ELDO J. CARIÑO, ARSENIO C. MIGUEL, JOHNNY F. ILAR, SOTERO M. DE CASTRO, GUSTAVO E. ESPINO, AND LICERIO D. ESPINOSA, PETITIONERS AND APPELLANTS, VS. AGRICULTURAL CREDIT AND COOPE…

Appeal by petitioners on “purely questions of law” ^[4] from a judgment of the Court of First Instance of Manila ^[5], as follows:

“WHEREFORE, the petition is dismissed but the
respondent ACCFA is hereby ordered to pay the petitioners separation
pay equivalent to one month pay or 15 days pay for every year of
service, whichever is greater, a fraction of at least six months being
considered as one whole year (Republic Act No. 1052, as amended by
Republic Act No. 1787), plus attorneys’ fees which the court fixes in
the sum of P500 and costs.”

Petitioners-appellants were appointed permanent employees of the
ACCFA. Their positions, salaries and dates of appointment are, as
follows:

NAME	POSITION	ANNUAL SALARY	DATE OF APPOINTMENT
ldo J. Cariño	Confidential	P2,400	July 1, 1955
(Lawyer)	Agent	2,760	July 1, 1956
		2,940	July 1, 1957
Gustavo E. Espino	Confidential	2,400	Sept. 19, 1955
(First Grade, Civil Service)	Agent	2,580	July 1, 1956
		2,760	July 1, 1957
Arsenio C. Miguel	Confidential	2,400	July 1, 1955
(Lawyer)	Agent	2,760	July 1, 1956
		2,940	July 1, 1957
Sotero M. de Castro	Confidential	3,120	June 13, 1955
(Lawyer)	Investigator	3,300	July 1, 1956
		3,480	July 1, 1957
Johnny F. Ilar	Confidential
(Lawyer)	Investigator	2,407.20	April 15, 1958

The foregoing petitioners are all first grade eligibles. Except Gustavo E. Espino, they are all lawyers.

Originally, they were assigned to the Special Operations Service
unit of the ACCFA. Their duties consisted of conducting investigations
of charges of irregularities in any branch of the ACCFA and appearing
as witnesses in court. De Castro, Miguel and Ilar were, on August 11,
1958, transferred to the Office of General Counsel, per Special Order
No. 673. ^[6]

On September 17, 1958, petitioners were advised that their items in
the budget were abolished by the Board of Governors. Consequently,
their services were terminated. Hence, the present suit for mandamus to
compel reinstatement, payment of back salaries, moral damages,
attorneys’ fees and costs.

1. Ostensibly, petitioners’ positions were abolished for reasons of
economy. Well did the trial court say that such abolition was “a mere
subterfuge to remove petitioners in order to give room to their
(members of the Board of Governors’) own political proteges”. Because,
as the court correctly pointed out, shortly after the abolition,
“appointments to many positions involving higher salaries were extended
to new appointees”. True, these new appointments were given
designations different from “confidential investigator” or
“confidential agents”; but the “work involved in said appointments was
the same work performed by the employees (petitioners) who were
removed”. ^[7]

2. The economy reason out of the way, the result is that petitioners
were separated from the service without cause. They have not lost the
confidence of their superiors. On the contrary, four of them deserved
progressively-merited promotion in pay. The fourth (Ilar) was but a
recent employee. Ironically enough, all of them were thrown out of job.
Their positions were written off. But the same offices tagged with
other names were promptly restored, only to be occupied by new and different appointees.
This, we must say, is no more than abolition of the employees
themselves -not their positions. Bad faith taints such removal. It was
done in the whimsical exercise of arbitrary power. Petitioners are
permanent employees. The courts’ duty is to restore them to their
positions, to direct payment of their salaries from separation to their
reinstatement. ^[8]

3. We see no necessity to pass on respondents’ claim (Appellees’
brief, p. 2), that petitioners’ positions are “primarily confidential”.
For it is immaterial to the present inquiry. Section 1, Article XII of
the Constitution on this point reads:

“Section 1. A Civil Service embracing all branches and subdivisions of the Government shall be provided by law. Appointments in the Civil Service, except as to those which are policy-determining, primarily confidential
or highly technical in nature, shall be made only according to merit
and fitness, to be determined as far as practicable by competitive
examination.” ^[9]

This Court recently ruled that the foregoing constitutional precept
merely excepts primarily confidential positions from the coverage of
“the rule requiring appointments in the Civil Service to be made on the basis of merit and fitness as determined from competitive examinations”
(citing Jover vs. Borra, 49 O. G. [No. 7] 2755), but that “the
Constitution does not exempt such positions from the operation of the
principle emphatically and categorically enunciated in Section 4 of
Article XII, that –

‘No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law.’

and which recognizes no exception.” ^[10]

Again, we state that petitioners are entitled to reinstatement.

4. The lower court’s decision dismissing the petition is grounded
upon petitioners’ alleged failure to exhaust all administrative
remedies.

Here are the facts bearing on this point: On October 23, 1958, upon
learning of their separation from service, petitioners wrote the ACCFA
Board of Governors. Petitioners underscored civil service eligibility,
efficiency and permanence of their positions, and requested
reinstatement. On October 28, 1958, petitioner Gustavo E. Espino (and
one Rafael Pedroche) wrote the Commissioner of Civil Service, brought
to his attention their separation, sought clarification and advice. On
October 30, 1958, instead of resolving their problem, the Commissioner
of Civil Service referred the matter to the ACCFA Administrator. On
November 21, 1958, ACCFA’s administrator justified the action taken by
its board, upon the grounds that the abolition was for purposes of
economy; that petitioners’ positions were confidential in nature, and
that their tenure depended upon the appointing power. Follow-up letter
of Espino dated December 12, 1958 merited no reply from the Civil
Service Commissioner.

On December 15, 1958, Espino, on behalf of petitioners, wrote Major
Federico Salcedo of the PCAPE. He complained against their separation
and prayed for presidential intervention. Major Salcedo – on behalf of
the Office of the President of the Philippines – answered that no
action could be taken on their cases “in view of the policy of
retrenchment enunciated by the ACCFA Board of Governors”. ^[11]

In our opinion, petitioners have, in substance, exhausted all
administrative remedies. The Civil Service Commissioner sat on their
petition. That stopped them from appealing to the Civil Service Board.
Besides, the appeal to the Civil Service Board becomes a useless
ceremony. The fact is that the Office of the President had closed the
door thereto – no action could be taken on petitioners’ plight because
of the alleged retrenchment policy.

At any rate, exhaustion of administrative remedies is not a hard and
fast rule. It admits of exceptions. Amongst these are that (1) the
question in dispute is “purely a legal one” and (2) the controverted
act is “patently illegal”. ^[12]
The question involved here is purely one of law. Petitioners’
dismissal, too, was patently illegal. The present case fits into the
foregoing legal precepts. No necessity there was to resort first to
administrative remedies.

5. Respondents now urge upon us the argument that petitioners are in
estoppel. They aver that petitioners accepted their separation pay and
terminal leave benefits. ^[13]
After suit was filed herein, petitioners Sotero M. de Castro and Eldo
J. Cariño collected one-month separation pay; all of them received
terminal leave pay, ^[14] except Johnny F. Ilar.

Acceptance of those benefits would not amount to estoppel. The
reason is plain. Employer and employee, obviously, do not stand on the
same footing. The employer drove the employee to the wall. The latter
must have to get hold of money. Because, out of job, he had to face the
harsh necessities of life. He thus found himself in no position to
resist money proffered. His, then, is a case of adherence, not of
choice. One thing sure, however, is that petitioners did not relent on
their claim. They pressed it. They are deemed not to have waived any of
their rights. ^[15] Renuntiatio non praesumitur.

6. Petitioners seek moral damages in the sum of P15,000 for each of
them. Respondents who composed the ACCFA board were sued in their
official capacities as government officials. They cannot be held
personally liable because, as private individuals – as contradistinguished from their being ACCFA officials – they are not parties to this suit.
Besides as we have observed a few years back, moral damages are
“already included in, if not absorbed by, the back salaries” to which
petitioners are entitled. ^[16] Equitable considerations stop us from breaking away from this rule. Award for moral damages is not proper.

7. We now come to attorneys’ fees. The award below is for P500.00.
Petitioners ask that this amount be raised to P2,000 for each of the
petitioners. The Civil Code [Article 2208] allows recovery of
attorneys’ fees. It is true that petitioners’ contract with their
counsel is that each of the former should pay the latter P2,000. ^[17] It is quite clear though that ACCFA, a third party, is not to be bound by such arrangement. ^[18]

The fixation of attorneys’ fees rests on the sound discretion of the
court. Here, however, the court below reduced the amount to P500,
apparently because the amount there recovered was insignificant, and
the case on the main was dismissed. Adverting, however, to the efforts
exerted by counsel for petitioners, the questions involved, and the
benefits resulting from the services of counsel, ^[19] we are confident that a total award of P1,000 for all the petitioners is fair and reasonable.

8. Petitioners have been unlawfully dismissed in September, 1958. A
long time – eight years – has since passed. Some of them might have
made adjustments in life. And this, because they were thrown out of
work. What if readjustment by a return to the job becomes impractical,
or should entail difficulty? So it is, that the employees’ right to
backpay and the employer’s obligation to pay them should be balanced in
one equation. We rule that those of petitioners who decide not to
return should be entitled to backpay up to the date the judgment herein
becomes final.

UPON THE PREMISES, the judgment appealed from is hereby modified and, in consequence,

JUDGMENT is hereby rendered –

1. Ordering respondent Agricultural Credit Administration [successor
to respondent Agricultural Credit and Cooperative Financing
Administration] and its Board of Governors [now the National Land
Reform Council] to reinstate the remaining petitioners to their
positions;

2. Ordering said respondent Agricultural Credit Administration to
pay their respective back salaries from September 17, 1958, the date of
their dismissal, to the date they are reinstated, as follows:

Eldo J. Cariño, at P2,940 per annum;
Gustavo E. Espino, at P2,760 per annum;
Arsenio C. Miguel, at P2,940 per annum;
Sotero M. de Castro, at P3,480 per annum; and
Johnny F. Ilar, at P2,407.20 per annum,

less the amounts they received as separation and/or terminal leave
pay: Provided, That in the event any of petitioners should elect not to
be reinstated, his back salary shall be computed up to the time this
judgment becomes final; and

3. Ordering respondent Agricultural Credit Administration to pay petitioners the sum of P1,000 by way of attorneys’ fees.

Costs against Agricultural Credit Administration.

SO ORDERED.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, and Ruiz Castro, JJ., concur.

---

^[1] Petitioner Licerio D.
Espinosa withdrew his petition because he was reinstated by respondents
(R.A., pp. 21, 51). His withdrawal was approved by the lower court on
February 14, 1959 (Record below, p. 25). The remaining
petitioners-appellants therefore are Eldo J. Cariño, Arsenio C. Miguel,
Johnny F. Ilar, Sotero M. de Castro and Gustavo E. Espino.

^[2] Hereinafter referred
to merely as the ACCFA. Pursuant to the resolution of this Court dated
August 18, 1966, the Agricultural Credit Administration, successor to
ACCFA, was substituted in the latter’s place as respondent.

^[3] Case against
respondent Arturo Miranda was definitely dismissed by order of the
lower court dated March 8, 1961. R. A., pp. 48-49.

^[4] R. A., p. 57.

^[5] Civil Case No. 38588, for mandamus; R.A., pp. 56-57.

^[6] Exhibit PP, Folder of Exhibits, p. 64.

^[7] Record on Appeal, p. 55.

^[8] Briones, etc., et al.,
vs. Osmeña, etc., et al., 55 O.G. No. 11, pp. 1920-23; Gacho, et al.,
vs. Osmeña, etc., et al., 55 O.G., No. 48, pp. 10079, 10090; Mangubat
vs. Osmeña, L-12837, April 30, 1959; Gonzales vs. Osmeña, L-15901,
December 30, 1961; Urgelio, et al., vs. Osmeña, et al., L-14908,
October 31, 1963; Abanilla, et al., vs. Ticao, etc., et al., L-22271,
July 26, 1966.

^[9] Emphasis supplied.

^[10] Corpus vs. Cuaderno, et al., L-23721, March 31, 1965.

Our position on this point has been reiterated in Hernandez, etc.,
et al vs. Villegas, et al., L-17287, June 30, 1965 (citing with
approval the Corpus case), as follows: “For our purposes, we do not
need to consider the position involved in this case as primarily
confidential because, even assuming the position to be, it is
nevertheless subject to the Constitutional provision that ‘No officer
or employee in the Civil Service shall be removed or suspended except
for cause. (Phil. Const., Art. XII, sec. 4) Villegas’ removal is,
therefore, concededly without cause.” See also Sections 3 and 5 of the
Civil Service Act of 1959.

^[11] R. A., p. 24; Decision, R.A., p. 54; Exhibit X, Folder of Exhibits, p. 35.

^[12] Gonzales vs. Hechanova, etc., et al., 60 O. G., No. 6, pp. 802, 806, and cases cited.

^[13] Appellees’ brief, p. 11.

^[14] Exhibits 16-22, Folder of Exhibits, pp. 92-98.

^[15] See Philippine Sugar
Institute vs. Court of Industrial Relations, et al., L-13475, September
29, 1960; Urgelio, et al., vs. Osmeña, etc., et al., L-14908, February
28, 1964 (on reconsideration).

^[16] Diaz, et al., vs. Amante, December 26, 1958, 55 O. G., No. 41, pp. 8643, 8646.

^[17] Exhibit NN, R.A., pp. 26-27, Folder of Exhibits, p. 53.

^[18] Corpus vs. Cuaderno, supra.

^[19] Section 12, Canons of Legal Ethics.