REPUBLIC OF THE PHILIPPINES

SUPREME COURT
Manila

SECOND DIVISION

NOTICE
Sirs/Mesdames:

Please take notice that the Court, Second Division, issued a Resolution
dated September 14, 2022 which reads as follows:
~'G.R. No. 248934 (CVM Finance & Credit Corp./Julie Marie M.
Aquitania v. Annabelle B. Fuentes). -This present petition seeks to reverse
and set aside the October 22, 2018 Decision I and August 8, 2019 Resolution 2
of the Court of Appeals (CA) in CA-G.R. S.P. No. 152859. The CA affirmed
the Decision 3 of the National Labor Relations Commission (NLRC) finding
that CVM Finance & Credit Corp. ( CVM) illegally dismissed Annabelle B.
Fuentes (Fuentes).

Fuentes was employed as an Area Operations Officer at CVM. On

October 19, 2016, CVM issued a Notice to Explain (NTE) concerning an
unpaid personal debt of ?17,500.00 from her co-employee Betty Villar
(Villar).4 The pertinent portions of the NTE reads:

Magandan.g arcnv, Ms. Fuentes,

This is regarding sa incident report na aming natanggap nuong
October 19, 2016.
Based sa incident report na aming natanggap, October 19, 2016
naka received ang HR ng letter mula sa isang agent ng CVM Finance
complaining abour personal debt amounting to ?1 7, 500 na mula pa
noong 2015. Ang naturang pagkakautang ay may kaakibat na pag abuso
sa posisyon bilang Area Operations Officer. Ayon sa written report,
imrtusan mong mag cash advance ang ating agent amounting to P25, 000
at ang P 13,000 ay ibinigay sayo bilang pautang na hanggang sa ngayon
ay hindi pa nababayaran. 5

Fuentes admitted in her written explanation that she is indebted to Villar

and was cognizant of the fact that Villar made a cash advance. However,
Fuentes vehemently denied that she ordered Villar to ask for a loan to

Penned by Associate Justice Manuel M. Barrios with Associate Justices Japar B. Dimaampao and
Henri Jean Paul B. lnting (now members of this Court), concmTing, rollo, pp . 40-48 .
Id. at 58-59 .
Id. at 105-11 3 .
Id. at 4 1.
Id. at 41-42.

(211)URES - more -
 Resolution -2- G.R. No. 248934

accommodate her. She claimed that Villar's act of taking a loan was out of her
own volition .6

On October 25, 2016, CVM conducted a formal administrative

investigation. Fuentes admitted during the investigation that the amount she
borrowed from Villar came from the latter's cash advance. On the same day,
CVM preventively suspended Fuentes for 15 days therefrom. On November
8, 2016, CVM sent Fuentes a Notice of Decision. The Decision in essence
terminated the employment of Fuentes on the grounds of breach of trust and
confidence for fraudulent transactions against the company and fraud and/or
conspiracy to commit fraud against the company.7

On February 2, 2017, Fuentes filed a complaint for illegal dismissal,

illegal suspension, non-payment of wages, thi1ieenth month pay, with claim
of separation pay and damages. 8

On April 20, 2017, the Labor Arbiter (LA) found no merit on the
complaint of Fuentes. The dispositive p01iion of the Decision dismissing the
complaint reads :

WHEREFORE, premises considered, a judgment is hereby

rendered declaring complainant to have been VALIDLY DISMISSED
from his employment and DISMISSING the instant complaint for lack
of merit.

All other monetary claims are hereby ordered dismissed for lack of
merit.

SO ORDERED.9

The LA, in dismissing the complaint, stated that CVM has lost trust and
confidence in Fuentes. This is because there is a connection between CVM's
business as a lending company and the position of Fuentes as a manager in the
company. The LA elaborated that it is axiomatic that managers of lending
companies are charged with the handling of significant amounts of money. 10
The LA concluded that Fuentes abused her position when she ordered Villar
to make a cash advance . 11

On review, the NLRC reversed and set aside the findings of the LA.
The decreta) portion of its decision reads :

- - - · - - - - -- - - -
ici. ?.: 42.
Id.
Id.
lcl. at l 0"1 .
I ll
!d. at IOl .
II
Id. at l 02.

(21l)URES - more -
 Resolution -3- G.R. No. 248934

WHEREFORE, the appealed decision is hereby REVERSED and

SET ASIDE, and another entered declaring the dismissal of complainant
Annabelle B. Fuentes without cause, and hence ILLEGAL.

Accordingly, respondent CVM Finance And Credit Corporation is

ordered to pay complainant BACKWAGES from the time of her
dismissal, and SEPARATION PAY equivalent to her one month salary
for every year of service. Provided, that from the total amount of her
monetary entitlement shall be deducted !'>68,393.40 which represents the
sum of complainant's outstanding obligations.

The Computation Unit of this Commission is hereby directed to

make the necessary computation of the monetary award granted
complainant, which shall form an integral pa1i of this decision.

SO ORDERED. 12

The NLRC opined that the records of the case is bereft of particulars
about how Fuentes conducted herself in allegedly abusing his power in
engaging Villar to commit a supposed fraudulent transaction. According to
the NLRC, what was shown was merely a factual conclusion that Fuentes
abused her authority. This alone does not meet up the requirement of
substantial evidence to justify Fuentes' dismissal. 13

Aggrieved, CVM filed a petition for certiorari with the CA asking for
the reversal of the NLRC's decision. CVM argued that the NLRC decided a
question of substance not in accord with law or with applicable jurisprudence.

On October 22, 2018, the CA issued its Decision denying the petition
ofCVM as follows:

WHEREFORE, premises considered, the petition is DENIED.

SO ORDERED. 14

The CA found that there was no fraud committed by Fuentes. 15 The

appellate court pointed out that the loan of Fuentes from Villar is a private
affair between them. Thus, the company cannot tenninate Fuentes'
employment on the ground of non-payment of this loan. 16

The CA observed that in the absence of the essential elements of fraud

or malicious intent, Fuentes' acts do not constitute a justifiable ground for her
dismissal. The CA elaborated that Fuentes' failure to settle her personal loan
obligation to Villar does not exhibit moral perverseness, nor a dishonest nor

12
Id. at 113.
I]
Id. at 111.
I~
Id. at 48.
15
Id. at 46 .
I!,
Id.

(2ll)URES - more -
 Resolution -4- G.R. No. 248934

deceitful conduct in the performance of her duties that would justify loss of
trust and confidence. 17

18
The CA denied the subsequent motion for reconsideration of CVM.

Hence, CVM filed the petition. CVM asserts that Fuentes holds a
position of trust and confidence considering she is one of the managers of the
company and more so she holds significant amount of money and property of
CVM. 19 CVM claims that the act of Fuentes in ordering her subordinate Villar
to make cash advance and thereafter failed to pay the same for the longest
time clearly shows her fraudulent scheme of using her position for her
°
financial gain. 2 CVM maintains Fuentes is misplaced to claim that the
transaction is merely personal between her and Villar since the cash advance
has a connection with the finances of CVM. 21

CVM further states that Fuentes is a confidential employee as such she

is expected to be circumspect in her actions especially if it concerns money
matters. 22 CVM claims that if Fuentes can exe1i influence to direct a
subordinate to make a cash advance for her benefit, then it is not farfetched
for her to commit a more serious infraction involving money of the
cornpany. 23

CVM claims that it was correct in terminating the employment of

Fuentes as a valid exercise of management prerogative. CVM points out that
employers are allowed a wider latitude of discretion in terminating the
services of employees who perform functions which by their nature require
the employer's full trust and confidence. 24 Thus, according to CVM mere
existence of a basis for believing that an employee breached the trust of the
employer is sufficient and does not require proof beyond reasonable doubt. 25

CVM further claimed that the CA departed from the accepted and usual
course of judicial proceedings, and has sanctioned such departure by the
commissioners, thus calling for the exercise of this Comi of its extra-ordinary
power of reviewing grave abuses. 26

Fuentes countered that the petition should be denied since the ruling of
the NLRC is bereft of any indication that it was made with grave abuse of

17
Id. at 47.
IH
Id. at 59 .
l'I
Id. at 20.
:!O
Id at 20-21 .
cl Id. at 21 .
21
ld. i:Jl 24.
2J
ld.
24
Id. at 29 .
.::!5
Id. at 19-3(1.
~ (,
Id. at 44 .

(21l)URES - more -
 Resolution -s- G.R. No. 248934

discretion. 27 Fuentes claims that there is a manifest absence of the essential

elements of fraud or malicious intent. Fuentes submits that her acts do not
constitute a justifiable ground for her dismissal from employment. 28

The sole issue for this Court's resolution is whether the CA e1Ted in
finding that Fuentes was illegally dismissed by CVM.

Our Ruling

The petition lacks merit.

To invoke loss of trust and confidence as a just cause for termination of

employment proof must be shown that: ( 1) the dismissed employee occupied
a position of trust and confidence; and (2) the dismissed employee committed
"an act justifying the loss of trust and confidence." 29

In the case under consideration, even the respondent concedes that she
is a managerial employee occupying a position of trust and confidence. Thus,
the lone matter to be resolved is whether the act of respondent is of such
gravity to justify the loss of trust and confidence.

We find that the CA and the NLRC did not commit an error in finding
that there was no act that would justify the petitioner losing its trust and
confidence on the respondent. For an act to be considered as 1oss of trust and
confidence, it must be first, work related, and second, founded on clearly
established facts. 30 The employer's loss of trust and confidence must be based
on a willful breach of trust and founded on clearly established facts. A breach
is willful if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. It must rest on substantial grounds and not on the
employer's arbitrariness, whims, caprices or suspicion. 31

This Court finds the CA's appreciation that there was no willful breach
of trust to be in order. The on point observation of the appellate court is
reproduced below:

XXX

In this case, the complaint against private respondent pertains to her

act of borrowing a sum or money that came from Vi liar's cash advance
from the company. Seemingly, there is no substantial evidenc~ to prove
the accusation of petitioner that private respondent deliberately abused

27 Id. at 144.
Id. at 146.
Robw:!u11, Inc:. 1·. Coun o/App,mls, G.R. No. 223854, March I 5, 202 l .
JO
tvlalcaba v. ProHealth Pharma Phi/1j1pint!s, Inc, 832 Phil. 460, 486(2018) .
.11
Pardi/lo v. Bandojo, G.R. No. 224854, March '27, 2019.

(2ll)URES - more -
 Resolution - 6- G.R. No . 248934

her authority to commit a fraudulent transaction against the company.

The administrative investigation did not focus on determining whether or
not there was fraud committed by private respondent against petitioner,
or even against Villar, in obtaining the cash advance .

We rule in the negative. For Us, there was no fraud committed by

private respondent. Villar readily concedes that she applied for the cash
advance, and the company duly approved the same without question.
The loan of private respondent from Villar is a private affair between
them and the company cannot on that account summarily tem1inate
private respondent's employment on the ground of non-payment of this
loan. While a less stringent degree of proof is required in termination
cases involving managerial employees such as private respondent, the
employers could not invoke the ground of loss of trust and confidence
arbitrarily. It is to be noted that only the amount of P13 ,000.00 was
loaned by private respondent from Villar, out of the latter's 'f->25,000.00
cash advance. Thus, it cannot be gainsaid that only private respondent
benefited from that cash advance. Ultimately, it was still the sole
prerogative of Villar to decide whether or not she would make a cash
advance, considering that the same is completely under her own name
and accountability. If at all, private respondent can only be imputed with
the failure to pay her personal obligations to Villar, although the records
do not state the due date. Case law holds that the misdeed attributed to
the employee must be a genuine and serious breach of established
expectations required by the exigencies of the position regardless of its
designation, and not out of a mere distaste , apathy, or petty
misunderstanding.32
XXX

To sum up, this Court does not view the acts committed by respondent
as willful breach of trust. The respondent acknowledged that she was indebted
to her co-employee. However, we do not see any indication of moral depravity
nor any abuse of authority on the part of the respondent. On the contrary, the
Court finds that the respondent's failure to pay the loan on time is not a grave
offense that will put a dent on her capacity as a manager in a lending business.
We find no correlation between asking a loan from another employee and the
alleged propensity to commit a more serious infraction involving the property
of the company. Therefore, this Comi finds that the petitioners illegally
terminated the respondent.

The respondent as she was illegally dismissed is therefore to be

reinstated to her former position without loss of seniority rights and other
privileges, and is entitled to full back wages, inclusive of allowances, and
other benefits or their monetary equivalent, computed from the time of the
withholdir1g of the employee's compensation up to the time of actual
reinstatement. In case that reinstatement is not possible due to the irreparable
relations between the petitioners and the respondent, separation pay should
instead be paid to the respondent equivalent to a month of salary for every

Rollo , pp . 46-47 .

(211)URES - more -
l,4J
 Resolution -7- G.R. No. 248934

year of service, computed from the time of engagement up to the finality of

this resolution. 33

Pursuant to the ruling of this Court in the case of Nacar v. Gallery

f-i'rames, 34 the monetary awards should be subject to a six percent (6%) interest
per annum from the finality of this Resolution until full payment.

WHEREFORE, premises considered, the petition is DENIED for lack

of merit. The October 22, 2018 Decision and August 8, 2019 Resolution of
the Court of Appeals in CA-G.R. S.P. No. 152859 are hereby AFFIRMED.
Petitioners CVM Finance & Credit Corp./Julie Marie M. Aquitania in her
capacity as officer of CVM are ORDERED to reinstate Annabelle B. Fuentes
to her former position without loss of seniority rights and other privileges, and
to pay full back wages, inclusive of allowances, and other benefits or their
monetary equivalent, computed from the time of the withholding of the
employee's compensation up to the time of actual reinstatement OR if
reinstatement is not possible, to pay Annabelle B. Fuentes SEPARATION
PAY equivalent to one-month salary for every year of service, computed from
the time of engagement up to the finality of this Resolution.

The monetary awards are further subject to six percent ( 6%) interest per
annum from the finality of this Resolution until full payment. The case is
REMANDED to the Labor Arbiter for the proper execution of this
Resolution.

SO ORDERED." (Leonen, J, on official leave,· Lazaro-Javier, J,

Acting Chairperson per Special Order No. 2909 dated September 9, 2022)

By authority of the Court

OTUAZON
lerk of Court/6 q/ff>
0 3 OCT 2022

_n M+ W Zander Philippines, Inc. v. Enriquez, 606 Phil. 591 (2009).

716 Phil. 267, 283 (20 I 3) as cited in Jalit, Sr. v. Cargo Safeway. Inc. , G.R. No. 238147,
September 29, 202 l.

(211)URES - more -
Resolution 8 G.R. No. 248934
September 14, 2022

DELOS REYES JROG & AS SOCIATES (reg)

Counsel for Petitioner
Room 406, Web-Jet Building
No. 64, Quezon Ave. cor. BMA St.
1000 Quezon City

ANNABELLE B. FUENTES (reg)

Respondent
No. 267 E. Dela Paz St.
Brgy. San Pedro, Angono, 1930 Rizal

NATIONAL LABOR RELATIONS COMMISSION (reg)

PPSTA Building, Banawe Street cor. Quezon Avenue
1100 Quezon City
(NLRC NCR Case No. 02-01517-17;
NLRC LAC No. 05-001860-17)

JUDGMENT DfVISION (x)

Supreme Court, Manila

PUBLIC INFORMATION OFFICE (x)

LIBRARY SERVICES (x)
[For uploading pursuant to A.M. No. 12-7-SC]

OFFICE OF THE CHlEF ATTORNEY (x)

PHILIPPINE JUDICIAL ACADEMY (x)
Supreme Court, Manila

COURT OF APPEALS (x)

Ma. Orosa Street
Ermita, I 000 Manila
CA-G.R. SP No. 152859

Please notify the Court of any change in your address.

GR248934. 9/14/2022(21 I )URES /i~