G.R. No. 96329 - Mabuhay Vinyl Corp. vs. National Labor Relations Commission

Private respondent Antonio V. Canete was employed by petitioner Mabuhay Vinyl Corporation as a supervisor of its Shop Steel Fabrication Division.
The employment relationship was initially governed by trust and managerial responsibility expected of a supervisory employee.

On June 28, 1984, at around 1:50 p.m., a truck (Plate No. MAD-135) driven by Cecilio Tagalog, owned by Canete, entered Mabuhay Vinyl Corporation’s premises in Iligan City to haul cargo.
During inspection, security guards noticed irregularities: although the truck initially showed no cargo, the driver later presented a gate pass for items loaded in the truck.
A routine inspection by security revealed extra hidden items, specifically 113 pieces of welding rods and 37 pieces of stainless steel rings, concealed under a rug near the driver’s seat.
The security guards’ confrontation led the driver to implicate private respondent Canete in personally loading the unaccounted-for goods, a claim substantiated by verification from the petitioner’s inventory control clerk.

Following the discovery, Canete was placed on preventive suspension pending an internal investigation regarding the alleged theft.
An administrative investigation was conducted on July 5, 1984, during which Canete failed to produce documentary evidence to support his claim of ownership over the goods and refused to answer pertinent questions.
On July 9, 1984, a letter was sent to Canete requiring an explanation of his role in the incident, to which he did not respond.
Consequently, on August 9, 1984, Mabuhay Vinyl Corporation terminated Canete’s employment for gross in subordination and loss of trust and confidence, citing the theft incident as the basis.

On July 11, 1984, petitioner initiated criminal proceedings by filing a complaint for Qualified Theft and Theft against Canete and his driver, but the initial complaint was dismissed by the City Fiscal on August 24, 1984, on the grounds of Canete’s claim of ownership supported by documentary evidence.
Canete subsequently filed a complaint for illegal dismissal with the NLRC of Cagayan de Oro City on November 16, 1984, which was later referred to a hearing officer who recommended his reinstatement without loss of seniority rights and the payment of backwages.
On August 6, 1985, petitioner pursued additional criminal charges, including a new complaint for Qualified Theft and another for Falsification and Use of Falsified Documents based on newly discovered evidence.
The NLRC of Cagayan de Oro City subsequently rendered a decision on August 28, 1985, dismissing Canete’s complaint for illegal dismissal with prejudice, prompting an appeal by Canete with the NLRC of Manila.

On March 13, 1987, the NLRC of Manila reversed the earlier decision of the NLRC of Cagayan de Oro City, declaring Canete’s termination illegal and ordering Mabuhay Vinyl Corporation to pay backwages, separation pay, and attorney’s fees.
Subsequent motions, including a Motion for Reconsideration by Mabuhay Vinyl Corporation (denied on June 16, 1987), and later criminal developments further complicated the case.
On August 13, 1987, criminal charges against Canete and his driver were dismissed due to insufficiency of evidence.
Despite the criminal dismissal, disputes over the computation of monetary awards and the enforceability of the final NLRC judgment persisted, leading to a petition for certiorari.

Mabuhay Vinyl Corporation filed a petition for certiorari under Rule 65 seeking the issuance of a writ of preliminary injunction to annul the NLRC Resolution dated September 13, 1990.
The petitioner argued that the filing of a criminal information against Canete for Qualified Theft, a supervening event after the NLRC judgment became final and executory, rendered the execution of the decision unjust and inequitable.
The petitioner maintained that, given the loss of confidence due to alleged dishonesty—even though Canete was later acquitted on the ground that the prosecution failed to prove his guilt beyond reasonable doubt—the enforcement of the decision for backwages and separation pay should be stayed.

Whether the filing of a criminal information for Qualified Theft against Canete, despite his subsequent acquittal, constitutes a supervening event that justifies the stay or nullification of the final NLRC judgment awarding backwages and separation pay.

Whether the employer’s loss of confidence based on the theft incident, even in light of the criminal acquittal, is sufficient to uphold the dismissal and deny the remedy of reinstatement to Canete.

Whether the execution of a final and executory NLRC decision can be equitably stayed or amended when subsequent events make its enforcement unjust or impossible.

Whether the issuance of a writ of preliminary injunction or restraining order in this context is warranted given the supervening facts and the principles of equitable relief.