GUARANTEED 75-R

Cebu United Enterprises vs Gallogin

FACTS: This suit for mandatory injunction was instituted in the Court of First Instance of Cebu
United Enterprise to compel Jose Gallofin, as collector of Customs, Cebu Port, to release and
deliver to the plaintif two imported shipments of 7,834 bales of over issue newspapers purchased
by the latter from the United States. As ancillary relief during the pendency of the action, the
plaintif prayed for the issuance of a writ of preliminary mandatory injunction, which was granted
by the court after the plaintif posted a bond in the amount of P60,000.00 in favor of the
defendant. Thereafter, the goods were released to the plaintif, it appearing further that the
advance sales tax due on the same had been duly paid upon arrival of the merchandise at port.
The importation of the aforesaid shipments was made under and by virtue of an Import Control
Commission License No. 1225, issued by the defunct Import Control Commission. Under the
terms of the license, the plaintif could import, on a no-dollar remittance basis, over issue
newspapers up to the amount or value of $118,000.00.

The refusal of the defendant to deliver the imported items is premised on his contention that
while the five bills of lading covering the two shipments of the over issue newspapers were all
dated at Los Angeles, U.S.A. December 17, 1953, or one day before the expiration of the import
license in question, the vessels M/S VENTURA and M/S BATAAN, carrying on board the said
merchandise, actually left the ports of embarkation, Los Angeles, and San Francisco, on January
12 and January 16, 1954 respectively. Hence, according to the defendant, the importation must
be considered as having been made without a valid import license, because under the regulations
issued by the Central Bank and the Monetary Board, "all shipments that left the port of origin
after June 30, 1953, and are covered by ICC licenses, may be released by the Bureau of Customs
without the need of a Central Bank release certificate; provided they left the port of origin within
the period of validity of the licenses". No Central Bank certificate for the release of the goods
having been shown or presented to the defendant, the latter refused to make the delivery.

ISSUE: Whether or not the valid period of the license in question should be counted up to the
time when the vessels carrying the imported items left the ports of origin on January 12 and
January 16, 1954, or when the corresponding bills of lading were dated, or December 17, 1953

RULING: No. The authority of the appellee to import was contained in the Import Control
Commission License No. 17225, validated on June 18, 1953, and under Resolution 70 of the
Commission (adopted March 27, 1952), the same had a six-month period of validity counted
from the said date June 18, 1953. This license states, among other conditions, that
Commodities covered by this license must be shipped from the country of origin before the
expiry date of the license, and are subject to Sec. 13 of Republic Act. No. 650. Although
GUARANTEED 75-R

Republic Act No. 650, creating the Import Control Commission, expired on July 31, 1953, it is to
be conceded that its duly executed acts can have valid efects even beyond the life span of said
governmental agency.

What is important to consider only is the legal connotation of the word "shipped" as the term was
used in the license. Defendant maintains that it is when the vessel leaves the port of embarkation,
while plaintif holds that it is the dates of the bills of lading, which are usually issued after the
cargo is placed on board the vessel. The date of the shipment is the date when the goods for
dispatch are loaded on board the vessel, and not necessarily when the ship puts to sea.
Defendant's reliance upon Central Bank regulations that the shipment licensed must have "left
the port of origin within the period of validity of the "license" is not maintainable in the present
case, because the regulations came onto efect only on July 1, 1953 already after issuance of the
appellee' license and cannot be read into the same. RATIO: Duly executed acts can have valid
effects even beyond the life span of said governmental agency.

The date of the shipment is not the date when the vessel leaves the port of embarkation but the
date when the goods for dispatch are loaded on board the vessel, where it does not appear that
the bill of lading specified any designated day on which the vessels were to lift anchor, nor was it
shown that the shipper had any knowledge that the vessels were not to depart soon after he
placed his cargo on board. Cebu United Enterprises vs. Gallofin, 106 Phil. 491, No. L-12859
November 18, 1959.
GUARANTEED 75-R

Cristostomo vs CA

FACTS: Crisostomo was appointed the President of the Philippine College of Commerce (PCC)
by Former President Marcos. During his incumbency, two administrative charges were filed
against him for illegaluse of government vehicles, misappropriation of construction materials,
oppression and harassment, grave misconduct, nepotism and dishonesty before the Office of the
President. Likewise, he was also charged with violation of Anti-Grant and Corrupt Practices Act
with the Tanod-bayan on June 14, 1976. As such, he was preventively suspended and Dr. Mateo
was designated as the officer-in-charge in his place. Meanwhile, former President Marcos passed
PD 1341 converting On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E.
Marcos CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A
POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL
STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS
with Mateo as President for a term of six years. Crisostomo was later acquitted and his
administrative charges were dismissed.

On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution of
the judgment, particularly the part ordering his reinstatement to the position of president of the
PUP and the payment of his salaries and other benefits during the period of suspension.

The motion was granted and a partial writ of execution was issued by the trial court on March 6,
1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as
acting president of the PUP, following the expiration of the term of office of Dr. Nemesio
Prudente, who had succeeded Dr. Mateo. Petitioner was one of the five nominees considered by
the President of the Philippines for the position.

On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco
Flores, issued another order, reiterating her earlier order for the reinstatement of petitioner to the
position of PUP president. A writ of execution, ordering the sheriff to implement the order of
reinstatement, was issued.

ISSUE: WON PD 1341 abolished the PCC.

HELD: NO. P.D. No. 1341 did not abolish, but only changed, the former Philippine College of
Commerce into what is now the Polytechnic University of the Philippines, in the same way that
earlier in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce
into the Philippine College of Commerce. What took place was a change in academic status of
GUARANTEED 75-R

the educational institution, not in its corporate life. Hence the change in its name, the expansion
of its curricular offerings, and the changes in its structure and organization.

As petitioner correctly points out, when the purpose is to abolish a department or an office or an
organization and to replace it with another one, the lawmaking authority says so. But these are
hardly indicia of an intent to abolish an existing institution and to create a new one. New course
offerings can be added to the curriculum of a school without affecting its legal existence. Nor
will changes in its existing structure and organization bring about its abolition and the creation of
a new one. Only an express declaration to that effect by the lawmaking authority will.
GUARANTEED 75-R

Viola vs Alunan III

FACTS: This is a petition for prohibition challenging the validity of Art. III, 1-2 of the Revised
Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay
Officers so far as they provide for the election of first, second and third vice presidents and for
auditors for the National Liga ng mga Barangay and its chapters. Petitioner Cesar G. Viola
brought this action as barangay chairman of Bgy. 167, Zone 15, District II, Manila against then
Secretary of Interior and Local Government Rafael M. Alunan III, Alex L. David,
president/secretary general of the National Liga ng mga Barangay, and Leonardo L. Angat,
president of the City of Manila Liga ng mga Barangay, to restrain them from carrying out the
elections for the questioned positions on July 3, 1994. Petitioners contention is that the positions
in question are in excess of those provided in the Local Government Code (R.A. No. 7160), 493
of which mentions as elective positions only those of president, vice president, and five members
of the board of directors in each chapter at the municipal, city, provincial, metropolitan political
subdivision, and national levels. Petitioner argues that, in providing for the positions of first,
second and third vice presidents and auditor for each chapter, 1-2 of the Implementing Rules
expand the number of positions authorized in 493 of the Local Government Code in violation of
the principle that implementing rules and regulations cannot add or detract from the provisions of
the law they are designed to implement.

ISSUE: Whether or not the additional positions in question have been created without authority
of law.

RULING: No. Petitioners contention that the additional positions in question have been created
without authority of law is untenable. To begin with, the creation of these positions was actually
made in the Constitution and By-laws of the Liga ng Mga Barangay, which was adopted by the
First Barangay National Assembly on January 11, 1994.

The post of executive vice president is in reality that of the vice president in 493 of the LGC, so
that the only additional positions created for each chapter in the Constitution and By-laws are
those of first, second and third vice presidents and auditor. Contrary to petitioners contention,
the creation of the additional positions is authorized by the LGC which provides as follows: 493.
Organization. The liga at the municipal, city, provincial, metropolitan political subdivision, and
national levels directly elect a president, a vice-president, and five (5) members of the board of
directors.

The board shall appoint its secretary and treasurer and create such other positions as it may deem
necessary for the management of the chapter. A secretary-general shall be elected from among
GUARANTEED 75-R

the members of the national liga and shall be charged with the overall operation of the liga on the
national level. The board shall coordinate the activities of the chapters of the liga.

This provision in fact requires and not merely authorizes the board of directors to create such
other positions as it may deem necessary for the management of the chapter and belies
petitioners claim that said provision (493) limits the officers of a chapter to the president, vice
president, five members of the board of directors, secretary, and treasurer. That Congress can
delegate the power to create positions such as these has been settled by our decisions upholding
the validity of reorganization statutes authorizing the President of the Philippines to create,
abolish or merge offices in the executive department. The question is whether, in making a
delegation of this power to the board of directors of each chapter of the Liga ng Mga Barangay,
Congress provided a sufficient standard so that, in the phrase of Justice Cardozo, administrative
discretion may be canalized within proper banks that keep it from overflowing.

We hold that 493 of the Local Government Code, in directing the board of directors of the liga to
create such other positions as may be deemed necessary for the management of the chapters,
embodies a fairly intelligible standard. There is no undue delegation of power by Congress.
GUARANTEED 75-R

Larin vs Executive Secretary

FACTS: Challenged in this petition is the validity of petitioners removal from service as
Assistant Commissioner of the Excise Tax Service of the Bureau of Internal Revenue.
Incidentally, he questions Memorandum Order No. 164 issued by the Office of the President,
which provides for the creation of "A Committee to Investigate the Administrative Complaint
Against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal Revenue" as well as the
investigation made in pursuance thereto, and Administrative Order No. 101 dated December 2,
1993 which found him guilty of grave misconduct in the administrative charge and imposed
upon him the penalty of dismissal from office.

Likewise, petitioner seeks to assail the legality of Executive Order No. 132, issued by President
Ramos on October 26, 1993, which provides for the "Streamlining of the Bureau of Internal
Revenue," and of its implementing rules issued by the Bureau of Internal Revenue, namely: a)
Administrative Order No. 4-93, which provides for the "Organizational Structure and Statement
of General Functions of Offices in the National Office" and b) Administrative Order No. 5-93,
which provides for "Redefining the Areas of Jurisdiction and Renumbering of Regional And
District Offices. Under said order, some positions and functions are either abolished, renamed,
decentralized or transferred to other offices, while other offices are also created. The Excise Tax
Service or the Specific Tax Service, of which petitioner was the Assistant Commissioner, was
one of those offices that was abolished by said executive order. Consequently, the President, in
the assailed Administrative Order No. 101 dated December 2, 1993, found petitioner guilty of
grave misconduct in the administrative charge and imposedm upon him the penalty of dismissal
with forfeiture of his leave credits and retirement benefits including disqualification for
reappointment in the government service. Aggrieved, petitioner filed directly with thism Court
the instant petition on December 13, 1993 to question basically his alleged unlawful removal
from office.

In his petition, petitioner challenged the authority of the President to dismiss him from office. He
argued that in so far as presidential appointees who are Career Executive Service Officers are
concerned, the President exercises only the power of control not the power to remove. Petitioner
likewise claimed that he was removed as a result of the reorganization made by the Executive
Department in the BIR pursuant to Executive Order No. 132. Thus, he assailed said Executive
Order No. 132 and its implementing rules, namely, Revenue Administrative Orders 4-93 and 5-
93 for being ultra vires. He claimed that there is yet no law enacted by Congress which
authorizes the reorganization by the Executive Department of executive agencies, particularly the
Bureau of Internal Revenue. On the other hand, respondents contended that since petitioner is a
presidential appointee, he falls under the disciplining authority of the President. They also
GUARANTEED 75-R

contended that E.O. No. 132 and its implementing rules were validly issued pursuant to Sections
48 and 62 of Republic Act No. 7645. Apart from this, the other legal bases of E.O. No. 132 as
stated in its preamble are Section 63 of E.O. No. 127 (Reorganizing the Ministry of Finance),
and Section 20, Book III of E.O. No. 292, otherwise known as the Administrative Code of 1987.
Significantly, respondents clarified that petitioner was not dismissed by virtue of EO 132.
Respondents claimed that he was removed from office because he was found guilty of grave
misconduct in the administrative cases filed against him.

ISSUE: Whether or not the President has the power to reorganize the BIR or to issue the
questioned E.O. NO. 132

RULING: Yes. Initially, it is argued that there is no law yet which empowers the President to
issue E.O. No. 132 or to reorganize the BIR. We do not agree. Under its preamble, E.O. No. 132
lays down the legal bases of its issuance, namely: a) Sections 48 and 62 of R.A. No. 7645, b)
Section 63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292. Section 48 of R.A.
7645 provides that: Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the
Executive Branch.The heads of departments, bureaus and offices and agencies are hereby
directed to identify their respective activities which are no longer essential in the delivery of
public services and which may be scaled down, phased out or abolished, subject to civil service
rules and regulations. x x x. Actual scaling down, phasing out or abolition of the activities shall
be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.
(italics ours) Said provision clearly mentions the acts of scaling down, phasing out and
abolition of offices only and does not cover the creation of offices or transfer of functions.
Nevertheless, the act of creating and decentralizing is included in the subsequent provision of
Section 62, which provides that: Sec. 62. Unauthorized organizational charges.Unless
otherwise created by law or directed by the President of the Philippines, no organizational unit or
changes in key positions in any department or agency shall be authorized in their respective
organization structures and be funded from appropriations by this Act. (italics ours) The
foregoing provision evidently shows that the President is authorized to effect organizational
changes including the creation of offices in the department or agency concerned.
GUARANTEED 75-R

Dario vs Mison

FACTS: On March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3,
"DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY
THE PEOPLE, PROTECTING THEIR BASIC RIGHTS, ADOPTING A PROVISIONAL
CONSTITUTION, AND PROVIDING FOR AN ORDERLY TRANSITION TO A
GOVERNMENT UNDER A NEW CONSTITUTION. Among other things, Proclamation No. 3
provided: SECTION 1. The President shall give priority to measures to achieve the mandate of
the people to: (a) Completely reorganize the government, eradicate unjust and oppressive
structures, and all iniquitous vestiges of the previous regime.

The reorganization process started as early as February 25, 1986, when the President, in her first
act in office, called upon "all appointive public officials to submit their courtesy resignations
beginning with the members of the Supreme Court." Later on, she abolished the Batasang
Pambansa and the positions of Prime Minister and Cabinet under the 1973 Constitution. On May
28, 1986, the President enacted Executive Order No. 17, "PRESCRIBING RULES AND
REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE
FREEDOM CONSTITUTION." Executive Order No. 17 recognized the "unnecessary anxiety
and demoralization among the deserving officials and employees" the ongoing government
reorganization had generated, and prescribed several grounds for the separation/replacement of
personnel.

She said on May 28, 1986: WHEREAS, in order to obviate unnecessary anxiety and
demoralization among the deserving officials and employees, particularly in the career civil
service, it is necessary to prescribe the rules and regulations for implementing the said
constitutional provision to protect career civil servants whose qualifications and performance
meet the standards of service demanded by the New Government, and to ensure that only those
found corrupt, inefficient and undeserving are separated from the government service.
Noteworthy is the injunction embodied in the Executive Order that dismissals should be made on
the basis of findings of inefficiency, graft, and unfitness to render public service.

The Presidents Memorandum of October 14, 1987 should furthermore be considered. We quote,
in part: Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered
that there will be no further lay-offs this year of personnel as a result of the government
reorganization. On January 30, 1987, the President promulgated Executive Order No. 127,
"REORGANIZING THE MINISTRY OF FINANCE." Among other offices, Executive Order
No. 127 provided for the reorganization of the Bureau of Customs and prescribed a new staffing
GUARANTEED 75-R

pattern therefor. Three days later, on February 2, 1987, the Filipino people adopted the new
Constitution.

On January 6, 1988, incumbent Commissioner of Customs Salvador Mison issued a

Memorandum, in the nature of "Guidelines on the Implementation of Reorganization Executive
Orders," prescribing the procedure in personnel placement. On the same date, Commissioner
Mison constituted a Reorganization Appeals Board charged with adjudicating appeals from
removals under the above Memorandum. On January 26, 1988, Commissioner Mison addressed
several notices to various Customs officials. As far as the records will likewise reveal, a total of
394 officials and employees of the Bureau of Customs were given individual notices of
separation. A number supposedly sought reinstatement with the Reorganization Appeals Board
while others went to the Civil Service Commission. The first thirty one mentioned above came
directly to this Court. The records indeed show that Commissioner Mison separated about 394
Customs personnel but replaced them with 522 as of August 18, 1988. On June 30, 1988, the
Civil Service Commission promulgated its ruling ordering the reinstatement of the 279
employees. On July 15, 1988, Commissioner Mison, represented by the Solicitor General, filed a
motion for reconsideration. Acting on the motion, the Civil Service Commission, on September
20, 1988, denied reconsideration. On October 20, 1988, Commissioner Mison instituted
certiorari proceedings with this Court.

On November 16, 1988, the Civil Service Commission further disposed the appeal (from the
resolution of the Reorganization Appeals Board) of five more employees. On January 6, 1989,
Commissioner Mison challenged the Civil Service Commissions Resolution in this Court.

ISSUE: Whether or not Executive Order No. 127, which provided for the reorganization of the
Bureau of Customs is valid

RULING: Yes. There is no question that the administration may validly carry out a government
reorganization insofar as these cases are concerned, the reorganization of the Bureau of
Customs by mandate not only of the Provisional Constitution, supra, but also of the various
Executive Orders decreed by the Chief Executive in her capacity as sole lawmaking authority
under the 1986-1987 revolutionary government. It should also be noted that under the present
Constitution, there is a recognition, albeit implied, that a government reorganization may be
legitimately undertaken, subject to certain conditions. The core provision of law involved is
Section 16 Article XVIII, of the 1987 Constitution. Sec. 16. Career civil service employees
separated from the service not for cause but as a result of the reorganization pursuant to
Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of
this Constitution shall be entitled to appropriate separation pay and to retirement and other
GUARANTEED 75-R

benefits accruing to them under the laws of general application in force at the time of their
separation. In lieu thereof, at the option of the employees, they may be considered for
employment in the Government or in any of its subdivisions, instrumentalities, or agencies,
including government-owned or controlled corporations and their subsidiaries. This provision
also applies to career officers whose resignation, tendered in line with the existing policy, had
been accepted.

It is also to be observed that unlike the grants of power to effect reorganizations under the past
Constitutions, the above provision comes as a mere recognition of the right of the Government to
reorganize its offices, bureaus, and instrumentalities.Other than references to "reorganization
following the ratification of this Constitution," there is no provision for "automatic" vacancies
under the 1987 Constitution. Invariably, transition periods are characterized by provisions for
"automatic" vacancies. They are dictated by the need to hasten the passage from the old to the
new Constitution free from the "fetters" of due process and security of tenure.

At this point, we must distinguish removals from separations arising from abolition of office (not
by virtue of the Constitution) as a result of reorganization carried out by reason of economy or to
remove redundancy of functions. In the latter case, the Government is obliged to prove good
faith. In case of removals undertaken to comply with clear and explicit constitutional mandates,
the Government is not hard put to prove anything, plainly and simply because the Constitution
allows it. Reorganizations in this jurisdiction have been regarded as valid provided they are
pursued in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for
the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal (in
case of a dismissal) or separation actually occurs because the position itself ceases to exist. And
in that case, security of tenure would not be a Chinese wall. Be that as it may, if the "abolition,"
which is nothing else but a separation or removal, is done for political reasons or purposely to
defeat security of tenure, or otherwise not in good faith, no valid "abolition" takes place and
whatever "abolition" is done, is void ab initio. There is an invalid "abolition" as where there is
merely a change of nomenclature of positions, or where claims of economy are belied by the
existence of ample funds.

It is to be stressed that by predisposing a reorganization to the yardstick of good faith, we are not,
as a consequence, imposing a "cause" for restructuring. Retrenchment in the course of a
reorganization in good faith is still removal "not for cause," if by "cause" we refer to "grounds"
or conditions that call for disciplinary action. Good faith, as a component of a reorganization
under a constitutional regime, is judged from the facts of each case. The records indeed show
that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as
of August 18, 1988. This betrays a clear intent to "pack" the Bureau of Customs. He did so,
GUARANTEED 75-R

furthermore, in defiance of the Presidents directive to halt further lay-offs as a consequence of

reorganization. Finally, he was aware that lay-offs should observe the procedure laid down by
Executive

Order No. 17. We are not, of course, striking down Executive Order No. 127 for repugnancy to
the Constitution. While the act is valid, still and all, the means with which it was implemented is
not. It can be seen that the Act, insofar as it provides for reinstatement of employees separated
without "a valid cause and after due notice and hearing" is not contrary to the transitory
provisions of the new Constitution. The Court reiterates that although the Charters transitory
provisions mention separations "not for cause," separations thereunder must nevertheless be on
account of a valid reorganization and which do not come about automatically. Otherwise,
security of tenure may be invoked. Moreover, it can be seen that the statute itself recognizes
removals without cause. However, it also acknowledges the possibility of the leadership using
the artifice of reorganization to frustrate security of tenure. For this reason, it has installed
safeguards.

There is nothing unconstitutional about the Act. or agency concerned. The contention of
petitioner that the two provisions are riders deserves scant consideration. Well settled is the rule
that every law has in its favor the presumption of constitutionality. Unless and until a specific
provision of the law is declared invalid and unconstitutional, the same is valid and binding for all
intents and purposes.

Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292. This provision
speaks of such other powers vested in the President under the law. What law then which gives
him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential
Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing
authority to reorganize the national government, which includes the power to group, consolidate
bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions,
services and activities and to standardize salaries and materials. The validity of these two decrees
are unquestionable. The 1987 Constitution clearly provides that "all laws, decrees, executive
orders, proclamations, letters of instructions and other executive issuances not inconsistent with
this Constitution shall remain operative until amended, repealed or revoked." So far, there is yet
no law amending or repealing said decrees. Significantly, the Constitution itself recognizes
future reorganizations in the government as what is revealed in Section 16 of Article XVIII.
GUARANTEED 75-R

Tondo Medical Center Employees vs CA

In 1999, the DOH launched the HSRA, a reform agenda developed by the HSRA Technical
Working Group after a series of workshops and analyses with inputs from several consultants,
program managers and technical staff possessing the adequate expertise and experience in the
health sector. It provided for five general areas of reform: (1) to provide fiscal autonomy to
government hospitals; (2) secure funding for priority public health programs; (3) promote the
development of local health systems and ensure its effective performance; (4) strengthen the
capacities of health regulatory agencies; and (5) expand the coverage of the National Health
Insurance Program (NHIP).

Petitioners questioned the first reform agenda involving the fiscal autonomy of government
hospitals, particularly the collection of socialized user fees and the corporate restructuring of
government hospitals. The said provision under the HSRA reads:

Provide fiscal autonomy to government hospitals. Government hospitals must be allowed to

collect socialized user fees so they can reduce the dependence on direct subsidies from the
government. Their critical capacities like diagnostic equipment, laboratory facilities and medical
staff capability must be upgraded to effectively exercise fiscal autonomy. Such investment must
be cognizant of complimentary capacity provided by public-private networks. Moreover such
capacities will allow government hospitals to supplement priority public health programs.
Appropriate institutional arrangement must be introduced such as allowing them autonomy
towards converting them into government corporations without compromising their social
responsibilities. As a result, government hospitals are expected to be more competitive and
responsive to health needs.

Petitioners also assailed the issuance of a draft administrative order issued by the DOH, dated 5
January 2001, entitled Guidelines and Procedure in the Implementation of the Corporate
Restructuring of Selected DOH Hospitals to Achieve Fiscal Autonomy, and Managerial
Flexibility to Start by January 2001;[3] and Administrative Order No. 172 of the DOH, entitled
Policies and Guidelines on the Private Practice of Medical and Paramedical Professionals in
Government Health Facilities,[4] dated 9 January 2001, for imposing an added burden to
indigent Filipinos, who cannot afford to pay for medicine and medical services.

Petitioners contended that a law, such as Executive Order No. 102, which effects the
reorganization of the DOH, should be enacted by Congress in the exercise of its legislative
function. They argued that Executive Order No. 102 is void, having been issued in excess of the
Presidents authority.
GUARANTEED 75-R

ISSUE: WON the president may direct the reorganization of government entities under the
executive department.

HELD: YES. This Court has already ruled in a number of cases that the President may, by
executive or administrative order, direct the reorganization of government entities under the
Executive Department. This is also sanctioned under the Constitution, as well as other statutes.
Section 17, Article VII of the 1987 Constitution, clearly states: [T]he president shall have
control of all executive departments, bureaus and offices. Section 31, Book III, Chapter 10 of
Executive Order No. 292, also known as the Administrative Code of 1987 reads: SEC. 31.
Continuing Authority of the President to Reorganize his Office.The President, subject to the
policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall
have continuing authority to reorganize the administrative structure of the Office of the
President. For this purpose, he may take any of the following actions: (1) Restructure the internal
organization of the Office of the President Proper, including the immediate offices, the
Presidential Special Assistants/Advisers System and the Common Staff Support System, by
abolishing consolidating or merging units thereof or transferring functions from one unit to
another; (2) Transfer any function under the Office of the President to any other Department or
Agency as well as transfer functions to the Office of the President from other Departments or
Agencies; and (3) Transfer any agency under the Office of the President to any other department
or agency as well as transfer agencies to the Office of the President from other Departments or
agencies.

In Domingo v. Zamora, 397 SCRA 56 (2003), this Court explained the rationale behind the
Presidents continuing authority under the Administrative Code to reorganize the administrative
structure of the Office of the President. The law grants the President the power to reorganize the
Office of the President in recognition of the recurring need of every President to reorganize his
or her office to achieve simplicity, economy and efficiency. To remain effective and efficient,
it must be capable of being shaped and reshaped by the President in the manner the Chief
Executive deems fit to carry out presidential directives and policies.

The Administrative Code provides that the Office of the President consists of the Office of the
President Proper and the agencies under it. The agencies under the Office of the President are
identified in Section 23, Chapter 8, Title II of the Administrative Code: Sec. 23. The Agencies
under the Office of the President.The agencies under the Office of the President refer to those
offices placed under the chairmanship of the President, those under the supervision and control
of the President, those under the administrative supervision of the Office of the President, those
attached to it for policy and program coordination, and those that are not placed by law or order
creating them under any specific department. (Emphasis provided.) Section 2(4) of the
GUARANTEED 75-R

Introductory Provisions of the Administrative Code defines the term agency of the government
as follows: Agency of the Government refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or controlled
corporation, or a local government or a distinct unit therein. Furthermore, the DOH is among the
cabinet-level departments enumerated under Book IV of the Administrative Code, mainly tasked
with the functional distribution of the work of the President. Indubitably, the DOH is an agency
which is under the supervision and control of the President and, thus, part of the Office of the
President. Consequently, Section 31, Book III, Chapter 10 of the Administrative Code, granting
the President the continued authority to reorganize the Office of the President, extends to the
DOH.

Clearly, Executive Order No. 102 is well within the constitutional power of the President to
issue. The President did not usurp any legislative prerogative in issuing Executive Order No.
102. It is an exercise of the Presidents constitutional power of control over the executive
department, supported by the provisions of the Administrative Code, recognized by other
statutes, and consistently affirmed by this Court.
GUARANTEED 75-R

Banda vs Ermita

The present controversy arose from a Petition for Certiorari and prohibition challenging the
constitutionality of Executive Order No. 378 dated October 25, 2004, issued by President Gloria
Macapagal Arroyo.

Petitioners characterize their action as a class suit filed on their own behalf and on behalf of all
their co-employees at the National Printing Office (NPO). President Arroyo issued the herein
assailed Executive Order No. 378, amending Section 6 of Executive Order No. 285 by, inter alia,
removing the exclusive jurisdiction of the NPO over the printing services requirements of
government agencies and instrumentalities.

Pursuant to Executive Order No. 378, government agencies and instrumentalities are allowed to
source their printing services from the private sector through competitive bidding, subject to the
condition that the services offered by the private supplier be of superior quality and lower in cost
compared to what was offered by the NPO. Executive Order No. 378 also limited NPOs
appropriation in the General Appropriations Act to its income.

Perceiving Executive Order No. 378 as a threat to their security of tenure as employees of the
NPO, petitioners now challenge its constitutionality, contending that: (1) it is beyond the
executive powers of President Arroyo to amend or repeal Executive Order No. 285 issued by
former President Aquino when the latter still exercised legislative powers; and (2) Executive
Order No. 378 violates petitioners security of tenure, because it paves the way for the gradual
abolition of the NPO.

ISSUE: WON the president may direct the reorganization of government entities under the
executive department.

HELD: YES. It is a well-settled principle in jurisprudence that the President has the power to
reorganize the offices and agencies in the executive department in line with the Presidents
constitutionally granted power of control over executive offices and by virtue of previous
delegation of the legislative power to reorganize executive offices under existing statutes. In
Buklod ng Kawaning EIIB v. Zamora, 360 SCRA 718 (2001), the Court pointed out that
Executive Order No. 292 or the Administrative Code of 1987 gives the President continuing
authority to reorganize and redefine the functions of the Office of the President. Section 31,
Chapter 10, Title III, Book III of the said Code. It is undisputed that the NPO, as an agency that
is part of the Office of the Press Secretary is part of the Office of the President.

The issuance of Executive Order No. 378 by President Arroyo is an exercise of a delegated
legislative power granted by the aforementioned Section 31, Chapter 10, Title III, Book III of the
Administrative Code of 1987, which provides for the continuing authority of the President to
reorganize the Office of the President, in order to achieve simplicity, economy and efficiency.
GUARANTEED 75-R

This is a matter already well-entrenched in jurisprudence. The reorganization of such an office

through executive or administrative order is also recognized in the Administrative Code of 1987.
To be very clear, this delegated legislative power to reorganize pertains only to the Office of the
President and the departments, offices and agencies of the executive branch and does not include
the Judiciary, the Legislature or the constitutionally-created or mandated bodies. Moreover, it
must be stressed that the exercise by the President of the power to reorganize the executive
department must be in accordance with the Constitution, relevant laws and prevailing
jurisprudence. x x x Stated alternatively, the presidential power to reorganize agencies and
offices in the executive branch of government is subject to the condition that such reorganization
is carried out in good faith.
GUARANTEED 75-R

Dacudao vs Gonzales

FACTS: The petitioners filed a case of syndicated estafa against Celso Delos Angeles and his
associates after the petitioners were defrauded in a business venture. Thereafter, the DOJ
Secretary issued Department Order 182 which directs all prosecutors in the country to forward
all cases already filed against Celso Delos Angeles, Jr. and his associates to the secretariat of
DOJ in Manila for appropriate action.

However, in a separate order which is Memorandum dated March 2009, it was said that cases
already filed against Celso Delos Angeles et. al of the Legacy Group of Companies in Cagayan
De Oro City need not be sent anymore to the Secretariat of DOJ in Manila. Because of such DOJ
orders, the complaint of petitioners was forwarded to the secretariat of the Special Panel of the
DOJ in Manila.

Aggrieved, Spouses Dacudao filed this petition for certiorari, prohibition and mandamus
assailing to the respondent Secretary of justice grave abuse of discretion in issuing the
department Order and the Memorandum, which according to the violated their right to due
process, right to equal protection of the law and right to speedy disposition of the cases. The
petitioners opined that orders were unconstitutional or exempting from coverage cases already
filed and pending at the Prosecutors Office of Cagayan De Oro City. They contended that the
assailed issuances should cover only future cases against Delos Angeles, Jr., et al, not those
already being investigated. They maintained that DO 182 was issued in violation of the
prohibition against passing laws with retroactive effect.

ISSUE: WON DO No. 182 is unconstitutional.

HELD: NO. Administrative regulations enacted by administrative agencies to implement and

interpret the law which they are entrusted to enforce have the force of law and are entitled to
respect. Such rules and regulations partake of the nature of a statute and are just as binding as if
they have been written in the statute itself. As such, they have the force and effect of law and
enjoy the presumption of constitutionality and legality until they are set aside with finality in an
appropriate case by a competent court. DO No. 182 was issued pursuant to Department Order
No. 84 that the Secretary of Justice had promulgated to govern the performance of the mandate
of the DOJ to administer the criminal justice system in accordance with the accepted processes
thereof16 as expressed in Republic Act No. 10071 (Prosecution Service Act of 2010) and
Section 3, Chapter I, Title III and Section 1, Chapter I, Title III of Book IV of Executive Order
292 (Administrative Code of 1987).

To overcome this strong presumption of validity of the questioned issuances, it became

incumbent upon petitioners to prove their unconstitutionality and invalidity, either by showing
that the Administrative Code of 1987 did not authorize the Secretary of Justice to issue DO No.
GUARANTEED 75-R

182, or by demonstrating that DO No. 182 exceeded the bounds of the Administrative Code of
1987 and other pertinent laws. They did not do so. They must further show that the performance
of the DOJs functions under the Administrative Code of 1987 and other pertinent laws did not
call for the impositions laid down by the assailed issuances. That was not true here, for DO No
182 did not deprive petitioners in any degree of their right to seek redress for the alleged wrong
done against them by the Legacy Group. Instead, the issuances were designed to assist
petitioners and others like them expedite the prosecution, if warranted under the law, of all those
responsible for the wrong through the creation of the special panel of state prosecutors and
prosecution attorneys in order to conduct a nationwide and comprehensive preliminary
investigation and prosecution of the cases. Thereby, the Secretary of Justice did not act
arbitrarily or oppressively against petitioners.
GUARANTEED 75-R

Balanguan vs CA

FACTS: Petitioner Katherene was a Premier Customer Services Representative (PCSR) of

respondent bank, HSBC. York maintained several accounts with respondent HSBC. Sometime in
April 2002, he went to respondent HSBCs Cebu Branch to transact with petitioner Katherene
respecting his Dollar and Peso Accounts. Petitioner Katherene being on vacation at the time,
York was attended to by another PCSR. While at the bank, York inquired about the status of his
time deposit in the amount of P2,500,000.00. The PCSR representative who attended to him,
however, could not find any record of said placement in the banks data base. York adamantly
insisted, though, that through petitioner Katherene, he made a placement of the aforementioned
amount in a higher-earning time deposit. Yorkfurther elaborated that petitioner Katherene
explained to him that the alleged higher-earning time deposit scheme was supposedly being
offered to Premier clients only.

It was discovered that the above-mentioned deposits were transacted using petitioner Katherenes
computer and work station using the code or personal password CEO8. So as not to ruin its name
and goodwill among its clients, respondent HSBC reimbursed York the P2,500,000.00. Based on
the foregoing factual circumstances, respondent HSBC, through its personnel, filed a criminal
complaint for Estafa and/or Qualified Estafa before the Office of the City Prosecutor, Cebu City.

On 1 July 2003, respondent HSBC appealed the above-quoted resolution and foregoing comment
to the Secretary of the DOJ by means of a Petition for Review.

In a Resolution dated 6 April 2004, the Chief State Prosecutor, Jovencito R. Zuo, for the
Secretary of the DOJ, dismissed the petition. In denying respondent HSBCs recourse, the Chief
State Prosecutor held that: Sec. 12 (c) of Department Circular No. 70 dated July 2, 2000
provides that the Secretary of Justice may, motu proprio, dismiss outright the petition if there is
no showing of any reversible error in the questioned resolution.

The CA found fault in the DOJs failure t identify and discuss the issues raised by the respondent
HSBC in its Petition for Review filed therewith. And, in support thereof, respondent HSBC
maintains taht it is correct to argue that It was not necessary for the Secretary of Justice to have
his resolution recite the facts and the law on which it was based. Because courts and quasi-
judicial bodies should faithfully comply with Sec. 14, Art. VIII of the Constitution requiring that
decisions rendered by them should state clearly and distinctly the facts of the case and the law on
which the decision is based.

ISSUE: WON the finding of the prosecutor and the DOJ that there is no probable cause to hold
petitioners liable for trial is the same as a judgment of the court.

HELD: NO. It must be remembered that a preliminary investigation is not a quasi-judicial

proceeding, and that the DOJ is not a quasi-judicial agency exercising a quasi-judicial function
when it reviews the findings of a public prosecutor regarding the presence of probable cause. In
GUARANTEED 75-R

Bautista v. Court of Appeals, 360 SCRA 618 (2001), this Court held that a preliminary
investigation is not a quasi-judicial proceeding, thus: [T]he prosecutor in a preliminary
investigation does not determine the guilt or innocence of the accused. He does not exercise
adjudication nor rule-making functions. Preliminary investigation is merely inquisitorial, and is
often the only means of discovering the persons who may be reasonably charged with a crime
and to enable the fiscal to prepare his complaint or information. It is not a trial of the case on the
merits and has no purpose except that of determining whether a crime has been committed and
whether there is probable cause to believe that the accused is guilty thereof. While the fiscal
makes that determination, he cannot be said to be acting as a quasi-court, for it is the courts,
ultimately, that pass judgment on the accused, not the fiscal.

Though some cases describe the public prosecutors power to conduct a preliminary
investigation as quasi-judicial in nature, this is true only to the extent that, like quasi-judicial
bodies, the prosecutor is an officer of the executive department exercising powers akin to those
of a court, and the similarity ends at this point. A quasi-judicial body is an organ of government
other than a court and other than a legislature which affects the rights of private parties through
either adjudication or rule-making. A quasi-judicial agency performs adjudicatory functions such
that its awards, determine the rights of parties, and their decisions have the same effect as
judgments of a court. Such is not the case when a public prosecutor conducts a preliminary
investigation to determine probable cause to file an Information against a person charged with a
criminal offense, or when the Secretary of Justice is reviewing the formers order or resolutions.
In this case, since the DOJ is not a quasi-judicial body, Section 14, Article VIII of the
Constitution finds no application. Be that as it may, the DOJ rectified the shortness of its first
resolution by issuing a lengthier one when it resolved respondent HSBCs motion for
reconsideration.

Applying the foregoing disquisition to the present petition, the reasons of DOJ for affirming the
dismissal of the criminal complaints for estafa and/or qualified estafa are determinative of
whether or not it committed grave abuse of discretion amounting to lack or excess of jurisdiction.
In requiring hard facts and solid evidence as the basis for a finding of probable cause to hold
petitioners Bernyl and Katherene liable to stand trial for the crime complained of, the DOJ
disregards the definition of probable causethat it is a reasonable ground of presumption that a
matter is, or may be, well-founded, such a state of facts in the mind of the prosecutor as would
lead a person of ordinary caution and prudence to believe, or entertain an honest or strong
suspicion, that a thing is so. The term does not mean actual and positive cause nor does it
import absolute certainty. It is merely based on opinion and reasonable belief; that is, the belief
that the act or omission complained of constitutes the offense charged
GUARANTEED 75-R

Olaguer vs RTC

FACTS: The parameters of the jurisdiction of the ordinary courts in relation to the Securities
and Exchange Commission (SEC) and the Sandiganbayan are put into issue in this petition.
private respondents are the only stockholders with the right to vote of the Philippine Journalists,
Inc. (PJI) Publisher of several daily periodicals such as Manila Journal, People's Journal, etc.
Sometime in 1977, PJI obtained from the Development Bank of the Philippines (DBP) certain
financing accommodations and as security thereof executed a first mortgage in favor of DBP on
its acts enumerated in a list attached to the mortgage. The PJI stockholders assigned to DBP the
voting rights over 67% of the total subscribed and outstanding voting shares of stock of the
company held by them. The DBP appointed said PJI stockholders as proxies to exercise its right
to vote. Due to some financial difficulty on its part, PJI requested for a restructuring of its loan
obligation with certain conditions. The request was granted by the DBP in a letter dated August
4, 1986. Due to the default on the part of the PJI the DBP cancelled the proxies in favor of the
assigning stockholders on September 30, 1986 and designated as its proxies petitioner Eduardo
Olaguer, Jose Mari Velez and Manuel de Leon.

Petitioner Olaguer asked private respondent Rosario M. Barreto Olivares to assign qualifying
shares not only to the three proxies of DBP but also to two others to be chosen by him so as to
enable the five of them to sit in the PJI board of directors, and that, accordingly, they may be
able to coordinate more effectively with DBP as regards the early evaluation and approval of the
request for another restructuring of the PJI loan.

Although Olaguer was elected chairman of the board and chief executive officer of PJI he failed
to comply with his commitment and that this gave private respondents a reason to cancel the
assignment. Olaguer also committed certain illegal acts which gave rise to the filing of several
complaints against him.

However, before these cases could be resolved, Olaguer's appointment as member of the board of
directors of DBP was terminated by President Corazon C. Aquino effective September 9, 1987.

It is likewise alleged that, the termination notwithstanding, Olaguer continued to exercise and
retain full management and control of PJI. The DBP chief legal counsel wrote to petitioner Reyes
informing him of Olaguer's removal from office and enjoining him from implementing or
complying with any instructions from Olaguer and from disposing of the properties of PJI and
disbursing any funds without prior approval of, the board of directors of PJI which will soon be
elected, except such amounts needed in the ordinary course of business. Accordingly, the DBP,
acting through its Chairman, Jesus Estanislao and its Director-in-Charge, Jose Mari Velez,
entered into an Interim Agreement with private respondents. The said agreement called for a
special stockholders meeting for the purpose of electing a new board of directors which shall
hold office until the next regular stockholders meeting to be held on February 2, 1988.

In a letter dated December 14, 1987, the DBP chief legal counsel informed the private
respondents that the said Interim Agreement cannot be implemented because Olaguer claims that
he has just been designated the fiscal and team leader of the Presidential Commission on Good
GUARANTEED 75-R

Government (PCGG) assigned to the PJI and that all his actions are sanctioned and reported to
PCGG Chairman Ramon A. Diaz, and that it is the PCGG which exercises the voting rights of all
PJI common stocks sequestered since 1986, including those assigned to DBP and that the PJI
qualifying share now held by PJI Directors came from shares sequestered by the PCGG.

On January 4, 1988, a motion to dismiss was filed by the petitioners on the ground that the court
has no jurisdiction over the persons of petitioners; that they were not served summons and that
the subject matter of the action involves controversies arising out of intra-corporate relations
between and among stockholders which are covered by the provisions of Section 5 of
Presidential Decree No. 902-A so that the matter is within the original and exclusive jurisdiction
of the Securities and Exchange Commission (SEC); that the venue for a petition seeking
injunctive relief should be the Sandiganbayan. On January 14, 1988, an order was issued by the
trial court denying the motion to dismiss. Hence, the herein petition for certiorari and prohibition
with a prayer for the issuance of a temporary restraining order and/ or a writ of preliminary
injunction.

ISSUE: Whether or not the trial court has jurisdiction over the subject matter of the action

RULING: No. The petition is impressed with merit. There is no dispute that the PJI is now
under sequestration by the PCGG and that Civil Case No. 0035 was filed in the Sandiganbayan
wherein the PJI is listed as among the corporations involved in the unexplained wealth case
against former President Marcos, Romualdez and many others. The records likewise show that
petitioner Olaguer, among others, is a fiscal agent of the PCGG and that as Chairman of the
Board of Directors of the PJI he was acting for and in behalf of the PCGG. Under Section 2 of
Executive Order No. 14, the Sandiganbayan has exclusive and original jurisdiction over all cases
regarding "the funds, moneys, assets and properties illegally acquired by Former President
Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, their close relatives, subordinates,
business associates, dummies, agents, or nominees," civil or criminal, including incidents arising
from such cases.

The Decision of the Sandiganbayan is subject to review on certiorari exclusively by the Supreme
Court.

In the exercise of its functions, the PCGG is a co-equal body with the regional trial courts and
co-equal bodies have no power to control the other. The regional trial courts and the Court of
Appeals have no jurisdiction over the PCGG in the exercise of its powers under the applicable
Executive Orders and Section 26, Article XVIII of the 1987 Constitution and, therefore, may not
interfere with and restrain or set aside the orders and actions of the PCGG. By the same token,
the regional trial courts have no jurisdiction over the acts of fiscal agents of the PCGG acting for
and in behalf of said commission.

The Commission should not be embroiled in and swamped by legal suits before inferior courts
all over the land. Otherwise, the Commission will be forced to spend valuable time defending all
its actuations in such courts. This will defeat the very purpose behind the creation of the
Commission. Accordingly, Section 4(a) of Executive Order No. 1 expressly accorded the
GUARANTEED 75-R

Commission and its members immunity from suit for damages in that: "No civil action shall lie
against the Commission or any member thereof for anything done or omitted in the discharge of
the task contemplated by this order."

Petitioners Olaguer and Reyes appear to be fiscal agents of the PCGG. There can be no doubt,
therefore, that the subject matter of the action (the PJI its properties and assets) falls within the
exclusive jurisdiction of the Sandiganbayan. Petitioners, as fiscal agents of the PCGG, cannot be
sued in such capacity before the ordinary courts. The tribunal for such purpose is the
Sandiganbayan.

It necessarily follows that the issues raised by the private respondents before the respondent
judge to the effect that petitioners are usurpers and have no right to sit in the board of directors or
act as corporate officers of the PJI are issues which should be addressed to the Sandiganbayan.