Title
San Miguel Corporation vs. National Labor Relations Commission
Case
G.R. No. L-58630
Decision Date
Nov 25, 1983
SMC terminated Rebolos for misappropriating a cash bond; NLRC reinstated him, but SC reversed, ruling breach of trust justified dismissal.
employment termination
breach of trust
cash bond

Case Summary (G.R. No. L-58630)

Factual Background

Rebolos figured in a vehicular collision while driving the company truck on November 23, 1976. A criminal case was filed against him for reckless imprudence resulting in damage to property. Because bail in the amount of P7,000.00 was required, San Miguel furnished the amount in cash and Rebolos posted the cash bond in his name. The criminal case was dismissed on November 22, 1977 after the insurance company paid for the damage sustained.

In May 1978, about six months after the dismissal, Rebolos withdrew the cash bond without informing San Miguel and without remitting the amount to the company. When a new company manager took over, management reviewed company transactions and communicated with the City Treasurer’s Office of Cagayan de Oro, which advised that the cash bond had already been withdrawn by Rebolos. On August 21, 1979, management demanded the return of P7,000.00. On that same day, at the close of working hours, Rebolos remitted the amount together with his daily collections.

On August 28, 1979, San Miguel conducted a company investigation and required Rebolos to explain why he had retained the amount for one year and three months. In his answers, he did not deny that he had withdrawn and held the money. Instead, he claimed the cash bond had been kept for safekeeping with his family funds and that he had returned it intact to the cashier’s office immediately after it was ordered returned. He also asserted that the cash bond was never used by him and that he was personally accountable and responsible because it had been entrusted to him by the company.

Filing of the Complaint and Proceedings Before the Labor Arbiter

San Miguel, through an inter-office memo from its Manila office personnel and administrative department, decided that Rebolos should be separated from the service for having betrayed the trust and confidence reposed on him by the company. Rebolos was placed under preventive suspension effective December 1, 1979 pending clearance to terminate his services from the Ministry of Labor on the ground of misappropriation of company funds and breach of trust and confidence. Rebolos received notice of termination on November 19, 1979.

On November 28, 1979, Rebolos filed a complaint for illegal dismissal with Regional Office No. X, Ministry of Labor, alleging bias by the new company manager and asserting that his record of efficiency was satisfactory. He submitted a position paper, and San Miguel filed a reply. At that level, Rebolos was unsuccessful. The Labor Arbiter dismissed his complaint and granted San Miguel’s application for clearance to terminate, finding that Rebolos had committed breach of trust and confidence.

NLRC Decision Modifying Dismissal

Rebolos appealed to the NLRC. The NLRC acknowledged that Rebolos had unreasonably kept in his possession P7,000.00 for one year and four months and that he had not sufficiently or satisfactorily explained the delay in returning the money. Nevertheless, the NLRC ordered reinstatement without backwages. It reasoned that Rebolos had been in the service for more than nine years and that the incident was isolated and did not involve his regular work. It thus concluded that dismissal was too severe and treated the period of being out of work as adequate penalty.

Issues Raised by San Miguel Corporation

San Miguel filed this petition for certiorari, assigning grave abuse of discretion and excess of jurisdiction to the NLRC. It argued that the NLRC acted in disregard of the findings that Rebolos misappropriated company funds and breached the trust reposed upon him, and that reinstatement contradicted law and prevailing jurisprudence. San Miguel further maintained that Rebolos’ conduct constituted a serious breach of trust, particularly given his sensitive position, and that reinstatement would adversely affect the morale and discipline of other employees.

Rebolos, for his part, insisted that the P7,000.00 was a loan and that he withdrew the bond in May 1978 after being told by a clerk of court that the bond could be forfeited if not withdrawn. He claimed good faith and asserted that he remitted the amount immediately upon demand.

Resolution of the Court on the Nature of the P7,000.00

The Court treated the amount of P7,000.00 as central to the case. It held that the amount was not a loan. The Court noted that the cash had been referred to in San Miguel vouchers as a “suspense account” for “cash bond to bail out salesman Rebolos” involving the truck accident. It further applied the essential element of a loan that ownership of the money passes to the borrower, coupled with an obligation to pay back an equal amount. The Court ruled that ownership did not pass to Rebolos in the circumstances because the cash bond was a company cash bond put up in his name solely to bail him out in a case arising from the performance of his work. It also pointed to Rebolos’ own statements during the investigation, where he described the sum as the “Company cash bond to be deposited personally in my name,” and to the Labor Arbiter’s observation that the payee in the vouchers was the company itself and that, if it were a direct loan, the withdrawal would have been reflected as being for Rebolos’ account.

The Court accordingly rejected the theory that the transaction was a loan and concluded that the arrangement was one of trust and accountability over company funds entrusted to Rebolos for a defined purpose.

Absence of Technical Misappropriation, Yet Presence of Willful Breach of Trust

The Court further addressed whether the facts amounted to misappropriation in the legal sense. It held that there was no evidence that Rebolos intended to convert or divert the amount for his personal use or for another person, which it identified as an essential element of misappropriation. It emphasized that Rebolos did remit the amount on the same day it was demanded.

Nevertheless, the Court found that a breach of trust and confidence existed. It held that Rebolos was accountable for the funds because the cash bond was company money placed on his behalf due to his employment and because he was driving the company vehicle at the time of the accident. In the Court’s view, Rebolos should have returned the P7,000.00 upon withdrawal. His retention of the sum for one year and three months without justifiable reason constituted a willful breach of the trust reposed on him. The Court observed that returning the money upon demand did not exculpate or mitigate the extended delay. It also held that Rebolos’ explanation—that he had kept the money for safekeeping with family funds and had never used it—was not a satisfactory justification for the delay.

Wrongfulness of Delay and Noncompliance with Company Regulation

The Court also treated Rebolos’ conduct as a violation of the company regulation requiring immediate remittance of funds or collections held for and on behalf of the company. It ruled that, knowing his obligations, demand b

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