Ginson vs. Municipality of Murcia

The abolition of an office, although not a removal or separation from office and thus outside the protection of the security of tenure clause, is valid only if undertaken in good faith; where the abolition is a mere pretext to justify a dismissal, it is null and void as contrary to the constitutional guarantee of security of tenure.

Dr. Angela V. Ginson held the position of Municipal Dentist of Murcia, Negros Occidental, a position embraced within the classified civil service and therefore protected by the Civil Service Law, which permits removal or suspension only for cause. Baldomero de la Rama assumed the office of Municipal Mayor of the same municipality, and the dispute arose within the first weeks of his incumbency. The case turns on the doctrine governing the abolition of public offices and its recognized limitation of good faith, a doctrine that distinguishes a bona fide reorganization from a disguised removal.

Dr. Angela V. Ginson had served as Municipal Dentist of Murcia, Negros Occidental, continuously, faithfully, and efficiently since August 1, 1964, receiving a monthly salary of P200.00, her tenure being covered by the Civil Service Law. On February 16, 1968, or 44 days after Baldomero de la Rama assumed office as Municipal Mayor of Murcia, the mayor wrote her a letter terminating her services as Municipal Dentist effective February 18, 1968, on the stated ground of lack of funds; the letter itself recited an effectivity date of February 16, 1968, and was received by the petitioner on February 16, 1968.

On the very day she was discharged, the petitioner went to Mayor de la Rama and pleaded that she be reinstated to the service on the ground that her tenure of office was covered by the Civil Service Law and that she could not be removed or suspended except for cause. The mayor refused to reinstate her and instead told and challenged her to go to court and file a case against him and the municipality.

The evidence on record showed that at the time the petitioner was discharged, the Murcia treasury had existing funds to cover her salary for the month of February 1968 and for the succeeding months as well, until June 1968. For the fiscal year 1968-1969, the respondent municipality approved an annual budget of P270,000.00, more than double its budget of P154,910.00 for the fiscal year 1967-1968, or an increase of P115,090.00. During the same period, the municipality approved salary increases to some thirty-one employees and extended new items and appointments to a total of six employees.

The municipality, for its part, relied on an alleged overdraft of P50,000.00 as the cause of the dismissal, and contended that the petitioner was not removed from her position but that the termination of her services was the inevitable consequence of the abolition of her item as municipal dentist. The existence of the alleged P50,000.00 deficit was never sufficiently proven.

The trial court found for the petitioner and ordered her reinstatement with back salaries and attorney's fees. The Court of Appeals, on appeal, found that the municipality's financial condition arising from the alleged overdraft warranted the dismissal, held the same to be justified, and reversed. The Supreme Court found serious contradictions between the findings of the lower court and those of the respondent Court, and, upon resort to the records, rejected the respondent Court's findings and sustained the trial court.

• Lack of Funds: Respondent municipality relied on its alleged overdraft of P50,000.00, which it claimed led to the dismissal now assailed, in support of its position that its financial condition warranted the termination of the petitioner's services.
• Abolition of Office: Respondent contended that the petitioner was not removed from her position but that the termination of her services was the inevitable consequence of the abolition of her item as municipal dentist.

• Financial Justification for Dismissal: Whether the respondent municipality's state of finances justifies the challenged dismissal of the petitioner.
• Good Faith in the Abolition of Office: Whether the pretended abolition of the petitioner's position as municipal dentist was undertaken in good faith.

• Financial Justification for Dismissal: No. The municipality was financially capable of continued support to the petitioner, its treasury having held funds sufficient to cover her salary through June 1968, and its alleged P50,000.00 deficit never having been sufficiently proven.
• Good Faith in the Abolition of Office: No. Although the abolition of an office is not covered by the security of tenure clause, it must be done in good faith; the respondents' subsequent measures — budget and salary increases and new appointments — were indicative of bad faith, rendering the abolition null and void.

• Financial Justification for Dismissal: The general rule that the findings of fact of the Court of Appeals are controlling on the Supreme Court yields to recognized exceptions, among them that the findings of fact of the Court of Appeals are contrary to those of the trial court, are not supported by the evidence, or are contradicted by the evidence on record. Serious contradictions characterized the findings of the lower and the respondent courts, compelling a resort to the records and the rejection of the respondent Court's findings. The Court was convinced that the respondent municipality was financially capable of continued support to the petitioner in office. There was evidence that at the time the petitioner was discharged, the Murcia treasury had existing funds to cover her salary for February 1968 and for the succeeding months until June 1968; as of February 1968, therefore, the Municipality of Murcia had no justifiable reason to plead insolvency and no excuse to effect the questioned dismissal. There was likewise evidence that for the fiscal year 1968-1969, the respondent municipality approved an annual budget of P270,000.00, more than double its budget of P154,910.00 for the fiscal year 1967-1968, or an increase of P115,090.00; as the lower court reasoned, a municipality truly in dire financial straits would naturally show a decrease in appropriations for the ensuing fiscal year. The respondent municipality had, in the same period, approved salary increases to some thirty-one employees, and had extended new items and appointments to a total of six employees at the time the petitioner was removed from office. These actuations were inconsistent with pretexts of insolvency. The municipality's reliance on its alleged overdraft of P50,000.00 was accordingly rejected, the existence of the alleged deficit never having been sufficiently proven, and the claim raised disturbing inquiries — why the salary and budget increases, and the new appointments? The respondent Court's findings were moreover in contravention of its own findings in the case of the four policemen the respondents had dismissed on the same occasion, in which the respondent court itself dismissed the municipality's pleas of bankruptcy; while the Court of Appeals, sitting as a division, is not bound to take judicial notice of decisions of another division, the decision in G.R. No. 50058-R was duly brought to the attention of the respondent Court (Eighth Division), and there was no reason for its obduracy.
• Good Faith in the Abolition of Office: It is true that abolition of office neither means removal nor separation from office and is not covered by the protection of the security of tenure clause of the Constitution. This principle, however, carries with it a caveat: that the abolition is done in good faith. Good faith was regrettably wanting in this case, the respondents' measures subsequent to the petitioner's dismissal being rather indicative of bad faith. The Court reiterated its holding in Cruz vs. Primicias, Jr., where the claim of economy effectuated through a reorganization was belied by the fact that while 72 positions were abolished, 50 of these were actually vacant, and where, against the suppressed items of P25,538.71, new items carrying a total appropriation of P57,180.00 per semester (or P114,360.00 annually) were created, in addition to P8,000.00 for casual laborers at the discretion of the Governor. In sum, the pretended abolition of the dentist's clinic of the Municipality of Murcia was in fact a flimsy excuse to justify the dismissal of the petitioner, contrary to the security of tenure protection of the Constitution, and was hence null and void. Considering, however, the lapse of time — spanning almost twenty years — since this controversy rose, and considering the probability that the petitioner might have, in the interim, acquired a new employment, the Court was constrained to grant her the payment of back salaries equivalent to five (5) years without deduction or qualification, and to order her reinstatement subject to the condition that she has not obtained any other employment, as Murcia municipal dentist or any position for which she is qualified by reason of civil service eligibility, and subject to the requisites of age and physical fitness. The award of attorney's fees by the lower court in the sum of P1,000.00 was affirmed, and the private respondents' liability was declared joint and solidary.

• Abolition of Office and Security of Tenure — The abolition of an office is neither a removal nor a separation from office and is not covered by the protection of the security of tenure clause of the Constitution. The doctrine carries a caveat, however: the abolition must be done in good faith. Where the abolition is a mere pretext to justify the dismissal of a civil service employee, it is null and void as contrary to the security of tenure protection of the Constitution. In this case, the pretended abolition of the dentist's clinic of the Municipality of Murcia was declared a flimsy excuse, the municipality having simultaneously increased its budget, granted salary increases, and made new appointments.
• Bad Faith in the Abolition of Office — Bad faith in the abolition of an office may be inferred from the surrounding circumstances, particularly from measures inconsistent with the professed ground of economy. Among the indicia relied upon were: (a) the existence of treasury funds sufficient to cover the employee's salary for the remainder of the fiscal period; (b) the approval of an annual budget more than double that of the preceding fiscal year; (c) the grant of salary increases to thirty-one employees; and (d) the extension of new items and appointments to six employees at the time of the removal.
• Findings of Fact of the Court of Appeals — The findings of fact of the Court of Appeals are controlling on the Supreme Court, but the rule admits of recognized exceptions: (1) when the findings are grounded entirely on speculation, surmise, and conjecture; (2) when the inference made is manifestly mistaken; (3) when the Court of Appeals committed a grave abuse of discretion; (4) when its judgment is based on a misapprehension of facts; (5) when it went beyond the issues of the case and its findings contravene the admissions of the parties; (6) when its findings of fact are contrary to those of the trial court; (7) when the same are conclusions without citations of specific evidence; (8) when the facts set forth in the appellant's brief are not disputed by the appellee; and (9) when the findings of fact of the Court of Appeals are not supported by the evidence or contradicted by the evidence on record.
• Back Salaries in Prolonged Litigation — Where the controversy has spanned a considerable length of time and there is a probability that the dismissed employee has acquired new employment in the interim, the award of back salaries may be limited to five (5) years without deduction or qualification, and reinstatement may be ordered subject to the conditions that the employee has not obtained other employment, that the position is one for which she is qualified by reason of civil service eligibility, and that the requisites of age and physical fitness are satisfied.

• "It is true that abolition of office neither means removal nor separation from office and is not covered by the protection of the security of tenure clause of the Constitution. This principle, however, carries with it a caveat: That the abolition is done in good faith." — This passage states the ratio decidendi on the validity of the purported abolition, articulating the good-faith limitation that governs the otherwise recognized power to abolish public offices.
• "In sum, we declare the pretended abolition of the dentist's clinic of the Municipality of Murcia to be in fact a flimsy excuse to justify the dismissal of the petitioner, contrary to security of tenure protection of the Constitution, and is hence, null and void." — This is the Court's ultimate conclusion applying the good-faith doctrine to the facts, and it supplies the operative declaration of nullity upon which the relief of reinstatement and back pay rests.
• "The existence of the alleged P50,000,00-deficit was never sufficiently proven. Moreover, if this were the case, it raises disturbing inquiries. For instance, why the salary and budget increases, and the new appointments?" — This passage disposes of the municipality's principal factual defense and illustrates the evidentiary standard applied to a claim of insolvency advanced to justify a dismissal.
• "The claim of economy effectuated through the reorganization is belied by the fact that while 72 positions were abolished, 50 of these were actually vacant." — Quoted from Cruz vs. Primicias, Jr. and reiterated in this case, this formulation is the canonical statement that a professed economy measure is negated by contemporaneous acts inconsistent with retrenchment.

• Cruz vs. Primicias, Jr., No. L-28573, June 13, 1968, 23 SCRA 998 (1968) — Controlling precedent expressly reiterated; stands for the rule that a claim of economy through reorganization is belied where abolished positions were vacant and new positions were simultaneously created, a holding the Court applied to reject the municipality's plea of insolvency.
• De La Llana vs. Alba, No. L-57883, March 12, 1982, 112 SCRA 294 (1982) — Cited in support of the proposition that the abolition of an office neither means removal nor separation from office and is not covered by the protection of the security of tenure clause of the Constitution.
• Amizola vs. Municipality of Murcia, (CA) G.R. No. 50058-R, May 21, 1974 — A Court of Appeals decision involving four policemen dismissed by the same municipality on the same occasion, in which that court dismissed the municipality's pleas of bankruptcy; cited to show that the respondent Court's contrary findings in this case contravened its own prior findings.
• Teodoro vs. Court of Appeals, G.R. No. 31471, November 12, 1987 — Cited as authority for the enumeration of exceptions to the general rule that the findings of fact of the Court of Appeals are controlling on the Supreme Court.
• Gementiza vs. Court of Appeals, Nos. L-41717-33, April 12, 1982, 113 SCRA 477 (1982) — Cited in connection with the good-faith requirement in the abolition of office and in support of the award of back salaries.
• Cristobal vs. Melchor, No. L-43206, July 29, 1977, 78 SCRA 175 (1977) — Cited in support of the award of back salaries and of the conditions attached to the order of reinstatement.
• Laganapan vs. Asedillo, G.R. No. 28353, September 30, 1987 — Cited in support of the award of back salaries in cases of prolonged litigation.

• Rule 45, Section 1, Rules of Court — Provides that only questions of law may be raised in the Supreme Court in a petition for review; cited in footnote to explain the general rule that the findings of fact of the Court of Appeals are controlling, subject to the recognized exceptions applied in this case.
• Security of Tenure Clause, Constitution — Invoked as the constitutional guarantee violated by the petitioner's dismissal; the Court held that the pretended abolition of the dentist's clinic was a flimsy excuse to justify the dismissal, contrary to the security of tenure protection of the Constitution, and hence null and void.
• Civil Service Law — The petitioner's tenure as Municipal Dentist was covered by the Civil Service Law, under which she could not be removed or suspended except for cause; the order of reinstatement directed her reinstatement as municipal dentist or to any position for which she is qualified pursuant to the Civil Service Law and other rules.

Yap, Melencio-Herrera, Paras, and Padilla, JJ.