Change of theory

PETITIONER Duty-Free Philippines Services, Inc. (DFPSI) is a manpower agency that provides personnel to Duty Free Philippines (DFP).
On March 16, 1989, respondent Manolo Tria was employed by petitioner and was deployed to DFP as a warehouse supervisor. On Aug. 27, 1998, DFP found the respondent guilty of dishonesty for his direct participation in the fake condemnation and pilferage of the missing 1,020 Marlboro Pack of 5’s cigarettes and ordered his dismissal from the service for loss of trust and confidence.

Subsequently, respondent filed a complaint against petitioner for illegal dismissal and for payment of backwages, attorney’s fees and damages.

When petitioner DFPSI elevated the case to the Court of Appeals (CA), it denied for the first time the existence of employer-employee relationship and pointed to DFP as respondent’s real employer. The CA considered the defense barred by estoppel for its failure to raise it before the labor arbiter (LA) or the National Labor Relations Commission (NLRC). Did the CA err?

Ruling: No.

Only in DFPSI’s petition for certiorari before the CA did it impute liability on DFP as respondent’s direct employer and as the entity who conducted the investigation and initiated respondent’s termination proceedings.

Obviously, the petitioner changed its theory when it elevated the NLRC decision to the CA.

The appellate court, therefore, aptly refused to consider the new theory the petitioner offered in its petition. As the object of the pleadings is to draw the lines of battle, so to speak, between the litigants, and to indicate fairly the nature of the claims or defenses of both parties, a party cannot subsequently take a position contrary to, or inconsistent, with its pleadings.

It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view.

The review of labor cases is confined to questions of jurisdiction or grave abuse of discretion. The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions.

We cannot permit petitioner to change its theory on appeal. It would be unfair to the adverse party who would have no more opportunity to present further evidence, material to the new theory, which it could have done had it been aware earlier of the new theory before the LA and the NLRC. More so in this case as the supposed employer of respondent which is DFP was not and is not a party to the present case.

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It is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal.

Petitioner is bound by its submissions that respondent is its employee and it should not be permitted to change its theory. Such change of theory cannot be tolerated on appeal, not due to the strict application of procedural rules, but as a matter of fairness (Duty-Free Philippines Services, Inc. vs. Manolito Q. Tria, G.R. No. 174809, June 27, 2012)