258 SCRA 134

CRISOSTOMO vs. CA and PEOPLE

FACTS:
Crisostomo, president of then PCC, was suspended
for alleged corrupt practices. Subsequently, PCC was
converted to PUP by virtue of PD no. 1341. Meanwhile,
Crisostmo was acquitted of the charges against him and
was ordered by the court to be reinstated to the position
as president of then PCC, now PUP, and ordered that he
be entitled to the salaries and other benefits which he
failed to receive during his suspension. However, People
moved for certiorari with prohibition assailing the orders
made by the court. The CA disallowed the reinstatement
of Crisostmo, and ordered that he is entitled only to
receive the salaries and benefits which accrued only from
his suspension till the conversion of PCC to PUP.
Crisostomo argued, however, that PD no. 1341 did not
abolish PCC, but merely converted it to PUP, thus, a mere
continuation of the existence of PCC.
ISSUE:
Whether PD no. 1341 abolished PCC.
RULING:
No. PD no. 1341 did not abolish, but only changed
PCC into PUP. What took place was a change in academic
status of the institution, not its corporate life. When the
purpose is to abolish a department or an office and to
replace it with another one, the lawmaking authority says
so. However, the reinstatement of Crisostmo to the
position could not be ordered by the trial court because
on June 10, 1978, PD no, 1437 had been promulgated
fixing the term of office of presidents of State Universities
and Colleges at six (6) years, and authorizing the
President to terminate the terms of incumbents who were
not reappointed.

280 SCRA 713

AQUILINO LARIN vs. EXECUTIVE SECRETARY, ET AL.
FACTS:
Larin, then Assistant Commissioner of Excise Tax
Service of the BIR, questioned his unlawful removal from
office. Larin argued that the President exercises only the
power of control, not the power to remove, over CESOs.
Further, Larin claimed that he was removed as a result of
the reorganization made by the Executive Department in
the BIR pursuant to EO no. 132. Moreover, Larin argued
that the reorganization sought tobe effected on the basis
of EO no. 132 was tainted with bad faith. Respondents, on
the other hand, contended that since Larin is a
presidential appointee, he falls under the disciplining
authority of the President. Further, they contended that
EO no. 132 and its implementing rules were validly issued
pursuant to Secs. 48 and 62 of RA no. 7645. Significantly,
they claimed that Larin was removed from office because
he was found guilty of grave misconduct in the
administrative cases filed against him.
ISSUES:
a. Whether the President has the power to discipline
the Larin.
b. What is the effect of the acquittal of Larin in the
criminal charges against him?
c. Whether the President has the power to
reorganize the BIR or to issue the questioned EO
no. 132.

d. Whether the reorganization of the BIR pursuant to

EO no. 132 was tainted with bad faith.
RULING:
a. Yes. Under the law, CESOs are all appointed by the
President. Concededly, Larin was appointed as Assistant
Commissioner by then Pres. Aquino. Thus, Larin was a
presidential appointee who belongs to career service of
the Civil Service. Being a presidential appointee, h comes
under the direct disciplining authority of the President.
This is in line with the principle that the power to remove
is inherent in the power to appoint. However, this power
of removal is not an absolute one, which accepts no
reservation. Under the Administrative Code of 1987,
career service is characterized by the existence of
security of tenure, as distinguished from non-career
service whose tenure is coterminous with that of the
appointing or subject to his pleasure, or limited to a
period specified by law or to the duration of a particular
project for which purpose the employment was made. As
career service officer, Larin enjoys the right to security of
tenure. The Civil Service Decree is emphatic that career
service officers and employees who enjoy security of
tenure may be removed only for any of the causes
enumerated in said law. The fact that Larin was a
presidential appointee does not give the appointing
authority the license to remove him at will or at his
pleasure. The conviction of Larin by the SB having been
set aside by the Court, Larin was not dismissed for a valid
cause.
b. Administrative cases are independent from criminal
actions for the same act or omission, the dismissal or
acquittal of the criminal charge does not foreclose the
institution of administrative action nor carry with it the
relief from administrative liability. However, where the
very basis of the administrative case against Larin is his
conviction in the criminal action which was later on set
aside by the Court upon a categorical and clear findings
that the acts for which he was administratively held liable

are not unlawful and irregular, the acquittal of Larin in

the criminal case necessarily entails the dismissal of the
administrative action against him.
c. Yes. Although, Sec. 48 of RA no. 7645 clearly mentions
the acts of scaling down, phasing out and abolition of
offices only and does not cover the creation of offices or
transfer of functions, nonetheless, the act of creating and
decentralizing is included in the subsequent provision of
Sec. 62 which shows that the President is authorized to
effect organizational charges including the creation of
offices in the department or agency concerned. PD no.
1772 expressly grants the President the continuing
authority to reorganize the National Government, which
includes the power to group, consolidate bureaus and
agencies, to abolish offices, to transfer functions, to
create and classify functions, services and activities and
to standardize salaries and materials.
d. Yes. While the Presidents power to reorganize cannot be
denied, this does not mean however that the
reorganization itself is properly made in accordance with
law. It is a rule that reorganization is regarded as valid
provided it is pursued in good faith. It is perceivable that
the non-reappointment of the petitioner as Assistant
Commissioner violates sec. 4 of RA 6656. Under said
provision, officers holding permanent appointments are
given preference for appointment to the new positions in
the approved staffing pattern comparable to their former
position or in case there are not enough comparable
positions to positions next lower in rank. Since Larin is a
CESO who is holding a permanent position, he should
have been given preference for appointment in the
position of Assistance Commissioner. Further, RA 6656
explicitly states that no new employees shall be taken in
until all permanent officers shall have been appointed for
permanent position.
176 SCRA 84
DARIO vs. MISON
FACTS:

Then Pres. Aquino promulgated Proclamation

no. 3 mandating to completely reorganize the
government, and EO no. 127 reorganizing the
Ministry of Finance. Among other officers, EO no.
127 provided for the reorganization of the Bureau of
Customs and prescribed a new staffing pattern
therefor. Mison, then incumbent Commissioner of
Customs, issued a Memorandum in the nature of
Guidelines on the implementation of Reorganization
Executive Orders which prescribed the procedure in
personnel placement. Mison addressed several
notices to various Customs officials stating that they
shall continue to perform their respective duties and
responsibilities in a hold-over capacity, and that
those incumbents whose positions are not carried in
the new reorganization pattern, or who are no reappointed, shall be deemed separated from the
service. However, said officials and employees filed
their respective appeals with the CSC. Consequently,
CSC ordered the reinstatement of said employees.
Mison, then, filed his MR, but was denied. Hence,
Mison instituted certiorari proceedings. Dario, one
of the Deputy Commissioners of the Bureau,
questions the legality of his dismissal. He claims that
under the Provisional Constitution, the power to
dismiss public officials without cause ended on Feb.
25, 1987, and thereafter, public officials enjoyed
security of tenure under the provisions of 1987
Constitution. Feria, meanwhile, asserts his security
of tenure and that he cannot be said to be covered
by Sec. 59 of EO 127, and that the Commissioners
power to appoint does not cover those appointed by
the President, hence beyond the control of Mison.
Mison, on the other hand, posits that sec. 16, Art.
XVIII of the Constitution explicitly authorize the
removal of career civil service employees not for a
cause, but as a result of the reorganization pursuant
to Proclamation no. 3 and the reorganization
following the ratification of the Constitution. Thus,

Mison posits that claims of violation of security of

tenure are allegedly no defense. Mison proffers that
under sec. 59, incumbents are considered on
holdover status, thus, all those positions were
considered vacant.
ISSUE:
Whether sec. 16, Art. XVIII of the 1987
Constitution is a grant of a license upon the
Government to remove public officials.
RULING:
No.
The
State
can
still
carry
out
reorganizations provided that it is done in good
faith. Removal of career officials without cause
cannot be done after the passing of the 1987
Constitution. The authority to remove public officials
under the Provisional Constitution ended on
February 25, 1987. It can only mean, then, that
whatever reorganization is taking place is upon the
authority of the present Charter, and upon the
mantle of its provisions and safeguards. A
reorganization is carried out in good faith if it is for
the purpose of economy or to make bureaucracy
more efficient. If the abolition, which is nothing else
but a separation or removal, is done for political
reasons or purposely to defeat security of tenure, or
otherwise not in good faith, no valid abolition takes
place and whatever abolition is done, is void ab
initio. The Court finds that Mison did not act in good
faith since after Feb. 2, 1987 no perceptible
restricting of the Customs hierarchy, except for the
change of personnel, has occurred, which would
have justified the contested dismissals. Furthermore,
Misons appointing power is subject to the
provisions of EO no. 39 which provides that the
Commissioner may appoint all Bureau personnels
except those appointed by the President. Thus, with
respect to Dario and Feria, Mison could not have

validly terminated them, they being Presidential

Appointees. Moreover, that Customs employees had
been on a mere holdover status cannot mean that
the positions held by tem had become vacant. The
occupancy of a position in a holdover capacity was
conceived to facilitate reorganization and would
have lapsed on Feb. 25, 1987, but advanced to Feb.
2, 1987 when the 1987 Constitution took effect.
After said date, the provisions of the latter on
security of tenure govern.

170 SCRA 478

OLAGUER and REYES vs. REGIONAL TRIAL COURT,
ET AL.
FACTS:
Private respondents, the only stockholders with
right to vote of the PJI, obtained from DBP certain
financing accommodations and as security thereof
executed a first mortgage in favor of DBP on its acts
enumerated in a list attached to the mortgage. The
PJI stockholders assigned to DBP the voting rights
over 67% of the total subscribed and outstanding
voting shares of stock of the company held by them.
DBP appointed said PJI stockholders as proxies to
exercise its right to vote. However, PJI defaulted.
Consequently, DBP cancelled the proxies in favor of
the assigning stockholders and designated petitioner
Olaguer, Velez and de Leon as its proxies. Although
Olaguer was elected chairman of the board and CEO

of PJI, he failed to comply with his commitment and

that this gave private respondents a reason to cancel
the assignment. Furthermore, Olaguer committed
certain illegal acts which gave rise to the filing of
several complaints against him. However, before the
cases could be resolved, Olaguers appointment as
member of the board of directors of DBP was
terminated by then Pres. Aquino. It is alleged,
however,
that
the
termination
of
Olaguer
notwithstanding, he continued to exercise and retain
full management and control of PJI. Accordingly, the
DBP entered into an Interim Agreement with private
respondents. However, the DBP chief legal counsel
informed private respondents that said Agreement
cannot be implemented because Olaguer claims that
he has just been designated the fiscal and team
leader of the PCGG assigned to the PJI and that all
his actions are sanctioned and reported to PCGG
Chairman, and that it is PCGG which exercises the
voting rights of all PJI common stocks sequestered
since 1986, including those assigned to DBP.
Subsequently, on Jan. 1988, a motion to dismiss was
filed by petitioners on the ground that the court has
no jurisdiction over their persons; that they were not
served summons and that the subject matter of the
action involves controversies arising out of intracorporate
relations
between
and
among
stockholders which are covered by the provisions of
sec. 5 of PD no. 902-A.
ISSUE:
Whether the trial court has jurisdiction over the
subject matter of the action.
RULING:
No. Some administrative agencies are bodies
corporate with legal capacity to sue and be sued in
the courts. There is no dispute that PJI is now under
sequestration by the PCGG and that PJI is listed in

the SB as among the corporations involved in the

unexplained wealth case against former Pres.
Marcos and many others. Furthermore, in the
exercise of PCGGs functions, it is a co-equal body
with the RTC and co-equal bodies have no power to
control the other. The RTC and CA have no
jurisdiction over the PCGG in the exercise of its
powers and therefore, may not interfere with and
restrain or set aside the orders and actions of the
PCGG. Moreover, the Commission should not be
embroiled in and swamped by legal suits before
inferior courts all over the land. Otherwise, the
Commission will be forced to spend valuable time
defending all its actuations in such courts. This will
defeat the very purpose behind the creation of the
Commission. Accordingly, EO. No. 1 expressly
accorded the Commission and its members immunity
from suit for damages.

215 SCRA 455

RADIO COMMUNICATIONS OF THE PHIL. vs. NTC
and JUAN ALEGRE
FACTS:
Alegres wife sent 2 rush telegrams through
RCPIs facilities to her sister and brother-in-law and
sister in law. However, both telegrams did not reach
their destinations on the expected dates. Alegre then
filed a complaint against RCPI with the NTC for poor
service, with a request for the imposition of the
appropriate punitive sanction against the company.
RCPI moved to dismiss the case on the grounds,
among others, that Alegre is not the real party in
interest, and NTC has no jurisdiction over the case.
NTC, nonetheless, proceeded with the hearing and
received evidence for Alegre. Subsequently, the
motion to dismiss was denied by NTC. NTC finds
RCPI administratively liable for deficient and
inadequate service and held the latter liable for
fines. However, RCPI moved for reconsideration
reiterating the grounds for its motion to dismiss. The
Solicitor, on the other hand, posits that under EO
546, the power and authority of the NTC to impose
fines is incidental to its power to regulate public
service utilities and to supervise telecommunications
facilities, and that regulatory administrative
agencies necessarily impose sanctions.
ISSUE:
Whether the NTC has jurisdiction over the case.
RULING:
No. The NTC stepped into the shoes of the
Board of Communications which exercised powers
pursuant to the Public Service Act. The Board did
not possess the power to impose administrative fines
on public services rendering deficient service to
customers, ergo its successor cannot arrogate unto

itself such power, in the absence of legislation. NTC

has no jurisdiction to impose a fine. No substantial
change has been brought about by EO 546 to bolster
NTCs jurisdiction. The jurisdiction and powers of
administrative agencies are limited to those
expressly granted or necessarily implied from those
granted in the legislation creating such body, and
any order without or beyond such jurisdiction is void
and ineffective.