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ADMINISTRATIVE LAW

De Leon

Assignment #1

1. Define Admin Law(5 legal scholars)WIDEST SENSE entire system of laws under which the machinery of the

State works and by which the State performs all government acts.

Embrace all the laws that regulate or control the administrative

organization and operations of the government including the legislative

and judicial branches.

VERY BROAD the law which controls or is intended to control the

administrative operations of the government or the law of governmental

administration.

LESS COMPREHENSIVE part of public law which fixes the organization

and determines the competence of the administrative authorities, and

indicates to the individual, remedies for the violation of his rights.

NARROWER OR MORE LIMITED:

o Branch of modern law under which the executive department of

government acting in quasi-legislative or quasi-judicial capacity,

interferes with the conduct of the individual for the purpose of

promoting the well-being of the community, as under laws

regulating public corporations, business affected with a public

interest, professions, trades and calling, rates and prices, laws

for the protection of the public health and safety and the

promotion of the public convenience and advantage.

o System of legal principles to settle the conflicting claims of

executive and administrative authority on the one hand of the

individual or private rights on the other.

o Law concerning the powers and procedures of administrative

agencies including specially the law governing judicial review of

administrative action.

GENERALLY part of the law which governs the organization, functions,

and procedures of administrative agencies of the government to which

(quasi)legislative powers are delegated and judicial powers are granted,

and the extent and manner to which such agencies are subject to control

by the courts.

2. 5 elementsa. Iron Steel v. CA

Iron and Steel Authority (ISA) v. Court of Appeals, 249 SCRA

538

FACTS:Petitioner ISA was created by PD No. 272 in order, generally, to

develop and promote the iron and steel industry.

PD No. 272 initially created ISA for a term of 5 years counting from August

9, 1973. When ISAs original term expired on October 10, 1978, its term

was extended for another 10 years by EO No. 555 dated August 31,

1979.

The National Steel Corporation (NSC) then a wholly owned subsidiary of the

National Development Corporation which is itself an entity wholly owned by

the National Government, embarked on an expansion program embracing,among other things, the construction of an integrated steel mill in Iligan

City. The construction of such steel mill was considered a priority and

major industrial project of the government. Pursuant to the expansion

program of the NSC, Proclamation No. 2239 was issued by the President of

the Philippines on November 16, 1982 withdrawing from sale or settlement

a large tract of public land located in Iligan City, and reserving that land for

the use and immediate occupancy of NSC.

Since certain portions of the aforesaid public land were occupied by a non-

operational chemical fertilizer plant and related facilities owned by Maria

Cristina Fertilizer Corporation (MCFC), LOI No. 1277, also dated November

16, 1982, was issued directing the NSC to negotiate with the owners of

MCFC, for and on behalf of the Government, for the compensation of

MCFCs present occupancy rights on the subject land.

Negotiations between NSC and MCFC failed.

ISSUE:WON the Government is entitled to be substituted for ISA in view

of the expiration of ISAs term.

RULING:Yes

Clearly, ISA was vested with some of the powers or attributed normally

associated with juridical personality. There is, however, no provision in PD

No. 272 recognizing ISA as possessing general or comprehensive juridical

personality separate and distinct from that of the government. The ISA in

fact appears to the Court to be a non-incorporated agency orinstrumentality of the RP, or more precisely of the Government of the

Philippines. It is common knowledge that other agencies or

instrumentalities of the Government of the Republic are cast in corporate

form, that is to say, are incorporated agencies or instrumentalities,

sometimes with and at other times without capital stock, and accordingly

vested with a juridical personality distinct from the personality of the

Republic.

We consider that the ISA is properly regarded as an agent or delegate of

the RP. The Republic itself is a body corporate and juridical person vested

with the full panoply of powers and attributes which are compendiously

described as legal personality.

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When the statutory term of non-incorporated agency expires, the powers,

duties and functions as well as the assets and liabilities of that agency

revert back to, and are reassumed by the RP, in the absence of special

provisions of law specifying some other disposition thereof,e.g., devolution

or transmission of such powers, duties and functions, etc. to some other

identified successor agency or instrumentality of the RP.

When the expiring agency is an incorporated one, the consequence of suchexpiry must be looked for, in the first instance, in the charters and, by way

of supplementation, the provisions of the Corporation Code. Since in the

instant case, ISA is a non-incorporated agency or instrumentality of the

Republic, its powers, duties and functions, assets and liabilities are properly

regarded as folded back into the Government and hence assumed once

again by the Republic, no special statutory provision having been shown to

have mandated succession thereto by some other entity or agency of the

Republic.

In the instant case, ISA substituted the expropriation proceedings in its

capacity as an agent or delegate or representative of the Republic of the

Philippines pursuant to its authority under PD 272.

The principal or the real party in interest is thus the Republic of the

Philippines and not the NSC, even though the latter may be an ultimateuser of the properties involved.

From the foregoing premises, it follows that the Republic is entitled to be

substituted in the expropriation proceedings in lieu of ISA, the statutory

term of ISA having expired. Put a little differently, the expiration of ISAs

statutory term did not by itself require or justify the dismissal of the

eminent domain proceedings.

b.

Luzon Development Bank v. Luzon Employees

LUZON DEVELOPMENT BANK vs. ASSO. OF LDB EMPLOYEES and

GARCIA

October 6, 1995

FACTS: From a submission agreement of the LDB and the Association of

Luzon Development Bank Employees (ALDBE) arose an arbitration case toresolve the following issue:

Whether or not the company has violated the CBA provision and the MOA

on promotion.

At a conference, the parties agreed on the submission of their respective

Position Papers. Atty. Garcia, in her capacity as Voluntary Arbitrator,received ALDBEs Position Paper ; LDB, on the other hand, failed to submit

its Position Paper despite a letter from the Voluntary Arbitrator reminding

them to do so. As of May 23, 1995 no Position Paper had been filed byLDB.

Without LDBs Position Paper, the Voluntary Arbitrator rendered a decision

disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the

CBA provision nor the MOA on promotion.

Hence, this petition for certiorari and prohibition seeking to set aside the

decision of the Voluntary Arbitrator and to prohibit her from enforcing the

same.

ISSUE:WON a voluntary arbiters decision is appealable to the CA and not

the SC

HELD: The Court resolved to REFER this case to the Court of Appeals.

YES. The jurisdiction conferred by law on a voluntary arbitrator or a panel

of such arbitrators is quite limited compared to the original jurisdiction of

the labor arbiter and the appellate jurisdiction of the NLRC for that matter.

The (d)ecision, awards, or orders of the Labor Arbiter are final and

executory unless appealed tothe Commission Hence, while there is

an express mode of appeal from the decision of a labor arbiter, Republic

Act No. 6715 is silent with respect to an appeal from the decision of a

voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator

is, more often than not, elevated to the SC itself on a petition for

certiorari, in effect equating the voluntary arbitrator with the NLRC or theCA. In the view of the Court, this is illogical and imposes an unnecessary

burden upon it.

In Volkschel Labor Union, et al. v. NLRC, et al., 8on the settled premise

that the judgments of courts and awards of quasi-judicial

agenciesmust become final at some definite time, this Court ruled that

the awards of voluntary arbitrators determine the rights of parties; hence,

their decisions have the same legal effect as judgments of a court. In

Oceanic Bic Division (FFW),et al. v. Romero,et al.,this Court ruled that a

voluntary arbitrator by the nature of her functions acts in a quasi-judicial

capacity. Under these rulings, it follows that the voluntary arbitrator,

whether acting solely or in a panel, enjoys in law the status of a quasi-

judicial agency but independent of, and apart from, the NLRC since his

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decisions are not appealable to the latter.

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides

that the Court of Appeals shall exercise:

(B) Exclusive appellate jurisdiction over all final judgments, decisions,

resolutions, orders or awards of RTC s and quasi-judicial agencies,instrumental ities, boards or commissions, including the Securities and

Exchange Commission, the Employees Compensation Commission and the

Civil Service Commission, except those falling within the appellate

jurisdiction of the Supreme Court in accordance with the Constitution, the

Labor Code of the Philippines under Presidential Decree No. 442, as

amended, the provisions of this Act, and of subparagraph (1) of the third

paragraph and subparagraph (4) of the fourth paragraph of Section 17 of

the Judiciary Act of 1948.

Assuming arguendo that the voluntary arbitrator or the panel of voluntary

arbitrators may not strictly be considered as a quasi-judicial agency, board

or commission, still both he and the panel are comprehended within the

concept of a quasi-judicial instrumentality.

An instrumentality is anything used as a means or agency. Thus, the

terms governmental agency or instrumentality are synonymous in the

sense that either of them is a means by which a government acts, or by

which a certain government act or function is performed. The word

instrumentality, with respect to a state, contemplates an authority to

which the state delegates governmental power for the performance of a

state function.An individual person, like an administrator or executor, is a

judicial instrumentality in the settling of an estate, in the same manner that

a sub-agent appointed by a bankruptcy court is an instrumentality of the

court, and a trustee in bankruptcy of a defunct corporation is an

instrumentality of the state.

The voluntary arbitrator no less performs a state function pursuant to a

governmental power delegated to him under the provisions therefor in the

Labor Code and he falls, therefore, within the contemplation of the term

instrumentality in the aforequoted Sec. 9 of B.P. 129. The fact that his

functions and powers are provided for in the Labor Code does not place

him within the exceptions to said Sec. 9 since he is a quasi-judicial

instrumentality as contemplated therein.

It will be noted that, although the Employees Compensation Commission is

also provided for in the Labor Code, Circular No. 1-91, which is the

forerunner of the present Revised Administrative Circular No. 1-95, laid

down the procedure for the appealability of its decisions to the CA under

the foregoing rationalization, and this was later adopted by Republic Act

No. 7902 in amending Sec. 9 of B.P. 129. A fortiori, the decision or award

of the voluntary arbitrator or panel of arbitrators should likewise be

appealable to the CA, in line with the procedure outlined in Revised

Administrative Circular No. 1-95, just like those of the quasi-judicial

agencies, boards and commissions enumerated therein.

In the same vein, it is worth mentioning that under Section 22 of Republic

Act No. 876, also known as the Arbitration Law, arbitration is deemed a

special proceeding of which the court specified in the contract or

submission, or i f none be specified, the RTC for the province or city in

which one of the parties resides or is doing business, or in which the

arbitration is held, shall have jurisdiction.

In effect, this equates the award or decision of the voluntary arbitrator

with that of the RTC. Consequently, in a petition for certiorari from that

award or decision, the CA must be deemed to have concurrent jurisdiction

with the SC. As a matter of policy, this Court shall henceforth remand to

the Court of Appeals petitions of this nature for proper disposition.

NOTES:

1. In labor law context, arbitration is the reference of a labor dispute to an

impartial third person for determination on the basis of evidence and

arguments presented by such parties who have bound themselves to

accept the decision of the arbitrator as final and binding. Arbitration may

be classified, on the basis of the obligation on which it is based, as either

compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are

compelled by the government to forego their right to strike and are

compelled to accept the resolution of their dispute through arbitration by athird party. 1The essence of arbitration remains since a resolution of a

dispute is arrived at by resort to a disinterested third party whose decision

is final and binding on the parties, but in compulsory arbitration, such a

third party is normally appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the

parties is made, pursuant to a voluntary arbitration clause in their

collective agreement, to an impartial third person for a final and binding

resolution.2Ideally, arbitration awards are supposed to be complied with

by both parties without delay, such that once an award has been rendered

by an arbitrator, nothing is left to be done by both parties but to comply

with the same. After all, they are presumed to have freely chosen

arbitration as the mode of settlement for that particular dispute. Pursuant

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thereto, they have chosen a mutually acceptable arbitrator who shall hear

and decide their case. Above all, they have mutually agreed to de bound bysaid arbitrators decision.

2. Article 261 of the Labor Code accordingly provides for exclusive original

jurisdiction of such voluntary arbitrator or panel of arbitrators over

(1) the interpretation or implementation of the CBA and

(2) the interpretation or enforcement of company personnel policies.

Article 262 authorizes them, but only upon agreement of the parties, to

exercise jurisdiction over other labor disputes.

On the other hand, a labor arbiter under Article 217 of the Labor Code hasjurisdiction over the following enumerated cases:

. . . (a) Except as otherwise provided under this Code the Labor Arbiters

shall have original and exclusive jurisdiction to hear and decide, within

thirty (30) calendar days after the submission of the case by the parties

for decision without extension, even in the absence of stenographic notes,

the following cases involving all workers, whether agricultural or non-

agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers

may file involving wages, rates of pay, hours of work and other terms andconditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising

from the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including

questions involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare

and maternity benefits, all other claims, arising from employer-employee

relations, including those of persons in domestic or household service,

involving an amount exceeding five thousand pesos (P5,000.00) regardless

of whether accompanied with a claim for reinstatement.

3. Different scopes of admin law(Examples each)Fixes the administrative organization and structure of the government

Execution or enforcement of which is entrusted to administrative

authorities

Governs public officers including their competence to act, rights, duties,

liabilities, election, etc.

Creates administrative agencies. Defines their powers and functions,

prescribes their procedures, including the adjudication or settlement by

them of contested matters involving private interests.

Provides the remedies, administrative or judicial, available to those

aggrieved by administrative actions or decisions

Judicial review of or relief against, administrative actions or decisions

Rules, regulations, orders and decisions made by administrative authorities

dealing with the interpretation and enforcement of the laws entrusted to

their administrator

Body of judicial decisions and doctrines dealing with any of the above.

4. 2 concerns of Admin Law

PRIVATE RIGHTS - protection of rights, nature and the mode of exercise

of administrative power and the system of relief against administrative

action; impact of administrative process on private rights

DELEGATED POWERS AND COMBINED POWERS concerned with the

officers and agencies exercising delegated powers and not with the

exercise of the constitutional powers of the President. FUSION of different

types of governmental powers in certain public officers.

5. Origin and developmentRECOGNITION GIVEN AS A DISTINCT CATEGORY OF LAW not one of the

traditionally recognized parts of the law. The rapid expansion of

administrative agencies and increased functions that a substantial body ofjurisprudence has developed in the field and general recognition has been

given to administrative law as distinct category of law.

MULTIPLICATION OF GOVERNMENT FUNCTIONS modern life became more

complex, subjects of government regulations increased, which caused a

multiplication of government functions, necessitating an enormous

expansion of public administration. Legislature had to create more and

more admin bodies specialized in the particular fields assigned to them.

Courts were found not to be equipped to administer properly and

efficiently.

GROWTH AND UTILIZATION OF ADMINISTRATIVE AGENCIES in response

to the needs of changing society. Combination of forces in order to

respond to the complexities of a modern age which cannot be dealt with

directly in an effective manner by the legislature or the judiciary. Issues

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ought to be decided by experts and not by a judge, or at least not in the

first instance.

FUSION OF DIFFERENT POWERS OF GOVERNMENT IN ADMINISTRATIVE

AGENCIES resulted from the increased functions of government.

o Extensive investigation, rule-making, and adjudicating powers

o Vested with the power to promulgate rules and regulations to

better carry out some legislative policies

o

(a) Laws which created them, (b) ruels and regulations createdby them and (c) body of decision that they have from time to

time redered in the adjudication cases brought before them, now

constitute the bulk of administrative law.

LAW IN THE MAKING still in its formative stages and being developed as

part of our traditional system of law.

PHILIPPINE ADMINISTRATIVE LAW American and English jurisprudence

has persuasive, though not controlling, force in our jurisdiction.

IT BECOMES A FULL CIRCLE AND THE CYCLE GOES ON.

a. Solid Homes v. Payawal

G.R. No. 84811 August 29, 1989

SOLID HOMES, v. TERESITA PAYAWAL and COURT OF

APPEALS,

FACTS:

On August 31, 1982, a complaint was filed by Teresita Payawal against

Solid Homes, Inc. before the Regional Trial Court of Quezon City. The

plaintiff alleged that Solid Homes contracted to sell to her a subdivision

lot in Marikina on June 9, 1975, for the agreed price of P 28,080.00, and

that by September 10, 1981, she had already paid Solid Homes the total

amount of P 38,949.87 in monthly installments and interests. Solid

Homes subsequently executed a deed of sale over the land but failed to

deliver the corresponding certificate of title despite her repeateddemands because the defendant had mortgaged the property in bad faith

to a financing company. Payawal asked for delivery of the title to the lot

or, alternatively, the return of all the amounts paid by her plus interest.

She also claimed moral and exemplary damages, attorney's fees and the

costs of the suit. Solid Homes moved to dismiss the complaint on the

ground that the court had no jurisdiction, this being vested in the

National Housing Authority under PD No. 957. The motion was denied.

The RTC ruled in favor of Payawal and ordered Solid Homes to deliver to

her the title or failing this, to refund to her the sum of P 38,949.87 plus

interest from 1975 and until the full amount was paid. She was also

awarded P 5,000.00 moral damages, P 5,000.00 exemplary damages, P

10,000.00 attorney's fees, and the costs of the suit. The CA affirmed

the decision.

ISSUE: W/N the RTC has jurisdiction over the case

HELD:the RTC of QC has no jurisdiction. It is settled that any decision

rendered without jurisdiction is a total nullity and may be struck down at

any time, even on appeal before the Court. The only exception is where

the party raising the issue is barred by estoppel, which does not appear

in the case before the Court.

The applicable law is PD No. 957, as amended by PD No. 1344, entitled

"Empowering the National Housing Authority to Issue Writs of Execution

in the Enforcement of Its Decisions Under Presidential Decree No. 957."

Section 1 of the latter decree provides as follows:

SECTION 1. In the exercise of its function to regulate the real estate

trade and business and in addition to its powers provided for in

Presidential Decree No. 957, the National Housing Authority shall

have exclusive jurisdiction to hear and decide cases of the following

nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot

or condominium unit buyer against the project owner, developer, dealer,

broker or salesman; and

C. Cases involving specific performance of contractuala statutory

obligations filed by buyers of subdivision lot or condominium unit against

the owner, developer, dealer, broker or salesman.

The language of this section, especially the italicized portions, leaves no

room for doubt that "exclusive jurisdiction" over the case between thepetitioner and the private respondent is vested not in the Regional Trial

Court but in the National Housing Authority.

The private respondent contends that the applicable law is BP No. 129,

which confers on regional trial courts jurisdiction to hear and decide

cases mentioned in its Section 19, reading in part as follows:

SEC. 19. Jurisdiction in civil cases.-Regional Trial Courts shall exercise

exclusive original jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of

pecuniary estimation;

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(2) In all civil actions which involve the title to, or possession of, real

property, or any interest therein, except actions for forcible entry into

and unlawful detainer of lands or buildings, original jurisdiction over which

is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and

Municipal Circuit Trial Courts;

xxx xxx xxx

(8) In all other cases in which the demand, exclusive of interest and cost

or the value of the property in controversy, amounts to more than

twenty thousand pesos (P 20,000.00).

This construction must yield to the familiar canon that in case of conflict

between a general law and a special law, the latter must prevail

regardless of the dates of their enactment. The fact that one law is

special and the other general creates a presumption that the special act

is to be considered as remaining an exception of the general act, one as a

general law of the land and the other as the law of the particular case.

The circumstance that the special law is passed before or after the

general act does not change the principle. Where the special law is later,

it will be regarded as an exception to, or a qualification of, the prior

general act; and where the general act is later, the special statute will be

construed as remaining an exception to its terms, unless repealed

expressly or by necessary implication. It is obvious that the general law

in this case is BP No. 129 and PD No. 1344 the special law. Also, the RTC

and NHA does not have a concurrent jurisdiction over the case.

On the competence of the Board to award damages, we find that this is

part of the exclusive power conferred upon it by PD No. 1344 to hear

and decide "claims involving refund and any other claims filed by

subdivision lot or condominium unit buyers against the project owner,

developer, dealer, broker or salesman."As a result of the growing complexity of the modern society, it has

become necessary to create more and more administrative bodies to help

in the regulation of its ramified activities. Specialized in the particular

fields assigned to them, they can deal with the problems thereof with

more expertise and dispatch than can be expected from the legislature or

the courts of justice. This is the reason for the increasing vesture of

quasi-legislative and quasi-judicial powers in what is now not

unreasonably called the fourth department of the government.

Statutes conferring powers on their administrative agencies must be

liberally construed to enable them to discharge their assigned duties in

accordance with the legislative purpose.

b.

CGA v. Ignacio

CHRISTIAN GENERAL ASSEMBLY INC. v. SPS. AVELINO IGNACIO

and PRISCILLA IGNACIO

Brion, 2009

Christian General Assembly entered into a contract to sell a subdivision

lot with the the Spouses Ignacioregistered owners and developers of a

housing subdivision known as Villa Priscilla subdivision located inBarangay Cutcut, Pulilan, Bulacan. Under the contract to sell, CGA would

pay P2M for the subject property on instalment basis. According to CGA,

it religiously paid the monthly instalments until its pastor discovered that

the title covering the subject property suffered from fatal flaws and

defects. CGA learned that the subject property was actually part of two

consolidated lots which had been placed under PD 27s operation land

transfer. The DAR authorized Purificacion Imperial, former landowner, to

retain the farm lots.

CGA filed a complaint before the RTC claiming that the respondents

fraudulently concealed the fact that the subject property was part of a

property under litigation. Thus, the contract was rescissible. Respondents

filed an action claiming that the cas falls within the jurisdiction of HLURBsince it involved the sale of a subdivision lot. RTC ruled in favour of CGA.

CA reversed. CGA says cases falling within the HLURB is limited to those

involving specific performance and does not cover actions for rescission.

ISSUE

Which of the tworegular court or the HLURB has exclusive jurisdiction

over CGAs action for rescission

HELD

From these allegations, the main thrust of the CGA complaint is clear to

compel the respondents to refund the payments already made for the

subject property because the respondents were selling a property thatthey apparently did not own.

In other words, CGA claims that since the respondents cannot comply

with their obligations under the contract, i.e., to deliver the property

free from all liens and encumbrances, CGA is entitled to rescind the

contract and get a refund of the payments already made. This cause of

action clearly falls under the actions contemplated by Paragraph (b),

Section 1 of PD No. 1344, which reads: Claims involving refund and any

other claims filed by subdivision lot or condominium unit buyer against

the project owner, developer, dealer, broker or salesman;

We view CGAs contention that the CA erred in applying Article 1191

of the Civil Code as basis for the contracts rescission to be a

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negligible point. Regardless of whether the rescission of contract is based

on Article 1191 or 1381 of the Civil Code, the fact remains that what

CGA principally wants is a refund of all payments it already made to the

respondents.

6. What are the criticisms in admin actionTendency towards ARBITRARINESS

Lack of knowledge and aptitude in sound JUDICIAL TECHNIQUESusceptibility to POLITICAL BIAS or pressure, often brought about by

uncertainty of tenure

Disregard for the safeguards that insure a FULL and FAIR hearing

Absence of standards RULES AND PROCEDURE suitable of each agency

Dangerous COMBINATION of legislative, executive, and judicial functions.

a. Ang Tibay v. CIR

ANG TIBAY, represented by TORIBIO TEODORO, manager and

proprietor, and NATIONAL WORKERS BROTHERHOOD vs. THE

COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR

UNION, INC.

GR NO. L-46496. FEBRUARY 27, 1940

LAUREL, J.

FACTS:The SolGen, in behalf of CIR in the above-entitled case, has filed

an MR. NLU, on the other hand, prays for the vacation of the judgment

rendered by the SC and the remanding of the case to the CIR for a new

trial and avers, among others, that:

1. Teodoros claim that, on September 26, 1938, that there was shortage

of leather soles in ANG TIBAY making it necessary for him to temporarily

lay off 89 members of the NLU is entirely false and unsupported by the

records of the Bureau of Customs and the Books of Account of native

dealers in leather and was but a scheme to systematically prevent the

forfeiture of a bond despite the breach of Teodoros contract with thePhilippine Army;

2. the National Workers Brotherhood of ANG TIBAY is a company or

employer union dominated by Teodoro, the existence and functions of

which are illegal;

3. in the exercise by the laborers of their rights to collective bargaining,

majority rule and elective representation are highly essential and

indispensable;

4. the provisions of the Civil Code which had been the principal source of

dissenssions and continuous civil war in Spain cannot and should not be

made applicable in interpreting and applying the salutary provisions of a

modern labor legislation of American origin where the industrial peace has

always been the rule;

5. employer Teodoro is guilty of unfair labor practicefor discriminating

against the NLU and unjustly favoring the NWB.

ANG TIBAY filed an opposition for both motions of reconsideration and

new trial.

ISSUE: The SC deemed it necessary, in the interest of orderly procedure

in cases of this nature, in interest of orderly procedure in cases of thisnature, to make several observations regarding the nature of

the powers of the Court of Industrial Relations and emphasize

certain guiding principles which should be observed in the trial

of cases brought before it.

HELD: YES. The Court of Industrial Relations is a special court whose

functions are specifically stated in the law of its creation (CA103). It is

more an administrative than a part of the integrated judicial system of

the nation. It is not intended to be a mere receptive organ of the

Government. Unlike a court of justice which is essentially passive, acting

only when its jurisdiction is invoked and deciding only cases

that are presented to it by the parties l itigant , the function of

the Court of Industrial Relations, as will appear from perusal of its organiclaw, is more active, affirmative and dynamic. It not only exercises judicial

or quasi-judicial functions in the determination of disputes between

employers and employees but its functions in the determination of

disputes between employers and employees but its functions are far

more comprehensive and expensive. It has jurisdiction over the entire

Philippines, to consider, investigate, decide, and settle any question,

matter controversy or dispute arising between, and/or affecting

employers and employees or laborers, and regulate the relations between

them, subject to, and in accordance with, the provisions of CA 103. (Sec.

1) It shall take cognizance or purposes of prevention, arbitration,

decision and settlement, of any industrial or agricultural dispute causing

or likely to cause a strike or lockout, arising from differences as regards

wages, shares or compensation, hours of labor or conditions of tenancyor employment, between landlords and tenants or farm-laborers,

provided that the number of employees, laborers or tenants of farm-

laborers involved exceeds thirty, and such industrial or agricultural

dispute is submitted to the Court by the Secretary of Labor or by any or

both of the parties to the controversy and certified by the Secretary of

labor as existing and proper to be by the Secretary of Labor as existing

and proper to be dealt with by the Court for the sake of public interest. It

shall, before hearing the dispute and in the course of such hearing,

endeavor to reconcile the parties and induce them to settle the dispute

by amicable agreement.(Sec. 4)When directed by the President of the

Philippines, it shall investigate and study all industries established in a

designated locality, with a view to determinating the necessity and

fairness of fixing and adopting for such industry or locality a minimum

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wage or share of laborers or tenants, or a maximum "canon" or rental to

be paid by the "inquilinos" or tenants or less to landowners. (Sec. 5) In

fine, it may appeal to voluntary arbitration in the settlement of industrial

disputes; may employ mediation or conciliation for that purpose, or recur

to the more effective system of official investigation and compulsory

arbitration in order to determine specific controversies between labor

and capital industry and in agriculture. There is in reality here a mingling

of executive and judicial functions, which is a departure from the rigiddoctrine of the separation of governmental powers.

CIR is not narrowly constrained by technical rules of

procedure, and CA 103 requires it to act according to justice

and equity and substantial merits of the case, without regard

to technical ities or legal forms and shal l not be bound by any

technical ities or legal forms and shal l not be bound by any

technical rules of legal evidence but may inform its mind in

such manner as it may deem just and equitable . (Sec. 20) It

shall not be restricted to the specific relief claimed or demands made by

the parties to the industrial or agricultural dispute, but may include in the

award, order or decision any matter or determination which may be

deemed necessary or expedient for the purpose of settling the dispute orof preventing further industrial or agricultural disputes (Sec. 13)

The fact, however, that the Court of Industrial Relations may be said to

be free from the rigidity of certain procedural requirements does not

mean that it can, in justifiable cases before it, entirely ignore or d isregard

the fundamental and essential requirements of due process in trials and

investigations of an administrative character. There are primary rights

which must be respected even in proceedings of this character:

1. The r ight to a hearingwhich includes the right of the party interested

or affected to present his own case and submit evidence in

support thereof the liberty and property of the citizen shall be

protected by the rudimentary requirements of fair play;

2.

Not only must the party be given an opportunity to present his case andto adduce evidence tending to establish his rights which he asserts but

the tribunal must consider the evidence presented , otherwise

such rights is vain - such right is conspicuously futile if the person or

persons to whom the evidence is presented can thrust it aside without

notice or consideration;

3. While the duty to deliberate does not impose the obligation to decide

right, it does imply a necessity which cannot be disregarded i.e. that of

having something to support it is a nul l ity, aplce when directly

attached this emanates from the more fundamental is contrary to the

vesting of unlimited power anywhere since law is both a grant and a

limitation upon power;

4. The evidence must be substantial i.e. such relevant evidence as a

reasonable mind accept as adequate to support a conclusion to free

administrative boards from the compulsion of technical rules so that the

mere admission of matter which would be deemed incompetent in judicial

proceedings would not invalidate the administrative order which,

however, does not go far as to justify orders without a basis in evidence

having rational probative force mere uncorroborated hearsay or rumor

does not constitute substantial evidence;

5. The decision must be rendered on the evidence presented at

the hearing or at least contained in the record and disclosed

to the parties affected - It should not, however, detract from their

duty actively to see that the law is enforced, and for that purpose, to

use the authorized legal methods of securing evidence and informing

itself of facts material and relevant to the controversy. Boards of inquiry

may be appointed for the purpose of investigating and determining the

facts in any given case, but their report and decision are only advisory.

(Sec. 9) The Court of Industrial Relations may refer any industrial or

agricultural dispute or any matter under its consideration or advisement

to a local board of inquiry, a provincial fiscal. a justice of the peace or

any public official in any part of the Philippines for investigation, report

and recommendation, and may delegate to such board or public official

such powers and functions as the said Court of Industrial Relations may

deem necessary, but such delegation shall not affect the exercise of theCourt itself of any of its powers. (Sec. 10);

6. The CIR or any of its judges, therefore, must act on its or his own

independent consideration of the law and facts of the

controversy and not simply accept the views of a subordinate

in arr iving at a decision ;

7. The CIR should, in all controversial questions, render its decision in such a

manner that the parties to the proceeding can know the various

issues involved and the reasons for the decision rendered.

The interest of justice would be better served if the movant is given

opportunity to present at the hearing the documents referred to in his

motion and such other evidence as may be relevant to the main issue

involved. The legislation which created the Court of Industrial Relationsand under which it acts is new. The failure to grasp the fundamental issue

involved is not entirely attributable to the parties adversely affected by

the result. Accordingly, the motion for a new trial should be and the

same is hereby granted, and the entire record of this case shall be

remanded to the Court of Industrial Relations, with instruction that it

reopen the case, receive all such evidence as may be relevant and

otherwise proceed in accordance with the requirements set forth

hereinabove.

7. Advantages of admin process vis-a-vis court proceedingsADVANTAGES OF ADMINISTRATIVE ADJUDICATION AS COMPARED WITH

EXECUTIVE ACTION insures greater uniformity and impersonality of

action.

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LIMITATIONS UPON THE POWERS OF COURTS With the issuance of rules

and regulations of general applicability, fixing of rates or prices or the

grantors refusal of radio broadcasting licenses, involve discretion with

respect to future conduct and hence, will NOT BE UNDERTAKEN by the

courts. Judicial process is NOT an alternative to the administrative

process

TREND TOWARD PREVENTIVE LEGISLATION preventive justice; the

deterrent effect of laws can do nothing but impose punishment after thecrime has been committed. Administrative process is more flexible and

has preventive remedies.

LIMITATIONS UPON EFFECTIVE LEGISLATIVE ACTION many admin

functions could not be directly performed by Congress. Instead of

delagting the rule-making power, they incorporate REGULATORY DETAILS

into the statutes. The need for time, specialized knowledge, lack of staff

for securing experts information, complexity of problems are reasons why

admin process is more efficient. Otherwise, it would be a detriment to the

functions of the Congress in basic policy.

LIMITATIONS UPON EXCLUSIVELY JUDICIAL ENFORCEMENT many courts

would vary in their application of the law. There is NO UNIFORMITY. This

would be a burden and expense to the policy of modern government. A

single admin agency can assume the responsibility for enforcement andcan develop, subject to judicial review, uniform policies.

ADVATAGES OF CONTINUITY OF ATTENTION AND CLEARLY ALLOCATED

RESPONSIBILITY they have the time and facilities to become and to

remain continuously informed in effectuating broad policies laid down by

the Congress.

NEED FOR ORGANIZATION TO DISPOSE OF VOLUME OF BUSINESS AND TO

PROVIDE THE NECESSARY RECORDS have specialized staff and

machinery to keep and make available records upon which judgment on

thousand of claims and applications must be based. TIME IS OF THE

ESSENCE.

a. Lianga Bay v. Enage

LIANGA BAY LOGGING vs. ENAGE

FACTS: Lianga Bay Logging and Ago Timber are both forest

concessionaries whose licensed areas are adjacent to each other.

Liangas concession is located in the municipalities of Tago, Cagwait,

Marihatag and Lianga, all in the Province of Surigao, consisting of

110,406 hectares, while that of Ago is located at Los Arcos and San

Salvador, Province of Agusan, with an approximate area of 4,000

hectares. It was a part of a forest area of 9,000 hectares originally

licensed to one Narciso Lansang. Their common boundary is the Agusan-

Surigao Provincial boundary whereby the eastern boundary of Ago's

concession is Liangas western boundary. Due to alleged encroachment

of both parties, the Director of Forest Industry ordered a survey to

establish the correct common boundary. Ago alleged that "its eastern

boundary should be the provincial boundary line of Agusan-Surigao as

indicated in the green pencil in the attached sketch of the areas as

prepared by the Bureau of Forestry. As per the findings of Forester

Feliciano Cipriano, the claim of Ago would increase the area of Lansang

to 12, 360 hectares and would reduce the area of Lianga to 107,046

hectares instead of the area granted which is 110,406 hectares. Such

being the case, it is reiterated that distance and bearings control thedescription where an imaginary line exists. The decision fixed the

common boundary as that indicated in red pencil of the sketch attached.

Ago appealed to the Department of Agriculture and Natural

(DANR) and its Acting Secretary, Jose ruled that the common boundary

line should be that indicated by the green line on the same sketch. Lianga

appealed to this decision before the Office of the President. The then

Assistant Executive Secretary Jose J. Leido, Jr., affirmed the decision of

the Secretary of DANR. On motion for reconsideration, the then Assistant

Executive Secretary Gilberto Duavit overturned the decision of the then

Acting Secretary and affirmed in toto the decision of the Director of

Forestry. Ago filed a motion for reconsideration but it was denied by the

Office of the President.

Thus, Ago filed a case before the Court of First Instance of

Agusan, against Lianga, Leido, Duavit and Director of Forestry, for

"Determination of Correct Boundary Line of License Timber Areas and

Damages with Preliminary Injunction" and insisting that "a judicial review of

such divergent administrative decisions is necessary to determine such

question. Judge Enage of said court issued a TRO enjoining defendants

from carrying out the order of the Office of the President. Lianga moved

for dismissal of the case alleging the there is no cause of action and that

the court has no jurisdiction over the public officials and Lianga. Its motion

for dismissal and subsequent motion for reconsideration were both denied.

Hence, this appeal was made.

ISSUE: Whether or not the Director of Forestry has the exclusive

jurisdiction to determine the common boundary and that the decision of

the Office of the President is final and executory?

HELD: YES. Judge Enage erred in taking cognizance of the complaint filed

by Ago for the same issue had already been determined by the Director of

Forestry, the Secretary of DANR and the Office of the President,

administrative officials under whose jurisdictions the matter properly

belongs. Section 1816 of the Revised Administrative Code vests in the

Bureau of Forestry the jurisdiction and authority over the demarcation and

use of all public forests and forest reserves. The Secretary of DANR, as

department head, may repeal or modify the decision of said Director when

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advisable in the public interests, whose decision is in turn appealable to the

Office of the President.

In giving due course to the complaint, the Court would necessarily

have to assess and evaluate anew all the evidence presented in the

administrative proceedings, which is beyond its competence and

jurisdiction. It would be to allow it to substitute its judgment for that of

said officials who are in a better position to consider and weigh the same in

the light of the authority specifically vested in them by law. The only

exception to this rule is when the latter acted arbitrarily or with grave

abuse of discretion or when there is an excess or lack of jurisdiction.

The need for specialized administrative boards or commissions

with special knowledge, experience and capability to hear and determine

promptly disputes on technical matters or essentially factual matters has

become indispensable in this era of clogged court dockets.

Assignment #2

1.

Definea. Admin agency an agency exercising some significant combination of

executive, legislative and judicial powers. Charged with administering and

implementing particular legislation. An official governmental body

empowered with the authority to direct and supervise the implementation

of particular legislative acts.

Fourth power of government quasi-legislative or quasi-judicial

powers

b. Cover (i) boards (ii) commissions, (iii) divisions (iv) bureaus (v)departments (vi) office (vii) instrumentality (viii) GOCC

c. 6 types of admin bodiesThose created to function in situations wherein the government

is offering some GRATUITY, GRANT or SPECIAL PRIVELEGE. (PHVeterans, GSIS, SSS, POA, PH Medical Care Commission)

The government seeking to carry on certain FUNCTIONS OF

GOVERNMENT (BIR, Bureau of Customs, Immigration, LRA)

The government is performing some BUSINESS SERVICE for the

public. (PH Postal Corp, MWSS, Government Telephone System,

National Food Authority, National Housing Authority)

The government is seeking to regulate BUSINESS AFFECTED

WITH PUBLIC INTEREST (Insurance Commission, LTFRB, Energy

Regulatory Board, National Telecommunications Commission,

HLURB)

The government is seeking under the POLICE POWER to regulate

private businesses and individuals (SEC, MTRCB, GAB, Dangerous

Drugs Board, BTRCP)

The government is seeking to adjust INDIVIDUAL

CONTROVERSIES because of some strong social policy involved.

(NLRC, Employees Compensation Commission, SEC, DAR, COA)

2. How admin bodies are: organized !4 ways":a. Creation bring into existence

Constitutional provision (Art 9) Self executing [COC, COA,

COMELEC]

Legislative enactments

Authority of law or Delegated presidential power

b. Reorganization already existing, alteration, merge 2 officesPURPOSES: check Larin case

c. Abolition terminate the existenceFollow the hierarchy of laws. Can only be abolished by the same

or weightier authority.

Constitutionally created agencies CANNOT be abolished by

authority of law, and so on.

d. Deactivation EIIB case, continues to exist but agency is dormant

i.

Larin v. Executive Secretary

Larin v. Executive Secretary

G.R. No. 112745. October 16, 1997

TORRES, JR., J.

Facts:

On September 18, 1992, [1] a decision was rendered by the

Sandiganbayan convicting herein petitioner Aquilino T. Larin, Revenue

Specific Tax Officer, then Assistant Commisioner of the Bureau of

Internal Revenue and his co-accused (except Justino E. Galban, Jr.) of

the crimes of violation of Section 268 (4) of the National Internal

Revenue Code and Section 3 (e) of R.A. 3019 in Criminal Cases Nos.

14208-14209, entitled People of the Philippines, Plaintiff vs.Aquilino T. Larin, Teodoro T. Pareno, Justino E. Galban, Jr. and

Potenciana N. Evangelista, Accused. The fact of petitioners

conviction was reported to the President of the Philippines by the

then Acting Finance Secretary Leong through a memorandum dated

June 4, 1993. Acting by authority of the President, Sr. Deputy

Executive Secretary Leonardo A. Quisumbing issued Memorandum

Order No. 164 dated August 25, 1993 which provides for the

creation of an Executive Committee to investigate the administrative

charge against herein petitioner Aquilino T. Larin. Consequently, the

Committee directed Larin to respond to the administrative charge

leveled against him through a letter dated September 17, 1993. In

compliance, Larin submitted a letter dated September 30, 1993

which was addressed to Atty. Frumencio A. Lagustan , the Chairman

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of the Investigating Committee saying that he cannot comment on

the merits of the issues against him for fear of being cited in

contempt of Court.

Meanwhile, the President issued the challenged Executive order No.

132 dated October 26, 1993 which mandates for the streamlining of

the Bureau of Internal Revenue. Under said order, the Excise Tax

Service or the Specific Tax Service, of which petitioner was the

Assistant Commissioner, was abolished. On October 27, 1993, or oneday after the promulgation of Executive Order No.132, the President

appointed certain persons as BIR Assistant Commissioners.

Consequently, the president, in the assailed Administrative Order No.

101 dated December 2, 1993, found petitioner guilty of grave

misconduct in the administrative charge and imposed upon him the

penalty of dismissal with forfeiture of his leave credits and retirement

benefits including disqualification for reappointment in the

government service.

Issues:

1. WON the dismissal of Larin from office is valid.

2. Who has the power to discipline the petitioner?,

3.

Were the proceedings taken pursuant to Memorandum Order No. 164in accord with due process?,

4. What is the effect of petitioners acquittal in the criminal case to his

administrative charge?

5. Does the President have the power to reorganize the BIR or to issue

the questioned E.O. NO. 132?,

6. Is the reorganization of BIR pursuant to E.O. No. 132 tainted with bad

faith?

Held:

1. No, the dismissal of Larin from office is NOT valid.

2. The President has the power to discipline Larin.

3. The proceedings taken pursuant to MO 164 are in accord with due

process.The position of the Assistant Commissioner of the BIR is part of the

Career Executive Service. Under the law, Career Executive Service

officers, namely Undersecretary, Assistant Secretary, Bureau director,

Assistant Bureau Director, Regional Director, Assistant Regional

Director, Chief of Department Service and other officers of equivalent

rank as may be identified by the Career Executive Service Board, are

all appointed by the President. Concededly, petitioner was appointed

as Assistant Commissioner in January, 1987 by then President

Aquino. Thus, petitioner is a presidential appointee who belongs to

career service of the Civil Service. Being a presidential appointee, he

comes under the direct disciplining authority of the President. This is

in line with the well settled principle that the power to remove is

inherent in the power to appoint conferred to the President by

Section 16, Article VII of the Constitution. Thus, it is ineluctably clear

that Memorandum Order No. 164, which created a committee to

investigate the administrative charge against petitioner, was issued

pursuant to the power of removal of the President. This power of

removal, however, is not an absolute one which accepts no

reservation. It must be pointed out that petitioner is a career service

officer. Under the Administrative Code of 1987, career service is

characterized by the existence of security of tenure, as contra-distinguished from non-career service whose tenure is co-terminus

with that of the appointing or subject to his pleasure, or limited to a

period specified by law or to the duration of a particular project for

which purpose the employment was made. As a career service officer,

petitioner enjoys the right to security of tenure. No less than the

1987 Constitution guarantees the right of security of tenure of the

employees of the civil service. Specifically, Section 36 of P.D. No.

807, as amended, otherwise known as Civil Service Decree of the

Philippines, is emphatic that career service officers and employees

who enjoy security of tenure may be removed only for any of the

causes enumerated in said law. In other words, the fact that the

petitioner is a presidential appointee does not give the appointing

authority the license to remove him at will or at his pleasure for it isan admitted fact that he is likewise a career service officer who under

the law is the recipient of tenurial protection, thus, may only be

removed for a cause and in accordance with procedural due process.

4. The administrative case against Larin must be dismissed.

The criminal cases against petitioner refer to his alleged

violation of Section 268 (4) of the National Internal Revenue Code

and of section 3(e) of R.A. No.3019 as a consequence of his act of

favorably recommending the grant of tax credit to Tanduay Distillery,

Inc. However, the conviction of petitioner by the Sandiganbayan was

set aside by this court in our decision promulgated on April 17, 1996

in G.R. Nos. 108037-38 and 107119-20. Significantly, the acts which

the SC categorically declared to be not unlawful and improper in G.R.

Nos. 108037-38 and G.R. Nos. 107119-20 are the very same actsfor which petitioner is held to be administratively responsible. Any

charge of malfeasance or misfeasance on the part of the petitioner is

clearly belied by SCs conclusion in said cases. In the light of this

decisive pronouncement, SC sees no reason for the administrative

charge to continue - it must, thus, be d ismissed

The SC is not unaware of the rule that since administrative

cases are independent from criminal actions for the same act or

omission, the dismissal or acquittal of the criminal charge does not

foreclose the institution of administrative action nor carry with it the

relief from administrative liability. However, the circumstantial

setting of the instant case sets it miles apart from the foregoing rule

and placed it well within the exception. Corollarily, where the very

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basis of the administrative case against petitioner is his conviction in

the criminal action which was later on set aside by this court upon a

categorical and clear findings that the acts for which he was

administratively held liable are not unlawful and irregular, the acquittal

of the petitioner in the criminal case necessarily entails the dismissal

of the administrative action against him, because in such a case,

there is no basis nor justifiable reason to maintain the administrative

suit.5. Yes, the President has the power to issue EO 132 or to reorganize

the BIR.

Section 48 and 62 of R.A. No. 7645 evidently show that the

President is authorized to effect organizational changes including the

creation of offices in the department or agency concerned. Another

legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292

which states: "Sec.20. Residual Powers. -- Unless Congress provides

otherwise, the President shall exercise such other powers and

functions vested in the President which are provided for under the

laws and which are not specifically enumerated above or which are

not delegated by the President in accordance with law.". Presidential

Decree No. 1772 which amended Presidential Decree No. 1416

expressly grants the President of the Philippines the continuingauthority to reorganize the national government, which includes the

power to group, consolidate bureaus and agencies, to abolish offices,

to transfer functions, to create and classify functions, services and

activities and to standardize salaries and materials.

6. Yes, the reorganization of BIR was made in bad faith.

In Dario v. Mison, the SC clarified that as a general rule, a

reorganization is carried out in good faith if it is for the purpose of

economy or to make bureaucracy more efficient. Also, Section 2 of

R.A. No. 6656 lists down the circumstances evidencing bad faith in

the removal of employees as a result of the reorganization to wit - a)

Where there is a significant increase in the number of positions in the

new staffing pattern of the department or agency concerned; b)

Where an office is abolished and another performing substantially thesame functions is created; c) Where incumbents are replaced by

those less qualified in terms of status of appointment, performance

and merit; d) Where there is a reclassification of offices in the

department or agency concerned and the reclassified offices perform

substantially the same functions as the original offices; e) Where the

removal violates the order of separation provided in Section 3

hereof." Section 1.1.2 of EO 132. is a clear illustration of the

circumstance mentioned in Section 2 (b) of R.A. No. 6656 that an

office is abolished and another one performing substantially the same

function is created. Another circumstance is the creation of services

and divisions in the BIR resulting to a significant increase in the

number of positions in the said bureau as contemplated in paragraph

(a) of section 2 of R.A. No. 6656. Under Section 1.3 of E.O. No. 132,

the Information Systems Group has two newly created Systems

Services. Aside from this, six new divisions are also created. Under

Section 1.2.1, three more divisions of the Assessment Service are

formed. With this newly created offices, there is no doubt that a

significant increase of positions will correspondingly follow.

Furthermore, it is perceivable that the non-reappointment of the

petitioner as Assistant Commissioner violates Section 4 of R.A. No.

6656. Under said provision, officers holding permanent appointmentsare given preference for appointment to the new positions in the

approved staffing pattern comparable to their former position or in

case there are not enough comparable positions to positions next

lower in rank. It is undeniable that petitioner is a career executive

officer who is holding a permanent position. Hence, he should have

given preference for appointment in the position of Assistant

Commissioner.

ii . Dario v. Mison

FACTS:On March 25, 1986, President Corazon Aquino promulgated

Proclamation No. 3, "DECLARING A NATIONAL POLICY TO IMPLEMENT

THE REFORMS MANDATED BY THE PEOPLE, PROTECTING THEIR BASICRIGHTS, ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING

FOR AN ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW

CONSTITUTION." Among other things, Proclamation No. 3 provided:

SECTION 1. The President shall give priority to measures to achieve

the mandate of the people to:

(a) Completely reorganize the government, eradicate unjust and

oppressive structures, and all iniquitous vestiges of the

previous regime;

The reorganization process started as early as February 25, 1986,when the President, in her first act in office, called upon "all

appointive public officials to submit their courtesy resignations

beginning with the members of the Supreme Court." Later on, she

abolished the Batasang Pambansaand the positions of Prime Minister

and Cabinet under the 1973 Constitution. The President has issued a

number of executive orders and directives reorganizing various other

government offices, a number of which, with respect to elected local

officials, has been challenged in this Court, and two of which, with

respect to appointed functionaries, have likewise been questioned

herein.

On May 28, 1986, the President enacted Executive Order No. 17,

"PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION

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OF SECTION 2, ARTICLE III OF THE FREEDOM CONSTITUTION." EO No.

17 recognized the "unnecessary anxiety and demoralization among

the deserving officials and employees" the ongoing government

reorganization had generated, and prescribed as "grounds for the

separation/replacement of personnel.

On January 30, 1987, the President promulgated Executive Order No.

127, "REORGANIZING THE MINISTRY OF FINANCE." Among other

offices, Executive Order No. 127 provided for the reorganization of

the Bureau of Customs and prescribed a new staffing pattern

therefor. On February 2, 1987, the Filipino people adopted the new

Constitution.

On January 6, 1988, incumbent Commissioner of Customs Salvador

Mison issued a Memorandum, in the nature of "Guidelines on the

Implementation of Reorganization Executive Orders," prescribing the

procedure in personnel placement. On the same date, Commissioner

Mison constituted a Reorganization Appeals Board charged with

adjudicating appeals from removals under the aforementioned

Memorandum. On January 26, 1988, Commissioner Mison addressedseveral notices to 394 Customs officials about the implementation of

the reorganization program under EO No. 127 and their termination.

A number sought reinstatement with the Reorganization Appeals

Board, others went to the Civil Service Commission and some came

directly to the Court.

On June 10, 1988, Republic Act No. 6656, "AN ACT TO PROTECT

THE SECURITY OF TENURE OF CIVIL SERVICE OFFICERS AND

EMPLOYEES IN THE IMPLEMENTATION OF GOVERNMENT

REORGANIZATION," ordering the reinstatement of those separated

from their offices in violation of said act.

THIS IS PETITION IS A RESOLUTION OF THE SEVEN CONSOLIDATEDPETITIONS.

On June 30, 1988, the Civil Service Commission promulgated its

ruling ordering the reinstatement of the 279 employees, the 279

private respondents in G.R. No. 85310. Commissioner Misons motion

for reconsideration before the Commission was denied. Another

resolution was executed by the Commission reinstating other 5

employees of the Bureau. As a result, a petition for certiorari before

the Court was filed by Mison, with G.R. Nos. 85310 and 86241,

respectively. Mison points out that claims of violation of security of

tenure are allegedly no defense. In Jose vs. Arroyo:

The contention of petitioner that Executive Order No. 127 is violative

of the provision of the 1987 Constitution guaranteeing career civil

service employees security of tenure overlooks the provisions of

Section 16, Article XVIII (Transitory Provisions) which explicitly

authorize the removal of career civil service employees "not for cause

but as a result of the reorganization pursuant to Proclamation No. 3

dated March 25, 1986 and the reorganization following the

ratification of this Constitution." By virtue of said provision, thereorganization of the Bureau of Customs under Executive Order No.

127 may continue even after the ratification of the Constitution, and

career civil service employees may be separated from the service

without cause as a result of such reorganization.

Mison also argues that EO No. 1, which was meant to implement the

Provisional Constitution ceased to be effective upon the ratification

of the 1987 Constitution.

G.R. No 83737 was filed by the customs examiners, Benedicto Amasa

and William Dionisio, appointed by Mison pursuant to the

reorganization.

G.R. No. 85335 was filed by 35 Customs officials whom the Civil

Service Commission has ordered reinstated. They want the

Commissioner of Customs to comply with said resolution.

G.R. No. 81954 was filed by Cezar Dario, G.R. No. 81967 by Vicente

Feria, both Deputy Commissioners of the Bureau of customs. they

questioned the legality of their dismiss pursuant to EO No. 17, and

their enjoyment of the security of tenure provisions under the 1987

Constitution. They also allege that they were appointed by the

President and therefore beyond the control of Mison for purposes of

reorganization.

The petitioners in G.R. No. 82023, collectors and examiners in venous

ports of the Philippines, say, on the other hand, that the purpose of

reorganization is to end corruption at the Bureau of Customs and

that since there is no finding that they are guilty of corruption, they

cannot be validly dismissed from the service.

ISSUE: What is the nature and extent of this government

reorganization?

HELD:There is no question that the administration may validly carry

out a government reorganization insofar as these cases are

concerned, the reorganization of the Bureau of Customs by

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simplicity, economy and efficiency, shall have continuing authority to

reorganize the administrative structure of the Office of the President. For

this purpose, he may take any of the following actions:

(1) Restructure the internal organization of the

Office of the President Proper, including the

immediate Offices, the Presidential Special

Assistants/Advisers System and the Common

staff Support System, by abolishing,consolidating or merging units thereof or

transferring functions from one unit to

another;

(2) Transfer any function under the Office of the

President to any other Department or Agency

as well as transfer functions to the Office of

the President from other Departments and

Agencies; and

(3) Transfer any agency under the Office of the

President to any other department or agency

as well as transfer agencies to the Office of

the President from other departments or

agencies.

ii .

Buklod ng Kawaning EIIB v. Zamora

BUKLOD NG KAWANING EIIB, et al v. EXECUTIVE SECRETARY

Sandoval-Guitierrez, 2 001

On June 30, 1987, President Cory Aquino issued EO 127 which

established the Economic Intelligence and Investigation Bureau (EIIB)

under the Ministry of Finance. EIIB was designated, among others, to

gather intel reports on illegal activities that affect the national

economy such as economic sabotage, smuggling, tax evasion, and

dollar-salting. To prevent possible conflicts among agencies in the

course of their anti-smuggling operations, Aquino issuedMemorandum Order No. 225 in March 17, 1989, providing that EIIB

shall be the agency of PRIMARY RESPONSIBILITY for anti-smuggling

operations in all land areas and inland waters and waterways OUTSIDE

THE AREAS OF SOLE JURISDICTION OF THE BUREAU OF CUSTOMS.

Eleven years after (January 7, 2000), President Estrada issued EO No.

191 which deactivated the EIIB on the ground that the functions of

the EIIB are also being performed by other agencies. Meanwhile, Erap

issued EO 196 creating the Presidential Anti-Smuggling Taskforce

Aduana.On March 29, 2000, Estrada issued EO 223 which provided

that all EIIB personnel occupying positions specified therein shall be

deemed SEPARATED FROM SERVICE effective April 30, 2000 pursuant

to the said reorganization.

Petitioners Buklod ng Kawaning EIIB, Cesar Posada, Remedios

Princesa, Benjamin Kho, Benigno Manga, Lulu Mendoza thus filed a

petition for the judicial review of EOs 191 and 223. Petitioners argue

that said EOs are unconstitutional as they:

(a) violate their right to security of tenure,

(b) are tainted with bad faith as they were not actually intended to make

the bureaucracy more efficient but to give way to TF Aduana, thefunctions of which are essentially and substantially the same as that

of EIIB, and

(c) constitute an usurpation of the power of Congress decide EIIBs

abolition (in short, President has no authority to abolish EIIB).

Arguing in behalf of the respondents, the SolGen maintains that:

(a) President enjoys the totality of executive power as provided under

Secs 1 and 7 Article 7 of the Constitution and therefore has the

authority to issue said EOs

(b) Said EOs were issued in the interest of national economy, to avoid

duplicity of work and to streamline the functions of the bureaucracy,

and

(c)

the EIIB was not abolished, it was only deactivated

RULING:

*SC first notes procedural flaws: Disregard of hierarchy of courts,

non-exhaustion of admin remedies, but deems it necessary to address

the issues because it is in the interest of the State that questions re:

status and existence of a public office be settled without delay

ISSUE(S)

A. Does the president have the authority to reorganize the executive

department?

B. How should the reorganization be carried out?

RULING

A. AUTHORITY OF PRESIDENT TO REORGANIZE

Organization and abolition are both reorganization measures, but

there are distinctions:

" Deactivate- to render inactive or ineffective or to break up by

discharging or reassigning personnel; the office continues to exists,

albeit remaining dormant or inoperative

" Abolish- to do away with, to annul, to abrogate or destroy

completely; denotes an intention to do away with the office WHOLLY

and PERMANENTLY; the office ceases to exist

General rule: The power to abolish a public office is lodged with the

LEGISLATURE. This proceeds from the legal precept that the power to

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create includes the power to destroy. A public office is either created

by the (1) Constitution, (2) by statute, or (3) by authority of law.

Thus, except where the office was created by the constitution itself,

it may be abolished by the same legislature that brought it into

existence.

Exception: As far as bureaus, agencies or offices in the executive

department are concerned, the Presidents power of control mayjustify him to inactivate the functions of an office or certain laws may

grant him the broad authority to carry out reorganization measures.

Legal bases:

(a) Section 77 of RA 8745 or the General Appropriations Act (budget)

for the fiscal year 1999. Section 77 of the said law provides that

UNLESS otherwise provided by law or DIRECTED BY THE PRESIDENT

OF THE PHILIPPINES, no changes in key positions or organizational

units in any department or agency shall be authorized in their

respective organizational structures in their respective organizational

structures and funded from appropriations provided by this Act. This

provision recognizes the authority of the President to effect

organizational changes in the department or agency under theexecutive structure.

(b) Section 78, RA 8760: the actual streamlining and productivity

improvement in agency organization and operation shall be effected

pursuant to circulas or orders issued for the purpose by the Office of

the President.

(c) Section 31, Book III of EO 292 (Admin Code of 1987): the president,

subject to the policy in the Executive Office and in order to achieve

simplicity, economy and efficiency shall have the continuing authority

to reorganize the administrative structure of the Office of the

President.

(d) Canonizado v. Aguirre: reorganization involves the reduction of

personnel, consolidation of offices, or abolition thereof by reason of

economy or redundanchy of functions. It takes place when there is analteration of the existing structure of government offices or units

therein, including the lines of control, authority and responsibility

between them. The EIIB is a bureau attached to the department of

Finance. It falls under the OP.Hence, it is subject to the Presidents

continuing authority to reorganize.

B. Validity of reorganization

Reorganization is valid provided they are pursued in good faith (if it is

for the purpose of economy or to make bureaucracy more efficient).

RA 6656 provides for the circumstances which may be evidence of

bad faith in the removal of civil service employees as a result of

reorganization. Petitioners claim the deactiviation was done in bad

faith because four days after deactivation, Estrada crearted TF

Aduana.

An examination of the pertinent EOs shows that the reorg and

creation of TF Aduana were done in good faith. Purpose was not to

remove EIIB employees but to achieve economy. The creation of TF

Aduana does not entail expense to the government.

iii.

Bagaoisan v. National Tobacco Administration

FACTS: On September 30, 1998, President Joseph Estrada issued

EO 29 entitled MANDATING THE STREAMLINING OF THE NATIONAL

TOBACCO ADMINISTRATION (NTA), a government agency under the

Department of Agriculture.

On October 27, 1998, Pres. Estrada issued EO 36, amending EO 29,

insofar as the new staffing pattern was concerned, by increasing from

400 to not exceeding 750 the positions affected thereby.

In compliance therewith, the NTA prepared and adopted a new

Organization Structure and Staffing Pattern (OSSP) which, on October29, 1998, was submitted to the Office of the President.

On November 11, 1998, the rank and file employees of NTA Batac,

among whom included herein petitioners, filed a letter-appeal with the

Civil Service Commission (CSC) and sought its assistance in recalling

the OSSP.

On December 04, 1998, the OSSP was approved by the Department

of Budget and Management (DBM) subject to certain revision. NTA

created a placement committee to assist the appointing authority in

the selection and placement of permanent personnel in the revised

OSSP. The results of the evaluation by the committee on the

individual qualifications of applicants to the positions in the new OSSPwere then disseminated and posted at the central and provincial

offices of the NTA.

On June 10, 1996, petitioners, all occupying different positions at

NTA Batac, Ilocos Norte, received individual notices of

termination of their employment with NTA effective 30 days

from receipt thereof. Without immediate relief from their dismissal

from service, petitioners filed a petition for certiorari, prohibition

and mandamus, with prayer for preliminary mandatory injunction

and/or TRO, with RTC Batac and prayed that~

a. a restraining order be immediately issued enjoining NTA from

enforcing the notice of termination and/or from further acts of

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dispossession and/or ousting the petitioners from their respective

offices;

b. a writ of preliminary injunction be issued against NTA to maintain

status quo; and

c. the notice of termination of petitioners be declared illegal and the

reorganization null and void and their reinstatement with backwages,

if applicable, be ordered commanding to desist from further

terminating their services and making the injunction permanent.

On September 09, 2000, RTC ordered NTA to appoint petitioners in

the new OSSP to positions similar or comparable to their respective

former assignments. On February 28, 2001, NTAs MR was denied. On

February 20, 2002, CA reversed the decision. Petitioners went to the

SC, which on September 23, 2002, denied their petition for failure to

sufficiently show any reversible error on the CAs decision so as to

warrant the exercise of the SCs discretionary appellate jurisdiction.

Petitioners filed an MR but was denied on January 20, 2002.

On February 21, 2003, petitioners submitted a Motion to Admit

Petition for En Banc Resolution of the case allegedly to address the

legal and constitutional issue~ based on the following grounds:

1. a mere EO issued by the Office of the President and procured by a

government functionary would have the effect of a blanket

authority to reorganize a bureau, office, or agency attached to

various executive departments thereby granting the President of the

PH plenary power to reorganize the entire government bureaucracy

without the benefit of due deliberation, debate, and discussion of

members of the Congress, defeating the right of security of tenure to

a career position created by law/statute, and thus allowing an EO to

abolish an office created by law;

2. Sec. 4 of EO 245, dated July 24, 1987 issued by the

revolutionary government of Pres. Aquino, the law creating the NTA,which provides that the governing body of NTA is the Board of

Directors, would be rendered meaningless, ineffective and a dead

letter law, thus, reorganization is an ultra vires act of the

NTA Administrator ;

3. a mere EO would amend, supersede, and/or render

ineffective a law or statute .

ISSUE:Whether the NTA may be reorganized by an executive fiat,

not by legislative action.

NOTE: Notwithstanding the apparent procedural lapse on the part of

the petitioners to implead the Office of the President as party

respondent pursuant to Sec. 7, Rule 3, of the 1997 Revised Rules of

Civil Procedure, the SC resolved to rule on the merits of the petition.

HELD: YES. Reorganization involves the reduction of personnel,

consolidation of offices, or abolition thereof by reason of economy or

redundancy of functions. It takes place when there is an alteration of

the existing structure of government offices or units therein,

including the lines of control, authority and responsibility betweenthem.

The President has the authority to carry out reorganization in any

branch or agency of the executive department, what is left for the SC

to resolve is whether or not the reorganization is valid.

Reorganizations have been regarded as valid provided they are

pursued in good faith. Reorganization is carried our in good faith if it

is for the purpose of economy or to make bureaucracy more efficient.

RA 6656 provides for the circumstances which may be considered as

evidence of bad faith in the removal of civil service employees made

as a result of reorganization:a. where there is a significant increase in the number of positions in the

new staffing pattern of the department or agency concerned;

b. where an office is abolished and another performing substantially the

same functions is created;

c. where incumbents are replaced by those less qualified in terms of

status of appointment, performance, and merit;

d. where there is a classification of offices in the department or agency

concerned and the reclassified offices perform substantially the same

functions as the original offices; and

e. where the removal violates the order of separation.

The CA found no evidence of bad faith on the part of the NTA~

Firstly, the number of positions in the new staffing pattern did not

increase. Rather, it decreased from 1,125 positions to 750. It is thus

natural that ones position may be lost through the removal or

abolition of an office.

Secondly, the petitioners failed to specifically show which offices

were abolished and the new ones that were created performing

substantially the same functions.

Thirdly, the petitioners likewise failed to prove that less qualified

employees were appointed to the positions to which they applied.

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Fourthly, the preference stated in Section 4 of R.A. 6656, only

means that old employees should be considered first, but it does not

necessarily follow that they should then automatically be appointed.

This is because the law does not preclude the infusion of new blood,

younger dynamism, or necessary talents into the government service,

provided that the acts of the appointing power are bonafide for the

best interest of the public service and the person chosen has the

needed qualifications.

Eos 29 and 36 have not abolished the NTA but merely

mandated its reorganization through the streamlining or

reduction of its personnel. Art. VII, Sec. 17 of the

Constitution expressly grants the President control of al l

executive departments, bureaus, agencies, and offices

which may justify an executive action to inactivate the

functions of a particular office or to carry out

reorganization measures under a broad authority of law.

Sec. 78 of the General Provisions of RA 8522 (General

Appropriations Act of FY 1998) has decreed that the

President may direct changes in the organization and key

positions in any department, bureau, or agency pursuant to

Art. VI, Sec. 25 of the Constitution, which grants to the

Executive Department the authority to recommend the

budget necessary for its operation. Evidently, this grant of

power includes the authority to evaluate each and every

government agency, including the determination of the