Case Digest: MERCURY GROUP OF COMPANIES, INC. v. HOME DEVELOPMENT MUTUAL FUND 541 SCRA 211 (2007)

MERCURY GROUP OF COMPANIES, INC. v. HOME DEVELOPMENT MUTUAL FUND 541 SCRA 211 (2007)

P.D. No. 1752, the ―Home Development Mutual Fund Law of 1980 created the Pag-IBIG Fund System. Under P.D. No. 1752, coverage of the Pag-IBIG Fund is mandatory for all employees covered by the SSS and the GSIS and their employers. The law provides, however, for a waiver or suspension from coverage or participation in the Fund. Upon the effectivity of the law in 1980 up to 1995, Mercury and its subsidiaries were, on their application, annually granted waiver from coverage of the Fund because their Retirement or Provident Plan was superior to it. In 1995, the Board of Trustees of Home Development Mutual Fund (HDMF), issued Amendment to the Rules and Regulations Implementing R.A. No. 7742. Under the Amendment and the Guidelines, an employer with a provident/retirement and housing plan superior to that provided under the Pag-IBIG Fund is entitled to execution/waiver from Fund coverage. In 1996, HDMF had once again amended the Rules and Regulations Implementing P.D. No. 1752, as amended, this time limiting waiver from Fund coverage only to ―distressed employers. Mercury filed a petition for certiorari and prohibition with the Regional Trial Court of Quezon City to declare null and void the 1996 amendment to the Rules and Regulations Implementing P.D. No. 1752, as amended. By Order, RTC dismissed Mercury‘s petition for certiorari on the ground that it failed to exhaust administrative remedies, and that HDMF‘s questioned amendment of the implementing rules was made in the exercise of its legislative/administrative, not judicial, function. The Court of Appeals, by Decision, granted in part Mercury‘s petition for certiorari, prohibition and mandamus. The denial of the appeallate court of Mercury‘s waiver from coverage was based on the law of the case doctrine.

ISSUE:

Whether or not the Court of Appeals erred in applying the law of the case doctrine.

HELD: 

In affirming HDMF‘s denial of Mercury‘s request for waiver from Fund coverage for the year 1996, the appellate court harped on the law of the case doctrine. Thus it held that Mercury‘s application anew for waiver/exemption from Fund coverage is anchored on the decision of the Supreme Court in the China Bank case which declared as null and void Section 1 of Rule VII of the Amendments to the RRI of R.A. No. 7742, and HDMF Circular No. 124-B prescribing the Revised Guidelines and Procedure for Filing Applications for Waiver or Suspension of Fund coverage under P.D. No. 1752, as amended by R.A. No. 7742. It is in this view that Mercury contends that HDMF should have considered its application for waiver/exemption from the coverage of the Fund. On the other hand, HDMF invoked the doctrine of the law of the case pursuant to the decision of the Supreme Court in G.R. No. 132416 in denying Mercury‘s application for waiver/exemption from the Fund coverage. The doctrine of the law of the case does not apply to the present case vis a vis the decision of this Court in G.R. No. 132416. The present case is not a subsequent proceeding of the same case – G.R. No. 132416. This is an entirely new one which was commenced by Mercury‘s filing of an original petition for certiorari, prohibition, and mandamus before the Court of Appeals against HDMF. Even assuming arguendo that the present proceeding may be considered a subsequent proceeding of G.R. No. 132416, the doctrine of the law of the case just the same does not apply because the said case was not resolved on the merits. The Order of this Court denying Mercury‘s petition for review in G.R. No. 132416 found no reversible error in the Order of the RTC dismissing Mercury‘s case primarily on a procedural ground – failure to exhaust administrative remedies. At all events, the doctrine ―is merely a rule of procedure and does not go to the power of the court, and will not be adhered to where its application will result in an unjust decision. To sustain HDMF‘s refusal to grant a waiver of Fund coverage to Mercury on the basis of amendments to implementing rules which had priorly been declared null and void by this Court would certainly be unjust. In fine, the doctrine of the law of the case cannot be made to apply to the case at bar, hence, Mercury‘s application for waiver from Fund coverage for the year 1996 must be processed by HDMF.