VICTOR C. MACALINCAG AND LORINDA M. CARLOS, PETITIONERS, VS. ROBERTO E. CHANG, RESPONDENT.

This is a petition
for review on certiorari which seeks to annul and set aside the decision^[1]
of the Regional Trial Court (RTC) of Makati, Branch 132 dated October 24, 1990
in Civil Case No. 89-5633 entitled “Roberto E. Chang v. Victor C. Macalincag
and Lorinda M. Carlos” which ordered herein petitioners or whoever are acting
in their behalf to permanently desist from enforcing the order of preventive
suspension dated October 6, 1989 against herein private respondent Roberto E.
Chang.

The undisputed facts of the case are as follows:

On October 6, 1989, petitioner Lorinda M. Carlos (Carlos for short)
signed a formal administrative charge approved by petitioner Victor C.
Macalincag (Macalincag for short) for dishonesty, neglect of duty and acts
prejudicial to the best interest of the service, committed as follows:

“1. That during the
45-day election ban period, before the January 18, 1988 local elections, you
disbursed a total amount of P30,000.00 to Ms. Marissa Chan, Head of Department,
in violation of Section 261 (v), (2), Article XXII of the Omnibus Election
Code;

“2. That for the
months of November and December 1987, you disbursed a total amount of P218,500,
allegedly as financial assistance extended by the municipality to 437 bereaved
families;

“3. That you
disbursed the amount of P180,643.55 to cover expenses for merienda of municipal
employees;

“4. That in violation
of Sections 41 and 44 of PD 477 and Section 4(3) of PD 1445, you incurred cash
overdrafts, amounting to P107,493,158.76 in the General Infrastructure and
Trust Funds at the end of the year 1987;

“5. That on December
29, 1987, you transferred the amount of P1,977,492.00 from the
Treasurer/Cashier’s safe to the Realty Tax Division’s safe, thus subjecting
said municipal funds to possible loss; and

“6. That you
continually failed to remit to the Bureau of Treasury the national collection which
as of September 30, 1988 already
amounted to P370,422,093.74.”

(Rollo, Annex “A”, pp. 38-39)

The basis of the formal charge by petitioner Carlos was the
preliminary evaluation of the Commission on Audit (COA) Report dated January
18,1989 and the affidavit-complaints of Councilor Roberto Brillante dated April
27, 1989 and May 23, 1989 (Rollo, Annex “D”, p. 43).

On the same date, October 5, 1989, petitioner Macalincag issued
an Order of Preventive Suspension against Chang, which reads as follows:

“An administrative charge having been filed against you by this
Department on the basis of the COA Audit Report dated January 18, 1989 and the
sworn complaint of Councilor Roberto Brillante dated April 27, 1989 and May 23,
1989, respectively, for dishonesty, neglect of duty and acts prejudicial to the
best interest of service, you are hereby ordered preventively
suspended from Office effective upon receipt
hereof pursuant to Section 41 of Presidential
Decree No. 807.” (Underscoring supplied) (Rollo, Annex
“B”, p. 40)

Also on October 6, 1989, petitioner Macalincag sent a letter to
the “Governor, Metro Manila Commission – Attn: the Officer-in-Charge MMC Finance Office,” seeking the implementation of
the Order of Preventive Suspension dated October 6, 1989 and recommending that
an Officer-in-Charge be immediately designated from the ranks of qualified
Municipal Treasurers and Assistant Municipal Treasurers in Metro Manila (Rollo,
Annex “C”, p. 41).

By virtue of the said letter, the Officer-in?Charge, MMC
Finance Office furnished respondent Chang, by ordinary mail, with a copy of the
Order of Preventive Suspension also dated October 6, 1989 (Rollo, Petition, p.
15).

On November 10, 1989, respondent Chang filed a petition for prohibition with writ
of preliminary injunction before the Regional Trial Court (RTC) of Makati
against petitioners Macalincag and Carlos (Rollo, Annex “D”, pp. 42-46).

In an Order dated November 10, 1989, Executive Judge Santiago
Ranada, Jr. set for hearing on 14, 16, and 20 November 1989 at 9:00 A.M.
respondent’s application for the issuance of a writ of preliminary injunction. In said Order, the court also temporarily restrained Macalincag
and Carlos, or their duly authorized representatives from implementing the
questioned “Order of Preventive Suspension” dated October 6, 1989 for the
preservation of the rights of the parties pending the final determination of
the prayer for a writ of preliminary injunction (Rollo, Annex “E”, p. 48).

After submitting all the necessary pleadings, the court on January
19, 1990 issued an Order denying respondent’s Chang application for a writ of
preliminary injunction, and sustained the power of the Secretary of Finance to
issue the Order of Preventive Suspension dated October 6, 1989 (Rollo, Annex
“K”, pp. 85-92).

A motion for reconsideration dated February 13, 1990 was filed by
respondent Chang. In said motion, Chang
raised a new argument by invoking Section 8 of the recently issued (January 9,
1990) Executive Order No. 392 entitled “Constituting the Metropolitan Manila
Authority, providing for its powers and functions and for other purposes”
(Rollo, Annex “L”, pp. 93-98).

On March 29, 1990, the trial court issued an Order reconsidering
and setting aside its previous Order dated January 19, 1990 thus granting
respondent Chang’s application for a writ of preliminary injunction (Rollo,
Annex “M”, pp. 100-102).

On October 24, 1990, the trial court rendered its decision, the
dispositive portion of which reads:

“WHEREFORE, judgment is hereby rendered ordering herein respondents,
or whoever are acting in their behalf, to permanently desist from enforcing the
Order of Preventive Suspension dated October 6, 1989 against herein petitioner.

No pronouncement as to costs.

SO ORDERED.” (Rollo, Annex “O”, p. 127)

Hence, this petition for review on certiorari.

The Second Division of this Court in its resolution dated
February 11, 1991 denied the petition for having been filed out of time (Rollo,
Resolution, p. 128) but the same was reinstated in a resolution dated April
15,1991. (Rollo, Resolution, p. 141).

In the resolution dated July 10, 1991, the Second Division of
this Court gave due course to the petition and required both parties to file
their simultaneous memoranda (Rollo, Resolution, p.158).

The main issue in this case is whether or not the Secretary of
Finance has jurisdiction to issue an Order of Preventive Suspension against the acting municipal treasurer
of Makati, Metro Manila.

The petition is meritorious.

Petitioners contend that the Order of Preventive Suspension became
effective upon receipt thereof by respondent Chang and not upon the designation
of an officer-in-charge to replace him; that the Order of Preventive Suspension
dated October 6, 1989 became
effective before the issuance of Executive Order No. 392 and, therefore, can no
longer be enjoined by reason of the alleged transfer of the power to suspend
from the Secretary of Finance to the President of the Republic of the
Philippines and that the power to suspend and remove municipal officials is not
an incident of the power to
appoint.

On the other hand, the contention of the private respondent is
that a government officer is not suspended until someone has assumed the post
and the officer subject of the suspension order has ceased performing his
official function; that the implementation of the questioned suspension order
was overtaken by the issuance of Executive Order No. 392 creating the
Metropolitan Manila Authority and that the power to discipline is vested solely
on the person who has the power to appoint.

It is very
apparent from the records that respondent Chang was administratively charged on
October 6, 1989 for dishonesty, neglect of duty and acts prejudicial to the
best interest of the service. It was
signed by Carlos, Executive Director, Bureau of Local Government and approved
by Macalincag, Undersecretary of Finance, then acting Secretary. Simultaneous with the charge, Chang was
preventively suspended which caused him to file a complaint for prohibition
with preliminary injunction in the lower court.

In the questioned decision of the lower court, it was pointed out
that in order that a preventive suspension will be implemented, there are two
steps involved, viz: 1) service of a
copy of said order on the respondent and 2) designation of his replacement. The trial court ruled that until an acting
municipal treasurer is appointed to replace the respondent, the order of
preventive suspension dated October 6, 1989 is incomplete and cannot be said to have taken effect.

This ruling of the trial court is untenable.

Preventive Suspension is governed by Sec. 41 of P.D. 807 or the
Civil Service Law which provides:

“SEC. 41. Preventive
Suspension. – The proper
disciplining authority may preventively suspend any subordinate officer or
employee under his authority pending an investigation, if the charge
against such officer or employee involves
dishonesty, oppression or grave misconduct, or
neglect in the performance
of duty, or if there are reasons
to believe that the respondent is guilty
of charges which would warrant his removal
from the service.” (Underscoring supplied)

It will be noted that under the aforesaid law, designation of the
replacement is not a requirement to give effect to the preventive suspension.

On the contrary, Batas Pambansa Blg. 337, otherwise known as the
Local Government Code, provides in Section 156, Article 5, Chapter 3, Title II
thereof for the automatic assumption of the assistant municipal treasurer or
next in rank officer in case of suspension of the municipal treasurer, to wit:

“SEC. 156. TEMPORARY DISABILITY. – In the event of inability of the treasurer
to discharge the duties of his
office on account of a trip on official business, absence on leave, sickness, suspension,
or other temporary disability, the ‘assistant municipal treasurer
or, his absence, the treasury official
next in rank in the municipality
shall discharge the duties of the office subject to existing laws.”
(Underscoring supplied)

Specifically, it is provided under Section 233(2) of BP 337,
that:

“Until otherwise provided by
law, nothing in this code shall be understood to amend or repeal the pertinent
provisions of PD No. 824 and BP
20, and all presidential decrees and issuances relevant to Metropolitan Manila
and the Sangguniang Pampook of Regions IX and XII.”

Accordingly, there appears to be no question that: the Order of Preventive Suspension of
respondent Chang became effective upon his receipt thereof, which is presumed
when he filed a complaint in the trial court preventing the implementation of
such Order of Suspension. Othewise
stated, the designation of the OFFICER-IN-CHARGE to replace respondent Chang is
immaterial to the effectivity of the latter’s suspension. A contrary view would render nugatory the
very purpose of preventive suspension.

Among others, Chang argued that Executive Order No. 392, which
took effect on January 9, 1990, gave rise
to the creation of the Metropolitan Manila Authority (MMA) and vested in the
President of the Republic of the Philippines the power to appoint municipal
treasurers in Metro Manila. As the
power to suspend and remove a municipal official is an incident of the power to
appoint, he maintained that it
is the President who may suspend or remove him. (Rollo, pp. 155-156).

Relative thereto, Sec. 8 of Executive Order No. 392 provides:

“SEC. 8. All city and
municipal treasurers, municipal assessors and their assistants as well as other
officials whose appointment is currently vested upon the Metropolitan Manila
Commission shall be appointed by the President of the Philippines, upon
recommendation of the Council, subject to the Civil
Service law, rules and regulations.”
(Underscoring supplied).

Earlier, prior to Executive Order No. 392, the power to appoint
the aforesaid public officials was vested in the Provincial Treasurers and
Assessors of the Municipalities concerned, under P.D. No. 477 and later
transferred to the Commissioner of Finance under P.D. No. 921, but under both
decrees, the power of appointment was made subject to Civil Service Laws and
the approval of the Secretary of Finance.

Verily, the intention of the aforesaid legislations to follow the
Civil Service Laws, Rules and Regulations is unmistakable.

Correspondingly, the power to discipline is specifically vested under Sec. 37 of P.D. No. 807 in heads of
departments, agencies and instrumentalities, provinces and chartered cities who have original jurisdiction to investigate and decide on matters
involving disciplinary action. Stated
differently, they are the proper disciplining authority referred to in Sec. 41 of the same law.

The Office of the Municipal Treasurer is unquestionably under the
Department of Finance as provided for in Sec. 3, P.D. No. 477. Hence, the
Secretary of Finance is the proper disciplining authority to issue the
preventive suspension order. More
specifically acting Secretary of Finance, Macalincag, acted within his
jurisdiction in issuing the aforesaid order.

By and large, even assuming that the power to appoint, includes
the power to discipline as argued by Chang, acting Secretary Macalincag as
Secretary of Finance is an alter ego of the President and
therefore, it is within his authority, as an alter ego, to preventively
suspend respondent Chang.

PREMISES CONSIDERED, the petition is GRANTED and the assailed Order dated October 24, 1990 is
NULLIFIED.

SO ORDERED.

Melencio-Herrera, (Chairman), Padilla, Regalado, and Nocon, JJ., concur.

^[1]
Penned by Judge Herminio I. Benito