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CIVIL PROCEDURE

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BALICAS vs. FFIB, OFFICE OF

THE OMBUDSMAN
MARCH 26, 2011 ~ LEAVE A COMMENT

BALICAS vs. FFIB, OFFICE OF THE OMBUDSMAN

G. R. No. 145972
March 23, 2004
FACTS: In the development of the Cherry Hills Subdivision (CHS), Philjas applied
for the issuance of ECC from the DENR-Region IV
Respondent BALICAS, PENRO senior environmental management
specialist, monitored the implementation of the CHS Project Development to check
compliance with the terms and conditions in the ECC. She conducted another
monitoring on the project for the same purpose. In both instances, she noted that the
project was still in the construction stage hence, compliance with the stipulated
conditions could not be fully assessed, and therefore, a follow-up monitoring is
proper. It appeared from the records that this August 23, 1995 monitoring inspection
was the last one conducted by the DENR.
Immediately after the tragic incident on August 3, 1999, a fact-finding investigation
was conducted by the Office of the Ombudsman through its Fact-Finding and
Intelligence Bureau (FFIB), which duly filed an administrative complaint with the
Office of the Ombudsman against several officials of the Housing and Land Use
Regulatory Board (HLURB), Department of Environment and Natural Resources
(DENR), and the local government of Antipolo.

The charge against petitioner involved a supposed failure on her part to monitor and
inspect the development of CHS, which was assumed to be her duty as DENR senior
environmental management specialist assigned in the province of Rizal.

For her part, petitioner belied allegations that monitoring was not conducted, claiming
that she monitored the development of CHS as evidenced by 3 monitoring reports
.She further claimed good faith and exercise of due diligence, insisting that the
tragedy was a fortuitous event. She reasoned that the collapse did not occur in Cherry
Hills, but in the adjacent mountain eastern side of the subdivision.

The Office of the Ombudsman rendered a decision imposing upon petitioner the
supreme penalty of dismissal from office for gross neglect of duty.

Petitioner seasonably filed a petition for review of the Ombudsmans decision with the
CA. The Court of Appeals dismissed the petition for lack of merit and affirmed the
appealed decision. It found that the landslide was a preventable occurrence and that
petitioner was guilty of gross negligence in failing to closely monitor Philjas
compliance with the conditions of the ECC given the known inherent instability of the
ground where the subdivision was developed. The appellate court likewise denied
petitioners motion for reconsideration.
This petition for review on certiorari
ISSUE: WON Balicas is guilty of gross neglect of duty
HELD: the petition is hereby GRANTED, The CA decision affirming the
Ombudsmans dismissal of petitioner IGNACIA BALICAS from office is
REVERSED and SET ASIDE, and petitioners REINSTATEMENT to her position
with back pay and without loss of seniority rights is hereby ordered.
NO
In order to ascertain if there had been gross neglect of duty, we have to look at the
lawfully prescribed duties of petitioner. Unfortunately, DENR regulations are silent
on the specific duties of a senior environmental management specialist. Internal
regulations merely speak of the functions of the Provincial Environment and Natural
Resources Office (PENRO) to which petitioner directly reports.

Tthe monitoring duties of the PENRO mainly deal with broad environmental
concerns, particularly pollution abatement. This general monitoring duty is
applicable to all types of physical developments that may adversely impact on the
environment, whether housing projects, industrial sites, recreational facilities, or
scientific undertakings.
However, a more specific monitoring duty is imposed on the HLURB as the sole
regulatory body for housing and land development.

P.D. No. 1586 prescribes the following duties on the HLURB (then Ministry of
Human Settlements) in connection with environmentally critical projects requiring an
ECC:

SECTION 4. Presidential Proclamation of Environmentally Critical Areas and

Projects. The President of the Philippines may, on his own initiative or upon
recommendation of the National Environment Protection Council, by proclamation
declare certain projects, undertakings or areas in the country as environmentally
critical. No person, partnership or corporation shall undertake or operate any such
declared environmentally critical project or area without first securing an
Environmental Compliance Certificate issued by the President or his duly authorized
representative. For the proper management of said critical project or area, the
President may by his proclamation reorganize such government offices, agencies,
institutions, corporations or instrumentalities including the re-alignment of
government personnel, and their specific functions and responsibilities.
For the same purpose as above, the Ministry of Human Settlements [now HLURB]
shall:
(a) prepare the proper land or water use pattern for said critical project(s) or area(s);

(b) establish ambient environmental quality standards;

(c) develop a program of environmental enhancement or protective measures

against calamitous factors such as earthquake, floods, water erosion and others;
and
(d) perform such other functions as may be directed by the President from time to
time.

The legal duty to monitor housing projects, like the CHP, against calamities such as
landslides due to continuous rain, is clearly placed on the HLURB, not on the
petitioner as PENRO senior environmental management specialist. In fact, the
law imposes no clear and direct duty on petitioner to perform such narrowly defined
monitoring function.
IRON AND STEEL AUTHORITY vs. CA and
MARIA CRISTINA
FERTILIZER CORPORATION
MARCH 26, 2011 ~ LEAVE A COMMENT

IRON AND STEEL AUTHORITY vs. CA and MARIA CRISTINA

FERTILIZER CORPORATION
G.R. No. 102976
October 25, 1995
FACTS: Iron and Steel Authority (ISA) was created by P.D. No. 272 in order,
generally, to develop and promote the iron and steel industry in the Philippines. The
list of powers and functions of the ISA included the following: xx
Sec. 4. Powers and Functions. The authority shall have the following powers and
functions: xx
(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such use
of the States power is necessary to implement the construction of capacity which is
needed for the attainment of the objectives of the Authority; xx
The National Steel Corporation (NSC) then a wholly owned subsidiary of the National
Development Corporation which is itself an entity wholly owned by the National
Government, embarked on an expansion program embracing, among other things, the
construction of an integrated steel mill in Iligan City. Pursuant to the expansion
program of the NSC, Proc. No. 2239 was issued by the President of the Philippines
withdrawing from sale or settlement a large tract of public located in Iligan City, and
reserving that land for the use and immediate occupancy of NSC.

Since certain portions of the public land subject matter Proclamation No. 2239 were
occupied by a non-operational chemical fertilizer plant and related facilities owned by
Maria Cristina Fertilizer Corporation (MCFC), Letter of Instruction (LOI), No.
1277, was issued directing the NSC to negotiate with the owners of MCFC, for and
on behalf of the Government, for the compensation of MCFCs present occupancy
rights on the subject land. LOI No. 1277 also directed that should NSC and private
respondent MCFC fail to reach an agreement within a period of sixty (60) days from
the date of LOI No. 1277, petitioner ISA was to exercise its power of eminent
domain under P.D. No. 272 and to initiate expropriation proceedings in respect of
occupancy rights of private respondent MCFC relating to the subject public land as
well as the plant itself and related facilities and to cede the same to the NSC.
Negotiations between NSC and private respondent MCFC did fail. Accordingly ISA
commenced eminent domain proceedings against MCFC in the RTC of Iligan City,
praying that it be placed in possession of the property involved upon depositing in
court representing ten percent (10%) of the declared market values of that property.

A writ of possession was issued by the trial court in favor of ISA. ISA in turn placed
NSC in possession and control of the land occupied by MCFCs fertilizer plant
installation.

The case proceeded to trial. While the trial was ongoing, however, the statutory
existence of petitioner ISA expired. MCFC then filed a motion to dismiss,
contending that no valid judgment could be rendered against ISA which had ceased to
be a juridical person. Petitioner ISA filed its opposition to this motion.
The trial court granted MCFCs motion to dismiss and did dismiss the case. The
dismissal was anchored on the provision of the Rules of Court stating that only
natural or juridical persons or entities authorized by law may be parties in a civil
case.
Petitioner ISA moved for reconsideration which the trial court denied.

ISA went on appeal to the CA, which affirmed the order of dismissal of the trial court.
At the same time, however, the Court of Appeals held that it was premature for the
trial court to have ruled that the expropriation suit was not for a public purpose,
considering that the parties had not yet rested their respective cases.

Hence this Petition for Review.

ISSUE: WON the RP is entitled to be substituted for ISA in view of the expiration of
ISAs term.
HELD: The Decision of the CA to the extent that it affirmed the trial courts order
dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE and
the case is REMANDED to the court a quo which shall allow the substitution of the
RPfor petitioner ISA
YES
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:

Sec. 1. Who May Be Parties. Only natural or juridical persons or entities

authorized by law may be parties in a civil action.
Examination of the statute which created petitioner ISA shows that ISA falls under
category (b) above. P.D. No. 272, as already noted, contains express authorization to
ISA to commence expropriation proceedings like those here involved. It should also
be noted that the enabling statute of ISA expressly authorized it to enter into certain
kinds of contracts for and in behalf of the Government in the following terms: xx
(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the
government, for the bulk purchase of materials, supplies or services for any sectors in
the industry, and to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce operating costs of such
sector; xxx
Clearly, ISA was vested with some of the powers or attributes normally associated
with juridical personality. There is, however, no provision in P.D. No. 272
recognizing ISA as possessing general or comprehensive juridical personality
separate and distinct from that of the Government.
We consider that the ISA is properly regarded as an agent or delegate of the RP. The
Republic itself is a body corporate and juridical person vested with the full panoply of
powers and attributes which are compendiously described as legal personality. The
relevant definitions are found in the Administrative Code of 1987:

Sec. 2. General Terms Defined. Unless the specific words of the text, or the context
as a whole, or a particular statute, require a different meaning:
(1) Government of the RPrefers to the corporate governmental entity through which
the functions of government are exercised throughout the Philippines, including, save
as the contrary appears from the context, the various arms through which political
authority is made effective in the Philippines, whether pertaining to the autonomous
regions, the provincial, city, municipal or barangay subdivisions or other forms of
local government.
xxx xxx xxx

(4) Agency of the Government refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or
controlled corporation, or a local government or a distinct unit therein.
xxx xxx xxx

(10) Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled
corporations.
xxx xxx xxx

When the statutory term of a non-incorporated agency expires, the powers, duties and
functions as well as the assets and liabilities of that agency revert back to, and are re-
assumed by, the RP, in the absence of special provisions of law specifying some other
disposition thereof such as, e.g., devolution or transmission of such powers, duties,
functions, etc. to some other identified successor agency or instrumentality of the RP.
When the expiring agency is an incorporated one, the consequences of such expiry
must be looked for, in the first instance, in the charter of that agency and, by way of
supplementation, in the provisions of the Corporation Code.
Since, in the instant case, ISA is a non-incorporated agency or instrumentality of the
Republic, its powers, duties, functions, assets and liabilities are properly regarded as
folded back into GRP and hence assumed once again by the Republic, no special
statutory provision having been shown to have mandated succession thereto by some
other entity or agency of the Republic.
The principal or the real party in interest is thus the RP and not the NSC, even though
the latter may be an ultimate user of the properties involved should the condemnation
suit be eventually successful.
From the foregoing premises, it follows that the RP is entitled to be substituted in the
expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA
having expired. Put a little differently, the expiration of ISAs statutory term did not
by itself require or justify the dismissal of the eminent domain proceedings.

In E.B. Marcha, the Court also stressed that to require the Republic to commence all
over again another proceeding, as the trial court and CA had required, was to generate
unwarranted delay and create needless repetition of proceedings:
NOTES:
1. Since, as we have held above, the powers and functions of ISA have reverted to the
RP upon the termination of the statutory term of ISA, the question should be
addressed whether fresh legislative authority is necessary before the RP may continue
the expropriation proceedings initiated by its own delegate or agent.

While the power of eminent domain is, in principle, vested primarily in the legislative
department of the government, we believe and so hold that no new legislative act is
necessary should the Republic decide, upon being substituted for ISA, in fact to
continue to prosecute the expropriation proceedings. For the legislative authority, a
long time ago, enacted a continuing or standing delegation of authority to the
President of the Philippines to exercise, or cause the exercise of, the power of eminent
domain on behalf of the Government of the Republic of the Philippines. The 1917
Revised Administrative Code, which was in effect at the time of the commencement
of the present expropriation proceedings before the Iligan RTC , provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. In addition
to his general supervisory authority, the President of the Philippines shall have such
other specific powers and duties as are expressly conferred or imposed on him by law,
and also, in particular, the powers and duties set forth in this Chapter.
Among such special powers and duties shall be: xx

(h) To determine when it is necessary or advantageous to exercise the right of eminent

domain in behalf of the Government of the Philippines; and to direct the Secretary of
Justice, where such act is deemed advisable, to cause the condemnation proceedings
to be begun in the court having proper jurisdiction. xx
The Revised Administrative Code of 1987 currently in force has substantially
reproduced the foregoing provision in the following terms:

Sec. 12. Power of eminent domain. The President shall determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of the
National Government, and direct the Solicitor General, whenever he deems the action
advisable, to institute expopriation proceedings in the proper court. (Emphasis
supplied)
In the present case, the President, exercising the power duly delegated under both the
1917 and 1987 Revised Administrative Codes in effect made a determination that it
was necessary and advantageous to exercise the power of eminent domain in behalf of
the Government of the Republic and accordingly directed the SG to proceed with the
suit. 17
2. It is argued by private respondent MCFC that, because Congress after becoming
once more the depository of primary legislative power, had not enacted a statute
extending the term of ISA, such non-enactment must be deemed a manifestation of a
legislative design to discontinue or abort the present expropriation suit. We find this
argument much too speculative; it rests too much upon simple silence on the part of
Congress and casually disregards the existence of Section 12 of the 1987
Administrative Code already quoted above.

3. Other contentions are made by private respondent MCFC, such as, that the
constitutional requirement of public use or public purpose is not present in the
instant case, and that the indispensable element of just compensation is also absent.
We agree with the Court of Appeals in this connection that these contentions, which
were adopted and set out by the RTC in its order of dismissal, are premature and are
appropriately addressed in the proceedings before the trial court. Those proceedings
have yet to produce a decision on the merits, since trial was still on going at the time
the RTC precipitously dismissed the expropriation proceedings. Moreover, as a
pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded an
opportunity to determine whether or not, or to what extent, the proceedings should be
continued in view of all the subsequent developments in the iron and steel sector of
the country including, though not limited to, the partial privatization of the NSC
LUZON DEVELOPMENT BANK vs. ASSO.
OF LDB EMPLOYEES and GARCIA
MARCH 26, 2011 ~ LEAVE A COMMENT

LUZON DEVELOPMENT BANK vs. ASSO. OF LDB EMPLOYEES and

GARCIA
G.R. No. 120319
October 6, 1995
FACTS: From a submission agreement of the LDB and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the
following issue:
Whether or not the company has violated the CBA provision and the MOA on
promotion.

At a conference, the parties agreed on the submission of their respective Position

Papers. Atty. Garcia, in her capacity as Voluntary Arbitrator, received ALDBEs
Position Paper ; LDB, on the other hand, failed to submit its Position Paper despite a
letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no
Position Paper had been filed by LDB.

Without LDBs Position Paper, the Voluntary Arbitrator rendered a decision

disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the CBA
provision nor the MOA on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of
the Voluntary Arbitrator and to prohibit her from enforcing the same.
ISSUE: WON a voluntary arbiters decision is appealable to the CA and not the SC
HELD: the Court resolved to REFER this case to the Court of Appeals.
YES

The jurisdiction conferred by law on a voluntary arbitrator or a panel of such

arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and
the appellate jurisdiction of the NLRC for that matter. The (d)ecision, awards, or
orders of the Labor Arbiter are final and executory unless appealed to the
Commission Hence, while there is an express mode of appeal from the decision of
a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the
decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more
often than not, elevated to the SC itself on a petition for certiorari, in effect equating
the voluntary arbitrator with the NLRC or the CA. In the view of the Court, this is
illogical and imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that
the judgments of courts and awards of quasi-judicial agencies must become final
at some definite time, this Court ruled that the awards of voluntary arbitrators
determine the rights of parties; hence, their decisions have the same legal effect as
judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., this
Court ruled that a voluntary arbitrator by the nature of her functions acts in a quasi-
judicial capacity. Under these rulings, it follows that the voluntary arbitrator, whether
acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to
the latter.
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the
Court of Appeals shall exercise:
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of RTC s and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators
may not strictly be considered as a quasi-judicial agency, board or commission, still
both he and the panel are comprehended within the concept of a quasi-judicial
instrumentality.
An instrumentality is anything used as a means or agency. Thus, the terms
governmental agency or instrumentality are synonymous in the sense that either
of them is a means by which a government acts, or by which a certain government act
or function is performed. The word instrumentality, with respect to a state,
contemplates an authority to which the state delegates governmental power for the
performance of a state function. An individual person, like an administrator or
executor, is a judicial instrumentality in the settling of an estate, in the same manner
that a sub-agent appointed by a bankruptcy court is an instrumentality of the court, and
a trustee in bankruptcy of a defunct corporation is an instrumentality of the state.
The voluntary arbitrator no less performs a state function pursuant to a governmental
power delegated to him under the provisions therefor in the Labor Code and he falls,
therefore, within the contemplation of the term instrumentality in the aforequoted
Sec. 9 of B.P. 129. The fact that his functions and powers are provided for in the
Labor Code does not place him within the exceptions to said Sec. 9 since he is a
quasi-judicial instrumentality as contemplated therein.

It will be noted that, although the Employees Compensation Commission is also

provided for in the Labor Code, Circular No. 1-91, which is the forerunner of the
present Revised Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the CA under the foregoing rationalization, and this
was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129. A
fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should
likewise be appealable to the CA, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards
and commissions enumerated therein.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No.
876, also known as the Arbitration Law, arbitration is deemed a special proceeding of
which the court specified in the contract or submission, or if none be specified, the
RTC for the province or city in which one of the parties resides or is doing business,
or in which the arbitration is held, shall have jurisdiction.
In effect, this equates the award or decision of the voluntary arbitrator with that of the
RTC. Consequently, in a petition for certiorari from that award or decision, the CA
must be deemed to have concurrent jurisdiction with the SC. As a matter of policy,
this Court shall henceforth remand to the Court of Appeals petitions of this nature for
proper disposition.
NOTES:
1. In labor law context, arbitration is the reference of a labor dispute to an impartial
third person for determination on the basis of evidence and arguments presented by
such parties who have bound themselves to accept the decision of the arbitrator as
final and binding. Arbitration may be classified, on the basis of the obligation on
which it is based, as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by
the government to forego their right to strike and are compelled to accept the
resolution of their dispute through arbitration by a third party. 1The essence of
arbitration remains since a resolution of a dispute is arrived at by resort to a
disinterested third party whose decision is final and binding on the parties, but in
compulsory arbitration, such a third party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is
made, pursuant to a voluntary arbitration clause in their collective agreement, to an
impartial third person for a final and binding resolution. 2Ideally, arbitration awards
are supposed to be complied with by both parties without delay, such that once an
award has been rendered by an arbitrator, nothing is left to be done by both parties but
to comply with the same. After all, they are presumed to have freely chosen
arbitration as the mode of settlement for that particular dispute. Pursuant thereto, they
have chosen a mutually acceptable arbitrator who shall hear and decide their case.
Above all, they have mutually agreed to de bound by said arbitrators decision.
2. Article 261 of the Labor Code accordingly provides for exclusive original
jurisdiction of such voluntary arbitrator or panel of arbitrators over

(1) the interpretation or implementation of the CBA and

(2) the interpretation or enforcement of company personnel policies.

Article 262 authorizes them, but only upon agreement of the parties, to exercise
jurisdiction over other labor disputes.

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction
over the following enumerated cases:

. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and

maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a
claim for reinstatement.

LEVERIZA et al vs. IAC, Mobil oil and CAA

MARCH 26, 2011 ~ LEAVE A COMMENT

LEVERIZA et al vs. IAC, Mobil oil and CAA

G.R. No. L-66614
January 25, 1988

FACTS: Around three contracts of lease resolve the basic issues in the instant case:
Contract A a lease contract of April 2, 1965 between the Republic of the
Philippines, represented by Civil Aeronautics Administration (CAA) and. Leveriza
over a parcel of land containing an area of 4,502 square meters, for 25 years.
Contract B a lease contract (in effect a sublease) of May 21, 1965 between
Leveriza and Mobil Oil Philippines, Inc., over the same parcel of land, but reduced to
3,000 square meters for 25 years; and
Contract C a lease contract of June 1, 1968 between defendant CAA and plaintiff
Mobil Oil over the same parcel of land, but reduced to 3,000 square meters, for 25
years.
There is no dispute among the parties that the subject matter of the three contracts of
lease above mentioned, Contract A, Contract B, and Contract C, is the same parcel of
land, with the noted difference that while in Contract A, the area leased is 4,502
square meters, in Contract B and Contract C, the area has been reduced to 3,000
square meters.

It is important to note, for a clear understanding of the issues involved, that it appears
that defendant CAA as LESSOR, leased the same parcel of land, for durations of time
that overlapped to two lessees, to wit: (1) Leveriza and Mobil Oil, and the latter, as
LESSEE, leased the same parcel of land from two lessors, to wit: (1) Leveriza and (2)
CAA for durations of time that also overlapped.

Leveriza, the lessee in Contract A and the lessor in Contract B, is now deceased. This
is the reason why her successor-in-interest, her heirs, are sued. For purposes of
brevity, these defendants shall be referred to hereinafter as Defendants Leveriza.

Mobil Oil seeks the rescission or cancellation of Contract A and Contract B on the
ground that Contract A from which Contract B is derived and depends has already
been cancelled by the defendant CAA and maintains that Contract C with the
defendant CAA is the only valid and subsisting contract insofar as the parcel of land,
subject to the present litigation is concerned.

Defendants Leverizas claim that Contract A which is their contract with CAA has
never been legally cancelled and still valid and subsisting; that it is Contract C
between plaintiff and defendant CAA which should be declared void.

CAA asserts that Contract A is still valid and subsisting because its cancellation by
Jurado was ineffective and asks the court to annul Contract A because of the violation
committed by Leveriza in leasing the parcel of land to plaintiff by virtue of Contract B
without the consent of CAA. CAA further asserts that Contract C not having been
approved by the Director of Public Works and Communications is not valid.

After trial, the lower courts rendered judgment:

1. Declaring Contract A as having been validly cancelled on June 28, 1966, and has
therefore ceased to have any effect as of that date;

2. Declaring that Contract B has likewise ceased to have any effect as of June 28,
1966 because of the cancellation of Contract A;

3. Declaring that Contract C was validly entered into on June 1, 1968, and that it is
still valid and subsisting;

CAA filed a Motion for Reconsideration, averring that because the lot lease was
properly registered in the name of the Republic of the Philippines, it was only the
President of the Philippines or an officer duly designated by him who could execute
the lease contract pursuant to Sec. 567 of the Revised Administrative Code; that the
Airport General Manager has no authority to cancel Contract A, the contract entered
into between the CAA and Leveriza, and that Contract C between the CAA and Mobil
was void for not having been approved by the Secretary of Public Works and
Communications. Said motion was however denied.

On appeal, the IAC affirmed in toto the decision of the lower court. Hence this
petition for Review on certiorari.

ISSUE: There is no dispute that Contract A at the time of its execution was a valid
contract. The issue therefore is whether or not said contract is still subsisting after its
cancellation by CAA on the ground of a sublease executed by petitioners with Mobil
Oil (CONTRACT B) without the consent of CAA and the execution of another
contract of lease between CAA and Mobil Oil (CONTRACT C)
The issue narrows down to: WON there is a valid ground for the cancellation of
Contract A

HELD: The petition is DISMISSED for lack of merit and the decision of the Court of
Appeals appealed from is AFFIRMED in toto.
YES

Contract A was entered into by CAA as the lessor and the Leverizas as the lessee
specifically for the purpose of operating and managing a gasoline station by the
latter, to serve vehicles going in and out of the airport.

As regards prior consent of the lessor to the transfer of rights to the leased premises,
the provision of paragraph 7 of said Contract reads in full:

7. The Party of the Second part may transfer her rights to the leased premises but in
such eventuality, the consent of the Party of the First Part shall first be secured. In any
event, such transfer of rights shall have to respect the terms and conditions of this
agreement.

Paragraph 8 provides the sanction for the violation of the above-mentioned terms and
conditions of the contract. Said paragraph reads:

8. Failure on the part of the Party of the Second Part to comply with the terms and
conditions herein agreed upon shall be sufficient for revocation of this contract by
the Party of the First Part without need of judicial demand.
It is not disputed that the Leverizas (lessees) entered into a contract of sublease
(Contract B) with Mobil Oil without the consent of CAA (lessor). The cancellation of
the contract was made in a letter by Jurado, Airport General Manager of CAA
addressed to Rosario Leveriza.
Respondent Leverizas and the CAA assailed the validity of such cancellation,
claiming that the Airport General Manager had no legal authority to make the
cancellation. They maintain that it is only the (1)Secretary of Public Works and
Communications, acting for the President, or by delegation of power, the (2)Director
of CCA who could validly cancel the contract. Petitioners argue that cancelling or
setting aside a contract approved by the Secretary is, in effect, repealing an act of the
Secretary which is beyond the authority of the Administrator.

Such argument is untenable. The terms and conditions under which such revocation or
cancellation may be made, have already been specifically provided for in Contract
A which has already been approved by the Department Head, It is evident that in
the implementation of aforesaid contract, the approval of said Department Head is no
longer necessary if not redundant
NOTES:
1. It is further contended that even granting that such cancellation was effective, a
subsequent billing by the Accounting Department of the CAA has in effect waived or
nullified the rescission of Contract A.

The billing of the petitioners by the Accounting Department of the CAA if indeed it
transpired, after the cancellation of Contract A is obviously an error. However, this
Court has already ruled that the mistakes of government personnel should not affect
public interest.

2. Petitioners further assail the interpretation of Contract A, claiming that Contract

B was a mere sublease to Mobil Oil and requires no prior consent of CAA to perfect
the same. Citing Article 1650 of the Civil Code, they assert that the prohibition to
sublease must be expressed and cannot be merely implied or inferred.
As correctly found by the Court of Appeals, petitioners in asserting the non- necessity
for a prior consent interprets the first sentence of paragraph 7 of Contract A to refer
to an assignment of lease under Article 1649 of the Civil Code and not to a mere
sublease. A careful scrutiny of said paragraph of Contract A clearly shows that it
speaks of transfer of rights of Rosario Leveriza to the leased premises and not to
assignment of the lease.

2. Petitioners likewise argued that it was contemplated by the parties to Contract A

that Mobil Oil would be the owner of the gasoline station it would construct on the
leased premises during the period of the lease, hence, it is understood that it must be
given a right to use and occupy the lot in question in the form of a sub-lease.

In Contract A, it was categorically stated that it is the lessee (petitioner) who will
manage and operate the gasoline station. The fact that Mobil Oil was mentioned in
that contract was clearly not intended to give approval to a sublease between
petitioners and said company but rather to insure that in the arrangements to be made
between them, it must be understood that after the expiration of the lease contract,
whatever improvements have been constructed in the leased premises shall be
relinquished to CAA. Thus, this Court held that the primary and elementary rule of
construction of documents is that when the words or language thereof is clear and
plain or readily understandable by any ordinary reader thereof, there is absolutely no
room for interpretation or construction anymore.

3. <ADMINISTRATIVE LAW>Finally, petitioners contend that the administrator of

CAA cannot execute without approval of the Department Secretary, a valid contract
of lease over real property owned by the Republic of the Philippines, citing the
Revised Administrative Code, which provide that Under 567 of the Revised
Administrative Code, such contract of lease must be executed:
(1) by the President of the Philippines, or
(2) by an officer duly designated by him or

(3) by an officer expressly vested by law.

On the other hand, respondent CAA avers that the CAA Administrator has the
authority to lease real property belonging to the RP under its administration even
without the approval of the Secretary of Public Works and Communications, which
authority is expressly vested in it by law, more particularly Section 32 (24)
of Republic Act 776, which reads:
Sec. 32. Powers and Duties of the Administrator. Subject to the general control and
supervision of the Department Head, the Administrator shall have, among others, the
following powers and duties:
xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila
International Airport and all government aerodromes except those controlled or
operated by the Armed Forces of the Philippines including such power and duties as:
(b) to enter into, make and execute contracts of any kind with any person, firm, or
public or private corporation or entity; (c) to acquire, hold, purchase, or lease any
personal or real property; right of ways, and easements which may be proper or
necessary: Provided, that no real property thus acquired and any other real property of
the Civil Aeronautics Administration shall be sold without the approval of the
President of the Philippines.

There is no dispute that the Revised Administrative Code is a general law while
Republic Act 776 is a special law nor in the fact that the real property subject of the
lease in Contract C is real property belonging to the Republic of the Philippines.

It is readily apparent that in the case at bar, the CAA has the authority to enter into
Contracts of Lease for the government under the third category (Art. 567. )Thus, as
correctly ruled by the Court of Appeals, the CAA has the power to execute the deed or
contract involving leases of real properties belonging to the RP, not because it is an
entity duly designated by the President but because the said authority to execute the
same is, by law expressly vested in it, which in this case is RA 776.

Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator
(Director) of the CAA by reason of its creation and existence, administers properties
belonging to the RP and it is on these properties that the Administrator must exercise
his vast power and discharge his duty to enter into, make and execute contract of any
kind with any person, firm, or public or private corporation or entity and to acquire,
hold, purchase, or lease any personal or real property, right of ways and easements
which may be proper or necessary. (The exception, however, is the sale of properties
acquired by CAA or any other real properties of the same which must have the
approval of the President of the Philippines.) The Court of appeals took cognizance of
the striking absence of such proviso in the other transactions contemplated in
paragraph (24) and is convinced as we are, that the Director of the CAA does not
need the prior approval of the President or the Secretary of Public Works and
Communications in the execution of Contract C.
In this regard, this Court, ruled that another basic principle of statutory construction
mandates that general legislation must give way to special legislation on the same
subject, and generally be so interpreted as to embrace only cases in which the special
provisions are not applicable; that specific statute prevails over a general ; and that
where two statutes are of equal theoretical application to a particular case, the one
designed therefor specially should prevail.

MECANO vs.COA
MARCH 26, 2011 ~ LEAVE A COMMENT

MECANO vs.COA
G.R. No. 103982
December 11, 1992
FACTS: Mecano is a Director II of the NBI. He was hospitalized and on account of
which he incurred medical and hospitalization expenses, the total amount of which he
is claiming from the COA.
In a memorandum to the NBI Director, Director Lim requested reimbursement for his
expenses on the ground that he is entitled to the benefits under Section 699 of the
RAC, the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of
duty. When a person in the service of the national government of a province, city,
municipality or municipal district is so injured in the performance of duty as thereby
to receive some actual physical hurt or wound, the proper Head of Department may
direct that absence during any period of disability thereby occasioned shall be on full
pay, though not more than six months, and in such case he may in his discretion also
authorize the payment of the medical attendance, necessary transportation, subsistence
and hospital fees of the injured person. Absence in the case contemplated shall be
charged first against vacation leave, if any there be.
xxx xxx xxx

In case of sickness caused by or connected directly with the performance of some act
in the line of duty, the Department head may in his discretion authorize the payment
of the necessary hospital fees.

Director Lim then forwarded petitioners claim, to the Secretary of Justice. Finding
petitioners illness to be service-connected, the Committee on Physical Examination
of the Department of Justice favorably recommended the payment of petitioners
claim.

However, then Undersecretary of Justice Bello III returned petitioners claim to

Director Lim, having considered the statements of the Chairman of the COA to the
effect that the RAC being relied upon was repealed by the Administrative Code
of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73,
S. 1991 of then Secretary of Justice Drilon stating that the issuance of the
Administrative Code did not operate to repeal or abregate in its entirety the Revised
Administrative Code, including the particular Section 699 of the latter.
Director Lim transmitted anew Mecanos claim to then Undersecretary Bello for
favorable consideration; Secretary Drilon forwarded petitioners claim to the COA
Chairman, recommending payment of the same. COA Chairman however, denied
petitioners claim on the ground that Section 699 of the RAC had been repealed by the
Administrative Code of 1987, solely for the reason that the same section was not
restated nor re-enacted in the Administrative Code of 1987. He commented,
however, that the claim may be filed with the Employees Compensation
Commission, considering that the illness of Director Mecano occurred after the
effectivity of the Administrative Code of 1987.
Eventually, petitioners claim was returned by Undersecretary of Justice Montenegro
to Director Lim with the advice that petitioner elevate the matter to the Supreme
Court if he so desires.

Hence this petition for certiorari.

ISSUE: 1. WON the Administrative Code of 1987 repealed or abrogated Section 699
of the RAC

HELD: The Court resolves to GRANT the petition; respondent is hereby ordered to
give due course to petitioners claim for benefits
NO
The question of whether a particular law has been repealed or not by a subsequent law
is a matter of legislative intent. The lawmakers may expressly repeal a law by
incorporating therein a repealing provision which expressly and specifically cites the
particular law or laws, and portions thereof, that are intended to be repealed. A
declaration in a statute, usually in its repealing clause, that a particular and specific
law, identified by its number or title, is repealed is an express repeal; all others are
implied repeals
In the case of the two Administrative Codes in question, the ascertainment of whether
or not it was the intent of the legislature to supplant the old Code with the new Code
partly depends on the scrutiny of the repealing clause of the new Code. This provision
is found in Section 27, Book VII (Final Provisions) of the Administrative Code of
1987 which reads:

Sec. 27. Repealing Clause. All laws, decrees, orders, rules and regulations, or
portions thereof, inconsistent with this Code are hereby repealed or modified
accordingly.
The question that should be asked is: What is the nature of this repealing clause?
It is certainly not an express repealing clause because it fails to identify or designate
the act or acts that are intended to be repealed. Rather, it is an example of a general
repealing provision. It is a clause which predicates the intended repeal under the
condition that substantial conflict must be found in existing and prior acts. This latter
situation falls under the category of an implied repeal.
There are two categories of repeal by implication.

1. Where provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict constitutes an
implied repeal of the earlier one.
2. 2.
If the later act covers the whole subject of the earlier one and is clearly intended
as a substitute, it will operate to repeal the earlier law.
Comparing the two Codes, it is apparent that the new Code does not cover nor attempt
to cover the entire subject matter of the old Code. There are several matters treated in
the old Code which are not found in the new Code, such as the provisions on notaries
public, the leave law, the public bonding law, military reservations, claims for
sickness benefits under Section 699, and still others.
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear
is the intent to cover only those aspects of government that pertain to administration,
organization and procedure, understandably because of the many changes that
transpired in the government structure since the enactment of the RAC decades of
years ago.

Moreover, the COA failed to demonstrate that the provisions of the two Codes on the
matter of the subject claim are in an irreconcilable conflict. In fact, there can be no
such conflict because the provision on sickness benefits of the nature being claimed
by petitioner has not been restated in the Administrative Code of 1987.

Lastly, it is a well-settled rule of statutory construction that repeals of statutes by

implication are not favored. 20 The presumption is against inconsistency and
repugnancy for the legislature is presumed to know the existing laws on the subject
and not to have enacted inconsistent or conflicting statutes.
NOTES:
1. the COA would have Us consider that the fact that Section 699 was not restated in
the Administrative Code of 1987 meant that the same section had been repealed. The
COA anchored this argument on the whereas clause of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be enhanced by a new
Administrative Code which incorporate in a unified document the major structural,
functional and procedural principles and rules of governance; and
xxx xxx xxx

It argues, in effect, that what is contemplated is only one Code the Administrative
Code of 1987. This contention is untenable.

The fact that a later enactment may relate to the same subject matter as that of an
earlier statute is not of itself sufficient to cause an implied repeal of the prior act, since
the new statute may merely be cumulative or a continuation of the old one. What is
necessary is a manifest indication of legislative purpose to repeal.
2. Regarding COA contention that recovery under this subject section (699) shall bar
the recovery of benefits under the Employees Compensation Program, the same
cannot be upheld. The second sentence of Article 173, Chapter II, Title II (dealing on
Employees Compensation and State Insurance Fund), Book IV of the Labor Code, as
amended by P.D. 1921, expressly provides that the payment of compensation under
this Title shall not bar the recovery of benefits as provided for in Section 699 of the
Revised Administrative Code . . . whose benefits are administered by the system
(meaning SSS or GSIS) or by other agencies of the government.
EUGENIO vs. CSC et al
MARCH 26, 2011 ~ LEAVE A COMMENT

EUGENIO vs. CSC et al

G.R. No. 115863
March 31, 1995
FACTS: . Eugenio is the Deputy Director of the Philippine Nuclear Research
Institute. She applied for a Career Executive Service (CES) Eligibility and a CESO
rank,. She was given a CES eligibility and was recommended to the President for a
CESO rank by the Career Executive Service Board.
Then respondent Civil Service Commission passed a Resolution which abolished the
CESB, relying on the provisions of Section 17, Title I, Subtitle A. Book V of the
Administrative Code of 1987 allegedly conferring on the Commission the power and
authority to effect changes in its organization as the need arises.
Said resolution states:
Pursuant thereto, the Career Executive Service Board, shall now be known as the
Office for Career Executive Service of the Civil Service Commission. Accordingly,
the existing personnel, budget, properties and equipment of the Career Executive
Service Board shall now form part of the Office for Career Executive Service.

Finding herself bereft of further administrative relief as the Career Executive Service
Board which recommended her CESO Rank IV has been abolished, petitioner filed
the petition at bench to annul, among others, said resolution.
ISSUE: WON CSC given the authority to abolish the office of the CESB
HELD: the petition is granted and Resolution of the respondent Commission is
hereby annulled and set aside
NO
1. The controlling fact is that the CESB was created in PD No. 1 on September 1,
1974. 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
In the petition at bench, the legislature has not enacted any law authorizing the
abolition of the CESB. On the contrary, in all the General Appropriations Acts from
1975 to 1993, the legislature has set aside funds for the operation of CESB.

Respondent Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I,

Book V of the Administrative Code of 1987 as the source of its power to abolish the
CESB.

But as well pointed out by petitioner and the Solicitor General, Section 17 must be
read together with Section 16 of the said Code which enumerates the offices under the
respondent Commission.

As read together, the inescapable conclusion is that respondent Commissions power

to reorganize is limited to offices under its control as enumerated in Section 16..

2. . From its inception, the CESB was intended to be an autonomous entity, albeit
administratively attached to respondent Commission. As conceptualized by the
Reorganization Committee the CESB shall be autonomous. It is expected to view the
problem of building up executive manpower in the government with a broad and
positive outlook.
The essential autonomous character of the CESB is not negated by its attachment to
respondent Commission. By said attachment, CESB was not made to fall within the
control of respondent Commission. 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. This is clearly etched out in Section
38(3), Chapter 7, Book IV of the aforecited Code, to wit:
(3) Attachment. (a) This refers to the lateral relationship between the department or
its equivalent and attached agency or corporation for purposes of policy and program
coordination. The coordination may be accomplished by having the department
represented in the governing board of the attached agency or corporation, either as
chairman or as a member, with or without voting rights, if this is permitted by the
charter; having the attached corporation or agency comply with a system of periodic
reporting which shall reflect the progress of programs and projects; and having the
department or its equivalent provide general policies through its representative in the
board, which shall serve as the framework for the internal policies of the attached
corporation or agency.
NOTES:
Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987
as the source of its power to abolish the CESB. Section 17 provides:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed
by a Director with at least one Assistant Director, and may have such divisions as are
necessary independent constitutional body, the Commission may effect changes in
the organization as the need arises.
Sec. 16. Offices in the Commission. The Commission shall have the following
offices:
(1) The Office of the Executive
(2) The Merit System Protection Board composed of a Chairman and two (2)
members
(3) The Office of Legal Affairs
(4) The Office of Planning and Management
(5) The Central Administrative Office.
(6) The Office of Central Personnel Records
(7) The Office of Position Classification and Compensation
(8) The Office of Recruitment, Examination and Placement
(9) The Office of Career Systems and Standards
(10) The Office of Human Resource Development
(11) The Office of Personnel Inspection and Audit.
(12) The Office of Personnel Relations
(13) The Office of Corporate Affairs
(14) The Office of Retirement
(15) The Regional and Field Offices.
CHREA vs.CHR
MARCH 26, 2011 ~ LEAVE A COMMENT

CHREA vs.CHR
G.R. No. 155336
November 25, 2004
FACTS: Congress passed RA 8522, otherwise known as the General Appropriations
Act of 1998. It provided for Special Provisions Applicable to All Constitutional
Offices Enjoying Fiscal Autonomy. On the strength of these special provisions, the
CHR promulgated Resolution No. A98-047 adopting an upgrading and
reclassification scheme among selected positions in the Commission.
By virtue of Resolution No. A98-062, the CHR collapsed the vacant positions in the
body to provide additional source of funding for said staffing modification.

The CHR forwarded said staffing modification and upgrading scheme to the DBM
with a request for its approval, but the then DBM secretary denied the request.

In light of the DBMs disapproval of the proposed personnel modification scheme, the
CSC-National Capital Region Office, through a memorandum, recommended to the
CSC-Central Office that the subject appointments be rejected owing to the DBMs
disapproval of the plantilla reclassification.

Meanwhile, the officers of petitioner CHR-employees association (CHREA) in

representation of the rank and file employees of the CHR, requested the CSC-Central
Office to affirm the recommendation of the CSC-Regional Office.
The CSC-Central Office denied CHREAs request in a Resolution and reversed the
recommendation of the CSC-Regional Office that the upgrading scheme be censured.
CHREA filed a motion for reconsideration, but the CSC-Central Office denied the
same.
CHREA elevated the matter to the CA, which affirmed the pronouncement of the
CSC-Central Office and upheld the validity of the upgrading, retitling, and
reclassification scheme in the CHR on the justification that such action is within the
ambit of CHRs fiscal autonomy.
ISSUE: Can the CHR validly implement an upgrading, reclassification, creation, and
collapsing of plantilla positions in the Commission without the prior approval of the
Department of Budget and Management?
HELD: the petition is GRANTED, the Decision of the CA and its are hereby
REVERSED and SET ASIDE. The ruling CSC-National Capital Region is
REINSTATED. The 3 CHR Resolutions, without the approval of the DBM are
disallowed.
1. RA 6758, An Act Prescribing a Revised Compensation and Position Classification
System in the Government and For Other Purposes, or the Salary Standardization
Law, provides that it is the DBM that shall establish and administer a unified
Compensation and Position Classification System.
The disputation of the CA that the CHR is exempt from the long arm of the Salary
Standardization Law is flawed considering that the coverage thereof encompasses the
entire gamut of government offices, sans qualification.

This power to administer is not purely ministerial in character as erroneously held

by the CA. The word to administer means to control or regulate in behalf of others; to
direct or superintend the execution, application or conduct of; and to manage or
conduct public affairs, as to administer the government of the state.

2. The regulatory power of the DBM on matters of compensation is encrypted not

only in law, but in jurisprudence as well. In the recent case of PRA v. Buag, this
Court ruled that compensation, allowances, and other benefits received by PRA
officials and employees without the requisite approval or authority of the DBM are
unauthorized and irregular

In Victorina Cruz v. CA , we held that the DBM has the sole power and discretion to
administer the compensation and position classification system of the national
government.

In Intia, Jr. v. COA the Court held that although the charter of the PPC grants it the
power to fix the compensation and benefits of its employees and exempts PPC from
the coverage of the rules and regulations of the Compensation and Position
Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation
system established by the PPC is, nonetheless, subject to the review of the DBM.

(It should be emphasized that the review by the DBM of any PPC resolution affecting
the compensation structure of its personnel should not be interpreted to mean that the
DBM can dictate upon the PPC Board of Directors and deprive the latter of its
discretion on the matter. Rather, the DBMs function is merely to ensure that the
action taken by the Board of Directors complies with the requirements of the law,
specifically, that PPCs compensation system conforms as closely as possible with
that provided for under R.A. No. 6758. )

3. As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur

of the DBM must first be sought prior to implementation of any reclassification or
upgrading of positions in government. This is consonant to the mandate of the DBM
under the RAC of 1987, Section 3, Chapter 1, Title XVII, to wit:
SEC. 3. Powers and Functions. The Department of Budget and Management shall
assist the President in the preparation of a national resources and expenditures budget,
preparation, execution and control of the National Budget, preparation and
maintenance of accounting systems essential to the budgetary process, achievement of
more economy and efficiency in the management of government operations,
administration of compensation and position classification systems, assessment of
organizational effectiveness and review and evaluation of legislative proposals having
budgetary or organizational implications.

Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading,
reclassification, and creation of additional plantilla positions in the CHR based on its
finding that such scheme lacks legal justification.

Notably, the CHR itself recognizes the authority of the DBM to deny or approve the
proposed reclassification of positions as evidenced by its three letters to the DBM
requesting approval thereof. As such, it is now estopped from now claiming that the
nod of approval it has previously sought from the DBM is a superfluity

4. The CA incorrectly relied on the pronouncement of the CSC-Central Office that the
CHR is a constitutional commission, and as such enjoys fiscal autonomy.

Palpably, the CAs Decision was based on the mistaken premise that the CHR belongs
to the species of constitutional commissions. But the Constitution states in no
uncertain terms that only the CSC, the COMELEC, and the COA shall be tagged as
Constitutional Commissions with the appurtenant right to fiscal autonomy.

Along the same vein, the Administrative Code, on Distribution of Powers of

Government, the constitutional commissions shall include only the CSC, the
COMELEC, and the COA, which are granted independence and fiscal autonomy. In
contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the
other bodies including the CHR. Thus:

SEC. 24. Constitutional Commissions. The Constitutional Commissions, which

shall be independent, are the Civil Service Commission, the Commission on
Elections, and the Commission on Audit.
SEC. 26. Fiscal Autonomy. The Constitutional Commissions shall enjoy fiscal
autonomy. The approved annual appropriations shall be automatically and regularly
released.

SEC. 29. Other Bodies. There shall be in accordance with the Constitution, an
Office of the Ombudsman, a Commission on Human Rights, and independent central
monetary authority, and a national police commission. Likewise, as provided in the
Constitution, Congress may establish an independent economic and planning agency.

From the 1987 Constitution and the Administrative Code, it is abundantly clear that
the CHR is not among the class of Constitutional Commissions. As expressed in the
oft-repeated maxim expressio unius est exclusio alterius, the express mention of one
person, thing, act or consequence excludes all others. Stated otherwise, expressium
facit cessare tacitum what is expressed puts an end to what is implied.

Nor is there any legal basis to support the contention that the CHR enjoys fiscal
autonomy. In essence, fiscal autonomy entails freedom from outside control and
limitations, other than those provided by law. It is the freedom to allocate and utilize
funds granted by law, in accordance with law, and pursuant to the wisdom and
dispatch its needs may require from time to time.22 In Blaquera v. Alcala and Bengzon
v. Drilon,23 it is understood that it is only the Judiciary, the CSC, the COA, the
COMELEC, and the Office of the Ombudsman, which enjoy fiscal autonomy.
Neither does the fact that the CHR was admitted as a member by the Constitutional
Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal
autonomy is a constitutional grant, not a tag obtainable by membership.

We note with interest that the special provision under Rep. Act No. 8522, while cited
under the heading of the CHR, did not specifically mention CHR as among those
offices to which the special provision to formulate and implement organizational
structures apply, but merely states its coverage to include Constitutional Commissions
and Offices enjoying fiscal autonomy
All told, the CHR, although admittedly a constitutional creation is, nonetheless, not
included in the genus of offices accorded fiscal autonomy by constitutional or
legislative fiat.

Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance
of the DBM that the grant of fiscal autonomy notwithstanding, all government offices
must, all the same, kowtow to the Salary Standardization Law. We are of the same
mind with the DBM on its standpoint, thus-

Being a member of the fiscal autonomy group does not vest the agency with the
authority to reclassify, upgrade, and create positions without approval of the DBM.
While the members of the Group are authorized to formulate and implement the
organizational structures of their respective offices and determine the compensation of
their personnel, such authority is not absolute and must be exercised within the
parameters of the Unified Position Classification and Compensation System
established under RA 6758 more popularly known as the Compensation
Standardization Law.

5. The most lucid argument against the stand of respondent, however, is the provision
of Rep. Act No. 8522 that the implementation hereof shall be in accordance with
salary rates, allowances and other benefits authorized under compensation
standardization laws.26
NOTES:
1. Respondent CHR sharply retorts that petitioner has no locus standi considering that
there exists no official written record in the Commission recognizing petitioner as a
bona fide organization of its employees nor is there anything in the records to show
that its president has the authority to sue the CHR.
On petitioners personality to bring this suit, we held in a multitude of cases that a
proper party is one who has sustained or is in immediate danger of sustaining an
injury as a result of the act complained of. Here, petitioner, which consists of rank and
file employees of respondent CHR, protests that the upgrading and collapsing of
positions benefited only a select few in the upper level positions in the Commission
resulting to the demoralization of the rank and file employees. This sufficiently meets
the injury test. Indeed, the CHRs upgrading scheme, if found to be valid, potentially
entails eating up the Commissions savings or that portion of its budgetary pie
otherwise allocated for Personnel Services, from which the benefits of the employees,
including those in the rank and file, are derived.

Further, the personality of petitioner to file this case was recognized by the CSC when
it took cognizance of the CHREAs request to affirm the recommendation of the CSC-
National Capital Region Office. CHREAs personality to bring the suit was a non-
issue in the CA when it passed upon the merits of this case. Thus, neither should our
hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue
that was neither raised in the complaint nor in the court below cannot be raised for the
first time on appeal, as to do so would be offensive to the basic rules of fair play,
justice, and due process.

2. In line with its role to breathe life into the policy behind the Salary Standardization
Law of providing equal pay for substantially equal work and to base differences in
pay upon substantive differences in duties and responsibilities, and qualification
requirements of the positions, the DBM, in the case under review, made a
determination, after a thorough evaluation, that the reclassification and upgrading
scheme proposed by the CHR lacks legal rationalization.

The DBM expounded that Section 78 of the general provisions of the General
Appropriations Act FY 1998, which the CHR heavily relies upon to justify its
reclassification scheme, explicitly provides that no organizational unit or changes in
key positions shall be authorized unless provided by law or directed by the President.
Here, the DBM discerned that there is no law authorizing the creation of a Finance
Management Office and a Public Affairs Office in the CHR. Anent CHRs proposal to
upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four
positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM
denied the same as this would change the context from support to substantive
without actual change in functions.
This view of the DBM, as the laws designated body to implement and administer a
unified compensation system, is beyond cavil. The interpretation of an administrative
government agency, which is tasked to implement a statute is accorded great respect
and ordinarily controls the construction of the courts. In Energy Regulatory Board v.
CA, we echoed the basic rule that the courts will not interfere in matters which are
addressed to the sound discretion of government agencies entrusted with the
regulation of activities coming under the special technical knowledge and training of
such agencies.

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