EN BANC

[G.R. No. 138200. February 27, 2002]

SECRETARY OF THE DEPARTMENT OF TRANSPORTATION

AND
COMMUNICATIONS
(DOTC), petitioner, vs.
ROBERTO MABALOT, respondent.
DECISION
BUENA, J.:

At the core of controversy in the instant Petition for Review

on Certiorari is the validity of Memorandum Order No. 96-735,
dated 19 February 1996, and Department Order No. 97-1025, dated
29 January 1997, both issued by the Secretary of the Department of
Transportation and Communications (DOTC).
The facts are uncontested.
On 19 February 1996, then DOTC Secretary Jesus B. Garcia, Jr.,
issued Memorandum Order No. 96-735 addressed to Land
Transportation Franchising Regulatory Board (LTFRB) Chairman
Dante Lantin, viz:
In the interest of the service, you are hereby directed to effect the
transfer of regional functions of that office to the DOTCCAR Regional
Office, pending the creation of a regular Regional Franchising and
Regulatory Office thereat, pursuant to Section 7 of Executive Order
No. 202.
Organic personnel of DOTC-CAR shall perform the LTFRB functions
on a concurrent capacity subject to the direct supervision and
control of LTFRB Central Office.
On 13 March 1996, herein respondent Roberto Mabalot filed a
petition for certiorari and prohibition with prayer for preliminary
injunction and/or restraining order, against petitioner and LTFRB
Chairman Lantin, before the Regional Trial Court (RTC)
[1]

of Quezon City,
Branch
81, praying
among
others
that
Memorandum Order No. 96-735 be declared illegal and without
effect.
[2]

On 20 March 1996, the lower court issued a temporary

restraining
order
enjoining
petitioner
from
implementing
Memorandum Order No. 96-735. On 08 April 1996, the lower court,
upon filing of a bond by respondent, issued a writ of preliminary
injunction.
On 25
April
1996,
then
DOTC
Secretary AmadoLagdameo, Jr. filed his answer to the petition.
Thereafter, on 29 January 1997, Secretary Lagdameo issued the
assailed Department Order No. 97-1025, to wit:
Pursuant to Administrative Order No. 36, dated September 23,
1987, and for purposes of economy and more effective coordination
of the DOTC functions in the Cordillera Administrative Region (CAR),
the DOTC-CAR Regional Office, created by virtue of Executive Order
No. 220 dated July 15, 1987, is hereby established as the Regional
Office of the LTFRB and shall exercise the regional functions of the
LTFRB in the CAR subject to the direct supervision and control of
LTFRB Central Office.
The budgetary requirement for this purpose shall come from the
Department until such time that its appropriate budget is included in
the General Appropriations Act.
After trial, the Office of the Solicitor General (OSG) moved to
reopen the hearing in the lower court for the purpose of enabling
petitioner to present Department Order No. 97-1025. In an Order
dated 18 February 1997, the lower court granted the motion.
On 03 April 1997, respondent filed a Motion for Leave to File
Supplemental Petition assailing the validity of Department Order No.
97-1025. On 14 May 1997, the OSG presented Department Order
No. 97-1025 after which petitioner filed a formal offer of exhibits.
In an Order dated 09 June 1997, the lower court admitted
petitioners documentary exhibits over the objection of respondent.
Likewise, the lower court admitted the supplemental petition filed by
respondent to which petitioner filed an answer thereto.

On 31 March 1999, the lower court rendered a decision

the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered declaring Memorandum
Order Nos. 96-733 dated February 19, 1996 and 97-1025 dated
January 27, 1997 of the respondent DOTC Secretary null and void
and without any legal effect as being violative of the provision of
the Constitution against encroachment on the powers of the
legislative department and also of the provision enjoining appointive
officials from holding any other office or employment in the
Government.
[3]

The preliminary injunction issued on May 13, 1996 is hereby made

permanent.
No pronouncement as to costs.
It is so ordered.
Hence, the instant petition where this Court is tasked in the main
to resolve the issue of validity of the subject administrative
issuances by the DOTC Secretary.
In his Memorandum , respondent Mabalot principally argues
that a transfer of the powers and functions of the LTFRB Regional
Office to a DOTC Regional Office or the establishment of the
latter as an LTFRB Regional Office is unconstitutional for being an
undue exercise of legislative power. To this end, respondent quoted
heavily the lower courts rationale on this matter, to wit:
[4]

With the restoration of Congress as the legislative body, the transfer

of powers and functions, specially those quasi-judicial (in) nature,
could only be effected through legislative fiat. Not even the
President of the Philippines can do so. And much less by the
DOTC Secretary who is only a mere extension of the
Presidency. Among the powers of the LTFRB are to issue
injunctions, whether prohibitory (or) mandatory, punish for
contempt and to issue subpoena and subpoena duces tecum. These
powers devolve by extension on the LTFRB regional offices in
the performance of their functions. They cannot be

transferred to another agency of government without

congressional approval embodied in a duty enacted
law. (Emphasis ours)
We do not agree. Accordingly, in the absence of any patent or
latent constitutional or statutory infirmity attending the issuance of
the challenged orders, this Court upholds Memorandum Order No.
96-735 and Department Order No. 97-1025 as legal and valid
administrative issuances by the DOTC Secretary. Contrary to the
opinion of the lower court, the President - through his duly
constituted political agent andalter ego, the DOTC Secretary in the
present case - may legally and validly decree the reorganization of
the Department, particularly the establishment of DOTC-CAR as the
LTFRB Regional Office at the Cordillera Administrative Region, with
the concomitant transfer and performance of public functions and
responsibilities appurtenant to a regional office of the LTFRB.
At this point, it is apropos to reiterate the elementary rule in
administrative law and the law on public officers that a public office
may be created through any of the following modes, to wit,
either (1) by the Constitution (fundamental law), (2) by
law (statute duly enacted by Congress), or (3) by authority of
law.
[5]

Verily, Congress can delegate the power to create positions. This

has been settled by decisions of the Court upholding the validity of
reorganization statutes authorizing the President to create, abolish
or merge offices in the executive department. Thus, at various
times, Congress has vested power in the President to reorganize
executive agencies and redistribute functions, and particular
transfers under such statutes have been held to be within the
authority of the President.
[6]

[7]

In the instant case, the creation and establishment of LTFRBCAR Regional Office was made pursuant to the third mode - by
authority of law, which could be decreed for instance, through an
Executive Order (E.O.) issued by the President or an order of an
administrative
agency
such
as
the
Civil
Service
Commission pursuant to Section 17, Book V of E.O. 292, otherwise
known as The Administrative Code of 1987. In the case before us,
the DOTC Secretary issued the assailed Memorandum and
[8]

Department Orders pursuant to Administrative Order No. 36 of the

President, dated 23 September 1987, Section 1 of which explicitly
provides:
[9]

Section 1. Establishment of Regional Offices in the CAR- The

various departments and other agencies of the National Government
that are currently authorized to maintain regional offices are
hereby directed to establish forthwith their respective
regional offices In the Cordillera Administrative Region with
territorial coverage as defined under Section 2 of Executive Order
No. 220 dated July 15, 1987, with regional headquarters
at Baguio City.
Emphatically the President, through Administrative Order No. 36,
did not merely authorize but directed, in no uncertain terms, the
various departments and agencies of government to immediately
undertake the creation and establishment of their regional offices in
the CAR. To us, Administrative Order No. 36 is a clear and
unequivocal directive and mandate - no less than from the Chief
Executive - ordering the heads of government departments and
bureaus to effect the establishment of their respective regional
offices in the CAR.
By the Chief Executives unequivocal act of issuing Administrative
Order No. 36 ordering his alter ego - the DOTC Secretary in the
present case - to effectuate the creation of Regional Offices in the
CAR, the President, in effect, deemed it fit and proper under the
circumstances to act and exercise his authority, albeit through the
various Department Secretaries, so as to put into place the
organizational structure and set-up in the CAR and so as not to
compromise in any significant way the performance of public
functions and delivery of basic government services in the Cordillera
Administrative Region.
Simply stated, it is as if the President himself carried out the
creation and establishment of LTFRB-CAR Regional Office, when in
fact, the DOTC Secretary, as alter ego of the President, directly
and merely sought to implement the Chief Executives Administrative
Order.
To this end, Section 17, Article VII of the Constitution mandates:

The President shall have control of all executive departments,

bureaus and offices. He shall ensure that the laws be faithfully
executed.
By definition, control is the power of an officer to alter or modify
or nullify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the
former for that of the latter. It includes the authority to order
the doing of an act by a subordinate or to undo such act or to
assume a power directly vested in him by law.
[10]

[11]

From the purely legal standpoint, the members of the Cabinet

are subject at all times to the disposition of the President since they
are merely his alter ego. As this Court enunciated in Villena vs.
Secretary of the Interior, without minimizing the importance of the
heads of various departments, their personality is in reality but the
projection of that of the President. Thus, their acts, performed and
promulgated in the regular course of business, are, unless
disapproved or reprobated by the Chief Executive, presumptively
the acts of the Chief Executive.
[12]

[13]

Applying the foregoing, it is then clear that the lower courts

pronouncement - that the transfer of powers and functions and in
effect, the creation and establishment of LTFRB-CAR Regional
Office, may not be validly made by the Chief Executive, much less
by his mere alter ago and could only be properly effected through a
law enacted by Congress -is to say the least, erroneous.
In Larin vs. Executive Secretary, this Court through
the ponencia of Mr. Justice Justo Torres, inked an extensive
disquisition on the continuing authority of the President to
reorganize the National Government, which power includes the
creation, alteration or abolition of public offices. Thus in Larin, we
held that Section 62 of Republic Act 7645 (General Appropriations
Act [G.A.A.] for FY 1993) evidently shows that the President is
authorized to effect organizational changes including the
creation of offices in the department or agency concerned:
[14]

Section 62. Unauthorized organizational changes.- Unless

otherwise created by law or directed by the President of the
Philippines, no organizational unit or changes in key positions in any

department or agency shall be authorized in their respective

organization structures and be funded from appropriations by this
act.
Petitioners contention in Larin that Sections 48 and 62 of R.A.
7645 were riders, deserved scant consideration from the Court, Well
settled is the rule that every law has in its favor the presumption of
constitutionality. Unless and until a specific provision of the law is
declared invalid and unconstitutional, the same is valid and binding
for all intents and purposes.
[15]

Worthy to note is that R.A. 8174 (G.A.A for FY 1996) contains

similar provisions as embodied in Section 72 (General Provisions) of
said law entitled Organizational Changes and Section 73 (General
Provisions) thereof entitled Implementation of Reorganization.
Likewise, R.A. 8250 (G.A.A. for FY 1997) has Section 76 (General
Provisions) entitled Organizational Changes and Section 77 (General
Provisions) entitled Implementation of Reorganization.
In the same vein, Section 20, Book III of E.O. No. 292,
otherwise known as the Administrative Code of 1987, provides a
strong legal basis for the Chief Executives authority to reorganize
the National Government, viz:
Section 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 Court, in Larin, had occasion to rule that:
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.
[16]

The pertinent provisions of Presidential Decree No. 1416, as

amended by Presidential Decree No. 1772, reads:
1. The President of the Philippines shall have continuing
authority to reorganize the National Government. In
exercising this authority, the President shall be guided by generally
acceptable principles of good government and responsive national
development, including but not limited to the following guidelines
for a more efficient, effective, economical and development-oriented
governmental framework:
xxx
b) Abolish departments, offices, agencies or functions which may
not be necessary, or create those which are necessary, for the
efficient conduct of government functions, services and
activities;
c) Transfer functions, appropriations, equipment, properties,
records and personnel from one department, bureau, office,
agency or instrumentality to another;
d) Create, classify, combine, split, and abolish positions;
e) Standardize salaries, materials, and equipment;
f) Create, abolish, group, consolidate, merge or integrate
entities, agencies, instrumentalities, and units of the
National Government, as well as expand, amend, change, or
otherwise modify their powers, functions, and authorities,
including, with respect to government-owned or controlled

corporations, their corporate life, capitalization, and other

relevant aspects of their charters. (As added by P.D. 1772)
g) Take such other related actions as may be necessary to carry out
the purposes and objectives of this decree. (As added by P.D. 1772)
(Emphasis supplied.)
In fine, the designation and subsequent establishment of
DOTC-CAR as the Regional Office of LTFRB in the Cordillera
Administrative Region and the concomitant exercise and
performance of functions by the former as the LTFRB-CAR Regional
Office, fall within the scope of the continuing authority of the
President to effectively reorganize the Department of Transportation
and Communications.
[17]

[18]

Beyond this, it must be emphasized that the reorganization in

the instant case was decreed in the interest of the service and for
purposes of economy and more effective coordination of the DOTC
functions in the Cordillera Administrative Region. In this
jurisdiction, reorganization is regarded as valid provided it is
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. To our mind, the reorganization
pursued in the case at bar bears the earmark of good faith. As
petitioner points out, tapping the DOTC-CARpending the eventual
creation of the LTFRB Regional Office is economical in terms of
manpower and resource requirements, thus, reducing expenses
from the limited resources of the government.
[19]

[20]

[21]

[22]

Furthermore, under Section 18, Chapter 5, Title XV, Book IV of

E.O. 292 and Section 4 of E.O. 202, the Secretary of
Transportation and Communications, through his duly designated
Undersecretary, shall exercise administrative supervision and
control over the Land Transportation Franchising and Regulatory
Board (Board).
[23]

[24]

[25]

Worthy of mention too is that by express provision of

Department Order No. 97-1025, the LTFRB-CAR Regional Office is
subject to the direct supervision and control of LTFRB Central Office.
Under the law, the decisions, orders or resolutions of the Regional
Franchising and Regulatory Offices shall be appealable to the Board
[26]

within thirty (30) days from receipt of the decision; the decision,
order or resolution of the Board shall be appealable to the DOTC
Secretary. With this appellate set-up and mode of appeal clearly
established and in place, no conflict or absurd circumstance would
arise in such manner that a decision of the LTFRB-CAR Regional
Office is subject to review by the DOTC-CAR Regional Office.
As to the issue regarding Sections 7 and 8, Article IX-B of the
Constitution, we hold that the assailed Orders of the DOTC
Secretary do not violate the aforementioned constitutional
provisions considering that in the case of Memorandum Order No.
96-735, the organic personnel of the DOTC-CAR were, in effect,
merely designated to perform the additional duties and functions of
an LTFRB Regional Office subject to the direct supervision and
control of LTFRB Central Office, pending the creation of a regular
LTFRB Regional Office.
As
held
Trustees:

in Triste vs. Leyte State College

Board

of

[27]

To designate a public officer to another position may mean to vest

him with additional duties while he performs the functions of his
permanent office. Or in some cases, a public officer may be
designated to a position in an acting capacity as when an
undersecretary is designated to discharge the functions of a
Secretary pending the appointment of a permanent Secretary.
Assuming arguendo that
the
appointive
officials
and
employees of DOTC-CAR shall be holding more than one office or
employment at the same time as a result of the establishment of
such agency as the LTFRB-CAR pursuant to Department Order No.
97-1025, this Court is of the firm view that such fact still does not
constitute a breach or violation of Section 7, Article IX-B of the
Constitution. On this matter, it must be stressed that under the
aforementioned constitutional provision, an office or employment
held in the exercise of the primary functions of ones principal office
is an exception to, or not within the contemplation, of the
prohibition embodied in Section 7, Article IX-B.
Equally significant is that no evidence was adduced and
presented to clearly establish that the appointive officials and

employees of DOTC-CAR shall receive any additional, double or

indirect compensation, in violation of Section 8, Article IX-B of the
Constitution. In the absence of any clear and convincing evidence to
show any breach or violation of said constitutional prohibitions, this
Court finds no cogent reason to declare the invalidity of the
challenged orders.
WHEREFORE, in view of the foregoing, the instant petition is
hereby GRANTED. ACCORDINGLY, the decision dated 31 March
1999 of the Regional Trial Court of Quezon City-Branch 81 in Special
Civil Action Case No. Q-96-26868 is REVERSED and SET ASIDE.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 115863 March 31, 1995

AIDA D. EUGENIO, petitioner,
vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA,
JR. & HON. SALVADOR ENRIQUEZ, JR.,respondents.

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

to promote morale, efficiency, integrity, responsiveness,

progresiveness and courtesy in the civil service, . . .";
WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the
Administrative Code of 1987 grants the Commission the
power, among others, to administer and enforce the
constitutional and statutory provisions on the merit system
for all levels and ranks in the Civil Service;
WHEREAS, Section 7, Title I, Subtitle A, Book V of the
Administrative Code of 1987 Provides, among others, that
The Career Service shall be characterized by (1) entrance
based on merit and fitness to be determined as far as
practicable by competitive examination, or based highly
technical qualifications; (2) opportunity for advancement to
higher career positions; and (3) security of tenure;
WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the
administrative Code of 1987 provides that "The third level
shall cover Positions in the Career Executive Service";
WHEREAS, the Commission recognizes the imperative need
to consolidate, integrate and unify the administration of all
levels of positions in the career service.
WHEREAS, the provisions of Section 17, Title I, Subtitle A.
Book V of the Administrative Code of 1987 confers on the
Commission the power and authority to effect changes in its
organization as the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution
provides that the Civil Service Commission shall enjoy fiscal
autonomy and the necessary implications thereof;
NOW THEREFORE, foregoing premises considered, the Civil
Service Commission hereby resolves to streamline
reorganize and effect changes in its organizational
structure. Pursuant thereto, the Career Executive Service
Board, shall now be known as the Office for Career
Executive Service of the Civil Service Commission.
Accordingly, the existing personnel, budget, properties and

equipment of the Career Executive Service Board shall now

form part of the Office for Career Executive Service.
The above resolution became an impediment. to the appointment of
petitioner as Civil Service Officer, Rank IV. In a letter to petitioner,
dated June 7, 1994, the Honorable Antonio T. Carpio, Chief
Presidential legal Counsel, stated:
xxx xxx xxx
On 1 October 1993 the Civil Service Commission issued
CSC Resolution No. 93-4359 which abolished the Career
Executive Service Board.
Several legal issues have arisen as a result of the issuance
of CSC Resolution No. 93-4359, including whether the Civil
Service Commission has authority to abolish the Career
Executive Service Board. Because these issues remain
unresolved, the Office of the President has refrained from
considering appointments of career service eligibles to
career executive ranks.
xxx xxx xxx
You may, however, bring a case before the appropriate
court to settle the legal issues arising from issuance by the
Civil Service Commission of CSC Resolution No. 93-4359,
for guidance of all concerned.
Thank You.
Finding herself bereft of further administrative relief as the Career
Executive Service Board which recommended her CESO Rank IV has
been abolished, petitioner filed the petition at bench to annul, among
others, resolution No. 93-4359. The petition is anchored on the
following arguments:
A.
IN VIOLATION OF THE CONSTITUTION, RESPONDENT
COMMISSION USURPED THE LEGISLATIVE FUNCTIONS OF
CONGRESS WHEN IT ABOLISHED THE CESB, AN OFFICE

CREATED BY LAW, THROUGH THE ISSUANCE OF CSC:

RESOLUTION NO. 93-4359;
B.
ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT
CSC USURPED THE LEGISLATIVE FUNCTIONS OF
CONGRESS WHEN IT ILLEGALLY AUTHORIZED THE
TRANSFER OF PUBLIC MONEY, THROUGH THE ISSUANCE
OF CSC RESOLUTION NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the
contentions of petitioner. Respondent Commission, however, chose to
defend its ground. It posited the following position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I. THE INSTANT PETITION STATES NO CAUSE OF ACTION
AGAINST THE PUBLIC RESPONDENT-CSC.
II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT
FOR APPOINTMENT TO A CESO RANK OF PETITIONER
EUGENIO WAS A VALID ACT OF THE CAREER EXECUTIVE
SERVICE BOARD OF THE CIVIL SERVICE COMMISSION AND
IT DOES NOT HAVE ANY DEFECT.
III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM
QUESTIONING THE VALIDITY OF THE RECOMMENDATION
OF THE CESB IN FAVOR OF PETITIONER EUGENIO SINCE
THE PRESIDENT HAS PREVIOUSLY APPOINTED TO CESO
RANK FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID
PETITIONER. FURTHERMORE, LACK OF MEMBERS TO
CONSTITUTE A QUORUM. ASSUMING THERE WAS NO
QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT
CIVIL SERVICE COMMISSION BUT OF THE PRESIDENT WHO
HAS THE POWER TO APPOINT THE OTHER MEMBERS OF
THE CESB.
IV. THE INTEGRATION OF THE CESB INTO THE
COMMISSION IS AUTHORIZED BY LAW (Sec. 12 (1), Title I,
Subtitle A, Book V of the Administrative Code of the 1987).

THIS PARTICULAR ISSUE HAD ALREADY BEEN SETTLED

WHEN THE HONORABLE COURT DISMISSED THE PETITION
FILED BY THE HONORABLE MEMBERS OF THE HOUSE OF
REPRESENTATIVES, NAMELY: SIMEON A. DATUMANONG,
FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND
MANUEL M. GARCIA IN G.R. NO. 114380. THE
AFOREMENTIONED PETITIONERS ALSO QUESTIONED THE
INTEGRATION OF THE CESB WITH THE COMMISSION.
We find merit in the petition. 3
The controlling fact is that the Career Executive Service Board (CESB)
was created in the Presidential Decree (P.D.) No. 1 on September 1,
1974 4 which adopted the Integrated Plan. Article IV, Chapter I, Part of the III of the said
Plan provides:

Article IV Career Executive Service

1. A Career Executive Service is created to form a
continuing pool of well-selected and development oriented
career administrators who shall provide competent and
faithful service.
2. A Career Executive Service hereinafter referred to in this
Chapter as the Board, is created to serve as the governing
body of the Career Executive Service. The Board shall
consist of the Chairman of the Civil Service Commission as
presiding officer, the Executive Secretary and the
Commissioner of the Budget as ex-officio members and two
other members from the private sector and/or the academic
community who are familiar with the principles and
methods of personnel administration.
xxx xxx xxx
5. The Board shall promulgate rules, standards and
procedures on the selection, classification, compensation
and career development of members of the Career
Executive Service. The Board shall set up the organization
and operation of the service. (Emphasis supplied)

It cannot be disputed, therefore, that as the CESB was created by law,

it can only be abolished by the legislature. This follows an unbroken
stream of rulings that the creation and abolition of public offices is
primarily a legislative function. As aptly summed up in AM JUR 2d on
Public Officers and
Employees, 5 viz:
Except for such offices as are created by the Constitution,
the creation of public offices is primarily a legislative
function. In so far as the legislative power in this respect is
not restricted by constitutional provisions, it supreme, and
the legislature may decide for itself what offices are
suitable, necessary, or convenient. When in the exigencies
of government it is necessary to create and define duties,
the legislative department has the discretion to determine
whether additional offices shall be created, or whether
these duties shall be attached to and become exofficio duties of existing offices. An office created by the
legislature is wholly within the power of that body, and it
may prescribe the mode of filling the office and the powers
and duties of the incumbent, and if it sees fit, abolish the
office.
In the petition at bench, the legislature has not enacted any law
authorizing the abolition of the CESB. On the contrary, in all the
General Appropriations Acts from 1975 to 1993, the legislature has set
aside funds for the operation of CESB. Respondent Commission,
however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of
the Administrative Code of 1987 as the source of its power to abolish
the CESB. Section 17 provides:
Sec. 17. Organizational Structure. Each office of the
Commission shall be headed by a Director with at least one
Assistant Director, and may have such divisions as are
necessary independent constitutional body, the Commission
may effect changes in the organization as the need arises.
But as well pointed out by petitioner and the Solicitor General, Section
17 must be read together with Section 16 of the said Code which
enumerates the offices under the respondent Commission, viz:

Sec. 16. Offices in the Commission. The Commission

shall have the following offices:
(1) The Office of the Executive Director headed by an
Executive Director, with a Deputy Executive Director shall
implement policies, standards, rules and regulations
promulgated by the Commission; coordinate the programs
of the offices of the Commission and render periodic reports
on their operations, and perform such other functions as
may be assigned by the Commission.
(2) The Merit System Protection Board composed of a
Chairman and two (2) members shall have the following
functions:
xxx xxx xxx
(3) The Office of Legal Affairs shall provide the Chairman
with legal advice and assistance; render counselling
services; undertake legal studies and researches; prepare
opinions and ruling in the interpretation and application of
the Civil Service law, rules and regulations; prosecute
violations of such law, rules and regulations; and represent
the Commission before any court or tribunal.
(4) The Office of Planning and Management shall formulate
development plans, programs and projects; undertake
research and studies on the different aspects of public
personnel management; administer management
improvement programs; and provide fiscal and budgetary
services.
(5) The Central Administrative Office shall provide the
Commission with personnel, financial, logistics and other
basic support services.
(6) The Office of Central Personnel Records shall formulate
and implement policies, standards, rules and regulations
pertaining to personnel records maintenance, security,
control and disposal; provide storage and extension
services; and provide and maintain library services.

(7) The Office of Position Classification and

Compensation shall formulate and implement policies,
standards, rules and regulations relative to the
administration of position classification and compensation.
(8) The Office of Recruitment, Examination and
Placement shall provide leadership and assistance in
developing and implementing the overall Commission
programs relating to recruitment, execution and placement,
and formulate policies, standards, rules and regulations for
the proper implementation of the Commission's
examination and placement programs.
(9) The Office of Career Systems and Standards shall
provide leadership and assistance in the formulation and
evaluation of personnel systems and standards relative to
performance appraisal, merit promotion, and employee
incentive benefit and awards.
(10) The Office of Human Resource Development shall
provide leadership and assistance in the development and
retention of qualified and efficient work force in the Civil
Service; formulate standards for training and staff
development; administer service-wide scholarship
programs; develop training literature and materials;
coordinate and integrate all training activities and evaluate
training programs.
(11) The Office of Personnel Inspection and Audit shall
develop policies, standards, rules and regulations for the
effective conduct or inspection and audit personnel and
personnel management programs and the exercise of
delegated authority; provide technical and advisory services
to Civil Service Regional Offices and government agencies
in the implementation of their personnel programs and
evaluation systems.
(12) The Office of Personnel Relations shall provide
leadership and assistance in the development and
implementation of policies, standards, rules and regulations
in the accreditation of employee associations or

organizations and in the adjustment and settlement of

employee grievances and management of employee
disputes.
(13) The Office of Corporate Affairs shall formulate and
implement policies, standards, rules and regulations
governing corporate officials and employees in the areas of
recruitment, examination, placement, career development,
merit and awards systems, position classification and
compensation, performing appraisal, employee welfare and
benefit, discipline and other aspects of personnel
management on the basis of comparable industry practices.
(14) The Office of Retirement Administration shall be
responsible for the enforcement of the constitutional and
statutory provisions, relative to retirement and the
regulation for the effective implementation of the
retirement of government officials and employees.
(15) The Regional and Field Offices. The Commission
shall have not less than thirteen (13) Regional offices each
to be headed by a Director, and such field offices as may be
needed, each to be headed by an official with at least the
rank of an Assistant Director.
As read together, the inescapable conclusion is that respondent
Commission's power to reorganize is limited to offices under its
control as enumerated in Section 16, supra. From its inception,
the CESB was intended to be an autonomous entity, albeit
administratively attached to respondent Commission. As
conceptualized by the Reorganization Committee "the CESB shall
be autonomous. It is expected to view the problem of building up
executive manpower in the government with a broad and positive
outlook." 6 The essential autonomous character of the CESB is not negated by its
attachment to respondent Commission. By said attachment, CESB was not made to
fall within the control of respondent Commission. Under the Administrative Code of
1987, the purpose of attaching one functionally inter-related government agency to
another is to attain "policy and program coordination." This is clearly etched out in
Section 38(3), Chapter 7, Book IV of the aforecited Code, to wit:

(3) Attachment. (a) This refers to the lateral relationship

between the department or its equivalent and attached

agency or corporation for purposes of policy and program

coordination. The coordination may be accomplished by
having the department represented in the governing board
of the attached agency or corporation, either as chairman
or as a member, with or without voting rights, if this is
permitted by the charter; having the attached corporation
or agency comply with a system of periodic reporting which
shall reflect the progress of programs and projects; and
having the department or its equivalent provide general
policies through its representative in the board, which shall
serve as the framework for the internal policies of the
attached corporation or agency.
Respondent Commission also relies on the case of Datumanong, et al.,
vs. Civil Service Commission, G. R. No. 114380 where the petition
assailing the abolition of the CESB was dismissed for lack of cause of
action. Suffice to state that the reliance is misplaced considering that
the cited case was dismissed for lack of standing of the petitioner,
hence, the lack of cause of action.
IN VIEW WHEREOF, the petition is granted and Resolution No. 934359 of the respondent Commission is hereby annulled and set aside.
No costs.
SO ORDERED.

G.R. No. L-57883 March 12, 1982

GUALBERTO J. DE LA LLANA Presiding Judge, Branch II of the
City Court of Olongapo, ESTANISLAO L. CESA, JR., FIDELA Y.
VARGAS, BENJAMIN C. ESCOLANGO, JUANITO C. ATIENZA,
MANUEL REYES ROSAPAPAN, JR., VIRGILIO E. ACIERTO, and
PORFIRIO AGUILLON AGUILA, petitioners,
vs.
MANUEL ALBA, Minister of Budget, FRANCISCO TANTUICO,
Chairman, Commission on Audit, and RICARDO PUNO, Minister
of Justice, Respondents.

FERNANDO, C.J.:
This Court, pursuant to its grave responsibility of passing upon the
validity of any executive or legislative act in an appropriate cases, has
to resolve the crucial issue of the constitutionality of Batas Pambansa
Blg. 129, entitled "An act reorganizing the Judiciary, Appropriating
Funds Therefor and for Other Purposes." The task of judicial review,
aptly characterized as exacting and delicate, is never more so than
when a conceded legislative power, that of judicial
reorganization, 1 may possibly collide with the time-honored principle of the
2

independence of the judiciary as protected and safeguarded by this constitutional

provision: "The Members of the Supreme Court and judges of inferior courts shall hold office
during good behavior until they reach the age of seventy years or become incapacitated to
discharge the duties of their office. The Supreme Court shall have the power to discipline
judges of inferior courts and, by a vote of at least eight Members, order their
3
dismissal." For the assailed legislation mandates that Justices and judges of inferior courts
from the Court of Appeals to municipal circuit courts, except the occupants of the
Sandiganbayan and the Court of Tax Appeals, unless appointed to the inferior courts
established by such Act, would be considered separated from the judiciary. It is the
termination of their incumbency that for petitioners justifies a suit of this character, it being
alleged that thereby the security of tenure provision of the Constitution has been ignored
and disregarded,

That is the fundamental issue raised in this proceeding, erroneously

entitled Petition for Declaratory Relief and/or for Prohibition 4 considered
by this Court as an action for prohibited petition, seeking to enjoin respondent Minister of
the Budget, respondent Chairman of the Commission on Audit, and respondent Minister of
5
Justice from taking any action implementing Batas Pambansa Blg. 129. Petitioners sought
to bolster their claim by imputing lack of good faith in its enactment and characterizing as
an undue delegation of legislative power to the President his authority to fix the
compensation and allowances of the Justices and judges thereafter appointed and the
determination of the date when the reorganization shall be deemed completed. In the very
6
comprehensive and scholarly Answer of Solicitor General Estelito P. Mendoza, it was
pointed out that there is no valid justification for the attack on the constitutionality of this
statute, it being a legitimate exercise of the power vested in the Batasang Pambansa to
reorganize the judiciary, the allegations of absence of good faith as well as the attack on the
independence of the judiciary being unwarranted and devoid of any support in law. A
Supplemental Answer was likewise filed on October 8, 1981, followed by a Reply of
petitioners on October 13. After the hearing in the morning and afternoon of October 15, in
which not only petitioners and respondents were heard through counsel but also the amici
7
curiae, and thereafter submission of the minutes of the proceeding on the debate on Batas
Pambansa Blg. 129, this petition was deemed submitted for decision.

The importance of the crucial question raised called for intensive and
rigorous study of all the legal aspects of the case. After such
exhaustive deliberation in several sessions, the exchange of views
being supplemented by memoranda from the members of the Court, it
is our opinion and so hold that Batas Pambansa Blg. 129 is not
unconstitutional.
1. The argument as to the lack of standing of petitioners is easily
resolved. As far as Judge de la Llana is concerned, he certainly falls
within the principle set forth in Justice Laurel's opinion in People v.
Vera. 8 Thus: "The unchallenged rule is that the person who impugns the validity of a
statute must have a personal and substantial interest in the case such that he has
9
sustained, or will sustain, direct injury as a result of its enforcement." The other
petitioners as members of the bar and officers of the court cannot be considered as devoid
of "any personal and substantial interest" on the matter. There is relevance to this excerpt
10
from a separate opinion in Aquino, Jr. v. Commission on Elections:
"Then there is the
attack on the standing of petitioners, as vindicating at most what they consider a public
right and not protecting their rights as individuals. This is to conjure the specter of the
public right dogma as an inhibition to parties intent on keeping public officials staying on the
path of constitutionalism. As was so well put by Jaffe: 'The protection of private rights is an
essential constituent of public interest and, conversely, without a well-ordered state there
could be no enforcement of private rights. Private and public interests are, both in
substantive and procedural sense, aspects of the totality of the legal order.' Moreover,
petitioners have convincingly shown that in their capacity as taxpayers, their standing to
sue has been amply demonstrated. There would be a retreat from the liberal approach
followed in Pascual v. Secretary of Public Works,foreshadowed by the very decision
of People v. Vera where the doctrine was first fully discussed, if we act differently now. I do
not think we are prepared to take that step. Respondents, however, would hark back to the

American Supreme Court doctrine in Mellon v. Frothingham with their claim that what
petitioners possess 'is an interest which is shared in common by other people and is
comparatively so minute and indeterminate as to afford any basis and assurance that the
judicial process can act on it.' That is to speak in the language of a bygone era even in the
United States. For as Chief Justice Warren clearly pointed out in the later case of Flast v.
11
Cohen, the barrier thus set up if not breached has definitely been lowered."

2. The imputation of arbitrariness to the legislative body in the

enactment of Batas Pambansa Blg. 129 to demonstrate lack of good
faith does manifest violence to the facts. Petitioners should have
exercised greater care in informing themselves as to its antecedents.
They had laid themselves open to the accusation of reckless disregard
for the truth, On August 7, 1980, a Presidential Committee on Judicial
Reorganization was organized.12 This Executive Order was later amended by
Executive Order No. 619-A., dated September 5 of that year. It clearly specified the task
assigned to it: "1. The Committee shall formulate plans on the reorganization of the
Judiciary which shall be submitted within seventy (70) days from August 7, 1980 to provide
the President sufficient options for the reorganization of the entire Judiciary which shall
embrace all lower courts, including the Court of Appeals, the Courts of First Instance, the
13
City and Municipal Courts, and all Special Courts, but excluding the Sandigan Bayan."
On
October 17, 1980, a Report was submitted by such Committee on Judicial Reorganization. It
began with this paragraph: "The Committee on Judicial Reorganization has the honor to
submit the following Report. It expresses at the outset its appreciation for the opportunity
accorded it to study ways and means for what today is a basic and urgent need, nothing
less than the restructuring of the judicial system. There are problems, both grave and
pressing, that call for remedial measures. The felt necessities of the time, to borrow a
phrase from Holmes, admit of no delay, for if no step be taken and at the earliest
opportunity, it is not too much to say that the people's faith in the administration of justice
could be shaken. It is imperative that there be a greater efficiency in the disposition of
cases and that litigants, especially those of modest means much more so, the poorest
and the humblest can vindicate their rights in an expeditious and inexpensive manner.
The rectitude and the fairness in the way the courts operate must be manifest to all
members of the community and particularly to those whose interests are affected by the
exercise of their functions. It is to that task that the Committee addresses itself and hopes
that the plans submitted could be a starting point for an institutional reform in the Philippine
judiciary. The experience of the Supreme Court, which since 1973 has been empowered to
supervise inferior courts, from the Court of Appeals to the municipal courts, has proven that
reliance on improved court management as well as training of judges for more efficient
administration does not suffice. I hence, to repeat, there is need for a major reform in the
judicial so stem it is worth noting that it will be the first of its kind since the Judiciary Act
14
became effective on June 16, 1901."
I t went to say: "I t does not admit of doubt that the
last two decades of this century are likely to be attended with problems of even greater
complexity and delicacy. New social interests are pressing for recognition in the courts.
Groups long inarticulate, primarily those economically underprivileged, have found legal
spokesmen and are asserting grievances previously ignored. Fortunately, the judicially has
not proved inattentive. Its task has thus become even more formidable. For so much grist is
added to the mills of justice. Moreover, they are likewise to be quite novel. The need for an
innovative approach is thus apparent. The national leadership, as is well-known, has been
constantly on the search for solutions that will prove to be both acceptable and satisfactory.
15
Only thus may there be continued national progress."
After which comes: "To be less

abstract, the thrust is on development. That has been repeatedly stressed and rightly so.
All efforts are geared to its realization. Nor, unlike in the past, was it to b "considered as
simply the movement towards economic progress and growth measured in terms of
16
sustained increases in per capita income and Gross National Product (GNP).
For the New
Society, its implication goes further than economic advance, extending to "the sharing, or
more appropriately, the democratization of social and economic opportunities, the
17
substantiation of the true meaning of social justice."
This process of modernization and
change compels the government to extend its field of activity and its scope of operations.
The efforts towards reducing the gap between the wealthy and the poor elements in the
nation call for more regulatory legislation. That way the social justice and protection to labor
18
mandates of the Constitution could be effectively implemented."
There is likelihood then
"that some measures deemed inimical by interests adversely affected would be challenged
in court on grounds of validity. Even if the question does not go that far, suits may be filed
concerning their interpretation and application. ... There could be pleas for injunction or
restraining orders. Lack of success of such moves would not, even so, result in their prompt
final disposition. Thus delay in the execution of the policies embodied in law could thus be
19
reasonably expected. That is not conducive to progress in development."
For, as
mentioned in such Report, equally of vital concern is the problem of clogged dockets, which
"as is well known, is one of the utmost gravity. Notwithstanding the most determined efforts
exerted by the Supreme Court, through the leadership of both retired Chief Justice Querube
Makalintal and the late Chief Justice Fred Ruiz Castro, from the time supervision of the
courts was vested in it under the 1973 Constitution, the trend towards more and more
20
cases has continued."
It is understandable why. With the accelerated economic
development, the growth of population, the increasing urbanization, and other similar
factors, the judiciary is called upon much oftener to resolve controversies. Thus confronted
with what appears to be a crisis situation that calls for a remedy, the Batasang Pambansa
had no choice. It had to act, before the ailment became even worse. Time was of the
essence, and yet it did not hesitate to be duly mindful, as it ought to be, of the extent of its
coverage before enacting Batas Pambansa Blg. 129.

3. There is no denying, therefore, the need for "institutional reforms,"

characterized in the Report as "both pressing and urgent." 21 It is worth
noting, likewise, as therein pointed out, that a major reorganization of such scope, if it were
22
to take place, would be the most thorough after four generations.
The reference was to
23
the basic Judiciary Act generations . enacted in June of 1901,
amended in a significant
way, only twice previous to the Commonwealth. There was, of course, the creation of the
Court of Appeals in 1935, originally composed "of a Presiding Judge and ten appellate
Judges, who shall be appointed by the President of the Philippines, with the consent of the
24
Commission on Appointments of the National Assembly,
It could "sit en banc, but it may
sit in two divisions, one of six and another of five Judges, to transact business, and the two
25
divisions may sit at the same time."
Two years after the establishment of independence
26
of the Republic of the Philippines, the Judiciary Act of 1948
was passed. It continued the
existing system of regular inferior courts, namely, the Court of Appeals, Courts of First
27
Instance,
the Municipal Courts, at present the City Courts, and the Justice of the Peace
Courts, now the Municipal Circuit Courts and Municipal Courts. The membership of the Court
28
of Appeals has been continuously increased.
Under a 1978 Presidential Decree, there
would be forty-five members, a Presiding Justice and forty-four Associate Justices, with
29
fifteen divisions.
Special courts were likewise created. The first was the Court of Tax
30
31
Appeals in 1954,
next came the Court of Agrarian Relations in 1955,
and then in the
same year a Court of the Juvenile and Domestic Relations for Manila in
32
1955,
subsequently followed by the creation of two other such courts for Iloilo and

33

Quezon City in 1966.

In 1967, Circuit Criminal Courts were established, with the Judges
having the same qualifications, rank, compensation, and privileges as judges of Courts of
34
First Instance.

4. After the submission of such Report, Cabinet Bill No. 42, which later
became the basis of Batas Pambansa Blg. 129, was introduced. After
setting forth the background as above narrated, its Explanatory Note
continues: "Pursuant to the President's instructions, this proposed
legislation has been drafted in accordance with the guidelines of that
report with particular attention to certain objectives of the
reorganization, to wit, the attainment of more efficiency in disposal of
cases, a reallocation of jurisdiction, and a revision of procedures which
do not tend to the proper meeting out of justice. In consultation with,
and upon a consensus of, the governmental and parliamentary
leadership, however, it was felt that some options set forth in the
Report be not availed of. Instead of the proposal to confine the
jurisdiction of the intermediate appellate court merely to appellate
adjudication, the preference has been opted to increase rather than
diminish its jurisdiction in order to enable it to effectively assist the
Supreme Court. This preference has been translated into one of the
innovations in the proposed Bill." 35 In accordance with the parliamentary
procedure, the Bill was sponsored by the Chairman of the Committee on Justice, Human
Rights and Good Government to which it was referred. Thereafter, Committee Report No.
225 was submitted by such Committee to the Batasang Pambansa recommending the
approval with some amendments. In the sponsorship speech of Minister Ricardo C. Puno,
there was reference to the Presidential Committee on Judicial Reorganization. Thus: "On
October 17, 1980, the Presidential Committee on Judicial Reorganization submitted its
report to the President which contained the 'Proposed Guidelines for Judicial
Reorganization.' Cabinet Bill No. 42 was drafted substantially in accordance with the options
presented by these guidelines. Some options set forth in the aforesaid report were not
availed of upon consultation with and upon consensus of the government and parliamentary
leadership. Moreover, some amendments to the bill were adopted by the Committee on
Justice, Human Rights and Good Government, to which The bill was referred, following the
public hearings on the bill held in December of 1980. The hearings consisted of dialogues
with the distinguished members of the bench and the bar who had submitted written
proposals, suggestions, and position papers on the bill upon the invitation of the Committee
36
on Justice, Human Rights and Good Government."
Stress was laid by the sponsor that the
enactment of such Cabinet Bill would, firstly, result in the attainment of more efficiency in
the disposal of cases. Secondly, the improvement in the quality of justice dispensed by the
courts is expected as a necessary consequence of the easing of the court's dockets. Thirdly,
the structural changes introduced in the bill, together with the reallocation of jurisdiction
and the revision of the rules of procedure, are designated to suit the court system to the
exigencies of the present day Philippine society, and hopefully, of the foreseeable
37
future."
it may be observed that the volume containing the minutes of the proceedings of
the Batasang Pambansa show that 590 pages were devoted to its discussion. It is quite
obvious that it took considerable time and effort as well as exhaustive study before the act
was signed by the President on August 14, 1981. With such a background, it becomes quite

manifest how lacking in factual basis is the allegation that its enactment is tainted by the
vice of arbitrariness. What appears undoubted and undeniable is the good faith that
characterized its enactment from its inception to the affixing of the Presidential signature.

5. 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. The ponencia of Justice J.B.L. Reyes in Cruz
v. Primicias, Jr. 38reiterated such a doctrine: "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 well-known rule also that valid abolition of offices is neither removal
nor separation of the incumbents. ... 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. 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,
39
the abolition must be made in good faith."
The above excerpt was quoted with approval
40
in Bendanillo, Sr. v. Provincial Governor,
two earlier cases enunciating a similar doctrine
41
having preceded it.
As with the offices in the other branches of the government, so it is
with the judiciary. The test remains whether the abolition is in good faith. As that element is
conspicuously present in the enactment of Batas Pambansa Blg. 129, then the lack of merit
of this petition becomes even more apparent. The concurring opinion of Justice Laurel
42
in Zandueta v. De la Costa
cannot be any clearer. This is a quo warranto proceeding filed
by petitioner, claiming that he, and not respondent, was entitled to he office of judge of the
Fifth Branch of the Court of First Instance of Manila. There was a Judicial Reorganization Act
43
in 1936,
a year after the inauguration of the Commonwealth, amending the
Administrative Code to organize courts of original jurisdiction known as the Courts of First
Instance Prior to such statute, petitioner was the incumbent of such branch. Thereafter, he
received an ad interim appointment, this time to the Fourth Judicial District, under the new
legislation. Unfortunately for him, the Commission on Appointments of then National
Assembly disapproved the same, with respondent being appointed in his place. He
contested the validity of the Act insofar as it resulted in his being forced to vacate his
position This Court did not rule squarely on the matter. His petition was dismissed on the
ground of estoppel. Nonetheless, the separate concurrence of Justice Laurel in the result
reached, to repeat, reaffirms in no uncertain terms the standard of good faith to preclude
any doubt as to the abolition of an inferior court, with due recognition of the security of
tenure guarantee. Thus: " I am of the opinion that Commonwealth Act No. 145 in so far as
it reorganizes, among other judicial districts, the Ninth Judicial District, and establishes an
entirely new district comprising Manila and the provinces of Rizal and Palawan, is valid and
constitutional. This conclusion flows from the fundamental proposition that the legislature
may abolish courts inferior to the Supreme Court and therefore may reorganize them
territorially or otherwise thereby necessitating new appointments and commissions. Section
2, Article VIII of the Constitution vests in the National Assembly the power to define,
prescribe and apportion the jurisdiction of the various courts, subject to certain limitations
in the case of the Supreme Court. It is admitted that section 9 of the same article of the
Constitution provides for the security of tenure of all the judges. The principles embodied in
these two sections of the same article of the Constitution must be coordinated and
harmonized. A mere enunciation of a principle will not decide actual cases and controversies
of every sort. (Justice Holmes in Lochner vs. New York, 198 U.S., 45; 49 Law. ed;
44
937)"
justice Laurel continued: "I am not insensible to the argument that the National
Assembly may abuse its power and move deliberately to defeat the constitutional provision
guaranteeing security of tenure to all judges, But, is this the case? One need not share the

view of Story, Miller and Tucker on the one hand, or the opinion of Cooley, Watson and
Baldwin on the other, to realize that the application of a legal or constitutional principle is
necessarily factual and circumstantial and that fixity of principle is the rigidity of the dead
and the unprogressive. I do say, and emphatically, however, that cases may arise where
the violation of the constitutional provision regarding security of tenure is palpable and
plain, and that legislative power of reorganization may be sought to cloak an
unconstitutional and evil purpose. When a case of that kind arises, it will be the time to
make the hammer fall and heavily. But not until then. I am satisfied that, as to the
particular point here discussed, the purpose was the fulfillment of what was considered a
great public need by the legislative department and that Commonwealth Act No. 145 was
not enacted purposely to affect adversely the tenure of judges or of any particular judge.
Under these circumstances, I am for sustaining the power of the legislative department
under the Constitution. To be sure, there was greater necessity for reorganization
consequent upon the establishment of the new government than at the time Acts Nos. 2347
and 4007 were approved by the defunct Philippine Legislature, and although in the case of
these two Acts there was an express provision providing for the vacation by the judges of
their offices whereas in the case of Commonwealth Act No. 145 doubt is engendered by its
silence, this doubt should be resolved in favor of the valid exercise of the legislative
45
power."

6. A few more words on the question of abolition. In the above-cited

opinion of Justice Laurel in Zandueta, reference was made to Act No.
2347 46 on the reorganization of the Courts of First Instance and to Act No. 4007 47 on the
reorganization of all branches of the government, including the courts of first instance. In
both of them, the then Courts of First Instance were replaced by new courts with the same
appellation. As Justice Laurel pointed out, there was no question as to the fact of abolition.
He was equally categorical as to Commonwealth Act No. 145, where also the system of the
courts of first instance was provided for expressly. It was pointed out by Justice Laurel that
the mere creation of an entirely new district of the same court is valid and constitutional.
such conclusion flowing "from the fundamental proposition that the legislature may abolish
courts inferior to the Supreme Court and therefore may reorganize them territorially or
48
otherwise thereby necessitating new appointments and commissions."
The challenged
49
50
statute creates an intermediate appellate court,
regional trial courts,
metropolitan trial
51
52
courts of the national capital region,
and other metropolitan trial courts,
municipal trial
53
54
55
courts in cities,
as well as in municipalities,
and municipal circuit trial courts.
There
is even less reason then to doubt the fact that existing inferior courts were abolished. For
the Batasang Pambansa, the establishment of such new inferior courts was the appropriate
response to the grave and urgent problems that pressed for solution. Certainly, there could
be differences of opinion as to the appropriate remedy. The choice, however, was for the
Batasan to make, not for this Court, which deals only with the question of power. It bears
56
mentioning that in Brillo v. Eage this Court, in an unanimous opinion penned by the late
Justice Diokno, citing Zandueta v. De la Costa, ruled: "La segunda question que el
recurrrido plantea es que la Carta de Tacloban ha abolido el puesto. Si efectivamente ha
sido abolido el cargo, entonces ha quedado extinguido el derecho de recurente a ocuparlo y
a cobrar el salario correspodiente.Mc Culley vs. State, 46 LRA, 567. El derecho de un juez
de desempenarlo hasta los 70 aos de edad o se incapacite no priva al Congreso de su
57
facultad de abolir, fusionar o reorganizar juzgados no constitucionales."
Nonetheless,
such well-established principle was not held applicable to the situation there obtaining, the
Charter of Tacloban City creating a city court in place of the former justice of the peace
court. Thus: "Pero en el caso de autos el Juzgado de Tacloban no ha sido abolido. Solo se le
58
ha cambiado el nombre con el cambio de forma del gobierno local."
The present case is

anything but that. Petitioners did not and could not prove that the challenged statute was
not within the bounds of legislative authority.

7. This opinion then could very well stop at this point. The
implementation of Batas Pambansa Blg. 129, concededly a task
incumbent on the Executive, may give rise, however, to questions
affecting a judiciary that should be kept independent. The allembracing scope of the assailed legislation as far as all inferior courts
from the Courts of Appeals to municipal courts are concerned, with the
exception solely of the Sandiganbayan and the Court of Tax
Appeals 59 gave rise, and understandably so, to misgivings as to its effect on such
cherished Ideal. The first paragraph of the section on the transitory provision reads: "The
provisions of this Act shall be immediately carried out in accordance with an Executive Order
to be issued by the President. The Court of Appeals, the Courts of First Instance, the Circuit
Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of Agrarian
Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts shall
continue to function as presently constituted and organized, until the completion of the
reorganization provided in this Act as declared by the President. Upon such declaration, the
said courts shall be deemed automatically abolished and the incumbents thereof shall cease
60
to hold the office."
There is all the more reason then why this Court has no choice but to
inquire further into the allegation by petitioners that the security of tenure provision, an
assurance of a judiciary free from extraneous influences, is thereby reduced to a barren
form of words. The amended Constitution adheres even more clearly to the long-established
tradition of a strong executive that antedated the 1935 Charter. As noted in the work of
former Vice-Governor Hayden, a noted political scientist, President Claro M. Recto of the
1934 Convention, in his closing address, in stressing such a concept, categorically spoke of
providing "an executive power which, subject to the fiscalization of the Assembly, and of
public opinion, will not only know how to govern, but will actually govern, with a firm and
steady hand, unembarrassed by vexatious interferences by other departments, or by unholy
61
alliances with this and that social group."
The above excerpt was cited with approval by
62
Justice Laurel in Planas v. Gil. Moreover, under the 1981 Amendments, it may be affirmed
that once again the principle of separation of powers, to quote from the same jurist
63
as ponente in Angara v. Electoral Commission,
"obtains not through express provision but
64
by actual division."
The president, under Article VII, shall be the head of state and chief
65
executive of the Republic of the Philippines."
Moreover, it is equally therein expressly
provided that all the powers he possessed under the 1935 Constitution are once again
66
vested in him unless the Batasang Pambansa provides otherwise."
Article VII of the 1935
Constitution speaks categorically: "The Executive power shall be vested in a President of the
67
Philippines."
As originally framed, the 1973 Constitution created the position of President
68
as the "symbolic head of state."
In addition, there was a provision for a Prime Minister as
the head of government exercising the executive power with the assistance of the
69
Cabinet Clearly, a modified parliamentary system was established. In the light of the 1981
amendments though, this Court in Free Telephone Workers Union v. Minister of
70
Labor
could state: "The adoption of certain aspects of a parliamentary system in the
71
amended Constitution does not alter its essentially presidential character."
The retention,
however, of the position of the Prime Minister with the Cabinet, a majority of the members
of which shall come from the regional representatives of the Batasang Pambansa and the
creation of an Executive Committee composed of the Prime Minister as Chairman and not
more than fourteen other members at least half of whom shall be members of the Batasang

Pambansa, clearly indicate the evolving nature of the system of government that is now
72
operative.
What is equally apparent is that the strongest ties bind the executive and
legislative departments. It is likewise undeniable that the Batasang Pambansa retains its full
authority to enact whatever legislation may be necessary to carry out national policy as
usually formulated in a caucus of the majority party. It is understandable then why
73
in Fortun v. Labang
it was stressed that with the provision transferring to the Supreme
Court administrative supervision over the Judiciary, there is a greater need "to preserve
unimpaired the independence of the judiciary, especially so at present, where to all intents
74
and purposes, there is a fusion between the executive and the legislative branches."

8. To be more specific, petitioners contend that the abolition of the

existing inferior courts collides with the security of tenure enjoyed by
incumbent Justices and judges under Article X, Section 7 of the
Constitution. There was a similar provision in the 1935 Constitution. It
did not, however, go as far as conferring on this Tribunal the power to
supervise administratively inferior courts. 75 Moreover, this Court is em
powered "to discipline judges of inferior courts and, by a vote of at least eight members,
76
order their dismissal."
Thus it possesses the competence to remove judges. Under the
77
Judiciary Act, it was the President who was vested with such power.
Removal is, of
course, to be distinguished from termination by virtue of the abolition of the office. There
can be no tenure to a non-existent office. After the abolition, there is in law no occupant. In
case of removal, there is an office with an occupant who would thereby lose his position. It
is in that sense that from the standpoint of strict law, the question of any impairment of
security of tenure does not arise. Nonetheless, for the incumbents of inferior courts
abolished, the effect is one of separation. As to its effect, no distinction exists between
removal and the abolition of the office. Realistically, it is devoid of significance. He ceases to
be a member of the judiciary. In the implementation of the assailed legislation, therefore, it
would be in accordance with accepted principles of constitutional construction that as far as
incumbent justices and judges are concerned, this Court be consulted and that its view be
accorded the fullest consideration. No fear need be entertained that there is a failure to
accord respect to the basic principle that this Court does not render advisory opinions. No
question of law is involved. If such were the case, certainly this Court could not have its say
prior to the action taken by either of the two departments. Even then, it could do so but
only by way of deciding a case where the matter has been put in issue. Neither is there any
intrusion into who shall be appointed to the vacant positions created by the reorganization.
That remains in the hands of the Executive to whom it properly belongs. There is no
departure therefore from the tried and tested ways of judicial power, Rather what is sought
to be achieved by this liberal interpretation is to preclude any plausibility to the charge that
in the exercise of the conceded power of reorganizing tulle inferior courts, the power of
removal of the present incumbents vested in this Tribunal is ignored or disregarded. The
challenged Act would thus be free from any unconstitutional taint, even one not readily
discernidble except to those predisposed to view it with distrust. Moreover, such a
construction would be in accordance with the basic principle that in the choice of
alternatives between one which would save and another which would invalidate a statute,
78
the former is to be preferred.
There is an obvious way to do so. The principle that the
Constitution enters into and forms part of every act to avoid any constitutional taint must be
79
applied Nuez v. Sandiganbayan,
promulgated last January, has this relevant excerpt: "It
is true that other Sections of the Decree could have been so worded as to avoid any
constitutional objection. As of now, however, no ruling is called for. The view is given
expression in the concurring and dissenting opinion of Justice Makasiar that in such a case

to save the Decree from the direct fate of invalidity, they must be construed in such a way
as to preclude any possible erosion on the powers vested in this Court by the Constitution.
80
That is a proposition too plain to be committed. It commends itself for approval."
Nor
would such a step be unprecedented. The Presidential Decree constituting Municipal Courts
into Municipal Circuit Courts, specifically provides: "The Supreme Court shall carry out the
provisions of this Decree through implementing orders, on a province-to-province
81
basis."
It is true there is no such provision in this Act, but the spirit that informs it should
82
not be ignored in the Executive Order contemplated under its Section 44.
Thus Batas
83
Pambansa Blg. 129 could stand the most rigorous test of constitutionality.

9. Nor is there anything novel in the concept that this Court is called
upon to reconcile or harmonize constitutional provisions. To be
specific, the Batasang Pambansa is expressly vested with the authority
to reorganize inferior courts and in the process to abolish existing
ones. As noted in the preceding paragraph, the termination of office of
their occupants, as a necessary consequence of such abolition, is
hardly distinguishable from the practical standpoint from removal, a
power that is now vested in this Tribunal. It is of the essence of
constitutionalism to assure that neither agency is precluded from
acting within the boundaries of its conceded competence. That is why
it has long been well-settled under the constitutional system we have
adopted that this Court cannot, whenever appropriate, avoid the task
of reconciliation. As Justice Laurel put it so well in the previously cited
Angara decision, while in the main, "the Constitution has blocked out
with deft strokes and in bold lines, allotment of power to the
executive, the legislative and the judicial departments of the
government, the overlapping and interlacing of functions and duties
between the several departments, however, sometimes makes it hard
to say just where the one leaves off and the other begins." 84 It is well to
recall another classic utterance from the same jurist, even more emphatic in its affirmation
of such a view, moreover buttressed by one of those insights for which Holmes was so
famous "The classical separation of government powers, whether viewed in the light of the
political philosophy of Aristotle, Locke, or Motesquieu or of the postulations of Mabini,
Madison, or Jefferson, is a relative theory of government. There is more truism and actuality
in interdependence than in independence and separation of powers, for as observed by
Justice Holmes in a case of Philippine origin, we cannot lay down 'with mathematical
precision and divide the branches into water-tight compartments' not only because 'the
great ordinances of the Constitution do not establish and divide fields of black and white but
also because 'even the more specific of them are found to terminate in a penumbra shading
85
gradually from one extreme to the other.'"
This too from Justice Tuazon, likewise
expressing with force and clarity why the need for reconciliation or balancing is well-nigh
unavodiable under the fundamental principle of separation of powers: "The constitutional
structure is a complicated system, and overlappings of governmental functions are
86
recognized, unavoidable, and inherent necessities of governmental coordination."
In the
same way that the academe has noted the existence in constitutional litigation of right
versus right, there are instances, and this is one of them, where, without this attempt at

harmonizing the provisions in question, there could be a case of power against power. That
we should avoid.

10. There are other objections raised but they pose no difficulty.
Petitioners would characterize as an undue delegation of legislative
power to the President the grant of authority to fix the compensation
and the allowances of the Justices and judges thereafter appointed. A
more careful reading of the challenged Batas Pambansa Blg. 129 ought
to have cautioned them against raising such an issue. The language of
the statute is quite clear. The questioned provisions reads as follows:
"Intermediate Appellate Justices, Regional Trial Judges, Metropolitan
Trial Judges, municipal Trial Judges, and Municipal Circuit Trial Judges
shall receive such receive such compensation and allowances as may
be authorized by the President along the guidelines set forth in Letter
of Implementation No. 93 pursuant to Presidential Decree No. 985, as
amended by Presidential Decree No. 1597." 87 The existence of a standard is
thus clear. The basic postulate that underlies the doctrine of non-delegation is that it is the
legislative body which is entrusted with the competence to make laws and to alter and
repeal them, the test being the completeness of the statue in all its terms and provisions
88
when enacted. As pointed out in Edu v. Ericta:
"To avoid the taint of unlawful delegation,
there must be a standard, which implies at the very least that the legislature itself
determines matters of principle and lays down fundamental policy. Otherwise, the charge of
complete abdication may be hard to repel. A standard thus defines legislative policy, marks
its limits, maps out its boundaries and specifies the public agency to apply it. It indicates
the circumstances under which the legislative command is to be effected. It is the criterion
by which legislative purpose may be carried out. Thereafter, the executive or administrative
office designated may in pursuance of the above guidelines promulgate supplemental rules
and regulations. The standard may be either express or implied. If the former, the nondelegation objection is easily met. The standard though does not have to be spelled out
specifically. It could be implied from the policy and purpose of the act considered as a
89
whole."
The undeniably strong links that bind the executive and legislative departments
under the amended Constitution assure that the framing of policies as well as their
implementation can be accomplished with unity, promptitude, and efficiency. There is
accuracy, therefore, to this observation in the Free Telephone Workers Union decision:
"There is accordingly more receptivity to laws leaving to administrative and executive
agencies the adoption of such means as may be necessary to effectuate a valid legislative
purpose. It is worth noting that a highly-respected legal scholar, Professor Jaffe, as early as
90
1947, could speak of delegation as the 'dynamo of modern government.'"
He warned
against a "restrictive approach" which could be "a deterrent factor to much-needed
91
legislation." Further on this point from the same opinion" "The spectre of the nondelegation concept need not haunt, therefore, party caucuses, cabinet sessions or legislative
92
chambers."
Another objection based on the absence in the statue of what petitioners
refer to as a "definite time frame limitation" is equally bereft of merit. They ignore the
categorical language of this provision: "The Supreme Court shall submit to the President,
within thirty (30) days from the date of the effectivity of this act, a staffing pattern for all
courts constituted pursuant to this Act which shall be the basis of the implementing order to
93
be issued by the President in accordance with the immediately succeeding section."
The
first sentence of the next section is even more categorical: "The provisions of this Act shall

be immediately carried out in accordance with an Executive Order to be issued by the

94
President."
Certainly petitioners cannot be heard to argue that the President is insensible
95
to his constitutional duty to take care that the laws be faithfully executed.
In the
meanwhile, the existing inferior courts affected continue functioning as before, "until the
completion of the reorganization provided in this Act as declared by the President. Upon
such declaration, the said courts shall be deemed automatically abolished and the
96
incumbents thereof shall cease to hold office."
There is no ambiguity. The incumbents of
the courts thus automatically abolished "shall cease to hold office." No fear need be
entertained by incumbents whose length of service, quality of performance, and clean
97
record justify their being named anew,
in legal contemplation without any interruption in
98
the continuity of their service.
It is equally reasonable to assume that from the ranks of
lawyers, either in the government service, private practice, or law professors will come the
new appointees. In the event that in certain cases a little more time is necessary in the
appraisal of whether or not certain incumbents deserve reappointment, it is not from their
standpoint undesirable. Rather, it would be a reaffirmation of the good faith that will
characterize its implementation by the Executive. There is pertinence to this observation of
Justice Holmes that even acceptance of the generalization that courts ordinarily should not
supply omissions in a law, a generalization qualified as earlier shown by the principle that to
save a statute that could be done, "there is no canon against using common sense in
99
construing laws as saying what they obviously mean."
Where then is the unconstitutional
flaw

11. On the morning of the hearing of this petition on September 8,

1981, petitioners sought to have the writer of this opinion and Justices
Ramon C. Aquino and Ameurfina Melencio-Herrera disqualified because
the first-named was the chairman and the other two, members of the
Committee on Judicial Reorganization. At the hearing, the motion was
denied. It was made clear then and there that not one of the three
members of the Court had any hand in the framing or in the discussion
of Batas Pambansa Blg. 129. They were not consulted. They did not
testify. The challenged legislation is entirely the product of the efforts
of the legislative body. 100 Their work was limited, as set forth in the Executive
Order, to submitting alternative plan for reorganization. That is more in the nature of
scholarly studies. That the undertook. There could be no possible objection to such activity.
Ever since 1973, this Tribunal has had administrative supervision over interior courts. It has
had the opportunity to inform itself as to the way judicial business is conducted and how it
may be improved. Even prior to the 1973 Constitution, it is the recollection of the writer of
this opinion that either the then Chairman or members of the Committee on Justice of the
101
then Senate of the Philippines
consulted members of the Court in drafting proposed
legislation affecting the judiciary. It is not inappropriate to cite this excerpt from an article
in the 1975 Supreme Court Review: "In the twentieth century the Chief Justice of the United
States has played a leading part in judicial reform. A variety of conditions have been
responsible for the development of this role, and foremost among them has been the
102
creation of explicit institutional structures designed to facilitate reform."
Also: "Thus the
Chief Justice cannot avoid exposure to and direct involvement in judicial reform at the
federal level and, to the extent issues of judicial federalism arise, at the state level as
103
well."

12. It is a cardinal article of faith of our constitutional regime that it is

the people who are endowed with rights, to secure which a
government is instituted. Acting as it does through public officials, it
has to grant them either expressly or impliedly certain powers. Those
they exercise not for their own benefit but for the body politic. The
Constitution does not speak in the language of ambiguity: "A public
office is a public trust." 104 That is more than a moral adjuration It is a legal
imperative. The law may vest in a public official certain rights. It does so to enable them to
perform his functions and fulfill his responsibilities more efficiently. It is from that
standpoint that the security of tenure provision to assure judicial independence is to be
viewed. It is an added guarantee that justices and judges can administer justice undeterred
by any fear of reprisal or untoward consequence. Their judgments then are even more likely
to be inspired solely by their knowledge of the law and the dictates of their conscience, free
from the corrupting influence of base or unworthy motives. The independence of which they
are assured is impressed with a significance transcending that of a purely personal right. As
thus viewed, it is not solely for their welfare. The challenged legislation Thus subject d to
the most rigorous scrutiny by this Tribunal, lest by lack of due care and circumspection, it
allow the erosion of that Ideal so firmly embedded in the national consciousness There is
this farther thought to consider. independence in thought and action necessarily is rooted in
one's mind and heart. As emphasized by former Chief Justice Paras in Ocampo v. Secretary
105
of Justice,
there is no surer guarantee of judicial independence than the God-given
character and fitness of those appointed to the Bench. The judges may be guaranteed a
fixed tenure of office during good behavior, but if they are of such stuff as allows them to be
subservient to one administration after another, or to cater to the wishes of one litigant
after another, the independence of the judiciary will be nothing more than a myth or an
empty Ideal. Our judges, we are confident, can be of the type of Lord Coke, regardless or in
spite of the power of Congress we do not say unlimited but as herein exercised to
106
reorganize inferior courts."
That is to recall one of the greatest Common Law jurists,
who at the cost of his office made clear that he would not just blindly obey the King's order
but "will do what becomes [him] as a judge." So it was pointed out in the first leading case
107
stressing the independence of the judiciary, Borromeo v. Mariano,
Theponencia of
Justice Malcolm Identified good judges with "men who have a mastery of the principles of
law, who discharge their duties in accordance with law, who are permitted to perform the
duties of the office undeterred by outside influence, and who are independent and selfrespecting human units in a judicial system equal and coordinate to the other two
108
departments of government."
There is no reason to assume that the failure of this suit
to annul Batas Pambansa Blg. 129 would be attended with deleterious consequences to the
administration of justice. It does not follow that the abolition in good faith of the existing
inferior courts except the Sandiganbayan and the Court of Tax Appeals and the creation of
new ones will result in a judiciary unable or unwilling to discharge with independence its
solemn duty or one recreant to the trust reposed in it. Nor should there be any fear that
less than good faith will attend the exercise be of the appointing power vested in the
Executive. It cannot be denied that an independent and efficient judiciary is something to
the credit of any administration. Well and truly has it been said that the fundamental
principle of separation of powers assumes, and justifiably so, that the three departments
are as one in their determination to pursue the Ideals and aspirations and to fulfilling the
hopes of the sovereign people as expressed in the Constitution. There is wisdom as well as
validity to this pronouncement of Justice Malcolm in Manila Electric Co. v. Pasay
109
Transportation Company,
a decision promulgated almost half a century ago: "Just as the
Supreme Court, as the guardian of constitutional rights, should not sanction usurpations by

any other department or the government, so should it as strictly confine its own sphere of
influence to the powers expressly or by implication conferred on it by the Organic
110
Act."
To that basic postulate underlying our constitutional system, this Court remains
committed.

WHEREFORE, the unconstitutionality of Batas Pambansa Blg. 129 not

having been shown, this petition is dismissed. No costs.

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.
DECISION
TORRES, JR., J.:

Challenge in this petition is the validity of petitioners removal

from service as Assistant Commissioner of the Excise Tax Service of
the Bureau of Internal Revenue. Incidentally, he questions
Memorandum order no. 164 issued by the Office of the President,
which provides for the creation of A Committee to Investigate the
Administrative Complaint Against Aquilino T. Larin, Assistant
Commissioner, Bureau of Internal Revenue as well as the
investigation made in pursuance thereto and Administrative Order
No. 101 dated December 2, 1993 which found him guilty of grave
misconduct in the administrative charge and imposed upon him the
penalty of dismissal from office.

Likewise, petitioner seeks to assail the legality of Executive

Order No. 132, issued by President Ramos on October 26, 1993,
which provides for the Streamlining of the Bureau of Internal
Revenue, and of its implementing rules issued by the Bureau of
Internal Revenue, namely: a) Administrative Order No. 4-93, which
provides for the Organizational Structure and Statement of General
Functions of Offices in the National Office and b) Administrative
Order No. 5-93, which provides for Redefining the Areas of
Jurisdiction and Renumbering of Regional And District Offices.
The antecedent facts of the instant case as succinctly related by
the Solicitor General are as follows:
On September 18, 1992, a decision was rendered by the
Sandiganbayan convicting herein petitioner Aquilino T. Larin,
Revenue Specific Tax Officer, then Assistant Commisioner of the
Bureau of Internal Revenue and his co-accused (except Justino E.
Galban, Jr.) of the crimes of violation of Section 268 (4) of the
National Internal Revenue Code and Section 3 (e) of R.A. 3019 in
Criminal Cases Nos. 14208-14209, entitled People of the
Philippines, Plaintiffvs. Aquilino T. Larin, Teodoro T. Pareno, Justino
E. Galban, Jr. and Potenciana N. Evangelista, Accused, the
dispositive portion of the judgment reads:
[1]

"WHEREFORE, judgment is now rendered in Criminal

Cases Nos. 14208 and 14209 convicting accused
Assistant Commissioner for Specific Tax Aquilino T.
Larin, Chief of the Alcohol tax Division TEODORO P.
PARENO, and Chief of the Revenue accounting Division
POTENCIANA M. EVANGELISTA:
xxx
SO ORDERED.
The fact of petitioners conviction was reported to the President of
the Philippines by the then Acting Finance Secretary Leong through
a memorandum dated June 4, 1993. The memorandum states, inter
alia:

This is a report in the case of Assistant Commissioner

AQUILINO T. LARIN of the Excise tax Service, Bureau of
Internal Revenue, a presidential appointee, one of those
convicted in the Criminal Case Nos. 14208-14209, entitled
People of the Philippines vs. Aquilino T. Larin, et. al. Referred
to the Department of Finace by the Commissioner of Internal
Revenue.
The cases against Pareno and Evangelista are being acted
upon by the Bureau of Internal revenue as they nonpresidential appointees.
xxx
It is clear from the foregoing that Mr. Larin has found beyond
reasonable doubt to have committed acts constituting grave
misconduct. Under the Civil Service Laws and Rules which
require only preponderance of evidence, grave misconduct is
punishable by dismissal.
Acting by authority of the President, Sr. Deputy Executive
Secretary Leonardo A. Quisumbing issued Memorandum Order No.
164 dated August 25, 1993 which provides for the creation of an
Executive Committee to investigate the administrative charge
against herein petitioner Aquilino T. Larin. It states thus:
A Committee is hereby created to investigate the
administrative complaint filed against Aquilino T. Larin,
Assistant Commissioner, Bureau of Internal Revenue, to be
composed of:
Atty. Frumencio A. Lagustan Chairman
Assistant Executive Secretary for Legislation
Mr. Jose B. Alejandro Member
Presidential Assistant
Atty. Jaime M. Maza Member
Assistant commissioner of Inspector services
Bureau of Internal Revenue
The Committee shall have the powers and prerogatives of (an)
investigating committee under the administrative Code of
1987 including the power to summon witnesses, administer

oath or take testimony or evidence relevant to the

investigation by subpoena ad testificandum and subpoena
duces tecum:
xxx
The Committee shall convene immediately, conduct the
investigation in the most expeditious manner, and terminate
the same as soon as practicable from its first scheduled date
of hearing.
xxx
Consequently, the Committee directed the petitioner to respond
to the administrative charge leveled against him through a letter
dated September 17, 1993, thus:
Presidential Memorandum Order No. 164 dated August 25,
1993, a xerox copy of which is hereto attached for your ready
reference, created an Investigation Committee to look into the
charges against you which are also the subject of the Criminal
Cases No. 14208 and 14209 entitled People of the
Philippines vs. Aquilino T. Larin,et. al.
The committee has its possession a certified true copy of the
Decision of the Sandiganbayan in the above-mentioned cases.
Pursuant to Presidential Memorandum Order No. 164, you are
hereby directed to file your position paper on the
aforementioned charges within seven (7) days from receipt
hereof xxx.
Failure to file the required position paper shall be considered
as a waiver on your part to submit such paper or to be heard,
in which case, the Committee shall deem the case submitted
on the basis of the documents and records at hand.
In compliance, petitioner submitted a letter dated September 30,
1993 which was addressed to Atty. Frumencio A. Lagustan , the
Chairman of the Investigating Committee. In said latter, he asserts
that,
The case being sub-judice, I may not , therefore, comment on
the merits of issues involved for fear of being cited in
contempt of Court. This position paper is thus limited to

furnishing the Committee pertinent documents submitted with

the Supreme Court and other tribunal which took cognizance
of the case in the past, as follows:
xxx
The foregoing documents readily show that I am not
administratively liable or criminally culpable of the charges
leveled against me, and that the aforesaid cases are mere
prosecutions caused to be filed and are being orchestrated by
taxpayers who were prejudiced by multi-million peso
assessments I caused to be issued against them in my official
capacity as Assistant Commissioner, Excise Tax office of
Bureau of Internal Revenue.
In the same letter, petitioner claims that the administrative
complaint against him is already barred: a) on jurisdictional ground
as the Office of the Ombudsman had already taken cognizance of
the case and had caused the filing only of the criminal charges
against him, b) by res judicata, c) double jeopardy, and d) because
to proceed with the case would be redundant, oppressive and a
plain persecution against him.
Meanwhile, the President issued the challenged Executive order
No. 132 dated October 26, 1993 which mandates for the
streamlining of the Bureau of Internal Revenue. Under said order,
some positions and functions are either abolished, renamed,
decentralized or transferred to other offices, while other offices are
also created. The Excise Tax Service or the Specific Tax Service, of
which petitioner was the Assistant Commissioner, was one of those
offices that was abolished by said executive order.
The corresponding implementing rules of Executive Order No.
132, namely, revenue Administrative Orders Nos. 4-93 and 5-93,
were subsequently issued .by the Bureau of Internal Revenue.
On October 27, 1993, or one day after the promulgation of
Executive Order No.132, the President appointed the following as
BIR Assistant Commissioners:
1.
2.
3.
4.

Bernardo A. Frianeza
Dominador L. Galura
Jaime D. Gonzales
Lilia C. Guillermo

5. Rizalina S. Magalona
6. Victorino C. Mamalateo
7. Jaime M. Masa
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 the petitioner in Criminal Case Nos.
14208 and 14209.
In his petition, petitioner challenged the authority of the
President to dismiss him from office. He argued that in so far as
presidential appointees who are Career Executive Service Officers
are concerned, the President exercises only the power of control not
the power to remove. He also averred that the administrative
investigation conducted under Memorandum Order No. 164 is void
as it violated his right to due process. According to him, the letter of
the Committee dated September 17, 1993 and his position paper
dated September 30, 1993 are not sufficient for purposes of
complying with the requirements of due process. He alleged that he
was not informed of the administrative charges leveled against him
nor was he given official notice of his dismissal.
Petitioner likewise claimed that he was removed as a result of
the reorganization made by the Executive Department in the BIR
pursuant to Executive Order No. 132. Thus, he assailed said
Executive Order No. 132 and its implementing rules, namely,
Revenue Administrative Orders 4-93 and 5-93 for being ultra vires.
He claimed that there is yet no law enacted by Congress which
authorizes the reorganization by the Executive Department of
executive agencies, particularly the Bureau of Internal revenue. He

said that the reorganization sought to be effected by the Executive

Department on the basis of E.O. No. 132 is tainted with bad faith in
apparent violation of Section 2 of R.A. 6656, otherwise known as
the Act Protecting the Security of Tenure of Civil Service Officers
and
Employees
in
the
Implementation
of
Government
Reorganization.
On the other hand, respondents contended that since petitioner
is the presidential appointee, he falls under the disciplining authority
of the President. They also contended that E.O. No. 132 and its
implementing rules were validly issued pursuant to Sections 48 and
62 of Republic Act No. 7645. Apart from this, the other legal bases
of E.O. No. 132 as stated in its preamble are Section 63 of E.O
No.127 (Reorganizing the Ministry of Finance), and Section 20, Book
III of E.O. No. 292, otherwise known as the Administrative Code of
1987. In addition, it is clear that in Section 11 of R.A No.6656
future reorganization is expressly contemplated and nothing in said
law that prohibits subsequent reorganization through an executive
order. Significantly, respondents clarified that petitioner was not
dismissed by virtue of EO 132. Respondents claimed that he was
removed from office because he was found guilty of grave
misconduct in the administrative cases filed against him.
The ultimate issue to be resolved in the instant case falls on the
determination of the validity of petitioners 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 petitioners acquittal in the criminal case to his
administrative charge? d) Does the President have the power to
reorganize the BIR or to issue the questioned E.O. NO. 132?, e) Is
the reorganization of BIR pursuant to E.O. No. 132 tainted with bad
faith?
At the outset, it is worthy to note that the position of the
Assistant Commissioner of the BIR is part of the Career Executive
Service. Under the law, Career Executive Service officers, namely
Undersecretary, Assistant Secretary, Bureau director, Assistant
Bureau Director, Regional Director, Assistant Regional Director,
Chief of Department Service and other officers of equivalent rank as
[2]

[3]

may be identified by the Career Executive Service Board, are all

appointed by the President. Concededly, petitioner was appointed as
Assistant Commissioner in January, 1987 by then President Aquino.
Thus, petitioner is a presidential appointee who belongs to career
service of the Civil Service. Being a presidential appointee, he
comes under the direct diciplining authority of the President. This is
in line with the well settled principle that the power to remove is
inherent in the power to appoint conferred to the President by
Section 16, Article VII of the Constitution. Thus, it is ineluctably
clear that Memorandum Order No. 164, which created a committee
to investigate the administrative charge against petitioner, was
issued pursuant to the power of removal of the President. This
power of removal, however, is not an absolute one which accepts no
reservation. It must be pointed out that petitioner is a career
service officer. Under the Administrative Code of 1987, career
service is characterized by the existence of security of tenure, as
contra-distinguished from non-career service whose tenure is coterminus with that of the appointing or subject to his pleasure, or
limited to a period specified by law or to the duration of a particular
project for which purpose the employment was made. As a career
service officer, petitioner enjoys the right to security of tenure. No
less than the 1987 Constitution guarantees the right of security of
tenure of the employees of the civil service. Specifically, Section 36
of P.D. No. 807, as amended, otherwise known as Civil Service
Decree of the Philippines, is emphatic that career service officers
and employees who enjoy security of tenure may be removed only
for any of the causes enumerated in said law. In other words, the
fact that the petitioner is a presidential appointee does not give the
appointing authority the license to remove him at will or at his
pleasure for it is an admitted fact that he is likewise a career service
officer who under the law is the recipient of tenurial protection,
thus, may only be removed for a cause and in accordance with
procedural due process.
Was petitioner then removed from office for a legal cause under
a valid proceeding?
Although the proceedings taken complied with the requirements
of procedural due process, this Court, however, considers that
petitioner was not dismissed for a valid cause.

It should be noted that what precipitated the creation of the

investigative committee to look into the administrative charge
against petitioner is his conviction by the Sandiganbayan in criminal
Case Nos. 14208 and 14209. As admitted by the respondents, the
administrative case against petitioner is based on the
Sandiganbayan Decision of September 18, 1992. Thus, in the
Administrative Order No. 101 issued by Senior Deputy Executive
Secretary Quisumbing which found petitioner guilty of grave
misconduct, it clearly states that:
"This pertains to the administrative charge against Assistant
Commissioner Aquilino T. Larin of the Bureau of Internal
Revenue, for grave misconduct by virtue of a Memorandum
signed by Acting Secretary Leong of the Department of
Finance, on the basis of decision handed down by the Hon.
Sandiganbayan convicting Larin, et. al. in Criminal Cases No.
14208 and 14209."
[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 xxx.'
[5]

However, it must be stressed at this juncture that the conviction

of petitioner by the Sandiganbayan wasset aside by this court in
our decision promulgated on April 17, 1996 in G.R. Nos. 108037-38
and 107119-20. We specifically ruled in no uncertain terms that : a)
petitioner cannot be held negligent in relying on the certification of
a co-equal unit in the BIR, b) it is not incumbent upon Larin to go
beyond the certification made by the Revenue Accounting Division
that Tanduay Distillery, Inc. had paid the ad valorem taxes, c) there
is nothing irregular or anything false in Larin's marginal note on the
memorandum addressed to Pareno, the Chief of Alcohol Tax Division
who was also one of the accused, but eventually acquitted, in the
said criminal cases, and d) there is no proof of actual agreement
between the accused, including petitioner, to commit the illegal acts
charged. We are emphatic in our resolution in said cases that there
is nothing "illegal with the acts committed by the petitioner(s)." We
also declare that "there is no showing that petitioner(s) had acted
irregularly, or performed acts outside of his (their) official
functions." Significantly, these acts which We categorically declare
to be not unlawful and improper in G.R. Nos. 108037-38 and G.R.
Nos. 107119-20 are the very same acts for which petitioner is held
to be administratively responsible. Any charge of malfeasance or
misfeasance on the part of the petitioner is clearly belied by our
conclusion in said cases. In the light of this decisive
pronouncement, We see no reason for the administrative charge to
continue - it must, thus, be dismissed.
We are not unaware of the rule that since administrative cases
are independent from criminal actions for the same act or omission,
the dismissal or acquittal of the criminal charge does not foreclose
the institution of administrative action nor carry with it the relief
from administrative liability. However, the circumstantialsetting of
the instant case sets it miles apart from the foregoing rule and
placed it well within the exception. Corollarily, where the very basis
of the administrative case against petitioner is his conviction in the
criminal action which was later on set aside by this court upon a
categorical and clear findings that the acts for which he was
[6]

administratively held liable are not unlawful and irregular, the

acquittal of the petitioner in the criminal case necessarily entails the
dismissal of the administrative action against him, because in such
a case, there is no basis nor justifiable reason to maintain the
administrative suit.
On the aspect of procedural due process, suffice it to say that
petitioner was given every chance to present his side. The rule is
well settled that the essence of due process in administrative
proceedings is that a party be afforded a reasonable opportunity to
be heard and to submit any evidence he may have in support of his
defense. The records clearly show that on October 1, 1993
petitioner submitted his letter-response dated September 30, 1993
to the administrative charged filed against him. Aside from his
letter, he also submitted various documents attached as annexes to
his letter, all of which are evidences supporting his defense. Prior to
this, he received a letter dated September 17, 1993 from the
Investigation Committee requiring him to explain his side
concerning the charge. It cannot therefore be argued that petitioner
was denied of due process.
[7]

Let us now examine Executive Order No. 132.

As stated earlier, with the issuance of Executive Order No. 132,
some of the positions and offices, including the office of Excise Tax
Services of which petitioner was the Assistant Commissioner, were
abolished or otherwise decentralized. Consequently, the President
released the list of appointed Assistant Commissioners of the BIR.
Apparently, petitioner was not included.
Initially, it is argued that there is no law yet which empowers the
President to issue E.O. No. 132 or to reorganize the BIR.
We do not agree.
Under its Preamble, E.O. No. 132 lays down the legal basis of its
issuance, namely: a) Section 48 and 62 of R.A. No. 7645, b) Section
63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292.
Section 48 of R.A. 7645 provides that:
"Sec. 48. Scaling Down and Phase Out of Activities of Agencies
Within the Executive Branch. -- The heads of departments,

bureaus and offices and agencies are hereby directed to

identify their respective activities which are no longer essential
in the delivery of public services and which may be scaled
down, phased out or abolished, subject to civil rules and
regulations. xxx. Actual scaling down, phasing out or
abolition of the activities shall be effective pursuant to
Circulars or Orders issued for the purpose by the Office of the
President." (italics ours)
Said provision clearly mentions the acts of "scaling down,
phasing out and abolition" of offices only and does not cover the
creation of offices or transfer of functions. Nevertheless, the act of
creating and decentralizing is included in the subsequent provision
of Section 62, which provides that:
"Sec. 62, Unauthorized Organizational Charges. -- Unless
otherwise created by law or directed by the President of the
Philippines, no organizational unit or changes in key positions
in any department or agency shall be authorized in their
respective organization structures and be funded from
appropriations by this Act." (italics ours)
The foregoing provision evidently shows that the President is
authorized to effect organizational changes including the creation of
offices in the department or agency concerned.
The contention of petitioner that the two provisions are riders
deserves scant consideration. Well settled is the rule that every law
has in its favor the presumption of constitutionality. Unless and
until a specific provision of the law is declared invalid and
unconstitutional, the same is valid and binding for all intents and
purposes.
[8]

Another legal basis of E.O. No. 132 is Section 20, Book III of
E.O. No. 292 which states:
"Sec.20. Residual Powers. -- Unless Congress provides otherwise, the
President shall exercise such other powers and functions vested in the
President which are provided for under the laws and which are not
specifically enumerated above or which are not delegated by the President in
accordance with law." (italics ours)

This provision speaks of such other powers vested in the

President under the law. What law then which gives him the power

to reorganize? It is Presidential Decree No. 1772 which amended

Presidential Decree No. 1416. These decrees expressly grant the
President of the Philippines the continuing authority to reorganize
the national government, which includes the power to group,
consolidate bureaus and agencies, to abolish offices, to transfer
functions, to create and classify functions, services and activities
and to standardize salaries and materials. The validity of these two
decrees are unquestionable. The 1987 Constitution clearly provides
that "all laws, decrees, executive orders, proclamations, letters of
instructions and other executive issuances not inconsistent with this
Constitution shall remain operative until amended, repealed or
revoked." So far, there is yet no law amending or repealing said
decrees. Significantly, the Constitution itself recognizes future
reorganizations in the government as what is revealed in Section 16
of Article XVIII, thus:
[9]

[10]

"Sec. 16. Career civil service employees separated from

service not for cause but as a result of the xxx reorganization
following the ratification of this Constitution shall be entitled to
appropriate separation pay xxx."
However, We can not consider E.O. No. 127 signed on January
30, 1987 as a legal basis for the reorganization of the BIR. E.O. No.
127 should be related to the second paragraph of Section 11 of
Republic Act No. 6656.
Section 11 provides inter alia:
"xxx
In the case of the 1987 reorganization of the executive
branch, all departments and agencies which are authorized by
executive orders promulgated by the President to reorganize
shall have ninety days from the approval of this act within
which to implement their respective reorganization plans in
accordance with the provisions of this Act." (italics ours)
Executive Order No. 127 was part of the 1987 reorganization
contemplated under said provision. Obviously, it had become stale
by virtue of the expiration of the ninety day deadline period. It can
not thus be used as a proper basis for the reorganization of the BIR.
Nevertheless, as shown earlier, there are other legal bases to

sustain the authority of the President to issue the questioned E.O.

No. 132.
While the President's power to reorganize can not be denied, this
does not mean however that the reorganization itself is properly
made in accordance with law. Well-settled is the rule that
reorganization is regarded as valid provided it is pursued in good
faith. Thus, in Dario vs. Mison, this court has had the occasion to
clarify that:
"As a general rule, a reorganization is carried out in good faith
if it is for the purpose of economy or to make bureaucracy
more efficient. In that event no dismissal or separation
actually occurs because the position itself ceases to exist. And
in that case the security of tenure would not be a Chinese
Wall. Be that as it may, if the abolition which is nothing else
but a separation or removal, is done for political reasons or
purposely to defeat security of tenure, or otherwise not in
good faith, no valid abolition takes place and whatever
abolition is done is void ab initio. There is an invalid abolition
as where there is merely a change of nomenclature of
positions or where claims of economy are belied by the
existence of ample funds."
[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 exist when, pursuant to a
bona fide reorganization, a position has been abolished or
rendered redundant or there is a need to merge, divide, or
consolidate positions in order to meet the exigencies of the
service, or other lawful causes allowed by the Civil Service
Law. The existence of any or some of the following
circumstances may be considered as evidence of bad faith in
the removals made as a result of the reorganization, giving
rise to a claim for reinstatement or reappointment by an
aggrieved party:

a) Where there is a significant increase in the number of positions in

the new staffing pattern of the department or agency concerned;
b) Where an office is abolished and another performing substantially
the same functions is created;
c) Where incumbents are replaced by those less qualified in terms
of status of appointment, performance and merit;
d) Where there is a reclassification of offices in the department or
agency concerned and the reclassified offices perform substantially
the same functions as the original offices;
e) Where the removal violates the order of separation provided in
Section 3 hereof."
A reading of some of the provisions of the questioned E.O. No.
132 clearly leads us to an inescapable conclusion that there are
circumstances considered as evidences of bad faith in the
reorganization of the BIR.
Section 1.1.2 of said executive order provides that:
"1.1.2 The Intelligence and Investigation Office and the
Inspection Service are abolished. An Intelligence and
Investigation Service is hereby created to absorb the same
functions of the abolished office and service. xxx" (italics ours)
This provision is a clear illustration of the circumstance
mentioned in Section 2 (b) of R.A. No. 6656 that an office is
abolished and another one performing substantially the same
function is created.
Another circumstance is the creation of services and divisions in
the BIR resulting to a significant increase in the number of positions
in the said bureau as contemplated in paragraph (a) of section 2 of
R.A. No. 6656. Under Section 1.3 of E.O. No. 132, the Information
Systems Group has two newly created Systems Services. Aside from
this, six new divisions are also created. Under Section 1.2.1, three
more divisions of the Assessment Service are formed. With this
newly created offices, there is no doubt that a significant increase of
positions will correspondingly follow.

Furthermore, it is perceivable that the non-reappointment of the

petitioner as Assistant Commissioner violates Section 4 of R.A. No.
6656. Under said provision, officers holding permanent
appointments are given preference for appointment to the new
positions in the approved staffing pattern comparable to their
former position or in case there are not enough comparable
positions to positions next lower in rank. It is undeniable that
petitioner is a career executive officer who is holding a permanent
position. Hence, he should have given preference for appointment in
the position of Assistant Commissioner. As claimed by petitioner,
Antonio Pangilinan who was one of those appointed as Assistant
Commissioner, "is an outsider of sorts to the bureau, not having
been an incumbent officer of the bureau at the time of the
reorganization." We should not lose sight of the second paragraph
of Section 4 of R.A. No. 6656 which explicitly states that no new
employees shall be taken in until all permanent officers shall have
been appointed for permanent position.
IN VIEW OF THE FOREGOING, the petition is granted, and
petitioner is hereby reinstated to his position as Assistant
Commissioner without loss of seniority rights and shall be entitled to
full backwages from the time of his separation from service until
actual reinstatement unless, in the meanwhile, he would have
reached the compulsory retirement age of sixty-five years in which
case, he shall be deemed to have retired at such age and entitled
thereafter to the corresponding retirement benefits.
SO ORDERED.

G.R. No. L-12859

November 18, 1959

CEBU UNITED ENTERPRISES, plaintiff-appellee,

vs.
JOSE GALLOFIN, Collector of Customs, Cebu Port, defendantappellant.
Manuel A. Zoza for appellee.
First Assistant Solicitor General Guillermo E. Torres and Solicitors Frine
C. Zaballero and Pedro Ocampo for appellant.
REYES, J.B.L., J.:
This suit for mandatory injunction was instituted in the Court of First
Instance of Cebu United Enterprise to compel Jose Gallofin, as collector
of Customs, Cebu Port, to release and deliver to the plaintiff two
imported shipments of 7,834 bales of over issue newspapers
purchased by the latter from the United States. As ancillary relief
during the pendency of the action, the plaintiff prayed for the issuance
of a writ of preliminary mandatory injunction, which was granted by
the court after the plaintiff posted a bond in the amount of P60,000.00
in favor of the defendant. Thereafter, the goods were released to the
plaintiff, it appearing further that the advance sales tax due on the
same had been duly paid upon arrival of the merchandise at port.
The importation of the aforesaid shipments was made under and by
virtue of an Import Control Commission License No. 1225, issued by
the defunct Import Control Commission. Under the terms of the
license, the plaintiff could import, on a no-dollar remittance basis, over
issue newspapers up to the amount or value of $118,000.00.
The refusal of the defendant to deliver the imported items is premised
on his contention that while the five bills of lading covering the two
shipments of the over issue newspapers were all dated at Los Angeles,
U.S.A. December 17, 1953, or one day before the expiration of the
import license in question, the vessels M/S VENTURA and M/S
BATAAN, carrying on board the said merchandise, actually left the
ports of embarkation, Los Angeles, and San Francisco, on January 12
and January 16, 1954 respectively. Hence, according to the defendant,

the importation must be considered as having been made without a

valid import license, because under the regulations issued by the
Central Bank and the Monetary Board, "all shipments that left the port
of origin after June 30, 1953, and are covered by ICC licenses, may be
released by the Bureau of Customs without the need of a Central Bank
release certificate; provided they left the port of origin within the
period of validity of the licenses". No Central Bank certificate for the
release of the goods having been shown or presented to the
defendant, the latter refused to make the delivery.
The lower court was thus conformed with the issue of determining
whether the valid period of the license in question should be
counted up to the time when the vessels carrying the imported
items left the ports of origin on January 12 and January 16, 1954, or
when the corresponding bills of lading were dated, or December 17,
1953. The court chose the latter date, and held:
In view therefore, this Court pronounces judgment making writ
of preliminary mandatory injunction issued against defendant
permanent, with orders for the cancellation of plaintiff's bond,
this after whatever advance sales tax or any taxes, surcharges
and so forth might be due on the goods shall have been paid,
without costs.
The defendant appealed to the Court of Appeals. The question raised,
however, being purely one of law, the appeal was certified to us
pursuant to a resolution of said court dated July 19, 1957. The appeal
has no merit.
The authority of the appellee to import was contained in the Import
Control Commission License No. 17225, validated on June 18, 1953,
and under Resolution 70 of the Commission (adopted March 27, 1952),
the same had a six-month period of validity counted from the said
date June 18, 1953. This license states, among other conditions, that

Commodities covered by this license must be shipped from the

country of origin before the expiry date of the license, and are
subject to sec. 13 of Republic Act. No. 650.

Although Republic Act No. 650, creating the Import Control

Commission, expired on July 31, 1953, it is to be conceded that its
duly executed acts can have valid effects even beyond the life span of
said governmental agency.
What is important to consider only is the legal connotation of the word
"shipped" as the term was used in the license. Defendant maintains
that it is when the vessel leaves the port of embarkation, while plaintiff
holds that it is the dates of the bills of lading, which are usually issued
after the cargo is placed on board the vessel. The date of the shipment
is the date when the goods for dispatch are loaded on board the
vessel, and not necessarily when the ship puts to sea, is clearly
implied from our ruling in the case of U.S Tobacco Corporation vs.
Rufino Luna, et al., (87 Phil., 4), wherein we said:
By section 6 of Act No. 426, all goods including leaf tobacco have
been placed under control. Petitioner's merchandise left the
port of departure before the passage of that Act but arrived in
Manila after its approval. For the purpose of enforcing or applying
said section 6, there can only be one date of importation. Which
was the date? The date the goods were ordered, the date they
were put on board vessel, or the date they reached the port of
destination? We are of the opinion that the date of importation is
the date of shipment and not the date of Arrival in Manila.
(Emphasis supplied)
The issuance of the bill of lading, furthermore, presupposes or carries
the presumption that the goods were delivered to the carrier for
immediate shipment (13 C.J.S. sec. 123 (2), p. 235, and cases cited
therein). It does not appear here that the bill of lading specified any
designated day on which the vessel were to lift anchor, nor was it
shown that plaintiff had any knowledge that the vessel M/S VENTURA
and M/S BATAAN were not to depart soon after he placed his cargo on
board and the corresponding bills of lading issued to him. From this
latter time, the goods in contemplation of law, are deemed already in
transit (New Civil Code, Arts. 1531 and 1736).
It should also be considered that it is entirely outside the shipper's
hands to fix the dates of departure, route or arrival of a vessel (unless
he charters the whole ship [see Art. 656, Code of Commerce]).

Defendant's reliance upon Central Bank regulations that the shipment

licensed must have "left the port of origin within the period of validity
of the "license" is not maintainable in the present case, because the
regulations came onto effect only on July 1, 1953 already after
issuance of the appellee' license and cannot be read into the same.
The Solicitor General's contention that, assuming the six months are
counted up to the date the imports goods were placed on board the
vessels for shipment the period of validity had likewise already elapsed
because, legally six months mean 180 days, which in this case expired
on December 15, cannot now be entertained because the defendantappellant, under paragraph 3 of his answer to the Complaint, expressly
admitted that the date appearing on the bills of lading (December 17,
1953) as the date of loading on board the vessels "is one day before
the expiration of the validity of the import license". What he only
questioned in the court below is the legal connotation of the word
"shipped" under the import license.
In the light of the resolution we have taken on the main issue, it
becomes unnecessary for us to dwell further upon the other questions
raised by the parties.
Wherefore, the appeal should be dismissed and the judgment of the
lower court affirmed. So rendered.
Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador,
Endencia, Barrera, and Gutierrez David, JJ., concur.

ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF

APPEALS
and
the
PEOPLE
OF
THE
*
PHILIPPINES, respondents.
DECISION
MENDOZA, J.:

This is a petition to review the decision of the Court of Appeals

dated July 15, 1992, the dispositive portion of which reads:
WHEREFORE, the present petition is partially granted. The
questioned Orders and writs directing (1) reinstatement of
respondent Isabelo T. Crisostomo to the position of President of the
Polytechnic University of the Philippines, and (2) payment of
salaries and benefits which said respondent failed to receive during
his suspension insofar as such payment includes those accruing
after the abolition of the PCC and its transfer to the PUP, are hereby
set aside. Accordingly, further proceedings consistent with this
decision may be taken by the court a quo to determine the correct
amounts due and payable to said respondent by the said university.

The background of this case is as follows:

Petitioner Isabelo Crisostomo was President of the Philippine
College of Commerce (PCC), having been appointed to that position
by the President of the Philippines on July 17, 1974.
During his incumbency as president of the PCC, two
administrative cases were filed against petitioner for illegal use of
government vehicles, misappropriation of construction materials
belonging to the college, oppression and harassment, grave
misconduct, nepotism and dishonesty. The administrative cases,
which were filed with the Office of the President, were subsequently
referred to the Office of the Solicitor General for investigation.
Charges of violations of R.A. No. 3019, 3 (e) and R.A. No. 992,
20-21 and R.A. No. 733, 14 were likewise filed against him with the
Office of Tanodbayan.
On June 14, 1976, three (3) informations for violation of Sec. 3
(e) of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019, as
amended) were filed against him. The informations alleged that he
appropriated for himself a bahay kubo, which was intended for the
College, and construction materials worth P250,000.00, more or
less. Petitioner was also accused of using a driver of the College as
his personal and family driver.[1]
On October 22, 1976, petitioner was preventively suspended
from office pursuant to R.A. No. 3019, 13, as amended. In his place
Dr. Pablo T. Mateo, Jr. was designated as officer-in-charge on
November 10, 1976, and then as Acting President on May 13, 1977.
On April 1, 1978, P.D. No. 1341 was issued by then President
Ferdinand E. Marcos, CONVERTING THE PHILIPPINE COLLEGE OF
COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS
OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND
EXPANDING ITS CURRICULAR OFFERINGS.
Mateo continued as the head of the new University. On April 3,
1979, he was appointed Acting President and on March 28, 1980, as
President for a term of six (6) years.

On July 11, 1980, the Circuit Criminal Court of Manila rendered

judgment acquitting petitioner of the charges against him. The
dispositive portion of the decision reads:
WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo,
not guilty of the violations charged in all these three cases and
hereby acquits him therefrom, with costs de oficio. The bail bonds
filed by said accused for his provisional liberty are hereby cancelled
and released.
Pursuant to the provisions of Section 13, R.A. No. 3019, as
amended, otherwise known as The Anti-Graft and Corrupt Practices
Act, and under which the accused has been suspended by this Court
in an Order dated October 22, 1976, said accused is hereby ordered
reinstated to the position of President of the Philippine College of
Commerce, now known as the Polytechnic University of the
Philippines, from which he has been suspended. By virtue of said
reinstatement, he is entitled to receive the salaries and other
benefits which he failed to receive during suspension, unless in the
meantime administrative proceedings have been filed against him.
The bail bonds filed by the accused for his provisional liberty in
these cases are hereby cancelled and released.
SO ORDERED.
The cases filed before the Tanodbayan (now the Ombudsman)
were likewise dismissed on August 8, 1991 on the ground that they
had become moot and academic. On the other hand, the
administrative cases were dismissed for failure of the complainants
to prosecute them.
On February 12, 1992, petitioner filed with the Regional Trial
Court a motion for execution of the judgment, particularly the part
ordering his reinstatement to the position of president of the PUP
and the payment of his salaries and other benefits during the period
of suspension.
The motion was granted and a partial writ of execution was
issued by the trial court on March 6, 1992.On March 26, 1992,
however, President Corazon C. Aquino appointed Dr. Jaime Gellor as

acting president of the PUP, following the expiration of the term of

office of Dr. Nemesio Prudente, who had succeeded Dr.
Mateo. Petitioner was one of the five nominees considered by the
President of the Philippines for the position.
On April 24, 1992, the Regional Trial Court, through respondent
Judge Teresita Dy-Liaco Flores, issued another order, reiterating her
earlier order for the reinstatement of petitioner to the position of
PUP president.A writ of execution, ordering the sheriff to implement
the order of reinstatement, was issued.
In his return dated April 28, 1992, the sheriff stated that he had
executed the writ by installing petitioner as President of the PUP,
although Dr. Gellor did not vacate the office as he wanted to consult
with the President of the Philippines first. This led to a contempt
citation against Dr. Gellor. A hearing was set on May 7, 1992. On
May 5, 1992, petitioner also moved to cite Department of
Education, Culture and Sports Secretary Isidro Cario in contempt of
court. Petitioner assumed the office of president of the PUP.
On May 18, 1992, therefore, the People of the Philippines filed a
petition for certiorari and prohibition (CA G.R. No. 27931), assailing
the two orders and the writs of execution issued by the trial court. It
also asked for a temporary restraining order.
On June 25, 1992, the Court of Appeals issued a temporary
restraining order, enjoining petitioner to cease and desist from
acting as president of the PUP pursuant to the reinstatement orders
of the trial court, and enjoining further proceedings in Criminal
Cases Nos. VI-2329-2331.
On July 15, 1992, the Seventh Division of the Court of Appeals
rendered a decision,[2] the dispositive portion of which is set forth at
the beginning of this opinion. Said decision set aside the orders and
writ of reinstatement issued by the trial court. The payment of
salaries and benefits to petitioner accruing after the conversion of
the PCC to the PUP was disallowed. Recovery of salaries and
benefits was limited to those accruing from the time of petitioners
suspension until the conversion of the PCC to the PUP. The case was
remanded to the trial court for a determination of the amounts due
and payable to petitioner.

Hence this petition. Petitioner argues that P.D. No. 1341, which
converted the PCC into the PUP, did not abolish the PCC. He
contends that if the law had intended the PCC to lose its existence,
it would have specified that the PCC was being abolished rather
than converted and that if the PUP was intended to be a new
institution, the law would have said it was being created. Petitioner
claims that the PUP is merely a continuation of the existence of the
PCC, and, hence, he could be reinstated to his former position as
president.
In part the contention is well taken, but, as will presently be
explained, reinstatement is no longer possible because of the
promulgation of P.D. No. 1437 by the President of the Philippines on
June 10, 1978.
P.D. No. 1341 did not abolish, but only changed, the former
Philippine College of Commerce into what is now the Polytechnic
University of the Philippines, in the same way that earlier in 1952,
R.A. No. 778 had converted what was then the Philippine School of
Commerce into the Philippine College of Commerce.What took place
was a change in academic status of the educational institution, not
in its corporate life.Hence the change in its name, the expansion of
its curricular offerings, and the changes in its structure and
organization.
As petitioner correctly points out, when the purpose is to abolish
a department or an office or an organization and to replace it with
another one, the lawmaking authority says so. He cites the following
examples:
E.O. No. 709:
1. There is hereby created a Ministry of Trade and Industry,
hereinafter referred to as the Ministry. The existing Ministry of
Trade established pursuant to Presidential Decree No. 721 as
amended, and the existing Ministry established pursuant to
Presidential Decree No. 488 as amended, are abolished together
with their services, bureaus and similar agencies, regional offices,
and all other entities under their supervision and control. . . .
E.O. No. 710:

1. There is hereby created a Ministry of Public Works and Highways,

hereinafter referred to as the Ministry. The existing Ministry of
Public Works established pursuant to Executive Order No. 546 as
amended, and the existing Ministry of Public Highways established
pursuant to Presidential Decree No. 458 as amended, are abolished
together with their services, bureaus and similar agencies, regional
offices, and all other entities within their supervision and control. . .
.
R.A. No. 6975:
13. Creation and Composition. - A National Police Commission,
hereinafter referred to as the Commission, is hereby created for the
purpose of effectively discharging the functions prescribed in the
Constitution and provided in this Act.The Commission shall be a
collegial body within the Department. It shall be composed of a
Chairman and four (4) regular commissioners, one (1) of whom
shall be designated as Vice-Chairman by the President. The
Secretary of the Department shall be the ex-officio Chairman of the
Commission, while the Vice-Chairman shall act as the executive
officer of the Commission.
xxx xxx xxx
90. Status of Present NAPOLCOM, PC-INP. - Upon the effectivity of
this Act, the present National Police Commission, and the Philippine
Constabulary-Integrated National Police shall cease to exist. The
Philippine Constabulary, which is the nucleus of the integrated
Philippine Constabulary-Integrated National Police, shall cease to be
a major service of the Armed Forces of the Philippines. The
Integrated National Police, which is the civilian component of the
Philippine Constabulary-Integrated National Police, shall cease to be
the national police force and in lieu thereof, a new police force shall
be established and constituted pursuant to this Act.
In contrast, P.D. No. 1341, provides:
1. The present Philippine College of Commerce is hereby converted
into a university to be known as the Polytechnic University of the
Philippines, hereinafter referred to in this Decree as the University.

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

1. The present Philippine School of Commerce, located in the City of
Manila, Philippines, is hereby granted full college status and
converted into the Philippine College of Commerce, which will offer
not only its present one-year and two-year vocational commercial
curricula, the latter leading to the titles of Associate in Business
Education and/or Associate in Commerce, but also four-year courses
leading to the degrees of Bachelor of Science in Business in
Education and Bachelor of Science in Commerce, and five-year
courses leading to the degrees of Master of Arts in Business
Education and Master of Arts in Commerce, respectively.
The appellate court ruled, however, that the PUP and the PCC
are not one and the same institution but two different entities and
that since petitioner Crisostomos term was coterminous with the
legal existence of the PCC, petitioners term expired upon the
abolition of the PCC. In reaching this conclusion, the Court of
Appeals took into account the following:
a) After respondent Crisostomos suspension, P.D. No. 1341 (entitled
CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A
POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES,
ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING
ITS CURRICULAR OFFERINGS) was issued on April 1, 1978. This
decree explicitly provides that PUPs objectives and purposes cover
not only PCCs offering of programs in the field of commerce and
business administration but also programs in other polytechnic
areas and in other fields such as agriculture, arts and trades and
fisheries . . . (section 2). Being a university, PUP was conceived as a
bigger institution absorbing, merging and integrating the entire PCC
and other national schools as may be transferred to this new state
university.
b) The manner of selection and appointment of the university head
is substantially different from that provided by the PCC Charter. The
PUP President shall be appointed by the President of the
Philippines upon recommendation of the Secretary of Education and
Culture after consultation with the University Board of
Regents (section 4, P.D. 1341). The President of PCC, on the other

hand, was appointed by the President of the Philippines upon

recommendation of the Board of Trustees (Section 4, R.A. 778).
c) The composition of the new universitys Board of Regents is
likewise different from that of the PCC Board of Trustees (which
included the chairman of the Senate Committee on Education and
the chairman of the House Committee on Education, the President
of the PCC Alumni Association as well as the President of the
Chamber of Commerce of the Philippines). Whereas, among others,
the NEDA Director-General, the Secretary of Industry and the
Secretary of Labor are members of the PUP Board of
Regents. (Section 6, P.D. 1341).
d) The decree moreover transferred to the new university all the
properties including equipment and facilities:
. . . owned by the Philippine College of Commerce and such other
National Schools as may be integrated . . . including
their obligations and appropriations . . . (Sec. 12; Italics
supplied).[3]
But these are hardly indicia of an intent to abolish an existing
institution and to create a new one. New course offerings can be
added to the curriculum of a school without affecting its legal
existence. Nor will changes in its existing structure and organization
bring about its abolition and the creation of a new one.Only an
express declaration to that effect by the lawmaking authority will.
The Court of Appeals also cites the provision of P.D. No. 1341 as
allegedly implying the abolition of the PCC and the creation of a new
one the PUP in its stead:
12. All parcels of land, buildings, equipment and facilities owned by
the Philippine College of Commerce and such other national schools
as may be integrated by virtue of this decree, including their
obligations and appropriations thereof, shall stand transferred to the
Polytechnic University of the Philippines, provided, however, that
said national schools shall continue to receive their corresponding
shares from the special education fund of the

municipal/provincial/city government concerned as are now enjoyed

by them in accordance with existing laws and/or decrees.
The law does not state that the lands, buildings and equipment
owned by the PCC were being transferred to the PUP but only that
they stand transferred to it. Stand transferred simply means, for
example, that lands transferred to the PCC were to be understood
as transferred to the PUP as the new name of the institution.
But the reinstatement of petitioner to the position of president of
the PUP could not be ordered by the trial court because on June 10,
1978, P.D. No. 1437 had been promulgated fixing the term of office
of presidents of state universities and colleges at six (6) years,
renewable for another term of six (6) years, and authorizing the
President of the Philippines to terminate the terms of incumbents
who were not reappointed.P.D. No. 1437 provides:
6. The head of the university or college shall be known as the
President of the university or college. He shall be qualified for the
position and appointed for a term of six (6) years by the President
of the Philippines upon recommendation of the Secretary of
Education and Culture after consulting with the Board which may be
renewed for another term upon recommendation of the Secretary of
Education and Culture after consulting the Board. In case of vacancy
by reason of death, absence or resignation, the Secretary of
Education and Culture shall have the authority to designate an
officer in charge of the college or university pending the
appointment of the President.
The powers and duties of the President of the university or college,
in addition to those specifically provided for in this Decree shall be
those usually pertaining to the office of the president of a university
or college.
7. The incumbent president of a chartered state college or
university whose term may be terminated according to this Decree,
shall be entitled to full retirement benefits: provided that he has
served the government for at least twenty (20) years; and
provided, further that in case the number of years served is less

than 20 years, he shall be entitled to one month pay for every year
of service.
In this case, Dr. Pablo T. Mateo Jr., who had been acting
president of the university since April 3, 1979, was appointed
president of PUP for a term of six (6) years on March 28, 1980, with
the result that petitioners term was cut short. In accordance with 7
of the law, therefore, petitioner became entitled only to retirement
benefits or the payment of separation pay. Petitioner must have
recognized this fact, that is why in 1992 he asked then President
Aquino to consider him for appointment to the same position after it
had become vacant in consequence of the retirement of Dr.
Prudente.
WHEREFORE, the decision of the Court of Appeals is MODIFIED
by SETTING ASIDE the questioned orders of the Regional Trial Court
directing the reinstatement of the petitioner Isabelo T. Crisostomo
to the position of president of the Polytechnic University of the
Philippines and the payment to him of salaries and benefits which
he failed to receive during his suspension in so far as such payment
would include salaries accruing after March 28, 1980 when
petitioner Crisostomos term was terminated. Further proceedings in
accordance with this decision may be taken by the trial court to
determine the amount due and payable to petitioner by the
university up to March 28, 1980.
SO ORDERED.

G.R. No. 84301. April 7, 1993.

NATIONAL LAND TITLES AND DEEDS REGISTRATION

ADMINISTRATION, petitioner,
vs.
CIVIL SERVICE COMMISSION and VIOLETA L. GARCIA, respondents.
The Solicitor General for petitioner.
Raul R. Estrella for private respondent.
SYLLABUS
1. ADMINISTRATIVE LAW; EXECUTIVE ORDER NO. 649;
REORGANIZED LAND REGISTRATION COMMISSION TO NALTDRA;
EXPRESSLY PROVIDED THE ABOLITION OF EXISTING POSITIONS.
Executive Order No. 649 authorized the reorganization of the Land
Registration Commission (LRC) into the National Land Titles and Deeds
Registration Administration (NALTDRA). It abolished all the positions in
the now defunct LRC and required new appointments to be issued to
all employees of the NALTDRA. The question of whether or not a law
abolishes an office is one of legislative intent about which there can be
no controversy whatsoever if there is an explicit declaration in the law
itself. A closer examination of Executive Order No. 649 which
authorized the reorganization of the Land Registration Commission
(LRC) into the National Land Titles and Deeds Registration
Administration (NALTDRA), reveals that said law in express terms,
provided for the abolition of existing positions. Thus, without need of
any interpretation, the law mandates that from the moment an
implementing order is issued, all positions in the Land Registration
Commission are deemed non-existent. This, however, does not mean
removal. Abolition of a position does not involve or mean removal for
the reason that removal implies that the post subsists and that one is
merely separated therefrom. (Arao vs. Luspo, 20 SCRA 722 [1967])
After abolition, there is in law no occupant. Thus, there can be no
tenure to speak of. It is in this sense that from the standpoint of strict
law, the question of any impairment of security of tenure does not
arise. (De la Llana vs. Alba, 112 SCRA 294 [1982])
2. ID.; ID.; ID.; REORGANIZATION, VALID WHEN PURSUED IN GOOD
FAITH; CASE AT BAR. Nothing is better settled in our law than that
the abolition of an office within the competence of a legitimate body if
done in good faith suffers from no infirmity. Two questions therefore

arise: (1) was the abolition carried out by a legitimate body?; and (2)
was it done in good faith? There is no dispute over the authority to
carry out a valid reorganization in any branch or agency of the
Government. Under Section 9, Article XVII of the 1973 Constitution.
The power to reorganize is, however; not absolute. We have held in
Dario vs. Mison that reorganizations in this jurisdiction have been
regarded as valid provided they are pursued in good faith. This court
has pronounced that if the newly created office has substantially new,
different or additional functions, duties or powers, so that it may be
said in fact to create an office different from the one abolished, even
though it embraces all or some of the duties of the old office it will be
considered as an abolition of one office and the creation of a new or
different one. The same is true if one office is abolished and its duties,
for reasons of economy are given to an existing officer or office.
Executive Order No. 649 was enacted to improve the services and
better systematize the operation of the Land Registration Commission.
A reorganization is carried out in good faith if it is for the purpose of
economy or to make bureaucracy more efficient. To this end, the
requirement of Bar membership to qualify for key positions in the
NALTDRA was imposed to meet the changing circumstances and new
development of the times. Private respondent Garcia who formerly
held the position of Deputy Register of Deeds II did not have such
qualification. It is thus clear that she cannot hold any key position in
the NALTDRA, The additional qualification was not intended to remove
her from office. Rather, it was a criterion imposed concomitant with a
valid reorganization measure.
3. ID.; ID.; ID.; THERE IS NO VESTED PROPERTY RIGHT TO BE REEMPLOYED IN A REORGANIZED OFFICE; CASE AT BAR. There is no
such thing as a vested interest or an estate in an office, or even an
absolute right to hold it. Except constitutional offices which provide for
special immunity as regards salary and tenure, no one can be said to
have any vested right in an office or its salary. None of the exceptions
to this rule are obtaining in this case. To reiterate, the position which
private respondent Garcia would like to occupy anew was abolished
pursuant to Executive Order No. 649, a valid reorganization measure.
There is no vested property right to be re employed in a reorganized
office. Not being a member of the Bar, the minimum requirement to
qualify under the reorganization law for permanent appointment as
Deputy Register of Deeds II, she cannot be reinstated to her former
position without violating the express mandate of the law.

DECISION
CAMPOS, JR., J p:
The sole issue for our consideration in this case is whether or not
membership in the bar, which is the qualification requirement
prescribed for appointment to the position of Deputy Register of Deeds
under Section 4 of Executive Order No. 649 (Reorganizing the Land
Registration Commission (LRC) into the National Land Titles and Deeds
Registration Administration or NALTDRA) should be required of and/or
applied only to new applicants and not to those who were already in
the service of the LRC as deputy register of deeds at the time of the
issuance and implementation of the abovesaid Executive Order.
The facts, as succinctly stated in the Resolution ** of the Civil Service
Commission, are as follows:
"The records show that in 1977, petitioner Garcia, a Bachelor of Laws
graduate and a first grade civil service eligible was appointed Deputy
Register of Deeds VII under permanent status. Said position was later
reclassified to Deputy Register of Deeds III pursuant to PD 1529, to
which position, petitioner was also appointed under permanent status
up to September 1984. She was for two years, more or less,
designated as Acting Branch Register of Deeds of Meycauayan,
Bulacan. By virtue of Executive Order No. 649 (which took effect on
February 9, 1981) which authorized the restructuring of the Land
Registration Commission to National Land Titles and Deeds
Registration Administration and regionalizing the Offices of the
Registers therein, petitioner Garcia was issued an appointment as
Deputy Register of Deeds II on October 1, 1984, under temporary
status, for not being a member of the Philippine Bar. She appealed to
the Secretary of Justice but her request was denied. Petitioner Garcia
moved for reconsideration but her motion remained unacted. On
October 23, 1984, petitioner Garcia was administratively charged with
Conduct Prejudicial to the Best Interest of the Service. While said case
was pending decision, her temporary appointment as such was
renewed in 1985. In a Memorandum dated October 30, 1986, the then
Minister, now Secretary, of Justice notified petitioner Garcia of the
termination of her services as Deputy Register of Deeds II on the
ground that she was "receiving bribe money". Said Memorandum of
Termination which took effect on February 9, 1987, was the subject of

an appeal to the Inter-Agency Review Committee which in turn

referred the appeal to the Merit Systems Protection Board (MSPB).
In its Order dated July 6, 1987, the MSPB dropped the appeal of
petitioner Garcia on the ground that since the termination of her
services was due to the expiration of her temporary appointment, her
separation is in order. Her motion for reconsideration was denied on
similar ground." 1
However, in its Resolution 2 dated June 30, 1988, the Civil Service
Commission directed that private respondent Garcia be restored to her
position as Deputy Register of Deeds II or its equivalent in the
NALTDRA. It held that "under the vested right theory the new
requirement of BAR membership to qualify for permanent appointment
as Deputy Register of Deeds II or higher as mandated under said
Executive Order, would not apply to her (private respondent Garcia)
but only to the filling up of vacant lawyer positions on or after
February 9, 1981, the date said Executive Order took effect." 3 A
fortiori, since private respondent Garcia had been holding the position
of Deputy Register of Deeds II from 1977 to September 1984, she
should not be affected by the operation on February 1, 1981 of
Executive Order No. 649.
Petitioner NALTDRA filed the present petition to assail the validity of
the above Resolution of the Civil Service Commission. It contends that
Sections 8 and 10 of Executive Order No. 649 abolished all existing
positions in the LRC and transferred their functions to the appropriate
new offices created by said Executive Order, which newly created
offices required the issuance of new appointments to qualified office
holders. Verily, Executive Order No. 649 applies to private respondent
Garcia, and not being a member of the Bar, she cannot be reinstated
to her former position as Deputy Register of Deeds II.
We find merit in the petition.
Executive Order No. 649 authorized the reorganization of the Land
Registration Commission (LRC) into the National Land Titles and Deeds
Registration Administration (NALTDRA). It abolished all the positions in
the now defunct LRC and required new appointments to be issued to
all employees of the NALTDRA.

The question of whether or not a law abolishes an office is one of

legislative intent about which there can be no controversy whatsoever
if there is an explicit declaration in the law itself. 4 A closer
examination of Executive Order No. 649 which authorized the
reorganization of the Land Registration Commission (LRC) into the
National Land Titles and Deeds Registration Administration
(NALTDRA), reveals that said law in express terms, provided for the
abolition of existing positions, to wit:
Sec. 8. Abolition of Existing Positions in the Land Registration
Commission . . .
All structural units in the Land Registration Commission and in the
registries of deeds, and all Positions therein shall cease to exist from
the date specified in the implementing order to be issued by the
President pursuant to the preceding paragraph. Their pertinent
functions, applicable appropriations, records, equipment and property
shall be transferred to the appropriate staff or offices therein created.
(Emphasis Supplied.)
Thus, without need of any interpretation, the law mandates that from
the moment an implementing order is issued, all positions in the Land
Registration Commission are deemed non-existent. This, however,
does not mean removal. Abolition of a position does not involve or
mean removal for the reason that removal implies that the post
subsists and that one is merely separated therefrom. 5 After abolition,
there is in law no occupant. Thus, there can be no tenure to speak of.
It is in this sense that from the standpoint of strict law, the question of
any impairment of security of tenure does not arise. 6
Nothing is better settled in our law than that the abolition of an office
within the competence of a legitimate body if done in good faith
suffers from no infirmity. Two questions therefore arise: (1) was the
abolition carried out by a legitimate body?; and (2) was it done in
good faith?
There is no dispute over the authority to carry out a valid
reorganization in any branch or agency of the Government. Under
Section 9, Article XVII of the 1973 Constitution, the applicable law at
that time:

Sec. 9. All officials and employees in the existing Government of the

Republic of the Philippines shall continue in office until otherwise
provided by law or decreed by the incumbent President of the
Philippines, but all officials whose appointments are by this
Constitution vested in the Prime Minister shall vacate their respective
offices upon the appointment and qualifications of their successors.
The power to reorganize is, however; not absolute. We have held in
Dario vs. Mison 7 that reorganizations in this jurisdiction have been
regarded as valid provided they are pursued in good faith. This court
has pronounced 8 that if the newly created office has substantially
new, different or additional functions, duties or powers, so that it may
be said in fact to create an office different from the one abolished,
even though it embraces all or some of the duties of the old office it
will be considered as an abolition of one office and the creation of a
new or different one. The same is true if one office is abolished and its
duties, for reasons of economy are given to an existing officer or
office.
Executive Order No. 649 was enacted to improve the services and
better systematize the operation of the Land Registration Commission.
9 A reorganization is carried out in good faith if it is for the purpose of
economy or to make bureaucracy more efficient. 10 To this end, the
requirement of Bar membership to qualify for key positions in the
NALTDRA was imposed to meet the changing circumstances and new
development of the times. 11 Private respondent Garcia who formerly
held the position of Deputy Register of Deeds II did not have such
qualification. It is thus clear that she cannot hold any key position in
the NALTDRA, The additional qualification was not intended to remove
her from office. Rather, it was a criterion imposed concomitant with a
valid reorganization measure.
A final word, on the "vested right theory" advanced by respondent Civil
Service Commission. There is no such thing as a vested interest or an
estate in an office, or even an absolute right to hold it. Except
constitutional offices which provide for special immunity as regards
salary and tenure, no one can be said to have any vested right in an
office or its salary. 12 None of the exceptions to this rule are obtaining
in this case.

To reiterate, the position which private respondent Garcia would like to

occupy anew was abolished pursuant to Executive Order No. 649, a
valid reorganization measure. There is no vested property right to be
re employed in a reorganized office. Not being a member of the Bar,
the minimum requirement to qualify under the reorganization law for
permanent appointment as Deputy Register of Deeds II, she cannot be
reinstated to her former position without violating the express
mandate of the law.
WHEREFORE, premises considered, We hereby GRANT the petition and
SET ASIDE the questioned Resolution of the Civil Service Commission
reinstating private respondent to her former position as Deputy
Register of Deeds II or its equivalent in the National Land Titles and
Deeds Registration Administration.
SO ORDERED.

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

President Joseph Estrada issued on 30 September 1998

Executive Order No. 29, entitled Mandating the Streamlining of the
National Tobacco Administration (NTA), a government agency under
the Department of Agriculture. The order was followed by another
issuance, on 27 October 1998, by President Estrada of Executive
Order No. 36, amending Executive Order No. 29, insofar as the new
staffing pattern was concerned, by increasing from four hundred
(400) to not exceeding seven hundred fifty (750) the positions
affected thereby. In compliance therewith, the NTA prepared and
adopted a new Organization Structure and Staffing Pattern (OSSP)
which, on 29 October 1998, was submitted to the Office of the
President.
On 11 November 1998, the rank and file employees of NTA
Batac, among whom included herein petitioners, filed a letter-appeal
with the Civil Service Commission and sought its assistance in
recalling the OSSP. On 04 December 1998, the OSSP was approved
by the Department of Budget and Management (DBM) subject to
certain revisions. On even date, the NTA created a placement
committee to assist the appointing authority in the selection and
placement of permanent personnel in the revised OSSP. The results
of the evaluation by the committee on the individual qualifications
of applicants to the positions in the new OSSP were then
disseminated and posted at the central and provincial offices of the
NTA.
On 10 June 1996, petitioners, all occupying different positions at
the NTA office in Batac, Ilocos Norte, received individual notices of

termination of their employment with the NTA effective thirty (30)

days from receipt thereof. Finding themselves without any
immediate relief from their dismissal from the service, petitioners
filed a petition for certiorari, prohibition and mandamus, with prayer
for preliminary mandatory injunction and/or temporary restraining
order, with the Regional Trial Court (RTC) of Batac, Ilocos Norte,
and prayed 1) that a restraining order be immediately issued enjoining the
respondents from enforcing the notice of termination addressed
individually to the petitioners and/or from committing further acts of
dispossession and/or ousting the petitioners from their respective
offices;
2) that a writ of preliminary injunction be issued against the
respondents, commanding them to maintain the status quo to
protect the rights of the petitioners pending the determination of
the validity of the implementation of their dismissal from the
service; and
3) that, after trial on the merits, judgment be rendered declaring
the notice of termination of the petitioners illegal and the
reorganization null and void and ordering their reinstatement with
backwages, if applicable, commanding the respondents to desist
from further terminating their services, and making the injunction
permanent.
[1]

The RTC, on 09 September 2000, ordered the NTA to appoint

petitioners in the new OSSP to positions similar or comparable to
their respective former assignments. A motion for reconsideration
filed by the NTA was denied by the trial court in its order of 28
February 2001. Thereupon, the NTA filed an appeal with the Court
of Appeals, raising the following issues:
I. Whether or not respondents submitted evidence as proof
that petitioners, individually, were not the best qualified
and most deserving among the incumbent applicantemployees.

II. Whether or not incumbent permanent employees,

including herein petitioners, automatically enjoy a
preferential right and the right of first refusal to
appointments/reappointments in the new Organization
Structure And Staffing Pattern (OSSP) of respondent
NTA.
III. Whether or not respondent NTA in implementing the
mandated reorganization pursuant to E.O. No. 29, as
amended by E.O. No. 36, strictly adhere to the
implementing rules on reorganization, particularly RA
6656 and of the Civil Service Commission Rules on
Government Reorganization.
IV. Whether or not the validity of E.O. Nos. 29 and 36 can be
put in issue in the instant case/appeal.
[2]

On 20 February 2002, the appellate court rendered a decision

reversing and setting aside the assailed orders of the trial court.
Petitioners went to this Court to assail the decision of the Court
of Appeals, contending that I. The Court of Appeals erred in making a finding that went
beyond the issues of the case and which are contrary to
those of the trial court and that it overlooked certain
relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion;
II. The Court of Appeals erred in upholding Executive Order
Nos. 29 and 36 of the Office of the President which are
mere administrative issuances which do not have the
force and effect of a law to warrant abolition of positions
and/or effecting total reorganization;
III. The Court of Appeals erred in holding that petitioners
removal from the service is in accordance with law;
IV. The Court of Appeals erred in holding that respondent NTA
was not guilty of bad faith in the termination of the
services of petitioners; (and)

V. The Court of Appeals erred in ignoring case

law/jurisprudence in the abolition of an office.

[3]

In its resolution of 10 July 2002, the Court required the NTA to file
its comment on the petition. On 18 November 2002, after the NTA
had filed its comment of 23 September 2002, the Court issued its
resolution denying the petition for failure of petitioners to
sufficiently show any reversible error on the part of the appellate
court in its challenged decision so as to warrant the exercise by this
Court of its discretionary appellate jurisdiction. A motion for
reconsideration filed by petitioners was denied in the Courts
resolution of 20 January 2002.
On 21 February 2003, petitioners submitted a Motion to Admit
Petition For En Banc Resolution of the case allegedly to address a
basic question, i.e., the legal and constitutional issue on whether
the NTA may be reorganized by an executive fiat, not by legislative
action. In their Petition for an En Banc Resolution petitioners would
have it that [4]

1. The Court of Appeals decision upholding the reorganization of the

National Tobacco Administration sets a dangerous precedent in that:
a) A mere Executive Order issued by the Office of the President and
procured by a government functionary would have the effect of a
blanket authority to reorganize a bureau, office or agency attached
to the various executive departments;
b) The President of the Philippines would have the plenary power to
reorganize the entire government Bureaucracy through the issuance
of an Executive Order, an administrative issuance without the
benefit of due deliberation, debate and discussion of members of
both chambers of the Congress of the Philippines;
c) The right to security of tenure to a career position created by law
or statute would be defeated by the mere adoption of an
Organizational Structure and Staffing Pattern issued pursuant to an
Executive Order which is not a law and could thus not abolish an
office created by law;

2. The case law on abolition of an office would be disregarded,

ignored and abandoned if the Court of Appeals decision subject
matter of this Petition would remain undisturbed and untouched. In
other words, previous doctrines and precedents of this Highest
Court would in effect be reversed and/or modified with the Court of
Appeals judgment, should it remain unchallenged.
3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex
D, Petition), issued by the Revolutionary government of former
President Corazon Aquino, and the law creating NTA, which provides
that the governing body of NTA is the Board of Directors, would be
rendered meaningless, ineffective and a dead letter law because the
challenged NTA reorganization which was erroneously upheld by the
Court of Appeals was adopted and implemented by then NTA
Administrator Antonio de Guzman without the corresponding
authority from the Board of Directors as mandated therein. In brief,
the reorganization is an ultra vires act of the NTA Administrator.
4. The challenged Executive Order No. 29 issued by former
President Joseph Estrada but unsigned by then Executive Secretary
Ronaldo Zamora would in effect be erroneously upheld and given
legal effect as to supersede, amend and/or modify Executive Order
No. 245, a law issued during the Freedom Constitution of President
Corazon Aquino. In brief, a mere executive order would amend,
supersede and/or render ineffective a law or statute.
[5]

In order to allow the parties a full opportunity to ventilate their

views on the matter, the Court ultimately resolved to hear the
parties in oral argument. Essentially, the core question raised by
them is whether or not the President, through the issuance of an
executive order, can validly carry out the reorganization of the NTA.
Notwithstanding the apparent procedural lapse on the part of
petitioner to implead the Office of the President as party respondent
pursuant to Section 7, Rule 3, of the 1997 Revised Rules of Civil
Procedure, this Court resolved to rule on the merits of the petition.
[6]

Buklod ng Kawaning EIIB vs. Zamora ruled that the President,

based on existing laws, had the authority to carry out a
reorganization in any branch or agency of the executive
department. In said case,Buklod ng Kawaning EIIB challenged the
[7]

issuance, and sought the nullification, of Executive Order No. 191

(Deactivation of the Economic Intelligence and Investigation
Bureau) and Executive Order No. 223 (Supplementary Executive
Order No. 191 on the Deactivation of the Economic Intelligence and
Investigation Bureau and for Other Matters) on the ground that they
were issued by the President with grave abuse of discretion and in
violation of their constitutional right to security of tenure. The Court
explained:
The general rule has always been that the power to abolish a public
office is lodged with the legislature. This proceeds from the legal
precept that the power to create includes the power to destroy. A
public office is either created by the Constitution, by statute, or by
authority of law. Thus, except where the office was created by the
Constitution itself, it may be abolished by the same legislature that
brought it into existence.
The exception, however, is that as far as bureaus, agencies or
offices in the executive department are concerned, the Presidents
power of control may justify him to inactivate the functions of a
particular office, or certain laws may grant him the broad authority
to carry out reorganization measures. The case in point is Larin v.
Executive Secretary [280 SCRA 713]. In this case, it was argued
that there is no law which empowers the President to reorganize the
BIR. In decreeing otherwise, this Court sustained the following legal
basis, thus:
`Initially, it is argued that there is no law yet which empowers the
President to issue E.O. No. 132 or to reorganize the BIR.
`We do not agree.
`x x x x x x
`Section 48 of R.A. 7645 provides that:
``Sec. 48. Scaling Down and Phase Out of Activities of Agencies
Within the Executive Branch. The heads of departments, bureaus
and offices and agencies are hereby directed to identify their
respective activities which are no longer essential in the delivery of

public services and which may be scaled down, phased out or

abolished, subject to civil service rules and regulations. x x x. Actual
scaling down, phasing out or abolition of the activities shall be
effected pursuant to Circulars or Orders issued for the purpose by
the Office of the President.
`Said provision clearly mentions the acts of `scaling down, phasing
out and abolition of offices only and does not cover the creation of
offices or transfer of functions. Nevertheless, the act of creating and
decentralizing is included in the subsequent provision of Section 62
which provides that:
``Sec. 62. Unauthorized organizational changes. Unless otherwise
created by law or directed by the President of the Philippines, no
organizational unit or changes in key positions in any department or
agency shall be authorized in their respective organization
structures and be funded from appropriations by this Act.
`The foregoing provision evidently shows that the President is
authorized to effect organizational changes including the creation of
offices in the department or agency concerned.
`x x x x x x
`Another legal basis of E.O. No. 132 is Section 20, Book III of E.O.
No. 292 which states:
``Sec. 20. Residual Powers. Unless Congress provides otherwise,
the President shall exercise such other powers and functions vested
in the President which are provided for under the laws and which
are not specifically enumerated above or which are not delegated by
the President in accordance with law.
`This provision speaks of such other powers vested in the President
under the law. What law then gives him the power to reorganize? It
is Presidential Decree No. 1772 which amended Presidential Decree
No. 1416. These decrees expressly grant the President of the
Philippines the continuing authority to reorganize the national
government, which includes the power to group, consolidate
bureaus and agencies, to abolish offices, to transfer functions, to

create and classify functions, services and activities and to

standardize salaries and materials. The validity of these two decrees
are unquestionable. The 1987 Constitution clearly provides that `all
laws, decrees, executive orders, proclamations, letter of instructions
and other executive issuances not inconsistent with this Constitution
shall remain operative until amended, repealed or revoked. So far,
there is yet no law amending or repealing said decrees.
Now, let us take a look at the assailed executive order.
In the whereas clause of E.O. No. 191, former President Estrada
anchored his authority to deactivate EIIB on Section 77 of Republic
Act 8745 (FY 1999 General Appropriations Act), a provision similar
to Section 62 of R.A. 7645 quoted in Larin, thus:
`Sec. 77. Organized Changes. Unless otherwise provided by law
or directed by the President of the Philippines, no changes in key
positions or organizational units in any department or agency shall
be authorized in their respective organizational structures and
funded from appropriations provided by this Act.
We adhere to the x x x ruling in Larin that this provision recognizes
the authority of the President to effect organizational changes in the
department or agency under the executive structure. Such a ruling
further finds support in Section 78 of Republic Act No. 8760. Under
this law, the heads of departments, bureaus, offices and agencies
and other entities in the Executive Branch are directed (a) to
conduct a comprehensive review of this respective mandates,
missions, objectives, functions, programs, projects, activities and
systems and procedures; (b) identify activities which are no longer
essential in the delivery of public services and which may be scaled
down, phased-out or abolished; and (c) adopt measures that will
result in the streamlined organization and improved overall
performance of their respective agencies. Section 78 ends up with
the mandate that the actual streamlining and productivity
improvement in agency organization and operation shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office
of the President. The law has spoken clearly. We are left only with
the duty to sustain.

But of course, the list of legal basis authorizing the President to

reorganize any department or agency in the executive branch does
not have to end here. We must not lose sight of the very source of
the power that which constitutes an express grant of power. Under
Section 31, Book III of Executive Order No. 292 (otherwise known
as the Administrative Code of 1987), the President, subject to the
policy in the Executive Office and in order to achieve simplicity,
economy and efficiency, shall have the continuing authority to
reorganize the administrative structure of the Office of the
President. For this purpose, he may transfer the functions of other
Departments or Agencies to the Office of the
President. In Canonizado vs. Aguirre [323 SCRA 312], we ruled that
reorganization involves the reduction of personnel, consolidation of
offices, or abolition thereof by reason of economy or redundancy of
functions. It takes place when there is an alteration of the existing
structure of government offices or units therein, including the lines
of control, authority and responsibility between them. The EIIB is a
bureau attached to the Department of Finance. It falls under the
Office of the President. Hence, it is subject to the Presidents
continuing authority to reorganize.
It having been duly established that the President has the authority
to carry out reorganization in any branch or agency of the executive
department, what is then left for us to resolve is whether or not the
reorganization is valid. In this jurisdiction, reorganizations have
been regarded as valid provided they are pursued in good
faith. Reorganization is carried out in `good faith if it is for the
purpose of economy or to make bureaucracy more
efficient. Pertinently, Republic Act No. 6656 provides for the
circumstances which may be considered as evidence of bad faith in
the removal of civil service employees made as a result of
reorganization, to wit: (a) where there is a significant increase in
the number of positions in the new staffing pattern of the
department or agency concerned; (b) where an office is abolished
and another performing substantially the same functions is
created; (c) where incumbents are replaced by those less qualified
in terms of status of appointment, performance and
merit; (d) where there is a classification of offices in the department
or agency concerned and the reclassified offices perform

substantially the same functions as the original offices,

and (e) where the removal violates the order of separation.

[8]

The Court of Appeals, in its now assailed decision, has found no

evidence of bad faith on the part of the NTA; thus In the case at bar, we find no evidence that the respondents
committed bad faith in issuing the notices of non-appointment to
the petitioners.
Firstly, the number of positions in the new staffing pattern did not
increase. Rather, it decreased from 1,125 positions to 750. It is thus
natural that ones position may be lost through the removal or
abolition of an office.
Secondly, the petitioners failed to specifically show which offices
were abolished and the new ones that were created performing
substantially the same functions.
Thirdly, the petitioners likewise failed to prove that less qualified
employees were appointed to the positions to which they applied.
x x x x x x x x x.
Fourthly, the preference stated in Section 4 of R.A. 6656, only
means that old employees should be considered first, but it does not
necessarily follow that they should then automatically be
appointed. This is because the law does not preclude the infusion of
new blood, younger dynamism, or necessary talents into the
government service, provided that the acts of the appointing power
are bonafide for the best interest of the public service and the
person chosen has the needed qualifications.
[9]

These findings of the appellate court are basically factual which this
Court must respect and be held bound.
It is important to emphasize that the questioned
Executive Orders No. 29 and No. 36 have not abolished the
National Tobacco Administration but merely mandated its
reorganization through the streamlining or reduction of its
personnel. Article VII, Section 17, of the Constitution, expressly
[10]

grants the President control of all executive departments, bureaus,

agencies and offices which may justify an executive action to
inactivate the functions of a particular office or to carry out
reorganization measures under a broad authority of law. Section
78 of the General Provisions of Republic Act No. 8522 (General
Appropriations Act of FY 1998) has decreed that the President may
direct changes in the organization and key positions in any
department, bureau or agency pursuant to Article VI, Section
25, of the Constitution, which grants to the Executive Department
the authority to recommend the budget necessary for its
operation. Evidently, this grant of power includes the authority to
evaluate each and every government agency, including the
determination of the most economical and efficient staffing pattern,
under the Executive Department.
[11]

[12]

In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon.

Ronaldo D. Zamora, in his capacity as the Executive Secretary, et
al., this Court has had occasion to also delve on the Presidents
power to reorganize the Office of the President under Section 31(2)
and (3) of Executive Order No. 292 and the power to reorganize the
Office of the President Proper. The Court has there observed:
[13]

x x x. Under Section 31(1) of EO 292, the President can reorganize

the Office of the President Proper by abolishing, consolidating or
merging units, or by transferring functions from one unit to
another. In contrast, under Section 31(2) and (3) of EO 292, the
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.
The provisions of Section 31, Book III, Chapter 10, of Executive
Order No. 292 (Administrative Code of 1987), above-referred to,
reads thusly:
SEC. 31. Continuing Authority of the President to Reorganize his
Office. The President, subject to the policy in the Executive Office
and in order to achieve simplicity, economy and efficiency, shall
have continuing authority to reorganize the administrative structure

of the Office of the President. For this purpose, he may take any of
the following actions:
(1) Restructure the internal organization of the Office of the
President Proper, including the immediate Offices, the Presidential
Special Assistants/Advisers System and the Common Staff Support
System, by abolishing, consolidating or merging units thereof or
transferring functions from one unit to another;
(2) Transfer any function under the Office of the President to any
other Department or Agency as well as transfer functions to the
Office of the President from other Departments and Agencies; and
(3) Transfer any agency under the Office of the President to any
other department or agency as well as transfer agencies to the
Office of the President from other departments and agencies.
The first sentence of the law is an express grant to the President of
a continuing authority to reorganize the administrative
structure of the Office of the President. The succeeding
numbered paragraphs are not in the nature of provisos that unduly
limit the aim and scope of the grant to the President of the power to
reorganize but are to be viewed in consonance therewith. Section
31(1) of Executive Order No. 292 specifically refers to the
Presidents power to restructure the internal organization of the
Office of the President Proper, by abolishing, consolidating or
merging units hereof or transferring functions from one unit to
another, while Section 31(2) and (3) concern executive offices
outside the Office of the President Properallowing the President to
transfer any function under the Office of the President to any other
Department or Agency and vice-versa, and the transfer of any
agency under the Office of the President to any other department or
agency and vice-versa.
[14]

In the present instance, involving neither an abolition nor

transfer of offices, the assailed action is a mere reorganization
under the general provisions of the law consisting mainly
of streamlining the NTA in the interest of simplicity, economy and
efficiency. It is an act well within the authority of President
motivated and carried out, according to the findings of the appellate

court, in good faith, a factual assessment that this Court could only
but accept.
[15]

In passing, relative to petitioners Motion for an En

Banc Resolution of the Case, it may be well to remind counsel, that
the Court En Banc is not an appellate tribunal to which appeals from
a Division of the Court may be taken. A Division of the Court is the
Supreme Court as fully and veritably as the Court En Banc itself and
a decision of its Division is as authoritative and final as a decision of
the Court En Banc. Referrals of cases from a Division to the
Court En Banc do not take place as just a matter of routine but only
on such specified grounds as the Court in its discretion may allow.
[16]

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

SECOND DIVISION
KAPISANAN NG MGA
KAWANI NG ENERGY
REGULATORY BOARD,
Petitioner,

- versus -

COMMISSIONER FE B.
BARIN, DEPUTY
COMMISSIONERS CARLOS R.
ALINDADA, LETICIA V. IBAY,
OLIVER B. BUTALID, and
MARY ANNE B. COLAYCO, of
the ENERGY REGULATORY
COMMISSION,
Respondents.

G.R. No. 150974

Present:
QUISUMBING,* J.,
Chairperson,
CARPIO,**
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

Promulgated:
June 29, 2007

x-------------------------------------------------x

DECISION
CARPIO, J.:
The Case
This

is

special

civil

action

for

certiorari

and

prohibition[1] of the selection and appointment of employees of

the Energy Regulatory Commission (ERC) by the ERC Board of
Commissioners.
Petitioner Kapisanan ng mga Kawani ng Energy Regulatory Board
(KERB) seeks to declare Section 38 of Republic Act No. 9136 (RA
9136), which abolished the Energy Regulatory Board (ERB) and
created the ERC, as unconstitutional and to prohibit the ERC
Commissioners from filling up the ERCsplantilla.

The Facts
RA 9136, popularly known as EPIRA (for Electric Power Industry
Reform Act of 2001), was enacted on 8 June 2001 and took effect
on 26 June 2001. Section 38 of RA 9136 provides for the abolition
of the ERB and the creation of the ERC. The pertinent portions of
Section 38 read:

Creation of the Energy Regulatory Commission. There is

hereby created an independent, quasi-judicial regulatory
board to be named the Energy Regulatory Commission
(ERC). For this purpose, the existing Energy Regulatory
Board (ERB) created under Executive Order No. 172, as
amended, is hereby abolished.
The Commission shall be composed of a Chairman and
four (4) members to be appointed by the President of
the Philippines. x x x
Within three (3) months from the creation of the ERC, the
Chairman shall submit for the approval of the President of
the Philippines the
new
organizational
structure
and plantilla positions necessary to carry out the powers
and functions of the ERC.
xxxx
The Chairman and members of the Commission shall
assume
office
at
the
beginning
of
their
terms:Provided, That, if upon the effectivity of this Act,
the Commission has not been constituted and the new
staffing pattern and plantilla positions have not been
approved and filled-up, the current Board and existing
personnel of ERB shall continue to hold office.

The existing personnel of the ERB, if qualified, shall be

given preference in the filling up of plantillapositions
created in the ERC, subject to existing civil service rules
and regulations.

At the time of the filing of this petition, the ERC was composed of
Commissioner Fe B. Barin and Deputy Commissioners Carlos
R. Alindada, Leticia V. Ibay, Oliver B. Butalid, and Mary Anne
B.Colayco (collectively,

Commissioners). The

Commissioners

assumed office on 15 August 2001.Pursuant to Section 38 of RA

9136,

the

Commissioners

Organization,

Staffing

issued

Pattern,

the

and

proposed

Salary

Table

Structure

of

on 25

September 2001 which the President of the Philippinesapproved

on 13

November

Commissioners

2001. Meanwhile,

its Resolution

No.

KERB

submitted

2001-02 on 13

to

the

September

2001. Resolution No. 2001-02 requested the Commissioners for

an opportunity to be informed on the proposed plantilla positions
with their equivalent qualification standards.
On 17 October 2001, the Commissioners issued the guidelines for
the selection and hiring of ERC employees. A portion of the
guidelines reflects the Commissioners view on the selection and
hiring of the ERC employees vis-a-vis Civil Service rules, thus:
Since R.A. 9136 has abolished the Energy Regulatory
Board (ERB), it is the view of the Commission that the
provisions of Republic Act No. 6656 (An Act to Protect the
Security of [Tenure of] Civil Service Officers and
Employees in the Implementation of Government
Reorganization) will not directly apply to ERCs current
efforts to establish a new organization. Civil Service laws,
rules
and
regulations,
however,
will
have suppletory application to the extent possible in
regard to the selection and placement of employees in
the ERC.[2] (Emphasis supplied)

On 5 November 2005, KERB sent a letter to the Commissioners

stating the KERB members objection to the Commissioners stand
that

Civil

Service

laws,

rules

and

regulations

have suppletory application in the selection and placement of the

ERC employees. KERB asserted that RA 9136 did not abolish the
ERB or change the ERBs character as an economic regulator of
the electric power industry. KERB insisted that RA 9136 merely
changed

the ERBs name

to

the

ERC

and

expanded

the ERBs functions and objectives. KERB sent the Commissioners

yet another letter on 13 November 2001. KERB made a number
of requests: (1) the issuance of a formal letter related to the date
of filing of job applications, including the use of Civil Service
application

form

no.

212;

(2) the

creation

of

placement/recruitment committee and setting guidelines relative

to its functions, without prejudice to existing Civil Service rules
and regulations; and (3) copies of the plantilla positions and their
corresponding qualification standards duly approved by either the
President of the Philippines or the Civil Service Commission
(CSC).
Commissioner Barin replied

to KERBs letter

on 15

November

2001. She stated that Civil Service application form no. 212 and
the ERC-prescribed application format are substantially the
same.Furthermore, the creation of a placement/recruitment
committee is no longer necessary because there is already a
prescribed set of guidelines for the recruitment of personnel. The
ERC hired an independent consultant to administer the necessary
tests for the technical and managerial levels.Finally, the ERC
already posted the plantilla positions, which prescribe higher
standards, as approved by the Department of Budget and
Management. Commissioner Barin stated that positions in the

ERC do not need the prior approval of the CSC, as the ERC is only
required to submit the qualification standards to the CSC.
On 5

December

2001,

the

ERC

published

classified

advertisement in the Philippine Star. Two days later, the CSC

received a list of vacancies and qualification standards from the
ERC. The ERC formed a Selection Committee to process all
applications.
KERB, fearful of the uncertainty of the employment status of its
members, filed the present petition on 20 December 2001. KERB
later filed an Urgent Ex Parte Motion to Enjoin Termination of
Petitioner ERB Employees on 2 January 2002. However, before
the ERC received KERBs pleadings, the Selection Committee
already

presented

its

list

of

proposed

appointees

to

the

Commissioners.
In their Comment, the Commissioners describe the status of the
ERB employees appointment in the ERC as follows:
As of February 1, 2002, of the two hundred twelve (212)
ERB employees, one hundred thirty eighty [sic] (138)
were rehired and appointed to ERC plantilla positions and
sixty six (66) opted to retire or be separated from the
service. Those who were rehired and those who opted to
retire or be separated constituted about ninety six (96%)
percent of the entire ERB employees. The list of the ERB
employees appointed to new positions in the ERC is
attached hereto as Annex 1. Only eight (8) ERB
employees could not be appointed to new positions due
to the reduction of the ERC plantilla and the absence of
positions appropriate to their respective qualifications and

skills. The appropriate notice was issued to each of them

informing them of their separation from the service and
assuring them of their entitlement to separation pay and
other benefits in accordance with existing laws.[3]

The Issues
KERB raises the following issues before this Court:
1.

Whether Section 38 of RA 9136 abolishing the ERB

is constitutional; and

2. Whether the Commissioners of the ERC were

correct
in
disregarding
and
considering
merelysuppletory in character the protective mantle
of RA 6656 as to the ERB employees or petitioner in
this case.[4]
The Ruling of the Court
The petition has no merit.
We disregard the procedural defects in the petition, such
as KERBs personality to file the petition on behalf of its alleged
members

and Elmar Agirs authority

to

institute

the

because of the demands of public interest.[5]

Constitutionality of the ERBs Abolition

and the ERCs Creation

action,

All laws enjoy the presumption of constitutionality. To justify the

nullification of a law, there must be a clear and unequivocal
breach of the Constitution. KERB failed to show any breach of the
Constitution.
A public office is created by the Constitution or by law or by an
officer or tribunal to which the power to create the office has
been delegated by the legislature.[6] The power to create an office
carries with it the power to abolish. President Corazon C. Aquino,
then exercising her legislative powers, created the ERB by issuing
Executive Order No. 172 on 8 May 1987.
The question of whether a law abolishes an office is a question of
legislative intent. There should not be any controversy if there is
an explicit declaration of abolition in the law itself.[7] Section 38 of
RA 9136 explicitly abolished the ERB. However, abolition of an
office and its related positions is different from removal of an
incumbent from his office. Abolition and removal are mutually
exclusive concepts. From a legal standpoint, there is no occupant
in an abolished office. Where there is no occupant, there is no
tenure to speak of. Thus, impairment of the constitutional
guarantee of security of tenure does not arise in the abolition of
an office. On the other hand, removal implies that the office and
its related positions subsist and that the occupants are merely
separated from their positions.[8]
A valid order of abolition must not only come from a legitimate
body, it must also be made in good faith. An abolition is made in

good faith when it is not made for political or personal reasons, or

when it does not circumvent the constitutional security of tenure
of civil service employees.[9] Abolition of an office may be brought
about by reasons of economy, or to remove redundancy of
functions, or a clear and explicit constitutional mandate for such
termination of employment.[10] Where one office is abolished and
replaced with another office vested with similar functions, the
abolition is a legal nullity.[11] When there is a void abolition, the
incumbent is deemed to have never ceased holding office.
KERB asserts that there was no valid abolition of the ERB but
there was merely a reorganization done in bad faith. Evidences of
bad faith are enumerated in Section 2 of Republic Act No. 6656
(RA 6656),[12] Section 2 of RA 6656 reads:
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 function as the
original offices;
(e) Where the removal violates the order of separation
provided in Section 3 hereof.

KERB claims that the present case falls under the situation
described in Section 2(b) of RA 6656. We thus need to compare
the provisions enumerating the powers and functions of the ERB
and the ERC to see whether they have substantially the same
functions. Under Executive Order No. 172, the ERB has the
following powers and functions:
SEC. 3. Jurisdiction, Powers and Functions of the
Board. When warranted and only when public necessity
requires, the Board may regulate the business of
importing,
exporting,
re-exporting,
shipping,
transporting, processing, refining, marketing and
distributing energy resources. Energy resource means
any substance or phenomenon which by itself or in
combination with others, or after processing or refining or
the application to it of technology, emanates, generates
or causes the emanation or generation of energy, such as
but not limited to, petroleum or petroleum products, coal,
marsh gas, methane gas, geothermal and hydroelectric
sources of energy, uranium and other similar radioactive
minerals, solar energy, tidal power, as well as nonconventional existing and potential sources.

The Board shall, upon proper notice and hearing, exercise

the following, among other powers and functions:
(a) Fix and
products;

regulate

the

prices

of

petroleum

(b) Fix and regulate the rate schedule or prices of piped

gas to be charged by duly franchised gas companies
which distribute gas by means of underground pipe
system;
(c) Fix and regulate the rates of pipeline concessionaires
under the provisions of Republic Act No. 387, as
amended, otherwise known as the Petroleum Act of 1949,
as amended by Presidential Decree No. 1700;
(d) Regulate the capacities of new refineries or additional
capacities of existing refineries and license refineries that
may be organized after the issuance of this Executive
Order, under such terms and conditions as are consistent
with the national interest;
(e) Whenever the Board has determined that there is a
shortage of any petroleum product, or when public
interest so requires, it may take such steps as it may
consider necessary, including the temporary adjustment
of the levels of prices of petroleum products and the
payment to the Oil Price Stabilization Fund created under
Presidential Decree No. 1956 by persons or entities
engaged in the petroleum industry of such amounts as
may be determined by the Board, which will enable the
importer to recover its cost of importation.
SEC. 4. Reorganized or Abolished Agency. (a) The
Board of Energy is hereby reconstituted into the Energy
Regulatory Board, and the formers powers and functions
under Republic Act No. 6173, as amended by Presidential
Decree No. 1208, as amended, are transferred to the
latter.

(b) The regulatory and adjudicatory powers and functions

exercised by the Bureau of Energy Utilization under
Presidential Decree No. 1206, as amended, are
transferred to the Board, the provisions of Executive
Order No. 131 notwithstanding.
SEC. 5. Other Transferred Powers and Functions. The
power of the Land Transportation Commission to
determine, fix and/or prescribe rates or charges
pertaining to the hauling of petroleum products are
transferred to the Board. The power to fix and regulate
the rates or charges pertinent to shipping or transporting
of petroleum products shall also be exercised by the
Board.
The foregoing transfer of powers and functions shall
include applicable funds and appropriations, records,
equipment, property and such personnel as may be
necessary; Provided, That with reference to paragraph
(b) of Section 4 hereof, only such amount of funds and
appropriations of the Bureau of Energy Utilization, as well
as only the personnel thereof who are completely or
primarily involved in the exercise by said Bureau of its
regulatory and adjudicatory powers and functions, shall
be affected by such transfer: Provided, further, That the
funds and appropriations as well as the records,
equipment, property and all personnel of the reorganized
Board of Energy shall be transferred to the Energy
Regulatory Board.
SEC. 6. Power to Promulgate Rules and Perform Other
Acts. The Board shall have the power to promulgate
rules and regulations relevant to procedures governing
hearings before it and enforce compliance with any rule,
regulation,
order
or
other
requirements:
Provided, That said rules and regulations shall take effect
fifteen (15) days after publication in the Official Gazette.
It shall also perform such other acts as may be necessary

or conducive to the exercise of its powers and functions,

and the attainment of the purposes of this Order.

On the other hand, Section 43 of RA 9136 enumerates the basic

functions of the ERC.
SEC. 43. Functions of the ERC. The ERC shall promote
competition, encourage market development, ensure
customer choice and discourage/penalize abuse of market
power in the restructured electricity industry. In
appropriate cases, the ERC is authorized to issue cease
and desist order after due notice and hearing. Towards
this end, it shall be responsible for the following key
functions in the restructured industry:
(a) Enforce the implementing rules and regulations
of this Act;
(b) Within six (6) months from the effectivity of this Act,
promulgate and enforce, in accordance with law, a
National Grid Code and a Distribution Code which shall
include, but not limited to, the following:
(i) Performance standards for TRANSCO O & M
Concessionaire,
distribution
utilities
and
suppliers: Provided, That in the establishment of the
performance standards, the nature and function of
the entities shall be considered; and
(ii) Financial capability standards for the generating
companies, the TRANSCO, distribution utilities and
suppliers: Provided, That in the formulation of the
financial capability standards, the nature and
function of the entity shall be considered: Provided,
further, That such standards are set to ensure that
the electric power industry participants meet the
minimum financial standards to protect the public
interest. Determine, fix, and approve, after due

notice and public hearings the universal charge, to

be imposed on all electricity end-users pursuant to
Section 34 hereof;
(c) Enforce the rules and regulations governing the
operations of the electricity spot market and the activities
of the spot market operator and other participants in the
spot market, for the purpose of ensuring a greater supply
and rational pricing of electricity;
(d) Determine the level of cross subsidies in the existing
retail rate until the same is removed pursuant to Section
73 hereof;
(e) Amend or revoke, after due notice and hearing, the
authority to operate of any person or entity which fails to
comply with the provisions hereof, the IRR or any order
or resolution of the ERC. In the event a divestment is
required, the ERC shall allow the affected party sufficient
time to remedy the infraction or for an orderly disposal,
but shall in no case exceed twelve (12) months from the
issuance of the order;
(f) In the public interest, establish and enforce a
methodology for setting transmission and distribution
wheeling rates and retail rates for the captive market of a
distribution utility, taking into account all relevant
considerations, including the efficiency or inefficiency of
the regulated entities. The rates must be such as to allow
the recovery of just and reasonable costs and a
reasonable return on rate base (RORB) to enable the
entity to operate viably. The ERC may adopt alternative
forms
of
internationally-accepted
rate
setting
methodology as it may deem appropriate. The ratesetting methodology so adopted and applied must ensure
a reasonable price of electricity. The rates prescribed
shall be non-discriminatory. To achieve this objective and
to ensure the complete removal of cross subsidies, the
cap on the recoverable rate of system losses prescribed
in Section 10 of Republic Act No. 7832, is hereby

amended and shall be replaced by caps which shall be

determined by the ERC based on load density, sales mix,
cost of service, delivery voltage and other technical
considerations it may promulgate. The ERC shall
determine such form of rate-setting methodology, which
shall promote efficiency. In case the rate setting
methodology used is RORB, it shall be subject to the
following guidelines:
(i) For purposes of determining the rate base, the
TRANSCO or any distribution utility may be allowed
to revalue its eligible assets not more than once
every three (3) years by an independent appraisal
company: Provided, however, That ERC may give an
exemption in case of unusual devaluation: Provided,
further, That the ERC shall exert efforts to minimize
price shocks in order to protect the consumers;
(ii) Interest expenses are not allowable deductions
from permissible return on rate base;
(iii) In determining eligible cost of services that will
be passed on to the end-users, the ERC shall
establish minimum efficiency performance standards
for the TRANSCO and distribution utilities including
systems losses, interruption frequency rates, and
collection efficiency;
(iv) Further, in determining rate base, the TRANSCO
or any distribution utility shall not be allowed to
include management inefficiencies like cost of
project delays not excused by forcemajeure,
penalties and related interest during construction
applicable to these unexcused delays; and

(v) Any significant operating costs or project

investments of TRANSCO and distribution utilities
which shall become part of the rate base shall be
subject to the verification of the ERC to ensure that
the contracting and procurement of the equipment,
assets and services have been subjected to
transparent and accepted industry procurement and
purchasing practices to protect the public interest.
(g) Three (3) years after the imposition of the universal
charge, ensure that the charges of the TRANSCO or any
distribution utility shall bear no cross subsidies between
grids, within grids, or between classes of customers,
except as provided herein;
(h) Review and approve any changes on the terms and
conditions of service of the TRANSCO or any distribution
utility;
(i) Allow the TRANSCO to charge user fees for ancillary
services to all electric power industry participants or selfgenerating entities connected to the grid. Such fees shall
be fixed by the ERC after due notice and public hearing;
(j) Set a lifeline rate for the marginalized end-users;
(k) Monitor and take measures in accordance with this
Act to penalize abuse of market power, cartelization, and
anti-competitive or discriminatory behavior by any
electric power industry participant;
(l) Impose fines or penalties for any non-compliance with
or breach of this Act, the IRR of this Act and the rules
and regulations which it promulgates or administers;
(m) Take any other action delegated to it pursuant
to this Act;
(n) Before the end of April of each year, submit to the
Office of the President of the Philippines and Congress,

copy furnished the DOE, an annual report containing such

matters or cases which have been filed before or referred
to it during the preceding year, the actions and
proceedings undertaken and its decision or resolution in
each case. The ERC shall make copies of such reports
available to any interested party upon payment of a
charge which reflects the printing costs. The ERC shall
publish
all
its
decisions
involving
rates
and
anticompetitive cases in at least one (1) newspaper of
general circulation, and/or post electronically and
circulate to all interested electric power industry
participants copies of its resolutions to ensure fair and
impartial treatment;
(o) Monitor the activities of the generation and supply of
the electric power industry with the end in view of
promoting free market competition and ensuring that the
allocation or pass through of bulk purchase cost by
distributors is transparent, non-discriminatory and that
any existing subsidies shall be divided pro rata among all
retail suppliers;

(p) Act on applications for or modifications of certificates

of public convenience and/or necessity, licenses or
permits of franchised electric utilities in accordance with
law and revoke, review and modify such certificates,
licenses or permits in appropriate cases, such as in cases
of violations of the Grid Code, Distribution Code and
other rules and regulations issued by the ERC in
accordance with law;
(q) Act on applications for cost recovery and return on
demand side management projects;
(r) In the exercise of its investigative and quasi-judicial
powers, act against any participant or player in the
energy sector for violations of any law, rule and
regulation governing the same, including the rules on

cross ownership, anticompetitive practices, abuse of

market positions and similar or related acts by any
participant in the energy sector, or by any person as may
be provided by law, and require any person or entity to
submit any report or data relative to any investigation or
hearing conducted pursuant to this Act;
(s) Inspect, on its own or through duly authorized
representatives, the premises, books of accounts and
records of any person or entity at any time, in the
exercise of its quasi-judicial power for purposes of
determining the existence of any anticompetitive
behavior and/or market power abuse and any violation of
rules and regulations issued by the ERC;
(t) Perform such other regulatory functions as are
appropriate and necessary in order to ensure the
successful restructuring and modernization of the electric
power industry, such as, but not limited to, the rules and
guidelines
under
which
generation
companies,
distribution utilities which are not publicly listed shall
offer and sell to the public a portion not less than fifteen
percent
(15%)
of
their
common
shares
of
stocks: Provided, however, That generation companies,
distribution utilities or their respective holding companies
that are already listed in the PSE are deemed in
compliance. For existing companies, such public offering
shall be implemented not later than five (5) years from
the effectivity of this Act. New companies shall implement
their respective public offerings not later than five (5)
years from the issuance of their certificate of compliance;
and
(u) The ERC shall have the original and exclusive
jurisdiction over all cases contesting rates, fees, fines and
penalties imposed by the ERC in the exercise of the
abovementioned powers, functions and responsibilities
and over all cases involving disputes between and among
participants or players in the energy sector.

All notices of hearings to be conducted by the ERC for the

purpose of fixing rates or fees shall be published at least
twice for two successive weeks in two (2) newspapers of
nationwide circulation.

Aside from Section 43, additional functions of the ERC are

scattered throughout RA 9136:
1.

SEC.
6. Generation
Sector. Generation
of
electric power, a business affected with public
interest, shall be competitive and open.
Upon the effectivity of this Act, any new generation
company shall, before it operates, secure from the
Energy Regulatory Commission (ERC) a certificate
of compliance pursuant to the standards set forth in
this Act, as well as health, safety and environmental
clearances from the appropriate government
agencies under existing laws.
xxxx

2.

SEC. 8. Creation of the National Transmission

Company. x x x
That the subtransmission assets shall be operated
and maintained by TRANSCO until their disposal to
qualified distribution utilities which are in a position
to take over the responsibility for operating,
maintaining, upgrading, and expanding said
assets. x x x
In case of disagreement in valuation, procedures,
ownership participation and other issues, the ERC
shall resolve such issues.
xxxx

3.

SEC. 23. Functions of Distribution Utilities. x x x

Distribution utilities shall submit to the ERC a
statement of their compliance with the technical
specifications prescribed in the Distribution Code
and the performance standards prescribed in the
IRR of this Act. Distribution utilities which do not
comply with any of the prescribed technical
specifications and performance standards shall
submit to the ERC a plan to comply, within three (3)
years, with said prescribed technical specifications
and performance standards. The ERC shall, within
sixty (60) days upon receipt of such plan, evaluate
the same and notify the distribution utility
concerned of its action. Failure to submit a feasible
and credible plan and/or failure to implement the
same shall serve as grounds for the imposition of
appropriate sanctions, fines or penalties.
xxxx

4.

SEC. 28. De-monopolization and Shareholding

Dispersal. In compliance with the constitutional
mandate for dispersal of ownership and demonopolization of public utilities, the holdings of
persons, natural or juridical, including directors,
officers, stockholders and related interests, in a
distribution utility and their respective holding
companies shall not exceed twenty-five (25%)
percent of the voting shares of stock unless the
utility or the company holding the shares or its
controlling stockholders are already listed in the
Philippine Stock Exchange (PSE):Provided, That
controlling stockholders of small distribution utilities
are hereby required to list in the PSE within five (5)
years from the enactment of this Act if they already
own the stocks. New controlling stockholders shall
undertake such listing within five (5) years from the
time they acquire ownership and control. A small

distribution company is one whose peak demand is

equal to Ten megawatts (10MW).
The ERC shall, within sixty (60) days from
the effectivity of this Act, promulgate the rules and
regulations to implement and effect this provision.
xxxx
5.

SEC. 29. Supply Sector. x x x all suppliers of

electricity to the contestable market shall require a
license from the ERC.
For this purpose, the ERC shall promulgate rules
and regulations prescribing the qualifications of
electricity suppliers which shall include, among
other requirements, a demonstration of their
technical capability, financial capability, and
creditworthiness: Provided, That the ERC shall have
authority to require electricity suppliers to furnish a
bond or other evidence of the ability of a supplier to
withstand market disturbances or other events that
may increase the cost of providing service.
xxxx

6.

SEC.
30. Wholesale
Market. x x x

Electricity

Spot

Subject to the compliance with the membership

criteria, all generating companies, distribution
utilities, suppliers, bulk consumers/end-users and
other similar entities authorized by the ERC shall be
eligible to become members of the wholesale
electricity spot market.
The ERC may authorize other similar entities to
become eligible as members, either directly or
indirectly, of the wholesale electricity spot market.

xxxx
7.

SEC.
31. Retail
Access. x x x

Competition

and

Open

Upon the initial implementation of open access, the

ERC shall allow all electricity end-users with a
monthly average peak demand of at least one
megawatt (1MW) for the preceding twelve (12)
months
to
be
the
contestable
market. xxx Subsequently
and
every
year
thereafter, the ERC shall evaluate the performance
of the market. x x x
8.

SEC. 32. NPC Stranded Debt and Contract Cost

Recovery. x x x
The ERC shall verify the reasonable amounts and
determine the manner and duration for the full
recovery of stranded debt and stranded contract
costs as defined herein x x x x

9.

SEC. 34. Universal Charge. Within one (1) year

from the effectivity of this Act, a universal charge to
be determined, fixed and approved by the ERC, shall
be imposed on all electricity end-users x x x x

10. SEC. 35. Royalties, Returns and Tax Rates for

Indigenous Energy Resources. x x x
To ensure lower rates for end-users, the ERC shall
forthwith reduce the rates of power from all
indigenous sources of energy.
11. SEC.
36. Unbundling
Functions. x x x

of

Rates

and

each distribution utility shall file its revised rates for

the approval by the ERC. x x x x

12. SEC.
40. Enhancement
of
Technical
Competence. The ERC shall establish rigorous
training programs for its staff for the purpose of
enhancing the technical competence of the ERC in
the following areas: evaluation of technical
performance and monitoring of compliance with
service and performance standards, performancebased rate-setting reform, environmental standards
and such other areas as will enable the ERC to
adequately perform its duties and functions.
13. SEC. 41. Promotion of Consumer Interests. The
ERC shall handle consumer complaints and ensure
the adequate promotion of consumer interests.
14. SEC. 45. Cross Ownership, Market Power Abuse
and Anti-Competitive Behavior. No participant in
the electricity industry may engage in any anticompetitive behavior including, but not limited to,
cross-subsidization, price or market manipulation, or
other unfair trade practices detrimental to the
encouragement and protection of contestable
markets.
xxxx
(c) x x x The ERC shall, within one (1) year from
the effectivity of this Act, promulgate rules and
regulations to promote competition, encourage
market development and customer choice and
discourage/penalize abuse of market power,
cartelization
and
any
anticompetitive
or
discriminatory behavior, in order to further the
intent of this Act and protect the public interest.
Such rules and regulations shall define the
following:
(a) the relevant markets for purposes of establishing
abuse or misuse of monopoly or market position;

(b) areas of isolated grids; and

(c) the periodic reportorial requirements of electric
power industry participants as may be necessary to
enforce the provisions of this Section.
The ERC shall, motu proprio, monitor and penalize
any market power abuse or anticompetitive or
discriminatory act or behavior by any participant in
the electric power industry.
15. SEC. 51. Powers. The PSALM Corp. shall, in the
performance of its functions and for the attainment
of its objective, have the following powers: x x x
(e) To liquidate the NPC stranded contract costs
utilizing proceeds from sales and other property
contributed to it, including the proceeds from the
universal charge;
xxxx
16. SEC.
60. Debts
of
Electric
Cooperatives. x x x The ERC
shall
ensure
a
reduction in the rates of electric cooperatives
commensurate with the resulting savings due to the
removal of the amortization payments of their loans.
xxxx
17. SEC.
62. Joint
Commission. x x x

Congressional

Power

x x x the Power Commission is hereby empowered

to require the DOE, ERC, NEA, TRANSCO,
generation
companies,
distribution
utilities,
suppliers and other electric power industry
participants to submit reports and all pertinent data
and information relating to the performance of their
respective functions in the industry. xxx

xxxx
18. SEC. 65. Environmental Protection. Participants
in the generation, distribution and transmission subsectors of the industry shall comply with all
environmental
laws,
rules,
regulations
and
standards promulgated by the Department of
Environment and Natural Resources including, in
appropriate cases, the establishment of an
environmental guarantee fund.

19. SEC.
67. NPC
Offer
of
Transition
Supply
Contracts. Within
six
(6)
months
from
theeffectivity of this Act, NPC shall file with the ERC
for its approval a transition supply contract duly
negotiated with the distribution utilities containing
the terms and conditions of supply and a
corresponding schedule of rates, consistent with the
provisions hereof, including adjustments and/or
indexation formulas which shall apply to the term of
such contracts.
xxxx
20. SEC. 69. Renegotiation of Power Purchase and
Energy
Conversion
Agreements
between
Government Entities. Within three (3) months
from the effectivity of this Act, all power purchase
and energy conversion agreements between the
PNOC-Energy Development Corporation (PNOCEDC) and NPC, including but not limited to
the Palimpinon, Tongonan and Mt. Apo Geothermal
complexes, shall be reviewed by the ERC and the
terms thereof amended to remove any hidden costs
or extraordinary mark-ups in the cost of power or
steam above their true costs. All amended contracts
shall be submitted to the Joint Congressional Power
Commission for approval. The ERC shall ensure that

all savings realized from the reduction of said markups shall be passed on to all end-users.

After comparing the functions of the ERB and the ERC, we find
that the ERC indeed assumed the functions of the ERB. However,
the overlap in the functions of the ERB and of the ERC does not
mean

that

there

is

no

valid

abolition

of

the

ERB. The

ERC has new and expanded functions which are intended to

meet

the

specific

needs

of

deregulated

power

industry. Indeed, National Land Titles and Deeds Registration

Administration v. Civil Service Commission stated that:
[I]f the newly created office has substantially new,
different or additional functions, duties or powers, so that
it may be said in fact to create an office different from
the one abolished, even though it embraces all or some
of the duties of the old office it will be considered as an
abolition of one office and the creation of a new or
different one. The same is true if one office is abolished
and its duties, for reasons of economy are given to an
existing officer or office.[13]

KERB argues that RA 9136 did not abolish the ERB nor did it alter
its essential character as an economic regulator of the electric
power industry. x x x RA 9136 rather changed merely ERBs name
and title to that of the ERC even as it expanded its functions and
objectives

to

keep

uphold KERBs argument

pace
regarding

with
the

the

times. To

invalidity

of

the ERBs abolition is to ignore the developments in the history of

energy regulation.
The regulation of public services started way back in
1902 with the enactment of Act No. 520 which created
the Coastwise Rate Commission. In 1906, Act No. 1507
was passed creating the Supervising Railway Expert. The
following year, Act No. 1779 was enacted creating the
Board of Rate Regulation. Then, Act No 2307, which was
patterned after the Public Service Law of the State of
New Jersey, was approved by the Philippine Commission
in 1914, creating the Board of Public Utility
Commissioners, composed of three members, which
absorbed all the functions of the Coastwise Rate
Commission, the Supervising Railway Expert, and the
Board of Rate Regulation.
Thereafter, several laws were enacted on public utility
regulation. On November 7, 1936, Commonwealth Act
No. 146, otherwise known as the Public Service Law, was
enacted by the National Assembly. The Public Service
Commission (PSC) had jurisdiction, supervision, and
control over all public services, including the electric
power service.
After almost four decades, significant developments in
the energy sector changed the landscape of economic
regulation in the country.
April 30, 1971 R.A. No. 6173 was passed
creating the Oil Industry Commission (OIC), which
was tasked to regulate the oil industry and to ensure
the adequate supply of petroleum products at
reasonable prices.
September 24, 1972 then President Ferdinand
E. Marcos issued Presidential Decree No. 1 which
ordered the preparation of the Integrated
Reorganization Plan by the Commission on

Reorganization. The Plan abolished the PSC and

transferred
the
regulatory
and
adjudicatory
functions pertaining to the electricity industry and
water resources to then Board of Power and
Waterworks (BOPW).
October 6, 1977 the government created the
Department of Energy (DOE) and consequently
abolished the OIC, which was replaced by the
creation of the Board of Energy (BOE) through
Presidential Decree No. 1206. The BOE, in addition,
assumed the powers and functions of the BOPW
over the electric power industry.
May 8, 1987 the BOE was reconstituted into the
Energy Regulatory Board (ERB), pursuant to
Executive Order No. 172 issued by then President
Corazon C. Aquino as part of her governments
reorganization program. The rationale was to
consolidate and entrust into a single body all the
regulatory and adjudicatory functions pertaining to
the energy sector. Thus, the power to regulate the
power rates and services of private electric utilities
was transferred to the ERB.
December 28, 1992 Republic Act No. 7638
signed, where the power to fix the rates of the
National Power Corporation (NPC) and the rural
electric cooperatives (RECs) was passed on to the
ERB. Non-pricing functions of the ERB with respect
to the petroleum industry were transferred to the
DOE, i.e., regulating the capacities of new refineries.
February 10, 1998 enactment of Republic Act
8479: Downstream Oil Industry Deregulation Act of
1998, which prescribed a five-month transition
period, before full deregulation of the oil industry,
during which ERB would implement an automatic
pricing mechanism (APM) for petroleum products
every month.

June 12, 1998 the Philippine oil industry was

fully deregulated, thus, ERBs focus of responsibility
centered on the electric industry.
June 8, 2001 enactment of Republic Act No.
9136, otherwise known as the Electric Power
Industry Reform Act (EPIRA) of 2001. The Act
abolished the ERB and created in its place the
Energy Regulatory Commission (ERC) which is a
purely independent regulatory body performing the
combined
quasi-judicial,
quasi-legislative
and
[14]
administrative functions in the electric industry.

Throughout the years, the scope of the regulation has gradually

narrowed from that of public services in 1902 to the electricity
industry and water resources in 1972 to the electric power
industry and oil industry in 1977 to the electric industry alone in
1998. The ERC retains the ERBs traditional rate and service
regulation functions. However, the ERC now also has to promote
competitive

operations

in

the

electricity

market. RA

9136

expanded the ERCs concerns to encompass both the consumers

and the utility investors.
Thus, the EPIRA provides a framework for the
restructuring of the industry, including the privatization of
the assets of the National Power Corporation (NPC), the
transition to a competitive structure, and the delineation
of the roles of various government agencies and the
private entities. The law ordains the division of the
industry into four (4) distinct sectors, namely:
generation,
transmission,
distribution
and
supply. Corollarily, the NPC generating plants have
to privatized and its transmission business spun off and
privatized thereafter.

In tandem with the restructuring of the industry is the

establishment of a strong and purely independent
regulatory body. Thus, the law created the ERC in place
of the Energy Regulatory Board (ERB).
To achieve its aforestated goal, the law has reconfigured
the organization of the regulatory body. x xx[15]

There is no question in our minds that, because of the expansion

of the ERCs functions and concerns, there was a valid abolition of
the ERB. Thus, there is no merit to KERBs allegation that there is
an impairment of the security of tenure of the ERBs employees.
WHEREFORE, we DISMISS the petition. No costs.
SO ORDERED.

Republic of the Philippines

Supreme Court
Baguio City

EN BANC
ATTY.
SYLVIA
BANDA,
CONSORICIA O. PENSON,
RADITO V. PADRIGANO,
JEAN R. DE MESA, LEAH P.
DELA
CRUZ,
ANDY
V.
MACASAQUIT, SENEN B.
CORDOBA,
ALBERT
BRILLANTES,
GLORIA
BISDA,
JOVITA
V.
CONCEPCION, TERESITA G.
CARVAJAL, ROSANNA T.
MALIWANAG,
RICHARD
ODERON,
CECILIA
ESTERNON,
BENEDICTO
CABRAL, MA. VICTORIA E.
LAROCO, CESAR ANDRA,
FELICISIMO
GALACIO,
ELSA R. CALMA, FILOMENA
A. GALANG, JEAN PAUL
MELEGRITO,
CLARO
G.
SANTIAGO, JR., EDUARDO
FRIAS,
REYNALDO
O.
ANDAL,
NEPHTALIE
IMPERIO, RUEL BALAGTAS,
VICTOR
R.
ORTIZ,
FRANCISCO P. REYES, JR.,
ELISEO M. BALAGOT, JR.,
JOSE C. MONSALVE, JR.,
ARTURO
ADSUARA,
F.C.
LADRERO,
JR.,
NELSON
PADUA,
MARCELA
C.
SAYAO,
ANGELITO
MALAKAS,
GLORIA
RAMENTO,
JULIANA
SUPLEO,
MANUEL

G.R. No. 166620

Present:

MENDRIQUE, E. TAYLAN,
CARMELA BOBIS, DANILO
VARGAS,
ROY-LEO
C.
PABLO,
ALLAN
VILLANUEVA, VICENTE R.
VELASCO,
JR.,
IMELDA
ERENO,
FLORIZA
M.
CATIIS, RANIEL R. BASCO,
E. JALIJALI, MARIO C.
CARAAN,
DOLORES
M.
AVIADO,
MICHAEL
P.
LAPLANA, GUILLERMO G.
SORIANO, ALICE E. SOJO,
ARTHUR
G.
NARNE,
LETICIA
SORIANO,
FEDERICO
RAMOS,
JR.,
PETERSON
CAAMPUED,
RODELIO
L.
GOMEZ,
ANTONIO D. GARCIA, JR.,
ANTONIO
GALO,
A.
SANCHEZ, SOL E. TAMAYO,
JOSEPHINE A.M. COCJIN,
DAMIAN
QUINTO,
JR.,
EDLYN
MARIANO,
M.A.
MALANUM,
ALFREDO
S.
ESTRELLA, and JESUS MEL
SAYO,
Petitioners,
- versus EDUARDO R. ERMITA, in his
capacity
as
Executive
Secretary,THE
DIRECTOR
GENERAL
OF
THE
PHILIPPINE INFORMATION

PUNO, C.J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,*
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.

Promulgated:

April 20, 2010

AGENCY and THE

NATIONAL TREASURER,
Respondents.

x-------------------------------------------------x

DECISION
LEONARDO-DE CASTRO, J.:

The present controversy arose from a Petition for Certiorari and

prohibition challenging the constitutionality of Executive Order
No. 378 dated October 25, 2004, issued by President Gloria
Macapagal Arroyo (President Arroyo). Petitioners characterize
their action as a class suit filed on their own behalf and on behalf
of all their co-employees at the National Printing Office (NPO).
The NPO was formed on July 25, 1987, during the term of
former President Corazon C. Aquino (President Aquino), by virtue

of Executive Order No. 285[1] which provided, among others, the

creation of the NPO from the merger of the Government Printing
Office and the relevant printing units of the Philippine Information
Agency (PIA). Section 6 of Executive Order No. 285 reads:
SECTION 6. Creation of the National Printing
Office. There is hereby created a National Printing Office
out of the merger of the Government Printing Office and
the relevant printing units of the Philippine Information
Agency. The Office shall have exclusive printing
jurisdiction over the following:
a. Printing, binding and distribution of all standard
and accountable forms of national, provincial, city and
municipal
governments,
including
government
corporations;
b.

Printing of officials ballots;

c.
Printing of public documents such as the
Official Gazette, General Appropriations Act, Philippine
Reports, and development information materials of the
Philippine Information Agency.
The Office may also accept other government
printing jobs, including government publications, aside
from those enumerated above, but not in an exclusive
basis.
The details of the organization, powers, functions,
authorities, and related management aspects of the
Office shall be provided in the implementing details
which shall be prepared and promulgated in accordance
with Section II of this Executive Order.

The Office shall be attached to the Philippine

Information Agency.

On October 25, 2004, President Arroyo issued the herein

assailed Executive Order No. 378, amending Section 6 of
Executive Order No. 285 by, inter alia, removing the exclusive
jurisdiction of the NPO over the printing services requirements of
government

agencies

and

instrumentalities. The

pertinent

portions of Executive Order No. 378, in turn, provide:

SECTION 1. The NPO shall continue to provide
printing services to government agencies and
instrumentalities as mandated by law. However, it
shall no longer enjoy exclusive jurisdiction over
the
printing
services
requirements
of
the
government over
standard
and
accountable
forms.It shall have to compete with the private
sector, except in the printing of election
paraphernaliawhich could be shared with the Bangko
Sentral ng Pilipinas, upon the discretion of the
Commission on Elections consistent with the provisions
of the Election Code of 1987.
SECTION
2. Government
agencies/instrumentalities may source printing services
outside NPO provided that:
2.1 The printing services to be provided by the
private sector is superior in quality and at a lower cost
than what is offered by the NPO; and
2.2 The private printing provider is flexible in terms
of meeting the target completion time of the government
agency.

SECTION 3. In the exercise of its functions,

the amount to be appropriated for the programs,
projects and activities of the NPO in the General
Appropriations Act (GAA) shall be limited to its
income without additional financial support from
the
government. (Emphases
and
underscoring
supplied.)

Pursuant to Executive Order No. 378, government agencies

and instrumentalities are allowed to source their printing services
from the private sector through competitive bidding, subject to
the condition that the services offered by the private supplier be
of superior quality and lower in cost compared to what was
offered by the NPO. Executive Order No. 378 also limited NPOs
appropriation in the General Appropriations Act to its income.
Perceiving Executive Order No. 378 as a threat to their
security of tenure as employees of the NPO, petitioners now
challenge its constitutionality, contending that: (1) it is beyond
the executive powers of President Arroyo to amend or repeal
Executive Order No. 285 issued by former President Aquino when
the latter still exercised legislative powers; and (2) Executive
Order No. 378 violates petitioners security of tenure, because it
paves the way for the gradual abolition of the NPO.
We dismiss the petition.
Before proceeding to resolve the substantive issues, the
Court must first delve into a procedural matter. Since petitioners
instituted this case as a class suit, the Court, thus, must first

determine if the petition indeed qualifies as one. In Board of

Optometry v. Colet,[2] we held that [c]ourts must exercise utmost
caution before allowing a class suit, which is the exception to the
requirement of joinder of all indispensable parties. For while no
difficulty may arise if the decision secured is favorable to the
plaintiffs, a quandary would result if the decision were otherwise
as those who were deemed impleaded by their self-appointed
representatives would certainly claim denial of due process.
Section 12, Rule 3 of the Rules of Court defines a class suit,
as follows:
Sec. 12. Class suit. When the subject matter of the
controversy is one of common or general interest to
many persons so numerous that it is impracticable to join
all as parties, a number of them which the court finds to
be sufficiently numerous and representative as to fully
protect the interests of all concerned may sue or defend
for the benefit of all. Any party in interest shall have the
right to intervene to protect his individual interest.

From the foregoing definition, the requisites of a class suit

are: 1) the subject matter of controversy is one of common or
general interest to many persons; 2) the parties affected are so
numerous that it is impracticable to bring them all to court; and
3) the parties bringing the class suit are sufficiently numerous or
representative of the class and can fully protect the interests of
all concerned.

In Mathay

v.

The

Consolidated

Bank

and

Trust

Company,[3] the Court held that:

An action does not become a class suit merely because it
is designated as such in the pleadings. Whether the suit
is or is not a class suit depends upon the attending facts,
and the complaint, or other pleading initiating the
class action should allege the existence of the
necessary facts, to wit, the existence of a subject matter
of common interest, and the existence of a class and the
number of persons in the alleged class, in order that
the court might be enabled to determine whether
the members of the class are so numerous as to
make it impracticable to bring them all before the
court, to contrast the number appearing on the
record with the number in the class and to
determine whether claimants on record adequately
represent the class and the subject matter of
general or common interest. (Emphases ours.)

Here, the petition failed to state the number of NPO

employees who would be affected by the assailed Executive
Order and who were allegedly represented by petitioners. It was
the Solicitor General, as counsel for respondents, who pointed
out that there were about 549 employees in the NPO.[4] The 67
petitioners undeniably comprised a small fraction of the NPO
employees whom they claimed to represent. Subsequently, 32 of
the original petitioners executed an Affidavit of Desistance, while
one signed a letter denying ever signing the petition,[5] ostensibly
reducing the number of petitioners to 34. We note that counsel
for the petitioners challenged the validity of the desistance or
withdrawal of some of the petitioners and insinuated that such

desistance was due to pressure from people close to the seat of

power.[6] Still, even if we were to disregard the affidavit of
desistance filed by some of the petitioners, it is highly doubtful
that a sufficient, representative number of NPO employees have
instituted this purported class suit. A perusal of the petition itself
would

show

that

of

Verification/Certification

the
of

67

petitioners

Non-Forum

who

signed

Shopping,

only

the
20

petitioners were in fact mentioned in the jurat as having duly

subscribed the petition before the notary public. In other words,
only 20 petitioners effectively instituted the present case.
Indeed, in MVRS Publications, Inc. v. Islamic Dawah Council
of the Philippines, Inc.,[7] we observed that an element of a class
suit

or

representative

representation. In

suit

determining

is
the

the adequacy
question

of

fair

of
and

adequate representation of members of a class, the court must

consider (a) whether the interest of the named party is
coextensive with the interest of the other members of the class;
(b) the proportion of those made a party, as it so bears, to the
total membership of the class; and (c) any other factor bearing
on the ability of the named party to speak for the rest of the
class.
Previously,

we

held

in Ibaes

v.

Roman

Catholic

Church[8] that where the interests of the plaintiffs and the other
members of the class they seek to represent are diametrically
opposed, the class suit will not prosper.

It

is

worth

mentioning

that

Manifestation

of

Desistance,[9] to which the previously mentioned Affidavit of

Desistance[10] was attached, was filed by the President of the
National Printing Office Workers Association (NAPOWA). The said
manifestation expressed NAPOWAs opposition to the filing of the
instant petition in any court. Even if we take into account the
contention of petitioners counsel that the NAPOWA President had
no legal standing to file such manifestation, the said pleading is a
clear indication that there is a divergence of opinions and views
among the members of the class sought to be represented, and
not all are in favor of filing the present suit. There is here an
apparent conflict between petitioners interests and those of the
persons whom they claim to represent.Since it cannot be said
that petitioners sufficiently represent the interests of the entire
class, the instant case cannot be properly treated as a class suit.
As to the merits of the case, the petition raises two main
grounds to assail the constitutionality of Executive Order No.
378:
First, it is contended that President Arroyo cannot amend or
repeal Executive Order No. 285 by the mere issuance of another
executive order (Executive Order No. 378). Petitioners maintain
that former President Aquinos Executive Order No. 285 is a
legislative enactment, as the same was issued while President
Aquino

still

had

legislative

powers

under

the

Freedom

Constitution;[11] thus, only Congress through legislation can

validly amend Executive Order No. 285.

Second, petitioners maintain that the issuance of Executive

Order No. 378 would lead to the eventual abolition of the NPO
and would violate the security of tenure of NPO employees.
Anent the first ground raised in the petition, we find the
same patently without merit.
It is a well-settled principle in jurisprudence that the
President has the power to reorganize the offices and agencies in
the

executive

department

in

line

with

the

Presidents

constitutionally granted power of control over executive offices

and by virtue of previous delegation of the legislative power to
reorganize executive offices under existing statutes.
In Buklod ng Kawaning EIIB v. Zamora,[12] the Court pointed
out that Executive Order No. 292 or the Administrative Code of
1987 gives the President continuing authority to reorganize and
redefine the functions of the Office of the President. Section 31,
Chapter 10, Title III, Book III of the said Code, is explicit:
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
President Special Assistants/Advisers System
and the Common Staff Support System, by
abolishing, consolidating or merging
units thereof or transferring functions
from one unit to another;
(2) Transfer any function under the
Office of the President to any other
Department or Agency as well as transfer
functions
to
the
Office
of
the
Presidentfrom
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
Presidentfrom
other
Departments
or
agencies. (Emphases ours.)

Interpreting the foregoing provision, we held in Buklod ng

Kawaning EIIB, thus:
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 [323 SCRA 312 (2000)], we ruled that
reorganization involves the reduction of personnel,
consolidation of offices, or abolition thereof by
reason of economy or redundancy of functions. It
takes place when there is an alteration of the
existing structure of government offices or units
therein, including the lines of control, authority
and responsibility between them. The EIIB is a
bureau attached to the Department of Finance. It falls
under the Office of the President. Hence, it is subject to
the
Presidents
continuing
authority
to
[13]
reorganize.
(Emphasis ours.)

It is undisputed that the NPO, as an agency that is part of

the Office of the Press Secretary (which in various times has been
an agency directly attached to the Office of the Press Secretary or
as an agency under the Philippine Information Agency), is part of
the Office of the President.[14]
Pertinent to the case at bar, Section 31 of the Administrative
Code of 1987 quoted above authorizes the President (a)
to restructure the internal organization of the Office of the
President Proper, including the immediate Offices, the President
Special

Assistants/Advisers System and the Common Staff

Support System, by abolishing, consolidating or merging units

thereof or transferring functions from one unit to another, and (b)
to transfer functions or offices from the Office of the President to
any other Department or Agency in the Executive Branch, and
vice versa.

Concomitant to such power to abolish, merge or consolidate

offices in the Office of the President Proper and to transfer
functions/offices not only among the offices in the Office of
President Proper but also the rest of the Office of the President
and the Executive Branch, the President implicitly has the power
to effect less radical or less substantive changes to the functional
and internal structure of the Office of the President, including the
modification of functions of such executive agencies as the
exigencies of the service may require.
In the case at bar, there was neither an abolition of the NPO
nor a removal of any of its functions to be transferred to another
agency. Under the assailed Executive Order No. 378, the NPO
remains the main printing arm of the government for all kinds of
government forms and publications but in the interest of greater
economy and encouraging efficiency and profitability, it must now
compete with the private sector for certain government printing
jobs, with the exception of election paraphernalia which remains
the exclusive responsibility of the NPO, together with the Bangko
Sentral ng Pilipinas, as the Commission on Elections may
determine. At most, there was a mere alteration of the main
function of the NPO by limiting the exclusivity of its printing
responsibility to election forms.[15]
There is a view that the reorganization actions that the
President may take with respect to agencies in the Office of the
President are strictly limited to transfer of functions and offices as

seemingly provided in Section 31 of the Administrative Code of

1987.
However, Section 20, Chapter 7, Title I, Book III of the
same Code significantly provides:
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.)

Pursuant to Section 20, the power of the President to

reorganize the Executive Branch under Section 31 includes such
powers and functions that may be provided for under other
laws. To be sure, an inclusive and broad interpretation of the
Presidents power to reorganize executive offices has been
consistently

supported

by

specific

provisions

in general

appropriations laws.
In

the

oft-cited Larin

v.

Executive

Secretary,[16] the

Court likewise adverted to certain provisions of Republic Act No.

7645, the general appropriations law for 1993, as among the
statutory bases for the Presidents power to reorganize executive
agencies, to wit:
Section 48 of R.A. 7645 provides that:
Sec. 48. Scaling Down and Phase Out of
Activities of Agencies Within the Executive

Branch. The heads of departments, bureaus

and offices and agencies are hereby directed to
identify their respective activities which are no
longer essential in the delivery of public
services and which may be scaled down,
phased out or abolished, subject to civil
[service] rules and regulations. x x x. Actual
scaling down, phasing out or abolition of the
activities shall be effected pursuant to Circulars
or Orders issued for the purpose by the Office
of the President.
Said provision clearly mentions the acts of "scaling
down, phasing out and abolition" of offices only
and does not cover the creation of offices or
transfer of functions. Nevertheless, the act of
creating and decentralizing is included in the
subsequent provision of Section 62, which provides
that:
Sec. 62. Unauthorized organizational
changes. Unless otherwise created by law or
directed by the President of the Philippines, no
organizational unit or changes in key positions
in any department or agency shall be
authorized in their respective organization
structures and be funded from appropriations
by this Act.
The foregoing provision evidently shows that the
President
is
authorized
to
effect
organizationalchanges including the creation of offices
in the department or agency concerned.
The contention of petitioner that the two provisions are
riders deserves scant consideration. Well settled is the
rule that every law has in its favor the presumption of
constitutionality. Unless and until a specific provision of
the law is declared invalid and unconstitutional, the same
is
valid
and
binding
for
all
intents
and
[17]
purposes.
(Emphases ours)

Buklod ng Kawaning EIIB v. Zamora,[18] where the Court

upheld as valid then President Joseph Estradas Executive Order
No. 191 deactivating the Economic Intelligence and Investigation
Bureau (EIIB) of the Department of Finance, hewed closely to the
reasoning in Larin. The Court, among others, also traced from the
General Appropriations Act[19] the Presidents authority to effect
organizational changes in the department or agency under the
executive structure, thus:
We adhere to the precedent or ruling in Larin that this
provision recognizes the authority of the President to
effect organizational changes in the department or agency
under the executive structure. Such a ruling further finds
support in Section 78 of Republic Act No. 8760. Under this
law, the heads of departments, bureaus, offices and
agencies and other entities in the Executive Branch are
directed (a) to conduct a comprehensive review of their
respective mandates, missions, objectives, functions,
programs,
projects,
activities
and
systems
and
procedures; (b) identify activities which are no longer
essential in the delivery of public services and which may
be scaled down, phased-out or abolished; and (c) adopt
measures that will result in the streamlined
organization and improved overall performance of
their respective agencies. Section 78 ends up with the
mandate that the actual streamlining and productivity
improvement in agency organization and operation shall
be effected pursuant to Circulars or Orders issued for the
purpose by the Office of the President. x x x.[20] (Emphasis
ours)

Notably,

in

the

present

case,

the

2003

General

Appropriations Act, which was reenacted in 2004 (the year of the

issuance of Executive Order No. 378), likewise gave the President

the authority to effect a wide variety of organizational changes in

any department or agency in the Executive Branch. Sections 77
and 78 of said Act provides:
Section 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.
Section 78.
Institutional Strengthening and
Productivity Improvement in Agency Organization and
Operations
and
Implementation
of
Organization/Reorganization Mandated by Law. The
Government shall adopt institutional strengthening
and productivity improvement measures to improve
service delivery and enhance productivity in the
government, as directed
by
the
President of
the Philippines. The heads of departments, bureaus,
offices, agencies, and other entities of the Executive
Branch shall accordingly conduct a comprehensive
review of their respective mandates, missions,
objectives, functions, programs, projects, activities and
systems and procedures;
identify areas
where
improvements
are
necessary;
and implement
corresponding
structural,
functional
and
operational adjustments that will result in
streamlined organization and operations and
improved performance and productivity: PROVIDED,
That actual streamlining and productivity improvements
in agency organization and operations, as authorized by
the President of the Philippines for the purpose, including
the utilization of savings generated from such activities,
shall be in accordance with the rules and regulations to
be issued by the DBM, upon consultation with the
Presidential Committee on Effective Governance:
PROVIDED, FURTHER, That in the implementation of

organizations/reorganizations, or specific changes

in agency structure, functions and operations as a
result of institutional strengthening or as
mandated by law, the appropriation, including the
functions, projects, purposes and activities of
agencies concerned may be realigned as may be
necessary: PROVIDED, FINALLY, That any unexpended
balances or savings in appropriations may be made
available for payment of retirement gratuities and
separation benefits to affected personnel, as authorized
under existing laws. (Emphases and underscoring ours.)

Implicitly, the aforequoted provisions in the appropriations

law recognize the power of the President to reorganize even
executive offices already funded by the said appropriations act,
including the power to implement structural, functional, and
operational adjustments in the executive bureaucracy and, in
so doing, modify or realign appropriations of funds as may be
necessary under such reorganization. Thus, insofar as petitioners
protest the limitation of the NPOs appropriations to its own
income under Executive Order No. 378, the same is statutorily
authorized by the above provisions.
In

the

2003

case

of Bagaoisan

v.

National

Tobacco

Administration,[21] we upheld the streamlining of the National

Tobacco Administration through a reduction of its personnel and
deemed the same as included in the power of the President to
reorganize

executive

offices

granted

under

the

laws,

notwithstanding that such streamlining neither involved an

abolition nor a transfer of functions of an office. To quote the
relevant portion of that decision:

In the recent case of Rosa Ligaya C. Domingo, et al. vs.

Hon. Ronaldo D. Zamora, in his capacity as the Executive
Secretary, et al., this Court has had occasion to also
delve on the Presidents power to reorganize the Office of
the President under Section 31(2) and (3) of Executive
Order No. 292 and the power to reorganize the Office of
the President Proper. x x x
xxxx
The first sentence of the law is an express grant to the
President of a continuing authority to reorganize the
administrative
structure
of
the
Office
of
the
President. The succeeding numbered paragraphs
are not in the nature of provisos that unduly limit
the aim and scope of the grant to the President of
the power to reorganize but are to be viewed in
consonance therewith. Section 31(1) of Executive
Order No. 292 specifically refers to the Presidents power
to restructure the internal organization of the Office of
the President Proper, by abolishing, consolidating or
merging units hereof or transferring functions from one
unit to another, while Section 31(2) and (3) concern
executive
offices
outside
the
Office
of
the
President Proper allowing the President to transfer any
function under the Office of the President to any other
Department or Agency and vice-versa, and the transfer of
any agency under the Office of the President to any other
department or agency and vice-versa.
In the present instance, involving neither an
abolition nor transfer of offices, the assailed action
is a mere reorganization under the general
provisions
of
the
law
consisting
mainly
ofstreamlining the NTA in the interest of simplicity,
economy and efficiency. It is an act well within the
authority of the President motivated and carried out,
according to the findings of the appellate court, in good
faith, a factual assessment that this Court could only but
accept.[22] (Emphases and underscoring supplied.)

In the more recent case of Tondo Medical Center Employees

Association v. Court of Appeals,[23] which involved a structural
and functional reorganization of the Department of Health
under an executive order, we reiterated the principle that the
power of the President to reorganize agencies under the
executive department by executive or administrative order is
constitutionally and statutorily recognized. We held in that case:
This Court has already ruled in a number of
cases that the President may, by executive or
administrative order, direct the reorganization of
government
entities
under
the
Executive
Department.
This is also sanctioned under the
Constitution, as well as other statutes.
Section 17,
Article
VII
of
the
1987
Constitution, clearly states:
[T]he president shall
havecontrol of all executive departments, bureaus
and offices. Section 31, Book III, Chapter 10 of
Executive Order No. 292, also known as the
Administrative Code of 1987 reads:
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:
xxxx

In Domingo v. Zamora [445 Phil. 7 (2003)], this

Court explained the rationale behind the Presidents
continuing authority under the Administrative Code to
reorganize the administrative structure of the Office of
the President. The law grants the President the
power to reorganize the Office of the President in
recognition of the recurring need of every President
to reorganize his or her office to achieve simplicity,
economy and efficiency. To remain effective and
efficient, it must be capable of being shaped and
reshaped by the President in the manner the Chief
Executive deems fit to carry out presidential directives
and policies.
The Administrative Code provides that the Office of the
President consists of the Office of the President Proper
and the agencies under it. The agencies under the Office
of the President are identified in Section 23, Chapter
8, Title II of the Administrative Code:
Sec. 23. The Agencies under the
Office of the President.The agencies under the
Office of the President refer to those offices
placed under the chairmanship of the
President, those under the supervision and
control of the President, those under the
administrative supervision of the Office of the
President, those attached to it for policy and
program coordination, and those that are not
placed by law or order creating them under
any specific department.
xxxx
The power of the President to reorganize the executive
department
is likewise
recognized
in
general
appropriations laws. x x x.
xxxx

Clearly, Executive Order No. 102 is well within the

constitutional power of the President to issue. The
President
did
not
usurp
any
legislative
prerogative in issuing Executive Order No. 102. It is
an exercise of the Presidents constitutional power
of
control
over
the
executive
department,
supported by the provisions of the Administrative
Code,
recognized
by
other
statutes,
and
[24]
consistently affirmed by this Court.
(Emphases
supplied.)

Subsequently, we ruled in Anak Mindanao Party-List Group v.

Executive Secretary[25] that:
The Constitutions express grant of the power of control in
the President justifies an executive action to carry out
reorganization measures under a broad authority of law.
In enacting a statute, the legislature is presumed
to have deliberated with full knowledge of all existing
laws and jurisprudence on the subject. It is thus
reasonable to conclude that in passing a statute which
places an agency under the Office of the President, it was
in accordance with existing laws and jurisprudence on the
Presidents power to reorganize.
In establishing an executive department, bureau or
office, the legislature necessarily ordains an executive
agencys position in the scheme of administrative
structure. Such determination is primary, but subject to
the Presidents continuing authority to reorganize the
administrative structure. As far as bureaus, agencies or
offices in the executive department are concerned, the
power of control may justify the President to deactivate
the functions of a particular office. Or a law may
expressly grant the President the broad authority to carry

out reorganization measures. The Administrative Code of

1987 is one such law.[26]

The issuance of Executive Order No. 378 by President

Arroyo is an exercise of a delegated legislative power granted by
the aforementioned Section 31, Chapter 10, Title III, Book III of
the Administrative Code of 1987, which provides for the
continuing authority of the President to reorganize the Office of
the President, in order to achieve simplicity, economy and
efficiency. This

is

matter

already

well-entrenched

in

jurisprudence. The reorganization of such an office through

executive or administrative order is also recognized in the
Administrative Code of 1987. Sections 2 and 3, Chapter 2, Title I,
Book III of the said Code provide:
Sec.
2.
Executive
Orders.
- Acts
of
the
President providing for rules of a general or permanent
character in
implementation
or
execution
of
constitutional
or
statutory
powers shall
be
promulgated in executive orders.
Sec. 3. Administrative Orders.
- Acts of the
President which relate to particular aspects of
governmental operations in pursuance of his duties as
administrative
head shall
be
promulgated
inadministrative orders. (Emphases supplied.)

To reiterate, we find nothing objectionable in the provision

in Executive Order No. 378 limiting the appropriation of the NPO

to its own income. Beginning with Larin and in subsequent cases,

the

Court

has

noted

certain

provisions

in

the general

appropriations laws as likewise reflecting the power of the

President to reorganize executive offices or agencies even to the
extent of modifying and realigning appropriations for that
purpose.
Petitioners contention that the issuance of Executive Order
No. 378 is an invalid exercise of legislative power on the part of
the President has no legal leg to stand on.
In all, Executive Order No. 378, which purports to institute
necessary reforms in government in order to improve and
upgrade efficiency in the delivery of public services by redefining
the functions of the NPO and limiting its funding to its own
income and to transform it into a self-reliant agency able to
compete with the private sector, is well within the prerogative of
President Arroyo under her continuing delegated legislative power
to reorganize her own office. As pointed out in the separate
concurring opinion of our learned colleague, Associate Justice
Antonio T. Carpio, the objective behind Executive Order No. 378
is wholly consistent with the state policy contained in Republic
Act No. 9184 or the Government Procurement Reform Act to
encourage competitiveness by extending equal opportunity to
private contracting parties who are eligible and qualified.[27]
To be very clear, this delegated legislative power to
reorganize pertains only to the Office of the President and the

departments, offices and agencies of the executive branch and

does

not

include

the

Judiciary,

the

Legislature

or

the

constitutionally-created or mandated bodies. Moreover, it must

be stressed that the exercise by the President of the power to
reorganize the executive department must be in accordance with
the Constitution, relevant laws and prevailing jurisprudence.
In

this

regard,

we

are

mindful

of

the

previous

pronouncement of this Court in Dario v. Mison[28] that:

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 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 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. (Emphasis
ours.)

Stated alternatively, the presidential power to reorganize

agencies and offices in the executivebranch of government is
subject to the condition that such reorganization is carried out in
good faith.

If the reorganization is done in good faith, the abolition of

positions, which results in loss of security of tenure of affected
government employees, would be valid. In Buklod ng Kawaning
EIIB v.Zamora,[29] we even observed that there was no such
thing as an absolute right to hold office. Except those who hold
constitutional offices, which provide for special immunity as
regards salary and tenure, no one can be said to have any vested
right to an office or salary.[30]
This

brings

us

to

the

second

ground

raised

in

the

petition that Executive Order No. 378, in allowing government

agencies to secure their printing requirements from the private
sector and in limiting the budget of the NPO to its income, will
purportedly lead to the gradual abolition of the NPO and the loss
of security of tenure of its present employees. In other words,
petitioners avow that the reorganization of the NPO under
Executive Order No. 378 is tainted with bad faith. The basic
evidentiary rule is that he who asserts a fact or the affirmative of
an issue has the burden of proving it.[31]
A careful review of the records will show that petitioners
utterly failed to substantiate their claim. They failed to allege,
much less prove, sufficient facts to show that the limitation of the
NPOs budget to its own income would indeed lead to the abolition
of the position, or removal from office, of any employee. Neither
did petitioners present any shred of proof of their assertion that
the changes in the functions of the NPO were for political
considerations that had nothing to do with improving the

efficiency of, or encouraging operational economy in, the said

agency.
In sum, the Court finds that the petition failed to show any
constitutional infirmity or grave abuse of discretion amounting to
lack or excess of jurisdiction in President Arroyos issuance of
Executive Order No. 378.
WHEREFORE, the petition is hereby DISMISSED and the
prayer for a Temporary Restraining Order and/or a Writ of
Preliminary Injunction is hereby DENIED. No costs.
SO ORDERED.

N BANC
LOUIS BAROK C. BIRAOGO,
Petitioner,

G.R. No. 192935

- versus THE PHILIPPINE TRUTH

COMMISSION OF 2010,
Respondent.
x----------------------x
REP. EDCEL C. LAGMAN,
REP. RODOLFO B. ALBANO,
JR.,
REP.
SIMEON
A.
DATUMANONG, and REP.
ORLANDO B. FUA, SR.,
Petitioners,

G.R. No. 193036

Present:
CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,

LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.

- versus -

EXECUTIVE SECRETARY
PAQUITO N. OCHOA, JR.
and DEPARTMENT OF
BUDGET AND
MANAGEMENT SECRETARY
FLORENCIO B. ABAD,
Respondents.

Promulgated:
December 7, 2010

x ------------------------------------------------------------------------------------- x

DECISION
MENDOZA, J.:
When
the
judiciary
mediates
to
allocate
constitutional boundaries, it does not assert any
superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but
only asserts the solemn and sacred obligation assigned
to it by the Constitution to determine conflicting claims
of authority under the Constitution and to establish for
the parties in an actual controversy the rights which
that instrument secures and guarantees to them.

--- Justice Jose P. Laurel[1]

The role of the Constitution cannot be overlooked. It is through
the Constitution that the fundamental powers of government are
established, limited and defined, and by which these powers are
distributed among the several departments.[2] The Constitution is
the basic and paramount law to which all other laws must
conform and to which all persons, including the highest officials of
the land, must defer.[3]Constitutional doctrines must remain
steadfast no matter what may be the tides of time. It cannot be
simply made to sway and accommodate the call of situations and
much more tailor itself to the whims and caprices of government
and the people who run it.[4]
For

consideration

cases[5] both

of

before
which

the

Court

essentially

are

assail

two
the

consolidated
validity

and

constitutionality of Executive Order No. 1, dated July 30, 2010,

entitled Creating the Philippine Truth Commission of 2010.

The first case is G.R. No. 192935, a special civil action for
prohibition instituted by petitioner Louis Biraogo (Biraogo) in his
capacity as a citizen and taxpayer. Biraogo assails Executive
Order No. 1 for being violative of the legislative power of
Congress under Section 1, Article VI of the Constitution[6] as it
usurps the constitutional authority of the legislature to create a
public office and to appropriate funds therefor.[7]

The second case, G.R. No. 193036, is a special civil action

for certiorari and prohibition filed by petitioners Edcel C. Lagman,
Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando B.
Fua, Sr.(petitioners-legislators) as incumbent members of the
House of Representatives.
The genesis of the foregoing cases can be traced to the events
prior to the historic May 2010 elections, when then Senator
Benigno Simeon Aquino III declared his staunch condemnation of
graft and corruption with his slogan, Kung walang corrupt, walang
mahirap. The Filipino people, convinced of his sincerity and of his
ability to carry out this noble objective, catapulted the good
senator to the presidency.
To transform his campaign slogan into reality, President
Aquino found a need for a special body to investigate reported
cases of graft and corruption allegedly committed during the
previous administration.
Thus, at the dawn of his administration, the President on
July 30, 2010, signed Executive Order No. 1 establishing
the Philippine Truth

Commission

of

2010

(Truth

Commission). Pertinent provisions of said executive order read:

EXECUTIVE ORDER NO. 1

CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010

WHEREAS, Article XI, Section 1 of the 1987 Constitution of the
Philippines solemnly enshrines the principle that a public office is a
public trust and mandates that public officers and employees, who are
servants of the people, must at all times be accountable to the latter,

serve them with utmost responsibility, integrity, loyalty and efficiency,

act with patriotism and justice, and lead modest lives;
WHEREAS, corruption is among the most despicable acts of defiance of
this principle and notorious violation of this mandate;
WHEREAS, corruption is an evil and scourge which seriously affects the
political, economic, and social life of a nation; in a very special way it
inflicts untold misfortune and misery on the poor, the marginalized and
underprivileged sector of society;
WHEREAS, corruption in the Philippines has reached very alarming
levels, and undermined the peoples trust and confidence in the
Government and its institutions;
WHEREAS, there is an urgent call for the determination of the truth
regarding certain reports of large scale graft and corruption in the
government and to put a closure to them by the filing of the
appropriate cases against those involved, if warranted, and to deter
others from committing the evil, restore the peoples faith and
confidence in the Government and in their public servants;
WHEREAS, the Presidents battlecry during his campaign for the
Presidency in the last elections kung walang corrupt, walang
mahirap expresses a solemn pledge that if elected, he would end
corruption and the evil it breeds;
WHEREAS, there is a need for a separate body dedicated solely to
investigating and finding out the truth concerning the reported cases of
graft and corruption during the previous administration, and which will
recommend the prosecution of the offenders and secure justice for all;
WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No.
292, otherwise known as the Revised Administrative Code of the
Philippines, gives the President the continuing authority to reorganize
the Office of the President.
NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the
Republic of the Philippines, by virtue of the powers vested in me by
law, do hereby order:
SECTION 1. Creation of a Commission. There is hereby created
the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as
the COMMISSION, which shall primarily seek and find the truth on, and
toward this end, investigate reports of graft and corruption of such
scale and magnitude that shock and offend the moral and ethical
sensibilities of the people, committed by public officers and employees,
their co-principals, accomplices and accessories from the private
sector, if any, during the previous administration; and thereafter

recommend the appropriate action or measure to be taken thereon to

ensure that the full measure of justice shall be served without fear or
favor.
The Commission shall be composed of a Chairman and four (4)
members who will act as an independent collegial body.
SECTION 2. Powers and Functions. The Commission, which shall have
all the powers of an investigative body under Section 37, Chapter 9,
Book I of the Administrative Code of 1987, is primarily tasked to
conduct a thorough fact-finding investigation of reported cases of graft
and corruption referred to in Section 1, involving third level public
officers and higher, their co-principals, accomplices and accessories
from the private sector, if any, during the previous administration and
thereafter submit its finding and recommendations to the President,
Congress and the Ombudsman.
In particular, it shall:
a)
Identify and determine the reported cases of such graft and
corruption which it will investigate;
b)
Collect, receive, review and evaluate evidence related to or
regarding the cases of large scale corruption which it has chosen to
investigate, and to this end require any agency, official or employee of
the Executive Branch, including government-owned or controlled
corporations, to produce documents, books, records and other papers;
c)
Upon proper request or representation, obtain information and
documents from the Senate and the House of Representatives records
of investigations conducted by committees thereof relating to matters
or subjects being investigated by the Commission;
d)
Upon proper request and representation, obtain information
from the courts, including the Sandiganbayan and the Office of the
Court Administrator, information or documents in respect to corruption
cases filed with the Sandiganbayan or the regular courts, as the case
may be;
e)
Invite or subpoena witnesses and take their testimonies and for
that purpose, administer oaths or affirmations as the case may be;
f)
Recommend, in cases where there is a need to utilize any
person as a state witness to ensure that the ends of justice be fully
served, that such person who qualifies as a state witness under the
Revised Rules of Court of the Philippines be admitted for that purpose;
g)
Turn over from time to time, for expeditious prosecution, to the
appropriate prosecutorial authorities, by means of a special
or interim report and recommendation, all evidence on corruption of

public officers and employees and their private sector co-principals,

accomplices or accessories, if any, when in the course of its
investigation the Commission finds that there is reasonable ground to
believe that they are liable for graft and corruption under pertinent
applicable laws;
h)
Call upon any government investigative or prosecutorial agency
such as the Department of Justice or any of the agencies under it, and
the Presidential Anti-Graft Commission, for such assistance and
cooperation as it may require in the discharge of its functions and
duties;
i)
Engage or contract the services of resource persons,
professionals and other personnel determined by it as necessary to
carry out its mandate;
j)
Promulgate its rules and regulations or rules of procedure it
deems necessary to effectively and efficiently carry out the objectives
of this Executive Order and to ensure the orderly conduct of its
investigations, proceedings and hearings, including the presentation of
evidence;
k)
Exercise such other acts incident to or are appropriate and
necessary in connection with the objectives and purposes of this Order.
SECTION 3. Staffing Requirements. x x x.
SECTION 4. Detail of Employees. x x x.
SECTION 5. Engagement of Experts. x x x
SECTION 6. Conduct of Proceedings. x x x.
SECTION 7. Right to Counsel of Witnesses/Resource Persons. x x x.
SECTION 8. Protection of Witnesses/Resource Persons. x x x.
SECTION 9. Refusal to Obey Subpoena, Take Oath or Give
Testimony. Any government official or personnel who, without lawful
excuse, fails to appear upon subpoena issued by the Commission or
who, appearing before the Commission refuses to take oath or
affirmation, give testimony or produce documents for inspection, when
required, shall be subject to administrative disciplinary action. Any
private person who does the same may be dealt with in accordance
with law.
SECTION 10. Duty to Extend Assistance to the Commission. x x x.
SECTION 11. Budget for the Commission. The Office of the President
shall provide the necessary funds for the Commission to ensure that it
can exercise its powers, execute its functions, and perform its duties
and responsibilities as effectively, efficiently, and expeditiously as
possible.
SECTION 12. Office. x x x.

SECTION 13. Furniture/Equipment. x x x.

SECTION 14. Term of the Commission. The Commission
accomplish its mission on or before December 31, 2012.

shall

SECTION 15. Publication of Final Report. x x x.

SECTION 16. Transfer of Records and Facilities of the Commission. x x
x.
SECTION 17. Special Provision Concerning Mandate. If and when in the
judgment of the President there is a need to expand the mandate of
the Commission as defined in Section 1 hereof to include the
investigation of cases and instances of graft and corruption during the
prior administrations, such mandate may be so extended accordingly
by way of a supplemental Executive Order.

SECTION 18. Separability Clause. If any provision of this Order is

declared unconstitutional, the same shall not affect the validity and
effectivity of the other provisions hereof.
SECTION 19.
immediately.

Effectivity. This

Executive

Order

shall

take

effect

DONE in the City of Manila, Philippines, this 30th day of July 2010.
(SGD.) BENIGNO S. AQUINO III
By the President:
(SGD.) PAQUITO N. OCHOA, JR.
Executive Secretary

Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the
Philippine Truth Commission (PTC)is a mere ad hoc body formed
under the Office of the President with the primary task to

investigate reports of graft and corruption committed by thirdlevel

public

officers

and

employees,

their

co-principals,

accomplices and accessories during the previous administration,

and thereafter to submit its finding and recommendations to the
President, Congress and the Ombudsman. Though it has been
described as an independent collegial body, it is essentially an
entity within the Office of the President Proper and subject to his
control. Doubtless, it constitutes a public office, as an ad hoc
body is one.[8]
To accomplish its task, the PTC shall have all the powers of
an investigative body under Section 37, Chapter 9, Book I of the
Administrative Code of 1987. It is not, however, a quasi-judicial
body as it cannot adjudicate, arbitrate, resolve, settle, or render
awards in disputes between contending parties.All it can do is
gather, collect and assess evidence of graft and corruption and
make recommendations.It may have subpoena powers but it has
no power to cite people in contempt, much less order their
arrest. Although it is a fact-finding body, it cannot determine
from such facts if probable cause exists as to warrant the filing of
an information in our courts of law. Needless to state, it cannot
impose criminal, civil or administrative penalties or sanctions.
The PTC is different from the truth commissions in other
countries which have been created as official, transitory and nonjudicial fact-finding bodies to establish the facts and context of
serious

violations

humanitarian

law

of
in

human
a

rights

countrys

or

of

international

past.[9] They are

usually

established by states emerging from periods of internal unrest,

civil strife or authoritarianism to serve as mechanisms for

transitional justice.
Truth commissions have been described as bodies that share
the following characteristics: (1) they examine only past events;
(2) they investigate patterns of abuse committed over a period of
time, as opposed to a particular event; (3) they are temporary
bodies that finish their work with the submission of a report
containing conclusions and recommendations; and (4) they are
officially

sanctioned,

authorized

State.[10] Commissions
conduct

research,

or

members are

support

empowered
usually

victims,

by

the

empowered

and

propose

to

policy

recommendations to prevent recurrence of crimes. Through their

investigations, the commissions may aim to discover and learn
more about past abuses, or formally acknowledge them. They
may aim to prepare the way for prosecutions and recommend
institutional reforms.[11]
Thus,

their

main

goals

range

from

retribution

to

reconciliation. The Nuremburg and Tokyo war crime tribunals are

examples of a retributory or vindicatory body set up to try and
punish those responsible for crimes against humanity. A form of a
reconciliatory tribunal is the Truth and Reconciliation Commission
of South Africa, the principal function of which was to heal the
wounds of past violence and to prevent future conflict by
providing a cathartic experience for victims.
The PTC is a far cry from South Africas model. The latter
placed

more

emphasis

on

reconciliation

than

on

judicial

retribution,

while

identification

and

the marching
punishment

order
of

of

the

PTC

perpetrators.

is
As

the
one

writer[12] puts it:

The order ruled out reconciliation. It translated the
Draconian code spelled out by Aquino in his inaugural
speech: To those who talk about reconciliation, if they
mean that they would like us to simply forget about the
wrongs that they have committed in the past, we have
this to say: There can be no reconciliation without justice.
When we allow crimes to go unpunished, we give consent
to their occurring over and over again.

The Thrusts of the Petitions

Barely a month after the issuance of Executive Order No. 1,
the petitioners asked the Court to declare it unconstitutional and
to enjoin the PTC from performing its functions. A perusal of the
arguments of the petitioners in both cases shows that they are
essentially

the

same. The

petitioners-legislators

summarized

them in the following manner:

(a) E.O. No. 1 violates the separation of powers as
it arrogates the power of the Congress to create a
public office and appropriate funds for its operation.
(b) The provision of Book III, Chapter 10, Section
31 of the Administrative Code of 1987 cannot legitimize
E.O. No. 1 because the delegated authority of the
President to structurally reorganize the Office of the
President to achieve economy, simplicity and efficiency
does not include the power to create an entirely new
public office which was hitherto inexistent like the Truth
Commission.

(c) E.O. No. 1 illegally amended the Constitution

and pertinent statutes when it vested the Truth
Commission with quasi-judicial powers duplicating, if
not superseding, those of the Office of the Ombudsman
created under the 1987 Constitution and the
Department of Justice created under the Administrative
Code of 1987.
(d) E.O. No. 1 violates the equal protection clause
as it selectively targets for investigation and
prosecution officials and personnel of the previous
administration as if corruption is their peculiar species
even as it excludes those of the other administrations,
past and present, who may be indictable.
(e) The creation of the Philippine Truth
Commission of 2010 violates the consistent and general
international practice of four decades wherein States
constitute truth commissions to exclusively investigate
human rights violations, which customary practice
forms part of the generally accepted principles of
international law which the Philippines is mandated to
adhere to pursuant to the Declaration of Principles
enshrined in the Constitution.
(f) The creation of the Truth Commission is an
exercise in futility, an adventure in partisan hostility, a
launching pad for trial/conviction by publicity and a
mere populist propaganda to mistakenly impress the
people that widespread poverty will altogether vanish if
corruption is eliminated without even addressing the
other major causes of poverty.
(g) The mere fact that previous commissions were
not constitutionally challenged is of no moment
because neither laches nor estoppel can bar an

eventual question on the constitutionality and validity

of an executive issuance or even a statute.[13]

In their Consolidated Comment,[14] the respondents, through

the Office of the Solicitor General(OSG), essentially questioned
the legal standing of petitioners and defended the assailed
executive order with the following arguments:
1] E.O. No. 1 does not arrogate the powers of
Congress to create a public office because the
Presidents executive power and power of control
necessarily include the inherent power to conduct
investigations to ensure that laws are faithfully
executed and that, in any event, the Constitution,
Revised Administrative Code of 1987 (E.O. No.
292),[15] Presidential Decree (P.D.) No. 1416[16] (as
amended by P.D. No. 1772), R.A. No. 9970,[17] and
settled jurisprudence that authorize the President to
create or form such bodies.
2] E.O. No. 1 does not usurp the power of
Congress to appropriate funds because there is no
appropriation but a mere allocation of funds already
appropriated by Congress.
3] The Truth Commission does not duplicate or
supersede the functions of the Office of the
Ombudsman (Ombudsman) and the Department of
Justice (DOJ), because it is a fact-finding body and not
a quasi-judicial body and its functions do not duplicate,
supplant or erode the latters jurisdiction.
4] The Truth Commission does not violate the
equal protection clause because it was validly created
for laudable purposes.

The OSG then points to the continued existence and validity

of other executive orders and presidential issuances creating
similar bodies to justify the creation of the PTC such as
Presidential

Complaint

and

Action

Commission (PCAC) by

President Ramon B. Magsaysay, Presidential Committee on

Administrative
Carlos

P.

Performance

Garcia

Government

and

Efficiency (PCAPE) by

Presidential

Operations (PARGO) by

Agency

on

President

President

Reform
Ferdinand

and
E.

Marcos.[18]
From the petitions, pleadings, transcripts, and memoranda,
the following are the principal issues to be resolved:
1.

Whether or not the petitioners have

the legal standing to file their respective petitions and

question Executive Order No. 1;
2.

Whether or not Executive Order No. 1

violates the principle of separation of powers by

usurping the powers of Congress to create and to
appropriate funds for public offices, agencies and
commissions;
3. Whether or not Executive Order No. 1 supplants
the powers of the Ombudsman and the DOJ;
4. Whether or not Executive Order No. 1 violates
the equal protection clause; and

5. Whether or not petitioners are entitled to

injunctive relief.
Essential requisites for judicial review
Before proceeding to resolve the issue of the constitutionality
of Executive Order No. 1, the Court needs to ascertain whether
the requisites for a valid exercise of its power of judicial review
are present.
Like almost all powers conferred by the Constitution, the power of
judicial review is subject to limitations, to wit: (1) there must be
an actual case or controversy calling for the exercise of judicial
power; (2) the person challenging the act must have the standing
to question the validity of the subject act or issuance; otherwise
stated, he must have a personal and substantial interest in the
case such that he has sustained, or will sustain, direct injury as a
result of its enforcement; (3) the question of constitutionality
must be raised at the earliest opportunity; and (4) the issue of
constitutionality must be the very lis mota of the case.[19]
Among all these limitations, only the legal standing of the
petitioners has been put at issue.
Legal Standing of the Petitioners
The OSG attacks the legal personality of the petitionerslegislators to file their petition for failure to demonstrate their
personal stake in the outcome of the case. It argues that the

petitioners have not shown that they have sustained or are in

danger of sustaining any personal injury attributable to the
creation of the PTC. Not claiming to be the subject of the
commissions investigations, petitioners will not sustain injury in
its creation or as a result of its proceedings.[20]
The Court disagrees with the OSG in questioning the legal
standing

of

the

petitioners-legislators

to

assail Executive

Order No. 1. Evidently, their petition primarily invokes usurpation

of the power of the Congress as a body to which they belong as
members. This certainly justifies their resolve to take the cudgels
for Congress as an institution and present the complaints on the
usurpation of their power and rights as members of the
legislature before the Court. As held in Philippine Constitution
Association v. Enriquez,[21]
To the extent the powers of Congress are impaired,
so is the power of each member thereof, since his office
confers a right to participate in the exercise of the powers
of that institution.
An act of the Executive which injures the institution
of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member
of Congress. In such a case, any member of Congress can
have a resort to the courts.

Indeed, legislators have a legal standing to see to it that the

prerogative, powers and privileges vested by the Constitution in
their office remain inviolate. Thus, they are allowed to question

the validity of any official action which, to their mind, infringes on

their prerogatives as legislators.[22]
With regard to Biraogo, the OSG argues that, as a taxpayer,
he has no standing to question the creation of the PTC and the
budget for its operations.[23] It emphasizes that the funds to be
used for the creation and operation of the commission are to be
taken from those funds already appropriated by Congress. Thus,
the allocation and disbursement of funds for the commission will
not entail congressional action but will simply be an exercise of
the Presidents power over contingent funds.
As correctly pointed out by the OSG, Biraogo has not shown
that he sustained, or is in danger of sustaining, any personal and
direct injury attributable to the implementation of Executive
Order No. 1. Nowhere in his petition is an assertion of a clear
right that may justify his clamor for the Court to exercise judicial
power and to wield the axe over presidential issuances in defense
of the Constitution.The case of David v. Arroyo[24] explained the
deep-seated rules on locus standi. Thus:
Locus standi is defined as a right of appearance in a
court of justice on a given question.In private suits,
standing is governed by the real-parties-in interest rule
as contained in Section 2, Rule 3 of the 1997 Rules of
Civil Procedure, as amended. It provides that every
action must be prosecuted or defended in the name
of the real party in interest. Accordingly, the realparty-in interest is the party who stands to be benefited
or injured by the judgment in the suit or the party
entitled to the avails of the suit. Succinctly put, the

plaintiffs standing is based on his own right to the relief

sought.
The difficulty of determining locus standi arises
in public suits. Here, the plaintiff who asserts a public
right in assailing an allegedly illegal official action, does
so as a representative of the general public. He may be a
person who is affected no differently from any other
person.He could be suing as a stranger, or in the
category of a citizen, or taxpayer. In either case, he has
to adequately show that he is entitled to seek judicial
protection. In other words, he has to make out a
sufficient interest in the vindication of the public order
and the securing of relief as a citizen or taxpayer.
Case law in most jurisdictions now allows both
citizen and taxpayer standing in public actions. The
distinction was first laid down in Beauchamp v. Silk,
where it was held that the plaintiff in a taxpayers suit is
in a different category from the plaintiff in a citizens
suit. In the former, the plaintiff is affected by the
expenditure of public funds, while in the latter, he is but
the mere instrument of the public concern. As held by the
New York Supreme Court in People ex rel Case v.
Collins: In matter of mere public right, howeverthe
people are the real partiesIt is at least the right, if not the
duty, of every citizen to interfere and see that a public
offence be properly pursued and punished, and that a
public grievance be remedied. With respect to taxpayers
suits, Terr v. Jordan held that the right of a citizen and a
taxpayer to maintain an action in courts to restrain the
unlawful use of public funds to his injury cannot be
denied.
However, to prevent just about any person from
seeking judicial interference in any official policy or act
with which he disagreed with, and thus hinders the
activities of governmental agencies engaged in public
service, the United State Supreme Court laid down the

more stringent direct injury test in Ex Parte Levitt, later

reaffirmed in Tileston v. Ullman.The same Court ruled
that for a private individual to invoke the judicial power to
determine the validity of an executive or legislative
action, he must show that he has sustained a direct
injury as a result of that action, and it is not
sufficient that he has a general interest common to
all members of the public.
This Court adopted the direct injury test in our
jurisdiction. In People v. Vera, it held that the person who
impugns the validity of a statute must have a personal
and substantial interest in the case such that he
has sustained, or will sustain direct injury as a
result. The Veradoctrine was upheld in a litany of cases,
such as, Custodio v. President of the Senate, Manila Race
Horse Trainers Association v. De la Fuente, Pascual v.
Secretary of Public Works andAnti-Chinese League of the
Philippines v. Felix. [Emphases included. Citations
omitted]

Notwithstanding, the Court leans on the doctrine that the

rule on standing is a matter of procedure, hence, can be relaxed
for nontraditional plaintiffs like ordinary citizens, taxpayers, and
legislators when the public interest so requires, such as when the
matter

is

of transcendental

importance,

of

overreaching

significance to society, or of paramount public interest.[25]

Thus,

in Coconut

Oil

Refiners

Association,

Inc.

v.

Torres,[26] the Court held that in cases of paramount importance

where serious constitutional questions are involved, the standing
requirements may be relaxed and a suit may be allowed to
prosper even where there is no direct injury to the party claiming
the right of judicial review. In the first Emergency Powers

Cases,[27] ordinary

citizens

and

taxpayers

were

allowed

to

question the constitutionality of several executive orders although

they had only an indirect and general interest shared in common
with the public.
The OSG claims that the determinants of transcendental
importance[28] laid down in CREBA v. ERC and Meralco[29] are nonexistent in this case. The Court, however, finds reason in
Biraogos

assertion

that

the

petition

covers

matters

of

transcendental importance to justify the exercise of jurisdiction

by the Court. There are constitutional issues in the petition which
deserve the attention of this Court in view of their seriousness,
novelty and weight as precedents. Where the issues are of
transcendental and paramount importance not only to the public
but also to the Bench and the Bar, they should be resolved for
the guidance of all.[30] Undoubtedly, the Filipino people are more
than interested to know the status of the Presidents first effort to
bring about a promised change to the country. The Court takes
cognizance of the petition not due to overwhelming political
undertones that clothe the issue in the eyes of the public, but
because the Court stands firm in its oath to perform its
constitutional duty to settle legal controversies with overreaching
significance to society.
Power of the President to Create the Truth Commission
In his memorandum in G.R. No. 192935, Biraogo asserts
that the Truth Commission is a public office and not merely an
adjunct body of the Office of the President.[31] Thus, in order that

the President may create a public office he must be empowered

by the Constitution, a statute or an authorization vested in him by
law.

According

to

petitioner,

such

power

cannot

be

presumed[32] since there is no provision in the Constitution or any

specific law that authorizes the President to create a truth
commission.[33] He adds that Section 31 of the Administrative
Code of 1987, granting the President the continuing authority to
reorganize his office, cannot serve as basis for the creation of a
truth commission considering the aforesaid provision merely uses
verbs such as reorganize, transfer, consolidate, merge, and
abolish.[34] Insofar as it vests in the President the plenary power
to reorganize the Office of the President to the extent of creating
a public office, Section 31 is inconsistent with the principle of
separation of powers enshrined in the Constitution and must be
deemed repealed upon the effectivity thereof.[35]
Similarly, in G.R. No. 193036, petitioners-legislators argue
that the creation of a public office lies within the province of
Congress and not with the executive branch of government. They
maintain that the delegated authority of the President to
reorganize under Section 31 of the Revised Administrative Code:
1) does not permit the President to create a public office, much
less a truth commission; 2) is limited to the reorganization of the
administrative structure of the Office of the President; 3) is
limited to the restructuring of the internal organs of the Office of
the President Proper, transfer of functions and transfer of
agencies; and 4) only to achieve simplicity, economy and
efficiency.[36] Such

continuing

authority

of

the

President

to

reorganize his office is limited, and by issuing Executive Order No.

1, the President overstepped the limits of this delegated

authority.
The

OSG

counters

that

there

is

nothing

exclusively

legislative about the creation by the President of a fact-finding

body such as a truth commission. Pointing to numerous offices
created by past presidents, it argues that the authority of the
President to create public offices within the Office of the President
Proper has long been recognized.[37] According to the OSG, the
Executive, just like the other two branches of government,
possesses

the

inherent

authority

to

create

fact-finding

committees to assist it in the performance of its constitutionally

mandated functions and in the exercise of its administrative
functions.[38] This power, as the OSG explains it, is but an adjunct
of the plenary powers wielded by the President under Section 1
and his power of control under Section 17, both of Article VII of
the Constitution.[39]
It contends that the President is necessarily vested with the
power to conduct fact-finding investigations, pursuant to his duty
to ensure that all laws are enforced by public officials and
employees of his department and in the exercise of his authority
to assume directly the functions of the executive department,
bureau and office, or interfere with the discretion of his
officials.[40] The power of the President to investigate is not
limited to the exercise of his power of control over his
subordinates in the executive branch, but extends further in the
exercise of his other powers, such as his power to discipline

subordinates,[41] his power for rule making, adjudication and

licensing purposes[42] and in order to be informed on matters
which he is entitled to know.[43]
The

OSG

also

cites

the

recent

case

of Banda

v.

Ermita,[44] where it was held that the President has the power to
reorganize the offices and agencies in the executive department
in line with his constitutionally granted power of control and by
virtue of a valid delegation of the legislative power to reorganize
executive offices under existing statutes.
Thus,

the

OSG

concludes

that

the

power

of

control

necessarily includes the power to create offices. For the OSG, the
President may create the PTC in order to, among others, put a
closure to the reported large scale graft and corruption in the
government.[45]
The question, therefore, before the Court is this: Does the
creation of the PTC fall within the ambit of the power to
reorganize

as

expressed

in

Section

31

of

the

Revised

Administrative Code? Section 31 contemplates reorganization as

limited by the following functional and structural lines: (1)
restructuring the internal organization of the Office of the
President Proper by abolishing, consolidating or merging units
thereof or transferring functions from one unit to another; (2)
transferring any function under the Office of the President to any
other Department/Agency or vice versa; or (3) transferring any
agency

under

the

Office

of

the

President

to

any

other

Department/Agency or vice versa. Clearly, the provision refers to

reduction of personnel, consolidation of offices, or abolition
thereof by reason of economy or redundancy of functions. These
point to situations where a body or an office is already existent
but a modification or alteration thereof has to be effected. The
creation of an office is nowhere mentioned, much less envisioned
in said provision. Accordingly, the answer to the question is in the
negative.
To say that the PTC is borne out of a restructuring of the
Office

of the President under Section 31 is

a misplaced

supposition, even in the plainest meaning attributable to the term

restructure an alteration of an existing structure. Evidently, the
PTC was not part of the structure of the Office of the President
prior to the enactment of Executive Order No. 1. As held
in Buklod ng Kawaning EIIB v. Hon. Executive Secretary,[46]
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 [323 SCRA 312 (2000)], we ruled that
reorganization "involves the reduction of personnel,

consolidation of offices, or abolition thereof by reason of

economy or redundancy of functions." It takes place
when there is an alteration of the existing structure
of government offices or units therein, including
the lines of control, authority and responsibility
between them.The EIIB is a bureau attached to the
Department of Finance. It falls under the Office of the
President. Hence, it is subject to the Presidents
continuing authority to reorganize. [Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by

the Presidents power of control. Control is essentially the power
to alter or modify or nullify or set aside what a subordinate officer
had done in the performance of his duties and to substitute the
judgment of the former with that of the latter.[47] Clearly, the
power of control is entirely different from the power to create
public offices. The former is inherent in the Executive, while the
latter finds basis from either a valid delegation from Congress, or
his inherent duty to faithfully execute the laws.
The question is this, is there a valid delegation of power
from Congress, empowering the President to create a public
office?
According to the OSG, the power to create a truth
commission pursuant to the above provision finds statutory basis
under P.D. 1416, as amended by P.D. No. 1772.[48] The said law
granted the President the continuing authority to reorganize the
national government, including the power to group, consolidate
bureaus and agencies, to abolish offices, to transfer functions, to

create and classify functions, services and activities, transfer

appropriations, and to standardize salaries and materials.This
decree, in relation to Section 20, Title I, Book III of E.O. 292 has
been invoked in several cases such as Larin v. Executive
Secretary.[49]
The Court, however, declines to recognize P.D. No. 1416 as
a justification for the President to create a public office. Said
decree is already stale, anachronistic and inoperable. P.D. No.
1416 was a delegation to then President Marcos of the authority
to

reorganize

the

administrative

structure

of

the

national

government including the power to create offices and transfer

appropriations pursuant to one of the purposes of the decree,
embodied in its last Whereas clause:
WHEREAS,
the transition towards
the parliamentary form of government will necessitate
flexibility in the organization of the national government.

Clearly, as it was only for the purpose of providing

manageability and resiliency during the interim, P.D. No. 1416, as
amended by P.D. No. 1772, became functus oficio upon the
convening of the First Congress, as expressly provided in Section
6, Article XVIII of the 1987 Constitution. In fact, even the
Solicitor General agrees with this view. Thus:

ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was

enacted was the last whereas

clause of P.D. 1416 says it

was enacted to prepare the
transition from presidential to
parliamentary. Now, in a
parliamentary
form
of
government, the legislative
and executive powers are
fused, correct?
SOLICITOR GENERAL CADIZ: Yes, Your Honor.
ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416
was issued. Now would you
agree with me that P.D. 1416
should not be considered
effective anymore upon the
promulgation,
adoption,
ratification
of
the
1987
Constitution.
SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.]
1416, Your Honor.
ASSOCIATE JUSTICE CARPIO: The power of the President
to
reorganize
the
entire
National
Government
is
deemed repealed, at least,
upon the adoption of the 1987
Constitution, correct.
SOLICITOR GENERAL CADIZ: Yes, Your Honor.[50]

While the power to create a truth commission cannot pass muster

on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the
creation of the PTC finds justification under Section 17, Article VII

of the Constitution, imposing upon the President the duty to

ensure that the laws are faithfully executed. Section 17 reads:
Section 17. The President shall have control of all the
executive departments, bureaus, and offices. He shall ensure
that the laws be faithfully executed. (Emphasis supplied).

As correctly pointed out by the respondents, the allocation of

power in the three principal branches of government is a grant of
all powers inherent in them. The Presidents power to conduct
investigations to aid him in ensuring the faithful execution of laws
in this case, fundamental laws on public accountability and
transparency is inherent in the Presidents powers as the Chief
Executive. That the authority of the President to conduct
investigations and to create bodies to execute this power is not
explicitly mentioned in the Constitution or in statutes does not
mean that he is bereft of such authority.[51] As explained in the
landmark case of Marcos v. Manglapus:[52]
x x x. The 1987 Constitution, however, brought
back the presidential system of government and restored
the separation of legislative, executive and judicial
powers by their actual distribution among three distinct
branches of government with provision for checks and
balances.
It would not be accurate, however, to state that
"executive power" is the power to enforce the laws, for
the President is head of state as well as head of
government and whatever powers inhere in such
positions pertain to the office unless the Constitution
itself withholds it.Furthermore, the Constitution itself
provides that the execution of the laws is only one of the
powers of the President. It also grants the President other

powers that do not involve the execution of any provision

of law, e.g., his power over the country's foreign
relations.
On these premises, we hold the view that although
the 1987 Constitution imposes limitations on the exercise
of specific powers of the President, it maintains intact
what is traditionally considered as within the scope of
"executive power." Corollarily, the powers of the
President cannot be said to be limited only to the specific
powers enumerated in the Constitution. In other words,
executive power is more than the sum of specific powers
so enumerated.
It has been advanced that whatever power inherent
in the government that is neither legislative nor judicial
has to be executive. x x x.

Indeed, the Executive is given much leeway in ensuring that our

laws are faithfully executed. As stated above, the powers of the
President are not limited to those specific powers under the
Constitution.[53] One of the recognized powers of the President
granted pursuant to this constitutionally-mandated duty is the
power to create ad hoc committees. This flows from the obvious
need to ascertain facts and determine if laws have been faithfully
executed.

Thus,

Camposano,[54] the
Administrative

Order

in Department
authority
No.

of

298,

the

of

Health

President

creating

an

to

v.
issue

investigative

committee to look into the administrative charges filed against

the employees of the Department of Health for the anomalous
purchase of medicines was upheld. In said case, it was ruled:

The Chief Executives power to create the Ad

hoc Investigating
Committee
cannot
be
doubted.Having been constitutionally granted full control
of the Executive Department, to which respondents
belong, the President has the obligation to ensure that all
executive officials and employees faithfully comply with
the law. With AO 298 as mandate, the legality of the
investigation is sustained. Such validity is not affected by
the fact that the investigating team and the PCAGC had
the same composition, or that the former used the offices
and facilities of the latter in conducting the inquiry.
[Emphasis supplied]

It should be stressed that the purpose of allowing ad

hoc investigating bodies to exist is to allow an inquiry into
matters which the President is entitled to know so that he can be
properly advised and guided in the performance of his duties
relative to the execution and enforcement of the laws of the land.
And if history is to be revisited, this was also the objective of the
investigative bodies created in the past like the PCAC, PCAPE,
PARGO, the Feliciano Commission, the Melo Commission and the
Zenarosa

Commission.

There

being

no

changes

in

the

government structure, the Court is not inclined to declare such

executive power as non-existent just because the direction of the
political winds have changed.
On the charge that Executive Order No. 1 transgresses the
power of Congress to appropriate funds for the operation of a
public office, suffice it to say that there will be no appropriation
but only an allotment or allocations of existing funds already
appropriated. Accordingly, there is no usurpation on the part of
the Executive of the power of Congress to appropriate funds.

Further, there is no need to specify the amount to be earmarked

for the operation of the commission because, in the words of the
Solicitor General, whatever funds the Congress has provided for
the Office of the President will be the very source of the funds for
the commission.[55] Moreover, since the amount that would be
allocated to the PTC shall be subject to existing auditing rules and
regulations, there is no impropriety in the funding.
Power of the Truth Commission to Investigate
The Presidents power to conduct investigations to ensure that
laws are faithfully executed is well recognized. It flows from
the faithful-execution clause of the Constitution under Article VII,
Section 17 thereof.[56] As the Chief Executive, the president
represents the government as a whole and sees to it that all laws
are enforced by the officials and employees of his department. He
has the authority to directly assume the functions of the
executive department.[57]
Invoking this authority, the President constituted the PTC to
primarily investigate reports of graft and corruption and to
recommend the appropriate action. As previously stated, no
quasi-judicial powers have been vested in the said body as it
cannot adjudicate rights of persons who come before it. It has
been said that Quasi-judicial powers involve the power to hear
and determine questions of fact to which the legislative policy is
to apply and to decide in accordance with the standards laid down
by law itself in enforcing and administering the same law.[58] In
simpler terms, judicial discretion is involved in the exercise of

these quasi-judicial power, such that it is exclusively vested in

the judiciary and must be clearly authorized by the legislature in
the case of administrative agencies.
The distinction between the power to investigate and the
power to adjudicate was delineated by the Court in Cario v.
Commission on Human Rights.[59] Thus:
"Investigate," commonly understood, means to
examine, explore, inquire or delve or probe into, research
on, study. The dictionary definition of "investigate" is "to
observe or study closely: inquire into systematically: "to
search or inquire into: x x to subject to an official probe x
x: to conduct an official inquiry." The purpose of
investigation, of course, is to discover, to find out, to
learn, obtain information. Nowhere included or intimated
is the notion of settling, deciding or resolving a
controversy involved in the facts inquired into by
application of the law to the facts established by the
inquiry.
The legal meaning of "investigate" is essentially the
same: "(t)o follow up step by step by patient inquiry or
observation. To trace or track; to search into; to examine
and inquire into with care and accuracy; to find out by
careful inquisition; examination; the taking of evidence; a
legal inquiry;" "to inquire; to make an investigation,"
"investigation" being in turn described as "(a)n
administrative function, the exercise of which ordinarily
does not require a hearing. 2 Am J2d Adm L Sec. 257; x
x an inquiry, judicial or otherwise, for the discovery and
collection of facts concerning a certain matter or
matters."
"Adjudicate," commonly or popularly understood,
means to adjudge, arbitrate, judge, decide, determine,
resolve, rule on, settle. The dictionary defines the term as

"to settle finally (the rights and duties of the parties to a

court case) on the merits of issues raised: x x to pass
judgment on: settle judicially: x x act as judge." And
"adjudge" means "to decide or rule upon as a judge or
with judicial or quasi-judicial powers: x x to award or
grant judicially in a case of controversy x x."
In the legal sense, "adjudicate" means: "To settle in
the exercise of judicial authority. To determine finally.
Synonymous with adjudge in its strictest sense;" and
"adjudge" means: "To pass on judicially, to decide, settle
or decree, or to sentence or condemn. x x. Implies a
judicial determination of a fact, and the entry of a
judgment." [Italics included. Citations Omitted]

Fact-finding is not adjudication and it cannot be likened to

the judicial function of a court of justice, or even a quasi-judicial
agency

or office.

The

function

of

receiving evidence

and

ascertaining therefrom the facts of a controversy is not a judicial

function. To be considered as such, the act of receiving evidence
and arriving at factual conclusions in a controversy must be
accompanied by the authority of applying the law to the factual
conclusions to the end that the controversy may be decided or
resolved

authoritatively,

finally

and

definitively,

subject

to

appeals or modes of review as may be provided by law.[60] Even

respondents themselves admit that the commission is bereft of
any quasi-judicial power.[61]
Contrary to petitioners apprehension, the PTC will not supplant
the Ombudsman or the DOJ or erode their respective powers. If
at

all,

the

investigative

function

of

the

commission

will

complement those of the two offices. As pointed out by the

Solicitor General, the recommendation to prosecute is but a

consequence of the overall task of the commission to conduct a

fact-finding investigation.[62] The actual prosecution of suspected
offenders, much less adjudication on the merits of the charges
against

them,[63] is

certainly

not

function

given

to

the

commission. The phrase, when in the course of its investigation,

under Section 2(g), highlights this fact and gives credence to a
contrary interpretation from that of the petitioners. The function
of determining probable cause for the filing of the appropriate
complaints before the courts remains to be with the DOJ and the
Ombudsman.[64]
At any rate, the Ombudsmans power to investigate under R.A.
No. 6770 is not exclusive but is shared with other similarly
authorized

government

agencies.

Thus,

in

the

of Ombudsman v. Galicia,[65]it was written:

This power of investigation granted to the Ombudsman
by the 1987 Constitution and The Ombudsman Act is not
exclusive but is shared with other similarly
authorized government agencies such as the PCGG
and judges of municipal trial courts and municipal circuit
trial
courts. The
power
to
conduct
preliminary
investigation on charges against public employees and
officials is likewise concurrently shared with the
Department of Justice. Despite the passage of the Local
Government Code in 1991, the Ombudsman retains
concurrent jurisdiction with the Office of the President
and the local Sanggunians to investigate complaints
against local elective officials. [Emphasis supplied].

case

Also, Executive Order No. 1 cannot contravene the power of the

Ombudsman to investigate criminal cases under Section 15 (1) of
R.A. No. 6770, which states:
(1) Investigate and prosecute on its own or on
complaint by any person, any act or omission of any
public officer or employee, office or agency, when such
act or omission appears to be illegal, unjust, improper or
inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of
its primary jurisdiction, it may take over, at any stage,
from any investigatory agency of government, the
investigation of such cases. [Emphases supplied]

The act of investigation by the Ombudsman as enunciated

above contemplates the conduct of a preliminary investigation or
the determination of the existence of probable cause. This is
categorically out of the PTCs sphere of functions. Its power to
investigate is limited to obtaining facts so that it can advise and
guide the President in the performance of his duties relative to
the execution and enforcement of the laws of the land. In this
regard,

the

PTC

commits

no

act

of

usurpation

of

the

Ombudsmans primordial duties.

The same holds true with respect to the DOJ. Its authority under
Section 3 (2), Chapter 1, Title III, Book IV in the Revised
Administrative Code is by no means exclusive and, thus, can be
shared with a body likewise tasked to investigate the commission
of crimes.

Finally, nowhere in Executive Order No. 1 can it be inferred that

the findings of the PTC are to be accorded conclusiveness. Much
like its predecessors, the Davide Commission, the Feliciano
Commission and the Zenarosa Commission, its findings would, at
best,

be

recommendatory

in

nature.

And

being

so,

the

Ombudsman and the DOJ have a wider degree of latitude to

decide whether or not to reject the recommendation. These
offices, therefore, are not deprived of their mandated duties but
will instead be aided by the reports of the PTC for possible
indictments for violations of graft laws.
Violation of the Equal Protection Clause
Although the purpose of the Truth Commission falls within
the investigative power of the President, the Court finds difficulty
in upholding the constitutionality of Executive Order No. 1 in view
of its apparent transgression of the equal protection clause
enshrined in Section 1, Article III (Bill of Rights) of the 1987
Constitution. Section 1 reads:
Section 1. No person shall be deprived of life,
liberty, or property without due process of law, nor shall
any person be denied the equal protection of the
laws.

The petitioners assail Executive Order No. 1 because it is

violative of this constitutional safeguard. They contend that it
does not apply equally to all members of the same class such that
the intent of singling out the previous administration as its sole

object makes the PTC an adventure in partisan hostility.[66] Thus,

in order to be accorded with validity, the commission must also
cover

reports

of

graft

and

corruption

in

virtually

all

administrations previous to that of former President Arroyo.[67]

The petitioners argue that the search for truth behind the
reported cases of graft and corruption must encompass acts
committed not only during the administration of former President
Arroyo but also during prior administrations where the same
magnitude of controversies and anomalies[68] were reported to
have been committed against the Filipino people. They assail the
classification formulated by the respondents as it does not fall
under the recognized exceptions because first, there is no
substantial distinction between the group of officials targeted for
investigation by Executive Order No. 1 and other groups or
persons who abused their public office for personal gain;
and second, the selective classification is not germane to the
purpose of Executive Order No. 1 to end corruption.[69]In order to
attain constitutional permission, the petitioners advocate that the
commission should deal with graft and grafters prior and
subsequent to the Arroyo administration with the strong arm of
the law with equal force.[70]
Position of respondents
According to respondents, while Executive Order No. 1
identifies the previous administration as the initial subject of the
investigation, following Section 17 thereof, the PTC will not
confine itself to cases of large scale graft and corruption solely

during the said administration.[71] Assumingarguendo that the

commission would confine its proceedings to officials of the
previous administration, the petitioners argue that no offense is
committed against the equal protection clause for the segregation
of

the

transactions

of public officers during

the previous

administration as possible subjects of investigation is a valid

classification based on substantial distinctions and is germane to
the evils which the Executive Order seeks to correct.[72] To
distinguish the Arroyo administration from past administrations, it
recited the following:
First. E.O. No. 1 was issued in view of widespread
reports of large scale graft and corruption in the
previous administration which have eroded public
confidence in public institutions. There is, therefore, an
urgent call for the determination of the truth regarding
certain reports of large scale graft and corruption in the
government and to put a closure to them by the filing
of the appropriate cases against those involved, if
warranted, and to deter others from committing the
evil, restore the peoples faith and confidence in the
Government and in their public servants.
Second. The
segregation
of
the
preceding
administration as the object of fact-finding is warranted
by the reality that unlike with administrations long
gone, the current administration will most likely bear
the immediate consequence of the policies of the
previous administration.
Third. The
classification
of
the
previous
administration as a separate class for investigation lies
in the reality that the evidence of possible criminal
activity, the evidence that could lead to recovery of

public monies illegally dissipated, the policy lessons to

be learned to ensure that anti-corruption laws are
faithfully executed, are more easily established in the
regime that immediately precede the current
administration.
Fourth. Many
administrations
subject
the
transactions of their predecessors to investigations to
provide closure to issues that are pivotal to national life
or even as a routine measure of due diligence and good
housekeeping by a nascent administration like the
Presidential Commission on Good Government (PCGG),
created by the late President Corazon C. Aquino under
Executive Order No. 1 to pursue the recovery of illgotten wealth of her predecessor former President
Ferdinand
Marcos
and
his
cronies,
and
theSaguisag Commission created by former President
Joseph Estrada under Administrative Order No, 53, to
form an ad-hoc and independent citizens committee to
investigate all the facts and circumstances surrounding
Philippine Centennial projects of his predecessor,
former President Fidel V. Ramos.[73] [Emphases
supplied]
Concept of the Equal Protection Clause
One of the basic principles on which this government was
founded is that of the equality of right which is embodied in
Section 1, Article III of the 1987 Constitution. The equal
protection of the laws is embraced in the concept of due process,
as every unfair discrimination offends the requirements of justice
and fair play. It has been embodied in a separate clause,
however, to provide for a more specific guaranty against any
form of undue favoritism or hostility from the government.

Arbitrariness in general may be challenged on the basis of the

due process clause. But if the particular act assailed partakes of
an unwarranted partiality or prejudice, the sharper weapon to cut
it down is the equal protection clause.[74]
According to a long line of decisions, equal protection simply
requires that all persons or things similarly situated should be
treated alike, both as to rights conferred and responsibilities
imposed.[75]It requires public bodies and institutions to treat
similarly situated individuals in a similar manner.[76]The purpose
of the equal protection clause is to secure every person within a
states jurisdiction against intentional and arbitrary discrimination,
whether occasioned by the express terms of a statue or by its
improper

execution

through

the

states

duly

constituted

authorities.[77] In other words, the concept of equal justice under

the law requires the state to govern impartially, and it may not
draw distinctions between individuals solely on differences that
are irrelevant to a legitimate governmental objective.[78]
The equal protection clause is aimed at all official state
actions, not just those of the legislature.[79] Its inhibitions cover
all the departments of the government including the political and
executive departments, and extend to all actions of a state
denying equal protection of the laws, through whatever agency or
whatever guise is taken. [80]
It, however, does not require the universal application of the
laws to all persons or things without distinction. What it simply

requires is equality among equals as determined according to a

valid classification. Indeed, the equal protection clause permits
classification. Such classification, however, to be valid must pass
the test of reasonableness. The test has four requisites: (1) The
classification rests on substantial distinctions; (2) It is germane to
the purpose of the law; (3) It is not limited to existing conditions
only;
(4)

and
It

applies

equally

class.[81] Superficial

to

differences

all
do

members
not

of

make

the
for

same

valid

classification.[82]
For

classification

to

meet

the

requirements

of

constitutionality, it must include or embrace all persons who

naturally belong to the class.[83] The classification will be regarded
as invalid if all the members of the class are not similarly treated,
both as to rights conferred and obligations imposed. It is not
necessary

that

the

classification

be

made

with

absolute

symmetry, in the sense that the members of the class should

possess the same characteristics in equal degree. Substantial
similarity will suffice; and as long as this is achieved, all those
covered by the classification are to be treated equally. The mere
fact that an individual belonging to a class differs from the other
members, as long as that class is substantially distinguishable
from all others, does not justify the non-application of the law to
him.[84]
The

classification

must

not

be

based

on

existing

circumstances only, or so constituted as to preclude addition to

the number included in the class. It must be of such a nature as

to

embrace

circumstances

all

those

and

who

may

conditions.

It

thereafter

be

must

leave

not

in

similar
out

or

underinclude those that should otherwise fall into a certain

classification. As

elucidated

in Victoriano

v.

Elizalde

Rope

Workers' Union[85] and reiterated in a long line of cases,[86]

The guaranty of equal protection of the laws is not a
guaranty of equality in the application of the laws upon all
citizens of the state. It is not, therefore, a requirement, in
order to avoid the constitutional prohibition against
inequality, that every man, woman and child should be
affected alike by a statute. Equality of operation of
statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality,
not identity of rights. The Constitution does not require
that things which are different in fact be treated in law as
though they were the same. The equal protection clause
does not forbid discrimination as to things that are
different. It does not prohibit legislation which is limited
either in the object to which it is directed or by the
territory within which it is to operate.
The equal protection of the laws clause of the Constitution
allows classification. Classification in law, as in the other
departments of knowledge or practice, is the grouping of
things in speculation or practice because they agree with
one another in certain particulars. A law is not invalid
because of simple inequality. The very idea of
classification is that of inequality, so that it goes without
saying that the mere fact of inequality in no manner
determines the matter of constitutionality. All that is
required of a valid classification is that it be reasonable,
which means that the classification should be based on
substantial distinctions which make for real differences,
that it must be germane to the purpose of the law; that it
must not be limited to existing conditions only; and that it

must apply equally to each member of the class. This

Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary.
[Citations omitted]

Applying these precepts to this case, Executive Order No. 1

should be struck down as violative of the equal protection
clause. The clear mandate of the envisioned truth commission is
to investigate and find out the truth concerning the reported
cases

of

graft

and

corruption

during

the previous

administration[87] only. The intent to single out the previous

administration is plain, patent and manifest. Mention of it has
been made in at least three portions of the questioned executive
order. Specifically, these are:
WHEREAS, there is a need for a separate body dedicated
solely to investigating and finding out the truth
concerning the reported cases of graft and corruption
during the previous administration, and which will
recommend the prosecution of the offenders and secure
justice for all;
SECTION 1. Creation of a Commission. There is hereby
created the PHILIPPINE TRUTH COMMISSION, hereinafter
referred to as the COMMISSION, which shall primarily
seek and find the truth on, and toward this end,
investigate reports of graft and corruption of such scale
and magnitude that shock and offend the moral and
ethical sensibilities of the people, committed by public
officers and employees, their co-principals, accomplices
and accessories from the private sector, if any, during
the previous
administration;
and
thereafter
recommend the appropriate action or measure to be

taken thereon to ensure that the full measure of justice

shall be served without fear or favor.
SECTION 2. Powers and Functions. The Commission,
which shall have all the powers of an investigative body
under Section 37, Chapter 9, Book I of the Administrative
Code of 1987, is primarily tasked to conduct a thorough
fact-finding investigation of reported cases of graft and
corruption referred to in Section 1, involving third level
public officers and higher, their co-principals, accomplices
and accessories from the private sector, if any, during
the previous administration and thereafter submit its
finding and recommendations to the President, Congress
and the Ombudsman. [Emphases supplied]

In this regard, it must be borne in mind that the Arroyo

administration is but just a member of a class, that is, a class of
past administrations. It is not a class of its own. Not to include
past administrations similarly situated constitutes arbitrariness
which

the

equal

protection

clause

cannot

sanction. Such

discriminating differentiation clearly reverberates to label the

commission

as

vehicle

for

vindictiveness

and

selective

retribution.
Though the OSG enumerates several differences between
the Arroyo administration and other past administrations, these
distinctions are not substantial enough to merit the restriction of
the investigation to the previous administration only. The reports
of widespread corruption in the Arroyo administration cannot be
taken as basis for distinguishing said administration from earlier
administrations which were also blemished by similar widespread
reports of impropriety. They are not inherent in, and do not inure

solely to, the Arroyo administration. As Justice Isagani Cruz put

it, Superficial differences do not make for a valid classification.[88]

The public needs to be enlightened why Executive Order No.

1 chooses to limit the scope of the intended investigation to the
previous administration only. The OSG ventures to opine that to
include

other

past

administrations,

at

this

point,

may

unnecessarily overburden the commission and lead it to lose its

effectiveness.[89] The reason given is specious. It is without doubt
irrelevant to the legitimate and noble objective of the PTC to
stamp out or end corruption and the evil it breeds.[90]
The probability that there would be difficulty in unearthing
evidence

or

that

the

earlier

reports

involving

the

earlier

administrations were already inquired into is beside the point.

Obviously, deceased presidents and cases which have already
prescribed can no longer be the subjects of inquiry by the PTC.
Neither

is

the

PTC

expected

to

conduct

simultaneous

investigations of previous administrations, given the bodys

limited time and resources. The law does not require the
impossible(Lex non cogit ad impossibilia).[91]
Given the foregoing physical and legal impossibility, the
Court logically recognizes the unfeasibility of investigating almost
a centurys worth of graft cases. However, the fact remains that
Executive Order No. 1 suffers from arbitrary classification. The
PTC, to be true to its mandate of searching for the truth, must
not exclude the other past administrations. The PTC must, at

least,

have

the

authority

to

investigate

all

past

administrations. While reasonable prioritization is permitted, it

should not be arbitrary lest it be struck down for being
unconstitutional. In the often quoted language of Yick Wo v.
Hopkins,[92]

Though the law itself be fair on its face and

impartial in appearance, yet, if applied and
administered by public authority with an evil eye and
an unequal hand, so as practically to make unjust and
illegal discriminations between persons in similar
circumstances, material to their rights, the denial of
equal justice is still within the prohibition of the
constitution. [Emphasis supplied]
It could be argued that considering that the PTC is an ad
hoc body, its scope is limited. The Court, however, is of the
considered view that although its focus is restricted, the
constitutional guarantee of equal protection under the laws
should not in any way be circumvented. The Constitution is the
fundamental and paramount law of the nation to which all other
laws must conform and in accordance with which all private rights
determined and all public authority administered.[93] Laws that do
not conform to the Constitution should be stricken down for being
unconstitutional.[94] While the thrust of the PTC is specific, that is,
for investigation of acts of graft and corruption, Executive Order
No. 1, to survive, must be read together with the provisions of
the Constitution. To exclude the earlier administrations in the

guise of substantial distinctions would only confirm the petitioners

lament that the subject executive order is only an adventure in
partisan hostility. In the case of US v. Cyprian,[95] it was written:
A rather limited number of such classifications have routinely
been held or assumed to be arbitrary; those include: race,
national origin, gender, political activity or membership in a
political party, union activity or membership in a labor union, or
more generally the exercise of first amendment rights.
To reiterate, in order for a classification to meet the
requirements of constitutionality, it must include or embrace all
persons who naturally belong to the class.[96] Such a classification
must not be based on existing circumstances only, or so
constituted as to preclude additions to the number included
within a class, but must be of such a nature as to embrace all
those who may thereafter be in similar circumstances and
conditions. Furthermore,

all

who

are

in

situations

and

circumstances which are relative to the discriminatory legislation

and which are indistinguishable from those of the members of the
class must be brought under the influence of the law and treated
by it in the same way as are the members of the class.[97]
The Court is not unaware that mere underinclusiveness is
not fatal to the validity of a law under the equal protection
clause.[98] Legislation is not unconstitutional merely because it is
not all-embracing and does not include all the evils within its
reach.[99] It has been written that a regulation challenged under
the equal protection clause is not devoid of a rational predicate
simply because it happens to be incomplete.[100] In several

instances, the underinclusiveness was not considered a valid

reason to strike down a law or regulation where the purpose can
be attained in future legislations or regulations. These cases refer
to the step by step process.[101] With regard to equal protection
claims, a legislature does not run the risk of losing the entire
remedial scheme simply because it fails, through inadvertence or
otherwise, to cover every evil that might conceivably have been
attacked.[102]
In

Executive

Order

No.

1,

however,

there

is

no

inadvertence. That the previous administration was picked out

was deliberate and intentional as can be gleaned from the fact
that it was underscored at least three times in the assailed
executive order. It must be noted that Executive Order No. 1
does not even mention any particular act, event or report to be
focused on unlike the investigative commissions created in the
past. The equal protection clause is violated by purposeful and
intentional discrimination.[103]
To disprove petitioners contention that there is deliberate
discrimination, the OSG clarifies that the commission does not
only confine itself to cases of large scale graft and corruption
committed

during

the

previous

administration.[104] The

OSG

points to Section 17 of Executive Order No. 1, which provides:

SECTION 17. Special Provision Concerning Mandate. If

and when in the judgment of the President there is a
need to expand the mandate of the Commission as

defined in Section 1 hereof to include the investigation of

cases and instances of graft and corruption during the
prior administrations, such mandate may be so extended
accordingly by way of a supplemental Executive Order.

The Court is not convinced. Although Section 17 allows the

President the discretion to expand the scope of investigations of
the PTC so as to include the acts of graft and corruption
committed in other past administrations, it does not guarantee
that they would be covered in the future. Such expanded
mandate of the commission will still depend on the whim and
caprice of the President. If he would decide not to include them,
the section would then be meaningless. This will only fortify the
fears of the petitioners that the Executive Order No. 1 was crafted
to tailor-fit the prosecution of officials and personalities of the
Arroyo administration.[105]

The Court tried to seek guidance from the pronouncement in

the case of Virata v. Sandiganbayan,[106] that the PCGG Charter
(composed of Executive Orders Nos. 1, 2 and 14) does not violate
the equal protection clause. The decision, however, was devoid of
any discussion on how such conclusory statement was arrived at,
the principal issue in said case being only the sufficiency of a
cause of action.
A final word

The issue that seems to take center stage at present is whether or not the Supreme Court, in the exercise of its
constitutionally mandated power of Judicial Review with respect
to

recent

initiatives

of

the

legislature

and

the

executive

department, is exercising undue interference. Is the Highest

Tribunal,

which

is

expected

to

be

the

protector

of

the

Constitution, itself guilty of violating fundamental tenets like the

doctrine of separation of powers? Time and again, this issue has
been addressed by the Court, but it seems that the present
political situation calls for it to once again explain the legal basis
of its action lest it continually be accused of being a hindrance to
the nations thrust to progress.
The Philippine Supreme Court, according to Article VIII,
Section 1 of the 1987 Constitution, is vested with Judicial Power
that includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a
grave of abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
government.
Furthermore, in Section 4(2) thereof, it is vested with the
power of judicial review which is the power to declare a treaty,
international or executive agreement, law, presidential decree,
proclamation,

order,

instruction,

ordinance,

or

regulation

unconstitutional. This power also includes the duty to rule on the

constitutionality of the application, or operation of presidential
decrees, proclamations, orders, instructions, ordinances, and

other regulations. These provisions, however, have been fertile

grounds of conflict between the Supreme Court, on one hand,
and the two co-equal bodies of government, on the other. Many
times the Court has been accused of asserting superiority over
the other departments.
To answer this accusation, the words of Justice Laurel would
be a good source of enlightenment, to wit: And when the
judiciary mediates to allocate constitutional boundaries, it does
not assert any superiority over the other departments; it does not
in reality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by the
Constitution to determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and
guarantees to them.[107]
Thus, the Court, in exercising its power of judicial review, is
not imposing its own will upon a co-equal body but rather simply
making sure that any act of government is done in consonance
with the authorities and rights allocated to it by the Constitution.
And, if after said review, the Court finds no constitutional
violations of any sort, then, it has no more authority of
proscribing the actions under review. Otherwise, the Court will
not

be

deterred

to

pronounce

said

act

as

void

and

unconstitutional.
It cannot be denied that most government actions are
inspired with noble intentions, all geared towards the betterment

of the nation and its people. But then again, it is important to

remember this ethical principle: The end does not justify the
means. No matter how noble and worthy of admiration the
purpose of an act, but if the means to be employed in
accomplishing

it

is

simply

irreconcilable

with

constitutional

parameters, then it cannot still be allowed.[108] The Court cannot

just turn a blind eye and simply let it pass. It will continue to
uphold the Constitution and its enshrined principles.
The Constitution must ever remain supreme. All
must bow to the mandate of this law. Expediency must
not be allowed to sap its strength nor greed for power
debase its rectitude.[109]

Lest it be misunderstood, this is not the death knell for a

truth

commission

as

nobly

envisioned

by

the

present

administration. Perhaps a revision of the executive issuance

so as to include the earlier past administrations would
allow it to pass the test of reasonableness and not be an
affront to the Constitution. Of all the branches of the
government, it is the judiciary which is the most interested in
knowing the truth and so it will not allow itself to be a hindrance
or obstacle to its attainment. It must, however, be emphasized
that the search for the truth must be within constitutional bounds
for ours is still a government of laws and not of men.[110]
WHEREFORE,

the

petitions

are GRANTED. Executive

Order No. 1 is hereby declaredUNCONSTITUTIONAL insofar as it

is violative of the equal protection clause of the Constitution.

As also prayed for, the respondents are hereby ordered to

cease and desist from carrying out the provisions of Executive
Order No. 1.
SO ORDERED.

CESAR G. VIOLA, Chairman, Bgy. 167, Zone 15,

District II, Manila, petitioner, vs. HON. RAFAEL
M. ALUNAN III, Secretary, DILG, ALEX L. DAVID,
President/Secretary General, National Liga ng mga
Barangay, LEONARDO L. ANGAT, President, City of
Manila, Liga ng mga Barangay, respondents.
Icaonapo, Arce & Associates Law Office for petitioners.
Antonio C. Cabreros, Jr. for Alex L. David.
Arsenio C. Villalon, Jr. for L. L. Angat.
SYNOPSIS
This is a petition for prohibition filed by Cesar G. Viola, Chairman,
Barangay 167, Zone 15, District II, Manila challenging the validity of
Article III, Section 1-2 of the Revised Implementing Rules and
Guidelines for the general election of the Liga ng mga Barangay
officers in so far as they provide for the election of first, second and
third vice presidents and for auditors of the National Liga ng mga
Barangay and its chapter. Petitioner's contention is that the positions
in question are in excess of those provided in Section 493 of the Local
Government Code (LGC),thus, a violation of the principle that
implementing rules and regulations cannot add or detract from the
provisions of the law they are designed to implement.

The Supreme Court ruled that petitioner's contention is untenable.

Contrary to petitioner's assertion, the creation of the additional
positions is authorized by Section 493 of the LGC.This provision in fact
requires and not merely authorizes the board of directors to create
such other positions, as it may deem necessary for the management of
the chapter. While the board of directors of a local chapter can create
additional position to provide for the needs of the chapter, the board of
directors of the National Liga must be deemed to have the power to
create additional positions not only for its management but also for
that of all chapters at the municipal, city, provincial and metropolitan
political subdivision levels. Otherwise the National Liga would be no
different from the local chapters. Hence, the creation of other elective
positions, which may be deemed necessary for the management of the
chapter, is within the purview of Section 493. In view thereof, the
petition for prohibition is dismissed for lack of merit.
SYLLABUS
1. POLITICAL LAW; LOCAL GOVERNMENT CODE;THE CREATION OF
THE ADDITIONAL POSITIONS HEREIN ASSAILED IS SANCTIONED BY
SECTION 493 THEREOF. Contrary to petitioner's contention, the
creation of the additional positions is authorized by Section 493 of the
Local Government Code (LGC). This provision in fact requires and
not merely authorizes the board of directors to "create such other
positions as it may deem necessary for the management of the
chapter" and belies petitioner's claim that said provision ( 493) limits

the officers of a chapter to the president, vice president, five members

of the board of directors, secretary, and treasurer.
2. ID.; ID.; ID.; THE NATIONAL LIGA MUST BE DEEMED TO HAVE THE
POWER TO CREATE ADDITIONAL POSITIONS NOT ONLY FOR ITS
MANAGEMENT BUT ALSO FOR THAT OF ALL THE CHAPTERS AT THE
MUNICIPAL, CITY, PROVINCIAL AND METROPOLITAN POLITICAL
SUBDIVISION LEVELS. While the board of directors of a local
chapter can create additional positions to provide for the needs of the
chapter, the board of directors of the National Liga must be deemed to
have the power to create additional positions not only for its
management but also for that of all the chapters at the municipal, city,
provincial and metropolitan political subdivision levels. Otherwise, the
National Liga would be no different from the local chapters. There
would then be only so many local chapters without a national one,
when what is contemplated in the above-quoted provision of
the LGC is that there should be one Liga ng mga Barangay with local
chapters at all levels of local government units. The dissent, by
denying to the board of directors at the National Liga the power to
create additional positions in the local chapters, would reduce such
board to a board of a local chapter. The fact is that 493 grants the
power to create positions not only to the boards of the local chapters
but to the board of the Liga at the national level as well.

EDATSI

3. ID.; ADMINISTRATIVE LAW; DELEGATION OF LEGISLATIVE POWER

BY CONGRESS; NO UNDUE DELEGATION THEREOF; SECTION 493
OF THE LOCAL GOVERNMENT CODE EMBODIES A SUFFICIENT AND

FAIRLY INTELLIGIBLE STANDARD. Statutory provisions authorizing

the President of the Philippines to make reforms and changes in
government-owned or controlled corporations for the purpose of
promoting "simplicity, economy and efficiency" in their operations and
empowering the Secretary of Education to prescribe minimum
standards of "adequate and efficient instruction" in private schools and
colleges have been found to be sufficient for the purpose of valid
delegation. Judged by these cases, we hold that 493 of the Local
Government Code, in directing the board of directors of the liga to
"create such other positions as may be deemed necessary for the
management of the chapter[s]," embodies a fairly intelligible standard.
There is no undue delegation of power by Congress.
DAVIDE, JR., J., dissenting opinion:
1. POLITICAL LAW; LOCAL GOVERNMENT CODE;LEAGUES OF LOCAL
GOVERNMENT UNITS; THERE IS NO PROVISION IN THE LOCAL
GOVERNMENT CODE CREATING OR ESTABLISHING THE BARANGAY
NATIONAL ASSEMBLY. I am unable to find any provision of
the LGC (Local Government Code) creating or establishing the
Barangay National Assembly. What the LGC has created is the Liga ng
mga Barangay (Sec. 491) with local chapters at the municipal, city,
provincial and metropolitan subdivision levels Sec. (492). Under the
Implementing Rules of the LGC (Art. 211[c][4]), the National Liga ng
mga Barangay is composed of the duly elected presidents of highly
urbanized city chapters, provincial chapters and metropolitan chapters.
Pursuant to Article 211 [f][2] of the Implementing Rules, the members

of the Board of the Pambansang Katipunan ng Mga Barangay, headed

by the Secretary-General, were constituted into a committee to
exercise the powers and duties of the national liga and draft or amend
the Constitution and By-Laws of the Liga. There is at all no showing
that this committee was the so-called First Barangay National
Assembly which convened on 11 January 1994.

ACTIHa

2. ID.; ID.; ID., ID.; SECTION 493; OF THE LOCAL GOVERNMENT

CODE AND ARTICLE 211(F) OF-THE IMPLEMENTING RULES LIMIT THE
OFFICERS TO THE: PRESIDENT, VICE PRESIDENT AND THE BOARD OF
DIRECTORS COMPOSED OF FIVE (5) MEMBERS. Even assuming that
the committee was the so-called First Barangay National Assembly of
11 January 1994, said committee was not authorized to create by
virtue of the Constitution and By-Laws it enacted additional positions
for the national liga and the liga at the local levels. The
aforementioned Article 211(g) of the Implementing Rules, limits the
powers of this committee. Note that the constitution and by-laws
which the committee may enact must not be inconsistent with . . .
"applicable laws, rules and regulations." Of course, one of the laws
that come to mind is the LGC of 1991 and the rules and regulations
could nothing be than the Rules Implementing the Local Government
Code of 1991. It goes without saying that the LGC and its
Implementing Rules must perforce be heeded. It bears repeating that
as they stand, Section 493 of the LCG and Article 211 (f) of the
Implementing Rules limit the officers to the: President, Vice President
and the board of directors composed of five (5) members. The latter

then appoints asecretary and a treasurer and may create such other
positions as it may deem necessary for the management of the
chapter. Plainly, neither the LGC nor the Implementing Rules
authorizes any person or entity, other than the Board of Directors, to
create additional positions.
3. ID.; ID.; ID.; ID.; IT WOULD BE A CLEAR CASE OF JUDICIAL
LEGISLATION TO DECLARE THAT SINCE THE ADDITIONAL POSITIONS
WERE CREATED IN THE CONSTITUTION AND BY LAWS OF THE LIGA
NG MGA BARANGAY THEN THEY "WERE AS MUCH AS THE CREATIONS
OF THE LOCAL CHAPTERS AS OF THE NATIONAL LEAGUE"; SAID
PROPOSITION RUNS AFOUL OF SECTION 493 OF THE LOCAL
GOVERNMENT CODE WHICH VESTS THE POWER TO CREATE
ADDITIONAL POSITIONS ONLY IN THE BOARD OF DIRECTORS OF THE
CHAPTER. It would be a clear case of judicial legislation to declare
that since the additional positions were created in the Constitution and
By-Laws of the Liga ng Mga Barangay, then they, "were as much as
the creations of the local chapters as of the national league." This runs
afoul of Section 493 of the LGC which vests the power to create
additional positions only in the Board of Directors of the chapter. The
claim in the ponencia that the creation of additional positions in the
Constitution and By-Laws does not preclude the board of directors of
the chapter as well as that of the national liga from creating other
positions, is inconsistent with the earlier proposition that such new
positions "were as much the creations of the local chapters and the
league" and the further justification proffered that the creation of the

national positions "was intended to provide uniform officers for the

various chapters and the national liga was in line with the mandate of
the assembly to 'formulate uniform constitution and by-laws applicable
to the national liga and all local chapters.'" If this were so, then the
chapters are barred from creating additional positions other than those
created in the Constitution and By-Laws of the Liga ng Mga Barangay.
4. ID.; ID., ID.; ID.; SECTION 493 OF THE LOCAL GOVERNMENT
CODE MERELY ALLOWS THE CREATION OF APPOINTIVE POSITIONS;
IT DOES NOT EMPOWER THE LOCAL LIGA TO CREATE ELECTIVE
POSITIONS OTHER THAN THAT OF PRESIDENT, VICE PRESIDENT AND
BOARD OF DIRECTORS. It may likewise be observed that Section
493 merely allows the creation of otherappointive positions as it may
deem necessary for the management of the chapter." Stress should be
on the term "appointive," in light of the clause preceding the grant of
the power, which reads: "The board shall appoint its secretary and
treasurer. Following the rule of ejusdem generis in statutory
construction, the "other positions" which may be created must be of
the same category,viz., APPOINTIVE, as that of secretary and
treasurer. These other positions may then be that of an assistant
secretary, assistant treasurer, auditor, public relations officer, or
information officer, or even a sergeant-at-arms. Further, under Section
493, the new positions which may be created are those "deemed
necessary for the management of the chapter," which may only
pertain to the day-to-day business and affairs of the liga chapter, and
not to policy formulation which may be exercised by the executive

officers and Board of Directors. In short, the section does not empower
the local liga to create elective positions other than that of President,
Vice-President and Board of Directors.

cEAIHa

DECISION

MENDOZA, J :
p

This is a petition for prohibition challenging the validity of Art. III, 12 of the Revised Implementing Rules and Guidelines for the General
Elections of the Liga ng mga Barangay Officers so far as they provide
for the election of first, second and third vice presidents and for
auditors for the National Liga ng mga Barangay and its chapters. The
provisions in question read:

cdasia

1. Local Liga Chapters. The Municipal, City, Metropolitan and

Provincial Chapters shall directly elect the following officers and
directors to constitute their respective Board of Directors,
namely:
1.1 President
1.2 Executive Vice-President
1.3 First Vice-President
1.4 Second Vice-President

1.5 Third Vice-President

1.6 Auditor
1.7 Five (5) Directors
2. National Liga. The National Liga shall directly elect the
following officers and directors to constitute the National Liga
Board of Directors namely:
2.1 President
2.2 Executive Vice-President
2.3 First Vice-President
2.4 Second Vice-President
2.5 Third Vice-President
2.6 Secretary General
2.7 Auditor
2.8 Five (5) Directors

Petitioner Cesar G. Viola brought this action as barangay chairman of

Bgy. 167, Zone 15, District II, Manila against then Secretary of
Interior and Local Government Rafael M. Alunan III, Alex L. David,
president/secretary general of the National Liga ng mga Barangay, and
Leonardo L. Angat, president of the City of Manila Liga ng mga
Barangay, to restrain them from carrying out the elections for the
questioned positions on July 3, 1994.

Petitioner's contention is that the positions in question are in excess of

those provided in the Local Government Code (R.A. No. 7160), 493 of
which mentions as elective positions only those of president, vice
president, and five members of the board of directors in each chapter
at the municipal, city, provincial, metropolitan political subdivision, and
national levels. Petitioner argues that, in providing for the positions of
first, second and third vice presidents and auditor for each chapter,
1-2 of the Implementing Rules expand the number of positions
authorized in 493 of the Local Government Code in violation of the
principle that implementing rules and regulations cannot add or
detract from the provisions of the law they are designed to implement.
Although the elections are now over, the issues raised in this case are
likely to arise again in future elections of officers of the Liga ng mga
Barangay. For one thing, doubt may be cast on the validity of the acts
of those elected. For another, this comes within the rule that courts
will decide a question which is otherwise moot and academic if it is
"capable of repetition, yet evading review." 1
We will therefore proceed to the merits of this case.
Petitioner's contention that the additional positions in question have
been created without authority of law is untenable. To begin with, the
creation of these positions was actually made in the Constitution and
By-laws of the Liga ng mga Barangay, which was adopted by the First
Barangay National Assembly on January 11, 1994. This Constitution
and By-laws provide in pertinent parts:

ARTICLE VI
OFFICERS AND DIRECTORS
Section 1. Organization of Board of Directors of Local Chapters.
The chapters shall directly elect their respective officers,
namely, a president; executive vice president; first, second,
and third vice presidents; auditor; and five (5) members to
constitute the Board of Directors of their respective chapter.
Thereafter, the Board shall appoint a secretary, treasurer, and
public relations officer from among the five (5) members, with
the rest serving as Directors of Board. The Board may create
such other positions as it may deem necessary for the
management of the chapter. Pending elections of the president
of the municipal, city, provincial and metropolitan chapters of
the Liga, the incumbent presidents of the ABCs of the
municipality, city province and Metropolitan Manila shall
continue to act as presidents of the corresponding Liga
chapters, subject to the provisions of the Local Government
Code of 1991.
Section 2. Organization of Board of Directors of the National
Liga. The National Liga shall be composed of the presidents
of the provincial Liga chapters, highly urbanized and
independent component city chapters, and the metropolitan
chapter who shall directly elect their respective officers,
namely, a president, executive vice president; first, second,

and third vice president, auditor, secretary general; and five

(5) members to constitute the Board of Directors of the
National Liga. Thereafter, the Board shall appoint a treasurer,
secretary and public relations officers from among the five (5)
members with the rest serving as directors of the Board. The
Board may create such other positions as it may deem
necessary for the management of the National Liga. Pending
election of Secretary-General, the incumbent president of the
Pambansang Katipunan ng mga Barangay (PKB) shall act as
the Secretary-General. The incumbent members of the Board
of the PKB, headed by the Secretary-General who continue to
be presidents of the respective chapters of the Liga to which
they belong, shall constitute a committee to exercise the
powers and duties of the National Liga and with the primordial
responsibility of drafting a Constitution and By-Laws needed for
the organization of the Liga as a whole pursuant to the
provisions of the Local Government Code of 1991.

The post of executive vice president is in reality that of the vice

president in 493 of the LGC,so that the only additional positions
created for each chapter in the Constitution and By-laws are those of
first, second and third vice presidents and auditor. Contrary to
petitioner's contention, the creation of the additional positions is
authorized by the LGC which provides as follows:
493. Organization. The liga at the municipal, city,
provincial, metropolitan political subdivision, and national levels

directly elect a president, a vice-president, and five (5)

members of the board of directors. The board shall appoint its
secretary and treasurer and create such other positions as it
may deem necessary for the management of the chapter. A
secretary-general shall be elected from among the members of
the national liga and shall be charged with the overall operation
of the liga on the national level. The board shall coordinate the
activities of the chapters of the liga. (emphasis added)

This provision in fact requires and not merely authorizes the

board of directors to "create such other positions as it may deem
necessary for the management of the chapter" and belies petitioner's
claim that said provision (493) limits the officers of a chapter to the
president, vice president, five members of the board of directors,
secretary, and treasurer. That Congress can delegate the power to
create positions such as these has been settled by our decisions
upholding the validity of reorganization statutes authorizing the
President of the Philippines to create, abolish or merge offices in the
executive department. 2 The question is whether, in making a
delegation of this power to the board of directors of each chapter of
the Liga ng mga Barangay, Congress provided a sufficient standard so
that, in the phrase of Justice Cardozo, administrative discretion may
be "canalized within proper banks that keep it from overflowing." 3
Statutory provisions authorizing the President of the Philippines to
make reforms and changes in government owned or controlled
corporations for the purpose of promoting "simplicity, economy and

efficiency" 4 in their operations and empowering the Secretary of

Education to prescribe minimum standards of "adequate and efficient
instruction" 5 in private schools and colleges have been found to be
sufficient for the purpose of valid delegation. Judged by these cases,
we hold that 493 of the Local Government Code, in directing the
board of directors of the liga to "create such other positions as may be
deemed necessary for the management of the chapter[s]," embodies a
fairly intelligible standard. There is no undue delegation of power by
Congress.
Justice Davide contends in dissent, however, that "only the Board of
Directors and not any other body is vested with the power to
create other positions as may be necessary for the management of the
chapter" and that, in any case, there is no showing that the Barangay
National Assembly was authorized to draft the Constitution and Bylaws because he is unable to find any law creating it. The Barangay
National Assembly is actually the Pambansang Katipunan ng mga
Barangay (PKB) referred to in Art. 210(f)(2)(3) of the Rules and
Regulations Implementing the Local Government Code of 1991, which
Justice Davide's dissent cites. It will be helpful to quote these
provisions:

aisadc

(2) A secretary-general shall be elected from among the

members of the national liga who shall be responsible for
the overall operation of the liga. Pending election of a
secretary-general under this rule, the incumbent
president of the pambansang katipunan ng mga

barangay shall act as the secretary-general. The

incumbent members of the board of the pambansang
katipunan ng mga barangay, headed by the secretarygeneral, who continue to be presidents of the respective
chapters of the liga to which they belong, shall constitute
a committee to exercise the powers and duties of the
national liga and draft or amend the constitution and bylaws of the national liga to conform to the provisions of
this Rule.
(3) The board of directors shall coordinate the activities of the
various chapters of the liga.
(Emphasis added)

Pursuant to these provisions, pending the organization of the Liga ng

mga Barangay, the board of directors of the PKB was constituted into a
committee, headed by the PKB president, who acted as secretary
general, with a two-fold mandate: "[1] exercise the powers and duties
of the national liga and [2] draft or amend the constitution and bylaws of the national liga to conform to the provisions of this Rule." The
board of directors of the PKB, functioning in place of the board of
directors of the National Liga ng mga Barangay, exercised one of these
powers of the National Liga board, namely, to create additional
positions which it deemed necessary for the management of a chapter.
There is therefore no basis for the claim that because the power to
create additional positions in the Liga or its chapters is vested only in

the board of directors the exercise of this power by the Barangay

National Assembly is unauthorized and illegal and the positions created
are void. The Barangay National Assembly was actually the
Pambansang Katipunan ng mga Barangay or PKB. Pending the
organization of the Liga ng mga Barangay, it served as the Liga.

But it is contended in the dissent that "Section 493 of the LGC . . .

vests the power to create additional positions in the Board of Directors
of the chapter." The implication seems to be that the board of the
directors at the national level did not have that power. It is necessary
to consider the organizational structure of the Liga ng mga Barangay
as provided in the LGC,as follows:
492. Representation, Chapters, National Liga. Every
barangay shall be represented in said liga by the punong
barangay, or in his absence or incapacity, by a sanggunian
member duly elected for the purpose among its members, who
shall attend all meetings or deliberations called by the different
chapters of the liga.
The liga shall have chapters at the municipal, city, provincial
and metropolitan political subdivision levels.
The municipal and city chapters of the liga shall be composed
of the barangay representatives of municipal and city
barangays, respectively. The duly elected presidents of
component municipal and city chapters shall constitute the

provincial chapter or the metropolitan political subdivision

chapter. The duly elected presidents of highly-urbanized cities,
provincial chapters, the Metropolitan Manila chapter and
metropolitan political subdivision chapters shall constitute the
National Liga ng mga Barangay.
493. Organization. The liga at the
municipal, city, provincial, metropolitan political
subdivision, and national levelsdirectly elect a president, a vicepresident, and five (5) members of the board of directors. The
board shall appoint its secretary and treasurer and create such
other positions as it may deem necessary for the management
of the chapter. A secretary-general shall be elected from
among the members of the national liga and shall be charged
with the overall operation of the liga on the national level. The
board shall coordinate the activities of the chapters of the liga.
(Emphasis added)

While the board of directors of a local chapter can create additional

positions to provide for the needs of the chapter, the board of directors
of the National Liga must be deemed to have the power to create
additional positions not only for its management but also for that of all
the chapters at the municipal, city, provincial and metropolitan political
subdivision levels. Otherwise the National Liga would be no different
from the local chapters. There would then be only so many local
chapters without a national one, when what is contemplated in the

above-quoted provisions of the LGC is that there should be one Liga ng

mga Barangay with local chapters at all levels of local government
units. The dissent, by denying to the board of directors at the National
Liga the power to create additional positions in the local chapters,
would reduce such board to a board of a local chapter. The fact is that
493 grants the power to create positions not only to the boards of the
local chapters but to the board of the Liga at the national level as well.
Indeed what was done in the Constitution and By-laws of their liga was
to create additional positions in each chapter, whether national or
local, without however precluding the boards of directors of the
chapters as well as that of the national liga from creating other
positions for their peculiar needs. The creation by the board of the
National Liga of the positions of first, second and third vice presidents,
auditors and public relations officers was intended to provide uniform
officers for the various chapters in line with the mandate in Art.
210(g)(2) of the Rules and Regulations Implementing the Local
Government Code of 1991 to the Barangay National Assembly to
"formulate uniform constitution and by-laws applicable to the national
liga and all local chapters." The various chapters could have different
minor officers depending on their local needs, but they must have the
same major elective officers, meaning to say, the additional vice
presidents and auditors.

prcd

The dissent further argues that, following the rule of ejusdem generis,
what may be created as additional positions can only be appointive
ones because the positions of secretary and treasurer are appointive

positions. The rule might apply if what is involved is

the appointment of other officers. But what we are dealing with in this
case is the creation of additional positions. Section 493 actually gives
the board the power to "[1] appoint its secretary and treasurer and
[2] create such other positions as it may deem necessary for the
management of the chapter." The additional positions to be created
need not therefore be appointive positions.
Nor is it correct to say that 493, in providing that additional positions
to be created must be those which are "deemed necessary for
the management of the chapter," contemplates only appointive
positions. Management positions are not necessarily limited to
appointive positions. Elective officers, such as the president and vice
president, can be expected to be involved in the general administration
or management of the chapter. Hence, the creation of other elective
positions which may be deemed necessary for the management of the
chapter is within the purview of 493.
WHEREFORE, the petition for prohibition is DISMISSED for lack of
merit.
SO ORDERED.
Narvasa, C .J ., Padilla, Regalado, Bellosillo, Melo, Puno, Kapunan,
Francisco and Hermosisima, Jr., JJ ., concur.
Torres, Jr., J ., took no part; on leave during deliberations.

Separate Opinions

DAVIDE, JR., J ., dissenting:

In light of the disclosure in the revised ponencia that the creation of
the questioned additional positions of Executive Vice-President, First,
Second and Third Vice-Presidents, and Auditor, embodied in Article III
of the Revised Implementing Rules and Guidelines for the General
Elections of Liga ng Mga Barangay Officers was made by way of the
Constitution and By-Laws adopted by the First Barangay National
Assembly on 11 January 1994, the ultimate issue then to be resolved
is whether or not the Barangay Assembly is empowered to create said
additional positions.
Section 493 of the Local Government Code of 1991 (LGC) specifically
provides as follows:
493. Organization. The liga at the municipality, city,
provincial, metropolitan political subdivision, and national levels
directly elect a president, a vice-president, and five (5)
members of the board of directors. The board shall appoint its
secretary and treasurer and create such other positions as it
may deem necessary for the management of the chapter. A
secretary-general shall be elected from among the members of
the national liga and shall be charged with the overall operation
of the liga on the national level. The board shall coordinate the
activities of the chapters of the liga. (Emphasis supplied).

Article VI of the Constitution and By-Laws of the Liga ng Mga Barangay

provides as follows:

ARTICLE VI
OFFICERS AND DIRECTORS
Section 1. Organization of Board of Directors of Local Chapters.
The chapter shall directly elect their respective officers,
namely a president; executive vice president; first, second, and
third vice presidents; auditor; and five (5) members to
constitute the Board of Directors of their respective
chapter. Thereafter, the Board shall appoint a
secretary, treasure, and public relations officer from among the
five (5) members, with rest serving as Directors of Board. The
Board may create such other positions as it may deem
necessary for the management of the chapter. Pending
elections of the president of the municipality, city, provincial
and metropolitan chapters of the Liga, the incumbent
presidents of the ABCs of the municipality, city, province and
Metropolitan Manila shall continue to act as presidents of the
corresponding Liga chapters, subject to the provisions of the
Local Government Code of 1991.
Section 2. Organization of Board of Directors of the National
Liga. The National Liga shall be composed of the presidents
of the provincial Liga chapters, highly urbanized and
independent component city chapters, and the metropolitan
chapter who shall directly elect their respective officers,
namely, a president, executive vice

president; first, second, and third vice

presidents,auditor, secretary general; and five (5) members to
constitute the Board of Directors of the National
Liga. Thereafter, the Board shall appoint a treasurer, secretary
and public relations officers from among the five (5) members
with the rest serving as directors of the Board. The Board may
create such other positions as it may deem necessary for the
management of the National Liga. Pending election of
Secretary-General, the incumbent president of the Pambansang
Katipunan ng mga Barangay (PKB) shall act as the SecretaryGeneral. The incumbent members of the Board of the PKB,
headed by the Secretary-General who continue to be
presidents of the respective chapters of the Liga to which they
belong, shall constitute a committee to exercise the powers
and duties of the National Liga and with the primordial
responsibility of drafting a Constitution and By-Laws needed for
the organization of the Liga as a whole pursuant to the
provisions of the Local Government Code of 1991. (Emphasis
supplied).

Sections 1 and 2 of Article III of the Revised Implementing Rules and

Guidelines for the General Elections of Liga ng Mga Barangay Officers
read as follows:
1. Local Liga Chapters. The Municipal City Metropolitan and
Provincial Chapters shall directly elect the following officers and

directors to constitute their respective Board of Directors,

namely:
1.1 President
1.2 Executive Vice-President
1.3 First Vice-President
1.4 Second Vice-President
1.5 Third Vice-President
1.6 Auditor
1.7 Five (5) Directors
2. National Liga. The National Liga shall directly elect the
following officers and directors to constitute the National Liga
Board of Directors namely:
2.1 President
2.2 Executive Vice-President
2.3 First Vice-President
2.4 Second Vice-President
2.5 Third Vice-President

2.6 Secretary General

2.7 Auditor

2.8 Five (5) Directors

To implement Section 493 of the Local Government Code, Article

211(f) of the Rules and Regulations Implementing the Local
Government Code of 1991 provides:
(f) Organizational Structure
(1) The national liga and its local chapters shall directly
elect their respective officers, namely: a
president, vice president, and five (5) members of
the board of directors. The board shall appoint its
secretary and treasurer and create such other
positions as it may deem necessary for the
management of the chapter. Pending election of
presidents of the municipal, city, provincial, and
metropolitan chapters of the liga, the incumbent
presidents of the association of barangay councils
in the municipality, city, province, and Metropolitan
Manila shall continue to act as presidents of the
corresponding chapters under this Rule. (Emphasis
supplied).
(2) A secretary-general shall be elected from among the
members of the national liga who shall be
responsible for the overall operation of the liga.
Pending election of a secretary-general under this
rule, the incumbent president of the pambansang

katipunan ng mga barangay shall act as the

secretary-general. This incumbent members of the
board of the pambansang katipunan ng mga
barangay, headed by the secretary-general, who
continue to be presidents of the respective chapters
of the liga to which they belong, shall constitute a
committee to exercise the powers and duties of the
national liga and draft or amend the constitution
and by-laws of the national liga to conform to the
provisions of this Rule.

cdpr

(3) The board of directors shall coordinate the activities

of the various chapters of the liga.

It may readily be observed that Section 493 of the LGC and Article
211(f) of the Implementing Rules are clear that the officers of the
national liga and its local chapters are: (1) the President, (2) Vice
President and (3) five (5) members of the Board of Directors. In turn,
it is the Board of Directors which appoints the secretary and treasurer
and is empowered to "create such other positions as it may deem
necessary for the management of the chapter concerned." It is,
therefore, unequivocally clear that only the Board of Directors and
not any other body which is vested with the power to create other
positions as may be necessary for the management of the chapter.
The ponencia maintains that since the questioned positions were
provided for in the Constitution and By-Laws of the Liga ng Mga

Barangay adopted during its First Barangay National Assembly on 11

January 1994, then such additional positions "were as much the
creations of the local chapters as of the national league. The
barangays themselves, through the constitution and by-laws of their
liga, created the additional positions without precluding the boards of
directors of the chapters as well as that of the national liga from
creating other positions."
I beg to differ. In the first place, I am unable to find any provision of
the LGC creating or establishing the Barangay National Assembly.
What the LGC has created is the Liga ng Mga Barangay (Sec. 491)
with local chapters at the municipal, city, provincial and metropolitan
subdivision levels (Sec. 492). Under the Implementing Rules of
the LGC (Art. 211[c][4]), the National Liga Ng Mga Barangay is
composed of the duly elected presidents of highly urbanized city
chapters, provincial chapters and metropolitan chapters.
Pursuant to Article 211[f][2] of the Implementing Rules, the members
of the Board of the Pambansang Katipunan ng Mga Barangay, headed
by the Secretary-General, were constituted into a committee to
exercise the powers and duties of the national liga and draft or amend
the Constitution and By-Laws of the Liga. There is at all no showing
that this committee was the so-called First Barangay National
Assembly which convened on 11 January 1994.
Second, even assuming that the committee was the so-called First
Barangay National Assembly of 11 January 1994, said committee was

not authorized to create, by virtue of the Constitution and By-Laws it

enacted additional positions for the national liga and the liga at the
local levels. The aforementioned Article 211(g), limits the powers of
this committee, as follows:
(g) Constitution and By-Laws of the Liga
(1) All other matters not provided under this Rule
affecting the internal organization of the liga shall
be governed by its constitution and by-laws, unless
inconsistent with the Constitution and applicable
laws, rules and regulations.
(2) The committee created in this Article shall formulate
uniform constitution and by-laws applicable to the
national liga and all local chapters. The committee
shall convene the national liga to ratify the
constitution and by-laws within six (6) months from
issuance of these Rules.

Note that the constitution and by-laws which the committee may enact
must not be inconsistent with . . . "applicable laws, rules and
regulations." Of course, one of the laws that come to mind is the LGC
of 1991 and the rules and regulations could nothing be than the Rules
Implementing the Local Government Code of 1991. It goes without
saying that the LGC and its Implementing Rules must perforce be
heeded. It bears repeating that as they stand, Section 493 of the LGC
and Article 211(f) of the Implementing Rules limit the officers to the:

President, Vice President and the board of directors composed of five

(5) members. The latter then appoints a secretary and a treasurer and
may create such other positions as it may deem necessary for the
management of the chapter. Plainly, neither the LGC nor the
Implementing Rules authorizes any person or entity, other than the
Board of Directors, to create additional positions.
Third, it would be a clear case of judicial legislation to declare that
since the additional positions were created in the Constitution and ByLaws of the Liga ng Mga Barangay, then they "were as much as the
creations of the local chapters as of the national league." This runs
afoul of Section 493 of the LGC which vests the power to create
additional positions only in the Board of Directors of the chapter.
The claim in the ponencia that the creation of additional positions in
the Constitution and By-Laws does not preclude the board of directors
of the chapter as well as that of the national liga from creating other
positions, is inconsistent with the earlier proposition that such new
positions "were as much the creations of the local chapters and the
league" and the further justification proffered that the creation of the
national positions "was intended to provide uniform officers for the
various chapters and the national liga was in line with the mandate of
the assembly to 'formulate uniform constitution and by-laws applicable
to the national liga and all local chapters.'" If this were so, then the
chapters are barred from creating additional positions other than those
created in the Constitution and By-Laws of the Liga ng Mga Barangay.

Finally, it may likewise be observed that Section 493 merely allows the
creation of other appointive positions "as it may deem necessary for
the management of the chapter." I lay stress on the term "appointive,"
in light of the clause preceding the grant of the power, which reads:
"The board shall appoint its secretary and treasurer. Following the rule
of ejusdem generis in statutory construction, the "other positions"
which may be created must be of the same category, viz.,
APPOINTIVE, as that of secretary and treasurer. These other positions
may then be that of an assistant secretary, assistant
treasurer, auditor, public relations officer, or information officer, or
even a sergeant-at-arms. Further, under Section 493, the new
positions which may be created are those "deemed necessary for
the management of the chapter," which may only pertain to the dayto-day business and affairs of the liga chapter, and not to policy
formulation which may be exercised by the executive officers and
Board of Directors. In short, the section does not empower the local
liga to create elective positions other than that of President, VicePresident and Board of Directors.
For the foregoing reasons, I vote to declare void, for lack of legislative
authority Sections 1 and 2 of Article III of the Implementing Rules and
Guidelines for the General Elections of the Liga ng Mga Barangay
Officers, and Sections 1 and 2 of Article VI of the Constitution and ByLaws of the Liga ng Mga Barangay, insofar as they relate to the
creation of the positions of executive vice president, first, second and
third vice-presidents, and auditor.

cdtai

Romero, Vitug and Panganiban, JJ ., concur.

(Viola v. Alunan III, G.R. No. 115844, [August 15, 1997], 343 PHIL
184-204)
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