MECANO vs.

COA
MARCH 26, 2011 ~ VBDIAZ
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 petitioner’s claim, to the Secretary of Justice. Finding petitioner’s illness to be service-
connected, the Committee on Physical Examination of the Department of Justice favorably recommended the
payment of petitioner’s claim.
However, then Undersecretary of Justice Bello III returned petitioner’s 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the statements of the Chairman of the COA to the effect that the RAC being relied upon was repealed by the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 Mecano’s claim to then Undersecretary Bello for favorable consideration; Secretary
Drilon forwarded petitioner’s claim to the COA Chairman, recommending payment of the same. COA Chairman
however, denied petitioner’s 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, petitioner’s 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 petitioner’s
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.
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. 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.”
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LUZON DEVELOPMENT BANK vs. ASSO. OF LDB EMPLOYEES and GARCIA

MARCH 26, 2011 ~ VBDIAZ
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 ALDBE’s 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 LDB’s 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 arbiter’s 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. 1 The
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. 2 Ideally,
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 arbitrator’s 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.

Malaga vs. Penachos (Digest)

Ma. Elena Malaga, et. al. vs. Manuel R. Penachos, Jr., et.al.
GR No. 86995                                             03 September 1992

Chartered Institution and GOCC, defined.

FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids and Awards Committee
(PBAC) caused the publication in the November 25, 26 and 28, 1988 issues of the Western Visayas Daily an
Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF.  The notice announced that the last day
for the submission of pre-qualification requirements was on December 2, 1988, and that the bids would be received
and opened on December 12, 1988 at 3 o'clock in the afternoon.

Petitioners Malaga and Najarro, doing business under the name of BE Construction and Best Built Construction,
respectively, submitted their pre-qualification documents at two o'clock in the afternoon of December 2, 1988. 
Petitioner Occeana submitted his own PRE-C1 on December 5, 1988.  All three of them were not allowed to
participate in the bidding as their documents were considered late.

On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the officers of PBAC for their
refusal without just cause to accept them resulting to their non-inclusion in the list of pre-qualified bidders.  They
sought to the resetting of the December 12, 1988 bidding and the acceptance of their documents.  They also asked
that if the bidding had already been conducted, the defendants be directed not to award the project pending
resolution of their complaint.

On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding and
award the project. The defendants filed a motion to lift the restraining order on the ground that the court is prohibited
from issuing such order, preliminary injunction and preliminary mandatory injunction in government infrastructure
project under Sec. 1 of P.D. 1818.  They also contended that the preliminary injunction had become moot and
academic as it was served after the bidding had been awarded and closed. 

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction.  It
declared that the building sought to be constructed at the ISCOF was an infrastructure project of the government
falling within the coverage of the subject law.  

ISSUE: Whether or not ISCOF is a government instrumentality subject to the provisions of PD 1818?

RULING: The 1987 Administrative Code defines a government instrumentality as follows:

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. (Sec. 2 (5) Introductory Provisions).

The same Code describes a chartered institution thus:

Chartered institution - refers to any agency organized or operating under a special charter, and vested by law with
functions relating to specific constitutional policies or objectives. This term includes the state universities and
colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.
There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance
of the integrated fisheries development policy of the State, a priority program of the government to effect the socio-
economic life of the nation. Second, the Treasurer of the Republic of the Philippines shall also be the ex-officio
Treasurer of the state college with its accounts and expenses to be audited by the Commission on Audit or its duly
authorized representative. Third, heads of bureaus and offices of the National Government are authorized to loan or
transfer to it, upon request of the president of the state college, such apparatus, equipment, or supplies and even the
services of such employees as can be spared without serious detriment to public service. Lastly, an additional
amount of P1.5M had been appropriated out of the funds of the National Treasury and it was also decreed in its
charter that the funds and maintenance of the state college would henceforth be included in the General
Appropriations Law.  

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree as there are
irregularities present surrounding the transaction that justified the injunction issued as regards to the bidding and the
award of the project (citing the case of Datiles vs. Sucaldito).

Preclaro vs Sandiganbayan, 247 SCRA 454

Posted by Pius Morados on November 7, 2011
(Public Officers, Non-Career Service)
Facts: Accused is a project manager/consultant of the Chemical Mineral Division, Industrial Technology Development
Institute, Department of Science and Technology, a component of the Industrial Development Institute which is an
agency of the DOST.
He is to supervise the construction of the ITDI-CMD building, while the Jaime Sta. Maria Construction undertook the
construction. The structure is jointly funded by the Philippine and Japanese Governments.
While the said construction has not yet been completed, accused either directly requested and/or demanded for
himself the sum of P200,000.00, claimed as part of the expected profit of the contractor.
Petitioner was charged for violation of the Anti-Graft and Corrupt Practices Act for committing said offense in relation
to the performance of his official duties.
Petitioner asserts in a petition for review that he is not a public officer because he was neither elected nor appointed
to a public office, but merely a private individual hired by the ITDI on contractual basis for a particular project and for
a specified period. Hence the Sandiganbayan erred in taking cognizance of the case.
Section 2 (b) of RA 3019 defines a public officer to “include elective and appointive officials and employees,
permanent or temporary, whether in the classified or unclassified or exemption service receiving compensation, even
nominal, from the government…”
Issue: WON a private individual hired on a contractual basis by the government is a public officer.
Held: Yes. The word “includes” used in defining a public officer indicates that the definition is not restrictive. The
terms “classified, unclassified or exemption service” were the old categories of position in the civil service which have
been reclassified into Career Service and Non-Career Service by PD 807 providing for the organization of the Civil
Service Commission by the Administrative Code of 1987.
A private individual hired on a contractual basis as Project Manager for a government undertaking falls under the
non-career service category of the Civil Service and thus is a public officer as defined by Sec 2(b) of RA 3019.
Under Book V, Title I, Subtitle A, Chapter 2, Sec 6(2) of the Administrative Code of 1987, non-career service in
particular is characterized by 1) entrance other than those of the usual test of merit and fitness utilized for the career
service; and 2) tenure which is limited to a period specified by law, or which is coterminous with that of the appointing
authority or subject to his pleasure, or which is limited to the duration of a particular project for which purpose
employment was made.
Section 9(4) of the same provides that Non-Career Service It shall include Contractual personnel or those 
employment in the government is in accordance with a special contract to undertake a specific work or job, requiring
special or technical skills not available in the employing agency, to be accomplished within a specific period, which in
no case shall exceed one year, and performs or accomplishes the specific work or job, under his own responsibility
with a minimum of direction and supervision from the hiring agency.