Consti 2 - BOR Cases

ARTICLE III (BILL OF RIGHTS)
Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
ARMANDO G. YRASUEGUI, G.R. No. 168081
Petitioner,
Promulgated:
PHILIPPINE AIRLINES, INC.,
DECISION
REYES, R.T., J.:
THIS case portrays the peculiar story of an international flight steward who was dismissed because of his failure to
adhere to the weight standards of the airline company.
He is now before this Court via a petition for review on certiorari claiming that he was illegally dismissed. To
buttress his stance, he argues that (1) his dismissal does not fall under 282(e) of the Labor Code; (2) continuing adherence to
the weight standards of the company is not a bona fide occupational qualification; and (3) he was discriminated
against because other overweight employees were promoted instead of being disciplined.
After a meticulous consideration of all arguments pro and con, We uphold the legality of dismissal. Separation pay, however,
should be awarded in favor of the employee as an act of social justice or based on equity. This is so because his dismissal is
not for serious misconduct. Neither is it reflective of his moral character.
The Facts
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc. (PAL). He stands five
feet and eight inches (58) with a large body frame. The proper weight for a man of his height and body structure is from 147
to 166 pounds, the ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual [1] of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended vacation leave
from December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently, petitioner failed to meet the
companys weight standards, prompting another leave without pay from March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work. But petitioners weight problem
recurred. He again went on leave without pay from October 17, 1988 to February 1989.
On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal weight. In line with company policy, he
was removed from flight duty effective May 6, 1989to July 3, 1989. He was formally requested to trim down to his ideal
weight and report for weight checks on several dates. He was also told that he may avail of the services of the company
physician should he wish to do so. He was advised that his case will be evaluated on July 3, 1989.[2]
On February 25, 1989, petitioner underwent weight check. It was discovered that he gained, instead of losing,
weight. He was overweight at 215 pounds, which is 49 pounds beyond the limit. Consequently, his off-duty status was
retained.
On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at his residence to check
on the progress of his effort to lose weight. Petitioner weighed 217 pounds, gaining 2 pounds from his previous weight. After
the visit, petitioner made a commitment [3] to reduce weight in a letter addressed to Cabin Crew Group
Manager Augusto Barrios. The letter, in full, reads:
1
ST. THOMAS MOORE SCHOOL OF LAW AND BUSINESS

Dear Sir:
I would like to guaranty my commitment towards a weight loss from 217 pounds to 200
pounds from today until 31 Dec. 1989.
From thereon, I promise to continue reducing at a reasonable percentage until such time that my
ideal weight is achieved.
Likewise, I promise to personally report to your office at the designated time schedule you will set
for my weight check.
Respectfully Yours,
F/S Armando Yrasuegui[4]
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained
overweight. On January 3, 1990, he was informed of the PAL decision for him to remain grounded until such time that he
satisfactorily complies with the weight standards. Again, he was directed to report every two weeks for weight checks.
Petitioner failed to report for weight checks. Despite that, he was given one more month to comply with the weight
requirement. As usual, he was asked to report for weight check on different dates. He was reminded that his grounding would
continue pending satisfactory compliance with the weight standards. [5]
Again, petitioner failed to report for weight checks, although he was seen submitting his passport for processing at
the PAL Staff Service Division.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight check would be dealt
with accordingly. He was given another set of weight check dates. [6] Again, petitioner ignored the directive and did not report
for weight checks. On June 26, 1990, petitioner was required to explain his refusal to undergo weight checks.[7]
When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds. Clearly, he was still way over his ideal
weight of 166 pounds.
From then on, nothing was heard from petitioner until he followed up his case requesting for leniency on the latter
part of 1992. He weighed at 219 pounds on August 20, 1992 and 205 pounds on November 5, 1992.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of company
standards on weight requirements. He was given ten (10) days from receipt of the charge within which to file his answer and
submit controverting evidence.[8]
On December 7, 1992, petitioner submitted his Answer.[9] Notably, he did not deny being overweight. What he
claimed, instead, is that his violation, if any, had already been condoned by PAL since no action has been taken by the
company regarding his case since 1988. He also claimed that PAL discriminated against him because the company has not
been fair in treating the cabin crew members who are similarly situated.
On December 8, 1992, a clarificatory hearing was held where petitioner manifested that he was undergoing a weight
reduction program to lose at least two (2) pounds per week so as to attain his ideal weight. [10]
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, and
considering the utmost leniency extended to him which spanned a period covering a total of almost five (5) years, his services
were considered terminated effective immediately.[11]
His motion for reconsideration having been denied,[12] petitioner filed a complaint for illegal dismissal against PAL.
2

Labor Arbiter, NLRC and CA Dispositions
On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled[13] that petitioner was illegally dismissed. The
dispositive part of the Arbiter ruling runs as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, declaring the complainants
dismissal illegal, and ordering the respondent to reinstate him to his former position or substantially
equivalent one, and to pay him:
a. Backwages of Php10,500.00 per month from his dismissal on June 15, 1993 until reinstated,
which for purposes of appeal is hereby set from June 15, 1993 up to August 15, 1998 atP651,000.00;
b. Attorneys fees of five percent (5%) of the total award.
SO ORDERED.[14]
The Labor Arbiter held that the weight standards of PAL are reasonable in view of the nature of the job of petitioner.
However, the weight standards need not be complied with under pain of dismissal since his weight did not hamper the
performance of his duties.[16] Assuming that it did, petitioner could be transferred to other positions where his weight would
not be a negative factor.[17] Notably, other overweight employees, i.e., Mr. Palacios, Mr. Cui, and Mr. Barrios, were promoted
instead of being disciplined.[18]
[15]
Both parties appealed to the National Labor Relations Commission (NLRC).[19]

On October 8, 1999, the Labor Arbiter issued a writ of execution directing the reinstatement of petitioner without
loss of seniority rights and other benefits.[20]
On February 1, 2000, the Labor Arbiter denied[21] the Motion to Quash Writ of Execution[22] of PAL.
On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC.[23]
On June 23, 2000, the NLRC rendered judgment[24] in the following tenor:
WHEREFORE, premises considered[,] the Decision of the Arbiter dated 18 November 1998 as
modified by our findings herein, is hereby AFFIRMED and that part of the dispositive portion of said
decision concerning complainants entitlement to backwages shall be deemed to refer to complainants
entitlement to his full backwages, inclusive of allowances and to his other benefits or their monetary
equivalent instead of simply backwages, from date of dismissal until his actual reinstatement or finality
hereof. Respondent is enjoined to manifests (sic) its choice of the form of the reinstatement of complainant,
whether physical or through payroll within ten (10) days from notice failing which, the same shall be
deemed as complainants reinstatement through payroll and execution in case of non-payment shall
accordingly be issued by the Arbiter. Both appeals of respondent thus, are DISMISSED for utter lack of
merit.[25]
According to the NLRC, obesity, or the tendency to gain weight uncontrollably regardless of the amount of food
intake, is a disease in itself. [26] As a consequence, there can be no intentional defiance or serious misconduct by petitioner to
the lawful order of PAL for him to lose weight.[27]
Like the Labor Arbiter, the NLRC found the weight standards of PAL to be reasonable. However, it found as
unnecessary the Labor Arbiter holding that petitioner was not remiss in the performance of his duties as flight steward despite
being overweight. According to the NLRC, the Labor Arbiter should have limited himself to the issue of whether the failure
of petitioner to attain his ideal weight constituted willful defiance of the weight standards of PAL.[28]
3

PAL moved for reconsideration to no avail.[29] Thus, PAL elevated the matter to the Court of Appeals (CA) via a
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.[30]
By Decision dated August 31, 2004, the CA reversed[31] the NLRC:
WHEREFORE, premises considered, we hereby GRANT the petition. The assailed NLRC
decision is declared NULL and VOID and is hereby SET ASIDE. The private respondents complaint is
hereby DISMISSED. No costs.
SO ORDERED.[32]
The CA opined that there was grave abuse of discretion on the part of the NLRC because it looked at wrong and
irrelevant considerations[33] in evaluating the evidence ofthe parties. Contrary to the NLRC ruling, the weight standards
of PAL are meant to be a continuing qualification for an employees position.[34] The failure to adhere to the weight standards
is an analogous cause for the dismissal of an employee under Article 282(e) of the Labor Code in relation to Article 282(a). It
is not willful disobedience as the NLRC seemed to suggest. [35] Said the CA, the element of willfulness that the NLRC
decision cites is an irrelevant consideration in arriving at a conclusion on whether the dismissal is legally proper.[36] In other
words, the relevant question to ask is not one of willfulness but one of reasonableness of the standard and whether or not the
employee qualifies or continues to qualify under this standard.[37]
Just like the Labor Arbiter and the NLRC, the CA held that the weight standards of PAL are reasonable.[38] Thus, petitioner
was legally dismissed because he repeatedly failed to meet the prescribed weight standards. [39] It is obvious that the issue of
discrimination was only invoked by petitioner for purposes of escaping the result of his dismissal for being overweight. [40]
On May 10, 2005, the CA denied petitioners motion for reconsideration. [41] Elaborating on its earlier ruling, the CA
held that the weight standards of PAL are a bona fide occupational qualification which, in case of violation, justifies an
employees separation from the service.[42]
Issues
In this Rule 45 petition for review, the following issues are posed for resolution:
I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONERS OBESITY CAN BE A GROUND FOR DISMISSAL UNDER PARAGRAPH (e)
OF ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES;
II.
THAT PETITIONERS DISMISSAL FOR OBESITY CAN BE PREDICATED ON THE BONA FIDE
OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE;
III.
THAT PETITIONER WAS NOT UNDULY DISCRIMINATED AGAINST WHEN HE WAS DISMISSED
WHILE OTHER OVERWEIGHT CABIN ATTENDANTS WERE EITHER GIVEN FLYING DUTIES OR
PROMOTED;
IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT BRUSHED
ASIDE PETITIONERS CLAIMS FOR REINSTATEMENT [AND] WAGES ALLEGEDLY FOR BEING
MOOT AND ACADEMIC.[43] (Underscoring supplied)
Our Ruling
I. The obesity of petitioner is a ground for dismissal under Article 282(e) [44] of the Labor Code.
4
A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing
qualification of an employee in order to keep the job. Tersely put, an employee may be dismissed the moment he is unable to
comply with his ideal weight as prescribed by the weight standards. The dismissal of the employee would thus fall under
Article 282(e) of the Labor Code. As explained by the CA:
x x x [T]he standards violated in this case were not mere orders of the employer; they were the prescribed
weights that a cabin crew must maintain in order to qualify for and keep his or her position in the
company. In other words, they were standards that establish continuing qualifications for an employees
position. In this sense, the failure to maintain these standards does not fall under Article 282(a) whose
express terms require the element of willfulness in order to be a ground for dismissal. The failure to meet
the employers qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d)
and is therefore one that falls under Article 282(e) the other causes analogous to the foregoing.
By its nature, these qualifying standards are norms that apply prior to and after an employee is hired. They
apply prior to employment because these are the standards a job applicant must initially meet in order to be
hired. They apply after hiring because an employee must continue to meet these standards while on the job
in order to keep his job. Under this perspective, a violation is not one of the faults for which an employee
can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed simply because
he no longer qualifies for his job irrespective of whether or not the failure to qualify was willful or
intentional. x x x[45]
Petitioner, though, advances a very interesting argument. He claims that obesity is a physical abnormality and/or illness.
[46]
Relying on Nadura v. Benguet Consolidated, Inc.,[47] he says his dismissal is illegal:
Conscious of the fact that Naduras case cannot be made to fall squarely within the specific causes
enumerated in subparagraphs 1(a) to (e), Benguet invokes the provisions of subparagraph 1(f) and says
that Naduras illness occasional attacks of asthma is a cause analogous to them.
Even a cursory reading of the legal provision under consideration is sufficient to convince anyone that, as
the trial court said, illness cannot be included as an analogous cause by any stretch of imagination.
It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the others expressly enumerated
in the law are due to the voluntary and/or willful act of the employee. How Nadurasillness could be
considered as analogous to any of them is beyond our understanding, there being no claim or pretense that
the same was contracted through his own voluntary act.[48]
The reliance on Nadura is off-tangent. The factual milieu in Nadura is substantially different from the case at
bar. First, Nadura was not decided under the Labor Code. The law applied in that case was Republic Act (RA) No.
1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale there cannot apply here. Third, in Nadura, the
employee who was a miner, was laid off from work because of illness, i.e., asthma. Here, petitioner was dismissed for his
failure to meet the weight standards of PAL. He was not dismissed due to illness. Fourth, the issue in Nadura is whether
or not the dismissed employee is entitled to separation pay and damages. Here, the issue centers on the propriety of the
dismissal of petitioner for his failure to meet the weight standards of PAL. Fifth, in Nadura, the employee was not accorded
due process. Here, petitioner was accorded utmost leniency. He was given more than four (4) years to comply with the weight
standards of PAL.
In the case at bar, the evidence on record militates against petitioners claims that obesity is a disease. That he was
able to reduce his weight from 1984 to 1992 clearly shows that it is possible for him to lose weight given the proper attitude,
determination, and self-discipline. Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself claimed
that [t]he issue is could I bring my weight down to ideal weight which is 172, then the answer is yes. I can do it now.[49]
True, petitioner claims that reducing weight is costing him a lot of expenses. [50] However, petitioner has only himself
to blame. He could have easily availed the assistance of the company physician, per the advice of PAL.[51] He chose to ignore
5

the suggestion. In fact, he repeatedly failed to report when required to undergo weight checks, without offering a valid
explanation. Thus, his fluctuating weight indicates absence of willpower rather than an illness.
Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health, Retardation and Hospitals,
decided by the United States Court of Appeals (First Circuit). In that case, Cook worked from 1978 to 1980 and from 1981
to 1986 as an institutional attendant for the mentally retarded at the Ladd Center that was being operated by respondent. She
twice resigned voluntarily with an unblemished record. Even respondent admitted that her performance met the Centers
legitimate expectations. In 1988, Cook re-applied for a similar position. At that time, she stood 52 tall and weighed over 320
pounds. Respondent claimed that the morbid obesity of plaintiff compromised her ability to evacuate patients in case of
emergency and it also put her at greater risk of serious diseases.
[52]
Cook contended that the action of respondent amounted to discrimination on the basis of a handicap. This was in
direct violation of Section 504(a) of the Rehabilitation Act of 1973, [53] which incorporates the remedies contained in Title VI
of the Civil Rights Act of 1964. Respondent claimed, however, that morbid obesity could never constitute a handicap within
the purview of the Rehabilitation Act. Among others, obesity is a mutable condition, thus plaintiff could simply lose weight
and rid herself of concomitant disability.
The appellate Court disagreed and held that morbid obesity is a disability under the Rehabilitation Act and that
respondent discriminated against Cook based on perceived disability. The evidence included expert testimony that morbid
obesity is a physiological disorder. It involves a dysfunction of both the metabolic system and the neurological appetite
suppressing signal system, which is capable of causing adverse effects within the musculoskeletal, respiratory, and
cardiovascular systems. Notably, the Court stated that mutability is relevant only in determining the substantiality of the
limitation flowing from a given impairment, thus mutability only precludes those conditions that an individual can easily and
quickly reverse by behavioral alteration.
Unlike Cook, however, petitioner is not morbidly obese. In the words of the District Court for the District of Rhode
Island, Cook was sometime before 1978 at least one hundred pounds more than what is considered appropriate of her
height. According to the Circuit Judge, Cook weighed over 320 pounds in 1988. Clearly, that is not the case here.At his
heaviest, petitioner was only less than 50 pounds over his ideal weight.
In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an
analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. His obesity may not be
unintended, but is nonetheless voluntary. As the CA correctly puts it, [v]oluntariness basically means that the just cause is
solely attributable to the employee without any external force influencing or controlling his actions. This element runs
through all just causes under Article 282, whether they be in the nature of a wrongful action or omission. Gross and habitual
neglect, a recognized just cause, is considered voluntary although it lacks the element of intent found in Article 282(a), (c),
and (d).[54]
II. The dismissal of petitioner can be predicated on the bona fide occupational qualification defense.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin unless the
employer can show that sex, religion, or national origin is an actual qualification for performing the job. The qualification is
called a bona fide occupational qualification (BFOQ).[55] In the United States, there are a few federal and many state job
discrimination laws that contain an exception allowing an employer to engage in an otherwise unlawful form of prohibited
discrimination when the action is based on a BFOQ necessary to the normal operation of a business or enterprise. [56]
Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute providing for it.
[57]
Further, there is no existing BFOQ statute that could justify his dismissal. [58]
Both arguments must fail.
First, the Constitution,[59] the Labor
Persons contain provisions similar to BFOQ.
Code,[60] and
RA No.
7277[61] or
the
Magna Carta for
Disabled
[62]
Second, in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia Government and
Service Employees Union (BCGSEU),[63] the Supreme Court of Canada adopted the so-called Meiorin Test in determining
6

whether an employment policy is justified. Under this test, (1) the employer must show that it adopted the standard for a
purpose rationally connected to the performance of the job; [64] (2) the employer must establish that the standard is reasonably
necessary[65] to the accomplishment of that work-related purpose; and (3) the employer must establish that the standard is
reasonably necessary in order to accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation
v. Simbol,[66] this Court held that in order to justify a BFOQ, the employer must prove that (1) the employment qualification is
reasonably related to the essential operation of the job involved; and (2) that there is factual basis for believing that all or
substantially all persons meeting the qualification would be unable to properly perform the duties of the job. [67]
In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ. [68] BFOQ is
valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance.[69]
In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc.,[70] the Court did not hesitate to
pass upon the validity of a company policy which prohibits its employees from marrying employees of a rival company. It
was held that the company policy is reasonable considering that its purpose is the protection of the interests of the company
against possible competitor infiltration on its trade secrets and procedures.
Verily, there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too, the Labor
Arbiter,[71] NLRC,[72] and CA[73] are one in holding that the weight standards of PAL are reasonable. A common carrier, from
the nature of its business and for reasons of public policy, is bound to observe extraordinary diligence for the safety of the
passengers it transports.[74] It is bound to carry its passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due regard for all the circumstances. [75]
The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is only logical to hold that
the weight standards of PAL show its effort to comply with the exacting obligations imposed upon it by law by virtue of
being a common carrier.
The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In order
to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the
aircraft. The weight standards of PAL should be viewed as imposing strict norms of discipline upon its employees.
In other words, the primary objective of PAL in the imposition of the weight standards for cabin crew is flight
safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order to inspire passenger confidence
on their ability to care for the passengers when something goes wrong. It is not farfetched to say that airline companies, just
like all common carriers, thrive due to public confidence on their safety records. People, especially the riding public, expect
no less than that airline companiestransport their passengers to their respective destinations safely and soundly. A lesser
performance is unacceptable.
The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and caprices of
the passengers. The most important activity of the cabin crew is to care for the safety of passengers and the evacuation of the
aircraft when an emergency occurs. Passenger safety goes to the core of the job of a cabin attendant.Truly, airlines need cabin
attendants who have the necessary strength to open emergency doors, the agility to attend to passengers in cramped working
conditions, and the stamina to withstand grueling flight schedules.
On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in case of
emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors. Thus, the arguments of respondent
that [w]hether the airlines flight attendants are overweight or not has no direct relation to its mission of transporting
passengers to their destination; and that the weight standards has nothing to do with airworthiness of respondents airlines,
must fail.
The rationale in Western Air Lines v. Criswell [76] relied upon by petitioner cannot apply to his case. What was
involved there were two (2) airline pilots who were denied reassignment as flight engineers upon reaching the age of 60, and
a flight engineer who was forced to retire at age 60. They sued the airline company, alleging that the age-60 retirement for
flight engineers violated the Age Discrimination in Employment Act of 1967. Age-based BFOQ and being overweight are not
the same. The case of overweight cabin attendants is another matter. Given the cramped cabin space and narrow aisles and
emergency exit doors of the airplane, any overweight cabin attendant would certainly have difficulty navigating the cramped
cabin area.
7

In short, there is no need to individually evaluate their ability to perform their task. That an obese cabin attendant
occupies more space than a slim one is an unquestionable fact which courts can judicially recognize without introduction of
evidence.[77] It would also be absurd to require airline companies to reconfigure the aircraft in order to widen the aisles and
exit doors just to accommodate overweight cabin attendants like petitioner.
The biggest problem with an overweight cabin attendant is the possibility of impeding passengers from evacuating
the aircraft, should the occasion call for it. The job of a cabin attendant during emergencies is to speedily get the passengers
out of the aircraft safely. Being overweight necessarily impedes mobility. Indeed, in an emergency situation, seconds are
what cabin attendants are dealing with, not minutes. Three lost seconds can translate into three lost lives. Evacuation might
slow down just because a wide-bodied cabin attendant is blocking the narrow aisles. These possibilities are not remote.
Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made known to him prior to his
employment. He is presumed to know the weight limit that he must maintain at all times. [78] In
fact, never did he question the authority of PAL when he was repeatedly asked to trim down his weight. Bona
fides exigit ut quodconvenit fiat. Good
faith
demands
that
what
is
agreed
upon
shall
be
done. Kung ang tao ay tapat kanyang tutuparin ang napagkasunduan.
Too, the weight standards of PAL provide for separate weight limitations based on height and body frame for both
male and female cabin attendants. A progressive discipline is imposed to allow non-compliant cabin attendants sufficient
opportunity to meet the weight standards. Thus, the clear-cut rules obviate any possibility for thecommission of abuse or
arbitrary action on the part of PAL.
III. Petitioner failed to substantiate his claim that he was discriminated against by PAL.
Petitioner next claims that PAL is using passenger safety as a convenient excuse to discriminate against him. [79] We
are constrained, however, to hold otherwise. We agree with the CA that [t]he element of discrimination came into play in this
case as a secondary position for the private respondent in order to escape the consequence of dismissal that being overweight
entailed. It is a confession-and-avoidance position that impliedly admitted the cause of dismissal, including the
reasonableness of the applicable standard and the private respondents failure to comply. [80] It is a basic rule in evidence that
each party must prove his affirmative allegation.[81]
Since the burden of evidence lies with the party who asserts an affirmative allegation, petitioner has to prove his
allegation with particularity. There is nothing on the records which could support the finding of discriminatory treatment.
Petitioner cannot establish discrimination by simply naming the supposed cabin attendants who are allegedly similarly
situated with him. Substantial proof must be shown as to how and why they are similarly situated and the differential
treatment petitioner got from PAL despite the similarity of his situation with other employees.
Indeed, except for pointing out the names of the supposed overweight cabin attendants, petitioner miserably failed to indicate
their respective ideal weights; weights over their ideal weights; the periods they were allowed to fly despite their being
overweight; the particular flights assigned to them; the discriminating treatment they got from PAL; and other relevant data
that could have adequately established a case of discriminatory treatment by PAL. In the words of the CA, PAL really had no
substantial case of discrimination to meet.[82]
We are not unmindful that findings of facts of administrative agencies, like the Labor Arbiter and the NLRC, are
accorded respect, even finality.[83] The reason is simple: administrative agencies are experts in matters within their specific
and specialized jurisdiction.[84] But the principle is not a hard and fast rule. It only applies if the findings of facts are duly
supported by substantial evidence. If it can be shown that administrative bodies grossly misappreciated evidence of such
nature so as to compel a conclusion to the contrary, their findings of facts must necessarily be reversed. Factual findings of
administrative agencies do not have infallibility and must be set aside when they fail the test of arbitrariness. [85]
Here, the Labor Arbiter and the NLRC inexplicably misappreciated evidence. We thus annul their findings.
To make his claim more believable, petitioner invokes the equal protection clause guaranty [86] of the
Constitution. However, in the absence of governmental interference, the liberties guaranteed by the Constitution cannot be
invoked.[87] Put differently, the Bill of Rights is not meant to be invoked against acts of private individuals. [88] Indeed, the
United States Supreme Court, in interpreting the Fourteenth Amendment, [89] which is the source of our equal protection
8

guarantee, is consistent in saying that the equalprotection erects no shield against private conduct, however discriminatory or
wrongful.[90] Private actions, no matter how egregious, cannot violate the equal protection guarantee. [91]
IV. The claims of petitioner for reinstatement and wages are moot.
As his last contention, petitioner avers that his claims for reinstatement and wages have not been mooted. He is entitled to
reinstatement and his full backwages, from the time he was illegally dismissed up to the time that the NLRC was reversed by
the CA.[92]
At this point, Article 223 of the Labor Code finds relevance:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee
shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal
or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by
the employer shall not stay the execution for reinstatement provided herein.
The law is very clear. Although an award or order of reinstatement is self-executory and does not require a writ of
execution,[93] the option to exercise actual reinstatement or payroll reinstatement belongs to the employer. It does not belong
to the employee, to the labor tribunals, or even to the courts.
Contrary to the allegation of petitioner that PAL did everything under the sun to frustrate his immediate return to his
previous position,[94] there is evidence that PALopted to physically reinstate him to a substantially equivalent position in
accordance with the order of the Labor Arbiter.[95] In fact, petitioner duly received the return to work notice on February 23,
2001, as shown by his signature.[96]
Petitioner cannot take refuge in the pronouncements of the Court in a case [97] that [t]he unjustified refusal of the
employer to reinstate the dismissed employee entitles him to payment of his salaries effective from the time the employer
failed to reinstate him despite the issuance of a writ of execution [98] and even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the employee during the
period of appeal until reversal by the higher court. [99] He failed to prove that he complied with the return to work order
of PAL. Neither does it appear on record that he actually rendered services for PAL from the moment he was dismissed, in
order to insist on the payment of his full backwages.
In insisting that he be reinstated to his actual position despite being overweight, petitioner in effect wants to render
the issues in the present case moot. He asks PAL to comply with the impossible. Time and again, the Court ruled that the law
does not exact compliance with the impossible.[100]
V. Petitioner is entitled to separation pay.
Be that as it may, all is not lost for petitioner.
Normally, a legally dismissed employee is not entitled to separation pay. This may be deduced from the language of
Article 279 of the Labor Code that [a]n employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his
actual reinstatement. Luckily for petitioner, this is not an ironclad rule.
Exceptionally, separation pay is granted to a legally dismissed employee as an act social justice, [101] or based on
equity. In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the
moral character of the employee.[103]
[102]
Here, We grant petitioner separation pay equivalent to one-half (1/2) months pay for every year of service. [104] It
should include regular allowances which he might have been receiving. [105] We are not blind to the fact that he was not
9

dismissed for any serious misconduct or to any act which would reflect on his moral character. We also recognize that his
employment with PAL lasted for more or less a decade.
WHEREFORE, the appealed Decision of the Court of Appeals is AFFIRMED but MODIFIED in that petitioner
Armando G. Yrasuegui is entitled to separation pay in an amount equivalent to one-half (1/2) months pay for every year of
service, which should include his regular allowances.
SO ORDERED.
[1]
Rollo, p. 136; Annex A of Annex G.

The Cabin Crew Administration Manual of PAL provides:
C. A cabin crew one (1) to four (4) pounds over his/her weight maximum shall be given a verbal warning and a
two (2)-week period in which to meet weight standards.
1. A record of the verbal warning shall be maintained in the cabin crews permanent file.
2. A cabin crew who fails to progress shall be given a written letter and an additional two (2)-week
period to meet weight standards.
3. A cabin crew who fails to reach the prescribed weights standard as required shall be removed from
schedule.
a. A cabin crew who has been removed from schedule shall report to his/her assigned Check
Cabin Crew for a weight check every two (2) weeks and will be required to lose two (2)
pounds per week.
b. A cabin crew who fails to reach his/her required weight standard within a maximum period
of ninety (90) days shall be terminated.
c. A cabin crew will return to active flight duty when he/she has reduced to his/her maximum
weight requirement.
1. A cabin crew who returns to active flight duty after being removed from schedule
and within the following three (3) months exceeds the maximum weight standard will
be removed from schedule until he/she reached his/her maximum allowable standard.
D. A cabin crew who is five (5) pounds or more over his/her weight maximum will be given a written letter and a
two (2) week period to show substantial weight reduction to meet standards. At the end of the initial two (2) weeks
period, a cabin crew who has shown progress will continue on weight check until he/she reached his/her maximum
allowable standard.
1. Cabin crew who fails to show substantial weight reduction shall be removed from schedules.
a. Refer to letter C above for discipline guideline.
2. A cabin crew who is ten (10) pounds or more over his/her weight maximum shall be removed from
schedule immediately.
MEN
HEIGHT
FEET inches w/o shoes
Five 7
8
9
10
11
Six 0
1
2
3
SMALL FRAME
MEDIUM FRAME
LARGE FRAME
128-137
132-141
136-145
140-150
144-154
148-158
152-162
156-167
160-171
134-147
138-152
142-156
146-160
150-165
154-170
158-175
162-180
167-185
142-161
147-166
151-170
155-174
159-179
164-184
168-189
173-194
178-199
10

4
WOMEN
HEIGHT
FEET inches w/o shoes
Five 2
3
4
5
6
7
8
9
10
11
164-175
172-190
180-204
SMALL FRAME
MEDIUM FRAME
LARGE FRAME
102-110
105-113
108-116
111-119
114-123
118-127
122-131
126-135
130-140
134-144
107-119
110-122
113-126
116-130
120-135
124-139
128-143
132-147
136-151
144-159
115-131
118-134
121-138
125-142
129-146
133-150
137-154
141-158
145-163
153-173

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-51214 January 26, 1989
EDGARDO DORUELO, ANTHONY ESTENZO, petitioners,
vs.
MINISTRY OF NATIONAL DEFENSE, PHILIPPINE COAST GUARD, and MARIA EFIGENIA SHIPPING
CORP.,respondents.
Manuel A. De Guzman, Danilo M. Garcia and Victorio Mario A. Dimagiba for petitioners.
The Solicitor General for public respondent.
Tividad & Ong-Alvarez for private respondent.
SARMIENTO, J.:
The Court modifies the decision of the respondent, the Philippine Coast Guard, 1 as well as the lst Indorsement, in the nature
of a disposition on appeal, of the respondent, the then Ministry of National Defense, 2 affirming the said decision.
The decision disposed of twin marine protests filed by the petitioner, Captain Edgardo Doruelo, in his capacity as master of
LSCO Petroparcel, a steel tanker owned and operated by the Luzon Stevedoring Corporation, and Patron Delfin Villarosa,
master of MB Maria Efigenia XV, a fishing boat owned and operated by the respondent, Maria Efigenia Shipping
Corporation, arising from a maritime collision between the two vessels on September 21, 1977 resulting in the sinking of the
fishing boat.
The decision disposed of as follows:
WHEREFORE, premises considered, it is hereby ordered that:
(1) Capt . Edgardo Doruelo and Chief Mate Anthony Estenzo be suspended for a period of two (2) years from the practice of
their marine profession and be disqualified to board any vessel as marine officer during the period of suspension.
(2) Patron Delfin Villarosa be exonerated of any liability in the incident but he is hereby admonished and warned not to lose
his cool and composure when faced with a similar situation in the future.
11

This decision shall become final and executory when no appeal is filed with the Minister of National Defense Thirty (30)
days after receipt of a copy thereof.
SO ORDERED. 3
The petitioners then appealed to the Ministry. The Ministry submitted a modified disposition, as follows:
After careful review and consideration of the evidence on record and other allied papers attached thereto, this Office finds the
decision of the Commandant Philippine Coast Guard legally in order. Accordingly; the herein appeal of Capt Edgardo
Daruelo and Chiefmate Anthony ESTENZO of LSCO PETROPARCEL is hereby dismissed for lack of merit. Additionally,
based on the verified information that Capt. DORUELO is involved in another sea collision involving his vessel, thereby
indicating HIS propensity to reckless operation of a watercraft, the penalty of suspension against him is hereby increased
from two (2) years to three (3) years. 4
The findings of the Philippine Coast Guard, so far as material to this petition, are hereinbelow reproduced as follows:
xxx xxx xxx
Evidence clearly shows that LSCO Petroparcel and the two fishing boats, MB Maria Efigenia XV and MB Maria Efigenia
XI, the first towing the latter, were headed in the same direction at the time of the incident with the LSCO Petroparcel as the
overtaking vessel while the fishing boats the overtaken vessels. This is evident from that fact that LSCO Petroparcel, which
was a faster vessel having an operational speed of eight (8) knots, had overtaken the fishing boats in 45 minutes and was
abeam the towing fishing boat now Identified as MB Maria Efigenia XV. Rule 24 of the International Rules of the Road
provides:
(a) Notwithstanding anything contained in these Rules, every vessel overtaking any other shall keep out of the way of the
overtaken vessel."
Pursuant to the above-quoted provision, LSCO Petroparcel as the overtaking vessel was required to keep out of the way of
the overtaken vessels. Capt Doruelo claimed that when he had overtaken and wa sa beam the towing fishing boat, he altered
course to left easy to give leeway to the fishing boat and to an unidentified dry cargo vessel which he allegedly sighted
approaching from the opposite direction when his vessel was abeam the fishing boat. That the latter allegedly followed his
vessel by altering to hard port, so he ordered hard port but still the fishing boat followed until she hit his vessel at her
starboard side. In effect, Capt. Doruelo was trying to impress the Board that he had kept out of the way of the overtaken
fishing boats as required by the above-cited provision, but that the fishing boats followed and, in the process, the towing
fishing boat hit his vessel. The Board, however, did not believe such claim.
The Board observed that when LSCO Petroparcel allegedly altered her course to left easy, she was abeam the towing fishing
boat, MB Maria Efigenia XV, with a distance of 300 meters separating them (per Capt. Doruelo's Marine Protest and Chief
Mate Estenzo's testimony) and travelling at full speed of 8 knots while MB Maria Efigenia XV, which allegedly followed by
also altering her course to hard port, was travelling at a speed of 6 knots and towing another vessel. Under the given
circumstances the Board held that MB Maria Efigenia XV could not have overtaken LSCO Petroparcel and hit the latter at
her starboard side considering her (LSCO Petroparcel) faster speed and head start of 300 meters and the fact that MB Maria
Efigenia XV had a slower speed and towing another fishing boat which further slowed down her speed. 5
xxx xxx xxx
The petitioners' challenges are mainly factual. The rule is that the findings of fact of administrative bodies, if based on
substantial evidence, are controlling on the reviewing authorities. When is evidence "substantial" has been elaborated on,
thus:
... Substantial evidence in more than a mere scintilla. It means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion" "Appalachian Electric Power v. National Labor Relations
Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13,
15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760) ... The
statute provides that the rules of evidence prevailing in courts of law and equity shall not be controlling.
"The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of
12

technical rules so that the mere admission of matter which would be deemed incompetent in judicial
proceedings would not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194
U.S. 25,44 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville &
Nashville R. Co., 227 U.S. 88, 93, 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene & Southern
Ry. Co., 265 U.S. 274, 288, 44 S. Ct. 565,569, 68 Law. ed. 10 16; Tagg Bros & Moorhead v. United states,
280 U.S. 420, 244, 50 S. Ct. 220, 225 74 Law. ed. 624.) But this assurance of a desirable flexibility in
administrative procedure does not go so far as to justify orders without a basis in evidence having rational
probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence.
(Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206,83 Law. ed No. 4. Adv. Op p.
131.) 6
xxxxxxxxx
We find nothing in the decision so questioned that would justify the review sought. On the other hand, we are satisfied,
judging from its thoroughness, that the Philippine Coast Guard (through the Board of Marine Injury) heard the case
judiciously and evaluated the evidence carefully. Such an evidence, appears not only substantial but preponderant as well.
The public respondents' alleged "misconstruance of the facts' 7 is not a ground for review. As we have indicated, we yield to
the Philippine Coast Guard's factual findings because first, it had been called upon to make such findings and second, it was
in a far better position to appraise the pieces of evidence before it. In any case, we cannot say that it had misconstrued the
evidence, simply because it had rejected the petitioners' own. The question is whether or not the evidence utilized to support
the decision can stand scrutiny. Under the circumstances, we find that it can. The petitioners on the other band, with their
naked insistencies alone, have not.
We, however, modify the decision insofar as the respondent Ministry had modified its provisions on the penalty imposable on
the petitioner, Edgardo Doruelo. The Philippine Coast Guard had prescribed a two-year suspension; a prescription reversed
on appeal, and the penalty increased to three years, "based on the verified information that Capt. DORUELO is involved in
another sea collision involving his vessel. thereby indicating his propensity to reckless operation of a watercraft." 8 For
another cardinal rule in administrative adjudication is that "[t]he decision must be rendered on the evidence presented at the
hearing, or at least contained in the record and disclosed to the parties effected." 9 Hence, the respondent Ministry must be
held to be in error in considering evidence not duly presented and in raising the penalty based thereon. If Captain Doruelo is
liable for another sea mishap, let his liability be determined in the proper proceedings.
WHEREFORE, (1) the petition is hereby DISMISSED; and (2) the decision, dated November 21, 1978, insofar as it metes
out the penalty of suspension of two (2) years against the petitioner, Captain Edgardo Doruelo, is REINSTATED.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ., concur.
EN BANC
[G.R. No. 107845. April 18, 1997]
PAT. EDGAR M. GO, INP., petitioner, vs. NATIONAL POLICE COMMISSION, respondent.
DECISION
MENDOZA, J.:
Petitioner Edgar M. Go had been a member of the Olongapo City Police Department since April 18, 1974. On
December 16, 1983, he was dismissed for alleged involvement in illegal gambling, more particularly the operation of jai-alai
bookies. The decision,[1] dated November 24, 1983, of the Summary Dismissal Board No. 2 of the PC/INP Regional
Command No. 3 at Camp Olivas, San Fernando, Pampanga, stated:
Investigation reveals that on 21 January 1983 at about 9:00 oclock in the evening, a team of military personnel raided the
house of the respondent at No. 18 Murphy St., Pag-asa, Olongapo City. The raiding team were able to apprehend fifteen (15)
persons inside the house of PAT. EDGAR GO to include his wife, Minda Go. Lieutenant Paterno Ding PC, the leader of the
13

raiding team was able to confiscate the amount of One Thousand (P1,000.00) Pesos, assorted papelitos, ballpen and
calculator used in the operation of Jai Alai Bookies.
Investigation further reveals that another raid was conducted for the second time at the house of PAT. EDGAR GO. Major
Jaime Garcia, Deputy Commander of Olongapo Metrodiscom Command in his written report to the Olongapo Metrodiscom
Commander stated that on 16 June 1983 PAT. EDGAR GO, together with his brother, Lolito Go were both involved in Jai
Alai Bookies which were being committed right at the house of the respondent. Witnesses like Rodolfo Ablaza and Rolando
dela Fuente admitted that they were the collector of PAT. EDGAR GO and Lolito Go in the operation of Jai Alai Bookies.
It was further discovered during the investigation of the case that the first raid conducted on 21 January 1983, a criminal
complaint was filed before the City Court of Olongapo City against the wife and brother of the respondent respectively. But
PAT. EDGAR GO approached the Metropolitan Commander for a favor to dismiss the case against his wife and brother with
the promise that the Jai Alai activities committed in his residence will be stop once and for all. The Fiscal later on dismissed
the case for insufficiency of evidence for failure on the part of the raiding team to prosecute the case. Moreover, when the
second raid was conducted it was proven that illegal Jai Alai activities was still going on in the residence of the respondent.
On the other hand, respondent inspite of several notices failed to appear before the board in order to refute the charges against
him. The board in its desire to base the instant case with impartiality, objectivity and legality has to postpone the hearing of
the case for several times, just to allow the respondent and his witnesses to appear before the Board, but all our efforts proved
futile with the refusal of the respondent to appear before the Board in spite of all notices duly served to him by the [illegible]
Metropolitan District Command. So, after four (4) months of several postponements, the Board proceeded with the hearing
and considered the non-appearance of the respondent as a waiver on his part to present his evidence.
The Board after receiving both the written and oral evidences/testimonies, has concluded that it would be
inconceivable for an ordinary man to believe that Pat. Edgar Go, a policeman at that, would not be able to know what is
going on inside his own residence, as a matter of fact, he made a promise to the Olongapo Metrodiscom Commander that
such illegal activities will never happened again and yet same was proven to be existing when the second raid was
conducted. While it is true that on 16 June 1983 and 21 January 1983 complainant was in his official assignment, it was
clearly established that PAT. EDGAR GO has the full knowledge on the existence of the illegal Jai Alai activities and even
those apprehended during the first and the second raid implicated the respondent.
PD 1707 in relation to Memorandum agreement between NAPOLCOM and Director General, INP dated November 24, 1980
provides that a syndicate crime and tong collection are serious offenses against an INP members and is therefore within the
jurisdiction of the dismissal authorities.
Petitioner was informed of his dismissal in a memo, dated December 20, 1983, by Lt. Col. Ferdinand A. Lagman,
District Superintendent, INP of the Olongapo Metropolitan District Command. [2] He appealed to the Director General of the
PC/INP, complaining of denial of due process. He claimed that no copy of the complaint with supporting affidavits had been
served on him as required by NAPOLCOM Resolution No. 81-01; that he was simply ordered by radio to appear before the
summary dismissal board for investigation; that he went to attend the hearing on May 9, 1983 but neither the complainant nor
his witnesses were present and he was advised by the boards chairman, a certain Colonel Cinco, to secure the services of a
lawyer for the next hearing; that at the hearing on September 6 or 9, 1983, the members of the board and complainant and his
witnesses were again absent; that the third hearing scheduled on September 21, 1983 was also postponed because of the
absence of the members of the board; that although a hearing had allegedly been held on October 19, 1983, he was not able to
attend it because he had not been previously notified; that he heard nothing more about the case until he was informed of the
decision dismissing him, a copy of which was received by him only on February 20, 1984.
Petitioner claimed that had he been allowed to cross-examine the witnesses against him, he could have shown that
Rodolfo Ablaza and Rolando de la Fuente, who, according to the boards decision said they had worked as jai-alai collectors
of petitioner and his brother, subsequently executed affidavits in which they said they had been misled into signing their prior
statements. Finally, petitioner argued that, in any event, his dismissal should have taken effect only upon his receipt of a copy
of the decision on February 20, 1984 and not on December 16, 1983. He cited his 11 years of service in the police department
and various awards and commendations which had been given to him and prayed that he be exonerated and reinstated to the
police department and paid back salaries, from the time of his dismissal to the time of his reinstatement, and other reliefs to
which he might be entitled.
Petitioners appeal was denied as the Director General of the PC/INP noted in a decision, dated August 21, 1990, that
there appears a factual basis which is legally unassailable for the summary dismissal boards findings. [3]
14

Petitioner appealed to the National Police Commission which likewise dismissed his appeal for utter lack of merit. [4] In
its decision, dated March 5, 1992, the NAPOLCOM held:
The fact that the Jai alai bookies were operating in the house being occupied by herein respondent-appellant, the
apprehension of his wife and brother in two (2) successive raids effected by law-enforcement authority and his intercession
for the dismissal of the case filed in consequence thereof, are tangible proofs that he was, indeed, an accessory - if not a
principal - in said gambling operation.
As to the assertion of respondent-appellant that he was deprived of his right to due process, anchored on the allegation
that he was not served any notice of hearing, it is belied by the records. On several occasions, the Summary Dismissal Board
sent notices to herein respondent-appellant requiring him to appear and present evidence in his behalf, but he ignored said
notices, prompting the Board to proceed with the investigation ex parte.
Hence, this petition for certiorari to set aside the decision of the NAPOLCOM.
Petitioner maintains that he was not served written charges and informed of the nature of such charges; that no hearing
had actually been held by the summary dismissal board; and that at any rate he was not heard.
We find petitioners claim meritorious. Petitioners case was decided under P.D. No. 971, as amended by P.D. No.
1707. While 8-A of the Decree authorizes summary dismissals without the necessity of a formal investigation of members of
the INP when the charge is serious and the evidence is strong, the Decree and the implementing rules nonetheless give the
respondent the right to be furnished a copy of the complaint and to file an answer within three (3) days. This right consists of
the following:
(1) The Hearing Officer or INP Director concerned shall furnish the respondent a copy of the complaint with all the sworn
statements and other documents attached thereto with a notification that on the scheduled date of hearing, the respondent
must submit sworn counter-statements and/or other evidence to disprove the charge, otherwise, the former shall forthwith
recommend his summary removal based on the evidence on hand[5]
(2) Notification of Charges or Complaint; Order to Answer. - The respondent INP member shall be furnished with a copy of
the complaint or charges against him and he shall answer said complaint within three (3) days from receipt thereof, enclosing
therewith pertinent supporting documents or evidences in his behalf. If the respondent fails to answer the charges within the
prescribed period, the Summary Dismissal Authority shall immediately conduct the investigation ex parte.[6]
The filing of charges and the allowance of reasonable opportunity to respondent to answer the charges constitute the
minimum requirements of due process. Thus, in Government Service and Insurance System v. Court of Appeals,[7] 40 of P.D.
No. 807, which similarly authorized the summary dismissals of civil service employees without formal investigation when
the charge is serious and the evidence of guilt is strong, was construed by this Court to require the giving of notice of charges
to a respondent and the right to answer. We said:
We think it is time this Court firms up its position on the validity of Section 40 of the Civil Service Act. It is clear to us that
what the opening sentence of Section 40 is saying is that an employee may be removed or dismissed even without formal
investigation, in certain instances. It is equally clear to us that an employee must be informed of the charges preferred [sic]
against him, and that the normal way by which the employee is so informed is by furnishing him with a copy of the charges
made against him. This is a basic procedural requirement that a statute cannot dispense with and still remains consistent with
the constitutional provision on due process. The second minimum requirement is that the employee charged with some
misfeasance or malfeasance must have a reasonable opportunity to present his side of the matter, that is to say, his defenses
against the charges levelled again him and to present evidence in support of his defenses. The ordinary way by which a Civil
Service employee is given this opportunity is by holding an investigation, in the course of which the employee may assert his
defenses and present his supporting evidence. If Section 40 of the Civil Service Decree is to be saved from
unconstitutionality, it cannot be interpreted or applied in such a manner as to deprive a respondent employee of these two (2)
minimum rights. These are not the only indispensable requirements of procedural due process; they are, however, most
directly involved in the matter of whether or not an investigation of charges against a civil service employee is essential. [8]
The INP record of this case does not show that a formal complaint was ever filed against petitioner. Nor are there attached to
such record supporting affidavits of witnesses, if any, against him. Neither the decision of the board, nor that of the Director
General of the PC/INP denying reconsideration, nor the decision of the NAPOLCOM on appeal contains reference to any
written complaint with supporting affidavits filed against petitioner.
15
Petitioners complaint that he had not been furnished written charges with supporting affidavits merited no more than a
passing mention in the decision of the PC/INP Director General. In his appeal to the NAPOLCOM, petitioner reiterated his
claim, but the decision of this agency, dismissing his appeal, merely rehashed the decision of the Director General. There was
no effort made to deal with the assignment of errors of petitioner.
Indeed, what the summary dismissal board appears to have done in this case was simply to receive the report on two raids
allegedly conducted on petitioners house on January 21, 1983 and on June 16, 1983, in the course of which what were
believed were gambling paraphernalia (money in the amount of P1,000.00, assorted papelitos, a ballpen, and a calculator)
were allegedly found and two witnesses (Rodolfo Ablaza and Rolando de la Fuente) allegedly admitted they were collectors
of petitioner and his brother Lolito Go. But the report, if it was ever in writing, is not in the record of this case which the
NAPOLCOM transmitted to the Court. Nor does the decision of the summary dismissal board disclose on what the supposed
report was based. This is in violation of the rule that in administrative proceedings the decision must be rendered on the
evidence contained in the record and disclosed to the party affected.[9]
In all probability the report of the team which conducted the raids was not even in writing and the supposed testimonies of
the two witnesses were not taken down. This is evident from the decision of the board which, instead of referring to the
testimonies or affidavits of witnesses, repeatedly refers to the results of an investigation. Thus, the decision
states: Investigation reveals . . ., investigation further reveals . . ., It was further discovered during the investigation. . . . It is
clear that the facts found by the board were not the result of any investigation conducted by it but by some other group,
possibly the team that allegedly conducted the raids and that what the board did was simply to rely on their finding.
Under these circumstances there was no way by which petitioner could defend himself. In summary dismissal proceedings,
unless other fully effective means for implementing the constitutional requirement of notice and hearing are devised, it is
mandatory that charges be specified in writing and that the affidavits in support thereof be attached to the complaint because
these are the only ways by which evidence against the respondent can be brought to his knowledge. They take the place of
direct examination of witnesses. The formal investigation, which is dispensed with in summary dismissal proceedings, refers
to the presentation of witnesses by their direct examination and not to the requirement that the respondent in the
administrative case be notified of the charges and given the chance to defend himself.
The Solicitor General argues that petitioner could not have failed to inquire what the charges against him were because he
admits he appeared before the board as ordered. That may be so. Petitioner might have been told what the charge or charges
against him were, but not the details thereof, and, certainly, not what the alleged witnesses against him might have said
because, as already stated, the record of the INP simply did not contain their alleged testimonies.
Nor does it appear that petitioner was heard in his defense. His claim, that thrice he appeared before the summary dismissal
board but no hearing was ever held either because complainant and his witnesses did not appear or the members of the board
were absent or both complainant and witnesses and members of the board were absent, was never specifically denied in any
of the decisions of the administrative authorities, beyond saying that the claim was belied by the record. There is simply
nothing in the INP record of the case to show this. It may be argued that the requirements of due process are satisfied if a
party initially denied a hearing is subsequently granted one by means of motion for reconsideration. [10] That is true indeed if
the charges and the evidence against him are set forth in the record of the case, but not where, as here, they are not. If in his
appeal to the PC/INP Director General, petitioner presented the affidavits of retraction of two of the witnesses against him, it
was only because the decision of the board mentioned that these witnesses allegedly said they had acted as petitioners
collectors and not because their prior statements were in the record.
We conclude that petitioner was denied the due process of law and that not even the fact that the charge against him is serious
and evidence of his guilt is in the opinion of his superiors strong can compensate for the procedural shortcut evident in the
record of this case. It is precisely in cases such as this that the utmost care be exercised lest in the drive to clean up the ranks
of the police those who are innocent are denied justice or, through blunder, those who are guilty are allowed to escape
punishment.
WHEREFORE, the decision of the National Police Commission is ANNULLED and petitioner is ordered REINSTATED
with backwages for five (5) years and paid other benefits and RESTORED in his seniority.
SO ORDERED.
16
EN BANC
HON. EXECUTIVE SECRETARY, G.R. No. 164171
HON. SECRETARY OF THE
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS (DOTC),
COMMISSIONER OF CUSTOMS,
ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO),
COLLECTOR OF CUSTOMS, SUBIC
BAY FREE PORT ZONE, AND CHIEF
OF LTO, SUBIC BAY FREE PORT ZONE,
SOUTHWING HEAVY INDUSTRIES,
INC., represented by its President JOSE
T. DIZON, UNITED AUCTIONEERS,
INC., represented by its President
DOMINIC SYTIN, and MICROVAN,
INC., represented by its President
MARIANO C. SONON,
Respondents.
x -------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
The instant consolidated petitions seek to annul and set aside the Decisions of the Regional Trial Court
of Olongapo City, Branch 72, in Civil Case No. 20-0-04 and Civil Case No. 22-0-04, both dated May 24, 2004; and the
February 14, 2005 Decision of the Court of Appeals in CA-G.R. SP. No. 83284, which declared Article 2, Section 3.1 of
Executive Order No. 156 (EO 156) unconstitutional. Said executive issuance prohibits the importation into the country,
inclusive of the Special Economic and Freeport Zone or the Subic Bay Freeport (SBF or Freeport), of used motor vehicles,
subject to a few exceptions.
The undisputed facts show that on December 12, 2002, President Gloria Macapagal-Arroyo, through Executive
Secretary Alberto G. Romulo, issued EO 156, entitledPROVIDING FOR A COMPREHENSIVE INDUSTRIAL POLICY
AND DIRECTIONS FOR THE MOTOR VEHICLE DEVELOPMENT PROGRAM AND ITS IMPLEMENTING
GUIDELINES. The challenged provision states:
3.1 The importation into the country, inclusive of the Freeport, of all types of used motor
vehicles is prohibited, except for the following:
3.1.1 A vehicle that is owned and for the personal use of a returning resident or immigrant and
covered by an authority to import issued under the No-dollar Importation Program. Such vehicles cannot be
resold for at least three (3) years;
3.1.2 A vehicle for the use of an official of the Diplomatic Corps and authorized to be imported by
the Department of Foreign Affairs;
3.1.3 Trucks excluding pickup trucks;
17

1. with GVW of 2.5-6.0 tons covered by an authority to import issued by the DTI.
2. With GVW above 6.0 tons.
3.1.4 Buses:
1. with GVW of 6-12 tons covered by an authority to import issued by DTI;
2. with GVW above 12 tons.
3.1.5 Special purpose vehicles:
1.
fire trucks
2.
ambulances
3.
funeral hearse/coaches
4.
crane lorries
5.
tractor heads and truck tractors
6.
boom trucks
7.
tanker trucks
8.
tank lorries with high pressure spray gun
9.
reefers or refrigerated trucks
10. mobile drilling derricks
11. transit/concrete mixers
12. mobile radiological units
13. wreckers or tow trucks
14. concrete pump trucks
15. aerial/bucket flat-form trucks
16. street sweepers
17. vacuum trucks
18. garbage compactors
19. self loader trucks
20. man lift trucks
21. lighting trucks
22. trucks mounted with special purpose equipment
23. all other types of vehicle designed for a specific use.
The issuance of EO 156 spawned three separate actions for declaratory relief before Branch 72 of
the Regional Trial Court of Olongapo City, all seeking the declaration of the unconstitutionality of Article 2, Section 3.1 of
said executive order. The cases were filed by herein respondent entities, who or whose members, are classified as Subic Bay
Freeport Enterprises and engaged in the business of, among others, importing and/or trading used motor vehicles.
G.R. No. 164171:
On January 16, 2004, respondents Southwing Heavy Industries, Inc., (SOUTHWING) United Auctioneers, Inc.
(UNITED AUCTIONEERS), and Microvan, Inc. (MICROVAN), instituted a declaratory relief case docketed as Civil Case
No. 20-0-04,[1] against the Executive Secretary, Secretary of Transportation and Communication, Commissioner of Customs,
Assistant Secretary and Head of the Land Transportation Office, Subic Bay Metropolitan Authority (SBMA), Collector of
Customs for the Port atSubic Bay Freeport Zone, and the Chief of the Land Transportation Office at Subic Bay Freeport
Zone.
SOUTHWING, UNITED AUCTIONEERS and MICROVAN prayed that judgment be rendered (1) declaring Article
2, Section 3.1 of EO 156 unconstitutional and illegal; (2) directing the Secretary of Finance, Commissioner of Customs,
Collector of Customs and the Chairman of the SBMA to allow the importation of used motor vehicles; (2) ordering the Land
Transportation Office and its subordinates inside the Subic Special Economic Zone to process the registration of the imported
used motor vehicles; and (3) in general, to allow the unimpeded entry and importation of used motor vehicles subject only to
the payment of the required customs duties.
Upon filing of petitioners answer/comment, respondents SOUTHWING and MICROVAN filed a motion for
summary judgment which was granted by the trial court. OnMay 24, 2004, a summary judgment was rendered declaring that
Article 2, Section 3.1 of EO 156 constitutes an unlawful usurpation of legislative power vested by the Constitution with
Congress. The trial court further held that the proviso is contrary to the mandate of Republic Act No. 7227 (RA 7227) or the
18

Bases Conversion and Development Act of 1992 which allows the free flow of goods and capital within the Freeport. The
dispositive portion of the said decision reads:
WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive Order 156
[Article 2, Section] 3.1 for being unconstitutional and illegal; directing respondents Collector of Customs
based at SBMA to allow the importation and entry of used motor vehicles pursuant to the mandate of RA
7227; directing respondent Chief of the Land Transportation Office and its subordinates inside
the Subic Special Economic Zone or SBMA to process the registration of imported used motor vehicle; and
in general, to allow unimpeded entry and importation of used motor vehicles to the Philippines subject only
to the payment of the required customs duties.
SO ORDERED.[2]
From the foregoing decision, petitioners sought relief before this Court via a petition for review on certiorari,
docketed as G.R. No. 164171.
G.R. No. 164172:
On January 20, 2004, respondent Subic Integrated Macro Ventures Corporation (MACRO VENTURES) filed with the same
trial court, a similar action for declaratory relief docketed as Civil Case No. 22-0-04, [3] with the same prayer and against the
same parties[4] as those in Civil Case No. 20-0-04.
In this case, the trial court likewise rendered a summary judgment on May 24, 2004, holding that Article 2, Section
3.1 of EO 156, is repugnant to the constitution. [5]Elevated to this Court via a petition for review on certiorari, Civil Case No.
22-0-04 was docketed as G.R. No. 164172.
G.R. No. 168741
On January 22, 2003, respondent Motor Vehicle Importers Association of Subic Bay Freeport, Inc.
(ASSOCIATION), filed another action for declaratory relief with essentially the same prayer as those in Civil Case No. 22-004 and Civil Case No. 20-0-04, against the Executive Secretary, Secretary of Finance, Chief of the Land Transportation
Office, Commissioner of Customs, Collector of Customs at SBMA and the Chairman of SBMA. This was docketed as Civil
Case No. 30-0-2003,[6] before the same trial court.
In a decision dated March 10, 2004, the court a quo granted the ASSOCIATIONs prayer and declared the assailed
proviso as contrary to the Constitution, to wit:
WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive Order 156
[Article 2, Section] 3.1 for being unconstitutional and illegal; directing respondents Collector of Customs
based at SBMA to allow the importation and entry of used motor vehicles pursuant to the mandate of RA
7227; directing respondent Chief of the Land Transportation Office and its subordinates inside
the Subic Special Economic Zone or SBMA to process the registration of imported used motor vehicles;
directing the respondent Chairman of the SBMA to allow the entry into the Subic Special Economic Zone
or SBMA imported used motor vehicle; and in general, to allow unimpeded entry and importation of used
motor vehicles to the Philippines subject only to the payment of the required customs duties.
SO ORDERED.[7]
Aggrieved, the petitioners in Civil Case No. 30-0-2003, filed a petition for certiorari [8] with the Court of Appeals
(CA-G.R. SP. No. 83284) which denied the petition onFebruary 14, 2005 and sustained the finding of the trial court that
Article 2, Section 3.1 of EO 156, is void for being repugnant to the constitution. The dispositive portion thereof, reads:
WHEREFORE, the instant petition for certiorari is hereby DENIED. The assailed decision of the
Regional Trial Court, Third Judicial Region, Branch 72, Olongapo City, in Civil Case No. 30-0-2003,
accordingly, STANDS.
19

SO ORDERED.[9]
The aforequoted decision of the Court of Appeals was elevated to this Court and docketed as G.R. No. 168741. In a
Resolution dated October 4, 2005,[10] said case was consolidated with G.R. No. 164171 and G.R. No. 164172.
Petitioners are now before this Court contending that Article 2, Section 3.1 of EO 156 is valid and applicable to the
entire country, including the Freeeport. In support of their arguments, they raise procedural and substantive issues bearing on
the constitutionality of the assailed proviso. The procedural issues are: the lack of respondents locusstandi to question the
validity of EO 156, the propriety of challenging EO 156 in a declaratory relief proceeding and the applicability of a judgment
on the pleadings in this case.
Petitioners argue that respondents will not be affected by the importation ban considering that their certificate of
registration and tax exemption do not authorize them to engage in the importation and/or trading of used cars. They also aver
that the actions filed by respondents do not qualify as declaratory relief cases. Section 1, Rule 63 of the Rules of Court
provides that a petition for declaratory relief may be filed before there is a breach or violation of rights. Petitioners claim that
there was already a breach of respondents supposed right because the cases were filed more than a year after the issuance of
EO 156. In fact, in Civil Case No. 30-0-2003, numerous warrants of seizure and detention were issued against imported used
motor vehicles belonging to respondent ASSOCIATIONs members.
Petitioners arguments lack merit.
The established rule that the constitutionality of a law or administrative issuance can be challenged by one who will
sustain a direct injury as a result of its enforcement [11]has been satisfied in the instant case. The broad subject of the prohibited
importation is all types of used motor vehicles. Respondents would definitely suffer a direct injury from the implementation
of EO 156 because their certificate of registration and tax exemption authorize them to trade and/or import new and
used motor vehicles and spare parts, except used cars.[12] Other types of motor vehicles imported and/or traded by
respondents and not falling within the category of used cars would thus be subjected to the ban to the prejudice of their
business. Undoubtedly, respondents have the legal standing to assail the validity of EO 156.
As to the propriety of declaratory relief as a vehicle for assailing the executive issuance, suffice it to state that any
breach of the rights of respondents will not affect the case. In Commission on Audit of the Province of Cebu v. Province
of Cebu,[13] the Court entertained a suit for declaratory relief to finally settle the doubt as to the proper interpretation of the
conflicting laws involved, notwithstanding a violation of the right of the party affected. We find no reason to deviate from
said ruling mindful of the significance of the present case to the national economy.
So also, summary judgments were properly rendered by the trial court because the issues involved in the instant case
were pure questions of law. A motion for summary judgment is premised on the assumption that the issues presented need not
be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact. It is a
method sanctioned by the Rules of Court for the prompt disposition of a civil action in which the pleadings raise only a legal
issue, not a genuine issue as to any material fact.[14]
At any rate, even assuming the procedural flaws raised by petitioners truly exist, the Court is not precluded from
brushing aside these technicalities and taking cognizance of the action filed by respondents considering its importance to the
public and in keeping with the duty to determine whether the other branches of the government have kept themselves within
the limits of the Constitution.[15]
We now come to the substantive issues, which are: (1) whether there is statutory basis for the issuance of EO 156;
and (2) if the answer is in the affirmative, whether the application of Article 2, Section 3.1 of EO 156, reasonable and within
the scope provided by law.
The main thrust of the petition is that EO 156 is constitutional because it was issued pursuant to EO 226, the
Omnibus Investment Code of the Philippines and that its application should be extended to the Freeport because the
guarantee of RA 7227 on the free flow of goods into the said zone is merely an exemption from customs duties and taxes on
items brought into the Freeport and not an open floodgate for all kinds of goods and materials without restriction.
20

In G.R. No. 168741, the Court of Appeals invalidated Article 2, Section 3.1 of EO 156, on the ground of lack of any
statutory basis for the President to issue the same. It held that the prohibition on the importation of used motor vehicles is an
exercise of police power vested on the legislature and absent any enabling law, the exercise thereof by the President through
an executive issuance, is void.
Police power is inherent in a government to enact laws, within constitutional limits, to promote the order, safety,
health, morals, and general welfare of society. It is lodged primarily with the legislature. By virtue of a valid delegation of
legislative power, it may also be exercised by the President and administrative boards, as well as the lawmaking bodies on all
municipal levels, including the barangay.[16] Such delegation confers upon the President quasi-legislative power which may
be defined as the authority delegated by the law-making body to the administrative body to adopt rules and regulations
intended to carry out the provisions of the law and implement legislative policy.[17] To be valid, an administrative issuance,
such as an executive order, must comply with the following requisites:
(1) Its promulgation must be authorized by the legislature;
(2) It must be promulgated in accordance with the prescribed procedure;
(3) It must be within the scope of the authority given by the legislature; and
(4) It must be reasonable.[18]
Contrary to the conclusion of the Court of Appeals, EO 156 actually satisfied the first requisite of a valid
administrative order. It has both constitutional and statutory bases.
Delegation of legislative powers to the President is permitted in Section 28(2) of Article VI of the Constitution. It
provides:
(2) The Congress may, by law, authorize the President to fix within specified limits, and subject to
such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage
and wharfage dues, and other duties or imposts within the framework of the national development program
of the Government.[19] (Emphasis supplied)
The relevant statutes to execute this provision are:
1) The Tariff and Customs Code which authorizes the President, in the interest of national economy, general
welfare and/or national security, to, inter alia, prohibit the importation of any commodity. Section 401 thereof, reads:
Sec. 401. Flexible Clause.
a. In the interest of national economy, general welfare and/or national security, and subject
to the limitations herein prescribed, the President, upon recommendation of the National Economic
and Development Authority (hereinafter referred to as NEDA), is hereby empowered: x x x (2) to
establish import quota or to ban imports of any commodity, as may be necessary; x x x Provided, That
upon periodic investigations by the Tariff Commission and recommendation of the NEDA, the President
may cause a gradual reduction of protection levels granted in Section One hundred and four of this Code,
including those subsequently granted pursuant to this section. (Emphasis supplied)
2) Executive Order No. 226, the Omnibus Investment Code of the Philippines which was issued on July 16, 1987,
by then President Corazon C. Aquino, in the exercise of legislative power under the Provisional Freedom Constitution,
[20]
empowers the President to approve or reject the prohibition on the importation of any equipment or raw materials or
finished products. Pertinent provisions thereof, read:
ART. 4. Composition of the board. The Board of Investments shall be composed of seven (7)
governors: The Secretary of Trade and Industry, three (3) Undersecretaries of Trade and Industry to be
chosen by the President; and three (3) representatives from the government agencies and the private sector
x x x.
ART. 7. Powers and duties of the Board.
21
xxxx
(12) Formulate and implement rationalization programs for certain industries whose operation
may result in dislocation, overcrowding or inefficient use of resources, thus impeding economic
growth. For this purpose, the Board may formulate guidelines for progressive manufacturing programs,
local content programs, mandatory sourcing requirements and dispersal of industries. In appropriate cases
and upon approval of the President, the Board may restrict, either totally or partially, the
importation of any equipment or raw materials or finished products involved in the rationalization
program; (Emphasis supplied)
3) Republic Act No. 8800, otherwise known as the Safeguard Measures Act (SMA), and entitled An Act Protecting
Local Industries By Providing Safeguard Measures To Be Undertaken In Response To Increased Imports And Providing
Penalties For Violation Thereof,[21] designated the Secretaries[22] of the Department of Trade and Industry (DTI) and the
Department of Agriculture, in their capacity as alter egos of the President, as the implementing authorities of the safeguard
measures, which include, inter alia, modification or imposition of any quantitative restriction on the importation of a product
into the Philippines. The purpose of the SMA is stated in the declaration of policy, thus:
SEC. 2. Declaration of Policy. The State shall promote competitiveness of domestic industries and
producers based on sound industrial and agricultural development policies, and efficient use of human,
natural and technical resources. In pursuit of this goal and in the public interest, the State shall provide
safeguard measures to protect domestic industries and producers from increased imports which cause or
threaten to cause serious injury to those domestic industries and producers.
There are thus explicit constitutional and statutory permission authorizing the President to ban or regulate
importation of articles and commodities into the country.
Anent the second requisite, that is, that the order must be issued or promulgated in accordance with the prescribed
procedure, it is necessary that the nature of the administrative issuance is properly determined. As in the enactment of laws,
the general rule is that, the promulgation of administrative issuances requires previous notice and hearing, the only exception
being where the legislature itself requires it and mandates that the regulation shall be based on certain facts as determined at
an appropriate investigation.[23] This exception pertains to the issuance of legislative rules as distinguished
from interpretative rules which give no real consequence more than what the law itself has already prescribed; [24] and are
designed merely to provide guidelines to the law which the administrative agency is in charge of enforcing. [25] A legislative
rule, on the other hand, is in the nature of subordinate legislation, crafted to implement a primary legislation.
In Commissioner of Internal Revenue v. Court of Appeals,[26] and Commissioner of Internal Revenue v. Michel
J. Lhuillier Pawnshop, Inc.,[27] the Court enunciated the doctrine that when an administrative rule goes beyond merely
providing for the means that can facilitate or render less cumbersome the implementation of the law and substantially
increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be
heard and, thereafter, to be duly informed, before the issuance is given the force and effect of law.
In the instant case, EO 156 is obviously a legislative rule as it seeks to implement or execute primary legislative
enactments intended to protect the domestic industry by imposing a ban on the importation of a specified product not
previously subject to such prohibition. The due process requirements in the issuance thereof are embodied in Section401 [28] of
the Tariff and Customs Code and Sections 5 and 9 of the SMA [29] which essentially mandate the conduct of investigation and
public hearings before the regulatory measure or importation ban may be issued.
In the present case, respondents neither questioned before this Court nor with the courts below the procedure that
paved the way for the issuance of EO 156. What they challenged in their petitions before the trial court was the absence of
substantive due process in the issuance of the EO. [30] Their main contention before the court a quo is that the importation ban
is illogical and unfair because it unreasonably drives them out of business to the prejudice of the national economy.
Considering the settled principle that in the absence of strong evidence to the contrary, acts of the other branches of
the government are presumed to be valid,[31] and there being no objection from the respondents as to the procedure in the
promulgation of EO 156, the presumption is that said executive issuance duly complied with the procedures and limitations
imposed by law.
22
To determine whether EO 156 has complied with the third and fourth requisites of a valid administrative issuance, to
wit, that it was issued within the scope of authority given by the legislature and that it is reasonable, an examination of the
nature of a Freeport under RA 7227 and the primordial purpose of the importation ban under the questioned EO is necessary.
RA 7227 was enacted providing for, among other things, the sound and balanced conversion of the Clark
and Subic military reservations and their extensions into alternative productive uses in the form of Special Economic and
Freeport Zone, or the Subic Bay Freeport, in order to promote the economic and social development of Central Luzon in
particular and the country in general.
The Rules and Regulations Implementing RA 7227 specifically defines the territory comprising the Subic Bay
Freeport, referred to as the Special Economic and Freeport Zone in Section 12 of RA 7227 as "a separate customs territory
consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied by
the Subic Naval Base and its contiguous extensions as embraced, covered and defined by the 1947 Philippine-U.S. Military
Base Agreement as amended and within the territorial jurisdiction of Morong and Hermosa, Province of Bataan, the metes
and bounds of which shall be delineated by the President of the Philippines; provided further that pending establishment of
secure perimeters around the entire SBF, the SBF shall refer to the area demarcated by the SBMA pursuant to Section
13[32] hereof."
Among the salient provisions of RA 7227 are as follows:

SECTION 12. Subic Special Economic Zone.
xxxx
The abovementioned zone shall be subject to the following policies:
xxxx
(a) Within the framework and subject to the mandate and limitations of the Constitution and the
pertinent provisions of the Local Government Code, the Subic Special Economic Zone shall be developed
into a self-sustaining, industrial, commercial, financial and investment center to generate employment
opportunities in and around the zone and to attract and promote productive foreign investments;
(b) The Subic Special Economic Zone shall be operated and managed as a separate customs
territory ensuring free flow or movement of goods and capital within, into and exported out of
the Subic Special Economic Zone, as well as provide incentives such as tax and duty-free importations of
raw materials, capital and equipment. However, exportation or removal of goods from the territory of
the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs
duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines;
The Freeport was designed to ensure free flow or movement of goods and capital within a portion of the Philippine
territory in order to attract investors to invest their capital in a business climate with the least governmental intervention. The
concept of this zone was explained by Senator Guingona in this wise:
Senator Guingona. Mr. President, the special economic zone is successful in many places,
particularly Hong Kong, which is a free port. The difference between a special economic zone and an
industrial estate is simply expansive in the sense that the commercial activities, including the establishment
of banks, services, financial institutions, agro-industrial activities, maybe agriculture to a certain extent.
This delineates the activities that would have the least of government intervention, and the
running of the affairs of the special economic zone would be run principally by the investors
23

themselves, similar to a housing subdivision, where the subdivision owners elect their representatives
to run the affairs of the subdivision, to set the policies, to set the guidelines.
We would like to see Subic area converted into a little Hong Kong, Mr. President, where
there is a hub of free port and free entry, free duties and activities to a maximum spur generation of
investment and jobs.
While the investor is reluctant to come in the Philippines, as a rule, because of red tape and
perceived delays, we envision this special economic zone to be an area where there will be minimum
government interference.
The initial outlay may not only come from the Government or the Authority as envisioned here,
but from them themselves, because they would be encouraged to invest not only for the land but also for
the buildings and factories. As long as they are convinced that in such an area they can do business and
reap reasonable profits, then many from other parts, both local and foreign, would invest, Mr. President.
[33]
(Emphasis, added)
With minimum interference from the government, investors can, in general, engage in any kind of business as well
as import and export any article into and out of theFreeport. These are among the rights accorded to Subic Bay Freeport
Enterprises under Section 39 of the Rules and Regulations Implementing RA 7227, thus
SEC. 39. Rights and Obligations.- SBF Enterprises shall have the following rights and obligations:
a. To freely engage in any business, trade, manufacturing, financial or service activity, and to import and
export freely all types of goods into and out of the SBF, subject to the provisions of the Act, these
Rules and other regulations that may be promulgated by the SBMA;
Citing, inter alia, the interpellations of Senator Enrile, petitioners claim that the free flow or movement of goods and
capital only means that goods and material brought within the Freeport shall not be subject to customs duties and other taxes
and should not be construed as an open floodgate for entry of all kinds of goods. They thus surmise that the importation ban
on motor vehicles is applicable within the Freeport. Pertinent interpellations of Senator Enrile on the concept of Freeport is as
follows:
Senator Enrile: Mr. President, I think we are talking here of sovereign concepts, not territorial
concepts. The concept that we are supposed to craft here is to carve out a portion of our terrestrial domain
as well as our adjacent waters and say to the world: Well, you can set up your factories in this area that we
are circumscribing, and bringing your equipment and bringing your goods, you are not subject to any taxes
and duties because you are not within the customs jurisdiction of the Republic of the Philippines, whether
you store the goods or only for purposes of transshipment or whether you make them into finished products
again to be reexported to other lands.
xxxx
My understanding of a free port is, we are in effect carving out a part of our territory and
make it as if it were foreign territory for purposes of our customs laws, and that people can come,
bring their goods, store them there and bring them out again, as long as they do not come into the
domestic commerce of the Republic.
We do not really care whether these goods are stored here. The only thing that we care is for our
people to have an employment because of the entry of these goods that are being discharged, warehoused
and reloaded into the ships so that they can be exported. That will generate employment for us. For as long
as that is done, we are saying, in effect, that we have the least contact with our tariff and customs laws and
our tax laws. Therefore, we consider these goods as outside of the customs jurisdiction of the Republic of
the Philippines as yet, until we draw them from this territory and bring them inside our domestic
commerce. In which case, they have to pass through our customs gate. I thought we are carving out this
entire area and convert it into this kind of concept.[34]
24
However, contrary to the claim of petitioners, there is nothing in the foregoing excerpts which absolutely limits the
incentive to Freeport investors only to exemption from customs duties and taxes. Mindful of the legislative intent to attract
investors, enhance investment and boost the economy, the legislature could not have limited the enticement only to
exemption from taxes. The minimum interference policy of the government on the Freeport extends to the kind of business
that investors may embark on and the articles which they may import or export into and out of the zone. A contrary
interpretation would defeat the very purpose of the Freeport and drive away investors.
It does not mean, however, that the right of Freeport enterprises to import all types of goods and article is
absolute. Such right is of course subject to the limitation that articles absolutely prohibited by law cannot be imported into
the Freeport.[35] Nevertheless, in determining whether the prohibition would apply to the Freeport, resort to the purpose of the
prohibition is necessary.
In issuing EO 156, particularly the prohibition on importation under Article 2, Section 3.1, the President envisioned
to rationalize the importation of used motor vehicles and to enhance the capabilities of the Philippine motor manufacturing
firms to be globally competitive producers of completely build-up units and their parts and components for the local and
export markets.[36] In justifying the issuance of EO 156, petitioners alleged that there has been a decline in the sales of new
vehicles and a remarkable growth of the sales of imported used motor vehicles. To address the same, the President issued the
questioned EO to prevent further erosion of the already depressed market base of the local motor vehicle industry and to
curtail the harmful effects of the increase in the importation of used motor vehicles.[37]
Taking our bearings from the foregoing discussions, we hold that the importation ban runs afoul the third
requisite for a valid administrative order. To be valid, an administrative issuance must not be ultra vires or beyond the limits
of the authority conferred. It must not supplant or modify the Constitution, its enabling statute and other existing laws, for
such is the sole function of the legislature which the other branches of the government cannot usurp. As held in United BF
Homeowners Association v. BF Homes, Inc.:[38]
The rule-making power of a public administrative body is a delegated legislative power, which it
may not use either to abridge the authority given it by Congress or the Constitution or to enlarge its power
beyond the scope intended. Constitutional and statutory provisions control what rules and regulations may
be promulgated by such a body, as well as with respect to what fields are subject to regulation by it. It may
not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute,
particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the
purpose of a statute.
In the instant case, the subject matter of the laws authorizing the President to regulate or forbid importation of used
motor vehicles, is the domestic industry. EO 156, however, exceeded the scope of its application by extending the
prohibition on the importation of used cars to the Freeport, which RA 7227, considers to some extent, a foreign territory.
The domestic industry which the EO seeks to protect is actually the customs territory which is defined under the Rules and
Regulations Implementing RA 7227, as follows:
the portion of the Philippines outside the Subic Bay Freeport where the Tariff and Customs Code of
the Philippines and other national tariff and customs laws are in force and effect.[39]
The proscription in the importation of used motor vehicles should be operative only outside the Freeport and the
inclusion of said zone within the ambit of the prohibition is an invalid modification of RA 7227. Indeed, when the application
of an administrative issuance modifies existing laws or exceeds the intended scope, as in the instant case, the issuance
becomes void, not only for being ultra vires, but also for being unreasonable.
This brings us to the fourth requisite. It is an axiom in administrative law that administrative authorities should not
act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be
reasonable and fairly adapted to secure the end in view. If shown to bear no reasonable relation to the purposes for which
they were authorized to be issued, then they must be held to be invalid.[40]
25

There is no doubt that the issuance of the ban to protect the domestic industry is a reasonable exercise of police
power. The deterioration of the local motor manufacturing firms due to the influx of imported used motor vehicles is an
urgent national concern that needs to be swiftly addressed by the President. In the exercise of delegated police power, the
executive can therefore validly proscribe the importation of these vehicles. Thus, in Taxicab Operators of Metro Manila, Inc.
v. Board of Transportation,[41] the Court held that a regulation phasing out taxi cabs more than six years old is a valid exercise
of police power. The regulation was sustained as reasonable holding that the purpose thereof was to promote the convenience
and comfort and protect the safety of the passengers.
The problem, however, lies with respect to the application of the importation ban to the Freeport. The Court finds no
logic in the all encompassing application of the assailed provision to the Freeport which is outside the customs territory. As
long as the used motor vehicles do not enter the customs territory, the injury or harm sought to be prevented or remedied will
not arise. The application of the law should be consistent with the purpose of and reason for the law. Ratione cessat lex,
et cessat lex. When the reason for the law ceases, the law ceases. It is not the letter alone but the spirit of the law also that
gives it life.[42] To apply the proscription to the Freeport would not serve the purpose of the EO. Instead of improving the
general economy of the country, the application of the importation ban in the Freeport would subvert the avowed purpose of
RA 7227 which is to create a market that would draw investors and ultimately boost the national economy.
In similar cases, we also declared void the administrative issuance or ordinances concerned for being
unreasonable. To illustrate, in De la Cruz v. Paras,[43] the Court held as unreasonable and unconstitutional an ordinance
characterized by overbreadth. In that case, the Municipality of Bocaue, Bulacan, prohibited the operation of all night clubs,
cabarets and dance halls within its jurisdiction for the protection of public morals. As explained by the Court:
x x x It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under
the term reasonable. The objective of fostering public morals, a worthy and desirable end can be attained
by a measure that does not encompass too wide a field. Certainly the ordinance on its face is characterized
by overbreadth. The purpose sought to be achieved could have been attained by reasonable restrictions
rather than by an absolute prohibition. The admonition in Salaveria should be heeded: The Judiciary
should not lightly set aside legislative action when there is not a clear invasion of personal or property
rights under the guise of police regulation. It is clear that in the guise of a police regulation, there was in
this instance a clear invasion of personal or property rights, personal in the case of those individuals
desirous of patronizing those night clubs and property in terms of the investments made and salaries to be
earned by those therein employed.
Lupangco v. Court of Appeals,[44] is a case involving a resolution issued by the Professional Regulation Commission
which prohibited examinees from attending review classes and receiving handout materials, tips, and the like three days
before the date of examination in order to preserve the integrity and purity of the licensure examinations in accountancy.
Besides being unreasonable on its face and violative of academic freedom, the measure was found to be more sweeping than
what was necessary, viz:
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages
in the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by
depriving them of legitimate means of review or preparation on those last three precious days when they
should be refreshing themselves with all that they have learned in the review classes and preparing their
mental and psychological make-up for the examination day itself would be like uprooting the tree to get rid
of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages
and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it.
Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up
and if violations are committed, then licenses should be suspended or revoked. x x x
In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,[45] the Court likewise struck down as unreasonable
and overbreadth a city ordinance granting an exclusive franchise for 25 years, renewable for another 25 years, to one entity
for the construction and operation of one common bus and jeepney terminal facility in Lucena City. While professedly aimed
towards alleviating the traffic congestion alleged to have been caused by the existence of various bus and jeepney terminals
within the city, the ordinance was held to be beyond what is reasonably necessary to solve the traffic problem in the city.
26

By parity of reasoning, the importation ban in this case should also be declared void for its too sweeping and
unnecessary application to the Freeport which has no bearing on the objective of the prohibition. If the aim of the EO is to
prevent the entry of used motor vehicles from the Freeport to the customs territory, the solution is not to forbid entry of these
vehicles into the Freeport, but to intensify governmental campaign and measures to thwart illegal ingress of used motor
vehicles into the customs territory.
At this juncture, it must be mentioned that on June 19, 1993, President Fidel V. Ramos issued Executive Order No.
97-A, Further Clarifying The Tax And Duty-Free Privilege Within The Subic Special Economic And Free Port Zone, Section
1 of which provides:
SECTION 1. The following guidelines shall govern the tax and duty-free privilege within
the Secured Area of the Subic Special Economic and Free Port Zone:
1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the
only completely tax and duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and
foreigners) residing within the Secured Area are free to import raw materials, capital goods, equipment, and
consumer items tax and dutry-free. Consumption items, however, must be consumed within the Secured
Area. Removal of raw materials, capital goods, equipment and consumer items out of the Secured Area for
sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties, except as may be
provided herein.
In Tiu v. Court of Appeals[46] as reiterated in Coconut Oil Refiners Association, Inc. v. Torres,[47] this provision
limiting the special privileges on tax and duty-free importation in the presently fenced-in former Subic Naval Base has been
declared valid and constitutional and in accordance with RA 7227. Consistent with these rulings and for easier management
and monitoring of activities and to prevent fraudulent importation of merchandise and smuggling, the free flow and
importation of used motor vehicles shall be operative only within the secured area.
In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void insofar as it is made applicable to the presently
secured fenced-in former Subic Naval Base area as stated in Section 1.1 of EO 97-A. Pursuant to the separability clause[48] of
EO 156, Section 3.1 is declared valid insofar as it applies to the customs territory or the Philippine territory outside the
presently secured fenced-in former Subic Naval Base area as stated in Section 1.1 of EO 97-A. Hence, used motor vehicles
that come into the Philippine territory via the secured fenced-in former Subic Naval Base area may be stored, used or traded
therein, or exported out of the Philippine territory, but they cannot be imported into the Philippine territory outside of the
secured fenced-in former Subic Naval Base area.
WHEREFORE, the petitions are PARTIALLY GRANTED and the May 24, 2004 Decisions of Branch 72, Regional Trial
Court of Olongapo City, in Civil Case No. 20-0-04 and Civil Case No. 22-0-04; and the February 14, 2005 Decision of the
Court of Appeals in CA-G.R. SP No. 63284, are MODIFIED insofar as they declared Article 2, Section 3.1 of Executive
Order No. 156, void in its entirety.
Said provision is declared VALID insofar as it applies to the Philippine territory outside the presently fenced-in
former Subic Naval Base area and VOID with respect to its application to the secured fenced-in former Subic Naval Base
area.
SO ORDERED.
27

SUPREME COURT
Manila
EN BANC
G.R. No. 115147 January 4, 1995
GEORGE I. RIVERA, petitioner,
vs.
CIVIL SERVICE COMMISSION and LAND BANK OF THE PHILIPPINES, respondents.
RESOLUTION
VITUG, J.:
This petition for certiorari assails the resolution, dated 25 March 1993, of respondent Civil Service Commission ("CSC")
relative to an administrative case, entitled "Land Bank of the Philippines vs. George I. Rivera," as well as its resolution, dated
03 March 1994, denying the motion for reconsideration.
Petitioner George I. Rivera was the Manager of Corporate Banking Unit I of the Land Bank of the Philippines ("LBP"). On
the basis of the affidavits of William Lao and Jesus C. Perez, petitioner was charged, on 01 February 1988, by the LBP
President with having committed the following offenses:
(1) Dishonesty;
(2) Receiving for personal use of fee, gift or other valuable thing, in the course of official duties or in
connection therewith when such fee, gift, or other valuable thing is given by any person in the hope or
expectation of receiving a favor or better treatment than that accorded other persons;
(3) Committing acts punishable under the Anti-Graft laws;
(4) Pursuit of private business vocation or profession without the permission required by Civil Service
Rules and regulations;
(5) Violation of Res. 87-A, R.A. No. 337; resulting to misconduct and conduct prejudicial to the best
interest of the service. 1
Rivera allegedly told Perez, the Marketing Manager of Wynner which had a pending loan application with LBP, that he could
facilitate the processing, approval and release of the loan if he would be given a ten percent (10%) commission. Rivera was
said to have subsequently received a P200,000.00 commission out of the P3,000,000.00 loan proceeds from the LBP. From
Lao, who had substantial investments in Wynner, Rivera supposedly likewise received the amount of approximately
P20,000.00 pocket money for his trip to the United States, as well as additional funds for his plane ticket, hotel
accommodations and pocket money for still another trip to Hongkong.
Rivera was further charged with, among other things, having served and acted, without prior authority required by Civil
Service Rules and Memorandum Circular No. 1025 of the Office of the President of the Philippines, as the personal
consultant of Lao and as consultant in various companies where Lao had investments. He drew and received salaries and
allowances approximately P20,000.00 a month evidenced by vouchers of Edge Apparel, Inc., J & M Clothing Corporation,
and JME Trading Corporation.
Once the charges were filed, Rivera was placed under preventive suspension (effective 19 February 1988). After a formal
investigation, the LBP held Rivera guilty of grave misconduct and acts prejudicial to the best interest of the service in
accepting employment from a client of the bank and in thereby receiving salaries and allowances in violation of Section 12,
Rule XVIII, of the Revised Civil Service Rules. He was also found to have transgressed the prohibition in Section 3,
28

paragraph (d), of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019, as amended). The penalty of forced
resignation, without separation benefits and gratuities, was thereupon imposed on Rivera.
On appeal, the decision was modified by the Merit Systems Protection Board ("MSPB") which held. 2
In view of the foregoing, the decision appealed from is hereby modified that respondent-appellant George I.
Rivera is considered guilty only of committing acts prejudicial to the best interest of the service.
Considering that this is his first offense on record, the penalty of Forced Resignation without separation
benefits and gratuities to which he may be otherwise be entitled under the laws is reduced to one (1) year
suspension. 3
The LBP filed a motion for the reconsideration of MSPB's decision. In its resolution, 4 promulgated on 08 June 1992, the
MSPB denied the motion.
Rivera and the LBP both appealed to the CSC. In its Resolution No. 93-1189, 5 the CSC resolved only the appeal of Rivera
(rejecting that of the LBP pursuant to the rule laid down by his Court in Magpale vs. Civil Service Commission [215 SCRA
398]). The resolution, in part, read:
The Commission is inclined to sustain the original decision of the Land Bank of the Philippines.
Committing an act punishable under the Anti-Graft and Corrupt Practices Act (RA 3019) is considered a
Grave Misconduct. It is a wanton and/or blatant violation of law. As an officer of the Bank, respondent
Rivera should know better that it was illegal and improper for him to accept regular monthly allowances
from a private firm which is a client of his Bank. More so, that such act is prohibited and punishable under
Sec. 3(d) of RA 3019.
WHEREFORE, foregoing premises considered, the Commission resolves to dismiss the appeal of
Respondent George Rivera. Moreover, the Commission finds him guilty of Grave Misconduct for which he
is meted out the penalty of dismissal from the service. Accordingly, the MSPB decision is hereby set aside. 6
Rivera filed a motion for reconsideration, which the CSC denied in its Resolution No. 94-1276. 7
Hence, the instant petition.
Petitioner averred that the CSC committed grave abuse or discretion in imposing the capital penalty of dismissal on the basis
of unsubstantiated finding and conclusions.
On 26 May 1994, this Court resolved to dismiss the petition for petitioner's failure to sufficiently show that CSC acted with
grave abuse of discretion in issuing its questioned resolution. Rivera filed a motion for reconsideration of the Court's
dismissal of the petition, now strongly asserting that he was denied due process when Hon. Thelma P. Gaminde, who earlier
participated in her capacity as the Board Chairman of the MSPB when the latter had taken action on LBP's motion for
reconsideration, also took part, this time as a CSC Commissioner, in the resolution of petitioner's motion for reconsideration
with the CSC. The Court, in its resolution of 05 July 1994, resolved to grant the motion, to reinstate the petition and to
require respondents to comment thereon.
The Office of the Solicitor General, in its comment, dated 15 September 1994, sided with petitioner and suggested that the
CSC be given an opportunity to submit its own comment. CSC did in due time.
This is not the first time that the Court has been confronted with this kind of prejudicial issue.
In Zambales Chromite Mining Company vs. Court of Appeals, 8 the decision of the Secretary of Agriculture and Natural
Resources was set aside by this Court after it had been established that the case concerned an appeal from the Secretary's own
previous decision he handed down while he was yet the incumbent Director of Mines. Calling the act of the Secretary a
"mockery of administrative justice," the Court said:
In order that the review of the decision of a subordinate officer might not turn out to be a farce, then
reviewing officer must perforce be other than the officer whose decision is under review; otherwise, there
could be no different view or there would be no real review of the case. The decision of the reviewing
29

officer would be a biased view; inevitably, it would be the same view since being human, he would not
admit that he was mistaken in his first view of the case.
The Court similarly struck down a decision of Presidential Executive Assistant Jacobo Clave over a resolution of the Civil
Service Commission, in which he, then concurrently its chairman, had earlier "concurred." 9
Given the circumstances in the case at bench, it should have behooved Commissioner Gaminde to inhibit herself totally from
any participation in resolving Rivera's appeal to CSC if we are to give full meaning and consequence to a fundamental aspect
of due process. The argument that Commissioner Gaminde did not participate in MSPB's decision of 29 August 1990 is
unacceptable. It is not denied that she did participate, indeed has concurred, in MSPB's resolution of 03 March 1994, denying
the motion for reconsideration of MSPB's decision of 29 August 1990.
WHEREFORE, CSC Resolution No. 94-1276 is SET ASIDE, and the case is REMANDED to respondent Civil Service
Commission for the resolution, sans the participation of Commissioner Thelma P. Gaminde, of herein petitioner's motion for
reconsideration of CSC Resolution No. 93-1189. No costs.
SO ORDERED.
Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno and Mendoza, JJ., concur.
Kapunan, J., took no part.
Feliciano, J., is on leave.
THIRD DIVISION
[G.R. No. 140128. June 6, 2001]
Arnold P. Mollaneda, petitioner, vs. Leonida C. Umacob, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari of the (a) Decision[1] dated May 14, 1999 of the Court of Appeals in CA-G.R.
SP No. 48902 affirming in toto Resolution No. 973277 of the Civil Service Commission; and (b) Resolution [2] dated August
26, 1999 of the said court denying the motion for reconsideration of its Decision.
The case stemmed from the affidavit-complaint for sexual harassment filed by Leonida Umacob (respondent) against Arnold
Mollaneda (petitioner) with the Civil Service Commission - Regional Office XI, Davao City (CSC-RO XI) in September
1994 alleging:
That sometime on September 7, 1994 at around 7:30 oclock more or less, in the morning, while inside the office of Mr.
Rolando P. Suase, Admin Officer 2 of Davao City Schools, located at the Division Office Building, along Palma Gil St.,
Davao City, to follow-up my request for transfer from my present assignment to either Buhangin District or Bangoy District,
Davao City, Mr. Rolando P. Suase was not around and it was school Division Superintendent, Mr. Arnold P. Mollaneda who
was seated at his (Rolando's) table, as at the time, the office of Mr. Arnold Mollaneda just adjacent was being cleaned by a
janitor.
That immediately I approached him and seated opposite to him and handed to him my letter of recommendation from DECS
Regional Director, Region XI, Dr. Ramon Y. Alba, recommending my possible transfer and after reading the same advised
her to return next week as there is no available item and that he will think about it. However, I insisted that he will give me a
note to fix the time and date of our next meeting and or appointment at his office. At this instance, he handed me a piece of
paper with his prepared signature and requested me to write my name on it, after which, he took it back from me and assured
me to grant my request and at the same time, he made some notations on the same piece of paper below my name, indicating
my possible transfer to Buhangin or Bangoy District of which I thanked him for the accomodation. At this point, he stood up,
bringing along with him the paper so that I also stood up. However, before I could get outside the office, he then handed to
me the said piece of paper and advised me to give it to a certain May Pescadero, personnel clerk, for the making/cutting of
the order of transfer. All of a sudden he hugged and embraced me, then he kissed my nose and lip in a torrid manner. That I
tried to resist but he forcibly held my neck so that he was able to kiss me in an easy way. That - not contented, he then
30

mashed my left breast. He did the malicious act for several times, afterwhich he warned me not to tell anybody what he did to
me inside the office.
That as a result of the very unfortunate incident, I was so shocked, that I was not able to speak or talk or confess to my
husband what our School Superintendent did to me. Likewise, I also informed one Venus Mariano, also DECS employee,
who advised me to stay and remain calm. However, I decided to report the matter to San Pedro Patrol Station. [3] (Emphasis
supplied)
Respondent furnished the Department of Education, Culture and Sports - Regional Office XI, Davao City (DECS-RO XI) a
copy of her affidavit-complaint. Thus, on September 30, 1994, Regional Director Susana Cabahug issued an order [4] directing
the formation of a committee to conduct an investigation of respondent's complaint against petitioner.
On October 4, 1994, petitioner filed with the CSC-RO XI his answer to the affidavit-complaint denying the allegations
therein and alleging that there are material contradictions, in respondents version of the incident, thus:
1) On the date of the alleged happening of the incident, she was with her husband who was just outside the Office of Mr.
Mollaneda according to witness Security Guard Raul Moncada, but she did not report the incident to her husband, nor did she
register any complaint on that date September 7, 1994;
She reported the alleged acts of lasciviousness complained of to the police only the following day, September 8, 1994, at
about 3:45 P.M. as shown by the extract of the entry of the police blotter attached to her AFFIDAVIT-COMPLAINT in this
case.
2) In her report to the police as shown by the said police blotter, she said that While at the office of Mr. Arnold Mollaneda,
Division Superintendent DECS XI, she was requested by the latter to transfer in the office of Mr. Rolando Suase as the
janitor/security guard was cleaning the room of the respondent.
And her version as published in The Mindanao Daily Mirror in the issue of September 10, 1994 (see ANNEX C of the
complaint of Mollaneda to the City Prosecution Office). Omacob said Mollaneda in a written note told her to transfer to the
room of a certain Rolando Suase since the janitor will clean his room. But before she could move to the other room
Mollaneda allegedly hugged, kissed and mashed her breast and told her not to tell it to anybody.
3) In her instant Affidavit-Complaint, she again says while inside the Office of Mr. Rolando P. Suase x x x to follow-up my
request for transfer x x x Mr. Suase was not around and it was Schools Division Superintendent, Mr. Arnold P. Mollaneda
who was seated at his (Rolando) table, as at that time, the Office of Mr. Arnold P. Mollaneda just adjacent was being cleaned
by a janitor x x x. It was inside the office of Mr. Suase that she was given a note on her request for transfer by Mr. Mollaneda
to be given to May Pescadero when At this point, he stood up bringing along with him the paper so that I also stood-up,
however, before I could get outside the office, he then handed to me the said piece of paper and advised me to give it to a
certain May Pescadero, personnel clerk for the making/cutting of the order of transfer and at the same time all of a sudden, he
hug and embraced me, then he kissed my nose and lips in a torrid manner. That I tried to resist but he forcibly held my neck
so that he was able to kiss me in an easy way. That not contented, he then mashed my left breast, which he did the malicious
act for several times, afterwhich he warned me not to tell anybody what he did to me inside the office. [5]
In the present petition, petitioner alleged his own version of the incident,[6] thus:
"Petitioner, in his sworn statement, stated that on September 7, 1994, he had interviewed or conferred with about three (3)
persons already who were applying for new teaching positions or for transfers when Respondent came to HIS
OFFICE. When it was her turn to be interviewed, petitioner told her that she could not be transferred immediately because
the Division only had very few vacant items and the same were already given to earlier applicants. Nevertheless, she was told
to wait while he searched for a new vacant item.
Petitioner gave the Respondent a note for her to give to the Acting Personnel Officer Mildred "May" Pescadero so that
Respondent may be included in the list of teachers applying for transfer. Upon reading the note, however, the Respondent
angrily told him why could she not be immediately accommodated when she had the written recommendation of Dir. Ramon
Alba. She told Petitioner that asking her to wait was unfair because there were other applicants from Marilog district who
were transferred and one of them who was slated to be transferred was Mrs. Daylinda Bacoy.
Petitioner explained to the Respondent that Mrs. Bacoy suffered an injury when she fell off the horse she was riding on when
she went to her school in Kiopao Elementary School. Petitioner scolded the Respondent for her insubordinate attitude toward
31

him. She was counting so much on the recommendation of Dir. Ramon Alba who was Petitioner's superior, and could not
believe that no positive action was made by Petitioner on the basis of said recommendation. In going OUT OF THE OFFICE
OF PETITIONER, she was heard to have murmured that Petitioner would regret his act of discrimination.
There was no act of sexual harassment that occurred during the relatively brief conversation between the herein parties. The
witnesses, whose affidavits were attached to the Affidavit of Mr. Mollaneda, all swore to the fact that they saw what
transpired between Petitioner and the Respondent and that there was no act of sexual harassment that occurred. Moreover,
they swore to the fact that the interview took place inside Mr. Mollaneda's office as the both parties were seen through a glass
panel separating Petitioner's office and the anteroom."
Meanwhile, pending resolution by the CSC-RO XI of respondents complaint, the DECS investigating committee
recommended to the DECS Regional Director "the dropping of the case" for lack of merit.8
On June 5, 1995, the CSC-RO XI issued a resolution charging petitioner with grave misconduct, oppression, abuse of
authority and conduct prejudicial to the best interest of the service. The said office found there was a prima facie case against
him9 and eventually elevated to the Civil Service Commission (Commission) the records of the case.
Thereafter, the Commission designated Atty. Anacleto Buena to hear and receive the evidence in the case. A formal
hearing was conducted in Davao City. Both parties were assisted by counsel.
On July 7, 1997, the Commission issued Resolution No. 973277 finding petitioner guilty of grave misconduct and
conduct grossly prejudicial to the best interest of the service. He was meted the penalty of dismissal from the government
service with all its accessory penalties. 10 Forthwith, petitioner filed a motion for reconsideration but was denied in Resolution
No. 981761.11
Feeling aggrieved, petitioner filed with the Court of Appeals a petition for review alleging: first, that the Commission
erred in finding him guilty x x x notwithstanding the fact that he was denied his right to due process; and second, that the
Commission erred in giving weight to the hearsay testimonies of the witnesses for respondent. 12
On May 14, 1999, the Court of Appeals rendered its Decision 13 affirming in toto Resolution No. 973277 of the
Commission. The appellate court held:
It is a time-honored rule that the matter of assigning values to the testimony of witnesses is best performed by the trial courts,
tribunals, or administrative bodies or agencies exercising quasi-judicial powers.Unlike appellate courts, they can weigh such
testimony in clear observance of the demeanor, conduct and attitude of the witnesses at the trial or hearing. Thus, absent any
showing that they have overlooked facts of substance and value that if considered might affect the result, their findings must
be given weight and respect.
In the present case, nothing significant has been shown to convince this Court that the Commission acted with bias or ignored
something of substance that could have, in any degree, warranted an exoneration of petitioner from the charges hurled against
him.
It bears mentioning that respondent victim is a public school teacher. If she is not motivated by the truth, she would not have
subjected herself to the rigors of a hearing before the Commission and airing in public matters that affect her honor. It is hard
to conceive that respondent would reveal and admit the shameful and humiliating experience she had undergone if it were not
true. In any case, the fact that petitioner could not proffer any explanation as to why respondent and the prosecution witnesses
would falsely testify against him logically proves that no improper motive impelled them to accuse the former of such serious
offense as sexual harassment.
xxxxxxxxx
Petitioner, in the present case, may not successfully plead violation of his right to due process as he, in fact, participated at the
pre-trial, agreed to matters therein taken up, attended the hearing, and lengthily cross-examined the prosecution witnesses.
Anent petitioners contention that the decision of the Commission was in conflict with newspaper reports of a decision
dismissing the case against him for insufficiency of evidence, suffice it to state that what the movant considers as a decision
is merely a newspaper report. Newspaper accounts and clippings are hearsay and have no evidentiary value. (People vs.
Aguel, 97 SCRA 795).14
32

Rebuffed in his bid for reconsideration of the Court of Appeals Decision, petitioner filed the instant petition, and as
grounds therefor alleges:
I
THE RELIANCE OF THE COURT OF APPEALS ON THE THEORY THAT FINDINGS OF QUASI-JUDICIAL
AGENCIES ARE GIVEN CONSIDERABLE WEIGHT, IS MISPLACED IN VIEW OF THE PERTINENT FACTS OF THE
CASE.
II
A SIMILAR ADMINISTRATIVE CASE WAS INSTITUTED IN AND INVESTIGATED BY THE D.E.C.S. AND A
RESOLUTION WAS RENDERED DISMISSING THE CASE AGAINST PETITIONER.
III
THE TESTIMONIES OF THE WITNESSES FOR THE PETITIONER WERE ALL EYE-WITNESSES TO THE ACTUAL
INCIDENT, WHICH CAST DOUBT ON THE CREDIBILITY OF THE RESPONDENTS TESTIMONY.15
Petitioner contends that the oft-cited rule - the matter of assigning values to the testimony of witnesses is best performed
by the x x x administrative bodies or agencies exercising quasi-judicial powers - finds no application in the present
case. According to petitioner, the failure of the CSC Commissioners to personally observe the demeanor, conduct and attitude
of the witnesses and their reliance solely on Atty. Buenas recommendation and notes should have discouraged the Court of
Appeals from giving weight to the findings of the Commission. Petitioner also argues that respondent engaged in forum
shopping by filing her affidavit-complaint with the DECS-RO XI and CSC-RO XI; and that the Court of Appeals should have
considered in his favor the DECS-RO XIs resolution dismissing the administrative case against him. Finally, petitioner insists
that the Court of Appeals erroneously gave credence to the hearsay testimonies of Melencio Umacob, respondent's husband,
and Venus Mariano, secretary of the Assistant Division Superintendent of the Davao City Schools. These witnesses testified
that respondent narrated to them the events concerning the sexual harassment committed against her by petitioner.
For her part, respondent reiterates the ruling of the Court of Appeals that in reviewing administrative cases, the appellate
court is traditionally sanctioned to subscribe to the findings of the lower court or administrative body or agency since it is in a
better position to determine the credibility of witnesses. As to the alleged act of forum-shopping, petitioner claims that in
pursuing redress of her grievances, she sought refuge both in the court and in the Commission for she believed they are the
proper fora for her criminal and administrative complaints. And lastly, respondent counters that the Commission did not err
in giving more credence to the testimonies of her witnesses, stressing that petitioners witnesses are biased, they being his
subordinates.
During the pendency of this case in this Court, petitioner submitted the decision of the Municipal Trial Court, Branch 5,
Davao City, acquitting him of the crime of acts of lasciviousness which arose from the same incident involved in the present
administrative case.
The petition is bereft of merit.
In assailing the Decision of the Court of Appeals, petitioner is actually urging us not to give credence to the factual
findings of the Commission on the ground that the Commissioners did not personally hear the case.
The fact that the Commission assigned Atty. Buena to hear and receive evidence does not render its factual findings
unworthy of credence. In laying down the precedent that the matter of assigning values to the testimony of witnesses is best
performed by trial courts or administrative bodies rather than by appellate courts, this Court merely recognizes that the trial
court or the administrative body as a trier of facts is in a better position to assess the demeanor of the witnesses and the
credibility of their testimonies as they were within its proximal view during the hearing or investigation. At any rate, it cannot
be gainsaid that the term administrative body or agency includes the subordinate officials upon whose hand the body or
agency delegates a portion of its authority. Included therein are the hearing officers through whose eyes and ears the
administrative body or agency observes the demeanor, conduct and attitude of the witnesses and listens to their testimonies. 16
It must be emphasized that the appointment of competent officers to hear and receive evidence is commonly resorted to
by administrative bodies or agencies in the interest of an orderly and efficient disposition of administrative cases. This Court,
in American Tobacco Company v. Director of Patents,17 ruled:
Thus, it is well-settled that while the power to decide resides solely in the administrative agency vested by law, this does not
preclude a delegation of the power to hold a hearing on the basis of which the decision of the administrative agency will be
made.
33

The rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from
utilizing, as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts,
on the basis of which the officer makes his decisions. It is sufficient that the judgment and discretion finally exercised are
those of the officer authorized by law. Neither does due process of law nor the requirements of fair hearing require that the
actual taking of testimony be before the same officer who will make the decision in the case. As long as a party is not
deprived of his right to present his own case and submit evidence in support thereof, and the decision is supported by the
evidence in the record, there is no question that the requirements of due process and fair trial are fully met. In short, there is
no abnegation of responsibility on the part of the officer concerned as the actual decision remains with and is made by said
officer. It is, however, required that to give the substance of a hearing, which is for the purpose of making determinations
upon evidence the officer who makes the determinations must consider and appraise the evidence which justifies them.
In the case at bar, while the hearing officer may make preliminary rulings on the myriad of questions raised at the hearings of
these cases, the ultimate decision on the merits of all the issues and questions involved is left to the Director of Patents. Apart
from the circumstance that the point involved is procedural and not jurisdictional, petitioners have not shown in what manner
they have been prejudiced by the proceedings.
Under our jurisprudence, an administrative agency may employ other persons, such as a hearing officer, examiner or
investigator, to receive evidence, conduct hearing and make reports on the basis ofwhich the agency shall render its
decision. Such a procedure is a practical necessity. Corollarily, in a catena of cases, this Court laid down the cardinal
requirements of due process in administrative proceedings, one of which is that the tribunal or body or any of its judges must
act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a
subordinate.18 Thus, it is logical to say that this mandate was rendered precisely to ensure that in cases where the hearing or
reception of evidence is assigned to a subordinate, the body or agency shall not merely rely on his recommendation but
instead shall personally weigh and assess the evidence which the said subordinate has gathered. In the case at bar, it is evident
that the Commission itself evaluated in detail the evidence of both parties as reported by Atty. Buena. In fact, in laying down
its conclusion, it made constant reference to the testimonies of the parties and of their witnesses and to the documentary
evidence presented.
It must be addressed that, the Commissions act of delegating the authority to hear and receive evidence to Atty. Buena is
not without legal basis. Section 47, Book V of Executive Order No. 292 (otherwise known as the Administrative Code of
1987) provides that the Commission may deputize any department or agency or official or group of officials to conduct an
investigation on the complaint filed by a private citizen against a government official or employee. The results of the
investigation shall be submitted to the Commission with recommendation as to the penalty to be imposed or other action to
be taken.
Going further, petitioner complains that he was not furnished a copy of Atty. Buenas notes and recommendation. The
Court cannot empathize with him. In Ruiz v. Drilon,18 we unequivocally held that a respondent in an administrative case is not
entitled to be informed of the findings and recommendation of any investigating committee created to inquire into the charges
filed against him. He is entitled only to the administrative decision based on substantial evidence made of record and a
reasonable opportunity to meet the charges and the evidence presented against him during the hearing. 20 Besides, Atty.
Buena's findings and recommendation are internal communications between him and the Commission and, therefore,
confidential. In Pefianco v. Moral,21 this Court held:
Respondents (Moral) counsel is reminded that the Report of the DECS Investigating Committee is not an integral part of the
Decision itself x x x [t]he report is an internal communication between the Investigating Committee and the DECS Secretary,
and therefore, confidential until the latter had already read and used the same in making his own determination of the facts
and applicable law of the case, to be expressed in the Decision he may make.
The Report remains an internal and confidential matter to be used as part - although not controlling - of the basis for the
decision. Only when the party adversely affected by the decision has filed and perfected an appeal to the Civil Service
Commission may all the records of the case, including the aforesaid Report be forwarded to the CSC. In the latter appellate
tribunal, the respondents counsel may be allowed to read and/or be given a copy of the Report to enable the appellant to file
an intelligent and exhaustive appellants Brief Memorandum.
Petitioners second argument requires no lengthy discussion. First, he did not raise the issue of forum-shopping before
the Commission.22 It bears emphasis that respondent merely furnished the DECS-RO XI a copy of her affidavitcomplaint. And second, we surveyed the records and there is nothing therein which supports petitioners claim that the DECSRO XI dismissed respondent's affidavit-complaint.The resolution22 of the DECS mainly recommended to the Regional
34

Director of the DECS-RO XI the dropping of the case. A recommendatory resolution does not have the effect of actually
disposing of a case. Its function is merely to advise the disciplining authority of what action should be taken or what penalty
should be imposed. It is not controlling and the disciplining authority may or may not conform with the recommended action.
On petitioners assertion that the testimony of respondents witnesses are hearsay and, therefore, inadmissible in
evidence, we are constrained to hold a different view. A reading of the testimonies of Umacob and Mariano shows that they
were not presented to prove the truth of respondents accusations against petitioner, but only to establish the fact that
respondent narrated to them what transpired between her and petitioner. While it is true that the testimony of a witness
regarding a statement made by another person, if intended to establish the truth of the facts asserted in the statement, is
clearly hearsay evidence, it is otherwise if the purpose of placing the statement in the record is merely to establish the fact
that the statement was made. 23 Regardless of the truth or falsity of a statement, when the fact that it has been made is relevant,
the hearsay rule does not apply and the statement may be shown. As a matter of fact, evidence as to the making of the
statement is not secondary but primary, for the statement itself may constitute a fact in issue, or be circumstantially relevant
as to the existence of such a fact.24
Significantly, respondent herself and her witnesses were present during the hearing of the case. Hence, petitioner was
given the opportunity to cross-examine them. The real basis for the exclusion of hearsay evidence lies in the fact that a
hearsay testimony is not subject to the tests which can ordinarily be applied for the ascertainment of the truth of testimony,
since the declarant is not present and available for cross-examination.25
Lastly, petitioner cannot find solace in the dismissal of the criminal case against him. Long-ingrained in our
jurisprudence is the rule that the dismissal of a criminal case against an accused who is a respondent in an administrative case
on the ground of insufficiency of evidence does not foreclose the administrative proceeding against him or give him a clean
bill of health in all respects. In dismissing the case, the court is simply saying that the prosecution was unable to prove the
guilt of the respondent beyond reasonable doubt, a condition sine qua non for conviction because of the presumption of
innocence which the Constitution guarantees an accused. 27 However, in administrative proceedings, the quantum of proof
required is only substantial evidence.28 Substantial evidence means such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion. 29 After a more incisive scrutiny of the records, we are convinced that petitioners
culpability has been proven by substantial evidence.Respondents testimony was found by the Commission to be natural,
straightforward, spontaneous and convincing.30 Unlike petitioners testimony, that of respondent is replete with details
consistent with human nature. Clearly, the dismissal of the criminal case against petitioner by the Municipal Trial Court,
Branch 5, Davao City cannot bind this Court in the disposition of the instant administrative case. 31
In sum, we find no reason to reverse the decision of the Court of Appeals. While it is unfotunate that petitioner will lose
his job because of a moments indiscretion, this Court shall not flinch in imposing upon him the severe penalty of
dismissal. As Schools Division Superintendent, petitioner is bound by a high standard of work ethics. By succumbing to his
moral perversity, he failed to live up to such standard. Indeed, he provided a justifiable ground for his dismissal from the
service.
WHEREFORE, the appealed decision of the Court of Appeals is hereby AFFIRMED. No costs.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.
35

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ARTICLE III (BILL OF RIGHTS)

Republic of the Philippines

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

Both parties appealed to the National Labor Relations Commission (NLRC).[19]

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

Magna Carta for

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

Rollo, p. 136; Annex A of Annex G.

ARTICLE III (BILL OF RIGHTS)

Republic of the Philippines

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

Among the salient provisions of RA 7227 are as follows:

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

Republic of the Philippines

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

ARTICLE III (BILL OF RIGHTS)

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