Olanda vs. Bugayong

The Regional Trial Court lacks jurisdiction over a petition assailing the relief and designation of an employee of a government institution created by its own charter, because disciplinary cases and personnel actions affecting civil service employees fall within the exclusive jurisdiction of the Civil Service Commission.

The Philippine Merchant Marine Academy (PMMA) is a government institution created pursuant to Republic Act No. 3680, as amended, and its employees fall under the Civil Service Commission. Petitioner Menelieto A. Olanda was Dean of the College of Marine Engineering and former PMMA Complex Project Officer, while respondent Leonardo G. Bugayong was PMMA President. The other respondents included PMMA officials and the board of investigation. The case concerns the jurisdictional boundary between the Regional Trial Court and the Civil Service Commission over disciplinary and personnel actions affecting civil service employees.

Petitioner Menelieto A. Olanda was Dean of the College of Marine Engineering and former PMMA Complex Project Officer, while respondent Leonardo G. Bugayong was President of the Philippine Merchant Marine Academy (PMMA). On March 17, 1998, twelve officers and employees of PMMA, including petitioner, filed a verified complaint with the Office of the Ombudsman against Bugayong, charging him with violation of Section 3(g) of Republic Act No. 3019, as amended, for entering into a grossly disadvantageous contract with the Philippine National Construction Corporation (PNCC) on behalf of PMMA.

On March 22, 1998, petitioner was interviewed live on DZRH by radio anchorman Fernan Enverga regarding the complaint. Bugayong then required petitioner, by Memorandum of March 25, 1998, to explain under oath within 72 hours why no disciplinary action should be taken against him for misusing classified information. In the meantime, respondent Pedro S. Dulay, Jr., chief security officer of PMMA, by a March 26, 1998 letter addressed to Bugayong, stated that he heard the radio interview and that petitioner, in discussing publicly without clearance from Bugayong the Memorandum of Agreement between PMMA and PNCC, violated the PMMA Faculty Handbook and other civil service rules. Dulay requested that a board of investigators be created to look into the matter.

By special order of March 27, 1998, Bugayong relieved petitioner as Dean of the College of Marine Engineering and designated him as acting executive assistant in the Graduate School Program at Pamantasan ng Makati. The order also directed petitioner to turn over all documents, properties, and records related to his duties as Dean to respondent Engr. Michael Dumangeng, who was appointed Acting Dean. On even date, petitioner returned Bugayong’s March 25, 1998 Memorandum, arguing that it was not properly addressed to him because his middle initial was incorrect. Bugayong thus sent a Memorandum of March 27, 1998 to petitioner similar to that of March 25, 1998, this time with the correct middle initial. Petitioner responded that his radio interview did not warrant disciplinary action because the complaint with the Office of the Ombudsman was a public document, involved public interest, and he was merely exercising his constitutionally guaranteed freedom of expression.

By an April 1, 1998 Memorandum, Bugayong found petitioner’s explanation unsatisfactory and not under oath as required. He thus created a board, by Special Order of April 6, 1998, to investigate the allegations of Dulay in his March 26, 1998 letter. Sustaining the findings of the board, Bugayong, by decision of August 21, 1998, suspended petitioner for three months for violation of the PMMA Faculty Handbook and the civil service rules.

Petitioner thereupon filed before the Regional Trial Court of Iba, Zambales, on October 27, 1998, a petition against herein respondents for quo warranto, mandamus, and prohibition with prayer for the issuance of a writ of preliminary injunction and damages, claiming that there was no valid cause to deprive him of his position as Dean and that respondent Dumangeng was usurping his position.

• Exhaustion of Administrative Remedies: Petitioner argued that the trial court committed grave and manifest error in dismissing the petition on the ground of his alleged failure to exhaust all administrative remedies.
• Dismissal Despite Answers: Petitioner argued that the trial court committed patent and grievous error when it dismissed the petition despite the filing by other respondents of their respective answers.
• No Valid Cause and Usurpation: Petitioner claimed that there was no valid cause to deprive him of his position as Dean and that respondent Dumangeng was usurping his position.
• Freedom of Expression: In his explanation to respondent Bugayong, petitioner argued that his radio interview did not warrant disciplinary action because the complaint with the Office of the Ombudsman was a public document, involved public interest, and he was merely exercising his constitutionally guaranteed freedom of expression.

• Exhaustion of Administrative Remedies: Respondents, in moving to dismiss before the trial court, relied on petitioner’s failure to exhaust all administrative remedies, the complaint not having alleged such exhaustion.

• Exhaustion of Administrative Remedies: Whether the trial court erred in dismissing the petition on the ground that petitioner failed to exhaust all administrative remedies.
• Dismissal Despite Answers: Whether the trial court erred in dismissing the petition despite the filing by other respondents of their respective answers.
• Jurisdiction over Personnel Actions: Whether the trial court had jurisdiction over the petition assailing petitioner’s relief as Dean and designation to another position, given that PMMA is a government institution and civil service personnel actions are within the exclusive jurisdiction of the Civil Service Commission.

• Exhaustion of Administrative Remedies: Not reached. The petition was denied on lack of jurisdiction, and it was unnecessary to dwell on the issues raised by petitioner.
• Dismissal Despite Answers: Not reached. The jurisdictional defect was dispositive, rendering petitioner’s other assigned errors unnecessary to resolve.
• Jurisdiction over Personnel Actions: No. The trial court lacked jurisdiction over the petition because disciplinary cases and personnel actions affecting civil service employees, including reassignment, are within the exclusive jurisdiction of the Civil Service Commission.

• Exhaustion of Administrative Remedies: Because the petition was denied on the ground of lack of jurisdiction of the trial court, the Court found it unnecessary to resolve petitioner’s assigned error regarding exhaustion of administrative remedies.
• Dismissal Despite Answers: Likewise, the assigned error concerning dismissal despite the filing of answers by other respondents was not reached, the jurisdictional defect being dispositive.
• Jurisdiction over Personnel Actions: Although review is generally limited to issues raised, an error in jurisdiction may be taken up even if not raised. PMMA was created under Republic Act No. 3680 and is a government institution. Under the test, a corporation is government-owned or controlled if created by its own charter for the exercise of a public function, rather than by incorporation under the general corporation law; those with special charters are government corporations subject to its provisions, and their employees are under the jurisdiction of the Civil Service Commission and are compulsory members of the Government Service Insurance System. Disciplinary cases and personnel actions affecting civil service employees—including appointment through certification, promotion, transfer, reinstatement, reemployment, detail, reassignment, demotion, and separation—are within the exclusive jurisdiction of the Civil Service Commission, which is the sole arbiter of controversies relating to the civil service. Section 13, Rule VII, Rules Implementing Book V of Executive Order No. 292 provides that a decision of a department or agency head is brought to the Merit System Protection Board, now the CSC En Banc per CSC Resolution No. 93-2387 dated June 29, 1993; Rule XII, Section 6 requires a grievance procedure, with decisions of lower-level officials appealed to the agency head, then to the Civil Service Commission, and CSC decisions elevated to the Court of Appeals. Thus, the trial court had no jurisdiction over the personnel action assailing petitioner’s relief as Dean and designation to another position. The trial court should have dismissed the case, and its taking cognizance of the petition was error. Because jurisdiction was lacking, the other issues raised by petitioner need not be resolved. Corsiga vs. Defensor was cited for the rule that the CSC has jurisdiction over all employees of government branches, subdivisions, instrumentalities, and agencies, including government-owned or controlled corporations with original charters. Mantala vs. Salvador was cited for the rule that personnel actions, reassignment included, affecting civil service employees are within the CSC’s exclusive jurisdiction.

• Exclusive Jurisdiction of the Civil Service Commission over Personnel Actions — The Civil Service Commission is the sole arbiter of controversies relating to the civil service, including disciplinary cases and personnel actions affecting employees in the civil service, such as appointment through certification, promotion, transfer, reinstatement, reemployment, detail, reassignment, demotion, and separation. In this case, because PMMA was created by Republic Act No. 3680 and is a government institution, petitioner’s relief as Dean and designation to another position were personnel actions within the CSC’s exclusive jurisdiction, not the Regional Trial Court’s.
• Test for Government-Owned or Controlled Corporation with Original Charter — A corporation is government-owned or controlled if created by its own charter for the exercise of a public function, rather than under the general corporation law. Those with special charters are government corporations subject to its provisions, and their employees are under the jurisdiction of the Civil Service Commission and are compulsory members of the Government Service Insurance System. PMMA, created under Republic Act No. 3680, falls under this rule.
• Jurisdiction May Be Raised Even If Not Assigned as Error — Although appellate review is generally limited to the specific issues or errors raised by the parties, an error in jurisdiction may be taken up even if not raised. The Court applied this principle to examine and resolve the trial court’s lack of jurisdiction over the civil service personnel action.

• "The test to determine whether a corporation is government-owned or controlled, or private in nature is simple. Is it created by its own charter for the exercise of a public function, or by incorporation under the general corporation law? Those with special charters are government corporations subject to its provisions, and its employees are under the jurisdiction of the Civil Service Commission, and are compulsory members of the Government Service Insurance System." — This passage states the test for determining whether a corporation is government-owned or controlled and explains why employees of special-charter corporations fall under the Civil Service Commission.
• "Disciplinary cases and cases involving \"personnel actions\" affecting employees in the civil service including \"appointment through certification, promotion, transfer, reinstatement, reemployment, detail, reassignment, demotion and separation\" are within the exclusive jurisdiction of Civil Service Commission which is the sole arbiter of controversies relating to the civil service." — This is the ratio decidendi on the CSC’s exclusive jurisdiction over the personnel action challenged in the case.
• "It was thus error for the trial court, which does not have jurisdiction, to, in the first, place take cognizance of the petition of petitioner assailing his relief as Dean and his designation to another position." — This passage applies the jurisdictional rule to the trial court’s assumption of jurisdiction over petitioner’s petition.
• "WHEREFORE, the petition is, upon the ground of lack of jurisdiction of the trial court, hereby DENIED." — This is the dispositive portion of the decision, denying the petition for review on jurisdictional grounds.

• Corsiga vs. Defensor, G.R. No. 139302, October 28, 2002 — Cited for the rule that the Civil Service Commission has jurisdiction over all employees of government branches, subdivisions, instrumentalities, and agencies, including government-owned or controlled corporations with original charters, and is the sole arbiter of civil service controversies.
• Mantala vs. Salvador, 206 SCRA 264, 267 (1992) — Cited for the holding that cases involving personnel actions, reassignment included, affecting civil service employees are within the exclusive jurisdiction of the Civil Service Commission.
• Camporedondo vs. National Labor Relations Commission, 312 SCRA 47, 50 (1999) — Cited for the test to determine whether a corporation is government-owned or controlled or private in nature, and for the rule that employees of special-charter government corporations are under the Civil Service Commission and are compulsory Government Service Insurance System members.
• Philippine Merchant Marine Academy vs. Court of Appeals, 69 SCRA 493, 495 (1976) — Cited to establish that PMMA is a government institution.
• Monsanto vs. Zerna, 371 SCRA 664, 677 (2001) — Cited, together with Limpangog vs. Court of Appeals, Zarate vs. Commission on Elections, and Namuhe vs. Ombudsman, for the rule that an error in jurisdiction may be taken up even if not raised.

• Republic Act No. 3680 — The law creating or converting the Philippine Nautical School into the Philippine Merchant Marine Academy. The Court cited it to establish that PMMA is a government institution with an original charter, hence its employees fall under the Civil Service Commission.
• Section 13, Rule VII, Rules Implementing Book V of Executive Order No. 292 (Administrative Code of 1987) — Provides how appeal can be taken from a decision of a department or agency head; such decision shall be brought to the Merit System Protection Board, now the CSC En Banc per CSC Resolution No. 93-2387 dated June 29, 1993. The Court cited it to show the administrative appeal route and that trial courts lack jurisdiction over personnel actions.
• Rule XII, Section 6, Rules Implementing Book V of Executive Order No. 292 — Requires the establishment of a grievance procedure; decisions of lower-level officials are appealed to the agency head, then to the Civil Service Commission. The Court cited it in outlining the civil service remedy.
• Section 3(g), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — The complaint filed with the Office of the Ombudsman charged respondent Bugayong with violation of this provision for entering into a grossly disadvantageous contract with PNCC on behalf of PMMA. The provision was the subject of the administrative complaint, not the basis of the Court’s disposition.

Puno (Chairman), Panganiban, and Sandoval-Gutierrez concurred. Corona was on leave.