[G.R. No. 106296.  July 5, 1996]

ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.*

D E C I S I O N

MENDOZA, J.:

This is a petition to review the decision of the Court of Appeals dated July 15, 1992, the dispositive portion of which reads:

WHEREFORE, the present petition is partially granted.  The questioned Orders and writs directing (1) “reinstatement” of respondent Isabelo T. Crisostomo to the position of “President of the Polytechnic University of the Philippines,” and (2) payment of “salaries and benefits” which said respondent failed to receive during his suspension insofar as such payment includes those accruing after the abolition of the PCC and its transfer to the PUP, are hereby set aside.  Accordingly, further proceedings consistent with this decision may be taken by the court a quo to determine the correct amounts due and payable to said respondent by the said university.

The background of this case is as follows:

Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), having been appointed to that position by the President of the Philippines on July 17, 1974.

During his incumbency as president of the PCC, two administrative cases were filed against petitioner for illegal use of government vehicles, misappropriation of construction materials belonging to the college, oppression and harassment, grave misconduct, nepotism and dishonesty.  The administrative cases, which were filed with the Office of the President, were subsequently referred to the Office of the Solicitor General for investigation.

Charges of violations of R.A. No. 3019, § 3 (e) and R.A. No. 992, § 20-21 and R.A. No. 733, § 14 were likewise filed against him with the Office of Tanodbayan.

On June 14, 1976, three (3) informations for violation of Sec. 3 (e) of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019, as amended) were filed against him.  The informations alleged that he appropriated for himself a bahay kubo, which was intended for the College, and construction materials worth P250,000.00, more or less.  Petitioner was also accused of using a driver of the College as his personal and family driver.

On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A. No. 3019, § 13, as amended.  In his place Dr. Pablo T. Mateo, Jr. was designated as officer-in-charge on November 10, 1976, and then as Acting President on May 13, 1977.

On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos, CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS.

Mateo continued as the head of the new University.  On April 3, 1979, he was appointed Acting President and on March 28, 1980, as President for a term of six (6) years.

On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting petitioner of the charges against him.  The dispositive portion of the decision reads:

WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo, not guilty of the violations charged in all these three cases and hereby acquits him therefrom, with costs de oficio.  The bail bonds filed by said accused for his provisional liberty are hereby cancelled and released.

Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise known as The Anti-Graft and Corrupt Practices Act, and under which the accused has been suspended by this Court in an Order dated October 22, 1976, said accused is hereby ordered reinstated to the position of President of the Philippine College of Commerce, now known as the Polytechnic University of the Philippines, from which he has been suspended.  By virtue of said reinstatement, he is entitled to receive the salaries and other benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him.

The bail bonds filed by the accused for his provisional liberty in these cases are hereby cancelled and released.

SO ORDERED.

The cases filed before the Tanodbayan (now the Ombudsman) were likewise dismissed on August 8, 1991 on the ground that they had become moot and academic.  On the other hand, the administrative cases were dismissed for failure of the complainants to prosecute them.

On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution of the judgment, particularly the part ordering his reinstatement to the position of president of the PUP and the payment of his salaries and other benefits during the period of suspension.

The motion was granted and a partial writ of execution was issued by the trial court on March 6, 1992.  On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as acting president of the PUP, following the expiration of the term of office of Dr. Nemesio Prudente, who had succeeded Dr. Mateo.  Petitioner was one of the five nominees considered by the President of the Philippines for the position.

On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco Flores, issued another order, reiterating her earlier order for the reinstatement of petitioner to the position of PUP president.  A writ of execution, ordering the sheriff to implement the order of reinstatement, was issued.

In his return dated April 28, 1992, the sheriff stated that he had executed the writ by installing petitioner as President of the PUP, although Dr. Gellor did not vacate the office as he wanted to consult with the President of the Philippines first.  This led to a contempt citation against Dr. Gellor.  A hearing was set on May 7, 1992.  On May 5, 1992, petitioner also moved to cite Department of Education, Culture and Sports Secretary Isidro Cariño in contempt of court.  Petitioner assumed the office of president of the PUP.

On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and prohibition (CA G.R. No. 27931), assailing the two orders and the writs of execution issued by the trial court.  It also asked for a temporary restraining order.

On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining petitioner to cease and desist from acting as president of the PUP pursuant to the reinstatement orders of the trial court, and enjoining further proceedings in Criminal Cases Nos. VI-2329-2331.

On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision, the dispositive portion of which is set forth at the beginning of this opinion.  Said decision set aside the orders and writ of reinstatement issued by the trial court.  The payment of salaries and benefits to petitioner accruing after the conversion of the PCC to the PUP was disallowed.  Recovery of salaries and benefits was limited to those accruing from the time of petitioner’s suspension until the conversion of the PCC to the PUP.  The case was remanded to the trial court for a determination of the amounts due and payable to petitioner.

Hence this petition.  Petitioner argues that P.D. No. 1341, which converted the PCC into the PUP, did not abolish the PCC.  He contends that if the law had intended the PCC to lose its existence, it would have specified that the PCC was being “abolished” rather than “converted” and that if the PUP was intended to be a new institution, the law would have said it was being “created.” Petitioner claims that the PUP is merely a continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as president.

In part the contention is well taken, but, as will presently be explained, reinstatement is no longer possible because of the promulgation of P.D. No. 1437 by the President of the Philippines on June 10, 1978.

P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce into what is now the Polytechnic University of the Philippines, in the same way that earlier in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into the Philippine College of Commerce.  What took place was a

change in academic status of the educational institution, not in its corporate life.  Hence the change in its name, the expansion of its curricular offerings, and the changes in its structure and organization.

As petitioner correctly points out, when the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so.  He cites the following examples:

E.O. No. 709:

§ 1.  There is hereby created a Ministry of Trade and Industry, hereinafter referred to as the Ministry.  The existing Ministry of Trade established pursuant to Presidential Decree No. 721 as amended, and the existing Ministry established pursuant to Presidential Decree No. 488 as amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all other entities under their supervision and control. . . .

E.O. No. 710:

§ 1.  There is hereby created a Ministry of Public Works and Highways, hereinafter referred to as the Ministry.  The existing Ministry of Public Works established pursuant to Executive Order No. 546 as amended, and the existing Ministry of Public Highways established pursuant to Presidential Decree No. 458 as amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all other entities within their supervision and control. . . .

R.A. No. 6975:

§ 13.  Creation and Composition. - A National Police Commission, hereinafter referred to as the Commission, is hereby created for the purpose of effectively discharging the functions prescribed in the Constitution and provided in this Act.  The Commission shall be a collegial body within the Department.  It shall be composed of a Chairman and four (4) regular commissioners, one (1) of whom shall be designated as Vice-Chairman by the President.  The Secretary of the Department shall be the ex-officio Chairman of the Commission, while the Vice-Chairman shall act as the executive officer of the Commission.

xxx  xxx                                        xxx

§ 90.  Status of Present NAPOLCOM, PC-INP. - Upon the effectivity of this Act, the present National Police Commission, and the Philippine Constabulary-Integrated National Police shall cease to exist.  The Philippine Constabulary, which is the nucleus of the integrated Philippine Constabulary-Integrated National Police, shall cease to be a major service of the Armed Forces of the Philippines.  The Integrated National Police, which is the civilian component of the Philippine Constabulary-Integrated National

Police, shall cease to be the national police force and in lieu thereof, a new police force shall be established and constituted pursuant to this Act.

In contrast, P.D. No. 1341, provides:

§ 1.  The present Philippine College of Commerce is hereby converted into a university to be known as the “Polytechnic University of the Philippines,” hereinafter referred to in this Decree as the University.

As already noted, R.A. No. 778 earlier provided:

§ 1.  The present Philippine School of Commerce, located in the City of Manila, Philippines, is hereby granted full college status and converted into the Philippine College of Commerce, which will offer not only its present one-year and two-year vocational commercial curricula, the latter leading to the titles of Associate in Business Education and/or Associate in Commerce, but also four-year courses leading to the degrees of Bachelor of Science in Business in Education and Bachelor of Science in Commerce, and five-year courses leading to the degrees of Master of Arts in Business Education and Master of Arts in Commerce, respectively.

The appellate court ruled, however, that the PUP and the PCC are not “one and the same institution” but “two different entities” and that since petitioner Crisostomo’s term was coterminous with the legal existence of the PCC, petitioner’s term expired upon the abolition of the PCC.  In reaching this conclusion, the Court of Appeals took into account the following:

a) After respondent Crisostomo’s suspension, P.D. No. 1341 (entitled “CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS”) was issued on April 1, 1978.  This decree explicitly provides that PUP’s objectives and purposes cover not only PCC’s offering of programs “in the field of commerce and business administration” but also “programs in other polytechnic areas” and “in other fields such as agriculture, arts and trades and fisheries . . .” (section 2).  Being a university, PUP was conceived as a bigger institution absorbing, merging and integrating the entire PCC and other “national schools” as may be “transferred” to this new state university.

b) The manner of selection and appointment of the university head is substantially different from that provided by the PCC Charter.  The PUP President “shall be appointed by the President of the Philippines upon recommendation of the Secretary of Education and Culture after consultation with the University Board of Regents” (section 4, P.D. 1341).  The President of PCC, on the other hand, was appointed “by the President of the Philippines upon recommendation of the Board of Trustees” (Section 4, R.A. 778).

c) The composition of the new university’s Board of Regents is likewise different from that of the PCC Board of Trustees (which included the chairman of the Senate Committee on Education and the chairman of the House Committee on Education, the President of the PCC Alumni Association as well as the President of the Chamber of Commerce of the Philippines).  Whereas, among others, the NEDA Director-General, the Secretary of Industry and the Secretary of Labor are members of the PUP Board of Regents.  (Section 6, P.D. 1341).

d) The decree moreover transferred to the new university all the properties including “equipment and facilities”:

“. . . owned by the Philippine College of Commerce and such other National Schools as may be integrated . . . including their obligations and appropriations . . .” (Sec. 12; Italics supplied).

But these are hardly indicia of an intent to abolish an existing institution and to create a new one.  New course offerings can be added to the curriculum of a school without affecting its legal existence.  Nor will changes in its existing structure and organization bring about its abolition and the creation of a new one.  Only an express declaration to that effect by the lawmaking authority will.

The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly implying the abolition of the PCC and the creation of a new one — the PUP — in its stead:

§ 12.  All parcels of land, buildings, equipment and facilities owned by the Philippine College of Commerce and such other national schools as may be integrated by virtue of this decree, including their obligations and appropriations thereof, shall stand transferred to the Polytechnic University of the Philippines, provided, however, that said national schools shall continue to receive their corresponding shares from the special education fund of the municipal/provincial/city government concerned as are now enjoyed by them in accordance with existing laws and/or decrees.

The law does not state that the lands, buildings and equipment owned by the PCC were being “transferred” to the PUP but only that they “stand transferred” to it.  “Stand transferred” simply means, for example, that lands transferred to the PCC were to be understood as transferred to the PUP as the new name of the institution.

But the reinstatement of petitioner to the position of president of the PUP could not be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the term of office of presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the President of the Philippines to terminate the terms of incumbents who were not reappointed.  P.D. No. 1437 provides:

§ 6.  The head of the university or college shall be known as the President of the university or college.  He shall be qualified for the position and appointed for a term of

six (6) years by the President of the Philippines upon recommendation of the Secretary of Education and Culture after consulting with the Board which may be renewed for another term upon recommendation of the Secretary of Education and Culture after consulting the Board.  In case of vacancy by reason of death, absence or resignation, the Secretary of Education and Culture shall have the authority to designate an officer in charge of the college or university pending the appointment of the President.

The powers and duties of the President of the university or college, in addition to those specifically provided for in this Decree shall be those usually pertaining to the office of the president of a university or college.

§ 7.  The incumbent president of a chartered state college or university whose term may be terminated according to this Decree, shall be entitled to full retirement benefits:  provided that he has served the government for at least twenty (20) years; and provided, further that in case the number of years served is less than 20 years, he shall be entitled to one month pay for every year of service.

In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that petitioner’s term was cut short.  In accordance with § 7 of the law, therefore, petitioner became entitled only to retirement benefits or the payment of separation pay.  Petitioner must have recognized this fact, that is why in 1992 he asked then President Aquino to consider him for appointment to the same position after it had become vacant in consequence of the retirement of Dr. Prudente.

WHEREFORE, the decision of the Court of Appeals is MODIFIED by SETTING ASIDE the questioned orders of the Regional Trial Court directing the reinstatement of the petitioner Isabelo T. Crisostomo to the position of president of the Polytechnic University of the Philippines and the payment to him of salaries and benefits which he failed to receive during his suspension in so far as such payment would include salaries accruing after March 28, 1980 when petitioner Crisostomo’s term was terminated.  Further proceedings in accordance with this decision may be taken by the trial court to determine the amount due and payable to petitioner by the university up to March 28, 1980.

SO ORDERED.

Regalado, (Chairman), Romero, and Torres, Jr., JJ., concur.

Puno, J., took no part.  Counsel for petitioner is his brother.

* The original title of this case, “Hon. Teresita Dy-Liaco Flores, as Presiding Judge, RTC, Branch 46, Manila, Elmer R. Melgas, as Sheriff IV of Manila and Isabelo T. Crisostomo, petitioners, v. The Court of Appeals and the People of the Philippines, respondents,” has been changed by omitting the names of the two petitioners who were merely nominal parties in the Court of Appeals.

Judgment in CCC-VI-2329-2331, pp. 2-3.

Per Justice Lorna Lombos-De la Fuente, chairman, and concurred in by Justices Cesar D. Francisco and Cancio C. Garcia, members.

Rollo, p. 148, Decision, p. 4.

[G.R. No. 142801-802.  July 10, 2001]

BUKLOD NG KAWANING EIIB, CESAR POSADA, REMEDIOS G. PRINCESA, BENJAMIN KHO, BENIGNO MANGA, LULU MENDOZA, petitioners, vs. HON. EXECUTIVE SECRETARY RONALDO B. ZAMORA, HON. SECRETARY JOSE PARDO, DEPARTMENT OF FINANCE, HON. SECRETARY BENJAMIN DIOKNO, DEPARTMENT OF BUDGET AND MANAGEMENT, HON. SECRETARY ARTEMIO TUQUERO, DEPARTMENT OF JUSTICE, respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

In this petition for certiorari, prohibition and mandamus, petitioners Buklod Ng Kawaning EIIB, Cesar Posada, Remedios Princesa, Benjamin Kho, Benigno Manga and Lulu Mendoza, for themselves and in behalf of others with whom they share a common or general interest, seek the nullification of Executive Order No. 191 and Executive Order No. 223 on the ground that they were issued by the Office of the President with grave abuse of discretion and in violation of their constitutional right to security of tenure.

The facts are undisputed:

On June 30, 1987, former President Corazon C. Aquino, issued Executive Order No. 127 establishing the Economic Intelligence and Investigation Bureau (EIIB) as part of the structural organization of the Ministry of Finance. The EIIB was designated to perform the following functions:

“(a) Receive, gather and evaluate intelligence reports and information and evidence on the nature, modes and extent of illegal activities affecting the national economy, such as, but not limited to, economic sabotage, smuggling, tax evasion, and dollar-salting, investigate the same and aid in the prosecution of cases;

(b) Coordinate with external agencies in monitoring the financial and economic activities of persons or entities, whether domestic or foreign, which may adversely affect national financial interest with the goal of regulating, controlling or preventing said activities;

(c) Provide all intelligence units of operating Bureaus or Offices under the Ministry with the general framework and guidelines in the conduct of intelligence and investigating works;

(d) Supervise, monitor and coordinate all the intelligence and investigation operations of the operating Bureaus and Offices under the Ministry;

(e) Investigate, hear and file, upon clearance by the Minister, anti-graft and corruption cases against personnel of the Ministry and its constituents units;

(f) Perform such other appropriate functions as may be assigned by the Minister or his deputies.”

In a desire to achieve harmony of efforts and to prevent possible conflicts among agencies in the course of their anti-smuggling operations, President Aquino issued Memorandum Order No. 225 on March 17, 1989, providing, among others, that the EIIB “shall be the agency of primary responsibility for anti-smuggling operations in all land areas and inland waters and waterways outside the areas of sole jurisdiction of the Bureau of Customs.”

Eleven years after, or on January 7, 2000, President Joseph Estrada issued Executive Order No. 191 entitled  “Deactivation of the Economic Intelligence and Investigation Bureau.” Motivated by the fact that “the designated functions of the EIIB are also being performed by the other existing agencies of the government” and that “there is a need to constantly monitor the overlapping of functions” among these agencies, former President Estrada ordered the deactivation of EIIB and the transfer of its functions to the Bureau of Customs and the National Bureau of Investigation.

Meanwhile, President Estrada issued Executive Order No. 196 creating the Presidential Anti-Smuggling Task Force “Aduana.”

Then the day feared by the EIIB employees came.  On March 29, 2000, President Estrada issued Executive Order No. 223 providing that all EIIB personnel occupying positions specified therein shall be deemed separated from the service effective April 30, 2000, pursuant to a bona fide reorganization resulting to abolition, redundancy, merger, division, or consolidation of positions.

Agonizing over the loss of their employment, petitioners now come before this Court invoking our power of judicial review of Executive Order Nos. 191 and 223. They anchor their petition on the following arguments:

“A

Executive Order Nos. 191 and 223 should be annulled as they are unconstitutional for being violative of Section 2(3), Article IX-B of the Philippine Constitution and/or for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.

B.

The abolition of the EIIB is a hoax.  Similarly, if Executive Order Nos. 191 and 223 are considered to effect a reorganization of the EIIB, such reorganization was made in bad faith.

C.

The President has no authority to abolish the EIIB.”

Petitioners contend that the issuance of the afore-mentioned executive orders is: (a) a violation of their right to security of tenure; (b) tainted with bad faith as they were not actually intended to make the bureaucracy more efficient but to give way to Task Force “Aduana,” the functions of which are essentially and substantially the same as that of EIIB; and (c) a usurpation of the power of Congress to decide whether or not to abolish the EIIB.

Arguing in behalf of respondents, the Solicitor General maintains that: (a) the President enjoys the totality of the executive power provided under Sections 1 and 7, Article VII of the Constitution, thus, he has the authority to issue Executive Order Nos. 191 and 223; (b) the said executive orders were issued in the interest of national economy, to avoid duplicity of work and to streamline the functions of the bureaucracy; and (c) the EIIB was not “abolished,” it was only “deactivated.”

The petition is bereft of merit.

Despite the presence of some procedural flaws in the instant petition, such as, petitioners’ disregard of the hierarchy of courts and the non-exhaustion of administrative remedies, we deem it necessary to address the issues.  It is in the interest of the State that questions relating to the status and existence of a public office be settled without delay.  We are not without precedent.  In Dario v. Mison, we liberally decreed:

“The Court disregards the questions raised as to procedure, failure to exhaust administrative remedies, the standing of certain parties to sue, for two reasons, `[b]ecause of the demands of public interest, including the need for stability in the public service,' and because of the serious implications of these cases on the administration of the Philippine civil service and the rights of public servants.”

At first glance, it seems that the resolution of this case hinges on the question - Does the “deactivation” of EIIB constitute “abolition” of an office?  However, after coming to terms with the prevailing law and jurisprudence, we are certain that the ultimate queries should be – a) Does the President have the authority to reorganize the executive department? and, b) How should the reorganization be carried out?

Surely, there exists a distinction between the words “deactivate” and “abolish.” To “deactivate” means to render inactive or ineffective or to break up by discharging or reassigning personnel, while to “abolish” means to do away with, to annul, abrogate or destroy completely. In essence, abolition denotes an intention to do away with the office wholly and permanently. Thus, while in abolition, the office ceases to exist, the same is not true in deactivation where the office continues to exist, albeit remaining dormant or inoperative.  Be that as it may, deactivation and abolition are both reorganization measures.

The Solicitor General only invokes the above distinctions on the mistaken assumption that the President has no power to abolish an office.

The general rule has always been that the power to abolish a public office is lodged with the legislature. This proceeds from the legal precept that the power to create includes the power to destroy.  A public office is either created by the Constitution, by statute, or by authority of law. Thus, except where the office was created by the Constitution itself, it may be abolished by the same legislature that brought it into existence.

The exception, however, is that as far as bureaus, agencies or offices in the executive department are concerned, the President’s power of control may justify him to inactivate the functions of a particular office, or certain laws may grant him the broad authority to carry out reorganization measures. The case in point is Larin v. Executive Secretary. In this case, it was argued that there is no law which empowers the President to reorganize the BIR.  In decreeing otherwise, this Court sustained the following legal basis, thus:

“Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR.

We do not agree.

x     x     x           x     x   x

Section 48 of R.A. 7645 provides that:

‘Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. – The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished, subject to civil service rules and regulations. X  x  x.  Actual scaling down, phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.’

Said provision clearly mentions the acts of “scaling down, phasing out and abolition” of offices only and does not cover the creation of offices or transfer of functions.  Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that:

‘Sec. 62. Unauthorized organizational charges.- Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act.’ (italics ours)

The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned.

x    x    x            x    x    x

Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:

‘Sec. 20. Residual Powers. – Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law.’ (italic ours)

This provision speaks of such other powers vested in the President under the law.  What law then gives him the power to reorganize?  It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416.  These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials.  The validity of these two decrees are unquestionable.  The 1987 Constitution clearly provides that “all laws, decrees, executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked.  So far, there is yet no law amending or repealing said decrees.”  (Emphasis supplied)

Now, let us take a look at the assailed executive order.

In the whereas clause of E.O. No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin, thus;

“Sec. 77. Organized Changes.  Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act.”

We adhere to the precedent or ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure.  Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of their respective mandates, missions, objectives, functions, programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for

the purpose by the Office of the President. The law has spoken clearly.  We are left only with the duty to sustain.

But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here.  We must not lose sight of the very source of the power – that which constitutes an express grant of power.  Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), “the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President.”  For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President.  In Canonizado v. Aguirre, we ruled that reorganization “involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.”  It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them.  The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President.  Hence, it is subject to the President’s continuing authority to reorganize.

It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department, what is then left for us to resolve is whether or not the reorganization is valid. In this jurisdiction, reorganizations have been regarded as valid provided they are pursued in good faith.  Reorganization is carried out in ‘good faith’ if it is for the purpose of economy or to make bureaucracy more efficient. Pertinently, Republic Act No. 6656 provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization, to wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) where an office is abolished and another performing substantially the same functions is created; (c) where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices, and (e) where the removal violates the order of separation.

Petitioners claim that the deactivation of EIIB was done in bad faith because four days after its deactivation, President Estrada created the Task Force Aduana.

We are not convinced.

An examination of the pertinent Executive Orders shows that the deactivation of EIIB and the creation of Task Force Aduana were done in good faith.  It was not for the purpose of removing the EIIB employees, but to achieve the ultimate purpose of E.O. No. 191, which is economy.  While Task Force Aduana was created to take the place of EIIB, its creation does not entail expense to the government.

Firstly, there is no employment of new personnel to man the Task Force. E.O. No. 196 provides that the technical, administrative and special staffs of EIIB are to be composed of people who are already in the public service, they being employees of other existing agencies.  Their tenure with the Task Force would only be temporary, i.e., only when the agency where they belong is called upon to assist the Task Force.  Since their employment with the Task force is only by way of detail or assignment, they retain their employment with the existing agencies.  And should the need for them cease, they would be sent back to the agency concerned.

Secondly, the thrust of E.O. No. 196 is to have a small group of military men under the direct control and supervision of the President as base of the government’s anti-smuggling campaign.  Such a smaller base has the necessary powers 1) to enlist the assistance of any department, bureau, or office and to use their respective personnel, facilities and resources; and 2) “to select and recruit personnel from within the PSG and ISAFP for assignment to the Task Force.”  Obviously, the idea is to encourage the utilization of personnel, facilities and resources of the already existing departments, agencies, bureaus, etc., instead of maintaining an independent office with a whole set of personnel and facilities.  The EIIB had proven itself burdensome for the government because it maintained separate offices in every region in the Philippines.

And thirdly, it is evident from the yearly budget appropriation of the government that the creation of the Task Force Aduana was especially intended to lessen EIIB’s expenses.  Tracing from the yearly General Appropriations Act, it appears that the allotted amount for the EIIB’s general administration, support, and operations for the year 1995, was P128,031,000; for 1996, P182,156,000; for 1998, P219,889,000; and, for 1999, P238,743,000. These amounts were far above the P50,000,000 allocation to the Task Force Aduana for the year 2000.

While basically, the functions of the EIIB have devolved upon the Task Force Aduana, we find the latter to have additional new powers.  The Task Force Aduana, being composed of elements from the Presidential Security Group (PSG) and Intelligence Service Armed Forces of the Philippines (ISAFP), has the essential power to effect searches, seizures and arrests.  The EIIB did not have this power.  The Task Force Aduana has the power to enlist the assistance of any department, bureau, office, or instrumentality of the government, including government-owned or controlled corporations; and to use their personnel, facilities and resources.  Again, the EIIB did not have this power.  And, the Task Force Aduana has the additional authority to conduct investigation of cases involving ill-gotten wealth.  This was not expressly granted to the EIIB.

Consequently, it cannot be said that there is a feigned reorganization.  In Blaquera v. Civil Sevice Commission, we ruled that a reorganization in good faith is one designed to trim the fat off the bureaucracy and institute economy and greater efficiency in its operation.

Lastly, we hold that petitioners’ right to security of tenure is not violated.  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.  Valid abolition of offices is neither removal nor separation of the incumbents. In the instructive words laid down by this Court in Dario v. Mison, through Justice Abraham F. Sarmiento:

Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith.  As a general rule, a reorganization is carried out in “good faith” if it is for the purpose of economy or to make bureaucracy more efficient.  In that event, no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist.  And in that case, security of tenure would not be a Chinese wall.  Be that as it may, if the ‘abolition,’ which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, otherwise not in good faith, no valid ‘abolition’ takes and whatever ‘abolition’ is done, is void ab initio.  There is an invalid ‘abolition’ as where there is merely a change of nomenclature of positions, or where claims of economy are belied by the existence of ample funds.

Indeed, there is no such thing as an absolute right to hold office.  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.

While we cast a commiserating look upon the plight of all the EIIB employees whose lives perhaps are now torn with uncertainties, we cannot ignore the unfortunate reality that our government is also battling the impact of a plummeting economy.  Unless the government is given the chance to recuperate by instituting economy and efficiency in its system, the EIIB will not be the last agency to suffer the impact.  We cannot frustrate valid measures which are designed to rebuild the executive department.

WHEREFORE, the petition is hereby DENIED.  No costs.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Pardo, Buena,Ynares-Santiago, and De Leon, Jr., JJ., concur.

Panganiban and Quisumbing, JJ., in the result.

Gonzaga-Reyes, J., on leave.

“Deactivation of the Economic Intelligence and Investigation Bureau”

“Supplementing Executive Order No. 191 on the Deactivation of the Economic Intelligence and Investigation Bureau and for Other Matters”

“Reorganizing the Ministry of Finance” Approved on January 30, 1987.

“SEC. 7. Structural Organization. The Ministry, aside from the Ministry Proper comprising the Office of the Minister, the Offices of the Deputy and Assistant Ministers, the Economic Intelligence and Investigation Bureau and the Services, shall consist of the Operation Groups and their constituent units, and Regional Office.”

NOTE: The precursor of EIIB was the Anti-Smuggling Action Center (ASAC) created by former President Marcos on February 24, 1966 through E.O. No. 11.  By virtue of E.O. No. 220 (March 1, 1970), the ASAC was transferred from the Office of the President to the Department of National Defense.  On March 16, 1971, ASAC was placed under the direct control and supervision of the Secretary of Finance by E.O. No. 303.  On June 11, 1978, President Marcos issued Presidential Decree No. 1458 creating the Finance Department Intelligence and Investigation Bureau.

Section 26 of E.O. No. 127.

Section 2 of Memorandum No. 225.

Done on January 7, 2000;

“Section 1. Deactivation of the Economic Intelligence and Investigation Bureau. The Economic Intelligence and Investigation Bureau (EIIIB) under the Department of Finance is hereby deactivated.”

Done on January 12, 2000.  “Creating the Presidential Anti-Smuggling Task Force “Aduana” to Investigate and Prosecute Crimes Involving Large-Scale Smuggling and Other Frauds Upon Customs, Other Economic Crimes and Providing Measures to Expedite Seizure Proceedings.”

“SECTION 1. Creation of Task Force.- There is hereby created a Presidential Anti-Smuggling Task Force hereinafter called “Task Force Aduana,” under the control and supervision of the Office of the President principally to combat smuggling, unlawful importations and other frauds upon customs committed in large scale or by organized and syndicated groups.”

                X      x      x                           x       x       x

“SEC. 3. Powers and Functions. – The Task force shall have the following powers and functions:

1. To prepare and implement appropriate and effective measures to prevent and suppress large-scale smuggling and other prohibited and unlawful importations;

2. To effect searches, seizures and arrests, and for the Task Force Commander to file administrative and criminal cases conformably with the provisions of the Tariff and Customs Code of the Philippines, as amended, pertinent provisions of the Revised Penal Code, as amended and the Rules of Criminal Procedure;

3. To conduct intelligence and counter-intelligence on smuggling and other unlawful importations, including the monitoring of situations, circumstances, activities of individual, groups and entities who are involved in smuggling activities;

4. To select and recruit personnel from within the PSG and ISAFP for assignment to the Task Force with the conformity of the office or agency concerned;

5. To enlist the assistance of any department, bureau, office or agency or instrumentality of the government, including government-owned or controlled corporations to carry out its functions, including the use of their respective personnel, facilities and resources;

6. To conduct investigation of ill-gotten wealth of all persons including government officials involved in smuggling activities, in coordination with other government agencies.

7. To conduct verification with the Bureau of Customs of all documents pertaining to payment of duties and taxes of all imported articles.

8. To suppress and prevent all other economic frauds as may be directed by the President.

9. To perform such functions and carry out such activities as may be directed by the President.”

“Supplementing Executive Order No. 191 on the Deactivation of the Economic Intelligence and Investigation Bureau and for Other Matters.”

Section 3 of E.O. No. 223.

176 SCRA 84 (1989)

Webster’s Third New International Dictionary, 1986 ed. p. 579.

Moreno, Philippine Law Dictionary, 3rd ed., p. 5

Rivera, Law of Public Administration, First Edition, p. 634; Guerrero v. Arizabal, 186 SCRA 108 (1990)

In Eugenio v. Civil Service Commission, 243 SCRA 196 (1995), the Court ruled:

“Except for such offices as are created by the Constitution, the creation of a public offices is primarily a legislative function.  In so far as the legislative power in this respect is not restricted by constitutional provisions, it is 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."

Mendoza v. Quisumbing 186 SCRA 108 (1990); Cruz v. Primicias, 23 SCRA 998 (1968) De Leon, Administrative Law: Text and Cases, 1998 Ed., p. 24

Cruz, The Law of Public Officers, 1999 Ed., p. 4.

Ibid., p. 199

Martin, Philippine Political Law, p. 276

Larin v. Executive Secretary, 280 SCRA 713 (1997)

ibid.

General Appropriation Act FY 2000, signed into law on February 16, 2000.

Section 78 of Republic Act No. 8760.

Section 16, Article XVIII, 1987 Constitution provides:

“Sec. 16. Career civil service employees from the separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation.  In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivision, instrumentalities, or agencies, including government owned or controlled corporations and their subsidiaries.  This provision also applies to career officers whose resignation, tendered in line with the existing policy, had been accepted.”

Ibid.

323 SCRA 312 (2000).

Section 17, Title II, Book IV, E.O. No. 292.

Department of Trade and Industry v. Chairman and Commissioners of the Civil Service Commission 227 SCRA 198 (1993); Dario v. Mison, supra.; Mendoza v. Quisumbing, supra.

“An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization”-Approved on June 10, 1988” (84 Official Gazette No. 24, p. S-1)

Section 2 of Republic Act No. 6656.

E.O. No. 196; Section 17, Chapter 4, Title II, Book IV, E.O. No. 292, and Section 7 and Section 26, E.O. No. 127.

R.A. No. 7845, 1995 General Appropriation Act

R.A. No. 8174, 1996 General Appropriation Act

R.A. No. 8522,1998 General Appropriation Act

R.A. No. 8745, 1999 General Appropriation Act

Section 10, E.O. No. 196.

Section 2 of E.O. No. 196.

226 SCRA 278 (1993).

Mendoza v. Quisumbing, supra.  De la Llana v. Alba, supra.

supra.

National Land Titles and Deeds Registration Administration v. Civil Service Commission, supra.

[G.R. No. 152845.  August 5, 2003]

DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN, RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM, RODOLFO DAGA, EDGARDO BACLIG, GREGORIO LABAYAN, HILARIO JEREZ, and MARIA CORAZON CUANANG, petitioners, vs. NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA, respondents.

D E C I S I O N

VITUG, J.:

President Joseph Estrada issued on 30 September 1998 Executive Order No. 29, entitled “Mandating the Streamlining of the National Tobacco Administration (NTA),” a government agency under the Department of Agriculture.  The order was followed by another issuance, on 27 October 1998, by President Estrada of Executive Order No. 36, amending Executive Order No. 29, insofar as the new staffing pattern was concerned, by increasing from four hundred (400) to not exceeding seven hundred fifty (750) the positions affected thereby.  In compliance therewith, the NTA prepared and adopted a new Organization Structure and Staffing Pattern (OSSP) which, on 29 October 1998, was submitted to the Office of the President.

On 11 November 1998, the rank and file employees of NTA Batac, among whom included herein petitioners, filed a letter-appeal with the Civil Service Commission and sought its assistance in recalling the OSSP.  On 04 December 1998, the OSSP was approved by the Department of Budget and Management (DBM) subject to certain revisions.  On even date, the NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the revised OSSP.  The results of the evaluation by the committee on the individual qualifications of applicants to the positions in the new OSSP were then disseminated and posted at the central and provincial offices of the NTA.

On 10 June 1996, petitioners, all occupying different positions at the NTA office in Batac, Ilocos Norte, received individual notices of termination of their employment with the NTA effective thirty (30) days from receipt thereof.  Finding themselves without any immediate relief from their dismissal from the service, petitioners filed a petition for certiorari, prohibition and mandamus, with prayer for preliminary mandatory injunction and/or temporary restraining order, with the Regional Trial Court (RTC) of Batac, Ilocos Norte, and prayed -

“1)     that a restraining order be immediately issued enjoining the respondents from enforcing the notice of termination addressed individually to the petitioners and/or from committing further acts of dispossession and/or ousting the petitioners from their respective offices;

“2)     that a writ of preliminary injunction be issued against the respondents, commanding them to maintain the status quo to protect the rights of the petitioners pending the determination of the validity of the implementation of their dismissal from the service; and

“3)     that, after trial on the merits, judgment be rendered declaring the notice of termination of the petitioners illegal and the reorganization null and void and ordering their reinstatement with backwages, if applicable, commanding the respondents to desist from further terminating their services, and making the injunction permanent.”

The RTC, on 09 September 2000, ordered the NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments.  A motion for reconsideration filed by the NTA was denied by the trial court in its order of 28 February 2001.  Thereupon, the NTA filed an appeal with the Court of Appeals, raising the following issues:

“I.       Whether or not respondents submitted evidence as proof that petitioners, individually, were not the ‘best qualified and most deserving’ among the incumbent applicant-employees.

“II.      Whether or not incumbent permanent employees, including herein petitioners, automatically enjoy a preferential right and the right of first refusal to appointments/reappointments in the new Organization Structure And Staffing Pattern (OSSP) of respondent NTA.

“III.     Whether or not respondent NTA in implementing the mandated reorganization pursuant to E.O. No. 29, as amended by E.O. No. 36, strictly adhere to the implementing rules on reorganization, particularly RA 6656 and of the Civil Service Commission – Rules on Government Reorganization.

“IV.    Whether or not the validity of E.O. Nos. 29 and 36 can be put in issue in the instant case/appeal.”

On 20 February 2002, the appellate court rendered a decision reversing and setting aside the assailed orders of the trial court.

Petitioners went to this Court to assail the decision of the Court of Appeals, contending that -

“I.       The Court of Appeals erred in making a finding that went beyond the issues of the case and which are contrary to those of the trial court and that it overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion;

“II.      The Court of Appeals erred in upholding Executive Order Nos. 29 and 36 of the Office of the President which are mere administrative issuances which do not have the force and effect of a law to warrant abolition of positions and/or effecting total reorganization;

“III.     The Court of Appeals erred in holding that petitioners’ removal from the service is in accordance with law;

“IV.    The Court of Appeals erred in holding that respondent NTA was not guilty of bad faith in the termination of the services of petitioners; (and)

“V.     The Court of Appeals erred in ignoring case law/jurisprudence in the abolition of an office.”

In its resolution of 10 July 2002, the Court required the NTA to file its comment on the petition.  On 18 November 2002, after the NTA had filed its comment of 23 September 2002, the Court issued its resolution denying the petition for failure of petitioners to sufficiently show any reversible error on the part of the appellate court in its challenged decision so as to warrant the exercise by this Court of its discretionary appellate jurisdiction.  A motion for reconsideration filed by petitioners was denied in the Court’s resolution of 20 January 2002.

On 21 February 2003, petitioners submitted a “Motion to Admit Petition For En Banc Resolution” of the case allegedly to address a basic question, i.e., “the legal and constitutional issue on whether the NTA may be reorganized by an executive fiat, not by legislative action.” In their “Petition for an En Banc Resolution” petitioners would have it that -

“1.     The Court of Appeals’ decision upholding the reorganization of the National Tobacco Administration sets a dangerous precedent in that:

“’a)         A mere Executive Order issued by the Office of the President and procured by a government functionary would have the effect of a blanket authority to reorganize a bureau, office or agency attached to the various executive departments;

‘b)           The President of the Philippines would have the plenary power to reorganize the entire government Bureaucracy through the issuance of an Executive Order, an administrative issuance without the benefit of due deliberation, debate and discussion of members of both chambers of the Congress of the Philippines;

‘c)           The right to security of tenure to a career position created by law or statute would be defeated by the mere adoption of an Organizational Structure and Staffing Pattern issued pursuant to an Executive Order which is not a law and could thus not abolish an office created by law;

“2.     The case law on abolition of an office would be disregarded, ignored and abandoned if the Court of Appeals decision subject matter of this Petition would remain undisturbed and untouched.  In other words, previous doctrines and precedents of this Highest Court would in effect be reversed and/or modified with the Court of Appeals judgment, should it remain unchallenged.

“3.     Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex ‘D,’ Petition), issued by the Revolutionary government of former President Corazon Aquino, and the law creating NTA, which provides that the governing body of NTA is the Board of Directors, would be rendered meaningless, ineffective and a dead letter law because the challenged NTA reorganization which was erroneously upheld by the Court of Appeals was adopted and implemented by then NTA Administrator Antonio de Guzman without the corresponding authority from the Board of Directors as mandated therein.  In brief, the reorganization is an ultra vires act of the NTA Administrator.

“4.     The challenged Executive Order No. 29 issued by former President Joseph Estrada but unsigned by then Executive Secretary Ronaldo Zamora would in effect be erroneously upheld and given legal effect as to supersede, amend and/or modify Executive Order No. 245, a law issued during the Freedom Constitution of President Corazon Aquino.  In brief, a mere executive order would amend, supersede and/or render ineffective a law or statute.”

In order to allow the parties a full opportunity to ventilate their views on the matter, the Court ultimately resolved to hear the parties in oral argument.  Essentially, the core question raised by them is whether or not the President, through the issuance of an executive order, can validly carry out the reorganization of the NTA.

Notwithstanding the apparent procedural lapse on the part of petitioner to implead the Office of the President as party respondent pursuant to Section 7, Rule 3, of the 1997 Revised Rules of Civil Procedure, this Court resolved to rule on the merits of the petition.

Buklod ng Kawaning EIIB vs. Zamora ruled that the President, based on existing laws, had the authority to carry out a reorganization in any branch or agency of the executive department.  In said case, Buklod ng Kawaning EIIB challenged the issuance, and sought the nullification, of Executive Order No. 191 (Deactivation of the Economic Intelligence and Investigation Bureau) and Executive Order No. 223 (Supplementary Executive Order No. 191 on the Deactivation of the Economic Intelligence and Investigation Bureau and for Other Matters) on the ground that they were issued by the President with grave abuse of discretion and in violation of their constitutional right to security of tenure.  The Court explained:

“The general rule has always been that the power to abolish a public office is lodged with the legislature.  This proceeds from the legal precept that the power to create includes the power to destroy.  A public office is either created by the Constitution, by statute, or by authority of law.  Thus, except where the office was created by the Constitution itself, it may be abolished by the same legislature that brought it into existence.

“The exception, however, is that as far as bureaus, agencies or offices in the executive department are concerned, the President’s power of control may justify him to inactivate the functions of a particular office, or certain laws may grant him the broad authority to carry out reorganization measures.  The case in point is Larin v. Executive Secretary [280 SCRA 713].  In this case, it was argued that there is no law which empowers the President to reorganize the BIR.  In decreeing otherwise, this Court sustained the following legal basis, thus:

“`Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR.

`We do not agree.

`x x x                                                                       x x x

`Section 48 of R.A. 7645 provides that:

``Sec. 48.  Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch.  – The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished, subject to civil service rules and regulations.  x x x.  Actual scaling down, phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.’

`Said provision clearly mentions the acts of `scaling down, phasing out and abolition’ of offices only and does not cover the creation of offices or transfer of functions.  Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that:

``Sec. 62.  Unauthorized organizational changes.  – Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act.’

`The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned.

`x x x                                                                       x x x

`Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:

``Sec. 20.  Residual Powers.  – Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for

under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law.’

`This provision speaks of such other powers vested in the President under the law.  What law then gives him the power to reorganize?  It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416.  These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials.  The validity of these two decrees are unquestionable.  The 1987 Constitution clearly provides that `all laws, decrees, executive orders, proclamations, letter of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked.  So far, there is yet no law amending or repealing said decrees.’

“Now, let us take a look at the assailed executive order.

“In the whereas clause of E.O. No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin, thus:

“`Sec. 77.  Organized Changes.  – Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act.’

“We adhere to the x x x ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure.  Such a ruling further finds support in Section 78 of Republic Act No. 8760.  Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of this respective mandates, missions, objectives, functions, programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies.  Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.  The law has spoken clearly.  We are left only with the duty to sustain.

“But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here.  We must not lose sight of the very source of the power – that which constitutes an express grant of power.  Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), ‘the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the

continuing authority to reorganize the administrative structure of the Office of the President.’  For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President.  In Canonizado vs. Aguirre [323 SCRA 312], we ruled that reorganization ‘involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.’  It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them.  The EIIB is a bureau attached to the Department of Finance.  It falls under the Office of the President.  Hence, it is subject to the President’s continuing authority to reorganize.

“It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department, what is then left for us to resolve is whether or not the reorganization is valid.  In this jurisdiction, reorganizations have been regarded as valid provided they are pursued in good faith.  Reorganization is carried out in `good faith’ if it is for the purpose of economy or to make bureaucracy more efficient.  Pertinently, Republic Act No. 6656 provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization, to wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) where an office is abolished and another performing substantially the same functions is created; (c) where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices, and (e) where the removal violates the order of separation.”

The Court of Appeals, in its now assailed decision, has found no evidence of bad faith on the part of the NTA; thus -

“In the case at bar, we find no evidence that the respondents committed bad faith in issuing the notices of non-appointment to the petitioners.

“Firstly, the number of positions in the new staffing pattern did not increase.  Rather, it decreased from 1,125 positions to 750.  It is thus natural that one’s position may be lost through the removal or abolition of an office.

“Secondly, the petitioners failed to specifically show which offices were abolished and the new ones that were created performing substantially the same functions.

“Thirdly, the petitioners likewise failed to prove that less qualified employees were appointed to the positions to which they applied.

“x x x                                                                       x x x                                                                 x x x.

“Fourthly, the preference stated in Section 4 of R.A. 6656, only means that old employees should be considered first, but it does not necessarily follow that they should then automatically be appointed.  This is because the law does not preclude the infusion of new blood, younger dynamism, or necessary talents into the government service, provided that the acts of the appointing power are bonafide for the best interest of the public service and the person chosen has the needed qualifications.”

These findings of the appellate court are basically factual which this Court must respect and be held bound.

It is important to emphasize that the questioned Executive Orders No. 29 and No. 36 have not abolished the National Tobacco Administration but merely mandated its reorganization through the streamlining or reduction of its personnel.  Article VII, Section 17, of the Constitution, expressly grants the President control of all executive departments, bureaus, agencies and offices which may justify an executive action to inactivate the functions of a particular office or to carry out reorganization measures under a broad authority of law. Section 78 of the General Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998) has decreed that the President may direct changes in the organization and key positions in any department, bureau or agency pursuant to Article VI, Section 25, of the Constitution, which grants to the Executive Department the authority to recommend the budget necessary for its operation.  Evidently, this grant of power includes the authority to evaluate each and every government agency, including the determination of the most economical and efficient staffing pattern, under the Executive Department.

In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D. Zamora, in his capacity as the Executive Secretary, et al., this Court has had occasion to also delve on the President’s power to reorganize the Office of the President under Section 31(2) and (3) of Executive Order No. 292 and the power to reorganize the Office of the President Proper.  The Court has there observed:

“x x x.  Under Section 31(1) of EO 292, the President can reorganize the Office of the President Proper by abolishing, consolidating or merging units, or by transferring functions from one unit to another.  In contrast, under Section 31(2) and (3) of EO 292, the President’s power to reorganize offices outside the Office of the President Proper but still within the Office of the President is limited to merely transferring functions or agencies from the Office of the President to Departments or Agencies, and vice versa.”

The provisions of Section 31, Book III, Chapter 10, of Executive Order No. 292 (Administrative Code of 1987), above-referred to, reads thusly:

“SEC. 31.  Continuing Authority of the President to Reorganize his Office. – The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President.  For this purpose, he may take any of the following actions:

“(1)    Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Staff Support System, by abolishing, consolidating or merging units thereof or transferring functions from one unit to another;

“(2)    Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President from other Departments and Agencies; and

“(3)    Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other departments and agencies.”

The first sentence of the law is an express grant to the President of a continuing authority to reorganize the administrative structure of the Office of the President.  The succeeding numbered paragraphs are not in the nature of provisos that unduly limit the aim and scope of the grant to the President of the power to reorganize but are to be viewed in consonance therewith.  Section 31(1) of Executive Order No. 292 specifically refers to the President’s power to restructure the internal organization of the Office of the President Proper, by abolishing, consolidating or merging units hereof or transferring functions from one unit to another, while Section 31(2) and (3) concern executive offices outside the Office of the President Proper allowing the President to transfer any function under the Office of the President to any other Department or Agency and vice-versa, and the transfer of any agency under the Office of the President to any other department or agency and vice-versa.

In the present instance, involving neither an abolition nor transfer of offices, the assailed action is a mere reorganization under the general provisions of the law consisting mainly of streamlining the NTA in the interest of simplicity, economy and efficiency.  It is an act well within the authority of President motivated and carried out, according to the findings of the appellate court, in good faith, a factual assessment that this Court could only but accept.

In passing, relative to petitioners’ “Motion for an En Banc Resolution of the Case,” it may be well to remind counsel, that the Court En Banc is not an appellate tribunal to which appeals from a Division of the Court may be taken.  A Division of the Court is the Supreme Court as fully and veritably as the Court En Banc itself and a decision of its Division is as authoritative and final as a decision of the Court En Banc.  Referrals of cases from a Division to the Court En Banc do not take place as just a matter of routine but only on such specified grounds as the Court in its discretion may allow.

WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit.  Let entry of judgment be made in due course.  No costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

Rollo, pp. 49-50.

Rollo, pp. 50-51.

Rollo, p. 14.

Rollo, pp. 50-51.

Rollo, pp. 140-141.

Section 7, Rule 3, 1997 Revised Rules of Civil Procedure provides:

“Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.”

G.R. No. 142801-802, 10 July 2001, 360 SCRA 718.

At pp. 726-730.

Rollo, pp. 55-57.

SEC. 17.  The President shall have control of all the executive departments, bureaus, and offices.  He shall ensure that the laws be faithfully executed.

Buklod ng Kawaning EIIB vs. Zamora, Ibid.

Sec. 25.  (1) The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget.  The form, content, and manner of preparation of the budget shall be prescribed by law.

(2) No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein.  Any such provision or enactment shall be limited in its operation to the appropriation to which it relates.

(3) The procedure in approving appropriations for the Congress shall strictly follow the procedure for approving appropriations for other departments and agencies.

(4) A special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the National Treasurer, or to be raised by a corresponding revenue proposal therein.

(5) No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may,

by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.

(6) Discretionary funds appropriated for particular officials shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law.

(7) If, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed reenacted and shall remain in force and effect until the general appropriations bill is passed by the Congress.

G.R. No. 142283, 06 February 2003.

Canonizado vs. Aguirre, G. R. No. 133132 , 25 January 2000, 323 SCRA 312.

Dario vs. Mison, G. R. Nos. 81954, 81967, 82023, 83737,  85310, 85335 & 86241, 08 August 1989, 176 SCRA 84.

Ortigas and Company Limited Partnership vs. Velasco, G. R. Nos. 109645 & 112564, 04 March 1996, 254 SCRA 234.

EN BANC

G.R. No. 81954             August 8, 1989

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

G.R. No. 81967             August 8, 1989

VICENTE A. FERIA JR., petitioner, vs.HON. SALVADOR M. MISON, HON. VICENTE JAYME, and HON. CATALINO MACARAIG, JR., in their respective capacities as Commissioner of Customs, Secretary of Finance, and Executive Secretary, respondents.

G.R. No. 82023             August 8, 1989

ADOLFO CASARENO, PACIFICO LAGLEVA, JULIAN C. ESPIRITU, DENNIS A. AZARRAGA, RENATO DE JESUS, NICASIO C. GAMBOA, CORAZON RALLOS NIEVES, FELICITACION R. GELUZ, LEODEGARIO H. FLORESCA, SUBAER PACASUM, ZENAIDA LANARIA, JOSE B. ORTIZ, GLICERIO R. DOLAR, CORNELIO NAPA, PABLO B. SANTOS, FERMIN RODRIGUEZ, DALISAY BAUTISTA, LEONARDO JOSE, ALBERTO LONTOK, PORFIRIO TABINO, JOSE BARREDO, ROBERTO ARNALDO, ESTER TAN, PEDRO BAKAL, ROSARIO DAVID, RODOLFO AFUANG, LORENZO CATRE, LEONCIA CATRE, ROBERTO ABADA, petitioners, vs.COMMISSIONER SALVADOR M. MISON, COMMISSIONER, BUREAU OF CUSTOMS, respondent.

G.R. No. 83737             August 8, 1989

BENEDICTO L. AMASA and WILLIAM S. DIONISIO, petitioners, vs.PATRICIA A. STO. TOMAS, in her capacity as Chairman of the Civil Service Commission and SALVADOR MISON, in his capacity as Commissioner of the Bureau of Customs, respondents.

G.R. No. 85310             August 8, 1989

SALVADOR M. MISON, in his capacity as Commissioner of Customs, petitioner, vs.

CIVIL SERVICE COMMISSION, ABACA, SISINIO T., ABAD, ROGELIO C., ABADIANO, JOSE P., ABCEDE, NEMECIO C., ABIOG, ELY F., ABLAZA, AURORA M., AGBAYANI, NELSON I., AGRES ANICETO, AGUILAR, FLOR, AGUILUCHO MA. TERESA R., AGUSTIN, BONIFACIO T., ALANO, ALEX P., ALBA, MAXIMO F. JR., ALBANO, ROBERT B., ALCANTARA, JOSE G., ALMARIO, RODOLFO F., ALVEZ, ROMUALDO R., AMISTAD RUDY M., AMOS, FRANCIS F., ANDRES, RODRIGO V., ANGELES, RICARDO S., ANOLIN, MILAGROS H., AQUINO, PASCASIO E., ARABE, MELINDA M., ARCANGEL, AGUSTIN S., JR., ARPON, ULPLIANO U., JR., ARREZA, ARTEMIO M., JR., ARROJO, ANTONIO P., ARVISU, ALEXANDER S., ASCAÑ;O, ANTONIO T., ASLAHON, JULAHON P., ASUNCION, VICTOR R., ATANGAN, LORNA S., ATIENZA, ALEXANDER R., BACAL, URSULINO C., BAÑ;AGA, MARLOWE, Z., BANTA, ALBERTO T., BARREDO, JOSE B., BARROS, VICTOR C., BARTOLOME, FELIPE A., BAYSAC, REYNALDO S., BELENO, ANTONIO B., BERNARDO, ROMEO D., BERNAS, MARCIANO S., BOHOL, AUXILIADOR G., BRAVO, VICTOR M., BULEG, BALILIS R., CALNEA, MERCEDES M., CALVO, HONESTO G., CAMACHO, CARLOS V., CAMPOS, RODOLFO C., CAPULONG, RODRIGO G., CARINGAL, GRACIA Z., CARLOS, LORENZO B., CARRANTO, FIDEL U., CARUNGCONG, ALFREDO M., CASTRO, PATRICIA J., CATELO, ROGELIO B., CATURLA, MANUEL B., CENIZAL, JOSEFINA F., CINCO, LUISITO, CONDE0, JOSE C., JR., CORCUERA, FIDEL S., CORNETA, VICENTE S., CORONADO, RICARDO S., CRUZ, EDUARDO S., CRUZ, EDILBERTO A., CRUZ, EFIGENIA B., CRUZADO, MARCIAL C., CUSTODIO, RODOLFO M., DABON, NORMA M., DALINDIN, EDNA MAE D., DANDAL, EDEN F., DATUHARON, SATA A., DAZO, GODOFREDO L., DE CASTRO, LEOPAPA, DE GUZMAN, ANTONIO A., DE GUZMAN, RENATO E., DE LA CRUZ, AMADO A., JR., DE LA CRUZ, FRANCISCO C., DE LA PEÑ;A, LEONARDO, DEL CAMPO, ORLANDO, DEL RIO, MAMERTO P., JR., DEMESA, WILHELMINA T., DIMAKUTA, SALIC L., DIZON, FELICITAS A., DOCTOR, HEIDY M., DOLAR, GLICERIO R., DOMINGO, NICANOR J., DOMINGO, PERFECTO V., JR., DUAY, JUANA G., DYSANGCO, RENATO F., EDILLOR, ALFREDO P., ELEVAZO, LEONARDO A., ESCUYOS, MANUEL M., JR., ESMERIA, ANTONIO E., ESPALDON, MA. LOURDES H., ESPINA, FRANCO A., ESTURCO, RODOLFO C., EVANGELINO, FERMIN I., FELIX, ERNESTO G., FERNANDEZ, ANDREW M., FERRAREN, ANTONIO C., FERRERA, WENCESLAO A., FRANCISCO, PELAGIO S., JR., FUENTES, RUDY L., GAGALANG, RENATO V., GALANG, EDGARDO R., GAMBOA, ANTONIO C., GAN, ALBERTO R., GARCIA, GILBERT M., GARCIA, EDNA V., GARCIA, JUAN L., GAVIOLA, LILIAN V., GEMPARO, SEGUNDINA G., GOBENCIONG, FLORDELIZ B., GRATE, FREDERICK R., GREGORIO, LAURO P., GUARTICO, AMMON H., GUIANG, MYRNA N., GUINTO, DELFIN C., HERNANDEZ, LUCAS A., HONRALES, LORETO N., HUERTO, LEOPOLDO H., HULAR , LANNYROSS E., IBAÑ;EZ, ESTER C., ILAGAN, HONORATO C., INFANTE, REYNALDO C., ISAIS, RAY C., ISMAEL, HADJI AKRAM B., JANOLO, VIRGILIO M., JAVIER, AMADOR L., JAVIER, ROBERTO S., JAVIER, WILLIAM R., JOVEN, MEMIA A., JULIAN,

REYNALDO V., JUMAMOY, ABUNDIO A., JUMAQUIAO, DOMINGO F., KAINDOY, PASCUAL B., JR., KOH, NANIE G., LABILLES, ERNESTO S., LABRADOR, WILFREDO M., LAGA, BIENVENIDO M., LAGLEVA, PACIFICO Z., LAGMAN, EVANGELINE G., LAMPONG, WILFREDO G., LANDICHO, RESTITUTO A., LAPITAN, CAMILO M., LAURENTE, REYNALDO A., LICARTE, EVARISTO R., LIPIO, VICTOR O., LITTAUA, FRANKLIN Z., LOPEZ, MELENCIO L., LUMBA, OLIVIA., MACAISA, BENITO T., MACAISA, ERLINDA C., MAGAT, ELPIDIO, MAGLAYA, FERNANDO P., MALABANAN, ALFREDO C., MALIBIRAN, ROSITA D., MALIJAN, LAZARO V., MALLI, JAVIER M., MANAHAN, RAMON S., MANUEL, ELPIDIO R., MARAVILLA, GIL B., MARCELO, GIL C., MARIÑ;AS, RODOLFO V., MAROKET, JESUS C., MARTIN, NEMENCIO A., MARTINEZ, ROMEO M., MARTINEZ, ROSELINA M., MATIBAG, ANGELINA G., MATUGAS, ERNESTO T., MATUGAS, FRANCISCO T., MAYUGA, PORTIA E., MEDINA, NESTOR M., MEDINA, ROLANDO S., MENDAVIA, AVELINO I., MENDOZA, POTENCIANO G., MIL, RAY M., MIRAVALLES, ANASTACIA L., MONFORTE, EUGENIO, JR., G., MONTANO, ERNESTO F., MONTERO, JUAN M. III., MORALDE, ESMERALDO B., JR., MORALES, CONCHITA D.L., MORALES, NESTOR P., MORALES, SHIRLEY S., MUNAR, JUANITA L., MUÑ;OZ, VICENTE R., MURILLO, MANUEL M., NACION, PEDRO R., NAGAL, HENRY N., NAPA, CORNELIO B., NAVARRO, HENRY L., NEJAL, FREDRICK E., NICOLAS, REYNALDO S., NIEVES, RUFINO A., OLAIVAR, SEBASTIAN T., OLEGARIO, LEO Q., ORTEGA, ARLENE R., ORTEGA, JESUS R., OSORIO, ABNER S., PAPIO, FLORENTINO T. II, PASCUA, ARNULFO A., PASTOR, ROSARIO, PELAYO, ROSARIO L., PEÑ;A, AIDA C., PEREZ, ESPERIDION B., PEREZ, JESUS BAYANI M., PRE, ISIDRO A., PRUDENCIADO, EULOGIA S., PUNZALAN, LAMBERTO N., PURA, ARNOLD T., QUINONES, EDGARDO I., QUINTOS, AMADEO C., JR., QUIRAY, NICOLAS C., RAMIREZ, ROBERTO P., RAÑ;ADA, RODRIGO C., RARAS, ANTONIO A., RAVAL, VIOLETA V., RAZAL, BETTY R., REGALA, PONCE F., REYES, LIBERATO R., REYES, MANUEL E., REYES, NORMA Z., REYES, TELESFORO F., RIVERA, ROSITA L., ROCES, ROBERTO V., ROQUE, TERESITA S., ROSANES, MARILOU M., ROSETE, ADAN I., RUANTO, REY, CRISTO C., JR., SABLADA, PASCASIO G., SALAZAR, SILVERIA S., SALAZAR, VICTORIA A., SALIMBACOD, PERLITA C., SALMINGO, LOURDES M., SANTIAGO, EMELITA B., SATINA, PORFIRIO C., SEKITO, COSME B., JR., SIMON, RAMON P., SINGSON, MELECIO C., SORIANO, ANGELO L., SORIANO, MAGDALENA R., SUMULONG, ISIDRO L., JR., SUNICO, ABELARDO T., TABIJE, EMMA B., TAN, RUDY, GOROSPE, TAN, ESTER S., TAN, JULITA S., TECSON, BEATRIZ B., TOLENTINO, BENIGNO A., TURINGAN, ENRICO T., JR., UMPA, ALI A., VALIC, LUCIO E., VASQUEZ, NICANOR B., VELARDE, EDGARDO C., VERA, AVELINO A., VERAME, OSCAR E., VIADO, LILIAN T., VIERNES, NAPOLEON K., VILLALON, DENNIS A., VILLAR, LUZ L., VILLALUZ, EMELITO V., ZATA, ANGEL A., JR., ACHARON, CRISTETO, ALBA, RENATO B., AMON, JULITA C., AUSTRIA, ERNESTO C., CALO, RAYMUNDO M., CENTENO, BENJAMIN R., DE CASTRO, LEOPAPA C ., DONATO, ESTELITA P., DONATO, FELIPE S.,

FLORES, PEDRITO S., GALAROSA, RENATO, MALAWI, MAUYAG, MONTENEGRO, FRANCISCO M., OMEGA, PETRONILO T., SANTOS, GUILLERMO F., TEMPLO, CELSO, VALDERAMA, JAIME B., and VALDEZ, NORA M., respondents.

G.R. No. 85335             August 8, 1989

FRANKLIN Z. LITTAUA, ADAN I. ROSETE, FRANCISCO T. MATUGAS, MA. J. ANGELINA G. MATIBAG, LEODEGARDIO H. FLORESCA, LEONARDO A. DELA PEÑ;A, ABELARDO T. SUNICO, MELENCIO L. LOPEZ, NEMENCIO A. MARTIN, RUDY M. AMISTAD, ERNESTO T. MATUGAS, SILVERIA S. SALAZAR, LILLIAN V. GAVIOLA, MILAGROS ANOLIN, JOSE B. ORTIZ, ARTEMIO ARREZA, JR., GILVERTO M. GARCIA, ANTONIO A. RARAS, FLORDELINA B. GOBENCIONG, ANICETO AGRES, EDGAR Y. QUINONES, MANUEL B. CATURLA, ELY F. ABIOG, RODRIGO C. RANADA, LAURO GREGORIO, ALBERTO I. GAN, EDGARDO GALANG, RAY C. ISAIS, NICANOR B. VASQUEZ, MANUEL ESCUYOS, JR., ANTONIO B. BELENO, ELPIO R. MANUEL, AUXILIADOR C. BOHOL, LEONARDO ELEVAZO, VICENTE S. CORNETA, petitioners, vs.COM. SALVADOR M. MISON/BUREAU OF CUSTOMS and the CIVIL SERVICE COMMISSION, respondents.

G.R. No. 86241             August 8, 1989

SALVADOR M. MISON, in his capacity as Commissioner of Customs, petitioner, vs.CIVIL SERVICE COMMISSION, SENEN S. DIMAGUILA, ROMEO P. ARABE BERNARDO S. QUINTONG, GREGORIO P. REYES, and ROMULO C. BADILLO respondents

SARMIENTO, J.:

The Court writes finis to this contreversy that has raged bitterly for the several months. It does so out of ligitimate presentement of more suits reaching it as a consequence of the government reorganization and the instability it has wrought on the performance and efficiency of the bureaucracy. The Court is apprehensive that unless the final word is given and the ground rules are settled, the issue will fester, and likely foment on the constitutional crisis for the nation, itself biset with grave and serious problems.

The facts are not in dispute.

On March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3, "DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE, PROTECTING THEIR BASIC RIGHTS, ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING FOR AN ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW CONSTITUTION." Among other things, Proclamation No. 3 provided:

SECTION 1. ...

The President shall give priority to measures to achieve the mandate of the people to:

(a) Completely reorganize the government, eradicate unjust and oppressive structures, and all iniquitous vestiges of the previous regime; 1

. . .

Pursuant thereto, it was also provided:

SECTION 1. In the reorganization of the government, priority shall be given to measures to promote economy, efficiency, and the eradication of graft and corruption.

SECTION 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986.

SECTION 3. Any public officer or employee separated from the service as a result of the organization effected under this Proclamation shall, if entitled under the laws then in force, receive the retirement and other benefits accruing thereunder.

SECTION 4. The records, equipment, buildings, facilities and other properties of all government offices shall be carefully preserved. In case any office or body is abolished or reorganized pursuant to this Proclamation, its FUNDS and properties shall be transferred to the office or body to which its powers, functions and responsibilities substantially pertain. 2

Actually, the reorganization process started as early as February 25, 1986, when the President, in her first act in office, called upon "all appointive public officials to submit their courtesy resignation(s) beginning with the members of the Supreme Court."3 Later on, she abolished the Batasang Pambansa4 and the positions of Prime Minister and Cabinet 5 under the 1973 Constitution.

Since then, the President has issued a number of executive orders and directives reorganizing various other government offices, a number of which, with respect to elected local officials, has been challenged in this Court, 6 and two of which, with respect to appointed functionaries, have likewise been questioned herein. 7

On May 28, 1986, the President enacted Executive Order No. 17, "PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE FREEDOM CONSTITUTION." Executive Order No. 17 recognized the "unnecessary anxiety and demoralization among the deserving officials and employees" the ongoing government reorganization had generated, and prescribed as "grounds for the separation/replacement of personnel," the following:

SECTION 3. The following shall be the grounds for separation replacement of personnel:

1) Existence of a case for summary dismissal pursuant to Section 40 of the Civil Service Law;

2) Existence of a probable cause for violation of the Anti-Graft and Corrupt Practices Act as determined by the Mnistry Head concerned;

3) Gross incompetence or inefficiency in the discharge of functions;

4) Misuse of public office for partisan political purposes;

5) Any other analogous ground showing that the incumbent is unfit to remain in the service or his separation/replacement is in the interest of the service.8

On January 30, 1987, the President promulgated Executive Order No. 127, "REORGANIZING THE MINISTRY OF FINANCE." 9 Among other offices, Executive Order No. 127 provided for the reorganization of the Bureau of Customs 10 and prescribed a new staffing pattern therefor.

Three days later, on February 2, 1987, 11 the Filipino people adopted the new Constitution.

On January 6, 1988, incumbent Commissioner of Customs Salvador Mison issued a Memorandum, in the nature of "Guidelines on the Implementation of Reorganization Executive Orders," 12 prescribing the procedure in personnel placement. It also provided:

1. By February 28, 1988, the employees covered by Executive Order 127 and the grace period extended to the Bureau of Customs by the President of the Philippines on reorganization shall be:

a) informed of their re-appointment, or

b) offered another position in the same department or agency or

c) informed of their termination. 13

On the same date, Commissioner Mison constituted a Reorganization Appeals Board charged with adjudicating appeals from removals under the above Memorandum. 14 On January 26, 1988, Commissioner Mison addressed several notices to various Customs officials, in the tenor as follows:

Sir:

Please be informed that the Bureau is now in the process of implementing the Reorganization Program under Executive Order No. 127.

Pursuant to Section 59 of the same Executive Order, all officers and employees of the Department of Finance, or the Bureau of Customs in particular, shall continue to perform their respective duties and responsibilities in a hold-over capacity, and that those incumbents whose positions are not carried in the new reorganization pattern, or who are not re- appointed, shall be deemed separated from the service.

In this connection, we regret to inform you that your services are hereby terminated as of February 28, 1988. Subject to the normal clearances, you may receive the retirement benefits to which you may be entitled under existing laws, rules and regulations.

In the meantime, your name will be included in the consolidated list compiled by the Civil Service Commission so that you may be given priority for future employment with the Government as the need arises.

Sincerely yours,(Sgd) SALVADOR M. MISONCommissioner15

As far as the records will yield, the following were recipients of these notices:

1. CESAR DARIO

2. VICENTE FERIA, JR.

3. ADOLFO CASARENO

4. PACIFICO LAGLEVA

5. JULIAN C. ESPIRITU

6. DENNIS A. AZARRAGA

7. RENATO DE JESUS

8. NICASIO C. GAMBOA

9. CORAZON RALLOS NIEVES

10. FELICITACION R. GELUZ

11. LEODEGARIO H. FLORESCA

12. SUBAER PACASUM

13. ZENAIDA LANARIA

14. JOSE B. ORTIZ

15. GLICERIO R. DOLAR

16. CORNELIO NAPA

17. PABLO B. SANTOS

18. FERMIN RODRIGUEZ

19. DALISAY BAUTISTA

20. LEONARDO JOSE

21. ALBERTO LONTOK

22. PORFIRIO TABINO

23. JOSE BARREDO

24. ROBERTO ARNALDO

25. ESTER TAN

26. PEDRO BAKAL

27. ROSARIO DAVID

28. RODOLFO AFUANG

29. LORENZO CATRE

30. LEONCIA CATRE

31. ROBERTO ABADA

32. ABACA, SISINIO T.

33. ABAD, ROGELIO C.

34. ABADIANO, JOSE P

35. ABCEDE, NEMECIO C.

36. ABIOG, ELY F.

37. ABLAZA, AURORA M.

38. AGBAYANI, NELSON I.

39. AGRES, ANICETO

40. AGUILAR, FLOR

41. AGUILUCHO, MA. TERESA R.

42. AGUSTIN, BONIFACIO T.

43. ALANO, ALEX P.

44. ALBA, MAXIMO F. JR.

45. ALBANO, ROBERT B.

46. ALCANTARA, JOSE G.

47. ALMARIO, RODOLFO F.

48. ALVEZ, ROMUALDO R.

49. AMISTAD, RUDY M.

50. AMOS, FRANCIS F.

51. ANDRES, RODRIGO V.

52. ANGELES, RICARDO S.

53. ANOLIN, MILAGROS H.

54. AQUINO, PASCASIO E. L.

55. ARABE, MELINDA M.

56. ARCANGEL, AGUSTIN S, JR.

57. ARPON, ULPIANO U., JR.

58. ARREZA, ARTEMIO M, JR.

59. ARROJO, ANTONIO P.

60. ARVISU, ALEXANDER S.

61. ASCAÑ;O, ANTONIO T.

62. ASLAHON, JULAHON P.

63. ASUNCION, VICTOR R.

64. ATANGAN, LORNA S.

65. ANTIENZA, ALEXANDER R.

66. BACAL URSULINO C.

67. BAÑ;AGA, MARLOWE Z.

68. BANTA, ALBERTO T.

69. BARROS, VICTOR C.

70. BARTOLOME, FELIPE A.

71. BAYSAC, REYNALDO S.

72. BELENO, ANTONIO B.

73. BERNARDO, ROMEO D.

74. BERNAS, MARCIANO S.

75. BOHOL, AUXILIADOR G.

76. BRAVO, VICTOR M.

77. BULEG, BALILIS R.

78. CALNEA, MERCEDES M.

79. CALVO, HONESTO G.

80. CAMACHO, CARLOS V.

81. CAMPOS, RODOLFO C.

82. CAPULONG, RODRIGO G.

83. CARINGAL, GRACIA Z.

84. CARLOS, LORENZO B.

85. CARRANTO, FIDEL U.

86. CARUNGCONG, ALFREDO M.

87. CASTRO, PATRICIA J.

88. CATELO, ROGELIO B.

89. CATURLA, MANUEL B.

90. CENIZAL, JOSEFINA F.

91. CINCO, LUISITO

92. CONDE, JOSE C., JR.

93. CORCUERA, FIDEL S.

94. CORNETA, VICENTE S.

95. CORONADO, RICARDO S.

96. CRUZ, EDUARDO S.

97. CRUZ, EDILBERTO A,

98. CRUZ, EFIGENIA B.

99. CRUZADO,NORMA M.

100. CUSTODIO, RODOLFO M.

101. DABON, NORMA M.

102. DALINDIN, EDNA MAE D.

103. DANDAL, EDEN F.

104. DATUHARON, SATA A.

105. DAZO, GODOFREDO L.

106. DE CASTRO, LEOPAPA

107. DE GUZMAN, ANTONIO A.

108. DE GUZMAN, RENATO E.

109. DE LA CRUZ, AMADO A., JR.

110. DE LA CRUZ, FRANCISCO C.

111. DE LA PEÑ;A, LEONARDO

112. DEL CAMPO, ORLANDO

113. DEL RIO, MAMERTO P., JR.

114. DEMESA, WILHELMINA T.

115. DIMAKUTA, SALIC L.

116. DIZON, FELICITAS A.

117. DOCTOR, HEIDY M.

118. DOMINGO, NICANOR J.

119. DOMINGO, PERFECTO V., JR.

120. DUAY, JUANA G.

121. DYSANGCO, RENATO F.

122. EDILLOR, ALFREDO P.

123. ELEVAZO, LEONARDO A

124. ESCUYOS, MANUEL M., JR.

125. ESMERIA, ANTONIO E.

126. ESPALDON, MA. LOURDES H.

127. ESPINA, FRANCO A.

128. ESTURCO, RODOLFO C.

129. EVANGELINO, FERMIN I.

130. FELIX, ERNESTO G.

131. FERNANDEZ, ANDREW M.

132. FERRAREN, ANTONIO C.

133. FERRERA, WENCESLAO A.

134. FRANCISCO, PELAGIO S, JR.

135. FUENTES, RUDY L.

136. GAGALANG, RENATO V.

137. GALANG, EDGARDO R.

138. GAMBOA, ANTONIO C.

139. GAN, ALBERTO P

140. GARCIA, GILBERT M.

141. GARCIA, EDNA V.

142. GARCIA, JUAN L.

143. GAVIOIA, LILIAN V.

144. GEMPARO, SEGUNDINA G.

145. GOBENCIONG, FLORDELIZ B.

146. GRATE, FREDERICK R.

147. GREGORIO, LAURO P.

148. GUARTICO, AMMON H.

149. GUIANG, MYRNA N.

150. GUINTO, DELFIN C.

151. HERNANDEZ, LUCAS A.

152. HONRALES, LORETO N.

153. HUERTO, LEOPOLDO H.

154. HULAR, LANNYROSS E.

155. IBAÑ;EZ, ESTER C.

156. ILAGAN, HONORATO C.

157. INFANTE, REYNALDO C.

158. ISAIS, RAY C.

159. ISMAEL, HADJI AKRAM B.

160. JANOLO, VIRGILIO M.

161. JAVIER, AMADOR L.

162. JAVIER, ROBERTO S.

163. JAVIER, WILLIAM R.

164. JOVEN, MEMIA A.

165. JULIAN, REYNALDO V.

166. JUMAMOY, ABUNDIO A.

167. JUMAQUIAO, DOMINGO F.

168. KAINDOY, PASCUAL B., JR.

169. KOH, NANIE G.

170. LABILLES, ERNESTO S.

171. LABRADOR, WILFREDO M.

172. LAGA, BIENVENIDO M.

173. LAGMAN, EVANGELINE G.

174. LAMPONG, WILFREDO G.

175. LANDICHO, RESTITUTO A.

176. LAPITAN, CAMILO M.

177. LAURENTE, REYNALDO A.

178. LICARTE, EVARISTO R.

179. LIPIO, VICTOR O.

180. LITTAUA, FRANKLIN Z.

181. LOPEZ, MELENCIO L.

182. LUMBA, OLIVIA R.

183. MACAISA, BENITO T.

184. MACAISA, ERLINDA C.

185. MAGAT, ELPIDIO

186. MAGLAYA, FERNANDO P.

187. MALABANAN, ALFREDO C.

188. MALIBIRAN, ROSITA D.

189. MALIJAN, LAZARO V.

190. MALLI, JAVIER M.

191. MANAHAN, RAMON S.

192. MANUEL, ELPIDIO R.

193. MARAVILLA, GIL B.

194. MARCELO, GIL C.

195. MARIÑ;AS, RODOLFO V.

196. MAROKET ,JESUS C.

197. MARTIN, NEMENCIO A.

198. MARTINEZ, ROMEO M.

199. MARTINEZ, ROSELINA M.

200. MATIBAG, ANGELINA G.

201. MATUGAS, ERNESTO T.

202. MATUGAS, FRANCISCO T.

203. MAYUGA, PORTIA E.

204. MEDINA, NESTOR M.

205. MEDINA, ROLANDO S.

206. MENDAVIA, AVELINO

207. MENDOZA, POTENCIANO G.

208. MIL, RAY M.

209. MIRAVALLES, ANASTACIA L.

210. MONFORTE, EUGENIO, JR. G.

211. MONTANO, ERNESTO F.

212. MONTERO, JUAN M. III

213. MORALDE, ESMERALDO B., JR.

214. MORALES, CONCHITA D. L

215. MORALES, NESTOR P.

216. MORALES, SHIRLEY S.

217. MUNAR, JUANITA L.

218. MUÑ;OZ, VICENTE R.

219. MURILLO, MANUEL M.

220. NACION, PEDRO R.

221. NAGAL, HENRY N.

222. NAVARRO, HENRY L.

223. NEJAL FREDRICK E.

224. NICOLAS, REYNALDO S.

225. NIEVES, RUFINO A.

226. OLAIVAR, SEBASTIAN T.

227. OLEGARIO, LEO Q.

228. ORTEGA, ARLENE R.

229. ORTEGA, JESUS R.

230. OSORIO, ABNER S.

231. PAPIO FLORENTINO T. II

232. PASCUA, ARNULFO A.

233. PASTOR, ROSARIO

234. PELAYO, ROSARIO L.

235. PEÑ;A, AIDA C.

236. PEREZ, ESPERIDION B.

237. PEREZ, JESUS BAYANI M.

238. PRE, ISIDRO A.

239. PRUDENCIADO, EULOGIA S.

240. PUNZALAN, LAMBERTO N.

241. PURA, ARNOLD T.

242. QUINONES, EDGARDO I.

243. QUINTOS, AMADEO C., JR.

244. QUIRAY, NICOLAS C.

245. RAMIREZ, ROBERTO P.

246. RANADA, RODRIGO C.

247. RARAS, ANTONIO A.

248. RAVAL, VIOLETA V.

249. RAZAL, BETTY R.

250. REGALA, PONCE F.

251. REYES, LIBERATO R.

252. REYES, MANUEL E.

253. REYES, NORMA Z.

254. REYES, TELESPORO F.

255. RIVERA, ROSITA L.

256. ROCES, ROBERTO V.

257. ROQUE, TERESITA S.

258. ROSANES, MARILOU M.

259. ROSETE, ADAN I.

260. RUANTO, REY CRISTO C., JR.

261. SABLADA, PASCASIO G.

262. SALAZAR, SILVERIA S.

263. SALAZAR, VICTORIA A.

264. SALIMBACOD, PERLITA C.

265. SALMINGO, LOURDES M.

266. SANTIAGO, EMELITA B.

267. SATINA, PORFIRIO C.

268. SEKITO, COSME B JR.

269. SIMON, RAMON P.

270. SINGSON, MELENCIO C.

271. SORIANO, ANGELO L.

272. SORIANO, MAGDALENA R.

273. SUNICO, ABELARDO T .

274. TABIJE, EMMA B.

275. TAN, RUDY GOROSPE

276. TAN, ESTER S.

277. TAN, JULITA S.

278. TECSON, BEATRIZ B.

279. TOLENTINO, BENIGNO A.

280. TURINGAN, ENRICO T JR.

281. UMPA, ALI A.

282. VALIC, LUCIO E.

283. VASQUEZ, NICANOR B.

284. VELARDE, EDGARDO C.

285. VERA, AVELINO A.

286. VERAME, OSCAR E.

287. VIADO, LILIAN T.

288. VIERNES, NAPOLEON K

289. VILLALON, DENNIS A.

290. VILLAR, LUZ L.

291. VILLALUZ, EMELITO V.

292. VILLAR, LUZ L.

293. ZATA, ANGELA JR.

294. ACHARON, CRISTETO

295. ALBA, RENATO B.

296. AMON, JULITA C.

297. AUSTRIA, ERNESTO C.

298. CALO, RAYMUNDO M.

299. CENTENO, BENJAMIN R.

300. DONATO, ESTELITA P.

301. DONATO, FELIPE S

302. FLORES, PEDRITO S.

303. GALAROSA, RENATO

304. MALAWI, MAUYAG

305. MONTENEGRO, FRANSISCO M.

306. OMEGA, PETRONILO T.

307. SANTOS, GUILLERMO P.

308. TEMPLO, CELSO

309. VALDERAMA, JAIME B.

310. VALDEZ, NORA M.

Cesar Dario is the petitioner in G.R. No. 81954; Vicente Feria, Jr., is the petitioner in G.R. No. 81967; Messrs. Adolfo Caserano Pacifico Lagleva Julian C. Espiritu, Dennis A. Azarraga Renato de Jesus, Nicasio C. Gamboa, Mesdames Corazon Rallos Nieves and Felicitacion R. Geluz Messrs. Leodegario H. Floresca, Subaer Pacasum Ms. Zenaida Lanaria Mr. Jose B. Ortiz, Ms. Gliceria R. Dolar, Ms. Cornelia Napa, Pablo B. Santos, Fermin Rodriguez, Ms. Daligay Bautista, Messrs. Leonardo Jose, Alberto Lontok, Porfirio Tabino Jose Barredo, Roberto Arnaldo, Ms. Ester Tan, Messrs. Pedro Bakal,

Rosario David, Rodolfo Afuang, Lorenzo Catre,, Ms. Leoncia Catre, and Roberto Abaca, are the petitioners in G.R. No. 82023; the last 279 16 individuals mentioned are the private respondents in G.R. No. 85310.

As far as the records will likewise reveal, 17 a total of 394 officials and employees of the Bureau of Customs were given individual notices of separation. A number supposedly sought reinstatement with the Reorganization Appeals Board while others went to the Civil Service Commission. The first thirty-one mentioned above came directly to this Court.

On June 30, 1988, the Civil Service Commission promulgated its ruling ordering the reinstatement of the 279 employees, the 279 private respondents in G.R. No. 85310, the dispositive portion of which reads as follows:

WHEREFORE, it is hereby ordered that:

1. Appellants be immediately reappointed to positions of comparable or equivalent rank in the Bureau of Customs without loss of seniority rights;

2. Appellants be paid their back salaries reckoned from the dates of their illegal termination based on the rates under the approved new staffing pattern but not lower than their former salaries.

This action of the Commission should not, however, be interpreted as an exoneration of the appellants from any accusation of wrongdoing and, therefore, their reappointments are without prejudice to:

1. Proceeding with investigation of appellants with pending administrative cases, and where investigations have been finished, to promptly, render the appropriate decisions;

2. The filing of appropriate administrative complaints against appellants with derogatory reports or information if evidence so warrants.

SO ORDERED. 18

On July 15, 1988, Commissioner Mison, represented by the Solicitor General, filed a motion for reconsideration Acting on the motion, the Civil Service Commission, on September 20, 1988, denied reconsideration. 19

On October 20, 1988, Commissioner Mison instituted certiorari proceedings with this Court, docketed, as above-stated, as G.R. No. 85310 of this Court.

On November 16,1988, the Civil Service Commission further disposed the appeal (from the resolution of the Reorganization Appeals Board) of five more employees, holding as follows:

WHEREFORE, it is hereby ordered that:

1. Appellants be immediately reappointed to positions of comparable or equivalent rank in the Bureau of Customs without loss of seniority rights; and

2. Appellants be paid their back salaries to be reckoned from the date of their illegal termination based on the rates under the approved new staffing pattern but not lower than their former salaries.

This action of the Commission should not, however, be interpreted as an exoneration of the herein appellants from any accusation of any wrongdoing and therefore, their reappointments are without prejudice to:

1. Proceeding with investigation of appellants with pending administrative cases, if any, and where investigations have been finished, to promptly, render the appropriate decisions; and

2. The filing of appropriate administrative complaints against appellant with derogatory reports or information, if any, and if evidence so warrants.

SO ORDERED. 20

On January 6, 1989, Commissioner Mison challenged the Civil Service Commission's Resolution in this Court; his petitioner has been docketed herein as G.R. No. 86241. The employees ordered to be reinstated are Senen Dimaguila, Romeo Arabe, Bemardo Quintong,Gregorio Reyes, and Romulo Badillo. 21

On June 10, 1988, Republic Act No. 6656, "AN ACT TO PROTECT THE SECURITY OF TENURE OF CIVIL SERVICE OFFICERS AND EMPLOYEES IN THE IMPLEMENTATION OF GOVERNMENT REORGANIZATION," 22 was signed into law. Under Section 7, thereof:

Sec. 9. All officers and employees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act, shall be ordered reinstated or reappointed as the case may be without loss of seniority and shall be entitled to full pay for the period of separation. Unless also separated for cause, all officers and employees, including casuals and temporary employees, who have been separated pursuant to reorganization shall, if entitled thereto, be paid the appropriate separation pay and retirement and other benefits under existing laws within ninety (90) days from the date of the effectivity of their separation or from the date of the receipt of the resolution of their appeals as the case may be: Provided, That application for clearance has been filed and no action thereon has been made by the corresponding department or agency. Those who are not entitled to said benefits shall be paid a separation gratuity in the amount equivalent to one (1) month salary for every year of service. Such separation pay

and retirement benefits shall have priority of payment out of the savings of the department or agency concerned. 23

On June 23, 1988, Benedicto Amasa and William Dionisio, customs examiners appointed by Commissioner Mison pursuant to the ostensible reorganization subject of this controversy, petitioned the Court to contest the validity of the statute. The petition is docketed as G.R. No. 83737.

On October 21, 1988, thirty-five more Customs officials whom the Civil Service Commission had ordered reinstated by its June 30,1988 Resolution filed their own petition to compel the Commissioner of Customs to comply with the said Resolution. The petition is docketed as G.R. No. 85335.

On November 29, 1988, we resolved to consolidate all seven petitions.

On the same date, we resolved to set the matter for hearing on January 12, 1989. At the said hearing, the parties, represented by their counsels (a) retired Justice Ruperto Martin; (b) retired Justice Lino Patajo. (c) former Dean Froilan Bacungan (d) Atty. Lester Escobar (e) Atty. Faustino Tugade and (f) Atty. Alexander Padilla, presented their arguments. Solicitor General Francisco Chavez argued on behalf of the Commissioner of Customs (except in G.R. 85335, in which he represented the Bureau of Customs and the Civil Service Commission).lâwphî1.ñèt Former Senator Ambrosio Padilla also appeared and argued as amicus curiae Thereafter, we resolved to require the parties to submit their respective memoranda which they did in due time.

There is no question that the administration may validly carry out a government reorganization — insofar as these cases are concerned, the reorganization of the Bureau of Customs — by mandate not only of the Provisional Constitution, supra, but also of the various Executive Orders decreed by the Chief Executive in her capacity as sole lawmaking authority under the 1986-1987 revolutionary government. It should also be noted that under the present Constitution, there is a recognition, albeit implied, that a government reorganization may be legitimately undertaken, subject to certain conditions. 24

The Court understands that the parties are agreed on the validity of a reorganization per se the only question being, as shall be later seen: What is the nature and extent of this government reorganization?

The Court disregards the questions raised as to procedure, failure to exhaust administrative remedies, the standing of certain parties to sue, 25 and other technical objections, for two reasons, "[b]ecause of the demands of public interest, including the need for stability in the public service,"26 and because of the serious implications of these cases on the administration of the Philippine civil service and the rights of public servants.

The urgings in G.R. Nos. 85335 and 85310, that the Civil Service Commission's Resolution dated June 30, 1988 had attained a character of finality for failure of Commissioner Mison to apply for judicial review or ask for reconsideration seasonalbly under Presidential Decree No. 807, 27 or under Republic Act No. 6656, 28 or under the Constitution, 29 are likewise rejected. The records show that the Bureau of Customs had until July 15, 1988 to ask for reconsideration or come to this Court pursuant to Section 39 of Presidential Decree No. 807. The records likewise show that the Solicitor General filed a motion for reconsideration on July 15, 1988.30 The Civil Service Commission issued its Resolution denying reconsideration on September 20, 1988; a copy of this Resolution was received by the Bureau on September 23, 1988.31 Hence the Bureau had until October 23, 1988 to elevate the matter on certiorari to this Court.32 Since the Bureau's petition was filed on October 20, 1988, it was filed on time.

We reject, finally, contentions that the Bureau's petition (in G.R. 85310) raises no jurisdictional questions, and is therefore bereft of any basis as a petition for certiorari under Rule 65 of the Rules of Court. 33 We find that the questions raised in Commissioner Mison's petition (in G.R. 85310) are, indeed, proper for certiorari, if by "jurisdictional questions" we mean questions having to do with "an indifferent disregard of the law, arbitrariness and caprice, or omission to weigh pertinent considerations, a decision arrived at without rational deliberation, 34 as distinguished from questions that require "digging into the merits and unearthing errors of judgment 35 which is the office, on the other hand, of review under Rule 45 of the said Rules. What cannot be denied is the fact that the act of the Civil Service Commission of reinstating hundreds of Customs employees Commissioner Mison had separated, has implications not only on the entire reorganization process decreed no less than by the Provisional Constitution, but on the Philippine bureaucracy in general; these implications are of such a magnitude that it cannot be said that — assuming that the Civil Service Commission erred — the Commission committed a plain "error of judgment" that Aratuc says cannot be corrected by the extraordinary remedy of certiorari or any special civil action. We reaffirm the teaching of Aratuc — as regards recourse to this Court with respect to rulings of the Civil Service Commission — which is that judgments of the Commission may be brought to the Supreme Court through certiorari alone, under Rule 65 of the Rules of Court.

In Aratuc we declared:

It is once evident from these constitutional and statutory modifications that there is a definite tendency to enhance and invigorate the role of the Commission on Elections as the independent constitutional body charged with the safeguarding of free, peaceful and honest elections. The framers of the new Constitution must be presumed to have definite knowledge of what it means to make the decisions, orders and rulings of the Commission "subject to review by the Supreme Court'. And since instead of maintaining that provision intact, it ordained that the Commission's actuations be instead 'brought to the Supreme Court on certiorari", We cannot insist that there was no intent to change the nature of the remedy, considering that the limited scope of certiorari, compared to a review, is well known in remedial law.36

We observe no fundamental difference between the Commission on Elections and the Civil Service Commission (or the Commission on Audit for that matter) in terms of the constitutional intent to leave the constitutional bodies alone in the enforcement of laws relative to elections, with respect to the former, and the civil service, with respect to the latter (or the audit of government accounts, with respect to the Commission on Audit). As the poll body is the "sole judge" 37 of all election cases, so is the Civil Service Commission the single arbiter of all controversies pertaining to the civil service.

It should also be noted that under the new Constitution, as under the 1973 Charter, "any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari," 38 which, as Aratuc tells us, "technically connotes something less than saying that the same 'shall be subject to review by the Supreme Court,' " 39 which in turn suggests an appeal by petition for review under Rule 45. Therefore, our jurisdiction over cases emanating from the Civil Service Commission is limited to complaints of lack or excess of jurisdiction or grave abuse of discretion tantamount to lack or excess of jurisdiction, complaints that justify certiorari under Rule 65.

While Republic Act No. 6656 states that judgments of the Commission are "final and executory"40 and hence, unappealable, under Rule 65, certiorari precisely lies in the absence of an appeal. 41

Accordingly, we accept Commissioner Mison petition (G.R. No. 85310) which clearly charges the Civil Service Commission with grave abuse of discretion, a proper subject of certiorari, although it may not have so stated in explicit terms.

As to charges that the said petition has been filed out of time, we reiterate that it has been filed seasonably. It is to be stressed that the Solicitor General had thirty days from September 23, 1988 (the date the Resolution, dated September 20,1988, of the Civil Service Commission, denying reconsideration, was received) to commence the instant certiorari proceedings. As we stated, under the Constitution, an aggrieved party has thirty days within which to challenge "any decision, order, or ruling" 42 of the Commission. To say that the period should be counted from the Solicitor's receipt of the main Resolution, dated June 30, 1988, is to say that he should not have asked for reconsideration But to say that is to deny him the right to contest (by a motion for reconsideration) any ruling, other than the main decision, when, precisely, the Constitution gives him such a right. That is also to place him at a "no-win" situation because if he did not move for a reconsideration, he would have been faulted for demanding certiorari too early, under the general rule that a motion for reconsideration should preface a resort to a special civil action. 43 Hence, we must reckon the thirty-day period from receipt of the order of denial.

We come to the merits of these cases.

G.R. Nos. 81954, 81967, 82023, and 85335:

The Case for the Employees

The petitioner in G.R. No. 81954, Cesar Dario was one of the Deputy Commissioners of the Bureau of Customs until his relief on orders of Commissioner Mison on January 26, 1988. In essence, he questions the legality of his dismiss, which he alleges was upon the authority of Section 59 of Executive Order No. 127, supra, hereinbelow reproduced as follows:

SEC. 59. New Structure and Pattern. Upon approval of this Executive Order, the officers and employees of the Ministry shall, in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution.

The new position structure and staffing pattern of the Ministry shall be approved and prescribed by the Minister within one hundred twenty (120) days from the approval of this Executive Order and the authorized positions created hereunder shall be filled with regular appointments by him or by the President, as the case may be. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. Those separated from the service shall receive the retirement benefits to which they may be entitled under existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one month basic salary for every year of service, or the equivalent nearest fraction thereof favorable to them on the basis of highest salary received but in no case shall such payment exceed the equivalent of 12 months salary.

No court or administrative body shall issue any writ of preliminary injunction or restraining order to enjoin the separation/replacement of any officer or employee effected under this Executive Order.44

a provision he claims the Commissioner could not have legally invoked. He avers that he could not have been legally deemed to be an "[incumbent] whose [position] [is] not included therein or who [is] not reappointed"45 to justify his separation from the service. He contends that neither the Executive Order (under the second paragraph of the section) nor the staffing pattern proposed by the Secretary of Finance 46 abolished the office of Deputy Commissioner of Customs, but, rather, increased it to three. 47 Nor can it be said, so he further maintains, that he had not been "reappointed" 48 (under the second paragraph of the section) because "[[r]eappointment therein presupposes that the position to which it refers is a new one in lieu of that which has been abolished or although an existing one, has absorbed that which has been abolished." 49 He claims, finally, that under the Provisional Constitution, the power to dismiss public officials without cause ended on February 25, 1987,50 and that thereafter, public officials enjoyed security of tenure under the provisions of the 1987 Constitution.51

Like Dario Vicente Feria, the petitioner in G.R. No. 81967, was a Deputy Commissioner at the Bureau until his separation directed by Commissioner Mison. And like Dario he claims that under the 1987 Constitution, he has acquired security of tenure and that he

cannot be said to be covered by Section 59 of Executive Order No. 127, having been appointed on April 22, 1986 — during the effectivity of the Provisional Constitution. He adds that under Executive Order No. 39, "ENLARGING THE POWERS AND FUNCTIONS OF THE COMMISSIONER OF CUSTOMS,"52 the Commissioner of Customs has the power "[t]o appoint all Bureau personnel, except those appointed by the President," 53 and that his position, which is that of a Presidential appointee, is beyond the control of Commissioner Mison for purposes of reorganization.

The petitioners in G.R. No. 82023, collectors and examiners in venous ports of the Philippines, say, on the other hand, that the purpose of reorganization is to end corruption at the Bureau of Customs and that since there is no finding that they are guilty of corruption, they cannot be validly dismissed from the service.

The Case for Commissioner Mison

In his comments, the Commissioner relies on this Court's resolution in Jose v. Arroyo54 in which the following statement appears in the last paragraph thereof:

The contention of petitioner that Executive Order No. 127 is violative of the provision of the 1987 Constitution guaranteeing career civil service employees security of tenure overlooks the provisions of Section 16, Article XVIII (Transitory Provisions) which explicitly authorize the removal of career civil service employees "not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution." By virtue of said provision, the reorganization of the Bureau of Customs under Executive Order No. 127 may continue even after the ratification of the Constitution, and career civil service employees may be separated from the service without cause as a result of such reorganization.55

For this reason, Mison posits, claims of violation of security of tenure are allegedly no defense. He further states that the deadline prescribed by the Provisional Constitution (February 25, 1987) has been superseded by the 1987 Constitution, specifically, the transitory provisions thereof, 56 which allows a reorganization thereafter (after February 25, 1987) as this very Court has so declared in Jose v. Arroyo. Mison submits that contrary to the employees' argument, Section 59 of Executive Order No. 127 is applicable (in particular, to Dario and Feria in the sense that retention in the Bureau, under the Executive Order, depends on either retention of the position in the new staffing pattern or reappointment of the incumbent, and since the dismissed employees had not been reappointed, they had been considered legally separated. Moreover, Mison proffers that under Section 59 incumbents are considered on holdover status, "which means that all those positions were considered vacant." 57 The Solicitor General denies the applicability of Palma-Fernandez v. De la Paz 58 because that case supposedly involved a mere transfer and not a separation. He rejects, finally, the force and effect of Executive Order Nos. 17 and 39 for the reason that Executive Order No. 17, which was meant to implement the Provisional Constitution, 59 had ceased to have force and effect upon the ratification of the 1987 Constitution, and that, under Executive Order No. 39, the

dismissals contemplated were "for cause" while the separations now under question were "not for cause" and were a result of government reorganize organization decreed by Executive Order No. 127. Anent Republic Act No. 6656, he expresses doubts on the constitutionality of the grant of retroactivity therein (as regards the reinforcement of security of tenure) since the new Constitution clearly allows reorganization after its effectivity.

G.R. Nos. 85310 and 86241

The Position of Commissioner Mison

Commissioner's twin petitions are direct challenges to three rulings of the Civil Service Commission: (1) the Resolution, dated June 30, 1988, reinstating the 265 customs employees above-stated; (2) the Resolution, dated September 20, 1988, denying reconsideration; and (3) the Resolution, dated November 16, 1988, reinstating five employees. The Commissioner's arguments are as follows:

1. The ongoing government reorganization is in the nature of a "progressive" 60 reorganization "impelled by the need to overhaul the entire government bureaucracy" 61 following the people power revolution of 1986;

2. There was faithful compliance by the Bureau of the various guidelines issued by the President, in particular, as to deliberation, and selection of personnel for appointment under the new staffing pattern;

3. The separated employees have been, under Section 59 of Executive Order No. 127, on mere holdover standing, "which means that all positions are declared vacant;" 62

4. Jose v. Arroyo has declared the validity of Executive Order No. 127 under the transitory provisions of the 1987 Constitution;

5. Republic Act No. 6656 is of doubtful constitutionality.

The Ruling of the Civil Service Commission

The position of the Civil Service Commission is as follows:

1. Reorganizations occur where there has been a reduction in personnel or redundancy of functions; there is no showing that the reorganization in question has been carried out for either purpose — on the contrary, the dismissals now disputed were carried out by mere service of notices;

2. The current Customs reorganization has not been made according to Malacañ;ang guidelines; information on file with the Commission shows that Commissioner Mison has been appointing unqualified personnel;

3. Jose v. Arroyo, in validating Executive Order No. 127, did not countenance illegal removals;

4. Republic Act No. 6656 protects security of tenure in the course of reorganizations.

The Court's ruling

Reorganization, Fundamental Principles of. —

I.

The core provision of law involved is Section 16 Article XVIII, of the 1987 Constitution. We quote:

Sec. 16. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shag be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieul thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries. This provision also applies to career officers whose resignation, tendered in line with the existing policy, had been accepted. 63

The Court considers the above provision critical for two reasons: (1) It is the only provision — in so far as it mentions removals not for cause — that would arguably support the challenged dismissals by mere notice, and (2) It is the single existing law on reorganization after the ratification of the 1987 Charter, except Republic Act No. 6656, which came much later, on June 10, 1988. [Nota been Executive Orders No. 116 (covering the Ministry of Agriculture & Food), 117 (Ministry of Education, Culture & Sports), 119 (Health), 120 (Tourism), 123 (Social Welfare & Development), 124 (Public Works & Highways), 125 transportation & Communications), 126 (Labor & Employment), 127 (Finance), 128 (Science & Technology), 129 (Agrarian Reform), 131 (Natural Resources), 132 (Foreign Affairs), and 133 (Trade & Industry) were all promulgated on January 30,1987, prior to the adoption of the Constitution on February 2, 1987].64

It is also to be observed that unlike the grants of power to effect reorganizations under the past Constitutions, the above provision comes as a mere recognition of the right of the Government to reorganize its offices, bureaus, and instrumentalities. Under Section 4, Article XVI, of the 1935 Constitution:

Section 4. All officers and employees in the existing Government of the Philippine Islands shall continue in office until the Congress shall provide otherwise, but all officers whose appointments are by this Constitution vested in

the President shall vacate their respective office(s) upon the appointment and qualification of their successors, if such appointment is made within a period of one year from the date of the inauguration of the Commonwealth of the Philippines. 65

Under Section 9, Article XVII, of the 1973 Charter:

Section 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 qualification of their successors. 66

The Freedom Constitution is, as earlier seen, couched in similar language:

SECTION 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986.67

Other than references to "reorganization following the ratification of this Constitution," there is no provision for "automatic" vacancies under the 1987 Constitution.

Invariably, transition periods are characterized by provisions for "automatic" vacancies. They are dictated by the need to hasten the passage from the old to the new Constitution free from the "fetters" of due process and security of tenure.

At this point, we must distinguish removals from separations arising from abolition of office (not by virtue of the Constitution) as a result of reorganization carried out by reason of economy or to remove redundancy of functions. In the latter case, the Government is obliged to prove good faith.68 In case of removals undertaken to comply with clear and explicit constitutional mandates, the Government is not hard put to prove anything, plainly and simply because the Constitution allows it.

Evidently, the question is whether or not Section 16 of Article XVIII of the 1987 Constitution is a grant of a license upon the Government to remove career public officials it could have validly done under an "automatic" vacancy-authority and to remove them without rhyme or reason.

As we have seen, since 1935, transition periods have been characterized by provisions for "automatic" vacancies. We take the silence of the 1987 Constitution on this matter as a restraint upon the Government to dismiss public servants at a moment's notice.

What is, indeed, apparent is the fact that if the present Charter envisioned an "automatic" vacancy, it should have said so in clearer terms, as its 1935, 1973, and 1986 counterparts had so stated.

The constitutional "lapse" means either one of two things: (1) The Constitution meant to continue the reorganization under the prior Charter (of the Revolutionary Government), in the sense that the latter provides for "automatic" vacancies, or (2) It meant to put a stop to those 'automatic" vacancies. By itself, however, it is ambiguous, referring as it does to two stages of reorganization — the first, to its conferment or authorization under Proclamation No. 3 (Freedom Charter) and the second, to its implementation on its effectivity date (February 2, 1987).lâwphî1.ñèt But as we asserted, if the intent of Section 16 of Article XVIII of the 1987 Constitution were to extend the effects of reorganize tion under the Freedom Constitution, it should have said so in clear terms. It is illogical why it should talk of two phases of reorganization when it could have simply acknowledged the continuing effect of the first reorganization.

Second, plainly the concern of Section 16 is to ensure compensation for victims" of constitutional revamps — whether under the Freedom or existing Constitution — and only secondarily and impliedly, to allow reorganization. We turn to the records of the Constitutional Commission:

INQUIRY OF MR. PADILLA

On the query of Mr. Padilla whether there is a need for a specific reference to Proclamation No. 3 and not merely state "result of the reorganization following the ratification of this Constitution', Mr. Suarez, on behalf of the Committee, replied that it is necessary, inasmuch as there are two stages of reorganization covered by the Section.

Mr. Padilla pointed out that since the proposal of the Commission on Government Reorganization have not been implemented yet, it would be better to use the phrase "reorganization before or after the ratification of the Constitution' to simplify the Section. Mr. Suarez instead suggested the phrase "as a result of the reorganization effected before or after the ratification of the Constitution' on the understanding that the provision would apply to employees terminated because of the reorganization pursuant to Proclamation No. 3 and even those affected by the reorganization during the Marcos regime. Additionally, Mr. Suarez pointed out that it is also for this reason that the Committee specified the two Constitutions the Freedom Constitution — and the 1986 [1987] Constitution. 69

Simply, the provision benefits career civil service employees separated from the service. And the separation contemplated must be due to or the result of (1) the reorganization pursuant to Proclamation No. 3 dated March 25, 1986, (2) the reorganization from February 2, 1987, and (3) the resignations of career officers tendered in line with the existing policy and which resignations have been accepted. The phrase "not for cause" is clearly and primarily exclusionary, to exclude those career civil service employees

separated "for cause." In other words, in order to be entitled to the benefits granted under Section 16 of Article XVIII of the Constitution of 1987, two requisites, one negative and the other positive, must concur, to wit:

1. the separation must not be for cause, and

2. the separation must be due to any of the three situations mentioned above.

By its terms, the authority to remove public officials under the Provisional Constitution ended on February 25, 1987, advanced by jurisprudence to February 2, 1987. 70 It Can only mean, then, that whatever reorganization is taking place is upon the authority of the present Charter, and necessarily, upon the mantle of its provisions and safeguards. Hence, it can not be legitimately stated that we are merely continuing what the revolutionary Constitution of the Revolutionary Government had started. We are through with reorganization under the Freedom Constitution — the first stage. We are on the second stage — that inferred from the provisions of Section 16 of Article XVIII of the permanent basic document.

This is confirmed not only by the deliberations of the Constitutional Commission, supra, but is apparent from the Charter's own words. It also warrants our holding in Esguerra and Palma-Fernandez, in which we categorically declared that after February 2, 1987, incumbent officials and employees have acquired security of tenure, which is not a deterrent against separation by reorganization under the quondam fundamental law.

Finally, there is the concern of the State to ensure that this reorganization is no "purge" like the execrated reorganizations under martial rule. And, of course, we also have the democratic character of the Charter itself.

Commissioner Mison would have had a point, insofar as he contends that the reorganization is open-ended ("progressive"), had it been a reorganization under the revolutionary authority, specifically of the Provisional Constitution. For then, the power to remove government employees would have been truly wide ranging and limitless, not only because Proclamation No. 3 permitted it, but because of the nature of revolutionary authority itself, its totalitarian tendencies, and the monopoly of power in the men and women who wield it.

What must be understood, however, is that notwithstanding her immense revolutionary powers, the President was, nevertheless, magnanimous in her rule. This is apparent from Executive Order No. 17, which established safeguards against the strong arm and ruthless propensity that accompanies reorganizations — notwithstanding the fact that removals arising therefrom were "not for cause," and in spite of the fact that such removals would have been valid and unquestionable. Despite that, the Chief Executive saw, as we said, the "unnecessary anxiety and demoralization" in the government rank and file that reorganization was causing, and prescribed guidelines for personnel action. Specifically, she said on May 28, 1986:

WHEREAS, in order to obviate unnecessary anxiety and demoralization among the deserving officials and employees, particularly in the career civil service, it is necessary to prescribe the rules and regulations for implementing the said constitutional provision to protect career civil servants whose qualifications and performance meet the standards of service demanded by the New Government, and to ensure that only those found corrupt, inefficient and undeserving are separated from the government service; 71

Noteworthy is the injunction embodied in the Executive Order that dismissals should be made on the basis of findings of inefficiency, graft, and unfitness to render public service.*

The President's Memorandum of October 14, 1987 should furthermore be considered. We quote, in part:

Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that there will be no further layoffs this year of personnel as a result of the government reorganization. 72

Assuming, then, that this reorganization allows removals "not for cause" in a manner that would have been permissible in a revolutionary setting as Commissioner Mison so purports, it would seem that the Commissioner would have been powerless, in any event, to order dismissals at the Customs Bureau left and right. Hence, even if we accepted his "progressive" reorganization theory, he would still have to come to terms with the Chief Executive's subsequent directives moderating the revolutionary authority's plenary power to separate government officials and employees.

Reorganization under the 1987 Constitution, Nature, Extent, and Limitations of; Jose v. Arroyo, clarified. —

The controversy seems to be that we have, ourselves, supposedly extended the effects of government reorganization under the Provisional Constitution to the regime of the 1987 Constitution. Jose v. Arroyo73 is said to be the authority for this argument. Evidently, if Arroyo indeed so ruled, Arroyo would be inconsistent with the earlier pronouncement of Esguerra and the later holding of Palma-Fernandez. The question, however, is: Did Arroyo, in fact, extend the effects of reorganization under the revolutionary Charter to the era of the new Constitution?

There are a few points about Arroyo that have to be explained. First, the opinion expressed therein that "[b]y virtue of said provision the reorganization of the Bureau of Customs under Executive Order No. 127 may continue even after the ratification of this constitution and career civil service employees may be separated from the service without cause as a result of such reorganization" 74 is in the nature of an obiter dictum. We dismissed Jose's petition 75 primarily because it was "clearly premature, speculative, and purely anticipatory, based merely on newspaper reports which do not show any direct or threatened injury," 76 it appearing that the reorganization of the Bureau of Customs had not been, then, set in motion. Jose therefore had no cause for complaint, which was enough basis to dismiss the petition. The remark anent separation "without cause" was therefore not necessary for the disposition of the case. In Morales v. Parades,77 it was held that an obiter dictum "lacks the force of an adjudication and should not ordinarily be regarded as such."78

Secondly, Arroyo is an unsigned resolution while Palma Fernandez is a full-blown decision, although both are en banc cases. While a resolution of the Court is no less forceful than a decision, the latter has a special weight.

Thirdly, Palma-Fernandez v. De la Paz comes as a later doctrine. (Jose v. Arroyo was promulgated on August 11, 1987 while Palma-Fernandez was decided on August 31, 1987.) It is well-established that a later judgment supersedes a prior one in case of an inconsistency.

As we have suggested, the transitory provisions of the 1987 Constitution allude to two stages of the reorganization, the first stage being the reorganization under Proclamation No. 3 — which had already been consummated — the second stage being that adverted to in the transitory provisions themselves — which is underway. Hence, when we spoke, in Arroyo, of reorganization after the effectivity of the new Constitution, we referred to the second stage of the reorganization. Accordingly, we cannot be said to have carried over reorganization under the Freedom Constitution to its 1987 counterpart.

Finally, Arroyo is not necessarily incompatible with Palma-Fernandez (or Esguerra).

As we have demonstrated, reorganization under the aegis of the 1987 Constitution is not as stern as reorganization under the prior Charter. Whereas the latter, sans the President's subsequently imposed constraints, envisioned a purgation, the same cannot be said of the reorganization inferred under the new Constitution because, precisely, the new Constitution seeks to usher in a democratic regime. But even if we concede ex gratia argumenti that Section 16 is an exception to due process and no-removal-"except for cause provided by law" principles enshrined in the very same 1987 Constitution, 79 which may possibly justify

removals "not for cause," there is no contradiction in terms here because, while the former Constitution left the axe to fall where it might, the present organic act requires that removals "not for cause" must be as a result of reorganization. As we observed, the Constitution does not provide for "automatic" vacancies. It must also pass the test of good faith — a test not obviously required under the revolutionary government formerly prevailing, but a test well-established in democratic societies and in this government under a democratic Charter.

When, therefore, Arroyo permitted a reorganization under Executive Order No. 127 after the ratification of the 1987 Constitution, Arroyo permitted a reorganization provided that it is done in good faith. Otherwise, security of tenure would be an insuperable implement. 80

Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. 81 As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal (in case of a dismissal) or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else but a separation or removal, is done for political reasons or purposely to defeat sty of tenure, or otherwise not in good faith, no valid "abolition' takes place and whatever "abolition' is done, is void ab initio. There is an invalid "abolition" as where there is merely a change of nomenclature of positions, 82 or where claims of economy are belied by the existence of ample funds. 83

It is to be stressed that by predisposing a reorganization to the yardstick of good faith, we are not, as a consequence, imposing a "cause" for restructuring. Retrenchment in the course of a reorganization in good faith is still removal "not for cause," if by "cause" we refer to "grounds" or conditions that call for disciplinary action.**

Good faith, as a component of a reorganization under a constitutional regime, is judged from the facts of each case. However, under Republic Act No. 6656, we are told:

SEC. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: (a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) Where an office is abolished and another performing substantially the same functions is created; (c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; (e) Where the removal violates the order of separation provided in Section 3 hereof. 84

It is in light hereof that we take up questions about Commissioner Mison's good faith, or lack of it.

Reorganization of the Bureau of Customs,Lack of Good Faith in. —

The Court finds that after February 2, 1987 no perceptible restructuring of the Customs hierarchy — except for the change of personnel — has occurred, which would have justified (an things being equal) the contested dismisses. The contention that the staffing pattern at the Bureau (which would have furnished a justification for a personnel movement) is the same s pattern prescribed by Section 34 of Executive Order No. 127 already prevailing when Commissioner Mison took over the Customs helm, has not been successfully contradicted 85 There is no showing that legitimate structural changes have been made — or a reorganization actually undertaken, for that matter — at the Bureau since Commissioner Mison assumed office, which would have validly prompted him to hire and fire employees. There can therefore be no actual reorganization to speak of, in the sense, say, of reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions, but a revamp of personnel pure and simple.

The records indeed show that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as of August 18, 1988. 86 This betrays a clear intent to "pack" the Bureau of Customs. He did so, furthermore, in defiance of the President's directive to halt further layoffs as a consequence of reorganization. 87 Finally, he was aware that layoffs should observe the procedure laid down by Executive Order No. 17.

We are not, of course, striking down Executive Order No. 127 for repugnancy to the Constitution. While the act is valid, still and all, the means with which it was implemented is not. 88

Executive Order No. 127, Specific Case of. —

With respect to Executive Order No. 127, Commissioner Mison submits that under Section 59 thereof, "[t]hose incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service." He submits that because the 394 removed personnel have not been "reappointed," they are considered terminated. To begin with, the

Commissioner's appointing power is subject to the provisions of Executive Order No. 39. Under Executive Order No. 39, the Commissioner of Customs may "appoint all Bureau personnel, except those appointed by the President." 89

Accordingly, with respect to Deputy Commissioners Cesar Dario and Vicente Feria, Jr., Commissioner Mison could not have validly terminated them, they being Presidential appointees.

Secondly, and as we have asserted, Section 59 has been rendered inoperative according to our holding in Palma-Fernandez.

That Customs employees, under Section 59 of Executive Order No. 127 had been on a mere holdover status cannot mean that the positions held by them had become vacant. In Palma-Fernandez, we said in no uncertain terms:

The argument that, on the basis of this provision, petitioner's term of office ended on 30 January 1987 and that she continued in the performance of her duties merely in a hold over capacity and could be transferred to another position without violating any of her legal rights, is untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate reorganization and would have lapsed on 25 February 1987 (under the Provisional Constitution), but advanced to February 2, 1987 when the 1987 Constitution became effective (De Leon. et al., vs. Hon. Benjamin B. Esquerra, et. al., G.R. No. 78059, 31 August 1987). After the said date the provisions of the latter on security of tenure govern. 90

It should be seen, finally, that we are not barring Commissioner Mison from carrying out a reorganization under the transitory provisions of the 1987 Constitution. But such a reorganization should be subject to the criterion of good faith.

Resume. —

In resume, we restate as follows:

1. The President could have validly removed government employees, elected or appointed, without cause but only before the effectivity of the 1987 Constitution on February 2, 1987 (De Leon v. Esguerra, supra; Palma-Fernandez vs. De la Paz, supra); in this connection, Section 59 (on non-reappointment of incumbents) of Executive Order No. 127 cannot be a basis for termination;

2. In such a case, dismissed employees shall be paid separation and retirement benefits or upon their option be given reemployment opportunities (CONST. [1987], art. XVIII, sec. 16; Rep. Act No. 6656, sec. 9);

3. From February 2, 1987, the State does not lose the right to reorganize the Government resulting in the separation of career civil service employees [CONST. (1987), supra] provided, that such a reorganization is made in good faith. (Rep. Act No. 6656, supra.)

G.R. No. 83737

This disposition also resolves G.R. No. 83737. As we have indicated, G.R. No. 83737 is a challenge to the validity of Republic Act No. 6656. In brief, it is argued that the Act, insofar as it strengthens security of tenure 91 and as far as it provides for a retroactive effect, 92 runs counter to the transitory provisions of the new Constitution on removals not for cause.

It can be seen that the Act, insofar as it provides for reinstatament of employees separated without "a valid cause and after due notice and hearing" 93 is not contrary to the transitory provisions of the new Constitution. The Court reiterates that although the Charter's transitory provisions mention separations "not for cause," separations thereunder must nevertheless be on account of a valid reorganization and which do not come about automatically. Otherwise, security of tenure may be invoked. Moreover, it can be seen that the statute itself recognizes removals without cause. However, it also acknowledges the possibility of the leadership using the artifice of reorganization to frustrate security of tenure. For this reason, it has installed safeguards. There is nothing unconstitutional about the Act.

We recognize the injury Commissioner Mison's replacements would sustain. We also commisserate with them. But our concern is the greater wrong inflicted on the dismissed employees on account of their regal separation from the civil service.

WHEREFORE, THE RESOLUTIONS OF THE CIVIL SERVICE COMMISSION, DATED JUNE 30, 1988, SEPTEMBER 20, 1988, NOVEMBER 16, 1988, INVOLVED IN G.R. NOS. 85310, 85335, AND 86241, AND MAY 8, 1989, INVOLVED IN G.R. NO. 85310, ARE AFFIRMED.

THE PETITIONS IN G.R. NOS. 81954, 81967, 82023, AND 85335 ARE GRANTED. THE PETITIONS IN G.R. NOS. 83737, 85310 AND 86241 ARE DISMISSED.

THE COMMISSIONER OF CUSTOMS IS ORDERED TO REINSTATE THE EMPLOYEES SEPARATED AS A RESULT OF HIS NOTICES DATED JANUARY 26, 1988.

THE EMPLOYEES WHOM COMMISSIONER MISON MAY HAVE APPOINTED AS REPLACEMENTS ARE ORDERED TO VACATE THEIR POSTS SUBJECT TO THE PAYMENT OF WHATEVER BENEFITS THAT MAY BE PROVIDED BY LAW.

NO COSTS.

IT IS SO ORDERED.

Gutierrez, Jr., Paras, Gancayco, Bidin, Cortes, Griñ;o-Aquino and Medialdea, JJ., concur.

Padilla, J., took no part.

 

 

Separate Opinions

CRUZ, J., concurring:

I concur with the majority view so ably presented by Mr. Justice Abraham F. Sarmiento. While additional comments may seem superfluous in view of the exhaustiveness of his ponencia, I nevertheless offer the following brief observations for whatever they may be worth.

Emphasizing Article XVII, Section 16 of the Constitution, the dissenting opinion considers the ongoing government reorganization valid because it is merely a continuation of the reorganization begun during the transition period. The reason for this conclusion is the phrase "and the reorganization following the ratification of the Constitution," that is to say, after February 2, 1987, appearing in the said provision. The consequence (and I hope I have not misread it) is that the present reorganization may still be undertaken with the same "absoluteness" that was allowed the revolutionary reorganization although the Freedom Constitution is no longer in force.

Reorganization of the government may be required by the legislature even independently of specific constitutional authorization, as in the case, for example, of R.A. No. 51 and B.P. No. 129. Being revolutionary in nature, the reorganization decreed by Article III of the Freedom Constitution was unlimited as to its method except only as it was later restricted by President Aquino herself through various issuances, particularly E.O. No. 17. But this reorganization, for all its permitted summariness, was not indefinite. Under Section 3 of the said Article III, it was allowed only up to February 29,1987 (which we advanced to February 2, 1987, when the new Constitution became effective).

The clear implication is that any government reorganization that may be undertaken thereafter must be authorized by the legislature only and may not be allowed the special liberties and protection enjoyed by the revolutionary reorganization. Otherwise, there would have been no necessity at all for the time limitation expressly prescribed by the Freedom Constitution.

I cannot accept the view that Section 16 is an authorization for the open-ended reorganization of the government "following the ratification of the Constitution." I read the provision as merely conferring benefits — deservedly or not — on persons separated from the government as a result of the reorganization of the government, whether undertaken during the transition period or as a result of a law passed thereafter. What the grants is privileges to the retirees, not power to the provision government. It is axiomatic that grants of power are not lightly inferred, especially if these impinge on individual rights, and I do not see why we should depart from this rule.

To hold that the present reorganization is a continuation of the one begun during the transition period is to recognize the theory of the public respondent that all officers and employees not separated earlier remain in a hold-over capacity only and so may be replaced at any time even without cause. That is a dangerous proposition that threatens the security and stability of every civil servant in the executive department. What is worse is that this situation may continue indefinitely as the claimed "progressive" reorganization has no limitation as to time.

Removal imports the forcible separation of the incumbent before the expiration of his term and can be done only for cause as provided by law. Contrary to common belief, a reorganization does not result in removal but in a different mode of terminating official relations known as abolition of the office (and the security of tenure attached thereto.) The erstwhile holder of the abolished office cannot claim he has been removed without cause in violation of his constitutional security of tenure. The reason is that the right itself has disappeared with the abolished office as an accessory following the principal. (Ocampo v. Sec. of Justice, 51 O.G. 147; De la Llana v. Alba, 112 SCRA 294; Manalang v. Quitoriano, 94 Phil. 903.)

This notwithstanding, the power to reorganize is not unlimited. It is essential that it be based on a valid purpose, such as the promotion of efficiency and economy in the government through a pruning of offices or the streamlining of their functions. (Cervantes v. Auditor-General, 91 Phil. 359.) Normally, a reorganization cannot be validly undertaken as a means of purging the undesirables for this would be a removal in disguise undertaken en masse to circumvent the constitutional requirement of legal

cause. (Eradication of graft and corruption was one of the expressed purposes of the revolutionary organization, but this was authorized by the Freedom Constitution itself.) In short, a reorganization, to be valid, must be done in good faith. (Urgelio v. Osmena, 9 SCRA 317; Cuneta v. Court of Appeals, 1 SCRA 663; Carino v. ACCFA, 18 SCRA 183.)

A mere recitation — no matter how lengthy — of the directives, guidelines, memoranda, etc. issued by the government and the action purportedly taken thereunder does not by itself prove good faith. We know only too well that these instructions, for all their noble and sterile purposes, are rarely followed in their actual implementation. The reality in this case, as the majority opinion has pointed out and as clearly established in the hearing we held, is that the supposed reorganization was undertaken with an eye not to achieving the avowed objectives but to accommodating new appointees at the expense of the dislodged petitioners. That was also the finding of the Civil Service Commission, to which we must accord a becoming respect as the constitutional office charged with the protection of the civil service from the evils of the spoils system.

The present administration deserves full support in its desire to improve the civil service, but this objective must be pursued in a manner consistent with the Constitution. This praiseworthy purpose cannot be accomplished by an indiscriminate reorganization that will sweep in its wake the innocent along with the redundant and inept, for the benefit of the current favorites.

MELENCIO-HERRERA, J., dissenting:

The historical underpinnings of Government efforts at reorganization hark back to the people power phenomenon of 22-24 February 1986, and Proclamation No. 1 of President Corazon C. Aquino, issued on 25 February 1986, stating in no uncertain terms that "the people expect a reorganization of government." In its wake followed Executive Order No. 5, issued on 12 March 1986, "Creating a Presidential Commission on Government Reorganization," with the following relevant provisions:

WHEREAS, there is need to effect the necessary and proper changes in the organizational and functional structures of the national and local governments, its agencies and instrumentalities, including government-owned and controlled corporations and their subsidiaries, in order to promote economy, efficiency and effectiveness in the delivery of public services

xxx         xxx         xxx

Section 2. The functional jurisdiction of the PCGR shall encompass, as necessary, the reorganization of the national and local governments, its agencies and instrumentalities including government-owned or controlled corporations and their subsidiaries.

xxx         xxx         xxx (Emphasis supplied)

Succeeding it was Proclamation No. 3, dated 25 March 1986, also known as the Freedom Constitution, declaring, in part, in its Preamble as follows:

WHEREAS, the direct mandate of the people as manifested by their extraordinary action demands the complete reorganization of the government, ... (Emphasis supplied)

and pertinently providing:

ARTICLE II

Section I

xxx         xxx         xxx

The President shall give priority to measures to achieve the mandate of the people to:

(a) Completely reorganize the government and eradicate unjust and oppressive structures, and all iniquitous vestiges of the previous regime;" (Emphasis supplied)

xxx         xxx         xxx

ARTICLE III — GOVERNMENT REORGANIZATION

Section 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986.

Section 3. Any public office or employee separated from the service as a result of the reorganization effected under this Proclamation shall, if entitled under the laws then in force, receive the retirement and other benefits accruing thereunder. (Emphasis ours)

On 28 May 1986, Executive Order No. 17 was issued "Prescribing Rules and Regulations for the Implementation of Section 2, Article III of the Freedom Constitution' providing, inter alia, as follows:

Section 1. In the course of implementing Article III, Section 2 of the Freedom Constitution, the Head of each Ministry shall see to it that the separation or replacement of officers and employees is made only for justifiable reasons, to prevent indiscriminate dismissal, of personnel in the career civil service whose qualifications and performance meet the standards of public service of the New Government.

xxx         xxx         xxx

The Ministry concerned shall adopt its own rules and procedures for the review and assessment of its own personnel, including the identification of sensitive positions which require more rigid assessment of the incumbents, and shall complete such review/assessment as expeditiously as possible but not later than February 24, 1987 to prevent undue demoralization in the public service.

Section 2. The Ministry Head concerned, on the basis of such review and assessment shall determine who shall be separated from the service. Thereafter, he shall issue to the official or employee concerned a notice of separation which shall indicate therein the reason/s or ground /s for such separation and the fact that the separated official or employee has the right to file a petition for reconsideration pursuant to this Order. Separation from the service shall be effective upon receipt of such notice, either personally by the official or employee concerned or on his behalf by a person of sufficient discretion.

Section 3. The following shall be the grounds for separation/ replacement of personnel:

1. Existence of a case for summary dismissal pursuant to Section 40 of the Civil Service Law;

2. Existence of a probable cause for violation of the Anti-Graft and Corrupt Practice Act as determined by the Ministry Head concerned;

3. Gross incompetence or inefficiency in the discharge of functions;

4. Misuse of Public office for partisan political purposes;

5. Any other analogous ground showing that the incumbent is unfit to remain in the service or his separation/replacement is in the interest of the service.

Section 11. This Executive Order shall not apply to elective officials or those designated to replace them, presidential appointees, casual and contractual employees, or officials and employees removed pursuant to disciplinary proceedings under the Civil Service Law and rules, and to those laid off as a result of the reorganization undertaken pursuant to Executive Order No. 5. (Emphasis supplied)

On 6 August 1986, Executive Order No. 39 was issued by the President "Enlarging the Powers and Functions of the Commissioner of Customs", as follows:

xxx         xxx         xxx

SECTION 1. In addition to the powers and functions of the Commissioner of Customs, he is hereby authorized, subject to the Civil Service Law and its implementing rules and regulations:

a) To appoint all Bureau personnel, except those appointed by the President;

b) To discipline, suspend, dismiss or otherwise penalize erring Bureau officers and employees;

c) To act on all matters pertaining to promotion, transfer, detail, reassignment, reinstatement, reemployment and other personnel action, involving officers and employees of the Bureau of Customs.

xxx         xxx         xxx

On 30 January 1987, Executive Order No. 127 was issued "Reorganizing the Ministry of Finance." Similar Orders, approximately thirteen (13) in all, 1 were issued in respect of the other executive departments. The relevant provisions relative to the Bureau of Customs read:

RECALLING that the reorganization of the government is mandated expressly in Article II, Section l(a) and Article III of the Freedom Constitution;

HAVING IN MIND that pursuant to Executive Order No. 5 (1986), it is directed that the necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public services;

BELIEVING that it is necessary to reorganize the Ministry of Finance to make it more capable and responsive, organizationally and functionally, in its primary mandate of judiciously generating and efficiently managing the financial resources of the Government, its subdivisions and instrumentalities in order to attain the socio-economic objectives of the national development programs.

xxx         xxx         xxx

SEC. 2. Reorganization. — The Ministry of Finance, hereinafter referred to as Ministry, is hereby reorganized, structurally and functionally, in accordance with the provisions of this Executive Order.

SEC. 33. Bureau of Customs.

... Executive Order No. 39 dated 6 August 1986 which grants autonomy to the Commissioner of Customs in matters of appointment and discipline of Customs personnel shall remain in effect.

SEC. 55. Abolition of Units Integral to Ministry. — All units not included in the structural organization as herein provided and all positions thereof are hereby deemed abolished. ... Their personnel shall be entitled to the benefits provided in the second paragraph of Section 59 hereof.

SEC. 59. New Structure and Pattern. — Upon approval of this Executive Order, the officers and employees of the Ministry shall, in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to executive Order No. 17 (1986) or article III of the Freedom Constitution.

The new position structure and staffing pattern of the ministry shall be approved and prescribed by the Minister within one hundred twenty (120) days from the approval of this Executive Order and the authorized positions created hereunder shall be filled with regular appointments by him or by the President, as the case may be. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. Those separated from the service shall receive the retirement benefits to which they may be entitled under the existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one month basic salary for every year of service or the equivalent nearest fraction thereof favorable to them on the basis of highest salary received, but in no case shall such payment exceed the equivalent of 12 months salary.

No court or administrative body shall issue any writ or preliminary junction or restraining order to enjoin the separation/replacement of any officer or employee affected under this Executive Order.

Section 67 — All laws, ordinances, rules, regulations and other issuances or parts thereof, which are inconsistent with this Executive Order, are hereby repealed or modified accordingly.

xxx         xxx         xxx (Emphasis ours)

On 2 February 1987, the present Constitution took effect (De Leon, et al., vs. Esguerra, G.R. No. 78059, August 31, 1987153 SCRA 602). Reorganization in the Government service pursuant to Proclamation No. 3, supra, was provided for in its Section 16, Article XVIII entitled Transitory Provisions, reading:

Section 16. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, or agencies, including government owned or controlled corporations and their subsidiaries. Ms provision also applies to career officers whose resignation, tendered in line with the existing policy, has been accepted.

On 24 May 1987 the then Commissioner of Customs, Alexander A. Padilla, transmitted to the Department of Finance for approval the proposed "position structure and staffing pattern" of the Bureau of Customs. Said Department gave its imprimatur. Thereafter, the staffing pattern was transmitted to and approved by the Department of Budget and Management on 7 September 1987 for implementation. Under the old staffing pattern, there were 7,302 positions while under the new staffing pattern, there are 6,530 positions CSC Resolution in CSC Case No. 1, dated 20 September 1988, pp. 3-4).

On 22 September 1987, Salvador M. Mison assumed office as Commissioner of Customs.

On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of Reorganization Executive Orders" was issued reading, insofar as revelant to these cases, as follows:

It is my concern that ongoing process of government reorganization be conducted in a manner that is expeditious, as well as sensitive to the dislocating consequences arising from specific personnel decisions.

The entire process of reorganization, and in particular the process of separation from service, must be carried out in the most humane manner possible.

For this purpose, the following guidelines shall be strictly followed:

1. By October 21, 1987, all employees covered by the Executive Orders for each agency on reorganization shall be:

a. informed of their reappointment or

b. offered another position in the same department/ agency or

c. informed of their termination.

2. In the event of an offer for a lower position, there will be no reduction in the salary.

xxx         xxx         xxx

4. Each department/agency shall constitute a Reorganization Appeals Board at the central office, on or before October 21, 1987, to review or reconsider appeals or complaints relative to reorganization. All cases submitted to the Boards shall be resolved subject to the following guidelines:

a. publication or posting of the appeal procedure promulgated by the Department Secretary;

b. adherence to due process;

c. disposition within 30 days from submission of the case;

d written notification of the action taken and the grounds thereof.

Action by the Appeals Review Board does not preclude appeal to the Civil Service Commission.

5. Placement in the new staffing pattern of incumbent personnel shall be completed prior to the hiring of new personnel, if any.

xxx         xxx         xxx (Emphasis ours)

On 25 November 1987 Commissioner Mison wrote the President requesting a grace period until the end of February 1988 within which to completely undertake the reorganization of the Bureau of Customs pursuant to Executive Order No. 127 dated 30 January 1987. Said request was granted in a letter-reply by Executive Secretary Catalino Macaraig, Jr., dated 22 December 1987.

On 6 January 1988, within the extended period requested, Bureau of Customs Memorandum "Re: Guidelines on the Implementation of Reorganization Executive Orders" was issued in the same tenor as the Malacanang Memorandum of 2 October 1987, providing inter alia:

To effectively implement the reorganization at the Bureau of Customs, particularly in the selection and placement of personnel, and insure that the best qualified and most competent personnel in the career service are retained, the following guidelines are hereby prescribed for the guidance of all concerned

1. By February 28, 1988 all employees covered by Executive Order No. 127 and the grace period extended to the Bureau of Customs by the President of the Philippines on reorganization shall be:

a. informed of their reappointment, or

b. offered another position in the same department or agency or

c. informed of their termination.

2. In the event of termination, the employee shall:

a. be included in a consolidated list compiled by the Civil Service Commission. All departments who are recruiting shall give preference to the employees in the list; and

b. continue to receive salary and benefits until February 28, 1988, and

c. be guaranteed the release of separation benefits within 45 days from termination and in no case later than June 15, 1988.

xxx         xxx         xxx (Emphasis supplied)

It is to be noted that paragraph 1 above and its sub-sections reproduced verbatim the Malacanang Guidelines of 2 October 1987 in that the employees concerned were merely to be informed of their termination.

On 28 January 1988 Commissioner Mison addressed identical letters of termination to Bureau of Customs officers and employees effective on 28 February 1988.

As of 18 August 1988, Commissioner Mison appointed five hundred twenty-two (522) officials and employees of the Bureau of Customs (CSC Resolution in CSC Case No. 1, dated 20 September 1988, p. 6). In fact, in a letter dated 27 January 1988, Commissioner Mison recommended Jose M. Balde for appointment to President Aquino as one of three (3) Deputy Commissioners under Executive Order No. 127.

In the interim, during the pendency of these Petitions, Republic Act No. 6656, entitled "An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization" was passed by Congress on 9 June 1988. The President signed it into law on 10 June 1988 and the statute took effect on 29 June 1988.

On 20 June 1988 Motions were filed, in these cases pending before this Court, invoking the provisions of Republic Act No. 6656. The relevant provisions thereof read:

SECTION 1. It is hereby declared the policy of the State to protect the security of tenure of civil service officers and employees in the reorganization of the various agencies of the National government ....

SECTION 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:

(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned;

(b) Where an office is abolished and another performing substantially the same functions is created;

(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;

(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices;

(e) Where the removal violates the order of separation provided in Section 3 hereof.

xxx         xxx         xxx

SECTION 9. All officers and employees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act, shall be ordered reinstated or reappointed as the case may be without loss of seniority and shall be entitled to full pay for the period of separation. Unless also separated for cause, all officers and employees, including casuals and temporary employees, who have been separated pursuant to reorganization shall, if entitled thereto, be paid the appropriate separation pay and retirement and other benefits under existing laws within ninety (90) days from the date of the effectivity of their separation or from the date of the receipt of the resolution of their appeals as the case may be: Provided, That application for clearance has been filed and no action thereon has been made by the corresponding department or agency. Those who are not entitled to said benefits shall be paid a separation gratuity in the amount equivalent to one (1) month salary for every year of service. Such separation pay and retirement benefits shall have priority of payment out of the savings of the department or agency concerned.

xxx         xxx         xxx

SECTION 11. The executive branch of the government shall implement reorganization schemes within a specified period of time authorized by law.

In the case of the 1987 reorganization of the executive branch, all departments and agencies which are authorized by executive orders promulgated by the President to reorganize shall have ninety (90) days from the approval of this Act within which to implement their respective reorganization plans in accordance with the provisions of this Act.

xxx         xxx         xxx

SECTION 13. All laws, rules and regulations or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly. The rights and benefits under this Act shall be retroactive as of June 30, 1987.

xxx xxx xxx (Emphasis ours)

Given the foregoing statutory backdrop, the issues can now be addressed.

Scope of Section 16, Art. XVIII, 1987 Constitution

Crucial to the present controversy is the construction to be given to the abovementioned Constitutional provision (SECTION 16, for brevity), which speaks of.

Career civil service employees separated from the service not for cause

but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986

and the reorganization following the ratification of this Constitution ... (paragraphing supplied).

To our minds, SECTION 16 clearly recognizes (1) the reorganization authorized by Proclamation No. 3; (2) that such separation is NOT FOR CAUSE but as a result of the reorganization pursuant to said Proclamation; and (3) that the reorganization pursuant to Proclamation No. 3 may be continued even after the ratification of the 1987 Constitution during the transition period.

Separation NOT FOR CAUSE

The canon for the removal or suspension of a civil service officer or employee is that it must be FOR CAUSE. That means a guarantee of both procedural and substantive due process. Basically, procedural due process would require that suspension or dismissal come only after notice and hearing. Substantive due process would require that suspension or dismissal be 'for cause'." Bernas The Constitution of the Republic of the Philippines: A Commentary, Vol. II, First Edition, 1988, p. 334)

The guarantee of removal FOR CAUSE is enshrined in Article IX-B, Section 2(3) of the 1987 Constitution, which states that 'No officer or employee of the civil service shall be removed or suspended except FOR CAUSE provided by law."

There can be no question then as to the meaning of the phrase FOR CAUSE. It simply means the observance of both procedural and substantive due process in cases of removal of officers or employees of the civil service. When SECTION 16 speaks, therefore, of separation from the service NOT FOR CAUSE, it can only mean the diametrical opposite. The constitutional intent to exempt the separation of civil service employees pursuant to Proclamation No. 3 from the operation of Article IX-B, Section 2(3), becomes readily apparent. A distinction is explicitly made between removal FOR CAUSE, which as aforestated, requires due process, and dismissal NOT FOR CAUSE, which implies that the latter is not bound by the "fetters' of due process.

It is obviously for that reason that Section 16 grants separation pay and retirement benefits to those separated NOT FOR CAUSE but as a result of the reorganization precisely to soften the impact of the non-observance of due process. "What is envisioned in Section 16 is not a remedy for arbitrary removal of civil servants enjoying security of tenure but some form of relief for members of the career civil service who may have been or may be legally but involuntarily 'reorganized out' of the service or may have voluntarily resigned pursuant to the reorganization policy" (ibid., p. 615).

Reorganization Pursuant to Proclamation No. 3 to Continue Transitorily Even After Ratification

By its very context, SECTION 16 envisages the continuance of the reorganization pursuant to Proclamation No. 3 even after ratification of the Constitution and during the transition period. The two [2] stages contemplated, namely, (1) the stage before and (2) after ratification, refer to the same nature of separation "NOT FOR CAUSE but as a result of Proclamation No. 3." No valid reason has been advanced for a different treatment after ratification as the majority opines i.e., that separation NOT FOR CAUSE is allowed before ratification but that, thereafter, separation can only be FOR CAUSE.

A fundamental principle of Constitutional construction is to assure the realization of the purpose of the framers of the organic law and of the people who adopted it.

That the reorganization commenced pursuant to Proclamation No. 3 was envisioned to continue even after the ratification of the 1987 Constitution, at least transitorily, is evident from the intent of its authors discoverable from their deliberations held on 3 October 1986 and evincing their awareness that such reorganization had not as yet been fully implemented. Thus:

Mr. PADILLA. Mr. Presiding Officer, on lines 2 to 5 is the clause 'pursuant to the provisions of Article III of Proclamation No. 3, issued on March 25, 1986, and the reorganization.' Are those words necessary? Can we not just say 'result of the reorganization following the ratification of this Constitution'? In other words, must we make specific reference to Proclamation No. 3?

Mr. SUAREZ. Yes. I think the committee feels that is necessary, because in truth there has been a reorganization by virtue of Proclamation No. 3. In other words, there are two stages of reorganization covered by this section.

Mr. PADILIA. I understand there is a reorganization committee headed by a minister?

Mr. SUAREZ. Philippine Commission on Government Reorganization.

Mr. PADILLA. But whether that has already been implemented or not, I do not believe in it. There has been a plan, but I do not think it has been implemented. If we want to include any previous reorganization after or before the ratification, why do we not just say reorganization before or after the ratification' to simplify the provision and eliminate two-and-a-half sentences that may not be necessary? And as a result of the reorganization, if the committee feels there has been reorganization before ratification and there be reorganization after, we just say 'before or after the ratification of this Constitution.

Mr. SUAREZ. Something like this as a result of the reorganization effected before or after the ratification of the Constitution on the understanding, with the statement into the records, that this would be applicable to those reorganized out pursuant to the Freedom Constitution also.

Mr. PADILLA. That is understood if there has been a reorganization before the ratification or a reorganization after the ratification." (RECORDS of the Constitutional Commission, Vol. 5, p. 416) (Emphasis provided)

It should also be recalled that the deadline for the reorganization under Proclamation No. 3 was "one year from February 25, 1986" (Article III, Section 2), or up to February 24, 1987. Executive Order No. 17 itself provided that the review/assessment of personnel be completed "not later than February 24, 1987." But, confronted with the reality of the ratification of the Constitution before that deadline without reorganization having been completed, there was need for a provision allowing for its continuance even after ratification and until completed. It was also to beat that deadline that EO 127 and similar issuances, providing for the reorganization of departments of government, were all dated 30 January 1987 or prior to the plebiscite held on 2 February 1987. The intent to continue and complete the reorganizations started is self- evident in SECTION 16.

In Jose vs. Arroyo, et al. (G.R. No. 78435, August 11, 1987), which was a Petition for certiorari and Prohibition to enjoin the implementation of Executive Order No. 127, we recognized that the reorganization pursuant to Proclamation No. 3 as mandated by SECTION 16, was to continue even after ratification when we stated:

The contention of petitioner that EO No. 127 is violative of the provision of the 1987 Constitution guaranteeing career civil service employees security of tenure overlooks the provision of Section 16, Art. XVIII (Transitory Provisions) which explicitly authorizes the removal of career civil service employees not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of the Constitution. By virtue of said provision, the reorganization of the Bureau of Customs under Executive Order No. 127 may continue even after the ratification of this Constitution and career civil service employees may be separated from the service without cause as a result of such reorganization. (Emphasis ours)

With due respect to the majority, we disagree with its conclusion that the foregoing pronouncement is mere "obiter dictum."

An obiter dictum or dictum has been defined as a remark or opinion uttered, by the way. It is a statement of the court concerning a question which was not directly before it (In re Hess 23 A. 2d. 298, 301, 20 N.J. Misc. 12).lâwphî1.ñèt It is language unnecessary to a decision, (a) ruling on an issue not raised, or (an) opinion of a judge which does not embody the resolution or determination of the court, and is made without argument or full consideration of the point (Lawson v. US, 176 F2d 49, 51, 85 U.S. App. D.C. 167). It is an expression of opinion by the court or judge on a collateral question not directly involved, (Crescent Ring Co. v. Travelers Indemnity Co. 132 A. 106, 107, 102 N.J. Law 85) or not necessary for the decision Du Bell v. Union Central Life Ins. Co., 29, So. 2d 709, 712; 211 La. 167).

In the case at bar, however, directly involved and squarely before the Court was the issue of whether EO 127 violates Section 2(3) of Article IX-B of the 1987 Constitution against removal of civil service employees except for cause." Petitioner batted for the affirmative of the proposition, while respondents contended that "removal of civil service employees without cause is allowed not only under the Provisional Constitution but also under the 1987 Constitution if the same is made pursuant to a reorganization after the ratification of the Constitution."

It may be that the Court dismissed that Petition for being premature, speculative and purely anticipatory" inasmuch as petitioner therein had "not received any communication terminating or threatening to terminate his services." But that was only one consideration. The Court still proceeded to decide all the issues adversatively contested by the parties, namely "1) that the expiration date of February 25, 1 987 fixed by Section 2 of Proclamation No. 3 on which said Executive order is based had already lapsed; 2) that the Executive Order has not been published in the Official Gazette as required by Article 2 of the Civil Code and Section 1 1 of the Revised Administrative Code; and 3) that its enforcement violates Section 2(3) of Article IX B of the 1987 Constitution against removal of civil service employees except for cause."

The ruling of the Court, therefore, on the Constitutional issues presented, particularly, the lapse of the period mandated by Proclamation No. 3, and the validity of EO 127, cannot be said to be mere "obiter." They were ultimate issues directly before the Court, expressly decided in the course of the consideration of the case, so that any resolution thereon must be considered as authoritative precedent, and not a mere dictum (See Valli v. US, 94 F2d 687 certiorari granted 58 S. Ct. 760, 303 U.S. 82 L. Ed. 1092; See also Weedin v. Tayokichi Yamada 4 F. (2d) 455). Such resolution would not lose its value as a precedent just because the disposition of the case was also made on some other ground.

.....And this rule applies as to all pertinent questions although only incidentally involved, which are presented and decided in the regular course of the consideration of the case, and lead up to the final conclusion (Northern Pac. Ry Co. v. Baker, D.C. Wash., 3 F. Suppl. 1; See also Wisconsin Power and Light Co. v. City of Beloit 254 NW 119; Chase v. American Cartage Co. 186 N.W. 598; City of Detroit, et al. v. Public Utilities Comm. 286 N.W. 368). Accordingly, a point expressly decided does not lose its value as a precedent because the disposition of the case is made on some other ground. (Wagner v. Com Products Refining Co. D.C. N.J. 28 F 2d 617) Where a case presents two or more points, any one of which is sufficient to determine the ultimate issue, but the court actually decides all such points, the case is an authoritative precedent as to every point decided, and none of such points can be regarded as having merely the status of a dictum (See U.S. Title Insurance and Trust Co., Cal., 44 S. Ct. 621, 265 U.S. 472, 68 L. Ed. 1110; Van Dyke v. Parker 83 F. (2d) 35) and one point should not be denied authority merely because another point was more dwelt on and more fully argued and considered. (Richmond Screw Anchor Co. v. U.S. 48 S. Ct. 194, 275 U.S. 331, 72 L. Ed. 303)"

It is true that in Palma-Fernandez vs. de la Paz (G.R. No. 78946, April 15, 1986, 160 SCRA 751), we had stated:

The argument that, on the basis of this provision (Section 26 of Executive Order No. 119, or the 'Reorganization Act of the Ministry of Health'), petitioner's term of office ended on 30 January 1987 and that she continued in the performance of her duties merely in a hold-over capacity and could be transferred to another position without violating any of her legal rights, is untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate reorganization and would have lapsed on 25 February 1987 (under the Provisional Constitution), but advanced to 2 February 1987 when the 1987 Constitution became effective (De Leon, et al., vs. Hon. Esguerra, et al., G.R. No. 78059, 31 August 1987, 153 SCRA 602). After the d date the provisions of the latter on security of tenure govern.

The factual situation in the two cases, however, radically differ. In the cited case, Dra. Palma-Fernandez, the petitioner, had already been extended a permanent appointment as Assistant Director for Professional Services of the East Avenue Medical Center but was still being transferred by the Medical Center Chief to the Research Office against her consent. Separation from the service as a result of reorganization was not involved. The question then arose as to whether the latter official had the authority to transfer or whether the power to appoint and remove subordinate officers and employees was lodged in the Secretary of Health. Related to that issue was the vital one of whether or not her transfer, effected on 29 May 1987, was tantamount to a removal without cause. Significant, too, is the fact that the transfer was basically made "in the interest of the service" pursuant to Section

24(c) of PD No. 807, or the Civil Service Decree, and not because she was being reorganized out by virtue of EO 119 or the "Reorganization Act of the Ministry of Health," although the said Act was invoked after the fact. And so it was that SECTION 16 was never mentioned, much less invoked in the Palma-Fernandez case.

Finally, on this point, it is inaccurate for the majority to state that there were no reorganization orders after ratification. There were, namely, EO 181 (Reorganization Act of the Civil Service Commission), June 1, 1987; EO 193 (Reorganization Act of the Office of Energy Affairs), June 10, 1987; EO 230 (Reorganization Act of NEDA), July 22, 1987; EO 262 (Reorganization Act of the Department of Local Government), July 25, 1987; EO 297 (Reorganization Act of the Office of the Press Secretary), July 25, 1987.

The Element of Good Faith

The majority concedes that reorganization can be undertaken provided it be in good faith but concludes that Commissioner Mison was not in good faith.

The aforesaid conclusion is contradicted by the records.

Executive Order No. 127, dated 30 January 1987, specifically authorized the reorganization of the Bureau of Customs "structurally and functionally" and provided for the abolition of all units and positions thereof not included in the structural organization S election 55).

As stated heretofore, it was the former Commissioner of Customs, Alexander A. Padilla who, on 24 May 1987, transmitted to the Department of Finance for approval the proposed "position structure and staffing pattern" of the Bureau of Customs. This was approved by the Department of Finance. Thereafter, it was transmitted to and approved by the Department of Budget and Management on 7 September 1987 for implementation. Under the old staffing pattern, there were 7,302 positions while under the new staffing pattern, there are 6,530 positions.

On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of Reorganization Executive Orders" provided:

By October 21, 1987, all employees covered by the Executive orders for each agency on reorganization shall be:

a. informed of their reappointment, or

b. offered another position in the same department or agency, or

c. informed of their termination. (emphasis supplied)

On 25 November 1987 Commissioner Mison asked for and was granted by the President an extension up to February 1988 within which to completely undertake the reorganization of the Bureau of Customs.

On 6 January 1988, he issued Bureau of Customs Memorandum "Re Guidelines on the Implementation of Reorganization Executive Orders" reiterating the above- quoted portion of the Malacanang Memorandum of 2 October 1987. Pursuant thereto, on 28 January 1988, Commissioner Mison addressed uniform letters of termination to the employees listed on pages 15, 16 and 17 of the majority opinion, effective on 28 February 1988, within the extended period granted.

The records further show that upon Commissioner Mison's official inquiry, Secretary of Justice Sedfrey A. Ordoñ;ez, rendered the following Opinion:

. . . It is believed that customs employees who are reorganized out in the course of the implementation of E.O. No. 127 (reorganizing the Department of Finance) need not be informed of the nature and cause of their separation from the service. It is enough that they be 'informed of their termination' pursuant to section 1(c) of the Memorandum dated October 2, 1987 of President Aquino, which reads:

1. By October 21, 1987, all employees covered by the Executive orders for each agency on reorganization shall be:

xxx         xxx         xxx

c) Informed of their terminations.

The constitutional mandate that 'no officer or employee of the civil service shall be renewed or suspended except for cause as provided by law' (Sec. 2(4) (sic), Article IX-B of the 1987 Constitution) does not apply to employees who are separated from office as a result of the reorganization of that Bureau as directed in Executive Order No. 127.

xxx         xxx         xxx

Regarding your (third) query, the issue as to the constitutionality of Executive Order No. 127 is set at rest, after the Supreme Court resolved to dismiss the petition for certiorari questioning its enforceability, for lack of merit (see Jose vs. Arroyo, et al., supra). (Opinion No. 41, s. 1988, March 3, 1988) (Emphasis supplied)

The former Chairman of the Civil Service Commission, Celerina G. Gotladera likewise periodically consulted by Commissioner Mison, also expressed the opinion that "it is not a prerequisite prior to the separation of an employee pursuant to reorganization that he be administratively charged." (Annex 16, p. 411, Rollo, G.R. No. 85310)

Moreover, the records show that the final selection and placement of personnel was done by a Placement Committee, one of whose members is the Head of the Civil Service Commission Field Office, namely, Mrs. Purificacion Cuerdo The appointment of employees made by Commissioner Mison was based on the list approved by said Placement Committee.

But the majority further faults Mison for defying the President's directive to halt further layoffs as a consequence of reorganization, citing OP Memo of 14 October 1987, reading:

Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that there will be no further layoffs this year of personnel as a result of the government reorganization. (p. 45, Decision)

The foregoing, however, must be deemed superseded by later developments, namely, the grant to Commissioner Mison by the President on 22 December 1987 of a grace period until the end of February 1988 within which to completely undertake the reorganization of the Bureau of Customs, which was, in fact, accomplished by 28 February 1988.

To further show lack of good faith, the majority states that Commissioner Mison failed to observe the procedure laid down by EO 17, supra, directing inter alia that a notice of separation be issued to an employee to be terminated indicating therein the reason/s or ground/s for such separation. That requirement, however, does not appear in Section 59 of EO 127, which provides on the contrary "that those incumbents whose positions are not included in the new position structure and staffing pattern of the Ministry or who are not reappointed shall be deemed separated from the service." The right granted by EO 17 to an employee to be informed of the ground for his separation must be deemed to have been revoked by the repealing clause of EO 127 (Section 67) providing that "all laws, ordinances or parts thereof, which are inconsistent with this Executive Order, are hereby repealed and modified accordingly."

Moreover, Section 11 of EO 17 explicitly excepts from its coverage a reorganization pursuant to EO 5. Thus

The Executive Order shall not apply to elective officials or those designated to replace them, presidential appointees, casual and contractual employees, or officials and employees removed pursuant to desciplinary proceedings under the Civil Service law and rules, and to those laid off as a result of reorganization undertaken pursuant to Executive Order No. 5. (Emphasis ours)

That EO 127 was issued pursuant to or in implementation of EO 5, is shown by its introductory portion reading:

Recalling that the reorganization of the government is mandated expressly by Article II, Section 1 (a) and Article III of the Freedom Constitution;

Having in mind that pursuant to Executive order No. 5 (1986), it is directed that the necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public service; (Italics supplied)

Constitutionality of Republic Act No. 6656

The majority also relies on Republic Act No. 6656 entitled an "Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization," particularly Section 2 thereof, to test the good faith of Commissioner Mison.

We are of the view, however, that in providing for retroactivity in its Section 13, RA 6656 clashes frontally with SECTION 16.

1) SECTION 16 clearly recognizes that career service employees separated from the service by reason of the "complete reorganization of the government" pursuant to Proclamation No. 3 may be separated NOT FOR CAUSE. And yet, RA 6656 requires the exact opposite — separation FOR CAUSE. It would not be remiss to quote the provision again:

SEC. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: (a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) Where an office is abolished and another performing substantially the same functions is created; (c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; (e) Where the removal violates the order of separation provided in Section 3 hereof. (Republic Act No. 6156)

The standards laid down are the "traditional" criteria for removal of employees from the career service, e.g. valid cause, due notice and hearing, abolition of, or redundancy of offices. Proclamation No. 3, on the other hand, effectuates the "progressive" type of reorganization dictated by the exigencies of the historical and political upheaval at the time. The "traditional" type is limited in scope. It is concerned with the individual approach where the particular employee involved is charged administratively and where the requisites of notice and hearing have to be observed. The "progressive" kind of reorganization, on the other hand, is the collective way. It is wider in scope, and is the reorganization contemplated under SECTION 16.

2) By providing for reinstatement in its Section 9, RA 6656 adds a benefit not included in SECTION 16. The benefits granted by the latter provision to employees separated NOT FOR CAUSE but as a consequence of reorganization are "separation pay, retirement, and other benefits accruing to them under the laws of general application in force at the time of their separation." The benefit of reinstatement is not included. RA 6656, however, allows reinstatement. That it cannot do because under SECTION 16, it is not one of the laws "in force at the time of their separation."

The Constitution is the paramount law to which all laws must conform. It is from the Constitution that all statutes must derive their bearings. The legislative authority of the State must yield to the expression of the sovereign will. No statutory enactment can disregard the Charter from which it draws its own existence (Phil. Long Distance Telephone Co. v. Collector of Internal Revenue, 90 Phil. 674 [1952]). But, that is exactly what RA 6656 does in providing for retroactivity — it disregards and contravenes a Constitutional imperative. To save it, it should be applied and construed prospectively and not retroactively notwithstanding its explicit provision. Then, and only then, would it make good law.

Effects of Reorganization

To be sure, the reorganization could effect the tenure of members of the career service as defined in Section 5, Article IV of Presidential Decree No. 807, and may even result in the separation from the office of some meritorious employees. But even then, the greater good of the greatest number and the right of the citizenry to a good government, and as they themselves have mandated through the vehicle of Proclamation No. 3, provide the justification for the said injury to the individual. In terms of values, the interest of an employee to security of tenure must yield to the interest of the entire populace and to an efficient and honest government.

But a reorganized employee is not without rights. His right lies in his past services, the entitlement to which must be provided for by law. EO 127 provides for the same in its Section 59, and so does SECTION 16 when the latter specified that career civil service employees separated from the service not for cause:

shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries. This provision also applies to career officers whose resignation, tendered in line with the existing policy, has been accepted.

This is a reward for the employee's past service to the Government. But this is all There is no vested property right to be reemployed in a reorganized office.

The right to an office or to employment with government or any of its agencies is not a vested property right, and removal therefrom will not support the question of due process" Yantsin v. Aberdeen, 54 Wash 2d 787, 345 P 2d 178). A civil service employee does not have a constitutionally protected right to his position, which position is in the nature of a public office, political in character and held by way of grant or privilege extended by government; generally he has been held to have no property right or vested interest to which due process guaranties extend (See Taylor v. Beckham 178 U.S. 548, 44 L Ed. 1187; Angilly v. US CA2 NY 199 F 2d 642; People ex. rel. Baker v. Wilson, 39 III App 2d 443, 189 NE 2d 1; Kelliheller v. NY State Civil Service Com 21 Misc 2d 1034, 194 NYS 2d 89).

To ensure, however, that no meritorious employee has been separated from the service, there would be no harm, in fact, it could do a lot of good, if the Commissioner of Customs reviews the evaluation and placements he has so far made and sees to it that those terminated are included in a consolidated list to be given preference by departments who are recruiting (Section 2[a], BOC Memorandum, January 6,1988).lâwphî1.ñèt

Conclusion

Premises considered, and subject to the observation hereinabove made, it is our considered view that the separation from the service "NOT FOR CAUSE but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986" of the affected officers and employees of the Bureau of Customs should be UPHELD, and the Resolutions of the Civil Service Commission, dated 30 June 1988, 20 September 1988, and 16 November 1988 should be SET ASIDE for having been issued in grave abuse of discretion.

Republic Act No. 6656, in so far as it provides for retroactivity, should be declared UNCONSTITUTIONAL for being repugnant to the letter and spirit of Section 16, Article XVIII of the 1987 Constitution.

 

Fernan, C.J., Narvasa, Feliciano, Regalado, JJ., concur.

Separate Opinions

CRUZ, J., concurring:

I concur with the majority view so ably presented by Mr. Justice Abraham F. Sarmiento. While additional comments may seem superfluous in view of the exhaustiveness of his ponencia, I nevertheless offer the following brief observations for whatever they may be worth.

Emphasizing Article XVII, Section 16 of the Constitution, the dissenting opinion considers the ongoing government reorganization valid because it is merely a continuation of the reorganization begun during the transition period. The reason for this conclusion is the phrase "and the reorganization following the ratification of the Constitution," that is to say, after February 2, 1987, appearing in the said provision. The consequence (and I hope I have not misread it) is that the present reorganization may still be undertaken with the same "absoluteness" that was allowed the revolutionary reorganization although the Freedom Constitution is no longer in force.

Reorganization of the government may be required by the legislature even independently of specific constitutional authorization, as in the case, for example, of R.A. No. 51 and B.P. No. 129. Being revolutionary in nature, the reorganization decreed by Article III of the Freedom Constitution was unlimited as to its method except only as it was later restricted by President Aquino herself through various issuances, particularly E.O. No. 17. But this reorganization, for all its permitted summariness, was not indefinite. Under Section 3 of the said Article III, it was allowed only up to February 29,1987 (which we advanced to February 2, 1987, when the new Constitution became effective).

The clear implication is that any government reorganization that may be undertaken thereafter must be authorized by the legislature only and may not be allowed the special liberties and protection enjoyed by the revolutionary reorganization. Otherwise, there would have been no necessity at all for the time limitation expressly prescribed by the Freedom Constitution.

I cannot accept the view that Section 16 is an authorization for the open-ended reorganization of the government "following the ratification of the Constitution." I read the provision as merely conferring benefits — deservedly or not — on persons separated from the government as a result of the reorganization of the government, whether undertaken during the transition period or as a result of a law passed thereafter. What the grants is privileges to the retirees, not power to the provision government. It is axiomatic that grants of power are not lightly inferred, especially if these impinge on individual rights, and I do not see why we should depart from this rule.

To hold that the present reorganization is a continuation of the one begun during the transition period is to recognize the theory of the public respondent that all officers and employees not separated earlier remain in a hold-over capacity only and so may be replaced at any time even without cause. That is a dangerous proposition that threatens the security and stability of every civil servant in the executive department. What is worse is that this situation may continue indefinitely as the claimed "progressive" reorganization has no limitation as to time.

Removal imports the forcible separation of the incumbent before the expiration of his term and can be done only for cause as provided by law. Contrary to common belief, a reorganization does not result in removal but in a different mode of terminating official relations known as abolition of the office (and the security of tenure attached thereto.) The erstwhile holder of the abolished office cannot claim he has been removed without cause in violation of his constitutional security of tenure. The reason is that the right itself has disappeared with the abolished office as an accessory following the principal. (Ocampo v. Sec. of Justice, 51 O.G. 147; De la Llana v. Alba, 112 SCRA 294; Manalang v. Quitoriano, 94 Phil. 903.)

This notwithstanding, the power to reorganize is not unlimited. It is essential that it be based on a valid purpose, such as the promotion of efficiency and economy in the government through a pruning of offices or the streamlining of their functions.

(Cervantes v. Auditor-General, 91 Phil. 359.) Normally, a reorganization cannot be validly undertaken as a means of purging the undesirables for this would be a removal in disguise undertaken en masse to circumvent the constitutional requirement of legal cause. (Eradication of graft and corruption was one of the expressed purposes of the revolutionary organization, but this was authorized by the Freedom Constitution itself.) In short, a reorganization, to be valid, must be done in good faith. (Urgelio v. Osmena, 9 SCRA 317; Cuneta v. Court of Appeals, 1 SCRA 663; Carino v. ACCFA, 18 SCRA 183.)

A mere recitation — no matter how lengthy — of the directives, guidelines, memoranda, etc. issued by the government and the action purportedly taken thereunder does not by itself prove good faith. We know only too well that these instructions, for all their noble and sterile purposes, are rarely followed in their actual implementation. The reality in this case, as the majority opinion has pointed out and as clearly established in the hearing we held, is that the supposed reorganization was undertaken with an eye not to achieving the avowed objectives but to accommodating new appointees at the expense of the dislodged petitioners. That was also the finding of the Civil Service Commission, to which we must accord a becoming respect as the constitutional office charged with the protection of the civil service from the evils of the spoils system.

The present administration deserves full support in its desire to improve the civil service, but this objective must be pursued in a manner consistent with the Constitution. This praiseworthy purpose cannot be accomplished by an indiscriminate reorganization that will sweep in its wake the innocent along with the redundant and inept, for the benefit of the current favorites.

MELENCIO-HERRERA, J., dissenting:

The historical underpinnings of Government efforts at reorganization hark back to the people power phenomenon of 22-24 February 1986, and Proclamation No. 1 of President Corazon C. Aquino, issued on 25 February 1986, stating in no uncertain terms that "the people expect a reorganization of government." In its wake followed Executive Order No. 5, issued on 12 March 1986, "Creating a Presidential Commission on Government Reorganization," with the following relevant provisions:

WHEREAS, there is need to effect the necessary and proper changes in the organizational and functional structures of the national and local governments, its agencies and instrumentalities, including government-owned and controlled corporations and their subsidiaries, in order to promote economy, efficiency and effectiveness in the delivery of public services

xxx         xxx         xxx

Section 2. The functional jurisdiction of the PCGR shall encompass, as necessary, the reorganization of the national and local governments, its agencies and instrumentalities including government-owned or controlled corporations and their subsidiaries.

xxx         xxx         xxx (Emphasis supplied)

Succeeding it was Proclamation No. 3, dated 25 March 1986, also known as the Freedom Constitution, declaring, in part, in its Preamble as follows:

WHEREAS, the direct mandate of the people as manifested by their extraordinary action demands the complete reorganization of the government, ... (Emphasis supplied)

and pertinently providing:

ARTICLE II

Section I

xxx         xxx         xxx

The President shall give priority to measures to achieve the mandate of the people to:

(a) Completely reorganize the government and eradicate unjust and oppressive structures, and all iniquitous vestiges of the previous regime;" (Emphasis supplied)

xxx         xxx         xxx

ARTICLE III — GOVERNMENT REORGANIZATION

Section 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986.

Section 3. Any public office or employee separated from the service as a result of the reorganization effected under this Proclamation shall, if entitled under the laws then in force, receive the retirement and other benefits accruing thereunder. (Emphasis ours)

On 28 May 1986, Executive Order No. 17 was issued "Prescribing Rules and Regulations for the Implementation of Section 2, Article III of the Freedom Constitution' providing, inter alia, as follows:

Section 1. In the course of implementing Article III, Section 2 of the Freedom Constitution, the Head of each Ministry shall see to it that the separation or replacement of officers and employees is made only for justifiable reasons, to prevent indiscriminate dismissal, of personnel in the career civil service whose qualifications and performance meet the standards of public service of the New Government.

xxx         xxx         xxx

The Ministry concerned shall adopt its own rules and procedures for the review and assessment of its own personnel, including the identification of sensitive positions which require more rigid assessment of the incumbents, and shall complete such review/assessment as expeditiously as possible but not later than February 24, 1987 to prevent undue demoralization in the public service.

Section 2. The Ministry Head concerned, on the basis of such review and assessment shall determine who shall be separated from the service. Thereafter, he shall issue to the official or employee concerned a notice of separation which shall indicate therein the reason/s or ground /s for such separation and the fact that the separated official or employee has the right to file a petition for reconsideration pursuant to this Order. Separation from the service shall be effective upon receipt of such notice, either personally by the official or employee concerned or on his behalf by a person of sufficient discretion.

Section 3. The following shall be the grounds for separation/ replacement of personnel:

1. Existence of a case for summary dismissal pursuant to Section 40 of the Civil Service Law;

2. Existence of a probable cause for violation of the Anti-Graft and Corrupt Practice Act as determined by the Ministry Head concerned;

3. Gross incompetence or inefficiency in the discharge of functions;

4. Misuse of Public office for partisan political purposes;

5. Any other analogous ground showing that the incumbent is unfit to remain in the service or his separation/replacement is in the interest of the service.

Section 11. This Executive Order shall not apply to elective officials or those designated to replace them, presidential appointees, casual and contractual employees, or officials and employees removed pursuant to disciplinary proceedings under the Civil Service Law and rules, and to those laid off as a result of the reorganization undertaken pursuant to Executive Order No. 5. (Emphasis supplied)

On 6 August 1986, Executive Order No. 39 was issued by the President "Enlarging the Powers and Functions of the Commissioner of Customs", as follows:

xxx         xxx         xxx

SECTION 1. In addition to the powers and functions of the Commissioner of Customs, he is hereby authorized, subject to the Civil Service Law and its implementing rules and regulations:

a) To appoint all Bureau personnel, except those appointed by the President;

b) To discipline, suspend, dismiss or otherwise penalize erring Bureau officers and employees;

c) To act on all matters pertaining to promotion, transfer, detail, reassignment, reinstatement, reemployment and other personnel action, involving officers and employees of the Bureau of Customs.

xxx         xxx         xxx

On 30 January 1987, Executive Order No. 127 was issued "Reorganizing the Ministry of Finance." Similar Orders, approximately thirteen (13) in all, 1 were issued in respect of the other executive departments. The relevant provisions relative to the Bureau of Customs read:

RECALLING that the reorganization of the government is mandated expressly in Article II, Section l(a) and Article III of the Freedom Constitution;

HAVING IN MIND that pursuant to Executive Order No. 5 (1986), it is directed that the necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public services;

BELIEVING that it is necessary to reorganize the Ministry of Finance to make it more capable and responsive, organizationally and functionally, in its primary mandate of judiciously generating and efficiently managing the financial resources of the Government, its subdivisions and instrumentalities in order to attain the socio-economic objectives of the national development programs.

xxx         xxx         xxx

SEC. 2. Reorganization. — The Ministry of Finance, hereinafter referred to as Ministry, is hereby reorganized, structurally and functionally, in accordance with the provisions of this Executive Order.

SEC. 33. Bureau of Customs.

... Executive Order No. 39 dated 6 August 1986 which grants autonomy to the Commissioner of Customs in matters of appointment and discipline of Customs personnel shall remain in effect.

SEC. 55. Abolition of Units Integral to Ministry. — All units not included in the structural organization as herein provided and all positions thereof are hereby deemed abolished. ... Their personnel shall be entitled to the benefits provided in the second paragraph of Section 59 hereof.

SEC. 59. New Structure and Pattern. — Upon approval of this Executive Order, the officers and employees of the Ministry shall, in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to executive Order No. 17 (1986) or article III of the Freedom Constitution.

The new position structure and staffing pattern of the ministry shall be approved and prescribed by the Minister within one hundred twenty (120) days from the approval of this Executive Order and the authorized positions created hereunder shall be filled with regular appointments by him or by the President, as the case may be. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. Those separated from the service shall receive the retirement benefits to which they may be entitled under the existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one month basic salary for every year of service or the equivalent nearest fraction thereof favorable to them on the basis of highest salary received, but in no case shall such payment exceed the equivalent of 12 months salary.

No court or administrative body shall issue any writ or preliminary junction or restraining order to enjoin the separation/replacement of any officer or employee affected under this Executive Order.

Section 67 — All laws, ordinances, rules, regulations and other issuances or parts thereof, which are inconsistent with this Executive Order, are hereby repealed or modified accordingly.

xxx         xxx         xxx (Emphasis ours)

On 2 February 1987, the present Constitution took effect (De Leon, et al., vs. Esguerra, G.R. No. 78059, August 31, 1987153 SCRA 602). Reorganization in the Government service pursuant to Proclamation No. 3, supra, was provided for in its Section 16, Article XVIII entitled Transitory Provisions, reading:

Section 16. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of

this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, or agencies, including government owned or controlled corporations and their subsidiaries. Ms provision also applies to career officers whose resignation, tendered in line with the existing policy, has been accepted.

On 24 May 1987 the then Commissioner of Customs, Alexander A. Padilla, transmitted to the Department of Finance for approval the proposed "position structure and staffing pattern" of the Bureau of Customs. Said Department gave its imprimatur. Thereafter, the staffing pattern was transmitted to and approved by the Department of Budget and Management on 7 September 1987 for implementation. Under the old staffing pattern, there were 7,302 positions while under the new staffing pattern, there are 6,530 positions CSC Resolution in CSC Case No. 1, dated 20 September 1988, pp. 3-4).

On 22 September 1987, Salvador M. Mison assumed office as Commissioner of Customs.

On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of Reorganization Executive Orders" was issued reading, insofar as revelant to these cases, as follows:

It is my concern that ongoing process of government reorganization be conducted in a manner that is expeditious, as well as sensitive to the dislocating consequences arising from specific personnel decisions.

The entire process of reorganization, and in particular the process of separation from service, must be carried out in the most humane manner possible.

For this purpose, the following guidelines shall be strictly followed:

1. By October 21, 1987, all employees covered by the Executive Orders for each agency on reorganization shall be:

a. informed of their reappointment or

b. offered another position in the same department/ agency or

c. informed of their termination.

2. In the event of an offer for a lower position, there will be no reduction in the salary.

xxx         xxx         xxx

4. Each department/agency shall constitute a Reorganization Appeals Board at the central office, on or before October 21, 1987, to review or reconsider appeals or complaints relative to reorganization. All cases submitted to the Boards shall be resolved subject to the following guidelines:

a. publication or posting of the appeal procedure promulgated by the Department Secretary;

b. adherence to due process;

c. disposition within 30 days from submission of the case;

d written notification of the action taken and the grounds thereof.

Action by the Appeals Review Board does not preclude appeal to the Civil Service Commission.

5. Placement in the new staffing pattern of incumbent personnel shall be completed prior to the hiring of new personnel, if any.

xxx         xxx         xxx (Emphasis ours)

On 25 November 1987 Commissioner Mison wrote the President requesting a grace period until the end of February 1988 within which to completely undertake the reorganization of the Bureau of Customs pursuant to Executive Order No. 127 dated 30 January 1987. Said request was granted in a letter-reply by Executive Secretary Catalino Macaraig, Jr., dated 22 December 1987.

On 6 January 1988, within the extended period requested, Bureau of Customs Memorandum "Re: Guidelines on the Implementation of Reorganization Executive Orders" was issued in the same tenor as the Malacanang Memorandum of 2 October 1987, providing inter alia:

To effectively implement the reorganization at the Bureau of Customs, particularly in the selection and placement of personnel, and insure that the best qualified and most competent personnel in the career service are retained, the following guidelines are hereby prescribed for the guidance of all concerned

1. By February 28, 1988 all employees covered by Executive Order No. 127 and the grace period extended to the Bureau of Customs by the President of the Philippines on reorganization shall be:

a. informed of their reappointment, or

b. offered another position in the same department or agency or

c. informed of their termination.

2. In the event of termination, the employee shall:

a. be included in a consolidated list compiled by the Civil Service Commission. All departments who are recruiting shall give preference to the employees in the list; and

b. continue to receive salary and benefits until February 28, 1988, and

c. be guaranteed the release of separation benefits within 45 days from termination and in no case later than June 15, 1988.

xxx         xxx         xxx (Emphasis supplied)

It is to be noted that paragraph 1 above and its sub-sections reproduced verbatim the Malacanang Guidelines of 2 October 1987 in that the employees concerned were merely to be informed of their termination.

On 28 January 1988 Commissioner Mison addressed identical letters of termination to Bureau of Customs officers and employees effective on 28 February 1988.

As of 18 August 1988, Commissioner Mison appointed five hundred twenty-two (522) officials and employees of the Bureau of Customs (CSC Resolution in CSC Case No. 1, dated 20 September 1988, p. 6). In fact, in a letter dated 27 January 1988, Commissioner Mison recommended Jose M. Balde for appointment to President Aquino as one of three (3) Deputy Commissioners under Executive Order No. 127.

In the interim, during the pendency of these Petitions, Republic Act No. 6656, entitled "An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization" was passed by Congress on 9 June 1988. The President signed it into law on 10 June 1988 and the statute took effect on 29 June 1988.

On 20 June 1988 Motions were filed, in these cases pending before this Court, invoking the provisions of Republic Act No. 6656. The relevant provisions thereof read:

SECTION 1. It is hereby declared the policy of the State to protect the security of tenure of civil service officers and employees in the reorganization of the various agencies of the National government ....

SECTION 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:

(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned;

(b) Where an office is abolished and another performing substantially the same functions is created;

(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;

(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices;

(e) Where the removal violates the order of separation provided in Section 3 hereof.

xxx         xxx         xxx

SECTION 9. All officers and employees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act, shall be ordered reinstated or reappointed as the case may be without loss of seniority and shall be entitled to full pay for the period of separation. Unless also separated for cause, all officers and employees, including casuals and temporary employees, who have been separated pursuant to reorganization shall, if entitled thereto, be paid the appropriate separation pay and retirement and other benefits under existing laws within ninety (90) days from the date of the effectivity of their separation or from the date of the receipt of the resolution of their appeals as the case may be: Provided, That application for clearance has been filed and no action thereon has been made by the corresponding department or agency. Those who are not entitled to said benefits shall be paid a separation gratuity in the amount equivalent to one (1) month salary for every year of service. Such separation pay and retirement benefits shall have priority of payment out of the savings of the department or agency concerned.

xxx         xxx         xxx

SECTION 11. The executive branch of the government shall implement reorganization schemes within a specified period of time authorized by law.

In the case of the 1987 reorganization of the executive branch, all departments and agencies which are authorized by executive orders promulgated by the President to reorganize shall have ninety (90) days from the approval of this Act within which to implement their respective reorganization plans in accordance with the provisions of this Act.

xxx         xxx         xxx

SECTION 13. All laws, rules and regulations or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly. The rights and benefits under this Act shall be retroactive as of June 30, 1987.

xxx xxx xxx (Emphasis ours)

Given the foregoing statutory backdrop, the issues can now be addressed.

Scope of Section 16, Art. XVIII, 1987 Constitution

Crucial to the present controversy is the construction to be given to the abovementioned Constitutional provision (SECTION 16, for brevity), which speaks of.

Career civil service employees separated from the service not for cause

but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986

and the reorganization following the ratification of this Constitution ... (paragraphing supplied).

To our minds, SECTION 16 clearly recognizes (1) the reorganization authorized by Proclamation No. 3; (2) that such separation is NOT FOR CAUSE but as a result of the reorganization pursuant to said Proclamation; and (3) that the reorganization pursuant to Proclamation No. 3 may be continued even after the ratification of the 1987 Constitution during the transition period.

Separation NOT FOR CAUSE

The canon for the removal or suspension of a civil service officer or employee is that it must be FOR CAUSE. That means a guarantee of both procedural and substantive due process. Basically, procedural due process would require that suspension or dismissal come only after notice and hearing. Substantive due process would require that suspension or dismissal be 'for cause'." Bernas The Constitution of the Republic of the Philippines: A Commentary, Vol. II, First Edition, 1988, p. 334)

The guarantee of removal FOR CAUSE is enshrined in Article IX-B, Section 2(3) of the 1987 Constitution, which states that 'No officer or employee of the civil service shall be removed or suspended except FOR CAUSE provided by law."

There can be no question then as to the meaning of the phrase FOR CAUSE. It simply means the observance of both procedural and substantive due process in cases of removal of officers or employees of the civil service. When SECTION 16 speaks, therefore, of separation from the service NOT FOR CAUSE, it can only mean the diametrical opposite. The constitutional intent to exempt the separation of civil service employees pursuant to Proclamation No. 3 from the operation of Article IX-B, Section 2(3), becomes readily apparent. A distinction is explicitly made between removal FOR CAUSE, which as aforestated, requires due process, and dismissal NOT FOR CAUSE, which implies that the latter is not bound by the "fetters' of due process.

It is obviously for that reason that Section 16 grants separation pay and retirement benefits to those separated NOT FOR CAUSE but as a result of the reorganization precisely to soften the impact of the non-observance of due process. "What is envisioned in Section 16 is not a remedy for arbitrary removal of civil servants enjoying security of tenure but some form of relief for members of the career civil service who may have been or may be legally but involuntarily 'reorganized out' of the service or may have voluntarily resigned pursuant to the reorganization policy" (ibid., p. 615).

Reorganization Pursuant to Proclamation No. 3 to Continue Transitorily Even After Ratification

By its very context, SECTION 16 envisages the continuance of the reorganization pursuant to Proclamation No. 3 even after ratification of the Constitution and during the transition period. The two [2] stages contemplated, namely, (1) the stage before and (2) after ratification, refer to the same nature of separation "NOT FOR CAUSE but as a result of Proclamation No. 3." No valid reason has been advanced for a different treatment after ratification as the majority opines i.e., that separation NOT FOR CAUSE is allowed before ratification but that, thereafter, separation can only be FOR CAUSE.

A fundamental principle of Constitutional construction is to assure the realization of the purpose of the framers of the organic law and of the people who adopted it.

That the reorganization commenced pursuant to Proclamation No. 3 was envisioned to continue even after the ratification of the 1987 Constitution, at least transitorily, is evident from the intent of its authors discoverable from their deliberations held on 3 October 1986 and evincing their awareness that such reorganization had not as yet been fully implemented. Thus:

Mr. PADILLA. Mr. Presiding Officer, on lines 2 to 5 is the clause 'pursuant to the provisions of Article III of Proclamation No. 3, issued on March 25, 1986, and the reorganization.' Are those words necessary? Can we not just say 'result of the reorganization following the ratification of this Constitution'? In other words, must we make specific reference to Proclamation No. 3?

Mr. SUAREZ. Yes. I think the committee feels that is necessary, because in truth there has been a reorganization by virtue of Proclamation No. 3. In other words, there are two stages of reorganization covered by this section.

Mr. PADILIA. I understand there is a reorganization committee headed by a minister?

Mr. SUAREZ. Philippine Commission on Government Reorganization.

Mr. PADILLA. But whether that has already been implemented or not, I do not believe in it. There has been a plan, but I do not think it has been implemented. If we want to include any previous reorganization after or before the ratification, why do we not just say reorganization before or after the ratification' to simplify the provision and eliminate two-and-a-half sentences that may not be necessary? And as a result of the reorganization, if the committee feels there has been reorganization before ratification and there be reorganization after, we just say 'before or after the ratification of this Constitution.

Mr. SUAREZ. Something like this as a result of the reorganization effected before or after the ratification of the Constitution on the understanding, with the statement into the records, that this would be applicable to those reorganized out pursuant to the Freedom Constitution also.

Mr. PADILLA. That is understood if there has been a reorganization before the ratification or a reorganization after the ratification." (RECORDS of the Constitutional Commission, Vol. 5, p. 416) (Emphasis provided)

It should also be recalled that the deadline for the reorganization under Proclamation No. 3 was "one year from February 25, 1986" (Article III, Section 2), or up to February 24, 1987. Executive Order No. 17 itself provided that the review/assessment of personnel be completed "not later than February 24, 1987." But, confronted with the reality of the ratification of the Constitution before that deadline without reorganization having been completed, there was need for a provision allowing for its continuance even after ratification and until completed. It was also to beat that deadline that EO 127 and similar issuances, providing for the reorganization of departments of government, were all dated 30 January 1987 or prior to the plebiscite held on 2 February 1987. The intent to continue and complete the reorganizations started is self- evident in SECTION 16.

In Jose vs. Arroyo, et al. (G.R. No. 78435, August 11, 1987), which was a Petition for certiorari and Prohibition to enjoin the implementation of Executive Order No. 127, we recognized that the reorganization pursuant to Proclamation No. 3 as mandated by SECTION 16, was to continue even after ratification when we stated:

The contention of petitioner that EO No. 127 is violative of the provision of the 1987 Constitution guaranteeing career civil service employees security of tenure overlooks the provision of Section 16, Art. XVIII (Transitory Provisions) which explicitly authorizes the removal of career civil service employees not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of the Constitution. By virtue of said provision, the reorganization of the Bureau of Customs under Executive Order No. 127 may continue even after the ratification of this Constitution and career civil service employees may be separated from the service without cause as a result of such reorganization. (Emphasis ours)

With due respect to the majority, we disagree with its conclusion that the foregoing pronouncement is mere "obiter dictum."

An obiter dictum or dictum has been defined as a remark or opinion uttered, by the way. It is a statement of the court concerning a question which was not directly before it (In re Hess 23 A. 2d. 298, 301, 20 N.J. Misc. 12). It is language unnecessary to a decision, (a) ruling on an issue not raised, or (an) opinion of a judge which does not embody the resolution or determination of the court, and is made without argument or full consideration of the point (Lawson v. US, 176 F2d 49, 51, 85 U.S. App. D.C. 167). It is an expression of opinion by the court or judge on a collateral question not directly involved, (Crescent Ring Co. v. Travelers Indemnity Co. 132 A. 106, 107, 102 N.J. Law 85) or not necessary for the decision Du Bell v. Union Central Life Ins. Co., 29, So. 2d 709, 712; 211 La. 167).

In the case at bar, however, directly involved and squarely before the Court was the issue of whether EO 127 violates Section 2(3) of Article IX-B of the 1987 Constitution against removal of civil service employees except for cause." Petitioner batted for the affirmative of the proposition, while respondents contended that "removal of civil service employees without cause is allowed not only under the Provisional Constitution but also under the 1987 Constitution if the same is made pursuant to a reorganization after the ratification of the Constitution."

It may be that the Court dismissed that Petition for being premature, speculative and purely anticipatory" inasmuch as petitioner therein had "not received any communication terminating or threatening to terminate his services." But that was only one consideration. The Court still proceeded to decide all the issues adversatively contested by the parties, namely "1) that the expiration date of February 25, 1 987 fixed by Section 2 of Proclamation No. 3 on which said Executive order is based had already lapsed; 2) that the Executive Order has not been published in the Official Gazette as required by Article 2 of the Civil Code and Section 1 1 of the Revised Administrative Code; and 3) that its enforcement violates Section 2(3) of Article IX B of the 1987 Constitution against removal of civil service employees except for cause."

The ruling of the Court, therefore, on the Constitutional issues presented, particularly, the lapse of the period mandated by Proclamation No. 3, and the validity of EO 127, cannot be said to be mere "obiter." They were ultimate issues directly before the Court, expressly decided in the course of the consideration of the case, so that any resolution thereon must be considered as authoritative precedent, and not a mere dictum (See Valli v. US, 94 F2d 687 certiorari granted 58 S. Ct. 760, 303 U.S. 82 L. Ed. 1092; See also Weedin v. Tayokichi Yamada 4 F. (2d) 455).lâwphî1.ñèt Such resolution would not lose its value as a precedent just because the disposition of the case was also made on some other ground.

.....And this rule applies as to all pertinent questions although only incidentally involved, which are presented and decided in the regular course of the consideration of the case, and lead up to the final conclusion (Northern Pac. Ry Co. v. Baker, D.C. Wash., 3 F. Suppl. 1; See also Wisconsin Power and Light Co. v. City of Beloit 254 NW 119; Chase v. American Cartage Co. 186 N.W. 598; City of Detroit, et al. v. Public Utilities Comm. 286 N.W. 368). Accordingly, a point expressly decided does not lose its value as a precedent because the disposition of the case is made on some other ground. (Wagner v. Com Products Refining Co. D.C. N.J. 28 F 2d 617) Where a case presents two or more points, any one of which is sufficient to determine the ultimate issue, but the court actually decides all such points, the case is an authoritative precedent as to every point decided, and none of such points can be regarded as having merely the status of a dictum (See U.S. Title Insurance and Trust Co., Cal., 44 S. Ct. 621, 265 U.S. 472, 68 L. Ed. 1110; Van Dyke v. Parker 83 F. (2d) 35) and one point should not be denied authority merely because another point was more dwelt on and more fully argued and considered. (Richmond Screw Anchor Co. v. U.S. 48 S. Ct. 194, 275 U.S. 331, 72 L. Ed. 303)"

It is true that in Palma-Fernandez vs. de la Paz (G.R. No. 78946, April 15, 1986, 160 SCRA 751), we had stated:

The argument that, on the basis of this provision (Section 26 of Executive Order No. 119, or the 'Reorganization Act of the Ministry of Health'), petitioner's term of office ended on 30 January 1987 and that she continued in the performance of her duties merely in a hold-over capacity and could be transferred to another position without violating any of her legal rights, is untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate reorganization and would have lapsed on 25 February 1987 (under the Provisional Constitution), but advanced to 2 February 1987 when the 1987 Constitution became effective (De Leon, et al., vs. Hon. Esguerra, et al., G.R. No. 78059, 31 August 1987, 153 SCRA 602). After the d date the provisions of the latter on security of tenure govern.

The factual situation in the two cases, however, radically differ. In the cited case, Dra. Palma-Fernandez, the petitioner, had already been extended a permanent appointment as Assistant Director for Professional Services of the East Avenue Medical

Center but was still being transferred by the Medical Center Chief to the Research Office against her consent. Separation from the service as a result of reorganization was not involved. The question then arose as to whether the latter official had the authority to transfer or whether the power to appoint and remove subordinate officers and employees was lodged in the Secretary of Health. Related to that issue was the vital one of whether or not her transfer, effected on 29 May 1987, was tantamount to a removal without cause. Significant, too, is the fact that the transfer was basically made "in the interest of the service" pursuant to Section 24(c) of PD No. 807, or the Civil Service Decree, and not because she was being reorganized out by virtue of EO 119 or the "Reorganization Act of the Ministry of Health," although the said Act was invoked after the fact. And so it was that SECTION 16 was never mentioned, much less invoked in the Palma-Fernandez case.

Finally, on this point, it is inaccurate for the majority to state that there were no reorganization orders after ratification. There were, namely, EO 181 (Reorganization Act of the Civil Service Commission), June 1, 1987; EO 193 (Reorganization Act of the Office of Energy Affairs), June 10, 1987; EO 230 (Reorganization Act of NEDA), July 22, 1987; EO 262 (Reorganization Act of the Department of Local Government), July 25, 1987; EO 297 (Reorganization Act of the Office of the Press Secretary), July 25, 1987.

The Element of Good Faith

The majority concedes that reorganization can be undertaken provided it be in good faith but concludes that Commissioner Mison was not in good faith.

The aforesaid conclusion is contradicted by the records.

Executive Order No. 127, dated 30 January 1987, specifically authorized the reorganization of the Bureau of Customs "structurally and functionally" and provided for the abolition of all units and positions thereof not included in the structural organization S election 55).

As stated heretofore, it was the former Commissioner of Customs, Alexander A. Padilla who, on 24 May 1987, transmitted to the Department of Finance for approval the proposed "position structure and staffing pattern" of the Bureau of Customs. This was approved by the Department of Finance. Thereafter, it was transmitted to and approved by the Department of Budget and Management on 7 September 1987 for implementation. Under the old staffing pattern, there were 7,302 positions while under the new staffing pattern, there are 6,530 positions.

On 2 October 1987 "Malacanang Memorandum Re: Guidelines on the Implementation of Reorganization Executive Orders" provided:

By October 21, 1987, all employees covered by the Executive orders for each agency on reorganization shall be:

a. informed of their reappointment, or

b. offered another position in the same department or agency, or

c. informed of their termination. (emphasis supplied)

On 25 November 1987 Commissioner Mison asked for and was granted by the President an extension up to February 1988 within which to completely undertake the reorganization of the Bureau of Customs.

On 6 January 1988, he issued Bureau of Customs Memorandum "Re Guidelines on the Implementation of Reorganization Executive Orders" reiterating the above- quoted portion of the Malacanang Memorandum of 2 October 1987. Pursuant thereto, on 28 January 1988, Commissioner Mison addressed uniform letters of termination to the employees listed on pages 15, 16 and 17 of the majority opinion, effective on 28 February 1988, within the extended period granted.

The records further show that upon Commissioner Mison's official inquiry, Secretary of Justice Sedfrey A. Ordoñ;ez, rendered the following Opinion:

. . . It is believed that customs employees who are reorganized out in the course of the implementation of E.O. No. 127 (reorganizing the Department of Finance) need not be informed of the nature and cause of their separation from the service. It is enough that they be 'informed of their termination' pursuant to section 1(c) of the Memorandum dated October 2, 1987 of President Aquino, which reads:

1. By October 21, 1987, all employees covered by the Executive orders for each agency on reorganization shall be:

xxx         xxx         xxx

c) Informed of their terminations.

The constitutional mandate that 'no officer or employee of the civil service shall be renewed or suspended except for cause as provided by law' (Sec. 2(4) (sic), Article IX-B of the 1987 Constitution) does not apply to employees who are separated from office as a result of the reorganization of that Bureau as directed in Executive Order No. 127.

xxx         xxx         xxx

Regarding your (third) query, the issue as to the constitutionality of Executive Order No. 127 is set at rest, after the Supreme Court resolved to dismiss the petition for certiorari questioning its enforceability, for lack of merit (see Jose vs. Arroyo, et al., supra). (Opinion No. 41, s. 1988, March 3, 1988) (Emphasis supplied)

The former Chairman of the Civil Service Commission, Celerina G. Gotladera likewise periodically consulted by Commissioner Mison, also expressed the opinion that "it is not a prerequisite prior to the separation of an employee pursuant to reorganization that he be administratively charged." (Annex 16, p. 411, Rollo, G.R. No. 85310)

Moreover, the records show that the final selection and placement of personnel was done by a Placement Committee, one of whose members is the Head of the Civil Service Commission Field Office, namely, Mrs. Purificacion Cuerdo The appointment of employees made by Commissioner Mison was based on the list approved by said Placement Committee.

But the majority further faults Mison for defying the President's directive to halt further layoffs as a consequence of reorganization, citing OP Memo of 14 October 1987, reading:

Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that there will be no further layoffs this year of personnel as a result of the government reorganization. (p. 45, Decision)

The foregoing, however, must be deemed superseded by later developments, namely, the grant to Commissioner Mison by the President on 22 December 1987 of a grace period until the end of February 1988 within which to completely undertake the reorganization of the Bureau of Customs, which was, in fact, accomplished by 28 February 1988.

To further show lack of good faith, the majority states that Commissioner Mison failed to observe the procedure laid down by EO 17, supra, directing inter alia that a notice of separation be issued to an employee to be terminated indicating therein the reason/s or ground/s for such separation. That requirement, however, does not appear in Section 59 of EO 127, which provides on the contrary "that those incumbents whose positions are not included in the new position structure and staffing pattern of the Ministry or who are not reappointed shall be deemed separated from the service." The right granted by EO 17 to an employee to be informed of the ground for his separation must be deemed to have been revoked by the repealing clause of EO 127 (Section 67) providing that "all laws, ordinances or parts thereof, which are inconsistent with this Executive Order, are hereby repealed and modified accordingly."

Moreover, Section 11 of EO 17 explicitly excepts from its coverage a reorganization pursuant to EO 5. Thus

The Executive Order shall not apply to elective officials or those designated to replace them, presidential appointees, casual and contractual employees, or officials and employees removed pursuant to desciplinary proceedings under the Civil Service law and rules, and to those laid off as a result of reorganization undertaken pursuant to Executive Order No. 5. (Emphasis ours)

That EO 127 was issued pursuant to or in implementation of EO 5, is shown by its introductory portion reading:

Recalling that the reorganization of the government is mandated expressly by Article II, Section 1 (a) and Article III of the Freedom Constitution;

Having in mind that pursuant to Executive order No. 5 (1986), it is directed that the necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public service; (Italics supplied)

Constitutionality of Republic Act No. 6656

The majority also relies on Republic Act No. 6656 entitled an "Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization," particularly Section 2 thereof, to test the good faith of Commissioner Mison.

We are of the view, however, that in providing for retroactivity in its Section 13, RA 6656 clashes frontally with SECTION 16.

1) SECTION 16 clearly recognizes that career service employees separated from the service by reason of the "complete reorganization of the government" pursuant to Proclamation No. 3 may be separated NOT FOR CAUSE. And yet, RA 6656 requires the exact opposite — separation FOR CAUSE. It would not be remiss to quote the provision again:

SEC. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: (a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) Where an office is abolished and another performing substantially the same functions is created; (c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; (e) Where the removal violates the order of separation provided in Section 3 hereof. (Republic Act No. 6156)

The standards laid down are the "traditional" criteria for removal of employees from the career service, e.g. valid cause, due notice and hearing, abolition of, or redundancy of offices. Proclamation No. 3, on the other hand, effectuates the "progressive" type of reorganization dictated by the exigencies of the historical and political upheaval at the time. The "traditional" type is limited in scope. It is concerned with the individual approach where the particular employee involved is charged administratively and where the requisites of notice and hearing have to be observed. The "progressive" kind of reorganization, on the other hand, is the collective way. It is wider in scope, and is the reorganization contemplated under SECTION 16.

2) By providing for reinstatement in its Section 9, RA 6656 adds a benefit not included in SECTION 16. The benefits granted by the latter provision to employees separated NOT FOR CAUSE but as a consequence of reorganization are "separation pay, retirement, and other benefits accruing to them under the laws of general application in force at the time of their separation." The benefit of reinstatement is not included. RA 6656, however, allows reinstatement. That it cannot do because under SECTION 16, it is not one of the laws "in force at the time of their separation."

The Constitution is the paramount law to which all laws must conform. It is from the Constitution that all statutes must derive their bearings. The legislative authority of the State must yield to the expression of the sovereign will. No statutory enactment can disregard the Charter from which it draws its own existence (Phil. Long Distance Telephone Co. v. Collector of Internal Revenue, 90 Phil. 674 [1952]). But, that is exactly what RA 6656 does in providing for retroactivity — it disregards and contravenes a Constitutional imperative. To save it, it should be applied and construed prospectively and not retroactively notwithstanding its explicit provision. Then, and only then, would it make good law.

Effects of Reorganization

To be sure, the reorganization could effect the tenure of members of the career service as defined in Section 5, Article IV of Presidential Decree No. 807, and may even result in the separation from the office of some meritorious employees. But even then, the greater good of the greatest number and the right of the citizenry to a good government, and as they themselves have mandated through the vehicle of Proclamation No. 3, provide the justification for the said injury to the individual. In terms of values, the interest of an employee to security of tenure must yield to the interest of the entire populace and to an efficient and honest government.

But a reorganized employee is not without rights. His right lies in his past services, the entitlement to which must be provided for by law. EO 127 provides for the same in its Section 59, and so does SECTION 16 when the latter specified that career civil service employees separated from the service not for cause:

shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries. This provision also applies to career officers whose resignation, tendered in line with the existing policy, has been accepted.

This is a reward for the employee's past service to the Government. But this is all There is no vested property right to be reemployed in a reorganized office.

The right to an office or to employment with government or any of its agencies is not a vested property right, and removal therefrom will not support the question of due process" Yantsin v. Aberdeen, 54 Wash 2d 787, 345 P 2d 178). A civil service employee does not have a constitutionally protected right to his position, which position is in the nature of a public office, political in character and held by way of grant or privilege extended by government; generally he has been held to have no property right or vested interest to which due process guaranties extend (See Taylor v. Beckham 178 U.S. 548, 44 L Ed. 1187; Angilly v. US CA2 NY 199 F 2d 642; People ex. rel. Baker v. Wilson, 39 III App 2d 443, 189 NE 2d 1; Kelliheller v. NY State Civil Service Com 21 Misc 2d 1034, 194 NYS 2d 89).

To ensure, however, that no meritorious employee has been separated from the service, there would be no harm, in fact, it could do a lot of good, if the Commissioner of Customs reviews the evaluation and placements he has so far made and sees to it that those terminated are included in a consolidated list to be given preference by departments who are recruiting (Section 2[a], BOC Memorandum, January 6,1988).

Conclusion

Premises considered, and subject to the observation hereinabove made, it is our considered view that the separation from the service "NOT FOR CAUSE but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986" of the affected officers and employees of the Bureau of Customs should be UPHELD, and the Resolutions of the Civil Service Commission, dated 30 June 1988, 20 September 1988, and 16 November 1988 should be SET ASIDE for having been issued in grave abuse of discretion.

Republic Act No. 6656, in so far as it provides for retroactivity, should be declared UNCONSTITUTIONAL for being repugnant to the letter and spirit of Section 16, Article XVIII of the 1987 Constitution.

Fernan, C.J., Narvasa, Feliciano, Regalado, JJ., concur.

Footnotes

1 Proc No. 3, (PROVISIONAL CONST.), art. II, sec. l(a).

2 Supra, art. III, secs. 1-4.

3 Proc. No. 1 (1986).

4 CONST. (1986), supra, art. 1, sec. 3.

5 Supra.

6 The various "OIC cases", among them, Sots v. Pimentel, G.R. No. 73970, April 10, 1986; Palma v. Fortich, G.R. No. 59679, January 29, 1987; Ignacio v. Banata, G.R. No. 74720, August 31, 1987; Association of Barangay Councils of Las Pinas v. Juntilla, G.R. No. 78965, November 17, 1987; Ramos v. Lorenzana, G.R. No. 80282, November 26, 1987; Del Monte v. Ferrer, G.R. 78963, January 13, 1988; Yasay v. Flores, G.R. No. 81047, January 7, 1988; ending with De Leon v. Esguerra, No. 78059, August 31, 1987, 153 SCRA 602.

7 Jose v. Arroyo, G.R. No. 78435, August 11, 1987; Palma Fernandez v. De la Paz, No. 78496, August 15, 1988, 160 SCRA 751.

8 Exec. Ord. No. 17, sec. 3.

9 88 O.G. 2009-2024 (Apr., 1987).

10 Exec. Ord. No. 127, supra, secs. 33-38.

11 De Leon v. Esguerra, supra. The writer of this opinion dissented, and maintained that the new Constitution was ratified on February 11, 1987.

12 Rollo, G.R. No. 85310, 317-31.

13 Id., 317.

14 Id., 8.

15 Rollo, G.R. No. 81954, 24; rollo, G.R. No. 81967, 27; rollo, G.R. No. 82023, 37; see also rollo, id., G.R. No. 85310, 8.

16 The last eighteen are the successful employees in the appeal with the Civil Service Commission (subject of G.R. No. 85310) whose reinstatement the Commission ordered pending further proceedings herein. We consider them

impleaded as parties respondents in G.R. No. 85310. Also, the Customs employees involved have been impleaded as parties in more than one petition either as petitioners or respondents.

17 Rollo, id., G.R. No. 85310, 8; according, however, to the petitioners in G.R. 86241, a total of 397 employees were terminated. id., 260; former Sen. Ambrosio Padilla, amicus curiae, placed the figure at 493 (G.R. No. 85310, id., 993).

18 Rollo, id., G.R. No. 85310, 79; also rollo, G.R. No. 85335, 36.

19 Rollo, id., G.R. No. 85310, 424

20 Rollo, G.R. No. 86241, 144

21 Senen Dimaguila and Romulo Badillo earlier instituted in this Court G.R. Nos. 81968 and 81955 but were allowed, by our Resolution of July 5, 1988, to withdraw and join the appeal subject of the Civil Service Commission's Resolution of November 11, 1988, See rollo, G.R. No. 82023, 169

22 84 O.G. Supp. 1-4 (June, 1988).

23 Supra, 3.

24 CONST. (1987), art. XVIII, sec. 16.

25 This was raised by the Civil Service Commission in G.R. No. 86241. Failure to exhaust administrative remedies was raised in G.R. No. 81954 and 81917 by the Solicitor General.

26 Sarmiento III v. Mison, No. L-79974, December 17, 1987, 153 SCRA 549, 551-552.

27 Pres. Decree No. 807, sec. 39. The provision reads: "Appeals. — (a) Appeals, where allowable, shall be made by the party adversely affected by the decision within fifteen days from receipt of the decision unless a petition for reconsideration is seasonably filed, which petition shall be decided within fifteen days. Notice of the appeal shall be filed with the disciplining office, which shall forward the records of the case, together with the notice of appeal, to the appellate authority within fifteen days from filing of the notice of appeal, with its comment, if any. The notice of appeal shall specifically state the date of the decision appealed from and the date of receipt thereof. It shall also specifically set forth clearly the grounds relied upon for excepting from the decision; (b) A petition for reconsideration shall be based only on any of the following grounds: (1) new evidence has been discovered which materially affects the decision rendered; (2) the decision is not supported by the evidence on record; or (3) errors of law or irregularities have been committed prejudicial to the interest of the respondent; Provided, That only one petition for reconsideration shall be entertained."

28 Rep. Act No. 6656, supra, sec. 8. The provision reads: "Sec. 8. An officer or employee who is still not satisfied with the decision of the appointing authority may further appeal with ten (10) days from receipt thereof to the Civil Service Commission which shall render a decision thereon within thirty (30) days and whose decision shall be final and executory."

29 CONST., art. IX, sec, 7. The provision reads: "Sec. 7. Each Commission shall decide by a majority vote of all its Members any case or matter brought before it within sixty days from the date of its submission for decision or resolution. A case or matter is deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum required by the rules of the Commission or by the Commission itself. Unless otherwise provided by this Constitution or by law, any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.

30 Rollo, id., G.R. No. 85310, 82.

31 id., 415.

32 CONST. (1987), supra.

33 See Aratuc v. Commission on Elections, Nos. L-49705-09, 49717-21, February 8, 1979, 88 SCRA 251.

34 Supra, 271.

35 Supra.

36 Aratuc supra, 270.

37 CONST. (1987), supra, art. IX sec. 2(2). To be more precise, the 1987 Constitution gives the Commission "exclusive original jurisdiction over all [election] contests.'

38 Supra, art. IX, sec. 7.

39 Aratuc supra, 271; emphasis supplied.

40 Rep. Act No. 6656, supra, sec. 8.

41 RULES OF COURT, Rule 65, sec. 1.

42 CONST. (1987), art. IX, sec. 7, supra.

43 Phil. American Life Ins. Co. vs. Social Security Com No. L-20383, May 24, 1967, 20 SCRA 162,

44 Exec. Ord. No. 127, supra, sec. 59.

45 Supra.

46 Rollo, id., G.R. No. 81954, 36.

47 Exec. Ord. No. 127, supra, see. 34; rollo, id., G.R. No. 81954.

48 Exec. Ord. No. 127, supra, sec. 59.

49 Rollo, id., G.R. No. 81954,12; emphasis in the original.

50 CONST. (1986), Supra, art. IX, sec. 2.

51 CONST. (1987), supra, art. IXB sec. 2(3).

52 August 8, 1986.

53 Supra, sec. 1(a)

54 G.R. No. 78435, August 11, 1987.

55 Supra, 3.

56 CONST. (1987), supra, art. XVIII, sec. 16.

57 Rollo, id., G.R. No. 81954, 216; rollo, id., G.R. No. 81967, 64; rollo, id., G.R. No. 82023, 76.

58 Supra.

59 See Exec. Ord. No. 17, supra, sec. 1.

60 Rollo, id., G.R. No. 85310, 18; rollo, id., G.R. No. 86241, 14.

61 Id.; id., 13.

62 Id., 37; id., 33.

63 CONST. (1987), art. XVIII, sec. 16, supra.

64 See fn. 11.

65 CONST. (1935), art. XVI, sec. 4.

66 CONST. (1973), art. XVII, sec. 9.

67 CONST. (1986); art. III, sec. 2, supra.

68 Ginson v. Municipality of Murcia, No. L-46585, February 8, 1988, 157 SCRA 1; De la Llana v. Alba, No. 57883, March 12, 1982, 112 SCRA 294; Cruz v. Primicias Jr., No. L-28573, June 13, 1968, 23 SCRA 998.

69 III RECORD OF THE CONSTITUTIONAL COMMISSION, 1615-1616 (1986).

70 De Leon v. Esguerra, supra; Palma-Fernandez v. De la Paz, supra.

71 Exec. Ord. No. 17, supra.

* Paradoxically, Executive Order No. 17 would have provided a "cause" for removal.

72 OP Memo (October 14, 1987).

73 Supra, see fn. 7.

74 Arroyo, supra, 3.

75 The petitioner was Leonardo Jose, a Collector III at the Bureau of Customs.

76 Supra, 2.

77 55 Phil. 565 (1930).

78 Supra.

79 Art. III, sec. 1 and art. IX(B) sec. 2(3).

80 Supra. In Palma-Fernandez, we upheld claims of authority of tenure in the absence of a bona fide reorganization. In that case, there was no valid abolition of an office but merely, a change in name of position. We did not foreclose therein the validity of a removal "not for cause," provided that there is a valid reorganization.

81 Ginson v. Municipality of Murcia, supra; De la Llana v. Alba, supra; Cruz v. Primicias Jr., supra.

82 Palma Fernandez, supra. In that case, the office of "Chief of Clinic' was purportedly abolished and in its place an office of "Assistant Director for Professional Services" was created. We held that the two positions "are basically one and the same except for the change of nomenclature (767.)

83 Ginson supra; Cruz, supra.

** Although as we also said, Executive Order No. 17 itself imposed a "cause" for removals under the Freedom Constitution.

84 Rep. Act No. 6156, supra.

85 See G.R. Nos. 81964, 81967, id., 10-11.

86 G.R. No. 86421, id., 31.

87 OP Memo (Oct., 14, 1987), supra.

88 See Free Telephone Workers Union v. Minister of Labor and Employment, No. 58184, October 30, 1981, 1108 SCRA 757.

89 Supra. With respect to Vicente Feria, Jr., the records reveal that his appointment was extended on April 22, 1986. (G.R. No. 81967, id., 7.) For that reason, he cannot be said to be an "incumbent" for purposes of reorganization, to whom a reappointment may be issued. Because his appointment came after the promulgation of the Freedom Constitution, he is, to all intents and purposes, an appointee as a result of reorganization.

90 Supra, 757.

91 Supra, sec. 9.

92 Supra, sec. 13.

93. Supra, sec. 2.

EN BANC

[G.R. No. 112745.  October 16, 1997]

AQUILINO T. LARIN, petitioner, vs. THE EXECUTIVE SECRETARY, SECRETARY OF FINANCE, COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE AND THE COMMITTEE CREATED TO INVESTIGATE THE ADMINISTRATIVE COMPLAINT AGAINST AQUILINO T. LARIN, COMPOSED OF FRUMENCIO A. LAGUSTAN, JOSE B. ALEJANDRINO and JAIME M. MAZA, respondents.

D E C I S I O N

TORRES, JR., J.:

Challenge in this petition is the validity of petitioner’s removal from service as Assistant Commissioner of the Excise Tax Service of the Bureau of Internal Revenue. Incidentally, he questions Memorandum order no. 164 issued by the Office of the President, which provides for the creation of “A Committee to Investigate the Administrative Complaint Against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal Revenue” as well as the investigation made in pursuance thereto and Administrative Order No. 101 dated December 2, 1993 which found him guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal from office.

Likewise, petitioner seeks to assail the legality of Executive Order No. 132, issued by President Ramos on October 26, 1993, which provides for the “Streamlining of the  Bureau of Internal Revenue,” and of its implementing rules issued by the Bureau of Internal Revenue, namely: a) Administrative Order No. 4-93, which provides for the  “Organizational Structure and Statement of General Functions of Offices in the National Office” and b) Administrative Order No. 5-93, which provides for “Redefining the Areas of Jurisdiction and Renumbering of Regional And District Offices.”

The antecedent facts of the instant case as succinctly related by the Solicitor General are as follows:

On September 18, 1992, a decision was rendered by the Sandiganbayan convicting herein petitioner Aquilino T. Larin, Revenue Specific Tax Officer, then Assistant Commisioner of the Bureau of Internal Revenue and his co-accused (except Justino E. Galban, Jr.) of the crimes of violation of Section 268 (4) of the National Internal Revenue Code and Section 3 (e) of R.A. 3019 in Criminal Cases Nos. 14208-14209, entitled “People of the Philippines, Plaintiff vs. Aquilino T. Larin, Teodoro T. Pareno, Justino E. Galban, Jr. and Potenciana N. Evangelista, Accused, “ the dispositive portion of the judgment reads:

"WHEREFORE, judgment is now rendered in Criminal Cases Nos. 14208 and 14209 convicting accused Assistant Commissioner for Specific Tax Aquilino T. Larin, Chief of the Alcohol tax Division

TEODORO P. PARENO, and Chief of the Revenue accounting Division POTENCIANA M. EVANGELISTA:

xxx

SO ORDERED.”

The fact of petitioner’s conviction was reported to the President of the Philippines by the then Acting Finance Secretary Leong through a memorandum dated June 4, 1993. The memorandum states, inter alia:

‘This is a report in the case of Assistant Commissioner AQUILINO T. LARIN of the Excise tax Service, Bureau of Internal Revenue, a presidential appointee, one of those convicted in the Criminal Case Nos. 14208-14209, entitled ‘People of the Philippines vs. Aquilino T. Larin, et. al.’ Referred to the Department of Finace by the Commissioner of Internal Revenue.

The cases against Pareno and Evangelista are being acted upon by the Bureau of Internal revenue as they non-presidential appointees.

xxx

It is clear from the foregoing that Mr. Larin has found beyond reasonable doubt to have committed acts constituting grave misconduct. Under the Civil Service Laws and Rules which require only preponderance of evidence, grave misconduct is punishable by dismissal.’

Acting by authority of the President, Sr. Deputy Executive Secretary Leonardo A. Quisumbing issued Memorandum Order No. 164 dated August 25, 1993 which provides for the creation of an Executive Committee to investigate the administrative charge against herein petitioner Aquilino T. Larin. It states thus:

“ A Committee is hereby created to investigate the administrative complaint filed against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal Revenue, to be composed of:

Atty. Frumencio A. Lagustan – ChairmanAssistant Executive Secretary for Legislation

Mr. Jose B. Alejandro – MemberPresidential Assistant

Atty. Jaime M. Maza – MemberAssistant commissioner of Inspector servicesBureau of Internal Revenue

The Committee shall have the powers and prerogatives of (an) investigating committee under the administrative Code of 1987 including the power to summon

witnesses, administer oath or take testimony or evidence relevant to the investigation by subpoena ad testificandum and subpoena duces tecum:

       xxx

The Committee shall convene immediately, conduct the investigation in the most expeditious manner, and terminate the same as soon as practicable from its first scheduled date of hearing.

       xxx”

Consequently, the Committee directed the  petitioner to respond to the administrative charge leveled against him through a letter dated September 17, 1993, thus:

‘Presidential Memorandum Order No. 164 dated August 25, 1993, a xerox copy of which is hereto attached for your ready reference, created an Investigation Committee to look into the charges against you which are also the subject of the Criminal Cases No. 14208 and 14209 entitled People of the Philippines vs. Aquilino T. Larin, et. al.

The committee has its possession a certified true copy of the Decision of the Sandiganbayan in the above-mentioned cases.

Pursuant to Presidential Memorandum Order No. 164, you are hereby directed to file your position paper on the aforementioned charges within seven (7) days from receipt hereof xxx.

Failure to file the required position paper shall be considered as a waiver on your part to submit such paper or to be heard, in which case, the Committee shall deem the case submitted on the basis of the documents and records at hand.’

In compliance, petitioner submitted a letter dated September 30, 1993 which was addressed to Atty. Frumencio A. Lagustan , the Chairman of the Investigating Committee.  In said latter, he asserts that,

‘The case being sub-judice, I may not , therefore, comment on the merits of issues involved for fear of being cited in contempt of Court. This position paper is thus limited to furnishing the Committee pertinent documents submitted with the Supreme Court and other tribunal which took cognizance of the case in the past, as follows:

xxx

The foregoing documents readily show that I am not administratively liable or criminally culpable of the charges leveled against me, and that the aforesaid cases are mere prosecutions caused to be filed and are being orchestrated by taxpayers who were prejudiced by multi-million peso assessments I caused to be issued  against them in my official capacity as Assistant Commissioner, Excise Tax office of Bureau of Internal Revenue.’

In the same letter, petitioner claims that the administrative complaint against him is already barred: a) on jurisdictional ground as the Office of the Ombudsman had already taken cognizance of the case and had caused the filing only of the criminal charges against him, b) by res judicata, c) double jeopardy, and d) because to proceed with the case would be redundant, oppressive and a plain persecution against him.

Meanwhile, the President issued the challenged Executive order No. 132 dated October 26, 1993 which mandates for the streamlining of the Bureau of Internal Revenue. Under said order, some positions and functions are either abolished, renamed, decentralized or transferred to other offices, while other offices are also created. The Excise Tax Service or the Specific Tax Service, of which petitioner was the Assistant Commissioner, was one of those offices that was abolished by said executive order.

The corresponding implementing rules of Executive Order No. 132, namely, revenue Administrative Orders Nos. 4-93 and 5-93, were subsequently issued .by the Bureau of Internal Revenue.

On October 27, 1993, or one day after the promulgation of Executive Order No.132, the President appointed the following as BIR Assistant Commissioners:

1.  Bernardo A. Frianeza2.  Dominador L. Galura3.  Jaime D. Gonzales4.  Lilia C. Guillermo5.  Rizalina S. Magalona6.  Victorino C. Mamalateo7.  Jaime M. Masa8.  Antonio N. Pangilinan9.  Melchor S. Ramos10.  Joel L. Tan-Torres

Consequently, the president, in the assailed Administrative Order No. 101 dated December 2, 1993, found petitioner guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal with forfeiture of his leave credits and retirement benefits including disqualification for reappointment in the government service.

Aggrieved, petitioner filed directly with this Court the instant petition on December 13, 1993 to question basically his alleged unlawful removal from office.

On April 17, 1996 and while the instant petition is pending, this Court set aside the conviction of the petitioner in Criminal Case Nos. 14208 and 14209.

In his petition, petitioner challenged the authority of the President to dismiss him from office. He argued that in so far as presidential appointees who are Career Executive Service Officers are concerned, the President exercises only the power of control not the

power to remove. He also averred that the administrative investigation conducted under Memorandum Order No. 164 is void as it violated his right to due process. According to him, the letter of the Committee dated September 17, 1993 and his position paper dated September 30, 1993 are not sufficient for purposes of complying with the requirements of due process. He alleged that he was not informed of the administrative charges leveled against him nor was he given official notice of his dismissal.

Petitioner likewise claimed that he was removed as a result of the reorganization made by the Executive Department in the BIR pursuant to Executive Order No. 132. Thus, he assailed said Executive Order No. 132 and its implementing rules, namely, Revenue Administrative Orders 4-93 and 5-93 for being ultra vires. He claimed that there is yet no law enacted by Congress which authorizes the reorganization by the Executive Department of executive agencies, particularly the Bureau of Internal revenue. He said that the reorganization sought to be effected by the Executive Department on the basis of E.O. No. 132 is tainted with bad faith in apparent violation of Section 2 of R.A. 6656, otherwise known as the Act Protecting the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization.

On the other hand, respondents contended that since petitioner is the presidential appointee, he falls under the disciplining authority of the President. They also contended that E.O. No. 132 and its implementing rules were validly issued pursuant to Sections 48 and 62 of Republic Act No. 7645. Apart from this,   the other legal bases of E.O. No. 132 as stated in its preamble are Section 63 of E.O No.127 (Reorganizing the Ministry of Finance), and Section 20, Book III of E.O. No. 292, otherwise known as the Administrative Code of 1987. In addition, it is clear that in Section 11 of R.A No.6656 future reorganization is expressly contemplated and nothing in said law that prohibits subsequent reorganization through an executive order. Significantly, respondents clarified that petitioner was not dismissed by virtue of EO 132. Respondents claimed that he was removed from office because he was found guilty of grave misconduct in the administrative cases filed against him.

The ultimate issue to be resolved in the instant case falls on the determination of the validity of petitioner’s dismissal from office. Incidentally, in order to resolve this matter, it is imperative that We consider these questions : a) Who has the power to discipline the petitioner?, b) Were the proceedings taken pursuant to Memorandum Order No. 164 in accord with due process?, c) What is the effect of petitioner’s acquittal in the criminal case to his administrative charge? d) Does the President have the power to reorganize the BIR or to issue the questioned E.O. NO. 132?, e) Is the reorganization of BIR pursuant to E.O. No. 132 tainted with bad faith?

At the outset, it is worthy to note that the position of the Assistant Commissioner of the BIR is part of the Career Executive Service. Under the law, Career Executive Service officers, namely Undersecretary, Assistant Secretary, Bureau director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board, are all appointed by the President. Concededly, petitioner was appointed

as Assistant Commissioner in January, 1987 by then President Aquino. Thus, petitioner is a presidential appointee who belongs to career service of the Civil Service. Being a presidential appointee, he comes under the direct diciplining authority of the President. This is in line with the well settled principle that the “power to remove is inherent in the power to appoint” conferred to the President by Section 16, Article VII of the Constitution. Thus, it is ineluctably clear that Memorandum Order No. 164, which created a committee to investigate the administrative charge against petitioner, was issued pursuant to the power of removal of the President. This power of removal, however, is not an absolute one which accepts no reservation. It must be pointed out that petitioner is a career service officer. Under the Administrative Code of 1987, career service is characterized by the existence of security of tenure, as contra-distinguished from non-career service whose tenure is co-terminus with that of the appointing or subject to his pleasure, or limited to a period specified by law or to the duration of a particular project for which purpose the employment was made. As a career service officer, petitioner enjoys the right to security of tenure. No less than the 1987 Constitution guarantees the right of security of tenure of the employees of the civil service. Specifically, Section 36 of P.D. No. 807, as amended, otherwise known as Civil Service Decree of the Philippines, is emphatic that career service officers and employees who enjoy security of tenure may be removed only for any of the causes enumerated in said law. In other words, the fact that the petitioner is a presidential appointee does not give the appointing authority the license to remove him at will or at his pleasure for it is an admitted fact that he is likewise a career service officer who under the law is the recipient of tenurial  protection, thus, may only be removed for a cause and in accordance with procedural due process.

Was petitioner then removed from office for a legal cause under a valid proceeding?

Although the proceedings taken complied with the requirements of procedural due process, this Court, however, considers that petitioner was not dismissed for a valid cause.

It should be noted that what precipitated the creation of the investigative committee to look into the administrative charge against petitioner is his conviction by the Sandiganbayan in criminal Case Nos. 14208 and 14209. As admitted by the respondents, the administrative case against petitioner is based on the Sandiganbayan Decision of September 18, 1992. Thus, in the Administrative Order No. 101 issued by Senior Deputy Executive Secretary Quisumbing which found petitioner guilty of grave misconduct, it clearly states that:

"This pertains to the administrative charge against Assistant Commissioner Aquilino T. Larin of the Bureau of Internal Revenue, for grave misconduct by virtue of a Memorandum signed by Acting Secretary Leong of the Department of Finance, on the basis of decision handed down by the Hon. Sandiganbayan convicting Larin, et. al. in Criminal Cases No. 14208 and 14209."

In a nutshell, the criminal cases against petitioner refer to his alleged violation of Section 268 (4) of the National Internal Revenue Code and of section 3(e) of R.A. No.3019 as a consequence of his act of favorably recommending the grant of tax credit to Tanduay Distillery, Inc.. The pertinent portion of the judgment of the Sandiganbayan reads:

"As above pointed out, the accused had conspired in knowingly preparing false memoranda and certification in order to effect a fraud upon taxes due to the government. By their separate acts which had resulted in an appropriate tax credit of P180,701,682.00 in favor of Tanduay. The government had been defrauded of a tax revenue - for the full amount, if one is to look at the availments or utilization thereof (Exhibits 'AA' to 'AA-31-a'), or for a substantial portion thereof (P73,000,000.00) if we are to rely on the letter of Deputy Commissioner Eufracio D. Santos (Exhibits '21' for all the accused).

As pointed out above, the confluence of acts and omissions committed by accused Larin, Pareno and Evangelista adequately prove conspiracy among them for no other purpose than to bring about a tax credit which Tanduay did not deserve. These misrepresentations as to how much Tanduay had paid in ad valorem taxes obviously constituted a fraud of tax revenue of the government xxx.'

However, it must be stressed at this juncture that the conviction of petitioner by the Sandiganbayan was set aside by this court in our decision promulgated on April 17, 1996 in G.R. Nos. 108037-38 and 107119-20. We specifically ruled in no uncertain terms that : a) petitioner cannot be held negligent in relying on the certification of a co-equal unit in the BIR, b) it is not incumbent upon Larin to go beyond the certification made by the Revenue Accounting Division that Tanduay Distillery, Inc. had paid the ad valorem taxes, c) there is nothing irregular or anything false in Larin's marginal note on the memorandum addressed to Pareno, the Chief of Alcohol Tax Division who was also one of the accused, but eventually acquitted, in the said criminal cases, and d) there is no proof of actual agreement between the accused, including petitioner, to commit the illegal acts charged. We are emphatic in our resolution in said cases that there is nothing "illegal with the acts committed by the petitioner(s)." We also declare that "there is no showing that petitioner(s) had acted irregularly, or performed acts outside of his (their) official functions." Significantly, these acts which We categorically declare to be not unlawful and improper in G.R. Nos. 108037-38 and G.R. Nos. 107119-20 are the very same acts for which petitioner is held to be administratively responsible. Any charge of malfeasance or misfeasance on the part of the petitioner is clearly belied by our conclusion in said cases. In the light of this decisive pronouncement, We see no reason for the administrative charge to continue - it must, thus, be dismissed.

We are not unaware of the rule that since administrative cases are independent from criminal actions for the same act or omission, the dismissal or acquittal of the criminal charge does not foreclose the institution of administrative action nor carry with it the relief from administrative liability. However, the circumstantial  setting of the instant case sets it miles apart from the foregoing rule and placed it well within the exception. Corollarily, where the very basis of the administrative case against petitioner is his conviction in the criminal action which was later on set aside by this court upon a

categorical and clear findings that the acts for which he was administratively held liable are not unlawful and irregular, the acquittal of the petitioner in the criminal case necessarily entails the dismissal of the administrative action against him, because in such a case, there is no basis nor justifiable reason to maintain the administrative suit.

On the aspect of procedural due process, suffice it to say that petitioner was given every chance to present his side. The rule is well settled that the essence of due process in administrative proceedings is that a party be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his defense. The records clearly show that on October 1, 1993 petitioner submitted his letter-response dated September 30, 1993 to the administrative charged filed against him. Aside from his letter, he also submitted various documents attached as annexes to his letter, all of which are evidences supporting his defense. Prior to this, he received a letter dated September 17, 1993 from the Investigation Committee requiring him to explain his side concerning the charge. It cannot therefore be argued that petitioner was denied of due process.

Let us now examine Executive Order No. 132.

As stated earlier, with the issuance of Executive Order No. 132, some of the positions and offices, including the office of Excise Tax Services of which petitioner was the Assistant Commissioner, were abolished or otherwise decentralized. Consequently, the President released the list of appointed Assistant Commissioners of the BIR. Apparently, petitioner was not included.

Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR.

We do not agree.

Under its Preamble, E.O. No. 132 lays down the legal basis of its issuance, namely: a) Section 48 and 62 of R.A. No. 7645, b) Section 63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292.

Section 48 of R.A. 7645 provides that:

"Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. -- The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished, subject to civil rules and regulations. xxx. Actual scaling down, phasing out or abolition of the activities shall be effective pursuant to Circulars or Orders issued for the purpose by the Office of the President." (italics ours)

Said provision clearly mentions the acts of "scaling down, phasing out and abolition" of offices only and does not cover the creation of offices or transfer of functions.

Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62, which provides that:

"Sec. 62, Unauthorized Organizational Charges. -- Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act." (italics ours)

The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned.

The contention of petitioner that the two provisions are riders deserves scant consideration. Well settled is the rule that every law has in its favor the presumption of constitutionality. Unless and until a specific provision of the law is declared invalid and unconstitutional, the same is valid and binding for all intents and purposes.

Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:

"Sec.20. Residual Powers. -- Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law." (italics ours)

This provision speaks of such other powers vested in the President under the law. What law then which gives him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. The validity of these two decrees are unquestionable. The 1987 Constitution clearly provides that "all laws, decrees, executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked." So far, there is yet no law amending or repealing said decrees. Significantly, the Constitution itself recognizes future reorganizations in the government as what is revealed in Section 16 of Article XVIII, thus:

"Sec. 16. Career civil service employees separated from service not for cause but as a result of the xxx reorganization following the ratification of this Constitution  shall be entitled to appropriate separation pay xxx."

However, We can not consider E.O. No. 127 signed on January 30, 1987 as a legal basis for the reorganization of the BIR. E.O. No. 127 should be related to the second paragraph of Section 11 of Republic Act No. 6656.

Section 11 provides inter alia:

"xxx

In the case of the 1987 reorganization of the executive branch, all departments and agencies which are authorized by executive orders promulgated by the President to reorganize shall have ninety days from the approval of this act within which to implement their respective reorganization plans in accordance with the provisions of this Act." (italics ours)

Executive Order No. 127 was part of the 1987 reorganization contemplated under said provision. Obviously, it had become stale by virtue of the expiration of the ninety day deadline period. It can not thus be used as a proper basis for the reorganization of the BIR. Nevertheless, as shown earlier, there are other legal bases to sustain the authority of the President to issue the questioned E.O. No. 132.

While the President's power to reorganize can not be denied, this does not mean however that the reorganization itself is properly made in accordance with law. Well-settled is the rule that reorganization is regarded as valid provided it is pursued in good faith. Thus, in Dario vs. Mison, this court has had the occasion to clarify that:

"As a general rule, a reorganization is carried out in ‘good faith’ if it is for the purpose of economy or to make bureaucracy more efficient. In that event no dismissal or separation actually occurs because the position itself ceases to exist. And in that case the security of tenure would not be a Chinese Wall. Be that as it may, if the abolition which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, or otherwise not in good faith, no valid abolition takes place and whatever abolition is done is void ab initio. There is an invalid abolition as where there is merely a change of nomenclature of positions or where claims of economy are belied by the existence of ample funds."

In this regard, it is worth mentioning that Section 2 of R.A. No. 6656 lists down the circumstances evidencing bad faith in the removal of employees as a result of the reorganization, thus:

Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of the reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:

a)  Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned;

b)  Where an office is abolished and another performing substantially the same functions is created;

c)  Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;

d)  Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices;

e)  Where the removal violates the order of separation provided in Section 3 hereof."

A reading of some of the provisions of the questioned E.O. No. 132 clearly leads us to an inescapable conclusion that there are circumstances considered as evidences of bad faith in the reorganization of the BIR.

Section 1.1.2 of said executive order provides that:

"1.1.2 The Intelligence and Investigation Office and the Inspection Service are abolished. An Intelligence and Investigation Service is hereby created to absorb the same functions of the abolished office and service. xxx" (italics ours)

This provision is a clear illustration of the circumstance mentioned in Section 2 (b) of R.A. No. 6656 that an office is abolished and another one performing substantially the same function is created.

Another circumstance is the creation of services and divisions in the BIR resulting to a significant increase in the number of positions in the said bureau as contemplated in paragraph (a) of section 2 of R.A. No. 6656. Under Section 1.3 of E.O. No. 132, the Information Systems Group has two newly created Systems Services. Aside from this, six new divisions are also created. Under Section 1.2.1, three more divisions of the Assessment Service are formed. With this newly created offices, there is no doubt that a significant increase of positions will correspondingly follow.

Furthermore, it is perceivable that the non-reappointment of the petitioner as Assistant Commissioner violates Section 4 of R.A. No. 6656. Under said provision, officers holding permanent appointments are given preference for appointment to the new positions in the approved staffing pattern comparable to their former position or in case there are not enough comparable positions to positions next lower in rank. It is undeniable that petitioner is a career executive officer who is holding a permanent position. Hence, he should have given preference for appointment in the position of Assistant Commissioner. As claimed by petitioner, Antonio Pangilinan who was one of those appointed as Assistant Commissioner, "is an outsider of sorts to the bureau, not having been an incumbent officer of the bureau at the time of the reorganization." We

should not lose sight of the second paragraph of Section 4 of R.A. No. 6656 which explicitly states that no new employees shall be taken in until all permanent officers shall have been appointed for permanent position.

IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is hereby reinstated to his position as Assistant Commissioner without loss of seniority rights and shall be entitled to full backwages from the time of his separation from service until actual reinstatement unless, in the meanwhile, he would have reached the compulsory retirement age of sixty-five years in which case, he shall be deemed to have retired at such age and entitled thereafter to the corresponding retirement benefits.

SO ORDERED.

Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Hermosisima, Jr., and Panganiban, JJ., concur.

Regalado, J., on leave.

The Office of the Solicitor General inadvertently dated it as December 1, 1992.

See Floreza vs. Ongpin, G.R. Nos. 81356 and 86156, February 26, 1990, 182 SCRA 692, 707.

P.D No. 807, as amended, otherwise known as the Civil Service Decree of the Philippines; E.O No. 292, otherwise known as the Administrative Code of 1987.

Rollo p. 94.

Rollo p. 113.

Police Commission vs. Lood, no. l-34230, March 31, 1980, 96 SCRA 819 ; Office of the Court Administrator vs. Enriquez , A.M. No. P-89-290 , January 29, 1993 , 218 SCRA 1.

Midas Touch Food Corp. vs. NLRC, G.R. No. 111639 , July 29, 1996 , 259 SCRA 652.

Abbas vs. COMELEC , 179 SCRA 287.

Official Gazette Vol. 78, No. 40, pp. 5486-2,3.

Section 3 of Article XVIII.

176 SCRA 84.