Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 141853 February 7, 2001

TERESITA V. IDOLOR, petitioner,

vs.
HON. COURT OF APPEALS, SPS. GUMERSINDO DE GUZMAN and ILUMINADA DE GUZMAN
and HON. PRUDENCIO A. CASTILLO, JR., Presiding Judge, Regional Trial Court, National
Capital Judicial Region, Branch 220, Quezon City, respondents.

GONZAGA-REYES, J.:

This is a petition for review on certiorari filed by petitioner Teresita Idolor which seeks to set aside
the decision1 of the respondent Court of Appeals which reversed the Order2 of the Regional Trial
Court of Quezon City3 granting Idolor's prayer for the issuance of a writ of preliminary injunction
and the resolution denying petitioner's motion for reconsideration.4

On March 21, 1994, to secure a loan of P520,000.00, petitioner Teresita Idolor executed in favor
of private respondent Gumersindo De Guzman a Deed of Real Estate Mortgage with right of extra-
judicial foreclosure upon failure to redeem the mortgage on or before September 20, 1994. The
object of said mortgage is a 200-square meter property with improvements located at 66 Ilocos
Sur Street, Barangay Ramon Magsaysay, Quezon City covered by TCT No. 25659.

On September 21, 1996, private respondent Iluminada de Guzman, wife of Gumersindo de

Guzman, filed a complaint against petitioner Idolor before the Office of the Barangay Captain of
Barangay Ramon Magsaysay, Quezon City, which resulted in a "Kasunduang Pag-aayos" which
agreement is quoted in full5:

"Kami, ang (mga) may sumbong at (mga) ipinagsusumbong sa usaping binabanggit sa itaas, ay
nagkakasundo sa pamamagitan nito na ayusin ang aming alitan gaya ng sumusunod:

Na ako si Teresita V. Idolor of legal age ay nakahiram ng halagang P520,000.00 noong

September 20, 1994.

Na ang nasabing halaga ay may nakasanlang titulo ng lupa (TCT No. 25659) under Registry
receipt 3420 dated July 15, 1996.

Na ako si Teresita V. Idolor ay humihingi ng 90 days palugit (grace period) to settle the said
amount.

Failure to settle the above account on or before December 21, 1996, I agree to execute a deed of
sale with the agreement to repurchase without interest within one year.

Total amount of P1,233,288.23 inclusive of interest earned.

At nangangako kami na tutupad na tunay at matapat sa mga katakdaan ng pag-aayos na inilahad

sa itaas."

Petitioner failed to comply with her undertaking; thus private respondent Gumersindo filed a
motion for execution before the Office of the Barangay captain who subsequently issued a
certification to file action.
On March 21, 1997, respondent Gumersindo De Guzman filed an extra judicial foreclosure of the
real estate mortgage pursuant to the parties agreement set forth in the real estate mortgage dated
March 21, 1994.

On May 23, 1997, the mortgaged property was sold in a public auction to respondent Gumersindo,
as the highest bidder and consequently, the Sheriff's Certificate of Sale was registered with the
Registry of Deeds of Quezon City on June 23, 1997.

On June 25, 1998, petitioner filed with the Regional Trial Court of Quezon City, Branch 220, a
complaint for annulment of Sheriff's Certificate of Sale with prayer for the issuance of a temporary
restraining order (TRO) and a writ of preliminary injunction against private respondents, Deputy
Sheriffs Marino Cachero and Rodolfo Lescano and the Registry of Deeds of Quezon City alleging
among others alleged irregularity and lack of notice in the extra-judicial foreclosure proceedings
subject of the real estate mortgage. In the meantime, a temporary restraining order was issued by
the trial court. 1âwphi1.nêt

On July 28, 1998, the trial court issued a writ of preliminary injunction enjoining private
respondents, the Deputy Sheriffs and the Registry of Deeds of Quezon City from causing the
issuance of a final deed of sale and consolidation of ownership of the subject property in favor of
the De Guzman spouses. The trial court denied the motion for reconsideration filed by the de
Guzman spouses.

Spouses de Guzman filed with the respondent Court of Appeals a petition for certiorari seeking
annulment of the trial court's order dated July 28, 1998 which granted the issuance of a
preliminary injunction.

On September 28, 1999, the respondent court granted the petition and annulled the assailed writ
of preliminary injunction. Teresita Idolor filed her motion for reconsideration which was denied in a
resolution dated February 4, 2000.

Hence this petition for review on certiorari filed by petitioner Teresita V. Idolor. The issues raised
by petitioner are: whether or not the respondent Court of Appeals erred in ruling (1) that petitioner
has no more proprietary right to the issuance of the writ of injunction, (2) that the "Kasunduang
Pag-aayos" did not ipso facto result innovation of the real estate mortgage, (3) that the
"Kasunduang Pag-aayos" is merely a promissory note of petitioner to private respondent spouses;
and (4) that the questioned writ of preliminary injunction was issued with grave abuse of discretion.

The core issue in this petition is whether or not the respondent Court erred in finding that the trial
court committed grave abuse of discretion in enjoining the private and public respondents from
causing the issuance of a final deed of sale and consolidation of ownership of the subject parcel of
land in favor of private respondents.

Petitioner claims that her proprietary right over the subject parcel of land was not yet lost since her
right to redeem the subject land for a period of one year had neither lapsed nor run as the sheriff's
certificate of sale was null and void; that petitioner and the general public have not been validly
notified of the auction sale conducted by respondent sheriffs; that the newspaper utilized in the
publication of the notice of sale was not a newspaper of general circulation.

We do not agree.

Injunction is a preservative remedy aimed at protecting substantive rights and interests.6 Before
an injunction can be issued, it is essential that the following requisites be present: 1) there must be
aright in esse or the existence of a right to be protected; 2) the act against which the injunction is
to be directed is a violation of such right.7 Hence the existence of a right violated, is a prerequisite
to the granting of an injunction. Injunction is not designed to protect contingent or future rights.
Failure to establish either the existence of a clear and positive right which should be judicially
protected through the writ of injunction or that the defendant has committed or has attempted to
commit any act which has endangered or tends to endanger the existence of said right, is a
sufficient ground for denying the injunction.8 The controlling reason for the existence of the judicial
power to issue the writ is that the court may thereby prevent a threatened or continuous
irremediable injury to some of the parties before their claims can be thoroughly investigated and
advisedly adjudicated.9 It is to be resorted to only when there is a pressing necessity to avoid
injurious consequences which cannot be remedied under any standard of compensation.10

In the instant case, we agree with the respondent Court that petitioner has no more proprietary
right to speak of over the foreclosed property to entitle her to the issuance of a writ of injunction. It
appears that the mortgaged property was sold in a public auction to private respondent
Gumersindo on May 23, 1997 and the sheriff's certificate of sale was registered with the Registry
of Deeds of Quezon City on June 23, 1997. Petitioner had one year from the registration of the
sheriff's sale to redeem the property but she failed to exercise her right on or before June 23,
1998, thus spouses de Guzman are now entitled to a conveyance and possession of the
foreclosed property. When petitioner filed her complaint for annulment of sheriff's sale against
private respondents with prayer for the issuance of a writ of preliminary injunction on June 25,
1998, she failed to show sufficient interest or title in the property sought to be protected as her
right of redemption had already expired on June 23, 1998, i.e. two (2) days before the filing of the
complaint. It is always a ground for denying injunction that the party seeking it has insufficient title
or interest to sustain it, and no claim to the ultimate relief sought - in other words, that she shows
no equity.11 The possibility of irreparable damage without proof of actual existing right is not
aground for an injunction.12

Petitioner's allegation regarding the invalidity of the sheriff's sale dwells on the merits of the case;
We cannot rule on the same considering that the matter should be resolved during the trial on the
merits.

Petitioner next contends that the execution of the "Kasunduang Pag-aayos" dated September 21,
1996 between her and spouses de Guzman before the Office of the Lupon Tagapamayapa
showed the express and unequivocal intention of the parties to novate or modify the real estate
mortgage; that a comparison of the real estate mortgage dated March 21, 1994 and the
"Kasunduang Pag-aayos" dated September 21, 1996 revealed the irreconciliable incompatibility
between them, i.e., that under the first agreement, the amount due was five hundred twenty
thousand (P520,000) pesos only payable by petitioner within six (6) months, after which it shall
earn interest at the legal rate per annum and non-payment of which within the stipulated period,
private respondents have the right to extra-judicially foreclose the real estate mortgage while
under the second agreement, the amount due was one million two hundred thirty three thousand
two hundred eighty eight and 23/100 (P1,233,288.23) inclusive of interest, payable within 90 days
and in. case of non payment of the same on or before December 21, 1996, petitioner should
execute a deed of sale with right to repurchase within one year without interest; that the second
agreement "Kasunduang Pag-aayos" was a valid new contract as it was duly executed by the
parties and it changed the principal conditions of petitioner's original obligations. Petitioner insists
that the "Kasunduang Pag-aayos" was not a mere promissory note contrary to respondent court's
conclusion since it was entered by the parties before the Lupon Tagapamayapa which has the
effect of a final judgment.13

We are not persuaded.

Novation is the extinguishment of an obligation by the substitution or change of the obligation by a

subsequent one which terminates it, either by changing its objects or principal conditions, or by
substituting a new debtor in place of the old one, or by subrogating a third person to the rights of
the creditor.14 Under the law, novation is never presumed. The parties to a contract must
expressly agree that they are abrogating their old contract in favor of a new one.15 Accordingly, it
was held that no novation of a contract had occurred when the new agreement entered into
between the parties was intended to give life to the old one.16

A review of the "Kasunduang Pag-aayos" which is quoted earlier does not support petitioner's
contention that it novated the real estate mortgage since the will to novate did not appear by
express agreement of the parties nor the old and the new contracts were incompatible in air
points. In fact, petitioner expressly recognized in the Kasunduan the existence and the validity of
the old obligation where she acknowledged her long overdue account since September 20, 1994
which was secured by a real estate mortgage and asked for a ninety (90) days grace period to
settle her obligation on or before December 21, 1996 and that upon failure to do so, she will
execute a deed of sale with a right to repurchase without interest within one year in favor of private
respondents. Where the parties to the new obligation expressly recognize the continuing existence
and validity of the old one, where, in other words, the parties expressly negated the lapsing of the
old obligation, there can be no novation.17 We find no cogent reason to disagree with the
respondent court's pronouncement as follows:

"In the present case. there exists no such express abrogation of the original undertaking. The
agreement adverted to (Annex 2 of Comment, p.75 Rollo) executed by the parties on September
21, 1996 merely gave life to the March 21, 1994 mortgage contract which was then more than two
years overdue. Respondent acknowledged therein her total indebtedness in the sum of
P1,233,288.23 including the interests due on the unpaid mortgage loan which amount she
promised to liquidate within ninety (90) days or until December 21, 1996, failing which she also
agreed to execute in favor of the .mortgagee a deed of sale of the mortgaged property for the
same amount w1thout interest. Evidently, it was executed to facilitate easy compliance by
respondent mortgagor with her mortgage obligation. It (the September 21, 1996 agreement) is not
incompatible and can stand together with the mortgage contract of March 21, 1994.

A compromise agreement clarifying the total sum owned by a buyer with the view that he would
find it easier to comply with his obligations under the Contract to Sell does not novate said
Contract to Sell (Rillo v. Court of Appeals, 274 SCRA 461 [1997]).

Respondent correctly argues that the compromise agreement has the force and effect of a final
judgment. That precisely is the reason why petitioner resorted to the foreclosure of the mortgage
on March 27, 1997, after her failure to comply with her obligation which expired on December 21,
1996.

Reliance by private respondent upon Section 417 of the New Local Government Code of 1991,
which requires the lapse of six (6) months before the amicable settlement may be, enforced, is
misplaced. The instant case deals with extra judicial foreclosure governed by ACT No. 3135 as
amended."

Notably, the provision in the "Kasunduang Pag-aayos" regarding the execution of a deed of sale
with right to repurchase within one year would have the same effect as the extra-judicial
foreclosure of the real estate mortgage wherein petitioner was given one year from the registration
of the sheriff's sale in the Registry of property to redeem the property, i.e., failure to exercise the
right of redemption would entitle the purchaser to possession of the property. It is not proper to
consider an obligation novated by. unimportant modifications which do not alter its essence.18 It
bears stress that the period to pay the total amount of petitioner's indebtedness inclusive of
interest amounted to P1,233,288.23 expired on December 21, 1996 and petitioner failed to
execute a deed of sale with right to repurchase on the said date up to the time private respondents
filed their petition for extra-judicial foreclosure of real estate mortgage. The failure of petitioner to
comply with her undertaking in the "kasunduan" to settle her obligation effectively delayed private
respondents' right to extra-judicially foreclose the real estate mortgage which right accrued as far
back as 1994. Thus, petitioner has not shown that she is entitled to the equitable relief of
injunction. 1âwphi1.nêt

WHEREFORE, the petition is DENIED. The decision of the respondent Court of Appeals dated
September 28, 1999 is hereby AFFIRMED.

SO ORDERED.

SECOND DIVISION

MICHAEL J. LAGROSAS,
Petitioner,

- versus -
BRISTOL-MYERS SQUIBB (PHIL.), INC./MEAD JOHNSON PHIL., RICHARD SMYTH as General
Manager and FERDIE SARFATI, as Medical Sales Director,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 168637

Present:

QUISUMBING, J., Chairperson,

CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.

BRISTOL-MYERS SQUIBB (PHIL.),

INC./MEAD JOHNSON PHIL.,
Petitioner,

G.R. No. 170684

- versus

COURT OF APPEALS and MICHAEL J. LAGROSAS,

Respondents.
Promulgated:

September 12, 2008

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:

Before this Court are two consolidated petitions. The first petition, docketed as G.R. No. 168637,
filed by Michael J. Lagrosas, assails the Decision[1] dated January 28, 2005 and the Resolution[2]
dated June 23, 2005 of the Court of Appeals in CA-G.R. SP No. 83885. The second petition,
docketed as G.R. No. 170684, filed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil.,
assails the Resolutions[3] dated August 12, 2005 and October 28, 2005 of the Court of Appeals in
CA-G.R. SP No. 83885.
The facts are undisputed.
Michael J. Lagrosas was employed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil. from
January 6, 1997 until March 23, 2000 as Territory Manager in its Medical Sales Force Division.[4]
On February 4, 2000, Ma. Dulcinea S. Lim, also a Territory Manager and Lagrosas former
girlfriend, attended a district meeting of territory managers at McDonalds Alabang Town Center.
After the meeting, she dined out with her friends. She left her car at McDonalds and rode with
Cesar R. Menquito, Jr. When they returned to McDonalds, Lim saw Lagrosas car parked beside
her car. Lim told Menquito not to stop his car but Lagrosas followed them and slammed Menquitos
car thrice. Menquito and Lim alighted from the car. Lagrosas approached them and hit Menquito
with a metal steering wheel lock. When Lim tried to intervene, Lagrosas accidentally hit her head.
Upon learning of the incident, Bristol-Myers required Lagrosas to explain in writing why he should
not be dismissed for assaulting a co-employee outside of business hours. While the offense is not
covered by the Code of Discipline for Territory Managers, the Code states that other infractions
not provided for herein shall be penalized in the most appropriate manner at the discretion of
management.[5] In his memo, Lagrosas admitted that he accidentally hit Lim when she tried to
intervene. He explained that he did not intend to hit her as shown by the fact that he never left the
hospital until he was assured that she was all right.[6]
In the disciplinary hearing that followed, it was established that Lagrosas and Lim had physical
confrontations prior to the incident. But Lagrosas denied saying that he might not be able to
control himself and hurt Lim and her boyfriend if he sees them together.
On March 23, 2000, Bristol-Myers dismissed Lagrosas effective immediately.[7] Lagrosas then
filed a complaint[8] for illegal dismissal, non-payment of vacation and sick leave benefits, 13th
month pay, attorneys fees, damages and fair market value of his Team Share Stock Option Grant.
On February 28, 2002, Labor Arbiter Renaldo O. Hernandez rendered a Decision[9] in NLRC NCR
Case No. 00-03-02821-99, declaring the dismissal illegal. He noted that while Lagrosas committed
a misconduct, it was not connected with his work. The incident occurred outside of company
premises and office hours. He also observed that the misconduct was not directed against a co-
employee who just happened to be accidentally hit in the process. Nevertheless, Labor Arbiter
Hernandez imposed a penalty of three months suspension or forfeiture of pay to remind Lagrosas
not to be carried away by the mindless dictates of his passion. Thus, the Arbiter ruled:
WHEREFORE, premises considered, judgment is hereby [rendered] finding that respondent
company illegally dismissed complainant thus, ORDERING it:
1) [t]o reinstate him to his former position without loss of seniority rights, privileges and benefits
and to pay him full backwages reckoned from [the] date of his illegal dismissal on 23 March 2000
including the monetary value of his vacation/sick leave of 16 days per year reckoned from July 1,
2000 until actually reinstated, less three (3) months salary as penalty for his infraction;
2) to pay him the monetary equivalent of his accrued and unused combined sick/vacation leaves
as of June 30, 2000 of 16 days x 3 years and 4 months 10 days x P545.45 = P23,636.16 and the
present fair market value of his Team Share stock option grant for eight hundred (800) BMS
common shares of stock listed in the New York Stock Exchange which vested in complainant as of
01 July 1997, provisionally computed as 90% (800 shares x US$40.00 per share x P43.20/US$ =
P1,244,160.00).
3) to pay him Attorneys fee of 10% on the entire computable amount.
All other claims of complainant are dismissed for lack of merit.
SO ORDERED.[10]
On appeal, the National Labor Relations Commission (NLRC) set aside the Decision of Labor
Arbiter Hernandez in its Decision[11] dated September 24, 2002. It held that Lagrosas was validly
dismissed for serious misconduct in hitting his co-employee and another person with a metal
steering wheel lock. The gravity and seriousness of his misconduct is clear from the fact that he
deliberately waited for Lim and Menquito to return to McDonalds. The NLRC also ruled that the
misconduct was committed in connection with his duty as Territory Manager since it occurred
immediately after the district meeting of territory managers.
Lagrosas moved for reconsideration. On May 7, 2003, the NLRC issued a Resolution[12]
reversing its earlier ruling. It ratiocinated that the incident was not work-related since it occurred
only after the district meeting of territory managers. It emphasized that for a serious misconduct to
merit dismissal, it must be connected with the employees work. The dispositive portion of the
Resolution states:
WHEREFORE, premises considered, We find this time no reason to alter the Labor Arbiters
Decision of February 28, 2002 and hereby affirm the same in toto. We vacate our previous
Decision of September 24, 2002.
SO ORDERED.[13]
Bristol-Myers filed a motion for reconsideration which the NLRC denied in an Order dated
February 4, 2004 in NLRC NCR Case No. 00-03-02821-99 (NLRC NCR CA No. 031646-02).[14]
Later, Labor Arbiter Hernandez issued a writ of execution.[15] Notices of garnishment were then
served upon the Philippine British Assurance Co., Inc. for the supersedeas bond posted by Bristol-
Myers and the Bank of the Philippine Islands for the balance of the judgment award.[16]
Bristol-Myers moved to quash the writ of execution contending that it timely filed a petition for
certiorari with the Court of Appeals. The appellate court gave due course to Bristol-Myers petition
and issued a temporary restraining order (TRO)[17] enjoining the enforcement of the writ of
execution and notices of garnishment. Upon the expiration of the TRO, the appellate court issued
a writ of preliminary injunction dated September 17, 2004.[18]
Bristol-Myers then moved to discharge and release the TRO cash bond. It argued that since it has
posted an injunction cash bond, the TRO cash bond should be legally discharged and released.
On January 28, 2005, the appellate court rendered the following Decision:
WHEREFORE, the petition is GRANTED. The Resolution of May 7, 2003 and the Order of
February 4, 2004 in NLRC NCR Case No. [00-03-02821-99] (NLRC NCR CA No. [031646-02]),
are REVERSED and SET ASIDE. The public respondent NLRCs Decision dated September 24,
2002 which reversed the Labor Arbiters decision and in effect sustained the legality of the private
respondents termination and the dismissal of his claim for the fair market value of the [Team
Share] stock option grant is REINSTATED and AFFIRMED, with MODIFICATION that the
petitioner shall pay the private respondent the monetary equivalent of his accrued and unused
combined sick/vacation leave plus ten (10%) percent thereof, as attorneys fees. The injunction
bond and the TRO bond previously posted by the petitioner are DISCHARGED.
SO ORDERED.[19]
The appellate court considered the misconduct as having been committed in connection with
Lagrosas duty as Territory Manager since it occurred immediately after the district meeting of
territory managers. It also held that the gravity and seriousness of the misconduct cannot be
denied. Lagrosas employed such a degree of violence that caused damage not only to Menquitos
car but also physical injuries to Lim and Menquito.
Lagrosas filed a motion for reconsideration which the appellate court denied.
In the meantime, Bristol-Myers moved to release the TRO cash bond and injunction cash bond in
view of the Decision dated January 28, 2005. On August 12, 2005, the appellate court denied the
motion as premature since the decision is not yet final and executory due to Lagrosas appeal to
this Court.[20]
Bristol-Myers filed a motion for reconsideration. On October 28, 2005, the appellate court
resolved:
WHEREFORE, the petitioners Motion [f]or Reconsideration dated September 6, 2005 is
PARTIALLY GRANTED and the Resolution of August 12, 2005 is RECONSIDERED and SET
ASIDE. The temporary restraining order cash bond in the amount of SIX HUNDRED THOUSAND
PESOS (P600,000.00) which was posted by the petitioners on July 19, 2004 is ordered
DISCHARGED and RELEASED to the petitioners.
SO ORDERED.[21]
The appellate court held that upon the expiration of the TRO, the cash bond intended for it also
expired. Thus, the discharge and release of the cash bond for the expired TRO is proper. But the
appellate court disallowed the discharge of the injunction cash bond since the writ of preliminary
injunction was issued pendente lite. Since there is a pending appeal with the Supreme Court, the
Decision dated January 28, 2005 is not yet final and executory.
Hence, the instant petitions.
In G.R. No. 168637, Lagrosas assigns the following errors:
I.
THE HONORABLE COURT OF APPEALS IN DECLARING THAT THE TERMINATION OF
EMPLOYMENT OF THE PETITIONER-APPELLANT WAS LEGAL HAD DECIDED A QUESTION
OF SUBSTANCE IN A WAY NOT IN ACCORD WITH THE LABOR LAWS AND
JURISPRUDENCE AND DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS, AS TO CALL FOR THE EXERCISE OF THIS HONORABLE
COURTS POWER OF REVIEW AND/OR SUPERVISION.
II.
THE HONORABLE COURT OF APPEALS IN IMPOSING THE PENALTY OF DISMISSAL, BEING
A PENALTY TOO HARSH IN THIS CASE, DECIDED A QUESTION OF SUBSTANCE IN A WAY
NOT IN ACCORD WITH THE LABOR LAWS AND JURISPRUDENCE AND DEPARTED FROM
THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS, AS TO CALL FOR THE
EXERCISE OF THIS HONORABLE COURTS POWER OF REVIEW AND/OR SUPERVISION.[22]
In G.R. No. 170684, Bristol-Myers raises the following issue:
[WHETHER OR NOT THE HONORABLE] COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DISALLOWING
THE RELEASE AND DISCHARGE OF PETITIONERS INJUNCTION BOND.[23]
Simply put, the basic issues in the instant petitions are: (1) Did the Court of Appeals err in finding
the dismissal of Lagrosas legal? and (2) Did the Court of Appeals err in disallowing the discharge
and release of the injunction cash bond?
On the first issue, serious misconduct as a valid cause for the dismissal of an employee is defined
simply as improper or wrong conduct. It is a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error of judgment. To be serious within the meaning and intendment of the law, the
misconduct must be of such grave and aggravated character and not merely trivial or unimportant.
However serious such misconduct, it must, nevertheless, be in connection with the employees
work to constitute just cause for his separation. The act complained of must be related to the
performance of the employees duties such as would show him to be unfit to continue working for
the employer.[24]
Thus, for misconduct or improper behavior to be a just cause for dismissal, it (a) must be serious;
(b) must relate to the performance of the employees duties; and (c) must show that the employee
has become unfit to continue working for the employer.[25]
Tested against the foregoing standards, it is clear that Lagrosas was not guilty of serious
misconduct. It may be that the injury sustained by Lim was serious since it rendered her
unconscious and caused her to suffer cerebral contusion that necessitated hospitalization for
several days. But we fail to see how such misconduct could be characterized as work-related and
reflective of Lagrosas unfitness to continue working for Bristol-Myers.
Although we have recognized that fighting within company premises may constitute serious
misconduct, we have also held that not every fight within company premises in which an employee
is involved would automatically warrant dismissal from service.[26] More so, in this case where the
incident occurred outside of company premises and office hours and not intentionally directed
against a co-employee, as hereafter explained.
First, the incident occurred outside of company premises and after office hours since the district
meeting of territory managers which Lim attended at McDonalds had long been finished.
McDonalds may be considered an extension of Bristol-Myers office and any business conducted
therein as within office hours, but the moment the district meeting was concluded, that ceased too.
When Lim dined with her friends, it was no longer part of the district meeting and considered
official time. Thus, when Lagrosas assaulted Lim and Menquito upon their return, it was no longer
within company premises and during office hours. Second, Bristol-Myers itself admitted that
Lagrosas intended to hit Menquito only. In the Memorandum[27] dated March 23, 2000, it was
stated that You got out from your car holding an umbrella steering wheel lock and proceeded to hit
Mr. Menquito. Dulce tried to intervene, but you accidentally hit her on the head, knocking her
unconscious.[28] Indeed, the misconduct was not directed against a co-employee who
unfortunately got hit in the process. Third, Lagrosas was not performing official work at the time of
the incident. He was not even a participant in the district meeting. Hence, we fail to see how his
action could have reflected his unfitness to continue working for Bristol-Myers.
In light of Bristol-Myers failure to adduce substantial evidence to prove that Lagrosas was guilty of
serious misconduct, it cannot use this ground to justify his dismissal. Thus, the dismissal of
Lagrosas employment was without factual and legal basis.
On the second issue, it is settled that the purpose of a preliminary injunction is to prevent
threatened or continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and adjudicated. Its sole aim is to preserve the status quo until the merits of the
case can be heard fully.[29]
A preliminary injunction may be granted only when, among other things, the applicant, not
explicitly exempted, files with the court where the action or proceeding is pending, a bond
executed to the party or person enjoined, in an amount to be fixed by the court, to the effect that
the applicant will pay such party or person all damages which he may sustain by reason of the
injunction or temporary restraining order if the court should finally decide that the applicant was not
entitled thereto. Upon approval of the requisite bond, a writ of preliminary injunction shall be
issued.[30]
The injunction bond is intended as a security for damages in case it is finally decided that the
injunction ought not to have been granted. Its principal purpose is to protect the enjoined party
against loss or damage by reason of the injunction, and the bond is usually conditioned
accordingly.[31]
In this case, the Court of Appeals issued the writ of preliminary injunction to enjoin the
implementation of the writ of execution and notices of garnishment pending final resolution of this
case or unless the [w]rit is sooner lifted by the Court.[32]
By its Decision dated January 28, 2005, the appellate court disposed of the case by granting
Bristol-Myers petition and reinstating the Decision dated September 24, 2002 of the NLRC which
dismissed the complaint for dismissal. It also ordered the discharge of the TRO cash bond and
injunction cash bond. Thus, both conditions of the writ of preliminary injunction were satisfied.
Notably, the appellate court ruled that Lagrosas had no right to the monetary awards granted by
the labor arbiter and the NLRC, and that the implementation of the writ of execution and notices of
garnishment was properly enjoined. This in effect amounted to a finding that Lagrosas did not
sustain any damage by reason of the injunction. To reiterate, the injunction bond is intended to
protect Lagrosas against loss or damage by reason of the injunction only. Contrary to Lagrosas
claim, it is not a security for the judgment award by the labor arbiter.[33]
Considering the foregoing, we hold that the appellate court erred in disallowing the discharge and
release of the injunction cash bond.
WHEREFORE, the two consolidated petitions are GRANTED. In G.R. No. 168637, filed by
Michael J. Lagrosas, the Decision dated January 28, 2005, and the Resolution dated June 23,
2005 of the Court of Appeals in CA-G.R. SP No. 83885 are REVERSED. The Resolution dated
May 7, 2003, and the Order dated February 4, 2004 of the NLRC in NLRC NCR Case No. 00-03-
02821-99 (NLRC NCR CA No. 031646-02) are REINSTATED and hereby AFFIRMED.
In G.R. No. 170684, filed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil., the Resolutions
dated August 12, 2005 and October 28, 2005 of the Court of Appeals in CA-G.R. SP No. 83885
are REVERSED. The injunction cash bond in the amount of SIX HUNDRED THOUSAND PESOS
(P600,000) which was posted by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil. on
September 17, 2004 is hereby ordered DISCHARGED and RELEASED to it.
No pronouncement as to costs.
SO ORDERED.