IN RE: COMPLAINT AGAINST AVP LUIS OLAIS, JR.

(Please take note that the opinion is based solely on the following documents: a) Incident
Report by Mr. Benjamin Lopez, jr.; b) Memorandum from Office of the Head, Luzon Operations
Group; and c) Explanation given by AVP Olais)
The first thing to be considered is the fact that Social Security System (SSS) is a
corporation created by special charter, specifically, RA 8282. As such it is considered as a
Government Owned and Controlled Corporation (GOCC). On the other hand, the SSS LUZON
NORTH MULTI-PURPOSE COOPERATIVE (SSS coop) is a cooperative created under the
Cooperative Code of the Philippines RA 9520. SSS and SSS coop are juridical entities. As a
juridical entity, the personality of which is different from the people composing it. Thus, even if all
the members of the SSS coop are SSS employees and officers still the act of the SSS coop
cannot be considered as an act of the SSS. The SSS coops constitution and by-law, can never
change the fact that it is different from SSS, for the hierarchy of laws dictates that laws passed
by Congress is more supreme than the laws passed by any other entity, whether it be LGUs or
Private Corporations. Therefore, the laws passed by the later should always conform to the laws
passed by the former.
The next to be considered is the actions of AVP Olais as a Chairman of the board of the
cooperative. Without any conviction, let us assume that AVP Olais is guilty of misappropriating
the fund of the SSS coop. Is it enough to file a administrative case against him? The answer is a
resounding no. As cited in Sec 23, Rule XIV, Omnibus Rules Implementing Book V of 1987
Administrative Code, SECTION 46. Discipline: General Provisions.(a) No officer or employee
in the Civil Service shall be suspended or dismissed except for cause as provided by law and
after due process.
(b) The following shall be grounds for disciplinary action:
(1) Dishonesty;
(2) Oppression;
(3) Neglect of duty;
(4) Misconduct;
(5) Disgraceful and immoral conduct;
(6) Being notoriously undesirable;
(7) Discourtesy in the course of official duties;
(8) Inefficiency and incompetence in the performance of official duties;
(9) Receiving for personal use of a 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, or committing acts punishable under the anti-graft laws;
(10) Conviction of a crime involving moral turpitude;

(11) Improper or unauthorized solicitation of contributions from subordinate employees and by

teachers or school officials from school children;
(12) Violation of existing Civil Service Law and rules or reasonable office regulations;
(13) Falsification of official document;
(14) Frequent unauthorized absences or tardiness in reporting for duty, loafing or frequent
unauthorized absences from duty during regular office hours;
(15) Habitual drunkenness;
(16) Gambling prohibited by law;
(17) Refusal to perform official duty or render overtime service;
(18) Disgraceful, immoral or dishonest conduct prior to entering the service;
(19) Physical or mental incapacity or disability due to immoral or vicious habits;
(20) Borrowing money by superior officers from subordinates or lending by subordinates to
superior officers;
(21) Lending money at usurious rates of interest;
(22) Willful failure to pay just debts or willful failure to pay taxes due to the government;
(23) Contracting loans of money or other property from persons with whom the office of the
employee concerned has business relations;
(24) Pursuit of private business, vocation or profession without the permission required by Civil
Service rules and regulations;
(25) Insubordination;
(26) Engaging directly or indirectly in partisan political activities by one holding a non-political
office;
(27) Conduct prejudicial to the best interest of the service;
(28) Lobbying for personal interest or gain in legislative halls or offices without authority;
(29) Promoting the sale of tickets in behalf of private enterprises that are not intended for
charitable or public welfare purposes and even in the latter cases if there is no prior authority;
(30) Nepotism as defined in Section 60 of this Title.
All of the abovementioned grounds should be read in relation to the case of Festijo vs Crisologo
1966 which says that It should be noted that the grounds enumerated by law belong to two (2)
categories, namely: (1) those related to the discharge of the functions of the officer concerned
("neglect of duty, oppression, corruption or other form of maladministration of office"); and (2)
those not so connected with said function (commission "of any crime involving moral turpitude").
Conviction by final judgment is not required, as a condition precedent to administrative action,
except in cases falling under the second category, when the crime involving moral turpitude is
not linked with the performance of official duties, and for an obvious reason. Not being

associated with said duties, it should not ordinarily warrant any administrative action unless
there be previous final judgment of conviction. Furthermore, it was also held in Prov. Board of
Zambuanga del Norte vs Guzman (1967) that where the crime is not essentially connected with
the performance of the official duties, the officer may not proceeded administratively based
thereon until a final judgment of conviction shall have been rendered by the court. Bearing in
mind that the separate personality of the SSS coop and the SSS, the actions of AVP Olais as
the chairman of the board, can never be essential to the performance of his official functions as
an employee or officer of the SSS. There is no link connecting his functions to the SSS coop
and his functions inside the SSS. In short, he was is capable of committing what has been
committed even without the office being held by him in the SSS.
After consulting one of the city fiscal, the recommendation of this humble representation
is that first there must be a case filed inside the SSS cooperative. The case must be filed in
accordance with the grievance machinery as provided for either in the constitution of the
cooperative or it by-laws as provided for in Sec. 15 of RA 9520. After the conviction of the
misdeeds of the chairman inside the cooperative, the resolution can be use as the basis of the
administrative case against him. NOTWITHSTANDING, the civil case which can be filed against
him in the NAME OF THE SSS Coop. Because, as mentioned a while ago, the cooperatives
have distinct personality of its own the money funds contributed by the individual members are
owned by the cooperative itself and not the individual members. Thus, a case can be filed thru a
resolution made by the board of directors, acting as the administrators of the cooperative itself.
It is provided for in RA 9520 "ART. 45. Liability of Directors, Officers and Committee Members.
Directors, officers and committee members, who are willfully and knowingly vote for or assent to
patently unlawful acts or who are guilty of gross negligence or bad faith in directing the affairs of
the cooperative or acquire any personal or pecuniary interest in conflict with their duty as such
directors, officers or committee members shall be liable jointly and severally for all damages or
profits resulting therefrom to the cooperative, members, and other persons."When a director,
officer or committee member attempts to acquire or acquires, in violation of his duty, any
interest or equity adverse to the cooperative in respect to any matter which has been
reposed in him in confidence, he shall, as a trustee for the cooperative, be liable for
damages and shall be accountable for double the profits which otherwise would have
accrued to the cooperative. and "ART. 48. Disloyalty of a Director. A director who, by
virtue of his office, acquires for himself an opportunity which should belong to the
cooperative shall be liable for damages and must account for double the profits that
otherwise would have accrued to the cooperative by refunding the same, unless his act
has been ratified by a three-fourths (3/4) vote of all the members with voting rights,
present and constituting a quorum. This provision shall be applicable, notwithstanding
the fact that the director used his own funds in the venture. (emphasis supplied) Therefore,
any member of the cooperative can demand the amount taken by its officer during their
incumbency.