G.R. No.

160502 April 27, 2007

TANJAY WATER DISTRICT, CARMELITO A. LIMBAGA, NENITA R. PILAS, ADELINA Q.

LIMBAGA, GODOFREDO R. BORROMEO and RICHARD REGALADO, Petitioners,
vs.
CESAR A. QUINIT, JR., Respondent.

DECISION

CALLEJO, SR.,J.:

Before the Court is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-
G.R. SP No. 45702, which set aside Resolution No. 97-3853 of the Civil Service Commission (CSC).

The Antecedents

Sometime in 1987, the Board of Directors of Tanjay Water District (TWD Board) composed of Carmelito A.
Limbaga, Nenita R. Pilas, Adelina Q. Limbaga, Godofredo R. Borromeo, and Richard Regalado appointed
respondent Engineer Cesar A. Quinit, Jr. as the water district’s General Manager effective November 18, 19872
subject to the terms and conditions of the Appointment Proposal.3 On October 1, 1993, the TWD Board
appointed respondent as General Manager, which appointment was attested by the Civil Service Commission
(CSC) as permanent.4 At the time, Section 23 of Presidential Decree (P.D.) No. 194, as amended by Section 9 of
PD No. 768, provided that "the General Manager of the local water districts shall serve at the pleasure of the
Board of Directors of such local water districts."5

Sometime in 1996, respondent had disagreements with the members of the TWD Board relative to the
management of the water district. He wrote a letter6 dated August 13, 1996, to the Administrator of the Local
Water Utilities Administration (LWUA) requesting that all the members of the TWD Board be replaced. He
complained, among others, that the following irregularities were committed by the TWD Board: (1) several
resolutions were passed appropriating for themselves the funds of the water district; (2) to circumvent the law
mandating that its function is only for policy-making, the Board created a Prequalification, Bidding and Awards
Committee (PBAC) which interfered and intervened with the day-to-day affairs of the management of the water
district; (3) several CSC memorandum circulars were violated by the TWD Board; (4) the salary adjustments of
the employees were, likewise, not implemented, in violation of an executive order; and (5) the salary and
benefits of the General Manager were "slashed." Respondent insisted that a number of actions of the Board
further led to revenue losses to TWD, and that several proposals had been unjustly disapproved by the Board.
According to respondent, all the resources of the District will be "eaten by the dogs."7

Thereafter, on August 31, 1996, the TWD Board approved Resolution No. 49, Series of 19968 terminating the
services of respondent as General Manager effective September 1, 1996. The Resolution reads:

BOARD RESOLUTION NO. 49

Series of 1996

WHEREAS, Engr. Cesar A. Quinit, Jr., Tanjay Water District General Manager had shown total disrespect for
each member of the Board when he dared to refer to them as "Dogs" in a letter he sent to LWUA;

WHEREAS, Engr. Cesar A. Quinit, Jr. humiliated the members of the Board when he bluntly remarked that the
Board’s concern is their own personal interest and made the Water District a source of their bread and butter;

WHEREAS, Engr. Cesar A. Quinit, Jr. committed a grave error when he implemented the salary increase
without the authority of the Board and without proper appropriation;

WHEREAS, Engr. Cesar A. Quinit, Jr. has corroded the relationship between he as General Manager of Tanjay
Water District and the Board of Directors which is irreparable.

NOW, THEREFORE, after thorough study and deliberation, BE IT RESOLVED, as it is hereby resolved, upon
motion of everybody and seconded by everybody to end the services of Engr. Cesar A. Quinit, Jr. as General
Manager of Tanjay Water District and all his other concurrent positions effective September 1, 1996.

FURTHER RESOLVED to inform Engr. Cesar A. Quinit, Jr. Accordingly through this Resolution.
APPROVED. August 31, 1996

(Signatura)
CARMELITO A. LIMBAGA, SR.
Chairman

(Signatura) (Signatura)
ADELINA Q. LIMBAGA GODOFREDO R. BORROMEO
Member-Secr. Treas. Member
(Signatura) (Signatura)
NENITA R. PILAS RICHARD V. REGALADO
Member Member9

Respondent forthwith filed a complaint for illegal termination against the TWD Board before the Regional
Office No. VII of the Civil Service Commission (CSC).10 He alleged that the Board failed to justify his
termination, let alone observe due process. He also pointed out that his appointment was attested to by the CSC
as permanent; hence, he could only be removed for cause.11 The TWD Board, however, made the following
comment on the charge:

The status and nature of the appointment of the complaint cannot go beyond the law which created the position
of general manager of the water district. And this is Presidential Decree No. 198, specifically Section 23 thereof
[as amended by Section 9, PD 768] which provides in part that "said officer [general manager] shall serve at the
pleasure of the board."

It is humbly submitted that regardless of how many "permanent" appointments the board will issue to a general
manager of a water district [which may be considered as purely ultra-vires act] and in spite of any annotation of
"permanent" made by the Civil Service Commission on the appointment of any given general manager, said
position continues to be primarily confidential.

xxxx

It is basic and elementary, under this jurisdiction, that the term of office of appointees who serve at the pleasure
of the appointing authority is co-terminus with the trust and confidence reposed upon (sic) the latter unto the
former.

In the case-at-bar, when complainant breached that trust and confidence reposed on him by the respondent, the
act of respondent in withdrawing its trust and confidence on the complainant operates, ipso jure as a termination
of complainant’s term of office.12

After due proceedings, the CSC, on September 18, 1997, issued Resolution No. 97-385313 affirming the validity
of the Resolution issued by the TWD Board. The CSC ruled that respondent’s position as General Manager was
primarily confidential in nature and terminable at the pleasure of the TWD Board. It opined that the tenure of
the General Manager would last only for as long as he enjoyed the trust and confidence of the Board. There was
no violation of his right to due process of law because he was neither removed nor dismissed; his term of office
merely expired. The CSC further ruled that, notwithstanding its attestation that respondent’s appointment was
permanent, the TWD Board was empowered to remove the General Manager from the service on the ground of
loss of confidence at any time.14

Aggrieved, respondent appealed the case to the CA via a petition for review under Rule 43 of the Rules of
Court, alleging that:

1. THE PETITIONER IS A CIVIL SERVICE ELIGIBLE AND THUS ENJOYS SECURITY OF TENURE
AND CANNOT BE TERMINATED WITHOUT CAUSE AND DUE PROCESS,

2. THE CIVIL SERVICE COMMISSION GRAVELY ERRED IN UPHOLDING THE CONTINUED

VALIDITY AND/OR APPLICABILITY (SIC) SEC. 23, PD 198, TO THE PETITIONER,

3. THE RESOLUTION RENDERED BY THE CIVIL SERVICE COMMISSION IS CONTRARY TO LAW

AND JURISPRUDENCE WHEN IT FAILED TO CONSIDER THE SUPREME COURT DECISIONS IN
DAVAO CITY WATER DISTRICT, ET AL., VS. CSC, ET AL., BAGUIO CITY WATER DISTRICT VS.
TRAJANO AND EVEN THIS COURT’S RULING IN CA-G.R. SP. NO. 35611, MARTIR VS.
KABANKALAN WATER DISTRICT, ET AL.15
The appellate court rendered judgment setting aside the assailed Resolution of the CSC. The CA ruled that
Section 23 of P.D. No. 198, as amended, which governs local water districts, explicitly provides that the
General Manager of a water district shall serve at the pleasure of the Board. While the employees of a local
water district are entitled to the protection of the Civil Service Law, the General Manager thereof still holds
office at the pleasure of its board of directors. The appellate court declared that the Civil Service Law did not
repeal P.D. No. 198 insofar as the nature and status of the position of General Manager is concerned, following
the principle in statutory construction that when two statutes apply to a particular subject matter, that which was
specifically enacted or designed for a particular subject matter must prevail. Hence, it declared, P.D. No. 198, as
amended, which governs local water districts, must prevail over the Civil Service Law, which applies to all
government employees in general.16

The appellate court likewise explained that officials and employees holding primarily confidential positions
continue in service only for so long as confidence in them endures. The termination of their official relation can
be justified on the ground of loss of confidence, and their cessation from office involves no removal but
expiration of the term of service. Consequently, since the TWD Charter provides that respondent shall serve "at
the pleasure of the Board," his tenure lasts only for as long as he enjoys its trust and confidence. Since his
services were terminated when Resolution No. 49, Series of 1996 was issued, his tenure in office is deemed to
have expired. The CA added that the reason for the loss of confidence as stated in the Board’s Resolution was
not arbitrary or tainted with malice or bad faith.17

However, the CA ruled that, since the TWD Board failed to comply with the imperative requirement of due
process, it was liable to pay respondent back salaries. The appellate court noted that the Board passed the
Resolution on August 31, 1996, but it was to take effect on the following day. Respondent was thus not apprised
of the Board’s plaint against him, and was not given the opportunity to be heard thereon and to defend himself.
Citing Serrano v. National Labor Relations Commission,18 the appellate court declared that if the termination
has legal basis but is deficient in procedure, payment of full backwages (computed from the time of termination
up to the finality of the decision) may be awarded to the employee. However, since respondent was an
employee of a government-owned or controlled corporation (GOCC), his entitlement to back salaries is limited
to only five years from the date of his defective termination.19 The fallo of the CA decision reads:

WHEREFORE, premises considered, the assailed resolution of the Civil Service Commission is SET ASIDE,
and a new judgment is hereby rendered upholding the legality of petitioner’s termination as general manager,
but ordering respondent Tanjay Water District to pay his full back salaries for a period of five (5) years from
September 1, 1996 which is the date of his termination.

SO ORDERED.20

The TWD and its Board (petitioners) filed the instant petition for review on certiorari, alleging that the appellate
court erred as follows:

(a) Decided a question of substance, not heretofore determined by the Supreme Court by applying
jurisprudence in labor cases on loss of confidence in the appealed case below;

(b) Decided the appealed case not in accord with law and applicable decision of this Honorable Tribunal
when it declared that the termination of the respondent was illegal for failure to comply with the
requirement of due process;

(c) Departed from the accepted and usual course of judicial proceedings when it ordered petitioner
Tanjay Water District to pay respondent’s full back salaries for a period of five (5) years.21

Petitioners maintain that the CA erred in upholding the validity of respondent’s termination, declaring that he
was denied due process, and in finding that he was a confidential employee who served at the pleasure of the
TWD Board. They insist that the rulings in ordinary labor cases cannot be applied to a case involving a GOCC
employee holding a primarily confidential position; in cases involving confidential positions, the due process
requirement under the Constitution is satisfied by the mere act of informing the confidential employee that his
or her term has expired. Petitioners further claim that they complied accordingly when they issued Board
Resolution No. 49, Series of 1996. The CA cannot therefore award the full five-year back salaries to
respondent.

For his part, respondent contends that he was denied due process because his termination was made effective on
September 1, 1996, or the day following the passage of the TWD Board Resolution. While an employee might
be terminated for loss of confidence, the manner and procedure for termination must be in accordance with the
basic requirement of due process; otherwise the termination would be illegal and invalid. Since he was not
afforded due process, respondents are required to pay back salaries for a period of five (5) years from the time
he was terminated from service.

Respondent further argues, in his Memorandum,22 that his termination from service was illegal and invalid.
Hence, he is entitled to reinstatement. He claims that petitioners acted with arbitrariness, malice or bad faith
when they terminated his services. He points out that the employer’s prerogative to dismiss a managerial
employee must not be exercised arbitrarily so as not to render nugatory the employee’s constitutional right to
security of tenure. Further, loss of confidence, as a ground for dismissal, was never intended to afford an
occasion for abuse because of its subjective nature. Respondent cites the ruling of this Court in Gray v. De
Vera,23 which he claims is on all fours with the instant case.

The Court’s Ruling

The instant petition relates only to the propriety of the appellate court’s award of five-year back salaries to
petitioner. Although respondent alleged in his Memorandum that he was illegally dismissed from his position as
General Manager of petitioner TWD and prayed for reinstatement to his former position, he is proscribed from
doing so for the following reasons:

First. Respondent did not appeal the decision of the CA. It is settled that while an appellee (who is not also an
appellant) may assign errors in his brief or pleadings, if the purpose is to maintain the judgment on other
grounds, the appellee cannot ask for modification or reversal of the judgment or affirmative relief unless he has
also filed an appeal.24 Thus, the appellate court’s ruling, that respondent was validly removed from service due
to expiration of his term, is already binding upon him. He cannot therefore belatedly ask for its reversal.

Second. Contrary to respondent’s claim, the ruling of this Court in Gray v. De Vera25 is not applicable. In that
case, Benjamin Gray, who was appointed Board Secretary of the People’s Homesite and Housing Corporation,
sent a telegram to then President Carlos P. Garcia requesting for a complete revamp of the Board because of the
latter’s mismanagement. Consequently, the Board issued a resolution terminating his services and replacing him
immediately on account of loss of confidence due to treachery or disloyalty. Through the erudite pen of then
Associate Justice Francisco R. Capistrano, this Court, in that case, ruled that although the President in Executive
Order No. 399 declared Gray’s position as primarily confidential in nature, he could not be removed from office
without a formal charge specifying the ground for removal, and without giving him an opportunity of being
heard. Gray’s removal from office was thus without due process of law. The Court declared that he was
removed from office without due process and without lawful cause for he merely did an act of civil duty,
consonant with the honesty and integrity required for the position.

In the more recent case of Pangilinan v. Maglaya,26 this Court clarified the doctrine in Gray as follows:

Although Gray was holding a highly confidential position, the Court regarded his separation as a removal and
so applied the constitutional prohibition against the suspension or dismissal of an officer or member of the civil
service without cause as provided by law. That was a rather loose interpretation of the term "dismissal," which
is defined as the ouster of the incumbent before the expiration of his term. Subsequent decisions have made it
clear that where a person holds his position at the pleasure of a superior or subject to some supervening event,
his separation from office is not removal. It is effected by the will of the superior or by the happening of the
contingency, resulting in another and different mode of terminating official relations known as expiration of the
term.27

Irrefragably, in the instant case, respondent’s term as General Manager of TWD merely expired when the Board
passed Resolution No. 49, Series of 1996 on August 31, 1996. This is consonant with the following ruling of
this Court in Paloma v. Mora,28 a case which also involves a general manager of a water district:

In the case at bar, P.D. No. 198, otherwise known as THE PROVINCIAL WATER UTILITIES ACT OF
1973, which was promulgated on 25 May 1973, categorically provides that the general manager shall serve at
the pleasure of the board of directors, viz:

Section 23. Additional Officers. - At the first meeting of the board, or as soon thereafter as practicable, the
board shall appoint, by a majority vote, a general manager, an auditor, and an attorney, and shall define their
duties and fix their compensation. Said officers shall serve at the pleasure of the board.

Section 23 of P.D. No. 198 was later amended by P.D. No. 768 on 15 August 1975 to read:
SEC. 23. The General Manager. - At the first meeting of the board, or as soon thereafter as practicable, the
board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation.
Said officer shall serve at the pleasure of the board. (Emphasis supplied)

Mandamus does not lie to compel the Board of Directors of the Palompon, Leyte Water District to reinstate
petitioner because the Board has the discretionary power to remove him under Section 23 of P.D. No. 198, as
amended by P.D. No. 768.

The case of Mita Pardo de Tavera v. Philippine Tuberculosis Society, Inc. delineated the nature of an
appointment held "at the pleasure of the appointing power" in this wise:

An appointment held at the pleasure of the appointing power is in essence temporary in nature. It is co-
extensive with the desire of the Board of Directors. Hence, when the Board opts to replace the incumbent,
technically there is no removal but only an expiration of term and in an expiration of term, there is no need of
prior notice, due hearing or sufficient grounds before the incumbent can be separated from office. The
protection afforded by Section 7.04 of the Code of By-Laws on Removal Of Officers and Employees, therefore,
cannot be claimed by petitioner. (Emphasis supplied)

In fine, the appointment of petitioner and his consequent termination are clearly within the wide arena of
discretion which the legislature has bestowed the appointing power, which in this case is the Board of Directors
of the Palompon, Leyte Water District. Here, considering that the petitioner is at loggerheads with the Board,
the former’s services obviously ceased to be "pleasurable" to the latter. The Board of Directors of a Water
District may abridge the term of the General Manager thereof the moment the latter’s services cease to be
convivial to the former. Put another way, he is at the mercy of the appointing powers since his appointment can
be terminated at any time for any cause and following Orcullo there is no need of prior notice or due hearing
before the incumbent can be separated from office. Hence, petitioner is treading on shaky grounds with his
intransigent posture that he was removed sans cause and due process.

Yes, as a general rule, no officer or employee of the civil service shall be removed or suspended except for
cause provided by law as provided in Section 2(3), Article IX-B of the 1987 Constitution. As exception to this,
P.D. No. 198, which we held in Feliciano v. Commission On Audit to be the special enabling charter of Local
Water Districts, categorically provides that the General Manager shall serve "at the pleasure of the board."

Correlatively, the nature of appointment of General Managers of Water Districts under Section 23 of P.D. No.
198 falls under Section 14 of the Omnibus Rules Implementing Book V of Executive Order No. 292, otherwise
known as the Administrative Code of 1987, which provides:

Sec. 14. An appointment may also be co-terminous which shall be issued to a person whose entrance and
continuity in the service is based on the trust and confidence of the appointing authority or that which is subject
to his pleasure, or co-existent with his tenure, or limited by the duration of project or subject to the availability
of funds.

The co-terminous status may thus be classified as follows:

(1) Co-terminous with the project - when the appointment is co-existent with the duration of a particular
project for which purpose employment was made or subject to the availability of funds for the same;

(2) Co-terminous with the appointing authority - when appointment is co-existent with the tenure of the
appointing authority or at his pleasure;

(3) Co-terminous with the incumbent - when the appointment is co-existent with the appointee, in that
after the resignation, separation or termination of the services of the incumbent the position shall be
deemed automatically abolished; and

(4) Co-terminous with a specific period - appointment is for a specific period and upon expiration
thereof, the position is deemed abolished; . . . (Underscoring supplied.)

The Court has previously sustained the validity of dismissal of civil servants who serve at the pleasure of the
appointing power and whose appointments are covered by Section 14 of the Omnibus Rules Implementing
Book V of Executive Order No. 292 as cited above. Thus, in Orcullo, Jr. v. Civil Service Commission,
petitioner was hired as Project Manager IV by the Coordinating Council of the Philippine Assistance Program-
BOT Center. In upholding the termination of his employment prior to the expiration of his contract, we held that
petitioner serves at the pleasure of the appointing authority. This Court ruled in Orcullo –

A perusal of petitioner’s employment contract will reveal that his employment with CCPAP is qualified by the
phrase "unless terminated sooner." Thus, while such employment is co-terminous with the PAPS project,
petitioner nevertheless serves at the pleasure of the appointing authority as this is clearly stipulated in his
employment contract. We agree with the appellate court’s interpretation of the phrase "unless terminated
sooner" to mean that his contractual job as Project Manager IV from March 11, 1996 to January 30, 2000 could
end anytime before January 30, 2000 if terminated by the other contracting party-employer CCPAP. (Emphasis
supplied)

Neither is it the Court’s business to intrude into the Congressional sphere on the matter of the wisdom of
Section 23 of P.D. No. 198. One of the firmly entrenched principles in constitutional law is that the courts do
not involve themselves with nor delve into the policy or wisdom of a statute. That is the exclusive concern of
the legislative branch of the government. When the validity of a statute is challenged on constitutional grounds,
the sole function of the court is to determine whether it transcends constitutional limitations or the limits of
legislative power. No such transgression has been shown in this case.

Moreover, laws change depending on the evolving needs of society. In a related development, President Gloria
Macapagal-Arroyo inked into law Republic Act No. 9286, which amended Section 23 of P.D. No. 198
providing that thereafter, the General Manager of Water Districts shall not be removed from office, except for
cause and after due process. Rep. Act No. 9286 reads:

Republic Act No. 9286

AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, OTHERWISE KNOWN AS

"THE PROVINCIAL WATER UTILITIES ACT OF 1973", AS AMENDED

Approved: April 2, 2004

xxx

Sec. 2. Section 23 of Presidential Decree No. 198, as amended, is hereby amended to read as follows:

Sec. 23. The General Manager. – At the first meeting of the Board, or as soon thereafter as practicable, the
Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation.
Said officer shall not be removed from office, except for cause and after due process. (Emphasis supplied.)

xxx

Sec. 5. Effectivity Clause. – This Act shall take effect upon its approval.

Unfortunately for petitioner, Rep. Act No. 9286 is silent as to the retroactivity of the law to pending cases and
must, therefore, be taken to be of prospective application. The general rule is that in an amendatory act, every
case of doubt must be resolved against its retroactive effect. Since the retroactive application of a law usually
divests rights that have already become vested, the rule in statutory construction is that all statutes are to be
construed as having only a prospective operation unless the purpose and intention of the legislature to give them
a retrospective effect is expressly declared or is necessarily implied from the language used.

First, there is nothing in Rep. Act No. 9286 which provides that it should retroact to the date of effectivity of
P.D. No. 198, the original law. Next, neither is it necessarily implied from Rep. Act No. 9286 that it or any of its
provisions should apply retroactively. Third, Rep. Act No. 9286 is a substantive amendment of P.D. No. 198
inasmuch as it has changed the grounds for termination of the General Manager of Water Districts who, under
the then Section 23 of P.D. No. 198, "shall serve at the pleasure of the Board." Under the new law, however,
said General Manager shall not be removed from office, except for cause and after due process. To apply Rep.
Act No. 9286 retroactively to pending cases, such as the case at bar, will rob respondents as members of the
Board of the Palompon, Leyte Water District the right vested to them by P.D. No. 198 to terminate petitioner at
their pleasure or discretion. Stated otherwise, the new law can not be applied to make respondents accountable
for actions which were valid under the law prevailing at the time the questioned act was committed.

Prescinding from the foregoing premises, at the time petitioner was terminated by the Board of Directors, the
prevailing law was Section 23 of P.D. No. 198 prior to its amendment by Rep. Act No. 9286.29
Indeed, no officer or employee in the Civil Service shall be removed or suspended except for cause provided by
law.30 The phrase "cause provided by law," however, includes "loss of confidence."31 It is an established rule
that the tenure of those holding primarily confidential positions ends upon loss of confidence, because their
term of office lasts only as long as confidence in them endures.32 Their termination can be justified on the
ground of loss of confidence, in which case, their cessation from office involves no removal but the expiration
of their term of office.33

Thus, on the sole issue raised by petitioners, we find and so hold that respondent is not entitled to back salaries.

Petitioners are correct in stating that the appellate court took an inconsistent position when it ruled that
respondent was a confidential employee who served at the pleasure of the TWD Board, but declared that he was
entitled to back salaries because he was denied due process. As held in Paloma, since the Board of Directors of
a water district may "abridge the term of the general manager thereof the moment the latter’s services cease to
be convivial to the former," there is no need of prior notice or due hearing before the incumbent can be
separated from office.34 It is enough that he was informed of the Board Resolution terminating his services for
loss of confidence. Thus, in the instant case, the Board afforded respondent due process when they notified him
of the approval of Board Resolution No. 49, Series of 1996.

Accordingly, respondent is not entitled to back salaries. The rule is settled that back salaries may be awarded to
civil servants only if they have been illegally dismissed and thenceforth ordered reinstated, or to those acquitted
of the charge against them.35 Clearly, respondent’s case does not fall within these instances.

WHEREFORE, the Petition is hereby GRANTED. The award of backwages to respondent Cesar A. Quinit, Jr.
in the Decision of the Court of Appeals in CA-G.R. SP No. 45702 is DELETED.

SO ORDERED.

G.R. No. 148544 July 12, 2006

FELIX M. CRUZ, JR., petitioner,
vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION AND CITYTRUST
BANKING CORPORATION, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court seeking to annul the
April 27, 2001 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 52373 which affirmed the January
27, 1998 Decision of the National Labor Relations Commission (NLRC) and its Resolution, dated May 14,
1998 in NLRC NCR CA 011087-96 (NLRC NCR 00-10-06448-93-A).

The factual and procedural antecedents of the case, as summarized by the CA, are as follows:

Cruz [herein petitioner Felix M. Cruz, Jr.] was an employee of private respondent Citytrust Banking
Corporation (or Citytrust) from October 8, 1979. He held the confidential position of Micro Technical
Support Officer, with the following duties and responsibilities: (a) Evaluate and recommend from
various departments/units request for Micro Computers received by the Bidding Committee. (b) Further
evaluate and accept the bids submitted including recommendation therof, which were done by the
Technical Committee of the Bank (Petitioner's Affidavit, p. 102, rollo). The good performance of Cruz
did not remain unnoticed for on several occasions he was recognized with awards and citations, given
salary increases (Exhs, "A to H", "J-K", pp. 45-50, 52-53, rollo) and promoted to Authorized Signer on
May 1, 1991. (Exh. "I", p. 51, rollo).

But after all his years of reputed fealty and good service with the company, something unexpected and
besmirching was uncovered. There were feedbacks and informations that certain irregularities were
being committed in the bidding process and purchase of computers, an area within the powers and
responsibilities of Cruz. To clarify matters, a special investigation was conducted by the Citytrust
Internal Audit Group and it was found out that indeed there were unauthorized and unreported
commissions and rebates given out by one of its computer suppliers, MECO Enterprises, Inc. (MECO),
for purchases made by Citytrust. This was corroborated by the letter dated August 5, 1992 (Exh. "1", p.
148, rollo) of the President and Controller [sic] of MECO certifying that Cruz has received commissions
and rebates amounting to P105,192.00 just for the period of September 1992 to March 1993.

With this damaging result of the investigation, Citytrust sent a show-cause memorandum (Exh. "13", p.
161, rollo) to Cruz on August 6, 1993 placing him under a 30-day preventive suspension and directing
him to appear in an administrative hearing by the Ad Hoc Committee. Cruz submitted the said
memorandum, the Ad Hoc Committee heard the matter, and found Cruz guilty of fraud, serious
misconduct, gross dishonesty and serious violation of Bank policies, regulations and procedure. For the
resultant loss of confidence, Citytrust terminated Cruz from employment effective October 6, 1993 (Exh
"15", pp. 164-165, rollo).

Aggrieved by this, Cruz filed before the Labor Arbiter an action for Illegal Dismissal and Damages
claiming that Citytrust denied him due process and hastily dismissed him from service. After the
submission of position papers and presentation of witnesses, the Labor Arbiter rendered decision in
favor of Cruz disposing that:

"WHEREFORE, premises considered, judgment is hereby rendered, ordering respondent to

reinstate complainant to his former position without loss of seniority rights with full backwages
which up to the promulgation of this Decision amounted to THREE HUNDRED EIGHTY
SEVEN THOUSAND SEVEN HUNDRED NINETY (P387,790.00) Pesos, subject to
adjustment upon actual reinstatement; to pay complainant his 13th month pay in the sum of
THIRTY TWO THOUSAND THREE HUNDRED FIFTEEN & 83/100 (P32,315.83) Pesos; and
to pay the sum of FIFTY THOUSAND (P50,000.00) Pesos as and for damages, plus attorney's
fees in the sum of FORTY SEVEN THOUSAND TEN & 58/100 (P47,010.58) Pesos
representing ten percent (10%) of the monetary award due complainant, subject also to
adjustment.

SO ORDERED." (p. 26, rollo)

 From this decision Citytrust appealed to the NLRC, which through its Second Division rendered the
Decision dated January 27, 1998 wherein the ruling of the Labor Arbiter was set aside and went on
dismissing the case for lack of merit. (p. 37, rollo).

Cruz filed a motion for its reconsideration but this was denied for lack of merit….2

Cruz then filed a petition for certiorari with this Court. In a Resolution dated February 15, 1999,3 the Court
referred the petition to the CA for appropriate action and disposition, pursuant to the ruling in the case of St.
Martin Funeral Homes v. National Labor Relations Commission.4

On April 27, 2001, the CA rendered the presently assailed Decision denying due course to and dismissing the
petition. Sustaining the NLRC, the CA held that while it is true that the signature of petitioner does not appear
in the check vouchers, other pieces of evidence prove that he benefited from the proceeds of the checks issued;
that there is substantial evidence to hold petitioner liable for soliciting and receiving monetary considerations
from a supplier; that his act constituted a willful breach of his employer's trust and confidence which justifies
his termination from employment; that petitioner's dismissal from employment was the result of a thorough
investigation and hearing where he was given the opportunity to explain his side.

Instead of a motion for reconsideration, petitioner filed the present petition for certiorari predicated on the
following grounds:

THAT PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ABUSE(D) ITS DISCRETION

AMOUNTING TO LACK OF JURISDICTION OR IN EXCESS OF JURISDICTION IN SETTING
ASIDE THE DECISION OF THE LABOR ARBITER A QUO

THAT HONORABLE COURT OF APPEALS ABUSED ITS DISCRETION IN CONCLUDING

THAT EXHIBITS 2 TO 10 [IN] WHICH PETITIONER'S SIGNATURE DOES NOT APPEAR, THE
FACTS REMAIN THAT HE BENEFITED FROM THE ALLEGED ANOMALOUS
TRANSACTIONS, ONE MA. CRESENCIA MANGUERRA ENCASHED THE CHECK USING THE
BANK ACCOUNT OF PETITIONER ALLEGING THAT THE LATTER IS PETITIONER['S]
PARAMOUR.5

Petitioner claims that while his name appears in the check vouchers issued by MECO, marked as Exhibits "2" to
"10", the incontrovertible fact remains that his signature does not appear in any of said vouchers. Not being a
signatory of any of the said check vouchers, petitioner contends that there can be no basis in concluding that he
ever received any commission, special discount or rebate from MECO. Petitioner also asserts that he was denied
due process because he was not given the opportunity to refute the charges imputed against him. While it is true
that private respondent conducted an investigation, petitioner claims that the same was done without his
participation.6

In its Comment, private respondent contends that the present petition for certiorari is not the proper remedy to
assail the subject decision of the CA. Private respondent asserts that a petition for certiorari under Rule 65 of
the Rules of Court may be availed of only when a party has no adequate remedy in the ordinary course of law.
Petitioner argues that what petitioner should have done was to file a petition for review on certiorari under Rule
45 of the Rules of Court, and that petitioner's failure to file a petition for review cannot be remedied by the
filing of a special civil action for certiorari. Even assuming that petitioner is allowed to institute the present
petition for certiorari, private respondent contends that the same must still be dismissed because what is being
assailed are the factual findings of the CA and the NLRC and settled is the rule that in certiorari proceedings
under Rule 65 of the Rules of Court, judicial review does not go as far as to evaluate the sufficiency of evidence
upon which the NLRC based its determinations, the inquiry being limited essentially to whether or not said
tribunal has acted without or in excess of its jurisdiction or with grave abuse of discretion. In any case, private
respondent further contends that petitioner failed to prove that the CA committed grave abuse of discretion
because pieces of documentary and oral evidence bear out the fact that petitioner indeed received various
amounts from MECO either as commission, special discount or rebate without private respondent's knowledge
and approval.7

The Court does not find merit in the present petition for the following reasons:

First, it is well settled that the remedy to obtain reversal or modification of judgment on the merits is appeal.8
This is true even if the error, or one of the errors, ascribed to the court rendering the judgment is its lack of
jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in
the findings of facts or of law set out in the decision.9 In the present case, the CA disposed of CA-G.R. SP No.
52373 on the merits. Petitioner claims that he received the Decision of the CA on May 17, 2001. Consequently,
he had 15 days from said date of receipt of assailed judgment, or until June 1, 2001, within which to file a
petition for review on certiorari, the reglementary period prescribed by Rule 45 of the Rules of Court to avail of
said action. On July 9, 2001 close to two months after said receipt, petitioner filed the present petition.
Evidently, petitioner has lost his remedy of appeal. The filing of the instant petition for certiorari cannot be
used as a means of recovering his appeal as it is settled that certiorari is not a substitute for lost appeal.10 The
remedies of appeal and certiorari are mutually exclusive and not alternative or successive.11

Second, assuming for the sake of argument that the present petition for certiorari is the appropriate remedy, the
records of the instant case show that petitioner failed to file a motion for reconsideration of the decision of the
appellate court, thus, depriving the CA of the opportunity to correct on reconsideration such errors as it may
have committed. The first paragraph of Section 1, Rule 65 of the Rules of Court clearly states that in order for a
person to avail of the special civil action of certiorari, he must be left with no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law, to wit:

SECTION 1. Petition for Certiorari. – When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board of officer, and granting such incidental reliefs as law
and justice may require. (Italics supplied)

A motion for reconsideration of an assailed decision is deemed a plain and adequate remedy expressly available
under the law.12 The general rule is that a motion for reconsideration is indispensable before resort to the special
civil action for certiorari to afford the court or tribunal the opportunity to correct its error, if any.13 This rule is
subject to certain recognized exceptions, to wit:

(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;

(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by
the lower court, or are the same as those raised and passed upon in the lower court;

(c) where there is an urgent necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject matter of the action is
perishable;

(d) where, under the circumstances, a motion for reconsideration would be useless;

(e) where petitioner was deprived of due process and there is extreme urgency for relief;

(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the
trial court is improbable;

(g) where the proceedings in the lower court are a nullity for lack of due process;

(h) where the proceeding was ex parte or in which the petitioner had no opportunity to object; and

(i) where the issue raised is one purely of law or where public interest is involved.14

None of these exceptions are present in the instant case. Hence, petitioner's unjustified failure to file a motion
for reconsideration of the decision of the CA before recourse to this special civil action was made calls for the
outright dismissal of this case.

Third, going into the merits of the case, the Court finds that the dismissal of the instant petition is warranted for
failure of petitioner to show grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the CA.

Petitioner was dismissed from employment on the ground, among others, of loss of trust and confidence. Loss
of trust and confidence, as a valid ground for dismissal, must be substantiated by evidence. Jurisprudence has
distinguished the treatment of managerial employees or employees occupying positions of trust and confidence
from that of rank-and-file personnel, insofar as the application of the doctrine of trust and confidence is
concerned. In Caoile v. National Labor Relations Commission, the Court had occasion to explain as follows:

Thus, with respect to rank-and-file personnel, loss of trust and confidence as ground for valid dismissal
requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions
and accusations by the employer will not be sufficient. But as regards a managerial employee, the
mere existence of a basis for believing that such employee has breached the trust of his employer
would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond
reasonable doubt is not required, it being sufficient that there is some basis for such loss of
confidence, such as when the employer has reasonable ground to believe that the employee
concerned is responsible for the purported misconduct, and the nature of his participation therein
renders him unworthy of the trust and confidence demanded by his position.15 (Emphasis supplied)

In addition, the language of Article 282(c) of the Labor Code states that the loss of trust and confidence must be
based on willful breach of the trust reposed in the employee by his employer. Such breach is willful if it is done
intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently.16 Moreover, it must be based on substantial evidence and
not on the employer's whims or caprices or suspicions otherwise, the employee would eternally remain at the
mercy of the employer.17 Loss of confidence must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary.18 And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer.19 In addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a position of responsibility, trust and
confidence20 or that the employee concerned is entrusted with confidence with respect to delicate matters, such
as the handling or care and protection of the property and assets of the employer.21 The betrayal of this trust is
the essence of the offense for which an employee is penalized.22

There is no dispute that petitioner is a confidential employee. During his cross-examination, he testified that
aside from evaluating and recommending the purchase of Micro Computers, he also supervises the maintenance
of computer hardware including the installation of computers for Citytrust in all of its branches nationwide.23 It
is clear from the foregoing that petitioner is not an ordinary rank-and-file employee. His job entails the
observance of proper company procedures relating to the acquisition, installation and maintenance of computers
which, undeniably, are vital to the operations of his employer. Moreover, his functions are not limited to a
specific unit of Citytrust but extend to all branches of his employer nationwide. Thus, his job involves a high
degree of responsibility requiring a substantial amount of trust and confidence on the part of his employer.

The question that remains then is whether there is substantial evidence to prove that petitioner is guilty of the
charges imputed against him as to justify Citytrust in dismissing him from employment on the ground of loss of
trust and confidence.

Petitioner contends that without his signatures appearing in the check vouchers issued by MECO, there can be
no basis in coming up with the conclusion that he received and appropriated commissions and rebates without
the knowledge and authority of Citytrust.

The Court is not persuaded.

Petitioner's reliance on the case of Atlas Consolidated Mining & Development Corp. v. National Labor
Relations Commission[24] is misplaced. In the said case, the private respondent, who is an employee of
petitioner corporation, was charged with the unauthorized withdrawal and misappropriation of 192 liters of
gasoline from company stocks and for knowingly allowing company personnel to work on company time in the
assembly of a privately-owned vehicle. To prove the first charge, the petitioner company presented in evidence
entries in a logbook showing gasoline withdrawals allegedly made by private respondent. In ruling against the
petitioner company, the Court held that since respondent's signature does not appear in the logbook, there is no
proof that he actually withdrew and received the gasoline. In fact, the Court ruled that the logbook cannot be
relied upon to establish the alleged dishonesty of private respondent. Neither did the Court give credence to the
testimonies of the witnesses against him. In sum, no competent evidence was presented to prove the private
respondent's liability. This is not the situation in the present case.

It is true that the check vouchers alone are not sufficient to prove his guilt owing to the fact that his signatures
do not appear in any of these vouchers. However, aside from the abovementioned check vouchers, there are
other pieces of evidence presented by Citytrust which petitioner failed to refute and which points to the fact that
he received commissions or rebates from MECO. The evidence consists of the following: (1) admission made
by petitioner in his letter, dated August 3, 1993, that he received material considerations from MECO since
1992;25 (2) certification issued by MECO categorically stating that he was paid commissions totaling
P105,192.00;26 (3) testimonies of Leoncio Araullo, Vice President of Citytrust; and Ma. Lourdes Foronda,
Assistant Vice President for Staff Services Division of the Human Resources Department of Citytrust, that
petitioner admitted having received the amounts of P1,000.00 and P500.00 from Art Cordero, an officer of
MECO, claiming that these amounts are "for the boys"; (4) statements in the affidavit of Florante del Mundo,
auditor at the Internal Audit Department of Citytrust that two of the checks issued by MECO in favor of
petitioner were either encashed by the latter's common-law-wife or deposited in his account.27 In addition, the
Court agrees with the CA that annotations appearing in the check vouchers issued by MECO such as "Payment
for the Rebate Given to Boy Cruz of Citytrust"28 and "Payment for the Sales Rebate Given to Boy Cruz of
Citytrust"29 are confirmations of the fact that the checks were issued and given specifically by MECO to
petitioner in consideration of his office and services. These pieces of evidence, when taken together, would
constitute substantial evidence to prove petitioner's guilt; and his failure to satisfactorily explain or rebut them
only strengthens Citytrust's case against him.

Thus, petitioner's acceptance of commissions and rebates from MECO, without the knowledge and consent of
Citytrust and without said rebates and commissions being reported and turned over to the latter, are acts which
can clearly be considered as a willful breach of the trust and confidence reposed by Citytrust upon him. Settled
is the rule that an employer cannot be compelled to retain an employee who is guilty of acts inimical to the
interests of the employer.30 A company has the right to dismiss its employees if only as a measure of self-
protection.31 This is all the more true in the case of supervisors or personnel occupying positions of
responsibility.32 In the present case, the Court finds that the CA did not commit grave abuse of discretion when
it ruled that Citytrust is justified in dismissing petitioner from his employment for loss of trust and confidence.

Petitioner contends that he was denied his right to due process because the investigation conducted by Citytrust
was done ex-parte and he was not given the opportunity to confront the witnesses against him. Petitioner's
concept of the opportunity to be heard is the chance to ventilate one's side in a formal hearing where he can
have a face-to-face confrontation with his accusers. It is well settled that the basic requirement of notice and
hearing in termination cases is for the employer to inform the employee of the specific charges against him and
to hear his side and defenses.33 This does not, however, mean a full adversarial proceeding.34 The parties may be
heard through pleadings, written explanations, position papers, memorandum or oral argument.35 In all of these
instances, the employer plays an active role by providing the employee with the opportunity to present his side
and answer the charges in substantial compliance with due process.36 In the present case, petitioner cannot claim
that he was denied due process because he was able to respond to the letter of Citytrust dated August 6, 1993.37
Moreover, he admitted in his cross-examination before the labor arbiter that he was able to attend the
investigation of the ad hoc committee formed by Citytrust where he was shown the check vouchers issued by
MECO, informed of the charges against him and was given further opportunity to explain his side.38 Hence, the
fact alone that he was not able to confront the witnesses against him during the investigation conducted by
Citytrust does not mean that he was denied his right to due process. What is frowned upon is the absolute lack
of notice and hearing.39

As to the requirement of notice, the Labor Code provides that before an employee can be validly dismissed, the
employer is required to furnish the employee with two (2) written notices: (a) a written notice containing a
statement of the cause for termination to afford the employee ample opportunity to be heard and defend himself
with the assistance of his representative, if he so desires; and, (b) if the employer decides to terminate the
services of the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly
the reasons therefor.40 Citytrust complied with the first requirement of notice when it informed petitioner
through a letter, dated August 6, 1993, of the charges against him, directing him to explain in writing why his
employment should not be terminated and, thereafter, to appear in a hearing to be conducted by the company to
give him further opportunity to explain his side.41 Citytrust also complied with the second requirement of notice
when it sent a memorandum dated September 28, 1993, to petitioner informing him of his dismissal from
employment and the reasons therefor.42

WHEREFORE, the instant petition is DISMISSED for lack of merit.

SO ORDERED.

G.R. No. L-28573 June 13, 1968

RUFINO A. CRUZ, ROMULO G. VIRAY, VIRGILIO Z. BANCOD, EDITHA F. DESAMITO, MYRNA
R. SISON, and VIRGINIA USON, petitioners,
vs.
HON. CIPRIANO B. PRIMICIAS, JR., in his capacity as Provincial Governor of Pangasinan,
ANTONIO P. VILLAR, Vice-Governor, VICENTE MILLORA, Member, PORFIRIO SISON, Member,
and AGERICO ROSARIO, Member, in their capacity as Members of the PROVINCIAL BOARD OF
PANGASINAN, respondents.

Bonifacio T. Doria for petitioners.

Sison and Millora in their own behalf as respondent.
D. Macaraeg for other respondents.

REYES, J.B.L., J.:

Direct petition for Mandamus, with preliminary injunction, filed by certain employees of the Province of
Pangasinan, to declare Resolution No. 5 of the Provincial Board and Executive Order No. 2 of the Provincial
Governor null and void; to have the abolition of petitioners' positions declared illegal, and compel their
immediate reinstatement; to restrain respondents from excluding petitioners from the enjoyment of their rights
as civil service employees, and to recover attorneys' fees and costs.

It is not disputed that upon election and assumption of office in 1967 of the respondents Provincial Governor
and Members of the Provincial Board, the latter adopted on January 1, 1968, Resolution No. 5 providing as
follows:

Resolution No. 5

RESOLVED by the Provincial Board of Pangasinan, that for the purpose of promoting simplicity,
economy and efficiency in the operation of the Provincial Government and for the purpose of providing
the necessary expanded services on agricultural extension, rural health, provincial public works and
legal services, etc., the Provincial Governor is hereby authorized to effect by executive orders from time
to time for a period not exceeding six (6) months from the date of approval of this resolution, such
reforms and changes in the different offices and branches of the Provincial Government as may be
necessary, with the power to diminish, add to or abolish those existing and create new ones; consolidate
related undertakings; transfer functions, appropriations, equipments, properties, records and personnel
from one office or branch to another; eliminate duplicated services or authorize new ones not provided
for; classify, combine, split or abolish positions; standardize salaries and do whatever is necessary and
desirable to effect economy and promote efficiency of the government service and provide necessary
services for the promotion of the general social welfare.

That any action taken by the Provincial Governor pursuant to this resolution shall be immediately
reported to the Provincial Board and shall be valid and subsisting until the Provincial Board shall
provide otherwise.1ªvvphi1.nêt

Acting pursuant to this Resolution, the Governor issued his Executive Order No. 2 on January 2, 1968,
reorganizing the office of the Governor and that of the Provincial Board. The order expressly abolished the
following divisions provided for in the Annual Budget for the fiscal year ending on June 30, 1968 —

1. Executive Division
2. Socio-Economic Program Implementation Division
3. Political Affairs and Placement Division
4. Public Information Division
5. Legal Division

as well as "all the positions listed in the current plantilla of personnel of said offices," with certain exceptions.
At the same time, the Executive Order (pars. d-f) provided:

(d) That there is hereby created, effective January 1, 1968, a private and confidential staff of the
Governor under his immediate control and supervision with such duties and functions as may be
assigned and prescribed by him from time to time in the interest of the service, composed of the
following:
 One Senior Special Assistant .......................... P8,400.00
One Private Secretary ....................................... 6,000.00
One Asst. Private Secretary ............................. 4,800.00
Four Special Assistants .................................... 4,800.00
One Technical Assistant .................................. 4,800.00
Four Confidential Assistants ........................... 3,600.00
Six Confidential Assistants .............................. 3,000.00
Two Security-Drivers ........................................ 2,400.00
One Caretaker, Urduja House .......................... 2,400.00

(e) That as authorized by the Decentralization Law, there is hereby created, effective January 1, 1968,
One Provincial Attorney under the Governor with an annual salary of P8,400.00 to be assisted by the
following staff:

Two Special
P4,800.00
Attorneys .............................................
One Clerk to be occupied by Mr.
Norberto Artacho whose position as
Mining Clerk is abolished as
hereinabove
provided .............................................. 2,760.00

(f) That there is hereby created a Personnel Division under the Office of the Governor with such duties
and functions as prescribed under Rule XVII of the Civil Service Rules in relation to Section 21 of the
Civil Service Act of 1959, composed of the following:

One Personnel
Officer .............................................. P6,000.00
One Assistant Personnel Officer
(Mr. Pedro
Nacino) ...................................................
. 5,160.00
One Records Clerk
(Mrs. Erlinda
Baroma) .............................................. 2,280.00
One Personnel Clerk
(Mr. Jaime
Abella) ....................................................
.. 3,120.00
One Asst. Personal Clerk
(Mrs. Armenia
Valdez) ............................................... 2,280.00

Petitioners are Provincial Clerk eligibles, except Bancod, who is a general clerk eligible. On or about January
11 to 15, 1968, they were individually served notices of termination of their services, as follows:

Pursuant to Executive Order No. 2, dated January 2, 1968, of the Provincial Governor of Pangasinan,
partially implementing Resolution No. 5, current series, of the Provincial Board of Pangasinan,
approved and adopted in its first meeting on January 1, 1968, I regret to inform you that your services
are hereby terminated effective immediately upon receipt hereof without prejudice to payment of your
30 days salary.

Copy of Executive Order No. 2 of the Provincial Governor is attached hereto for your information.
 You may also collect the money value of your earned vacation and sick leave of absence, if there is any.

Very truly yours,

By direction of the Provincial Governor:

(SGD) DANIEL C. MACARAEG
Secretary, Provincial Board

and coincidentally, the equipment used by said petitioners was taken, transferred and redistributed to other
retained offices.

As a result, the petitioners instituted the present proceedings on January 26, 1968, questioning the legality and
validity of the Resolution and Order aforesaid, alleging that the abolition of their positions was done pursuant to
an invalid delegation of power to the Governor, that it was done in bad faith, in violation of their security of
tenure under the Civil Service law, as shown by the creation of new confidential positions "bearing conclusive
evidence of political accommodation."

This Court issued a restraining order and required respondents to answer the petition. The restraining order was
served on February 5, 1968.

In their answer filed on February 12, 1968, respondents pleaded that the reorganization of the offices of the
Provincial Governor and Provincial Board had been made within the powers of the Provincial government, in
order to effect economy in view of the province's deficit of P3.714 million pesos; to promote simplicity and
efficiency, and to provide for more essential services and activities; that the Governor's Executive Order No. 2
had been approved and ratified by the Provincial Board on January 5, 1968, by its Resolution No. 8, while the
supplemental budget to provide for the newly created positions was ratified by the Board's Resolution No. 50,
of January 26, 1968; that the actions thus taken were immediately effective, without need of the approval of the
Secretary of Finance; and that the abolition and creation of new positions were made in good faith, the selection
of retained employees had been made on the basis of seniority and fitness as required by the Civil Service law,
those retained having been appointed earlier than the petitioners. The answer also urged that the petitioners
should have exhausted their administrative remedies, by appealing to the Commissioner of Civil Service.

After this case was argued in open court, one of the petitioners, Myrna Sison, formerly occupying the position
of correspondence clerk, manifested in writing that she was no longer interested in the case and prayed that she
be excluded therefrom. Therefore, the case is limited at present to petitioners Cruz, Viray, Bancod, Desamito
and Uson, whose positions and emoluments were as follows:

Effective
Annual Date of
Name Position Salary Appointment

Rufino A. Cruz Clerk P2160.00 July 18, 1965

(Promotion in salary) " 2280.00 Jan. 1, 1967

Romulo G. Viray Clerk-typist 2640.00 July 18, 1965

(Promotion in salary) " 2760.00 Jan. 1, 1967

Virgilio Z. Bancod Steno-typist 2 (sic) Dec. 18, 1958

(Promotion in salary) Doc. Steno-Postal Clerk 2460.00 Jan. 11, 1967

Editha F. Desamito Steno-typist 2340.00 July 1, 1965

(Promotion in salary) " 2460.00 Jan. 11, 1967

Virginia Uson Typist- Mimeographer 2280.00 March 8, 1967
In issue is the validity and legality of the abolition of the offices held by petitioners, the latter contending that
the reorganization (Executive Order No. 2 of the respondent Governor) is void for lack of authority, and for
being in bad faith, arbitrary and oppressive; while respondents assert that it was a valid exercise of
administrative power, motivated by a desire to obtain economy and efficiency in the offices concerned.

A preliminary question must first be disposed of. Respondents contend that the petition does not formulate a
cause of action, because the available administrative remedies have not been exhausted. The provisions of
sections 16 and 24 of the Civil Service Law (Rep. Act 2260), section 5 of Rule VII of the Civil Service Rules,
and section 4 of Republic Act 5185, are cited as conferring upon the Commissioner of Civil Service final
authority to pass upon removal, separation and suspension of officers and employees in the classified service.

We find this point, urged by respondents, to be without merit. No removal or separation of petitioners from the
service is here involved, but the validity of the abolition of their offices. This is a legal issue that is for the
Courts to decide. It is a well-known rule also that valid abolition of offices is neither removal nor separation of
the incumbents (Manalang vs. Quitoriano, 94 Phil. 903; Rodriguez vs. Montemayor, 94 Phil. 964; Castillo vs.
Pajo, 103 Phil. 515). And, of course, if the abolition is void, the incumbent is deemed never to have ceased to
hold office.

The preliminary question laid at rest, we pass to the merits of the case.1äwphï1.ñët

As well-settled as the rule that the abolition of an office does not amount to an illegal removal of its incumbent
is the principle that, in order to be valid, the abolition must be made in good faith. Where the abolition is made
in bad faith, for political or personal reasons, or in order to circumvent the constitutional security of tenure of
civil service employees, it is null and void (Briones vs. Osmeña, 104 Phil. 588; Gacho vs. Osmeña, 94 Phil.
208; 103 Phil. 837; Gonzales vs. Osmeña, L-15901, 30 Dec. 1961; Urgelio vs. Osmeña, 21 October 1963;
Ocampo vs. Duque, 30 April 1966, 16 SC Rep. Anno. 962; Abanilla vs. Ticao, 26 July 1966, 17 SC Rep. Anno.
652; Arao vs. Luspo, 21 July 1967, 20 SC Rep. Anno. 722).

A review of the record herein satisfies us that the justifications advanced for the abolition of petitioners' offices
(economy and efficiency) are but subterfuges resorted to for disguising an illegal removal of permanent civil
service employees, in violation of the security of tenure guaranteed by the Constitution.

The claim of economy effectuated through the reorganization is belied by the fact that while 72 positions were
abolished, 50 of these were actually vacant. Only 22 stations were occupied at the time of the reorganization,
carrying total emoluments of P25,538.71 per semester, of which P6,120.00 per semester corresponds to the five
remaining petitioners (Answer, Exh. 3-C). As against these 22 positions suppressed by the reorganization
(Executive Order No. 2), 28 new positions were simultaneously created, with a compensation of P87,600.00 per
annum, P43,800.00 per semester, for confidential personnel in the office of the Governor (Exh. Order No. 2,
par. d). In addition, a Provincial Attorney and his staff (p. 2), and a Personnel Division of five members,
importing P13,380.00 per semester were set up. Thus, against the suppressed items of P25,538.71, new items
carrying a total appropriation of P57,180.00 per semester (or P114,360.00 annually) were created, in addition to
P8,000.00 for casual laborers at the discretion of the Governor. Where the economy lies is difficult to see.
Significantly, this "economy" was the same excuse advanced by the preceding administration when it attempted
to eliminate civil service eligibles upon its coming into power (Ocampo, et al. vs. Duque, supra).

As to the alleged need for greater efficiency, it is well to observe that no charge of inefficiency is lodged against
petitioners herein. Their efficiency is attested by their promotional appointments in 1967. What can not be
glossed over is that respondent's reorganization replaced 22 civil service eligibles with 23 confidential
employees. No further elaboration is required to show that in truth and in fact, what respondents sought to
achieve was to supplant civil service eligibles with men of their choice, whose tenure would be totally
dependent upon respondents' pleasure and discretion. Thus the spirit of the Civil Service law and of the
Constitution are being purposely circumvented.

The motives behind these wholesale replacements are made manifest in paragraph 10 of respondents' own
Answer, where it is averred, in an attempt to justify the new positions created, that:

... These positions are indispensable to the respondent Governor, he being the elected Chief Executive of
the Province and it could not be denied that his position is more political in nature and as such, it is
humbly submitted, that he is entitled to a flexible compact staff of highly confidential assistants in
whom he has complete trust and confidence not only in their capacity for work but also in their personal
fitness and loyalty. This should be so because his executive position is a political one and as elected
Governor, he is also the Chairman of the Provincial Committee of the Nacionalista Party to which he
 belongs. In this situation, it could not be helped that his Office should deal with his own party men on
party matters. Not only that, as the Chief Executive of the Province, his office has to keep and take up
official secrets of the government which should not be put in danger of being leaked out to third parties,
and it is for this reason, among others, that the respondent Governor should have a flexible compact staff
of highly confidential assistants.

Here is proof that the true motivation for reorganizing out the petitioners was "not only (in) their capacity for
work but also (in) their personal fitness and loyalty". Political loyalty or disloyalty are not statutory nor
constitutional preconditions for appointment or grounds for separation of eligibles in the Civil Service.

The situation now facing the Court is four square with those of Briones vs. Osmeña, and Ocampo vs. Duque,
supra. And on the authority of these cases, and the rulings of this Court in other precedents, we have no
alternative but to find and declare that the suppression of petitioners' positions was done in bad faith and are,
hence, illegal and unwarranted, null and void.

As a consequence of this pronouncement, it is likewise held, that respondents have unlawfully excluded the
petitioners from the enjoyment of an office to which they are entitled; and that in failing or refusing to include
in the 1968-1969 budget items required to cover appropriations for salaries of petitioners, respondents have
unlawfully failed or neglected the performance of an act which the law enjoins as a duty resulting from office.

In view of the conclusions arrived at, discussion of the other points raised by petitioners becomes unnecessary.

Finally, considering that the respondents' attempt to unlawfully deprive petitioners of their civil service
positions was done in disregard of clear doctrines of this Court, particularly our ruling in Ocampo vs. Duque, L-
22305, 30 April 1966, rendered against the preceding provincial board of Pangasinan, and that petitioners herein
were ousted even before the lapse of the 30-day notice of termination of services, it is but proper that petitioners
be allowed to recover attorney's fees.

WHEREFORE, the writ of mandamus prayed for by petitioners is hereby granted. The respondents, as members
of the provincial board of Pangasinan are commanded to immediately reinstate the petitioners (except Myrna
Sison) to the positions heretofore occupied by them, to pay them the salaries heretofore withheld since January
5, 1968, and to appropriate without unnecessary delay, the amounts necessary for the salaries of the petitioners
for the fiscal year 1968-1969, and subsequent years, together with such amounts as may be necessary to pay the
contribution of the Province of Pangasinan to the Government Service Insurance System (GSIS) in connection
with petitioners' insurance and retirement. Respondents shall further pay, personally and in solidum, to the
petitioners P3,000.00 by way of attorney's fees, and the costs. So ordered.