CENTRAL BANK OF THE PHILIPPINES AND ANGELA P. JORDAN, PETITIONERS, VS. CIVIL SERVICE COMMISSION AND BASILIO E. BORJA, RESPONDENTS.

May the Civil Service Commission disapprove an appointment and
require the appointment of another person whom it believes is more qualified
for the position? This is the primordial issue addressed in this petition for certiorari
brought to this Court by the petitioners Dr. Angela O. Jordan* and the Central Bank of the Philippines
under Section 7, Paragraph A, Article IX of the 1987 Constitution.  They are questioning Resolution Nos. 87-156^[1]
and 87-375^[2]
of the Civil Service Commission dated May
26, 1987 and October 16,
1987, respectively.  The
questioned resolutions directed the immediate revocation of the appointment of
Dr. Angela P. Jordan to the position of Assistant Bank Physician of the Central
Bank of the Philippines
and the issuance of an appointment in favor of herein private respondent, Dr. Basilio E. Borja to the said
position.

On October 3, 1984,
the Promotions Board of the Central Bank, with a representative of the Civil
Service Commission in attendance, deliberated on the filling up of the vacant position
of Assistant Bank Physician of the Central Bank of the Philippines
(Salary Grade 22).  It found Dr. Jordan,
who then had the rank of Coordinating Assistant (Salary Grade 20) as the only
next-in-rank employee.  After considering
further the qualifications of Dr. Jordan,
said Board certified her for promotion to the position of Assistant Bank
Physician and submitted the proposal to the Office of the Governor of the
Central Bank.

On the other hand, it appears that as early as July, 1984,
respondent Borja filed an application for the
position of Medical Director in the Central Bank.  His papers were acted upon by the Promotions
Board and he was considered for the position of Physician (Salary Grade 16).  The bank approved the Board’s proposal in a
Resolution dated October 5, 1984.^[3]
On October 9, 1984,
respondent Borja reported for duty.  On October
15, 1984, he was issued his appointment as Physician.

On January 2, 1985,
the promotion of Dr. Jordan
to Assistant Bank Physician was approved by the Senior Deputy Governor of the
Central Bank under Personnel Action No. 001, Series of 1985.^[4]
On January 10, 1985, Dr. Jordan
was designated to act as Assistant Bank Physician.  On January
30, 1985, she was issued an appointment as Assistant Bank Physician
to take effect January 2, 1985.  On February
15, 1985, private respondent contested Dr. Jordan’s
appointment claiming that he was the next-in-rank employee and that he was more
qualified than she.  On May 16, 1985, the
Bank dismissed the protest on the grounds that the protest was filed beyond the
reglementary period; that protestant is not the
next-in-rank employee as regards the contested position and, as such, he has no
legal personality to file the protest; and, that the protestee
aside from being the next-in-rank employee, met the requirements for promotion.

Private respondent appealed to the Merit Systems Board (MSB for
short).  In its decision dated October 28, 1986, the MSB found the
appeal meritorious and ruled that private respondent should have been the one
appointed as Assistant Bank Physician. 
The Bank, through Mr. Sebastian V. Palanca,
Jr., Special Assistant to the Governor, in an undated petition for
reconsideration, prayed that the MSB decision be set aside and that the Bank’s
decision upholding the appointment of Dr. Jordan
be left undisturbed.  On January 28, 1987, the MSB set aside
its decision of October 28, 1986
and confirmed the approval of the appointment of Dr. Jordan
to the contested position.

On March 5, 1987, private respondent appealed to the Civil
Service Commission on the grounds that he was denied due process of law
inasmuch as he was not furnished a copy of the motion for reconsideration filed
by the Bank, and that the decision of the MSB dated January 28, 1987 is
contrary to the merit and fitness principles enshrined in the Civil Service Law
and the Constitution.

In the first indorsement dated March 19, 1987, the Commission
forwarded the appeal to the Office of the Governor of the Central Bank for his
comment with the request that his comment be transmitted to the Commission
within ten (10) days from receipt. 
Likewise, Dr. Jordan
was furnished a copy of the appeal for her to submit her answer/comment thereon
within ten (10) days from receipt with a warning that her failure to do so
shall be considered a waiver of her right to submit the same.  Instead of submitting her comment, Dr. Jordan
filed an Ex-Parte Motion for Extension of Time to
File Comment.  The Central Bank, through
Mr. Sebastian Palanca, Jr. filed a similar motion
alleging that the Bank received notice of the appeal on April 1, 1987. 
However, the Commission denied the motion of Dr. Jordan
on the ground that a protest case is not strictly an adversary proceeding where
protestant and protestee play active participation.^[5]

On May 26, 1987,
the Commission issued Resolution No. 87-156 setting aside the decision of the
MSB dated January 28, 1987
and directing the appointment of private respondent to the contested
position.  On June 10, 1987, the
petitioner Central Bank filed a petition for reconsideration that the
department head enjoys wide latitude of discretion as regards the appointment
of department personnel and that question as to who is more competent is of no
consequence since private respondent was not yet an employee of the Central Bank
at the time Dr. Jordan was considered for promotion.  However, the petitioner’s motion for reconsideration was denied
by the Commission in Resolution No. 87-375 dated October 16, 1987 on the sole
ground that its Resolution dated May 26, 1987 had become final and executory on account of the failure of Dr. Jordan to file a motion for reconsideration and
that the motion for reconsideration filed by Mr. Palanca,
Jr. for and in behalf of the Central Bank cannot be said to have been filed in
behalf of Dr. Jordan inasmuch as the Central Bank has no personality to file a
motion for reconsideration as it does not stand to be adversely affected or
personally aggrieved by the decision of the Commission.

Hence, the present petition.

It is the contention of the petitioner Central Bank that the
Civil Service Commission acted without or in excess of jurisdiction in revoking
the appointment of Dr. Jordan and in directing the issuance of the appointment
in favor of Dr. Borja when all the while the
qualifications of Dr. Jordan were certified by the Promotions Board and a
representative of the Civil Service Commission who was present in the
deliberations of the same board. 
Petitioner Bank added that the power of the Commission is limited to
determining whether or not the appointee has the appropriate eligibility and
qualification and that once such qualification
was certified, the Commission is duty bound to attest to the
appointment.^[6]

The Solicitor General
prays for the dismissal of the instant petition on the ground that the decision
of the Merit Systems Board dated October
28, 1986 had already become final and executory
for failure of Dr. Jordan
to appeal or seek reconsideration within fifteen (15) days from receipt of the
said decision, citing Section 2, Board Resolution No. III in relation to Section 39, Presidential Decree No. 807. 
The Solicitor General also stressed that the petition is devoid of
merit.^[7]

On the other hand, private respondent contends that the Central Bank lacks the legal
personality to contest the validity of Resolution Nos. 87-375 and 87-156 as it
does not stand to be adversely affected or personally aggrieved by the decision
of the Commission, citing Sections 7 and 10 of Resolution No. 81-1329 of the
Commission.^[8]

It is well-settled principle that the appointing authority is
given ample discretion in the selection and appointment of qualified persons to
vacant positions.  This is a management prerogative which
is generally unhampered by judicial intervention.^[9]
Within the parameters of this principle, the right to select and appoint
employees is the prerogative of the employer which may be exercised without
being liable therefor provided that the exercise
thereof is 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
prerogatives are not exercised in a malicious, harsh, oppressive, vindictive or
wanton manner, or out of malice or spite.^[10]

There is no question that the Central Bank of the Philippines is
vested with the power of appointment under Section 14 of Republic Act No. 265,
as emended, otherwise known as the Central Bank Act.  At issue in this petition is the extent of
the power of the Civil Service Commission to approve or disapprove a particular
appointment.  May the Commission revoke
an appointment and direct the issuance of the appointment to somebody else whom
it believes is more qualified for the position?

Under the Civil Service Act of 1959,^[11]
the Commissioner of Civil Service has the final authority on appointments.^[12]
But the situation has changed under the new law, Presidential Decree No. 807,^[13] otherwise known as the Civil Service
Decree, wherein the Commission is not authorized to curtail the discretion of
the appointing official on the nature or kind of appointment to be extended.^[14]
The authority of the Commission is limited to approving or reviewing the
appointment in the light of the requirements of the law governing the Civil
Service.

In the case at bar, the qualifications of Dr. Jordan
were never disputed.  The fact that she
was qualified was attested to by the Promotions Board.  A representative of the Commission was
present in the deliberation of the said board.

Private respondent anchors his protest on the ground that he is more
qualified than the appointee.  It is
well-settled that when the appointee is qualified, as in this case, and all the
other legal requirements are satisfied, the Commission has no alternative but
to attest to the appointment in accordance with the Civil Service Laws.^[15] The Commission has no authority to
revoke an appointment on the ground that another person is more qualified for a
particular position. It also has no authority to direct the appointment of a substitute of its
choice.  To do so would be an encroachment on the discretion vested upon
the appointing authority.  An appointment
is essentially within the discretionary power of whomsoever it is vested,
subject to the only condition that the appointee should possess the
qualifications required by law.

Private respondent alleges, however, that the power of
appointment is not absolute and that the Commission is empowered to approve or
disapprove the same, citing Section 9(h) of Article V of the Civil Service Decree
and Section 4 of Civil Service Commission
Resolution No. 83-343.  This is
correct.  As noted earlier, the
appointment is subject to verification by the Commission as to whether or not
the appointing authority complied with the requirements of the law, otherwise,
it may revoke the appointment.  However,
to conclude that the Commissioner may also direct the appointment of individuals
other than the choice of the appointing power is certainly not contemplated by
the law.  Section 9(h) of Article V of
the Civil Service Decree provides that the Civil Service Commission is
authorized to perform the following functions with respect to appointments in
the Civil Service, to wit:

“Approve all appointments, whether original or promotional,
to positions in the civil service, except
those of presidential appointees,
members of the Armed Forces of the Philippines,
police forces, firemen, and jailguards, and disapprove
those where the appointees do not possess appropriate eligibility or required
qualifications.” xxx. (Emphasis supplied.)

From the foregoing, it is clear that the
Commission has the authority to check whether or not the appointee possesses
the appropriate civil service eligibility or the required qualifications.  If he does, his appointment must be approved;
if not it should be disapproved.  No
other criterion may be employed by the Commission when it acts on an
appointment.

Thus, when as in this case, it is not disputed that the
appointee, Dr. Jordan, is qualified for the contested position, the Commission
exceeded its power in revoking her appointment on the ground that private
respondent is more qualified.  The
Commission cannot substitute its will for
that of the appointing authority.

It may be true that private respondent has an edge over Dr.
Jordan in terms of educational attainment inasmuch as the former holds a
post-graduate degree in Medicine from a foreign educational institution and
considering that he has had experience and training in reputable institutions
here and abroad.  However, under the
pertinent rules on promotion obtaining in the Central Bank,^[16]
educational attainment and training experience are just among the factors to be
considered in the promotion of its employees. 
The other factors to be considered are performance rating, experience
and outstanding accomplishments, physical characteristics and personality
traits and potential.

After evaluating the qualifications of Dr. Jordan,
the Central Bank arrived at the conclusion that she outranks the others in
point of experience, rank, salary and service in the Bank.  Dr. Jordan
holds the degree of Doctor of Medicine and is a graduate of the University of
the Philippines.  She had been with the Central Bank since September 6, 1976.  It appears that during this span of time, she
had displayed a high degree of efficiency, dedication and initiative in
discharging the duties and responsibilities of her position.  She also attended various seminars,
conferences, symposia and other special training courses that enriched her
knowledge in the field of medicine.

Prior to her promotion to the contested position, she held the
position of bank physician from September
6, 1976 to July 9, 1981.  On July
9, 1981, Dr. Jordan
was promoted to the position of coordinating assistant.  On the other hand, the private respondent was appointed to
the position of bank physician only on October
9, 1984.  On one occasion
private respondent was found guilty of dishonesty for failing to reveal in his
information sheet that he has a sister-in-law employed in the Central Bank.^[17]

The stand of the Commission that the appointee did not hold a
special medical position prior to her appointment, unlike in the case of the
private respondent who held the position of bank physician is devoid of
merit.  The position of coordinating
assistant which was held by Dr. Jordan
prior to her promotion in the Medical and Dental Unit where she belongs is
filled up only by qualified and competent physicians.

On the basis of the foregoing, the appointing authority found
that Dr. Jordan satisfied all the requirements set by the Central Bank on
promotion the wisdom of which cannot be questioned.

It must be stressed that the law does not impose a rigid
or mechanical standard on the appointing power. 
The appointing person enjoys sufficient discretion to select and appoint
employees on the basis of their fitness to perform the duties and to assume the
responsibilities of the position to be filled.^[18]
As earlier ruled in Reyes vs. Abeleda,^[19]
at least sufficient discretion, if not plenary,
should be granted to those entrusted with the responsibility of administering
the offices concerned, primarily the department heads.  They are in the position to determine who can
best fulfill the functions of the office thus vacated.  Unless the law speaks in mandatory and peremptory
tone, there should be full recognition of the wide scope of such discretionary
authority.  The power of appointment is
essentially a political question involving considerations of wisdom which only
the appointing authority can decide.19-a

The Commission disregarded the performance ratings of Dr. Jordan
submitted by the Central Bank on the ground that the same were not signed by Dr. Jordan’s
immediate superior. It ruled that the absence of performance ratings in the
case of private respondent, considering his point of service, places the protestee and the protestant on equal footing.

We disagree.  As pointed
out by the Central Bank, it was not possible to require Dr. Ricarte
Reyes, Dr. Jordan’s
immediate superior to sign her performance ratings since the former had already
retired as early as March 23, 1984,
which was before the end of the first semester of 1984.  Thus, at the time the contested position was
filled up it was Mr. Sebastian Palanca, Jr. who
served as the immediate
supervisor of Dr. Jordan
in the unit where she belongs and
hence her performance ratings were signed by the latter.

The relation of the position of Dr. Jordan and private respondent
is as follows:

Dr. Jordan
holds the position of coordinating assistant (Salary Grade 20) which is next in rank to the contested position
of Assistant Bank Physician (Salary Grade
22).  Private respondent holds the
position of Physician (Salary
Grade 16) which without doubt is not next in rank to the contested
position.  As the position of private
respondent is not next-in-rank, the Commission should have dismissed his appeal
as he had no legal personality to contest the appointment of Dr. Jordan.
Only employees who are next-in-rank may protest an appointment.^[21]
In implementing Section 19 of P.D. No. 807 the Civil Service Commission
promulgated Resolution No. 83-343^[22]
which provides as follows:

“Within fifteen (15) days from notice
of issuance of an appointment, a next-in-rank employee who is competent and qualified and who feels
aggrieved by the promotion of another may file a protest to the ministry or agency head xxx.” (Emphasis supplied)

The Court takes note that at the time Dr. Jordan
was considered and recommended for promotion
to the contested position on October
3, 1984, private respondent was not yet an employee of the Central
Bank.  It was only on October 5, 1984 that he was appointed
as physician and he assumed the position only on October 9, 1984. 
It was, therefore, impossible to consider him for appointment to the
contested position before that time.

Anent the argument of the respondents that the Central Bank lacks
the legal personality to contest the decision of the Commission and hence
the decision became final and executory for failure
of Dr. Jordan
to file a motion for reconsideration,
the Court finds the argument untenable. 
In an earlier case,^[23]
this Court held that it is the appointing authority who stands adversely
affected where the Civil Service Commission disapproves the appointment
made.  This rule is acknowledged by the
Solicitor General.  However, the
Solicitor General contradicted himself by insisting that the decision of the
MSB dated October 28, 1981 became final and executory
for failure of Dr. Jordan to file a motion for reconsideration when all the
while the Central Bank filed a timely motion for reconsideration thereof.

Petitioner Central Bank, as the appointing authority is the one
which can defend its appointment since it knows the reasons for the same.  Any final determination of the issue can only
be enforced through it.  Moreover, it is
the act of the appointing authority that is being questioned.  Indeed, when the Commission directed the
Central Bank to submit its Comment on the appeal filed by private respondent
the Commission must have been aware that the participation of the Central Bank
is indispensable.  Although the Commission
also directed Dr. Jordan
to file a separate Comment, it denied the latter’s request for an extension of
time within which to file the same on the ground that a protest case is not strictly an adversary proceedings
where the protestant and the protestee play active
roles.  The Commission pointed out that a protest case is an action of the
protestant against a determination made by
the appointing authority,
a determination which only the appointing authority could defend inasmuch as it
is the latter who knows the reasons for such determination.^[24]
Thus, for the Commission to say thereafter that the decision became final and executory for failure of Dr. Jordan
to appeal is obviously erroneous.  As a
matter of fact the Commission is now in estoppel.  After making the parties believe that the
Central Bank may participate in the controversy, the Commission cannot later
make a total turn about by alleging that the participation of the Central Bank
is inconsequential as it lacks the requisite legal personality.

IN VIEW OF THE FOREGOING,
the questioned Resolutions of the Civil Service Commission dated May 26, 1987 and October 16, 1987, respectively, are hereby
declared null and void and the Commission is directed to attest the appointment
of Dr. Angela Jordan as Assistant Bank Physician.  No costs.

This Decision is immediately executory.

SO ORDERED.

Fernan, C.J., Melencio-Herrera,
Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, and Regalado, JJ., concur.

Narvasa, J., no part, private respondent was adverse party in prior proceedings
before my appointment to the court.

* Dr. Angela Jordan filed a
Supplemental Petition for Certiorari on December 21, 1987, pages 173 to 205, Rollo.

^[1]
Pages 30 to 34, Rollo.

^[2]
Pages 26 to 29, Rollo.

^[3]
Resolution No. 1259.

^[4]
Page 40, Rollo.

^[5]
Page 52, Rollo.

^[6]
Pages 12 and 13, Rollo.

^[7]
Pages 435 to 437, Rollo.

^[8]
Pages 136 to 137, Rollo.

^[9]
Ocampo vs. Subido,
72 SCRA 443 (1976).

^[10]Government
Service Insurance System vs. Ayroso, 96 SCRA
213 (1980).

^[11]
Republic Act No. 2260.

^[12]
Salcedo vs. Court of Appeals, 81 SCRA 408
(1978).

^[13]
Providing for the Organization of the Civil Service Commission in Accordance
with the Provisions of the Constitution, Prescribing Its Power and Functions
and for other Purposes.

^[14]
In Re: Elvira C. Arcega, 89 SCRA 318 (1979).

^[15]
Luego vs. Civil Service Commission, 143 SCRA 327, 331 (1986).

^[16]
Section 5. Rule on Promotions. – The comparative degree of
competence and qualifications of employees shall be determined by the extent to
which they meet the following requirements:

(1)        Performance
– this shall be based on last two performance rating of the employee. However,
no employee shall be considered for promotion unless his/her last two performance
rating is at least satisfactory.

(2)        Education
and Training – these shall include educational
background and successful completion of training courses, scholarships,
training grants, and others. Such education and training must be relevant to
the duties of the position to be filled.

(3)        Experience
and Outstanding Accomplishments – these shall include occupational history,
work experience, and accomplishments worthy of commendations.

(4)        Physical
Characteristics and Personality Traits – these refer to the physical fitness,
attitudes and personality traits of the individual which must have a bearing on
the positions to be filled.

(5)        Potential –
this takes into account the employee’s capability not only to perform the
duties and to assume the responsibilities of the position to be filled but also
those of higher and more responsible positions.

^[17]
Pages 233 to 236, Rollo.

^[18]
Pilar vs. Secretary of Public Works and
Communications, 19 SCRA 258 (1967).

^[19]
19 22 SCRA 825 (1968).  Sea also Eugenio vs. Torrejos, 85
SCRA 512 (1978).

19-a Tito R. Pintor vs. Hon. Bienvenido
A. Tan, et al., G.R. Nos. 84022
and 85804, March 7, 1984 En Banc Resolution, Luego
vs. CSC, 143 SCRA 327 (1986);Torres vs. Borja,
56 SCRA (1982).

^[20]
Central Bank Memorandum; pages 525, Rollo.

^[21]
Section 19, P.D. No. 807.

^[22]
Rule on Promotions.

^[23]
Quezon vs. Borromeo,
149 SCRA 205 (1987).

^[24]
Resolution No. 87-156; page 32, Rollo.