SECOND SET OF CASES

7 Larin vs Executive Secretary, GR No. L-112745,

October 16, 1997
8 Dario vs Mison, GR No. 81954 August 8, 1989
9 Buklod ng Kwaning EIIB vs Zamora, GR No. 142802
July 10 2001
10 Bagaoisan vs National Tobacco Administration
GR No. 152845 August 5, 2003
11 Domingo vs Zamora GR No. 142283 February 3,
2003

AQUILINO T. LARIN, petitioner, vs. THE EXECUTIVE SECRETARY,

SECRETARY OF FINANCE, COMMISSIONER OF THE BUREAU
OF INTERNAL REVENUE AND THE COMMITTEE CREATED TO
INVESTIGATE THE ADMINISTRATIVE COMPLAINT AGAINST
AQUILINO T. LARIN, COMPOSED OF FRUMENCIO A.
LAGUSTAN, JOSE B. ALEJANDRINO and JAIME M.
MAZA, respondents.
DECISION
TORRES, JR., J.:

Challenge in this petition is the validity of petitioners removal from service as

Assistant Commissioner of the Excise Tax Service of the Bureau of Internal Revenue.
Incidentally, he questions Memorandum order no. 164 issued by the Office of the
President, which provides for the creation of A Committee to Investigate the
Administrative Complaint Against Aquilino T. Larin, Assistant Commissioner, Bureau of
Internal Revenue as well as the investigation made in pursuance thereto and
Administrative Order No. 101 dated December 2, 1993 which found him guilty of grave
misconduct in the administrative charge and imposed upon him the penalty of dismissal
from office.
Likewise, petitioner seeks to assail the legality of Executive Order No. 132, issued
by President Ramos on October 26, 1993, which provides for the Streamlining of
the Bureau of Internal Revenue, and of its implementing rules issued by the Bureau of
Internal Revenue, namely: a) Administrative Order No. 4-93, which provides for
the Organizational Structure and Statement of General Functions of Offices in the
National Office and b) Administrative Order No. 5-93, which provides for Redefining the
Areas of Jurisdiction and Renumbering of Regional And District Offices.
The antecedent facts of the instant case as succinctly related by the Solicitor
General are as follows:

On September 18, 1992, 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 dispositive portion
of the judgment reads:
[1]

"WHEREFORE, judgment is now rendered in Criminal Cases Nos.

14208 and 14209 convicting accused Assistant Commissioner for
Specific Tax Aquilino T. Larin, Chief of the Alcohol tax Division
TEODORO P. PARENO, and Chief of the Revenue accounting
Division POTENCIANA M. EVANGELISTA:
xxx

SO ORDERED.
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.
The memorandum states, inter alia:

This is a report in the case of Assistant Commissioner AQUILINO T. LARIN

of the Excise tax Service, Bureau of Internal Revenue, a presidential
appointee, one of those convicted in the Criminal Case Nos. 14208-14209,
entitled People of the Philippines vs. Aquilino T. Larin, et. al. Referred to the
Department of Finace by the Commissioner of Internal Revenue.
The cases against Pareno and Evangelista are being acted upon by the Bureau
of Internal revenue as they non-presidential appointees.
xxx

It is clear from the foregoing that Mr. Larin has found beyond reasonable doubt
to have committed acts constituting grave misconduct. Under the Civil Service
Laws and Rules which require only preponderance of evidence, grave
misconduct is punishable by dismissal.
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. It states thus:

A Committee is hereby created to investigate the administrative complaint filed

against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal
Revenue, to be composed of:
Atty. Frumencio A. Lagustan Chairman

Assistant Executive Secretary for Legislation

Mr. Jose B. Alejandro Member
Presidential Assistant
Atty. Jaime M. Maza Member
Assistant commissioner of Inspector services
Bureau of Internal Revenue
The Committee shall have the powers and prerogatives of (an) investigating
committee under the administrative Code of 1987 including the power to
summon witnesses, administer oath or take testimony or evidence relevant to
the investigation by subpoena ad testificandum and subpoena duces tecum:
xxx

The Committee shall convene immediately, conduct the investigation in the

most expeditious manner, and terminate the same as soon as practicable from
its first scheduled date of hearing.
xxx
Consequently, the Committee directed the petitioner to respond to the
administrative charge leveled against him through a letter dated September 17, 1993,
thus:

Presidential Memorandum Order No. 164 dated August 25, 1993, a xerox copy
of which is hereto attached for your ready reference, created an Investigation
Committee to look into the charges against you which are also the subject of
the Criminal Cases No. 14208 and 14209 entitled People of the
Philippines vs. Aquilino T. Larin, et. al.
The committee has its possession a certified true copy of the Decision of the
Sandiganbayan in the above-mentioned cases.
Pursuant to Presidential Memorandum Order No. 164, you are hereby directed
to file your position paper on the aforementioned charges within seven (7) days
from receipt hereof xxx.

Failure to file the required position paper shall be considered as a waiver on

your part to submit such paper or to be heard, in which case, the Committee
shall deem the case submitted on the basis of the documents and records at
hand.
In compliance, petitioner submitted a letter dated September 30, 1993 which was
addressed to Atty. Frumencio A. Lagustan , the Chairman of the Investigating
Committee. In said latter, he asserts that,

The case being sub-judice, I may not , therefore, comment on the merits of
issues involved for fear of being cited in contempt of Court. This position paper
is thus limited to furnishing the Committee pertinent documents submitted with
the Supreme Court and other tribunal which took cognizance of the case in the
past, as follows:
xxx

The foregoing documents readily show that I am not administratively liable or

criminally culpable of the charges leveled against me, and that the aforesaid
cases are mere prosecutions caused to be filed and are being orchestrated by
taxpayers who were prejudiced by multi-million peso assessments I caused to
be issued against them in my official capacity as Assistant Commissioner,
Excise Tax office of Bureau of Internal Revenue.
In the same letter, petitioner claims that the administrative complaint against him is
already barred: a) on jurisdictional ground as the Office of the Ombudsman had already
taken cognizance of the case and had caused the filing only of the criminal charges
against him, b) by res judicata, c) double jeopardy, and d) because to proceed with the
case would be redundant, oppressive and a plain persecution against him.
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, some positions and functions are either abolished,
renamed, decentralized or transferred to other offices, while other offices are also
created. The Excise Tax Service or the Specific Tax Service, of which petitioner was the
Assistant Commissioner, was one of those offices that was abolished by said executive
order.
The corresponding implementing rules of Executive Order No. 132, namely,
revenue Administrative Orders Nos. 4-93 and 5-93, were subsequently issued .by the
Bureau of Internal Revenue.

On October 27, 1993, or one day after the promulgation of Executive Order No.132,
the President appointed the following as BIR Assistant Commissioners:
1. Bernardo A. Frianeza
2. Dominador L. Galura
3. Jaime D. Gonzales
4. Lilia C. Guillermo
5. Rizalina S. Magalona
6. Victorino C. Mamalateo
7. Jaime M. Masa
8. Antonio N. Pangilinan
9. Melchor S. Ramos
10. Joel L. Tan-Torres

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.
Aggrieved, petitioner filed directly with this Court the instant petition on December
13, 1993 to question basically his alleged unlawful removal from office.
On April 17, 1996 and while the instant petition is pending, this Court set aside the
conviction of the petitioner in Criminal Case Nos. 14208 and 14209.
In his petition, petitioner challenged the authority of the President to dismiss him
from office. He argued that in so far as presidential appointees who are Career
Executive Service Officers are concerned, the President exercises only the power of
control not the power to remove. He also averred that the administrative investigation
conducted under Memorandum Order No. 164 is void as it violated his right to due
process. According to him, the letter of the Committee dated September 17, 1993 and
his position paper dated September 30, 1993 are not sufficient for purposes of
complying with the requirements of due process. He alleged that he was not informed of
the administrative charges leveled against him nor was he given official notice of his
dismissal.

Petitioner likewise claimed that he was removed as a result of the reorganization

made by the Executive Department in the BIR pursuant to Executive Order No. 132.
Thus, he assailed said Executive Order No. 132 and its implementing rules, namely,
Revenue Administrative Orders 4-93 and 5-93 for being ultra vires. He claimed that
there is yet no law enacted by Congress which authorizes the reorganization by the
Executive Department of executive agencies, particularly the Bureau of Internal
revenue. He said that the reorganization sought to be effected by the Executive
Department on the basis of E.O. No. 132 is tainted with bad faith in apparent violation of
Section 2 of R.A. 6656, otherwise known as the Act Protecting the Security of Tenure of
Civil Service Officers and Employees in the Implementation of Government
Reorganization.
On the other hand, respondents contended that since petitioner is the presidential
appointee, he falls under the disciplining authority of the President. They also
contended that E.O. No. 132 and its implementing rules were validly issued pursuant to
Sections 48 and 62 of Republic Act No. 7645. Apart from this, the other legal bases of
E.O. No. 132 as stated in its preamble are Section 63 of E.O No.127 (Reorganizing the
Ministry of Finance), and Section 20, Book III of E.O. No. 292, otherwise known as the
Administrative Code of 1987. In addition, it is clear that in Section 11 of R.A No.6656
future reorganization is expressly contemplated and nothing in said law that prohibits
subsequent reorganization through an executive order. Significantly, respondents
clarified that petitioner was not dismissed by virtue of EO 132. Respondents claimed
that he was removed from office because he was found 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 validity of petitioners dismissal from office. Incidentally, in order to resolve this
matter, it is imperative that We consider these questions : a) Who has the power to
discipline the petitioner?, b) Were the proceedings taken pursuant to Memorandum
Order No. 164 in accord with due process?, c) What is the effect of petitioners acquittal
in the criminal case to his administrative charge? d) Does the President have the power
to reorganize the BIR or to issue the questioned E.O. NO. 132?, e) Is the reorganization
of BIR pursuant to E.O. No. 132 tainted with bad faith?
At the outset, it is worthy to note that 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 diciplining authority of the
President. This is in line with the well settled principle that the power to remove is
[2]

[3]

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 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.
Was petitioner then removed from office for a legal cause under a valid proceeding?
Although 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
Sandiganbayan in criminal Case Nos. 14208 and 14209. As admitted by the
respondents, the administrative case against petitioner is based on the Sandiganbayan
Decision of September 18, 1992. Thus, in the Administrative Order No. 101 issued by
Senior Deputy Executive Secretary Quisumbing which found petitioner guilty of grave
misconduct, it clearly states that:

"This pertains to the administrative charge against Assistant Commissioner

Aquilino T. Larin of the Bureau of Internal Revenue, for grave misconduct by
virtue of a Memorandum signed by Acting Secretary Leong of the Department
of Finance, on the basis of decision handed down by the Hon. Sandiganbayan
convicting Larin, et. al. in Criminal Cases No. 14208 and 14209."
[4]

In a nutshell, 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.. The pertinent portion of the judgment of the Sandiganbayan
reads:

"As above pointed out, the accused had conspired in knowingly preparing false
memoranda and certification in order to effect a fraud upon taxes due to the
government. By their separate acts which had resulted in an appropriate tax
credit of P180,701,682.00 in favor of Tanduay. The government had been
defrauded of a tax revenue - for the full amount, if one is to look at the
availments or utilization thereof (Exhibits 'AA' to 'AA-31-a'), or for a
substantial portion thereof (P73,000,000.00) if we are to rely on the letter of
Deputy Commissioner Eufracio D. Santos (Exhibits '21' for all the accused).
As pointed out above, the confluence of acts and omissions committed by
accused Larin, Pareno and Evangelista adequately prove conspiracy among
them for no other purpose than to bring about a tax credit which Tanduay did
not deserve. These misrepresentations as to how much Tanduay had paid in ad
valorem taxes obviously constituted a fraud of tax revenue of the government
xxx.'
[5]

However, it must be stressed at this juncture that 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. We specifically ruled in no uncertain
terms that : a) petitioner cannot be held negligent in relying on the certification of a coequal unit in the BIR, b) it is not incumbent upon Larin to go beyond the certification
made by the Revenue Accounting Division that Tanduay Distillery, Inc. had paid the ad
valorem taxes, c) there is nothing irregular or anything false in Larin's marginal note on
the memorandum addressed to Pareno, the Chief of Alcohol Tax Division 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. We are emphatic in our resolution in said cases that there is
nothing "illegal with the acts committed by the petitioner(s)." We also declare that "there
is no showing that petitioner(s) had acted irregularly, or performed acts outside of his
(their) official functions." Significantly, these acts which We categorically declare to be
not unlawful and improper in G.R. Nos. 108037-38 and G.R. Nos. 107119-20 are the
very same acts for which petitioner is held to be administratively responsible. Any
charge of malfeasance or misfeasance on the part of the petitioner is clearly belied by
our conclusion in said cases. In the light of this decisive pronouncement, We see no
reason for the administrative charge to continue - it must, thus, be dismissed.
We are 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 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.
[6]

On the aspect of procedural due process, suffice it to say that petitioner was given
every chance to present his side. The rule is well settled that the essence of due
process in administrative proceedings is that a party be afforded a reasonable
opportunity to be heard and to submit any evidence he may have in support of his
defense. The records clearly show that on October 1, 1993 petitioner submitted his
letter-response dated September 30, 1993 to the administrative charged filed against
him. Aside from his letter, he also submitted various documents attached as annexes to
his letter, all of which are evidences supporting his defense. Prior to this, he received a
letter dated September 17, 1993 from the Investigation Committee requiring him to
explain his side concerning the charge. It cannot therefore be argued that petitioner was
denied of due process.
[7]

Let us now examine Executive Order No. 132.

As stated earlier, with the issuance of Executive Order No. 132, some of the
positions and offices, including the office of Excise Tax Services of which petitioner was
the Assistant Commissioner, were abolished or otherwise decentralized. Consequently,
the President released the list of appointed Assistant Commissioners of the BIR.
Apparently, petitioner was not included.
Initially, it is argued that there is no law yet which empowers the President to issue
E.O. No. 132 or to reorganize the BIR.
We do not agree.
Under its Preamble, E.O. No. 132 lays down the legal basis of its issuance, namely:
a) Section 48 and 62 of R.A. No. 7645, b) Section 63 of E.O. No. 127, and c) Section
20, Book III of E.O. No. 292.
Section 48 of R.A. 7645 provides that:

"Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the
Executive Branch. -- 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, subject to civil rules and regulations.
xxx. Actual scaling down, phasing out or abolition of the activities shall be
effective pursuant to Circulars or Orders issued for the purpose by the Office of
the President." (italics ours)
Said provision clearly mentions the acts of "scaling down, phasing out and abolition"
of offices only and does not cover the creation of offices or transfer of functions.
Nevertheless, the act of creating and decentralizing is included in the subsequent
provision of Section 62, which provides that:

"Sec. 62, Unauthorized Organizational Charges. -- Unless otherwise created by

law or directed by the President of the Philippines, no organizational unit or
changes in key positions in any department or agency shall be authorized in
their respective organization structures and be funded from appropriations by
this Act." (italics ours)
The foregoing provision evidently shows that the President is authorized to effect
organizational changes including the creation of offices in the department or agency
concerned.
The contention of petitioner that the two provisions are riders deserves scant
consideration. Well settled is the rule that every law has in its favor the presumption of
constitutionality. Unless and until a specific provision of the law is declared invalid and
unconstitutional, the same is valid and binding for all intents and purposes.
[8]

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." (italics ours)

This provision speaks of such other powers vested in the President under the law.
What law then which gives him the power to reorganize? It is Presidential Decree No.
1772 which amended Presidential Decree No. 1416. These decrees expressly grant
the President of the Philippines 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 1987 Constitution clearly provides that "all laws, decrees,
executive orders, proclamations, letters of instructions and other executive issuances
[9]

not inconsistent with this Constitution shall remain operative until amended, repealed or
revoked." So far, there is yet no law amending or repealing said decrees. Significantly,
the Constitution itself recognizes future reorganizations in the government as what is
revealed in Section 16 of Article XVIII, thus:
[10]

"Sec. 16. Career civil service employees separated from service not for cause
but as a result of the xxx reorganization following the ratification of this
Constitution shall be entitled to appropriate separation pay xxx."
However, We can not consider E.O. No. 127 signed on January 30, 1987 as a legal
basis for the reorganization of the BIR. E.O. No. 127 should be related to the second
paragraph of Section 11 of Republic Act No. 6656.
Section 11 provides inter alia:

"xxx
In the case of the 1987 reorganization of the executive branch, all departments
and agencies which are authorized by executive orders promulgated by the
President to reorganize shall have ninety days from the approval of this act
within which to implement their respective reorganization plans in accordance
with the provisions of this Act." (italics ours)
Executive Order No. 127 was part of the 1987 reorganization contemplated under
said provision. Obviously, it had become stale by virtue of the expiration of the ninety
day deadline period. It can not thus be used as a proper basis for the reorganization of
the BIR. Nevertheless, as shown earlier, there are other legal bases to sustain the
authority of the President to issue the questioned E.O. No. 132.
While the President's power to reorganize can not be denied, this does not mean
however that the reorganization itself is properly made in accordance with law. Wellsettled is the rule that reorganization is regarded as valid provided it is pursued in good
faith. Thus, in Dario vs. Mison, this court has had the occasion to clarify 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. In that event no
dismissal or separation actually occurs because the position itself ceases to
exist. And in that case the security of tenure would not be a Chinese Wall. Be
that as it may, if the abolition which is nothing else but a separation or removal,
is done for political reasons or purposely to defeat security of tenure, or
otherwise not in good faith, no valid abolition takes place and whatever
abolition is done is void ab initio. There is an invalid abolition as where there is

merely a change of nomenclature of positions or where claims of economy are

belied by the existence of ample funds."
[11]

In this regard, it is worth mentioning that 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, thus:

Sec. 2. No officer or employee in the career service shall be removed except for
a valid cause and after due notice and hearing. A valid cause for removal exist
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 exigencies of the service, or other lawful causes allowed by
the Civil Service Law. The existence of any or some of the following
circumstances may be considered as evidence of bad faith in the removals
made as a result of the reorganization, giving rise to a claim for reinstatement
or reappointment by an aggrieved party:
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 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."
A reading of some of the provisions of the questioned E.O. No. 132 clearly leads us
to an inescapable conclusion that there are circumstances considered as evidences of
bad faith in the reorganization of the BIR.
Section 1.1.2 of said executive order provides that:

"1.1.2 The Intelligence and Investigation Office and the Inspection Service are
abolished. An Intelligence and Investigation Service is hereby created to absorb
the same functions of the abolished office and service. xxx" (italics ours)

This provision 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 appointments are 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. As claimed by petitioner, Antonio Pangilinan who was one of
those appointed as Assistant Commissioner, "is an outsider of sorts to the bureau, not
having been an incumbent officer of the bureau at the time of the reorganization." We
should not lose sight of the second paragraph of Section 4 of R.A. No. 6656 which
explicitly states that no new employees shall be taken in until all permanent officers
shall have been appointed for permanent position.
IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is hereby
reinstated to his position as Assistant Commissioner without loss of seniority rights and
shall be entitled to full backwages from the time of his separation from service until
actual reinstatement unless, in the meanwhile, he would have reached the compulsory
retirement age of sixty-five years in which case, he shall be deemed to have retired at
such age and entitled thereafter to the corresponding retirement benefits.
G.R. No. 81954

August 8, 1989

CESAR Z. DARIO, petitioner,

vs.
HON. SALVADOR M. MISON, HON. VICENTE JAYME and HON. CATALINO MACARAIG, JR., in
their respective capacities as Commissioner of Customs, Secretary of Finance, and
Executive Secretary, respondents.
G.R. No. 81967

August 8, 1989

VICENTE A. FERIA JR., petitioner,

vs.
HON. SALVADOR M. MISON, HON. VICENTE JAYME, and HON. CATALINO MACARAIG, JR., in

their respective capacities as Commissioner of Customs, Secretary of Finance, and

Executive Secretary,respondents.
G.R. No. 82023

August 8, 1989

ADOLFO CASARENO, PACIFICO LAGLEVA, JULIAN C. ESPIRITU, DENNIS A. AZARRAGA,

RENATO DE JESUS, NICASIO C. GAMBOA, CORAZON RALLOS NIEVES, FELICITACION R.
GELUZ, LEODEGARIO H. FLORESCA, SUBAER PACASUM, ZENAIDA LANARIA, JOSE B.
ORTIZ, GLICERIO R. DOLAR, CORNELIO NAPA, PABLO B. SANTOS, FERMIN RODRIGUEZ,
DALISAY BAUTISTA, LEONARDO JOSE, ALBERTO LONTOK, PORFIRIO TABINO, JOSE
BARREDO, ROBERTO ARNALDO, ESTER TAN, PEDRO BAKAL, ROSARIO DAVID, RODOLFO
AFUANG, LORENZO CATRE, LEONCIA CATRE, ROBERTO ABADA, petitioners,
vs.
COMMISSIONER SALVADOR M. MISON, COMMISSIONER, BUREAU OF
CUSTOMS, respondent.
G.R. No. 83737

August 8, 1989

BENEDICTO L. AMASA and WILLIAM S. DIONISIO, petitioners,

vs.
PATRICIA A. STO. TOMAS, in her capacity as Chairman of the Civil Service Commission and
SALVADOR MISON, in his capacity as Commissioner of the Bureau of Customs, respondents.
G.R. No. 85310

August 8, 1989

SALVADOR M. MISON, in his capacity as Commissioner of Customs, petitioner,

vs.
CIVIL SERVICE COMMISSION, ABACA, SISINIO T., ABAD, ROGELIO C., ABADIANO, JOSE P.,
ABCEDE, NEMECIO C., ABIOG, ELY F., ABLAZA, AURORA M., AGBAYANI, NELSON I., AGRES
ANICETO, AGUILAR, FLOR, AGUILUCHO MA. TERESA R., AGUSTIN, BONIFACIO T., ALANO,
ALEX P., ALBA, MAXIMO F. JR., ALBANO, ROBERT B., ALCANTARA, JOSE G., ALMARIO,
RODOLFO F., ALVEZ, ROMUALDO R., AMISTAD RUDY M., AMOS, FRANCIS F., ANDRES,
RODRIGO V., ANGELES, RICARDO S., ANOLIN, MILAGROS H., AQUINO, PASCASIO E.,
ARABE, MELINDA M., ARCANGEL, AGUSTIN S., JR., ARPON, ULPLIANO U., JR., ARREZA,
ARTEMIO M., JR., ARROJO, ANTONIO P., ARVISU, ALEXANDER S., ASCA;O, ANTONIO T.,
ASLAHON, JULAHON P., ASUNCION, VICTOR R., ATANGAN, LORNA S., ATIENZA,
ALEXANDER R., BACAL, URSULINO C., BA;AGA, MARLOWE, Z., BANTA, ALBERTO T.,
BARREDO, JOSE B., BARROS, VICTOR C., BARTOLOME, FELIPE A., BAYSAC, REYNALDO
S., BELENO, ANTONIO B., BERNARDO, ROMEO D., BERNAS, MARCIANO S., BOHOL,
AUXILIADOR G., BRAVO, VICTOR M., BULEG, BALILIS R., CALNEA, MERCEDES M., CALVO,
HONESTO G., CAMACHO, CARLOS V., CAMPOS, RODOLFO C., CAPULONG, RODRIGO G.,
CARINGAL, GRACIA Z., CARLOS, LORENZO B., CARRANTO, FIDEL U., CARUNGCONG,
ALFREDO M., CASTRO, PATRICIA J., CATELO, ROGELIO B., CATURLA, MANUEL B.,
CENIZAL, JOSEFINA F., CINCO, LUISITO, CONDE0, JOSE C., JR., CORCUERA, FIDEL S.,
CORNETA, VICENTE S., CORONADO, RICARDO S., CRUZ, EDUARDO S., CRUZ, EDILBERTO
A., CRUZ, EFIGENIA B., CRUZADO, MARCIAL C., CUSTODIO, RODOLFO M., DABON, NORMA
M., DALINDIN, EDNA MAE D., DANDAL, EDEN F., DATUHARON, SATA A., DAZO, GODOFREDO
L., DE CASTRO, LEOPAPA, DE GUZMAN, ANTONIO A., DE GUZMAN, RENATO E., DE LA
CRUZ, AMADO A., JR., DE LA CRUZ, FRANCISCO C., DE LA PE;A, LEONARDO, DEL
CAMPO, ORLANDO, DEL RIO, MAMERTO P., JR., DEMESA, WILHELMINA T., DIMAKUTA,
SALIC L., DIZON, FELICITAS A., DOCTOR, HEIDY M., DOLAR, GLICERIO R., DOMINGO,
NICANOR J., DOMINGO, PERFECTO V., JR., DUAY, JUANA G., DYSANGCO, RENATO F.,

EDILLOR, ALFREDO P., ELEVAZO, LEONARDO A., ESCUYOS, MANUEL M., JR., ESMERIA,
ANTONIO E., ESPALDON, MA. LOURDES H., ESPINA, FRANCO A., ESTURCO, RODOLFO C.,
EVANGELINO, FERMIN I., FELIX, ERNESTO G., FERNANDEZ, ANDREW M., FERRAREN,
ANTONIO C., FERRERA, WENCESLAO A., FRANCISCO, PELAGIO S., JR., FUENTES, RUDY L.,
GAGALANG, RENATO V., GALANG, EDGARDO R., GAMBOA, ANTONIO C., GAN, ALBERTO
R., GARCIA, GILBERT M., GARCIA, EDNA V., GARCIA, JUAN L., GAVIOLA, LILIAN V.,
GEMPARO, SEGUNDINA G., GOBENCIONG, FLORDELIZ B., GRATE, FREDERICK R.,
GREGORIO, LAURO P., GUARTICO, AMMON H., GUIANG, MYRNA N., GUINTO, DELFIN C.,
HERNANDEZ, LUCAS A., HONRALES, LORETO N., HUERTO, LEOPOLDO H., HULAR ,
LANNYROSS E., IBA;EZ, ESTER C., ILAGAN, HONORATO C., INFANTE, REYNALDO C.,
ISAIS, RAY C., ISMAEL, HADJI AKRAM B., JANOLO, VIRGILIO M., JAVIER, AMADOR L.,
JAVIER, ROBERTO S., JAVIER, WILLIAM R., JOVEN, MEMIA A., JULIAN, REYNALDO V.,
JUMAMOY, ABUNDIO A., JUMAQUIAO, DOMINGO F., KAINDOY, PASCUAL B., JR., KOH,
NANIE G., LABILLES, ERNESTO S., LABRADOR, WILFREDO M., LAGA, BIENVENIDO M.,
LAGLEVA, PACIFICO Z., LAGMAN, EVANGELINE G., LAMPONG, WILFREDO G., LANDICHO,
RESTITUTO A., LAPITAN, CAMILO M., LAURENTE, REYNALDO A., LICARTE, EVARISTO R.,
LIPIO, VICTOR O., LITTAUA, FRANKLIN Z., LOPEZ, MELENCIO L., LUMBA, OLIVIA., MACAISA,
BENITO T., MACAISA, ERLINDA C., MAGAT, ELPIDIO, MAGLAYA, FERNANDO P.,
MALABANAN, ALFREDO C., MALIBIRAN, ROSITA D., MALIJAN, LAZARO V., MALLI, JAVIER
M., MANAHAN, RAMON S., MANUEL, ELPIDIO R., MARAVILLA, GIL B., MARCELO, GIL C.,
MARI;AS, RODOLFO V., MAROKET, JESUS C., MARTIN, NEMENCIO A., MARTINEZ, ROMEO
M., MARTINEZ, ROSELINA M., MATIBAG, ANGELINA G., MATUGAS, ERNESTO T., MATUGAS,
FRANCISCO T., MAYUGA, PORTIA E., MEDINA, NESTOR M., MEDINA, ROLANDO S.,
MENDAVIA, AVELINO I., MENDOZA, POTENCIANO G., MIL, RAY M., MIRAVALLES,
ANASTACIA L., MONFORTE, EUGENIO, JR., G., MONTANO, ERNESTO F., MONTERO, JUAN M.
III., MORALDE, ESMERALDO B., JR., MORALES, CONCHITA D.L., MORALES, NESTOR P.,
MORALES, SHIRLEY S., MUNAR, JUANITA L., MU;OZ, VICENTE R., MURILLO, MANUEL M.,
NACION, PEDRO R., NAGAL, HENRY N., NAPA, CORNELIO B., NAVARRO, HENRY L., NEJAL,
FREDRICK E., NICOLAS, REYNALDO S., NIEVES, RUFINO A., OLAIVAR, SEBASTIAN T.,
OLEGARIO, LEO Q., ORTEGA, ARLENE R., ORTEGA, JESUS R., OSORIO, ABNER S., PAPIO,
FLORENTINO T. II, PASCUA, ARNULFO A., PASTOR, ROSARIO, PELAYO, ROSARIO L., PE;A,
AIDA C., PEREZ, ESPERIDION B., PEREZ, JESUS BAYANI M., PRE, ISIDRO A.,
PRUDENCIADO, EULOGIA S., PUNZALAN, LAMBERTO N., PURA, ARNOLD T., QUINONES,
EDGARDO I., QUINTOS, AMADEO C., JR., QUIRAY, NICOLAS C., RAMIREZ, ROBERTO P.,
RA;ADA, RODRIGO C., RARAS, ANTONIO A., RAVAL, VIOLETA V., RAZAL, BETTY R.,
REGALA, PONCE F., REYES, LIBERATO R., REYES, MANUEL E., REYES, NORMA Z., REYES,
TELESFORO F., RIVERA, ROSITA L., ROCES, ROBERTO V., ROQUE, TERESITA S., ROSANES,
MARILOU M., ROSETE, ADAN I., RUANTO, REY, CRISTO C., JR., SABLADA, PASCASIO G.,
SALAZAR, SILVERIA S., SALAZAR, VICTORIA A., SALIMBACOD, PERLITA C., SALMINGO,
LOURDES M., SANTIAGO, EMELITA B., SATINA, PORFIRIO C., SEKITO, COSME B., JR.,
SIMON, RAMON P., SINGSON, MELECIO C., SORIANO, ANGELO L., SORIANO, MAGDALENA
R., SUMULONG, ISIDRO L., JR., SUNICO, ABELARDO T., TABIJE, EMMA B., TAN, RUDY,
GOROSPE, TAN, ESTER S., TAN, JULITA S., TECSON, BEATRIZ B., TOLENTINO, BENIGNO A.,
TURINGAN, ENRICO T., JR., UMPA, ALI A., VALIC, LUCIO E., VASQUEZ, NICANOR B.,
VELARDE, EDGARDO C., VERA, AVELINO A., VERAME, OSCAR E., VIADO, LILIAN T.,
VIERNES, NAPOLEON K., VILLALON, DENNIS A., VILLAR, LUZ L., VILLALUZ, EMELITO V.,
ZATA, ANGEL A., JR., ACHARON, CRISTETO, ALBA, RENATO B., AMON, JULITA C., AUSTRIA,
ERNESTO C., CALO, RAYMUNDO M., CENTENO, BENJAMIN R., DE CASTRO, LEOPAPA C .,
DONATO, ESTELITA P., DONATO, FELIPE S., FLORES, PEDRITO S., GALAROSA, RENATO,
MALAWI, MAUYAG, MONTENEGRO, FRANCISCO M., OMEGA, PETRONILO T., SANTOS,
GUILLERMO F., TEMPLO, CELSO, VALDERAMA, JAIME B., and VALDEZ, NORA
M., respondents.

G.R. No. 85335

August 8, 1989

FRANKLIN Z. LITTAUA, ADAN I. ROSETE, FRANCISCO T. MATUGAS, MA. J. ANGELINA G.

MATIBAG, LEODEGARDIO H. FLORESCA, LEONARDO A. DELA PE;A, ABELARDO T.
SUNICO, MELENCIO L. LOPEZ, NEMENCIO A. MARTIN, RUDY M. AMISTAD, ERNESTO T.
MATUGAS, SILVERIA S. SALAZAR, LILLIAN V. GAVIOLA, MILAGROS ANOLIN, JOSE B.
ORTIZ, ARTEMIO ARREZA, JR., GILVERTO M. GARCIA, ANTONIO A. RARAS, FLORDELINA B.
GOBENCIONG, ANICETO AGRES, EDGAR Y. QUINONES, MANUEL B. CATURLA, ELY F.
ABIOG, RODRIGO C. RANADA, LAURO GREGORIO, ALBERTO I. GAN, EDGARDO GALANG,
RAY C. ISAIS, NICANOR B. VASQUEZ, MANUEL ESCUYOS, JR., ANTONIO B. BELENO, ELPIO
R. MANUEL, AUXILIADOR C. BOHOL, LEONARDO ELEVAZO, VICENTE S.
CORNETA, petitioners,
vs.
COM. SALVADOR M. MISON/BUREAU OF CUSTOMS and the CIVIL SERVICE
COMMISSION, respondents.
G.R. No. 86241

August 8, 1989

SALVADOR M. MISON, in his capacity as Commissioner of Customs, petitioner,

vs.
CIVIL SERVICE COMMISSION, SENEN S. DIMAGUILA, ROMEO P. ARABE BERNARDO S.
QUINTONG, GREGORIO P. REYES, and ROMULO C. BADILLO respondents

SARMIENTO, J.:

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 March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3, "DECLARING A
NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE,
PROTECTING THEIR BASIC RIGHTS, 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; 1
...
Pursuant thereto, it was also provided:
SECTION 1. In the reorganization of the government, priority shall be given to measures to
promote economy, efficiency, and the eradication of graft and corruption.
SECTION 2. All elective and appointive officials and employees under the 1973 Constitution
shall continue in office until otherwise provided by proclamation or executive order or upon
the appointment and qualification of their successors, if such is made within a period of one
year from February 25, 1986.
SECTION 3. Any public officer or employee separated from the service as a result of the
organization effected under this Proclamation shall, if entitled under the laws then in force,
receive the retirement and other benefits accruing thereunder.
SECTION 4. The records, equipment, buildings, facilities and other properties of all
government offices shall be carefully preserved. In case any office or body is abolished or
reorganized pursuant to this Proclamation, its FUNDS and properties shall be transferred to
the office or body to which its powers, functions and responsibilities substantially pertain. 2
Actually, 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 resignation(s)
beginning with the members of the Supreme Court." 3 Later on, she abolished the Batasang
Pambansa4 and the positions of Prime Minister and Cabinet 5 under the 1973 Constitution.
Since then, 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, 6and two of which, with respect to appointed functionaries, have likewise
been questioned herein. 7
On May 28, 1986, the President enacted Executive Order No. 17, "PRESCRIBING RULES AND
REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE FREEDOM
CONSTITUTION." Executive Order 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," the following:
SECTION 3. The following shall be the grounds for separation replacement of personnel:
1) Existence of a case for summary dismissal pursuant to Section 40 of the Civil
Service Law;
2) Existence of a probable cause for violation of the Anti-Graft and Corrupt Practices
Act as determined by the Mnistry Head concerned;
3) Gross incompetence or inefficiency in the discharge of functions;
4) Misuse of public office for partisan political purposes;

5) Any other analogous ground showing that the incumbent is unfit to remain in the
service or his separation/replacement is in the interest of the service. 8
On January 30, 1987, the President promulgated Executive Order No. 127, "REORGANIZING THE
MINISTRY OF FINANCE." 9 Among other offices, Executive Order No. 127 provided for the
reorganization of the Bureau of Customs 10 and prescribed a new staffing pattern therefor.
Three days later, on February 2, 1987, 11 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," 12 prescribing the procedure in personnel placement. It also provided:
1. By February 28, 1988, the employees covered by Executive Order 127 and the
grace period extended to the Bureau of Customs by the President of the Philippines
on reorganization shall be:
a) informed of their re-appointment, or
b) offered another position in the same department or agency or
c) informed of their termination. 13
On the same date, Commissioner Mison constituted a Reorganization Appeals Board charged with
adjudicating appeals from removals under the above Memorandum. 14 On January 26, 1988,
Commissioner Mison addressed several notices to various Customs officials, in the tenor as follows:
Sir:
Please be informed that the Bureau is now in the process of implementing the
Reorganization Program under Executive Order No. 127.
Pursuant to Section 59 of the same Executive Order, all officers and employees of the
Department of Finance, or the Bureau of Customs in particular, shall continue to perform
their respective duties and responsibilities in a hold-over capacity, and that those incumbents
whose positions are not carried in the new reorganization pattern, or who are not reappointed, shall be deemed separated from the service.
In this connection, we regret to inform you that your services are hereby terminated as of
February 28, 1988. Subject to the normal clearances, you may receive the retirement
benefits to which you may be entitled under existing laws, rules and regulations.
In the meantime, your name will be included in the consolidated list compiled by the Civil
Service Commission so that you may be given priority for future employment with the
Government as the need arises.
Sincerely yours,
(Sgd) SALVADOR M. MISON
Commissioner15
As far as the records will yield, the following were recipients of these notices:

1. CESAR DARIO
2. VICENTE FERIA, JR.
3. ADOLFO CASARENO
4. PACIFICO LAGLEVA
5. JULIAN C. ESPIRITU
6. DENNIS A. AZARRAGA
7. RENATO DE JESUS
8. NICASIO C. GAMBOA
9. CORAZON RALLOS NIEVES
10. FELICITACION R. GELUZ
11. LEODEGARIO H. FLORESCA
12. SUBAER PACASUM
13. ZENAIDA LANARIA
14. JOSE B. ORTIZ
15. GLICERIO R. DOLAR
16. CORNELIO NAPA
17. PABLO B. SANTOS
18. FERMIN RODRIGUEZ
19. DALISAY BAUTISTA
20. LEONARDO JOSE
21. ALBERTO LONTOK
22. PORFIRIO TABINO
23. JOSE BARREDO
24. ROBERTO ARNALDO

25. ESTER TAN

26. PEDRO BAKAL
27. ROSARIO DAVID
28. RODOLFO AFUANG
29. LORENZO CATRE
30. LEONCIA CATRE
31. ROBERTO ABADA
32. ABACA, SISINIO T.
33. ABAD, ROGELIO C.
34. ABADIANO, JOSE P
35. ABCEDE, NEMECIO C.
36. ABIOG, ELY F.
37. ABLAZA, AURORA M.
38. AGBAYANI, NELSON I.
39. AGRES, ANICETO
40. AGUILAR, FLOR
41. AGUILUCHO, MA. TERESA R.
42. AGUSTIN, BONIFACIO T.
43. ALANO, ALEX P.
44. ALBA, MAXIMO F. JR.
45. ALBANO, ROBERT B.
46. ALCANTARA, JOSE G.
47. ALMARIO, RODOLFO F.
48. ALVEZ, ROMUALDO R.

49. AMISTAD, RUDY M.

50. AMOS, FRANCIS F.
51. ANDRES, RODRIGO V.
52. ANGELES, RICARDO S.
53. ANOLIN, MILAGROS H.
54. AQUINO, PASCASIO E. L.
55. ARABE, MELINDA M.
56. ARCANGEL, AGUSTIN S, JR.
57. ARPON, ULPIANO U., JR.
58. ARREZA, ARTEMIO M, JR.
59. ARROJO, ANTONIO P.
60. ARVISU, ALEXANDER S.
61. ASCA;O, ANTONIO T.
62. ASLAHON, JULAHON P.
63. ASUNCION, VICTOR R.
64. ATANGAN, LORNA S.
65. ANTIENZA, ALEXANDER R.
66. BACAL URSULINO C.
67. BA;AGA, MARLOWE Z.
68. BANTA, ALBERTO T.
69. BARROS, VICTOR C.
70. BARTOLOME, FELIPE A.
71. BAYSAC, REYNALDO S.
72. BELENO, ANTONIO B.

73. BERNARDO, ROMEO D.

74. BERNAS, MARCIANO S.
75. BOHOL, AUXILIADOR G.
76. BRAVO, VICTOR M.
77. BULEG, BALILIS R.
78. CALNEA, MERCEDES M.
79. CALVO, HONESTO G.
80. CAMACHO, CARLOS V.
81. CAMPOS, RODOLFO C.
82. CAPULONG, RODRIGO G.
83. CARINGAL, GRACIA Z.
84. CARLOS, LORENZO B.
85. CARRANTO, FIDEL U.
86. CARUNGCONG, ALFREDO M.
87. CASTRO, PATRICIA J.
88. CATELO, ROGELIO B.
89. CATURLA, MANUEL B.
90. CENIZAL, JOSEFINA F.
91. CINCO, LUISITO
92. CONDE, JOSE C., JR.
93. CORCUERA, FIDEL S.
94. CORNETA, VICENTE S.
95. CORONADO, RICARDO S.
96. CRUZ, EDUARDO S.

97. CRUZ, EDILBERTO A,

98. CRUZ, EFIGENIA B.
99. CRUZADO,NORMA M.
100. CUSTODIO, RODOLFO M.
101. DABON, NORMA M.
102. DALINDIN, EDNA MAE D.
103. DANDAL, EDEN F.
104. DATUHARON, SATA A.
105. DAZO, GODOFREDO L.
106. DE CASTRO, LEOPAPA
107. DE GUZMAN, ANTONIO A.
108. DE GUZMAN, RENATO E.
109. DE LA CRUZ, AMADO A., JR.
110. DE LA CRUZ, FRANCISCO C.
111. DE LA PE;A, LEONARDO
112. DEL CAMPO, ORLANDO
113. DEL RIO, MAMERTO P., JR.
114. DEMESA, WILHELMINA T.
115. DIMAKUTA, SALIC L.
116. DIZON, FELICITAS A.
117. DOCTOR, HEIDY M.
118. DOMINGO, NICANOR J.
119. DOMINGO, PERFECTO V., JR.
120. DUAY, JUANA G.

121. DYSANGCO, RENATO F.

122. EDILLOR, ALFREDO P.
123. ELEVAZO, LEONARDO A
124. ESCUYOS, MANUEL M., JR.
125. ESMERIA, ANTONIO E.
126. ESPALDON, MA. LOURDES H.
127. ESPINA, FRANCO A.
128. ESTURCO, RODOLFO C.
129. EVANGELINO, FERMIN I.
130. FELIX, ERNESTO G.
131. FERNANDEZ, ANDREW M.
132. FERRAREN, ANTONIO C.
133. FERRERA, WENCESLAO A.
134. FRANCISCO, PELAGIO S, JR.
135. FUENTES, RUDY L.
136. GAGALANG, RENATO V.
137. GALANG, EDGARDO R.
138. GAMBOA, ANTONIO C.
139. GAN, ALBERTO P
140. GARCIA, GILBERT M.
141. GARCIA, EDNA V.
142. GARCIA, JUAN L.
143. GAVIOIA, LILIAN V.
144. GEMPARO, SEGUNDINA G.

145. GOBENCIONG, FLORDELIZ B.

146. GRATE, FREDERICK R.
147. GREGORIO, LAURO P.
148. GUARTICO, AMMON H.
149. GUIANG, MYRNA N.
150. GUINTO, DELFIN C.
151. HERNANDEZ, LUCAS A.
152. HONRALES, LORETO N.
153. HUERTO, LEOPOLDO H.
154. HULAR, LANNYROSS E.
155. IBA;EZ, ESTER C.
156. ILAGAN, HONORATO C.
157. INFANTE, REYNALDO C.
158. ISAIS, RAY C.
159. ISMAEL, HADJI AKRAM B.
160. JANOLO, VIRGILIO M.
161. JAVIER, AMADOR L.
162. JAVIER, ROBERTO S.
163. JAVIER, WILLIAM R.
164. JOVEN, MEMIA A.
165. JULIAN, REYNALDO V.
166. JUMAMOY, ABUNDIO A.
167. JUMAQUIAO, DOMINGO F.
168. KAINDOY, PASCUAL B., JR.

169. KOH, NANIE G.

170. LABILLES, ERNESTO S.
171. LABRADOR, WILFREDO M.
172. LAGA, BIENVENIDO M.
173. LAGMAN, EVANGELINE G.
174. LAMPONG, WILFREDO G.
175. LANDICHO, RESTITUTO A.
176. LAPITAN, CAMILO M.
177. LAURENTE, REYNALDO A.
178. LICARTE, EVARISTO R.
179. LIPIO, VICTOR O.
180. LITTAUA, FRANKLIN Z.
181. LOPEZ, MELENCIO L.
182. LUMBA, OLIVIA R.
183. MACAISA, BENITO T.
184. MACAISA, ERLINDA C.
185. MAGAT, ELPIDIO
186. MAGLAYA, FERNANDO P.
187. MALABANAN, ALFREDO C.
188. MALIBIRAN, ROSITA D.
189. MALIJAN, LAZARO V.
190. MALLI, JAVIER M.
191. MANAHAN, RAMON S.
192. MANUEL, ELPIDIO R.

193. MARAVILLA, GIL B.

194. MARCELO, GIL C.
195. MARI;AS, RODOLFO V.
196. MAROKET ,JESUS C.
197. MARTIN, NEMENCIO A.
198. MARTINEZ, ROMEO M.
199. MARTINEZ, ROSELINA M.
200. MATIBAG, ANGELINA G.
201. MATUGAS, ERNESTO T.
202. MATUGAS, FRANCISCO T.
203. MAYUGA, PORTIA E.
204. MEDINA, NESTOR M.
205. MEDINA, ROLANDO S.
206. MENDAVIA, AVELINO
207. MENDOZA, POTENCIANO G.
208. MIL, RAY M.
209. MIRAVALLES, ANASTACIA L.
210. MONFORTE, EUGENIO, JR. G.
211. MONTANO, ERNESTO F.
212. MONTERO, JUAN M. III
213. MORALDE, ESMERALDO B., JR.
214. MORALES, CONCHITA D. L
215. MORALES, NESTOR P.
216. MORALES, SHIRLEY S.

217. MUNAR, JUANITA L.

218. MU;OZ, VICENTE R.
219. MURILLO, MANUEL M.
220. NACION, PEDRO R.
221. NAGAL, HENRY N.
222. NAVARRO, HENRY L.
223. NEJAL FREDRICK E.
224. NICOLAS, REYNALDO S.
225. NIEVES, RUFINO A.
226. OLAIVAR, SEBASTIAN T.
227. OLEGARIO, LEO Q.
228. ORTEGA, ARLENE R.
229. ORTEGA, JESUS R.
230. OSORIO, ABNER S.
231. PAPIO FLORENTINO T. II
232. PASCUA, ARNULFO A.
233. PASTOR, ROSARIO
234. PELAYO, ROSARIO L.
235. PE;A, AIDA C.
236. PEREZ, ESPERIDION B.
237. PEREZ, JESUS BAYANI M.
238. PRE, ISIDRO A.
239. PRUDENCIADO, EULOGIA S.
240. PUNZALAN, LAMBERTO N.

241. PURA, ARNOLD T.

242. QUINONES, EDGARDO I.
243. QUINTOS, AMADEO C., JR.
244. QUIRAY, NICOLAS C.
245. RAMIREZ, ROBERTO P.
246. RANADA, RODRIGO C.
247. RARAS, ANTONIO A.
248. RAVAL, VIOLETA V.
249. RAZAL, BETTY R.
250. REGALA, PONCE F.
251. REYES, LIBERATO R.
252. REYES, MANUEL E.
253. REYES, NORMA Z.
254. REYES, TELESPORO F.
255. RIVERA, ROSITA L.
256. ROCES, ROBERTO V.
257. ROQUE, TERESITA S.
258. ROSANES, MARILOU M.
259. ROSETE, ADAN I.
260. RUANTO, REY CRISTO C., JR.
261. SABLADA, PASCASIO G.
262. SALAZAR, SILVERIA S.
263. SALAZAR, VICTORIA A.
264. SALIMBACOD, PERLITA C.

265. SALMINGO, LOURDES M.

266. SANTIAGO, EMELITA B.
267. SATINA, PORFIRIO C.
268. SEKITO, COSME B JR.
269. SIMON, RAMON P.
270. SINGSON, MELENCIO C.
271. SORIANO, ANGELO L.
272. SORIANO, MAGDALENA R.
273. SUNICO, ABELARDO T .
274. TABIJE, EMMA B.
275. TAN, RUDY GOROSPE
276. TAN, ESTER S.
277. TAN, JULITA S.
278. TECSON, BEATRIZ B.
279. TOLENTINO, BENIGNO A.
280. TURINGAN, ENRICO T JR.
281. UMPA, ALI A.
282. VALIC, LUCIO E.
283. VASQUEZ, NICANOR B.
284. VELARDE, EDGARDO C.
285. VERA, AVELINO A.
286. VERAME, OSCAR E.
287. VIADO, LILIAN T.
288. VIERNES, NAPOLEON K

289. VILLALON, DENNIS A.

290. VILLAR, LUZ L.
291. VILLALUZ, EMELITO V.
292. VILLAR, LUZ L.
293. ZATA, ANGELA JR.
294. ACHARON, CRISTETO
295. ALBA, RENATO B.
296. AMON, JULITA C.
297. AUSTRIA, ERNESTO C.
298. CALO, RAYMUNDO M.
299. CENTENO, BENJAMIN R.
300. DONATO, ESTELITA P.
301. DONATO, FELIPE S
302. FLORES, PEDRITO S.
303. GALAROSA, RENATO
304. MALAWI, MAUYAG
305. MONTENEGRO, FRANSISCO M.
306. OMEGA, PETRONILO T.
307. SANTOS, GUILLERMO P.
308. TEMPLO, CELSO
309. VALDERAMA, JAIME B.
310. VALDEZ, NORA M.

Cesar Dario is the petitioner in G.R. No. 81954; Vicente Feria, Jr., is the petitioner in G.R. No.
81967; Messrs. Adolfo Caserano Pacifico Lagleva Julian C. Espiritu, Dennis A. Azarraga Renato de
Jesus, Nicasio C. Gamboa, Mesdames Corazon Rallos Nieves and Felicitacion R. Geluz Messrs.

Leodegario H. Floresca, Subaer Pacasum Ms. Zenaida Lanaria Mr. Jose B. Ortiz, Ms. Gliceria R.
Dolar, Ms. Cornelia Napa, Pablo B. Santos, Fermin Rodriguez, Ms. Daligay Bautista, Messrs.
Leonardo Jose, Alberto Lontok, Porfirio Tabino Jose Barredo, Roberto Arnaldo, Ms. Ester Tan,
Messrs. Pedro Bakal, Rosario David, Rodolfo Afuang, Lorenzo Catre,, Ms. Leoncia Catre, and
Roberto Abaca, are the petitioners in G.R. No. 82023; the last 279 16 individuals mentioned are the
private respondents in G.R. No. 85310.
As far as the records will likewise reveal, 17 a total of 394 officials and employees of the Bureau of
Customs were given individual notices of separation. A number supposedly sought reinstatement
with the Reorganization Appeals Board while others went to the Civil Service Commission. The first
thirty-one mentioned above came directly to this Court.
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, the dispositive portion of which
reads as follows:
WHEREFORE, it is hereby ordered that:
1. Appellants be immediately reappointed to positions of comparable or equivalent
rank in the Bureau of Customs without loss of seniority rights;
2. Appellants be paid their back salaries reckoned from the dates 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 exoneration of the
appellants from any accusation of wrongdoing and, therefore, their reappointments are
without prejudice to:
1. Proceeding with investigation of appellants with pending administrative cases, and
where investigations have been finished, to promptly, render the appropriate
decisions;
2. The filing of appropriate administrative complaints against appellants with
derogatory reports or information if evidence so warrants.
SO ORDERED. 18
On July 15, 1988, Commissioner Mison, represented by the Solicitor General, filed a motion for
reconsideration Acting on the motion, the Civil Service Commission, on September 20, 1988, denied
reconsideration. 19
On October 20, 1988, Commissioner Mison instituted certiorari proceedings with this Court,
docketed, as above-stated, as G.R. No. 85310 of this Court.
On November 16,1988, the Civil Service Commission further disposed the appeal (from the
resolution of the Reorganization Appeals Board) of five more employees, holding as follows:
WHEREFORE, it is hereby ordered that:

1. Appellants be immediately reappointed to positions of comparable or equivalent

rank in the Bureau of Customs without loss of seniority rights; and
2. Appellants 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 exoneration of the
herein appellants from any accusation of any wrongdoing and therefore, their
reappointments are without prejudice to:
1. Proceeding with investigation of appellants with pending administrative cases, if
any, and where investigations have been finished, to promptly, render the appropriate
decisions; and
2. The filing of appropriate administrative complaints against appellant with
derogatory reports or information, if any, and if evidence so warrants.
SO ORDERED. 20
On January 6, 1989, Commissioner Mison challenged the Civil Service Commission's Resolution in
this Court; his petitioner has been docketed herein as G.R. No. 86241. The employees ordered to be
reinstated are Senen Dimaguila, Romeo Arabe, Bemardo Quintong,Gregorio Reyes, and Romulo
Badillo. 21
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," 22was signed into law. Under Section 7, thereof:
Sec. 9. All officers and employees who are found by the Civil Service Commission to have
been separated in violation of the provisions of this Act, 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. Unless 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 existing laws within ninety (90) 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 be: Provided, 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 (1) month
salary for every year of service. Such separation pay and retirement benefits shall have
priority of payment out of the savings of the department or agency concerned. 23
On June 23, 1988, Benedicto Amasa and William Dionisio, customs examiners appointed by
Commissioner Mison pursuant to the ostensible reorganization subject of this controversy, petitioned
the Court to contest the validity of the statute. The petition is docketed as G.R. No. 83737.
On October 21, 1988, thirty-five more Customs officials whom the Civil Service Commission had
ordered reinstated by its June 30,1988 Resolution filed their own petition to compel the
Commissioner of Customs to comply with the said Resolution. The petition is docketed as G.R. No.
85335.

On November 29, 1988, we resolved to consolidate all seven petitions.

On the same date, we resolved to set the matter for hearing on January 12, 1989. At the said
hearing, the parties, represented by their counsels (a) retired Justice Ruperto Martin; (b) retired
Justice Lino Patajo. (c) former Dean Froilan Bacungan (d) Atty. Lester Escobar (e) Atty. Faustino
Tugade and (f) Atty. Alexander Padilla, presented their arguments. Solicitor General Francisco
Chavez argued on behalf of the Commissioner of Customs (except in G.R. 85335, in which he
represented the Bureau of Customs and the Civil Service Commission). Former Senator Ambrosio
Padilla also appeared and argued as amicus curiae Thereafter, we resolved to require the parties to
submit their respective memoranda which they did in due time.
lwph1.t

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 mandate
not only of the Provisional Constitution, supra, but also of the various Executive Orders decreed by
the Chief Executive in her capacity as sole lawmaking authority under the 1986-1987 revolutionary
government. It should also be noted that under the present Constitution, there is a recognition, albeit
implied, that a government reorganization may be legitimately undertaken, subject to certain
conditions. 24
The Court understands that the parties are agreed on the validity of a reorganization per se the only
question being, as shall be later seen: What is the nature and extent of this government
reorganization?
The Court disregards the questions raised as to procedure, failure to exhaust administrative
remedies, the standing of certain parties to sue, 25 and other technical objections, for two reasons,
"[b]ecause of the demands of public interest, including the need for stability in the public
service,"26 and because of the serious implications of these cases on the administration of the
Philippine civil service and the rights of public servants.
The urgings in G.R. Nos. 85335 and 85310, that the Civil Service Commission's Resolution dated
June 30, 1988 had attained a character of finality for failure of Commissioner Mison to apply for
judicial review or ask for reconsideration seasonalbly under Presidential Decree No. 807, 27 or under
Republic Act No. 6656, 28 or under the Constitution, 29 are likewise rejected. The records show that
the Bureau of Customs had until July 15, 1988 to ask for reconsideration or come to this Court
pursuant to Section 39 of Presidential Decree No. 807. The records likewise show that the Solicitor
General filed a motion for reconsideration on July 15, 1988.30 The Civil Service Commission issued
its Resolution denying reconsideration on September 20, 1988; a copy of this Resolution was
received by the Bureau on September 23, 1988. 31 Hence the Bureau had until October 23, 1988 to
elevate the matter on certiorari to this Court.32 Since the Bureau's petition was filed on October 20,
1988, it was filed on time.
We reject, finally, contentions that the Bureau's petition (in G.R. 85310) raises no jurisdictional
questions, and is therefore bereft of any basis as a petition for certiorari under Rule 65 of the Rules
of Court. 33 We find that the questions raised in Commissioner Mison's petition (in G.R. 85310) are,
indeed, proper for certiorari, if by "jurisdictional questions" we mean questions having to do with "an
indifferent disregard of the law, arbitrariness and caprice, or omission to weigh pertinent
considerations, a decision arrived at without rational deliberation, 34 as distinguished from questions
that require "digging into the merits and unearthing errors of judgment 35 which is the office, on the
other hand, of review under Rule 45 of the said Rules. What cannot be denied is the fact that the act
of the Civil Service Commission of reinstating hundreds of Customs employees Commissioner
Mison had separated, has implications not only on the entire reorganization process decreed no less
than by the Provisional Constitution, but on the Philippine bureaucracy in general; these implications

are of such a magnitude that it cannot be said that assuming that the Civil Service Commission
erred the Commission committed a plain "error of judgment" that Aratuc says cannot be corrected
by the extraordinary remedy of certiorari or any special civil action. We reaffirm the teaching
of Aratuc as regards recourse to this Court with respect to rulings of the Civil Service Commission
which is that judgments of the Commission may be brought to the Supreme Court
through certiorari alone, under Rule 65 of the Rules of Court.
In Aratuc we declared:
It is once evident from these constitutional and statutory modifications that there is a definite
tendency to enhance and invigorate the role of the Commission on Elections as the
independent constitutional body charged with the safeguarding of free, peaceful and honest
elections. The framers of the new Constitution must be presumed to have definite knowledge
of what it means to make the decisions, orders and rulings of the Commission "subject to
review by the Supreme Court'. And since instead of maintaining that provision intact, it
ordained that the Commission's actuations be instead 'brought to the Supreme Court
on certiorari", We cannot insist that there was no intent to change the nature of the remedy,
considering that the limited scope of certiorari, compared to a review, is well known in
remedial law.36
We observe no fundamental difference between the Commission on Elections and the Civil Service
Commission (or the Commission on Audit for that matter) in terms of the constitutional intent to leave
the constitutional bodies alone in the enforcement of laws relative to elections, with respect to the
former, and the civil service, with respect to the latter (or the audit of government accounts, with
respect to the Commission on Audit). As the poll body is the "sole judge" 37 of all election cases, so is
the Civil Service Commission the single arbiter of all controversies pertaining to the civil service.
It should also be noted that under the new Constitution, as under the 1973 Charter, "any decision,
order, or ruling of each Commission may be brought to the Supreme Court on certiorari," 38 which,
as Aratuc tells us, "technically connotes something less than saying that the same 'shall be subject
to review by the Supreme Court,' " 39 which in turn suggests an appeal by petition for review under
Rule 45. Therefore, our jurisdiction over cases emanating from the Civil Service Commission is
limited to complaints of lack or excess of jurisdiction or grave abuse of discretion tantamount to lack
or excess of jurisdiction, complaints that justify certiorari under Rule 65.
While Republic Act No. 6656 states that judgments of the Commission are "final and
executory"40 and hence, unappealable, under Rule 65, certiorari precisely lies in the absence of an
appeal. 41
Accordingly, we accept Commissioner Mison petition (G.R. No. 85310) which clearly charges the
Civil Service Commission with grave abuse of discretion, a proper subject of certiorari, although it
may not have so stated in explicit terms.
As to charges that the said petition has been filed out of time, we reiterate that it has been filed
seasonably. It is to be stressed that the Solicitor General had thirty days from September 23, 1988
(the date the Resolution, dated September 20,1988, of the Civil Service Commission, denying
reconsideration, was received) to commence the instant certiorari proceedings. As we stated, under
the Constitution, an aggrieved party has thirty days within which to challenge "any decision, order, or
ruling" 42 of the Commission. To say that the period should be counted from the Solicitor's receipt of
the main Resolution, dated June 30, 1988, is to say that he should not have asked for
reconsideration But to say that is to deny him the right to contest (by a motion for reconsideration)
any ruling, other than the main decision, when, precisely, the Constitution gives him such a right.

That is also to place him at a "no-win" situation because if he did not move for a reconsideration, he
would have been faulted for demandingcertiorari too early, under the general rule that a motion for
reconsideration should preface a resort to a special civil action. 43 Hence, we must reckon the thirtyday period from receipt of the order of denial.
We come to the merits of these cases.
G.R. Nos. 81954, 81967, 82023, and 85335:
The Case for the Employees
The petitioner in G.R. No. 81954, Cesar Dario was one of the Deputy Commissioners of the Bureau
of Customs until his relief on orders of Commissioner Mison on January 26, 1988. In essence, he
questions the legality of his dismiss, which he alleges was upon the authority of Section 59 of
Executive Order No. 127, supra, hereinbelow reproduced as follows:
SEC. 59. New Structure and Pattern. Upon approval of this Executive Order, the officers and
employees of the Ministry shall, in a holdover capacity, continue to perform their respective
duties and responsibilities and receive the corresponding salaries and benefits unless in the
meantime they are separated from government service pursuant to Executive Order No. 17
(1986) or Article III of the Freedom Constitution.
The new position structure and staffing pattern of the Ministry shall be approved and
prescribed by the Minister within one hundred twenty (120) days from the approval of this
Executive Order and the authorized positions created hereunder shall be filled with regular
appointments by him or by the President, as the case may be. Those incumbents whose
positions are not included therein or who are not reappointed shall be deemed separated
from the service. Those separated from the service shall receive the retirement benefits to
which they may be entitled under existing laws, rules and regulations. Otherwise, they shall
be paid the equivalent of one month basic salary for every year of service, or the equivalent
nearest fraction thereof favorable to them on the basis of highest salary received but in no
case shall such payment exceed the equivalent of 12 months salary.
No court or administrative body shall issue any writ of preliminary injunction or restraining
order to enjoin the separation/replacement of any officer or employee effected under this
Executive Order.44
a provision he claims the Commissioner could not have legally invoked. He avers that he could not
have been legally deemed to be an "[incumbent] whose [position] [is] not included therein or who [is]
not reappointed"45 to justify his separation from the service. He contends that neither the Executive
Order (under the second paragraph of the section) nor the staffing pattern proposed by the
Secretary of Finance 46 abolished the office of Deputy Commissioner of Customs, but, rather,
increased it to three. 47 Nor can it be said, so he further maintains, that he had not been
"reappointed" 48 (under the second paragraph of the section) because "[[r]eappointment therein
presupposes that the position to which it refers is a new one in lieu of that which has been abolished
or although an existing one, has absorbed that which has been abolished." 49 He claims, finally, that
under the Provisional Constitution, the power to dismiss public officials without cause ended on
February 25, 1987,50 and that thereafter, public officials enjoyed security of tenure under the
provisions of the 1987 Constitution.51
Like Dario Vicente Feria, the petitioner in G.R. No. 81967, was a Deputy Commissioner at the
Bureau until his separation directed by Commissioner Mison. And like Dario he claims that under the

1987 Constitution, he has acquired security of tenure and that he cannot be said to be covered by
Section 59 of Executive Order No. 127, having been appointed on April 22, 1986 during the
effectivity of the Provisional Constitution. He adds that under Executive Order No. 39, "ENLARGING
THE POWERS AND FUNCTIONS OF THE COMMISSIONER OF CUSTOMS,"52 the Commissioner
of Customs has the power "[t]o appoint all Bureau personnel, except those appointed by the
President," 53 and that his position, which is that of a Presidential appointee, is beyond the control of
Commissioner 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.
The Case for Commissioner Mison
In his comments, the Commissioner relies on this Court's resolution in Jose v. Arroyo54 in which the
following statement appears in the last paragraph thereof:
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, the reorganization 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. 55
For this reason, Mison posits, claims of violation of security of tenure are allegedly no defense. He
further states that the deadline prescribed by the Provisional Constitution (February 25, 1987) has
been superseded by the 1987 Constitution, specifically, the transitory provisions thereof, 56 which
allows a reorganization thereafter (after February 25, 1987) as this very Court has so declared
in Jose v. Arroyo. Mison submits that contrary to the employees' argument, Section 59 of Executive
Order No. 127 is applicable (in particular, to Dario and Feria in the sense that retention in the
Bureau, under the Executive Order, depends on either retention of the position in the new staffing
pattern or reappointment of the incumbent, and since the dismissed employees had not been
reappointed, they had been considered legally separated. Moreover, Mison proffers that under
Section 59 incumbents are considered on holdover status, "which means that all those positions
were considered vacant." 57The Solicitor General denies the applicability of Palma-Fernandez v. De
la Paz 58 because that case supposedly involved a mere transfer and not a separation. He rejects,
finally, the force and effect of Executive Order Nos. 17 and 39 for the reason that Executive Order
No. 17, which was meant to implement the Provisional Constitution, 59had ceased to have force and
effect upon the ratification of the 1987 Constitution, and that, under Executive Order No. 39, the
dismissals contemplated were "for cause" while the separations now under question were "not for
cause" and were a result of government reorganize organization decreed by Executive Order No.
127. Anent Republic Act No. 6656, he expresses doubts on the constitutionality of the grant of
retroactivity therein (as regards the reinforcement of security of tenure) since the new Constitution
clearly allows reorganization after its effectivity.
G.R. Nos. 85310 and 86241
The Position of Commissioner Mison

Commissioner's twin petitions are direct challenges to three rulings of the Civil Service Commission:
(1) the Resolution, dated June 30, 1988, reinstating the 265 customs employees above-stated; (2)
the Resolution, dated September 20, 1988, denying reconsideration; and (3) the Resolution, dated
November 16, 1988, reinstating five employees. The Commissioner's arguments are as follows:
1. The ongoing government reorganization is in the nature of a "progressive" 60 reorganization
"impelled by the need to overhaul the entire government bureaucracy" 61 following the people power
revolution of 1986;
2. There was faithful compliance by the Bureau of the various guidelines issued by the President, in
particular, as to deliberation, and selection of personnel for appointment under the new staffing
pattern;
3. The separated employees have been, under Section 59 of Executive Order No. 127, on mere
holdover standing, "which means that all positions are declared vacant;" 62
4. Jose v. Arroyo has declared the validity of Executive Order No. 127 under the transitory provisions
of the 1987 Constitution;
5. Republic Act No. 6656 is of doubtful constitutionality.
The Ruling of the Civil Service Commission
The position of the Civil Service Commission is as follows:
1. Reorganizations 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 on
the contrary, the dismissals now disputed were carried out by mere service of notices;
2. The current Customs reorganization has not been made according to Malaca;ang guidelines;
information on file with the Commission shows that Commissioner Mison has been appointing
unqualified personnel;
3. Jose v. Arroyo, in validating Executive Order No. 127, did not countenance illegal removals;
4. Republic Act No. 6656 protects security of tenure in the course of reorganizations.
The Court's ruling
Reorganization, Fundamental Principles of.
I.
The core provision of law involved is Section 16 Article XVIII, of the 1987 Constitution. We quote:
Sec. 16. Career civil service employees separated from the service 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 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 Government or in any of its

subdivisions, instrumentalities, or agencies, including government-owned or controlled

corporations and their subsidiaries. This provision also applies to career officers whose
resignation, tendered in line with the existing policy, had been accepted. 63
The Court considers the above provision critical for two reasons: (1) It is the only provision in so
far as it mentions removals not for cause that would arguably support the challenged dismissals
by mere notice, and (2) It is the single existing law on reorganization after the ratification of the 1987
Charter, except Republic Act No. 6656, which came much later, on June 10, 1988. [Nota been
Executive Orders No. 116 (covering the Ministry of Agriculture & Food), 117 (Ministry of Education,
Culture & Sports), 119 (Health), 120 (Tourism), 123 (Social Welfare & Development), 124 (Public
Works & Highways), 125 transportation & Communications), 126 (Labor & Employment), 127
(Finance), 128 (Science & Technology), 129 (Agrarian Reform), 131 (Natural Resources), 132
(Foreign Affairs), and 133 (Trade & Industry) were all promulgated on January 30,1987, prior to the
adoption of the Constitution on February 2, 1987].64
It is also to be observed that unlike the grants of power to effect reorganizations under the past
Constitutions, the above provision comes as a mere recognition of the right of the Government to
reorganize its offices, bureaus, and instrumentalities. Under Section 4, Article XVI, of the 1935
Constitution:
Section 4. All officers and employees in the existing Government of the Philippine Islands
shall continue in office until the Congress shall provide otherwise, but all officers whose
appointments are by this Constitution vested in the President shall vacate their respective
office(s) upon the appointment and qualification of their successors, if such appointment is
made within a period of one year from the date of the inauguration of the Commonwealth of
the Philippines. 65
Under Section 9, Article XVII, of the 1973 Charter:
Section 9. All officials and employees in the existing Government of the Republic of the
Philippines shall continue in office until otherwise provided by law or decreed by the
incumbent President of the Philippines, but all officials whose appointments are by this
Constitution vested in the Prime Minister shall vacate their respective offices upon the
appointment and qualification of their successors. 66
The Freedom Constitution is, as earlier seen, couched in similar language:
SECTION 2. All elective and appointive officials and employees under the 1973 Constitution
shall continue in office until otherwise provided by proclamation or executive order or upon
the appointment and qualification of their successors, if such is made within a period of one
year from February 25, 1986.67
Other than references to "reorganization following the ratification of this Constitution," there is no
provision for "automatic" vacancies under the 1987 Constitution.
Invariably, transition periods are characterized by provisions for "automatic" vacancies. They are
dictated by the need to hasten the passage from the old to the new Constitution free from the
"fetters" of due process and security of tenure.
At this point, we must distinguish removals from separations arising from abolition of office (not by
virtue of the Constitution) as a result of reorganization carried out by reason of economy or to

remove redundancy of functions. In the latter case, the Government is obliged to prove good
faith.68 In case of removals undertaken to comply with clear and explicit constitutional mandates, the
Government is not hard put to prove anything, plainly and simply because the Constitution allows it.
Evidently, the question is whether or not Section 16 of Article XVIII of the 1987 Constitution is a grant
of a license upon the Government to remove career public officials it could have validly done under
an "automatic" vacancy-authority and to remove them without rhyme or reason.
As we have seen, since 1935, transition periods have been characterized by provisions for
"automatic" vacancies. We take the silence of the 1987 Constitution on this matter as a restraint
upon the Government to dismiss public servants at a moment's notice.
What 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 1935, 1973, and 1986 counterparts had so stated.
The constitutional "lapse" means either one of two things: (1) The Constitution meant to continue the
reorganization under the prior Charter (of the Revolutionary Government), in the sense that the latter
provides for "automatic" vacancies, or (2) It meant to put a stop to those 'automatic" vacancies. By
itself, however, it is ambiguous, referring as it does to two stages of reorganization the first, to its
conferment or authorization under Proclamation No. 3 (Freedom Charter) and the second, to its
implementation on its effectivity date (February 2, 1987). But as we asserted, if the intent of Section
16 of Article XVIII of the 1987 Constitution were to extend the effects of reorganize tion under the
Freedom 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.
lwph1.t

Second, plainly the concern of Section 16 is to ensure compensation for victims" of constitutional
revamps whether under the Freedom or existing Constitution and only secondarily and
impliedly, to allow reorganization. We turn to the records of the Constitutional Commission:
INQUIRY OF MR. PADILLA
On the query of Mr. Padilla whether there is a need for a specific reference to Proclamation
No. 3 and not merely state "result of the reorganization following the ratification of this
Constitution', Mr. Suarez, on behalf of the Committee, replied that it is necessary, inasmuch
as there are two stages of reorganization covered by the Section.
Mr. Padilla pointed out that since the proposal of the Commission on Government
Reorganization have not been implemented yet, it would be better to use the phrase
"reorganization before or after the ratification of the Constitution' to simplify the Section. Mr.
Suarez instead suggested the phrase "as a result of the reorganization effected before or
after the ratification of the Constitution' on the understanding that the provision would apply
to employees terminated because of the reorganization pursuant to Proclamation No. 3 and
even those affected by the reorganization during the Marcos regime. Additionally, Mr. Suarez
pointed out that it is also for this reason that the Committee specified the two Constitutions
the Freedom Constitution and the 1986 [1987] Constitution. 69
Simply, the provision benefits career civil service employees separated from the service. And the
separation contemplated must be due to or the result of (1) the reorganization pursuant to
Proclamation No. 3 dated March 25, 1986, (2) the reorganization from February 2, 1987, and (3) the
resignations of career officers tendered in line with the existing policy and which resignations have
been accepted. The phrase "not for cause" is clearly and primarily exclusionary, to exclude those

career civil service employees separated "for cause." In other words, in order to be entitled to the
benefits granted under Section 16 of Article XVIII of the Constitution of 1987, two requisites, one
negative and the other positive, must concur, to wit:
1. the separation must not be for cause, and
2. the separation must be due to any of the three situations mentioned above.
By its terms, the authority to remove public officials under the Provisional Constitution ended on
February 25, 1987, advanced by jurisprudence to February 2, 1987. 70 It Can only mean, then, that
whatever reorganization is taking place is upon the authority of the present Charter, and necessarily,
upon the mantle of its provisions and safeguards. Hence, it can not be legitimately stated that we are
merely continuing what the revolutionary Constitution of the Revolutionary Government had started.
We are through with reorganization under the Freedom Constitution the first stage. We are on the
second stage that inferred from the provisions of Section 16 of Article XVIII of the permanent
basic document.
This is confirmed not only by the deliberations of the Constitutional Commission, supra, but is
apparent from the Charter's own words. It also warrants our holding in Esguerra and PalmaFernandez, in which we categorically declared that after February 2, 1987, incumbent officials and
employees have acquired security of tenure, which is not a deterrent against separation by
reorganization under the quondam fundamental law.
Finally, there is the concern of the State to ensure that this reorganization is no "purge" like the
execrated reorganizations under martial rule. And, of course, we also have the democratic character
of the Charter itself.
Commissioner Mison would have had a point, insofar as he contends that the reorganization is
open-ended ("progressive"), had it been a reorganization under the revolutionary authority,
specifically of the Provisional Constitution. For then, the power to remove government employees
would have been truly wide ranging and limitless, not only because Proclamation No. 3 permitted it,
but because of the nature of revolutionary authority itself, its totalitarian tendencies, and the
monopoly of power in the men and women who wield it.
What must be understood, however, is that notwithstanding her immense revolutionary powers, the
President was, nevertheless, magnanimous in her rule. This is apparent from Executive Order No.
17, which established safeguards against the strong arm and ruthless propensity that accompanies
reorganizations notwithstanding the fact that removals arising therefrom were "not for cause," and
in spite of the fact that such removals would have been valid and unquestionable. Despite that, the
Chief Executive saw, as we said, the "unnecessary anxiety and demoralization" in the government
rank and file that reorganization was causing, and prescribed guidelines for personnel action.
Specifically, she said on May 28, 1986:
WHEREAS, in order to obviate unnecessary anxiety and demoralization among the
deserving officials and employees, particularly in the career civil service, it is necessary to
prescribe the rules and regulations for implementing the said constitutional provision to
protect career civil servants whose qualifications and performance meet the standards of
service demanded by the New Government, and to ensure that only those found corrupt,
inefficient and undeserving are separated from the government service; 71
Noteworthy is the injunction embodied in the Executive Order that dismissals should be made on the
basis of findings of inefficiency, graft, and unfitness to render public service. *

The President's Memorandum of October 14, 1987 should furthermore be considered. We quote, in
part:
Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that
there will be no further layoffs this year of personnel as a result of the government
reorganization. 72
Assuming, then, that this reorganization allows removals "not for cause" in a manner that would
have been permissible in a revolutionary setting as Commissioner Mison so purports, it would seem
that the Commissioner would have been powerless, in any event, to order dismissals at the Customs
Bureau left and right. Hence, even if we accepted his "progressive" reorganization theory, he would
still have to come to terms with the Chief Executive's subsequent directives moderating the
revolutionary authority's plenary power to separate government officials and employees.
Reorganization under the 1987 Constitution, Nature, Extent, and Limitations of; Jose v. Arroyo,
clarified.
The controversy seems to be that we have, ourselves, supposedly extended the effects of
government reorganization under the Provisional Constitution to the regime of the 1987
Constitution. Jose v. Arroyo73 is said to be the authority for this argument. Evidently, if Arroyo indeed
so ruled, Arroyo would be inconsistent with the earlier pronouncement of Esguerra and the later
holding of Palma-Fernandez. The question, however, is: Did Arroyo, in fact, extend the effects of
reorganization under the revolutionary Charter to the era of the new Constitution?
There are a few points about Arroyo that have to be explained. First, the opinion expressed therein
that "[b]y virtue of said provision the reorganization of the Bureau of Customs under Executive Order
No. 127 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" 74 is
in the nature of an obiter dictum. We dismissed Jose's petition 75 primarily because it was "clearly
premature, speculative, and purely anticipatory, based merely on newspaper reports which do not
show any direct or threatened injury," 76 it appearing that the reorganization of the Bureau of
Customs had not been, then, set in motion. Jose 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 Morales v. Parades,77 it was held that an obiter
dictum "lacks the force of an adjudication and should not ordinarily be regarded as such." 78
Secondly, Arroyo is an unsigned resolution while Palma Fernandez is a full-blown decision, although
both are en banc cases. While a resolution of the Court is no less forceful than a decision, the latter
has a special weight.
Thirdly, Palma-Fernandez v. De la Paz comes as a later doctrine. (Jose v. Arroyo was promulgated
on August 11, 1987 while Palma-Fernandez was decided on August 31, 1987.) It is well-established
that a later judgment supersedes a prior one in case of an inconsistency.
As we have suggested, the transitory provisions of the 1987 Constitution allude to two stages of the
reorganization, the first stage being the reorganization under Proclamation No. 3 which had
already been consummated the second stage being that adverted to in the transitory provisions
themselves which is underway. Hence, when we spoke, in Arroyo, of reorganization after the
effectivity of the new Constitution, we referred to the second stage of the reorganization. Accordingly,
we cannot be said to have carried over reorganization under the Freedom Constitution to its 1987
counterpart.

Finally, Arroyo is not necessarily incompatible with Palma-Fernandez (or Esguerra).

As we have demonstrated, reorganization under the aegis of the 1987 Constitution is not as stern as
reorganization under the prior Charter. Whereas the latter, sans the President's subsequently
imposed constraints, envisioned a purgation, the same cannot be said of the reorganization inferred
under the new Constitution because, precisely, the new Constitution seeks to usher in a democratic
regime. But even if we concede ex gratia argumenti that Section 16 is an exception to due process
and no-removal-"except for cause provided by law" principles enshrined in the very same 1987
Constitution, 79 which may possibly justify removals "not for cause," there is no contradiction in terms
here because, while the former Constitution left the axe to fall where it might, the present organic act
requires that removals "not for cause" must be as a result of reorganization. As we observed, the
Constitution does not provide for "automatic" vacancies. It must also pass the test of good faith a
test not obviously required under the revolutionary government formerly prevailing, but a test wellestablished in democratic societies and in this government under a democratic Charter.
When, therefore, Arroyo permitted a reorganization under Executive Order No. 127 after the
ratification of the 1987 Constitution, Arroyo permitted a reorganization provided that it is done in
good faith. Otherwise, security of tenure would be an insuperable implement. 80
Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good
faith. 81 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. In that event, no dismissal (in case of a dismissal)
or separation actually occurs because the position itself ceases to exist. And in that case, security of
tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else but a
separation or removal, is done for political reasons or purposely to defeat sty of tenure, or otherwise
not in good faith, no valid "abolition' takes place and whatever "abolition' is done, is void ab initio.
There is an invalid "abolition" as where there is merely a change of nomenclature of positions, 82 or
where claims of economy are belied by the existence of ample funds. 83
It is to be stressed that by predisposing a reorganization to the yardstick of good faith, we are not, as
a consequence, imposing a "cause" for restructuring. Retrenchment in the course of a reorganization
in good faith is still removal "not for cause," if by "cause" we refer to "grounds" or conditions that call
for disciplinary action.**
Good faith, as a component of a reorganization under a constitutional regime, is judged from the
facts of each case. However, under Republic Act No. 6656, we are told:
SEC. 2. No officer or employee in the career service shall be removed except for a valid
cause and after due notice and hearing. A valid cause for removal exists 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 exigencies of the
service, or other lawful causes allowed by the Civil Service Law. The existence 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 party: (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 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. 84

It is in light hereof that we take up questions about Commissioner Mison's good faith, or lack of it.
Reorganization of the Bureau of Customs,
Lack of Good Faith in.
The Court finds that after February 2, 1987 no perceptible restructuring of the Customs hierarchy
except for the change of personnel has occurred, which would have justified (an things being
equal) the contested dismisses. The contention that the staffing pattern at the Bureau (which would
have furnished a justification for a personnel movement) is the same s pattern prescribed by Section
34 of Executive Order No. 127 already prevailing when Commissioner Mison took over the Customs
helm, has not been successfully contradicted 85 There is no showing that legitimate structural
changes have been made or a reorganization actually undertaken, for that matter at the
Bureau since Commissioner Mison assumed office, which would have validly prompted him to hire
and fire employees. There can therefore be no actual reorganization to speak of, in the sense, say,
of reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or
redundancy of functions, but a revamp of personnel pure and simple.
The records indeed show that Commissioner Mison separated about 394 Customs personnel but
replaced them with 522 as of August 18, 1988. 86 This betrays a clear intent to "pack" the Bureau of
Customs. He did so, furthermore, in defiance of the President's directive to halt further layoffs as a
consequence of reorganization. 87Finally, he was aware that layoffs should observe the procedure
laid down by Executive Order No. 17.
We are not, of course, striking down Executive Order No. 127 for repugnancy to the Constitution.
While the act is valid, still and all, the means with which it was implemented is not. 88
Executive Order No. 127, Specific Case of.
With respect to Executive Order No. 127, Commissioner Mison submits that under Section 59
thereof, "[t]hose incumbents whose positions are not included therein or who are not reappointed
shall be deemed separated from the service." He submits that because the 394 removed personnel
have not been "reappointed," they are considered terminated. To begin with, the Commissioner's
appointing power is subject to the provisions of Executive Order No. 39. Under Executive Order No.
39, the Commissioner of Customs may "appoint all Bureau personnel, except those appointed by the
President." 89
Accordingly, with respect to Deputy Commissioners Cesar Dario and Vicente Feria, Jr.,
Commissioner Mison could not have validly terminated them, they being Presidential appointees.
Secondly, and as we have asserted, Section 59 has been rendered inoperative according to our
holding in Palma-Fernandez.
That Customs employees, under Section 59 of Executive Order No. 127 had been on a mere
holdover status cannot mean that the positions held by them had become vacant. In PalmaFernandez, we said in no uncertain terms:
The argument that, on the basis of this provision, petitioner's term of office ended on 30
January 1987 and that she continued in the performance of her duties merely in a hold over
capacity and could be transferred to another position without violating any of her legal rights,
is untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate
reorganization and would have lapsed on 25 February 1987 (under the Provisional

Constitution), but advanced to February 2, 1987 when the 1987 Constitution became
effective (De Leon. et al., vs. Hon. Benjamin B. Esquerra, et. al., G.R. No. 78059, 31 August
1987). After the said date the provisions of the latter on security of tenure govern. 90
It should be seen, finally, that we are not barring Commissioner Mison from carrying out a
reorganization under the transitory provisions of the 1987 Constitution. But such a reorganization
should be subject to the criterion of good faith.
Resume.
In resume, we restate as follows:
1. The President could have validly removed government employees, elected or appointed, without
cause but only before the effectivity of the 1987 Constitution on February 2, 1987 (De Leon v.
Esguerra, supra; Palma-Fernandez vs. De la Paz, supra); in this connection, Section 59 (on nonreappointment of incumbents) of Executive Order No. 127 cannot be a basis for termination;
2. In such a case, dismissed employees shall be paid separation and retirement benefits or upon
their option be given reemployment opportunities (CONST. [1987], art. XVIII, sec. 16; Rep. Act No.
6656, sec. 9);
3. From February 2, 1987, the State does not lose the right to reorganize the Government resulting
in the separation of career civil service employees [CONST. (1987), supra] provided, that such a
reorganization is made in good faith. (Rep. Act No. 6656, supra.)
G.R. No. 83737
This disposition also resolves G.R. No. 83737. As we have indicated, G.R. No. 83737 is a challenge
to the validity of Republic Act No. 6656. In brief, it is argued that the Act, insofar as it strengthens
security of tenure 91 and as far as it provides for a retroactive effect, 92 runs counter to the transitory
provisions of the new Constitution on removals not for cause.
It can be seen that the Act, insofar as it provides for reinstatament of employees separated without
"a valid cause and after due notice and hearing" 93 is not contrary to the transitory provisions of the
new Constitution. The Court reiterates that although the Charter's 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. Moreover, it can be seen that the statute itself recognizes removals without cause.
However, it also acknowledges the possibility of the leadership using the artifice of reorganization to
frustrate security of tenure. For this reason, it has installed safeguards. There is nothing
unconstitutional about the Act.
We recognize the injury Commissioner Mison's replacements would sustain. We also commisserate
with them. But our concern is the greater wrong inflicted on the dismissed employees on account of
their regal separation from the civil service.
WHEREFORE, THE RESOLUTIONS OF THE CIVIL SERVICE COMMISSION, DATED JUNE 30,
1988, SEPTEMBER 20, 1988, NOVEMBER 16, 1988, INVOLVED IN G.R. NOS. 85310, 85335, AND
86241, AND MAY 8, 1989, INVOLVED IN G.R. NO. 85310, ARE AFFIRMED.

THE PETITIONS IN G.R. NOS. 81954, 81967, 82023, AND 85335 ARE GRANTED. THE
PETITIONS IN G.R. NOS. 83737, 85310 AND 86241 ARE DISMISSED.
THE COMMISSIONER OF CUSTOMS IS ORDERED TO REINSTATE THE EMPLOYEES
SEPARATED AS A RESULT OF HIS NOTICES DATED JANUARY 26, 1988.
THE EMPLOYEES WHOM COMMISSIONER MISON MAY HAVE APPOINTED AS
REPLACEMENTS ARE ORDERED TO VACATE THEIR POSTS SUBJECT TO THE PAYMENT OF
WHATEVER BENEFITS THAT MAY BE PROVIDED BY LAW.
NO COSTS.
IT IS SO ORDERED.
Gutierrez, Jr., Paras, Gancayco, Bidin, Cortes, Gri;o-Aquino and Medialdea, JJ., concur.
Padilla, J., took no part.

Separate Opinions
CRUZ, J., concurring:
I concur with the majority view so ably presented by Mr. Justice Abraham F. Sarmiento. While
additional comments may seem superfluous in view of the exhaustiveness of his ponencia, I
nevertheless offer the following brief observations for whatever they may be worth.
Emphasizing Article XVII, Section 16 of the Constitution, the dissenting opinion considers the
ongoing government reorganization valid because it is merely a continuation of the reorganization
begun during the transition period. The reason for this conclusion is the phrase "and the
reorganization following the ratification of the Constitution," that is to say, after February 2, 1987,
appearing in the said provision. The consequence (and I hope I have not misread it) is that the
present reorganization may still be undertaken with the same "absoluteness" that was allowed the
revolutionary reorganization although the Freedom Constitution is no longer in force.
Reorganization of the government may be required by the legislature even independently of specific
constitutional authorization, as in the case, for example, of R.A. No. 51 and B.P. No. 129. Being
revolutionary in nature, the reorganization decreed by Article III of the Freedom Constitution was
unlimited as to its method except only as it was later restricted by President Aquino herself through
various issuances, particularly E.O. No. 17. But this reorganization, for all its permitted
summariness, was not indefinite. Under Section 3 of the said Article III, it was allowed only up to
February 29,1987 (which we advanced to February 2, 1987, when the new Constitution became
effective).
The clear implication is that any government reorganization that may be undertaken thereafter must
be authorized by the legislature only and may not be allowed the special liberties and protection
enjoyed by the revolutionary reorganization. Otherwise, there would have been no necessity at all for
the time limitation expressly prescribed by the Freedom Constitution.

I cannot accept the view that Section 16 is an authorization for the open-ended reorganization of the
government "following the ratification of the Constitution." I read the provision as merely conferring
benefits deservedly or not on persons separated from the government as a result of the
reorganization of the government, whether undertaken during the transition period or as a result of a
law passed thereafter. What the grants is privileges to the retirees, not power to the provision
government. It is axiomatic that grants of power are not lightly inferred, especially if these impinge on
individual rights, and I do not see why we should depart from this rule.
To hold that the present reorganization is a continuation of the one begun during the transition period
is to recognize the theory of the public respondent that all officers and employees not separated
earlier remain in a hold-over capacity only and so may be replaced at any time even without cause.
That is a dangerous proposition that threatens the security and stability of every civil servant in the
executive department. What is worse is that this situation may continue indefinitely as the claimed
"progressive" reorganization has no limitation as to time.
Removal imports the forcible separation of the incumbent before the expiration of his term and can
be done only for cause as provided by law. Contrary to common belief, a reorganization does not
result in removal but in a different mode of terminating official relations known as abolition of the
office (and the security of tenure attached thereto.) The erstwhile holder of the abolished office
cannot claim he has been removed without cause in violation of his constitutional security of tenure.
The reason is that the right itself has disappeared with the abolished office as an accessory following
the principal. (Ocampo v. Sec. of Justice, 51 O.G. 147; De la Llana v. Alba, 112 SCRA 294;
Manalang v. Quitoriano, 94 Phil. 903.)
This notwithstanding, the power to reorganize is not unlimited. It is essential that it be based on a
valid purpose, such as the promotion of efficiency and economy in the government through a
pruning of offices or the streamlining of their functions. (Cervantes v. Auditor-General, 91 Phil. 359.)
Normally, a reorganization cannot be validly undertaken as a means of purging the undesirables for
this would be a removal in disguise undertaken enmasse to circumvent the constitutional
requirement of legal cause. (Eradication of graft and corruption was one of the expressed purposes
of the revolutionary organization, but this was authorized by the Freedom Constitution itself.) In
short, a reorganization, to be valid, must be done in good faith. (Urgelio v. Osmena, 9 SCRA 317;
Cuneta v. Court of Appeals, 1 SCRA 663; Carino v. ACCFA, 18 SCRA 183.)
A mere recitation no matter how lengthy of the directives, guidelines, memoranda, etc. issued
by the government and the action purportedly taken thereunder does not by itself prove good faith.
We know only too well that these instructions, for all their noble and sterile purposes, are rarely
followed in their actual implementation. The reality in this case, as the majority opinion has pointed
out and as clearly established in the hearing we held, is that the supposed reorganization was
undertaken with an eye not to achieving the avowed objectives but to accommodating new
appointees at the expense of the dislodged petitioners. That was also the finding of the Civil Service
Commission, to which we must accord a becoming respect as the constitutional office charged with
the protection of the civil service from the evils of the spoils system.
The present administration deserves full support in its desire to improve the civil service, but this
objective must be pursued in a manner consistent with the Constitution. This praiseworthy purpose
cannot be accomplished by an indiscriminate reorganization that will sweep in its wake the innocent
along with the redundant and inept, for the benefit of the current favorites.
MELENCIO-HERRERA, J., dissenting:

The historical underpinnings of Government efforts at reorganization hark back to the people power
phenomenon of 22-24 February 1986, and Proclamation No. 1 of President Corazon C. Aquino,
issued on 25 February 1986, stating in no uncertain terms that "the people expect a reorganization
of government." In its wake followed Executive Order No. 5, issued on 12 March 1986, "Creating a
Presidential Commission on Government Reorganization," with the following relevant provisions:
WHEREAS, there is need to effect the necessary and proper changes in the organizational
and functional structures of the national and local governments, its agencies and
instrumentalities, including government-owned and controlled corporations and their
subsidiaries, in order to promote economy, efficiency and effectiveness in the delivery of
public services
xxx

xxx

xxx

Section 2. The functional jurisdiction of the PCGR shall encompass, as necessary,

the reorganization of the national and local governments, its agencies and instrumentalities
including government-owned or controlled corporations and their subsidiaries.
xxx

xxx

xxx (Emphasis supplied)

Succeeding it was Proclamation No. 3, dated 25 March 1986, also known as the Freedom
Constitution, declaring, in part, in its Preamble as follows:
WHEREAS, the direct mandate of the people as manifested by their extraordinary action
demands the complete reorganization of the government, ... (Emphasis supplied)
and pertinently providing:
ARTICLE II
Section I
xxx

xxx

xxx

The President shall give priority to measures to achieve the mandate of the people to:
(a) Completely reorganize the government and eradicate unjust and oppressive
structures, and all iniquitous vestiges of the previous regime;" (Emphasis supplied)
xxx

xxx

xxx

ARTICLE III GOVERNMENT REORGANIZATION

Section 2. All elective and appointive officials and employees under the 1973
Constitution shall continue in office until otherwise provided by proclamation or executive
order or upon the designation or appointment and qualification of their successors, if such is
made within a period of one year from February 25, 1986.
Section 3. Any public office or employee separated from the service as a result of the
reorganization effected under this Proclamation shall, if entitled under the laws then in force,
receive the retirement and other benefits accruing thereunder. (Emphasis ours)

On 28 May 1986, Executive Order No. 17 was issued "Prescribing Rules and Regulations for the
Implementation of Section 2, Article III of the Freedom Constitution' providing, inter alia, as follows:
Section 1. In the course of implementing Article III, Section 2 of the Freedom Constitution,
the Head of each Ministry shall see to it that the separation or replacement of officers and
employees is made only for justifiable reasons, to prevent indiscriminate dismissal, of
personnel in the career civil service whose qualifications and performance meet the
standards of public service of the New Government.
xxx

xxx

xxx

The Ministry concerned shall adopt its own rules and procedures for the review and
assessment of its own personnel, including the identification of sensitive positions which
require more rigid assessment of the incumbents, and shall complete such
review/assessment as expeditiously as possible but not later than February 24, 1987 to
prevent undue demoralization in the public service.
Section 2. The Ministry Head concerned, on the basis of such review and assessment shall
determine who shall be separated from the service. Thereafter, he shall issue to the official
or employee concerned a notice of separation which shall indicate therein the reason/s or
ground /s for such separation and the fact that the separated official or employee has the
right to file a petition for reconsideration pursuant to this Order. Separation from the service
shall be effective upon receipt of such notice, either personally by the official or employee
concerned or on his behalf by a person of sufficient discretion.
Section 3. The following shall be the grounds for separation/ replacement of personnel:
1. Existence of a case for summary dismissal pursuant to Section 40 of the
Civil Service Law;
2. Existence of a probable cause for violation of the Anti-Graft and Corrupt
Practice Act as determined by the Ministry Head concerned;
3. Gross incompetence or inefficiency in the discharge of functions;
4. Misuse of Public office for partisan political purposes;
5. Any other analogous ground showing that the incumbent is unfit to remain
in the service or his separation/replacement is in the interest of the service.
Section 11. This Executive Order shall not apply to elective officials or those designated to
replace them, presidential appointees, casual and contractual employees, or officials and
employees removed pursuant to disciplinary proceedings under the Civil Service Law and
rules, and to those laid off as a result of the reorganization undertaken pursuant to Executive
Order No. 5. (Emphasis supplied)
On 6 August 1986, Executive Order No. 39 was issued by the President "Enlarging the Powers and
Functions of the Commissioner of Customs", as follows:
xxx

xxx

xxx

SECTION 1. In addition to the powers and functions of the Commissioner of Customs, he is

hereby authorized, subject to the Civil Service Law and its implementing rules and
regulations:
a) To appoint all Bureau personnel, except those appointed by the President;
b) To discipline, suspend, dismiss or otherwise penalize erring Bureau
officers and employees;
c) To act on all matters pertaining to promotion, transfer, detail, reassignment,
reinstatement, reemployment and other personnel action, involving officers
and employees of the Bureau of Customs.
xxx

xxx

xxx

On 30 January 1987, Executive Order No. 127 was issued "Reorganizing the Ministry of Finance."
Similar Orders, approximately thirteen (13) in all, 1 were issued in respect of the other executive
departments. The relevant provisions relative to the Bureau of Customs read:
RECALLING that the reorganization of the government is mandated expressly in Article II,
Section l(a) and Article III of the Freedom Constitution;
HAVING IN MIND that pursuant to Executive Order No. 5 (1986), it is directed that the
necessary and proper changes in the organizational and functional structures of the
government, its agencies and instrumentalities, be effected in order to promote efficiency
and effectiveness in the delivery of public services;
BELIEVING that it is necessary to reorganize the Ministry of Finance to make it more
capable and responsive, organizationally and functionally, in its primary mandate of
judiciously generating and efficiently managing the financial resources of the Government, its
subdivisions and instrumentalities in order to attain the socio-economic objectives of the
national development programs.
xxx

xxx

xxx

SEC. 2. Reorganization. The Ministry of Finance, hereinafter referred to as Ministry,

is hereby reorganized, structurally and functionally, in accordance with the provisions of this
Executive Order.
SEC. 33. Bureau of Customs.
... Executive Order No. 39 dated 6 August 1986 which grants autonomy to the Commissioner
of Customs in matters of appointment and discipline of Customs personnel shall remain in
effect.
SEC. 55. Abolition of Units Integral to Ministry. All units not included in the structural
organization as herein provided and all positions thereof are hereby deemed abolished. ...
Their personnel shall be entitled to the benefits provided in the second paragraph of Section
59 hereof.

SEC. 59. New Structure and Pattern. Upon approval of this Executive Order, the officers
and employees of the Ministry shall, in a holdover capacity, continue to perform their
respective duties and responsibilities and receive the corresponding salaries and
benefits unless in the meantime they are separated from government service pursuant to
executive Order No. 17 (1986) or article III of the Freedom Constitution.
The new position structure and staffing pattern of the ministry shall be approved and
prescribed by the Minister within one hundred twenty (120) days from the approval of this
Executive Order and the authorized positions created hereunder shall be filled with regular
appointments by him or by the President, as the case may be. Those incumbents whose
positions are not included therein or who are not reappointed shall be deemed separated
from the service. Those separated from the service shall receive the retirement benefits to
which they may be entitled under the existing laws, rules and regulations. Otherwise, they
shall be paid the equivalent of one month basic salary for every year of service or the
equivalent nearest fraction thereof favorable to them on the basis of highest salary received,
but in no case shall such payment exceed the equivalent of 12 months salary.
No court or administrative body shall issue any writ or preliminary junction or restraining
order to enjoin the separation/replacement of any officer or employee affected under this
Executive Order.
Section 67 All laws, ordinances, rules, regulations and other issuances or parts thereof,
which are inconsistent with this Executive Order, are hereby repealed or modified
accordingly.
xxx

xxx

xxx (Emphasis ours)

On 2 February 1987, the present Constitution took effect (De Leon, et al., vs. Esguerra, G.R. No.
78059, August 31, 1987153 SCRA 602). Reorganization in the Government service pursuant to
Proclamation No. 3, supra, was provided for in its Section 16, Article XVIII entitled Transitory
Provisions, reading:
Section 16. Career civil service employees separated from the service 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 shall 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 lieu thereof, at the option of the
employees, they may be considered for employment in the Government or in any of its
subdivisions, instrumentalities, or agencies, including government owned or controlled
corporations and their subsidiaries. Ms provision also applies to career officers whose
resignation, tendered in line with the existing policy, has been accepted.
On 24 May 1987 the then Commissioner of Customs, Alexander A. Padilla, transmitted to the
Department of Finance for approval the proposed "position structure and staffing pattern" of the
Bureau of Customs. Said Department gave its imprimatur. Thereafter, the staffing pattern was
transmitted to and approved by the Department of Budget and Management on 7 September 1987
for implementation. Under the old staffing pattern, there were 7,302 positions while under the new
staffing pattern, there are 6,530 positions CSC Resolution in CSC Case No. 1, dated 20 September
1988, pp. 3-4).
On 22 September 1987, Salvador M. Mison assumed office as Commissioner of Customs.

On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of

Reorganization Executive Orders" was issued reading, insofar as revelant to these cases, as follows:
It is my concern that ongoing process of government reorganization be conducted in a
manner that is expeditious, as well as sensitive to the dislocating consequences arising from
specific personnel decisions.
The entire process of reorganization, and in particular the process of separation from
service, must be carried out in the most humane manner possible.
For this purpose, the following guidelines shall be strictly followed:
1. By October 21, 1987, all employees covered by the Executive Orders for
each agency on reorganization shall be:
a. informed of their reappointment or
b. offered another position in the same department/ agency or
c. informed of their termination.
2. In the event of an offer for a lower position, there will be no reduction in the
salary.
xxx

xxx

xxx
4. Each department/agency shall constitute a Reorganization Appeals Board
at the central office, on or before October 21, 1987, to review or reconsider
appeals or complaints relative to reorganization. All cases submitted to the
Boards shall be resolved subject to the following guidelines:
a. publication or posting of the appeal procedure promulgated by the
Department Secretary;
b. adherence to due process;
c. disposition within 30 days from submission of the case;
d written notification of the action taken and the grounds thereof.

Action by the Appeals Review Board does not preclude appeal to the Civil Service
Commission.
5. Placement in the new staffing pattern of incumbent personnel shall be
completed prior to the hiring of new personnel, if any.
xxx

xxx

xxx (Emphasis ours)

On 25 November 1987 Commissioner Mison wrote the President requesting a grace period until the
end of February 1988 within which to completely undertake the reorganization of the Bureau of

Customs pursuant to Executive Order No. 127 dated 30 January 1987. Said request was granted in
a letter-reply by Executive Secretary Catalino Macaraig, Jr., dated 22 December 1987.
On 6 January 1988, within the extended period requested, Bureau of Customs Memorandum "Re:
Guidelines on the Implementation of Reorganization Executive Orders" was issued in the same tenor
as the Malacanang Memorandum of 2 October 1987, providing inter alia:
To effectively implement the reorganization at the Bureau of Customs, particularly in the
selection and placement of personnel, and insure that the best qualified and most competent
personnel in the career service are retained, the following guidelines are hereby prescribed
for the guidance of all concerned
1. By February 28, 1988 all employees covered by Executive Order No. 127 and the
grace period extended to the Bureau of Customs by the President of the Philippines
on reorganization shall be:
a. informed of their reappointment, or
b. offered another position in the same department or agency or
c. informed of their termination.
2. In the event of termination, the employee shall:
a. be included in a consolidated list compiled by the Civil Service
Commission. All departments who are recruiting shall give preference to the
employees in the list; and
b. continue to receive salary and benefits until February 28, 1988, and
c. be guaranteed the release of separation benefits within 45 days from
termination and in no case later than June 15, 1988.
xxx

xxx

xxx (Emphasis supplied)

It is to be noted that paragraph 1 above and its sub-sections reproduced verbatim the Malacanang
Guidelines of 2 October 1987 in that the employees concerned were merely to be informed of their
termination.
On 28 January 1988 Commissioner Mison addressed identical letters of termination to Bureau of
Customs officers and employees effective on 28 February 1988.
As of 18 August 1988, Commissioner Mison appointed five hundred twenty-two (522) officials and
employees of the Bureau of Customs (CSC Resolution in CSC Case No. 1, dated 20 September
1988, p. 6). In fact, in a letter dated 27 January 1988, Commissioner Mison recommended Jose M.
Balde for appointment to President Aquino as one of three (3) Deputy Commissioners under
Executive Order No. 127.
In the interim, during the pendency of these Petitions, Republic Act No. 6656, entitled "An Act to
Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of

Government Reorganization" was passed by Congress on 9 June 1988. The President signed it into
law on 10 June 1988 and the statute took effect on 29 June 1988.
On 20 June 1988 Motions were filed, in these cases pending before this Court, invoking the
provisions of Republic Act No. 6656. The relevant provisions thereof read:
SECTION 1. It is hereby declared the policy of the State to protect the security of tenure of
civil service officers and employees in the reorganization of the various agencies of the
National government ....
SECTION 2. No officer or employee in the career service shall be removed except for a valid
cause and after due notice and hearing. A valid cause for removal exists 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 exigencies of the service,
or other lawful causes allowed by the Civil Service Law. The existence 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 party:
(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 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.
xxx

xxx

xxx

SECTION 9. All officers and employees who are found by the Civil Service Commission to
have been separated in violation of the provisions of this Act, 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. Unless 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 existing laws within ninety (90) 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 be: Provided, 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 (1) month
salary for every year of service. Such separation pay and retirement benefits shall have
priority of payment out of the savings of the department or agency concerned.
xxx

xxx

xxx

SECTION 11. The executive branch of the government shall implement reorganization
schemes within a specified period of time authorized by law.
In the case of the 1987 reorganization of the executive branch, all departments and agencies
which are authorized by executive orders promulgated by the President to reorganize shall
have ninety (90) days from the approval of this Act within which to implement their respective
reorganization plans in accordance with the provisions of this Act.
xxx

xxx

xxx

SECTION 13. All laws, rules and regulations or parts thereof, inconsistent with the provisions
of this Act are hereby repealed or modified accordingly. The rights and benefits under this Act
shall be retroactive as of June 30, 1987.
xxx xxx xxx (Emphasis ours)
Given the foregoing statutory backdrop, the issues can now be addressed.
Scope of Section 16, Art. XVIII, 1987 Constitution
Crucial to the present controversy is the construction to be given to the abovementioned
Constitutional provision (SECTION 16, for brevity), which speaks of.
Career civil service employees separated from the service 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 ... (paragraphing
supplied).
To our minds, SECTION 16 clearly recognizes (1) the reorganization authorized by
Proclamation No. 3; (2) that such separation is NOT FOR CAUSE but as a result of the
reorganization pursuant to said Proclamation; and (3) that the reorganization pursuant to
Proclamation No. 3 may be continued even after the ratification of the 1987 Constitution
during the transition period.
Separation NOT FOR CAUSE
The canon for the removal or suspension of a civil service officer or employee is that it must be FOR
CAUSE. That means a guarantee of both procedural and substantive due process. Basically,
procedural due process would require that suspension or dismissal come only after notice and
hearing. Substantive due process would require that suspension or dismissal be 'for cause'." Bernas
The Constitution of the Republic of the Philippines: A Commentary, Vol. II, First Edition, 1988, p. 334)
The guarantee of removal FOR CAUSE is enshrined in Article IX-B, Section 2(3) of the 1987
Constitution, which states that 'No officer or employee of the civil service shall be removed or
suspended except FOR CAUSE provided by law."
There can be no question then as to the meaning of the phrase FOR CAUSE. It simply means the
observance of both procedural and substantive due process in cases of removal of officers or
employees of the civil service. When SECTION 16 speaks, therefore, of separation from the service

NOT FOR CAUSE, it can only mean the diametrical opposite. The constitutional intent to exempt the
separation of civil service employees pursuant to Proclamation No. 3 from the operation of Article IXB, Section 2(3), becomes readily apparent. A distinction is explicitly made between removal FOR
CAUSE, which as aforestated, requires due process, and dismissal NOT FOR CAUSE, which
implies that the latter is not bound by the "fetters' of due process.
It is obviously for that reason that Section 16 grants separation pay and retirement benefits to those
separated NOT FOR CAUSE but as a result of the reorganization precisely to soften the impact of
the non-observance of due process. "What is envisioned in Section 16 is not a remedy for arbitrary
removal of civil servants enjoying security of tenure but some form of relief for members of the
career civil service who may have been or may be legally but involuntarily 'reorganized out' of the
service or may have voluntarily resigned pursuant to the reorganization policy" (ibid., p. 615).
Reorganization Pursuant to Proclamation No. 3 to Continue Transitorily Even After Ratification
By its very context, SECTION 16 envisages the continuance of the reorganization pursuant to
Proclamation No. 3 even after ratification of the Constitution and during the transition period. The
two [2] stages contemplated, namely, (1) the stage before and (2) after ratification, refer to the same
nature of separation "NOT FOR CAUSE but as a result of Proclamation No. 3." No valid reason has
been advanced for a different treatment after ratification as the majority opines i.e., that separation
NOT FOR CAUSE is allowed before ratification but that, thereafter, separation can only be FOR
CAUSE.
A fundamental principle of Constitutional construction is to assure the realization of the purpose of
the framers of the organic law and of the people who adopted it.
That the reorganization commenced pursuant to Proclamation No. 3 was envisioned to continue
even after the ratification of the 1987 Constitution, at least transitorily, is evident from the intent of its
authors discoverable from their deliberations held on 3 October 1986 and evincing their awareness
that such reorganization had not as yet been fully implemented. Thus:
Mr. PADILLA. Mr. Presiding Officer, on lines 2 to 5 is the clause 'pursuant to the provisions of
Article III of Proclamation No. 3, issued on March 25, 1986, and the reorganization.' Are
those words necessary? Can we not just say 'result of the reorganization following the
ratification of this Constitution'? In other words, must we make specific reference to
Proclamation No. 3?
Mr. SUAREZ. Yes. I think the committee feels that is necessary, because in truth there has
been a reorganization by virtue of Proclamation No. 3. In other words, there are two stages
of reorganization covered by this section.
Mr. PADILIA. I understand there is a reorganization committee headed by a minister?
Mr. SUAREZ. Philippine Commission on Government Reorganization.
Mr. PADILLA. But whether that has already been implemented or not, I do not believe in it.
There has been a plan, but I do not think it has been implemented. If we want to include any
previous reorganization after or before the ratification, why do we not just say reorganization
before or after the ratification' to simplify the provision and eliminate two-and-a-half
sentences that may not be necessary? And as a result of the reorganization, if the committee

feels there has been reorganization before ratification and there be reorganization after, we
just say 'before or after the ratification of this Constitution.
Mr. SUAREZ. Something like this as a result of the reorganization effected before or after the
ratification of the Constitution on the understanding, with the statement into the records, that
this would be applicable to those reorganized out pursuant to the Freedom Constitution also.
Mr. PADILLA. That is understood if there has been a reorganization before the ratification or
a reorganization after the ratification." (RECORDS of the Constitutional Commission, Vol. 5,
p. 416) (Emphasis provided)
It should also be recalled that the deadline for the reorganization under Proclamation No. 3 was "one
year from February 25, 1986" (Article III, Section 2), or up to February 24, 1987. Executive Order No.
17 itself provided that the review/assessment of personnel be completed "not later than February 24,
1987." But, confronted with the reality of the ratification of the Constitution before that deadline
without reorganization having been completed, there was need for a provision allowing for its
continuance even after ratification and until completed. It was also to beat that deadline that EO 127
and similar issuances, providing for the reorganization of departments of government, were all dated
30 January 1987 or prior to the plebiscite held on 2 February 1987. The intent to continue and
complete the reorganizations started is self- evident in SECTION 16.
In Jose vs. Arroyo, et al. (G.R. No. 78435, August 11, 1987), which was a Petition for certiorari and
Prohibition to enjoin the implementation of Executive Order No. 127, we recognized that the
reorganization pursuant to Proclamation No. 3 as mandated by SECTION 16, was to continue even
after ratification when we stated:
The contention of petitioner that EO No. 127 is violative of the provision of the 1987
Constitution guaranteeing career civil service employees security of tenure overlooks the
provision of Section 16, Art. XVIII (Transitory Provisions) which explicitly authorizes 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 the Constitution. By virtue of said provision, the reorganization of the Bureau of
Customs under Executive Order No. 127 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. (Emphasis ours)
With due respect to the majority, we disagree with its conclusion that the foregoing pronouncement is
mere "obiter dictum."
An obiter dictum or dictum has been defined as a remark or opinion uttered, by the way. It is
a statement of the court concerning a question which was not directly before it (In re Hess 23
A. 2d. 298, 301, 20 N.J. Misc. 12). It is language unnecessary to a decision, (a) ruling on an
issue not raised, or (an) opinion of a judge which does not embody the resolution or
determination of the court, and is made without argument or full consideration of the point
(Lawson v. US, 176 F2d 49, 51, 85 U.S. App. D.C. 167). It is an expression of opinion by the
court or judge on a collateral question not directly involved, (Crescent Ring Co. v. Travelers
Indemnity Co. 132 A. 106, 107, 102 N.J. Law 85) or not necessary for the decision Du Bell v.
Union Central Life Ins. Co., 29, So. 2d 709, 712; 211 La. 167).
lwph1.t

In the case at bar, however, directly involved and squarely before the Court was the issue of whether
EO 127 violates Section 2(3) of Article IX-B of the 1987 Constitution against removal of civil service
employees except for cause." Petitioner batted for the affirmative of the proposition, while

respondents contended that "removal of civil service employees without cause is allowed not only
under the Provisional Constitution but also under the 1987 Constitution if the same is made pursuant
to a reorganization after the ratification of the Constitution."
It may be that the Court dismissed that Petition for being premature, speculative and purely
anticipatory" inasmuch as petitioner therein had "not received any communication terminating or
threatening to terminate his services." But that was only one consideration. The Court still proceeded
to decide all the issues adversatively contested by the parties, namely "1) that the expiration date of
February 25, 1 987 fixed by Section 2 of Proclamation No. 3 on which said Executive order is based
had already lapsed; 2) that the Executive Order has not been published in the Official Gazette as
required by Article 2 of the Civil Code and Section 1 1 of the Revised Administrative Code; and 3)
that its enforcement violates Section 2(3) of Article IX B of the 1987 Constitution against removal of
civil service employees except for cause."
The ruling of the Court, therefore, on the Constitutional issues presented, particularly, the lapse of
the period mandated by Proclamation No. 3, and the validity of EO 127, cannot be said to be mere
"obiter." They were ultimate issues directly before the Court, expressly decided in the course of the
consideration of the case, so that any resolution thereon must be considered as authoritative
precedent, and not a mere dictum (See Valli v. US, 94 F2d 687 certiorari granted 58 S. Ct. 760, 303
U.S. 82 L. Ed. 1092; See also Weedin v. Tayokichi Yamada 4 F. (2d) 455). Such resolution would not
lose its value as a precedent just because the disposition of the case was also made on some other
ground.
.....And this rule applies as to all pertinent questions although only incidentally involved,
which are presented and decided in the regular course of the consideration of the case, and
lead up to the final conclusion (Northern Pac. Ry Co. v. Baker, D.C. Wash., 3 F. Suppl. 1;
See also Wisconsin Power and Light Co. v. City of Beloit 254 NW 119; Chase v. American
Cartage Co. 186 N.W. 598; City of Detroit, et al. v. Public Utilities Comm. 286 N.W. 368).
Accordingly, a point expressly decided does not lose its value as a precedent because the
disposition of the case is made on some other ground. (Wagner v. Com Products Refining
Co. D.C. N.J. 28 F 2d 617) Where a case presents two or more points, any one of which is
sufficient to determine the ultimate issue, but the court actually decides all such points, the
case is an authoritative precedent as to every point decided, and none of such points can be
regarded as having merely the status of a dictum (See U.S. Title Insurance and Trust Co.,
Cal., 44 S. Ct. 621, 265 U.S. 472, 68 L. Ed. 1110; Van Dyke v. Parker 83 F. (2d) 35) and one
point should not be denied authority merely because another point was more dwelt on and
more fully argued and considered. (Richmond Screw Anchor Co. v. U.S. 48 S. Ct. 194, 275
U.S. 331, 72 L. Ed. 303)"
It is true that in Palma-Fernandez vs. de la Paz (G.R. No. 78946, April 15, 1986, 160 SCRA 751), we
had stated:
The argument that, on the basis of this provision (Section 26 of Executive Order No. 119, or
the 'Reorganization Act of the Ministry of Health'), petitioner's term of office ended on 30
January 1987 and that she continued in the performance of her duties merely in a hold-over
capacity and could be transferred to another position without violating any of her legal rights,
is untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate
reorganization and would have lapsed on 25 February 1987 (under the Provisional
Constitution), but advanced to 2 February 1987 when the 1987 Constitution became effective
(De Leon, et al., vs. Hon. Esguerra, et al., G.R. No. 78059, 31 August 1987, 153 SCRA 602).
After the d date the provisions of the latter on security of tenure govern.

The factual situation in the two cases, however, radically differ. In the cited case, Dra. PalmaFernandez, the petitioner, had already been extended a permanent appointment as Assistant
Director for Professional Services of the East Avenue Medical Center but was still being transferred
by the Medical Center Chief to the Research Office against her consent. Separation from the service
as a result of reorganization was not involved. The question then arose as to whether the latter
official had the authority to transfer or whether the power to appoint and remove subordinate officers
and employees was lodged in the Secretary of Health. Related to that issue was the vital one of
whether or not her transfer, effected on 29 May 1987, was tantamount to a removal without cause.
Significant, too, is the fact that the transfer was basically made "in the interest of the service"
pursuant to Section 24(c) of PD No. 807, or the Civil Service Decree, and not because she was
being reorganized out by virtue of EO 119 or the "Reorganization Act of the Ministry of Health,"
although the said Act was invoked after the fact. And so it was that SECTION 16 was never
mentioned, much less invoked in the Palma-Fernandez case.
Finally, on this point, it is inaccurate for the majority to state that there were no reorganization orders
after ratification. There were, namely, EO 181 (Reorganization Act of the Civil Service Commission),
June 1, 1987; EO 193 (Reorganization Act of the Office of Energy Affairs), June 10, 1987; EO 230
(Reorganization Act of NEDA), July 22, 1987; EO 262 (Reorganization Act of the Department of
Local Government), July 25, 1987; EO 297 (Reorganization Act of the Office of the Press Secretary),
July 25, 1987.
The Element of Good Faith
The majority concedes that reorganization can be undertaken provided it be in good faith but
concludes that Commissioner Mison was not in good faith.
The aforesaid conclusion is contradicted by the records.
Executive Order No. 127, dated 30 January 1987, specifically authorized the reorganization of the
Bureau of Customs "structurally and functionally" and provided for the abolition of all units and
positions thereof not included in the structural organization S election 55).
As stated heretofore, it was the former Commissioner of Customs, Alexander A. Padilla who, on 24
May 1987, transmitted to the Department of Finance for approval the proposed "position structure
and staffing pattern" of the Bureau of Customs. This was approved by the Department of Finance.
Thereafter, it was transmitted to and approved by the Department of Budget and Management on 7
September 1987 for implementation. Under the old staffing pattern, there were 7,302 positions while
under the new staffing pattern, there are 6,530 positions.
On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of
Reorganization Executive Orders" provided:
By October 21, 1987, all employees covered by the Executive orders for each agency on
reorganization shall be:
a. informed of their reappointment, or
b. offered another position in the same department or agency, or
c. informed of their termination. (emphasis supplied)

On 25 November 1987 Commissioner Mison asked for and was granted by the President an
extension up to February 1988 within which to completely undertake the reorganization of the
Bureau of Customs.
On 6 January 1988, he issued Bureau of Customs Memorandum "Re Guidelines on the
Implementation of Reorganization Executive Orders" reiterating the above- quoted portion of the
Malacanang Memorandum of 2 October 1987. Pursuant thereto, on 28 January 1988, Commissioner
Mison addressed uniform letters of termination to the employees listed on pages 15, 16 and 17 of
the majority opinion, effective on 28 February 1988, within the extended period granted.
The records further show that upon Commissioner Mison's official inquiry, Secretary of Justice
Sedfrey A. Ordo;ez, rendered the following Opinion:
. . . It is believed that customs employees who are reorganized out in the course of the
implementation of E.O. No. 127 (reorganizing the Department of Finance) need not be
informed of the nature and cause of their separation from the service. It is enough that they
be 'informed of their termination' pursuant to section 1(c) of the Memorandum dated October
2, 1987 of President Aquino, which reads:
1. By October 21, 1987, all employees covered by the Executive orders for each
agency on reorganization shall be:
xxx

xxx

xxx

c) Informed of their terminations.

The constitutional mandate that 'no officer or employee of the civil service shall be renewed
or suspended except for cause as provided by law' (Sec. 2(4) (sic), Article IX-B of the 1987
Constitution) does not apply to employees who are separated from office as a result of the
reorganization of that Bureau as directed in Executive Order No. 127.
xxx

xxx

xxx

Regarding your (third) query, the issue as to the constitutionality of Executive Order No. 127
is set at rest, after the Supreme Court resolved to dismiss the petition
for certiorari questioning its enforceability, for lack of merit (see Jose vs. Arroyo, et
al., supra). (Opinion No. 41, s. 1988, March 3, 1988) (Emphasis supplied)
The former Chairman of the Civil Service Commission, Celerina G. Gotladera likewise periodically
consulted by Commissioner Mison, also expressed the opinion that "it is not a prerequisite prior to
the separation of an employee pursuant to reorganization that he be administratively charged."
(Annex 16, p. 411, Rollo, G.R. No. 85310)
Moreover, the records show that the final selection and placement of personnel was done by a
Placement Committee, one of whose members is the Head of the Civil Service Commission Field
Office, namely, Mrs. Purificacion Cuerdo The appointment of employees made by Commissioner
Mison was based on the list approved by said Placement Committee.
But the majority further faults Mison for defying the President's directive to halt further layoffs as a
consequence of reorganization, citing OP Memo of 14 October 1987, reading:

Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that
there will be no further layoffs this year of personnel as a result of the government
reorganization. (p. 45, Decision)
The foregoing, however, must be deemed superseded by later developments, namely, the grant to
Commissioner Mison by the President on 22 December 1987 of a grace period until the end of
February 1988 within which to completely undertake the reorganization of the Bureau of Customs,
which was, in fact, accomplished by 28 February 1988.
To further show lack of good faith, the majority states that Commissioner Mison failed to observe the
procedure laid down by EO 17, supra, directing inter alia that a notice of separation be issued to an
employee to be terminated indicating therein the reason/s or ground/s for such separation. That
requirement, however, does not appear in Section 59 of EO 127, which provides on the contrary
"that those incumbents whose positions are not included in the new position structure and staffing
pattern of the Ministry or who are not reappointed shall be deemed separated from the service." The
right granted by EO 17 to an employee to be informed of the ground for his separation must be
deemed to have been revoked by the repealing clause of EO 127 (Section 67) providing that "all
laws, ordinances or parts thereof, which are inconsistent with this Executive Order, are hereby
repealed and modified accordingly."
Moreover, Section 11 of EO 17 explicitly excepts from its coverage a reorganization pursuant to EO
5. Thus
The Executive Order shall not apply to elective officials or those designated to replace them,
presidential appointees, casual and contractual employees, or officials and employees
removed pursuant to desciplinary proceedings under the Civil Service law and rules, and to
those laid off as a result of reorganization undertaken pursuant to Executive Order No.
5. (Emphasis ours)
That EO 127 was issued pursuant to or in implementation of EO 5, is shown by its introductory
portion reading:
Recalling that the reorganization of the government is mandated expressly by Article II,
Section 1 (a) and Article III of the Freedom Constitution;
Having in mind that pursuant to Executive order No. 5 (1986), it is directed that the
necessary and proper changes in the organizational and functional structures of the
government, its agencies and instrumentalities, be effected in order to promote efficiency
and effectiveness in the delivery of public service; (Italics supplied)
Constitutionality of Republic Act No. 6656
The majority also relies on Republic Act No. 6656 entitled an "Act to Protect the Security of Tenure of
Civil Service Officers and Employees in the Implementation of Government Reorganization,"
particularly Section 2 thereof, to test the good faith of Commissioner Mison.
We are of the view, however, that in providing for retroactivity in its Section 13, RA 6656 clashes
frontally with SECTION 16.
1) SECTION 16 clearly recognizes that career service employees separated from the service by
reason of the "complete reorganization of the government" pursuant to Proclamation No. 3 may be

separated NOT FOR CAUSE. And yet, RA 6656 requires the exact opposite separation FOR
CAUSE. It would not be remiss to quote the provision again:
SEC. 2. No officer or employee in the career service shall be removed except for a valid
cause and after due notice and hearing. A valid cause for removal exist 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 exigencies of the service,
or other lawful causes allowed by the Civil Service law. The existence 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 party: (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 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.
(Republic Act No. 6156)
The standards laid down are the "traditional" criteria for removal of employees from the career
service, e.g. valid cause, due notice and hearing, abolition of, or redundancy of offices. Proclamation
No. 3, on the other hand, effectuates the "progressive" type of reorganization dictated by the
exigencies of the historical and political upheaval at the time. The "traditional" type is limited in
scope. It is concerned with the individual approach where the particular employee involved is
charged administratively and where the requisites of notice and hearing have to be observed. The
"progressive" kind of reorganization, on the other hand, is the collective way. It is wider in scope, and
is the reorganization contemplated under SECTION 16.
2) By providing for reinstatement in its Section 9, RA 6656 adds a benefit not included in SECTION
16. The benefits granted by the latter provision to employees separated NOT FOR CAUSE but as a
consequence of reorganization are "separation pay, retirement, and other benefits accruing to them
under the laws of general application in force at the time of their separation." The benefit of
reinstatement is not included. RA 6656, however, allows reinstatement. That it cannot do because
under SECTION 16, it is not one of the laws "in force at the time of their separation."
The Constitution is the paramount law to which all laws must conform. It is from the Constitution that
all statutes must derive their bearings. The legislative authority of the State must yield to the
expression of the sovereign will. No statutory enactment can disregard the Charter from which it
draws its own existence (Phil. Long Distance Telephone Co. v. Collector of Internal Revenue, 90
Phil. 674 [1952]). But, that is exactly what RA 6656 does in providing for retroactivity it disregards
and contravenes a Constitutional imperative. To save it, it should be applied and construed
prospectively and not retroactively notwithstanding its explicit provision. Then, and only then, would
it make good law.
Effects of Reorganization
To be sure, the reorganization could effect the tenure of members of the career service as defined in
Section 5, Article IV of Presidential Decree No. 807, and may even result in the separation from the
office of some meritorious employees. But even then, the greater good of the greatest number and
the right of the citizenry to a good government, and as they themselves have mandated through the
vehicle of Proclamation No. 3, provide the justification for the said injury to the individual. In terms of

values, the interest of an employee to security of tenure must yield to the interest of the entire
populace and to an efficient and honest government.
But a reorganized employee is not without rights. His right lies in his past services, the entitlement to
which must be provided for by law. EO 127 provides for the same in its Section 59, and so does
SECTION 16 when the latter specified that career civil service employees separated from the
service not for cause:
shall 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 lieu
thereof, at the option of the employees, they may be considered for employment in the
Government or in any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries. This provision also
applies to career officers whose resignation, tendered in line with the existing policy, has
been accepted.
This is a reward for the employee's past service to the Government. But this is all There is no vested
property right to be reemployed in a reorganized office.
The right to an office or to employment with government or any of its agencies is not a
vested property right, and removal therefrom will not support the question of due process"
Yantsin v. Aberdeen, 54 Wash 2d 787, 345 P 2d 178). A civil service employee does not have
a constitutionally protected right to his position, which position is in the nature of a public
office, political in character and held by way of grant or privilege extended by government;
generally he has been held to have no property right or vested interest to which due process
guaranties extend (See Taylor v. Beckham 178 U.S. 548, 44 L Ed. 1187; Angilly v. US CA2
NY 199 F 2d 642; People ex. rel. Baker v. Wilson, 39 III App 2d 443, 189 NE 2d 1; Kelliheller
v. NY State Civil Service Com 21 Misc 2d 1034, 194 NYS 2d 89).
To ensure, however, that no meritorious employee has been separated from the service, there would
be no harm, in fact, it could do a lot of good, if the Commissioner of Customs reviews the evaluation
and placements he has so far made and sees to it that those terminated are included in a
consolidated list to be given preference by departments who are recruiting (Section 2[a], BOC
Memorandum, January 6,1988).
lwph1.t

Conclusion
Premises considered, and subject to the observation hereinabove made, it is our considered view
that the separation from the service "NOT FOR CAUSE but as a result of the reorganization
pursuant to Proclamation No. 3 dated March 25, 1986" of the affected officers and employees of the
Bureau of Customs should be UPHELD, and the Resolutions of the Civil Service Commission, dated
30 June 1988, 20 September 1988, and 16 November 1988 should be SET ASIDE for having been
issued in grave abuse of discretion.
Republic Act No. 6656, in so far as it provides for retroactivity, should be declared
UNCONSTITUTIONAL for being repugnant to the letter and spirit of Section 16, Article XVIII of the
1987 Constitution.

Fernan, C.J., Narvasa, Feliciano, Regalado, JJ., concur.

Separate Opinions
CRUZ, J., concurring:
I concur with the majority view so ably presented by Mr. Justice Abraham F. Sarmiento. While
additional comments may seem superfluous in view of the exhaustiveness of his ponencia, I
nevertheless offer the following brief observations for whatever they may be worth.
Emphasizing Article XVII, Section 16 of the Constitution, the dissenting opinion considers the
ongoing government reorganization valid because it is merely a continuation of the reorganization
begun during the transition period. The reason for this conclusion is the phrase "and the
reorganization following the ratification of the Constitution," that is to say, after February 2, 1987,
appearing in the said provision. The consequence (and I hope I have not misread it) is that the
present reorganization may still be undertaken with the same "absoluteness" that was allowed the
revolutionary reorganization although the Freedom Constitution is no longer in force.
Reorganization of the government may be required by the legislature even independently of specific
constitutional authorization, as in the case, for example, of R.A. No. 51 and B.P. No. 129. Being
revolutionary in nature, the reorganization decreed by Article III of the Freedom Constitution was
unlimited as to its method except only as it was later restricted by President Aquino herself through
various issuances, particularly E.O. No. 17. But this reorganization, for all its permitted
summariness, was not indefinite. Under Section 3 of the said Article III, it was allowed only up to
February 29,1987 (which we advanced to February 2, 1987, when the new Constitution became
effective).
The clear implication is that any government reorganization that may be undertaken thereafter must
be authorized by the legislature only and may not be allowed the special liberties and protection
enjoyed by the revolutionary reorganization. Otherwise, there would have been no necessity at all for
the time limitation expressly prescribed by the Freedom Constitution.
I cannot accept the view that Section 16 is an authorization for the open-ended reorganization of the
government "following the ratification of the Constitution." I read the provision as merely conferring
benefits deservedly or not on persons separated from the government as a result of the
reorganization of the government, whether undertaken during the transition period or as a result of a
law passed thereafter. What the grants is privileges to the retirees, not power to the provision
government. It is axiomatic that grants of power are not lightly inferred, especially if these impinge on
individual rights, and I do not see why we should depart from this rule.
To hold that the present reorganization is a continuation of the one begun during the transition period
is to recognize the theory of the public respondent that all officers and employees not separated
earlier remain in a hold-over capacity only and so may be replaced at any time even without cause.
That is a dangerous proposition that threatens the security and stability of every civil servant in the
executive department. What is worse is that this situation may continue indefinitely as the claimed
"progressive" reorganization has no limitation as to time.
Removal imports the forcible separation of the incumbent before the expiration of his term and can
be done only for cause as provided by law. Contrary to common belief, a reorganization does not
result in removal but in a different mode of terminating official relations known as abolition of the
office (and the security of tenure attached thereto.) The erstwhile holder of the abolished office
cannot claim he has been removed without cause in violation of his constitutional security of tenure.

The reason is that the right itself has disappeared with the abolished office as an accessory following
the principal. (Ocampo v. Sec. of Justice, 51 O.G. 147; De la Llana v. Alba, 112 SCRA 294;
Manalang v. Quitoriano, 94 Phil. 903.)
This notwithstanding, the power to reorganize is not unlimited. It is essential that it be based on a
valid purpose, such as the promotion of efficiency and economy in the government through a
pruning of offices or the streamlining of their functions. (Cervantes v. Auditor-General, 91 Phil. 359.)
Normally, a reorganization cannot be validly undertaken as a means of purging the undesirables for
this would be a removal in disguise undertaken enmasse to circumvent the constitutional
requirement of legal cause. (Eradication of graft and corruption was one of the expressed purposes
of the revolutionary organization, but this was authorized by the Freedom Constitution itself.) In
short, a reorganization, to be valid, must be done in good faith. (Urgelio v. Osmena, 9 SCRA 317;
Cuneta v. Court of Appeals, 1 SCRA 663; Carino v. ACCFA, 18 SCRA 183.)
A mere recitation no matter how lengthy of the directives, guidelines, memoranda, etc. issued
by the government and the action purportedly taken thereunder does not by itself prove good faith.
We know only too well that these instructions, for all their noble and sterile purposes, are rarely
followed in their actual implementation. The reality in this case, as the majority opinion has pointed
out and as clearly established in the hearing we held, is that the supposed reorganization was
undertaken with an eye not to achieving the avowed objectives but to accommodating new
appointees at the expense of the dislodged petitioners. That was also the finding of the Civil Service
Commission, to which we must accord a becoming respect as the constitutional office charged with
the protection of the civil service from the evils of the spoils system.
The present administration deserves full support in its desire to improve the civil service, but this
objective must be pursued in a manner consistent with the Constitution. This praiseworthy purpose
cannot be accomplished by an indiscriminate reorganization that will sweep in its wake the innocent
along with the redundant and inept, for the benefit of the current favorites.

MELENCIO-HERRERA, J., dissenting:

The historical underpinnings of Government efforts at reorganization hark back to the people power
phenomenon of 22-24 February 1986, and Proclamation No. 1 of President Corazon C. Aquino,
issued on 25 February 1986, stating in no uncertain terms that "the people expect a reorganization
of government." In its wake followed Executive Order No. 5, issued on 12 March 1986, "Creating a
Presidential Commission on Government Reorganization," with the following relevant provisions:
WHEREAS, there is need to effect the necessary and proper changes in the organizational
and functional structures of the national and local governments, its agencies and
instrumentalities, including government-owned and controlled corporations and their
subsidiaries, in order to promote economy, efficiency and effectiveness in the delivery of
public services
xxx

xxx

xxx

Section 2. The functional jurisdiction of the PCGR shall encompass, as necessary,

the reorganization of the national and local governments, its agencies and instrumentalities
including government-owned or controlled corporations and their subsidiaries.
xxx

xxx

xxx (Emphasis supplied)

Succeeding it was Proclamation No. 3, dated 25 March 1986, also known as the Freedom
Constitution, declaring, in part, in its Preamble as follows:
WHEREAS, the direct mandate of the people as manifested by their extraordinary action
demands the complete reorganization of the government, ... (Emphasis supplied)
and pertinently providing:
ARTICLE II
Section I
xxx

xxx

xxx

The President shall give priority to measures to achieve the mandate of the people to:
(a) Completely reorganize the government and eradicate unjust and oppressive
structures, and all iniquitous vestiges of the previous regime;" (Emphasis supplied)
xxx

xxx

xxx

ARTICLE III GOVERNMENT REORGANIZATION

Section 2. All elective and appointive officials and employees under the 1973
Constitution shall continue in office until otherwise provided by proclamation or executive
order or upon the designation or appointment and qualification of their successors, if such is
made within a period of one year from February 25, 1986.
Section 3. Any public office or employee separated from the service as a result of the
reorganization effected under this Proclamation shall, if entitled under the laws then in force,
receive the retirement and other benefits accruing thereunder. (Emphasis ours)
On 28 May 1986, Executive Order No. 17 was issued "Prescribing Rules and Regulations for the
Implementation of Section 2, Article III of the Freedom Constitution' providing, inter alia, as follows:
Section 1. In the course of implementing Article III, Section 2 of the Freedom Constitution,
the Head of each Ministry shall see to it that the separation or replacement of officers and
employees is made only for justifiable reasons, to prevent indiscriminate dismissal, of
personnel in the career civil service whose qualifications and performance meet the
standards of public service of the New Government.
xxx

xxx

xxx

The Ministry concerned shall adopt its own rules and procedures for the review and
assessment of its own personnel, including the identification of sensitive positions which
require more rigid assessment of the incumbents, and shall complete such
review/assessment as expeditiously as possible but not later than February 24, 1987 to
prevent undue demoralization in the public service.
Section 2. The Ministry Head concerned, on the basis of such review and assessment shall
determine who shall be separated from the service. Thereafter, he shall issue to the official

or employee concerned a notice of separation which shall indicate therein the reason/s or
ground /s for such separation and the fact that the separated official or employee has the
right to file a petition for reconsideration pursuant to this Order. Separation from the service
shall be effective upon receipt of such notice, either personally by the official or employee
concerned or on his behalf by a person of sufficient discretion.
Section 3. The following shall be the grounds for separation/ replacement of personnel:
1. Existence of a case for summary dismissal pursuant to Section 40 of the
Civil Service Law;
2. Existence of a probable cause for violation of the Anti-Graft and Corrupt
Practice Act as determined by the Ministry Head concerned;
3. Gross incompetence or inefficiency in the discharge of functions;
4. Misuse of Public office for partisan political purposes;
5. Any other analogous ground showing that the incumbent is unfit to remain
in the service or his separation/replacement is in the interest of the service.
Section 11. This Executive Order shall not apply to elective officials or those designated to
replace them, presidential appointees, casual and contractual employees, or officials and
employees removed pursuant to disciplinary proceedings under the Civil Service Law and
rules, and to those laid off as a result of the reorganization undertaken pursuant to Executive
Order No. 5. (Emphasis supplied)
On 6 August 1986, Executive Order No. 39 was issued by the President "Enlarging the Powers and
Functions of the Commissioner of Customs", as follows:
xxx

xxx

xxx

SECTION 1. In addition to the powers and functions of the Commissioner of Customs, he is

hereby authorized, subject to the Civil Service Law and its implementing rules and
regulations:
a) To appoint all Bureau personnel, except those appointed by the President;
b) To discipline, suspend, dismiss or otherwise penalize erring Bureau
officers and employees;
c) To act on all matters pertaining to promotion, transfer, detail, reassignment,
reinstatement, reemployment and other personnel action, involving officers
and employees of the Bureau of Customs.
xxx

xxx

xxx

On 30 January 1987, Executive Order No. 127 was issued "Reorganizing the Ministry of Finance."
Similar Orders, approximately thirteen (13) in all, 1 were issued in respect of the other executive
departments. The relevant provisions relative to the Bureau of Customs read:

RECALLING that the reorganization of the government is mandated expressly in Article II,
Section l(a) and Article III of the Freedom Constitution;
HAVING IN MIND that pursuant to Executive Order No. 5 (1986), it is directed that the
necessary and proper changes in the organizational and functional structures of the
government, its agencies and instrumentalities, be effected in order to promote efficiency
and effectiveness in the delivery of public services;
BELIEVING that it is necessary to reorganize the Ministry of Finance to make it more
capable and responsive, organizationally and functionally, in its primary mandate of
judiciously generating and efficiently managing the financial resources of the Government, its
subdivisions and instrumentalities in order to attain the socio-economic objectives of the
national development programs.
xxx

xxx

xxx

SEC. 2. Reorganization. The Ministry of Finance, hereinafter referred to as Ministry,

is hereby reorganized, structurally and functionally, in accordance with the provisions of this
Executive Order.
SEC. 33. Bureau of Customs.
... Executive Order No. 39 dated 6 August 1986 which grants autonomy to the Commissioner
of Customs in matters of appointment and discipline of Customs personnel shall remain in
effect.
SEC. 55. Abolition of Units Integral to Ministry. All units not included in the structural
organization as herein provided and all positions thereof are hereby deemed abolished. ...
Their personnel shall be entitled to the benefits provided in the second paragraph of Section
59 hereof.
SEC. 59. New Structure and Pattern. Upon approval of this Executive Order, the officers
and employees of the Ministry shall, in a holdover capacity, continue to perform their
respective duties and responsibilities and receive the corresponding salaries and
benefits unless in the meantime they are separated from government service pursuant to
executive Order No. 17 (1986) or article III of the Freedom Constitution.
The new position structure and staffing pattern of the ministry shall be approved and
prescribed by the Minister within one hundred twenty (120) days from the approval of this
Executive Order and the authorized positions created hereunder shall be filled with regular
appointments by him or by the President, as the case may be. Those incumbents whose
positions are not included therein or who are not reappointed shall be deemed separated
from the service. Those separated from the service shall receive the retirement benefits to
which they may be entitled under the existing laws, rules and regulations. Otherwise, they
shall be paid the equivalent of one month basic salary for every year of service or the
equivalent nearest fraction thereof favorable to them on the basis of highest salary received,
but in no case shall such payment exceed the equivalent of 12 months salary.
No court or administrative body shall issue any writ or preliminary junction or restraining
order to enjoin the separation/replacement of any officer or employee affected under this
Executive Order.

Section 67 All laws, ordinances, rules, regulations and other issuances or parts thereof,
which are inconsistent with this Executive Order, are hereby repealed or modified
accordingly.
xxx

xxx

xxx (Emphasis ours)

On 2 February 1987, the present Constitution took effect (De Leon, et al., vs. Esguerra, G.R. No.
78059, August 31, 1987153 SCRA 602). Reorganization in the Government service pursuant to
Proclamation No. 3, supra, was provided for in its Section 16, Article XVIII entitled Transitory
Provisions, reading:
Section 16. Career civil service employees separated from the service 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 shall 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 lieu thereof, at the option of the
employees, they may be considered for employment in the Government or in any of its
subdivisions, instrumentalities, or agencies, including government owned or controlled
corporations and their subsidiaries. Ms provision also applies to career officers whose
resignation, tendered in line with the existing policy, has been accepted.
On 24 May 1987 the then Commissioner of Customs, Alexander A. Padilla, transmitted to the
Department of Finance for approval the proposed "position structure and staffing pattern" of the
Bureau of Customs. Said Department gave its imprimatur. Thereafter, the staffing pattern was
transmitted to and approved by the Department of Budget and Management on 7 September 1987
for implementation. Under the old staffing pattern, there were 7,302 positions while under the new
staffing pattern, there are 6,530 positions CSC Resolution in CSC Case No. 1, dated 20 September
1988, pp. 3-4).
On 22 September 1987, Salvador M. Mison assumed office as Commissioner of Customs.
On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of
Reorganization Executive Orders" was issued reading, insofar as revelant to these cases, as follows:
It is my concern that ongoing process of government reorganization be conducted in a
manner that is expeditious, as well as sensitive to the dislocating consequences arising from
specific personnel decisions.
The entire process of reorganization, and in particular the process of separation from
service, must be carried out in the most humane manner possible.
For this purpose, the following guidelines shall be strictly followed:
1. By October 21, 1987, all employees covered by the Executive Orders for
each agency on reorganization shall be:
a. informed of their reappointment or
b. offered another position in the same department/ agency or
c. informed of their termination.

2. In the event of an offer for a lower position, there will be no reduction in the
salary.
xxx

xxx

xxx

4. Each department/agency shall constitute a Reorganization Appeals Board

at the central office, on or before October 21, 1987, to review or reconsider
appeals or complaints relative to reorganization. All cases submitted to the
Boards shall be resolved subject to the following guidelines:
a. publication or posting of the appeal procedure promulgated by the
Department Secretary;
b. adherence to due process;
c. disposition within 30 days from submission of the case;
d written notification of the action taken and the grounds thereof.
Action by the Appeals Review Board does not preclude appeal to the Civil Service
Commission.
5. Placement in the new staffing pattern of incumbent personnel shall be
completed prior to the hiring of new personnel, if any.
xxx

xxx

xxx (Emphasis ours)

On 25 November 1987 Commissioner Mison wrote the President requesting a grace period until the
end of February 1988 within which to completely undertake the reorganization of the Bureau of
Customs pursuant to Executive Order No. 127 dated 30 January 1987. Said request was granted in
a letter-reply by Executive Secretary Catalino Macaraig, Jr., dated 22 December 1987.
On 6 January 1988, within the extended period requested, Bureau of Customs Memorandum "Re:
Guidelines on the Implementation of Reorganization Executive Orders" was issued in the same tenor
as the Malacanang Memorandum of 2 October 1987, providing inter alia:
To effectively implement the reorganization at the Bureau of Customs, particularly in the
selection and placement of personnel, and insure that the best qualified and most competent
personnel in the career service are retained, the following guidelines are hereby prescribed
for the guidance of all concerned
1. By February 28, 1988 all employees covered by Executive Order No. 127 and the
grace period extended to the Bureau of Customs by the President of the Philippines
on reorganization shall be:
a. informed of their reappointment, or
b. offered another position in the same department or agency or
c. informed of their termination.

2. In the event of termination, the employee shall:

a. be included in a consolidated list compiled by the Civil Service
Commission. All departments who are recruiting shall give preference to the
employees in the list; and
b. continue to receive salary and benefits until February 28, 1988, and
c. be guaranteed the release of separation benefits within 45 days from
termination and in no case later than June 15, 1988.
xxx

xxx

xxx (Emphasis supplied)

It is to be noted that paragraph 1 above and its sub-sections reproduced verbatim the Malacanang
Guidelines of 2 October 1987 in that the employees concerned were merely to be informed of their
termination.
On 28 January 1988 Commissioner Mison addressed identical letters of termination to Bureau of
Customs officers and employees effective on 28 February 1988.
As of 18 August 1988, Commissioner Mison appointed five hundred twenty-two (522) officials and
employees of the Bureau of Customs (CSC Resolution in CSC Case No. 1, dated 20 September
1988, p. 6). In fact, in a letter dated 27 January 1988, Commissioner Mison recommended Jose M.
Balde for appointment to President Aquino as one of three (3) Deputy Commissioners under
Executive Order No. 127.
In the interim, during the pendency of these Petitions, Republic Act No. 6656, entitled "An Act to
Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of
Government Reorganization" was passed by Congress on 9 June 1988. The President signed it into
law on 10 June 1988 and the statute took effect on 29 June 1988.
On 20 June 1988 Motions were filed, in these cases pending before this Court, invoking the
provisions of Republic Act No. 6656. The relevant provisions thereof read:
SECTION 1. It is hereby declared the policy of the State to protect the security of tenure of
civil service officers and employees in the reorganization of the various agencies of the
National government ....
SECTION 2. No officer or employee in the career service shall be removed except for a valid
cause and after due notice and hearing. A valid cause for removal exists 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 exigencies of the service,
or other lawful causes allowed by the Civil Service Law. The existence 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 party:
(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 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.
xxx

xxx

xxx

SECTION 9. All officers and employees who are found by the Civil Service Commission to
have been separated in violation of the provisions of this Act, 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. Unless 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 existing laws within ninety (90) 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 be: Provided, 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 (1) month
salary for every year of service. Such separation pay and retirement benefits shall have
priority of payment out of the savings of the department or agency concerned.
xxx

xxx

xxx

SECTION 11. The executive branch of the government shall implement reorganization
schemes within a specified period of time authorized by law.
In the case of the 1987 reorganization of the executive branch, all departments and agencies
which are authorized by executive orders promulgated by the President to reorganize shall
have ninety (90) days from the approval of this Act within which to implement their respective
reorganization plans in accordance with the provisions of this Act.
xxx

xxx

xxx

SECTION 13. All laws, rules and regulations or parts thereof, inconsistent with the provisions
of this Act are hereby repealed or modified accordingly. The rights and benefits under this Act
shall be retroactive as of June 30, 1987.
xxx xxx xxx (Emphasis ours)
Given the foregoing statutory backdrop, the issues can now be addressed.
Scope of Section 16, Art. XVIII, 1987 Constitution

Crucial to the present controversy is the construction to be given to the abovementioned

Constitutional provision (SECTION 16, for brevity), which speaks of.
Career civil service employees separated from the service 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 ... (paragraphing
supplied).
To our minds, SECTION 16 clearly recognizes (1) the reorganization authorized by
Proclamation No. 3; (2) that such separation is NOT FOR CAUSE but as a result of the
reorganization pursuant to said Proclamation; and (3) that the reorganization pursuant to
Proclamation No. 3 may be continued even after the ratification of the 1987 Constitution
during the transition period.
Separation NOT FOR CAUSE
The canon for the removal or suspension of a civil service officer or employee is that it must be FOR
CAUSE. That means a guarantee of both procedural and substantive due process. Basically,
procedural due process would require that suspension or dismissal come only after notice and
hearing. Substantive due process would require that suspension or dismissal be 'for cause'." Bernas
The Constitution of the Republic of the Philippines: A Commentary, Vol. II, First Edition, 1988, p. 334)
The guarantee of removal FOR CAUSE is enshrined in Article IX-B, Section 2(3) of the 1987
Constitution, which states that 'No officer or employee of the civil service shall be removed or
suspended except FOR CAUSE provided by law."
There can be no question then as to the meaning of the phrase FOR CAUSE. It simply means the
observance of both procedural and substantive due process in cases of removal of officers or
employees of the civil service. When SECTION 16 speaks, therefore, of separation from the service
NOT FOR CAUSE, it can only mean the diametrical opposite. The constitutional intent to exempt the
separation of civil service employees pursuant to Proclamation No. 3 from the operation of Article IXB, Section 2(3), becomes readily apparent. A distinction is explicitly made between removal FOR
CAUSE, which as aforestated, requires due process, and dismissal NOT FOR CAUSE, which
implies that the latter is not bound by the "fetters' of due process.
It is obviously for that reason that Section 16 grants separation pay and retirement benefits to those
separated NOT FOR CAUSE but as a result of the reorganization precisely to soften the impact of
the non-observance of due process. "What is envisioned in Section 16 is not a remedy for arbitrary
removal of civil servants enjoying security of tenure but some form of relief for members of the
career civil service who may have been or may be legally but involuntarily 'reorganized out' of the
service or may have voluntarily resigned pursuant to the reorganization policy" (ibid., p. 615).
Reorganization Pursuant to Proclamation No. 3 to Continue Transitorily Even After Ratification
By its very context, SECTION 16 envisages the continuance of the reorganization pursuant to
Proclamation No. 3 even after ratification of the Constitution and during the transition period. The
two [2] stages contemplated, namely, (1) the stage before and (2) after ratification, refer to the same
nature of separation "NOT FOR CAUSE but as a result of Proclamation No. 3." No valid reason has
been advanced for a different treatment after ratification as the majority opines i.e., that separation

NOT FOR CAUSE is allowed before ratification but that, thereafter, separation can only be FOR
CAUSE.
A fundamental principle of Constitutional construction is to assure the realization of the purpose of
the framers of the organic law and of the people who adopted it.
That the reorganization commenced pursuant to Proclamation No. 3 was envisioned to continue
even after the ratification of the 1987 Constitution, at least transitorily, is evident from the intent of its
authors discoverable from their deliberations held on 3 October 1986 and evincing their awareness
that such reorganization had not as yet been fully implemented. Thus:
Mr. PADILLA. Mr. Presiding Officer, on lines 2 to 5 is the clause 'pursuant to the provisions of
Article III of Proclamation No. 3, issued on March 25, 1986, and the reorganization.' Are
those words necessary? Can we not just say 'result of the reorganization following the
ratification of this Constitution'? In other words, must we make specific reference to
Proclamation No. 3?
Mr. SUAREZ. Yes. I think the committee feels that is necessary, because in truth there has
been a reorganization by virtue of Proclamation No. 3. In other words, there are two stages
of reorganization covered by this section.
Mr. PADILIA. I understand there is a reorganization committee headed by a minister?
Mr. SUAREZ. Philippine Commission on Government Reorganization.
Mr. PADILLA. But whether that has already been implemented or not, I do not believe in it.
There has been a plan, but I do not think it has been implemented. If we want to include any
previous reorganization after or before the ratification, why do we not just say reorganization
before or after the ratification' to simplify the provision and eliminate two-and-a-half
sentences that may not be necessary? And as a result of the reorganization, if the committee
feels there has been reorganization before ratification and there be reorganization after, we
just say 'before or after the ratification of this Constitution.
Mr. SUAREZ. Something like this as a result of the reorganization effected before or after the
ratification of the Constitution on the understanding, with the statement into the records, that
this would be applicable to those reorganized out pursuant to the Freedom Constitution also.
Mr. PADILLA. That is understood if there has been a reorganization before the ratification or
a reorganization after the ratification." (RECORDS of the Constitutional Commission, Vol. 5,
p. 416) (Emphasis provided)
It should also be recalled that the deadline for the reorganization under Proclamation No. 3 was "one
year from February 25, 1986" (Article III, Section 2), or up to February 24, 1987. Executive Order No.
17 itself provided that the review/assessment of personnel be completed "not later than February 24,
1987." But, confronted with the reality of the ratification of the Constitution before that deadline
without reorganization having been completed, there was need for a provision allowing for its
continuance even after ratification and until completed. It was also to beat that deadline that EO 127
and similar issuances, providing for the reorganization of departments of government, were all dated
30 January 1987 or prior to the plebiscite held on 2 February 1987. The intent to continue and
complete the reorganizations started is self- evident in SECTION 16.

In Jose vs. Arroyo, et al. (G.R. No. 78435, August 11, 1987), which was a Petition for certiorari and
Prohibition to enjoin the implementation of Executive Order No. 127, we recognized that the
reorganization pursuant to Proclamation No. 3 as mandated by SECTION 16, was to continue even
after ratification when we stated:
The contention of petitioner that EO No. 127 is violative of the provision of the 1987
Constitution guaranteeing career civil service employees security of tenure overlooks the
provision of Section 16, Art. XVIII (Transitory Provisions) which explicitly authorizes 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 the Constitution. By virtue of said provision, the reorganization of the Bureau of
Customs under Executive Order No. 127 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. (Emphasis ours)
With due respect to the majority, we disagree with its conclusion that the foregoing pronouncement is
mere "obiter dictum."
An obiter dictum or dictum has been defined as a remark or opinion uttered, by the way. It is
a statement of the court concerning a question which was not directly before it (In re Hess 23
A. 2d. 298, 301, 20 N.J. Misc. 12). It is language unnecessary to a decision, (a) ruling on an
issue not raised, or (an) opinion of a judge which does not embody the resolution or
determination of the court, and is made without argument or full consideration of the point
(Lawson v. US, 176 F2d 49, 51, 85 U.S. App. D.C. 167). It is an expression of opinion by the
court or judge on a collateral question not directly involved, (Crescent Ring Co. v. Travelers
Indemnity Co. 132 A. 106, 107, 102 N.J. Law 85) or not necessary for the decision Du Bell v.
Union Central Life Ins. Co., 29, So. 2d 709, 712; 211 La. 167).
In the case at bar, however, directly involved and squarely before the Court was the issue of whether
EO 127 violates Section 2(3) of Article IX-B of the 1987 Constitution against removal of civil service
employees except for cause." Petitioner batted for the affirmative of the proposition, while
respondents contended that "removal of civil service employees without cause is allowed not only
under the Provisional Constitution but also under the 1987 Constitution if the same is made pursuant
to a reorganization after the ratification of the Constitution."
It may be that the Court dismissed that Petition for being premature, speculative and purely
anticipatory" inasmuch as petitioner therein had "not received any communication terminating or
threatening to terminate his services." But that was only one consideration. The Court still proceeded
to decide all the issues adversatively contested by the parties, namely "1) that the expiration date of
February 25, 1 987 fixed by Section 2 of Proclamation No. 3 on which said Executive order is based
had already lapsed; 2) that the Executive Order has not been published in the Official Gazette as
required by Article 2 of the Civil Code and Section 1 1 of the Revised Administrative Code; and 3)
that its enforcement violates Section 2(3) of Article IX B of the 1987 Constitution against removal of
civil service employees except for cause."
The ruling of the Court, therefore, on the Constitutional issues presented, particularly, the lapse of
the period mandated by Proclamation No. 3, and the validity of EO 127, cannot be said to be mere
"obiter." They were ultimate issues directly before the Court, expressly decided in the course of the
consideration of the case, so that any resolution thereon must be considered as authoritative
precedent, and not a mere dictum (See Valli v. US, 94 F2d 687 certiorari granted 58 S. Ct. 760, 303
U.S. 82 L. Ed. 1092; See also Weedin v. Tayokichi Yamada 4 F. (2d) 455). Such resolution would not
lwph1.t

lose its value as a precedent just because the disposition of the case was also made on some other
ground.
.....And this rule applies as to all pertinent questions although only incidentally involved,
which are presented and decided in the regular course of the consideration of the case, and
lead up to the final conclusion (Northern Pac. Ry Co. v. Baker, D.C. Wash., 3 F. Suppl. 1;
See also Wisconsin Power and Light Co. v. City of Beloit 254 NW 119; Chase v. American
Cartage Co. 186 N.W. 598; City of Detroit, et al. v. Public Utilities Comm. 286 N.W. 368).
Accordingly, a point expressly decided does not lose its value as a precedent because the
disposition of the case is made on some other ground. (Wagner v. Com Products Refining
Co. D.C. N.J. 28 F 2d 617) Where a case presents two or more points, any one of which is
sufficient to determine the ultimate issue, but the court actually decides all such points, the
case is an authoritative precedent as to every point decided, and none of such points can be
regarded as having merely the status of a dictum (See U.S. Title Insurance and Trust Co.,
Cal., 44 S. Ct. 621, 265 U.S. 472, 68 L. Ed. 1110; Van Dyke v. Parker 83 F. (2d) 35) and one
point should not be denied authority merely because another point was more dwelt on and
more fully argued and considered. (Richmond Screw Anchor Co. v. U.S. 48 S. Ct. 194, 275
U.S. 331, 72 L. Ed. 303)"
It is true that in Palma-Fernandez vs. de la Paz (G.R. No. 78946, April 15, 1986, 160 SCRA 751), we
had stated:
The argument that, on the basis of this provision (Section 26 of Executive Order No. 119, or
the 'Reorganization Act of the Ministry of Health'), petitioner's term of office ended on 30
January 1987 and that she continued in the performance of her duties merely in a hold-over
capacity and could be transferred to another position without violating any of her legal rights,
is untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate
reorganization and would have lapsed on 25 February 1987 (under the Provisional
Constitution), but advanced to 2 February 1987 when the 1987 Constitution became effective
(De Leon, et al., vs. Hon. Esguerra, et al., G.R. No. 78059, 31 August 1987, 153 SCRA 602).
After the d date the provisions of the latter on security of tenure govern.
The factual situation in the two cases, however, radically differ. In the cited case, Dra. PalmaFernandez, the petitioner, had already been extended a permanent appointment as Assistant
Director for Professional Services of the East Avenue Medical Center but was still being transferred
by the Medical Center Chief to the Research Office against her consent. Separation from the service
as a result of reorganization was not involved. The question then arose as to whether the latter
official had the authority to transfer or whether the power to appoint and remove subordinate officers
and employees was lodged in the Secretary of Health. Related to that issue was the vital one of
whether or not her transfer, effected on 29 May 1987, was tantamount to a removal without cause.
Significant, too, is the fact that the transfer was basically made "in the interest of the service"
pursuant to Section 24(c) of PD No. 807, or the Civil Service Decree, and not because she was
being reorganized out by virtue of EO 119 or the "Reorganization Act of the Ministry of Health,"
although the said Act was invoked after the fact. And so it was that SECTION 16 was never
mentioned, much less invoked in the Palma-Fernandez case.
Finally, on this point, it is inaccurate for the majority to state that there were no reorganization orders
after ratification. There were, namely, EO 181 (Reorganization Act of the Civil Service Commission),
June 1, 1987; EO 193 (Reorganization Act of the Office of Energy Affairs), June 10, 1987; EO 230
(Reorganization Act of NEDA), July 22, 1987; EO 262 (Reorganization Act of the Department of
Local Government), July 25, 1987; EO 297 (Reorganization Act of the Office of the Press Secretary),
July 25, 1987.

The Element of Good Faith

The majority concedes that reorganization can be undertaken provided it be in good faith but
concludes that Commissioner Mison was not in good faith.
The aforesaid conclusion is contradicted by the records.
Executive Order No. 127, dated 30 January 1987, specifically authorized the reorganization of the
Bureau of Customs "structurally and functionally" and provided for the abolition of all units and
positions thereof not included in the structural organization S election 55).
As stated heretofore, it was the former Commissioner of Customs, Alexander A. Padilla who, on 24
May 1987, transmitted to the Department of Finance for approval the proposed "position structure
and staffing pattern" of the Bureau of Customs. This was approved by the Department of Finance.
Thereafter, it was transmitted to and approved by the Department of Budget and Management on 7
September 1987 for implementation. Under the old staffing pattern, there were 7,302 positions while
under the new staffing pattern, there are 6,530 positions.
On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of
Reorganization Executive Orders" provided:
By October 21, 1987, all employees covered by the Executive orders for each agency on
reorganization shall be:
a. informed of their reappointment, or
b. offered another position in the same department or agency, or
c. informed of their termination. (emphasis supplied)
On 25 November 1987 Commissioner Mison asked for and was granted by the President an
extension up to February 1988 within which to completely undertake the reorganization of the
Bureau of Customs.
On 6 January 1988, he issued Bureau of Customs Memorandum "Re Guidelines on the
Implementation of Reorganization Executive Orders" reiterating the above- quoted portion of the
Malacanang Memorandum of 2 October 1987. Pursuant thereto, on 28 January 1988, Commissioner
Mison addressed uniform letters of termination to the employees listed on pages 15, 16 and 17 of
the majority opinion, effective on 28 February 1988, within the extended period granted.
The records further show that upon Commissioner Mison's official inquiry, Secretary of Justice
Sedfrey A. Ordo;ez, rendered the following Opinion:
. . . It is believed that customs employees who are reorganized out in the course of the
implementation of E.O. No. 127 (reorganizing the Department of Finance) need not be
informed of the nature and cause of their separation from the service. It is enough that they
be 'informed of their termination' pursuant to section 1(c) of the Memorandum dated October
2, 1987 of President Aquino, which reads:
1. By October 21, 1987, all employees covered by the Executive orders for each
agency on reorganization shall be:

xxx

xxx

xxx

c) Informed of their terminations.

The constitutional mandate that 'no officer or employee of the civil service shall be renewed
or suspended except for cause as provided by law' (Sec. 2(4) (sic), Article IX-B of the 1987
Constitution) does not apply to employees who are separated from office as a result of the
reorganization of that Bureau as directed in Executive Order No. 127.
xxx

xxx

xxx

Regarding your (third) query, the issue as to the constitutionality of Executive Order No. 127
is set at rest, after the Supreme Court resolved to dismiss the petition
for certiorari questioning its enforceability, for lack of merit (see Jose vs. Arroyo, et
al., supra). (Opinion No. 41, s. 1988, March 3, 1988) (Emphasis supplied)
The former Chairman of the Civil Service Commission, Celerina G. Gotladera likewise periodically
consulted by Commissioner Mison, also expressed the opinion that "it is not a prerequisite prior to
the separation of an employee pursuant to reorganization that he be administratively charged."
(Annex 16, p. 411, Rollo, G.R. No. 85310)
Moreover, the records show that the final selection and placement of personnel was done by a
Placement Committee, one of whose members is the Head of the Civil Service Commission Field
Office, namely, Mrs. Purificacion Cuerdo The appointment of employees made by Commissioner
Mison was based on the list approved by said Placement Committee.
But the majority further faults Mison for defying the President's directive to halt further layoffs as a
consequence of reorganization, citing OP Memo of 14 October 1987, reading:
Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that
there will be no further layoffs this year of personnel as a result of the government
reorganization. (p. 45, Decision)
The foregoing, however, must be deemed superseded by later developments, namely, the grant to
Commissioner Mison by the President on 22 December 1987 of a grace period until the end of
February 1988 within which to completely undertake the reorganization of the Bureau of Customs,
which was, in fact, accomplished by 28 February 1988.
To further show lack of good faith, the majority states that Commissioner Mison failed to observe the
procedure laid down by EO 17, supra, directing inter alia that a notice of separation be issued to an
employee to be terminated indicating therein the reason/s or ground/s for such separation. That
requirement, however, does not appear in Section 59 of EO 127, which provides on the contrary
"that those incumbents whose positions are not included in the new position structure and staffing
pattern of the Ministry or who are not reappointed shall be deemed separated from the service." The
right granted by EO 17 to an employee to be informed of the ground for his separation must be
deemed to have been revoked by the repealing clause of EO 127 (Section 67) providing that "all
laws, ordinances or parts thereof, which are inconsistent with this Executive Order, are hereby
repealed and modified accordingly."
Moreover, Section 11 of EO 17 explicitly excepts from its coverage a reorganization pursuant to EO
5. Thus

The Executive Order shall not apply to elective officials or those designated to replace them,
presidential appointees, casual and contractual employees, or officials and employees
removed pursuant to desciplinary proceedings under the Civil Service law and rules, and to
those laid off as a result of reorganization undertaken pursuant to Executive Order No.
5. (Emphasis ours)
That EO 127 was issued pursuant to or in implementation of EO 5, is shown by its introductory
portion reading:
Recalling that the reorganization of the government is mandated expressly by Article II,
Section 1 (a) and Article III of the Freedom Constitution;
Having in mind that pursuant to Executive order No. 5 (1986), it is directed that the
necessary and proper changes in the organizational and functional structures of the
government, its agencies and instrumentalities, be effected in order to promote efficiency
and effectiveness in the delivery of public service; (Italics supplied)
Constitutionality of Republic Act No. 6656
The majority also relies on Republic Act No. 6656 entitled an "Act to Protect the Security of Tenure of
Civil Service Officers and Employees in the Implementation of Government Reorganization,"
particularly Section 2 thereof, to test the good faith of Commissioner Mison.
We are of the view, however, that in providing for retroactivity in its Section 13, RA 6656 clashes
frontally with SECTION 16.
1) SECTION 16 clearly recognizes that career service employees separated from the service by
reason of the "complete reorganization of the government" pursuant to Proclamation No. 3 may be
separated NOT FOR CAUSE. And yet, RA 6656 requires the exact opposite separation FOR
CAUSE. It would not be remiss to quote the provision again:
SEC. 2. No officer or employee in the career service shall be removed except for a valid
cause and after due notice and hearing. A valid cause for removal exist 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 exigencies of the service,
or other lawful causes allowed by the Civil Service law. The existence 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 party: (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 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.
(Republic Act No. 6156)
The standards laid down are the "traditional" criteria for removal of employees from the career
service, e.g. valid cause, due notice and hearing, abolition of, or redundancy of offices. Proclamation
No. 3, on the other hand, effectuates the "progressive" type of reorganization dictated by the
exigencies of the historical and political upheaval at the time. The "traditional" type is limited in
scope. It is concerned with the individual approach where the particular employee involved is

charged administratively and where the requisites of notice and hearing have to be observed. The
"progressive" kind of reorganization, on the other hand, is the collective way. It is wider in scope, and
is the reorganization contemplated under SECTION 16.
2) By providing for reinstatement in its Section 9, RA 6656 adds a benefit not included in SECTION
16. The benefits granted by the latter provision to employees separated NOT FOR CAUSE but as a
consequence of reorganization are "separation pay, retirement, and other benefits accruing to them
under the laws of general application in force at the time of their separation." The benefit of
reinstatement is not included. RA 6656, however, allows reinstatement. That it cannot do because
under SECTION 16, it is not one of the laws "in force at the time of their separation."
The Constitution is the paramount law to which all laws must conform. It is from the Constitution that
all statutes must derive their bearings. The legislative authority of the State must yield to the
expression of the sovereign will. No statutory enactment can disregard the Charter from which it
draws its own existence (Phil. Long Distance Telephone Co. v. Collector of Internal Revenue, 90
Phil. 674 [1952]). But, that is exactly what RA 6656 does in providing for retroactivity it disregards
and contravenes a Constitutional imperative. To save it, it should be applied and construed
prospectively and not retroactively notwithstanding its explicit provision. Then, and only then, would
it make good law.
Effects of Reorganization
To be sure, the reorganization could effect the tenure of members of the career service as defined in
Section 5, Article IV of Presidential Decree No. 807, and may even result in the separation from the
office of some meritorious employees. But even then, the greater good of the greatest number and
the right of the citizenry to a good government, and as they themselves have mandated through the
vehicle of Proclamation No. 3, provide the justification for the said injury to the individual. In terms of
values, the interest of an employee to security of tenure must yield to the interest of the entire
populace and to an efficient and honest government.
But a reorganized employee is not without rights. His right lies in his past services, the entitlement to
which must be provided for by law. EO 127 provides for the same in its Section 59, and so does
SECTION 16 when the latter specified that career civil service employees separated from the
service not for cause:
shall 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 lieu
thereof, at the option of the employees, they may be considered for employment in the
Government or in any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries. This provision also
applies to career officers whose resignation, tendered in line with the existing policy, has
been accepted.
This is a reward for the employee's past service to the Government. But this is all There is no vested
property right to be reemployed in a reorganized office.
The right to an office or to employment with government or any of its agencies is not a
vested property right, and removal therefrom will not support the question of due process"
Yantsin v. Aberdeen, 54 Wash 2d 787, 345 P 2d 178). A civil service employee does not have
a constitutionally protected right to his position, which position is in the nature of a public
office, political in character and held by way of grant or privilege extended by government;
generally he has been held to have no property right or vested interest to which due process

guaranties extend (See Taylor v. Beckham 178 U.S. 548, 44 L Ed. 1187; Angilly v. US CA2
NY 199 F 2d 642; People ex. rel. Baker v. Wilson, 39 III App 2d 443, 189 NE 2d 1; Kelliheller
v. NY State Civil Service Com 21 Misc 2d 1034, 194 NYS 2d 89).
To ensure, however, that no meritorious employee has been separated from the service, there would
be no harm, in fact, it could do a lot of good, if the Commissioner of Customs reviews the evaluation
and placements he has so far made and sees to it that those terminated are included in a
consolidated list to be given preference by departments who are recruiting (Section 2[a], BOC
Memorandum, January 6,1988).
Conclusion
Premises considered, and subject to the observation hereinabove made, it is our considered view
that the separation from the service "NOT FOR CAUSE but as a result of the reorganization
pursuant to Proclamation No. 3 dated March 25, 1986" of the affected officers and employees of the
Bureau of Customs should be UPHELD, and the Resolutions of the Civil Service Commission, dated
30 June 1988, 20 September 1988, and 16 November 1988 should be SET ASIDE for having been
issued in grave abuse of discretion.
Republic Act No. 6656, in so far as it provides for retroactivity, should be declared
UNCONSTITUTIONAL for being repugnant to the letter and spirit of Section 16, Article XVIII of the
1987 Constitution.
Fernan, C.J., Narvasa, Feliciano, Regalado, JJ., concur.

[G.R. No. 142801-802. July 10, 2001]

BUKLOD NG KAWANING EIIB, CESAR POSADA, REMEDIOS G.

PRINCESA, BENJAMIN KHO, BENIGNO MANGA, LULU
MENDOZA, petitioners, vs. HON. EXECUTIVE SECRETARY
RONALDO B. ZAMORA, HON. SECRETARY JOSE PARDO,
DEPARTMENT OF FINANCE, HON. SECRETARY BENJAMIN
DIOKNO, DEPARTMENT OF BUDGET AND MANAGEMENT, HON.
SECRETARY
ARTEMIO
TUQUERO,
DEPARTMENT
OF
JUSTICE, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:

In this petition for certiorari, prohibition and mandamus, petitioners Buklod Ng

Kawaning EIIB, Cesar Posada, Remedios Princesa, Benjamin Kho, Benigno Manga
and Lulu Mendoza, for themselves and in behalf of others with whom they share a
common or general interest, seek the nullification of Executive Order No.
191[1] and Executive Order No. 223[2] on the ground that they were issued by the Office
of the President with grave abuse of discretion and in violation of their constitutional
right to security of tenure.
The facts are undisputed:
On June 30, 1987, former President Corazon C. Aquino, issued Executive Order
No. 127[3] establishing the Economic Intelligence and Investigation Bureau (EIIB) as
part of the structural organization of the Ministry of Finance. [4] The EIIB was
designated to perform the following functions:
(a) Receive, gather and evaluate intelligence reports and information and evidence
on the nature, modes and extent of illegal activities affecting the national
economy, such as, but not limited to, economic sabotage, smuggling, tax evasion,
and dollar-salting, investigate the same and aid in the prosecution of cases;
(b) Coordinate with external agencies in monitoring the financial and economic
activities of persons or entities, whether domestic or foreign, which may
adversely affect national financial interest with the goal of regulating, controlling
or preventing said activities;

(c) Provide all intelligence units of operating Bureaus or Offices under the
Ministry with the general framework and guidelines in the conduct of intelligence
and investigating works;
(d) Supervise, monitor and coordinate all the intelligence and investigation
operations of the operating Bureaus and Offices under the Ministry;
(e) Investigate, hear and file, upon clearance by the Minister, anti-graft and
corruption cases against personnel of the Ministry and its constituents units;
(f) Perform such other appropriate functions as may be assigned by the Minister
or his deputies.[5]
In a desire to achieve harmony of efforts and to prevent possible conflicts among
agencies in the course of their anti-smuggling operations, President Aquino issued
Memorandum Order No. 225 on March 17, 1989, providing, among others, that the
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.[6]
Eleven years after, or on January 7, 2000, President Joseph Estrada issued
Executive Order No. 191 entitled Deactivation of the Economic Intelligence and
Investigation Bureau.[7] Motivated by the fact that the designated functions of the EIIB
are also being performed by the other existing agencies of the government and that
there is a need to constantly monitor the overlapping of functions among these
agencies, former President Estrada ordered the deactivation of EIIB and the transfer of
its functions to the Bureau of Customs and the National Bureau of Investigation.
Meanwhile, President Estrada issued Executive Order No. 196 [8] creating the
Presidential Anti-Smuggling Task Force Aduana.[9]
Then the day feared by the EIIB employees came. On March 29, 2000, President
Estrada issued Executive Order No. 223 [10] providing that all EIIB personnel occupying
positions specified therein shall be deemed separated from the service effective April
30, 2000, pursuant to a bona fide reorganization resulting to abolition, redundancy,
merger, division, or consolidation of positions. [11]
Agonizing over the loss of their employment, petitioners now come before this
Court invoking our power of judicial review of Executive Order Nos. 191 and 223.
They anchor their petition on the following arguments:

Executive Order Nos. 191 and 223 should be annulled as they are
unconstitutional for being violative of Section 2(3), Article IX-B of the Philippine
Constitution and/or for having been issued with grave abuse of discretion
amounting to lack or excess of jurisdiction.
B.

The abolition of the EIIB is a hoax. Similarly, if Executive Order Nos. 191 and
223 are considered to effect a reorganization of the EIIB, such reorganization
was made in bad faith.
C.

The President has no authority to abolish the EIIB.

Petitioners contend that the issuance of the afore-mentioned executive orders
is: (a) a violation of their right to security of tenure; (b) tainted with bad faith as they
were not actually intended to make the bureaucracy more efficient but to give way to
Task Force Aduana, the functions of which are essentially and substantially the same
as that of EIIB; and (c) a usurpation of the power of Congress to decide whether or
not to abolish the EIIB.
Arguing in behalf of respondents, the Solicitor General maintains that: (a) the
President enjoys the totality of the executive power provided under Sections 1 and 7,
Article VII of the Constitution, thus, he has the authority to issue Executive Order
Nos. 191 and 223; (b) the said executive orders 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.
The petition is bereft of merit.
Despite the presence of some procedural flaws in the instant petition, such as,
petitioners disregard of the hierarchy of courts and the non-exhaustion of
administrative remedies, we deem it necessary to address the issues. It is in the
interest of the State that questions relating to the status and existence of a public office
be settled without delay. We are not without precedent. In Dario v. Mison,
[12]
we liberally decreed:

The Court disregards the questions raised as to procedure, failure to exhaust

administrative remedies, the standing of certain parties to sue, for two
reasons, `[b]ecause of the demands of public interest, including the need for
stability in the public service,' and because of the serious implications of these cases
on the administration of the Philippine civil service and the rights of public servants.
At first glance, it seems that the resolution of this case hinges on the question
- Does the deactivation of EIIB constitute abolition of an office? However, after
coming to terms with the prevailing law and jurisprudence, we are certain that the
ultimate queries should be a) Does the President have the authority to reorganize the
executive department? and, b) How should the reorganization be carried out?
Surely, there exists a distinction between the words deactivate and abolish.
To deactivate means to render inactive or ineffective or to break up by discharging or
reassigning personnel,[13] while toabolish means to do away with, to annul, abrogate or
destroy completely.[14] In essence, abolition denotes an intention to do away with the
office wholly and permanently.[15] Thus, while in abolition, the office ceases to exist,
the same is not true in deactivation where the office continues to
exist, albeit remaining dormant or inoperative. Be that as it may, deactivation and
abolition are both reorganization measures.
The Solicitor General only invokes the above distinctions on the mistaken
assumption that the President has no power to abolish an office.
The general rule has always been that the power to abolish a public office is
lodged with the legislature. [16] This proceeds from the legal precept that the power to
create includes the power to destroy. A public office is either created by the
Constitution, by statute, or by authority of law.[17] Thus, except where the office was
created by the Constitution itself, it may be abolished by the same legislature that
brought it into existence.[18]
The exception, however, is that as far as bureaus, agencies or offices in the
executive department are concerned, the Presidents power of control may justify him
to inactivate the functions of a particular office, [19] or certain laws may grant him the
broad authority to carry out reorganization measures. [20] The case in point is Larin v.
Executive Secretary.[21] In this case, it was argued that there is no law which empowers
the President to reorganize the BIR. In decreeing otherwise, this Court sustained the
following legal basis, thus:

Initially, it is argued that there is no law yet which empowers the President to issue
E.O. No. 132 or to reorganize the BIR.
We do not agree.
xxxxxx
Section 48 of R.A. 7645 provides that:
Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive
Branch. 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, subject to civil service rules and regulations. X x x. Actual scaling down,
phasing out or abolition of the activities shall be effected pursuant to Circulars or
Orders issued for the purpose by the Office of the President.
Said provision clearly mentions the acts of scaling down, phasing out and
abolition of offices only and does not cover the creation of offices or transfer of
functions. Nevertheless, the act of creating and decentralizing is included in the
subsequent provision of Section 62 which provides that:
Sec. 62. Unauthorized organizational charges.- Unless otherwise created by law or
directed by the President of the Philippines, no organizational unit or changes in key
positions in any department or agency shall be authorized in their respective
organization structures and be funded from appropriations by this Act. (italics ours)
The foregoing provision evidently shows that the President is authorized to effect
organizational changes including the creation of offices in the department or
agency concerned.
xxxxxx
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. (italic ours)

This provision speaks of such other powers vested in the President under the
law. What law then gives him the power to reorganize? It is Presidential Decree
No. 1772 which amended Presidential Decree No. 1416. These decrees expressly
grant the President of the Philippines 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 1987 Constitution clearly
provides that all laws, decrees, executive orders, proclamations, letters of instructions
and other executive issuances not inconsistent with this Constitution shall remain
operative until amended, repealed or revoked. So far, there is yet no law amending or
repealing said decrees. (Emphasis supplied)
Now, let us take a look at the assailed executive order.
In the whereas clause of E.O. No. 191, former President Estrada anchored his
authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General
Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted
in Larin, thus;
Sec. 77. Organized Changes. 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 and funded from appropriations provided by this Act.
We adhere to the precedent or ruling in Larin that this provision recognizes the
authority of the President to effect organizational changes in the department or agency
under the executive structure. Such a ruling further finds support in Section 78 of
Republic Act No. 8760.[22] Under this law, the heads of departments, bureaus, offices
and agencies and other entities in the Executive Branch are directed (a) to conduct a
comprehensive review of their respective mandates, missions, objectives, functions,
programs, projects, activities and systems and procedures; (b) identify activities which
are no longer essential in the delivery of public services and which may be scaled
down, phased-out or abolished; and (c) adopt measures that will result in the
streamlined organization and improved overall performance of their respective
agencies.[23] Section 78 ends up with the mandate that the actual streamlining and
productivity improvement in agency organization and operation shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office of the
President.[24] The law has spoken clearly. We are left only with the duty to sustain.

But of course, the list of legal basis authorizing the President to reorganize any
department or agency in the executive branch does not have to end here. We must not
lose sight of the very source of the power that which constitutes an express grant of
power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as
the Administrative 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. For this purpose, he may transfer the functions of other
Departments or Agencies to the Office of the President. In Canonizado v. Aguirre,
[25]
we ruled that 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 between
them. The EIIB is a bureau attached to the Department of Finance. [26] It falls under the
Office of the President. Hence, it is subject to the Presidents continuing authority to
reorganize.
It having been duly established that the President has the authority to carry out
reorganization in any branch or agency of the executive department, what is then left
for us to resolve is whether or not the reorganization is valid. In this jurisdiction,
reorganizations have been regarded as valid provided they are pursued in good
faith. Reorganization is carried out in good faith if it is for the purpose of economy or
to make bureaucracy more efficient.[27] Pertinently, Republic Act No. 6656[28] 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, 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 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.[29]
Petitioners claim that the deactivation of EIIB was done in bad faith because four
days after its deactivation, President Estrada created the Task Force Aduana.
We are not convinced.

An examination of the pertinent Executive Orders [30] shows that the deactivation of
EIIB and the creation of Task Force Aduana were done in good faith. It was not for
the purpose of removing the EIIB employees, but to achieve the ultimate purpose of
E.O. No. 191, which is economy. While Task Force Aduana was created to take the
place of EIIB, its creation does not entail expense to the government.
Firstly, there is no employment of new personnel to man the Task Force. E.O.
No. 196 provides that the technical, administrative and special staffs of EIIB are
to be composed of people who are already in the public service, they being
employees of other existing agencies. Their tenure with the Task Force would
only be temporary, i.e., only when the agency where they belong is called upon to
assist the Task Force. Since their employment with the Task force is only by way
of detail or assignment, they retain their employment with the existing
agencies. And should the need for them cease, they would be sent back to the
agency concerned.
Secondly, the thrust of E.O. No. 196 is to have a small group of military men
under the direct control and supervision of the President as base of the governments
anti-smuggling campaign. Such a smaller base has the necessary powers 1) to enlist
the assistance of any department, bureau, or office and to use their respective
personnel, facilities and resources; and 2) to select and recruit personnel from within
the PSG and ISAFP for assignment to the Task Force. Obviously, the idea is to
encourage the utilization of personnel, facilities and resources of the already
existing departments, agencies, bureaus, etc., instead of maintaining an
independent office with a whole set of personnel and facilities. The EIIB had
proven itself burdensome for the government because it maintained separate offices in
every region in the Philippines.
And thirdly, it is evident from the yearly budget appropriation of the government
that the creation of the Task Force Aduana was especially intended to lessen EIIBs
expenses. Tracing from the yearly General Appropriations Act, it appears that the
allotted amount for the EIIBs general administration, support, and operations for the
year 1995, was P128,031,000;[31] for 1996, P182,156,000;[32] for 1998,P219,889,000;
[33]
and,
for
1999, P238,743,000.[34] These amounts
were
far
above
[35]
the P50,000,000 allocation to the Task Force Aduana for the year 2000.
While basically, the functions of the EIIB have devolved upon the Task Force
Aduana, we find the latter to have additional new powers. The Task Force Aduana,
being composed of elements from the Presidential Security Group (PSG) and

Intelligence Service Armed Forces of the Philippines (ISAFP), [36] has the
essential power to effect searches, seizures and arrests. The EIIB did not have this
power. The Task Force Aduana has the power to enlist the assistance of any
department, bureau, office, or instrumentality of the government, including
government-owned or controlled corporations; and to use their personnel, facilities
and resources. Again, the EIIB did not have this power. And, the Task Force Aduana
has the additional authority to conduct investigation of cases involving ill-gotten
wealth. This was not expressly granted to the EIIB.
Consequently, it cannot be said that there is a feigned reorganization. In Blaquera
v. Civil Sevice Commission, [37] we ruled that a reorganization in good faith is one
designed to trim the fat off the bureaucracy and institute economy and greater
efficiency in its operation.
Lastly, we hold that petitioners right to security of tenure is not violated. Nothing
is better settled in our law than that the abolition of an office within the competence of
a legitimate body if done in good faith suffers from no infirmity. Valid abolition of
offices is neither removal nor separation of the incumbents. [38] In the instructive words
laid down by this Court in Dario v. Mison,[39] through Justice Abraham F. Sarmiento:
Reorganizations in this jurisdiction have been regarded as valid provided they are
pursued in good faith. 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. In that event,
no dismissal (in case of dismissal) or separation actually occurs because the
position itself ceases to exist. And in that case, security of tenure would not be a
Chinese wall. Be that as it may, if the abolition, which is nothing else but a separation
or removal, is done for political reasons or purposely to defeat security of tenure,
otherwise not in good faith, no valid abolition takes and whatever abolition is done, is
void ab initio. There is an invalid abolition as where there is merely a change of
nomenclature of positions, or where claims of economy are belied by the existence of
ample funds.
Indeed, there is no such thing as an absolute right to hold office. Except
constitutional offices which provide for special immunity as regards salary and tenure,
no one can be said to have any vested right in an office or its salary.[40]
While we cast a commiserating look upon the plight of all the EIIB employees
whose lives perhaps are now torn with uncertainties, we cannot ignore the unfortunate
reality that our government is also battling the impact of a plummeting

economy. Unless the government is given the chance to recuperate by instituting

economy and efficiency in its system, the EIIB will not be the last agency to suffer the
impact. We cannot frustrate valid measures which are designed to rebuild the
executive department.
WHEREFORE, the petition is hereby DENIED. No costs.
SO ORDERED.

[G.R. No. 152845. August 5, 2003]

DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN,

RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM,
RODOLFO DAGA, EDGARDO BACLIG, GREGORIO LABAYAN,
HILARIO
JEREZ,
and
MARIA
CORAZON
CUANANG, petitioners, vs. NATIONAL
TOBACCO
ADMINISTRATION, represented by ANTONIO DE GUZMAN and
PERLITA BAULA, respondents.
DECISION
VITUG, J.:

President Joseph Estrada issued on 30 September 1998 Executive Order

No. 29, entitled Mandating the Streamlining of the National Tobacco
Administration (NTA), a government agency under the Department of
Agriculture. The order was followed by another issuance, on 27 October 1998,
by President Estrada of Executive Order No. 36, amending Executive Order
No. 29, insofar as the new staffing pattern was concerned, by increasing from
four hundred (400) to not exceeding seven hundred fifty (750) the positions
affected thereby. In compliance therewith, the NTA prepared and adopted a
new Organization Structure and Staffing Pattern (OSSP) which, on 29 October
1998, was submitted to the Office of the President.
On 11 November 1998, the rank and file employees of NTA Batac, among
whom included herein petitioners, filed a letter-appeal with the Civil Service
Commission and sought its assistance in recalling the OSSP. On 04
December 1998, the OSSP was approved by the Department of Budget and
Management (DBM) subject to certain revisions. On even date, the 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 OSSP were then disseminated and
posted at the central and provincial offices of the NTA.
On 10 June 1996, petitioners, all occupying different positions at the NTA
office in Batac, Ilocos Norte, received individual notices of termination of their
employment with the NTA effective thirty (30) days from receipt

thereof. Finding themselves without any immediate relief from their dismissal
from the service, petitioners filed a petition for certiorari, prohibition
andmandamus, with prayer for preliminary mandatory injunction and/or
temporary restraining order, with the Regional Trial Court (RTC) of Batac,
Ilocos Norte, and prayed 1) that a restraining order be immediately issued enjoining the respondents from
enforcing the notice of termination addressed individually to the petitioners and/or
from committing further acts of dispossession and/or ousting the petitioners from their
respective offices;
2) that a writ of preliminary injunction be issued against the respondents,
commanding them to maintain the status quo to protect the rights of the petitioners
pending the determination of the validity of the implementation of their dismissal
from the service; and
3) that, after trial on the merits, judgment be rendered declaring the notice of
termination of the petitioners illegal and the reorganization null and void and ordering
their reinstatement with backwages, if applicable, commanding the respondents to
desist from further terminating their services, and making the injunction permanent.
[1]

The RTC, on 09 September 2000, ordered the NTA to appoint petitioners

in the new OSSP to positions similar or comparable to their respective former
assignments. A motion for reconsideration filed by the NTA was denied by the
trial court in its order of 28 February 2001. Thereupon, the NTA filed an appeal
with the Court of Appeals, raising the following issues:
I. Whether or not respondents submitted evidence as proof that petitioners,
individually, were not the best qualified and most deserving among the
incumbent applicant-employees.
II. Whether or not incumbent permanent employees, including herein
petitioners, automatically enjoy a preferential right and the right of first
refusal to appointments/reappointments in the new Organization
Structure And Staffing Pattern (OSSP) of respondent NTA.
III. Whether or not respondent NTA in implementing the mandated
reorganization pursuant to E.O. No. 29, as amended by E.O. No. 36,
strictly adhere to the implementing rules on reorganization, particularly

RA 6656 and of the Civil Service Commission Rules on Government

Reorganization.
IV. Whether or not the validity of E.O. Nos. 29 and 36 can be put in issue in
the instant case/appeal.
[2]

On 20 February 2002, the appellate court rendered a decision reversing and

setting aside the assailed orders of the trial court.
Petitioners went to this Court to assail the decision of the Court of
Appeals, contending that I. The Court of Appeals erred in making a finding that went beyond the issues
of the case and which are contrary to those of the trial court and that it
overlooked certain relevant facts not disputed by the parties and which,
if properly considered, would justify a different conclusion;
II. The Court of Appeals erred in upholding Executive Order Nos. 29 and 36
of the Office of the President which are mere administrative issuances
which do not have the force and effect of a law to warrant abolition of
positions and/or effecting total reorganization;
III. The Court of Appeals erred in holding that petitioners removal from the
service is in accordance with law;
IV. The Court of Appeals erred in holding that respondent NTA was not guilty
of bad faith in the termination of the services of petitioners; (and)
V. The Court of Appeals erred in ignoring case law/jurisprudence in the
abolition of an office.
[3]

In its resolution of 10 July 2002, the Court required the NTA to file its comment
on the petition. On 18 November 2002, after the NTA had filed its comment of
23 September 2002, the Court issued its resolution denying the petition for
failure of petitioners to sufficiently show any reversible error on the part of the
appellate court in its challenged decision so as to warrant the exercise by this
Court of its discretionary appellate jurisdiction. A motion for reconsideration
filed by petitioners was denied in the Courts resolution of 20 January 2002.

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

For En Banc Resolution of the case allegedly to address a basic question, i.e.,
the legal and constitutional issue on whether the NTA may be reorganized by
an executive fiat, not by legislative action. In their Petition for an En
Banc Resolution petitioners would have it that [4]

1. The Court of Appeals decision upholding the reorganization of the National

Tobacco Administration sets a dangerous precedent in that:
a) A mere Executive Order 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 the various executive departments;
b) The President of the Philippines would have the plenary power to reorganize the
entire government Bureaucracy through the issuance of an Executive Order, an
administrative issuance without the benefit of due deliberation, debate and discussion
of members of both chambers of the Congress of the Philippines;
c) The right to security of tenure to a career position created by law or statute would
be defeated by the mere adoption of an Organizational Structure and Staffing Pattern
issued pursuant to an Executive Order which is not a law and could thus not abolish
an office created by law;
2. The case law on abolition of an office would be disregarded, ignored and
abandoned if the Court of Appeals decision subject matter of this Petition would
remain undisturbed and untouched. In other words, previous doctrines and precedents
of this Highest Court would in effect be reversed and/or modified with the Court of
Appeals judgment, should it remain unchallenged.
3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex D, Petition),
issued by the Revolutionary government of former President Corazon Aquino, and the
law creating NTA, which provides that the governing body of NTA is the Board of
Directors, would be rendered meaningless, ineffective and a dead letter law because
the challenged NTA reorganization which was erroneously upheld by the Court of
Appeals was adopted and implemented by then NTA Administrator Antonio de
Guzman without the corresponding authority from the Board of Directors as mandated
therein. In brief, the reorganization is an ultra vires act of the NTA Administrator.
4. The challenged Executive Order No. 29 issued by former President Joseph Estrada
but unsigned by then Executive Secretary Ronaldo Zamora would in effect be

erroneously upheld and given legal effect as to supersede, amend and/or modify
Executive Order No. 245, a law issued during the Freedom Constitution of President
Corazon Aquino. In brief, a mere executive order would amend, supersede and/or
render ineffective a law or statute.
[5]

In order to allow the parties a full opportunity to ventilate their views on the
matter, the Court ultimately resolved to hear the parties in oral
argument. Essentially, the core question raised by them is whether or not the
President, through the issuance of an executive order, can validly carry out
the reorganization of the NTA.
Notwithstanding the apparent procedural lapse on the part of petitioner to
implead the Office of the President as party respondent pursuant to Section 7,
Rule 3, of the 1997 Revised Rules of Civil Procedure, this Court resolved to
rule on the merits of the petition.
[6]

Buklod ng Kawaning EIIB vs. Zamora ruled that the President, based on
existing laws, had the authority to carry out a reorganization in any branch or
agency of the executive department. In said case, Buklod ng Kawaning
EIIB challenged the issuance, and sought the nullification, of Executive Order
No. 191 (Deactivation of the Economic Intelligence and Investigation Bureau)
and Executive Order No. 223 (Supplementary Executive Order No. 191 on the
Deactivation of the Economic Intelligence and Investigation Bureau and for
Other Matters) on the ground that they were issued by the President with
grave abuse of discretion and in violation of their constitutional right to security
of tenure. The Court explained:
[7]

The general rule has always been that the power to abolish a public office is lodged
with the legislature. This proceeds from the legal precept that the power to create
includes the power to destroy. A public office is either created by the Constitution, by
statute, or 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.
The exception, however, is that as far as bureaus, agencies or offices in the executive
department are concerned, the Presidents power of control may justify him to
inactivate the functions of a particular office, or certain laws may grant him the broad
authority to carry out reorganization measures. The case in point is Larin v. Executive
Secretary [280 SCRA 713]. In this case, it was argued that there is no law which

empowers the President to reorganize the BIR. In decreeing otherwise, this Court
sustained the following legal basis, thus:
`Initially, it is argued that there is no law yet which empowers the President to issue
E.O. No. 132 or to reorganize the BIR.
`We do not agree.
`x x x x x x
`Section 48 of R.A. 7645 provides that:
``Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive
Branch. 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, subject to civil service rules and regulations. x x x. Actual scaling down,
phasing out or abolition of the activities shall be effected pursuant to Circulars or
Orders issued for the purpose by the Office of the President.
`Said provision clearly mentions the acts of `scaling down, phasing out and
abolition of offices only and does not cover the creation of offices or transfer of
functions. Nevertheless, the act of creating and decentralizing is included in the
subsequent provision of Section 62 which provides that:
``Sec. 62. Unauthorized organizational changes. Unless otherwise created by law or
directed by the President of the Philippines, no organizational unit or changes in key
positions in any department or agency shall be authorized in their respective
organization structures and be funded from appropriations by this Act.
`The foregoing provision evidently shows that the President is authorized to effect
organizational changes including the creation of offices in the department or agency
concerned.
`x x x x x x
`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.
`This provision speaks of such other powers vested in the President under the
law. What law then gives him the power to reorganize? It is Presidential Decree No.
1772 which amended Presidential Decree No. 1416. These decrees expressly grant the
President of the Philippines 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 1987 Constitution clearly provides that `all laws, decrees,
executive orders, proclamations, letter of instructions and other executive issuances
not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked. So far, there is yet no law amending or repealing said decrees.
Now, let us take a look at the assailed executive order.
In the whereas clause of E.O. No. 191, former President Estrada anchored his
authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General
Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin,
thus:
`Sec. 77. Organized Changes. 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
and funded from appropriations provided by this Act.
We adhere to the x x x ruling in Larin that this provision recognizes the authority of
the President to effect organizational changes in the department or agency under the
executive structure. Such a ruling further finds support in Section 78 of Republic Act
No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and
other entities in the Executive Branch are directed (a) to conduct a comprehensive
review of this respective mandates, missions, objectives, functions, programs,
projects, activities and systems and procedures; (b) identify activities which are no
longer essential in the delivery of public services and which may be scaled down,
phased-out or abolished; and (c) adopt measures that will result in the streamlined
organization and improved overall performance of their respective agencies. Section

78 ends up with the mandate that the actual streamlining and productivity
improvement in agency organization and operation shall be effected pursuant to
Circulars or Orders issued for the purpose by the Office of the President. The law has
spoken clearly. We are left only with the duty to sustain.
But of course, the list of legal basis authorizing the President to reorganize any
department or agency in the executive branch does not have to end here. We must not
lose sight of the very source of the power that which constitutes an express grant of
power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as
the Administrative 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. For this purpose, he may transfer the functions of other Departments or
Agencies to the Office of the President. In Canonizado vs. Aguirre [323 SCRA 312],
we ruled that 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 between
them. The EIIB is a bureau attached to the Department of Finance. It falls under the
Office of the President. Hence, it is subject to the Presidents continuing authority to
reorganize.
It having been duly established that the President has the authority to carry out
reorganization in any branch or agency of the executive department, what is then left
for us to resolve is whether or not the reorganization is valid. In this jurisdiction,
reorganizations have been regarded as valid provided they are pursued in good
faith. Reorganization is carried out in `good faith if it is for the purpose of economy or
to make bureaucracy more efficient. Pertinently, Republic Act No. 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, 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 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.
[8]

The Court of Appeals, in its now assailed decision, has found no evidence
of bad faith on the part of the NTA; thus In the case at bar, we find no evidence that the respondents committed bad faith in
issuing the notices of non-appointment to the petitioners.
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.
x x x x x x x x x.
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.
[9]

These findings of the appellate court are basically factual which this Court
must respect and be held bound.
It is important to emphasize that the questioned Executive Orders
No. 29 and No. 36 have not abolished the National Tobacco
Administration but merely mandated its reorganization through the
streamlining or reduction of its personnel. Article VII, Section 17, of the
Constitution, expressly grants the President control of all 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. Section 78 of the
General Provisions of Republic Act No. 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 Article VI, Section 25, of the Constitution, which grants to the Executive
[10]

[11]

[12]

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 most
economical and efficient staffing pattern, under the Executive Department.
In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D.
Zamora, in his capacity as the Executive Secretary, et al., this Court has had
occasion to also delve on the Presidents power to reorganize the Office of the
President under Section 31(2) and (3) of Executive Order No. 292 and the
power to reorganize the Office of the President Proper. The Court has there
observed:
[13]

x x x. Under Section 31(1) of EO 292, the President can reorganize the Office of the
President Proper by abolishing, consolidating or merging units, or by transferring
functions from one unit to another. In contrast, under Section 31(2) and (3) of EO 292,
the Presidents power to reorganize offices outside the Office of the
President Proper but still within the Office of the President is limited to merely
transferring functions or agencies from the Office of the President to Departments or
Agencies, and vice versa.
The provisions of Section 31, Book III, Chapter 10, of Executive Order No.
292 (Administrative Code of 1987), above-referred to, reads thusly:
SEC. 31. Continuing Authority of the President to Reorganize his Office. The
President, subject to the policy in the Executive Office and in order to achieve
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 and agencies.
The first sentence of the law is an express grant to the President of
a continuing authority to reorganize the administrative structure of the
Office of the President. The succeeding numbered paragraphs are not in the
nature of provisos that unduly limit the aim and scope of the grant to the
President of the power to reorganize but are to be viewed in consonance
therewith. Section 31(1) of Executive Order No. 292 specifically refers to the
Presidents power to restructure the internal organization of the Office of the
President Proper, by abolishing, consolidating or merging units hereof or
transferring functions from one unit to another, while Section 31(2) and (3)
concern executive offices outside the Office of the President Properallowing
the President to transfer any function under the Office of the President to any
other Department or Agency and vice-versa, and the transfer of any agency
under the Office of the President to any other department or agency and viceversa.
[14]

In the present instance, involving neither an abolition nor transfer of

offices, the assailed action is a mere reorganization under the general
provisions of the law consisting mainly ofstreamlining the NTA in the interest
of simplicity, economy and efficiency. It is an act well within the authority of
President motivated and carried out, according to the findings of the appellate
court, in good faith, a factual assessment that this Court could only but accept.
[15]

In passing, relative to petitioners Motion for an En Banc Resolution of the

Case, it may be well to remind counsel, that the Court En Banc is not an
appellate tribunal to which appeals from a Division of the Court may be
taken. A Division of the Court is the Supreme Court as fully and veritably as
the Court En Banc itself and a decision of its Division is as authoritative and
final as a decision of the Court En Banc. Referrals of cases from a Division to
the Court En Banc do not take place as just a matter of routine but only on
such specified grounds as the Court in its discretion may allow.
[16]

WHEREFORE, the Motion to Admit Petition for En Banc resolution and the
Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of
judgment be made in due course. No costs.

SO ORDERED.

[G.R. No. 142283. February 6, 2003]

ROSA LIGAYA C. DOMINGO, ROMEO M. FERNANDEZ, VICTORIA S.

ESTRADA, JULIETA
C.
FAJARDO, ADELAIDA
B.
GAWIRAN, MARCIANO
M.
SERVO, VICTORIA
S.
DAOANG, FELICIANO
N.
TOLEDO
III, JAYNELYN
D.
FLORES, MA.
LIZA
B.
LLOREN,
ROMELIA
A.
CONTAPAY, MARIVIC
B.
TOLITOL, PAZ
LEVITA
G.
VILLANUEVA, EDITHA C. HERNANDEZ, JOSE HERNANDEZ,
JR., VERONICA C. BELLES, AMELITA S. BUCE,MERCELITA C.
MARANAN,
CRISTITUTO
C.
LLOREN, HERNANDO
M.
EVANGELISTA, and CARLOS BACAY, JR., petitioners, vs. HON.
RONALDO D. ZAMORA, in his capacity as the Executive
Secretary, HON. ANDREW B. GONZALES, in his capacity as the
Secretary of Education, and HON. CARLOS D. TUASON, in his
capacity as the Chairman of the Philippine Sports
Commission, respondents.
DECISION
CARPIO, J.:

The Case
This is a petition for certiorari and prohibition with prayer for temporary
restraining order seeking to nullify Executive Order No. 81 and
Memoranda Nos. 01592 and 01594. The assailed executive order transferred
the sports development programs and activities of the Department of
Education, Culture and Sports (DECS for brevity) to the Philippine Sports
Commission (PSC for brevity). The questioned memoranda (DECS
Memoranda for brevity), on the other hand, reassigned all Bureau of Physical
Education and School Sports (BPESS for brevity) personnel named in the
DECS Memoranda to various offices within the DECS.
[1]

[2]

The Facts
On March 5, 1999, former President Joseph E. Estrada issued Executive
Order No. 81 (EO 81 for brevity) entitled Transferring the Sports Programs
and Activities of the Department of Education, Culture and Sports to the
[3]

Philippine Sports Commission and Defining the Role of DECS in SchoolBased Sports.
EO 81 provided thus:
Section 1. Transferring the Sports Program and Activities to the PSC. All the
functions, programs and activities of DECS related to sports development as provided
for in Sec. 16 of EO 117 (s. 1987) are hereby transferred to PSC.
Section 2. Defining the Role of DECS in School-Based Sports. The DECS shall have
jurisdiction and function over the enhancement of Physical Education (P.E.)
curriculum and its application in whatever form inside schools.
Section 3. The Role of PSC. As the primary agency tasked to formulate policies and
oversee the national sports development program, the management and
implementation of all school-based sports competitions among schools at the district,
provincial, regional, national and international levels, in coordination with concerned
public and private entities shall be transferred to the PSC.
Pursuant to EO 81, former DECS Secretary Andrew B. Gonzales
(Secretary Gonzales for brevity) issued Memorandum No. 01592 on January
10, 2000. Memorandum No. 01592 temporarily reassigned, in the exigency of
the service, all remaining BPESS Staff to other divisions or bureaus of the
DECS effective March 15, 2000.
On January 21, 2000, Secretary Gonzales issued Memorandum No.
01594 reassigning the BPESS staff named in the Memorandum to various
offices within the DECS effective March 15, 2000. Petitioners were among the
BPESS personnel affected by Memorandum No. 01594. Dissatisfied with their
reassignment, petitioners filed the instant petition.
In their Petition, petitioners argue that EO 81 is void and unconstitutional
for being an undue legislation by President Estrada. Petitioners maintain that
the Presidents issuance of EO 81 violated the principle of separation of
powers. Petitioners also challenge the DECS Memoranda for violating their
right to security of tenure.
Petitioners seek to nullify EO 81 and the DECS Memoranda. Petitioners
pray that this Court prohibit the PSC from performing functions related to
school sports development. Petitioners further pray that, upon filing of the

petition, this Court issue a temporary restraining order against respondents to

desist from implementing EO 81.
During the pendency of the case, Republic Act No. 9155 (RA 9155 for
brevity), otherwise known as the Governance of Basic Education Act of 2001,
was enacted on August 11, 2001.RA 9155 expressly abolished the BPESS
and transferred the functions, programs and activities of the DECS relating to
sports competition to the PSC. The pertinent provision thereof reads:
SEC. 9. Abolition of BPESS. All functions, programs and activities of the Department
of Education related to sports competition shall be transferred to the Philippine Sports
Commission (PSC). The Program for school sports and physical fitness shall remain
part of the basic education curriculum.
The Bureau of Physical Education and School Sports (BPESS) is hereby
abolished. The personnel of the BPESS, presently detailed with the PSC, are hereby
transferred to the PSC without loss of rank, including the plantilla positions they
occupy. All other BPESS personnel shall be retained by the Department.
The Issue
The issue to resolve is whether EO 81 and the DECS Memoranda are
valid.
The Courts Ruling
We dismiss this petition for being moot and academic.
As manifested by both petitioners and respondents, the subsequent
enactment of RA 9155 has rendered the issues in the present case moot and
academic. Since RA 9155 abolished the BPESS and transferred the DECS
functions relating to sports competition to the PSC, petitioners now admit
that it is no longer plausible to raise any ultra vires assumption by the PSC of
the functions of the BPESS. Moreover, since RA 9155 provides that BPESS
personnel not transferred to the PSC shall be retained by the DECS,
petitioners now accept that the law explicitly protects and preserves their
right to security of tenure.
[4]

[5]

[6]

[7]

Although the issue is already academic, its significance constrains the

Court to point out that Executive Order No. 292 (EO 292 for brevity),

otherwise known as the Administrative Code of 1987, expressly grants the

President continuing authority to reorganize the Office of the
President. Section 31 of EO 292 provides:
SEC. 31. Continuing Authority of the President to Reorganize his Office. The
President, subject to the policy in the Executive Office and in order to achieve
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 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. (Emphasis supplied.)
Since EO 81 is based on the Presidents continuing authority under
Section 31 (2) and (3) of EO 292, EO 81 is a valid exercise of the Presidents
delegated power to reorganize the Office of the President. The law grants the
President this power in recognition of the recurring need of every President to
reorganize his office to achieve simplicity, economy and efficiency. The Office
of the President is the nerve center of the Executive Branch. To remain
effective and efficient, the Office of the President must be capable of being
shaped and reshaped by the President in the manner he deems fit to carry out
his directives and policies. After all, the Office of the President is the
command post of the President. This is the rationale behind the Presidents
continuing authority to reorganize the administrative structure of the Office of
the President.
[8]

Petitioners contention that the DECS is not part of the Office of the
President is immaterial. Under EO 292, the DECS is indisputably a
Department of the Executive Branch. Even if the DECS is not part of the
Office of the President, Section 31 (2) and (3) of EO 292 clearly authorizes the

President to transfer any function or agency of the DECS to the Office of the
President. Under its charter, the PSC is attached to the Office of the
President. Therefore, the President has the authority to transfer the functions,
programs and activities of DECS related to sports development to the PSC,
making EO 81 a valid presidential issuance.
[9]

[10]

However, the Presidents power to reorganize the Office of the President

under Section 31 (2) and (3) of EO 292 should be distinguished from his
power to reorganize the Office of the President Proper. Under Section 31 (1)
of EO 292, the President can reorganize the Office of the
President Proper by abolishing, consolidating or merging units, or
by transferringfunctions from one unit to another. In contrast, under Section
31 (2) and (3) of EO 292, the Presidents power to reorganize offices outside
the Office of the President Proper but still within the Office of the President is
limited to merely transferring functions or agencies from the Office of the
President to Departments or Agencies, and vice versa.
This distinction is crucial as it affects the security of tenure of
employees. The abolition of an office in good faith necessarily results in the
employees cessation in office, but in such event there is no dismissal or
separation because the office itself ceases to exist. On the other hand, the
transfer of functions or agencies does not result in the employees cessation in
office because his office continues to exist although in another department,
agency or office. In the instant case, the BPESS employees who were not
transferred to PSC were at first temporarily, then later permanently reassigned
to other offices of the DECS, ensuring their continued employment. At any
rate, RA 9155 now mandates that these employees shall be retained by the
Department.
[11]

WHEREFORE, the instant petition is DISMISSED. No pronouncement as

to costs.
SO ORDERED.