1

G.R. No. 172027 July 29, 2010

GONZALO S. GO, JR., Petitioner,
vs.
COURT OF APPEALS and OFFICE OF THE PRESIDENT,
Respondents.
D E C I S I O N
VELASCO, JR., J .:
Assailed in this Petition for Certiorari
1
under Rule 65 are the
Resolutions dated August 17, 2005
2
and January 31, 2006
3
of the Court
of Appeals (CA) in CA-G.R. SP No. 90665.
The facts are undisputed.
Petitioner Gonzalo S. Go, Jr. (Go) was appointed in 1980 as Hearing
Officer III of the Board of Transportation (BOT), then the
governments land transportation franchising and regulating agency,
with a salary rate of PhP 16,860 per annum.
4
On June 19, 1987,
Executive Order No. (EO) 202
5
was issued creating, within the
Department of Transportation and Communications (DOTC), the Land
Transportation Franchising and Regulatory Board (LTFRB) to replace
the BOT. The issuance placed the LTFRB under the administrative
control and supervision of the DOTC Secretary.
6

On February 1, 1990, the DOTC Secretary extended Go a promotional
appointment as Chief Hearing Officer (Chief, Legal Division), with a
salary rate of PhP 151,800 per annum.
7
The Civil Service Commission
(CSC) later approved this permanent appointment.
8
In her
Certification
9
dated October 27, 2005, LTFRB Administrative
Division Chief Cynthia G. Angulo stated that the promotion was to the
position of Attorney VI, Salary Grade (SG)-26, obviously following
budgetary circulars allocating SG-26 to division chief positions.
The instant controversy started when the Department of Budget and
Management (DBM), by letter
10
of March 13, 1991, informed the then
DOTC Secretary of the erroneous classification in the Position
Allocation List (PAL) of the DBM of two positions in his department,
one in the LTFRB and, the other, in the Civil Aeronautics Board
(CAB). The error, according to the DBM, stemmed from the fact that
division chief positions in quasi-judicial or regulatory agencies, whose
decisions are immediately appealable to the department secretary
instead of to the court, are entitled only to Attorney V, SG-25
allocation. Pertinently, the DBM letter reads:
Under existing allocation criteria division Chief positions in x x x
department level agencies performing quasi-judicial/regulatory
functions where decisions are appealable to higher courts shall be
allocated to Attorney VI, SG-26. Division chief positions in quasi-
judicial/regulatory agencies lower than departments such as the Civil
Aeronautics Board (CAB) and the Land Transportation
Franchising and Regulatory Board (LTFRB) where decisions are
appealable to the Secretary of the DOTC and then the Office of the
President shall, however be allocated to Attorney V, SG-25.
11

(Emphasis supplied.)
After an exchange of communications between the DBM and the
DOTC, the corresponding changes in position classification with all its
wage implications were implemented, effective as of April 8, 1991.
12

Unable to accept this new development where his position was
allocated the rank of Attorney V, SG-25, Go wrote the DBM to
question the "summary demotion or downgrading [of his salary grade]"
from SG-26 to SG-25. In his protest-letter,
13
Go excepted from the
main reason proferred by the DBM that the decisions or rulings of the
LTFRB are only appealable to the DOTC Secretary under Sec. 6 of EO
202 and not to the CA. As Go argued, the aforecited proviso cannot
prevail over Sec. 9 (3) of Batas Pambansa Blg. (BP) 129, or the
Judiciary Reorganization Act of 1980, under which appeals from
decisions of quasi-judicial bodies are to be made to the CA.
Ruling of the DBM Secretary & Office of the President
On September 14, 1998, the DBM Secretary denied Gos protest,
holding that decisions, orders or resolutions of the LTFRB are
appealable to the DOTC Secretary.
14
The DBM reminded Go that
based on the departments standards and criteria formulated pursuant
to Presidential Decree No. (PD) 985 and Republic Act No. (RA)
6758,
15
the division chief of bureau-level agencies, like the LTFRB, is
allocable to Attorney V, SG-25.
In time, Go sought reconsideration, with the following additional
argument: LTFRB is similarly situated as another bureau-level agency
under DOTC, the CAB, which is listed under Rule 43 of the Rules of
Court as among the quasi-judicial agencies whose decisions or
resolutions are directly appealable to the CA.
Following the denial of his motion for reconsideration, Go appealed to
the Office of the President (OP).
On January 7, 2005, in OP Case No. 99-8880, the OP, agreeing with
the ruling of the DBM and the premises holding it together, rendered a
Decision dismissing Gos appeal.
The OP would subsequently deny Gonzalos motion for
reconsideration.
Undaunted, Go interposed before the CA a petition for review under
Rule 43, his recourse docketed as CA-G.R. SP No. 90665.
Ruling of the Court of Appeals
By Resolution dated August 17, 2005, the appellate court dismissed
the petition on the following procedural grounds: (a) Go resorted to the
wrong mode of appeal, Rule 43 being available only to assail the
decision of a quasi-judicial agency issued in the exercise of its quasi-
judicial functions, as DBM is not a quasi-judicial body; (b) his petition
violated Sec. 6 (a) of Rule 43; and (c) his counsel violated Bar Matter
Nos. 287 and 1132.
Through the equally assailed January 31, 2006 Resolution, the CA
rejected Gos motion for reconsideration.
Hence, the instant petition for certiorari.
The Issues
I
DID RESPONDENT [CA] COMMIT GRAVE ABUSE OF
DISCRETION x x x WHEN IT DISMISSED OUTRIGHT
THE PETITION ON THE GROUND OF ALLEGED
WRONG MODE OF APPEAL THROUGH RULE 43 OF
THE RULES OF COURT

2
BY CLAIMING THAT WHEN RESPONDENT OP,
WHOSE DECISION IN THE EXERCISE OF ITS QUASI-
JUDICIAL POWERS IS APPEALABLE TO THE [CA]
UNDER RULE 43, AFFIRMED THE DECISION OF THE
DBM, IT WAS NOT IN THE EXERCISE OF ITS QUASI-
JUDICIAL POWERS BUT IN THE EXERCISE OF
ADMINISTRATIVE SUPERVISION AND CONTROL
OVER THE DBM AND THEREFORE APPEAL UNDER
RULE 43 CANNOT BE AVAILED OF, FOR
UNWARRANTEDLY READING WHAT IS NOT IN THE
LAW AND NOT BORNE OUT BY THE FACTS OF THE
CASE?
II
DID RESPONDENT [CA] COMMIT GRAVE ABUSE OF
DISCRETION x x x WHEN IT DISMISSED OUTRIGHT
THE PETITION ON THE GROUND OF FAILURE TO
IMPLEAD A PRIVATE RESPONDENT
BY CLAIMING THAT "NO PRIVATE RESPONDENT
IS IMPLEADED IN THE PETITION WHILE
IMPLEADING THE [DBM] AND THE [OP], IN
VIOLATION OF SECTION 6 (A) RULE 43 OF THE
RULES OF COURT, WHEN SAID PROVISION
COULD NOT BE CONSTRUED AS TO HAVE
REQUIRED IMPLEADING A PRIVATE RESPONDENT
IN THE PETITION, IF THERE WAS NONE AT ALL?
III
DID THE [CA] COMMIT GRAVE ABUSE OF
DISCRETION x x x WHEN IT DISMISSED OUTRIGHT
THE PETITION ON THE GROUND OF FAILURE OF
PETITIONERS COUNSEL TO INDICATE CURRENT
IBP AND PTR RECEIPT NOS. AND DATES OF ISSUE
BY CLAIMING THAT "PETITIONERS COUNSEL
HAS NOT INDICATED HIS CURRENT IBP AND PTR
RECEIPT NUMBERS AND DATES OF ISSUE" EVEN
AS IN THE MOTION FOR RECONSIDERATION,
PETITIONER GO EXPLAINED THAT IT WAS AN
HONEST INADVERTENCE AND HE EVEN
ATTACHED THERETO COPIES OF COPIES
THEMSELVES OF THE CURRENT IBP AND PTR
RECEIPTS?
IV
DID RESPONDENT [CA] COMMIT GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT DISMISSED OUTRIGHT THE
PETITION ON TECHNICAL AND FLIMSY GROUNDS
THUS SHIRKING FROM ITS BOUNDEN TASK TO
ADDRESS A VERY PRESSINIG LEGAL ISSUE OF
WHETHER EO 202 SEC. 6, A MERE EXECUTIVE
ORDER, DIRECTING APPEAL TO THE DOTC
SECRETARY SHOULD PREVAIL OVER A LAW, BP
BLG. 129, SEC, 9 (C) AND RULE 43, SEC. 1 DIRECTING
APPEAL TO THE COURT OF APPEALS?
16


The Courts Ruling
There is merit in the petition.
The core issues may be reduced into two, to wit: first, the propriety of
the dismissal by the CA of Gos Rule 43 petition for review on the
stated procedural grounds; and second, the validity of the reallocation
of rank resulting in the downgrading of position and diminution of
salary.
Procedural Issue: Proper Mode of Appeal
As the CA held, Rule 43 is unavailing to Go, the remedy therein being
proper only to seek a review of decisions of quasi-judicial agencies in
the exercise of their quasi-judicial powers. It added that the primarily
assailed action is that of the DBM, which is not a quasi-judicial body.
In turn, thus, the affirmatory OP decision was made in the exercise of
its administrative supervision and control over the DBM, not in the
exercise of its quasi-judicial powers.
The appellate court is correct in ruling that the remedy availed of by
Go is improper but not for the reason it proffered. Both Go and the
appellate court overlooked the fact that the instant case involves
personnel action in the government, i.e., Go is questioning the
reallocation and demotion directed by the DBM which resulted in the
diminution of his benefits. Thus, the proper remedy available to Go is
to question the DBM denial of his protest before the Civil Service
Commission (CSC) which has exclusive jurisdiction over cases
involving personnel actions, and not before the OP. This was our ruling
involving personnel actions in Mantala v. Salvador,
17
cited in Corsiga
v. Defensor
18
and as reiterated in Olanda v. Bugayong.
19
In turn, the
resolution of the CSC may be elevated to the CA under Rule 43 and,
finally, before this Court. Consequently, Go availed himself of the
wrong remedy when he went directly to the CA under Rule 43 without
repairing first to the CSC.
Ordinarily, a dismissal on the ground that the action taken or petition
filed is not the proper remedy under the circumstances dispenses with
the need to address the other issues raised in the case. But this is not a
hard and fast rule, more so when the dismissal triggered by the pursuit
of a wrong course of action does not go into the merits of the case.
Where such technical dismissal otherwise leads to inequitable results,
the appropriate recourse is to resolve the issue concerned on the merits
or resort to the principles of equity. This is as it should be as rules of
procedure ought not operate at all times in a strict, technical sense,
adopted as they were to help secure, not override substantial justice.
20

In clearly meritorious cases, the higher demands of substantial justice
must transcend rigid observance of procedural rules.
Overlooking lapses on procedure on the part of litigants in the interest
of strict justice or equity and the full adjudication of the merits of his
cause or appeal are, in our jurisdiction, matters of judicial policy. And
cases materially similar to the one at bench should invite the Courts
attention to the merits if only to obviate the resulting inequity arising
from the outright denial of the recourse. Here, the dismissal of the
instant petition would be a virtual affirmance, on technicalities, of the
DBMs assailed action, however iniquitous it may be.
Bearing these postulates in mind, the Court, in the greater interest of
justice, hereby disregards the procedural lapses obtaining in this case
and shall proceed to resolve Gos petition on its substantial merits
without further delay. The fact that Gos protest was rejected more than
a decade ago, and considering that only legal questions are presented
in this petition, warrants the immediate exercise by the Court of its
jurisdiction.

3
Core Issue: Summary Reallocation Improper
Contrary to the DBMs posture, Go maintains that the LTFRB
decisions are appealable to the CA pursuant to Sec. 9 (3) of BP 129
and Rule 43 of the Rules of Court. He argues that the grievance
mechanism set forth in Sec. 6 of EO 202 cannot prevail over the appeal
provisos of a statute and remedial law. Go thus asserts that the
summary reallocation of his position and the corresponding salary
grade reassignment, i.e., from Attorney VI, SG-26 to Attorney V, SG-
25, resulting in his demotion and the downgrading of the classification
of his position, are without legal basis.
EO 202 governs appeals from LTFRB Rulings
We understand where Go was coming from since the DBM letter to
the DOTC Secretary implementing the summary reallocation of the
classification of the position of LTFRB Chief of the Legal Division
gave the following to justify the reclassification: the forum, i.e, the
department secretary or the CA, where the appeal of a decision of
division chief or head of the quasi-judicial agency may be taken. The
DBM, joined by the OP, held that LTFRB decisions are appealable to
the DOTC Secretary pursuant to Sec. 6 of EO 202. Therefrom, one
may go to the OP before appealing to the CA.
On this count, we agree with the DBM and the OP. Sec. 6 of EO 202
clearly provides:
Sec. 6. Decision of the Board [LTFRB]; Appeals therefrom and/or
Review thereof. The Board, in the exercise of its powers and functions,
shall sit and render its decisions en banc. x x x
The decision, order or resolution of the Board shall be appealable to
the [DOTC] Secretary within thirty (30) days from receipt of the
decision: Provided, That the Secretary may motu proprio review
any decision or action of the Board before the same becomes final.
(Emphasis supplied.)
As may be deduced from the above provisos, the DOTC, within the
period fixed therein, may, on appeal or motu proprio, review the
LTFRBs rulings. While not expressly stated in Sec. 6 of EO 202, the
DOTC Secretarys decision may, in turn, be further appealed to the
OP. The "plain meaning" or verba legis rule dictates that if the statute
is clear, plain and free from ambiguity, it must be given its literal
meaning and applied without interpretation.
21
Thus, the LTFRB
rulings are not directly appealable to the CA under Rule 43.
Go further contends that EO 202, a mere executive issuance, cannot be
made to prevail over BP 129, Sec. 9 (3), which provides for the appeal
of the decisions and rulings of quasi-judicial agencies to the CA.
Moreover, he points to the 1997 revision of the Rules of Civil
Procedure which now provides under Rule 43 the appeals before the
CA of decisions and rulings of quasi-judicial agencies.
Go is mistaken for the ensuing reasons: First, EO 202 was issued on
June 19, 1987 by then President Corazon C. Aquino pursuant to her
legislative powers under the then revolutionary government. The
legislative power of President Aquino ended on July 27, 1987 when
the first Congress under the 1987 Constitution convened.
22
For all
intents and purposes, therefore, EO 202 has the force and effect of any
legislation passed by Congress.
Second, EO 202, creating the LTRFB, is a special law, thus enjoying
primacy over a conflicting general, anterior law, such as BP 129. In
Vinzons-Chato v. Fortune Tobacco Corporation,
23
the Court
elucidated on this issue in this wise:
A general law and a special law on the same subject are statutes in pari
materia and should, accordingly, be read together and harmonized, if
possible, with a view to giving effect to both. The rule is that where
there are two acts, one of which is special and particular and the other
general which, if standing alone, would include the same matter and
thus conflict with the special act, the special law must prevail since
it evinces the legislative intent more clearly than that of a general
statute and must not be taken as intended to affect the more particular
and specific provisions of the earlier act, unless it is absolutely
necessary so to construe it in order to give its words any meaning at
all. (Emphasis supplied.)
Given the foregoing premises, BP 129 must, on matters of appeals
from LTFRB rulings, yield to the provision of EO 202, the subsequent
special law being regarded as an exception to, or a qualification of, the
prior general act.
24

DBM has authority to allocate classifications of different positions
in the Government service
There is no dispute that the DBM is vested the authority to enforce and
implement PD 985, as amended, which mandates the establishment of
a unified compensation and position classification system for the
government. Sec. 17 (a) of PD 985, as amended by Sec. 14 (a) of RA
6758, and the original Sec. 17 (b) of PD 985 pertinently provide, thus:
Section 17. Powers and Functions. The Budget Commission (now
DBM), principally through the OCPC (now CPCB, Compensation and
Position Classification Board) shall, in addition to those provided
under other Sections of this Decree, have the following powers and
functions:
a. Administer the compensation and position classification system
established herein and revise it as necessary;
b. Define each grade in the salary or wage schedule which shall be used
as a guide in placing positions to their appropriate classes and grades;
Moreover, Secs. 2, 7 and 9 of RA 6758 respectively provide:
Sec. 2. Statement of Policy. It is hereby declared the policy of the
State to provide equal pay for substantially equal work and to base
differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions. x x x
For this purpose, the x x x (DBM) is hereby directed to establish and
administer a unified Compensation and Position Classification
System, hereinafter referred to as the System, as provided for in [PD]
No. 985, as amended, that shall be applied for all government entities,
as mandated by the Constitution.
x x x x
Sec. 7. Salary Schedule. The [DBM] is hereby directed to
implement the Salary Schedule prescribed below:
x x x x
The [DBM] is hereby authorized to determine the officials who are
of equivalent rank to the foregoing Officials, where applicable, and

4
may be assigned the same Salary Grades based on the following
guidelines:
x x x x
Sec. 9. Salary Grade Assignments for Other Positions. For positions
below the Officials mentioned under Section 8 hereof and their
equivalent, whether in the National Government, local government
units, government-owned or controlled corporations or financial
institutions, the [DBM] is hereby directed to prepare the Index of
Occupational Services to be guided by the Benchmark Position
Schedule prescribed hereunder and the following factors: (1) the
education and experience required x x x; (2) the nature and complexity
of the work to be performed; (3) the kind of supervision received; (4)
mental and/or physical strain required x x x; (5) nature and extent of
internal and external relationships; (6) kind of supervision exercised;
(7) decision-making responsibility x x x. (Emphasis supplied.)
And while the Office of Compensation and Position Classification,
now Compensation and Position Classification Board (CPCB), is
vested, under Sec. 8
25
of PD 985, the sole authority to allocate the
classification of positions, its determinations relative to the allocations
require the approval of the DBM Secretary to be binding.
This brings us to the validity of the reallocation.
Summary reallocation illegal
Go argues that the summary reallocation of the classification of his
position as Chief, LTFRB Legal Division to a lower grade
substantially reduced his salary and other benefits, veritably depriving
him of property, hence, illegal.
We agree with Go on this count. The summary reallocation of his
position to a lower degree resulting in the corresponding downgrading
of his salary infringed the policy of non-diminution of pay which the
Court recognized and applied in Philippine Ports Authority v.
Commission on Audit,
26
as well as in the subsequent sister cases
27

involving benefits of government employees. Running through the
gamut of these cases is the holding that the affected government
employees shall continue to receive benefits they were enjoying as
incumbents upon the effectivity of RA 6758.
Relevant to the critical issue at hand is Sec. 15 (b) of PD 985 which,
as amended by Sec. 13 (a) of RA 6758, pertinently reads:
SEC. 13. Pay Adjustments.- x x x
(b) Pay Reduction If an employee is moved from a higher to a
lower class, he shall not suffer a reduction in salary: Provided, That
such movement is not the result of a disciplinary action or voluntary
demotion. (Emphasis supplied.)
Prior to its amendment, Sec. 15 (b) of PD 985 reads:
(b) Pay Reduction If an employee is moved from a higher to a lower
class, he shall not suffer a reduction in salary except where his
current salary is higher than the maximum step of the new class in
which case he shall be paid the maximum: Provided, That such
movement is not the result of a disciplinary action. (Emphasis
supplied.)
As may be noted, the legislature dropped from the original proviso on
pay reduction the clause: "except where his current salary is higher
than the maximum step of the new class in which case he shall be
paid the maximum." The deletion doubtless indicates the legislative
intent of maintaining, in line with the non-diminution principle, the
level or grade of salary enjoyed by an incumbent before the
reallocation to a lower grade or classification is effected. It must be
made absolutely clear at this juncture that Go received his position
classification of Attorney VI and assigned SG-26 upon his promotional
appointment as Chief, LTFRB Legal Division on February 1, 1990, or
after the effectivity of RA 6758. Following the clear mandate of the
aforequoted Sec. 15(b) of PD 985, as amended, Go must not suffer a
reduction in his salary even if there was a reallocation of his position
to a lower grade.
Lest it be overlooked, the transition provisos of RA 6758 provide
additional justification for Gos entitlement to continue receiving the
compensation and emoluments previously granted him upon his
promotion as Chief, LTFRB Legal Division. Go, as an incumbent of
said position before the assailed reallocation was effected ostensibly
through the implementation of RA 6758, the statutes transition
provisions should apply mutatis mutandis to him. The pertinent
provisions are Secs. 12 and 17 of RA 6758, to wit:
Section 12. Consolidation of Allowances and Compensation.All
allowances, except for representation and transportation allowances,
clothing and laundry allowances; x x x and such other additional
compensation not otherwise specified herein as may determined by the
[DBM], shall be deemed included in the standardized salary rates
herein prescribed. Such other additional compensation, whether in
cash or in kind, being received by incumbents only as of July 1, 1989
not integrated into the standardized salary rates shall continue to be
authorized.
x x x x
Section 17. Salaries of Incumbents.Incumbents of positions
presently receiving salaries and additional compensation/fringe
benefits including those absorbed from local government units and
other emoluments, the aggregate of which exceeds the standardized
salary rate as herein prescribed, shall continue to receive such excess
compensation, which shall be referred to as transition allowance. The
transition allowance shall be reduced by the amount of salary
adjustment that the incumbent shall receive in the future.
Pursuant to the principle of non-diminution and consistent with the rule
on the prospective application of laws in the spirit of justice and fair
play,
28
the above provisions are, indeed, meant to protect incumbents
who are receiving salaries and allowances beyond what may be
allowable under RA 6758. It may be that Go was not the occupant of
his present position as of July 1, 1989. Still the positions in the plantilla
of the LTFRB were properly subjected to the standardization under RA
6758. In fact, the matter of excess of salary and benefits in the
application of RA 6758 and PD 985 is a non-issue. What is at issue is
the reallocation of the position from Attorney VI, SG-26 to Attorney
V, SG-25. Obviously, the question of who was sitting as Chief of the
Legal Division as of July 1, 1989 is of no moment. Of particular
significance is the issue of whether the reallocation to a lower degree
is proper given that Go was already enjoying the salary and
emoluments as Attorney VI, SG-26 upon his appointment on February
1, 1990 as Chief, LTFRB Legal Division.
While the DBM is statutorily vested with the authority to reclassify or
allocate positions to their appropriate classes, with the concomitant
authority to formulate allocating policies and criteria for bureau-level
agencies, like the LTFRB, the investiture could not have plausibly

5
included unchecked discretion to implement a reallocation system
offensive to the due process guarantee.
It is recognized that ones employment is a property right within the
purview of the due process clause.1avvphi1 So it was that in Crespo v.
Provincial Board of Nueva Ecija
29
the Court categorically held that
"ones employment, profession, trade or calling is a property right,
and the wrongful interference therewith is an actionable wrong. The
right is considered to be property within the protection of a
constitutional guaranty of due process of law."
30

Per our count, from his promotional appointment as Chief, LTFRB
Legal Division to the time (April 8, 1991) the summary reallocation
was implemented, Go had occupied the position and enjoyed the
corresponding salary and emoluments therefor for one year, two
months and eight days. In this length of time, Gos entitlement to the
benefits appurtenant to the position has well nigh ripened into a vested
right.
As the records show, Go, as Attorney VI, SG-26, was receiving an
annual salary of PhP 151,800. Consequent to the enforcement of the
summary reallocation of his position to Attorney V, SG-25, this was
effectively reduced, reckoned from April 8, 1991, to PhP 136,620,
31
or
a salary reduction of PhP 15,180 a year. These figures of course have
yet to factor in supervening pay adjustments occurring through the
years.
A vested right is one whose existence, effectivity and extent do not
depend upon events foreign to the will of the holder, or to the exercise
of which no obstacle exists, and which is immediate and perfect in
itself and not dependent upon a contingency.
32
The term "vested right"
expresses the concept of present fixed interest which, in right reason
and natural justice, should be protected against arbitrary State action,
or an innately just and imperative right which enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny.
33

To be vested, a right must have become a titlelegal or equitableto
the present or future enjoyment of property.
34

To us, Go has established a clear, equitable vested right to the
emoluments of his position as Attorney VI, SG-26. He continues to
occupyat least up to April 11, 2006 when he filed this petitionthe
position of Chief, LTFRB Legal Division. His title to Attorney VI, SG-
26 is without question, having been legally appointed to the position
on February 1, 1990. And being an incumbent to that position, he has,
at the very least, an equitable right to receive the corresponding salary
and emoluments attached thereto. The summary demotion to a lower
salary grade, with the corresponding decrease in salary and
emoluments after he has occupied his current rank and position, goes
against his right to continue enjoying the benefits accorded the position
and which his predecessors must have been receiving. His right thereto
has ripened into a vested right, of which he could be deprived only by
due process of law, but which we believe he was denied through the
summary reallocation. With the view we take of this case, Go was
neither apprised nor given the opportunity to contest the reallocation
before its summary implementation.
Lest this Decision is taken out of context, the Court wishes to
emphasize that it is not its intention to disturb the reallocation of the
position Chief, LTFRB Legal Division to Attorney V, SG-25.
Accordingly, it behooves the DBM and the LTFRB to enforce the
classification of position of Attorney V, SG-25 to those who will
succeed Go in the said position.
It bears to stress nonetheless that this pro hac vice case disposition is
predicated on the following key considerations: (1) Go was duly
appointed to an office previously classified as a division chief position
with an Attorney VI, SG 26 assignment; (2) under DBM circulars then
obtaining, it would appear that division chief positions carried a SG-
26 classification without the qualification set forth in the DBMs letter
of March 31, 1991. In a real sense, therefore, the present controversy
is attributable to the DBMs failure to incorporate, at the outset, the
necessary clarificatory qualifications/ distinctions in its position and
salary allocation rules/circulars; (3) Gos receipt for some time of the
salary and other emoluments attached to the position was cut short by
the reallocation of the position, resulting in his demotion and
downgrading of salary; and (4) the reallocation was effected by the
DBM in a summary manner.
WHEREFORE, the instant petition is GRANTED. The Resolutions
dated August 17, 2005 and January 31, 2006 of the Court of Appeals
in CA-G.R. SP No. 90665 are hereby REVERSED and SET ASIDE.
The January 7, 2005 Decision and June 28, 2005 Order of the Office
of the President in OP Case No. 99-8880 are likewise REVERSED and
SET ASIDE. Accordingly, the summary reallocation enforced and
implemented on April 8, 1991 is declared NULL and VOID. The
Department of Transportation and Communications is hereby
ORDERED to reinstate Gonzalo S. Go, Jr. to the position of Attorney
VI, SG-26 as the Chief of the Legal Division of the Land
Transportation Franchising and Regulatory Board, with the
corresponding release to him of the differential of all emoluments
reckoned from April 8, 1991.
No pronouncement as to costs.
SO ORDERED.


6


7
G.R. No. 139794 February 27, 2002
MARTIN S. EMIN, petitioner,
vs.
CHAIRMAN CORAZON ALMA G. DE LEON,
COMMISSIONERS THELMA P. GAMINDE and RAMON P.
ERENETA, JR., of the CIVIL SERVICE COMMISSION,
respondents.
D E C I S I O N
QUISUMBING, J .:
This is a petition to review the decision dated October 30, 1998 of the
Court of Appeals in CA-G.R. S.P. No. 46549, affirming Civil Service
Commission Resolution Nos. 96-3342 and 97-4049 finding petitioner
Martin Emin, guilty of dishonesty, grave misconduct and conduct
prejudicial to the best interest of the service, and dismissing him from
the service as Non-Formal Education (NFE) Supervisor of the
Department of Education, Culture and Sports (DECS), Kidapawan,
Cotabato.
The facts are as follows:
Sometime in the year 1991, appointment papers for a change of status
from provisional to permanent under Republic Act No. 6850 of
teachers were submitted to the Civil Service Field Office-Cotabato at
Amas, Kidapawan, Cotabato. Attached to these appointment papers
were photocopies of certificates of eligibility of the teachers.
Director Gantungan U. Kamed noticed that the certificates of
eligibility were of doubtful authenticity. He called the Head Civil
Service Field Officer. While the certificates seemed to be authentic,
the signature of Civil Service Commission Director Elmer R. Bartolata
and the initials of the processors of said certificates were clearly
forgeries. Director Kamed initially forwarded five (5) appointments to
Civil Service Regional Office No. XII for verification of their R.A.
6850 eligibilities and for appropriate action through an indorsement
letter dated September 26, 1991. The appointment papers of the same
nature subsequently submitted to the Field Office were likewise
forwarded to the CSRO No. XII.
Upon verification of the records of CSRO No. XII, it was found that
said applications for civil service eligibility under R.A. 6850 were
disapproved. However, the certificates of eligibility they submitted
were genuine as their control number belonged to the batch issued to
CSRO No. XII by the CSC Central Office. But the records showed that
these certificates were never issued to any one.
Two separate investigations
1
were conducted by Director Cesar P.
Buenaflor of Regional Office No. 12 of the Civil Service Commission
in Cotabato City: (1) on how the R.A. 6850 certificates were
issued/released from the Office, and (2) on how the teachers got said
certificates. The teachers concerned were asked to report to the Office
and bring the original copies of their certificates of eligibility. On
several dates, the teachers appeared and gave their sworn statements
pointing to petitioner as the person who gave them the R.A. 6850
certificates of eligibility they had attached to their appointments for a
fee. Upon finding a prima facie case, petitioner was formally charged
with dishonesty, grave misconduct and conduct prejudicial to the best
interest of the service.
2

In his sworn letter dated April 8, 1992 to the CSC Regional Director,
petitioner denied the accusation.
3
He filed a motion to dismiss, dated
June 5, 1992,
4
but the motion was denied on July 8, 1992.
During the hearing, the six teachers cited in the charge sheet, namely:
Eufrocina Sicam, Ma. Elisa Sarce, Lilia Millondaga, Merla Entiero,
Lourdes Limbaga and Florida P. Alforjas were presented as witnesses
for the prosecution. Felixberta Ocho and Araceli G. Delgado who were
also holders of fake certificates of eligibility were likewise presented
as witnesses.
Alforjas and Delgado identified petitioner and a certain Teddy Cruz as
the persons who facilitated their applications for R.A. 6850 eligibility.
The other witnesses corroborated Alforjas and Delgados testimonies.
They all identified petitioner as the person who helped them obtain the
fake certificates of eligibility.
On June 29, 1994, Director Buenaflor submitted a report
5
to the
Chairman of the Civil Service Commission. The CSC found that there
was sufficient evidence to warrant the conviction of petitioner. On
May 14, 1996, the Civil Service Commission in its resolution decreed:
WHEREFORE, Martin S. Emin is hereby found guilty of Grave
Misconduct. Accordingly, the penalty of dismissal from the service
including all its accessory penalties is imposed upon him.
6

Not satisfied with the abovecited resolution, the petitioner filed a
motion for reconsideration,
7
but it was denied.
On January 16, 1998, petitioner elevated the case to the Court of
Appeals, but it was dismissed for failure to comply with Section 5,
Rule 43 of the 1997 Rules of Civil Procedure.
8

However, the CA granted petitioners motion for reconsideration
9
and
time to amend his petition.
10
In his amended petition, he raised before
the CA the twin issues of (1) whether the CSC had original jurisdiction
over the administrative cases against the public school teachers; and
(2) whether petitioner was accorded due process.
11

Finding the petition unmeritorious, the appellate court ruled on the
appeal, thus:
WHEREFORE, premises considered, the petition (appeal) is
DISMISSED, hereby affirming public respondents assailed appealed
resolutions (Resolution No. 963342, dated May 14,1996; and
Resolution No. 974049, dated October 14, 1997).
SO ORDERED.
12

Petitioner is now before us raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN FINDING THAT THE CIVIL SERVICE
COMMISSION HAS ORIGINAL JURISDICTION OVER
ADMINISTRATIVE CASES AGAINST PUBLIC
SCHOOL TEACHERS.
II. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN NOT FINDING THAT THE PETITIONER
WAS NOT ACCORDED HIS RIGHT TO DUE PROCESS.
III. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN FINDING THAT THERE WAS SUFFICIENT

8
GROUND TO DISMISS THE PETITIONER FROM
SERVICE.
IV. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN NOT ADMITTING THE NEWLY
DISCOVERED EVIDENCE.
13

Notwithstanding petitioners formulation, we find that the issues to be
resolved are: (1) whether or not the CSC has original jurisdiction over
the present case; and (2) whether or not petitioner was accorded due
process.
Petitioner avers that as a teacher, original jurisdiction over the
administrative case against him is lodged with a committee and not
with the CSC, as provided for by Republic Act 4670 otherwise known
as the "Magna Carta for Public School Teacher," specifically, Section
9 thereof, which provides:
Sec. 9. Administrative Charges.- Administrative charges against a
teacher shall be heard initially by a committee composed of the
corresponding School Superintendent of the Division or a duly
authorized representative who should at least have the rank of a
division supervisor, where the teacher belongs, as chairman, a
representative of the local, or, in its absence, any existing provincial or
national teachers organization and a supervisor of the Division, the
last two to be designated by the Director of Public Schools within thirty
days from the termination of the hearings: Provided, however, That
where the school superintendent is the complainant or an interested
party, all the members of the committee shall be appointed by the
Secretary of Education.
For public respondent CSC, the Office of the Solicitor General
maintains that original jurisdiction over the present case is with the
CSC pursuant to the Constitution and P.D. 807 (Civil Service Law)
which provide that the civil service embraces every branch, agency,
subdivision, and instrumentality of the government, including
government-owned or controlled corporations whether performing
governmental or proprietary function.
We find merit in petitioners contention that R.A. 4670 is good law
and is applicable to this case. R.A. 4670 has not been expressly
repealed by the general law P.D. 807, nor has R.A. 4670 been shown
to be inconsistent with the presidential decree.
14
Section 2 thereof
specified those who are covered by the term "teacher" as follows:
SEC. 2. Title Definition. - This Act shall be known as the "Magna
Carta for Public School Teachers" and shall apply to all public school
teachers except those in the professorial staff of state colleges and
universities.
As used in this Act, the term "teacher" shall mean all persons engaged
in classroom teaching, in any level of instruction, on full-time basis,
including guidance counselors, school librarians, industrial arts or
vocational instructors, and all other persons performing supervisory
and/or administrative functions in all schools, colleges and
universities operated by the Government or its political subdivisions;
but shall not include school nurses, school physicians, school dentists,
and other school employees.
Petitioner is the Non-Formal Education Supervisor of the DECS, in
Kidapawan, Cotabato, in-charge of the out-of-school programs.
15
The
1993 Bureau of Non-formal Education Manual
16
outlines the functions
of a NFE Division Supervisor which include, "(5) implementation
of externally assisted NFE programs and projects; (6) monitoring and
evaluation of NFE programs and projects (8) supervision of the
implementation of NFE programs/projects at the grassroots level."
17

Clearly, petitioner falls under the category of "all other persons
performing supervisory and/or administrative functions in all schools,
colleges and universities operated by the government or its political
subdivisions."
Under Section 2 of R.A. 4670, the exclusions in the coverage of the
term "teachers" are limited to: (1) public school teachers in the
professorial staff of state colleges and universities; and (2) school
nurses, school physicians, school dentists, and other school employees
under the category of "medical and dental personnel". Under the
principle of ejusdem generis, general words following an enumeration
of persons or things, by words of a particular and specific meaning, are
not to be construed in their widest extent, but are to be held as applying
only to persons or things of the same kind or class as those specifically
mentioned.
18
Too, the enumeration of persons excluded from the
coverage of the term "teachers" is restricted, limited and exclusive to
the two groups as abovementioned. Where the terms are expressly
limited to certain matters, it may not by interpretation or construction
be extended to other matters.
19
Exclusio unios est inclusio alterius. Had
Congress intended to exclude an NFE Division Supervisor from the
coverage of R.A. 4670, it could have easily done so by clear and
concise language.
As petitioner is covered by R.A. 4670, it is the Investigating
Committee that should have investigated his case conformably with
Section 9 of R.A. 4670, now being implemented by Section 2, Chapter
VII of DECS Order No. 33, S. 1999, otherwise known as the DECS
Rules of Procedure.
20

However, at this late hour, the proceedings conducted by the public
respondent CSC can no longer be nullified on procedural grounds.
Under the principle of estoppel by laches, petitioner is now barred from
impugning the CSCs jurisdiction over his case.
But we must stress that nothing herein should be deemed as overriding
the provision in the Magna Carta for Teachers on the jurisdiction of
the Committee to investigate public school teachers as such, and the
observance of due process in administrative proceedings involving
them, nor modifying prior decided cases of teachers on the observance
of the said Magna Carta such as Fabella vs. Court of Appeals.
21

Here what is crucial, in our view, is that the Civil Service Commission
had afforded petitioner sufficient opportunity to be heard and defend
himself against charges of participation in faking civil service
eligibilities of certain teachers for a fee. Not only did he answer the
charges before the CSC Regional Office but he participated in the
hearings of the charges against him to the extent that we are left with
no doubt that his participation in its proceedings was willful and
voluntary.
As held previously, participation by parties in the administrative
proceedings without raising any objection thereto bars them from
raising any jurisdictional infirmity after an adverse decision is
rendered against them.
22
In the case at bar, petitioner raised the issue
of lack of jurisdiction for the first time in his amended petition for
review
23
before the CA. He did not raise this matter in his Motion to
Dismiss
24
filed before the CSC Regional Office. Notably, in his
Counter-Affidavit, he himself invoked the jurisdiction of the
Commission by stating that he was "open to further investigation by
the CSC to bring light to the matter"
25
and by further praying for "any
remedy or judgment which under the premises are just and
equitable."
26
It is an undesirable practice of a party participating in the
proceedings, submitting his case for decision, and then accepting the
judgment only if favorable, but attacking it for lack of jurisdiction,
when adverse.
27


9
Equally unmeritorious is petitioners contention that he was denied due
process. He avers that he was not allowed cross-examination. It is well
to remember that in administrative proceedings, technical rules of
procedure and evidence are not strictly applied and administrative due
process cannot be fully equated with due process in its strict judicial
sense.
28

Nothing on record shows he asked for cross-examination as most of
the submissions were written. In our view, petitioner cannot argue that
he has been deprived of due process merely because no cross-
examination took place. The rule is well established that due process
is satisfied when the parties are afforded fair and reasonable
opportunity to explain their side of the controversy or given
opportunity to move for a reconsideration of the action or ruling
complained of.
29
In the present case, the record clearly shows that
petitioner not only filed his Counter-Affidavit
30
during the preliminary
investigation, and later his Motion to Dismiss.
31
He also filed a Motion
for Reconsideration
32
of the October 19, 1993 Order of the
Commission. The essence of due process in administrative
proceedings is an opportunity to explain ones side or an opportunity
to seek reconsideration of the action or ruling complained of.
33

Neither is there merit in petitioners assertion that he was denied the
right to due process when the CSC Regional Office, according to him,
acted as investigator, prosecutor, judge and executioner. He laments
that Director Buenaflor who formally filed the charge nominally was
also the hearing officer, and that prosecutor Atty. Anabelle Rosell was
also the one who submitted the recommendation to the CSC for the
dismissal of petitioner. Recall, however, that it was ultimately the Civil
Service Chairman who promulgated the decision. The report submitted
by Atty. Rosell based on the hearing where Director Buenaflor sat as
hearing officer, was merely recommendatory in character to the Civil
Service Commission itself. Such procedure is not unusual in an
administrative proceeding.1wphi1
Petitioner claims that there was no valid case to dismiss him as
Director Elmer Bartolata was not presented to ascertain the alleged
forged signature contained in the questioned certificates of eligibility.
The Court of Appeals and the Civil Service Commission made a
finding on this fact of forgery. It is not this Courts function now to
evaluate factual questions all over again. This is particularly true in
this case, where the Commission and the appellate court agree on the
facts.
34

Lastly, petitioner contends that the affidavit of Teodorico Cruz
35

should have been admitted as newly discovered evidence. Petitioner
raised this issue for the first time on appeal, when he filed his Motion
for New Trial and to Admit Newly Discovered Evidence before the
CA. For a particular piece of evidence to be regarded as "newly
discovered" for purposes of a new trial, it is essential that the offering
party had exercised reasonable diligence in seeking to locate such
evidence before or during trial but had nonetheless failed to secure it.
The OSG
36
observed that despite the knowledge of the importance of
Mr. Cruzs testimony on the matter, petitioner did not ask for a
subpoena duces tecum to obtain said "newly discovered evidence."
Neither did petitioner, on his own, secure said affidavit or testimony
during the proceedings to support his cause. We note too, that the said
affidavit attempts to exonerate the petitioner and Cruz and points to
someone else ("Jing") as the culprit, leaving the impression that the
idea of the affidavit was a mere afterthought, a last ditch effort to clear
petitioners name. Thus, we are not persuaded by petitioners claim of
newly discovered evidence, for it appears to us as a dilatory
contrivance for petitioners benefit.
WHEREFORE, there being no reversible error committed by the
Court of Appeals and the respondent officials of the CSC, the instant
petition is hereby DENIED. The Decision dated October 30, 1998 of
the Court of Appeals in CA-G.R. S.P. No. 46549 is AFFIRMED. Costs
against petitioner.
SO ORDERED.


10


11
G.R. No. 167916 August 26, 2008
SARAH P. AMPONG, petitioner,
vs.
CIVIL SERVICE COMMISSION, CSC-Regional Office No. 11,
respondents.
D E C I S I O N
REYES R.T., J .:
CAN the Civil Service Commission (CSC) properly assume
jurisdiction over administrative proceedings against a judicial
employee involving acts of dishonesty as a teacher, committed prior
to her appointment to the judiciary?
Before Us is a petition for review on certiorari assailing the Decision
1

of the Court of Appeals (CA) affirming the CSCs exercise of
administrative jurisdiction over petitioner.
The Facts
The following facts are uncontroverted:
On November 10, 1991, a Professional Board Examination for
Teachers (PBET)
2
was held in Davao City. A certain Evelyn Junio-
Decir
3
applied for and took the examination at Room 16, Kapitan
Tomas Monteverde Elementary School. She passed with a rating of
74.27%.
4

At the time of the PBET examinations, petitioner Sarah P. Ampong
(nee Navarra) and Decir were public school teachers under the
supervision of the Department of Education, Culture and Sports
(DECS).
5
Later, on August 3, 1993, Ampong transferred to the
Regional Trial Court (RTC) in Alabel, Sarangani Province, where she
was appointed as Court Interpreter III.
On July 5, 1994, a woman representing herself as Evelyn Decir went
to the Civil Service Regional Office (CSRO) No. XI, Davao City, to
claim a copy of her PBET Certificate of Eligibility. During the course
of the transaction, the CSRO personnel noticed that the woman did not
resemble the picture of the examinee in the Picture Seat Plan (PSP).
Upon further probing, it was confirmed that the person claiming the
eligibility was different from the one who took the examinations. It
was petitioner Ampong who took and passed the examinations under
the name Evelyn Decir.
The CSRO conducted a preliminary investigation and determined the
existence of a prima facie case against Decir and Ampong for
Dishonesty, Grave Misconduct and Conduct Prejudicial to the Best
Interest of the Service. On August 23, 1994, they were formally
charged and required to file answers under oath. The formal charge
reads:
That sometime before the conduct of the November 10, 1991
Professional Board Examination for Teachers (PBET), a
certain Ms. Evelyn B. Junio (now Decir) took the said
examination at Rm. 16 Kapitan Tomas Monteverde
Elementary School, Davao City, with a passing rate of
74.27%; That on July 5, 1994 she appeared before the CSC
Region XI Office to get her Guro Certificate; That upon
verification, it was found out that the picture attached in the
Picture Seat Plan, marked as Annex "A" and "A-1,"
respectively, were not the same compared to the picture
attached in the CSC Form 212 of Evelyn Junio-Decir marked
herein as annex "B," "B-1," respectively. There was also a
marked difference in the signatures affixed in the said
annexes; That further investigations revealed that it was the
pictures of Ms. Sarah Navarra, wife of her husbands first
cousin, who took the said examination in behalf of Ms.
Evelyn Junio-Decir, a provisional teacher; That the said act
of Mesdames Decir and Navarra are acts of dishonesty and
conduct prejudicial to the best interest of the service; that in
(sic) taking the CS examination for and in behalf of another
undermines the sanctity of the CS examinations; All these
contrary to existing civil service laws and regulations.
(Emphasis supplied)
In her sworn statement dated November 3, 1994, Decir denied the
charges against her. She reasoned out that it must have been the
examination proctor who pasted the wrong picture on the PSP and that
her signatures were different because she was still signing her maiden
name at the time of the examination. In her Answer, Decir contended
that:
2. The same accusation is denied, the truth being:
a. When I took the Professional Board
Examination for Teachers (PBET) in the year
1991, I handed my 1x1 I.D. picture to the proctor
assigned in the examination room who might have
inadvertently pasted in the Seat Plan [the] wrong
picture instead [of] my own picture;
b. With respect to the marked difference in my
signature both appearing in the aforesaid Seat Plan
and also with the Form 212, the disparity lies in
that in the year 1991, when I took the afroresaid
examination, I was still sporting my maiden name
Evelyn B. Junio in order to coincide with all my
pertinent supporting papers, like the special order
(s.o.), appointment and among others, purposely
to take said communications. However,
immediately after taking the PBET Examination
in 1991, I started using the full name of Evelyn
Junio-Decir.
6

Even before filing an Answer, petitioner Ampong voluntarily appeared
at the CSRO on February 2, 1995 and admitted to the wrongdoing.
When reminded that she may avail herself of the services of counsel,
petitioner voluntarily waived said right.
On March 13, 1995, petitioner gave another admission in the following
tenor:
Q: Now, what is then your intention in coming to this
Region inasmuch as you are still intending to file an answer
to the formal charge?
A: I came here because I want to admit personally. So that
I will not be coming here anymore. I will submit my case for
Resolution.
Q: So, you intend to waive your right for the formal
hearing and you also admit orally on the guilt of the charge
on the Formal Charge dated August 24, 1994?
A: Yes, Maam.

12
Q: What else do you want to tell the Commission?
A: x x x Inasmuch as I am already remorseful, I am
repenting of the wrong that I have done. I am hoping that the
Commission can help x x x so that I will be given or granted
another chance to serve the government.
x x x x
Q: Now inasmuch as you have declared that you have
admitted the guilt that you took the examination for and in
behalf of Evelyn Junio Decir, are you telling this to the
Commission without the assistance of the counsel or waiver
of your right to be assisted by counsel.
A: Yes, Maam. I am waiving my right.
7
(Emphasis
supplied)
Petitioner reiterated her admission in her sworn Answer dated March
16, 1995:
3. That, during the commission of the act, I was still under
the Department of Education, Culture and Sports, as Teacher
in-charge of San Miguel Primary School, Malungon North
District, way back in 1991, when the husband of Evelyn
Junio-Decir, my husbands cousin came to me and
persuaded me to take the examination in behalf of his wife to
which I disagreed but he earnestly begged so that I was
convinced to agree because I pity his wife considering that
she is an immediate relative, and there was no monetary
consideration involved in this neither a compensatory
reward for me, as I was overcome by their persuasion;
4. That, despite the fact that I was a teacher, I was not aware
that the acts I was charged, is a ground for disciplinary action
and punishable by dismissal;
5. That I should not have conformed to this anomalous
transaction considering that I was born in a Christian family,
and was brought up in the fear of Lord, and had been a
consistent officer of the Church Board, had been a religious
leader for so many years, and had been the organizer of the
Music Festival of the Association of Evangelical Churches
of Malungon, Sarangani Province, thus I was devoted to
church work and was known to be of good conduct; and that
my friends and acquaintances can vouch to that, but I was
just forced by circumstances to agree to the spouses Godfre
and Evelyn Decir.
8
(Emphasis added)
CSC Finding and Penalty
On March 21, 1996, the CSC found petitioner Ampong and Decir
guilty of dishonesty, dismissing them from the service. The dispositive
part of the CSC resolution states:
WHEREFORE, the Commission hereby finds Evelyn J.
Decir and Sarah P. Navarra guilty of Dishonesty.
Accordingly, they are meted the penalty of dismissal with all
its accessory penalties. The PBET rating of Decir is
revoked.
9

Petitioner moved for reconsideration, raising for the first time the issue
of jurisdiction.
10
She argued that the exclusive authority to discipline
employees of the judiciary lies with the Supreme Court; that the CSC
acted with abuse of discretion when it continued to exercise
jurisdiction despite her assumption of duty as a judicial employee. She
contended that at the time the case was instituted on August 23, 1994,
the CSC already lost jurisdiction over her. She was appointed as
Interpreter III of the RTC, Branch 38, Alabel, Sarangani Province on
August 3, 1993.
The CSC denied the motion for reconsideration.
11
According to the
Commission, to allow petitioner to evade administrative liability
would be a mockery of the countrys administrative disciplinary
system. It will open the floodgates for others to escape prosecution by
the mere expedient of joining another branch of government. In
upholding its jurisdiction over petitioner, the CSC differentiated
between administrative supervision exercised by the Supreme Court
and administrative jurisdiction granted to the Commission over all
civil service employees:
Moreover, it must be pointed out that administrative
supervision is distinct from administrative jurisdiction.
While it is true that this Commission does not have
administrative supervision over employees in the judiciary,
it definitely has concurrent jurisdiction over them. Such
jurisdiction was conferred upon the Civil Service
Commission pursuant to existing law specifically Section
12(11), Chapter 3, Book V of the Administrative Code of
1987 (Executive Order No. 292) which provides as follows:
"(11) Hear and decide administrative cases
instituted by or through it directly or on appeal,
including contested appointment, and review
decisions and actions of its offices and of the
agencies attached to it x x x."
The fact that court personnel are under the administrative
supervision of the Supreme Court does not totally isolate
them from the operations of the Civil Service Law.
Appointments of all officials and employees in the judiciary
is governed by the Civil Service Law (Section 5(6), Article
VIII, 1987 Constitution). (Emphasis supplied)
CA Disposition
Via petition for review under Rule 43, petitioner elevated the matter to
the CA.
12
She insisted that as a judicial employee, it is the Supreme
Court and not the CSC that has disciplinary jurisdiction over her.
In a Decision dated November 30, 2004,
13
the CA denied the petition
for lack of merit.
The CA noted that petitioner never raised the issue of jurisdiction until
after the CSC ruled against her. Rather, she willingly appeared before
the commission, freely admitted her wrongdoing, and even requested
for clemency. Thus, she was estopped from questioning the
Commissions jurisdiction. The appellate court opined that while lack
of jurisdiction may be assailed at any stage, a partys active
participation in the proceedings before a court, tribunal or body will
estop such party from assailing its jurisdiction.
The CA further ruled that a member of the judiciary may be under the
jurisdiction of two different bodies. As a public school teacher or a
court interpreter, petitioner was part of the civil service, subject to its
rules and regulations. When she committed acts in violation of the
Civil Service Law, the CSC was clothed with administrative
jurisdiction over her.

13
Issue
Petitioner, through this petition, assigns the lone error that:
The Honorable Court of Appeals-First Division decided a
question of substance in a way not in accord with law and
jurisprudence, gravely erred in facts and in law, and has
sanctioned such departure and grave error because it
ignored or was not aware of Garcia v. De la Pea, 229
SCRA 766 (1994) and Adm. Matter No. OCA I.P.I. 97-329-
P (CSC v. Ampong) dated January 31, 2001, which reiterate
the rule that exclusive authority to discipline employees
of the judiciary lies with the Supreme Court, in issuing
the questioned decision and resolution; which grave error
warrant reversal of the questioned decision and resolution.
14

Put simply, the issue boils down to whether the CSC has administrative
jurisdiction over an employee of the Judiciary for acts committed while
said employee was still with the Executive or Education Department.
Our Ruling
The answer to the question at the outset is in the negative but We rule
against the petition on the ground of estoppel.
It is true that the CSC has administrative jurisdiction over the civil
service. As defined under the Constitution and the Administrative
Code, the civil service embraces every branch, agency, subdivision,
and instrumentality of the government, and government-owned or
controlled corporations.
15
Pursuant to its administrative authority, the
CSC is granted the power to "control, supervise, and coordinate the
Civil Service examinations."
16
This authority grants to the CSC the
right to take cognizance of any irregularity or anomaly connected with
the examinations.
17

However, the Constitution provides that the Supreme Court is
given exclusive administrative supervision over all courts and
judicial personnel.
18
By virtue of this power, it is only the Supreme
Court that can oversee the judges and court personnels compliance
with all laws, rules and regulations. It may take the proper
administrative action against them if they commit any violation. No
other branch of government may intrude into this power, without
running afoul of the doctrine of separation of powers.
19
Thus, this
Court ruled that the Ombudsman cannot justify its investigation of a
judge on the powers granted to it by the Constitution. It violates the
specific mandate of the Constitution granting to the Supreme Court
supervisory powers over all courts and their personnel; it undermines
the independence of the judiciary.
20

In Civil Service Commission v. Sta. Ana,
21
this Court held that
impersonating an examinee of a civil service examination is an act of
dishonesty. But because the offender involved a judicial employee
under the administrative supervision of the Supreme Court, the CSC
filed the necessary charges before the Office of the Court
Administrator (OCA), a procedure which this Court validated.
A similar fate befell judicial personnel in Bartolata v. Julaton,
22

involving judicial employees who also impersonated civil service
examinees. As in Sta. Ana, the CSC likewise filed the necessary
charges before the OCA because respondents were judicial employees.
Finding respondents guilty of dishonesty and meting the penalty of
dismissal, this Court held that "respondents machinations reflect their
dishonesty and lack of integrity, rendering them unfit to maintain their
positions as public servants and employees of the judiciary."
23

Compared to Sta. Ana and Bartolata, the present case involves a
similar violation of the Civil Service Law by a judicial employee. But
this case is slightly different in that petitioner committed the offense
before her appointment to the judicial branch. At the time of
commission, petitioner was a public school teacher under the
administrative supervision of the DECS and, in taking the civil service
examinations, under the CSC. Petitioner surreptitiously took the CSC-
supervised PBET exam in place of another person. When she did that,
she became a party to cheating or dishonesty in a civil service-
supervised examination.
That she committed the dishonest act before she joined the RTC does
not take her case out of the administrative reach of the Supreme Court.
The bottom line is administrative jurisdiction over a court
employee belongs to the Supreme Court, regardless of whether the
offense was committed before or after employment in the
judiciary.
Indeed, the standard procedure is for the CSC to bring its complaint
against a judicial employee before the OCA. Records show that the
CSC did not adhere to this procedure in the present case.
However, We are constrained to uphold the ruling of the CSC based
on the principle of estoppel. The previous actions of petitioner have
estopped her from attacking the jurisdiction of the CSC. A party who
has affirmed and invoked the jurisdiction of a court or tribunal
exercising quasi-judicial functions to secure an affirmative relief may
not afterwards deny that same jurisdiction to escape a penalty.
24
As
this Court declared in Aquino v. Court of Appeals:
25

In the interest of sound administration of justice, such
practice cannot be tolerated. If we are to sanction this
argument, then all the proceedings had before the lower
court and the Court of Appeals while valid in all other
respects would simply become useless.
26

Under the principle of estoppel, a party may not be permitted to adopt
a different theory on appeal to impugn the courts jurisdiction.
27
In
Emin v. De Leon,
28
this Court sustained the exercise of jurisdiction by
the CSC, while recognizing at the same time that original disciplinary
jurisdiction over public school teachers belongs to the appropriate
committee created for the purpose as provided for under the Magna
Carta for Public School Teachers.
29
It was there held that a party who
fully participated in the proceedings before the CSC and was accorded
due process is estopped from subsequently attacking its jurisdiction.
Petitioner was given ample opportunity to present her side and adduce
evidence in her defense before the CSC. She filed with it her answer
to the charges leveled against her. When the CSC found her guilty, she
moved for a reconsideration of the ruling. These circumstances all too
clearly show that due process was accorded to petitioner.
Petitioners admission of guilt stands. Apart from her full
participation in the proceedings before the CSC, petitioner admitted to
the offense charged that she impersonated Decir and took the PBET
exam in the latters place. We note that even before petitioner filed a
written answer, she voluntarily went to the CSC Regional Office and
admitted to the charges against her. In the same breath, she waived her
right to the assistance of counsel. Her admission, among others, led the
CSC to find her guilty of dishonesty, meting out to her the penalty of
dismissal.
Now, she assails said confession, arguing that it was given without aid
of counsel. In police custodial investigations, the assistance of counsel

14
is necessary in order for an extra-judicial confession to be made
admissible in evidence against the accused in a criminal complaint. If
assistance was waived, the waiver should have been made with the
assistance of counsel.
30

But while a partys right to the assistance of counsel is sacred in
proceedings criminal in nature, there is no such requirement in
administrative proceedings. In Lumiqued v. Exevea,
31
this Court ruled
that a party in an administrative inquiry may or may not be assisted by
counsel. Moreover, the administrative body is under no duty to provide
the person with counsel because assistance of counsel is not an
absolute requirement.
32

Petitioners admission was given freely. There was no compulsion,
threat or intimidation. As found by the CSC, petitioners admission
was substantial enough to support a finding of guilt.
The CSC found petitioner guilty of dishonesty. It is categorized as "an
act which includes the procurement and/or use of fake/spurious civil
service eligibility, the giving of assistance to ensure the commission or
procurement of the same, cheating, collusion, impersonation, or any
other anomalous act which amounts to any violation of the Civil
Service examination."
33
Petitioner impersonated Decir in the PBET
exam, to ensure that the latter would obtain a passing mark. By
intentionally practicing a deception to secure a passing mark, their acts
undeniably involve dishonesty.
34

This Court has defined dishonesty as the "(d)isposition to lie, cheat,
deceive, or defraud; untrustworthiness; lack of integrity; lack of
honesty, probity or integrity in principle; lack of fairness and
straightforwardness; disposition to defraud, deceive or betray."
35

Petitioners dishonest act as a civil servant renders her unfit to be a
judicial employee. Indeed, We take note that petitioner should not have
been appointed as a judicial employee had this Court been made aware
of the cheating that she committed in the civil service examinations.
Be that as it may, petitioners present status as a judicial employee is
not a hindrance to her getting the penalty she deserves.
The conduct and behavior of everyone connected with an office
charged with the dispensation of justice is circumscribed with a heavy
burden or responsibility. The image of a court, as a true temple of
justice, is mirrored in the conduct, official or otherwise, of the men and
women who work thereat, from the judge to the least and lowest of its
personnel.
36
As the Court held in another administrative case for
dishonesty:
x x x Any act which diminishes or tends to diminish the faith
of the people in the judiciary shall not be countenanced. We
have not hesitated to impose the utmost penalty of dismissal
for even the slightest breach of duty by, and the slightest
irregularity in the conduct of, said officers and employees, if
so warranted. Such breach and irregularity detract from the
dignity of the highest court of the land and erode the faith of
the people in the judiciary.
x x x x
As a final point, we take this opportunity to emphasize that
no quibbling, much less hesitation or circumvention, on the
part of any employee to follow and conform to the rules and
regulations enunciated by this Court and the Commission on
Civil Service, should be tolerated. The Court, therefore, will
not hesitate to rid its ranks of undesirables who undermine
its efforts toward an effective and efficient system of
justice.
37
(Emphasis added)
We will not tolerate dishonesty for the Judiciary expects the best from
all its employees.
38
Hindi namin papayagan ang pandaraya sapagkat
inaasahan ng Hudikatura ang pinakamabuti sa lahat nitong kawani.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.


15
G.R. No. 168670 April 13, 2007
OFFICE OF THE OMBUDSMAN, Petitioner,
vs.
HEIDI M. ESTANDARTE andTHE COURT OF APPEALS,
TWENTIETH DIVISION, Respondents.
D E C I S I O N
CALLEJO, SR., J .:
Before the Court is a Petition for Review of the Decision
1
of the Court
of Appeals (CA) in CA-G.R. SP No. 85585 dated June 14, 2005 which
set aside the decision of the Office of the Ombudsman (Visayas)
finding respondent Heidi M. Estandarte guilty of grave misconduct.
The antecedents are as follows:
On August 17, 1998, Peoples Graftwatch, through its Chairman, Dr.
Patricio Y. Tan, referred to the Office of the Ombudsman (Visayas),
for immediate investigation, a complaint of the Faculty Club and
Department Heads of the Ramon Torres National High School
(hereinafter the Faculty Club) against Heidi Estandarte, the school
principal. The complaint consisted of 33 allegations of improprieties
ranging from illegal handling of school funds, irregular financial
transactions, perjury, and abuse of authority.
2
However, the complaint
was not subscribed and sworn to by the complainant, and not supported
by the sworn statements of witnesses. The complaint also lacked a
statement of non-forum shopping as required under CSC Resolution
No. 95-3099 dated May 9, 1995.
3
The Ombudsman (Visayas) treated
the matter as a request for assistance, and docketed the complaint as
RAS-VIS 98-1030.
On August 31, 1998, the Ombudsman forwarded the complaint to the
Department of Education, Culture and Sports Regional Office VI
(DECS-Region VI) and the Commission on Audit (COA) for
appropriate action pursuant to Section 15(2) of Republic Act No. 6770,
otherwise known as the Ombudsman Act of 1989.
4
On September 29,
1998, the DECS-Region VI found that the complaint did not comply
with the formalities under Executive Order No. 292, otherwise known
as The Administrative Code of 1987. Thus, it dismissed the complaint,
without prejudice to the filing of an appropriate one.
Undaunted, the Faculty Club filed a formal complaint sworn and
subscribed to by the complainants with DECS-Region VI on
February 5, 1999.
5
However, in a letter
6
dated February 12, 1999, the
said office dismissed the complaint outright for lack of verification and
certification against forum shopping.
On March 22, 1999, the DECS-Region VI received the requisite
verification and certification.
7
This case was entitled "Faculty and
Department Heads of the Ramon Torres National High School, Bago
City v. Heidi Estandarte."
On April 19, 1999, the DECS-Region VI required Estandarte to answer
the charges in writing.
8
Estandarte filed her answer to the complaint on
June 7, 1999.
9
Thereafter, a Special Investigating Committee was
created to hear the case; DECS-Region VI approved the composition
of the Committee in a 1st Indorsement dated July 26, 1999.
10
The
Committee issued a subpoena duces tecum addressed to the State
Auditor assigned to the case, requiring him to produce the original
copies of certain documents. The State Auditor, however, replied that
he could not comply with the subpoena because the documents are
being used by the Ombudsman (Visayas) in the criminal and
administrative cases pending before it which concerned the same
parties.
11

On September 17, 1999, the Committee held a pre-hearing
conference.
12
It issued a 1st Indorsement on December 6, 1999,
recommending the dismissal of the case on the ground of forum
shopping.
Meanwhile, the COA referred the complaint against Estandarte to the
Provincial Auditor for the Province of Negros Occidental, Crispin A.
Pinaga, Jr. Pursuant thereto, Pinaga conducted an investigation and
submitted his report to the Ombudsman (Visayas). He found that
Estandartes actions in connection with 24 of the 33 allegations in the
complaint were "within the bounds of propriety."
13
The Provincial
Auditor made the following findings:
Complaint No. 2 - The collections of miscellaneous fee of Ten Pesos
(P10.00) (Annex II) per student upon enrolment which was not
authorized by DECS.
As explained by the principal in her letter dated June 8, 1998, this
practice had been going on when she assumed thereat and the same has
the implied permission of the PTA (Annex III).
Finding:
The imposition of this miscellaneous fee of Ten Pesos (P10.00) is in
violation of DECS Order No. 27 s. 1995 dated May 24, 1995 (Annex
IV).
Complaint 19 & 24
The principal, Miss Heidi M. Estandarte bought the .38 Caliber
Handgun and Shotgun which she registered under her name, which
should not be done so because the money she used to purchase said
firearm came from the student government fund.
Finding:
The firearms as alleged by the principal were intended for the use of
the security guard of the school. However, the arm dealer had secured
the licenses of the firearms in the name of the principal. These firearms
had been turned-over to the School Supply Officer (Annex V).
Representations had been made for the transfer of the license to the
school, Ramon Torres National High School (Annex VI-A).
Complaint 21 & 31
She sold, kept and disbursed the income of the old newspaper with no
accounting by the COA since 1994.
Complaint 23 & 25
The principal Ms. Estandarte accepted cash and in kind donations
without being properly channeled and accounted first by the property
custodian and the cash without first [being] deposited in the Trust
Fund.
Finding:
Cash donations as acknowledged by Ms. Heidi Estandarte are as
follows:

16
Source Amount
Mrs. Ma. Belen J. Elizalde
(not Phil-Am Life) (Annex VI) P 10,000.00
Coca Cola Bottlers (Annex VIII) 100,000.00
Mr. Kojima (Annex IX) 53,400.00
Sales Old Newspaper (Annex X) 3,949.00
T o t a l

P167,349.00
===========
The donations and the proceeds from the sale of old newspaper were
personally received and disbursed by Ms. Estandarte. However, these
amounts were not acknowledged through the issuance of official
receipts. Hence the donations were not taken up in the book of accounts
of the school. Further these amounts were disbursed personally by the
principal Ms. Heidi Estandarte who acted as the procurement and
disbursing officer at the same time and in violation of the applicable
law which provides to wit:
Section 63, PD 1445
Accounting for Moneys and Property received by public officials
Except as may otherwise be specifically provided by law or competent
authority all moneys and property officially received by a public office
in any capacity or upon any occasion must be accounted for as
government funds and government property. Government property
should be taken up in the books of the agency concerned at acquisition
cost or an appraised value.
Section 68 PD 1445
Issuance of Official Receipt (1) No payment of any nature shall be
received by a collecting officer without immediately issuing an official
receipt in acknowledgment thereof. The receipt may be in the form of
postage, internal revenue or documentary stamps and the like, or
officially numbered receipts, subject to proper custody, accountability
and audit.
Section 112 PD 1445
Recording of financial transactions Each government agency shall
record its financial transactions and operation conformably with
generally accepted accounting principles and in accordance with
pertinent laws and regulations.
In view of the foregoing findings of the Auditor, the Ombudsman
(Visayas) issued the Memorandum dated October 8, 1999, with the
following recommendation:
1.) This RAS be upgraded to criminal and administrative
cases against Ms. Estandarte;
2.) Provincial Auditor Crispin Pinaga, Jr. be required to
submit (his) Affidavit/s or sworn statement/s in order to
substantiate his findings. The same is true with respect to the
complaints;
3.) Upon receipt of the Affidavits of Provincial Auditor
Pinaga, Jr. and the complainants, a preventive suspension
order be issued against respondent Estandarte for a period as
may be warranted under the circumstance, to be determined
and recommended by the investigator to whom the
administrative case may be assigned; and
4.) RAS-VIS-98-1030 be considered closed and
terminated.
14

The Ombudsman (Visayas) decided to refer the administrative aspect
of the case (OMB-VIS-ADM-99-0941, entitled "COA Region 6,
Office of the Provincial Auditor v. Heidi Estandarte") to the DECS-
Region VI for administrative adjudication pursuant to Section 23(2) of
Rep. Act No. 6770. The complete records of the case were forwarded
to the DECS-Region VI in a letter dated November 29, 1999.
15

It appeared, however, that the DECS-Region VI did not receive this
referral because on December 7, 1999, it inquired on the status of RAS-
VIS-98-1030 from the Ombudsman (Visayas).
16
On March 9, 2000,
the Ombudsman (Visayas) inquired about the progress of the case from
the DECS-Region VI,
17
and when it did not receive an answer, it sent
another letter-inquiry on September 21, 2000.
18
Finally, on November
22, 2000, the Ombudsman (Visayas) received a letter from the DECS-
Region VI informing it that the latter did not receive any referral
concerning the case.
19
Hence, the Ombudsman (Visayas) again
forwarded the records of the case to the DECS-Region VI, which
received them on December 26, 2000.
20

The DECS-Region VI directed the consolidation of this case (COA
Region 6, Office of the Provincial Auditor v. Heidi Estandarte) with
the case pending before it (Faculty and Department Heads of the
Ramon Torres National High School, Bago City v. Heidi Estandarte).
21

Thereafter, the hearing of the case by the Special Investigating
Committee resumed.
In view of the referral to DECS-Region VI, the Ombudsman (Visayas)
considered OMB-VIS-ADM-99-0941 closed and terminated in its
Memorandum of November 27, 2001.
22

In a letter
23
dated April 29, 2002, the Faculty Club requested the
Ombudsman (Visayas) to take over the case for speedier disposition.
Ms. Lucia Jane Grecia, a member of the Faculty Club, also wrote a
letter to the Ombudsman (Visayas) complaining that she was being
oppressed by Estandarte. She likewise requested the Ombudsman
(Visayas) to take over the case. Consequently, on July 5, 2002, the
Ombudsman (Visayas) informed the DECS-Region VI that it would
not object if the case is returned to it.
24

On August 16, 2002, DECS-Region VI turned over the records of the
case to the Ombudsman (Visayas) for adjudication, stating that "[i]t is
the impression of this Office that the complainants intend that their
case be heard by the Office of the Ombudsman and that Office had also
manifested its willingness to reassume jurisdiction of the same."
25
The
case was docketed as OMB-V-A-02-0572-J.
On November 6, 2002, the Ombudsman (Visayas) set the case for
preliminary conference.
26
In the meantime, Estandarte filed an Urgent
Motion to Remand
27
the case to the DECS-Region VI on the ground
that jurisdiction is now exclusively vested on the latter. On December
17, 2002, the Ombudsman (Visayas) denied the motion ratiocinating
that it was not barred from assuming jurisdiction over the complaint
after the DECS-Region VI had relinquished its jurisdiction over the
same.
28
Estandarte filed a motion for reconsideration of said Order,
which was later denied by the Ombudsman (Visayas).
29

The preliminary conference was set on May 21, 2003. On the said date,
only the counsel of COA was present. The Ombudsman (Visayas),

17
therefore, issued an Order stating that in view of Estandartes failure
to attend the scheduled hearing, she is deemed to have waived her right
to a formal investigation unless she is able to justify her absence. In an
Urgent Motion for Postponement,
30
Estandartes counsel explained
that he was due to attend a hearing in another court on the scheduled
day of the hearing. He manifested that they intended to challenge the
Ombudsmans order denying the motion to remand the case to the
DECS-Region VI through a petition for certiorari. In its Order
31
dated
July 24, 2003, the Ombudsman reset the preliminary conference to July
30, 2003.
On July 21, 2003, Estandarte filed a Motion to Suspend Proceedings
on the ground that she filed a petition for review on certiorari with the
CA assailing the order denying her motion to remand the case to the
DECS-Region VI. The Ombudsman denied the motion.
32

On July 29, 2003 Estandarte filed an Urgent Motion for
Postponement
33
of the hearing scheduled the following day, and a
Motion for Reconsideration with Motion for Voluntary Inhibition,
assailing the denial of her motion to suspend the proceedings.
However, due to her failure to furnish the complainants with a copy of
the motion to postpone, the Ombudsman (Visayas) proceeded with the
preliminary conference with only the complainants present.
Thereafter, the case was submitted for resolution.
34

In a Decision dated March 9, 2004, the Ombudsman (Visayas) found
Estandarte guilty of grave misconduct, thus:
WHEREFORE, premises considered, respondent Heidi Estandarte,
Principal, Ramon Torres National High School, Bago City, Negros
Occidental, is hereby found guilty of Grave Misconduct, and is meted
the penalty of Dismissal from Service, with perpetual disqualification
to hold public office and forfeiture of all benefits and cancellation of
Civil Service eligibilities.
35

The Ombudsman (Visayas) held that Estandartes failure to issue
receipts for the donations received in violation of Sections 63, 68, and
112 of Presidential Decree (PD) No. 1445, as well as "the
appropriation for personal use of the proceeds from the sale of the old
newspapers and the counterpart contribution of the students for
diploma case," constitute grave misconduct. The act of submitting
receipts which do not prove that disputed items were purchased
suggests that Estandarte is predisposed to commit misrepresentation.
36

Estandarte filed a petition for review with prayer for the issuance of a
temporary restraining order/writ of preliminary injunction with the
CA. She alleged that the Ombudsman (Visayas) violated her right to
due process when her request for a formal investigation was denied;
that the DECS-Region VI has jurisdiction over the case; and that the
Ombudsman (Visayas) failed to act with the cold neutrality of an
impartial judge.
37

On September 10, 2004, the CA ordered the issuance of a TRO.
38
It
later granted Estandartes application for a writ of preliminary
injunction in a Resolution
39
dated November 10, 2004.
On June 14, 2005, the CA issued the assailed Decision granting the
petition and remanding the case to the Special Investigating
Committee of the DECS-Region VI. The dispositive portion of the
decision reads:
WHEREFORE, in view of all the foregoing premises, judgment is
hereby rendered by us GRANTING the petition filed in the case at
bench, SETTING ASIDE the decision rendered by the Office of the
Ombudsman (Visayas) on March 9, 2004 in OMB-V-A-02-0572-J and
the order issued by it in the same case on June 3, 2004 and ORDERING
the Office of the Ombudsman (Visayas) to remand the record of OMB-
VIS-ADM-99-0941 to the Special Investigating Committee of DECS-
Region VI created on July 26, 1999 for the said committee to conduct
further proceedings therein with utmost dispatch and eventually to
submit its findings and recommendations to the Director of Public
Schools for the proper disposition thereof.
IT IS SO ORDERED.
40

The CA held that the Ombudsman (Visayas) acted without or in excess
of jurisdiction when it took over the case after it issued a memorandum
considering the case closed and terminated and after jurisdiction had
already been vested in the Special Investigating Committee. Such act
violates the doctrine of primary jurisdiction. Once jurisdiction is
acquired by or attached to a proper investigative body or agency, such
jurisdiction continues until the termination of the case. Citing Fabella
v. Court of Appeals
41
and Emin v. de Leon,
42
the CA held that Rep.
Act No. 4670 specifically covers and governs administrative
proceedings involving public school teachers, and jurisdiction over
such cases is originally and exclusively lodged with the Investigating
Committee created pursuant to Section 9 of Rep. Act No. 4670.
43

The appellate court further held that, assuming the Ombudsman
(Visayas) has jurisdiction, the assailed decision and order would have
to be set aside because Estandarte was denied her right to substantive
and procedural due process. It pointed out that she was denied the right
to a formal investigation and the opportunity to be heard. Following
the Courts ruling in Tapiador v. Office of the Ombudsman,
44
the CA
held that the Ombudsman (Visayas) has no authority to directly impose
the penalty of dismissal on those who are the subject of its
investigation because its power is merely recommendatory.
45

The Ombudsman, now petitioner, submits the following issues:
I.
THE OFFICE OF THE OMBUDSMAN HAS FULL
ADMINISTRATIVE DISCIPLINARY JURISDICTION OVER
PUBLIC OFFICIALS AND EMPLOYEES UNDER ITS
AUTHORITY, INCLUDING THE LESSER POWER TO ENFORCE
THE SANCTIONS MPOSED ON ERRING FUNCTIONARIES,
PUBLIC SCHOOL TEACHERS INCLUDED.
II.
THE RELIANCE BY THE HONORABLE COURT OF APPEALS
ON THE OBITER DICTUM IN TAPIADOR VS. OFFICE OF THE
OMBUDSMAN, 379 SCRA 322 (2002) DISPOSSESING THE
OMBUDSMAN OF ITS DISCIPLINARY AUTHORITY,
CONSTITUTES A GRAVE ERROR CONSIDERING THAT: THE
POWER OF THE OMBUDSMAN TO IMPLEMENT ITS
JUDGMENTS HAS ALREADY BEEN SETTLED BY NO LESS
THAN THE HONORABLE COURT IN THE CASE OF LEDESMA
[VS.] COURT OF APPEALS, ET AL., 465 SCRA 437 (2005), AND
FURTHER AFFIRMED IN THE CASE OF OFFICE OF THE
OMBUDSMAN VS. COURT OF APPEALS, ET AL., G.R. NO.
160675, PROMULGATED ON 16 JUNE 2006.
III.
THE OFFICE OF THE OMBUDSMAN DID NOT COMMIT ANY
REVERSIBLE ERROR WHEN IT TOOK OVER THE
ADMINISTRATIVE ADJUDICATION OF THE DISCIPLINARY

18
CASE AGAINST PRIVATE RESPONDENT ESTANDARTE. AS IN
POINT OF LAW IT ACQUIRED JURISDICTION OVER THE SAID
CASE WHEN THE DEPARTMENT OF EDUCATION REFERRED
THE SAME TO THE OMBUDSMAN.
IV.
CONTRARY TO THE FINDINGS OF THE APPELLATE COURT,
PRIVATE RESPONDENT ESTANDARTE WAS NOT DENIED
SUBSTANTIVE AND PROCEDURAL DUE [PROCESS], AND
NEITHER WAS THE ADMINISTRATIVE PROCEEDING
AGAINST HER TAINTED WITH ANY IRREGULARITY, AS IN
FACT THE OMBUDSMAN AFFORDED HER DUE PROCESS.
V.
SUBSTANTIAL EVIDENCE EXISTS TO SUPPORT THE
FINDINGS OF GUILT OF PRIVATE RESPONDENT
ESTANDARTE WHICH WARRANTS THE IMPOSITION ON HER
OF THE ADMINISTRATIVE PENALTY OF DISMISSAL FROM
THE SERVICE.
46

Petitioner contends that the CA erred in holding that it is bereft of the
authority to directly impose on the respondent the sanction of dismissal
from service. It stresses that it has full and complete administrative
disciplinary jurisdiction over public school teachers. It points out that
Ledesma v. Court of Appeals
47
already declared that the ruling in the
Tapiador case, that the Ombudsman has no authority to directly
dismiss an employee from government service, is merely an obiter
dictum. Therefore, it has the authority to determine the administrative
liability of a public official or employee, and direct and compel the
head of office and agency concerned to implement the penalty
imposed.
48

Petitioner submits that it has concurrent disciplinary jurisdiction with
the DECS over the administrative case against the respondent.
Jurisdiction over the said case is not exclusive to the DECS, as the
respondent is a public official and the offense charged pertains to the
performance of her official functions. Consequently, there is no bar for
it to take cognizance of the case after the DECS referred it for
administrative adjudication.
49

Petitioner further avers that the Fabella case is not applicable to the
present case because it does not involve an issue of illegal constitution
of any investigating committee. Rep. Act No. 4670 provides for the
administrative disciplinary procedure in cases involving public school
teachers where the case is filed with the DECS.
50

Petitioner contends that the respondent was given ample opportunities
to rebut the charges and defend herself from the administrative case
filed against her. By her failure to comply with the order to submit a
position paper, submitting instead frivolous motions that delayed the
proceedings, respondent was deemed to have waived her right to a
formal investigation. Petitioner points out that respondent opted for a
formal investigation only when the case was submitted for resolution.
51

Finally, petitioner maintains that its finding is based on more than
substantial evidence. Factual findings of administrative and quasi-
judicial agencies are generally accorded not only respect but at all
times finality.
52

Respondent, for her part, argues that petitioner cannot divest the DECS
of its jurisdiction over the administrative case because "once
jurisdiction attaches, it continues until the termination of the case." She
posits that when the DECS assumed jurisdiction over the case, the
petitioner was effectively precluded from assuming the same
jurisdiction.
53

The pivotal issue in this petition is whether or not the DECS has
exclusive jurisdiction over the case.
The petition has no merit.
The jurisdiction of the Ombudsman over disciplinary cases against
government employees, which includes public school teachers, is
vested by no less than Section 12, Article XI of the Constitution which
states
Sec. 12. The Ombudsman and his Deputies, as protectors of the people,
shall act promptly on complaints filed in any form or manner against
public officials or employees of the Government, or any subdivision,
agency or instrumentality thereof, including government-owned or
controlled corporations, and shall, in appropriate cases, notify the
complainants of the action taken and the result thereof.
54

In a case of recent vintage, the Court held that the Ombudsman has full
administrative disciplinary authority over public officials and
employees of the government, thus:
All these provisions in Republic Act No. 6770 taken together reveal
the manifest intent of the lawmakers to bestow on the Office of the
Ombudsman full administrative disciplinary authority. These
provisions cover the entire gamut of administrative adjudication which
entails the authority to, inter alia, receive complaints, conduct
investigations, hold hearings in accordance with its rules of procedure,
summon witnesses and require the production of documents, place
under preventive suspension public officers and employees pending an
investigation, determine the appropriate penalty imposable on erring
public officers or employees as warranted by the evidence, and
necessarily, impose the said penalty.
55

However, Section 9 of Rep. Act No. 4670, otherwise known as the
Magna Carta for Public School Teachers, provides that:
Section 9. Administrative Charges. Administrative charges against
a teacher shall be heard initially by a committee composed of the
corresponding School Superintendent of the Division or a duly
authorized representative who would at least have the rank of a
division supervisor, where the teacher belongs, as chairman, a
representative of the local or, in its absence, any existing provincial or
national teachers organization and a supervisor of the Division, the
last two to be designated by the Director of Public Schools. The
committee shall submit its findings, and recommendations to the
Director of Public Schools within thirty days from the termination of
the hearings: Provided, however, That, where the school
superintendent is the complainant or an interested party, all the
members of the committee shall be appointed by the Secretary of
Education.
In Fabella v. Court of Appeals,
56
the Court ruled that Section 9 of Rep.
Act No. 4670 reflects the legislative intent to impose a standard and a
separate set of procedural requirements in connection with
administrative proceedings involving public school teachers. And in
Alcala v. Villar,
57
this Court emphasized that:
Republic Act No. 6770, the Ombudsman Act of 1989, provides that
the Office of the Ombudsman shall have disciplinary authority over all
elective and appointive officials of the Government and its

19
subdivisions, instrumentalities and agencies, including members of the
Cabinet, local government, government-owned or controlled
corporations and their subsidiaries except over officials who may be
removed by impeachment or over Members of Congress, and the
Judiciary. However, in Fabella v. Court of Appeals, it was held that
R.A. No. 4670, the Magna Carta for Public School Teachers,
specifically covers and governs administrative proceedings involving
public school teachers.
58
1a\^/phi1.net
Undoubtedly, the DECS-Region VI first assumed jurisdiction over the
administrative complaint against the respondent. It should be recalled
that when Peoples Graftwatch forwarded the complaint to the
Ombudsman (Visayas), the latter treated it as a request for assistance
and referred it to the DECS-Region VI and COA for appropriate
action. After it had resolved to upgrade the matter to an administrative
case, the Ombudsman decided not to take cognizance of the same and
refer it, instead, to the DECS-Region VI pursuant to Section 23(2) of
R.A. 6770 which provides:
Section 23. Formal Investigation.
x x x x
(2) At its option, the Office of the Ombudsman may refer certain
complaints to the proper disciplinary authority for the institution of
appropriate administrative proceedings against erring public officers
or employees, which shall be terminated within the period prescribed
in the civil service law. Any delay without just cause in acting on any
referral made by the Office of the Ombudsman shall be a ground for
administrative action against the officers or employees to whom such
referrals are addressed and shall constitute a graft offense punishable
by a fine of not exceeding five thousand (P5,000.00). (Emphasis
supplied.)
We do not agree with petitioners contention that it could assume
jurisdiction over the administrative case after the DECS-Region VI
had voluntarily relinquished its jurisdiction over the same in favor of
the petitioner. Jurisdiction is a matter of law. Jurisdiction once
acquired is not lost upon the instance of the parties but continues until
the case is terminated.
59
When the complainants filed their formal
complaint with the DECS-Region VI, jurisdiction was vested on the
latter. It cannot now be transferred to petitioner upon the instance of
the complainants, even with the acquiescence of the DECS and
petitioner.1vvphi1.nt
Nonetheless, even if we hold that the Ombudsman (Visayas) had
concurrent jurisdiction over the administrative case, we would still
sustain the DECS authority to decide the administrative case. In one
case, the Court pronounced that
In any event, since We are not dealing with jurisdiction but mainly
with venue, considering both court concerned do have jurisdiction over
the cause of action of the parties herein against each other, the better
rule in the event of conflict between two courts of concurrent
jurisdiction as in the present case, is to allow the litigation to be tried
and decided by the court which, under the circumstances obtaining in
the controversy, would, in the mind of this Court, be in a better position
to serve the interests of justice, considering the nature of the
controversy, the comparative accessibility of the court to the parties,
having in view their peculiar positions and capabilities, and other
similar factors. x x x x
60

Considering that the respondent is a public school teacher who is
covered by the provisions of Rep. Act No. 4670, the Magna Carta for
Public School Teachers, the DECS-Region VI is in a better position to
decide the matter. Moreover, the DECS has already commenced
proceedings over the administrative case by constituting the Special
Investigating Committee pursuant to Section 9 of Rep. Act No. 4670.
We are not unmindful of the Courts ruling in Emin v. De Leon
61

reiterated in Alcala v. Villar,
62
that a party may be estopped from
assailing the jurisdiction of the DECS:
As held previously, participation by parties in the administrative
proceedings without raising any objection thereto bars them from
raising any jurisdictional infirmity after an adverse decision is
rendered against them. In the case at bar, petitioner raised the issue of
lack of jurisdiction for the first time in his amended petition for review
before the CA. He did not raise this matter in his Motion to Dismiss
filed before the CSC Regional Office. Notably, in his Counter-
Affidavit, he himself invoked the jurisdiction of the Commission by
stating that he was "open to further investigation by the CSC to bring
light to the matter" and by further praying for "any remedy or judgment
which under the premises are just and equitable. It is an undesirable
practice of a party participating in the proceedings, submitting his case
for decision, and then accepting the judgment only if favorable, but
attacking it for lack of jurisdiction, when adverse.
63

However, the rulings of the Court in Alcala and de Leon are not
applicable in this case. From the very start, respondent consistently
protested the referral of the case back to the Ombudsman, and
demanded that the same be remanded to the DECS. She refused to
participate in the proceedings before the Ombudsman precisely
because she believed that jurisdiction was already vested on the DECS-
Region VI. Hence, she filed instead a motion to remand the case to the
DECS-Region VI and motions to postpone or suspend the proceedings.
On the other hand, what was striking in the Emin and Alcala cases was
that the respondent therein actively participated in the proceedings
before the other tribunal.
WHEREFORE, premises considered, the petition is DENIED. The
Decision of the Court of Appeals dated June 14, 2005 is AFFIRMED.
SO ORDERED.


20


21
G.R. No. 168766 May 22, 2008
THE CIVIL SERVICE COMMISSION, petitioner,
vs.
HENRY A. SOJOR, respondent.
D E C I S I O N
REYES, R.T., J .:
IS the president of a state university outside the reach of the
disciplinary jurisdiction constitutionally granted to the Civil Service
Commission (CSC) over all civil servants and officials?
Does the assumption by the CSC of jurisdiction over a president of a
state university violate academic freedom?
The twin questions, among others, are posed in this petition for review
on certiorari of the Decision
1
of the Court of Appeals (CA) which
annulled two (2) CSC Resolutions
2
against respondent Henry A. Sojor.
The Facts
The uncontroverted facts that led to the controversy, as found by the
CSC and the CA, are as follows:
On August 1, 1991, respondent Sojor was appointed by then President
Corazon Aquino as president of the Central Visayas Polytechnic
College (CVPC) in Dumaguete City. In June 1997, Republic Act
(R.A.) No. 8292, or the "Higher Education Modernization Act of
1997," was enacted. This law mandated that a Board of Trustees (BOT)
be formed to act as the governing body in state colleges. The BOT of
CVPC appointed respondent as president, with a four-year term
beginning September 1998 up to September 2002.
3
Upon the
expiration of his first term of office in 2002, he was appointed
president of the institution for a second four-year term, expiring on
September 24, 2006.
4

On June 25, 2004, CVPC was converted into the Negros Oriental State
University (NORSU).
5
A Board of Regents (BOR) succeeded the BOT
as its governing body.
Meanwhile, three (3) separate administrative cases against respondent
were filed by CVPC faculty members before the CSC Regional Office
(CSC-RO) No. VII in Cebu City, to wit:
1. ADMC DC No. 02-20(A) Complaint for dishonesty,
grave misconduct and conduct prejudicial to the best interest
of the service filed on June 26, 2002 by Jose Rene A. Cepe
and Narciso P. Ragay. It was alleged that respondent
approved the release of salary differentials despite the
absence of the required Plantilla and Salary Adjustment
Form and valid appointments.
6

2. ADM DC No. 02-20 Complaint for dishonesty,
misconduct and falsification of official documents filed on
July 10, 2002 by Jocelyn Juanon and Carolina Fe Santos.
The complaint averred that respondent maliciously allowed
the antedating and falsification of the reclassification
differential payroll, to the prejudice of instructors and
professors who have pending request for adjustment of their
academic ranks.
7

3. ADM DC No. 02-21 Complaint for nepotism filed on
August 15, 2002 by Rose Marie Palomar, a former part-time
instructor of CVPC. It was alleged that respondent appointed
his half-sister, Estrellas Sojor-Managuilas, as casual clerk,
in violation of the provisions against nepotism under the
Administrative Code.
8

Before filing his counter-affidavits, respondent moved to dismiss the
first two complaints on grounds of lack of jurisdiction, bar by prior
judgment and forum shopping.
He claimed that the CSC had no jurisdiction over him as a presidential
appointee. Being part of the non-competitive or unclassified service of
the government, he was exclusively under the disciplinary jurisdiction
of the Office of the President (OP). He argued that CSC had no
authority to entertain, investigate and resolve charges against him; that
the Civil Service Law contained no provisions on the investigation,
discipline, and removal of presidential appointees. He also pointed out
that the subject matter of the complaints had already been resolved by
the Office of the Ombudsman.
9

Finding no sufficient basis to sustain respondents arguments, the
CSC-RO denied his motion to dismiss in its Resolution dated
September 4, 2002.
10
His motion for reconsideration
11
was likewise
denied. Thus, respondent was formally charged with three
administrative cases, namely: (1) Dishonesty, Misconduct, and
Falsification of Official Document; (2) Dishonesty, Grave
Misconduct, and Conduct Prejudicial to the Best Interest of the
Service; and (3) Nepotism.
12

Respondent appealed the actions of the regional office to the
Commission proper (CSC), raising the same arguments in his motion
to dismiss.
13
He argued that since the BOT is headed by the Committee
on Higher Education Chairperson who was under the OP, the BOT was
also under the OP. Since the president of CVPC was appointed by the
BOT, then he was a presidential appointee. On the matter of the
jurisdiction granted to
CSC by virtue of Presidential Decree (P.D.) No. 807
14
enacted in
October 1975, respondent contended that this was superseded by the
provisions of R.A. No. 8292,
15
a later law which granted to the BOT
the power to remove university officials.
CSC Disposition
In a Resolution dated March 30, 2004,
16
the CSC dismissed
respondents appeal and authorized its regional office to proceed with
the investigation. He was also preventively suspended for 90 days. The
fallo of the said resolution states:
WHEREFORE, the appeal of Henry A. Sojor, President of
Central Visayas Polytechnic College, is hereby
DISMISSED. The Civil Service Commission Regional
Office No. VII, Cebu City, is authorized to proceed with the
formal investigation of the cases against Sojor and submit
the investigation reports to the Commission within one
hundred five (105) days from receipt hereof. Finally, Sojor
is preventively suspended for ninety (90) days.
17

In decreeing that it had jurisdiction over the disciplinary case against
respondent, the CSC opined that his claim that he was a presidential
appointee had no basis in fact or in law. CSC maintained that it had
concurrent jurisdiction with the BOT of the CVPC. We quote:

22
His appointment dated September 23, 2002 was signed by
then Commission on Higher Education (CHED) Chairman
Ester A. Garcia. Moreover, the said appointment expressly
stated that it was approved and adopted by the Central
Visayas Polytechnic College Board of Trustees on August
13, 2002 in accordance with Section 6 of Republic Act No.
8292 (Higher education Modernization Act of 1997), which
explicitly provides that, "He (the president of a state college)
shall be appointed by the Board of Regents/Trustees, upon
recommendation of a duly constituted search committee."
Since the President of a state college is appointed by the
Board of Regents/Trustees of the college concerned, it is
crystal clear that he is not a presidential appointee.
Therefore, it is without doubt that Sojor, being the
President of a state college (Central Visayas Polytechnic
College), is within the disciplinary jurisdiction of the
Commission.
The allegation of appellant Sojor that the Commission is
bereft of disciplinary jurisdiction over him since the same is
exclusively lodged in the CVPC Board of Trustees, being the
appointing authority, cannot be considered. The
Commission and the CVPC Board of Trustees have
concurrent jurisdiction over cases against officials and
employees of the said agency. Since the three (3)
complaints against Sojor were filed with the Commission
and not with the CVPC, then the former already acquired
disciplinary jurisdiction over the appellant to the exclusion
of the latter agency.
18
(Emphasis supplied)
The CSC categorized respondent as a third level official, as defined
under its rules, who are under the jurisdiction of the Commission
proper. Nevertheless, it adopted the formal charges issued by its
regional office and ordered it to proceed with the investigation:
Pursuant to the Uniform Rules on Administrative Cases in
the Civil Service, Sojor, being a third level official, is within
the disciplinary jurisdiction of the Commission Proper.
Thus, strictly speaking, the Commission has the sole
jurisdiction to issue the formal charge against Sojor. x x x
However, since the CSC RO No. VII already issued the
formal charges against him and found merit in the said
formal charges, the same is adopted. The CSC RO No. VII
is authorized to proceed with the formal investigation of
the case against Sojor in accordance with the procedure
outlined in the aforestated Uniform Rules.
19
(Emphasis
supplied)
No merit was found by the CSC in respondents motion for
reconsideration and, accordingly, denied it with finality on July 6,
2004.
20

Respondent appealed the CSC resolutions to the CA via a petition for
certiorari and prohibition. He alleged that the CSC acted without or in
excess of its jurisdiction, or with grave abuse of discretion amounting
to lack or excess of jurisdiction when it issued the assailed resolutions;
that CSC encroached upon the academic freedom of CVPC; and that
the power to remove, suspend, and discipline the president of CVPC
was exclusively lodged in the BOT of CVPC.
CA Disposition
On September 29, 2004, the CA issued a writ of preliminary injunction
directing the CSC to cease and desist from enforcing its Resolution
dated March 30, 2004 and Resolution dated July 6, 2004.
21
Thus, the
formal investigation of the administrative charges against Sojor before
the CSC-RO was suspended.
On June 27, 2005, after giving both parties an opportunity to air their
sides, the CA resolved in favor of respondent. It annulled the
questioned CSC resolutions and permanently enjoined the CSC from
proceeding with the administrative investigation. The dispositive part
of the CA decision reads:
WHEREFORE, in view of all the foregoing, and finding that
the respondent Civil Service Commission acted without
jurisdiction in issuing the assailed Resolution Nos. 040321
and 040766 dated March 20, 2004 and July 6, 2004,
respectively, the same are hereby ANNULLED and SET
ASIDE. The preliminary injunction issued by this Court on
September 29, 2004 is hereby made permanent.
SO ORDERED.
22

The CA ruled that the power to appoint carries with it the power to
remove or to discipline. It declared that the enactment of R.A. No.
9299
23
in 2004, which converted CVPC into NORSU, did not divest
the BOT of the power to discipline and remove its faculty members,
administrative officials, and employees. Respondent was appointed as
president of CVPC by the BOT by virtue of the authority granted to it
under Section 6 of R.A. No. 8292.
24
The power of the BOT to remove
and discipline erring employees, faculty members, and administrative
officials as expressly provided for under Section 4 of R.A. No. 8292 is
also granted to the BOR of NORSU under Section 7 of R.A. No. 9299.
The said provision reads:
Power and Duties of Governing Boards. The governing
board shall have the following specific powers and duties in
addition to its general powers of administration and exercise
of all the powers granted to the board of directors of a
corporation under Section 36 of Batas Pambansa Blg. 68,
otherwise known as the Corporation Code of the Philippines:
x x x x
to fix and adjust salaries of faculty members and
administrative officials and employees x x x; and to remove
them for cause in accordance with the requirements of
due process of law. (Emphasis added)
The CA added that Executive Order (E.O.) No. 292,
25
which grants
disciplinary jurisdiction to the CSC over all branches, subdivisions,
instrumentalities, and agencies of the government, including
government-owned or controlled corporations with original charters,
is a general law. According to the appellate court, E.O. No. 292 does
not prevail over R.A. No. 9299,
26
a special law.
Issues
Petitioner CSC comes to Us, seeking to reverse the decision
of the CA on the ground that THE COURT OF APPEALS
GRAVELY ERRED IN HOLDING THAT PETITIONER
ACTED WITHOUT JURISDICTION IN ISSUING
RESOLUTION NO. 040321 DATED MARCH 30, 2004
AND RESOLUTION NO. 04766 DATED JULY 6, 2004.
27




23
Our Ruling
The petition is meritorious.
I . J urisdiction of the CSC
The Constitution grants to the CSC administration over the entire civil
service.
28
As defined, the civil service embraces every branch, agency,
subdivision, and instrumentality of the government, including every
government-owned or controlled corporation.
29
It is further classified
into career and non-career service positions. Career service positions
are those where: (1) entrance is based on merit and fitness or highly
technical qualifications; (2) there is opportunity for advancement to
higher career positions; and (3) there is security of tenure. These
include:
(1) Open Career positions for appointment to which prior
qualification in an appropriate examination is required;
(2) Closed Career positions which are scientific, or highly
technical in nature; these include the faculty and academic
staff of state colleges and universities, and scientific and
technical positions in scientific or research institutions
which shall establish and maintain their own merit systems;
(3) Positions in the Career Executive Service; 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, all of whom are appointed by the
President;
(4) Career officers, other than those in the Career Executive
Service, who are appointed by the President, such as the
Foreign Service Officers in the Department of Foreign
Affairs;
(5) Commissioned officers and enlisted men of the Armed
Forces which shall maintain a separate merit system;
(6) Personnel of government-owned or controlled
corporations, whether performing governmental or
proprietary functions, who do not fall under the non-career
service; and
(7) Permanent laborers, whether skilled, semi-skilled, or
unskilled.
30

Career positions are further grouped into three levels. Entrance to the
first two levels is determined through competitive examinations, while
entrance to the third level is prescribed by the Career Executive Service
Board.
31
The positions covered by each level are:
(a) The first level shall include clerical, trades, crafts, and
custodial service positions which involve non-professional
or subprofessional work in a non-supervisory or supervisory
capacity requiring less than four years of collegiate studies;
(b) The second level shall include professional, technical,
and scientific positions which involve professional,
technical, or scientific work in a non-supervisory or
supervisory capacity requiring at least four years of college
work up to Division Chief level; and
(c) The third level shall cover positions in the Career
Executive Service.
32

On the other hand, non-career service positions are characterized by:
(1) entrance not by the usual tests of merit and fitness; and (2) tenure
which is limited to a period specified by law, coterminous with the
appointing authority or subject to his pleasure, or limited to the
duration of a particular project for which purpose employment was
made.
33
The law states:
The Non-Career Service shall include:
(1) Elective officials and their personal or confidential staff;
(2) Secretaries and other officials of Cabinet rank who hold
their positions at the pleasure of the President and their
personal or confidential staff(s);
(3) Chairman and members of commissions and boards with
fixed terms of office and their personal or confidential staff;
(4) Contractual personnel or those whose employment in the
government is in accordance with a special contract to
undertake a specific work or job, requiring special or
technical skills not available in the employing agency, to be
accomplished within a specific period, which in no case shall
exceed one year, and performs or accomplishes the specific
work or job, under his own responsibility with a minimum
of direction and supervision from the hiring agency; and
(5) Emergency and seasonal personnel.
34

It is evident that CSC has been granted by the Constitution and the
Administrative Code jurisdiction over all civil service positions in the
government service, whether career or non-career. From this grant of
general jurisdiction, the CSC promulgated the Revised Uniform Rules
on Administrative Cases in the Civil Service.
35
We find that the
specific jurisdiction, as spelled out in the CSC rules, did not depart
from the general jurisdiction granted to it by law. The jurisdiction of
the Regional Office of the CSC and the Commission central office
(Commission Proper) is specified in the CSC rules as:
Section 4. Jurisdiction of the Civil Service Commission.
The Civil Service Commission shall hear and decide
administrative cases instituted by, or brought before it,
directly or on appeal, including contested appointments, and
shall review decisions and actions of its offices and of the
agencies attached to it.
Except as otherwise provided by the Constitution or by
law, the Civil Service Commission shall have the final
authority to pass upon the removal, separation and
suspension of all officers and employees in the civil
service and upon all matters relating to the conduct,
discipline and efficiency of such officers and employees.
Section 5. Jurisdiction of the Civil Service Commission
Proper. The Civil Service Commission Proper shall have
jurisdiction over the following cases:

24
A. Disciplinary
1. Decisions of Civil Service Regional
Offices brought before it on petition for
review;
2. Decisions of heads of departments,
agencies, provinces, cities,
municipalities and other
instrumentalities, imposing penalties
exceeding thirty days suspension or fine
in an amount exceeding thirty days
salary brought before it on appeal;
3. Complaints brought against Civil
Service Commission Proper personnel;
4. Complaints against third level
officials who are not presidential
appointees;
5. Complaints against Civil Service
officials and employees which are not
acted upon by the agencies and such
other complaints requiring direct or
immediate action, in the interest of
justice;
6. Requests for transfer of venue of
hearing on cases being heard by Civil
Service Regional Offices;
7. Appeals from the Order of Preventive
Suspension; and
8. Such other actions or requests
involving issues arising out of or in
connection with the foregoing
enumerations.
B. Non-Disciplinary
1. Decisions of Civil Service
Commission Regional Offices
brought before it;
2. Requests for favorable
recommendation on petition for
executive clemency;
3. Protests against the appointment, or
other personnel actions, involving third
level officials; and
4. Such other analogous actions or
petitions arising out of or in relation
with the foregoing enumerations.
Section 6. Jurisdiction of Civil Service Regional Offices.
The Civil Service Commission Regional Offices shall have
jurisdiction over the following cases:
A. Disciplinary
1. Complaints initiated by, or brought
before, the Civil Service Commission
Regional Offices provided that the
alleged acts or omissions were
committed within the jurisdiction of
the Regional Office, including Civil
Service examination anomalies or
irregularities and the persons
complained of are employees of
agencies, local or national, within said
geographical areas;
2. Complaints involving Civil Service
Commission Regional Office personnel
who are appointees of said office; and
3. Petitions to place respondent under
Preventive Suspension.
B. Non-Disciplinary
1. Disapproval of appointments brought
before it on appeal;
2. Protests against the appointments of
first and second level employees
brought before it directly or on appeal.
(Emphasis supplied)
Respondent, a state university president with a fixed term of office
appointed by the governing board of trustees of the university, is a non-
career civil service officer. He was appointed by the chairman and
members of the governing board of CVPC. By clear provision of law,
respondent is a non-career civil servant who is under the jurisdiction
of the CSC.
I I . The power of the BOR to discipline officials and employees is not
exclusive. CSC has concurrent jurisdiction over a president of a state
university.
Section 4 of R.A. No. 8292, or the Higher Education Modernization
Act of 1997, under which law respondent was appointed during the
time material to the present case, provides that the schools governing
board shall have the general powers of administration granted to a
corporation. In addition, Section 4 of the law grants to the board the
power to remove school faculty members, administrative officials, and
employees for cause:
Section 4. Powers and Duties of Governing Boards. The
governing board shall have the following specific powers
and duties in addition to its general powers of
administration and the exercise of all the powers granted
to the board of directors of a corporation under Section
36 of Batas Pambansa Blg. 68, otherwise known as the
Corporation Code of the Philippines:
x x x x
h) to fix and adjust salaries of faculty members and
administrative officials and employees subject to
the provisions of the revised compensation and
classification system and other pertinent budget

25
and compensation laws governing hours of
service, and such other duties and conditions as it
may deem proper; to grant them, at its discretion,
leaves of absence under such regulations as it may
promulgate, any provisions of existing law to the
contrary not withstanding; and to remove them for
cause in accordance with the requirements of due
process of law. (Emphasis supplied)
The above section was subsequently reproduced as Section 7(i) of the
succeeding law that converted CVPC into NORSU, R.A. No. 9299.
Notably, and in contrast with the earlier law, R.A. No. 9299 now
provides that the administration of the university and exercise of
corporate powers of the board of the school shall be exclusive:
Sec. 4. Administration. The University shall have the
general powers of a corporation set forth in Batas Pambansa
Blg. 68, as amended, otherwise known as "The Corporation
Code of the Philippines." The administration of the
University and the exercise of its corporate powers shall
be vested exclusively in the Board of Regents and the
president of the University insofar as authorized by the
Board.
Measured by the foregoing yardstick, there is no question that
administrative power over the school exclusively belongs to its BOR.
But does this exclusive administrative power extend to the power to
remove its erring employees and officials?
In light of the other provisions of R.A. No. 9299, respondents
argument that the BOR has exclusive power to remove its university
officials must fail. Section 7 of R.A. No. 9299 states that the power to
remove faculty members, employees, and officials of the university is
granted to the BOR "in addition to its general powers of
administration." This provision is essentially a reproduction of Section
4 of its predecessor, R.A. No. 8292, demonstrating that the intent of
the lawmakers did not change even with the enactment of the new law.
For clarity, the text of the said section is reproduced below:
Sec. 7. Powers and Duties of the Board of Regents. The
Board shall have the following specific powers and duties
in addition to its general powers of administration and the
exercise of all the powers granted to the Board of Directors
of a corporation under existing laws:
x x x x
i. To fix and adjust salaries of faculty members and
administrative officials and employees, subject to
the provisions of the Revised Compensation and
Position Classification System and other pertinent
budget and compensation laws governing hours of
service and such other duties and conditions as it
may deem proper; to grant them, at its discretion,
leaves of absence under such regulations as it may
promulgate, any provision of existing law to the
contrary notwithstanding; and to remove them
for cause in accordance with the requirements
of due process of law.
36
(Emphasis supplied)
Verily, the BOR of NORSU has the sole power of administration over
the university. But this power is not exclusive in the matter of
disciplining and removing its employees and officials.
Although the BOR of NORSU is given the specific power under R.A.
No. 9299 to discipline its employees and officials, there is no showing
that such power is exclusive. When the law bestows upon a
government body the jurisdiction to hear and decide cases involving
specific matters, it is to be presumed that such jurisdiction is exclusive
unless it be proved that another body is likewise vested with the same
jurisdiction, in which case, both bodies have concurrent jurisdiction
over the matter.
37

All members of the civil service are under the jurisdiction of the CSC,
unless otherwise provided by law. Being a non-career civil servant
does not remove respondent from the ambit of the CSC. Career or non-
career, a civil service official or employee is within the jurisdiction of
the CSC.
This is not a case of first impression.
In University of the Philippines v. Regino,
38
this Court struck down the
claim of exclusive jurisdiction of the UP BOR to discipline its
employees. The Court held then:
The Civil Service Law (PD 807) expressly vests in the
Commission appellate jurisdiction in administrative
disciplinary cases involving members of the Civil Service.
Section 9(j) mandates that the Commission shall have the
power to "hear and decide administrative disciplinary cases
instituted directly with it in accordance with Section 37 or
brought to it on appeal." And Section 37(a) provides that,
"The Commission shall decide upon appeal all
administrative disciplinary cases involving the imposition of
a penalty of suspension for more than thirty (30) days, or fine
in an amount exceeding thirty days salary, demotion in rank
or salary or transfer, removal or dismissal from office."
(Emphasis supplied)
Under the 1972 Constitution, all government-owned or
controlled corporations, regardless of the manner of their
creation, were considered part of the Civil Service. Under
the 1987 Constitution, only government-owned or controlled
corporations with original charters fall within the scope of
the Civil Service pursuant to Article IX-B, Section 2(1),
which states:
"The Civil Service embraces all branches,
subdivisions, instrumentalities, and agencies of
the government, including government-owned or
controlled corporations with original charters."
As a mere government-owned or controlled corporation, UP
was clearly a part of the Civil Service under the 1973
Constitution and now continues to be so because it was
created by a special law and has an original charter. As a
component of the Civil Service, UP is therefore governed
by PD 807 and administrative cases involving the
discipline of its employees come under the appellate
jurisdiction of the Civil Service Commission.
39
(Emphasis
supplied)
In the more recent case of Camacho v. Gloria,
40
this Court lent
credence to the concurrent jurisdiction of the CSC when it affirmed
that a case against a university official may be filed either with the
universitys BOR or directly with the CSC. We quote:
Further, petitioner contends that the creation of the
committee by the respondent Secretary, as Chairman of the

26
USP Board of Regents, was contrary to the Civil Service
Rules. However, he cites no specific provision of the Civil
Service Law which was violated by the respondents in
forming the investigating committee. The Civil Service
Rules embodied in Executive Order 292 recognize the power
of the Secretary and the university, through its governing
board, to investigate and decide matters involving
disciplinary action against officers and employees under
their jurisdiction. Of course under EO 292, a complaint
against a state university official may be filed either with
the universitys Board of Regents or directly with the
Civil Service Commission, although the CSC may
delegate the investigation of a complaint and for that
purpose, may deputize any department, agency, official
or group of officials to conduct such investigation.
41

(Emphasis supplied)
Thus, CSC validly took cognizance of the administrative complaints
directly filed before the regional office, concerning violations of civil
service rules against respondent.
I I I. Academic freedom may not be invoked when there are alleged
violations of civil service laws and rules.
Certainly, academic institutions and personnel are granted wide
latitude of action under the principle of academic freedom. Academic
freedom encompasses the freedom to determine who may teach, who
may be taught, how it shall be taught, and who may be admitted to
study.
42
Following that doctrine, this Court has recognized that
institutions of higher learning has the freedom to decide for itself the
best methods to achieve their aims and objectives, free from outside
coercion, except when the welfare of the general public so requires.
43

They have the independence to determine who to accept to study in
their school and they cannot be compelled by mandamus to enroll a
student.
44

That principle, however, finds no application to the facts of the present
case. Contrary to the matters traditionally held to be justified to be
within the bounds of academic freedom, the administrative complaints
filed against Sojor involve violations of civil service rules. He is facing
charges of nepotism, dishonesty, falsification of official documents,
grave misconduct, and conduct prejudicial to the best interest of the
service. These are classified as grave offenses under civil service rules,
punishable with suspension or even dismissal.
45

This Court has held that the guaranteed academic freedom does not
give an institution the unbridled authority to perform acts without any
statutory basis.
46
For that reason, a school official, who is a member of
the civil service, may not be permitted to commit violations of civil
service rules under the justification that he was free to do so under the
principle of academic freedom.
Lastly, We do not agree with respondents contention that his
appointment to the position of president of NORSU, despite the
pending administrative cases against him, served as a condonation by
the BOR of the alleged acts imputed to him. The doctrine this Court
laid down in Salalima v. Guingona, Jr.
47
and Aguinaldo v. Santos
48
are
inapplicable to the present circumstances. Respondents in the
mentioned cases are elective officials, unlike respondent here who is
an appointed official. Indeed, election expresses the sovereign will of
the people.
49
Under the principle of vox populi est suprema lex, the re-
election of a public official may, indeed, supersede a pending
administrative case. The same cannot be said of a re-appointment to a
non-career position. There is no sovereign will of the people to speak
of when the BOR re-appointed respondent Sojor to the post of
university president.
WHEREFORE, the petition is GRANTED. The Decision of the
Court of Appeals is REVERSED and SET ASIDE. The assailed
Resolutions of the Civil Service Commission are REINSTATED.
SO ORDERED.


27
G.R. No. L-58494 July 5, 1989
PHILIPPINE NATIONAL OIL COMPANY-ENERGY
DEVELOPMENT CORPORATION, petitioner,
vs.
HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF
LABOR AND VICENTE D. ELLELINA, respondents.
MELENCIO-HERRERA, J .:
Through this Petition for Certiorari, Philippine National Oil
Company-Energy Development Corporation (PNOC-EDC) seeks to
declare null and void, for lack of jurisdiction, the Order of public
respondent, the Deputy Minister of Labor, sustaining his jurisdiction
over the instant controversy.
Petitioner PNOC-EDC is a subsidiary of the Philippine National Oil
Company (PNOC). On 20 January 1978, it filed with the Ministry of
Labor and Employment, Regional Office No. VII, Cebu City (MOLE),
a clearance application to dismiss/ terminate the services of private
respondent, Vicente D. Ellelina, a contractual employee.
The application for clearance was premised on Ellelina's alleged
commission of a crime (Alarm or Public Scandal) during a Christmas
party on 19 December 1977 at petitioner's camp in Uling, Cebu, when,
because of the refusal of the raffle committee to give him the prize
corresponding to his lost winning ticket, he tried to grab the armalite
rifle of the PC Officer outside the building despite the warning shots
fired by the latter.
Clearance to dismiss was initially granted by MOLE but was
subsequently revoked and petitioner was ordered to reinstate Ellelina
to his former position, without loss of seniority rights, and with
backwages from I February 1978 up to his actual reinstatement.
Petitioner appealed to the Minister of Labor who, acting through public
respondent, affirmed, on 14 August 1981, the appealed Order. Hence,
this Petition predicated substantially on the following grounds:
1. Under Article 277 of the Labor Code, the Ministry of Labor and
Employment has no jurisdiction over petitioner because it is a
government-owned or controlled corporation;
2. Ellelina's dismissal is valid and just because it is based upon the
commission of a crime.
On the other hand, public respondent contends:
(a) While the petitioner is a subsidiary of the PNOC, it is still covered
by the Labor Code and, therefore, within the jurisdiction of the
Ministry of Labor inasmuch as petitioner was organized as a private
corporation under the Corporation Law and registered with the
Securities and Exchange Commission;
(b) Petitioner is estopped from assailing the Labor Department's
jurisdiction, having subjected itself to the latter when it filed the
application for clearance to terminate Ellelina's services; and
(c) Dismissal is too harsh a penalty.
The issues that confront us, therefore, are (1) whether or not public
respondent committed grave abuse of discretion in holding that
petitioner is governed by the Labor Code; and (2) whether or not
Ellelina's dismissal was justified.
Under the laws then in force, employees of government-owned and/or
controlled corporations were governed by the Civil Service Law and
not by the Labor Code. Thus, Article 277 of the Labor Code (PD 442)
then provided:
The terms and conditions of employment of all government
employees, including employees of government- owned and controlled
corporations shall be governed by the Civil Service Law, rules and
regulations ... .
In turn, the 1973 Constitution provided:
The Civil Service embraces every branch, agency, subdivision and
instrumentality of the government, including government-owned or
controlled corporations.
In National Housing Corporation vs. Juco (L-64313, January 17,
1985, 134 SCRA 172), we laid down the doctrine that employees of
government-owned and/or controlled corporations, whether created by
special law or formed as subsidiaries under the general Corporation
Law, are governed by the Civil Service Law and not by the Labor
Code.
However, the above doctrine has been supplanted by the present
Constitution, which provides:
The Civil Service embraces all branches, subdivisions,
instrumentalities and agencies of the Government, including
government-owned or controlled corporations with original charters.
(Article IX-B, Section 2 [1])
Thus, under the present state of the law, the test in determining whether
a government-owned or controlled corporation is subject to the Civil
Service Law is the manner of its creation such that government
corporations created by special charter are subject to its provisions
while those incorporated under the general Corporation Law are not
within its coverage.
In NASECO vs. NLRC (G.R. No. 69870, November 29,1988), we had
occasion to apply the present Constitution in deciding whether or not
the employees of NASECO (a subsidiary of the NIDC, which is in turn
a subsidiary wholly-owned by the PNB, a government-owned
corporation) are covered by the Civil Service Law or the Labor Code
notwithstanding that the case arose at the time when the 1973
Constitution was still in effect. We held that the NLRC has jurisdiction
over the employees of NASECO "on the premise that it is the 1987
Constitution that governs because it is the Constitution in place at the
time of decision;" and that being a corporation without an original
charter, the employees of NASECO are subject to the provisions of the
Labor Code.
We see no reason to depart from the ruling in the aforesaid case.
We hold, therefore, that the PNOC-EDC having been incorporated
under the general Corporation Law, is a government-owned or
controlled corporation whose employees are subject to the provisions
of the Labor Code. This is apparently the intendment in the NASECO
case notwithstanding the fact that the NASECO therein was a
subsidiary of the PNB, a government-owned corporation.

28
In so far as Ellelina is concerned, we hold that the reinstatement
ordered by public respondent, without loss of seniority rights, is
proper. However, consistent with the rulings of the Court, backwages
should be limited to three years from 1 February 1978. The dismissal
ordered by petitioner was a bit too harsh considering the nature of the
act which he had committed and that it was his first offense.
WHEREFORE, the Petition is DISMISSED, and the judgment of
respondent public official is hereby AFFIRMED. No costs.
SO ORDERED.


29
G.R. No. 67125 August 24 1990
PHILIPPINE VETERANS BANK EMPLOYEES UNION-
NUBE, DOMINGO C. LOPEZ, HERMAN B. PASILIAO
FELIZARDO B. SARAPAT, LADY LYDIA B. CORNISTA,
ELIZABETH S. KARASIG, EDUARDO C. NIEVERA,
NORMAN T. BAYODA, REGINO V. TAGUIAM, ROMULO G.
GARCIA, MANUEL A. LAMAN, EDUARDO SJ. BELMONTE,
HERNANI B. LIWANAG, EDUARDO P. CRUZ, DANILO N.
MENDOZA, ELSA J. SILVERIO, REGINO V. TAGUIAM, JR.,
ALBERT G. MALAPIT, MANUEL B. GARCIA, and the Bank
Employees listed in Annex "A" of this Petition, petitioners,
vs.
THE PHILIPPINE VETERANS BANK Now renamed
PHILIPPINE MILITARY AND VETERANS BANK,
GENERAL FABIAN VER in his capacity as Chairman of the
Board of Directors of the Philippine Veterans Bank, and of the
Board of Trustees of the Armed Forces of the Philippines
Retirement and Separation Benefits System, and RAFAEL
ARNALDO in his capacity as President of the Philippine
Veterans Bank, respondents.

G.R. No. 82337 August 24,1990
SIMEON C. MEDALLA, GREGORIO VENTURANZA, JOSE
P. JUANILLO, RAMON P. MIRANDA, ENRIQUE H.R.
ABILA, PEDRO ACIERTO, SILVINO AGUDO, SANTIAGO
FERNANDEZ, JUAN P. ROSETE, MAXIMO G. AQUINO,
GREGORIO C. DARROLES, ISMAEL T. ESPIRITU,
ERNESTO Y. GUEVARRA, MARIANO F. INFANTE,
VENERANDO E. MANZO, VICENTE G. VILLADOLID,
GUILLERMO A. CRUZ, JORGE MARIANO, PASCUAL
SARMIENTO, RAMON P. MENDOZA, PEDRO GABRIEL,
ANTONIO A. LIM, MIGUEL T. MARCOS, TOMAS T.
NUFABLE, MARIANO ORTIZ, DOMINGO C. OCTAVO,
MANUEL R. RAMOS, LEONCIO MANALO, DAYAN S.
MAMACO, CORNELIO D. CAUNAR, MAURO DE LA CRUZ,
FIDEL T. VIZMANOS, FELIPE L. VICENCIO, DAMIAN S.
VITO CRUZ, JUAN LOMBREDAS, MARINA BAUTISTA,
SEGUNDO M. ROSALES, CECLONDO CIEGO, CECILIO
MIRANDA, FERNANDO APOSTOL, ANICETO R. NARCA,
CARLOS B. LASMARIAS, RICARTE G. REYES, P.D.
DELLOSON, LORETO BANTONIO ERNESTO D. LLAGUNO,
CONSTANCIO SEBASTIAN, ELEUTERIO R. VALENZUELA,
ISIDRO A. BATHAN, LEON G. NOLLIDO, in representation of
the remainder of the 510,000 veterans or their heirs, as defined in
R.A. 3518, and the PHILIPPINE VETERANS BANK,
petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, LIQUIDATOR OF
THE PHILIPPINE VETERANS BANK, THE LIQUIDATION
COURT (RTC, BRANCH 39, MANILA), SECRETARY OF
THE BUDGET and THE NATIONAL TREASURER,
respondents.
CRUZ, J.:
The Philippine Veterans Bank was created in 1963 with the hope that
it would ensure the economic future and perhaps even prosperity of the
hundreds of thousands of war veterans who were to be its stockholders.
For a while the vision grew, but in time it dimmed and finally faded as
the Bank found itself enmeshed in financial difficulties that threatened
its very survival. Now the dream is in tatters. Efforts are at present
being taken to piece together its severed sinews but it is doubtful if the
Bank will ever be whole again.
I
The trouble began when on April 10, 1983, the Bank was placed under
receivership by virtue of Resolution No. 334 of the Monetary Board of
the Central Bank. The reason was the precarious condition of the Bank.
A year later, on April 26, 1984, the Philippine Veterans Bank
Employees Union questioned the retrenchment and reorganization
program of the Bank and, on the ground of security of tenure, prayed
that the said program be prohibited. In its petition, which was docketed
as G.R. No. 67125, the Union also asked for a temporary restraining
order, which was issued on May 9, 1984. Subsequently, while the case
was pending, the Monetary Board ordered the liquidation of the Bank
by Resolution No. 612 dated June 7, 1985, after finding that the Bank
had incurred an outstanding liability of P540,835,860.79. This order
was opposed by the Union in a supplemental petition for prohibition
with preliminary injunction filed on September 25, 1985. On
November 26,1985, the Veterans Federation of the Philippines entered
the picture and filed with leave of court a petition in intervention
which, besides echoing the original petition in opposing the
liquidation, asserted the additional claim that it was in the process of
formulating plans for the rehabilitation and eventual expansion of the
Bank. This was followed by an ancillary petition for the immediate
payment of the wage or salary increase ordered by the NLRC in its
resolution dated September 17,1985. On March 26,1987, a writ of
preliminary injunction was issued by this Court reading as follows:
NOW THEREFORE, effective immediately and until further orders
from this Court, you (Respondent Central Bank of the Philippines, and
PVB Liquidator), your agents, representatives, and/or any person or
persons acting upon your orders or in your place or stead, are hereby
ENJOINED from liquidating the Phil. Veterans Bank and from taking
or pursuing any act or transaction in pursuance of such liquidation,
including sales or other disposal of properties of whatever kind, or
disbursing PVB funds, except those incurred in the course of ordinary
administration of the affairs of the bank, including payment of accrued
and unpaid claims of PVB Employees under the 1982-1985 CBA, all
of which should be subject to the prior approval of the respondent
liquidation court.
On March 18,1988, an original petition for restitution and for
extraordinary and equitable writs was filed by Simeon Medalla et al.
in their own right and "on behalf of the remaining 510,000 World War
II veterans or their heirs." It sought inter alia a judicial declaration that
the petitioners were entitled to the ownership, possession and control
of the Bank and an order restraining the Central Bank from disposing
of the assets of the Bank or making any disbursements therefrom
except for ordinary administrative expenses and for the payment of
accrued wages and other benefits of personnel as approved by the
liquidator court. This petition was docketed as G.R. No. 82337 and
consolidated with G.R. No. 67125.
Earlier, on June 11, 1987, then Judge Abelardo M. Dayrit of the
Regional Trial Court of Manila had ordered the payment of the claims
of the employees amounting to P37,920,310.82. This was followed on
October 21, 1988, by another order issued by the same court for the
payment of retirement benefits to two former board members of the
Bank, namely, Agustin Marking and Jaime S. Mejia. Upon the
representations of the petitioners, however, we prevented enforcement
of this order with our temporary restraining order dated January 12,
1989.
On December 15, 1988, the writ of preliminary injunction dated March
26,1987, was amended "to exclude from its coverage the sale or

30
disposal by the Central Bank or the Bank Liquidator of the acquired
assets of the PVB." This was done in response to petitions filed by
several persons seeking to redeem or repurchase the properties which
had earlier been purchased by the Bank through foreclosure sales.
1

On August 25, 1989, another ancillary petition was filed for the
immediate payment of backwages of the Bank personnel on the regular
payroll as of June 1985 equivalent to five months' gross salary. On
May 25, 1990, the City Government of Davao filed a motion to lift the
preliminary injunction dated March 26, 1987, with respect to its
deposit of P3,700,000, which it wanted to withdraw to finance several
programs and projects. And on June 11, 1990, Dolores V. Molina filed
her own motion to withdraw her deposit of P1,l00,000.00.
II
The Court has purposely delayed resolution of these cases in the hope
that it would not be necessary to do so in view of the efforts being
taken by the Executive Department for the rehabilitation of the Bank.
The agency in charge of this matter is the Special Presidential
Committee on the Philippine Veterans Bank, which was created by
Adm. Order No. 29 dated July 10, 1987, and renewed by Adm. Order
No. 62 dated February 23, 1988 and by Adm. Order No. 90 dated
September 2, 1988, to study the financial condition of the Bank and
determine the feasibility of its rehabilitation. However, although we
may assume that the Committee has been assiduously pursuing its
objectives and while there are optimistic statements every now and
then that the Bank will be reopening soon, that prospect does not really
seem to be in sight yet. We have therefore decided to finally resolve
these cases, applying a judicial solution which, when all is said and
done, will still be less acceptable than a practical administrative
settlement.
III
The basic issue in these petitions is whether the Central Bank has the
power to liquidate the Philippine Veterans Bank.
The petitioners dispute this authority. In G.R. No. 67125, they claim
that as the Bank was created by a special law, a contractual relationship
now exists between the Government and the stockholders of the Bank
that cannot be disturbed without violation of the impairment clause.
The acceptance of the benefits of that law by the petitioners had
conferred a vested right on them that cannot now be withdrawn without
their consent as this would constitute a deprivation of their property
without due process of law. Assuming that such benefits could be
validly revoked, this cannot be done by the Central Bank only but by
the legislature itself which conferred the franchise on the Bank in the
first place. Moreover, the Central Bank cannot exercise any authority
over the Bank because the latter is itself also a government bank with
the same status as the Development Bank of the Philippines, the Land
Bank of the Philippines, and the Philippine National Bank. The Central
Bank has no control over these government lending institutions.
We sustain the position of the respondents that these arguments are not
well-taken.
The mere fact that the Bank was created by special law does not confer
upon it extraordinary privileges over and above those granted similar
charters like the Development Bank of the Philippines and the Land
Bank of the Philippines. As a lending institution, it is part of the
banking system and therefore covered by the regulatory power
exercised over such entities by the Central Bank. Such authority is
expressly provided for in the Central Bank Act, as follows:
Sec. 25. Creation of the appropriate departments.
In order to assure the observance of this Act and
of other pertinent laws, and of the rules and
regulations of the Monetary Board, the Central
Bank shall have appropriate supervising and
examining departments which shall be charged
with the supervision and periodic or special
examinations of banking institutions operating in
the Philippines, including all Government credit
institutions, including their subsidiaries and
affiliates of non-bank financial intermediaries, and
subsidiaries and affiliates of non-bank financial
intermediaries performing quasi-banking
functions: . . . The supervising and/or examining
departments shall discharge their responsibilities
in accordance with the instructions of the
Monetary Board.
The department heads and the examiners of the
supervising and/or examining departments are
hereby authorized to administer oaths to any
director, officer, or employee of any institution
under their respective supervision or subject to
their examination and to compel the presentation
of all books, documents, papers or records
necessary in their judgment to ascertain the facts
relative to the true condition of any institution as
well as the books and records of persons and
entities relative to or in connection with the
operations, activities or transactions of the
institution under examination.
No restraining order or injunction shall be issued
by the court enjoining the Central Bank from
examining any institution subject to supervision or
examination by the Central Bank, unless there is
convincing proof that the action of the Central
Bank is plainly arbitrary and made in bad faith and
the petitioner or plaintiff files with the clerk or
judge of the court in which the action is pending a
bond executed, in favor of the Central Bank, in an
amount to be fixed by the court. The restraining
order or injunction shall be refused or, if granted,
shall be dissolved upon filing by the Central Bank
of a bond, which shall be in the form of cash or
Central Bank cashier's check, in an amount twice
the amount of the bond of the petitioner or plaintiff
conditioned that it will pay the damages which the
petitioner or plaintiff may suffer by the refusal or
the dissolution of the injunction. The provisions of
Rule 58 of the New Rules of Court insofar as they
are applicable and not inconsistent with the
provisions of this Section shall govern the
issuance and dissolution of the restraining order or
injunction contemplated in this Section.
SEC. 25-A. The department heads and the
examiners of the supervising and examining
departments, in the conduct of the periodic or
special examination of banking institutions may
be specifically authorized by the Monetary Board
to examine, inquire or look into all deposits of
whatever nature with banking institutions in the
Philippines including investments in debt
instruments issued by the Government of the
Philippines, its political subdivisions and its
instrumentalities, after being satisfied that there is

31
reasonable ground to believe that a bank fraud or
serious irregularity has been or is being committed
and that it is necessary to look into the deposit to
establish such fraud or irregularity.
SEC. 28. Examination and fees. It shall be the
duty of the head of the appropriate supervising and
examining department, personally or by deputy, at
least once in every twelve months, and at such
other times as either he or the Monetary Board
may deem expedient, to make an examination of
the books of every banking institution within the
purview of this Act and make a report on the same
to the Monetary Board.
Every such institution shall afford to the head of
the appropriate supervising and examining
departments and to his authorized deputies full
opportunity to examine its books, cash and
available assets and general condition at any time
when requested so to do by the Central Bank:
Provided, however, That none of the reports and
other papers relative to such examinations shall be
open to inspection by the public except insofar as
such publicity is incidental to the proceeding
hereinafter authorized or is necessary for the
prosecution of violations n connection with the
business of such institutions. . . .
SEC. 28-A. Appointment of conservator.
Whenever, on the basis of a report submitted by
the appropriate supervising or examining
department, the Monetary Board finds that a bank
or a non-bank financial intermediary performing
quasi-banking functions is in a state of continuing
inability or unwillingness to maintain a condition
of liquidity deemed adequate to protect the interest
of depositors and creditors, the Monetary Board
may appoint a conservator to take charge of the
assets, liabilities, and the management of that
institution, collect all monies and debts due said
institution and exercise all powers necessary to
preserve the assets of the institution, reorganize
the management thereof, and restore its viability.
He shall have the power to overrule or revoke the
actions of the previous management and board of
directors of the bank or non-bank financial
intermediary performing quasi-banking functions,
any provision of law to the contrary
notwithstanding, and such other powers as the
Monetary Board shall deem necessary.
As much as practicable, the conservator should not
be connected with the Central Bank but should be
competent and knowledgeable in bank operations
and management. . . . He shall report and be
responsible to the Monetary Board until such time
as the Monetary Board is satisfied that the
institution can continue to operate on its own and
the conservatorship is no longer necessary. The
conservatorship shall likewise be terminated
should the Monetary Board, on the basis of the
report of the conservator or of its own findings,
determine that the continuance in business of the
institution would involve probable loss to its
depositors or creditors, in which case the provision
of Section 29 shall apply.
SEC. 29. Proceedings upon insolvency.
Whenever, upon examination by the head of the
appropriate supervising or examining department
or his examiners or agents into the condition of
any bank or non-bank financial intermediary
performing quasi-banking functions, it shall be
disclosed that the condition of the same is one of
insolvency, or that its continuance in business
would involve probable loss to its depositors or
creditors, it shall be the duty of the department
head concerned forthwith, in writing, to inform the
Monetary Board of the facts. The Board may, upon
finding the statements of the department head to
be true, forbid the institution to do business in the
Philippines and designate an official of the Central
Bank or a person of recognized competence in
banking or finance as receiver to immediately take
charge of its assets and liabilities, as expeditiously
as possible collect and gather all the assets and
administer the same for the benefit of its creditors,
and represent the bank personally or through
counsel as he may retain in all actions or
proceedings for or against the institution,
exercising all the powers necessary for these
purposes including, but not limited to, bringing
and foreclosing mortgages in the name of the bank
or non-bank financial intermediary performing
quasi-banking functions.
The Monetary Board shall thereupon determine
within sixty days whether the institution may be
recognized or otherwise placed in such a condition
so that it may be permitted to resume business with
safety to its depositors and creditors and the
general public and shall prescribe the conditions
under which such resumption of business shall
take place as well as the time for fulfillment of
such conditions. In such case, the expenses and
fees in the collection and administration of the
assets of the institution shall be determined by the
Board and shall be paid to the Central Bank out of
the assets of such institution.
If the Monetary Board shall determine and
confirm within the said period that the bank or
non-bank financial intermediary performing
quasi-banking functions is insolvent or cannot
resume business with safety to its depositors,
creditors and the general public, it shall, if the
public interest requires, order its liquidation,
indicate the manner of its liquidation and approve
a liquidation plan which may, when warranted,
involve disposition of any or all assets in
consideration for the assumption of equivalent
liabilities. The liquidator designated as hereunder
provided shall, by the Solicitor General, file a
petition in the regional trial court reciting the
proceedings which have been taken and praying
the assistance of the court in the liquidation of
such institution. The court shall have jurisdiction
in the same proceedings to assist in the
adjudication of the disputed claims against the
bank or non-bank financial intermediary
performing quasi-banking functions and in the

32
enforcement of individual liabilities of the
stockholders and do all that is necessary to
preserve the assets of such institution and to
implement the liquidation plan approved by the
Monetary Board. The Monetary Board shall
designate an official of the Central Bank or a
person of recognized competence in banking or
finance, as liquidator who shall take over and
continue the functions of the receiver previously
appointed by the Monetary Board under this
Section. The liquidator shall, with all convenient
speed, convert the assets of the banking institution
or non-bank financial intermediary performing
quasi-banking functions to money or sell, assign
or otherwise dispose of the same to creditors and
other parties for the purpose of paying the debts of
such institution and he may, in the name of the
bank or non-bank financial intermediary
performing quasi- banking functions and with the
assistance of counsel as he may retain, institute
such actions as may be necessary in the
appropriate court to collect and recover accounts
and assets of such institution or defend any action
filed against the institution: Provided, however,
That after having reasonably established all claims
against the institution, the liquidator may, with the
approval of the court, effect partial payments of
such claims for assets of the institution in
accordance with their legal priority.
The assets of an institution under receivership or
liquidation shall be deemed in custodia legis in the
hands of the receiver or liquidator and shall, from
the moment of such receivership or liquidation, be
exempt from any order of garnishment, levy,
attachment, or execution.
The provisions of any law to the contrary
notwithstanding, the actions of the Monetary
Board under this Section, Section 28-A, and the
second paragraph of Section 34 of this Act shall be
final and executory, and can be set aside by a court
only if there is convincing proof, after hearing, that
the action is plainly arbitrary and made in bad
faith: Provided, That the same is raised in an
appropriate pleading filed by the stockholders of
record representing the majority of the capital
stock within ten (10) days from the date the
receiver takes charge of the assets and liabilities of
the bank or non-bank financial intermediary
performing quasi-banking functions or, in case of
conservatorship or liquidation, within ten (10)
days from receipt of notice by the said majority
stockholders of said bank or non-bank financial
intermediary of the order of its placement under
conservatorship or liquidation. No restraining
order or injunction shall be issued by any court
enjoining the Central Bank from implementing its
actions under this Section and the second
paragraph of Section 34 of this Act in the absence
of any convincing proof that the action of the
Monetary Board is plainly arbitrary and made in
bad faith and the petitioner or plaintiff files a bond,
executed in favor of the Central Bank, in an
amount to be fixed by the court. The restraining
order or injunction shall be refused or, if granted,
shall be dissolved upon filing by the Central Bank
of a bond, which shall be in the form of cash or
Central Bank cashier's check, in an amount twice
the amount of the bond of the petitioner or plaintiff
conditioned that it will pay the damages which the
petitioner or plaintiff may suffer by the refusal or
the dissolution of the injunction. The provisions of
Rule 58 of the New Rules of Court insofar as they
are applicable and not inconsistent with the
provisions of this Section shall govern the
issuance and dissolution of the restraining order or
injunction contemplated in this Section.
Insolvency, under this Act, shall be understood to
mean that the realizable assets of a bank or a non-
bank financial intermediary performing quasi-
banking functions as determined by the Central
Bank are insufficient to meet its liabilities.
The appointment of a conservator under Section
28-A of this Act or the appointment of a receiver
or liquidator under this Section shall be vested
exclusively with the Monetary Board, the
provision of any law, general or special, to the
contrary notwithstanding.
It is stressed that in Section 25 of the said Act, the Department of
Supervision and Examination is charged with the supervision and
periodic examination of all banking institutions operating in the
Philippines, including all government credit institutions. Assuming for
the moment that the Bank is owned or controlled by the government,
it is nevertheless not exempt from but in fact expressly placed under
the jurisdiction of the Central Bank.
More to the point, R.A. No. 3518 itself, which created the Philippine
Veterans Bank, provides in its Section 14 that the Bank shall be subject
to the authority of the Department of Supervision and Examination.
The said Section 14 reads as follows:
Sec. 14. Inspection by Department of Supervision
and Examination of the Central Bank. The
Veterans Bank shall be subject to inspection by the
Department of Supervision and Examination of
the Central Bank in accordance with Republic Act
Numbered Two hundred sixty-five and Republic
Act Numbered Three hundred thirty-seven.
The purpose of these provisions is to enable the Central Bank, as the
entity charged with the responsibility of maintaining the stability of the
banking and monetary systems of the country, to take the necessary
steps against any banking institution whose continued operation may
cause prejudice to its depositors and creditors, and the general public
as well.
Even if it be conceded that the charter of the Rank constitutes a contract
between the Government and the stockholders of the Bank, it would
not follow that the relationship cannot be altered without violating the
impairment clause. This is a too simplistic conclusion that loses sight
of the vulnerability of this "precious little clause," as it is called, to the
inherent powers of the State when the public interest demands their
exercise. The clause, according to Corwin, "is lately of negligible
importance, and might well be stricken from the Constitution. For most
practical purposes, in fact, it has been."
2


33
The undeniable fact is that the notion of public interest has made such
considerable inroads into the constitutional guaranty that one could
validly say now that it has become the exception rather than the rule.
The impact of the modern society upon hitherto private agreements has
left the clause in a shambles, as it were, making practically every
contract susceptible to change on behalf of the public. The modern
understanding is that the contract is protected by the guaranty only if
it does not affect public interest, but there is hardly any contract now
that does not somehow or other affect public interest as not to come
under the powers of the State. Part of that understanding therefore is
that, conversely, the contract may be altered validly if it involves the
public interest, to which private interests must "yield as a postulate of
the existing social order."
In the landmark case of Norman v. Baltimore,
3
the U.S. Supreme
Court stressed that every contract involving the public interest suffers
a congenital infirmity, and that is its susceptibility to change whenever
required by the public interest. The police power can be validly
asserted to make that change to meet any one of the several great public
needs, such as, in that case, regulation of the value of money. In
upholding a legislative enactment providing for the payment of
existing debts dollar for dollar in the current legal tender, as against
contracts calling for such payment in gold coin of specified weight and
fineness the decision stressed:
Contracts, however express, cannot fetter the
constitutional authority of the Congress. Contracts
may create rights of property, but when contracts
deal with a subject matter which lies within the
control of the Congress, they have a congenital
infirmity. Parties cannot remove their transactions
from the reach of dominant constitutional power
by making contracts about them.
The need in the case at bar is no less compelling, to wit, the
preservation of the integrity and stability of our banking system.
Unless adequate and determined efforts are taken by the government
against distressed and mismanaged banks, public faith in the banking
system is certain to deteriorate to the prejudice of the national economy
itself, not to mention the losses suffered by the bank depositors,
creditors, and stockholders, who all deserve the protection of the
government. The government cannot simply cross its arms while the
assets of a bank are being depleted through mismanagement or
irregularities. It is the duty of the Central Bank in such an event to step
in and salvage the remaining resources of the bank so that they may
not continue to be dissipated or plundered by those entrusted with their
management.
The petitioners' argument that by accepting the stocks granted to them
by the law, the same have become their inalienable and irrevocable
property is clearly untenable. These stockholdings do not enjoy any
special immunity over and above shares of stock in any other
corporation, which are always subject to the vicissitudes of business.
Their value may appreciate or decline or the stocks may become
worthless altogether. Like any other property, they do not have a fixed
but a fluctuating price. Certainly, the mere acceptance of these shares
of stock by the petitioners did not create any legal assurance from the
Government that their original value would be preserved and that the
owners could not be deprived of such property under any circumstance
no matter how justified.
Nor is the charter subject to revocation only by the legislature, as the
petitioners also erroneously contend. The mere circumstance that the
charter was granted directly by Congress does not signify that only
Congress can modify or abrogate it by another enactment. In fact, the
charter itself says that the Bank shall be subject to regulation by the
Central Bank which is empowered inter alia, by express provision of
law, to order its liquidation. Also, by its own terms, the charter will
automatically become functus officio after fifty years and the Bank
itself will cease to exist unless its life is extended by positive act of the
legislature. It may also be noted that quo warranto proceedings may
be filed against the Bank by the Solicitor General on behalf of the
Republic of the Philippines pursuant to the Rules of Court on any of
the grounds enumerated in Rule 66 thereof. All these can be done
without the necessity of direct legislative action and, no less
importantly, without violation of the legislative will.
There is also the practical difficulty of Congress itself decreeing
liquidation, presumably to be made after examination of the financial
condition of the Bank. In effect, the legislature, through its
corresponding appropriate committees, will be undertaking the
function purposely assigned by law to the Department of Examination
and Supervision of the Central Bank. This is an intricate administrative
function wisely entrusted by Congress to the said body, from which
the petitioners would now recall it for its direct exercise by the
lawmaking body. Such a procedure would bring us back to square one,
so to speak, and revoke the authority confided by Congress to the
Central Bank in recognition of its established expertise in the
regulation of banks.
Coming now to the ownership of the Bank, we find it is not a
government bank, as claimed by the petitioners. The fact is that under
Section 3(b) of its charter, while 51% of the capital stock of the Bank
was initially fully subscribed by the Republic of the Philippines for and
in behalf of the veterans, their widows, orphans or compulsory heirs,
the corresponding shares of stock were to be turned over within 5 years
from the organization by the Bank to the said beneficiaries who would
thereafter have the right to vote such common shares. The balance of
about 49% was to be divided into preferred shares which would be
opened for subscription by any recognized veteran, widow, orphans or
compulsory heirs of said veteran at the rate of one preferred share per
veteran, on the condition that in case of failure of any particular veteran
to subscribe for any preferred share of stock so offered to him within
thirty (30) days from the date of receipt of notice, said share of stock
shall be available for subscription to other veterans in accordance with
such rules or regulations as may be promulgated by the Board of
Directors. Moreover, under Sec. 6(a), the affairs of the Bank are
managed by a board of directors composed of eleven members, three
of whom are ex officio members, with the other eight being elected
annually by the stockholders in the manner prescribed by the
Corporation Law. Significantly, Sec. 28 also provides as follows:
Sec. 28. Articles of incorporation. This Act,
upon its approval, shall be deemed and accepted to
all legal intents and purposes as the statutory
articles of incorporation or Charter of the
Philippine Veterans' Bank; and that,
notwithstanding the provisions of any existing law
to the contrary, said Bank shall be deemed
registered and duly authorized to do business and
operate as a commercial bank as of the date of
approval of this Act.
This point is important because the Constitution provides in its Article
IX-B, Section 2(1) that "the Civil Service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government,
including government-owned or controlled corporations with original
charters." As the Bank is not owned or controlled by the Government
although it does have an original charter in the form of R.A. No. 3518,
it clearly does not fall under the Civil Service and should be regarded
as an ordinary commercial corporation. Section 28 of the said law so
provides. The consequence is that the relations of the Bank with its

34
employees should be governed by the labor laws, under which in fact
they have already been paid some of their claims.
Applying the Labor Code, the Court rules that the petitioners' claim for
back wages must be rejected. The reason is that the employees making
this claim have not been illegally dismissed but lawfully separated as
a result of the liquidation of the Bank on orders of higher authority.
This move was not the decision of the Bank; it was forced upon it by
the resolution of the Monetary Board of the Central Bank. Back pay is
awarded for work that could have been performed by the employee
except that he was prevented from doing so because of his illegal
dismissal by the employer. It is clearly not due in the case at bar to the
employees whose services were terminated as a result of the forcible
closure of the Bank.
As regards the claims of Marking and Mejia for the payment of their
retirement benefits, which we restrained temporarily on January 12,
1989, we find with the public respondents that such payment is in
order. We so hold, considering that although the said retirees are
members of the board of directors, they are nevertheless covered by
the Retirement Plan of the Bank per the following pertinent provisions:
Article II, Section 1. The following words and
phrases, as used herein shall have the meaning
indicated, unless a different meaning is plainly
required by the text:
. . .
c) "Employee" means any person who is employed
by the Bank on a regular and permanent basis,
including officers; and such members of the Board
of Director and other hired workers not employed
on a regular and permanent basis but who, because
of their extended service, would qualify under the
retirement categories under Article IV hereof and
who for purposes of this Plan, shall be deemed
employees.
Article III, Section 1 Eligibility at Effective
Date
All employees as herein defined shall
automatically be eligible to participate in the Plan,
as of its effective date. (Emphasis supplied)
However, for purposes of the application of Article 110 of the Labor
Code, the said directors must be considered managerial employees, or
officers, and so not entitled to the preference of claims granted
thereunder to workers in general or the rank-and-file employees. The
claims of these workers must be accorded priority over all other claims,
including those of the said directors, and indeed even of the
Government itself." This provision, as amended by Republic Act No.
6715, reads as follows:
Article 110. Worker preference in case of
bankruptcy. In the event of bankruptcy or
liquidation of an employer's business, his workers
shall enjoy first preference as regards their unpaid
wages and other monetary claims, any provision
of law to the contrary notwithstanding. Such
unpaid wages and monetary claims shall be paid
in full before the claims of the Government and
other creditors may be paid. (Amendments
italicized).
Focusing now on G.R. No. 82337, the Court notes that the petitioners
therein are asking that the ownership and management of the Bank be
turned over to them in accordance with R.A. No. 3518. They point out
that the deficit incurred by the Bank when its liquidation was ordered
by the Central Bank in 1985 is not imputable to them and suggest they
can do better in rehabilitating the Bank, given the proper support from
the Government. For this reason, they ask the Court to order inter alia
the Central Bank to grant them the necessary loans and other facilities,
the Secretary of the Budget to certify as appropriated the amount
needed to fully pay all common and preferred shares of the Bank, and
the National Treasurer to release such amounts to the Bank.
We agree with the Solicitor General that there is a procedural flaw in
the petition, in that-
The Rules of Court, the Judiciary Reorganization
Act of 1980 and the Interim Rules of Court quite
clearly delineate the jurisdiction of the Supreme
Court in civil cases as encompassing a review on
appeal only on questions of law as well as original
petitions in certain special civil actions like
certiorari, prohibition and mandamus.
The present petition does not come under any of
the above. Obviously, the petition is not an appeal
from the decision of any lower court or quasi-
judicial body, as in fact, the same is indeed an
original petition for restitution. Also, the present
petition is certainly not one for certiorari,
prohibition or mandamus because there is no
tribunal, board or officer that has acted without or
in excess of jurisdiction or with grave abuse of
discretion, or has neglected the performance of an
act which the law enjoins as a duty, and from-
whose acts or negligence the petitioners were
supposed to have been aggrieved thereby. On the
basis alone of jurisdiction, the petition at bar
should be dismissed.
A reading of the instant petition would show,
however, that the same partakes of the nature of
mandamus because it seeks judgment directing
and commanding the Secretary of Budget, the
National Treasurer, the CB, the Monetary Board
and the PVB Liquidator to do certain specific acts.
Unfortunately, the facts hereof do not present a
case where such offices and officials are, by law,
mandated to do the adverted acts, even less, that
they have neglected to perform them.
Moreover, from what has already been said of the power of the Central
Bank to regulate commercial banks, and to order their liquidation
whenever warranted, it would seem that the affairs of the Bank are best
entrusted to the liquidator court at this time rather than managed
directly by the petitioners. This is no reflection on their competence
and sincerity, not to mention their genuine concern for the Bank, of
which they are the intended beneficiaries and owners. It is only that,
considering the expertise of the Central Bank oh this matter, and the
familiarity of the liquidator court with the ramifications of the problem
at hand, we feel it is advisable that they be allowed, as long as the
administration has not yet adopted its own plans, to devise the proper
steps to relieve the Bank of its present difficulties.
III

35
The Court reiterates its hope that the administrative authorities may
still find a way to rehabilitate the Bank even at this late hour. This is
still possible even with this decision, for all we are saying here is that
the Central Bank has the power to liquidate the Bank under existing
laws and that, in the present circumstances, its liquidation may be
undertaken under the control of the liquidator court in accordance with
the procedure prescribed by R.A. No. 265 and the guidelines herein
laid down. Such rehabilitation may still be ordered by the President of
the Philippines if she sees fit, without violation of the import of this
decision or of the pertinent laws here interpreted and applied.
WHEREFORE, judgment is hereby rendered: (a) DISMISSING the
petitions in G.R. Nos. 67125 and 82337; and (b) LIFTING the writ of
preliminary injunction dated March 26, 1987, and the temporary
restraining order dated January 21, 1989. Costs against the petitioners.
SO ORDERED.


36


37
G.R. No. 80887 September 30, 1994
BLISS DEVELOPMENT CORPORATION EMPLOYEES
UNION (BDCEU)-SENTRO NG DEMOKRATIKONG
MANGGAGAWA (SDM), petitioner,
vs.
HON. PURA FERRER CALLEJA and BLISS DEVELOPMENT
CORPORATION, respondents.
Capulong, Magpantay, Ladrido, Canilao and Malabanan for private
respondent.
KAPUNAN, J .:
The focal issue in the case at bench is whether or not Bliss
Development Corporation (BDC) is a government-owned controlled
corporation subject to Civil Service Laws, rules and regulations.
Corollary to this issue is the question of whether or not petitioner is
covered by Executive Order No. 180 and must register under Section
7 thereof as a precondition for filing a petition for certification election.
The antecedents of the case are:
On October 10, 1986, petitioner, a duly registered labor union, filed
with the Department of Labor, National Capital Region, a petition for
certification election of private respondent Bliss Development
Corporation (BDC).
Based on the position papers submitted by the parties, Med-Arbiter
Napoleon V. Fernando, in an order dated January 26, 1987, dismissed
the petition for lack of jurisdiction stating that the majority of BDC's
stocks is owned by the Human Settlement Development Corporation
(HSDC), a wholly-owned government corporation. Therefore, BDC is
subject to Civil Service law, rules and regulations. The pertinent
portion of said Order reads:
It may not be amised (sic) to further state that the
Supreme Court in its Decision in the case of
National Housing Corporation versus Benjamin
Juco and the National Labor Relations
Commission G-R 63313 promulgated on January
17, 1985 has pronounced that:
There should no longer be any
question at this time that
employees of government
owned or controlled
corporations are governed by
the Civil Service Rules and
Regulations.
Corollary to the issue of whether or not employees
of BDC may form or join labor organizations
therefore is the issue of whether or not BDC is a
government owned corporation.
The pertinent law on the matter is P.D. No. 2029
which provides that:
Section 2 Definition A
government-owned or
controlled corporation is a
stock or non-stock
corporation whether
performing government or
proprietary functions, which
is directly chartered by special
law or if organized under the
general corporation law is
owned or controlled by the
government or subsidiary
corporation, to the extent of at
least a majority of its
outstanding capital stock or of
its outstanding voting stock.
In the case at bar, it is not disputed that majority of
the stocks of BDC are owned by Human
Settlement Development Corporation, a wholly
government owned corporation, hence, this Office
cannot, but otherwise conclude that Bliss
Development Corporation is a government owned
corporation whose employees are governed not by
the Labor Code but by the Civil Service law, rules,
and regulations. Its employees therefore, are
prohibited to join or form labor organization.
Further, this Office is without authority to
entertain the present petition for obvious lack of
jurisdiction.
Indeed, Opinion No. 94, series of 1985, the
Minister of Justice has declared:
In determining whether a
corporation created under the
Corporation Code is
government owned or
controlled or not, this ministry
has consistently applied the
ownership test whereby a
corporation will be deemed
owned by the government if
the majority of its voting
stocks are owned by the
government.
It appearing that Human Settlement Development
Corporation (HSDC), which is a wholly-owned
government corporation, owns a majority of the
stocks of Bliss Development Corporation (BDC),
our conclusion is that BDC is a government-
owned corporation subject to the coverage of the
Civil Service law, rules and regulations as
pronounced by the Supreme Court in the case of
NHA versus Juco.
1

Petitioner then filed an appeal with the Bureau of Labor Relations.
In the meantime, or on June 1, 1987 Executive Order No. 180 was
issued the then President Corazon C. Aquino extending to government
employees the right to organize and bargain collectively. Sections 1
and 7 of said Order provide:
Sec. 1. This Executive Order applies to all
employees of all branches, subdivisions,
instrumentalities, and agencies of the government,
including government-owned or controlled
corporations with original charters. . . . (Emphasis
supplied)

38
Sec. 7. Government employees' organizations
shall register with the Civil Service Commission
and the Department of Labor and Employment.
The application shall be filed with the Bureau of
Labor Relations of the Department which shall
process the same in accordance with the
provisions of the Labor Code of the Philippines, as
amended. Applications may also be filed with the
Regional Offices of the Department of Labor and
Employment which shall immediately transmit the
said applications to the Bureau of Labor Relations
within three (3) days from receipt hereof.
On August 7, 1987, Director Pura Ferrer-Calleja of the Bureau of
Labor Relations issued an Order dismissing the appeal. Said Order is
reproduced hereunder:
For disposition is an appeal of the Bliss
Development Corporation Employees Union
Sentro ng Demokratikong Manggagawa
(BDCEU-SDM) from the Order of the Med-
Arbiter dismissing its petition for direct
certification/certification election dated January
26, 1987.
On January 26, 1987, the Med-Arbiter issued an
Order dismissing the petition filed by BDCEU-
SDM. He ruled that the Bliss Development
Corporation which is under the then Ministry of
Human Settlement, is a government Corporation
where the workers are prohibited from organizing
and joining labor unions. The Med-Arbiter cited
Opinion No. 94 series of 1985, of the Minister of
Justice which is hereunder quoted as follows:
In determining whether a corporation
created under the Corporation Code is
government-owned or a controlled or
not, this Ministry has consistently
applied the ownership test whereby a
corporation will be deemed owned by
the government if all or a majority of its
stocks are owned by the government,
and it will be deemed controlled by the
government, if the majority of its voting
stocks are owned by the government.
It appearing that HSDC, which is a
wholly-owned government corporation,
owns a majority of the stocks of BDC,
our conclusion is that BDC is a
government-owned corporation subject
to the coverage of the Civil Service Law
and rules as pronounced by the Supreme
Court in the case of NHA vs. Juco.
But circumstances have changed. With the
issuance of Executive Order No. 180 dated June 1,
1987, government employees are now given the
right to organize and bargain collectively. This,
therefore, renders academic the order subject of
the appeal.
xxx xxx xxx
Consequently, this Bureau hereby enjoins the
Petitioner to register in accordance with the
aforecited provision. Meantime, the petition is
dismissed without prejudice to its refiling after
petitioner is granted registration to avoid legal
complications.
WHEREFORE, in view of the foregoing, the case
is hereby dismissed without prejudice.
SO ORDERED.
2

Taking exception to the Director's Order, petitioner brought the instant
petition to annul the same on the following grounds:
I
THE DIRECTOR GRAVELY ABUSED HER
DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN SHE ORDERED
PETITIONER TO REGISTER UNDER
SECTION 7 OF EXECUTIVE ORDER NO. 180
WHICH DOES NOT COVER PETITIONER;
II
THE DIRECTOR GRAVELY ABUSED HER
DISCRETION WHEN SHE INSISTED ON
ENFORCING AN OPINION OF THE
MINISTER OF JUSTICE WHICH
RESPONDENT BDC ITSELF HAS
CONSISTENTLY IGNORED AND
CONTINUES TO IGNORE AND WHICH THE
ENTIRE GOVERNMENT DOES NOT CARE
TO ENFORCE.
3

In a resolution dated May 29, 1989 the Court gave due course to the
petition and required the parties to file their respective memoranda
which was complied with. The Solicitor General begged leave to be
relieved from filing a comment on the petition and a memorandum,
averring that he could not sustain the position of respondent Director.
The petition is impressed with merit.
Section 1 of Executive Order No. 180 expressly limits its application
to only government-owned or controlled corporations with original
charters. Hence, public respondent's order dated August 7, 1987
requiring petitioner to register in accordance with Section 7 of
executive Order No. 180 is without legal basis.
Without categorically saying so, public respondent sustained the Med-
Arbiter's invocation of the case of National Housing Corporation v.
Juco,
4
which rules that the inclusion of "government-owned or
controlled corporations" within the embrace of the civil service shows
a deliberate effort of the framers of the 1973 Constitution to plug an
earlier loophole which allowed government-owned or controlled
corporations to avoid the full consequences of the all encompassing
coverage of the civil service system. In said case, we stressed that:
Section 1 of Article XII-B, Constitution uses the
word "every" to modify the phrase "government-
owned or controlled corporation."

39
Every means each one of a group, without
exception. It means all possible and all, taken one
by one. Of course, our decision in this case refers
to a corporation created as a government-owned or
controlled
entity. . . . .
5

However, our ruling in NHC v. Juco
6
case, which was decided under
the 1973 Constitution, lost its applicability with the advent of the 1987
Constitution. Thus, in National Service Corporation v. NLRC,
7
we
held that:
. . . (I)n the matter of coverage by the civil service
of government-owned or controlled corporations,
the 1987 Constitution starkly varies from the 1973
Constitution, upon which National Housing
Corporation vs. Juco is based. Under the 1973
Constitution, it was provided that:
The civil service embraces
every branch, agency,
subdivision, and
instrumentality of the
Government, including every
government-owned or
controlled corporation. . . .
[Constitution, 1973, Art. II-B,
Sec. I(1)]
On the other hand, the 1987 Constitution provides
that:
The civil service embraces all
branches, subdivisions,
instrumentalities, and
agencies of the Government,
including government-owned
or controlled corporations
with original charter.
(Emphasis supplied)
[Constitution (1987), Art. IX-
B, Sec. 2(1).
Thus the situations sought to be avoided by the
1973 Constitution and expressed by the Court in
the National Housing Corporation case in the
following manner
The infirmity of the respondents'
position lies in its permitting a
circumvention or emasculation of
Section 1, Article XII-B of the
Constitution. It would be possible for a
regulate ministry of government to
create a host of subsidiary corporations
under the Corporation Code funded by a
willing legislature. A government-
owned corporation could create several
subsidiary corporations. These
subsidiary corporations would enjoy the
best of two worlds. Their officials and
employees would be privileged
individuals, free from the strict
accountability required by the Civil
Service Decree and the regulations of
the Commission on Audit. Their
incomes would not be subject to the
competitive restrains of the open market
nor to the terms and conditions of civil
service employment. Conceivably, all
government-owned or controlled
corporations could be created, no longer
by special charters, but through
incorporations under the general law.
The Constitutional amendment
including such corporations in the
embrace of the civil service would cease
to have application. Certainly, such a
situation cannot be allowed to exist.
[134 SCRA 182-183]
appear relegated to relative insignificance by the
1987 Constitutional provision that the Civil
Service embraces government-owned or
controlled corporations with original charter; and,
therefore, by clear implication, the Civil Service
does not include government-owned or controlled
corporations which are organized as subsidiaries
of government-owned or controlled corporations
under the general corporation law.
8

A corporation is created by operation of law. It acquires a judicial
personality either by special law or a general law. The general law
under which a private corporation may be formed or organized is the
Corporation Code, the requirements of which must be complied with
by those wishing to incorporate. Only upon such compliance will the
corporation come into being and acquire a juridical personality, thus
giving rise to is right to exist and act as a legal entity. On the other
hand, a government corporation is normally created by special law,
referred to often as a charter.
9

BDC is a government-owned corporation created under the
Corporation Law. It is without a charter, governed by the Labor Code
and not by the Civil Service Law hence, Executive Order No. 180 does
not apply to it.
Consequently, public respondent committed grave abuse of discretion
in ordering petition to register under Section 7, of Executive Order No.
180 as a precondition for filing a petition for certification election.
WHEREFORE, the instant petition is hereby GRANTED. The order
of public respondent dated August 7, 1987 is SET ASIDE and the
Director of Labor Relations is hereby directed to give due course of
petitioner's application for certification election.
SO ORDERED.


40


41
G.R. Nos. 140199-200 February 6, 2002
FELICITO S. MACALINO, petitioner,
vs.
SANDIGANBAYAN and OFFICE OF THE OMBUDSMAN,
respondents.
D E C I S I O N
PARDO, J .:
The case is a petition for certiorari
1
assailing the jurisdiction of the
Ombudsman and the Sandiganbayan to take cognizance of two
criminal cases
2
against petitioner and his wife Liwayway S. Tan,
contending that he is not a public officer within the jurisdiction of the
Sandiganbayan.
3

On September 16, 1992, the Special Prosecutor, Office of the
Ombudsman, with the approval of the Ombudsman, filed with the
Sandiganbayan two informations against petitioner and Liwayway S.
Tan charging them with estafa through falsification of official
documents (Criminal Case No. 18022) and frustrated estafa through
falsification of mercantile documents (Criminal Case No. 19268), as
follows:
"CRIMINAL CASE NO. 18022
"That on or about the 15th day of March, 1989 and for sometime prior
or subsequent thereto, in the Municipality of Mandaluyong, Metro
Manila, and within the jurisdiction of this Honorable Court, the above-
named accused, FELICITO S. MACALINO, being then the Assistant
Manager of the Treasury Division and the Head of the Loans
Administration & Insurance Section of the Philippine National
Construction Corporation (PNCC), a government-controlled
corporation with offices at EDSA corner Reliance St., Mandaluyong,
and hence, a public officer, while in the performance of his official
functions, taking advantage of his position, committing the offense in
relation to his office and conspiring and confederating with his spouse
LIWAYWAY S. TAN, being then the owner of Wacker Marketing,
did then and there willfully, unlawfully, feloniously and by means of
deceit defraud the Philippine National Construction Corporation in the
following manner: in preparing the application with the Philippine
National Bank, Buendia Branch for the issuance of a demand draft in
the amount of NINE HUNDRED EIGHTY THREE THOUSAND SIX
HUNDRED EIGHTY-TWO & 11/100 PESOS (P983,682.11),
Philippine Currency, in favor of Bankers Trust Company, accused
FELICITO S. MACALINO superimposed the name "Wacker
Marketing" as payee to make it appear that the demand draft was
payable to it, when in truth and in fact and as the accused very well
knew, it was the Bankers Trust Company which was the real payee as
indicated in Check Voucher No. 3-800-89 and PNB Check No.
B236746 supporting said application for demand draft; subsequently
accused FELICITO S. MACALINO likewise inserted into the letter of
PNCC to PNB Buendia Branch the words "payable to Wacker
Marketing" to make it appear that the demand drafts to be picked up
by the designated messenger were payable to Wacker Marketing when
in truth and in fact the real payee was Bankers Trust Company; and as
a result of such acts of falsification, PNB Buendia issued 19 demand
drafts for P50,000.00 each and another demand draft for P33,682.11,
all, payable to Wacker Marketing, which were subsequently delivered
to accused Felicitor S. Macalino and which accused LIWAYWAY S.
TAN thereafter exchanged with PNB Balanga Branch for 19 checks at
P50,000.00 each and another for P33,682.11 and all of which she later
deposited into Account No. 0042-0282-6 of Wacker Marketing at
Philtrust Cubao, thereby causing pecuniary damage and prejudice to
Philippine National Construction Corporation in the amount of
P983,682.11.
"CONTRARY TO LAW.
"Manila, Philippines, August 24, 1992."
4

"CRIMINAL CASE NO. 19268
"That on or about the 4th day of April, 1990, and subsequently
thereafter, in the Municipality of Mandaluyong, Metro Manila, and
within the jurisdiction of this Honorable Court, the above-named
accused, FELICITO S. MACALINO, being then the Assistant
Manager of the Treasury Division and the Head of the Loans
Administration and Insurance Section of the Philippine National
Construction Corporation, a government-controlled corporation with
offices at EDSA corner Reliance St., Mandaluyong, Metro Manila, and
hence, a public officer, while in the performance of his official
functions, taking advantage of his position, committing the offense in
relation to his office, and conspiring and confederating with his spouse
LIWAYWAY S. TAN, being then the owner of Wacker Marketing,
did then and there willfully, unlawfully, feloniously and by means of
deceit defraud the Philippine National Construction Corporation in the
following manner: after receiving Check Voucher No. 04-422-90
covering the partial payment by PNCC of the sinking fund to
International Corporate Bank (Interbank) as well as Check No. 552312
for TWO MILLION TWO HUNDRED FIFTY THOUSAND PESOS
(P2,250,000.00), Philippine Currency, payable to Interbank for the
purpose, accused FELICITO S. MACALINO falsified PNB Check No.
552312 by altering the payee indicated therein to make it appear that
the aforesaid check was payable to Wacker Marketing instead of
Interbank and further falsified the schedule of check disbursements
sent to PNB Buendia by making it appear therein that the payee of
Check No. 552312 was Wacker Marketing when in truth and in fact
and as the accused very well knew, it was Interbank which was the real
payee; accused LIWAYWAY S. TAN thereafter deposited Check No.
552312 into Account No. 0042-0282-6 of Wacker Marketing at
Philtrust Cubao and Wacker Marketing subsequently issued Philtrust
Check No. 148039 for P100,000.00 in favor of accused FELICITO S.
MACALINO; which acts of falsification performed by the accused
would have defrauded the Philippine National Construction
Corporation of P2,250,000.00 had not PNB Buendia ordered the
dishonor of Check No. 552312 after noting the alteration/erasures
thereon, thereby failing to produce the felony by reason of causes
independent of the will of the accused.
"CONTRARY TO LAW.
"Manila, Philippines, May 28, 1993."
5

Upon arraignment on November 9, 1992, petitioner pleaded not guilty
to the charges. Hence, trial proceeded.
6

However, during the initial presentation of evidence for the defense,
petitioner moved for leave to file a motion to dismiss on the ground
that the Sandiganbayan has no jurisdiction over him since he is not a
public officer because the Philippine National Construction
Corporation (PNCC), formerly the Construction and Development
Corporation of the Philippines (CDCP), is not a government-owned or
controlled corporation with original charter.
7
The People of the
Philippines opposed the motion.
8

On August 5, 1999, the Sandiganbayan promulgated a resolution
denying petitioners motion to dismiss for lack of merit.
9


42
Hence, this petition.
10

The Issue
The sole issue raised is whether petitioner, an employee of the PNCC,
is a public officer within the coverage of R. A. No. 3019, as amended.
The Courts Ruling
Petitioner contends that an employee of the PNCC is not a public
officer as defined under Republic Act No. 3019, as follows:
"Sec. 2. (a) xxx xxx xxx.
"(b) Public officer includes elective and appointive officials and
employees, permanent or temporary, whether in the unclassified or
classified or exempted service receiving compensation, even nominal,
from the government as defined in the preceding paragraph."
We agree.
To resolve the issue, we resort to the 1987 Constitution. Article XI, on
the Accountability of Public Officers, provides:
"Section 12. The Ombudsman and his deputies, as protectors of the
people, shall act promptly on complaints filed in any form or manner
against public officials or employees of the Government, or any
subdivision, agency or instrumentality thereof, including government-
owned or controlled corporations x x x."
"Section 13. The Office of the Ombudsman shall have the following
powers, functions and duties:
"1. Investigate on its own, or on complaint by any person,
any act or omission of any public official or employee, office
or agency, when such act or omission appears to be illegal,
unjust, improper and inefficient. x x x
"2. Direct, upon complaint or at its instance, any public
official or employee of the government, or any subdivision,
agency or instrumentality thereof, as well as of any
government-owned or controlled corporations with original
charters, to perform and expedite any act or duty required by
law, or to stop, prevent, and correct any abuse or impropriety
in the performance of duties." (underscoring supplied)
Further, Article IX-B, Section 2 (1) of the 1987 Constitution provides:
"The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including
government-owned and controlled corporations with original
charters." (underscoring supplied)
Republic Act No. 6770 provides:
"Section 15. Powers, Functions and Duties -The Office of the
Ombudsman shall have the following powers, functions and duties:
"1. Investigate and prosecute on its own or on complaint by any person,
any act or omission of any public officer or employee, office or agency,
when such act or omission appears to be illegal, unjust, improper or
inefficient. x x x.
"2. Direct, upon complaint or at its own instance, any officer or
employee of the Government, or of any subdivision, agency or
instrumentality thereof, as well as any government-owned or
controlled corporations with original charters, to perform and expedite
any act or duty required by law, or to stop, prevent, and correct any
abuse or impropriety in the performance of duties."
Inasmuch as the PNCC has no original charter as it was incorporated
under the general law on corporations, it follows inevitably that
petitioner is not a public officer within the coverage of R. A. No. 3019,
as amended. Thus, the Sandiganbayan has no jurisdiction over him.
The only instance when the Sandiganbayan has jurisdiction over a
private individual is when the complaint charges him either as a co-
principal, accomplice or accessory of a public officer who has been
charged with a crime within the jurisdiction of Sandiganbayan.
11

The cases
12
cited by respondent People of the Philippines are
inapplicable because they were decided under the provisions of the
1973 Constitution which included as public officers, officials and
employees of corporations owned and controlled by the government
though organized and existing under the general corporation
law.1wphi1 The 1987 Constitution excluded such corporations.
The crimes charged against petitioner were committed in 1989 and
1990.
13
The criminal actions were instituted in 1992. It is well-settled
that "the jurisdiction of a court to try a criminal case is determined by
the law in force at the institution of the action."
14

The Fallo
IN VIEW WHEREOF, the Court GRANTS the petition. The Court
SETS ASIDE the order dated July 29, 1999 of the Sandiganbayan in
Criminal Cases Nos. 18022 and 19268 and ORDERS the DISMISSAL
of the two (2) cases against petitioner and his wife.
No costs.
SO ORDERED.