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FIRST DIVISION

[G.R. No. 145368. April 12, 2002.]

SALVADOR H. LAUREL , petitioner, vs. HON. ANIANO A.


DESIERTO, in his capacity as Ombudsman, respondent.

Laurel Law Office for petitioner.


The Solicitor General for respondent.

SYNOPSIS

The Evaluation and Preliminary Investigation Bureau of the Office of


the Ombudsman directed petitioner, Chairman of the National Centennial
Commission (NCC), to submit his counter affidavit on the charges of
anomalies found by the Senate Blue Ribbon and Saguisag Committees. The
Blue Ribbon Committee recommended his prosecution for violation of the
rules on public bidding on the award of centennial contracts and manifest
bias in the issuance of the Notice to Proceed in the absence of a valid
contract, while the Saguisag Committee recommended the further
investigation of petitioner for violations of Section 3 (e) of RA. No. 3019,
Section 4 (a) in relation to Section 11 of R.A. 6713, and Article 217 of the
Revised Penal Code. Petitioner moved to dismiss on ground of lack of
jurisdiction claiming that he is not a public officer and that NCC is a private
organization. The motion was denied by the Ombudsman, hence, the instant
recourse.
The NCC was created under Administrative Order No. 223 and
Executive Order No. 128 to ensure a more coordinated and synchronized
celebrations of the Philippine Centennial and wider participation from the
government and non-government or private organizations. It aims to
implement the state policies on the promotion of the nation's historical and
cultural heritage and resources. It is thus a public office performing
executive functions. Thus, the Chairman of this Committee is a public officer
who may be investigated by the Office of the Ombudsman. DICSaH

SYLLABUS

1. POLITICAL LAW; ACCOUNTABILITY OF PUBLIC OFFICERS; OFFICE


OF THE OMBUDSMAN; POWER TO INVESTIGATE AND PROSECUTE; PLENARY
AND UNQUALIFIED. — In the Court's decision in Uy, we held that "it is the
prosecutor, not the Ombudsman, who has the authority to file the
corresponding information/s against petitioner in the regional trial court. The
Ombudsman exercise prosecutorial powers only in cases cognizable by the
Sandiganbayan." The foregoing ruling in Uy, however, was short-lived. Upon
motion for clarification by the Ombudsman in the same case, the Court set
aside the foregoing pronouncement in its Resolution dated March 20, 2001.
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The Court explained the rationale for this reversal. The power to investigate
and to prosecute granted by law to the Ombudsman is plenary and
unqualified. It pertains to any act or omission of any public officer or
employee when such act or omission appears to be illegal, unjust, improper
or inefficient. The law does not make a distinction between cases cognizable
by the Sandiganbayan and those cognizable by regular courts. It has been
held that the clause "any illegal act or omission of any public official" is
broad enough to embrace any crime committed by a public officer or
employee.
2. POLITICAL LAW; ADMINISTRATIVE LAW; PUBLIC OFFICE AND
PUBLIC OFFICER, DEFINED. — A definition of public officers cited in
jurisprudence is that provided by Mechem, a recognized authority on the
subject: A public office is the right, authority and duty, created and conferred
by law, by which, for a given period, either fixed by law or enduring at the
pleasure of the creating power, an individual is invested with some portion of
the sovereign functions of the government, to be exercised by him for the
benefit of the public. The individual so invested is a public officer.
3. CONSTITUTIONAL LAW; EXECUTIVE DEPARTMENT; NATIONAL
CENTENNIAL COMMISSION (NCC) CREATED UNDER ADMINISTRATIVE ORDER
NO. 223 AND EXECUTIVE ORDER NO. 128 PERFORMS EXECUTIVE
FUNCTIONS. — We hold that the NCC performs executive functions. The
executive power "is generally defined as the power to enforce and
administer the laws. It is the power of carrying the laws into practical
operation and enforcing their due observance." The executive function,
therefore, concerns the implementation of the policies as set forth by law.
Clearly, the NCC performs sovereign functions. It is, therefore, a public
office, and petitioner, as its Chair, is a public officer.
4. POLITICAL LAW; ADMINISTRATIVE LAW; PUBLIC OFFICE; SALARY,
NOT A NECESSARY CRITERION FOR DETERMINING NATURE OF POSITION. — A
salary is a usual but not a necessary criterion for determining the nature of
the position. It is not conclusive. The salary is a mere incident and forms no
part of the office. Where a salary or fees is annexed, the office is provided
for it is a naked or honorary office, and is supposed to be accepted merely
for the public good. Hence, the office of petitioner as NCC Chair may be
characterized as an honorary office, as opposed to a lucrative office or an
office of profit, i.e., one to which salary, compensation or fees are attached.
But it is a public office, nonetheless.
cTCaEA

DECISION

KAPUNAN, J : p

On June 13, 1991, President Corazon C. Aquino issued Administrative


Order No. 223 "constituting a Committee for the preparation of the National
Centennial Celebration in 1998." The Committee was mandated "to take
charge of the nationwide preparations for the National Celebration of the
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Philippine Centennial of the Declaration of Philippine Independence and the
Inauguration of the Malolos Congress." 1
Subsequently, President Fidel V. Ramos issued Executive Order No.
128, "reconstituting the Committee for the preparation of the National
Centennial Celebrations in 1988." It renamed the Committee as the
"National Centennial Commission." Appointed to chair the reconstituted
Commission was Vice-President Salvador H. Laurel. Presidents Diosdado M.
Macapagal and Corazon C. Aquino were named Honorary Chairpersons. 2
Characterized as an "ad-hoc body," the existence of the Commission
"shall terminate upon the completion of all activities related to the
Centennial Celebrations." 3 Like its predecessor Committee, the Commission
was tasked to "take charge of the nationwide preparations for the National
Celebration of the Philippine Centennial of the Declaration of Philippine
Independence and the Inauguration of the Malolos Congress."
Per Section 6 of the Executive Order, the Commission was also charged
with the responsibility to "prepare, for approval of the President, a
Comprehensive Plan for the Centennial Celebrations within six (6) months
from the effectivity of" the Executive Order.
E.O. No. 128 also contained provisions for staff support and funding:
SEC. 3. The Commission shall be provided with technical and
administrative staff support by a Secretariat to be composed of,
among others, detailed personnel from the Presidential Management
Staff, the National Commission for Culture and the Arts, and the
National Historical Institute. Said Secretariat shall be headed by a full
time Executive Director who shall be designated by the President.
SEC. 4. The Commission shall be funded with an initial budget
to be drawn from the Department of Tourism and the president's
Contingent Fund, in an amount to be recommended by the
Commission, and approved by the President. Appropriations for
succeeding years shall be incorporated in the budget of the Office of
the President.

Subsequently, a corporation named the Philippine Centennial Expo '98


Corporation (Expocorp) was created. 4 Petitioner was among the nine (9)
Expocorp incorporators, who were also its first nine (9) directors. Petitioner
was elected Expocorp Chief Executive Officer.
On August 5, 1998, Senator Ana Dominique Coseteng delivered a
privilege speech in the Senate denouncing alleged anomalies in the
construction and operation of the Centennial Exposition Project at the Clark
Special Economic Zone. Upon motion of Senator Franklin Drilon, Senator
Coseteng's privilege speech was referred to the Committee on Accountability
of Public Officers and Investigation (The Blue Ribbon Committee) and several
other Senate Committees for investigation.
On February 24, 1999, President Joseph Estrada issued Administrative
Order No. 35, creating an ad hoc and independent citizens' committee to
investigate all the facts and circumstances surrounding the Philippine
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centennial projects, including its component activities. Former Senator Rene
A.V. Saguisag was appointed to chair the Committee.
On March 23, 1999, the Senate Blue Ribbon Committee filed with the
Secretary of the Senate its Committee Final Report No. 30 dated February
26, 1999. Among the Committee's recommendations was "the prosecution
by the Ombudsman/DOJ of Dr. Salvador Laurel, chair of NCC and of
EXPOCORP for violating the rules on public bidding, relative to the award of
centennial contracts to AK (Asia Construction & Development Corp.); for
exhibiting manifest bias in the issuance of the NTP (Notice to Proceed) to AK
to construct the FR (Freedom Ring) even in the absence of a valid contract
that has caused material injury to government and for participating in the
scheme to preclude audit by COA of the funds infused by the government for
the implementation of the said contracts all in violation . . . of the anti-graft
law." 5
Later, on November 5, 1999, the Saguisag Committee issued its own
report. It recommended "the further investigation by the Ombudsman, and
indictment, in proper cases of," among others, NCC Chair Salvador H. Laurel
for violations of Section 3(e) of R.A. No. 3019, Section 4(a) in relation to
Section 11 of R.A. No. 6713, and Article 217 of the Revised Penal Code.
The Reports of the Senate Blue Ribbon and the Saguisag Committee
were apparently referred to the Fact-finding and Intelligence Bureau of the
Office of the Ombudsman. On January 27, 2000, the Bureau issued its
Evaluation Report, recommending:
1. that a formal complaint be filed and preliminary investigation be
conducted before the Evaluation and Preliminary Investigation
Bureau (EPIB), Office of the Ombudsman against former NCC and
EXPOCORP chair Salvador H. Laurel, former EXPOCORP President
Teodoro Q. Peña and AK President Edgardo H. Angeles for
violation of Sec. 3(e) and (g) of R.A. No. 3019, as amended in
relation to PD 1594 and COA Rules and Regulations;

2. That the Fact Finding and Intelligence Bureau of this Office, act
as the nominal complainant. 6

In an Order dated April 10, 2000, Pelagio S. Apostol, OIC-Director of the


Evaluation and Preliminary Investigation Bureau, directed petitioner to
submit his counter-affidavit and those of his witnesses.
On April 24, 2000, petitioner filed with the Office of the Ombudsman a
Motion to Dismiss questioning the jurisdiction of said office.
In an Order dated June 13, 2000, the Ombudsman denied petitioner's
motion to dismiss.
On July 3, 2000, petitioner moved for a reconsideration of the June 13,
2000 Order but the motion was denied in an Order dated October 5, 2000.
On October 25, 2000, petitioner filed the present petition for certiorari.
On November 14, 2000, the Evaluation and Preliminary Investigation
Bureau issued a resolution finding "probable cause to indict respondents
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SALVADOR H. LAUREL and TEODORO Q. PEÑA before the Sandiganbayan for
conspiring to violate Section 3(e) of Republic Act No. 3019, in relation to
Republic Act No. 1594." The resolution also directed that an information for
violation of the said law be filed against Laurel and Peña. Ombudsman
Aniano A. Desierto approved the resolution with respect to Laurel but
dismissed the charge against Peña.
In a Resolution dated September 24, 2001, the Court issued a
temporary restraining order, commanding respondents to desist from filing
any information before the Sandiganbayan or any court against petitioner for
alleged violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act.
On November 14, 2001, the Court, upon motion of petitioner, heard the
parties in oral argument.
Petitioner assails the jurisdiction of the Ombudsman on the ground that
he is not a public officer because:
A.
EXPOCORP, THE CORPORATION CHAIRED BY PETITIONER LAUREL
WHICH UNDERTOOK THE FREEDOM RING PROJECT IN CONNECTION
WITH WHICH VIOLATIONS OF THE ANTI-GRAFT AND CORRUPT
PRACTICES WERE ALLEGEDLY COMMITTED, WAS A PRIVATE
CORPORATION, NOT A GOVERNMENT-OWNED OR CONTROLLED
CORPORATION.

B.
THE NATIONAL CENTENNIAL COMMISSION (NCC) WAS NOT A PUBLIC
OFFICE.

C.
PETITIONER, BOTH AS CHAIRMAN OF THE NCC AND OF EXPOCORP WAS
NOT A "PUBLIC OFFICER" AS DEFINED UNDER THE ANTI-GRAFT &
CORRUPT PRACTICES ACT. 7

In addition, petitioner in his reply 8 invokes this Court's decision in Uy


vs. Sandiganbayan, 9 where it was held that the jurisdiction of the
Ombudsman was limited to cases cognizable by the Sandiganbayan, i.e.,
over public officers of Grade 27 and higher. As petitioner's position was
purportedly not classified as Grade 27 or higher, the Sandiganbayan and,
consequently, the Ombudsman, would have no jurisdiction over him.
This last contention is easily dismissed. In the Court's decision in Uy,
we held that "it is the prosecutor, not the Ombudsman, who has the
authority to file the corresponding information/s against petitioner in the
regional trial court. The Ombudsman exercises prosecutorial powers only in
cases cognizable by the Sandiganbayan."
In its Resolution of February 22, 2000, the Court expounded:
The clear import of such pronouncement is to recognize the
authority of the State and regular provincial and city prosecutors under
the Department of Justice to have control over prosecution of cases
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falling within the jurisdiction of the regular courts. The investigation
and prosecutorial powers of the Ombudsman relate to cases rightfully
falling within the jurisdiction of the Sandiganbayan under Section 15 (1)
of R.A. 6770 ("An Act Providing for the Functional and Structural
Organization of the Office of the Ombudsman, and for other purposes")
which vests upon the Ombudsman " primary jurisdiction over cases
cognizable by the Sandiganbayan . . ." And this is further buttressed by
Section 11 (4a) of R.A. 6770 which emphasizes that the Office of the
Special Prosecutor shall have the power to "conduct preliminary
investigation and prosecute criminal cases within the jurisdiction of the
Sandiganbayan." Thus, repeated references to the Sandiganbayan's
jurisdiction clearly serve to limit the Ombudsman's and Special
Prosecutor's authority to cases cognizable by the Sandiganbayan.
[Emphasis in the original.]

The foregoing ruling in Uy, however, was short-lived. Upon motion for
clarification by the Ombudsman in the same case, the Court set aside the
foregoing pronouncement in its Resolution dated March 20, 2001. The Court
explained the rationale for this reversal:
The power to investigate and to prosecute granted by law to the
Ombudsman is plenary and unqualified. It pertains to any act or
omission of any public officer or employee when such act or omission
appears to be illegal, unjust, improper or inefficient. The law does not
make a distinction between cases cognizable by the Sandiganbayan
and those cognizable by regular courts. It has been held that the
clause "any illegal act or omission of any public official" is broad
enough to embrace any crime committed by a public officer or
employee. SIDEaA

The reference made by RA 6770 to cases cognizable by the


Sandiganbayan, particularly in Section 15(1) giving the Ombudsman
primary jurisdiction over cases cognizable by the Sandiganbayan, and
Section 11(4) granting the Special Prosecutor the power to conduct
preliminary investigation and prosecute criminal cases within the
jurisdiction of the Sandiganbayan, should not be construed as confining
the scope of the investigatory and prosecutory power of the
Ombudsman to such cases.
Section 15 of RA 6770 gives the Ombudsman primary jurisdiction
over cases cognizable by the Sandiganbayan. The law defines such
primary jurisdiction as authorizing the Ombudsman "to take over, at
any stage, from any investigatory agency of the government, the
investigation of such cases." The grant of this authority does not
necessarily imply the exclusion from its jurisdiction of cases involving
public officers and employees by other courts. The exercise by the
Ombudsman of his primary jurisdiction over cases cognizable by the
Sandiganbayan is not incompatible with the discharge of his duty to
investigate and prosecute other offenses committed by public officers
and employees. Indeed, it must be stressed that the powers granted by
the legislature to the Ombudsman are very broad and encompass all
kinds of malfeasance, misfeasance and non-feasance committed by
public officers and employees during their tenure of office.

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Moreover, the jurisdiction of the Office of the Ombudsman should
not be equated with the limited authority of the Special Prosecutor
under Section 11 of RA 6770. The Office of the Special Prosecutor is
merely a component of the Office of the Ombudsman and may only act
under the supervision and control and upon authority of the
Ombudsman. Its power to conduct preliminary investigation and to
prosecute is limited to criminal cases within the jurisdiction of the
Sandiganbayan. Certainly, the lawmakers did not intend to confine the
investigatory and prosecutory power of the Ombudsman to these types
of cases. The Ombudsman is mandated by law to act on all complaints
against officers and employees of the government and to enforce their
administrative, civil and criminal liability in every case where the
evidence warrants. To carry out this duty, the law allows him to utilize
the personnel of his office and/or designate any fiscal, state prosecutor
or lawyer in the government service to act as special investigator or
prosecutor to assist in the investigation and prosecution of certain
cases. Those designated or deputized to assist him work under his
supervision and control. The law likewise allows him to direct the
Special Prosecutor to prosecute cases outside the Sandiganbayan's
jurisdiction in accordance with Section 11 (4c) of RA 6770.
The prosecution of offenses committed by public officers and
employees is one of the most important functions of the Ombudsman.
In passing RA 6770, the Congress deliberately endowed the
Ombudsman with such power to make him a more active and effective
agent of the people in ensuring accountability in public office. A review
of the development of our Ombudsman law reveals this intent.
[Emphasis in the original.]

Having disposed of this contention, we proceed to the principal


grounds upon which petitioner relies. We first address the argument that
petitioner, as Chair of the NCC, was not a public officer. SAaTHc

The Constitution 10 describes the Ombudsman and his Deputies as


"protectors of the people," who "shall act promptly on complaints filed in any
form or manner against public officials or employees of the government, or
any subdivision, agency or instrumentality thereof, including government-
owned or controlled corporations." Among the awesome powers, functions,
and duties vested by the Constitution 11 upon the Office of the Ombudsman
is to "[i]nvestigate . . . any act or omission of any public official, employee,
office or agency, when such act or omission appears to be illegal, unjust,
improper, or inefficient."
The foregoing constitutional provisions are substantially reproduced in
R.A. No. 6770, otherwise known as the "Ombudsman Act of 1989." Sections
13 and 15(1) of said law respectively provide:
SEC. 13. Mandate. — The Ombudsman and his Deputies, as
protectors of the people shall act promptly on complaints filed in any
form or manner against officers or employees of the Government, or of
any subdivision, agency or instrumentality thereof, including
government-owned or controlled corporations, and enforce their
administrative, civil and criminal liability in every case where the
evidence warrants in order to promote efficient service by the
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Government to the people.
SEC. 15. Powers, Functions and Duties . – The Office of the
Ombudsman shall have the following powers, functions and duties:
(1) Investigate and prosecute on its own or on complaint by
any person, any act or omission of any public officer or employee,
office or agency, when such act or omission appears to be illegal
unjust, improper or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of this primary
jurisdiction, it may take over, at any stage, from any investigatory
agency of Government, the investigation of such cases;
xxx xxx xxx.

The coverage of the law appears to be limited only by Section 16, in


relation to Section 13, supra:
SEC 16. Applicability. – The provisions of this Act shall apply
to all kinds of malfeasance, misfeasance and non-feasance that have
been committed by any officer or employee as mentioned in Section 13
hereof, during his tenure of office.

In sum, the Ombudsman has the power to investigate any


malfeasance, misfeasance and non-feasance by a public officer or employee
of the government, or of any subdivision, agency or instrumentality thereof,
including government-owned or controlled corporations. 12 SHECcD

Neither the Constitution nor the Ombudsman Act of 1989, however,


defines who public officers are. A definition of public officers cited in
jurisprudence 13 is that provided by Mechem, a recognized authority on the
subject:
A public office is the right, authority and duty, created and
conferred by law, by which, for a given period, either fixed by law or
enduring at the pleasure of the creating power, an individual is
invested with some portion of the sovereign functions of the
government, to be exercised by him for the benefit of the public. The
individual so invested is a public officer. 14

The characteristics of a public office, according to Mechem, include the


delegation of sovereign functions, its creation by law and not by contract, an
oath, salary, continuance of the position, scope of duties, and the
designation of the position as an office. 15
Petitioner submits that some of these characteristics are not present in
the position of NCC Chair, namely: (1) the delegation of sovereign functions;
(2) salary, since he purportedly did not receive any compensation; and (3)
continuance, the tenure of the NCC being temporary.
Mechem describes the delegation to the individual of some of the
sovereign functions of government as "[t]he most important characteristic"
in determining whether a position is a public office or not.
The most important characteristic which distinguishes an office
from an employment or contract is that the creation and conferring of
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an office involves a delegation to the individual of some of the
sovereign functions of government, to be exercised by him for the
benefit of the public; – that some portion of the sovereignty of the
country, either legislative, executive or judicial, attaches, for the time
being, to be exercised for the public benefit. Unless the powers
conferred are of this nature, the individual is not a public officer. 16

Did E.O. 128 delegate the NCC with some of the sovereign functions of
government? Certainly, the law did not delegate upon the NCC functions that
can be described as legislative or judicial. May the functions of the NCC then
be described as executive?
We hold that the NCC performs executive functions. The executive
power "is generally defined as the power to enforce and administer the laws.
It is the power of carrying the laws into practical operation and enforcing
their due observance." 17 The executive function, therefore, concerns the
implementation of the policies as set forth by law.
The Constitution provides in Article XIV (Education, Science and
Technology, Arts, Culture, and Sports) thereof: aDcTHE

SEC. 15. Arts and letters shall enjoy the patronage of the
State. The State shall conserve, promote, and popularize the nation's
historical and cultural heritage and resources, as well as artistic
creations.

In its preamble, A.O. No. 223 states the purposes for the creation of the
Committee for the National Centennial Celebrations in 1998:
WHEREAS, the birth of the Republic of the Philippines is to be
celebrated in 1998, and the centennial presents an important vehicle
for fostering nationhood and a strong sense of Filipino identity;
WHEREAS, the centennial can effectively showcase Filipino
heritage and thereby strengthen Filipino values;

WHEREAS, the success of the Centennial Celebrations may be


insured only through long-range planning and continuous
developmental programming;
WHEREAS, the active participation of the private sector in all
areas of special expertise and capability, particularly in communication
and information dissemination, is necessary for long-range planning
and continuous developmental programming;
WHEREAS, there is a need to create a body which shall initiate
and undertake the primary task of harnessing the multisectoral
components from the business, cultural, and business sectors to serve
as effective instruments from the launching and overseeing of this
long-term project;
xxx xxx xxx.

E.O. No. 128, reconstituting the Committee for the National Centennial
Celebrations in 1998, cited the "need to strengthen the said Committee to
ensure a more coordinated and synchronized celebrations of the Philippine
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Centennial and wider participation from the government and non-
government or private organizations." It also referred to the "need to
rationalize the relevance of historical links with other countries."
The NCC was precisely created to execute the foregoing policies and
objectives, to carry them into effect. Thus, the Commission was vested with
the following functions:
(a) To undertake the overall study, conceptualization,
formulation and implementation of programs and projects on
the utilization of culture, arts, literature and media as
vehicles for history, economic endeavors, and reinvigorating
the spirit of national unity and sense of accomplishment in
every Filipino in the context of the Centennial Celebrations. In
this regard, it shall include a Philippine National Exposition
'98 within Metro Manila, the original eight provinces, and
Clark Air Base as its major venues;
(b) To act as principal coordinator for all the activities related to
awareness and celebration of the Centennial;
(c) To serve as the clearing house for the preparation and
dissemination of all information about the plans and events
for the Centennial Celebrations;
(d) To constitute working groups which shall undertake the
implementation of the programs and projects;
(e) To prioritize the refurbishment of historical sites and
structures nationwide. In this regard, the Commission shall
formulate schemes (e.g. lease-maintained-and-transfer,
build-operate-transfer, and similar arrangements) to ensure
the preservation and maintenance of the historical sites and
structures;
(f) To call upon any government agency or instrumentality and
corporation, and to invite private individuals and
organizations to assist it in the performance of its tasks; and,
(g) Submit regular reports to the President on the plans,
programs, projects, activities as well as the status of the
preparations for the Celebration. 18
It bears noting the President, upon whom the executive power is
vested, 19 created the NCC by executive order . Book III (Office of the
President), Chapter 2 (Ordinance Power), Section 2 describes the nature of
executive orders:
SEC. 2. Executive Orders. – Acts of the President providing for
rules of a general or permanent character in implementation or
execution of constitutional or statutory powers shall be promulgated in
executive orders. [Italics ours.]

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Furthermore, the NCC was not without a role in the country's economic
development, especially in Central Luzon. Petitioner himself admitted as
much in the oral arguments before this Court:
MR. JUSTICE REYNATO S. PUNO:
And in addition to that expounded by Former President Ramos,
don't you agree that the task of the centennial commission was also to
focus on the long term over all socio economic development of the
zone and Central Luzon by attracting investors in the area because of
the eruption of Mt. Pinatubo.

FORMER VICE PRESIDENT SALVADOR H. LAUREL:


I am glad Your Honor touched on that because that is something
I wanted to touch on by lack of material time I could not but that is a
very important point. When I was made Chairman I wanted the Expo to
be in Batangas because I am a Batangeño but President Ramos said
Mr. Vice President the Central Luzon is suffering, suffering because of
the eruption of Mt. Pinatubo let us try to catalize [sic] economic
recovery in that area by putting this Expo in Clark Field and so it was
done I agreed and Your Honor if I may also mention we wanted to
generate employment aside from attracting business investments and
employment. And the Estrada administration decided to junk this
project there 48, 40 thousand people who lost job, they were employed
in Expo. And our target was to provide 75 thousand jobs. It would have
really calibrated, accelerated the development of Central Luzon. Now, I
think they are going back to that because they had the airport and
there are plan to revive the Expo site into key park which was the
original plan.

There can hardly be any dispute that the promotion of industrialization and
full employment is a fundamental state policy. 20
Petitioner invokes the ruling of this Court in Torio vs. Fontanilla 21 that
the holding by a municipality of a town fiesta is a proprietary rather than a
governmental function. Petitioner argues that the "holding of a nationwide
celebration which marked the nation's 100th birthday may be likened to a
national fiesta which involved only the exercise of the national government's
proprietary function." 22 In Torio, we held:
[Section 2282 of the Chapter on Municipal Law of the Revised
Administrative Code] simply gives authority to the municipality to
[celebrate] a yearly fiesta but it does not impose upon it a duty to
observe one. Holding a fiesta even if the purpose is to commemorate a
religious or historical event of the town is in essence an act for the
special benefit of the community and not for the general welfare of the
public performed in pursuance of a policy of the state. The mere fact
that the celebration, as claimed, was not to secure profit or gain but
merely to provide entertainment to the town inhabitants is not a
conclusive test. For instance, the maintenance of parks is not a source
of income for the town, nonetheless it is [a] private undertaking as
distinguished from the maintenance of public schools, jails, and the like
which are for public service.

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As stated earlier, there can be no hard and fast rule for purposes
of determining the true nature of an undertaking or function of a
municipality; the surrounding circumstances of a particular case are to
be considered and will be decisive. The basic element, however
beneficial to the public the undertaking may be, is that it is
government in essence, otherwise, the function becomes private or
propriety in character. Easily, no governmental or public policy of the
state is involved in the celebration of a town fiesta.

Torio, however, did not intend to lay down an all-encompassing


doctrine. Note that the Court cautioned that "there can be no hard and fast
rule for purposes of determining the true nature of an undertaking or
function of a municipality; the surrounding circumstances of a particular case
are to be considered and will be decisive." Thus, in footnote 15 of Torio, the
Court, citing an American case, illustrated how the "surrounding
circumstances plus the political, social, and cultural backgrounds" could
produce a conclusion different from that in Torio:
We came across an interesting case which shows that
surrounding circumstances plus the political, social, and cultural
backgrounds may have a decisive bearing on this question. The case of
Pope v. City of New Haven, et al. was an action to recover damages for
personal injuries caused during a Fourth of July fireworks display
resulting in the death of a bystander alleged to have been caused by
defendants' negligence. The defendants demurred to the complaint
invoking the defense that the city was engaged in the performance of a
public governmental duty from which it received no pecuniary benefit
and for negligence in the performance of which no statutory liability is
imposed. This demurrer was sustained by the Superior Court of New
Haven Country. Plaintiff sought to amend his complaint to allege that
the celebration was for the corporate advantage of the city. This was
denied. In affirming the order, the Supreme Court of Errors of
Connecticut held inter alia:
Municipal corporations are exempt from liability for the negligent
performance of purely public governmental duties, unless made liable
by statute. . . .

A municipality corporation, which under permissive authority of


its charter or of statute, conducted a public Fourth of July celebration,
including a display of fireworks, and sent up a bomb intended to
explode in the air, but which failed to explode until it reached the
ground, and then killed a spectator, was engaged in the performance
of a governmental duty. (99 A.R. 51)

This decision was concurred in by three Judges while two


dissented.
At any rate the rationale of the Majority Opinion is evident from
[this] excerpt:

"July 4th, when that date falls upon Sunday, July 5th, is made a
public holiday, called Independence Day, by our statutes. All or nearly
all of the other states have similar statutes. While there is no United
States statute making a similar provision, the different departments of
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the government recognize, and have recognized since the government
was established, July 4th as a national holiday. Throughout the country
it has been recognized and celebrated as such. These celebrations,
calculated to entertain and instruct the people generally and to arouse
and stimulate patriotic sentiments and love of country, frequently take
the form of literary exercises consisting of patriotic speeches and the
reading of the Constitution, accompanied by a musical program
including patriotic air sometimes preceded by the firing of cannon and
followed by fireworks. That such celebrations are of advantage to the
general public and their promotion a proper subject of legislation can
hardly be questioned. . . . "

Surely, a town fiesta cannot compare to the National Centennial


Celebrations. The Centennial Celebrations was meant to commemorate the
birth of our nation after centuries of struggle against our former colonial
master, to memorialize the liberation of our people from oppression by a
foreign power. 1998 marked 100 years of independence and sovereignty as
one united nation. The Celebrations was an occasion to reflect upon our
history and reinvigorate our patriotism. As A.O. 223 put it, it was a "vehicle
for fostering nationhood and a strong sense of Filipino identity," an
opportunity to "showcase Filipino heritage and thereby strengthen Filipino
values." The significance of the Celebrations could not have been lost on
petitioner, who remarked during the hearing:
Oh, yes, certainly the State is interested in the unity of the
people, we wanted to rekindle the love for freedom, love for country,
that is the over-all goal that has to make everybody feel proud that he
is a Filipino, proud of our history, proud of what our forefather did in
their time. . . . .

Clearly, the NCC performs sovereign functions. It is, therefore, a public


office, and petitioner, as its Chair, is a public officer.
That petitioner allegedly did not receive any compensation during his
tenure is of little consequence. A salary is a usual but not a necessary
criterion for determining the nature of the position. It is not conclusive. The
salary is a mere incident and forms no part of the office. Where a salary or
fees is annexed, the office is provided for it is a naked or honorary office,
and is supposed to be accepted merely for the public good. 23 Hence, the
office of petitioner as NCC Chair may be characterized as an honorary office,
as opposed to a lucrative office or an office of profit, i.e., one to which salary,
compensation or fees are attached. 24 But it is a public office, nonetheless.
Neither is the fact that the NCC was characterized by E.O. No. 128 as
an "ad-hoc body" make said commission less of a public office.
The term office, it is said, embraces the idea of tenure and
duration, and certainly a position which is merely temporary and local
cannot ordinarily be considered an office. "But," says Chief Justice
Marshall, "if a duty be a continuing one, which is defined by rules
prescribed by the government and not by contract, which an individual
is appointed by government to perform, who enters on the duties
pertaining to his station without any contract defining them, if those
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duties continue though the person be changed, — it seems very
difficult to distinguish such a charge or employment from an office of
the person who performs the duties from an officer."
At the same time, however, this element of continuance can not
be considered as indispensable, for, if the other elements are present
"it can make no difference, " says Pearson, C.J., "whether there be but
one act or a series of acts to be done, — whether the office expires as
soon as the one act is done, or is to be held for years or during good
behavior." 25
Our conclusion that petitioner is a public officer finds support inIn Re
Corliss. 26 There the Supreme Court of Rhode Island ruled that the office of
Commissioner of the United States Centennial Commission is an "office of
trust" as to disqualify its holder as elector of the United States President and
Vice-President. (Under Article II of the United States Constitution, a person
holding an office of trust or profit under the United States is disqualified from
being appointed an elector.)
. . . . We think a Commissioner of the United States Centennial
Commission holds an office of trust under the United States, and that
he is therefore disqualified for the office of elector of President and
Vice-President of the United States.
The commission was created under a statute of the United States
approved March 3, 1871. That statute provides for the holding of an
exhibition of American and foreign arts, products, and manufactures,
"under the auspices of the government of the United States," and for
the constitution of a commission, to consist of more than one delegate
from each State and from each Territory of the United States, "whose
functions shall continue until close of the exhibition," and "whose duty
it shall be to prepare and superintend the execution of the plan for
holding the exhibition." Under the statute the commissioners are
appointed by the President of the United States, on the nomination of
the governor of the States and Territories respectively. Various duties
were imposed upon the commission, and under the statute provision
was to be made for it to have exclusive control of the exhibit before the
President should announce, by proclamation, the date and place of
opening and holding the exhibition. By an act of Congress approved
June 1st, 1872, the duties and functions of the commission were further
increased and defined. That act created a corporation, called "The
Centennial Board of Finance," to cooperate with the commission and to
raise and disburse the funds. It was to be organized under the direction
of the commission. The seventh section of the act provides "that the
grounds for exhibition shall be prepared and the buildings erected by
the corporation, in accordance with plans which shall have been
adopted by the United States Centennial Commission; and the rules
and regulations of said corporation, governing rates for entrance and
admission fees, or otherwise affecting the rights, privileges, or interests
of the exhibitors, or of the public, shall be fixed and established by the
United States Centennial Commission; and no grant conferring rights or
privileges of any description connected with said grounds or buildings,
or relating to said exhibition or celebration, shall be made without the
consent of the United States Centennial Commission, and said
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commission shall have power to control, change, or revoke all such
grants, and shall appoint all judges and examiners and award all
premiums." The tenth section of the act provides that "it shall be the
duty of the United States Centennial Commission to supervise the
closing up of the affairs of said corporation, to audit its accounts, and
submit in a report to the President of the United States the financial
results of the centennial exhibition."
It is apparent from this statement, which is but partial, that the
duties and functions of the commission were various, delicate, and
important; that they could be successfully performed only by men of
large experience and knowledge of affairs; and that they were not
merely subordinate and provisional, but in the highest degree
authoritative, discretionary, and final in their character. We think that
persons performing such duties and exercising such functions, in
pursuance of statutory direction and authority, are not to be regarded
as mere employees, agents, or committee men, but that they are,
properly speaking, officers, and that the places which they hold are
offices. It appears, moreover, that they were originally regarded as
officers by Congress; for the act under which they were appointed
declares, Section 7, that "no compensation for services shall be paid to
the commissioners or other officers , provided for in this act, from the
treasury of the United States." The only other officers provided for
were the "alternates" appointed to serve as commissioners when the
commissioners were unable to attend.

Having arrived at the conclusion that the NCC performs executive


functions and is, therefore, a public office, we need no longer delve at length
on the issue of whether Expocorp is a private or a public corporation. Even
assuming that Expocorp is a private corporation, petitioner's position as
Chief Executive Officer (CEO) of Expocorp arose from his Chairmanship of
the NCC. Consequently, his acts or omissions as CEO of Expocorp must be
viewed in the light of his powers and functions as NCC Chair. 27
Finally, it is contended that since petitioner supposedly did not receive
any compensation for his services as NCC or Expocorp Chair, he is not a
public officer as defined in Republic Act No. 3019 (The Anti-Graft and Corrupt
Practices Act) and is, therefore, beyond the jurisdiction of the Ombudsman.
Respondent seeks to charge petitioner with violation of Section 3 (e) of
said law, which reads:
SEC. 3. Corrupt practices of public officers. – In addition to
acts or omissions of public officers already penalized by existing law,
the following shall constitute corrupt practices of any public officer and
are hereby declared to be unlawful:
xxx xxx xxx

(e) Causing any undue injury to any party, including the


Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official, administrative
or judicial functions through manifest partiality, evident bad faith or
gross inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the
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grant of licenses or permits or other concessions.

A "public officer," under R.A. No. 3019, is defined by Section 2 of said


law as follows:
SEC. 2. Definition of terms. – As used in this Act, the term –
xxx xxx xxx
(b) "Public officer" includes elective and appointive officials
and employees, permanent or temporary, whether in the classified or
unclassified or exemption service receiving compensation, even
nominal, from the government as defined in the preceding paragraph.
[Italics supplied.]

It is clear from Section 2 (b), above, that the definition of a "public


officer" is expressly limited to the application of R.A. No. 3019. Said
definition does not apply for purposes of determining the Ombudsman's
jurisdiction, as defined by the Constitution and the Ombudsman Act of 1989.
Moreover, the question of whether petitioner is a public officer under
the Anti-Graft and Corrupt Practices Act involves the appreciation of
evidence and interpretation of law, matters that are best resolved at trial.
To illustrate, the use of the term "includes" in Section 2 (b) indicates
that the definition is not restrictive. 28 The Anti-Graft and Corrupt Practices
Act is just one of several laws that define "public officers." Article 203 of the
Revised Penal Code, for example, provides that a public officer is:
. . . any person who, by direct provision of law, popular election
or appointment by competent authority, takes part in the performance
of public functions in the Government of Philippines, or performs in said
Government or in any of its branches public duties as an employee,
agent or subordinate official, of any rank or class.

Section 2 (14) of the Introductory Provisions of the Administrative Code of


1987, 29 on the other hand, states:
Officer – as distinguished from "clerk" or "employee," refers to a
person whose duties not being of a clerical or manual nature, involves
the exercise of discretion in the performance of the functions of the
government. When used with reference to a person having authority to
do a particular act or perform a particular person in the exercise of
governmental power, "officer" includes any government employee,
agent or body having authority to do the act or exercise that function.

It bears noting that under Section 3 (b) of Republic Act No. 6713 (The Code
of Conduct and Ethical Standards for Public Officials and Employees), one
may be considered a "public official" whether or not one receives
compensation, thus:
"Public Officials" include elective and appointive officials and
employees, permanent or temporary, whether in the career or non-
career service including military and police personnel, whether or not
they receive compensation, regardless of amount.

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Which of these definitions should apply, if at all?
Assuming that the definition of public officer in R.A. No. 3019 is
exclusive, the term "compensation," which is not defined by said law, has
many meanings.
Under particular circumstances, "compensation" has been held to
include allowance for personal expenses, commissions, expenses, fees,
an honorarium, mileage or traveling expenses, payments for services,
restitution or a balancing of accounts, salary, and wages. 30

How then is "compensation," as the term is used in Section 2 (b) of R.A. No.
3019, to be interpreted?
Did petitioner receive any compensation at all as NCC Chair? Granting
that petitioner did not receive any salary, the records do not reveal if he
received any allowance, fee, honorarium, or some other form of
compensation. Notably, under the by-laws of Expocorp, the CEO is entitled to
per diems and compensation. 31 Would such fact bear any significance?
Obviously, this proceeding is not the proper forum to settle these
issues lest we preempt the trial court from resolving them.
WHEREFORE, the petition is DISMISSED. The preliminary injunction
issued in the Court's Resolution dated September 24, 2001 is hereby LIFTED.
SO ORDERED.
Puno and Ynares-Santiago, JJ., concur.
Davide, Jr., C.J., took no part, due to close relations to a party.

Footnotes
1. A.O. 223, Section 1. The same section provided for the Committee's
composition as follows:

. . . . The Committee shall be composed of six (6) representatives from the


Presidential Commission for Culture and the Arts (PCCA), and five (5)
representatives from the Philippine Centennial Foundation, Inc. (PCFI). They
shall be appointed by the President upon their nomination by their respective
groups.

The Committee members shall elect among themselves the Chairman and
Vice-Chairman, and such other officers as they may deem necessary.
The Committee was also granted the following duties and powers:

1. To undertake the overall study, formulation and implementation of


programs and projects on the utilization of culture, arts, and media as
vehicles for value education in the context of the Centennial Celebration;
2. To act as principal coordinator for all the activities related to
awareness and celebration of the centennial;

3. To constitute sub-committees and working groups which shall


undertake the implementation of the program and projects; and
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4. To call upon the assistance of any government agency or
instrumentality and corporation, and to invite private individuals and
organizations to assist it in the performance of its tasks. (Id., at Section 2.)

2. Other members of the Commission were the Secretaries of Education,


Culture and Sports, National Defense, Interior and Local Government,
Tourism, Trade and Industry, Public Works and Highways, Transportation and
Communications, and Budget and Management, the Press Secretary, two (2)
representatives each from the Senate and the House of Representatives, two
(2) representatives from the Judiciary, the Executive Director of the National
Historical Institute, three (3) representatives from the National Commission
for Culture and the Arts, three (3) representatives from the Philippine
Centennial Foundation, Inc., and other members from the government and
the private sectors, "as may be designated later." (E.O. No. 128, Section 1.)
3. Id., at Section 5.
4. The purposes of the corporation were set forth in Article 2 of the Articles of
Incorporation, thus:
PRIMARY PURPOSE

To set up and establish the Philippine Centennial International Exposition


1998 (EXPO '98), a project of the National Centennial Commission
envisioned and mandated under Executive Order No. 128, series of 1993, in
the Clark Special Economic Zone (CSEZ) within the Provinces of Pampanga
and Tarlac, Philippines as created, defined and delineated under
Proclamation No. 163, series 1993, of the President of the Philippines and
furtherance of said purpose;

1. To operate, administer, manage, implement, and develop EXPO '98


conformably to and in accordance with the Detailed Feasibility study and
Master Plan for said Exposition prepared by DOUGLAS/GALLAGHER, INC. and
approved by the President of the Philippines;

2. To exercise oversight functions and overall jurisdiction over the


operations of EXPO '98 as well as manage and oversee all plans, programs,
and activities related to the implementation and operation of said Exposition;
3. To regulate the establishment, operation, and maintenance of utilities,
services, and infrastructure works in all the site components of EXPO '98 and
its support facilities;

4. To oversee the preparations for the implementation of the participation


of countries, groups, organizations, and entities at EXPO '98;

5. To establish linkages with participating countries and coordinate their


programs and activities relevant to the theme of EXPO '98;
6. To provide and prescribe the guidelines for the design and fabrication
of the pavilions of participating countries that played a significant role in
Philippine historical development and of other participating groups,
organizations, and entities which would be reflective of the following
objectives of EXPO '98 —

a) showcase the national vision of the Philippines, highlighted by a rich


history and culture, and its traditional heritage and diverse cultural
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influences;

b) express eloquently the Filipinism sentiment of the Philippine


Centennial;

c) strengthen cultural and historical linkages between Philippines and


participating countries;

d) create an image of the Philippines as a country with rich trade and


tourism potentials; and

e) project the Filipino character and strengthen the sense of national


pride and patriotism among the Filipino people.
7. To conceive and devise varied promotional strategies towards creating
awareness and appreciation of EXPO '98 as the centerpiece of the national
celebrations in 1998 of the centennial of the declaration of Philippine
Independence and beyond that as a permanent site for the Filipino people to
honor their rich heritage;

8. To encourage and invite the active and meaningful participation of the


private sector in managing and overseeing EXPO '98; and

9. To forge strategic partnerships and joint ventures with local and


international investors and developers in the development, maintenance,
operation, and management of EXPO '98 on a turn-key basis.
SECONDARY PURPOSES

(1) To purchase, acquire, own, lease, sell and convey real properties such
as lands, buildings, factories and warehouses and machineries, equipment
and other personal properties as may be necessary or incidental to the
conduct of the corporate business, and to pay in cash, shares of its capital
stock, debentures and other evidences of indebtedness, or other securities,
as may be deemed expedient, for any business or property acquired by the
corporation.

(2) To borrow or raise money necessary to meet the financial


requirements of its business by the issuance of bonds, promissory notes and
other evidences of indebtedness, and to secure the repayment thereof by
mortgage, pledge, deed of trust or lien upon the properties of the corporation
or to issue pursuant to law shares of its capital stock, debentures and other
evidences of indebtedness in payment for properties acquired by the
corporation or for money borrowed in the prosecution of its lawful business;
(3) To invest and deal with the money and properties of the corporation
in such manner as may from time to time be considered wise or expedient
for the advancement of its interests and to sell, dispose of or transfer the
business, properties and goodwill of the corporation or any part thereof for
such consideration and under such terms as it shall see fit to accept;

(4) To aid in any manner any corporation, association, or trust estate,


domestic or foreign, or any firm or individual, any shares of stock in which or
any bonds, debentures, notes, securities, evidences of indebtedness,
contracts, or obligations of which are held by or for this corporation, directly
or indirectly or through other corporations or otherwise;

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(5) To enter into any lawful arrangement for sharing profits, union of
interest, unitization or farmout agreement, reciprocal concession, or
cooperation, with any corporation, association, partnership, syndicate, entity,
person or governmental, municipal or public authority, domestic or foreign, in
the carrying on of any business or transaction deemed necessary, convenient
or incidental to carrying out any of the purposes of this corporation;
(6) To acquire or obtain from any government or authority, national,
provincial, municipal or otherwise, or a corporation, company or partnership
or person, such charter, contracts, franchise, privileges, exemption, licenses
and concessions as may be conducive to any of the objects of the
corporation;
(7) To establish and operate one or more branch offices of agencies and
to carry on any or all of its operations and business without any restrictions
as to place or amount including the right to hold, purchase or otherwise
acquire, lease, mortgage, pledge and convey or otherwise deal in with real
and personal property anywhere within the Philippines;
(8) To conduct and transact any and all lawful business, and to do or
cause to be done any one or more of the acts and things herein set forth as
its purposes, within or without the Philippines, and in any and all foreign
countries, and to do everything necessary, desirable or incidental to the
accomplishment of the purposes or the exercise of any one or more of the
powers herein enumerated, or which shall at any time appear conducive to or
expedient for the protection or benefit of this corporation.
5. Rollo , p. 10.
6. Id., at 134-135.
7. Id., at 15.
8. Id., at 296-297.
9. 312 SCRA 77 (1999).
10. Art. XI, SEC. 12.

11. Art. XI, SEC. 13 (1).


12. Section 22 extends these investigatory powers, under certain conditions, to
private persons:

SEC. 22. Investigatory Power. — The Office of the Ombudsman shall


have the power to investigate any serious misconduct in office allegedly
committed by officials removable by impeachment, for the purpose of filing
a verified complaint for impeachment or over Members of Congress, and
the Judiciary.

In all cases of conspiracy between an officer or employee of the government


and a private person, the Ombudsman and his Deputies shall have
jurisdiction to include such private person as the evidence may warrant. The
officer or employee and the private person shall be tried jointly and shall be
subject to the same penalties and liabilities.

13. E.g., Fernandez vs. Ledesma, 7 SCRA 620 (1963); Aparri vs. Court of
Appeals, 127 SCRA 231 (1984).
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14. F.R. MECHEM, A TREATISE ON THE LAW OF PUBLIC OFFICES AND OFFICERS,
§1.
15. Id., at §§4-10. See also 63C Am Jur. 2d, Public Officers and Employees §1.
16. Id., at §4.
17. Ople vs. Torres, 293 SCRA 141 (1998).
18. Id., at Sec. 2.
19. CONSTITUTION, ARTICLE VII, SECTION 1.
20. Article XII (National Economy and Patrimony) of the Constitution provides:

Section 1. . . . .
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries that
make full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. . . . .

In the pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. . . . .
21. 85 SCRA 599 (1978).

22. Rollo , p. 466.


23. Id., at §§7, 15. See also Triste vs. Leyte State College Board of Trustees, 192
SCRA 326 (1990).

24. Id., at §13.


25. Id., at § 8. Italics supplied.
26. 23 Am Rep. 538 (1876).

27. See Yasay vs. Desierto, 300 SCRA 494 (1998).


28. Preclaro vs. Sandiganbayan, 247 SCRA 454 (1995).
29. Executive Order No. 292.
30. 15 C.J.S. Compensation, p. 654.

31. Rollo , p. 470.

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