Aldovino vs. Alunan III

Government employees separated pursuant to office orders and memoranda declared null and void as unconstitutional are entitled to reinstatement and back wages not exceeding five years, and the defense of prescription is deemed waived when never pleaded by the opposing party, even if the petition is filed more than four years after the cause of action accrued.

Executive Order No. 120, approved on 30 January 1987, reorganized the then Ministry of Tourism (MOT, now Department of Tourism, DOT). Section 29 thereof provided that incumbents whose positions were not included in the new position structure and staffing pattern, or who were not reappointed, were deemed separated from the service. Pursuant to this provision, the MOT issued office orders and memoranda — notably Office Order No. 9-87 dated 19 March 1987 — declaring all positions vacant and effecting the separation of numerous employees. These orders were subsequently declared null and void by the Supreme Court in Mandani vs. Gonzales (G.R. No. 78525, 4 June 1990) and in the consolidated cases of Abrogar vs. Garrucho, Jr. and Arnaldo vs. Garrucho, Jr. (G.R. Nos. 95773 and 96533, 6 August 1991), which directed reinstatement of the affected employees without loss of seniority rights and with back salaries. The herein petitioners and intervenors were former MOT employees who claimed to be similarly situated as the beneficiaries of those rulings but who had not joined the earlier petitions.

Executive Order No. 120, which took effect upon approval on 30 January 1987, reorganized the then Ministry of Tourism. Section 29 of the Executive Order provided that incumbents whose positions were not included in the new position structure and staffing pattern, or who were not reappointed, were deemed separated from the service. Pursuant to this provision, the MOT issued Office Order No. 9-87 dated 19 March 1987 and related memoranda declaring all positions vacant, and thereafter effecting the separation of a large number of employees. These actions gave rise to the cases of Mandani vs. Gonzales, Abrogar vs. Garrucho, Jr., and Arnaldo vs. Garrucho, Jr., in all of which the Supreme Court declared the office orders and memoranda issued under E.O. No. 120 null and void and directed the reinstatement of the affected employees without loss of seniority rights and with back salaries computed under the new staffing pattern from the dates of their invalid terminations, at rates not lower than their former salaries.

The herein petitioners and intervenors were former employees of the Ministry of Tourism who had been separated from service under the same office orders and memoranda but who had not joined the earlier petitions. According to the petitioners, after their illegal dismissal in May 1987, most of them returned to their home provinces because they became jobless, and it was only through slow word-of-mouth communication that they learned they were entitled to reinstatement. They alleged that many of them had protested their termination by filing complaints with the Department of Labor and Employment and the Civil Service Commission, that some joined a picket and demonstration before the DOT building at Luneta Park, and that they received separation or retirement benefits under protest. After the finality of Mandani, many of the terminated employees wrote to then DOT Secretary Peter D. Garrucho, Jr. and DBM Secretary Guillermo Carague seeking reinstatement and back wages, but received no response. Following the resolutions in Abrogar and Arnaldo, they again made representations with the DOT.

The petition for mandamus was filed in October 1991, and the interventions were filed in February, March, May, and July 1992 — more than four years after the alleged illegal dismissal in May 1987. Public respondents, through the Solicitor General, did not dispute that most petitioners and intervenors were separated pursuant to the voided office orders and memoranda, except for petitioners Samuel Hipol, Jane Corros, and Myrna Salvador, and intervenors Concepcion Timario, Efren Fontanilla, Ascension Padilla, and Evelyn Enriquez, whose circumstances differed. The Solicitor General opposed the petition on grounds of failure to exhaust administrative remedies, laches, and potential disruption of the present organizational set-up. The matter of prescription was never raised by public respondents at any stage of the proceedings; it was introduced only in the dissenting opinion.

• Similarity of Situation: Petitioners and intervenors maintained that their plight was identical to that of the employees in Mandani, Abrogar, and Arnaldo, having been separated under the same void office orders and memoranda issued pursuant to E.O. No. 120, and accordingly sought reinstatement without loss of seniority rights and with back salaries computed under the new staffing pattern from the dates of their invalid termination at rates not lower than their former salaries.
• Absence of Laches: Petitioners argued that they could not be deemed to have slept on their rights, as they had protested their illegal termination by filing complaints with the Department of Labor and Employment and the Civil Service Commission, joining pickets and demonstrations before the DOT building, receiving separation benefits under protest, and making repeated written representations with DOT and DBM officials following the finality of Mandani and the resolutions in Abrogar and Arnaldo.
• Excuse for Delay: Petitioners explained that after their dismissal in May 1987, most returned to their home provinces because they became jobless, and it was only through slow and unreliable word-of-mouth communication that they learned of their entitlement to reinstatement.
• Reliance on Co-Employees' Cases: Petitioners contended that they could reasonably have relied upon the outcome of the cases filed by their co-employees to protect their interests, given the similarity of their situation and the identical relief sought, citing Cristobal vs. Melchor for the proposition that intervention in the earlier suit was not essential to avoid laches.

• Failure to Exhaust Administrative Remedies: Public respondents argued that petitioners and intervenors failed to exhaust administrative remedies before resorting to the courts.
• Laches: The Solicitor General contended that while petitioners and intervenors were dismissed contemporaneously with their colleagues in Mandani, Abrogar, and Arnaldo, they filed the petition and interventions only in October 1991 and in February through July 1992, or more than four years later, such that laches had set in.
• Disruption of Organizational Set-Up: Public respondents argued that reinstatement would disrupt the present organizational set-up of the DOT.
• Specific Exceptions — Hipol: The Solicitor General pointed out that petitioner Samuel Hipol was separated under an order of 19 May 1986 issued pursuant to Section 2, Article III of Proclamation No. 3, not under E.O. No. 120, and was not even an incumbent when E.O. No. 120 was issued.
• Specific Exceptions — Corros and Fontanilla: The Solicitor General contended that petitioners Jane Corros and Efren Fontanilla were not employees of the Ministry of Tourism because their names did not appear in the regular plantilla.
• Specific Exceptions — Salvador, Padilla, and Enriquez: The Solicitor General argued that petitioner Myrna Salvador was a casual employee, intervenor Ascension Padilla was a temporary appointee whose appointment expired on 20 February 1987, and intervenor Evelyn Enriquez was also a temporary appointee, such that their appointments were terminable at the pleasure of the appointing authority.
• Specific Exceptions — Timario: The Solicitor General asserted that intervenor Concepcion Timario resigned effective 28 May 1987 and was not separated under any of the invalid orders.
• Already Reinstated Intervenors: The Solicitor General sought dismissal of the petitions of certain intervenors who had already been reinstated, though it was unrebutted that they had not yet been paid their back wages.

• Validity of Separation: Whether the separation of petitioners and intervenors from the service was pursuant to the office orders and memoranda declared void in Mandani vs. Gonzales.
• Laches: Whether the doctrine of laches bars the petition given the delay in filing.
• Prescription: Whether the defense of prescription, though never raised by public respondents, bars the petition.
• Exhaustion of Administrative Remedies: Whether failure to exhaust administrative remedies precludes direct access to the Supreme Court.
• Disruption of Organizational Set-Up: Whether potential disruption of the present organizational set-up justifies denial of reinstatement.
• Entitlement of Specific Petitioners/Intervenors: Whether petitioners Samuel Hipol, Jane Corros, Efren Fontanilla, Myrna Salvador, and intervenors Concepcion Timario, Ascension Padilla, and Evelyn Enriquez are entitled to reinstatement.
• Already Reinstated Intervenors: Whether intervenors who were already reinstated but not yet paid back wages are entitled to back wages.
• Computation of Back Wages: Whether back wages should be limited to a maximum period of five years.

• Validity of Separation: Yes. Except for Samuel Hipol, Jane Corros, Myrna Salvador, Concepcion Timario, Efren Fontanilla, Ascension Padilla, and Evelyn Enriquez, the separation of petitioners and intervenors was pursuant to the office orders and memoranda declared void in Mandani.
• Laches: No. Laches does not bar the petition because petitioners and intervenors continuously protested their termination, filed administrative complaints, picketed, and made written representations with the DOT, demonstrating neither acquiescence in the alleged wrong nor lack of diligence in seeking a remedy.
• Prescription: No. Prescription was never raised by public respondents and is deemed waived; moreover, the prescriptive period was tolled by the filing of cases before the DOLE and CSC and by written demands for reinstatement, and considerations of substantial justice require resolution on the merits.
• Exhaustion of Administrative Remedies: No. The requirement of prior resort to administrative remedies is not an absolute rule and did not bar direct access to the Court, given the demands of public interest, the need for stability in the public service, and the serious implications for the civil service system.
• Disruption of Organizational Set-Up: No. An erring department head cannot avoid reinstatement by interposing changes effected subsequent to unlawful acts; the basic principle is that the official must undo the harmful effects of the illegal act and accord restoration in good faith.
• Entitlement of Specific Petitioners/Intervenors: No, as to Hipol, Corros, Fontanilla, and Timario. Hipol was separated under a different authority (Proclamation No. 3) and was not an incumbent when E.O. No. 120 was issued; Corros and Fontanilla's employment status must be threshed out in a proper forum as the Court is not a trier of facts; Timario resigned for professional reasons and cannot characterize her resignation as a courtesy resignation under the voided orders. As to Salvador, Padilla, and Enriquez, their reinstatement cannot be ordered in the instant proceeding because the determination is limited to the nullity of the voided orders.
• Already Reinstated Intervenors: Yes, to the extent of unpaid back wages. Intervenors who were already reinstated but had not yet been paid their back wages were entitled to back salaries under the same conditions as the other petitioners.
• Computation of Back Wages: Yes. Back wages should not exceed a period of five years, conformably with existing jurisprudence.

• Validity of Separation: Public respondents did not dispute that the majority of petitioners and intervenors were unseated from the then Ministry of Tourism pursuant to office orders and memoranda issued under E.O. No. 120, which were declared null and void in Mandani vs. Gonzales. An unconstitutional act is not a law; it confers no rights, imposes no duties, affords no protection, creates no office, and is in legal contemplation inoperative, as if it had not been passed. It was therefore as if petitioners and intervenors were never served their termination orders and were never separated from the service. The fact that they were unable to assume office was attributable to the continuing refusal of public respondents to take them in.

• Laches: The doctrine of laches is principally a question of inequity of permitting a claim to be enforced, founded on some change in the condition of property or the relation of the parties. Equity must lean in favor of petitioners and intervenors who were unjustly injured by public respondents' unlawful acts; the prejudice from the violation of their rights resulting in loss of employment is far more serious than the inconvenience to public respondents in rectifying their own mistakes. Petitioners and intervenors could not be deemed to have slept on their rights, as they had filed complaints with the DOLE and CSC, joined pickets and demonstrations, received separation benefits under protest, and made repeated written representations with DOT and DBM officials. Citing Cristobal vs. Melchor, the Court held that where the cause of action is of such a nature that a suit would be brought on behalf of all persons similarly situated, it is not essential that each person intervene in the suit to be free from laches.

• Prescription: Prescription was never raised as an issue by public respondents; at most it is deemed waived. Under Section 2, Rule 9 of the Rules of Court, defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. The Solicitor General referred only to laches, not prescription, and laches is different from prescription: prescription is concerned with the fact of delay and is statutory, while laches is concerned with the effect of delay and is not statutory. Even if prescription had been raised, the prescriptive period was tolled by the filing of termination cases before the DOLE and CSC, the pendency of which was acknowledged by public respondents. Picketing and written demands for reinstatement likewise constituted demands sufficient to interrupt the period of prescription. Moreover, the Court had previously relaxed the rule on prescription in Cristobal vs. Melchor and in the Peralta intervention in Abrogar and Arnaldo where considerations of substantial justice demanded resolution on the merits.

• Exhaustion of Administrative Remedies: The requirement of prior resort to administrative remedies is not absolute and did not bar direct access to the Court in the analogous cases of Dario vs. Mison and Mandani vs. Gonzales, because of the demands of public interest, including the need for stability in the public service, and because of the serious implications of the cases on the administration of the Philippine civil service and the rights of public servants.

• Disruption of Organizational Set-Up: The Court reiterated its 18 October 1990 Resolution in Mandani that an erring head of a department, bureau, or office cannot avoid reinstatement, payment of back pay, and other acts of compliance by interposing changes effected subsequent to unlawful acts. The basic principle is that whenever the Court declares an administrative official to have acted unlawfully, that official must undo the harmful effects of the illegal act and accord restoration or restitution in good faith.

• Entitlement of Specific Petitioners/Intervenors: Samuel Hipol was separated under an order of 19 May 1986 issued pursuant to Section 2, Article III of Proclamation No. 3, not under E.O. No. 120, and was not an incumbent when E.O. No. 120 was issued, placing him outside the scope of the voided orders. Jane Corros and Efren Fontanilla's employment status was disputed — the Solicitor General claimed their names did not appear in the plantilla, while Corros explained her name changed due to marriage — and the fact of employment should be threshed out in a proper forum as the Court is not a trier of facts. Concepcion Timario resigned effective 28 May 1987 citing "professional reasons," and conspicuously absent was the customary order requiring the filing of courtesy resignations, so she could not characterize her resignation as pursuant to the voided orders. As to Myrna Salvador (casual), Ascension Padilla (temporary appointee), and Evelyn Enriquez (temporary appointee), while the voided orders did not exist in legal contemplation, the determination in the case was limited to the nullity of said orders, and their reinstatement could not be ordered in the instant proceeding.

• Already Reinstated Intervenors: The Solicitor General sought dismissal of the petitions of intervenors who had already been reinstated, but because of the unrebutted allegation that these employees had not yet been paid their back wages, their petitions were granted to that extent.

• Computation of Back Wages: The Court could not blindly accept the allegation that petitioners and intervenors had been jobless since 1987 and were entitled to full back wages. Conformably with existing jurisprudence, the award of back wages should not exceed a period of five years, citing Regis, Jr. vs. Osmeña, Jr. and Cristobal vs. Melchor.

• Doctrine of Unconstitutionality — An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, inoperative, as if it had not been passed. It is stricken from the statute books and considered never to have existed at all. Not only the parties but all persons are bound by the declaration of unconstitutionality. The Court applied this doctrine to hold that the office orders and memoranda issued under E.O. No. 120, having been declared void, were legal nullities, such that the termination of the affected employees was deemed never to have occurred.

• Distinction Between Prescription and Laches — Prescription is concerned with the fact of delay and is statutory, based on fixed time. Laches is concerned with the effect of delay and is not statutory, applying in equity. Prescription is a matter of time; laches is a question of inequity of permitting a claim to be enforced, founded on some change in the condition of property or the relation of the parties. The Court applied this distinction to hold that the Solicitor General's invocation of laches did not encompass prescription, and that prescription, having never been raised, was waived.

• Waiver of Prescription — Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived, except failure to state a cause of action. The Court held that public respondents' failure to raise prescription constituted a waiver, pursuant to Section 2, Rule 9 of the Rules of Court, reinforced by the principle that where considerations of substantial justice are involved — particularly when the employment and lifeblood of each petitioner is at stake — it is better to resolve the issues on the merits rather than apply prescription which was not pleaded.

• Relaxation of Prescription in the Interest of Justice — Courts, under the principle of equity, will not be bound strictly by the statute of limitations or the doctrine of laches when to do so manifest wrong and injustice would result. The Court applied this principle, citing Cristobal vs. Melchor and the Peralta intervention in Abrogar and Arnaldo, where the Court had relaxed the prescriptive period to give way to a determination on the merits.

• Reinstatement Despite Organizational Changes — An erring head of a department, bureau, or office cannot avoid reinstatement, payment of back pay, and other acts of compliance with the orders of the Court by interposing changes effected subsequent to his unlawful acts. The basic principle is that the official must undo the harmful effects of the illegal act and accord restoration or restitution in good faith.

• Limitation on Back Wages — The award of back wages to illegally dismissed government employees should not exceed a period of five years, conformably with existing jurisprudence.

• "An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, inoperative, as if it had not been passed." — This passage articulates the foundational doctrine of constitutional nullity, which the Court applied to hold that the voided office orders were legal nullities and the affected employees were deemed never to have been separated from service.

• "The defense of laches applies independently of prescription. While prescription is concerned with the fact of delay, laches is concerned with the effect of delay. Prescription is a matter of time; laches is a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties." — This passage provides the canonical formulation of the distinction between prescription and laches, which the Court used to hold that the Solicitor General's invocation of laches did not encompass prescription and that prescription, never having been raised, was waived.

• "it is indeed the better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so manifest wrong and injustice would result." — This passage, quoted from Cristobal vs. Melchor, states the equitable principle that allowed the Court to resolve the case on the merits despite the lapse of time, foregrounding substantial justice over technical bars.

• "An erring head of a Department, Bureau, or Office cannot avoid reinstatement, payment of back pay, and other acts of compliance with the orders of this Court by interposing changes effected subsequent to his unlawful acts and claiming that such changes make it difficult to obey this Court's orders." — This passage, quoted from the Court's 18 October 1990 Resolution in Mandani, establishes the principle that organizational changes cannot be used as a shield against the duty to reinstate illegally dismissed employees.

• Mandani vs. Gonzales, G.R. No. 78525, 4 June 1990 (186 SCRA 108) — Controlling precedent. The Court declared null and void all office orders and memoranda issued pursuant to E.O. No. 120 and directed reinstatement of the affected employees. The instant petitioners claimed to be similarly situated and sought the same relief.

• Abrogar vs. Garrucho, Jr. and Arnaldo vs. Garrucho, Jr., G.R. Nos. 95773 and 96533, 6 August 1991 — Controlling precedent, decided by resolution. The Court ordered reinstatement of petitioners with back salaries, subject to supervening disqualifications and reimbursement of benefits received. The Court also granted the Peralta intervention on 15 August 1991, even though filed after the four-year prescriptive period, which the majority cited as precedent for relaxing the prescriptive rule.

• Cristobal vs. Melchor, L-43203, 29 July 1977 (78 SCRA 175) — Followed and relied upon extensively. The Court relaxed the rule on prescription to give way to a determination on the merits where government action contributed to the delay in filing. The Court also quoted the principle that courts, under equity, will not be bound strictly by the statute of limitations when manifest wrong and injustice would result, and that it is not essential for each similarly situated person to intervene in a suit to avoid laches.

• Fernandez vs. Grolier International, Inc., G.R. No. 55312, 29 December 1987 (156 SCRA 830) — Followed. The Court cited this case for the proposition that prescription not pleaded is deemed waived, and that where considerations of substantial justice come in, it is better to resolve the issues on the merits rather than apply prescription which was not pleaded.

• Dario vs. Mison, G.R. No. 81954, 8 August 1989 (176 SCRA 84) — Followed. The Court cited this case for the proposition that the requirement of prior resort to administrative remedies is not an absolute rule and did not bar direct access to the Supreme Court.

• Regis, Jr. vs. Osmeña, Jr., G.R. No. 26785, 23 May 1991 (197 SCRA 308) — Followed. Cited for the rule that the award of back wages should not exceed a period of five years.

• Maneclang vs. Baun, L-27876, 22 April 1992 (208 SCRA 179) — Cited for the definition of laches as a question of inequity of permitting a claim to be enforced.

• Nielson & Co., Inc. vs. Lepanto Consolidated Mining Co., L-21601, 17 December 1966 (18 SCRA 1040) — Cited for the distinction between prescription and laches.

• Section 29, Executive Order No. 120 — Provided that incumbents whose positions were not included in the new position structure and staffing pattern of the reorganized Ministry of Tourism, or who were not reappointed, were deemed separated from the service. The office orders and memoranda issued pursuant to this provision were declared null and void in Mandani and in the instant case.

• Section 2, Article III, Proclamation No. 3 — The authority under which petitioner Samuel Hipol was separated on 19 May 1986, prior to the issuance of E.O. No. 120. Because his separation was not under the voided orders, his petition was dismissed.

• Article 1146, Civil Code — Provides that actions upon an injury to the rights of the plaintiff must be filed within four years. The dissent invoked this provision to argue that the petition had prescribed, but the majority held that prescription was never raised and was deemed waived.

• Section 2, Rule 9, Rules of Court — Provides that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. The Court applied this provision to hold that prescription, never having been raised by public respondents, was waived.

Padilla, Bidin, Regalado, Romero, Nocon, Melo, Quiason, Vitug, and Kapunan, JJ., concurred. Puno, J., took no part.

• Davide, Jr., J. (with Cruz and Feliciano, JJ., concurring in the dissent) — Justice Davide agreed that the separation of the petitioners and intervenors was made pursuant to the void office orders and that reinstatement would have been inevitable were it not for the failure to bring the action within the prescriptive period. He argued that under Article 1146 of the Civil Code, an action for reinstatement and back salaries must be filed within four years from the illegal dismissal, and since the petition and interventions were filed more than four years after the cause of action accrued in May 1987, the case should be dismissed. He further contended that the petition was one for mandamus, which must be filed within one year from dismissal, citing Madrigal vs. Lecaroz. Justice Davide rejected the majority's reliance on equity, arguing that equity is available only in the absence of positive law and cannot supplant the law, citing Aguila vs. Court of First Instance of Batangas. He also argued that even if prescription was not pleaded by the respondents, the allegations in the petition themselves showed that the cause of action had prescribed, citing Gulang vs. Nadayag for the proposition that prescription is not deemed waived if the plaintiff's own allegations show the action has prescribed. He distinguished Cristobal vs. Melchor on its facts, noting that in Cristobal the delay was attributable to continued assurances by government officials of reinstatement, whereas here the petitioners had actively pursued administrative remedies before the DOLE and CSC, presumably obtained adverse decisions, and allowed them to become final. He voted to DENY the petition for want of merit.