of tbe Jlbilippines

Ql:ourt
;!fmanila
SECOND DIVISION
XAVIER C. RAMOS,
Petitioner,
- versus -
BPI FAMILY SAVINGS BANK
INC. and/or ALFONSO L.
SALCEDO, JR.,
Respondents.
G.R. No. 203186
Present:
CARPIO, J., Chairperson,
BRION,
DEL CASTILLO,
PEREZ, and
PERLAS-BERNABE, JJ.
Promulgated:
DEC D 4 2013

RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari
1
are the Decision
2
dated November 12, 2010 and Resolution
3
dated August 6, 2012 of the
Court of Appeals (CA) in CA-G.R. SP No. 104161 which modified the
Decision
4
dated March 31, 2008 and Resolution
5
dated May 30, 2008 of the
National Labor Relations Commission (NLRC) in NLRC NCR 00-09-
07510-06 finding petitioner Xavier C. Ramos (Ramos) concurrently
negligent with respondent BPI Family Savings Bank, Inc. (BPI Family) and
thus ordering the equitable reduction of his retirement benefits from
P546,000.00 to P200,000.00.
Rollo, pp. 13-50.
2
Id. at 52-65. Penned by Associate Justice Stephen C. Cruz, with Associate Justices Isaias P. Dicdican
and Michael P. Elbinias, concurring.
4
Id. at 67-69.
Id. at 119-135. Penned by Presiding Commissioner Raul T. Aquino, with Commissioners Victoriano R.
Calaycay and Angelita A. Gacutan, concurring.
Id. at 64.
Resolution 2 G.R. No. 203186
The Facts

Ramos was employed by BPI Family in 1995 and eventually became
its Vice-President for Dealer Network Marketing/Auto Loans Division,
6
the
duties and responsibilities of which were to: (a) receive applications for auto
loans from auto dealers and salesmen;
7
(b) analyze market demands
8
and
formulate marketing strategies; and (c) enhance dealer and manufacturer
relations.
9


During his tenure, a client named Trezita
10
B. Acosta (Acosta) entered
into and obtained several auto and real estate loans from BPI Family which
were duly approved and promptly paid.
11
On December 15, 2004, Acosta
purportedly secured another auto loan from BPI Family in the amount of
P3,097,392.00 for the purchase of a Toyota Prado vehicle (subject loan)
which had remained unpaid. As it turned out, Acosta did not authorize nor
personally apply for the subject loan, rendering the transaction fraudulent.
12


After investigation, BPI Family discovered that: (a) a person
misrepresented herself as Acosta and succeeded in obtaining the delivery of
a Toyota Prado from the Toyota-Pasong Tamo Branch, pursuant to the
Purchase Order (PO) and Authority to Deliver (ATD) issued by Ramos; (b)
Ramos released these documents without the prior approval of BPI Familys
credit committee; and (c) Ramos was grossly remiss in his duties since his
subordinates did not follow the banks safety protocols, particularly those
regarding the establishment of the loan applicants identity, and that the
promissory note was not even signed by the applicant in the presence of any
of the marketing officers.
13


As a consequence, BPI Family lost P2,294,080.00, which amount was
divided between Ramos and his three (3) other subordinates, with Ramos
shouldering the proportionate amount of P546,000.00.
14
The foregoing
amount was subsequently deducted from Ramoss benefits which accrued
upon his retirement on May 1, 2006.
15
In relation thereto, he executed a
Release, Waiver and Quitclaim
16
dated June 21, 2006, agreeing to release the
bank from any claim or liability with respect to, inter alia, his separation pay
or retirement benefits.
17



6
Id, at 53.
7
Id. at 31.
8
Id.
9
Id. at 17.
10
Terezita in some parts of the records.
11
Rollo, p. 54.
12
Id.
13
Id. at 55.
14
Id. at 121-123.
15
Id. at 56.
16
Id. at 101.
17
Id. at 56.
Resolution 3 G.R. No. 203186
Claiming that the deductions made by BPI Family were illegal,
Ramos filed a complaint for underpayment of retirement benefits and non-
payment of overtime and holiday pay and premium pay against BPI Family
and/or its President at that time, Alfonso L. Salcedo, Jr., before the Regional
Arbitration Branch of the NLRC,
18
docketed as NLRC NCR 00-09-07510-
06.

The LA Ruling

In a Decision
19
dated June 27, 2007, the Labor Arbiter (LA) dismissed
Ramoss complaint, ruling that the deduction made on his retirement
benefits was legal and even reasonable
20
since Ramos was negligent in
running his department. In particular, the LA found that Ramos failed to
ensure that his subordinates complied with the banks Know Your Customer
(KYC) safety protocols, and that he issued the PO and ATD without the
prior approval of the credit committee.
21
The LA further noted that the
quitclaim executed by Ramos must be given the force and effect of law,
effectively barring any future claim by him against BPI Family.
22


The NLRC Ruling

On appeal, the NLRC reversed the LA in a Decision
23
dated March
31, 2008, holding that the deduction complained of was illegal and
unreasonable
24
in that: (a) the alleged negligence committed by Ramos was
not substantially proven as he was not expected to personally examine all
loan documents that pass through his hands or to require the client to
personally appear before him because he has subordinates to do those details
for him;
25
(b) the issuance of the PO and ATD prior to the loans approval is
not an irregular procedure, but an ordinary occurrence in BPI Family;
26
and
(c) the deduction does not fall under the exceptions prescribed under Article
113
27
of the Labor Code on allowable deductions.
28
Further, it found
Ramoss consequent signing of the quitclaim to be without effect.
29


18
Id. at 53.
19
Id. at 103-118. Penned by Labor Arbiter Aliman D. Mangandog.
20
Id. at 115.
21
Id. at 117.
22
Id. at 116.
23
Id. at 119-135.
24
Id. at 134.
25
Id. at 129-130.
26
Id. at 131.
27
Article 113. Wage Deduction. No employer, in his own behalf or in behalf of any person, shall make
any deduction from the wages of his employees, except:
a. In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
b. For union dues, in cases where the right of the worker or his union to check-off has been recognized
by the employer or authorized in writing by the individual worker concerned; and
c. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor
and Employment.
28
Rollo, p. 132.
29
Id. at 133.
Resolution 4 G.R. No. 203186
Accordingly, it ordered BPI Family to return/refund to Ramos the amount of
P546,000.00, with additional payment of 10% thereof as attorneys fees.
30


BPI Family moved for reconsideration which was, however, denied
by the NLRC on May 30, 2008;
31
hence, it filed a petition for certiorari
before the CA. Pending resolution thereof, Ramos submitted a manifestation
that he had caused the execution of the NLRC decision and the sum
amounting to P600,000.00 was released in satisfaction of his claim.
32


The CA Ruling

In a Decision
33
dated November 12, 2010, the CA affirmed the finding
of negligence on the part of Ramos, holding that Ramos was remiss in his
duty as head of Dealer Network Marketing/Auto Loans Division in failing to
determine the true identity of the person who availed of the auto loan under
the name Trezita Acosta.
34
It observed that Ramos should have forwarded
the documents for approval to the Loans Review Section and/or the Credit
Evaluation Section of the bank and should not have authorized the release of
the car loan without clearance from the credit committee.
35
However, it also
attributed negligence on the part of BPI Family since it sanctioned the
practice of issuing the PO and ATD prior to the approval of the credit
committee.
36
Such relaxed supervision over its divisions contributed to a
large extent to its defraudation.
37
Thus, finding BPI Familys negligence to
be concurrent with Ramos, the CA found it improper to deduct the entire
P546,000.00 from Ramoss retirement benefits and, instead, equitably
reduced the same to the amount of P200,000.00.
38


Ramos moved for reconsideration which was, however, denied in a
Resolution
39
dated August 6, 2012. Hence, this petition.

The Issue Before the Court

The essential issue in this case is whether or not the CA erred in
attributing grave abuse of discretion on the part of the NLRC when it found
the deduction made from Ramoss retirement benefits to be illegal and
unreasonable.


30
Id. at 134.
31
Id. at 57 & 64.
32
Id. at 136-139.
33
Id. at 52-65.
34
Id. at 58.
35
Id. at 60.
36
Id. at 61.
37
Id. at 62.
38
Id. at 63-64.
39
Id. at 67-69.
Resolution 5 G.R. No. 203186
The Courts Ruling

The petition is meritorious.

To justify the grant of the extraordinary remedy of certiorari, the
petitioner must satisfactorily show that the court or quasi-judicial authority
gravely abused the discretion conferred upon them. Grave abuse of
discretion connotes judgment exercised in a capricious and whimsical
manner that is tantamount to lack of jurisdiction.
40
To be considered
grave, the discretionary authority must be exercised in a despotic manner
by reason of passion or personal hostility, and must be so patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform the
duty enjoined by or to act all in contemplation of law.
41


In labor disputes, the NLRCs findings are said to be tainted with
grave abuse of discretion when its conclusions are not supported by
substantial evidence. As held in the case of Mercado v. AMA Computer
College-Paraaque City, Inc.,
42
citing Protacio v. Laya Mananghaya &
Co.:
43


The CA only examines the factual findings of the NLRC to determine
whether or not the conclusions are supported by substantial evidence
whose absence points to grave abuse of discretion amounting to lack
or excess of jurisdiction. In the recent case of Protacio v. Laya
Mananghaya & Co., we emphasized that:

As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court,
the appellate court does not assess and weigh the sufficiency of evidence upon
which the Labor Arbiter and the NLRC based their conclusion. The query in this
proceeding is limited to the determination of whether or not the NLRC acted
without or in excess of its jurisdiction or with grave abuse of discretion in
rendering its decision. However, as an exception, the appellate court may
examine and measure the factual findings of the NLRC if the same are not
supported by substantial evidence. The Court has not hesitated to affirm
the appellate courts reversals of the decisions of labor tribunals if they are
not supported by substantial evidence.
44
(Emphases supplied; citations
omitted)

The requirement that the NLRCs findings should be supported by
substantial evidence is clearly expressed in Section 5, Rule 133 of the Rules
of Court which provides that [i]n cases filed before administrative or quasi-
judicial bodies, a fact may be deemed established if it is supported by
substantial evidence, or that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.


40
See Global Business Holdings, Inc. v. Surecomp Software, B.V., G.R. No. 173463, October 13, 2010,
633 SCRA 95, 102.
41
Balois v. CA, G.R. No. 182130 & 182132, June 19, 2013.
42
G.R. No. 183572, April 13, 2010, 618 SCRA 218.
43
G.R. No. 168654, March 25, 2009, 582 SCRA 417.
44
Mercado v. AMA Computer College-Paraaque City, Inc., supra note 42, at 232.
Resolution 6 G.R. No. 203186
Applying the foregoing considerations, the Court finds the CA to have
erred in attributing grave abuse of discretion on the part of the NLRC in
finding that the deduction made from Ramoss retirement benefits was
improper. Two (2) reasons impel the foregoing conclusion:

First, as correctly observed by the NLRC, BPI Family was not able to
substantially prove its imputation of negligence against Ramos. Well-settled
is the rule that the burden of proof rests upon the party who asserts the
affirmative of an issue.
45
In this case, BPI Family failed to establish that the
duty to confirm and validate information in credit applications and
determine credit worthiness of prospective loan applicants rests with the
Dealer Network Marketing Department, which is the department under the
supervision of Ramos. Quite the contrary, records show that these
responsibilities lie with the banks Credit Services Department, namely its
Credit Evaluation Section and Loans Review and Documentation Section,
46

of which Ramos was not part of.

Second, as similarly observed by the NLRC, Ramos merely followed
standing company practice when he issued the PO and ATD without prior
approval from the banks Credit Services Department. In fact, as the CA
itself notes, BPI Family adopted the practice of processing loans with
extraordinary haste in order to overcome arduous competition with other
banks and lending institutions, despite compromising procedural safeguards,
viz.:
47


In a separate audit report (herein appended as Annex E), it was
noted that marketing officers regularly issue or release purchase orders
and authorities to deliver to car dealers (in case of dealer generated auto
loan wherein a loan originates from the automobile dealer who submits the
financing transactions, down payment and mortgage fee by the debtor-car
purchaser to the bank) before the approval of the documents. The report
further noted that the practice has been adopted due in part to the
stiff competition with other banks and lending institutions.
Resultantly, in 2005 alone, approximately 111 car loan applications
were released ahead of the approval of the credit evaluation section.

Such findings of the auditing division have not been rebutted or
countered as erroneous. In fact, in all 111 instances, the bank did not
attempt to rectify the flaw by calling the respondents attention to the
manner by which he disregarded important bank procedure or
protocol in accommodating car loan applications. It would seem
unthinkable that respondent bank has had no knowledge thereof when its
credit evaluation committee could have easily relayed the variations to the
management for expedient solution. Any conscientious, well-meaning
banking institution (such as respondent bank, We imagine) would have
raised the red flag the moment the violation is first discovered. However,
in the case before Us, respondent bank did not sound alarm until the

45
National Union of Workers in Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel
Chapter v. NLRC, G.R. No. 179402, September 30, 2008, 567 SCRA 291, 305.
46
Rollo, pp. 31-32.
47
Id. at 62.
Resolution 7 G.R. No. 203186
discovery of the first defraudation. Without doubt, its
uncharacteristically relaxed supervision over its divisions contributed
to a large extent to the unfortunate attainment of fraud. x x x
(Emphases supplied)
Based on the foregoing, it is readily apparent that Ramos' s action of
issuing the PO and ATD ahead of the approval of the credit committee was
actually conformant to regular company practice which BPI Family itself
sanctioned. As such, Ramos cannot be said to have been negligent in his
duties. To this end, it is well to note that in loan transactions, banks are
mandated to ensure that their clients wholly comply with all the
documentary requirements in relation to the approval and release of loan
applications.
48
As BPI Family "uncharacteristically relaxed supervision over
its divisions," yielding as it did to the demands of industry competition, it is
but reasonable that it solely bears the loss of its own shortcomings.
All told, absent any showing that the NLRC 's decision was tainted
with capriciousness or any semblance of whimsicality, the Court is wont to
grant the present petition and accordingly reverse the CA decision.
WHEREFORE, the petition is GRANTED. The Decision dated
November 12, 2010 and Resolution dated August 6, 2012 of the Court of
Appeals in CA-G.R. SP No. 104161 are REVERSED and SET ASIDE.
The National Labor Relations Commission's Decision dated March 31, 2008
and Resolution dated May 30, 2008 in NLRC NCR are
hereby REINSTATED.
SO ORDERED.
WE CONCUR:

ESTELA M: YrRLAS-BERNABE
Associate Justice
ANTONIO T. CARPIO
Associate Justice
Chairperson


ARTURO D. BRION
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice
48
Far East Bank and Trust Company v. Tentmakers Group, Inc., G.R. No. 171050, July 4, 2012, 675
SCRA 546.
Resolution 8 G.R. No. 203186
JOS
ATTESTATION
I attest that the conclusions in the above Resolution had been reached
in consultation before the case was assigned to the writer of the opinion of
the Court's Division.
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairperson's Attestation, I certify that the conclusions in the
above Resolution had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice