Sps. Lacierda vs. Platon

Jurisdiction over the subject matter is determined by the allegations of the complaint and the relief prayed for; a complaint whose ultimate facts and primary prayer arise from termination of employment and seek reinstatement, salaries, benefits, and damages is within the Labor Arbiter’s exclusive jurisdiction, not the RTC, even if denominated as one for interference with contract, specific performance, and damages.

SEAFDEC is an international organization composed of Southeast Asian governments, created by a treaty to which the Philippines is a signatory, and is immune from suits, clothed with diplomatic immunity, and enjoys functional independence and freedom from control of the state where its office is located. Petitioners were employees or officers of SEAFDEC assigned to its Training and Information Division, while respondents were officers and management personnel of SEAFDEC/AQC. The dispute arose from a training program implemented under a Memorandum of Agreement between JICA and SEAFDEC, represented by respondent Dr. Rolando R. Platon, Chief of its Aquaculture Department.

Petitioners were all employees or officers of SEAFDEC, an international agency. Respondents were officers and management personnel of SEAFDEC/AQC, an international organization composed of the governments of Southeast Asia and created by a treaty to which the Philippines is a signatory. SEAFDEC is immune from suits, clothed with diplomatic immunity, and enjoys functional independence and freedom from control of the state in whose territory its office is located. On August 21, 2000, JICA and SEAFDEC, represented by respondent Dr. Rolando R. Platon, Chief of its Aquaculture Department, entered into a Memorandum of Agreement (MOA) for JICA’s Third Country Training Programme on Responsible Aquaculture Development. Under the MOA, SEAFDEC agreed to furnish all necessary materials and services for the satisfactory implementation and completion of the training, while JICA agreed to pay SEAFDEC ₱3,540,150.00. Liquidation was to be made by submitting a statement of expenditures with itemized breakdown, supporting documents, and receipts, and any excess amount consigned was to be returned to JICA.

Petitioners, who were assigned at SEAFDEC’s Training and Information Division, were selected by SEAFDEC to take part in the training program. Because the program involved visits to Bohol, Cebu, Bacolod, and Manila, petitioners were given cash advances subject to liquidation. After the training concluded, petitioners submitted documents to support their liquidation of cash advances and claim for reimbursement of expenses. In a Report dated November 16, 2000 for the Chief, submitted by respondent Amelita A. Subosa, Audit Supervisor, an audit showed that the hotel receipts submitted were much higher than the actual amount petitioners paid for accommodation. By Memoranda Nos. ACL-276 and 277 dated December 12, 2000, respondent Agnes C. Lacuesta, Human Resources Management Officer, directed petitioners to show cause in writing why no administrative sanction should be imposed for violation of the SEAFDEC AQC Rules on Personnel Conduct and Discipline, particularly Section IV on Moral Turpitude, paragraphs (A) misrepresentation or false statements whether oral or written with intent to gain or take advantage, and (B) fraudulent machinations for financial gain, as stated in the audit findings. Respondent Dan D. Baliao, Head of the Administrative Division, created an Ad Hoc Committee to investigate the audit report.

Petitioners proffered their explanation, but by letter dated January 24, 2001, they waived participation in the administrative hearing and submitted the administrative charges for decision on the basis of the written charges and their written explanation. By separate Memoranda dated March 5, 2001, respondent Platon notified petitioners that a study and evaluation of the evidence established that they committed the serious charges, and terminated them for cause effective at the close of office hours of even date. The termination was grounded on misrepresentation or false statements with intent to gain or take advantage and fraudulent machination for financial gain under Section IV(a & b) of the Department’s Rules on Personnel Conduct and Discipline in relation to Article 282(a and b) of the Labor Code.

More than a year later, on May 3, 2002, petitioners filed a complaint against respondents, denominated “FOR: INTERFERENCE WITH CONTRACT, SPECIFIC PERFORMANCE AND DAMAGES.” They alleged that the case was not a suit against SEAFDEC or JICA but against respondents in their individual and personal capacities as officers and employees of SEAFDEC, for malicious, oppressive, and inequitable actionable acts for which they alone were liable but which respondents sought to cover up as official actions. Petitioners claimed that they were the actual implementors and trainors for the Seventh Session, a special project governed by the MOA and outside their regular duties, and that JICA, from its own funds, gave them honoraria, per diems, and accommodation allowances under paragraph 3.04 of the MOA, with no SEAFDEC funds involved. They alleged that respondents, in conspiracy and cooperation, interfered with and violated the MOA by reducing and eventually denying petitioners the benefits they were entitled to, and by illegally terminating their employment for alleged violations that were authorized by the MOA and had nothing to do with their work with SEAFDEC. When petitioners presented for liquidation and reimbursement receipts for expenses corresponding to the excess over the SEAFDEC rate but not exceeding the JICA rate, respondents disapproved reimbursement. Through respondents Amelita Subosa as Audit Supervisor and Merlinda Junio and Teresita Hilado as members of the Internal Audit Team, respondents caused a verification and audit of these expenses, which had never been done in the past six sessions. In this audit, the Internal Audit Team found and recommended that petitioners’ request for reimbursement be denied, so petitioners were not paid their honoraria and per diems and were not reimbursed for expenses over the SEAFDEC rate but below the JICA rate for the field trips, including the last one in Manila. Respondents then charged petitioners with misrepresentation or false statements with intent to gain or take advantage and fraudulent machination for financial gain for submitting their claims, which petitioners alleged had no legal and factual basis.

Petitioners further alleged that respondents unlawfully constituted an Investigating Committee composed of Demetrio Estenor, Salvador Rex Tillo, Teresita Natividad, Teresa Mallare, Agnes Lacuesta, Jocelyn Coniza, and Nelda Ebron, which conducted an ex parte investigation, disregarded petitioners’ objections and requests for disqualification, and found petitioners guilty of fabricated charges based on respondents’ own evidence, recommending their dismissal. Respondent Platon first tried to persuade petitioners to voluntarily retire; when they refused, he terminated their services on March 5, 2001. Petitioners alleged the termination was without factual and legal bases because the acts complained of were allowed under the MOA; respondent Baliao had no authority or jurisdiction to constitute the Investigating Committee because the acts involved not SEAFDEC but a JICA project governed by the MOA; the committee had no legal basis for its existence and investigation because JICA, not SEAFDEC, should have initiated and conducted it; and respondents, as SEAFDEC officers and employees not involved in the JICA training project, had no power or authority to investigate and adjudicate matters arising from JICA projects. They also alleged that the penalty of dismissal was oppressively and inequitably disproportionate, considering their years of service: Rodrigo Lacierda, 22 years; Jessica Saliente, 19 years; Ruby Salde, 23 years; and Armniel Sim, 7 years. Petitioners claimed that respondents, in conspiracy, unlawfully interfered with and intruded into the contractual relations between petitioners and JICA under a stipulation pour autri in the MOA, made unauthorized alterations and changes, required compliance when unnecessary, denied benefits, and illegally terminated petitioners without authority from either SEAFDEC or JICA. They invoked Article 19 and sought joint and several liability under Articles 20 and 21 on Human Relations and Article 2176 on Quasi-Delicts of the Civil Code. They prayed for a writ of preliminary mandatory injunction directing respondents, their agents, or representatives to restore and return petitioners to their respective work or positions in SEAFDEC and to all salaries, benefits, and other privileges without loss of seniority, diminution of ranks or pay; for judgment making the writ permanent; and for actual damages of at least ₱482,000.00 for Rodrigo Lacierda, ₱482,000.00 for Jessica L. Saliente, ₱407,000.00 for Ruby Salde, and ₱194,000.00 for Armniel Sim, plus other remunerations, benefits, and privileges, moral damages of at least ₱100,000.00 for each petitioner, attorney’s fees of ₱200,000.00 plus a contingent 25% of whatever amount adjudged in their favor, litigation expenses of at least ₱100,000.00, exemplary damages, and costs.

Respondents, in their Answer, justified the audit of petitioners’ travel expenses and the constitution of the Ad Hoc Committee to investigate the charges that became the basis of petitioners’ termination. They alleged that the suit was in reality against SEAFDEC, over whose person the RTC had no jurisdiction, and that the cause of action was one for reinstatement and recovery of wages, salaries, allowances, and per diems, involving employer-employee relations, over which the RTC also had no jurisdiction over the subject matter. They further alleged that the MOA relied upon by petitioners was an agreement between SEAFDEC and JICA under which petitioners had no right, hence petitioners had no cause of action. The RTC found that nothing in the complaint showed respondents acted in their personal capacities or beyond the scope of their official functions; the acts alleged could only be performed by respondents in their official duties or functions as executives or administrators of SEAFDEC and could not have been done had they acted in their personal capacities. At most, respondents may have committed indiscretions or lapses in their investigation or misappreciation of facts, but their actions were work-related and within the scope of their functions as officials of SEAFDEC. The RTC also observed that the reliefs sought were directed to SEAFDEC and not to respondents, who could not perform them in their personal capacities.

• Jurisdiction over Persons: Petitioners maintained that the RTC had jurisdiction over respondents because they were sued in their private capacities, not as SEAFDEC.
• Nature of the Action: Petitioners argued that their complaint for interference with contract, specific performance, and damages is based on tort, not a labor case, and that restoration to their former positions is only incidental to the nullification of the acts complained of.
• Official Acts and Authority: Petitioners alleged that respondents acted in conspiracy and in their individual capacities, interfered with the JICA-SEAFDEC MOA and petitioners’ contractual relations under a stipulation pour autri, denied benefits, and illegally terminated petitioners without authority from SEAFDEC or JICA.
• Invalid Termination and Penalty: Petitioners alleged that the termination was without factual and legal bases because the acts complained of were allowed under the MOA, the investigating committee had no authority, and the penalty of dismissal was disproportionate to their years of service.
• Damages: Petitioners sought actual, moral, exemplary damages, attorney’s fees, litigation expenses, and costs under Civil Code Articles 19, 20, 21, and 2176.

• Nature of Suit: Respondents countered that the complaint was in reality a suit against SEAFDEC, over whose person the RTC had no jurisdiction.
• Jurisdiction over Subject Matter: Respondents argued that the cause of action was one for reinstatement and recovery of wages, salaries, allowances, and per diems, involving employer-employee relations, and thus outside RTC jurisdiction.
• No Cause of Action: Respondents alleged that the MOA was between SEAFDEC and JICA, under which petitioners had no right, hence no cause of action.
• Justification of Acts: Respondents justified the audit of petitioners’ travel expenses and the constitution of the Ad Hoc Committee to investigate the charges as bases for termination.

• Jurisdiction over Subject Matter: Whether the RTC has jurisdiction over the subject matter of petitioners’ complaint for interference with contract, specific performance, and damages.
• Nature of the Action: Whether the complaint is a tort action, as petitioners contend, or a labor case arising from employer-employee relations, as respondents contend.
• Effect of Pleadings: Whether the allegations of the complaint and the relief prayed for determine jurisdiction despite the label given by petitioners.

• Jurisdiction over Subject Matter: No. The RTC lacks jurisdiction over the subject matter because the complaint’s cause of action arose from termination of employment and the reliefs sought—reinstatement, salaries, benefits, and damages—fall within the Labor Arbiter’s exclusive jurisdiction under Article 217 of the Labor Code, as amended by R.A. 6715.
• Nature of the Action: It is a labor case, not a tort action. The allegation of interference with contract is a mere conclusion, not an ultimate fact, and does not convert the employer-employee dispute into an RTC tort case.
• Effect of Pleadings: Jurisdiction is determined by the allegations of the complaint and the relief prayed for. A plaintiff cannot confer jurisdiction on the RTC by contrived wording or omit facts to divest a court of jurisdiction.

• Jurisdiction over Subject Matter: The settled rule is that jurisdiction over a particular case is determined by the allegations of the complaint, or the allegations of the complaint and the relief sought, or the allegations of the pleadings—the complaint, motion to dismiss, and answer in some cases. The allegations must be of ultimate facts and the relief prayed for. A court cannot be divested of jurisdiction by an ingenuous omission of a matter showing jurisdiction, nor can it be conferred with jurisdiction where it has none by contrived wording. From the complaint, petitioners’ cause of action arose from the termination of their employment on the basis of the findings and recommendation of the Ad Hoc Investigating Committee, of which some respondents were members; petitioners claimed the termination was without factual and legal bases. The primary prayer was for respondents to restore and return petitioners to their work or positions in SEAFDEC and to all salaries, benefits, and other privileges without loss of seniority or diminution of ranks or pay. These allegations and reliefs are termination and employment-benefit claims, which Article 217 of the Labor Code, as amended by R.A. 6715, places within the original and exclusive jurisdiction of the Labor Arbiter. The RTC therefore correctly dismissed the complaint for lack of jurisdiction over the subject matter.
• Nature of the Action: The allegation that respondents unlawfully and illegally interfered with and intruded into the contractual relations between petitioners and JICA is a mere conclusion, not an allegation of ultimate fact. It was worded as such in an attempt to justify petitioners’ contention that the complaint is one based on tort. The label or denomination of the complaint does not control; the ultimate facts and the relief prayed for do. Because the core grievance was illegal termination and non-payment of salaries and benefits arising from employer-employee relations, the action is a labor case, not an RTC tort case.
• Effect of Pleadings: The Court emphasized that jurisdiction is determined by the allegations of the complaint and the relief sought, and that a plaintiff cannot confer jurisdiction on a court by contrived wording. The primary relief sought—restoration to work and payment of salaries and benefits—could not be carried out by respondents if they were sued in their personal capacities for tort and damages. The relief thus betrayed the true cause of action and confirmed that the RTC had no jurisdiction. The RTC’s dismissal was affirmed.

• Jurisdiction over the subject matter is determined by the allegations of the complaint and the relief prayed for — The complaint’s allegations must state ultimate facts, not legal conclusions, and the relief sought must be considered together with the allegations. A court cannot be deprived of jurisdiction by a plaintiff’s omission of facts showing jurisdiction, nor can jurisdiction be created by contrived wording. The Court applied this rule by looking past the complaint’s title and holding that the real cause of action was termination of employment.
• Employer-employee disputes fall within the Labor Arbiter’s exclusive jurisdiction — Under Article 217 of the Labor Code, as amended by R.A. 6715, the Labor Arbiter has original and exclusive jurisdiction over termination disputes, claims for wages and other terms and conditions of employment if accompanied by reinstatement, claims for damages arising from employer-employee relations, and other claims arising from employer-employee relations exceeding ₱5,000, whether or not accompanied by reinstatement. The complaint’s primary relief—reinstatement and recovery of salaries and benefits—brought it within this grant.
• A tort label does not convert an employment dispute into an RTC case — A plaintiff’s characterization of the action as one for tort, interference with contract, or quasi-delict does not control jurisdiction where the ultimate facts and relief prayed for arise from an employer-employee relationship. The Court held that the allegation of interference with the JICA-SEAFDEC contract was a mere conclusion and did not remove the case from labor jurisdiction.
• A suit against officers for acts performed in their official capacity and for relief only the organization can grant is not a personal-capacity suit — The RTC found that respondents’ alleged acts could only be performed in their official functions as SEAFDEC administrators and that the reliefs sought were directed to SEAFDEC, not to respondents personally. The Supreme Court affirmed the dismissal, noting that respondents could not carry out the primary prayer for reinstatement and payment of salaries if sued in their personal capacities.

• "It is settled that jurisdiction over a particular case is determined by the allegations of the complaint, or the allegations of the complaint and the relief sought, or the allegations of the pleadings — the complaint, motion to dismiss, and answer in some cases." — This states the controlling rule on jurisdiction over the subject matter and frames the Court’s entire analysis.
• "A court cannot be divested of jurisdiction by the ingenuous omission by a plaintiff of any reference to a matter which clearly shows that said court has jurisdiction, nor can a court be conferred with jurisdiction where it has none by a contrived wording by a plaintiff’s allegations in the complaint in order to impress that it is within said court’s jurisdiction." — This is the canonical formulation of the rule that the plaintiff’s pleading labels cannot control jurisdiction.
• "Petitioners’ allegation in the complaint that respondents “unlawfully and illegally interfered with and intruded into the contractual relations between [them] and JICA” is a mere conclusion, not an allegation of ultimate fact, worded as such in an attempt to justify their contention that the complaint is one based on tort." — This applies the ultimate-fact rule and rejects the tort characterization of the complaint.
• "If respondents were sued in their personal capacity as emphatically stressed by petitioners, for tort and damages, they would under no circumstance, power or authority be able to carry out such primary prayer. Where lies petitioners’ logic?" — This demonstrates that the primary relief sought—reinstatement and payment of salaries—betrays the true employment-related cause of action.

• Perkins vs. Roxas, 72 Phil. 514 (1941) — Cited for the rule that jurisdiction over the subject matter is determined by the allegations of the complaint. The Court relied on this principle in assessing the true nature of petitioners’ action.
• Payomo vs. Floyd, 42 Phil. 788 (1922) — Cited for the rule that the allegations in the complaint must be of ultimate facts and the relief prayed for. The Court used this to reject petitioners’ conclusion that the complaint was a tort action.
• SEAFDEC vs. Acosta, 226 SCRA 49 (1993) — Cited for the proposition that SEAFDEC, as an international organization, is immune from suits, clothed with diplomatic immunity, and enjoys functional independence and freedom from control of the state where its office is located. The citation appears in the decision’s preliminary statement on SEAFDEC’s status.
• Golango vs. Court of Appeals, 283 SCRA 493 — Cited in the RTC order quoted by the Supreme Court in connection with the rule against forum shopping. The Supreme Court did not rely on this citation in its own disposition.
• MSF Tire and Rubber Inc. vs. Court of Appeals, 311 SCRA 784 — Also cited in the RTC order quoted by the Supreme Court on forum shopping. It was not part of the Supreme Court’s ratio decidendi.

• Article 217, Labor Code of the Philippines, as amended by R.A. 6715 — The RTC quoted this provision as vesting original and exclusive jurisdiction in the Labor Arbiter over termination disputes; claims for wages, rates of pay, hours of work, and other terms and conditions of employment if accompanied by reinstatement; claims for actual, moral, exemplary, and other damages arising from employer-employee relations; and all other claims arising from employer-employee relations exceeding ₱5,000, whether or not accompanied by reinstatement. The Supreme Court affirmed that the complaint’s allegations and reliefs fell within this provision.
• Article 282(a and b), Labor Code of the Philippines — Cited in the termination memoranda as the ground for dismissal in relation to Section IV(a & b) of the SEAFDEC AQC Rules on Personnel Conduct and Discipline. The Court did not apply this provision to the jurisdictional issue.
• Civil Code Articles 19, 20, 21, and 2176 — Cited by petitioners in their complaint as bases for liability for unlawful interference, human relations, and quasi-delict. The Court held that the tort label did not change the jurisdictional character of the complaint because the allegations and primary relief arose from employer-employee relations.
• Circular No. 28-91 — Cited in the RTC order regarding forum shopping. The Supreme Court did not rely on it in its disposition.

Artemio V. Panganiban (Chairman), Angelina Sandoval-Gutierrez, Renato C. Corona, and Cancio C. Garcia.