CASE DIGEST IN

ADMINISTRATIVE LAW and LAW ON PUBLIC OFFICERS

LIST OF CASES

ADMINISTRATIVE LAW
1. URC v. LLDA. G.R. No. 191427. May 30, 2011
2. PEOPLE v. MORALES. G.R. No. 166355. May 30, 2011
3. LACSON v. EXEC. SEC, ET.AL. G.R. No. 165399. May 30, 2011
4. GANNAPAO v. CSC. G.R. No. 180141. May 31, 2011
5. IMPERIAL v. GSIS. G.R. No. 191224. October 4, 2011
6. OFFICE OF THE OMBUDSMAN v. REYES. G.R. No. 170512. October 5, 2011

PUBLIC OFFICERS
1. JAPSON v. CSC. G.R. No. 189479. April 12, 2011
2. GSIS v. MAYORDOMO. G.R. No. 191218. May 31, 2011
3. GANADEN v. CA. G.R. No. 170510-11. June 1, 2011
4. OFFICE OF THE OMBUDSMAN v. ANDUTAN. G.R. No. 164679. July 27, 2011
5. MARTINEZ v. VILLANUEVA. G.R. No. 169196. July 6, 2011
6. CSC V. CRUZ. G.R. No. 187858. August 9, 2011
7. COASTAL SAFEWAY MARINE SERVICES VS. ESGUERRA, G.R. No. 185352, August 10, 2011)
8. PCGG v. SANDIGANBAYAN. G.R. No. 152500. September 14, 2011
9. OP v. CATAQUIZ. G.R. No. 183445. September 14, 2011
10. DUMDUMA v. CSC. G.R. No. 182606. October 4, 2011
11. QUARTO v. MARCELO. G.R. No. 169042. October 5, 2011
12. IN THE MATTER OF THE PETITION FOR THE WRIT OF AMPARO AND HABEAS DATA IN FAVOR OF NORIEL
H. RODRIGUEZ; NORIEL H. RODRIGUEZ VS. GLORIA MACAPAGAL-ARROYO, ET AL., G.R. No. 191805 & G.R.
No. 193160. November 15, 2011
13. NAPOCOR v. CSC. G.R. No. 152093. January 24, 2012
14. ONG v. OP. G.R. No. 184219. January 30, 2012
15. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE CIVIL SERVICE COMMISSION VS. MINERVA M.P.
PACHECO, G.R. No. 178021, January 31, 2012
16. UNICAN v. NEA. G.R. No. 187107. January 331, 2012
 ADMINISTRATIVE LAW

UNIVERSAL ROBINA CORP. (CORN DIVISION), VS. LAGUNA LAKE DEVELOPMENT AUTHORITY,
[G.R. NO. 191427, MAY 30, 2011]

Doctrines:
 The thrust of the doctrine of exhaustion of administrative remedies is that courts must allow
administrative agencies to carry out their functions and discharge their responsibilities within the
specialized areas of their respective competence.
 Administrative due process cannot be fully equated with due process in its strict judicial sense for it is
enough that the party is given the chance to be heard before the case against him is decided.

Facts:
Laguna Lake Development Authority (LLDA), respondent, found that Universal Robina Corp. failed to comply
with government standards provided under Department of Environment and Natural Resources (DENR)
Administrative Orders (DAOs) Nos. 34 and 35, series of 1990. After conducting hearings, the LLDA resolved
that respondent is found to be discharging pollutive wastewater. Petitioner moved to reconsider however the
LLDA denied petitioner’s motion for reconsideration and reiterated its order to pay the penalties. Petitioner
challenged by certiorari the orders before the Court of Appeals. The appellate court went on to chide
petitioner’s petition for certiorari as premature since the law provides for an appeal from decisions or orders of
the LLDA to the DENR Secretary or the Office of the President, a remedy which should have first been
exhausted before invoking judicial intervention.

Issue:
Whether petitioner was deprived of due process and lack of any plain, speedy or adequate remedy as grounds
which exempted it from complying with the rule on exhaustion of administrative remedies.

Held:
No. The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system.  The thrust of
the rule is that courts must allow administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is
obvious.  It entails lesser expenses and provides for the speedier resolution of controversies.  Comity and
convenience also impel courts of justice to shy away from a dispute until the system of administrative redress
has been completed.Petitioner had thus available administrative remedy of appeal to the DENR Secretary.  Its
contrary arguments to show that an appeal to the DENR Secretary would be an exercise in futility as the latter
merely adopts the LLDA’s findings is at best, speculative and presumptuous.

The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity
to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of.
Administrative due process cannot be fully equated with due process in its strict judicial sense for it is enough
that the party is given the chance to be heard before the case against him is decided.
 PEOPLE OF THE PHILIPPINES VS. LUIS J. MORALES
[G.R. No. 166355, May 30, 2011]

Doctrine:
A government-owned or controlled corporation must be owned by the government, and in the case of a stock
corporation, at least a majority of its capital stock must be owned by the government.

Facts:
The National Centennial Commission (NCC) and the Bases Conversion Development Authority (BCDA)
organized the Philippine Centennial Expo ’98 Corporation or Expocorp whose primary purpose was to operate,
administer, manage and develop the Philippine Centennial International Exposition 1998. The Philippine
Centennial project was marred by numerous allegations of anomalies, among them, the lack of public biddings.
Both the Senate Blue Ribbon Committee and the AHICC recommended to the Office of the Ombudsman that a
more exhaustive investigation of the Philippine Centennial project be conducted. The investigation resulted in
the filing in of an Information by the Ombudsman’s Fact-Finding and Investigation Bureau against respondent
Luis J. Morales (Morales), the acting president of Expocorp at the time relevant to the case. In the proceedings
before the Sandiganbayan, Morales moved for the dismissal of the case for lack of jurisdiction over his person
and over the offense charged. 

Issue:
Whether Expocorp was organized and created for the sole purpose of performing the executive functions of the
National Centennial Commission and the sovereign functions of the government, and should  be considered as
a public office

Held:
No. The Court here ruled that Philippine Centennial Expo ’98 Corporation is a private corporation. It was not
created by a special law but was incorporated under the Corporation Code and was registered with the
Securities and Exchange Commission. It is not a government-owned or controlled corporation. Although the
Bases Conversion Development Authority owned almost all of the shares of Expocorp at the time of the latter’s
incorporation, the Board of Directors of Expocorp allowed a private corporation to buy its shares constituting
55.16% of its outstanding capital stock two months after incorporation. With the BCDA as a minority
stockholder, Expocorp cannot be characterized as a government-owned or controlled corporation. A
government-owned or controlled corporation must be owned by the government, and in the case of a stock
corporation, at least a majority of its capital stock must be owned by the government. Since Expocorp is not a
GOCC, its officers and employees are private individuals who are outside the jurisdiction of the
Sandiganbayan.
 LACSON VS. EXEC. SEC, ET.AL.
[G.R. NO. 165399, MAY 30, 2011]

Doctrine:
The power of the Ombudsman to investigate offenses involving public officials is not exclusive, but is
concurrent with other similarly authorized agencies of the government in relation to the offense charged.

Facts:
Petitioners Theron V. Lacson, Jaime R. Millan and Bernardo T. Viray were non-presidential appointees and
career service officials of respondent Philippine Estates Authority. Sulficio O. Tagud filed a complaint-affidavit
with the Office of the Ombudsman accusing petitioners for overpricing, by P600 million the contract for the
construction of the President Diosdado Macapagal Boulevard.The Ombudsman proceeded with the
investigation of both the criminal and the administrative aspects of the case. The Presidential Anti-Graft
Commission (PAGC) requested the Ombudsman for authority to conduct administrative disciplinary
proceedings against the petitioners. The basic complaint has not been further docketed as an administrative
case. Thus, the same did not preclude the subsequent filing with the PAGC of an administrative complaint
against the concerned PEA officials. A formal complaint was filed by the Investigation Office of PAGC charging
several employees of PEA, including petitioners.PAGC issued a resolution recommending the dismissal of
petitioners with the imposition of the corresponding accessory penalties of forfeiture of retirement benefits and
disqualification from employment in the government. The President approved the recommendation. Millan and
Viray, together with Manuel R. Beriña, Jr. filed a motion for reconsideration. This motion was not acted upon.
Aggrieved, they filed their Petition for Certiorari and Prohibition under Rule 65 with the CA. The CA dismissed
the consolidated petitions.

Issue:
Whether the Ombudsman should conduct the investigation on the charge of overpricing of the project against
petitioners.

Held:
The Ombudsman has concurrent jurisdiction with similarly authorized agencies. Petitioners argue that because
they are not presidential appointees, it is only the Ombudsman which has jurisdiction over them. In this regard,
the petitioners are not correct. The Court has repeatedly ruled that the power of the Ombudsman to investigate
offenses involving public officials is not exclusive, but is concurrent with other similarly authorized agencies of
the government in relation to the offense charged. Therefore, with respect to petitioners, the Ombudsman may
share its authority to conduct an investigation concerning administrative charges against them with other
agencies. At any rate, this issue is already moot and academic as the Ombudsman has terminated its
investigation of petitioners. It appears therefrom that the Ombudsman dismissed the administrative case
against the petitioners because the charges had already been passed upon by PAGC.
 GANNAPAO VS. CSC
[GR NO. 180141, MAY 31, 2011]

Doctrines:

The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings,
an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling
complained of. In the application of the principle of due process, what is sought to be safeguarded is not lack of
previous notice but the denial of the opportunity to be heard. As long as a party was given the opportunity to
defend his interests in due course, he was not denied due process.

Facts:

Private respondents Barien, et al are stockholders and board members of United Workers Transport Corp.
which took over the defunct Metro Manila Transit Corp. They allege that upon orders of UWTC’s general
manager, the buses regularly driven by them were confiscated by a “task force” composed 0of former drivers,
conductors and mechanics led by petitioner. Armed with deadly weapons, petitioner and his group intimidated
and harassed the regular bus drivers and conductors, and took over the buses.  Petitioner is not authorized to
use his firearm or his authority as police officer to act as bodyguard of Atty. Gironella and to intimidate and
coerce the drivers/stockholders and the bus passengers.  Barien, et al. thus prayed for the preventive
suspension of petitioner, the confiscation of his firearm and his termination after due hearing. He was
sentenced the penalty of 3 mos. suspension from service without pay.

Petitioner appealed his case with the DILG but Sec. Alfredo Lim denied it and affirmed the suspension. He
then appealed to the CSC claiming that he was denied due process but was again denied and modified the
decision to dismissal from service.

Issues:

(1)Whether the petitioner was denied due process in the proceedings before the Office of the Legal Service of
the PNP

(2) Whether the CA correctly affirmed the CSC decision modifying the penalty of petitioner from three months
suspension to dismissal from the service.

Held:

(1)No. The records of the case show that petitioner was adequately apprised of the charges filed against him
and he submitted his answer to the complaint while the case was still under a pre-charge investigation.  When
the Office of the Legal Service conducted a summary hearing on the complaint, petitioner was again duly
notified of the proceedings and was given an opportunity to explain his side but failed to do so.

(2) Yes. Petitioner, acting as private bodyguard without approval of the proper authorities is classified as a
grave offense punishable with dismissal from service as provided in Memorandum Circular No. 93-
024 (Guidelines in the Application of Penalties in Police Administrative Case)
 IMPERIAL, JR. V. GSIS
[GR NO. 191224, OCTOBER 4, 2011]

Doctrine:

Procedural due process is the constitutional standard demanding that notice and an opportunity to be heard be
given before judgment is rendered. As long as a party is given the opportunity to defend his interests in due
course, he would have no reason to complain; the essence of due process is in the opportunity to be heard.A
formal or trial-type hearing is not always necessary.

Facts:

Petitioner, then Branch Manager of GSIS Naga Field Office was administratively charged with Dishonesty,
Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service for approving salary loan
requests of 8 employees who lacked contribution requirements. He was preventively suspended for 90 days.
The counsel of the petitioner explained that his client granted the loan applications under an existing board
resolution, with the approval of the GSIS Vice President; the loans were fully paid, without causing any
prejudice to the service. The GSIS President found him guilty of the said charges. This being petitioner’s
second administrative offense, the penalty of dismissal was imposed upon him with accessory penalties of
forfeiture of retirement benefits, cancellation of eligibility and perpetual disqualification from reemployment in
the government.

Issue:

Whether the petitioner was denied due process

Held:

No. What negates any due process infirmity is the petitioner’s subsequent motion for reconsideration which
cured whatever defect the Hearing Officer might have committed in the course of hearing the petitioner’s case.
Again, the GSIS President duly considered the arguments presented in the petitioner’s motion for
reconsideration when he denied the same. Thus, the petitioner was actually heard through his pleadings.
 OFFICE OF THE OMBUDSMAN VS. REYES
[GR NO. 170512, OCTOBER 5, 2011]

Doctrine:

Due process, as a constitutional precept, does not always and in all situations require a trial-type proceeding. 
Due process is satisfied when a person is notified of the charge against him and given an opportunity to
explain or defend himself.  In administrative proceedings, the filing of charges and giving reasonable
opportunity for the person so charged to answer the accusations against him constitute the minimum
requirements of due process. 

Facts:

Respondent Antonio Reyes being then the Head Office LTO was found guilty of grave abuse of misconduct by
the Office of the Ombudsman. Based on the affidavits and testimonies of several witnesses (Penaloza, Amper
and Valdehueza) it was said that Reyes would give the flunkers of the driver’s license examination the option
of retaking the examination or to simply pay an additional cost to have a passing grade without actually re-
taking the same. It is alleged that he illegally exacted money from Acero in exchange for the issuance of a
driver's license to the latter, notwithstanding that Acero did not pass the requisite written examination therefor.

On appeal, the CA reversed the said judgment and exonerated him from the administrative charge for
insufficiency of evidence.

Issue:

Whether Reyes was denied due process

Held:

Yes. The 5th requirement (the decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected) on the cardinal principles on due process in
administrative proceedings as laid down in the case of Ang Tibay v CIR was not complied with. Reyes was not
properly apprised of the evidence offered against him, which were eventually made the bases of petitioner's
decision that found him guilty of grave misconduct. There is nothing on record to show that Reyes was
furnished with, or had otherwise received, a copy of the affidavits of Peñaloza, Amper and Valdehueza,
whether before or after the petitioner issued its Decision.
 PUBLIC OFFICERS

JAPSON VS. CIVIL SERVICE COMMISSION

[GR NO. 189479, APRIL 12, 2011]
 
Doctrine:
Dishonesty is defined as the concealment or distortion of truth in a matter of fact relevant to one’s office or
connected with the performance of his duty. Misconduct is a transgression of some established or definite rule
of action, is a forbidden act, is a dereliction of duty, is willful in character, and implies wrongful intent and not
mere error in judgment.

Facts:
Records show that Japson became the subject of a series of inquiries conducted by the SSS linking him to a
profiting venture involving the processing of claims for SSS death and funeral benefits while he was assigned
at SSS Baguio City from 1997 to May 1998. The inquiry was spurred by an affidavit dated October 6, 1999 of
Mina Balanag, who happened to assist her illiterate mother, Cat-an Paanos, in claiming, as beneficiary, the
SSS death benefits of her deceased father, Kitos Paanos. She alleged that because she knew nothing of the
steps for processing of claims for death benefits, a village mate referred her to spouses Boyet and Shirley
Abuan who have been frequenting their village. The spouses Abuans assured that her mother will receive the
benefits in due time since Shirley has a relative working at the SSS Baguio City who also happened to be their
neighbor at Baguio City. Later, she learned that this neighbor-relative turned out to be Shirley’s cousin Japson.

Issue:
Whether Petitioner is guilty of Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of
the Service whether or not he gained from such acts.

Held:
Yes. Dishonesty is defined as the concealment or distortion of truth in a matter of fact relevant to one’s office or
connected with the performance of his duty. On the other hand, misconduct is a transgression of some
established or definite rule of action, is a forbidden act, is a dereliction of duty, is willful in character, and
implies wrongful intent and not mere error in judgment. More particularly, it is an unlawful behavior by the
public officer. The term, however, does not necessarily imply corruption or criminal intent. In this case,
petitioner’s acts were found by the Supreme Court as clearly reflecting his dishonesty and grave misconduct.
He allowed the Spouses Abuan to use his position as SSS Senior Member Services Representative to make
their “clients” believe that he could give them undue advantage – over others without the same connection – by
processing their SSS claims faster. Likewise, his acts, according to the SC, imply malevolent intent, and not
merely error in judgment. He was aware of what the Spouses Abuan were doing and was complicit in the
same. At the very least, according to the Supreme Court, he failed to stop the illegal trade, and that constitutes
willful disregard of the laws and rules.
 GSIS AND WINSTON F. GARCIA VS. ARWIN T. MAYORDOMO
[G.R. NO. 191218, MAY 31, 2011]

Doctrine:
In order to be considered as “misconduct,” the act must have a “direct relation to and be connected with
the performance of his official duties amounting either to maladministration or willful, intentional neglect or
failure to discharge the duties of the office.

Facts:
Respondent Arwin T. Mayordomo was employed as Accounts Management Specialist of the GSIS
Fund Management Accounting Department (FMAD). Ignacio L. Liscano, then GSIS Information Technology
Officer (ITO) III called the attention of Joseph Sta. Romana another ITO, about a network conflict in his
personal computer.  Sta. Romana conducted a network scan to identify the source of the problem and he
discovered that another personal computer was also using the internet protocol (IP) address of Liscano’s
computer. This other computer was eventually identified as the one assigned to Mayordom. Sta. Romana
immediately restored the correct IP address assigned to Mayordomo’s personal computer.  Until this
restoration, Liscano was deprived of access to the GSIS computer network and prevented from performing his
work as ITO.  Mayordomo was verbally reminded that he had no authority to change his IP address and
warned that doing so would result in network problems. Subsequently, Sta. Romana again encountered the
username same username.
The President and General Manager Garcia issued a formal administrative charge against Mayordomo,
for Grave Misconduct and/or Conduct Prejudicial to the Best Interest of the Service.   The GSIS rendered its
Decision finding Mayordomo guilty of Grave Misconduct and imposing upon him the penalty of dismissal, with
forfeiture of benefits, loss of eligibility and disqualification from government service.  However the Court of
Appeals downgraded the offense to Simple Misconduct.

Issue:
Whether the Honorable Court of Appeals Committed error in downgrading the offense to simple misconduct.

Held:
Yes. The Court has come to a determination that the administrative offense committed by the respondent is not
“misconduct.” To constitute misconduct, the act or acts must have a direct relation to and be connected with
the performance of official duties. The duties of Mayordomo as a member of the GSIS FMAD surely do not
involve the modification of IP addresses.  The act was considered unauthorized, precisely because dealing
with the GSIS network’s IP addresses is strictly reserved for ITSG personnel who are expectedly
knowledgeable in this field. In Manuel v. Calimag, Jr., the Court emphatically ruled: In order to be considered
as “misconduct,” the act must have a “direct relation to and be connected with the performance of his official
duties amounting either to maladministration or willful, intentional neglect or failure to discharge the duties of
the office. Misconduct in office has been authoritatively defined by Justice Tuazon in Lacson v. Lopez in these
words: "Misconduct in office has a definite and well-understood legal meaning. By uniform legal definition, it is
a misconduct such as affects his performance of his duties as an officer and not such only as affects his
character as a private individual. In such cases, it has been said at all times, it is necessary to separate the
character of the man from the character of the officer x x x x It is settled that misconduct, misfeasance, or
malfeasance warranting removal from office of an officer must have direct relation to and be connected with
the performance of official duties amounting either to maladministration or willful, intentional neglect and failure
to discharge the duties of the office x x x More specifically, in Buenaventura v. Benedicto, an administrative
proceeding against a judge of the court of first instance, the present Chief Justice defines misconduct as
referring ‘to a transgression of some established and definite rule of action, more particularly, unlawful behavior
or gross negligence by the public officer.’”
GANADEN V. CA.
[G.R. NO. 170510-11; JUNE 1, 2011]

Doctrine:
An appeal shall not stop the decision from being executory. In case the penalty is suspension or removal and
the respondent wins such appeal, he shall be considered as having been under preventive suspension and
shall be paid the salary and such other emoluments that he did not receive by reason of the suspension or
removal.

Facts:
In OMB-L-A-02-0068-B and OMB-L-A-02-0070-B, the Ombudsman found petitioners Ganaden, Bautista and
Narciso liable for dishonesty and imposed upon them the penalty of one-year suspension while in OMB-L-A-
02-0069-B, the Ombudsman found petitioners Ganaden and Mina liable for dishonesty and imposed on them
the penalty of one-year suspension. 

Petitioners filed motions for reconsideration, but the Office of the Ombudsman denied their motions for
reconsideration and increased the penalty to dismissal from the service as to petitioner Ganaden in OMB-L-A-
02-0069-B and as to petitioners Ganaden, Bautista and Narciso in OMB-L-A-02-0070-B.  The penalty of one-
year suspension as to petitioner Mina was, however, maintained. Aggrieved, petitioners filed separate petitions
for review before the CA.
Meanwhile, petitioners availed of the early retirement program from the NPC. At the time the three Decisions
and three orders of the Ombudsman came to their attention, they were already employed at the National
Transmission Commission (TRANSCO).  Hence, the Office of the Ombudsman issued a 1st Indorsement
requesting from TRANSCO the issuance of Orders for Dismissal from the service of petitioners Ganaden, 
Bautista and Narciso and the issuance of an Order of Suspension from Service for one-year against petitioner
Mina. In compliance respondent Ortiz issued the aforementioned orders.

Issue:
Whether administrative decisions of the Office of the Ombudsman imposing the penalties of dismissal and one-
year suspension from office are immediately executory pending appeal.

Held:
Yes. This is the rule provided for under Section 7, Rule III of the Rules of Procedure of the Office of the
Ombudsman, as amended by Administrative Order No. 17, dated September 15, 2003, which provides among
others: “An appeal shall not stop the decision from being executory. In case the penalty is suspension or
removal and the respondent wins such appeal, he shall be considered as having been under preventive
suspension and shall be paid the salary and such other emoluments that he did not receive by reason of the
suspension or removal. A decision of the Office of the Ombudsman in administrative cases shall be executed
as a matter of course…” Under this provision, a respondent who is found administratively liable by the Office of
the Ombudsman and is slapped with a penalty of suspension of more than one month from service has the
right to file an appeal with the CA under Rule 43 of the 1997 Rules of Civil Procedure, as amended. But
although a respondent is given the right to appeal, the act of filing an appeal does not stay the execution of the
decision of the Office of the Ombudsman.
 OFFICE OF THE OMBUDSMAN V. ANDUTAN
[G.R. NO. 164679; JULY 27, 2011]

Doctrine:
Administrative offenses do not prescribe.
The Ombudsman can no longer institute an administrative if the latter was not a public servant at the time the
case was filed.

Facts:
Pursuant to the Memorandum directing all non-career officials or those occupying political positions to vacate
their positions, Andutan resigned from the DOF as the former Deputy Director of the One-Stop Shop Tax
Credit and Duty Drawback Center of the DOF. Subsequently, Andutan, et al. was criminally charged by the
Fact Finding and Intelligence Bureau (FFIB) of the Ombudsman with Estafa through Falsification of Public
Documents, and violations RA 3019. As government employees, Andutan et al. were likewise administratively
charged of Grave Misconduct, Dishonesty, Falsification of Official Documents and Conduct Prejudicial to the
Best Interest of the Service. The criminal and administrative charges arose from anomalies in the illegal
transfer of Tax Credit Certificates (TCCs) to Steel Asia, among others.
 
The Ombudsman found the respondents guilty of Gross Neglect of Duty. Having been separated from the
service, Andutan was imposed the penalty of forfeiture of all leaves, retirement and other benefits and
privileges, and perpetual disqualification from reinstatement and/or reemployment in any branch or
instrumentality of the government, including government owned and controlled agencies or corporations.

The CA annulled and set aside the decision of the Ombudsman, ruling that the latter “should not have
considered the administrative complaints” because: first, Section 20 of R.A. 6770 provides that the
Ombudsman “may not conduct the necessary investigation of any administrative act or omission complained of
if it believes that x x x [t]he complaint was filed after one year from the occurrence of the act or omission
complained of”; and second, the administrative case was filed after Andutan’s forced resignation

Issue:
(1) Whether Section 20(5) of R.A. 6770 prohibit the Ombudsman from conducting an administrative
investigation a year after the act was committed.
(2) Whether the Ombudsman has authority to institute an administrative complaint against a government
employee who had already resigned.

Held:
(1) No. Well-entrenched is the rule that administrative offenses do not prescribe. Administrative offenses by
their very nature pertain to the character of public officers and employees. In disciplining public officers and
employees, the object sought is not the punishment of the officer or employee but the improvement of the
public service and the preservation of the public’s faith and confidence in our government. Clearly, Section 20
of R.A. 6770 does not prohibit the Ombudsman from conducting an administrative investigation after the lapse
of one year, reckoned from the time the alleged act was committed.  Without doubt, even if the administrative
case was filed beyond the one (1) year period stated in Section 20(5), the Ombudsman was well within its
discretion to conduct the administrative investigation.  

(2) No. The Ombudsman can no longer institute an administrative case against Andutan because the latter
was not a public servant at the time the case was filed. It is irrelevant, according to the Ombudsman, that
Andutan had already resigned prior to the filing of the administrative case since the operative fact that
determines its jurisdiction is the commission of an offense while in the public service. The SC observed that
indeed it has held in the past that a public official’s resignation does not render moot an administrative case
that was filed prior to the official’s resignation. However, the facts of those cases are not entirely applicable to
the present case. In the past cases, the Court found that the public officials – subject of the administrative
cases – resigned, either to prevent the continuation of a case already filed or to pre-empt the imminent filing of
one. Here, neither situation obtains. First, Andutan’s resignation was neither his choice nor of his own doing;
he was forced to resign. Second, Andutan resigned from his DOF post on July 1, 1998, while the administrative
case was filed on September 1, 1999, exactly one year and two months after his resignation. What is clear
from the records is that Andutan was forced to resign more than a year before the Ombudsman filed the
administrative case against him. If the SC agreed with the interpretation of the Ombudsman, any official – even
if he has been separated from the service for a long time – may still be subject to the disciplinary authority of
his superiors, ad infinitum. Likewise, if the act committed by the public official is indeed inimical to the interests
of the State, other legal mechanisms are available to redress the same.
 MARTINEZ VS. VILLANUEVA
[G.R. NO. 169196. JULY 6, 2011]

Doctrine:
Section 7(d) of R.A. No. 6713 which prohibits public officials and employees to solicit or accept, directly or
indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the
course of their official duties or in connection with any operation being regulated by, or any transaction which
may be affected by the functions of their office is malum prohibitum.

Facts:
Petitioner Martinez is the General Manager of Claveria Agri-Based Multi-Purpose Cooperative, Inc.
(CABMPCI) while respondent Villanueva is the Assistant Regional Director of the Cooperative Development
Authority (CDA), Regional Office No. 02, Tuguegarao City, Cagayan. Respondent solicited several loans from
CABMPCI. The Ombudsman later found that Respondent abused her position when she solicited a loan from
CABMPCI despite the fact that she is disqualified by its by-laws. The relevant provision under which
respondent was charged is Section 7(d) of R.A. No. 6713 which reads:
          SEC. 7. Prohibited Acts and Transactions.- In addition to acts and omissions of public officials and
employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited acts
and transactions of any public official and employee and are hereby declared to be unlawful:
(d) Solicitation or acceptance of gifts. - Public officials and employees shall not solicit or accept,
directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from
any person in the course of their official duties or in connection with any operation being
regulated by, or any transaction which may be affected by the functions of their office.
xxxx
On appeal, Respondent argued that the Office of the Deputy Ombudsman for Luzon erred in treating the loan
she obtained from CABMPCI as a prohibited loan under Section 7(d) of R.A. No. 6713 because she was an
official of the CDA.  Respondent argued that although Section 7(d) of R.A. No. 6713 prohibits all public officials
and employees from soliciting or accepting loans in connection with any operation being regulated by her
office, the subsequent enactment of R.A. No. 6938 or the Cooperative Code of the Philippines allows qualified
officials and employees to become members of cooperatives and naturally, to avail of the attendant privileges
and benefits of membership. She contended that it would be absurd if CDA officials and employees who are
eligible to apply for membership in a cooperative would be prohibited from availing loans. On appeal, the CA
that respondent should not have been held liable for grave misconduct because of the supposed failure of
Martinez to show undue influence

Issues:
1. Whether the Cooperative Code impliedly repealed Section 7(d) of R.A. No. 6713.
2. Whether the prohibition under Section 7(d) of R.A. No. 6713 requires undue influence.

Held:
1. NO. True, the Cooperative Code allows CDA officials and employees to become members of
cooperatives and enjoy the privileges and benefits attendant to membership.  However, it should not be
taken as creating in favor of CDA officials and employees an exemption from the coverage of Section
7(d), R.A. No. 6713 considering that the benefits and privileges attendant to membership in a
cooperative are not confined solely to availing of loans and not all cooperatives are established for the
sole purpose of providing credit facilities to their members. Thus, the limitation on the benefits which
respondent may enjoy in connection with her alleged membership in CABMPCI does not lead to absurd
results and does not render naught membership in the cooperative or render R.A. No. 6938 ineffectual,
 contrary to respondent’s assertions.  We find that such limitation is but a necessary consequence of the
privilege of holding a public office and is akin to the other limitations that, although interfering with a
public servant’s private rights, are nonetheless deemed valid in light of the public trust nature of public
employment.  
2. NO. Said prohibition in Section 7(d) is malum prohibitum.  It is the commission of that act as defined by
the law, and not the character or effect thereof, that determines whether or not the provision has been
violated.  Therefore, it is immaterial whether respondent has fully paid her loans since the law prohibits
the mere act of soliciting a loan under the circumstances provided in Section 7(d) of R.A. No. 6713.
Whether respondent used her position or authority as a CDA official is of no consequence in the
determination of her administrative liability.
 CSC VS. CRUZ
[G.R. NO. 187858; AUGUST 9, 2011]

Doctrine:
If the administrative offense found to have been actually committed is of lesser gravity than the offense
charged, the employee cannot be considered exonerated if the factual premise for the imposition of the lesser
penalty remains the same.

Facts:
The respondent, Storekeeper A of the City of Malolos Water District (CMWD), was charged with grave
misconduct and dishonesty by CMWD General Manager (GM) Nicasio Reyes.  He allegedly uttered a false,
malicious and damaging statement against GM Reyes and the rest of the CMWD Board of Directors which
stemmed from the respondent’s act of claiming overtime pay despite his failure to log in and out in the
computerized daily time record for three working days. GM Reyes preventively suspended the respondent for
15 days. Before the expiration of his preventive suspension, however, GM Reyes, with the approval of the
CMWD Board, found the respondent guilty of grave misconduct and dishonesty, and dismissed him from the
service. The CSC however reversed the ruling and stated that respondent should not be held liable for grave
misconduct.

Issue:
Whether the respondent is entitled to back salaries after the CSC ordered his reinstatement to his former
position.

Held:
The mere reduction of the penalty on appeal does not entitle a government employee to back salaries if he
was not exonerated of the charge against him.  If the exoneration of the employee is relative (as distinguished
from complete exoneration), an inquiry into the factual premise of the offense charged and of the offense
committed must be made.  If the administrative offense found to have been actually committed is of lesser
gravity than the offense charged, the employee cannot be considered exonerated if the factual premise for the
imposition of the lesser penalty remains the same. 
 COASTAL SAFEWAY MARINE SERVICES VS. ESGUERRA
[G.R. NO. 185352; AUGUST 10, 2011]

Doctrine:
Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other equally reasonable minds might conceivably opine otherwise.

Facts:
 After 46 days of shipboard employment, Esguerra requested medical attention for back and chest pains.
Esguerra was declared “not fit for work until complete cardiac evaluation is done” and “advised to rest until
then”. Despite the normal results of the serology, hematology, biochemistry and x-ray tests administered upon
him, however, Esguerra insisted on going home on the ground that he had been rendered unfit for work.
Esguerra further underwent diagnostic tests and was prescribed various medications at the PGH for “chronic
stable angina.” Esguerra filed against CSMSI, its president, and CMEGT, the complaint for medical
reimbursement, sickness allowance, permanent disability benefits, damages and attorney’s fees before the
arbital level of the NLRC. Esguerra alleged that he was repatriated for medical reasons on account of his work-
related/aggravated ailment; that despite being apprised of his intention to submit himself for medical
examination, CSMSI failed to refer him to a company-designated physician, and insisted that he was fit for
work; and, that left with no choice but to seek medical attention on his own at the PGH, PHC and POH, he was
constrained to file his complaint for disability benefits, sickness allowance, damages and attorney’s fees.

Finding in favor CSMSI, Morcilla and CMEGT, Labor Arbiter dismissed the complaint on the ground that
Esguerra failed to prove his disability and to submit himself to a post-employment medical examination by a
company-designated physician, pursuant to Section 20-B of the POEA SEC. The Court of Appeals reversed
the decision.
 
Issue:
Whether the ruling of the Court of the Court of Appeals is contrary to the evidence on record and runs afoul
with prevailing jurisprudence.

Held:
Yes. Self-serving and unsubstantiated declarations are insufficient to establish a case before quasi-judicial
bodies where the quantum of evidence required establishing a fact is substantial evidence.  Often described as
more than a mere scintilla, substantial evidence is such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine
otherwise.  In this case, there is no dispute regarding the fact that Esguerra had altogether failed to comply
with the mandatory reporting requirement under the POEA-SEC.  Beyond his bare assertion that CSMSI
(employer) “never gave him referrals to continue his medications as recommended by the foreign doctor”
despite his call on 8 July 2003 “to inform them that he will report the next day in order to submit his medical
evaluation abroad,” Esguerra did not present any evidence to prove justification for his inability to submit
himself to a post-employment medical examination by a company-designated physician.  Thus, he was not
awarded disability benefits and sickness allowance. 
 OFFICE OF THE PRESIDENT AND PRESIDENTIAL ANTI-GRAFT COMMISSION VS. CATAQUIZ
[GR NO. 183445, SEPTEMBER 14, 2011]

Doctrine:

Accordingly, the dismissal of the criminal case by the Ombudsman does not foreclose administrative action
against Cataquiz. His absolution from criminal liability is not conclusive upon the OP, which subsequently
found him to be administratively liable. The pronouncement made by the Ombudsman cannot serve to protect
the respondent from further administrative prosecution. A contrary ruling would be unsettling as it would
undermine the very purpose of administrative proceedings, that is, to protect the public service and uphold the
time-honored principle that a public office is a public trust.

Facts:

Respondent Cataquiz, then General Manager of the Laguna Lake Development Authority, was being ousted in
a petition by a majority of the members of the Management Committee and the rank and file employees of the
LLDA, on the grounds of corrupt and unprofessional behavior and management incompetence. In an
investigation into the allegations against Cataquiz ordered by Secretary Gozun of the DENR, it was determined
that respondent may be found guilty for acts prejudicial to the best interest of the government and for violations
of several pertinent laws and regulations. It was recommended that the case be forwarded to the Presidential
Anti-Graft Commission. Later, a duly organized employees union of the LLDA, CELLDA, filed a complaint
before the PAGC charging Cataquiz with violations of RA 3019 (The Anti-Graft and Corrupt Practices Act), The
Administrative Code and The Code of Conduct and Ethical Standards for Public Officials and Employees. The
Office of the President adopted the findings and recommendations of PAGC, and dismissed the respondent
from service. The decision was amended by the OP imposing the penalties of disqualification from re-
employment and forfeiture of retirement benefits because the penalty of dismissal was no longer available to
him because of his replacement as General Manager of LLDA. The Court of Appeals reversed the decision.
Meanwhile, the Office of the Ombudsman recommended the dismissal of the charges against respondent for
violation of RA No. 3019.

Issue:

Whether the dismissal of the charges against respondent by the Ombudsman serves as a bar to the finding of
administrative liability.

Held:

No. It is a basic rule in administrative law that public officials are under a three-fold responsibility for a violation
of their duty or for a wrongful act or omission, such that they may be held civilly, criminally and administratively
liable for the same act. Obviously, administrative liability is separate and distinct from penal and civil liability. In
the case of People v. Sandiganbayan, the Court elaborated on the difference between administrative and
criminal liability: “The distinct and independent nature of one proceeding from the other can be attributed to the
following: first, the difference in the quantum of evidence required and, correlatively, the procedure observed
and sanctions imposed; and second, the principle that a single act may offend against two or more distinct and
related provisions of law, or that the same act may give rise to criminal as well as administrative liability.
 DUMDUMA VS. CSC
[GR NO. 182606, OCTOBER 4, 2011]

Doctrine:

Only those who can live up to the constitutional exhortation that public office is a public trust deserve the honor
of continuing in public service.

Facts:

Petitioner, a PNP Officer in Leyte, took the Career Service Professional Examination in 1998. In 1999, he filled
out a Personal Data Sheet pursuant to his promotional appointment as Police Inspector and stated that he
passed the Career Service Professional Examination Computer-Assisted Test in Quezon City with a rating of
81%. His appointment was forwarded to the PNP-CSC for verification and approval where it was then
discovered that he did not have the proper civil service eligibility, contrary to what he disclosed in his PDS. His
appointment was disapproved on the ground of spurious eligibility and was charged with Dishonesty. Petitioner
denied the charged and alleged that a certain Dilodilo, who was allegedly a retired CSC director promised him
total support in his examination and that he was in good faith when he wrote the information of his eligibility in
his PDS. The CSC found him guilty of Dishonesty and imposed on him the penalty of dismissal from service,
forfeiture of retirement benefits and perpetual disqualification from reemployment in government service. He
reiterated his defense of good faith in his appeal to the CA, but the appellate court was unconvinced. Hence,
this petition.

Issue:

Whether the petitioner may be dismissed from service for falsification of his eligibility for appointment
purposes.

Held:

Yes. The Court agrees with the CSC and the CA that the undisputed facts, as revealed by the evidence, make
out a clear case of dishonesty against Dumduma. When Dumduma’s claim of eligibility was contradicted by the
CSC Register of Eligibles and the List of Passing/Failing Examinees, it became incumbent uponDumduma to
explain why he made the incorrect entry in his PDS. Unlike his PDS entry, the CSC records are presumed
correct and made in the regular course of official business. In explaining his action, however, Dumduma dug a
deeper hole from which he could not extricate himself. Dumduma’s contention is in start contrast to his
admissions and does not merit belief. The concept of good faith in administrative cases such as this one is
explained in a recent case in this wise: “Good faith is ordinarily used to describe that state of mind denoting
honesty of intention and freedom from knowledge of circumstances which ought to put the holder upon inquire;
an honest intention to abstain from taking any unconscientious advantage of another, even through
technicalities of law, together with absence of all information, notice, or benefit or belief of facts which render a
transaction unconscientious. In short, good faith is actually a question of intention. Although this is something
internal, we can ascertain a person’s intention not from his own protestation of good faith, which is self-serving,
but from evidence of his conduct and outward acts.”
 QUARTO VS. OMBUDSMAN SIMEON MARCELO
[GR NO. 169042 OCTOBER 5, 2011]

Doctrine:

Mandamus is the proper remedy to compel the performance of a ministerial duty imposed by law upon the
respondent. In matters involving the exercise of judgment and discretion, mandamus may only be resorted to,
to compel the respondent to take action; it cannot be used to direct the manner or the particular way discretion
is to be exercised

Facts:

The DPWH Secretary created a committee to investigate alleged anomalous transactions involving the repairs
and/or purchase of spare parts of DPWH service vehicles with the DPWH Internal Audit Service to conduct the
actual investigation. The DPWH-IAS discovered that from March to December 2001, several emergency
repairs and/or purchase of spare parts of hundreds of DPWH service vehicles, which were approved and paid
by the government, did not actually take place, resulting in government losses of approximately P143 million
for this ten-month period alone. The committee then filed before the Office of the Ombudsman complaints
charging the petitioner, the respondents, who are officials and employees of the DPWH, and other private
individuals who purportedly benefitted from the anomalous transactions.

The Ombudsman filed with the Sandiganbayan several information charging the said DPWH officials and
employees with plunder, estafa through falsification of official/commercial documents and violation of Section
3(e), RA No. 3019. On the other hand, the Ombudsman granted the respondents' request for immunity in
exchange for their testimonies and cooperation in the prosecution of the cases filed.

Issue:

Whether the Ombudsman has the authority to grant immunity from prosecution to witnesses

Held:

Yes. RA No. 6770 specifically empowers the Ombudsman to grant immunity "in any hearing, inquiry or
proceeding being conducted by the Ombudsman or under its authority, in the performance or in the
furtherance of its constitutional functions and statutory objectives." In the exercise of his investigatory and
prosecutorial powers, he enjoys the same latitude of discretion in determining what constitutes sufficient
evidence to support a finding of probable cause and the degree of participation of those involved or the lack
thereof. His findings and conclusions on these matters are not ordinarily subject to review by the courts except
when he gravely abuses his discretion, which the petitioner has failed to establish in this case.
 IN THE MATTER OF THE PETITION FOR THE WRIT OF AMPARO AND WRIT OF HABEAS DATA IN
FAVOR OF NORIEL H. RODRIGUEZ
[GR NO. 191805, NOVEMBER 15, 2011]

Doctrine:

The presidential immunity from suit exists only in concurrence with the president’s incumbency but not beyond.

Facts:

Petitioner Noriel Rodriguez is a member of Alyansa Dagiti Mannalon Iti Cagayan (Kagimungan), a peasant
organization affiliated with Kilusang Magbubukid ng Pilipinas (KMP). He claims that the military tagged KMP as
an enemy of the State under the Oplan Bantay Laya, making its members targets of extrajudicial killings and
enforced disappearances.

Rodriguez was abducted by military men and was tortured repeatedly when he refused to confess to his
membership in the NPA. When released, he filed a Petition for the Writ of Amparo and and Petition for the Writ
of Habeas Datawith Prayers for Protection Orders, Inspection of Place, and Production of Documents and
Personal Properties. The petition was filed against former Pres. Arroyo, et al. The writs were granted but the
CA dropped Pres Arroyo as party-respondent, as she may not be sued in any case during her tenure of office
or actual incumbency.

Issue:

Whether former Pres GMA should be dropped as respondent on the basis of presidential immunity from suit

Held:

No. As was held in the case of Estrada v Desierto, a non-sitting President does not enjoy immunity from suit,
even for acts committed during the latter’s tenure; that courts should look with disfavor upon the presidential
privilege of immunity, especially when it impedes the search for truth or impairs the vindication of a right. The
deliberations of the Constitutional Commission also reveal that the intent of the framers is clear that
presidential immunity from suit is concurrent only with his tenure and not his term. Therefore, former Pres.
GMA cannot use such immunity to shield herself from judicial scrutiny that would assess whether, within the
context of amparo proceedings, she was responsible or accountable for the abduction of Rodriguez
 NATIONAL POWER CORPORATION VS. CSC AND RODRIGO A. TANFELIX
[GR NO. 152093, JANUARY 24, 2012]

Doctrine:

Grave misconduct consists in a government official’s deliberate violation of a rule of law or standard of
behavior.  It is regarded as grave when the elements of corruption, clear intent to violate the law, or flagrant
disregard of established rules are present. In particular, corruption as an element of grave misconduct consists
in the official’s unlawful and wrongful use of his station or character [reputation] to procure some benefit for
himself or for another person, contrary to duty and the rights of others. Rigging by a public official at a bidding
in the organization where he belongs is a species of corruption.

Facts:

Petitioner’s Board of Inquiry and Discipline found Tanfelix, a Supervising Mechanical Engineer, guilty of grave
misconduct for rigging the bidding for the construction of the wind break fence of its (NPC) thermal power
plant’s coal storage in Batangas to favor ALC Industries, Inc. He was then ordered by the NPC-BID to be
dismissed from service.

On appeal, the CSC, which initially affirmed the Board’s decision, reversed itself and exonerated Tanfelix on
the ground that the misconduct which warrants removal must have direct relation to and be connected with the
performance of official duties.  As it happened, Tanfelix was neither a member of the NPC bids committee nor
was there any proof that he influenced the members of that committee.

The NPC appealed to the CA but the court affirmed CSC’s ruling.

Issue:

Whether Tanfelix was guilty of grave misconduct

Held:

Yes. Tanfelix wrongfully and unlawfully used his station or reputation to rig the bids for an NPC construction
project.  Although he was not a member of NPC’s bids committee, he was NPC’s supervising mechanical
engineer, a public officer endowed with the duty to protect the public bidding of his organization. Instead, he
misused his position to gain access to information on construction projects that were up for bidding and to the
NPC staffs involved in them.  And he misused his reputation and credibility as a ranking NPC officer to bring
the pre-qualified bidders together to hammer out with them a scheme for cheating NPC of a large sum of
money, the result of rigged bids.
 ONG VS. OFFICE OF THE PRESIDENT
[GR NO. 184219, JANUARY 30, 2012]

Doctrine:

Temporary appointments are made if only to prevent hiatus in the government's rendition of public service.
However, a temporary appointee can be removed even without cause and at a moment's notice. As to those
with eligibilities, their rights to security of tenure pertain to ranks but not to the positions to which they were
appointed.  

Facts:

Petitioner Samuel Ong, as a career employee in the NBI , was appointed as Director III co-terminus with the
appointing authority and would end effectively at midnight on June 30, 2004, unless a new appointment would
be issued in his favor by the President consistent with her new tenure effective July 1, 2004; and until then, he
shall only hold his position in a de facto/ hold over status. On Dec. 1, 2004, the President appointed
respondent Victor Bessat as Director III replacing the petitioner. Ong filed a quo warranto before the CA but
was denied.

Issue:

Whether petitioner has been removed from his position as NBI Director III

Held:

No. Ong lacked the CES eligibility required for the position of Director III and his appointment was “co-terminus
with the appointing authority.” His appointment being both temporary and co-terminous in nature, it can be
revoked by the President even without cause and at a short notice.

 
 REPUBLIC OF THE PHILIPPINES VS. PACHECO
[GR NO. 178021 JANUARY 25, 2012]

Doctrine:

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 a scheme to lure him
away from his permanent position, or when it is designed to indirectly terminate his service, or force his
resignation.

Facts:

Respondent Minerva Pacheco, through a Revenue Travel Assignment Order (RTAO) issued by the BIR, was
reassigned as Assistant Chief of Legal Division from Quezon City to San Fernando, Pampanga. The BIR cited
exigencies of the revenue service as basis for such issuance. Pacheco claims that she was constructively
dismissed as her reassignment will result in the reduction of her salary and let her suffer physical burden from
waking up early and coming home late at night. The CSC dismissed her complaint on the ground that she was
not constructively dismissed as she maintained her position as Revenue Atty. IV and was designated as
Assistant Chief. The CA reversed the CSC’s decision and ordered her immediate reinstatement with full
backwages and benefits.

Issue:

Whether respondent was constructively dismissed, and, therefore, entitled to backwages

Held:

Yes. The contention of the CSC, through the OSG, that the deliberate refusal of Pacheco to report to work
either in her original station in QC or her new place of assignment in Pampanga negates her claim of
constructive dismissal is untenable. It was legally impossible for Pacheo to report to her original place of
assignment in Quezon City because the said RTAO also reassigned another personnel as Assistant Chief from
Pampanga to QC, the very same position that Pacheco held. It is also erroneous on the part of the CSC to
argue that the subject RTAO was immediately executory, unless otherwise ordered by the CSC, and, thus, it
was incumbent upon Pacheco to report to her new place of assignment. The Court held that it is an order to
detail that is immediately executory and not reassignment. However, Pacheco is not entitled to full backwages
and benefits. It is a settled jurisprudence\ that an illegally dismissed civil service employee is entitled to back
salaries but limited only to a maximum period of five (5) years, and not full back salaries from his illegal
dismissal up to his reinstatement.
 UNITED CLAIMANTS ASSOCIATION OF NEA (UNICAN) VS. NATIONAL ELECTRIFICATION
ADMINISTRATION (NEA)
[GR NO. 187107 JANUARY 31, 2012]

Doctrine:

Reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of
economy or redundancy of functions. It could result in the loss of one's position through removal or abolition of
an office. However, for a reorganization for the purpose of economy or to make the bureaucracy more efficient
to be valid, it must pass the test of good faith; otherwise, it is void ab initio.

Facts:

NEA is a GOCC created in accordance with PD 269 wherein it states that the NEA Board is empowered to
organize or re-organize NEA’s staffing structure. When The Electric Power Industry Reform Act of 2001
(EPIRA Law) was thereafter enacted to restructure the electric power industry, including the privatization of the
assets of the National Power Corp. (NPC), it imposed upon NEA additional mandates in relation to the
promotion of the role of rural electric cooperatives to achieve national electrification. Its Implementing Rules
and Regulations provides that all NEA employees shall be considered legally terminated with the
implementation of a reorganization program pursuant to a law enacted by Congress or pursuant to Sec. 5(a)(5)
of PD 269 through which the reorganization was carried out. The

Issue:

Whether the NEA Board has the power to terminate all the NEA employees

Held:

Yes. Pursuant to PD 269, the termination of all the employees of NEA was within the NEA Board's powers and
may not successfully be impugned absent proof of bad faith to which the petitioners have clearly failed to
establish. It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue
a policy towards its privatization. The privatization of NPC necessarily demanded the restructuring of its
operations. The privatization and restructuring of the NPC was, therefore, done in good faith as its primary
purpose was for economy and to make the bureaucracy more efficient.