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342 Phil. 352


[ G.R. No. 119868, July 28, 1997 ]




This special civil action for certiorari  under Rule 65 of the Rules of Court assails: (1) the decision[1] of 14 December 1994 of the National Labor Relations Commission (NLRC), Fourth Division, in NLRC Case No. V-0249-94 RAB 07-08-0655-93, which affirmed the decision[2] of 24 June 1994 of Labor Arbiter Ernesto F. Carreon in RAB-VII-08-0655-93; and (2) the NLRC Resolution of 3 April 1995,[3] denying herein petitioner's motion for reconsideration of the former.

Petitioner Philippine Airlines, Inc. (hereafter PAL) hired private respondent Dr. Jesus G. Ibarra (hereafter IBARRA) as a Flight Surgeon on 22 September 1983. Through a letter/Notice of Decision dated 12 July 1993 but received by IBARRA on 16 August 1993, PAL dismissed him for alleged misuse of the reduced rate travel privilege and for incurring absences without leave (AWOL) on 4 January 1993 and 1 and 2 February 1993.[4] More particularly, said letter of dismissal stated:
A Notice of Administrative Charge was issued against you, which notice you received last April 16, 1993.

You were given an opportunity to be heard at the clarificatory hearing held in the Office of the Personnel Manager -- Southern Philippines at the Mactan Airport last June 9, 1993.

Reviewing the testimonies and documentary evidence presented, we find the following:
You were absent without leave (AWOL) for three days. Records do not show any approved application for leave of absence or authority/clearance for sick leave when you were absent on January 4, 1993 and February 1 and 2, 1993. You claim that you were sick on January 4, 1993, however, there is no showing that you reported and was later on cleared for sick leave. On February 1 and 2, 1993, you cannot be considered to be on official business as you were in fact attending to your personal concerns. On February 3, 1993 though, you are not considered AWOL for having reported back to work.

We find you culpable of misuse of reduced rate travel privilege by allowing a certain Lyn Ibarra to use your daughter Teresita's travel benefit. There is no Lyn Ibarra among your listed dependents with our department.

While you vehemently deny such misuse to the extent of even denying knowing a Lyn Ibarra, such denial cannot overcome the positive identification made by Mr. Apolinario A. Cruz, Asst. Supervisor, Mactan Airport Ticket Office that Lyn Ibarra was your companion on flight PR841 (MNL-CEB) on January 4, 1993. Moreover, as per statement of Investigating Agent, Jaime Arturo L. Viola, you admitted to him that this Lyn Ibarra was your companion during subject flight. The affidavits you submitted to support your defense that it was your daughter Teresita who was with you at that time cannot be given credence considering that three were made by your relatives particularly Teresita and two (2) sons-in-law and the others by personnel of Philippine Air Force (where you were long-time connected with.)

The foregoing case is enough to warrant the termination of your services from the Company as the same constitutes fraud. We therefore do not find the necessity at this time to dwell on the other equally serious charge levelled against you. Our Security Department has in fact uncovered more irregularities principally your utilization of Company time and premises for private gain, timekeeping violations and further misuse of your dependents' travel privileges.

Be advised therefore that you are DISMISSED from the services of the Company in accordance with the Company's Code of Discipline effective immediately upon receipt of this notice.



Director - - Medical

As a result, on 17 August 1993, IBARRA filed with the Regional Arbitration Branch VII of the NLRC in Cebu City a complaint[5] for illegal dismissal, non-payment of 13th month pay, service incentive leave, allowances, separation pay, back wages, moral damages and attorney's fees against PAL.

In his Position Paper,[6] IBARRA argued that his dismissal on the charges that he went AWOL for three days on the said dates in question and that he misused the reduced rate travel privilege were without basis. He asserted that he had an authority/clearance for his sick leave on 4 January 1993 as shown by PAL Form No. F-0035 duly signed and approved by the Chief of Mactan Medical Services, Dr. Manolo Espedido.[7] As to his absences on 1 & 2 February 1993, Dr. Ibarra claimed these were due to official business as shown by PAL Form No. F-00214 duly signed and approved by Dr. Manolo Espedido.[8]

IBARRA likewise denied petitioner's charge that he misused the reduced rate travel privilege by allowing a certain Lyn Dizon, his alleged live-in partner, to use the travel benefits of his daughter, Teresita Ibarra- Villarin. He maintained that it was his daughter who accompanied him on Flight PR841 from Manila to Cebu on 4 January 1993 as established by the affidavits of Victoriano Casul of the MCIAA Intelligence I.D. and Pass Control Division, Mamerta Jamila of the Air Intelligence Reconnaissance Division of the Philippine Air Force (PAF), Sgt. Rogelio Ybañez of the Philippine Air Force, IBARRA’s sons-in-law, Ramon Abundo, and Glicerio Villarin, and IBARRA’s daughter, Teresita Ibarra-Villarin.[9]

Petitioner, on the other hand, asserted that IBARRA was dismissed "for just cause after due process" and was therefore not entitled to the various claims listed in his complaint.[10]

The Labor Arbiter then conducted hearings on the case with the parties presenting their witnesses.[11]

On 24 June 1994, the Labor Arbiter rendered his decision[12] in favor of private respondent, the dispositive portion of which reads as follows:
WHEREFORE. premises considered, judgment is hereby rendered ordering the respondent Philippine Airlines, Inc. to reinstate the complainant to his former position or equal position without loss of seniority rights and benefits and to pay him the following:
Backwages ----------------P164,266.64

Attorney's Fees------------- 16,426.66

Total                                  P180,693.30

The other claims are dismissed for lack of merit.


The back wages were computed “from August 16, 1993 until the date of the decision on the basis of the last salary rate of the complainant.”

The Labor Arbiter gave more weight to IBARRA’s arguments, finding them to be amply supported by convincing evidence. He likewise concluded that IBARRA could not be held liable for incurring absences without leave on the pertinent dates as these absences were authorized by Dr. Espedido, his immediate superior, who admitted giving permission to private respondent for his sick leave and leave for official business. As to Dr. Espedido's alleged lack of authority to grant such leave, the Labor Arbiter resolved that:
Inspite of the submission of the respondent that Dr. Manolo Espedido was not authorized to grant the leave yet, We still find that the authority of the good Doctor for the complainant to make the absences still stand[s] as [a] shield which protects him from the charge of AWOL because the said authority was the one that impelled him to be absent.

Withal, it strained Our imagination why Dr. Manolo Espedido who had been in the service of the respondent for quite a time would grant authority to the complainant to make absences if he was not empowered to do so.

In any case, We hold that the complainant utmost was in good faith in absenting himself therefore should not be meted a penalty of dismissal because of such misdeed if at all it is one.[13]
As to PAL’s claim of IBARRA's misuse of the reduced rate travel privilege, the Labor Arbiter gave more weight to the version of IBARRA, thus:
The complainant had presented witnesses who convincingly testified that he was with his daughter Teresita Ibarra Villarin when he got off from flight PR 841 on January 4, 1993. Inspite of the extensive cross-examination made by the respondent's counsel, the said witnesses never wavered and sticked [sic] to their testimonies that what they saw with the complainant at the airport in the afternoon of January 4, 1993 was the latter's daughter and not Lyn Dizon as what respondent would impress upon Us.[14]
In so doing, the Labor Arbiter discredited the declaration of Apolinario Cruz, Jr., PAL's former assistant supervisor at the Mactan Airport ticket office, as Cruz had "an ax to grind against the complainant whom he (Apolinario Cruz, Jr.) [thought] was fooling around with his wife who was a nurse under the complainant.[15] "

PAL appealed from the decision to the NLRC and invoked the following grounds in support thereof:
1) The Labor Arbiter acted with grave abuse of discretion by deciding the case only on the basis of conjectures and presumptions and completely disregarding and ignoring the facts established by evidence.

2) The Labor Arbiter committed serious error and grave abuse of discretion in ordering the reinstatement of complainant-appellee with back wages and attorney's fees despite the fact that the evidence presented shows valid causes for his dismissal.[16]
On 14 December 1994, the NLRC rendered its decision[17] the dispositive portion reading:
WHEREFORE, the appeal is hereby DISMISSED and the decision of the Labor Arbiter is hereby AFFIRMED.
The NLRC conducted a thorough evaluation of the evidence as presented to arrive at its conclusion that IBARRA’s dismissal was illegal.

As to IBARRA’s leave, the NLRC quoted portions of the testimony of Dr. Manolo Espedido’s, PAL’s witness, then concluded:
From the foregoing, it is evident that the approved leave of complainant was final. It was not his fault that the form used was somehow different from what should have been used. It was the fault of respondent PAL acting through its Chief Medical Services at PAL Mactan Station, when it allowed the use of a different form for O.B. in the case of complainant who is a Doctor of Medicine.
The NLRC also carefully assayed the evidence of PAL on the charge of misuse of the reduced rate travel privilege, thus:
With respect to the charge of misuse of reduced rate travel privilege (company trip pass), respondents relied on the testimonies of (1) Dr. Manolo S. Espedido, complainant’s immediate superior at the Mactan Medical Clinic, (2) Mr. Apolinario A. Cruz, Assistant Supervisor, Mactan Airport Station Office; and Jaime L. Viola, Investigating Agent, Security and Travel Sub-Department. (see p. 9 Respondents' Position Paper, p. 74, rollo).

In his affidavit (p. 94 rollo), Dr. Espedido deposed and stated that he is the Chief Medical Services, PAL Mactan Station and Dr. Ibarra (complainant) was under his administrative supervision; that Dr. Ibarra filed for a trip pass and reduced rates application on 8 December 1992 for his daughter, Teresita Ibarra for CEBU-MLA.-CEBU routing which he approved for which a flight coupon was consequently issued; and that he does not remember having issued any vacation leave, sick leave and official leave on any other written permission for Dr. Ibarra to officially proceed to Manila on January 4 and February 1 to 3, 1993.

But the testimony of Dr. Espedido on January 22, 1994, shows otherwise, thus:


I will ask the question.

Q     You admitted that you signed this authorization to leave company premises on official business. What is the significance of your signature in this particular authorization?


A     Well, as stated, that is how it means.


Q     Do you mean that you approved this leave?


A     That’s correct, but then there is a system involved, PAL is highly centralized organization, not all that I approved in my level is final within Manila. I mean, Manila has the final say.

On the part of Mr. Apolinario A. Cruz, a disposition upon oral examination was taken at the Philippine Consulate General, Toronto, Ontario, Canada on 18 April 1994 by consul Ruth Morales Prada (see pp. 213-215 Rollo). In his said Deposition (pp. 226-229 Rollo), Mr. Cruz simply reiterated what he stated in a Sworn Statement (pp. 220-221, rollo) which he executed before Notary Public, Francisco M. Senerpida, on September 30, 1993, at Lapulapu City.

In said Sworn Statement, Mr. Cruz deposed that, on 23 November 1992, he reported to the SVP-Sales that Dr. Ibarra (complainant) and one of his dependents took the PR 848 flight on 20 December 1992 without bothering to cancel their confirmed seats on two other flights; that when he made said report, he did not know yet who was travelling with complainant in said flight to Manila but reported that it was not complainant’s daughter who was travelling with him because none of his immediate relatives lives with him in Cebu but that some of them live in Manila; that he personally retrieved from the computer the bookings for PR 848/20 December 1992/CEB-MNL-CEB and he saw that complainant was travelling with a certain Teresita Ibarra; that knowing that complainant had no relatives based in Cebu, he deduced that it was complainant’s live-in-partner, Lyn, who was travelling with him, so he waited for his return flight which was PR 841/04 January 1993; that he wrote a confidential letter to one Mr. Zapanta on December 23, 1993, because he wanted them to be the ones to catch complainant misusing PAL’s travel privileges, but due to the holidays, it was not acted upon; that when he checked complainant’s bookings for flight PR 841/04 January 1993/MNL-CEB, he found that complainant’s daughter Teresita and complainant had a return booking for said flight PR 841/04 January 1993/MNL-CEB; that with an office mate, Mr. Cruz went to the departure area of the airport a few minutes before arrival of flight PR 841 and when the passengers were getting off the aircraft, he found out that it was Lyn that was travelling with complainant; that he saw Lyn with complainant walking towards the arrival area; that he was 30 meters away from the parked plane and he saw Lyn and complainant about 10 meters to his right; that Lyn was not among those listed in the manifest, but Teresita was.

The testimony of Mr. Cruz pictures a person motivated by an intense desire to nail the complainant on perceived irregularities. As an Airport Ticket Supervisor, Mr. Cruz acted clearly out of his assigned official duties. Even his Sworn Statement does not, in any manner, show that it was Lyn Dizon, alleged live-in partner of complainant, who was travelling with complainant in flight PR 841/04 January 1993 MNL-CEB. First, Mr. Cruz was at the departure area, NOT at the arrival area or below the ramp of the parked plane; second, he admittedly saw complaint and Lyn walking about 10 meters to his side; third, he did not actually see complainant and Lyn deplane from the aircraft for flight PR 841/04 January 1993/MNL-CEB; fourth, the passenger manifest indicated that Lyn was not a passenger in PR 841; but it was complainant’s daughter, Teresita, who was listed as passenger in said flight PR 841; and, fifth, he did not state that he did not see complainant’s daughter, Teresita, among the passengers who actually deplaned from the aircraft used for PR 841;.

In the case of Mr. Jaime Arturo L. Viola, he testified on January 20, 1994, that he is employed as investigating agent of the Security and Fraud Prevention Sub-Department of PAL, some of whose functions are to investigate irregularities and anomalies committed by PAL employees, including misuse of travel benefits and other violations of the Labor Code of the PAL employees; (p. 6, TSN Jan. 20, 1994, p. 335 rollo); that he executed an affidavit on September 30, 1993, and affirmed the contends thereof. (p. 8, TSN, Jan. 20, 1994, p. 337 Rollo); that complainant was investigated by him upon complaint of Mr. Apolinario Cruz who charged complainant of misuse of travel benefit, and absence without official leave. (p. 24, TSN, Jan. 20, 1994, p. 353 Rollo); that he met the complainant for he first time on February 02, 1993 in the afternoon in the airport (p. 47, TSN, January 20, 1994, p. 376, Rollo).

In his affidavit (p. 91-92 Rollo), Mr. Viola did not show anything to prove the charges of absences without official leave and misuse of reduced rate travel privilege. Practically, said affidavit contained hearsay evidence concerning alleged admissions of complainant that he travelled with Lyn Dizon, not his daughter, Teresita, on January 4, 1993 and that Lyn Dizon was his live-in partner. There is nothing in said affidavit to show substantial evidence of the commission by complainant of the acts which led to the charges against him.
Conversely, the NLRC found the witnesses for IBARRA convincing in their positive identification of IBARRA and his daughter upon their arrival at the Mactan International Airport. The NLRC thus ruled that their testimonies left no doubt that it was Teresita Ibarra-Villarin, not Lyn Dizon, who was with IBARRA when he arrived at Mactan from Manila on 4 January 1993.

PAL’s motion for reconsideration was denied by the NLRC in its resolution of 3 April 1995.[18]

Hence, this instant petition where PAL asserts, at bottom, that it proferred "more than enough substantial evidence proving just cause for private respondent's dismissal."

We required respondents to comment on the petition.

Private respondent in his comment contends that petitioner merely reiterated its arguments presented before the Labor Arbiter and the NLRC.

In its Manifestation and Motion in lieu of Comment, the Office of the Solicitor General took petitioner's side, asserting that IBARRA's dismissal was valid, as there was substantial basis to support his dismissal on the testimonies of Apolinario Cruz and Jaime Viola; and that petitioner had satisfied the twin requirements of notice and hearing for a valid dismissal. It then prayed that the NLRC be required to file its own comment.

In its comment, the NLRC affirms its challenged resolution and states that petitioner relies on factual issues which have already been exhaustively taken up in the proceedings below. It denies having committed grave abuse of discretion in deciding said case and asserts that its decision is fully supported by substantial evidence.

We resolved to give due course to the petition and required the parties to submit their respective memoranda, which PAL and IBARRA complied with. The NLRC did not file its Memorandum, while the Office of the Solicitor General reiterated its earlier comment.

This petition is without merit.

It is basic that a special civil action for certiorari is limited to questions of jurisdiction or grave abuse of discretion.[19] Accordingly, findings of fact of quasi-judicial bodies (such as the NLRC) are generally accorded not only respect, but even finality, and bind this court when supported by substantial evidence, mainly because the former administrative agencies have acquired the requisite expertise, their jurisdiction being confined to specific matters.[20]

In this case, PAL’s assignment of errors focus chiefly on the evaluation of its evidence by the Labor Arbiter and the NLRC. We find no cogent reason to modify, much less, reverse this evaluation as our scrutiny of the evidence yields the same result.

It is settled that in termination cases, the burden of proving just cause for dismissing an employee rests upon the employer, and the latter’s failure to discharge this burden results in a finding that the dismissal is unjustified.[21] The position taken by the OSG that the quantum of proof required in such cases is only substantial proof, and not clear and convincing evidence,[22] is equally true, which leads us then to define substantial evidence. Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.[23]

The crux of the matter, therefore, is whether PAL discharged its burden of presenting substantial proof to warrant IBARRA’s dismissal.

As to the charge of incurring absences without official leave, we find the same to be of little value in determining the validity of IBARRA's termination. Clearly, the magnitude of this alleged infraction, as petitioner makes it out to be, does not warrant the corresponding penalty of dismissal. Furthermore, both the Labor Arbiter and the NLRC found that IBARRA did not go AWOL since these absences were supported by leave forms and were with the permission of Dr. Espedido, IBARRA'S immediate superior.

We now turn our attention to the evidence presented by PAL with respect to its charge of misuse of the reduced travel rate by IBARRA, as this carries the penalty of dismissal.

We agree with the finding of the Labor Arbiter and the NLRC that the testimony of Mr. Apolinario Cruz can not be characterized as constituting substantial evidence sufficient to warrant IBARRA’s dismissal, mainly because a close reading of such testimony reveals that it consists mostly of mere suspicions of Mr. Cruz. Mr. Cruz himself admitted, however, that he was not on friendly terms with IBARRA as the latter had been allegedly harassing his wife, thus Mr. Cruz "kept his eyes open for any violation that IBARRA might commit."[24] This supports the finding of the NLRC that Mr. Cruz was motivated by an intense desire to pin perceived irregularities on IBARRA and his alleged live-in-partner, thereby tarnishing his credibility and objectivity as a witness.

We note even further that in the 17 June 1993 memorandum[25] issued by PAL's legal officers regarding the charges against IBARRA, Mr. Cruz allegedly asked an officemate of his, a certain Mr. Gadiongco, "to wait with him [Mr. Cruz] for the arrival of PR 841 on January 4, 1993." What is telling for PAL is that Mr. Gadiongco had no idea who the companion of IBARRA was, as all he could do, according to this memorandum, was to give a general description of that person and it was even Mr. Cruz who informed Mr. Gadiongco that this person was allegedly IBARRA's live-in-partner. Then, what is even more telling is the absence of Mr. Gadiongco's account from the record of this case, as he was not presented before the Labor Arbiter during the hearing. This only serves to emphasize the weakness of PAL’s basis for dismissing IBARRA, which pales even further in light of the positive testimony of IBARRA’s daughter that she was the one who accompanied her father on that flight, which was confirmed by several other witnesses.

As regards Mr. Viola’s affidavit and transcript of his testimony before the Labor Arbiter, these disclose that save for the admissions allegedly made by IBARRA to Mr. Viola, which IBARRA has vehemently and consistently denied, Mr. Viola did not furnish any other evidence supportive of PAL's cause; neither did his testimony convince the Labor Arbiter or the NLRC. Mr. Viola stated that it was highly suspicious and illogical that all the dependents of IBARRA had CEB-MNL-CEB routings when they were not residents of Cebu. However, upon cross-examination, he admitted that IBARRA’s dependents were not disqualified to avail of such routings even if none of them were Cebu residents.

It is then apparent that PAL’s evidence against IBARRA was inadequate to discharge its burden and incapable of outweighing the finding that no legal basis existed to terminate his employment. All told, PAL failed to prove the existence of cause, just or otherwise, to validly dismiss IBARRA.

Both the Labor Arbiter and the NLRC thus committed no error in declaring IBARRA's dismissal illegal and ordering PAL to reinstate IBARRA and pay him full back wages and attorney’s fees. There is, however, an error in the computation of the back wages since the award extended only “until the date of the decision.”

Before the advent of R.A. No. 6715, recovery of back wages was limited to three years, without further qualification or deduction; this was subsequently known as the Mercury Drug rule.[26] However, in Ferrer v. NLRC[27]in conjunction with Pines City Educational Center v. NLRC,[28] this Court abandoned the Mercury Drug rule and restored the prior doctrine (Itogon-Suyoc Mines, Inc. v. Sañgilo-Itogon Worker’s Union, 24 SCRA 873, 887 [1968]) allowing recovery of back wages for the duration of illegal dismissal, less the total amount derived from employment elsewhere by the employee from the date of dismissal up to the date of reinstatement, if any. However, in the en banc resolution of 28 November 1996 in Bustamante v. NLRC (G.R. No. 111651), this Court abandoned the holding in Pines City Educational Center and allowed full recovery of back wages pursuant to the express provisions of Article 279 of the Labor Code, i.e., without any deduction of income the employee may have derived from employment elsewhere from the date of his dismissal up to his reinstatement. This is the current state of case law.[29]

Considering, however, that IBARRA did not appeal from the decisions of the Labor Arbiter and the NLRC, the decision of the former, as affirmed by the latter, has become final as to him.

WHEREFORE, the instant petition is hereby DISMISSED and the challenged decision of public respondent National Labor Relations Commission of 14 December 1994 in NLRC NCR Case No. V-0249-94 (RAB 07-08-0655-93) is hereby AFFIRMED.

Costs against petitioner.

Melo, Francisco, and Panganiban, JJ., concur.
Narvasa, C.J., (Chairman), on leave.

[1] Original Record (OR), 681-694, Per Commissioner Amorito V. Cañete with Commissioners IreneaE.Ceniza and Bernabe Batuhan concurring; Annex "B" of Petition; Rollo, 65-78.

[2] Id., 261-271; Annex "A" of Petition; Id., 58-64.

[3] Id., 740-741; Annex "C" of Petition; Id., 79-80.

[4] OR, 34-35.

[5] OR, 1.

[6] Id., 21-31.

[7] Id., 36.

[8] Id.

[9] Id., 37-42.

[10] Id., 72-82.

[11] Id., 280-493.

[12] Supra note 2.

[13] OR, 264.

[14] Id., 265.

[15] Ibid.

[16] Id., 497.

[17] Supra note 1.

[18] Supra note 3.

[19] Sta. Fe Consruction Co. v. National Labor Relations Commission, 230 SCRA 593 [1994].

[20] See Sunset View Condominium Corporation v. National Labor Relations Commission, 228 SCRA 466, 470 [1993]; Five J Taxi v. National Labor Relations Commission, 235 SCRA 556, 560 [1994]; Sebuguero v. National Labor Relations Commission, 248 SCRA 532, 544 [1995]; Metro Transit Organization, Inc. v. National Labor Relations Commission, G.R. No. 121574, 17 October 1996, at 4.

[21] Dela Cruz v. National Labor Relations Commission, G.R. No. 119536, 17 February 1997, at 6.

[22] Rollo, 236, citing Manalo v. Roldan-Confessor, 219 SCRA 808 and In Re: Letter to Mrs. Maria Coronel, 238 SCRA 618.

[23] Madlos v. National Labor Relations Commission, 254 SCRA 248, 257 [1996].

[24] 17 June 1993 Memorandum to Atty. Khan on the Administrative Charges against Dr. Ibarra, OR, 98-99.

[25] Ibid.

[26] See Mercury Drug Co. v. CIR, 56 SCRA 694, 712 [1974]; Lepanto Consolidated Mining Co. v. Olegario, 162 SCRA 512, 516 [1988]; Hernandez v. NLRC, 176 SCRA 269, 276 [1989]; St. Louis College of Tuguegarao v. NLRC, 177 SCRA 151, 157 [1989]; Torillo v. Leogardo, 197 SCRA 471, 479 [1991]; Arms Taxi v. NLRC, 219 SCRA 707, 713 [1993]; JAM Transportation Co. Inc. v. Flores, 220 SCRA 115, 123 [1993]; Philippine Airlines Inc. v. NLRC, 223 SCRA 463, 468 [1993].

[27] 224 SCRA 410 [1993].

[28] 227 SCRA 655 [1993].

[29] See Reformist Union of R.B. Liner Inc. v. NLRC, G.R. No. 120482, 27 January 1997, at 9; De la Cruz v. NLRC, G.R. No. 119536, 17 February 1997, at 7.

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