76 Phil 12

G.R. No. L-89, February 01, 1946

JOSE TOPACIO NUENO, MANUEL DE LA FUENTE,
UESTAQUIO C. BALAGTAS, AND DELIA C. DIO,
PETITIONERS, VS. GERARDO ANGELES, AGATON
EVANGELISTA, ANDRES STA. MARIA, VICENTE G. CRUZ,
AMADO V. HERNANDEZ AND FELICIDAD MANUEL,
RESPONDENTS.
DECISION
FERIA, J.:
This is an action of quo warranto instituted by the four petitioners
against the six respondents to oust the latter from their offices as
members of the Municipal Board of the City of Manila on the
ground that the petitioners are entitled to occupy and respondents
are illegally holding them.
Jose Topacio Nueno, Manuel de la Fuente, Eustaquio Balagtas and
Carmen Planas and six others were elected in the general election
held on Dec. 10, 1940, and qualified on Jan. 1, 1941. Subsequently,
Jose Topacio Nueno and Carmen Planas resigned to run for seats
in the House of Representatives in the national election held on
Nov. 14, 1941, but they were not elected. After the election, the
President of the Philippine Commonwealth appointed petitioner
Nueno to fill the vacancy created by his own resignation, and
petitioner Delia 0. Dio to fill the vacancy in the place of Carmen
Planas, for the last two belonged to the same political party, "The
Young Philippines".

army proclaimed military administration under martial law over all

districts occupied by the army, and in the proclamation it was
provided that "so far as military administration permits, all the
laws now in force in the Commonwealth, as well as executive and
judicial institutions shall continue to be effective as in the past,
and all public officials shall remain in their present posts and carry
on faithfully their duties as before."
By Order No. 1 of Jan. S3, 1942, of the Commander-in-Chief of the
Imperial Japanese army, a central administrative organization or
government under the name of Philippine Executive Commission
was organized, and Jorge Vargas appointed Chairman thereof, and
the latter, in Executive Order No. 4, Sec. 9(b) of Feb. 5, 1942,
approved by the said Commander-in-Chief, provided that "the
provincial boards and the boards or councils of cities,
municipalities and specially organized local governments shall
merely serve in an advisory capacity to their respective governor
and mayors." Under the so-called Republic of the Philippines
inaugurated on October 14, 1943, no material change was
introduced in so far as the City of Manila was concerned.
The regular election which, according to Sec. 4 of Act no. 257
(Election Code), should have been held on the second Tuesday in
December 1943 to elect the members of the Municipal Board of
the City of Manila who were to assume office on the first of
January, 1944, could not be held for the city was still under the
Japanese military occupation; and as the special election provided
for in Sec. I6(c) of said Act could not also be held after the
reoccupation of the Philippines and the restoration of the
Commonwealth Government on Feb. 27, 1945, due to physical
impossibility, the President of the Commonwealth appointed on
July 18, 1945, the six respondents and four of those elected in
December, 1940, as members of the Board.

On Jan. 3, 1942, when the city of Manila was occupied by the

Japanese Forces, the Commander-in-Chief of the Imperial Japanese

The four petitioners, Jose Topacio Nueno, Manuel de la Fuente,

Agustin Balagtas and Delia 0. Dio, instituted this action against
the six respondents, Gerardo Angeles, Agaton Evangelista, Andres
Santa Maria, Vicente G. Cruz, Amando V. Hernandez and Felicidad
Manuel, on the ground that petitioners, having been elected as
members of the Municipal Board of Manila in the general election
held in December, 1940, for three years, their term of office has
not yet expired because they have not served for three years
completely due to the Japanese occupation, and besides because
they are entitled to hold over or continue in office until their
successors are elected and qualified, and therefore respondents'
appointments are null and void.

incumbent; that as petitioners have no right to institute the

present action, this Court has no jurisdiction to proceed and
inquire into the validity of respondents appointments; and that
the appointments of the respondents are legal and valid under
the., emergency powers granted by Act No. 671 of the Congress of
the Philippines upon the President of the Commonwealth.

Attorney Nicolas V. Villaruz appeared to intervene in behalf of the

political party "Young Philippines", and incidentally for the
petitioner Delia Dio, and claims that although the latter is not,
under the ' law, entitled to hold over after the expired term of the
office of Carmen Planas (who resigned as above stated and in
whose place she was appointed by the President), the
appointments of the respondents were in contravention of section
16(b) of Act Ho. 357, because no one of the respondents belongs to
the Young Philippines, whereas in the former Board there was one
belonging to that political party, petitioner Delia Dio; and
besides, their appointments, not having been submitted to the
Commission on Appointments, became ineffective from September
18, 1945, the day following the adjournment of the second special
session of the Congress of the Philippines.

In view of the conclusion we have reached in this decision, we

shall not discuss the sufficiency of the "pleading filed "by the four
petitioners who claim to be entitled to hold the offices now held by
the six respondents. According to Sec. 7 of Rule 68, an individual
who files a complaint of quo warranto must set forth the name of
the person who claims to be entitled to the office and that of the
defendant who is unlawfully iii possession thereof, and those who
claim to be entitled to the same office may be made parties in
order to determine their respective rights to the office In the same
action. An individual cannot sue and oust two or more persons
although the latter are holding illegally their respective offices,
unless he entitled to all of them. Although, this question has not
been raised by the parties, we may rest our decision on that
ground alone and dismiss the action; for if we were to decide this
case in favor of the petitioners, we would be at a loss how to
determine which of the six respondents should he ousted as
holding illegally the four offices or places claimed by the four
petitioners. There is nothing in the record showing which of the
six respondents occupy the four seats or offices formerly occupied
by the four petitioners. The record does not show the respective
dates or seniority of the respondents' appointments. But we want

The respondents, represented by the Fiscal of the City of Manila,

contend that petitioners have no right to hold the public offices
claimed by them, because their term of office had already expired
on December 31, 1943, and they are not entitled to hold over; that
whether or not they have served completely for three years as
members of the Municipal Board of Manila is immaterial, for the
term of office must be distinguished from the tenure of the

The decision in this case depends upon whether or not, under the
law, petitioners are entitled to hold- over as members of the
Municipal Board of the City of Manila, notwithstanding the
expiration of their term of office on the last day of December of the
year 1943.

to decide the case on its merits and not on technicalities, so as to

avoid any other or further proceedings.
The contention that petitioners are entitled to continue in office
because they have not completely served for three years due to
the war, is untenable, even assuming that they had not discharged
the duties of their office during the Japanese occupation of Manila.
For the simple reason that the term of an office must be
distinguished from the tenure of the incumbent. The term means
the time during which the officer may claim to hold the office as of
right, and fixes the interval after which the several incumbents
shall succeed one another. The tenure represents the term during
which the incumbent actually holds the office. The term of office is
not affected by the hold over. The tenure may be shorter than the
Term for reasons within, or beyond the power of the incumbent.
There is no principle, law or doctrine by which the term of an
office may be extended by reason of war.
We shall, therefore, discuss and decide only the question of the
respondents' right to hold over and, consequently, the power of the
President to appoint their successors after the "expiration of their
term of office.
While there is authority to the contrary, the general trend of
decisions of American courts is to adopt the common-law rule of
hold over. The rule is, as enunciated in 46 Corpus Juris, 968, that
in the absence of an express or implied constitutional or statutory
provision to the contrary, an officer is entitled to hold his office
until his successor is appointed or chosen and has qualified." This
enunciation of the rule is substantially the same as that in
McQuillin, Municipal Corporations, Vol. II, second ed. Art. 307).
The legislative intent not to permit holding over may therefore be
express or implied, in legislative acts'.

In many states of the Union, the constitutions and statute

expressly provide for the holding over of public officers until their
successors are elected or appointed and have qualified. (46 G. J.,
Par. Ill, p. 969)
Here in the Philippines, in enacting the provisions of the Revised
Administrative Code relating to elective provincial officers,
members of the Municipal Board of the City of Manila and
municipal officers in general, the Philippine Legislature was
dealing with the same or similar subject matter, and
notwithstanding the trend of American decisions to adopt the
common-law rule of hold over, recognized and applied by this
court to appointive officers in the case of Tayko v. Capistrano, 52
Phil. 866, our lawmakers have followed the policy and practice of
those States that provide expressly in their statutes for holding
over of provincial, city and municipal officers, in the following
provisions of the Revised Administrative Code, the pertinent part
have underscored.
Section 2074 of the Revised Administrative Code (Provincial Law)
provided;
"Term of office of elective official.- The term of a provincial officer
elected at any general election commencing with the year
nineteen hundred and thirty-seven, shall begin on the six-teenth of
July following such election and shall end on the fifteenth of the
same month three years thereafter; but if a successor be not
inducted at the time appointed by law, the incumbent shall hold
over until a successor shall be duly qualified.
Section 2177 of the same Code (Municipal Law) read as follows:
"Term of elective officer. The terra of a municipal officer elected at
any general election commencing with the year nineteen hundred
and thirty-seven, shall begin on the sixteenth of July following such

election and shall end on the fifteenth of the same month three
years thereafter; but if a successor be not inducted at the time
appointed by law, the incumbent shall hold over until a successor
shall be duly qualified.""
The original provision of Sec. 2429 (Charter of the City of Manila)
which provided "that the Municipal Board shall be the legislative
body of the city, and shall consist of ten elective members who
shall hold office for four years or until their successors are elected
and qualified" was amended by Act No. 2774 so as to read: "The
Municipal Board shall be the legislative body of the City, and shall
consist of ten elected members who shall hold office for three
years. But the suppression of the provision for holding over did not
have any effect, since it was then a surplusage, because the
second paragraph of section 2440 provided among others the
following;
"Election for the members of the Board shall be held on the date of
the general trienial election, and elected members shall take office
on the sixteenth day of October next following their election, upon
qualifying, and shall hold office until their successors are elected
and qualified"
From the express provisions above quoted, it clearly appears that
it was the intention of the Legislature, independent or irrespective
of the ruling of this Court in the above-cited case of Tayko v.
Capistrano relating to appointive officers, to provide expressly that
the elective (members of the Municipal Board of the City of Manila
as well as elective provincial and municipal officers in general,
shall hold over after the expiration of their terms until their
successors shall be duly qualified. Such provision was enacted to
provide against all contingencies which might result from an office
becoming for any period of time vacant or without an incumbent.

Subsequently, the above-quoted provisions of sections 2074, 2177,

and 2440 (second paragraph), were expressly repealed by Sec.
184 of Commonwealth Act No. 357. Section 4 of said act provides,
in lieu of said provisions, that "on the "second Tuesday in
December, nineteen hundred and forty, and upon the same day
every three years thereafter, a regular selection shall be held to
elect the officers who are to occupy all elective provincial,
municipal and city offices throughout the Philippines. The officers
elected shall assume office on the first day of January next
following. This repeal of all provisions for holding over the
provincial, city and municipal elective officers by Commonwealth
Act No. 257, and the enactment of section 16 thereof which
provides for the filling of all vacancies, temporary or otherwise,
which might occur during and after the expiration of a term of
office, so as to avoid the necessity and even the occasion for
holding over, clearly show the manifest intention of Congress to
suppress the hold over. The very attorney who appeared for
petitioner Delia c. Dio argued in his brief and oral argument that
the latter has no right under the law to hold over, but is entitle to
be reappointed in accordance with Sec. 16(b) of Act Ho. 357.
The policy announced by the President of the Commonwealth in
his message to Congress on June 9, 1945, that "the provincial and
municipal officers who were elected in 1940 should, as a general
principle, be recalled to their respective positions, thus giving due
consideration to the will of the people as expressed, at the polls,
and only for strong reasons should they be deprived of their
privilege to serve," quoted in-the dissenting opinion, cannot be
invoked in support of the right to hold over. In the first place,
because the message has not the force and effect of law and is
therefore not a legislative interpretation of the law; and secondly,
because if any weight may be given to that policy in the decision of
this case, it would work against the alleged right to hold over. If
provincial and municipal officers are entitled by law to hold over,
they would have the right to continue in office irrespective of any

policy which the President may adopt, for the latter cannot deprive
them of said right. If the President has to recall and appoint them
to their respective original positions pursuant to such policy, it is
because they are not entitled to hold over.
Section 16 of Commonwealth Act No. 357 reads as follows:
Sec. 16. Vacancy in elective provincial or municipal office. (a)
Whenever a temporary vacancy in any elective local office occurs,the same shall be filled by appointment by the President if it is a
provincial office and by the provincial governor, with the consent
of the provincial board, if it is a municipal office.
(b) Whenever in any elective local office a vacancy occurs-as a
result of the death, resignation, removal or cessation of the
incumbent, the President shall appoint thereto a suitable person
belonging to the political party of the officer whom he is to
replace, save in the case of a mayor, which shall be filled by the
vice-mayor.
(c) Whenever the election for a local office fails to take place on
the date fixed by law, or such election results in a failure to elect,
the President shall issue as soon as practicable, a proclamation
calling a special election to fill said office.
(d) When a local officer-elect die before assumption of office, or,
having been elected provincial or municipal officer, his election is
not confirmed by the President for disloyalty, or such office-elect
fails to qualify, for any reason, the President may in his discretion
either call a special election or fill the office by appointment.
(e) In case a special election has been called and held and shall
have resulted in a failure to elect, the President shall fill the office
by appointment .

(f) The person appointed or elected to fill a vacancy in an elective

provincial or municipal office shall hold the same for the unexpired
term of the office.
The only vacancies which may possibly occur in elective provincial
or municipal offices, as well as of the City of Manila, are those
provided for in the above-quoted provisions, and in section 2440
(e), applicable only to members of the Municipal Board of the City
of Manila, besides those enumerated in said section 16 which are
not in conflict therewith, for according to section 2440(d) as
amended by Act No. 233, "in so far as they are applicable, all the
provisions of the Election Law are made effective as to the
members of the Board and to their election to the same extent as if
the City of Manila were a province * * *. And each and every one
of said vacancies may be immediately filled in the manner therein
provided, and therefore there cannot be any interregnum during
which the office may be temporarily without an incumbent as we
shall show later on.
In case of sickness or absence, or if for any reason it becomes
necessary to maintain a quorum in that Board, as in case of
suspension or temporary disability of any member of the Municipal
Board of the City of Manila, section 16(a) cannot be applied,
because no vacancy; temporary or otherwise is created thereby
since the office is not without an incumbent, and because that
contingency is covered by section 2439 or the Administrative Code
which is specially applicable to members of the Municipal Board of
the City of Manila, in accordance with said section, the Governor
General (now the President) may make in such case a temporary
appointment of a person "who shall possess all the rights and
perform all the duties of a member of the Board" until the return
to duty of the incumbent. An office is said to be vacant where
there is no incumbent elected or appointed to hold it. (46 C. J.
971). "A temporary absence will not result in a vacancy,"(Young vs.
Morris, 47 Okl., 743). Temporary "physical and mental disability of

the incumbent of an elective office does not create a vacancy," (46

c. J. 973).
But even assuming that it was also the intention of Congress to
apply, though improperly, the word "temporary vacancy used in
Section 16(a) of Act No. 357, to oases of sickness, absence,
suspension or any other temporary disability of any member of
provincial or municipal boards, it would not exclude the
application of said section 16(a) to the proper "temporary vacancy"
which may result from the delay in the election or appointment of
a successor of the incumbent of the previous term in the cases
contemplated in the provisions of subsection(c) and (d) of said
section 16. Under these provisions, whenever (1) the election "fails
to take place on the date fixed by law as in the case at bar), or (2)
results in a failure to elect, or (3) the officer-elect dies before
assumption of office, or (4) his election is not confirmed for
disloyalty, or (5) he fails to qualify for reason of non-eligibility or
other reasons, the successor to fill the vacancy shall be elected in
a special election, if the President does not exercise his discretion
to fill the vacancy in the last three cases (3), (4) and (5) by
appointment. Now, as according to Sec. 17 of the same Act No.
357, the said special election shall be called by the President by
proclamation for a date which shall not be earlier than thirty days
nor later than ninety days from the date of said proclamation, it is
evident that from the first day of January, the beginning of the new
term, to the election or appointment and qualification of the
successor elected in that special election, or appointed if the
special election result in a failure to elect, as provided in
subsection (e), there would necessarily be an interregnum or
temporary vacancy during which no one actually holds or could
hold the office. To meet or provide for such a contingency, said
subsection (a) of section 16 empowers the president to appoint a
person to fill such temporary vacancy or interregnum, and the
persons so appointed shall hold the office until the permanent
successor has been elected or appointed to fill the office lor the

unexpired term, according to subsection (f) of said section 16 of

Commonwealth Act No. 357. Election or appointment of a person
to fill a vacancy under subsections (b), (c), (d) and (e) for the
unexpired term should not be confused, with the appointment
under subsection (a) of a person to fill the temporary-vacancy until
the permanent incumbent for the unexpired term has been elected
or appointed (subsection [f]).
In addition to all the foregoing, we may add that petitioners Jose
Topacio Nueno and Belia C. Dino can not claim the right to hold
over as elective officers of the Municipal Board of Manila,
because, as above stated, they held the office before the war by
appointment under subsection (b) to fill the vacancies caused by
resignation of the elective incumbents, one of them the same
petitioner Nueno, and to hold the office for the unexpired term in
accordance with subsection (f), Sec. 16, of said Commonwealth Act
No. 357. And that petitioner Dino's claim is based on the incorrect
assumption that the respondents were appointed under subsection
(b) of said Act.
From the foregoing it clearly appears that petitioners are not
entitled to hold over, and after the expiration of their term of office
on Dec. 31, 1943, the offices of members of the Municipal Board of
Manila became-vacant from January 1, 1944, because of failure to
hold the regular election on the second Tuesday of December 1943
and the special election, and consequently to elect the would-be
incumbents. And during the interregnum or temporary vacancy
from January 1, 1944, until the said special election is held and
new members elected or, in case of failure to elect, appointed by
the President (under Sec. 16 (c) and (d) of Commonwealth Act No.
357) the President had, under section 16 (a) of the same act, the
power to appoint the respondents or any other, at his discretion, to
fill the said temporary vacancy or vacancies. As the petitioners are
not entitlesd to hold-over or continue, after the expiration of their
term, in the offices claimed by them and held now by the

respondents, they have no right to bring the present action and

impugn the validity of the latter's appointments, according to the
provisions of section 6, Rules 68, of the rules of court.

II, JOSE K. QUIAMBAO, AND JAIME PARROCO, CITY

TREASURER OF LA CARLOTA CITY, RESPONDENTS.
DECISION

The record does not show whether the respondents were

appointed by the president under Sec. 16(a) of Commonwealth ct
No. 357, or under the emergency powers granted him by
Commonwealth Act No. 671 of the Congress of the Philippines as
contended by the City Fiscal, attorney for the respondents. But
having arrived at the above conclusion, this court does not deem it
necessary to decide whether or not the President had the authority
to appoint the respondents by virtue of his emergency powers; and
whether or not the respondents' appointments became ineffective
from September 18, 1945, which was the day following the
adjournment of the Congress of the Philippines convened after
their appointments, because the latter had not been submitted to
Congress or -the Commission on Appointments, as claimed by the
attorney for respondent Dino.
The action of quo warranto filed by the petitioners is therefore,
dismissed, with costs against them. So ordered.
Jaranilla, De Joya, Pablo, Bengzon, and Briones. JJ., concur.

153 Phil. 450

FIRST DIVISION
G.R. No. L-30324, November 29, 1973
RODULFO C. NIERE, PETITIONER, VS. HONORABLE COURT
OF FIRST INSTANCE OF NEGROS OCCIDENTAL, BRANCH

MAKASIAR, J.:
Petitioner Rodulfo C. Niere files this petition for review on
certiorari seeking the reversal of the decision dated December 28,
1968 of the respondent Court.
It is undisputed that La Carlota City was created by Republic Act
No. 4585 enacted on June 19, 1965. Petitioner Rodulfo C. Niere is
a Civil Service eligible, having passed the Board Examinations for
Civil Engineers in August, 1960 with a rating of 71.98%. He
entered the government service on October 3, 1960 as a civil
engineer aide in the District Engineer's Office at Bacolod City at
P4.00 a day until he was given a permanent appointment as such
on December 1, 1961 at P2544.00 per annum. He was promoted
on November 16, 1962 as junior civil engineer; on September 9,
1963, as associate civil engineer; and on October 28, 1964 as civil
engineer. On January 3, 1966, he was appointed city engineer of
La Carlota City by then City Mayor Jaime Marino pursuant to the
provisions of Section 21 of Republic Act No. 4585, which
appointment was endorsed to the Commissioner of Civil Service,
who approved the same on January 10, 1966. Petitioner thereafter
assumed office as such city engineer of La Carlota City.
After the enactment on July 17, 1967 of the Decentralization Act,
otherwise known as Republic Act No. 5185, private respondent
Jose K. Quiambao was appointed on May 14, 1968 by the President
of the Philippines as city engineer of La Carlota City, upon
recommendation of the Commissioner of Public Highways, who, on
June 17, 1968, officially informed herein petitioner of said
appointment of private respondent Quiambao, which appointment

was duly confirmed by the Commission on Appointments, and

directed petitioner to turn over the office to respondent Quiambao,
who likewise on the same day, June 17, 1968, advised petitioner
that he was assuming as city engineer of La Carlota City.
In reply to petitioner's motion for reconsideration of the
confirmation of respondent Quiambao, the Secretary of the
Commission on Appointments, in a letter dated June 21, 1968,
informed the petitioner that his said motion was filed beyond the
reglementary period and that his sole remedy is to file quo
warranto proceedings in court.
Private respondent Quiambao graduated cum laude from the
Silliman University in 1957 with a degree of Bachelor of Science in
Civil Engineering and passed the Board Examinations the same
year with a rating of 82.4%. He entered the government service in
1957 while he was not yet a registered engineer in the City
Engineer's Office of Dumaguete City, then as associate engineer in
1965 in the same office, from which he was promoted, upon
recommendation of the Commissioner of Public Highways as
heretofore intimated, to the position of City Engineer of La Carlota
City effective May 14, 1968.
Petitioner claims that he was legally appointed by the City Mayor
of La Carlota City under Section 21 of Republic Act No. 4585.
On the other hand, respondents maintain that the position of city
engineer, created in the Charter of La Carlota City (Secs. 19 & 29,
R.A. No. 4585) which was enacted on June 19, 1965 and therefore
already existing at the time of the appointment of petitioner on
January 3, 1966, can be filled up only by appointment of tie President of the Philippines with the confirmation of the Commission on
Appointments under Section 4 of Republic Act No. 5185, which
expressly excepts the city engineer from the appointing authority
of the city mayor.

Section 21 of Republic Act No. 4585 provides thus:

"Appointment and removal of officials and employees. -- The mayor
shall appoint the city treasurer, the city health officer, the chief of
police and fire department, and other heads and other employees
of such city department as may be created. Said officers shall not
be suspended nor removed except in the manner and for causes
provided by law: Provided, That appointments of heads and other
employees of the city shall be limited to civil service eligibles as
may from time to time be certified as such by the Commissioner of
Civil Service."
Section 4 of Republic Act No. 5185 reads thus:
"The City Assessor, City Agriculturist, City Chief of Police and City
Chief of Fire Department and other heads of offices entirely paid
out of city funds and their respective assistants or deputies shall,
subject to civil service law, rules and regulations, be appointed by
the City Mayor; Provided, however, that this section shall not apply
to Judges, Auditors, Fiscals, City Superintendents of Schools,
Supervisors, Principals, City Treasurers, City Health officers and
City Engineers."
Section 10(3) of Article VII of the 1935 Constitution states:
"The President shall nominate and with the consent of the
Commission on Appointments, shall appoint the heads of the
executive departments and bureaus, officers of the Army from the
rank of colonel, of the Navy and Air Forces from the rank of
captain or commander, and all other officers of the Government
whose appointments are not herein otherwise provided for, and
those whom he may be authorized by law to appoint; but the
Congress may by law vest the appointment of inferior officers, in
the President alone, in the courts, or in the heads of departments."
The petition should be dismissed and the decision of the court a
quo must be affirmed.
I

House Bill No. 9711, which became Republic Act No. 4585,
originally expressly included the city engineer as one of those
whom the city mayor can appoint under Section 21 of Republic Act
No. 4585, but during the period of amendment in the Senate, the
position of said engineer was deleted in the final draft of Section
21. This fact clearly indicates that the intention of the Legislature
was to exclude from the appointing power of the mayor the
position of the city engineer. This is not an amendment purely on a
matter of form; because nothing could be more substantial than
the vesting of a power to appoint such an important city official as
the city engineer. Petitioner's assertion that Senator Tolentino
stated that this amendment is merely one of form is not accurate;
because the records of the Senate session during the period of
amendments, as quoted by petitioner himself, show that:
"THE PRESIDENT PRO TEMPORE. We are in the period of
amendments.
"SENATOR TOLENTINO. There are committed amendments, Mr.
President, embodied in the committee Report. Some of them are
matters of form. The other refers to the allotment of collection of
taxes. I move that these committee amendments be approved.
"THE PRESIDENT PRO TEMPORE. Is there any objection?
(Silence) The Chair hears none. The motion is approved." (P. 20 of
Petition; p. 30, rec.; p. 42, petitioner's brief).
The Committee amendments included:
"3. Page 33, line 6
"Delete the following:
'the city engineer,
the city attorney.'"

(P. 21 of Petition; p. 31, rec.; p. 43, petitioner's brief).

As aforequoted, Senator Tolentino was careful or deliberate in
stating that some, not all, of the amendments were matters of
form. Neither did he refer expressly to the deletion of the words
city engineer from Section 21 of the Charter of La Carlota City as
purely a formal amendment. If Congress wanted to authorize the
city mayor to appoint all heads and employees of city department,
it could have easily re-phrased Section 21 of the City Charter to
that effect. That this is a material modification is underscored by
the fact that the City Charters of Toledo, Cotabato, Kanlaon,
Dapitan, San Carlos, Gingoog, Davao, Tacloban, Silahis, Bago,
Bacolod, Cebu, Legaspi and Roxas or Republic Acts Nos. 2688,
2364, 3445, 3811, 2643, 2668, 3028, 3068, 4382, 3857, 2234 and
603 expressly vest the power to appoint the city department
heads, including the city engineer, in the President of the
Philippines, who is the repository of the appointing power by
express constitutional conferment (Sec. 10(3), Art. VII, 1935
Constitution; see also Sec. 13, Art. IX, 1973 Constitution).
II
The clear legislative intendment in excepting the engineer from
the appointing authority of the city mayor under Section 21 of the
Charter of La Carlota City is evident from the phraseology of the
same. Said section expressly limits the appointing authority of the
mayor to "the city treasurer, the city health officer, the chief of
police and fire department, xx x" among the heads of the then duly
created and existing departments, like the city engineer, of the city
government of La Carlota City. The following phrase in said
Section 21 "and other heads and other employees of the city
departments as may be created," whom the mayor can appoint,
refers to heads of city departments that may be created after the
enactment of Republic Act No. 4585. Otherwise, as emphasized by
respondents, the first conjunction "and" before "fire department"

in the preceding clause of that same sentence of Section 21 would

be a superfluity, and would have no meaning at all. As evident from
the construction of the first sentence in said Section 21, the
terminal phrase "as may be created" modifies the last clause "and
other heads and other employees of such department," by all the
principles of logic and syntax.
III

(Cordilla vs. Martinez, 110 Phil. 24, 25; Rodriguez vs. Tan, 91 Phil.
724, 728; Luna vs. Rodriguez, 37 Phil. 866).
WHEREFORE, THE APPEALED DECISION IS HEREBY
AFFIRMED, WITH COSTS AGAINST PETITIONER.
Makalintal, C.J., Ruiz Castro, Teehankee, Esguerra, and Muoz
Palma, JJ., concur.

Since the city mayor under Section 21 is without authority to

appoint the city engineer, this prerogative can only be exercised
by the President of the Philippines, who, under Section 10(3) of
Article VII of the 1935 Constitution, shall nominate with the
consent of the Commission on Appointments "all other officers of
the government whose appointments are not herein otherwise
provided for"; because We ruled in Ramos vs. Alvarez (97 Phil.
844, 849) that when a statute does not specify how an officer is to
be appointed, the appointment must be made by the President
with the consent of the Commission on Appointments.
The appointing power is essentially the exclusive prerogative of
the President. Consequently, any diminution in its scope must be
clear and unequivocal. This test is not met by Section 21 of
Republic Act No. 4585 so as to remove the power to appoint the
city engineer of La Carlota City from the residual power of
appointment vested in the President by Section 10(3) of Article VII
of the 1935 Constitution.
Hence, the appointment of petitioner as city engineer by then city
mayor of La Carlota City is illegal and therefore null and void.
However, as conceded by respondents, petitioner was a de facto
city engineer during the period of time that he performed the
functions of the position until he was displaced by respondent
Quiambao who was validly nominated by the President of the
Philippines and confirmed by the Commission on Appointments

365 Phil. 744

10

EN BANC
G.R. No. 131012, April 21, 1999
HON. RICARDO T. GLORIA, IN HIS CAPACITY AS
SECRETARY OF THE DEPARTMENT OF EDUCATION,
CULTURE, AND SPORTS, PETITIONER, VS. COURT OF
APPEALS, AMPARO A. ABAD, VIRGILIA M. BANDIGAS,
ELIZABETH A. SOMEBANG AND NICANOR MARGALLO,
RESPONDENTS.
DECISION
MENDOZA, J.:
This case arose out of the unfortunate strikes and walk-outs staged
by public school teachers on different dates in September and
October 1990. The illegality of the strikes was declared in our
1991 decision in Manila Public School Teachers Association v.
Laguio, Jr.,[1] but many incidents of those strikes are still to be
resolved. At issue in this case is the right to back salaries of
teachers who were either dismissed or suspended because they
did not report for work but who were eventually ordered
reinstated because they had not been shown to have taken part in
the strike, although reprimanded for being absent without leave.
The facts are as follows:
Private respondents are public school teachers. On various dates
in September and October 1990, during the teachers' strikes, they
did not report for work. For this reason, they were
administratively charged with (1) grave misconduct, (2) gross
neglect of duty, (3) gross violation of Civil Service Law Rules and
Regulations and reasonable office regulations, (4) refusal to
perform official duty, (5) gross insubordination, (6) conduct

prejudicial to the best interest of the service, and (7) absence

without leave (AWOL), and placed under preventive suspension.
The investigation was concluded before the lapse of their 90-day
suspension and private respondents were found guilty as charged.
Respondent Nicanor Margallo was ordered dismissed from the
service effective October 29, 1990, while respondents Amparo
Abad, Virgilia Bandigas, and Elizabeth Somebang were ordered
suspended for six months effective December 4, 1990.[2]
Respondent Margallo appealed to the Merit Systems and
Protection Board (MSPB) which found him guilty of conduct
prejudicial to the best interest of the service and imposed on him a
six-month suspension.[3] The other respondents also appealed to
the MSPB, but their appeal was dismissed because of their failure
to file their appeal memorandum on time.[4]
On appeal, the Civil Service Commission (CSC) affirmed the
decision of the MSPB with respect to Margallo, but found the
other three (Abad, Bandigas, and Somebang) guilty only of
violation of reasonable office rules and regulations by failing to file
applications for leave of absence and, therefore, reduced the
penalty imposed on them to reprimand and ordered them
reinstated to their former positions.
Respondents filed a petition for certiorari under Rule 65 in this
Court. Pursuant to Revised Administrative Circular No. 1-95, the
case was referred to the Court of Appeals which, on September 3,
1996, rendered a decision (1) affirming the decision of the CSC
with respect to Amparo Abad, Virgilia Bandigas, and Elizabeth
Somebang but (2) reversing it insofar as the CSC ordered the
suspension of Nicanor Margallo. The appellate court found him
guilty of violation of reasonable office rules and regulations only
and imposed on him the penalty of reprimand.[5]
Private respondents moved for a reconsideration, contending that

11

they should be exonerated of all charges against them and that

they be paid salaries during their suspension. In its resolution,
dated July 15, 1997, the Court of Appeals, while maintaining its
finding that private respondents were guilty of violation of
reasonable office rules and regulations for which they should be
reprimanded, ruled that private respondents were entitled to the
payment of salaries during their suspension "beyond ninety (90)
days." Accordingly, the appellate court amended the dispositive
portion of its decision to read as follows:
WHEREFORE, IN VIEW OF THE FOREGOING, petition is hereby
DENIED. CSC Resolution Nos. 93-2302 dated June 24, 1993 and
93-3124 dated August 10, 1993 (In re: Amparo Abad), CSC
Resolution Nos. 93-2304 dated June 24, 1993 and 93-3227 dated
August 17, 1993 (In re: Virgilia Bandigas) and CSC Resolution
Nos. 93-2301 undated and 93-3125 dated August 10, 1993 (In re:
Elizabeth Somebang) are hereby AFFIRMED while CSC Resolution
Nos. 93-2211 dated June 21, 1993 are hereby MODIFIED finding
petitioner Nicanor Margallo guilty of a lesser offense of violation
of reasonable office rules and regulations and meting upon him the
penalty of reprimand. Respondent DECS is ordered to pay
petitioners Amparo Abad, Virgilia Bandigas, Elizabeth Somebang
and Nicanor Margallo their salaries, allowances and other benefits
during the period of their suspension/dismissal beyond the ninety
(90) day preventive suspension. No pronouncement as to costs. [6]
Petitioner Ricardo T. Gloria, then Secretary of Education, Culture,
and Sports, moved for a reconsideration insofar as the resolution
of the Court of Appeals ordered the payment of private
respondents' salaries during the period of their appeal.[7] His
motion was, however, denied by the appellate court in its
resolution of October 6, 1997.[8] Hence, this petition for review on
certiorari.

respondents is due to their appeal, hence, the government should

not be held answerable for payment of their salaries. Moreover,
petitioner lays so much store by the fact that, under the law,
private respondents are considered under preventive suspension
during the period of their appeal and, for this reason, are not
entitled to the payment of their salaries during their suspension. [9]

Petitioner contends that the administrative investigation of

respondents was concluded within the 90-day period of preventive
suspension, implying that the continued suspension of private

(4) An appeal shall not stop the decision from being executory, and
in case the penalty is suspension or removal, the respondent shall
be considered as having been under preventive suspension during

Petitioner's contentions have no merit.

I. Preventive Suspension and the Right to Compensation in Case of
Exoneration
The present Civil Service Law is found in Book V, Title I, Subtitle A
of the Administrative Code of 1987 (E.O. 292). So far as pertinent
to the questions in this case, the law provides:
SEC. 47. Disciplinary Jurisdiction. ....
(2) The Secretaries and heads of agencies and instrumentalities,
provinces, cities and municipalities shall have jurisdiction to
investigate and decide matters involving disciplinary action
against officers and employees under their jurisdiction. Their
decisions shall be final in case the penalty imposed is suspension
for not more than thirty days or fine in an amount not exceeding
thirty days' salary. In case the decision rendered by a bureau or
office head is appealable to the Commission, the same may be
initially appealed to the department and finally to the Commission
and pending appeal, the same shall be executory except when the
penalty is removal, in which case the same shall be executory only
after confirmation by the Secretary concerned.
....

12

the pendency of the appeal in the event he wins an appeal.

SEC. 51. Preventive Suspension. - The proper disciplining
authority may preventively suspend any subordinate officer or
employee under his authority pending an investigation, if the
charge against such officer or employee involves dishonesty,
oppression or grave misconduct, or neglect in the performance of
duty, or if there are reasons to believe that the respondent is guilty
of charges which would warrant his removal from the service.
SEC. 52. Lifting of Preventive Suspension. Pending Administrative
Investigation. - When the administrative case against the officer or
employee under preventive suspension is not finally decided by the
disciplining authority within the period of ninety (90) days after
the date of suspension of the respondent who is not a presidential
appointee, the respondent shall be automatically reinstated in the
service: Provided, That when the delay in the disposition of the
case is due to the fault, negligence or petition of the respondent,
the period of delay shall not be counted in computing the period of
suspension herein provided.
There are thus two kinds of preventive suspension of civil service
employees who are charged with offenses punishable by removal
or suspension: (1) preventive suspension pending investigation
(51) and (2) preventive suspension pending appeal if the penalty
imposed by the disciplining authority is suspension or dismissal
and, after review, the respondent is exonerated (47(4)).
Preventive suspension pending investigation is not a penalty.[10] It
is a measure intended to enable the disciplining authority to
investigate charges against respondent by preventing the latter
from intimidating or in any way influencing witnesses against him.
If the investigation is not finished and a decision is not rendered
within that period, the suspension will be lifted and the
respondent will automatically be reinstated. If after investigation

respondent is found innocent of the charges and is exonerated, he

should be reinstated.
A. No Right to Compensation for Preventive Suspension Pending
Investigation Even if Employee is Exonerated
Is he entitled to the payment of salaries during the period of
suspension? As already stated, the Court of Appeals ordered the
DECS to pay private respondents their salaries, allowances, and
other benefits "beyond the ninety (90) day preventive suspension."
In other words, no compensation was due for the period of the
preventive suspension pending investigation but only for the
period of preventive suspension pending appeal in the event the
employee is exonerated.
The separate opinion of Justice Panganiban argues that the
employee concerned should be paid his salaries after his
suspension.
The Civil Service Act of 1959 (R.A. No. 2260) provided for the
payment of such salaries in case of exoneration. Sec. 35 read:
Sec. 35. Lifting of Preventive Suspension Pending Administrative
Investigation. - When the administrative case against the officer or
employee under preventive suspension is not finally decided by the
Commissioner of Civil Service within the period of sixty (60) days
after the date of suspension of the respondent, the respondent
shall be reinstated in the service. If the respondent officer or
employee is exonerated, he shall be restored to his position with
full pay for the period of suspension.[11]
However, the law was revised in 1975 and the provision on the
payment of salaries during suspension was deleted. Sec. 42 of the
Civil Service Decree (P.D. No. 807) read:
Sec. 42. Lifting of Preventive Suspension Pending Administrative
Investigation. - When the administrative case against the officer or
employee under preventive suspension is not finally decided by the
disciplining authority within the period of ninety (90) days after
the date of suspension of the respondent who is not a presidential

13

appointee, the respondent shall be automatically reinstated in the

service; Provided, That when the delay in the disposition of the
case is due to the fault, negligence or petition of the respondent,
the period of delay shall not be counted in computing the period of
suspension herein provided.
This provision was reproduced in 52 of the present Civil Service
Law. It is noteworthy that the Ombudsman Act of 1989 (R.A. No.
6770) categorically provides that preventive suspension shall be
"without pay." Sec. 24 reads:
Sec. 24. Preventive Suspension. - The Ombudsman or his Deputy
may preventively suspend any officer or employee under his
authority pending an investigation, if in his judgment the evidence
of guilt is strong, and (a) the charge against such officer or
employee involves dishonesty, oppression or grave misconduct or
neglect in the performance of duty; (b) the charges would warrant
removal from the service; or (c) the respondent's continued stay in
office may prejudice the case filed against him.
The preventive suspension shall continue until the case is
terminated by the Office of the Ombudsman but not more than six
months, without pay, except when the delay in the disposition of
the case by the Office of the Ombudsman is due to the fault,
negligence or petition of the respondent, in which case the period
of such delay shall not be counted in computing the period of
suspension herein provided.
It is clear that the purpose of the amendment is to disallow the
payment of salaries for the period of suspension. This conclusion is
in accord with the rule of statutory construction that As a rule, the amendment by deletion of certain words or phrases
in a statute indicates that the legislature intended to change the
meaning of the statute, for the presumption is that the legislature
would not have made the deletion had the intention been not in
effect a change in its meaning. The amended statute should
accordingly be given a construction different from that previous to
its amendment.[12]

The separate opinion of Justice Panganiban pays no heed to the

evident legislative intent to deny payment of salaries for the
preventive suspension pending investigation.
First, it says that to deny compensation for the period of
preventive suspension would be to reverse the course of decisions
ordering the payment of salaries for such period. However, the
cases[13] cited are based either on the former rule which expressly
provided that "if the respondent officer or employee is exonerated,
he shall be restored to his position with full pay for the period of
suspension"[14] or that "upon subsequent reinstatement of the
suspended person or upon his exoneration, if death should render
reinstatement impossible, any salary so withheld shall be paid," [15]
or on cases which do not really support the proposition advanced.
Second, it is contended that the exoneration of employees who
have been preventively suspended is proof that there was no
reason at all to suspend them and thus makes their preventive
suspension a penalty.
The principle governing entitlement to salary during suspension is
cogently stated in Floyd R. Mechem's A Treatise on the Law of
Public Offices and Officers as follows:
864. Officer not entitled to Salary during Suspension from
Office. - An officer who has been lawfully suspended from his
office is not entitled to compensation for the period during which
he was so suspended, even though it be subsequently determined
that the cause for which he was suspended was insufficient. The
reason given is "that salary and perquisites are the reward of
express or implied services, and therefore cannot belong to one
who could not lawfully perform such services." [16]
Thus, it is not enough that an employee is exonerated of the
charges against him. In addition, his suspension must be
unjustified. The case of Bangalisan v. Court of Appeals itself
similarly states that "payment of salaries corresponding to the

14

period [1] when an employee is not allowed to work may be decreed

if he is found innocent of the charges which caused his suspension
and [2] when the suspension is unjustified."[17]
The preventive suspension of civil service employees charged with
dishonesty, oppression or grave misconduct, or neglect of duty is
authorized by the Civil Service Law. It cannot, therefore, be
considered "unjustified," even if later the charges are dismissed so
as to justify the payment of salaries to the employee concerned. It
is one of those sacrifices which holding a public office requires for
the public good. For this reason, it is limited to ninety (90) days
unless the delay in the conclusion of the investigation is due to the
employee concerned. After that period, even if the investigation is
not finished, the law provides that the employee shall be
automatically reinstated.
Third, it is argued in the separate opinion that to deny employees
salaries on the "frivolous" ground that the law does not provide for
their payment would be to provide a "tool for the oppression of
civil servants who, though innocent, may be falsely charged of
grave or less grave administrative offenses." Indeed, the possibility
of abuse is not an argument against the recognition of the
existence of power. As Justice Story aptly put it, "It is always a
doubtful course, to argue against the use or existence of a power,
from the possibility of its abuse. . . . [For] from the very nature of
things, the absolute right of decision, in the last resort, must rest
somewhere - wherever it may be vested it is susceptible of
abuse."[18] It may be added that if and when such abuse occurs,
that would be the time for the courts to exercise their nay-saying
function. Until then, however, the public interest in an upright civil
service must be upheld.
Finally, it is argued that even in the private sector, the law
provides that employees who are unjustly dismissed are entitled to
reinstatement with full pay. But that is because R.A. No. 6715

expressly provides for the payment to such employees of "full

backwages, inclusive of allowances, and . . . other benefits or their
monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual
reinstatement."[19] In the case of the public sector, as has been
noted, the provision for payment of salaries during the preventive
suspension pending investigation has been deleted.
B. Right to Compensation for Preventive Suspension Pending
Appeal if Employee is Exonerated
But although we hold that employees who are preventively
suspended pending investigation are not entitled to the payment of
their salaries even if they are exonerated, we do not agree with
the government that they are not entitled to compensation for the
period of their suspension pending appeal if eventually they are
found innocent.
Preventive suspension pending investigation, as already discussed,
is not a penalty but only a means of enabling the disciplining
authority to conduct an unhampered investigation. On the other
hand, preventive suspension pending appeal is actually punitive
although it is in effect subsequently considered illegal if
respondent is exonerated and the administrative decision finding
him guilty is reversed. Hence, he should be reinstated with full pay
for the period of the suspension. Thus, 47(4) states that
respondent "shall be considered as under preventive suspension
during the pendency of the appeal in the event he wins." On the
other hand, if his conviction is affirmed, i.e., if he is not
exonerated, the period of his suspension becomes part of the final
penalty of suspension or dismissal.
It is precisely because respondent is penalized before his sentence
is confirmed that he should be paid his salaries in the event he is
exonerated. It would be unjust to deprive him of his pay as a result
of the immediate execution of the decision against him and
continue to do so even after it is shown that he is innocent of the

15

charges for which he was suspended. Indeed, to sustain the

government's theory would be to make the administrative decision
not only executory but final and executory. The fact is that 47(2)
and (4) are similar to the execution of judgment pending appeal
under Rule 39, 2 of the Rules of Court. Rule 39, 5 provides that
in the event the executed judgment is reversed, there shall be
restitution or reparation of damages as equity and justice may
require.
Sec. 47 of the present law providing that an administrative
decision meting out the penalty of suspension or dismissal shall be
immediately executory and that if the respondent appeals he shall
be considered as being merely under preventive suspension if
eventually he prevails is taken from 37 of the Civil Service Decree
of 1975 (P.D. No. 807). There was no similar provision in the Civil
Service Act of 1959 (R.A. No. 2260), although under it the
Commissioner of Civil Service could order the immediate
execution of an administrative decision in the interest of the public
service.[20] Nor was there provision for immediate execution of
administrative decisions ordering dismissal or suspension in 695
of the Administrative Code of 1917, as amended by C.A. No. 598,
1.[21] Nonetheless, under R.A. No. 2260 the payment of salaries
was ordered in cases in which employees were found to be
innocent of the charges[22] or their suspension was held to be
unjustified, because the penalty of suspension or dismissal was
executed without a finding by the Civil Service Commissioner that
it was necessary "in the interest of the public service." [23] On the
other hand, payment of back salaries was denied where it was
shown that the employee concerned was guilty as charged and the
immediate execution of the decision was ordered by the Civil
Service Commissioner "in the interest of the public service." [24]
Nothing in what has thus far been said is inconsistent with the
reason for denying salaries for the period of preventive
suspension. We have said that an employee who is exonerated is

not entitled to the payment of his salaries because his suspension,

being authorized by law, cannot be unjustified. To be entitled to
such compensation, the employee must not only be found innocent
of the charges but his suspension must likewise be unjustified. But
though an employee is considered under preventive suspension
during the pendency of his appeal in the event he wins, his
suspension is unjustified because what the law authorizes is
preventive suspension for a period not exceeding 90 days. Beyond
that period the suspension is illegal. Hence, the employee
concerned is entitled to reinstatement with full pay. Under existing
jurisprudence, such award should not exceed the equivalent of five
years pay at the rate last received before the suspension was
imposed.[25]
II. PRIVATE RESPONDENTS ENTITLED TO BACK SALARIES
ALTHOUGH FOUND GUILTY OF VIOLATION OF OFFICE RULES
AND REGULATIONS AND REPRIMANDED
Private respondents were exonerated of all charges against them
for acts connected with the teachers' strike of September and
October 1990. Although they were absent from work, it was not
because of the strike. For being absent without leave, they were
held liable for violation of reasonable office rules and regulations
for which the penalty is a reprimand. Their case thus falls squarely
within ruling in Bangalisan, which likewise involved a teacher
found guilty of having violated reasonable office rules and
regulations. Explaining the grant of salaries during their
suspension despite the fact that they were meted out reprimand,
this Court stated:
With respect to petitioner Rodolfo Mariano, payment of his
backwages is in order. A reading of the resolution of the Civil
Service Commission will show that he was exonerated of the
charges which formed the basis for his suspension. The Secretary
of the DECS charged him with and he was later found guilty of
grave misconduct, gross neglect of duty, gross violation of the Civil
Service Law, rules and regulations and reasonable office
regulations, refusal to perform official duty, gross insubordination,

16

conduct prejudicial to the best interest of the service, and absence

without official leave, for his participation in the mass actions on
September 18, 20 and 21, 1990. It was his alleged participation in
the mass actions that was the basis of his preventive suspension
and, later, his dismissal from the service.
However, the Civil Service Commission, in the questioned
resolution, made a finding that Mariano was not involved in the
"mass actions" but was absent because he was in Ilocos Sur to
attend the wake and interment of his grandmother. Although the
CSC imposed upon him the penalty of reprimand, the same was for
his violation of reasonable office rules and regulations because he
failed to inform the school of his intended absence and neither did
he file an application for leave covering such absences.
Under Section 23 of the Rules Implementing Book V of Executive
Order No. 292 and other pertinent civil service laws, in violations
of reasonable office rules and regulations, the first offense is
punishable by reprimand. To deny petitioner Mariano his back
wages during his suspension would be tantamount to punishing
him after his exoneration from the charges which caused his
dismissal from the service.[26]
In Jacinto v. Court of Appeals,[27] a public school teacher who was
found guilty of violation of reasonable office rules and regulations
for having been absent without leave and reprimanded was given
back salaries after she was exonerated of the charge of having
taken part in the strikes.
Petitioner Secretary of Education contends, however, that
respondents Abad, Bandigas, and Somebang signed a letter in
which they admitted having taken part in the mass action. This
question cannot be raised now. The Civil Service Commission gave
no weight to this letter in view of individual letters written by the
three citing reasons for their absences, to wit: Abad, because she
decided to stay home to correct student papers; Bandigas, because

she had to accompany her brother to the Commission on

Immigration, and Somebang because of "economic reasons."
Petitioner did not appeal from this ruling. Hence, he is bound by
the factual findings of the CSC and the appellate court.
WHEREFORE, the decision, dated September 3, 1996, as
amended by the resolutions, dated July 15, 1997 and October 6,
1997, of the Court of Appeals, is hereby AFFIRMED with the
MODIFICATION that the award of salaries to private respondents
shall be computed from the time of their dismissal/suspension by
the Department of Education, Culture, and Sports until their
actual reinstatement, for a period not exceeding five years.
SO ORDERED.
Romero, Bellosillo, Vitug, Kapunan, Quisumbing, Purisima, and
Gonzaga-Reyes, JJ., concur.
Davide, C.J., concurs in the result and subject to the modification
expressed in the separate opinion of Justice Panganiban.
Panganiban, J., please see separate opinion.
Puno, Pardo, Buena, and Ynares-Santiago, JJ., join Justice
Panganiban's separate opinion.
Melo, J., in the result.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-27761 December 6, 1927
PHILIPPINE SUGAR CENTRALS AGENCY, plaintiff-appellee,
vs.
THE INSULAR COLLECTOR OF CUSTOMS, defendant-appellant.

17

Attorney-General Jaranilla for appellant.

Dionisio de Leon for appellee.
STATEMENT
This case had its origin in the Court of First Instance of Manila where it was
tried and submitted upon the following stipulation of facts:
Come now the parties, plaintiff and defendant, in the above-entitled
cause, by their undersigned attorneys, and respectfully submit to this
Honorable Court the following statement of facts, which the court
may find as true and enter judgment thereon:
I. That the plaintiff at all times and in all transactions herein
mentioned have always acted as representative and attorney-in-fact
of the Ma-ao Sugar Central Co.
II. That in May, 1926, the plaintiff herein shipped at Pulupandan,
Occidental Negros, on the steamship Hannover 5,124,416 gross
kilos of centrifugal sugar consigned to the United States.
III. That said sugar was laden through a wharf built, owned and
maintained solely by the Ma-ao Sugar Central Company, a domestic
corporation, on a foreshore public land at Pulupandan, Occidental
Negros, leased to it by the Government of Philippine Islands.
IV. That the defendant herein through the collector of customs of the
collection district of Iloilo, assessed and collected wharfage dues on
sugar mentioned in paragraph II hereof at P2 per thousand gross
kilos or a total amount of P10,248.84.
V. That the plaintiff paid, under protest, the said amount of
P10,248.84 but its protest was overruled by the defendant.
VI. It is further agreed by the parties herein that Pulupandan through
which the sugar in question was exported, was at the time of the
shipment, and is now, a port of entry of the Philippine Islands, having
been declared as such by Act No. 3106.
In which judgment was rendered for the plaintiff for P10,248.84, the amount
of plaintiff's claim, without costs.

I. The lower court erred in declaring that the plaintiff was not bound
to pay duty as a charge for wharfage on the goods exported through
Pulupandan, a port of entry of the Philippine Islands, since the wharf
used by the plaintiff for shipping said goods did not belong to the
Government.
II. The lower court erred in ordering the defendant to return to the
plaintiff the sum of P10,248.84 in question instead of dismissing the
complaint with costs against the plaintiff.
III. The lower court erred in not granting a new trial.

JOHNS, J.:
As tersely stated by the trial judge, the question at issue is whether or not the
Government of the Philippine Islands can legally collect the duty of $1 per
gross ton of 1,000 kilos as a charge for wharfage on goods, wares and
merchandise exported through a port of entry of the Philippine Islands or
shipped therefrom to the United States, where it appears that the
Government does not own the wharf and that the sugar in question was
loaded from a wharf which was the sole property of a private person.
Section 16 of the original Customs Tariff of November 15, 1901, is as follows:
There shall be levied and collected upon goods of all kinds exported
through the ports of entry of the Philippine Islands a duty of seventyfive cents ($0.75) per gross ton of 1,000 kilos as a charge for
wharfage and for harbor dues whatever be the port of destination or
nationality of the exporting vessel.
That law was enacted by the United States Philippine Commission
by the authority of the President of the United States, and with the
approval of the Secretary of War. It was reenacted in section 16 of an
Act of Congress of the United States of March 3, 1905, entitled "An
Act to revise and amend the Tariff laws of the Philippine Islands and
for other purposes," as amended by the Act of Congress of February
26, 1906, entitled "An Act to amend an Act entitled "An Act to revise
and amend the Tariff laws of the Philippine Islands, and for other
purposes," approved March third, nineteen hundred and five.

On appeal the defendant assigns the following errors:

18

August 5, 1909, the Congress of the United States passed what is known as
the "Philippine Tariff Act of 1909," entitled "An Act to raise revenue for the
Philippine Islands, and for other purposes," section 14 of which, under the
head of "Wharfage," is as follows:
That there shall be levied and collected upon all articles, goods,
wares, or merchandise, except coal, timber and cement, the product
of the Philippine Islands, exported through ports of entry of the
Philippine Islands, or shipped therefrom to the United States or any
of its possessions, a duty of one dollar per gross ton of one thousand
kilos, as a charge for wharfage, whatever be the port of destination
or nationality of the exporting vessel: Provided, that articles, goods,
wares, or merchandise imported, exported, or shipped in transit for
the use of the Government of the United States, or of that of that of
the Philippine Islands, shall be exempted from the charges
prescribed in this section.
By a comparison, it will be seen that the law of 1909 changes the duty of
seventy-five cents ($0.75) per gross ton of 1,000 kilos to $1 per gross ton,
and that the words "as a charge for wharfage and for harbor dues" now read
"as a charge for wharfage." That is to say, that the words "and for harbor
dues," found in the Customs Tariff of 1901 and 1905, were omitted from the
Tariff Act of 1909.
The question now before the court is the meaning of the words "as a charge
for wharfage," as those words are used in section 14 of the Tariff Act of 1909.
The law in question is an Act of Congress, and it is a revenue law for the
Philippine Islands.
In Words and Phrases, volume 8, page 7435, it is said:
Wharfage is a charge or rent for the temporary use of a wharf.
Wharfage is the fee paid for tying vessels to a wharf, or for loading
goods on a wharf of shipping them therefrom.
Wharfage is money due or money actually paid for the privilege of
landing goods upon or loading a vessel, while moored, from a wharf.
Wharfage or keyage is a toll or duty for the pitching or lodging of
goods upon a wharf, or pay for taking goods into a boat and from
thence.

By the same author and in the same volume, on page 6997, the word
"Tonnage" is defined to be the cubical contents or burden of a ship in
tons, or the amount of weight which one or several ships will carry.
And on page 6998, it is said:
A "duty on tonnage" is a duty or tax or burden imposed under the
authority of the state, which is, by the law imposing it, to be
measured by the capacity of the vessel, and is in its essence
contribution claimed for the privilege of arriving and departing from a
port of the United States.
And on page 6999, it is said:
A "duty on tonnage" is a duty on a vessel for the privilege of entering
a port, and does not prohibit wharfage.
A "duty of tonnage," within the constitutional provision that no state
shall, without the consent of Congress, lay any "duty of tonnage," is
a charge, tax or duty on a vessel for the privilege of entering a port;
and though usually levied according to tonnage, and so acquiring its
name, it is not confined to that method of rating the charge. It does
not include a charge for wharfage.
In the syllabus to the case of Cincinnati, Portsmouth, Big Sandy and
Pomeroy Packet Company vs. Board of Trustee of the Town of Catlettsburg,
Kentucky (26 Law, ed., 1169), the Supreme Court of the United States laid
down this rule:
3. A city or town, situated on navigable waters, may build and own a
wharf suitable for vessels to land at, and exact a reasonable
compensation for the facilities thus afforded to vessels by the use of
such wharves, and this is no infringement of the constitutional
provisions concerning tonnage taxes and the regulation of
commerce.
4. Appropriate regulations prescribing places for the landing of
vessels and placing the matter under the control of a wharfmaster or
other officer, whose duty is to look after it, are valid and
constitutional, and the States may prescribe them until Congress
assumes to do so.

19

And on page 1170 of the opinion, it is said:

The effort of the pleader, undoubtedly, is to bring the case with the
constitutional prohibition of a tax upon tonnage.
If, however, the Trustees of the Town had a right to compensation for
the use of the improved landing or wharf which they had made, it is
no objection to the ordinance fixing the amount of this compensation
that it was measured by the size of the vessel, and that this size was,
ascertained by the tonnage of each vessel. It is idle, after the
decisions we have made, to call this a tax upon tonnage
(Cannon vs. New Orleans, 20 Wall., 577 [87 U. S., XXII 417]; Packet
Co. vs. St. Louis, 100 U. S., 428 [XXV, 690]; Packet Co. vs. Keokuk,
95 U. S., 80 [XXIV, 377]; Guy vs. Baltimore, 100 U. S., 442 [XXV,
746].)
Still less ground exists for holding that the penalties imposed for a
refusal to obey the rules for places of landing and the orders of the
wharfmaster on that subject, are taxes on tonnage.
Nor is there any room to question the right of a city or town situated
on navigable waters to build and own a wharf suitable for vessels to
land at, and exact a reasonable compensation for the facilities thus
afforded to vessels by the use of such wharves, and that this is no
infringement of the constitutional provisions concerning tonnage
taxes and the regulation of commerce, see cases above cited.
An on page 1171, it is said:
We are not aware that in any instance Congress has attempted to
exercise it. If it be a regulation of Commerce under the power
conferred on Congress by the Constitution, that body has signally
failed to provide any such regulation. It belongs, also, manifestly, to
that class of rules which, like pilotage and some others, can be most
wisely exercised by local authorities, and in regard to which no
general rules, applicable alike to all parts and landing places, can be
properly made. If a regulation of commerce at all, it comes within that
class in which the States may prescribe rules until Congress
assumes to do so. (Cooley vs. Board of Wardens, 12 How., 299;
Gilman vs. Philadelphia, 3 Wall., 727 [70 U. S., XVIII, 100];
Crandall vs. Nevada, 6 Wall., 42 [73 U.S., XVIII, 746];
Pound vs. Turck, 95 U. S., XXIV, 526].)

There is, probably, not a city or large town in the United States,
situated on a navigable water, where ordinances, rules and
regulations like those of the Town of Catlettsburg are not made and
imposed by authority derived from state legislation, and the long
acquiescence in this exercise of the power, and its absolute
necessity, are arguments almost conclusive in favor of its rightful
existence.
In the syllabus to the case of Parkersburg an Ohio River Transportation
Company vs. City of Parkersburg (27 Law, ed., 584), the Supreme Court of
the United States laid down this rule:
2. The ordinance in this case imposed certain rates of wharfage on
vessels "That may discharge or receive freight, or land on or anchor
at or in front of any public landing or wharf belonging to the city, for
the purpose of discharging or receiving freight;" held that the
ordinance only intended to charge for the use of a wharf, and not for
entering the port, or lying at anchor in the river.
3. Wharfage is a charge for the use of wharf, made by the owner
therefor by way of rent, or compensation; a duty of tonnage is a tax
or duty charged for the privilege of entering, or loading or lying in, a
port or harbor, and can only be imposed by the government.
5. That, although wharves are related to commerce and navigation
as aids and conveniences, yet being local in their nature, and
requiring special regulations for particular places, in the absence of
Congressional legislation on the subject, the regulation thereof
properly belongs to the States in which they are situated.
And on page 586 of the opinion, it is said:
But whether a charge imposed is a charge of wharfage or a duty of
tonnage must be determined by the terms of the ordinance or
regulation which imposes it. They are not the same thing; a duty of
tonnage is a charge for the privilege of entering or trading or lying in
a port or harbo; wharfage is a charge for the use of a wharf.
Exorbitant wharfage may have a similar effect as a burden on
commerce as a duty of tonnage has; but it is exorbitant wharfage
and not a duty of tonnage; and the remedy for the one is different
from the remedy for the other. The question whether it is the one or
the other is not one of intent, but one of fact and law; of fact, as
whether the charge is made for the use of a wharf, or for entering the

20

port; of law, as whether, according as the fact is shown to exist, it is

wharfage or a duty of tonnage.
And on page 587, it is said:
When the Constitution declares that "No State shall, without the
consent of Congress, lay and duty of tonnage;" and when Congress,
in section 4220 of the Revised Statutes, declares that "No vessel
belonging to any citizen of the United States, trading from one port
within the United States to another port within the Unites States, or
employed in the bank, whale or other fisheries, shall be subject to
tonnage, tax or duty, if such vessel be licensed, registered or
enrolled;" they mean by the phrases, "duty of tonnage," and "tonnage
tax or duty," a charge, tax or duty on a vessel for the privilege of
entering a port; and although usually levied according to tonnage,
and so acquiring its name, it is not confined to that method of rating
the charge. It has nothing to do with wharfage, which is a charge
against a vessel for using or lying at a wharf or landing.
And on page 588, it is said:
Now wharves, levees and landing places are essential to commerce
by water, no less than a navigable channel and a clear river. But they
are attached to the land; they are private property, real estate; and
they are primarily, at least, subject to the local states loss. Congress
has never yet interposed to supervise their administration; it has
hitherto left this exclusively to the States. There is little doubt,
however, that Congress, if it saw fit, in case of prevailing abuses in
the management of wharf property, abuses materially interfering with
the prosecution of commerce, might interpose and make regulations
to prevent such abuses. When it shall have done so, it will be time
enough for the courts to carry its regulations into effect by judicial
proceedings properly instituted. But until Congress has acted, the
courts of the United States cannot assume control over the subject
as a matter of federal cognizance. It is the Congress, and not the
judicial department, to which the Constitution has given the power to
regulate commerce with foreign Nations, and among the several
States. The courts can never take the initiative on this subject.
That is to say, it is the law of the land that even a municipality has the legal
right to pass and enforce an ordinance requiring a vessel to pay wharfage tax
for the use of a wharf on a navigable stream within the city limits, and such
reasonable charge is not a duty or charge on Untied States commerce. But in
the instant case, we have an Act of Congress which specifically authorizes

the levying of the duty in question "as a charge for wharfage." In construing
the meaning of those words as used in that law, we must take into
consideration the relative situation and the conditions existing at the time the
law was enacted. That is to say, it is the law of the land that even a
municipality on a navigable river in a State of the United States has the legal
right to pass and enforce an ordinance to require a vessel to pay wharfage
tax for the use of a wharf within the city limits, and that a tax even by a city
for such a purpose does not interfere with, and is not a charge on, United
States commerce.
It is also the law of the land that the United States Congress in its discretion
has the power to levy and collect a tonnage tax ever though it would interfere
with the United States commerce. But in the instant case, we have an Act of
Congress which specifically authorizes the Government of the Philippine
Islands to levy and collect the duty in question "as a charge for wharfage."
It is vigorously contended that by reason of the fact that the sugar in question
was loaded from a private wharf and not from a Government wharf, that the
Government has no legal right to levy and collect the duty "as a charge for
wharfage." In construing the law now in question, we should take into
consideration its history, relative situation and the conditions existing at the
time it was enacted.
As stated, the original Customs Tariff of 1901 was enacted by the Philippine
Commission under the authority from the President of the United States. At
the time of its enactment, it is a matter of common knowledge that the
Government of the Philippine Islands did not have, own or operate a pier or
wharf anywhere or at any place, a fact which must have been known to the
Commission which enacted the law.
It is stated in the brief for the Attorney-General and not denied in the brief for
the appellee, that the two oldest piers of the Insular Government, Nos. 3 and
5, were first opened in the year 1910. That prior to that time, and because
there was no wharves or piers, export cargoes by means of lights were
brought to the sides of vessels that were anchored in Manila Bay.
Notwithstanding that the fact the wharfage tax in question has been
continuously levied and collected from 1901 up to the present time. That is to
say, in 1901 the Philippine Commission, which enacted the law, knew or
must have known that there was not a single pier or wharf in the Philippine
Islands, and yet without such wharves or piers, the Government has at all
times levied and collected the tax in question, and it if fair to assume that
from and out of the money derived from such sources, it has since erected
and constructed piers and wharves in all of the large cities of its principal

21

ports of entries at a cost of millions of pesos, and it is a matter of common

knowledge that pier 7 recently constructed in the City of Manila cost about
P12,979,824.99, and that it is reputed to b e the most modern, best and fines
dock in the Orient.

government is not entitled to collect the money in question "as a charge for
wharfage." The long acquiescence in its construction and the far reaching
effect of such a decision makes it imperative for this court to sustain the law,
if there are any reasonable grounds upon which it can be done.

It further appears from out own records and reports that during all of this time
the tax in question has been paid without any protest or objection, and that
the first time that the law now in question was ever presented to this court
was in the case of Compaia General de Tabacos vs. Collector of
Customs (46 Phil., 8), in which an attack was made on the constitutionality of
the law, and its validity was sustained by this court. The question now
presented was not then decided because it did not appear from the agreed
statement of facts that the articles upon which the defendant collected the
duty had or had not passed through a Government wharf. That case was
decided on April 7, 1924.

This rule is well stated in Sutherland on Statutory Construction, volume 2,

page 889, where it is said:

The instant case is the first and only case in which the question now under
consideration was ever presented. Hence, we have a law which since 1901
has been construed by its officials to mean that the Government of the
Philippine Islands is entitled to levy and collect a duty of $1 per gross ton "as
a charge for wharfage" upon all articles, goods, wares and merchandise
exported through the ports of entry of the Philippine Islands, and that
construction has been acquiesced in and accepted, and the money paid
without any protest or objection for twenty-six years, for many years of which
the Government never even owned or operated a wharf.
It also appears that Pulupandan, the place from which the sugar was
shipped, was made a port of entry of the Philippine Islands on March 17,
1923, and that on January 19, 1925, the Legislature appropriated P750,000
for improvements made and to be made in that port, which were to consist
not only of the building of a wharf, but the construction of breakwaters, sea
walls and the dredging of the harbor.
When we consider that the tax in question has at all times for twenty-six
years been levied and collected by the Government both before it owned or
operated any wharf, and that is has spent millions of pesos in the
construction of wharves in its principal ports of entries, and that from the
recent port of Pulupandan and for sugar that was shipped from that port on
the steamship Hannover in the year 1926 only the tax in question amount to
P10,284.84, the importance of the instant case and its far reaching effect
upon the finances of the Government of the Philippine Islands stands out in
bold relief and becomes very apparent, and this court is now called upon to
overthrow that long continued constructions, and in legal effect to hold that,
because the sugar was shipped through a private owned wharf, the

"The practical construction given to a doubtful statute by the department or

officers whose duty it is to carry it into execution is entitled to great weight
and will not be disregarded or overturned except for cogent reasons, and
unless it is clear that such construction is erroneous." Citing numerous
decisions.
In the case of Kelly vs. Multnomah County (18 Ore., 356, 359; 22 Pac.,
1110), the Supreme Court of Oregon said:
In all cases where those persons whose duty it is to executed a law
have uniformly given it a particularly construction, and that
construction has been acquiesced in and acted upon for a long time,
it is a contemporary exposition of the statute, which always
commands the attention of the courts, and will be followed unless it
clearly and manifestly appears to be wrong.
Following which, on page 890, Sutherland says:
The legislature is presumed to be cognizant of such construction,
and after long continuance, without any legislation evincing its
dissent, court will consider themselves warranted in adopting that
construction.
The same author, on page 883, says:
Surrounding facts and conditions. Mischief to be remedied. In
order to ascertain the purpose or intentions, if it is not clearly
expressed in a statute, or that such purpose or intention may be
carried into effect, the court will take notice of the history of its terms
when it was enacted. It is needful in the construction of all
instruments to read them in view of the surrounding facts. To
understand their purport and intended application, one should, as far
as possible, be placed in a situation to see the subject from the
maker's standpoints and study his language with that outlook.
Statutes are no exception. The court may look to the surrounding
circumstances.

22

And on pages 885 and 886, he says:

The mischief intended to be removed or suppressed or the cause of
necessity of any kind which induced the enactment of a law are
important factors to be considered in its construction. "The purpose
for which the law was enacted is a matter of prime importance in
arriving at a correct interpretation of its terms."

During the many years that the statute before us has been in
existence, since it first appeared, substantially in its present form, in
section 142 of Act No. 1189, passed in 1904, no attempt has been
made, until this case arose, to construe it as not applying to fish
grown in ponds, and much weight should be given to this long
continued administrative interpretation.
See also In re Allen (2 Phil., 630), where it is held that:

In the case of Cameron vs. Chicago, Milwaukee & St. Paul Ry. Co. (63
Minnesota, 384), on page 387 of the opinion that court said:
This statute has been in force for nearly 20 years, and attorney's
fees have been repeatedly allowed to the plaintiff in actions brought
under it. Two such cases have been heard on appeal in this court
(see Coleman vs.St. Paul, M. & M. R. Co., 38 Minn., 260; 36 N. W.,
638; Scott vs. Minneapolis, St. P. & Ste. M. R. Co., 42 Minn., 179; 43
N. W., 966); and, so far as we are advised, this is the first time any
question as to the constitutionality of the provisions of this statute
allowing reasonable attorney's fees has ever been suggested. This
acquiescence, without question, of bench and bar, in the validity of
the statute, is significant; and it is entitled to controlling weight if the
question as to the validity of the statute is doubtful.
The same principle is laid down in Molina vs. Rafferty (38 Phil., 167), on
page 169 in which this court makes the following quotation from Cooley on
Taxation, volume 1, 3d ed., p. 450:
The underlying principle of all construction is that the intent of the
legislature should be sought in the words employed to express it,
and that when found it should be made to govern, . . . if the words of
the law seem to be doubtful import, it may then perhaps become
necessary to look beyond them in order to ascertain what was in the
legislative mind at the time the law was enacted; what the
circumstances were, under which the action was taken; what evil, if
any, was meant to be redressed; . . . And where the law has
contemporaneously been put into operation, and in doing so a
construction has necessarily been put upon it, this construction,
especially if followed for some considerable period, is entitled to
great respect, as being very probably a true expression of the
legislative purpose, and is not lightly to be overruled, although it is
not conclusive.
And on page 173 of the opinion, it is said:

Courts will give weight to the contemporaneous construction placed

upon a statute by the executive officers whose duty it is so enforce it,
and, unless such interpretation is clearly erroneous, will ordinarily be
controlled thereby.
The purpose of the law was to authorize the Government of the Philippine
Islands to levy a duty of $1 per gross ton "as a charge for wharfage." Being
an Act of Congress, the law would be valid if it did not specify the purpose for
which the duty was to be levied and collected. Without such a provision it
would then be construed as a duty on tonnage, and Congress would have a
right to enact that kind of a law. The omission from the Act of 1909 of the
words "and for harbor dues" in the previous law is very significant and would
clearly indicate that it was not the intent of Congress under the Act of 1909
that duty should be levied on tonnage.
In view of the fact that in 1901 there were no wharves or piers in the
Philippine Islands, and of the conditions then existing and the enactment of
the law in 1901 under the same conditions, and its reenactment by Congress
in 1905 under similar conditions, and of the present law of 1909 and of the
continuous construction of the law placed upon it by the Government
officials, and the further fact that the duty in question has been paid without
any protest or objection for twenty-six-years, during which time the
Government has expanded millions of pesos in the construction of wharves,
and that it now owns and operates large an extensive wharves in all of its
principal ports of entry and that Congress has never seen fit to repeal the law
of 1909, we are forced to the conclusion that it was the purpose and intent of
the act in question to give the Government of the Philippine Islands authority
to levy and collect such a duty of $1 per gross ton, and that the money
derived from such sources should be used, deemed and treated as a trust
fund, for the purpose of acquiring and constructing wharves by the
Government of the Philippine Islands. In truth and in fact, that is what has
been done in all of its principal ports of entry.
Pulupandan was made a port of entry of March 17, 1923. It further appears
that in line with its policy, the Legislature on January 19, 1925, made an

23

appropriation of P750,000 for improvements made and to be made in that

port, which were to consist not only of the building of a wharf, but the
construction of breakwaters, sea walls and the dredging of the harbor.
Based on the conditions existing in 1901 and as they exist now, we have a
legal right to assume that the money derived from such sources has been
appropriated and used by the Government for the erection and construction
of wharves and the improvement of its harbors.
The construction for which plaintiff contends would overthrow and destroy the
whole system of the Government, in and by which millions of pesos have
been levied and collected an expanded in the construction of Government
wharves, and it would have defeated the construction of the Government
wharf at Pulupandan. The law in question could have been repealed or
changed at any time by an Act of Congress. In view of the long continuous
construction which has been placed upon it by the government officials, and
for which they now contend, the very fact that Congress has not seen fit to
repeal or change the law is a very potent argument in favor of sustaining that
construction. The language of the Act could have been made more specific
and certain, but in view of its history, its long continuous construction, and
what has been done and accomplished by and under it, we are clearly of the
opinion that the Government is entitled to have and receive the money in
question, even though the sugar was shipped from a private wharf.
The judgment of the lower court is reversed, with costs. So ordered.
Avancea, C.J., Street, Malcolm, Villamor, Ostrand and Villa-Real, JJ.,
concur.

252 Phil. 73
EN BANC
G.R. No. 80587, February 08, 1989
WENPHIL CORPORATION, PETITIONER, VS. NATIONAL
LABOR RELATIONS COMMISSION AND ROBERTO

MALLARE, RESPONDENTS.
DECISION
GANCAYCO, J.
Once again the dismissal of an employee without affording his due
process is brought to the attention of this Court by this petition.
Private respondent was hired by petitioner on January 18, 1984 as
a crew member at its Cubao Branch. He thereafter became the
assistant head of the Backroom department of the same branch. At
about 2:30 P.M. on May 20, 1985 private respondent had an
alteration with a co-employee. Job Barrameda, as a result of which
he and Barrameda were suspended on the following morning and
in the afternoon of the same day a memorandum was issued by the
Operations Manager advising private respondent of his dismissal
from the service in accordance with their Personnel Manual. The
notice of dismissal was served on petitioner for unfair labor
practice, illegal suspension and private respondent on May 25,
1985.
Thus private respondent filed a complaint against illegal dismissal.
After submitting their respective position papers to the Labor
Arbiter and as the hearing could not be conducted due to repeated
absence of counsel for respondent, the case was submitted for
resolution, Thereafter a decision was rendered by the Labor
Arbiter on public respondent NLRC upon petitioner posting a bond
of December 3, 1986 dismissing the complaint for lack of merit.
Private respondent appealed to the National Labor Relations
Commission (BNLRC) wherein in due course a decision was
rendered on December 16, 1987 setting aside the appealed
decision and ordering the reinstatement of private respondent to
his former position without loss of minority and other related

24

benefits and one (1) year backwages without qualification and

deduction.
Hence the herein petition for certiorari with preliminary injunction
and/or restraining order wherein petitioner alleges that the public
respondent NLRC committed a grave abuse of discretion in
rendering its decision contrary to the evidence on record.
On December 2, 1987, the court issued a restraining order as
prayed for in the petitioner enjoining the enforcement of the
decision dated October 16, 1987 of P20,000.00.
The theory of the petitioner is that on the aforesaid date, May 20,
1985, when private respondent and Barrameda had a
misunderstanding about tending the Sales Bar, private respondent
slapped Barrameda's cap, stepped on his foot and picked up the
ice scooper and brandished it against the latter. Marijo B. Kolimlim
who was a management trainee tried to pacify private respondent
but he defied her so Kalimlim reported the incident to the
assistant manager, Delilah C. Hermosura, who immediately asked
private respondent to see her. Private respondent refused to see
Hermosura and it took the security guard to bring him to her.
Private respondent then shouted and uttered profane words
instead of making an explanation before her. He stated the matter
should be settled only by him and Barrameda. The following day
Kalimlim and Hermosura submitted a report on the incident and
recommended the imposition of the appropriate penalties on both.
It was the store manager who issued a report seting out the
penalty of suspension on the two until further notice in the
following morning. Later that day the Operations Manager issued
a memorandum advising Barrameda of one (1) week suspension
and the dismissal of private respondent from the service.
The main thrust of the petition is that under the Personnel Manual
of petitioner which had been read and understood by private

respondent, private respondent waived his right to the

investigation. It is provided therein that "INVESTIGATION"
If the offense is punishable with a penalty higher than suspension
for fifteen (15) days, upon the request of the erring employee,
there shall be convened an investigation board composed of the
following:
1. The Parlor Manager or Supervisor on duty when the incident
occurred.
2. The General Manager or the Assistant Manager.
The investigation board shall discuss the merits of the case and
shall issue the ruling, which shall be final and conclusive. (e. g.,
Personnel Manual: Italics supplied.)
From the foregoing it appears that an investigation shall only be
conducted if the offense committed by the employee is punishable
with the penalty higher than suspension of fifteen (15) days and
the employee request for an investigation of the incident.
Petitioner alleges that private respondent not having asked for an
investigation he is thus deemed to have waived his right to the
same. Petitioner avers that immediately after the incident when
private respondent was asked to see Hermosura, he was defiant
and showed that he was not interested to avail of an investigation.
The contention of petitioner is untenable. The incident happened
on May 20, 1985 and right then and there as afore repeated on the
following day private respondent was suspended in the morning
and was dismissed from the service in the four (4) days later.
The defiant attitude of private respondent immediately after the
incident amounted to insubordination. Nevertheless his refusal to
explain his side under the circumstances cannot be considered as

25

a waiver of his right to an investigation.

Labor Code.

Although in the Personnel Manual of the petitioner, it states that

an erring employee must request for an investigation it does not
thereby mean that petitioner is thereby relieved of the duty to
conduct an investigation before dismissing private respondent.
Indeed said provision of the Personnel Manual of petitioner which
may effectively deprive its employees of the right to due process is
clearly against the law and is hence null and void. The security of
tenure of a laborer or employee is enshrined in the Constitution,
the Labor Code and other related laws.[1]

The failure of petitioner to give private respondent the benefit of a

hearing before he was dismissed constitutes an infringement of his
constitutional right to due process of law and equal protection of
the laws.[2] The standards of due process in judicial as well as
administrative proceedings have long been established. In its part
minimum due process of law simply means giving notice and
opportunity to be heard before judgment is rendered.[3]

Under Section 1, Rule XIV of the implementing Regulations of the

Labor Code, it is provided that "No worker shall be dismissed
except for just or authorized cause provided by law and after due
process." Section 2, 5, 6, and 7 of the same rules require that
before an employer may dismiss an employee the latter must be
given a written notice stating the particular act or omission
constituting the grounds thereof: that the employee may answer
the allege within a reasonable period; that the employer shall
afford him ample opportunity to be heard and to defend himself
with the assistance of his representative, if he so desires; and that
it is only then that the employer may dismiss the employee by
notifying him of the decision in writing stating clearly the reasons
therefor. Such dismissal is without prejudice to the right of the
employee to contest its validity in the Regional Branch of the
NLRC.
Petitioner insists that private respondent was afforded due process
but he refused to avail of his right to the same; that when the
matter was brought to the labor arbiter he was able to submit his
position papers although the hearing cannot proceed due to the
non-appearance of his counsel; and that the private respondent is
guilty of serious misconduct in threatening or coercing, a coemployee which is a ground for dismissal under Article 283 of the

The claim of petitioner that a formal investigation was not

necessary because the incident which gave rise to, the termination
of private respondent was witnessed by his co-employees and
supervisors is without merit. The basic requirement of due process
is that which hears before it condemns. Which process upon
inquiry and renders judgment only after trial.[4]
However, it is a matter of fact that when the private respondent
filed a complaint against petitioner he was afforded the right to an
investigation by the labor arbiter. He presented his position paper
as did the petitioner. If no hearing was had it was the fault of
private respondent as his counsel failed to appear at the scheduled
hearings. The labor arbiter concluded that the dismissal of private
respondent was for just cause. He was found guilty of grave
misconduct and insubordination. This is borne by the sworn
statements of witnesses. The Court is bound by this finding of the
labor arbiter.
By the same taken, the conclusion of the public respondent NLRC
on appeal that private respondent was not afforded due process
before he was dismissed in binding on this Court. Indeed, it is well
taken and supported by the records. However, it can not justify a
ruling that private respondent should be reinstated with back
wages as the public respondent NLRC so ordered. Although
belatedly, private respondent was afforded due process before the

26

labor arbiter wherein the just cause of his dismissal had been
established. With finding, it would be arbitrary and unfair to order
his reinstatement with back wages.
The Court holds that the policy of ordering the reinstatement to
the service of an employee without loss of seniority and the
payment of his wages during the period of his separation until his
actual reinstatement but not exceeding three (3) years without
qualification or when it appears he was not afforded due process,
although his dismissal was found to be for just and authorized
cause in an appropriate proceeding in the Ministry of Labor and
Employment should be re-examined. It will be highly prejudicial to
the interests of the employer to impose on him the services of an
employee who has been shown to be guilty of the charges that
warranted his dismissal from employment. Indeed, it will
demoralize the rank and file of the undeserving if not undesirable
remains in the service.

investigation as required by law before dismissing petitioner from

employment. Considering the circumstances of this case petitioner
must indemnify the private respondent the amount of P1,000.00.
The measure of this award depends on the facts of each case and
the gravity of the omission committed by the employer.
WHEREFORE, the petition is GANTED. The questioned decision
of the public respondent NLRC dated October 16, 1987 for the
reinstatement with back wages of private respondent is
REVERSED AND SET ASIDE, and the decision of the labor arbiter
dated December 3, 1986 dismissing the complaint is revived and
affirmed, but with the modification that petitioner is ordered to
indemnify private respondent in the amount of P1,000.00. The
restraining order issued by the Court on December 2, 1987 is
hereby made permanent and the bond posted by petitioner is
cancelled. This decision is immediately executory.
SO ORDERED.

Thus in the present case where private respondent who appears to

be violent temper, caused trouble during office hours and even
defied his superiors as they tried to pacify him., should not be
rewarded with re-employment and back wages. It may encourage
him to do even worse and will render a mockery of the rules of
discipline that employees are required to observe. Under the
circumstances, the dismissal of the private respondent for just
cause should be maintained. He has no right to return to his
former employment.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Bidin,

Sarmiento, Grio-Aquino, Medialdea, and Regalado, JJ., concur.
Melencio-Herrera, J., with concurring and dissenting opinion.
Padilla, J., see separate opinion.
Cortes, J., in a separate concurring and dissenting opinion.

However, the petitioner must nevertheless be held to court for

failure to extend to private respondent his right to an investigation
before causing his dismissal. The rule is explicit as above
discussed. The dismissal of an employee must be for just
authorized cause and after due process.[5] Petitioner committed an
infraction of the second requirement. Thus, it must be imposed a
sanction for its failure to give a formal notice and conduct an

27

October 11, 1991

380 Phil. 416
EN BANC
G.R. No. 117040, January 27, 2000
RUBEN SERRANO, PETITIONER, VS. NATIONAL LABOR
RELATIONS COMMISSION AND ISETANN DEPARTMENT
STORE, RESPONDENTS.
DECISION
MENDOZA, J.:
This is a petition seeking review of the resolutions, dated March
30, 1994 and August 26, 1994, of the National Labor Relations
Commission (NLRC) which reversed the decision of the Labor
Arbiter and dismissed petitioner Ruben Serranos complaint for
illegal dismissal and denied his motion for reconsideration. The
facts are as follows:
Petitioner was hired by private respondent Isetann Department
Store as a security checker to apprehend shoplifters and prevent
pilferage of merchandise.[1] Initially hired on October 4, 1984 on
contractual basis, petitioner eventually became a regular
employee on April 4, 1985. In 1988, he became head of the
Security Checkers Section of private respondent. [2]
Sometime in 1991, as a cost-cutting measure, private respondent
decided to phase out its entire security section and engage the
services of an independent security agency. For this reason, it
wrote petitioner the following memorandum:[3]

MR. RUBEN SERRANO

PRESENT
Dear Mr. Serrano,
In view of the retrenchment program of the company, we hereby
reiterate our verbal notice to you of your termination as Security
Section Head effective October 11, 1991.
Please secure your clearance from this office.
Very truly yours,
[Sgd.] TERESITA A. VILLANUEVA
Human Resources Division Manager
The loss of his employment prompted petitioner to file a complaint
on December 3, 1991 for illegal dismissal, illegal layoff, unfair
labor practice, underpayment of wages, and nonpayment of salary
and overtime pay.[4]
The parties were required to submit their position papers, on the
basis of which the Labor Arbiter defined the issues as follows: [5]
Whether or not there is a valid ground for the dismissal of the
complainant.
Whether or not complainant is entitled to his monetary claims for
underpayment of wages, nonpayment of salaries, 13th month pay
for 1991 and overtime pay.
Whether or not Respondent is guilty of unfair labor practice.
Thereafter, the case was heard. On April 30, 1993, the Labor
Arbiter rendered a decision finding petitioner to have been
illegally dismissed. He ruled that private respondent failed to

28

establish that it had retrenched its security section to prevent or

minimize losses to its business; that private respondent failed to
accord due process to petitioner; that private respondent failed to
use reasonable standards in selecting employees whose
employment would be terminated; that private respondent had not
shown that petitioner and other employees in the security section
were so inefficient so as to justify their replacement by a security
agency, or that "cost-saving devices [such as] secret video cameras
(to monitor and prevent shoplifting) and secret code tags on the
merchandise" could not have been employed; instead, the day
after petitioners dismissal, private respondent employed a safety
and security supervisor with duties and functions similar to those
of petitioner.

(d) Ordering the Respondent to pay complainant the amount of

P7,995.91, representing 10% attorneys fees based on the total
judgment award of P79,959.12.
All other claims of the complainant whether monetary or otherwise
is hereby dismissed for lack of merit.

Accordingly, the Labor Arbiter ordered:[6]

WHEREFORE, above premises considered, judgment is hereby
decreed:
(a) Finding the dismissal of the complainant to be illegal and
concomitantly, Respondent is ordered to pay complainant full
backwages without qualification or deduction in the amount of
P74,740.00 from the time of his dismissal until reinstatement
(computed till promulgation only) based on his monthly salary
of P4,040.00/month at the time of his termination but limited to
(3) three years;

The NLRC held that the phase-out of private respondents security

section and the hiring of an independent security agency
constituted an exercise by private respondent of "[a] legitimate
business decision whose wisdom we do not intend to inquire into
and for which we cannot substitute our judgment"; that the
distinction made by the Labor Arbiter between "retrenchment"
and the employment of "cost-saving devices" under Art. 283 of the
Labor Code was insignificant because the company official who
wrote the dismissal letter apparently used the term
"retrenchment" in its "plain and ordinary sense: to layoff or
remove from ones job, regardless of the reason therefor"; that the
rule of "reasonable criteria" in the selection of the employees to be
retrenched did not apply because all positions in the security
section had been abolished; and that the appointment of a safety
and security supervisor referred to by petitioner to prove bad faith
on private respondents part was of no moment because the
position had long been in existence and was separate from
petitioners position as head of the Security Checkers Section.

(b) Ordering the Respondent to immediately reinstate the

complainant to his former position as security section head or
to a reasonably equivalent supervisorial position in charges of
security without loss of seniority rights, privileges and benefits.
This order is immediately executory even pending appeal;
(c) Ordering the Respondent to pay complainant unpaid wages in
the amount of P2,020.73 and proportionate 13th month pay in
the amount of P3,198.30;

SO ORDERED.
Private respondent appealed to the NLRC which, in its resolution
of March 30, 1994, reversed the decision of the Labor Arbiter and
ordered petitioner to be given separation pay equivalent to one
month pay for every year of service, unpaid salary, and
proportionate 13th month pay. Petitioner filed a motion for
reconsideration, but his motion was denied.

Hence this petition. Petitioner raises the following issue:

29

IS THE HIRING OF AN INDEPENDENT SECURITY AGENCY BY

THE PRIVATE RESPONDENT TO REPLACE ITS CURRENT
SECURITY SECTION A VALID GROUND FOR THE DISMISSAL OF
THE EMPLOYEES CLASSED UNDER THE LATTER? [7]
Petitioner contends that abolition of private respondents Security
Checkers Section and the employment of an independent security
agency do not fall under any of the authorized causes for dismissal
under Art. 283 of the Labor Code.
Petitioner Laid Off for Cause
Petitioners contention has no merit. Art. 283 provides:
Closure of establishment and reduction of personnel. - The
employer may also terminate the employment of any employee due
to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of
operations of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by
serving a written notice on the workers and the Department of
Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least one (1) month
pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and
in cases of closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to at least one (1)
month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher. A fraction of at least six (6) months
shall be considered as one (1) whole year.
In De Ocampo v. National Labor Relations Commission,[8] this
Court upheld the termination of employment of three mechanics in
a transportation company and their replacement by a company
rendering maintenance and repair services. It held:

In contracting the services of Gemac Machineries, as part of the

companys cost-saving program, the services rendered by the
mechanics became redundant and superfluous, and therefore
properly terminable. The company merely exercised its business
judgment or management prerogative. And in the absence of any
proof that the management abused its discretion or acted in a
malicious or arbitrary manner, the court will not interfere with the
exercise of such prerogative.[9]
In Asian Alcohol Corporation v. National Labor Relations
Commission,[10] the Court likewise upheld the termination of
employment of water pump tenders and their replacement by
independent contractors. It ruled that an employers good faith in
implementing a redundancy program is not necessarily put in
doubt by the availment of the services of an independent
contractor to replace the services of the terminated employees to
promote economy and efficiency.
Indeed, as we pointed out in another case, the "[management of a
company] cannot be denied the faculty of promoting efficiency and
attaining economy by a study of what units are essential for its
operation. To it belongs the ultimate determination of whether
services should be performed by its personnel or contracted to
outside agencies . . . [While there] should be mutual consultation,
eventually deference is to be paid to what management
decides."[11] Consequently, absent proof that management acted in
a malicious or arbitrary manner, the Court will not interfere with
the exercise of judgment by an employer.[12]
In the case at bar, we have only the bare assertion of petitioner
that, in abolishing the security section, private respondents real
purpose was to avoid payment to the security checkers of the
wage increases provided in the collective bargaining agreement
approved in 1990.[13] Such an assertion is not a sufficient basis for
concluding that the termination of petitioners employment was
not a bona fide decision of management to obtain reasonable

30

return from its investment, which is a right guaranteed to

employers under the Constitution.[14] Indeed, that the phase-out of
the security section constituted a "legitimate business decision" is
a factual finding of an administrative agency which must be
accorded respect and even finality by this Court since nothing can
be found in the record which fairly detracts from such finding. [15]
Accordingly, we hold that the termination of petitioners services
was for an authorized cause, i.e., redundancy. Hence, pursuant to
Art. 283 of the Labor Code, petitioner should be given separation
pay at the rate of one month pay for every year of service.
Sanctions for Violations of the
Notice Requirement
Art. 283 also provides that to terminate the employment of an
employee for any of the authorized causes the employer must
serve "a written notice on the workers and the Department of
Labor and Employment at least one (1) month before the intended
date thereof." In the case at bar, petitioner was given a notice of
termination on October 11, 1991. On the same day, his services
were terminated. He was thus denied his right to be given written
notice before the termination of his employment, and the question
is the appropriate sanction for the violation of petitioners right.
To be sure, this is not the first time this question has arisen. In
Sebuguero v. NLRC,[16] workers in a garment factory were
temporarily laid off due to the cancellation of orders and a
garment embargo. The Labor Arbiter found that the workers had
been illegally dismissed and ordered the company to pay
separation pay and backwages. The NLRC, on the other hand,
found that this was a case of retrenchment due to business losses
and ordered the payment of separation pay without backwages.
This Court sustained the NLRCs finding. However, as the
company did not comply with the 30-day written notice in Art. 283

of the Labor Code, the Court ordered the employer to pay the
workers P2,000.00 each as indemnity.
The decision followed the ruling in several cases involving
dismissals which, although based on any of the just causes under
Art. 282,[17] were effected without notice and hearing to the
employee as required by the implementing rules. [18] As this Court
said: "It is now settled that where the dismissal of one employee is
in fact for a just and valid cause and is so proven to be but he is
not accorded his right to due process, i.e., he was not furnished
the twin requirements of notice and opportunity to be heard, the
dismissal shall be upheld but the employer must be sanctioned for
non-compliance with the requirements of, or for failure to observe,
due process."[19]
The rule reversed a long standing policy theretofore followed that
even though the dismissal is based on a just cause or the
termination of employment is for an authorized cause, the
dismissal or termination is illegal if effected without notice to the
employee. The shift in doctrine took place in 1989 in Wenphil
Corp. v. NLRC.[20] In announcing the change, this Court said:[21]
The Court holds that the policy of ordering the reinstatement to
the service of an employee without loss of seniority and the
payment of his wages during the period of his separation until his
actual reinstatement but not exceeding three (3) years without
qualification or deduction, when it appears he was not afforded
due process, although his dismissal was found to be for just and
authorized cause in an appropriate proceeding in the Ministry of
Labor and Employment, should be re-examined. It will be highly
prejudicial to the interests of the employer to impose on him the
services of an employee who has been shown to be guilty of the
charges that warranted his dismissal from employment. Indeed, it
will demoralize the rank and file if the undeserving, if not
undesirable, remains in the service.

31

....

for just causes under Art. 282).

However, the petitioner must nevertheless be held to account for

failure to extend to private respondent his right to an investigation
before causing his dismissal. The rule is explicit as above
discussed. The dismissal of an employee must be for just or
authorized cause and after due process. Petitioner committed an
infraction of the second requirement. Thus, it must be imposed a
sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing petitioner from
employment. Considering the circumstances of this case petitioner
must indemnify the private respondent the amount of P1,000.00.
The measure of this award depends on the facts of each case and
the gravity of the omission committed by the employer.
The fines imposed for violations of the notice requirement have
varied from P1,000.00[22] to P2,000.00[23] to P5,000.00[24] to
P10,000.00.[25]

For this reason, they regard any dismissal or layoff without the
requisite notice to be null and void even though there are just or
authorized causes for such dismissal or layoff. Consequently, in
their view, the employee concerned should be reinstated and paid
backwages.

Need for Reexamining the Wenphil Doctrine

Today, we once again consider the question of appropriate
sanctions for violations of the notice requirement in light of our
experience during the last decade or so with the Wenphil doctrine.
The number of cases involving dismissals without the requisite
notice to the employee, although effected for just or authorized
causes, suggests that the imposition of fine for violation of the
notice requirement has not been effective in deterring violations of
the notice requirement. Justice Panganiban finds the monetary
sanctions "too insignificant, too niggardly, and sometimes even too
late." On the other hand, Justice Puno says there has in effect been
fostered a policy of "dismiss now, pay later" which moneyed
employers find more convenient to comply with than the
requirement to serve a 30-day written notice (in the case of
termination of employment for an authorized cause under Arts.
283-284) or to give notice and hearing (in the case of dismissals

Validity of Petitioners Layoff Not

Affected by Lack of Notice
We agree with our esteemed colleagues, Justices Puno and
Panganiban, that we should rethink the sanction of fine for an
employers disregard of the notice requirement. We do not agree,
however, that disregard of this requirement by an employer
renders the dismissal or termination of employment null and void.
Such a stance is actually a reversion to the discredited preWenphil rule of ordering an employee to be reinstated and paid
backwages when it is shown that he has not been given notice and
hearing although his dismissal or layoff is later found to be for a
just or authorized cause. Such rule was abandoned in Wenphil
because it is really unjust to require an employer to keep in his
service one who is guilty, for example, of an attempt on the life of
the employer or the latters family, or when the employer is
precisely retrenching in order to prevent losses.
The need is for a rule which, while recognizing the employees
right to notice before he is dismissed or laid off, at the same time
acknowledges the right of the employer to dismiss for any of the
just causes enumerated in Art. 282 or to terminate employment for
any of the authorized causes mentioned in Arts. 283-284. If the
Wenphil rule imposing a fine on an employer who is found to have
dismissed an employee for cause without prior notice is deemed
ineffective in deterring employer violations of the notice
requirement, the remedy is not to declare the dismissal void if

32

there are just or valid grounds for such dismissal or if the

termination is for an authorized cause. That would be to uphold
the right of the employee but deny the right of the employer to
dismiss for cause. Rather, the remedy is to order the payment to
the employee of full backwages from the time of his dismissal until
the court finds that the dismissal was for a just cause. But,
otherwise, his dismissal must be upheld and he should not be
reinstated. This is because his dismissal is ineffectual.
For the same reason, if an employee is laid off for any of the
causes in Arts. 283-284, i.e., installation of a labor-saving device,
but the employer did not give him and the DOLE a 30-day written
notice of termination in advance, then the termination of his
employment should be considered ineffectual and he should be
paid backwages. However, the termination of his employment
should not be considered void but he should simply be paid
separation pay as provided in Art. 283 in addition to backwages.
Justice Puno argues that an employers failure to comply with the
notice requirement constitutes a denial of the employees right to
due process. Prescinding from this premise, he quotes the
statement of Chief Justice Concepcion in Vda. de Cuaycong v. Vda.
de Sengbengco[26] that "acts of Congress, as well as of the
Executive, can deny due process only under the pain of nullity, and
judicial proceedings suffering from the same flaw are subject to
the same sanction, any statutory provision to the contrary
notwithstanding." Justice Puno concludes that the dismissal of an
employee without notice and hearing, even if for a just cause, as
provided in Art. 282, or for an authorized cause, as provided in
Arts. 283-284, is a nullity. Hence, even if just or authorized causes
exist, the employee should be reinstated with full back pay. On the
other hand, Justice Panganiban quotes from the statement in
People v. Bocar[27] that "[w]here the denial of the fundamental right
of due process is apparent, a decision rendered in disregard of
that right is void for lack of jurisdiction."

Violation of Notice Requirement

Not a Denial of Due Process
The cases cited by both Justices Puno and Panganiban refer,
however, to the denial of due process by the State, which is not the
case here. There are three reasons why, on the other hand,
violation by the employer of the notice requirement cannot be
considered a denial of due process resulting in the nullity of the
employees dismissal or layoff.
The first is that the Due Process Clause of the Constitution is a
limitation on governmental powers. It does not apply to the
exercise of private power, such as the termination of employment
under the Labor Code. This is plain from the text of Art. III, 1 of
the Constitution, viz.: "No person shall be deprived of life, liberty,
or property without due process of law. . . ." The reason is simple:
Only the State has authority to take the life, liberty, or property of
the individual. The purpose of the Due Process Clause is to ensure
that the exercise of this power is consistent with what are
considered civilized methods.
The second reason is that notice and hearing are required under
the Due Process Clause before the power of organized society are
brought to bear upon the individual. This is obviously not the case
of termination of employment under Art. 283. Here the employee
is not faced with an aspect of the adversary system. The purpose
for requiring a 30-day written notice before an employee is laid off
is not to afford him an opportunity to be heard on any charge
against him, for there is none. The purpose rather is to give him
time to prepare for the eventual loss of his job and the DOLE an
opportunity to determine whether economic causes do exist
justifying the termination of his employment.
Even in cases of dismissal under Art. 282, the purpose for the
requirement of notice and hearing is not to comply with Due

33

Process Clause of the Constitution. The time for notice and

hearing is at the trial stage. Then that is the time we speak of
notice and hearing as the essence of procedural due process.
Thus, compliance by the employer with the notice requirement
before he dismisses an employee does not foreclose the right of
the latter to question the legality of his dismissal. As Art. 277(b)
provides, "Any decision taken by the employer shall be without
prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission."
Indeed, to contend that the notice requirement in the Labor Code
is an aspect of due process is to overlook the fact that Art. 283 had
its origin in Art. 302 of the Spanish Code of Commerce of 1882
which gave either party to the employer-employee relationship the
right to terminate their relationship by giving notice to the other
one month in advance. In lieu of notice, an employee could be laid
off by paying him a mesada equivalent to his salary for one month.
[28]
This provision was repealed by Art. 2270 of the Civil Code,
which took effect on August 30, 1950. But on June 12, 1954, R.A.
No. 1052, otherwise known as the Termination Pay Law, was
enacted reviving the mesada. On June 21, 1957, the law was
amended by R.A. No. 1787 providing for the giving of advance
notice or the payment of compensation at the rate of one-half
month for every year of service.[29]
The Termination Pay Law was held not to be a substantive law but
a regulatory measure, the purpose of which was to give the
employer the opportunity to find a replacement or substitute, and
the employee the equal opportunity to look for another job or
source of employment. Where the termination of employment was
for a just cause, no notice was required to be given to the
employee.[30] It was only on September 4, 1981 that notice was
required to be given even where the dismissal or termination of an
employee was for cause. This was made in the rules issued by the
then Minister of Labor and Employment to implement B.P. Blg. 130

which amended the Labor Code. And it was still much later when
the notice requirement was embodied in the law with the
amendment of Art. 277(b) by R.A. No. 6715 on March 2, 1989. It
cannot be that the former regime denied due process to the
employee. Otherwise, there should now likewise be a rule that, in
case an employee leaves his job without cause and without prior
notice to his employer, his act should be void instead of simply
making him liable for damages.
The third reason why the notice requirement under Art. 283 can
not be considered a requirement of the Due Process Clause is that
the employer cannot really be expected to be entirely an impartial
judge of his own cause. This is also the case in termination of
employment for a just cause under Art. 282 (i.e., serious
misconduct or willful disobedience by the employee of the lawful
orders of the employer, gross and habitual neglect of duties, fraud
or willful breach of trust of the employer, commission of crime
against the employer or the latters immediate family or duly
authorized representatives, or other analogous cases).
Justice Puno disputes this. He says that "statistics in the DOLE will
prove that many cases have been won by employees before the
grievance committees manned by impartial judges of the
company." The grievance machinery is, however, different because
it is established by agreement of the employer and the employees
and composed of representatives from both sides. That is why, in
Batangas Laguna Tayabas Bus Co. v. Court of Appeals,[31] which
Justice Puno cites, it was held that "Since the right of [an
employee] to his labor is in itself a property and that the labor
agreement between him and [his employer] is the law between the
parties, his summary and arbitrary dismissal amounted to
deprivation of his property without due process of law." But here
we are dealing with dismissals and layoffs by employers alone,
without the intervention of any grievance machinery. Accordingly
in Montemayor v. Araneta University Foundation,[32] although a

34

professor was dismissed without a hearing by his university, his

dismissal for having made homosexual advances on a student was
sustained, it appearing that in the NLRC, the employee was fully
heard in his defense.
Lack of Notice Only Makes
Termination Ineffectual
Not all notice requirements are requirements of due process.
Some are simply part of a procedure to be followed before a right
granted to a party can be exercised. Others are simply an
application of the Justinian precept, embodied in the Civil Code, [33]
to act with justice, give everyone his due, and observe honesty and
good faith toward ones fellowmen. Such is the notice requirement
in Arts. 282-283. The consequence of the failure either of the
employer or the employee to live up to this precept is to make him
liable in damages, not to render his act (dismissal or resignation,
as the case may be) void. The measure of damages is the amount
of wages the employee should have received were it not for the
termination of his employment without prior notice. If warranted,
nominal and moral damages may also be awarded.
We hold, therefore, that, with respect to Art. 283 of the Labor
Code, the employers failure to comply with the notice
requirement does not constitute a denial of due process but a
mere failure to observe a procedure for the termination of
employment which makes the termination of employment merely
ineffectual. It is similar to the failure to observe the provisions of
Art. 1592, in relation to Art. 1191, of the Civil Code[34] in
rescinding a contract for the sale of immovable property. Under
these provisions, while the power of a party to rescind a contract
is implied in reciprocal obligations, nonetheless, in cases involving
the sale of immovable property, the vendor cannot exercise this
power even though the vendee defaults in the payment of the
price, except by bringing an action in court or giving notice of
rescission by means of a notarial demand. [35] Consequently, a

notice of rescission given in the letter of an attorney has no legal

effect, and the vendee can make payment even after the due date
since no valid notice of rescission has been given. [36]
Indeed, under the Labor Code, only the absence of a just cause for
the termination of employment can make the dismissal of an
employee illegal. This is clear from Art. 279 which provides:
Security of Tenure. - In cases of regular employment, the employer
shall not terminate the services of an employee except for a just
cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.[37]
Thus, only if the termination of employment is not for any of the
causes provided by law is it illegal and, therefore, the employee
should be reinstated and paid backwages. To contend, as Justices
Puno and Panganiban do, that even if the termination is for a just
or authorized cause the employee concerned should be reinstated
and paid backwages would be to amend Art. 279 by adding
another ground for considering a dismissal illegal. What is more, it
would ignore the fact that under Art. 285, if it is the employee who
fails to give a written notice to the employer that he is leaving the
service of the latter, at least one month in advance, his failure to
comply with the legal requirement does not result in making his
resignation void but only in making him liable for damages. [38] This
disparity in legal treatment, which would result from the adoption
of the theory of the minority cannot simply be explained by
invoking President Ramon Magsaysays motto that "he who has
less in life should have more in law." That would be a
misapplication of this noble phrase originally from Professor
Thomas Reed Powell of the Harvard Law School.

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Justice Panganiban cites Pepsi-Cola Bottling Co. v. NLRC,[39] in

support of his view that an illegal dismissal results not only from
want of legal cause but also from the failure to observe "due
process." The Pepsi-Cola case actually involved a dismissal for an
alleged loss of trust and confidence which, as found by the Court,
was not proven. The dismissal was, therefore, illegal, not because
there was a denial of due process, but because the dismissal was
without cause. The statement that the failure of management to
comply with the notice requirement "taints the dismissal with
illegality" was merely a dictum thrown in as additional grounds for
holding the dismissal to be illegal.
Given the nature of the violation, therefore, the appropriate
sanction for the failure to give notice is the payment of backwages
for the period when the employee is considered not to have been
effectively dismissed or his employment terminated. The sanction
is not the payment alone of nominal damages as Justice Vitug
contends.
Unjust Results of Considering Dismissals/
Layoffs Without Prior Notice As Illegal
The refusal to look beyond the validity of the initial action taken by
the employer to terminate employment either for an authorized or
just cause can result in an injustice to the employer. For not giving
notice and hearing before dismissing an employee, who is
otherwise guilty of, say, theft, or even of an attempt against the life
of the employer, an employer will be forced to keep in his employ
such guilty employee. This is unjust.
It is true the Constitution regards labor as "a primary social
economic force."[40] But so does it declare that it "recognizes the
indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investment." [41] The
Constitution bids the State to "afford full protection to labor." [42]
But it is equally true that "the law, in protecting the rights of the

laborer, authorizes neither oppression nor self-destruction of the

employer."[43] And it is oppression to compel the employer to
continue in employment one who is guilty or to force the employer
to remain in operation when it is not economically in his interest to
do so.
In sum, we hold that if in proceedings for reinstatement under Art.
283, it is shown that the termination of employment was due to an
authorized cause, then the employee concerned should not be
ordered reinstated even though there is failure to comply with the
30-day notice requirement. Instead, he must be granted separation
pay in accordance with Art. 283, to wit:
In case of termination due to the installation of labor-saving
devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1)
month pay or to at least one month for every year of service,
whichever is higher. In case of retrenchment to prevent losses and
in cases of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six months shall be
considered one (1) whole year.
If the employees separation is without cause, instead of being
given separation pay, he should be reinstated. In either case,
whether he is reinstated or only granted separation pay, he should
be paid full backwages if he has been laid off without written
notice at least 30 days in advance.
On the other hand, with respect to dismissals for cause under Art.
282, if it is shown that the employee was dismissed for any of the
just causes mentioned in said Art. 282, then, in accordance with
that article, he should not be reinstated. However, he must be paid
backwages from the time his employment was terminated until it
is determined that the termination of employment is for a just

36

cause because the failure to hear him before he is dismissed

renders the termination of his employment without legal effect.
WHEREFORE, the petition is GRANTED and the resolution of the
National Labor Relations Commission is MODIFIED by ordering
private respondent Isetann Department Store, Inc. to pay
petitioner separation pay equivalent to one (1) month pay for
every year of service, his unpaid salary, and his proportionate 13th
month pay and, in addition, full backwages from the time his
employment was terminated on October 11, 1991 up to the time
the decision herein becomes final. For this purpose, this case is
REMANDED to the Labor Arbiter for computation of the
separation pay, backwages, and other monetary awards to
petitioner.
SO ORDERED.
Davide, Jr., C.J., Melo, Kapunan, Quisumbing, Purisima, Pardo,
Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur.
Bellosillo, J., see separate opinion.
Puno, J., see dissenting opinion.
Vitug, J., see separate opinion.
Panganiban, J., see separate opinion.
Ynares-Santiago, J., joins the dissenting opinion of J. Puno.

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