Ftr65fG.R. No.

120319 October 6, 1995

LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER
S. GARCIA in her capacity as VOLUNTARY ARBITRATOR, respondents.

ROMERO, J.:

From a submission agreement of the Luzon Development Bank (LDB) and the Association of
Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the
following issue:

Whether or not the company has violated the Collective Bargaining Agreement
provision and the Memorandum of Agreement dated April 1994, on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers on
December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its
Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of
May 23, 1995 no Position Paper had been filed by LDB.

On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the
Collective Bargaining Agreement provision nor the Memorandum of Agreement on
promotion.

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.

In labor law context, arbitration is the reference of a labor dispute to an impartial third person
for determination on the basis of evidence and arguments presented by such parties who have
bound themselves to accept the decision of the arbitrator as final and binding.

Arbitration may be classified, on the basis of the obligation on which it is based, as either
compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of their
dispute through arbitration by a third party. 1The essence of arbitration remains since a
resolution of a dispute is arrived at by resort to a disinterested third party whose decision is final
and binding on the parties, but in compulsory arbitration, such a third party is normally
appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made,
pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third
person for a final and binding resolution. 2Ideally, arbitration awards are supposed to be
complied with by both parties without delay, such that once an award has been rendered by an
arbitrator, nothing is left to be done by both parties but to comply with the same. After all, they
are presumed to have freely chosen arbitration as the mode of settlement for that particular
dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and
decide their case. Above all, they have mutually agreed to de bound by said arbitrator's decision.

In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required
to include therein provisions for a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. 3 For this purpose,
parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of
arbitrators, or include a procedure for their selection, preferably from those accredited by the
National Conciliation and Mediation Board (NCMB). Article 261 of the Labor Code
accordingly provides for exclusive original jurisdiction of such voluntary arbitrator or panel of
arbitrators over (1) the interpretation or implementation of the CBA and (2) the interpretation or
enforcement of company personnel policies. Article 262 authorizes them, but only upon
agreement of the parties, to exercise jurisdiction over other labor disputes.

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

. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar
days after the submission of the case by the parties for decision without extension,
even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.

xxx xxx xxx

It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of
such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the National Labor Relations Commission (NLRC) for that
matter. 4 The state of our present law relating to voluntary arbitration provides that "(t)he award
or decision of the Voluntary Arbitrator . . . shall be final and executory after ten (10) calendar
days from receipt of the copy of the award or decision by the parties," 5 while the "(d)ecision,
awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions,
awards, or orders." 6 Hence, while there is an express mode of appeal from the decision of a
labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the decision of a
voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than
not, elevated to the Supreme Court itself on a petition for certiorari, 7 in effect equating the
voluntary arbitrator with the NLRC or the Court of Appeals. In the view of the Court, this is
illogical and imposes an unnecessary burden upon it.

In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of
courts and awards of quasi-judicial agencies must become final at some definite time, this Court
ruled that the awards of voluntary arbitrators determine the rights of parties; hence, their
decisions have the same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et
al. v. Romero, et al., 9 this Court ruled that "a voluntary arbitrator by the nature of her functions

xxx xxx xxx Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-judicial agency. and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. it follows that the voluntary arbitrator." with respect to a state. board or commission. 129. except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution. 12 Thus. as amended by Republic Act No. including the Securities and Exchange Commission. An "instrumentality" is anything used as a means or agency. contemplates an authority to which the state delegates governmental power for the performance of a state function. as well as the subsequent arbitrator/arbitral tribunal operating under the Construction Industry Arbitration Commission. 7902. 14 An individual person. the terms governmental "agency" or "instrumentality" are synonymous in the sense that either of them is a means by which a government acts. and apart from. provides that the Court of Appeals shall exercise: xxx xxx xxx (B) Exclusive appellate jurisdiction over all final judgments. instrumentalities. the Labor Code of the Philippines under Presidential Decree No. still both he and the panel are comprehended within the concept of a "quasi-judicial instrumentality. resolutions.acts in a quasi-judicial capacity. 15 in the same manner that a sub-agent appointed by a bankruptcy court is an instrumentality of the court. whether acting solely or in a panel. 11 that the broader term "instrumentalities" was purposely included in the above-quoted provision.P. as amended. enjoys in law the status of a quasi-judicial agency but independent of. the provisions of this Act. orders or awards of Regional Trial Courts and quasi-judicial agencies. therefore. 442. the Employees Compensation Commission and the Civil Service Commission. decisions." Under these rulings. within . 16 and a trustee in bankruptcy of a defunct corporation is an instrumentality of the state." It may even be stated that it was to meet the very situation presented by the quasi-judicial functions of the voluntary arbitrators here. is a judicial instrumentality in the settling of an estate. 13 The word "instrumentality. the NLRC since his decisions are not appealable to the latter. 17 The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions therefor in the Labor Code and he falls. like an administrator or executor. or by which a certain government act or function is performed. 10 Section 9 of B. boards or commissions. Blg.

P. Circular No. It will be noted that. although the Employees Compensation Commission is also provided for in the Labor Code. ACCORDINGLY. 19 In effect. . SO ORDERED. precisely. A fortiori. This would be in furtherance of. 9 of B. As a matter of policy. and this was later adopted by Republic Act No. The fact that his functions and powers are provided for in the Labor Code does not place him within the exceptions to said Sec. the original purpose of Circular No. 1-95. 1-95.the contemplation of the term "instrumentality" in the aforequoted Sec. or if none be specified. at any time within one (1) month after an award is made. the Court resolved to REFER this case to the Court of Appeals. which is the forerunner of the present Revised Administrative Circular No. or in which the arbitration is held. 9 of B. Consequently. and consistent with. it is worth mentioning that under Section 22 of Republic Act No. 129. 7902 in amending Sec. laid down the procedure for the appealability of its decisions to the Court of Appeals under the foregoing rationalization. A party to the controversy may. this Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition. shall have jurisdiction. 129 by either the Constitution or another statute. also known as the Arbitration Law. 129. just like those of the quasi-judicial agencies. in line with the procedure outlined in Revised Administrative Circular No. arbitration is deemed a special proceeding of which the court specified in the contract or submission. the Regional Trial Court for the province or city in which one of the parties resides or is doing business.P. 9 since he is a quasi-judicial instrumentality as contemplated therein. apply to the court having jurisdiction for an order confirming the award and the court must grant such order unless the award is vacated. Nor will it run counter to the legislative intendment that decisions of the NLRC be reviewable directly by the Supreme Court since. 876. this equates the award or decision of the voluntary arbitrator with that of the regional trial court. modified or corrected. 1-91 to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities 18 not expressly excepted from the coverage of Sec. boards and commissions enumerated therein.P. In the same vein. the Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. in a petition for certiorari from that award or decision. 9 of B. the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals. 1-91. the cases within the adjudicative competence of the voluntary arbitrator are excluded from the jurisdiction of the NLRC or the labor arbiter.

.

The objectives of the ISA are spelled out in the following terms: Sec. (e) to assist the industry in securing adequate and low-cost supplies of raw materials and to reduce the excessive dependence of the country on imports of iron and steel. Objectives — The Authority shall have the following objectives: (a) to strengthen the iron and steel industry of the Philippines and to expand the domestic and export markets for the products of the industry.: Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P. with appropriate government agencies to encourage capital investment in priority areas of the industry. and the public at large.D. respondents. 1995 IRON AND STEEL AUTHORITY. consumers suppliers. (c) to rationalize the marketing and distribution of steel products in order to achieve a balance between demand and supply of iron and steel products for the country and to ensure that industry prices and profits are at levels that provide a fair balance between the interests of investors. generally. (d) to promote full utilization of the existing capacity of the industry. FELICIANO.G. (b) to promote the consolidation. THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION. integration and rationalization of the industry in order to increase industry capability and viability to service the domestic market and to compete in international markets. The list of powers and functions of the ISA included the following: . 272 dated 9 August 1973 in order. to discourage investment in excess capacity.R. No. J. and in coordination. 2.) No. to develop and promote the iron and steel industry in the Philippines. petitioner. 102976 October 25. vs.

555 dated 31 August 1979. Sec. No. 2239 was issued by the President of the Philippines on 16 November 1982 withdrawing from sale or settlement a large tract of public land (totalling about 30. and reserving that land for the use and immediate occupancy of NSC. xxx xxx xxx (Emphasis supplied) P. its term was extended for another ten (10) years by Executive Order No. petitioner ISA was to exercise its power of eminent domain under P. Proclamation No. No. for and on behalf of the Government. 1277. Pursuant to the expansion program of the NSC. 4. 2 . 272 and to initiate expropriation proceedings in respect of occupancy rights of private respondent MCFC relating to the subject public land as well as the plant itself and related facilities and to cede the same to the NSC.D. for the compensation of MCFC's present occupancy rights on the subject land. 1277. Letter of Instruction (LOI). 1 When ISA's original term expired on 10 October 1978.D. 2239 were occupied by a non-operational chemical fertilizer plant and related facilities owned by private respondent Maria Cristina Fertilizer Corporation ("MCFC"). 1277 also directed that should NSC and private respondent MCFC fail to reach an agreement within a period of sixty (60) days from the date of LOI No. Powers and Functions. also dated 16 November 1982. among other things. embarked on an expansion program embracing. The construction of such a steel mill was considered a priority and major industrial project of the Government. The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National Development Corporation which is itself an entity wholly owned by the National Government." LOI No. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August 1973. the construction of an integrated steel mill in Iligan City. — The authority shall have the following powers and functions: xxx xxx xxx (j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease to the companies involved if it is shown that such use of the State's power is necessary to implement the construction of capacity which is needed for the attainment of the objectives of the Authority.25 hectares in area) located in Iligan City. was issued directing the NSC to "negotiate with the owners of MCFC. Since certain portions of the public land subject matter Proclamation No.

760. according to newspaper reports. 4 Petitioner ISA moved for reconsideration of the trial court's Order. While the trial was ongoing." 3 The trial court also referred to non-compliance by petitioner ISA with the requirements of Section 16. MCFC then filed a motion to dismiss. the statutory existence of petitioner ISA expired on 11 August 1988. The trial court denied the motion for reconsideration. its juridical existence continued until the winding up of its affairs could be completed. On 17 September 1983. was also impleaded as party-defendant. the trial court granted MCFC's motion to dismiss and did dismiss the case. The Philippine National Bank. In an Order dated 9 November 1988. praying that it (ISA) be places in possession of the property involved upon depositing in court the amount of P1. contending that despite the expiration of its term. of Iligan City. In this connection. petitioner ISA urged that the Republic of the Philippines. Branch 1.69 representing ten percent (10%) of the declared market values of that property. a government controlled private corporation engaged in private business and for profit. contending that no valid judgment could be rendered against ISA which had ceased to be a juridical person. ISA in turn placed NSC in possession and control of the land occupied by MCFC's fertilizer plant installation. a writ of possession was issued by the trial court in favor of ISA.Negotiations between NSC and private respondent MCFC did fail. however. Accordingly. Rule 3 of the Rules of Court. The case proceeded to trial. being the real party-in-interest. In the alternative. should be allowed to be substituted for petitioner ISA. as mortgagee of the plant facilities and improvements involved in the expropriation proceedings. 5 (Brackets supplied) . among other things that: The property to be expropriated is not for public use or benefit [__] but for the use and benefit [__] of NSC. petitioner ISA commenced eminent domain proceedings against private respondent MCFC in the Regional Trial Court. on 18 August 1983. stating. ISA referred to a letter from the Office of the President dated 28 September 1988 which especially directed the Solicitor General to continue the expropriation case. is offering for sale to the public its [shares of stock] in the National Steel Corporation in line with the pronounced policy of the present administration to disengage the government from its private business ventures. Petitioner ISA filed its opposition to this motion. The dismissal was anchored on the provision of the Rules of Court stating that "only natural or juridical persons or entities authorized by law may be parties in a civil case.789. specially now that the government.

this is really the only issue which we must resolve at this time. unlike corporations organized under the Corporation Code. "a government regulatory agency exercising sovereign functions. the Republic." and that the authorization issued by the Office of the President to the Solicitor General for continued prosecution of the expropriation suit could not prevail over such negative intent. has to be dismissed without prejudice to the refiling of a new complaint for expropriation if the Congress sees it fit." (Emphases supplied) At the same time. It is also contended that the exercise of the eminent domain by ISA or the Republic is improper. ISA was "abolished and [had] no more legal authority to perform governmental functions. In this Petition for Review. and could not be continued in the name of Republic of the Philippines. and therefore." The principal issue which we must address in this case is whether or not the Republic of the Philippines is entitled to be substituted for ISA in view of the expiration of ISA's term. The Court of Appeals held that petitioner ISA.Petitioner went on appeal to the Court of Appeals. argues that the failure of Congress to enact a law further extending the term of ISA after 11 August 1988 evinced a "clear legislative intent to terminate the juridical existence of ISA. the ISA's exercise of its delegated authority to expropriate." did not have the same rights as an ordinary corporation and that the ISA. Rule 3. Section 1 of the Rules of Court specifies who may be parties to a civil action: . Private respondent MCFC. represented by the Solicitor General: It is our considered opinion that under the law. however. is entitled to be substituted and to be made a party-plaintiff after the agent ISA's term had expired. with the result that upon expiration of its term on 11 August 1987. the Solicitor General argues that since ISA initiated and prosecuted the action for expropriation in its capacity as agent of the Republic of the Philippines. the complaint cannot prosper. upon the other hand. considering that the parties had not yet rested their respective cases. since that power would be exercised "not on behalf of the National Government but for the benefit of NSC. In a Decision dated 8 October 1991. as principal of ISA. had become ineffective as a result of the delegate's dissolution. As will be made clear below." The Court of Appeals went on to say that the action for expropriation could not prosper because the basis for the proceedings. the Court of Appeals held that it was premature for the trial court to have ruled that the expropriation suit was not for a public purpose. was not entitled to a period for winding up its affairs after expiration of its legally mandated term. the Court of Appeals affirmed the order of dismissal of the trial court.

Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. Sec. as already noted. — Only natural or juridical persons or entities authorized by law may be parties in a civil action. P. Who May Be Parties. and when necessary. it will be seen that those who can be parties to a civil action may be broadly categorized into two (2) groups: (a) those who are recognized as persons under the law whether natural. Powers and Functions. or juridical person such as corporations. and to maintain inventories of such materials in order to insure a continuous and adequate supply thereof and thereby reduce operating costs of such sector. and (b) entities authorized by law to institute actions. xxx xxx xxx (Emphasis supplied) It should also be noted that the enabling statute of ISA expressly authorized it to enter into certain kinds of contracts "for and in behalf of the Government" in the following terms: xxx xxx xxx (i) to negotiate. — The Authority shall have the following powers and functions: xxx xxx xxx (j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease to the companies involved if it is shown that such use of the State's power is necessary to implement the construction of capacity which is needed for the attainment of the objectives of the Authority. i. supplies or services for any sectors in the industry. 1. for the bulk purchase of materials. Under the above quoted provision. 272. contains express authorization to ISA to commence expropriation proceedings like those here involved: Sec. 4. to enter into contracts for and in behalf of the government. on the other hand..e. on the one hand. biological persons. . No.D.

save as the contrary appears from the context. There is. or more precisely of the Government of the Republic of the Philippines. that is to say. including. sometimes with and at other times without capital stock. including a department. the provincial. — Unless the specific words of the text. municipal or barangay subdivisions or other forms of local government.D. xxx xxx xxx (Emphasis supplied) Clearly. city. No. or the context as a whole." The relevant definitions are found in the Administrative Code of 1987: Sec. and accordingly vested with a juridical personality distinct from the personality of the Republic. office. The Republic itself is a body corporate and juridical person vested with the full panoply of powers and attributes which are compendiously described as "legal personality. whether pertaining to the autonomous regions. ISA was vested with some of the powers or attributes normally associated with juridical personality. General Terms Defined. We consider that the ISA is properly regarded as an agent or delegate of the Republic of the Philippines. instrumentality. or a particular statute. 6 Philippine Ports Authority. . the various arms through which political authority is made effective in the Philippines. 2. It is worth noting that the term "Authority" has been used to designate both incorporated and non-incorporated agencies or instrumentalities of the Government. 9 Philippine National Railways. bureau. however. It is common knowledge that other agencies or instrumentalities of the Government of the Republic are cast in corporate form. 7 National Housing Authority. Among such incorporated agencies or instrumentalities are: National Power Corporation. 8 Philippine National Oil Company. or government-owned or controlled corporation. no provision in P. The ISA in fact appears to the Court to be a non-incorporated agency or instrumentality of the Republic of the Philippines. xxx xxx xxx (4) Agency of the Government refers to any of the various units of the Government. or a local government or a distinct unit therein. are incorporated agencies or instrumentalities. require a different meaning: (1) Government of the Republic of the Philippines refers to the corporate governmental entity through which the functions of government are exercised throughout the Philippines. 11 Philippine Virginia Tobacco Administration. 272 recognizing ISA as possessing general or comprehensive juridical personality separate and distinct from that of the Government. 10 Public Estates Authority. 12 and so forth.

in the charter of that agency and. The general rule is. etc. usually through a charter. The Rules of Court at the same time expressly recognize the role of representative parties: Sec. spelled out in the Rules of Court. xxx xxx xxx (10) Instrumentality refers to any agency of the National Government. the Republic of the Philippines. at least in part. . administering special funds. chartered institutions and government-owned or controlled corporations. ISA is a non-incorporated agency or instrumentality of the Republic. no special statutory provision having been shown to have mandated succession thereto by some other entity or agency of the Republic. functions. (Rule 3. The procedural implications of the relationship between an agent or delegate of the Republic of the Philippines and the Republic itself are. Section 2) Petitioner ISA was. that an action must be prosecuted and defended in the name of the real party in interest.. having been explicitly authorized by its enabling statute to institute expropriation proceedings. — A trustee of an expressed trust. not integrated within the department framework. order such beneficiary to be made a party.g. its powers. (Emphasis supplied) . 3. at any stage of the proceedings. functions. endowed with some if not all corporate powers. and are re-assumed by. by way of supplementation. e. in the provisions of the Corporation Code. a guardian. at the commencement of the expropriation proceedings. When the expiring agency is an incorporated one. vested with special functions or jurisdiction by law. . a real party in interest. the consequences of such expiry must be looked for. in the instant case. an executor or administrator. or a party authorized by statute may sue or be sued without joining the party for whose benefit the action is presented or defended. devolution or transmission of such powers. . and enjoying operational autonomy. but the court may. Representative Parties. of course. the powers. xxx xxx xxx (Emphases supplied) When the statutory term of a non-incorporated agency expires. in the first instance. This term includes regulatory agencies. in the absence of special provisions of law specifying some other disposition thereof such as. duties. . Since. duties. duties and functions as well as the assets and liabilities of that agency revert back to. assets and liabilities are properly regarded as folded back into the Government of the Republic of the Philippines and hence assumed once again by the Republic. to some other identified successor agency or instrumentality of the Republic of the Philippines.

Marcha. Inc. on motion of any party or on the court's own initiative at any stage of the action and on such terms as are just. The present expropriation suit was brought on behalf of and for the benefit of the Republic as the principal of ISA. . urgently needs the subject parcels of land for the construction and installation of iron and steel manufacturing facilities that are indispensable to the integration of the iron and steel making industry which is vital to the promotion of public interest and welfare. a government agency vested with a separate juridical personality.In the instant case. the Republic of the Philippines acted as principal of the Philippine Ports Authority. From the foregoing premises. No.D. It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of ISA's statutory term. Marcha Transport Company. . . 272. The Court said: It can be said that in suing for the recovery of the rentals. the Republic has precisely moved to take over the proceedings as party-plaintiff. Intermediate Appellate Court.B. thru the plaintiff ISA.B. The Government. Put a little differently. 13 In the instant case. 14 the Court recognized that the Republic may initiate or participate in actions involving its agents. ISA instituted the expropriation proceedings in its capacity as an agent or delegate or representative of the Republic of the Philippines pursuant to its authority under P. as the trial court and Court of Appeals had required. In E. Paragraph 7 of the complaint stated: 7. was not a ground for dismissal of such proceedings since a party may be dropped or added by order of the court. (Emphasis supplied) The principal or the real party in interest is thus the Republic of the Philippines and not the National Steel Corporation. v. directly exercising the commission it had earlier conferred on the latter as its agent. the Court also stressed that to require the Republic to commence all over again another proceeding. it follows that the Republic of the Philippines is entitled to be substituted in the expropriation proceedings as party-plaintiff in lieu of ISA. the statutory term of ISA having expired. even though the latter may be an ultimate user of the properties involved should the condemnation suit be eventually successful. was to generate unwarranted delay and create needless repetition of proceedings: . There the Republic of the Philippines was held to be a proper party to sue for recovery of possession of property although the "real" or registered owner of the property was the Philippine Ports Authority. 15 (Emphasis supplied) In E. the expiration of ISA's statutory term did not by itself require or justify the dismissal of the eminent domain proceedings.

More importantly, as we see it, dismissing the complaint on the ground that the
Republic of the Philippines is not the proper party would result in needless delay
in the settlement of this matter and also in derogation of the policy against
multiplicity of suits. Such a decision would require the Philippine Ports Authority
to refile the very same complaint already proved by the Republic of the Philippines
and bring back as it were to square one. 16 (Emphasis supplied)

As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the
Philippines for the ISA upon the ground that the action for expropriation could not prosper
because the basis for the proceedings, the ISA's exercise of its delegated authority to
expropriate, had become legally ineffective by reason of the expiration of the statutory term of
the agent or delegated i.e., ISA. Since, as we have held above, the powers and functions of ISA
have reverted to the Republic of the Philippines upon the termination of the statutory term of
ISA, the question should be addressed whether fresh legislative authority is necessary before the
Republic of the Philippines may continue the expropriation proceedings initiated by its own
delegate or agent.

While the power of eminent domain is, in principle, vested primarily in the legislative
department of the government, we believe and so hold that no new legislative act is necessary
should the Republic decide, upon being substituted for ISA, in fact to continue to prosecute the
expropriation proceedings. For the legislative authority, a long time ago, enacted a continuing or
standing delegation of authority to the President of the Philippines to exercise, or cause the
exercise of, the power of eminent domain on behalf of the Government of the Republic of the
Philippines. The 1917 Revised Administrative Code, which was in effect at the time of the
commencement of the present expropriation proceedings before the Iligan Regional Trial Court,
provided that:

Sec. 64. Particular powers and duties of the President of the Philippines. — In
addition to his general supervisory authority, the President of the Philippines shall
have such other specific powers and duties as are expressly conferred or imposed
on him by law, and also, in particular, the powers and duties set forth in this
Chapter.

Among such special powers and duties shall be:

xxx xxx xxx

(h) To determine when it is necessary or advantageous to exercise the right of
eminent domain in behalf of the Government of the Philippines; and to direct the
Secretary of Justice, where such act is deemed advisable, to cause the

condemnation proceedings to be begun in the court having proper jurisdiction.
(Emphasis supplied)

The Revised Administrative Code of 1987 currently in force has substantially reproduced
the foregoing provision in the following terms:

Sec. 12. Power of eminent domain. — The President shall determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of
the National Government, and direct the Solicitor General, whenever he deems the
action advisable, to institute expopriation proceedings in the proper court.
(Emphasis supplied)

In the present case, the President, exercising the power duly delegated under both the
1917 and 1987 Revised Administrative Codes in effect made a determination that it was
necessary and advantageous to exercise the power of eminent domain in behalf of the
Government of the Republic and accordingly directed the Solicitor General to proceed
with the suit. 17

It is argued by private respondent MCFC that, because Congress after becoming once more the
depository of primary legislative power, had not enacted a statute extending the term of ISA,
such non-enactment must be deemed a manifestation of a legislative design to discontinue or
abort the present expropriation suit. We find this argument much too speculative; it rests too
much upon simple silence on the part of Congress and casually disregards the existence of
Section 12 of the 1987 Administrative Code already quoted above.

Other contentions are made by private respondent MCFC, such as, that the constitutional
requirement of "public use" or "public purpose" is not present in the instant case, and that the
indispensable element of just compensation is also absent. We agree with the Court of Appeals
in this connection that these contentions, which were adopted and set out by the Regional Trial
Court in its order of dismissal, are premature and are appropriately addressed in the proceedings
before the trial court. Those proceedings have yet to produce a decision on the merits, since trial
was still on going at the time the Regional Trial Court precipitously dismissed the expropriation
proceedings. Moreover, as a pragmatic matter, the Republic is, by such substitution as party-
plaintiff, accorded an opportunity to determine whether or not, or to what extent, the
proceedings should be continued in view of all the subsequent developments in the iron and
steel sector of the country including, though not limited to, the partial privatization of the NSC.

WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October
1991 to the extent that it affirmed the trial court's order dismissing the expropriation
proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the

court a quo which shall allow the substitution of the Republic of the Philippines for petitioner
Iron and Steel Authority and for further proceedings consistent with this Decision. No
pronouncement as to costs.

SO ORDERED.

INC.R. against the petitioner. 1 . attorney's fees and the costs of the suit. for the agreed price of P 28. TERESITA PAYAWAL and COURT OF APPEALS. the return of all the amounts paid by her plus interest. The motion was denied.: We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the Regional Trial Court of Quezon City over a complaint filed by a buyer.00 exemplary damages.000. by Teresita Payawal against Solid Homes.. this being vested in the National Housing Authority under PD No. The defendant repleaded the objection in its answer. and the costs of the suit.00 moral damages. Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction. judgment was rendered in favor of the plaintiff and the defendant was ordered to deliver to her the title to the land or.00 attorney's fees.000. J. CRUZ.00.949. alternatively. She also claimed moral and exemplary damages. The complaint was filed on August 31. the defendant in that action. as it appeared later. respondents. The plaintiff alleged that the defendant contracted to sell to her a subdivision lot in Marikina on June 9. The plaintiff asked for delivery of the title to the lot or. The position of the petitioner." After trial. P 10. Inc. before the Regional Trial Court of Quezon City and docketed as Civil Case No. for delivery of title to a subdivision lot. to refund to her the sum of P 38.000. P 5. she had already paid the defendant the total amount of P 38.949. the defendant had mortgaged the property in bad faith to a financing company. failing this. 1981.080.87 in monthly installments and interests. is that the decision of the trial court is null and void ab initio because the case should have been heard and decided by what is now called the Housing and Land Use Regulatory Board. 1975. 957. the herein private respondent. Q-36119. vs. Solid Homes subsequently executed a deed of sale over the land but failed to deliver the corresponding certificate of title despite her repeated demands because. No. 1989 SOLID HOMES. 1982. She was also awarded P 5. citing Section 3 of the said decree providing that "the National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. 84811 August 29. and that by September 10.G. petitioner.87 plus interest from 1975 and until the full amount was paid.

developer. 41. broker or salesman. developer. including its dilatory tactics during the trial. The applicable law is PD No. as amended by PD No. dealer. and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that the court a quo was bereft of jurisdiction. the respondent court referred to Section 41 of PD No. Unsound real estate business practices. we nevertheless must sustain it on the jurisdictional issue. B. 1344. and C. In the exercise of its function to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. dealer. 957. (Emphasis supplied.238. In holding that the trial court had jurisdiction. 957 itself providing that: SEC. entitled "Empowering the National Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under Presidential Decree No. The petitioner was also reproved for its "gall" in collecting the further amount of P 1. 957.Solid Homes appealed but the decision was affirmed by the respondent court. 957. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner. Other remedies. While we are disturbed by the findings of fact of the trial court and the respondent court on the dubious conduct of the petitioner.47 from the plaintiff purportedly for realty taxes and registration expenses despite its inability to deliver the title to the land." The decision also dismissed the contrary opinion of the Secretary of Justice as impinging on the authority of the courts of justice. broker or salesman.-The rights and remedies provided in this Decree shall be in addition to any and all other rights and remedies that may be available under existing laws." Section 1 of the latter decree provides as follows: SECTION 1. Cases involving specific performance of contractuala statutory obligations filed by buyers of subdivision lot or condominium unit against the owner.) . 2 which also berated the appellant for its obvious efforts to evade a legitimate obligation.

000.00). Municipal Trial Courts. amounts to more than twenty thousand pesos (P 20. after PD No. additionally. real property.The language of this section. 19. the latter must prevail regardless of the dates of their enactment. or possession of. This construction must yield to the familiar canon that in case of conflict between a general law and a special law. 957 was issued in 1975 and PD No. original jurisdiction over which is conferred upon Metropolitan Trial Courts. 1344 in 1978. except actions for forcible entry into and unlawful detainer of lands or buildings. exclusive of interest and cost or the value of the property in controversy. 129. 4 xxx xxx xxx . having been promulgated in 1981. it has been held that- The fact that one law is special and the other general creates a presumption that the special act is to be considered as remaining an exception of the general act. 3 The private respondent contends that the applicable law is BP No. Thus. which confers on regional trial courts jurisdiction to hear and decide cases mentioned in its Section 19. reading in part as follows: SEC. Jurisdiction in civil cases. xxx xxx xxx (8) In all other cases in which the demand. especially the italicized portions. (2) In all civil actions which involve the title to.-Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation. It stresses. and Municipal Circuit Trial Courts. leaves no room for doubt that "exclusive jurisdiction" over the case between the petitioner and the private respondent is vested not in the Regional Trial Court but in the National Housing Authority. 129 should control as the later enactment. or any interest therein. one as a general law of the land and the other as the law of the particular case. that BP No.

is also unacceptable. or a qualification of." It was therefore erroneous for the respondent to brush aside the well-taken opinion of the Secretary of Justice that- Such claim for damages which the subdivision/condominium buyer may have against the owner. sufficiently broad to include any and all claims which are incidental to or a necessary consequence of the claims/cases specifically included in the grant of jurisdiction to the National Housing Authority under the subject provisions. dealer or salesman. dealer. Where the special law is later. we believe. just and demandable claim. as we see it. 1344 if only because grants of power are not to be lightly inferred or merely implied. broker or salesman. 6 On the competence of the Board to award damages. developer. xxx xxx xxx . being a necessary consequence of an adjudication of liability for non-performance of contractual or statutory obligation. may be deemed necessarily included in the phrase "claims involving refund and any other claims" used in the aforequoted subparagraph C of Section 1 of PD No. The phrase "any other claims" is. The same may be said with respect to claims for attorney's fees which are recoverable either by agreement of the parties or pursuant to Art. developer. 129 and PD No. 2208 of the Civil Code (1) when exemplary damages are awarded and (2) where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff 's plainly valid. 5 It is obvious that the general law in this case is BP No. 1344. unless repealed expressly or by necessary implication. 957. the special statute will be construed as remaining an exception to its terms. we find that this is part of the exclusive power conferred upon it by PD No. is to reserve. 1344 the special law. like a prosecution for the act complained of under the Revised Penal Code. The only purpose of this section. We do not read that provision as vesting concurrent jurisdiction on the Regional Trial Court and the Board over the complaint mentioned in PD No. 1344 to hear and decide "claims involving refund and any other claims filed by subdivision lot or condominium unit buyers against the project owner. earlier quoted. the prior general act. to the aggrieved party such other remedies as may be provided by existing law. and where the general act is later. The argument that the trial court could also assume jurisdiction because of Section 41 of PD No. it will be regarded as an exception to. The circumstance that the special law is passed before or after the general act does not change the principle.

8 Following this policy in Antipolo Realty Corporation v. without prejudice to the filing of the appropriate complaint before the Housing and Land Use Regulatory Board.) 7 As a result of the growing complexity of the modern society. National Housing Authority. 12which does not appear in the case before us. We have no choice. which continued to plead it in its answer and. they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice. Q-36119 is SET ASIDE. the case of Tropical Homes v. it has become necessary to create more and more administrative bodies to help in the regulation of its ramified activities. This is the reason for the increasing vesture of quasi-legislative and quasi-judicial powers in what is now not unreasonably called the fourth department of the government. 9 the Court sustained the competence of the respondent administrative body. National Housing Authority 10 is not in point. in the exercise of the exclusive jurisdiction vested in it by PD No. on appeal to the respondent court. On the contrary. Besides. a situation which is obviously not in the contemplation of the law. We upheld in that case the constitutionality of the procedure for appeal provided for in PD No. 1344. the challenged decision of the respondent court is REVERSED and the decision of the Regional Trial Court of Quezon City in Civil Case No. . notwithstanding the delay this decision will entail. contrary to the contention of the petitioner. a strict construction of the subject provisions of PD No. the issue was raised as early as in the motion to dismiss filed in the trial court by the petitioner. therefore. WHEREFORE. to nullify the proceedings in the trial court for lack of jurisdiction. It remains to state that. 1344. (Emphasis supplied. to determine the rights of the parties under a contract to sell a subdivision lot. It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down at any time. That is what we are doing now. Specialized in the particular fields assigned to them. 11 The only exception is where the party raising the issue is barred by estoppel. later. 957 and PD No. 1344 which would deny the HSRC the authority to adjudicate claims for damages and for damages and for attorney's fees would result in multiplicity of suits in that the subdivision condominium buyer who wins a case in the HSRC and who is thereby deemed entitled to claim damages and attorney's fees would be forced to litigate in the regular courts for the purpose. even on appeal before this Court. No costs. Statutes conferring powers on their administrative agencies must be liberally construed to enable them to discharge their assigned duties in accordance with the legislative purpose. but we did not rule there that the National Housing Authority and not the Regional Trial Court had exclusive jurisdiction over the cases enumerated in Section I of the said decree.

.SO ORDERED.

85. IGNACIO.R.000. inclusive of interest at 24% per annum. (CGA) prays that we set aside the decision2 issued by the Court of Appeals (CA) in CA–G. 164789 August 27. INC. No. as well as the CA resolution3 that denied its motion for reconsideration. CGA entered into a Contract to Sell a subdivision lot4 (subject property) with the respondents – the registered owners and developers of a housing subdivision known as Villa Priscilla Subdivision located in Barangay Cutcut. starting June 1998.: We resolve in this Rule 45 petition the legal issue of whether an action to rescind a contract to sell a subdivision lot that the buyer found to be under litigation falls under the exclusive jurisdiction of the Housing and Land Use Regulatory Board (HLURB). it religiously paid the monthly installments until its administrative pastor discovered that the title covering the subject property suffered from fatal flaws and defects. CGA would pay P2.186.500.00 for the subject property on installment basis. Bulacan..00. 2000. calculated from the date of purchase and based on the increased total consideration of P2. In this petition. 2009 CHRISTIAN GENERAL ASSEMBLY. Inc. Petitioner. they were to pay a down payment of P1. . DECISION BRION. vs. Respondents. Under the Contract to Sell. The facts. On August 5. are not in dispute.373. with the balance payable within three years on equal monthly amortization payments of P46.R.615. inclusive of interest at 24% per annum.1 Christian General Assembly. Branch 14. Pulilan.706. the parties mutually agreed to amend the Contract to Sell to extend the payment period from three to five years.G. J. On April 30. 75717 that dismissed its complaint for rescission filed with the Regional Trial Court (RTC) of Bulacan for lack of jurisdiction. SPS.600. Bulacan. drawn from the records and outlined below. Malolos. with equal monthly installments of P37. SP No. AVELINO C. FACTUAL ANTECEDENTS The present controversy traces its roots to the case filed by CGA against the Spouses Avelino and Priscilla Ignacio (respondents) for rescission of their Contract to Sell before the RTC. 1998. starting September 2000. According to CGA.593. IGNACIO and PRISCILLA T.

is outside the HLURB’s jurisdiction. and Lot 2-G Bsd-04- 000829 awarded to Sison. Through the Court’s Resolution dated January 19.10 CGA claimed that the respondents fraudulently concealed the fact that the subject property was part of a property under litigation. and is not among the actions within the exclusive jurisdiction of the HLURB. 957 and PD No. On October 15. Imperial applied for the retention of five hectares of her land under Republic Act No. On appeal. CGA opposed the motion to dismiss. Pulilan. In its October 20. 2005 in G. the RTC issued an order denying the respondents’ motion to dismiss. 95712 and PD No. No. 2003 decision. the CA found merit in the respondents’ position and set the RTC order aside.1avvphi1 The respondents countered by filing a petition for certiorari with the CA. 1344. 957 and PD No. Understandably aggrieved after discovering these circumstances. thus. the Office of the President8 and the CA9 upheld the DAR Order. 27’s Operation Land Transfer. 1344. not specific performance. Imperial (Imperial) whose property in Cutcut. 6657.6 According to CGA. the Contract to Sell was a rescissible contract under Article 1381 of the Civil Code. The RTC held that the action for rescission of contract and damages due to the respondents’ fraudulent misrepresentation that they are the rightful owners of the subject property. order the respondents to return the amounts already paid. moral and exemplary damages. 1997 order (DAR Order). as specified by PD No. Adriano and Sison were former tenant-beneficiaries of Purificacion S. 1344. Contending that the CA committed reversible error. CGA filed a complaint against the respondents before the RTC on April 30. the CA ruled that the HLURB had exclusive jurisdiction over the subject matter of the complaint since it involved a contract to sell a subdivision lot based on the provisions of PD No. CGA asked the trial court to rescind the contract. including Lot 2-F previously awarded to Adriano. . claiming that the action is for rescission of contract. 2002. the respondents claimed that the case falls within the exclusive jurisdiction of the HLURB since it involved the sale of a subdivision lot. attorney’s fees and litigation expenses. 165650. we affirmed the DAR Order by denying the petition for review of the appellate decision.7 which the Department of Agrarian Reform (DAR) granted in its October 2. respectively. The DAR Order authorized Imperial to retain the farm lots previously awarded to the tenant-beneficiaries. Instead of filing an answer. free from all liens and encumbrances.R. and award actual.CGA learned that the subject property was actually part of two consolidated lots (Lots 2-F and 2-G Bsd-04-000829 [OLT]) that the respondents had acquired from Nicanor Adriano (Adriano) and Ceferino Sison (Sison). the CGA now comes before the Court asking us to overturn the CA decision and resolution.11 Citing PD No. 2002. the respondents filed a motion to dismiss asserting that the RTC had no jurisdiction over the case. Bulacan5 had been placed under Presidential Decree (PD) No.

1344 and PD No. In essence. enacted on July 12. respondents insist that since CGA’s case involves the sale of a subdivision lot. not by the parties’ consent or by their waiver in favor of a court that would otherwise have no jurisdiction over the subject matter or the nature of an action. Taking the opposing view. it falls under the HLURB’s exclusive jurisdiction. 1976. THE COURT’S RULING We find no merit in the petition and consequently affirm the CA decision. The jurisdiction of the tribunal over the subject matter or nature of an action is conferred only by law. 957. as set forth in PD No. the main issue we are asked to resolve is which of the two – the regular court or the HLURB – has exclusive jurisdiction over CGA’s action for rescission and damages. which is cognizable by the regular court. CGA argues that the CA erred - (1) in applying Article 1191 of the Civil Code for breach of reciprocal obligation. National Housing Corporation13 and other cited cases. and (2) in holding that the HLURB has exclusive jurisdiction over the petitioner’s action by applying Antipolo Realty Corp v. while the petitioner’s action is for the rescission of a rescissible contract under Article 1381 of the same Code. THE PETITION In its petition. 957. Development of the HLURB’s jurisdiction The nature of an action and the jurisdiction of a tribunal are determined by the material allegations of the complaint and the law governing at the time the action was commenced. the determination of whether the CGA’s cause of action falls under the jurisdiction of the HLURB necessitates a closer examination of the laws defining the HLURB’s jurisdiction and authority. PD No. the exclusive jurisdiction of the HLURB. As one of its "whereas clauses" states: . was intended to closely supervise and regulate the real estate subdivision and condominium businesses in order to curb the growing number of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators. is limited to cases involving specific performance and does not cover actions for rescission.14Thus. According to CGA.

957 granted the National Housing Authority (NHA) the "exclusive jurisdiction to regulate the real estate trade and business. Unsound real estate business practices. Rationale for HLURB’s extensive quasi-judicial powers . developer. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner. claims involving refund filed against project owners. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner. -The regulatory functions of the National Housing Authority pursuant to Presidential Decree Nos. the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. PD No. 1344 and other related laws are hereby transferred to the Commission [Human Settlements Regulatory Commission]. B. 1986. Section 8 of EO 648 provides: SECTION 8. dealers. 1216. 1978 to expand the jurisdiction of the NHA to include the following: SECTION 1. Executive Order No. developers. the HSRC was renamed as the HLURB. 957. x x x 11) Hear and decide cases of unsound real estate business practices. brokers. and cases of specific performance. developer. Transfer of Functions. 90 dated December 17. dealer. broker or salesman. and C. Pursuant to Executive Order No. Section 3 of PD No. x x x. reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators. 1981. broker or salesman. 648 (EO 648). 957. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 1344 was issued on April 2." Thereafter. and to pay real estate taxes. or salesmen. dated February 7. transferred the regulatory and quasi-judicial functions of the NHA to the Human Settlements Regulatory Commission (HSRC). dealer. Among these regulatory functions are: 1) Regulation of the real estate trade and business. such as failure to deliver titles to the buyers or titles free from liens and encumbrances.WHEREAS. and fraudulent sales of the same subdivision lots to different innocent purchasers for value.

developer. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner. Presidential Decree (P. In the cases that reached us. B.15 We explained the HLURB’s exclusive jurisdiction at length in Sps. 957. we have consistently ruled that the HLURB has exclusive jurisdiction over complaints arising from contracts between the subdivision developer and the lot buyer or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations to make the subdivision a better place to live in. The need for the scope of the regulatory authority thus lodged in the HLURB is indicated in the second. broker or salesman. Osea v. "The Subdivision And Condominium Buyers' Protective Decree. dealer. The extent to which the HLURB has been vested with quasi-judicial authority must also be determined by referring to the terms of P. broker or salesman. Ambrosio. 1. third and fourth preambular paragraphs of PD 957 which provide: . No. the extent to which an administrative agency may exercise its powers depends largely.) No.D. dealer. Unsound real estate business practices. the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957. developer." clarifies and spells out the quasi-judicial dimensions of the grant of jurisdiction to the HLURB in the following specific terms: SEC.16 where we said: Generally. on the provisions of the statute creating or empowering such agency." Section 3 of this statute provides: x x x National Housing Authority [now HLURB]. "Empowering The National Housing Authority To Issue Writ Of Execution In The Enforcement Of Its Decision Under Presidential Decree No. if not wholly. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner.D. .The surge in the real estate business in the country brought with it an increasing number of cases between subdivision owners/developers and lot buyers on the issue of the extent of the HLURB’s exclusive jurisdiction.The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. and C. 1344. 957.

The intention was aimed at providing for an appropriate government agency. the HLURB. The business of developing subdivisions and corporations being imbued with public interest and welfare. WHEREAS. any question arising from the exercise of that prerogative should be brought to the HLURB which has the technical know-how on the matter. and fraudulent sales of the same subdivision lots to different innocent purchasers for value. As observed in C.T. and other similar basic requirements. The provisions of PD 957 were intended to encompass all questions regarding subdivisions and condominiums. drainage. numerous reports reveal that many real estate subdivision owners. operators. and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads. and that penalties be imposed on fraudulent practices and manipulations committed in connection therewith. In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. or the need of the government to . such as failure to deliver titles to the buyers or titles free from liens and encumbrances. In the exercise of its powers. and to pay real estate taxes. developers. to which all parties aggrieved in the implementation of provisions and the enforcement of contractual rights with respect to said category of real estate may take recourse. lighting systems. is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. water systems.WHEREAS. This quasi-judicial function. Torres Enterprises. reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators. xxxx WHEREAS. thus endangering the health and safety of home and lot buyers. exercisable only by the regular courts. This ancillary power is no longer a uniquely judicial function. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. as it is called. sewerage. this state of affairs has rendered it imperative that the real estate subdivision and condominium businesses be closely supervised and regulated. Inc. v. the HLURB must commonly interpret and apply contracts and determine the rights of private parties under such contracts. This departure from the traditional allocation of governmental powers is justified by expediency. Hibionada: The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times.

D. has become well nigh indispensable. i. One thrust of the multiplication of administrative agencies is that the interpretation of contracts and the determination of private rights thereunder is no longer a uniquely judicial function. [Emphasis supplied. we have consistently held that the concerned administrative agency. As we said in Roxas v..] Another case – Antipolo Realty Corporation v. xxx In general. exercisable only by our regular courts. if not wholly on the provisions of the statute creating or empowering such agency. In other words. in 1984. does not automatically vest jurisdiction in the HLURB. In the exercise of such powers. We said: In this era of clogged court dockets. has jurisdiction over complaints aimed at compelling the subdivision developer to comply with its contractual and statutory obligations. xxx . 1344. the Court noted that ‘between the power lodged in an administrative body and a court. Thus. that all cases involving subdivision lots automatically fall under its jurisdiction. Court of Appeals: 18 In our view. the decisive element is the nature of the action as enumerated in Section 1 of P. the agency concerned must commonly interpret and apply contracts and determine the rights of private parties under such contracts. NHA17 – explained the grant of the HLURB’s expansive quasi-judicial powers. the National Housing Authority (NHA) before and now the HLURB. the quantum of judicial or quasi-judicial powers which an administrative agency may exercise is defined in the enabling act of such agency. On this matter. however.e. the extent to which an administrative entity may exercise such powers depends largely.respond swiftly and competently to the pressing problems of the modern world. the need for specialized administrative boards or commissions with the special knowledge. For an action to fall within the exclusive jurisdiction of the HLURB. subject to judicial review in case of grave abuse of discretion. the unmistakable trend has been to refer it to the former’.] Subdivision cases under the RTC’s jurisdiction The expansive grant of jurisdiction to the HLURB does not mean. the mere relationship between the parties. that of being subdivision owner/developer and subdivision lot buyer. experience and capability to hear and determine promptly disputes on technical matters or essentially factual matters. [Emphasis supplied.

we held in Pilar Development Corporation v. in the cases of Fajardo Jr.. in Spouses Dela Cruz v. The only instance that HLURB may take cognizance of a case filed by the developer is when said case is instituted as a compulsory counterclaim to a pending case filed against it by the buyer or owner of a subdivision lot or condominium unit. As to par.[22] and Cadimas v. Court of Appeals. Obviously. Hon. which is to curb unscrupulous practices in the real estate trade and business.01. Manila. RTC. . where the HLURB’s jurisdiction concerns cases commenced by subdivision lot or condominium unit buyers. who sold the property in their capacities as owner and developer. Inc. (a). [Emphasis supplied. Presiding Judge. 1. As CGA stated in its complaint: 2.Note particularly pars. v. CGA is unquestionably the buyer of a subdivision lot from the respondents. Bulacan.23 we upheld the RTC’s jurisdiction even if the subject matter was a subdivision lot since it was the subdivision developer who filed the action against the buyer for violation of the contract to sell. as in Javellana v.] Pursuant to Roxas. which expressly qualifies that the cases cognizable by the HLURB are those instituted by subdivision or condomium buyers or owners against the project developer or owner. This is also in keeping with the policy of the law. 1344. concerning "unsound real estate practices. This was what happened in Francel Realty Corporation v. PD No. Defendants are the registered owners and developers of a housing subdivision presently known as Villa Priscilla Subdivision located at Brgy. Pulilan. and not vice versa. The rationale behind this can be found in the wordings of Sec.24 where the HLURB took cognizance of the developer’s claim against the buyer in order to forestall splitting of causes of action. The Present Case In the present case. Similarly. Cutcut. where it is not clear from the allegations in the complaint that the property involved is a subdivision lot. Carrion." it would appear that the logical complainant would be the buyers and customers against the sellers (subdivision owners and developers or condominium builders and realtors ). Sycip. Gocolay20 that the HLURB has no jurisdiction over cases filed by subdivision or condominium owners or developers against subdivision lot or condominium unit buyers or owners. (b) and (c) as worded. Villar19 and Suntay v.25 the case falls under the jurisdiction of the regular courts and not the HLURB.26 we held that the RTC had jurisdiction over a case where the conflict involved a subdivision lot buyer and a party who owned a number of subdivision lots but was not himself the subdivision developer.21 Thus. Freedom to Build. Branch 30.

T-127776 is hereto attached and made part hereof as Annex "C". 2. 2.02 On or about April 30. Imperial. T-127776 (Annex "C").D.05 Plaintiff has been religiously paying the agreed monthly installments until its Administrative Pastor discovered recently that while apparently clean on its face. 1998. which defendants deliberately and fraudulently concealed from the plaintiff. 27. 240878 containing an area of 119. including inter alia Nicanor Adriano’s Lot 2- F and Ceferino Sison’s Lot 2-G Bsd-04-000829 (OLT). Imperial applied for retention of five (5) hectares of her property at Cutcut. Pulilan. 1997. Lot 1.2.06 As shown in the technical description of TCT No. it covers a portion of consolidated Lots 2-F and 2-G Bsd-04-000829 (OLT). Bulacan originally covered by TCT No. and the case was considered closed. No. whose property at Cutcut. T-127776 of the Registry of Deeds of Quezon City in the name of Iluminada T. 6657 and the same was granted by the Department of Agrarian Reform (DAR) to cover in whole or in part farm lots previously awarded to tenants-beneficiaries.04 At the time of the execution of the second Contract to Sell (Annex "B"). 2. married to Asterio Soneja (defendant Priscilla T. which were respectively acquired by defendants from Nicanor Adriano and Ceferino Sison. Block 4 of the Villa Priscilla Subdivision was already covered by Transfer Certificate of Title No. Block 4 of the said Villa Priscilla Subdivision xxx xxx 2.431 square meters was placed under Operation Land Transfer under P.08 Said order of October 2. as in fact it was annotated in the title that they were empowered to sell the same. Bulacan under Rep. Soneja. Act No. xxx 2. Ignacio’s sister and brother-in- law) and the defendants as co-owners. . 1997 was affirmed and declared final and executory. but the latter represented themselves to be the real and absolute owners thereof.07 Said Purificacion S. Pulilan. Copy of TCT No. as in fact there was already an Implementing Order dated November 10. the title covering the subject lot actually suffers from fatal flaws and defects as it is part of the property involved in litigation even before the original Contract to Sell (Annex "A"). the plaintiff thru its Administrative Pastor bought from defendants on installment basis a parcel of land designated at Lot 1. former tenants- beneficiaries of Purificacion S.

amply articulated in its complaint. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. dealer. and We view CGA’s contention – that the CA erred in applying Article 1191 of the Civil Code as basis for the contract’s rescission – to be a negligible point. xxx 3. places its action within the ambit of the HLURB’s exclusive jurisdiction and outside the reach of the regular courts. i. broker or salesman. CGA has to file its complaint before the HLURB. This intent. 1344.05 Plaintiff is by law entitled to the rescission of the Contracts to Sell (Annexes "A" and "B") by restitution of what has already been paid to date for the subject property in the total amount of P2. 1. CGA claims that since the respondents cannot comply with their obligations under the contract. the fact remains that what CGA principally wants is a refund of all payments it already made to the respondents.] From these allegations. xxx 3. Section 1 of PD No. 957. Purificacion S. This cause of action clearly falls under the actions contemplated by Paragraph (b). In other words. Copy of said letter is hereto attached and made part hereof as Annex "J".03 As may thus be seen.899.e.20. Imperial. the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: xxx B. CGA is entitled to rescind the contract and get a refund of the payments already made. which they received but refused to acknowledge receipt. the body with the proper jurisdiction. thus formal demand therefor was made on the defendants thru a letter dated April 5. 27 [Emphasis supplied. Regardless of whether the rescission of contract is based on Article 1191 or 1381 of the Civil Code. 2002. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner. the main thrust of the CGA complaint is clear – to compel the respondents to refund the payments already made for the subject property because the respondents were selling a property that they apparently did not own. to deliver the property free from all liens and encumbrances. Accordingly. developer. which reads: SEC.515. the defendants deliberately and fraudulently concealed from the plaintiff that fact that the parcel of land sold to the latter under the Contract to Sell (Annexes "A" and "B") is part of the property already under litigation and in fact part of the five-hectare retention awarded to the original owner.. .

75717 dismissing for lack of jurisdiction the CGA complaint filed with the RTC. 2003 Decision of the Court of Appeals in CA G. . Bulacan. SP No. we DENY the petition and AFFIRM the October 20.R. premises considered.WHEREFORE. Branch 14 of Malolos. SO ORDERED.

who approved the withdrawal and thereafter disbursed the P60. vs.: Petitioner Lolita A. 1987. While the withdrawal slip was dated August 13. and/or Pilar Tiu. who disbursed the amount. as acting teller. Cash Supervisor. of the Development Bank of the Philippines. all dated August 13.00 on the ledger card and passbook. CRUZ. bookkeeper. 1987.00 from Savings Account No. 1993 LOLITA DADUBO. 2 Dadubo. After banking hours. Dadubo initialed the withdrawal slip. 1987. The withdrawal slip was processed and approved on the same day. Babaylon initialed the withdrawal slip and returned the documents to Dorado. The Received payment portion of the withdrawal slip was signed Veloso but Cidro. Borongan Branch were administratively charged with conduct prejudicial to the best interest of the service.00. The space Posted by was initialed by Babaylon but no posting was actually made because the passbook was not presented. Senior Accounts Analyst and Rosario B. all other supporting documents were dated August 14.00 to Veloso. After posting the amount of P60. presented an undated withdrawal slip for P60. Jr. Dadubo. These were then forwarded to the accountant. Reynaldo Dorado. Veloso did not know about it. another withdrawal slip was presented by Feliciano Bugtas. 1 The charges were based on reports on the unposted withdrawal of P60. authorized representative of the Tius.000.000. CIVIL SERVICE COMMISSION and the DEVELOPMENT BANK OF THE PHILIPPINES.00 withdrawal. and passed on to Cidro all the documents on the said transaction.. Cidro. 106498 June 28. The formal investigations revealed that in the morning of August 13. 1987. August 13. failed to initial the passbook. . Rosario Cidro. Edgar Tiu. who was also acting as posting machine operator.G.000. 1987. petitioner.R. 87-692 in the name of Eric Tiu. ticket and voucher. prepared the corresponding ticket and voucher in the name of the cash supervisor.000. Duran for petitioner. also an employee of the Tius. J. Erlinda Veloso. this being a withdrawal after banking hours (ABH).000. respondents. Francisco P. No. who signed the voucher ledger card of the Tius' savings account and forwarded the documents to Apolinario Babaylon.3 This was the second P60.

00 withdrawals. 5 The petitioner claimed she disbursed P100. the fact remains that the bank was defrauded on account of said ABH withdrawal (for) which Cidro is held responsible and accordingly found guilty of Gross Neglect of Duty and Inefficiency and Incompetence in the Performance of Official Duty. Dadubo appealed to the Merit Systems Protection Board (MSPB). Veloso came back and presented another withdrawal slip for P40.00 corresponding to the withdrawal slip she presented that morning.000. DBP was reversed by the Civil Service Commission in its Resolution No. who thought that what she was collecting was the P60.00 and the P40.000.00. . The withdrawal slip was received by Dorado. 91-642. declaring as follows: There is nothing in the records to show that the Senior Manager.00. covering the third P60. Veloso presented another undated withdrawal slip for P60. To all intents and purposes. dated May 21.000. On the basis of these findings. Personnel Services and Vice-Chairman.000. When Dadubo informed Cidro about the third withdrawal. August 14. However.The following day.000.00 withdrawal.000. till money of P100.000. the ensuing decision was a necessary consequence of the evidence. she paid this withdrawal to Veloso. 1991.00 withdrawal.00 was made to service it. She was penalized with dismissal from the service.00. 8which reduced Dadubo's penalty to suspension for six months on the ground that: Although Dadubo made alterations on the dates in the Ledger Card from August 13 to August 14. When she returned from the bank.000. She acknowledged receipt of the amount by signing the withdrawal slip and indicating opposite her signature the amount of P40. Veloso testified that she received only P40. That left the balance of P60. who handed it to Dadubo. Cidro was encashing the check at PNB to satisfy the ABH withdrawal.00 to Veloso. abused their discretion in deciding the case against the appellant or that their decision was made and attended with arbitrariness or unfairness.00 unaccounted for and directly imputable to Dadubo. 7 which affirmed the decision of the DBP.000.00 from the petitioner. At that time. both of the DBP.00. It was also Dadubo who reported on the irreconcilable P60. Prior to the payment of the third P60.000. DBP found Dadubo guilty of dishonesty for embezzlement of bank funds. On the other hand. 4 This was the third P60. prior to the payment of the ABH withdrawal. 1987. payable through salary deductions in not more than 12 installments.000.000.000. 6 Cidro was adjudged guilty of gross neglect of duty and fined in an amount equivalent to one month basic salary.

Such admission is however treated as a mitigating circumstance which is offset by the aggravating circumstance of taking advantage of her official position. The most that Dadubo could be charged with is willful violation of office regulation when she undertook reconciliation for under the Bank Manual the tellers are not allowed access to the savings account ledger cards. 91-642. 1987. Hence. CSC Resolution No. 92-878 9 affirming the earlier findings of the DBP as to Dadubo guilt. On July 16. 92-878 did not need to restate the legal and factual bases of the original decision in CSC-MSPB No. promulgated Resolution No. thus — The records reveal that Dadubo admitted in her Answer that she changed entry of the date August 13 to 14 in the ledger in the course of her reconciliation which she was advised not to do. Required to comment. 1987 (the date the report on reconciliation was submitted to the Regional Office). the Solicitor General argued that CSC Resolution No. 92-878 conflicts with the findings of fact in CSC Resolution No. xxx xxx xxx This act of admission needs no further elaboration to prove that Dadubo is guilty of the charge. There is no reason for her to change or alter entries in the ledger unless she intends to benefit therefrom or to conceal some facts. She claims that CSC Resolution No. the Commission manifestly overlooked or disregarded certain relevant facts not disputed by the parties. the Commission acting favorably on the motion. it should be noted that the report was made only on September 28. Respondent DBP moved reconsideration. It should be emphasized as earlier stated that Dadubo was not authorized to reconcile the subsidiary ledger cards for the period ending August 20. . respondent Dadubo manipulated the bank records to conceal the offense which constituted the act of dishonesty. 92-878 failed to comply with the constitutional requirement to state clearly and distinctly the facts an the law on which the decision is based. 497 which . 1992. is not conclusive as there are other available and convincing evidence to prove the guilt of Dadubo. . Further. Dadubo has brought her case to this Court in this petition for certiorari. surmises or conjectures. as emphatically stated in the MSPB decision. whose report was among the preliminary findings considered in the investigation of the case." The opinion of an acting Internal Audit Officer. and it based its conclusions entirely on speculations. ".

The rejection of the affidavit of Ballicud.00. fraud or error of law. then appealed to the Merit Systems Protection Board (MSPB). "the standard of due process that must be met in administrative tribunals allows a certain latitude as long as the element of fairness is not ignored. 11 Administrative decisions on matters within their jurisdiction are entitled to respect and can only be set aside on proof of grave abuse of discretion. and later elevated the case to the Civil Service Commission. The petitioner's challenges are mainly factual. 13 As this Court has held. Ballicud was inadmissible in evidence because he was never subjected to cross-examination. Moreover. proved Dadubo's guilt. The petitioner had admitted that she changed the entry of the dates in the subsidiary ledger card from August 13 to 14 in the course of her reconciliation work although she was not authorized to do this.already explained the relevant facts and the applicable law.000. to repeat. are controlling on the reviewing authority. Not only did she testify at her formal investigation but she also filed a motion for reconsideration with the DBP. along with the other evidence Presented during the investigation in the bank. The petitioner had several opportunities to be heard and to present evidence that she was not guilty of embezzlement but only of failure to comply with the tellering procedure. Having been given all these opportunities to be heard. While the rules governing Judicial trials should be observed as much as possible. . It is true that the petitioner was formally charged with conduct prejudicial to the best interest of the bank and not specifically with embezzlement. Nevertheless. 12 None of these vices has been shown in this case. which in unquestionably prejudicial to the best interest of the bank. was not improper because there was nothing in that document showing that the petitioner did not embezzle the P60. 10 is settled that it is not for the appellate court to substitute its own judgment for that of the administrative agency on the sufficiency of the evidence and the credibility of the witnesses. the prerogative of the administrative body. which she fully availed of. the allegations and the evidence presented sufficiently proved her guilt of embezzlement of bank funds. Appreciation of the evidence submitted by the parties was. The rule is that the findings of fact of administrative bodies. This admission. Her complaint that she was not sufficiently informed of the charges against her has no basis. their strict observance is not indispensable in administrative cases. the affidavit of Albert C. if based on substantial evidence." 14 The essence of due process is distilled in the immortal cry of Themistocles to Eurybiades: "Strike. for example. she cannot now complain that she was denied due process. it simply connotes an opportunity to be heard. subject to reversal only upon a clear showing of arbitrariness. but hear me first!" Less dramatically. The petitioner's invocation of due process is without merit.

TEEHANKEE. the petition is DISMISSED for lack of a clear showing of grave abuse of discretion on the part of the Civil Service Commission in issuing the questioned resolutions.. Costs against the petitioner. Even resolutions issued by this Court do not need to conform. there was an earlier statement of the facts and the law involved in the decision rendered by the MSPB dated February 28.. 92-878 failed to comply with the constitutional requirement to state clearly and distinctly the facts and the law on which a decision is based. 1987 LIANGA BAY LOGGING. vs. It would perhaps have been more thorough if certain other officers of the bank had been also investigated for their part in the anomalous transaction. But that matter is not before this Court and cannot be resolved by us at this time. 15 We must also dismiss the petitioner's complaint that CSC Resolution No. In both decisions. L-30637 July 16. Instance of Agusan. MANUEL LOPEZ ENAGE. and AGO TIMBER CORPORATION. C. which affirmed DBP's decision to dismiss the petitioner. 16 In any event.J.The charge against the respondent in an administrative case need not be drafted with the precision of an information in a criminal prosecution. 1990. 92-878 was rendered only to resolve DBP's motion for reconsideration. Court of Appeals 17 and other subsequent cases. INC. absent any showing of grave abuse of discretion. respondents. 18 We find no justification to nullify or modify the questioned resolution. has no competence nor authority to review . in his capacity as Presiding Judge of Branch II of the Court of First. CO.R. G. SO ORDERED. Section 14. legal bases for the said decisions. HON. what is controlling is the allegation of the acts complained of. It is worth adding that inasmuch as Civil Service Resolution No. WHEREFORE. the facts and the law on which they were based were clearly and distinctly stated. No.: The Court grants the petition for certiorari and prohibition and holds that respondent judge. to the first paragraph of Article VIII. of the Constitution. It is sufficient that he is apprised of the substance of the charge against him. petitioner. it was not really necessary to re-state the factual an. We have held that this provision applies only to courts of justice and not to administrative bodies like the Civil Service Commission. for reasoning extensively discussed in Borromeo v. not the designation of the offense.

The western boundary of petitioner Lianga is described as ". Cagwait..150 meters. Forester Cipriano Melchor undertook the survey and fixed the common boundary as "Corner 5 of Lianga Bay Logging Company at Km. Marihatag and Lianga. a point at the intersection of the Agusan-Surigao Provincial boundary and Nalagdao Creek . 21. . are binding upon the courts and will not be disturbed except where the board.anew the decision in administrative proceedings of respondents public officials (director of forestry. The parties herein are both forest concessionaries whose licensed areas are adjacent to each other. along the Agusan-Surigao boundary. 10. 1693 of the Philippine Commission as indicated in the green . a point in the intersection of the Agusan-Surigao Provincial boundary and Los Arcos-Lianga Road. Province of Agusan.000 hectares. secretary of agriculture and natural resources and assistant executive secretaries of the Office of the President) in determining the correct boundary line of the licensed timber areas of the contending parties.000 meters. following a hearing..800 meters. thence following Agusan-Surigao Provincial boundary in a general northerly and northwesterly and northerly directions about 39. with an approximate area of 4.7 on the Lianga-Arcos Road and lines N900E.000 meters to point 5.2 instead of Km..000 meters. thence following Agusan-Surigao boundary in a general southeasterly and southerly directions about 12. all in the Province of Surigao. they have a common boundary-the Agusan-Surigao Provincial boundary-whereby the eastern boundary of respondent Ago's concession is petitioner Lianga's western boundary. N50 W. Inc.406 hectares." The eastern boundary of respondent Ago's concession is described as ".000 hectares originally licensed to one Narciso Lansang under Ordinary Timber License No.700 meters" which respondent Ago protested claiming that "its eastern boundary should be the provincial boundary line of Agusan-Surigao as described in Section 1 of Art. It was a part of a forest area of 9. 3... Since the concessions of petitioner and respondent are adjacent to each other. point 4. 9.. agency and/or official(s) have gone beyond their statutory authority. N40 W. Corner 5. while that of respondent Ago Timber Corporation (hereinafter referred to as respondent Ago) granted under Ordinary Timber License No. the Director of Forestry ordered a survey to establish on the ground the common boundary of their respective concession areas. consisting of 110." 1 Because of reports of encroachment by both parties on each other's concession areas. 584-'52.. 1323-60 [New] is located at Los Arcos and San Salvador. a point along Los Arcos-Lianga Road. 1. more or less.. N31 W. is located in the municipalities of Tago. 21. 2. The Court reaffirms the established principle that findings of fact by an administrative board or agency or official. exercised unconstitutional powers or clearly acted arbitrarily and without regard to their duty or with grave abuse of discretion. The concession of petitioner Lianga Bay Logging Corporation Co. (hereinafter referred to as petitioner Lianga) as described in its Timber License Agreement No. N12 W.500 meters to Corner 6. 49..

. this Office could not have meant the Agusan-Surigao boundary as described under Section 1 of Act 1693 of the Philippine Commission for were it so it could have been so easy for this Office to mention the distance from point 3 to point 4 of Narciso Lansang as approximately 13. found: That the claim of the Ago Timber Corporation portrays a line (green line) far different in alignment with the line (red) as indicated in the original License Control Map of this Office. as the common boundary line of both licensees. Feliciano. That to follow the claim of the Ago Timber Corporation would increase the area of Narciso Lansang from 9.F. 2 The Director of Forestry. Such being the case.800 meters. it is reiterated that distance and bearings control the description where an imaginary line exists. The Agusan-Surigao boundary as mentioned in the technical descriptions of both licensees. The intentions of this Office in granting the two licenses (Lansang and Lianga Bay Logging Co.) are patently manifest in that distances and bearings are the controlling factors. as that indicated in red pencil of the sketch attached to the decision. In an appeal interposed by respondent Ago. docketed in the Department of Agriculture and Natural Resources as DANR Case No..046 hectares instead of the area granted which is 110. 1965 set aside the appealed . and ruled that "the claim of the Ago Timber Corporation runs counter to the intentions of this Office is granting the license of Mr. that it also runs counter to the intentions of this Office in granting the Timber License Agreement to the Lianga Bay Logging Co. after considering the evidence. Inc. Co. Inc. in a decision dated August 9. Narciso Lansang. Inc. If mention was ever made of the Agusan-Surigao boundary. This cannot be considered a mistake considering that the percentage of error which is more or less 103% is too high an error to be committed by an Office manned by competent technical men.pencil in the attached sketch" of the areas as prepared by the Bureau of Forestry.000 to 12..800 meters. That to follow the claim of the Ago Timber Corporation would reduce the area of the Lianga Bay Logging. therefore. and further. the then Acting Secretary of Agriculture and Natural Resources Jose Y.. License Control Map. Inc. to 107.360 hectares. is. 2268.800 meters from point 3 to point 4 of the original description of the area of Narciso Lansang but would project said line to a distance of approximately 13. patently an imaginary line based on B. That the claim of the Ago Timber Corporation (green line does not conform to the distance of 6. 3The decision fixed the common boundary of the licensed areas of the Ago Timber Corporation and Lianga Bay Logging Co.406 hectares.

Leido. signed by then Assistant Executive Secretary Jose J. should be that indicated by the green line on the same sketch which had been made an integral part of the appealed decision. Branch II. 1961. 13 Hence. Jr." 8 As prayed for. 1253. .. 5 On motion for reconsideration. on a bond of P20. in the Court of First Instance of Agusan. 1966. dated March 20.decision of the Director of Forestry and ruled that "(T)he common boundary line of the licensed areas of the Ago Timber Corporation and the Lianga Bay Logging Co. 1968. 9 On November 10. 11 On December 19. as plaintiff. 1968. the lower court issued an order denying petitioner Lianga's motion to dismiss and granting the writ of preliminary injunction prayed for by respondent Ago. 6 Respondent Ago filed a motion for reconsideration of the decision dated August 9. respondent judge issued a temporary restraining order on October 28. 1968. 1968 signed by then Assistant Executive Secretary Gilberto Duavit reversing and overturning the decision of the then Acting Secretary of Agriculture and Natural Resources and affirming in toto and reinstating the decision. 1968. Leido.." 4 Petitioner elevated the case to the Office of the President. signed by then Assistant Executive Secretary Jose J. of the Director of Forestry. against Lianga Bay Logging Co. 1968. or on October 29.. Inc. a new action was commenced by Ago Timber Corporation. Assistant Executive Secretaries Jose J. where in a decision dated June 16. 1968 of the Office of the President but after written opposition of petitioner Lianga.. 12 Lianga's Motion for Reconsideration of the Order was denied on May 9. 10 A supplemental motion was filed on December 6. 1968. defendant Lianga (herein petitioner) moved for dismissal of the complaint and for dissolution of the temporary restraining order on grounds that the complaint states no cause of action and that the court has no jurisdiction over the person of respondent public officials and respondent corporation. the same was denied in an order dated October 2. 2268 and insisting that "a judicial review of such divergent administrative decisions is necessary in order to determine the correct boundary fine of the licensed areas in question. and Gilberto M. for "Determination of Correct Boundary Line of License Timber Areas and Damages with Preliminary Injunction" reiterating once more the same question raised and passed upon in DANR Case No. It also submitted its opposition to plaintiff's (herein respondent prayer for the issuance of a writ of preliminary injunction. The corresponding writ was issued the next day. docketed thereat as Civil Case No. enjoining the defendants from carrying out the decision of the Office of the President. as defendants.000. Jr. 1969. the ruling of the then Secretary of Agriculture and Natural Resources was affirmed. Leido. the Office of the President issued another decision dated August 9. 7 On October 21. Duavit and Director of Forestry.. 1968. Inc. Jr.

For the respondent court to consider and weigh again the evidence already presented and passed upon by said officials would be to allow it to substitute its judgment for that of said officials who are in a better position to consider and weigh the same in the light of the authority specifically vested in them by law. 1968. protection. 14 The Court finds merit in the petition. amounting to lack of jurisdiction. and (d) to annul the aforementioned orders. 1253. the jurisdiction and authority over the demarcation. (c) to declare that respondent Judge acted without jurisdiction or in excess of jurisdiction and with grave abuse of discretion. for it is a well-settled doctrine that the courts of justice will generally not interfere with purely administrative matters which are addressed to the sound discretion of government agencies and their expertise unless there is a clear showing that the latter acted arbitrarily or with grave abuse of discretion or when they have acted in a capricious and whimsical manner such that their action may amount to an excess or lack of jurisdiction. this Court on June 30. Section 1816 of the Revised Administrative Code vests in the Bureau of Forestry. may repeal or in the decision of the Director of Forestry when advisable in the public interests. (b) to order the dismissal of Civil Case No. 1968 is final and executory. occupancy. Such a posture cannot be entertained. the Secretary of Agriculture and Natural Resources and the Office of the President. as department head. asking for the determination anew of the correct boundary fine of its licensed timber area. 1253 in the Court of First Instance of Agusan. and for the taking of forest products. for the same issue had already been determined by the Director of Forestry. The Secretary of Agriculture and Natural Resources. management. 1968 and granting the preliminary injunction per its Order dated December 19. in issuing the temporary restraining order dated October 28. the respondent court would necessarily have to assess and evaluate anew all the evidence presented in the administrative proceedings. After respondent's comments on the petition and petitioner's reply thereto. reproduction. 16 In giving due course to the complaint below. 18 . and use of all public forests and forest reserves and over the granting of licenses for game and fish. 15 whose decision is in turn appealable to the Office of the President. 17 which is beyond its competence and jurisdiction.this petition praying of the Court (a) to declare that the Director of Forestry has the exclusive jurisdiction to determine the common boundary of the licensed areas of petitioners and respondents and that the decision of the Office of the President dated August 9. administrative officials under whose jurisdictions the matter properly belongs. reforestation. including stone and earth therefrom. 1969 issued a restraining order enjoining in turn the enforcement of the preliminary injunction and related orders issued by the respondent court in Civil Case No. Respondent Judge erred in taking cognizance of the complaint filed by respondent Ago.

experience and capability to hear and determine promptly disputes on technical matters or essentially factual matters. has become well nigh indispensable. Ago. permits. Secretary of Agriculture and Natural Resources and Executive Secretary in connection with his application for renewal of his expired timber licenses. modify or reverse the orders regarding the grant or renewal of said timber license by the two aforementioned officials. and that petitioner Executive Secretary. we held that the powers granted to the Secretary of Agriculture and Commerce (Natural Resources) by law regarding the disposition of public lands such as granting of licenses. Code). Adm. v. rejecting. v. Rev. The Court held that "there can be no question that petitioner Director of Forestry has jurisdiction over the grant or renewal of respondent Ago's timber license (Sec. 19 The general rule. courts have no supervising power over the proceedings and actions of the administrative departments of the . reinstating. prohibition and damages with preliminary injunction alleging that the rejection of his application for renewal by the Director of Forestry and Secretary of Agriculture and Natural Resources and its affirmance by the Executive Secretary constituted an abuse of discretion and was therefore illegal. Makalintal. et al. In the said case. et al. Adm. leases. Code). are all executive and administrative in nature. therein respondent Pastor Ago. 45 Off. "in this era of clogged court dockets. 1816. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality of such findings are supported by substantial evidence. or with grave abuse of discretion. is that decisions of administrative officers shall not be disturbed by the courts. et al. It is a well-recognized principle that purely administrative and discretionary functions may not be interfered with by the courts. the need for specialized administrative boards or commissions with the special knowledge. the jurisdiction of such office shall prevail over the courts." The Court went on to say that. jurisdiction to affirm. that petitioner Secretary of Agriculture and Natural Resources as department head.A doctrine long recognized is that where the law confines in an administrative office the power to determine particular questions or matters. likewise. "(I)n the case of Espinosa. 22(where therein respondent Pastor Ago is the president of herein respondent Ago Timber Corporation). In general. et al. or cancelling applications or deciding conflicting applications. 79[c]. 712). filed with the Court of First instance of Agusan a petition for certiorari. and contracts or approving. after an adverse decision of the Director of Forestry. 134. Gaz. Rev. (79 Phil. under the principles of administrative law in force in this jurisdiction." 21 The facts and circumstances in the instant case are similar to the earlier case of Pajo. upon the facts to be presented. 20 As recently stressed by the Court. except when the former have acted without or in excess of their jurisdiction. subject to judicial review in case of grave abuse of discretion. acting for and in behalf and by authority of the President has. modify or reject said grant or renewal of respondent Ago's timber license by petitioner Director of Forestry (Sec. is empowered by law to affirm.

And we have repeatedly held that there is grave abuse of discretion justifying the issuance of the writ of certiorari only when there is capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. the court may still modify said order as the same is being put into writing. constitute the real judgment of the court. following a hearing. are binding upon the courts and will not be disturbed except where the board.government. for some mysterious. agency or official has gone beyond his statutory authority. Duavit. "While it is to be presumed that the judgment that was dictated in open court will be the judgment of the court. Court of Appeals. which reversed the findings and conclusions of the Office of the President in its first decision dated June 16. 1966(Annex "D") was never released" and instead a decision was released on August 9. Tan vs. allegedly signed by then Assistant Executive Secretary Jose J. it could still be subject to amendment and change and may not. it is stin subject to amendment or change by the judge. while it has not yet been delivered to the clerk for filing. unknown if not anomalous reasons and/or illegal considerations. the "decision" allegedly dated August 15. and the important questions of law and fact involved therein. "however. People. that. And even if the order or judgment has already been put into writing and signed. This is generally true with respect to acts involving the exercise of judgment or discretion. Leido. 24 (where herein respondent Ago was the petitioner) the Court held that. (Abad Santos v. a judicial review of such divergent administrative decisions is necessary in order to determine the correct boundary . Duavit. as well as the well-grounded fear and suspicion that some anomalous. 67 Phil. and findings of act. 609)" Respondent Ago contends that the motion filed by petitioner Lianga for reconsideration of the decision of the Office of the President was denied in an alleged "decision" dated August 15. 1966 (Annex "D") of Assistant Executive Secretary Gilberto M. 1968. Jr." Respondent alleges "that in view of the hopelessly conflicting decisions of the administrative bodies and/or offices of the Philippine government. 1966. 1966 and signed by then Assistant Executive Secretary Leido. In still another case of Ago v. signed by then Assistant Executive Secretary Gilberto M. 480. therefore. 23 Respondent should be aware of this rule. illicit and unlawful considerations had intervened in the concealment of the decision of August 15. A decision cannot be considered as binding on the parties until its promulgation. 88 Phil. It is elementary that a draft of a decision does not operate as judgment on a case until the same is duly signed and delivered to the clerk for filing and promulgation. Prior thereto. exercised unconstitutional powers or clearly acted arbitrarily and without regard to his duty or with grave abuse of discretion. Findings of fact by an administrative board. Province of Tarlac. It is only when the judgment signed by the judge is actually filed with the clerk of court that it becomes a valid and binding judgment. agency or official.

1966 and signed by himself). The license operates as a contract between the government and respondent.. 27 if the petition filed relates to the acts or omissions of an inferior court. 25 It is presumed that an official of a department performs his official duties regularly. stipulates certain conditions. furthermore.000 hectares from the forest area originally licensed to Narciso Lansang.line of the licensed areas in question and restore the faith and confidence of the people in the actuations of our public officials and in our system of administration of justice. quo warranto and habeas corpus in their respective places. 1968 was denied in the Order dated October 2. mandamus. therefore. among which were: that the decision of the Director of Forestry as to the exact location of its licensed areas is final." The mere suspicion of respondent that there were anomalies in the non-release of the Leido "decision" allegedly denying petitioner's motion for reconsideration and the substitution thereof by the Duavit decision granting reconsideration does not justify judicial review. 1968 and signed by Assistant Executive Secretary Leido himself (who thereby joined in the reversal of his own first decision dated June 16. 1323-'60[New] which approved the transfer to respondent Ago of the 4. v. officer or person. prohibition. conditions. and limitations. within their jurisdiction. terms and limitations. board. Arranz 31 which involved a petition for certiorari and prohibition filed in the Court of First Instance of Isabela against the same . Respondent. Beliefs. certiorari. Ago's motion for reconsideration of the Duavit decision dated August 9. and the Ago Timber Corporation. that the license is subject to whatever decision that may be rendered on the boundary conflict between the Lianga Bay Logging Co. not inconsistent with law. Clearly. 30 In the leading case of Palanan Lumber Plywood Co. that the terms and conditions of the license are subject to change at the discretion of the Director of Forestry and the license may be made to expire at an earlier date. Inc. 26 It should be noted. The provisions of law explicitly provide that Courts of First Instance shall have the power to issue writ of injunction. as may be deemed by him to be in the public interest. is estopped from questioning the terms and stipulation thereof. the injunctive writ should not have been issued. suspicions and conjectures cannot overcome the presumption of regularity and legality of official actions. the Director of Forestry. may prescribe and insert therein such terms. Under Section 1834 of the Revised Administrative Code. The Ordinary Timber License No. that as hereinabove stated with regard to the case history in the Office of the President. upon granting any license. 28 The jurisdiction or authority of the Court of First Instance to control or restrain acts by means of the writ of injunction is limited only to acts which are being committed within the territorial boundaries of their respective provinces or districts 29 except where the sole issue is the legality of the decision of the administrative officials. or of a corporation.

Inc. Both the statutory provisions and the settled jurisdiction of this Court unanimously affirm that the extraordinary writs issued by the Court of First Instance are limited to and operative only within their respective provinces and districts.. " The writ of preliminary injunction issued by respondent court is furthermore void. It is abundantly clear that respondent court has no jurisdiction over the subject matter of Civil Case No. the court could not validly issue the writ of injunction when the officials sought to be restrained from enforcing the decision are not stationed within its territory. respondent Judge acted with grave abuse of discretion and excess. the Court laid down the rule that: "We agree with the petitioner that the respondent Court acted without jurisdiction in issuing a preliminary injunction against the petitioners Executive Secretary. 58452. insofar as injunctive or prohibitory writs are concerned. if not lack. Only a portion of this area was in fact transferred to respondent Ago as described in its Ordinary Timber License No.1avvphi1 "To recapitulate. 1323-'60[New]. as determined by respondents public officials against whom no case of grave abuse of discretion has been made.respondent public officials as here and where the administrative proceedings taken were similar to the case at bar. Ruiz. We went further and said that when the petition filed with the courts of first instance not only questions the legal correctness of the decision of administrative officials but also seeks to enjoin the enforcement of the said decision. The forest area referred to and described therein comprises the whole area originally licensed to Narciso Lansang under the earlier Ordinary Timber License No. Secretary of Agriculture and Natural Resources and the Director of Forestry. of jurisdiction in refusing to dismiss the case under review and in issuing the writ of preliminary injunction enjoining the enforcement of the final decision . 32 We thus declared in Director of Forestry v. since it appears that the forest area described in the injunctive writ includes areas not licensed to respondent Ago. who have their official residences in Manila and Quezon City. 33 "In Palanan Lumber & Plywood Co. supra. 1253 of the Court of First Instance of Agusan nor has it jurisdiction to decide on the common boundary of the licensed areas of petitioner Lianga and respondent Ago. outside of the territorial jurisdiction of the respondent Court of First Instance of Isabela. Absent a cause of action and jurisdiction. we reaffirmed the rule of non-jurisdiction of courts of first instance to issue injunctive writs in order to control acts outside of their premises or districts." A different rule applies only when the point in controversy relates solely to a determination of a question of law whether the decision of the respondent administrative officials was legally correct or not. the rule still stands that courts of first instance have the power to issue writs limited to and operative only within their respective provinces or districts..

ACCORDINGLY. 1968 of the Office of the President. 1968 and the order affirming the same dated October 2. the petition for certiorari and prohibition is granted.dated August 9. . 1253. SO ORDERED. The restraining order heretofore issued by the Court against enforcement of the preliminary injunction and related orders issued by respondent judge is the case below is made permanent and the respondent judge or whoever has taken his place is hereby ordered to dismiss Civil Case No.

respondents. 1992. COMPOSED OF FRUMENCIO A. COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE AND THE COMMITTEE CREATED TO INVESTIGATE THE ADMINISTRATIVE COMPLAINT AGAINST AQUILINO T. LAGUSTAN. SECRETARY OF FINANCE. he questions Memorandum order no. Assistant Commissioner.: 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. which provides for Redefining the Areas of Jurisdiction and Renumbering of Regional And District Offices. Jr. and of its implementing rules issued by the Bureau of Internal Revenue. 1993 which found him guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal from office.) of the crimes of violation of Section 268 (4) of the National Internal Revenue Code and Section 3 (e) of R. 132. 1993. . JR.R. namely: a) Administrative Order No. 1997] AQUILINO T. MAZA. Galban. vs. Revenue Specific Tax Officer. petitioner seeks to assail the legality of Executive Order No. The antecedent facts of the instant case as succinctly related by the Solicitor General are as follows: On September 18. entitled People of the Philippines. LARIN. then Assistant Commisioner of the Bureau of Internal Revenue and his co-accused (except Justino E. 101 dated December 2. which provides for the Streamlining of the Bureau of Internal Revenue. which provides for the Organizational Structure and Statement of General Functions of Offices in the National Office and b) Administrative Order No. 4-93. [G. No. 3019 in Criminal Cases Nos. LARIN.A. Larin.. JOSE B. petitioner. Larin. 164 issued by the Office of the President. 112745. 14208-14209. Bureau of Internal Revenue as well as the investigation made in pursuance thereto and Administrative Order No. October 16. Likewise. Incidentally. J. which provides for the creation of A Committee to Investigate the Administrative Complaint Against Aquilino T. issued by President Ramos on October 26. ALEJANDRINO and JAIME M. DECISION TORRES. [1] a decision was rendered by the Sandiganbayan convicting herein petitioner Aquilino T. THE EXECUTIVE SECRETARY. 5-93.

Galban. Sr. EVANGELISTA: xxx SO ORDERED. It states thus:t A Committee is hereby created to investigate the administrative complaint filed against Aquilino T. the dispositive portion of the judgment reads: "WHEREFORE. Acting by authority of the President. Assistant Commissioner. PARENO. 14208 and 14209 convicting accused Assistant Commissioner for Specific Tax Aquilino T. Accused. Bureau of Internal Revenue. Pareno. 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. Larin. 164 dated August 25. et. Deputy Executive Secretary Leonardo A. al. xxx It is clear from the foregoing that Mr. Aquilino T. judgment is now rendered in Criminal Cases Nos. Referred to the Department of Finace by the Commissioner of Internal Revenue. Justino E. Larin. entitled People of the Philippines vs. 1993. a presidential appointee. to be composed of: . Evangelista. 14208-14209. Larin. The cases against Pareno and Evangelista are being acted upon by the Bureau of Internal revenue as they non-presidential appointees. Larin has found beyond reasonable doubt to have committed acts constituting grave misconduct. 1993 which provides for the creation of an Executive Committee to investigate the administrative charge against herein petitioner Aquilino T. grave misconduct is punishable by dismissal. Teodoro T.Plaintiff vs. one of those convicted in the Criminal Case Nos. inter alia: This is a report in the case of Assistant Commissioner AQUILINO T. Larin. and Potenciana N. Jr. Bureau of Internal Revenue. Larin. Under the Civil Service Laws and Rules which require only preponderance of evidence. and Chief of the Revenue accounting Division POTENCIANA M. The memorandum states. LARIN of the Excise tax Service. Aquilino T. Quisumbing issued Memorandum Order No. Chief of the Alcohol tax Division TEODORO P.

xxx Consequently. 14208 and 14209 entitled People of the Philippines vs. . Frumencio A. 1993. conduct the investigation in the most expeditious manner. Jose B. 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. 164 dated August 25. the Committee directed the petitioner to respond to the administrative charge leveled against him through a letter dated September 17. The committee has its possession a certified true copy of the Decision of the Sandiganbayan in the above-mentioned cases. Larin. thus: Presidential Memorandum Order No. you are hereby directed to file your position paper on the aforementioned charges within seven (7) days from receipt hereof xxx. Pursuant to Presidential Memorandum Order No. Lagustan Chairman Assistant Executive Secretary for Legislation Mr. Alejandro Member Presidential Assistant Atty. created an Investigation Committee to look into the charges against you which are also the subject of the Criminal Cases No. 1993. Jaime M. al. a xerox copy of which is hereto attached for your ready reference. 164. et. 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. Aquilino T. and terminate the same as soon as practicable from its first scheduled date of hearing. Atty.

I may not . b) by res judicata. Lagustan . . and d) because to proceed with the case would be redundant. were subsequently issued . the Chairman of the Investigating Committee. as follows: xxx The foregoing documents readily show that I am not administratively liable or criminally culpable of the charges leveled against me. 1993 which was addressed to Atty. c) double jeopardy. of which petitioner was the Assistant Commissioner. 1993 which mandates for the streamlining of the Bureau of Internal Revenue. Under said order. comment on the merits of issues involved for fear of being cited in contempt of Court.by the Bureau of Internal Revenue. petitioner submitted a letter dated September 30. namely. 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. while other offices are also created. therefore. Frumencio A. renamed. decentralized or transferred to other offices. Meanwhile. The corresponding implementing rules of Executive Order No. In compliance. 132 dated October 26. Failure to file the required position paper shall be considered as a waiver on your part to submit such paper or to be heard. 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. 4-93 and 5-93. revenue Administrative Orders Nos. oppressive and a plain persecution against him. 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. in which case. In said latter. 132. In the same letter. the Committee shall deem the case submitted on the basis of the documents and records at hand. was one of those offices that was abolished by said executive order. he asserts that. some positions and functions are either abolished. the President issued the challenged Executive order No. The Excise Tax Service or the Specific Tax Service. The case being sub-judice. Excise Tax office of Bureau of Internal Revenue.

1996 and while the instant petition is pending. 14208 and 14209. Victorino C. the President appointed the following as BIR Assistant Commissioners: 1. Joel L. petitioner filed directly with this Court the instant petition on December 13.132. 1993 to question basically his alleged unlawful removal from office. Gonzales 4. in the assailed Administrative Order No. Rizalina S. the president. Mamalateo 7. 164 is void as it violated his right to due process. Guillermo 5. 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. Tan-Torres Consequently. He also averred that the administrative investigation conducted under Memorandum Order No. Antonio N. Lilia C. Melchor S. According to him. Frianeza 2. Masa 8. 1993 are not sufficient for purposes of complying with the requirements of due process. Magalona 6. 101 dated December 2. Jaime D. Aggrieved. He alleged that he . petitioner challenged the authority of the President to dismiss him from office. Galura 3. Jaime M. On April 17. this Court set aside the conviction of the petitioner in Criminal Case Nos. Dominador L. Pangilinan 9. the letter of the Committee dated September 17. Bernardo A. 1993. 1993 and his position paper dated September 30. He argued that in so far as presidential appointees who are Career Executive Service Officers are concerned. On October 27. Ramos 10. the President exercises only the power of control not the power to remove. or one day after the promulgation of Executive Order No. 1993. In his petition.

Significantly.O. 7645. Revenue Administrative Orders 4-93 and 5-93 for being ultra vires.O.6656 future reorganization is expressly contemplated and nothing in said law that prohibits subsequent reorganization through an executive order. otherwise known as the Administrative Code of 1987.A. it is imperative that We consider these questions : a) Who has the power to discipline the petitioner?. it is clear that in Section 11 of R. respondents clarified that petitioner was not dismissed by virtue of EO 132. No. Bureau director. 292. namely Undersecretary.O. 132 as stated in its preamble are Section 63 of E. In addition. 132 and its implementing rules. respondents contended that since petitioner is the presidential appointee. petitioner was appointed as Assistant Commissioner in . He said that the reorganization sought to be effected by the Executive Department on the basis of E. Assistant Secretary. 132 tainted with bad faith? At the outset. he falls under the disciplining authority of the President. They also contended that E. Assistant Regional Director. 132. No. He claimed that there is yet no law enacted by Congress which authorizes the reorganization by the Executive Department of executive agencies. and Section 20.O. otherwise known as the Act Protecting the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization.[3] Career Executive Service officers.O No. it is worthy to note that the position of the Assistant Commissioner of the BIR is part of the Career Executive Service. e) Is the reorganization of BIR pursuant to E. namely. Respondents claimed that he was removed from office because he was found guilty of grave misconduct in the administrative cases filed against him. Apart from this. 132?. [2] Under the law. Assistant Bureau Director. Thus. The ultimate issue to be resolved in the instant case falls on the determination of the validity of petitioners dismissal from office.127 (Reorganizing the Ministry of Finance). No. No. the other legal bases of E. 132 and its implementing rules were validly issued pursuant to Sections 48 and 62 of Republic Act No. in order to resolve this matter. are all appointed by the President.A No. 132 is tainted with bad faith in apparent violation of Section 2 of R. Regional Director. 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. b) Were the proceedings taken pursuant to Memorandum Order No.O. Book III of E. 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. he assailed said Executive Order No. No. 6656. On the other hand. Concededly. Incidentally. Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board. particularly the Bureau of Internal revenue. 164 in accord with due process?.O.was not informed of the administrative charges leveled against him nor was he given official notice of his dismissal. NO.

considers that petitioner was not dismissed for a valid cause. which created a committee to investigate the administrative charge against petitioner. 14208 and 14209. or limited to a period specified by law or to the duration of a particular project for which purpose the employment was made. was issued pursuant to the power of removal of the President. In other words. Thus. et. Thus. this Court. Under the Administrative Code of 1987. 807. it is ineluctably clear that Memorandum Order No. This is in line with the well settled principle that the power to remove is inherent in the power to appoint conferred to the President by Section 16. however. 1992. No. Thus. as amended. however. thus. Article VII of the Constitution. in Criminal Cases No. may only be removed for a cause and in accordance with procedural due process. Specifically. No less than the 1987 Constitution guarantees the right of security of tenure of the employees of the civil service. it clearly states that: "This pertains to the administrative charge against Assistant Commissioner Aquilino T. on the basis of decision handed down by the Hon. This power of removal. 14208 and 14209. It must be pointed out that petitioner is a career service officer. is not an absolute one which accepts no reservation. Larin of the Bureau of Internal Revenue. Being a presidential appointee. 1987 by then President Aquino. petitioner is a presidential appointee who belongs to career service of the Civil Service. 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. in the Administrative Order No.D."[4] . otherwise known as Civil Service Decree of the Philippines. for grave misconduct by virtue of a Memorandum signed by Acting Secretary Leong of the Department of Finance.January. As admitted by the respondents. the administrative case against petitioner is based on the Sandiganbayan Decision of September 18. 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 tenurialprotection. al. 164. he comes under the direct diciplining authority of the President. Section 36 of P. 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. 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. 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. petitioner enjoys the right to security of tenure. 101 issued by Senior Deputy Executive Secretary Quisumbing which found petitioner guilty of grave misconduct. Sandiganbayan convicting Larin. As a career service officer.

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. 108037-38 and 107119-20.. be dismissed. the accused had conspired in knowingly preparing false memoranda and certification in order to effect a fraud upon taxes due to the government.682.it must.R. We are emphatic in our resolution in said cases that there is nothing "illegal with the acts committed by the petitioner(s). b) it is not incumbent upon Larin to go beyond the certification made by the Revenue Accounting Division that Tanduay Distillery. 107119-20 are the very same acts for which petitioner is held to be administratively responsible.for the full amount.701. including petitioner.000.00) if we are to rely on the letter of Deputy Commissioner Eufracio D. if one is to look at the availments or utilization thereof (Exhibits 'AA' to 'AA-31- a'). c) there is nothing irregular or anything false in Larin's marginal note on the memorandum addressed to Pareno.000. The government had been defrauded of a tax revenue . the confluence of acts and omissions committed by accused Larin. Inc.A.R. In a nutshell. had paid the ad valorem taxes.'[5] However." We also declare that "there is no showing that petitioner(s) had acted irregularly.\ As pointed out above. or performed acts outside of his (their) official functions. By their separate acts which had resulted in an appropriate tax credit of P180.00 in favor of Tanduay. Santos (Exhibits '21' for all the accused)." Significantly. thus. the dismissal or acquittal of the criminal charge ] . Nos. Any charge of malfeasance or misfeasance on the part of the petitioner is clearly belied by our conclusion in said cases. We are not unaware of the rule that since administrative cases are independent from criminal actions for the same act or omission. to commit the illegal acts charged. We specifically ruled in no uncertain terms that : a) petitioner cannot be held negligent in relying on the certification of a co-equal unit in the BIR.R. 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 17.3019 as a consequence of his act of favorably recommending the grant of tax credit to Tanduay Distillery. The pertinent portion of the judgment of the Sandiganbayan reads: "As above pointed out. No. 1996 in G. Inc. Pareno and Evangelista adequately prove conspiracy among them for no other purpose than to bring about a tax credit which Tanduay did not deserve. the Chief of Alcohol Tax Division who was also one of the accused. 108037-38 and G. or for a substantial portion thereof (P73. in the said criminal cases. and d) there is no proof of actual agreement between the accused. We see no reason for the administrative charge to continue . Nos. but eventually acquitted. Nos. These misrepresentations as to how much Tanduay had paid in ad valorem taxes obviously constituted a fraud of tax revenue of the government xxx. these acts which We categorically declare to be not unlawful and improper in G. In the light of this decisive pronouncement.

including the office of Excise Tax Services of which petitioner was the Assistant Commissioner. Apparently.A. because in such a case. with the issuance of Executive Order No. 1993 petitioner submitted his letter-response dated September 30. suffice it to say that petitioner was given every chance to present his side. As stated earlier. Section 48 of R. it is argued that there is no law yet which empowers the President to issue E. Let us now examine Executive Order No. No. there is no basis nor justifiable reason to maintain the administrative suit. the circumstantial setting of the instant case sets it miles apart from the foregoing rule and placed it well within the exception. Initially. Book III of E. 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. 1993 to the administrative charged filed against him. the President released the list of appointed Assistant Commissioners of the BIR. Under its Preamble.[7] The records clearly show that on October 1. We do not agree. 127. 132. No.O. all of which are evidences supporting his defense. petitioner was not included.A. Corollarily.O. he also submitted various documents attached as annexes to his letter. he received a letter dated September 17. 7645. were abolished or otherwise decentralized. It cannot therefore be argued that petitioner was denied of due process. No. 132. Aside from his letter.O. No. 132 or to reorganize the BIR. 132 lays down the legal basis of its issuance. Prior to this. the acquittal of the petitioner in the criminal case necessarily entails the dismissal of the administrative action against him. On the aspect of procedural due process. 1993 from the Investigation Committee requiring him to explain his side concerning the charge. E. and c) Section 20. No.O. some of the positions and offices.[does not foreclose the institution of administrative action nor carry with it the relief from administrative liability.[6] However. Consequently. 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. b) Section 63 of E. 7645 provides that: . namely: a) Section 48 and 62 of R. 292.

Book III of E. No. phasing out and abolition" of offices only and does not cover the creation of offices or transfer of functions. 292 which states: "Sec. 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) Said provision clearly mentions the acts of "scaling down. 62. to transfer functions.The heads of departments. phased out or abolished. which includes the power to group. No. subject to civil rules and regulations." (italics ours) This provision speaks of such other powers vested in the President under the law. 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. Another legal basis of E. What law then which gives him the power to reorganize? It is Presidential Decree No.O. 132 is Section 20. The 1987 Constitution clearly provides . xxx. -. The validity of these two decrees are unquestionable. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch.O.20.Unless Congress provides otherwise." (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. to create and classify functions. Nevertheless. consolidate bureaus and agencies. the same is valid and binding for all intents and purposes. 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. 1772[9] which amended Presidential Decree No. 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.Unless otherwise created by law or directed by the President of the Philippines. -. Unauthorized Organizational Charges. "Sec. [8] Unless and until a specific provision of the law is declared invalid and unconstitutional. -. the act of creating and decentralizing is included in the subsequent provision of Section 62. to abolish offices. Actual scaling down. Well settled is the rule that every law has in its favor the presumption of constitutionality. 48. Residual Powers. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government. which provides that: "Sec. 1416. services and activities and to standardize salaries and materials. The contention of petitioner that the two provisions are riders deserves scant consideration.

Nevertheless. Be that as it may. is done for political reasons or purposely to defeat . letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended. 127 should be related to the second paragraph of Section 11 of Republic Act No. And in that case the security of tenure would not be a Chinese Wall. 6656. No.that "all laws. Obviously. decrees. there is yet no law amending or repealing said decrees. 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. We can not consider E. Thus. 1987 as a legal basis for the reorganization of the BIR. executive orders. Well-settled is the rule that reorganization is regarded as valid provided it is pursued in good faith. No. Section 11 provides inter alia: "xxx In the case of the 1987 reorganization of the executive branch. 132. No. In that event no dismissal or separation actually occurs because the position itself ceases to exist. a reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. in Dario vs." However. It can not thus be used as a proper basis for the reorganization of the BIR. there are other legal bases to sustain the authority of the President to issue the questioned E. as shown earlier. repealed or revoked.O."[10] So far. thus: "Sec. this court has had the occasion to clarify that: "As a general rule. 16. if the abolition which is nothing else but a separation or removal.O. it had become stale by virtue of the expiration of the ninety day deadline period. E." (italics ours) Executive Order No. While the President's power to reorganize can not be denied. 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.O. proclamations. this does not mean however that the reorganization itself is properly made in accordance with law. 127 signed on January 30. Significantly. Mison. 127 was part of the 1987 reorganization contemplated under said provision. the Constitution itself recognizes future reorganizations in the government as what is revealed in Section 16 of Article XVIII.

security of tenure.1. thus: Sec. 2. no valid abolition takes place and whatever abolition is done is void ab initio. 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. Section 1. c) Where incumbents are replaced by those less qualified in terms of status of appointment. performance and merit. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. No. or other lawful causes allowed by the Civil Service Law.A. pursuant to a bona fide reorganization. a position has been abolished or rendered redundant or there is a need to merge. divide. 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. or otherwise not in good faith." A reading of some of the provisions of the questioned E. 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. xxx" (italics ours) .2 The Intelligence and Investigation Office and the Inspection Service are abolished. 6656 lists down the circumstances evidencing bad faith in the removal of employees as a result of the reorganization. An Intelligence and Investigation Service is hereby created to absorb the same functions of the abolished office and service. or consolidate positions in order to meet the exigencies of the service. it is worth mentioning that Section 2 of R. 132 clearly leads us to an inescapable conclusion that there are circumstances considered as evidences of bad faith in the reorganization of the BIR. e) Where the removal violates the order of separation provided in Section 3 hereof. 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.2 of said executive order provides that: "1. No."[11] In this regard. A valid cause for removal exist when.1.O.

A. 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. . 6656 that an office is abolished and another one performing substantially the same function is created. No. Antonio Pangilinan who was one of those appointed as Assistant Commissioner. No. No. 6656 which explicitly states that no new employees shall be taken in until all permanent officers shall have been appointed for permanent position. he would have reached the compulsory retirement age of sixty-five years in which case.2. Furthermore. 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.A.O. three more divisions of the Assessment Service are formed.A. SO ORDERED. With this newly created offices. "is an outsider of sorts to the bureau. No. IN VIEW OF THE FOREGOING. it is perceivable that the non-reappointment of the petitioner as Assistant Commissioner violates Section 4 of R.1. he shall be deemed to have retired at such age and entitled thereafter to the corresponding retirement benefits. Hence. This provision is a clear illustration of the circumstance mentioned in Section 2 (b) of R. six new divisions are also created. 132. As claimed by petitioner. 6656. he should have given preference for appointment in the position of Assistant Commissioner. It is undeniable that petitioner is a career executive officer who is holding a permanent position. in the meanwhile. Under Section 1.A. 6656." We should not lose sight of the second paragraph of Section 4 of R. Under Section 1. Aside from this. Under said provision. No. not having been an incumbent officer of the bureau at the time of the reorganization.3 of E. the Information Systems Group has two newly created Systems Services. 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. there is no doubt that a significant increase of positions will correspondingly follow. the petition is granted.

No.. petitioners. ORTIZ. ALBERTO LONTOK. PABLO B. 81967 August 8. ELY F. JULIAN C. vs. CATALINO MACARAIG. No. DARIO. No. HON. Secretary of Finance. 1989 SALVADOR M. in his capacity as Commissioner of Customs. FERIA JR. petitioner. G. PACIFICO LAGLEVA. NEMECIO C.R. FELICITACION R. JOSE P. CORAZON RALLOS NIEVES. LEODEGARIO H. and Executive Secretary... BUREAU OF CUSTOMS. respondents. GLICERIO R.G. 1989 VICENTE A. COMMISSIONER. 83737 August 8. petitioners. LEONCIA CATRE. SUBAER PACASUM. AZARRAGA. LEONARDO JOSE. ABADIANO. No. CIVIL SERVICE COMMISSION. and Executive Secretary.. respondent. 81954 August 8. ABCEDE. MISON. MISON. HON. JOSE BARREDO. Secretary of Finance. DOLAR. AMASA and WILLIAM S. VICENTE JAYME. ROBERTO ABADA. respondents. DIONISIO. ESPIRITU. 1989 ADOLFO CASARENO. SALVADOR M. G. ABIOG. SALVADOR M. in her capacity as Chairman of the Civil Service Commission and SALVADOR MISON.R. AURORA . ABAD. GAMBOA.. ABLAZA. CATALINO MACARAIG. 1989 BENEDICTO L. LORENZO CATRE.R. JR. JR. TOMAS. HON. RENATO DE JESUS. ROBERTO ARNALDO. respondents. G. FLORESCA. 82023 August 8. NICASIO C. G. STO. FERMIN RODRIGUEZ. in his capacity as Commissioner of the Bureau of Customs.R. DALISAY BAUTISTA. MISON. VICENTE JAYME and HON. 85310 August 8. DENNIS A. SANTOS. vs. JOSE B. SISINIO T. ROGELIO C. PORFIRIO TABINO.R. GELUZ. in their respective capacities as Commissioner of Customs. PEDRO BAKAL... No.. petitioner. HON. ABACA. 1989 CESAR Z. vs. MISON. petitioner. COMMISSIONER SALVADOR M. and HON. ROSARIO DAVID. PATRICIA A. in their respective capacities as Commissioner of Customs. RODOLFO AFUANG. vs. vs. ZENAIDA LANARIA. ESTER TAN. CORNELIO NAPA.

..... JOSE G. NELSON I. BULEG. DYSANGCO. EDUARDO S. RODRIGO G. ALEX P... JUMAMOY. URSULINO C. AMADO A. EVANGELINO.M.. ANTONIO B. AMOS. MANUEL B. HUERTO. AGBAYANI. ANTONIO T. MARLOWE.. JAVIER. AMISTAD RUDY M. NORMA M...... FRANCIS F. . AQUINO. RODRIGO V... DEL RIO.. HONESTO G.. MA. DOLAR. CARINGAL. ALBA.. CALNEA. HADJI AKRAM B... FERNANDEZ... EDGARDO R... ARTEMIO M. AGUSTIN.. KAINDOY. SATA A. ILAGAN.. JR... Z. PASCASIO E. DEL CAMPO.. ANTONIO P. DANDAL.. ALMARIO. LABRADOR. CENIZAL.. RICARDO S. ROGELIO B. LAGLEVA.... ESPINA. CRUZ. CORONADO.. FELICITAS A. DE LA CRUZ. GUINTO... CRUZADO. LOURDES H.. GILBERT M. CALVO. GREGORIO. ISAIS. AMADOR L. EDILLOR. WILHELMINA T. CINCO.. GAGALANG. BARREDO. FRANCISCO. ULPLIANO U... GLICERIO R.. LAURO P. INFANTE. ROMUALDO R. FREDERICK R.. DALINDIN. DUAY. ALBERTO T... MELINDA M. VICTOR M. JUANA G. CORNETA..AGA.. CASTRO.. ATANGAN.... ORLANDO.. GODOFREDO L. JR... GALANG.. ESPALDON. GEMPARO.. NICANOR J.... ISMAEL. ERNESTO G. JOSEFINA F.. ASCAÑ.. RENATO V.. ESTURCO. MANUEL M. GUARTICO.. DOMINGO. WENCESLAO A.O.. CAMACHO.... LEONARDO. LABILLES. BAÑ. FLORDELIZ B.. ROBERT B. RAY C.. RODOLFO M. VIRGILIO M. CONDE0... WILLIAM R.. BERNAS... ESMERIA. HEIDY M. MYRNA N.. LAGA. ARCANGEL. LEONARDO A. BARTOLOME. DEMESA. GARCIA. ELEVAZO. EDNA MAE D.. ALCANTARA. MARCIANO S. AGUILUCHO MA... JR. ROBERTO S. REYNALDO C. FERMIN I.EZ.. ROMEO D.. RODOLFO C. ARABE. JUAN L. JR.. GRACIA Z. BIENVENIDO M.. CORCUERA. ARPON.. JOSE C. AGUILAR. JR. MILAGROS H. HONORATO C. NANIE G. DOMINGO. RODOLFO F. SEGUNDINA G.. HONRALES.. ALVEZ. TERESA R. LEOPAPA.. DE GUZMAN. ARREZA. JR. CARRANTO. BAYSAC. JULAHON P.. VICENTE S. JAVIER. VICTOR R.. FIDEL S. DIZON.A. DOMINGO F.. EFIGENIA B.. ERNESTO S... DE LA CRUZ. LILIAN V. RUDY L.. BALILIS R.. MERCEDES M. EDNA V. EVANGELINE G.. DE LA PEÑ. AUXILIADOR G. DABON. JR. GARCIA. PATRICIA J.. CRUZ. DOCTOR. VICTOR C. FRANCISCO C. CATELO. JR. WILFREDO G. ANDRES. ATIENZA... WILFREDO M. BACAL.. EDILBERTO A. DATUHARON. DE GUZMAN. RODOLFO C. DAZO. FELIPE A. CUSTODIO... ANDREW M. BONIFACIO T. SALIC L. GARCIA.. LAGMAN. GAVIOLA. ANTONIO C....... GAMBOA. ABUNDIO A.. EDEN F. AMMON H.... JOSE B. ANTONIO A. LORETO N. PELAGIO S. KOH.. FUENTES.. PASCUAL B. BOHOL... ESTER C. GUIANG. BARROS. AGRES ANICETO. JR.. HERNANDEZ. LAMPONG.. CARLOS.. JUMAQUIAO. ANTONIO C. JR.. DE CASTRO. JANOLO. REYNALDO S.. JOVEN. ALEXANDER R. ASUNCION.. FERRERA. LANNYROSS E. MEMIA A. JR... DIMAKUTA. CARUNGCONG. GOBENCIONG. ASLAHON.. FLOR... FRANCO A. PERFECTO V. ARVISU. MAXIMO F. CATURLA. REYNALDO V... ALEXANDER S.... ALFREDO P. FERRAREN... BERNARDO. ALFREDO M.. DELFIN C. FELIX. ANGELES. CARLOS V. CAPULONG.. ALBERTO R. LORNA S. CRUZ. JULIAN.. ANTONIO E. ALANO. LEOPOLDO H... PACIFICO Z. BRAVO. GRATE.. LORENZO B.. BELENO. ANOLIN. RENATO E. HULAR . BANTA.. CAMPOS. MAMERTO P. JAVIER. FIDEL U. IBAÑ. RICARDO S. LUCAS A. GAN. ARROJO. ESCUYOS. AGUSTIN S. RENATO F. ALBANO.. MARCIAL C.. LUISITO.

. ALBA. MARAVILLA.... RODOLFO V. REY. MANUEL E. JAIME B. PEREZ.LANDICHO. MORALES. MALIJAN. PASCASIO G. NAVARRO. JUANITA L... ANGELO L. ROCES. MALAWI... RAVAL.. REYNALDO S. NACION. PASTOR. ROLANDO S. FLORES. JESUS BAYANI M.. JULITA C.. BETTY R. OSORIO.. JR. VERAME. DONATO. JESUS R. REYES. CAMILO M.. ROSITA D. ISIDRO L. MEDINA.L. AIDA C. ARLENE R.. LAMBERTO N... PEDRITO S. CALO. SABLADA.. SORIANO.. RAMON S. MONFORTE. PELAYO. OMEGA. ORTEGA. ANGEL A. SHIRLEY S. ARNULFO A. MANUEL M. VICTOR O. RENATO B. MAYUGA... FREDRICK E. VICENTE R... CELSO. NIEVES. RAYMUNDO M. EULOGIA S. MELENCIO L. MIRAVALLES. RAY M. MONTERO. LEOPAPA C .. NORA M.... LILIAN T.. AMON. PAPIO. ERNESTO F. ORTEGA. PRUDENCIADO. RAMON P. MARCELO. GIL B. ARNOLD T. II. ROSARIO L. NESTOR P. PORTIA E... BENITO T. JR. TOLENTINO. RAMIREZ. MARILOU M. PERLITA C..... MACAISA. TECSON. MAGAT. LUZ L... ROSANES.. MANAHAN. MIL. CORNELIO B. LAURENTE. MELECIO C.. MENDOZA.. VERA. POTENCIANO G..... DONATO. JUAN M. OLIVIA. ZATA. JR. REYES.. ERNESTO T. REYES. MARTIN. TAN.... RESTITUTO A. VILLAR.... SALAZAR. MAGLAYA. CRISTETO. GIL C.. ROMEO M.. TAN.. EVARISTO R. LOURDES M. ESTER S. LICARTE.. GOROSPE. and VALDEZ. MALABANAN. FRANKLIN Z. ADAN I. SORIANO... NORMA Z.... MORALDE. RARAS.. MANUEL. REYES. PEREZ. RUANTO. REYNALDO A.. ESPERIDION B.... NAPA... EDGARDO I. SANTOS. MONTANO. III.. PASCUA.. LAPITAN.... RENATO. MORALES. TABIJE.. respondents.. LAZARO V. SALMINGO.. JESUS C. SEKITO. ENRICO T... MARTINEZ.. UMPA. VILLALUZ. LUCIO E.. BENJAMIN R. VILLALON. DE CASTRO. GALAROSA. LIPIO. PRE. OSCAR E. QUINONES. SATINA. G.. AUSTRIA. TURINGAN... ABELARDO T. ACHARON.. ERLINDA C. RUDY.. LOPEZ.ADA. REGALA. MATUGAS. GUILLERMO F. ABNER S.. NAPOLEON K. HENRY L. VASQUEZ. CENTENO.. PORFIRIO C... SEBASTIAN T... MALLI.. RAZAL. ROBERTO V. EUGENIO.. FELIPE S. QUIRAY... NICOLAS C... . MARIÑ. ESTELITA P... RUFINO A. ANASTACIA L. RAÑ. LEO Q. PETRONILO T. AMADEO C. PURA.. JAVIER M. ESMERALDO B. LITTAUA... PEÑ.. FLORENTINO T.. MAUYAG. JR. MONTENEGRO. TELESFORO F... EMELITA B.. MEDINA. MUNAR. ELPIDIO R. FRANCISCO T. JR. LIBERATO R... ROQUE. EMELITO V. DENNIS A.. HENRY N. ELPIDIO. JR. FRANCISCO M.. SIMON. TERESITA S. TAN. NICOLAS. VIOLETA V. JR.... ISIDRO A. BENIGNO A. CRISTO C. TEMPLO. JULITA S.. VIERNES.. ALFREDO C. RIVERA... MENDAVIA. SANTIAGO. NESTOR M.. ROSARIO. VELARDE. AVELINO I. MORALES.. OLAIVAR. MALIBIRAN. MURILLO.. NEMENCIO A.. NAGAL. VIADO. MAROKET. MATIBAG... ROSELINA M. EMMA B.A. NEJAL. PEDRO R. NICANOR B. MATUGAS. ANTONIO A.. JR. FERNANDO P. ANGELINA G. SUMULONG. ROBERTO P. PONCE F.. OLEGARIO. MARTINEZ.AS. QUINTOS. VICTORIA A. LUMBA. ALI A. CONCHITA D... SINGSON. EDGARDO C. SALIMBACOD... SILVERIA S. ROSITA L. VALDERAMA. SUNICO. MAGDALENA R. BEATRIZ B... ROSETE. COSME B. PUNZALAN..OZ.. VALIC. ERNESTO C. MACAISA. MUÑ... RODRIGO C.... AVELINO A... SALAZAR.

SUNICO. LAURO GREGORIO. MISON/BUREAU OF CUSTOMS and the CIVIL SERVICE COMMISSION.. QUINTONG.G.: The Court writes finis to this contreversy that has raged bitterly for the several months. respondents. EDGAR Y. J. ALBERTO I. MELENCIO L. ARABE BERNARDO S. MA. VICENTE S. itself biset with grave and serious problems. the issue will fester. JR. LEODEGARDIO H. vs. DELA PEÑ. ELPIO R. BELENO. ORTIZ. ADAN I. JOSE B. RAY C. AND PROVIDING FOR AN ORDERLY TRANSITION TO A . and ROMULO C. ABELARDO T.A. 3. RUDY M. AMISTAD. LITTAUA. 1989 SALVADOR M. BOHOL. CORNETA. AUXILIADOR C. FLORDELINA B. LEONARDO ELEVAZO. GREGORIO P. GAVIOLA. ANTONIO A. On March 25. MANUEL. No. 85335 August 8. MANUEL B. DIMAGUILA. CIVIL SERVICE COMMISSION. GOBENCIONG. MISON. FRANCISCO T. VASQUEZ. ADOPTING A PROVISIONAL CONSTITUTION. GAN. petitioners. ANGELINA G. The Court is apprehensive that unless the final word is given and the ground rules are settled. and likely foment on the constitutional crisis for the nation. COM. 1986. NEMENCIO A. MATUGAS.R. MANUEL ESCUYOS. QUINONES. LEONARDO A. FLORESCA. No. SALAZAR. SALVADOR M. RARAS.. CATURLA. MATUGAS. ROMEO P. ANICETO AGRES. ABIOG. petitioner. MATIBAG. G. ELY F. ANTONIO B. ISAIS. SILVERIA S. EDGARDO GALANG. ERNESTO T. RODRIGO C. in his capacity as Commissioner of Customs. REYES. 1989 FRANKLIN Z. MILAGROS ANOLIN. vs. NICANOR B. 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. LILLIAN V. President Corazon Aquino promulgated Proclamation No. GILVERTO M. RANADA. JR. MARTIN. SENEN S. J. "DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE. GARCIA. ARTEMIO ARREZA. LOPEZ. 86241 August 8. The facts are not in dispute. PROTECTING THEIR BASIC RIGHTS. ROSETE.R. BADILLO respondents SARMIENTO.

1986. eradicate unjust and oppressive structures.. if such is made within a period of one year from February 25. functions and responsibilities substantially pertain." Among other things. 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.. and the eradication of graft and corruption. Pursuant thereto. have likewise been questioned herein. "PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2. equipment. it was also provided: SECTION 1. buildings. with respect to elected local officials. The President shall give priority to measures to achieve the mandate of the people to: (a) Completely reorganize the government. 1 . 1986.. the President has issued a number of executive orders and directives reorganizing various other government offices. 2 Actually."3 Later on. receive the retirement and other benefits accruing thereunder. SECTION 4.GOVERNMENT UNDER A NEW CONSTITUTION. In case any office or body is abolished or reorganized pursuant to this Proclamation. 1986. SECTION 2. its FUNDS and properties shall be transferred to the office or body to which its powers. the President enacted Executive Order No.. efficiency. and all iniquitous vestiges of the previous regime. in her first act in office." Executive Order No. The records. Proclamation No. Any public officer or employee separated from the service as a result of the organization effected under this Proclamation shall. called upon "all appointive public officials to submit their courtesy resignation(s) beginning with the members of the Supreme Court. she abolished the Batasang Pambansa4 and the positions of Prime Minister and Cabinet 5 under the 1973 Constitution. with respect to appointed functionaries. has been challenged in this Court. if entitled under the laws then in force. ARTICLE III OF THE FREEDOM CONSTITUTION. Since then. when the President. 17. the reorganization process started as early as February 25. facilities and other properties of all government offices shall be carefully preserved. In the reorganization of the government. 3 provided: SECTION 1. SECTION 3. a number of which. 17 recognized the "unnecessary . 7 On May 28. priority shall be given to measures to promote economy. 6and two of which. .

4) Misuse of public office for partisan political purposes." the following: SECTION 3. incumbent Commissioner of Customs Salvador Mison issued a Memorandum. the President promulgated Executive Order No. 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. "REORGANIZING THE MINISTRY OF FINANCE. and prescribed as "grounds for the separation/replacement of personnel. Three days later.anxiety and demoralization among the deserving officials and employees" the ongoing government reorganization had generated. 127 provided for the reorganization of the Bureau of Customs 10 and prescribed a new staffing pattern therefor. Commissioner Mison addressed several notices to various Customs officials. Commissioner Mison constituted a Reorganization Appeals Board charged with adjudicating appeals from removals under the above Memorandum. in the nature of "Guidelines on the Implementation of Reorganization Executive Orders. 127. 1988. On January 6. in the tenor as follows: Sir: . It also provided: 1. 11 the Filipino people adopted the new Constitution. 2) Existence of a probable cause for violation of the Anti-Graft and Corrupt Practices Act as determined by the Mnistry Head concerned. 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. 13 On the same date. 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. 1988. or b) offered another position in the same department or agency or c) informed of their termination.8 On January 30." 12 prescribing the procedure in personnel placement. 14 On January 26. 1988. on February 2. Executive Order No. By February 28." 9 Among other offices. 1987. 1987. 3) Gross incompetence or inefficiency in the discharge of functions.

MISON Commissioner15 As far as the records will yield. GELUZ 11. LEODEGARIO H. or the Bureau of Customs in particular. we regret to inform you that your services are hereby terminated as of February 28. Sincerely yours. ADOLFO CASARENO 4. Pursuant to Section 59 of the same Executive Order. CORAZON RALLOS NIEVES 10. and that those incumbents whose positions are not carried in the new reorganization pattern. the following were recipients of these notices: 1. 3. ESPIRITU 6. PACIFICO LAGLEVA 5. JR. all officers and employees of the Department of Finance. CESAR DARIO 2. DENNIS A. RENATO DE JESUS 8. GAMBOA 9. FELICITACION R. rules and regulations. JULIAN C. 1988. In the meantime. NICASIO C. Please be informed that the Bureau is now in the process of implementing the Reorganization Program under Executive Order No.appointed. 127. (Sgd) SALVADOR M. 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. Subject to the normal clearances. or who are not re. In this connection. FLORESCA . shall be deemed separated from the service. VICENTE FERIA. you may receive the retirement benefits to which you may be entitled under existing laws. shall continue to perform their respective duties and responsibilities in a hold-over capacity. AZARRAGA 7.

ROBERTO ABADA 32. PEDRO BAKAL 27. PORFIRIO TABINO 23. DOLAR 16. PABLO B. ESTER TAN 26. LORENZO CATRE 30. SISINIO T. SANTOS 18. JOSE BARREDO 24. ROSARIO DAVID 28. JOSE B. JOSE P . ABACA.12. SUBAER PACASUM 13. ABADIANO. FERMIN RODRIGUEZ 19. RODOLFO AFUANG 29. ORTIZ 15. ALBERTO LONTOK 22. ROBERTO ARNALDO 25. 33. CORNELIO NAPA 17. LEONARDO JOSE 21. GLICERIO R. DALISAY BAUTISTA 20. ABjAD. 34. LEONCIA CATRE 31. ROGELIO C. ZENAIDA LANARIA 14.

45. AGUILAR. AGUSTIN S. 42. 54. 49. ROBERT B. ARCANGEL. 53. JOSE G. 57. 43. RUDY M. MILAGROS H. ROMUALDO R. JR. 36. 39. AGRES. ALEX P. . AGBAYANI. AMISTAD. 38. AURORA M. ABCEDE. AQUINO. ALBANO. JR. NEMECIO C. ULPIANO U. AGUILUCHO. FLOR 41.35. 44. ANICETO 40. AGUSTIN. ABIOG. TERESA R. MELINDA M. 55. MAXIMO F. ANOLIN. RICARDO S. 52. 56. ALVEZ. ELY F. NELSON I. PASCASIO E. ALANO. ALBA. 46. 48. AMOS. ALCANTARA. L. RODOLFO F. ARABE. ARPON. BONIFACIO T. FRANCIS F. JR. ALMARIO. 51. RODRIGO V. MA. ANDRES. ABLAZA. ANGELES. 50. 47. 37..

CALVO. 76.58. BULEG. 61. BACAL URSULINO C. ASCAÑ. 72. MERCEDES M. 66. VICTOR M.AGA. REYNALDO S. 80. 79. ANTONIO T. ALEXANDER R. BELENO. 78. BERNAS. BOHOL. 65. ATANGAN. 70. 77. FELIPE A. ARVISU. ARTEMIO M. CALNEA. 75. 60. ALEXANDER S. 59. ARROJO. LORNA S. BARTOLOME. AUXILIADOR G. ROMEO D. 68. ANTIENZA. JULAHON P. BARROS. 64. CARLOS V. BRAVO. ASUNCION. VICTOR C. ALBERTO T. JR. VICTOR R. BANTA. ANTONIO P. BERNARDO. BAÑ. . ANTONIO B. 71. 63. 74.O. HONESTO G. BALILIS R. 62. 73. MARCIANO S. BAYSAC. CAMACHO. ARREZA. 69. MARLOWE Z. ASLAHON. 67.

CARUNGCONG. CATELO. EDNA MAE D. CRUZ. 95. 84. CUSTODIO. GRACIA Z. JOSE C. 91. 98.. 96. DANDAL. VICENTE S. RODRIGO G. DABON.NORMA M. 97. DALINDIN. . 99. 89. EDUARDO S. 93. RODOLFO M. EFIGENIA B. 103. CENIZAL. CAPULONG. 83. RODOLFO C.81. 94. CARRANTO. CINCO. CASTRO. CARLOS. CRUZ. 87. 82. CONDE. PATRICIA J. FIDEL S. LORENZO B. 100. EDILBERTO A. CRUZ. JR. NORMA M. RICARDO S. MANUEL B. EDEN F. FIDEL U. CRUZADO. CORONADO. 85. CARINGAL. 102. LUISITO 92. CORCUERA. CAMPOS. ROGELIO B. CORNETA. 90. 86. ALFREDO M. 101. JOSEFINA F. CATURLA. 88.

.. DE CASTRO. MANUEL M. JR. DIZON. DE LA CRUZ. DE LA CRUZ. DEMESA. 121. 119. FELICITAS A. ALFREDO P. AMADO A. DE GUZMAN. LOURDES H. ANTONIO A. MAMERTO P. RENATO E.104. ESMERIA. FRANCISCO C. 122. 111. DAZO.. 117. 116. LEONARDO A 124. HEIDY M. DEL RIO. ELEVAZO. DEL CAMPO. ESCUYOS. ESPALDON. SALIC L. DOMINGO. MA. DE GUZMAN. DIMAKUTA. GODOFREDO L. 118. DOCTOR. DOMINGO. ORLANDO 113. 114. DYSANGCO. JR.. DE LA PEÑ. 108. PERFECTO V.A. EDILLOR. 105. 125. 115. 126. 123. JR. 120. DATUHARON. DUAY. NICANOR J. RENATO F. SATA A. LEOPAPA 107. JR. 106. JUANA G.. ANTONIO E. WILHELMINA T. LEONARDO 112. 109. 110.

129. ANTONIO C. 130. 139. ESTURCO. MYRNA N. PELAGIO S. LILIAN V. 145. EVANGELINO. GOBENCIONG. ANTONIO C. FELIX. RENATO V. ERNESTO G. GILBERT M. FLORDELIZ B. 144. AMMON H. GARCIA. 147. JR. LAURO P. GREGORIO. GARCIA. . WENCESLAO A. 136. FERMIN I. 141. GEMPARO. 142. GRATE. ESPINA. EDNA V. 146. FRANCISCO. ALBERTO P 140. GARCIA. 133. 128. GAMBOA. 137. 131. JUAN L. EDGARDO R. GAVIOIA. GAGALANG. GAN. FREDERICK R. FRANCO A. RODOLFO C.127. 143. FUENTES. 132. GALANG. FERRAREN. GUARTICO. 149. GUIANG. FERRERA. 138. 135. 148. ANDREW M. 134. FERNANDEZ. RUDY L. SEGUNDINA G.

JAVIER. RAY C. 163. 168. 156. 169. LABILLES. LUCAS A. AMADOR L. 160. BIENVENIDO M. HONORATO C. HADJI AKRAM B. JUMAMOY. 166. ROBERTO S. IBAÑ. HULAR. JUMAQUIAO. REYNALDO C. 155. 171.. PASCUAL B. LANNYROSS E. JAVIER. WILFREDO M. 167. ESTER C. WILLIAM R. 161. LORETO N. KAINDOY. ISAIS. VIRGILIO M. GUINTO. DOMINGO F. HONRALES. HUERTO. JULIAN. 165. NANIE G. KOH. MEMIA A. JAVIER.EZ.150. DELFIN C. 159. LEOPOLDO H. 158. LAGA. ILAGAN. . JANOLO. 157. REYNALDO V. ABUNDIO A. LABRADOR. 153. JR. INFANTE. 170. 152. ERNESTO S. 162. HERNANDEZ. 164. JOVEN. 172. 154. ISMAEL. 151.

AS. 195. MAGLAYA. 194. MARCELO. GIL B. MACAISA. GIL C. OLIVIA R. 192. 189. 178. LAPITAN. ELPIDIO R. 177. 180. MANAHAN. MARAVILLA. REYNALDO A. EVANGELINE G. FERNANDO P. MALIJAN. BENITO T. RODOLFO V. 174. 191. . WILFREDO G. MARIÑ. 182. 185. ERLINDA C. RESTITUTO A. ELPIDIO 186. MALIBIRAN. MANUEL. 176. JAVIER M. 193. LAURENTE. CAMILO M. FRANKLIN Z. 175. 187. LUMBA. 179. RAMON S. 188. MAGAT. 190. 181. MALABANAN. MALLI. MELENCIO L. LAGMAN. LOPEZ. EVARISTO R. LAMPONG. 184. VICTOR O. ALFREDO C. LANDICHO. ROSITA D. LITTAUA. LAZARO V.173. LIPIO. LICARTE. 183. MACAISA.

209. ESMERALDO B. MENDAVIA.OZ. MONTANO. MAROKET . JR. MONFORTE. EUGENIO. . POTENCIANO G. MEDINA. SHIRLEY S. 204.196. MORALDE. 212. AVELINO 207. 199. MONTERO. VICENTE R. JUANITA L. 203. ANGELINA G. NESTOR M. 205. ROMEO M. 200. NESTOR P. MIRAVALLES. 218. 206. ROLANDO S. 198. MARTINEZ. RAY M. MATUGAS. 197. 201. 216. MARTIN. MORALES. MAYUGA. 208. MENDOZA. MARTINEZ. 211.JESUS C. MUÑ. ERNESTO T. ANASTACIA L. JUAN M. MORALES. III 213. 210. 202. MATUGAS. FRANCISCO T. NEMENCIO A. L 215. MEDINA.. MUNAR. 217. ROSELINA M. MATIBAG. JR. MORALES. G. CONCHITA D. ERNESTO F. MIL. PORTIA E. 214.

RUFINO A. ISIDRO A. 229. OSORIO. PASCUA. 241. HENRY N. ESPERIDION B. . JESUS R. PAPIO FLORENTINO T. ARNOLD T. 235. SEBASTIAN T. 237. ARNULFO A. EULOGIA S. 231. PEDRO R. NICOLAS. 227. 228. 226. 223. MANUEL M. OLAIVAR. LEO Q. II 232. 225. PRUDENCIADO.A. LAMBERTO N. ROSARIO 234. PEREZ. MURILLO. NACION. ORTEGA. ROSARIO L. PUNZALAN. ABNER S. AIDA C. PEREZ.219. 230. 221. HENRY L. PEÑ. 224. PELAYO. NAGAL. NEJAL FREDRICK E. JESUS BAYANI M. PRE. 220. 238. 236. NAVARRO. 233. ARLENE R. PASTOR. ORTEGA. OLEGARIO. 222. 239. PURA. REYNALDO S. 240. NIEVES.

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

279. VASQUEZ. 277. TAN. LILIAN T. VALIC. LUCIO E. BENIGNO A. NICANOR B. VELARDE. 272. RAMON P. SANTIAGO. AVELINO A. EMMA B. SORIANO. JULITA S. 280. ALI A. 266. SIMON. ESTER S. LOURDES M. 278. EMELITA B. 274. SEKITO. TAN. PORFIRIO C. 287. 275. 271.265. SATINA. SORIANO. MELENCIO C. ABELARDO T . 286. TOLENTINO. VERA. RUDY GOROSPE 276. 281. VERAME. BEATRIZ B. 270. TABIJE. SALMINGO. UMPA. . 268. 282. 269. MAGDALENA R. TURINGAN. ENRICO T JR. OSCAR E. SINGSON. TAN. COSME B JR. 283. EDGARDO C. 284. ANGELO L. VIADO. TECSON. SUNICO. 267. 285. 273.

LUZ L. 300. NORA M. CALO. CELSO 309. 308. 310. LUZ L. VALDERAMA. 303. MALAWI. . PEDRITO S. 292. 294. DONATO. DENNIS A. CRISTETO 295. JAIME B. 301. EMELITO V. CENTENO. AMON. 298. FRANSISCO M. VIERNES. MONTENEGRO. FELIPE S 302. VALDEZ. 299. 291. TEMPLO. 297. SANTOS. VILLALON. ANGELA JR. FLORES. ALBA. RAYMUNDO M.288. GUILLERMO P. 293. DONATO. JULITA C. AUSTRIA. RENATO 304. BENJAMIN R. 290. MAUYAG 305. NAPOLEON K 289. OMEGA. VILLAR. ESTELITA P. ACHARON. GALAROSA. VILLAR. 306. ZATA. ERNESTO C. 307. PETRONILO T. RENATO B. 296. VILLALUZ.

Dolar. 81954. Mesdames Corazon Rallos Nieves and Felicitacion R. the dispositive portion of which reads as follows: WHEREFORE. Messrs. Messrs.R. Ms. is the petitioner in G. Ms. Ester Tan. Leodegario H. Alberto Lontok. 2. 81967. The first thirty-one mentioned above came directly to this Court. Floresca. Pedro Bakal. and Roberto Abaca. Dennis A. are the petitioners in G. Azarraga Renato de Jesus. Gamboa. Daligay Bautista. No. Cornelia Napa. 82023. and where investigations have been finished. 85310. The filing of appropriate administrative complaints against appellants with derogatory reports or information if evidence so warrants. No. however.R. render the appropriate decisions. A number supposedly sought reinstatement with the Reorganization Appeals Board while others went to the Civil Service Commission.Cesar Dario is the petitioner in G. As far as the records will likewise reveal. Adolfo Caserano Pacifico Lagleva Julian C. the last 279 16 individuals mentioned are the private respondents in G. be interpreted as an exoneration of the appellants from any accusation of wrongdoing and. the 279 private respondents in G. represented by the Solicitor General. Gliceria R. Ms. Proceeding with investigation of appellants with pending administrative cases. on September 20. 1988. Zenaida Lanaria Mr. to promptly. Commissioner Mison. Rodolfo Afuang. 17 a total of 394 officials and employees of the Bureau of Customs were given individual notices of separation.. filed a motion for reconsideration Acting on the motion. Jose B.R. Porfirio Tabino Jose Barredo. Ms. Santos. This action of the Commission should not. Nicasio C. Pablo B. Fermin Rodriguez.R. 85310.R. the Civil Service Commission promulgated its ruling ordering the reinstatement of the 279 employees. No. Roberto Arnaldo. Appellants be immediately reappointed to positions of comparable or equivalent rank in the Bureau of Customs without loss of seniority rights. Geluz Messrs. their reappointments are without prejudice to: 1. No. Messrs. Espiritu. Ms. Rosario David. Leoncia Catre. denied reconsideration. it is hereby ordered that: 1.. therefore. No. On June 30. 1988. Leonardo Jose. SO ORDERED. the Civil Service Commission. Lorenzo Catre. Ortiz. 2. Jr. 1988. 19 . Vicente Feria. 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. 18 On July 15. Subaer Pacasum Ms.

their reappointments are without prejudice to: 1. 9. 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 . including casuals and temporary employees. On November 16. if entitled thereto. who have been separated pursuant to reorganization shall. if any. Appellants be immediately reappointed to positions of comparable or equivalent rank in the Bureau of Customs without loss of seniority rights. as G. 85310 of this Court. be interpreted as an exoneration of the herein appellants from any accusation of any wrongdoing and therefore. all officers and employees. Unless also separated for cause. 6656. to promptly. Under Section 7. his petitioner has been docketed herein as G. No. it is hereby ordered that: 1. All officers and employees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act.On October 20. "AN ACT TO PROTECT THE SECURITY OF TENURE OF CIVIL SERVICE OFFICERS AND EMPLOYEES IN THE IMPLEMENTATION OF GOVERNMENT REORGANIZATION. the Civil Service Commission further disposed the appeal (from the resolution of the Reorganization Appeals Board) of five more employees. The employees ordered to be reinstated are Senen Dimaguila. holding as follows: WHEREFORE." 22was signed into law. as above-stated. if any. and Romulo Badillo. Commissioner Mison instituted certiorari proceedings with this Court. Proceeding with investigation of appellants with pending administrative cases. 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. render the appropriate decisions. Bemardo Quintong. 1988.R. No. 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. 1989. The filing of appropriate administrative complaints against appellant with derogatory reports or information. and where investigations have been finished. Romeo Arabe. and if evidence so warrants. 1988.R. Commissioner Mison challenged the Civil Service Commission's Resolution in this Court. SO ORDERED. 21 On June 10. and 2. and 2. 86241. This action of the Commission should not. docketed. thereof: Sec.Gregorio Reyes. Republic Act No. however.1988. 20 On January 6.

R. On October 21. failure to exhaust administrative remedies. 1988. 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. the standing of certain parties to sue. 83737. Alexander Padilla. subject to certain conditions. we resolved to set the matter for hearing on January 12. the parties.R. we resolved to consolidate all seven petitions. On November 29. The petition is docketed as G.ñèt Former Senator Ambrosio Padilla also appeared and argued as amicus curiae Thereafter. At the said hearing. 24 The Court understands that the parties are agreed on the validity of a reorganization per se the only question being.R.1988 Resolution filed their own petition to compel the Commissioner of Customs to comply with the said Resolution. (b) retired Justice Lino Patajo. Such separation pay and retirement benefits shall have priority of payment out of the savings of the department or agency concerned. thirty-five more Customs officials whom the Civil Service Commission had ordered reinstated by its June 30. The petition is docketed as G. the reorganization of the Bureau of Customs — by mandate not only of the Provisional Constitution. Lester Escobar (e) Atty. supra. in which he represented the Bureau of Customs and the Civil Service Commission). (c) former Dean Froilan Bacungan (d) Atty. there is a recognition. On the same date. 85335. as shall be later seen: What is the nature and extent of this government reorganization? The Court disregards the questions raised as to procedure. represented by their counsels (a) retired Justice Ruperto Martin. That application for clearance has been filed and no action thereon has been made by the corresponding department or agency. Benedicto Amasa and William Dionisio. 25 and other technical objections. customs examiners appointed by Commissioner Mison pursuant to the ostensible reorganization subject of this controversy. 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. No. of their appeals as the case may be: Provided. It should also be noted that under the present Constitution. presented their arguments. 1989. There is no question that the administration may validly carry out a government reorganization — insofar as these cases are concerned.lâwphî1. Solicitor General Francisco Chavez argued on behalf of the Commissioner of Customs (except in G. that a government reorganization may be legitimately undertaken. we resolved to require the parties to submit their respective memoranda which they did in due time. 85335. petitioned the Court to contest the validity of the statute. "[b]ecause of the demands of public interest. albeit implied. including the need for stability in the . 23 On June 23. 1988. for two reasons. 1988. Faustino Tugade and (f) Atty. No.

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. 1988. 1988. it was filed on time. a decision arrived at without rational deliberation. The records show that the Bureau of Customs had until July 15. 27 or under Republic Act No. We reject.32 Since the Bureau's petition was filed on October 20.R. 807. but on the Philippine bureaucracy in general. indeed. on the other hand. 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. has implications not only on the entire reorganization process decreed no less than by the Provisional Constitution. it ordained that the Commission's actuations be instead 'brought to the Supreme Court on certiorari". orders and rulings of the Commission "subject to review by the Supreme Court'. 28 or under the Constitution. The framers of the new Constitution must be presumed to have definite knowledge of what it means to make the decisions. 807. 6656. 1988. Nos. arbitrariness and caprice. contentions that the Bureau's petition (in G. under Rule 65 of the Rules of Court. 85310) are. or omission to weigh pertinent considerations. 1988 to ask for reconsideration or come to this Court pursuant to Section 39 of Presidential Decree No. a copy of this Resolution was received by the Bureau on September 23. And since instead of maintaining that provision intact. peaceful and honest elections. We cannot insist that there was no intent to change the nature of the . finally. 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. and is therefore bereft of any basis as a petition for certiorari under Rule 65 of the Rules of Court.public service. 29 are likewise rejected. 1988. 1988 to elevate the matter on certiorari to this Court. 33 We find that the questions raised in Commissioner Mison's petition (in G. The urgings in G. 34 as distinguished from questions that require "digging into the merits and unearthing errors of judgment 35 which is the office. 85335 and 85310. The records likewise show that the Solicitor General filed a motion for reconsideration on July 15. that the Civil Service Commission's Resolution dated June 30. 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. 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.R.31 Hence the Bureau had until October 23. 85310) raises no jurisdictional questions.30 The Civil Service Commission issued its Resolution denying reconsideration on September 20."26 and because of the serious implications of these cases on the administration of the Philippine civil service and the rights of public servants.R. proper for certiorari. of review under Rule 45 of the said Rules. if by "jurisdictional questions" we mean questions having to do with "an indifferent disregard of the law.

under the general rule that a motion for reconsideration should preface a resort to a special civil action. order.R. other than the main decision. with respect to the former.R.' " 39 which in turn suggests an appeal by petition for review under Rule 45. so is the Civil Service Commission the single arbiter of all controversies pertaining to the civil service. of the Civil Service Commission. 1988. order. we accept Commissioner Mison petition (G. It should also be noted that under the new Constitution. as Aratuc tells us. as under the 1973 Charter. 81967. 1988 (the date the Resolution. 81954. No. 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.1988. an aggrieved party has thirty days within which to challenge "any decision. As the poll body is the "sole judge" 37 of all election cases. with respect to the Commission on Audit). While Republic Act No. complaints that justify certiorari under Rule 65. is well known in remedial law. We come to the merits of these cases. certiorari precisely lies in the absence of an appeal. he would have been faulted for demanding certiorari too early. 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. Therefore. To say that the period should be counted from the Solicitor's receipt of the main Resolution. It is to be stressed that the Solicitor General had thirty days from September 23.36 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. compared to a review." 38 which. denying reconsideration. 82023. when. dated June 30. precisely. we reiterate that it has been filed seasonably. That is also to place him at a "no-win" situation because if he did not move for a reconsideration. and the civil service. a proper subject of certiorari. and 85335: . 6656 states that judgments of the Commission are "final and executory"40 and hence. As we stated. or ruling of each Commission may be brought to the Supreme Court on certiorari. under the Constitution. Nos. "any decision. was received) to commence the instant certiorari proceedings. or ruling" 42 of the Commission. dated September 20. 85310) which clearly charges the Civil Service Commission with grave abuse of discretion. remedy. considering that the limited scope of certiorari. G. 43Hence. As to charges that the said petition has been filed out of time. under Rule 65. with respect to the latter (or the audit of government accounts. "technically connotes something less than saying that the same 'shall be subject to review by the Supreme Court. although it may not have so stated in explicit terms. we must reckon the thirty-day period from receipt of the order of denial. unappealable. 41 Accordingly. the Constitution gives him such a right.

supra. 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. 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. 81954.The Case for the Employees The petitioner in G. in a holdover capacity.R. And like Dario he claims that under the 1987 Constitution. No. rules and regulations.51 Like Dario Vicente Feria. Those separated from the service shall receive the retirement benefits to which they may be entitled under existing laws. Cesar Dario was one of the Deputy Commissioners of the Bureau of Customs until his relief on orders of Commissioner Mison on January 26. but. which he alleges was upon the authority of Section 59 of Executive Order No. 17 (1986) or Article III of the Freedom Constitution. 59. 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. 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. as the case may be. 1988. 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. that under the Provisional Constitution. 127. the officers and employees of the Ministry shall. the power to dismiss public officials without cause ended on February 25. Upon approval of this Executive Order. he questions the legality of his dismiss. finally.50 and that thereafter. Otherwise. 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. so he further maintains. 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. hereinbelow reproduced as follows: SEC. increased it to three. public officials enjoyed security of tenure under the provisions of the 1987 Constitution. they shall be paid the equivalent of one month basic salary for every year of service.R. No.44 a provision he claims the Commissioner could not have legally invoked. has absorbed that which has been abolished. 1987. New Structure and Pattern. the petitioner in G. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service." 49 He claims. In essence. rather. was a Deputy Commissioner at the Bureau until his separation directed by Commissioner Mison. 47 Nor can it be said. he has acquired security of tenure and that he cannot be said to be . 81967.

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 is applicable (in particular."52 the Commissioner of Customs has the power "[t]o appoint all Bureau personnel. 127." By virtue of said provision. De la Paz 58 because that case supposedly involved a mere transfer and not a separation. He further states that the deadline prescribed by the Provisional Constitution (February 25. which was meant to implement the Provisional Constitution. He adds that under Executive Order No.R. 1986 and the reorganization following the ratification of this Constitution. collectors and examiners in venous ports of the Philippines. The petitioners in G. finally. "ENLARGING THE POWERS AND FUNCTIONS OF THE COMMISSIONER OF CUSTOMS. the force and effect of Executive Order Nos. 17 and 39 for the reason that Executive Order No. 127. Section 59 of Executive Order No. He rejects. Mison submits that contrary to the employees' argument. Anent Republic Act . Moreover. under the Executive Order. "which means that all those positions were considered vacant. Mison posits. and that. under Executive Order No. and since the dismissed employees had not been reappointed. having been appointed on April 22. 39. 39. 3 dated March 25. Arroyo. and career civil service employees may be separated from the service without cause as a result of such reorganization. No. the Commissioner relies on this Court's resolution in Jose v. 59 had ceased to have force and effect upon the ratification of the 1987 Constitution." 57 The Solicitor General denies the applicability of Palma-Fernandez v." 53 and that his position. which is that of a Presidential appointee. 82023. they cannot be validly dismissed from the service.covered by Section 59 of Executive Order No. the transitory provisions thereof. 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. 1987) as this very Court has so declared in Jose v. depends on either retention of the position in the new staffing pattern or reappointment of the incumbent. the reorganization of the Bureau of Customs under Executive Order No.55 For this reason. Mison proffers that under Section 59 incumbents are considered on holdover status. say. they had been considered legally separated. 1986 — during the effectivity of the Provisional Constitution. The Case for Commissioner Mison In his comments. 17. is beyond the control of Commissioner Mison for purposes of reorganization. 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. 1987) has been superseded by the 1987 Constitution. specifically. claims of violation of security of tenure are allegedly no defense. except those appointed by the President. 56 which allows a reorganization thereafter (after February 25. Arroyo54 in which the following statement appears in the last paragraph thereof: The contention of petitioner that Executive Order No. 127 may continue even after the ratification of the Constitution. 127 is violative of the provision of the 1987 Constitution guaranteeing career civil service employees security of tenure overlooks the provisions of Section 16. to Dario and Feria in the sense that retention in the Bureau. on the other hand.

Arroyo. 1988. (2) the Resolution. The Ruling of the Civil Service Commission The position of the Civil Service Commission is as follows: 1. 2. denying reconsideration. There was faithful compliance by the Bureau of the various guidelines issued by the President. 6656 is of doubtful constitutionality. 127. The Commissioner's arguments are as follows: 1. in particular. information on file with the Commission shows that Commissioner Mison has been appointing unqualified personnel. and selection of personnel for appointment under the new staffing pattern. 2." 62 4. reinstating five employees. Republic Act No. 1988. G. "which means that all positions are declared vacant. there is no showing that the reorganization in question has been carried out for either purpose — on the contrary. 5. 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. 6656 protects security of tenure in the course of reorganizations. 6656. as to deliberation. 3. Arroyo has declared the validity of Executive Order No. did not countenance illegal removals. Nos.No. 1988. 127 under the transitory provisions of the 1987 Constitution. 4. Republic Act No. and (3) the Resolution. 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. Reorganizations occur where there has been a reduction in personnel or redundancy of functions. Jose v. under Section 59 of Executive Order No. . dated November 16. The separated employees have been. the dismissals now disputed were carried out by mere service of notices.R. on mere holdover standing. The current Customs reorganization has not been made according to Malacañ. dated June 30. reinstating the 265 customs employees above-stated. in validating Executive Order No. 3.ang guidelines. dated September 20. Jose v. 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. 127.

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. or agencies.The Court's ruling Reorganization. This provision also applies to career officers whose resignation. We quote: Sec. 125 transportation & Communications). of the 1935 Constitution: Section 4. 119 (Health). 128 (Science & Technology). 120 (Tourism). Fundamental Principles of. and 133 (Trade & Industry) were all promulgated on January 30. 127 (Finance). 129 (Agrarian Reform). 1988. 131 (Natural Resources). 123 (Social Welfare & Development). the above provision comes as a mere recognition of the right of the Government to reorganize its offices. 126 (Labor & Employment). 132 (Foreign Affairs). All officers and employees in the existing Government of the Philippine Islands shall continue in office until the Congress shall provide otherwise. bureaus. Article XVII. tendered in line with the existing policy. instrumentalities. Under Section 4. 124 (Public Works & Highways). 16. 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.1987. Culture & Sports). Article XVI. of the 1973 Charter: . The core provision of law involved is Section 16 Article XVIII. 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. at the option of the employees. 6656. which came much later. In lieul thereof. except Republic Act No. had been accepted. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. and (2) It is the single existing law on reorganization after the ratification of the 1987 Charter. 116 (covering the Ministry of Agriculture & Food). and instrumentalities. including government-owned or controlled corporations and their subsidiaries. 65 Under Section 9. if such appointment is made within a period of one year from the date of the inauguration of the Commonwealth of the Philippines. [Nota been Executive Orders No. 3 dated March 25. 117 (Ministry of Education. on June 10. prior to the adoption of the Constitution on February 2. they may be considered for employment in the Government or in any of its subdivisions. 1987].64 It is also to be observed that unlike the grants of power to effect reorganizations under the past Constitutions. — I. of the 1987 Constitution.

66 The Freedom Constitution is. plainly and simply because the Constitution allows it. the Government is not hard put to prove anything. in the sense that the latter provides for "automatic" vacancies. if such is made within a period of one year from February 25. 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. 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. the Government is obliged to prove good faith. At this point. As we have seen. and 1986 counterparts had so stated. as its 1935. 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. . indeed. couched in similar language: SECTION 2. What is. apparent is the fact that if the present Charter envisioned an "automatic" vacancy. 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. since 1935. 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. as earlier seen. or (2) It meant to put a stop to those 'automatic" vacancies." there is no provision for "automatic" vacancies under the 1987 Constitution. to its conferment or authorization under Proclamation No. transition periods have been characterized by provisions for "automatic" vacancies. transition periods are characterized by provisions for "automatic" vacancies. it should have said so in clearer terms. 3 (Freedom Charter) and the second. it is ambiguous. referring as it does to two stages of reorganization — the first.68 In case of removals undertaken to comply with clear and explicit constitutional mandates.67 Other than references to "reorganization following the ratification of this Constitution. 1986. By itself. however. 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. 1973. 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. In the latter case. Evidently. 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). to its implementation on its effectivity date (February 2. Invariably.

1987. PADILLA On the query of Mr. the authority to remove public officials under the Provisional Constitution ended on February 25. one negative and the other positive. And the separation contemplated must be due to or the result of (1) the reorganization pursuant to Proclamation No. it would be better to use the phrase "reorganization before or after the ratification of the Constitution' to simplify the Section. 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. to exclude those career civil service employees separated "for cause. to allow reorganization. 1986.1987). We turn to the records of the Constitutional Commission: INQUIRY OF 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. 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. that whatever reorganization is taking place is upon the authority of the present Charter. in order to be entitled to the benefits granted under Section 16 of Article XVIII of the Constitution of 1987. 3 dated March 25." In other words. 3 and even those affected by the reorganization during the Marcos regime. 70 It Can only mean. 69 Simply. must concur. Mr. and 2. 1987. Padilla whether there is a need for a specific reference to Proclamation No. 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. and (3) the resignations of career officers tendered in line with the existing policy and which resignations have been accepted. to wit: 1. advanced by jurisprudence to February 2. Padilla pointed out that since the proposal of the Commission on Government Reorganization have not been implemented yet. inasmuch as there are two stages of reorganization covered by the Section. the separation must be due to any of the three situations mentioned above. the provision benefits career civil service employees separated from the service. the separation must not be for cause. By its terms. (2) the reorganization from February 2. Mr.lâwphî1. Mr. Second. The phrase "not for cause" is clearly and primarily exclusionary. it should have said so in clear terms. on behalf of the Committee. Additionally. 1987. Mr. 3 and not merely state "result of the reorganization following the ratification of this Constitution'.ñèt But as we asserted. replied that it is necessary. . two requisites. 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. then. Suarez.

incumbent officials and employees have acquired security of tenure. 17. 1987. and to ensure that only those found corrupt. This is apparent from Executive Order No. the President was. and prescribed guidelines for personnel action. however. We are through with reorganization under the Freedom Constitution — the first stage. and unfitness to render public service. upon the mantle of its provisions and safeguards. which established safeguards against the strong arm and ruthless propensity that accompanies reorganizations — notwithstanding the fact that removals arising therefrom were "not for cause. particularly in the career civil service. We quote. Finally. 1986: WHEREAS. We are on the second stage — that inferred from the provisions of Section 16 of Article XVIII of the permanent basic document. which is not a deterrent against separation by reorganization under the quondam fundamental law. is that notwithstanding her immense revolutionary powers.* The President's Memorandum of October 14. in which we categorically declared that after February 2. as we said. Commissioner Mison would have had a point. graft. For then. and the monopoly of power in the men and women who wield it." and in spite of the fact that such removals would have been valid and unquestionable. in part: . we also have the democratic character of the Charter itself. the Chief Executive saw. had it been a reorganization under the revolutionary authority. It also warrants our holding in Esguerra and Palma- Fernandez. magnanimous in her rule.and necessarily. the power to remove government employees would have been truly wide ranging and limitless. it can not be legitimately stated that we are merely continuing what the revolutionary Constitution of the Revolutionary Government had started. she said on May 28. nevertheless. This is confirmed not only by the deliberations of the Constitutional Commission. What must be understood. of course. insofar as he contends that the reorganization is open-ended ("progressive"). inefficient and undeserving are separated from the government service. Despite that. in order to obviate unnecessary anxiety and demoralization among the deserving officials and employees. supra. specifically of the Provisional Constitution. not only because Proclamation No. Specifically. 71 Noteworthy is the injunction embodied in the Executive Order that dismissals should be made on the basis of findings of inefficiency. but is apparent from the Charter's own words. 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. 1987 should furthermore be considered. 3 permitted it. Hence. there is the concern of the State to ensure that this reorganization is no "purge" like the execrated reorganizations under martial rule. but because of the nature of revolutionary authority itself. And. the "unnecessary anxiety and demoralization" in the government rank and file that reorganization was causing. its totalitarian tendencies.

The remark anent separation "without cause" was therefore not necessary for the disposition of the case. Extent. Evidently. De la Paz comes as a later doctrine. supposedly extended the effects of government reorganization under the Provisional Constitution to the regime of the 1987 Constitution. Arroyo would be inconsistent with the earlier pronouncement of Esguerra and the later holding of Palma-Fernandez. (Jose v. set in motion. 1987. it would seem that the Commissioner would have been powerless. in any event. Palma-Fernandez v. and Limitations of. First. I have ordered that there will be no further layoffs this year of personnel as a result of the government reorganization. Arroyo was promulgated on August 11. the opinion expressed therein that "[b]y virtue of said provision the reorganization of the Bureau of Customs under Executive Order No. 72 Assuming. Further to the Memorandum dated October 2. Jose v. We dismissed Jose's petition 75 primarily because it was "clearly premature."78 Secondly. and purely anticipatory.) It is well-established that a later judgment supersedes a prior one in case of an inconsistency. As we have suggested. Reorganization under the 1987 Constitution. 1987 on the same subject. 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." 76 it appearing that the reorganization of the Bureau of Customs had not been. Jose v. is: Did Arroyo.77 it was held that an obiter dictum "lacks the force of an adjudication and should not ordinarily be regarded as such. The question. Thirdly. In Morales v. 1987 while Palma-Fernandez was decided on August 31. 3 — which . Arroyo is an unsigned resolution while Palma Fernandez is a full-blown decision. based merely on newspaper reports which do not show any direct or threatened injury. 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. if Arroyo indeed so ruled. clarified. the latter has a special weight. Parades. even if we accepted his "progressive" reorganization theory. Arroyo73 is said to be the authority for this argument. the first stage being the reorganization under Proclamation No. which was enough basis to dismiss the petition. however. Hence. in fact. ourselves. although both are en banc cases. 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. speculative. to order dismissals at the Customs Bureau left and right. Nature. While a resolution of the Court is no less forceful than a decision. — The controversy seems to be that we have. 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. Arroyo. then. then. the transitory provisions of the 1987 Constitution allude to two stages of the reorganization. Jose therefore had no cause for complaint.

Be that as it may. Hence. the present organic act requires that removals "not for cause" must be as a result of reorganization. There is an invalid "abolition" as where there is merely a change of nomenclature of positions. Arroyo permitted a reorganization provided that it is done in good faith. When. Otherwise. envisioned a purgation. 83 It is to be stressed that by predisposing a reorganization to the yardstick of good faith. as a component of a reorganization under a constitutional regime. As we have demonstrated. no dismissal (in case of a dismissal) or separation actually occurs because the position itself ceases to exist." there is no contradiction in terms here because. we cannot be said to have carried over reorganization under the Freedom Constitution to its 1987 counterpart. 82 or where claims of economy are belied by the existence of ample funds. However. we are not. 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. no valid "abolition' takes place and whatever "abolition' is done. or otherwise not in good faith. but a test well-established in democratic societies and in this government under a democratic Charter. reorganization under the aegis of the 1987 Constitution is not as stern as reorganization under the prior Charter. And in that case. while the former Constitution left the axe to fall where it might. 80 Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. is done for political reasons or purposely to defeat sty of tenure. under Republic Act No. the Constitution does not provide for "automatic" vacancies. if the "abolition. when we spoke. as a consequence. 81 As a general rule. Retrenchment in the course of a reorganization in good faith is still removal "not for cause. we are told: . 6656. therefore. In that event. is judged from the facts of each case. Arroyo is not necessarily incompatible with Palma-Fernandez (or Esguerra). Whereas the latter. in Arroyo.had already been consummated — the second stage being that adverted to in the transitory provisions themselves — which is underway. As we observed. 79 which may possibly justify removals "not for cause. is void ab initio. the same cannot be said of the reorganization inferred under the new Constitution because. the new Constitution seeks to usher in a democratic regime. security of tenure would be an insuperable implement. 127 after the ratification of the 1987 Constitution. Arroyo permitted a reorganization under Executive Order No. precisely. of reorganization after the effectivity of the new Constitution. we referred to the second stage of the reorganization. It must also pass the test of good faith — a test not obviously required under the revolutionary government formerly prevailing." if by "cause" we refer to "grounds" or conditions that call for disciplinary action." which is nothing else but a separation or removal. Finally.** Good faith. sans the President's subsequently imposed constraints. security of tenure would not be a Chinese wall. imposing a "cause" for restructuring. a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. Accordingly.

consolidation of offices. pursuant to a bona fide reorganization. A valid cause for removal exists when. 86 This betrays a clear intent to "pack" the Bureau of Customs. in the sense. The records indeed show that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as of August 18. striking down Executive Order No. (c) Where incumbents are replaced by those less qualified in terms of status of appointment. say. 1987 no perceptible restructuring of the Customs hierarchy — except for the change of personnel — has occurred. has not been successfully contradicted 85 There is no showing that legitimate structural changes have been made — or a reorganization actually undertaken. a position has been abolished or rendered redundant or there is a need to merge. 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 for repugnancy to the Constitution. which would have validly prompted him to hire and fire employees. still and all. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. of course. 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. He did so. he was aware that layoffs should observe the procedure laid down by Executive Order No. or other lawful causes allowed by the Civil Service Law. or consolidate positions in order to meet the exigencies of the service. for that matter — at the Bureau since Commissioner Mison assumed office. 2. 87Finally. the means with which it was implemented is not. Lack of Good Faith in. performance and merit. There can therefore be no actual reorganization to speak of. We are not. SEC. 88 . which would have justified (an things being equal) the contested dismisses. While the act is valid. 17. (b) Where an office is abolished and another performing substantially the same functions is created. in defiance of the President's directive to halt further layoffs as a consequence 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. or abolition thereof by reason of economy or redundancy of functions. (e) Where the removal violates the order of separation provided in Section 3 hereof. divide. of reduction of personnel. but a revamp of personnel pure and simple. — The Court finds that after February 2. Reorganization of the Bureau of Customs. or lack of it. 1988. (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. 127 already prevailing when Commissioner Mison took over the Customs helm. furthermore. 84 It is in light hereof that we take up questions about Commissioner Mison's good faith.

we said in no uncertain terms: The argument that. 127. No. . elected or appointed." He submits that because the 394 removed personnel have not been "reappointed. 127 had been on a mere holdover status cannot mean that the positions held by them had become vacant. Section 59 (on non-reappointment of incumbents) of Executive Order No.. But such a reorganization should be subject to the criterion of good faith. with respect to Deputy Commissioners Cesar Dario and Vicente Feria. De la Paz. they being Presidential appointees.. Palma-Fernandez vs. al. Under Executive Order No. the Commissioner's appointing power is subject to the provisions of Executive Order No. supra." 89 Accordingly. 39. — With respect to Executive Order No. 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. 31 August 1987). Commissioner Mison submits that under Section 59 thereof. et al. Secondly. under Section 59 of Executive Order No. In Palma- Fernandez. Benjamin B. and as we have asserted. 1987 (De Leon v. vs. Commissioner Mison could not have validly terminated them. Section 59 has been rendered inoperative according to our holding in Palma-Fernandez. 127. Esguerra. finally.Executive Order No. Jr. "[t]hose incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. 39. To begin with. on the basis of this provision. without cause but only before the effectivity of the 1987 Constitution on February 2.. is untenable. 78059. Esquerra. that we are not barring Commissioner Mison from carrying out a reorganization under the transitory provisions of the 1987 Constitution. et. After the said date the provisions of the latter on security of tenure govern. 1987 when the 1987 Constitution became effective (De Leon." they are considered terminated. 90 It should be seen. — In resume. G. we restate as follows: 1. the Commissioner of Customs may "appoint all Bureau personnel. supra). Resume. Hon. The President could have validly removed government employees. but advanced to February 2. except those appointed by the President. 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).R. Specific Case of. 127 cannot be a basis for termination. in this connection. That Customs employees.

1988. We recognize the injury Commissioner Mison's replacements would sustain. AND 86241. In brief. Act No. 1988. NOVEMBER 16.R. AND 85335 ARE GRANTED." separations thereunder must nevertheless be on account of a valid reorganization and which do not come about automatically. 16. 81954. We also commisserate with them.R. Otherwise. 81967. DATED JUNE 30. 3.) G.2. 6656. But our concern is the greater wrong inflicted on the dismissed employees on account of their regal separation from the civil service. it also acknowledges the possibility of the leadership using the artifice of reorganization to frustrate security of tenure.R. 82023. 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. 9). ARE AFFIRMED. it has installed safeguards. dismissed employees shall be paid separation and retirement benefits or upon their option be given reemployment opportunities (CONST. 6656. THE RESOLUTIONS OF THE CIVIL SERVICE COMMISSION. sec. 1989.R. 6656.R. Act No. There is nothing unconstitutional about the Act. SEPTEMBER 20. (Rep. it can be seen that the statute itself recognizes removals without cause. G. No. 92 runs counter to the transitory provisions of the new Constitution on removals not for cause. No. INVOLVED IN G. THE PETITIONS IN G. WHEREFORE. 1987. NOS. 1988. that such a reorganization is made in good faith. insofar as it strengthens security of tenure 91 and as far as it provides for a retroactive effect. sec.R. Moreover. AND MAY 8.R. (1987). 83737 is a challenge to the validity of Republic Act No. 85310 AND 86241 ARE DISMISSED. supra] provided. NOS. 85310. 85335. [1987]. For this reason. 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. 85310. 83737. No. Rep. In such a case. From February 2. 1988. XVIII. supra. As we have indicated. the State does not lose the right to reorganize the Government resulting in the separation of career civil service employees [CONST. 83737. security of tenure may be invoked. THE COMMISSIONER OF CUSTOMS IS ORDERED TO REINSTATE THE EMPLOYEES SEPARATED AS A RESULT OF HIS NOTICES DATED JANUARY 26. THE PETITIONS IN G. art. it is argued that the Act. NOS. NO. INVOLVED IN G. NO COSTS. It can be seen that the Act. However. . 83737 This disposition also resolves G.

IT IS SO ORDERED.

Gutierrez, Jr., Paras, Gancayco, Bidin, Cortes, Griñ;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 en masse 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)

Executive Order No. 17 was issued "Prescribing Rules and Regulations for the Implementation of Section 2. Article III of the Freedom Constitution' providing. if such is made within a period of one year from February 25. 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. . including the identification of sensitive positions which require more rigid assessment of the incumbents. Section 3. the Head of each Ministry shall see to it that the separation or replacement of officers and employees is made only for justifiable reasons. 1986. receive the retirement and other benefits accruing thereunder. Thereafter. as follows: Section 1. and shall complete such review/assessment as expeditiously as possible but not later than February 24. on the basis of such review and assessment shall determine who shall be separated from the service. 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. Section 2. 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. inter alia. to prevent indiscriminate dismissal. Section 3. if entitled under the laws then in force. Section 2 of the Freedom Constitution. xxx xxx xxx The Ministry concerned shall adopt its own rules and procedures for the review and assessment of its own personnel. 1987 to prevent undue demoralization in the public service. Separation from the service shall be effective upon receipt of such notice. The Ministry Head concerned. In the course of implementing Article III. Any public office or employee separated from the service as a result of the reorganization effected under this Proclamation shall. (Emphasis ours) On 28 May 1986. xxx xxx xxx ARTICLE III — GOVERNMENT REORGANIZATION Section 2. of personnel in the career civil service whose qualifications and performance meet the standards of public service of the New Government. either personally by the official or employee concerned or on his behalf by a person of sufficient discretion.

3. 5. Gross incompetence or inefficiency in the discharge of functions. approximately thirteen (13) in all. except those appointed by the President. Section 11. he is hereby authorized. 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. 1 were issued in respect of the other executive departments. Section l(a) and Article III of the Freedom Constitution. presidential appointees. as follows: xxx xxx xxx SECTION 1. 39 was issued by the President "Enlarging the Powers and Functions of the Commissioner of Customs". transfer. or officials and employees removed pursuant to disciplinary proceedings under the Civil Service Law and rules. Existence of a probable cause for violation of the Anti-Graft and Corrupt Practice Act as determined by the Ministry Head concerned. Executive Order No. reemployment and other personnel action. detail. The relevant provisions relative to the Bureau of Customs read: RECALLING that the reorganization of the government is mandated expressly in Article II. dismiss or otherwise penalize erring Bureau officers and employees. 5. In addition to the powers and functions of the Commissioner of Customs. This Executive Order shall not apply to elective officials or those designated to replace them. reassignment. b) To discipline. suspend. 4. xxx xxx xxx On 30 January 1987. Executive Order No." Similar Orders. involving officers and employees of the Bureau of Customs. c) To act on all matters pertaining to promotion. 5 (1986). casual and contractual employees. reinstatement. subject to the Civil Service Law and its implementing rules and regulations: a) To appoint all Bureau personnel. HAVING IN MIND that pursuant to Executive Order No. (Emphasis supplied) On 6 August 1986. it is directed that the necessary and proper changes in the organizational and functional structures of the . Misuse of Public office for partisan political purposes. 127 was issued "Reorganizing the Ministry of Finance. 2. and to those laid off as a result of the reorganization undertaken pursuant to Executive Order No.

Reorganization. 55. the officers and employees of the Ministry shall. xxx xxx xxx SEC. but in no case shall such payment exceed the equivalent of 12 months salary. 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. 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. . 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. Executive Order No.. BELIEVING that it is necessary to reorganize the Ministry of Finance to make it more capable and responsive. 17 (1986) or article III of the Freedom Constitution. its agencies and instrumentalities. structurally and functionally. as the case may be. be effected in order to promote efficiency and effectiveness in the delivery of public services. 59. in its primary mandate of judiciously generating and efficiently managing the financial resources of the Government. Bureau of Customs. rules and regulations. 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. in a holdover capacity. .. SEC.government.. — Upon approval of this Executive Order. — All units not included in the structural organization as herein provided and all positions thereof are hereby deemed abolished. SEC. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. hereinafter referred to as Ministry. — The Ministry of Finance. 2. Abolition of Units Integral to Ministry. Their personnel shall be entitled to the benefits provided in the second paragraph of Section 59 hereof.. Otherwise. . 33. Those separated from the service shall receive the retirement benefits to which they may be entitled under the existing laws. SEC. is hereby reorganized. in accordance with the provisions of this Executive Order. organizationally and functionally. its subdivisions and instrumentalities in order to attain the socio-economic objectives of the national development programs. New Structure and Pattern.

Section 67 — All laws. or agencies. rules. Article XVIII entitled Transitory Provisions. Ms provision also applies to career officers whose resignation. 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. as well as sensitive to the dislocating consequences arising from specific personnel decisions. there were 7. No. has been accepted. there are 6. On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of Reorganization Executive Orders" was issued reading. and in particular the process of separation from service. they may be considered for employment in the Government or in any of its subdivisions. supra. including government owned or controlled corporations and their subsidiaries. Padilla. was provided for in its Section 16. . regulations and other issuances or parts thereof. 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. which are inconsistent with this Executive Order. On 22 September 1987. G. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. at the option of the employees. instrumentalities. 3 dated March 25. The entire process of reorganization.302 positions while under the new staffing pattern.. 1. vs. the present Constitution took effect (De Leon.530 positions CSC Resolution in CSC Case No. In lieu thereof. 3. 1987153 SCRA 602). On 24 May 1987 the then Commissioner of Customs. Said Department gave its imprimatur. dated 20 September 1988. August 31. reading: Section 16. must be carried out in the most humane manner possible. are hereby repealed or modified accordingly. insofar as revelant to these cases. tendered in line with the existing policy. xxx xxx xxx (Emphasis ours) On 2 February 1987. et al. 78059. Under the old staffing pattern. Alexander A. 3-4). Reorganization in the Government service pursuant to Proclamation No. Thereafter. Salvador M. Esguerra. pp. Mison assumed office as Commissioner of Customs. transmitted to the Department of Finance for approval the proposed "position structure and staffing pattern" of the Bureau of Customs. ordinances. the staffing pattern was transmitted to and approved by the Department of Budget and Management on 7 September 1987 for implementation.R. as follows: It is my concern that ongoing process of government reorganization be conducted in a manner that is expeditious.

1987. In the event of an offer for a lower position. adherence to due process. if any. Each department/agency shall constitute a Reorganization Appeals Board at the central office.. on or before October 21. dated 22 December 1987. Said request was granted in a letter-reply by Executive Secretary Catalino Macaraig. 5. informed of their reappointment or b. to review or reconsider appeals or complaints relative to reorganization. 127 dated 30 January 1987. Placement in the new staffing pattern of incumbent personnel shall be completed prior to the hiring of new personnel. c. d written notification of the action taken and the grounds thereof. b. All cases submitted to the Boards shall be resolved subject to the following guidelines: a. Jr. xxx xxx xxx 4. . For this purpose. By October 21. 1987. all employees covered by the Executive Orders for each agency on reorganization shall be: a. there will be no reduction in the salary. 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. offered another position in the same department/ agency or c. publication or posting of the appeal procedure promulgated by the Department Secretary. the following guidelines shall be strictly followed: 1. Action by the Appeals Review Board does not preclude appeal to the Civil Service Commission. 2. informed of their termination. disposition within 30 days from submission of the case.

. 127. 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. be included in a consolidated list compiled by the Civil Service Commission. and insure that the best qualified and most competent personnel in the career service are retained.On 6 January 1988. providing inter alia: To effectively implement the reorganization at the Bureau of Customs. 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. By February 28. within the extended period requested. the employee shall: a. informed of their termination. Balde for appointment to President Aquino as one of three (3) Deputy Commissioners under Executive Order No. the following guidelines are hereby prescribed for the guidance of all concerned 1. 1988. 127 and the grace period extended to the Bureau of Customs by the President of the Philippines on reorganization shall be: a. and c. Commissioner Mison recommended Jose M. All departments who are recruiting shall give preference to the employees in the list. In fact. be guaranteed the release of separation benefits within 45 days from termination and in no case later than June 15. dated 20 September 1988. 1988. informed of their reappointment. continue to receive salary and benefits until February 28. 1988 all employees covered by Executive Order No. 2. p. particularly in the selection and placement of personnel. 1. In the event of termination. or b. and b. 6). 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. offered another position in the same department or agency or c. in a letter dated 27 January 1988.

6656. On 20 June 1988 Motions were filed. including casuals and temporary employees. who have been separated pursuant to reorganization shall.. invoking the provisions of Republic Act No. 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. 6656. All officers and employees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act. 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. 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. be paid the appropriate separation pay and retirement and other benefits under existing laws within ninety (90) days from the . (e) Where the removal violates the order of separation provided in Section 3 hereof. A valid cause for removal exists when. if entitled thereto. a position has been abolished or rendered redundant or there is a need to merge. pursuant to a bona fide reorganization. performance and merit. The President signed it into law on 10 June 1988 and the statute took effect on 29 June 1988. or consolidate positions in order to meet the exigencies of the service. in these cases pending before this Court. 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... The relevant provisions thereof read: SECTION 1. (c) Where incumbents are replaced by those less qualified in terms of status of appointment. Republic Act No. xxx xxx xxx SECTION 9. or other lawful causes allowed by the Civil Service Law. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. divide. (b) Where an office is abolished and another performing substantially the same functions is created. during the pendency of these Petitions. (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. Unless also separated for cause. all officers and employees. 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.In the interim.

1987. 3 dated March 25. 3. 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. That application for clearance has been filed and no action thereon has been made by the corresponding department or agency. SECTION 16 clearly recognizes (1) the reorganization authorized by Proclamation No. which speaks of. The executive branch of the government shall implement reorganization schemes within a specified period of time authorized by law. 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.. Such separation pay and retirement benefits shall have priority of payment out of the savings of the department or agency concerned. (paragraphing supplied). The rights and benefits under this Act shall be retroactive as of June 30. Art. All laws. 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. for brevity). To our minds. and (3) that the reorganization pursuant to Proclamation No. xxx xxx xxx (Emphasis ours) Given the foregoing statutory backdrop. 1986 and the reorganization following the ratification of this Constitution . (2) that such separation is NOT FOR CAUSE but as a result of the reorganization pursuant to said Proclamation. the issues can now be addressed. XVIII. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. xxx xxx xxx SECTION 13. . 3 may be continued even after the ratification of the 1987 Constitution during the transition period. Scope of Section 16. xxx xxx xxx SECTION 11. rules and regulations or parts thereof. 1987 Constitution Crucial to the present controversy is the construction to be given to the abovementioned Constitutional provision (SECTION 16.. inconsistent with the provisions of this Act are hereby repealed or modified accordingly. In the case of the 1987 reorganization of the executive branch.

When SECTION 16 speaks. 3 to Continue Transitorily Even After Ratification By its very context." Bernas The Constitution of the Republic of the Philippines: A Commentary. "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. requires due process. and dismissal NOT FOR CAUSE. Vol. 334) The guarantee of removal FOR CAUSE is enshrined in Article IX-B. 3 from the operation of Article IX-B. Reorganization Pursuant to Proclamation No. which states that 'No officer or employee of the civil service shall be removed or suspended except FOR CAUSE provided by law." No valid reason has been advanced for a different treatment after ratification as the majority opines i. which implies that the latter is not bound by the "fetters' of due process. Substantive due process would require that suspension or dismissal be 'for cause'. Section 2(3). Section 2(3) of the 1987 Constitution. 3 even after ratification of the Constitution and during the transition period. separation can only be FOR CAUSE.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.e. p. becomes readily apparent. 1988." There can be no question then as to the meaning of the phrase FOR CAUSE. .. The two [2] stages contemplated. it can only mean the diametrical opposite. p. thereafter. that separation NOT FOR CAUSE is allowed before ratification but that. of separation from the service NOT FOR CAUSE. A distinction is explicitly made between removal FOR CAUSE. (1) the stage before and (2) after ratification. 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. procedural due process would require that suspension or dismissal come only after notice and hearing. It simply means the observance of both procedural and substantive due process in cases of removal of officers or employees of the civil service. First Edition. SECTION 16 envisages the continuance of the reorganization pursuant to Proclamation No. That means a guarantee of both procedural and substantive due process. Basically. namely. which as aforestated. therefore. refer to the same nature of separation "NOT FOR CAUSE but as a result of Proclamation No. The constitutional intent to exempt the separation of civil service employees pursuant to Proclamation No. 3.. 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. II. 615).

3. and the reorganization. at least transitorily. Mr. if the committee feels there has been reorganization before ratification and there be reorganization after.' Are those words necessary? Can we not just say 'result of the reorganization following the ratification of this Constitution'? In other words. 3 was "one year from February 25. that this would be applicable to those reorganized out pursuant to the Freedom Constitution also. SUAREZ. I do not believe in it. 3. 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. Thus: Mr. Mr. 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. That is understood if there has been a reorganization before the ratification or a reorganization after the ratification.That the reorganization commenced pursuant to Proclamation No. 3? Mr. we just say 'before or after the ratification of this Constitution. Section 2). providing for the reorganization of departments of government. because in truth there has been a reorganization by virtue of Proclamation No. there are two stages of reorganization covered by this section. Yes. with the statement into the records. But whether that has already been implemented or not. 1987. SUAREZ. must we make specific reference to Proclamation No. but I do not think it has been implemented. Executive Order No. were all dated 30 January 1987 or prior to the plebiscite held on 2 . If we want to include any previous reorganization after or before the ratification. It was also to beat that deadline that EO 127 and similar issuances. PADILIA. confronted with the reality of the ratification of the Constitution before that deadline without reorganization having been completed. 17 itself provided that the review/assessment of personnel be completed "not later than February 24." But. Vol. Presiding Officer. PADILLA. 416) (Emphasis provided) It should also be recalled that the deadline for the reorganization under Proclamation No. 5. SUAREZ. 1986. In other words. I think the committee feels that is necessary. PADILLA. Mr. 1987. 3 was envisioned to continue even after the ratification of the 1987 Constitution. I understand there is a reorganization committee headed by a minister? Mr. PADILLA. 1986" (Article III. Something like this as a result of the reorganization effected before or after the ratification of the Constitution on the understanding. p. on lines 2 to 5 is the clause 'pursuant to the provisions of Article III of Proclamation No. Mr. Philippine Commission on Government Reorganization. or up to February 24. issued on March 25. There has been a plan. there was need for a provision allowing for its continuance even after ratification and until completed. Mr." (RECORDS of the Constitutional Commission.

J. 211 La. v. by the way. namely "1) that the . D. 102 N. (Emphasis ours) With due respect to the majority. The intent to continue and complete the reorganizations started is self. 78435. 2d 709. (Crescent Ring Co. 29. Arroyo. (G. we disagree with its conclusion that the foregoing pronouncement is mere "obiter dictum. US." Petitioner batted for the affirmative of the proposition. 1987). August 11.J..lâwphî1.ñèt It is language unnecessary to a decision. 3 as mandated by SECTION 16. speculative and purely anticipatory" inasmuch as petitioner therein had "not received any communication terminating or threatening to terminate his services. 107. 127 is violative of the provision of the 1987 Constitution guaranteeing career civil service employees security of tenure overlooks the provision of Section 16.evident in SECTION 16. 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. the reorganization of the Bureau of Customs under Executive Order No." It may be that the Court dismissed that Petition for being premature. No.February 1987. was to continue even after ratification when we stated: The contention of petitioner that EO No. 51. 301. however. By virtue of said provision. 712. 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. 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. we recognized that the reorganization pursuant to Proclamation No. 127. 20 N. So. Law 85) or not necessary for the decision Du Bell v." But that was only one consideration. 85 U. It is an expression of opinion by the court or judge on a collateral question not directly involved. 2d. The Court still proceeded to decide all the issues adversatively contested by the parties. Misc." An obiter dictum or dictum has been defined as a remark or opinion uttered.R. Union Central Life Ins. et al. Co. In the case at bar. 167). 176 F2d 49. 12). 167). 106. In Jose vs. (a) ruling on an issue not raised. It is a statement of the court concerning a question which was not directly before it (In re Hess 23 A. Art. or (an) opinion of a judge which does not embody the resolution or determination of the court. 1986 and the reorganization following the ratification of the Constitution. and is made without argument or full consideration of the point (Lawson v. App. Travelers Indemnity Co.C. 3 dated March 25. 132 A. 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.S. which was a Petition for certiorari and Prohibition to enjoin the implementation of Executive Order No. 298.

" They were ultimate issues directly before the Court. vs.. April 15. Ed. et al. After the d date the provisions of the latter on security of tenure govern.. is untenable. US. Esguerra. 331. 194. v. and lead up to the final conclusion (Northern Pac. 1 987 fixed by Section 2 of Proclamation No. See also Wisconsin Power and Light Co. D. any one of which is sufficient to determine the ultimate issue. American Cartage Co. U. but advanced to 2 February 1987 when the 1987 Constitution became effective (De Leon. 286 N. 303 U. 31 August 1987. a point expressly decided does not lose its value as a precedent because the disposition of the case is made on some other ground. on the basis of this provision (Section 26 of Executive Order No.C.W. 160 SCRA 751). 1986. 78946. or the 'Reorganization Act of the Ministry of Health'). N..S. et al. G. 186 N. 3. Van Dyke v. Public Utilities Comm. 72 L. 3 on which said Executive order is based had already lapsed. .C. Ct. Ct. v.. 68 L. Cal. 3 F. 1110. D. and none of such points can be regarded as having merely the status of a dictum (See U.. so that any resolution thereon must be considered as authoritative precedent. Ry Co. the case is an authoritative precedent as to every point decided. No. 119.expiration date of February 25. 472. 1. therefore. (Richmond Screw Anchor Co.S. (2d) 455). Suppl." The ruling of the Court. 48 S. 303)" It is true that in Palma-Fernandez vs. 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. 28 F 2d 617) Where a case presents two or more points. 94 F2d 687 certiorari granted 58 S. which are presented and decided in the regular course of the consideration of the case. but the court actually decides all such points. 265 U. Ed. 82 L. et al. and not a mere dictum (See Valli v. 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. 621. the lapse of the period mandated by Proclamation No. Accordingly. (2d) 35) and one point should not be denied authority merely because another point was more dwelt on and more fully argued and considered. on the Constitutional issues presented. See also Weedin v. (Wagner v. Baker.R. we had stated: The argument that. 275 U.And this rule applies as to all pertinent questions although only incidentally involved. Ed. 153 SCRA 602). Ct. City of Beloit 254 NW 119.. particularly. Chase v. 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). 598.. . 78059.S. 368).J.S. No. expressly decided in the course of the consideration of the case.. de la Paz (G.. City of Detroit. 44 S. Hon.R. v. Tayokichi Yamada 4 F. and the validity of EO 127. 1092.W. Such resolution would not lose its value as a precedent just because the disposition of the case was also made on some other ground. Wash. cannot be said to be mere "obiter. 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.S. 760. Title Insurance and Trust Co. Com Products Refining Co. v. Parker 83 F.

The factual situation in the two cases. 1987. however. too. 1987. and not because she was being reorganized out by virtue of EO 119 or the "Reorganization Act of the Ministry of Health. it was the former Commissioner of Customs. On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of Reorganization Executive Orders" provided: By October 21. much less invoked in the Palma- Fernandez case. In the cited case. radically differ. June 10. June 1. Palma- Fernandez. it was transmitted to and approved by the Department of Budget and Management on 7 September 1987 for implementation. EO 230 (Reorganization Act of NEDA). effected on 29 May 1987. 1987. And so it was that SECTION 16 was never mentioned. EO 193 (Reorganization Act of the Office of Energy Affairs). the petitioner. on this point. Related to that issue was the vital one of whether or not her transfer. there were 7. on 24 May 1987. Executive Order No. There were. Significant. 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. Under the old staffing pattern. all employees covered by the Executive orders for each agency on reorganization shall be: . 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. Separation from the service as a result of reorganization was not involved. there are 6. transmitted to the Department of Finance for approval the proposed "position structure and staffing pattern" of the Bureau of Customs. 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).530 positions. EO 297 (Reorganization Act of the Office of the Press Secretary). Padilla who. 1987. As stated heretofore. or the Civil Service Decree. July 25. Alexander A. 127. namely.302 positions while under the new staffing pattern. July 22. The aforesaid conclusion is contradicted by the records. Thereafter. This was approved by the Department of Finance. July 25. it is inaccurate for the majority to state that there were no reorganization orders after ratification." although the said Act was invoked after the fact. 807. is the fact that the transfer was basically made "in the interest of the service" pursuant to Section 24(c) of PD No. dated 30 January 1987. 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. 1987. 1987. Finally. EO 181 (Reorganization Act of the Civil Service Commission). EO 262 (Reorganization Act of the Department of Local Government). Dra. was tantamount to a removal without cause.

16 and 17 of the majority opinion. 41. By October 21. 1988.quoted portion of the Malacanang Memorandum of 2 October 1987. Arroyo.. supra). which reads: 1. informed of their termination. on 28 January 1988. 1988) (Emphasis supplied) . No. (Opinion No. . after the Supreme Court resolved to dismiss the petition for certiorari questioning its enforceability. within the extended period granted. Ordoñ.ez. the issue as to the constitutionality of Executive Order No. 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. informed of their reappointment. The records further show that upon Commissioner Mison's official inquiry. It is enough that they be 'informed of their termination' pursuant to section 1(c) of the Memorandum dated October 2. 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. Secretary of Justice Sedfrey A. 127 is set at rest. On 6 January 1988. or b. 1987. effective on 28 February 1988. s. It is believed that customs employees who are reorganized out in the course of the implementation of E. offered another position in the same department or agency. 1987 of President Aquino. Pursuant thereto. Commissioner Mison addressed uniform letters of termination to the employees listed on pages 15. for lack of merit (see Jose vs. all employees covered by the Executive orders for each agency on reorganization shall be: xxx xxx xxx c) Informed of their terminations. (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. rendered the following Opinion: .O. March 3. or c. a. 127. . et al. 127 (reorganizing the Department of Finance) need not be informed of the nature and cause of their separation from the service. xxx xxx xxx Regarding your (third) query. 2(4) (sic). he issued Bureau of Customs Memorandum "Re Guidelines on the Implementation of Reorganization Executive Orders" reiterating the above.

however. That requirement. supra. 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 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. 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. Thus The Executive Order shall not apply to elective officials or those designated to replace them. accomplished by 28 February 1988. and to those laid off as a result of reorganization undertaken pursuant to Executive Order No. 45. 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. which are inconsistent with this Executive Order. I have ordered that there will be no further layoffs this year of personnel as a result of the government reorganization." 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. the records show that the final selection and placement of personnel was done by a Placement Committee. is shown by its introductory portion reading: . No. (Emphasis ours) That EO 127 was issued pursuant to or in implementation of EO 5. in fact. casual and contractual employees. Gotladera likewise periodically consulted by Commissioner Mison." (Annex 16. or officials and employees removed pursuant to desciplinary proceedings under the Civil Service law and rules. namely. Rollo. 1987 on the same subject. 5. To further show lack of good faith. 411. must be deemed superseded by later developments. does not appear in Section 59 of EO 127. citing OP Memo of 14 October 1987. presidential appointees. Purificacion Cuerdo The appointment of employees made by Commissioner Mison was based on the list approved by said Placement Committee. 85310) Moreover. namely. the majority states that Commissioner Mison failed to observe the procedure laid down by EO 17. Celerina G.The former Chairman of the Civil Service Commission. which was. one of whose members is the Head of the Civil Service Commission Field Office. Decision) The foregoing. (p. ordinances or parts thereof. Mrs." Moreover. reading: Further to the Memorandum dated October 2. G.R. are hereby repealed and modified accordingly. But the majority further faults Mison for defying the President's directive to halt further layoffs as a consequence of reorganization. however. Section 11 of EO 17 explicitly excepts from its coverage a reorganization pursuant to EO 5. p.

2. Recalling that the reorganization of the government is mandated expressly by Article II. RA 6656 clashes frontally with SECTION 16. It is concerned with the individual approach where the particular employee involved is charged administratively and where the requisites of notice and hearing . or other lawful causes allowed by the Civil Service law. a position has been abolished or rendered redundant or there is a need to merge. valid cause. abolition of. (c) Where incumbents are replaced by those less qualified in terms of status of appointment. (Italics supplied) Constitutionality of Republic Act No. 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. 5 (1986). Proclamation No.g. or consolidate positions in order to meet the exigencies of the service. (b) Where an office is abolished and another performing substantially the same functions is created. effectuates the "progressive" type of reorganization dictated by the exigencies of the historical and political upheaval at the time. (e) Where the removal violates the order of separation provided in Section 3 hereof. The "traditional" type is limited in scope. 3. on the other hand. A valid cause for removal exist when. And yet. Having in mind that pursuant to Executive order No. it is directed that the necessary and proper changes in the organizational and functional structures of the government. It would not be remiss to quote the provision again: SEC. to test the good faith of Commissioner Mison. (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. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. or redundancy of offices. 6656 entitled an "Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization. We are of the view. Section 1 (a) and Article III of the Freedom Constitution. 6156) The standards laid down are the "traditional" criteria for removal of employees from the career service. 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. 3 may be separated NOT FOR CAUSE. 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. (Republic Act No. pursuant to a bona fide reorganization. e. RA 6656 requires the exact opposite — separation FOR CAUSE. due notice and hearing. be effected in order to promote efficiency and effectiveness in the delivery of public service. divide. 6656 The majority also relies on Republic Act No. its agencies and instrumentalities. however. performance and merit." particularly Section 2 thereof. that in providing for retroactivity in its Section 13.

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

Beckham 178 U. US CA2 NY 199 F 2d 642. in fact. 6656. 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. Baker v. however. 548. should be declared UNCONSTITUTIONAL for being repugnant to the letter and spirit of Section 16. it could do a lot of good. A civil service employee does not have a constitutionally protected right to his position. and the Resolutions of the Civil Service Commission. 3 dated March 25. Fernan. Wilson. 1187. and removal therefrom will not support the question of due process" Yantsin v. 194 NYS 2d 89).ñèt Conclusion Premises considered.. 39 III App 2d 443. generally he has been held to have no property right or vested interest to which due process guaranties extend (See Taylor v. January 6.S. rel. To ensure. 1986" of the affected officers and employees of the Bureau of Customs should be UPHELD. BOC Memorandum. Regalado. People ex. 189 NE 2d 1. concur. there would be no harm. . 54 Wash 2d 787. Republic Act No. 345 P 2d 178). Aberdeen. Feliciano. Article XVIII of the 1987 Constitution.J. which position is in the nature of a public office.lâwphî1. JJ. that no meritorious employee has been separated from the service. political in character and held by way of grant or privilege extended by government. NY State Civil Service Com 21 Misc 2d 1034. 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]. Angilly v. in so far as it provides for retroactivity. 44 L Ed.. and 16 November 1988 should be SET ASIDE for having been issued in grave abuse of discretion. 20 September 1988.1988). dated 30 June 1988. Kelliheller v. The right to an office or to employment with government or any of its agencies is not a vested property right. Narvasa. C. and subject to the observation hereinabove made.

economic sabotage. J. 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.R. Benjamin Kho.[4] The EIIB was designated to perform the following functions: (a) Receive. Benigno Manga and Lulu Mendoza. investigate the same and aid in the prosecution of cases. The facts are undisputed: On June 30. BENJAMIN KHO. controlling or preventing said activities. HON. . SECRETARY BENJAMIN DIOKNO. prohibition and mandamus. SECRETARY ARTEMIO TUQUERO. such as. DEPARTMENT OF JUSTICE. ZAMORA. BENIGNO MANGA. issued Executive Order No. HON. vs. tax evasion. (b) Coordinate with external abgencies in monitoring the financial and economic activities of persons or entities. seek the nullification of Executive Order No. July 10. smuggling. petitioners. HON. DECISION SANDOVAL-GUTIERREZ. modes and extent of illegal activities affecting the national economy. 1987. 127[3] establishing the Economic Intelligence and Investigation Bureau (EIIB) as part of the structural organization of the Ministry of Finance.: In this petition for certiorari. which may adversely affect national financial interest with the goal of regulating. EXECUTIVE SECRETARY RONALDO B. SECRETARY JOSE PARDO. Remedios Princesa. respondents. Cesar Posada. DEPARTMENT OF BUDGET AND MANAGEMENT. whether domestic or foreign. CESAR POSADA. gather and evaluate intelligence reports and information and evidence on the nature. but not limited to. former President Corazon C. [G. Aquino. and dollar-salting. HON. DEPARTMENT OF FINANCE. REMEDIOS G. LULU MENDOZA. No. 142801-802. PRINCESA. (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. 2001] BUKLOD NG KAWANING EIIB. petitioners Buklod Ng Kawaning EIIB. for themselves and in behalf of others with whom they share a common or general interest. 191[1] and Executive Order No.

President Joseph Estrada issued Executive Order No. providing. among others.[9] Then the day feared by the EIIB employees came. 223[10] providing that all EIIB personnel occupying positions specified therein shall be deemed separated from the service effective April 30. 2000. Article IX-B of the Philippine Constitution and/or for .[11] Agonizing over the loss of their employment. 196[8] creating the Presidential Anti-Smuggling Task Force Aduana. 1989. redundancy. 191 and 223 should be annulled as they are unconstitutional for being violative of Section 2(3). pursuant to a bona fide reorganization resulting to abolition. upon clearance by the Minister. They anchor their petition on the following arguments: A Executive Order Nos. President Aquino issued Memorandum Order No. anti-graft and corruption cases against personnel of the Ministry and its constituents units. (d) Supervise. division. monitor and coordinate all the intelligence and investigation operations of the operating Bureaus and Offices under the Ministry. 191 entitled Deactivation of the Economic Intelligence and Investigation Bureau. (e) Investigate. 2000. 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. On March 29. President Estrada issued Executive Order No.[5] In a desire to achieve harmony of efforts and to prevent possible conflicts among agencies in the course of their anti-smuggling operations. Meanwhile. [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. petitioners now come before this Court invoking our power of judicial review of Executive Order Nos. hear and file. 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. merger. 2000. or consolidation of positions.[6] Eleven years after. or on January 7. 225 on March 17. 191 and 223. (f) Perform such other appropriate functions as may be assigned by the Minister or his deputies. President Estrada issued Executive Order No.

(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. Arguing in behalf of respondents. it was only deactivated.' and because of the serious implications of these cases on the administration of the Philippine civil service and the rights of public servants. such as. (b) the said executive orders were issued in the interest of national economy. and (c) the EIIB was not abolished. such reorganization was made in bad faith. 191 and 223. to avoid duplicity of work and to streamline the functions of the bureaucracy. The petition is bereft of merit. . Mison. the standing of certain parties to sue. petitioners disregard of the hierarchy of courts and the non-exhaustion of administrative remedies. failure to exhaust administrative remedies. Despite the presence of some procedural flaws in the instant petition. including the need for stability in the public service. for two reasons. C. the functions of which are essentially and substantially the same as that of EIIB. The abolition of the EIIB is a hoax. if Executive Order Nos. Similarly. we deem it necessary to address the issues. The President has no authority to abolish the EIIB. We are not without precedent. It is in the interest of the State that questions relating to the status and existence of a public office be settled without delay. the Solicitor General maintains that: (a) the President enjoys the totality of the executive power provided under Sections 1 and 7. Petitioners contend that the issuance of the afore-mentioned executive orders is: (a) a violation of their right to security of tenure. In Dario v.having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. `[b]ecause of the demands of public interest. thus.[12] we liberally decreed: The Court disregards the questions raised as to procedure. he has the authority to issue Executive Order Nos. Article VII of the Constitution. B. 191 and 223 are considered to effect a reorganization of the EIIB. and (c) a usurpation of the power of Congress to decide whether or not to abolish the EIIB.

O. after coming to terms with the prevailing law and jurisprudence. 48.A. it is argued that there is no law yet which empowers the President to issue E. it was argued that there is no law which empowers the President to reorganize the BIR. except where the office was created by the Constitution itself.[20] The case in point is Larin v. A public office is either created by the Constitution. it may be abolished by the same legislature that brought it into existence. The general rule has always been that the power to abolish a public office is lodged with the legislature.[17] Thus. is that as far as bureaus. agencies or offices in the executive department are concerned. In decreeing otherwise. Be that as it may. the Presidents power of control may justify him to inactivate the functions of a particular office. abolition denotes an intention to do away with the office wholly and permanently. this Court sustained the following legal basis. No. To deactivate means to render inactive or ineffective or to break up by discharging or reassigning personnel. 7645 provides that: Sec.[15] Thus. however. to annul.[18] The exception. the office ceases to exist. The Solicitor General only invokes the above distinctions on the mistaken assumption that the President has no power to abolish an office. deactivation and abolition are both reorganization measures. or by authority of law. We do not agree. there exists a distinction between the words deactivate and abolish. albeit remaining dormant or inoperative. while in abolition. At first glance. the same is not true in deactivation where the office continues to exist. The heads of departments. by statute. Executive Secretary.[13] while to abolish means to do away with.[14] In essence. xxxxxx Section 48 of R. abrogate or destroy completely. thus: Initially. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch.[21] In this case. it seems that the resolution of this case hinges on the question . we are certain that the ultimate queries should be a) Does the President have the authority to reorganize the executive department? and.Does the deactivation of EIIB constitute abolition of an office? However.[16] This proceeds from the legal precept that the power to create includes the power to destroy. b) How should the reorganization be carried out? Surely.[19] or certain laws may grant him the broad authority to carry out reorganization measures. bureaus and offices and agencies are hereby directed to identify their . 132 or to reorganize the BIR.

letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended. which includes the power to group. xxxxxx Another legal basis of E. Book III of E. No. (Emphasis supplied) . executive orders. proclamations. The 1987 Constitution clearly provides that all laws. services and activities and to standardize salaries and materials. consolidate bureaus and agencies. 20. Said provision clearly mentions the acts of 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. phasing out and abolition of offices only and does not cover the creation of offices or transfer of functions. 292 which states: Sec. to transfer functions. Unauthorized organizational charges. Unless Congress provides otherwise. 62. Nevertheless. repealed or revoked. No. the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that: Sec. 1416. 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. 1772 which amended Presidential Decree No. So far. Actual scaling down.. to abolish offices.O.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 validity of these two decrees are unquestionable. X x x. phased out or abolished. (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.O. to create and classify functions. What law then gives him the power to reorganize? It is Presidential Decree No. subject to civil service rules and regulations. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government. decrees. (italic ours) This provision speaks of such other powers vested in the President under the law.respective activities which are no longer essential in the delivery of public services and which may be scaled down. Residual Powers. there is yet no law amending or repealing said decrees. 132 is Section 20.

it is subject to the Presidents continuing authority to reorganize. consolidation of offices. Aguirre. Now. Organized Changes. the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here.[24] The law has spoken clearly. phased-out or abolished. the President. [26] It falls under the Office of the President. 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. functions. Unless otherwise provided by law or directed by the President of the Philippines.[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. For this purpose. It takes place when there is an alteration of the existing structure of government offices or units therein. shall have the continuing authority to reorganize the administrative structure of the Office of the President. Such a ruling further finds support in Section 78 of Republic Act No.A. a provision similar to Section 62 of R. objectives. (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down. former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act). [22] Under this law.O. 77. he may transfer the functions of other Departments or Agencies to the Office of the President. let us take a look at the assailed executive order. bureaus. 7645 quoted in Larin. 8760. . Hence. We must not lose sight of the very source of the power that which constitutes an express grant of power. subject to the policy in the Executive Office and in order to achieve simplicity. and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. projects. We are left only with the duty to sustain. Sec. offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of their respective mandates. Under Section 31. In the whereas clause of E. The EIIB is a bureau attached to the Department of Finance. missions. No. Book III of Executive Order No. But of course. 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. thus. including the lines of control. the heads of departments. or abolition thereof by reason of economy or redundancy of functions. authority and responsibility between them. activities and systems and procedures. programs.[25] we ruled that reorganization involves the reduction of personnel. 292 (otherwise known as the Administrative Code of 1987). economy and efficiency. In Canonizado v. 191.

bureau. We are not convinced. Their tenure with the Task Force would only be temporary. (b) where an office is abolished and another performing substantially the same functions is created. 196 provides that the technical. 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. Reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. President Estrada created the Task Force Aduana. they would be sent back to the agency concerned. (c) where incumbents are replaced by those less qualified in terms of status of appointment.O. they being employees of other existing agencies. No. No. reorganizations have been regarded as valid provided they are pursued in good faith. Firstly. Since their employment with the Task force is only by way of detail or assignment.O. E. administrative and special staffs of EIIB are to be composed of people who are already in the public service. [27] Pertinently. only when the agency where they belong is called upon to assist the Task Force.e. Such a smaller base has the necessary powers 1) to enlist the assistance of any department. 191. and (e) where the removal violates the order of separation. No. In this jurisdiction. While Task Force Aduana was created to take the place of EIIB. Secondly. but to achieve the ultimate purpose of E. 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. there is no employment of new personnel to man the Task Force. 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. i. which is economy. facilities and resources.. Republic Act No. (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. the thrust of E. And should the need for them cease.[29] Petitioners claim that the deactivation of EIIB was done in bad faith because four days after its deactivation. what is then left for us to resolve is whether or not the reorganization is valid. performance and merit. It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department.O. It was not for the purpose of removing the EIIB employees. its creation does not entail expense to the government. or office and to use their respective personnel. and 2) to select and recruit personnel from within the PSG and ISAFP for assignment to the . 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. they retain their employment with the existing agencies.

agencies. In that event.000. we hold that petitioners right to security of tenure is not violated. [34] [35] These amounts were far above the P50. for 1999. and operations for the year 1995.031.[31] for 1996. etc. if the abolition.[33] and. Mison.000 allocation to the Task Force Aduana for the year 2000.. And in that case. a reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. facilities and resources. In Blaquera v. Again. And. Tracing from the yearly General Appropriations Act.156. The Task Force Aduana has the power to enlist the assistance of any department.000. 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. Lastly. Civil Sevice Commission. or instrumentality of the government.[39] through Justice Abraham F. and to use their personnel. the Task Force Aduana has the additional authority to conduct investigation of cases involving ill-gotten wealth.000. . bureau. This was not expressly granted to the EIIB. And thirdly. 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.743. was P128. we find the latter to have additional new powers. [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. Obviously. the EIIB did not have this power.Task Force. As a general rule.000. instead of maintaining an independent office with a whole set of personnel and facilities. The EIIB did not have this power. office. Be that as it may. Consequently.[32] for 1998. the idea is to encourage the utilization of personnel. it appears that the allotted amount for the EIIBs general administration.[38] In the instructive words laid down by this Court in Dario v. security of tenure would not be a Chinese wall. P182. The EIIB had proven itself burdensome for the government because it maintained separate offices in every region in the Philippines. support. it cannot be said that there is a feigned reorganization. P219. seizures and arrests. no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. including government- owned or controlled corporations. While basically. being composed of elements from the Presidential Security Group (PSG) and Intelligence Service Armed Forces of the Philippines (ISAFP). facilities and resources of the already existing departments. the functions of the EIIB have devolved upon the Task Force Aduana.889.[36] has the essential power to effect searches. Sarmiento: Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. Valid abolition of offices is neither removal nor separation of the incumbents. bureaus. P238. The Task Force Aduana.000.

is done for political reasons or purposely to defeat security of tenure.. WHEREFORE. JJ.. otherwise not in good faith. the EIIB will not be the last agency to suffer the impact.J. Gonzaga-Reyes. we cannot ignore the unfortunate reality that our government is also battling the impact of a plummeting economy. There is an invalid abolition as where there is merely a change of nomenclature of positions. concur. the petition is hereby DENIED. J.which is nothing else but a separation or removal. no valid abolition takes and whatever abolition is done. Pardo. C.. Puno. Buena.. Mendoza. or where claims of economy are belied by the existence of ample funds. . Kapunan.. Vitug. there is no such thing as an absolute right to hold office.[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 frustrate valid measures which are designed to rebuild the executive department. no one can be said to have any vested right in an office or its salary. Davide. Melo.Ynares- Santiago. Unless the government is given the chance to recuperate by instituting economy and efficiency in its system. and De Leon. Bellosillo.. Jr. in the result. Panganiban and Quisumbing. No costs. Indeed. Jr. is void ab initio. SO ORDERED. on leave. JJ. Except constitutional offices which provide for special immunity as regards salary and tenure.

insofar as the new staffing pattern was concerned. 36. on 27 October 1998. the rank and file employees of NTA Batac. respondents. HILARIO JEREZ.: President Joseph Estrada issued on 30 September 1998 Executive Order No. received individual notices of termination of their employment with the NTA effective thirty (30) days from receipt thereof. 29. SUSAN IMPERIAL. 29. by President Estrada of Executive Order No. the NTA prepared and adopted a new Organization Structure and Staffing Pattern (OSSP) which. the OSSP was approved by the Department of Budget and Management (DBM) subject to certain revisions. Finding themselves without any immediate relief from their dismissal from the service. prohibition and mandamus. amending Executive Order No. petitioners. On 10 June 1996. RICARDO SARANDI. The order was followed by another issuance. On even date. on 29 October 1998. filed a letter-appeal with the Civil Service Commission and sought its assistance in recalling the OSSP. Ilocos Norte. August 5. On 11 November 1998. entitled Mandating the Streamlining of the National Tobacco Administration (NTA). among whom included herein petitioners. 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. was submitted to the Office of the President. a[G. with the Regional Trial Court (RTC) of Batac. SHIRLY TAGABAN. NATIONAL TOBACCO ADMINISTRATION. DECISION VITUG. vs. the NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the revised OSSP. all occupying different positions at the NTA office in Batac. 152845. a government agency under the Department of Agriculture. No. RODOLFO DAGA. by increasing from four hundred (400) to not exceeding seven hundred fifty (750) the positions affected thereby. In compliance therewith. FELY MADRIAGA. Ilocos Norte. BENJAMIN DEMDEM. EDGARDO BACLIG. petitioners filed a petition for certiorari. J. 2003] DRIANITA BAGAOISAN. and MARIA CORAZON CUANANG. represented by ANTONIO DE GUZMAN and PERLITA BAULA. and prayed - . GREGORIO LABAYAN. On 04 December 1998. with prayer for preliminary mandatory injunction and/or temporary restraining order. petitioners.R.

[1] The RTC. judgment be rendered declaring the notice of termination of the petitioners illegal and the reorganization null and void and ordering their reinstatement with backwages. including herein petitioners. Whether or not the validity of E. particularly RA 6656 and of the Civil Service Commission Rules on Government Reorganization. III. the NTA filed an appeal with the Court of Appeals. the appellate court rendered a decision reversing and setting aside the assailed orders of the trial court. IV. on 09 September 2000. commanding the respondents to desist from further terminating their services. Whether or not respondents submitted evidence as proof that petitioners. No.O. No. 36. 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.[2] On 20 February 2002. were not the best qualified and most deserving among the incumbent applicant- employees. individually. 2) that a writ of preliminary injunction be issued against the respondents. after trial on the merits. strictly adhere to the implementing rules on reorganization.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. 29. 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.O. 29 and 36 can be put in issue in the instant case/appeal. and making the injunction permanent. ordered the NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments. Whether or not respondent NTA in implementing the mandated reorganization pursuant to E. as amended by E. contending that - . II. Nos. raising the following issues: I. if applicable. Thereupon. A motion for reconsideration filed by the NTA was denied by the trial court in its order of 28 February 2001.O. and 3) that. Petitioners went to this Court to assail the decision of the Court of Appeals. Whether or not incumbent permanent employees.

after the NTA had filed its comment of 23 September 2002. The Court of Appeals erred in ignoring case law/jurisprudence in the abolition of an office. On 21 February 2003.[4] In their Petition for an En Banc Resolution petitioners would have it that - 1. I. (and) V. office or agency attached to the various executive departments. petitioners submitted a Motion to Admit Petition For En Banc Resolution of the case allegedly to address a basic question.e. an administrative . 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. IV. III. i. II. A motion for reconsideration filed by petitioners was denied in the Courts resolution of 20 January 2002.[3] In its resolution of 10 July 2002. The Court of Appeals erred in holding that petitioners removal from the service is in accordance with law. The Court of Appeals erred in holding that respondent NTA was not guilty of bad faith in the termination of the services of petitioners. 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. the Court required the NTA to file its comment on the petition. b) The President of the Philippines would have the plenary power to reorganize the entire government Bureaucracy through the issuance of an Executive Order. 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. not by legislative action.. The Court of Appeals erred in upholding Executive Order Nos. would justify a different conclusion. the legal and constitutional issue on whether the NTA may be reorganized by an executive fiat. On 18 November 2002. 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.

[5] In order to allow the parties a full opportunity to ventilate their views on the matter. Section 4 of Executive Order No. the core question raised by them is whether or not the President. and the law creating NTA. issued by the Revolutionary government of former President Corazon Aquino. can validly carry out the reorganization of the NTA. amend and/or modify Executive Order No. 245. 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. debate and discussion of members of both chambers of the Congress of the Philippines. should it remain unchallenged. 4. In brief. In brief. Notwithstanding the apparent procedural lapse on the part of petitioner to implead the Office of the President as party respondent pursuant to Section 7. 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. the Court ultimately resolved to hear the parties in oral argument. Buklod ng Kawaning EIIB vs. supersede and/or render ineffective a law or statute. 1987 (Annex D. based on existing laws. In said case. of the 1997 Revised Rules of Civil Procedure. Essentially. would be rendered meaningless. Buklod ng Kawaning EIIB challenged the issuance. which provides that the governing body of NTA is the Board of Directors. The case law on abolition of an office would be disregarded. a law issued during the Freedom Constitution of President Corazon Aquino. The challenged Executive Order No. [6] this Court resolved to rule on the merits of the petition. had the authority to carry out a reorganization in any branch or agency of the executive department. 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. Zamora[7] ruled that the President. 3.issuance without the benefit of due deliberation. Rule 3. ignored and abandoned if the Court of Appeals decision subject matter of this Petition would remain undisturbed and untouched. In other words. 245 dated July 24. a mere executive order would amend. the reorganization is an ultra vires act of the NTA Administrator. Petition). previous doctrines and precedents of this Highest Court would in effect be reversed and/or modified with the Court of Appeals judgment. 2. and sought the . through the issuance of an executive order.

nullification. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. The heads of departments. 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 act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that: . The Court explained: The general rule has always been that the power to abolish a public office is lodged with the legislature. 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. No. 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. except where the office was created by the Constitution itself. The exception. phasing out and abolition of offices only and does not cover the creation of offices or transfer of functions. subject to civil service rules and regulations. 132 or to reorganize the BIR. or by authority of law. A public office is either created by the Constitution. 191 (Deactivation of the Economic Intelligence and Investigation Bureau) and Executive Order No. 223 (Supplementary Executive Order No. it is argued that there is no law yet which empowers the President to issue E. phased out or abolished. it was argued that there is no law which empowers the President to reorganize the BIR. however. or certain laws may grant him the broad authority to carry out reorganization measures. In this case. `We do not agree. 48. agencies or offices in the executive department are concerned. Executive Secretary [280 SCRA 713]. `x x x x x x `Section 48 of R. Actual scaling down. Nevertheless. x x x. 7645 provides that: ``Sec.A. This proceeds from the legal precept that the power to create includes the power to destroy.O. it may be abolished by the same legislature that brought it into existence. of Executive Order No. In decreeing otherwise. `Said provision clearly mentions the acts of `scaling down. this Court sustained the following legal basis. The case in point is Larin v. thus: `Initially. the Presidents power of control may justify him to inactivate the functions of a particular office. by statute. is that as far as bureaus. Thus.

executive orders. Organized Changes. a provision similar to Section 62 of R. to create and classify functions.``Sec. . which includes the power to group. `This provision speaks of such other powers vested in the President under the law. letter of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended. `x x x x x x `Another legal basis of E. 62. What law then gives him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree No.A. 292 which states: ``Sec. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government. The 1987 Constitution clearly provides that `all laws. 1416.O.O. 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. consolidate bureaus and agencies. decrees. 132 is Section 20. No. 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 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. No.O. to abolish offices. proclamations. Unauthorized organizational changes. `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. repealed or revoked. Unless otherwise provided by law or directed by the President of the Philippines. So far. Book III of E. The validity of these two decrees are unquestionable. Unless Congress provides otherwise. In the whereas clause of E. former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act). to transfer functions. Unless otherwise created by law or directed by the President of the Philippines. 77. services and activities and to standardize salaries and materials. Now. 191. let us take a look at the assailed executive order. No. 20. 7645 quoted in Larin. there is yet no law amending or repealing said decrees. thus: `Sec. Residual Powers.

The law has spoken clearly. Hence. the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. subject to the policy in the Executive Office and in order to achieve simplicity. In this jurisdiction. shall have the continuing authority to reorganize the administrative structure of the Office of the President. we ruled that reorganization involves the reduction of personnel. Reorganization is carried out in `good faith if it is for the purpose of economy or to make bureaucracy more efficient. Aguirre [323 SCRA 312]. reorganizations have been regarded as valid provided they are pursued in good faith. Book III of Executive Order No. (c) where incumbents are replaced by those less . 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. missions. authority and responsibility between them.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. 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. For this purpose. (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down. what is then left for us to resolve is whether or not the reorganization is valid. It takes place when there is an alteration of the existing structure of government offices or units therein. and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. But of course. 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. economy and efficiency. We are left only with the duty to sustain. it is subject to the Presidents continuing authority to reorganize. 292 (otherwise known as the Administrative Code of 1987). he may transfer the functions of other Departments or Agencies to the Office of the President. consolidation of offices. offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of this respective mandates. projects. Under this law. It falls under the Office of the President. bureaus. It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department. We must not lose sight of the very source of the power that which constitutes an express grant of power. 8760. Such a ruling further finds support in Section 78 of Republic Act No. including the lines of control. the heads of departments. Pertinently. functions. (b) where an office is abolished and another performing substantially the same functions is created. In Canonizado vs. objectives. the President. phased-out or abolished. Republic Act No. activities and systems and procedures. The EIIB is a bureau attached to the Department of Finance. Under Section 31. programs. or abolition thereof by reason of economy or redundancy of functions.

performance and merit. but it does not necessarily follow that they should then automatically be appointed. (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. 29 and No.125 positions to 750. Firstly. Fourthly. Article VII.A. we find no evidence that the respondents committed bad faith in issuing the notices of non-appointment to the petitioners. [11] Section 78 of the General Provisions of Republic Act No.qualified in terms of status of appointment. It is important to emphasize that the questioned Executive Orders No. 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. expressly grants the President control of all executive departments. It is thus natural that ones position may be lost through the removal or abolition of an office. 6656. 8522 (General Appropriations Act of FY 1998) has decreed that the President may direct changes in the organization and key . has found no evidence of bad faith on the part of the NTA.[8] The Court of Appeals. and (e) where the removal violates the order of separation. the petitioners likewise failed to prove that less qualified employees were appointed to the positions to which they applied. only means that old employees should be considered first. 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. it decreased from 1. x x x x x x x x x. Rather. in its now assailed decision. younger dynamism. Thirdly. the preference stated in Section 4 of R. Secondly.[10] of the Constitution.[9] These findings of the appellate court are basically factual which this Court must respect and be held bound. bureaus. the petitioners failed to specifically show which offices were abolished and the new ones that were created performing substantially the same functions. This is because the law does not preclude the infusion of new blood. Section 17. thus - In the case at bar. or necessary talents into the government service. 36 have not abolished the National Tobacco Administration but merely mandated its reorganization through the streamlining or reduction of its personnel. the number of positions in the new staffing pattern did not increase.

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. Section 25. et al. Continuing Authority of the President to Reorganize his Office. he may take any of the following actions: (1) Restructure the internal organization of the Office of the President Proper. bureau or agency pursuant to Article VI. Evidently. including the determination of the most economical and efficient staffing pattern. shall have continuing authority to reorganize the administrative structure of the Office of the President. The Court has there observed: x x x. under the Executive Department. by abolishing. Ronaldo D. In the recent case of Rosa Ligaya C. this grant of power includes the authority to evaluate each and every government agency.. Zamora. The provisions of Section 31. or by transferring functions from one unit to another. . Under Section 31(1) of EO 292.positions in any department. the President can reorganize the Office of the President Proper by abolishing. which grants to the Executive Department the authority to recommend the budget necessary for its operation.[13] 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. Chapter 10. [12] of the Constitution. in his capacity as the Executive Secretary. of Executive Order No. economy and efficiency. For this purpose. 31. and vice versa. the Presidential Special Assistants/Advisers System and the Common Staff Support System. under Section 31(2) and (3) of EO 292. In contrast. et al. Domingo. vs. (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. Book III. 292 (Administrative Code of 1987). The President. 292 and the power to reorganize the Office of the President Proper. consolidating or merging units thereof or transferring functions from one unit to another. Hon. including the immediate Offices. above-referred to. subject to the policy in the Executive Office and in order to achieve simplicity. consolidating or merging units. reads thusly: SEC. 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.

relative to petitioners Motion for an En Banc Resolution of the Case.[16] WHEREFORE. (Chairman). No costs.[15] In passing. 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. 292 specifically refers to the Presidents power to restructure the internal organization of the Office of the President Proper. Let entry of judgment be made in due course. Davide. the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit.[14] In the present instance. and Azcuna. that the Court En Banc is not an appellate tribunal to which appeals from a Division of the Court may be taken. Jr. in good faith. concur. consolidating or merging units hereof or transferring functions from one unit to another. a factual assessment that this Court could only but accept.J. involving neither an abolition nor transfer of offices. 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. and the transfer of any agency under the Office of the President to any other department or agency and vice-versa. . according to the findings of the appellate court.. by abolishing. 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... the assailed action is a mere reorganization under the general provisions of the law consisting mainly of streamlining the NTA in the interest of simplicity. SO ORDERED. 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. Section 31(1) of Executive Order No. Ynares-Santiago. it may be well to remind counsel. Carpio.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. economy and efficiency. It is an act well within the authority of President motivated and carried out. JJ. C.

and HON. 01592 and 01594. 142283. 2003] ROSA LIGAYA C. The Facts On March 5. LLOREN. DECISION CARPIO. DAOANG. MA. PAZ LEVITA G. Culture and Sports to the Philippine Sports Commission and Defining the Role of DECS in School-Based Sports. JR. AMELITA S. VILLANUEVA. BUCE. TUASON. CRISTITUTO C. EO 81 provided thus: . 1999. VERONICA C.. respondents.R.MERCELITA C. MARCIANO M. vs. petitioners. 81 [3] (EO 81 for brevity) entitled Transferring the Sports Programs and Activities of the Department of Education. J. in his capacity as the Secretary of Education. GONZALES. CONTAPAY. BELLES. HON. RONALDO D.: The Case This is a petition for certiorari and prohibition[1] with prayer for temporary restraining order seeking to nullify Executive Order No. MARIVIC B. in his capacity as the Chairman of the Philippine Sports Commission. No. FAJARDO. ANDREW B. reassigned all Bureau of Physical Education and School Sports (BPESS for brevity) personnel named in the DECS Memoranda to various offices within the DECS. in his capacity as the Executive Secretary. JAYNELYN D. JULIETA C. ZAMORA. HERNANDO M. VICTORIA S.[2] The assailed executive order transferred the sports development programs and activities of the Department of Education. HERNANDEZ. CARLOS D. LIZA B. [G. ROMELIA A. ADELAIDA B. VICTORIA S. LLOREN. Estrada issued Executive Order No. GAWIRAN. EDITHA C. FELICIANO N. former President Joseph E. JR. FERNANDEZ. EVANGELISTA. The questioned memoranda (DECS Memoranda for brevity). ESTRADA. HON. TOLEDO III. 81 and Memoranda Nos. and CARLOS BACAY. SERVO.. JOSE HERNANDEZ. DOMINGO. Culture and Sports (DECS for brevity) to the Philippine Sports Commission (PSC for brevity). TOLITOL. on the other hand. February 6. FLORES. ROMEO M. MARANAN.

this Court issue a temporary restraining order against respondents to desist from implementing EO 81. in coordination with concerned public and private entities shall be transferred to the PSC.RA 9155 expressly abolished the BPESS and transferred the functions. 2000. all remaining BPESS Staff to other divisions or bureaus of the DECS effective March 15. Petitioners also challenge the DECS Memoranda for violating their right to security of tenure. petitioners filed the instant petition. Section 2. Gonzales (Secretary Gonzales for brevity) issued Memorandum No.Section 1. Transferring the Sports Program and Activities to the PSC. Section 3. 01594 reassigning the BPESS staff named in the Memorandum to various offices within the DECS effective March 15. former DECS Secretary Andrew B. In their Petition. upon filing of the petition. Petitioners were among the BPESS personnel affected by Memorandum No. Pursuant to EO 81. programs and activities of the DECS relating to sports competition to the PSC. 2000. otherwise known as the Governance of Basic Education Act of 2001. Petitioners seek to nullify EO 81 and the DECS Memoranda. 9155 (RA 9155 for brevity). The pertinent provision thereof reads: . On January 21. Petitioners maintain that the Presidents issuance of EO 81 violated the principle of separation of powers. petitioners argue that EO 81 is void and unconstitutional for being an undue legislation by President Estrada.) curriculum and its application in whatever form inside schools. provincial. The DECS shall have jurisdiction and function over the enhancement of Physical Education (P. As the primary agency tasked to formulate policies and oversee the national sports development program. The Role of PSC. All the functions. Petitioners pray that this Court prohibit the PSC from performing functions related to school sports development. 01592 on January 10. 1987) are hereby transferred to PSC. Republic Act No. was enacted on August 11.Petitioners further pray that. regional. 2000. Memorandum No. Defining the Role of DECS in School-Based Sports. 16 of EO 117 (s. programs and activities of DECS related to sports development as provided for in Sec.E. 01592 temporarily reassigned. 2001. 01594. Dissatisfied with their reassignment. national and international levels. Secretary Gonzales issued Memorandum No. During the pendency of the case. the management and implementation of all school-based sports competitions among schools at the district. 2000. in the exigency of the service.

its significance constrains the Court to point out that Executive Order No. The personnel of the BPESS. consolidating or merging units thereof or transferring functions from one unit to another. economy and efficiency. For this purpose. The Bureau of Physical Education and School Sports (BPESS) is hereby abolished. by abolishing. expressly grants the President continuing authority to reorganize the Office of the President. he may take any of the following actions: (1) Restructure the internal organization of the Office of the President Proper. since RA 9155 provides that BPESS personnel not transferred to the PSC shall be retained by the DECS. Although the issue is already academic. [6] Moreover. The Courts Ruling We dismiss this petition for being moot and academic. the Presidential Special Assistants/Advisers System and the Common Support System. 292 (EO 292 for brevity). 9.[5] the subsequent enactment of RA 9155 has rendered the issues in the present case moot and academic. All other BPESS personnel shall be retained by the Department. 31.SEC. The President. The Issue The issue to resolve is whether EO 81 and the DECS Memoranda are valid. All functions. are hereby transferred to the PSC without loss of rank. programs and activities of the Department of Education related to sports competition shall be transferred to the Philippine Sports Commission (PSC). Section 31 of EO 292 provides: SEC. including the plantilla positions they occupy. Abolition of BPESS. . petitioners now admit that it is no longer plausible to raise any ultra vires assumption by the PSC of the functions of the BPESS. including the immediate Offices. The Program for school sports and physical fitness shall remain part of the basic education curriculum. presently detailed with the PSC. Continuing Authority of the President to Reorganize his Office. shall have continuing authority to reorganize the administrative structure of the Office of the President. subject to the policy in the Executive Office and in order to achieve simplicity. As manifested by both petitioners[4] and respondents. Since RA 9155 abolished the BPESS and transferred the DECS functions relating to sports competition to the PSC. petitioners now accept that the law explicitly protects and preserves[7] their right to security of tenure. otherwise known as the Administrative Code of 1987.

(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. (Emphasis supplied. This distinction is crucial as it affects the security of tenure of employees. programs and activities of DECS related to sports development[10] to the PSC. In contrast. This is the rationale behind the Presidents continuing authority to reorganize the administrative structure of the Office of the President. the transfer of functions or agencies does not result in the employees cessation in office because . under Section 31 (2) and (3) of EO 292. 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. The law grants the President this power in recognition of the recurring need of every President to reorganize his office to achieve simplicity. and vice versa. 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. Under Section 31 (1) of EO 292. making EO 81 a valid presidential issuance. However.) Since EO 81 is based on the Presidents continuing authority under Section 31 (2) and (3) of EO 292. Petitioners contention that the DECS is not part of the Office of the President is immaterial. the Office of the President is the command post of the President.[8] EO 81 is a valid exercise of the Presidents delegated power to reorganize the Office of the President. [9] Therefore. Under EO 292. the President can reorganize the Office of the President Proper by abolishing. The Office of the President is the nerve center of the Executive Branch. the President has the authority to transfer the functions. The abolition of an office in good faith necessarily results in the employees cessation in office. 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. or by transferringfunctions from one unit to another. 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. the DECS is indisputably a Department of the Executive Branch. Even if the DECS is not part of the Office of the President. Under its charter. To remain effective and efficient. economy and efficiency. [11] On the other hand. but in such event there is no dismissal or separation because the office itself ceases to exist. the PSC is attached to the Office of the President. After all. 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. consolidating or merging units.

SO ORDERED. WHEREFORE. RA 9155 now mandates that these employees shall be retained by the Department. ensuring their continued employment.his office continues to exist although in another department. . In the instant case. the instant petition is DISMISSED. then later permanently reassigned to other offices of the DECS. At any rate. the BPESS employees who were not transferred to PSC were at first temporarily. No pronouncement as to costs. agency or office.

G.R. No. L-23004 June 30, 1965

MAKATI STOCK EXCHANGE, INC., petitioner,
vs.
SECURITIES AND EXCHANGE COMMISSION and MANILA STOCK
EXCHANGE, respondents.

Hermenegildo B. Reyes for petitioner.
Office of the Solicitor General for respondent Securities and Exchange Commission.
Norberto J. Quisumbing and Emma Quisumbing-Fernando for respondent Manila Stock
Exchange.

BENGZON, C.J.:

This is a review of the resolution of the Securities and Exchange Commission which would
deny the Makati Stock Exchange, Inc., permission to operate a stock exchange unless it agreed
not to list for trading on its board, securities already listed in the Manila Stock Exchange.

Objecting to the requirement, Makati Stock Exchange, Inc. contends that the Commission has
no power to impose it and that, anyway, it is illegal, discriminatory and unjust.

Under the law, no stock exchange may do business in the Philippines unless it is previously
registered with the Commission by filing a statement containing the information described in
Sec. 17 of the Securities Act (Commonwealth Act 83, as amended).

It is assumed that the Commission may permit registration if the section is complied with; if
not, it may refuse. And there is now no question that the section has been complied with, or
would be complied with, except that the Makati Stock Exchange, upon challenging this
particular requirement of the Commission (rule against double listing) may be deemed to have
shown inability or refusal to abide by its rules, and thereby to have given ground for denying
registration. [Sec. 17 (a) (1) and (d)].

Such rule provides: "... nor shall a security already listed in any securities exchange be listed
anew in any other securities exchange ... ."

The objection of Makati Stock Exchange, Inc., to this rule is understandable. There is actually
only one securities exchange — The Manila Stock Exchange — that has been operating alone
for the past 25 years; and all — or presumably all — available or worthwhile securities for
trading in the market are now listed there. In effect, the Commission permits the Makati Stock
Exchange, Inc., to deal only with other securities. Which is tantamount to permitting a store to
open provided it sells only those goods not sold in other stores. And if there's only one existing
store, 1 the result is a monopoly.

It is not farfetched to assert — as petitioner does 2 that for all practical purposes, the
Commission's order or resolution would make it impossible for the Makati Stock Exchange to
operate. So, its "permission" amounted to a "prohibition."

Apparently, the Commission acted "in the public interest." 3 Hence, it is pertinent to inquire
whether the Commission may "in the public interest" prohibit (or make impossible) the
establishment of another stock exchange (besides the Manila Stock Exchange), on the ground
that the operation of two or more exchanges adversely affects the public interest.

At first glance, the answer should be in the negative, because the law itself contemplated, and,
therefore, tacitly permitted or tolerated at least, the operation of two or more exchanges.

Wherever two or more exchanges exist, the Commission, by order, shall require and
enforce uniformity of trading regulations in and/or between said exchanges. [Emphasis
Ours] (Sec. 28b-13, Securities Act.)

In fact, as admitted by respondents, there were five stock exchanges in Manila, before the
Pacific War (p. 10, brief), when the Securities Act was approved or amended. (Respondent
Commission even admits that dual listing was practiced then.) So if the existence of more than
one exchange were contrary to public interest, it is strange that the Congress having from time
to time enacted legislation amending the Securities Act, 4 has not barred multiplicity of
exchanges.

Forgetting for the moment the monopolistic aspect of the Commission's resolution, let us
examine the authority of the Commission to promulgate and implement the rule in question.

It is fundamental that an administrative officer has only such powers as are expressly granted to
him by the statute, and those necessarily implied in the exercise thereof.

In its brief and its resolution now subject to review, the Commission cites no provision
expressly supporting its rule. Nevertheless, it suggests that the power is "necessary for the
execution of the functions vested in it"; but it makes no explanation, perhaps relying on the
reasons advanced in support of its position that trading of the same securities in two or more
stock exchanges, fails to give protection to the investors, besides contravening public interest.
(Of this, we shall treat later) .

On the legality of its rule, the Commission's argument is that: (a) it was approved by the
Department Head — before the War; and (b) it is not in conflict with the provisions of the
Securities Act. In our opinion, the approval of the Department, 5 by itself, adds no weight in a
judicial litigation; and the test is not whether the Act forbids the Commission from imposing a
prohibition, but whether it empowers the Commission to prohibit. No specific portion of the
statute has been cited to uphold this power. It is not found in sec. 28 (of the Securities Act),
which is entitled "Powers (of the Commission) with Respect to Exchanges and Securities." 6

According to many court precedents, the general power to "regulate" which the Commission
has (Sec. 33) does not imply authority to prohibit." 7

The Manila Stock Exchange, obviously the beneficiary of the disputed rule, contends that the
power may be inferred from the express power of the Commission to suspend trading in a
security, under said sec. 28 which reads partly:

And if in its opinion, the public interest so requires, summarily to suspend trading in any
registered security on any securities exchange ... . (Sec. 28[3], Securities Act.)

However, the Commission has not acted — nor claimed to have acted — in pursuance of such
authority, for the simple reason that suspension under it may only be for ten days. Indeed, this
section, if applicable, precisely argues against the position of the Commission because the
"suspension," if it is, and as applied to Makati Stock Exchange, continues for an indefinite
period, if not forever; whereas this Section 28 authorizes suspension for ten days only. Besides,
the suspension of trading in the security should not be on one exchange only, but
on all exchanges; bearing in mind that suspension should be ordered "for the protection of
investors" (first par., sec. 28) in all exchanges, naturally, and if "the public interest so requires"
[sec. 28(3)].

This brings up the Commission's principal conclusions underlying its determination viz.: (a)
that the establishment of another exchange in the environs of Manila would be inimical to the
public interest; and (b) that double or multiple listing of securities should be prohibited for the
"protection of the investors."

(a) Public Interest — Having already adverted to this aspect of the matter, and the emerging
monopoly of the Manila Stock Exchange, we may, at this juncture, emphasize that by restricting
free competition in the marketing of stocks, and depriving the public of the advantages thereof
the Commission all but permits what the law punishes as monopolies as "crimes against public
interest." 8

"A stock exchange is essentially monopolistic," the Commission states in its resolution (p. 14-a,
Appendix, Brief for Petitioner). This reveals the basic foundation of the Commission's process
of reasoning. And yet, a few pages afterwards, it recalls the benefits to be derived "from the
existence of two or more exchanges," and the desirability of "a healthy and fair competition in
the securities market," even as it expresses the belief that "a fair field of competition among
stock exchanges should be encouraged only to resolve, paradoxically enough, that Manila Stock
Exchange shall, in effect, continue to be the only stock exchange in Manila or in the
Philippines.

"Double listing of a security," explains the Commission, "divides the sellers and the buyers,
thus destroying the essence of a stock exchange as a two-way auction market for the securities,
where all the buyers and sellers in one geographical area converge in one defined place, and the
bidders compete with each other to purchase the security at the lowest possible price and those

and other exchanges allowed to operate." Inconclusive premises. quality of listing 10 should be permitted. in one sale. Securities Act). with the opportunity to invest at lower expense.. Such difference in prices and rates gives the buyer of shares alternative options. sales. Besides. . and he has no chance to get a lower price except at another stock exchange. as the Commission observes. there is the brokerage fee which must be considered. Not to mention the personality of the broker. it is not for the Commission to impose others. Therefore.. As the purpose of the Act is to give adequate and effective protection to the investing public against fraudulent representations.seeking to sell it compete with each other to get the highest price therefor. be beneficial to sellers of stock — not to buyers — although what applies to buyers should obtain equally as to sellers (looking for higher prices). nay. And yet. For it is debatable whether the buyer of stock may get the lowest price where all the sellers assemble in only one place. at most. the Commission realizes that if there were two or more exchanges "the same security may sell for more in one exchange and sell for less in the other. (b) Protection of investors. for sure. unlisted industries and enterprises. it is to be doubted whether it is "necessary" for their "protection" within the purview of the Securities Act. but not everything beneficial to them is necessary for their protection. strengthens the objection to the Commission's ruling. 17. the arrangement desired by the Commission may. furnishes no sufficient reason to let one exchange corner the market. This. Granted that." Nonetheless. to dispose at higher prices. supposing the arrangement contemplated is beneficial to investors (as the Commission says). Variance in price of the same security would be the rule . — At any rate. Consequently. the brokerage rates will also differ. precisely. for the investors' benefit (protection is not the word). or false promises and the imposition of worthless ventures. In this sense. and the seller.. but "one that would focus its attention and energies on the listing of new securities and thus effectively help in raising capital sorely needed by our . will tend to fix the price for the succeeding. 11 The Legislature has specified the conditions under which a stock exchange may legally obtain a permit (sec." Needless to add. If there was undue manipulation or unfair advantage in exchange trading the Commission should have other means to correct the specific abuses. For it is not mere semantics to declare that acts for the protection of investors are necessarily beneficial to them. If the existence . The price there. "what the country needs is not another" market for securities already listed on the Manila Stock Exchange.. we discover no legal authority for it to shore up (and stifle) free enterprise and individual liberty along channels leading to that economic desideratum. a stock exchange is essentially monopolistic. 9 it is hard to see how the proposed concentration of the market has a necessary bearing to the prevention of deceptive devices or unlawful practices. The circumstance that some people "made a lot of money due to the difference in prices of securities traded in the stock exchanges of Manila before the war" as the Commission noted. encouraged.

it shall not list for trading on its board.. 1963. the exercise of undelegated legislative powers and discretion. 14 (The order now reviewed is dated May 7.J. 12 Undoubtedly. And it could have logically thought that.) Concerning res judicata. it has been held that where the licensing statute does not expressly or impliedly authorize the officer in charge. Why should Makati have appealed? It got the certificate of incorporation which it wanted. an order reading as follows. has not appealed from that order of May 27.. (b) their guaranteed civil liberty to pursue any lawful employment or trade. It had not yet applied. Makati Stock Exchange. Manila Stock insists on res judicata. Now. 1963. the latter. Inc..of two competing exchanges jeopardizes public interest — which is doubtful — let the Congress speak. Thus. and his privilege to select the brokers in his employment. since the condition . Inc. But until otherwise directed by law. the operation of exchanges should not be so regulated as practically to create a monopoly by preventing the establishment of other stock exchanges and thereby contravening: (a) the organizers' (Makati's) Constitutional right to equality before the law. and (c) the investor's right to choose where to buy or to sell. . which Makati Stock did not appeal. provided . (53 C. In that order. and if the organizers thereof are willing to abide by the foregoing conditions.. after making some inquiries. in this instance.) It appears that when Makati Stock Exchange. 636. securities already listed in the Manila Stock Exchange . Let the certificate of incorporation of the MAKATI STOCK EXCHANGE be issued. issued on May 27." Admittedly. presented its articles of incorporation to the Commission. The condition or proviso mentioned would only apply if and when it subsequently filed the application for registration as stock exchange. — Calling attention to the Commission's order of May 27. 1964. the Commission advanced the opinion that "it would permit the establishment and operation of the proposed Makati Stock Exchange. the Manila Stock Exchange pleads the doctrine of res judicata. 15 Makati was still exploring the convenience of soliciting the permit to operate subject to that condition. 1963. 13 And no extended elucidation is needed to conclude that for a licensing officer to deny license solely on the basis of what he believes is best for the economy of the country may amount to regimentation or. in judging whether or not to restrict individual enterprise and business opportunities. he may not refuse to grant a license simply on the ground that a sufficient number of licenses to serve the needs of the public have already been issued. the opinion and recommendation of the Commission will be given weight by the Legislature. It was not the time to question the condition. they may file the proper application for the registration and licensing of the said Exchange.S. p.

and any rule or regulation made or to be made thereunder.did not affect its articles of incorporation. such request is dated May 7. results in discrimination and violation of constitutional rights. 1963). ACCORDINGLY. may be held to have accepted the permission to operate with the condition against double listing (for having failed to appeal the order of May 27. and any amendment thereto. 16 because even if the Makati Stock Exchange. still it was not precluded from afterwards contesting 17 the validity of such condition or rule: (1) An agreement (which shall not be construed as a waiver of any constitutional right or any right to contest the validity of any rule or regulation) to comply and to enforce so far as is within its powers. Costs shall be paid by the Manila Stock Exchange. and is now under. 1964. And making reasonable allowances for the presumption of regularity and validity of administrative action. Indeed. we feel constrained to reach the conclusion that the respondent Commission possesses no power to impose the condition of the rule. granted the certificate of incorporation (corporate existence) it wanted at that time. 1963) which after all. additionally. And when the Makati Stock Exchange finally found that it could not successfully operate with the condition attached. compliance by its members. it should not appeal the order (of May 27. Inc. 17-a-1. it took the issue by the horns. Securities Act [Emphasis Ours]. which. there can be no valid objection to the discussion of this issue of double listing now. with the provisions of this Act. The order of the Commission denying. (See. the license of the petition to operate a stock exchange is approved without such condition. this petition for review has suitably been coursed. and expressing its desire for registration and license. .) Surely. review. it requested that the condition (against double listing) be dispensed with. So ordered.

Molina. and Provincial Election Supervisor Arnold Soquerata as members. Manlapaz. On June 18. petitioner. J. GANCAYCO. Jacob and Sales. Jr. the Federation of Associations of Barangay Councils (FABC) of Catanduanes. Tugonon & Associates Law Offices for petitioner. Molina. the Provincial Treasurer and the Provincial Election Supervisor walked out. Leo Sales of Caramoran and Manuel Torres of Baras. 1991 RUPERTO TAULE.:p The extent of authority of the Secretary of Local Government over the katipunan ng mga barangay or the barangay councils is brought to the fore in this case. 90336 August 12. Aquino. in their capacities as Presidents of the Association of Barangay Councils in their respective municipalities. Chosen as members of the Board of Directors were Taule. as presiding officer. the following were elected officers of the FABC: President — Ruperto Taule Vice-President — Allan Aquino Secretary — Vicente Avila Treasurer — Fidel Jacob Auditor — Leo Sales 1 .R.1989. No. Balgos & Perez and Bugaring. convened in Virac. Catanduanes with six members in attendance for the purpose of holding the election of its officers. Avila. The Board of Election Supervisors/Consultants was composed of Provincial Government Operation Officer (PGOO) Alberto P. Jr. SANTOS and GOVERNOR LEANDRO VERCELES. Present were petitioner Ruperto Taule of San Miguel. When the group decided to hold the election despite the absence of five (5) of its members. Fidel Jacob of Panganiban. The election nevertheless proceeded with PGOO Alberto P. Jr. SECRETARY LUIS T.G. composed of eleven (11) members. respondents. Allan Aquino of Viga. Atencia for private respondent. Juan G. Vicente Avila of Virac. as Chairman with Provincial Treasurer Luis A. Thereafter. vs.

3 On August 4. 1989 but it was denied by respondent Secretary in his resolution of September 5. 1989 and ordering a new one to be conducted as early as possible to be presided by the Regional Director of Region V of the Department of Local Government. 6 The Local Government Code provides for the manner in which the katipunan ng mga barangay at all levels shall be organized: Sec. Governor of Catanduanes. petitioner seeks the reversal of the resolutions of respondent Secretary dated August 4.* protesting the election of the officers of the FABC and seeking its nullification in view of several flagrant irregularities in the manner it was conducted. and on the national level. katipunang pampook. 110. 1989 and September 5. sent a letter to respondent Luis T. 1989. 3) Assuming that the respondent Secretary has jurisdiction over the election protest. the Secretary of Local Government. 4 Petitioner filed a motion for reconsideration of the resolution of August 4. The Katipunan ng mga Barangay is the organization of all sangguniang barangays in the following levels: in municipalities to be known as katipunang bayan. 1989. in regions. Verceles. katipunan ng mga barangay. in provinces. 2 In compliance with the order of respondent Secretary. petitioner Ruperto Taule as President of the FABC. 5 In the petition for certiorari before Us. — (1) The katipunan at all levels shall be organized in the following manner: .On June 19. in cities. 2) Whether or not the respondent Governor has the legal personality to file an election protest. respondent Leandro I. katipunang panlungsod. Santos. 1989 for being null and void. 1989. filed his comment on the letter-protest of respondent Governor denying the alleged irregularities and denouncing said respondent Governor for meddling or intervening in the election of FABC officers which is a purely non-partisan affair and at the same time requesting for his appointment as a member of the Sangguniang Panlalawigan of the province being the duly elected President of the FABC in Catanduanes. respondent Secretary issued a resolution nullifying the election of the officers of the FABC in Catanduanes held on June 18. Organization. whether or not he committed grave abuse of discretion amounting to lack of jurisdiction in nullifying the election. Petitioner raises the following issues: 1) Whether or not the respondent Secretary has jurisdiction to entertain an election protest involving the election of the officers of the Federation of Association of Barangay Councils. katipunang panlalawigan.

(a) The katipunan in each level shall elect a board of directors and a set of officers.
The president of each level shall represent the katipunan concerned in the next
higher level of organization.

(b) The katipunan ng mga barangay shall be composed of the katipunang pampook,
which shall in turn be composed of the presidents of the katipunang panlalawigan
and the katipunang panlungsod. The presidents of the katipunang bayan in each
province shall constitute the katipunang panlalawigan. The katipunang panlungsod
and the katipunang bayan shall be composed of the punong barangays of cities and
municipalities, respectively.

xxx xxx xxx

The respondent Secretary, acting in accordance with the provision of the Local Government
Code empowering him to "promulgate in detail the implementing circulars and the rules and
regulations to carry out the various administrative actions required for the initial
implementation of this Code in such a manner as will ensure the least disruption of on-going
programs and projects 7 issued Department of Local Government Circular No. 89-09 on April 7,
1989, 8 to provide the guidelines for the conduct of the elections of officers of the Katipunan ng
mga Barangay at the municipal, city, provincial, regional and national levels.

It is now the contention of petitioner that neither the constitution nor the law grants jurisdiction
upon the respondent Secretary over election contests involving the election of officers of the
FABC, the katipunan ng mga barangay at the provincial level. It is petitioner's theory that under
Article IX, C, Section 2 of the 1987 Constitution, it is the Commission on Elections which has
jurisdiction over all contests involving elective barangay officials.

On the other hand, it is the opinion of the respondent Secretary that any violation of the
guidelines as set forth in said circular would be a ground for filing a protest and would vest
upon the Department jurisdiction to resolve any protest that may be filed in relation thereto.

Under Article IX, C, Section 2(2) of the 1987 Constitution, the Commission on Elections shall
exercise "exclusive original jurisdiction over all contests relating to the elections, returns, and
qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction
over all contests involving elective municipal officials decided by trial courts of general
jurisdiction, or involving elective barangay officials decided by trial courts of limited
jurisdiction." The 1987 Constitution expanded the jurisdiction of the COMELEC by granting it
appellate jurisdiction over all contests involving elective municipal officials decided by trial
courts of general jurisdiction or elective barangay officials decided by trial courts of limited
jurisdiction. 9

The jurisdiction of the COMELEC over contests involving elective barangay officials is limited
to appellate jurisdiction from decisions of the trial courts. Under the law, 10 the sworn petition
contesting the election of a barangay officer shall be filed with the proper Municipal or
Metropolitan Trial Court by any candidate who has duly filed a certificate of candidacy and has

been voted for the same office within 10 days after the proclamation of the results. A voter may
also contest the election of any barangay officer on the ground of ineligibility or of disloyalty to
the Republic of the Philippines by filing a sworn petition for quo warranto with the
Metropolitan or Municipal Trial Court within 10 days after the proclamation of the results of the
election. 11 Only appeals from decisions of inferior courts on election matters as aforestated may
be decided by the COMELEC.

The Court agrees with the Solicitor General that the jurisdiction of the COMELEC is over
popular elections, the elected officials of which are determined through the will of the
electorate. An election is the embodiment of the popular will, the expression of the sovereign
power of the people. 12 It involves the choice or selection of candidates to public office by
popular vote. 13 Specifically, the term "election," in the context of the Constitution, may refer to
the conduct of the polls, including the listing of voters, the holding of the electoral campaign,
and the casting and counting of the votes 14which do not characterize the election of officers in
the Katipunan ng mga barangay. "Election contests" would refer to adversary proceedings by
which matters involving the title or claim of title to an elective office, made before or after
proclamation of the winner, is settled whether or not the contestant is claiming the office in
dispute 15 and in the case of elections of barangay officials, it is restricted to proceedings after
the proclamation of the winners as no pre-proclamation controversies are allowed. 16

The jurisdiction of the COMELEC does not cover protests over the organizational set-up of the
katipunan ng mga barangay composed of popularly elected punong barangays as prescribed by
law whose officers are voted upon by their respective members. The COMELEC exercises only
appellate jurisdiction over election contests involving elective barangay officials decided by the
Metropolitan or Municipal Trial Courts which likewise have limited jurisdiction. The authority
of the COMELEC over the katipunan ng mga barangay is limited by law to supervision of the
election of the representative of the katipunan concerned to the sanggunian in a particular level
conducted by their own respective organization. 17

However, the Secretary of Local Government is not vested with jurisdiction to entertain any
protest involving the election of officers of the FABC.

There is no question that he is vested with the power to promulgate rules and regulations as set
forth in Section 222 of the Local Government Code.

Likewise, under Book IV, Title XII, Chapter 1, See. 3(2) of the Administrative Code of
1987, ** the respondent Secretary has the power to "establish and prescribe rules, regulations
and other issuances and implementing laws on the general supervision of local government
units and on the promotion of local autonomy and monitor compliance thereof by said units."

Also, the respondent Secretary's rule making power is provided in See. 7, Chapter II, Book IV
of the Administrative Code, to wit:

(3) Promulgate rules and regulations necessary to carry out department objectives,
policies, functions, plans, programs and projects;

Thus, DLG Circular No. 89-09 was issued by respondent Secretary in pursuance of his rule-
making power conferred by law and which now has the force and effect of law. 18

Now the question that arises is whether or not a violation of said circular vests jurisdiction upon
the respondent Secretary, as claimed by him, to hear a protest filed in relation thereto and
consequently declare an election null and void.

It is a well-settled principle of administrative law that unless expressly empowered,
administrative agencies are bereft of quasi- judicial powers. 19 The jurisdiction of administrative
authorities is dependent entirely upon the provisions of the statutes reposing power in them;
they cannot confer it upon themselves. 20 Such jurisdiction is essential to give validity to their
determinations. 21

There is neither a statutory nor constitutional provision expressly or even by necessary
implication conferring upon the Secretary of Local Government the power to assume
jurisdiction over an election protect involving officers of the katipunan ng mga barangay. An
understanding of the extent of authority of the Secretary over local governments is therefore
necessary if We are to resolve the issue at hand.

Presidential power over local governments is limited by the Constitution to the exercise of
general supervision 22 "to ensure that local affairs are administered according to law." 23 The
general supervision is exercised by the President through the Secretary of Local Government. 24

In administrative law, supervision means overseeing or the power or authority of an officer to
see that the subordinate officers perform their duties. If the latter fails or neglects to fulfill them
the former may take such action or step as prescribed by law to make them perform their duties.
Control, on the other hand, means the power of an officer to alter or modify or nullify or set
aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for that of the latter. The fundamental law permits the Chief Executive
to wield no more authority than that of checking whether said local government or the officers
thereof perform their duties as provided by statutory enactments. Hence, the President cannot
interfere with local governments so long as the same or its officers act within the scope of their
authority. 25 Supervisory power, when contrasted with control, is the power of mere oversight
over an inferior body; it does not include any restraining authority over such body. 26

Construing the constitutional limitation on the power of general supervision of the President
over local governments, We hold that respondent Secretary has no authority to pass upon the
validity or regularity of the election of the officers of the katipunan. To allow respondent
Secretary to do so will give him more power than the law or the Constitution grants. It will in
effect give him control over local government officials for it will permit him to interfere in a
purely democratic and non-partisan activity aimed at strengthening the barangay as the basic
component of local governments so that the ultimate goal of fullest autonomy may be achieved.
In fact, his order that the new elections to be conducted be presided by the Regional Director is
a clear and direct interference by the Department with the political affairs of the barangays

Under Section 205 of the Local Government Code. DLG Circular No. The Regional Trial Courts have the exclusive original jurisdiction to hear the protest. 28 This state policy is echoed in the Local Government Code wherein it is declared that "the State shall guarantee and promote the autonomy of local government units to ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress. 27 Indeed. the membership of the sangguniang panlalawigan consists of the governor. it is truly doubtful if he could enforce compliance with the DLG Circular. the Court holds that in assuming jurisdiction over the election protest filed by respondent Governor and declaring the election of the officers of the FABC on June 18. the respondent Secretary acted in excess of his jurisdiction. 35Moreover. it is the policy of the state to ensure the autonomy of local governments. although the Department is given the power to prescribe rules. 32 Any doubt therefore as to the power of the Secretary to interfere with local affairs should be resolved in favor of the greater autonomy of the local government. including circulars and regulations 34 cannot be applied retrospectively. 1989 after the June 18. 89-09 which states that "whenever the guidelines are not substantially complied with. inasmuch as an administrative authority cannot confer jurisdiction upon itself. the election shall be declared null and void by the Department of Local Government and an election shall conduct and being invoked by the Solicitor General cannot be applied. elective members of the said sanggunian and the presidents of the katipunang panlalawigan and ." 29 To deny the Secretary of Local Government the power to review the regularity of the elections of officers of the katipunan would be to enhance the avowed state policy of promoting the autonomy of local governments. Even the Local Government Code which grants the Secretary power to issue implementing circulars. 31 This is compatible with the power of supervision of the Secretary over local governments which as earlier discussed is limited to checking whether the local government unit concerned or the officers thereof perform their duties as provided by statutory enactments. such provision is null and void for having been issued in excess of the respondent Secretary's jurisdiction. 33 The provision in DLG Circular No. 89-15 was issued on July 3. 89-15 amending DLG Circular No. regulations and other issuances. Thus. Moreover. the recourse of the parties is to the ordinary courts. Since the respondent Secretary exercises only supervision and not control over local governments. observe or check. the vice-governor.which is not permitted by the limitation of presidential power to general supervision over local governments. 1989 as null and void. rules and regulations is silent as to how these issuances should be enforced. the Court finds that respondent Governor has the personality to file the protest. the Administrative Code limits its authority to merely "monitoring compliance" by local government units of such issuances. 1989 elections of the FABC officers and it is the rule in statutory construction that laws. 30 To monitor means "to watch. As regards the second issue raised by petitioner. The respondent Secretary not having the jurisdiction to hear an election protest involving officers of the FABC.

The objective of keeping the election free and honest was therefore compromised. The word "shall" should be taken in its ordinary signification. 40 In case at bar. the Court holds that the issue of the validity of the elections should now be resolved in order to prevent any unnecessary delay that may result from the commencement of an appropriate action by the parties.2. If it had been intended that any other official should preside. the Chairman of the Board. there was no Board of Election Supervisors to oversee the elections in view of the walk out staged by its two other members. Under Sec. Hence. the rules would have provided so. If the president of the FABC assumes his presidency under questionable circumstances and is allowed to sit in the sangguniang panlalawigan the official actions of the sanggunian may be vulnerable to attacks as to their validity or legality. the respondent governor has an interest in the election of the officers of the FABC since its elected president becomes a member of the assembly.7 of the same circular it is provided that a Board of Election Supervisors/Consultants shall be constituted to oversee and/or witness the canvassing of votes and proclamation of winners. the elections should be nullified. Thus. Worse. it must be imperative or mandatory and not merely permissive. Molina. As to the third issue raised by petitioner. there was a clear violation of the aforesaid mandatory provision.4 of DLG Circular No. i. there being a quorum. 37 as the rule is explicit and requires no other interpretation. The rules confine the role of the Board of Election Supervisors/Consultants to merely overseeing and witnessing the conduct of elections. The governor acts as the presiding officer of the sangguniang panlalawigan. the Court has already ruled that the respondent Secretary has no jurisdiction to hear the protest and nullify the elections. This is consistent with the provision in the Local Government Code limiting the authority of the COMELEC to the supervision of the election. the Chairman of the Board of Election Supervisors/Consultants. presided over the elections. Nevertheless." The rule specifically provides that it is the incumbent FABC President or Vice-President who shall preside over the meeting. 2. ..e. 36 As presiding officer of the sagguniang panlalawigan. respondent governor is a proper party to question the regularity of the elections of the officers of the FABC.. PGOO Molina. On this ground. 89-09 which provides that "the incumbent FABC President or the Vice- President shall preside over the reorganizational meeting.3. Jr.the kabataang barangay provincial federation. as it did in the elections at the town and city levels 38 as well as the regional level. The elections were declared null and void primarily for failure to comply with Section 2. the Provincial COMELEC Supervisor and the Provincial Treasurer.. There was direct participation by the Chairman of the Board in the elections contrary to what is dictated by the rules. 39 It is admitted that neither the incumbent FABC President nor the Vice-President presided over the meeting and elections but Alberto P.

" Sec. not being a barangay captain and for not having been elected president of the association of barangay councils. 46 declared as null and void the appointment of private respondent Leoncio Banate Jr. Ferrer. as member of the Sangguniang Panlungsod of the City of Roxas representing the katipunang panlungsod ng mga barangay for he lacked the elegibility and qualification required by law. the Solicitor General dismissed the supervening event alleged by petitioner as something immaterial to the petition. The Court held that an unqualified person cannot be appointed a member of the sanggunian. the vice-governor as presiding officer pro tempore. 42 The Solicitor General filed his comment on the supplemental petition 43 as required by the resolution of the Court dated September 13. Blg. In Reyes vs. and the appointive members consisting of the president of the provincial association of barangay councils. 1989 is null and void for failure to comply with the provisions of DLG Circular No.The Court therefore finds that the election of officers of the FABC held on June 18. Banate Jr. 47 the appointment of Nemesio . pending resolution of this petition. 89-09. designated Augusto Antonio as temporary representative of the Federation to the sangguniang panlalawigan of Catanduanes. appointed and qualified. 51. 1990. 1990. 45 the Court. He argues that Antonio's appointment was merely temporary "until such time that the provincial FABC president in that province has been elected.) In Ignacio vs. 205 (2) of the Local Government Code (B. in his memorandum dated June 7." 44 He stresses that Antonio's appointment was only a remedial measure designed to cope with the problems brought about by the absence of a representative of the FABC to the "sanggunian ang panlalawigan. 337) provides- (2) The sangguniang panlalawigan shall be composed of the governor. even in an acting capacity. (Emphasis supplied. (Emphasis supplied. elective members of the said sanggunian and the presidents of the katipunang panlalawigan and the kabataang barangay provincial federation who shall be appointed by the President of the Philippines. 2 likewise states: xxx xxx xxx The sangguniang panlalawigan of each province shall be composed of the governor as chairman and presiding officer. 51 on the composition of the sangguniang panlungsod. 41 By virtue of this memorandum. respondent governor swore into said office Augusto Antonio on June 14. under Sec. 337 and Batas Pambansa Blg.1990. the elective sangguniang panlalawigan members.P. the vice- governor. and the president of the provincial federation of the kabataang barangay. interpreting similarly worded provisions of Batas Pambansa Blg.) Batas Pambansa Blg. Meanwhile. In his comment. petitioner filed a supplemental petition alleging that public respondent Local Government Secretary.

To be appointed by the President of the Philippines to sit in the sangguniang panlalawigan is the president of the katipunang panlalawigan. the respondent Secretary has no choice but to have the incumbent FABC President sit as member of the sanggunian. 49 Since the election is still under protest such that no successor of the incumbent has as yet qualified. He could even have appointed petitioner since he was elected the president of the federation but not Antonio. This should not be allowed. Batas Pambansa Blg. allegedly the protege of respondent Governor. . without prejudice to the terms of their appointments as members of the sanggunian to which they may be correspondingly appointed. gives credence to petitioner's charge of political interference by respondent Governor in the organization.L. the petition is GRANTED in that the resolution of respondent Secretary dated August 4. he should have appointed the incumbent FABC President in a hold-over capacity. the law is likewise explicit. 48 The appointing power is bound by law to comply with the requirements as to the basic qualifications of the appointee to the sangguniang panlalawigan. The appointee must meet the qualifications set by law. In the present controversy involving the sangguniang panlalawigan. No costs. The appointment of Antonio. 337. Augusto Antonio is not the president of the federation. The barangays should be insulated from any partisan activity or political intervention if only to give true meaning to local autonomy. WHEREFORE. the Secretary of Local Government. If the intention of the respondent Secretary was to protect the interest of the federation in the sanggunian. He is a member of the federation but he was not even present during the elections despite notice. The election of the officials of the ABC Federation held on June 18. 1989 is hereby annulled. The President of the Philippines or his alter ego. The argument that Antonio was appointed as a remedial measure in the exigency of the service cannot be sustained. as representative of the youth sector to the sangguniang panlungsod of Davao City was declared invalid since he was never the president of the kabataang barangay city federation as required by Sec. For even under the guidelines. the term of office of officers of the katipunan at all levels shall be from the date of their election until their successors shall have been duly elected and qualified. The appointment of Augusto Antonio as representative to the Sangguniang Panlalawigan in a temporary capacity is declared null and void. 1989 is hereby SET ASIDE for having been issued in excess of jurisdiction. Rasgo Jr. 173. his appointment to the sangguniang panlalawigan is not justified notwithstanding that such appointment is merely in a temporary capacity. Since Antonio does not meet the basic qualification of being president of the federation. A new election of officers of the federation is hereby ordered to be conducted immediately in accordance with the governing rules and regulations. The Supplemental petition is hereby GRANTED. has no authority to appoint anyone who does not meet the minimum qualification to be the president of the federation of barangay councils.

SO ORDERED. .