Prelim Cases

7/24/2019 Prelim Cases

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DARIO VS MISON

The Court writes finis to this contreversy that has raged bitterly for the several months. It does so out of

ligitimate presentement of more suits reaching it as a consequence of the government reorganization

and the instability it has wrought on the performance and efficiency of the bureaucracy. The Court is

apprehensive that unless the final word is given and the ground rules are settled, the issue will fester,

and likely foment on the constitutional crisis for the nation, itself biset with grave and serious problems.

The facts are not in dispute.

On arch !", #$%&, 'resident Corazon (quino promulgated 'roclamation )o. *, +-C(/I)0 (

)(TIO)( 'OIC1 TO I'--)T T2- /-3O/4 ()(T- 51 T2- '-O'-, '/OT-CTI)0

T2-I/ 5(4IC /I02T4, (O'TI)0 ( '/O6I4IO)( CO)4TIT7TIO), () '/O6II)0 3O/ ()

O/-/1 T/()4ITIO) TO ( 0O6-/)-)T 7)-/ ( )-8 CO)4TIT7TIO).+ (mong other things,

'roclamation )o. * provided9

4-CTIO) #. ...

The 'resident shall give priority to measures to achieve the mandate of the people to9

:a; Completely reorganize the government, eradicate un, the 'resident promulgated -?ecutive Order )o. #!>, +/-O/0()IEI)

I)I4T/1 O3 3I)()C-.+ $ (mong other offices, -?ecutive Order )o. #!> provided

reorganization of the 5ureau of Customs #B and prescribed a new staffing pattern therefor.

Three days later, on 3ebruary !, #$%>, ## the 3ilipino people adopted the new Constitution.

On Danuary &, #$%%, incumbent Commissioner of Customs 4alvador ison issued a emoran

the nature of +0uidelines on the Implementation of /eorganization -?ecutive Orders,+ #! pre

the procedure in personnel placement. It also provided9

#. 5y 3ebruary !%, #$%%, the employees covered by -?ecutive Order #!> and the grace

e?tended to the 5ureau of Customs by the 'resident of the 'hilippines on reorganization shall be

a; informed of their reappointment, or


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b; offered another position in the same department or agency or

c; informed of their termination. #*

On the same date, Commissioner ison constituted a /eorganization (ppeals 5oard charged with

ad.

'ursuant to 4ection "$ of the same -?ecutive Order, all officers and employees of the epartment of

3inance, or the 5ureau of Customs in particular, shall continue to perform their respective duties and

responsibilities in a holdover capacity, and that those incumbents whose positions are not carried in the

new reorganization pattern, or who are not re appointed, shall be deemed separated from the service.

In this connection, we regret to inform you that your services are hereby terminated as of 3ebruary !%,

#$%%. 4ub= essrs. (dolfo

Caserano 'acifico agleva Dulian C. -spiritu, ennis (. (zarraga /enato de Desus, )icasio C.

0amboa, esdames Corazon /allos )ieves and 3elicitacion /. 0eluz essrs. eodegario 2. 3loresca,

4ubaer 'acasum s. Eenaida anaria r. Dose 5. Ortiz, s. 0liceria /. olar, s. Cornelia )apa,

'ablo 5. 4antos, 3ermin /odriguez, s. aligay 5autista, essrs. eonardo Dose, (lberto ontok,

'orfirio Tabino Dose 5arredo, /oberto (rnaldo, s. -ster Tan, essrs. 'edro 5akal, /osario avid,/odolfo (fuang, orenzo Catre,, s. eoncia Catre, and /oberto (baca, are the petitioners in 0./. )o.

%!B!*= the last !>$ #&individuals mentioned are the private respondents in 0./. )o. %"*#B.

(s far as the records will likewise reveal, #>a total of *$@ officials and employees of the 5ureau of

Customs were given individual notices of separation. ( number supposedly sought reinstatement with

the /eorganization (ppeals 5oard while others went to the Civil 4ervice Commission. The firs

one mentioned above came d irectly to this Court.

On Dune *B, #$%%, the Civil 4ervice Commission promulgated its ruling ordering the reinstatem

the !>$ employees, the !>$ private respondents in 0./. )o. %"*#B, the dispositive portion of

reads as follows9

82-/-3O/-, it is hereby ordered that9

#. (ppel lants be immediately reappointed to posi tions of compar

equivalent rank in the 5ureau of Customs without loss of seniority rights=

!. (ppellants be paid their back salaries reckoned from the dates of the

termination based on the rates under the approved new staffing pattern but no

than their former salaries.

This action of the Commission should not, however, be interpreted as an e?oneration

appellants from any accusation of wrongdoing and, therefore, their reappointments are

pre


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!. (ppellants be paid their back salaries to be reckoned from the date of their

illegal termination based on the rates under the approved new staffing pattern but not

lower than their former salaries.

This action of the Commission should not, however, be interpreted as an e?oneration of the

herein appellants from any accusation of any wrongdoing and therefore, their reappointments

are without pre, thereof9

4ec. $. (ll officers and employees who are found by the Civil 4ervice Commission to have

been separated in violation of the provisions of this (ct, shall be ordered reinstated or

reappointed as the case may be without loss of seniority and shall be entitled to full pay for the

period of separation. 7nless also separated for cause, all officers and employees, including

casuals and temporary employees, who have been separated pursuant to reorganization shall,

if entitled thereto, be paid the appropriate separation pay and retirement and other benefits

under e?isting laws within ninety :$B; days from the date of the effectivity of their separation or

from the date of the receipt of the resolution of their appeals as the case may be9 'rovided,

That application for clearance has been filed and no action thereon has been made by the

corresponding department or agency. Those who are not entitled to said benefits shall be paid

a separation gratuity in the amount equivalent to one :#; month salary for every year of

service. 4uch separation pay and retirement benefits shall have priority of payment out of the

savings of the department or agency concerned. !*

On Dune !*, #$%%, 5enedicto (masa and 8illiam ionisio, customs e?aminers appointed by

Commissioner ison pursuant to the ostensible reorganization sub*>.

On October !#, #$%%, thirtyfive more Customs officials whom the Civil 4ervice Commiss

ordered reinstated by its Dune *B,#$%% /esolution filed their own petition to compel the Commi

of Customs to comply with the said /esolution. The petition is docketed as 0./. )o. %"**".

On )ovember !$, #$%%, we resolved to consolidate all seven petitions.

On the same date, we resolved to set the matter for hearing on Danuary #!, #$%$. (t the said h

the parties, represented by their counsels :a; retired Dustice /uperto artin= :b; retired Dusti

'ata


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)o court or administrative body shall issue any writ of preliminary in, "Band that thereafter, public

officials en Constitution. "#

ike ario 6icente 3eria, the petitioner in 0./. )o. %#$&>, was a eputy Commissioner at the 5ureau

until his separation directed by Commissioner ison. (nd like ario he claims that under the #$%>

Constitution, he has acquired security of tenure and that he cannot be said to be covered by 4ection "$

of -?ecutive Order )o. #!>, having been appointed on (pril !!, #$%& H during the effectivity of the

'rovisional Constitution. 2e adds that under -?ecutive Order )o. *$, +-)(/0I)0 T2- 'O8-/4

() 37)CTIO)4 O3 T2- COI44IO)-/ O3 C74TO4,+"!the Commissioner of Customs has the

power +JtKo appoint all 5ureau personnel, e?cept those appointed by the 'resident,+ "*and that his

position, which is that of a 'residential appointee, is beyond the control of Commissioner ison for

purposes of reorganization.

The petitioners in 0./. )o. %!B!*, collectors and e?aminers in venous ports of the 'hilippines, say, on

the other hand, that the purpose of reorganization is to end corruption at the 5ureau of Customs and

that since there is no finding that they are guilty of corruption, they cannot be validly dismissed from the

service.

'he (ase )or (ommissio$er iso$

In his comments, the Commissioner relies on this CourtFs resolution in /ose 0.Arro+o"@ in which the

following statement appears in the last paragraph thereof9

The contention of petitioner that -?ecutive Order )o. #!> is violative of the provision of the

#$%> Constitution guaranteeing career civil service employees security of tenure overlooks the

provisions of 4ection #&, (rticle L6III :Transitory 'rovisions; which e?plicitly authorize the

removal of career civil service employees +not for cause but as a result of the reorganizationpursuant to 'roclamation )o. * dated arch !", #$%& and the reorganization following the

ratification of this Constitution.+ 5y virtue of said provision, the reorganization of the 5ureau of

Customs under -?ecutive Order )o. #!> 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.""

3or this reason, ison posits, claims of violation of security of tenure are allegedly no defen

further states that the deadline prescribed by the 'rovisional Constitution :3ebruary !", #$%>; ha

superseded by the #$%> Constitution, specifically, the transitory provisions thereof, "&which a

reorganization thereafter :after 3ebruary !", #$%>; as this very Court has so declared in /ose 0.

ison submits that contrary to the employeesF argument, 4ection "$ of -?ecutive Order )o.

applicable :in particular, to ario and 3eria in the sense that retention in the 5ureau, un

-?ecutive Order, depends on either retention of the position in the new staffing pattern or reappo

of the incumbent, and since the dismissed employees had not been reappointed, they ha

considered legally separated. oreover, ison proffers that under 4ection "$ incumbe

considered on holdover status, +which means that all those positions were considered vacant

4olicitor 0eneral denies the applicability of -alma2er$a$%e3 0. e la -a3 "% because th

supposedly involved a mere transfer and not a separation. 2e re and *$ for the reason that -?ecutive Order )o. #>, which was m

implement the 'rovisional Constitution, "$had ceased to have force and effect upon the ratific

the #$%> Constitution, and that, under -?ecutive Order )o. *$, the dismissals contemplated w

cause+ while the separations now under question were +not for cause+ and were a result of gove

reorganize organization decreed by -?ecutive Order )o. #!>. (nent /epublic (ct )o. &&

e?presses doubts on the constitutionality of the grant of retroactivity therein :as rega

reinforcement of security of tenure; since the new Constitution clearly allows reorganization

effectivity.

G.R. Nos. 85#1" a$% 86!41

'he -ositio$ o) (ommissio$er iso$

CommissionerFs twin petitions are direct challenges to three rulings of the Civil 4ervice Commissthe /esolution, dated Dune *B, #$%%, reinstating the !&" customs employees abovestated=

/esolution, dated 4eptember !B, #$%%, denying reconsideration= and :*; the /esolution

)ovember #&, #$%%, reinstating five employees. The CommissionerFs arguments are as follows9

#. The ongoing government reorganization is in the nature of a +progressive+ &Breorga

+impelled by the need to overhaul the entire government bureaucracy+ following the people

revolution of #$%&=

!. There was faithful compliance by the 5ureau of the various guidelines issued by the 'r

in particular, as to deliberation, and selection of personnel for appointment under the new

pattern=

*. The separated employees have been, under 4ection "$ of -?ecutive Order )o. #!>, o

holdover standing, +which means that all positions are declared vacant=+

&!

@. /ose 0. Arro+ohas declared the validity of -?ecutive Order )o. #!> under the tra

provisions of the #$%> Constitution=

". /epublic (ct )o. &&"& is of doubtful constitutionality.


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'he Ruli$ o) the (i0il er0ice (ommissio$

The position of the Civil 4ervice Commission is as follows9

#. /eorganizations occur where there has been a reduction in personnel or redundancy of

functions= there is no showing that the reorganization in question has been carried out for either

purpose H on the contrary, the dismissals now disputed were carried out by mere service of notices=

!. The current Customs reorganization has not been made according to alacaM=ang guidelines=

information on file with the Commission shows that Commissioner ison has been appointing

unqualified personnel=

*. /ose 0. Arro+o, in validating -?ecutive Order )o. #!>, did not countenance illegal removals=

@. /epublic (ct )o. &&"& protects security of tenure in the course of reorganizations.

'he (ourts ruli$

Reora$i3atio$, 2u$%ame$tal -ri$ciples o).H

I.

The core provision of law involved is 4ection #& (rticle L6III, of the #$%> Constitution. 8e quote9

4ec. #&. Career civil service employees separated from the service not for cause but as a

result of the reorganization pursuant to 'roclamation )o. * dated arch !", #$%& and the

reorganization following the ratification of this Constitution shag be entitled to appropriate

separation pay and to retirement and other benefits accruing to them under the laws of general

application in force at the time of their separation. In lieul thereof, at the option of the

employees, they may be considered for employment in the 0overnment or in any of its

subdivisions, instrumentalities, or agencies, including governmentowned or controlled

corporations and their subsidiaries. This provision also applies to career officers whose

resignation, tendered in line with the e?isting policy, had been accepted. &*

The Court considers the above provision critical for two reasons9 :#; It is the only provision H in so far

as it mentions removals not for cause H that would arguably support the challenged dismissals by mere

notice, and :!; It is the single e?isting law on reorganization after the ratification of the #$%> Charter,

e?cept /epublic (ct )o. &&"&, which came much later, on Dune #B, #$%%. J)ota been -?ecutive Orders

)o. ##& :covering the inistry of (griculture N 3ood;, ##> :inistry of -ducation, Culture N 4ports;, ##$:2ealth;, #!B :Tourism;, #!* :4ocial 8elfare N evelopment;, #!@ :'ublic 8orks N 2ighways;, #!"

transportation N Communications;, #!& :abor N -mployment;, #!> :3inance;, #!% :4cience N

Technology;, #!$ :(grarian /eform;, #*# :)atural /esources;, #*! :3oreign (ffairs;, and #** :Trade N

Industry; were all promulgated on Danuary *B,#$%>, prior to the adoption of the Constitution on

3ebruary !, #$%>K.&@

It is also to be observed that unlike the grants of power to effect reorganizations under th

Constitutions, the above provision comes as a mere recognition of the right of the 0overnm

reorganize its offices, bureaus, and instrumentalities. 7nder 4ection @, (rticle L6I, of th

Constitution9

4ection @. (ll officers and employees in the e?isting 0overnment of the 'h

Islands shall continue in office until the Congress shall provide otherwise, but all officers

appointments are by this Constitution vested in the 'resident shall vacate their res

office:s; upon the appointment and qualification of their successors, if such appoint

made within a period of one year from the date of the inauguration of the Commonw

the 'hilippines. &"

7nder 4ection $, (rticle L6II, of the #$>* Charter9

4ection $. (ll officials and employees in the e?isting 0overnment of the /epubl

'hilippines shall continue in office until otherwise provided by law or decreed by the inc

'resident of the 'hilippines, but all officials whose appointments are by this Con

vested in the 'rime inister shall vacate their respective offices upon the appointm

qualification of their successors. &&

The 3reedom Constitution is, as earlier seen, couched in similar language9

4-CTIO) !. (ll elective and appointive officials and employees under the

Constitution shall continue in office until otherwise provided by proclamation or e?ecutiv

or upon the appointment and qualification of their successors, if such is made within a

of one year from 3ebruary !", #$%&.&>

Other than references to +reorganization following the ratification of this Constitution,+ ther

provision for +automatic+ vacancies under the #$%> Constitution.

Invariably, transition periods are characterized by provisions for +automatic+ vacancies. Th

dictated by the need to hasten the passage from the old to the new Constitution free from the +fe

due process and security of tenure.

(t this point, we must distinguish removals from separations arising from abolition of office :not b

of the Constitution; as a result of reorganization carried out by reason of economy or to r

redundancy of functions. In the latter case, the 0overnment is obliged to prove good faith. &%In

removals undertaken to comply with clear and e?plicit constitutional mandates, the 0overnmen

hard put to prove anything, plainly and simply because the Constitution allows it.

-vidently, the question is whether or not 4ection #& of (rticle L6III of the #$%> Constitution is a g

a license upon the 0overnment to remove career public officials it could have validly done un

+automatic+ vacancyauthority and to remove them without rhyme or reason.


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(s we have seen, since #$*", transition periods have been characterized by provisions for +automatic+

vacancies. 8e take the silence of the #$%> Constitution on this matter as a restraint upon the

0overnment to dismiss public servants at a momentFs notice.

8hat is, indeed, apparent is the fact that if the present Charter envisioned an +automatic+ vacancy, it

should have said so in clearer terms, as its #$*", #$>*, and #$%& counterparts had so stated.

The constitutional +lapse+ means either one of two things9 :#; The Constitution meant to continue the

reorganization under the prior Charter :of the /evolutionary 0overnment;, in the sense that the latter

provides for +automatic+ vacancies, or :!; It meant to put a stop to those Fautomatic+ vacancies. 5y itself,

however, it is ambiguous, referring as it does to two stages of reorganization H the first, to its

conferment or authorization under 'roclamation )o. * :3reedom Charter; and the second, to itsimplementation on its effectivity date :3ebruary !, #$%>;.lwph1.t 5ut as we asserted, if the intent of

4ection #& of (rticle L6III of the #$%> Constitution were to e?tend the effects of reorganize tion under

the 3reedom Constitution, it should have said so in clear terms. It is illogical why it should talk of two

phases of reorganization when it could have simply acknowledged the continuing effect of the first

reorganization.

4econd, plainly the concern of 4ection #& is to ensure compensation for victims+ of constitutional

revamps H whether under the 3reedom or e?isting Constitution H and only secondarily and impliedly,

to allow reorganization. 8e turn to the records of the Constitutional Commission9

I)G7I/1 O3 /. '(I(

On the query of r. 'adilla whether there is a need for a specific reference to 'roclamation

)o. * and not merely state +result of the reorganization following the ratification of thisConstitutionF, r. 4uarez, on behalf of the Committee, replied that it is necessary, inasmuch as

there are two stages of reorganization covered by the 4ection.

r. 'adilla pointed out that since the proposal of the Commission on 0overnment

/eorganization have not been implemented yet, it would be better to use the phrase

+reorganization before or after the ratification of the ConstitutionF to simplify the 4ection. r.

4uarez instead suggested the phrase +as a result of the reorganization effected before or after

the ratification of the ConstitutionF on the understanding that the provision would apply to

employees terminated because of the reorganization pursuant to 'roclamation )o. * and even

those affected by the reorganization during the arcos regime. (dditionally, r. 4uarez

pointed out that it is also for this reason that the Committee specified the two Constitutions the

3reedom Constitution H and the #$%& J#$%>K Constitution. &$

4imply, the provision benefits career civil service employees separated from the service. (nd theseparation contemplated must be due to or the result of :#; the reorganization pursuant to 'roclamation

)o. * dated arch !", #$%&, :!; the reorganization from 3ebruary !, #$%>, and :*; the resignations of

career officers tendered in line with the e?isting policy and which resignations have been accepted. The

phrase +not for cause+ is clearly and primarily e?clusionary, to e?clude those career civil service

employees separated +for cause.+ In other words, in order to be entitled to the benefits granted under

4ection #& of (rticle L6III of the Constitution of #$%>, two requisites, one negative and the other

positive, must concur, to wit9

#. the separation must not be for cause, and

!. the separation must be due to any of the three situations mentioned a

5y its terms, the authority to remove public officials under the 'rovisional Constitution en

3ebruary !", #$%>, advanced by . >BIt Can only mean, th

whatever reorganization is taking place is upon the authority of the present Charter, and nece

upon the mantle of its provisions and safeguards. 2ence, it can not be legitimately stated that

merely continuing what the revolutionary Constitution of the /evolutionary 0overnment had star

are through with reorganization under the 3reedom Constitution H the first stage. 8e are

second stage H that inferred from the provisions of 4ection #& of (rticle L6III of the permanen

document.

This is confirmed not only by the deliberations of the Constitutional Commission, supra, but is a

from the CharterFs own words. It also warrants our holding in *suerraand -alma2er$a$%e3, i

we categorically declared that after 3ebruary !, #$%>, incumbent officials and employees have a

security of tenure, which is not a deterrent against separation by reorganization under the qu

fundamental law.

3inally, there is the concern of the 4tate to ensure that this reorganization is no +purge+

e?ecrated reorganizations under martial rule. (nd, of course, we also have the democratic char

the Charter itself.

Commissioner ison would have had a point, insofar as he contends that the reorganization is

ended :+progressive+;, had it been a reorganization under the revolutionary authority, specificall

'rovisional Constitution. 3or then, the power to remove government employees would have bewide ranging and limitless, not only because 'roclamation )o. * permitted it, but because of the

of revolutionary authority itself, its totalitarian tendencies, and the monopoly of power in the m

women who wield it.

8hat must be understood, however, is that notwithstanding her immense revolutionary pow

'resident was, nevertheless, magnanimous in her rule. This is apparent from -?ecutive Order

which established safeguards against the strong arm and ruthless propensity that accom

reorganizations H notwithstanding the fact that removals arising therefrom were +not for cause,

spite of the fact that such removals would have been valid and unquestionable. espite that, th

-?ecutive saw, as we said, the +unnecessary an?iety and demoralization+ in the government ra

file that reorganization was causing, and prescribed guidelines for personnel action. 4pecifica

said on ay !%, #$%&9

82-/-(4, in order to obviate unnecessary an?iety and demoralization among the deofficials and employees, particularly in the career civil service, it is necessary to presc

rules and regulations for implementing the said constitutional provision to protect care

servants whose qualifications and performance meet the standards of service deman

the )ew 0overnment, and to ensure that only those found corrupt, inefficient and unde

are separated from the government service= >#


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)oteworthy is the in Constitution. /ose 0.

Arro+o>*is said to be the authority for this argument. -vidently, if (rroyo indeed so ruled, (rroyo would

be inconsistent with the earlier pronouncement of *suerraand the later holding of -alma2er$a$%e3.

The question, however, is9 id (rroyo, in fact, e?tend the effects of reorganization under the

revolutionary Charter to the era of the new Constitution

There are a few points about (rroyo that have to be e?plained. 3irst, the opinion e?pressed therein that

+JbKy virtue of said provision the reorganization of the 5ureau of Customs under -?ecutive Order )o.

#!> may continue even after the ratification of this constitution and career civil service employees may

be separated from the service without cause as a result of such reorganization+ >@is in the nature of an

obiter dictum. 8e dismissed DoseFs petition >"primarily because it was +clearly premature, speculative,

and purely anticipatory, based merely on newspaper reports which do no t show any direct or threatened

in&it appearing that the reorganization of the 5ureau of Customs had not been, then, set in

motion. Dose therefore had no cause for complaint, which was enough basis to dismiss the petition. The

remark anent separation +without cause+ was therefore not necessary for the disposition of the case. In

orales 0. -ara%es,>>it was held that an o;iter %ictum+lacks the force of an ad%

4econdly,Arro+o is an unsigned resolution while -alma 2er$a$%e3 is a fullblown decision, althoughboth are e$ ;a$ccases. 8hile a resolution of the Court is no less forceful than a decision, the latter has

a special weight.

Thirdly, -alma2er$a$%e3 0. e la -a3comes as a later doctrine. :/ose 0. Arroyo was promulgated on

(ugust ##, #$%> while -alma2er$a$%e3was decided on (ugust *#, #$%>.; It is wellestablished that a

later Constitution allude to two stages

reorganization, the first stage being the reorganization under 'roclamation )o. * H which had

been consummated H the second stage being that adverted to in the transitory provisions them

H which is underway. 2ence, when we spoke, in Arro+o, of reorganization after the effectivit

new Constitution, we referred to the second stage of the reorganization. (ccordingly, we cannot

to have carried over reorganization under the 3reedom Constitution to its #$%> counterpart.

3inally,Arro+ois not necessarily incompatible with -alma2er$a$%e3:or *suerra;.

(s we have demonstrated, reorganization under the aegis of the #$%> Constitution is not as s

reorganization under the prior Charter. 8hereas the latter, sans the 'residentFs subsequently im

constraints, envisioned a purgation, the same cannot be said of the reorganization inferred unnew Constitution because, precisely, the new Constitution seeks to usher in a democratic regi

even if we concede e7 ratia arume$ti that 4ection #& is an e?ception to due process a

removal+e?cept for cause provided by law+ principles enshrined in the very same #$%> Constit

which may possibly after the rat

of the #$%> Constitution, Arro+opermitted a reorganization provided that it is done in goo

Otherwise, security of tenure would be an insuperable implement. %B

/eorganizations in this


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need to merge, divide, or consolidate positions in order to meet the e?igencies of the service,

or other lawful causes allowed by the Civil 4ervice aw. The e?istence of any or some of the

following circumstances may be considered as evidence of bad faith in the removals made as

a result of reorganization, giving rise to a claim for reinstatement or reappointment by an

aggrieved party9 :a; 8here there is a significant increase in the number of positions in the new

staffing pattern of the department or agency concerned= :b; 8here an office is abolished and

another performing substantially the same functions is created= :c; 8here incumbents are

replaced by those less qualified in terms of status of appointment, performance and merit= :d;

8here 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; 8here

the removal violates the order of separation provided in 4ection * hereof. %@

It is in light hereof that we take up questions about Commissioner isonFs good faith, or lack of it.

Reora$i3atio$ o) the =ureau o) (ustoms,

ac> o) Goo% 2aith i$. :

The Court finds that after 3ebruary !, #$%> no perceptible restructuring of the Customs hierarchy H

e?cept for the change of personnel H has occurred, which would have when the #$%> Constitution became e

:e eon. et al., vs. 2on. 5en%B"$, *# (ugust

(fter the said date the provisions of the latter on security of tenure govern. $B

It should be seen, finally, that we are not barring Commissioner ison from carrying

reorganization under the transitory provisions of the #$%> Constitution. 5ut such a reorganization

be sub


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of tenure $#and as far as it provides for a retroactive effect, $!runs counter to the transitory provisions of

the new Constitution on removals not for cause.

It can be seen that the (ct, insofar as it provides for reinstatament of employees separated without +a

valid cause and after due notice and hearing+ $*is not contrary to the transitory provisions of the new

Constitution. The Court reiterates that although the CharterFs transitory provisions mention separations

+not for cause,+ separations thereunder must nevertheless be on account of a valid reorganization and

which do not come about automatically. Otherwise, security of tenure may be invoked. oreover, it can

be seen that the statute itself recognizes removals without cause. 2owever, it also acknowledges the

possibility of the leadership using the artifice of reorganization to frustrate security of tenure. 3or this

reason, it has installed safeguards. There is nothing unconstitutional about the (ct.

8e recognize the inK; (fter abolition, there is in law no occupant. Thus, there can be no tenure to speak of

this sense that from the standpoint of strict law, the question of any impairment of sec

tenure does not arise. :e la lana vs. (lba, ##! 4C/( !$@ J#$%!K;

!. I.= I.= I.= /-O/0()IE(TIO), 6(I 82-) '7/47- I) 0OO 3(IT2= C(

5(/. H )othing is better settled in our law than that the abolition of an office wit

competence of a legitimate body if done in good faith suffers from no infirmity. Two que

therefore arise9 :#; was the abolition carried out by a legitimate body= and :!; was it done i

faith There is no dispute over the authority to carry out a valid reorganization in any braagency of the 0overnment. 7nder 4ection $, (rticle L6II of the #$>* Constitution. The po

reorganize is, however= not absolute. 8e have held in ario vs. ison that reorganizations


11/40

for special immunity as regards salary and tenure, no one can be said to have any vested right in

an office or its salary. )one of the e?ceptions to this rule are obtaining in this case. To reiterate,

the position which private respondent 0arcia would like to occupy anew was abolished pursuant to

-?ecutive Order )o. &@$, a valid reorganization measure. There is no vested property right to be

re employed in a reorganized office. )ot being a member of the 5ar, the minimum requirement to

qualify under the reorganization law for permanent appointment as eputy /egister of eeds II,

she cannot be reinstated to her former position without violating the e?press mandate of the law.

- C I 4 I O )

C('O4, D/., D p9

The sole issue for our consideration in this case is whether or not membership in the bar, which is

the qualification requirement prescribed for appointment to the position of eputy /egister ofeeds under 4ection @ of -?ecutive Order )o. &@$ :/eorganizing the and /egistration

Commission :/C; into the )ational and Titles and eeds /egistration (dministration or

)(T/(; should be required of andAor applied only to new applicants and not to those who were

already in the service of the /C as deputy register of deeds at the time of the issuance and

implementation of the abovesaid -?ecutive Order.

The facts, as succinctly stated in the /esolution of the Civil 4ervice Commission, are as follows9

+The records show that in #$>>, petitioner 0arcia, a 5achelor of aws graduate and a first grade

civil service eligible was appointed eputy /egister of eeds 6II under permanent status. 4aid

position was later reclassified to eputy /egister of eeds III pursuant to ' #"!$, to which

position, petitioner was also appointed under permanent status up to 4eptember #$%@. 4he was

for two years, more or less, designated as (cting 5ranch /egister of eeds of eycauayan,

5ulacan. 5y virtue of -?ecutive Order )o. &@$ :which took effect on 3ebruary $, #$%#; which

authorized the restructuring of the and /egistration Commission to )ational and Titles and

eeds /egistration (dministration and regionalizing the Offices of the /egisters therein, petitioner

0arcia was issued an appointment as eputy /egister of eeds II on October #, #$%@, under

temporary status, for not being a member of the 'hilippine 5ar. 4he appealed to the 4ecretary of

Dustice but her request was denied. 'etitioner 0arcia moved for reconsideration but her motion

remained unacted. On October !*, #$%@, petitioner 0arcia was administratively charged with

Conduct 're


12/40

the 'hilippines, but all officials whose appointments are by this Constitution vested in the 'rime

inister shall vacate their respective offices upon the appointment and qualifications of their

successors.

The power to reorganize is, however= not absolute. 8e have held in ario vs. ison > that

reorganizations in this arch #$%$ in Civil Case )o. %&*

5ranch !& of the /egional Trial Court of anila on the following grounds9 :a; the funds upon wh

attorneyFs fees are sought to be e?ecuted now belong to the /epublic of the 'hilippines due t

subrogation, :b; e?ecution is not proper against the /epublic which is not a party to the case,

issuance of a writ of e?ecution would violate the Constitution since according to it no money s

paid out of the treasury e?cept in pursuance to an appropriations made by law, and :d; e?ecu

attomeyFs fees is unwarranted.

/espondent Court of (ppeals dismissed the petition for lack of merit principally because

:a; 7nder the compromise agreement petitioner :/'5; accepted the designationAappointTrustee whose obligation is to pay= it received benefits by way of trusteeFs fees= it may not ques

right of private respondents to attorneyFs fees=

:b; 'etitioner :4/(; may not lawfully bring an action on behalf of the /epublic of the 'hi

since under 4ection #* of -?ecutive Order )o. #% dated !% ay #$%&, which created it, it simply

take over the functions of the defunct '2I47CO= however, the latter was to remain a


13/40

Order andAor 'reliminary In"B;. '2I47CO and )(47T/( filed their +Comment and

Opposition :To otion for Issuance of 8rit of -?ecution;+ :(nne? 'etition, Id., pp. "# &!;. ( /eplywas filed by the plaintiffs :(nne? +-+, Id., pp. &* >!; and a /e$$%;. This Order dated

#*, #$%$ :which as aforesaid, dismissed the petitions for relief from ;, which declared that there was no valid class suit and the contro

compromise agreement did not e?tend to the @B,BBB unnamed sugar producers. *

In the resolution of !& October #$%$ 8e required respondents to comment on the petition and is

temporary restraining order directing respondent Dudge to desist and refrain from further procee

Civil Case )o. %&*"%%B, entitled /epublic 'lanters 5ank, et al. vs. 'hilippine 4ugar Commissio

@

On !* )ovember #$%$ petitioners filed a manifestation informing this Court that at $9*B a.m

October #$%$, private respondents, accompanied by respondents sheriff and a squad of police

(ction 3orce, swooped upon /'5Fs 5acolod 5ranch and divested a teller of money from he

allegedly because the branch manager had instructed the bank personnel to close the bank vau

the enforcement of the court order was being verified with the head office in anila= the amoun

was '#>$,$"".*#= these acts were allegedly done by virtue of, among others, the orders dated O!@ and !", #$%$ of respondent


14/40

(fter motions for e?tension of time to f ile their Comments on the petition, separately filed by the private

respondents and the 4olicitor 0eneral for the public respondents, were granted, the former ultimately

filed their Comment on !B ecember #$%$. > The 4olicitor 0eneral filed his Comment on @ Danuary

#$$B. %

In his Comment the 4olicitor 0eneral maintains that the 4/( has no legal personality to file the instant

petition in the name of the /epublic of the 'hilippines for under its charter, -?ecutive Order )o. #%, the

4/( is not vested with legal capacity to sue. 2e further argues that the 4/( was not a party to the

courtapproved compromise agreement in Civil Case )o. %&*"%%B which provided for the questioned

#BQ attorneyFs fees= '2I47CO and )(47T/(, which were parties thereto, did not file any action to

annul the compromise agreement= that while -?ecutive Order )o. #% abolished the '2I47CO, the

latterFs %.

The 4olicitor 0eneral likewise stresses that the interest of the national government in this case is

confined only to the amount remaining in /'5 sub


15/40

#%% on behalf of the /epublic of the 'hilippines.

This conclusion does not, however, mean that the 4/( cannot sued and be sued. This power can be

implied from its powers to make and e?ecute routinary contracts as may be necessary for or incidental

to the attainment of its purposes between any persons, firms public or private, and the 0overnment of

the 'hilippines and to do all such other things, transact such other businesses and perform such other

functions directly or indirectly incidental or conducive to the attainment of the purposes of the 4/( and

the powers of its governing board to enter into contracts, transactions, or undertaking of whatever

nature which are necessary or incidental to its functions and ob, #$%% informing the court that its appearance in the case +is limited to the issues relating

only to the contempt proceedings against the public respondents and is not concerned with the other

issues raised by various parties in their petitions for relief+. !! 5y reason thereof, the

ChairmanA(dministrator of 4/(, r. (rsenio 1ulo, Dr., sent a letter !* dated & (pril #$%% to the 4olicitor

0eneral, informing him that since the appearance of the O40 is limited and that it has taken a different

position, 4/(Fs only alternative is to seek another representative and that much to its regret, it is

constrained to terminate O40Fs services. 2e further informed the 4olicitor 0eneral that the case is

being indorsed to the Office of the 0overnment Corporate Counsel for appropriate legal action pursuant

to '.. )o. @>%. There is, however, no showing that the O40 withdrew its appearance for '2I47CO,

)(47T/( or the 4/( in the trial court. On the contrary, per its anifestation dated % 3ebruary #$$B,

and filed with this Court on #! 3ebruary #$$B, !@ it +has retained its appearance+ +on behalf of the

/epublic of the 'hilippines to recover whatever amount may be owing to the )ational Treasury by virtue

of legal subrogation.+

(lso on (pril &,#$%%, 4/( sent a letter !" to O0CC to engage its legal services to represent 4/( as

successor agency of the '2I47CO in the case pending before the trial court.

The O0CC, availing of '.. )o. #@#", the law creating it, particularly 4ection # which, as quoted

page #& of the 'etition, !& reads9

4-CTIO) #. The Office of the 0overnment Corporate Counsel shall be the principal law o

all governmentowned and controlled corporations, including their subsidiaries e?cept as may ot

be provided by their respective charters or authorized by the 'resident :-mphasis supplied;.

sent a letter to the Office of the 'resident, +in essence, requesting for authority for O0CC to re

4/( in the case before the trial court,+ This was favorably acted by -?ecutive 4ecretary C

acaraig, Dr. !>

Indeed, under 4ection *", Chapter #!, Title III of 5ook I6 of the (dministrative Code of #$%> :-?

Order )o. !$!; the 4olicitor 0eneral is the lawyer of the government, its agencies and instrumen

and its officials or agents. 4aid 4ection reads as follows9

4-CTIO) *". 3unctions and Organization. H The Office of the 4olicitor 0eneral shall repre

0overnment of the 'hilippines, its agencies and instrumentalities and its officials and agents

litigation, proceeding, investigation or matter requiring the services of lawyers. 8hen authorized

'resident or head of the office concerned, it shall also represent governmentowned and co

corporations. The Office of the 4olicitor 0eneral shall constitute the law office of the 0overnme

as such, shall discharge duties requiring the services of lawyers. ... .

This is similar to subsection :#; of 4ection # of '.. )o. @>%.

In /epublic, et al. vs. 'artisala et al. :0./. )o. $$>, #" )ovember #$%!, ##% 4C/( *>B, *>

ruled that only the 4olicitor 0eneral can bring or defend actions on behalf of the /epublic

'hilippines and that, henceforth, actions filed in the name of the /epublic if not initiated by the 4

0eneral will be summarily dismissed.

2owever, in 4ecretary Oscar Orbos vs. Civil 4ervice Commission, et al., 0./. )o. $!", #! 4ep

#$$B, !% 8e stated9

In the discharge of this task, the 4olicitor 0eneral must see to it that the best interest of the goveis upheld within the limits set by law. 8hen confronted with a situation where one governmen

takes an adverse position against another government agency, as in this case, the 4olicitor 0

should not refrain from performing his duty as the lawyer of the government. It is incumbent upon

present to the court what he considers should legally uphold the best interest of the gove

although it may run counter to a clientFs position. In such an instance the government office ad

affected by the position taken by the 4olicitor 0eneral, if it still believes in the merit of its cas

appear in its own behalf through its legal personnel or representative.

Consequently, the 4/( need not be represented by the Office of the 4olicitor 0eneral. It may ap

its own behalf through its legal personnel or representative.

The question that logically crops up then is9 ay it be represented by the O0CC /espondents h

negative view. 'etitioners maintain otherwise, for the reason that pursuant to 4ection # of the ch

the O0CC :'.. )o. #@#";, as they quoted, the Office of the 'resident, through the -?ecutive 4e

has authorized it to represent the 4/(. The specific basis for such authority is the alleged portio

e?ceptionary clause therein, reading +... or authorized by the 'resident.+

The words or authorized by the 'resident are not found in the law. 8e are not aware of any law,

or e?ecutive order which amended 4ection # of '.. )o. #@#" by inserting therein said words. 5

even granting for the sake of argument that such words are written into the law, such e?ception

confer upon the O0CC authority to represent the 4/(. The e?ception simply means that althou

O0CC is the principal law office of all governmentowned and controlled corporations includi

subsidiaries, the 'resident may not allow it to act as lawyer for a specified governmentow


16/40

controlled corporation or a subsidiary thereof. It will be noted that under 4ection # of '.. )o. @>% the

'resident may authorize the O40 to represent governmentowned or controlled corporations. In short,

the e?ception limits, rather than e?pands, the authority of the O0CC. Thus, the socalled approval by

the -?ecutive 4ecretary of the request of O0CC to represent the 4/( is based on an erroneous

interpretation of the law.

In any case, even if we grant that there was such an e?ception, as well construed in the manner urged

by petitioners, it must be deemed, nevertheless, to have been repealed by the (dministrative Code of

#$%>. 4ection #B, Chapter *, Title III, 5ook I6 thereof on the Office of the 0overnment Corporate

counsel does not contain the purported e?ception. It reads9

4-CTIO) #B. Office of the 0overnment Corporate Counsel. HThe Office of the 0overnment

Corporate Counsel :O0CC; shall act as the principal law office of all governmentowned or controlled

corporations, their subsidiaries, other corporate offsprings and government acquired asset corporationsand shall e?ercise control and supervision over all legal departments or divisions maintained separately

and such powers and functions as are now or may hereafter be provided by law. In the e?ercise of such

control or suspension, the 0overnment Corporate Counsel shall promulgate rules and regulations to

effectively implement the ob;. *B The case was a petition for certiorari and mandamus with a prayer for preliminary

in, #$">;.

3or that matter, in the case below, therein plaintiffs Eosimo aravilla, /osendo dela /ama and 5

4abino filed with the respondent court a motion to partially annul decision andAor petition fo

against the said ten :#BQ; percent attorneyFs fees on the allegation that they were deceived into

the compromise agreement believing, as was agreed upon during the negotiations, that the ten

percent of whatever would be collected would go to a trust fund for the benefit of the sugar farme

producers and not as attorneyFs fees. (lso, petition, for relief was filed by thirteen other alleged

producers principally on the ground that the compromise agreement entered into was witho

e?press authority by way of 4pecial 'ower of (ttorney and that the class suit was unnecessary

of these sugar producers are the (ssociation de (gricultores de la /egion Oesta de 5atang

:((/O5; with >@! members= the 4amahang agaasukal sa Panluran 5atangas :4(5(; with

members and Independent 4ugar 3armers, Inc. with !BB members.

2ere is a situation, as pointed out by respondent )(47T/( and 4/(, where petitioners in fil

class suit claim to represent @B,BBB sugar producers all over the country and yet when some o

producers filed petition for relief and interventions, petitioners FdisownedF them, stating that th

sugar producers have no personality to intervene, not having been named parties to the class su

It should not be overlooked that the said sugar producers, although not named parties in the cla

are the very alleged persons represented in the class suit. They certainly have interests in the

matter of the controversy= in the contents of the compromise agreement.

The filing of petitions for relief from


17/40

I6.

2aving disposed of the main issues, 8e shall now consider the motion of petitioners of #& Danuary

#$$B to hold in contempt respondent Dudge Corona Ibay4omera for violatingAdefying the Temporary

/estraining Order issued by 7s on !& October #$%$. They allegedly +continued to hear the case

particularly on the whereabouts of #>>,B%>.#@ piculs of sugar for the crop year #$%@#$%" allegedly

stored in different warehouses throughout the country,+ and that she even further reset the hearing of

the case on Danuary #$, #$$B notwithstanding the cautionary manifestation filed by petitioners during

the #" ecember #$%$ hearing that said continued hearing would be a violation of the T/O. In the

resolution of !& October #$%$, this Court specifically ordered respondent Dudge to desist and refrain

from further proceeding in Civil Case )o. %&*"%%B, entitled /epublic 'lanters 5ank, et al. vs. 'hilippine

4ugar Commission, et al.

In her Compliance, respondent #%%, which is the

sub


18/40

resolution and upholding the validity of the appointment of petitioner (bila on substantially the same

grounds pleaded by the latter.

In a resolution dated !& Duly #$$B, the Court ordered consolidation of the two :!; cases for their more

convenient disposition.

The recurring issue posed in this case is whether the respondent Commission has authority to

substitute its own


19/40

8hen, in the e?ercise of its rulemaking power, it promulgated 4ection @ of its earlier /esolution )o. %*

*@*, the Commission clearly e?ceeded the scope of its statutory authority since the Civil 4ervice law

itself, in 4ection #$ :*; of '.. )o. %B>, had simply provided that persons ne?t in rank who are qualified

+shall be considered for promotion.+ The current regulation found in 4ection ! of /ule III of the

CommissionFs /esolution )o. %$>>$ is, fortunately, more consistent with the CommissionFs enabling

statute.

3inally, respondent Commission will find no comfort in eram v. -dralin#* which it cites. In that case,

the Court affirmed the appointment of the ne?t in rank +because the original appointeeFs appointment

was made in consideration of the political, ethnic, religious or blood ties totally against the very purpose

behind the establishment of professionalism in the civil service.+#@ In the case at bar, respondents have

not asserted the e?istence of any circumstances, such as those in eram, which would have warranted

intervention by the Commission to correct an arbitrary and merely capricious e?ercise of power by the

appointing authority.

(CCO/I)01, the Court /esolved to T/-(T respondentsF Comments as their (nswers, to 0/()T

due course to the 'etition for Certiorari and to ())7 and 4-T (4I- the /esolutions of the

respondent Civil 4ervice Commission )os. %$%&$ :!# )ovember #$%$; and $B!@B :" arch #$$B;,

respectively. The Temporary /estraining Order dated #$ (pril #$$B is hereby (- '-/()-)T.

3ernan, C.D., )arvasa, elencio2errera, 0utierrez, Dr., Cruz, 'aras, 0ancayco, 'adilla, 5idin,

4armiento, 0riMo(quino, edialdea, /egalado and avide, Dr., DD., concur.

G.R. No. 10&97 O/to;er &), 199)

IRON AND STEEL A+TORIT, petitioer,

!".

TE #O+RT O- AEALS $% MARIA #RISTINA -ERTILIER #ORORA

re"po%et".

3-ICI()O, D.9

'etitioner Iron and 4teel (uthority :+I4(+; was created by 'residential ecree :'..; )

dated $ (ugust #$>* in order, generally, to develop and promote the iron and steel induthe 'hilippines. The ob


20/40

The )ational 4teel Corporation :+)4C+; then a wholly owned subsidiary of the )ational

evelopment Corporation which is itself an entity wholly owned by the )ational 0overnment,

embarked on an e?pansion program embracing, among other things, the construction of an

integrated steel mill in Iligan City. The construction of such a steel mill was considered a

priority and ma


21/40

/ule *, 4ection # of the /ules of Court specifies who may be parties to a civil action9

4ec. #. 8ho ay 5e 'arties. H Only natural or )ational 2ousing (uthority= % 'hilippine )ational Oil Company= $

'hilippine )ational /ailways= #B 'ublic -states (uthority= ## 'hilippine 6irginia T

(dministration, #! and so forth. It is worth noting that the term +(uthority+ has been u

designate both incorporated and nonincorporated agencies or instrumentalities

0overnment.

8e consider that the I4( is properly regarded as an agent or delegate of the /epublic

'hilippines. The /epublic itself is a body corporate and 9

4ec. !. 0eneral Terms efined. H 7nless the specific words of the te?t, or the conte

whole, or a particular statute, require a different meaning9

:#; 0overnment of the /epublic of the 'hilippines refers to the corporate governentity through which the functions of government are e?ercised throughout the 'hilip

including, save as the contrary appears from the conte?t, the various arms through

political authority is made effective in the 'hilippines, whether pertaining to the auton

regions, the provincial, city, municipal or barangay subdivisions or other forms o

government.

??? ??? ???

:@; (gency of the 0overnment refers to any of the various units of the 0over

including a department, bureau, office, instrumentality, or governmentowned or con

corporation, or a local government or a distinct unit therein.

??? ??? ???

:#B; Instrumentality refers to any agency of the )ational 0overnment, not inte

within the department framework, vested with special functions or


22/40

The procedural implications of the relationship between an agent or delegate of the /epublic

of the 'hilippines and the /epublic itself are, at least in part, spelled out in the /ules of Court.

The general rule is, of course, that an action must be prosecuted and defended in the name

of the real party in interest. :/ule *, 4ection !; 'etitioner I4( was, at the commencement of

the e?propriation proceedings, a real party in interest, having been e?plicitly authorized by its

enabling statute to institute e?propriation proceedings. The /ules of Court at the same time

e?pressly recognize the role of representative parties9

4ec. *. /epresentative 'arties. H ( trustee of an e?pressed trust, a guardian, an e?ecutor or

administrator, or a party authorized by statute may sue or be sued without !. The present e?propriation suit was brought on behalf of and for the benefit of

the /epublic as the principal of I4(. 'aragraph > of the complaint stated9

>. The 0overnment, thru the plaintiff I4(, urgently needs the sub


23/40

0overnment, and direct the 4olicitor 0eneral, whenever he deems the action advisable, to

institute e?popriation proceedings in the proper court. :-mphasis supplied;

In the present case, the 'resident, e?ercising the power duly delegated under both the #$#>

and #$%> /evised (dministrative Codes in effect made a determination that it was necessary

and advantageous to e?ercise the power of eminent domain in behalf of the 0overnment of

the /epublic and accordingly directed the 4olicitor 0eneral to proceed with the suit. #>

It is argued by private respondent C3C that, because Congress after becoming once more

the depository of primary legislative power, had not enacted a statute e?tending the term of

I4(, such nonenactment must be deemed a manifestation of a legislative design to

discontinue or abort the present e?propriation suit. 8e find this argument much too

speculative= it rests too much upon simple silence on the part of Congress and casuallydisregards the e?istence of 4ection #! of the #$%> (dministrative Code already quoted

above.

Other contentions are made by private respondent C3C, such as, that the constitutional

requirement of +public use+ or +public purpose+ is not present in the instant case, and that the

indispensable element of


24/40

of her separation from the service in a letterAopinion dated *B (ugust #$%$ :this was allegedly

received by petitioner only on !& 3ebruary #$$B; stating thus9

??? ??? ???

It may be mentioned in this connection, that inasmuch as you did not avail of the

-/I'A4upplementary /etirement 'lans adopted by the ')5 in #$%&, you have therefore lost

your right thereto. oreover, since you lack the required number of years of service to entitle

you to retirement benefits under e?isting laws, you may be entitled to the return of your 04I4

personal contributions. Considering further that you have e?hausted all your accumulated

leave credits as you went on leave of absence for the period from (pril #, #$%& to 3ebruary

!B, #$%>, there is no legal or valid basis to entitle you to payment of terminal leave.

3inally, pursuant to 4ection #&, (rticle L6III of the Transitory 'rovisions of the #$%> 'hilippineConstitution, you may be entitled to payment of separation sub,"*> positions which were re

to ",@B" after the reorganization. Indeed, !,#*! positions were abolished, that is, the o

positions in ')5 were reduced by !%Q. This reduction in force likewise included the

officer positions, in ')5, which were reduced, thus9

'ositions Incumbents 'roposed 'osition

'resident # # #

4r. -?ec. 6' # # B

-?ec. 6' * ! !

4enior 6' #! ## >

6ice 'res. ** !> #"

The position of movant 1ap :46'; was one among the original twelve :#!; 46' positi

was one among the five :"; 46' positions which were abolished. In fact, the 3T of

she was then the incumbent 46', was merged with the International epartment to w

functions were closedly related.

It should be noted that as ruled by the 4upreme Court in ario vs. ison :0./. )O. %#$

/eorganizations in this


25/40

On the issue of bad faith as related to the later restoration of the 3und Transfer epartment,

the sub. oreover, the restoration of the

3und Transfer epartment and other offices in the ')5 was primarily caused by the

improved financial capability and present needs of the 5ank. This improved financial

condition of the ')5 is evident from the #$$B (nnual /eport it submitted. It may be further

stated that the reestablished 3T is headed by a 6ice 'resident, a position much lower inrank than the former department headed by a 4enior 6ice 'resident.

3urthermore, it should be noted that granting arguendo that movant 1apFs termination from

the service was tainted with bad faith, she however, is now barred from assailing the same as

she did not seasonably assert her right thereto. /ecords show that she was separated from

')5 on 3ebruary #&, #$%> and it was only in #$%$ or about ! years thereafter when she

brought this matter to this Commission. 5y her inaction in questioning her termination within a

period of one year, she is considered to have acquiesced to her separation from the service

and abandoned her right to the position. &

In the present petition before the Court, the following issues are raised9

#. -?istence of bad faith in the reorganization of the 'hilippine )ational 5ank resulting

in the separation from the service of petitioner.

!. -rroneous application of the ario v. ison doctrine visavis ')5Fs reorganization.

*. -rroneous application of the one :#; year prescriptive period for quo warranto

proceedings in petitionerFs case.

ario v. ison > laid down the requirement of good faith in the reorganization of a

government bureau wherein offices are abolished. It says9

. . . /eorganizations in this of '.. %B> whic

incorporated as 4ec. !$ Ch. " 4ubtitle (, 5ook 6 of the (dministrative Code of #$%>.

@. ack of notice and bearing before separation from the service.

". 'etitioner was forced to take a leave of absence and prevented from repor

work.&. There is a discrepancy in the date of her separation from the service a

effectivity thereof.

>. ')5 employees in the 3und Transfer epartment identified with her were reas

or frozen.

%. 4he is listed as having resigned instead of being separated or dismissed whi

what actually happened.

$. The dismissal was politically motivated, she being a sister of rs. Imelda /om

arcos, wife of deposed 'resident 3erdinand arcos.

-?ecutive Order )o. %B conferred upon the ')5 the authority to reorganize. The orde

issued by then 'res. Corazon (quino on * ecember #$%& while she was e?ercisi

powers vested in the 'resident of the 'hilippines by the 3reedom Constitution. (

ecember #$%&, what remained to be done was the implementation of the reorgani

There is no doubt as to the legal basis for ')5Fs reorganization. The real question is9

done in good faith, tested by the ario v. ison doctrine

To start with it is almost absurd for petitioner to insist that her termination from the s

was antedated to #& 3ebruary #$%&. (t that time, the reorganization of ')5 had no

been conceived. In most of ')5Fs pleadings, it has documented and supported its sta


26/40

the year of petitionerFs separation is #$%> not #$%&. The antedating of the termination date,

aside from being clearly a typographical error, is a periphernal issue. The real issue is

e?istence of bad faith consisting of tangible bureaucraticAmanagement pressures e?erted to

ease her out of office. 5ad faith has been defined as a state of mind affirmatively operating

with furtive design or with some motive of self interest or ill will or for an ulterior purpose. % It

is the performance of an act with the knowledge that the actor is violating the fundamental

law or right, even without willful intent to in that ')5 would be able to rise from its financial crisis and become a

commercial bank again The decision to abolish the 3T at the time it was abolis

repeat, was a business


27/40

')5 for its part submits that its reorganization was effected in good faith

because H

a; There was not only a perceptible but substantial restructuring of the ')5 hierarchy

showing reduction of personnel, consolidation of offices and abolition of positions.

b; Two thousand one hundred thirty two :!,#*!; positions were abolished during the

period from 3ebruary #&, #$%& to Danuary #@, #$%> leaving a lean workforce of five thousand

four hundred five :",@B"; as of latter date per 5./. )o. *@ hereto attached as (nne? +/+.

c; The number of senior officers, including 4enior 6ice 'residents, was accordingly

reduced.

(nother issue raised by petitioner is ')5Fs alleged noncompliance with the mandate of

4ections ! and @ of /ep. (ct )o. &&"&. These 4ections provide9

4ec. !. )o officer or employee in the career service shall be removed e?cept for a valid

cause and after due notice and hearing. ( valid cause for removal e?ists when, pursuant to a

bona fide reorganization, a position has been abolished or rendered redundant or there is a

need to merge, divide, or consolidate positions in order to meet the e?igencies of the service,

or other lawful causes allowed by the Civil 4ervice aw. The e?istence of any or some of the

following circumstances may be considered as evidence of bad faith in the removals made as

a result of reorganization, giving to a claim for reinstatement or reappointment by an

aggrieved party.

:a; 8here there is a significant increase in the number of positions in the new staffing

pattern of the department or agency concerned=

:b; 8here an office is abolished and another performing substantially the same functions

is created=:c; 8here incumbents are replaced by those less qualified in terms of status of

appointment, performance and merit=

:d; 8here 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; 8here the removal violates the order of separation provided in 4ection * hereof.

??? ??? ???

4ec. @. Officers and employees holding permanent, appointments shall be given preference

for appointment to the new position in the approved staffing pattern comparable to their

former positions or in case there are not enough comparable positions, to positions ne?t

lower in rank.

)o new employees shall be taken in until all permanent officers and employees have been

appointed, including temporary and casual employees who possess the necessaryqualification requirements, among which is the appropriate civil service eligibility, for

permanent appointment to positions in the approved staffing pattern, in case there are still

positions to be filled, unless such positions are policydetermining, primarily confidential or

highly technical in nature.

In the first place, /ep. (ct )o. &&"& cannot be invoked by petitioner because it took ef

#" Dune #$%>, or after ')5Fs reorganization had already been implemented. 5ut assu

e? gratia argumenti, that it is applicable here and petitioner must be accorded prefe

right to appointment in the bank, ')5 in its re@ at the International epartment and had been assig

several foreign branches of the 5ank. 5efore he resigned from the 5ank, he held the s

highest position of -?ecutive 6ice 'resident and served as (cting 'resident of the

before the incumbent president, 'resident 0abriel 4ingson assumed his position.

On the other hand, the service record of 'etitioner 1ap will show that she only h

5achelor of 4cience in Commerce egree from (ssumption Convent and has unde

only one seminar on anagement and eadersbip Training 'rogram. 4he entered the

service in #$>!. :/ollo at pp. *#! to *#*;??? ??? ???

The prayer in the petition at bar seeks petitionerFs immediate reinstatement to her

position as senior vice president and head of the 3und Transfer epartme

reappointment to a position of comparable or equivalent rank without loss of seniority

and pay, etc., under the bankFs new staffing pattern.

( person claiming to be entitled to a public office or position usurped or unlawfully h

e?ercised by another may bring an action for quo warranto :/ule &&, 4ec. &, /ules of

The petitioner therein must show a clear legal right to the office allegedly held unlawf

another. #!

(n action for quo warranto should be brought within one :#; year after ouster from off

the failure to institute the same within the reglementary period constitutes more

sufficient basis for its dismissal #@ since it is not proper that the title to a public off

sub


28/40

easured by the above


29/40

(lcohol Ta? ivision T-OO/O '. '(/-)O, and Chief of the /evenue (ccounting ivision

'OT-)CI()( . -6()0-I4T(9

??? ??? ???

4O O/-/-.

The fact of petitionerFs conviction was reported to the 'resident of the 'hilippines by the then

(cting 3inance 4ecretary eong through a memorandum dated Dune @, #$$*. The

memorandum states, inter alia9

This is a report in the case of (ssistant Commissioner (G7II)O T. (/I) of the -?cise Ta?

4ervice, 5ureau of Internal /evenue, a presidential appointee, one of those convicted in

Criminal Case )os. #@!B%#@!B$, entitled +'eople of the 'hilippines vs. (quilino T. arin, et.

al.+ referred to the epartment of 3inance by the Commissioner of Internal /evenue.

The cases against 'areno and -vangelista are being acted upon by the 5ureau of Internal

/evenue as they are nonpresidential appointees.

??? ??? ???

It is clear from the foregoing that r. arin has been found beyond reasonable doubt to have

committed acts constituting grave misconduct. 7nder the Civil 4ervice aws and /ules which

require only preponderance of evidence, grave misconduct is punishable by dismissal.

(cting by authority of the 'resident, 4r. eputy -?ecutive 4ecretary eonardo (. Guisumbing

issued emorandum Order )o. #&@ dated (ugust !", #$$* which provides for the creation of

an -?ecutive Committee to investigate the administrative charge against herein petitioner

(quilino T. arin. It states thus9

( Committee is hereby created to investigate the administrative complaint filed against

(quilino T. arin, (ssistant Commissioner, 5ureau of Internal /evenue, to be composed of9(tty. 3rumencio (. agustan H Chairman

(ssistant -?ecutive 4ecretary for egislation

r. Dose 5. (le #$$* or one day after the promulgation of -?ecutive Order )o #*! the On the other hand respondents contended that since petitioner is a presidential app


30/40

On October !>, #$$*, or one day after the promulgation of -?ecutive Order )o. #*!, the

'resident appointed the following as 5I/ (ssistant Commissioners9

#. 5ernardo (. 3rianeza

!. ominador . 0alura

*. Daime . 0onzales

@. ilia C. 0uillermo

". /izalina 4. agalona

&. 6ictorino C. amalateo

>. Daime . aza

%. (ntonio ). 'angilinan

$. elchor 4. /amos

#B. Doel . TanTorres

Consequently, the 'resident, in the assailed (dministrative Order )o. #B# dated ecember !,

#$$*, 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.

(ggrieved, petitioner filed directly with this Court the instant petition on ecember #*, #$$* to

question basically his alleged unlawful removal from office.

On (pril #>, #$$& and while the instant petition is pending, this Court set aside the conviction

of petitioner in Criminal Case )os. #@!B% and #@!B$.

In his petition, petitioner challenged the authority of the 'resident to dismiss him from office.

2e argued that in so far as presidential appointees who are Career -?ecutive 4erviceOfficers are concerned, the 'resident e?ercises only the power of control not the power to

remove. 2e also averred that the administrative investigation conducted under emorandum

Order )o. #&@ is void as it violated his right to due process. (ccording to him, the letter of the

Committee dated 4eptember #>, #$$* and his position paper dated 4eptember *B, #$$* are

not sufficient for purposes of complying with the requirements of due process. 2e alleged that

he was not informed of the administrative charges leveled against him nor was he given

official notice of his dismissal.

'etitioner likewise claimed that he was removed as a result of the reorganization made by the

-?ecutive epartment in the 5I/ pursuant to -?ecutive Order )o. #*!. Thus, he assailed

said -?ecutive Order )o. #*! and its implementing rules, namely, /evenue (dministrative

Orders @$* and "$* for being ultra vires. 2e claimed that there is yet no law enacted by

Congress which authorizes the reorganization by the -?ecutive epartment of e?ecutive

agencies, particularly the 5ureau of Internal /evenue. 2e said that the reorganization soughtto be effected by the -?ecutive epartment on the basis of -.O. )o. #*! is tainted with bad

faith in apparent violation of 4ection ! of /.(. &&"&, otherwise known as the (ct 'rotecting

the 4ecurity of Tenure of Civil 4ervice Officers and -mployees in the Implementation of

0overnment /eorganization.

On the other hand. respondents contended that since petitioner is a presidential app

he falls under the disciplining authority of the 'resident. They also contended that -.O

#*! and its implementing rules were validly issued pursuant to 4ections @% and

/epublic (ct )o. >&@". (part from this, the other legal bases of -.O. )o. #*! as state

preamble are 4ection &* of -.O. )o. #!> :/eorganizing the inistry of 3inance;, and 4

!B, 5ook III of -.O. )o. !$!, otherwise known as the (dministrative Code of #$

addition, it is clear that in 4ection ## of /.(. )o. &&"& future reorganization is e?

contemplated and nothing in said law that prohibits subsequent reorganization throu

e?ecutive order. 4ignificantly, respondents clarified that petitioner was not dismissed by

of -O #*!. /espondents claimed that he was removed from office because he was

guilty of grave misconduct in the administrative cases filed against him.

The ultimate issue to be resolved in the instant case falls on the determination of the v

of petitionerFs dismissal from office. Incidentally, in order to resolve this matter, it is imp

that 8e consider these questions9 a; 8ho has the power to discipline the petitioner, b

the proceedings taken pursuant to emorandum Order )o. #&@ in accord with due pro

c; 8hat is the effect of petitionerFs acquittal in the criminal case to his administrative ch

d; oes the 'resident have the power to reorganize the 5I/ or to issue the questione

)O. #*!, and e; Is the reorganization of 5I/ pursuant to -.O. )o. #*! tainted with bad

(t the outset, it is worthy to note that the position of (ssistant Commissioner of the 5I/

of the Career -?ecutive 4ervice. ! 7nder the law, * Career -?ecutive 4ervice o

namely, 7ndersecretary, (ssistant 4ecretary, 5ureau irector, (ssistant 5ureau

/egional irector, (ssistant /egional irector, Chief of epartment 4ervice and other o

of equivalent rank as may be identified by the Career -?ecutive 4ervice 5oard,

appointed by the 'resident. Concededly, petitioner was appointed as (ssistant Commis

in Danuary, #$%> by then 'resident (quino. Thus, petitioner is a presidential appointebelongs to career service of the Civil 4ervice. 5eing a presidential appointee, he

under the direct disciplining authority of the 'resident. This is in line with the well

principle that the +power to remove is inherent in the power to appoint+ conferred

'resident by 4ection #&, (rticle 6II of the Constitution. Thus, it is ineluctably cle

emorandum Order )o. #&@, which created a committee to investigate the adminis

charge against petitioner, was issued pursuant to the power of removal of the 'residen

power of removal, however, is not an absolute one which accepts no reservation. It m

pointed out that petitioner is a career service officer. 7nder the (dministrative Code of

career service is characterized by the e?istence of security of tenure, as contradisting

from noncareer service whose tenure is coterminus with that of the appointing autho

sub


31/40

or at his pleasure for it is an 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.

8as petitioner then removed from office for a legal cause under a valid proceeding

(lthough the proceedings taken complied with the requirements of procedural due process,

this Court, however, considers that petitioner was not dismissed for a valid cause.

It should be noted that what precipitated the creation of the investigative committee to look

into the administrative charge against petitioner is his conviction by the 4andiganbayan in

Criminal Case )os. #@!B% and #@!B$. (s admitted by the respondents, the administrative

case against petitioner is based on the 4andiganbayan ecision of 4eptember #%, #$$!.

Thus, in the (dministrative Order )o. #B# issued by 4enior eputy -?ecutive 4ecretaryGuisumbing which found petitioner guilty of grave misconduct, it clearly states that9

This pertains to the administrative charge against (ssistant Commissioner (quilino T. arin of

the 5ureau of Internal /evenue, for grave misconduct by virtue of a emorandum signed by

(cting 4ecretary eong of the epartment of 3inance, on the basis of a decision handed

down by the 2on. 4andiganbayan convicting arin, et. al. in Criminal Case )os. #@!B% and

#@!B$. @

In a nutshell, the criminal cases against petitioner refer to his alleged violation of 4ection !&%

:@; of the )ational Internal /evenue Code and of 4ection * :e; of /.(. )o. *B#$ as a

consequence of his act of favorably recommending the grant of ta? credit to Tanduay

istillery, Inc.. The pertinent portion of the *,BBB,BBB.BB; if we are to rely on the letter of eputy

Commissioner -ufracio . 4antos :-?hibits +!#+ for all the accused;.

(s pointed out above, the confluence of acts and omissions committed by accused arin,

'areno and -vangelista adequately prove conspiracy among them for no other purpose than

to bring about a ta? credit which Tanduay did not deserve. These misrepresentations as to

how much Tanduay had paid in ad valorem ta?es obviously constituted a fraud of ta? revenue

of the government . . . . "

2owever, it must be stressed at this , #$$& in

0./. )os. #B%B*>*% and #B>##$!B. 8e specifically ruled in no uncertain terms that9 a;

petitioner can not be held negligent in relying on the certification of a coequal unit in the 5I/,

b; it is not incumbent upon arin to go beyond the certification made by the /evenue

(ccounting ivision that Tanduay istillery, Inc. had paid the ad valorem ta?es, c; there is

nothing irregular or anything false in arinFs marginal note on the memorandum addressed to

'areno, the Chief of (lcohol Ta? ivision who was also one of the accused, but eventually

acquitted, in the said criminal cases, and d; there is no proof of actual agreement between

the accused, including petitioner, to commit the illegal acts charged. 8e are emphatic

resolution in said cases that there is nothing +illegal with the acts committed

petitioner:s;.+ 8e also declare that +there is no showing that petitioner:s; had

irregularly, or performed acts outside of his :their; official functions.+ 4ignificantly, thes

which. 8e categorically declare to be not unlawful and improper in 0./. )os. #B%B*>

0./. )os. #B>##$!B are the very same acts for which petitioner is held to be administr

responsible. (ny charge of malfeasance or misfeasance on the part of the petitioner is

belied by our conclusion in said cases. In the light of this decisive pronouncement, 8e

reason for the administrative charge to continue H it must, thus, be dismissed.

8e are not unaware of the rule that since administrative cases are independent from c

actions for the same act or omission, the dismissal or acquittal of the criminal charg

not foreclose the institution of administrative action nor carry with it the relie

administrative liability. & 2owever, the circumstantial setting of the instant case sets it

apart from the foregoing rule and placed it well within the e?ception. Corollarily, whe

very basis of the administrative case against petitioner is his conviction in the criminal

which was later on set aside by this Court upon a categorical and clear finding that th

for which he was administratively held liable are not unlawful and irregular, the acquitta

petitioner in the criminal case necessarily entails the dismissal of the administrative

against him, because in such a case, there is no more basis nor The records

show that on October #, #$$* petitioner submitted his letterresponse dated 4eptem#$$* to the administrative charge filed against him. (side from his letter, he also sub

various documents attached as anne?es to his letter, all of which are evidences sup

his defense. 'rior to this, he received a letter dated 4eptember #>, #$$* fro

Investigation Committee requiring him to e?plain his side concerning the charge. It c

therefore be argued that petitioner was denied of due process.

et us now e?amine -?ecutive Order )o. #*!.

(s stated earlier, with the issuance of -?ecutive Order )o. #*!, some of the positio

offices, including the office of -?cise Ta? 4ervices of which petitioner was the (s

Commissioner, were abolished or otherwise decentralized. Consequently, the 'r

released the list of appointed (ssistant Commissioners of the 5I/. (pparently, petition

not included.

8e do not agree.7nder its preamble, -.O. )o. #*! lays down the legal bases of its issuance, name

4ection @% and &! of /.(. )o. >&@", b; 4ection &* of -.O. )o. #!>, and c; 4ection !B

III of -.O. )o. !$!.

4ection @% of /.(. >&@" provides that9

4ec. @%. 4caling own and 'hase Out of (ctivities of (gencies 8ithin the -?ecutive 2owever, 8e can not consider -.O. )o. #!> signed on Danuary *B, #$%> as a legal ba


32/40

g g

5ranch. H The heads of departments, bureaus and offices and agencies are hereby directed

to identify their respective activities which are no longer essential in the delivery of public

services and which may be scaled down, phased out or abolished, sub>! $ which

amended 'residential ecree )o. #@#&. These decrees e?pressly grant the 'resident of the

'hilippines the continuing authority 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. The validity of these two decrees are unquestionable. The #$%> Constitution

clearly provides that +all laws, decrees, e?ecutive orders, proclamations, letters of instructions

and other e?ecutive issuances not inconsistent with this Constitution shall remain operative

until amended, repealed or revoked.+ #B 4o far, there is yet no law amending or repealingsaid decrees. 4ignificantly, the Constitution itself recognizes future reorganizations in the

government as what is revealed in 4ection #& of (rticle L6III, thus9

4ec. #&. Career civil service employees separated from service not for cause but as a

result of the . . . reorganization following the ratification of this Constitution shall be entitled to

appropriate separation pay . . .

, g y , g

the reorganization of the 5I/. -.O. )o. #!> should be related to the second paragr

4ection ## of /epublic (ct )o. &&"&.

4ection ## provides inter alia9

??? ??? ???

In the case of the #$%> reorganization of the e?ecutive branch, all departments and ag

which are authorized by e?ecutive orders promulgated by the 'resident to reorganiz

have ninety days from the approval of this act within which to implement their resp

reorganization plans in accordance with the provisions of this (ct. :emphasis ours;

-?ecutive Order )o. #!> was part of the #$%> reorganization contemplated unde

provision. Obviously, it had become stale by virtue of the e?piration of the ninety day deperiod. It can not thus be used as a proper basis for the reorganization of th

)evertheless, as shown earlier, there are other legal bases to sustain the authority

'resident to issue the questioned -.O. )O. #*!.

8hile the 'residentFs power to reorganize can not be denied, this does not mean ho

that the reorganization itself is properly made in accordance with law. 8ellsettled is t

that reorganization is regarded as valid provided it is pursued in good faith. Thus, in a

ison, this Court has had the occasion to clarify that9

(s a general rule, a reorganization is carried out in +good faith+ if it is for the purp

economy or to make bureaucracy more efficient. In that event no dismissal or sepa

actually occurs because the position itself ceases to e?ist. (nd in that case the sec

tenure would not be a Chinese wall. 5e that as it may, if the abolition which is nothing e

a separation or removal, is done for political reasons or purposely to defeat security of t

or otherwise not in good faith, no valid abolition takes place and whatever abolition is dvoid ab initio. There is an invalid abolition as where there is merely a change of nomen

of positions or where claims of economy are belied by the e?istence of ample funds. ##

In this regard, it is worth mentioning that 4ection ! of /. (. )o. &&"& lists dow

circumstances evidencing bad faith in the removal of employees as a result

reorganization, thus9

4ec. !. )o officer or employee in the career service shall be removed e?cept for

cause and after due notice and hearing. ( valid cause for removal e?ists when, pursua

bona fide reorganization, a position has been abolished or rendered redundant or the

need to merge, divide, or consolidate positions in order to meet the e?igencies of the s

or other lawful causes allowed by the Civil 4ervice aw. The e?istence of any or some

following circumstances may be considered as evidence of bad faith in the removals m

a result of the reorganization, giving rise to a claim for reinstatement or reappointmen

aggrieved party9

a; 8here there is a significant increase in the number of positions in the new

pattern of the department or agency concerned=

b; 8here an office is abolished and another performing substantially the same fu

is created=

c; 8here incumbents are replaced by those less qualified in terms of status of 4O O/-/-.


33/40

appointment, performance and merit=

d; 8here there is a reclassification of offices in the department or agency concerned

and the reclassified offices perform

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