G.R. No.

L-66614 January 25, 1988

PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICS ADMINISTRATION,respondents.
BIDIN, J.:
This is a Petition for Review on certiorari seeking the reversal of the decision of the Intermediate Appellate Court, Third Division * dated
February 29, 1984 in AC-G.R. No. CV No. 61705 entitled Mobil Oil Philippines, Inc., plaintiff-appellee vs. Primitivo Leveriza Parungao,
Antonio C. Vasco and Civil Aeronautics Administration, defendants-appellants; Primitive Leveriza, Fe Leveriza Parungao and Antonio
C. Leveriza, cross-defendant, affirming in toto the decision of the trial court dated April 6, 1976.
As found by the trial court and adopted by the Intermediate Appellate Court, the facts of this case are as follows:
Around three contracts of lease resolve the basic issues in the instant case. These three contracts are as follows:
First Contract. For purposes of easy reference and brevity, this contract shall be referred to hereinafter as Contract
A. This is a "CONTRACT OF LEASE", executed between the REPUBLIC OF THE PHILIPPINES, represented by
Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, and ROSARIO C. LEVERIZA, as lessee, on April 2,
1965, over a certain parcel of land at the MIA area, consisting of approximately 4,502 square meters, at a monthly
rental of P450.20, for a period of 25 years, (Exhibit "A", Exhibit "I-Leverizas", Exhibit "I-CAA").
Second Contracts. For purposes of easy references and brevity, this contract shall be referred to hereinafter as
Contract B. This is a "LEASE AGREEMENT", executed between ROSARIO C. LEVERIZA, as lessor, and Plaintiff
MOBIL OIL PHILIPPINES, INC., as lessee on May 21, 1965, over 3,000 square meters of that SAME Parcel of land
subject of Contract A above mentioned, at a monthly rental of P1,500.00, for a period of 25 years (Exhibit 'B', Exhibit
4-Leverizas' ).
Third Contract. For purposes of easy reference and brevity, this contract shall be referred to hereinafter as
Contract C. This is a "LEASE AGREEMENT", executed between Defendant CIVIL AERONAUTICS
ADMINISTRATION, as lessor, and plaintiff MOBIL OIL PHILIPPINES, INC., as lessee, on June 1, 1968 over that
SAME parcel of land (Lot A, on plan being a portion of Parcel, Psu 2031), containing an area of 3,000 square meters
more or less, at a monthly rental of P.25 per square meter for the second 200 square meters, and P.20 per square
meter for the rest, for a period of 29 (sic) years. (Exhibit "C").
There is no dispute among the parties that the subject matter of the three contracts of lease above mentioned,
Contract A, Contract B, and Contract C, is the same parcel of land, with the noted difference that while in Contract A,
the area leased is 4,502 square meters, in Contract B and Contract C, the area has been reduced to 3,000 square
meters. To summarize:
Contract A a lease contract of April 2, 1965 between the Republic of the Philippines, represented
by Defendant Civil Aeronautics Administration and Rosario C. Leveriza over a parcel of land
containing an area of 4,502 square meters, for 25 years.
Contract B a lease contract (in effect a sublease) of May 21, 1965 between defendant Rosario
C. Leveriza and plaintiff Mobil Oil Philippines, Inc. over the same parcel of land, but reduced to
3,000 square meters for 25 years; and
Contract C a lease contract of June 1, 1968 between defendant Civil Aeronautics Administration
and plaintiff Mobil Oil Philippines, Inc., over the same parcel of land, but reduced to 3,000 square
meters, for 25 years.
It is important to note, for a clear understanding of the issues involved, that it appears that defendant Civil
Aeronautics Administration as LESSOR, leased the same parcel of land, for durations of time that overlapped to two
lessees, to wit: (1) Defendant Rosario C. Leveriza, and that plaintiff Mobil Oil Philippines, Inc., as LESSEE, leased
the same parcel of land from two lessors, to wit: (1) defendant Rosario C. Leveriza and (2) defendant Civil
Aeronautics Administration, Inc., for durations of time that also overlapped.
For purposes of brevity defendant Civil Aeronautics Administration shall be referred to hereinafter as defendant CAA.

Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is now deceased. This is the reason why
her successor-in-interest, her heirs, are sued, namely: Defendants Primitive Leveriza, her second husband, (now also
deceased), Fe Leveriza Parungao, her daughter by her second husband, and Antonio C. Vasco, her son by her first
husband. For purposes of brevity, these defendants shall be referred to hereinafter as Defendants Leveriza.
Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as the Plaintiff. (pp. 95-99, Record on
Appeal).
Plaintiff in this case seeks the rescission or cancellation of Contract A and Contract B on the ground that Contract A
from which Contract B is derived and depends has already been cancelled by the defendant Civil Aeronautics
Administration and maintains that Contract C with the defendant CAA is the only valid and subsisting contract insofar
as the parcel of land, subject to the present litigation is concerned. On the other hand, defendants Leverizas' claim
that Contract A which is their contract with CAA has never been legally cancelled and still valid and subsisting; that it
is Contract C between plaintiff and defendant CAA which should be declared void.
Defendant CAA asserts that Exhibit "A" is still valid and subsisting because its cancellation by Guillermo Jurado was
ineffective and asks the court to annul Contract A because of the violation committed by defendant Leveriza in leasing
the parcel of land to plaintiff by virtue of Contract B without the consent of defendant CAA. Defendant CAA further
asserts that Contract C not having been approved by the Director of Public Works and Communications is not
valid. ...
xxx xxx xxx
After trial, the lower court render judgment on April 6, 1976 the dispositive part of which reads:
WHEREFORE, after having thus considered the evidence of all the parties, testimonial and documentary, and their
memoranda and reply-memoranda, this Court hereby renders judgment:
1. Declaring Contract A as having been validly cancelled on June 28, 1966, and has therefore
ceased to have any effect as of that date;
2. Declaring that Contract B has likewise ceased to have any effect as of June 28, 1966 because of
the cancellation of Contract A;
3. Declaring that Contract C was validly entered into on June 1, 1968, and that it is still valid and
subsisting;
4. Ordering defendant CAA to refund to defendants Leverizas the amount of P32,189.30 with 6%
per annum until fully paid;
5. Ordering defendants Leverizas to refund to plaintiff the amount of P48,000.00 with 6% interest
per annum until fully paid;
6. Dismissing defendants Leverizas' four counterclaims against plaintiff;
7. Dismissing defendants Leverizas' cross-claim against defendant CAA;
8. Dismissing defendant CAA's counterclaim against plaintiff;
9. Dismissing defendant CAA's counterclaim against defendant Leverizas.
No pronouncements as to costs.
On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly discovered evidence, lack of jurisdiction of the
court over the case and lack of evidentiary support of the decision which was denied in the order of November 12,1976 (Rollo, p. 17).
On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot lease was properly registered in the name
of the Republic of the Philippines, it was only the President of the Philippines or an officer duly designated by him who could execute
the lease contract pursuant to Sec. 567 of the Revised Administrative Code; that the Airport General Manager has no authority to
cancel Contract A, the contract entered into between the CAA and Leveriza, and that Contract C between the CAA and Mobil was void

for not having been approved by the Secretary of Public Works and Communications. Said motion was however denied on November
12, 1976 (Rollo, p. 18).
On appeal, the Intermediate Appellate Court, being in full accord with the trial court, rendered a decision on February 29, 1984, the
dispositive part of which reads:
WHEREFORE, finding no reversible error in the decision of the lower court dated April 6, 1976, the same is hereby
affirmed in toto.
Hence, this petition.
The petitioners raised the following assignment of errors:
I
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE ADMINISTRATOR OF THE CIVIL
AERONAUTICS ADMINISTRATION (CAA) HAD THE STATUTORY AUTHORITY TO LEASE, EVEN WITHOUT
APPROVAL OF THE THEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, REAL PROPERTY
BELONGING TO THE REPUBLIC OF THE PHILIPPINES.
II
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE ADMINISTRATOR OF THE CIVIL
AERONAUTICS ADMINISTRATION HAD STATUTORY AUTHORITY, WITHOUT THE APPROVAL OF THE THEN
SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, TO CANCEL A LEASE CONTRACT OVER REAL
PROPERTY OWNED BY THE REPUBLIC OF THE PHILIPPINES, WHICH CONTRACT WAS APPROVED, AS
REQUIRED BY LAW, BY THE SECRETARY.
III
THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE CONTRACT OF SUBLEASE
(CONTRACT B) ENTERED INTO BETWEEN PETITIONERS' PREDECESSOR-IN-INTEREST AND RESPONDENT
MOBIL OIL PHILIPPINES, INC. WAS WITHOUT THE CONSENT OF THE ADMINISTRATOR OF THE CIVIL
AERONAUTICS ADMINISTRATION.
The petition is devoid of merit.
There is no dispute that Contract "A" at the time of its execution was a valid contract. The issue therefore is whether or not said contract
is still subsisting after its cancellation by CAA on the ground of a sublease executed by petitioners with Mobil Oil Philippines without the
consent of CAA and the execution of another contract of lease between CAA and Mobil Oil Philippines (Contract "C").
Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid sublease and does not constitute a ground for the
cancellation of Contract "A", while Contract "C", a subsequent lease agreement between CAA and Mobil Oil Philippines is null and void,
for lack of approval by the Department Secretary. Petitioners anchor their position on Sections 567 and 568 of the Revised
Administrative Code which require among others, that subject contracts should be executed by the President of the Philippines or by an
officer duly designated by him, unless authority to execute the same is by law vested in some other officer (Petition, Rollo, pp. 15-16).
At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validly cancelled on June 28, 1966 and so was
Contract "B" which was derived therefrom. Accordingly, it maintains that Contract "C" is the only valid contract insofar as the parcel of
land in question is concerned and that approval of the Department Head is not necessary under Section 32 (par. 24) of the Republic Act
776 which expressly vested authority to enter into such contracts in the Administrator of CAA (Comment; Rollo, p. 83).
On its part, respondent Civil Aeronautics Administration took the middle ground with its view that Contract "A" is still subsisting as its
cancellation is ineffective without the approval of the Department Head but said contract is not enforceable because of petitioners'
violation of its terms and conditions by entering into Contract "B" of sublease without the consent of CAA. The CAA further asserts that
Contract "C" not having been approved by the Secretary of Public Works and Communications, is not valid (Rollo, p. 43). However, in
its comment filed with the Supreme Court, the CAA made a complete turnabout adopting the interpretation and ruling made by the trial
court which was affirmed by the Intermediate Appellate Court (Court of Appeals), that the CAA Administrator has the power to execute
the deed or contract of lease involving real properties under its administration belonging to the Republic of the Philippines without the
approval of the Department Head as clearly provided in Section 32, paragraph (24) of Republic Act 776.

The issue narrows down to whether or not there is a valid ground for the cancellation of Contract "A."
Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee specifically "for the purpose of operating and
managing a gasoline station by the latter, to serve vehicles going in and out of the airport."
As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of paragraph 7 of said Contract
reads in full:
7. The Party of the Second part may transfer her rights to the leased premises but in such eventuality, the consent of
the Party of the First Part shall first be secured. In any event, such transfer of rights shall have to respect the terms
and conditions of this agreement.
Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of the contract. Said paragraph reads:
8. Failure on the part of the Party of the Second Part to comply with the terms and conditions herein agreed upon
shall be sufficient for revocation of this contract by the Party of the First Part without need of judicial demand.
It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract "B") with Mobil Oil Philippines without the
consent of CAA (lessor). The cancellation of the contract was made in a letter dated June 28, 1966 of Guillermo P. Jurado, Airport
General Manager of CAA addressed to Rosario Leveriza, as follows:
(Letterhead)
June 28, 1966
Mrs. Rosario Leveriza
Manila International Airport
Madam:
It has been found out by the undersigned that you have sublet the property of the CAA leased to
you and by virtue of this, your lease contract is hereby cancelled because of the violation of the
stipulations of the contract. I would like to inform you that even without having sublet the said
property the said contract would have been cancelled as per attached communication.
Very truly yours,
For the Director:
(Sgd.) Illegible
(Typed)
GUILLERMO P. JURADO
Airport General Manager
Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the Airport General Manager had no legal
authority to make the cancellation. They maintain that it is only the Secretary of Public Works and Communications, acting for the
President, or by delegation of power, the Director of Civil Aeronautics Administration who could validly cancel the contract. They do
admit, however, and it is evident from the records that the Airport General Manager signed "For the Director." Under the circumstances,
there is no question that such act enjoys the presumption of regularity, not to mention the unassailable fact that such act was
subsequently affirmed or ratified by the Director of the CAA himself (Record on Appeal, pp. 108-110).
Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in effect, repealing an act of the Secretary
which is beyond the authority of the Administrator.
Such argument is untenable. The terms and conditions under which such revocation or cancellation may be made, have already been
specifically provided for in Contract "A" which has already been approved by the Department Head, It is evident that in the
implementation of aforesaid contract, the approval of said Department Head is no longer necessary if not redundant.

It is further contended that even granting that such cancellation was effective, a subsequent billing by the Accounting Department of the
CAA has in effect waived or nullified the rescission of Contract "A."
It will be recalled that the questioned cancellation of Contract "A" was among others, mainly based on the violation of its terms and
conditions, specifically, the sublease of the property by the lessee without the consent of the lessor.
The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after the cancellation of Contract "A" is
obviously an error. However, this Court has already ruled that the mistakes of government personnel should not affect public interest.
In San Mauricio Mining Company v. Ancheta (105 SCRA 391, 422), it has been held that as a matter of law rooted in the protection of
public interest, and also as a general policy to protect the government and the people, errors of government personnel in the
performance of their duties should never deprive the people of the right to rectify such error and recover what might be lost or be
bartered away in any actuation, deal or transaction concerned. In the case at bar, the lower court in its decision which has been
affirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the amount of rentals which was not due from them with
6% interest per annum until fully paid.
Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a mere sublease to respondent Mobil Oil
Philippines, Inc. and requires no prior consent of CAA to perfect the same. Citing Article 1650 of the Civil Code, they assert that the
prohibition to sublease must be expressed and cannot be merely implied or inferred (Rollo, p. 151).
As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a prior consent interprets the first sentence of
paragraph 7 of Contract "A" to refer to an assignment of lease under Article 1649 of the Civil Code and not to a mere sublease. A
careful scrutiny of said paragraph of Contract "A" clearly shows that it speaks of transfer of rights of Rosario Leveriza to the leased
premises and not to assignment of the lease (Rollo, pp. 48-49).
Petitioners likewise argued that it was contemplated by the parties to Contract "A" that Mobil Oil Philippines would be the owner of the
gasoline station it would construct on the leased premises during the period of the lease, hence, it is understood that it must be given a
right to use and occupy the lot in question in the form of a sub-lease (Rollo, p. 152).
In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage and operate the gasoline station. The fact
that Mobil Oil was mentioned in that contract was clearly not intended to give approval to a sublease between petitioners and said
company but rather to insure that in the arrangements to be made between them, it must be understood that after the expiration of the
lease contract, whatever improvements have been constructed in the leased premises shall be relinquished to CAA. Thus, this Court
held that "the primary and elementary rule of construction of documents is that when the words or language thereof is clear and plain or
readily understandable by any ordinary reader thereof, there is absolutely no room for interpretation or construction anymore." (San
Mauricio Mining Company v. Ancheta, supra).
Finally, petitioners contend that the administrator of CAA cannot execute without approval of the Department Secretary, a valid contract
of lease over real property owned by the Republic of the Philippines, citing Sections 567 and 568 of the Revised Administrative Code,
which provide as follows:
SEC. 567. Authority of the President of the Philippines to execute contracts relative to real property. When the
Republic of the Philippines is party to a deed conveying the title to real property or is party to any lease or other
contract relating to real property belonging to said government, said deed or contract shall be executed on behalf of
said government by the President of the Philippines or by an officer duly designated by him, unless authority to
execute the same is by law expressly vested in some other officer. (Emphasis supplied)
SEC. 568. Authority of national officials to make contract. Written contracts not within the purview of the preceding
section shall, in the absence of special provision, be executed, with the approval of the proper Department Head, by
the Chief of the Bureau or Office having control of the appropriation against which the contract would create a charge;
or if there is no such chief, by the proper Department Head himself or the President of the Philippines as the case
may require.
On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease real property belonging to the Republic
of the Philippines under its administration even without the approval of the Secretary of Public Works and Communications, which
authority is expressly vested in it by law, more particularly Section 32 (24) of Republic Act 776, which reads:
Sec. 32. Powers and Duties of the Administrator. Subject to the general control and supervision of the Department
Head, the Administrator shall have, among others, the following powers and duties:
xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila International Airport and all
government aerodromes except those controlled or operated by the Armed Forces of the Philippines including such
power and duties as: ... (b) to enter into, make and execute contracts of any kind with any person, firm, or public or
private corporation or entity; (c) to acquire, hold, purchase, or lease any personal or real property; right of ways, and
easements which may be proper or necessary: Provided, that no real property thus acquired and any other real
property of the Civil Aeronautics Administration shall be sold without the approval of the President of the
Philippines. ...
There is no dispute that the Revised Administrative Code is a general law while Republic Act 776 is a special law nor
in the fact that the real property subject of the lease in Contract "C" is real property belonging to the Republic of the
Philippines.
Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by the President of the Philippines, or (2)
by an officer duly designated by him or (3) by an officer expressly vested by law. It is readily apparent that in the case at bar, the Civil
Aeronautics Administration has the authority to enter into Contracts of Lease for the government under the third category. Thus, as
correctly ruled by the Court of Appeals, the Civil Aeronautics Administration has the power to execute the deed or contract involving
leases of real properties belonging to the Republic of the Philippines, not because it is an entity duly designated by the President but
because the said authority to execute the same is, by law expressly vested in it.
Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the Civil Aeronautics Administration by
reason of its creation and existence, administers properties belonging to the Republic of the Philippines and it is on these properties
that the Administrator must exercise his vast power and discharge his duty to enter into, make and execute contract of any kind with
any person, firm, or public or private corporation or entity and to acquire, hold, purchase, or lease any personal or real property, right of
ways and easements which may be proper or necessary. The exception, however, is the sale of properties acquired by CAA or any
other real properties of the same which must have the approval of the President of the Philippines. The Court of appeals took
cognizance of the striking absence of such proviso in the other transactions contemplated in paragraph (24) and is convinced as we
are, that the Director of the Civil Aeronautics Administration does not need the prior approval of the President or the Secretary of Public
Works and Communications in the execution of Contract "C."
In this regard, this Court, ruled that another basic principle of statutory construction mandates that general legislation must give way to
special legislation on the same subject, and generally be so interpreted as to embrace only cases in which the special provisions are
not applicable (Sto. Domingo v. De los Angeles, 96 SCRA 139),. that specific statute prevails over a general statute (De Jesus v.
People, 120 SCRA 760) and that where two statutes are of equal theoretical application to a particular case, the one designed therefor
specially should prevail (Wil Wilhensen, Inc. v. Baluyot, 83 SCRA 38)
WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of Appeals appealed from is AFFIRMED in
toto.
SO ORDERED

A.M. No. 88-7-1861-RTC October 5, 1988

IN RE: DESIGNATION OF JUDGE RODOLFO U. MANZANO AS MEMBER OF THE ILOCOS NORTE PROVINCIAL COMMITTEE
ON JUSTICE.
PADILLA, J.:
On 4 July 1988, Judge Rodolfo U. Manzano, Executive Judge, RTC, Bangui, Ilocos Norte, Branch 19, sent this Court a letter which
reads:
Hon. Marcelo Fernan
Chief Justice of the Supreme Court
of the Philippines
Manila
Thru channels: Hon. Leo Medialdea
Court Administrator
Supreme Court of the Philippines
Sir:
By Executive Order RF6-04 issued on June 21, 1988 by the Honorable Provincial Governor of Ilocos Norte, Hon.
Rodolfo C. Farinas, I was designated as a member of the Ilocos Norte Provincial Committee on Justice created
pursuant to Presidential Executive Order No. 856 of 12 December 1986, as amended by Executive Order No. 326 of
June 1, 1988. In consonance with Executive Order RF6-04, the Honorable Provincial Governor of Ilocos Norte issued
my appointment as a member of the Committee. For your ready reference, I am enclosing herewith machine copies
of Executive Order RF6-04 and the appointment.
Before I may accept the appointment and enter in the discharge of the powers and duties of the position as member
of the Ilocos (Norte) Provincial Committee on Justice, may I have the honor to request for the issuance by the
Honorable Supreme Court of a Resolution, as follows:
(1) Authorizing me to accept the appointment and to as assume and discharge the powers and
duties attached to the said position;
(2) Considering my membership in the Committee as neither violative of the Independence of the
Judiciary nor a violation of Section 12, Article VIII, or of the second paragraph of Section .7, Article
IX (B), both of the Constitution, and will not in any way amount to an abandonment of my present
position as Executive Judge of Branch XIX, Regional Trial Court, First Judicial Region, and as a
member of the Judiciary; and
(3) Consider my membership in the said Committee as part of the primary functions of an Executive
Judge.
May I please be favored soon by your action on this request.

Very respectfully yours,

(Sgd) RODOLFO U. MANZANO
Judge
An examination of Executive Order No. 856, as amended, reveals that Provincial/City Committees on Justice are created to insure the
speedy disposition of cases of detainees, particularly those involving the poor and indigent ones, thus alleviating jail congestion and
improving local jail conditions. Among the functions of the Committee are
3.3 Receive complaints against any apprehending officer, jail warden, final or judge who may be found to have
committed abuses in the discharge of his duties and refer the same to proper authority for appropriate action;
3.5 Recommend revision of any law or regulation which is believed prejudicial to the proper administration of criminal
justice.
It is evident that such Provincial/City Committees on Justice perform administrative functions. Administrative functions are those which
involve the regulation and control over the conduct and affairs of individuals for; their own welfare and the promulgation of rules and
regulations to better carry out the policy of the legislature or such as are devolved upon the administrative agency by the organic law of
its existence (Nasipit Integrated Arrastre and Stevedoring Services Inc., vs. Tapucar, SP-07599-R, 29 September 1978, Blacks Law
Dictionary).
Furthermore, under Executive Order No. 326 amending Executive Order No. 856, it is provided that
Section 6. Supervision.The Provincial/City Committees on Justice shall be under the supervision of the Secretary
of justice Quarterly accomplishment reports shall be submitted to the Office of the Secretary of Justice.
Under the Constitution, the members of the Supreme Court and other courts established by law shag not be designated to any agency
performing quasi- judicial or administrative functions (Section 12, Art. VIII, Constitution).
Considering that membership of Judge Manzano in the Ilocos Norte Provincial Committee on Justice, which discharges a administrative
functions, will be in violation of the Constitution, the Court is constrained to deny his request.
Former Chief Justice Enrique M. Fernando in his concurring opinion in the case of Garcia vs. Macaraig (39 SCRA 106) ably sets forth:
2. While the doctrine of separation of powers is a relative theory not to be enforced with pedantic rigor, the practical demands of
government precluding its doctrinaire application, it cannot justify a member of the judiciary being required to assume a position or
perform a duty non-judicial in character. That is implicit in the principle. Otherwise there is a plain departure from its command. The
essence of the trust reposed in him is to decide. Only a higher court, as was emphasized by Justice Barredo, can pass on his actuation.
He is not a subordinate of an executive or legislative official, however eminent. It is indispensable that there be no exception to the
rigidity of such a norm if he is, as expected, to be confined to the task of adjudication. Fidelity to his sworn responsibility no less than
the maintenance of respect for the judiciary can be satisfied with nothing less.
This declaration does not mean that RTC Judges should adopt an attitude of monastic insensibility or unbecoming indifference to
Province/City Committee on Justice. As incumbent RTC Judges, they form part of the structure of government. Their integrity and
performance in the adjudication of cases contribute to the solidity of such structure. As public officials, they are trustees of an orderly
society. Even as non-members of Provincial/City Committees on Justice, RTC judges should render assistance to said Committees to
help promote the laudable purposes for which they exist, but only when such assistance may be reasonably incidental to the fulfillment
of their judicial duties.
ACCORDINGLY, the aforesaid request of Judge Rodolfo U. Manzano is DENIED.
SO ORDERED.

G.R. No. 102976 October 25, 1995

IRON AND STEEL AUTHORITY, petitioner, vs.THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER
CORPORATION, respondents.
FELICIANO, J.:
Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272 dated 9 August 1973 in order, generally, to
develop and promote the iron and steel industry in the Philippines. The objectives of the ISA are spelled out in the following terms:
Sec. 2. Objectives The Authority shall have the following objectives:
(a) to strengthen the iron and steel industry of the Philippines and to expand the domestic and export markets for the
products of the industry;
(b) to promote the consolidation, integration and rationalization of the industry in order to increase industry capability
and viability to service the domestic market and to compete in international markets;
(c) to rationalize the marketing and distribution of steel products in order to achieve a balance between demand and
supply of iron and steel products for the country and to ensure that industry prices and profits are at levels that
provide a fair balance between the interests of investors, consumers suppliers, and the public at large;
(d) to promote full utilization of the existing capacity of the industry, to discourage investment in excess capacity, and
in coordination, with appropriate government agencies to encourage capital investment in priority areas of the
industry;
(e) to assist the industry in securing adequate and low-cost supplies of raw materials and to reduce the excessive
dependence of the country on imports of iron and steel.
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. The authority shall have the following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease to the
companies involved if it is shown that such use of the State's power is necessary to implement the construction of
capacity which is needed for the attainment of the objectives of the Authority;
xxx xxx xxx

(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August 1973. 1 When ISA's original term expired
on 10 October 1978, its term was extended for another ten (10) years by Executive Order No. 555 dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National Development Corporation which is itself an
entity wholly owned by the National Government, embarked on an expansion program embracing, among other things, the construction
of an integrated steel mill in Iligan City. The construction of such a steel mill was considered a priority and major industrial project of the
Government. Pursuant to the expansion program of the NSC, Proclamation No. 2239 was issued by the President of the Philippines on
16 November 1982 withdrawing from sale or settlement a large tract of public land (totalling about 30.25 hectares in area) located in
Iligan City, and reserving that land for the use and immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No. 2239 were occupied by a non-operational chemical fertilizer
plant and related facilities owned by private respondent Maria Cristina Fertilizer Corporation ("MCFC"), Letter of Instruction (LOI), No.
1277, also dated 16 November 1982, was issued directing the NSC to "negotiate with the owners of MCFC, for and on behalf of the
Government, for the compensation of MCFC's present occupancy rights on the subject land." LOI No. 1277 also directed that should
NSC and private respondent MCFC fail to reach an agreement within a period of sixty (60) days from the date of LOI No. 1277,
petitioner ISA was to exercise its power of eminent domain under P.D. No. 272 and to initiate expropriation proceedings in respect of
occupancy rights of private respondent MCFC relating to the subject public land as well as the plant itself and related facilities and to
cede the same to the NSC. 2
Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August 1983, petitioner ISA commenced eminent
domain proceedings against private respondent MCFC in the Regional Trial Court, Branch 1, of Iligan City, praying that it (ISA) be
places in possession of the property involved upon depositing in court the amount of P1,760,789.69 representing ten percent (10%) of
the declared market values of that property. The Philippine National Bank, as mortgagee of the plant facilities and improvements
involved in the expropriation proceedings, was also impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA in turn placed NSC in possession and
control of the land occupied by MCFC's fertilizer plant installation.
The case proceeded to trial. While the trial was ongoing, however, the statutory existence of petitioner ISA expired on 11 August 1988.
MCFC then filed a motion to dismiss, contending that no valid judgment could be rendered against ISA which had ceased to be a
juridical person. Petitioner ISA filed its opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did dismiss the case. The dismissal was
anchored on the provision of the Rules of Court stating that "only natural or juridical persons or entities authorized by law may be
parties in a civil case." 3 The trial court also referred to non-compliance by petitioner ISA with the requirements of Section 16, Rule 3 of
the Rules of Court. 4
Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the expiration of its term, its juridical
existence continued until the winding up of its affairs could be completed. In the alternative, petitioner ISA urged that the Republic of the
Philippines, being the real party-in-interest, should be allowed to be substituted for petitioner ISA. In this connection, ISA referred to a
letter from the Office of the President dated 28 September 1988 which especially directed the Solicitor General to continue the
expropriation case.
The trial court denied the motion for reconsideration, stating, among other things that:
The property to be expropriated is not for public use or benefit [__] but for the use and benefit [__] of NSC, a government controlled
private corporation engaged in private business and for profit, specially now that the government, according to newspaper reports, is
offering for sale to the public its [shares of stock] in the National Steel Corporation in line with the pronounced policy of the present
administration to disengage the government from its private business ventures. 5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of Appeals affirmed the order of
dismissal of the trial court. The Court of Appeals held that petitioner ISA, "a government regulatory agency exercising sovereign
functions," did not have the same rights as an ordinary corporation and that the ISA, unlike corporations organized under the
Corporation Code, was not entitled to a period for winding up its affairs after expiration of its legally mandated term, with the result that
upon expiration of its term on 11 August 1987, ISA was "abolished and [had] no more legal authority to perform governmental
functions." The Court of Appeals went on to say that the action for expropriation could not prosper because the basis for the
proceedings, the ISA's exercise of its delegated authority to expropriate, had become ineffective as a result of the delegate's
dissolution, and could not be continued in the name of Republic of the Philippines, represented by the Solicitor General:

It is our considered opinion that under the law, the complaint cannot prosper, and therefore, has to be dismissed without prejudice to
the refiling of a new complaint for expropriation if the Congress sees it fit." (Emphases supplied)
At the same time, however, the Court of Appeals held that it was premature for the trial court to have ruled that the expropriation suit
was not for a public purpose, considering that the parties had not yet rested their respective cases.
In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the action for expropriation in its capacity
as agent of the Republic of the Philippines, the Republic, as principal of ISA, is entitled to be substituted and to be made a party-plaintiff
after the agent ISA's term had expired.
Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law further extending the term of ISA
after 11 August 1988 evinced a "clear legislative intent to terminate the juridical existence of ISA," and that the authorization issued by
the Office of the President to the Solicitor General for continued prosecution of the expropriation suit could not prevail over such
negative intent. It is also contended that the exercise of the eminent domain by ISA or the Republic is improper, since that power would
be exercised "not on behalf of the National Government but for the benefit of NSC."
The principal issue which we must address in this case is whether or not the Republic of the Philippines is entitled to be substituted for
ISA in view of the expiration of ISA's term. As will be made clear below, this is really the only issue which we must resolve at this time.
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:
Sec. 1. Who May Be Parties. Only natural or juridical persons or entities authorized by law may be parties in a civil action.
Under the above quoted provision, it will be seen that those who can be parties to a civil action may be broadly categorized
into two (2) groups:
(a) those who are recognized as persons under the law whether natural, i.e., biological persons, on the one hand, or
juridical person such as corporations, on the other hand; and
(b) entities authorized by law to institute actions.
Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. P.D. No. 272, as already noted,
contains express authorization to ISA to commence expropriation proceedings like those here involved:
Sec. 4. Powers and Functions. The Authority shall have the following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease to the
companies involved if it is shown that such use of the State's power is necessary to implement the construction of
capacity which is needed for the attainment of the objectives of the Authority;
xxx xxx xxx
(Emphasis supplied)
It should also be noted that the enabling statute of ISA expressly authorized it to enter into certain kinds of contracts "for and in
behalf of the Government" in the following terms:
xxx xxx xxx
(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the government, for the bulk purchase
of materials, supplies or services for any sectors in the industry, and to maintain inventories of such materials in order
to insure a continuous and adequate supply thereof and thereby reduce operating costs of such sector;
xxx xxx xxx
(Emphasis supplied)

Clearly, ISA was vested with some of the powers or attributes normally associated with juridical personality. There is, however, no
provision in P.D. No. 272 recognizing ISA as possessing general or comprehensive juridical personality separate and distinct from that
of the Government. The ISA in fact appears to the Court to be a non-incorporated agency or instrumentality of the Republic of the
Philippines, or more precisely of the Government of the Republic of the Philippines. It is common knowledge that other agencies or
instrumentalities of the Government of the Republic are cast in corporate form, that is to say, are incorporated
agencies or instrumentalities, sometimes with and at other times without capital stock, and accordingly vested with a juridical
personality distinct from the personality of the Republic. Among such incorporated agencies or instrumentalities are: National Power
Corporation; 6 Philippine Ports Authority; 7 National Housing Authority; 8 Philippine National Oil Company; 9 Philippine National
Railways; 10 Public Estates Authority; 11 Philippine Virginia Tobacco Administration, 12 and so forth. It is worth noting that the term
"Authority" has been used to designate both incorporated and non-incorporated agencies or instrumentalities of the Government.
We consider that the ISA is properly regarded as an agent or delegate of the Republic of the Philippines. The Republic itself is a body
corporate and juridical person vested with the full panoply of powers and attributes which are compendiously described as "legal
personality." The relevant definitions are found in the Administrative Code of 1987:
Sec. 2. General Terms Defined. Unless the specific words of the text, or the context as a whole, or a particular statute, require a
different meaning:
(1) Government of the Republic of the Philippines refers to the corporate governmental entity through which the functions of
government are exercised throughout the Philippines, including, save as the contrary appears from the context, the various arms
through which political authority is made effective in the Philippines, whether pertaining to the autonomous regions, the provincial, city,
municipal or barangay subdivisions or other forms of local government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various units of the Government, including a department, bureau, office,
instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with
special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned
or controlled corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as the assets and liabilities of
that agency revert back to, and are re-assumed by, the Republic of the Philippines, in the absence of special provisions of law
specifying some other disposition thereof such as, e.g., devolution or transmission of such powers, duties, functions, etc. to some other
identified successor agency or instrumentality of the Republic of the Philippines. When the expiring agency is an incorporated one, the
consequences of such expiry must be looked for, in the first instance, in the charter of that agency and, by way of supplementation, in
the provisions of the Corporation Code. Since, in the instant case, ISA is a non-incorporated agency or instrumentality of the Republic,
its powers, duties, functions, assets and liabilities are properly regarded as folded back into the Government of the Republic of the
Philippines and hence assumed once again by the Republic, no special statutory provision having been shown to have mandated
succession thereto by some other entity or agency of the Republic.
The procedural implications of the relationship between an agent or delegate of the Republic of the Philippines and the Republic itself
are, at least in part, spelled out in the Rules of Court. The general rule is, of course, that an action must be prosecuted and defended in
the name of the real party in interest. (Rule 3, Section 2) Petitioner ISA was, at the commencement of the expropriation proceedings, a
real party in interest, having been explicitly authorized by its enabling statute to institute expropriation proceedings. The Rules of Court
at the same time expressly recognize the role of representative parties:
Sec. 3. Representative Parties. A trustee of an expressed trust, a guardian, an executor or administrator, or a party authorized by
statute may sue or be sued without joining the party for whose benefit the action is presented or defended; but the court may, at any
stage of the proceedings, order such beneficiary to be made a party. . . . . (Emphasis supplied)

In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or delegate or representative of the Republic
of the Philippines pursuant to its authority under P.D. No. 272. The present expropriation suit was brought on behalf of and for the
benefit of the Republic as the principal of ISA. Paragraph 7 of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs the subject parcels of land for the construction and installation of iron and
steel manufacturing facilities that are indispensable to the integration of the iron and steel making industry which is vital to the
promotion of public interest and welfare. (Emphasis supplied)
The principal or the real party in interest is thus the Republic of the Philippines and not the National Steel Corporation, even though the
latter may be an ultimate user of the properties involved should the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the Philippines is entitled to be substituted in the expropriation proceedings
as party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the expiration of ISA's statutory term did
not by itself require or justify the dismissal of the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of ISA's statutory term, was not a
ground for dismissal of such proceedings since a party may be dropped or added by order of the court, on motion of any party or on the
court's own initiative at any stage of the action and on such terms as are just. 13 In the instant case, the Republic has precisely moved
to take over the proceedings as party-plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the Court recognized that the Republic may initiate or
participate in actions involving its agents. There the Republic of the Philippines was held to be a proper party to sue for recovery of
possession of property although the "real" or registered owner of the property was the Philippine Ports Authority, a government agency
vested with a separate juridical personality. The Court said:
It can be said that in suing for the recovery of the rentals, the Republic of the Philippines acted as principal of the
Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as its
agent. . . . 15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the Republic to commence all over again another proceeding, as the
trial court and Court of Appeals had required, was to generate unwarranted delay and create needless repetition of
proceedings:
More importantly, as we see it, dismissing the complaint on the ground that the Republic of the Philippines is not the
proper party would result in needless delay in the settlement of this matter and also in derogation of the policy
against multiplicity of suits. Such a decision would require the Philippine Ports Authority to refile the very same
complaint already proved by the Republic of the Philippines and bring back as it were to square one. 16 (Emphasis
supplied)
As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the Philippines for the ISA upon the ground
that the action for expropriation could not prosper because the basis for the proceedings, the ISA's exercise of its delegated authority to
expropriate, had become legally ineffective by reason of the expiration of the statutory term of the agent or delegated i.e., ISA. Since,
as we have held above, the powers and functions of ISA have reverted to the Republic of the Philippines upon the termination of the
statutory term of ISA, the question should be addressed whether fresh legislative authority is necessary before the Republic of the
Philippines may continue the expropriation proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested primarily in the legislative department of the government, we believe and so
hold that no new legislative act is necessary should the Republic decide, upon being substituted for ISA, in fact to continue to prosecute
the expropriation proceedings. For the legislative authority, a long time ago, enacted a continuing or standing delegation of authority to
the President of the Philippines to exercise, or cause the exercise of, the power of eminent domain on behalf of the Government of the
Republic of the Philippines. The 1917 Revised Administrative Code, which was in effect at the time of the commencement of the
present expropriation proceedings before the Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. In addition to his general supervisory authority, the
President of the Philippines shall have such other specific powers and duties as are expressly conferred or imposed on him by law, and
also, in particular, the powers and duties set forth in this Chapter.
Among such special powers and duties shall be:

(h) To determine when it is necessary or advantageous to exercise the right of eminent domain in behalf of the Government of the
Philippines; and to direct the Secretary of Justice, where such act is deemed advisable, to cause the condemnation proceedings to be
begun in the court having proper jurisdiction. (Emphasis supplied)
The Revised Administrative Code of 1987 currently in force has substantially reproduced the foregoing provision in the
following terms:
Sec. 12. Power of eminent domain. The President shall determine when it is necessary or advantageous to
exercise the power of eminent domain in behalf of the National Government, and direct the Solicitor General,
whenever he deems the action advisable, to institute expopriation proceedings in the proper court. (Emphasis
supplied)
In the present case, the President, exercising the power duly delegated under both the 1917 and 1987 Revised Administrative
Codes in effect made a determination that it was necessary and advantageous to exercise the power of eminent domain in
behalf of the Government of the Republic and accordingly directed the Solicitor General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after becoming once more the depository of primary legislative power,
had not enacted a statute extending the term of ISA, such non-enactment must be deemed a manifestation of a legislative design to
discontinue or abort the present expropriation suit. We find this argument much too speculative; it rests too much upon simple silence
on the part of Congress and casually disregards the existence of Section 12 of the 1987 Administrative Code already quoted above.
Other contentions are made by private respondent MCFC, such as, that the constitutional requirement of "public use" or "public
purpose" is not present in the instant case, and that the indispensable element of just compensation is also absent. We agree with the
Court of Appeals in this connection that these contentions, which were adopted and set out by the Regional Trial Court in its order of
dismissal, are premature and are appropriately addressed in the proceedings before the trial court. Those proceedings have yet to
produce a decision on the merits, since trial was still on going at the time the Regional Trial Court precipitously dismissed the
expropriation proceedings. Moreover, as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded an
opportunity to determine whether or not, or to what extent, the proceedings should be continued in view of all the subsequent
developments in the iron and steel sector of the country including, though not limited to, the partial privatization of the NSC.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to the extent that it affirmed the trial
court's order dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the
court a quo which shall allow the substitution of the Republic of the Philippines for petitioner Iron and Steel Authority and for further
proceedings consistent with this Decision. No pronouncement as to costs.SO ORDERED.
G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner, vs .ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER
S. GARCIA in her capacity as VOLUNTARY ARBITRATOR, respondents.
ROMERO, J.:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees
(ALDBE) arose an arbitration case to resolve the following issue:
Whether or not the company has violated the Collective Bargaining Agreement provision and the Memorandum of
Agreement dated April 1994, on promotion.
At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15, 1994. Atty. Ester S.
Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to
submit its Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper
had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining Agreement
provision nor the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator and to prohibit her from
enforcing the same.

In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence
and arguments presented by such parties who have bound themselves to accept the decision of the arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on which it is based, as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and
are compelled to accept the resolution of their dispute through arbitration by a third party. 1The essence of arbitration remains since a
resolution of a dispute is arrived at by resort to a disinterested third party whose decision is final and binding on the parties, but in
compulsory arbitration, such a third party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in
their collective agreement, to an impartial third person for a final and binding resolution. 2Ideally, arbitration awards are supposed to be
complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done by
both parties but to comply with the same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for
that particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case.
Above all, they have mutually agreed to de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to include therein provisions for a
machinery for the resolution of grievances arising from the interpretation or implementation of the CBA or company personnel
policies. 3 For this purpose, parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or include
a procedure for their selection, preferably from those accredited by the National Conciliation and Mediation Board (NCMB). Article 261
of the Labor Code accordingly provides for exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the
interpretation or implementation of the CBA and (2) the interpretation or enforcement of company personnel policies. Article 262
authorizes them, but only upon agreement of the parties, to exercise jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction
to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural
or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and
lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims,
arising from employer-employee relations, including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited compared
to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the National Labor Relations Commission (NLRC) for that
matter. 4 The state of our present law relating to voluntary arbitration provides that "(t)he award or decision of the Voluntary
Arbitrator . . . shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the
parties," 5 while the "(d)ecision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by
any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders." 6 Hence, while there is an express
mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the decision of a
voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not, elevated to the Supreme Court itself
on a petition for certiorari, 7 in effect equating the voluntary arbitrator with the NLRC or the Court of Appeals. In the view of the Court,
this is illogical and imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of courts and awards of quasi-judicial
agencies must become final at some definite time, this Court ruled that the awards of voluntary arbitrators determine the rights of
parties; hence, their decisions have the same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et
al., 9 this Court ruled that "a voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity." Under these rulings, it
follows that the voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to the latter. 10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the
third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-judicial
agency, board or commission, still both he and the panel are comprehended within the concept of a "quasi-judicial instrumentality." It
may even be stated that it was to meet the very situation presented by the quasi-judicial functions of the voluntary arbitrators here, as
well as the subsequent arbitrator/arbitral tribunal operating under the Construction Industry Arbitration Commission, 11 that the broader
term "instrumentalities" was purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency. 12 Thus, the terms governmental "agency" or "instrumentality" are
synonymous in the sense that either of them is a means by which a government acts, or by which a certain government act or function
is performed. 13 The word "instrumentality," with respect to a state, contemplates an authority to which the state delegates governmental
power for the performance of a state function. 14 An individual person, like an administrator or executor, is a judicial instrumentality in the
settling of an estate, 15 in the same manner that a sub-agent appointed by a bankruptcy court is an instrumentality of the court, 16 and a
trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17
The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions
therefor in the Labor Code and he falls, therefore, within the contemplation of the term "instrumentality" in the aforequoted Sec. 9 of
B.P. 129. The fact that his functions and powers are provided for in the Labor Code does not place him within the exceptions to said
Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that, although the Employees Compensation
Commission is also provided for in the Labor Code, Circular No. 1-91, which is the forerunner of the present Revised Administrative
Circular No. 1-95, laid down the procedure for the appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals,
in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and
commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities 18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either
the Constitution or another statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be reviewable directly
by the Supreme Court since, precisely, the cases within the adjudicative competence of the voluntary arbitrator are excluded from the
jurisdiction of the NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is
deemed a special proceeding of which the court specified in the contract or submission, or if none be specified, the Regional Trial Court
for the province or city in which one of the parties resides or is doing business, or in which the arbitration is held, shall have jurisdiction.
A party to the controversy may, at any time within one (1) month after an award is made, apply to the court having jurisdiction for an
order confirming the award and the court must grant such order unless the award is vacated, modified or corrected. 19

In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court. Consequently, in a petition
for certiorari from that award or decision, the Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme Court.
As a matter of policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.
SO ORDERED.

G.R. No. 90482 August 5, 1991

REPUBLIC OF THE PHILIPPINES, acting through the SUGAR REGULATORY ADMINISTRATION, and REPUBLIC PLANTERS
BANK, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, 15th Division, THE HONORABLE CORONA IBAY-SOMERA, in her official capacity as
Presiding Judge of the Regional Trial Court, National Capital Region, Branch 26, Manila, JORGE C. VICTORINO and JAIME K.
DEL ROSARIO, in their official capacities as RTC Deputy Sheriffs of Manila, ROGER Z. REYES, ERNESTO L. TREYES, JR., and
EUTIQUIO M. FUDOLIN, respondents.
Enrique V. Olmedo for Independent Sugar Farmers, Inc.
Reyes, Treyes & Fudolin Law Firm for respondents.

DAVIDE, JR., J.:p

This is an appeal by certiorari under Rule 45 of the Revised Rules of Court, with prayer for a temporary restraining order or writ of
preliminary injunction, filed on 25 October 1989 by the Office of the Government Corporate Counsel (OGCC) in behalf of the Republic
of the Philippines "acting through the Sugar Regulatory Administration" (SRA) and the Republic Planters Bank (RPB) seeking the
review of the 13 October 1989 Decision of the Court of Appeals (15th Division) in CAGR No. 17188.
The assailed decision 1 dismissed the petition for certiorari filed by Petitioners against herein public respondents Judge and deputy
sheriffs and private respondents for the nullification of the Orders of respondent Judge of 13 March 1989, 21 March 1989 and 27 March
1989 in Civil Case No. 86-35880 of Branch 26 of the Regional Trial Court of Manila on the following grounds: (a) the funds upon which
the attorney's fees are sought to be executed now belong to the Republic of the Philippines due to legal subrogation, (b) execution is
not proper against the Republic which is not a party to the case, (c) the issuance of a writ of execution would violate the Constitution
since according to it no money shall be paid out of the treasury except in pursuance to an appropriations made by law, and (d)
execution for attomey's fees is unwarranted.
Respondent Court of Appeals dismissed the petition for lack of merit principally because
(a) Under the compromise agreement petitioner (RPB) accepted the designation/appointment as Trustee whose obligation is to pay; it
received benefits by way of trustee's fees; it may not question the right of private respondents to attorney's fees;
(b) Petitioner (SRA) may not lawfully bring an action on behalf of the Republic of the Philippines since under Section 13 of Executive
Order No. 18 dated 28 May 1986, which created it, it simply was to take over the functions of the defunct PHILSUCOM; however, the
latter was to remain a judicial entity for three more years for the purpose of prosecuting and defending suits against it; hence it is
PHILSUCOM, being a party to the compromise agreement, which may properly contest the right of private respondents to attomey's
fees;
(c) The petition should have been filed through the Office of the Solicitor General OSG and not through the (OGCC); neither the latter
nor the (SRA) may lawfully represent the Government of the Philippines in any suit or proceeding such as the present petition for
administrative agencies may only perform such powers and functions as may be authorized by the laws which created or gave them
existence; and
(d) The respondent judge did not commit any error of jurisdiction in issuing the questioned orders; hence, the remedy should be appeal.
The facts which gave rise to said petition are summarized by the Court of Appeals as follows:
On May 16,1986, Republic Planters Bank (hereafter referred to as RPB), Zosimo Maravilla, Rosendo de la Rama, Bibiano Sabino,
Roberto Mascufiana and Ernesto Kramer "for themselves and in representation of other sugar producers" filed a Complaint with the
respondent court, RTC Branch 26, docketed as C.C. 86-35880 "For Sum of Money and/or Delivery of Personal Property with
Restraining Order and/or Preliminary Injunction" against the Philippine Sugar Commission (PHILSUCOM) and the National Sugar
Trading Corporation (NASUTRA) with the prayer:
WHEREFORE PREMISES CONSIDERED, it is respectfully prayed of this Honorable Court that, after due hearing and trial, judgment
be rendered in favor of Plaintiffs and against Defendants ordering them to do the following:
1. To render a correct and faithful account of whatever amount of United States dollar accounts/deposits in different banks, domestic
and foreign, being held in agents and/or representatives.
2. To render a correct and faithful inventory of all the physical sugar stocks for crop year 1984-85 presently remaining in the
warehouses of the different sugar mills all over the country.
3. To deliver or remit to the Plaintiffs any and all United States dollar accounts/deposits in various banks, domestic or foreign, held in
the name of Defendants, their subsidiaries, conducts (sic), agents and/or representatives.
4. To deliver the entire remaining physical sugar stocks corresponding to crop year 1984-85 presently remaining in the warehouses of
the different sugar mills all over the country in favor of Plaintiffs who were unlawfully deprived of their possession and control by
Defendants, to be applied and deducted from Defendant's liability to Plaintiffs for the unaccounted sugar for crop year 1984-85.
5. To jointly and severally pay Plaintiffs-Producers all interests and penalties imposed by Assignee-banks/creditors for accounts covered
by unpaid sugar quedans for crop year 1984-85.

6. To jointly and severally pay Plaintiffs claims for moral, compensatory and exemplary damages in such accounts to be determined in
the course of the trial.
7. To jointly and severally pay for the attorney's fees of twenty percent (20%) based on the total amount that may be recovered.
8. To jointly and severally pay for the costs and litigation expenses incurred by the Plaintiffs.
Plaintiffs likewise pray that, in order to prevent grave and irreparable injury, this Honorable Court shall issue a writ of preliminary
injunction enjoining and/or prohibiting the Defendants, their officers and/or agents from transferring, releasing or in any manner
disposing of all U.S. dollar deposits/accounts held in the name of Defendants, its subsidiaries, conduits agents and/or representatives
in the different banks, domestic and foreign, including the physical sugar corresponding to crop year 1984-85 presently remaining in the
warehouses of the different sugar mills all over the country after requiring the Plaintiffs to post a bond that may be determined by the
Honorable Court to answer for the damages in the event judgment will be rendered in Defendant's favor. Furthermore, Plaintiffs pray
that a Restraining Order be immediately issued for the purpose of enjoining the Defendants from committing and/or proceeding with the
foregoing acts, pending hearing of the application for a writ of preliminary injunction.
Plaintiffs further pray for such other reliefs and remedies, just and equitable under the premises.
Before PHILSUCOM and NASUTRA could answer, a Compromise Agreement dated May 23, 1986 was submitted by the parties which
the lower court approved and based on it, the Judgment dated June 2,1986 (Annex "B", Petition, Id., pp. 22-36) was issued. A motion
for the issuance of writ of execution was filed (Annex "C", Petition, Id., pp, 37-50). PHILSUCOM and NASUTRA filed their "Comment
and Opposition (To Motion for Issuance of Writ of Execution)" (Annex D Petition, Id., pp. 51- 62). A Reply was filed by the plaintiffs
(Annex "E", Id., pp. 63- 72) and a Rejoinder was also filed by the defendants (Annex "E", Petition, Id., pp. 73-78). The lower court
issued the Order dated March 13, 1989 which dismissed the separate petitions for relief from judgment filed by Franklin Fuentebella,
George Lacson, Fernando Ballesteros, and Antonio Lopez in one petition; Romeo Guanzon as sugar producer and president of
National Federation of Sugar Cane Planters; PASSI (Iloilo) Sugar Central, Inc., represented by Romeo Villavicencio; the Independent
Sugar Planters represented by Corazon Sagimalet (In a Motion for Intervention which substituted as a Petition for Relief from
Judgment); and Zosimo Maravilla, Rosendo dela Rama and Bibiano Sabino (Annex "G", Petition, Id., pp. 79-98). This Order dated
March 13, 1989 (which as aforesaid, dismissed the petitions for relief from judgment) is the first of the orders now being assailed.
On March 21, 1989, the lower court issued the second of the assailed orders which granted a second motion to resolve a pending
motion for issuance of a writ of execution and allowed the issuance of an alias writ of execution in words, thus:
Let an alias writ of execution be issued for the final implementation of the Judgment on Compromise Agreement, dated June 2, 1986,
the only remaining provision of said judgment is the 10% attorney's fees of counsels for the plaintiffs (Paragraph 12 sub-section Annex
"H", Petition, Id., pp. 99-100).
Correspondingly, on that same date March 21, 1989, RTC Mala Deputy Sheriff Jaime K. del Rosario issued a "Notice of Delivery of
Money" asking the RPB to "pay in cash the 10% of P45,293,552.60 to Attys. Roger Reyes, Ernesto Treyes, Jr. and Eutiquio Fudolin,
Jr. ... immediately upon receipt of this notice" (Annex "I", Petition, Id., p. 101).
And on March 27, 1989, the third of the questioned orders was issued by the lower court, in response to the "Ex-Parte Motion to
Require Officers of Trustee Republic Planters Bank to Deliver Amount Subject of Alias Writ of Execution", requiring the officers of the
RPB named therein to "appear before the Court on March 29,1989 at 10:30 in the morning to explain why they should not be cited for
contempt of court for defying ... the alias writ of execution." (Annex "J", Petition, Id. pp. 102-103).
The instant petition was filed in this court on March 29, 1989, ...
Parenthetically, it may also be added that, as stated in paragraph 15 of the instant petition, the producers and producer organizations
who filed various petitions for relief from the judgment based on the compromise agreement have appealed to the Court of Appeals the
Order of 13 March 1989 denying their petitions. 2
In the instant petition petitioners limit their grounds to only two errors allegedly committed by respondent Court of Appeals, namely: (a)
it erred in holding that neither the OGCC nor the SRA can represent the Government of the Philippines in the action before it and (b) it
deviated from the decision of the Ninth Division of said court in CAGR SP No. 11046 (Kramer, et al. vs. Hon. Doroteo, Caeba, et al.
promulgated on 16 March 1987), which declared that there was no valid class suit and the controversial compromise agreement did not
extend to the 40,000 unnamed sugar producers. 3
In the resolution of 26 October 1989 We required respondents to comment on the petition and issued a temporary restraining order
directing respondent Judge to desist and refrain from further proceeding in Civil Case No. 86-35880, entitled Republic Planters Bank, et
al. vs. Philippine Sugar Commission, et al. 4

On 23 November 1989 petitioners filed a manifestation informing this Court that at 9:30 a.m. on 26 October 1989, private respondents,
accompanied by respondents sheriff and a squad of police Special Action Force, swooped upon RPB's Bacolod Branch and divested a
teller of money from her booth allegedly because the branch manager had instructed the bank personnel to close the bank vault while
the enforcement of the court order was being verified - with the head office in Manila; the amount taken was P179,955.31; these acts
were allegedly done by virtue of, among others, the orders dated October 24 and 25, 1989 of respondent judge ordering the
implementation of an alias Writ of Execution dated 21 March 1989 and the Writ of Execution dated 21 March 1986; and claiming that
what was enforced was an expired writ. 5
In Our resolution of 5 December 1989 respondents were required to comment on this manifestation.

After motions for extension of time to file their Comments on the petition, separately filed by the private respondents and the Solicitor
General for the public respondents, were granted, the former ultimately filed their Comment on 20 December 1989. 7 The Solicitor
General filed his Comment on 4 January 1990. 8
In his Comment the Solicitor General maintains that the SRA has no legal personality to file the instant petition in the name of the
Republic of the Philippines for under its charter, Executive Order No. 18, the SRA is not vested with legal capacity to sue. He further
argues that the SRA was not a party to the court-approved compromise agreement in Civil Case No. 8635880 which provided for the
questioned 10% attorney's fees; PHILSUCOM and NASUTRA, which were parties thereto, did not file any action to annul the
compromise agreement; that while Executive Order No. 18 abolished the PHILSUCOM, the latter's juridical personality was to continue
for three (3) years, during which period it may prosecute and defend suits against it; and that, finally, even if SRA has the capacity to
sue, it cannot still bring any action on behalf of the Republic of the Philippines as this can be done only by the Office of the Solicitor
General per Section 1 of P.D. No. 478.
The Solicitor General likewise stresses that the interest of the national government in this case is confined only to the amount
remaining in RPB subject to legal subrogation; the judgment on the compromise agreement had long become final and executory; and
that no reversible error was committed by respondent judge and respondent Court of Appeals.
Private respondents assert that the SRA and RPB do not have the legal authority to sue for and in behalf of the Republic of the
Philippines. In respect to the former, their conclusion is supported by almost the same arguments as that asserted by the Solicitor
General. As regards the RPB, they maintain that it "is a government-controlled corporation engaged in the banking business with
corporate powers vested in a Board of Directors," hence, it is "legally untenable for such a banking institution, even assuming that it is
government-controlled, to initiate suits for and in behalf of the Republic of the Philippines." p.171, Rollo). They further argued that
petitioners have no legal personality to initiate the instant petition for (a) SRA is not a party in the case before the trial court; the only
reason why it became involved was because of the contempt proceedings initiated by private respondents against SRA's Arsenio Yulo,
Carlos Ledesma and Bibiano Sabino for issuing Sugar Orders No. 9 and 14; and that neither can it be presumed that SRA had
substituted defendants PHILSUCOM and the NASUTRA in the case as both continue to legally exist for the purpose of prosecuting and
defending suits in liquidation of its affairs; both did not file any petition for relief from judgment questioning the validity of the judgment of
the trial court approving the compromise agreement; and that, moreover, RPB was a signatory to the Compromise Agreement as a
Trustee and, as such, it regarded itself as only a nominal party and in a series of pleadings it recognized the final and executory nature
of the decision approving the compromise agreement.
As to the second assigned error, private respondents pointed out that the Ninth Division of the Court of Appeals did not rule in C.A.-G.R.
No. 11046 that Civil Case No. 86-35880 before the trial court was not a class suit, and whether or not it was a class suit was not an
issue therein.
On 15 January 1990 petitioners filed a motion for leave to file consolidated reply, which We granted in the resolution of 18 January
1990. 9
On 18 January 1990 petitioners filed a Manifestation and Motion 10 "wherein they informed the Court that despite the temporary
restraining order issued on 26 October 1989, respondent Judge, to whom the Order was addressed, continued to hear the case,
particularly on the whereabouts of 177,087.14 piculs of sugar for the crop year 1984-1985 allegedly stored in the different warehouses
throughout the country".
In the resolution of 30 January 1990 11 We required respondent judge to show cause why no disciplinary action should be taken against
her for failure to comply with the resolution of 26 October 1989 ordering her to refrain from further proceeding with Civil Case No. 8635880 and to answer why she should not be cited for contempt of court for such failure, within ten (10) days from notice.
On 8 March 1990 petitioners filed their Consolidated Reply to the Comment with Motion to Dismiss filed by private respondents and the
Comment of the Solicitor General. 12
On 5 April 1990 private respondents filed a Rejoinder to the Consolidated Reply. 13

On 16 April 1990 respondent judge, through the OSG, filed her Compliance as required by the Resolution of 30 January 1990. 14 She
claims that she did not defy the temporary restraining order issued by this Court on 26 October 1989 because the petitioners sought for
the issuance of the temporary restraining order to stop the enforcement of the decision of the respondent Court of Appeals in CA GR
No. 17188 dated October 13, 1989; hence, the temporary restraining order that this Court issued "actually orders herein respondent
judge to desist from enforcing the Decision of the respondent Court of Appeals in CAGR No. 17188 which is the subject of the instant
petition for review". Consequently, she stresses, her 15 December 1989 order was not issued in defiance of the restraining resolution;
said order pertains exclusively to the whereabouts of the 177,087.14 piculs of physical sugar for the crop year 1984-1985 and did not in
any way attempt to enforce the questioned decisions of the court a quo and the Court of Appeals to the prejudice of petitioner's right to
appeal.
In Our resolution of 15 May 1990 15 We resolved to consider the comments of respondents as Answers to the petition, give due course
to the petition, require the parties to submit their respective memoranda within thirty days from notice, and to note the compliance of
respondent judge.
Petitioners filed their memorandum on 28 June 1990. 16 Private respondents sent theirs by registered mail on 22 August 1990 which this
Court actually received on 8 September 1990. 17 We shall now take up the assigned errors.
I.
The Court of Appeals correctly ruled that petitioner Sugar Regulatory Administration may not lawfully bring an action on behalf of the
Republic of the Philippines and that the Office of the Government Corporate Counsel does not have the authority to represent said
petitioner in this case.
Executive Order No. 18, enacted on 28 May 1986 and which took effect immediately, abolished the Philippine Sugar Commission
(PHILSUCOM) and created the Sugar Regulatory Administration (SRA) which shall be under the Office of the President. However,
under the third paragraph of Section 13 thereof, the PHILSUCOM was allowed to continue as a juridical entity for three (3) years for the
purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its
property and to distribute its assets, but not for the purpose of continuing the functions for which it was established, under the
supervision of the SRA.
Section 3 of said Executive Order enumerates the powers and functions of the SRA; but it does not specifically include the power to
represent the Republic of the Philippines in suits filed by or against it, nor the power to sue and be sued although it has the power to
"enter, make and execute routinary contracts as may be necessary for or incidental to the attainment of its purposes between any
persons, firms, public or private, and the Government of the Philippines" and "[t]o do all such other things, transact such other
businesses and perform such functions directly or indirectly incidental or conducive to the attainment of the purposes of the Sugar
Regulatory Administration." 18
Section 4 thereof provides for the governing board of the Administration, known as the Sugar Board, which shall exercise "[a]ll
the corporate powers" of the SRA. Its specific functions are enumerated in Section 6; however, the enumeration does not include the
power to represent the Republic of the Philippines, although among such functions is "[t]o enter into contracts, transactions, or
undertakings of whatever nature which are necessary or incidental to its functions and objectives with any natural or juridical persons
and with any foreign government institutions, private corporations, partnership or private individuals. 19
It is apparent that its charter does not grant the SRA the power to represent the Republic of the Philippines in suits filed by or against
the latter.
It is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law and those that are
necessarily implied in the exercise thereof. (Guerzon vs Court of Appeals, et al., 77707, August 8, 1988, 164 SCRA 182,189, citing
Makati Stock Exchange, Inc. vs. SEC, 14 SCRA 620, and Sy vs. Central Bank, 70 SCRA 570.) 20
The SRA no doubt, is an administrative agency or body. An administrative agency is defined as "[a] government body charged with
administering and implementing particular legislation. Examples are workers' compensation commissions ... and the like. ... The term
'agency' includes any department, independent establishment, commission, administration, authority board or bureau ... 21
The power to represent the Republic of the Philippines in any suit by or against it having been withheld from SRA, it following that the
latter cannot institute the instant petition and the petition in C.A.-G.R. No. 17188 on behalf of the Republic of the Philippines.
This conclusion does not, however, mean that the SRA cannot sued and be sued. This power can be implied from its powers to make
and execute routinary contracts as may be necessary for or incidental to the attainment of its purposes between any persons, firms
public or private, and the Government of the Philippines and to do all such other things, transact such other businesses and perform
such other functions directly or indirectly incidental or conducive to the attainment of the purposes of the SRA and the powers of its

governing board to enter into contracts, transactions, or undertaking of whatever nature which are necessary or incidental to its
functions and objectives with any natural or juridical persons and with any foreign government institutions, private corporations,
partnership or private individuals.
The Court of Appeals also correctly ruled that the OGCC can represent neither the SRA nor the Republic of the Philippines. We do not,
however, share the view that only the Office of the Solicitor General can represent the SRA.
The entry of appearance by the OGCC for the SRA was precipitated by the sudden turn-about of the Office of the Solicitor General.
Records show that the OSG eventually represented the PHILSUCOM, NASUTRA and SRA in the trial court. However, on 29 January
1988 it filed a Manifestation dated January 27, 1988 informing the court that its appearance in the case "is limited to the issues relating
only to the contempt proceedings against the public respondents and is not concerned with the other issues raised by various parties in
their petitions for relief".22 By reason thereof, the Chairman/Administrator of SRA, Mr. Arsenio Yulo, Jr., sent a letter 23 dated 6 April 1988
to the Solicitor General, informing him that since the appearance of the OSG is limited and that it has taken a different position, SRA's
only alternative is to seek another representative and that much to its regret, it is constrained to terminate OSG's services. He further
informed the Solicitor General that the case is being indorsed to the Office of the Government Corporate Counsel for appropriate legal
action pursuant to P.D. No. 478. There is, however, no showing that the OSG withdrew its appearance for PHILSUCOM, NASUTRA or
the SRA in the trial court. On the contrary, per its Manifestation dated 8 February 1990, and filed with this Court on 12 February
1990, 24 it "has retained its appearance" "on behalf of the Republic of the Philippines to recover whatever amount may be owing to the
National Treasury by virtue of legal subrogation."
Also on April 6,1988, SRA sent a letter 25 to OGCC to engage its legal services to represent SRA as successor agency of the
PHILSUCOM in the case pending before the trial court.
The OGCC, availing of P.D. No. 1415, the law creating it, particularly Section 1 which, as quoted by it on page 16 of the
Petition, 26 reads:
SECTION 1. The Office of the Government Corporate Counsel shall be the principal law office of all governmentowned and controlled corporations, including their subsidiaries except as may otherwise be provided by their
respective charters or authorized by the President (Emphasis supplied).
sent a letter to the Office of the President, "in essence, requesting for authority for OGCC to represent SRA in the case before the trial
court," This was favorably acted by Executive Secretary Catalino Macaraig, Jr. 27
Indeed, under Section 35, Chapter 12, Title III of Book IV of the Administrative Code of 1987 (Executive Order No. 292) the Solicitor
General is the lawyer of the government, its agencies and instrumentalities, and its officials or agents. Said Section reads as follows:
SECTION 35. Functions and Organization. The Office of the Solicitor General shall represent the Government of
the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding,
investigation or matter requiring the services of lawyers. When authorized by the President or head of the office
concerned, it shall also represent government-owned and controlled corporations. The Office of the Solicitor General
shall constitute the law office of the Government and, as such, shall discharge duties requiring the services of
lawyers. ... .
This is similar to subsection (1) of Section 1 of P.D. No. 478.
In Republic, et al. vs. Partisala et al. (G.R. No. 61997, 15 November 1982, 118 SCRA 370, 373), We ruled that only the Solicitor
General can bring or defend actions on behalf of the Republic of the Philippines and that, henceforth, actions filed in the name of the
Republic if not initiated by the Solicitor General will be summarily dismissed.
However, in Secretary Oscar Orbos vs. Civil Service Commission, et al., G.R. No. 92561, 12 September 1990, 28We stated:
In the discharge of this task, the Solicitor General must see to it that the best interest of the government is upheld
within the limits set by law. When confronted with a situation where one government office takes an adverse position
against another government agency, as in this case, the Solicitor General should not refrain from performing his duty
as the lawyer of the government. It is incumbent upon him to present to the court what he considers should legally
uphold the best interest of the government although it may run counter to a client's position. In such an instance the
government office adversely affected by the position taken by the Solicitor General, if it still believes in the merit of its
case, may appear in its own behalf through its legal personnel or representative.
Consequently, the SRA need not be represented by the Office of the Solicitor General. It may appear in its own behalf through its legal
personnel or representative.

The question that logically crops up then is: May it be represented by the OGCC? Respondents hold the negative view. Petitioners
maintain otherwise, for the reason that pursuant to Section 1 of the charter of the OGCC (P.D. No. 1415), as they quoted, the Office of
the President, through the Executive Secretary, has authorized it to represent the SRA. The specific basis for such authority is the
alleged portion of the exceptionary clause therein, reading "... or authorized by the President."
The words or authorized by the President are not found in the law. We are not aware of any law, decree or executive order which
amended Section 1 of P.D. No. 1415 by inserting therein said words. Besides, even granting for the sake of argument that such words
are written into the law, such exception cannot confer upon the OGCC authority to represent the SRA. The exception simply means that
although the OGCC is the principal law office of all government-owned and controlled corporations including their subsidiaries, the
President may not allow it to act as lawyer for a specified government-owned or controlled corporation or a subsidiary thereof. It will be
noted that under Section 1 of P.D. No. 478 the President may authorize the OSG to represent government-owned or controlled
corporations. In short, the exception limits, rather than expands, the authority of the OGCC. Thus, the so-called approval by the
Executive Secretary of the request of OGCC to represent the SRA is based on an erroneous interpretation of the law.
In any case, even if we grant that there was such an exception, as well construed in the manner urged by petitioners, it must be
deemed, nevertheless, to have been repealed by the Administrative Code of 1987. Section 10, Chapter 3, Title III, Book IV thereof on
the Office of the Government Corporate counsel does not contain the purported exception. It reads:
SECTION 10. Office of the Government Corporate Counsel. The Office of the Government Corporate Counsel
(OGCC) shall act as the principal law office of all government-owned or controlled corporations, their subsidiaries,
other corporate offsprings and government acquired asset corporations and shall exercise control and supervision
over all legal departments or divisions maintained separately and such powers and functions as are now or may
hereafter be provided by law. In the exercise of such control or suspension, the Government Corporate Counsel shall
promulgate rules and regulations to effectively implement the objectives of the Office. ...
Since the SRA is neither a government-owned or controlled corporation nor a subsidiary thereof, OGCC does not have the authority to
represent it. As to who may represent it, the Orbos case 29 provides the answer.
The case of the RPB is, however, different. It is admitted to be a government-owned corporation. The OGCC can, therefore, legally
represent RPB in actions filed by or against it. Unfortunately, this issue was not categorically and expressly addressed by the Court of
Appeals and has not been raised in the petition. Anyway, even if We have to rule that OGCC's appearance for the RPB in the petition
before the Court of Appeals in CAGR No. 17188 was proper, the result would be the same dismissal of the petition. As also correctly
pointed out by the Court of Appeals, having received benefits by way of trustee's fees, the RPB may not question the right of private
respondents to attorney's fees; its only obligation under the judgment based on compromise was to pay the attorney's fees from out of
the funds it held in trust.
II.
The second assigned error is without merit. Petitioners have misread the decision of the Court of Appeals in CAGR SP No. 11046
(Ernesto Kramer, et al. vs. Hon. Doroteo Caneba et al. promulgated on 16 March 1987). 30The case was a petition for certiorari and
mandamus with a prayer for preliminary injunction wherein petitioners principally prayed the Court to declare null and void the order of
respondent judge of 16 December 1986 and to order him to issue the writ of execution of the judgment of 2 June 1986, require
respondent NASUTRA to account and turn over to petitioners any and all sales proceeds of 1984-1985 sugar from 2 June 1986 up to
the present in favor of respondent Trustee Bank RPB for proper distribution to petitioners, issue an order requiring respondent Trustee
Bank to distribute without delay all the sales proceeds of the 1984-1985 sugar in its possession in accordance with the judgment of
respondent court, and issue a restraining order/preliminary injunction enjoining the SRA, its agents/representatives from implementing
Sugar Order No. 9 dated 25 September 1986. Although in the body of the opinion a discussion was made on the matter of the
sufficiency of representation to make Civil Case No. 86-35880 a class suit, the resolution of the petition was not in any way based
thereon or influenced by it. As a matter of fact, the Court categorically stated that it was premature to rule on that issue because of the
pendency of the petition for relief from judgment and interventions. The full disquisition of the Court of Appeals on this point reads:
At the outset, let it be stated that the incidents which arose from the class suit before the respondent court are predominantly related to
the ten percent (10%) attorney's fees stipulated in the compromise agreement approved by the respondent court in its June 2, 1986
judgment in favor of petitioner's counsels Atty. Roger Z. Reyes, Ernesto L. Treyes, Jr. and Eutiquio M. Fudolin, Jr.
In the said class suit, only the five original plaintiffs and producers Zosimo Maravilla, for himself and in representation of Rosendo dela
Rama, Roberto Mascurafia and Bibiano Sabino per Special Power of Attorney, and Ernesto Kramer represented by Atty. Roger Z.
Reyes per Special Power of Attorney, have authorized said Attys. Reyes, Treyes, Jr. and Fudolin, Jr. to represent them as counsel.
On page 18 of the instant petition, petitioners allege that there is no necessity to secure Special Powers of Attorney from the unnamed
parties in a class suit, and the failure of petitioners' counsel to do so does not constitute fraud, the named parties having contest over

the class suit.' By such statement, petitioners and their counsels admit their lack of authority from the rest of the alleged 40,000 sugar
producers to file the class suit and enter into the compromise agreement.
Section 12, Rule 3, Revised Rules of Court provides that in order that one or more may sue for the benefit of others as a class suit, it is
necessary that 'the court shall make sure that the parties actually before it are sufficiently numerous and representative so that all
interests are fully protected. (Dimayuga, et al. vs. CIR, et al., G.R. No. L-1 0213, May 27, 1957).
For that matter, in the case below, therein plaintiffs Zosimo Maravilla, Rosendo dela Rama and Bibiano Sabino filed with the respondent
court a motion to partially annul decision and/or petition for relief against the said ten (10%) percent attorney's fees on the allegation
that they were deceived into signing the compromise agreement believing, as was agreed upon during the negotiations, that the ten
(10%) percent of whatever would be collected would go to a trust fund for the benefit of the sugar farmers and producers and not as
attorney's fees. Also, petition, for relief was filed by thirteen other alleged sugar producers principally on the ground that the
compromise agreement entered into was without their express authority by way of Special Power of Attorney and that the class suit was
unnecessary. Some of these sugar producers are the Association de Agricultores de la Region Oesta de Batangas, Inc. (AAROB) with
742 members; the Samahang Mag-aasukal sa Kanluran Batangas (SABA) with 4,000 members and Independent Sugar Farmers, Inc.
with 200 members.
Here is a situation, as pointed out by respondent NASUTRA and SRA, where petitioners in filing the class suit claim to represent 40,000
sugar producers all over the country and yet when some of these producers filed petition for relief and interventions, petitioners
'disowned' them, stating that the other sugar producers have no personality to intervene, not having been named parties to the class
suit.
It should not be overlooked that the said sugar producers, although not named parties in the class suit, are the very alleged persons
represented in the class suit. They certainly have interests in the subject matter of the controversy; in the contents of the compromise
agreement.
The filing of petitions for relief from judgment has not been prohibited by B.P. 129. The remedy of petitions for relief from judgment is
still available when a judgment is rendered by an inferior court in a case, and a party thereto, by fraud, accident, mistake or excusable
negligence, has been unjustly deprived of a hearing therein, or has been prevented from taking an appeal. Section 9, paragraph 2 of
BP 129 placing the original exclusive jurisdiction on the Court of Appeals to annul judgments of Regional Trial Courts has no relation to
(sic) all to the petition for relief provided for in Rule 38 because these two are completely different remedies.
The petitions for relief from judgment and interventions are still pending action by respondent court. In view thereof, it would be
premature for this Court to resolve the issue of estoppel on the part of the said sugar producers to question the pertinent portion of the
judgment of compromise, and fraud on the part of the counsels for petitioners therein. (Emphasis supplied).
IV.
Having disposed of the main issues, We shall now consider the motion of petitioners of 16 January 1990 to hold in contempt
respondent Judge Corona Ibay-Somera for violating/defying the Temporary Restraining Order issued by Us on 26 October 1989. They
allegedly "continued to hear the case particularly on the whereabouts of 177,087.14 piculs of sugar for the crop year 1984-1985
allegedly stored in different warehouses throughout the country," and that she even further reset the hearing of the case on January 19,
1990 notwithstanding the cautionary manifestation filed by petitioners during the 15 December 1989 hearing that said continued
hearing would be a violation of the TRO. In the resolution of 26 October 1989, this Court specifically ordered respondent Judge
to desist and refrain from further proceeding in Civil Case No. 86-35880, entitled Republic Planters Bank, et al. vs. Philippine Sugar
Commission, et al.
In her Compliance, respondent judge explained that the TRO in question actually ordered her to desist from enforcing the Decision of
the respondent Court of Appeals in CAGR No. 17188, which is the subject of the instant petition, and that her "only honest motivation
"in making the inquiry is to see to it that while the instant petition is pending ... , whatever funds may be owing to the Republic of the
Philippines is duly preserved and protected."
We find the explanation to be satisfactory. No malice attended the commission of the challenged act. We accord to respondent judge
good faith in her claimed desire to preserve and protect public funds. Moreover, petitioners failed to show that the act in question
caused any injury or damage to their rights or interest.
IN VIEW OF ALL THE FOREGOING, the Petition is DENIED for lack of merit. Costs against petitioners.SO ORDERED.

MARIA ELENA MALAGA, doing business under the name B.E. CONSTRUCTION; JOSIELEEN NAJARRO, doing business
under the name BEST BUILT CONSTRUCTION; JOSE N. OCCEA, doing business under the name THE FIRM OF JOSE N.
OCCEA; and the ILOILO BUILDERS CORPORATION, Petitioners, v. MANUEL R. PENACHOS, JR., ALFREDO MATANGGA,
ENRICO TICAR AND TERESITA VILLANUEVA, in their respective capacities as Chairman and Members of the Pre-qualification
Bids and Awards Committee (PBAC)-BENIGNO PANISTANTE, in his capacity as President of Iloilo State College of Fisheries,
as well as in their respective personal capacities; and HON. LODRIGIO L. LEBAQUIN, Respondents.
Salas, Villareal & Velasco, for Petitioners.
Virgilio A. Sindico for Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; GOVERNMENT INSTRUMENTALITY, DEFINED. The 1987 Administrative Code defines a government
instrumentality as follows: Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special
funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions, and
government-owned or controlled corporations. (Sec. 2 (5) Introductory Provisions).
2. ID.; CHARTERED INSTITUTION; DEFINED; APPLICATION IN CASE AT BAR. The 1987 Administrative Code describes a
chartered institution thus: Chartered institution refers to any agency organized or operating under a special charter, and vested by
law with functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges, and the
monetary authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear from the above definitions that ISCOF is a chartered
institution and is therefore covered by P.D. 1818. There are also indications in its charter that ISCOF is a government instrumentality.
First, it was created in pursuance of the integrated fisheries development policy of the State, a priority program of the government to
effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines shall also be the ex-officio
Treasurer of the state college with its accounts and expenses to be audited by the Commission on Audit or its duly authorized
representative. Third, heads of bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of
the president of the state college, such apparatus, equipment, or supplies and even the services of such employees as can be spared
without serious detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of the
National Treasury and it was also decreed in its charter that the funds and maintenance of the state college would henceforth be
included in the General Appropriations Law. (Presidential Decree No. 1523)
3. ID.; PROHIBITION OF ANY COURT FROM ISSUING INJUNCTION IN CASES INVOLVING INFRASTRUCTURE PROJECTS OF
GOVERNMENT (P.D. 1818); POWER OF THE COURTS TO RESTRAIN APPLICATION. In the case of Datiles and Co. v. Sucaldito,
(186 SCRA 704) this Court interpreted a similar prohibition contained in P.D. 605, the law after which P.D. 1818 was patterned. It was
there declared that the prohibition pertained to the issuance of injunctions or restraining orders by courts against administrative acts in
controversies involving facts or the exercise of discretion in technical cases. The Court observed that to allow the courts to judge these
matters would disturb the smooth functioning of the administrative machinery. Justice Teodoro Padilla made it clear, however, that on
issues definitely outside of this dimension and involving questions of law, courts could not be prevented by P.D. No. 605 from exercising
their power to restrain or prohibit administrative acts. We see no reason why the above ruling should not apply to P.D. 1818. There are
at least two irregularities committed by PBAC that justified injunction of the bidding and the award of the project.
4. ID.; POLICIES AND GUIDELINES PRESCRIBED FOR GOVERNMENT INFRASTRUCTURE (PD 1594); RULES IMPLEMENTING
THEREOF, NOT SUFFICIENTLY COMPLIED WITH IN CASE AT BAR. Under the Rules Implementing P.D. 1594, prescribing policies
and guidelines for government infrastructure contracts, PBAC shall provide prospective bidders with the Notice to Pre-qualification and
other relevant information regarding the proposed work. Prospective contractors shall be required to file their ARC-Contractors
Confidential Application for Registration & Classifications & the PRE-C2 Confidential Pre-qualification Statement for the Project (prior to
the amendment of the rules, this was referred to as Pre-C1) not later than the deadline set in the published Invitation to Bid, after which
date no PRE-C2 shall be submitted and received. Invitations to Bid shall be advertised for at least three times within a reasonable
period but in no case less than two weeks in at least two newspapers of general circulations. (IB 13 1.2-19, Implementing Rules and
Regulations of P.D. 1594 as amended) PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour
thereof, and announced that the opening of bids would be at 3 oclock in the afternoon of December 12, 1988. This scheduled was
changed and a notice of such change was merely posted at the ISCOF bulletin board. The notice advanced the cut-off time for the
submission of pre-qualification documents to 10 oclock in the morning of December 2, 1988, and the opening of bids to 1 oclock in the
afternoon of December 12, 1988. The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the
PBAC meeting held on December 6, 1988. While it may be true that there were fourteen contractors who were pre-qualified despite the
change in schedule, this fact did not cure the defect of the irregular notice. Notably, the petitioners were disqualified because they failed
to meet the new deadline and not because of their expired licenses. (B.E. & Best Builts licenses were valid until June 30, 1989. [Ex. P
& O respectively: both were marked on December 28, 1988]) We have held that where the law requires a previous advertisement
before government contracts can be awarded, non-compliance with the requirement will, as a general rule, render the same void and of
no effect. (Caltex Phil. v. Delgado Bros., 96 Phil. 368) The fact that an invitation for bids has been communicated to a number of
possible bidders is not necessarily sufficient to establish compliance with the requirements of the law if it is shown that other possible
bidders have not been similarly notified.
5. ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. The purpose of the rules implementing P.D. 1594 is to secure competitive

bidding and to prevent favoritism, collusion and fraud in the award of these contracts to the detriment of the public. This purpose was
defeated by the irregularities committed by PBAC. It has been held that the three principles in public bidding are the offer to the public,
an opportunity for competition and a basis for exact comparison of bids. A regulation of the matter which excludes any of these factors
destroys the distinctive character of the system and thwarts the purpose of its adoption. (Hannan v. Board of Education, 25 Okla. 372)
In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the bidding that caused the
elimination of petitioners B.E. and Best Built. It was not because of their expired licenses, as private respondents now claim. Moreover,
the plans and specifications which are the contractors guide to an intelligent bid, were not issued on time, thus defeating the guaranty
that contractors be placed on equal footing when they submit their bids. The purpose of competitive bidding is negated if some
contractors are informed ahead of their rivals of the plans and specifications that are to be the subject of their bids.
6. ID.; ID.; ID.; EFFECT OF NON-COMPLIANCE THEREOF. It has been held in a long line of cases that a contract granted without
the competitive bidding required by law is void, and the party to whom it is awarded cannot benefit from it. It has not been shown that
the irregularities committed by PBAC were induced by or participated in by any of the contractors. Hence, liability shall attach only to
the private respondents for the prejudice sustained by the petitioners as a result of the anomalies described above.
7. CIVIL LAW; NOMINAL DAMAGES; AWARD THEREOF, WHEN AVAILABLE. As there is no evidence of the actual loss suffered by
the petitioners, compensatory damage may not be awarded to them. Moral damages do not appear to be due either. Even so, the Court
cannot close its eyes to the evident bad faith that characterized the conduct of the private respondents, including the irregularities in the
announcement of the bidding and their efforts to persuade the ISCOF president to award the project after two days from receipt of the
restraining order and before they moved to lift such order. For such questionable acts, they are liable in nominal damages at least in
accordance with Article 2221 of the Civil Code, which states: Art. 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him. These damages are to be assessed against the private respondents in the amount of
P10,000.00 each, to be paid separately for each of petitioners B.E. Construction and Best Built Construction.

DECISION

CRUZ, J.:

This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from issuing injunctions in cases involving
infrastructure projects of the government.chanrobles.com.ph : virtual law library
The facts are not disputed.
The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-qualification, Bids and Awards Committee (henceforth PBAC)
caused the publication in the November 25, 26, 28, 1988 issues of the Western Visayas Daily an Invitation to Bid for the construction of
the Micro Laboratory Building at ISCOF. The notice announced that the last day for the submission of pre-qualification requirements
(PRE C-1) ** was December 2, 1988, and that the bids would be received and opened on December 12, 1988, 3 oclock in the
afternoon. 1
Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name of the B.E. Construction and Best
Built Construction, submitted their pre-qualification documents at two oclock in the afternoon of December 2, 1988. Petitioner Jose
Occea submitted his own PRE-C1 on December 5, 1988. All three of them were not allowed to participate in the bidding because their
documents were considered late, having been submitted after the cut-off time of ten oclock in the morning of December 2, 1988.
On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo against the chairman and members of
PBAC in their official and personal capacities. The plaintiffs claimed that although they had submitted their PRE-C1 on time, the PBAC
refused without just cause to accept them. As a result, they were not included in the list of pre-qualified bidders, could not secure the
needed plans and other documents, and were unable to participate in the scheduled bidding.
In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of their PRE-C1 documents. They also
asked that if the bidding had already been conducted, the defendants be directed not to award the project pending resolution of their
complaint.
On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding and awarding
the project. 2
On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground that the Court was prohibited from
issued restraining orders, preliminary injunctions and preliminary mandatory injunctions by P.D. 1818.chanroblesvirtualawlibrary
The decree reads pertinently as follows:chanrob1es virtual 1aw library
Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or preliminary
infrastructure project, or a mining, fishery, forest or other natural resource development project of the government, or any public utility
operated by the government, including among others public utilities for the transport of the goods and commodities, stevedoring and

arrastre contracts, to prohibit any person or persons, entity or government official from proceeding with, or continuing the execution or
implementation of any such project, or the operation of such public utility, or pursuing any lawful activity necessary for such execution,
implementation or operation.
The movants also contended that the question of the propriety of a preliminary injunction had become moot and academic because the
restraining order was received late, at 2 oclock in the afternoon of December 12, 1988, after the bidding had been conducted and
closed at eleven thirty in the morning of that date.
In their opposition of the motion, the plaintiffs argued against the applicability of P.D. 1818, pointing out that while ISCOF was a state
college, it had its own charter and separate existence and was not part of the national government or of any local political subdivision.
Even if P.D. 1818 were applicable, the prohibition presumed a valid and legal government project, not one tainted with anomalies like
the project at bar.
They also cited Filipinas Marble Corp. v. IAC, 3 where the Court allowed the issuance of a writ of preliminary injunction despite a similar
prohibition found in P.D. 385. The Court therein stated that:chanrob1es virtual 1aw library
The government, however, is bound by basic principles of fairness and decency under the due process clauses of the Bill of Rights.
P.D. 385 was never meant to protect officials of government-lending institutions who take over the management of a borrower
corporation, lead that corporation to bankruptcy through mismanagement or misappropriation of its funds, and who, after ruining it, use
the mandatory provisions of the decree to avoid the consequences of their misleads (p. 188, Emphasis supplied).
On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction. It declared that the
building sought to be construed at the ISCOF was an infrastructure project of the government falling within the coverage of P.D. 1818.
Even if it were not, the petition for the issuance of a writ of preliminary injunction would still fail because the sheriffs return showed that
PBAC was served a copy of the restraining order after the bidding sought to be restrained had already been held. Furthermore, the
members of the PBAC could not be restrained from awarding the project because the authority to do so was lodged in the President of
the ISCOF, who was not a party to the case. 4
In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its separate and distinct corporate
personality. It is also stressed again that the prohibition under P.D. 1818 could not apply to the present controversy because the project
was vitiated with irregularities, to wit:chanrobles.com : virtual law library
1. The invitation to bid as published fixed the deadline of submission of pre-qualification document on December 2, 1988 without
indicating any time, yet after 10:00 oclock of the given late, the PBAC already refused to accept petitioners documents.
2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at 10:00 oclock in the morning.
3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed "Invitation to Bid" form, which by law
(P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the particulars of the project subject of bidding for the purpose of.
(i) enabling bidders to make an intelligent and accurate bids;
(ii) for PBAC to have a uniform basis for evaluating the bids;
(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a project.
Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities therein were left blank. 5 And although
the project in question was a "Construction," the private respondents used an Invitation to Bid form for "Materials." 6
The petitioners also point out that the validity of the writ of preliminary injunction had not yet become moot and academic because even
if the bids had been opened before the restraining order was issued, the project itself had not yet been awarded. The ISCOF president
was not an indispensable party because the signing of the award was merely a ministerial function which he could perform only upon
the recommendation of the Award Committee. At any rate, the complaint had already been duly amended to include him as a party
defendant.
In their Comment, the private respondents maintain that since the members of the board of trustees of the ISCOF are all government
officials under Section 7 of P.D. 1523 and since the operations and maintenance of the ISCOF are provided for in the General
Appropriations Law, it is should be considered a government institution whose infrastructure project is covered by P.D. 1818.
Regarding the schedule for pre-qualification, the private respondents insist that PBAC posted on the ISCOF bulletin board an
announcement that the deadline for the submission of pre-qualifications documents was at 10 oclock of December 2, 1988, and the
opening of bids would be held at 1 oclock in the afternoon of December 12, 1988. As of ten oclock in the morning of December 2,
1988, B.E. construction and Best Built construction had filed only their letters of intent. At two oclock in the afternoon, B.E., and Best
Built filed through their common representative, Nenette Garuello, their pre-qualification documents which were admitted but stamped
"submitted late." The petitioners were informed of their disqualification on the same date, and the disqualification became final on
December 6, 1988. Having failed to take immediate action to compel PBAC to pre-qualify them despite their notice of disqualification,
they cannot now come to this Court to question the binding proper in which they had not participated.
In the petitioners Reply, they raise as an additional irregularity the violation of the rule that where the estimate project cost is from P1M

to P5M, the issuance of plans, specifications and proposal book forms should made thirty days before the date of bidding. 7 They point
out that these forms were issued only on December 2, 1988, and not at the latest on November 12, 1988, the beginning of the 30-day
period prior to the scheduled bidding.
In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were received although filed late and were
reviewed by the Award Committee, which discovered that the contractors had expired licenses. B.E.s temporary certificate of Renewal
of Contractors License was valid only until September 30, 1988, while Best Builts license was valid only up to June 30,
1988.chanrobles lawlibrary : rednad
The Court has considered the arguments of the parties in light of their testimonial and documentary evidence and the applicable laws
and jurisprudence. It finds for the petitioners.
The 1987 Administrative Code defines a government instrumentality as follows:chanrob1es virtual 1aw library
Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions, and government-owned or
controlled corporations. (Sec. 2 (5) Introductory Provisions).
The same Code describes a chartered institution thus:chanrob1es virtual 1aw library
Chartered institution refers to any agency organized or operating under a special charter, and vested by law with functions relating to
specific constitutional policies or objectives. This term includes the state universities and colleges, and the monetary authority of the
state. (Sec. 2 (12) Introductory Provisions).
It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.
There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance of the integrated
fisheries development policy of the State, a priority program of the government of effect the socio-economic life of the nation. Second,
the Treasurer of the Republic of the Philippines also be the ex-officio Treasurer of the state college with its accounts and expenses to
be audited by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and offices of the National
Government are authorized to loan or transfer to it, upon request of the president of the state college, such apparatus, equipment, or
supplies and even the services of such employees as can be spared without serious detriment to public service. Lastly, an additional
amount of P1.5M had been appropriated out of the funds of the National Treasury and it was also decreed in its charter that the funds
and maintenance of the state college would henceforth be included in the General Appropriations Law. 8
Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree.
In the case of Datiles and Co. v. Sucaldito, 9 this Court interpreted a similar prohibition contained in P.D. 605, the law after which P.D.
1818 was patterned. It was there declared that the prohibition pertained to the issuance of injunctions or restraining orders by courts
against administrative acts in controversies involving facts or the exercise of discretion in technical cases. The Court observed that to
allow the courts to judge these matters would disturb the smooth functioning of the administrative machinery. Justice Teodoro Padilla
made it clear, however, that on issues definitely outside of this dimension and involving questions of law, courts could not be prevented
by P.D. No. 605 from exercising their power to restrain or prohibit administrative acts.
We see no reason why the above ruling should not apply to P.D. 1818.
There are at least two irregularities committed by PBAC that justified injunction of the bidding and the award of the project.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph
First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed these deadlines without prior notice to
prospective participants.
Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure contracts, PBAC shall
provide prospective bidders with the Notice of Pre-qualification and other relevant information regarding the proposed work.
Prospective contractors shall be required to file their ARC-Contractors Confidential Application for Registration & Classifications & the
PRE-C2 Confidential Pre-qualification Statement for the Project (prior to the amendment of the rules, this was referred to as PRE-C1)
not later than the deadline set in the published Invitation to Bid, after which date no PRE-C2 shall be submitted and received. Invitations
to Bid shall be advertised for at least three times within a reasonable period but in no case less than two weeks in at least two
newspapers of general circulations. 10
PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof, and announced that the opening
of bids would be at 3 oclock in the afternoon of December 12, 1988. This schedule was changed and a notice of such change was
merely posted at the ISCOF bulletin board. The notice advanced the cut-off time for the submission of pre-qualification documents to 10
oclock in the morning of December 2, 1988, and the opening of bids to 1 oclock in the afternoon of December 12, 1988.
The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC meeting held on December
6, 1988. While it may be true that there were fourteen contractors who were pre-qualified despite the change in schedule, this fact did
not cure the defect of the irregular notice. Notably, the petitioners were disqualified because they failed to meet the new deadline and

not because of their expired licenses. ***

We have held that where the law requires a previous advertisement before government contracts can be awarded, non-compliance with
the requirement will, as a general rule, render the same void and of no effect 11 The facts that an invitation for bids has been
communicated to a number of possible bidders is not necessarily sufficient to establish compliance with the requirements of the law if it
is shown that other public bidders have not been similarly notified. 12
Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and proposal book forms for the project to be
bid thirty days before the date of bidding if the estimate project cost was between P1M and P5M. PBAC has not denied that these forms
were issued only on December 2, 1988, or only ten days before the bidding scheduled for December 12, 1988. At the very latest, PBAC
should have issued them on November 12, 1988, or 30 days before the scheduled bidding.
It is apparent that the present controversy did not arise from the discretionary acts of the administrative body nor does it involve merely
technical matters. What is involved here is non-compliance with the procedural rules on bidding which required strict observance. The
purpose of the rules implementing P.D. 1594 is to secure competitive bidding and to prevent favoritism, collusion and fraud in the award
of these contracts to the detriment of the public. This purpose was defeated by the irregularities committed by PBAC.chanrobles law
library : red
It has been held that the three principles in public bidding are the offer to the public, an opportunity for competition and a basis for exact
comparison of bids. A regulation of the matter which excludes any of these factors destroys the distinctive character of the system and
thwarts and purpose of its adoption. 13
In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the bidding that caused the
elimination of petitioners B.E. and Best Built. It was not because of their expired licenses, as private respondents now claim. Moreover,
the plans and specifications which are the contractors guide to an intelligent bid, were not issued on time, thus defeating the guaranty
that contractors be placed on equal footing when they submit their bids. The purpose of competitive bidding is negated if some
contractors are informed ahead of their rivals of the plans and specifications that are to be the subject of their bids.
P.D. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative agencies such as the anomalies
above described. Hence, the challenged restraining order was not improperly issued by the respondent judge and the writ of
preliminary injunction should not have been denied. We note from Annex Q of the private respondents memorandum, however, that the
subject project has already been "100% completed as to the Engineering Standard." This fait accompli has made the petition for a writ
of preliminary injunction moot and academic.
We come now to the liabilities of the private respondents.
It has been held in a long line of cases that a contract granted without the competitive bidding required by law is void, and the party to
whom it is awarded cannot benefit from it. 14 It has not been shown that the irregularities committed by PBAC were induced by or
participated in by any of the contractors. Hence, liability shall attach only to the private respondents for the prejudice sustained by the
petitioners as a result of the anomalies described above.
As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may not be awarded to them. Moral
damages do not appear to be due either. Even so, the Court cannot close its eyes to the evident bad faith that characterized the
conduct of the private respondents, including the irregularities in the announcement of the bidding and their efforts to persuade the
ISCOF president to award the project after two days from receipt of the restraining order and before they moved to lift such order. For
such questionable acts, they are liable in nominal damages at least in accordance with Article 2221 of the Civil Code, which
states:jgc:chanrobles.com.ph
"Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant
may be vindicated or, recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.
These damages are to assessed against the private respondents in the amount of P10,000.00 each, to be paid separately for each of
petitioners B.E. Construction and Best Built Construction. The other petitioner, Occea Builders, is not entitled to relief because it
admittedly submitted its pre-qualification documents on December 5, 1988, or three days after the deadline.chanrobles virtual lawlibrary
WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12, 1988, as not covered by the
prohibition in P.D. 1818; b) ordering the chairman and the members of the PBAC board of trustees, namely Manuel R. Penachos, Jr.,
Alfredo Matangga, Enrico Ticar, and Teresita Villanueva, to each pay separately to petitioners Maria Elena Malaga and Josieleen
Najarro nominal damages P10,000.00 each; and c) removing the said chairman and members from the PBAC board of trustees, or
whoever among them is still incumbent therein, for their malfeasance in office. Costs against PBAC.
Let a copy of this decision be sent to the Office of the Ombudsman.
SO ORDERED.

G.R. No. 1051

May 19, 1903

THE UNITED STATES, complainant-appellee, vs.FRED L. DORR, ET AL., defendants-appellants.

F. G. Waite for appellants.
Solicitor-General Araneta for appellee.
LADD, J.:
The defendants have been convicted upon a complaint charging them with the offense of writing, publishing, and circulating a scurrilous
libel against the Government of the United States and the Insular Government of the Philippine Islands. The complaint is based upon
section 8 of Act No. 292 of the Commission, which is as follows:
Every person who shall utter seditious words or speeches, write, publish, or circulate scurrilous libels against the Government
of the United States or the Insular Government of the Philippine Islands, or which tend to disturb or obstruct any lawful officer
in executing his office, or which tend to instigate others to cabal or meet together for unlawful purposes, or which suggest or
incite rebellious conspiracies or riots, or which tend to stir up the people against the lawful authorities, or to disturb the peace
of the community, the safety and order of the Government, or who shall knowingly conceal such evil practices, shall be
punished by a fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or both, in the discretion
of the court.
The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902, under the caption of "A few hard
facts."
The Attorney-General in his brief indicates the following passages of the article as those upon which he relies to sustain the conviction:
Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of the Civil Commission in
appointing rascally natives to important Government positions:
"It is a strong thing to say, but nevertheless true, that the Civil Commission, through its ex-insurgent office holders,
and by its continual disregard for the records of natives obtained during the military rule of the Islands, has, in its
distribution of offices, constituted a protectorate over a set of men who should be in jail or deported. . . . [Reference is
then made to the appointment of one Tecson as justice of the peace.] This is the kind of foolish work that the
Commission is doing all over the Islands, reinstating insurgents and rogues and turning down the men who have
during the struggle, at the risk of their lives, aided the Americans."
xxx xxx xxx
There is no doubt but that the Filipino office holders of the Islands are in a good many instances rascals.
xxx xxx xxx
The commission has exalted to the highest positions in the Islands Filipinos who are alleged to be notoriously corrupt and
rascally, and men of no personal character.
xxx xxx xxx
Editor Valdez, of "Miau," made serious charges against two of the native Commissioners charges against Trinidad H. Pardo de
Tavera, which, if true, would brand the man as a coward and a rascal, and with what result? . . . [Reference is then made to the
prosecution and conviction of Valdez for libel "under a law which specifies that the greater the truth the greater the libel."] Is it the desire
of the people of the United States that the natives against whom these charges have been made (which, if true, absolutely vilify their
personal characters) be permitted to retain their seats on the Civil Commission, the executive body of the Philippine Government,
without an investigation?
xxx xxx xxx
It is a notorious fact that many branches of the Government organized by the Civil Commission are rotten and corrupt. The
fiscal system, upon which life, liberty, and justice depends, is admitted by the Attorney-General himself to be most
unsatisfactory. It is a fact that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be
persuaded to convict insurgents when they wish to protect them.
xxx xxx xxx

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and especially the northern end of it; it
is said that it is impossible to secure the conviction of lawbreakers and outlaws by the native justices, or a prosecution by the
native fiscals.
xxx xxx xxx
The long and short of it is that Americans will not stand for an arbitrary government, especially when evidences of
carpetbagging and rumors of graft are too thick to be pleasant.
We do not understand that it is claimed that the defendants succeeded in establishing at the trial the truth of any of the foregoing
statements. The only question which we have considered is whether their publication constitutes an offense under section 8 of Act No.
292, above cited.
Several allied offenses or modes of committing the same offense are defined in that section, viz: (1) The uttering of seditious words or
speeches; (2) the writing, publishing, or circulating of scurrilous libels against the Government of the United States or the Insular
Government of the Philippine Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful
officer in executing his office; (4) or which tend to instigate others to cabal or meet together for unlawful purposes; (5) or which suggest
or incite rebellious conspiracies or riots; (6) or which tend to stir up the people against the lawful authorities or to disturb the peace of
the community, the safety and order of the Government; (7) knowingly concealing such evil practices.
The complaint appears to be framed upon the theory that a writing, in order to be punishable as a libel under this section, must be of a
scurrilous nature and directed against the Government of the United States or the Insular Government of the Philippine Islands, and
must, in addition, tend to some one of the results enumerated in the section. The article in question is described in the complaint as "a
scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands, which tends to
obstruct the lawful officers of the United States and the Insular Government of the Philippine Islands in the execution of their offices,
and which tends to instigate others to cabal and meet together for unlawful purposes, and which suggests and incites rebellious
conspiracies, and which tends to stir up the people against the lawful authorities, and which disturbs the safety and order of the
Government of the United States and the Insular Government of the Philippine Islands." But it is "a well-settled rule in considering
indictments that where an offense may be committed in any of several different modes, and the offense, in any particular instance, is
alleged to have been committed in two or more modes specified, it is sufficient to prove the offense committed in any one of them,
provided that it be such as to constitute the substantive offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants
may, therefore, be convicted if any one of the substantive charges into which the complaint may be separated has been made out.
We are all, however, agreed upon the proposition that the article in question has no appreciable tendency to "disturb or obstruct any
lawful officer in executing his office," or to "instigate" any person or class of persons "to cabal or meet together for unlawful purposes,"
or to "suggest or incite rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or to disturb the peace of
the community, the safety and order of the Government." All these various tendencies, which are described in section 8 of Act No. 292,
each one of which is made an element of a certain form of libel, may be characterized in general terms as seditious tendencies. This is
recognized in the description of the offenses punished by this section, which is found in the title of the act, where they are defined as
the crimes of the "seditious utterances, whether written or spoken."
Excluding from consideration the offense of publishing "scurrilous libels against the Government of the United States or the Insular
Government of the Philippine Islands," which may conceivably stand on a somewhat different footing, the offenses punished by this
section all consist in inciting, orally or in writing, to acts of disloyalty or disobedience to the lawfully constituted authorities in these
Islands. And while the article in question, which is, in the main, a virulent attack against the policy of the Civil Commission in appointing
natives to office, may have had the effect of exciting among certain classes dissatisfaction with the Commission and its measures, we
are unable to discover anything in it which can be regarded as having a tendency to produce anything like what may be called
disaffection, or, in other words, a state of feeling incompatible with a disposition to remain loyal to the Government and obedient to the
laws. There can be no conviction, therefore, for any of the offenses described in the section on which the complaint is based, unless it
is for the offense of publishing a scurrilous libel against the Government of the of the United States or the Insular Government of the
Philippine Islands.
Can the article be regarded as embraced within the description of "scurrilous libels against the Government of the United States or the
Insular Government of the Philippine Islands?" In the determination of this question we have encountered great difficulty, by reason of
the almost entire lack of American precedents which might serve as a guide in the construction of the law. There are, indeed, numerous
English decisions, most of them of the eighteenth century, on the subject of libelous attacks upon the "Government, the constitution, or
the law generally," attacks upon the Houses of Parliament, the Cabinet, the Established Church, and other governmental organisms,
but these decisions are not now accessible to us, and, if they were, they were made under such different conditions from those which
prevail at the present day, and are founded upon theories of government so foreign to those which have inspired the legislation of which
the enactment in question forms a part, that they would probably afford but little light in the present inquiry. In England, in the latter part
of the eighteenth century, any "written censure upon public men for their conduct as such," as well as any written censure "upon the
laws or upon the institutions of the country," would probably have been regarded as a libel upon the Government. (2 Stephen, History of

the Criminal Law of England, 348.) This has ceased to be the law in England, and it is doubtful whether it was ever the common law of
any American State. "It is true that there are ancient dicta to the effect that any publication tending to "possess the people with an ill
opinion of the Government" is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the words used directly tend to foment riot
or rebellion or otherwise to disturb the peace and tranquility of the Kingdom, the utmost latitude is allowed in the discussion of all public
affairs." (11 Enc. of the Laws of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule which made libels
on the constitution or the government indictable, as it was administered by the courts, seems to us unsuited to the condition and
circumstances of the people of America, and therefore never to have been adopted in the several States."
We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the only existing American statute of a
similar character to that in question, and from which much of the phraseology of then latter appears to have been taken, though with
some essential modifications.
The important question is to determine what is meant in section 8 of Act No. 292 by the expression "the Insular Government of the
Philippine Islands." Does it mean in a general and abstract sense the existing laws and institutions of the Islands, or does it mean the
aggregate of the individuals by whom the government of the Islands is, for the time being, administered? Either sense would doubtless
be admissible.
We understand, in modern political science, . . . by the term government, that institution or aggregate of institutions by which an
independent society makes and carries out those rules of action which are unnecessary to enable men to live in a social state, or which
are imposed upon the people forming that society by those who possess the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By "dministration, again, we understand in modern times, and especially in more or less
free countries, the aggregate of those persons in whose hands the reins of government are for the time being (the chief ministers or
heads of departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the terms "government" and "administration" are not
always used in their strictness, and that "government" is often used for "administration."
In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense to "write, print, utter, or published,"
or to "knowingly and willingly assist or aid in writing, printing, uttering, or publishing any false, scandalous, and malicious writing or
writings against the Government of the United States, or either House of the Congress of the United States, or the President of the
United States, with intent to defame the said Government, or either House of the said Congress, or the said President, or to bring them,
or either of them, into contempt or disrepute, or to excite against them or either or any of them the hatred of the good people of the
United States," etc. The term "government" would appear to be used here in the abstract sense of the existing political system, as
distinguished from the concrete organisms of the Government the Houses of Congress and the Executive which are also specially
mentioned.
Upon the whole, we are of the opinion that this is the sense in which the term is used in the enactment under consideration.
It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an abstraction like the Government in the
sense of the laws and institutions of a country, but we think an answer to this suggestion is that the expression "scurrilous libel" is not
used in section 8 of Act No. 292 in the sense in which it is used in the general libel law (Act No. 277) that is, in the sense of written
defamation of individuals but in the wider sense, in which it is applied in the common law to blasphemous, obscene, or seditious
publications in which there may be no element of defamation whatever. "The word 'libel' as popularly used, seems to mean only
defamatory words; but words written, if obscene, blasphemous, or seditious, are technically called libels, and the publication of them is,
by the law of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See
Com. vs. Kneeland, 20 Pick., 206, 211.)
While libels upon forms of government, unconnected with defamation of individuals, must in the nature of things be of uncommon
occurrence, the offense is by no means an imaginary one. An instance of a prosecution for an offense essentially of this nature is
Republica vs. Dennie, 4 Yeates (Pa.), 267, where the defendant was indicted "as a factious and seditious person of a wicked mind and
unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully intending, as much as in him lay, to bring into
contempt and hatred the independence of the United States, the constitution of this Commonwealth and of the United States, to excite
popular discontent and dissatisfaction against the scheme of polity instituted, and upon trial in the said United States and in the said
Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said United States and of the said Commonwealth, to
condemn the principles of the Revolution, and revile, depreciate, and scandalize the characters of the Revolutionary patriots and
statesmen, to endanger, subvert, and totally destroy the republican constitutions and free governments of the said United States and
this Commonwealth, to involve the said United States and this Commonwealth in civil war, desolation, and anarchy, and to procure by
art and force a radical change and alteration in the principles and forms of the said constitutions and governments, without the free will,
wish, and concurrence of the people of the said United States and this Commonwealth, respectively," the charge being that "to fulfill,
perfect, and bring to effect his wicked, seditious, and detestable intentions aforesaid he . . . falsely, maliciously, factiously, and
seditiously did make, compose, write, and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national
history. Its omens are always sinister and its powers are unpropitious. With all the lights or experience blazing before our eyes, it is
impossible not to discover the futility of this form of government. It was weak and wicked at Athens, it was bad in Sparta, and worse in

Rome. It has been tried in France and terminated in despotism. it was tried in England and rejected with the utmost loathing and
abhorrence. It is on its trial here and its issue will be civil war, desolation, and anarchy. No wise man but discerns its imperfections; no
good man but shudders at its miseries; no honest man but proclaims its fraud, and no brave man but draws his sword against its force.
The institution of a scheme of polity so radically contemptible and vicious is a memorable example of what the villainy of some men can
devise, the folly of others receive, and both establish, in despite of reason, reflection, and sensation.'"
An attack upon the lawfully established system of civil government in the Philippine Islands, like that which Dennie was accused of
making upon the republican form of government lawfully established in the United States and in the State of Pennsylvania would, we
think, if couched in scandalous language, constitute the precise offense described in section 8 of Act No. 292 as a scurrilous libel
against the Insular Government of the Philippine Islands.
Defamation of individuals, whether holding official positions or not, and whether directed to their public conduct or to their private life,
may always be adequately punished under the general libel law. Defamation of the Civil Commission as an aggregation, it being "a
body of persons definite and small enough for its individual members to be recognized as such" (Stephen, Digest of the Criminal Law,
art. 277), as well as defamation of any of the individual members of the Commission or of the Civil Governor, either in his public
capacity or as a private individual, may be so punished. The general libel law enacted by the Commission was in force when Act No.
292, was passed. There was no occasion for any further legislation on the subject of libels against the individuals by whom the Insular
Government is administered against the Insular Government in the sense of the aggregate of such individuals. There was occasion
for stringent legislation against seditious words or libels, and that is the main if not the sole purpose of the section under consideration.
It is not unreasonable to suppose that the Commission, in enacting this section, may have conceived of attacks of a malignant or
scurrilous nature upon the existing political system of the United States, or the political system established in these Islands by the
authority of the United States, as necessarily of a seditious tendency, but it is not so reasonable to suppose that they conceived of
attacks upon the personnel of the government as necessarily tending to sedition. Had this been their view it seems probable that they
would, like the framers of the Sedition Act of 1798, have expressly and specifically mentioned the various public officials and collegiate
governmental bodies defamation of which they meant to punish as sedition.
The article in question contains no attack upon the governmental system of the United States, and it is quite apparent that, though
grossly abusive as respects both the Commission as a body and some of its individual members, it contains no attack upon the
governmental system by which the authority of the United States is enforced in these Islands. The form of government by a Civil
Commission and a Civil Governor is not assailed. It is the character of the men who are intrusted with the administration of the
government that the writer is seeking to bring into disrepute by impugning the purity of their motives, their public integrity, and their
private morals, and the wisdom of their policy. The publication of the article, therefore, no seditious tendency being apparent,
constitutes no offense under Act No. 292, section 8.
The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

G.R. No. 116418 March 7, 1995

SALVADOR C. FERNANDEZ and ANICIA M. DE LIMA, petitioners,
vs.
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA, Commissioner, Civil Service
Commission, respondents.

FELICIANO, J.:
In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a Temporary Restraining Order, petitioners Salvador C.
Fernandez and Anicia M. de Lima assail the validity of Resolution No. 94-3710 of the Civil Service Commission ("Commission") and the
authority of the Commission to issue the same.
Petitioner Fernandez was serving as Director of the Office of Personnel Inspection and Audit ("OPIA") while petitioner de Lima was
serving as Director of the Office of the Personnel Relations ("OPR"), both at the Central Office of the Civil Service Commission in
Quezon City, Metropolitan Manila. While petitioners were so serving, Resolution No. 94-3710 signed by public respondents Patricia A..
Sto. Tomas and Ramon Ereneta, Jr., Chairman and Commissioner, respectively, of the Commission, was issued on 7 June
1994. 1 Resolution No. 94-3710 needs to be quoted in full:
RESOLUTION NO. 94-3710
WHEREAS, Section 17 of Book V of Executive Order 292 provides that ". . . as an independent constitutional body,
the Commission may effect changes in the organization as the need arises;"
WHEREAS, the Commission finds it imperative to effect changes in the organization to streamline its operations and
improve delivery of public service;
WHEREAS, the Commission finds it necessary to immediately effect changes in the organization of the Central
Offices in view of the need to implement new programs in lieu of those functions which were transferred to the
Regional Offices;
WHEREFORE, foregoing premises considered, the Commission hereby RESOLVES to effect the following changes
in its organization, specifically in the Central Offices:
1. The OCSS [Office of Career Systems and Standards], OPIA [Office of Personnel Inspection and Audit] and OPR
[Office of Personnel Relations] are merged to form the Research and Development Office (RDO).
2. The Office for Human Resource Development (OHRD) is renamed Human Resource Development Office (HRDO).
3. The following functions and the personnel assigned to the unit performing said functions are hereby transferred to
HRDO:
a. Administration of the Honor and Awards program under OCSS;
b. Registration and Accreditation of Unions under OPR; and
c. Accreditation of Agencies to take final action on appointments under OPIA.

4. The Office for Central Personnel Records (OCPR) is renamed Management Information Office (MIO).
5. The Information technology functions of OPM and the personnel assigned to the unit are transferred to MIO.
6. The following functions of OPM and the personnel assigned to the unit performing said functions are hereby
transferred to the Office of the Executive Director:
a. Financial Audit and Evaluation;
b. Internal Management and Improvement;
c. Research and Statistics; and
d. Planning and Programming.
7. The library service and its personnel under OCPR are transferred to the Central Administrative Office.
8. The budget allocated for the various functions shall be transferred to the Offices where the functions are
transferred. Records, fixtures and equipment that go with the functions shall be moved to where the functions are
transferred.
Annex A contains the manning list for all the offices, except the OCES.
The changes in the organization and in operations shall take place before end of July 1994.
Done in Quezon City, July 07, 1994.
(Signed)
Patricia A. Sto. Tomas
Chairman
(Signed) Did not participate
Ramon P. Ereneta, Jr., Thelma P. Gaminde
Commissioner Commissioner
Attested by:
(Signed)
Carmencita Giselle B. Dayson
Board Secretary V 2
During the general assembly of officers and employees of the Commission held in the morning of 28 July 1994, Chairman Sto. Tomas,
when apprised of objections of petitioners, expressed the determination of the Commission to implement Resolution No. 94-3710
unless restrained by higher authority.
Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, the Court required public respondents to file a Comment
on the Petition. On 21 September 1994, petitioners filed an Urgent Motion for Issuance of a Temporary Restraining Order, alleging that
petitioners had received Office Orders from the Commission assigning petitioner Fernandez to Region V at Legaspi City and petitioner
de Lima to Region III in San Fernando, Pampanga and praying that public respondents be restrained from enforcing these Office
Orders. The Court, in a Resolution dated 27 September 1994, granted this Motion and issued the Temporary Restraining Order prayed
for by petitioners.
The Commission filed its own Comment, dated 12 September 1994, on the Petition and then moved to lift the Temporary Restraining
Order. The Office of the Solicitor General filed a separate Comment dated 28 November 1994, defending the validity of Resolution No.
94-3710 and urging dismissal of the Petition. Petitioners filed separate Replies to these Comments. The Commission in turn filed a
Rejoinder (denominated "Comment [on] the Reply").
The principal issues raised in this Petition are the following:

(1) Whether or not the Civil Service Commission had legal authority to issue Resolution No. 94-3710 to the extent it
merged the OCSS [Office of Career Systems and Standards], the OPIA [Office of Personnel Inspection and Audit]
and the OPR [Office of Personnel Relations], to form the RDO [Research and Development Office]; and
(2) Whether or not Resolution No. 94-3710 violated petitioners' constitutional right to security of tenure.
I.
The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25 July 1987) sets out, in Book V, Title I, Subtitle A, Chapter
3, the internal structure and organization of the Commission in the following terms:
Sec. 16. Offices in the Commission The Commission shall have the following offices:
(1) The Office of the Executive Director . . .
(2) The Merit System Protection Board . . .
(3) The Office of Legal Affairs . . .
(4) The Office of Planning and Management . . .
(5) The Central Administrative Office . . .
(6) The Office of Central Personnel Records . . .
(7) The Office of Position Classification and
Compensation . . .
(8) The Office of Recruitment, Examination and
Placement . . .
(9) The Office of Career Systems and Standards shall provide leadership and assistance in the formulation and
evaluation of personnel systems and standards relative to performance appraisal, merit promotion and employee
incentive benefits and awards.
(10) The Office of Human Resource Development . . .
(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and regulations for the
effective conduct of inspection and audit of personnel and personnel management programs and the exercise of
delegated authority; provide technical and advisory services to Civil Service Regional Offices and government
agencies in the implementation of their personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance in the development and
implementation of policies, standards, rules and regulations governing corporate officials and employees in the areas
of recruitment, examination, placement, career development, merit and awards systems, position classification and
compensation, performance appraisal, employee welfare and benefits, discipline and other aspects of personnel
management on the basis of comparable industry practices.
(13) The Office of the Corporate Affairs . . .
(14) The Office of Retirement Administration . . .
(15) The Regional and Field Offices. . . . (Emphases in the original)
Immediately after the foregoing listing of offices of the Commission and their respective functions, the 1987 Revised Administrative
Code goes on to provide as follows:

Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at least one
(1) Assistant Director, and may have such divisions as are necessary to carry out their respective functions. As an
independent constitutional body, the Commission may effect chances in the organization as the need arises.
xxx xxx xxx 3
(Emphasis supplied)
Examination of the foregoing statutory provisions reveals that the OCSS, OPIA and OPR, and as well each of the other Offices listed in
Section 16 above, consist of aggregations of Divisions, each of which Divisions is in turn a grouping of Sections. Each Section, Division
and Office comprises a group of positions within the agency called the Civil Service Commission, each group being entrusted with a
more or less definable function or functions. These functions are related to one another, each of them being embraced by a common or
general subject matter. Clearly, each Office is an internal department or organizational unit within the Commission and that accordingly,
the OCSS, OPIA and OPR, as well as all the other Offices within the Commission constitute administrative subdivisions of the CSC. Put
a little differently, these offices relate to the internal structure of the Commission.
What did Resolution No. 94-3710 of the Commission do? Examination of Resolution No. 94-3710 shows that thereby the
Commission re-arranged some of the administrative units (i.e., Offices) within the Commission and, among other things, merged three
(3) of them (OCSS, OPIA and OPR) to form a new grouping called the "Research and Development Office (RDO)." The same
Resolution renamed some of the Offices of the Commission, e.g., the Office for Human Resource Development (OHRD) was renamed
Human Resource Development Office (HRDO); the Office for Central Personnel Records (OCPR) was renamed Management
Information Office (MIO). The Commission also re-allocated certain functions moving some functions from one Office to another; e.g.,
the information technology function of OPM (Office of Planning and Management) was transferred to the newly named Management
Information Office (MIO). This re-allocation or re-assignment of some functions carried with it the transfer of the budget earmarked for
such function to the Office where the function was transferred. Moreover, the personnel, records, fixtures and equipment that were
devoted to the carrying out of such functions were moved to the Offices to where the functions were transferred.
The objectives sought by the Commission in enacting Resolution No. 94-3710 were described in that Resolution in broad terms as
"effect[ing] changes in the organization to streamline [the Commission's] operations and improve delivery of service." These changes in
internal organization were rendered necessary by, on the one hand, the decentralization and devolution of the Commission's functions
effected by the creation of fourteen (14) Regional Offices and ninety-five (95) Field Offices of the Commission throughout the country, to
the end that the Commission and its staff may be brought closer physically to the government employees that they are mandated to
serve. In the past, its functions had been centralized in the Head Office of the Commission in Metropolitan Manila and Civil Service
employees all over the country were compelled to come to Manila for the carrying out of personnel transactions. Upon the other hand,
the dispersal of the functions of the Commission to the Regional Offices and the Field Offices attached to various governmental
agencies throughout the country makes possible the implementation of new programs of the Commission at its Central Office in
Metropolitan Manila.
The Commission's Office Order assigning petitioner de Lima to the CSC Regional Office No. 3 was precipitated by the incumbent
Regional Director filing an application for retirement, thus generating a need to find a replacement for him. Petitioner de Lima was being
assigned to that Regional Office while the incumbent Regional Director was still there to facilitate her take over of the duties and
functions of the incumbent Director. Petitioner de Lima's prior experience as a labor lawyer was also a factor in her assignment to
Regional Office No. 3 where public sector unions have been very active. Petitioner Fernandez's assignment to the CSC Regional Office
No. 5 had, upon the other hand, been necessitated by the fact that the then incumbent Director in Region V was under investigation
and needed to be transferred immediately to the Central Office. Petitioner Fernandez was deemed the most likely designee for Director
of Regional Office No. 5 considering that the functions previously assigned to him had been substantially devolved to the Regional
Offices such that his reassignment to a Regional Office would result in the least disruption of the operations of the Central Office. 4
It thus appears to the Court that the Commission was moved by quite legitimate considerations of administrative efficiency and
convenience in promulgating and implementing its Resolution No. 94-3710 and in assigning petitioner Salvador C. Fernandez to the
Regional Office of the Commission in Region V in Legaspi City and petitioner Anicia M. de Lima to the Commission's Regional Office in
Region III in San Fernando, Pampanga. It is also clear to
the Court that the changes introduced and formalized through Resolution No. 94-3710 re-naming of existing Offices; re-arrangement
of the groupings of Divisions and Sections composing particular Offices; re-allocation of existing functions (and related personnel;
budget, etc.) among the re-arranged Offices are precisely the kind of internal changes which are referred to in Section 17 (Book V,
Title I, Subtitle A, Chapter 3) of the 1987 Revised Administrative Code), quoted above, as "chances in the organization" of the
Commission.
Petitioners argue that Resolution No. 94-3710 effected the "abolition" of public offices, something which may be done only by the same
legislative authority which had created those public offices in the first place.

The Court is unable, in the circumstances of this case, to accept this argument. The term "public office" is frequently used to refer to the
right, authority and duty, created and conferred by law, by which, for a given period either fixed by law or enduring at the pleasure of the
creating power, an individual is invested with some portion of the sovereign functions of government, to be exercised by that individual
for the benefit of the public. 5 We consider that Resolution No. 94-3710 has not abolished any public office as that term is used in the
law of public officers. 6It is essential to note that none of the "changes in organization" introduced by Resolution No. 94-3710 carried
with it or necessarily involved the termination of the relationship of public employment between the Commission and any of its officers
and employees. We find it very difficult to suppose that the 1987 Revised Administrative Code having mentioned fourteen (14) different
"Offices" of the Civil Service Commission, meant to freeze those Offices and to cast in concrete, as it were, the internal organization of
the commission until it might please Congress to change such internal organization regardless of the ever changing needs of the Civil
Service as a whole. To the contrary, the legislative authority had expressly authorized the Commission to carry out "changes in the
organization," as the need [for such changes] arises." 7Assuming, for purposes of argument merely, that legislative authority was
necessary to carry out the kinds off changes contemplated in Resolution No. 94-3710 (and the Court is not saying that such authority is
necessary), such legislative authority was validly delegated to the Commission by Section 17 earlier quoted. The legislative standards
to be observed and respected in the exercise of such delegated authority are set out not only in Section 17 itself (i.e., "as the need
arises"), but also in the Declaration of Policies found in Book V, Title I, Subtitle A, Section 1 of the 1987 Revised Administrative Code
which required the Civil Service Commission
as the central personnel agency of the Government [to] establish a
career service, adopt measures to promote efficiency [and] responsiveness . . . in the civil service . . . and that
personnel functions shall be decentralized, delegating the corresponding authority to the departments, offices and
agencies where such functions can be effectively performed. (Emphasis supplied)
II.
We turn to the second claim of petitioners that their right to security of tenure was breached by the respondents in promulgating
Resolution No. 94-3710 and ordering petitioners' assignment to the Commission's Regional Offices in Regions III and V. Section 2(3) of
Article IX(B) of the 1987 Constitution declared that "no officer or employee of the Civil Service shall be removed or suspended except
for cause provided by law." Petitioners in effect contend that they were unlawfully removed from their positions in the OPIA and OPR by
the implementation of Resolution No. 94-3710 and that they cannot, without their consent, be moved out to the Regional Offices of the
Commission.
We note, firstly, that appointments to the staff of the Commission are not appointments to a specified public office but rather
appointments to particular positions or ranks. Thus, a person may be appointed to the position of Director III or Director IV; or to the
position of Attorney IV or Attorney V; or to the position of Records Officer I or Records Officer II; and so forth. In the instant case,
petitioners were each appointed to the position of Director IV, without specification of any particular office or station. The same is true
with respect to the other persons holding the same position or rank of Director IV of the Commission.
Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative Code recognizes reassignment as a management
prerogative vested in the Commission and, for that matter, in any department or agency of government embraced in the civil service:
Sec. 26. Personnel Actions. . . .
xxx xxx xxx
As used in this Title, any action denoting the movement or progress of personnel in the civil service shall be known as
personnel action. Such action shall include appointment through certification, promotion, transfer, re-instatement, reemployment, detail, reassignment, demotion, and separation. All personnel actions shall be in accordance with such
rules, standards, and regulations as may be promulgated by the Commission.
xxx xxx xxx
(7) Reassignment. An employee may be re-assigned from one organizational unit to another in the same
agency, Provided, That such re-assignment shall not involve a reduction in rank status and salary. (Emphasis
supplied)
It follows that the reassignment of petitioners Fernandez and de Lima from their previous positions in OPIA and OPR, respectively, to
the Research and Development Office (RDO) in the Central Office of the Commission in Metropolitan Manila and their subsequent
assignment from the RDO to the Commission's Regional Offices in Regions V and III had been effected with express statutory authority
and did not constitute removals without lawful cause. It also follows that such re-assignment did not involve any violation of the
constitutional right of petitioners to security of tenure considering that they retained their positions of Director IV and would continue to

enjoy the same rank, status and salary at their new assigned stations which they had enjoyed at the Head Office of the Commission in
Metropolitan Manila. Petitioners had not, in other words, acquired a vested right to serve at the Commission's Head Office.
Secondly, the above conclusion is compelled not only by the statutory provisions relevant in the instant case, but also by a long line of
cases decided by this Court in respect of different agencies or offices of government.
In one of the more recent of these cases, Department of Education Culture and Sports, etc., et al. v. Court of Appeals, et al., 8 this Court
held that a person who had been appointed as "Secondary School Principal II" in the Division of City Schools, District II, Quezon City,
National Capital Region, and who had been stationed as High School Principal in the Carlos Albert High School in Quezon for a number
of years, could lawfully be reassigned or transferred to the Manuel Roxas High School, also in Quezon City, without demotion in rank or
diminution of salry. This Court held:
The aforequoted provision of Republic Act No. 4670 particularly Section 6 thereof which provides that except for
cause and in the exigencies of the service no teacher shall be transferred without his consent from one station to
another, finds no application in the case at bar as this is predicated upon the theory that the teacher concerned is
appointed not merely assigned to a particular station. Thus:
The rule pursued by plaintiff only goes so far as
the appointed indicates a specification. Otherwise, the constitutionally ordained security of tenure
cannot shield her. In appointments of this nature, this Court has consistently rejected the officer's
demand to remain even as public service dictates that a transfer be made in a particular
station. Judicial attitude toward transfers of this nature is expressed in the following statement
in Ibaez, et al. vs. Commission on Elections, et al. (G.R. No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]);
That security of tenure is an essential and constitutionally guaranteed feature of
our Civil Service System, is not open to debate. The mantle of its protection
extends not only against removals without cause but also against unconsented
transfer which, as repeatedly enunciatEd, are tantamount to removals which are
within the ambit of the fundamental guarantee. However, the availability of that
security of tenure necessarily depends, in the first instance, upon the nature of
the appointment (Hojilla vs. Marino, 121 Phil. 280 [1965].) Such that the rule
which proscribes transfers without consent as anathema to the security of tenure
is predicated upon the theory that the officer involved is appointed not
merely assigned to a particular station (Miclat v. Ganaden, et al., 108 Phil. 439
[1960]; Jaro v. Hon. Valencia, et al., 118 Phil. 728 [1963]). [Brillantes v. Guevarra,
27 SCRA 138 (1969)]
The appointment of Navarro as principal does not refer to any particular station or school. As such, she could be
assigned to any station and she is not entitled to stay permanently at any specific school. (Bongbong v. Parado, 57
SCRA 623) When she was assigned to the Carlos Albert High School, it could not have been with the intention to let
her stay in said school permanently. Otherwise, her appointment would have so stated. Consequently, she may be
assigned to any station or school in Quezon City as the exigencies of public service require even without consent. As
this Court ruled in Brillantes v. Guevarra, 27 SCRA 138,
143
Plaintiff's confident stride falters. She took too loose a view of the applicable jurisprudence. Her
refuge behind the mantle of security of tenure guaranteed by the Constitution is not impenetrable.
She proceeds upon the assumption that she occupies her station in Sinalang Elementary School by
appointment. But her first appointment as Principal merely reads thus: "You are hereby appointed a
Principal (Elementary School) in the Bureau of Public Schools, Department of Education", without
mentioning her station. She cannot therefore claim security of tenure as Principal of Sinalang
Elementary School or any particular station. She may be assigned to any station as exigency of
public service requires, even without her consent. She thus has no right of choice. 9 (Emphasis
supplied; citation omitted)
In the very recent case of Fernando, et al. v. Hon. Sto. Tomas, etc., et
a1., 10 the Court addressed appointments of petitioners as "Mediators-Arbiters in the National Capital Region" in dismissing a challenge
on certiorari to resolutions of the CSC and orders of the Secretary of Labor. The Court said:
Petitioners were appointed as Mediator Arbiters in the National Capital Region. They were not, however, appointed to
a specific station or particular unit of the Department of Labor in the National Capital Region (DOLE-NCR).

Consequently, they can always be reassigned from one organizational unit to another of the same agency where, in
the opinion of respondent Secretary, their services may be used more effectively. As such they can neither claim a
vested right to the station to which they were assigned nor to security of tenure thereat. As correctly observed by the
Solicitor General, petitioners' reassignment is not a transfer for they were not removed from their position as medarbiters. They were not given new appointments to new positions. It indubitably follows, therefore, that Memorandum
Order No. 4 ordering their reassignment in the interest of the service is legally in order. 11 (Emphases supplied)
In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the Bureau of Public Schools of the Department of
Education, Culture and Sports, ruled as follows:
After a careful scrutiny of the records, it is to be underscored that the appointment of private respondent Yap is simply
that of a District Supervisor of the Bureau of Public Schools which does not indicate a specific station (Rollo, p. 13). A
such, she could be assigned to any station and she is no entitled to stay permanently at any specific
station (Bongbong v. Parado, 57 SCRA 623 [1974]; Department of Education, Culture and Sports v. Court of Appeals
[G.R. 81032, March 22, 1990] citingBrillantes v. Guevarra [27 SCRA 138 [1969]). 13
Again, in Ibaez v. Commission on Elections, 14 the Court had before it petitioners' appointments as "Election Registrars in the
Commission of Elections," without any intimation to what city, municipality or municipal district they had been appointed as such. 15 The
Court held that since petitioners "were not appointed to, and consequently not entitled to any security of tenure or permanence in, any
specific station," "on general principles, they [could] be transferred as the exigencies of the service required," and that they had no right
to complain against any change in assignment. The Court further held that assignment to a particular station after issuance of the
appointment was not necessary to complete such appointment:
. . . . We cannot subscribe to the theory that an assignment to a particular station, in the light of the terms of the
appointments in question, was necessary to complete the said appointments. The approval thereof by the
Commissioner of Civil Service gave those appointments the stamp of finality.With the view that the respondent
Commission then took of its power in the premises and the demand of the mission it set out to accomplish with the
appointments it extended, said appointments were definitely meant to be complete as then issued. The subsequent
assignment of the appointees thereunder that the said respondent Commission held in reserve to be exercised as the
needs of each locality justified did not in any way detract from the perfection attained by the appointments
beforehand. And the respective appointees were entitled only to such security of tenure as the appointment papers
concerned actually conferred not in that of any place to which they may have been subsequently assigned. . . . As
things stand, in default of any particular station stated in their respective appointments, no security of tenure can be
asserted by the petitioners on the basis of the mere assignments which were given to them. A contrary rule will erase
altogether the demarcation line we have repeatedly drawn between appointment and assignment as two distinct
concepts in the law of public officers. 16 (Emphases supplied)
The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare Office Incharge, Division of Urban, Rural and Community
Administration, Social Welfare Administration." She was assigned as Social Welfare Incharge of the Mountain Province, by an office
order of the Administrator, Social Welfare Administration. After a little more than a year; petitioner was assigned elsewhere and
respondent Ganaden transferred to petitioner's first station in Baguio City. The Court ruled that petitioner was not entitled to remain in
her first station, In Jaro v. Hon. Valencia, et al., 18 petitioner Dr. Jaro had been appointed "Physician in the Municipal Maternity and
Charity Clinics, Bureau of Hospitals." He was first assigned to the Municipal Maternity and Charity Clinics in Batulati, Davao, and later
to the corresponding clinic in Saug, Davao and then to Catil, Davao. He was later assigned to the Municipality of Padada, also of Davao
Province. He resisted his last assignment and brought mandamus against the Secretary of Health to compel the latter to return him to
his station in Catil, Davao as Municipal Health Officer thereof. The Court, applying Miclat v. Ganaden dismissed this Petition holding
that his appointment not being to any specific station but as a physician in the Municipal Maternity and Charity Clinics, Bureau of
Hospitals, he could be transferred or assigned to any station where, in the opinion of the Secretary of Health, his services may be
utilized more effectively. 19
Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of petitioner Sta. Maria as "Dean, College of Education,
University of the Philippines." Dean Sta. Maria was transferred by the President of the University of the Philippines to the Office of the
President, U.P., without demotion in rank or salary, thereby acceding to the demands of student activists who were boycotting their
classes in the U.P. College of Education. Dean Sta. Maria assailed his transfer as an illegal and unconstitutional removal from office. In
upholding Dean Sta. Maria's claim, the Court, speaking through Mr. Justice Sanchez, laid down the applicable doctrine in the following
terms:
4. Concededly, transfers there are which do not amount to removal. Some such transfer can be effected without the
need for charges being preferred, without trial or hering, and even without the consent of the employee.
The clue to such transfers may be found in the "nature of the appointment." Where the appointment does not indicate
a specific station, an employee may be transferred or reassigned provided the transfer affects no substantial change

in title, rank and salary. Thus one who is appointed "principal in the Bureau of Public Schools" and is designated to
head a pilot school may be transferred to the post of principal of another school.
And the rule that outlaws unconsented transfers as anathema to security of tenure applies only to an officer who is
appointed not merely assigned to a particular station. Such a rule does not prescribe a transfer carried out
under a specific statute that empowers the head of an agency to periodically reassign the employees and officers in
order to improve the service of the agency. The use of approved techniques or methods in personnel management to
harness the abilities of employees to promote optimum public service cannot-be objected to. . . .
5. The next point of inquiry is whether or not Administrative Order 77 would stand the test of validity vis-a-vis the
principles just enunciated.
xxx xxx xxx
To be stressed at this point, however, is that the appointment of Sta. Maria is that of "Dean, College of Education,
University of the Philippines." He is not merely a dean "in the university." His appointment is to a specific
position; and, more importantly, to a specific station. 21 (Citations omitted; emphases supplied)
For all the foregoing we conclude that the reassignment of petitioners Fernandez and de Lima from their stations in the OPIA and OPR,
respectively, to the Research Development Office (RDO) and from the RDO to the Commissions Regional Offices in Regions V and III,
respectively, without their consent, did not constitute a violation of their constitutional right to security of tenure.
WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with Prayer for Writ of Preliminary Injunction or Temporary
Restraining Order is hereby DISMISSED. The Temporary Restraining Order issued by this Court on 27 September 1994 is hereby
LIFTED. Costs against petitioners.
SO ORDERED.

G.R. No. 115863 March 31, 1995

AIDA D. EUGENIO, petitioner, vs.CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR
ENRIQUEZ, JR.,respondents.
PUNO, J.:
The power of the Civil Service Commission to abolish the Career Executive Service Board is challenged in this petition for certiorari and
prohibition.
First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a Career Executive Service
(CES) Eligibility and a CESO rank on August 2, 1993, she was given a CES eligibility. On September 15, 1993, she was recommended
to the President for a CESO rank by the Career Executive Service Board. 1
All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service Commission 2 passed Resolution No. 93-4359, viz:
RESOLUTION NO. 93-4359
WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be administered by the Civil Service
Commission, . . .;
WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides that "The Civil Service Commission,
as the central personnel agency of the government, is mandated to establish a career service and adopt measures to
promote morale, efficiency, integrity, responsiveness, progresiveness and courtesy in the civil service, . . .";

WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative Code of 1987 grants the Commission the
power, among others, to administer and enforce the constitutional and statutory provisions on the merit system for all
levels and ranks in the Civil Service;
WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of 1987 Provides, among others, that The
Career Service shall be characterized by (1) entrance based on merit and fitness to be determined as far as
practicable by competitive examination, or based highly technical qualifications; (2) opportunity for advancement to
higher career positions; and (3) security of tenure;
WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code of 1987 provides that "The third level
shall cover Positions in the Career Executive Service";
WHEREAS, the Commission recognizes the imperative need to consolidate, integrate and unify the administration of
all levels of positions in the career service.
WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the Administrative Code of 1987 confers on the
Commission the power and authority to effect changes in its organization as the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil Service Commission shall enjoy fiscal
autonomy and the necessary implications thereof;
NOW THEREFORE, foregoing premises considered, the Civil Service Commission hereby resolves to streamline
reorganize and effect changes in its organizational structure. Pursuant thereto, the Career Executive Service Board,
shall now be known as the Office for Career Executive Service of the Civil Service Commission. Accordingly, the
existing personnel, budget, properties and equipment of the Career Executive Service Board shall now form part of
the Office for Career Executive Service.
The above resolution became an impediment. to the appointment of petitioner as Civil Service Officer, Rank IV. In a letter to petitioner,
dated June 7, 1994, the Honorable Antonio T. Carpio, Chief Presidential legal Counsel, stated:
xxx xxx xxx
On 1 October 1993 the Civil Service Commission issued CSC Resolution No. 93-4359 which abolished the Career
Executive Service Board.
Several legal issues have arisen as a result of the issuance of CSC Resolution No. 93-4359, including whether the
Civil Service Commission has authority to abolish the Career Executive Service Board. Because these issues remain
unresolved, the Office of the President has refrained from considering appointments of career service eligibles to
career executive ranks.
xxx xxx xxx
You may, however, bring a case before the appropriate court to settle the legal issues arising from issuance by the
Civil Service Commission of CSC Resolution No. 93-4359, for guidance of all concerned.
Thank You.
Finding herself bereft of further administrative relief as the Career Executive Service Board which recommended her CESO Rank IV
has been abolished, petitioner filed the petition at bench to annul, among others, resolution No. 93-4359. The petition is anchored on
the following arguments:
A.
IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION USURPED THE LEGISLATIVE
FUNCTIONS OF CONGRESS WHEN IT ABOLISHED THE CESB, AN OFFICE CREATED BY LAW, THROUGH THE
ISSUANCE OF CSC: RESOLUTION NO. 93-4359;
B.

ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED THE LEGISLATIVE FUNCTIONS
OF CONGRESS WHEN IT ILLEGALLY AUTHORIZED THE TRANSFER OF PUBLIC MONEY, THROUGH THE
ISSUANCE OF CSC RESOLUTION NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the contentions of petitioner. Respondent Commission, however, chose
to defend its ground. It posited the following position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE PUBLIC RESPONDENT-CSC.
II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR APPOINTMENT TO A CESO RANK OF
PETITIONER EUGENIO WAS A VALID ACT OF THE CAREER EXECUTIVE SERVICE BOARD OF THE CIVIL
SERVICE COMMISSION AND IT DOES NOT HAVE ANY DEFECT.
III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE VALIDITY OF THE
RECOMMENDATION OF THE CESB IN FAVOR OF PETITIONER EUGENIO SINCE THE PRESIDENT HAS
PREVIOUSLY APPOINTED TO CESO RANK FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID PETITIONER.
FURTHERMORE, LACK OF MEMBERS TO CONSTITUTE A QUORUM. ASSUMING THERE WAS NO QUORUM, IS
NOT THE FAULT OF PUBLIC RESPONDENT CIVIL SERVICE COMMISSION BUT OF THE PRESIDENT WHO HAS
THE POWER TO APPOINT THE OTHER MEMBERS OF THE CESB.
IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED BY LAW (Sec. 12 (1), Title I,
Subtitle A, Book V of the Administrative Code of the 1987). THIS PARTICULAR ISSUE HAD ALREADY BEEN
SETTLED WHEN THE HONORABLE COURT DISMISSED THE PETITION FILED BY THE HONORABLE
MEMBERS OF THE HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A. DATUMANONG, FELICIANO R.
BELMONTE, JR., RENATO V. DIAZ, AND MANUEL M. GARCIA IN G.R. NO. 114380. THE AFOREMENTIONED
PETITIONERS ALSO QUESTIONED THE INTEGRATION OF THE CESB WITH THE COMMISSION.
We find merit in the petition. 3
The controlling fact is that the Career Executive Service Board (CESB) was created in the Presidential Decree (P.D.) No. 1 on
September 1, 1974 4 which adopted the Integrated Plan. Article IV, Chapter I, Part of the III of the said Plan provides:
Article IV Career Executive Service
1. A Career Executive Service is created to form a continuing pool of well-selected and development oriented career
administrators who shall provide competent and faithful service.
2. A Career Executive Service hereinafter referred to in this Chapter as the Board, is created to serve as the
governing body of the Career Executive Service. The Board shall consist of the Chairman of the Civil Service
Commission as presiding officer, the Executive Secretary and the Commissioner of the Budget as ex-officio members
and two other members from the private sector and/or the academic community who are familiar with the principles
and methods of personnel administration.
xxx xxx xxx
5. The Board shall promulgate rules, standards and procedures on the selection, classification, compensation and
career development of members of the Career Executive Service. The Board shall set up the organization and
operation of the service. (Emphasis supplied)
It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the legislature. This follows an
unbroken stream of rulings that the creation and abolition of public offices is primarily a legislative function. As aptly summed up in AM
JUR 2d on Public Officers and
Employees, 5 viz:
Except for such offices as are created by the Constitution, the creation of public offices is primarily a legislative
function. In so far as the legislative power in this respect is not restricted by constitutional provisions, it supreme, and
the legislature may decide for itself what offices are suitable, necessary, or convenient. When in the exigencies of
government it is necessary to create and define duties, the legislative department has the discretion to determine

whether additional offices shall be created, or whether these duties shall be attached to and become ex-officio duties
of existing offices. An office created by the legislature is wholly within the power of that body, and it may prescribe the
mode of filling the office and the powers and duties of the incumbent, and if it sees fit, abolish the office.
In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On the contrary, in all the
General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the operation of CESB. Respondent
Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987 as the source of its
power to abolish the CESB. Section 17 provides:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at least one
Assistant Director, and may have such divisions as are necessary independent constitutional body, the Commission
may effect changes in the organization as the need arises.
But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with Section 16 of the said Code which
enumerates the offices under the respondent Commission, viz:
Sec. 16. Offices in the Commission. The Commission shall have the following offices:
(1) The Office of the Executive Director headed by an Executive Director, with a Deputy Executive Director shall
implement policies, standards, rules and regulations promulgated by the Commission; coordinate the programs of the
offices of the Commission and render periodic reports on their operations, and perform such other functions as may
be assigned by the Commission.
(2) The Merit System Protection Board composed of a Chairman and two (2) members shall have the following
functions:
xxx xxx xxx
(3) The Office of Legal Affairs shall provide the Chairman with legal advice and assistance; render counselling
services; undertake legal studies and researches; prepare opinions and ruling in the interpretation and application of
the Civil Service law, rules and regulations; prosecute violations of such law, rules and regulations; and represent the
Commission before any court or tribunal.
(4) The Office of Planning and Management shall formulate development plans, programs and projects; undertake
research and studies on the different aspects of public personnel management; administer management
improvement programs; and provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with personnel, financial, logistics and other basic
support services.
(6) The Office of Central Personnel Records shall formulate and implement policies, standards, rules and regulations
pertaining to personnel records maintenance, security, control and disposal; provide storage and extension services;
and provide and maintain library services.
(7) The Office of Position Classification and Compensation shall formulate and implement policies, standards, rules
and regulations relative to the administration of position classification and compensation.
(8) The Office of Recruitment, Examination and Placement shall provide leadership and assistance in developing and
implementing the overall Commission programs relating to recruitment, execution and placement, and formulate
policies, standards, rules and regulations for the proper implementation of the Commission's examination and
placement programs.
(9) The Office of Career Systems and Standards shall provide leadership and assistance in the formulation and
evaluation of personnel systems and standards relative to performance appraisal, merit promotion, and employee
incentive benefit and awards.
(10) The Office of Human Resource Development shall provide leadership and assistance in the development and
retention of qualified and efficient work force in the Civil Service; formulate standards for training and staff
development; administer service-wide scholarship programs; develop training literature and materials; coordinate and
integrate all training activities and evaluate training programs.

(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and regulations for the
effective conduct or inspection and audit personnel and personnel management programs and the exercise of
delegated authority; provide technical and advisory services to Civil Service Regional Offices and government
agencies in the implementation of their personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance in the development and
implementation of policies, standards, rules and regulations in the accreditation of employee associations or
organizations and in the adjustment and settlement of employee grievances and management of employee disputes.
(13) The Office of Corporate Affairs shall formulate and implement policies, standards, rules and regulations
governing corporate officials and employees in the areas of recruitment, examination, placement, career
development, merit and awards systems, position classification and compensation, performing appraisal, employee
welfare and benefit, discipline and other aspects of personnel management on the basis of comparable industry
practices.
(14) The Office of Retirement Administration shall be responsible for the enforcement of the constitutional and
statutory provisions, relative to retirement and the regulation for the effective implementation of the retirement of
government officials and employees.
(15) The Regional and Field Offices. The Commission shall have not less than thirteen (13) Regional offices each
to be headed by a Director, and such field offices as may be needed, each to be headed by an official with at least
the rank of an Assistant Director.
As read together, the inescapable conclusion is that respondent Commission's power to reorganize is limited to offices under
its control as enumerated in Section 16, supra. From its inception, the CESB was intended to be an autonomous entity, albeit
administratively attached to respondent Commission. As conceptualized by the Reorganization Committee "the CESB shall be
autonomous. It is expected to view the problem of building up executive manpower in the government with a broad and
positive outlook." 6 The essential autonomous character of the CESB is not negated by its attachment to respondent
Commission. By said attachment, CESB was not made to fall within the control of respondent Commission. Under the
Administrative Code of 1987, the purpose of attaching one functionally inter-related government agency to another is to attain
"policy and program coordination." This is clearly etched out in Section 38(3), Chapter 7, Book IV of the aforecited Code, to
wit:
(3) Attachment. (a) This refers to the lateral relationship between the department or its equivalent and attached
agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by
having the department represented in the governing board of the attached agency or corporation, either as chairman
or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or
agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and
having the department or its equivalent provide general policies through its representative in the board, which shall
serve as the framework for the internal policies of the attached corporation or agency.
Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service Commission, G. R. No. 114380 where the
petition assailing the abolition of the CESB was dismissed for lack of cause of action. Suffice to state that the reliance is misplaced
considering that the cited case was dismissed for lack of standing of the petitioner, hence, the lack of cause of action.
IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent Commission is hereby annulled and set
aside. No costs.SO ORDERED.
G.R. No. 84301. April 7, 1993.
NATIONAL LAND TITLES AND DEEDS REGISTRATION ADMINISTRATION, petitioner, vs.CIVIL SERVICE COMMISSION and
VIOLETA L. GARCIA, respondents.
The Solicitor General for petitioner.
Raul R. Estrella for private respondent.
SYLLABUS
1. ADMINISTRATIVE LAW; EXECUTIVE ORDER NO. 649; REORGANIZED LAND REGISTRATION COMMISSION TO NALTDRA;
EXPRESSLY PROVIDED THE ABOLITION OF EXISTING POSITIONS. Executive Order No. 649 authorized the reorganization of

the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA). It abolished
all the positions in the now defunct LRC and required new appointments to be issued to all employees of the NALTDRA. The question
of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever if there is an
explicit declaration in the law itself. A closer examination of Executive Order No. 649 which authorized the reorganization of the Land
Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law
in express terms, provided for the abolition of existing positions. Thus, without need of any interpretation, the law mandates that from
the moment an implementing order is issued, all positions in the Land Registration Commission are deemed non-existent. This,
however, does not mean removal. Abolition of a position does not involve or mean removal for the reason that removal implies that the
post subsists and that one is merely separated therefrom. (Arao vs. Luspo, 20 SCRA 722 [1967]) After abolition, there is in law no
occupant. Thus, there can be no tenure to speak of. It is in this sense that from the standpoint of strict law, the question of any
impairment of security of tenure does not arise. (De la Llana vs. Alba, 112 SCRA 294 [1982])
2. ID.; ID.; ID.; REORGANIZATION, VALID WHEN PURSUED IN GOOD FAITH; CASE AT BAR. Nothing is better settled in our law
than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two
questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in good faith? There is no dispute
over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9, Article XVII of the
1973 Constitution. The power to reorganize is, however; not absolute. We have held in Dario vs. Mison that reorganizations in this
jurisdiction have been regarded as valid provided they are pursued in good faith. This court has pronounced that if the newly created
office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different
from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one
office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are
given to an existing officer or office. Executive Order No. 649 was enacted to improve the services and better systematize the operation
of the Land Registration Commission. A reorganization is carried out in good faith if it is for the purpose of economy or to make
bureaucracy more efficient. To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to
meet the changing circumstances and new development of the times. Private respondent Garcia who formerly held the position of
Deputy Register of Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The
additional qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid
reorganization measure.
3. ID.; ID.; ID.; THERE IS NO VESTED PROPERTY RIGHT TO BE RE-EMPLOYED IN A REORGANIZED OFFICE; CASE AT BAR.
There is no such thing as a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional offices
which provide for special immunity as regards salary and tenure, no one can be said to have any vested right in an office or its salary.
None of the exceptions to this rule are obtaining in this case. To reiterate, the position which private respondent Garcia would like to
occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no vested property right to
be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the reorganization
law for permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the
express mandate of the law.
DECISION
CAMPOS, JR., J p:
The sole issue for our consideration in this case is whether or not membership in the bar, which is the qualification requirement
prescribed for appointment to the position of Deputy Register of Deeds under Section 4 of Executive Order No. 649 (Reorganizing the
Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration or NALTDRA) should be
required of and/or applied only to new applicants and not to those who were already in the service of the LRC as deputy register of
deeds at the time of the issuance and implementation of the abovesaid Executive Order.
The facts, as succinctly stated in the Resolution ** of the Civil Service Commission, are as follows:
"The records show that in 1977, petitioner Garcia, a Bachelor of Laws graduate and a first grade civil service eligible was appointed
Deputy Register of Deeds VII under permanent status. Said position was later reclassified to Deputy Register of Deeds III pursuant to
PD 1529, to which position, petitioner was also appointed under permanent status up to September 1984. She was for two years, more
or less, designated as Acting Branch Register of Deeds of Meycauayan, Bulacan. By virtue of Executive Order No. 649 (which took
effect on February 9, 1981) which authorized the restructuring of the Land Registration Commission to National Land Titles and Deeds
Registration Administration and regionalizing the Offices of the Registers therein, petitioner Garcia was issued an appointment as
Deputy Register of Deeds II on October 1, 1984, under temporary status, for not being a member of the Philippine Bar. She appealed to
the Secretary of Justice but her request was denied. Petitioner Garcia moved for reconsideration but her motion remained unacted. On
October 23, 1984, petitioner Garcia was administratively charged with Conduct Prejudicial to the Best Interest of the Service. While said
case was pending decision, her temporary appointment as such was renewed in 1985. In a Memorandum dated October 30, 1986, the
then Minister, now Secretary, of Justice notified petitioner Garcia of the termination of her services as Deputy Register of Deeds II on
the ground that she was "receiving bribe money". Said Memorandum of Termination which took effect on February 9, 1987, was the

subject of an appeal to the Inter-Agency Review Committee which in turn referred the appeal to the Merit Systems Protection Board
(MSPB).
In its Order dated July 6, 1987, the MSPB dropped the appeal of petitioner Garcia on the ground that since the termination of her
services was due to the expiration of her temporary appointment, her separation is in order. Her motion for reconsideration was denied
on similar ground." 1
However, in its Resolution 2 dated June 30, 1988, the Civil Service Commission directed that private respondent Garcia be restored to
her position as Deputy Register of Deeds II or its equivalent in the NALTDRA. It held that "under the vested right theory the new
requirement of BAR membership to qualify for permanent appointment as Deputy Register of Deeds II or higher as mandated under
said Executive Order, would not apply to her (private respondent Garcia) but only to the filling up of vacant lawyer positions on or after
February 9, 1981, the date said Executive Order took effect." 3 A fortiori, since private respondent Garcia had been holding the position
of Deputy Register of Deeds II from 1977 to September 1984, she should not be affected by the operation on February 1, 1981 of
Executive Order No. 649.
Petitioner NALTDRA filed the present petition to assail the validity of the above Resolution of the Civil Service Commission. It contends
that Sections 8 and 10 of Executive Order No. 649 abolished all existing positions in the LRC and transferred their functions to the
appropriate new offices created by said Executive Order, which newly created offices required the issuance of new appointments to
qualified office holders. Verily, Executive Order No. 649 applies to private respondent Garcia, and not being a member of the Bar, she
cannot be reinstated to her former position as Deputy Register of Deeds II.
We find merit in the petition.
Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and
Deeds Registration Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments to
be issued to all employees of the NALTDRA.
The question of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever
if there is an explicit declaration in the law itself. 4 A closer examination of Executive Order No. 649 which authorized the reorganization
of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals
that said law in express terms, provided for the abolition of existing positions, to wit:
Sec. 8. Abolition of Existing Positions in the Land Registration Commission . . .
All structural units in the Land Registration Commission and in the registries of deeds, and all Positions therein shall cease to exist from
the date specified in the implementing order to be issued by the President pursuant to the preceding paragraph. Their pertinent
functions, applicable appropriations, records, equipment and property shall be transferred to the appropriate staff or offices therein
created. (Emphasis Supplied.)
Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all positions in the
Land Registration Commission are deemed non-existent. This, however, does not mean removal. Abolition of a position does not
involve or mean removal for the reason that removal implies that the post subsists and that one is merely separated therefrom. 5 After
abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that from the standpoint of strict law,
the question of any impairment of security of tenure does not arise. 6
Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith
suffers from no infirmity. Two questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in
good faith?
There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9,
Article XVII of the 1973 Constitution, the applicable law at that time:
Sec. 9. All officials and employees in the existing Government of the Republic of the Philippines shall continue in office until otherwise
provided by law or decreed by the incumbent President of the Philippines, but all officials whose appointments are by this Constitution
vested in the Prime Minister shall vacate their respective offices upon the appointment and qualifications of their successors.
The power to reorganize is, however; not absolute. We have held in Dario vs. Mison 7 that reorganizations in this jurisdiction have been
regarded as valid provided they are pursued in good faith. This court has pronounced 8 that if the newly created office has substantially
new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished,
even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a

new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or
office.
Executive Order No. 649 was enacted to improve the services and better systematize the operation of the Land Registration
Commission. 9 A reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. 10
To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet the changing
circumstances and new development of the times. 11 Private respondent Garcia who formerly held the position of Deputy Register of
Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional
qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid reorganization
measure.
A final word, on the "vested right theory" advanced by respondent Civil Service Commission. There is no such thing as a vested interest
or an estate in an office, or even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards
salary and tenure, no one can be said to have any vested right in an office or its salary. 12 None of the exceptions to this rule are
obtaining in this case.
To reiterate, the position which private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No.
649, a valid reorganization measure. There is no vested property right to be re employed in a reorganized office. Not being a member of
the Bar, the minimum requirement to qualify under the reorganization law for permanent appointment as Deputy Register of Deeds II,
she cannot be reinstated to her former position without violating the express mandate of the law.
WHEREFORE, premises considered, We hereby GRANT the petition and SET ASIDE the questioned Resolution of the Civil Service
Commission reinstating private respondent to her former position as Deputy Register of Deeds II or its equivalent in the National Land
Titles and Deeds Registration Administration.
SO ORDERED.