JOSE LUSTERIO, PETITIONER, VS. INTERMEDIATE APPELLATE COURT, HON. BENIGNO M. PUNO, AND SERAFIN PALOMAR, RESPONDENTS.

Petitioner seeks to set aside the decision^[1]
of the then Intermediate Appellate Court in A.C.-G.R. SP No. 07523,^[2]
promulgated on 31 March 1986, which affirmed the decision of the Regional Trial Court at Lucena City in Civil Case No. 8471^[3]
of 12 November 1984, the dispositive portion of which
reads as follows:

“WHEREFORE, premised on the foregoing, judgment is hereby rendered:

a)   declaring the appointment of plaintiff Serafin Palomar dated April 11, 1977 as Supply Officer III in the Division of Quezon, valid, effective and in accordance with law;

b)   declaring the decision dated May 8, 1977 of
the Hon. Jacobo C. Clave null and void and
ineffective being contrary to law;

c)   declaring the appointment as Supply Officer III in the Division
of Quezon of defendant Jose Lusterio
dated May 22, 1979 as null and void and without effect, the appeal having been decided in favor of Jose Lusterio with grave abuse of discretion tantamount to lack
of jurisdiction.

All other claims and counterclaims are dismissed for want of
evidence.

Without pronouncement as to
costs.”^[4]

The material operative facts in this case are summarized in the
decision of the trial court which respondent Court adopts in its challenged
decision, to wit:

“1.  The Office of Supply Officer III (Division of
Quezon) was rendered vacant on April 7, 1977 when Epifanio
Pareño the incumbent, retired (Exhibit “1-B”);

 2.  
After said office was rendered
vacant, the plaintiff Serafin Palomar hereinafter
referred to as PALOMAR was appointed to the position of Supply Officer III by
Mr. Lorenzo G. Caesar, Director of the Ministry of Education and Culture (MEC),
Region IV, on recommendation by the then Division Superinrentendent
(sic) of Schools, Saturnino Magturo,
which appointment (Exh. “A”; Exh.
“1”) was issued on December 5, 1977
but made effective April 11, 1977
and which appointment was ‘permanent’ but qualified by the condition
typewritten on its fact (Exh. “1-A”) that it is
‘subject to the final outcome’ of the protest filed by Jose Lusterio
(Exh. “A” and “1”);

3.   Apparently, this condition was prompted by a
protest (Exh. “2”) filed by defendant Jose Lusterio, hereinafter referred to as LUSTERIO, with the
Ministry of Education and Culture on April
12, 1977 and received by that office on April 18, 1977;

4.   PALOMAR assumed office on April 11, 1977 (Exh.
“1-C”) at a time when Mr. Parreño (sic), the retiree was still on terminal leave,
which leave extended from May 16, 1977 to June 15, 1978 (Exh.
“1-B”);

5.   That the Ministry of Education and Culture
denied LUSTERIO’S protest on September 19, 1977 on the ground of lack of merit,
the dispositive portion being of the following tenor:

‘Premises considered and inasmuch as Mr. Palomar meets all the
requirements for appointment as Supply Officer III i.e., next in rank,
competence and qualifications and appropriate civil service eligibility, this
office finds the protest of Mr. Lusterio without
merit and holds that the enclosed appointment of the former be not disturbed.’

the said resolution (Exh.
“B”) being signed by Narciso Albarracin,
Acting Secretary of the Ministry of Education and Culture (Exh.
“B-1”);

6.   On November
2, 1977, the decision (Exh. “B”) dated September 19, 1977 was received
by LUSTERIO who filed a motion for reconsideration (Exh.
“3”) dated December 9, 1977
with the Ministry of Education and Culture which motion for reconsideration was
also denied;

7.     On December
10, 1977, LUSTERIO filed an appeal (Exh.
“4”) from the decision of the Ministry of Education and Culture to the Office
of the President, received by the latter office on December 12, 1977 (Exh.
“4-A”);

8.     On January
3, 1978 the appeal of LUSTERIO was endorsed for comment to the
CIVIL SERVICE COMMISSION (Exh. “3”);

9.     On January
16, 1978, the Civil Service Commission referred the appeal for
comment and recommendation to the Secretary of Education and Culture (Exh. “6”);

10.   On February
3, 1978, the Ministry of Education and Culture reiterated its
decision dated September 19, 1977;

11.   On September
3, 1978 the Civil Service Commission thru the Merit System Board in
Resolution No. 6 dated September 5,
1978 (Exh. “7”) recommended the
rescission of the appointment issued in favor of PALOMAR appointing (sic) him
to be not a qualified next in rank employee and recommended further the
appointment of LUSTERIO who according to its
findings occupies a functionally related position and qualified thereto as next
in rank (Exh. “7-A”);

12.   By virtue of the recommendation of the Merit
System Board contained in Resolution No. 6, the Office of the President
rendered a decision (Exh. “D” and Exh. “5”) on the
appeal of LUSTERIO in a decision dated May 8, 1979 which decision in its dispositive
portion says:

‘WHEREFORE, the instant appeal is hereby given due course and as
recommended by the Merit System Board of the Civil Service Commission, the
appointment of Serafin Palomar as Supply Officer III,
Division of Quezon, is hereby rescinded in favor of
Jose Lusterio, (Exh.
“8-A”);’

13.   On May
8, 1979, a memorandum (Exh. “9”) was sent
by Atty. Melquiades T. Dela
Cruz, Presidential Staff Director, Malacañang Records Office, to the Honorable Chairman,
Civil Service Commission regarding the decision in O.P. Case No. 0959 dated May
8, 1979 for his information and guidance: 
also on May 8, 1979, the Civil Service Commission in its First indorsement (Exh. “10”) forwarded
to the Honorable Minister of Education and Culture for his information and/or
appropriate action the decision dated May 8, 1979, of the
Office of the President;

14.   On May
12, 1979 the plaintiff PALOMAR submitted a petition for
reconsideration of the decision dated May
8, 1979 (Exh. “D-A”) with the Legal
Affairs Office of the Office of the President of the Republic of the Philippines
(Exh. “D-4”) furnishing copies thereof to the
Provincial Superintendent of Schools on May
16, 1979 (Exh. “D-1”) to the Region IV of
the Ministry of Education and Culture, Manila,
by personal delivery as shown by the stamp marks ‘Received’ (Exh. “D-3”) on the file copy of
the petition for reconsideration;

15.   On May
9, 1978 (sic) in a second indorsement (Exh. “11”) by one Atty. Lucio
Fernandez, the Ministry of Education and Culture referred to the Regional
Director, Region IV the Decision of the Office of the President dated May 8,
1979 for immediate compliance (Exh. “11-A”);

16.   On May
11, 1979, in a third indorsement
(Exh.”12”) Asst. Regional Director Saturnino Magturo, who was also
concurrent Officer-in-Charge referred the aforesaid second indorsement
to the Division School Superintendent of Quezon at Lucena City for immediate compliance stating therein that
the appointment of LUSTERIO as Supply Officer III effective upon assumption of
duty vice PALOMAR be submitted to his office
for appropriate action;

17.   On May
22, 1979 the Division Superintendent of Schools, Mrs. Lourdes Veluz referred the appointment (Exh.
“14”; Exh. “E”) of LUSTERIO as Division Supply
Officer III vice PALOMAR whose appointment was rescinded in favor of LUSTERIO
by virtue of the decision dated May 8, 1979 of the Office of the President under O.P. Case No. 0959, to the
Assistant Director, Officer-in-Charge, Ministry of Education And Culture,
Region V (Exh. “13”) and “13-A”);

18.   The said appointment (Exh.
“E”, “14”) was received by the Civil Service Commission on May 28 (Exh. “14-A”) and approved as ‘permanent’ subject to no
condition (Exh. “14-B”); on June 11, 1979 this
appointment was received by the Regional Office
of the Ministry of Education and Culture (Exh.
“14-C”);

19.   On June
7, 1979 defendant LUSTERIO assumed office as Division Supply Officer III (Exh. “14-D”);

20.   On June
26, 1979 the motion for reconsideration by plaintiff PALOMAR (Exh. “D”) was dismissed for lack of merit by the Office of
the President (Exh. “F”, “15”), the pertinent portions of which say:

‘After a careful and thorough restudy of the records, this Office
finds no cogent reason to depart from the decision sought to be reconsidered. 
In fine, the instant motion raises the same arguments which have been
considered and resolved in the subject decision.

PREMISES CONSIDERED, the instant motion is hereby dismissed for
lack of merit.  Accordingly, the decision
of this Office dated May 8, 1979,
is as it is hereby reiterated.’

21.   On August, 1979, this action was initiated.”^[5]

In deciding in favor of private respondent, the trial court ruled
that (a) pursuant to Section 19(3) of P.D. No. 807 (The Civil Service Decree)
and the Rules on Personnel Actions and Policies promulgated by the Civil
Service Commission on 20 November 1975 on next-in-rank positions, the position
of Supervisory Fiscal Clerk previously occupied by private respondent, is
immediately next to the contested position in the organizational chart of the
Division of Quezon for the Administrative Staff.  Upon the other hand, petitioner, prior to his
appointment to the contested position, was Supply Officer I in Lucban National High School in Lucban,
Quezon; consequently, he does not belong to the
organizational unit where the vacancy exists.  Circular No. 5, Series of 1963 of the
then Ministry of Education, Culture and Sports provides that “for reasons of
equity and morale, fully qualified employees within the organizational unit,
all circumstances being equal, should have first call upon promotional opportunities.” (b) Moreover, Palomar is a college graduate with a degree of Bachelor of Science in Commerce with
three units in Master of Arts; he has participated and completed in-service
training courses along supply and property management; held the positions of
Clerk-Helper, Clerk-Typist, Clerk I, Fiscal Clerk III and Supervising Fiscal
Clerk; performed the duties of a Supply Officer III since his appointment in
April 1977 until October 1979 with a latest performance rating of very satisfactory;
and a first grade civil service eligibility. 
He thus meets all the requirements for appointment to the contested
position.  (c) Finally, the appointment
of petitioner, made pursuant to the decision of then Presidential Executive
Assistant, Hon. Jacobo Clave, as recommended by the
Civil Service Commission, is not in accordance with law, for as noted, the
Chairman of the Commission at the time of the recommendation was Honorable
Clave himself.  Pursuant then to Anzaldo vs. Clave, G.R. No. 54597, 119
SCRA 353, Palomar was denied due process.

Unable to accept that decision, petitioner herein appealed to the
then Intermediate Appellate Court.  The
appeal was docketed as A.C.-G.R. SP No. 07523. 
He asks
said Court to overturn the decision of the trial court because it erred
in (a) declaring valid, effective, and in accordance with law the appointment
of private respondent as Supply Officer III; (b) in declaring the decision of then
Presidential Executive Assistant Clave as null and void, ineffective and
contrary to law; (c) in not declaring his (petitioner’s) appointment as Supply
Officer III valid, effective, and in accordance with law; and (d) in giving due
course to private respondent’s petitions.^[6]

In the challenged decision, the Intermediate Court rules that the
appeal has no
merit and sustains the findings and conclusion of the trial court that private
respondent has a better right to the contested position than petitioner because
the latter, unlike the former, does not belong to the organizational unit where the vacancy exists.  It further holds that private respondent
possesses the requisite educational competence and civil service eligibility, has completed in-service training courses on
supply and property management and had performed the duties of Supply Officer
III from April 1977 up to October 1979.  Finally, it concurs with the lower court’s
observation that petitioner’s appointment, pursuant to the decision of
Presidential Executive Assistant Clave and the Commissioner of the Civil
Service, was not in accordance with law.

Petitioner now urges Us to set aside the above decision of the
Intermediate Appellate Court on the following grounds and reasons:

1.  Petitioner is more
qualified and entitled to the contested position than private respondent.  The minimum requirements for the contested
position are:

Education  –  Bachelor’s Degree with Training in advance
course Supply Management.

Experience – 2 years
experience in various fields of Supply Management.

Eligibility  –     Supply Officer, first grade, career service
(professional) Supervisor.

Private respondent, at the time of his appointment, did not have
the required experience; he “simply and clearly does not possess any direct
experience in the field of Supply Management to qualify to the position of
Supply Officer III.  x x x private respondent could only claim that he
has attended and completed in-service training courses in Supply and
Property Management;” the two years experience he is claiming is the exposure
he obtained when he occupied the contested position.

Moreover, in determining the occupational group where the vacancy
occurs, the entire division of Quezon, and not the
division office alone, should be taken
into account.  Hence, petitioner, being a
Supply Officer I at the Lucban
National High School
in the division of Quezon, should necessarily be
considered.

2. The recommendation of the Civil Service Commission which was
sustained by the Office of the President through Presidential Executive
Assistant Jacobo Clave was not that of the Civil
Service Commission but of the Merit Systems Board, an independent body within
the Civil Service Commission; thus the rule in Anzaldo
vs. Clave, 119 SCRA 353, is not applicable.

In Our resolution of 5
September 1986, We required respondents to comment on the instant
petition.^[7]

On 21 October 1986,
petitioner filed a Supplemental Petition which, basically, amplifies the above
grounds.

On 23 October 1986,
private respondent filed his Comment.^[8]
We required petitioner to reply thereto, which he complied with on 21 August 1987.

On 28 October 1987,
We gave due course to the petition and required the parties to submit
simultaneously their respective memoranda, which they subsequently complied
with.

Stripped of non-essential matters, the errors raised in this case
primarily revolve upon a determination as to whether or not petitioner and
private respondent meet the minimum requirements for the position of Supply Officer III.  If they do, then neither the Merit Systems
Board, the Civil Service Commission, or the Office of the President, nor the
courts below or this Court, can substitute the judgment of the appointing
authority in appointing private respondent to said position.

The well-entrenched doctrine in this jurisdiction, constantly
strengthened and invigorated by pronouncements of this Court, is that the power
of appointment is essentially discretionary, being vested by law in the head of
office concerned.^[9]

As We strongly emphasized in the Lapinid
case:

“We declare once again, and let us hope for the last time, that the
Civil Service Commission has no power of appointment except over its own
personnel.  Neither does it have the
authority to review the appointments made by
other offices except only to ascertain if the appointee possesses the required
qualifications.  The determination of who
among the aspirants with the minimum statutory qualifications should be preferred belongs to the appointing authority
and not the Civil Service Commission.  It
cannot disallow an appointment because it believes another person is better
qualified and much less can it direct the appointment of its own choice.

“Appointment is a highly discretionary act that even this Court
cannot compel.  While the act of
appointment may in proper cases be the subject of mandamus, the
selection itself of the appointee – taking into account the totality of his
qualifications, including those abstract qualities that define his personality
– is the prerogative of the appointing
authority.  This is a matter addressed
only to the discretion of the appointing authority.  It is a political question that the Civil
Service Commission has no power to review under the Constitution and the
applicable laws.”

As We amplified further in the AbiIa
case:

“The choice of an appointee from among those who possess the
required qualifications is a political and administrative decision calling for considerations of wisdom,
convenience, utility and the interests of service which can best be made by the
head of the office concerned, the person most familiar with the organizational
structure and environmental circumstances within which the appointee must
function.”

As above stated, petitioner maintains that private respondent has
not met the experience requirement for the position and points out that
this requirement is:

“2. Experience – 2 years experience in various fields of Supply
Management.”^[10]

In petitioner’s Annex “D”,^[11]
this requirement is expanded as follows:

x x x; b) Experience requirement:  – 2 years experience in the various fields of
supply activities, including
the determination of the fiscal requirements of supplies
and materials, accounting and making inventories thereof, 1 year
of which must have been in reviewing the work of lower-level supply officers; x x
x.” (underscoring
supplied for emphasis).

It must be stressed that, pursuant to Section 20 of the Civil
Service Decree, the establishment, administration and maintenance of
qualification standards are the responsibility of the department or agency,
subject of course to the approval of the Civil Service Commission and Position
Classification Office.

Private respondent was a Supervising Fiscal Clerk
before his appointment to the contested position.  His functions then covered an aspect of
supply activities, i.e., the fiscal requirements of supplies and materials for
the division office.  Moreover, he had
completed in-service courses in supply and property management.  As
correctly ruled by the Secretary of Education and Culture, per Annex “D”, and
held by the trial court and the respondent Intermediate Appellate Court,
private respondent meets all the requirements for the position of Supply Officer III.

Even if We grant for the sake of argument that petitioner is also
qualified, the appointing authority had the discretion to determine who of
those qualified should be appointed to the contested position.  Per the settled doctrine adverted to above,
the Merit Systems Board, the Civil Service Commission and the Office of the
President, through Presidential Executive Assistant Jacobo
Clave, committed an error, amounting to grave abuse of discretion, when they
rescinded the appointment of the private respondent and directed the appointing
authority to appoint the petitioner. 
More specifically, the only act these bodies were authorized to do, if
they were convinced otherwise, was to disapprove the appointment of private
respondent.  They cannot have gone any
further to encroach on the discretion of the appointing authority to appoint
another who is qualified.  This is
practically analogous to a situation where two or more aspirants are qualified
to a vacant position and the Commission finds them to be so.  In such a case, as We held in Luego vs. Civil Service Commission,
et al.,^[12]

“That recognition alone rendered it functus
officio in the case and prevented it from acting further thereon except
to affirm the validity of the petitioner’s appointment.  To be sure, it had no authority to revoke the
said appointment simply because it believed that private respondent was better
qualified for that could have constituted an encroachment on the discretion
vested solely in the city mayor.”

This renders unnecessary a discussion on the issue of
infringement of due process when Honorable Jacobo
Clave, in his capacity as Presidential Executive Assistant, affirmed the recommendation
of the Civil Service Commission.  It may,
however, be stated that Anzaldo vs. Clave,
supra., is still good law, and the postulation of petitioner that it is
not applicable in this case because what Mr. Clave acted upon was a resolution of the Merit Systems Board of the Civil
Service Commission and not of the
latter is a tenuous attempt to split hairs. 
Mr. Clave himself openly admits
in his decision that the appeal which petitioner made to the Office of the
President was:

“As a matter of course, x x x referred to the Civil
Service Commission for its comment x x x.

The Civil Service Commission through its newly created Merit
Systems Board (Board) issued Resolution No. 6 dated September 5, 1978 recommending rescission of protestee’s appointment,
and in lieu thereof, the appointment of protestant.”^[13]

thereby unequivocally indicating that the
Commission concurred with the recommendation of the Board.

We agree, however, with the petitioner that it was an error for
both courts below to restrictively limit the concept of next-in-rank to the
organizational unit where the vacancy occurs, which is, in this case, the division office of Quezon
and more specifically, to the Administrative Staff therein.  Section 3 of rule V on Promotions of the
Civil Service Rules on Personnel Actions and Policies provides:

“SECTION 3. A next-in-rank
position refers to a position which, by reason of the hierarchical arrangement
of positions in the Department or agency or in the government, is determined to
be in the nearest degree of relationship to a higher position taking into account the following:  (1) organization structure/s as reflected in
the approved organizational chart/s; (2) classification and/or functional
relationships; (3) salary and/or range allocation; and (4) geographical
location.”

Evidently, the organizational unit is not the sole
criterion.  And even if We have to
further concede that petitioner then
occupied a next-in-rank position, that fact alone did not make it mandatory for
the appointing power to appoint him to the contested position.

Section 19(3) of Presidential Decree No. 807 (Civil Service
Decree) merely provides that when a vacancy
occurs in a position in the second level of the Career Service, the employee in
the government service who occupies the next lower positions in the
occupational group under which the vacant position is classified and in other
functionally related occupational groups and who are competent, qualified and
with the appropriate civil service eligibility, “shall be considered for promotion.”
It does not say “shall be promoted.” In Medenilla
vs. Civil Service Commission,^[14]
We held that this section simply means that the next-in-rank shall be among the
first to be considered for the vacancy.  We
are of course not unaware of Section 4 of Rule V of the aforestated
Civil Service Rules which provides that:

“An employee who holds a next-in-rank position who is competent and
qualified, possesses an appropriate civil service eligibility and meets the other
conditions for promotion shall be promoted to the
higher positions when it becomes vacant.” (emphasis supplied).

But in the Abila case,
supra., We ruled that said Section 4 was promulgated by the Commission
beyond its statutory authority since the Civil Service Decree itself (Section
19(3)) merely provides that they “shall be considered for promotion.” Moreover,
the former has been superseded by Section 2 of Rule 3 of Resolution No. 89-779
of the Civil Service Commission, which reads:

“SECTION 2. Positions in the Second Level.
– When a vacancy occurs in the second level of the career service as herein
defined, the employees in the department who occupy the next lower positions in
the occupational group under which the vacant position is classified, and in other functionally related occupational
groups, who are competent and qualified and with appropriate civil service
eligibility shall be considered for appointment
to the vacancy.” (Emphasis supplied).

which is clearly consistent with the Commission’s
enabling statute.

The instant petition then is not impressed with merit.

WHEREFORE, judgment is hereby rendered DISMISSING the petition, with costs against
petitioner.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr.,
Feliciano, and Bidin,
JJ., concur.

^[1]
Annex “A” of Petition; per then Associate Justice, now Associate Justice of
this Court, Carolina C. Griño-Aquino, with the
concurrence of Associate Justices Jose P. Racela,
Jr., Fidel P. Purisima and Jorge S. Imperial.

^[2]
Entitled Serafin Palomar, plaintiff-appellee, vs. Jose Lusterio,
et al., defendants-appellants.

^[3]
Annex “B” of Petition; Rollo, 37-45.

^[4]
Rollo, 29-36.

^[5]
Rollo, 59-62.

^[6]
Rollo, 63.

^[7]
Rollo, 68.

^[8]
Id., 78-88.

^[9]
Abila vs. Civil Service Commission, et al.,
G.R. No. 92573 and G.R. No. 92867, 3 June 1991, citing Lapinid
vs. Civil Service Commission, et al., G.R. No. 96298, 14 May 1991; Lopez
vs. Civil Service Commission, G.R. No. 92140, 19 Feb. 1991; Martin vs.
Civil Service Commission, et al., G.R. No. 94465, 27 Nov. 1990; Chang vs.
Civil Service Commission, et al., G.R. No. 86791, 26 Nov. 1990; Pamantasan ng Lungsod
ng Maynila vs. IAC,
et al., 140 SCRA 35; Ocampo vs. Subido, 72 SCRA 451; Torres vs. Borja,
56 SCRA 55; Reyes vs. Abeleda, 22 SCRA 830.

^[10]
RoIlo, 10.

^[11]
This is the letter dated 19 September 1977 of then Acting Secretary of
Education and Culture, Hon. Narciso Albarracin, addressed to the Chairman of the Civil Service
Commission reiterating the position of the then Department of Education and
Culture that herein private respondent “meets all the requirements for
appointment as Supply Officer III, i.e., next-in-rank, competence and
qualifications and appropriate civil service eligibility;” Rollo,
49-51.

^[12]
143 SCRA 327 (1986).

^[13]
Annex “C” of Petition; Rollo, 46.

^[14]
G.R. No. 93868, 19 Feb. 1991.  See also Pataqoc
vs. Civil Service Commission, et al., 185
SCRA 411, wherein the Court
explicitly held that the rule on next-in-rank set forth in said Section 19(3)
is not absolute, as aside from stating that
the next-in-rank shall only be considered for promotion, without
mandating a promotion, the same section also provides the appointing power with
several alternatives.