Personnel Actions
under BENECO-NEA Management with compensation at the
G.R. No. 108405. April 4, 2003
JAIME D. VIERNES, CARLOS R. GARCIA, BERNARD
BUSTILLO, DANILO C. BALANAG, FERDINAND DELLA,
EDWARD A. ABELLERA, ALEXANDER ABANAG,
DOMINGO ASIA, FRANCISCO BAYUGA, ARTHUR M.
ORIBELLO, BUENAVENTURA DE GUZMAN, JR., ROBERT
A. ORDOO, BERNARD V. JULARBAL, IGNACIO C.
ALINGBAS and LEODEL N.
SORIANO, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION (THIRD DIVISION), and BENGUET ELECTRIC
COOPERATIVE, INC. (BENECO) respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari seeking to annul the
decision promulgated by the National Labor Relations
Commission (NLRC) on July 2, 1992 in NLRC CA No. L-
000384-92,1 and its resolution dated September 24, 1992
denying petitioners motion for reconsideration.
The factual background of this case, as summarized by the
Labor Arbiter, is as follows:
Fifteen (15) in all, these are consolidated cases for illegal
dismissal, underpayment of wages and claim for indemnity
pay against a common respondent, the Benguet Electric
Cooperative, Inc., (BENECO for short) represented by its
Acting General Manager, Gerardo P. Versoza.
Complainants services as meter readers were contracted for
hardly a months duration, or from October 8 to 31, 1990.
Their employment contracts, couched in identical terms,
read:
You are hereby appointed as METER READER (APPRENTICE)
rate of SIXTY-SIX PESOS AND SEVENTY-FIVE CENTAVOS
(P66.75) per day from October 08 to 31, 1990.
x x x. (Annex B, Complainants Joint Position Paper)
The said term notwithstanding, the complainants were
allowed to work beyond October 31, 1990, or until January 2,
1991. On January 3, 1991, they were each served their
identical notices of termination dated December 29, 1990.
The same read:
Please be informed that effective at the close of office hours
of December 31, 1990, your services with the BENECO will
be terminated. Your termination has nothing to do with your
performance. Rather, it is because we have to retrench on
personnel as we are already overstaffed.
x x x. (Annex C, CJPP)
On the same date, the complainants filed separate
complaints for illegal dismissal. And following the
amendment of said complaints, they submitted their joint
position paper on April 4, 1991. Respondent filed its position
paper on April 2, 1991.
It is the contention of the complainants that they were not
apprentices but regular employees whose services were
illegally and unjustly terminated in a manner that was
whimsical and capricious. On the other hand, the respondent
invokes Article 283 of the Labor Code in defense of the
questioned dismissal.2cräläwvirtualibräry
On October 18, 1991, the Labor Arbiter rendered a decision,
the dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered:
1. Dismissing the complaints for illegal dismissal filed by the
complainants for lack of merit. However in view of the offer
of the respondent to enter into another temporary
employment contract with the complainants, the respondent
is directed to so extend such contract to each complainant,
with the exception of Jaime Viernes, and to pay each the
amount of P2,590.50, which represents a months salary, as
indemnity for its failure to give complainants the 30-day
notice mandated under Article 283 of the Labor Code; or, at
the option of the complainants, to pay each financial
assistance in the amount of P5,000.00 and the P2,590.50
above-mentioned.
2. Respondent is also ordered:
A. To pay complainants the amount representing
underpayment of their wages:
a) Jaime Viernes, Carlos Garcia, Danilo Balanag, Edward
Abellera, Francisco Bayuga, Arthur Oribello, Buenaventura de
Guzman, Jr., Robert Ordoo, Bernard Jularbal and Leodel
Soriano, P1,994.25 each;
b) Bernard Bustillo and Domingo Asia, P1,838.50 each; and
c) Ferdinand Della, Alexander Abanag and Ignacio
Alingbas, P1,816.25 each.
B. To extend to complainant Jaime Viernes an appointment
as regular employee for the position of meter reader, the job
he held prior to his termination, and to pay him P2,590.50 as
indemnity, plus the underpayment of his wages as above
stated.
C. To pay P7,000.00 as and for attorneys fees.
No damages.
SO ORDERED.3cräläwvirtualibräry
Aggrieved by the Labor Arbiters decision, the complainants
and the respondent filed their respective appeals to the
NLRC.
On July 2, 1992, the NLRC modified its judgment, to wit:
WHEREFORE, premises considered, judgment is hereby
rendered modifying the appealed decision by declaring
complainants dismissal illegal, thus ordering their
reinstatement to their former position as meter readers or to
any equivalent position with payment of backwages limited
to one year and deleting the award of indemnity and
attorneys fees. The award of underpayment of wages is
hereby AFFIRMED.
SO ORDERED.4cräläwvirtualibräry
On August 27, 1992, complainants filed a Motion for
Clarification and Partial Reconsideration.5 On September 24,
1992, the NLRC issued a resolution denying the complainants
motion for reconsideration.6cräläwvirtualibräry
Hence, complainants filed herein petition.
Private respondent BENECO filed its Comment; the Office of
the Solicitor General (OSG) filed a Manifestation and Motion
in Lieu of Comment; public respondent NLRC filed its own
Comment; and petitioners filed their Manifestation and
Motion In Lieu of Consolidated Reply. Public respondent
NLRC, herein petitioners, and private respondent filed their
respective memoranda, and the OSG, its Manifestation in
1994.
Pursuant to our ruling in Rural Bank of Alaminos Employees
Union vs. NLRC,7 to wit:
in the decision in the case of St. Martin Funeral Homes vs.
National Labor Relations Commission, G.R. No. 130866,
promulgated on September 16, 1998, this Court pronounced
that petitions for certiorari relating to NLRC decisions must
be filed directly with the Court of Appeals, and labor cases
pending before this Court should be referred to the appellate
court for proper disposition. However, in cases where the
Memoranda of both parties have been filed with this Court
prior to the promulgation of the St. Martin decision, the
Court generally opts to take the case itself for its final
disposition.8cräläwvirtualibräry
and considering that the parties have filed their respective
memoranda as of 1994, we opt to resolve the issues raised
in the present petition.
The parties raised the following issues:
1. Whether the respondent NLRC committed grave abuse of
discretion in ordering the reinstatement of petitioners to their
former position as meter readers on probationary status in
spite of its finding that they are regular employees under
Article 280 of the Labor Code.
2. Whether the respondent NLRC committed grave abuse of
discretion in limiting the backwages of petitioners to one
year only in spite of its finding that they were illegally
dismissed, which is contrary to the mandate of full
backwages until actual reinstatement but not to exceed three
years.
3. Whether the respondent NLRC committed grave abuse of
discretion in deleting the award of indemnity pay which had
become final because it was not appealed and in deleting the
award of attorneys fees because of the absence of a trial-
type hearing.
4. Whether the mandate of immediately executory on the
reinstatement aspect even pending appeal as provided in the
decision of Labor Arbiters equally applies in the decision of
the National Labor Relations Commission even pending
appeal, by means of a motion for reconsideration of the
order reinstating a dismissed employee or pending appeal
because the case is elevated on certiorari before the
Supreme Court.9cräläwvirtualibräry
We find the petition partly meritorious.
As to the first issue: We sustain petitioners claim that they
should be reinstated to their former position as meter
readers, not on a probationary status, but as regular
employees.
Reinstatement means restoration to a state or condition from
which one had been removed or separated.10 In case of
probationary employment, Article 281 of the Labor Code
requires the employer to make known to his employee at the
time of the latters engagement of the reasonable standards
under which he may qualify as a regular employee.
A review of the records shows that petitioners have never
been probationary employees. There is nothing in the letter
of appointment, to indicate that their employment as meter
readers was on a probationary basis. It was not shown that
petitioners were informed by the private respondent, at the
time of the latters employment, of the reasonable standards
under which they could qualify as regular employees.
Instead, petitioners were initially engaged to perform their
job for a limited duration, their employment being fixed for a
definite period, from October 8 to 31, 1990.
Private respondents reliance on the case of Brent School,
Inc. vs. Zamora,[11] wherein we held as follows:
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present Article
280 of the Labor Code clearly appears to have been, as
already observed, to prevent circumvention of the employees
right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral
agreements conflicting with the concept of regular
employment as defined therein should be construed to refer
to the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a
fixed period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee
and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms
with no moral dominance whatever being exercised by the
former over the latter.12cräläwvirtualibräry
is misplaced.
The principle we have enunciated in Brent applies only with
respect to fixed term employments. While it is true that
petitioners were initially employed on a fixed term basis as
their employment contracts were only for October 8 to 31,
1990, after October 31, 1990, they were allowed to continue
working in the same capacity as meter readers without the
benefit of a new contract or agreement or without the term
of their employment being fixed anew. After October 31,
1990, the employment of petitioners is no longer on a fixed
term basis. The complexion of the employment relationship
of petitioners and private respondent is thereby totally
changed. Petitioners have attained the status of regular
employees.
Under Article 280 of the Labor Code, a regular employee is
one who is engaged to perform activities which are necessary
or desirable in the usual business or trade of the employer,
or a casual employee who has rendered at least one year of
service, whether continuous or broken, with respect to the
activity in which he is employed.
In De Leon vs. NLRC,[13] and Abasolo vs. NLRC,[14] we laid
down the test in determining regular employment, to wit:
The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can
be determined by considering the nature of the work
performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has
been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the
law deems repeated and continuing need for its performance
as sufficient evidence of the necessity if not indispensability
of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity and
while such activity exists.15cräläwvirtualibräry
Clearly therefrom, there are two separate instances whereby
it can be determined that an employment is regular: (1) The
particular activity performed by the employee is necessary or
desirable in the usual business or trade of the employer; or
(2) if the employee has been performing the job for at least
a year.
Herein petitioners fall under the first category. They were
engaged to perform activities that are necessary to the usual
business of private respondent. We agree with the labor
arbiters pronouncement that the job of a meter reader is
necessary to the business of private respondent because
unless a meter reader records the electric consumption of
the subscribing public, there could not be a valid basis for
billing the customers of private respondent. The fact that the
petitioners were allowed to continue working after the
expiration of their employment contract is evidence of the
necessity and desirability of their service to private
respondents business. In addition, during the preliminary
hearing of the case on February 4, 1991, private respondent
even offered to enter into another temporary employment
contract with petitioners. This only proves private
respondents need for the services of herein petitioners. With
the continuation of their employment beyond the original
term, petitioners have become full-fledged regular
employees. The fact alone that petitioners have rendered
service for a period of less than six months does not make
their employment status as probationary.
Since petitioners are already regular employees at the time
of their illegal dismissal from employment, they are entitled
to be reinstated to their former position as regular
employees, not merely probationary.
As to the second issue, Article 279 of the Labor Code, as
amended by R.A. No. 6715, which took effect on March 21,
1989, provides that an illegally dismissed employee is
entitled to 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. Since petitioners were
employed on October 8, 1990, the amended provisions of
Article 279 of the Labor Code shall apply to the present case.
Hence, it was patently erroneous, tantamount to grave abuse
of discretion on the part of the public respondent in limiting
to one year the backwages awarded to petitioners.
With respect to the third issue, an employer becomes liable
to pay indemnity to an employee who has been dismissed if,
in effecting such dismissal, the employer fails to comply with
the requirements of due process.16 The indemnity is in the
form of nominal damages intended not to penalize the
employer but to vindicate or recognize the employees right
to procedural due process which was violated by the
employer.17 Under Article 2221 of the Civil Code, nominal
damages are adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may
be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
We do not agree with the ruling of the NLRC that indemnity
is incompatible with the award of backwages. These two
awards are based on different considerations. Backwages are
granted on grounds of equity to workers for earnings lost due
to their illegal dismissal from work.18 On the other hand, the
award of indemnity, as we have earlier held, is meant to
vindicate or recognize the right of an employee to due
process which has been violated by the employer.
In the present case, the private respondent, in effecting the
dismissal of petitioners from their employment, failed to
comply with the provisions of Article 283 of the Labor Code
which requires an employer to serve a notice of dismissal
upon the employees sought to be terminated and to the
Department of Labor, at least one month before the intended
date of termination. Petitioners were served notice on
January 3, 1991 terminating their services, effective
December 29, 1990, or retroactively, in contravention of
Article 283. This renders the private respondent liable to pay
indemnity to petitioners.
Thus, we find that the NLRC committed grave abuse of
discretion in deleting the award of indemnity. In Del Val vs.
NLRC,[19] we held that the award of indemnity ranges
from P1,000.00 to P10,000.00 depending on the particular
circumstances of each case. In the present case, the amount
of indemnity awarded by the labor arbiter is P2,590.50,
which is equivalent to petitioners one-month salary. We find
no cogent reason to modify said award, for being just and
reasonable.
As to the award of attorneys fees, the same is justified by
the provisions of Article 111 of the Labor Code, to wit:
Art. 111. Attorneys fees (a) In cases of unlawful withholding
of wages the culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages recovered.
(b) It shall be unlawful for any person to demand or accept,
in any judicial or administrative proceedings for the recovery
of the wages, attorneys fees which exceed ten percent of the
amount of wages recovered.
As to the last issue, Article 223 of the Labor Code is plain
and clear that the decision of the NLRC shall be final and
executory after ten (10) calendar days from receipt thereof
by the parties. In addition, Section 2(b), Rule VIII of the New
Rules of Procedure of the NLRC provides that should there be
a motion for reconsideration entertained pursuant to Section
14, Rule VII of these Rules, the decision shall be executory
after ten calendar days from receipt of the resolution on such
motion.
We find nothing inconsistent or contradictory between Article
223 of the Labor Code and Section 2(b), Rule VIII, of the
NLRC Rules of Procedure. The aforecited provision of the
NLRC Rules of Procedure merely provides for situations
where a motion for reconsideration is filed. Since the Rules
allow the filing of a motion for reconsideration of a decision
of the NLRC, it simply follows that the ten-day period
provided under Article 223 of the Labor Code should be
reckoned from the date of receipt by the parties of the
resolution on such motion. In the case at bar, petitioners
received the resolution of the NLRC denying their motion for
reconsideration on October 22, 1992. Hence, it is on
November 2, 1992 that the questioned decision became
executory.
WHEREFORE, the petition is partially GRANTED. The
decision of the National Labor Relations Commission dated
July 2, 1992 is MODIFIED. Private respondent Benguet
Electric Cooperative, Inc. (BENECO) is hereby ordered to
reinstate petitioners to their former or substantially
equivalent position as regular employees, without loss of
seniority rights and other privileges appurtenant thereto,
with full backwages from the time of their dismissal until
they are actually reinstated. The amount of P2,590.50
awarded by the labor arbiter as indemnity to petitioners is
REINSTATED. Private respondent is also ordered to pay
attorneys fees in the amount of ten percent (10%) of the
total monetary award due to the petitioners. In all other
respects the assailed decision and resolution are AFFIRMED.
Costs against private respondent BENECO.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisu
Personnel actions
G.R. NO. 161065. April 15, 2005]
EUFEMIO C. DOMINGO, CELSO D. GANGAN, PACASIO S.
BANARIA, SOFRONIO B. URSAL, ALBERTO P. CRUZ,
MARIA L. MATIB, RACHEL U. PACPACO, ANGELO G.
SANCHEZ, and SHERWIN A. SIP-AN, Petitioners, v. HON.
GUILLERMO N. CARAGUE, in his capacity as Chairman,
Commission on Audit, HON. EMMANUEL M. DALMAN
and HON. RAUL C. FLORES, in their capacities as
Commissioners, Commission on Audit, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Judicial power is the power to hear and decide cases pending
between parties who have the right to sue in courts of law
and equity.1 Corollary to this dictum is the principle of locus
standi of a litigant. He who is directly affected and whose
interest is immediate and substantial has the standing to
sue. Thus, a party must show a personal stake in the
outcome of the case or an injury to himself that can be
redressed by a favorable decision in order to warrant an
invocation of the court's jurisdiction and justify the exercise
of judicial power on his behalf.
Assailed in this Petition for Certiorari is the legality of
Resolution No. 2002-05 of the Commission on Audit (COA)
providing for Organizational Restructuring Plan. The above-
named petitioners basically alleged therein that this Plan is
intrinsically void for want of an enabling law authorizing COA
to undertake the same and providing for the necessary
standards, conditions, restrictions, limitations, guidelines,
and parameters. Petitioners further alleged that in initiating
such Organizational Restructuring Plan without legal
authority, COA committed grave abuse of discretion
amounting to lack or excess of jurisdiction.
At this point, it is pertinent to state that the COA is a quasi-
judicial body and that its decision, order or ruling may be
brought to the Supreme Court on certiorari by the aggrieved
party.2
Petitioners Eufemio C. Domingo, Celso C. Gangan, Pascasio
S. Banaria are retired Chairmen, while Sofronio B. Ursal, and
Alberto P. Cruz are retired Commissioners of COA. All claim
"to maintain a deep-seated abiding interest in the affairs of
COA,"3 especially in its Organizational Restructuring Plan, as
concerned taxpayers.
The other petitioners are incumbent officers or employees of
COA. Maria L. Matib and Angelo G. Sanchez are State Auditor
III and State Auditor II, respectively, assigned to the
Cordillera Administrative Region (CAR). Prior to the
implementation of the questioned COA Organizational
Restructuring Plan, they were Resident Auditors and later
Audit Team Leaders. Petitioner Rachel U. Pacpaco is a State
Auditor III assigned to CAR and a Team Supervisor, while
petitioner Sherwin A. Sipi-an is a State Auditor I also
assigned at the CAR. These petitioners claim that they were
unceremoniously divested of their designations/ranks as Unit
Head, Team Supervisor, and Team Leader upon
implementation of the COA Organizational Restructuring Plan
without just cause and without due process, in violation of
Civil Service Law. Moreover, they were deprived of their
respective Representation and Transportation Allowances
(RATA), thus causing them undue financial prejudice.
Petitioners now invoke this Court's judicial power to strike
down the COA Organizational Restructuring Plan for being
unconstitutional or illegal.
Initially, for our resolution is the issue of whether petitioners
have the legal standing to institute the instant petition.
Petitioners invoke our ruling in Chavez v. Public Estates
Authority,4 Agan, Jr. v. Philippine International Air Terminals
Co., Inc.,5 and Information Technology Foundation of the
Philippines v. Commission on Elections6 that where the
subject matter of a case is a matter of public concern and
imbued with public interest, then this fact alone gives them
legal standing to institute the instant petition. Petitioners
contend that the COA Organizational Restructuring Plan is
not just a mere reorganization but a revamp or overhaul of
the COA, with a "spillover effect" upon its audit performance.
This will have an impact upon the rest of the government
bodies subject to its audit supervision, thus, should be
treated as a matter of transcendental importance.
Consequently, petitioners' legal standing should be
recognized and upheld.
Respondents, through the Office of the Solicitor General
(OSG), counter that petitioners have no legal standing to file
the present petition since following our ruling in Kilusang
Mayo Uno Labor Center v. Garcia, Jr.,7 they have not shown
"a personal stake in the outcome of the case" or an actual or
potential injury that can be redressed by our favorable
decision. Petitioners themselves admitted that "they do not
seek any affirmative relief nor impute any improper or
improvident act against the said respondents" and "are not
motivated by any desire to seek affirmative relief from COA
or from respondents that would redound to their personal
benefit or gain." It is clear then that petitioners failed to
show any "present substantial interest" in the outcome of
this case, citing Kilosbayan v. Morato.8 Nor may petitioners
claim that as taxpayers, they have legal standing since
nowhere in their petition do they claim that public funds are
being spent in violation of law or that there is a
misapplication of the taxpayers' money, as we ruled
in Dumlao v. Comelec.9
Petitioners' reliance upon our rulings in Chavez,10 Agan,
Jr.,11 and  Information Technology Foundation12 is flawed.
In Chavez, we ruled that the petitioner has legal standing
since he is a taxpayer and his purpose in filing the petition is
to compel the Public Estate Authority (PEA) to perform its
constitutional duties with respect to: (a) the right of the
citizens to information on matters of public concern; and (b)
the application of a constitutional provision intended to
insure the equitable distribution of alienable lands of the
public domain among Filipino citizens. The thrust of the first
is to compel PEA to disclose publicly information on the sale
of Government lands worth billions of pesos, as mandated by
the Constitution and statutory law. The thrust of the second
is to prevent PEA from alienating hundreds of hectares of
alienable lands of the public domain, thereby compelling it to
comply with a constitutional duty to the nation. We held that
these matters are of transcendental public importance.13
In Agan, Jr., we held that petitioners have legal standing as
they have a direct and substantial interest to protect. By the
implementation of the PIATCO contracts, they stand to lose
their source of livelihood, a property right zealously
protected by the Constitution. Such financial prejudice on
their part is sufficient to confer upon them the requisite locus
standi.14
In Information Technology Foundation, there were two
reasons why petitioners' standing was recognized. First, the
nation's political and economic future virtually hangs in the
balance, pending the outcome of the 2004 elections.
Accordingly, the award for the automation of the electoral
process was a matter of public concern, imbued with public
interest. Second, the individual petitioners, as taxpayers,
asserted a material interest in seeing to it that public funds
are properly used.
Here, petitioners have not shown any direct and personal
interest in the COA Organizational Restructuring Plan. There
is no indication that they have sustained or are in imminent
danger of sustaining some direct injury as a result of its
implementation. In fact, they admitted that "they do not
seek any affirmative relief nor impute any improper or
improvident act against the respondents" and "are not
motivated by any desire to seek affirmative relief from COA
or from respondents that would redound to their personal
benefit or gain." Clearly, they do not have any legal standing
to file the instant suit.
We are well aware of the averments of petitioners Matib,
Pacpaco, Sanchez, and Sipi-An that they were demoted and
unceremoniously divested of their previous designations as
Unit Head, Team Supervisor, or Team Leader; that they were
deprived of their RATA; that they were relegated to being
mere Team Members, entitled to only a reimbursable
transportation allowance; and that they were denied due
process.
Such averments lack merit. Actually, they were not demoted.
Under Section 11, Rule VII of the Omnibus Rules
Implementing Book V of the Administrative Code of 1987, a
demotion is the movement from one position to
another involving the issuance of an appointment with
diminution in duties, responsibilities, status, or rank which
may or may not involve reduction in salary.15 A demotion by
assigning an employee to a lower position in the same
service which has a lower rate of compensation is
tantamount to removal, if no cause is shown for it.16
Here, there have been no new appointments issued to Matib,
Pacpaco, Sanchez, and Sipi-An under the COA Organizational
Restructuring Plan. Thus, their contention that they have
been demoted is baseless.
Moreover, the change in their status from COA auditors
(receiving monthly RATA) to COA auditors (receiving only
reimbursable RATA) cannot be attributed to the COA
Organizational Restructuring Plan but to the implementation
of the Audit Team Approach (ATAP), pursuant to COA
Resolution No. 96-305 dated April 16, 1996.
Under the ATAP, an audit team, not a resident auditor, is
deployed to conduct an audit. An audit team may be
composed of two (2) or more members under an Audit Team Memorandum that the principle of non-diminution of benefits
Leader. Whenever practicable, an Audit Team Supervisor has been upheld.
supervises at least three (3) audit teams. The composition of
an audit team is not permanent. Hence, an Audit Team Thus, in the implementation of the COA Organizational
Member may be designated or assigned as an Audit Team Restructuring Plan, we fail to see how petitioners could have
Leader for one assignment and subsequently as a Team sustained personal injury as they have not shown to have a
Member in another engagement. The designation depends personal stake therein. Accordingly, they are wanting in legal
upon the position or rank of the one who is designated as an standing to institute the instant petition. Corollarily, we find
Audit Team Leader. Thus, a State Auditor III who may have no reason to delve into the constitutionality or legality of the
been assigned as an Audit Team Leader in one engagement COA Organizational Restructuring Plan.
may find himself relegated to being an Audit Team Member
in another engagement, if a State Auditor IV or State Auditor WHEREFORE, the petition is DISMISSED. No
V is designated as the Audit Team Leader. pronouncement as to costs.

Pursuant to the COA Organizational Restructuring Plan, the SO ORDERED.

COA issued Memorandum No. 2002-03417 providing for the
guidelines regarding the payment of RATA, thus: Nature and Purpose of Pension

1. All holders of State Auditor IV position shall be entitled to [G.R. NO. 146494 : July 14, 2004]
fixed commutable RATA wherever they are assigned.
GOVERNMENT SERVICE INSURANCE SYSTEM, Cebu City
2. Henceforth, only State Auditors IV shall be assigned as Branch, Petitioner, v. MILAGROS O.
new Unit Heads or Team Leaders. MONTESCLAROS, Respondent.

3. State Auditors below State Auditor IV assigned as Unit DECISION

Heads or Team Leaders who have been receiving fixed RATA
shall continue to be designated as such and to receive the CARPIO, J.:
RATA until relieved of the designation for incompetence,
inefficiency, or misconduct. The Case

All others who collect RATA on reimbursable basis, including
those paid on a daily basis under COA Resolution No. 99-007
dated June 7, 1999, are likewise entitled thereto.
Matib, Pacpaco, Sanchez, and Sipi-An are not qualified to be
Audit Team Leaders or to receive fixed monthly RATA since
none of them holds the rank or position of State Auditor IV.
But this does not mean that they are not entitled to receive
reimbursable RATA if they are designated as Audit Team
Leaders. It is clear from the text of the said COA
This is a Petition for Review on Certiorari of the
Decision1 dated 13 December 2000 of the Court of Appeals in
CA-G.R. CV No. 48784.The Court of Appeals affirmed the
Decision2 of the Regional Trial Court, Branch 21, Cebu City
(trial court), which held that Milagros Orbiso Montesclaros is
entitled to survivorship pension.
The Facts
Sangguniang Bayan member Nicolas Montesclaros (Nicolas)
married Milagros Orbiso (Milagros) on 10 July 1983.3 Nicolas
was a 72- year old widower when he married Milagros who
was then 43 years old.
On 4 January 1985, Nicolas filed with the Government
Service Insurance System (GSIS) an application for
retirement benefits effective 18 February 1985 under
Presidential Decree No. 1146 or the Revised Government
Service Insurance Act of 1977 (PD 1146) .In his retirement
application, Nicolas designated his wife Milagros as his sole
beneficiary.4 Nicolas last day of actual service was on 17
February 1985.5 On 31 January 1986, GSIS approved Nicolas
application for retirement effective 17 February 1984,
granting a lump sum payment of annuity for the first five
years and a monthly annuity thereafter.6 Nicolas died on 22
April 1992. Milagros filed with GSIS a claim for survivorship
pension under PD 1146. On 8 June 1992, GSIS denied the
claim because under Section 18 of PD 1146, the surviving
spouse has no right to survivorship pension if the surviving
spouse contracted the marriage with the pensioner within
three years before the pensioner qualified for the
pension.7 According to GSIS, Nicolas wed Milagros on 10 July
1983, less than one year from his date of retirement on 17
February 1984.
On 2 October 1992, Milagros filed with the trial court a
special civil action for declaratory relief questioning the
validity of Section 18 of PD 1146 disqualifying her from
receiving survivorship pension.
On 9 November 1994, the trial court rendered judgment
declaring Milagros eligible for survivorship pension. The trial
court ordered GSIS to pay Milagros the benefits due
including interest. Citing Articles 1158 and 1179 of the Family
Code, the trial court held that retirement benefits, which the
pensioner has earned for services rendered and for which the
pensioner has contributed through monthly salary
deductions, are onerous acquisitions. Since retirement
benefits are property the pensioner acquired through labor,
such benefits are conjugal property. The trial court held that
the prohibition in Section 18 of PD 1146 is deemed repealed
for being inconsistent with the Family Code, a later law.The
Family Code has retroactive effect if it does not prejudice or
impair vested rights.
GSIS appealed to the Court of Appeals, which affirmed the
decision of the trial court.Hence, this Petition for Review .
In the meantime, in a letter dated 10 January 2003, Milagros
informed the Court that she has accepted GSIS decision
disqualifying her from receiving survivorship pension and
that she is no longer interested in pursuing the
case.10 Commenting on Milagros letter, GSIS asserts that the
Court must decide the case on the merits.11 ςrνll
The Court will resolve the issue despite the manifestation of
Milagros. The issue involves not only the claim of Milagros
but also that of other surviving spouses who are similarly
situated and whose claims GSIS wouldalso deny based on
the proviso.Social justice and public interest demand that we
resolve the constitutionality of the proviso.
The Ruling of the Court of Appeals
The Court of Appeals agreed with the trial court that the
retirement benefits are onerous and conjugal because the
pension came from the deceased pensioners salary
deductions.The Court of Appeals held that the pension is not
gratuitous since it is a deferred compensation for services
rendered.
The Issues
GSIS raises the following
issues:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
1. Whether Section 16 of PD 1146 entitles Milagros to
survivorship pension;chanroblesvirtuallawlibrary
2. Whether retirement benefits form part of conjugal
property;chanroblesvirtuallawlibrary
3. Whether Articles 254 and 256 of the Family Code repealed
Section 18 of PD 1146.12
The Courts Ruling
The pertinent provisions of PD 1146 on survivorship benefits
read:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
SEC. 16.Survivorship Benefits.When a member or pensioner
dies, the beneficiary shall be entitled to survivorship benefits
provided for in sections seventeen and eighteen hereunder.
The survivorship pension shall consist
of:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
(1) basic survivorship pension which is fifty percent of the
basicmonthly pension; andcralawlibrary
(2) dependents pension not exceeding fifty percent of the
basic monthly pension payable in accordance with the rules
and regulations prescribed by the System.
SEC. 17. Death of a Member. (a) Upon the death of a
member, the primary beneficiaries shall be entitled
to:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
(1) the basic monthly pension which is guaranteed for five
years; Provided,That, at the option of the beneficiaries, it
may be paidin lump sum as defined in this Act:Provided,
further, That, the member is entitled to old-age pension at
the time ofhis death; or
(2) the basic survivorship pension which is guaranteed for
thirty months and the dependents pension;Provided,  That,
the deceasedhad paid at least thirty-six monthly
contributions within the five-year period immediately
preceding his death, or a total of at least one hundred eighty
monthly contributions prior tohis death.
(b) At the end of the guaranteed periods mentioned in the
preceding sub-section (a), the survivorship pension shall be
paid as follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
(1) when the dependent spouse is the only survivor, he shall
receive the basic survivorship pension for life or until he
remarries;chanroblesvirtuallawlibrary
(2) when onlydependent children are the survivors, they
shall be entitled to the survivorship pension for as long as
they are qualified;chanroblesvirtuallawlibrary
(3) when the survivors are the dependent spouse and the
dependent children, they shall be entitled to the survivorship
pension so long as there are dependent children and,
thereafter, the surviving spouse shall receive the basic
survivorship pension for life or until he remarries.
(c) In the absence of primary beneficiaries, the secondary
beneficiaries designated by the deceased and recorded in the
System, shall be entitled to:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
(1) a cash payment equivalent to thirty times the basic
survivorship pension when the member is qualified for old-
age pension;or
(2) a cash payment equivalent to fiftypercent of the average
monthly compensation for each year he paid contributions,
but not less than fivehundred pesos;Provided,  That, the
member paid at least thirty-six monthly contributions within
the five-year periodimmediately preceding his death or paid
a total of at least one hundred eighty monthly contributions
prior to his death.
(d) When the primary beneficiaries are not entitled to the
benefits mentioned in paragraph (a) of this section, they
shall receive a cash payment equivalent to one hundred
percent of the average monthly compensation for each year
the member paid contributions, but not less than five
hundred pesos.In the absence of primary beneficiaries, the
amount shall revert to the funds of the System.
SEC. 18.Death of a Pensioner.  Upon the death of a
pensioner, the primary beneficiaries shall receive the
applicable pension mentioned under paragraph (b) of section
seventeen of this Act: Provided, That, the dependent
spouse shall not be entitled to said pension if his
marriage with the pensioner is contracted within three
years before the pensioner qualified for the
pension.When the pensioner dies within the period covered
by the lump sum, the survivorship pension shall be paid only
after the expiration of the said period.This shall also apply to
the pensioners living as of the effectivity of this Act, but the
survivorship benefit shall be based on the monthly pension
being received at the time of death. (Emphasis
supplied)ςrαlαωlιbrαrÿ
Under PD 1146, the primary beneficiaries are (1) the
dependent spouse until such spouse remarries, and
(2) the dependent children.13 The secondary beneficiaries
are the dependent parents and legitimate descendants
except dependent children.14 The law defines dependent as
the legitimate, legitimated, legally adopted, acknowledged
natural or illegitimate child who is unmarried, not gainfully
employed, and not over twenty-one years of age or is over
twenty-one years of age but physically or mentally
incapacitated and incapable of self-support. The term also
includes the legitimate spouse dependent for support
on the member, and the legitimate parent wholly
dependent on the member for support.15
The main question for resolution is the validity of the proviso
in Section 18 of PD 1146, which proviso prohibits the
dependent spouse from receiving survivorship pension if such
dependent spouse married the pensioner within three years
before the pensioner qualified for the pension (the proviso).
We hold that the proviso, which was the sole basis for the
rejection by GSIS of Milagros claim, is unconstitutional
because it violates the due process clause. The proviso is
also discriminatory and denies equal protection of the law.
Retirement Benefits as Property Interest
Under Section 5 of PD 1146, it is mandatory for the
government employee to pay monthly contributions.PD 1146
mandates the government to include in its annual
appropriation the necessary amounts for its share of the
contributions. It is compulsory on the government employer
to take off and withhold from the employees monthly salaries
their contributions and to remit the same to GSIS. 16 The
government employer must also remit its corresponding
share to GSIS.17 Considering the mandatory salary
deductions from the government employee, the government
pensions do not constitute mere gratuity but form part of
compensation.
In a pension plan where employee participation is
mandatory, the prevailing view is that employees have
contractual or vested rights in the pension where the pension
is part of the terms of employment.18 The reason for
providing retirement benefits is to compensate service to the
government. Retirement benefits to government employees
are part of emolument to encourage and retain qualified
employees in the government service. Retirement benefits to
government employees reward them for giving the best
years of their lives in the service of their country.19
Thus, where the employee retires and meets the eligibility
requirements, he acquires a vested right to benefits that is
protected by the due process clause.20 Retirees enjoy a
protected property interest whenever they acquire a right to
immediate payment under pre-existing law.21 Thus, a
pensioner acquires a vested right to benefits that have
become due as provided under the terms of the public
employees pension statute.22 No law can deprive such person
of his pension rights without due process of law, that is,
without notice and opportunity to be heard.23
In addition to retirement and disability benefits, PD 1146
also provides for benefits to survivors of deceased
government employees and pensioners.Under PD 1146, the
dependent spouse is one of the beneficiaries of survivorship
benefits.A widows right to receive pension following the
demise of her husband is also part of the husbands
contractual compensation.24
Denial of Due Process
The proviso is contrary to Section 1, Article III of the
Constitution, which provides that [n]o person shall be
deprived of life, liberty, or property without due process of
law, nor shall any person be denied the equal protection of
the laws.The proviso is unduly oppressive in outrightly
denying a dependent spouses claim for survivorship pension
if the dependent spouse contracted marriage to the
pensioner within the three-year prohibited period. There is
outright confiscation of benefits due the surviving spouse
without giving the surviving spouse an opportunity to be
heard.The proviso undermines the purpose of PD 1146,
which is to assure comprehensive and integrated social
security and insurance benefits to government employees
and their dependents in the event of sickness, disability,
death, and retirement of the government employees.
The whereas clauses of PD 1146
state:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
WHEREAS, the Government Service Insurance System in
promoting the efficiency and welfare of the employees of the
Government of thePhilippines, administers the laws that
grant to its members social security and insurance
benefits;chanroblesvirtuallawlibrary
WHEREAS, it is necessary to preserve at all times the
actuarial solvency of the funds administered by the System;
to guarantee to the government employee all the benefits
due him; and to expand and increase the benefits made
available to him and his dependents to the extent permitted
by available resources;chanroblesvirtuallawlibrary
WHEREAS, provisions of existing laws have impeded the
efficient and effective discharge by the System of its
functions and have unduly hampered the System from being
more responsive to the dramatic changes of the times and
from meeting the increasing needs and expectations of the
Filipino public servant;chanroblesvirtuallawlibrary
WHEREAS, provisions of existing laws that have prejudiced,
rather than benefited, the government employee; restricted,
rather than broadened, his benefits, prolonged, rather than
facilitated the payment of benefits, must now yield to his
paramount welfare;chanroblesvirtuallawlibrary
WHEREAS, the social security and insurance benefits of
government employees must be continuously re-examined
and improved to assure comprehensive and integrated social
security and insurance programs that will provide benefits
responsive to their needs and those of their dependents in
the event of sickness, disability, death, retirement, and other
contingencies; and to serve as a fitting reward for dedicated
public service;chanroblesvirtuallawlibrary
WHEREAS, in the light of existing economic conditions
affecting the welfare of government employees, there is a
need to expand and improve the social security and
insurance programs administered by the Government Service
Insurance System, specifically, among others, by increasing
pension benefits, expanding disability benefits, introducing
survivorship benefits, introducing sickness and income
benefits, and eventually extending the compulsory coverage
of these programs to all government employees regardless of
employment status.
PD 1146 has the following
purposes:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
A. to preserve at all times the actuarial solvency of the funds
administered by the System;chanroblesvirtuallawlibrary
b. to guarantee to the government employee all the benefits
due him; andcralawlibrary
c. to expand, increase, and improve the social security and
insurance benefits made available to him and his dependents
such as:
        increasing pension benefits
        expanding disability benefits
        introducing survivorship benefits
        introducing sickness income benefits
        extending compulsory membership to all
government employees irrespective of status25
The law extends survivorship benefits to the surviving and
qualified beneficiaries of the deceased member or pensioner
to cushion the beneficiaries against the adverse economic
effects resulting from the death of the wage earner or
pensioner.26
Violation of the Equal Protection Clause
The surviving spouse of a government employee is entitled
to receive survivors benefits under a pension
system.However, statutes sometimes require that the spouse
should have married the employee for a certain period before
the employees death to prevent sham marriages
contracted for monetary gain.One example is the Illinois
Pension Code which restricts survivors annuity benefits to a
surviving spouse who was married to a state employee for at
least one year before the employees death.TheIllinois
pension system classifies spouses into those married less
than one year before a members death and those married
one year or more. The classification seeks to prevent
conscious adverse risk selection of deathbed marriages
where a terminally ill member of the pension system marries
another so that person becomes eligible for benefits.
In Sneddon v. The State Employees Retirement System
of Illinois, 27 the Appellate Court of Illinois held that such
classification was based on difference in situation and
circumstance, bore a rational relation to the purpose of the
statute, and was therefore not in violation of constitutional
guarantees of due process and equal protection.
A statute based on reasonable classification does not violate
the constitutional guaranty of the equal protection of the
law.28 The requirements for a valid and reasonable
classification are: (1) it must rest on substantial distinctions;
(2) it must be germane to the purpose of the law; (3) it must
not be limited to existing conditions only; and (4) it must
apply equally to all members of the same class. 29 Thus, the
law may treat and regulate one class differently from another
class provided there are real and substantial differences to
distinguish one class from another.30
The proviso in question does not satisfy these
requirements.The proviso discriminates against the
dependent spouse who contracts marriage to the pensioner
within three years before the pensioner qualified for the
pension.31 Under the proviso, even if the dependent spouse
married the pensioner more than three years before the
pensioners death, the dependent spouse would still not
receive survivorship pension if the marriage took place within
three years before the pensioner qualified for pension.The
object of the prohibition is vague.There is no reasonable
connection between the means employed and the purpose
intended.The law itself does not provide any reason or
purpose for such a prohibition.If the purpose of the proviso is
to prevent deathbed marriages,then we do not see why
the proviso reckons the three-year prohibition from the date
the pensioner qualified for pension and not from the date the
pensioner died. The classification does not rest on substantial
distinctions. Worse, the classification lumps all those
marriages contracted within three years before the pensioner
qualified for pension as having been contracted primarily for
financial convenience to avail of pension benefits.
Indeed, the classification is discriminatory and arbitrary.This
is probably the reason Congress deleted the proviso in
Republic Act No. 8291 (RA 8291),32 otherwise known as the
Government Service Insurance Act of 1997, the law revising
the old charter of GSIS (PD 1146) .Under the implementing
rules of RA 8291, the surviving spouse who married the
member immediately before the members death is still
qualified to receive survivorship pension unless the GSIS
proves that the surviving spouse contracted the marriage
solely to receive the benefit.33
Thus, the present GSIS law does not presume that marriages
contracted within three years before retirement or death of a
member are sham marriages contracted to avail of
survivorship benefits.The present GSIS law does not
automatically forfeit the survivorship pension of the surviving
spouse who contracted marriage to a GSIS member within
three years before the members retirement or death.The law
acknowledges that whether the surviving spouse contracted
the marriage mainly to receive survivorship benefits is a
matter of evidence. The law no longer prescribes a sweeping
classification that unduly prejudices the legitimate surviving
spouse and defeats the purpose for which Congress enacted
the social legislation.
WHEREFORE, the petition is DENIED for want of merit. We
declare VOID for being violative of the constitutional
guarantees of due process and equal protection of the law
the proviso in Section 18 of Presidential Decree No. 1146,
which proviso states that the dependent spouse shall not be
entitled to said pension if his marriage with the pensioner is
contracted within three years before the pensioner qualified
for the pension.The Government Service Insurance System
cannot deny the claim of Milagros O. Montesclaros for
survivorship benefits based on this invalid proviso.
No pronouncement as to costs.
Construction of Retirement Laws
SO ORDERED.
G.R. NO. 138381 : November 10, 2004]
GOVERNMENT SERVICE INSURANCE
SYSTEM, Petitioner, v. COMMISSION ON
AUDIT, Respondent.
[G.R. NO. 141625 : November 10, 2004]
GOVERNMENT SERVICE INSURANCE
SYSTEM, Petitioner, v. ALFREDO D. PINEDA, DANIEL GO,
FELINO BULANDUS, FELICIMO J. FERRARIS, JR., BEN
HUR PORLUCAS, LUIS HIPONIA, MARIA LUISA A.
FERNANDEZ, VICTORINA JOVEN, CORAZON S.
ALIWANAG, SILVER L. MARTINES, SR., RENATO PEREZ,
LOLITA CAYLAN, DOUGLAS VALLEJO and LETICIA
ALMAZAN, on their own behalf and on behalf of all
GSIS retirees with all of whom they share a common
and general interest, Respondents.
RESOLUTION
YNARES-SANTIAGO, J.:
On April 16, 2002, the Court promulgated a decision on
these two consolidated cases partially granting the petition in
G.R. No. 138381 ("first petition") thereby reversing the
Commission on Audit's (COA) disallowance of certain fringe
benefits granted to GSIS employees. As a result, the Court
ordered the refund of amounts representing fringe benefits
corresponding to those allowed in the first petition in favor of
the respondents in G.R. No. 141625 ("second petition").
The benefits which the Court ordered to be refunded included
increases in longevity pay, children's allowance and
management contribution to the Provident Fund as well as
premiums for group personal accident insurance. On the
other hand, the Court affirmed the COA disallowance of
loyalty and service cash award as well as housing allowance
in excess of that approved by the COA. Amounts
corresponding to these benefits were previously deducted by
GSIS from respondents' retirement benefits in view of the
COA disallowance in the first petition. COA did not seek
reconsideration of the judgment ordering said refund, which
thus became final and executory.
On August 7, 2002, the respondents in the second petition,
all GSIS retirees, filed a motion for amendatory and
clarificatory judgment ("amendatory motion").1 They averred
that we did not categorically resolve the issue raised in the
second petition, namely: whether or not the GSIS may
lawfully deduct any amount from their retirement benefits in
light of Section 39 of Republic Act No. 8291.
According to respondents, said provision of law clearly states
that no amount whatsoever could be legally deducted from
retirement benefits, even those amounts representing COA
disallowances. They posit that we should have ordered
refund not only of benefits allowed in the first petition, but all
amounts claimed, regardless of whether or not these were
allowed by the COA. These include items which were
correctly disallowed by the COA in the first petition, as well
as disallowed benefits under the second petition. The latter
consists of initial payment of productivity bonus, accelerated
implementation of the new salary schedule effective August
1, 1995, 1995 mid-year financial assistance and increase in
clothing, rice and meal allowances. Respondents further
insist that we should have awarded damages in their favor,
citing the GSIS' alleged bad faith in making the deductions.
GSIS filed a comment2 to respondents' amendatory motion,
as directed by the Court in a resolution dated September 3,
2002. GSIS posited that the other benefits not passed upon
in the main judgment should be understood by respondents
as having been impliedly denied by this Court. It also sought
clarification of our decision insofar as it declared that there
was no identity of subject matter between the COA
proceedings, from which the first petition stemmed, and
respondents' claim under the second petition, which
emanated from an order of the GSIS Board of Trustees
("Board"). As for the damages claimed by respondents, GSIS
insists that it made the deductions in good faith for these
were done in accordance with COA directives.
Respondents filed a reply3 to the comment of GSIS on
September 9, 2002.
Meanwhile, respondents filed a second motion, this time for
leave to file a motion for discretionary and partial
execution4 ("motion for execution"). They prayed that GSIS
be ordered to effect the refund, as finally adjudged in our
decision, pending resolution of their amendatory motion as
to the other deducted amounts. We granted the motion for
execution on September 3, 2002.
Subsequently, on December 26, 2002, counsel for
respondents, Atty. Agustin Sundiam, filed a motion for entry
and enforcement of attorney's lien5 ("motion for charging
lien") and a supplement6 to this motion on January 10, 2003.
He sought entry of a charging lien in the records of this case
pursuant to Section 37 of Rule 138. He prayed for an order
directing the GSIS to deduct, as his professional fees, 15%
from respondents' refund vouchers since the GSIS was
already in the process of releasing his clients' checks in
compliance with our judgment in the first petition. The
payment scheme was allegedly authorized by the Board of
Directors of his clients, the GSIS Retirees Association, Inc.
(GRIA), through a board resolution7 that he has attached to
the motion.
Atty. Sundiam's motion for charging lien was opposed by
petitioner GSIS on the ground that it was through its efforts,
and not Atty. Sundiam's, that the retirees were able to
obtain a refund.8 Meanwhile, the GRIA confirmed the
payment scheme it adopted with Atty. Sundiam and prayed
for its approval.9
Thereafter, on January 10, 2003, respondents filed another
manifestation and motion as well as supplement thereto,
claiming that GSIS was deducting new and unspecified sums
from the amount it was refunding to respondents. These new
deductions purportedly pertain to another set of COA
disallowances.10
On January 21, 2003, respondents again filed a
motion11 praying for the inclusion in the refundable amount
of dividends on the management contribution to the
Provident Fund ("motion for payment of dividends").
Respondents claimed that the contribution, which amounted
to Fifty Million Pesos (P50M), was retained by GSIS for more
than five years and thus earned a considerable sum of
income while under its control. GSIS declared and paid
dividends on said contribution to incumbent officials and
employees, but refused to extend the same benefits to
respondents/retirees.
On March 6, 2003, GSIS filed a joint comment12 to
respondents' two foregoing motions contending that the new
deductions are legitimate. The deductions pertain to car loan
arrearages, disallowed employees' compensation claims and
the like. As for the dividends on the Provident Fund
contributions, respondents are not entitled to the same
because while the first petition was pending, the
contributions were not actually remitted to the fund but were
withheld by COA pursuant to its earlier disallowance.
On October 2, 2003, respondents filed another motion13 for
an order to compel the GSIS to pay dividends on the
Provident Fund contributions pending resolution of their other
motions. They also sought refund of Permanent Partial
Disability (PPD) benefits that GSIS supposedly paid to some
of the respondents, but once again arbitrarily deducted from
the amount which the Court ordered to be refunded.
In a minute resolution14 dated November 11, 2003, we
denied the last motion for lack of merit. We likewise denied
with finality respondents' motion for reconsideration from the
denial of said motion.15
We now resolve the matters raised by the parties.
On the amendatory motion, it must be clarified that the
question raised before this Court in the second petition was
the issue of the Board's jurisdiction to resolve respondents'
claim for refund of amounts representing deductions from
their retirement benefits. What was assailed in the second
petition was the appellate court's ruling that the Board had
jurisdiction over respondents' claim since there was no
identity of subject matter between the proceedings then
pending before the COA and the petition brought by
respondents before the Board. The Court of Appeals did not
rule on the main controversy of whether COA disallowances
could be deducted from retirement benefits because the
Board ordered the dismissal of respondents' claim for alleged
lack of jurisdiction, before it could even decide on the
principal issue.
Consequently, the only matter that was properly elevated to
this Court was the issue of whether or not the Board had
jurisdiction over respondents' demands. We did not resolve
the issue of whether or not the deductions were valid under
Section 39 of RA 8291, for the simple reason that the Board,
as well as the appellate court, did not tackle the issue. The
doctrine of primary jurisdiction16 would ordinarily preclude us
from resolving the matter, which calls for a ruling to be first
made by the Board. It is the latter that is vested by law with
exclusive and original jurisdiction to settle any dispute arising
under RA 8291, as well as other matters related thereto.17
However, both the GSIS and respondents have extensively
discussed the merits of the case in their respective pleadings
and did not confine their arguments to the issue of
jurisdiction. Respondents, in fact, submit that we should
resolve the main issue on the ground that it is a purely legal
question. Respondents further state that a remand of the
case to the Board would merely result in unnecessary delay
and needless expense for the parties. They thus urge the
Court to decide the main question in order to finally put an
end to the controversy.
Indeed, the principal issue pending before the Board does
not involve any factual question, as it concerns only the
correct application of the last paragraph of Section 39, RA
8291. The parties agreed that the lone issue is whether COA
disallowances could be legally deducted from retirement
benefits on the ground that these were respondents'
monetary liabilities to the GSIS under the said provision.
There is no dispute that the amounts deducted by GSIS
represented COA disallowances. Thus, the only question left
for the Board to decide is whether the deductions are allowed
under RA 8291.
Under certain exceptional circumstances, we have taken
cognizance of questions of law even in the absence of an
initial determination by a lower court or administrative body.
In China Banking Corporation v. Court of Appeals,18 the Court
held:
At the outset, the Court's attention is drawn to the fact that
since the filing of this suit before the trial court, none of the
substantial issues have been resolved. To avoid and gloss
over the issues raised by the parties, as what the trial court
and respondent Court of Appeals did, would unduly prolong
this litigation involving a rather simple case of foreclosure of
mortgage. Undoubtedly, this will run counter to the avowed
purpose of the rules, i.e., to assist the parties in obtaining
just, speedy and inexpensive determination of every action
or proceeding. The Court, therefore, feels that the central
issues of the case, albeit unresolved by the courts below,
should now be settled specially as they involved pure
questions of law. Furthermore, the pleadings of the
respective parties on file have amply ventilated their various
positions and arguments on the matter necessitating prompt
adjudication.
In Roman Catholic Archbishop of Manila v. Court of
Appeals,19 the Court likewise held that the remand of a case
is not necessary where the court is in a position to resolve
the dispute based on the records before it. The Court will
decide actions on the merits in order to expedite the
settlement of a controversy and if the ends of justice would
not be subserved by a remand of the case.
Here, the primary issue calls for an application of a specific
provision of RA 8291 as well as relevant jurisprudence on the
matter. No useful purpose will indeed be served if we remand
the matter to the Board, only for its decision to be elevated
again to the Court of Appeals and subsequently to this Court.
Hence, we deem it sound to rule on the merits of the
controversy rather than to remand the case for further
proceedings.
The last paragraph of Section 39, RA 8291 specifically
provides:
SEC. 39. Exemption from Tax, Legal Process and Lien. -
xxxxxxxxx
The funds and/or the properties referred to herein as well as
the benefits, sums or monies corresponding to the benefits
under this Act shall be exempt from attachment,
garnishment, execution, levy or other processes issued by
the courts, quasi-judicial agencies or administrative bodies
including Commission on Audit (COA) disallowances and from
all financial obligations of the members, including his
pecuniary accountability arising from or caused or occasioned
by his exercise or performance of his official functions or
duties, or incurred relative to or in connection with his
position or work except when his monetary liability,
contractual or otherwise, is in favor of the GSIS.
It is clear from the above provision that COA disallowances
cannot be deducted from benefits under RA 8291, as the
same are explicitly made exempt by law from such
deductions. Retirement benefits cannot be diminished by
COA disallowances in view of the clear mandate of the
foregoing provision. It is a basic rule in statutory
construction that if a statute is clear, plain and free from
ambiguity, it must be given its literal meaning and applied
without interpretation. This is what is known as plain-
meaning rule or verba legis.20
Accordingly, the GSIS' interpretation of Section 39 that COA
disallowances have become monetary liabilities of
respondents to the GSIS and therefore fall under the
exception stated in the law is wrong. No interpretation of the
said provision is necessary given the clear language of the
statute. A meaning that does not appear nor is intended or
reflected in the very language of the statute cannot be
placed therein by construction.21
Moreover, if we are to accept the GSIS' interpretation, then it
would be unnecessary to single out COA disallowances as
among those from which benefits under RA 8291 are
exempt. In such a case, the inclusion of COA disallowances in
the enumeration of exemptions would be a mere surplusage
since the GSIS could simply consider COA disallowances as
monetary liabilities in its favor. Such a construction would
empower the GSIS to withdraw, at its option, an exemption
expressly granted by law. This could not have been the
intention of the statute.
That retirement pay accruing to a public officer may not be
withheld and applied to his indebtedness to the government
has been settled in several cases. In Cruz v. Tantuico,
Jr.,22 the Court, citing Hunt v. Hernandez,23 explained the
reason for such policy thus:
x x x we are of the opinion that the exemption should be
liberally construed in favor of the pensioner. Pension in this
case is a bounty flowing from the graciousness of the
Government intended to reward past services and, at the
same time, to provide the pensioner with the means with
which to support himself and his family. Unless otherwise
clearly provided, the pension should inure wholly to the
benefit of the pensioner. It is true that the withholding and
application of the amount involved was had under section
624 of the Administrative Code and not by any judicial
process, but if the gratuity could not be attached or levied
upon execution in view of the prohibition of section 3 of Act
No. 4051, the appropriation thereof by administrative action,
if allowed, would lead to the same prohibited result and
enable the respondents to do indirectly what they can not do
directly under section 3 of Act No. 4051. Act No. 4051 is a
later statute having been approved on February 21, 1933,
whereas the Administrative Code of 1917 which embodies
section 624 relied upon by the respondents was approved on
March 10 of that year. Considering section 3 of Act No. 4051
as an exception to the general authority granted in section
624 of the Administrative Code, antagonism between the two
provisions is avoided. (Underscoring supplied)ςrαlαωlιbrαrÿ
The above ruling was reiterated in Tantuico, Jr. v.
Domingo,24 where the Court similarly declared that benefits
under retirement laws cannot be withheld regardless of the
petitioner's monetary liability to the government.
The policy of exempting retirement benefits from
attachment, levy and execution, as well as unwarranted
deductions, has been embodied in a long line of retirement
statutes. Act No. 4051,25 which provides for the payment of
gratuity to officers and employees of the Insular Government
upon retirement due to reorganization, expressly provides in
its Section 3 that "(t)he gratuity provided for in this Act shall
not be attached or levied upon execution."
The law which established the GSIS, Commonwealth Act No.
186 ("CA No. 186"),26 went further by providing as follows:
SEC. 23. Exemptions from legal process and liens. - No
policy of life insurance issued under this Act, or the proceeds
thereof, except those corresponding to the annual premium
thereon in excess of five hundred pesos per annum, when
paid to any member thereunder, shall be liable to
attachment, garnishment, or other process, or to be seized,
taken, appropriated, or applied by any legal or equitable
process or operation of law to pay any debt or liability of
such member, or his beneficiary, or any other person who
may have a right thereunder, either before or after payment;
nor shall the proceeds thereof, when not made payable to a
named beneficiary, constitute a part of the estate of the
member for payment of his debt.
Presidential Decree No. 1146,27 which amended CA No. 186,
likewise contained a provision exempting benefits from
attachment, garnishment, levy or other processes. However,
the exemption was expressly made inapplicable to
"obligations of the member to the System, or to the
employer, or when the benefits granted are assigned by the
member with the authority of the System."28
The latest GSIS enactment, RA 8291,29 provides for a more
detailed and wider range of exemptions under Section 39.
Aside from exempting benefits from judicial processes, it
likewise unconditionally exempts benefits from quasi-judicial
and administrative processes, including COA disallowances,
as well as all financial obligations of the member. The latter
includes any pecuniary accountability of the member which
arose out of the exercise or performance of his official
functions or duties or incurred relative to his position or
work. The only exception to such pecuniary accountability is
when the same is in favor of the GSIS.
Thus, "monetary liability in favor of GSIS" refers to
indebtedness of the member to the System other than those
which fall under the categories of pecuniary accountabilities
exempted under the law. Such liability may include unpaid
social insurance premiums and balances on loans obtained
by the retiree from the System, which do not arise in the
performance of his duties and are not incurred relative to his
work. The general policy, as reflected in our retirement laws
and jurisprudence, is to exempt benefits from all legal
processes or liens, but not from outstanding obligations of
the member to the System. This is to ensure maintenance of
the GSIS' fund reserves in order to guarantee fulfillment of
all its obligations under RA 8291.
Notwithstanding the foregoing, however, we find it necessary
to nonetheless differentiate between those benefits which
were properly disallowed by the COA and those which were
not.
Anent the benefits which were improperly disallowed, the
same rightfully belong to respondents without qualification.
As for benefits which were justifiably disallowed by the COA,
the same were erroneously granted to and received by
respondents who now have the obligation to return the same
to the System.
It cannot be denied that respondents were recipients of
benefits that were properly disallowed by the COA. These
COA disallowances would otherwise have been deducted
from their salaries, were it not for the fact that respondents
retired before such deductions could be effected. The GSIS
can no longer recover these amounts by any administrative
means due to the specific exemption of retirement benefits
from COA disallowances. Respondents resultantly retained
benefits to which they were not legally entitled which, in
turn, gave rise to an obligation on their part to return the
amounts under the principle of solutio indebiti.
Under Article 2154 of the Civil Code,30 if something is
received and unduly delivered through mistake when there is
no right to demand it, the obligation to return the thing
arises. Payment by reason of mistake in the construction or
application of a doubtful or difficult question of law also
comes within the scope of solutio indebiti.31
In the instant case, the confusion about the increase and
payment of benefits to GSIS employees and executives, as
well as its subsequent disallowance by the COA, arose on
account of the application of RA 6758 or the Salary
Standardization Law and its implementing rules, CCC No. 10.
The complexity in the application of these laws is manifested
by the several cases that have reached the Court since its
passage in 1989.32 The application of RA 6758 was made
even more difficult when its implementing rules were nullified
for non-publication.33 Consequently, the delivery of benefits
to respondents under an erroneous interpretation of RA 6758
gave rise to an actionable obligation for them to return the
same.
While the GSIS cannot directly proceed against respondents'
retirement benefits, it can nonetheless seek restoration of
the amounts by means of a proper court action for its
recovery. Respondents themselves submit that this should be
the case,34 although any judgment rendered therein cannot
be enforced against retirement benefits due to the exemption
provided in Section 39 of RA 8291. However, there is no
prohibition against enforcing a final monetary judgment
against respondents' other assets and properties. This is only
fair and consistent with basic principles of due process.
As such, a proper accounting of the amounts due and
refundable is in order. In rendering such accounting, the
parties must observe the following guidelines:
(1) All deductions from respondents' retirement benefits
should be refunded except those amounts which may
properly be defined as "monetary liability to the GSIS";
(2) Any other amount to be deducted from retirement
benefits must be agreed upon by and between the parties;
andcralawlibrary
(3) Refusal on the part of respondents to return disallowed
benefits shall give rise to a right of action in favor of GSIS
before the courts of law.
Conformably, any fees due to Atty. Sundiam for his
professional services may be charged against respondents'
retirement benefits. The arrangement, however, must be
covered by a proper agreement between him and his clients
under (2) above.
As to whether respondents are entitled to dividends on the
provident fund contributions, the same is not within the
issues raised before the Court. The second petition refers
only to the legality of the deductions made by GSIS from
respondents' retirement benefits. There are factual matters
that need to be threshed out in determining respondents'
right to the payment of dividends, in view of the GSIS'
assertion that the management contributions were not
actually remitted to the fund. Thus, the payment of dividends
should be the subject of a separate claim where the parties
can present evidence to prove their respective assertions.
The Court is in no position to resolve the matter since the
material facts that would prove or disprove the claim are not
on record.
In the interest of clarity, we reiterate herein our ruling that
there is no identity of subject matter between the COA
proceedings, from which the first petition stemmed, and
respondents' claim of refund before the Board. While the first
petition referred to the propriety of the COA disallowances
per se, respondents' claim before the Board pertained to the
legality of deducting the COA disallowances from retirement
benefits under Section 39 of RA 8291.
Finally, on respondents claim that the GSIS acted in bad faith
when it deducted the COA disallowances from their
retirement benefits, except for bare allegations, there is no
proof or evidence of the alleged bad faith and partiality of the
GSIS. Moreover, the latter cannot be faulted for taking
measures to ensure recovery of the COA disallowances since
respondents have already retired and would be beyond its
administrative reach. The GSIS merely acted upon its best
judgment and chose to err in the side of prudence rather
than suffer the consequence of not being able to account for
the COA disallowances. It concededly erred in taking this
recourse but it can hardly be accused of malice or bad faith
in doing so.
WHEREFORE, in view of the foregoing, the April 16, 2002
Decision in G.R. NOS. 138381 and 141625 is AMENDED. In
addition to the refund of amounts corresponding to benefits
allowed in G.R. No. 138381, the GSIS is ordered to REFUND
all deductions from retirement benefits EXCEPT amounts
representing monetary liability of the respondents to the
GSIS as well as all other amounts mutually agreed upon by
the parties.
SO ORDERED.
Construction of Retirement Laws
G.R. NO. 168964 - January 23, 2006]
BANGKO SENTRAL NG
PILIPINAS, Petitioner, v. COMMISSION ON AUDIT & government without his/her consent. The dispositive portion
RECARREDO S. VALENZUELA, Respondents.
DECISION
YNARES-SANTIAGO, J.:
The instant petition for certiorari seeks to set aside the
December 29, 2003 Judgment1 of the Commission on Audit
(COA) in Decision No. 2003-163, which allowed the release
of respondent Recarredo S. Valenzuela's retirement benefits;
as well as its July 21, 2005 Resolution2 denying petitioner
Bangko Sentral Ng Pilipinas' (BSP) motion for
reconsideration.
On March 1, 1990, respondent was employed by the defunct
Air Transportation Unit (ATU) of BSP's Security Investigation
and Transportation Department (SITD). As such, he assumed
direct accountability over the spare parts and equipment of
BSP's aircrafts.3 On July 20, 1993, he executed a
certification4 in his capacity as Administrative Services Officer
II/Property Supply Officer, assuming responsibility over all
the properties issued to the outgoing Chief Aircraft
Maintenance Officer/PSO. Upon respondent's retirement on
June 30, 1994, however, BSP refused to release his
P291,555.00 retirement benefits for failure to settle his
property accountabilities. According to BSP's Administrative
Services Department (ASD), respondent's remaining
unaccounted spare parts consist of 1,314 pieces worth
P1,007,263.59.5
Respondent filed a complaint6 with the Human Resources
Management Department (HRMD) of BSP against ASD for the
bank's refusal to release his retirement benefits, but HRMD
denied the same.7
On appeal8 by respondent to the COA, the latter rendered a
decision allowing the release of the retirement benefits. It
held that retirement gratuities cannot be withheld, deducted
or applied to the indebtedness of an employee to the
thereof, reads:
Wherefore, premises considered, the instant claim is given
due course and the payment of the subject amounts to the
herein petitioner may now be allowed without prejudice to
any action for recovery of claimant's accountabilities, if
warranted.9
BSP filed a motion for reconsideration contending that since
respondent (1) assumed responsibility effective September
19, 1992, over all the properties under the custody of the
former Aircraft Maintenance Chief;10 and (2) affixed his
signature11 in the list of unaccounted properties,12 as of
February 28, 1995, he thereby admitted his indebtedness to
BSP. Invoking the case of Villanueva v. Tantuico, Jr.,13 BSP
averred that compensation should take place between it and
respondent since they are both creditors and debtors in their
own right.
On July 21, 2005, the COA denied BSP's motion for
reconsideration.14 Hence, BSP filed the instant petition.
The issue to be resolved is whether or not BSP may validly
withhold respondent's retirement benefits and unilaterally
apply the same to his indebtedness to the government.
The Court rules in the negative.
In Cruz v. Tantuico,15 it was held that retirement benefits
accruing to a public officer may not, without his consent, be
withheld and applied to his indebtedness to the government.
In the said case, the National Treasurer withheld a portion of
the petitioner's retirement benefits to answer for losses
arising from her encashment of falsified treasury warrants.
In setting aside the directive of the Treasurer, the Court
explained that -
x x x no negligence attended the petitioner's encashment of
the treasury warrants. Even assuming that she could be held
liable for non-compliance with or violation of some rule or
regulation, this Court agrees with the petitioner that Section
624 of the Revised Administrative Code cannot be construed
to authorize a deduction of the value of the treasury
warrants from her retirement benefits. Said section provides:
Section 624. Retention of salary for satisfaction of
indebtedness. - When any person is indebted to the
Government of the Philippine Islands (or Government of the
United States), the Insular Auditor may direct the proper
officer to withhold the payment of any money due him or his
estate, the same to be applied in satisfaction of such
indebtedness.
The Solicitor General, in his comment, is in agreement with
the petitioner that her retirement pay may not be withheld
by administrative fiat to answer for the shortage incurred
while in office [Rollo, p. 99.] This has also been the
interpretation applied by the respondent COA Acting
Secretary in similar cases [Rollo, pp. 62-63.]
That the retirement pay accruing to a public officer may not
be withheld and applied to his indebtedness to the
government is settled x x x.
The case of Cruz,16 citing Hunt v. Hernandez, explained the
reason for such policy in this wise:
x x x we are of the opinion that the exemption should be
liberally construed in favor of the pensioner. Pension in this
case is a bounty flowing from the graciousness of the
Government intended to reward past services and, at the
same time, to provide the pensioner with the means with
which to support himself and his family. Unless otherwise
clearly provided, the pension should inure wholly to the
benefit of the pensioner x x x.
The above ruling was reiterated in Tantuico, Jr. v.
Domingo,17 and Government Service Insurance System v.
Commission on Audit,18 where the Court held that benefits
under retirement laws cannot be withheld regardless of the
employee's monetary liability to the government. Retirement
laws are liberally interpreted in favor of the retiree because
the intention is to provide for the retiree's sustenance and
comfort when he is no longer capable of earning his
livelihood.19
Moreover, compensation or set off between respondent's
retirement benefits and his alleged liability to BSP cannot be
allowed under Section 21, Chapter 4, Subtitle-B (Commission
on Audit), Book V of the Revised Administrative Code of
1987, which provides:
Sec. 21. Retention of Money for Satisfaction of Indebtedness
to the Government. - When any person is indebted to any
government agency, the Commission may direct the proper
officer to withhold the payment of any money due such
person or his estate to be applied in satisfaction of his
indebtedness.
The aforequoted provision originated from Section 624 of the
Revised Administrative Code of 1917. In construing Section
624, the Court held in Villanueva v. Tantuico, Jr.,20 that the
"indebtedness" contemplated therein pertains to one that is
acknowledged by the employee or one that is adjudged by
the court. Absent any of these two circumstances, no
compensation under Article 1278 of the Civil Code may be
had, thus'
While Section 624 of the Revised Administrative Code does
indeed authorize the set-off of a person's indebtedness to the
Government against "any money due him or his estate to be
applied in satisfaction of such indebtedness," that
indebtedness must be one that is admitted by the alleged
debtor or pronounced by final judgment of a competent
court. In such a case, the person and the Government are in
their own right both debtors and creditors of each other, and
compensation takes place by operation of law in accordance
with Article 1278 of the Civil Code. Absent, however, any
such categorical admission by an obligor or final
adjudication, no legal compensation can take place, as this
Court has already had occasion to rule in an early case.
Unless admitted by a debtor himself, the conclusion that he
is in truth indebted to the Government cannot be definitely
and finally pronounced by a Government auditor, no matter
how convinced he may be from his examination of the
pertinent records of the validity of that conclusion. Such a
declaration, that a government employee or officer is indeed
indebted to the Government, if it is to have binding
authority, may only be made by a court. That determination
is after all, plainly a judicial, not an administrative function.
No executive officer or administrative body possesses such a
power.
In the same vein, Section 265 of the Government Accounting
and Auditing Manual explicitly limits the power of COA to
retain the retirement benefits of a government employee for
the purpose of satisfying his indebtedness only to instances
where (1) the employee admits his indebtedness and
consents to such retention; or (2) a competent court so
directs, thus'
Sec. 265. Retention of salary for the satisfaction of
indebtedness to the government. - When any person is
indebted to the Government of the Philippines or to any
government-owned or controlled corporation or to any other
self-governing board, commission or agency of the
government, the COA may direct the proper officer to
withhold the payment of any money due him or his estate,
the same to be applied in satisfaction of such indebtedness
(Sec. 37, PD 114521 ). However, the retention of the
retirement gratuity of a person to satisfy his
indebtedness to the government may be resorted to
only if the person admits his indebtedness and
consents to the retention or when a competent court
so directs. (Emphasis supplied)cralawlibrary
The COA correctly debunked the averment that respondent
admitted his indebtedness when he issued a certification
assuming responsibility over the properties turned over by
the former Aircraft Maintenance Chief.22 To warrant the
application of set off under Article 1278 of the Civil Code, the
debtor's admission of his obligation must be clear and
categorical and not one which merely arise by inference or
implication from the customary execution of official
documents in assuming the responsibilities of a predecessor,
as in the instant case. Neither would respondent's signature
in the list of unaccounted properties as of February 28, 1995
operate as an acknowledgement of an obligation. Suffice it to
state that said signature alone hardly satisfies the requisite
open and direct recognition of an obligation that would justify
the diminution of retirement benefits. There must be an
independent evidence showing the employee's intention to
unmistakably recognize his indebtedness which was never
shown in the present controversy. On the contrary,
respondent categorically stated in his February 9, 1999 letter
to the BSP that he never admitted any indebtedness nor
consented to the retention of his benefits by the bank.23
Furthermore, even assuming that the February 28, 1995 list
of unaccounted items bearing the signature of respondent
can be construed as an admission of indebtedness, still, said
purported admission cannot extend to the alleged unlocated
1,314 spare parts/furnitures/tools with an acquisition cost of
P1,007,263.59, for which respondent is being held
responsible. This is so because the latter items were never
shown to be included in the February 28, 1995 inventory
signed by respondent. From the initial 10,120 items with a
total acquisition cost of P47,802,136.82, respondent's
alleged accountability was trimmed down to 1,314 spare
parts/furnitures/tools with an acquisition cost of
P1,007,263.59.24 It is doubtful, however, whether the latter
items are included in the February 28, 1995 list inasmuch as
BSP never reconciled these inventories. Hence, the amount
allegedly owed by respondent to BSP are contestable and
inconclusive. It cannot thus qualify as a "debt" for
compensation or set off to be operative under Article
127925 of the Civil Code. At best, said amount is a mere
"claim" that would not make one a creditor of the other. As
explained by the Court in E.G.V. Realty Dev't . Corp. v. Court
of Appeals:26
Compensation or offset takes place by operation of law when
two (2) persons, in their own right, are creditor and debtor of
each other. For compensation to take place, a distinction
must be made between a debt and a mere claim. A debt is a
claim which has been formally passed upon by the highest
authority to which it can in law be submitted and has been
declared to be a debt. A claim, on the other hand, is a debt
in embryo. It is mere evidence of a debt and must pass thru
the process prescribed by law before it develops into what is
properly called a debt.
Nevertheless, while the BSP cannot directly proceed against
respondent's retirement benefits, it can seek restoration of
its claim by means of a proper court action for its recovery.
Verily, there is no prohibition against enforcing a final
monetary judgment against respondent's other assets and
properties.27
The P291,555.00 retirement gratuity due respondent consists
of unused leave credits (P39,555.00), separation incentive
benefits (P112,000.00), and the amount due under the
provident fund (P140,000.00).28 We find no merit in BSP's
claim that separation incentive benefits cannot be interpreted
as part of respondent's retirement benefits. The grant
thereof in favor of retirees is authorized by Republic Act No.
7653 or "The New Central Bank Act," in addition to the
existing gratuities enjoyed by the employees. Section 134
thereof provides:
SEC. 134. Separation Benefits. - Pursuant to Section 15 of
this Act, the Monetary Board is authorized to provide
separation incentives, and all those who shall retire or be
separated from service on account of reorganization under
the proceeding section shall be entitled to such incentives,
which shall be in addition to all gratuities and benefits to
which they may be entitled under existing laws. (Emphasis
added)
As to the provident fund, BSP cannot successfully assert a
paramount lien thereon because the provision invoked by it
contemplate of losses arising from "offenses" and "debts."
Section 5, Article IV of the Rules and Regulations Governing
The Bangko Sentral Ng Pilipinas Provident Fund, states:
Section 5 - Bank's Lien
The Bank shall have a first and paramount lien upon the
amount to which the erring member is entitled as stated in
the preceding Section to cover all losses, costs, and
expenses which the Bank may sustain through his
dishonesty, defalcation, theft, embezzlement or falsification
and other similar offenses.
The same lien shall also apply for any amount due to a
member to cover any debt due to the Bank or the Fund.29
In the instant case, respondent was neither found guilty of
any offense nor conclusively established to be indebted to
BSP. Hence, the latter's assertion of first and paramount lien
over the amount due respondent under the provident fund,
must fail.
WHEREFORE, the petition is DENIED. The December 29,
2003 Judgment of the Commission on Audit in Decision No.
2003-163 which allowed the release of respondent Recarredo
S. Valenzuela's retirement benefits; and its July 21, 2005
Resolution denying petitioner Bangko Sentral Ng Pilipinas'
motion for reconsideration are AFFIRMED.
SO ORDERED.
Right to Reinstatement and Back Salary
G.R. No. 102232 March 9, 1994
VIOLETA ALDOVINO, ALI ALIBASA, FELIX BALINO, DIONISIO
BALLESTEROS, JOSE N. BALEIN, JR., FREDDIE CAUTON, JANE
CORROS, ROBERTO CRUZ, TRINIDAD DACUMOS, ANGELITA
DIMAPILIS, ANDREA ESTONILO, EFREN FONTANILLA, MARY
PAZ FRIGILLANA, MANUEL HENSON, SAMUEL HIPOL,
MERLENE IBALIO, MAGDALENA JAMILLA, ALEXANDER
JUSTINIANI, ROMULO MIRADOR, JULIO MIRAVITE, DANTE
NAGTALON, CLARITA NAMUCO, ALICIA ORBITA, ANGELITA
PUCAN, MYRNA P. SALVADOR, LIBRADA TANTAY, and
ARACELI J. DE VEYRA, petitioners,
vs.
SECRETARY RAFAEL ALUNAN III, DEPARTMENT OF TOURISM
and SECRETARY GUILLERMO M. CARAGUE, DEPARTMENT OF
BUDGET AND MANAGEMENT, respondents.
JOSEPHINE G. ANDAYA, ROSALINDA T. ATIENZA, JOSE M.
BALDOVINO, JR., ASUNCION C. BRIONES, RIZALINA P.
ESPIRITU, MARIBELLE A. GARCIA, ABDULIA T. LANDINGIN,
FLORITA O. OCAMPO, ROLANDO SISON, LOURDES V. TAMAYO,
and ROLANDO VALDEZ, intervenors.
ERLINDA PIZA, ELEONOR SAGNIT, FIDEL SEVIDAL,
CONCEPCION TIMARIO, ELOISA ALONZO, ANGELITO DELA
CRUZ, ROLANDO C. CAGASCA, LYNIE ARCENAS, MARIA EMMA
JASMIN, ALFONSO ANGELES, MACACUNA PANGANDAMAN,
ROSALITA MAUNA, ROMEO PADILLA, ASCENSION PADILLA,
CRISPULO PADILLA, VIRGILIO DEJERO, MEDARDO ILAO,
ROSITA SOMERA, ARMANDO CRUZ, CATALINO DABU,
FRANCISCO VILLARAIZ, NORMA JUMILLA, KENNEDY BASA,
and ARMANDO MENDOZA, intervenors.
ANICITA S. BALUYUT, ANTONINO D. EDRALIN, EVELYN A.
ENRIQUEZ, MA. VICTORIA L. JACOBO, DANIEL M. MANAMTAM,
JESSIE C. MANRIQUE, ENCARNACION T. RADAZA, and MARIO
P. RUIVIVAR, intervenors.
AMOR T. MEDINA and FELIX L. POLIQUIT, intervenors.
Leven S. Puno for petitioners.
The Solicitor General for respondents.
BELLOSILLO, J.:
ASSERTING that their plight is similar to petitioners' in Mandani
v. Gonzales,1 and in the consolidated cases of Abrogar v. Garrucho,
Jr.,
and Arnaldo v. Garrucho, Jr.,  2 herein petitioners and intervenors
seek reinstatement and payment of back wages.
Section 29 of Executive Order No. 120, which took effect upon its
approval on 30 January 1987, reorganizing the then Ministry of
Tourism, provides that incumbents whose positions are not included
in the new position structure and staffing pattern or who are not
reappointed are deemed separated from the service. Pursuant
thereto, the then Ministry of Tourism (MOT, now Department of
Tourism, DOT) issued various office orders and memoranda declaring
all positions thereat vacant,3 and effecting the separation of many of
its employees,4 which led to the Mandani, Abrogar and Arnaldo cases,
as well as the instant petition.
In Mandani, we declared null and void all office orders and
memoranda issued pursuant to E.O. 120 and directed "public
respondents or their successors . . . to immediately restore the
petitioners to their positions without loss of seniority rights and with
back salaries computed under the new staffing pattern from the dates
of their invalid terminations at rates not lower than their former
salaries."5
In Abrogar and Arnaldo, we ordered the reinstatement of petitioners
"to their former positions without loss of seniority rights and with back
salaries computed under the new staffing pattern from the dates of
their invalid dismissals at rates not lower than their former salaries,
provided, however, that no supervening event shall have occured
which would otherwise disqualify them for such reinstatement, and
provided, further, that whatever benefits they may have received from
the Government by reason of their termination shall be reimbursed
through reasonable salary deduction."6
Herein petitioners and intervenors claiming that they should not be
deprived of the relief granted to their former co-employees plead for
reinstatement "without loss of seniority rights and with back salaries
computed under the new staffing pattern from dates of their invalid
termination at rates not lower than their former salaries."7
Decisive in this recourse is the determination of whether the
separation of herein petitioners and intervenors from service was
pursuant to office orders and memoranda declared void in Mandani.
Except for petitioners Samuel Hipol, Jane Corros and Myrna
Salvador, intervenors Concepcion Timario, Efren Fontanilla,
Ascension Padilla and Evelyn Enriquez, public respondents do not
dispute that petitioners and intervenors were unseated from the then
Ministry of Tourism, pursuant to office orders and memoranda issued
under E.O. No. 120. Public respondents nevertheless pray for the
denial of the petition not only because petitioners and intervenors
failed to exhaust administrative remedies and that their claims are
barred by laches, but also in view of the disruption of the present
organizational set-up if reinstatement is directed.
The Solicitor General argues that while petitioners and intervenors
(except petitioners Samuel Hipol, Jane Corros and Efren Fontanilla)
were dismissed contemporaneously with their colleagues
in Mandani (filed 3 June 1987 and decided 4 June
1990), Abrogar (filed 31 October 1990 and decided
6 August 1991) and Arnaldo (filed 7 January 1991 and decided 6
August 1991), they filed this petition and the interventions only in
October 1991, and February, March, May and July 1992, or more than
four (4) years later, hence, laches has set in. In reply, petitioners and
intervenors explain —
. . . since the time these DOT employees were illegally
dismissed in May, 1987, most of them returned to the
far away provinces of their origin because they became
jobless. It was only by the slow and unreliable
communication of word of mouth that they came to
know much later on that they are (sic) entitled to be
reinstated to the DOT . . . 8
The doctrine of laches is "principally a question of inequity of
permitting a claim to be enforced, this inequity being founded on some
change in . . . the relation of parties."9 In the case at bar, equity, if ever
invoked, must lean in favor of petitioners and intervenors who were
unjustly injured by public respondents' unlawful acts. The prejudice
from the high-handed violation of the rights of petitioners and
intervenors resulting in their loss of employment is far more serious
than the inconvenience to public respondents in rectifying their own
mistakes.
Moreover, petitioners and intervenors cannot be deemed to have slept
on their rights considering, as we should, the
following unrebutted allegations in the main petition:
7. Petitioners protested their illegal termination from the
DOT. Many of them questioned their termination with
the Department of Labor and Employment where they
filed a Complaint against the DOT and its top officials
for illegal dismissal. . . . Some of them questioned their
illegal termination before the Civil Service Commission.
8. Many of petitioners joined a picket and
demonstration held by illegally terminated employees
of the DOT before its office at the DOT building at the
Luneta Park.
9. Petitioners were forced to receive their separation or
retirement benefits from the DOT, but all under protest.
 The others continued to fight their cases with the
Department of Labor and Employment even if they got
their separation and/or retirement benefits.
xxx xxx xxx
11. After the finality of this Decision (Mandani) . . .
many other terminated employees of the DOT wrote to
then DOT Secretary Peter D. Garrucho, Jr., as the
successor-in-interest of former Sec. Jose U. Gonzales,
and DBM Secretary Guillermo Carague, asking that
following the Decision in this Mandani
vs. Gonzalez case and being similarly situated as the
twenty-eight (28) petitioners therein, that they be
reinstated to their former or equivalent positions in the
DOT and/or to be paid their back wages. Then . . . DOT
Secretary Garrucho and DBM Sec. Carague never
responded to these letters and did not reinstate and/or
pay any of their back wages.
xxx xxx xxx
16. Following the Decision of this Honorable Court in
the Mandani vs. Gonzalez case and its Resolution in
the consolidated cases of Abrogar
vs. Garrucho and Arnaldo vs. Garrucho, petitioners
made representations with the DOT to be reinstated
and/or paid their back
wages . . . . 10
Neither could petitioners and intervenors be faulted for not joining in
the previous petitions because, as we held in Cristobal
v. Melchor (No. L- 43203, 29 July 1977; 78 SCRA 175, 183, 187) —
More importantly, Cristobal could be expected —
without necessarily spending time and money by going
to court — to relie upon the outcome of the case filed
by his co-employees to protect his interests considering
the similarity of his situation to that of the plaintiffs
therein and the identical relief being sought. On this
point, We find a statement of Justice Louis Brandeis of
the United States Supreme Court in Southern Pacific
vs. Bogert, relevant and persuasive, and We quote;
The essence of laches is not merely lapse of time. It is
essential that there be also acquiescence in the alleged
wrong or lack of diligence in seeking a remedy. Here
plaintiffs, or others representing them, protested . . .
and ever since they have . . . persisted in the diligent
pursuit of a remedy . . . Where the cause of action is of
such a nature that a suit to enforce it would be brought
on behalf, not only of the plaintiff, but of all persons
similarly situated, it is not essential that each such
person should intervened (sic) in the suit brought in
order that he be deemed thereafter free from the
laches which bars those who sleep on their
rights (citations omitted).
xxx xxx xxx
This Court, applying the principle of equity, need not be
bound by the rigid application of the law, but rather its
action should conform to the conditions or exigencies
to a given problem or situation in order to grant a relief
that will serve the ends of justice.
To paraphrase then Chief Justice John Edwin Marshall
of the United States Supreme Court, let us to (do)
complete justice and not do justice by halves ("The
court of equity in all cases delights to do complete
justice and not by halves." Marshall, C. J. — Knight
vs. Knight, 3 P. Wms. 331, 334; Corbet v. Johnson, 1
Brock, 77, 81 — both cited in Hefner, et
al. vs. Northwestern Mutual Life Insurance Co., 123
U.S., 309, 313).
We emphasize that prescription was never raised here as an issue; at
most, it is deemed waived. In Fernandez v. Grolier International,
Inc., 11 we stated:
In the case of Director of Lands v. Dano (96 SCRA
161, 165), this Court held that "inasmuch as petitioner
 had never pleaded the statute of limitations, he is
deemed to have waived the same".
In the cited case of Directors of Lands v. Dano, the Director of Lands,
who was similarly situated as public respondents herein who
represent the Government, was deemed to have waived the defense
of prescription "inasmuch as petitioner had never pleaded the statute
of limitations."
The matter of prescription, we reiterate, may not be considered at this
late stage, not only because it was never raised and therefore now
foreclosed, but more importantly, because it must yield to the higher
interest of justice. Incidentally, it is only in the dissent that the question
of prescription is introduced. Not even the Government raised it.
In 1977, we in fact relaxed the rule on prescription in Cristobal
v. Melchor12 to give way to a determination of the case on the merits
where, like in this case, "[i]t was an act of the government through its
responsible
officials . . . which contributed to the alleged delay in the filing of . . .
complaint for reinstatement." But, we need not go back that far. On 15
August 1991, the Court En Banc granted the related petition in
intervention of Alberto A. Peralta,
et al., 13 in the consolidated cases of Abrogar v. Garrucho,
and Arnaldo v. Garrucho, even if filed on 1 August 1991 or two
months after the four-year prescriptive period, which lapsed on the
14th and 28th of May 1991. As we ruled in Cristobal v. Melchor, 14 "it
is indeed the better rule that courts, under the principle of equity, will
not be guided or bound strictly by the statute of limitations or the
doctrine of laches when to do so manifest wrong and injustice would
result."
The principle that prescription does not run against the State, which
contemplates a situation where a private party cannot defeat the claim
of the State by raising the defense of prescription, is inapplicable
because in this case the private parties are the ones filing a suit
against the State. Consequently, we reiterate our pronouncement
in Fernandez v. Grolier International, Inc.,15 that "[i]t is true that there
are exceptions to the rule that an action will not be declared to have
prescribed if prescription is not expressly invoked (Garcia vs. Mathis,
100 SCRA 250). However, where considerations of substantial justice
come in (as in this case when the very employment, and therefore the
lifeblood, of each petitioner/intervenor is involved), it is better to
resolve the issues on the basic merits of the case instead of applying
the rule on prescription which the private respondent waived when it
was not pleaded." Anyhow, it was public respondents who created the
problem of petitioners and intervenors by illegally abolishing their
positions and terminating their services in outrageous disregard of the
basic protection accorded civil servants, hence our repeated
pronouncement that it was unconstitutional.
An unconstitutional act is not a law; it confers no rights; it imposes no
duties; it affords no protection; it creates no office; it is, in legal
contemplation, inoperative, as if it had not been passed. It is therefore
stricken from the statute books and considered never to have existed
at all. Not only the parties but all persons are bound by the declaration
of unconstitutionality which means that no one may thereafter invoke
it nor may the courts be permitted to apply it in subsequent cases. It
is, in other words, a total nullity. 16 Plainly, it was as if petitioners and
intervenors were never served their termination orders and,
consequently, were never separated from the service, The fact that
they were not able to assume office and exercise their duties is
attributable to the continuing refusal of public respondents to take
them in unless they first obtained court orders, perhaps, for
government budgetary and accounting purposes. Under the
circumstances, the more prudent thing that public respondents could
have done upon receipt of the decision in Mandani, if they were
earnest in making amends and restoring petitioners and intervenors to
their positions, was to inform the latter of the nullification of their
termination orders and to return to work and resume their functions.
After all, many of them were supposed to be waiting for instructions
from the DOT because in their termination orders it promised to
directly contact them by telephone, telegram or written notice as soon
as funds for their separation would be available. 17
Furthermore, the representations to DOT made by petitioners and
intervenors for their reinstatement partook of the nature of an
administrative proceeding, and public respondents also failed to raise
the issue of prescription therein. As already adverted to, that issue
was never raised before us. In reciting the alleged instances of delay
in bringing up this suit, the Solicitor General simply referred to laches,
not prescription. Since this case is an original action, and if we treat
the petition and interventions as ordinary complaints, the failure of
public respondents to raise the issue of prescription in their comments
cannot be interpreted any less than a waiver of that defense. For,
defenses and objections not pleaded either in a motion to dismiss or
in the answer are deemed waived, except the failure to state a cause
of action which may be alleged in a later pleading, if one is
permitted. 18
Above all, what public respondents brought up was the doctrine of
laches, not prescription; and laches is different from prescription. The
defense of laches applies independently of prescription. While
prescription is concerned with the fact of delay, laches is concerned
with the effect of delay. Prescription is a matter of time; laches is a
question of inequity of permitting a claim to be enforced, this inequity
being founded on some change in the condition of the property or the
relation of the parties. Prescription is statutory; laches is not. Laches
applies in equity, whereas prescription applies at law. Prescription is
based on fixed time, laches is not. 19 In any case, it can be said that
the prescriptive period was tolled with the filing of the termination
cases before the Department of Labor and Employment and the Civil
Service Commission, the pendency of which is acknowledged in the
Comment and Memorandum of public respondents.
Incidentally, even the picketing of the premises and the placards
demanding their immediate reinstatement could not be any less than
written demands sufficient to interrupt the period of prescription. As
we noted earlier, "[a]fter the finality of this Decision (Mandani) . . .
many other terminated employees of the DOT wrote to then DOT
Secretary Peter D. Garrucho, Jr . . . and DBM Secretary Guillermo
Carague asking that following the Decision in this Mandani
vs. Gonzalez case and being similarly situated as the twenty-eight
(28) petitioners therein . . . they be reinstated to their former or
equivalent positions in the DOT and/or to be paid their back wages."
But "[t]hen . . . DOT Secretary Garrucho and DBM Sec. Carague
never responded to these
letters," 20 so that it may be said that the period that was interrupted
never started to run again against petitioner and intervenors.
The requirement of prior resort to administrative remedies is not an
absolute rule and this did not bar direct access to this Court in the
analogous cases of Dario v. Mison, 21 and Mandani
22
v. Gonzalez,   thus —
The Court disregards the questions raised as to
procedure, failure to exhaust administrative remedies,
the standing of certain parties to sue (this was raised
by the Civil Service Commission in G.R. No. 86241,
and failure to exhaust administrative remedies was
raised in G.R. Nos. 81954 and 81917 by the Solicitor
General), and other technical objections, for two
reasons, "[b]ecause of the demands of public interest,
including the need for stability in the public service"
(Sarmiento III v. Mison, G.R. No. 79974, December 17,
1987, 153 SCRA 549, 551-552) and because of the
serious implications of these cases on the
administration of the Philippine civil service and the
rights of public servants.
On the argument that existing organizational set-up would be
disrupted if reinstatement be directed, we need only reiterate our 18
October 1990 Resolution in Mandani that —
An erring head of a Department, Bureau, or Office
cannot avoid reinstatement, payment of back pay, and
other acts of compliance with the orders of this Court
by interposing changes effected subsequent to his
unlawful acts and claiming that such changes make it
difficult to obey this Court's orders.
The basic principle to be applied whenever the Court
declares an administrative official to have acted in an
unlawful manner is for that official to undo the harmful
effects of his illegal act and to accord to the aggrieved
parties restoration or restitution in good faith to make
up for the deprivations which may have been suffered
because of his act. 23
Petitioners and intervenors, who are similarly situated as their
counterparts in Mandani, Abrogar and Arnaldo, deserve no less than
equal treatment.
The Solicitor General takes exception to petitioner Samuel Hipol who
was separated from the service under an order of 19 May 1986 issued
pursuant to Sec. 2, Art. III, of Proclamation No. 3, and not under E.O.
No. 120.24 In reply, petitioner Hipol admits that he was "in the process
of working for his reinstatement/reappointment at the DOT when . . .
all positions thereat were declared vacant . . ." 25 Since his separation
from service was not under void orders issued pursuant to E.O. No.
120 and, worse, he was not even an incumbent when E.O. No. 120
was issued, Hipol could not be considered as in the same situation as
the petitioners in Mandani, Abrogar and Arnaldo.
A parallel case is that of intervenor Concepcion Timario who,
according to the Solicitor General, resigned effective 28 May 1987
and was not separated under any of the invalid orders. 26 Intervenor
Timario however contends that she is entitled to relief because her
courtesy resignation was accepted on 9 June 1987 or during the
period positions were declared vacant pursuant to MOT Office Order
No. 9-87. 27 It is significant to note that Timario's letter of resignation
cited "professional reasons" as cause for her abdication 28 which,
obviously, pertains to the nature of her work. Moreover, conspicuously
absent is the customary order requiring the filing of courtesy
resignations. Timario may not be permitted to characterize, by way of
self-serving assertions, that her resignation was merely a courtesy
resignation pursuant to any of the voided office orders or memoranda.
The claim of the Solicitor General that petitioners Jane Corros and
Efren Fontanilla were not employees of the Ministry of Tourism
because their names did not appear in the regular plantilla of the
Ministry of Tourism,29 is specious since the listing of names in the
plantilla is not a conclusive evidence of employment. Nonetheless, in
view of the incessant allegation of the Solicitor General that Corros
and Fontanilla were not employees of the Ministry, and considering
the photocopies of Fontanilla's appointment papers and termination
order submitted by him, 30 as well as the bare assertion of petitioner
Corros that she was for 11 years PRO I in the Licensing Division of
the Ministry and that her name could not be found in the plantilla
because she is now Jane Ombawa in view of her marriage, 31 the fact
of employment should be threshed out first in a proper forum as this
Court is not a trier of facts.
The Solicitor General contends that since petitioner Myrna Salvador
was a casual employee,32 intervenor Ascension Padilla was a
temporary appointee whose appointment expired 20 February
1987,33 and intervenor Evelyn Enriquez was also a temporary
appointee, 34 their appointments are terminable at the pleasure of the
appointing authority. Considering however that the office orders and
memoranda which directed the separation of petitioners and
intervenors were annulled, hence in legal contemplation did not exist,
the effect is, as if the termination did not occur. However, since the
determination in this case is limited only to the extent of the nullity of
said orders and memoranda, the reinstatement of Salvador, Padilla
and Enriquez cannot be ordered in the instant proceeding.
The Solicitor General also seeks dismissal of the petition and
intervention against intervenors Rizalina T. Espiritu, Abdulia T.
Landingin, Medardo Ilao, Rosita Somera, Armando Cruz, Catalino
Dabu, Francisco Villaraiz, Norma Jumilia, Kennedy Basa, Rolando G.
Cagasca and Alfonso Angeles because they were already reinstated.
However, because of the unrefuted allegation that these employees
were not yet paid their respective back wages, then to that extent,
their petitions must be granted.
In computing back wages, we cannot blindly accept the allegation of
petitioners and intervenors that since their separation from the service
in 1987, or about seven (7) years ago, they have been jobless hence
entitled to full back wages. Conformably with existing jurisprudence,
the award of back wages should not exceed a period of five (5)
years. 35
In the final analysis, the dissent admits that petitioners and
intervenors truly deserve the reliefs they pray for except that their
cause of action has allegedly prescribed. Shall we now frustrate their
rightful claims on a ground that was never raised, nor even hinted at,
by public respondents in the entire proceeding? That would be
antithetic to our concept of social justice; at the very least, it is
subversive of the rudiments of fairplay.
WHEREFORE, the instant petition is GRANTED. Petitioners Violeta
Aldovino, Ali Alibasa, Felix Balino, Dionisio Ballesteros, Jose N.
Balein, Jr., Freddie Cauton, Roberto Cruz, Trinidad Dacumos,
Angelita Dimapilis, Andrea Estonilo, Mary Paz Frigillana, Manuel
Henson, Merlene Ibalio, Magdalena Jamilla, Alexander Justiniani,
Romulo Mirador, Julio Miravite, Dante Nagtalon, Clarita Namuco,
Alicia Orbita, Angelita Pucan, Myrna P. Salvador,
Librada Tantay, and Araceli De Veyra, and intervenors Josephine G.
Andaya, Rosalinda T. Atienza, Jose M. Baldovino, Jr., Asuncion C.
Briones,
Maribelle A. Garcia, Florita O. Ocampo, Rolando Sison, Lourdes B.
Tamayo, Rolando Valdez, Erlinda Piza, Eleonor Sagnit, Fidel Sevidal,
Eloisa Alonzo, Angelito Dela Cruz, Lynie Arcenas, Maria Emma
Jasmin, Macacuna Pangandaman, Rosalia Mauna, Romeo Padilla,
Ascencion Padilla, Crispulo Padilla, Virgilio Dejero, Armando
Mendoza, Anicita S. Baluyut, Antonio D. Edralin, Evelyn A. Enriquez,
Ma. Victoria L. Jacobo, Daniel M. Manamtam, Jessie C. Manrique,
Encarnacion T. Radaza, Mario P. Ruivivar, Amor T. Medina, and Felix
L. Poliquit, are ordered REINSTATED immediately to their former
positions without loss of seniority rights and with back salaries
computed under the new staffing pattern from the dates of their invalid
dismissals at rates not lower that their former salaries but not to
exceed a period of five (5) years, provided, however, that no
supervening event shall have occured which would otherwise
disqualify then from such reinstatement, and provided, further, that
whatever benefits they may have received from the Government by
reason of their termination shall be reimbursed through reasonable
salary deductions.
Public respondents are likewise ordered to pay intervenors Rizalina P.
Espiritu, Abdulia T. Landingin, Medardo Ilao, Rosita Somera,
Armando Cruz, Catalino Dabu, Francisco Villaraiz, Norma Jumilia,
Kennedy Basa, Rolando G. Cagasca and Alfonso Angeles their back
salaries similarly under the above-quoted conditions.
As regards petitioners Samuel Hipol, Jane Corros and Efren
Fontanilla, their petition is DISMISSED, as well as the petition in
intervention of Concepcion Timario.
SO ORDERED.
Right to Reinstatement and Back Salary
[G.R. NOS. 142332-43. January 31, 2005]
YOLANDA BRUGADA, ANGELINA CORPUZ, EVELYN ESCANO,
SHIRLEY GARMA, DEDAICA JUSAY, PARSIMA LERIA, SONIA C.
MAHINAY, ADELA SOLO, ELSIE SOMERA, VIRGINIA
TALICURAN, JOSE S. VALLO, and TEOFILA
VILLANUEVA, Petitioners, v. THE SECRETARY OF EDUCATION,
CULTURE AND SPORTS, Respondent.
DECISION
CARPIO, J.:
The Case
This Petition for Review 1 assails the 31 July 1996 Decision2 and 29 February
2000 Resolution of the Court of Appeals in CA-G.R. SP Nos. 37794-99 and
SP Nos. 37800-05. The Court of Appeals dismissed the Petition
for Certiorari filed by petitioners and affirmed the Resolutions issued by the
Civil Service Commission.
The Facts
Petitioners Yolanda Brugada, Angelina Corpuz, Evelyn Escano, Shirley
Garma, Dedaica Jusay, Parsima Leria, Sonia C. Mahinay, Adela Solo, Elsie
Somera, Virginia Talicuran, Jose S. Vallo and Teofila Villanueva
(petitioners') are public school teachers from various National Capital Region
schools.
In the latter part of September 1990, petitioners incurred unauthorized
absences because of the teachers' strike. Their mass action called for the
payment of their 13th-month differentials and clothing allowances, as well as
the recall of DECS Order No. 39, series of 1990 and passage of the debt-cap
bill, among others.
Subsequently, then Department of Education, Culture and Sports (DECS')
Secretary Isidro Cario (Secretary Cario') issued a memorandum to all striking
teachers, as follows:
TO : ALL PUBLIC SCHOOL
TEACHERS AND OTHER
DECS PERSONNEL
SUBJECT : RETURN TO WORK ORDER
Under civil service law and rules, strikes, unauthorized mass leaves and other
forms of mass actions by civil servants which disrupt public services are
strictly prohibited.
Those of you who are engaged in the above-mentioned prohibited acts are
therefore ordered, in the interest of public service, to return to work within 24
hours from your walkout otherwise dismissal proceedings shall be instituted
against you.3 ςrνll
Secretary Cario likewise issued a memorandum to the DECS officials, as
follows:
TO : REGIONAL DIRECTORS
DIVISION SCHOOL SUPERINTENDENT
AND OTHER DECS OFFICIALS
CONCERNED
SUBJECT : TEACHERS AND EMPLOYEES MASS
ACTION
Please inform immediately all DECS teachers and employees who have
started a mass protest action to the prejudice of the public service that they
will be dismissed if they do not return to their jobs within twenty-four (24)
hours from their walkout.
Regional Directors and division superintendent are hereby directed to
accordingly initiate, in the interest of public service, dismissal proceedings
against those who continue with their action and hire their
replacements.4 ςrνll
Petitioners disregarded the directives of Secretary Cario. Consequently,
Secretary Cario filed administrative charges against petitioners for grave
misconduct, gross neglect of duty, and gross violation of Civil Service laws
and rules. Secretary Cario also charged petitioners with refusal to perform
official duty, gross insubordination, conduct prejudicial to the best interest of
the service and absence without leave. Secretary Cario gave petitioners five
days to answer the charges, to secure the assistance of counsel, and to elect a
formal investigation. However, petitioners failed to answer despite notice.
Thereafter, Secretary Cario created committees to investigate and hear the
cases. The investigating committees summoned the school principals
concerned to confirm reports on petitioners' absences. After the investigation,
the committees submitted their reports to Secretary Cario.
Secretary Cario rendered decisions finding petitioners guilty as charged and
dismissed them from the service 'effective immediately. Petitioners appealed
to the Merit Systems Protection Board, which dismissed the appeals.
Petitioners appealed the decisions of the Merit Systems Protection Board to
the Civil Service Commission (CSC'). The CSC issued Resolutions reducing
the penalty to six months suspension without pay and ordering the
petitioners' reinstatement without back wages. The CSC denied petitioners'
motion for reconsideration.
Petitioners filed a Petition for Certiorari with this Court on 9 February 1995.
The Court referred the petition to the Court of Appeals pursuant to Revised
Administrative Circular No. 1-95.
The Court of Appeals rendered a Decision, the dispositive portion of which
reads:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
WHEREFORE, the instant petition for certiorari cannot be given due
course as it is hereby DISMISSED for lack of merit.
SO ORDERED.5 ςrνll
Petitioners filed a motion for reconsideration which the Court of Appeals
denied in its 29 February 2000 Resolution.
Hence, this petition.
The Ruling of the Court of Appeals
The Court of Appeals ruled that the CSC did not gravely abuse its discretion
in finding petitioners guilty of the administrative charges and suspending
them for six months without pay.
The Court of Appeals cited the following grounds for its
decision:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
FIRSTLY, although the constitutional right of the people to form
association[s] embraces both public and private sectors, pursuant to Article
XIII, Section 3, 1987 Constitution, the right to strike is not extended to
government employees under the Civil Service Law (P.D. No. 807).
Under Republic Act 875, workers, including those from the government-
owned and controlled-corporations, are allowed to organize but they
are prohibited from striking. xxx
SECONDLY, during the deliberation of the 1987 Constitutional
Commission, specifically on the Committee on Labor (Alliance of
Government Workers, et al. v. Hon. Minister of Labor etc., 124 SCRA 1),
acting Commissioner of Civil Service Eli Rey Pangramuyen
stated:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
It is the stand, therefore, of this Commission that by reason of the nature of
the public employer and the peculiar character of the public service, it must
necessarily regard the right to strike given to unions in private industry as
not applying to public employees and civil service employees. xxx
xxx
THIRDLY, petitioners' contention that respondent Commission on Civil
Service gravely erred when it affirmed the decision of the then DECS
Secretary, invoking violations of constitutional due process, is without merit.
xxx In the case at bench, it has been shown that petitioners admitted joining
the mass action and despite threats of dismissal, they disobeyed the return to
work order within 24 hours from their walk-out. Petitioners were given an
opportunity to present their side. They did not only refuse to answer the
charges filed against them. They also opted to shy away from the
investigation conducted. xxx
xxx
FINALLY, the facts of the case clearly demonstrate strong basis for the
administrative charge[s] and justifies the subsequent penalty imposed upon
herein petitioners. Indeed, petitioners' contention that they did not strike but
merely joined the mass action exercising their constitutional right
to assemble, is a question of semantics. In the case of MPSTA v. Hon.
Perfecto Laguio, (G.R. No. 95445) , and also in ACT v. Hon. Cari[]o, et al.,
G.R. No. 95590, the Supreme Court held that 'mass actions and peaceful
assemblies amounted to a strike in every sense of the term, constituting as
they did, concerted and unauthorized stoppage of, or absence from work
which it was said teacher's sworn duty to perform. xxx6
The Issue
Petitioners seek the reversal of the assailed decision on the ground that:
THE COURT OF APPEALS COMMITTED A MOST GRIEVOUS
ERROR WHEN IT DID NOT EXPRESSLY RULE ON THE ISSUE
OF THE RIGHT OF PETITIONERS TO BACKWAGES AND IN
EFFECT AFFIRMED THE TERRIBLY WRONG RULING OF
THE CIVIL SERVICE COMMISSION THAT PETITIONERS
HAVE NO RIGHT TO BACKWAGES.7
The Court's Ruling
The petition lacks merit.
Petitioners are no longer pleading for exoneration from the administrative
charges filed against them. Instead, petitioners are merely asking for the
payment of back wages computed from the time they could not teach
pursuant to Secretary Cario's dismissal orders minus the six months
suspension until their actual reinstatement.8 ςrνll
Petitioners have no right to back wages because they were neither
exonerated nor unjustifiably suspended. Petitioners admitted participating in
the teachers' strike which disrupted the education of public school students.
For this offense, the CSC reduced Secretary Cario's dismissal orders to six
months suspension without pay. The Court has already put to rest the issue
of the award of back wages to public school teachers whom the CSC
reinstated in the service after commuting Secretary Cario's dismissal orders
to six months suspension without pay.9 In Alipat v. Court of Appeals ,10 the
Court denied the teachers' claim for back wages stating
thus:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
This Court has also resolved the issue of whether back wages may be
awarded to the teachers who were ordered reinstated to the service after the
dismissal orders of Secretary Cario were commuted by the Civil Service
Commission to six (6) months' suspension. The issue was resolved in the
negative in Bangalisan v. Court of Appeals on the ground that the teachers
were neither exonerated nor unjustifiably suspended. The Bangalisan case
also ruled that the immediate implementation of the dismissal orders, being
clearly sanctioned by law, was not unjustified. The Court held that as
regards the payment of back salaries during the period of suspension of a
member of the civil service who is subsequently ordered reinstated, the
payment of back wages may be decreed if 'he is found innocent of the
charges which caused the suspension and when the suspension is unjustified.
Citing the Bangalisan ruling, this Court in Jacinto v. Court of Appeals held
that when the teachers have given cause for their suspension ' i.e., the
unjustified abandonment of classes to the prejudice of their students - they
were not fully innocent of the charges against them although they were
eventually found guilty only of conduct prejudicial to the best interest of the
service and not grave misconduct or other offense warranting their dismissal
from the service; 'being found liable for a lesser offense is not equivalent to
exoneration.11 ςrνll
The facts in this case are substantially the same as those in Bangalisan v.
Court of Appeals,  12 De la Cruz v. Court of Appeals,  13 Alipat v. Court of
Appeals  14 and Secretary of Education, Culture and Sports v. Court of
Appeals.15 In these cases, the Court categorically declared that the payment
of back wages during the period of suspension of a civil servant who is
subsequently reinstated is proper if he is found innocent of the charges and
the suspension is unjustified. These two circumstances are absent in the
present case. When a court has laid down a principle of law as applicable to
a certain state of facts, it will adhere to that principle and apply it to all
future cases where the facts are substantially the same.16 ςrνll
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 31
July 1996 and Resolution dated 29 February 2000 of the Court of Appeals in
CA-G.R. SP Nos. 37794-99 and SP Nos. 37800-05. Costs against petitioners.
SO ORDERED.
Right to Reinstatement and Back Salary
G.R. No. 138238. September 2, 2003.]
EDUARDO BALITAOSAN, Petitioner, v. THE SECRETARY
OF EDUCATION, CULTURE AND SPORTS, Respondent.
DECISION
CORONA, J.:
Before us is a petition for review of the April 15, 1999
resolution 1 of the Court of Appeals denying petitioner’s
motion for partial reconsideration of its decision dated
November 9, 1998 which ordered petitioner’s reinstatement,
without backwages.chanrob1es virtua1 1aw 1ibrary
Petitioner was among the public school teachers who were
dismissed by then DECS Secretary Isidro Cariño for ignoring
the return to work order while participating in the teacher’s
mass strike at Liwasang Bonifacio from September to
October, 1990.
Records reveal that an administrative complaint was filed
against petitioner, together with a certain Dalangin
Sarmiento and Filomeno Rafer, charging them with grave
misconduct, gross neglect of duty, gross violation of the Civil
Service Law and Rules of Reasonable Office Regulations,
refusal to perform official duty, gross insubordination,
conduct prejudicial to the best interests of the service and
absence without leave.
Petitioner failed to give his explanation on the charges
against him despite due notice. Thus, he was meted
preventive suspension for 90 days and consequently
dismissed from the service in a DECS decision dated
November 29, 1990.
Petitioner appealed said decision to the Merit System
Protection Board but his appeal was dismissed for being filed
out of time.
Aggrieved, petitioner appealed to the Civil Service
Commission but the appeal and the subsequent motion for
reconsideration were both denied in the resolutions dated
September 8, 1994 and April 14, 1998, respectively.
Petitioner then sought recourse from the Court of Appeals via
a petition for certiorari which yielded positive results,
obtaining for petitioner an order of reinstatement without,
however, any award of backwages in his favor.
Thus:chanrob1es virtual 1aw library
WHEREFORE, the petition is hereby given DUE COURSE.
Resolution Nos. 94-4979 and 980819 of the Civil Service
Commission are SET ASIDE. Accordingly, the Department of
Education, Culture and Sports’ Decision in Case No. DECS
90-118 is MODIFIED — instead the petitioner is only guilty of
Conduct Prejudicial to the Best Interest of the Service for
which he is meted out the penalty of suspension from the
service for a period of six (6) months without pay
considering that the petitioner has been out of the service for
more than seven (7) years now as a result of his dismissal
from the service, the Department of Education, Culture and
Sports is hereby ORDERED to immediately reinstate
petitioner Eduardo Balitaosan.
SO ORDERED. 2 never questioned the competence and composition of the
Not wholly satisfied with said decision, petitioner moved for
its partial reconsideration, praying for an award of
backwages, but the same was denied in the above assailed
resolution dated April 15, 1999.
Thus, the instant petition.
Petitioner alleges that the Court of Appeals committed
reversible error when it refused to apply the ruling in the
case of Fabella, Et. Al. v. Court of Appeals, Et. Al. 3 In the
said case, the Court, finding the investigation committee to
be without competent jurisdiction, declared that all
proceedings undertaken were necessarily void and thus could
not provide the legal basis for the suspension or dismissal of
the petitioners. The Court declared a denial of due process
because the inclusion of a representative of a teacher’s
organization in the investigating committee, which was
indispensable to ensure an impartial tribunal, was not
complied with. Consequently, it ordered the payment of back
salaries, allowances, bonuses and other benefits and
emoluments which had accrued to the teachers involved
during the entire period of their preventive suspension
and/or dismissal from the service.chanrob1es virtua1 1aw
1ibrary
Petitioner’s reliance on Fabella is totally misplaced.
As aptly observed by the Court of Appeals, in Fabella, the
jurisdiction and composition of the investigation committee
was put in issue from the very start. When the Court found
the investigation committee to be without competent
jurisdiction, it declared all the proceedings undertaken by
said committee void; therefore, it could not have provided
the legal basis for the suspension and dismissal of private
respondents therein.
In the case at bar, however, aside from the catch-all and
sweeping allegation of "denial of due process," petitioner
investigating committee. He belatedly raised this issue for
the first time in the petition for review before the Court of
Appeals. Thus, the appellate court acted correctly in rejecting
petitioner’s argument.
Issues raised for the first time on appeal cannot be
considered because a party is not permitted to change his
theory on appeal. To allow him to do so is unfair to the other
party and offensive to the rules of fair play, justice and due
process. 4
In its Decision, the Court of Appeals justified petitioner’s
reinstatement:chanrob1es virtual 1aw library
While We view with approbation the authority of the
Department of Education, Culture and Sports to punish the
public school teachers for engaging in the prohibited action,
that is, staging and joining the strike, We, particularly, take
note here the seemingly compartmentalized treatment the
petitioner suffered from the respondent Civil Service
Commission. As petitioner’s appeal to the Merit Systems
Protection Board of the Civil Service Commission was
rebuffed for having been filed out of time and eventually
dismissed petitioner, that of Filomeno Rafer’s, after filing a
third motion for reconsideration from the resolution of the
respondent commission dismissing him from the service, CIVIL SERVICE COMMISSION, Petitioner,
decided Rafer’s case on the merits and reduced his penalty vs.
from dismissal from the service to suspension for six (6) ARNULFO A. SEBASTIAN, Respondent.
months (Rollo, p. 29). We are bewildered actually, as Our
assessment is that the petitioner and Rafer are similarly -----------------------------------------
situated, why the respondent Commission failed to give the
same cordiality given to Rafer. Not only that, in several cases G. R. No. 162463
involving public school teachers, the respondent Commission
modified the penalty of dismissal from the service to a mere MUNICIPALITY OF KABASALAN, ZAMBOANGA SIBUGAY and
reprimand (Alipat v. Civil Service Commission, CA-G.R. SP Mayor FREDDIE I. CHU, Petitioners,
No. 38312). 5 vs.
COURT OF APPEALS and ARNULFO A.
The fact is that petitioner participated in the mass action SEBASTIAN, Respondents.
which in turn resulted in the filing of charges against him and
his subsequent dismissal later on. His reinstatement was not DECISION
the result of exoneration but an act of liberality by the Court
of Appeals. Accordingly, petitioner’s claim for backwages for CALLEJO, SR., J.:
the period during which he was not allowed to work must be
denied. Before us are two (2) consolidated petitions filed under Rule 45 and
Rule 65 of the Revised Rules of Civil Procedure for the reversal of the
No. 61776. Decision1 of the Court of Appeals (CA) and its Resolution
The general rule is that a public official is not entitled to any
in CA-G.R. SP No. 61776.
compensation if he has not rendered any service. No work,
no pay. Since petitioner did not render any service during the
The Antecedents
period for which he is now claiming his salaries, there is no
legal or equitable basis to order the payment thereof. 6
On August 1, 1988, Arnulfo A. Sebastian was given a permanent
appointment as Municipal Secretary of Kabasalan, Zamboanga del
WHEREFORE, the petition is hereby DENIED. The Resolution Sur (Sibugay), effective August 1, 1988.2
of the Court of Appeals dated April 15, 1999 denying
petitioner’s claim for backwages is AFFIRMED.chanrob1es Sometime in April 1992, Sebastian complained of acute gastric ulcer.
virtua1 1aw 1ibrary His doctor, Dr. Corregidor Catane, advised him to take several
months’ rest from work. Dr. Catane wrote the Vice-Mayor advising the
SO ORDERED. latter about Sebastian’s condition.3 On May 4, 1992, Sebastian filed
his application for vacation leave for 44 working days covering the
Right to Reinstatement and Back Salary period of July 1, 1992 to August 31, 1992. 4 He also filed his sick leave
application for 88 working days, from September 1, 1992 to December
31, 1992.5 Both applications for leave were approved by then Acting
G.R. No. 161733 October 11, 2005 Vice-Mayor Jose Cayon, with the condition that his sick leave was
without pay. The applications were not submitted to the Mayor for
approval; neither did Sebastian receive any clearance from the Mayor.
After the elections in May 1992, Freddie Chu and Catalino Genito, Jr.
were the elected Mayor and Vice-Mayor, respectively, of Kabasalan,
Zamboanga del Sur, and assumed office.
In a Letter dated August 25, 1992, Mayor Chu directed Sebastian to
report for duty not later than five days from receipt thereof. 6 Sebastian
did not comply with the said directive. On October 13, 1992, Mayor
Chu issued a final notice to Sebastian, directing him to report for duty
with a warning that should he fail to do so, he would be dropped from
the rolls.7 Sebastian failed to comply anew.
Sebastian received a Memorandum8 dated November 3, 1992 from
Mayor Chu informing him that he was dropped from the municipal
government’s plantilla of personnel effective October 30, 1992, as he
had been absent without leave since September 1, 1992 upon the
expiration of his vacation leave, and that he failed to report for duty
within 30 days from approval of his leave of absence.9
Concerned with the plight of Sebastian, six members of
the Sangguniang Bayan wrote Vice-Mayor Genito and requested that
he (Sebastian) be retained as Secretary of the Sangguniang Bayan.
The matter was elevated to the Civil Service Commission (CSC)
Regional Office.10
On March 9, 1994, the CSC Regional Director, 11 transmitted his 2nd
Indorsement12 to Vice-Mayor Genito declaring that since he had the
authority to appoint all officials and employees of the Sangguniang
Bayan under Section 445 of the Local Government Code, it was within
his power to reinstate Sebastian as Sangguniang Bayan Secretary.
Hence, should the Vice-Mayor decide to do so, the CSC Regional
Office would not interpose any objection thereto. However, Vice-
Mayor Genito ignored the indorsement of the CSC Regional
Director.13
Almost four years or so after he was dropped from the municipal
government’s plantilla, or on August 2, 1996, Sebastian filed a
Complaint14 for illegal dismissal before the CSC against Mayor Chu
and Vice-Mayor Genito as respondents. Sebastian alleged that he
was the Sangguniang Bayan and Municipal Secretary, and after the
end of his leave, Mayor Chu barred him from reporting to work and
from gaining entry into his office at the Sangguniang Bayan.
Sebastian contended that, despite the proddings of
some Sangguniang Bayan members, the Vice-Mayor refused to
reinstate him. The complaint contained the following prayer:
WHEREFORE, it is respectfully prayed of this Honorable Commission
that, judgment be rendered:
1.) Declaring the dismissal of the complainant to be illegal and
contrary to law;
2.) Ordering the respondents the reinstatement of the complainant to
his position as Secretary to the Sangguniang Bayan;
3.) Ordering the respondents to pay the complainant of his backwages
and other benefits he is entitled to.15
Vice-Mayor Genito alleged in his answer16 that Sebastian was
appointed as Municipal Secretary and not as Sangguniang
Bayan Secretary; hence, it was the Mayor who had the authority to
dismiss or reinstate him to
the said position. He averred that he did not concur with the Mayor’s
overt act of terminating Sebastian’s services.17
In his comment,18 Mayor Chu, maintained that Sebastian was never
formally appointed as Sangguniang Bayan Secretary. He averred that
the complainant abandoned his office; hence, he acted in accord with
law in terminating Sebastian’s employment as municipal secretary.19
On July 23, 1998, the CSC issued Resolution No. 98198920 dismissing
Sebastian’s complaint. It ruled that the complainant failed to submit a
medical certificate to justify his claim that he was, indeed, sick during
the period of his absence; the medical report of Dr. Corregidor Catane
was not enough. The CSC also declared that the complainant failed to
report for duty for 43 days despite the Mayor’s directive, and even
failed to inform the Mayor of his whereabouts. The CSC further stated
that Sebastian’s claim for reinstatement was already barred by laches,
considering that he filed his complaint with the CSC only on August 2,
1996, three years from October 30, 1992, the date of his separation
from the service. The fallo of the CSC Resolution reads:
WHEREFORE, the complaint of Arnulfo A. Sebastian is hereby
dismissed. Accordingly, his request for reinstatement to his former
position as SB Secretary is hereby denied.21
Sebastian’s motion for reconsideration was denied by the CSC
through Resolution No. 002012 dated September 4, 2000.22
Sebastian filed his petition with the Court of Appeals (CA) under Rule
43 of the Rules of Court, naming the CSC as
the sole respondent and ascribing the following errors:
I.
THAT THE RESPONDENT CIVIL SERVICE COMMISSION
GRAVELY ERRED IN NOT FINDING THAT THE PETITIONER WAS
DENIED DUE PROCESS;
II.
THAT THE RESPONDENT CIVIL SERVICE COMMISSION
GRAVELY ERRED IN NOT FINDING THAT THE TERMINATION OF
THE PETITIONER FROM SERVICE WAS ILLEGAL AND
POLITICALLY MOTIVATED;
III.
THAT THE RESPONDENT CIVIL SERVICE COMMISSION
GRAVELY ERRED IN FINDING THAT THE MUNICIPAL VICE-
MAYOR HAD IMPLIEDLY CONCURRED IN THE ORDER OF THE
MUNICIPAL MAYOR DROPPING THE PETITIONER FROM
SERVICE DESPITE ITS EARLIER CONCLUSION THAT THE VICE-
MAYOR AND NOT THE MAYOR WHO IS VESTED WITH
AUTHORITY TO TERMINATE A MUNICIPAL SECRETARY;
IV.
THAT THE RESPONDENT CIVIL SERVICE COMMISSION
GRAVELY ERRED IN FINDING THAT PETITIONER IS ALREADY
BARRED BY LACHES.23
In its comment24 to the petition, the CSC, through the Office of the
Solicitor General (OSG), averred that the petition was fatally defective
because the petitioner impleaded it as respondent instead of Mayor
Chu and Vice-Mayor Genito. It posited that Sebastian was lawfully
separated from the service since he failed to report back for work for a
considerable length of time25 despite due notice. More than three
years had elapsed from his dismissal from the government service
before he filed his complaint with the CSC; hence, the complainant
was barred by laches from questioning his separation from the
service.26
The CA rendered judgment granting the petition. It found that the
petitioner was deprived of his right to due process when he was
dismissed without previous notice and hearing and without any valid
cause. Sebastian was justified in not reporting back for work because
he was on sick leave duly approved by the Vice-Mayor; thus, he
should be reinstated as Municipal Secretary. However, the CA ruled
that the petitioner could not be reinstated as Sangguniang
Bayan Secretary since there was no showing that he had been duly
appointed to such position in the first place. The CA declared that
Sebastian was not barred by laches from seeking his reinstatement
because he waited for the outcome of the well-meaning
representations of some members of the Sangguniang Bayan who
took up the cudgels for him when they referred the matter to the CSC
Regional Office. The fallo of the CA decision reads:
WHEREFORE, finding merit in the petition, We GRANT the same.
The appealed CSC Resolution No. 98-1989 is REVERSED and SET
ASIDE. Petitioner is reinstated to his office as Municipal Secretary of
Kabasalan, Zamboanga del Sur, with full back salaries and other
benefits accorded by law.27
However, the CA failed to resolve the issue of whether or not the
petition should be dismissed for the petitioner’s failure to implead the
Mayor and the Vice-Mayor as parties-respondents.
The OSG filed a motion for the reconsideration of the said decision of
the court on the ground that:
With due respect, the August 26, 2002 Decision of this Honorable
Court is contrary to our procedural law, resulting in a denial of due
process on the part of the real parties-in-interest.28
The Municipality of Kabasalan sought to intervene and filed a Motion
to Admit a Motion for the Reconsideration of the CA decision.
Appended thereto was a Motion verified by Mayor Chu, also for the
reconsideration of the decision. The Municipality averred that it was a
real party-in-interest as respondent because the petition was for the
alleged payment of backwages. The CA denied the motion of the
OSG and merely noted the motion of the Municipality. 29 The CA ruled
that the intervention of the Municipality was inappropriate because
judgment had already been rendered. Citing its ruling in Morales v.
Civil Service Commission,30 it held that the respondent CSC was the
proper party-in-interest because there was no private respondent. The
appellate court, likewise, declared that the CSC was estopped from
claiming that the petition was defective for Sebastian’s failure to
implead the Mayor and the Vice-Mayor as parties-respondents. The
CA held that the CSC should have raised the issue in its comment on
the petition.
Forthwith, the CSC, as the petitioner, filed its petition for review
on certiorari under Rule 45 of the Rules of Court, docketed as G.R.
No. 161733. The Municipality of Kabasalan, Zamboanga Sibugay and
Mayor Freddie Chu filed a separate petition for certiorari under Rule
65 with a prayer for the issuance of a restraining order and/or
preliminary injunction, alleging that the CA committed grave abuse of
discretion amounting to excess or lack of jurisdiction in reversing the
assailed Resolution of the CSC. The petition was docketed as G.R.
No. 162463.31 On April 13, 2004, the Court resolved to consolidate
G.R. No. 162463 with G.R. No. 161733.32
Petitioner CSC asserts that it is not the real party-in-interest in the
present case. It posits that the Mayor and the Vice-Mayor of
Kabasalan, Zamboanga del Sur (Sibugay), who stood to be benefited
or injured by the judgment, are the real parties-in-interest. Petitioner
CSC contends that failure to implead the real parties-in-interest
constitutes a denial of due process, as they were not afforded the
opportunity to air their side on the matter when the case was brought
before the CA. Petitioner CSC relies on Section 6, Rule 43 of the
Revised Rules of Court, which provides, among others, that the
petition filed under it shall be made without impleading the court or
agencies which rendered the assailed decision or resolution, either as
petitioners or respondents; and that under Section 7 of the same
Rule, failure to comply with the requirements shall be sufficient ground
for the dismissal of the petition.
Petitioners Municipality of Kabasalan and Mayor Chu, for their part,
posit that the CA gravely abused its discretion when it failed to
dismiss the petition for respondent Sebastian’s failure to implead them
as parties-respondents, and merely noted their motion to intervene in
CA-G.R. SP No. 61776. They aver that they were indispensable
parties as respondents in the CA, and should have been allowed to
intervene and be heard on the issues. Unless impleaded, they would
not be bound by the CA decision.
The Court is posed to resolve the following issues: (1) whether
petitioner Mayor is the real party-in-interest as respondent in the CA;
and (2) whether or not respondent Sebastian had been illegally
dismissed by petitioner Mayor Freddie Chu as Municipal Secretary.
Section 6, Rule 43, of the Rules of Civil Procedure provides that a
petition for review shall state in full the names of the parties to the
case. The court or agency which rendered the decision or resolution is
not to be impleaded either as petitioner or respondent, viz.:
SEC. 6. Contents of the petition.— The petition for review shall (a)
state the full names of the parties to the case, without impleading the
court or agencies either as petitioners or respondents; (b) contain a
concise statement of the facts and issues involved and the grounds
relied upon for the review; (c) be accompanied by a clearly legible
duplicate original or a certified true copy of the award, judgment, final
order or resolution appealed from, together with certified true copies
of such material portions of the record referred to therein and other
supporting papers; and (d) contain a sworn certification against forum
shopping as provided in the last paragraph of Section 2, Rule 42. The
petition shall state the specific material dates showing that it was filed
within the period fixed herein.
The parties in the proceedings before an agency or in the lower court
are the parties in a petition for review in the CA. We agree with the
contention of the petitioners that the real party-in-interest as party-
respondent in the CA was Municipal Mayor Freddie Chu who was the
respondent in the CSC. Respondent Sebastian, who was the
complainant in the CSC, sought to nullify the November 3, 1992
Memorandum of the Mayor terminating his services effective October
30, 1992. Moreover, the respondent, as complainant in the CSC,
prayed that he be granted backwages from September 1, 1992 until
his reinstatement.
The CA ruled that when there is no private individual as respondent in
a petition for review, the public agency a quo is impleaded as a
respondent. This is erroneous. While it is true that petitioner Mayor
acted in his official capacity when he dismissed the respondent from
the service, nevertheless, he was entitled to be heard on the petition.
He is entitled to due process.
The CA relied in its own decision entitled Edmundo Morales v. Civil
Service Commission, docketed as CA-G.R. SP No. 54706 where,
citing Section 633 of Rule 135, it opined that without a public
respondent, the OSG cannot be directed to comment. 34 Such ruling,
however, is not applicable in this case. There is a specific provision
suitable to resolve the issue in the case at bar, that is, Section 6 of
Rule 43, which clearly provides, inter alia, that petitioner "should state
the full names of the parties to the case, without impleading the court
or agencies either as petitioners or respondents."
If petitioner Mayor is not impleaded as a party-respondent in the CA,
he cannot be compelled to abide by and comply with its decision, as
the same would not be binding on him. No man shall be affected by
any proceeding to which he is a stranger, and strangers to a case are
not bound by any judgment rendered by the court. 35 Ergo, res inter
alios judicatae nullum aliis praejudicrium facint. 36 A person who was
not impleaded in the complaint cannot be bound by the decision
rendered therein, for no man shall be affected by any proceeding in
which he is a stranger.37
Ordinarily, the Court will order the respondent to amend his petition to
implead petitioner Mayor as party-respondent and remand the petition
to the CA for further proceedings. However, in view of the peculiar
factual backdrop in the instant case, and considering that petitioner
Mayor assailed in his petition the decision of the CA on its merits and
articulated his arguments in support thereof, the Court shall resolve
the petitions on their merits to avert needless delay.
The CSC affirmed the dismissal of the respondent on its finding that
the respondent failed to report back to work despite due notice. The
CSC declared that the respondent had been continuously absent
without approved leave for more than 30 days. Other than the letter of
Dr. Corregidor Catane, he failed to present any medical certificate to
support his claim that he was indeed sick during the period of his
absences, or to prove the seriousness of his illness, requiring a long
period of treatment and recovery. The CSC held
that the letter of Dr. Catane was not enough. Moreover, the
respondent failed to inform petitioner Mayor of his physical condition
and whereabouts. According to the CSC, the respondent used the
medical advice given by Dr. Catane merely as an afterthought,
designed to cover up for his unauthorized absences.
On the other hand, the CA declared that the petitioner Mayor
dismissed the respondent without any valid cause. The appellate
court ruled that the respondent had filed an application for sick leave
and that such application was approved by the duly-constituted
authority at the time, the then Acting Vice-Mayor. The CA, likewise,
declared that the respondent could not be faulted for not reporting
back to work as he relied on his approved application for sick leave.
The petitions are meritorious.
The ruling of the CA is erroneous. Under Section 444(b)(1)(xiv) of the
1991 Local Government Code,38 applications for leave of municipal
officials and employees appointed by the Mayor shall be acted upon
by him. In this case, the respondent’s applications for leave were
passed upon and approved by the Acting Vice-Mayor and not by the
then Municipal Mayor.
Section 16, Rule XVI39 of the Omnibus Rules, Implementing Book V of
the 1987 Administrative Code, then required applications for sick
leave in excess of five days to be accompanied by a proper medical
certificate. However, the respondent failed to submit any medical
certificate in support of his application for sick leave from September
1, 1992 to December 31, 1992 or for a period of four months. The
letter of Dr. Catane was not sufficient.
Section 32 of the same Omnibus Rules 40 required leaves without pay
in excess of one month to be cleared by the proper head of the
department, in this case, the Municipal Mayor. In this case, the
respondent failed to secure clearance from the Municipal Mayor, and
was granted four months’ sick leave without pay by the Acting Vice-
Mayor without the appropriate clearance from the Mayor.
The CA ruled that the respondent was not barred by laches from filing
his complaint against the petitioner Mayor for reinstatement on
account of the representations made in his behalf by six members of
the Sangguniang Bayan in the CSC, and that the respondent waited
for the outcome of such representations.
The ruling of the appellate court is barren of factual basis. The
respondent was required by the petitioner Mayor to report back to
work not later than five days from notice, but he failed to comply. On
October 12, 1992, petitioner Mayor again wrote the respondent
directing him to report for duty, with a warning that should he fail to do
so, he would be dropped from the rolls. Again, the respondent ignored
the petitioner Mayor’s letter. Having been absent for more than 30
days without an approved leave, the respondent was considered
dropped from the service after one month.41 He, indeed, received
notice that he had been dropped from the service effective October
30, 1992. The respondent never moved for a reconsideration thereof.
It was only on August 2, 1996, or after the lapse of almost four (4)
years, that he filed his complaint against the petitioner Mayor before
the CSC.
It is undisputed that shortly after the petitioner Mayor dismissed the
respondent from the service, six Sangguniang Bayan members
interceded for the respondent in the CSC. However, such
representation was related solely to the respondent’s reinstatement
as Sangguniang Bayan Secretary. The members of the Sangguniang
Bayan never sought the reinstatement of the respondent to the
position of Municipal Secretary. It was only on August 2, 1996, after
the lapse of well-neigh four years from October 30, 1992, that the
respondent sought, for the first time, his reinstatement as Municipal
Secretary by filing his complaint against the petitioner Mayor in the
CSC. In the interim, the respondent failed to take any action against
the petitioner Mayor on account of his dismissal from the government
service.
If an employee was illegally dismissed, he may, by his inaction or by
sleeping on his right, in law, be considered as having abandoned the
office to which he was entitled to be reinstated. A person illegally
dismissed from the office is not thereby exonerated from the
obligation to take steps for his own protection and may not, for an
unreasonable length of time, acquiesce to the order of removal and
then seek for his reinstatement. In case of unreasonable delay, he
may be held to have abandoned title to the office and any right to
recover its emoluments.42 There must be stability in the service so that
public positions may not be unduly retarded; delays in the
enforcement of a right to positions in the service must be discouraged.
It behooved the respondent to take the appropriate remedy for the
nullification of the petitioner Mayor’s November 3, 1992 Memorandum
without unreasonable delay. The respondent failed to do so for a
period of almost four years, and in the meantime, public service has
been prejudiced by his absence. Case law has it that one is barred
from asserting a right if he fails to do so for an unreasonable and
unexplained length of time which by the exercise of diligence, he
could have or should have done earlier. By sleeping on his right for
almost four years, the respondent is now barred from claiming his
right to be reinstated to his position as Municipal Secretary. Relief has
been denied to those who, by sleeping on their rights for an
unreasonable length of time, either by negligence, sheer folly or
inattention, have allowed their claims to slumber. The laws aid the
vigilant and not those who slumber on their rights.43
IN LIGHT OF ALL THE FOREGOING, the Petitions are GRANTED.
The assailed Decision and Resolution of the Court of Appeals in CA-
G.R. SP No. 61776 are REVERSED and SET ASIDE. The
Resolutions of the CSC are REINSTATED.
SO ORDERED.
Right to Reinstatement and Back Salary
G.R. NO. 167762 December 15, 2005]
BATANGAS STATE UNIVERSITY, Petitioner, v. NESTOR
BONIFACIO, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This Petition for Review assails the April 11, 2005
Decision1 of the Court of Appeals in CA-G.R. SP No. 49444
which set aside CSC Resolution Nos. 9814432 and
9825403 affirming the dismissal from the government service
and denying the motion for reconsideration, of respondent
Nestor Bonifacio, respectively.
Respondent was one of the faculty members of Batangas
State University4 who held protest rallies near the main
campus of the university and at the provincial capitol of
Batangas to air their grievances against its president, Dr.
Ernesto M. De Chavez. He was also among the faculty
members who filed a complaint against De Chavez and other
school officials for alleged graft and corruption with the
Senate Blue Ribbon Committee, which referred the same to
the Presidential Commission Against Graft and Corruption
(PCAGC).5
On October 10, 1994, Dr. Rolando Lontok, Vice President for
Academic Affairs, issued a memorandum reassigning
respondent to the office of the president. As the school
semester would end on October 13, 1994, respondent
requested De Chavez if he could report to his office only after
the said date, to which the latter agreed.6
Meanwhile, respondent continued to discharge his duties as a
teacher as well as coach of the university's basketball team.7
On January 10, 1995, De Chavez issued Office Order No. 1,
Series of 1995 dropping respondent from the rolls on the
ground of absence without official leave (AWOL) for more
than 30 days.8
Respondent claims that his dismissal from the service for
being on AWOL has no basis because he was attending to his
job as a teacher and coach of the university's basketball
team. His detail to the office of the president and the
subsequent dropping from the rolls was malicious and in
retaliation to his filing of a complaint against De Chavez and
other school officials.9 In fact, the detail order did not specify
the functions he was to discharge and he was always warned
that he would be dropped from the rolls soon. To show that
he was never absent, respondent presented his Daily Time
Records (DTR) from October to December 1994, Logbook of
attendance from November 2 to December 1994, and Letters
dated October 27, 1994 and November 10, 1994 from Romy
A. Emplica, the school's Sports Coordinator. Further, he
contends that his DTRs were not accepted by the personnel
office because his immediate supervisor in the office of the
president unjustifiably refused to sign them.10
On the other hand, De Chavez denies the allegations of
harassment. He explains that respondent's transfer to his
office was upon the request of Roberto Kalalo, his Chief of
Staff, as he was the most qualified employee to perform the
task. However, despite receipt of the memorandum order,
respondent did not report to his office, thus, he was dropped
from the rolls after incurring absences without official leave
for more than 30 days.11
The Civil Service Regional Office (CSRO) No. IV upheld the
termination of the respondent from the service.12
The Civil Service Commission, in CSC Resolution No. 981443
dated June 11, 1998, dismissed the appeal and affirmed the
assailed order. Respondent's motion for reconsideration was
also denied in CSC Resolution No. 982540 dated September
29, 1998.13
Aggrieved, respondent filed a Petition for Review under Rule
43 of the Rules of Court before the Court of Appeals which
reversed CSC Resolution Nos. 981443 and 982540. The
dispositive portion of the decision reads:
WHEREFORE, the PETITION FOR REVIEW is GIVEN DUE
COURSE.
CSC RESOLUTIONS NOS. 981443 AND 982540 are SET
ASIDE.
Petitioner NESTOR BONIFACIO is REINSTATED as a drafting
instructor of respondent PABLO BORBON MEMORIAL
INSTITUTE OF TECHNOLOGY, now BATANGAS STATE
UNIVERSITY, with full back salaries (i.e., the compensation
fixed for his position and prevailing at the time of
reinstatement, together with the allowances and benefits
appurtenant thereto, as well as the standard or automatic
general increases in salary decreed thereafter from time to
time, inclusive of benefits for sick leave and vacation leave
counted from the date of illegal dismissal, and all benefits
arising from automatic promotions, if any, and increases in
salary during the period of his illegal dismissal) limited to five
(5) years.
SO ORDERED.14
Hence, this Petition for Review based on the following
ground:
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
REINSTATING RESPONDENT BASED ON THE "EQUITIES OF
THE SITUATION" AND IN REVERSING THE CIVIL SERVICE
COMMISSION RESOLUTIONS FINDING THAT HIS
CONTINUOUS ABSENCE AT HIS POST FOR MORE THAN
THIRTY WORKING DAYS JUSTIFIED HIS DISMISSAL FROM
THE SERVICE.15
Petitioner contends that the Court of Appeals erred in
disregarding the finding of fact of the Civil Service
Commission that respondent did not report to his new
assignment, in violation of the rule on finality of factual
findings of administrative or quasi-judicial agencies. By
relying solely on speculation, it further erred in ruling that De
Chavez and other school officials dealt with the respondent in
bad faith. Petitioner also argues that the Court of Appeals
erred in applying "equity" despite the Omnibus Civil Service
Rules and Regulations which warranted the dropping from
the rolls of an employee who incurs absences without official
leave for more than 30 days.
In fine, the issue to be resolved is whether or not respondent
can be considered AWOL for more than 30 days for his
alleged failure to report to his new assignment in the office of
the president.
Undoubtedly, the above issue is one of fact as it assails the
factual finding of the Court of Appeals that respondent had
not gone AWOL. Basic is the rule in this jurisdiction that only
questions of law may be raised in a Petition for Review
on Certiorari under Rule 45 of the Rules of Court. The
jurisdiction of the Supreme Court in cases brought to it from
the Court of Appeals is limited to reviewing and revising the
errors of law imputed to it, its findings of fact being
conclusive,16 save for the most cogent and compelling
reason, like when the factual findings of the Court of Appeals
and the trial court are contradictory.17
Indeed, in the case at bar, the findings of the Civil Service
Commission and its conclusion based on the said findings
contradict those of the appellate court. However, upon
careful review of the records, we find no grounds to grant
the petition. We, thus, affirm the decision of the Court of
Appeals.
Section 2(3), Article IX-B of the Constitution provides that
"no officer or employee of the civil service shall be removed
or suspended except for cause provided by law." The
Administrative Code of 1987 and the Civil Service Law echo
this constitutional edict of security of tenure of the
employees in the civil service. The guarantee of security of
tenure is an important cornerstone of the civil service system
because it secures for a faithful employee permanence of
employment, at least for the period prescribed by law, and
frees the employee from the fear of political and personal
reprisals.18
With this mandate, we held in Government Service
Insurance System v. Court of Appeals 19 that said
constitutional prohibition is a guaranty of both procedural
and substantive due process and that the burden of proof is
upon the employer to show the validity of the dismissal and
not upon the employee to prove otherwise.
We find that petitioner failed to discharge this burden.
Petitioner dropped respondent from the rolls based on
Section 63, Rule XVI of the Omnibus Civil Service Rules and
Regulations which pertinently provides:
Sec. 63. Effect of absences without approved leave. -  An
official or employee who is continuously absent without
approved leave for at least thirty (30) calendar days shall be
considered on absence without official leave (AWOL) and
shall be separated from the service or dropped from the rolls
without prior notice. He shall, however, be informed, at his
address appearing on his 201 files of his separation from the
service, not later than five (5) days from its effectivity.
If the number of unauthorized absences incurred is less than
thirty (30) calendar days, a written Return-to-Work Order
shall be served to him at his last known address on record.
Failure on his part to report for work within the period stated
in the order shall be a valid ground to drop him from the
rolls.
Clearly then, an employee continuously absent without
approved leave for at least 30 calendar days may be dropped
from the rolls without prior notice.
In the instant case, respondent was terminated from the
service because petitioner's personnel department refused to
accept respondent's DTRs as they were not countersigned by
his immediate supervisor. His termination from the service
was upheld by the Civil Service Commission.
However, respondent contests the finding that he was
absent. He claims that he reported for work and faithfully
discharged his functions as a teacher and coach of the
university basketball team. He regularly punched his DTRs in
the bundy clock for the months of October, November and
December, 1994, as well as entered his name in the logbook
when the bundy clock malfunctioned. He also claims that he
reported to the office of the president on October 17, 1994
and several times thereafter; however, he was treated by De
Chavez with condescension and hostility and was not given
any specific task to perform. Respondent maintains that his
DTRs were not accepted by the personnel department
because his immediate supervisor in the office of the
president unjustifiably refused to sign them.
Believing the respondent, the Court of Appeals reversed the
assailed resolutions of the Civil Service Commission, to wit:
Our examination of the records tells us that the CSC did not
give due consideration to the petitioner's detailed and
credible explanations to the effect that he actually reported
to Dr. De Chavez upon receiving the memorandum of
reassignment from Dr. Lontok but Dr. De Chavez allowed
him to report after October 17, 1994 so that he could finish
his teaching duties for the term; that he later on reported to
Dr. De Chavez but the latter treated him with condescension
and hostility, making sure that the petitioner was aware that
he would soon be dismissed; and that the petitioner went
several more times to the Office of the President to inquire
about his DTRs but he was given the run-around. PBMIT did
not refute the petitioner's explanations about reporting to Dr.
De Chavez and about the latter's harsh and angry attitude
towards him on several occasions.
It is unfortunate that the CSC sided with PBMIT only because
the DTRs were not signed and approved by the petitioner's
immediate superior, who was the chief of staff of the Office
of the President. In doing so, the CSC put a higher value to
form rather than to substance. That, to us, is unacceptable
for it goes against the clear equities of the situation. The CSC
thereby committed serious reversible error, particularly since
the records undeniably showed that the approval of the DTRs
was deliberately withheld due to the hostility of Dr. De
Chavez towards the petitioner. Without doubt, PBMIT and its
officials, starting with Dr. De Chavez, were guilty of evident
bad faith in dealing with the petitioner on the matter of his
DTRs.20
We agree with the Court of Appeals.
Petitioner's bad faith becomes more apparent when De
Chavez ignored respondent's presence in the school, allowed
30 calendar days to lapse and thereafter immediately caused
the termination, instead of summoning him to explain his
alleged absences. Clearly, the detail of respondent in the
office of the president was meant to embarrass him and the
subsequent termination of employment was part of the
dubious scheme to rid of respondent's presence in the school
in direct violation of respondent's right to work and unduly
dilutes the constitutional guarantees of security of tenure
and due process. As held in Bentain v. Court of Appeals:21
While a temporary transfer or assignment of personnel is
permissible even without the employee's prior consent, it
cannot be done when the transfer is a preliminary step
toward his removal, or is a scheme to lure him away from his
permanent position, or designed to indirectly terminate his
service, or force his resignation. Such a transfer would in
effect circumvent the provision which safeguards the tenure
of office of those who are in the Civil Service....
monetary benefits should not be limited to 5 years and must
therefore be modified in line with the recent case of Civil
Service Commission v. Gentallan.24 We held in said case that
an illegally dismissed government employee who is later
ordered reinstated is entitled to backwages and other
monetary benefits from the time of her illegal dismissal up to
her reinstatement. This is only fair and just because an
employee who is reinstated after having been illegally
dismissed is considered as not having left her office and
should be given the corresponding compensation at the time
of her reinstatement.
WHEREFORE, the petition is DENIED. The April 11, 2005
Decision of the Court of Appeals in CA-G.R. SP No. 49444
setting aside CSC Resolution Nos. 981443 and 982540 which
upheld the dismissal of respondent from the service
is AFFIRMED with the MODIFICATION that respondent is
entitled to full backwages and other monetary benefits from
the time of his illegal dismissal up to the time of his actual
reinstatement.
SO ORDERED.

Neither are the circumstances obtaining in the case at bar Right to Reinstatement and Back Salary
constitute abandonment. It must be emphasized that the
detail order was issued on October 10, 1994 when the school [G.R. No. 175276, May 31 : 2011]
semester was not yet over. Upon his detail in the office of
the president, respondent did not lose his position22 as a ISABELO L. GALANG, PETITIONER, VS. LAND BANK OF
teacher. Contrary to petitioner's allegation, it was also for THE PHILIPPINES, RESPONDENT.
the school's interest that respondent continued to conduct
classes and coach the basketball team. Thus, it cannot be [G.R. NO. 175282]
said that respondent abandoned his position considering that
he continued to faithfully discharge his duties. Abandonment LAND BANK OF THE PHILIPPINES, PETITIONER, VS.
is a matter of intention and cannot lightly be presumed from ISABELO L. GALANG, RESPONDENT.
certain equivocal acts. To constitute abandonment, there
must be clear proof of deliberate and unjustified intent to DECISION
sever the employer-employee relationship.23
VILLARAMA, JR., J.:
The Court of Appeals correctly ordered respondent's
reinstatement. However, the award of backwages and other
These are two consolidated petitions for review on
certiorari[1] filed by Isabelo L. Galang and Land Bank of the
Philippines (Land Bank) to assail the Decision[2] dated May
25, 2006 and Resolution[3] dated October 25, 2006 of the
Court of Appeals (CA) in CA-G.R. SP No. 91910.  The CA had
reversed and set aside Resolution Nos. 040894[4] and
051256[5] of the Civil Service Commission (CSC) denying
Galang's Motion for Issuance of Writ of Execution[6] and
motion for reconsideration.
The facts of the case are undisputed.
On June 20, 1988, Isabelo L. Galang, the Branch Manager of
Land Bank Baliuag, Bulacan was charged with Dishonesty,
Misconduct, Conduct Prejudicial to the Best Interest of the
Service, Gross Neglect of Duty, Violation of Rules and
Regulations, and Receiving for Personal Use a Fee, Gift or
Other Valuable Thing in the Course of Official Duties or in
Connection Therewith when such Fee is Given by Any Person
in the Hope or Expectation of Receiving a Favor or Better
Treatment than that Accorded Other Persons or Committing
Acts Punishable Under the Anti-Graft Laws.  The case was
docketed as Administrative Case No. 88-002.[7]
Allegedly, Galang demanded money from four borrowers of
the bank, namely, Ceferino Manahan, Gregorio Modelo,
Sotero Santos and Feliza de Vera, in return for a reduction of
interest rates and condonation of penalty charges on their
overdue loans. The complaint further accuses Galang of
making unauthorized disbursements for the repair of the
company car.  Along with Galang, the borrowers also
charged Conrado Ocampo, a Project Analyst in the same
branch, for his alleged participation in soliciting money from
them.
On November 3, 1989, the Hearing Officer of Land Bank
issued a Joint Resolution dismissing both charges for
insufficiency of evidence.  This was later reversed by Land
Bank's General Counsel, Corazon P. Del Rosario, who
recommended Galang and Ocampo's dismissal to the Board
of Directors.
On April 26, 1990, the Board of Directors issued Resolution
No. 90-043[8] which approved Del Rosario's recommendation
but modified the penalty to forced resignation with forfeiture
of all benefits. Aggrieved, Galang and Ocampo appealed to
the Merit Systems Protection Board (MSPB).
In a Decision[9] dated March 8, 1991, the MSPB sustained the
penalty imposed upon Galang and Ocampo but found them
liable only for Dishonesty, Grave Misconduct, Conduct
Prejudicial to the Best Interest of the Service, and Receiving
for Personal Use a Fee, Gift or Other Valuable Thing in the
Course of Official Duties or in Connection Therewith when
such Fee is Given by Any Person in the Hope of Receiving a
Favor or Better Treatment than that Accorded Other
Persons.  The MSPB, however, absolved Galang of the
charges of Gross Neglect of Duty and Violation of Rules and
Regulations.  Galang and Ocampo filed a motion for
reconsideration, which was denied in a Decision[10] dated
June 11, 1991.
Before the CSC, Galang and Ocampo's appeal was dismissed
for lack of merit through Resolution No. 93-1001[11] dated
March 12, 1993.  Their motion for reconsideration was
likewise denied in Resolution No. 93-3812.[12]
Galang alone filed a petition for certiorari[13] with the
Supreme Court alleging grave abuse of discretion committed
by the CSC.  In a Resolution[14] dated June 20, 1995, the
Court referred the matter to the CA pursuant to Revised
Administrative Circular No. 1-95.[15]
On November 21, 1996, the CA rendered a Decision[16] in CA-
G.R. SP No. 37791 nullifying Resolution Nos. 93-1001 and
93-3812.  The appellate court excluded the affidavits of the
complainants as inadmissible in evidence for lack of cross-
examination.  Without them, it found no substantial evidence
to hold Galang administratively liable.
Subsequently, Galang filed a Motion for Clarification and/or
Reconsideration[17] with a prayer for the CA to order his
reinstatement and the payment of his back wages, bonuses
and other fringe benefits reckoned from the date of his
dismissal.  Land Bank, likewise, moved for reconsideration.
In a Resolution[18] dated September 5, 1997, the CA granted
Galang's motion and directed Land Bank to reinstate him and
to pay him back salaries not exceeding five years. Land Bank
received notice of said resolution on September 15, 1997,
but filed no appeal.
Consequently, Galang filed a Motion to Effect Entry of
Judgment.[19]  On November 14, 1997, Land Bank filed before
this Court a Petition for Certiorari[20] which was docketed as
G.R. No. 131186.
its willingness to pay Galang Meal Allowance and Rice
Subsidy.  It, however, refused to include PERA and RATA as
part of his back salaries for 1990 to 1995; the former,
because it was authorized to be paid to LBP employees only
in 1997 and the latter, because he was unable to discharge
the functions of his office.  Land Bank further explained that
Galang could not be reinstated, or his back wages paid from
October 1, 1997 since there was yet no final and executory
decision of the court then. The bank maintained that his
salaries were computed correctly, based on the prevailing
rate for the period when he was unable to work in
accordance with the Court's ruling in Bangalisan v. Court of
Appeals.[25]
On June 7, 2002, Galang filed a Motion for
Clarification[26] with this Court to settle the following issues:

In a Resolution[21] dated January 17, 2001, this Court 9.1 Whether Respondent is entitled to Meal and Rice
dismissed the petition.  This Court concluded that Land Allowances, Representation and Travel Allowance and
Bank's petition for certiorari under Rule 65 of the 1997 Rules Housing Allowance, and the basis thereof;
of Civil Procedure, as amended, was merely an afterthought
considering that it failed to file a petition for review on 9.2 Whether the payment of Provident Fund is limited to five
certiorari under Rule 45 of said Rule.  The bank moved for (5) years only;
reconsideration but was denied.  Thus, on August 7, 2001,
this Court issued an Entry of Judgment.[22] 9.3 The basis for computing the 5-year backwages;

In the meantime, Galang was reinstated in the payroll on
August 16, 2001.  However, on December 14, 2001, Galang
wrote Land Bank's President, Margarito Teves, complaining
that he has yet to receive Personnel Economic Relief
Allowance (PERA), Representation and Travel Allowance
(RATA), Meal Allowance and Rice Subsidy.  He claimed that
since this Court found Land Bank's petition for certiorari to
be a mere afterthought, he should have been reinstated on
October 1, 1997 - after the fifteen (15)-day period to appeal
the Resolution dated September 5, 1997 had lapsed. Galang
also insisted that his back salaries be computed based on the
current salary rate prescribed for his previous position.[23]
9.4 Whether Respondent should have been reinstated since
October 1, 1997.[27]
On July 24, 2002, this Court issued a Resolution[28] which
noted without action Galang's motion for clarification in view
of the Entry of Judgment[29] on August 7, 2001.
On May 15, 2003, Galang filed a Motion for Issuance of Writ
of Execution[30] with the CSC to enforce the November 21,
1996 Decision of the CA in CA-G.R. SP No. 37791, which
ordered his reinstatement and the payment of his backwages
for five years.

In a letter[24] dated February 8, 2002, Land Bank expressed The Commission denied said motion in Resolution No.
040894 dated August 9, 2004.  Galang moved for
reconsideration, but his motion was denied in Resolution No. WHETHER OR NOT THE HONORABLE COURT OF APPEALS
05-1256 dated September 13, 2005.  The CSC held that HAS COMMITTED A GRAVE AND REVERSIBLE ERROR WHEN
execution will not lie because Land Bank had complied with IT RULED THAT [PERSONNEL] ECONOMIC RELIEF
the appellate court's decision. ALLOWANCE (PERA) AND REPRESENTATION AND
[TRANSPORTATION] ALLOWANCE (RATA) SHOULD BE
On November 5, 2005, Galang filed a Petition for INCLUDED IN THE PAYMENT OF RESPONDENT'S
Review[31] under Rule 43 with the CA. BACKWAGES.

In the assailed Decision dated May 25, 2006, the appellate
court granted said petition and declared Galang entitled to
PERA, RATA and other benefits attached to his position.
However, it upheld his reinstatement on August 16, 2001
and sustained the computation of his back wages based on
the prevailing rate at the time of his dismissal. The motions
for reconsideration respectively filed by Galang and Land
Bank were likewise denied by the appellate court in its
Resolution dated October 25, 2006.
Hence, on December 8, 2006, Galang filed a petition for
review on certiorari with this Court raising the following
issues:
I.
THE HONORABLE COURT ERRED IN NOT RULING THAT THE
COMPUTATION OF PETITIONER'S BACKWAGES SHOULD BE
BASED ON HIS CURRENT SALARY LEVEL; AND
II.
THE HONORABLE COURT ERRED IN NOT RULING THAT
PETITIONER IS ENTITLED TO REINSTATEMENT AS EARLY AS
01 OCTOBER 1997.[32]
For its part, Land Bank filed a petition for review on certiorari
on December 22, 2006 based on the following assignment of
errors:
I.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
HAS LIKEWISE COMMITTED GRAVE AND REVERSIBLE ERROR
WHEN IT HELD THAT RESPONDENT GALANG IS STILL
ENTITLED TO THE PAYMENT OF MEAL ALLOWANCE AND RICE
SUBSIDY.[33]
In order to resolve these twin petitions, the Court must
address the following questions: (1) When should Galang be
reinstated? (2) What should be the basis of computing his
back salaries? and (3) Is he entitled to PERA, RATA, Meal
Allowance and Rice Subsidy?
Citing the case of Cristobal v. Melchor,[34] Galang contends
that his back wages should be computed based on the rate of
his salary at reinstatement.  He argues that since Land Bank
availed of the wrong remedy, his reinstatement should be
reckoned from October 1, 1997 or after the reglementary
period to appeal had lapsed.
Land Bank, on the other hand, disputes Galang's demand for
PERA and RATA.  It reasons that since the five-year period
for which Galang shall receive back salaries is from July 1990
to June 1995, he is not entitled to PERA, a benefit which
employees of the Land Bank started receiving only in 1997. 
As to RATA, Land Bank maintains that the nature of such
benefit precludes Galang from claiming it since he did not
incur expenses for representation and transportation while
he was not allowed to work.  Finally, it claims that it had
already paid Galang's Rice Subsidy and Meal Allowance.

We find the petition partly meritorious.
The Omnibus Rules Implementing Book V of Executive Order
No. 292[35] and Other Pertinent Civil Service Laws define
reinstatement as the issuance of an appointment to a person
who has been previously appointed to a position in the career
service and who has, through no delinquency or misconduct,
been separated therefrom, or to the restoration of one who
has been exonerated of the administrative charges filed
against him.
In the present case, Galang was absolved of the
administrative charges against him in the CA Decision dated
November 21, 1996.  Upon motion, the appellate court
issued the Resolution dated September 5, 1997, which
ordered his reinstatement and the payment of his back
salaries for five years.
It is settled that an illegally terminated civil service employee
is entitled to back salaries limited only to a maximum period
of five years, and not full back salaries from his illegal
termination up to his reinstatement.[36] Hence, in Galang's
case, he is entitled to back salaries from July 1990 to June
1995.  This is not disputed by the parties.  Rather, the
uncertainty centers on when he should be reinstated.
The records show that Galang was reinstated in Land Banks's
payroll on August 16, 2001.  He argues, however, that he
should be reinstated on October 1, 1997, after the fifteen
(15)-day period to appeal the Resolution dated September 5,
1997 had lapsed.
Galang's position on the effective date of his reinstatement is
correct.
Well-entrenched is that a judgment or order becomes final
upon the lapse of the period to appeal, without an appeal
being perfected or a motion for reconsideration being filed.[37]
In this case, Land Bank received notice of the CA Resolution
dated September 5, 1997 on September 15, 1997.  Thus, it
had fifteen (15) days from September 15, 1997, or until
September 30, 1997 to file an appeal. Yet, Land Bank did not
do so. Instead, it filed a petition for certiorari with this Court
on November 14, 1997.
However, an original action for certiorari is an independent
action and is neither a continuation nor a part of the trial
resulting in the judgment complained of.  It does not
interrupt the course of the original action if there was no writ
of injunction, even if in connection with a pending case in a
lower court.[38]  Section 7, Rule 65 on certiorari provides:
SEC. 7. Expediting proceedings; injunctive relief. - The court
in which the petition is filed may issue orders expediting the
proceedings, and it may also grant a temporary restraining
order or a writ of preliminary injunction for the preservation
of the rights of the parties pending such proceedings. The
petition shall not interrupt the course of the principal
case unless a temporary restraining order or a writ of
preliminary injunction has been issued against public
respondent from further proceeding in the
case. (Emphasis supplied.)
Clearly, the petition for certiorari filed by Land Bank in G.R.
No. 131186 did not suspend the running of the prescriptive
period to appeal.  Besides, no temporary restraining order or
writ of preliminary injunction was issued in its favor that
could effectively toll the running of the prescriptive period.
It is true that there are instances where, even if there is no
writ of preliminary injunction or temporary restraining order
issued by a higher court, it would be proper for a lower court
or court of origin to suspend its proceedings on the precept
of judicial courtesy.  The principle of judicial courtesy,
however, remains to be the exception rather than the rule.
[39]
  Unfortunately for Land Bank, this is not a proper case for
the operation of the said principle.
Land Bank's failure to interpose an appeal within fifteen (15)
days from its receipt on September 15, 1997 of the
Resolution dated September 5, 1997, rendered the same
final and executory on October 1, 1997.  Galang's
reinstatement therefore must be reckoned, not from August
16, 2001 but from October 1, 1997.  This entitles him to
receive back wages as well from the date when he should
have been reinstated on October 1, 1997 to August 15,
2001, one day before he was actually reinstated.
Concomitant with reinstatement is the payment of back
salaries. Section 59(e) of the Uniform Rules on
Administrative Cases in the Civil Service on the effect of
exoneration on certain penalties provides that in case the
penalty imposed is dismissal, he shall immediately be
reinstated without loss of seniority rights with payment of
back salaries. It was enunciated in Philippine Amusement
and Gaming Corporation v. Salas[40] that:
When an official or employee was illegally dismissed and his
reinstatement has later been ordered, for all legal purposes
he is considered as not having left his office. Therefore, he is
entitled to all the rights and privileges that accrue to him by
virtue of the office he held.
In this case, the second issue for resolution pertains to the
base figure to be used in computing Galang's back salaries.
Galang invokes the 1980 case of Cristobal v. Melchor[41] as
authority in saying that the computation of his back wages
should be based on his salary at reinstatement.  However,
we find Galang's reliance on said case misplaced.
In Cristobal v. Melchor, Jose C. Cristobal was reinstated as
an Assistant in the Office of the President, a position different
from his position as Private Secretary I which he held when
he was terminated.  Upon being reinstated, he was paid the
salary corresponding to that of a Private Secretary I at the
rate when he was wrongfully dismissed fifteen (15) years
back.  The Court ruled therein that Cristobal must be given a
position and compensation commensurate and comparable to
that which he held, taking into account the increases in
salary during the fifteen (15)-year period preceding his
reinstatement.  To stress this point, the Court fixed his
compensation at the rate prevailing at the time of his
reinstatement inclusive of allowances, benefits and increases
in salary.  Moreover, it ordered the respondents therein to
pay Cristobal the differential between the current rate of the
salary, for a position commensurate to a Private Secretary I,
and the old rate from the time he "reported for duty"[42] that
is, from the time he was reinstated.
Clearly, what was in issue in Cristobal v. Melchor was the
rate of Cristobal's compensation upon his reinstatement, not
the rate of his back salaries.  In fact, he did not dispute the
payment of his back salaries for five years computed at the
rate when he was dismissed.[43]
The controlling rule on the rate at which back salaries shall
be paid was laid down by the Court as early as 1977 in the
case of Balquidra v. CFI of Capiz, Branch II. [44]  In said case,
the Court awarded back salaries to the petitioner therein at
the rate last received by him or his "original salary" [45] for
five years without qualification and deduction.  This means
that the illegally dismissed government employee shall be
paid back salaries at the rate he was receiving when he was
terminated unqualified by salary increases and without
deduction from earnings received elsewhere during the
period of his illegal dismissal.  We have invariably held so
in Gementiza v. Court of Appeals,[46] Ginson v. Municipality
of Murcia, et al.,[47] Gabriel v. Domingo,[48] and Del Castillo v.
Civil Service Commission.[49]  We find no reason to depart
from the said rule in the instant case.
Be that as it may, we cannot apply the foregoing rule in the
computation of Galang's back salaries from October 1, 1997
to August 15, 2001.  His back salaries for such period
represent recompense for the earnings he failed to realize
because he was belatedly reinstated.  Following this Court's
pronouncement in Cristobal v. Melchor, Galang's back
salaries for October 1, 1997 to August 15, 2001 should be
computed at the rate prevailing at the proper date of his
reinstatement on October 1, 1997, inclusive of allowances,
benefits and increases in salary prior to reinstatement.
Apart from back salaries, Galang demands payment of RATA,
PERA, Meal Allowance and Rice Subsidy from Land Bank.
Back wages represent the compensation that should have
been earned but were not collected because of the unjust
dismissal.[50]  This includes other monetary
benefits[51] attached to the employee's salary following the
principle that an illegally dismissed government employee
who is later reinstated is entitled to all the rights and
privileges that accrue to him by virtue of the office he held.
Pertinent to this case, Republic Act (R.A.) No. 6758,
[52]
 otherwise known as the Compensation and Position
Classification Act of 1989, was enacted on July 1, 1989 to
integrate certain benefits received by government official and
employees into their salaries.  Section 12 of said Act
provides:
SEC. 12. Consolidation of Allowances and Compensation. -
All allowances, except for representation and
transportation allowances; clothing and laundry
allowances; subsistence allowance of marine officers and
crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel
stationed abroad; and such other additional
compensation not otherwise specified herein as may be
determined by the DBM, shall be deemed included in the
standardized salary rates herein prescribed. Such other
additional compensation, whether in cash or in kind, being
received by the incumbents only as of July 1, 1989 not
integrated into the standardized salary rates shall continue to
be authorized.
Existing additional compensation of any national government
official or employee paid from local funds of a local
government unit shall be absorbed into the basic salary of
said official or employee and shall be paid by the National
Government.
Section 17 of the Act, however, exempts incumbent
government officials and employees from the operation of
Section 12, thus:
SEC. 17. Salaries of Incumbents. - Incumbents of positions
presently receiving salaries and additional
compensation/fringe benefits including those absorbed from
local government units and other emoluments, the aggregate
of which exceeds the standardized salary rate as herein
prescribed, shall continue to receive such excess
compensation, which shall be referred to as transition
allowance. The transition allowance shall be reduced by the
amount of salary adjustment that the incumbent shall
receive in the future.
The transition allowance referred to herein shall be treated
as part of the basic salary for purposes of computing
retirement pay, year-end bonus and other similar benefits.
xxxx
Being an incumbent at the time, Galang would have
continued to receive RATA, Meal Allowance and Rice Subsidy,
separate from his salary, had he not been illegally dismissed
from service.
Representation and Transportation Allowance or RATA is a
fringe benefit distinct from salary. Unlike salary which is paid
for services rendered, RATA belongs to a basket of
allowances to defray expenses deemed unavoidable in the
discharge of office.  Hence, it is paid only to certain officials
who, by the nature of their offices, incur representation and
transportation expenses.[53]  The Department of Budget and
Management (DBM) Manual on Position Classification and
Compensation discusses the nature of the RATA and qualifies
the entitlement of reinstated government employees thereto number of work days in a month, inclusive of regular and
in certain fiscal years: special holidays falling on work days. (Emphasis supplied.)

The pertinent general provisions of the General

For emphasis, the five-year period covered in the
Appropriations Acts (GAAs) prior to FY 1993 and in the FY
computation of Galang's back salaries and other benefits is
1999 GAA provided that the officials listed therein and those
from July 1990 to June 1995.  Also, he shall receive back
of equivalent ranks as may be determined by the
salaries and other benefits for the period during which he
Department of Budget and Management (DBM) are to be
should have been reinstated from October 1, 1997 to August
granted monthly commutable RATA. Hence, prior to FY 1993
15, 2001.  Since the General Appropriations Act (GAA) for
and in FY 1999, RATA were allowances attached to the
1993 to 1998 and in the year 2000 onwards require the
position.
actual performance of duty as a condition for the grant of
RATA, Galang shall not receive RATA in those years but shall
The pertinent provisions of the FYs 1993 to 1998 GAAs and
be entitled to RATA only from July 1990 to December 1992
in the FY 2000 GAA provided that the officials listed therein
and in the year 1999.
and those of equivalent ranks as may be determined by the
DBM while in the actual performance of their
On the other hand, Personnel Economic Relief Allowance
respective functions are to be granted monthly
(PERA) is a P500 monthly allowance authorized under the
commutable RATA. This provision was reiterated in the
pertinent general provision in the annual GAA. It is granted
pertinent general provisions of the subsequent GAAs.
to augment the pay of government employees due to the
Hence, in FYs 1993 to 1998 and beginning FY 2000 and
rising cost of living.
up to the present, the actual performance of an
official's duties and responsibilities was a pre-
On February 12, 1997, Congress enacted R.A. No.
requisite to the grant of RATA.
8250[54] (GAA for CY 1997), which granted PERA to all
government employees and officials as a replacement of the
The rationale behind the qualifying phrase, "while in the
Cost of Living Allowance (COLA).[55]  This explains why Land
actual performance of their respective functions," is to
Bank employees began receiving PERA only in 1997 -
provide the official concerned with additional funds to meet
because prior to 1997, said benefit was called by another
necessary expenses incidental to and connected with the
name, COLA.  Hence, Land Bank is still liable to pay the
exercise or the discharge of the functions of the office. Thus,
monthly PERA to Galang.
if the official is out of office, whether voluntary or
involuntary, the official does not and is not supposed to incur
In his Motion for Issuance of Writ of Execution, Galang
expenses. There being no expenses incurred, there is nothing
acknowledges receipt of "Rice Allowance, which was
to reimburse.
monetized based on the value of a sack of rice within the
period from July 1990 to June 1995."[56]  Still, he claims Rice
Since RATA are privileges or benefits in the form of
Subsidy for the succeeding years.  Considering, however,
reimbursement of expenses, they are not salaries or part of
that Galang is entitled to back wages only from July 1990 to
basic salaries. Forfeiture or non-grant of the RATA does
June 1995 and from October 1, 1997 to August 15, 2001, his
not constitute diminution in pay. RATA may be spent in
claim for Rice Subsidy for the intervening years has no legal
variable amounts per work day depending on the situation.
basis.
Entitlement thereto should not be proportionate to the
As to Meal Allowance, Land Bank concedes Galang's
entitlement thereto, albeit, it claims that it had already paid
the same.
Jurisprudence dictates that the burden of proving payment of
monetary claims rests on the employer.  The rationale for
this rule was explained in G & M Philippines, Inc. v.
Cuambot[57]:
x x x [O]ne who pleads payment has the burden of proving
it. The reason for the rule is that the pertinent personnel
files, payrolls, records, remittances and other similar
documents - which will show that overtime, differentials,
service incentive leave, and other claims of workers have
been paid - are not in the possession of the worker but in the
custody and absolute control of the employer. Thus, the
burden of showing with legal certainty that the obligation has
been discharged with payment falls on the debtor, in
accordance with the rule that one who pleads payment has
the burden of proving it. x x x[58]
and deduction; (b) back salaries from the proper date of his
reinstatement on October 1, 1997 until August 15, 2001, at
the rate prevailing on October 1, 1997 inclusive of increases
in salary; (c) Cost of Living Allowance (COLA) from July 1990
to June 1995; (d) Personnel Economic Relief Allowance
(PERA) from October 1, 1997 to August 15, 2001; (e) 
Representation and Transportation Allowance (RATA) from
July 1990 to December 1992 and for the year 1999; (f) Meal
Allowance in the amount of P34,860.00; and (g) Meal
Allowance and Rice Subsidy for October 1, 1997 to August
15, 2001.
No pronouncement as to costs.
SO ORDERED.

To prove payment of Galang's meal allowance for 1988 and

July 1990 to 1995 in the amount of P34,860.00, Land Bank
annexed Disbursement Order No. 02-02-0170[59] dated
February 8, 2002 to its Comment[60] in CA-G.R. SP No.
91910.  However, said disbursement order lacks the
signature of Galang as recipient.  Verily, we cannot take such
document as conclusive proof that Galang has been paid his
meal allowance.  Taking into account our determination that
Galang ought to be reinstated earlier, Land Bank shall
likewise be liable to pay his Meal Allowance from October 1,
1997 to August 15, 2001.

WHEREFORE, the Decision dated May 25, 2006 and

Resolution dated October 25, 2006 of the Court of Appeals in
CA-G.R. SP No. 91910 are AFFIRMED WITH
MODIFICATIONS.  Land Bank of the Philippines is ordered
to pay Isabelo L. Galang: (a) back salaries for five (5) years
from the time of his unlawful dismissal in July 1990 to June
1995 at the rate last received by him without qualification