THE BOARD OF DIRECTORS OF THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE, PETITIONER, VS. DR. LUIS N. ALANDY AND COURT OF APPEALS, RESPONDENTS.

Appeal from a decision of the Court of Appeals, which affirms a decision of
the Court of First Instance of Manila, declaring that Resolution No. 422 of the
Board of Directors of the Philippine Charity Sweepstakes is void and illegal
only with respect to the appointment of Getulio Ambrosio as assistant general
manager of the Philippine Charity Sweepstakes, and holding that respondent
herein Dr. Luis N. Alandy is legally entitled to the said position, and ordering
payment to the latter of the difference in salary between P10,000 per annum, as
fixed by said resolution, and P7,200 per annum actually paid to him, from the
effective date of Resolution No. 422.

The salient facts are contained in the decision of the Court of First
Instance, which are quoted in the decision of the Court of Appeals, as
follows:

“Plaintiff Luis N. Alandy, claiming to be entitled to the position of
Assistant General Manager of the Philippine Charity Sweepstakes Office, brought
this action for quo warranto on July 21, 1956, against defendant Getulio
Ambrosio as the person who allegedly has usurped or has unlawfully held or
exercised the office of Assistant General Manager. As alleged in the complaint,
defendant Eugenio E. Santos is being sued in his: capacity as General Manager of
the Philippine Charity Sweepstakes Office and, as such, is the person from whom
all orders with reference to said office now in question directly emanate; while
the other defendants are sued in their capacity as Chairman and Members,
respectively, of the Board of Directors, Philippine Charity Sweepstakes, and, as
such, are the persons, together with defendant Eugenio E. Santos responsible for
the appointment of. defendant Getulio Ambrosio to, and the letter’s subseqaent
occupancy of said position of Assistant General Manager.

“The Philippine Charity Sweepstakes Office is tinder the Office of the
President of the Philippines. It is a “public corporation under the supervision
of a Board of Directors composed of five members, appointed by the President of
the Philippines with the consent of the Commission on Appointments. The Chief of
the Philippine Charity Sweepstakes Office, who is known as General Manager, his
assistant and the necessary personnel are appointed and their salaries are fixed
by the Board of Directors.

“On May 21, 1949, the plaintiff was appointed Assistant General Manager of
the Philippine Charity Sweepstakes Office, with compensation at the rate of
P7,200 per annum. The appointment of the plaintiff was approved by authority of
the President of the, Philippines and signed by the then Chairman of the Board
of Directors of the Philippine Charity Sweepstakes Office and by the Chairman of
the Control Committee. The plaintiff duly qualified, assumed charge of the
office of Assistant General Manager and continued to discharge the duties
thereof. The plaintiff, as such Assistant General Manager, was issued Policy No.
15029 on November 30, 1949, by the Government Service Insurance System, to
mature on November 30, 1963. The said policy is still in force.

“According to the By-Laws of the Philippine Charity Sweep-stakes ‘the
Assistant General Manager shall assist the General Manager in the performance of
his duties, and during the absence of the General Manager for any cause, the
Assistant General Manager shall perform all the duties of the General Manager,
and such other acts and duties as the Board or the General Manager may, in the
interest of the service, require him to perform from time to time*.

“On August 20, 1954, the Board of Directors passed Resolution No. 314,
approving the Budget and Plantilla for the fiscal year 1954-1955 and the
reorganization of the Sweepstakes Office. Said Resolution No. 314 states, in
part, as follows: ‘Several changes in the assignments of the personnel have been
effected, among which is the conversion of the position of the Assistant General
Manager to Field Supervisor and the abolition of the position of Treasurer. The
position of Assistant General Manager has been changed to General Field
Supervisor because of the need for a responsible official to conduct surveys in
the interest of Sales Promotion’. The Board of Directors directed the Acting
General Manager to issue an administrative order to carry out the reorganization
provided in the Budget and Plantilla as approved by the Board. In compliance
therewith, the Acting General Manager issued Administrative Order No. 2, dated
September 2, 1954, reorganizing the Sweepstakes Office.

“Under the said Administrative Order No. 2, the plaintiff was given the
designation of General Field Supervisor and defendant Getulio Ambrosio was
designated Credit and Accounting Chief. Both positions, together with that of
Sales Promotion Chief are grouped under the heading ‘Technical Staff’ of the
Office of the General Manager.

“On September 16, 1954, the Acting General Manager directed the plaintiff to
file not later than September 21, a Government Fidelity Bond in the amount of
P10,000 for the position of General Field Supervisor. On September 28, 1954, the
plaintiff applied under the Government Fidelity Fund for a bond as Acting
General Field Supervisor in the service of the Philippine Charity Sweepstakes
Office.

“On October 1, 1954, the plaintiff, as General Field Supervisor, asked the
Board of Directors for an increase of gasoline allowance in view of his present
designation.

“In the early part of November, 1954, the plaintiff filed with the Bureau of
Civil Service an application for eligibility under Republic Act No. 1080. On
November 15, 1954, the Deputy Commissioner of the Civil Service informed the
plaintiff by means of a letter that it appearing that he met the ‘requirements
for physician (first grade) eligibility’ under Act No. 1080, his said
application was duly registered in the Bureau of Civil Service.

“On March 18, 1955, a formal appointment was made for the plaintiff as
General Field Supervisor, with compensation at the rate of P7,200 per annum,
effective July 1, 1954. It is a proposed appointment which the plaintiff has
never received and accepted. Significantly, the appointment as prepared shows
that the printed words ‘Original, Probational, Permanent, Temporary, Transfer
Promotion/ in parenthesis were deleted, and instead the words ‘Designation with
the same salary’ were typewritten within the same parenthesis. In the same
appointment appears the efficiency rating of the plaintiff, which is 88%. The
said proposed appointment of the plaintiff was forwarded to, for consideration
in, the Bureau of Civil Service.

“On July 25, 1955, the plaintiff as General Field Supervisor was directed to
organize a branch office of the Philippine Charity Sweepstakes Office at San
Pablo City and was designated Branch Manager thereof by the General Manager.

“On December 3, 1955, the Board of Directors passed Resolution No. 422,
resolving among others ‘to create the position of Assistant General Manager with
a salary of P10,000 per annum and appoint Mr. Getulio Ambrosio to this position,
in both cases effective upon assumption of duty’.”

In arriving at its decision, the Court of Appeals reasoned as follows:

“It appears clear to us that the position of Assistant General Manager was
not abolished but its name was merely changed to General Field Supervisor by
said Resolution No. 314. If the intention was to abolish that position, the said
resolution should have said so as in the case of the treasurer of the
Corporation. Had the resolution only used the term “abolition” in connection
with the position and then created the position of General Field ” Supervisor,
there would be no doubt as to the intention of the Board of Directors. But
instead of “abolition” the term “conversion” was used. The reason for the
“conversion” or change, as stated in the resolution was the need for a
responsible official to conduct surveys in the interest of sales promotion. This
conversion or change of name was not necessary because under the By-Laws of the
Corporation, the Board or the General Manager may require the Assistant General
Manager to perform such acts and duties as may be necessary “in the interest of
the service”. The real effect of the resolution, therefore, insofar as appellee
is concerned, is that he was given the additional responsibility of personally
conducting surveys with the end in view of increasing the sale of sweepstakes
tickets. He was not divested of his regular functions as Assistant General
Manager. Article V of the By-Laws provides, in part, as follows: “The Assistant
General Manager shall assist the General Manager in the performance of his
duties, and during the absence of the General Manager for any cause, the
Assistant General Manager shall perform all the duties of the General Manager,
and such other acts and duties as the Board or the General Manager may, in the
interest of the service, require him to perform from time to time’.

“It follows that despite its expressed purpose to ‘create’ the position of
Assistant General Manager, Resolution No. 422 adopted by the Board on December
3, 1955 did neither create nor recreate it but only restored its name and
increased its salary from P7.200 to P10,000 per annum. What already exists need
not be created. Since this resolution is silent as to ‘General Field Supervisor’
and appellee was not dropped from the service after its passage, the
consequence, which was hidden but doubtless intended, was to provide a position
with that name for appellee. In short, as a result of the adoption of the two
resolutions in question appellee was ousted from his position of Assistant
General Manager and given the newly created position of General Field
Supervisor. Of course, the salary of the Assistant General Manager could be
increased anytime, and Resolution No. 422 insofar as it raised the salary from
P7,200 to P10,000, is perfectly valid. And it is believed that appellee does not
need another appointment to entitle him to the increase because it should be
presumed that the Board intended it for the occupant of the position whoever he
may be. It cannot be pretended that the increase was approved for the exclusive
benefit of respondent Getulio Ambrosio.

“In view of our conclusion that the position of Assistant General Manager was
not abolished by Resolution No. 413 but merely given another name, there is no
need of determining whether appellee accepted his appointment as General Field
Supervisor and whether he is estopped from claiming the position of Assistant
General Manager and contesting the appointment thereto of respondent Getulio
Ambrosio. Likewise, there is no need to determine whether appellee is eligible
or possesses the necessary qualifications for the position in question. This is
so because his original appointment as Assistant General Manager made way back
in 1949 has never been revoked and neither has he resigned or been removed from
the position.

“The result would be the same if we consider the conversion of the position
of Assistant General Manager into that of General Field Supervisor as equivalent
or tantamount to the abolition of the former and the creation of the latter.
Here, of course, we are confronted with the issues raised by appellants in which
they maintain that appellee accepted the appointment as General Field Supervisor
and assumed the duties thereof and therefore he is estopped from questioning the
right of respondent Getulio Ambrosio to hold the position of Assistant General
Manager.

“Appellants argue that appellee accepted the position of General Field
Supervisor because he performed certain official acts as such, such as (1) the
filing of an application for a government fidelity bond in which he placed in
the blank space for the ‘position for which bond is desired’ the words ‘Acting
General Field Supervisor’; (2) requesting for his old gasoline allowance and
signing the request as General Field Supervisor; and (3) applying for vacation
and sick leaves of absence and signing the applications as General Field
Supervisor. It is true that appellee signed certain applications in his capacity
as General Field Supervisor and performed certain duties purporting to pertain
to that position. This does not necessarily mean, however, that he accepted and
qualified for the position in the sense that he abandoned and vacated the
position of Assistant General Manager. In the first place, he has not taken oath
of office as General Field Supervisor and, in the second place, he has not
received the formal appointment which until now has not yet been approved by the
corresponding authorities and which was made only on March 18, 1955, in spite of
the fact that the conversion of the position of Assistant General Manager into
that of General Field Supervisor took place on August 20, 1954. In fact, he
protested the appointment in a letter to the Commissioner of Civil Service on
the ground that such appointment was a demotion from his position as Assistant
General Manager. As the trial court very aptly observed, appellee ‘had no choice
but to continue the per- _ formance of the duties of the office with a different
name but practically having the same functions. He had no ground to complain,
because his position was not abolished and he was not ousted therefrom.’ The
fact is that he only obeyed the order of his superiors-the General Manager and
the Board of Directors. He could have refused to carry out the ostensible
purpose for which the conversion of his position was made without affecting
adversely the effectiveness of the Corporation and rendering himself open to the
charge of insubordination. There is evidence that he had incurred the
displeasure of the then Chairman of the Board of Directors and that he had been
harassed and inconvenienced to the extent of being humiliated. In short, it
cannot be said that appellee accepted the position of General Field Supervisor
voluntarily and clearly and consequently his case should be considered an
exception to the general rule that when a public official accepts appointment to
an office he will be considered to have abandoned the office he was occupying by
virtue of a former appointment.

“Finally, it is claimed by appellants that appellee is not eligible to the
position of Assistant General Manager because it is in the classified service
and his Civil Service eligibility is only second grade. If that is the only
objection, the proper thing for the Board of Directors to do was to submit the
question to the President for determination whether the position should! not be
declared as policy-determining, primarily confidential or highly technical in
nature. Had that been done, there would hardly be any doubt as to the result,
because if the position of General Field Supervisor, upon the recommendation of
the Commissioner of Civil Service, was placed in the unclassified service there
seems to be no reason why the higher position of Assistant General Manager will
not be placed also in the exempt class.

“When appellee was appointed as Assistant General Manager in 1949, no
objection was raised and evidently he was considered then as qualified for the
position. The appointment can no longer be assailed and if he is deprived of the
position now, it would be violative of the constitutional provision that ‘no
officer or employee in the Civil Service shall be removed or suspended except
for cause as provided by law’ (Sec. 4, Art XL Constitution). This provision
applies both to classified and unclassified civil service officials or employees
without distinction (Lacson vs. Romero, 84 Phil., 740; 47 Off. Gaz.,
1778; Santos vs. Mallari, et al., 87 Phil., 289; 48 Off. Gaz.,
1787).”

The first error assigned in this appeal is as follows:

“The Court of Appeals erred in holding that Dr. Luis N. Alandy, respondent
herein, may maintain the action for quo war-ranto, in his own name, under
Section 6, Rule €8 of the Rules of Court and, for that reason, in not dismissing
the case for lack of jurisdiction.”

We find no merit in this assignment of error. In the first place, it does not
appear to have been raised in the Court of Appeals; hence it may not be raised
for the first time before us. In the second place, the Philippine Charity
Sweepstakes is a corporation created by law (C.A. No. 301). The Rules of Court
expressly provides that the action of quo warranto lies against a
person who usurps, intrudes into or unlawfully holds or exercises a public
office in a corporation created by authority of law (Sec. 1, Rule 68). The Rules
also allow the person who claims to be entitled to a public office usurped by
another to institute the action of quo warranto in his own name. (Sec.
6, Rule 68.)

Counsel for the petitioner invokes many principles obtaining in American law
to the effect that the action of quo warranto can only be instituted
against public corporations, where said corporations exercise a portion of the
sovereign powers of the state. That rule does not apply in this jurisdiction
where quo warranto is a special civil action. (Sec. 6, Rule 68.) Even
in the United States the action of quo warraMo lies to try a title to office in
a private corporation.

“Quo warranto, proceedings ordinarily are a proper remedy to try
title to office in a private corporation.—Except in some jurisdiction, quo
warranto, or an information or action in the nature thereof, is a proper
remedy to try title to office in a private corporation. In some jurisdictions,
statutes expressly authorize quo warranto proceedings to try and
determine title to an office in a corporation, but under such statutes the
proceedings will not lie against persons who are not officers. Apart from
statute, an office in a private corporation, created and chartered by the state,
is deemed to be of a public character, or the public is deemed to have an
interest thereon, in such a sense and to such an extent as to render the remedy
available against a person who, not being lawfully entitled to do so, holds the
office.” (74 C.J.S., p. 192; Italics ours.) (p. 15, Brief for the
respondents.)

The second and third assignments of error are as follows:

“The Court a quo erred in holding that the action for quo
warranto having been commenced on July 21, 1956, it was instituted within
one year after the cause of the ouster, or the right of the plaintiff to hold
office, arose, when there can be no question that if there were any ouster at
all, it occurred on August 20, 1954.

“The Court of Appeals erred in holding that Luis N. Alandy was ousted from
the position of Assistant General Manager on December 3, 1955, when resolution
No. 422 was adopted.”

Neither do We find any merit in the above errors. It is argued that the cause
of action of respondent Dr. Alandy arose when on August 20, 1954, the Board of
Directors passed Resolution No. 314, converting the position of assistant
general manager to general field supervisor, and not from December 3, 1955 when
Resolution No. 422, creating the position of assistant general man-ager with
compensation at P10,000 per annum and ap-pointing Getulio Ambrosio to said
position, was approved by the Board. The action of Dr. Alandy did not accrue in
1954, when actually no salary was appropriated for the position, of assistant
general manager. No action could accrue in his favor at that time, first because
there was no salary appropriated, secondly because there was nobody appointed to
said position. The salary was appropriated only by Resolution No. 422. It was
also by such resolution only that another person, Getulio Ambrosio, was
appointed to the position of assistant general manager. It was only when an
appointment was issued in favor of another person that the cause of action in
favor of Dr. Alandy actually accrued. While no appointment was issued in favor
of another, Alandy was not yet deprived of any right to the position.

The removal of Dr. Alandy from his position of assistant general manager was
effected by Resolution No. 422; the previous Resolution No. 314, suppressing the
salary of assistant general manager, did not do so. It was the second Resolution
No. 422, reinstating the salary by increasing the amount, but appointing to said
position Mr. Getulio Ambrosio, which deprived him of the position. As declared
by the Court of Appeals the fact of removal was effected at different times and
by different resolutions. But the two resolutions Nos. 314 and 422 can not hide
or suppress the fact that what actually was done was to remove Dr. Alandy from
his position of assistant general manager and to appoint somebody to his
position.

The fourth assignment of error is as follows:

“The court a quo erred in not holding that, by his acceptance of his
appointment as, and his assumption of the duties of, General Field Supervisor,
respondent Alandy is estopped from claiming the position of Assistant General
Manager and impugning the appointment of the late Getulio Ambrosio to the said
position.”

To support this assignment of error, claim is made that the various acts of
Dr. Alandy, such as the filing by him of a fidelity bond in the amount of
P10,000, his request for an increase of gasoline allowance and signing the
request as general field supervisor, his applying for vacation and sick leaves
of absence and his signing as general field supervisor, and his assumption and
performance of the functions of the position of general field supervisor, estop
him from claiming the position of assistant general manager. We do not agree to
this argument. Estoppel requires that a person claimed to be estopped must have
knowledge of the fact that his voluntary acts would deprive him of some rights
because said voluntary acts are inconsistent with said rights.

“The essential elements of an equitable estoppel as related to the party
estopped are: (1) Conduct “which amounts to a false representation or
concealment of material facts, or, at least, which is calculated to convey the
impression that the facts ace otherwise, than, ‘ and inconsistent with those
which the party subsequently attempts to assert; (2) intention, or at least
expectation, that such conduct shall be acted upon by the other party; (3)
knowledge, actual, or constructive, of the real facts * * *.” (19 Am. Jur. pp.
642-643.)

Dr. Alandy assumed the duties of general field supervisor, because the
resolution stated that his position was converted and that of assistant general
manager did not have any salary and was actually suppressed from the budget. He
did not know and neither was he made to understand that thenceforth he should no
longer claim the position of assistant general manager should this be recreated.
His reaction to the appointment of Ambrosio to the recreated position was to
claim the position for himself. Had he allowed Ambrosio to continue in said
position of assistant general manager for some unreasonable length of time and
while he, at the same time, continued performing the duties of general field
supervisor without any protest or objection, then it can be said that he would
be deemed to have waived his right to the position of assistant general manager,
or estopped to claim it. The fact is, however, that immediately after the
approval of the resolution and within a reasonable time, he objected to the
appointment of Getulio Ambrosio to the position and thereafter asserted his
right thereto before the court. The resolution recreating the position of
assistant general manager is dated December 8, 1955. Dr. Alandy, through his
attorney, objected to such an act of the Board of June 9, 1956 and, thereafter,
he continued fighting for it before the Commissioner of Civil Service, until he
filed this action in the Court of First Instance on July 21, 1956. Certainly no
waiver or estoppel of any kind can be inferred from these acts of Dr.
Alandy.

Before proceeding to the other questions raised on the appeal, we call
attention to the fact that an employee in the Civil Service may not be suspended
or removed from his office, except in accordance with law. (Art. XII, Sec. 4,
Constitution.) We have sustained in a series of cases that an employee can not
be removed or suspended without proper proceedings and except for causes
provided by law, and that he may not also be removed or transferred from his
position against his consent, without such proceedings. It is enough to cite the
following cases to show the attitude of this Court against transfers or removals
of employees without cause or without their consent: Paulino J. Garcia, et al.,
petitioners, vs. Panfilo Lejano, et al., respondents, supra, p. 116;
Rodriguez vs. Del Rosario, 93 Phil., 1070; 49 Off. Gaz., [12] 5427;
Gorospe vs. De Veyra, 96 Phil., 545; 51 Off. Gaz., [2] 692; Alzate
vs. Mabutas, 51 Off. Gaz., [5] 2452; Santos vs. Mallare, 87
Phil., 289; 48 Off. Gaz., [5], 1787; Lacson vs. Romero, 84 Phil., 740;
47 Off. Gaz., [4], 1778.

As we have stated above, the act of removal or transfer in this case may be
said to have been performed surreptitiously, first by a suppression of the
appropriation for the salary for the position of assistant general manager,
second, the assignment of Dr. Alandy to the newly created position of general
field supervisor, and third, the revival of the position of assistant general
manager and the appointment thereto of Getulio Ambrosio. No amount of reasoning
can make out of these acts anything but a removal of an employee from his
position and the substitution of another in his place.

The fifth assignment of error reads as follows:

“The Court of Appeals erred in holding that respondent Luis N. Alandy does
not need another appointment to entitle him to the increase in salary, provided
for the position of Assistant General Manager, from P7,200.00 to P10,000.00 per
annum pursuant to Resolution No. 422.”

It is argued in support of this assignment of error that unless and until
respondent Dr. Alandy is extended a new appointment promoting him to the new
salary rate he is not entitled to the difference in salary between the new rate
and the old one. We take judicial notice of the practice being followed in the
Philippine Civil Service that an increase in the salary appropriated for a
position does not actually accrue to the holder of the position until and unless
said holder (of the position) has been given the increased salary. The case of
respondent Dr. Alandy falls under this general rule or practice, especially as
another person had been indicated to receive the new salary. An increase in an
appropriation or salary should not automatically entitle the holder of the
position to such increased salary; this increase may have possibly been effected
because of the greater importance of responsibility attached or to be. attached
to the recreated position. But the fact that an employee holds that position,
does not necessarily imply that he is fully entitled or qualified to receive the
increased salary provided for. We, therefore, agree with the petitioner that
respondent Dr. Alandy may not receive the increased salary of P10,000 until and
unless expressly authorized to receive said promotion in salary.

The above considerations cover all the important questions raised in the
appeal. Wherefore, with the modification above indicated, that respondent Dr.
Alandy is not yet entitled to receive the increase in salary of P10,000, the
judgment of the Court of Appeals is hereby affirmed, without costs.

Paras, C.J., Padilla, Bautista Angelo, Reyes, J.B.L., Barrera, and
Gutierrez David, JJ., concur.

Judgment affirmed with modification.