Professional Documents
Culture Documents
August 3
August 3
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 182475
a job with a grade four rank, Morales was subsequently promoted in April
20034 to the position of Customer Service Representative (CSR), with a
job grade 6 rank and a gross monthly salary of P16,250.00. It was while
occupying the latter position that Morales was informed by Federico
Mariano , the Senior Manager of Metrobanks Tacloban City Main Branch,
that he was covered by the banks Special Separation Program (SSP)
and that, in accordance therewith, his employment was going to be
terminated on the ground of redundancy.5
On 27 August 2003, Morales was furnished a copy of a memorandum of
the same date informing him that, after a review of its organizational
structure, Metrobank had found his services redundant and will consider
him separated effective 1 October 2003. Assured that his termination was
through no fault of his own but mainly due to business exigencies and
developments in the banking industry, Morales was notified that he shall
be paid the following: (a) a redundancy premium/separation pay, on top
of his entitlements under the banks retirement plan; (b) proportionate
13th month pay; (c) cash conversion of his outstanding vacation and sick
leave credits; and, if applicable, (d) the return of his Provident Fund
contributions; and, (e) cash surrender value of his Insurance. 6Having
signed a form on the same day signifying his unqualified and
unconditional acceptance of Metrobanks decision to terminate his
employment,7 Morales executed on 10 November 2003 a Release,
Waiver and Quitclaim acknowledging receipt of the sum of P158,496.95
as full payment of his monetary entitlements.8
On 20 February 2004, Morales filed against Metrobank a complaint for
illegal dismissal, separation pay, backwages, moral and exemplary
damages as well as attorneys fees.9 Together with a similar complaint
filed by one Raymundo Piczon , Morales complaint was docketed as
NLRC RAB Case No. 2-0046-04 before the Regional Arbitration Branch
No. VIII of the National Labor Relations Commission (NLRC). In support
of his complaint, Morales alleged that, despite being an organic member
of the Rizal Avenue Branch, he was assigned to Metrobanks Zamora St.
Branch in view of his having signed a petition against the driver of the
armored car who was eventually dismissed. With his actions suddenly
closely watched and blown out of proportion, Morales claimed that he
started receiving directives for him to explain his unauthorized absences
and out of town allowances which, far from being infractions, were simply
the results of miscommunication. Arbitrarily singled out for termination, he
was supposedly forced to sign the Release, Waiver and Quitclaim by
Mariano who embarrassed him by announcing that his services had
already been terminated and that he was no longer required to report for
work.10
In its position paper, Metrobank averred that it had adopted the SSP
since 1995 as a way of addressing worsening economic conditions and
stiff competition with strategies designed to make its operations efficient
but cost-effective. Towards said end, it claimed to have embarked on a
major component of SSP called the Headcount Rationalization Program
(HRP) which, taking into consideration the volume of its transactions vis-vis the massive computerization and automation of its operating
systems, targeted the reduction of its existing workforce by 10% by the
end of 2003. Having created and/or consolidated branches, centralized
loan processing and adopted a branch headcount reduction scheme,
Metrobank asserted that it identified 291 positions as superfluous,
utilizing as criteria such factors as performance, work attitude and cost.
Among the areas where the HRP was conducted was Visayas Region III
which was directed to reduce the manpower of its 13 branches spread
out in three provinces by 15 employees. Affected was its eight-man
reserve pool which was composed of former Solidbank employees who
acted as relievers whenever temporary vacancies occurred in the
Regions branches.11
Metrobank further asserted that the volume of the Regions transactions
required only six employees in the reserve pool, thereby rendering two
positions superfluous. As a member of the reserve pool, Morales
allegedly had a record of unauthorized absences as well as complaints
for undesirable and unprofessional conduct from various Branch Heads.
In view of the absence of redeployment opportunities for him, Metrobank
claimed Morales was included in the SSP and was eventually considered
for termination on the ground of redundancy. Aside from the fact that
Morales was duly informed of the managements decision more than one
month ahead of his actual severance from service, Metrobank claimed to
have served the Department of Labor and Employment (DOLE) the
required Establishment Termination Report on 29 August 2003. Likewise
accorded the separation benefits included in the SSP, Morales
supposedly expressed his unqualified and unconditional acceptance of
his termination and, upon receipt of his monetary entitlements, voluntarily
executed the aforesaid Release, Waiver and Quitclaim. Claiming good
faith in the implementation of its redundancy program, Metrobank prayed
for the dismissal of Morales complaint for lack of merit. 12
On 11 November 2005, Executive Labor Arbiter Jesselito Latoja rendered
a decision finding Morales termination from service illegal on the ground
that his promotion in April 2003 contradicted Metrobanks claim that his
(d)
THE COURT OF APPEALS ERRONEOUSLY UPHELD THE VALIDITY
OF THE QUITCLAIM ALTHOUH IT IS APPARENT THAT THE
PETITIONER WAS COMPELLED TO ACCEDE TO IT BY ECONOMIC
REASONS.19
We find the petition bereft of merit.
One of the authorized causes for the dismissal of an
employee,20 redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed to meet the
demands of the business enterprise.21 A position is redundant when it is
superfluous, and superfluity of a position or positions could be the result
of a number of factors, such as the overhiring of workers, a decrease in
the volume of business or the dropping of a particular line or service
previously manufactured or undertaken by the enterprise. 22 Time and
again, it has been ruled that an employer has no legal obligation to keep
more employees than are necessary for the operation of its
business.23 For the implementation of a redundancy program to be valid,
however, the employer must comply with the following requisites: (1)
written notice served on both the employees and the DOLE at least one
month prior to the intended date of termination of employment; (2)
payment of separation pay equivalent to at least one month pay for every
year of service; (3) good faith in abolishing the redundant positions; and
(4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant and accordingly abolished.24
Contrary to the first and second errors Morales imputes against the CA,
our perusal of the record shows that Metrobank has more than amply
proven compliance with the third and fourth of the above-enumerated
requisites for the validity of his termination from service on the ground of
redundancy. Under the SSP which Metrobank adopted in 1995,
employees who voluntarily gave up their employment were paid the
amount of separation pay they were entitled under the law and a
premium equivalent to 50%-75% of their salaries. It appears that
employees "whose work evaluation showed consistent poor performance
and/or those who had not been promoted for five years" were also
considered primary candidates for optional separation from service. 25 In
order to meet the challenges of the business and to make its operations
efficient and cost effective, however, it was shown that Metrobank further
PEREZ, J.:
FACTS:
Sometime in August 1992, petitioner Lenn Morales (Morales)
was hired by Solidbank as Teller for its Rizal Avenue Branch
in Tacloban City. With said banks merger with respondent
Metropolitan Bank & Trust Company (Metrobank), the latter
absorbed Morales and assigned him to its Customer Service
Relations-Reserve Pool (CSR-RP) which was composed of
employees who, with no permanent places of assignment,
acted as relievers whenever temporary vacancies arise in
other branches.
Morales was later-on promoted as a Customer Service
Representative (CSR). Federico Mariano, the Senior
Manager of Metrobank, informed Morales that he was
covered by the banks Special Separation Program (SSP) and
that, in accordance therewith, his employment was going to
be terminated on the ground of redundancy.
On 27 August 2003, Morales was furnished a copy of a
memorandum of the same date informing him that, after a
review of its organizational structure, Metrobank had found
his services redundant and will consider him separated
effective 1 October 2003. Assured that his termination was
through no fault of his own but mainly due to business
exigencies and developments in the banking industry,
Morales was notified that he shall be paid the following: (a) a
redundancy premium/separation pay, on top of his
and respect, but even finality, for as long as they are supported by
substantial evidence. 13 It is not the function of the Court to once again
review and weigh the conflicting evidence, determine the credibility of the
witnesses or otherwise substitute its own judgment for that of the
administrative agency on the sufficiency of the evidence. 14 Nevertheless,
when the inference made or the conclusion drawn on the basis of certain
state of facts is manifestly mistaken, the Court is not estopped from
exercising its power of review. 15
Public respondent NLRC premised the reversal of its decision and the
affirmation of the validity of petitioner's dismissal on the latter's alleged
failure to qualify for the position of Road Engineer as contracted for
during the probationary period.
Probationary employees, notwithstanding their limited tenure, are also
entitled to security of tenure. Thus, except for just cause as provided by
law or under the employment contract, a probationary employee cannot
be terminated. 16 As explicitly provided under Article 281 of the Labor
Code, a probationary employee may be terminated on two grounds: (a)
for just cause or (b) when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to
the employee at the time of his engagement. 17
Respondents' attempt to justify petitioner's dismissal based on the
aforecited second ground is unwarranted. The record is bereft of any
evidence to show that respondent employer ever conveyed to petitioneremployee the standards or requirements that he must comply with in
order to become a regular employee. In fact, petitioner has consistently
denied that he was even given the chance to qualify for the position for
which he was contracted.18 Private respondent Al-Khodari's general
averments regarding petitioner's failure to meet its standards for regular
employment, which were not even corroborated by any other evidence,
are insufficient to justify petitioner's dismissal.
Neither do we subscribe to the conclusion that petitioner voluntarily
consented to his dismissal despite his signature in the letter of
termination dated April 2, 1990, indicating assent to his termination from
service for failing to qualify for the position and releasing private
respondents from all claims and liabilities. In our jurisprudence,
quitclaims, waivers or releases are looked upon with disfavor, particularly
those executed by employees who are inveigled or pressured into signing
them by unscrupulous employers seeking to evade their legal
responsibilities.19 The fact that petitioner signed his notice of termination
and failed to make any outright objection thereto did not altogether mean
However, upon motions for reconsideration filed by petitioner and the private
respondent, the NLRC set aside its decision and held in favor of private
respondents. NLRC found that petitioner failed to meet respondent
employer's standard during the probationary period thereby leading to his
dismissal. NLRC also discarded petitioner's allegation that he was merely
forced to agree to his dismissal as the record is bereft of any evidence of
force and intimidation perpetrated by respondent employer.
ISSUE: Whether or not petitioner was illegally dismissed?
HELD: Yes. Probationary employees, notwithstanding their limited tenure,
are also entitled to security of tenure. A probationary employee may be
terminated on two grounds: (a) for just cause or (b) when he fails to qualify
as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his engagement.
Respondents' attempt to justify petitioner's dismissal based on the
aforequoted second ground is unwarranted. The record is bereft of any
evidence to show that respondent employer ever conveyed to petitioneremployee the standards or requirements that he must comply with in order to
become a regular employee. In fact, petitioner has consistently denied that
he was even given the chance to qualify for the position for which he was
contracted.
Neither do we subscribe to the conclusion that petitioner voluntarily
consented to his dismissal despite his signature in the letter of termination. In
our jurisprudence, quitclaims, waivers or releases are looked upon with
disfavor, particularly those executed by employees who are inveigled or
pressured into signing them by unscrupulous employers seeking to evade
their legal responsibilities. The fact that petitioner signed his notice of
termination and failed to make any outright objection thereto did not
altogether mean voluntariness on his part. Neither did the execution a of a
final settlement and receipt of the amounts agreed upon foreclose his right to
pursue a legitimate claim for illegal dismissal.
The parties agreed that the requests of HRCC for payment should
include progress accomplishment of its completed works as approved by
FFCCI. Additionally, they agreed to conduct a joint measurement of the
completed works of HRCC together with the representative of DPWH and
consultants to arrive at a common quantity.
Thereafter, HRCC commenced the construction of the works pursuant to
the Subcontract Agreement.
On September 17, 2004, HRCC submitted to FFCCI its first progress
billing in the amount of P2,029,081.59 covering the construction works it
completed from August 16 to September 15, 2004.4 However, FFCCI
asserted that the DPWH was then able to evaluate the completed works
of HRCC only until July 25, 2004. Thus, FFCCI only approved the gross
amount of P423,502.88 for payment. Pursuant to the Subcontract
Agreement, FFCCI deducted from the said gross amount P42,350.29 for
retention and P7,700.05 for expanded withholding tax leaving a net
payment in the amount of P373,452.54. This amount was paid by FFCCI
to HRCC on December 3, 2004.5
FFCCI and the DPWH then jointly evaluated the completed works of
HRCC for the period of July 26 to September 25, 2004. FFCCI claimed
that the gross amount due for the completed works during the said period
wasP2,008,837.52. From the said gross amount due, FFCCI deducted
therefrom P200,883.75 for retention andP36,524.07 for expanded
withholding tax leaving amount of P1,771,429.45 as the approved net
payment for the said period. FFCCI paid this amount on December 21,
2004.6
On October 29, 2004, HRCC submitted to FFCCI its second progress
billing in the amount of P1,587,760.23 covering its completed works from
September 18 to 25, 2004.7 FFCCI did not pay the amount stated in the
second progress billing, claiming that it had already paid HRCC for the
completed works for the period stated therein.
On even date, HRCC submitted its third progress billing in the amount
of P2,569,543.57 for its completed works from September 26 to October
25, 2004.8 FFCCI did not immediately pay the amount stated in the third
progress billing, claiming that it still had to evaluate the works
accomplished by HRCC.
xxx
The total retention money deducted by [FFCCI] from [HRCCs] three
progress billings, amounts to [P]395,945.14 x x x. The retention money is
part of [HRCCs] progress billings and must, therefore, be credited to this
account. The two amounts (deductions and net payments) total
[P]3,868,467.00 x x x. This represents the total gross payments that
should be credited and deducted from the total gross billings to arrive at
what has not been paid to the [HRCC]. This results in the amount of
[P]2,239,452.63 ([P]6,107,919.63 - [P]3,868,467.00) as the correct
balance of [HRCCs] unpaid billings.16
Further, the CIAC ruled that FFCCI had already waived its right under the
Subcontract Agreement to require a joint measurement of HRCCs
completed works as a condition precedent to the payment of the latters
progress billings. Hence:
[FFCCI] admits that in all three instances where it paid [HRCC] for its
progress billings, it never required compliance with the aforequoted
contractual provision of a prior joint quantification. Such repeated
omission may reasonably be construed as a waiver by [FFCCI] of its
contractual right to require compliance of said condition and it is now too
late in the day to so impose it. Article 6 of the Civil Code expressly
provides that "rights may be waived unless the waiver is contrary to law,
public order, public policy, morals or good customs". The tribunal cannot
see any such violation in this case.
xxx
[FFCCIs] omission to enforce the contractually required condition of
payment, has led [HRCC] to believe it to be true that indeed [FFCCI] has
waived the condition of joint quantification and, therefore, [FFCCI] may
not be permitted to falsify such resulting position.17
Likewise, the CIAC held that FFCCIs non-payment of the progress
billings submitted by HRCC gave the latter the right to rescind the
Subcontract Agreement and, accordingly, HRCCs work stoppage was
justified. It further opined that, in effect, FFCCI had ratified the right of
HRCC to stop the construction works as it did not file any counterclaim
against HRCC for liquidated damages arising therefrom.
FFCCI then filed a petition for review with CA assailing the foregoing
disposition by the CIAC.
The CA Decision
On February 6, 2009, the CA rendered the herein assailed
Decision18 denying the petition for review filed by FFCCI. The CA agreed
with the CIAC that FFCCI had waived its right under the Subcontract
Agreement to require a joint quantification of HRCCs completed works.
The CA further held that the amount due to HRCC as claimed by FFCCI
could not be given credence since the same was based on a survey of
the completed works conducted without the participation of HRCC.
Likewise, being the main contractor, it ruled that it was the responsibility
of FFCCI to include HRCC in the joint measurement of the completed
works. Furthermore, the CA held that HRCC was justified in stopping its
construction works on the project as the failure of FFCCI to pay its
progress billings gave the former the right to rescind the Subcontract
Agreement.
FFCCI sought a reconsideration19 of the said February 6, 2009 Decision
but it was denied by the CA in its Resolution20 dated April 13, 2009.
Issues
In the instant petition, FFCCI submits the following issues for this Courts
resolution:
[I.]
x x x First, [d]oes the act of [FFCCI] in conducting a verification survey of
[HRCCs] billings in the latters presence amount to a waiver of the right
of [FFCCI] to verify and approve said billings? What, if any, is the legal
significance of said act?
[II.]
x x x Second, [d]oes the payment of [FFCCI] to [HRCC] based on the
results of the above mentioned verification survey result in the former
being obliged to accept whatever accomplishment was reported by the
latter?
[III.]
[IV.]
x x x Fourth, [d]oes the failure of [FFCCI] to interpose a counterclaim
against [HRCC] for liquidated damages due to the latters work stoppage,
amount to a ratification of such work stoppage?
[V.]
x x x Fifth, [d]id the [CA] disregard or overlook significant and material
facts which would affect the result of the litigation?21
In sum, the crucial issues for this Courts resolution are: first, what is the
effect of FFCCIs non-compliance with the stipulation in the Subcontract
Agreement requiring a joint quantification of the works completed by
HRCC on the payment of the progress billings submitted by the latter;
and second, whether there was a valid rescission of the Subcontract
Agreement by HRCC.
The Courts Ruling
The petition is not meritorious.
Procedural Issue:
Finality and Conclusiveness of the CIACs Factual Findings
Before we delve into the substantial issues raised by FFCCI, we shall first
address the procedural issue raised by HRCC. According to HRCC, the
instant petition merely assails the factual findings of the CIAC as affirmed
by the CA and, accordingly, not proper subjects of an appeal under Rule
45 of the Rules of Court. It likewise pointed out that factual findings of the
CIAC, when affirmed by the CA, are final and conclusive upon this Court.
Generally, the arbitral award of CIAC is final and may not be appealed
except on questions of law.
Executive Order (E.O.) No. 100822 vests upon the CIAC original and
exclusive jurisdiction over disputes arising from, or connected with,
contracts entered into by parties involved in construction in the
Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of
CIAC "shall be final and inappealable except on questions of law which
shall be appealable to the Supreme Court."23
FFCCI shall pay [HRCC] within thirty (30) days upon receipt of the
[HRCCs] Monthly Progress Billings subject to deductions due to ten
percent (10%) retention, and any other sums that may be due and
recoverable by FFCCI from [HRCC] under this SUBCONTRACT. In all
cases, however, two percent (2%) expanded withholding tax on the
[HRCCs] income will be deducted from the monthly payments.
xxx
4.3 Terms of Payment
The parties further agreed that the extent of HRCCs completed works
that would be indicated in the monthly progress billings should be
determined through a joint measurement conducted by FFCCI and
HRCC together with the representative of DPWH and the consultants.
MR. J. B. JOAQUIN:
Hindi pumirma?
ENGR. AGANON:
Hindi sila puwede pumirma kasi ho kami po ang contractor ng DPWH
hindi sila.34 (Emphasis supplied)
FFCCI had waived its right to demand for a joint measurement of HRCCs
completed works under the Subcontract Agreement.
The CIAC held that FFCCI, on account of its failure to demand the joint
measurement of HRCCs completed works, had effectively waived its
right to ask for the conduct of the same as a condition sine qua non to
HRCCs submission of its monthly progress billings.
We agree.
In People of the Philippines v. Donato,35 this Court explained the doctrine
of waiver in this wise:
Waiver is defined as "a voluntary and intentional relinquishment or
abandonment of a known existing legal right, advantage, benefit, claim or
privilege, which except for such waiver the party would have enjoyed; the
voluntary abandonment or surrender, by a capable person, of a right
known by him to exist, with the intent that such right shall be surrendered
and such person forever deprived of its benefit; or such conduct as
warrants an inference of the relinquishment of such right; or the
intentional doing of an act inconsistent with claiming it."
The joint quantification was done only between them and DPWH.
As to what rights and privileges may be waived, the authority is settled:
xxxx
ENGR. AGANON:
is the general rule that a person may waive any matter which affects his
property, and any alienable right or privilege of which he is the owner or
which belongs to him or to which he is legally entitled, whether secured
by contract, conferred with statute, or guaranteed by
Progress Billing
1st Progress Billing dated September 17,
200437
2nd Progress Billing dated October 29, 200438
3rd Progress Billing dated October 29, 200439
4th Progress Billing dated November 25, 2004
Period Covered
August 16 to
September 15, 2004
September 18 to 25,
2004
September 26 to
October 25, 2004
October 26 to
November 25, 2004
Amount
P2,029,081.59
P1,587,760.23
P2,569,543.57
P1,527,112.95
constitution, provided such rights and privileges rest in the individual, are
intended for his sole benefit, do not infringe on the rights of others, and
further provided the waiver of the right or privilege is not forbidden by law,
and does not contravene public policy; and the principle is recognized
that everyone has a right to waive, and agree to waive, the advantage of
a law or rule made solely for the benefit and protection of the individual in
his private capacity, if it can be dispensed with and relinquished without
infringing on any public right, and without detriment to the community at
large. x x x36(Emphasis supplied and citations omitted)
Here, it is undisputed that the joint measurement of HRCCs completed
works contemplated by the parties in the Subcontract Agreement never
materialized. Indeed, HRCC, on separate occasions, submitted its
monthly progress billings indicating the extent of the works it had
completed sans prior joint measurement. Thus:
FFCCI did not contest the said progress billings submitted by HRCC
despite the lack of a joint measurement of the latters completed works as
required under the Subcontract Agreement. Instead, FFCCI proceeded to
conduct its own verification of the works actually completed by HRCC
and, on separate dates, made the following payments to HRCC:
Date of Payment
Period Covered
Amount
December 3, 200440
P1,771,429.45
P1,327,639.87
P373,452.24
The injured party may choose between the fulfillment and the rescission
of the obligation, with the payment of damages in either case. He may
also seek rescission, even after he has chosen fulfillment, if the latter
should become impossible.
The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons
who have acquired the thing, in accordance with Articles 1385 and 1388
and the Mortgage Law.
The rescission referred to in this article, more appropriately referred to as
resolution is on the breach of faith by the defendant which is violative of
the reciprocity between the parties.44 The right to rescind, however, may
be waived, expressly or impliedly.45
While the right to rescind reciprocal obligations is implied, that is, that
such right need not be expressly provided in the contract, nevertheless
the contracting parties may waive the same.46
Contrary to the respective dispositions of the CIAC and the CA, we find
that HRCC had no right to rescind the Subcontract Agreement in the
guise of a work stoppage, the latter having waived such right. Apropos is
Article 11.2 of the Subcontract Agreement, which reads:
11.2 Effects of Disputes and Continuing Obligations
Notwithstanding any dispute, controversy, differences or arbitration
proceedings relating directly or indirectly to this SUBCONTRACT
Agreement and without prejudice to the eventual outcome thereof,
[HRCC] shall at all times proceed with the prompt performance of the
Works in accordance with the directives of FFCCI and this
SUBCONTRACT Agreement.47 (Emphasis supplied)
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
ARTURO D. BRION
JOSE PORTUGAL PEREZ
Associate Justice
Associate Justice
1wphi1
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of
the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R TI F I C ATI O N
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
Footnotes
1
Penned by Associate Justice Romeo F. Barza, with Associate
Justices Josefina Guevara-Salonga and Arcangelita M. RomillaLontok, concurring; rollo, pp. 47-69.
2
Id. at 78.
3
Id. at 85-92.
4
Id. at 93.
5
Id. at 109.
6
Id. at 111.
7
Id. at 94.
8
Id. at 95.
9
Id. at 113.
10
Id. at 96.
Id. at 79-84.
Id. at 97-105.
13
Id. at 124.
14
Id. at 116-135.
15
Id. at 134.
16
Id. at 127-128.
17
Id. at 130-131.
18
Supra note 1.
19
Rollo, pp. 70-77.
20
Supra note 2.
21
Rollo, pp. 21-22.
22
Creating an Arbitration Machinery in the Construction Industry
of the Philippines, otherwise known as the "Construction Industry
Arbitration Law".
23
SC Circular No. 1-91 and Revised Administrative Circular No. 195 provides that appeal from the arbitral award of the CIAC must
first be brought to the CA on questions of fact, law or mixed
questions of fact and law.
24
G.R. No. 110434, December 13, 1993, 228 SCRA 397.
25
Id. at 405.
26
479 Phil. 578 (2004).
27
Id. at 590-591.
28
Vda. De Formoso v. Philippine National Bank, G.R. No. 154704,
June 1, 2011.
29
See Philippine National Construction Corporation v. Court of
Appeals, G.R. No. 159417, January 25, 2007, 512 SCRA 684,
695.
30
Civil Code of the Philippines, Article 1370.
31
G.R. No. 168108, April 13, 2007, 521 SCRA 131.
32
Id. at 144.
33
Rollo, p. 87.
34
Id. at 330-331.
35
G.R. No. 79269, June 5, 1991, 198 SCRA 130.
36
Id. at 154.
37
Supra note 4.
38
Supra note 7.
39
Supra note 8.
40
Supra note 5.
41
Supra note 6.
42
Supra note 9.
43
Rollo, pp. 65-66.
44
Pryce Corp. v. Phil. Amusement and Gaming Corp., 497 Phil.
490, 505 (2005), citing the Concurring Opinion of Mr. Justice J.B.
L. Reyes in Universal Food Corp. v. CA, 144 Phil. 1, 21 (1970).
11
12
under the Subcontract Agreement for the payment of the latters progress
billings, i.e. joint measurement of the completed works, and, hence, it
was justified in not paying the amount stated in HRCCs progress billings.
WAIVER OF RIGHTS
F.F. CRUZ & CO., INC. vs. HR CONSTRUCTION CORPORATION
G.R. No. 187521
March 14, 2012
Facts:
Sometime in 2004, FFCCI entered into a contract with the Department of
Public Works and Highways (DPWH) for the construction of the
Magsaysay Viaduct, known as the Lower Agusan Development Project.
On August 9, 2004, FFCCI, in turn, entered into a Subcontract Agreement
with HR Construction Corporation (HRCC) for the supply of materials,
labor, equipment, tools and supervision for the construction of a portion of
the said project called the East Bank Levee and Cut-Off Channel in
accordance with the specifications of the main contract. Pursuant to the
Subcontract Agreement, HRCC would submit to FFCCI a monthly
progress billing which the latter would then pay, subject to stipulated
deductions, within 30 days from receipt thereof.
The parties agreed that the requests of HRCC for payment should
include progress accomplishment of its completed works as approved by
FFCCI. Additionally, they agreed to conduct a joint measurement of the
completed works of HRCC together with the representative of DPWH and
consultants to arrive at a common quantity. Thereafter, HRCC
commenced the construction of the works pursuant to the Subcontract
Agreement. However, before the project was completed, HRCC pursuant
to the arbitration clause in the subcontract agreement filed with the
Construction Industry Arbitration Commission a complaint praying that
FFCI pay the overdue application plus legal interests they have not paid.
FFCCI maintained that HRCC failed to comply with the condition stated
Issue:
Whether or not FFCCI is already barred from contesting HRCCs
valuation of the completed works having waived its right to demand the
joint measurement requirement.
Ruling:
The Supreme Court held that FFCCI had waived its right to demand for a
joint measurement of HRCCs completed works under the Subcontract
Agreement. Further, on account of its failure to demand the joint
measurement of HRCCs completed works, had effectively waived its
right to ask for the conduct of the same as a condition sine qua non to
HRCCs submission of its monthly progress billings. Basically, the instant
issue calls for a determination as to which of the parties respective
valuation of accomplished works should be given credence. FFCCI
claims that its valuation should be upheld since the same was the result
of a measurement of the completed works conducted by it and the
DPWH.
On the other hand, HRCC maintains that its valuation should be upheld
on account of FFCCIs failure to observe the joint measurement
requirement in ascertaining the extent of its completed works. FFCCI
admits that in all three instances where it paid HRCC for its progress
billings, it never required compliance with the aforequoted contractual
provision of a prior joint quantification. Such repeated omission may
reasonably be construed as a waiver by FFCCI of its contractual right to
require compliance of said condition and it is now too late in the day to so
impose it. Article 6 of the Civil Code expressly provides that rights may
be waived unless the waiver is contrary to law, public order, public policy,
morals or good customs. The tribunal cannot see any such violation in
this case.
ROMERO, J.:
On May 14, 1997, respondent Integrated Labor Organization-Pagpalain
Haulers Worker's Union (hereafter referred to as ILO-PHILS), in a bid to
represent the rank-and-file drivers and helpers of petitioner Pagpalain
Haulers, Inc. (herafter referred to as Pagpalain), filed a petition for
certification election with the Department of Labor and Employment. ILOPHILS attached to the petition copies of its charter certificate, its
constitution and by-laws, its books of account, and a list of its officers and
their addresses.
the Labor Code. However, this public policy has itself been changed by the
executive department, through the amendments introduced in Book V of the
Omnibus Rules by Department Order No. 9. It is not for us to question this
change in policy, it being a well-established principle beyond question that it
is not within the province of the courts to pass judgment upon the policy of
legislative or executive action. 9 Notwithstanding the expanded judicial power
under Section 1, Article VIII of the Constitution, an inquiry on the abovestated policy would delve into matters of wisdom not within the powers of this
Court.
(i) The funds of the organization shall not be applied for any
purpose or object other than those expressly provided by its
constitution or by-laws or those expressly authorized by written
resolution adopted by the majority of the members at a general
meeting duly called for the purpose;
(j) Every income or revenue of the organization shall be
evidenced by a record showing its source, and every
expenditure of its funds shall be evidenced by a receipt from
the person to whom the payment is made, which shall state the
date, place and purpose of such payment. Such record or
receipt shall form part of the financial records of the
organization.
xxx xxx xxx
(l) The treasurer of any labor organization and every officer
thereof who is responsible for the account of such organization
or for the collection, management, disbursement, custody or
control of the fund, moneys and other properties of the
organization, shall render to the organization and to its
members a true and correct account of all the moneys received
and paid by him since he assumed office or since the last day
on which he rendered such account, and of all bonds, securities
and other properties of the organization entrusted to his
custody or under his control. The rendering of such account
shall be made:
(1) At least once a year within 30 days after the close of its
fiscal year;
(2) At such other times as may be required by a resolution of
the majority of the members of the organization;
(3) Upon vacating his office.
The account shall be duly audited and verified by affidavit and a
copy thereof shall be furnished the Secretary of Labor.
motion to dismiss the petition on the ground that the books of account
submitted by ILO-PHILS were not verified under oath.
As can be gleaned from the above, the Labor Code does not require the
submission of books of account in order for a labor organization to be
registered as a legitimate labor organization.