Sawadjaan v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Sappari K. Sawadjaan, an employee of the Philippine Amanah Bank (PAB) and later Al-Amanah Islamic Investment Bank of the Philippines (AIIBP), was assigned to inspect properties offered as collateral by Compressed Air Machineries and Equipment Corporation (CAMEC) for a credit line. Based on his report, the bank granted the loan. Subsequently, the bank discovered that one of the Transfer Certificates of Title (TCTs) was spurious, the property non-existent, and the other property had a prior existing mortgage. An investigating committee was formed, and petitioner was charged with Dishonesty and/or Conduct Prejudicial to the Best Interest of the Service. Procedural History: Petitioner refused to submit to the investigating committee's jurisdiction, leading to his default and ex parte presentation of evidence. The committee recommended suspension, but the AIIBP Board of Directors initially dismissed him, later reducing the penalty to suspension. Petitioner appealed to the Civil Service Commission (CSC), which affirmed the dismissal. The CSC denied his motion for reconsideration. Petitioner then filed a petition for certiorari with the Supreme Court, which was referred to the Court of Appeals. The Court of Appeals affirmed the CSC resolutions. Petitioner filed a Motion for New Trial/Reconsideration with the Court of Appeals, alleging the AIIBP lacked corporate personality due to failure to file by-laws. This was denied. Petitioner then filed the instant petition for certiorari with the Supreme Court. The Petition: Petitioner seeks to annul the Court of Appeals' decision and resolution, arguing that the AIIBP lacked jurisdiction to conduct administrative proceedings due to its failure to file by-laws, thus losing its corporate personality. He also claims the CSC erred in assuming jurisdiction and that the findings of dishonesty and the penalty of dismissal were erroneous.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in affirming the dismissal of the petitioner; whether the petition for certiorari was filed out of time; and whether the AIIBP lost its corporate personality due to failure to file by-laws. Whether the petitioner was guilty of Dishonesty and/or Conduct Prejudicial to the Best Interest of the Service, specifically regarding his failure to verify the authenticity of documents and existence of properties offered as collateral.
Ruling
The petition is DISMISSED. The Decision of the Court of Appeals affirming the Resolutions of the Civil Service Commission is AFFIRMED.
Ratio Decidendi
On the alleged grave abuse of discretion and the AIIBP's corporate existence: The Court held that the petition for certiorari was filed out of time, as it was filed more than a month after the lapse of the reglementary period for appeal. Even if treated as a special civil action for certiorari, it failed to show grave abuse of discretion. The petitioner's argument that the AIIBP lost its corporate personality due to failure to file by-laws was untenable. The AIIBP was created by law and functioned as a de facto corporation. Its failure to file by-laws on time does not automatically nullify its existence or its right to discipline employees, especially since the petitioner accepted employment and benefits from it. The Court emphasized that this was a labor dispute, and the employer has a right to discipline employees whose actions are inimical to its interests. On the petitioner's liability for Dishonesty and/or Conduct Prejudicial to the Best Interest of the Service: The Court found no merit in the petitioner's claim that he should not be held liable. As an appraiser/investigator, he was expected to exercise more than ordinary prudence. He failed to verify the authenticity of documents and the existence of properties offered as collateral, and neglected to check for existing encumbrances. Specifically, he failed to note that one property was already mortgaged and did not verify the authenticity of the TCT for another property, which turned out to be spurious and described a non-existent property. This failure resulted in substantial damage to the bank. The Court reiterated that the petitioner's liability for conduct prejudicial to the best interest of the service was clear, regardless of whether he personally profited from his remissness. His failure to perform his official duties with the required diligence and accuracy was evident and caused prejudice to the bank.
Main Doctrine
An employee who fails to perform his duties with the required prudence, leading to substantial damage to the employer, may be held liable for conduct prejudicial to the best interest of the service, even if no direct personal profit is shown. Furthermore, a corporation's failure to timely file its by-laws does not automatically nullify its corporate existence or its right to discipline employees, especially when it is functioning as a de facto corporation and the employee has accepted employment and benefits from it.