EN BANC

IN THE MATTER OF THE CHARGES A.M. No. 10-7-17-SC

OF PLAGIARISM, ETC., AGAINST
ASSOCIATE JUSTICE MARIANO C.
DEL CASTILLO.

PER CURIAM:

Petitioners Isabelita C. Vinuya, et al., all members of the Malaya Lolas Organization, seek
reconsideration of the decision of the Court dated October 12, 2010 that dismissed their charges of
plagiarism, twisting of cited materials, and gross neglect against Justice Mariano Del Castillo in
connection with the decision he wrote for the Court in G.R. No. 162230, entitled Vinuya v. Romulo.

Mainly, petitioners claim that the Court has by its decision legalized or approved of the
commission of plagiarism in the Philippines. This claim is absurd. The Court, like everyone else,
condemns plagiarism as the world in general understands and uses the term.

Plagiarism, a term not defined by statute, has a popular or common definition. To

plagiarize, says Webster, is to steal and pass off as ones own the ideas or words of another. Stealing
implies malicious taking. Blacks Law Dictionary, the worlds leading English law dictionary quoted
by the Court in its decision, defines plagiarism as the deliberate and knowing presentation of
another person's original ideas or creative expressions as ones own. The presentation of another
persons ideas as ones own must be deliberate or premeditateda taking with ill intent.

There is no commonly-used dictionary in the world that embraces in the meaning of

plagiarism errors in attribution by mere accident or in good faith.

Certain educational institutions of course assume different norms in its application. For
instance, the Loyola Schools Code of Academic Integrity ordains that plagiarism is identified not
through intent but through the act itself. The objective act of falsely attributing to ones self what is
not ones work, whether intentional or out of neglect, is sufficient to conclude that plagiarism has
occurred. Students who plead ignorance or appeal to lack of malice are not excused.[if !supportFootnotes]
[3][endif]

But the Courts decision in the present case does not set aside such norm. The decision
makes this clear, thus:

To paraphrase Bast and Samuels, while the academic

publishing model is based on the originality of the writers thesis, the
judicial system is based on the doctrine of stare decisis, which
encourages courts to cite historical legal data, precedents, and
related studies in their decisions. The judge is not expected to
produce original scholarship in every respect. The strength of a
decision lies in the soundness and general acceptance of the
 precedents and long held legal opinions it draws from.[if !supportFootnotes]
[4][endi

Original scholarship is highly valued in the academe and rightly so. A college thesis, for
instance, should contain dissertations embodying results of original research, substantiating a
specific view. This must be so since the writing is intended to earn for the student an academic
degree, honor, or distinction. He earns no credit nor deserves it who takes the research of others,
copies their dissertations, and proclaims these as his own. There should be no question that a cheat
deserves neither reward nor sympathy.

But the policy adopted by schools of disregarding the element of malicious intent found
in dictionaries is evidently more in the nature of establishing what evidence is sufficient to prove
the commission of such dishonest conduct than in rewriting the meaning of plagiarism. Since it
would be easy enough for a student to plead ignorance or lack of malice even as he has copied the
work of others, certain schools have adopted the policy of treating the mere presence of such copied
work in his paper sufficient objective evidence of plagiarism. Surely, however, if on its face the
students work shows as a whole that he has but committed an obvious mistake or a clerical error in
one of hundreds of citations in his thesis, the school will not be so unreasonable as to cancel his
diploma.

In contrast, decisions of courts are not written to earn merit, accolade, or prize as an
original piece of work or art. Deciding disputes is a service rendered by the government for the
public good. Judges issue decisions to resolve everyday conflicts involving people of flesh and
blood who ache for speedy justice or juridical beings which have rights and obligations in law that
need to be protected. The interest of society in written decisions is not that they are originally
crafted but that they are fair and correct in the context of the particular disputes involved. Justice,
not originality, form, and style, is the object of every decision of a court of law.

There is a basic reason for individual judges of whatever level of courts, including the
Supreme Court, not to use original or unique language when reinstating the laws involved in the
cases they decide. Their duty is to apply the laws as these are written. But laws include, under the
doctrine of stare decisis, judicial interpretations of such laws as are applied to specific situations.
Under this doctrine, Courts are to stand by precedent and not to disturb settled point. Once the
Court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that
principle, and apply it to all future cases, where facts are substantially the same; regardless of
whether the parties or property are the same.[if !supportFootnotes][6][endif]

And because judicial precedents are not always clearly delineated, they are quite often
entangled in apparent inconsistencies or even in contradictions, prompting experts in the law to
build up regarding such matters a large body of commentaries or annotations that, in themselves,
often become part of legal writings upon which lawyers and judges draw materials for their theories
or solutions in particular cases. And, because of the need to be precise and correct, judges and
practitioners alike, by practice and tradition, usually lift passages from such precedents and
writings, at times omitting, without malicious intent, attributions to the originators.
 Is this dishonest? No. Duncan Webb, writing for the International Bar Association puts it
succinctly. When practicing lawyers (which include judges) write about the law, they effectively
place their ideas, their language, and their work in the public domain, to be affirmed, adopted,
criticized, or rejected. Being in the public domain, other lawyers can thus freely use these without
fear of committing some wrong or incurring some liability. Thus:

The tendency to copy in law is readily explicable. In law

accuracy of words is everything. Legal disputes often centre round
the way in which obligations have been expressed in legal
documents and how the facts of the real world fit the meaning of the
words in which the obligation is contained. This, in conjunction with
the risk-aversion of lawyers means that refuge will often be sought
in articulations that have been tried and tested. In a sense therefore
the community of lawyers have together contributed to this body of
knowledge, language, and expression which is common property
and may be utilized, developed and bettered by anyone.[if !
supportFootnotes][7][endif]

The implicit right of judges to use legal materials regarded as belonging to the public
domain is not unique to the Philippines. As Joyce C. George, whom Justice Maria Lourdes Sereno
cites in her dissenting opinion, observed in her Judicial Opinion Writing Handbook:

A judge writing to resolve a dispute, whether trial or

appellate, is exempted from a charge of plagiarism even if ideas,
words or phrases from a law review article, novel thoughts
published in a legal periodical or language from a partys brief are
used without giving attribution. Thus judges are free to use
whatever sources they deem appropriate to resolve the matter
before them, without fear of reprisal. This exemption applies to
judicial writings intended to decide cases for two reasons: the judge
is not writing a literary work and, more importantly, the purpose of
the writing is to resolve a dispute. As a result, judges adjudicating
cases are not subject to a claim of legal plagiarism.[if !supportFootnotes][8]
[endif]

If the Court were to inquire into the issue of plagiarism respecting its past decisions from
the time of Chief Justice Cayetano S. Arellano to the present, it is likely to discover that it has not
on occasion acknowledged the originators of passages and views found in its decisions. These
omissions are true for many of the decisions that have been penned and are being penned daily by
magistrates from the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional
Trial Courts nationwide and with them, the municipal trial courts and other first level courts. Never
in the judiciarys more than 100 years of history has the lack of attribution been regarded and
demeaned as plagiarism.

This is not to say that the magistrates of our courts are mere copycats. They are not. Their
decisions analyze the often conflicting facts of each case and sort out the relevant from the
irrelevant. They identify and formulate the issue or issues that need to be resolved and evaluate each
of the laws, rulings, principles, or authorities that the parties to the case invoke. The decisions then
draw their apt conclusions regarding whether or not such laws, rulings, principles, or authorities
apply to the particular cases before the Court. These efforts, reduced in writing, are the product of
the judges creativity. It is hereactually the substance of their decisionsthat their genius, originality,
and honest labor can be found, of which they should be proud.

In Vinuya, Justice Del Castillo examined and summarized the facts as seen by the
opposing sides in a way that no one has ever done. He identified and formulated the core of the
issues that the parties raised. And when he had done this, he discussed the state of the law relevant
to their resolution. It was here that he drew materials from various sources, including the three
foreign authors cited in the charges against him. He compared the divergent views these present as
they developed in history. He then explained why the Court must reject some views in light of the
peculiar facts of the case and applied those that suit such facts. Finally, he drew from his
discussions of the facts and the law the right solution to the dispute in the case. On the whole, his
work was original. He had but done an honest work.

The Court will not, therefore, consistent with established practice in the Philippines and
elsewhere, dare permit the filing of actions to annul the decisions promulgated by its judges or
expose them to charges of plagiarism for honest work done.

This rule should apply to practicing lawyers as well. Counsels for the petitioners, like all lawyers
handling cases before courts and administrative tribunals, cannot object to this. Although as a rule
they receive compensation for every pleading or paper they file in court or for every opinion they
render to clients, lawyers also need to strive for technical accuracy in their writings. They should
not be exposed to charges of plagiarism in what they write so long as they do not depart, as officers
of the court, from the objective of assisting the Court in the administration of justice.

As Duncan Webb said:

In presenting legal argument most lawyers will have

recourse to either previous decisions of the courts, frequently lifting
whole sections of a judges words to lend weight to a particular point
either with or without attribution. The words of scholars are also
sometimes given weight, depending on reputation. Some
encyclopaedic works are given particular authority. In England this
place is given to Halsburys Laws of England which is widely
considered authoritative. A lawyer can do little better than to frame
an argument or claim to fit with the articulation of the law in
Halsburys. While in many cases the very purpose of the citation is to
claim the authority of the author, this is not always the case.
Frequently commentary or dicta of lesser standing will be adopted
by legal authors, largely without attribution.
 xxxx

The converse point is that originality in the law is viewed

with skepticism. It is only the arrogant fool or the truly gifted who
will depart entirely from the established template and reformulate
an existing idea in the belief that in doing so they will improve it.
While over time incremental changes occur, the wholesale
abandonment of established expression is generally considered
foolhardy.[if !supportFootnotes][9][endif]

The Court probably should not have entertained at all the charges of plagiarism against
Justice Del Castillo, coming from the losing party. But it is a case of first impression and
petitioners, joined by some faculty members of the University of the Philippines school of law, have
unfairly maligned him with the charges of plagiarism, twisting of cited materials, and gross neglect
for failing to attribute lifted passages from three foreign authors. These charges as already stated are
false, applying the meaning of plagiarism as the world in general knows it.

True, Justice Del Castillo failed to attribute to the foreign authors materials that he lifted
from their works and used in writing the decision for the Court in the Vinuya case. But, as the Court
said, the evidence as found by its Ethics Committee shows that the attribution to these authors
appeared in the beginning drafts of the decision. Unfortunately, as testified to by a highly qualified
and experienced court-employed researcher, she accidentally deleted the same at the time she was
cleaning up the final draft. The Court believed her since, among other reasons, she had no motive
for omitting the attribution. The foreign authors concerned, like the dozens of other sources she
cited in her research, had high reputations in international law.

Notably, those foreign authors expressly attributed the controversial passages found in
their works to earlier writings by others. The authors concerned were not themselves the originators.
As it happened, although the ponencia of Justice Del Castillo accidentally deleted the attribution to
them, there remained in the final draft of the decision attributions of the same passages to the earlier
writings from which those authors borrowed their ideas in the first place. In short, with the
remaining attributions after the erroneous clean-up, the passages as it finally appeared in the Vinuya
decision still showed on their face that the lifted ideas did not belong to Justice Del Castillo but to
others. He did not pass them off as his own.

With our ruling, the Court need not dwell long on petitioners allegations that Justice Del
Castillo had also committed plagiarism in writing for the Court his decision in another case, Ang
Ladlad v. Commission on Elections.[if !supportFootnotes][10][endif] Petitioners are nit-picking. Upon close
examination and as Justice Del Castillo amply demonstrated in his comment to the motion for
reconsideration, he in fact made attributions to passages in such decision that he borrowed from his
sources although they at times suffered in formatting lapses.

Considering its above ruling, the Court sees no point in further passing upon the motion
of the Integrated Bar of the Philippines for leave to file and admit motion for reconsideration-in-
intervention dated January 5, 2011 and Dr. Peter Payoyos claim of other instances of alleged
plagiarism in the Vinuya decision.

ACCORDINGLY, the Court DENIES petitioners motion for reconsideration for lack of merit.

SO ORDERED.
HEIRS OF ENRIQUE TAN, SR., G.R. No. 145568
namely, NORMA TAN,
JEANETTE TAN, Present:
JULIETA TAN, Davide, Jr., C.J.,
ROMMEL TAN, and Chairman,
ENRIQUE TAN, JR., Quisumbing,
All represented by Ynares-Santiago,
ROMMEL TAN, Carpio, and
Petitioners, Azcuna, JJ.

- versus -

Promulgated:
REYNALDA POLLESCAS,
Respondent. November 17, 2005

x-----------------------------------------------------------------------------------------x

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] of the Decision[2] of the Court of Appeals promulgated on
31 August 2000 in CA-G.R. SP No. 48823. The Court of Appeals affirmed the decision of the
Department of Agrarian Reform Adjudication Board ordering petitioners to respect respondents
possession and cultivation of the land.

The Antecedents

Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel[3] Tan and Enrique Tan, Jr. (Tan
Heirs) are co-owners of a coconut farmland (Land) located at Labo, Ozamis City with an area of
25,780 square meters.[4]

Esteban Pollescas (Esteban) was the original tenant of the Land. Upon Estebans death in
1991, his son Enrique Pollescas (Enrique) succeeded him and was appointed as tenant by the
landowner Enrique Tan (Tan).[5]

However, respondent Reynalda Pollescas (Reynalda), Estebans surviving second spouse,

demanded that Tan recognize her as Estebans successor. Tan did not accede. Thus, Reynalda filed
with the Department of Agrarian Reform Adjudication Board of Ozamis City (DARAB-Ozamis) a
complaint for Annulment of Compromise Agreement, Quieting of Tenancy Relationship and
damages.[6]

In its Decision dated 28 April 1993, the DARAB-Ozamis declared Reynalda as the lawful
tenant of the Land. The DARAB-Ozamis apportioned the harvests between the Tan Heirs and
Reynalda based on the customary sharing system which is 2/3 to the landowner and 1/3 to the
tenant.[7]

On the following harvest dates, 11 and 19 of June, 9 September, 6 and 13 of December

1993, Reynalda failed to deliver to the Tan Heirs 2/3 of the harvests amounting to P3,656.70. The
Tan Heirs demanded Reynalda to pay such amount.[8] However, Reynalda ignored the demand.

Consequently, the Tan Heirs filed a complaint for estafa against Reynalda with the
Municipal Trial Court in Cities, Ozamis City, Branch 2.[9] The trial court found Reynalda guilty of
estafa[10] and sentenced her to five months of arresto mayor maximum to two years of prision
correccional minimum and ordered her to pay the Tan Heirs P3,656.70, the amount which she
misappropriated.[11]

Subsequently, for Reynaldas continued failure to deliver their share, the Tan Heirs filed
with the DARAB, Misamis Occidental (DARAB-Misamis Occidental) an ejectment case.[12]

On 18 September 1996, the DARAB-Misamis Occidental[13] ruled in favor of the Tan

Heirs. The DARAB-Misamis Occidental disposed of the case in this wise:

WHEREFORE, premises considered, decision is hereby rendered terminating the tenancy

relationship of herein parties.

Consequently, respondent Reynalda Pollescas is ordered to vacate the subject landholding

and turn-over its possession and cultivation to the plaintiffs.

The MARO of Ozamis City is likewise ordered to investigate and verify in the subject
landholding if there are actual farmer-cultivators in the area who may qualify as lessees thereof,
who then should be placed under leasehold pursuant to the mandate of Section 12, R.A. 6657.

SO ORDERED.[14]

Aggrieved by the decision, Reynalda appealed to the DARAB, Diliman, Quezon City
(DARAB). The DARAB reversed the decision of the DARAB-Misamis Occidental, to wit:

WHEREFORE, premises considered, the appealed decision dated 18 September 1996 is

hereby REVERSED and SET ASIDE and a new one is rendered ordering the landowners to respect
the peaceful possession and cultivation of the subject landholding.

Respondent-Appellant is hereby ordered to pay her unpaid leasehold rentals.

 SO ORDERED.[15]

The Tan Heirs appealed the decision of the DARAB to the Court of Appeals. The Court of
Appeals affirmed the decision of the DARAB ordering the Tan Heirs to respect Reynaldas
possession and cultivation of the Land.

Hence, this petition.

The Ruling of the Court of Appeals

In affirming the decision of the DARAB, the Court of Appeals cited Roxas y Cia v. Cabatuando, et
al.[16] where this Court held that x x x mere failure of a tenant to pay the landholders share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on the
part of the tenant to pay x x x.

The Court of Appeals held that Reynaldas failure to deliver the full amount of the Tan Heirs share
could not be considered as a willful and deliberate intent to deprive the Tan Heirs of their share. The
Court of Appeals held that Reynalda honestly believed that she was entitled to a share of the
harvests in 1992-1993 while the case for Annulment of Compromise Agreement was pending before
the DARAB-Ozamis. Reynalda also believed that she could effect a set-off for her 1992-1993 share
from the 1994 share of the Tan Heirs.

The Court of Appeals further declared that the rental must be legal to consider non-payment of such
as a ground for ejectment. The appellate court stated that:

x x x for a tenants failure to pay rental to come within the intendment of the law as a ground for
ejectment, it is imperative that the rental must be legal. What the law contemplates is the deliberate
failure of the tenant to pay the legal rental, not the failure to pay an illegal rental. A stipulation in a
leasehold contract requiring a lessee to pay an amount in excess of the amount allowed by law is
considered contrary to law, morals or public policy. Such contract is null and void as to the excess.

It is noteworthy that Section 34 of RA 3844 provides that the consideration for the lease of riceland
and lands devoted to other crops shall not be more than the equivalent of twenty-five per centum of
the average normal harvest. The tenant is obliged to pay a maximum of 25% of the normal harvest
and not two thirds as in the case at bar. Thus, even admitting that a set-off was effected in favor of
respondent for her 1992-1993 share, yet enough is left to cover the 25% share of the petitioners for
the 1994 crop.[17]

Citing Section 8 of Republic Act No. 3844 (RA 3844), the Court of Appeals also held [t]here is
nothing in the law that makes failure to deliver share a ground for extinguishment of leasehold
agreement.[18] Reynaldas failure to deliver fully the share of the Tan Heirs is not sufficient to disturb
the agricultural leasehold relation.[19]
 The Issues

In their Memorandum, the Tan Heirs raise the following issues:

I
WHETHER THERE IS NO EXCEPTION TO THE GROUNDS FOR
EXTINGUISHMENT OF LEASEHOLD RELATION UNDER
SECTION 8 OF RA 3844.

II

WHETHER THE COURT OF APPEALS CORRECTLY RULED THAT

REYNALDA IS OBLIGED TO PAY ONLY 1/4 OR 25% OF THE
NORMAL HARVEST AND NOT 2/3 WHEN THE SUBJECT LAND
WAS NOT YET PLACED UNDER THE LEASEHOLD SYSTEM
PURSUANT TO SECTION 12 OF RA 6657.[20]

The Ruling of the Court

The petition lacks merit.

At the outset, the Court declares that RA 6657 is the governing statute in this case.

On 8 August 1963, RA 3844 or the Agricultural Land Reform Code[21] abolished and
outlawed share tenancy and put in its stead the agricultural leasehold system.[22] On 10 September
1971, Republic Act No. 6389 (RA 6389) amending RA 3844 (RA 3844 as amended) declared share
tenancy relationships as contrary to public policy.[23] RA 6389 did not entirely repeal Republic Act
No. 1199[24] and RA 3844 even if RA 6389 substantially modified them.[25] Subsequently, Republic
Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (RA 6657) took effect on 15
June 1988. RA 6657 only expressly repealed Section 35 of RA 3844 as amended.[26] Thus, RA 6657
is the prevailing law in this case. The harvests in dispute are for the years 1992-1993 or after the
effectivity of RA 6657.
No ground for dispossession of landholding

Section 7 of RA 3844 as amended provides that once there is a leasehold relationship, as

in the present case, the landowner cannot eject the agricultural tenant from the land unless
authorized by the court for causes provided by law.[27] RA 3844 as amended expressly recognizes
and protects an agricultural leasehold tenants right to security of tenure.[28]

Section 36 of RA 3844 as amended enumerates the grounds for dispossession of the

tenants landholding, to wit:

SEC. 36. Possession of Landholding;

Exceptions.Notwithstanding any agreement as to the period or future
surrender of the land, an agricultural lessee shall continue in the
enjoyment and possession of his landholding except when his
dispossession has been authorized by the Court in a judgment that is
final and executory if after due hearing it is shown that:

(1) The landholding is declared by the department head upon

recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes:
Provided, That the agricultural lessee shall be entitled to disturbance
compensation equivalent to five times the average of the gross harvests
on his landholding during the last five preceding calendar years;

(2) The agricultural lessee failed to substantially comply with

any of the terms and conditions of the contract or any of the provisions
of this Code unless his failure is caused by fortuitous event or force
majeure;

(3) The agricultural lessee planted crops or used the

landholding for a purpose other than what had been previously agreed
upon;

(4) The agricultural lessee failed to adopt proven farm

practices as determined under paragraph 3 of Section twenty-nine;
 (5) The land or other substantial permanent improvement
thereon is substantially damaged or destroyed or has unreasonably
deteriorated through the fault or negligence of the agricultural lessee;

(6) The agricultural lessee does not pay the lease rental when
it falls due: Provided, That if the non-payment of the rental shall be due
to crop failure to the extent of seventy-five per centum as a result of a
fortuitous event, the non-payment shall not be a ground for
dispossession, although the obligation to pay the rental due that
particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of
Section twenty-seven.

In the instant case, the Tan Heirs seek Reynaldas ejectment from the Land on the ground
of non-payment of lease rental.
The Court agrees with the Court of Appeals that for non-payment of the lease rental to be
a valid ground to dispossess the agricultural lessee of the landholding, the amount of the lease rental
must first of all be lawful. If the amount of lease rental claimed exceeds the limit allowed by law,
non-payment of lease rental cannot be a ground to dispossess the agricultural lessee of the
landholding.

Section 34 of RA 3844 as amended[29] mandates that not x x x more than 25% of the
average normal harvest shall constitute the just and fair rental for leasehold. In this case, the Tan
Heirs demanded Reynalda to deliver 2/3 of the harvest as lease rental, which clearly exceeded the
25% maximum amount prescribed by law. Therefore, the Tan Heirs cannot validly dispossess
Reynalda of the landholding for non-payment of rental precisely because the lease rental claimed by
the Tan Heirs is unlawful.

Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental, Reynalda is
not obliged to pay such lease rental for being unlawful. There is no legal basis to demand payment
of such unlawful lease rental. The courts will not enforce payment of a lease rental that violates the
law. There was no validly fixed lease rental demandable at the time of the harvests. Thus, Reynalda
was never in default.

Reynalda and the Tan Heirs failed to agree on a lawful lease rental. Accordingly, the DAR
must first fix the provisional lease rental payable by Reynalda to the Tan Heirs pursuant to the
second paragraph of Section 34 of RA 3844 as amended.[30] Until the DAR has fixed the provisional
lease rental, Reynalda cannot be in default in the payment of lease rental since such amount is not
yet determined. There can be no delay in the payment of an undetermined lease rental because it is
impossible to pay an undetermined amount. That Reynalda is not yet in default in the payment of
the lease rental is a basic reason why she cannot be lawfully ejected from the Land for non-payment
of rental.[31]
 No ground for extinguishment of leasehold relation

The Court also holds that there is no ground for the extinguishment of leasehold relation
in this case.

Only in the instances stated in Sections 8 and 28 of RA 3844 as amended can leasehold
relation be terminated. These provisions read:

SEC. 8. Extinguishment of Agricultural Leasehold Relation.The agricultural

leasehold relation established under this Code shall be extinguished by:

(1) Abandonment of the landholding without the knowledge of the agricultural lessor;

(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of
which shall be served three months in advance; or

(3) Absence of the persons under Section nine to succeed to the lessee, in the event of death
or permanent incapacity of the lessee.

SEC. 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year.The

agricultural lessee may terminate the leasehold during the agricultural year for any of the following
causes:

(1) Cruel, inhuman or offensive treatment of the agricultural lessee or any member of his
immediate farm household by the agricultural lessor or his representative with the knowledge and
consent of the lessor;

(2) Non-compliance on the part of the agricultural lessor with any of the obligations
imposed upon him by the provisions of this Code or by his contract with the agricultural lessee;

(3) Compulsion of the agricultural lessee or any member of his immediate farm household
by the agricultural lessor to do any work or render any service not in any way connected with farm
work or even without compulsion if no compensation is paid;

(4) Commission of a crime by the agricultural lessor or his representative against the
agricultural lessee or any member of his immediate farm household; or

(5) Voluntary surrender due to circumstances more advantageous to him and his family.

The case of Garchitorena v. Panganiban which the Tan Heirs invoked to justify the
extinguishment of leasehold relation does not appear on page 339 of Volume 8 of the Supreme
Court Reports Annotated. What is printed on such page is the case of Republic v. Perez with docket
number L-16112 and promulgated on 29 June 1963. For making a wrong citation, the Court
admonishes Atty. Jesus S. Anonat, counsel for the Tan Heirs, to be more careful when citing
jurisprudence. The Court reminds him of his duty not to knowingly misquote the text of a decision
or authority[32] lest he be guilty of misleading the Court.

WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed Decision dated 31
August 2000 of the Court of Appeals in CA-G.R. SP No. 48823. The Court REMANDS this case to
the Department of Agrarian Reform for the determination of the provisional lease rental. Costs
against petitioners.
ALLIED BANKING CORPORATION, petitioner, vs. COURT OF APPEALS and
POTENCIANO L. GALANIDA, respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review !supportFootnotes][1][endif] assailing the Decision[if !
[if
supportFootnotes][2][endif] of 27 April 2000 and the Resolution of 8 August 2000 of the Court of

Appeals in CA-G.R. SP No. 51451. The Court of Appeals upheld the Decision[if !
supportFootnotes][3][endif] of 18 September 1998 and the Resolution of 24 December 1998 of the

National Labor Relations Commission (NLRC) in NLRC Case No. V-000180-98. The
NLRC modified the Decision dated 23 December 1997 of Labor Arbiter Dominador A.
Almirante (Labor Arbiter) in NLRC Case No. RAB VII-05-0545-94 holding that Allied
Banking Corporation (Allied Bank) illegally dismissed Potenciano L. Galanida (Galanida).
The NLRC awarded Galanida separation pay, backwages, moral and exemplary damages,
and other amounts totaling P1,264,933.33.
Antecedent Facts
For a background of this case, we quote in part from the Decision of the Court of Appeals:
Private respondent Potenciano Galanida was hired by petitioner Allied Banking Corporation on 11
January 1978 and rose from accountant-book(k)eeper to assistant manager in 1991. His
appointment was covered by a Notice of Personnel Action which provides as one of the conditions
of employment the provision on petitioners right to transfer employees:
REGULAR APPOINTMENT: xxx It is understood that the bank reserves the right to transfer or
assign you to other departments or branches of the bank as the need arises and in the interest of
maintaining smooth and uninterrupted service to the public.
Private respondent was promoted several times and was transferred to several branches as follows:
a) January, 1978 to March, 1982
Tagbilaran City Branch

b) April, 1982 to May, 1984

Lapulapu City Branch

c) June, 1984

Mandaue City Branch

d) July, 1984 to April, 1986

Tagbilaran City Branch

e) May, 1986 to May, 1987

Dumaguete City Branch

f) June, 1987 to August, 1987

Carbon Branch, Cebu City

g) September, 1987 to Sept. 1989

Lapulapu City Branch, Cebu

h) October, 1989 to Sept. 1992

Carbon Branch, Cebu City

i) October 1992 to Sept. 1994

Jakosalem Regional Branch,

Cebu City (Rollo, p. 47)

Effecting a rotation/movement of officers assigned in the Cebu homebase, petitioner

listed respondent as second in the order of priority of assistant
managers to be assigned outside of Cebu City having been
stationed in Cebu for seven years already. Private respondent
manifested his refusal to be transferred to Bacolod City in a
letter dated 19 April 1994 citing as reason parental
obligations, expenses, and the anguish that would result if he
is away from his family. He then filed a complaint before the
Labor Arbiter for constructive dismissal.

Subsequently, petitioner bank informed private respondent (Rollo, p. 86) that he was
to report to the Tagbilaran City Branch effective 23 May 1994.
Private respondent refused. In a letter dated 13 June 1994,
petitioner warned and required of private respondent as
follows:

There is no discrimination in your transfer. In fact, among the officers mentioned, only
you have refused the new assignment citing difficulty of
working away from your family as if the other officers
concerned do not suffer the same predicament. To exempt you
from the officer transfer would result in favoritism in your
 favor and discrimination as against the other officers
concerned.

In furtherance of maintaining a smooth and uninterrupted service to the public, and in

accordance with the Banks order of priority of rotating its
accountants places of assignments, you are well aware that
Roberto Isla, AM/Accountant, assigned in Cebu for more than
ten (10) years, was, on February 14, 1994, reassigned to Iligan
City Branch and then to Cagayan de Oro City Branch on June
8, 1994. Hence, your objection on the ground of your length
of service is without merit.

xxx

As discussed, your refusal to follow instruction concerning your transfer and

reassignment to Bacolod City and to Tagbilaran City is
penalized under Article XII of the Banks Employee Discipline
Policy and Procedure [which] provides:

XII Transfer and Reassignment

Refusal to follow instruction concerning transfers and reassignments.

First and subsequent offenses

The penalty may range from suspension to dismissal as determined by management.

The employee shall be required to comply with the order of
transfer and reassignment, if the penalty is not termination of
employment.

In view of the foregoing, please explain in writing within three (3) days from receipt
hereof why no disciplinary action should be meted against you
for your having refused to follow instructions concerning the
foregoing transfer and reassignment. xxx[if !supportFootnotes][4]
[endif]

On 16 June 1994, Galanida replied that (w)hether the banks penalty for my refusal be
Suspension or Dismissal xxx it will all the more establish and fortify my complaint now
pending at NLRC, RAB 7.[if !supportFootnotes][5][endif] In the same letter, he charged Allied Bank
with discrimination and favoritism in ordering his transfer, thus:
xxx What I cannot decipher now under the headship of Mr. Olveda is managements discriminatory
act of transferring only the long staying accountants of Cebu in the guise of its exercise of
management prerogative when in truth and in fact, the ulterior motive is to accommodate some new
officers who happen to enjoy favorable connection with management. How can the bank ever
justify the transfer of Melinda T. Co, a new officer who had experienced being assigned outside of
Cebu for more than a year only to Tabunok Branch? If the purpose is for check and balance, is
management implying that Melinda Co can better carry out such function over Mr. Larry Sabelino,
who is a seasoned and experienced accountant or any of the Metro Cebu accountants for that
matter? Isnt this act of management an obvious display of favoritism? xxx[if !supportFootnotes][6][endif]
On 5 October 1994, Galanida received an inter-office communication[if !supportFootnotes][7][endif]
(Memo) dated 8 September 1994 from Allied Banks Vice-President for Personnel, Mr.
Leonso C. Pe. The Memo informed Galanida that Allied Bank had terminated his services
effective 1 September 1994. The reasons given for the dismissal were: (1) Galanidas
continued refusal to be transferred from the Jakosalem, Cebu City branch; and (2) his
refusal to report for work despite the denial of his application for additional vacation leave.
The salient portion of the Memo reads:
Therefore, your refusal to follow instruction concerning your transfer and reassignment to Bacolod
City and to Tagbilaran City is without any justifiable reason and constituted violations of Article XII
of the Banks EDPP xxx
In view of the foregoing, please be informed that the Bank has terminated your services
effective September 1, 1994 and considered whatever benefit, if any, that you are entitled as
forfeited in accordance with 04, V Administrative Penalties, page 6 of the Banks EDPP which
provides as follows:
04. Dismissal.
Dismissal is a permanent separation for cause xxx
Notice of termination shall be issued by the Investigation Committee subject to the confirmation of
the President or his authorized representative as officer/employee who is terminated for cause shall
not be eligible to receive any benefit arising from her/his employment with the Bank or to
termination pay.
It is understood that the termination of your service shall be without prejudice to whatever legal
remedies which the Bank may have already undertaken and/or will undertake against you.
Please be guided accordingly. (Emphasis supplied)[if !supportFootnotes][8][endif]
The Ruling of the Labor Arbiter
After several hearings, the Labor Arbiter held that Allied Bank had abused its management
prerogative in ordering the transfer of Galanida to its Bacolod and Tagbilaran branches. In
ruling that Galanidas refusal to transfer did not amount to insubordination, the Labor
Arbiter misquoted this Courts decision in Dosch v. NLRC,[if !supportFootnotes][9][endif] thus:
As a general rule, the right to transfer or reassign an employee is recognized as an employers
exclusive right and the prerogative of management (Abbott Laboratories vs. NLRC, 154 SCRA 713
[1987]).
The exercise of this right, is not however, absolute. It has certain limitations. Thus, in Helmut
Dosch vs. NLRC, et al. 123 SCRA 296 (1983), the Supreme Court, ruled:
While it may be true that the right to transfer or reassign an employee is an employers exclusive
right and the prerogative of management, such right is not absolute. The right of an employer to
freely select or discharge his employee is limited by the paramount police power xxx for the
relations between capital and labor are not merely contractual but impressed with public interest.
xxx And neither capital nor labor shall act oppressively against each other.
Refusal to obey a transfer order cannot be considered insubordination where employee cited reason
for said refusal, such (sic) as that of being away from the family.[if !supportFootnotes][10][endif]
(Underscoring supplied by the Labor Arbiter)
The Labor Arbiter reasoned that Galanidas transfer was inconvenient and prejudicial
because Galanida would have to incur additional expenses for board, lodging and travel.
On the other hand, the Labor Arbiter held that Allied Bank failed to show any business
urgency that would justify the transfer.
The Labor Arbiter also gave credence to Galanidas claim that Allied Bank gave Ms. Co
special treatment. The Labor Arbiter stated that Allied Bank deliberately left out Ms. Cos
name from the list of accountants transferred to Cebu as contained in Allied Banks letter
dated 13 June 1994. However, Mr. Regidor Olveda, Allied Banks Vice President for
Operations Accounting, testified that the bank transferred Ms. Co to the Tabunok, Cebu
branch within the first half of 1994.
Still, the Labor Arbiter declined to award Galanida back wages because he was not
entirely free from blame. Since another bank had already employed Galanida, the Labor
Arbiter granted Galanida separation pay in lieu of reinstatement. The dispositive portion of
the Labor Arbiters Decision of 23 December 1997 provides:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondent Allied
Banking Corporation to pay complainant the aggregate total amount of Three Hundred Twenty Four
Thousand Pesos (P324,000.00) representing the following awards:
a) Separation pay for P272,000.00;
b) Quarter bonus for 1994 P16,000.00;
c) 13th month pay for 1994 P16,000.00;
d) Refund of contribution to Provident Fund - P20,000.00.
SO ORDERED.[if !supportFootnotes][11][endif]

The Ruling of the NLRC

On appeal, the NLRC likewise ruled that Allied Bank terminated Galanida without just
cause. The NLRC agreed that the transfer order was unreasonable and unjustified,
considering the family considerations mentioned by Galanida. The NLRC characterized
the transfer as a demotion since the Bacolod and Tagbilaran branches were smaller than
the Jakosalem branch, a regional office, and because the bank wanted Galanida, an
assistant manager, to replace an assistant accountant in the Tagbilaran branch. The NLRC
found unlawful discrimination since Allied Bank did not transfer several junior accountants
in Cebu. The NLRC also held that Allied Bank gave Ms. Co special treatment by assigning
her to Cebu even though she had worked for the bank for less than two years.
The NLRC ruled that Galanidas termination was illegal for lack of due process. The NLRC
stated that Allied Bank did not conduct any hearing. The NLRC declared that Allied Bank
failed to send a termination notice, as required by law for a valid termination. The Memo
merely stated that Allied Bank would issue a notice of termination, but the bank did not
issue any notice.
The NLRC concluded that Allied Bank dismissed Galanida in bad faith, tantamount to an
unfair labor practice as the dismissal undermined Galanidas right to security of tenure and
equal protection of the laws. On these grounds, the NLRC promulgated its Decision of 18
September 1998, the relevant portion of which states:
In this particular case, We view as impractical, unrealistic and no longer advantageous to both
parties to order reinstatement of the complainant. xxx For lack of sufficient basis, We deny the
claim for 1994 quarter bonus. Likewise, no attorneys fees is awarded as counsels for complainant-
appellee are from the City Prosecutors Office of Cebu.
WHEREFORE, premises considered, the decision of the Labor Arbiter dated December 23, 1997 is
hereby MODIFIED by increasing the award of separation pay and granting in addition thereto
backwages, moral and exemplary damages. The respondent-appellant, ALLIED BANKING
CORPORATION, is thus ordered to pay to herein complainant-appellee, POTENCIANO L.
GALANIDA, the following amounts:
a) P336,000.00, representing separation pay
b) P833,600.00, representing backwages
c) P 5,333.23 representing proportional 1994 13th month pay
d) P 20,000.00 representing refund of Provident Fund Contribution
e) P 50,000.00 representing moral damages
f) P 20,000.00 representing exemplary damages
===========
P1,264,933.33 TOTAL AWARD

All other claims are dismissed for lack of basis. The other respondents are dropped for
lack of sufficient basis that they acted in excess of their corporate
powers.

SO ORDERED.[if !supportFootnotes][12][endif]

Allied Bank filed a motion for reconsideration which the NLRC denied in its Resolution of
24 December 1998.[if !supportFootnotes][13][endif]
Dissatisfied, Allied Bank filed a petition for review questioning the Decision and Resolution
of the NLRC before the Court of Appeals.
The Ruling of the Court of Appeals
Citing Dosch v. NLRC, [if !supportFootnotes][14][endif] the Court of Appeals held that Galanidas
refusal to comply with the transfer orders did not warrant his dismissal. The appellate court
ruled that the transfer from a regional office to the smaller Bacolod or Tagbilaran branches
was effectively a demotion. The appellate court agreed that Allied Bank did not afford
Galanida procedural due process because there was no hearing and no notice of
termination. The Memo merely stated that the bank would issue a notice of termination but
there was no such notice.
The Court of Appeals affirmed the ruling of the NLRC in its Decision of 27 April 2000, thus:
WHEREFORE, for lack of merit, the petition is DISMISSED and the assailed Decision of public
respondent NLRC is AFFIRMED.
SO ORDERED. [if !supportFootnotes][15][endif]

Allied Bank filed a motion for reconsideration which the appellate court denied in its
Resolution of 8 August 2000.[if !supportFootnotes][16][endif]
On 26 April 2001, Allied Bank appealed the appellate courts decision and resolution to the
Supreme Court. Allied Bank prayed that the Supreme Court: (1) issue a temporary
restraining order or writ of preliminary injunction ex parte to restrain the implementation or
execution of the questioned Decision and Resolution; (2) declare Galanidas termination as
valid and legal; (3) set aside the Court of Appeals Decision and Resolution; (4) make
permanent the restraining order or preliminary injunction; (5) order Galanida to pay the
costs; and (6) order other equitable reliefs.
The Issues
Allied Bank raises the following issues:
1. WHETHER UNDER THE FACTS PRESENTED THERE IS LEGAL BASIS IN
PETITIONERS EXERCISE OF ITS MANAGEMENT PREROGATIVE.
2. WHETHER PRIVATE RESPONDENTS VIOLATIONS OF COMPANY RULES
CONSTITUTE A GROUND TO WARRANT THE PENALTY OF DISMISSAL.
3. WHETHER UNDER THE FACTS PRESENTED, THERE IS LEGAL BASIS TO HOLD
THAT ALLIED BANK AFFORDED PRIVATE RESPONDENT THE REQUIRED DUE
PROCESS.
4. WHETHER UNDER THE FACTS, THERE IS LEGAL BASIS TO HOLD THAT PRIVATE
RESPONDENT CANNOT RECOVER ANY MONETARY AWARD.[if !supportFootnotes][17][endif]
In sum, Allied Bank argues that the transfer of Galanida was a valid exercise of its
management prerogative. Allied Bank contends that Galanidas continued refusal to obey
the transfer orders constituted willful disobedience or insubordination, which is a just cause
for termination under the Labor Code.
On the other hand, Galanida defended his right to refuse the transfer order. The
memorandum for Galanida filed with this Court, prepared by Atty. Loreto M. Durano, again
misquoted the Courts ruling in Dosch v. NLRC, thus:
xxx His [Galanidas] refusal to transfer falls well within the ruling of the Supreme Court in Helmut
Dosch vs. NLRC, et. al., 123 SCRA 296 (1983) quoted as follows:
xxx
Refusal to obey a transfer order cannot be considered insubordination where employee cited reason
for said refusal, such as that of being away from the family.[if !supportFootnotes][18][endif]
The Ruling of the Court
The petition is partly meritorious.
Preliminary Matter: Misquoting Decisions of the Supreme Court
The memorandum prepared by Atty. Durano and, worse, the assailed Decision of the
Labor Arbiter, both misquoted the Supreme Courts ruling in Dosch v. NLRC. The Court
held in Dosch:
We cannot agree to Northwests submission that petitioner was guilty of disobedience and
insubordination which respondent Commission sustained. The only piece of evidence on which
Northwest bases the charge of contumacious refusal is petitioners letter dated August 28, 1975 to
R.C. Jenkins wherein petitioner acknowledged receipt of the formers memorandum dated August
18, 1975, appreciated his promotion to Director of International Sales but at the same time regretted
that at this time for personal reasons and reasons of my family, I am unable to accept the transfer
from the Philippines and thereafter expressed his preference to remain in his position, saying: I
would, therefore, prefer to remain in my position of Manager-Philippines until such time that my
services in that capacity are no longer required by Northwest Airlines. From this evidence, We
cannot discern even the slightest hint of defiance, much less imply insubordination on the part of
petitioner.[if !supportFootnotes][19][endif]
The phrase [r]efusal to obey a transfer order cannot be considered insubordination where
employee cited reason for said refusal, such as that of being away from the family does
not appear anywhere in the Dosch decision. Galanidas counsel lifted the erroneous
phrase from one of the italicized lines in the syllabus of Dosch found in the Supreme
Court Reports Annotated (SCRA).
The syllabus of cases in official or unofficial reports of Supreme Court decisions or
resolutions is not the work of the Court, nor does it state this Courts decision. The syllabus
is simply the work of the reporter who gives his understanding of the decision. The reporter
writes the syllabus for the convenience of lawyers in reading the reports. A syllabus is not
a part of the courts decision.[if !supportFootnotes][20][endif] A counsel should not cite a syllabus in
place of the carefully considered text in the decision of the Court.
In the present case, Labor Arbiter Almirante and Atty. Durano began by quoting from
Dosch, but substituted a portion of the decision with a headnote from the SCRA syllabus,
which they even underscored. In short, they deliberately made the quote from the SCRA
syllabus appear as the words of the Supreme Court. We admonish them for what is at the
least patent carelessness, if not an outright attempt to mislead the parties and the courts
taking cognizance of this case. Rule 10.02, Canon 10 of the Code of Professional
Responsibility mandates that a lawyer shall not knowingly misquote or misrepresent the
text of a decision or authority. It is the duty of all officers of the court to cite the rulings and
decisions of the Supreme Court accurately.[if !supportFootnotes][21][endif]
Whether Galanida was dismissed for just cause
We accord great weight and even finality to the factual findings of the Court of Appeals,
particularly when they affirm the findings of the NLRC or the lower courts. However, there
are recognized exceptions to this rule. These exceptions are: (1) when the findings are
grounded on speculation, surmise and conjecture; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion in
the appreciation of facts; (4) when the factual findings of the trial and appellate courts are
conflicting; (5) when the Court of Appeals, in making its findings, has gone beyond the
issues of the case and such findings are contrary to the admissions of both appellant and
appellee; (6) when the judgment of the appellate court is premised on a misapprehension
of facts or when it has failed to consider certain relevant facts which, if properly
considered, will justify a different conclusion; (7) when the findings of fact are conclusions
without citation of specific evidence on which they are based; and (8) when the findings of
fact of the Court of Appeals are premised on the absence of evidence but are contradicted
by the evidence on record.[if !supportFootnotes][22][endif] After a scrutiny of the records, we find that
some of these exceptions obtain in the present case.
The rule is that the transfer of an employee ordinarily lies within the ambit of the employers
prerogatives.[if !supportFootnotes][23][endif] The employer exercises the prerogative to transfer an
employee for valid reasons and according to the requirement of its business, provided the
transfer does not result in demotion in rank or diminution of the employees salary, benefits
and other privileges.[if !supportFootnotes][24][endif] In illegal dismissal cases, the employer has the
burden of showing that the transfer is not unnecessary, inconvenient and prejudicial to the
displaced employee.[if !supportFootnotes][25][endif]
The constant transfer of bank officers and personnel with accounting responsibilities from
one branch to another is a standard practice of Allied Bank, which has more than a
hundred branches throughout the country.[if !supportFootnotes][26][endif] Allied Bank does this
primarily for internal control. It also enables bank employees to gain the necessary
experience for eventual promotion. The Bangko Sentral ng Pilipinas, in its Manual of
Regulations for Banks and Other Financial Intermediaries,[if !supportFootnotes][27][endif] requires
the rotation of these personnel. The Manual directs that the duties of personnel handling
cash, securities and bookkeeping records should be rotated and that such rotation should
be irregular, unannounced and long enough to permit disclosure of any irregularities or
manipulations.[if !supportFootnotes][28][endif]
Galanida was well aware of Allied Banks policy of periodically transferring personnel
to different branches. As the Court of Appeals found, assignment to the different branches
of Allied Bank was a condition of Galanidas employment. Galanida consented to this
condition when he signed the Notice of Personnel Action.[if !supportFootnotes][29][endif]
The evidence on record contradicts the charge that Allied Bank discriminated against
Galanida and was in bad faith when it ordered his transfer. Allied Banks letter of 13 June
1994[if !supportFootnotes][30][endif] showed that at least 14 accounting officers and personnel from
various branches, including Galanida, were transferred to other branches. Allied Bank did
not single out Galanida. The same letter explained that Galanida was second in line for
assignment outside Cebu because he had been in Cebu for seven years already. The
person first in line, Assistant Manager Roberto Isla, who had been in Cebu for more than
ten years, had already transferred to a branch in Cagayan de Oro City. We note that none
of the other transferees joined Galanida in his complaint or corroborated his allegations of
widespread discrimination and favoritism.
As regards Ms. Co, Galanidas letter of 16 June 1994 itself showed that her
assignment to Cebu was not in any way related to Galanidas transfer. Ms. Co was
supposed to replace a certain Larry Sabelino in the Tabunok branch. The employer has the
prerogative, based on its assessment of the employees qualifications and competence, to
rotate them in the various areas of its business operations to ascertain where they will
function with maximum benefit to the company.[if !supportFootnotes][31][endif]
Neither was Galanidas transfer in the nature of a demotion. Galanida did not present
evidence showing that the transfer would diminish his salary, benefits or other privileges.
Instead, Allied Banks letter of 13 June 1994 assured Galanida that he would not suffer any
reduction in rank or grade, and that the transfer would involve the same rank, duties and
obligations. Mr. Olveda explained this further in the affidavit he submitted to the Labor
Arbiter, thus:
19. There is no demotion in position/rank or diminution of complainants salary, benefits and other
privileges as the transfer/assignment of branch officers is premised on the role/functions that they
will assume in the management and operations of the branch, as shown below:
(a) The Branch Accountant, as controller of the branch is responsible for the proper discharge of the
functions of the accounting section of the branch, review of documentation/proper accounting and
control of transaction. As such, the accounting functions in the branch can be assumed by any of the
following officers with the rank of: Senior Manager/Acctg.; Manager/ Acctg.; Senior Asst.
Manager/Acctg.; Asst. Manager/Acctg.; Accountant or Asst. Accountant.
xxx
20. The transfer/assignment of branch officer from one branch, to another branch/office is lateral in
nature and carries with it the same position/rank, salary, benefits and other privileges. The
assignment/transfer is for the officer to assume the functions relative to his job and NOT the
position/rank of the officer to be replaced.
There is also no basis for the finding that Allied Bank was guilty of unfair labor practice in
dismissing Galanida. Unfair labor practices relate only to violations of the constitutional
right of workers and employees to self-organization[if !supportFootnotes][32][endif] and are limited to
the acts enumerated in Article 248 of the Labor Code, none of which applies to the present
case. There is no evidence that Galanida took part in forming a union, or even that a union
existed in Allied Bank.
This leaves the issue of whether Galanida could validly refuse the transfer orders on the
ground of parental obligations, additional expenses, and the anguish he would suffer if
assigned away from his family.
The Court has ruled on this issue before. In the case of Homeowners Savings and Loan
Association, Inc. v. NLRC,[if !supportFootnotes][33][endif] we held:
The acceptability of the proposition that transfer made by an employer for an illicit or underhanded
purpose i.e., to defeat an employees right to self-organization, to rid himself of an undesirable
worker, or to penalize an employee for union activities cannot be upheld is self-evident and cannot
be gainsaid. The difficulty lies in the situation where no such illicit, improper or underhanded
purpose can be ascribed to the employer, the objection to the transfer being grounded solely upon
the personal inconvenience or hardship that will be caused to the employee by reason of the
transfer. What then?
This was the very same situation we faced in Phil. Telegraph and Telephone Corp. v. Laplana. In
that case, the employee, Alicia Laplana, was a cashier at the Baguio City Branch of PT&T who was
directed to transfer to the companys branch office at Laoag City. In refusing the transfer, the
employee averred that she had established Baguio City as her permanent residence and that such
transfer will involve additional expenses on her part, plus the fact that an assignment to a far place
will be a big sacrifice for her as she will be kept away from her family which might adversely affect
her efficiency. In ruling for the employer, the Court upheld the transfer from one city to another
within the country as valid as long as there is no bad faith on the part of the employer. We held then:
Certainly the Court cannot accept the proposition that when an employee opposes his employers
decision to transfer him to another work place, there being no bad faith or underhanded motives on
the part of either party, it is the employees wishes that should be made to prevail.
Galanida, through counsel, invokes the Courts ruling in Dosch v. NLRC.[if !
supportFootnotes][34][endif] Dosch, however, is not applicable to the present case. Helmut Dosch

refused a transfer consequential to a promotion. We upheld the refusal because no law

compels an employee to accept a promotion, and because the position Dosch was
supposed to be promoted to did not even exist at that time.[if !supportFootnotes][35][endif] This left
as the only basis for the charge of insubordination a letter from Dosch in which the Court
found not even the slightest hint of defiance, much less xxx insubordination.[if !supportFootnotes]
[36][endif]
 Moreover, the transfer of an employee to an overseas post, as in the Dosch case,
cannot be likened to a transfer from one city to another within the country,[if !supportFootnotes][37]
[endif] which is the situation in the present case. The distance from Cebu City to Bacolod

City or from Cebu City to Tagbilaran City does not exceed the distance from Baguio City to
Laoag City or from Baguio City to Manila, which the Court considered a reasonable
distance in PT&T v. Laplana.[if !supportFootnotes][38][endif]
The refusal to obey a valid transfer order constitutes willful disobedience of a lawful
order of an employer.[if !supportFootnotes][39][endif] Employees may object to, negotiate and seek
redress against employers for rules or orders that they regard as unjust or illegal.
However, until and unless these rules or orders are declared illegal or improper by
competent authority, the employees ignore or disobey them at their peril.[if !supportFootnotes][40]
[endif] For Galanidas continued refusal to obey Allied Banks transfer orders, we hold that the

bank dismissed Galanida for just cause in accordance with Article 282 (a) of the Labor
Code.[if !supportFootnotes][41][endif] Galanida is thus not entitled to reinstatement or to separation
pay.
Whether Galanidas dismissal violated the
requirement of notice and hearing
To be effective, a dismissal must comply with Section 2 (d), Rule 1, Book VI of the
Omnibus Rules Implementing the Labor Code (Omnibus Rules), which provides:
For termination of employment based on just causes as defined in Article 282 of the Labor Code:
(i) A written notice served on the employee specifying the ground or grounds of
termination, and giving said employee reasonable opportunity within which to explain his
side.
(ii) A hearing or conference during which the employee concerned, with the assistance of
counsel if he so desires is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.
The first written notice was embodied in Allied Banks letter of 13 June 1994. The first
notice required Galanida to explain why no disciplinary action should be taken against him
for his refusal to comply with the transfer orders.
On the requirement of a hearing, this Court has held that the essence of due process is
simply an opportunity to be heard.[if !supportFootnotes][42][endif] An actual hearing is not necessary.
The exchange of several letters, in which Galanidas wife, a lawyer with the City
Prosecutors Office, assisted him, gave Galanida an opportunity to respond to the charges
against him.
The remaining issue is whether the Memo dated 8 September 1994 sent to Galanida
constitutes the written notice of termination required by the Omnibus Rules. In finding that
it did not, the Court of Appeals and the NLRC cited Allied Banks rule on dismissals, quoted
in the Memo, that, Notice of termination shall be issued by the Investigation Committee
subject to the confirmation of the President or his authorized representative.[if !supportFootnotes]
[43][endif] The appellate court and NLRC held that Allied Bank did not send any notice of

termination to Galanida. The Memo, with the heading Transfer and Reassignment, was not
the termination notice required by law.
We do not agree.
Even a cursory reading of the Memo will show that it unequivocally informed Galanida of
Allied Banks decision to dismiss him. The statement, please be informed that the Bank
has terminated your services effective September 1, 1994 and considered whatever
benefit, if any, that you are entitled [to] as forfeited xxx[if !supportFootnotes][44][endif] is plainly
worded and needs no interpretation. The Memo also discussed the findings of the
Investigation Committee that served as grounds for Galanidas dismissal. The Memo
referred to Galanidas open defiance and refusal to transfer first to the Bacolod City branch
and then to the Tagbilaran City branch. The Memo also mentioned his continued refusal to
report for work despite the denial of his application for additional vacation leave.[if !
supportFootnotes][45][endif] The Memo also refuted Galanidas charges of discrimination and

demotion, and concluded that he had violated Article XII of the banks Employee Discipline
Policy and Procedure.
The Memo, although captioned Transfer and Reassignment, did not preclude it from being
a notice of termination. The Court has held that the nature of an instrument is
characterized not by the title given to it but by its body and contents.[if !supportFootnotes][46][endif]
Moreover, it appears that Galanida himself regarded the Memo as a notice of termination.
We quote from the Memorandum for Private Respondent-Appellee, as follows:
The proceedings may be capsulized as follows:
1. On March 13, 1994[if !supportFootnotes][47][endif] Private Respondent-Appellee filed before the Region
VII Arbitration Branch a Complaint for Constructive Dismissal. A copy of the Complaint is attached
to the Petition as Annex H;
xxx
5. On September 8, 1994, Petitioner-Appellant issued him a Letter of Termination. A copy of
said letter is attached to the Petition as Annex N;
6. Private Respondent-Appellee filed an Amended/ Supplemental Complaint wherein he alleged
illegal dismissal. A copy of the Amended/Supplemental Complaint is attached to the Petition as
Annex O; xxx [if !supportFootnotes][48][endif] (Emphasis supplied)
The Memorandum for Private Respondent-Appellee refers to the Memo as a Letter of
Termination. Further, Galanida amended his complaint for constructive dismissal[if !
supportFootnotes][49][endif] to one for illegal dismissal[if !supportFootnotes][50][endif] after he received the

Memo. Clearly, Galanida had understood the Memo to mean that Allied Bank had
terminated his services.
The Memo complied with Allied Banks internal rules which required the banks President or
his authorized representative to confirm the notice of termination. The banks Vice-
President for Personnel, as the head of the department that handles the movement of
personnel within Allied Bank, can certainly represent the bank president in cases involving
the dismissal of employees.
Nevertheless, we agree that the Memo suffered from certain errors. Although the Memo
stated that Allied Bank terminated Galanidas services as of 1 September 1994, the Memo
bore the date 8 September 1994. More importantly, Galanida only received a copy of the
Memo on 5 October 1994, or more than a month after the supposed date of his dismissal.
To be effective, a written notice of termination must be served on the employee.[if !
supportFootnotes][51][endif] Allied Bank could not terminate Galanida on 1 September 1994

because he had not received as of that date the notice of Allied Banks decision to dismiss
him. Galanidas dismissal could only take effect on 5 October 1994, upon his receipt of the
Memo. For this reason, Galanida is entitled to backwages for the period from 1 September
1994 to 4 October 1994.
Under the circumstances, we also find an award of P10,000 in nominal damages proper.
Courts award nominal damages to recognize or vindicate the right of a person that another
has violated.[if !supportFootnotes][52][endif] The law entitles Galanida to receive timely notice of
Allied Banks decision to dismiss him. Allied Bank should have exercised more care in
issuing the notice of termination.
WHEREFORE, the Decision of 27 April 2000 of the Court of Appeals in CA-G.R. SP
No. 51451 upholding the Decision of 18 September 1998 of the NLRC in NLRC Case No.
V-000180-98 is AFFIRMED, with the following MODIFICATIONS:
1) The awards of separation pay, moral damages and exemplary damages are
hereby deleted for lack of basis;
 2) Reducing the award of backwages to cover only the period from 1 September
1994 to 4 October 1994; and
3) Awarding nominal damages to private respondent for P10,000.
This case is REMANDED to the Labor Arbiter for the computation, within thirty (30)
days from receipt of this Decision, of the backwages, inclusive of allowances and other
benefits, due to Potenciano L. Galanida for the time his dismissal was ineffectual from 1
September 1994 until 4 October 1994.
Labor Arbiter Dominador A. Almirante and Atty. Loreto M. Durano are ADMONISHED
to be more careful in citing the decisions of the Supreme Court in the future.
SO ORDERED.