AGUSTINA G. GAYATAO, PETITIONER, VS. CIVIL SERVICE COMMISSION AND BAYANI I. FERNANDEZ, RESPONDENTS.

This special civil action for certiorari impugns the resolution
promulgated on October 5, 1989 in CSC Case No. 418 of respondent Civil Service
Commission revoking the appointment of petitioner as Customs Operations Chief
of the Export Division at the Ninoy Aquino International Airport and directing
the Commissioner of Customs to appoint private respondent in her stead, as well
as its resolution of April 10, 1990 denying petitioner’s motion for
reconsideration.

Private respondent Bayani I Fernandez was holding the position of
Customs Operations Chief I (COC) in the Bureau of Customs since March 5, 1984
in a permanent capacity.^[1] He
was assigned to the Aircraft Operations Division. On October 15, 1987, per Customs Personnel Order (CPO) No.
C-152-87 issued by Commissioner Salvador M. Mison, he was reassigned as Acting
Chief of the Export Division at the Ninoy Aquino International Airport (NAIA)
Customhouse.^[2]

On February 15, 1988, Commissioner Mison, purportedly acting
pursuant to Executive Order No. 127 implementing the reorganization of the
Department of Finance-Bureau of Customs, appointed petitioner Agustina G.
Gayatao, then a Supervising Customs Trade Examiner, to the position of Customs
Operations Chief at the NAIA Customhouse, effective March 1, 1988.^[3]
Thereafter, in CPO No. B-27-88 dated March 3, 1988, petitioner was designated as COC of the Export
Division at NAIA, while private respondent was designated as Customs Operations
Assistant Chief (COAC) of the Aircraft Operations Division, both designations
being effective March 1, 1988.^[4]

Aggrieved by the actions of said commissioner, private respondent
filed a letter of protest on May
18, 1988 before the Merit System Protection Board of respondent Civil Service
Commission (CSC) questioning the appointment of petitioner as COC and his
demotion to the position of COAC. In
assailing the action of the appointing authority, private respondent alleged in
substance that (1) he was unjustifiably demoted since he had been holding the contested position prior to the
reorganization; and (2) he is more qualified than herein petitioner.^[5]

Commenting thereon in an undated 4th Indorsement, the
Commissioner of Customs alleged that the aforestated appointment of petitioner
is “non-protestable, it having been done pursuant to Executive Order No.
127, x x x.”^[6]

On October 5, 1989, respondent commission promulgated the
challenged resolution mentioned at the start of this opinion, with the
following dispositive portion:

“WHEREFORE, premises considered, the appoint­ment of appellee
Atty. Gayatao as Customs Operations Chief is hereby revoked. Accordingly, the Commissioner, Bureau of
Customs is hereby directed to appoint appellant Fernandez in her stead.”^[7]

On October 30, 1987, petitioner filed a request for
reconsideration of the questioned resolution,^[8] but
the same was denied by the CSC in its resolution dated April 10, 1990.^[9]
Disagreeing with the aforementioned resolutions, petitioner filed the instant
petition for certiorari with prayer for preliminary injunction.

Public respondent CSC filed its comment to the petition on August
27, 1990^[10]
while private respondent Fernandez did likewise on August 23, 1990.^[11]
After some preliminary pleadings and exchanges, on September 25, 1990 the
Solicitor General filed a manifestation in lieu of comment, recommending the
grant of the petition and the annulment of the questioned resolutions of public
respondent.

In our resolution of November 6, 1990,^[12]
we required respondent CSC to comment on the manifestation in lieu of comment
filed by the Solicitor General, which it did on October 15, 1991^[13]
and subsequently amplified on October 18, 1991 with a supplemental comment.^[14]

On November 12, 1991, we resolved to give due course to the
petition, with the parties filing their respective memoranda,^[15]
the last of which was filed by the Solicitor General on February 12, 1992.

The focal issue raised for resolution in this petition is whether
respondent commission committed grave abuse of discretion in revoking the
appointment of petitioner and ordering the appointment of private respondent in
her place.

Petitioner takes the position that public respondent has no
authority to revoke her appointment on the ground that another person is more
qualified, for that would constitute an encroachment on the discretion vested
solely in the appointing authority. In
support of said contention, petitioner
cites the case of Central
Bank of the Philippines, et al. vs. Civil Service Commission, et al.^[16]
where we ruled that under the Civil Service Decree (Presidental Decree No.
807), the authority of the CSC is limited to approving or renewing an
appointment in the light of the requisites of the law governing the civil
service. The CSC has no authority to
revoke an appointment on the ground that another person is more qualified for a
particular position. It will be in
excess of its power if it substitutes its will for that of the appointing
authority. The CSC, not being the
“appointing power” in contemplation of law, cannot direct the
appointment of a substitute of its choice.

We have no quarrel with the validity of the aforesaid doctrines
but we cannot sustain petitioner’s theory and submissions in this case premised
on said doctrinal rules.

The doctrine laid down in the cited case finds no determinant
application in the case at bar. A
reading of the questioned resolution of respondent commission readily shows
that the revocation of the appointment of petitioner was based primarily on its
finding that the said appointment was null and void by reason of the fact that
it resulted in the demotion of private respondent without lawful cause in violation
of the latter’s security of tenure. The
advertence of the CSC to the fact that private respondent is better qualified
than petitioner was merely to lend further support to its stand that the
removal of private respondent was unlawful and tainted with bad faith and that
his reinstatement to his former position is imperative and justified.

We quote the pertinent portion of said resolution:

“After – a careful perusal of the
records of the case, the Commission finds the appeal meritorious. Records will show that prior to the
reorganization, appellant was already holding the position of Customs
Operations Chief I since March 1984. His reappointment to the position of Customs Operation Assistant Chief
is therefore a clear demotion of rank and position. The Commission finds no sufficient justifiable reason for this
demotion. The appointing authority
cannot entirely disregard the rule on equity of the incumbent and justify demotion
in the guise of reorganization, if such demotion will amount to a penalty
without justifiable ground or will result in deprivation of due process on the
part of the employee concerned. Although the appointing authority is afforded wide latitude in the
selection and appointment of employee(s), such exercise is however not absolute. The Supreme Court in the case of GSIS vs.
Ayroso (96 SCRA 213), ruled:

‘While it has been held that the right to select and appoint
employees is the prerogative of the employer, this may be availed of without
liability, provided this is exercised, in the words of Justice Juvenal K.
Guerrero, in good faith for the advancement of the employer’s interest, and not
for the purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements, and provided further that such
prerogative(s) are not exercised in a malicious, harsh, oppressive, vindictive
or wanton manner, or out of malice or spite.’

“Finally, records will further show that appellant is more
qualified than appellee because aside from being the incumbent Customs
Operations Chief prior to the reorganization, he was an Assistant Customs
Operations Chief since 1977. His
experience in the area of Customs Operations are more than sufficient to
qualify him for reappointment to the contested position.”^[17]

Clearly, therefore, in the said resolution the CSC is not
actually directing the appointment of private respondent but simply ordering
his reinstatement to the contested position being the first appointee
thereto. Further, private respondent was already holding said position
when he was unlawfully demoted. The
CSC, after finding that the demotion was patently illegal, is merely restoring
private respondent to his former position, just as it must restore other
employees similarly affected to their positions before the reorganization.^[18]

It is within the power of public respondent to order the
reinstatement of government employees who have been unlaw­fully dismissed. The CSC, as the central personnel agency,
has the obligation to implement and safeguard the constitu­tional provisions on
security of tenure and due process. In
the present case, the issuance by the CSC of the questioned resolutions, for
the reasons clearly explained therein, is undubitably in the performance of its
constitutional task of protecting and strengthening the civil service.

In the recent case of Aquino vs. Civil Service Commission, et
al.,^[19]
wherein similar issues were raised, it was ruled that:

“We have consistently applied the above doctrine in many cases
with similar factual circumstances, but We see no compelling reason to apply the same in the instant
case. In the cases cited above, We
ruled that the CSC has no authority to revoke an appointment simply because it
(CSC) believed that another person is better qualified than the appointee for it
would constitute an encroachment on the discretion solely vested on the
appointing authority. The situation is
different, as in the instant case, where the CSC revoked the appointment of the
successful protestant, petitioner herein, principally because the right to
security of tenure of the prior appointee, private respondent herein, to the
contested position had already attached. It must be noted that public respondent CSC did not direct the
appointment of a substitute of its choice. It merely restored the appointment of private respondent who was first appointed to the contested
position.”

We find no reason to disturb the findings and conclusions of the
CSC that respondent Bayani I. Fernandez was illegally demoted. As earlier noted, private respondent was
holding the position of Customs Operations Chief in a permanent capacity since
1984. His non-reappointment to that
position amounts to a removal without cause from an office which has not been
abolished nor reorganized.

As we stressed in Dario vs. Mison, et al.,
and its companion cases,^[20]
removal from office as a result of reorganization must pass the test of good
faith. Upon the effectivity of the 1987
Constitution, any reorganization undertaken by the Government must be guided
and circumscribed by the safeguards and provisions of the said Constitution and
the statutes governing reorganization.^[21]

In the instant case, the guidelines and standards provided in
those laws were not observed. The
position of private respondent as COC of the Export Division was not abolished
with the reorganization of the Bureau of Customs. What happened was that another person, herein petitioner who is
lower in rank, was appointed in his stead. Such fact is a clear indication of bad faith which would entitle herein
private respondent to reinstatement pursuant to Section 9 of Republic Act No.
6656.^[22]

As a civil service employee with a permanent appointment, private
respondent cannot be removed, suspended or demoted except for cause provided by
law. Private respondent’s appointment
to the lower position of COAC is a clear demotion in rank without a valid cause
and without being heard thereon. A
demotion in office by assigning an employee to a lower position in the same
service is tantamount to removal, if no cause is shown for it, more so, if it
is not part of any disciplinary action.^[23] The
observance of the rules on bona fide abolition of public
office is essential before terminations and/or demotions from employment in the
government service can be made.^[24]

The argument of petitioner that the questioned resolution of
respondent CSC will have the effect of her dismissal without cause from
government service, since she is already an appointee to the position which
private respondent claims, is devoid of legal support and logical basis.

In the first place, petitioner cannot claim any right to the
contested position. No vacancy having
legally been created by the illegal dismissal, no appointment may be validly
made to that position and the new appointee has no right whatsoever to that
office. She should be returned to where
she came from or be given another equivalent item.^[25]
No person, no matter how qualified and eligible for a certain position, may be
appointed to an office which is not yet vacant. The incumbent must have been lawfully removed or his appointment
validly terminated,^[26]
since an appointment to an office which is not vacant is null and void ab
initio.^[27]

The present Constitution does not provide for automatic
vacancies; removals “not for cause” contemplated in Section 16,
Article XVIII thereof must be those resulting from reorganization and which, to
repeat, must pass the test of good faith.^[28]

We reiterate what we said in the above-cited case of Floreza:

“We apply the ruling in Dario vs. Mison and Section 2 of
Republic Act 6656 to this position. We
hold that Floreza was deprived of his right to security of tenure by his
non-appointment to the position of Revenue Service Chief or its new title under
the reorganized Bureau of Internal Revenue. It should be remembered that after February 2, 1987, any reorganization
undertaken by the govern­ment is circumscribed by the provisions and safeguards
of the New Constitution. Hence, when
Floreza was not reappointed as Revenue Service Chief or as Assistant
Commissioner either in the Legal Service or in the Planning and Research
Service, and other persons were reappointed to the positions, he was, in effect
dismissed from the service in violation not only of his right to security of tenure
but to due process as well.”

x x x

“Section 2 of Republic Act No. 6656 entitles a victim of
removal in violation of the bona fide rule to a reinstatement or
reappointment to the position from which he was removed. The fact that there is now an appointee to
the position he claims, holding an appointment signed by the President, is of
no moment. There was no vacancy in the
office to which Jaime M. Masa was appointed and, therefore, his promotion was
not valid.”

The argument of the Solicitor General that private respondent’s
assignment as COC of the Export Division at NAIA was only in an acting capacity
is unavailing. While it is true that an
acting appointment is merely temporary and revocable at the pleasure of the
appointing power,^[29] this
temporary appointment cannot be used by the appointing authority as an argument or justification in order to evade or avoid the security of
tenure principle in the Constitution and the Civil Service Law.^[30]

Although it is true that the appointment of private respondent
Fernandez as COC is without any particular or fixed station and, generally he
may be assigned anywhere as the exigencies of the service may require,^[31]
nonetheless his reassignment as Acting Chief of the Export Division at NAIA
does not make his appointment as Customs Operation Chief I temporary and
revocable at the pleasure of the appointing power. He cannot be arbitrarily removed from a particular division
without reassigning him to another division nor can he be appointed to a lower
position without cause and without notice and hearing. The appointing power cannot use the device
of an ambiguous designation to go around the security of tenure of a permanent
employee.^[32]

On the foregoing considerations, private respondent must be
restored to his former position as Chief of the Export Division at NAIA without
prejudice to the power of the Commissioner of Customs to reassign him to any
other division as the exigencies of the service may require, provided this is
done in good faith for the best interests of the service or for valid cause.

It is also worthy of note that the order for the reinstatement of
private respondent is in consonance with our ruling in Dario vs. Mison, ante,
that there was lack of good faith in the reorganization of the Bureau of
Customs. Apropos to the present
case is this trenchant observation therein: “There is no showing that legitimate structural changes have been
made – or a reorganization actually undertaken,
for that matter – at the Bureau since Commissioner Mison assumed office, which
would have validly prompted him to hire and fire employees. There can therefore be no actual
reorganization to speak of, in the sense, say, of reduction of personnel,
consolidation of offices, or abolition thereof by reason of economy or
redundancy of func­tions, but a revamp of personnel pure and simple.”^[33]

WHEREFORE, the petition at bar is DISMISSED and
the questioned resolutions of respondent Civil Service Commission are hereby
AFFIRMED.

SO ORDERED.

Narvasa, C.J., Gutierrez, Jr., Cruz, Paras, Padilla, Bidin,
Griño-Aquino, Medialdea, Davide, Jr., Romero, and
Bellosillo, JJ., concur.

Feliciano, J., in the result.

Nocon, J., on leave.

^[1]
Rollo, 84.

^[2]
Ibid., 47.

^[3]
Ibid., 13.

^[4]
Ibid., 41.

^[5]
Ibid., 25-26.

^[6]
Ibid., 27.

^[7]
Ibid., 16.

^[8]
Ibid., 17-20.

^[9]
Ibid., 23-24.

^[10]
Ibid., 72-81.

^[11]
Ibid., 82-83.

^[12]
Ibid., 107.

^[13]
Ibid., 113-121.

^[14]
Ibid., 129-143.

^[15]
Ibid., 145.

^[16]
171 SCRA 744 (1989).

^[17]
Rollo, 15-16.

^[18]
In its Supplemental Comment, respondent CSC calls attention to this supervening
fact:

“In an En Banc Resolution
dated February 26, 1991 in Dario vs. Mison and six (6) accompanying
cases x x x, the Honorable Court, in upholding the Resolutions of the Civil
Service Commission nullifying the reorganization effected by Customs
Commissioner Mison and directing the reappointment of the Bureau of Customs
personnel therein involved, ordered the restoration of illegally dismissed or
separated employees in the Bureau of Customs to their former positions or their
equivalent. Of particular significance
to the herein Petition is the pertinent portion of the said Resolution which
reads:

7. In the case of Abelardo Sunico,
Commissioner Mison should be ordered:

x x x

7.2. To order Bayani
I. Fernandez, to vacate the post of Customs Operations Assistant Chief,
Collection District No. III, NAIA Customs Aircraft Operation Division (Item No.
729-10) which is the proper post of Sunico;” (Rollo, 136-137).

^[19]
G.R. No. 92403, April 22, 1992.

^[20]
176 SCRA 84 (1989).

^[21]
Sec. 2 (3), Article IX-B of the 1987 Constitution provides that “(n)o
officer or employee of the civil
service shall be removed or suspended except for cause provided by law.”

Sec. 3 of Executive Order No. 17,
dated May 28, 1986 enumerates the grounds for the separation/replacement of
personnel, to wit:

“1. Existence of a case for summary
dis­missal pursuant to Section 40 of the Civil Service Law;

“2. Existence of a probable cause for violation of the Anti-Graft and
Corrupt Practices Act as determined by the Ministry Head concerned;

“3. Gross incompetence or
inefficiency in the discharge of functions;

“4. Misuse of public office for
partisan political purposes;

“5. Any other analogous ground
showing that the incumbent is unfit to remain in the service or his
separation/replacement is in the interest of the service.”

Republic Act No. 6656 sets clear-cut
policies and guidelines on government reorganization to protect the security of
tenure of civil service employees and officers. Sec. 2 thereof provides:

“Sec. 2. No officer or
employee in the career service shall be removed except for a valid cause and
after due notice and hearing. A valid
cause for removal exists when, pursuant to a bona fide
reorganization, a position has been abolished or rendered redundant or there is
a need to merge, divide, or consolidate positions in order to meet the
exigencies of the service, or other lawful causes allowed by the Civil Service
Law. The existence of any or some of
the following circumstances may be considered as evidence of bad faith in the
removals made as a result of reorga­nization, giving rise to a claim for
reinstatement or reappointment by an aggrieved party:

(a) When there is a significant
increase in the number of positions in the new staffing pattern of the
department or agency concerned;

(b) Where an office is abolished
and another performing substantially the same functions is created;

(c) Where incumbents are replaced
by those less qualified in terms of status of appointment, performance and
merit;

(d) Where there is a
reclassification of offices in the department or agency concerned and the
reclassified offices perform substantially the same functions as the original
offices;

(e) Where the removal violates the
order of separation provided in Section 3 hereof.”

^[22]
“Section 9. All officers and employees who are found by the Civil Service
Commission to have been separated in violation of the provisions of this Act,
shall be ordered reinstated or reappointed as the case may be without loss of
seniority and shall be entitled to full pay for the period of separation.”

^[23]
Floreza v. Ongpin, etc., et al., 182 SCRA 692 (1990).

^[24]
Mendoza vs. Quisumbing, etc. and companion cases, 186 SCRA 108 (1990).

^[25]
Floreza vs. Ongpin, et al., G.R. No. 81356 and Floreza vs. Civil
Service Commission, G.R. No. 86156, En Banc Resolution, Sept. 6, 1990.

^[26]
Costin, et al. vs. Quimbo, etc., et al., 120 SCRA 159 (1983); Saet vs.
Alvarez, G.R. No. 82862, Minute Resolution, Third Division, Sept. 26, 1988.

^[27]
Morata vs. Court of Appeals,
11 SCRA 42 (1964).

^[28]
Dario vs. Mison, supra.

^[29]
Castro vs. Solidum, 97 Phil. 278 (1955); Valencia vs. Peralta,
Jr., 8 SCRA 692 (1963); Valer vs. Briones, 9 SCRA 596 (1963).

^[30]
Marohombsar vs.
Alonto, 194 SCRA 692 (1963).

^[31]
Tecson vs. Salas, et al., 34 SCRA 275 (1970); Quisumbing, etc., et al. vs.
Gumban, etc., et al., 193 SCRA 520 (1991).

^[32]
Piñero, et al. vs. Hechanova, etc., et al., 18 SCRA 417 (1966).

^[33]
Fn. 20, at 129.