54 – PDIC vs.

Philippine Countryside Rural Bank

Essence of Due Process

Facts: The Board of Directors of the PDIC (PDIC Board) adopted 2 resolutions approving the
conduct of an investigation, in accordance with Section 9(b-1) of Republic Act (R.A.) No. 3591,
as amended on PCRBI based on a Complaint-Affidavit filed by a corporate depositor, the
Philippine School of Entrepreneurship and Management (PSEMI) through its president, Jacinto
L. Jamero.
According to PDIC, in the course of its investigation, PCRBI was found to have granted loans to
certain individuals, which were settled by way of dacion of properties. These properties,
however, had already been previously foreclosed and consolidated under the names of PRBI,
BEAI and RBCI. Subsequently, PRBI and BEAI refused entry to their bank premises and access
to their records and documents by the PDIC Investigation Team, upon advice of their respective
counsels on the basis the prior approval of the Monetary Board must first be secured.
CA granted the Bank’s application for a TRO.
PDIC avers that its investigation power, as distinguished from the examination power of the
PDIC under Section 8 of the same law, does not need prior approval of the Monetary Board.
PDIC alleges that the CA-Cebu, in issuing the TRO violated the fundamental rule that courts
should avoid issuing injunctive relief which would in effect dispose of the main case without trial.
Issue: W/N PDIC was deprived of due process.
Ruling: No. The essence of procedural due process is found in the reasonable opportunity to
be heard and submit one’s evidence in support of his defense.The Court finds that procedural
due process was observed by the CA-Cebu. The parties were afforded equal opportunity to
present their arguments. In the absence of any indication to the contrary, the CA-Cebu must be
accorded the presumption of regularity in the performance of their functions. However, as
discussed herein, the matter of whether it erred in its conclusion and issuance of the TRO,
preliminary injunction and final injunction is another matter altogether.
The practical justification for not requiring the Monetary Board approval to conduct an
investigation of banks is the administrative hurdles and paperwork it entails, and the
correspondent time to complete those additional steps or requirements. As in other types of
investigation, time is always of essence, and it is prudent to expedite the proceedings if an
accurate conclusion is to be arrived at, as an investigation is only as precise as the evidence on
which it is based. The promptness with which such evidence is gathered is always of utmost
importance because evidence, documentary evidence in particular, is remarkably fungible. A
PDIC investigation is conducted to "determine[e] whether the allegations in a complaint or
findings in a final report of examination may properly be the subject of an administrative,
criminal or civil action." In other words, an investigation is based on reports of examination and
an examination is conducted with prior Monetary Board approval. Therefore, it would be
unnecessary to secure a separate approval for the conduct of an investigation. Such would
merely prolong the process and provide unscrupulous individuals the opportunity to cover their
tracks.
 55 - Areno vs. Skycable
Formal Type of Hearing

Facts: Areno was employed as a cable technician by respondent Skycable PCC-Baguio. An

accounting clerk of Skycable, Hyacinth Soriano (Soriano), sent to the human resource manager
a letter-complaint against Areno alleging that on two separate occasions, the latter spread false
rumors about her. In 2002, she was again insulted by petitioner when the latter approached her
and said that she was seen going out with Aldrin Estrada, their field service supervisor, at
Central Park, Baguio City.

An administrative investigation was accordingly conducted in which, the investigating committee

found petitioner guilty for having violated the Company Code of Discipline. A suspension order
was then issued. Notwithstanding the suspension order, Areno still reported for work.
Subsequently he was terminated from service on the ground of insubordination or willful
disobedience in complying with the suspension order.

Areno filed a complaint before the Arbitration Branch of the NLRC against respondent assailing
the legality of his suspension and eventual dismissal. He claimed that his suspension and
dismissal were effected without any basis, and that he was denied his right to due process.

NLRC and CA ruled in favor of Skycable.

Areno contends that his suspension was without any basis since the testimony of Soriano is
hearsay and was not made under oath. Also, the minutes of the investigative
proceeding/hearing was not signed by the investigators. Petitioner likewise contends that he
was denied due process as he was not given the opportunity to contest the evidence against
him. He further insists that the suspension order is a scrap of paper as it was not signed and
issued by an official who is authorized to effectuate such order. And even assuming that the
suspension order is valid, no proof was ever presented to show that he was indeed served or
that he received a copy thereof. Therefore, he could not have violated any lawful order to justify
his dismissal.

ISSUE: W/N Areno was denied due process when a formal type of hearing was not made.

RULING: No. Areno was asked to explain and was informed of the complaint against him. A
committee was formed which conducted an investigation by exhaustively examining and
questioning both petitioner and his accuser, Soriano, separately. Petitioner actively participated
therein by answering the questions interposed by the panel members. The proceeding was
recorded, and the correctness of which was certified by respondent thru its Regional Manager,
Raul Bandonill. Undoubtedly, petitioner was given enough opportunity to be heard and defend
himself. It has already been held that the essence of due process is simply an opportunity to be
heard, a formal or trial-type hearing is not essential as the due process requirement is satisfied
where the parties are afforded fair and reasonable opportunity to explain their side.

The decision to suspend petitioner was rendered after investigation and a finding by respondent
that petitioner has indeed made malicious statements against a co-employee. The suspension
was imposed due to a repeated infraction within a deactivation period set by the company
relating to a previous similar offense committed. It is axiomatic that appropriate disciplinary
sanction is within the purview of management imposition. What should not be overlooked is the
prerogative of an employer company to prescribe reasonable rules and regulations necessary
for the proper conduct of its business and to provide certain disciplinary measures in order to
implement said rules to assure that the same would be complied with.