 we recognized that this expanded
jurisdiction was meant "to ensure the potency of the power of judicial review to curb grave
abuse of discretion by 'any branch or instrumentalities of government.'" Thus, the second
paragraph of Article VIII, Section 1 engraves, for the first time in its history, into black
letter law the "expanded certiorari jurisdiction" of this Court, whose nature and purpose
had been provided in the sponsorship speech of its proponent, former Chief Justice
Constitutional Commissioner Roberto Concepcion:
xxxx

The first section starts with a sentence copied from former

Constitutions. It says:

The judicial power shall be vested in one Supreme Court and in such lower courts as may
be established by law.

I suppose nobody can question it.


The next provision is new in our constitutional law. I will read it first and explain.

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the government.

Fellow Members of this Commission, this is actually a product of our experience during
martial law. As a matter of fact, it has some antecedents in the past, but the role of the
judiciary during the deposed regime was marred considerably by the circumstance that
in a number of cases against the government, which then had no legal defense at all, the
solicitor general set up the defense of political question and got away with it. As a
consequence, certain principles concerning particularly the writ of habeas corpus, that is,
the authority of courts to order the release of political detainees, and other matters related
to the operation and effect of martial law failed because the government set up the
defense of political question. And the Supreme Court said: "Well, since it is political, we
have no authority to pass upon it." The Committee on the Judiciary feels that this was not
a proper solution of the questions involved. It did not merely request an encroachment
upon the rights of the people, but it, in effect, encouraged further violations thereof during
the martial law regime. x x x

xxxx

Briefly stated, courts of justice determine the limits of power of the agencies and offices
of the government as well as those of its officers. In other words, the judiciary is the final
arbiter on the question whether or not a branch of government or any of its officials has
acted without jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an
abuse of discretion amounting to excess of jurisdiction or lack of jurisdiction. This is not
only a judicial power but a duty to pass judgment on matters of this nature.

This is the background of paragraph 2 of Section 1, which means that the courts cannot
hereafter evade the duty to settle matters of this nature, by claiming that such matters
constitute a political question.34 (italics in the original; emphasis and underscoring
supplied)
Meanwhile that no specific procedural rule has been promulgated to enforce this
"expanded" constitutional definition of judicial power and because of the commonality of
"grave abuse of discretion" as a ground for review under Rule 65 and the courts expanded
jurisdiction, the Supreme Court based on its power to relax its rules35 allowed Rule 65 to
be used as the medium for petitions invoking the courts' expanded jurisdiction based on
its power to relax its Rules.36 This is however an ad hoc approach that does not fully
consider the accompanying implications, among them, that Rule 65 is an essentially
distinct remedy that cannot simply be bodily lifted for application under the judicial power's
expanded mode. The terms of Rule 65, too, are not fully aligned with what the Court's
expanded jurisdiction signifies and requires.37

On the basis of almost thirty years' experience with the courts' expanded jurisdiction, the
Court should now fully recognize the attendant distinctions and should be aware that the
continued use of Rule 65 on an ad hoc basis as the operational remedy in implementing
its expanded jurisdiction may, in the longer term, result in problems of uneven, misguided,
or even incorrect application of the courts' expanded mandate.

The present case is a prime example of the misguided reading that may take place in
constitutional litigation: the procedural issues raised apparently spring from the lack of
proper understanding of what a petition for certiorari assails under the traditional and
expanded modes, and the impact of these distinctions in complying with the procedural
requirements for a valid petition.

2. The Basic Distinctions

A.2.a. Actual Case or Controversy

Basic in the exercise of judicial power whether under the traditional or in the expanded
setting - is the presence of an actual case or controversy. For a dispute to be justiciable,
a legally demandable and enforceable right must exist as basis, and must be shown to
have been violated.38

Whether a case actually exists depends on the pleaded allegations, as affected by the
elements of standing (translated in civil actions as the status of being a "real-party-
in-interest," in criminal actions as "offended party" and in special proceedings as
"interested party"),39ripeness,40prematurity, and the moot and academic
principle that likewise interact with one another. These elements and their interactions
are discussed m greater detail below.

The Court's expanded jurisdiction - itself an exercise of judicial power - does not do
away with the actual case or controversy requirement in presenting a constitutional issue,
but effectively simplifies this requirement by merely requiring a prima facie showing of
grave abuse of discretion in the assailed governmental act.

A.2.b. Actions Correctable by Certiorari

A basic feature of the expanded jurisdiction under the constitutional definition of judicial
power, is the authority and command for the courts to act on petitions involving the
commission by any branch or instrumentality of government of grave abuse of discretion
amounting to lack or excess of jurisdiction.

This command distinctly contrasts with the terms of Rule 65 which confines
court certiorari action solely to the review of judicial and quasi-judicial acts.41 These
differing features create very basic distinctions that must necessarily result in differences
in the application of remedies.

While actions by lower courts do not pose a significant problem because they are
necessarily acting judicially when they adjudicate, a critical question comes up for the
court acting on certiorari petitions when governmental agencies are involved - under
what capacity does the agency act?

This is a critical question as the circumstances of the present case show. When the
government entity acts quasi-judicially, the petition for certiorari challenging the action
falls under Rule 65; in other instances, the petition must be filed based on the courts'
expanded jurisdiction.

A.2.c. Grave Abuse of Discretion

Another distinction, a seeming one as explained below, relates to the cited ground of
a certiorari petition under Rule 65 which speaks of lack or excess of jurisdiction or grave
abuse of discretion amounting to lack or excess of jurisdiction, as against the remedy
under the courts' expanded jurisdiction which expressly only mentions grave abuse of
discretion amounting to lack or excess of jurisdiction.

This distinction is apparently not legally significant when it is considered that action
outside of or in excess of the granted authority necessarily involves action with grave
abuse of discretion: no discretion is allowed in areas outside of an agency's granted
authority so that any such action would be a gravely abusive exercise of power. The
constitutional grant of power, too, pointedly addresses grave abuse of discretion when it
amounts to lack or excess of jurisdiction,42 thus establishing that the presence of
jurisdiction is the critical element; failure to comply with this requirement necessarily leads
to the certiorari petition's immediate dismissal.43

As an added observation on a point that our jurisprudence has not fully explored, the
result of the action by a governmental entity (e.g., a law or an executive order) can be
distinguished from the perspective of its legality as tested against the terms of the
Constitution or of another law (where subordinate action like an executive order is
involved), vis-a-vis the legality of the resulting action where grave abuse of discretion
attended the governmental action or the exercise of the governmental function.

In the former, the conclusion may be plain illegality or legal error that characterized the
law or exec order (as tested, for example, under the established rules of interpretation);
no consideration is made of how the governmental entity exercised its function. In the
latter case, on the other hand, it is the governmental entity's exercise of its function that
is examined and adjudged independently of the result, with impact on the legality of the
result of the gravely abusive action.

Where the dispute in a case relates to plain legal error, ordinary court action and
traditional mode are called for and this must be filed in the lower courts based on rules of
jurisdiction while observing the hierarchy of courts.

Where grave abuse of discretion is alleged to be involved, the expanded jurisdiction is


brought into play based on the express wording of the Constitution and constitutional
implications may be involved (such as grave abuse of discretion because of plain
oppression or discrimination), but this must likewise be filed with the lowest court of
concurrent jurisdiction, unless the court highest in the hierarchy grants exemption. Note
that in the absence of express rules, it is only the highest court, the Supreme Court, that
can only grant exemptions.

From these perspectives, the use of grave abuse of discretion can spell the difference in
deciding whether a case filed directly with the Supreme Court has been properly filed.

A.2.d. Exhaustion of Available Remedies

A basic requirement under Rule 65 is that there be "no other plain, speedy and adequate
remedy found in law,"44 which requirement the expanded jurisdiction provision does not
expressly carry. Nevertheless, this requirement is not a significant distinction in using the
remedy of certiorari under the traditional and the expanded modes. The doctrine of
exhaustion of administrative remedies applies to a petition for certiorari, regardless of the
act of the administrative agency concerned, i.e., whether the act concerns a quasi-
judicial, or quasi-legislative function, or is purely regulatory.45

Consider in this regard that once an administrative agency has been empowered by
Congress to undertake a sovereign function, the agency should be allowed to perform its
function to the full extent that the law grants. This full extent covers the authority of
superior officers in the administrative agencies to correct the actions of subordinates, or
for collegial bodies to reconsider their own decisions on a motion for reconsideration.
Premature judicial intervention would interfere with this administrative mandate, leaving
administrative action incomplete; if allowed, such premature judicial action through a writ
of certiorari, would be a usurpation that violates the separation of powers principle that
underlies our Constitution.46

In every case, remedies within the agency's administrative process must be exhausted
before external remedies can be applied. Thus, even if a governmental entity may have
committed a grave abuse of discretion, litigants should, as a rule, first ask reconsideration
from the body itself, or a review thereof before the agency concerned. This step ensures
that by the time the grave abuse of discretion issue reaches the court, the administrative
agency concerned would have fully exercised its jurisdiction and the court can focus its
attention on the questions of law presented before it.

Additionally, the failure to exhaust administrative remedies affects the ripeness to


adjudicate the constitutionality of a governmental act, which in turn affects the
existence of the need for an actual case or controversy for the courts to exercise
their power of judicial review.47 The need for ripeness - an aspect of the timing of a
case or controversy does not change regardless of whether the issue of constitutionality
reaches the Court through the traditional means, or through the Court's expanded
jurisdiction. In fact, separately from ripeness, one other concept pertaining to judicial
review is intrinsically connected to it; the concept of a case being moot and academic. 48

Both these concepts relate to the timing of the presentation of a controversy before the
Court ripeness relates to its prematurity, while mootness relates to a belated or
unnecessary judgment on the issues. The Court cannot preempt the actions of the
parties, and neither should it (as a rule) render judgment after the issue has already been
resolved by or through external developments.

The importance of timing in the exercise of judicial review highlights and reinforces the
need for an actual case or controversy an act that may violate a party's right. Without any
completed action or a concrete threat of injury to the petitioning party, the act is not yet
ripe for adjudication. It is merely a hypothetical problem. The challenged act must have
been accomplished or performed by either branch or instrumentality of government before
a court may come into the picture, and the petitioner must allege the existence of an
immediate or threatened injury to itself as a result of the challenged action.

In these lights, a constitutional challenge, whether presented through the traditional route
or through the Court's expanded jurisdiction, requires compliance with the ripeness
requirement. In the case of administrative acts, ripeness manifests itself through
compliance with the doctrine of exhaustion of administrative remedies.

In like manner, an issue that was once ripe for resolution but whose resolution, since then,
has been rendered unnecessary, needs no resolution from the Court, as it presents no
actual case or controversy and likewise merely presents a hypothetical problem. In
simpler terms, a case is moot and academic when an event supervenes to render a
judgment over the issues unnecessary and superfluous.

Without the element of ripeness or a showing that the presented issue is moot and
academic, petitions challenging the constitutionality of a law or governmental act are
vulnerable to dismissal.

Not to be forgotten is that jurisprudence also prohibits litigants from immediately seeking
judicial relief without first exhausting the available administrative remedies for practical
reasons.49

From the perspective of practicality, immediate resort to the courts on issues that are
within the competence of administrative agencies to resolve, would unnecessarily clog
the courts' dockets. These issues, too, usually involve technical considerations that are
within the agency's specific competence and which, for the courts, would require
additional time and resources to study and consider.50 Of course, the Supreme Court
cannot really avoid the issues that a petition for certiorari, filed with the lower courts may
present; the case may be bound ultimately to reach the Court, albeit as an appeal from
the rulings of the lower courts.

3. Situations Where a Petition for Certiorari May Be Used

There are two distinct situations where a writ of certiorari or prohibition may be sought.
Each situation carries requirements, peculiar to the nature of each situation, that lead to
distinctions that should be recognized in the use of certiorari under Rule 65 and under the
courts' expanded jurisdiction.

The two situations differ in the type of questions raised. The first is the constitutional
situation where the constitutionality of acts are questioned. The second is the non-
constitutional situation where acts amounting to grave abuse of discretion are
challenged without raising constitutional questions or violations.

The process of questioning the constitutionality of a governmental action provides a


notable area of comparison between the use of certiorari in the traditional and the
expanded modes.

Under the traditional mode, plaintiffs question the constitutionality of a governmental


action through the cases they file before the lower courts; the defendants may likewise
do so when they interpose the defense of unconstitutionality of the law under which they
are being sued. A petition for declaratory relief may also be used to question the
constitutionality or application of a legislative (or quasi-legislative) act before the court.51

For quasi-judicial actions, on the other hand, certiorari is an available remedy, as acts or
exercise of functions that violate the Constitution are necessarily committed with grave
abuse of discretion for being acts undertaken outside the contemplation of the
Constitution. Under both remedies, the petitioners should comply with the traditional
requirements of judicial review, discussed below.52 In both cases, the decisions of these
courts reach the Court through an appeal by certiorari under Rule 45.

In contrast, existing Court rulings in the exercise of its expanded jurisdiction have
allowed the direct filing of petitions for certiorari and prohibition with the Court to question,
for grave abuse of discretion, actions or the exercise of a function that violate the
Constitution.53 The governmental action may be questioned regardless of whether it is
quasi-judicial, quasi-legislative, or administrative in nature. The Court's expanded
jurisdiction does not do away with the actual case or controversy requirement for
presenting a constitutional issue, but effectively simplifies this requirement by merely
requiring a prima facie showing of grave abuse of discretion in the exercise of the
governmental act.54

To return to judicial review heretofore mentioned, in constitutional cases where the


question of constitutionality of a governmental action is raised, the judicial power the
courts exercise is likewise identified as the power of judicial review - the power to
review the constitutionality of the actions of other branches of government. 55 As a rule,
as required by the hierarchy of courts principle, these cases are filed with the lowest
court with jurisdiction over the matter. The judicial review that the courts undertake
requires:
1) there be an actual case or controversy calling for the exercise of judicial power;
(2) the person challenging the act must have "Standing" to challenge; he must have
a personal and substantial interest in the case such that he has sustained, or will
sustain, direct injury as a result of its enforcement;

(3) the question of constitutionality must be raised at the earliest possible opportunity;
and

(4) the issue of constitutionality must be the very lis mota of the case.56
The lower court's decision under the constitutional situation reaches the Supreme Court
through the appeal process, interestingly, through a petition for review on certiorari under
Rule 45 of the Rules of Court.

In the non-constitutional situation, the same requirements essentially apply, less the
requirements specific to the constitutional issues. In particular, there must be an actual
case or controversy and the compliance with requirements of standing, as affected by the
hierarchy of courts, exhaustion of remedies, ripeness, prematurity, and the moot and
academic principles.

A.3.a. The "Standing" Requirement

Under both situations, the party bringing suit must have the necessary "standing." This
means that this party has, in its favor, the demandable and enforceable right or interest
giving rise to a justiciable controversy after the right is violated by the offending party.

The necessity of a person's standing to sue derives from the very definition of judicial
power. Judicial power includes the duty of the courts to settle actual controversies
involving rights which are legally demandable and enforceable. Necessarily, the person
availing of a judicial remedy must show that he possesses a legal interest or right to it,
otherwise, the issue presented would be purely hypothetical and academic. This concept
has been translated into the requirement to have "standing" in judicial review,57or to be
considered as a "real-party-in-interest" in civil actions,58 as the "offended party" in criminal
actions59 and the "interested party" in special proceedings.60

While the Court follows these terms closely in both non-constitutional cases and
constitutional cases under the traditional mode, it has relaxed the rule in constitutional
cases harrdled under the expanded jurisdiction mode. in the latter case, a prima
facie showing that the questioned governmental act violated the Constitution, effectively
disputably shows an injury to the sovereign Filipino nation who approved the Constitution
and endowed it with authority, such that the challenged act may be questioned by any
Philippine citizen before the Supreme Court.61 In this manner, the "standing" requirement
is relaxed compared with the standard of personal stake or injury that the traditional
petition requires.
The relaxation of the standing requirement has likewise been achieved through the
application of the "transcendental importance doctrine" under the traditional mode for
constitutional cases.62 (Under the traditional mode, "transcendental importance" not only
relaxes the standing requirement, but also allows immediate access to this Court, thus
exempting the petitioner from complying with the hierarchy of courts requirement.) 63

More importantly perhaps, the prima facie showing of grave abuse of discretion in
constitutional cases also implies that the injury alleged is actual or imminent, and not
merely hypothetical.

Through this approach, the Court's attention is directed towards the existence of an actual
case or controversy - that is, whether the government indeed violated the Constitution to
the detriment of the Filipino people without the distractions of determining the existence
of transcendental importance indicators unrelated to the dispute and which do not at all
determine whether the Court properly exercises its power of judicial review.

Parenthetically, in the traditional mode, the determination of the transcendental


importance of the issue presented,64 aside from simply relaxing the standing requirement,
may result in the dilution of the actual case or controversy element because of the
inextricable link between standing and the existence of an actual case or controversy.

Consider, in this regard, that an actual case or controversy that calls for the exercise of
judicial power necessarily requires that the party presenting it possesses the standing to
mount a challenge to a governmental act. A case or controversy exists when there is an
actual dispute between parties over their legal rights, which remains in conflict at the time
the dispute is presented before the court.65 Standing, on the other hand, involves a
personal and substantial interest in the case because the petitioner has sustained, or will
sustain, direct injury as a result of the violation of its right. 66

With the element of "standing" (or the petitioner's personal or substantial stake or interest
in the case) relaxed, the practical effect is to dilute the need to show that an immediate
actual dispute over legal rights did indeed take place and is now the subject of the action
before the court.67

In both the traditional and the expanded modes, this relaxation carries a ripple effect
under established jurisprudential rulings,68 affecting not only the actual case or
controversy requirement, but compliance with the doctrine of hierarchy of courts,
discussed in greater detail below.

A.3.b. The Hierarchy of Courts Principle

Another requirement that a certiorari petition carries, springs from the principle of
"hierarchy of courts" which recognizes the various levels of courts in the country as they
are established under the Constitution and by law, their ranking and effect of their rulings
in relation with one another, and how these different levels of court interact with one
another.69 Since courts are established and given their defined jurisdictions by law, the
hierarchy of the different levels of courts should leave very little opening for flexibility (and
potential legal questions), but for the fact that the law creates courts at different and
defined levels but with concurrent jurisdictions.

The Constitution itself has partially determined the judicial hierarchy in the Philippine legal
system by designating the Supreme Court as the highest court with irreducible powers;
its rulings serve as precedents that other courts must follow70 because they form part of
the law of the land.71 As a rule, the Supreme Court is not a trial court and rules only on
questions of law, in contrast with the Court of Appeals and other intermediate
courts72 which rule on both questions of law and of fact. At the lowest level of courts are
the municipal and the regional trial courts which handle questions of fact and law at the
first instance according to the jurisdiction granted to them by law.

Petitions for certiorari and prohibition fall under the concurrent jurisdiction of the regional
trial courts and the higher courts, all the way up to the Supreme Court. As a general rule,
under the hierarchy of courts principle, the petition must be brought to the lowest court
with jurisdiction;73 the petition brought to the higher courts may be dismissed based on
the hierarchy principle. Cases, of course, may ultimately reach the Supreme Court
through the medium of an appeal.

The recognition of exceptions to the general rule is provided by the Supreme Court
through jurisprudence, i.e., through the cases that recognized the propriety of filing cases
directly with the Supreme Court. This is possible as the Supreme Court has the authority
to relax the application of its own rules.74

As observed above, this relaxation waters down other principles affecting the remedy
of certiorari. While the relaxation may result in greater and closer supervision by the Court
over the lower courts and quasi-judicial bodies under Rule 65, the effect may not always
be salutary in the long term when it is considered that this may affect the constitutional
standards for the exercise of judicial power, particularly the existence of an actual case
or controversy.

The "transcendental importance" standard, in particular, is vague, open-ended and value-


laden, and should be limited in its use to exemptions from the application of the hierarchy
of courts principle. It should not carry any ripple effect on the constitutional requirement
for the presence of an actual case or controversy.

4. The petition for certiorari and prohibition against the DOH Letter was filed before
the wrong court.

In the present case, the act alleged to be unconstitutional refers to the cease and desist
order that the DOH issued against GAMCA's referral decking system. Its constitutionality
was questioned through a petition for certiorari and prohibition before the RTC. The case
reached this Court through a Rule 45 appeal by certiorari under the traditional route.
In using a petition for certiorari and prohibition to assail the DOHCDO letters, GAMCA
committed several procedural lapses that rendered its petition readily dismissible by the
RTC. Not only did the petitioner present a premature challenge against an
administrative act; it also committed the grave jurisdictional error of filing the
petition before the wrong court.

A.4.a. The DOH CDO letters were issued in the exercise of the DOH's quasi-judicial
functions, and could be assailed through Rule 65 on certiorari and prohibition.

A cease and desist order is quasi-judicial in nature, as it applies a legislative policy to an


individual or group within the coverage of the law containing the policy.

The Court, in Municipal Council of Lemery, Batangas v. Provincial Board of


Batangas,75 recognized the difficulty of d fining the precise demarcation line between
what are judicial and what are administrative or ministerial functions, as the exercise of
judicial functions may involve the performance of legislative or administrative duties, and
the performance of administrative or ministerial duties may, to some extent, involve the
exercise of functions judicial in character. Thus, the Court held that the nature of the act
to be performed, rather than of the office, board, or body which performs it, should
determine whether or not an action is in the discharge of a judicial or a quasi-judicial
function.76

Generally, the exercise of judicial functions involves the determination of what the law is,
and what the legal rights of parties are under this law with respect to a matter in
controversy. Whenever an officer is clothed with this authority and undertakes to
determine those questions, he acts judicially.77

In the administrative realm, a government officer or body exercises a quasi-judicial


function when it hears and determines questions of fact to which the legislative policy is
to apply, and decide, based on the law's standards, matters relating to the enforcement
and administration of the law.78

The DOH CDO letter directed GAMCA to cease and desist from engaging in the referral
decking system practice within three days from receipt of the letter. By issuing this CDO
letter implementing Section 16 of RA No. 10022, the DOH (1) made the finding of fact
that GAMCA implements the referral decking system, and (2) applied Section 16 of RA
No. 10022, to conclude that GAMCA's practice is prohibited by law and should be
stopped.

From this perspective, the DOH acted in a quasi-judicial capacity: its CDO letter
determined a question of fact, and applied the legislative policy prohibiting the referral
decking system practice.

Notably, cease and desist orders have been described and treated as quasi-judicial acts
in past cases, and had even been described as similar to the remedy of injunction granted
by the courts.79
A.4.b. The petitions for certiorari and prohibition against the DOH CDO letters fall
within the jurisdiction of the Court of Appeals.

Since the CDO Letter was a quasi-judicial act, the manner by which GAMCA assailed it
before the courts of law had been erroneous; the RTC should not have entertained
GAMCA's petition.

First, acts or omissions by quasi-judicial agencies, regardless of whether the remedy


involves a Rule 43 appeal or a Rule 65 petition for certiorari, is cognizable by the Court
of Appeals. In particular, Section 4, Rule 65 of the Rules of Court provides:
Section 4. When and where petition filed. The petition shall be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the
sixty (60) day period shall be counted from notice of the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of
a lower court or of a corporation, board, officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme Court. It may
also be filed in the Court of Appeals whether or not the same is in aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves
the acts or omissions of a quasi-judicial agency, unless otherwise provided by law
or these Rules, the petition shall be filed in and cognizable only by the Court of
Appeals. (emphasis, italics, and underscoring supplied)
Since the DOH is part of the Executive Department and has acted in its quasi-judicial
capacity, the petition challenging its CDO letter should have been filed before the Court
of Appeals. The RTC thus did not have jurisdiction over the subject matter of the
petitions and erred in giving due course to the petition for certiorari and prohibition against
the DOH CDO letters. In procedural terms, petitions for certiorari and prohibition against
a government agency are remedies avaiJable to assail its quasi-judicial acts, and should
thus have been filed before the CA.

The provision in Section 4, Rule 65 requiring that certiorari petitions challenging quasi-
judicial acts to be filed with the CA is in full accord with Section 9 of Batas Pambansa Blg.
12980 on the same point. Section 9 provides:
Section 9. Jurisdiction.- The Court of Appeals shall exercise:

1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas


corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its
appellate jurisdiction;

xxxx

3. Exclusive appellate jurisdiction over all final judgments, resolutions, orders or


awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commission, including the Securities and Exchange Commission, the Social
Security Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the
third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary
Act of 1948.

xxxx

(emphases, italics, and underscoring supplied)


Thus, by law and by Supreme Court Rules, the CA is the court with the exclusive original
jurisdiction to entertain petitions for certiorari and prohibition against quasi-judicial
agencies. In short, GAMCA filed its remedy with the wrong court.

A.4.c The petitions for certiorari and prohibition against the DOH CDO letters were
premature challenges - they failed to comply with the requirement that there be "no
other plain, speedy and adequate remedy" and with the doctrine of exhaustion of
administrative remedies.

Second, the Regional Trial Court of Pasay City unduly disregarded the requirements that
there be "no other plain, speedy and adequate remedy at law" and the doctrine of
exhaustion of administrative remedies, when it gave due course to the certiorari and
prohibition petition against the DOH's CDO.

Under Chapter 8, Book IV of Executive Order (EO) No. 292,81 series of 1987, the DOH
Secretary "shall have supervision and control over the bureaus, offices, and agencies
under him"82 and "shall have authority over and responsibility for x x x operation" of the
Department.

Section 1, Chapter 1, Title I, Book III of EO No. 292 in relation with Article VII, Sections 1
and 17 of the Constitution,83 on the other hand, provides that the "President shall have
control of all the executive departments, bureaus, and offices."

These provisions both signify that remedies internal to the Executive Branch exist before
resorting to judicial remedies: GAMCA could ask the DOH Secretary to reconsider or
clarify its letter-order, after which it could appeal, should the ruling be unfavorable, to the
Office of the President.

Significantly, this was what GAMCA did in the past when the DOH issued Memorandum
Order No. 2008-0210 that prohibited the referral decking system. GAMCA then asked for
the DOH Secretary's reconsideration, and subsequently appealed the DOH's unfavorable
decision with the Office of the President. The OP then reversed Memorandum Order No.
2008-0210 and allowed the referral decking system to continue.

That GAMCA had earlier taken this course indicates that it was not unaware of the
administrative remedies available to it; it simply opted to disregard the doctrine of
exhaustion of administrative remedies and the requirement that there be no other plain,
speedy, and adequate remedy in law when it immediately filed its petition
for certiorari with the RTC.

This blatant disregard of the Rule 65 requirements clearly places GAMCA's petition
outside the exceptions that we recognized in the past in relaxing strict compliance with
the exhaustion of administrative remedies requirement.

Jurisprudence84 shows that this Court never hesitated in the past in relaxing the
application of the rules of procedure to accommodate exceptional circumstances when
their strict application would result in injustice. These instances, founded as they are on
equitable considerations, do not include the undue disreiard of administrative remedies,
particularly when they are readily available. 85

A.4.d. The petitions for certiorari and prohibition against the DOH CDO letters
should have been dismissed outright, as Rule 65 Petitions for Certiorari and
Prohibition are extraordinary remedies given due course only upon compliance
with the formal and substantive requirements.

Note, at this point, that Rule 65 petitions for certiorari and prohibition are discretionary
writs, and that the handling court possesses the authority to dismiss them outright for
failure to comply with the form and substance requirements. Section 6, Rule 65 of the
Rules of Court in this regard provides:
Section 6. Order to comment. - If the petition is sufficient in form and substance to
justify suclr process, the court shall issue an order requiring the respondent or
respondents to comment on the petition within ten (10) days from receipt of a copy
thereof. Such order shall be served on the respondents in such manner as the court may
direct together with a copy of the petition and any annexes thereto. (emphasis, italics,
and underscoring supplied)
Thus, even before requiring the DOH to comment, the RTC could have assessed the
petition for certiorariand prohibition for its compliance with the Rule 65 requirements. At
that point, the petition for certiorariand prohibition should have been dismissed outright,
for failing to comply with Section 1 and Section 4 of Rule 65. When the court instead took
cognizance of the petition, it acted on a matter outside its jurisdiction.

Consequently, the RTC's resulting judgment is void and carries no legal effect. The
decision exempting GAMCA from the application of the referral decking system should
equally have no legal effect.

Noncompliance with the Section 1, Rule 65 requirement that there be no other plain,
speedy, and adequate remedy in law, on the other hand, is more than just a pro-forma
requirement in the present case. Since the petitions for certiorari and prohibition
challenge a governmental act - i.e. action under the DOH CDO letters, as well as the
validity of the instruments under which these letters were issued - compliance with
Section 1, Rule 65 and the doctrine of exhaustion of administrative remedies that judicial
review requires is also mandatory. To recall a previous discussion, the exhaustion of
administrative remedies is also an aspect of ripeness in deciding a constitutional issue.

Thus, GAMCA's disregard of the Rules of Court not only renders the petition dismissible
for failure to first exhaust administrative remedies; the constitutional issues GAMCA
posed before the RTC were not also ripe for adjudication.

5. The Regional Trial Court erred in finding grave abuse of discretion on the part of
the DOH's issuance of the DOH CDO letters.

On the merits, we find that the RTC of Pasay reversibly erred in law when it held that the
DOH acted with grave abuse of discretion m prohibiting GAMCA from implementing the
referral decking system.

In exempting GAMCA from the referral decking system that RA No. 10022 prohibits, the
RTC of Pasay City noted that the regulation per se was not unconstitutional, but its
application to GAMCA would violate the principle of sovereign equality and
independence.

While we agree with the RTC's ultimate conclusion upholding the constitutionality of the
prohibition against the referral decking system under RA No. 10022, our agreement
proceeds from another reason; we disagree that the prohibition does not apply to GAMCA
and with the consequent ruling nullifying the DOH's CDO Letter.

A.5.a. The prohibition against the referral decking system under Section 16, RA No.
10022, is a valid exercise of police power.

In its comment, GAMCA asserts that implementing the prohibition against the referral
decking system would amount to an undue taking of property that violates Article II,
Section 2 of the 1987 Constitution.

It submits that the Securities and Exchange Commission had in fact approved its Articles
of Incorporation and Bylaws that embody the referral decking system; thus, the DOH
cannot validly prohibit the implementation of this system.

GAMCA further claims that its members made substantial investments to upgrade their
facilities and equipment. From this perspective, the August 23, 2010 order constitutes
taking of property without due process of law as its implementation would deprive GAMCA
members of their property.

AMCOW responded to these claims with the argument that the DOH CDO letters
implementing RA No. 10022 are consistent with the State's exercise of the police power
to prescribe regulations to promote the health, safety, and general welfare of the people.
Public interest justifies the State's interference in health matters, since the welfare of
migrant workers is a legitimate public concern. The DOH thus merely performed its duty
of upholding the migrant workers' freedom to consult their chosen clinics for the conduct
of health examinations.
We agree with AMCOW.

The State's police power86 is vast and plenary87 and the operation of a
business,88 especially one that is imbued with public interest (such as healthcare
services),89 falls within the scope of governmental exercise of police power through
regulation.

As defined, police power includes (1) the imposition of restraint on liberty or property, (2)
in order to foster the common good.90 The exercise of police power involves the "state
authority to enact legislation that may interfere with personal liberty or property in order
to promote the general welfare."91

By its very nature, the exercise of the State's police power limits individual rights and
liberties, and subjects them to the "far more overriding demands and requirements of the
greater number."92 Though vast and plenary, this State power also carries limitations,
specifically, it may not be exercised arbitrarily or unreasonably. Otherwise, it defeats the
purpose for which it is exercised, that is, the advancement of the public good. 93

To be considered reasonable, the government's exercise of police power must satisfy the
"valid object and valid means" method of analysis: first, the interest of the public
generally, as distinguished from those of a particular class, requires interference;
and second, the means employed are reasonably necessary to attain the objective
sought and not unduly oppressive upon individuals.94

These two elements of reasonableness are undeniably present in Section 16 of RA No.


10022. The prohibition against the referral decking system is consistent with the State's
exercise of the police power to prescribe regulations to promote the health, safety, and
general welfare of the people. Public interest demands State interference on health
matters, since the welfare of migrant workers is a legitimate public concern.

We note that RA No. 10022 expressly reflects the declared State policies to "uphold the
dignity of its citizens whether in the country or overseas, in general, and Filipino migrant
workers," and to "afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for
all. Towards this end, the State shall provide adequate and timely social, economic and
legal services to Filipino migrant workers." The prohibition against the referral decking
system in Section 16 of RA No. 10022 is an expression and implementation of these state
policies.

The guarantee under Section 16 for OFWs to be given the option to choose a quality
healthcare service provider as expressed in Section 16 (c)95 of RA No. 10022 is
guaranteed by the prohibition against the decking practice and against monopoly
practices in OFW health examinations.96

Section 16 likewise requires employers to accept health examinations from any DOH-
accredited health facility; a refusal could lead to their temporary disqualification under
pertinent rules to be formulated by the Philippine Overseas Employment Authority
(POEA).97

These rules are part of the larger legal framework to ensure the Overseas Filipino
Workers' (OFW) access to quality healthcare services, and to curb existing practices that
limit their choices to specific clinics and facilities.

Separately from the Section 16 prohibition against the referral decking system, RA No.
10022 also prohibits and penalizes the imposition of a compulsory exclusive arrangement
requiring OFWs to undergo health examinations only from specifically designated medical
clinics, institutions, entities or persons. Section 5, in relation to Section 6 of RA No. 10022,
penalizes compulsory, exclusive arrangements98 by imprisonment and fine and by the
automatic revocation of the participating medical clinic's license.

The DOH's role under this framework is to regulate the activities and operations of all
clinics conducting health examinations on Filipino migrant workers as a requirement for
their overseas employment. The DOH is tasked to ensure that:
(c.3) No group or groups of medical clinics shall have a monopoly of exclusively
conducting health examinations on migrant workers for certain receiving countries;

(c.4) Every Filipino migrant worker shall have the freedom to choose any of the DOH-
accredited or DOH-operated clinics that will conduct his/her health examinations and that
his or her rights as a patient are respected. The decking practice, which requires an
overseas Filipino worker to go first to an office for registration and then farmed out to a
medical clinic located elsewhere, shall not be allowed;99
While Section 16 of RA No. 10022 does not specifically define the consequences of
violating the prohibition against the referral decking system, Republic Act No. 4226
(Hospital Licensure Act), which governs the licensure and regulation of hospitals and
health facilities, authorizes the DOH to suspend, revoke, or refuse to renew the license
of hospitals and clinics violating the law.100

These consequences cannot but apply to the violation of the prohibition against the
referral decking system under RA No. 10022. If, under the law, the DOH can suspend,
revoke, or refuse to renew the license of these hospitals upon the finding that they violated
any provision of law (whether those found in RA No. 4226 or in RA No. 10022), it follows-
as a necessarily included lesser power - that the DOH can likewise order these clinics
and their association to cease and desist from practices that the law deems to be
undesirable.

A.5.b. The DOH did not gravely abuse its discretion in issuing the assailed DOH
CDO letters.

As discussed above, the letter-order implementing the prohibition against the referral
decking system is quasi-judicial in nature. This characteristic requires that procedural due
process be observed - that is, that the clinics concerned be given the opportunity to be
heard before the standard found in the law can be applied to them.

Thus, prior to the issuance of the disputed CDO letter, the DOH should have given
GAMCA the opportunity to be heard on whether the prohibition applies to it. Lest this
opportunity to be heard be misunderstood, this DOH obligation raises an issue different
from the question of whether Congress can, under the exercise of police power, prohibit
the referral decking system; this latter issue lies outside the scope of the DOH to pass
upon. The required hearing before the DOH relates solely to whether it properly
implemented, based on the given standards under the law, the prohibition that Congress
decreed under RA No. 10022.

Under normal circumstances, the issuance of a CDO without a prior hearing would violate
GAMCA's procedural due process rights, and would amount to more than a legal
error, i.e., an error equivalent to action without jurisdiction. Rendering a decision quasi-
judicial in nature without providing the opportunity to be heard amounts to a grave abuse
of discretion that divests a quasi-judicial agency of its jurisdiction.

Factual circumstances unique to the present case, however, lead us to conclude that
while it was an error of law for the DOH to issue a CDO without complying with the
requirements of procedural due process, its action did not amount to a grave abuse of
discretion.

Grave abuse of discretion amounts to more than an error of law; it refers to an act that is
so capricious, arbitrary, and whimsical that it amounts to a clear evasion of a positive duty
or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in
an arbitrary and despotic manner because of passion or hostility. 101

Prior to the issuance of its CDO Letter, the DOH had more than sufficient basis to
determine that GAMCA practices the prohibited referral decking system under RA No.
10022. Notably, the DOH had earlier allowed and recognized the referral decking system
that GAMCA practiced through AO 5-01. This recognition was made with GAMCA's
practice in mind. The subsequent administrative orders and department memorandum
suspending and terminating the referral decking system, respectively, all pertain to the
practice that the DOH had authorized under AO 5-01. Even the subject matter of these
issuances do not just pertain to any other referral decking system, but to the "GAMCA
referral decking system."

GAMCA likewise had more than several opportunities to contest the suspension and
eventual revocation of the referral decking system initially pe1mitted under AO 5-01. Its
appeal even reached the Office of the President, which overturned the DOH
Memorandum Order terminating the referral decking system.

That the referral decking system had been subsequently prohibited by law shows the
intent of Congress to prevent and prohibit the practice that GAMCA initiated and which
the President had allowed. The President's duty under our political system is to implement
the law; hence, when Congress subsequently prohibited the practice that GAMCA
initiated, the Executive - including the President -has no choice but to implement it.

Based on these circumstances, while the DOH erred when it issued its CDO letters
without first giving GAMCA the opportunity to prove whether the practice conducted by
GAMCA is the same practice prohibited under RA No. 10022, the DOH conclusion to so
act, in our view, did not constitute grave abuse of discretion that would have divested it
of jurisdiction.

We note that the DOH had sufficient basis when it determined that the referral decking
system prohibited under RA No. 10022 was the same decking system practiced by
GAMCA. To reiterate, the referral decking system was not something new; it was an old
system that GAMCA practiced and was known to all in its scope and operating details.
That GAMCA had previously questioned the DOH prohibition and had been given ample
opportunity to be heard when it filed an appeal before the OP, negate the conclusion that
GAMCA had been aggrieved by precipitate and unfair DOH action.

To be sure, these factual circumstances do not make the CDO letter compliant with
procedural due process. They mitigate, however, the error committed and render it less
than the capricious, arbitrary, and patent refusal to comply with a positive legal duty that
characterizes an act committed with grave abuse of discretion.

The Court furthermore, in several instances,102 has recognized that an administrative


agency may issue an ex parte cease and desist order, where vital public interests
outweigh the need for procedural due process." In these instances, the Court noted that
the affected establishment may contest the ex parteorder, upon which the administrative
agency concerned must conduct a hearing and allow the establishment to be heard. While
jurisprudence has so far used the "vital public interests" standard to pollution cases, it had
not been a grave abuse of discretion on the part of the DOH to consider that GAMCA's
referral decking practice falls within this category. The DOH has long made the factual
finding that the referral decking system hinders our Filipino seafarers' access to quality
and affordable healthcare in its A.O. No. 106, series of 2002.

These circumstances further mitigate whatever legal error the DOH has committed and
render the conclusion that grave abuse of discretion had taken place misplaced.

Since the writs of certiorari and prohibition do not issue against legal errors, but to acts of
grave abuse of discretion, the RTC erred in issuing these writs against the DOH CDO
letters.

6. The prohibition against the referral decking system against GAMCA does not
violate the principle of sovereign equality and independence.

The RTC based its decision to grant the writs of certiorari and prohibition against the DOH
letter-order on the principle of sovereign equality and independence; applying the referral
decking system prohibition against GAMCA violates this principle.
The RTC reasoned out that the prohibition against the referral decking system under
Section 16 of RA No. 10022 must be interpreted to apply only to clinics conducting health
examinations on migrant workers bound for countries that do not require the referral
decking system for the issuance of visas to job applicants.

The RTC observed, too, that the refer al decking system is part of the application
procedure in obtaining visas to enter the GCC States, a procedure made in the exercise
of the sovereign power of the GCC States to protect their nationals from health hazards,
and of their diplomatic power to regulate and screen entrants to their territories.

It also reasoned out that under the principle of sovereign equality and independence of
States, the Philippines cannot interfere with this system and in fact must respect the visa-
granting procedures of foreign states in the same way that they respect our immigration
procedures. Moreover, to restrain GAMCA which is a mere adjunct of HMC (an agent of
GCC States) is to restrain the GCC States themselves.

AMCOW contests the RTC's conclusion, arguing that the principles of sovereign equality
and independence of States do not apply to the present case. According to AMCOW, the
subject matter of this case pertains to a domestic concern as the law and the regulations
that GAMCA assails relate to the operation of medical clinics in the Philippines.

It points out that the Philippines gave GAMCA and its members the privilege of conducting
their businesses domestically; hence, their operations are governed by Philippine laws,
specifically by RA No. 10022 which serves as one of the limitations on the privilege
granted to them. GAMCA's right to engage in business should yield to the State's exercise
of police power. In legal contemplation, therefore, the DOH CDO letters did not prejudice
GAMCA's right to engage in business; nor did they hamper the GAMCA members'
business operations.

AMCOW further insists that the August 23, 2010 and November 2, 2010 orders are
consistent with the State's exercise of the police power to prescribe regulations to
promote the health, safety, and general welfare of the people. Public interest demands
State interference on health matters, since the welfare of migrant workers is a legitimate
public concern. The DOH thus merely performed its duty of upholding the migrant
workers' freedom to choose any of its accredited or operated clinics that will conduct
health examinations.

The DOH, for its part, adds that the implementation of RA No. 10022 cannot be defeated
by agreements entered into by GAMCA with the GCC States. The GCC States, the DOH
points out, are not empowered to determine the Philippines' courses of action with respect
to the operation, within Philippine territory, of medical clinics; the conduct of health
examinations; and the freedom of choice of Filipino migrant workers.

GAMCA responds to these arguments by asserting that the referral decking system is a
part of the application procedure for obtaining visas to enter the GCC States. Hence, it is
an exercise of the sovereign power of the GCC States to protect their nationals from
health hazards, and their diplomatic power to regulate and screen entrants to their
territories. To restrain an agent of the GCC States under the control and acting in
accordance with the direction of these GCC States, restrains the GCC States.

GAMCA also points out that the OFWs would suffer grave and irreparable damage and
injury if the DOH CDO letters would be implemented as the GCC States would not issue
working visas without the GAMCA seal attesting that the OFWs had been medically
examined by GAMCA member clinics.

After considering all these arguments, we find that the RTC's decision misapplied the
principle of sovereign independence and equality to the present case. While the principles
of sovereign independence and equality have been recognized in Philippine
jurisprudence, our recogmtmn of this principle does not extend to the exemption of States
and their affiliates from compliance with Philippine regulatory laws.

A.6. The principle of sovereign equality and independence of states does not
exempt GAMCAfrom the referral decking system prohibition under RA No. 10022.

In Republic of Indonesia v. Vinzon,103 we recognized the principle of sovereign


independence and equality as part of the law of the land. We used this principle to justify
the recognition of the principle of sovereign immunity which exempts the State - both our
Government and foreign governments - from suit. We held:
International law is founded largely upon the principles of reciprocity, comity,
independence, and equality of States which were adopted as part of the law of our land
under Article II, Section 2 of the 1987 Constitution. The rule that a State may not be sued
without its consent is a necessary consequence of the principles of independence and
equality of States. As enunciated in Sanders v. Veridiano II, the practical justification for
the doctrine of sovereign immunity is that there can be no legal right against the authority
that makes the law on which the right depends. In the case of foreign States, the rule is
derived from the principle of the sovereign equality of States, as expressed in the
maxim par in parem non habet imperium. All states are sovereign equals and cannot
assert jurisdiction over one another. A contrary attitude would "unduly vex the peace of
nations."
Our recognition of sovereign immunity, however, has never been unqualified. While we
recognized the principles of independence and equality of States to justify a State's
sovereign immunity from suit, we also restricted state immunity to acts jus imperii, or
public acts. We said that once a State enters into commercial transactions (jus gestionis),
then it descends to the level of a private individual, and is thus not immune from the
resulting liability and consequences of its actions.104

By this recognition, we acknowledge that a foreign government acting in its jus


imperii function cannot be held liable in a Philippine court. Philippine courts, as part of the
Philippine government, cannot and should not take jurisdiction over cases involving the
public acts of a foreign government. Taking jurisdiction would amount to authority over a
foreign government, and would thus violate the principle of sovereign independence and
equality.105
This recognition is altogether different from exempting governments whose agents are in
the Philippines from complying with our domestic laws.106 We have yet to declare in a
case that the principle of sovereign independence and equality exempts agents of foreign
governments from compliance with the application of Philippine domestic law.

In the present case, GAMCA has not adduced any evidence in the court below, nor has
it presented any argument before us showing that the principle of sovereign equality and
independence has developed into an international custom shielding state agents from
compliance with another state's domestic laws. Under this situation, the Court is in no
position to determine whether the practice that GAMCA alleges has indeed crystallized
into an international custom.

GAMCA has never proven in this case, too, that the GCC has extended its sovereign
immunity to GAMCA. Sovereign immunity belongs to the State, and it must first be
extended to its agents before the latter may be considered to possess sovereign
immunity.

Significantly, the Court has even adopted a restrictive approach in recognizing state
immunity, by distinguishing between a State's jus imperii and jus gestionis. It is only when
a State acts in its jus imperii function that we recognize state immunity.107

We point out furthermore that the prohibition against the referral decking system applies
to hospitals and clinics, as well as to OFW employers, and does not seek to interfere with
the GCC's visa requirement processes. RA 10022 prohibits hospitals and clinics in the
Philippines from practicing the referral decking system, and employers from requiring
OFWs to procure their medical examinations from hospitals and clinics practicing the
referral decking system.

The regulation applies to Philippine hospitals and clinics, as well as to employers of


OFWs. It does not apply to the GCCs and their visa processes. That the regulation could
affect the OFWs' compliance with the visa requirements imposed by GCCs does not place
it outside the regulatory powers of the Philippine government.

In the same manner, GCC states continue to possess the prerogative to apply their visa
requirements to any foreign national, including our OFWs, who seeks to enter their
territory; they may refuse to grant them entry for failure to comply with the referral decking
system, or they may adjust to the prohibition against the referral decking system that we
have imposed. These prerogatives lie with the GCC member-states and do not affect at
all the legality of the prohibition against the referral decking system.

Lastly, the effect of the prohibition against the referral decking system is beyond the
authority of this Court to consider. The wisdom of this prohibition has been decided by
Congress, through the enactment of RA No. 10022. Our role in this case is merely to
determine whether our government has the authority to enact the law's prohibition against
the referral decking system, and whether this prohibition is being implemented legally.
Beyond these lies the realm of policy that, under our Constitution's separation of powers,
this Court cannot cross.

WHEREFORE, in the light of these considerations, we hereby GRANT the petitions.


Accordingly, we REVERSE and SET ASIDE the orders dated August 10, 2012 and April
12, 2013 of the Regional Trial Court of Pasay City, Branch 108, in Sp. Civil Action No. R-
PSY-10-04391-CV.

Costs against respondent GAMCA.

SO ORDERED. cralawlawlibrary

G.R. No. 191310, April 11, 2018

PRINCESS TALENT CENTER PRODUCTION, INC., AND/OR LUCHI SINGH


MOLDES, Petitioners, v.DESIREE T. MASAGCA, Respondent.

DECISION

LEONARDO-DE CASTRO,**J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules
of Court filed by petitioners Princess Talent Center Production, Inc. (PTCPI) and Luchi
Singh Moldes (Moldes) assailing: (1) the Decision1 dated November 27, 2009 of the Court
of Appeals in CA-G.R. SP No. 110277, which annulled and set aside the Resolutions
dated November 11, 20082 and January 30, 20093 of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 049990-06, and ordered petitioners and their
foreign principal, Saem Entertainment Company, Ltd. (SAENCO), to jointly and severally
pay respondent Desiree T. Masagca her unpaid salaries for one year, plus attorney's
fees; and (2) the Resolution4 dated February 16, 2010 of the appellate court in the same
case, which denied the Motion for Reconsideration of petitioners and SAENCO.

I
FACTUAL ANTECEDENTS

Sometime in November 2002, respondent auditioned for a singing contest at ABC-


Channel 5 in Novaliches, Quezon City when a talent manager approached her to discuss
her show business potential. Enticed by thoughts of a future in the entertainment industry,
respondent went to the office of petitioner PTCPI, a domestic corporation engaged in the
business of training and development of actors, singers, dancers, and musicians in the
movie and entertainment industry.5 At the office, respondent met petitioner Moldes,
President of petitioner PTCPI, who persuaded respondent to apply for a job as a
singer/entertainer in South Korea.

A Model Employment Contract for Filipino Overseas Performing Artists (OPAS) To


Korea6 (Employment Contract) was executed on February 3, 2003 between respondent
and petitioner PTCPI as the Philippine agent of SAENCO, the Korean principal/promoter.
Important provisions of the Employment Contract are reproduced below:
1. DURATION AND PERIOD OF EFFECTIVITY OF THE CONTRACT

1.1 Duration: This contract shall be enforced for the period of six
months, Extendible by another six months by mutual agreement
of the parties.

Affectivity (sic): The contract shall commence upon the Talent's


departure from The Philippines (Date 6) and shall remain in force
as Stipulated in the duration, unless sooner terminated by the
mutual consent of The parties or due to circumstances beyond
their control. Booking of Talent Shall be effected within three (3)
days upon arrival in Korea, But only after Undergoing Mandatory
Post-Arrival Briefing at the Philippine Embassy Overseas Labor
Office (POLO), Philippine Embassy in Seoul.

2. NAME OF PERFORMANCE VENUE:

Siheung Tourist Hotel Night Club

NAME OF OWNER:

Cho Kang Hyung

ADDRESS:

1622-6 (B2) Jung Wang Dons Siheung Kyung Ki Do

xxxx

(Subject to ocular inspection, Verification, and approval by the POLO)

3. COMPENSATION: The Talent shall receive a monthly compensation of a


Minimum of U.S.D. $600, (Ranging from U.S.D. 500 to 800 based on The
categories of the ARB, skill and experience of the Talent, and of the Performance
Venue) which shall accrue beginning on the day of the Talent's Departure from
the Philippines and shall be paid every end of the month directly To The Talent.
By the Employer, minus the authorized fees of the Philippine Agent and The
Talent Manager, which shall be deducted at a maximum monthly Rates of U.S.
$100 and U.S. $100 for the Philippine Agent and Talent Manager,
respectively. Deductions of $200/month is good for three (3) months only.

4. HOURS OF WORK, RESTDAY AND OVERTIME PAY

4.1 Hours of work: Maximum of Five (5) hours per day.

4.2 Rest day: One (1) day a week

4.3 Overtime Rate: (100) percent of regular rate or the prevailing rate
in Korea as Required by the Labor Standard Act.

xxxx

9. The services of the Talents as provided in this contract shall only be rendered at
the Performance Venue identified in this contract. Should there be a need and
mutual agreement of the parties for the talent to transfer to another Performance
Venue There shall be executed a new contract. The new contract shall be subject
of Verification requirement of the Philippine Overseas Labor Office, Philippine
Embassy.

xxxx

12. TERMINATION:

A. Termination by the Employer: The Employer may terminate the


Contract of Employment for any of the following just causes:
serious misconduct or Willful disobedience of the lawful orders of
the employer, gross or habitual Neglect of duties, violation of the
laws of the host country. When the Termination of the contract is
due to the foregoing causes, the Talent shall Bear the cost of
repatriation. In addition, the Talent may be liable to Blacklisting
and/or other penalties in case of serious offense.
B. Termination by the Talent: The Talent may terminate the contract
for any of The following just causes: when the Talent is maltreated
by the Employer or Any of his/her associates, or when the
employer commits of (sic) the following — Non-payment of Talent
salary, underpayment of salary in violation of this Contract, non-
booking of the Talent, physical molestation, assault or Subjecting
the talent to inhumane treatment or shame. Inhumane treatment
Shall be understood to include forcing or letting the talent to be
used in Indecent performance or in prostitution. In any of the
foregoing case, the Employer shall pay the cost of repatriation and
be liable to garnishment of The escrow deposit, aside from other
penalties that may arise from a case.

C. Termination due to illness: Any of the parties may terminate the


contract on The ground of illness, disease, or injury suffered by
the Talent, where the Latter's continuing employment is prohibited
by law or prejudicial to his/her Health, or to the health of the
employer, or to others. The cost of the Repatriation of the Talent
for any of the foregoing reasons shall be for the Account of the
employer.7
Respondent left for South Korea on September 6, 2003 and worked there as a singer for
nine months, until her repatriation to the Philippines sometime in June 2004. Believing
that the termination of her contract was unlawful and premature, respondent filed a
complaint against petitioners and SAENCO with the NLRC.

Respondent's Allegations

Respondent alleged that she was made to sign two Employment Contracts but she was
not given the chance to read any of them despite her requests. Respondent had to rely
on petitioner Moldes's representations that: (a) her visa was valid for one year with an
option to renew; (b) SAENCO would be her employer; (c) she would be singing in a group
with four other Filipinas8 at Seaman's Seven Pub at 82-8 Okkyo-Dong, Jung-Gu, Ulsan,
South Korea; (d) her Employment Contract had a minimum term of one year, which was
extendible for two years; and (e) she would be paid a monthly salary of US$400.00, less
US$100.00 as monthly commission of petitioners. Petitioner Moldes also made
respondent sign several spurious loan documents by threatening the latter that she would
not be deployed if she refused to do so.

For nine months, respondent worked at Seaman's Seven Pub in Ulsan, South Korea - not
at Siheung Tourist Hotel Night Club in Siheung, South Korea as stated in her Employment
Contract - without receiving any salary from SAENCO. Respondent subsisted on the 20%
commission that she received for every lady's drink the customers purchased for her.
Worse, respondent had to remit half of her commission to petitioner Moldes for the
payment of the fictitious loan. When respondent failed to remit any amount to petitioner
Moldes in May 2004, petitioner Moldes demanded that respondent pay the balance of the
loan supposedly amounting to US$10,600.00. To dispute the loan, respondent engaged
the legal services of Fortun, Narvasa & Salazar, a Philippine law firm, which managed to
obtain copies of respondent's Employment Contract and Overseas Filipino Worker
Information Sheet. It was only then when respondent discovered that her employment
was just for six months and that her monthly compensation was US$600.00, not just
US$400.00.

Respondent further narrated that on June 13, 2004, petitioner Moldes went to South
Korea and paid the salaries of all the performers, except respondent. Petitioner Moldes
personally handed respondent a copy of the loan document for US$10,600.00 and
demanded that respondent terminate the services of her legal counsel in the Philippines.
When respondent refused to do as petitioner Moldes directed, petitioner Moldes withheld
respondent's salary. On June 24, 2004, Park Sun Na (Park), President of SAENCO, 9 went
to the club where respondent worked, dragged respondent outside, and brought
respondent to his office in Seoul where he tried to intimidate respondent into apologizing
to petitioner Moldes and dismissing her counsel in the Philippines. However, respondent
did not relent. Subsequently, Park turned respondent over to the South Korean
immigration authorities for deportation on the ground of overstaying in South Korea with
an expired visa. It was only at that moment when respondent found out that petitioner
Moldes did not renew her visa.

Respondent filed the complaint against petitioners and SAENCO praying that a decision
be rendered declaring them guilty of illegal dismissal and ordering them to pay her unpaid
salaries for one year, inclusive of her salaries for the unexpired portion of her Employment
Contract, backwages, moral and exemplary damages, and attorney's fees.

Petitioners' Allegations

Petitioners countered that respondent signed only one Employment Contract, and that
respondent read its contents before affixing her signature on the same. Respondent
understood that her Employment Contract was only for six months since she underwent
the mandatory post-arrival briefing before the Philippine Labor Office in South Korea,
during which, the details of her Employment Contract were explained to her. Respondent
eventually completed the full term of her Employment Contract, which negated her claim
that she was illegally dismissed.

Petitioners additionally contended that respondent, on her own, extended her


Employment Contract with SAENCO, and so petitioners' liability should not extend
beyond the original six-month term of the Employment Contract because the extension
was made without their participation or consent.

Petitioners likewise averred that they received complaints that respondent violated the
club policies of SAENCO against wearing skimpy and revealing dresses, dancing in a
provocative and immoral manner, and going out with customers after working hours.
Respondent was repatriated to the Philippines on account of her illegal or immoral
activities. Petitioners also insisted that respondent's salaries were paid in full as
evidenced by the nine cash vouchers10 dated October 5, 2003 to June 5, 2004. Petitioners
submitted the Magkasamang Sinumpaang Salaysay11 of respondent's co-workers, Sheila
Marie V. Tiatco (Tiatco) and Carolina Flores (Flores), who confirmed that respondent
violated the club policies of SAENCO and that respondent received her salaries.

Petitioners submitted as well the Sworn Statement12 dated November 9, 2004 of Baltazar
D. Fuentes (Baltazar), respondent's husband, to prove that respondent obtained a loan
from petitioner PTCPI. Baltazar affirmed that petitioner PTCPI lent them some money
which respondent used for her job application, training, and processing of documents so
that she could work abroad. A portion of the loan proceeds was also used to pay for their
land in Lagrimas Village, Tiaong, Quezon, and respondent's other personal expenses.

Petitioner Moldes, for her part, disavowed personal liability, stating that she merely acted
in her capacity as a corporate officer of petitioner PTCPI.

Petitioners thus prayed that the complaint against them be dismissed and that respondent
be ordered to pay them moral and exemplary damages for their besmirched reputation,
and attorney's fees for they were compelled to litigate and defend their interests against
respondent's baseless suit.

Labor Arbiter's Ruling

On May 4, 2006, Labor Arbiter Antonio R. Macam rendered a Decision 13 dismissing


respondent's complaint, based on the following findings:
The facts of the case and the documentary evidence submitted by both parties would
show that herein [respondent] was not illegally dismissed. This Office has noted that the
POEA approved contract declares that the duration of [respondent's] employment was for
six (6) months only. The fact that the duration of [respondent's] employment was for six
(6) months only is substantiated by the documentary evidence submitted by both parties.
Attached is [respondent's] Position Paper as Annex "D" is a Model Employment Contract
for Filipino Overseas Performing Artist to Korea signed by the parties and approved by
the POEA. Also attached to the Position Paper of the [petitioners] as Annex "1" is a copy
of the Employment Contract signed by the parties and approved by POEA. We readily
noted that the common evidence submitted by the parties would prove that [respondent's]
employment was for six (6) months only. The deploying agency, Princess. Talent Center
Production, Inc. processed the [respondent] for a six-month contract only and there is no
showing that the deploying agency participated in the extension of the contract made by
the [respondent] herself. There is likewise no evidence on record which would show that
the POEA approved such an extension. As matters now stand, this Office has no choice
but to honor the six months duration of the contract as approved by the POEA. The
conclusion therefore is that the [respondent] was not illegally dismissed since she was
able to finish the duration of the contract as approved by the POEA.
Following the above ruling, the [respondent] is likewise not entitled to the payment of the
unexpired portion of the employment contract. This Office could not exactly determine
what [respondent] means when she refers to the unexpired portion of the contract. The
[respondent] comes to this Office alleging that [petitioners] are still liable to the new
extended contract of the employment without however presenting the said contract
binding the recruitment agency as jointly and solidarily liable with the principal employer.
Such a document is vital as this will prove the participation of the [petitioners] and the
latter's assumption of responsibility. Without the presentation of the "extended" contract,
the "unexpired portion" could not be determined. [Respondent's] claim therefore for the
payment of the unexpired portion of the contract must also fail.

The crux of the present controversy is whether or not [respondent] was paid her salaries
during the period she worked in Korea. [Respondent] claims that she was not paid her
salaries during the time she worked in Korea. [Petitioners] presented an Affidavit
executed by Filipino workers who worked with [respondent] in Korea declaring that they,
together with the [respondent], were paid by the foreign employer all their salaries and
wages. [Petitioners and SAENCO] likewise presented vouchers showing that the
[respondent] received full payment of her salaries during the time that she worked in
Korea. In the pleading submitted by the [respondent], she never denied the fact that she
indeed signed the vouchers showing full payment of her salaries.

It becomes clear therefore that [respondent] miserably failed to destroy the evidentiary
value of the vouchers presented by the [petitioners]. This Office will not dare to declare
as void or incompetent the vouchers signed by the [respondent] in the absence of any
evidence showing any irregularity so much so that this Office did not fail to notice the
inconsistencies in the [respondent's] position paper.

[Respondent's] claim for the payment of overtime pay likewise lacks merit. There was no
showing that [respondent] actually rendered overtime work. Mere allegation is not
sufficient to establish [respondent's] entitlement to overtime pay. It is [respondent's]
obligation to prove that she actually rendered overtime work to entitle her for the payment
of overtime pay.14
In the end, the Labor Arbiter dismissed for lack of merit respondent's complaint, as well
as all other claims of the parties.15

Ruling of the NLRC

Respondent appealed the Labor Arbiter's Decision before the NLRC. 16 In a


Decision17 dated May 22, 2008, the NLRC ruled in respondent's favor, reasoning that:
There is sufficient evidence to establish the fact that [respondent] was not paid her regular
salaries. A scrutiny of the vouchers presented shows that it bears the peso sign when in
fact the salaries of [respondent] were to be received in Korea. Furthermore, it appears
that the vouchers were signed in one instance due to similarities as to how they were
written.

Despite the fact that We find the vouchers questionable, they prove that [respondent] was
allowed to work beyond the effectivity of her visa. [Petitioners], wanting to prove that they
paid [respondent's] salary, presented vouchers for the period starting October 2003 up to
June 2004. It covers nine (9) months which implies that, despite having a visa good for
six months, they consented to [respondent] working up to nine months. Otherwise, if they
were against [respondent's] overstaying in Korea, they could have asked for her
deportation earlier. Also, if [respondent] was misbehaving and went against their policy,
they could have taken disciplinary action against her earlier.

The "Magkasamang Sinumpaang Salaysay" of Ms. Tiatco and Ms. Flores, which was
presented by [petitioners] to prove the alleged immoral acts of [respondent] and that they
received their salaries on time, is self-serving and deserves scant weight as the affiants
are beholden to [petitioners and SAENCO] from whom they depended their employment.

We find as more credible [respondent's] allegations that she was made to believe that her
contract was for one year and that her overstaying in Korea was with the consent of
[petitioners and SAENCO], and that when she refused to surrender the 50% of her
commission, that was the only time they questioned her stay and alleged that she
committed immoral and illegal acts.

Further, the zealousness of [respondent] in filing a case against [petitioners and


SAENCO] in different government agencies for different causes of action manifests the
intensity of her desire to seek justice for the sufferings she experienced.

There is sufficient evidence to establish that [petitioners and SAENCO] misrepresented


to [respondent] the details of her employment and that she was not paid her salaries.
Hence, she is entitled to be paid her salaries for one year at the rate of $600 per month
as this was what [petitioners and SAENCO] represented to her.

For lack of proof, however, [respondent] is not entitled to her claim for overtime pay. 18
Based on the foregoing, the NLRC ruled:
WHEREFORE, premises considered, the Decision of Labor Arbiter Antonio R. Macam
dated 4 May 2006 is hereby REVERSED and SET ASIDE and a NEW ONE entered
ordering [petitioners and SAENCO] to jointly and severally pay [respondent] her salaries
for one year at a rate of $600 per month, or a total of US$7,200. The claim for overtime
pay is DENIED for lack of sufficient basis.19
Acting on the Motion for Reconsideration20 of petitioners, however, the NLRC issued a
Resolution21 on November 11, 2008, reversing its previous Decision. According to the
NLRC, respondent's appeal was dismissible for several fatal procedural defects, to wit:
Perusal of the records show that [respondent's] new counsel filed on May 31, 2006 a
Motion for Extension of Time to File a Motion for Reconsideration due to lack of material
time in preparing a Motion for Reconsideration. However, [respondent's] counsel filed a
Memorandum of Appeal through registered mail on June 1, 2006 x x x and paid the appeal
fee on July 17, 2006 x x x.

Rule VI, Section 4 of the 2005 Revised Rules and Procedures of the National Labor
Relations Commission provides that:
Section 4, requisites for Perfection of Appeal. - a) The appeal shall be: 1) filed within the
reglementary period provided in Section 1 of this Rule; 2) verified by the appellant himself
in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of
a memorandum of appeal which shall state the grounds relied upon and the arguments
in support thereof, the relief prayed for, and with a statement of the date the appellant
received the appealed decision, resolution or order; 4) in three (3) legibly typewritten or
printed copies; and 5) accompanied by i) proof of payment of the required appeal fee, ii)
posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of
non-forum shopping; and iv) proof of service upon the other parties.
The above-quoted Rules explicitly provides for the requisites for perfecting an appeal,
which [respondent] miserably failed to comply. [Respondent's] Memorandum of Appeal
contains no averments as to the date [respondent] or her counsel received the Decision
of the Labor Arbiter. The appeal is unverified. No certificate of non-forum shopping was
attached to the appeal. The appeal fee was paid only on July 17, 2006, or after more than
forty-six (46) days from the filing of the Memorandum of Appeal on June 1, 2006. Lacking
these mandatory requirements, [respondent's] appeal is fatally defective, and no appeal
was perfected within the reglementary period. Consequently, the Decision of the Labor
Arbiter had become final and executory. The belated filing of the verification and
certification on non-forum shopping will not cure its defect and it only proves that indeed
[respondent's] appeal was not perfected at all.22
Nonetheless, the NLRC set technicalities aside and still proceeded to resolve the case
on the merits, ultimately finding that respondent failed to present evidence to prove she
had been illegally dismissed:
We cannot subscribe to [respondent's] contention that she was illegally dismissed from
her employment. Records show that the Model Employment Contract presented as
evidence by both [respondent] and [petitioners and SAENCO] would prove that
[respondent's] employment was for a period of six (6) months only. Aside from
[respondent's] allegation that [petitioners and SAENCO] misrepresented to her that her
contract is for a period of one (1) year, there is no other evidence on record which will
corroborate and strengthen such allegation. We took note of the fact that [respondent's]
Model Employment Contract was verified by the Labor Attache of the Philippine Embassy
in Korea and duly approved by the Philippines Overseas Employment Administration
(POEA). There is no showing that her contract was extended by [petitioners and
SAENCO], or that an extension was approved by the POEA. All the pieces of
documentary evidence on record prove otherwise.

We agree with [petitioners and SAENCO's] argument that [respondent] was given a copy
of her employment contract prior to her departure for Korea because [respondent] was
required to submit a copy thereof to the Philippine Labor Office upon her arrival in Korea.
We are also convinced that [respondent] read and understood the terms and conditions
of her Model Employment Contract because of the following reasons: First, [respondent]
was informed thereof when a post arrival briefing was conducted at the Philippine
Embassy Overseas Labor Office. This procedure is mandatory, and the booking of the
talent shall be effective only within three (3) days after her arrival in Korea. Second,
[respondent's] passport shows that her visa is valid only for six (6) months x x x. Third,
the Model Employment Contract has been signed by [respondent] on the left hand margin
on each and every page and on the bottom of the last page thereof x x x. Fourth,
[respondent's] claim that [petitioners and SAENCO] forced her in signing two (2)
employment contracts appears to be doubtful considering that she avers that she was not
able to read the terms and conditions of her employment contract. It is amazing how she
was able to differentiate the contents of the two (2) contracts she allegedly signed without
first reading it.

On the basis of the foregoing, [respondent's] contention that she did not know the terms
and conditions of her Model Employment Contract, in particular the provision which states
that her contract and her visa is valid only for six (6) months, lacks credence. Thus, it can
be concluded that she was not dismissed at all by [petitioners and SAENCO] as her
employment contract merely expired.

As to [respondent's] allegation that she was not paid her salaries during her stay in Korea,
[petitioners and SAENCO] presented cash vouchers and affidavits of co-employees
showing that [respondent] was paid US$600 per month by her Korean employer.
[Respondent] failed to prove that the vouchers were faked, or her signatures appearing
thereon were falsified. Hence, [respondent] is not entitled to her claim for unpaid salaries.

On her claim for the payment of her salary for the unexpired portion of her contract, We
agree with the findings of the Labor Arbiter that the same lacks merit considering that she
was able to finish her six (6) month employment contract.23
Consequently, the NLRC granted the Motion for Reconsideration of petitioners and
reinstated the Labor Arbiter's Decision dated May 4, 2006 dismissing respondent's
complaint against petitioners and SAENCO.24

In a subsequent Resolution dated January 30, 2009, the NLRC denied respondent's
Motion for Reconsideration25 as it raised no new matters of substance which would
warrant reconsideration of the NLRC Resolution dated November 11, 2008.

Ruling of the Court of Appeals

Respondent sought remedy from the Court of Appeals by filing a Petition


for Certiorari,26 alleging that the NLRC acted with grave abuse of discretion amounting to
excess or lack of jurisdiction in reinstating the Labor Arbiter's Decision.

The Court of Appeals, in its Decision dated November 27, 2009, took a liberal approach
by excusing the technical lapses of respondent's appeal before the NLRC for the sake of
substantial justice:
The requisites for perfecting an appeal before the NLRC are laid down in Rule VI of the
2005 Revised Rules of Procedure of the NLRC. Section 4 of the said Rule requires that
the appeal shall be verified by the appellant, accompanied by a certification of non-forum
shopping and with proof of payment of appeal fee. As a general rule, these requirements
are mandatory and non-compliance therewith would render the appealed judgment final
and executory. Be that as it may, jurisprudence is replete that courts have adopted a
relaxed and liberal interpretation of the rules on perfection of appeal so as to give way to
the more prudent policy of deciding cases on their merits and not on technicality,
especially if there was substantial compliance with the rules.

In the case of Manila Downtown YMCA vs. Remington Steel Corp., the Supreme Court
held that non-compliance with [the] verification does not necessarily render the pleading
fatally defective, hence, the court may order its correction if verification is lacking, or act
on the pleading although it is not verified, if the attending circumstances are such that
strict compliance with the Rules may be dispensed with in order that the ends of justice
may thereby served. Moreover, in Roadway Express, Inc. vs. CA, the High Court
allowed the filing of the certification against forum shopping fourteen (14) days before the
dismissal of the petition. In Uy v. LandBank, the petition was reinstated on the ground of
substantial compliance even though the verification and certification were submitted only
after the petition had already been originally dismissed.

Here, the records show that [respondent] had no intent to delay, or prolong the
proceedings before the NLRC. In fact, the NLRC, in its Resolution dated November 11,
2008 took note that [respondent] belatedly filed her verification and certification on non-
forum shopping. Such belated filing should be considered as substantial compliance with
the requirements of the law for perfecting her appeal to the NLRC. Moreover, the appeal
fee was eventually paid on July 17, 2006. Clearly, [respondent] had demonstrated
willingness to comply with the requirements set by the rules. Besides, in its earlier
Decision dated May 22, 2008, the First Division of the NLRC brushed aside these
technicalities and gave due course to [respondent's] appeal.

Verily, We deem it prudent to give a liberal interpretation of the technical rules on appeal,
talcing into account the merits of [respondent's] case. After all, technical rules of
procedure in labor cases are not to be strictly applied in order to serve the demands of
substantial justice.27 (Citations omitted.)
The appellate court then held that respondent was dismissed from employment without
just cause and without procedural due process and that petitioners and SAENCO were
solidarity liable to pay respondent her unpaid salaries for one year and attorney's fees:
Time and again, it has been ruled that the onus probandi to prove the lawfulness of the
dismissal rests with the employer. In termination cases, the burden of proof rests upon
the employer to show that the dismissal was for just and valid cause. Failure to do so
would necessarily mean that the dismissal was not justified and, therefore, was illegal.
In Royal Crown Internationale vs. National Labor Relations Commission and
Nacionales, the Supreme Court held that where termination cases involve a Filipino
worker recruited and deployed for overseas employment, the burden to show the validity
of the dismissal naturally devolves upon both the foreign-based employer and the
employment agency or recruitment entity which recruited the worker, for the latter is not
only the agent of the former, but is also solidarity liable with its foreign principal for any
claims or liabilities arising from the dismissal of the worker.

In the case at bar, [petitioners] failed to discharge the burden of proving that [respondent]
was terminated from employment for a just and valid cause.
[Petitioners'] claim that [respondent] was deported because her employment contract has
already expired, was without any basis. Before being deployed to South Korea,
[petitioners] made [respondent] believe that her contract of employment was for one (1)
year. [Respondent] relied on such misrepresentation and continuously worked from
September 11, 2003 up [to] June 24, 2004 or for more than nine (9) months. [Petitioners]
never questioned her stay beyond the six-month period. If [petitioners] were really against
her overstaying in Korea, they could have easily asked their principal, [SAENCO], to
facilitate her immediate deportation. Even when [petitioner] Moldes sent the demand letter
to [respondent] in May 2004 or when she came to Korea to pay the salaries of the
performers in June 2004, she never mentioned that [respondent's] contract has already
expired.

Moreover, in the Model Employment Contract for Filipino Overseas Performing Artists
(OPAS) to Korea filed with the POEA which was entered into between [respondent] and
[petitioners], it was categorically stated therein that the name of her performance venue
was Si Heung Tourist Hotel Night Club, owned by Cho Kang Hyung and with address at
Jung Wang Dong Siheung Kuyng Ki Do. However, [respondent] was made to work at
Seaman's Seven Pub located at Ulsan, South Korea owned by a certain Lee Young-Gun.
[Respondent's] employment contract also states that she should be receiving a monthly
salary of US$600.00 and not US$400.00 as represented to her by [petitioner] Moldes.

The Court cannot likewise adhere to [petitioners'] claim that [respondent] committed
serious misconduct and willful disobedience to the lawful orders of her employer when
she allegedly danced in an immoral manner, wore skimpy costumes, and went out with
clients. This Court is convinced from the records and pictures submitted by [respondent]
that her Korean employer, Lee Young-Gun, ordered them to wear provocative skirts while
dancing and singing to make the pub more attractive to their customers. Even the
Seaman's Seven Pub poster itself was advertising its singers and dancers wearing
provocative dresses. [Respondent] was not even hired as a dancer, but only as a singer
as shown by her Overseas Filipino Worker Information. Besides, if [respondent] was
misbehaving offensively as early as September 2003, her employer could have likewise
terminated her employment at the earliest opportunity to protect its interest. Instead,
[respondent] was allowed to work even beyond the period of her contract. Thus,
[petitioners'] defenses appear to be more of an afterthought which could not be given any
weight.

Furthermore, [respondent] was not afforded her right to procedural due process of notice
and hearing before she was terminated. In the same case of Royal Crown
Internationale vs. National Labor Relations Commission and Nacionales, the
Supreme Court ruled that all Filipino workers, whether employed locally or overseas,
enjoy the protective mantle of Philippine labor and social legislation, contract stipulations
to the contrary notwithstanding. This pronouncement is in keeping with the basic policy
of the State to afford full protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between workers
and employers.
In the instant case, the records show that [respondent] was publicly accosted and
humiliated by one Park Sun Na, the President of [SAENCO], and was brought to its office
in Seoul, Korea, which was a six (6) hour drive from the pub. Such acts were witnessed
and narrated by Wolfgang Pelzer, a Professor in the School of English, University of
Ulsan, South Korea and a frequent client of Seaman's Seven Pub, in his Affidavit dated
August 16, 2004. When it became apparent that [respondent] would not be apologizing
to [petitioner] Moldes nor would she dismiss her lawyer in the Philippines, Park Sun Na
turned her over to the local authorities of South Korea. [Respondent] was then deported
to the Philippines allegedly for expiration of her visa. Worst, she was not allowed to get
her personal belongings which she left at the pub.

It may also be noted that [respondent] went to all the trouble of filing cases against
[petitioners] in different government agencies for different causes of action. Such
zealousness of [respondent] manifests the intensity of her desire to seek justice for the
wrong done to her.28 (Citations omitted.)
The Court of Appeals determined the respective liabilities of petitioners and SAENCO for
respondent's illegal dismissal to be as follows:
For being illegally dismissed, [respondent] is rightfully entitled to her unpaid salaries for
one (1) year at the rate of US$600.00 per month or a total of US$7,200.00. The
US$600.00 per month was based on the rate indicated in her contract [of] employment
filed with the POEA. [Petitioners] also failed to present convincing evidence that
[respondent's] salaries were actually paid. The cash vouchers presented by [petitioners]
were of doubtful character considering that they do not bear [SAENCO's] name and tax
identification numbers. The vouchers also appear to have been signed in one instance
due to the similarities as to how they were written.

[Petitioner PTCPI and SAENCO] should be held solidarity liable for the payment of
[respondent's] salaries. In Datuman vs. First Cosmopolitan Manpower and Promotion
Services, Inc., the Supreme Court ruled that private employment agencies are held
jointly and severally liable with the foreign-based employer for any violation of the
recruitment agreement or contract of employment. This joint and solidary liability imposed
by law against recruitment agencies and foreign employers is meant to assure the
aggrieved worker of immediate and sufficient payment of what is due him. This is in line
with the policy of the state to protect and alleviate the plight of the working class.

We likewise rule that [petitioner] Moldes should be held solidarity liable with [petitioner
PTCPI and SAENCO] for [respondent's] unpaid salaries for one year. Well settled is the
rule that officers of the company are solidarity liable with the corporation for the
termination of employees if they acted with malice or bad faith. Here, [petitioner] Moldes
was privy to [respondent's] contract of employment by taking an active part in the latter's
recruitment and deployment abroad. [Petitioner] Moldes also denied [respondent's] salary
for a considerable period of time and misrepresented to her the duration of her contract
of employment.

[Respondent] should also be awarded attorney's fees equivalent to ten percent (10%) of
the total monetary awards. In Asian International Manpower Services, Inc., (AIMS) vs.
Court of Appeals and Lacerna, the Supreme Court held that in actions for recovery of
wages or where an employee was forced to litigate and thus incurred expenses to protect
his rights and interests, a maximum often percent (10%) of the total monetary award by
way of attorney's fees is justified under Article 111 of the Labor Code, Section 8, Rule
VIII, Book III of its Implementing Rules, and paragraph 7, Article 2208 of the Civil
Code.29 (Citations omitted.)
The dispositive portion of the judgment of the appellate court reads:
WHEREFORE, premises considered, the instant petition for is hereby GRANTED. The
assailed Resolutions of public respondent NLRC, First Division, dated November 11,
2008 and January 30, 2009 are ANNULLED AND SET ASIDE. Accordingly, [petitioner
PTCPI, SAENCO, and petitioner Moldes] are ORDERED to jointly and severally pay
[respondent's] unpaid salaries for one (1) year at a rate of US$600.00 per month or a total
of US$7,200.00. In addition, [petitioners and SAENCO] are ORDERED to jointly and
severally pay [respondent] attorney's fees equivalent to ten percent (10%) of the total
monetary award.30
The Motion for Reconsideration31 of petitioners was denied by the Court of Appeals in a
Resolution dated February 16, 2010 because the issues raised therein were already
judiciously evaluated and passed upon by the appellate court in its previous Decision,
and there was no compelling reason to modify or reverse the same.

II
THE RULING OF THE COURT

Petitioners filed the instant Petition for Review on Certiorari under Rule 45 of the Rules
of Court assigning a sole error on the part of the Court of Appeals:
The Honorable Court of Appeals erred and abused its action when it ruled that private
respondent is entitled to recover from the petitioners her alleged unpaid salaries during
her employment in South Korea despite of (sic) the abundance of proof that she was fully
paid of (sic) her salaries while working as [an] overseas contract worker in South Korea. 32
Petitioners maintain that respondent initially worked at Siheung Tourist Hotel Night Club
(Siheung Night Club). After completing her six-month employment contract in Siheung
Night Club, respondent decided to continue working at Ulsan Seaman's Seven Pub
without the consent of petitioners. Throughout her employment in South Korea,
respondent's salaries were paid as evidenced by the cash vouchers and Entertainer
Wage Roster,33 which were signed by respondent and attached to the "Reply" 34 dated
January 11, 2010 of Park, Chief Executive Officer (CEO) of SAENCO, duly notarized per
the Certificate of Authentication35 dated January 25, 2010 issued by Consul General
Sylvia M. Marasigan of the Philippine Embassy in Seoul, South Korea and the Notarial
Certificate of Sang Rock Law and Notary Office, Inc. 36

Petitioners contend that respondent totally failed to discharge the burden of proving
nonpayment of her salaries, yet, the Court of Appeals still ordered petitioners to pay the
same on the basis of respondent's bare allegations.

Petitioners also argue that SAENCO would not risk its status as a reputable entertainment
and promotional entity by violating South Korean labor law. Petitioners assert that in the
absence of any showing that SAENCO was at anytime charged with nonpayment of its
employee's salaries before the Labor Ministry of South Korea, petitioners could not be
deemed to have breached the Employment Contract with respondent. Petitioners
describe respondent's complaint as plain harassment.

Thus, petitioners pray that the Court nullify the Decision dated November 27, 2009 and
Resolution dated February 16, 2010 of the Court of Appeals.

The Petition is partly meritorious.

Questions of Fact

It is apparent from a perusal of the Petition at bar that it essentially raises questions of
fact. Petitioners assail the findings of the Court of Appeals on the ground that the evidence
on record does not support respondent's claims of illegal dismissal and nonpayment of
salaries. In effect, petitioners would have the Court sift through, calibrate, and re-examine
the credibility and probative value of the evidence on record so as to ultimately decide
whether or not there is sufficient basis to hold petitioners liable for the payment of
respondent's salaries for one year, plus attorney's fees. 37

Normally, it is not the task of the Court to re-examine the facts and weigh the evidence
on record, for basic is the rule that the Court is not a trier of facts, and this rule applies
with greater force in labor cases. Questions of fact are for the labor tribunals to resolve.
It is elementary that the scope of this Court's judicial review under Rule 45 of the Rules
of Court is confined only to errors of law and does not extend to questions of fact.
However, the present case falls under one of the recognized exceptions to the rule, i.e.,
when the findings of the Labor Arbiter, the NLRC, and/or the Court of Appeals are in
conflict with one another. The conflicting findings of the Labor Arbiter, the NLRC, and the
Court of Appeals pave the way for this Court to review factual issues even if it is exercising
its function of judicial review under Rule 45.38

As the Court reviews the evidence on record, it notes at the outset that petitioners are
presenting new evidence herein never presented in the previous proceedings,
particularly, Park's notarized "Reply" dated January 11, 2010 and the attached Entertainer
Wage Roster. The Court is precluded from considering and giving weight to said evidence
which are presented for the first time on appeal. Fairness and due process dictate that
evidence and issues not presented below cannot be taken up for the first time on appeal. 39

It is true that the Court had declared in previous cases that strict adherence to the
technical rules of procedure is not required in labor cases. However, the Court also
highlights that in such cases, it had allowed the submission of evidence for the first
time on appeal with the NLRC in the interest of substantial justice, and had further
required for the liberal application of procedural rules that the party should adequately
explain the delay in the submission of evidence and should sufficiently prove the
allegations sought to be proven.40 In the instant case, petitioners did not submit the
evidence during the administrative proceedings before the Labor Arbiter and NLRC or
even during the proceedings before the Court of Appeals, and petitioners did not offer
any explanation at all as to why they are submitting the evidence only on appeal before
this Court. Hence, the Court is not inclined to relax the rules in the present case in
petitioners' favor.

Moreover, in its review of the evidence on record, the Court bears in mind the settled rule
that in administrative and quasi-judicial proceedings, substantial evidence is considered
sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant
evidence as a reasonable mind might accept as adequate to support a conclusion, even
if other minds, equally reasonable, might conceivably opine otherwise.41 It is also a basic
rule in evidence that each party must prove his/her affirmative allegations. Since the
burden of evidence lies with the party who asserts an affirmative allegation, the plaintiff
or complainant has to prove his/her affirmative allegation in the complaint and the
defendant or the respondent has to prove the affirmative allegations in his/her affirmative
defenses and counterclaim.42

Petitioner's Illegal Dismissal

The Constitutional guarantee of security of tenure extends to Filipino overseas contract


workers as the Court declared in Sameer Overseas Placement Agency, Inc. v. Cabiles43:
Security of tenure for labor is guaranteed by our Constitution.

Employees are not stripped of their security of tenure when they move to work in a
different jurisdiction. With respect to the rights of overseas Filipino workers, we follow the
principle of lex loci contractus.

Thus, in Triple Eight Integrated Services, Inc. v. NLRC, this court noted:
Petitioner likewise attempts to sidestep the medical certificate requirement by contending
that since Osdana was working in Saudi Arabia, her employment was subject to the laws
of the host country. Apparently, petitioner hopes to make it appear that the labor laws of
Saudi Arabia do not require any certification by a competent public health authority in the
dismissal of employees due to illness.

Again, petitioner's argument is without merit.

First, established is the rule that lex loci contractus (the law of the place where the
contract is made) governs in this jurisdiction. There is no question that the contract
of employment in this case was perfected here in the Philippines. Therefore, the
Labor Code, its implementing rules and regulations, and other laws affecting labor
apply in this case. Furthermore, settled is the rule that the courts of the forum will not
enforce any foreign claim obnoxious to the forum's public policy. Here in the Philippines,
employment agreements are more than contractual in nature. The Constitution itself, in
Article XIII, Section 3, guarantees the special protection of workers, to wit:
The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for
all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work, and a
living wage. They shall also participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.

xxxx
This public policy should be borne in mind in this case because to allow foreign employers
to determine for and by themselves whether an overseas contract worker may be
dismissed on the ground of illness would encourage illegal or arbitrary pre-termination of
employment contracts, x x x.
Even with respect to fundamental procedural rights, this court emphasized in PCL
Shipping Philippines, Inc. v. NLRC, to wit:
Petitioners admit that they did not inform private respondent in writing of the charges
against him and that they failed to conduct a formal investigation to give him opportunity
to air his side. However, petitioners contend that the twin requirements of notice and
hearing applies strictly only when the employment is within the Philippines and that these
need not be strictly observed in cases of international maritime or overseas employment.

The Court does not agree. The provisions of the Constitution as well as the Labor
Code which afford protection to labor apply to Filipino employees whether working
within the Philippines or abroad. Moreover, the principle of lex loci contractus (the
law of the place where the contract is made) governs in this jurisdiction. In the
present case, it is not disputed that the Contract of Employment entered into by and
between petitioners and private respondent was executed here in the Philippines with the
approval of the Philippine Overseas Employment Administration (POEA). Hence, the
Labor Code together with its implementing rules and regulations and other laws affecting
labor apply in this case. x x x.
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or
authorized cause and after compliance with procedural due process requirements.
(Citations omitted.)
Since respondent's Employment Contract was executed in the Philippines on February 3,
2003, Philippine Constitution and labor laws governed respondent's employment with
petitioners and SAENCO. An employee's right to security of tenure, protected by the
Constitution and statutes, means that no employee shall be dismissed unless there are
just or authorized causes and only after compliance with procedural and substantive due
process. A lawful dismissal by an employer must meet both substantive and procedural
requirements; in fine, the dismissal must be for a just or authorized cause and must
comply with the rudimentary due process of notice and hearing. 44

It is undisputed that when respondent was dismissed from employment and repatriated
to the Philippines in June 2004, her original six-month Employment Contract with
SAENCO had already expired.
Per the plain language of respondent's Employment Contract with SAENCO, her
employment would be enforced for the period of six months commencing on the date
respondent departed from the Philippines, and extendible by another six months by
mutual agreement of the parties. Since respondent left for South Korea on September 6,
2003, the original six-month period of her Employment Contract ended on March 5, 2004.

Although respondent's employment with SAENCO was good for six months only (i.e.,
September 6, 2003 to March 5, 2004) as stated in the Employment Contract, the Court is
convinced that it was extended under the same terms and conditions for another six
months (i.e., March 6, 2004 to September 5, 2004). Respondent and petitioners submitted
evidence establishing that respondent continued to work for SAENCO in Ulsan, South
Korea even after the original six-month period under respondent's Employment Contract
expired on March 5, 2004. Ideally, the extension of respondent's employment should have
also been reduced into writing and submitted/reported to the appropriate Philippine labor
authorities. Nonetheless, even in the absence of a written contract evidencing the six-
month extension of respondent's employment, the same is practically admitted by
petitioners, subject only to the defense that there is no proof of their knowledge of or
participation in said extension and so they cannot be held liable for the events that
transpired between respondent and SAENCO during the extension period. Petitioners
presented nine vouchers to prove that respondent received her salaries from SAENCO
for nine months. Petitioners also did not deny that petitioner Moldes, President of
petitioner PTCPI, went to confront respondent about the latter's outstanding loan at the
Seaman's Seven Club in Ulsan, South Korea in June 2004, thus, revealing that petitioners
were aware that respondent was still working for SAENCO up to that time.

Hence, respondent had been working for SAENCO in Ulsan, South Korea, pursuant to
her Employment Contract, extended for another six-month period or until September 5,
2004, when she was dismissed and repatriated to the Philippines by SAENCO in June
2004. With this finding, it is unnecessary for the Court to still consider and address
respondent's allegations that she had been misled into believing that her Employment
Contract and visa was good for one year.

Respondent decries that she was illegally dismissed, while petitioners assert that
respondent was validly dismissed because of her expired work visa and her provocative
and immoral conduct in violation of the club policies.

The Court finds that respondent was illegally dismissed.

Dismissal from employment has two facets: first, the legality of the act of dismissal, which
constitutes substantive due process; and, second, the legality of the manner of dismissal,
which constitutes procedural due process. The burden of proof rests upon the employer
to show that the disciplinary action was made for lawful cause or that the termination of
employment was valid. Unsubstantiated suspicions, accusations, and conclusions of the
employer do not provide legal justification for dismissing the employee. When in doubt,
the case should be resolved in favor of labor pursuant to the social justice policy of our
labor laws and the 1987 Constitution.45
As previously discussed herein, SAENCO extended respondent's Employment Contract
for another six months even after the latter's work visa already expired. Even though it is
true that respondent could not legitimately continue to work in South Korea without a work
visa, petitioners cannot invoke said reason alone to justify the premature termination of
respondent's extended employment. Neither petitioners nor SAENCO can feign
ignorance of the expiration of respondent's work visa at the same time as her original six-
month employment period as they were the ones who facilitated and processed the
requirements for respondent's employment in South Korea. Petitioners and SAENCO
should also have been responsible for securing respondent's work visa for the extended
period of her employment. Petitioners and SAENCO should not be allowed to escape
liability for a wrong they themselves participated in or were responsible for.

Petitioners additionally charge respondent with serious misconduct and willful


disobedience, contending that respondent violated club policies by engaging in illegal
activities such as wearing skimpy and revealing dresses, dancing in an immoral or
provocative manner, and going out with customers after working hours. As evidence of
respondent's purported club policy violations, petitioners submitted the joint affidavit of
Tiatco and Flores, respondent's co-workers at the club.

The Court, however, is not swayed. Aside from their bare allegations, petitioners failed to
present concrete proof of the club policies allegedly violated by respondent. The club
policies were not written down. There is no allegation, much less, evidence, that
respondent was at least verbally apprised of the said club policies during her employment.

To refute petitioners' assertions against her, respondent submitted a poster promoting


the club and pictures46 of respondent with her co-workers at the said club. Based on said
poster and pictures, respondent did not appear to be wearing dresses that were skimpier
or more revealing than those of the other women working at the club. Respondent also
presented the Affidavit47 dated August 16, 2004 of Wolfgang Pelzer (Pelzer), a Canadian
citizen who was a regular patron of the club. According to Pelzer, respondent was
appropriately dressed for the songs she sang, and while respondent was employed as a
singer, she was also pressured into dancing onstage and she appeared hesitant and
uncomfortable as she danced. As between the allegations of Pelzer, on one hand, and
those of Tiatco and Flores, on the other hand, as regards respondent's behavior at the
club, the Court accords more weight to the former as Pelzer can be deemed a
disinterested witness who had no apparent gain in executing his Affidavit, as opposed to
Tiatco and Flores who were still employed by SAENCO when they executed their joint
affidavit.

Lastly, as the Court of Appeals pertinently observed, if respondent was truly misbehaving
as early as September 2003 as petitioners alleged, SAENCO would have terminated her
employment at the earliest opportunity to protect its interest. Instead, SAENCO even
extended respondent's employment beyond the original six-month period. The Court
likewise points out that there is absolutely no showing that SAENCO, at any time during
the course of respondent's employment, gave respondent a reminder and/or warning that
she was violating club policies.

This leads to another finding of the Court in this case, that petitioners also failed to afford
respondent procedural due process.

Article 277(b) of the Labor Code, as amended, mandates that the employer shall furnish
the worker whose employment is sought to be terminated a written notice stating the
causes for termination and shall afford the latter ample opportunity to be heard and to
defend himself/herself with the assistance of his/her representative, if he/she so desires.
Per said provision, the employer is actually required to give the employee two notices:
the first is the notice which apprises the employee of the particular acts or omissions for
which his/her dismissal is being sought along with the opportunity for the employee to air
his/her side, while the second is the subsequent notice of the employer's decision to
dismiss him/her.48

Again, the Court stresses that the burden of proving compliance with the requirements of
notice and hearing prior to respondent's dismissal from employment falls on petitioners
and SAENCO, but there had been no attempt at all by petitioners and/or SAENCO to
submit such proof. Neither petitioners nor SAENCO described the circumstances how
respondent was informed of the causes for her dismissal from employment and/or the
fact of her dismissal.

In contrast, respondent was able to recount in detail the events which led to her dismissal
from employment and subsequent repatriation to the Philippines, corroborated in part by
Pelzer. It appears that on June 13, 2004, petitioner Moldes personally went to see
respondent in Ulsan, South Korea to demand that respondent pay the loan and dismiss
the counsel respondent hired in the Philippines to contest the same; respondent,
however, refused. On June 24, 2004, Park confronted respondent while she was working
at the club, forcibly took her away from the club in Ulsan, and brought her to his office in
Seoul. Park tried to intimidate respondent into agreeing to Moldes's demands. When his
efforts failed, Park surrendered respondent to the South Korean authorities and she was
deported back to the Philippines on account of her expired work visa.

To reiterate, respondent could only be dismissed for just and authorized cause, and after
affording her notice and hearing prior to her termination. SAENCO had no valid cause to
terminate respondent's employment. Neither did SAENCO serve two written notices upon
respondent informing her of her alleged club policy violations and of her dismissal from
employment, nor afforded her a hearing to defend herself. The lack of valid cause,
together with the failure of SAENCO to comply with the twin-notice and hearing
requirements, underscored the illegality surrounding respondent's dismissal. 49

The Liabilities of Petitioners and SAENCO

From its findings herein that (1) respondent's Employment Contract had been extended
for another six months, ending on September 5, 2004; and (2) respondent was illegally
dismissed and repatriated to the Philippines in June 2004, the Court next proceeds to rule
on the liabilities of petitioners and SAENCO to respondent.

Respondent's monetary claims against petitioners and SAENCO is governed by Section


10 of Republic Act No. 8042, otherwise known as The Migrant Workers and Overseas
Filipinos Act of 1995, which provides:
Section 10. Money Claims. — Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the
filing of the complaint, the claims arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for


any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
monetary claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and
solidarity liable with the corporation or partnership for the aforesaid claims and
damages.

Such liabilities shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification made
locally or in a foreign country of the said contract.

Any compromise/amicable settlement or voluntary agreement on monetary claims


inclusive of damages under this section shall be paid within four (4) months from the
approval of the settlement by the appropriate authority.

In case of termination of overseas employment without just, valid or authorized


cause as defined by law or contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of his employment contract or
for three (3) months for every year of the unexpired term, whichever is
less.(Emphases supplied.)
The Court finds that respondent had been paid her salaries for the nine months she
worked in Ulsan, South Korea, so she is no longer entitled to an award of the same.

It is a settled rule of evidence that the one who pleads payment has the burden of proving
it. Even where the plaintiff must allege nonpayment, the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove
nonpayment.50

In the case at bar, petitioners submitted nine cash vouchers with respondent's signature.
That the nine cash vouchers did not bear the name of SAENCO and its Tax Identification
Number is insignificant as there is no legal basis for requiring such. The vouchers clearly
state that these were "salary full payment" for the months of October 5, 2003 to June 5,
2004 for US$600.00 to respondent and each of the vouchers was signed received by
respondent. After carefully examining respondent's signatures on the nine cash vouchers,
and even comparing them to respondent's signatures on all the pages of her Employment
Contract, the Court observes that respondent's signatures on all documents appear to be
consistently the same. The consistency and similarity of respondent's signatures on all
the documents supports the genuineness of said signatures. At this point, the burden of
evidence has shifted to respondent to negate payment of her salaries.

Respondent, though, admits that the signatures on the nine cash vouchers are hers but
asserts that she really had not received her salaries and was only made to sign said
vouchers all in one instance. Respondent further avers that she was made to believe that
her salaries would be deposited to her bank account, and she presents as proof the
passbook of her bank account showing that no amount equivalent to her salary was ever
deposited.

The Court is not persuaded.

Absent any corroborating evidence, the Court is left only with respondent's bare
allegations on the matter. Pelzer's statements in his Affidavit concerning the nonpayment
of respondent's salaries are hearsay, dependent mainly on what respondent confided to
him. It makes no sense to the Court that respondent would agree to an extension of her
Employment Contract for another six months if she had not been receiving her salaries
for the original six-month period. From her own actuations, respondent does not appear
to be totally helpless and gullible. Respondent, in fact, was quite zealous in protecting her
rights, hiring one of the well-known law firms in the Philippines to represent her against
petitioner Moldes who was demanding payment of a loan which respondent insisted was
fictitious. Respondent also stood up to and refused to given in to the demands of both
petitioner Moldes and Park even during face-to-face confrontations. The Court then
cannot believe that respondent would simply sign the nine cash vouchers even when she
did not receive the corresponding salaries for the same. Respondent failed to establish
that the passbook she submitted was for her bank account for payroll payments from
SAENCO; it could very well just be her personal bank account to which she had not made
any deposit. The Court, unlike the Court of Appeals, is not ready to jump to the conclusion
that the vouchers were all prepared on the same occasion and disregard their evidentiary
value simply based on their physical appearance and in the total absence of any
corroborating evidence.

Nonetheless, pursuant to the fifth paragraph of Section 10 of Republic Act No. 8042,
respondent is entitled to an award of her salaries for the unexpired three months of her
extended Employment Contract, i.e., July to September 2004.51 Given that respondent's
monthly salary was US$600.00, petitioners and SAENCO shall pay respondent a total of
US$1,800.00 for the remaining three months of her extended Employment Contract. The
said amount, similar to backwages, is subject to legal interest of 12% per annum from
respondent's illegal dismissal in June 2004 to June 30, 2013 and 6% per annum from July
1, 2013 to the date this Decision becomes final and executory. 52 Respondent also has
the right to the reimbursement of her placement fee with interest of 12% per annum from
her illegal dismissal in June 2004 to the date this Decision becomes final and executory. 53

Moreover, the award of attorney's fees to respondent is likewise justified. It is settled that
in actions for recovery of wages or where an employee was forced to litigate and incur
expenses to protect his/her right and interest, he/she is entitled to an award of attorney's
fees equivalent to 10% of the award.54

Finally, all of the foregoing monetary awards in respondent's favor shall earn legal interest
of 6% per annum from the time this Decision becomes final and executory until fully
satisfied.55

In an attempt to escape any liability to respondent, petitioners assert that only SAENCO
should be answerable for respondent's illegal dismissal because petitioners were not
privy to the extension of respondent's Employment Contract beyond the original six-
month period. Petitioner Moldes additionally argues that she should not be held
personally liable as a corporate officer of PTCPI without evidence that she had acted with
malice or bad faith.

Petitioners' arguments are untenable considering the explicit language of the second
paragraph of Section 10 of Republic Act No. 8042, reproduced below for easier reference:
The liability of the principal/employer and the recruitment/placement agency for any and
all claims under this section shall be joint and several. This provision shall be incorporated
in the contract for overseas employment and shall be a condition precedent for its
approval. The performance bond to be filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money claims or damages that may be
awarded to the workers. If the recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case may be, shall themselves be
jointly and solidarity liable with the corporation or partnership for the aforesaid claims and
damages.
The aforequoted provision is plain and clear, the joint and several liability of the
principal/employer, recruitment/placement agency, and the corporate officers of the latter,
for the money claims and damages of an overseas Filipino worker is absolute and without
qualification. It is intended to give utmost protection to the overseas Filipino worker, who
may not have the resources to pursue her money claims and damages against the foreign
principal/employer in another country. The overseas Filipino worker is given the right to
seek recourse against the only link in the country to the foreign principal/employer, i.e.,
the recruitment/placement agency and its corporate officers. As a result, the liability of
SAENCO, as principal/employer, and petitioner PTCPI, as recruitment/placement
agency, for the monetary awards in favor of respondent, an illegally dismissed employee,
is joint and several. In turn, since petitioner PTCPI is a juridical entity, petitioner Moldes,
as its corporate officer, is herself jointly and solidarity liable with petitioner PTCPI for
respondent's monetary awards, regardless of whether she acted with malice or bad faith
in dealing with respondent.
WHEREFORE, premises considered, the Petition for Review
on Certiorari is PARTIALLY GRANTED. The assailed Decision dated November 27,
2009 of the Court of Appeals is AFFIRMED with MODIFICATIONS. For the illegal
dismissal of respondent Desiree T. Masagca, petitioners Princess Talent Center
Production, Inc. and Luchi Singh Moldes, together with Saem Entertainment Company,
Ltd., are ORDERED to jointly and severally pay respondent the following: (a)
US$1,800.00, representing respondent's salaries for the unexpired portion of her
extended Employment Contract, subject to legal interest of 12% per annum from June
2004 to June 30, 2013 and 6% per annum from July 1, 2013 to the date that this Decision
becomes final and executory; (b) reimbursement of respondent's placement fees with
12% interest per annum from June 2004 to the date that this Decision becomes final and
executory; and (c) attorney's fees equivalent to 10% of the total monetary award. The
order for payment of respondent's salaries from September 2003 to May 2004
is DELETED. All the monetary awards herein to respondent shall earn legal interest of
6% per annum from the date that this Decision becomes final and executory until full
satisfaction thereof.

SO ORDERED.

G.R. No. 209859

EILEEN P. DAVID, Petitioner


vs.
GLENDA S. MARQUEZ, Respondent

DECISION

TIJAM, J.:

This is a Petition for Review on Certiorari 1 under Rule 45, assailing the Decision 2 dated
May 29, 2013 and Resolution 3 dated November 6, 2013 of the Court of Appeals (CA) in
CA-G.R. SP No. 124839, reinstating the criminal cases of Illegal Recruitment and Estafa
against Petitioner Eileen David.

The Procedural and Factual Antecedents

In a Sinumpaang Salaysay filed Lefore the Office of the City Prosecutor of Manila,
Respondent Glenda Marquez alleged, among others, that she is a resident of Sampaloc,
Manila and that sometime in March 2005, petitioner approached her in Kidapawan City
and represented that she could recruit her to work abroad. 4 It was further alleged that
petitioner demanded payment of placement fees and other expenses from the respondent
for the processing of the latter's application, to which the respondent
heeded. 5 Respondent's application was, however, denied and worse, the money that she
put out therefor was never returned. 6
In her Counter-Affidavit and Counter Charge, petitioner averred that it was physically
impossible for her to have committed the said acts as she was in Canada at the alleged
time of recruitment as evidenced by the entries in her passport. 7 Petitioner further
averred that she was never engaged in the recruitment business. 8 The petitioner alleged
that the amount deposited in her account was not for her but was just coursed through
her to be given to her friend in Canada who was the one processing respondent's
application, as evidenced by a certification to that effect issued by the said
friend. 9 Further, petitioner argued before the Prosecutor that assuming arguendo that the
allegations of recruitment were true, the case should be filed in Kidapawan City and not
in Manila. 10

On December 9, 2008, two separate Informations were filed against petitioner for Illegal
Recruitment and Estafa, respectively. The accusatory portions thereof read as follows:

Criminal Case No. 08-265539

The undersigned accuses EILEEN DA YID of a violation of Article 38 (a), P.D. No. 1412,
amending certain provision of Book I, P.D. No. 442, otherwise known as the New Labor
Code of the Philippines, in relation to Article 13 (b) and (c) of said code, as further
amended by P.D. Nos. 1693, 1920, and 2018 and as further amended by'Sec. 6 (a), (1)
and (m) of Republic Act 8042, committed as follows:

That sometime in the month of March, 2005, in the City of Manila, Philippines, the said
accused representing herself to have the capacity to contract, enlist and transport Filipino
workers overseas, particularly in Canada, did then and there willfully, unlawfully, for a fee,
recruit and promise employment/job placement to GLENDA S. MARQUEZ without first
having secured the required license from the Department of Labor and Employment as
required by law, and charged or accepted directly or indirectly from said complainant the
amount of Php 152,670.00 as placement/processing fee in consideration for her overseas
employment, which amount is in 'excess of or greater than that specified in the schedule
of allowable fees prescribed by the POEA, and without valid reasons failed to actually
deploy her and continuously fail to reimburse expenses incurred by her in connection with
her documentation and processing for purposes of her deployment.

Contrary to law. 11

Criminal Case No. 08-265540

The undersigned accuses EILEEN P. DAVID of the crime of Estafa, Art. 315 par. 2 (a) of
the Revised Penal Code, committed as follows:

That on or about and during the period comprised between March 8, 2005 and April 20,
2007, inclusive, in the City of Manila, Philippines, the said accused, did then and there
willfully, unlawfully, and feloniously defraud GLENDA S. MARQUEZ in the following
manner, to wit: the said accused, by. means of false manifestations and fraudulent
representations which she made to said GLENDA S. MARQUEZ prior to and even
simultaneous with the commission of the fraud, to the effect that she had the power and
capacity to recruit and employ said GLENDA S. MARQUEZ for overseas employment in
Canada as Live-in Caregiver, and could . facilitate the processing of the pertinent papers
if given the necessary amount to meet the requirements thereof, induced and succeeded
in inducing the said GLENDA S. MARQUEZ to give and deliver, as in fact she gave and
delivered to said accused the total amount of Php152,670.00, on the strength of said
manifestations and representations, said accused well knowing that the same were false
and fraudulent and were made solely to obtain, as in fact, she did obtain the said amount
of Php152,670.00, which amount once in her possession, with intent to defraud,
misappropriated, misapplied, and converted to her own personal use and benefit, to the
damage and prejudice of said GLENDA S. MARQUEZ in the aforesaid amount of
Php152,670.00, Philippine Currency.

Contrary to law. 12

The Ruling of the Regional Trial Court

On December 11, 2008, warrants of arrest were issued against the petitioner.

On April 15, 2009, petitioner filed a Motion to Quash the Information 13 in Criminal Case
No. 08-265540, &rguing that she was deprived of her right to seek reconsideration or
reinvestigation of the public prosecutor's resolution as she was not furnished a copy
thereof. 14 Also, petitioner argued that the. City Prosecutor of Manila had no jurisdiction
over the case as the alleged crime was committed in Kidapawan City.

In an Order 15 dated May 13, 2011 in Criminal Case No. 08-265540, the Regional Trial
Court (RTC) of Manila, Branch 55, denied petitioner's Motion to Quash, ruling that the
ground relied upon by the petitioner in the said motion is not one of those enumerated
under Section 3[[16], Rule 117 of the Rules of Court for quashing a complaint or
infonnation. 17 As to the jurisdictional issue, the RTC ruled that it has jurisdiction to take
cognizance of the case, citing Section 9 of Republic Act No. 8042 18 (RA 8042), which
explicitly states that:

A criminal action arising from illegal recruitment as defined herein shall be filed with the
Regional Trial Court of the province or city where the offense was committed or where
the offended party actually resides at the time of the commission of the
offense xxx. (underscoring supplied for emphasis) 19

Since complainant is a resident of Manila, the RTC ruled that the second ground
interposed by the petitioner is devoid of merit. 20 Thus:

In view of the foregoing, the Motion to Quash is hereby DENIED for lack of merit.

SO ORDERED. 21
Petitioner filed a Motion for Reconsideration22 of the said Order alleging that she just
found out that there were two Informations filed against her, one for Illegal Recruitment in
Criminal Case No. 08-265539 23 and another for Estafa 24 in Criminal Case No. 08-
265540. Petitioner maintained that the alleged crimes were committed in Kidapawan City,
not in Manila as alleged in the Informations. Petitioner further alleged that there is no
showing that respondent is an actual resident of Manila but as per her Reply-Affidavit,
Manila is merely her postal address. 25 Hence, petitioner again raised a jurisdictional
issue in the said motion. 26

In an Order 27 dated January 26, 2012, this time ill Criminal Cases Nos. 08-265539-40,
the RTC reconsidered its May 13, 2011 Order, finding that it had no jurisdiction to try the
cases since the crimes of Illegal Recruitment and Estafa were not committed in its territory
but in Kidapawan City, thus:

WHEREFORE, in the light of the foregoing, the instant Motion for Reconsideration is
hereby GRANTED. The Order of this Court dated May 13, 2011 is hereby
RECONSIDERED and SET ASIDE.

This case is ordered returned to the Office of the Clerk of Court of the Regional Trial Court
for proper disposition.

SO ORDERED. 28

On the same date, the R TC also issued an Order 29 recalling the warrants of arrest issued
against the petitioner, thus:

Considering that this Court has no territorial jurisdiction over the above-entitled cases, the
Order of this Court dated December 11, 2008, pertaining to the issuance of Warrants of
Arrest against herein accused is hereby cancelled (and) set aside.

WHEREFORE, let the Warrants of Arrest issued in these cases be ordered RECALLED
AND SET ASIDE.

SO ORDERED. 30

Respondent, through the public prosecutor, then filed a Motion for Reconsideration 31 of
the said Order, averring that while it appears in the Philippine Overseas .Employment
Administration (POEA) pro-forma complaint affidavit that the alleged recruitment activities
took place in Kidapawan City, it also appears in her Reply-Affidavit, that she deposited
certain amounts in several banks in Manila for the name and account of petitioner as
payments for employment processing and placement fees. 32 Thus, part of the essential
elements of Illegal Recruitment and Estafa took place in Manila. 33 Section 9 of RA 8042,
above-quoted, which states that an illegal recruitment case may also be filed with the
RTC of the province or city where the offended party actually resides at the time of the
commission of the crime, was likewise invoked in the said motion. 34 Respondent averred
that the records show that at the time of the incident up to the present, she resides in
Sampaloc, Manila. 35

Petitioner filed an Opposition 36 to the said motion. Respondent, through the public
prosecutor, filed a Comment 37thereon and a Reply 38 was then filed by the petitioner.

In an Order 39 dated March 16, 2012, the RTC denied respondent's motion for
reconsideration, ruling that as stated in respondent's Sinumpaang Salaysay, the essential
elements of Illegal Recruitment and Estafa took place in Kidapawan City and not in
Manila. The allegation that several deposits for the payment of the placement fees were
made in Manila is of no moment, according to the RTC, considering that the main
transaction actually took place in Kidapawan City, which is the basis for determining the
jurisdiction of the court. Thus:

WHEREFORE, premises considered, the instant Motion for Reconsideration filed by the
Prosecution is hereby DENIED for lack of merit. The Orders of the Court both dated
January 26, 2012 still stand.

SO ORDERED. 40

The Ruling of the Court of Appeals

Undaunted, respondent filed a Petition for Certiorari before the CA. In its assailed
Decision, the CA discussed, first, the issue of respondent's legal personality to file the
said petition and second, the RTC's jurisdiction over the case. 41

On the first issue, the CA ruled that while it is only the Office of the Solicitor General
(OSG) that may represent the People or the State in criminal proceedings before this
Court or the CA, the private offended party retains the right to bring a special civil action
for certiorari in his/her own name in criminal proceedings before the courts of law. 42 The
CA cited Section 1, Rule 122, which provides that the right to appeal from a final judgment
or order in a criminal case is granted to any party except when the accused is placed
thereby in double jeopardy. 43 It also cited this Court's ruling that the word party in the
said provision must be understood to mean not only the government and the accused,
but also other persons who may be affected by the judgment rendered in the criminal
proceeding. 44 The private complainant, having an interest in the civil aspect of the case,
thus, may file such action in his/her name to question the decision or action of the
respondent court on jurisdictional grounds. 45 In line with this, the CA also ruled that there
is no double jeopardy in this case as the charges were dismissed upon motion of the
petitioner-accused. 46

As to the issue on jurisdiction, the CA ruled that the RTC has jurisdiction over the cases
of Illegal Recruitment and Estafa, citing Section 9 of RA 8042, which provides that a
criminal action arising from illegal recruitment may be filed in the place where the offended
party actually resides at the time of the commission of the offense. 47 According to the
CA, it was established that herein respondent was residing in Sampaloc, Manila at the
time of the commission of the crimes. 48 Therefore, the two (2) Informations herein were
correctly filed with the RTC of Manila, pursuant to Section 9 of RA 8042. 49 The CA
disposed, thus:

WHEREFORE, the petition for certiorari is GRANTED. The assailed Order dated
January 26, 2012 and Resolution dated March 16, 2012 of the RTC, Manila, in Criminal
Case No. 08-265539 for estafa and Criminal Case No. 08-265540 for illegal
recruitmen't respectively, are NULLIFIED and SET ASIDE. The cases
are REINSTATED and REMANDED to the court of origin for appropriate proceedings.

SO ORDERED. 50

Petitioner's motion for reconsideration was denied by the CA in its Resolution dated
November 6, 2013, thus:

WHEREFORE, the Motion for Reconsideration is DENIED for lack of merit.

SO ORDERED. 51

Hence, this Petition.

Petitioner argues that the CA committed a reversible error and grave abuse of discretion
in declaring that the respondent had the legal personality to assail the dismissal of the
criminal cases as respondent is not the proper party to do so. 52 Petitioner argues that the
OSG is the appellate counsel of the People of the Philippines in all criminal cases and as
such, the appeal in the criminal aspect should be taken solely by the State and the private
complainant is limited only to the appeal of the civil aspect. 53 According to the petitioner,
respondent's action before the CA does not concern the civil aspect of the case but the
validity of the RTC's Orders. 54

On the jurisdictional issue, the petitioner maintains that the RTC of Manila has no
jurisdiction over the cases as the alleged acts constituting the crimes charged were
committed in Kidapawan City and not in Manila. 55

For her part, respondent argues that the argument as regards her legal personality in
filing the petition for certioraribefore the CA reveals that petitioner misunderstood the
difference between an appeal and a special civil action for certiorari under Rule 65 of the
Rules of Court. 56 In fact, respondent agrees with the petitioner that only the State,
through the OSG, may file an appeal in a criminal case. 57 As an appeal is not available
for a private complainant in a criminal case, an independent action through a petition
for certiorari under Rule 65, therefore, is available to the said aggrieved party. 58

Anent the jurisdictional issue, respondent again invokes Section 9 of RA 8042 which
allows the filing of an action arising from illegal recruitment with the RTC of the
complainant's residence. 59 The respondent further argues that as regards the charge of
Estafa, considering that the same arose from the illegal recruitment activities, the said
provision allows the filing thereof with the court of the same place where the Illegal
Recruitment case was filed. 60Besides, according to the respondent, since one of the
essential elements of Estafa, i.e., damage or prejudice to the offended party, took place
in Manila, as the offended party resides in Manila, the R TC of Manila has jurisdiction over
the Estafa case. 61

Issues

1) Does the RTC of Manila have jurisdiction over the cases of Illegal Recruitment
and Estafa?

2) Does the respondent, on her own, have legal personality to file the petition
for certiorari before the CA?

The Court's Ruling

The issues shall be discussed ad seriatim.

The RTC of Manila has jurisdiction over the cases of Illegal Recruitment and Estafa

Indeed, venue in criminal cases is an essential element of jurisdiction. 62 As explained by


this Court in the case of Foz, Jr. v. People: 63

It is a fundamental rule that for jurisdiction to be acquired by courts in criminal cases, the
offense should have been committed or any one of its essential ingredients took place
within the territorial jurisdiction of the court. Territorial jurisdiction in criminal cases is the
territory where the court has jurisdiction to take cognizance or to try the offense allegedly
committed therein by the accused. Thus it cannot take jurisdiction over a person charged
with an offense allegedly committed outside of that limited territory. Furthermore, the
jurisdiction of a court over a criminal case is determined by the allegations in the complaint
or information. And once it is so shown, the court may validly take cognizance of the case.
However, if the evidence adduced during the trial show that the offense was committed
somewhere else, the court should dismiss the action for want of jurisdiction. 64 (emphasis
ours)

Section 15(a), Rule 110 of the Rules of Criminal Procedure provides: SEC. 15. Place
where action is to be instituted. - a) Subject to existing laws, the criminal action shall be
instituted and tried in the court of the municipality or territory where the offense was
committed or where any of its essential ingredients occurred. (emphasis ours)

At the risk of being repetitive, Sec. 9 of RA 8042, however, fixed an alternative venue
from that provided in Section 15(a) of the Rules of Criminal Procedure, i.e., a criminal
action arising from illegal recruitment may also be filed where the offended party actually
resides at the time of the commission of the offense and that the court where the criminal
action is first filed shall acquire jurisdiction to the exclusion of other courts. 65
Despite the clear provision of the law, the RTC of Manila declared that it has no jurisdiction
to try the cases as the illegal Recruitment and Estafa were not committed in its territory
but in Kidapawan City. 66

We are, thus, one with the CA in finding that the RTC of Manila committed grave abuse
of discretion and in fact, a palpable error, in ordering the quashal of the Informations. The
express provision of the law is clear that the filing of criminal actions arising from illegal
recruitment before the R TC of the province or city where the offended party actually
resides at the time of the commission of the offense is allowed. It goes without saying that
the dismissal of the case on a wrong ground, indeed, deprived the prosecution, as well
as the respondent as complainant, of their day in court.

It has been found by both the RTC and the CA that the respondent resides in Manila;
hence, the filing of the case before the RTC of Manila was proper. Thus, the trial court
should have taken cognizance of the case, and if it will eventually be shown during trial
that the offense was committed somewhere else, then the court should dismiss the action
for want of jurisdiction. 67 As a matter of fact, the R TC is not unaware of the above-cited
provision which allows the filing of the said case before the RTC of the city where the
offended party resides at the time of the commission of the offense; hence, it originally
denied petitioner's Motion to Quash. This Court is, thus, baffled by the fact that the RTC
reversed itself upon the petitioner's motion for reconsideration on the same ground that it
previously invalidated.

Likewise, with the case of Estafa arising from such illegal recruitment activities, the
outright dismissal thereof due to lack of jurisdiction was not proper, considering that as
per the allegations in the Information, the same was within the jurisdiction of Manila.
During the preliminary investigation of the cases, respondent even presented evidence
that some of the essential elements of the crime were committed within Manila, such as
the payment of processing and/or placement fees, considering that these were deposited
in certain banks located in Manila. 68 Thus, it bears stressing that the trial court should
have proceeded to take cognizance of the case, and if during the trial it was proven that
the offense was committed somewhere else, that is the time that the trial court should
dismiss the case for want of jurisdiction. 69 Undoubtedly, such erroneous outright
dismissal of the case is a nullity for want of due process. The prosecution and the
respondent as the private offended party were not given the opportunity to present and
prosecute their case. Indeed, the prosecution and the private offended party are as much
entitled to due process as the accused in a criminal case. 70

The respondent has the legal personality to file a petition for certiorari under Rule
65. This procedural issue is not novel.1âwphi1 There is no question that, generally, the
prosecution cannot appeal or bring error proceedings from a judgment rendered in favor
of the defendant in a criminal case due to the final and executory nature of a judgment of
acquittal and the constitutional prohibition against double jeopardy. 71 Despite acquittal,
however, the offended party or the accused may appeal, but only with respect to the civil
Aspect of the decision. 72
This Court has also entertained petitions for certiorari questioning the acquittal of the
accused in, or the dismissal of, criminal cases upon clear showing that the lower court, in
acquitting the accused, committed not merely errors of judgment but also grave abuse of
discretion amounting to lack or excess of jurisdiction or a denial of due process, thus
rendering the assailed judgment void. 73 When the order of dismissal is annulled or set
aside by an appellate court in an original special civil action via certiorari, the right of the
accused against double jeopardy is not violated. 74

In as early as the 1989 case of People v. Santiago, 75 this Court has ruled that a private
offended party can file a special civil action for certiorari questioning the trial court's order
acquitting the accused or dismissing the case, viz. :

In such special civil action for certiorari filed under Rule 65 of the RuJes of Court, wherein
it is alleged that the trial court committed a grave abuse of discretion amounting to lack
of jurisdiction or on other jurisdictional grounds, the rules state that the petition may be
filed by the person aggrieved. In such case, the aggrieved parties are the State and the
private offended party or complainant. The complainant has an interest in the civil aspect
of the case so he/she may file such special civil action questioning the decision or action
of the respondent court on jurisdictional grounds. In so doing, complainant should
not bring the action in the name of the People of Philippines. The action may be
prosecuted in the name of said complainant. (emphasis supplied)

Moreover, there have been occasions when this Court has allowed the offended party to
pursue the criminal action on his/her own behalf, as when there is a denial of due process
as in this case. 76 Indeed, the right of offended parties to appeal or question an order of
the trial court which deprives them of due process has always been recognized, the only
limitation being that they cannot appeal any adverse ruling if to do so would place the
accused in double jeopardy. 77

At this juncture, We also uphold the CA's finding that double jeopardy does not exist in
this case. Inasmuch as the dismissal of the charges by the RTC was done without regard
to due process of law, the same is null and void. 78 It is as if there was no acquittal or
dismissal of the case at all, and the same cannot constitute a claim for double jeopardy. 79

Also, it is elementary that double jeopardy attaches only when the following elements
concur: (1) the accused is charged under a complaint or information sufficient in form and
substance to sustain their conviction; (2) the court has jurisdiction; (3) the accused has
been arraigned and has pleaded; and (4) he/she is convicted or acquitted, or the case is
dismissed without his/her consent. 80 Thus, as found by the CA, double jeopardy does
not attach in this case as the dismissal was granted upon motion of the petitioner. To be
sure, no fundamental right of the petitioner was violated in the filing of the petition
for certiorari before the CA by the respondent, as well as the grant thereof by the CA.

In fine, the dismissal of the cases below was patently erroneous and as such, invalid for
lack of fundamental requisite that is, due process 81 For this reason, this Court finds the
recourse of the respondent to the CA proper despite it being brought on her own and not
through the OSG.

Besides, such technicality cannot prevail over the more fundamental matter, which is the
violation of the right to due process resulting from the RTC's patent error. Nothing is more
settled than the principle that rules of procedure are meant to be tools to facilitate a fair
and orderly conduct of proceedings. 82 Strict adherence thereto must not get in the way
of achieving substantial justice. 83 As long as their purpose is sufficiently met and no
violation of due process and fair play takes place, the rules should be liberally
construed. 84 Liberal construction of the rules is the controlling principle to effect
substantial justice. 85 The relaxation or suspension of procedural rules, or the exemption
of a case from their operation, is warranted when compelling reasons or when the purpose
of justice requires it. 86 Thus, litigations should, as much as possible, be decided on their
merits and not on sheer technicalities. 87

In all, since it is established that the RTC of Manila has jurisdiction over the Illegal
Recruitment and Estafa cases, and there being no violation of the double jeopardy
doctrine, the prosecution of the case may still resume in the trial court as held by the CA.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision dated
May 29, 2013 and Resolution dated November 6, 2013 of the Court of Appeals are
hereby AFFIRMED.

SO ORDERED.