TOGUAY, Paul Jeffrey U.

2019-80129
Block 4
Topic: Administrative Agencies

Case Topic: the validity of Memorandum Order No. 96-735, dated 19 February 1996, and
Department Order No. 97-1025, dated 29 January 1997, Department of Transportation and
Communication

WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED.

ACCORDINGLY, the decision dated 31 March 1999 of the Regional Trial Court of Quezon
City-Branch 81 in Special Civil Action Case No. Q-96-26868 is REVERSED and SET ASIDE.

Citation G.R. No. 138200

Date February 27, 2002

Petitioner SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND

COMMUNICATIONS (DOTC)

Respondent ROBERTO MABALOT

PRINCIPLES/
DOCTRINES 1. As a general rule, a reorganization is carried out in good faith if it is for
the purpose of economy or to make bureaucracy more efficient.

2. A public office may be created through any of the following modes, to wit,
either:
a. by the Constitution (fundamental law);
b. by law (statute duly enacted by Congress);
c. by authority of law.

3. Congress can delegate the power to create positions.

4. At various times, Congress has vested power in the President to

reorganize executive agencies and redistribute functions, and particular
transfers under such statutes have been held to be within the authority of
the President.

5. Section 17, Article VII of the Constitution mandates:

 "The President shall have control of all executive departments, bureaus
and offices. He shall ensure that the laws be faithfully executed."

By definition, control is "the power of an officer to alter or modify or

nullify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former for
that of the latter." It includes the authority to order the doing of an act by
a subordinate or to undo such act or to assume a power directly vested in
him by law.

BUENA, J.:

FACTS:
In February 1996, then DOTC Secretary Jesus B. Garcia, Jr., issued Memorandum
Order No. 96-735 pending the creation of a regular Regional Franchising and Regulatory
Office thereat, pursuant to Section 7 of Executive Order No. 202. to LTFRB Chairman
Dante Lantin, establishing DOTC-CAR Regional Office as the Regional Office of the
LTFRB and shall exercise the regional functions of the LTFRB in the CAR subject to the
direct supervision and control of LTFRB Central Office in the interest of the service" and
"for purposes of economy and more effective coordination of the DOTC functions in the
Cordillera Administrative Region.

In March 1996, Respondent Mabalot filed a petition for certiorari and prohibition
against the petitioner and LTFRB Chairman Lantin, praying that the Memorandum Order
be declared “illegal and without effect”. The DOTC Secretary filed an Answer to the
petition.

In January 1997, The DOTC Secretary issued Department Order No. 97-1025
pursuant to Administrative Order No. 36, establishing DOTC-CAR Regional Office the
Regional Office of the LTFRB and shall exercise the regional functions of the LTFRB in the
CAR subject to the direct supervision and control of LTFRB Central Office in the interest
of the service" and "for purposes of economy and more effective coordination of the
DOTC functions in the Cordillera Administrative Region.

After trial, the OSG moved to reopen the hearing and the RTC granted the motion.
The RTC ruled in favor of the respondent, declaring the Administrative Order and
Memorandum Order null and void and without any legal effect as being violative of the
provision of the Constitution against encroachment on the powers of the legislative
department and also of the provision enjoining appointive officials from holding any
other office or employment in the Government.

ISSUE:
1. Whether or not the DOTC Secretary can reorganize - transfer functions within its
department. - Yes.

2. Whether or not the reorganization is valid. - YES

RULING:
1. YES. The DOTC Secretary can reorganize - transfer function with his department
BY AUTHORITY OF LAW.

A public office may be created through any of the following modes, to wit,
either (1) by the Constitution (fundamental law), (2) by law (statute duly enacted
by Congress), or (3) by authority of law.

The President - through his duly constituted political agent and alter ego,
the DOTC Secretary in the present case - may legally and validly decree the
reorganization of the Department.

Under Presidential Decree No. 1416, as amended by Presidential Decree No.

1772, The President of the Philippines shall have continuing authority to
reorganize the National Government;...Transfer functions, appropriations,
equipment, properties, records and personnel from one department, bureau,
office, agency or instrumentality to another.

In the case at bar, the creation and establishment of LTFRB-CAR Regional

Office was made pursuant to the third mode - by authority of law. The DOTC
Secretary issued the assailed Memorandum and Department Orders pursuant to
Administrative Order No. 36 of the President,9 dated 23 September 1987, Section 1,
directing to establish forthwith their respective regional offices In the Cordillera
Administrative Region.

Simply stated, it is as if the President himself carried out the creation and
establishment of LTFRB-CAR Regional Office, when in fact, the DOTC Secretary,
 as alter ego of the President, directly and merely sought to implement the Chief
Executive’s Administrative Order.

the "designation" and subsequent establishment of DOTC-CAR as the

Regional Office of LTFRB in the Cordillera Administrative Region and the
concomitant exercise and performance of functions by the former as the LTFRB-
CAR Regional Office, fall within the scope of the continuing authority of the
President to effectively reorganize the Department of Transportation and
Communications.

2. YES. The reorganization is valid as it was decreed "in the interest of the service"
and "for purposes of economy and more effective coordination of the DOTC
functions in the Cordillera Administrative Region."

As a general rule, a reorganization is carried out in good faith if it is for the

purpose of economy or to make bureaucracy more efficient.

In the case at bar, the reorganization pursued in the case at bar bears the
earmark of good faith. As petitioner points out,22 "tapping the DOTC-CAR
pending the eventual creation of the LTFRB Regional Office is economical in terms
of manpower and resource requirements, thus, reducing expenses from the limited
resources of the government."

Xxx nothing follows xxx