MARIANO CONDE, PLAINTIFF AND APPELLANT VS. THE NATIONAL TOBACCO CORPORATION AND THE BOARD OF LIQUIDATORS, DEFENDANTS AND APPELLEES.

Appeal by Mariano Conde from the decision of the Court at First
Instance of Manila dismissing the complaint filed by him against the
National Tobacco Corporation and the Board of Liquidators, without
costs.

It appears that on September 6, 1940 appellant was
appointed Secretary-Treasurer of the National Tobacco Corporation with
an annual compensation of P4,800 effective as of October 15, 1940. On
August 22, 1941 he was appointed Secretary and Administrative Officer
of the same company with the same annual compensation. On October 23,
1945 he was appointed Acting Secretary and Administrative Officer of
the company with an annual compensation of P5,100.00. On March 18, 1946
he was appointed Acting Secretary and Administrative Officer with an
increased annual compensation of P6,000.00. On September 16 of the same
year he was appointed Treasurer and Chief, Credit Department, with the
same annual compensation of P6,000.00. The appointment extended
indicated that it was a mere “change in designation”. On November 18,
1946 he was appointed Treasurer and Credit Manager with m increased
annual compensation of P7,200.00 effective as of November 1st of said
year. Finally, on December 21, 1948 he was appointed Treasurer with a
reduced annual compensation of P6,000.00 effective as of December 16,
of laid year. This was in pursuance of Resolution No. 265 passed by the
Board of Directors of the company on December 6, 1948, which stated, inter alia,
that the reduction of the salary of appellant was for the purpose of
making uniform the annual compensation of the Department Chiefs of the
company. In this connection the resolution also relieved appellant of
his duties as Secretary of the Board of Directors and Administrative
Officer, presumably in order that his work as department chief would
not be much more than that of other department chiefs. Several
petitions for reconsideration filed by appellant in connection with the
reduction of his annual compensation were denied by the Board of
Directors.

By executive order No. 372 the National Tobacco
Corporation was dissolved and a Board of Liquidators was created for
the purpose of settling and closing its affairs within a period of
three years. Appellant also sought twice from the Board of Liquidators
a reconsideration of the Board resolution reducing his annual
compensation, but his petitions were denied. As a result, after his
retirement from the service of the National Tobacco Corporation on
January 31, 1952, he commenced the present action to recover from the
latter and/or the Board of Liquidators, jointly and severally, the sum
of P5,283.33, with legal interest from the filing of the complaint,
plus the sum of P1,750.00 for attorney’s fees, and the costs of the
suit. The first amount represented alleged salaries and gratuity
differentials which he failed to receive by reason of the fact that the
computations made for the payment of his salaries and gratuity were
based on his reduced compensation of P6,000.00 per annum.

The questions raised by appellant in this instance may be summarized as
follows: firstly, that the document Exhibit B constituted an
appointment and not a mere notice of the reduction of his salary, and
that, therefore, it was not valid without the approval of the Chief
Executive; secondly, that the approval of the Operation Budget of the
company for the fiscal year July 1, 1948 to June 30, 1949 by the
Control Committee of the Government Enterprises Council did not amount
to presidential approval of Exhibit B; and lastly, that the court
should have rendered judgment in his favor by reason of the prevailing
governmental practice of not applying any reduction of salary for any
particular position to the incumbent, and on the further ground that
the Board of Directors of the National Tobacco Corporation had
discriminated against appellant.

Appellant concedes the
authority of his former employer to reduce his salary or compensation,
but argues that the document Exhibit B appointing him as Treasurer was
never approved by the President of the Philippines and, for this
reason, never became legally effective. This contention is untenable.

It is true that the approval of the President was necessary in the case
of appointments to positions in the National Tobacco Corporation
involving a salary of P3,000.00 or more annually. It is likewise a fact
that the appointments extended to appellant mentioned heretofore were
submitted to and approved by the President of the Philippines, through
the Chief of the Executive Office, with the exception of the last which
appointed him as Treasurer only and reduced his annual compensation
from P7,200.00 to P6,000.00. The rule referred to, however, would apply
to appellant’s case only if the document marked Exhibit B constituted,
in fact and in law, a real appointment and not a mere notice advising
him of the reduction of his annual salary and of his duties as employee
of the company. After a careful consideration of the circumstances that
led to the issuance thereof, we are inclined to believe that the
document was in the nature of a mere notice and, therefore, needed no
presidential approval. It must be observed that the preceding
appointments were as Secretary-Treasurer (Exhibit C); as Secretary and
Administrative Officer (Exhibit D); as Acting Secretary and
Administrative Officer (Exhibit E); as Acting Secretary and
Administrative Officer (Exhibit F); as Treasurer and Chief, Credit
Department (Exhibit G); and as Treasurer and Credit Manager (Exhibits
A, A-1); while the one in question was as Treasurer exclusively.
Appellant, therefore, was not given a new job; the so-called
“appointment” merely reduced his duties and, as a consequence, made a
corresponding reduction in his annual compensation. Exhibit B itself
expressly states that the change was made in pursuance of Board
Resolution No. 265 which was adopted for the purpose of standardizing
the salaries of chiefs of departments, for which reason, “the
compensation of the treasurer be was reverted to six thousand
(P6,000.00) pesos per annum effective December 16, 1948” (Exhibit 6).
It is clear, therefore, that exhibits 6 and B, in effect, merely took
away from appellant his additional duties as credit manager, and in
view of his reduced duties and to accomplish standardization of
salaries, his compensation was reverted to P6,000.00 per annum.

Moreover, the reduction of appellant’s duties was not at all arbitrary.
It was motivated principally by the fact that there had been created in
the corporation a separate position with an annual compensation of
P6,000.00, entrusted with the discharge of the duties of which
appellant was relieved.

From a technical point of view,
there would seem to be less reason to uphold appellant’s contention.
The term “appointment” is in law equivalent to “filling a vacancy” (6
C.J.S. 89). In this case it seems obvious to us that appellant never
vacated the position of treasurer; he did not have to vacate it in
order to accept the position to which he was “appointed” on December
21, 1948 (Exhibit B). In point of fact, therefore, the position of
Treasurer was not vacated by him by reason of his alleged appointment
as Treasurer only.

The fact that the appointments extended
in favor of appellant prior to the one in question were submitted to
and actually approved by the Office of the President of the Philippines
is explained by the fact that the appointment of September 6, 1940 was
his original appointment as Secretary-Treasurer and the subsequent ones
involved increases in salary or additional duties imposed upon the
appointee. Their submission to the Office of the President was in
pursuance of a policy in relation to appointments in government
controlled corporations involving additional expenditure and
disbursement or appropriation of funds. There is no showing in the
record that the same policy applied to a case of reduction of salary.

But even granting that the so-called appointment required presidential
approval, it may be gleaned from the record that there had been
substantial compliance with this requirement. The reduction of
appellant’s salary, after its approval by the General Manager and the
Board of Directors of the National Tobacco Corporation, was carried in
the Operation Budget of the corporation for the fiscal year July 1,
1948 to June 30, 1949. This Operation Budget was submitted to and
approved by the Control Committee of the Government Enterprises
Council, through its Chairman. This affirmative action was taken by
authority of the President of the Philippines (Exhibit 8-A). It must be
stated in this connection that by Executive Order No. 93 (Exhibit 15)
the Government Enterprises Council and particularly the Control
Committee thereof is the representative of the President in the
supervision of all government-owned and controlled corporations. The
act of said body, therefore, should be deemed to be an act done on
behalf of the President of the Philippines himself. This must be
binding upon appellant for the reason that all his appointments prior
to the one in question—which he deems valid and regular—were not
approved by the President of the Philippines personally but by the
Executive Secretary acting “by authority of the President”. (Exhibits 1
to 5).

With what has been stated heretofore we deem fully
resolved the main questions involved in this appeal and, finding the
appealed decision to be in accordance with law, the same is hereby
affirmed, with costs.

Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Gutierrez David, and Paredes, JJ., concur.