Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-25743 September 30, 199
N!T"ON!L M!R#ET"NG CORPOR!T"ON, CORNEL"O $!LM!CE%!, &OSE C!L%ERON,
!NTON"O !R!M$ULO, PE%RO $!L"NG"T, C"PR"!NO M!LON'O ()* ROSEN%O
TOM!S, petitioners,
vs.
+ON. ,R!NC"SCO !RC!, Pre-.*.)/ &0*/e o1 t2e Co0rt o1 ,.r-t ")-t()3e o1 M().4(, $r()32 "
()* &U!N T. !R"5E, respondents.
Government Corporate Counsel Leopoldo M. Abellera and Trial Attorney Manuel M. Lazaro for
petitioners.
Paredes, Poblador, Cruz and Nazareno for respondents.

C!P"STR!NO, J.:
This is an original action for certiorari and prohibition with praer for a writ of preli!inar
in"unction to en"oin respondent #udge $rancisco Arca fro! enforcing his %rder dated #anuar &',
&()), directing petitioners to reinstate respondent #uan T. Arive to his for!er position in the National
Mar*eting Corporation +hereinafter referred to as NAMARC%, and the writ of preli!inar !andator
in"unction issued pursuant thereto on #anuar &-, &()).
Respondent #uan T. Arive was the Manager of the Traffic./torage 0epart!ent of the
NAMARC% receiving an annual co!pensation of P1,'22.22. Pursuant to the 3eneral Manager4s
Ad!inistrative %rder No. &&5 dated $ebruar '-, &()2, he was investigated b a co!!ittee for
violating Manage!ent Me!orandu! %rder dated $ebruar &, &()2, directing 6that the allocation and
deliveries of !erchandise i!ported under the so.called Trade Assistance Progra! to its designated
beneficiaries be stopped76 and causing the i!proper release of ship!ents intended for deliver upon
full pa!ent thereof b the $ederation of 8nited NAMARC% 0istributors +$8N0,, which were
covered b certain do!estic letters of credit for the total su! of P9)&,2:9.5:. After due hearing, the
investigating co!!ittee found Arive guilt of the charges but left the i!position of the penalt to the
discretion of the 3eneral Manager and the Board of 0irectors. /ubse;uentl, the 3eneral Manager
issued Ad!inistrative %rder No. &91, series of &()2, holding Arive guilt of the charges and
dis!issing hi! fro! the service. %n Nove!ber -. &()2, the Board of 0irectors adopted Resolution
No. :5-.)2 dis!issing Arive fro! the service effective as of the date of his suspension, with
pre"udice to his reinstate!ent in the NAMARC% and to all benefits to which he would otherwise have
been entitled, Arive filed a !otion for reconsideration, which was denied.
%n March ', &()&, Arive appealed fro! the decision of the NAMARC% to the President of the
Philippines. The NAMARC% was advised b the %ffice of the President of the appeal, and was
as*ed to forward the records of the ad!inistrative case. %n #anuar '), &():, then E<ecutive
/ecretar Ra!on A. 0ia=, presu!abl acting for the President, handed down a decision setting
aside Resolution No. :5-.)2 of the NAMARC% and reinstating #uan T. Arive to his for!er position. >n
the decision it was pointed out that the order of the NAMARC% stopping the further deliver of
co!!odities i!ported under the trade assistance progra! to the designated beneficiaries had been
subse;uentl declared illegal b the /upre!e Court in the case of $ederation of United NAMAC!
"istributors vs. NAMAC!, 3. R. No. ?.&15&(, March 9&, &()', on the ground that said order was a
violation of the contract of sale7 hence, it would not be proper to hold Arive ad!inistrativel liable for
his failure to co!pl with said order7 and that the Pasig River Bodegas being private warehouses
over which Arive did not have supervision, !uch less control, the release of the co!!odities
therefro! could have been effected even had Arive tried to bloc* it. >n the !eanti!e, another person
was appointed to the position for!erl occupied b #uan T. Arive.
%n April ), &():, the NAMARC%, through its 3eneral Manager, in a letter addressed to the
President, as*ed for a reconsideration of the decision ordering Arive4s reinstate!ent. >n that letter it
was contended that the %ffice of the President had no "urisdiction to review an decision of the
NAMARC% Board of 0irectors re!oving, suspending, or otherwise disciplining an of its subordinate
e!ploees, because Republic Act No. &9-: +the NAMARC% Charter,, which grants that power to
the 3eneral Manager and to the Board of 0irectors, does not provide for an appeal to an
govern!ental bod. >n a letter to the NAMARC% dated #une 5, &():, then E<ecutive /ecretar
Ra!on A. 0ia=, this ti!e e<pressl acting 6@bA authorit of the President,6 refused to reconsider the
decision, stating that the President had "urisdiction under his constitutional power of control over all
e<ecutive depart!ents, bureaus and offices, and directing that the decision be i!ple!ented. The
NAMARC% filed a second !otion for reconsideration7 and on Nove!ber &1, &():, the President,
through /alvador Marino, as Acting E<ecutive /ecretar, denied the !otion and again directed
i!!ediate co!pliance with the order of reinstate!ent. %n 0ece!ber (, &():, the %ffice of the
President, acting on co!plaints of Arive that he had not been reinstated in spite of the denial of the
NAMARC%4s two !otions for reconsideration, sent a telegra! to the 3eneral Manager re;uesting
hi! to act on the case and to co!!ent within fort.eight hours7 but the said 3eneral Manager
neither acted on the case nor co!!ented.
%n 0ece!ber '9, &():, respondent #uan T. Arive filed a co!plaint +Civil Case No. )91'2,
with the Court of $irst >nstance of Manila against the NAMARC% and the !e!bers of its Board of
0irectors for reinstate!ent and da!ages, with praer for a writ of preli!inar !andator in"unction.
Bearing was held on the petition for issuance of the writ7 and after the parties had sub!itted their
respective !e!oranda, respondent #udge issued an order dated #anuar &', &()), the pertinent
portion of which readsC
... The Court is, however, of the view that the President of the Philippines does not
onl e<ercise supervision but also control over all govern!ent.owned and controlled
corporations including the NAMARC%7 hence, he !a review, revise, alter, !odif or nullif
the decision or action of the Board of 0irectors of an govern!ent.owned and controlled
corporation and substitute his "udg!ent for that of the latter. Plaintiff4s right to reinstate!ent,
therefore, appears to be ver clear7 and considering that the effect of the issuance of the writ
praed for is rather to re.establish and !aintain a pre.e<isting continuing relation between
the parties and considering further that there is an invasion of plaintiff4s right and the in"ur is
a continuing one, the Court hereb grants plaintiff4s praer and hereb orders the issuance of
a writ of preli!inar !andator in"unction directing the defendants to i!!ediatel reinstate
the plaintiff to his position as Manager of the Traffic /torage 0epart!ent of the National
Mar*eting Corporation upon filing a bond in the a!ount of P:,222.22.
0efendants filed a !otion for reconsideration7 and when the !otion was denied, the filed the
present petition with this Court, which on March &:, &()), issued a writ of preli!inar in"unction.
The pivotal point at issue is whether the President of the Philippines had authorit to reverse
the decision of the Board of 0irectors of the NAMARC% and to order the reinstate!ent of #uan T.
Arive. Respondents !aintain that he had, and the anchor their stand on /ection &2+&,, Article D>>, of
the Constitution, which readsC
The President shall have control of all e<ecutive depart!ents bureau or offices,
e<ercise general supervision over all local govern!ents as !a be provided b law, and ta*e
care that the laws be faithfull e<ecuted.
Petitioners, however, disagree, and contend that the word 6offices,6 interpreted in the light of
the preceding words 6e<ecutive depart!ents,6 and 6bureaus,6 refers to offices perfor!ing
govern!ental functions which have no "uridical personalit, and, therefore, does not include
govern!ent.owned and controlled corporations. The clai! that the above.;uoted constitutional
provision is not applicable and that what should appl is /ection &9+d, of Republic Act No. &9-:,
+NAMARC% Charter, which vests in the 3eneral Manager the power andEor dut, with the approval
of the Board of 0irectors, to re!ove, suspend or otherwise discipline for cause an subordinate
e!ploee of the NAMARC%. The contend that in reversing the order of the NAMARC% Board of
0irectors dis!issing #uan T. Arive fro! the service, and in ordering his reinstate!ent, the President
of the Philippines arrogated unto hi!self a power not authori=ed either b the Constitution or b the
law, hence his actuations were legall ineffective and certainl could not be a basis for issuance of
the writ of preli!inar in"unction.
Fe hold that the President of the Philippines4 authorit to review and reverse the decision of
the NAMARC% Board of 0irectors dis!issing #uan T. Arive fro! his position in the NAMARC% and
to order his re.instate!ent falls within the constitutional power of the President over all e<ecutive
depart!ents, bureaus and offices. 8nder our govern!ental set.up, corporations owned or controlled
b the govern!ent, such as the NAMARC%, parta*e of the nature of govern!ent bureaus or offices,
which are ad!inistrativel supervised b the Ad!inistrator of the %ffice of Econo!ic Coordination,
6whose co!pensation and ran* shall be that of a head of an E<ecutive 0epart!ent6 and who 6shall
be responsible to the President of the Philippines under whose control his functions ... shall be
e<ercised.6 +E<ecutive %rder No. 95) of 0ece!ber '', &(:2, section &, issued under the
Reorgani=ation Act of &(:2,.
The fact that section &9+d, of Republic Act No. &9-: +the NAMARC% Charter and li*ewise
section &&+d, of the 8nifor! Charter for 3overn!ent %wned or Controlled Corporations +E<. %rder
No. 9(( of #anuar :, &(:&, which authori=e the general !anager of such corporations, with the
approval of the Board of 0irectors, to re!ove for cause an subordinate e!ploee of the
Corporation do not provide for an appeal fro! the general !anager4s decision of re!oval to an
superior officer, bod or agenc, does not !ean that no appeal lies fro! such decision to the
President. >n ?acson.Magallanes Co., >nc. vs. Patio, +'& /CRA 5(:, 5((,, where the Court upheld
the President4s action through his E<ecutive /ecretar of reversing a decision of the 0irector of
?ands which had been affir!ed b the /ecretar of Agriculture and Natural Resources,
notwithstanding the provision of /ection - of Co!!onwealth Act No. &-& that such decisions 6as to
;uestions of fact shall be conclusive,6 we stated that 6the right to appeal to the President reposes
upon the President4s power of control over the e<ecutive depart!ents.6 And control si!pl !eans
6the power of an officer to alter or !odif or nullif or set aside what a subordinate officer had done
in the perfor!ance of his duties and to substitute the "udg!ent of the for!er for the latter.6 As
enunciated through #ustice Laurel in Planas vs. Gil +)( Phil. :', 1),, 6under the presidential tpe of
govern!ent which we have adopted ... all e<ecutive and ad!inistrative organi=ations are ad"uncts of
the E<ecutive 0epart!ent, the heads of the various e<ecutive depart!ents are assistants and
agents of the Chief E<ecutive.6
Fe find the President4s action through his E<ecutive /ecretar of reversing the NAMARC%
Board decision and ordering the reinstate!ent of respondent Arive to be an act of "ustice due
respondent. >n the decision of #anuar '2, &():, then E<ecutive /ecretar 0ia= statedC
Moreover, it is an established fact that the Pasig River Bodegas is a private
warehouse. Arive did not have the supervision, !uch less the control, of said warehouse.
8nder this circu!stance, the release of the co!!odities in ;uestion could have been
effected even if Arive tried to do his best to bloc* it. To paraphrase Arive, and in this regard
there is no evidence that contradicts hi!, his onl dut in connection with ship!ent i!ported
b the NAMARC% for the $8N0 under the trade assistance progra! was to underta*e the
proper clearance therefor with the Bureau of Custo!s. Clearl, therefore, Arive should not be
!ade to suffer for the release of co!!odities in violation of the NAMARC% order of
$ebruar &, &()2, even if it were lawful, which it is not according to the /upre!e Court,
because the custod and release thereof were not within his control and supervision. +Anne<
6A6 of Co!plaint, Anne< 6C6 of Petition, .
E<ecutive /ecretar 0ia= further pointed out in the first denial on #une 5, &(): of petitioner4s
!otion for reconsideration thatC
>t cannot be said, therefore, that it was an act of insubordination on Arive4s part not to
stop the release of the ship!ents in ;uestion in favor of the $8N0. Bad he done so, in total
disregard of a contract between NAMARC% and $8N0 which that !e!orandu! order
violates, and of an in"unction issued b the Court of $irst >nstance hearing the co!plaint filed
b the $8N0 against the NAMARC% for specific perfor!ance of that contract, he would
have been held liable therefor, especiall considering that the ship!ents intended for the
$8N0 were stored in a private warehouse. The ship!ents could not have been stopped at
all even if Arive did not 6o*e for release6 fro! the Bureau of Custo!s those ship!ents.
$urther!ore, the !e!orandu! order allegedl not obeed b hi! was declared illegal b no
less an authorit than the /upre!e Court.
< < < < < < < < <
The pri!ar ;uestion is whether Arive was illegall dis!issed or not. Fhether his
reinstate!ent would entail the alleged adverse effects is of secondar i!portance and legal
significance. This %ffice having found, in effect, that Arive was not lawfull dis!issed for
cause, he was entitled to reinstate!ent and to the benefits incidental thereto, inas!uch as
his te!porar cessation fro! wor* was not of his own doing nor within his control. The fact
that one has replaced hi! alread is i!!aterial because 6legall spea*ing his position never
beca!e vacant, hence there was no vacanc to which a new incu!bent could be
per!anentl appointed7 in other words, the new incu!bent4s occupanc of, or tenure in, said
post is te!porar and precarious and does not co!e within the conte!plation of the
Constitutional prohibition. +Batungba*al vs. National 0evelop!ent Co!pan, et al., -( %.3.
''(2,.6 +Anne< 6B6 of Co!plaint, Anne< 606 of Petition,
>!ple!entation of the President4s decision has been delaed all these long ears b the
NAMARC%, notwithstanding the 3overn!ent Corporate Counsel4s advice and opinion that 6!a not
legall refuse to i!ple!ent the decision of the %ffice of the President in the perfor!ance of the
e<ercise of his supervision and control over said govern!ent owned and controlled corporations6
+%p. No. &1:, /eries of &()9,. Get, in the case of a co.e!ploee of respondent Arive, Dictor
Macaraig, who was si!ilarl dis!issed b the Board, the NAMARC% Board pro!ptl reinstated hi!
on 0ece!ber -, &()', in i!ple!entation of the President4s decision of August 92, &()', ordering his
reinstate!ent. +Anne<es ' and 9, Respondents4 Answer, Arive4s right to reinstate!ent b virtue of
the President4s decision, which was reiterated twice in dening the petitioner4s persistent !otions for
reconsideration was, therefore, clearl established, and which is now final and binding upon
petitioners, and respondent "udge did not act without "urisdiction or with grave abuse of discretion in
issuing the writ of preli!inar !andator in"unction for his i!!ediate reinstate!ent. Fe dee! it
unnecessar to pass upon the other issues raised b the parties, which are after all, !erel
incidental to the !ain issue of the President4s authorit to review and reverse Resolution No. :5-.)2
of the NAMARC% Board of 0irectors.
FBERE$%RE, the petition is dis!issed, with costs against petitioners.$a%p&'l .n(t The writ of
preli!inar in"unction issued on March &:, &()) against the enforce!ent of respondent "udge4s
order dated #anuar &', &()) and writ of preli!inar !andator in"unction dated #anuar &-, &()) in
Civil Case No. )91'2 of the Court of $irst >nstance of Manila is hereb dissolved effective
i!!ediatel.
Concepcion, C.#., "izon, Ma)alintal, *aldivar, +anc&ez, Castro, ,ernando, Tee&an)ee and -arredo,
##., concur.
eyes, #.-.L., #., is on leave.
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