PUBLIC OFFICE

Principles, Doctrines, Rulings

 FELICITO R. QUIMPO, vs. TANODBAYAN (OMBUDSMAN), GREG DIMAANO and DANNY F.

REMO, G.R. No. 72553, 02 December 1986

While it may be that PETROPHIL was not originally "created" as a government-owned

or controlled corporation, after it was acquired by PNOC, which is a government-
owned or controlled corporation, PETROPHIL became a subsidiary of PNOC and thus
shed-off its private status. It is now funded and owned by the government as, in fact,
it was acquired to perform functions related to government programs and policies on
oil a vital commodity in the economic life of the nation. It was acquired not
temporarily but as a permanent adjunct to perform essential government or
government-related functions, as the marketing arm of PNOC to assist the latter in
selling and distributing oil and petroleum products to assure and maintain an
adequate and stable domestic supply.

lt should make no substantial difference that it was not originally "created" as a

government-owned or controlled corporation. What is decisive is that it has since
been acquired by the Government to perform functions related to government
programs and policies on oil.

For purposes of coverage in the Civil Service, employees of government-owned or

controlled corporation whether created by special law or formed as subsidiaries are
covered by the Civil Service Law, not the Labor Code, and the fact that private
corporations owned or controlled by the government may be created by special
charter does not mean that such corporation not created by special law are not
covered by the Civil Service. (National Housing vs. Juco, 134 SCRA 172 [1985]).

Even granting that it is profit-oriented, the fact remains that it was acquired with
capital belonging to the Government and Govern ment money is utilized in its
operations.

as of the date of its acquisition by the Government utilizing public funds, PETROPHIL,
while retaining its own corporate existence, became a government-owned or
controlled corporation within the Constitutional precept. Its employees, therefore, are
public servants falling within the investigatory and prosecutory jurisdiction of the
Tanodbayan for purposes of the Anti-Graft & Corrupt Practices Act.

 ISMAEL G. KHAN, JR. and WENCESLAO L. MALABANAN vs.OFFICE OF THE OMBUDSMAN,

DEPUTY OMBUDSMAN (VISAYAS), ROSAURO F. TORRALBA* and CELESTINO
BANDALA , G.R. No. 125296, July 20, 2006
**

JURISDICTION OF THE OMBUDSMAN OVER GOCCS

IS CONFINED ONLY TO THOSE WITH ORIGINAL
CHARTERS

Article XI, Section 13(2), 1987 Constitution

Sec. 13. The Office of the Ombudsman shall have the following
powers, functions, and duties:

xxx xxx xxx

(2) Direct, upon complaint or at its own instance, any public official or
employee of the Government, or any subdivision, agency or
instrumentality thereof, as well as any government-owned or
controlled corporation with original charter, to perform and expedite
any act or duty required by law, or to stop, prevent, and correct any
abuse or impropriety in the performance of duties. (italics supplied)

xxx xxx xxx

 "with original charter" means "chartered by special law as distinguished from
corporations organized under the Corporation Code." (Juco v. National Labor
Relations Commission, [343 Phil. 307 (1997)].

PAL, being originally a private corporation seeded by private capital and created
under the general corporation law, does not fall within the jurisdictional powers of the
Ombudsman under Article XI, Section 13(2) of the Constitution.

The Court declared in Quimpo that the Tanodbayan had jurisdiction over them
because PETROPHIL ceased to be a private entity when Philippine National Oil
Corporation (PNOC) acquired its shares.

In Quimpo, the government acquired PETROPHIL to "perform functions related to

government programs and policies on oil."11 The fact that the purpose in acquiring
PETROPHIL was for it to undertake governmental functions related to oil was decisive
in sustaining the Tanodbayan's jurisdiction over it.

This was certainly not the case with PAL. The records indicate that the government
acquired the controlling interest in the airline as a result of the conversion into equity
of its unpaid loans in GSIS. No governmental functions at all were involved.

Furthermore, Quimpo was decided prior to the 1987 Constitution. In fact, it was the
1973 Constitution which the Court relied on in concluding that the Tanodbayan had
jurisdiction over PETROPHIL's accused officers. Particularly, the Court cited Article XIII,
Section 6:

SEC. 6. The BatasangPambansa shall create an office of the Ombudsman, to

be known as the Tanodbayan, which shall receive and investigate complaints
relative to public office, including those in government-owned or controlled
corporations, make appropriate recommendations, and in case of failure of
justice as defined by law, file and prosecute the corresponding criminal, civil,
or administrative case before the proper court or body. (italics supplied)

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.

The most important characteristic which distinguishes an office from an employment

or contract is that the creation and conferring of 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. (F.R. MECHEM, A TREATISE ON THE LAW OF PUBLIC
OFFICES AND OFFICERS, § 1)

"public officers" are those endowed with the exercise of sovereign executive,
legislative or judicial functions.( F.R. MECHEM, A TREATISE ON THE LAW OF PUBLIC
OFFICES AND OFFICERS, § 1)

In the case of officers/employees in GOCCs, they are deemed "public officers" if their
corporations are tasked to carry out governmental functions.

 CESAR Z. DARIO vs.HON. SALVADOR M. MISON, HON. VICENTE JAYME and HON.
CATALINO MACARAIG, JR., in their respective capacities as Commissioner of Customs,
Secretary of Finance, and Executive Secretary, G.R. No. 81954, 08 August 1989

There is no question that the administration may validly carry out a government
reorganization — insofar as these cases are concerned, the reorganization of the
Bureau of Customs — by mandate not only of the Provisional Constitution, supra, but
also of the various Executive Orders decreed by the Chief Executive in her capacity
as sole lawmaking authority under the 1986-1987 revolutionary government. It should
also be noted that under the present Constitution, there is a recognition, albeit
implied, that a government reorganization may be legitimately undertaken, subject
to certain conditions.

It should also be noted that under the new Constitution, as under the 1973 Charter,
"any decision, order, or ruling of each Commission may be brought to the Supreme
Court on certiorari," 38 which, as Aratuc tells us, "technically connotes something less
than saying that the same 'shall be subject to review by the Supreme Court,'
" 39 which in turn suggests an appeal by petition for review under Rule 45. Therefore,
our jurisdiction over cases emanating from the Civil Service Commission is limited to
complaints of lack or excess of jurisdiction or grave abuse of discretion tantamount to
lack or excess of jurisdiction, complaints that justify certiorari under Rule 65.

While Republic Act No. 6656 states that judgments of the Commission are "final and
executory"40 and hence, unappealable, under Rule 65, certiorari precisely lies in the
absence of an appeal.

Finally, Arroyo is not necessarily incompatible with Palma-Fernandez (or Esguerra).

As we have demonstrated, reorganization under the aegis of the 1987 Constitution is

not as stern as reorganization under the prior Charter. Whereas the latter, sans the
President's subsequently imposed constraints, envisioned a purgation, the same
cannot be said of the reorganization inferred under the new Constitution because,
precisely, the new Constitution seeks to usher in a democratic regime. But even if we
concede ex gratia argumenti that Section 16 is an exception to due process and no-
removal-"except for cause provided by law" principles enshrined in the very same
1987 Constitution, 79 which may possibly justify removals "not for cause," there is no
contradiction in terms here because, while the former Constitution left the axe to fall
where it might, the present organic act requires that removals "not for cause" must be
as a result of reorganization. As we observed, the Constitution does not provide for
"automatic" vacancies. It must also pass the test of good faith — a test not obviously
required under the revolutionary government formerly prevailing, but a test well-
established in democratic societies and in this government under a democratic
Charter.

When, therefore, Arroyo permitted a reorganization under Executive Order No. 127
after the ratification of the 1987 Constitution, Arroyo permitted a reorganization
provided that it is done in good faith. Otherwise, security of tenure would be an
insuperable implement. 80

Reorganizations in this jurisdiction have been regarded as valid provided they are
pursued in good faith. 81 As a general rule, a reorganization is carried out in "good
faith" if it is for the purpose of economy or to make bureaucracy more efficient. In
that event, no dismissal (in case of a dismissal) or separation actually occurs because
the position itself ceases to exist. And in that case, security of tenure would not be a
Chinese wall. Be that as it may, if the "abolition," which is nothing else but a
separation or removal, is done for political reasons or purposely to defeat sty of
tenure, or otherwise not in good faith, no valid "abolition' takes place and whatever
"abolition' is done, is void ab initio. There is an invalid "abolition" as where there is
merely a change of nomenclature of positions, 82 or where claims of economy are
belied by the existence of ample funds. 83

It is to be stressed that by predisposing a reorganization to the yardstick of good faith,

we are not, as a consequence, imposing a "cause" for restructuring. Retrenchment in
the course of a reorganization in good faith is still removal "not for cause," if by
"cause" we refer to "grounds" or conditions that call for disciplinary action.**

Good faith, as a component of a reorganization under a constitutional regime, is

judged from the facts of each case. However, under Republic Act No. 6656, we are
told:

SEC. 2. No officer or employee in the career service shall be removed except

for a valid cause and after due notice and hearing. A valid cause for removal
exists when, pursuant to a bona fide reorganization, a position has been
abolished or rendered redundant or there is a need to merge, divide, or
consolidate positions in order to meet the exigencies of the service, or other
lawful causes allowed by the Civil Service Law. The existence of any or some
 of the following circumstances may be considered as evidence of bad faith
in the removals made as a result of reorganization, giving rise to a claim for
reinstatement or reappointment by an aggrieved party:

(a) Where there is a significant increase in the number of positions in the new
staffing pattern of the department or agency concerned;

(b) Where an office is abolished and another performing substantially the

same functions is created;

(c) Where incumbents are replaced by those less qualified in terms of status of
appointment, performance and merit;

(d) Where there is a reclassification of offices in the department or agency

concerned and the reclassified offices perform substantially the same
functions as the original offices;

(e) Where the removal violates the order of separation provided in Section 3
hereof.

Accordingly, with respect to Deputy Commissioners Cesar Dario and Vicente Feria,
Jr., Commissioner Mison could not have validly terminated them, they being
Presidential appointees.

The President could have validly removed government employees, elected or

appointed, without cause but only before the effectivity of the 1987 Constitution on
February 2, 1987 (De Leon v. Esguerra, supra; Palma-Fernandez vs. De la Paz, supra);
in this connection, Section 59 (on non-reappointment of incumbents) of Executive
Order No. 127 cannot be a basis for termination;

In such a case, dismissed employees shall be paid separation and retirement benefits
or upon their option be given reemployment opportunities (CONST. [1987], art. XVIII,
sec. 16; Rep. Act No. 6656, sec. 9);

From February 2, 1987, the State does not lose the right to reorganize the
Government resulting in the separation of career civil service employees [CONST.
(1987), supra] provided, that such a reorganization is made in good faith. (Rep. Act
No. 6656)

 AIDA D. EUGENIO vs. CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. &
HON. SALVADOR ENRIQUEZ, JR., G.R. No. 115863 March 31, 1995

It cannot be disputed, therefore, that as the CESB was created by law, it can only be
abolished by the legislature. This follows an unbroken stream of rulings that the
creation and abolition of public offices is primarily a legislative function. As aptly
summed up in AM JUR 2d on Public Officers and
Employees, (63 AM JUR 2d section 30).

Except for such offices as are created by the Constitution, the creation of
public offices is primarily a legislative function. In so far as the legislative power
in this respect is not restricted by constitutional provisions, it supreme, and the
legislature may decide for itself what offices are suitable, necessary, or
convenient. When in the exigencies of government it is necessary to create
and define duties, the legislative department has the discretion to determine
whether additional offices shall be created, or whether these duties shall be
attached to and become ex-officio duties of existing offices. An office
created by the legislature is wholly within the power of that body, and it may
prescribe the mode of filling the office and the powers and duties of the
incumbent, and if it sees fit, abolish the office.

As read together, the inescapable conclusion is that respondent Commission's power

to reorganize is limited to offices under its control as enumerated in Section 16.
 Under the Administrative Code of 1987, the purpose of attaching one functionally
inter-related government agency to another is to attain "policy and program
coordination."

 AQUILINO T. LARIN vs.THE EXECUTIVE SECRETARY, SECRETARY OF FINANCE,

COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE AND THE COMMITTEE CREATED TO
INVESTIGATE THE ADMINISTRATIVE COMPLAINT AGAINST AQUILINO T. LARIN, COMPOSED
OF FRUMENCIO A. LAGUSTAN, JOSE B. ALEJANDRINO AND JAIME M. MAZA, G.R. No.
112745 October 16, 1997

We are not unaware of the rule that since 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. (Police Commission vs. Lood, No. L-34230, March 31,
1980 , 96 SCRA 819; Office of the Court Administrator vs. Enriquez, A.M. No. P-89-290,
January 29, 1993, 218 SCRA 1). However, the circumstantial setting of the instant case
sets it miles apart from the foregoing rule and placed it well within the exception.
Corollarily, where the very basis of the administrative case against petitioner is his
conviction in the criminal action which was later on set aside by this Court upon a
categorical and clear finding that the acts for which he was administratively held
liable are not unlawful and irregular, the acquittal of the petitioner in the criminal
case necessarily entails the dismissal of the administrative action against him,
because in such a case, there is no more basis nor justifiable reason to maintain the
administrative suit.

The rule is well settled that the essence of due process in administrative proceedings
is that a party be afforded a reasonable opportunity to be heard and to submit any
evidence he may have in support of his defense. (Midas Touch Food Corp. vs. NLRC, G.R. No.
111639, July 29, 1996, 259 SCRA 652)

Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:

Sec. 20. Residual Powers. — Unless Congress provides otherwise, the President
shall exercise such other powers and functions vested in the President which
are provided for under the laws and which are not specifically enumerated
above or which are not delegated by the President in accordance with law.
(emphasis ours)

This provision speaks of such other powers vested in the President under the law.
What law then which gives him the power to reorganize? It is Presidential Decree No.
1772 9 which amended Presidential Decree No. 1416. These decrees expressly grant
the President of the Philippines 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. The validity of these two decrees
are unquestionable. The 1987 Constitution clearly provides that "all laws, decrees,
executive orders, proclamations, letters of instructions and other executive issuances
not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked." 10 So far, there is yet no law amending or repealing said decrees.
Significantly, the Constitution itself recognizes future reorganizations in the
government as what is revealed in Section 16 of Article XVIII, thus:

Sec. 16. Career civil service employees separated from service not for cause
but as a result of the . . . reorganization following the ratification of this
Constitution shall be entitled to appropriate separation pay . . .

 BUKLOD NG KAWANING EIIB, CESAR POSADA, REMEDIOS G. PRINCESA, BENJAMIN

KHO, BENIGNO MANGA, LULU MENDOZA, vs. HON. EXECUTIVE SECRETARY RONALDO
B. ZAMORA, HON. SECRETARY JOSE PARDO, DEPARTMENT OF FINANCE, HON.
SECRETARY BENJAMIN DIOKNO, DEPARTMENT OF BUDGET AND MANAGEMENT, HON.
SECRETARY ARTEMIO TUQUERO, DEPARTMENT OF JUSTICE, G.R. Nos. 142801-802,
10 July 2001

the power to abolish a public office is lodged with the legislature. (Eugenio vs CSC,
1995)
This proceeds from the legal precept that the power to create includes the
power to destroy. A public office is either created by the Constitution, by statute,
or by authority of law. (Cruz, The Law of Public Officers, 1999 Ed., p. 4)Thus, except where the
office was created by the Constitution itself, it may be abolished by the same
legislature that brought it into existence. (Cruz, The Law of Public Officers, 1999 Ed., p. 199)
The exception, however, is that as far as bureaus, agencies or offices in the
executive department are concerned, the President's power of control may
justify him to inactivate the functions of a particular office, (Martin, Philippine
Political Law, p. 276) or certain laws may grant him the broad authority to carry
out reorganization measures. [Larin v. Executive Secretary, 280 SCRA 713 (1997)]

Lastly, we hold that petitioners' right to security of tenure is not violated. Nothing is
better settled in our law than that the abolition of an office within the
competence of a legitimate body if done in good faith suffers from no infirmity.
Valid abolition of offices is neither removal nor separation of the incumbents.
(Mendoza v. Quisumbing, 1990).

Reorganizations in this jurisdiction have been regarded as valid provided they are
pursued in good faith. As a general rule, a reorganization is carried out in "good
faith" if it is for the purpose of economy or to make bureaucracy more efficient. In
that event, no dismissal (in case of dismissal) or separation actually occurs
because the position itself ceases to exist. And in that case, security of tenure
would not be a Chinese wall. Be that as it may, if the 'abolition,' which is nothing
else but a separation or removal, is done for political reasons or purposely to
defeat security of tenure, otherwise not in good faith, no valid 'abolition' takes
and whatever 'abolition' is done, is void ab initio. There is an invalid 'abolition' as
where there is merely a change of nomenclature of positions, or where claims of
economy are belied by the existence of ample funds. (Dario v. Mison, 1989)