VICENTE FRAGANTE, PLAINTIFF AND APPELLANT, VS. PEOPLE’S HOMESITE AND HOUSING CORPORATION, DEFENDANT AND APPELLEE.

Fragante versus People's Homesite and Housing Corporation

The Case

This is the case of Fragante versus People's Homesite and Housing Corporation. Vicente Fragante, who was then General Manager and Acting Chairman of the Board of Directors of the defendant corporation, sued his employer to recover back salaries for the period of his suspension and the value of his terminal vacation and sick leave privileges. He had been suspended by order of the President only minutes before he reached the compulsory retirement age of sixty-five, and he was later exonerated of the charges against him. The case matters because it fixes the rule on automatic and compulsory retirement in the civil service: retirement operates by force of law upon reaching the statutory age, and neither a suspension nor a subsequent exoneration can extend the employee's service or entitle him to back salaries.

Procedural History

Fragante commenced the action in the Court of First Instance of Quezon City to collect back salaries corresponding to the period of his suspension. He later sought to amend his complaint to recover moral damages, attorney's fees and costs, but the amendment was disallowed. The defendant filed a motion to dismiss which, upon the suggestion of the court, was converted into an answer. After trial, the lower court rendered decision dismissing the complaint, without pronouncement as to costs. Fragante then brought the case to the Supreme Court on appeal, raising only questions of law.

Facts

At approximately thirty-five minutes before midnight on April 4, 1954, on the eve of his sixty-fifth birthday, Vicente Fragante was suspended from office. He was then General Manager and Acting Chairman of the Board of Directors of the People's Homesite and Housing Corporation. The suspension was made pursuant to an order issued by the President on April 3, 1954, effective immediately and to continue until after the termination of the investigation of the charges against him. The corporation and the Government Service Insurance System were notified of the suspension and were asked to defer action on his request for retirement. Action on the retirement was accordingly suspended, and the corporation, while confirming and ratifying the suspension, withheld payment of his claim for vacation leave and other retirement privileges. The President later appointed Vicente Orosa to replace Fragante in an acting capacity.

From the time of his suspension until his exoneration, no formal hearing on the charges was ever conducted, and Fragante was never required to file an answer. On August 17, 1956, after more than two years of suspension, he was absolved, the President having stated that after looking into the charges he was satisfied that they were without merit.

Upon receiving notice of his exoneration, Fragante demanded from the corporation payment of his salary during the suspension and of his additional terminal vacation and sick leaves in the amount of 38,805 pesos and 83 centavos. The demand was refused, and he brought suit. The corporation resisted on the ground that he had already been automatically retired by operation of law.

Issues

• Whether or not the plaintiff's services with the government were extended by the mere fact that the President ordered his suspension approximately eighty-five minutes before he reached the automatic and compulsory retirement age.
• Whether or not, upon his exoneration from the administrative charges, the plaintiff is necessarily entitled as a matter of right to reimbursement for unpaid salaries corresponding to the period of suspension.
• Whether or not, contingent upon an affirmative answer to the two preceding issues, the plaintiff is entitled to be reimbursed for damages suffered as a result of his suspension.

Applicable Provisions

Section 12, paragraph (c) of Commonwealth Act Number 186, as inserted by Section 8 of Republic Act Number 660 and as amended by Section 6 of Republic Act Number 728, provides:

(c) Retirement shall be automatic and compulsory at the age of sixty-five years, if he has completed fifteen years of service and if he has not been separated from the service during the last three years of service prior to retirement; otherwise he shall be allowed to continue in the service until he shall have completed the required length of service unless he is otherwise eligible for disability retirement. This clause shall not apply to members of the judiciary and constitutional officers whose tenure of office is guaranteed. Upon specific approval of the President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, or the Chief Justice of the Supreme Court, as the case may be, an employee may be allowed to continue to serve in the Executive, Legislative, or Judicial branch of the Government after the age of sixty-five years if he possesses special qualifications and his services are needed. It shall be the duty of the employer concerned to notify each such employee under its direction of the date of his automatic separation from the service at least sixty days in advance thereof.

This provision supplies the test for the whole case: retirement is automatic and compulsory at sixty-five, and the only circumstance that extends service is a specific approval by the President grounded on special qualifications and need.

Ruling

On the first issue, the Court held that Fragante's services were not extended. He had completed more than fifteen years of service and reached sixty-five years of age on April 5, 1954, so even if he was suspended minutes before that date, he is deemed to have been automatically and compulsorily retired on that date. The Court acknowledged that the President's acts, the midnight service of the suspension order, the acting appointment of a replacement, and the order of exoneration, might show a desire to keep supervision over him during the investigation, but such intention is of no moment. The law requires a specific approval of continuance upon a finding that the employee possesses special qualifications and his services are needed, and these conditions were not proven. The Court put the point sharply: to infer approval from the act of suspending him minutes before retirement is to indulge in idle contradiction, for suspension is a negation of one's continuance in office.

On the second issue, the Court held that exoneration does not entitle him to back salaries. It distinguished the Naric case, where a suspended employee who was exonerated was reinstated and paid his back salaries. There, the employee did not cease to be in office by virtue of automatic retirement, unlike Fragante, who had already reached the retirement age at the time of his suspension. Even if exonerated, he could not be reinstated nor his salary reimbursed.

On the third issue, since the first two issues were answered in the negative, the claim for damages could not prosper. The Court closed with the imperative terms of the law: having been automatically retired upon completing sixty-five years of age, his subsequent exoneration cannot entitle him to reimbursement of any salary corresponding to the period of his suspension.

Doctrine

Retirement under the civil service law is automatic and compulsory at the age of sixty-five years, provided the employee has completed fifteen years of service and has not been separated from the service during the last three years prior to retirement. It operates by force of law and does not depend on the will of the appointing authority. The only circumstance that extends the service of an employee beyond retirement age is a specific approval by the President, given upon a finding that the employee possesses special qualifications and that his services are needed; the approval must be specific, and it cannot be inferred from acts that are inconsistent with continuance in office. Suspension is not extension; it is a negation of continuance in office. Consequently, a suspended employee who is later exonerated is entitled to reinstatement and back salaries only if he had not yet been automatically retired; if he had already reached the retirement age, exoneration gives him no right to back salaries or damages.

Disposition

The Supreme Court affirmed the decision of the lower court dismissing the complaint, without pronouncement as to costs. The defendant corporation won.

Remember This

Memorize the line that suspension is a negation of continuance in office, and that only a specific presidential approval upon special qualifications and need can extend service beyond sixty-five. Examiners use this case to test automatic and compulsory retirement and to distinguish it from the Naric rule on reinstatement and back salaries after exoneration.