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Larin v. Executive Secretary G.R. No. 112745. October 16, 1997 TORRES, JR., J.

Facts: On September 18, 1992, [1] a decision was rendered by the Sandiganbayan convicting herein petitioner Aquilino T. Larin, Revenue Specific Tax Officer, then Assistant Commisioner of the Bureau of Internal Revenue and his co-accused (except Justino E. Galban, Jr.) of the crimes of violation of Section 268 (4) of the National Internal Revenue Code and Section 3 (e) of R.A. 3019 in Criminal Cases Nos. 14208-14209, entitled People of the Philippines, Plaintiff vs. Aquilino T. Larin, Teodoro T. Pareno, Justino E. Galban, Jr. and Potenciana N. Evangelista, Accused. The fact of petitioners conviction was reported to the President of the Philippines by the then Acting Finance Secretary Leong through a memorandum dated June 4, 1993. Acting by authority of the President, Sr. Deputy Executive Secretary Leonardo A. Quisumbing issued Memorandum Order No. 164 dated August 25, 1993 which provides for the creation of an Executive Committee to investigate the administrative charge against herein petitioner Aquilino T. Larin. Consequently, the Committee directed Larin to respond to the administrative charge leveled against him through a letter dated September 17, 1993. In compliance, Larin submitted a letter dated September 30, 1993 which was addressed to Atty. Frumencio A. Lagustan , the Chairman of the Investigating Committee saying that he cannot comment on the merits of the issues against him for fear of being cited in contempt of Court. Meanwhile, the President issued the challenged Executive order No. 132 dated October 26, 1993 which mandates for the streamlining of the Bureau of Internal Revenue. Under said order, the Excise Tax Service or the Specific Tax Service, of which petitioner was the Assistant Commissioner, was abolished. On October 27, 1993, or one day after the promulgation of Executive Order No.132, the President appointed certain persons as BIR Assistant Commissioners. Consequently, the president, in the assailed Administrative Order No. 101 dated December 2, 1993, found petitioner guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal with forfeiture of his leave credits and retirement benefits including disqualification for reappointment in the government service. Issues: 1. 2. 3. 4. 5. 6. Held: 1. 2. 3.


WON the dismissal of Larin from office is valid. Who has the power to discipline the petitioner?, Were the proceedings taken pursuant to Memorandum Order No. 164 in accord with due process?, What is the effect of petitioners acquittal in the criminal case to his administrative charge? Does the President have the power to reorganize the BIR or to issue the questioned E.O. NO. 132?, Is the reorganization of BIR pursuant to E.O. No. 132 tainted with bad faith?

principle that the power to remove is inherent in the power to appoint conferred to the President by Section 16, Article VII of the Constitution. Thus, it is ineluctably clear that Memorandum Order No. 164, which created a committee to investigate the administrative charge against petitioner, was issued pursuant to the power of removal of the President. This power of removal, however, is not an absolute one which accepts no reservation. It must be pointed out that petitioner is a career service officer. Under the Administrative Code of 1987, career service is characterized by the existence of security of tenure, as contra-distinguished from non-career service whose tenure is co-terminus with that of the appointing or subject to his pleasure, or limited to a period specified by law or to the duration of a particular project for which purpose the employment was made. As a career service officer, petitioner enjoys the right to security of tenure. No less than the 1987 Constitution guarantees the right of security of tenure of the employees of the civil service. Specifically, Section 36 of P.D. No. 807, as amended, otherwise known as Civil Service Decree of the Philippines, is emphatic that career service officers and employees who enjoy security of tenure may be removed only for any of the causes enumerated in said law. In other words, the fact that the petitioner is a presidential appointee does not give the appointing authority the license to remove him at will or at his pleasure for it is an admitted fact that he is likewise a career service officer who under the law is the recipient of tenurial protection, thus, may only be removed for a cause and in accordance with procedural due process. The administrative case against Larin must be dismissed. The criminal cases against petitioner refer to his alleged violation of Section 268 (4) of the National Internal Revenue Code and of section 3(e) of R.A. No.3019 as a consequence of his act of favorably recommending the grant of tax credit to Tanduay Distillery, Inc. However, the conviction of petitioner by the Sandiganbayan was set aside by this court in our decision promulgated on April 17, 1996 in G.R. Nos. 108037-38 and 107119-20. Significantly, the acts which the SC categorically declared to be not unlawful and improper in G.R. Nos. 108037-38 and G.R. Nos. 107119-20 are the very same acts for which petitioner is held to be administratively responsible. Any charge of malfeasance or misfeasance on the part of the petitioner is clearly belied by SCs conclusion in said cases. In the light of this decisive pronouncement, SC sees no reason for the administrative charge to continue - it must, thus, be dismissed The SC is not unaware of the rule that since administrative cases are independent from criminal actions for the same act or omission, the dismissal or acquittal of the criminal charge does not foreclose the institution of administrative action nor carry with it the relief from administrative liability. However, the circumstantial setting of the instant case sets it miles apart from the foregoing rule and placed it well within the exception. Corollarily, where the very basis of the administrative case against petitioner is his conviction in the criminal action which was later on set aside by this court upon a categorical and clear findings that the acts for which he was administratively held liable are not unlawful and irregular, the acquittal of the petitioner in the criminal case necessarily entails the dismissal of the administrative action against him, because in such a case, there is no basis nor justifiable reason to maintain the administrative suit. Yes, the President has the power to issue EO 132 or to reorganize the BIR. Section 48 and 62 of R.A. No. 7645 evidently show that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned. Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states: "Sec.20. Residual Powers. -- Unless Congress provides otherwise, the 1

No, the dismissal of Larin from office is NOT valid. The President has the power to discipline Larin. The proceedings taken pursuant to MO 164 are in accord with due process. The position of the Assistant Commissioner of the BIR is part of the Career Executive Service. Under the law, Career Executive Service officers, namely Undersecretary, Assistant Secretary, Bureau director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board, are all appointed by the President. Concededly, petitioner was appointed as Assistant Commissioner in January, 1987 by then President Aquino. Thus, petitioner is a presidential appointee who belongs to career service of the Civil Service. Being a presidential appointee, he comes under the direct disciplining authority of the President. This is in line with the well settled


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President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law.". Presidential Decree No. 1772 which amended Presidential Decree No. 1416 expressly grants the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. Yes, the reorganization of BIR was made in bad faith. In Dario v. Mison, the SC clarified that as a general rule, a reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. Also, Section 2 of R.A. No. 6656 lists down the circumstances evidencing bad faith in the removal of employees as a result of the reorganization to wit - a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; b) Where an office is abolished and another performing substantially the same functions is created; c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; e) Where the removal violates the order of separation provided in Section 3 hereof." Section 1.1.2 of EO 132. is a clear illustration of the circumstance mentioned in Section 2 (b) of R.A. No. 6656 that an office is abolished and another one performing substantially the same function is created. Another circumstance is the creation of services and divisions in the BIR resulting to a significant increase in the number of positions in the said bureau as contemplated in paragraph (a) of section 2 of R.A. No. 6656. Under Section 1.3 of E.O. No. 132, the Information Systems Group has two newly created Systems Services. Aside from this, six new divisions are also created. Under Section 1.2.1, three more divisions of the Assessment Service are formed. With this newly created offices, there is no doubt that a significant increase of positions will correspondingly follow. Furthermore, it is perceivable that the non-reappointment of the petitioner as Assistant Commissioner violates Section 4 of R.A. No. 6656. Under said provision, officers holding permanent appointments are given preference for appointment to the new positions in the approved staffing pattern comparable to their former position or in case there are not enough comparable positions to positions next lower in rank. It is undeniable that petitioner is a career executive officer who is holding a permanent position. Hence, he should have given preference for appointment in the position of Assistant Commissioner.

FACTS: On March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3, "DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE, PROTECTING THEIR BASIC RIGHTS, ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING FOR AN ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW CONSTITUTION." Among other things, Proclamation No. 3 provided: SECTION 1. The President shall give priority to measures to achieve the mandate of the people to: (a) Completely reorganize the government, eradicate unjust and oppressive structures, and all iniquitous vestiges of the previous regime;

The reorganization process started as early as February 25, 1986, when the President, in her first act in office, called upon "all appointive public officials to submit their courtesy resignations beginning with the members of the Supreme Court." Later on, she abolished the Batasang Pambansa and the positions of Prime Minister and Cabinet under the 1973 Constitution. The President has issued a number of executive orders and directives reorganizing various other government offices, a number of which, with respect to elected local officials, has been challenged in this Court, and two of which, with respect to appointed functionaries, have likewise been questioned herein. On May 28, 1986, the President enacted Executive Order No. 17, "PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE FREEDOM CONSTITUTION." EO No. 17 recognized the "unnecessary anxiety and demoralization among the deserving officials and employees" the ongoing government reorganization had generated, and prescribed as "grounds for the separation/replacement of personnel. On January 30, 1987, the President promulgated Executive Order No. 127, "REORGANIZING THE MINISTRY OF FINANCE." Among other offices, Executive Order No. 127 provided for the reorganization of the Bureau of Customs and prescribed a new staffing pattern therefor. On February 2, 1987, the Filipino people adopted the new Constitution. On January 6, 1988, incumbent Commissioner of Customs Salvador Mison issued a Memorandum, in the nature of "Guidelines on the Implementation of Reorganization Executive Orders," prescribing the procedure in personnel placement. On the same date, Commissioner Mison constituted a Reorganization Appeals Board charged with adjudicating appeals from removals under the aforementioned Memorandum. On January 26, 1988, Commissioner Mison addressed several notices to 394 Customs officials about the implementation of the reorganization program under EO No. 127 and their termination. A number sought reinstatement with the Reorganization Appeals Board, others went to the Civil Service Commission and some came directly to the Court. On June 10, 1988, Republic Act No. 6656, "AN ACT TO PROTECT THE SECURITY OF TENURE OF CIVIL SERVICE OFFICERS AND EMPLOYEES IN THE IMPLEMENTATION OF GOVERNMENT REORGANIZATION," ordering the reinstatement of those separated from their offices in violation of said act. THIS IS PETITION IS A RESOLUTION OF THE SEVEN CONSOLIDATED PETITIONS.

G.R. No. 81954

August 8, 1989

CESAR Z. DARIO, petitioner, vs. HON. SALVADOR M. MISON, HON. VICENTE JAYME and HON. CATALINO MACARAIG, JR., in their respective capacities as Commissioner of Customs, Secretary of Finance, and Executive Secretary, respondents. SARMIENTO, J.:

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On June 30, 1988, the Civil Service Commission promulgated its ruling ordering the reinstatement of the 279 employees, the 279 private respondents in G.R. No. 85310. 2

Commissioner Misons motion for reconsideration before the Commission was denied. Another resolution was executed by the Commission reinstating other 5 employees of the Bureau. As a result, a petition for certiorari before the Court was filed by Mison, with G.R. Nos. 85310 and 86241, respectively. Mison points out that claims of violation of security of tenure are allegedly no defense. In Jose vs. Arroyo: The contention of petitioner that Executive Order No. 127 is violative of the provision of the 1987 Constitution guaranteeing career civil service employees security of tenure overlooks the provisions of Section 16, Article XVIII (Transitory Provisions) which explicitly authorize the removal of career civil service employees "not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution." By virtue of said provision, the reorganization of the Bureau of Customs under Executive Order No. 127 may continue even after the ratification of the Constitution, and career civil service employees may be separated from the service without cause as a result of such reorganization. Mison also argues that EO No. 1, which was meant to implement the Provisional Constitution ceased to be effective upon the ratification of the 1987 Constitution. G.R. No 83737 was filed by the customs examiners, Benedicto Amasa and William Dionisio, appointed by Mison pursuant to the reorganization. G.R. No. 85335 was filed by 35 Customs officials whom the Civil Service Commission has ordered reinstated. They want the Commissioner of Customs to comply with said resolution. G.R. No. 81954 was filed by Cezar Dario, G.R. No. 81967 by Vicente Feria, both Deputy Commissioners of the Bureau of customs. they questioned the legality of their dismiss pursuant to EO No. 17, and their enjoyment of the security of tenure provisions under the 1987 Constitution. They also allege that they were appointed by the President and therefore beyond the control of Mison for purposes of reorganization. The petitioners in G.R. No. 82023, collectors and examiners in venous ports of the Philippines, say, on the other hand, that the purpose of reorganization is to end corruption at the Bureau of Customs and that since there is no finding that they are guilty of corruption, they cannot be validly dismissed from the service. ISSUE: What is the nature and extent of this government reorganization? HELD: There is no question that the administration may validly carry out a government reorganization insofar as these cases are concerned, the reorganization of the Bureau of Customs by mandate not only of the Provisional Constitution, but also of the various Executive Orders decreed by the Chief Executive in her capacity as sole lawmaking authority under the 1986-1987 revolutionary government. It should also be noted that under the present Constitution, there is an implied recognition that a government reorganization may be legitimately undertaken, subject to certain conditions. As we have seen, since 1935, transition periods have been characterized by provisions for "automatic" vacancies. We take the silence of the 1987 Constitution on this matter as a restraint upon the Government to dismiss public servants at a moment's notice. What is, indeed, apparent is the fact that if the present Charter envisioned an "automatic" vacancy, it should have said so in clearer terms, as its 1935, 1973, and 1986 counterparts had so stated. The constitutional "lapse" means either one of two things: (1) The Constitution meant to continue the Admin: Batch 2

reorganization under the prior Charter (of the Revolutionary Government), in the sense that the latter provides for "automatic" vacancies, or (2) It meant to put a stop to those 'automatic" vacancies. By itself, however, it is ambiguous, referring as it does to two stages of reorganization the first, to its conferment or authorization under Proclamation No. 3 (Freedom Charter) and the second, to its implementation on its effectivity date (February 2, 1987) But as we asserted, if the intent of Section 16 of Article XVIII of the 1987 Constitution were to extend the effects of reorganization under the Freedom Constitution, it should have said so in clear terms. It is illogical why it should talk of two phases of reorganization when it could have simply acknowledged the continuing effect of the first reorganization. It Can only mean, then, that whatever reorganization is taking place is upon the authority of the present Charter, and necessarily, upon the mantle of its provisions and safeguards. Hence, it can not be legitimately stated that we are merely continuing what the revolutionary Constitution of the Revolutionary Government had started. We are through with reorganization under the Freedom Constitution the first stage. We are on the second stage that inferred from the provisions of Section 16 of Article XVIII of the permanent basic document. Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else but a separation or removal, is done for political reasons or purposely to defeat sty of tenure, or otherwise not in good faith, no valid "abolition' takes place and whatever "abolition' is done, is void ab initio. There is an invalid "abolition" as where there is merely a change of nomenclature of positions, or where claims of economy are belied by the existence of ample funds. It is to be stressed that by predisposing a reorganization to the yardstick of good faith, we are not, as a consequence, imposing a "cause" for restructuring. Retrenchment in the course of a reorganization in good faith is still removal "not for cause," if by "cause" we refer to "grounds" or conditions that call for disciplinary action. Good faith, as a component of a reorganization under a constitutional regime, is judged from the facts of each case. Lack of good faith of Mison. There is no showing that legitimate structural changes have been made or a reorganization actually undertaken, for that matter at the Bureau since Commissioner Mison assumed office, which would have validly prompted him to hire and fire employees. There can therefore be no actual reorganization to speak of or reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions, but a revamp of personnel pure and simple. The records indeed show that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as of August 18, 1988. This betrays a clear intent to "pack" the Bureau of Customs. The Court disregards the questions raised as to procedure, failure to exhaust administrative remedies, the standing of certain parties to sue, and other technical objections, for two reasons, "because of the demands of public interest, including the need for stability in the public service," and because of the serious implications of these cases on the administration of the Philippine civil service and the rights of public servants. The complaint was filed seasonably, within 30 days from September 23, 1988. Can the judgements of the Civil Service Commission be brought before the Supreme Court thorugh certiorari? YES. Affirming the ruling in Aratuc and comparing the CSC with COMELEC, as under the 1973 charter, any order, decision, or ruling of each Commission may be brought to the SC on certiorari. The jurisdiction is limited to complaints of lack or excess of jurisdiction or grave abuse of discretion tantamount to lack or excess of jurisdiction.

DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN, RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM, RODOLFO DAA, EDGARDO BACLIG, GREGORIO LABAYAN, HILARIO JEREZ, and MARIA CORAZON CUANANG vs. NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA GR NO. 152845. AUGUST 5, 2003 VITUG FACTS: On September 30, 1998, President Joseph Estrada issued EO 29 entitled MANDATING THE STREAMLINING OF THE NATIONAL TOBACCO ADMINISTRATION (NTA), a government agency under the Department of Agriculture. On October 27, 1998, Pres. Estrada issued EO 36, amending EO 29, insofar as the new staffing pattern was concerned, by increasing from 400 to not exceeding 750 the positions affected thereby. In compliance therewith, the NTA prepared and adopted a new Organization Structure and Staffing Pattern (OSSP) which, on October 29, 1998, was submitted to the Office of the President. On November 11, 1998, the rank and file employees of NTA Batac, among whom included herein petitioners, filed a letter-appeal with the Civil Service Commission (CSC) and sought its assistance in recalling the OSSP. On December 04, 1998, the OSSP was approved by the Department of Budget and Management (DBM) subject to certain revision. NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the revised OSSP. The results of the evaluation by the committee on the individual qualifications of applicants to the positions in the new OSSP were then disseminated and posted at the central and provincial offices of the NTA. On June 10, 1996, petitioners, all occupying different positions at NTA Batac, Ilocos Norte, received individual notices of termination of their employment with NTA effective 30 days from receipt thereof. Without immediate relief from their dismissal from service, petitioners filed a petition for certiorari, prohibition and mandamus, with prayer for preliminary mandatory injunction and/or TRO, with RTC Batac and prayed that~ 1. a restraining order be immediately issued enjoining NTA from enforcing the notice of termination and/or from further acts of dispossession and/or ousting the petitioners from their respective offices; 2. a writ of preliminary injunction be issued against NTA to maintain status quo; and 3. the notice of termination of petitioners be declared illegal and the reorganization null and void and their reinstatement with backwages, if applicable, be ordered commanding to desist from further terminating their services and making the injunction permanent.

On September 09, 2000, RTC ordered NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments. On February 28, 2001, NTAs MR was denied. On February 20, 2002, CA reversed the decision. Petitioners went to the SC, which on September 23, 2002, denied their petition for failure to sufficiently show any reversible error on the CAs decision so as to warrant the exercise of the SCs discretionary appellate jurisdiction. Petitioners filed an MR but was denied on January 20, 2002. On February 21, 2003, petitioners submitted a Motion to Admit Petition for En Banc Resolution of the case allegedly to address the legal and constitutional issue~ based on the following grounds:

1. a mere EO issued by the Office of the President and procured by a government functionary would have the effect of a blanket authority to reorganize a bureau, office, or agency attached to various executive departments thereby granting the President of the PH plenary power to reorganize the entire government bureaucracy without the benefit of due deliberation, debate, and discussion of members of the Congress, defeating the right of security of tenure to a career position created by law/statute, and thus allowing an EO to abolish an office created by law; 2. Sec. 4 of EO 245, dated July 24, 1987 issued by the revolutionary government of Pres. Aquino, the law creating the NTA, which provides that the governing body of NTA is the Board of Directors, would be rendered meaningless, ineffective and a dead letter law, thus, reorganization is an ultra vires act of the NTA Administrator; 3. a mere EO would amend, supersede, and/or render ineffective a law or statute. ISSUE: Whether the NTA may be reorganized by an executive fiat, not by legislative action. NOTE: Notwithstanding the apparent procedural lapse on the part of the petitioners to implead the Office of the President as party respondent pursuant to Sec. 7, Rule 3, of the 1997 Revised Rules of Civil Procedure, the SC resolved to rule on the merits of the petition. HELD: YES. Reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The President has the authority to carry out reorganization in any branch or agency of the executive department, what is left for the SC to resolve is whether or not the reorganization is valid. Reorganizations have been regarded as valid provided they are pursued in good faith. Reorganization is carried our in good faith if it is for the purpose of economy or to make bureaucracy more efficient. RA 6656 provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization:

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a. where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; b. where an office is abolished and another performing substantially the same functions is created; c. where incumbents are replaced by those less qualified in terms of status of appointment, performance, and merit; d. where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; and e. where the removal violates the order of separation. The CA found no evidence of bad faith on the part of the NTA~ Firstly, the number of positions in the new staffing pattern did not increase. Rather, it decreased from 1,125 positions to 750. It is thus natural that ones position may be lost through the removal or abolition of an office. Secondly, the petitioners failed to specifically show which offices were abolished and the new ones that were created performing substantially the same functions. Thirdly, the petitioners likewise failed to prove that less qualified employees were appointed to the positions to which they applied. Fourthly, the preference stated in Section 4 of R.A. 6656, only means that old employees should be considered first, but it does not necessarily follow that they should then automatically be appointed. This is because the law does not preclude the infusion of new blood, younger dynamism, or necessary talents into the government service, provided that the acts of the appointing power are bonafide for the best interest of the public service and the person chosen has the needed qualifications. Eos 29 and 36 have not abolished the NTA but merely mandated its reorganization through the streamlining or reduction of its personnel. Art. VII, Sec. 17 of the Constitution expressly grants the President control of all executive departments, bureaus, agencies, and offices which may justify an executive action to inactivate the functions of a particular office or to carry out reorganization measures under a broad authority of law. Sec. 78 of the General Provisions of RA 8522 (General Appropriations Act of FY 1998) has decreed that the President may direct changes in the organization and key positions in any department, bureau, or agency pursuant to Art. VI, Sec. 25 of the Constitution, which grants to the Executive Department the authority to recommend the budget necessary for its operation. Evidently, this grant of power includes the authority to evaluate each and every government agency, including the determination of the most economical and efficient staffing pattern under the Executive Department.

SEC. 31. Continuing Authority of the President to Reorganize his Office. The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may take any of the following actions: (1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Staff Support System, by abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President from other Departments and Agencies; and (3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other departments and agencies. The first sentence of the law is an express grant to the President of a continuing authority to reorganize the administrative structure of the Office of the President. The succeeding numbered paragraphs are not in the nature of provisos that unduly limit the aim and scope of the grant to the President of the power to reorganize but are to be viewed in consonance therewith. Section 31(1) of Executive Order No. 292 specifically refers to the Presidents power to restructure the internal organization of the Office of the President Proper, by abolishing, consolidating or merging units hereof or transferring functions from one unit to another, while Section 31(2) and (3) concern executive offices outside the Office of the President Proper allowing the President to transfer any function under the Office of the President to any other Department or Agency and vice- versa, and the transfer of any agency under the Office of the President to any other department or agency and vice- versa. In the present instance, involving neither an abolition nor transfer of offices, the assailed action is a mere reorganization under the general provisions of the law consisting mainly of streamlining the NTA in the interest of simplicity, economy and efficiency. It is an act well within the authority of President motivated and carried out in good faith. Relative to petitioners Motion for an En Banc Resolution of the Case, the Court En Banc is not an appellate tribunal to which appeals from a Division of the Court may be taken. A Division of the Court is the Supreme Court as fully and veritably as the Court En Banc itself and a decision of its Division is as authoritative and final as a decision of the Court En Banc. Referrals of cases from a Division to the Court En Banc do not take place as just a matter of routine but only on such specified grounds as the Court in its discretion may allow. WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit.

BUKLOD NG KAWANING EIIB, et al v. EXECUTIVE SECRETARY Sec. 31, Book III, Chapter 10, of EO 292 (Administrative Code of 1987) grants the President the power to reorganize the Office of the President and the Office of the President Proper: Admin: Batch 2 Sandoval-Guitierrez, 2001

On June 30, 1987, President Cory Aquino issued EO 127 which established the Economic Intelligence and Investigation Bureau (EIIB) under the Ministry of Finance. EIIB was designated, among others, to gather intel reports on illegal activities that affect the national economy such as economic sabotage, smuggling, tax evasion, and dollar-salting. To prevent possible conflicts among agencies in the course of their anti-smuggling operations, Aquino issued Memorandum Order No. 225 in March 17, 1989, providing that EIIB shall be the agency of PRIMARY RESPONSIBILITY for anti-smuggling operations in all land areas and inland waters and waterways OUTSIDE THE AREAS OF SOLE JURISDICTION OF THE BUREAU OF CUSTOMS. Eleven years after (January 7, 2000), President Estrada issued EO No. 191 which deactivated the EIIB on the ground that the functions of the EIIB are also being performed by other agencies. Meanwhile, Erap issued EO 196 creating the Presidential Anti-Smuggling Taskforce Aduana.On March 29, 2000, Estrada issued EO 223 which provided that all EIIB personnel occupying positions specified therein shall be deemed SEPARATED FROM SERVICE effective April 30, 2000 pursuant to the said reorganization. Petitioners Buklod ng Kawaning EIIB, Cesar Posada, Remedios Princesa, Benjamin Kho, Benigno Manga, Lulu Mendoza thus filed a petition for the judicial review of EOs 191 and 223. Petitioners argue that said EOs are unconstitutional as they: (1) (2) violate their right to security of tenure, are tainted with bad faith as they were not actually intended to make the bureaucracy more efficient but to give way to TF Aduana, the functions of which are essentially and substantially the same as that of EIIB, and constitute an usurpation of the power of Congress decide EIIBs abolition (in short, President has no authority to abolish EIIB).

RULING A. AUTHORITY OF PRESIDENT TO REORGANIZE Organization and abolition are both reorganization measures, but there are distinctions: Deactivate- to render inactive or ineffective or to break up by discharging or reassigning personnel; the office continues to exists, albeit remaining dormant or inoperative Abolish- to do away with, to annul, to abrogate or destroy completely; denotes an intention to do away with the office WHOLLY and PERMANENTLY; the office ceases to exist

General rule: The power to abolish a public office is lodged with the LEGISLATURE. This proceeds from the legal precept that the power to create includes the power to destroy. A public office is either created by the (1) Constitution, (2) by statute, or (3) by authority of law. Thus, except where the office was created by the constitution itself, it may be abolished by the same legislature that brought it into existence. Exception: As far as bureaus, agencies or offices in the executive department are concerned, the Presidents power of control may justify him to inactivate the functions of an office or certain laws may grant him the broad authority to carry out reorganization measures. Legal bases: (1) Section 77 of RA 8745 or the General Appropriations Act (budget) for the fiscal year 1999. Section 77 of the said law provides that UNLESS otherwise provided by law or DIRECTED BY THE PRESIDENT OF THE PHILIPPINES, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures in their respective organizational structures and funded from appropriations provided by this Act. This provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. Section 78, RA 8760: the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to circulas or orders issued for the purpose by the Office of the President. Section 31, Book III of EO 292 (Admin Code of 1987): the president, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency shall have the continuing authority to reorganize the administrative structure of the Office of the President. Canonizado v. Aguirre: reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundanchy of functions. It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the department of Finance. It falls under the OP.Hence, it is subject to the Presidents continuing authority to reorganize.


Arguing in behalf of the respondents, the SolGen maintains that: President enjoys the totality of executive power as provided under Secs 1 and 7 Article 7 of the Constitution and therefore has the authority to issue said EOs Said EOs were issued in the interest of national economy, to avoid duplicity of work and to streamline the functions of the bureaucracy, and the EIIB was not abolished, it was only deactivated


(1) (2)


RULING: *SC first notes procedural flaws: Disregard of hierarchy of courts, non-exhaustion of admin remedies, but deems it necessary to address the issues because it is in the interest of the State that questions re: status and existence of a public office be settled without delay


ISSUE(S) B. A. B. Does the president have the authority to reorganize the executive department? How should the reorganization be carried out? Reorganization is valid provided they are pursued in good faith (if it is for the purpose of economy or to make bureaucracy more efficient). RA 6656 provides for the circumstances which Admin: Batch 2 6 Validity of reorganization

may be evidence of bad faith in the removal of civil service employees as a result of reorganization. Petitioners claim the deactiviation was done in bad faith because four days after deactivation, Estrada crearted TF Aduana. An examination of the pertinent EOs shows that the reorg and creation of TF Aduana were done in good faith. Purpose was not to remove EIIB employees but to achieve economy. The creation of TF Aduana does not entail expense to the government. Crisostomo vs. CA FACTS: Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), having been appointed on July 17, 1974. 2 administrative cases were filed against petitioner for illegal use of government vehicles, misappropriation of construction materials belonging to the college, oppression and harassment, grave misconduct, nepotism and dishonesty. These were filed with the Office of the President, and referred to the Solicitor General for investigation. Charges of violations of R.A. No. 3019, 3 (e) and R.A. No. 992, 20-21 and R.A. No. 733, 14 were likewise filed against him with the Office of Tanodbayan. 3 Informations for violation of Sec 3 (e) of the Anti-Graft and Corrupt Practices Act (RA 3019) were filed against him. It alleged that he appropriated for himself a bahay kubo, which was intended for the College, and construction materials worth P250,000.00, more or less. He was also accused of using a driver of the College as his personal and family driver. He was preventively suspended from office pursuant to R.A. 3019. In his place, Dr. Pablo T. Mateo, Jr. was designated as Acting President on May 13, 1977. On April 1, 1978, P.D. No. 1341 was issued by President Marcos converting PCC into a Polytechnic University. On April 3, 1979, Mateo was appointed Acting President and on March 28, 1980, as President for a term of six years. However, the Circuit Criminal Court of Manila rendered judgment acquitting Crisostomo of the charges against him and ordering his reinstatement. He was also entitled to receive the salaries and benefits which he failed to receive during the suspension. The cases filed before the Tanodbayan were also dismissed on the ground that they had become moot and academic. On the other hand, the administrative cases were dismissed for failure of the complainants to prosecute them. He filed with RTC a motion to execute the judgment of reinstatement and payment of salaries, which was subsequently granted. However, on March 26, 1992, President Aquino appointed Dr. Jaime Gellor as acting president of the PUP, following the expiration of the term of office of Dr. Nemesio Prudente, who had succeeded Dr. Mateo. Crisostomo was one of the five nominees considered by the Aquino for the position. RTC issued another order reiterating said order but when the sheriff executed such, Dr. Gellor did not vacate the office as he wanted to consult with the President first. Gellor and the DECS Secretary Isidro Carino were cited in contempt of court. Crisostomo then assumed the office of president of PUP. Thereafter, People of the Philippines filed a petition for certiorari and prohibition assailing the orders. The CA issued a TRO enjoining Crisostomo to cease and desist from acting as president. The CAs decision set aside the orders and writ of reinstatement issued by RTC and the payment of salaries and benefits was limited to those accruing from his suspension until the conversion of PCC to PUP. The case was then remanded to the RTC for determination of the amounts due. In this petition, Crisostomo argues that PD 1341, which converted the PCC into the PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its existence, it would have specified that the PCC was being abolished rather than converted and that if the PUP was intended to be a new institution, the law would have said it was being created. He claims that PUP is merely a continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as president. Admin: Batch 2

On ruling that PUP and the PCC are not one and the same institution but two different entities and that since Crisostomos term was coterminous with the legal existence of the PCC, his term expired upon the abolition of the PCC, CA took into account the following: a) After Crisostomos suspension, P.D. No. 1341 was issued providing that PUP covers not only PCCs offering of programs in the field of commerce and business administration but also programs in other polytechnic areas. Being a university, PUP was conceived as a bigger institution absorbing the entire PCC. b) The manner of selection and appointment of the university head is substantially different from that provided by the PCC Charter. PUP President shall be appointed by the President upon recommendation of the Secretary of DECS after consultation with the University Board of Regents. The President of PCC was appointed by the President upon recommendation of the Board of Trustees. c) The composition of the new universitys Board of Regents is likewise different from that of the PCC Board of Trustees. The NEDA Director-General, the Secretary of Industry and the Secretary of Labor are members of the PUP Board of Regents. d) That all the properties owned by PCC shall stand transferred to PUP. ISSUE: (1) Whether or not PD 1341 abolished PCC? (2) Whether or not Crisostomo may be reinstated to his position as President? HELD: (1) NO. PD 1341did not abolish, but only changed, the former PCC into what is now the PUP, in the same way that earlier in 1952, RA 778 had converted what was then the Philippine School of Commerce into the Philippine College of Commerce. What took place was a change in academic status of the educational institution, not in its corporate life. Hence, the change in its name, the expansion of its curricular offerings, and the changes in its structure and organization. When the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so. SC cited EO 709 (creating Ministry of Trade and Industry), EO 710 (creating Ministry of Public Works and Highways), RA 6975 (creating National Police Commission and abolishing the existing Philippine ConstabularyIntegrated National Police), all of which explicitly provides the creation of a new office and the abolition of the old one. In contrast, PD1341 expressly provides that PCC is hereby converted into a university to be known as Polytechnic University of the Philippines. The grounds provided by CA are hardly indicia of intent to abolish an existing institution and to create a new one. New course offerings can be added to the curriculum of a school without affecting its legal existence. Nor will changes in its existing structure and organization bring about its abolition and the creation of a new one. Only an express declaration to that effect by the lawmaking authority will. In example, PD 1341 does not state that properties of PCC were being transferred to PUP but only that they stand transferred to it. Stand transferred simply means that lands transferred to the PCC were to be understood as transferred to the PUP as the new name of the institution. (2) NO. Be that as it may, the reinstatement of Crisostomo cannot be ordered because on June 10, 1978, PD 1437 had been promulgated fixing the term of office of presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the President to terminate the terms of incumbents who were not reappointed. In this case, Dr. Mateo who had been acting president of the university since April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that Crisostomos term was cut short. Pursuant to said law, Crisostomo became entitled only to retirement benefits or the payment of separation pay. He must have recognized this fact, which is why in 1992 he asked President Aquino to consider him for appointment to the same position after it had become vacant due to the retirement of Dr. Prudente.

Admin: Batch 2