EN BANC

G.R. Nos. 142801-802

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

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.
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. 1911 andExecutive
Order No. 2232 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.
1273 establishing the Economic Intelligence and Investigation Bureau (EIIB) as part of
the structural organization of the Ministry of Finance.4 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;

(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."5
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."6
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."7 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 8 creating the Presidential
Anti-Smuggling Task Force "Aduana."9
Then the day feared by the EIIB employees came. On March 29, 2000, President Estrada
issued Executive Order No. 22310 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.11
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."

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,13 while to "abolish" means to do away with, to annul, abrogate or
destroy completely.14 In essence, abolition denotes an intention to do away with the
office wholly and permanently.15 Thus, while in abolition, the office ceases to exist, the
same is not true indeactivation 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.16 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.17 Thus, except where the office was created by the Constitution itself,
it may be abolished by the same legislature that brought it into existence. 18
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,19 or certain laws may grant him the broad authority to
carry out reorganization measures.20 The case in point is Larin v. Executive
Secretary.21 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:

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,12 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?

"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.
xxx

xxx

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.
xxx

xxx

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.
8760.22 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.23 Section 78 ends up with the mandate
that the actual streamlining and productivity improvement in agency organization and
operation shall be effected pursuant toCirculars or Orders issued for the purpose by the
Office of the President.24 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,25 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.26 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.27 Pertinently, Republic Act No. 665628 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.29
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 Orders30 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 antismuggling 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 forassignment 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;31 for 1996, P182,156,000;32 for 1998, P219,889,000;33 and, for
1999,P238,743,000.34 These amounts were far above the P50,000,00035 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),36 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.1wphi1.nt
Consequently, it cannot be said that there is a feigned reorganization. In Blaquera v. Civil
Sevice Commission, 37we 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.38 In the instructive words laid down
by this Court in Dario v. Mison,39 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. 40

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, De Leon, Jr., JJ., concur.
Panganiban and Quisumbing, JJ., in the result.
Gonzaga-Reyes, J., on leave.

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.

TORRES, JR., J.:

Challenged 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, 1 a decision was rendered by the Sandiganbayan convicting
herein petitioner Aquilino T. Larin, Revenue Specific Tax Officer, then Assistant
Commissioner 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 xxx 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 Criminal Case Nos.
14208-14209, entitled "People of the Philippines vs. Aquilino T.
Larin, et. al." referred to the Department of Finance by the
Commissioner of Internal Revenue.
The cases against Pareno and Evangelista are being acted upon by the
Bureau of Internal Revenue as they are non-presidential appointees.
xxx xxx xxx
It is clear from the foregoing that Mr. Larin has been 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 Chairman
Assistant Executive Secretary for Legislation

Mr. Jose B. Alejandro Member

Presidential Assistant
Atty. Jaime M. Maza Member
Assistant Commissioner for Inspector Services
Bureau of Internal Revenue
The Committee shall have all 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 subpoenaduces tecum.
xxx xxx 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 xxx 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 in 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 . . . .
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 the 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 xxx xxx
The foregoing documents readily show that am not administratively
liable or criminally culpable of the charges leveled against me, and
that the aforesaid cases are mere persecutions caused to be filed and
are being orchestrated by taxpayers who were prejudiced by multimillion peso assessments I caused to be issued against them in my
official capacity as Assistant Commissioner, Excise Tax Office of the
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) by 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. Frianeza
2. Dominador L. Galura
3. Jaime D. Gonzales
4. Lilia C. Guillermo

5. Rizalina S. Magalona
6. Victorino C. Mamalateo
7. Jaime M. Maza
8. Antonio N. Pangilinan
9. Melchor S. Ramos
10. 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 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 a 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?, and 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 Assistant Commissioner of the BIR
is part of the Career Executive Service. 2 Under the law, 3 Career Executive Service
officers, namely, Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau
Director, Regional Director, Assistant Regional Director, Chief of Department Service
and other officers of equivalent rank as may be identified by the Career Executive
Service Board, are all appointed by the President. Concededly, petitioner was appointed
as Assistant Commissioner in January, 1987 by then President Aquino. Thus, petitioner is
a presidential appointee who belongs to career service of the Civil Service. Being a
presidential appointee, he comes under the direct disciplining authority of the President.
This is in line with the well settled 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 noncareer service whose tenure is co-terminus with that of the appointing authority 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 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 a
decision handed down by the Hon. Sandiganbayan convicting Larin,
et. al. in Criminal Case Nos. 14208 and 14209. 4
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 . . . . 5
However, it must be stressed at this juncture that the conviction of petitioner by the
Sandiganbayan was set asideby 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 can not 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. 6 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 finding 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 more 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.7 The records
clearly show that on October 1, 1993 petitioner submitted his letter-response dated
September 30, 1993 to the administrative charge 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 can not 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.
We do not agree.
Under its preamble, E.O. No. 132 lays down the legal bases 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 bescaled down, phased out or
abolished, subject to civil service rules and regulations. . . . 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. (emphasis 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 of charges in key positions in any department or
agency shall be authorized in their respective organization structures
and be funded from appropriations by this Act. (emphasis ours)
The foregoing provision evidently shows that the President is authorized to effect
organizational charges 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. 8 Unless and until a specific provision of the law is declared invalid and
unconstitutional, the same is valid and biding 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. (emphasis 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 9 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." 10 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 . . . reorganization following the ratification
of this Constitution shall be entitled to appropriate separation pay . . .
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 xxx 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 daysfrom
the approval of this act within which to implement their respective
reorganization plans in accordance with the provisions of this Act.
(emphasis 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.

10

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. 11
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 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 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. . . . (emphasis 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 these 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 positions 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 been 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

11

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.

12

G.R. No. 142283

February 6, 2003

ROSA LIGAYA C. DOMINGO, ROMEO M. FERNANDEZ, VICTORIA S.

ESTRADA, JULIETA C. FAJARDO, ADELAIDA B. GAWIRAN, MARCIANO M.
SERVO, VICTORIA S. DAOANG, FELICIANO N. TOLEDO III, JAYNELYN D.
FLORES, MA. LIZA B. LLOREN, ROMELIA A. CONTAPAY, MARIVIC B.
TOLITOL, PAZ LEVITA G. VILLANUEVA, EDITHA C. HERNANDEZ, JOSE
HERNANDEZ, JR., VERONICA C. BELLES, AMELITA S. BUCE, MERCELITA
C. MARANAN, CRISTITUTO C. LLOREN, HERNANDO M. EVANGELISTA,
and CARLOS BACAY, JR., petitioners,
vs.
HON. RONALDO D. ZAMORA, in his capacity as the Executive Secretary, HON.
ANDREW B. GONZALES, in his capacity as the Secretary of Education, and HON.
CARLOS D. TUASON, in his capacity as the Chairman of the Philippine Sports
Commission, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for certiorari and prohibition1 with prayer for temporary restraining
order seeking to nullify Executive Order No. 81 and Memoranda Nos. 01592 and
01594.2 The assailed executive order transferred the sports development programs and
activities of the Department of Education, Culture and Sports ("DECS" for brevity) to the
Philippine Sports Commission ("PSC" for brevity). The questioned memoranda ("DECS
Memoranda" for brevity), on the other hand, reassigned all Bureau of Physical Education
and School Sports ("BPESS" for brevity) personnel named in the DECS Memoranda to
various offices within the DECS.
The Facts
On March 5, 1999, former President Joseph E. Estrada issued Executive Order No.
813 ("EO 81" for brevity) entitled "Transferring the Sports Programs and Activities of the
Department of Education, Culture and Sports to the Philippine Sports Commission and
Defining the Role of DECS in School-Based Sports."
EO 81 provided thus:
"Section 1. Transferring the Sports Program and Activities to the PSC. All the functions,
programs and activities of DECS related to sports development as provided for in Sec. 16
of EO 117 (s. 1987) are hereby transferred to PSC.

Section 2. Defining the Role of DECS in School-Based Sports. The DECS shall have
jurisdiction and function over the enhancement of Physical Education (P.E.) curriculum
and its application in whatever form inside schools.
Section 3. The Role of PSC. As the primary agency tasked to formulate policies and
oversee the national sports development program, the management and implementation
of all school-based sports competitions among schools at the district, provincial, regional,
national and international levels, in coordination with concerned public and private
entities shall be transferred to the PSC."
Pursuant to EO 81, former DECS Secretary Andrew B. Gonzales ("Secretary Gonzales"
for brevity) issued Memorandum No. 01592 on January 10, 2000. Memorandum No.
01592 temporarily reassigned, in the exigency of the service, all remaining BPESS Staff
to other divisions or bureaus of the DECS effective March 15, 2000.
On January 21, 2000, Secretary Gonzales issued Memorandum No. 01594 reassigning the
BPESS staff named in the Memorandum to various offices within the DECS effective
March 15, 2000. Petitioners were among the BPESS personnel affected by Memorandum
No. 01594. Dissatisfied with their reassignment, petitioners filed the instant petition.
In their Petition, petitioners argue that EO 81 is void and unconstitutional for being an
undue legislation by President Estrada. Petitioners maintain that the Presidents issuance
of EO 81 violated the principle of separation of powers. Petitioners also challenge the
DECS Memoranda for violating their right to security of tenure.
Petitioners seek to nullify EO 81 and the DECS Memoranda. Petitioners pray that this
Court prohibit the PSC from performing functions related to school sports development.
Petitioners further pray that, upon filing of the petition, this Court issue a temporary
restraining order against respondents to desist from implementing EO 81.
During the pendency of the case, Republic Act No. 9155 ("RA 9155" for brevity),
otherwise known as the "Governance of Basic Education Act of 2001", was enacted on
August 11, 2001. RA 9155 expressly abolished the BPESS and transferred the functions,
programs and activities of the DECS relating to sports competition to the PSC. The
pertinent provision thereof reads:
"SEC. 9. Abolition of BPESS. All functions, programs and activities of the Department
of Education related to sports competition shall be transferred to the Philippine Sports
Commission (PSC). The Program for school sports and physical fitness shall remain part
of the basic education curriculum.
The Bureau of Physical Education and School Sports (BPESS) is hereby abolished. The
personnel of the BPESS, presently detailed with the PSC, are hereby transferred to the

13

PSC without loss of rank, including the plantilla positions they occupy. All other BPESS
personnel shall be retained by the Department."
The Issue
The issue to resolve is whether EO 81 and the DECS Memoranda are valid.
The Courts Ruling

Since EO 81 is based on the Presidents continuing authority under Section 31 (2) and (3)
of EO 292,8 EO 81 is a valid exercise of the Presidents delegated power to reorganize the
Office of the President. The law grants the President this power in recognition of the
recurring need of every President to reorganize his office "to achieve simplicity, economy
and efficiency." The Office of the President is the nerve center of the Executive Branch.
To remain effective and efficient, the Office of the President must be capable of being
shaped and reshaped by the President in the manner he deems fit to carry out his
directives and policies. After all, the Office of the President is the command post of the
President. This is the rationale behind the Presidents continuing authority to reorganize
the administrative structure of the Office of the President.

We dismiss this petition for being moot and academic.

4

As manifested by both petitioners and respondents, the subsequent enactment of RA

9155 has rendered the issues in the present case moot and academic. Since RA 9155
abolished the BPESS and transferred the DECS functions relating to sports competition
to the PSC, petitioners now admit that "it is no longer plausible to raise any ultra vires
assumption by the PSC of the functions of the BPESS."6 Moreover, since RA 9155
provides that BPESS personnel not transferred to the PSC shall be retained by the DECS,
petitioners now accept that "the law explicitly protects and preserves"7 their right to
security of tenure.
Although the issue is already academic, its significance constrains the Court to point out
that Executive Order No. 292 ("EO 292" for brevity), otherwise known as the
Administrative Code of 1987, expressly grants the President continuing authority to
reorganize the Office of the President. Section 31 of EO 292 provides:
"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 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 or Agencies." (Emphasis supplied.)

Petitioners contention that the DECS is not part of the Office of the President is
immaterial.1awphi1.nt Under EO 292, the DECS is indisputably a Department of the
Executive Branch. Even if the DECS is not part of the Office of the President, Section 31
(2) and (3) of EO 292 clearly authorizes the President to transfer any function or agency
of the DECS to the Office of the President. Under its charter, the PSC is attached to the
Office of the President.9Therefore, the President has the authority to transfer the
"functions, programs and activities of DECS related to sports development" 10 to the PSC,
making EO 81 a valid presidential issuance.
However, the Presidents power to reorganize the Office of the President under Section
31 (2) and (3) of EO 292 should be distinguished from his power to reorganize the Office
of the President Proper. 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 Presidents 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.
This distinction is crucial as it affects the security of tenure of employees. The abolition
of an office in good faith necessarily results in the employees cessation in office, but in
such event there is no dismissal or separation because the office itself ceases to
exist.11 On the other hand, the transfer of functions or agencies does not result in the
employees cessation in office because his office continues to exist although in another
department, agency or office. In the instant case, the BPESS employees who were not
transferred to PSC were at first temporarily, then later permanently reassigned to other
offices of the DECS, ensuring their continued employment. At any rate, RA 9155 now
mandates that these employees "shall be retained by the Department."
WHEREFORE, the instant petition is DISMISSED. No pronouncement as to costs.
SO ORDERED.

14

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.,
ASCA;O, ANTONIO T., ASLAHON, JULAHON P., ASUNCION, VICTOR R.,
ATANGAN, LORNA S., ATIENZA, ALEXANDER R., BACAL, URSULINO C.,
BA;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 PE;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., IBA;EZ, ESTER C.,
ILAGAN, HONORATO C., INFANTE, REYNALDO C., ISAIS, RAY C., ISMAEL,

15

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., MARI;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., MU;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., PE;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.,
RA;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 PE;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

16

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, 6and 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.

17

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

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

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:

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.

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:

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. MISON
Commissioner15
As far as the records will yield, the following were recipients of these notices:

1. CESAR DARIO
18. FERMIN RODRIGUEZ
2. VICENTE FERIA, JR.
19. DALISAY BAUTISTA
3. ADOLFO CASARENO
20. LEONARDO JOSE
4. PACIFICO LAGLEVA
21. ALBERTO LONTOK
5. JULIAN C. ESPIRITU
22. PORFIRIO TABINO
6. DENNIS A. AZARRAGA
23. JOSE BARREDO
7. RENATO DE JESUS
24. ROBERTO ARNALDO
8. NICASIO C. GAMBOA
25. ESTER TAN
9. CORAZON RALLOS NIEVES
26. PEDRO BAKAL
10. FELICITACION R. GELUZ
27. ROSARIO DAVID
11. LEODEGARIO H. FLORESCA
28. RODOLFO AFUANG
12. SUBAER PACASUM
29. LORENZO CATRE
13. ZENAIDA LANARIA
30. LEONCIA CATRE
14. JOSE B. ORTIZ
31. ROBERTO ABADA
15. GLICERIO R. DOLAR
32. ABACA, SISINIO T.
16. CORNELIO NAPA
-310
17. PABLO B. SANTOS
Cesar Dario is the petitioner in G.R. No. 81954; Vicente Feria, Jr., is the petitioner in
Felicitacion R. Geluz Messrs. Leodegario H. Floresca, Subaer Pacasum Ms. Zenaida
G.R. No. 81967; Messrs. Adolfo Caserano Pacifico Lagleva Julian C. Espiritu, Dennis A.
Lanaria Mr. Jose B. Ortiz, Ms. Gliceria R. Dolar, Ms. Cornelia Napa, Pablo B. Santos,
Azarraga Renato de Jesus, Nicasio C. Gamboa, Mesdames Corazon Rallos Nieves and
Fermin Rodriguez, Ms. Daligay Bautista, Messrs. Leonardo Jose, Alberto Lontok,

18

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," 22was 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,

19

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).lwph1.t 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:

20

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
demandingcertiorari 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

21

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.

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." 57The 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, 59had 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

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

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;

22

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 Malaca;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

23

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).lwph1.t 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

24

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.

25

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.

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.**

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.

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:

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 wellestablished 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

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 85There 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.

26

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. 87Finally, he was
aware that layoffs should observe the procedure laid down by Executive Order No. 17.

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.

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

In resume, we restate as follows:

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

Resume.

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.

27

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, Gri;o-Aquino and Medialdea, JJ.,
concur.
Padilla, J., took no part.

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