Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 199601, November 23, 2015

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (NOW BDO UNIBANK,

DECISION

BRION, J.:

We resolve the petition for review on certiorari under Rule 45 of the Rules of Court 1 filed by Philippine
Commercial International Bank (PCIB) assailing the May 23, 2011 decision 2 and the December 7,
2011 resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 68288. The CA affirmed the May 25,
1999 decision of the Regional Trial Court of Makati City, Branch 145 (RTC) in toto.

FACTUAL ANTECEDENTS

Josephine D. Gomez (Josephine) was a teller at the Domestic Airport Branch of the PCIB when a
certain Colin R. Harrington opened Savings Account No. 373-28010-6 with said branch in January
1985.

The following day, Harrington presented two (2) genuine bank drafts dated January 3, 1985, issued by
the Bank of New Zealand. The first draft was in the sum of US$724.57 payable to "C.R. Harrington,"
while the second draft was in the sum of US$2,004.76 payable to "Servants C/C.R. Harrington."

The PCIB, on the other hand, alleged that it was a certain Sophia La'O, as a representative of
Harrington, who presented the bank drafts for deposit.

Upon receipt of the bank drafts, Josephine asked her immediate supervisor, Eleanor Flores, whether
the drafts payable to "Servants C/C.R. Harrington" were acceptable for deposit to the savings account
of Harrington. When Flores answered in the affirmative, and after receiving from the bank's foreign
exchange supervision a Philippine Currency conversion of the amounts reflected in the drafts,
Josephine received the deposit slip. Thereafter, the deposits were duly entered in Harrington's
savings account.

On two (2) separate dates, a certain individual representing himself as Harrington withdrew the sums
of P45,000.00 and P5,600.00. Subsequently, the bank discovered that the person who made the
withdrawals was an impostor. Thus, the bank had to pay Harrington P50,600.00 representing the
amounts of the bank drafts in his name.

The PCIB issued a memorandum asking Josephine to explain why no disciplinary action should be
taken against her for having accepted the bank drafts for deposits. Josephine reasoned that being a
new teller she was not yet fully oriented with the various aspects of the job. She further alleged that
she had asked the approval of her immediate supervisor prior to receiving the deposits.

On November 14, 1985, the PCIB deducted the amount of P-423.38 from Josephine's salary.
Josephine wrote the PCIB to ask why the deduction was made.

After due investigation on the matter, the PCIB issued another memorandum finding Josephine
grossly negligent and liable for performing acts in violation of established operating procedures. The
memorandum required Josephine to pay the amount of P-50,600.00 through deductions in her salary,
allowance, bonuses, and profit sharing until the amount is fully paid.
Josephine wrote the PCIB to ask for the basis of its findings that she was grossly negligent and liable
to pay the amount of P50,600.00. During trial, the RTC found that the PCIB did not even respond to
this letter. PCIB, however, alleged that it had replied to Josephine's letter, and explained that she was
afforded due process and the deductions made prior to January 15, 1986, were merely a withholding
pending the investigation.

The PCIB also admitted that as early as January 15, 1986, it had started to deduct the amount of P
200.00 from Josephine's salary as well as 50% of her bonuses and profit sharing.

On February 10, 1986, Josephine filed a complaint for damages with prayer for preliminary injunction
before the RTC of Makati City. She claimed that the PCIB had abused its right by gradually deducting
from her salary the amount the bank had to pay Harrington.

The PCIB filed its answer with counterclaims and a separate complaint with the RTC of Makati City,
which was raffled to Branch 149.

In its May 25, 1999 decision, the RTC rendered judgment in favor of Josephine and ordered the PCIB
to pay her actual damages in the amount of P5,006.00 plus 12% interest from filing of the complaint;
moral damages in the amount of PI 50,000.00; and attorney's fees in the amount of P-50,000.00.

The RTC considered the PCIB's manner of deducting from the salary and allowance of Josephine as
having been rendered in bad faith and contrary to morals, good custom, and public policy. This was
borne out by the fact that the PCIB had already deducted from her salary before Josephine received
the memorandum finding her liable for the P50,600.00. In addition, while there were other individuals
involved in this incident, it appeared that it was only Josephine who was made solely responsible.

On appeal, the PCIB argued that the RTC had no jurisdiction over the case because it was a labor
dispute, which the labor tribunals are more competent to resolve. It also maintained that there was no
factual or legal basis for the RTC to make it liable for damages and to pay Josephine.

In its May 23, 2011 decision, the CA affirmed the May 25, 1999 RTC decision. It held that the PCIB
was estopped from questioning the jurisdiction of the RTC because it had filed an answer with
counterclaims and even initiated a separate case before a different branch of the RTC. It upheld the
RTC's findings and conclusion in awarding damages and attorney's fees to Josephine because there
was no reason to disturb them.

The CA, subsequently, denied the PCIB's motion for reconsideration on December 7, 2011; hence,
the PCIB filed the present petition.

First, the PCIB contends that the CA gravely erred in ruling that its actions were in total and wanton
disregard of Articles 19 and 21 of the Civil Code because the courts a quo summarily imputed bad
faith on how it had treated Josephine.

Second, the PCIB maintains that the CA gravely erred in awarding moral damages and attorney's
fees to Josephine absent any basis for it while averring that bad faith cannot be presumed and that
Josephine had failed to prove it with clear and convincing evidence.

OUR RULING

We DENY the present petition for lack of merit.

The civil courts have jurisdiction over a case when the cause of action does not have a
reasonable causal connection from the employer-employee relationship.

Although the PCIB opted not to raise the issue before this Court, we find it prudent and imperative to
justify why the RTC had jurisdiction to take cognizance of Josephine's complaint despite the fact that
her cause of action arose because her employer arbitrarily deducted from her salary - an act
expressly prohibited by our labor laws.4
Article 224 [217] of the Labor Code provides that the Labor Arbiters have original and exclusive
jurisdiction to hear and decide claims for actual, moral, exemplary, and other forms of damages
arising from employer-employee relations. The legislative intent appears clear to allow Labor Arbiters
to award to an employee not only the reliefs provided by our labor laws, but also moral and other
forms of damages governed by the Civil Code. Specifically, we have mentioned, in fact, that a
complaint for damages under Articles 19, 20, and 21 of the Civil Code would not suffice to keep the
case without the jurisdictional boundaries of our labor courts -especially when the claim for damages
is interwoven with a labor dispute.5

Nevertheless, when the cause of action has no reasonable connection with any of the claims provided
for in Article 224 of the Labor Code, jurisdiction over the action is with the regular courts. 6 Here, since
Josephine's cause of action is based on a quasi-delict or tort under Article 19 in relation to Article 21
of the Civil Code, the civil courts (not the labor tribunals) have jurisdiction over the subject matter of
this case.

To be sure, the case of Singapore Airlines Ltd. v. Ernani Cruz Paño is enlightening:

Upon the facts and issues involved, jurisdiction over the present controversy must be held to belong
to the civil courts. While seemingly petitioner's claim for damages arises from employer-employee
relations, and the latest amendment to Article 217 of the Labor Code under PD No. 1691 and BP Big.
130 provides that all other claims arising from employer-employee relationship are cognizable by
Labor Arbiters, in essence, petitioner's claim for damages is grounded on the "wanton failure and
refusal" without just cause of private respondent Cruz to report for duty despite repeated notices
served upon him of the disapproval of his application for leave of absence without pay. This, coupled
with the further averment that Cruz "maliciously and with bad faith" violated the terms and conditions
of the conversion training course agreement to the damage of petitioner removes the present
controversy from the coverage of the Labor Code and brings it within the purview of Civil Law.

Clearly, the complaint was anchored not on the abandonment per se by private respondent Cruz of
his job as the latter was not required in the Complaint to report back to work but
on the manner and consequent effects of such abandonment of work translated in terms of the
damages which petitioner had to suffer.7 [emphasis and underscoring supplied]

In the present case, Josephine filed a civil complaint for damages against the PCIB based on how her
employer quickly concluded that she was negligent and hence arbitrarily started to deduct from her
salary. Clearly, without having to dwell on the merits of the case, Josephine opted to invoke the
jurisdiction of our civil courts because her right to fair treatment was violated.

The discussion in Quisaba v. Sta. Ines-Melale Veneer & Plywood, Inc. is just as relevant as it is
illuminating on the present case, to wit:

Although the acts complained of seemingly appear to constitute "matters involving employee-
employer relations" as Quisaba's dismissal was the severance of a preexisting employee-employer
relation, his complaint is grounded not on his dismissal per se as in fact he does not ask for
reinstatement or backwages, but on the manner of his dismissal and the consequent effects of such
dismissal.

xxx

The "right" of the respondents to dismiss Quisaba should not be confused with the manner in which
the right was exercised and the effects flowing therefrom. If the dismissal was done anti-socially or
oppressively, as the complaint alleges, then the respondents violated article 1701 of the Civil Code
which prohibits acts of oppression by either capital or labor against the other, and article 21, which
makes a person liable for damages if he willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy, the sanction for which, by way of moral damages, is
provided in article 2219, no. 10. (Cf. Phil. Refining Co. v. Garcia, L-21962, Sept. 27, 1966, 18 SCRA
107).8cralawlawlibrary

From the foregoing, the case at bar is intrinsically concerned with a civil dispute because it has
something to do with Josephine's right under Article 19 of the Civil Code, and does not involve an
existing employer-employee relation within the meaning of Article 224 of the Labor Code. Josephine's
complaint was, therefore, properly filed with and exclusively cognizable by the RTC.

Questions on whether there was a preponderance of evidence to justify the award of damages
or whether there was a causal connection between the given set of facts and the damage
suffered by the private complainant are questions of fact.

The Court's jurisdiction under a Rule 45 review is limited to reviewing perceived errors of law, which
the lower courts may have committed. The resolution of factual issues is the function of the lower
courts whose findings, when aptly supported by evidence, bind this Court. This is especially true when
the CA affirms the RTC's findings. While this Court, under established exceptional circumstances, had
deviated from the above rule, we do not find this case to be under any of the exceptions.

Essentially, what the PCIB seeks is a relief from the Court on the issue of the propriety of the award of
damages. On this point alone, the petition must fail, as a Rule 45 petition bars us from the
consideration of factual issues, especially when both the RTC and the CA were consistent with their
rulings.

Nevertheless, we still affirm the assailed CA rulings even if we were to disregard these established
doctrinal rules.

Article 19 of the Civil Code provides that every person in the exercise of his rights and in the
performance of his duties must act with justice, give everyone his due, and observe honesty and good
faith. The principle embodied in this provision is more commonly known as the "abuse of right
principle." The legal sanctions for violations of this fundamental principle are found in Articles 20 9 and
2110 of the Civil Code. We explained how these two provisions correlate with each other in GF Equity,
Inc. v. Valenzona:

[Article 19], known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which must be observed not only in the exercise of one's rights but also in the
performance of one's duties. These standards are the following: to act with justice; to give everyone
his due; and to observe honesty and good faith. The law, therefore, recognizes a primordial limitation
on all rights; that in their exercise, the norms of human conduct set forth in Article 19 must be
observed. A right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. When a right is exercised in a manner
which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for the government of human' relations
and for the maintenance of social order, it does not provide a remedy for its violation. Generally, an
action for damages under either Article 20 or Article 21 would be proper. 11 [Emphasis supplied]

Both the RTC and the CA found the acts of the PCIB were in clear violation of Article 19 of the Civil
Code and held the PCIB liable for damages. While the PCIB has a right to penalize employees for
acts of negligence, the right must not be exercised unjustly and illegally. In the instant case, the PCIB
made deductions on Josephine's salary even if the investigation was still pending. Belatedly, the PCIB
issued a memorandum finding Josephine grossly negligent and requiring her to pay the amount which
the bank erroneously paid to Harrington's impostor. When Josephine asked for legal and factual basis
for the finding of negligence, the PCIB refused to give any. Moreover, the PCIB continued to make
deductions on Josephine's salary, allowances, and bonuses.

The trial court and the CA also noted that while Josephine was penalized, other employees of the
bank involved in the subject transactions were not. It was Josephine who was made solely
responsible for the loss without giving any basis therefor. It was emphasized that the subject deposit
could not have been received by the bank and entered in Harrington's savings account without the
participation of the other bank employees. The PCIB could have exercised prudence before taking
oppressive actions against Josephine.

All told, we find nothing in the record which would warrant the reversal of the position held by the RTC
and the CA. Based on the above discussion, we find the award of moral damages and attorney's fees
in Josephine's favor proper.

WHEREFORE, the petition for review on certiorari is DENIED and consequently, the May 23, 2011
decision and the December 7, 2011 resolution of the Court of Appeals in CA-G.R. CV No. 68288
are AFFIRMED in toto.

SO ORDERED.chanroblesvirtuallawlibrary

Velasco,*  Villarama, Jr.,** Mendoza, and Leonen, JJ., concur.

Endnotes:

*
 Designated as Acting Member in lieu of Associate Justice Antonio T. Carpio, per Special Order No.
2282 dated November 13, 2015.
**
 Designated as Acting Chairperson in lieu of Associate Justice Antonio T. Carpio, per Special Order
No. 2281 dated November 13, 2015.
**
 Designated as Additional Member per Raffle dated September 5, 2012.
1
Rollo, pp. 8-25.
2
 Id. at 27-38; penned by Associate Justice Danton Q. Bueser, and concurred in by Associate Justice
Hakim S. Abdulwahid and Associate Justice Ricardo R. Rosario.
3
 Id. at 40-41.
4
 See Article 113 of the Labor Code.
5
 San Miguel Corp. Employees Union-PTGWO v. Judge Bersamira, G.R. No. 87700, June 13, 1990,
264 Phil. 875, 884, to wit:
"The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil
Code would not suffice to keep the case within the jurisdictional boundaries of regular Courts. That
claim for damages is interwoven with a labor dispute existing between the parties and would have to
be ventilated before the administrative machinery established for the expeditious settlement of those
disputes. To allow the action filed below to prosper would bring about "split jurisdiction" which is
obnoxious to the orderly administration of justice (Philippine Communications, Electronics and
Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July 1968, 24 SCRA 321)."
6
Yusen Air and Sea Service Phils, v. Villamor, G.R, No. 154060, August 16, 2005, 504 Phil. 437, 446-
447, citing Ocheda v. Court of Appeals, G.R. No. 85517, October 16, 1992, 214 SCRA 629.
7
 G.R. No. L-47739, June 22, 1983,122 SCRA 671, 676.
8
 G.R. No. L-38088, August 30, 1974, 58 SCRA 771, 774.
9
 Article 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall
indemnify the latter for the same.
10
 Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs, or public policy shall compensate the latter for damages.
11
 G.R. No. 156841, June 30, 2005, 462 SCRA 466, 479-480, citing  Globe Mackay Cable and Radio
Corporation v. Court of Appeals, G.R. No. 81262, August 25, 1989, 176 SCRA 778, 783-784.