National Housing Corp. v.

Juco
Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

National Housing Corp. v. Juco

134 SCRA 172 (1985)

Applicability of Article 6

Facts:
Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/ MOLE but his case was dismissed by
the labor arbiter on the ground that the NHA is a govt-owned corp. and jurisdiction over its employees is vested in the
CSC. On appeal, the NLRC reversed the decision and remanded the case to the labor arbiter for further proceedings.
NHA in turn appealed to the SC.

Issue:

Are employees of the National Housing Corporation, a GOCC without original charter, covered by the Labor Code or
by laws and regulations governing the civil service.

Held:

Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every branch, agency,
subdivision and instrumentality of the Government, including every government owned and controlled
corporation.The inclusion of GOCC within the embrace of the civil service shows a deliberate effort at the framers to
plug an earlier loophole which allowed GOCC to avoid the full consequences of the civil service system. All offices
and firms of the government are covered.

This consti provision has been implemented by statute PD 807 is unequivocal that personnel of GOCC belong to the
civil service and subject to civil service requirements."Every" means each one of a group, without exception. This
case refers to a GOCC. It does not cover cases involving private firms taken over by the government in foreclosure or
similar proceedings.

For purposes of coverage in the Civil Service, employees of govt- owned or controlled corps. whether created by
special law or formed as subsidiaries are covered by the Civil Service Law, not the Labor Code, and the fact that pvt.
corps. owned or controlled by the govt may be created by special charter does not mean that such corps. not created
by special law are not covered by the Civil Service.

The infirmity of the resp's position lies in its permitting the circumvention or emasculation of Sec. 1, Art. XII-B [now Art
IX, B, Sec. 2 (1)] of the Consti. It would be possible for a regular ministry of govt to create a host of subsidiary corps.
under the Corp. Code funded by a willing legislature. A govt-owned corp. could create several subsidiary corps.
These subsidiary corps. would enjoy the best of two worlds. Their officials and employees would be privileged
individuals, free from the strict accountability required by the Civil Service Dec. and the regulations of the COA. Their
incomes would not be subject to the competitive restraint in the open market nor to the terms and conditions of civil
service employment.

Conceivably, all govt-owned or controlled corps. could be created, no longer by special charters, but through incorp.
under the general law. The Constitutional amendment including such corps. in the embrace of the civil service would
cease to have application. Certainly, such a situation cannot be allowed.
DANTE V. LIBAN, et al. v. RICHARD J. GORDON

FACTS: Respondent filed a motion for partial recommendation on a Supreme Court

decision which ruled that being chairman of the Philippine National Red Cross (PNRC)
did not disqualify him from being a Senator, and that the charter creating PNRC is
unconstitutional as the PNRC is a private corporation and the Congress is precluded by
the Constitution to create such.The Court then ordered the PNRC to incorporate itself
with the SEC as a private corporation. Respondent takes exception to the second part
of the ruling, which addressed the constitutionality of the statute creating the PNRC as a
private corporation. Respondent avers that the issue of constitutionality was only
touched upon in the issue of locus standi. It is a rule that the constitutionality will not be
touched upon if it is not the lis mota of the case. ADVERTISEMENT: Work from home!
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ISSUE:

Was it proper for the Court to have ruled on the constitutionality of the PNRC
statute?
HELD: In the case at bar, the constitutionality of the PNRC statute was raised in the
issue of standing. As such, the Court should not have declared certain provisions of
such as unconstitutional. On the substantive issue, the PNRC is sui generis. It is unlike
the private corporations that the Constitution wants to prevent Congress from creating.
First, the PNRC is not organized for profit. It is an organization dedicated to assist
victims of war and administer relief to those who have been devastated by calamities,
among others. It is entirely devoted to public service. It is not covered by the prohibition
since the Constitution aims to eliminate abuse by the Congress, which tend to favor
personal gain. Secondly, the PNRC was created in order to participate in the mitigation
of the effects of war, as embodied in the Geneva Convention. The creation of the PNRC
is compliance with international treaty obligations. Lastly, the PNRC is a National
Society, an auxiliary of the government. It is not like government instrumentalities and
GOCC. The PNRC is regulated directly by international humanitarian law, as opposed
to local law regulating the other mentioned entities. As such, it was improper for the
Court to have declared certain portions of the PNRC statute as unconstitutional.
However, it is the stand of Justice Carpio that there is no mandate for the Government
to create a National Society to this effect. He also raises the fact that the PNRC is not
sui generis in being a private corporation organized for public needs. Justice Abad is of
the opinion that the PNRC is neither private or governmental, hence it was within the
power of Congress to create.

It has been consistently held in Jurisprudence that the Court should exercise
judicial restraint when it comes to issues of constitutionality where it is not the lis
mota of the case.
ALU-TUCP vs. NLRC and NSC [G.R. No. 109902.
August 02, 1994]
FACTS:
[P]etitioners, as employees of private respondent National Steel Corporation (NSC), filed separate
complaints for unfair labor practice, regularization and monetary benefits with the NLRC, Sub-Regional
Arbitration Branch XII, Iligan City. The complaints were consolidated and after hearing, the Labor Arbiter
declared petitioners regular project employees who shall continue their employment as such for as long
as such [project] activity exists, but entitled to the salary of a regular employee pursuant to the provisions
in the collective bargaining agreement. It also ordered payment of salary differentials.
The NLRC in its questioned resolutions modified the Labor Arbiters decision. It affirmed the Labor
Arbiters holding that petitioners were project employees since they were hired to perform work in a
specific undertaking the Five Years Expansion Program, the completion of which had been determined
at the time of their engagement and which operation was not directly related to the business of steel
manufacturing. The NLRC, however, set aside the award to petitioners of the same benefits enjoyed
by regular employees for lack of legal and factual basis.
The law on the matter is Article 280 of the Labor Code, where the petitioners argue that they are regular
employees of NSC because: (i) their jobs are necessary, desirable and work-related to private
respondents main business, steel-making; and (ii) they have rendered service for six (6) or more years
to private respondent NSC.

ISSUE:
Whether or not petitioners are considered permanent employees as opposed to being only project
employees of NSC.

HELD:
NO. Petition for Certiorari dismissed for lack of merit. NLRC Resolutions affirmed.

RATIO:
Function of the proviso. Petitioners are not considered permanent employees. However, contrary to
petitioners apprehensions, the designation of named employees as project employees and their
assignment to a specific project are effected and implemented in good faith, and not merely as a means
of evading otherwise applicable requirements of labor laws.
On the claim that petitioners service to NSC of more than six (6) years should qualify them as regular
employees, the Supreme Court believed this claim is without legal basis. The simple fact that the
employment of petitioners as project employees had gone beyond one (1) year, does not detract from, or
legally dissolve, their status as project employees. The second paragraph of Article 280 of the Labor
Code, quoted above, providing that an employee who has served for at least one (1) year, shall be
considered a regular employee, relates to casual employees, not to project employees.
MIAA vs City of Pasay
G.R. No. 163072

MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner,

CITY OF PASAY, SANGGUNIANG PANGLUNGSOD NG PASAY, CITY MAYOR OF PASAY, CITY
TREASURER OF PASAY, and CITY ASSESSOR OF PASAY, Respondents.

Petitioner Manila International Airport Authority (MIAA) operates and administers the Ninoy Aquino
International Airport (NAIA) Complex under Executive Order No. 903 (EO 903), otherwise known as the
Revised Charter of the Manila International Airport Authority. EO 903 was issued on 21 July 1983 by then
President Ferdinand E. Marcos. Under Sections 3 and 22 of EO 903, approximately 600 hectares of land,
including the runways, the airport tower, and other airport buildings, were transferred to MIAA. The NAIA
Complex is located along the border between Pasay City and Paraaque City.

On 28 August 2001, MIAA received Final Notices of Real Property Tax Delinquency from the City of
Pasay for the taxable years 1992 to 2001. The City of Pasay, through its City Treasurer, issued notices of
levy and warrants of levy for the NAIA Pasay properties. MIAA received the notices and warrants of levy
on 28 August 2001.

Issue
Whether the NAIA Pasay properties of MIAA are exempt from real property tax.

Held:

In Manila International Airport Authority v. Court of Appeals (2006 MIAA case), this Court already
resolved the issue of whether the airport lands and buildings of MIAA are exempt from tax under existing
laws. The 2006 MIAA case originated from a petition for prohibition and injunction which MIAA filed with
the Court of Appeals, seeking to restrain the City of Paraaque from imposing real property tax on,
levying against, and auctioning for public sale the airport lands and buildings located in Paraaque City.
The only difference between the 2006 MIAA case and this case is that the 2006 MIAA case involved
airport lands and buildings located in Paraaque City while this case involved airport lands and buildings
located in Pasay City. The 2006 MIAA case and this case raised the same threshold issue: whether the
local government can impose real property tax on the airport lands, consisting mostly of the runways, as
well as the airport buildings, of MIAA. In the 2006 MIAA case, this Court held:

To summarize, MIAA is not a government-owned or controlled corporation under Section 2(13) of

the Introductory Provisions of the Administrative Code because it is not organized as a stock or non-stock
corporation. Neither is MIAA a government-owned or controlled corporation under Section 16, Article XII
of the 1987 Constitution because MIAA is not required to meet the test of economic viability. MIAA is a
government instrumentality vested with corporate powers and performing essential public services
pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a government
instrumentality, MIAA is not subject to any kind of tax by local governments under Section 133(o) of the
Local Government Code. The exception to the exemption in Section 234(a) does not apply to MIAA
because MIAA is not a taxable entity under the Local Government Code. Such exception applies only if
the beneficial use of real property owned by the Republic is given to a taxable entity.
Ernesto Hidalgo vs President
Ferdinand Marcos
80 SCRA 538 Political Law Constitutional Law Presidents Immunity From Suit
In December 1977, a referendum was scheduled to be held. The purpose of which was to
merge the office of the Prime Minister and the Office of the President. At that time, Marcos
was serving as the president and at the same time he was wielding legislative powers. The
referendum was to ask the people whether or not they still want Marcos to serve as the
president (and at the same time Prime Minister) after an interim Batasan Pambansa will be
organized. Ernesto Hidalgo filed a petition for prohibition and mandamus before the
Supreme Court to enjoin COMELEC and the president from proceeding with the said
referendum as he averred that the referendum will effectively amend the C0nstitution, which
he says is unconstitutional and improper.
ISSUE: Whether or not the president can be sued and compelled through a mandamus by
the SC.
HELD: The Supreme Court did not pass upon the issue of the suability of the Presisent in
thsi case considering that the COMELEC, the body tasked to implement the referendum,
was impleaded.
The SC however ruled that the referendum is valid and that the same will merely ask the
people if they want Marcos to stay in power or not and that the referendum will not amend
the Constitution as Hidalgo avers.
Ang vs PNB

G.R. No. 178762 June 16, 2010

LUZVIMINDA A. ANG, Petitioner,

vs.

PHILIPPINE NATIONAL BANK, Respondent.

Facts:

This case is about the dismissal of an employee for offenses committed during her employment in a
government-owned corporation but which offenses were discovered after the privatized corporation
rehired her to work for it. Peitioner Ang claimed that respondent PNB, then a government-owned
corporation, hired her as a probationary clerk. But she rose from the ranks, eventually becoming an
Assistant Department Manager, a position she held when the PNB was privatized and when she, like her
co-employees, was deemed automatically retired. PNB administratively charged her with serious
misconduct and willful breach of trust for taking part in a scam, called "kiting operation," where a
depositor used a conduit bank account for depositing several unfunded checks drawn against the same
depositors other current accounts and from which conduit bank account he later withdrew those
checks. PNB heaped other charges against Ang of serious misconduct and gross violation of the banks
rules and regulations wherein she issued six certificates of deposit in amounts exceeding the true
deposit balance of various depositors, issued two bank commitments for providing a credit line in favor
of a government contractor without authority, committed tardiness and "under time. In the answer to
the charge Ang claimed that it was not a "kiting operation," but an accommodation of a very valued
client and the issuance of the certificates had been a marketing strategy and prevent their valued clients
to move to other banks. Ang also

claimed that she was not covered by the circular governing office hours because she was a bank officer.
Managerial employees, according to her, worked beyond the usual eight hours and even worked on
Saturdays and Sundays. She added that, since the bank had already made deductions for tardiness on
her pay check, she cannot anymore be administratively charged for it. Ang further pointed out that the
causes for her termination took place when she was yet a government official. The PNB had since ceased
to be government-owned. If she were to be charged for those causes, the jurisdiction over her case
would lie with the Civil Service Commission. Even then, since she already retired from the government
service, the employment that could be terminated no longer existed. Ang filed complaint against illegal
dismissal, illegal deductions, non-payment of 13th month pay, allowances, separation pay, and
retirement benefits with prayer for payment of moral and exemplary damages, attorneys fees, and
litigation expenses. The Labor Arbiter found PNBs dismissal of Ang illegal for failure to show that the
dismissal was for a valid cause and after notice and hearing. Specifically, the PNB failed to prove any
basis for loss of trust. The NLRC deleted the award of damages because of absence of bad faith on the
part of the PNB officers but maintained the LAs finding that the PNB had not proved loss of trust as a
ground for dismissal. The Court of Appeals found a valid reason to uphold Angs dismissal from the
service for willful breach of the trust reposed in her by the PNB.

Issue: Whether or not there was willful breach of trust and confidence.

Held:

Yes. Ang claims that her dismissal by PNB, the private corporation, was illegal since she had
committed no offense under its employ. The offense for which she was removed took place when the
government still owned PNB and she was then a government employee. But while PNB began as a
government corporation, it did not mean that its corporate being ceased and was subsequently
reestablished when it was privatized. It remained the same corporate entity before, during, and after
the change over with no break in its life as a corporation.

Consequently, the offenses that Ang committed against the bank before its privatization continued to be
offenses against the bank after the privatization. But, since the PNB was already a private corporation
when it looked into Angs offenses, the provisions of the Labor Code governed its disciplinary action. The
PNB rightfully separated her from work for willful breach of the trust that it reposed in her under the
Labor Code. Her defense that the PNB did not suffer any loss is of no moment. The focal point is that she
betrayed the trust of the bank in her fidelity to its interest and rules.
Pinero vs Hechanova GR No. L-22562 1966

Petitioners: Pinero et. al.

Respondents: Hechanova, Acting Sec of Finance

Facts: State appealed the decision of the CFI of Manila ordering that the respondents to
reinstate the petitioners to their respective positions in the Customs Patrol Service with payment
of their back salaries and ousting those who replaced them.

The 32 petitioners were employees of the Port Patrol division in the Bureau of Customs. On
various dates between first week of December 1962 to the last week of January 1963, the
petitioners were ordered dismissed or separated from the Bureau based on the ground that the
respondent had lost confidence in them.

After dismissal, the petitioners individually and collectively demanded for their immediate
reinstatement. Since their demands were unheeded, the petitioners went to Court.

CFI said that under Consti (Art XII, Sec 4) and Civil Service Law (RA 2260) the petitioners cant
be dismissed or removed from positions without cause or due hearing, even if the positions are
primarily confidential (as contended by the Customs and Finance authorities) since the Civil
Service Law protects not just those who belong to the classified service but also to the
unclassified service.

W/N claimants may be dismissed without cause or hearing for lack of confidence, since the
positions they occupy are primarily confidential as declared by EO 397 (1941) and EO 94
(1947)

No.

SC said that what the EO says doesnt matter, since at the time under the Civil Service Act of
1959 (RA 2260) Section 5, what ultimately determines whether an administrative position is
primarily confidential, policy determining or highly technical is the nature of the functions
attached to the position.

Legislative history of RA 2260 in the Senate:

 Sec 5 was originally worded as composed of positions expressly declared by law
Sen. Tanada said that it should not be within the power of Congress to declare what positions
are primarily confidential or policy determining
It should be the appointing power that first determines the nature of the position, and in case
of conflict the Court

SO - it is the nature of the position that determines whether a position is primarily confidential,
policy determining or highly technical. Executive pronouncements are initial determinations that
are not conclusive in case of conflict.

Why is it important to determine if the position is primarily confidential? If its primarily

confidential, then there is no security of tenure.

No data as to the functions of the members of Port Patrol, but this doesnt immediately mean
that the position is primarily confidential. However, it also seems improbable that the service
demands such close trust and intimate relations between the appointing official and the entire
customs patrol force, in that every member holds primarily confidential posts.

SC concludes that the positions held by the appellees were not confidential in nature which
would make their terms of office co-terminal with the confidence given in them. This means that
the appellees were not subject to dismissal or removal except for cause specified by law and
with due process.

W/N the removal of petitioners is discretionary upon the Secretary of Finance, as provided in
EO 397 (1941) which supplements EO 94 (1947) Sec 53.

No. Number one, EO 94 were specifically enacted for the administrative services of the
independent Republic and EO 397 were enacted for services under the Commonwealth.
Number two, they were repealed by Sec 45 of Civil Service Law. Number three, even if they
were in force, the discretionary removal of the appellees were not authorized by EO 94

W/N the appellees possess civil service eligibility appropriate for the positions they were
holding.

SC cant rule on this issue since it was first invoked in the SC on appeal and thats not allowed -
should have invoked this question in the lower court. Besides, the appellees who were issued
permanent appointments (there were 3) have the presumption of regularity to them. Even with
those who held only provisional or probationary appointments could not have their appointments
invalidated unless it is shown that there were eligible appointees (other than the ineligible ones)
during the time of their appointment. The matter of eligibility should be threshed out in an
appropriate proceeding.

RULING: Appealed decision is affirmed.

CSC vs Salas
CSC v. Salas
G.R. No. 123708, June 19, 1997

Facts: On October 7, 1989, respondent Salas was appointed by the PAGCOR Chairman as Internal Security Staff
(ISS) member and assigned to the casino at the Manila Pavilion Hotel. However, his employment was terminated by
the Board of Directors of PAGCOR on December 3, 1991, allegedly for loss of confidence, after a covert investigation
conducted by the Intelligence Division of PAGCOR. The summary of intelligence information claimed that respondent
was allegedly engaged in proxy betting as detailed in the affidavits purportedly executed by two customers of
PAGCOR who claimed that they were used as gunners on different occasions by respondent. The two polygraph
tests taken by the latter also yielded corroborative and unfavorable results.

On December 23, 1991, he submitted a letter of appeal to the Chairman and the Board of Directors of PAGCOR,
requesting reinvestigation of the case since he was not given an opportunity to be heard, but the same was denied.
On February 17, 1992, he appealed to the Merit Systems Protection Board (MSPB) which denied the appeal on the
ground that, as a confidential employee, respondent was not dismissed from the service but his term of office merely
expired. On appeal, the CSC issued Resolution No. 92-1283 which affirmed the decision of the MSPB.

On September 14, 1995, the Court of Appeals rendered its questioned decision with the finding that herein
respondent Salas is not a confidential employee, hence he may not be dismissed on the ground of loss of confidence.
In so ruling, the appellate court applied the "proximity rule" enunciated in the case of Grio, et al. vs. Civil Service
Commission, et al.

Issue: Whether Section 16 of the PD No. 1869 has been superseded and repealed by Section 2(1), Article IX-B of
the 1987 Constitution?

Held: The Court of Appeals opined that the provisions of Section 16 of Presidential Decree No. 1869 may no longer
be applied in the case at bar because the same is deemed to have been repealed in its entirety by Section 2(1),
Article IX-B of the 1987 Constitution. This is not completely correct. On this point, we approve the more logical
interpretation advanced by the CSC to the effect that "Section 16 of PD 1869 insofar as it exempts PAGCOR
positions from the provisions of Civil Service Law and Rules has been amended, modified or deemed repealed by the
1987 Constitution and Executive Order No. 292 (Administrative Code of 1987)".

However, the same cannot be said with respect to the last portion of Section 16 which provides that "all employees of
the casino and related services shall be classified as 'confidential appointees.'" While such executive declaration
emanated merely from the provisions of Section 2, Rule XX of the implementing rules of the Civil Service Act of 1959,
the power to declare a position as policy-determining, primarily confidential or highly technical as defined therein has
subsequently been codified and incorporated in Section 12(9), Book V of Executive Order No. 292 or the
Administrative Code of 1987. This later enactment only serves to bolster the validity of the categorization made under
Section 16 of Presidential Decree No. 1869. Be that as it may, such classification is not absolute and all-
encompassing.

Thus, the aforecited case was decided on the uncontested assumption that the private respondent therein was a
confidential employee, for the simple reason that the propriety of Section 16 of Presidential Decree No. 1869 was
never controverted nor raised as an issue therein.

That decree was mentioned merely in connection with its provision that PAGCOR employees hold confidential
positions. Evidently, therefore, it cannot be considered as controlling in the case at bar. Even the fact that a statute
has been accepted as valid in cases where its validity was not challenged does not preclude the court from later
passing upon its constitutionality in an appropriate cause where that question is squarely and properly raised. Such
circumstances merely reinforce the presumption of constitutionality of the law.

Court of Appeals - G.R. SP No. 38319 set aside Resolution No. 92-1283 of the Civil Service Commission (CSC) and
ordered the reinstatement of herein private respondent Rafael M. Salas with full back wages for having been illegally
dismissed by the Philippine Amusement and Gaming Corporation (PAGCOR), but without prejudice to the filing of
administrative charges against him if warranted.
G.R. No. 190147, March 5, 2013
CIVIL SERVICE COMMISSION, Petitioner, vs. PILILLA WATER DISTRICT, Respondent.

EFFECTS OF THE DECISION

1. The position of GMs are at the pleasure of the Board, in spite of RA 9286 which
provides that the GM cannot be removed from office except for cause and after due
process.
2. The GMs holds a primarily confidential position and cause in Section 23 of PD 198
as amended by RA 9286 includes loss of trust and confidence
3. Section b, Section 12, Rule XIII of CSC MC No. 15, s. 1999 provides that a person who
reached the compulsory age of 65 can still be appointed to a coterminous/primarily
confidential position in the government. Thus, the GM, being a holder of a
confidential position, may be reappointed even after he reaches the compulsory
retirement age of 65
4. A GM who is appointed on a coterminous status may serve or hold office for a
maximum of six years unless removed by the BOD for loss of trust and confidence,
or for any cause provided by law and with due process.
5. The position of General Manager is classified as non-career position
notwithstanding the classification made by the CSC.

QUICK DIGEST

Section 23 of P.D. 198 expressly provides that the general manager shall serve at the
pleasure of the Board of Directors. But Republic Act No. 9286 passed on 2004 amended
said provision and now provides that the general manager shall not be removed from office,
except for cause and after due process. The Civil Service Commission interpreted this
amendment as placing the position of the general manager of a water district from non-
career service to the category of career service. Accordingly, the Civil Service Commission
issued CSC MC No. 13, Series of 2006 where it prescribed the guidelines for the
implementation of the amending law and set the qualifications for the position.

In rejecting the interpretation of the CSC, the Supreme Court pointed out that the nature of
the work of the general manager and the character of his professional relation with the
Board of Directors show that said manager is still primarily confidential employee in
keeping with the proximity rule. Thus, he will hold office as such as long as he enjoys the
confidence of the Board. In its decision, the High Court underscores the general manager
falls under the non-career service category.

According to the Supreme Court, the amendment made by RA 9286 merely tempered the
wide discretion of the Board of Directors in removing the general manager even without
notice and hearing. The only effect of the amendment is that the general manager, although
he remains a confidential employee whose term is co-terminous with the appointing
authority unless sooner removed on causes provided by law including loss of confidence on
the part of the appointing authority, can no longer be removed by the Board of Directors
without due process.
Dario vs Mison

Facts: When President Cory Aquino came into power, she proceeded to reorganize the government, upon
which Mison, the Commissioner of Customs sent notices of termination to 394 Customs officials. Some
sought reinstatement from the CSC which the latter granted to 279 of them while the others went directly
to the Supreme Court. Mison also filed a petition questioning the decision of the CSC. Also, RA 6656 was
passed, providing that all officers and employees who are found by the Civil Service Commission to have
been separated in violation of the provisions of this Act, shall be ordered reinstated or reappointed. The
validity of this law is also put into question.

Held: All the parties agree on the validity of reorganization per se, leaving the question only on its nature
and extent. Invariably, transition periods are characterized by provisions for "automatic" vacancies. They
are dictated by the need to hasten the passage from the old to th e new Constitution free from the "fetters"
of due process and security of tenure .At this point, we must distinguish removals from separations
arising from abolition of office (not by virtue of the Constitution) as a result of reorganization carried out
by reason of economy or to remove redundancy of functions. In the latter case, the Government is obliged
to prove good faith. In case of removals undertaken to comply with clear and explicit constitutional
mandates, the Government is not obliged to prove anything because the Constitution allows it. Evidently,
the question is whether or not Section 16 of Article XVIII of the 1987 Constitution is a grant of a license
upon the Government to remove career public officials it could have validly done under an "automatic"-
vacancy-authority and to remove them without rhyme or reason.

Simply, the provision benefits career civil service employees separated from the service. And the
separation contemplated must be due to or the result of (1) the reorganization pursuant to Proclamation
No. 3 dated March 25, 1986, (2) the reorganization from February 2, 1987, and (3) the resignations of
career officers tendered in line with the existing policy and which resignations have been accepted. The
phrase "not for cause" is clearly and primarily exclusionary, to exclude those career civil service
employees separated "for cause." In other words, in order to be entitled to the benefits granted under
Section 16 of Article XVIII of the Constitution of 1987, two requisites, one negative and the other positive ,
must concur, to wit:

1. The separation must not be for cause, and

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

By its terms, the authority to remove public officials under the Provisional Constitution ended on
February 25, 1987, advanced by jurisprudence to February 2, 1987. 70 It can only mean, then, that
whatever reorganization is taking place is upon the authority of the present Charter, and necessarily, upon
the mantle of its provisions and safeguards. Hence, it cannot be legitimately stated that we are merely
continuing what the revolutionary Constitution of the Revolutionary Government had started. We are
through with reorganization under the Freedom Constitution - the first stage. We are on the second stage
- that inferred from the provisions of Section 16 of Article XVIII of the permanent basic document. What
must be understood, however, is that notwithstanding her immense revolution ary powers, the President
was, nevertheless, magnanimous in her rule. This is apparent from Executive Order No. 17, which
established safeguards against the strong arm and ruthless propensity that accompanies reorganizations -
notwithstanding the fact that removals arising therefrom were "not for cause," and in spite of the fact that
such removals would have been valid and unquestionable. Noteworthy is the injunction embodied in the
Executive Order that dismissals should be made on the basis of findings of inefficiency, graft, and
unfitness to render public service. Assuming, then, that this reorganization allows removals "not for
cause" in a manner that would have been permissible in a revolutionary setting as Commissioner Mison
so purports, it would seem that the Commissioner would have been powerless, in any event, to order
dismissals at the Customs Bureau left and right. Lastly, reorganizations must be carried out in good faith.
In this case, Mison failed to prove that the reorganization was indeed made in good faith because he hired
more people to replace those that he fired and no legitimate structural changes have been made. To sum
up, the President could have validly removed officials before the effectivity of the 1987 Constitution even
without cause because it was a revolutionary government. However, from the effectivity of the 1987
Constitution, the State did not lose its right to reorganize resulting to removals but such reorganization
must be made in good faith
 Mendoza vs. Quisumbing
NOVEMBER 1, 2010
On Reorganization of Government Offices
G.R. No. 78053; June 4, 1990
En Banc: Gutierrez, Jr. (J), 8 concur
Facts: After the February 1986 political upheaval, the political leadership decided to
proclaim the formation of a revolutionary government headed by President Corazon C.
Aquino. Immediately after the President was sworn into office, she issued Proclamation
No. 1 declaring as policy the reorganization of the government. Thereafter, the President
issued Executive Orders directing the reorganization of various different departments of
the government which affected their employees, among those affected was Francisco
Mendoza.
Petitioner Mendoza was the Schools Division Superintendent of Surigao City who was
reappointed by respondent Quisumbing as such with a "permanent" status. He has served
the Department of Education for forty-two (42) years, moving up the ranks in the public
schools system. Then, the petitioner received the letter-order informing him that he would
be considered separated from the service without prejudice to availment of benefits. The
letter particularly stated that consistent with the mandate of reorganization to achieve
greater efficiency and effectiveness, all incumbent officials/personnel are on 'holdover'
status unless advised otherwise. In the meantime, the petitioner, in a letter wrote Secretary
Quisumbing requesting reconsideration of the letter-order. The letter was forwarded to the
Reorganization Appeals Board (RAB). The motion for reconsideration remained unacted
upon, hence the petitioner filed the instant petition for certiorari, prohibition and
mandamus with preliminary injunction.
Issues: (1) Whether or not the various reorganization programs in different agencies
and/or departments of the government implementing the orders issued pursuant to the
Presidents proclamations were valid, and (2) Whether or not the letter-order of the then
Secretary Quisumbing which terminated his employment as Schools Division
Superintendent of Surigao City was valid.
Ruling: There is no dispute over the authority to carry out a valid reorganization in any
branch or agency of Government. Pursuant to the Provisional Constitution and the various
Executive Orders issued by the President when she was the sole law-making authority, the
different Departments of Government were authorized to carry on reorganization
programs. The grant of authority, however, was accompanied by guidelines and
limitations. It was never intended that department and agency heads would be vested with
untrammelled and automatic authority to dismiss the millions of government workers on
the stroke of a pen and with the same sweeping power determine under their sole
discretion who would be appointed or reappointed to the vacant positions. Reorganization
was mandated by the People to remove "all iniquitous vestiges of the previous regime."
Under this mandate, the mass of lowly employees in the bottom rungs of the governmental
hierarchy, ordinarily constant and apolitical, were not intended to be summarily dismissed
unless basic reasons outweighed or overcame the rights to their jobs built up so laboriously
over the years. The promotion of simplicity, economy and efficiency is the usual standards
which enables a delegation of powers in reorganization statutes to pass the test of validity.
Because the heads of departments and agencies concerned have chosen to rely on their
own concepts of unlimited discretion and progressive ideas on reorganization instead of
showing that they have faithfully complied with the clear letter and spirit of the two
Constitutions and the statutes governing reorganization, the said reorganizations (in these
consolidated petitions) were set aside. The letter-order was also set aside, and the
Secretary of DECS was ordered to restore petitioner Mendoza to his position as Schools
Division Superintendent of Surigao City without loss; of seniority rights and with back
salaries reckoned from the date of his termination.
Dr. Hans Christian Seeres vs
Commission on Elections
585 SCRA 557 Political Law Leadership Disputes Within a Party List Electioneering
Mercantile Law Corporation Law Hold-Over Principle
In 1999, Melquiades Robles was elected president and chairperson of BUHAY, a party-list
group duly registered with the Commission on Elections (COMELEC). The constitution of
BUHAY provides for a three-year term for all its party officers, without re-election. BUHAY
participated in the 2001 and 2004 elections, with Robles as its president. All the required
Manifestations of Desire to Participate in the said electoral exercises, including the
Certificates of Nomination of representatives, carried the signature of Robles as president of
BUHAY. On January 26, 2007, in connection with the May 2007 elections, BUHAY again
filed a Manifestation of its Desire to Participate in the Party-List System of Representation.
As in the past two elections, the manifestation to participate bore the signature of Robles as
BUHAY president.
Dr. Hans Christian Seeres, on the other hand, filed with the COMELEC a Petition to Deny
Due Course to Certificates. In it, Seeres alleged that he was the acting president and
secretary-general of BUHAY, having assumed that position since August 17, 2004 when
Robles vacated the position. Seeres also claim that the nominations made by Robles
(nominations pertaining as to who should represent BUHAY in Congress) were, for lack of
authority, void owing to the expiration of the latters term as party president. Furthermore,
Seeres asserted that Robles was, under the Constitution, disqualified from being an officer
of any political party, the latter being the Acting Administrator of the Light Railway Transport
Authority (LRTA), a government-controlled corporation. Robles, so Seeres would charge,
was into a partisan political activity which civil service members, like the former, were
enjoined from engaging in.
On July 9 and July 18, 2007, respectively, the COMELEC issued two resolutions
proclaiming BUHAY as a winning party-list organization for the May 2007 elections entitled
to three (3) House seats and it also declared Robles as the duly authorized representative
of BUHAY.
ISSUE: Whether or not Robles should be disqualified as president of BUHAY.
HELD: No, Robles is not disqualified as the president of BUHAY. His being the chairman of
LRTA and the president of BUHAY, a party-list group, is not compatible. There is no law
prohibiting that the LRTA chair cannot be a president of a party-list group. Further, Robles is
not guilty of electioneering. Robles act of nominating BUHAY representatives to Congress
is not electioneering. The crime electioneering is clearly defined under Section 79 (b) of the
Omnibus Election Code but Robles did not commit any act defined thereunder.
Anent the issue that Robles term as president of BUHAY already expired when he made
the nominations hence the nominations are void, the Supreme Court ruled that the
nominations are valid. This is because of the Hold-Over doctrine under corporation law. As
a general rule, officers and directors of a corporation hold over after the expiration of their
terms until such time as their successors are elected or appointed. The holdover doctrine
has, to be sure, a purpose which is at once legal as it is practical. It accords validity to what
would otherwise be deemed as dubious corporate acts and gives continuity to a corporate
enterprise in its relation to outsiders.
De Los Santos v Yatco (106 PHIL 745)

Facts:

Petitioner files for certiorari to revoke the order of respondent Judge Yatco for cancelling his
previous order for execution on the parcel of land owned by the petitioner. The said parcel of land is
being occupied by Fernando Mendoez with an agreement to pay in installment the said land to the
petitioners and that he shall voluntarily vacate the land and the payments he previously made shall
be forfeited in favor of the plaintiff. A civil case was filed by the petitioner against Mendoez for
failure to pay as per agreement of both parties. Petitioner later filed a motion for execution to take
the land back. Defendant Mendoez moved for postponement to give both parties sufficient time to
come to an agreement which was allowed by the respondent judge. It was settled by both parties
that Mendoez will secure a GSIS loan however when he was ready to make the payment the
petitioner refused to abide with their agreement and now asking for a higher amount of money for
payment. Finding no justification on the issuance of the writ of execution, Judge Yatco quashed said
order hence this petition for certiorari based on lack of jurisdiction or abuse of discretion.

ISSUE:

Whether or not the respondent judge acted in lack of jurisdiction or abuse of discretion

RULING:

The court held that any judge has the jurisdiction to quash any writ of execution issued by him
especially when it was improvidently issued. There is no abuse of discretion by the judge since the
defendant made an opposition and proved that there is subsequent verbal agreement that amended
the compromise hence the execution cannot be validly decreed without a hearing. The consequent
ability of the defendant to meet his obligations by securing a GSIS loan also justifies the courts
refusal to eject him from the premises by an execution.
Quinto V. COMELEC

COMELEC issued a resolution declaring appointive officials who filed their certificate of candidacy as ipso
facto resigned from their positions.

FACTS:

Petitioners Eleazar P. Quinto and Gerino A. Tolentino, Jr. filed a petition for certiorari and prohibition
against the COMELEC for issuing a resolution declaring appointive officials who filed their certificate of
candidacy as ipso facto resigned from their positions. In this defense, the COMELEC avers that it only copied
the provision from Sec. 13 of R.A. 9369.

ISSUE:

Whether or not the said COMELEC resolution was valid.

HELD:

NO.

In the Farias case, the petitioners challenged Sec. 14 of RA. 9006 repealing Sec. 66 of the Omnibus Election
Code (OEC) for giving undue benefit to elective officials in comparison with appointive officials. Incidentally,
the Court upheld the substantial distinctions between the two and pronounced that there was no violation of
the equal protection clause.

However in the present case, the Court held that the discussion on the equal protection clause was an obiter
dictum since the issue raised therein was against the repealing clause. It didnt squarely challenge Sec. 66.

Sec. 13 of RA. 9369 unduly discriminated appointive and elective officials. Applying the 4 requisites of a
valid classification, the proviso does not comply with the second requirement that it must be germane to
the purpose of the law.

The obvious reason for the challenged provision is to prevent the use of a governmental position to promote
ones candidacy, or even to wield a dangerous or coercive influence of the electorate. The measure is
further aimed at promoting the efficiency, integrity, and discipline of the public service by eliminating the
danger that the discharge of official duty would be motivated by political considerations rather than the
welfare of the public. The restriction is also justified by the proposition that the entry of civil servants to
the electorate arena, while still in office, could result in neglect or inefficiency in the performance of duty
because they would be attending to their campaign rather than to their office work.

Sec. 13 of RA. 9369 pertains to all civil servants holding appointive posts without distinction as to whether
they occupy high positions in government or not. Certainly, a utility worker in the government will also be
considered as ipso facto resigned once he files his certificate of candidacy for the election. This scenario is
absurd for, indeed, it is unimaginable how he can use his position in the government to wield influence in
the political world.

The provision s directed to the activity any and all public offices, whether they be partisan or non partisan in
character, whether they be in the national, municipal or brgy. level. Congress has not shown a compelling
state interest to restrict the fundamental right involved on such a sweeping scale.
SSS Employees Association v Court of Appeals
Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON, RAMON

MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO
AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, BRANCH
98, QUEZON CITY, respondents.

G.R. No. 85279

July 28, 1989

Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages with a prayer
for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the officers and members of
SSSEA staged an illegal strike and baricaded the entrances to the SSS Building, preventing non-striking employees
from reporting for work and SSS members from transacting business with the SSS; that the strike was reported to the
Public Sector Labor - Management Council, which ordered the strikers to return to work; that the strikers refused to
return to work; and that the SSS suffered damages as a result of the strike. The complaint prayed that a writ of
preliminary injunction be issued to enjoin the strike and that the strikers be ordered to return to work; that the
defendants (petitioners herein) be ordered to pay damages; and that the strike be declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which included:
implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of union
dues; payment of accrued overtime pay, night differential pay and holiday pay; conversion of temporary or contractual
employees with six (6) months or more of service into regular and permanent employees and their entitlement to the
same salaries, allowances and benefits given to other regular employees of the SSS; and payment of the children's
allowance of P30.00, and after the SSS deducted certain amounts from the salaries of the employees and allegedly
committed acts of discrimination and unfair labor practices.

Issue:

Whether or not employees of the Social Security System (SSS) have the right to strike.

Held:

The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall guarantee the
rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law" [Art. XIII, Sec. 31].
Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of these
provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987 Constitution would
show that in recognizing the right of government employees to organize, the commissioners intended to limit the right
to the formation of unions or associations only, without including the right to strike.

Considering that under the 1987 Constitution "the civil service embraces all branches, subdivisions, instrumentalities,
and agencies of the Government, including government-owned or controlled corporations with original charters" [Art.
IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the employees in the civil service are denominated as
"government employees"] and that the SSS is one such government-controlled corporation with an original charter,
having been created under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos.
69870 & 70295, November 24,1988] and are covered by the Civil Service Commission's memorandum prohibiting
strikes. This being the case, the strike staged by the employees of the SSS was illegal.
Manila Public School Teachers Association vs
Laguio Digested
Manila Public School Teachers Association vs Laguio

Facts:

The series of events that touched off these cases started with the so-called "mass action" undertaken by
some 800 public school teachers, among them members of the petitioning associations in both cases, on
September 17, 1990 to "dramatize and highlight" 1 the teachers' plight resulting from the alleged failure of
the public authorities to act upon grievances that had time and again been brought to the latter's
attention.

Issue:

Are employees in the public service prohibited from forming unions and holding strikes?

Held:

these mass actions were to all intents and purposes a strike; they constituted a concerted and
unauthorized stoppage of, or absence from, work which it was the teachers duty to perform, undertaken
for essentially economic reasons, should not principally resolve the present case, as the underlying facts
are allegedly not identical.
 GSIS and Garcia vs. Villaviza, et. al, G. R. No. 190291, July 27, 2010

Facts: PGM Garcia, as President and General Manager of the GSIS, filed separate formal
charges against respondents and eventually found them guilty for Grave Misconduct and/or
Conduct Prejudicial to the Best Interest of the Service and meting out the penalty of one (1) year
suspension plus the accessory penalties appurtenant thereto. The charges contained that
respondent, wearing red shirt together with some employees, marched to or appeared
simultaneously at or just outside the office of the Investigation Unit in a mass
demonstration/rally of protest and support for Messrs. Mario Molina and Albert Velasco, the
latter having surreptitiously entered the GSIS premises.

On appeal, CSC found that the acts of respondents in going to the GSIS-IU office wearing red
shirts to witness a public hearing do not amount to a concerted activity or mass action proscribed
above. CSC added that their actuations can be deemed an exercise of their constitutional right to
freedom of expression. The CA found no cogent reason to deviate therefrom.

Issue: Whether or not the unruly mass gathering of twenty employees during office hours, inside
office premises to protest falls within the purview of the constitutional guarantee to freedom of
expression and peaceful assembly.

Ruling: Yes. As defined in Section 5 of CSC Resolution No. 02-1316 which serves to regulate
the political rights of those in the government service, the concerted activity or mass action
proscribed must be coupled with the intent of effecting work stoppage or service disruption in
order to realize their demands of force concession. Wearing similarly colored shirts, attending a
public hearing at the GSIS-IU office, bringing with them recording gadgets, clenching their fists,
some even badmouthing the guards and PGM Garcia, are acts not constitutive of an (i) intent to
effect work stoppage or service disruption and (ii) for the purpose of realizing their demands of
force concession.

The limitations or qualifications found in Section 5 of CSC Resolution No. 02-1316 are there to
temper and focus the application of such prohibition. Not all collective activity or mass
undertaking of government employees is prohibited. Otherwise, we would be totally depriving
our brothers and sisters in the government service of their constitutional right to freedom of
expression.

Government workers, whatever their ranks, have as much right as any person in the land to voice
out their protests against what they believe to be a violation of their rights and interests. Civil
Service does not deprive them of their freedom of expression. It would be unfair to hold that by
joining the government service, the members thereof have renounced or waived this basic
liberty. This freedom can be reasonably regulated only but can never be taken away.

Respondents freedom of speech and of expression remains intact, and CSCs Resolution No. 02-
1316 defining what a prohibited concerted activity or mass action has only tempered or regulated
these rights. Measured against that definition, respondents actuations did not amount to a
prohibited concerted activity or mass action.
Civil Liberties Union vs
Executive Secretary
194 SCRA 317 Political Law Ex Officio Officials Members of the Cabinet Singularity of
Office EO 284
In July 1987, then President Corazon Aquino issued Executive Order No. 284 which allowed
members of the Cabinet, their undersecretaries and assistant secretaries to hold other government
offices or positions in addition to their primary positions subject to limitations set therein. The
Civil Liberties Union (CLU) assailed this EO averring that such law is unconstitutional. The
constitutionality of EO 284 is being challenged by CLU on the principal submission that it adds
exceptions to Sec 13, Article 7 of the Constitution which provides:
Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or
assistants shall not, unless otherwise provided in this Constitution, hold any other office or
employment during their tenure. They shall not, during said tenure, directly or indirectly
practice any other profession, participate in any business, or be financially interested in any
contract with, or in any franchise, or special privilege granted by the Government or any
subdivision, agency, or instrumentality thereof, including government-owned or controlled
corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of
their office.
CLU avers that by virtue of the phrase unless otherwise provided in this Constitution, the only
exceptions against holding any other office or employment in Government are those provided in
the Constitution, namely: (i) The Vice-President may be appointed as a Member of the Cabinet
under Sec 3, par. (2), Article 7; and (ii) the Secretary of Justice is an ex-officio member of the
Judicial and Bar Council by virtue of Sec 8 (1), Article 8.
ISSUE: Whether or not EO 284 is constitutional.
HELD: No, it is unconstitutional. It is clear that the 1987 Constitution seeks to prohibit the
President, Vice-President, members of the Cabinet, their deputies or assistants from holding
during their tenure multiple offices or employment in the government, except in those cases
specified in the Constitution itself and as above clarified with respect to posts held without
additional compensation in an ex-officio capacity as provided by law and as required by the
primary functions of their office, the citation of Cabinet members (then called Ministers) as
examples during the debate and deliberation on the general rule laid down for all appointive
officials should be considered as mere personal opinions which cannot override the constitutions
manifest intent and the peoples understanding thereof.
In the light of the construction given to Sec 13, Art 7 in relation to Sec 7, par. (2), Art IX-B of
the 1987 Constitution, EO 284 is unconstitutional. Ostensibly restricting the number of positions
that Cabinet members, undersecretaries or assistant secretaries may hold in addition to their
primary position to not more than 2 positions in the government and government corporations,
EO 284 actually allows them to hold multiple offices or employment in direct contravention of
the express mandate of Sec 13, Art 7 of the 1987 Constitution prohibiting them from doing so,
unless otherwise provided in the 1987 Constitution itself.
Public Interest vs. Elma

G.R. no. 138965 March 5 2007

PUBLIC INTEREST CENTER INC., LAUREANO T. ANGELES, and JOCELYN P. CELESTINO, vs.

MAGDANGAL B. ELMA, as Chief Presidential Legal Counsel and as Chairman of the Presidential Commission on
Good Government, and RONALDOZAMORA, as Executive Secretary, Accused Appellant

Facts:

For consideration is the omnibus motion, dated 14 august 2006, where respondent Magdangal Elma sought the
following:

1. the reconsideration of the decision in the case Public Interest Center Inc., et al. vs. Magdangal Elma, et.al (
GR. NO. 138965), promulgated on 30 June 2006;
2. The clarification of the dispositive part of the decision ; and
3. The elevation of the case to the court en banc.

The solicitor general, in behalf of the respondent, filed an omnibus motion, dated 11 august 2006 with
substantially the same allegation.

Respondent Elma was appointed as Chairman of The Presidential Commission on Good Government (PCGG)
ON 30 October 1998. Thereafter, during his tenure as PCGG Chairman, he was appointed as Chief Presidential legal
counsel (CPLC). He accepted the second appointment, but waived any renumiration that he may receive as CPLC.
Petitioners sought to have both appointments declared as unconstitutional and therefore, null and void.

In its decision, the court declared that the concurrent appointments of the respondents as PCGG chairman and
CPLC were unconstitutional. It ruled that the concurrent appointment to these offices is in violation of section 7(2) OF
ARTICLE ix-b of the 1987 constitution, since these are incompatible offices. The duties of CPLC include giving
independent and impartial legal advice on the action of the heads of various executive departments and agencies and
reviewing investigations involving heads of executive depart6mnets. Since the actions of the PCGG Chairman, a
head of an executive agency, are subject to the review of the CPLC, such appointments would be incompatible.

The court also decreed that the strict prohibition under section 13 Article VII of the 1987 constitution would not
apply to the present case, since neither the PCGG chairman nor CPLC is a secretary, under sectary or assistant
secretary. However, had the rule hereunder been applicable to the case, the defect of these two incompatible offices
would be made more glaring. The said section allows the concurrent holding of position only when second post is
required by the primary function of the first appointments and is exercised in an ex-officio capacity. Although
respondent Elma waived receiving remuneration for the second appointment, the primary functions of the PCGG
chairman do not require his appointment as CPLC.

Ruling
 1. After reviewing the arguments propounded in respondents omnibus motion, we find that the basic issues
that were raised have already been passed upon. No substantial arguments were presented. Thus, the court
denies the respondents motion for reconsideration.
2. In response to the respondents request for clarification, the court ruled that respondents Elmas concurrent
appointments as PCGG Chairman and CPLC are unconstitutional, for being incompatible offices. This ruling
does not render both appointments void. Following the common-law rule on incompatibility of offices,
respondent Elma had, in effect, vacated his office as PCGG Chairman when he accepted the second office
as CPLC.
3. There also is no merit in the respondents motion to refer the case to court en banc. What are in question in
the present case are the constitutionality of respondent Elmas concurrent appointments, and not the
constitutionality of any treaty, law or agreement. The mere application of the constitutional provisions does
not require the case to be heard and decided en banc. Contrary to the allegations of the respondent, the
decision of the court in this case does not modify the ruling in Civil Liberties Union vs. Executive Secretary. It
should be noted that Section 3 of Supreme Court Circular No. 2-89, dated 7 February 1989 clearly provides
that the court en banc is not an appellate court to which decisions or resolutions of a division may be
appealed.
WHEREFORE, the respondents motion for consideration and for elevation of this case of court en banc is hereby
DENIED.
People of the Philippines vs
Sandiganbayan and Bienvenido
Tan, Jr.
Taxation Abatement Defined
In July 1987, Commissioner of Internal Revenue (CIR) Bienvenido Tan, Jr. issued an
assessment against San Miguel Corporation (SMC) demanding payment of P342 million in
taxes. SMC filed a request for reinvestigation. Tan granted the request and eventually he
reduced the tax liability to P302 million. But in October 1987, without any word from SMC,
Tan referred the case to the Legal Service Division of the BIR. Various BIR officials
reviewed the case and they recommended that SMCs tax liability be reduced to P22 million
(a significant reduction from the original P342 million). The reduction was justified by the
BIR officials on the ground that the tax examiners had made some errors in computing
SMCs tax liability.
So SMC was demanded to pay P22 million but then SMC asked for a compromise of P10
million. Again, the matter was referred to various BIR officials who agreed and
recommended to Tan that he should accept the compromise offer. Tan accepted the P10
million compromise offer. This resulted to a criminal case against Tan for violation of the
Anti-Graft and Corrupt Practices Act. Allegedly, his act of accepting the P10 million
compromise offer caused undue injury to the government and it gave SMC unwarranted
benefits due to the significantly reduced tax liability. The Sandiganbayan originally convicted
Tan but it reversed its own decision upon motion of Tan.
ISSUE: Whether or not Tan should have been convicted of the crime charged.
HELD: No. It was found by the Sandiganbayan that there was an improper computation in
the tax liability of SMC. The error basically imposed tax on top of another tax which if
allowed would be unfair to the taxpayer. It was therefore proper to have the tax be reduced
from P302 million to P22 million.
But is it proper for Tan to accept the P10 million compromise by SMC?
Tan is well within his power to accept the P10 million compromise offer. This is actually
abatement (not compromise as termed by SMC). Tan is actually prudent to accept the P10
million offer so as to avoid a protracted and costly litigation. Abatement is the diminution or
decrease in the amount of tax imposed. It refers to the act of eliminating or nullifying; of
lessening or moderating. To abate is to nullify or reduce in value or amount. The CIR has
the power to abate or cancel the whole or any unpaid portion of a tax liability, inclusive of
increments, if its assessment is excessive or erroneous, or if the administration costs
involved do not justify the collection of the amount due. No mutual concessions need be
made, because an excessive or erroneous tax is not compromised; it is abated or canceled.
Only correct taxes should be paid. Further, Tan cannot be said to have acted in bad faith.
He acted upon concurrence and recommendation of the various BIR officials.
Luciano Veloso, et. al. vs. Commission on Audit (COA) [GR
No. 193677, September 6, 2011]
Post under case digests, Political Law at Monday, February 08, 2016 Posted by Schizophrenic Mind

FACTS: In 2000, the City of Manila enacted Ordinance No. 8040 authorizing the conferment of
Exemplary Service Award (EPSA) to elective officials of the City who have been elected for three
(3) consecutive terms in the same position. Such officials shall be given a retirement and gratuity pay
remuneration equivalent to the actual time served in the position for three (3) consecutive terms. In 2006,
Legal and Adjudication Office (LAO)-Local of the COA issued a Notice of Disallowance. Petitioner filed a
Motion to Lift the Notice of Disallowance on the ground that LGUs have fiscal autonomy and that they
have the power to grant allowances/gratuity.

ISSUE: Whether or not COA properly exercised its jurisdiction in disallowing the disbursement of the City
of Manila's funds for the EPSA of its former three-term councilors

RULING: Yes. COA is vested with the authority to determine whether government entities, including
LGUs, comply with laws and regulations in disbursing government funds, and to disallow illegal or
irregular disbursements of these funds. LGUs, though granted local fiscal autonomy, are still within the
audit jurisdiction of the COA. Moreover, COA was held correct in issuing the Notice of Disallowance
because, contrary to the contention of the petitioners that the award is a form of gratuity, the
recomputation of the award disclosed that it is equivalent to the total compensation received by each
awardee for nine years, that includes basic salary, additional compensation. Undoubtedly,
the computation of the awardees' reward is excessive and tantamount to double and
additional compensation which is prohibited by law.