G.R. No.
182249 March 5, 2013 The CSC-NCR’s Ruling
TRADE AND INVESTMENT DEVELOPMENT CORPORATION OF THE PHILIPPINES, Petitioner,
vs.
CIVIL SERVICE COMMISSION, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari 1 of Trade and Investment Development Corporation of the
Philippines (TJDCORP) seeking the reversal of the decision 2 dated September 28, 2007 and the
resolution3 dated March 17, 2008 of the Court of Appeals (CA) in CA-G.R. SP. No. 81058. The assailed CA
rulings affirmed the resolutions,4 dated January 31, 2003 and October 7, 2003, of the Civil Service
Commission (CSC), invalidating Arsenio de Guzman’s appointment as Financial Management Specialist IV
in TIDCORP. The CA subsequently denied the motion for reconsideration that followed.
Factual Antecedents
On August 30, 2001, De Guzman was appointed on a permanent status as Financial Management
Specialist IV of TIDCORP, a government-owned and controlled corporation (GOCC) created pursuant to
PresidentialDecree No. 1080. His appointment was included in TIDCORP’s Report on Personnel Actions
(ROPA) for August 2001, which was submitted to theCSC – Department of Budget and Management
(DBM) Field Office.5
In a letter6 dated September 28, 2001, Director Leticia M. Bugtong disallowed De Guzman’s appointment
because the position of Financial Management Specialist IV was not included in the DBM’s Index of
Occupational Service.
TIDCORP’s Executive Vice President Jane U. Tambanillo appealed7 the invalidation of De Guzman’s
appointment to Director IV Agnes Padilla of the CSC-National Capital Region (NCR). According to
Tambanillo, Republic Act No. (RA) 8494, which amended TIDCORP’s charter, empowers its Board of
Directors to create its own organizational structure and staffing pattern, and to approve its own
compensation and position classification system and qualification standards. Specifically, Section 7 of RA
8494 provides:
Section 7. The Board of Directors shall provide for an organizational structure and staffing pattern for
officers and employees of the Trade and Investment Development Corporation of the Philippines
(TIDCORP) and upon recommendation of its President, appoint and fix their remuneration, emoluments
and fringe benefits: Provided, That the Board shall have exclusive and final authority to appoint, promote,
transfer, assign and re-assign personnel of the TIDCORP, any provision of existing law to the contrary
notwithstanding.
All positions in TIDCORP shall be governed by a compensation and position classification system and
qualification standards approved by TIDCORP's Board of Directors based on a comprehensive job analysis
and audit of actual duties and responsibilities. The compensation plan shall be comparable with the
prevailing compensation plans in the private sector and shall be subject to periodic review by the Board
no more than once every four (4) years without prejudice to yearly merit reviews or increases based on
productivity and profitability. TIDCORP shall be exempt from existing laws, rules and regulations on
compensation, position classification and qualification standards. It shall, however, endeavor to make the
system to conform as closely as possible to the principles and modes provided in Republic Act No. 6758.
On the basis of Section 7 of RA 8494, Tambanillo argued that TIDCORP is authorized to adopt an
organizational structure different from that set and prescribed by the CSC. Section 7 exempts TIDCORP
from existing laws on compensation, position classification and qualification standards, and is thus not
bound by the DBM’s Index of Occupational Service. Pursuant to this authority, TIDCORP’s Board of Directors
issued Resolution No. 1185, s. 1998 approving the corporation’s re-organizational plan, under which De
Guzman was appointed Financial Management Specialist IV. De Guzman’s appointment was valid
because the plan providing for his position followed the letter of the law.
Tambanillo also noted that prior to De Guzman’s appointment as Financial Management Specialist IV, the
position had earlier been occupied by Ma. Loreto H. Mayor whose appointment was duly approved by
Director Bugtong. Thus, Director Bugtong’s invalidation of De Guzman’s appointment is inconsistent with
her earlier approval of Mayor’s appointment to the same position.
Director Padilla denied Tambanillo’s appeal because De Guzman’s appointment failed to comply with
Section 1, Rule III of CSC Memorandum Circular No. 40, s. 1998, which requires that the position title of an
appointment submitted to the CSC must conform with the approved Position Allocation List and must be
found in the Index of Occupational Service. Since the position of Financial Management Specialist IV is not
included in the Index of Occupational Service, then De Guzman’s appointment to this position must be
invalid.8 Director Padilla pointed out that the CSC had already decided upon an issue similar to De
Guzman’s case in CSC Resolution No. 011495 (Geronimo, Rolando S.C., Macapagal, Vivencio M.
Tumangan, Panser E., Villar, Victor G., Ong, Elizabeth P., Re: Invalidated Appointments; Appeal) where it
invalidated the appointments of several Development Bank of the Philippines (DBP) employees because
their position titles did not conform with the Position Allocation List and with the Index of Occupational
Service. Like TIDCORP, the DBP’s charter exempts the DBP from existing laws, rules, and regulations on
compensation, position classification and qualification standards. It also has a similar duty to "endeavor to
make its system conform as closely as possible to the principles under the Compensation and Position
Classification Act of 1989 (Republic Act No. 6758, as amended)."9
Lastly, Padilla stressed that the 1987 Administrative Code empowers10 the CSC to formulate policies and
regulations for the administration, maintenance and implementation of position, classification and
compensation.
TIDCORP’s appeal to the CSC-CO
In response to the CSC-NCR’s ruling, TIDCORP’s President and CEO Joel C. Valdes sent CSC Chairperson
Karina Constantino-David a Letter11 appealing Director Padilla’s decision to the CSC-Central Office (CO).
Valdes reiterated TIDCORP’s argument that RA 8494 authorized its Board of Directors to determine its own
organizational structure and staffing pattern, and exempted TIDCORP from all existing laws on
compensation, position classification and qualification standards. Citing Javellana v. The Executive
Secretary, et al.,12 Valdes asserted that the wisdom of Congress in granting TIDCORP this authority and
exemption is a political question that cannot be the subject of judicial review. Given TIDCORP’s functions
as the government’s export credit agency, its Board of Directors has been provided flexibility in
administering its personnel so that it can hire qualified employees from the private sector, such as banks
and other financial institutions.
In addition, prior actions of the CSC show that it recognized TIDCORP’s exemption from all laws regarding
compensation, position classification and qualification standards of its employees. The CSC has approved
prior appointments of TIDCORP’s officers under its July 1, 1998 re-organization plan. It also approved
Mayor’s previous appointment as Financial Management Specialist IV. Further, a memorandum dated
October 29, 1998 issued by the CSC-NCR noted that "pursuant to Sec. 7 of RA 8494, TIDCORP is exempt
from existing laws, rules and regulations on compensation, position classification and qualification
standards."13
The CSC-CO’s ruling
In its Resolution No. 030144,14 the CSC-CO affirmed the CSC-NCR’s decision that De Guzman’s
appointment should have complied with CSC Memorandum Circular No. 40, s. 1998, as amended by CSC
Memorandum Circular No. 15, s. 1999. Rule III, Section 1(c) is explicit in requiring that the position title
indicated in the appointment should conform with the Position Allocation List and found in the Index of
Occupational Service. Otherwise, the appointment shall be disapproved. In disallowing De Guzman’s
appointment, the CSC-CO held that Director Bugtong was simply following the letter of the law.
According to the CSC-CO, TIDCORP misconstrued the provisions of Section 7 of RA 8494 in its attempt to
bypass the requirements of CSC Memorandum Circular No. 40, s. 1998. While RA 8494 gave TIDCORP
staffing prerogatives, it would still have to comply with civil service rules because Section 7 did not
expressly exempt TIDCORP from civil service laws.
The CSC-CO also supported the CSC-NCR’s invocation of CSC Resolution No. 011495. Both the charters of
the DBP and TIDCORP have similar provisions in the recruitment and administration of their human
resources. Thus, the ruling in CSC Resolution No. 011495 has been correctly applied in TIDCORP’s appeal.
Lastly, the CSC-CO noted that the government is not bound by its public officers’ erroneous application
and enforcement of the law. Granting that the CSC-NCR had erroneously approved an appointment to
1
the same position as De Guzman’s appointment, the CSC is not estopped from correcting its officers’ past
mistakes.
TIDCORP moved to reconsider15 the CSC-CO’s decision, but this motion was denied,16 prompting TIDCORP
to file a Rule 65 petition for certiorari17 with the CA. The petition asserted that the CSC-CO committed
grave abuse of discretion in issuing Resolution No. 030144 and Resolution No. 031037.
The Appellate Court’s Ruling
The CA denied18 TIDCORP’s petition and upheld the ruling of the CSC-CO in Resolution No. 030144 and
Resolution No. 031037. The CA noted that filing a petition for certiorari was an improper recourse; TIDCORP
should have instead filed a petition for review under Section 1, Rule 43 of the Rules of Court. The CA,
however, brushed aside the procedural defect, ruling that the assailed resolutions should still stand as they
are consistent with law and jurisprudence.
Citing Central Bank of the Philippines v. Civil Service Commission,19 the CA stood by the CSC-CO’s ruling
that it has authority to approve and review De Guzman’s appointment. The CSC has the power to
ascertain whether the appointing authority complied with the requirements of the law; otherwise, it may
revoke the appointment. As TIDCORP is a government-owned corporation, it is covered by civil service
laws and is therefore bound by the CSC’s jurisdiction over all matters pertaining to personnel, including
appointments.
Further, the CA cited the CSC’s mandate under the 1987 Constitution to approve or disapprove
appointments and to determine whether an appointee possesses civil service eligibility. As TIDCORP’s
charter does not expressly or impliedly divest the CSC of administrative authority over personnel concerns
at TIDCORP, the latter is still covered by the existing civil service laws on compensation, position
classification and qualification standards. Its appointment of De Guzman as Financial Management
Specialist IV should have complied with these rules.
The CA thus concluded that the CSC was well-within its authority when it invalidated De Guzman’s
appointment. It held that an appointee’s title to the office does not permanently vest until the appointee
complies with the legal requirements of his appointment. The requirements include the submission of the
appointment to the CSC for the determination of whether the appointee qualifies to the position and
whether the procedure for appointment has been properly followed. Until these requirements are
complied with, his appointment may still be recalled or withdrawn by the appointing authority.20
TIDCORP moved for reconsideration21 but the CA denied the motion in a resolution22 dated March 17,
2008.
The Present Petition
In its present petition for review on certiorari,23 TIDCORP argued that the CSC’s interpretation of the last
sentence of Section 7 of RA 8494 (which mandates it to endeavor to make the system conform as closely
as possible with the principles provided in RA 6758) is misplaced. This provision does not bar TIDCORP from
adopting a position classification system and qualification standards different from those prescribed by the
CSC. TIDCORP asserts that it is not also duty bound to comply with civil service rules on compensation and
position classification, as it is exempt from all these rules. Instead, TIDCORP is only required to furnish the
CSC with its compensation and position classification system and qualification standards so that the CSC
can be properly guided in processing TIDCORP’s appointments, promotion and personnel action.
Insisting on its exemption from RA 6758 and CSC Memorandum Circular No. 40, s. 1998, TIDCORP
emphasizes that the provisions of RA 6758, which the CSC applied to TIDCORP, is a general law, while
TIDCORP’s charter, RA 8494, is a special law. In interpreting conflicting provisions of a general law and a
special law, the provisions of the two laws should be harmonized to give effect to both. But if these
provisions cannot be reconciled, then the special law should prevail because it is a qualification to the
general rule.
Further, RA 8494 is a later expression of Congress’ intent as it was enacted nine years after RA 6758 was
approved, and should therefore be construed in this light in its relation with the latter. A new statute should
be interpreted in connection with those already existing in relation to the same subject matter and all
should be made to harmonize and stand together – interpretare et concordare legibus est optimus
interpretandi.
Under these principles, TIDCORP argued that Section 7 of RA 8494, the provision of a special law, should be
interpreted as an exemption to RA 6758. Thus, CSC Memorandum Circular No. 40, s. 1998, which was issued
pursuant to RA 6758, should not have been applied to limit TIDCORP’s staffing prerogatives.
In its comment,24 the CSC noted that CSC Memorandum Circular No. 40, series of 1998, as amended by
CSC Memorandum Circular No. 15, s. 1999, was issued in accordance with its authority to prescribe rules
and regulations to carry out the provisions of civil service laws and other pertinent laws (Administrative
Code), and not pursuant to RA 6758.
The CSC maintained that Section 2(1), Article IX-B of the Constitution includes government and controlled
corporations as part of the civil service. TIDCORP, a GOCC, is therefore covered by the civil service rules
and by the CSC. It should submit its Position Allocation List to the DBM, regardless of its exemption under RA
6758.
Lastly, the CSC argued that RA 8494 should not prevail over RA 6758 because the latter also applies to
GOCCs like TIDCORP; RA 8494 even makes a reference to RA 6758.
Issues
The parties’ arguments, properly joined, present to us the following issues:
1) Whether the Constitution empowers the CSC to prescribe and enforce civil service rules and
regulations contrary to laws passed by Congress;
2) Whether the requirement in Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998,
as amended by CSC Memorandum Circular No. 15, s. 1999, applies to appointments in TIDCORP;
and
3) Whether De Guzman’s appointment as Financial Management Specialist IV in TIDCORP is valid.
The Court’s Ruling
We find the petition meritorious.
Directly at issue is the application of Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998, to
appointments in TIDCORP. TIDCORP claims that its exemption, embodied in Section 7 of its charter,
precludes the application of this requirement. The CSC, on the other hand, maintains its stance that
appointments in a GOCC should follow the civil service laws on appointments, regardless of its exemption
from the civil service rules on compensation, position classification and qualification standards.
While the CSC has authority over personnel actions in GOCCs, the rules it formulates pursuant to this
mandate should not contradict or amend the civil service laws it implements.
At the outset, we clarify that the CSC’s authority over personnel actions in TIDCORP is uncontested. Both
parties acknowledge this relationship in the pleadings they filed before the Supreme Court.25 But while
TIDCORP asserts that its charter exempts it from rules on compensation, position classification and
qualification standards, the CSC argues that this exemption is irrelevant to the denial of De Guzman’s
appointment because the CSC’s authority over TIDCORP’s personnel actions requires it to comply with the
CSC’s rules on appointments.
The parties’ arguments reveal an apparent clash between TIDCORP’s charter, enacted by Congress, and
the CSC rules, issued pursuant to the CSC’s rule-making power. Does the CSC’s constitutional authority
over the civil service divest the Legislature of the power to enact laws providing exemptions to civil service
rules?
We answer in the negative. The CSC’s rule-making power, albeit constitutionally granted, is still limited to
the implementation and interpretation of the laws it is tasked to enforce.
The 1987 Constitution created the CSC as the central personnel agency of the government mandated to
establish a career service and promote morale, efficiency, integrity, responsiveness, progressiveness, and
courtesy in the civil service.26 It is a constitutionally created administrative agency that possesses executive,
quasi-judicial and quasi-legislative or rule-making powers.
While not explicitly stated, the CSC’s rule-making power is subsumed under its designation as the
government’s "central personnel agency" in Section 3, Article IX-B of the 1987 Constitution. The original
draft of Section 3 empowered the CSC to "promulgate and enforce policies on personnel actions, classify
positions, prescribe conditions of employment except as to compensation and other monetary benefits
which shall be provided by law." This, however, was deleted during the constitutional commission’s
deliberations because it was redundant to the CSC’s nature as an administrative agency:27
2
MR. REGALADO. This is more for clarification. The original Section 3 states, among others, the functions of
the Civil Service Commission — to promulgate and enforce policies on personnel actions. Will
Commissioner Aquino kindly indicate to us the corresponding provisions and her proposed amendment
which would encompass the powers to promulgate and enforce policies on personnel actions?
MS. AQUINO. It is my submission that the same functions are already subsumed under the concept of a
central personnel agency.
MR. REGALADO. In other words, all those functions enumerated from line 35 on page 2 to line 1 of page 3,
inclusive, are understood to be encompassed in the phrase "central personnel agency of the
government."
MS. AQUINO. Yes, Mr. Presiding Officer, except that on line 40 of page 2 and line 1 of the subsequent
page, it was only subjected to a little modification.
MR. REGALADO. May we, therefore, make it of record that the phrase ". . . promulgate and enforce
policies on personnel actions, classify positions, prescribe conditions of employment except as to
compensation and other monetary benefits which shall be provided by law" is understood to be subsumed
under and included in the concept of a central personnel agency.
MS. AQUINO. I would have no objection to that.28
The 1987 Administrative Code then spelled out the CSC’s rule-making power in concrete terms in Section
12, Book V, Title I-A, which empowered the CSC to implement the civil service law and other pertinent
laws, and to promulgate policies, standards and guidelines for the civil service.29
The CSC’s rule-making power as a constitutional grant is an aspect of its independence as a constitutional
commission. It places the grant of this power outside the reach of Congress, which cannot withdraw the
power at any time. As we said in Gallardo v. Tabamo, Jr.,30 a case which upheld the validity of a resolution
issued by the Commission on Elections (COMELEC), another constitutional commission:
Hence, the present Constitution upgraded to a constitutional status the aforesaid statutory authority to
grant the Commission broader and more flexible powers to effectively perform its duties and to insulate it
further from legislative intrusions. Doubtless, if its rule-making power is made to depend on statutes,
Congress may withdraw the same at any time. Indeed, the present Constitution envisions a truly
independent Commission on Elections committed to ensure free, orderly, honest, peaceful and credible
elections, and to serve as the guardian of the people's sacred right of suffrage — the citizenry's vital
weapon in effecting a peaceful change of government and in achieving and promoting political stability.
[citation omitted]
But while the grant of the CSC’s rule-making power is untouchable by Congress, the laws that the CSC
interprets and enforces fall within the prerogative of Congress. As an administrative agency, the CSC’s
quasi-legislative power is subject to the same limitations applicable to other administrative bodies. The rules
that the CSC formulates must not override, but must be in harmony with, the law it seeks to apply and
implement.31
For example, in Grego v. Commission on Elections,32 we held that it was improper for the COMELEC, a
constitutional body bestowed with rule-making power by the Constitution, to use the word "shall" in the
rules it formulated, when the law it sought to implement uses the word "may." While rules issued by
administrative bodies are entitled to great respect, "the conclusive effect of administrative construction is
not absolute. The function of promulgating rules and regulations may be legitimately exercised only for the
purpose of carrying the provisions of the law into effect. x x x Administrative regulations cannot extend the
law nor amend a legislative enactment; x x x administrative regulations must be in harmony with the
provisions of the law," and in a conflict between the basic law and an implementing rule or regulation, the
former must prevail.33
CSC Memorandum Circular No. 40, s. 1998, and CSC Resolution No. 15, s. 1999, which were issued pursuant
to the CSC’s rule-making power, involve rules on position classification
Two questions logically follow our conclusion on the extent of the CSC’s rule-making power. The first is
whether Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998, was issued pursuant to the
CSC’s rule-making power; the second is whether this provision involves compensation, position
classification and/or qualification standards that TIDCORP claims to be exempt from. We answer both
questions in the affirmative.
We agree with the CSC’s position that CSC Memorandum Circular No. 40, s. 1998, and CSC Resolution No.
15, s. 1999, were all issued pursuant to its rule-making power. No less than the introductory clause of CSC
Memorandum Circular No. 40, s. 1998, confirms this:
Pursuant to Paragraphs 2 and 3, Section 12, Book V of Administrative Code of 1987 otherwise known as
Executive Order No. 292, the Civil Service Commission hereby prescribes the following rules to govern the
preparation, submission of, and actions to be taken on appointments and other personnel actions.34
Both these memoranda govern appointments and personnel actions in the civil service. CSC
Memorandum Circular No. 40, s. 1998, or the "Revised Omnibus Rules on Appointments and Other
Personnel Actions," updated and consolidated the various issuances on appointments and other personnel
actions and simplified their processing. This was subsequently amended by CSC Memorandum Circular No.
15, s. 1999.
The assailed provisions in those memorandum circulars, however, involve position classification. Section
1(c), Rule III of CSC Memorandum Circular No. 40,35 s. 1998, requires, as a condition sine qua non for the
approval of an appointment, that the position title indicated therein conform with the approved Position
Allocation List. The position title should also be found in the Index of Occupational Service. According to
National Compensation Circular No. 58, the Position Allocation List is a list prepared by the DBM which
reflects the allocation of existing positions to the new position titles in accordance with the Index of
Occupational Service, Position Titles and Salary Grades issued under National Compensation Circular No.
57.36 Both circulars were published by the DBM pursuant to its mandate from RA 6758 to establish a position
classification system in the government.37
Further, the CSC admitted in its comment that RA 6758 was the basis for the issuance of CSC
Memorandum Circular No. 40, s. 1998, as amended by CSC Memorandum Circular No. 15, s. 1999. The CSC
said:
The abovecited Sections 4 and 6 of R.A. No. 6758 are the bases for respondent’s issuance of CSC
Memorandum Circular No. 40, series of 1998, as amended by CSC Memorandum Circular No. 15, series of
1999. To reiterate, the Circulars mandate that appointments should conform to the approved Position
Allocation List (PAL) and at the same time be listed in the Index of Occupational Service (IOS). 38
Section 7 of TIDCORP’s charter exempts it from rules involving position classification
To comply with Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998, TIDCORP must conform
with the circulars on position classification issued by the DBM. Section 7 of its charter, however, expressly
exempts TIDCORP from existing laws on position classification, among others.
In its comment, the CSC would want us to disregard TIDCORP’s exemption from laws involving position
classification because RA 6758 applies to all GOCCs. It also noted that Section 7 of RA 8494, the provision
TIDCORP invokes as the source of its exemption, also directs its Board of Directors to "endeavor to make its
system conform as closely as possible with the principles [and modes provided in] Republic Act No.
6758."39 This reference of RA 6758 in Section 7 means that TIDCORP cannot simply disregard RA 6758 but
must take its principles into account in providing for its own position classifications. This requirement, to be
sure, does not run counter to Section 2(1), Article IX-B of the Constitution which provides that "the civil
service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters." The CSC shall still enforce position
classifications at TIDCORP, but must do this under the terms that TIDCORP has itself established, based on
the principles of RA 6758.
To further expound on these points, the CSC’s authority over TIDCORP is undisputed.1âwphi1 The rules that
the CSC formulates should implement and be in harmony with the law it seeks to enforce. In TIDCORP’s
case, the CSC should also consider TIDCORP’s charter in addition to other civil service laws. Having said
this, there remains the issue of how the CSC should apply the civil service law to TIDCORP, given the
exemptions provided in the latter’s charter. Does the wording of Section 7 of RA 8494 command TIDCORP
to follow issued requirements pursuant to RA 6758 despite its exemption from laws involving position
classification?
We answer in the negative. "Under the principles of statutory construction, if a statute is clear, plain and
free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This
plain-meaning rule or verba legis is derived from the maxim index animi sermo est (speech is the index of
3
intention) and rests on the valid presumption that the words employed by the legislature in a statute
correctly express its intent and preclude the court from construing it differently. The legislature is presumed JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
to know the meaning of the words, to have used words advisedly, and to have expressed its intent by the Associate Justice Associate Justice
use of such words as are found in the statute. Verba legis non est recedendum, or from the words of a
statute there should be no departure."40
BIENVENIDO L. REYES ESTELA M. PERLAS-BERNABE
The phrase "to endeavor" means to "to devote serious and sustained effort" and "to make an effort to do."
Associate Justice Associate Justice
It is synonymous with the words to strive, to struggle and to seek.41 The use of "to endeavor" in the context
of Section 7 of RA 8494 means that despite TIDCORP’s exemption from laws involving compensation,
MARVIC MARIO VICTOR F. LEONEN
position classification and qualification standards, it should still strive to conform as closely as possible with
Associate Justice
the principles and modes provided in RA 6758. The phrase "as closely as possible," which qualifies
CERTIFICATION
TIDCORP’s duty "to endeavor to conform," recognizes that the law allows TIDCORP to deviate from RA
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision
6758, but it should still try to hew closely with its principles and modes. Had the intent of Congress been to
had been reached in consultation before the case was assigned to the writer of the opinion of the Court.
require TIDCORP to fully, exactly and strictly comply with RA 6758, it would have so stated in unequivocal
MARIA LOURDES P. A. SERENO
terms. Instead, the mandate it gave TIDCORP was to endeavor to conform to the principles and modes of
Chief Justice
RA 6758, and not to the entirety of this law.
These inter-relationships render it clear, as a plain reading of Section 7 of RA 8494 itself would confirm, that
TIDCORP is exempt from existing laws on compensation, position classification and qualification standards,
Footnotes
including compliance with Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998.
* No part.
De Guzman’s appointment as Financial Management Specialist IV is valid 1 Rollo, pp. 29-60; under Rule 45 of the Rules of Court.
With TIDCORP exempt from Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998, there 2 Penned by Associate Justice Normandie B. Pizarro, and concurred in by Associate Justices
remains the issue of whether De Guzman’s appointment as Financial Management Specialist IV is valid.
Edgardo P. Cruz and Fernanda Lampas Peralta; id. at 10-18.
Since Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998,is the only requirement that De 3 Id. at 7-8.
Guzman failed to follow, his appointment actually complied with all the requisites for a valid appointment. 4 Id. at 108-114 and 120-122, respectively.
The CSC, therefore, should have given due course to De Guzman's appointment. 5 Id. at 75.
WHEREFORE, all premises considered, we hereby GRANT the petition, and REVERSE and SET ASIDE the 6 Id. at 91.
decision dated September 28, 2007 and the resolution dated March 17, 2008 of the Court of Appeals in 7 Id. at 92-95.
CA-G.R. SP. No. 81058, as well 'as Resolution No. 030144 and Resolution No. 031037 of the Civil Service 8 Id. at 96-98.
Commission that the Court of Appeals rulings affirmed. No costs. 9 Id. at 98.
SO ORDERED. 10 Paragraph 4, Section 12, Chapter III, Subtitle A, Title I, Book V of the Administrative Code of 1987
ARTURO D. BRION
provides: The Commission shall have the following powers and functions: x x x (4) Formulate
Associate Justice
policies and regulations for the administration, maintenance and implementation of position
WE CONCUR:
classification and compensation and set standards for the establishment, allocation and
MARIA LOURDES P. A. SERENO
reallocation of pay scales, classes and positions.
Chief Justice 11 Rollo, pp. 100-107.
12 151-A Phil. 35 (1973).
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR. 13 Rollo, p. 109.
Associate Justice Associate Justice 14 Id. at 108-114.
15 Id. at 115-119.
16 Resolution No. 031037 dated October 7, 2003; id. at 120-122.
(No Part)
TERESITA J. LEONARDO-DE CASTRO 17 Id. at 123-136.
DIOSDADO M. PERALTA*
Associate Justice 18 Supra note 2.
Associate Justice
19 253 Phil. 717 (1989).
20 Tomali v. Civil Service Commission, G.R. No. 110598, December 1, 1994, 238 SCRA 572, 576.

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO 21 Rollo, pp. 221-238.

Associate Justice Associate Justice 22 Supra note 3.

23 Supra note 1.
24 Rollo, pp. 276-286.
ROBERTO A. ABAD MARTIN S. VILLARAMA, JR. 25 In its petition for review on certiorari, TIDCORP admitted that it never raised the issue of the
Associate Justice Associate Justice
CSC’s authority over it, to wit:
"To begin with, petitioner never raised the issue of the authority of respondent over
petitioner. Petitioner agrees that the scope of power of respondent includes the

4
 approval/disapproval of appointments to determine if an appointee possesses the
required qualifications and Civil Service eligibility. In the same light, the coverage of the
Civil Service includes government-owned and controlled corporations with original
charter such as petitioner." (Id. at 45-46.)
26 Section 3, Article IX-B of the 1987 Constitution; and Section 1, Book V of the Administrative Code
of 1987.
27 De Jesus v. Civil Service Commission, 508 Phil. 599, 609 (2005), citing Record of Constitutional
Commission, Vol. I, RCC No. 30, July 15, 1986, p. 593; see Bernas, The Constitution of the Republic
of the Philippines, Vol. II (1st ed., 1988), p. 383.
28 Record of the Constitutional Commission, Vol. I, RCC No. 30, July 15, 1986, pp. 592-593.
29 SECTION 12. Powers and Functions.—The Commission shall have the following powers and
functions:
(1) Administer and enforce the constitutional and statutory provisions on the merit
system for all levels and ranks in the Civil Service;
(2) Prescribe amend and enforce rules and regulations for carrying into effect the
provisions of the Civil Service Law and other pertinent laws;
(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans
and programs to promote economical, efficient and effective personnel administration
in the government;
(4) Formulate policies and regulations for the administration, maintenance and
implementation of position classification and compensation and set standards for the
establishment, allocation and reallocation of pay scales, classes and positions;
30 G.R. No. 104848, January 29, 1993, 218 SCRA 253, 264.
31 Grego v. Commission on Elections, G.R. No. 125955, June 19, 1997, 274 SCRA 481, 498, citing
Commissioner of Internal Revenue v. Court of Appeals, 240 SCRA 368 (1995).
32 Supra, at 499.
33 Land Bank of the Philippines v. Court of Appeals, G.R. Nos. 118712 and 118745, October 6, 1995,
249 SCRA 149, 157-158, citing Peralta v. Civil Service Commission, G.R. No. 95832, August 10, 1992,
212 SCRA 425, 432, Toledo v. Civil Service Commission, G.R. Nos. 92646-47, October 4, 1991, 202
SCRA 507, 514, and Shell Philippines, Inc. v. Central Bank of the Philippines, G.R. No. L-51353, June
27, 1988, 162 SCRA 628.
34 CSC Memorandum Circular No. 40, s. 1998.
35 RULE III. COMMON REQUIREMENTS FOR REGULAR APPOINTMENTS
Section 1. Appointments submitted to the CSC office concerned should meet the
requirements listed hereunder. Non-compliance with such requirements shall be ground
for disapproval of said appointments.
xxxx
(c) Position Title – The position title indicated in the appointment shall conform with the
approved Position Allocation List and should be found in the Index of Occupational
Service (IOS). The salary grade shall always be indicated after the position title.
36 (2) In compliance with the above provision, the Department of Budget and Management has
prepared the Position Allocation List (PAL) reflecting the allocation of existing positions to the new
position titles in accordance with the Index of Occupational Service, Position Titles and Salary
Grades under National Compensation Circular No. 57.
37 Paragraph (1) of National Compensation Circular No. 57 provides: "(1) The attached Index of
Occupational Service, Position Titles and Salary Grades is hereby issued pursuant to RA 6758
entitled ‘An Act Prescribing a Revised Compensation and Position Classification System in the
Government and for other Purposes’"; while Paragraph (1) of National Compensation Circular No.
58 provides: "(1) Section 6 of RA 6758 provides that all positions in the government shall be
allocated to their proper position titles and salary grades in accordance with the Index of
Occupational Service, Position Titles and Salary Grades prepared by the Department of Budget
and Management."
38Rollo, p. 284.
39Id. at 98.
40 Globe-Mackay Cable and Radio Corporation v. NLRC, G.R. No. 82511, March 3, 1992, 206 SCRA
701, 711, citing Ruben E. Agpalo, Statutory Construction, p. 94 (1990); and Aparri v. CA, et al., 212
Phil. 215, 224-225 (1984).
41 Endeavor Definition, Merriam Webster Dictionary, accessed on February 7, 2013 at
http://www.merriam-webster.com/thesaurus/endeavor.
TIDCORP v. CSC
TRADE AND INVESTMENT DEVELOPMENT CORPORATION OF THE PHILIPPINES v. CIVIL SERVICE COMMISSION,
(G)
G.R. No. 182249, March 5, 2013
FACTS:
 August 30, 2001, Arsemio de Guzman was appointed on a permanent status as Financial
Management Specialist IV of TIDCORP, a government-owned and controlled corporation (GOCC)
created pursuant to Presidential Decree No. 1080. His appointment was included in TIDCORP’s Report on
Personnel Actions (ROPA) for August 2001, which was submitted to the CSC – Department of Budget and
Management (DBM) Field Office.
 September 28, 2001, Director Leticia M. Bugtong disallowed De Guzman’s appointment because
the position of Financial Management Specialist IV was not included in the DBM’s Index of Occupational
Service.
 TIDCORP’s Executive Vice President Jane U. Tambanillo appealed the invalidation of De
Guzman’s appointment to Director IV Agnes Padilla of the CSC- NCR. According to Tambanillo, Republic
Act No. 8494, which amended TIDCORP’s charter, empowers its Board of Directors to create its own
organizational structure and staffing pattern, and to approve its own compensation and position
classification system and qualification standards.
 CSC-NCR Director Padilla denied Tambanillo’s appeal because De Guzman’s appointment failed
to comply with Section 1, Rule III of CSC Memorandum Circular No. 40, which requires that the position title
of an appointment submitted to the CSC must conform with the approved Position Allocation List and must
be found in the Index of Occupational Service. Since the position of Financial Management Specialist IV is
not included in the Index of Occupational Service, de Guzman’s appointment to this position must be
invalid.
 TIDCORP’s President and CEO Joel C. Valdes sent CSC Chairperson Karina Constantino-David a
Letter appealing Director Padilla’s decision to the CSC-Central Office (CO). Valdes reiterated TIDCORP’s
argument that RA 8494 authorized its Board of Directors to determine its own organizational structure and
staffing pattern, and exempted TIDCORP from all existing laws on compensation, position classification and
qualification standards.
 In its Resolution No. 30144, the CSC-CO affirmed the CSC-NCR’s decision that de Guzman’s
appointment should have complied with CSC Memorandum Circular No. 40, as amended by CSC
Memorandum Circular No. 15. Rule III, Section 1(c) is explicit in requiring that the position title indicated in
the appointment should conform with the Position Allocation List and found in the Index of Occupational
Service. Otherwise, the appointment shall be disapproved. In disallowing De Guzman’s appointment, the
CSC-CO held that Director Bugtong was simply following the letter of the law.
 TIDCORP moved to reconsider the CSC-CO’s decision, but this motion was denied, prompting
TIDCORP to file a Rule 65 petition for certiorari with the CA. The petition asserted that the CSC-CO
committed grave abuse of discretion in issuing Resolution No. 030144 and Resolution No. 031037.
 CA denied TIDCORP’s petition and upheld the ruling of the CSC-CO in Resolution No. 30144 and
Resolution No. 31037. The CA noted that filing a petition for certiorari was an improper recourse; TIDCORP
should have instead filed a petition for review under Section 1, Rule 43 of the Rules of Court. The CA,
5
however, brushed aside the procedural defect, ruling that the assailed resolutions should still stand as they
are consistent with law and jurisprudence.
 In its present petition for review on certiorari, TIDCORP argued that the CSC’s interpretation of RA
8494 is misplaced
ISSUE:
 Whether or not RA 8494 command TIDCORP to follow issued requirements pursuant to the Position
Classification Act despite its exemption from laws involving position classification.
HELD:
 No, under the principles of statutory construction, if a statute is clear, plain and free from
ambiguity, it must be given its literal meaning and applied without attempted interpretation. This plain-
meaning rule or verba legis is derived from the maxim index animi sermo est (speech is the index of
intention) and rests on the valid presumption that the words employed by the legislature in a statute
correctly express its intent and preclude the court from construing it differently. The legislature is presumed
to know the meaning of the words, to have used words advisedly, and to have expressed its intent by the
use of such words as are found in the statute. Verba legis non est recedendum, or from the words of a
statute there should be no departure.
 The phrase "to endeavour" means to "to devote serious and sustained effort" and "to make an
effort to do." It is synonymous with the words to strive, to struggle and to seek. The use of "to endeavour" in
the context of RA 8494 means that despite TIDCORP’s exemption from laws involving compensation,
position classification and qualification standards, it should still strive to conform as closely as possible with
the principles and modes provided in RA 6758. The phrase "as closely as possible," which qualifies
TIDCORP’s duty "to endeavour to conform," recognizes that the law allows TIDCORP to deviate from the
Position Classification Act, but it should still try to hew closely with its principles and modes. Had the intent
of Congress been to require TIDCORP to fully, exactly and strictly comply with the Position Classification
Act, it would have so stated in unequivocal terms. Instead, the mandate it gave TIDCORP was to
endeavour to conform to the principles and modes of RA 6758, and not to the entirety of this law.
January 23, 2017
G.R. No. 196347
SUSAN A. YAP, Petitioner
vs.
ELIZABETH LAGTAPON, Respondent
DECISION
CAGUIOA, J.:
The presumption of regularity in the performance of official duties is an aid to the effective and
unhampered administration of government functions. Without such benefit, every official action could be
negated with minimal effort from litigants, irrespective of merit or sufficiency of evidence to support such
challenge. To this end, our body of jurisprudence has been consistent in requiring nothing short of clear
and convincing evidence to the contrary to overthrow such presumption. This case is no different.
The Case
In this Appeal by Certiorari 1 (Petition) filed under Rule 45 of the Rules of Court, petitioner Susan A. Yap
(Yap) is assailing the Decision dated July 27, 20062 (questioned Decision) and Resolution dated February
23, 20113 issued by the Court of Appeals - Twentieth (20th) Division (CA) in CA-G.R. SP No. 61944, which
denied the Petition for Annulment of Judgment (Petition for Annulment) dated November 8, 2000 4 and the
subsequent Motion for Reconsideration filed by petitioner Yap. The questioned Decision was rendered in
connection with the Decision dated February 12, 19985 (RTC Decision) of the Regional Trial Court of
Bacolod City, Branch 46 (RTC) in the case filed by herein respondent Elizabeth Lagtapon (Lagtapon),
entitled "Elizabeth Lagtapon v. Susan Yap" and docketed as Civil Case (CC) No. 97-9991.
The Facts
The factual antecedents, as summarized by the CA, are as follows:
On 9 October 1997, [respondent Lagtapon] instituted a civil suit against [petitioner Yap] for a sum of
money with the Regional Trial Court of Negros Occidental docketed as Civil Case No. 97-9991 and the
same was raffled off to the respondent court.
Summons was issued and as per return of service of summons dated 4 November 1997 prepared by the
process server of the respondent court in the person of Ray R. Precioso, he served on November 4, 1997
the summons on [petitioner Yap] who, however, refused to acknowledge receipt thereof, thus, compelling
him to tender the same and left (sic) a copy thereof for her.
As no answer was filed, [respondent Lagtapon] filed a motion to declare [petitioner Yap] in default dated
16 December 1997. The said motion was granted by the respondent court in an order issued on 12 January
1998 declaring [petitioner Yap] in default and allowing [respondent Lagtapon] to present her evidence ex-
parte on 9 February 1998.
Accordingly, [respondent Lagtapon] adduced evidence in her favor ex-parte. On 10 February 1998, the
respondent court issued an order admitting the documentary exhibits offered by [respondent Lagtapon].
On 12 February 1998, the respondent court rendered the challenged Decision in favor of [respondent
Lagtapon] and against [petitioner Yap]. Under date of 6 March 1998, [respondent Lagtapon] filed a
motion for execution which was favorably acted upon by the respondent court through an order of 21
May 1998.
The Ex-Officio Provincial Sheriff for Negros Occidental issued a notice of sale on execution dated 25
September 2000 setting the auction sale of petitioner's property on 17 October 2000. The property of
petitioner that was put up for execution sale consists of a parcel of land identified as Lot 11, Block 2 of the
subdivision plan (LRC) Psd-91608 covered by Transfer Certificate of Title No. T-110467 situated at Herminia
Street, Villa Valderranm (sic), Barangay Mandalagan, Bacolod City.
On or about 11 October 2000, Joey de la Paz, to whom [petitioner Yap] mortgaged the same property,
informed her that when he asked his secretary to secure a copy of the title covering the property from the
Registry of Deeds of Bacolod City, it was found out that annotated on the title is a notice of embargo
relative to Civil Case No. 97-9991, that a notice of sale on execution had already been issued and that the
said property was scheduled to be sold at auction on 17 October 2000.
Immediately upon receiving such information, [petitioner Yap] proceeded to the Hall of Justice to verify
the truthfulness thereof. It was only then that she discovered that she was sued by [respondent Lagtapon]
and a judgment by default against her had long been issued.6
Proceeding from such developments, petitioner Yap filed the subject Petition for Annulment with the CA,
assailing the RTC Decision on the ground that Summons was not validly served on her, which thus
prevented the RTC from acquiring jurisdiction over her person.7 In particular, petitioner Yap alleged that at
the time Summons was allegedly served on November 4, 1997 (as evidenced by the Return of
Service), 8 she was not residing in either of the addresses supplied by respondent Lagtapon in her
Complaint,9 namely: (i) Herminia Street, Villa Valderama, Bacolod City, and (ii) Frankfurt Street, Jesusa
Heights, Bacolod City. 10
With respect to the first address, petitioner Yap claimed that while she used to reside therein, she had
already moved out from the said address sometime in June 1997 and started leasing out the same on July
1998.11 Hence, the Summons could not have been served on her on November 4, 1997, as she had already
vacated from the said address by then.
Meanwhile, regarding the second address, petitioner Yap averred that she never resided at any such
place. 12Allegedly, at the time of the service of Summons, she was residing somewhere else, specifically in
"Frankfurt Street, Sunshine Valley Subdivision, Barangay Estefania, Bacolod City" (as compared to "Frankfurt
Street, Hesusa (sic) Heights, Bacolod City"), which she started leasing from June 1997 (upon vacating the
first address) until September 1999. 13
Simply put, petitioner Yap wholly denied the fact of service of Summons, as reflected in the Return of
Service dated November 4, 199714 accomplished by the RTC's process server, Roy R. Precioso (Precioso).
Notably, it was stated in the said Return that the Summons, together with a copy of the Complaint and its
annexes, was served personally on petitioner Yap on November 4, 1997, at about 4:35 p.m., and that the
6
latter refused to sign the same, which prompted Precioso to tender and leave a copy of the Summons with
petitioner Yap. 15 While the place of service was not indicated in the Return, it should be noted that
Precioso subsequently executed an Affidavit dated February 21, 2001, attesting to the fact that he served
the Summons on petitioner Yap at "Frankfurt Street, Hesusa Village, Bacolod City". 16
Petitioner Yap likewise categorically denied receipt of the Motion to Declare in Default dated December
16, 1997. 17As indicated in the records, the said Motion was served on petitioner Yap via JRS Express mail,
evidenced by JRS Express Cash Airbill No. 734216, and that a certain "Tommy Lim" received it. 18 Petitioner
Yap again claimed that she could not have received the same as she was never a resident in the address
indicated in the said Airbill, which was also "Frankfurt Street, Hesusa (sic) Heights, Bacolod City".19
On the other hand, respondent Lagtapon denied all the factual allegations in the Petition for Annulment
to the effect that petitioner Yap was never served with Summons on the date indicated, and claimed that
petitioner Yap was indeed aware of the proceedings, as borne out by the records of the RTC.20 In her
Answer to Petition for Annulment of Judgment dated March 7, 2001,21 respondent Lagtapon also raised
the following grounds for the dismissal of the said Petition: (i) assuming arguendo that petitioner Yap did
not receive the RTC Decision, she was constructively notified thereof as well as the corresponding Writ of
Execution dated May 22, 1998 issued by the RTC when the Provincial Sheriff of Negros Occidental caused
the registration and annotation of the Notice of Embargo or Levy at the back of petitioner Yap's Transfer
Certificate of Title No. T- 110467.22 Hence, respondent Lagtapon argued that petitioner Yap's failure to file a
petition for relief from judgment within sixty (60) days from the time of the said annotation on May 26, 1998
rendered her Petition for Annulment dismissible;23 (ii) petitioner Yap failed to file a petition
for certiorari under Rule 65 to question the Order declaring her in default, the RTC Decision, or the Notice of
Embargo or Levy;24 and (iii) there was no extrinsic fraud extant from the records of the case that would
serve as basis for the Petition for Annulment under Rule 47 of the Rules of Court. 25
Ruling of the CA
In the questioned Decision, the CA denied the Petition for Annulment and upheld the validity of the service
of Summons on petitioner Yap. The CA held that petitioner Yap's evidence failed to rebut the presumption
of regularity, i.e., that she failed to satisfactorily establish the fact that she was residing elsewhere during
the time of the service of Summons, contrary to what was stated in the Return of Service. 26
In her Motion for Reconsideration dated April 15, 2008,27 petitioner Yap claimed that the CA "overlooked
very important documents which, if taken into consideration, could materially affect the decision it first
arrived at".28 In its Resolution dated February 23, 2011, the CA denied petitioner Yap's Motion for
Reconsideration for lack of merit.29
Hence, this Petition.
Proceedings before the SC
On June 9, 2011, respondent Lagtapon filed a Motion to Dismiss,30 which was noted without action by the
Court in its Resolution dated October 19, 2011.31 Thus, in her Comment dated January 12,
2012,32 respondent Lagtapon raised the sole issue of whether the remedy of Annulment of Judgment could
still be availed of by petitioner Yap on the ground that "[ e ]xtrinsic [ f]raud cannot be a valid ground if it
was not availed of in a Motion for [New] Trial or Petition [f]or Relief of Judgment".33
Accordingly, Yap filed her Reply dated September 1 7, 2012, 34 which was duly noted by the Court in a
Resolution dated October 22, 2012.35
Issue
At issue in this case is whether the CA committed reversible error in dismissing the Petition for Annulment
and ruling that the RTC had validly acquired jurisdiction over petitioner Yap's person through service of
summons.
The Court's Ruling
The Petition is denied.
In resolving the principal issue of this case, the Court shall separately discuss the matters raised by the
opposing sides according to their nature.
I. Procedural Matters
Questions of fact are not cognizable
in a Rule 45 petition.
At its core, the instant controversy hinges on whether Summons was validly served upon petitioner Yap or
not. As discussed above, the parties' claims are diametrically opposing: on the one hand, petitioner Yap
denies any service of Summons on her person, while on the other, the RTC's process server, Precioso, attests
to having served Summons on petitioner Yap herself. Resolving this issue would thus necessitate a re-
examination and re-weighing of the evidence on record.
In this regard, it has been repeatedly held by the Court that an appeal by certiorari under Rule 45 of the
Rules is limited in its scope - the Court may only entertain questions of law 36 as jurisdiction over factual
questions has been devolved to the trial courts as a matter of efficiency and practicality in the
administration of justice. As an arbiter of laws, the Court is not expected to recalibrate the evidence
already considered by inferior courts. 37 More importantly, to the extent that the evidence on record amply
support the factual findings of the trial court, such findings are deemed conclusive and will not be
disturbed on appeal. 38 On this score alone, the Petition, for raising factual issues, may already be denied
pursuant to the Court's discretionary appellate jurisdiction.
The remedy of annulment of judgment
under Rule 47 of the Rules is based
either on extrinsic fraud or lack of
jurisdiction.
In her Comment dated January 12, 2012, respondent Lagtapon insists that the instant Petition should be
dismissed on the ground that the same is based on extrinsic fraud and that petitioner Yap' s failure to avail
of the remedies of new trial or petition for relief from judgment on such ground bars a resort to the remedy
of annulment of judgment. 39
Respondent Lagtapon's argument is misplaced.
The remedy of annulment of judgment, embodied in Rule 4 7 of the Rules, is extraordinary in character,
and does not so easily and readily lend itself to abuse by parties aggrieved by final judgments. The
grounds for a Rule 4 7 petition are: (i) extrinsic fraud and (ii) lack of jurisdiction. 40 Extrinsic fraud cannot be
a valid ground if it had been availed of, or could have been availed of, in a motion for new trial or petition
for relief. 41 On the other hand, lack of jurisdiction means either lack of jurisdiction over the subject matter
or nature of the action, or lack of jurisdiction over the person of the defendant. 42
In the Petition filed by petitioner Yap, she did not specify her exclusive reliance on extrinsic fraud as basis of
her Petition under Rule 47. To be precise, petitioner Yap's claim of defective service of Summons
brings to fore the lack of jurisdiction of the RTC over her person.43
Moreover, the Court agrees with the position of petitioner Yap that she could no longer avail of the
remedies of new trial or petition for relief from judgment because, as borne out by the records, she alleged
to have become aware of the RTC Decision on October 11, 2000 at the latest, at the time when a writ of
execution had already been issued.44Clearly, the remedies of appeal or new trial were no longer available
to petitioner Yap. Under the Rules, execution shall issue upon the expiration of the period to appeal
therefrom, if no appeal has been duly perfected. 45 In the same manner, a motion for new trial can only be
filed within the period for taking an appeal.46 Under the present circumstances, by the time petitioner Yap
acquired knowledge of the proceedings, the period for perfecting an appeal had already lapsed.
Likewise, the remedy of a petition for relief was no longer available, considering that a writ of execution
had already been issued as early as May 22, 1998, which was already more than six (6) months after
petitioner Yap acquired knowledge of the RTC Decision.47
II. Substantive Matters
Be that as it may, even if the foregoing rules were to be relaxed in the interest of substantial justice, the
Court finds no reason to arrive at a conclusion different from that reached by the CA. Upon judicious
review of the records, the Court rules that the CA committed no reversible error in finding that Summons
had been validly served on petitioner Yap.
The Court explains.
It is axiomatic that a public official enjoys the presumption of regularity in the discharge of one's official
duties and functions. 48 Here, in the absence of clear indicia of partiality or malice, the service of Summons
on petitioner Yap is perforce deemed regular and valid. Correspondingly, the Return of Service of Precioso
as process server of the RTC constitutes prima facie evidence of the facts set out therein. 49
7
The Return of Service states:
Respectfully returned to the Officer-in-Charge of this Court the herein-attached Summons dated October
15, 1997, DULY SERVED with the following information, to wit:
That on November 4, 1997 at about 4:35 p.m., the undersigned served a copy of the complaint, its annexes
as well as the Summons to the defendant Susan A. Yap, personally, but she refused to sign said
Summons despite the undersigned's explanation to her but nevertheless, the undersigned tendered and
leave (sic) a copy for her.
For the information of this Honorable Court.
Bacolod City, November 4, 1997.50 (Emphasis supplied)
Hence, as far as the circumstances attendant to the service of Summons are concerned, the Court has
the right to rely on the factual representation of Precioso that service had indeed been made on
petitioner Yap in person. A contrary rule would reduce the Court to a mere fact-finding tribunal at the
expense of efficiency in the administration of justice, which, as mentioned earlier, is beyond the ambit of
the Court's jurisdiction in a Rule 45 petition.
To successfully overcome such presumption of regularity, case law demands that the evidence against it
must be clear and convincing; absent the requisite quantum of proof to the contrary, the presumption
stands deserving of faith and credit. 51 In this case, the burden of proof to discharge such presumption lay
with petitioner Yap. 52
In her Petition, petitioner Yap makes much of the failure of Precioso to include the place of service in his
Return, contrary to Section 18, Rule 14 of the Rules of Court, 53 relying on the pronouncements in Santiago
Syjuco, Inc. v. Castro. 54 Notably, however, the circumstances attendant in that case
are not on all fours with the facts at hand. In Syjuco, which cited Delta Motor Sales Corporation v.
Mangosing, 55 the service of Summons involved a juridical entity and the crux of the defect there was the
process server's failure to properly identify the person served inasmuch as Section 11 of Rule 14 of the Rules
provides an exclusive list of persons that may be served Summons when the defendant is a corporation.
Here, the disputed service of Summons was made personally upon Yap as defendant in CC No. 97-9991
and was made pursuant to Section 6 of the said Rule.
Moreover, and as previously adverted to, while such detail was indeed lacking in the said Return, the
Court cannot ignore the fact that Precioso subsequently executed an Affidavit supplying the place of
service, which, to the mind of this Court, constitutes substantial compliance with the Rules. On this note, the
Court agrees with the following disquisition of the CA:
Petitioner puts in issue the place of her residence at the time of the alleged personal service of summons
on her. However it is clear from the foregoing provisions of the Rules of Court that where there is personal
service of summons, the place is of no moment. The place becomes material only where the service is by
substituted service for in such a case the rule requires, in explicit manner, that the summons be served only
either at the defendant's residence or his office/place of business. Insofar as personal service is concerned,
what matters is that the defendant has been personally put on notice regarding the institution of an action
against him and was furnished with copy (sic) of the summons and the complaint. Service to be done
personally does not mean that service is possible only at the defendant's actual residence. 56
This presumption of regularity accorded to Precioso' s Return of Service of Summons was, however,
according to Petitioner Yap, sufficiently rebutted by the following pieces of evidence:57
(i) Affidavits of her neighbors attesting to the fact that Yap had been residing in "Frankfurt Street, Sunshine
Valley Subdivision, Barangay Estefania, Bacolod City" beginning June 1997·58
(ii) Utility receipts bearing the name of her alleged landlord, Liberato Reyes; 59 and
(iii) Mail matters from the RTC (i.e., Orders dated January 12, 1998 and February 10, 1998) in envelopes
which had handwritten notations reading "UNCLAIMED". 60
Directly addressing this argument, the CA, in the questioned Decision, ruled that the above evidence was
insufficient to support the claim that petitioner Yap was residing elsewhere at the time of the service of
Summons and therefore inadequate to overcome the presumption of regularity. 61 The Court agrees.
With respect to item (i), petitioner Yap would want the Court to rely on statements allegedly made by
petitioner Yap's neighbors with respect to a purported lease contract between petitioner Yap and her
landlord in lieu of a statement from the landlord himself. In the first place, the records are bereft of any
lease contract involving the residence in the Sunshine Valley address. The Court affirms the following
observations of the CA on this matter:
Petitioner contends that when the summons was allegedly served on her on 4 November 1997, she was not
residing at both addresses given by private respondent but at Frankfurt Street, Sunshine Valley
Subdivision. The said alleged fact was not established by petitioner to the Court's satisfaction. No contract
of lease covering her lease of the said place was given by petitioner. To prove the alleged lease, mere
affidavits of alleged neighbors of her in the said area were submitted. The affidavits of petitioner's witnesses
were executed in October 2000 and both affiants made the impression that they could very well recall
that petitioner's lease of the residential unit started in June of 1997 (and not other month of that year, for
that matter). Nothing in said affidavits would explain why both affiants were able to retain that particular
time in their minds as the date when petitioner commenced her lease of the aforesaid dwelling place. No
affidavit from the supposed lessor was submitted. Petitioner put as an excuse her former lessor's reluctance
to get involved in the case. To the mind of the Court, the refusal of the said lessor to execute an affidavit for
the alleged term, only casts more doubt on petitioner's claim to this effect.
W[e] also wonder why petitioner agreed to lease the said place from Mr. Reyes from June, 1997 up to
September, 1999 without any written lease contract.1âwphi1 Petitioner herself is a lessor and she is that
kind whose lease of her property even for a short time is covered by a written agreement as illustrated by
two samples of such contract she attached to her petition involving her property at Herminia Street, one is
for one year while the other, for a shorter term of six (6) months.62 (Emphasis supplied)
While it is true that the trial court cannot dictate what particular evidence the parties must present in order
to prove their respective cases, the fact remains that petitioner Yap is still bound to present clear
and convincing evidence to support her claims. Proceeding therefrom, the Court remains unconvinced
that petitioner Yap had not and could not have been served Summons as specifically detailed in the
Return of Service.
As to item (ii), petitioner Yap implores the Court to examine Central Negros Electric Coop., Inc. Provisionary
Receipt No. 156556 dated November 12, 199763 and BACIWA Official Receipt No. 1738502 dated
September 8, 199764 that are attached to a Letter dated February 16, 199865 purportedly written by
Liberato Reyes and addressed to petitioner Yap.
However, examining the above documents, the Court finds them severely lacking in establishing petitioner
Yap's residence in the Sunshine Valley address. First of all, both receipts do not indicate any address
corresponding to the purported utility expenses incurred by petitioner Yap during the alleged lease. In the
same manner, no address was mentioned in the Letter dated February 16, 1998 - what the Letter simply
contained were vague statements regarding the collection of rentals.
Based on the said documents, it would be impossible for the Court to determine where petitioner Yap had
her residence at the time Summons was served on her person. Granting that there was indeed a lessor-
lessee relationship between petitioner Yap and Liberato Reyes, there is no showing that the property
subject of the lease was "Frankfurt Street, Sunshine Valley Subdivision, Barangay Estefania, Bacolod City"
and no place else. While it may be true that Liberato Reyes was a lessor of petitioner Yap, there is no way
for this Court to know whichaddress the latter was occupying specifically, for it may very well be that
Liberato Reyes had other properties at the time the alleged lease was entered into. Moreover, that the
handwritings thereon were indeed those of Liberato Reyes was not even satisfactorily established.
Most significant, however, is the glaring fact that the Letter was dated several months after the service of
Summons on November 4, 1997. As pointedly stressed by the CA, that petitioner Yap was residing in a
place owned by Liberato Reyes on February 16, 1998 is immaterial in proving her residence at an earlier
time, i.e., November 4, 1997.66
Taken together, the above pieces of evidence do not, in any respect, tend to establish the fact that
petitioner Yap was not served Summons on November 4, 1997 in "Frankfurt Street, Hesusa Village, Bacolod
City".67
Finally, as regards item (iii), the Court finds that the mail matters from the RTC bearing handwritten
notations "UNCLAIMED" are highly inconclusive to establish her non-residence at the Hesusa Village
address, let alone her residence at the Sunshine Valley address, considering that they involved orders
dated after the service of Summons on November of 1997. On the other hand, what is present in the
8
records is evidence of receipt of the Motion to Declare in Default dated December 16, 1997 via JRS 18 Id.
Express by a certain "Tommy Lim," albeit denied by petitioner Yap.68 19 Id.
All told, the Court hereby upholds the finding of the CA in its questioned Decision that petitioner Yap' s 20 Id.atl20-121,128.

evidence does not constitute clear and convincing evidence to overturn the presumption of regularity 21 Id.atll8-140.

attendant to the Return of Service. Following Umandap v. Sabio, Jr., 69 self-serving assertions made by an 22 Id. at 129-130.

aggrieved party are insufficient to disregard the statements made in the sheriff's certificate after service of 23 Id. at 129-131.

Summons. In light of petitioner Yap's failure to rebut such presumption, the Court finds that the RTC properly 24 Id. at 131-132.

acquired jurisdiction over petitioner Yap's person, which renders the RTC Decision valid. Accordingly, the 25 Id. at 132

CA correctly dismissed the subject Petition for Annulment. 26 See id. at 37, 40.

WHEREFORE, the foregoing premises considered, the Court resolves to DENY the instant Petition 27 Id. at 147-153.

and AFFIRM in toto the Decision dated July 27, 2006 and Resolution dated February 23, 2011 of the Court of 28 Id. at 147.

Appeals - Twentieth (20th) Division in CA-G.R. SP No. 61944. 29 Id. at 42-43.

SO ORDERED. 30 Id. at 162-165.

ALFREDO BENJAMIN S. CAGUIOA 31 Id. at 169.

Associate Justice 32 Id. at 171-175.

WE CONCUR: 33 Id. at 171.

MARIA LOURDES P.A. SERENO 34 Id. at 180-A to 183.

Chief Justice 35 Id. at 185.

Chairperson 36 RULES OF COURT, Rule 45, Section 1.

37 See Miro v. V da. De Erederos, 721 Phil. 772, 785-787 (2013).
TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO
38 See id. at 784.
Associate Justice Associate Justice
39 See rollo, pp. 171-172
ESTELA M. PERLAS-BERNABE 40 RULES OF COURT, Rule 47, Section 2.
Associate Justice 41 Id.
CERTIFICATION 42 Yuk Ling Ong v. Co, G.R. No. 206653, February 25, 2015, 752 SCRA 42, 48.
Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the above 43 See rollo, p. 27.
Decision had been reached in consultation before the case was assigned to the writer of the opinion of 44 Id. at 28.
the Court’s Division. 45 RULES OF COURT, Rule 39, Section 1.
MARIA LOURDES P.A. SERENO 46 Id. at Rule 37, Section I.
Chief Justice 47 Rollo, p. 28.
48 See Gatmaitan v. Gonzales, 525 Phil. 658, 671 (2006).
49 See Guanzon v. Arradaza, 539 Phil. 367, 375 (2006).
Footnotes 50 Rollo, p. 82.
1 Rollo, pp. 12-31. 51 Guanzon v. Arradaza, supra note 49.
2 Id. at 32-41. Penned by Associate Justice Priscilla Baltazar-Padilla, with Associate Justices 52 See Office of the Ombudsman v. Manalastas, G.R. No. 208264, July 27, 2016, p. 8.
Pampio A. Abarintos and Marlene Gonzales-Sison concurring. 53 Rollo, p. 22
3 Id. at 42-43. Penned by Associate Justice Edgardo L. Delos Santos, with Associate Justices Agnes
54 256 Phil. 621 (1989).
Reyes-Carpio and Eduardo B. Peralta, Jr. concurring. 55 162 Phil. 804 (1976).
4 Id. at 44-57.
56 Rollo, p. 37.
5 Id. at 68-72. Penned by Presiding Judge Emma C. Labayen.
57 Id. at 26-27.
6 Id. at 33-35.
58 Id. at 24, 83-84.
7 Id. at 54.
59 Id. at 24, 86-87.
8 Id. at 119-120.
60 Id. at 25-26, 106 and 108.
9 Id. at 75-80.
61 See id. at 37.
10 Id. at 75.
62 Id. at 37-38.
11 Id. at 35.
63 Id. at 86.
12 Id.
64 Id. at 87.
13 ld. at 55.
65 Id. at 85.
14 Id. at 82.
66 See id. at 38.
15 Id.
67 Id. at 146. Annex "4" of the Answer to Petition for Annulment of Judgment dated March 7, 2001.
16 Id. at 146. Annex "4" of the Answer to Petition for Annulment of Judgment dated March 7, 2001.
68 Id. at 48.
17 Id. at 48.
69 393 Phil. 657, 667 (2000).

9
YAP vs. LAGTAPON
Susan A. Yap Vs. Elizabeth Lagtapon
G.R. No. 196347
January 23, 2017
Facts:
On October 9, 1997, respondent Lagtapon instituted a civil suit against petitioner Yap for a sum of money.
Summons were issued and as per return of service of summons dated November 4, 1997, prepared by the
process server in the person of Ray Precioso, the petitioner refused to acknowledge receipt thereof.
As no answer was filed, respondent filed motion to declare petitioner as default. Motion was granted,
therefore, giving the respondent the right to present her evidence ex-parte.
On February 12, 1998, court rendered judgment in favor of the respondent.
On September 25, 2000, the Ex-Officio Provincial Sheriff for Negros Occidental issued a Notice of Sale on
execution. Setting the auction of the petitioner’s property. Joey Dela Paz, who mortgaged the property,
found out that the annotated title of the said property is in a Notice of Embargo. Upon having knowledge
to this, petitioner resorted to the court for the truth and she found out that she was sued by the
respondent.
Issue:
Whether or not the CA committed reversible error in dismissing the Petition for Annulment and ruling that
RTC had validly acquired jurisdiction over petitioner Yap’s person through service of summons.
Ruling:
Proceeding from such developments, petitioner Yap filed the subject Petition for Annulment with the CA,
assailing the RTC decision on the ground that summons was not validly served on her, which, thus,
prevented the RTC from acquiring jurisdiction over her person. Petitioner Yap asserted that at the time
when summons were sent, she was not anymore residing in the address where the respondent provided.
Petitioner wholly denied the receipt of summons. However, it was noticed in the returns of summons that
petitioner personally received the summons but refused to receive and sign. So it prompted the process
server to leave a copy to the petitioner.
In the questioned decision of RTC, the CA denied the Petition for Annulment and upheld the validity of
service summons. The CA held that the petitioner failed to rebut the presumption of regularity, that she
failed to satisfactorily establish that fact that she was residing elsewhere during the time of the service
summons, contrary to what is stated in the Returns of Service.
All told, the Court hereby upholds the finding of the CA in its questioned Decision that petitioner Yap’s
evidence does not constitute a clear and convincing evidence to overturn the presumption of regularity
attendant to the Returns of Service.
Wherefore, the foregoing premises considered, the Court resolves to deny the instant petition.
G.R. No. 192685 July 31, 2013
OSCAR R. AMPIL, Petitioner,
vs.
THE HON. OFFICE OF THE OMBUDSMAN, POLICARPIO L. ESPENESIN, Registrar, Register of Deeds, Pasig City,
FRANCIS SERRANO, YVONNE S. YUCHENGCO, and GEMA O. CHENG, Respondents.
x-----------------------x
G.R. No. 199115
OSCAR R. AMPIL, Petitioner,
vs.
POLICARPIO L. ESPENESIN, Respondent.
DECISION
PEREZ, J.:
No less than the Constitution maps out the wide grant of investigatory powers to the Ombudsman. 1 Hand
in hand with this bestowal, the Ombudsman is mandated to investigate and prosecute, for and in behalf
of the people, criminal and administrative offenses committed by government officers and employees, as
well as private persons in conspiracy with the former.2 There can be no equivocation about this power-
and-duty function of the Ombudsman.
Before us are consolidated petitions separately filed by Oscar R. Ampil (Ampil): (1) one is for certiorari
under Rule 65 of the Rules of Court docketed as G.R. No. 192685; and (2) the other is for review on certiorari
under Rule 45 of the Rules of Court docketed as G.R. No. 199115.
Challenged in the petition for certiorari is the Resolution3 of the Ombudsman in OMB-C-C-07-0444-J,
dismissing the criminal complaint filed by Ampil against respondents Policarpio L. Espenesin (Espenesin),
Francis Serrano (Serrano), Yvonne S. Yuchengco (Yuchengco) and Gema O. Cheng (Cheng), and the
Order4 denying Ampil’s motion for reconsideration thereof. Ampil’s complaint charged respondents with
Falsification of Public Documents under Article 171(6) of the Revised Penal Code and violation of Sections
3(a) and (e) of Republic Act No. 3019, The Anti-Graft and Corrupt Practices Act, as amended.
The appeal by certiorari, on the other hand, assails the Decision of the Court of Appeals in CA G.R. SP No.
113171, which affirmed the Order dated 13 July 2009 of the Ombudsman in OMB-C-A-07-0474-J on the
administrative aspect of the mentioned criminal complaint for Falsification and violation of Republic Act
No. 3019 against the Registrar of Deeds, respondent Espenesin. Initially, the Ombudsman issued a Decision
dated 30 April 2008, finding Espenesin guilty of Simple Misconduct and meting on Espenesin the penalty of
one (1) month suspension. On motion for reconsideration of Ampil, the Ombudsman favored Espenesin’s
arguments in his Opposition, and recalled the one-month suspension the Ombudsman had imposed on
the latter.
These consolidated cases arose from the following facts.
On 9 November 1995, ASB Realty Corporation (ASB) and Malayan Insurance Company (MICO) entered
into a Joint Project Development Agreement (JPDA) for the construction of a condominium building to be
known as "The Malayan Tower." Under the JPDA, MICO shall provide the real property located at the heart
of the Ortigas Business District, Pasig City, while ASB would construct, and shoulder the cost of construction
and development of the condominium building.
A year thereafter, on 20 November 1996, MICO and ASB entered into another contract, with MICO selling
to ASB the land it was contributing under the JPDA. Under the Contract to Sell, ownership of the land will
vest on ASB only upon full payment of the purchase price.
Sometime in 2000, ASB, as part of the ASB Group of Companies, filed a Petition for Rehabilitation with
Prayer for Suspension of Actions and Proceedings before the Securities and Exchange Commission (SEC).
As a result, the SEC issued a sixty (60) day Suspension Order (a) suspending all actions for claims against the
ASB Group of Companies pending or still to be filed with any court, office, board, body, or tribunal; (b)
enjoining the ASB Group of Companies from disposing of their properties in any manner, except in the
ordinary course of business, and from paying their liabilities outstanding as of the date of the filing of the
petition; and (c) appointing Atty. Monico V. Jacob as interim receiver of the ASB Group of
Companies.5 Subsequently, the SEC, over the objections of creditors, approved the Rehabilitation Plan
submitted by the ASB Group of Companies, thus:
10
PREMISES CONSIDERED, the objections to the rehabilitation plan raised by the creditors are hereby
considered unreasonable.
Accordingly, the Rehabilitation Plan submitted by petitioners is hereby APPROVED, except those pertaining
to Mr. Roxas’ advances, and the ASB-Malayan Towers. Finally, Interim Receiver Mr. Fortunato Cruz is
appointed as Rehabilitation Receiver.6 (Emphasis supplied).
Because of the obvious financial difficulties, ASB was unable to perform its obligations to MICO under the
JPDA and the Contract to Sell. Thus, on 30 April 2002, MICO and ASB executed their Third contract, a
Memorandum of Agreement (MOA),7 allowing MICO to assume the entire responsibility for the
development and completion of The Malayan Tower. At the time of the execution of the MOA, ASB had
already paid MICO ₱427,231,952.32 out of the ₱640,847,928.48 purchase price of the realty.8
The MOA specifies the entitlement of both ASB and MICO to net saleable areas of The Malayan Tower
representing their investments. It provides, in pertinent part:
Section 4. Distribution and Disposition of Units. (a) As a return of its capital investment in the Project, each
party shall be entitled to such portion of all the net saleable area of the Building that their respective
contributions to the Project bear to the actual construction cost. As of the date of the execution hereof,
and on the basis of the total costs incurred to date in relation to the Remaining Construction Costs (as
defined in Section 9(a) hereof), the parties shall respectively be entitled to the following (which entitlement
shall be conditioned on, and subject to, adjustments as provided in sub-paragraph (b) of Section 4 in the
event that the actual remaining cost of construction exceeds the Remaining Construction Cost):
(i) MICO – the net saleable area particularly described in Schedule 2 hereof.
(ii) ASB – the following net saleable area:
(A) the net saleable area which ASB had pre-sold for an aggregate purchase
price of ₱640,085,267.30 as set forth in Schedule 1 (including all paid and
unpaid proceeds of said presales);
(B) the net saleable area particularly described in Schedule 3 hereof which
shall be delivered to ASB upon completion of the Project; and,
(C) provided that the actual remaining construction costs do not exceed the
Remaining Construction Cost, the net saleable area particularly described in
Schedule 4 hereof which shall be delivered to ASB upon completion of the
Project and determination of its actual construction costs. If the actual
remaining construction costs exceed the Remaining Construction Cost, sub-
paragraph (b) of this Section 4 shall apply.
(b) In the event that the actual remaining construction costs exceed the Remaining Construction
Cost as represented and warranted by ASB to MICO under Section 9(a) hereof, and MICO pays
for such excess, the pro-rata sharing in the net saleable area of the Building, as provided in sub-
paragraph (a) of this Section 4 shall be adjusted accordingly. In such event, MICO shall be
entitled to such net saleable area in Schedule 4 that corresponds to the excess of the actual
remaining cost over the Remaining Construction Cost.
(c) To ensure the viability of the Project, the parties agree on a single pricing system, which MICO
shall have the exclusive right to fix and periodically adjust based on prevailing market conditions
in consultation with, but without need of consent of, ASB, for each party’s primary sale or other
disposition of its share in the net saleable area of the Building. In accordance with the
immediately preceding provision, MICO hereby adopts the selling prices set forth in Schedule 5
hereof. Each party or its officers, employees, agents or representatives shall not sell or otherwise
dispose any share of said party in the net saleable area of the Building below the prices fixed by
MICO in accordance with this Section 4 (c). MICO shall have the exclusive right to adopt
financing and discounting schemes to enhance marketing and sales of units in the Project and
such right of MICO shall not be restricted or otherwise limited by the foregoing single pricing
system provision.
(d) Each party shall bear the profits earned and losses incurred as well as any and all taxes and
other expenses in connection with the allocation or sale of, or other transaction relating to, the
units allotted to each party.9
On 11 March 2005, Condominium Certificates of Title (CCTs) for 38 units 10 and the allotted parking spaces
were issued in the name of ASB. On even date but prior to its release, another set of CCTs covering the
same subject units but with MICO as registered owner thereof, was signed by Espenesin in his capacity as
Registrar of Deeds of Pasig City. Notably, Espenesin had likewise signed the CCTs which were originally
issued in ASB’s name.
On 2 April 2006, counsel for ASB wrote Espenesin calling his attention to the supposed amendment in the
CCTs which he had originally issued in ASB’s name.11 Counsel for ASB demanded that Espenesin effect in
the second set of CCTs, the registration of the subject units in The Malayan Tower back to ASB’s name.
On 17 May 2006, Espenesin replied and explained, thus:
The registration of the Malayan-ASB Realty transaction, from its inception up to the issuance of titles, were
all handled by respondent Atty. Francis Serrano. He therefore appeared and we have considered him the
legitimate representative of both parties (sic). His representation, we gathered, covers the interest of both
MICO and ASB in as far as the titling of the condominium units are concerned.
Sometime ago Serrano requested that condominium titles over specified units be issued in consonance
with the sharing in the joint venture MOA. Titles were correspondingly issued as per request, some in the
name of MICO and some in the name of ASB. Before its release to the parties, Atty. Serrano came back
and requested that some titles issued in the name of ASB be changed to MICO because allegedly there
was error in the issuance.
Believing it was a simple error and on representation of the person we came to know and considered the
representative of both parties, we erased the name ASB Realty Corporation on those specified titles and
placed instead the name Malayan Insurance Company.
To our mind, the purpose was not to transfer ownership but merely to rectify an error committed in the
issuance of titles. And since they were well within our capacity to do, the titles not having been released
yet to its owner, we did what we believed was a simple act of rectifying a simple mistake.12
After learning of the amendment in the CCTs issued in ASB’s name, Ampil, on 23 January 2007, wrote
respondents Yuchengco and Cheng, President and Chief Financial Officer of MICO, respectively,
introducing himself as an unsecured creditor of ASB Holdings, Inc., one of the corporations forming part of
the ASB Group of Companies.13Ampil averred that MICO had illegally registered in its name the subject
units at The Malayan Tower which were reserved for ASB under the MOA, and actually, already registered
in ASB’s name with the Register of Deeds of Pasig City. Ampil pointed out that the "condominium units
should have benefited him and other unsecured creditors of ASB because the latter had categorically
informed them previously that the same would be contributed to the Asset Pool created under the
Rehabilitation Plan of the ASB Group of Companies." Ultimately, Ampil demanded that Yuchengco and
Cheng rectify the resulting error in the CCTs, and facilitate the registration of the subject units back to ASB’s
name.
Respondents paid no heed to ASB’s and Ampil’s demands.
As previously adverted to, Ampil charged respondents with Falsification of Public Documents under Article
171(6) of the Revised Penal Code and violation of Sections 3(a) and (e) of Republic Act No. 3019 before
the Office of the Ombudsman, alleging the following:
1. Respondents, in conspiracy, erased the name of ASB, and intercalated and substituted the
name of MICO under the entry of registered owner in the questioned CCTs covering the subject
units of The Malayan Tower;
2. The alterations were done without the necessary order from the proper court, in direct violation
of Section 10814 of Presidential Decree No. 1529;
3. Respondents violated Article 171(6) of the Revised Penal Code by:
3.1 Altering the CCTs which are public documents;
3.2 Effecting the alterations on genuine documents;
3.3 Changing the meaning of the CCTs with MICO now appearing as registered owner
of the subject units in Malayan Tower; and
3.4 Effectively, making the documents speak something false when ASB is the true
owner of the subject units, and not MICO.
11
 4. Ampil, as unsecured creditor of ASB, was unjustly prejudiced by the felonious acts of
respondents;
5. Respondents violated Sections 3(a) and (e) of Republic Act No. 3019:
5.1 Respondent Espenesin, as Registrar of the Pasig City Registry of Deeds, committed
an offense in connection with his official duties by allowing himself to be persuaded,
induced or influenced by respondent Serrano into altering the questioned CCTs; and
5.2 The actions of respondent Espenesin demonstrate manifest partiality, evident bad
faith and/or, at the least, gross inexcusable negligence.
6. Respondents Yuchengco and Cheng, being responsible officers of MICO, as principals by
inducement and conspirators of Espenesin and Serrano, are likewise liable for falsification of the
CCTs and violation of Sections 3(a) and (e) of Republic Act No. 3019.15
As required by the Ombudsman, respondents filed their counter-affidavits: Espenesin and Serrano filed
individually, while Yuchengco and Cheng filed jointly. Respondents’ respective counter-affidavits uniformly
denied petitioner’s charges and explicated as follows:
Respondent Espenesin countered, among others, (i) that their intention was only to cause the necessary
rectification on certain errors made on the CCTs in issue; (ii) that since the CCTs were not yet issued and
released to the parties, it is still within his authority, as part of the registration process, to make the
necessary amendments or corrections thereon; (iii) that no court order would be necessary to effect such
changes, the CCTs still being within the control of the Register of Deeds and have not yet been released to
the respective owners; (iv) that the amendments were made not for the purpose of falsifying the CCTs in
issue but to make the same reflect and declare the truth; and (v) that he merely made the corrections in
accordance with the representations of respondent Serrano who he believed to be guarding and
representing both the interests of MICO and ASB.
Respondent Serrano, on the other hand, argued: (i) that the units in issue are not yet owned by ASB; (ii)
that these units were specifically segregated and reserved for MICO in order to answer for any excess in
the estimated cost that it will expend in the completion of the Malayan Tower; (iii) that ASB is only entitled
to these reserved units only after the Malayan Tower is completed and that the units are not utilized to
cover for the increase in the cost expended by MICO pursuant to Section 4(c) of the MOA; (iv) that the
Malayan Tower was still incomplete at the time when the alterations were made on the CCT, hence, the
claim of ownership of ASB over the reserved units is premature and totally baseless; (v) that prior to the
fulfillment of the resolutory condition, that is, after the completion of the Malayan Tower and there remains
a balance in the Remaining Construction Cost, the units still rightfully belongs to MICO; and (vi) that the
alteration was made merely for the purpose of correcting an error.
Respondents Cheng and Yuchengco, while adopting the foregoing arguments of Espenesin and Serrano,
further averred that: (i) Ampil has no legal personality to file this suit, he being merely an unsecured creditor
of ASB whose interest was not definitively shown to have been damaged by the subject controversy; (ii)
that their participation as respondents and alleged co-conspirators of Serrano and Espenesin was not
clearly shown and defined in the complaint; (iii) the CCTs issued in the name of ASB have not yet been
entered in the Registration Book at the time when the alterations were effected, hence, the same could
still be made subject of appropriate amendments; (iv) that the CCTs in issue named in favor of ASB were
mere drafts and cannot legally be considered documents within the strict definition of the law; (v) that
court order authorizing to amend a title is necessary only if the deed or document sought to be registered
has already been entered in the registration book; and (vi) that MICO is the duly registered owner of the
land on which Malayan Tower stands and ASB was merely referred to as the developer.16
Thereafter, the Ombudsman issued the assailed Resolution in G.R. No. 192685 dismissing Ampil’s complaint.
For the Ombudsman, the resolution of whether respondents falsified the CCTs must be prefaced by a
determination of who, between MICO and ASB, is the rightful owner of the subject units. The Ombudsman
held that it had no authority to interpret the provisions of the MOA and, thus, refrained from resolving the
preliminary question of ownership. Given the foregoing, the Ombudsman was hard pressed to make a
categorical finding that the CCTs were altered to speak something false. In short, the Ombudsman did not
have probable cause to indict respondents for falsification of the CCTs because the last element of the
crime, i.e., that the change made the document speak something false, had not been established.
Significantly, the Ombudsman did not dispose of whether probable cause exists to indict respondents for
violation of Sections 3(a) and (e) of Republic Act No. 3019.
Ampil filed a Motion for Reconsideration. However, in yet another setback, the Ombudsman denied
Ampil’s motion and affirmed the dismissal of his complaint.
On the administrative litigation front and as previously narrated, the Ombudsman found Espenesin liable
for Simple Misconduct. However, on motion for reconsideration of Ampil praying for a finding of guilt
against Espenesin for Grave Misconduct and Dishonesty, the Ombudsman reconsidered its earlier
resolution and recalled the one-month suspension meted on Espenesin.
Thereafter, Ampil filed a petition for review under Rule 43 of the Rules of Court before the appellate court.
And as already stated, the appellate court affirmed the Ombudsman’s resolution absolving Espenesin of
not just Grave Misconduct and Dishonesty, but also of Simple Misconduct.
Hence, this dual recourse by Ampil: first, alleging grave abuse of discretion in the Ombudsman’s failure to
find probable cause to indict respondents for Falsification of Public Documents under Article 171(6) of the
Revised Penal Code, and for their commission of corrupt practices under
Sections 3(a) and (e) of Republic Act No. 3019; and second, raising grievous error of the Court of Appeals
in affirming the Ombudsman’s absolution of Espenesin from administrative liability.
To obviate confusion, we shall dispose of the first issue, i.e., whether probable cause exists to indict
respondents for Falsification of Public Documents under Article 171(6) of the Revised Penal Code and for
their commission of corrupt practices under Sections 3(a) and (e) of Republic Act No. 3019.
Despite the Ombudsman’s categorical dismissal of his complaint, Ampil is adamant on the existence of
probable cause to bring respondents to trial for falsification of the CCTs, and for violation of Sections 3(a)
and (e) of Republic Act No. 3019. In fact, he argues that Espenesin has been held administratively liable by
the Ombudsman for altering the CCTs. At the time of the filing of G.R. No. 192685, the Ombudsman had
not yet reversed its previous resolution finding Espenesin liable for simple misconduct. He insists that the
admission by respondents Espenesin and Serrano that they altered the CCTs should foreclose all questions
on all respondents’ (Espenesin’s, Serrano’s, Yuchengco’s and Cheng’s) liability for falsification and their
commission of corrupt practices, under the Revised Penal Code and Republic Act No. 3019, respectively.
In all, Ampil maintains that the Ombudsman’s absolution of respondents is tainted with grave abuse of
discretion.
G.R. No. 192685 is partially impressed with merit. Accordingly, we find grave abuse of discretion in the
Ombudsman’s incomplete disposition of Ampil’s complaint.
That the Ombudsman is a constitutional officer duty bound to "investigate on its own, or on complaint by
any person, any act or omission of any public official, employee, office or agency, when such act or
omission appears to be illegal, unjust, improper, or inefficient"17 brooks no objection. The Ombudsman’s
conduct of preliminary investigation is both power and duty. Thus, the Ombudsman and his Deputies, are
constitutionalized as protectors of the people, who "shall act promptly on complaints filed in any form or
manner against public officials or employees of the government x x x, and shall, x x x notify the
complainants of the action taken and the result thereof."18
The raison d'être for its creation and endowment of broad investigative authority is to insulate the Office of
the Ombudsman from the long tentacles of officialdom that are able to penetrate judges’ and fiscals’
offices, and others involved in the prosecution of erring public officials, and through the execution of
official pressure and influence, quash, delay, or dismiss investigations into malfeasances and misfeasances
committed by public officers.19
Plainly, the Ombudsman has "full discretion," based on the attendant facts and circumstances, to
determine the existence of probable cause or the lack thereof.20 On this score, we have consistently
hewed to the policy of non-interference with the Ombudsman’s exercise of its constitutionally mandated
powers.21 The Ombudsman’s finding to proceed or desist in the prosecution of a criminal case can only be
assailed through certiorari proceedings before this Court on the ground that such determination is tainted
with grave abuse of discretion which contemplates an abuse so grave and so patent equivalent to lack or
excess of jurisdiction.22
However, on several occasions, we have interfered with the Ombudsman’s discretion in determining
probable cause:
12
 (a) To afford protection to the constitutional rights of the accused;
(b) When necessary for the orderly administration of justice or to avoid oppression or multiplicity of
actions;
(c) When there is a prejudicial question which is sub judice;
(d) When the acts of the officer are without or in excess of authority;
(e) Where the prosecution is under an invalid law, ordinance or regulation;
(f) When double jeopardy is clearly apparent;
(g) Where the court has no jurisdiction over the offense;
(h) Where it is a case of persecution rather than prosecution;
(i) Where the charges are manifestly false and motivated by the lust for vengeance.23 (Emphasis
supplied).
The fourth circumstance is present in G.R. No. 192685.
While we agree with the Ombudsman’s disquisition that there is no probable cause to indict respondents
for Falsification of Public Documents under Article 171(6) of the Revised Penal Code, we are puzzled why
the Ombudsman completely glossed over Ampil’s charge that respondents committed prohibited acts
listed in Sections 3(a) and (e) of Republic Act No. 3019. Nowhere in the Resolution or in the Order denying
reconsideration thereof did the Ombudsman tackle and resolve the issue of whether respondents violated
the particular provisions of Republic Act No. 3019.
Curiously, the Ombudsman docketed Ampil’s complaint-affidavit as one "for: Falsification of Public
Documents and Violation of Sections 3(a) and (e) of Republic Act No. 3019, as amended." 24 The
Ombudsman even prefaced the Resolution, thus: "this has reference to the complaint filed by Oscar Ampil
on 17 September 2007 against respondents, for Falsification of Public Documents and Violation of Sections
3, paragraphs (a) and (e) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, as amended."25
The Ombudsman’s silence on the component anti-graft charges is pointed up by the specific allegations in
Ampil’s complaint-affidavit that:
18. The acts of ATTY. ESPENESIN and his co-conspirators are clear violations of Section 3 paragraph (a)
and/or (e) of Republic Act No. 3019 otherwise known as the Anti-Graft and Corrupt Practices Act x x x;
xxxx
19. On the basis of the evidence x x x and the admissions of the conspirators themselves, ATTY. ESPENESIN is
liable under both pars. (a) and (e) thereof or either of the two. By maliciously and feloniously altering the
subject CCT’s (sic), contrary to law and to the prejudice of ASB and Ampil, ATTY. ESPENESIN committed an
offense in connection with his official duties and he admitted having done so in conspiracy with his co-
respondents. x x x ATTY. ESPENESIN allowed himself to be persuaded, induced or influenced into
committing such violation or offense which is the substance of par. (a) of RA 3019;
20. In committing such unauthorized and unlawful alterations on the subject CCT’s (sic), ATTY. ESPENESIN
caused undue injury to ASB and to AMPIL as an unsecured creditor, who is ultimately one of the
beneficiaries of said CCT from the ASSET POOL created by the SEC, and gave MICO unwarranted benefits,
advantage or preference in the discharge of his official duties as Register of Deeds of Pasig City. Such acts
were admitted by ATTY. ESPENESIN in his letter to ASB x x x. Such acts, taken together with his admission,
indubitably show ATTY. ESPENESIN’s manifest partiality, evident bad faith and/or, at the least, his gross
inexcusable negligence in doing the same;
21. ATTY. ESPENESIN is liable under Section 3 pars. (a) and/or (e) of RA 3019, as well as under Article 171 par.
6 of the RPC. ATTY. SERRANO, YVONNE S. YUCHENGCO and (sic) GEMMA O. CHENG are also liable for
violation of the said provisions of law in conspiracy with ATTY. ESPENESIN, the latter as a principal via direct
participation, ATTY. SERRANO, as principal by inducement and YUCHENGCO and CHENG, also by
inducement, who being responsible officers of MICO ultimately benefited from said unlawful act.26 and the
pith of the Resolution which carefully and meticulously dissected the presence of the first three definitive
elements of the crime of falsification under Article 171(6) of the Revised Penal Code:
The first three definitive elements of the crime, albeit present, are defeated by the absence of the fourth.
The respondents readily admitted that an alteration was indeed made on the CCTs in issue allegedly for
the purpose of correcting a mistake in the name of the registered owner of the condominium units
involved. Said alteration had obviously changed the tenor of the CCTs considering that ASB, the initially
named owner, was changed into MICO. The first and third elements are undeniably present.
Anent the second element, the respondents argued that the CCTs in issue were mere drafts and are not
legally considered "genuine documents" within the strict definition of the law. Albeit the contention is
partially true, no proof has been shown to prove that the CCTs issued in favor of ASB were mere drafts.
The CCTs of ASB are obviously complete. If we are to compare it with the appearance and contents of the
CCTs issued in favor of MICO, one will notice no definitive difference between the two except that one set
was named in favor of ASB and the other set, in favor of MICO. Nothing is shown that will clearly prove that
the former were mere drafts and the latter are the final copies. As far as the appearance of the CCTs of
ASB is concerned, all appear to be complete and genuine. Proof to the contrary must be shown to prove
otherwise.
Delivery of the titles to the named owners is not a pre-requisite before all these CCTs can be legally
categorized as genuine documents. The fact that the same had already been signed by respondent
Espenesin in his capacity as Registrar of Deeds of Pasig City and the notations imprinted thereon
appeared to have been entered on March 11, 2005 at 11:55 a.m. at the Registry Books of Pasig City, the
CCTs in issue are bound to be treated as genuine documents drafted and signed in the regular
performance of duties of the officer whose signature appears thereon.27
On the whole, the Ombudsman’s discussion was straightforward and categorical, and ultimately
established that Espenesin, at the urging of Serrano, altered the CCTs issued in ASB’s name resulting in
these CCTs ostensibly declaring MICO as registered owner of the subject units at The Malayan Tower.
Despite the admission by Espenesin that he had altered the CCTs and the Ombudsman’s findings thereon,
the Ombudsman abruptly dismissed Ampil’s complaint-affidavit, resolving only one of the charges
contained therein with nary a link regarding the other charge of violation of Sections 3(a) and (e) of
Republic Act No. 3019. Indeed, as found by the Ombudsman, the 4th element of the crime of Falsification
of Public Documents is lacking, as the actual ownership of the subject units at The Malayan Tower has yet
to be resolved. Nonetheless, this circumstance does not detract from, much less diminish, Ampil’s charge,
and the evidence pointing to the possible commission, of offenses under Sections 3(a) and (e) of the Anti-
Graft and Corrupt Practices Act.
Sections 3(a) and (e) of Republic Act No. 3019 reads:
Section 3. Corrupt practices of public officers. – In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:
(a) Persuading, inducing or influencing another public officer to perform an act constituting a violation of
rules and regulations duly promulgated by competent authority or an offense in connection with the
official duties of the latter, or allowing himself to be persuaded, induced, or influenced to commit such
violation or offense.
xxxx
(e) Causing any undue injury to any party, including the Government, or giving any private party any
unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall
apply to officers and employees of offices or government corporations charged with the grant of licenses
or permits or other concessions.
The elements of Section 3(a) of Republic Act No. 3019 are:
(1) the offender is a public officer;
(2) the offender persuades, induces, or influences another public officer to perform an act or the
offender allows himself to be persuaded, induced, or influenced to commit an act;
(3) the act performed by the other public officer or committed by the offender constitutes a
violation of rules and regulations duly promulgated by competent authority or an offense in
connection with the official duty of the latter. (Emphasis supplied).
Whereas, paragraph (e) of the same section lists the following elements:
(1) the offender is a public officer;
13
 (2) the act was done in the discharge of the public officer’s official, administrative or judicial
functions;
(3) the act was done through manifest partiality, evident bad faith, or gross inexcusable
negligence; and
(4) the public officer caused any undue injury to any party, including the Government, or gave
any unwarranted benefits, advantage or preference.28
As Registrar of the Registry of Deeds of Pasig City, Espenesin is tasked, among others, to review deeds and
other documents for conformance with the legal requirements of registration.29 Section 10 of Presidential
Decree No. 1529, Amending and Codifying the Laws Relative to Registration of Property and for Other
Purposes provides:
Section 10. General functions of Registers of Deeds. – The office of the Register of Deeds constitutes a
public repository of records of instruments affecting registered or unregistered lands and chattel
mortgages in the province or city wherein such office is situated.
It shall be the duty of the Register of Deeds to immediately register an instrument presented for registration
dealing with real or personal property which complies with all the requisites for registration. He shall see to it
that said instrument bears the proper documentary and science stamps and that the same are properly
cancelled. If the instrument is not registerable, he shall forthwith deny registration thereof and inform the
presentor of such denial in writing, stating the ground or reason therefore, and advising him of his right to
appeal by consulta in accordance with Section 117 of the Decree.
Most importantly, a Registrar of the Registry of Deeds is charged with knowledge of Presidential Decree No.
1529, specifically Sections 5730 and 108.31
In the instant case, the elements of the offenses under Sections 3(a) and (e) of Republic Act No. 3019,
juxtaposed against the functions of a Registrar of the Registry of Deeds establish a prima facie graft case
against Espenesin and Serrano only. Under Section 3(a) of Republic Act No. 3019, there is a prima facie
case that Espenesin, at the urging of Serrano, allowed himself to be persuaded to alter the CCTs originally
issued in ASB’s name, against the procedure provided by law for the issuance of CCTs and registration of
property. In addition, under Section 3(e) of the same law, there is likewise a prima facie case that
Espenesin, through gross inexcusable negligence, by simply relying on the fact that all throughout the
transaction to register the subject units at The Malayan Tower he liaised with Serrano, gave MICO an
unwarranted benefit, advantage or preference in the registration of the subject units.
In Sison v. People of the Philippines, we expounded on Section 3(e) of Republic Act No. 3019:
The third element of Section 3 (e) of RA 3019 may be committed in three ways, i.e., through manifest
partiality, evident bad faith or gross inexcusable negligence. Proof of any of these three in connection with
the prohibited acts mentioned in Section 3(e) of RA 3019 is enough to convict.
Explaining what "partiality," "bad faith" and "gross negligence" mean, we held:
"Partiality" is synonymous with "bias" which "excites a disposition to see and report matters as they are
wished for rather than as they are." "Bad faith does not simply connote bad judgment or negligence; it
imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn
duty through some motive or intent or ill will; it partakes of the nature of fraud." "Gross negligence has been
so defined as negligence characterized by the want of even slight care, acting or omitting to act in a
situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious
indifference to consequences in so far as other persons may be affected. It is the omission of that care
which even inattentive and thoughtless men never fail to take on their own property."
In the instant case, petitioner was grossly negligent in all the purchases that were made under his watch.
Petitioner’s admission that the canvass sheets sent out by de Jesus to the suppliers already contained his
signatures because he pre-signed these forms only proved his utter disregard of the consequences of his
actions. Petitioner also admitted that he knew the provisions of RA 7160 on personal canvass but he did
not follow the law because he was merely following the practice of his predecessors. This was an admission
of a mindless disregard for the law in a tradition of illegality. This is totally unacceptable, considering that as
municipal mayor, petitioner ought to implement the law to the letter. As local chief executive, he should
have been the first to follow the law and see to it that it was followed by his constituency. Sadly, however,
he was the first to break it.
Petitioner should have complied with the requirements laid down by RA 7160 on personal canvass, no
matter how strict they may have been. Dura lex sed lex. The law is difficult but it is the law. These
requirements are not empty words but were specifically crafted to ensure transparency in the acquisition
of government supplies, especially since no public bidding is involved in personal canvass. Truly, the
requirement that the canvass and awarding of supplies be made by a collegial body assures the general
public that despotic, irregular or unlawful transactions do not occur. It also guarantees that no personal
preference is given to any supplier and that the government is given the best possible price for its
procurements.
The fourth element is likewise present. While it is true that the prosecution was not able to prove any undue
injury to the government as a result of the purchases, it should be noted that there are two ways by which
Section 3(e) of RA 3019 may be violated—the first, by causing undue injury to any party, including the
government, or the second, by giving any private party any unwarranted benefit, advantage or
preference. Although neither mode constitutes a distinct offense, an accused may be charged under
either mode or both. The use of the disjunctive "or’ connotes that the two modes need not be present at
the same time. In other words, the presence of one would suffice for conviction.
Aside from the allegation of undue injury to the government, petitioner was also charged with having
given unwarranted benefit, advantage or preference to private suppliers. Under the second mode,
damage is not required.
The word "unwarranted" means lacking adequate or official support; unjustified; unauthorized or without
justification or adequate reason. "Advantage" means a more favorable or improved position or condition;
benefit, profit or gain of any kind; benefit from some course of action. "Preference" signifies priority or
higher evaluation or desirability; choice or estimation above another.
In order to be found guilty under the second mode, it suffices that the accused has given unjustified favor
or benefit to another, in the exercise of his official, administrative or judicial functions. Petitioner did just
that. The fact that he repeatedly failed to follow the requirements of RA 7160 on personal canvass proves
that unwarranted benefit, advantage or preference was given to the winning suppliers. These suppliers
were awarded the procurement contract without the benefit of a fair system in determining the best
possible price for the government. The private suppliers, which were all personally chosen by respondent,
were able to profit from the transactions without showing proof that their prices were the most beneficial
to the government. For that, petitioner must now face the consequences of his acts.32 (Emphasis supplied).
We stress that the Ombudsman did not find probable cause to indict respondents for falsification simply
because the Ombudsman could not categorically declare that the alteration made the CCT speak falsely
as the ownership of the subject units at The Malayan Tower had yet to be determined. However, its initial
factual findings on the administrative complaint categorically declared, thus:
x x x Espenesin justified his action by asseverating that since the CCTs were still under the possession and
control of the Register of Deeds and have not yet been distributed to the owners, amendments can still be
made thereon.
It is worthy to note that the CCTs of ASB, at the time when the amendment was made, were obviously
complete. From its face, we can infer that all have attained the character of a binding public document.
The signature of Espenesin is already affixed thereon, and on its face, it was explicitly declared that the
titles have already been entered in the Registration Book of the Register of Deeds of Pasig City on March
11, 2005 at 11:55 a.m. Allegations to the contrary must be convincingly and positively proven, otherwise,
the presumption holds that the CCTs issued in the name of ASB were regular and the contents thereon
binding.
Stated in a different light, delivery of the titles to the named owners is not a pre-requisite before all these
CCTs can be legally categorized as genuine documents. The fact that the same had already been signed
by x x x Espenesin in his capacity as Register of Deeds of Pasig City and the notations imprinted thereon
appeared to have been entered on March 11, 2005 at 11:55 a.m. at the Registry Books of Pasig City, the
CCTs in issue are bound to be treated as genuine documents drafted and signed in the regular
performance of duties of the officer whose signature appears thereon. The law has made it so clear that it
is the entry of the title in the Registration Book that controls the discretion of the Register of Deeds to effect
the necessary amendments and not the actual delivery of the titles to the named owners.
14
This being the case, strict compliance with the mandates of Section 108 of P.D. 1529 is strictly called for.
The provision is clear that upon entry of a certificate of title (which definitely includes Condominium
Certificate of Title) attested to by the Register of Deeds, no amendment shall be effected thereon except
upon lawful order of the court.
In the instant case, it became obvious that after the CCTs of ASB were entered in the Registration Book on
March 11, 2005 at exactly 11:55 a.m., the notations thereon were thereafter amended by Espenesin when
Atty. Serrano purportedly informed him of the alleged error inscribed therein. The proper remedy that
should have been undertaken by Espenesin soon after he was informed of the error is to either initiate the
appropriate petition himself or to suggest to the parties to the MOA to file said petition in court for the
amendment of the CCTs. An amendment by way of a shortcut is not allowed after entry of the title in the
Registration Book.
xxxx
If the Regional Trial Court sitting as a land registration court is not legally authorized to determine the
respective rights of the parties to the MOA when deciding on the petition for amendment and
cancellation of title, all the more with the Registrar of Deeds who is legally not empowered to make such
determination and to cause an automatic amendment of entries in the Registration Book on the basis of
his unauthorized determination.
Espenesin’s liability is grounded on the untimely and unauthorized amendment of the CCTs in issue. This is
regardless of whether the amendment had made the CCTs speak of either a lie or the truth. What defines
his error is his inability to comply with the proper procedure set by law.33 (Emphasis supplied).
We likewise stress that the determination of probable cause does not require certainty of guilt for a crime.
As the term itself implies, probable cause is concerned merely with probability and not absolute or even
moral certainty;34 it is merely based on opinion and reasonable belief.35 It is sufficient that based on the
preliminary investigation conducted, it is believed that the act or omission complained of constitutes the
offense charged. Well-settled in jurisprudence, as in Raro v. Sandiganbayan,36 that:
x x x Probable cause has been defined as the existence of such facts and circumstances as would excite
the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the
person charged was guilty of the crime for which he was prosecuted.37
Probable cause is a reasonable ground for presuming that a matter is or may be well-founded on such
state of facts in the prosecutor's mind as would lead a person of ordinary caution and prudence to believe
— or entertain an honest or strong suspicion — that it is so.38
A finding of probable cause needs only to rest on evidence showing that more likely than not a crime has
been committed and there is enough reason to believe that it was committed by the accused. It need not
be based on clear and convincing evidence of guilt, neither on evidence establishing absolute certainty
of guilt.39
A finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure
a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense
charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the
charge.40
A finding of probable cause merely binds over the suspect to stand trial. It is not a pronouncement of guilt.
The term does not mean "actual and positive cause" nor does it import absolute certainty. It is merely
based on opinion and reasonable belief. x x x Probable cause does not require an inquiry into whether
there is sufficient evidence to procure a conviction.41 (Emphasis and italics supplied).
In this instance, Espenesin explains and categorically admits that he altered, nay corrected, 38 certificates
of title which we again reproduce for easy reference:
Sometime ago Serrano requested that condominium titles over specified units be issued in consonance
with the sharing in the joint venture MOA. Titles were correspondingly issued as per request, some in the
name of MICO and some in the name of ASB. Before its release to the parties, Atty. Serrano came back
and requested that some titles issued in the name of ASB be changed to MICO because allegedly there
was error in the issuance.
Believing it was a simple error and on representation of the person we came to know and considered the
representative of both parties, we erased the name ASB Realty Corporation on those specified titles and
placed instead the name Malayan Insurance Company.
To our mind, the purpose was not to transfer ownership but merely to rectify an error committed in the
issuance of titles. And since they were well within our capacity to do, the titles not having been released
yet to its owner, we did what we believed was a simple act of rectifying a simple mistake.42
The letter of Espenesin itself underscores the existence of a prima facie case of gross negligence:
1. Serrano transacted the registration of the units in The Malayan Tower with the Office of the
Register of Deeds, Pasig City;
2. Serrano had previously presented a joint venture agreement, the MOA, which Espenesin
followed in the initial preparation and issuance of the titles;
3. Before some CCTs initially issued in ASB’s name were released, Serrano returned and requested
that some titles issued in the name of ASB be changed to MICO because those titles were
supposedly erroneously registered to ASB; and
4. Just on Serrano’s utterance and declaration which Espenesin readily believed because he
considered Serrano the representative of both parties, and without any other documentation to
base the amendment on, Espenesin erased the name of ASB on those specified titles and
replaced it with the name of MICO.
Espenesin, a Registrar of Deeds, relied on Serrano’s word alone that a supposed error has been
committed. Even if ownership of the units covered by the amended CCTs has not been categorically
declared as ASB’s given the ongoing dispute between the parties, the MOA which Espenesin had
previously referred to, allocates those units to ASB:
Section 4. Distribution and Disposition of Units. (a) As a return of its capital investment in the Project, each
party shall be entitled to such portion of all the net saleable area of the Building that their respective
contributions to the Project bear to the actual construction cost. As of the date of the execution hereof,
and on the basis of the total costs incurred to date in relation to the Remaining Construction Costs (as
defined in Section 9(a) hereof), the parties shall respectively be entitled to the following (which entitlement
shall be conditioned on, and subject to, adjustments as provided in sub-paragraph (b) of Section 4 in the
event that the actual remaining cost of construction exceeds the Remaining Construction Cost):
(i) MICO – the net saleable area particularly described in Schedule 2 hereof.
(ii) ASB – the following net saleable area:
(A) the net saleable area which ASB had pre-sold for an aggregate purchase price of
₱640,085,267.30 as set forth in Schedule 1 (including all paid and unpaid proceeds of said pre-
sales);
(B) the net saleable area particularly described in Schedule 3 hereof which shall be delivered to
ASB upon completion of the Project; and,
(C) provided that the actual remaining construction costs do not exceed the Remaining
Construction Cost, the net saleable area particularly described in Schedule 4 hereof which shall
be delivered to ASB upon completion of the Project and determination of its actual construction
costs. If the actual remaining construction costs exceed the Remaining Construction Cost, sub-
paragraph (b) of this Section 4 shall apply.43
The MOA even recognizes and specifies that:
E. ASB has pre-sold a number of condominium units in the Project to certain buyers as set forth in Schedule
1 hereof, and in order to protect the interests of these buyers and preserve the interest in the Project, the
goodwill and business reputation of Malayan, Malayan has proposed to complete the Project, and ASB
has accepted such proposal, subject to the terms and conditions contained herein, including the
contribution to the Project (a) by Malayan of the Lot and (b) by ASB of its interest as buyer under the
Contract to Sell.
xxxx
Section 3. Recognition of ASB’s Investment. The parties confirm that as of the date hereof, ASB invested in
the Project an amount equivalent to its entitlement to the net saleable area of the Building under Section 4
below, including ASB’s interest as buyer under the Contract to Sell.44
15
One fact deserves emphasis. The ownership of the condominium units remains in dispute and, by
necessary inference, does not lie as well in MICO. By his baseless reliance on Serrano’s word and
representation, Espenesin allowed MICO to gain an unwarranted advantage and benefit in the titling of
the 38 units in The Malayan Tower.
That a prima facie case for gross negligence amounting to violation of Sections 3(a) and (e) of Republic
Act No. 3019 exists is amply supported by the fact that Espenesin disregarded the well-established practice
necessitating submission of required documents for registration of property in the Philippines:
Documents Required for Registration of Real Property with the Register of Deeds:
1. Common Requirements
o Original copy of the Deed or Instrument (Original Copy + 2 duplicate copies)If the
original copy cannot be produced, the duplicate original or certified true copy shall be
presented accompanied with a sworn affidavit executed by the interested party why
the original copy cannot be presented.
o Owner’s copy of the Certificate of Title or Co-owner’s copy if one has been issued.
(Original Copy + 2 duplicate copies)
o Latest Tax Declaration if the property is an unregistered land. (Original Copy + 2
duplicate copies)
2. Specific Requirements
1. Deed of Sale/Transfer
xxxx
For Corporation
1. Secretary’s Certificate or Board Resolution to Sell or Purchase (Original Copy
+ Duplicate Copy)
2. Articles of Incorporation (for transferee corporation) (1 Certified Copy of the
Original)
3. Certificate of the Securities and Exchange Commission (SEC) that the
Articles of Incorporation had been registered . (1 Certified Copy of the
Original)
4. For Condominium or Condominium Certificate of Transfer,
affidavit/certificate of the Condominium Corporation that the sale/transfer
does not violate the 60-40 rule.(Original Copy + 1 Duplicate Copy)
5. Subsequent transfer of CCT requires Certificate of the Condominium
Management. (Original Copy)
6. Sale by a Corporation Sole, court order is required.(Original copy of the
Court Order)
Additional Requirements
xxxx
11. Condominium Projects
Master Deed (Original Copy + 1 Duplicate Copy)
Declaration of Restriction (Original Copy + 1 Duplicate Copy)
Diagrammatic Floor Plan (Original Copy + 1 Duplicate Copy)
If the Condominium Certificate of Title is issued for the first time in the name of the
registered owner, require the following:
o Certificate of Registration with the Housing and Land Use Regulatory Board
(Original Copy + 1 Duplicate Copy)
o Development Permit (Original Copy + 1 Duplicate Copy)
o License to Sell (Original Copy + 1 Duplicate Copy)45
Espenesin, by his own explanation, relied on nothing more than Serrano, who he "came to know and
considered as representative of both parties," and Serrano’s interpretation of the MOA that Serrano had
brought with him.
On the whole, there is sufficient ground to engender a well-founded belief that respondents Espenesin and
Serrano committed prohibited acts listed in Sections 3(a) and (e) of Republic Act No. 3019.
As regards Yuchengco and Cheng, apart from Ampil’s general assertions that the two, as officers of MICO,
benefited from the alteration of the CCTs, there is a dearth of evidence pointing to their collective
responsibility therefor. While the fact of alteration was admitted by respondents and was affirmed in the
Ombudsman’s finding of fact, there is nothing that directly links Yuchengco and Cheng to the act.
We are aware that the calibration of evidence to assess whether a prima facie graft case exists against
respondents is a question of fact. We have consistently held that the Supreme Court is not a trier of facts,
more so in the consideration of the extraordinary writ of certiorari where neither questions of fact nor law
are entertained, but only questions of lack or excess of jurisdiction or grave abuse of discretion. 46 In this
case, however, certiorari will lie, given that the Ombudsman made no finding at all on respondents
possible liability for violation of Sections 3(a) and (e) of Republic Act No. 3019.
We hasten to reiterate that we are only dealing herein with the preliminary investigation aspect of this
case. We do not adjudge respondents’ guilt or the lack thereof. The assertions of Espenesin and Serrano on
the former’s good faith in effecting the alteration and the pending arbitration case before the
Construction Industry Arbitration Commission involving the correct division of MICO’s and ASB’s net
saleable areas in The Malayan Tower are matters of defense which they should raise during trial of the
criminal case.
As regards the administrative liability of Espenesin, the basic principle in the law of public officers is the
three-fold liability rule, which states that the wrongful acts or omissions of a public officer, Espenesin in
these cases, may give rise to civil, criminal and administrative liability. An action for each can proceed
independently of the others.47
On this point, we find that the appellate court erred when it affirmed the Ombudsman’s last ruling that
Espenesin is not administratively liable.
Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by a public officer.48
In Grave Misconduct, as distinguished from Simple Misconduct, the elements of corruption, clear intent to
violate the law or flagrant disregard of established rules, must be manifest49 and established by substantial
evidence. Grave Misconduct necessarily includes the lesser offense of Simple Misconduct.50 Thus, a person
charged with Grave Misconduct may be held liable for Simple Misconduct if the misconduct does not
involve any of the elements to qualify the misconduct as grave.51
In (G.R. No. 199115), the elements particular to Grave Misconduct are, by the Ombudsman’s own finding,
present. Corruption, as an element of Grave Misconduct, consists in the act of an official or fiduciary
person who unlawfully and wrongfully uses his station or character to procure some benefit for himself or
for another person, contrary to duty and the rights of others.52 This has already been demonstrated as
discussed above. And, there is here a manifest disregard for established rules on land registration by a
Register of Deeds himself. As he himself admits in his letter, Espenesin erased the name of ASB on the
specified CCTs because he believed that Serrano’s request for the re-issuance thereof in MICO’s name
constituted simple error.
Section 108 of Presidential Decree No. 1529 provides:
Section 108. Amendment and alteration of certificates. No erasure, alteration, or amendment shall be
made upon the registration book after the entry of a certificate of title or of a memorandum thereon and
the attestation of the same be Register of Deeds, except by order of the proper Court of First Instance. A
registered owner of other person having an interest in registered property, or, in proper cases, the Register
of Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court
upon the ground that the registered interests of any description, whether vested, contingent, expectant or
inchoate appearing on the certificate, have terminated and ceased; or that new interest not appearing
upon the certificate have arisen or been created; or that an omission or error was made in entering a
certificate or any memorandum thereon, or, on any duplicate certificate; or that the same or any person
on the certificate has been changed; or that the registered owner has married, or, if registered as married,
that the marriage has been terminated and no right or interests of heirs or creditors will thereby be
affected; or that a corporation which owned registered land and has been dissolved has not convened
the same within three years after its dissolution; or upon any other reasonable ground; and the court may
hear and determine the petition after notice to all parties in interest, and may order the entry or
16
cancellation of a new certificate, the entry or cancellation of a memorandum upon a certificate, or grant
any other relief upon such terms and conditions, requiring security or bond if necessary, as it may consider
proper; Provided, however, That this section shall not be construed to give the court authority to reopen
the judgment or decree of registration, and that nothing shall be done or ordered by the court which shall
impair the title or other interest of a purchaser holding a certificate for value and in good faith, or his heirs
and assigns, without his or their written consent. Where the owner's duplicate certificate is not presented, a
similar petition may be filed as provided in the preceding section.
The foregoing clearly speaks of a court order prior to any erasure, alteration or amendment upon a
certificate of title.
In reversing its prior ruling, the Ombudsman cavalierly dismisses the fact of Espenesin already signing the
CCTs issued in ASB’s name as "only a part of the issuance process because the final step in the titling
procedure is indeed the release of the certificate of title."53 The Ombudsman further ruled:
Considering that prior to the release of titles, Espenesin merely rectified what was represented to this office
as error in the preparation of typing or the certificates, hence, it is wrong to subject him to an
administrative sanction. This is bolstered by the fact that, at the time of release (and perhaps even up to
the present time), there was no final determination yet from the land registration court as to who has a
better right to the property in question.54(Emphasis supplied).
This statement of the Ombudsman is virtually a declaration of Espenesin’s misconduct. It highlights
Espenesin’s awareness and knowledge that ASB and MICO are two different and separate entities, albeit
having entered into a joint venture for the building of "The Malayan Tower."
As Registrar of Deeds, Espenesin was duty bound to inquire and ascertain the reason for Serrano’s new
instruction on those specific set of CCTs and not just heed Serrano’s bidding. He heads the Office of
Register of Deeds which is constituted by law as "a public repository of records of instruments affecting
registered or unregistered lands x x x in the province or city wherein such office is situated." He should not
have so easily taken Serrano’s word that the amendment Serrano sought was to correct simple and
innocuous error. Espenesin could have then easily asked, as he is obliged to, for a contract or an
authenticated writing to ascertain which units and parking slots were really allotted for ASB and MICO. His
actions would then be based on what is documented and not merely by a lame claim of bona fides
mistake.
Moreover, Espenesin was previously presented a MOA, and consulted this same MOA, in the initial
preparation and issuance of the 38 CCTs in ASB’s name. Certainly, a Registrar of Deeds who is required by
law to be a member of the legal profession,55 possesses common sense and prudence to ask for
documents on which to base his corrections. Reliance on the mere word of even the point person for the
transaction, smacks of gross negligence when all transactions with the Office of the Register of Deeds,
involving as it does registration of property, ought to be properly recorded and documented.
That the Office of the Register of Deeds requires documentation in the registration of property, whether as
an original or a subsequent registration, brooks no argument. Again, and it cannot be overlooked that,
Espenesin initially referred to a MOA albeit Serrano worked on the registration transaction for both ASB and
MICO. Subsequently, Serrano returns, bearing ostensible authority to transact even for ASB, and Espenesin
fails to ask for documentation for the correction Serrano sought to be made, and simply relies on Serrano’s
word.
We are baffled by the Registrar of Deeds’ failure to require documentation which would serve as his basis
for the correction. The amendment sought by Serrano was not a mere clerical change of registered name;
it was a substantial one, changing ownership of 38 units in The Malayan Tower from one entity, ASB, to
another, MICO. Even just at Serrano’s initial request for correction of the CCTs, a red flag should have gone
up for a Registrar of Deeds.1âwphi1
Espenesin splits hairs when he claims that it is "in the Registration Book where the prohibition to erase, alter,
or amend, without court order, applies." We disagree with Espenesin. Chapter IV on Certificate of Title of
Presidential Decree No. 1529,56 specifically Sections 40, 42 and 43 belie the claim of Espenesin:
Section 40. Entry of Original Certificate of Title. Upon receipt by the Register of Deeds of the original and
duplicate copies of the original certificate of title the same shall be entered in his record book and shall be
numbered, dated, signed and sealed by the Register of Deeds with the seal of his office. Said certificate of
title shall take effect upon the date of entry thereof. The Register of Deeds shall forthwith send notice by
mail to the registered owner that his owner's duplicate is ready for delivery to him upon payment of legal
fees.
Section 42. Registration Books. The original copy of the original certificate of title shall be filed in the Registry
of Deeds. The same shall be bound in consecutive order together with similar certificates of title and shall
constitute the registration book for titled properties.
Section 43. Transfer Certificate of Title. The subsequent certificate of title that may be issued by the Register
of Deeds pursuant to any voluntary or involuntary instrument relating to the same land shall be in like form,
entitled "Transfer Certificate of Title", and likewise issued in duplicate. The certificate shall show the number
of the next previous certificate covering the same land and also the fact that it was originally registered,
giving the record number, the number of the original certificate of title, and the volume and page of the
registration book in which the latter is found.
Recording or entry of the titles, whether an original or a subsequent transfer certificate of title in the record,
is simultaneous with the signing by the Register of Deeds. The signature on the certificate by the Registrar of
Deeds is accompanied by the dating, numbering and sealing of the certificate. All these are part of a
single registration process. Where there has been a completed entry in the Record Book, as in this case
where the Ombudsman found that "the signature of Espenesin is already affixed on the CCTs, and on its
face, it was explicitly declared that the titles have already been entered in the Registration Book of the
Register of Deeds of Pasig City on March 11, 2005 at 11:55 a.m.," the Register of Deeds can no longer
tamper with entries, specially the very name of the titleholder. The law says that the certificate of title shall
take effect upon the date of entry thereof.
To further drive home the point, as Registrar of Deeds, Espenesin knew full well that "there is no final
determination yet from the land registration court as to who has a better right to the property in question."
Espenesin’s attempt to minimize the significance of a Registrar of Deed’s signature on a CCT only
aggravates the lack of prudence in his action. The change in the titleholder in the CCTs from ASB to MICO
was an official documentation of a change of ownership. It definitely cannot be characterized as simple
error.
Grave misconduct, of which Espenesin has been charged, consists in a public officer’s deliberate violation
of a rule of law or standard of behavior. It is regarded as grave when the elements of corruption, clear
intent to violate the law, or flagrant disregard of established rules are present.57 In particular, corruption as
an element of grave misconduct consists in the official’s unlawful and wrongful use of his station or
character to procure some benefit for himself or for another person, contrary to duty and the rights of
others.58
In sum, the actions of Espenesin clearly demonstrate a disregard of well-known legal rules.59 The penalty for
Grave Misconduct is dismissalfrom service with the accessory penalties of forfeiture of retirement benefits,
cancellation of eligibility, and perpetual disqualification from reemployment in the government service,
including government-owned or controlled corporation.60
WHEREFORE, the petition in G.R. No. 192685 is PARTIALLY GRANTED. The Resolution of the Ombudsman
dated 30 April 2008 in OMB-C-C-07-0444-J is REVERSED and SET ASIDE. The Ombudsman is hereby directed
to file the necessary Information for violation of Sections 3(a) and (e) of Republic Act No. 3019 against
public respondent Policarpio L. Espenesin and private respondent Francis Serrano.
The petition in G.R. No. 199115 is GRANTED. The Decision of the Court of Appeals dated 28 September 2011
in CA-G.R. SP No. 113171 and the Order dated 13 July 2009 of the Ombudsman in OMB-C-A-07-0474-J are
REVERSED and SET ASIDE. Respondent Policarpio L. Espenesin is GUlLTY of Grave Misconduct and we, thus,
impose the penalty of DIMISSAL from service. However, due to his retirement from the service, we order
forfeiture of all his retirement pay and benefits.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:
17
ANTONIO T. CARPIO interests of heirs or creditors will thereby be affected; or that a corporation which owned
Associate Justice registered land and has been dissolved has not convened the same within three years
Chairperson after its dissolution; or upon any other reasonable ground; and the court may hear and
ARTURO D. BRION MARIANO C. DEL CASTILLO determine the petition after notice to all parties in interest, and may order the entry or
Associate Justice Associate Justice cancellation of a new certificate, the entry or cancellation of a memorandum upon a
certificate, or grant any other relief upon such terms and conditions, requiring security or
ESTELA M. PERLAS-BERNABE
bond if necessary, as it may consider proper; Provided, however, That this section shall
Associate Justice
not be construed to give the court authority to reopen the judgment or decree of
ATTESTATION
registration, and that nothing shall be done or ordered by the court which shall impair
I attest that the conclusions in the above Decision had been reached in consultation before the case was
the title or other interest of a purchaser holding a certificate for value and in good faith,
assigned to the writer of the opinion of the Court’s Division.
or his heirs and assigns, without his or their written consent. Where the owner's duplicate
ANTONIO T. CARPIO
certificate is not presented, a similar petition may be filed as provided in the preceding
Associate Justice
section.
Chairperson, Second Division
All petitions or motions filed under this Section as well as under any other provision of this
CERTIFICATION
Decree after original registration shall be filed and entitled in the original case in which
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that
the decree or registration was entered.
the conclusions in the above Decision had been reached in consultation before the case was assigned to 15 Rollo (G.R. No. 192685), pp. 56-65.
the writer of the opinion of the Court's Division. 16 Id. at 35-37.
MARIA LOURDES P. A. SERENO 17 Constitution, Art. XI, Sec. 13.
Chief Justice 18 Constitution, Art. XI, Sec. 12.
19 ABS-CBN Broadcasting Corporation v. Office of the Ombudsman, G.R. No. 133347, 15 October

2008, 569 SCRA 59, 75.

Footnotes 20 Vergara v. Ombudsman, G.R. No. 174567, 12 March 2009, 580 SCRA 693, 708; Presidential
1 Constitution, Art. XI, Secs. 12-13.
Commission on Good Government v. Desierto, 563 Phil. 517, 525-526 (2007).
2 Id.; The Ombudsman Act of 1989, Secs. 13 and 15. 21 ABS-CBN Broadcasting Corporation v. Office of the Ombudsman, supra note 19 at 75-76.
3 Rollo (G.R. No. 192685), pp. 31-41.
22 Baviera v. Zoleta, 535 Phil. 292, 314 (2006).
4 Id. at 50-55.
23 Vergara v. Ombudsman, supra note 20 at 709.
5 Metropolitan Bank and Trust Co. v. ASB Holdings, Inc., 545 Phil. 604, 610 (2007).
24 Rollo (G.R. No. 192685), p. 31.
6 Id. at 612.
25 Id. at 31-32.
7 Rollo (G.R. No. 192685), pp. 66-75.
26 Id. at 62-63.
8 3RD Recital, paragraph C of the MOA. Id. at 66.
27 Id. at 38-39.
9 Id. at 67-68.
28 Sison v. People, G.R. Nos. 170339 and 170398-403, 9 March 2010, 614 SCRA 670, 679.
10 Unit Nos.: 706, 902, 907, 911, 912, 914, 918, 1805, 1807, 1809, 1810, 1811, 1814, 1815, 1816, 1818,
29 Office of the Ombudsman (Mindanao) v. Cruzabra, G.R. No. 183507, 24 February 2010, 613
2204, 2207, 2208, 2209, 2210, 2211, 2212, 2214, 2215, 2217, 2302, 2303, 2304, 2306, 2309, 2311, 2312,
SCRA 549, 552.
2314, 2315, 2318, ₱5 and 2316. Id. at 34. 30 Section 57. Procedure in registration of conveyances. An owner desiring to convey his
11 Id. at 200-202.
12 Id. at 203. registered land in fee simple shall execute and register a deed of conveyance in a form sufficient
13 Id. at 204. in law. The Register of Deeds shall thereafter make out in the registration book a new certificate
14 Entitled, "Property Registration Decree." of title to the grantee and shall prepare and deliver to him an owner's duplicate certificate. The
Register of Deeds shall note upon the original and duplicate certificate the date of transfer, the
Section 108. Amendment and alteration of certificates. No erasure, alteration, or
volume and page of the registration book in which the new certificate is registered and a
amendment shall be made upon the registration book after the entry of a certificate of
reference by number to the last preceding certificate. The original and the owner's duplicate of
title or of a memorandum thereon and the attestation of the same be Register of
the grantor's certificate shall be stamped "cancelled." The deed of conveyance shall be filled
Deeds, except by order of the proper Court of First Instance. A registered owner of other
and indorsed with the number and the place of registration of the certificate of title of the land
person having an interest in registered property, or, in proper cases, the Register of
conveyed.
Deeds with the approval of the Commissioner of Land Registration, may apply by 31 Entitled, "Property Registration Decree."
petition to the court upon the ground that the registered interests of any description,
Section 108. Amendment and alteration of certificates. No erasure, alteration, or
whether vested, contingent, expectant or inchoate appearing on the certificate, have
amendment shall be made upon the registration book after the entry of a certificate of
terminated and ceased; or that new interest not appearing upon the certificate have
title or of a memorandum ther
arisen or been created; or that an omission or error was made in entering a certificate
Facts:
or any memorandum thereon, or, on any duplicate certificate; or that the same or any
No less than the Constitution maps out the wide grant ofinvestigatory powers to the Ombudsman.
person on the certificate has been changed; or that the registered owner has married,
Hand in hand with thisbestowal, the Ombudsman is mandated to investigate and prosecute, forand
or, if registered as married, that the marriage has been terminated and no right or
in behalf of the people, criminal and administrative offensescommitted by government officers
18
and employees, as well as privatepersons in conspiracy with the former. There can be no
equivocationabout this power-and-duty function of the Ombudsman.
A consolidated petitions separately filed by Oscar R. Ampil (Ampil): (1)one is for certiorari under Rule 65 of
the Rules of Court; and (2) the other is for review on certiorari under Rule 45 of the Rules of
Court.Challenged in the petition for certiorari is the Resolution of theOmbudsman in OMB-C-C-
07-0444-J, dismissing the criminal complaintfiled by Ampil against respondents Policarpio L. Espenesin
(Espenesin),Francis Serrano (Serrano), Yvonne S. Yuchengco (Yuchengco) and Gema O.Cheng (Cheng),
and the Order denying Ampil’s motion for reconsiderationthereof. Ampil’s complaint charged respondents
with Falsification of PublicDocuments under Article 171(6) of the Revised Penal Code and violationof
Sections 3(a) and (e) of Republic Act No. 3019, The Anti-Graft and
Corrupt Practices Act, as amended.The appeal by certiorari, on the other hand, assails the Decision of the
Court of Appeals in CA G.R. SP No. 113171, which affirmed the Orderdated 13 July 2009 of the
Ombudsman in OMB-C-A-07-0474-J on theadministrative aspect of the mentioned criminal complaint for
Falsificationand violation of Republic Act No. 3019 against the Registrar of Deeds,respondent Espenesin.
Initially, the Ombudsman issued a Decision dated
30 April 2008, finding Espenesin guilty of Simple Misconduct and metingon Espenesin the penalty of one (1)
month suspension. On motion forreconsideration of Ampil, the Ombudsman favored Espenesin’s
argumentsin his Opposition, and recalled the one-month suspension the
Ombudsman had imposed on the latter.
Accordingly, we find grave abuse of discretion in the Ombudsman’sincomplete disposition of
Ampil’s complaint.That the Ombudsman is a constitutional officer duty bound to "investigateon its own, or
on complaint by any person, any act or omission of anypublic official, employee, office or agency, when
such act or omissionappears to be illegal, unjust, improper, or inefficient" brooks no objection.The
Ombudsman’s conduct of preliminary investigation is both power andduty. Thus, the Ombudsman and his
Deputies, are constitutionalized asprotectors of the people, who "shall act promptly on complaints filed
inany form or manner against public officials or employees of thegovernment x x x, and shall, x
x x notify the complainants of the actiontaken and the result thereof."The raison d'être for its creation and
endowment of broad investigative
authority is to insulate the Office of the Ombudsman from the longtentacles of officialdom that are able to
penetrate judges’ and fiscals’offices, and others involved in the prosecution of erring public officials,and
through the execution of official pressure and influence, quash, delay,or dismiss investigations into
malfeasances and misfeasances committedby public officers.
Plainly, the Ombudsman has "full discretion," based on the attendantfacts and circumstances, to
determine the existence of probable cause orthe lack thereof. On this score, we have consistently hewed
to the policyof non-interference with the Ombudsman’s exercise of its constitutionallymandated powers.
The Ombudsman’s finding to proceed or desist in theprosecution of a criminal case can only be assailed
through certiorariproceedings before this Court on the ground that such determination is tainted with
grave abuse of discretion which contemplates an abuse sograve and so patent equivalent to lack or
excess of jurisdiction.
However, on several occasions, we have interfered with the Ombudsman’s discretion in
determining probable cause:
(a) To afford protection to the constitutional rights of the accused;
(b) When necessary for the orderly administration of justice or to avoid
oppression or multiplicity of actions;
(c) When there is a prejudicial question which is sub judice;
(d) When the acts of the officer are without or in excess of authority;
(e) Where the prosecution is under an invalid law, ordinance or regulation;
(f) When double jeopardy is clearly apparent;
(g) Where the court has no jurisdiction over the offense;
(h) Where it is a case of persecution rather than prosecution;
(i) Where the charges are manifestly false and motivated by the lust for
vengeance.
While we agree with the Ombudsman’s disquisition that there is noprobable cause to indict respondents
for Falsification of Public Documentsunder Article 171(6) of the Revised Penal Code, we are puzzled why
the
Ombudsman completely glossed over Ampil’s charge that respondents committed prohibited acts listed in
Sections 3(a) and (e) of Republic ActNo. 3019. Nowhere in the Resolution or in the Order
denyingreconsideration thereof did the Ombudsman tackle and resolve the issueof whether respondents
violated the particular provisions of Republic Act No. 3019. Curiously, the Ombudsman docketed
Ampil’s complaint-affidavit as one "for: Falsification of Public Documents and Violation ofSections 3(a)
and (e) of Republic Act No. 3019, as amended." TheOmbudsman even prefaced the Resolution,
thus: "this has reference tothe complaint filed by Oscar Ampil on 17 September 2007
againstrespondents, for Falsification of Public Documents and Violation ofSections 3, paragraphs
(a) and (e) of Republic Act No. 3019, otherwiseknown as the Anti-Graft and Corrupt Practices Act, as
amended." We areaware that the calibration of evidence to assess whether a prima faciegraft case exists
against respondents is a question of fact. We haveconsistently held that the Supreme Court is not a trier of
facts, more so inthe consideration of the extraordinary writ of certiorari where neitherquestions of fact nor
law are entertained, but only questions of lack orexcess of jurisdiction or grave abuse of discretion.
In this case, however,certiorari will lie, given that the Ombudsman made no finding at all onrespondents
possible liability for violation of Sections 3(a) and (e) of
Republic Act No. 3019.
We hasten to reiterate that we are only dealingherein with the preliminary investigation aspect of this
case. We do not adjudge respondents’ guilt or the lack thereof
G.R. No. 198860 July 23, 2012
ABRAHAM RIMANDO, Petitioner,
vs.
NAGUILIAN EMISSION TESTING CENTER, INC., represented by its President, ROSEMARIE LLARENAS and HON.
COURT OF APPEALS, Respondents.
RESOLUTION
REYES, J.:
Before us is a petition for review on certiorari1 under Rule 45 of the Rules of Court seeking to annul and set
aside Decision2 dated March 30, 2011 of the Court of Appeals (CA) in CA-G.R. SP NO. 112152.
The Facts
The present controversy stemmed from a petition for mandamus and damages filed before Branch 67 of
the Regional Trial Court (RTC) of Bauang, La Union, by Naguilian Emission Testing Center, Inc., represented
by its President, Rosemarie Llarenas (respondent) against Abraham P. Rimando (petitioner), who, at the
time material to the case, was the sitting mayor of the Municipality of Naguilian, La Union.
The petition prayed for the issuance of a writ of mandamus to compel the petitioner to issue a business
permit in favor of the respondent.
In support of its plea, the respondent claimed that its business is being conducted on a parcel of land
which formerly belonged to the national government but later on certified by the Department of
Environment and Natural Resources (DENR) as an alienable and disposable land of the public domain. The
respondent had operated its business of emission testing on the land from 2005 to 2007. On January 18,
2008, the respondent filed an application for the renewal of its business permit and paid the corresponding
fees therefor.
The petitioner, however, refused to issue a business permit unless and until the respondent executes a
contract of lease with the Municipality of Naguilian. The respondent was amenable to signing such
contract subject to some proposed revisions, which, however, were not acceptable to the petitioner. The
parties did not reach a common ground hence, the petition for mandamus.
The Ruling of the RTC
19
On May 26, 2009, the RTC denied the petition3 for lack of merit based on the ratiocinations that: (a) the
Municipality of Naguilian is the declared owner of the subject parcel of land by virtue of Tax Declaration
No. 002-01197; (b) under Section 6A.01 of the Revenue Code of the Municipality of Naguilian, the
municipality has the right to require the petitioner to sign a contract of lease because its business
operation is being conducted on a real property owned by the municipality; and (c) a mayor’s duty to
issue business permits is discretionary in nature which may not be enforced by a mandamus writ. The
decretal portion of the decision reads:
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED.4
The Ruling of the CA
Unwaivering, the respondent appealed to the CA. In its Decision 5 dated March 30, 2011, the CA held that
the appeal was dismissible on the ground of mootness considering that the period for which the business
period was being sought had already lapsed. As such, any ruling on the matter would bring no practical
relief. Nonetheless, the CA proceeded to resolve the issues involved in the appeal for academic purposes.
The CA disagreed with the RTC and found that the factual milieu of the case justifies the issuance of a writ
of mandamus. The CA reasoned that the tax declaration in the name of the municipality was insufficient
basis to require the execution of a contract of lease as a condition sine qua non for the renewal of a
business permit. The CA further observed that Sangguniang Bayan Resolution No. 2007-81, upon which the
municipality anchored its imposition of rental fees, was void because it failed to comply with the
requirements of the Local Government Code and its Implementing Rules and Regulations.
The CA held that the petitioner may not be held liable for damages since his action or inaction, for that
matter, was done in the performance of official duties that are legally protected by the presumption of
good faith. The CA likewise stressed that the civil action filed against the petitioner had already become
moot and academic upon the expiration of his term as the mayor of Naguilian, La Union.
Despite its incessant declarations on the mootness of the case, the CA disposed of the appeal in this wise:
WHEREFORE, the Decision dated 26 May 2009 of the Regional Trial Court, First Judicial Region, Bauang, La
Union, Branch 67, in Special Civil Action Case No. 72-BG, is hereby REVERSED and SET ASIDE.
SO ORDERED.6
The petitioner moved for reconsideration7 questioning the pronouncement of the CA that Sangguniang
Bayan Resolution No. 2007-81 was void and arguing that a petition for mandamus is not the proper vehicle
to determine the issue on the ownership of the subject land. The motion was denied in the CA
Resolution8 dated September 30, 2011.
The petitioner is now before this Court reiterating the arguments raised in his motion for reconsideration.
Our Ruling
We agree with the CA that the petition for mandamus has already become moot and academic owing
to the expiration of the period intended to be covered by the business permit.
An issue or a case becomes moot and academic when it ceases to present a justiciable controversy so
that a determination thereof would be without practical use and value 9 or in the nature of things, cannot
be enforced.10 In such cases, there is no actual substantial relief to which the applicant would be entitled
to and which would be negated by the dismissal of the petition.11 As a rule, courts decline jurisdiction over
such case, or dismiss it on ground of mootness.12
The objective of the petition for mandamus to compel the petitioner to grant a business permit in favor of
respondent corporation for the period 2008 to 2009 has already been superseded by the passage of time
and the expiration of the petitioner’s term as mayor. Verily then, the issue as to whether or not the
petitioner, in his capacity as mayor, may be compelled by a writ of mandamus to release the
respondent’s business permit ceased to present a justiciable controversy such that any ruling thereon
would serve no practical value. Should the writ be issued, the petitioner can no longer abide thereby; also,
the effectivity date of the business permit no longer subsists.
While the CA is not precluded from proceeding to resolve the otherwise moot appeal of the respondent,
we find that the decretal portion of its decision was erroneously couched.
The CA’s conclusions on the issue of ownership over the subject land and the invalidity of Sangguniang
Bayan Resolution No. 2007-81, aside from being unsubstantiated by convincing evidence, can no longer
be practically utilized in favor of the petitioner. Thus, the overriding and decisive factor in the final
disposition of the appeal was its mootness and the CA should have dismissed the same along with the
petition for mandamus that spawned it.
More importantly, a mayor cannot be compelled by mandamus to issue a business permit since the
exercise of the same is a delegated police power hence, discretionary in nature. This was the
pronouncement of this Court in Roble Arrastre, Inc. v. Hon. Villaflor13 where a determination was made on
the nature of the power of a mayor to grant business permits under the Local Government Code,14 viz:
Central to the resolution of the case at bar is a reading of Section 444(b)(3)(iv) of the Local Government
Code of 1991, which provides, thus:
SEC. 444. The Chief Executive: Powers, Duties, Functions and Compensation.
(b) For efficient, effective and economical governance the purpose of which is the general
welfare of the municipality and its inhabitants pursuant to Section 16 of this Code, the municipal
mayor shall:
xxxx
3) Initiate and maximize the generation of resources and revenues, and apply the same to the
implementation of development plans, program objectives and priorities as provided for under
Section 18 of this Code, particularly those resources and revenues programmed for agro-industrial
development and country-wide growth and progress, and relative thereto, shall:
xxxx
(iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions
upon which said licenses or permits had been issued, pursuant to law or ordinance.
As Section 444(b)(3)(iv) so states, the power of the municipal mayor to issue licenses is pursuant to Section
16 of the Local Government Code of 1991, which declares:
SEC. 16. General Welfare. – Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and preserve the comfort
and convenience of their inhabitants.
Section 16, known as the general welfare clause, encapsulates the delegated police power to local
governments.1âwphi1Local government units exercise police power through their respective legislative
bodies. Evidently, the Local Government Code of 1991 is unequivocal that the municipal mayor has the
power to issue licenses and permits and suspend or revoke the same for any violation of the conditions
upon which said licenses or permits had been issued, pursuant to law or ordinance. x x x
xxxx
Section 444(b)(3)(iv) of the Local Government Code of 1991, whereby the power of the respondent mayor
to issue license and permits is circumscribed, is a manifestation of the delegated police power of a
municipal corporation. Necessarily, the exercise thereof cannot be deemed ministerial. As to the question
of whether the power is validly exercised, the matter is within the province of a writ of certiorari, but
certainly, not of mandamus.15 (Citations omitted)
Indeed, as correctly ruled by the RTC, the petition for mandamus filed by the respondent is incompetent to
compel the exercise of a mayor’s discretionary duty to issue business permits.
WHEREFORE, premises considered, the Decision dated March 30, 2011 of the Court of Appeals in CA-G.R.
SP No. 112152 is hereby SET ASIDE. The Decision dated May 26, 2009 of the Regional Trial Court of Bauang,
La Union is REINSTATED.
SO ORDERED.
BIENVENIDO L. REYES
Associate justice
WE CONCUR:
20
ANTONIO T. CARPIO
Senior Associate Justice
Chairperson, Second Division DOCTRINE
MARIANO C. DEL CASTILLO A mayor cannot be compelled by mandamus to issue a business permit since the exercise of the same is a
Associate justice delegated police power, hence discretionary in nature.
JIOSE PORTUGAL PEREZ
Associate justice FACTS
MARIA LOURDES P.A. SERENO 1. Naguilian Emission Testing Center, Inc. was operating an emission testing center in Naguilian, La Union
Associate justice (surprise!) on land owned by the government, but was subsequently declared alienable and
CERTIFICATION disposable by the DENR.
I certify that the conclusions in the above Resolution had been reached in consultation before the case 2. From 2005 to 2007, the business operated without any problem. In 2008, the business applied for a
was assigned to the writer of the opinion of the Court's Division. renewal of its business license and paid the fees therefor.
ANTONIO T. CARPIO 3. Abraham Rimando, mayor of Naguilian, La Union, refused to issue the license until the business
Senior Associate Justice executes a contract of lease with the Municipality of Naguilian.
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended) 4. The business was amenable to this condition, subject to some proposed revisions. (What these revisions
were was not mentioned in the case.) However, these revisions were not acceptable to the Mayor.
5. A petition for mandamus was filed by the business with the RTC against the Mayor.
Footnotes 6. The RTC denied the petition, based on the following findings:
* Additional member per Special Order No. 1257 dated July 19, 2012, in lieu of the absence of a. That the Municipality of Naguilian was the declared owner of the subject property as
Associate Justice Arturo D. Brion. evidenced by the tax declaration over the property;
1 Rollo, pp. 4-20.
b. Under Sec. 6A.01 of the Revenue Code, the municipality has the right to require petitioner to
2 Penned by Associate Justice Japar B. Dimaampao, with Associate Justices Mariflor P. Punzalan
sign a contract of lease; and
Castillo and Jane Aurora C. Lantion, concurring; id. at 22-22. c. A mayor’s duty to issue business permits is discretionary in nature.
3 Under the sala of Judge Ferdinand A. Fe; id. at 46-49.
7. The Court of Appeals, while declaring the issue moot and academic since the period for which the
4 Id. at 49.
business permit was sought (year 2008) had already lapsed, and Mayor Rimando’s term had already
5 Supra note 2.
ended. Nonetheless, it proceeded to rule on the merits and found that the issuance of a write of
6 Rollo, p. 33.
mandamus was justified. It reversed and set aside the ruling of the RTC.
7 Id. at 34-41.
a. The CA held that the tax declaration was insufficient basis to require the execution of a
8 Id. at 42-43.
contract of lease as a sine qua non condition for the issuance of a business permit.
9 Philippine Airlines, Inc. v. Pascua, 456 Phil. 425, 436 (2003).
b. Also, the resolution of the Sangguniang Panlalawigan (2007-81), upon which the mayor
10 Lanuza, Jr. v. Yuchengco, 494 Phil. 125, 133 (2005); See also Gonzales v. Narvasa, 392 Phil.518,
anchored his imposition of rental fees, was void for its failure to comply with the requirements
522 (2000); Villarico v. Court of Appeals, 424 Phil. 26 (2002); King v. Court of Appeals, 514 Phil. 465, of the Local Government Code. (the case fails to mention which requirements)
470 (2005). c. The mayor, however, may not be held liable for damages as his refusal was done in the
11 Soriano Vda. De Dabao v. Court of Appeals, 469 Phil. 928 (2004).
performance of official duties.
12 Gunsi, Sr. v. Commissioners, The Commission on Elections, G.R. No. 168792, February 23, 2009,

580 SCRA 70, 76. ISSUE with HOLDING

13 531 Phil. 30 (2006).
1. W/N a writ of mandamus to compel Mayor Rimando to issue a business license to Naguilian Emission
14 Although the case involved the issuance of a business permit for arrastre service, the general
Testing Center should have been issued by the court.
power of a mayor to issue business permits is encapsulated in the same legal provision of the
Local Government Code without distinguishing the nature of the business for which a permit is
sought.
15 Supra note 13, at 43-46.
Police Power; General Welfare Clause
G.R. L-3087-88 -- Rimando v. Naguilian Emission Testing Center
Concepcion, J.
Naguilian Emissions was running a business on land owned by the government. It sought to renew its
business license in 2008. However, the mayor of Naguilian town refused to issue the license without the
execution of a contract of lease between the business and the municipality. They could not agree on the
terms hence a petition for mandamus was filed against the mayor by the business. This was granted by the
lower court, whose decision was then overturned by the CA, which found that a tax declaration is not
sufficient proof of ownership of the property by the municipality.
a. No.A mayor cannot be compelled by mandamus to issue a business permit since the
exercise of the same is a delegated police power, hence discretionary in nature.
i. This was the pronouncement of the Court in Roble Arrastre, Inc. v. Hon. Villaflor,
where a determination was made on the nature of the power of a mayor to grant
business permits under the Local Government Code.
ii. The Court in that case held that such power to grant permits is a manifestation of
delegated police power. Necessarily, the exercise thereof cannot be deemed
ministerial.
iii. The proper remedy is a writ of certiorari, not mandamus.
iv. The grant of such power under the Local Government Code is found in Sec. 444.
Such section states that the municipal mayor’s power to issue licenses is pursuant to
Sec. 16 of the same law.Section 16 of the LGC is the general welfare clause, which
21
 encapsulates the delegated police power to local governments. This is exercised
through their respective legislative bodies.
DISPOSITIVE PORTION
Wherefore, premises considered, the Decision of the Court of Appeals is hereby SET ASIDE. The Decision of
the Regional Trial Court of Bauang, La Union is REINSTATED.
DIGESTER: Horace
SEC. 444.The Chief Executive: Powers, Duties, Functions and Compensation.
(b) For efficient, effective and economical governance the purpose of which is the general welfare of
the municipality and its inhabitants pursuant to Section 16 of this Code, the municipal mayor shall:
3) Initiate and maximize the generation of resources and revenues, and apply the same to the
implementation of development plans, program objectives and priorities as provided for under
Section 18 of this Code, particularly those resources and revenues programmed for agro- industrial
development and country-wide growth and progress, and relative thereto, shall:
(iv) Issue licenses and permits and suspend or revoke the same for any violation of the
conditions upon which said licenses or permits had been issued, pursuant to law or ordinance.
SEC. 16.General Welfare. – Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and preserve the comfort
and convenience of their inhabitants.
G.R. No. 165450 August 13, 2009
FRANCIS F. YENKO, as Administrator & MAYOR JINGGOY E. ESTRADA, both of the Municipality of San Juan,
Metro Manila, Petitioners,
vs.
RAUL NESTOR C. GUNGON, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 165452
RAUL NESTOR C. GUNGON, Petitioner,
vs.
FRANCIS F. YENKO, as Administrator, & MAYOR JINGGOY E. ESTRADA, both of the Municipality of San Juan,
Metro Manila, Respondents.
DECISION
PERALTA, J.:
These are consolidated petitions for review on certiorari, under Rule 45 of the Rules of Court, of the
Amended Decision1 of the Court of Appeals in CA-G.R. SP No. 51093 dated September 28, 2004, reinstating
Raul Nestor C. Gungon to his former position as Local Assessment Operations Officer III in the Assessor’s
Office of the Municipal Government of San Juan, Metro Manila, without loss of seniority rights, at the
discretion of the appointing authority and subject to Civil Service law, rules and regulations; and ordering
the payment to Gungon of back salaries equivalent to five years from the date he was dropped from the
rolls.
The facts are as follows:
On February 28, 1987, Raul Nestor C. Gungon, who holds a professional career service eligibility, was
extended a permanent appointment as Local Assessment Operations Officer III in the Assessor’s Office of
the Municipality of San Juan, Metro Manila.
On January 7, 1998, San Juan Municipal Administrator Francisco F. Yenko issued a
Memorandum2 temporarily reassigning Gungon to the Public Order and Safety Office (POSO) of the said
municipality effective January 8, 1998 in the exigency of the service. Gungon was directed to report to Mr.
Felesmeno Oliquino for further instruction. When Gungon received the Memorandum, Mr. Oliquino was
confined at the San Juan Medical Center and he passed away on January 9, 1998.
On January 8, 1998, Gungon, in compliance with the reassignment Memorandum, reported to the POSO.
The officer-in-charge (OIC) of the POSO, Arnulfo Aguilar, issued a Memorandum3 dated January 8, 1998
requiring Gungon to report as Duty Agent, whose responsibility was "to conduct inspections within the
municipal compound, apprehend any suspicious characters roaming within the vicinity of the municipal
hall and compound," and setting his tour of duty at 12:01 a.m. to 8:00 a.m. from Monday to Friday.
In a letter4 dated January 9, 1998 to the OIC of the POSO, Gungon protested his reassignment for being
violative of the Administrative Code of 1987, which prohibits reassignment that results in reduction in rank,
status or salary of an employee. Gungon went on sick leave from January 8 to 21, 1998 after filing the
proper application with supporting medical certificate.5
On January 20, 1998, Gungon, through counsel, wrote a letter6 to Municipal Administrator Yenko, objecting
to his reassignment because it amounted to a demotion in rank; it was arbitrary, unwarranted and illegal;
and it violated his constitutional right to security of tenure. Gungon requested the recall of the
Memorandum dated January 7, 1998 and his reinstatement to his position as Local Assessment Operations
Officer III.
On January 22, 1998, Gungon, whose leave of absence had by then expired, reported back to his office
at the Municipal Assessor’s Office and continued to do so even if he was not given work there.
On February 13, 1998, Gungon received from Municipal Administrator Yenko a Memorandum,7 which
called his attention to his failure to report for duty at the POSO since the date of his reassignment. Gungon
was informed that his action was a violation of Civil Service Rules which might constitute a ground for
dismissal from the service.
In a letter dated February 18, 1998, Gungon replied to Municipal Administrator Yenko’s Memorandum, the
pertinent portion of which reads:
Dear Sir:
This is in response to your memorandum of 13 February 1998 concerning my alleged failure to report to my
designated place of assignment since the effectivity of the reassignment order on January 8, 1998 up to
this date.
xxxx
The transfer/reassignment is arbitrary, malicious, patently illegal, and palpably constitutes a violation of the
Anti-Graft and Corrupt Practices Act (RA No. 3019) x x x. You know very well that there is no factual nor
legal basis to transfer and assign me from the assessor’s office, where I work as assessor, to the POSO where
I will be working as a security guard in the guise of "exigency of service" which, no matter how one looks at
it, is false and beyond comprehension. In fact, your memorandum is silent as to why I am purposely
selected to work as security guard amidst the pendency of more important assessor’s work I was doing
and am still to perform being the number three man in the assessor’s office, and availability of others
subordinate to me who are more qualified to perform a police work, thus, establishing that the only
purpose is to cause injury to me.
Your charge that I have not reported for work is equally untrue. I have been reporting to the assessor’s
office from 8:00 a.m. to 5:00 p.m., but my time card has not been signed by my superior, evidently for fear
that he could be administratively dealt with. On the other hand, I have not reported to the POSO
because, instead of being assigned from 8:00 a.m. to 5:00 p.m., I was given a graveyard assignment from
12:01 in the morning up to 8:00 a.m. I certainly cannot work with that kind of schedule and work, placing
my personal safety and life in peril.
22
There is no contumacy on my part not to report because, by your memorandum and implemented by the
POSO head, I had been given an assignment impossible to perform, dangerous to undertake, and beyond
my personal competence to discharge.8
In a Memorandum9 dated February 23, 1998, then San Juan Mayor Jinggoy Estrada informed Gungon that
he was "considered dropped from the rolls because of [his] absence without official leave from x x x
January 22, 1998 up to the present x x x."
Gungon appealed the Memoranda dated January 7, 1998 and February 23, 1998 of Municipal
Administrator Yenko and Mayor Estrada, respectively, to the Civil Service Commission (CSC). He alleged
that the Municipal Administrator committed abuse of authority amounting to oppression in reassigning him
from the Assessor’s Office, where he was working as Local Assessment Operations Officer III, to the POSO,
where he would be required to work as a security guard, even if the Municipal Administrator knew that he
never had the knowledge, background or training as a security guard. He also alleged that the Municipal
Administrator violated the Civil Service Law when he effected the reassignment, because he knew that
such personnel action was meant to demote, humiliate and subject him to ridicule, risk, harassment and
undue injury rather than enhance the so-called "exigency of service." Further, he contended that Mayor
Estrada approved the illegal transfer by dropping him from the rolls on the pretext that he was absent from
January 22 to February 23, 1998, although his failure to report to the POSO was based on justifiable,
meritorious and valid grounds, thereby rendering the Mayor’s Memorandum dropping him from the rolls as
illegal and void.10
The CSC dismissed Gungon’s appeal in CSC Resolution No. 982525 dated September 28, 1998. The
dispositive portion of the Resolution reads:
WHEREFORE, the Appeal of Raul Nestor C. Gungon is hereby dismissed. Accordingly, the decision of Mayor
Jinggoy Estrada, Municipality of San Juan, Metro Manila, dropping him from the rolls, is affirmed.11
The CSC held that even if Gungon suffered a reduction in rank when he was reassigned from the Office of
the Municipal Assessor to the POSO, it was improper for him to defy the reassignment order. It cited its
ruling in CSC Resolution No. 95-0114 dated January 5, 1995, thus:
A reassignment order is generally implemented immediately even if the employee does not agree with it. x
x x The rule is a reassigned employee who does not agree with the order must nevertheless comply until its
implementation is restrained or it is declared to be not in the interest of service or have been issued with
grave abuse of discretion.12lawphi1
The CSC held that Gungon’s failure to report for work for more than 30 days was violative of CSC
Memorandum Circular No. 38, series of 1993, as amended, which provides that "[a]n officer or employee
who is continuously absent without approved leave (AWOL) for at least thirty (30) calendar days shall be
separated from the service or dropped from the rolls without prior notice."
Gungon’s motion for reconsideration was denied in CSC Resolution No. 99019413 dated January 15, 1999.
Gungon filed a petition for review of the CSC’s Resolutions with the Court of Appeals. He alleged that the
CSC erred (1) in not nullifying the reassignment order and order of separation from the service
notwithstanding its finding that as a result thereof, he suffered a reduction in rank; (2) in holding that his
failure and refusal to comply with the reassignment order was justified; and (3) in holding that for his failure
and refusal to report for duty at the disputed job he was deemed to have incurred continuous absences.14
Gungon also raised the following issues:
1) Whether or not a transfer of a Career Civil Service Employee amounting to a reduction in rank,
thus violative of the Civil Service Law, is valid and enforceable;
2) Whether or not a transfer to a new position which entails a job that is completely and entirely
different from the previous assignment is valid and enforceable;
3) Whether or not a refusal or failure to comply with a transfer which amounts to a reduction in
rank and/or involving a work completely and entirely different from the previous designation
constitutes a ground for dismissal or dropping from the rolls.15
On October 2, 2003, the Court of Appeals rendered a Decision in favor of Gungon, the dispositive portion
of which reads:
WHEREFORE, premises considered, the assailed Civil Service Commission Resolution Nos. 982525 and 990194
are hereby SET ASIDE and payment of petitioner’s back salaries from February 23, 1998 up to October 13,
1998 is hereby ORDERED.16
The Court of Appeals held that Gungon, who occupied the position of Local Assessment Operations
Officer III under a permanent appointment, enjoyed security of tenure, which is guaranteed by the
Constitution and Civil Service Law. His reassignment from Local Assessment Operations Officer III to security
guard involved a reduction in rank and status, which is proscribed under Section 10, Rule 7 of the Omnibus
Rules Implementing Book V of Executive Order No. 292 (Omnibus Civil Service Rules and
Regulations).17 Hence, his reassignment, which was directed by Municipal Administrator Yenko in the
Memorandum dated January 7, 1998, was void ab initio. Consequently, Mayor Estrada's Memorandum
dated February 13, 1998, which ordered Gungon’s dismissal from the service, must suffer from the same
fatal infirmity.18
However, the Court of Appeals, pursuant to Section 35 of Rule XVI of the Omnibus Civil Service Rules and
Regulations,19 as amended, did not grant Gungon’s plea for reinstatement on the ground that Gungon
applied for terminal leave on October 13, 1998, which application was approved. He was paid his terminal
leave benefits in the amount of ₱151,514.39 on November 10, 1998.
The Court of Appeals held that having voluntarily opted to sever his employment by applying for terminal
leave and dismissal until the date he applied for terminal leave, which was from February 23, 1998 up to
October 13, 1998.
The parties filed separate motions for reconsideration of the Decision of the Court of Appeals.
having accepted his terminal leave benefits, Gungon should only be awarded back salaries from the date
of his
Gungon contended:
1. The receipt by the dismissed employee of his terminal leave pay is not fatal to his appeal for
reinstatement;
2. Sec. 35 of the Amended Rule XVI (Leave of Absence) of the Omnibus Rules finds no
application in the case x x x since Sec. 35 of the Amended Rule XVI was an amendment made
only on December 14, 1998, published in the Manila Times on December 30, 1998, and took
effect only on January 15, 1999;
3. The applicable Omnibus Rule in fact is the original or un-amended Sec. 6 of Rule XVI (Leave of
Absence) which was in force and effect at the time petitioner applied for terminal leave on
[October] 13, 1998;
4. The petitioner is entitled to reinstatement with back salaries to a maximum of five (5) years in
view of the Honorable Court’s Decision in setting aside the Memoranda of Municipal
Administrator Yenko and Mayor Estrada, and the CSC Resolutions.20
On the other hand, Municipal Administrator Yenko and Mayor Estrada contended that the conclusion and
the order of payment of Gungon’s back salaries be reconsidered based on the following grounds:
1. Petitioner Gungon was away on leave from January 22, 1998 to February 23, 1998.
2. There was a prohibition to transfer any employee from one office to another effective January
11, 1998 until June 30, 1998 relative to the May 1998 election;
3. The Memorandum of respondent Municipal Administrator Yenko did not assign petitioner
Gungon to work as security guard.21
In an Amended Decision dated September 28, 2004, the Court of Appeals modified its Decision, the
dispositive portion of which reads:
WHEREFORE, the decision dated October 2, 2003 is hereby MODIFIED. Petitioner is hereby reinstated to his
former position as Local Assessment Operations Officer III (LAOO III), without loss of seniority rights, at the
discretion of the appointing authority and subject to Civil Service Law, rules and regulations. Petitioner is
likewise entitled to be paid five (5) years back salaries from the date he was dropped from the rolls on
March 3, 1998.22
Citing Dytiapco v. Civil Service Commission,23 the Court of Appeals held that Gungon’s application for
terminal leave and his subsequent acceptance of terminal leave benefits could not be construed as an
abandonment of his claim for reinstatement or indicative of his intent to voluntarily sever his employment
23
with the government considering that Gungon had appealed his case to the CSC and had a pending
motion for reconsideration of CSC Resolution No. 982525 before he received his terminal leave benefits.
Gungon’s appeal to the CSC and then to the Court of Appeals strongly indicated his desire to be
reinstated, not separated from the government service.
The Court of Appeals stated that Section 35 of the amended Rule XVI 24 of the Omnibus Civil Service Rules
and Regulations, which was its basis for denying Gungon’s reinstatement, does not apply to this case,
because the amended Rule took effect on January 15, 1999, after Gungon had applied for terminal leave
on October 13, 1998 and had received his terminal leave benefits on November 10, 1998. The appellate
court held that the applicable rule is Sec. 6 of the original Rule XVI, which was the prevailing rule when
Gungon received his terminal leave benefits.
Section 6 of the original Rule XVI of the Omnibus Civil Service Rules and Regulations gives two options to a
person whose leave credits have been commuted following his separation from the service, but who is
thereafter reappointed in the government service before the expiration of the leave commuted. These
options are:
(a) Refund the money value of the unexpired portion of the leave commuted; or
(b) May not refund the money value of the unexpired portion of the leave commuted, but insofar
as his leave credits is concerned, he shall start from zero balance.
The Court of Appeals noted that the original provision in Section 6 of Rule XVI of the Omnibus Civil Service
Rules and Regulations was substantially carried in Section 26 of the amended Rule XVI, except that the first
option to refund the money value of the unexpired portion of the leave commuted was no longer
included. Hence, the Court of Appeals held that Gungon may start from zero balance of his leave upon
reemployment in the government service.
As regards the motion for reconsideration filed by Municipal Administrator Yenko and Mayor Estrada, the
Court of Appeals found no reason to change the position it had taken on the said issues since no new
matters were raised.
Both parties filed a petition for review on certiorari of the Amended Decision of the Court of Appeals. The
petition of Municipal Administrator Yenko and Mayor Estrada was docketed as G.R. No. 165450, while that
of Gungon was docketed as G.R. No. 165452. The Court resolved to consolidate both cases in a
Resolution25 dated December 14, 2004.
Municipal Administrator Yenko and Mayor Estrada raised the following issues:
1. Whether or not the Court of Appeals erred in ordering the reinstatement of Gungon to his
former position as Local Assessment Operations Officer III without loss of seniority rights despite the
fact that Gungon subsequently opted to sever his employment by applying for terminal leave
and receiving the equivalent payments thereon.
2. Whether or not the Court of Appeals erred in ordering the payment to Gungon of five years
back salaries from the date he was dropped from the rolls on March [1], 1998 despite the
undisputed fact that Gungon did not render any service to the Municipal Government of San
Juan from the time he was reassigned to POSO up to the time he opted to voluntarily sever his
employment when he applied for terminal leave.26
Gungon raised these issues:
1) Whether or not the appellate court was correct in declaring the reassignment of petitioner and
the dropping of petitioner from the rolls as void ab initio and in setting aside the questioned CSC
Resolutions;
2) Whether or not the petitioner, who was illegally dismissed, has the vested right to his former
position; hence, the right to be reinstated;
3) Whether or not the reinstatement of a career government employee who was illegally
dismissed, through no delinquency or misconduct, is discretionary upon the appointing authority
as ordered in the decretal portion of the Amended Decision of the Court of Appeals.
4) Whether or not the Supreme Court, based on the realities of the time and situation, may now
change its principle adopted in the "Mercury Drug Rule" in fixing the amount of back wages at a
reasonable level without qualification and deduction.27
As regards the first issue raised by petitioner Gungon in G.R. No. 165452, the Court agrees with the decision
of the Court of Appeals that the reassignment of Gungon from the Municipal Assessor’s Office, where his
primary function was that of land appraiser, to the POSO, where he was required to work as a security
guard/duty agent, was void ab initio because it clearly involved a reduction in rank and status. The CSC
affirmed the reduction in rank; petitioners Municipal Administrator Yenko and Mayor Estrada did not
dispute it. Such reassignment is expressly prohibited by Executive Order No. 292, otherwise known as the
Administrative Code of 1987, under Book V, Title 1, Subtitle A, Chapter 5, Sec. 26 (7), thus:
(7) Reassignment.—An employee may be reassigned from one organizational unit to another in the same
agency; Provided, That such reassignment shall not involve a reduction in rank, status or salaries.28
The above provision is reflected in Section 10, Rule VII of the Omnibus Civil Service Rules and Regulations:
Sec. 10. A reassignment is the movement of an employee from one organizational unit to another in the
same department or agency which does not involve a reduction in rank, status or salaries and does not
require the issuance of an appointment.29
Reassignments involving a reduction in rank, status or salary violate an employee’s security of tenure,
which is assured by the Constitution, the Administrative Code of 1987, and the Omnibus Civil Service Rules
and Regulations.30 Security of tenure covers not only employees removed without cause, but also cases of
unconsented transfers and reassignments, which are tantamount to illegal/constructive removal.31
Since Gungon’s reassignment order was void ab initio, his alleged failure to report for duty at the POSO,
where he was reassigned, had no legal basis. Gungon could not have incurred absences in the POSO,
because his reassignment was void. Thus, the cause of his separation from the service, which was
unauthorized absences from the post where he was reassigned, was not a valid cause for dismissing him
from the service. It is undisputed that Gungon reported at the Municipal Assessor’s Office after his leave of
absence, instead of the POSO. Under the circumstances, Gungon is considered to have been illegally
dismissed from the service and entitled to reinstatement.
Gungon contends that the Court of Appeals erred in subjecting his reinstatement to the discretion of the
Municipal Government of San Juan.
The contention is meritorious.
The Court of Appeals misconstrued CSC Memorandum Circular No. 12, series of 1994 when it cited the
Circular as the basis for holding Gungon’s reappointment as "subject to the discretion of the appointing
authority and Civil Service Law, rules and regulations."
CSC Memorandum Circular No. 12, Series of 1994 has for its subject Amendment No. 1 to the Omnibus
Guideline on Appointments and Other Personnel Actions, CSC Memorandum Circular No. 38, Series of 1993
(Dropped from the Rolls). The pertinent portion of the Memorandum provides:
In order to promote efficient and effective personnel administration in government and to obviate any
prejudice to the service, the Civil Service Commission pursuant to Resolution No. 94-1464 dated March 10,
1994 hereby promulgates the following procedure to be followed in separating from the service officials
and employees who are either habitually absent or have unsatisfactory or poor performance or have
shown physical and mental unfitness to perform their duties.
Accordingly, Item 2 of Section VI of the Omnibus Guidelines on Appointments and other Personnel Actions
(MC No. 38, s. 1993- Dropped from the Rolls), now reads as follows:
2. Dropped from the Rolls
2.1 . Absence without Approved Leave
a. An officer or employee who is continuously absent without approved leave
(AWOL) for at least thirty (30) calendar days shall be separated from the
service or dropped from the rolls without prior notice. He shall however be
informed of his separation from the service not later than five (5) days from its
effectivity which shall be sent to the address appearing on his 201 files; and
b. If the number of unauthorized absences incurred is less than thirty (30)
calendar days, written return to work order shall be served on the official or
employee at his last known address on record. Failure on his part to report for
work within the period stated in the order shall be a valid ground to drop him
from the rolls.
24
 2.2 . Unsatisfactory or Poor Performance
xxxx
2.3. Physical and Mental Unfitness
xxxx
2.4. The officer or employee who is separated from the service through any of the
above modes has the right to appeal his case to the CSC or its Regional Office within
fifteen (15) days from receipt of such order or notice of separation;
2.5. The order of separation is immediately executory pending appeal, unless the
Commission on meritorious grounds, directs otherwise;
2.6. This mode of separation from the service for unauthorized absences or
unsatisfactory or poor performance or physical and mental incapacity is non-
disciplinary in nature and shall not result in the forfeiture of any benefits on the part of
the official or employee nor in disqualifying him from reemployment in the government;
2.7. The written notice mentioned in the preceding paragraphs may be signed by the
person exercising immediate supervision over the official or employee. However, the
notice of separation shall be signed by the appointing authority or head of office.
This shall likewise be without prejudice to the reappointment of the official or employee to government at
the discretion of the appointing authority and subject to Civil Service law, rules and regulations.32
To reiterate, the italicized paragraph above was used by the Court of Appeals as the basis for subjecting
Gungon’s reinstatement to the discretion of the appointing authority. The basis is misplaced, because
what the provision means is that the separation of an employee from government service through any of
the modes enumerated in the Memorandum Circular, which includes unauthorized absences, shall be
without prejudice to his reappointment in the government service at the discretion of the appointing
authority and subject to Civil Service law, rules and regulations. Hence, an employee who is validly
dismissed due to unauthorized absences may still be reappointed in the government service, but the
reappointment is at the discretion of the appointing authority and subject to Civil Service law, rules and
regulations.
In this case, Gungon was not validly dismissed from the service. His reassignment to the POSO, which
involved a reduction in rank and status, was void for being violative of Executive Order No. 292 and the
Omnibus Civil Service Rules and Regulations. Hence, Gungon could not have incurred absences in the
office where he was reassigned since the reassignment was void. Consequently, his dismissal for
unauthorized absences in the office where he was reassigned was not valid. Therefore, Memorandum
Circular No. 12, series of 1994, does not apply in the case of Gungon.
In fine, Gungon is entitled to reinstatement, without qualification, for having been illegally dismissed. A
government official or employee reinstated for having been illegally dismissed is considered as not having
left his office.33 His position does not become vacant and any new appointment made in order to replace
him is null and void ab initio.34
As regards the award of Gungon’s back salaries, it is settled jurisprudence that an illegally terminated civil
service employee is entitled to back salaries limited only to a maximum period of five years, 35 and not full
back salaries from his illegal termination up to his reinstatement.
In G.R. No. 165450, petitioners Municipal Administrator Yenko and Mayor Estrada contend that an
application for commutation of vacation and sick leaves under Section 6 of the original Rule XVI of the
Omnibus Civil Service Rules and Regulations is similar to an application for terminal leave under Section 35
of the amended Rule XVI of the Omnibus Civil Service Rules and Regulations, because in both provisions
the application for the respective leaves requires prior severance of employment. Thus, petitioners assert
that when Gungon applied for terminal leave or commutation of his leave credits, the application ended
his employment with the Municipal Government of San Juan. The subsequent payment was merely the
result of his severance from employment. Consequently, the municipal government’s obligation to pay
Gungon’s salaries ended. Hence, the Court of Appeals erred in ordering the municipal government to pay
Gungon back salaries equivalent to five years.
The arguments of petitioners Municipal Administrator Yenko and Mayor Estrada do not persuade.
When Gungon applied for terminal leave on October 13, 1998 and received his terminal leave pay on
November 10, 1998, there was no specific provision on terminal leave. The applicable rule was Section 6,
Rule XVI (Leave of Absence) of the Omnibus Civil Service Rules and Regulations, before Rule XVI was
amended by CSC Memorandum Circular No. 41, series of 1998. Section 6 of Rule XVI provides:
Sec. 6. Vacation and sick leave shall be cumulative and any part thereof which may not be taken within
the calendar year in which earned may be carried over the succeeding years. Whenever any officer or
employee retires, voluntarily resigns or is allowed to resign or is separated from the service through no fault
of his own, he shall be entitled to the commutation of all the accumulated vacation and/or sick leave to
his credit, provided his leave benefits are not covered by special law.
The proper head of Department, local government agency, government-owned or controlled corporation
with original charter and state college and university may, in his discretion, authorize the commutation of
the salary that would be received during the period of vacation and sick leave of any appointive officer
and employee and direct its payment on or before the beginning of such leave from the fund out of
which the salary would have been paid.
When a person whose leave has been commuted following his separation from the service is reappointed
in the government before the expiration of the leave commuted, he is given two options, as follows:
(a) Refund the money value of the unexpired portion of the leave commuted; or
(b) May not refund the money value of the unexpired portion of the leave commuted, but insofar as his
leave credits is concerned, he shall start from zero balance.36
On December 24, 1998, the CSC issued Memorandum Circular No. 41, which, pursuant to CSC Resolution
No. 98-3142, series of 1998, adopted the amendment to Rule XVI (Leave of Absence) and the definitions of
leave terms under Rule I of the Omnibus Civil Service Rules and Regulations. The amended Rule XVI
contained a specific provision on terminal leave in Sec. 35, and substantially reflected in Sec. 26 the
provision in Sec. 6 of the original Rule XVI. The pertinent provisions of Rule XVI, as amended, are as follows:
Sec. 26. Accumulation of vacation and sick leave. -- Vacation and sick leave shall be cumulative and any
part thereof which may not be taken within the calendar year may be carried over to the succeeding
years. Whenever any official or employee retires, voluntarily resigns or is allowed to resign or is separated
from the service through no fault of his own, he shall be entitled to the commutation of all the
accumulated vacation and/or sick leave to his credit, exclusive of Saturdays, Sundays, and holidays,
without limitation as to the number of days of vacation and sick leave that he may accumulate provided
his leave benefits are not covered by special law.
When a person whose leave has been commuted following his separation from the service is reemployed
in the government before the expiration of the leave commuted, he shall no longer refund the money
value of the unexpired portion of the said leave. Insofar as his leave credits is concerned, he shall start from
zero balance.
xxxx
Sec. 35. Terminal leave.—Terminal leave is applied for by an official or an employee who intends to sever
his connection with his employer. Accordingly, the filing of application for terminal leave requires as a
condition sine qua non, the employee’s resignation, retirement or separation from the service without any
fault on his part. It must be shown first that public employment ceased by any of the said modes of
severance.37
Section 6 of the original Rule XVI of the Omnibus Civil Service Rules and Regulations, which is applicable to
this case, provides two options for an employee like Gungon whose leave credits have been commuted
after separation from the service through no fault of his, and who is subsequently reinstated. These options
are: (1) He may refund the money value of the unexpired portion of the leave commuted; or (2) he may
not refund the money value of the unexpired portion of the leave commuted, but insofar as his leave
credits is concerned, he shall start from zero balance. Hence, the Court of Appeals correctly held that
Gungon may start from zero balance of his leave upon re-employment in the government. Notably, the
second option of Section 6 of the original Rule XVI is still contained in Sec. 26 of the amended Rule XVI.
The Court cannot subscribe to the assertion of Municipal Administrator Yenko and Mayor Estrada that
mere application for terminal leave or the commutation of leave credits ended Gungon’s employment
because an application for terminal leave and receipt of terminal leave benefits are not legal causes for
25
the separation or dismissal of an employee from the service. The Constitution explicitly states that "[n]o
officer or employee of the civil service shall be removed or suspended except for cause provided by Associate Justice
law."38
At most, an application for terminal leave under Sec. 35 of the amended Rule XVI of the Omnibus Civil
Service Rules and Regulations shows the intent of an employee to sever his employment, which intent is On Official Leave
RENATO C. CORONA
clear if he has resigned or retired from the service. However, such intent may be disproved in cases of CONSUELO YNARES-SANTIAGO*
Associate Justice
separation from the service without the fault of the employee, who questions his separation, even if the Associate Justice
government agency, pending the employee’s appeal, grants his application for terminal leave because it
has already dropped him from the rolls. In Dytiapco v. Civil Service Commission,39 the Court understood the CONCHITA CARPIO MORALES MINITA V. CHICO-NAZARIO
predicament of an employee who accepted terminal leave benefits because of economic necessity Associate Justice Associate Justice
rather than the desire to leave his employment with the government.
In this case, the Court of Appeals correctly held that Gungon’s application for terminal leave and his
acceptance of terminal leave benefits could not be construed as an abandonment of his claim for PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA
reinstatement or indicative of his intent to voluntarily sever his employment with the government, because Associate Justice Associate Justice
Gungon had appealed his case to the CSC and had a pending motion for reconsideration of CSC
Resolution No. 982525 before he received his terminal leave benefits. Indeed, Gungon’s appeal against his
dismissal to the CSC and, thereafter, to the Court of Appeals, and his petition before this Court – all taken TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION
within a span of 11 years – show his desire to be reinstated, not separated from the government service. In Associate Justice Associate Justice
this connection, the Court of Appeals aptly stated that it would have been unjust for petitioner, who was
dropped from the rolls not to claim his terminal leave pay considering that it would take some time for his LUCAS P. BERSAMIN** MARIANO C. DEL CASTILLO**
appeal to be resolved. Gungon had no permanent employment and had to sustain the needs of his two Associate Justice Associate Justice
sons.
Further, Municipal Administrator Yenko and Mayor Estrada contend that the Court of Appeals erred in ROBERTO A. ABAD
ordering the payment to Gungon of five years back salaries equivalent to five years from the date he was Associate Justice
dropped from the rolls on March 1, 1998 despite the fact that Gungon did not render any service to the CERTIFICATION
Municipal Government of San Juan from the time he was reassigned to POSO up to the time he opted to Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above
voluntarily sever his employment when he applied for terminal leave. Decision were reached in consultation before the case was assigned to the writer of the opinion of the
The contention is without merit. Court.
It is settled that a government official or employee who had been illegally dismissed and whose REYNATO S. PUNO
reinstatement was later ordered is considered as not having left his office, so he is entitled to all the rights Chief Justice
and privileges that should accrue to him by virtue of the office that he held.40 Thus, Gungon is entitled to
payment of back salaries equivalent to a maximum period of five years.41
Lastly, the Court notes that the dispositive portion of the Amended Decision of the Court of Appeals states Footnotes
that Gungon is "entitled to five (5) years’ back salaries from the date he was dropped from the rolls on * On official leave.
March 3, 1998." However, the records showed that per Mayor Estrada’s Memorandum 42 dated February 23, ** No part.
1998, Gungon was informed that he would be considered dropped from the rolls due to his absences 1 Penned by Associate Justice Godardo A. Jacinto, with Associate Justices Mariano C. del Castillo
without official leave effective March 1, 1998. and Lucas P. Bersamin (now both members of this Court), concurring; rollo (G.R. No. 165450), pp.
WHEREFORE, the Amended Decision of the Court of Appeals in CA-G.R. SP No. 51093 dated September 28, 25A-32.
2004 is MODIFIED. Petitioner Gungon is hereby reinstated, without qualification, to his former position as 2 CA rollo, p. 26.
Local Assessment Operations Officer III in the Assessor’s Office of the Municipal Government of San Juan, 3 Id. at 27.
Metro Manila, without loss of seniority rights. Gungon is entitled to payment of back salaries equivalent to 4 Id. at 28.
five (5) years from the date he was dropped from the rolls, which is March 1, 1998. No costs. 5 Id. at 30.
SO ORDERED. 6 Id. at 31.
DIOSDADO M. PERALTA 7 Id. at 32.
Associate Justice 8 Id. at 33-34.
WE CONCUR: 9 Id. at 36.
REYNATO S. PUNO 10 Petition, rollo (G.R. No. 165452), pp. 31-32.
Chief Justice 11 Rollo (G.R. No. 165450), p. 53.
12 Id. at 52.
On Official Leave ANTONIO T. CARPIO 13 Id. at 55.
LEONARDO A. QUISUMBING* Associate Justice 14 Id. at 38-39.
15 Id. at 39.

26
 16Id. at 47.
17Sec. 10. A reassignment is the movement of an employee from one organizational unit to On January 7, 1998, San Juan Municipal Administrator Francisco F. Yenko issued a Memorandum[2]
another in the same department or agency which does not involve a reduction in rank, status or temporarily reassigning Gungon to the Public Order and Safety Office (POSO) of the said municipality
salaries and does not require the issuance of an appointment. effective January 8, 1998 in the exigency of the service. Gungon was directed to report to Mr. Felesmeno
18 Rollo (G.R. No. 165450), pp. 39-46. Oliquino for further instruction. When Gungon received the Memorandum, Mr. Oliquino was confined at
19 Sec. 35. Terminal leave. - Terminal leave is applied for by an official or an employee who the San Juan Medical Center and he passed away on January 9, 1998.
intends to sever his connection with his employer. Accordingly, the filing of application for
terminal leave requires as a condition sine qua non, the employee's resignation, retirement or On January 8, 1998, Gungon, in compliance with the reassignment Memorandum, reported to the POSO.
separation from the service without any fault on his part. It must be shown first that public The officer-in-charge (OIC) of the POSO, Arnulfo Aguilar, issued a Memorandum[3] dated January 8, 1998
employment ceased by any of the said modes of severance. requiring Gungon to report as Duty Agent, whose responsibility was "to conduct inspections within the
20 Rollo (G.R. No. 165450), p. 25-B. municipal compound, apprehend any suspicious characters roaming within the vicinity of the municipal
21 Id. at 25-B to 26. hall and compound," and setting his tour of duty at 12:01 a.m. to 8:00 a.m. from Monday to Friday.
22 Id. at 31.
23 G.R. No. 92136, July 3, 1992, 211 SCRA 88. In a letter[4] dated January 9, 1998 to the OIC of the POSO, Gungon protested his reassignment for being
24 As amended by CSC Memorandum Circular No. 41, series of 1998. violative of the Administrative Code of 1987, which prohibits reassignment that results in reduction in rank,
25 Rollo (G.R. 165450), p. 85. status or salary of an employee. Gungon went on sick leave from January 8 to 21, 1998 after filing the
26 Id. at 15-16. proper application with supporting medical certificate.[5]
27 Rollo (G.R. No. 165452), pp. 44-45.
28 Emphasis supplied. He was then Dismissed for not having to comply with his supposedly new duty as Duty Agent.
29 Emphasis supplied.
30 See Bentain v. Court of Appeals, G.R. No. 89452, June 9, 1992, 209 SCRA 644. ISSUE:
31 Id. Was Gungon Illegally Dismissed?
32 Italics supplied.
33 Gementiza v. Court of Appeals, G.R Nos. L-41717-33, April 12, 1982, 113 SCRA 477, 488; Cristobal HELD:
v. Melchor, No. L-43203, December 29, 1980, 101 SCRA 857. Yes. Petitioner Gungon is hereby reinstated, without qualification, to his former position as Local Assessment
34 Canonizado v. Aguirre, G.R. No. 133132, February 15, 2001, 351 SCRA 659, 673. Operations Officer III in the Assessors Office of the Municipal Government of San Juan, Metro Manila,
35 Adiong v. Court of Appeals, G.R. No. 136480, December 4, 2001, 371 SCRA 373, 381; without loss of seniority rights. Gungon is entitled to payment of back salaries equivalent to five (5) years
Marohombsar v. Court of Appeals, G.R. No. 126481, February 18, 2000, 326 SCRA 62, 73-74; San from the date he was dropped from the rolls, which is March 1, 1998. No costs.
Luis v. Court of Appeals, G.R. No. 80160, June 26, 1989, 174 SCRA 258, 273; Tan, Jr. v. Office of the
President, G.R. No. 110936, February 4, 1994, 229 SCRA 677; Salcedo v. Court of Appeals, No. L-
40846, January 31, 1978, 81 SCRA 408; Balquidra v. CFI of Capiz, Branch II, No. L-40490, October
28, 1977, 80 SCRA 123.
36 Emphasis supplied.
37 Emphasis supplied.
38 The Constitution, Art. IX (B), Sec. 2 (3).
39 Supra note 23.
40 City Government of Makati City, G.R. No. 131392, February 6, 2002, 376 SCRA 248, 271; Cristobal

v. Melchor, No. L-43203, December 29, 1980, 101 SCRA 857; Tan, Jr. v. Office of the President,
supra note 35.
41 Tan, Jr. v. Office of the President, supra note 35.
42 CA rollo, p. 36.

YENKO V GUNGON
GR NO. 165450 & 165452 8/13/2009

FACTS:
Petitioner Raul Nestor C. Gungon in this consolidated case assails his transfer/ reassignment which
according to him was violative of his constitutional right to stability of tenure and furthermore was illegally
dismissed.

On February 28, 1987, Raul Nestor C. Gungon, who holds a professional career service eligibility, was
extended a permanent appointment as Local Assessment Operations Officer III in the Assessors Office of
the Municipality of San Juan, Metro Manila.
27