G.R. No. 183860, January 15, 2014 - RODOLFO LABORTE AND PHILIPPINE TOURISM AUTHORITY, Petitioners, v. PAGSANJAN TOURISM CONSUMERS’ COOPERATIVE AND LELIZA S. FABRICIO, WILLIAM BASCO, FELICIANO BASCO, FREDIE BASCO, ROGER MORAL, NIDA ABARQUEZ, FLORANTE MUNAR, MARY JAVIER, MARIANO PELAGIO, ALEX EQUIZ, ALEX PELAGIO, ARNOLD OBIEN, EDELMIRO ABAQUIN, ARCEDO MUNAR, LIBRADO MALIWANAG, OSCAR LIWAG, OSCAR ABARQUEZ, JOEL BALAGUER, LIZARDO MUNAR, ARMANDO PANCHACOLA, MANUEL SAYCO, EDWIN MATIBAG, ARNEL VILLAGRACIA, RODOLFO LERON, ALFONSO ABANILLA, SONNY LAVA, AND DENNIS BASCO, Respondents. | Home of ChanRobles Virtual Law Library
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G.R. No. 183860, January 15, 2014 - RODOLFO LABORTE AND PHILIPPINE TOURISM AUTHORITY, Petitioners, v. PAGSANJAN TOURISM CONSUMERS’ COOPERATIVE AND LELIZA S. FABRICIO, WILLIAM BASCO, FELICIANO BASCO, FREDIE BASCO, ROGER MORAL, NIDA ABARQUEZ, FLORANTE MUNAR, MARY JAVIER, MARIANO PELAGIO, ALEX EQUIZ, ALEX PELAGIO, ARNOLD OBIEN, EDELMIRO ABAQUIN, ARCEDO MUNAR, LIBRADO MALIWANAG, OSCAR LIWAG, OSCAR ABARQUEZ, JOEL BALAGUER, LIZARDO MUNAR, ARMANDO PANCHACOLA, MANUEL SAYCO, EDWIN MATIBAG, ARNEL VILLAGRACIA, RODOLFO LERON, ALFONSO ABANILLA, SONNY LAVA, AND DENNIS BASCO, Respondents.

G.R. No. 183860, January 15, 2014 - RODOLFO LABORTE AND PHILIPPINE TOURISM AUTHORITY, Petitioners, v. PAGSANJAN TOURISM CONSUMERS’ COOPERATIVE AND LELIZA S. FABRICIO, WILLIAM BASCO, FELICIANO BASCO, FREDIE BASCO, ROGER MORAL, NIDA ABARQUEZ, FLORANTE MUNAR, MARY JAVIER, MARIANO PELAGIO, ALEX EQUIZ, ALEX PELAGIO, ARNOLD OBIEN, EDELMIRO ABAQUIN, ARCEDO MUNAR, LIBRADO MALIWANAG, OSCAR LIWAG, OSCAR ABARQUEZ, JOEL BALAGUER, LIZARDO MUNAR, ARMANDO PANCHACOLA, MANUEL SAYCO, EDWIN MATIBAG, ARNEL VILLAGRACIA, RODOLFO LERON, ALFONSO ABANILLA, SONNY LAVA, AND DENNIS BASCO, Respondents.

PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

G.R. No. 183860, January 15, 2014

RODOLFO LABORTE AND PHILIPPINE TOURISM AUTHORITY, Petitioners, v. PAGSANJAN TOURISM CONSUMERS’ COOPERATIVE AND LELIZA S. FABRICIO, WILLIAM BASCO, FELICIANO BASCO, FREDIE BASCO, ROGER MORAL, NIDA ABARQUEZ, FLORANTE MUNAR, MARY JAVIER, MARIANO PELAGIO, ALEX EQUIZ, ALEX PELAGIO, ARNOLD OBIEN, EDELMIRO ABAQUIN, ARCEDO MUNAR, LIBRADO MALIWANAG, OSCAR LIWAG, OSCAR ABARQUEZ, JOEL BALAGUER, LIZARDO MUNAR, ARMANDO PANCHACOLA, MANUEL SAYCO, EDWIN MATIBAG, ARNEL VILLAGRACIA, RODOLFO LERON, ALFONSO ABANILLA, SONNY LAVA, AND DENNIS BASCO, Respondents.

D E C I S I O N

REYES, J.:

This Petition for Review on Certiorari1 under Rule 45 of the 1997 Revised Rules on Civil Procedure seeks to nullify and set aside:chanroblesvirtuallawlibrary

(a) the Court of Appeals (CA) Decision2 dated May 29, 2008, affirming the Decision3 dated May 29, 2002 of the Regional Trial Court (RTC), Branch 28, Santa Cruz, Laguna in Civil Case No. SC-3150; and

(b) the CA Resolution4 dated July 23, 2008, denying the subsequent Motion for Reconsideration5 thereof.

The antecedent facts are as follows:chanroblesvirtuallawlibrary

Petitioner Philippine Tourism Authority (PTA) is a government-owned and controlled corporation that administers tourism zones as mandated by Presidential Decree (P.D.) No. 564 and later amended by P.D. No. 1400.  PTA used to operate the Philippine Gorge Tourist Zone (PGTZ) Administration Complex (PTA Complex), a declared tourist zone in Pagsanjan, Laguna.

Respondent Pagsanjan Tourism Consumers’ Cooperative (PTCC) is a cooperative organized since 1988 under Republic Act No. 6938, or the “Cooperative Code of the Philippines.”  The other individual respondents are PTCC employees, consisting of restaurant staff and boatmen at the PTA Complex.

In 1989, in order to help the PTCC as a cooperative, the PTA allowed it to operate a restaurant business located at the main building of the PTA Complex and the boat ride services to ferry guests and tourists to and from the Pagsanjan Falls, paying a certain percentage of its earnings to the PTA.6chanrobleslaw

In 1993, the PTA implemented a reorganization and reshuffling in its top level management.  Herein petitioner Rodolfo Laborte (Laborte) was  designated as Area Manager, CALABARZON area with direct supervision over the PTA Complex and other entities at the Southern Luzon.

On October 22, 1993, Laborte served a written notice upon the respondents to cease the operations of the latter’s restaurant business and boat ride services in view of the rehabilitation, facelifting and upgrading project of the PTA Complex.  Consequently, on November 9, 1993, the PTCC filed with the RTC, Branch 28, Santa Cruz, Laguna a Complaint for Prohibition, Injunction and Damages with Temporary Restraining Order (TRO) and Preliminary Injunction7 against Laborte, docketed as Civil Case No. 3150.  The PTCC also sought from the court the award of moral and exemplary damages, attorney’s fees and costs of suit.  It also prayed for the issuance of a TRO or writ of preliminary injunction to prohibit Laborte from causing the PTCC to cease the operations of the restaurant and boat ride services and from evicting the PTCC’s restaurant from the main building of the PTA Complex.8chanrobleslaw

In an Order dated November 11, 1993, the trial court issued the TRO prayed for, prohibiting Laborte from (a) causing the PTCC to cease operations; (b) doing the threatened act of closing the operation of the  PTCC’s restaurant and other activities; (c) evicting the PTCC’s restaurant from the main building of the PTA Complex; and (d) demolishing the said building.  In the same Order, the trial court set the hearing on the Writ of Preliminary Injunction on November 25, 1993.9chanrobleslaw

Opposing the issuance of the TRO, Laborte averred that the PTCC does not own the restaurant facility as it was only tolerated to operate the same by the PTA as a matter of lending support and assistance to the cooperative in its formative years.  It has neither been granted any franchise nor concession to operate the restaurant nor any exclusive franchise to handle the boating operations in the complex.  Since the PTCC had no contract, concession, or exclusive franchise to operate the restaurant business and the boating services in the PTA Complex, no existing right has been allegedly violated by the petitioners.  The respondents, therefore, had no right for the injunctive relief prayed for.10chanrobleslaw

On December 7, 1993, the PTCC filed with the trial court a Petition for Contempt with Motion for Early Resolution.  It alleged that Laborte and his lawyers defied the TRO and proceeded to close the restaurant on December 2, 1993.  The PTCC also alleged that Laborte prohibited its own boatmen from ferrying tourists and allowed another association of boatmen to operate.11chanrobleslaw

On December 13, 1993, Laborte filed his Answer with Counter-Claim.12  He denied the PTCC’s allegations of harassment, threat and retaliation.  He claimed (a) that his actions were upon the mandate of his superiors and the PTA’s rehabilitation programs in the area;13 (b) that the PTA only tolerated the PTCC’s operations;14 and (c) that the issuance of a permanent injunction will violate the PTA’s constitutional freedom to operate a legitimate business enterprise and the legal requirement of a public bidding for the operation of revenue-generating projects of government entities involving private third parties.15chanrobleslaw

On March 14, 1994, the individual respondents, Fabricio et al., who are employees and boatmen of the PTCC, filed a Complaint-in-Intervention against Laborte.16  They stated that they were rendered jobless and were deprived of their livelihood because Laborte failed to heed the trial court’s TRO.  Thus, they prayed that the trial court order Laborte to pay their unearned salaries, among others.17  Laborte opposed but the trial court in an Order dated March 25, 1994 admitted the Complaint-in-Intervention, finding the same to be well-founded.18chanrobleslaw

On April 4, 1994, the PTCC filed an Amended Complaint to include petitioner PTA as defendant and the additional prayer for payment of Thirty Thousand Pesos (P30,000.00) a month, representing the PTCC’s unrealized profits from November 1993 up to the actual resumption of its restaurant and boat ride businesses.19  In return, the PTA filed its Answer with Counterclaim,20 alleging, among others, that (1) the PTCC has no cause of action against it since the PTA owned the restaurant and the boat ride facilities within the Complex and that it never formally entered into a contract with the PTCC to operate the same; (2) the PTA did not violate the trial court’s TRO and Writ of Preliminary Injunction since the PTA was not yet impleaded as defendant at that time; (3) the physical rehabilitation of the PTA Complex, including the restaurant and boat facilities therein, was part of its new marketing strategy; and (4) the action had become moot and academic in view of the actual closure of the PTCC’s restaurant and boat service businesses.21chanrobleslaw

On May 29, 2002, the RTC rendered a decision finding for the respondents, the dispositive portion of which provides:chanRoblesvirtualLawlibrary

WHEREFORE, IN THE LIGHT OF ALL THE FOREGOING CONSIDERATIONS, Judgment is hereby rendered in favor of the plaintiff and intervenors and against the defendants by ordering the defendants jointly and severally to pay the plaintiff and intervenors the following sums:chanRoblesvirtualLawlibrary

FOR THE PLAINTIFF

1. The sum of P1,475,760 representing the income which the plaintiff failed to receive from December 1993 up to the present, computed at P16,417.00 per month;

2. The sum of P230,000.00 as costs of restaurants (sic) facilities unlawfully confiscated by the defendant from the plaintiff when the restaurant was closed; and

3. The sum of P25,000.00 as attorney's fees.

FOR THE INTERVENORS:chanroblesvirtuallawlibrary

The total sum of [P]3,971,760.00 representing the monthly salaries of the 8 intervenors who are employees of the restaurant business and take home pay of 20 boatmen-intervenors for a period of seven (7) years up to the present; and

Attorney’s fees in the amount of P992,940.00 or 25% of the total claim of the intervenors.
SO ORDERED.22

Dissatisfied, Laborte and the PTA appealed to the CA.23  On May 29, 2008, the CA promulgated its Decision, affirming the RTC Decision24 dated May 29, 2002.  The petitioners seasonably filed a Motion for Reconsideration,25  but the said motion was also denied for lack of merit.26chanrobleslaw

Hence, the petitioners filed the present petition, raising the following:chanRoblesvirtualLawlibrary

I

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT GIVING DUE COURSE [TO] THE PETITIONERS’ APPEAL AND IN NOT SETTING ASIDE AND REVERSING THE DECISION OF THE TRIAL COURT.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE CLOSURE OF PTCC'S RESTAURANT AND BOAT RIDE BUSINESS WAS NOT A VALID AND LAWFUL EXERCISE OF PTA'S MANAGEMENT PREROGATIVE.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING PETITIONER LABORTE LIABLE BOTH IN HIS PERSONAL AND OFFICIAL CAPACITY NOTWITHSTANDING THE EXISTENCE OF PECULIAR AND UNUSUAL CIRCUMSTANCES WHICH WOULD RENDER THE DECISION UNJUST AND INEQUITABLE, IN THAT:chanroblesvirtuallawlibrary

A)
PETITIONER LABORTE, IN HIS CAPACITY AS ACTING RESIDENT MANAGER OF PGTZ, MERELY COMPLIED IN GOOD FAITH, WITH THE VALID AND LAWFUL ORDERS OF THE TOP MANAGEMENT OF PTA TO NOTIFY RESPONDENT PTCC TO CEASE BUSINESS OPERATIONS AT THE COMPLEX IN VIEW OF THE INTENDED RENOVATION AND REPAIR OF THE RESTAURANT FACILITY AT THE COMPLEX.
B)
THE FAILURE OF ATTY. HERNANDO CABRERA, FORMER COUNSEL OF PETITIONERS TO FILE THEIR FORMAL OFFER OF EVIDENCE AND TO MAKE A MANIFESTATION BEFORE THE TRIAL COURT THAT THEY WERE ADOPTING IN THE TRIAL PROPER THE EVIDENCE THEY PRESENTED DURING THE HEARING ON THE APPLICATION FOR WRIT OF PRELIMINARY INJUNCTION IN CIVIL CASE NO. SC-3150 IS SO GROSS, PALPABLE AND INEXCUSABLE, THEREBY RESULTING IN THE VIOLATION OF THE SUBSTANTIVE RIGHTS OF [THE] PETITIONERS.27

There is merit in the petition.

Anent the procedural issue raised, both the trial court and the CA faulted the petitioners for their failure to formally offer their evidence inspite of the ample opportunity granted to do so.28  Thus, such lapse allegedly militated against the petitioners whose assertions were otherwise supported by sufficient evidence on record.
.
Section 34, Rule 132 of the Revised Rules on Evidence provides the general rule, to wit:

Sec. 34. Offer of Evidence. – The Court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified.

From the above provision, it is clear that the court considers the evidence only when it is formally offered.  The offer of evidence is necessary because it is the duty of the trial court to base its findings of fact and its judgment only and strictly on the evidence offered by the parties.  A piece of document will remain a scrap of paper without probative value unless and until admitted by the court in evidence for the purpose or purposes for which it is offered.29  The formal offer of evidence allows the parties the chance to object to the presentation of an evidence which may not be admissible for the purpose it is being offered.30chanrobleslaw

However, there are instances when the Court relaxed the foregoing rule and allowed evidence not formally offered to be admitted.  Citing People v. Napat-a31 and People. v. Mate,32 the Court in Heirs of Romana Saves, et al., v. Heirs of Escolastico Saves, et al.,33 enumerated the requirements for the evidence to be considered despite failure to formally offer it, namely: “first, the same must have been duly identified by testimony duly recorded and, second, the same must have been incorporated in the records of the case.”34  In People v. Vivencio De Roxas et al.,35 the Court also  considered exhibits which were not formally offered by the prosecution but were repeatedly referred to in the course of the trial by the counsel of the accused.36chanrobleslaw

In the instant case, the Court finds that the above requisites are  attendant to warrant the relaxation of the rule and  admit the evidence of the petitioners not formally offered.  As can be seen in the records of the case, the petitioners were able to present evidence that have been duly identified by testimony duly recorded.  To identify is to prove the identity of a person or a thing.37  Identification means proof of identity; the proving that a person, subject or article before the court is the very same that he or it is alleged, charged or reputed to be.38chanrobleslaw

In support of his position, Laborte in his testimony presented and identified the following:  (a) the letter informing the Chairman of PTCC about the decision of PTA main office regarding the repair works to be conducted;39 (b) Office Order No. 1018-93 from a person named Mr. Anota, relative to the suspension of the boat ride services at the Complex;40 (c) a copy of the memorandum from the Technical Evaluation Committee (TEC), referring to the conduct of the repair works at the Complex;41 (d) the letter to PTCC informing it of the repair at the Complex;42 (e) the certificates of availability of funds for the guesthouse of the PTC Complex and for the repainting, repair works at the Pagsanjan Administration Complex respectively;43 (f) the program of works dated July 22, 1993 for the renovation of the Pagsanjan Complex and of the swimming pool at the guesthouse respectively;44 (g) the program of works referring to the repainting and repair works at the Complex dated August 6, 1993;45 (h) a set of plans and specification of the projects conducted at the Complex, particularly for the repairs and repainting of the guesthouse shower room, the repair of the Pagsanjan Administration Complex;46 (i) the office order relative to the directive to Mr. Francisco Abalos of the PTA main office to close the restaurant facilities;47 (j) a memorandum from Mr. Oscar Anota, Deputy General Manager for Operation of the PTA, dated December 8, 1993 addressed to the security office of the Pagsanjan Administration Complex, instructing the same not to allow the entry of anything without the clearance  from the main office in Manila into the Pagsanjan Complex;48 and (k) the office order signed by Eduardo Joaquin, General Manager of the PTA, relative to the posting of bond in favor of herein petitioner Laborte by the PTA main office in the amount of P10,000.00 to be deposited with the RTC, Branch 28, Sta. Cruz, Laguna.49chanrobleslaw

Undeniably, these pertinent evidence were also found in the records of the RTC, i.e.: (a) the letter informing the Chairman of PTCC about the decision of PTA main office regarding the repair works to be conducted;50 (b) Office Order No. 1018-93 from a person named Mr. Anota, relative to the suspension of the boat ride services at the Complex;51 (c) the letter to PTCC informing it of the repair at the Complex;52 (d) the certificates of availability of funds for the guesthouse of the PTC Complex and for the repainting, repair works at the Pagsanjan Administration Complex respectively;53 (e) the program of works dated July 22, 1993 for the renovation of the Pagsanjan Complex and of the swimming pool at the guesthouse respectively;54 (f) the program of works referring to the repainting and repair works at the Complex dated August 6, 1993;55 and (g) a memorandum from Mr. Oscar Anota, Deputy General Manager for Operation of the PTA, dated December 8, 1993 addressed to the security office of the Pagsanjan Administration Complex, instructing the same not to allow the entry of anything without clearance from the main office in Manila into the Pagsanjan Complex.56 In all these, the respondents had all the chance to object to the documents which Laborte properly identified and marked and which are found in the records of the trial court.  Considering that no objections were made by the respondents to the foregoing documents, the Court sees no reason why these documents should not be admitted.

The Court notes the CA’s ruling that the closure of the business is a factual matter which need not be reviewed by the Court under Rule 45.  The Court has consistently held that as a general rule, a petition for review under Rule 45 of the Rules of Court covers questions of law only.  The rule, however, admits of exceptions, subject to the following exceptions, to wit: (1) when the findings are grounded entirely on speculations, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is a grave abuse of discretion; (4) when the judgment is based on misappreciation of facts; (5) when the findings of fact are conflicting; (6) when in making its findings, the same are contrary to the admissions of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.57  After a careful review and based on the evidence on record, the Court finds cogent reason to deviate from the general rule, warranting a reversal of the decision of the CA.

In their petition, the petitioners assert that:chanroblesvirtuallawlibrary

(1) the PTA is mandated to administer tourism zones and it has adopted a comprehensive program and project to rehabilitate and upgrade the facilities of the PTA Complex.  To prove this, the petitioners attached Annexes “H-2” to “H-4,”58 namely: (a) Program Work/Scope of works of the repairs and rehabilitation project for the PGTZ dated July 22, 1993;59 (b) Certificate of Availability of Funds for the repairs and rehabilitation project for PGTZ;60 and (c) Program of Work/Scope of Works for the repairs and rehabilitation of the restaurant facility dated August 6, 1993;61chanrobleslaw

(2) The petitioners also claimed that bidding out to private parties of the business operations in the PTA Complex is a legal requirement and a mandate given to every revenue-generating government entity like the PTA. Thus, since it is only exercising its mandate and has acted in good faith, petitioner PTA believes that it has not incurred any liability against respondents.62 Citing Mendoza v. Rural Bank of Lucban,63 the petitioners argued that: “[L]abor laws discourage interference in employers’ judgments concerning the conduct of their business.  The law must protect not only the welfare of employees, but also the right of [the] employers.”64 In other words, the petitioners likened the relationship between PTA and the respondents to that of an employer and employee;

(3) The petitioners also reiterated that the PTCC is without contract, concession or exclusive franchise to operate the restaurant and boat ride service at the PTA Complex.  They insisted that the PTA temporarily authorized the PTCC to operate the same in order to extend financial assistance to its PTA employee-members who are members of the then fledging PTCC.  Thus, for the petitioners, the PTCC has no vested right to continue operating the restaurant and boat ride services, and therefore, not entitled to damages;65 and

(4) The petitioners also claimed to have informed the PTCC as early as October 22, 1993 of the intention to rehabilitate and upgrade the facilities of the PTA Complex and for the PTCC to vacate the area by November 15, 1993.  In fact, the deadline was even extended for another twenty-one (21) days or until December 6, 1993, to allow the PTCC sufficient time to pack its goods, merchandise and appliances.66chanrobleslaw

The Court is persuaded.

The PTA is a government owned and controlled corporation which was mandated to administer tourism zones.  Based on this mandate, it was the PTA’s obligation to adopt a comprehensive program and project to rehabilitate and upgrade the facilities of the PTA Complex as shown in Annexes “H-2” to “H-4” of the petition.  The Court finds that there was indeed a renovation of the Pagsanjan Administration Complex which was sanctioned by the PTA main office; and such renovation was done in good faith in performance of its mandated duties as tourism administrator.  In the exercise of its management prerogative to determine what is best for the said agency, the PTA had the right to terminate at any moment the PTCC’s operations of the restaurant and the boat ride services since the PTCC has no contract, concession or franchise from the PTA to operate the above-mentioned businesses.  As shown by the records, the operation of the restaurant and the boat ride services was merely tolerated, in order to extend financial assistance to its PTA employee-members who are members of the then fledging PTCC.

Except for receipts for rents paid by the PTCC to the PTA, the respondents failed to show any contract, concession agreement or franchise to operate the restaurant and boat ride services.  In fact, the PTCC initially did not implead the PTA in its Complaint since it was well aware that there was no contract executed between the PTCC and the PTA.  While the PTCC has been operating the restaurant and boat ride services for almost ten (10) years until its closure, the same was by mere tolerance of the PTA.67  In the consolidated case of Phil. Ports Authority v. Pier 8 Arrastre & Stevedoring Services, Inc.,68 the Court upheld the authority of government agencies to terminate at any time hold-over permits.69  Thus, considering that the PTCC’s operation of the restaurant and the boat ride services was by mere tolerance, the PTA can, at any time, terminate such operation.

The CA ruled that “the closure of the restaurant and boat ride business within the PTA Complex was tainted with bad faith on the part of [the] defendants-appellants.”70  It referred to the Sheriff’s Report dated January 19, 1994, which stated that no such repairs and rehabilitation were actually undertaken.  Further, the petitioners engaged the services of a new restaurant operator (the New Selecta Restaurant) after the closure of the restaurant  per official receipts showing that the new operator of the restaurant paid PTA commissions for its catering services from March 1994 to April 1994.71chanrobleslaw

The Court disagrees.  The records disclose that sufficient notice was given by the PTA for the respondents to vacate the area.  The Sheriff’s Report dated January 19, 1994, alleging that there were, in fact, no repairs and rehabilitation undertaken in the area at the time of inspection cannot be given weight.  It must be noted that the RTC had issued on November 11, 1993 a TRO enjoining the petitioners from pursuing its actions.  Thus, the absence of any business activity in the premises is even proof of the petitioner’s compliance to the order of the trial court.  Furthermore, the Sheriff’s Report was executed only about a month after the announced construction or development; thus, it cannot be expected that the petitioners would immediately go full-blast in the implementation of the repair and renovation.

As to the alleged engagement of the services of a new restaurant operator, the Court agrees with the petitioners that the engagement of New Selecta Restaurant was temporary and due only to the requests of the guests who needed catering services for the duration of their stay.  The evidence offered by the respondents which were receipts issued to New Selecta Restaurant on different dates even emphasize this point.72  From the foregoing, the Court concludes that the engagement of New Selecta Restaurant is not continuous but on contingency basis only.

With respect to Laborte’s liability in his official and personal capacity, the Court finds that Laborte was simply implementing the lawful order of the PTA Management.  As a general rule “the officer cannot be held personally liable with the corporation, whether civilly or otherwise, for the consequences of his acts, if acted for and in behalf of the corporation, within the scope of his authority and in good faith.”73  Furthermore, the Court also notes that the charges against petitioners Laborte and the PTA for grave coercion and for the violation of R.A. 671374 have all been dismissed.75  Thus, the Court finds no basis to hold petitioner Laborte liable.

Likewise, the award of damages to the respondents and respondents-intervenors is without basis.  Absent a contract between the PTCC and the PTA, and considering further that the respondents were adequately notified to properly vacate the PTA Complex, the Court finds no justifiable reason to award any damages.  Neither may the respondents-intervenors claim damages since the act directed against the PTCC was a lawful exercise of the PTA’s management prerogative.  While it is true that the exercise of management prerogative is  a recognized right of a corporate entity, it can not be gainsaid that the exercise of such right must be tempered with justice, honesty, good faith76 and a careful regard of other party’s rights.  In the instant case, there is ample evidence to show that the petitioners were able to observe the same.

WHEREFORE, the petition is GRANTED.  The Decision dated May 29, 2008 and the Resolution dated July 23, 2008 of the Court of Appeals are VACATED. The Amended Complaint and the Complaint-in-Intervention filed by the Respondents in the Regional Trial Court, Branch 28, Sta. Cruz, Laguna in  Civil Case No. SC-3150 are DISMISSED.

SO ORDERED.cralawlawlibrary

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ. concur.

Endnotes:


1Rollo, pp. 12-37.

2 Penned by Associate Justice Fernanda Lampas Peralta, with Associate Justices Edgardo P. Cruz and Marlene G. Sison, concurring; id. at 42-61.

3 Id. at 178-184.

4 Id. at 86.

5 Id. at 63-85.

6 Id. at 43-44, 14-15, 91; TSN, November 25, 1993, pp. 24-26, TSN, June 6, 1996, pp. 12-14, and TSN, October 4, 1996, p. 17.

7 Id. at 91-96.

8 Id. at 94-95.

9 Id. at 97.

10 Id. at 107-110.

11 Id. at 45, 114.

12 Id. at 118-125.

13 Id. at 120-121.

14 Id. at 118-119, 122-123.

15 Id. at 123.

16 Id. at 128-133.

17 Id. at 128-131.

18 Id. at 146.

19 Id. at 147-152.

20 Id. at 154-163.

21 Id. at 157-158.

22 Id. at pp. 184.

23 Id. at 186-210.

24 Id. at 42-61.

25 Id. at 63-85.

26 Id. at 86.

27 Id. at 21-22.

28 Id. at 54.

29Westmont Investment Corporation v. Amos P. Francia, Jr., et al., G.R. No. 194128, December 7, 2011, 661 SCRA 787, 800.

30Ahag v. Cabiling, 18 Phil. 415 (1911); Chua v. Court of Appeals, G.R. No. 88383, February 19, 1992, 206 SCRA 339, 346.

31 258-A Phil. 994 (1989).

32 191 Phil. 72 (1981).

33 G.R. No. 152866, October 6, 2010, 632 SCRA  236.

34 Id. at 246.

35 116 Phil. 977 (1962).

36 Id. at 980-981.

37 BLACK’S LAW DICTIONARY, 8th Edition, p. 761.

38People v. Maximo Ramos y San Diego, 417 Phil. 807, 815 (2001).

39 TSN, August 28, 1998, pp. 45-47; records, pp. 402, 432; Folder of Exhibits, Exhibit “C,” p. 13.

40 TSN, August 28, 1998, p. 49; records, pp. 198, 429.

41 TSN, August 28, 1998, p. 54.

42 TSN, November 23, 1998, p. 2; records, pp. 38, 42.

43 TSN, November 23, 1998, pp. 3-4; records, pp. 47, 50.

44 TSN, November 23, 1998, p. 4; records, pp. 44-46.

45 TSN, November 23, 1998, pp. 4-5; records, pp. 48-49.

46 TSN, November 23, 1998, pp. 5-6.

47 TSN, November 23, 1998, pp. 7-8.

48 TSN, November 23, 1998, pp. 8-9; records, pp. 196, 431.

49 TSN, November 23, 1998, pp. 9-10.

50 TSN, August 28, 1998, pp. 45-47; records, pp. 402, 432; Folder of Exhibits, Exhibit “C,” p. 13.

51 TSN, August 28, 1998, p. 49; records, pp. 198, 429.

52 TSN, November 23, 1998, p. 2; records, pp. 38, 42.

53 TSN, November 23, 1998, pp. 3-4; records, pp. 47, 50.

54 TSN, November 23, 1998, p. 4; records, pp. 44-46.

55 TSN, November 23, 1998, pp. 4-5; records, pp. 48-49.

56 TSN, November 23, 1998, pp. 8-9; records, pp. 196, 431.

57Vitarich Corporation v. Losin, G.R. No. 181560, November 15, 2010, 634 SCRA 671, 682.

58Rollo, pp. 99-106.

59 Id. at 99-102.

60 Id. at 103-104.

61 Id. at 105-106.

62 Id. at 25-26.

63 Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004, 433 SCRA 756.

64Rollo, p. 26.

65 Id. at 26-28.

66 Id. at 25.

67 Id. at 52-53, 178.

68 512 Phil. 74 (2005).

69 Id. at 85-88.

70Rollo, p. 53.

71 Id.

72 Folder of Exhibits, Exhibits “P,” “P-1” to “P-3”, pp. 47-50.

73 Francisco v. Mejia, 415 Phil. 153, 166 (2001).

74 An Act Establishing a Code of Conduct and Ethical Standards for Public Officials and Employees.

75Rollo, pp. 31-32; 213-220.

76 CIVIL CODE, Article 19.
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