Simon, Jr. vs. Martinez

A career civil service employee may not be separated from the service under Executive Order No. 17 absent substantiated justifiable grounds and observance of the required review and due process; officials who effect an unjustified termination may be held liable for moral and exemplary damages and attorney’s fees, but actual damages must be deleted where the employee already received her salary for the separation period and the attorney’s fees awarded cover the litigation expenses.

Florida R. Martinez served in the Quezon City Health Department as a career civil servant, rising from nurse in 1954 to Nursing Program Supervisor IV or Chief Nurse in 1983. The petitioners were then Quezon City officials: Brigido R. Simon, Jr. as Officer-in-Charge/Mayor, Edmundo P. Kaimo as City Administrator, and Nestor P. Borromeo as Secretary to the Mayor. The governing backdrop was Article III, Section 2 of the Freedom Constitution, otherwise known as Proclamation No. 3, which allowed elective and appointive officials under the 1973 Constitution to continue in office until otherwise provided and permitted removal even without cause, and Executive Order No. 17, which implemented that provision by limiting separation of career civil servants to justifiable grounds and requiring review and assessment procedures.

Florida R. Martinez began working at the Quezon City Health Department as a nurse in 1954 and rose from the ranks to become Nursing Program Supervisor IV or Chief Nurse of the Quezon City Health Department in 1983. She finished her nursing degrees at the University of the Philippines-Philippine General Hospital and Arellano University, obtained a Certificate in Public Health from the University of the Philippines and a master’s degree from the Philippine Women’s University, served as President of the Philippine Nurses Association, held positions in several organizations, received awards, and participated in numerous seminars here and abroad.

On November 3, 1986, City Administrator Edmundo P. Kaimo called Martinez to his office and gave her three choices: to resign, retire, or be dismissed. When she asked what the specific charges against her were, she was told to just wait for the letter of dismissal. Through her lawyer-husband Pedro, Martinez sent a letter dated November 10, 1986 to Officer-in-Charge Brigido R. Simon, Jr., asking him to inform them of the specific charges against her.

On November 12, 1986, Martinez received a letter dated October 30, 1986, signed by Simon, Kaimo, and Nestor P. Borromeo, separating her from the service pursuant to Proclamation No. 3 and Executive Order No. 17. The letter cited as grounds the existence of a probable cause for violation of the Anti-Graft and Corrupt Practices Act as determined by the Ministry Head concerned and/or any other analogous ground showing that she was unfit to remain in the service or that her separation or replacement was in the interest of the service. Martinez filed a motion for reconsideration with the Review Committee of the Ministry of Justice, which issued a Resolution dated January 5, 1987 ordering her reinstatement after finding that Simon failed to substantiate the alleged violation of the Anti-Graft and Corrupt Practices Act and that there was no analogous ground showing her to be unfit to remain in service. She was reinstated on January 26, 1987 and officially reported back to work on January 29, 1987. However, she was not allowed to receive her salary and allowances during the period she was separated from the service, from November 13, 1986 to January 29, 1987, following the First Indorsement of the City Attorney stating that under Section 9 of Executive Order No. 17 she was considered on vacation leave without pay during that time.

On March 23, 1987, Martinez filed a complaint for damages with the Regional Trial Court of Quezon City against Simon, Borromeo, Kaimo, the Quezon City Government, Reynaldo M. Lupisan, Cecilia Paulino, Gloria Chan, Arturo Loria, and Rafaela Castro, alleging that the defendants connived in causing her separation from the service. She prayed that they be ordered to pay, jointly and severally, the salary and benefits due her from November 12, 1986 to January 28, 1987, as well as actual, moral, and exemplary damages and attorney’s fees, specifically invoking Article 21 of the Civil Code. The defendants contended that the notice of termination was served after a judicious assessment by the Review Committee of the Office of the Mayor, which unanimously voted after finding probable cause for violation of the Anti-Graft and Corrupt Practices Act and analogous grounds showing Martinez unfit to remain in service. They further claimed that Martinez pleaded with Simon for another chance to reform herself, which the mayor accepted, so they no longer filed any comment on the motion for reconsideration before the Minister of Justice, and that under the Quezon City Charter, Republic Act No. 537, the Quezon City government shall not be liable for damages arising from the negligence of any officer.

At trial, Kaimo could point only to Lupisan, then Acting Head of the Health Department of Quezon City, as the one who recommended Martinez’s termination, but Lupisan denied that he ever made such recommendation and claimed he did not know who did so. Kaimo also admitted that he talked to Martinez not to give her an opportunity to rebut the charges against her but only to inform her of the decision of the committee. No proof was presented as to when and where an investigation was undertaken, and Kaimo gave vague answers when asked who was investigated. The trial court found Simon, Borromeo, and Kaimo liable for damages for signing Martinez’s termination letter, and Lupisan liable for recommending her termination without verifying the truth of the charges, but dismissed the complaint against the Quezon City Government.

• Personal Liability of Simon: Simon argued that the Court of Appeals erred in ruling him personally liable for damages under Article 27 of the New Civil Code; the complaint neither alleged nor proved that he acted in bad faith, with malice, or with gross negligence; Article 27 refers to an action for damages when a public official or employee neglects to perform his official duty without just cause; he merely performed his duty as Chief Executive of Quezon City empowered by law to hire and fire employees; he even gave Martinez a citation after she was reinstated, indicating the absence of ill-will, bad faith, malice, and gross negligence; he simply acted on the recommendation of the Committee on Review of the Mayor’s Office and could not be faulted for the committee’s errors; and because many personnel were recommended to be purged, it was impossible for him to personally evaluate all of them.
• Moral Damages: Kaimo and Borromeo contended that a claimant of moral damages must satisfactorily prove the existence of the factual basis of the damage and its causal relation to the defendants’ acts; there was no definite finding that they acted with malice or bad faith in terminating Martinez; and when they terminated her, they were of the honest belief that they had sufficiently complied with the requirements imposed under the Freedom Constitution and Executive Order No. 17.
• Exemplary Damages: Kaimo and Borromeo argued that exemplary damages are not recoverable as a matter of right; Simon also argued that it was not shown that Martinez first demanded payment of damages from him before filing the case in order for her to be entitled to exemplary damages.
• Actual Damages: Kaimo and Borromeo contended that no one was appointed or designated to the position vacated by Martinez; she was paid all salaries, allowances, and benefits due her at the time she was out of the service, which sum must be deducted from the amount of actual damages awarded; her termination was upon the strong recommendation of Lupisan, with whom Martinez had a long professional misunderstanding; and no prior misunderstanding existed between them and Martinez.
• Implied Admission: Simon filed a Reply stating that Martinez did not comment on the material arguments of the petition, so the award of damages is erroneous and cannot be sustained, and she did not refute that he was authorized by the Freedom Constitution through Executive Order No. 17 to terminate her employment upon the grounds cited in the executive order. Kaimo and Borromeo further argued in their Reply that Martinez’s failure to rebut the alleged errors committed by the Court of Appeals meant that she impliedly admitted the correctness of their petition.

• Bad Faith and Conspiracy: Martinez countered that the Court of Appeals correctly affirmed the Regional Trial Court’s ruling awarding her damages because petitioners were guilty of bad faith when they conspired with one another in dismissing her without just cause and due process.
• Article 27 of the Civil Code: Martinez argued that Article 27 of the Civil Code is broad and general enough to include all kinds of malfeasance, misfeasance, and nonfeasance of public officers causing material and moral damage to another.
• Due Process and Summary Procedure: Martinez maintained that petitioners refused without justifiable cause to specify the grounds and causes of her dismissal, to afford her the minimum requirements of summary procedure embodied in the Civil Service Law, and to afford her the right to confront the witnesses against her, all of which are part of the duties of government officials to uphold and defend the Constitution, to do justice to every man, and to comply with the laws of the land.
• Factual Issues: Martinez argued that the petitions raise factual issues which may not be raised in a petition for review on certiorari, and that the decision of the Court of Appeals affirming the findings of the Regional Trial Court rests on solid legal and factual grounds.
• Affirmation of the CA Decision: Martinez no longer questioned the absence of liability of the Quezon City Government and prayed that the Court of Appeals Decision be affirmed in toto.

• Justification and Due Process in Termination: Whether Martinez’s separation from the career civil service under Proclamation No. 3 and Executive Order No. 17 was justified and effected with due process.
• Personal Liability of Simon: Whether Simon is personally liable for damages under Article 27 of the Civil Code for signing the termination letter absent proof of bad faith, malice, or gross negligence.
• Moral Damages: Whether the award of P200,000.00 as moral damages is proper.
• Exemplary Damages: Whether the award of P50,000.00 as exemplary damages is proper.
• Actual Damages: Whether the award of P31,940.00 as actual damages is proper.
• Attorney’s Fees: Whether the award of P30,000.00 as attorney’s fees is proper.

• Justification and Due Process in Termination: No. The termination was not justified; petitioners failed to substantiate the grounds for separation and to observe due process under Executive Order No. 17.
• Personal Liability of Simon: Yes. Simon, having signed the termination letter and joined in the unjustified separation, was properly held liable for damages; the lower courts’ award against him was affirmed.
• Moral Damages: Yes. The P200,000.00 award is proper under the Civil Code, considering the injury to Martinez and her social standing.
• Exemplary Damages: Yes. The P50,000.00 award is proper to serve as an example or correction for the public good.
• Actual Damages: No. The P31,940.00 award is deleted because Martinez admitted receiving her salary for the separation period and the attorney’s fees awarded cover her litigation expenses.
• Attorney’s Fees: Yes. The P30,000.00 award is proper because Martinez was compelled to litigate due to petitioners’ wrongful act.

• Justification and Due Process in Termination: Article III, Section 2 of the Freedom Constitution allowed the President to validly remove government employees, elected or appointed, even without cause, and no ground or cause was required for removal of any employee or official elected or appointed under the 1973 Constitution. However, Executive Order No. 17 was issued to protect career civil servants whose qualifications and performance met the standards of service demanded by the New Government and to ensure that only those found corrupt, inefficient, and undeserving were separated from the service. Section 1 required that separation or replacement be made only for justifiable reasons and that the ministry concerned adopt rules and procedures for review and assessment. Section 3 specified the grounds for separation, including probable cause for violation of the Anti-Graft and Corrupt Practices Act as determined by the Ministry Head concerned and any other analogous ground showing that the incumbent was unfit to remain in the service or that separation or replacement was in the interest of the service. Petitioners claimed that Martinez’s termination was justified under grounds 2 and 5, but the records showed that they failed to substantiate those grounds. Kaimo could only point to Lupisan as the one who recommended Martinez’s termination, but Lupisan denied making such recommendation. Kaimo admitted that he talked to Martinez only to inform her of the committee’s decision, not to give her an opportunity to rebut the charges. Martinez asked Simon for the specific charges against her, but instead received a letter dismissing her on vague and general grounds. Petitioners also failed to show that they conducted the investigation required under the Guidelines for the Review Committee of the Office of the Mayor, which they themselves signed; no proof was presented as to when and where such investigation was undertaken, and Kaimo gave vague answers. Although Simon, as then OIC Mayor, had the power to dismiss government employees even without any formal investigation under Section 1 of Executive Order No. 17, that power could be exercised only where the charges against the employees were serious, the evidence of guilt was strong, and the department head exercised sound discretion in dismissing the employee because of wrongful acts and was not prompted by whim or caprice. Here, the charges were vague and couched in general terms, no evidence of guilt was presented, and there was no showing that the officials concerned exercised sound discretion. Only those found corrupt, inefficient, and undeserving should be separated from the service, and petitioners failed to show that Martinez fell under any of those categories. As petitioners failed to justify the termination and show that they observed due process, the award of damages in Martinez’s favor was warranted.
• Personal Liability of Simon: The award of damages against Simon was affirmed as part of the finding that petitioners failed to justify the termination of Martinez and to show that they observed due process. Simon signed the termination letter, and his defense that he merely acted on the recommendation of the Committee on Review did not overcome the absence of substantiated grounds and due process. The Court found the petitions with merit only as to the actual damages awarded by the lower courts, leaving intact the lower courts’ rulings holding Simon liable for moral and exemplary damages and attorney’s fees.
• Moral Damages: Moral damages are awarded to compensate for physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injuries unjustly caused to the claimant. Although incapable of pecuniary estimation, the amount must be proportional to the suffering inflicted, and the social standing of the aggrieved party is essential to determining the proper amount so that the goal of enabling her to obtain means, diversions, or amusements to restore her to the status quo ante would be achieved. Except when the amount awarded is scandalously excessive, trial courts are given discretion in determining the amount. The Court found the award of P200,000.00 as moral damages to be proper. The Court of Appeals had found that Martinez was a career civil servant who rose from the ranks, was a recipient of numerous awards, held prestigious positions in different organizations, and enjoyed a good reputation with her lawyer husband and nine children who were all professionals; she felt sick and her blood pressure rose when she learned of the letter summarily separating her from the service; and the termination affected her bid for reelection as President of the Philippine Nurses Association.
• Exemplary Damages: Exemplary damages are awarded to set an example for the public good and are given in accordance with the sound discretion of the court. The Court found the award of P50,000.00 as exemplary damages to be warranted in this case.
• Actual Damages: The Regional Trial Court failed to explain how it came up with the amount of P31,940.00. Martinez admitted in her testimony that she could not present receipts to support her claim for actual damages, explaining that her claim consisted of salaries due her covering the period of her unjust separation from the service as well as expenses of litigation. In her Memorandum submitted to the Regional Trial Court, she admitted that, pending trial, she had been paid her salary covering the period of her separation from work. She still asked for actual and necessary expenses of litigation broken down as P24,500.00 as appearance fees, P6,940.00 for transcripts, and an unspecified amount for court fees, and she no longer prayed for a separate award for attorney’s fees. In view of her admission that she had already received her salary covering the period in question, and because the award of attorney’s fees covered the expenses of litigation she incurred as a result of the wrongful act of petitioners, the Court deemed it proper to delete the award of actual damages.
• Attorney’s Fees: Attorney’s fees are awarded when a party is compelled to litigate or to incur expenses to protect its interest by reason of an unjustified act of another. The award of attorney’s fees was proper because Martinez was forced to go to court because of the wrongful act of petitioners.

• Executive Order No. 17 and Career Civil Service Protection — Although Article III, Section 2 of the Freedom Constitution permitted removal of government employees even without cause, Executive Order No. 17 limited separation to justifiable reasons and specified the grounds for separation to protect career civil servants whose qualifications and performance met the standards of public service. The Court applied this by holding that petitioners failed to substantiate grounds 2 and 5 and to show that Martinez was corrupt, inefficient, or undeserving.
• Due Process in Summary Dismissal — Even where a formal investigation is not required under Section 1 of Executive Order No. 17, dismissal may be made only where the charges against the employee are serious, the evidence of guilt is strong, and the department head exercised sound discretion in dismissing the employee because of wrongful acts and was not prompted by whim or caprice. The Court applied this because the charges were vague, no evidence of guilt was presented, and no sound discretion was shown.
• Moral Damages — Moral damages compensate for physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injuries; the amount must be proportional to the suffering inflicted and the social standing of the aggrieved party, with trial courts given discretion unless the amount is scandalously excessive. The Court affirmed the award of P200,000.00.
• Exemplary Damages — Exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated, or compensatory damages, and are given in accordance with the sound discretion of the court. The Court affirmed the award of P50,000.00.
• Actual Damages — Actual damages must be substantiated; salaries already paid and litigation expenses covered by attorney’s fees cannot be recovered as actual damages. The Court deleted the award of P31,940.00.
• Attorney’s Fees — Attorney’s fees may be awarded when a party is compelled to litigate or to incur expenses to protect its interest by reason of an unjustified act of another. The Court affirmed the award of P30,000.00.
• Liability of Public Officers for Unjustified Termination — Public officers who effect an unjustified separation and fail to observe due process may be held liable for moral and exemplary damages and attorney’s fees. The Court affirmed the liability of Simon, Kaimo, and Borromeo.

• "The words of Executive Order No. 17 are clear. Only those found corrupt, inefficient and undeserving should be separated from the service." — This states the controlling limitation on the power to separate career civil servants and supports the finding that Martinez was not shown to fall under any of the categories for valid separation.
• "Although under Sec. 1 of Executive Order No. 17, Simon as then OIC Mayor, had the power to dismiss government employees even without any formal investigation, the same may be done only in cases where the charges against the employees were serious, the evidence of guilt is strong and when it is shown that the department head exercised sound discretion in dismissing the employee because of wrongful acts and was not prompted by whim or caprice." — This defines the standard for summary dismissal without formal investigation and explains why the termination was invalid.
• "As petitioners failed to justify the termination of Martinez and show that they observed due process, the award of damages in Martinez’s favor is warranted." — This is the ratio decidendi for the affirmance of moral and exemplary damages and attorney’s fees.
• "In view of Martinez’s admission that she has already received her salary covering the period in question, and the award of attorney’s fees in this case covers the expenses of litigation which she incurred as a result of the wrongful act of petitioners, the Court deems it proper to delete the award of actual damages from the sum of damages to be given her." — This states the ground for the only modification made by the Supreme Court to the Court of Appeals’ judgment.

• Dario vs. Mison, G.R. No. 81954, August 8, 1989, 176 SCRA 84 — Cited for the rule that under the Freedom Constitution the President could validly remove government employees even without cause, and that Executive Order No. 17 limited this power by requiring that only the corrupt, inefficient, and undeserving be separated from the service.
• Radia vs. Review Committee Under Executive Order No. 17, No. L-78973, January 29, 1988, 157 SCRA 749 — Cited for the proposition that no ground or cause was required for removal under the 1973 Constitution, and for the definition of a ministry under Executive Order No. 17.
• Ontiveros vs. Court of Appeals, G.R. No. 145401, May 7, 2001, 357 SCRA 592 — Cited for the rule that Executive Order No. 17 provided grounds for separation and limits on what otherwise would be absolute discretion, establishing safeguards against indiscriminate dismissals.
• Sto. Domingo vs. Ordoñez, No. L-81760, September 29, 1988, 166 SCRA 123 — Cited for the standard that dismissal even without formal investigation is proper only where the charges are serious, the evidence of guilt is strong, and the department head exercised sound discretion, not whim or caprice.
• Samson vs. Bank of Philippine Islands, 453 Phil. 577 (2003) — Cited for the rule that trial courts have discretion in determining moral damages, unless the amount awarded is scandalously excessive.
• Solidbank Corp. vs. Arrieta, G.R. No. 152720, February 17, 2005, 451 SCRA 711 — Cited for the rule that exemplary damages are awarded to set an example for the public good.
• Pilipinas Shell vs. John Bordman Ltd. of Iloilo, Inc., G.R. No. 159831, October 14, 2005, 473 SCRA 151 — Cited for the rule that exemplary damages are given in accordance with the sound discretion of the court and for the award of attorney’s fees when a party is compelled to litigate due to another’s unjustified act.

• Article III, Section 2, Proclamation No. 3 (Freedom Constitution) — Provided that all elective and appointive officials under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors. Under this provision, the President could validly remove government employees, elected or appointed, even without cause. It served as the constitutional backdrop, but its operation was limited by Executive Order No. 17.
• Section 1, Executive Order No. 17 — Required the Head of each Ministry to see to it that separation or replacement of officers and employees is made only for justifiable reasons, to prevent indiscriminate dismissals of personnel in the career civil service whose qualifications and performance meet the standards of public service, and to adopt rules and procedures for review and assessment. Applied because petitioners failed to show justifiable reasons and the required review.
• Section 3, Executive Order No. 17 — Enumerated the grounds for separation or replacement, including existence of a probable cause for violation of the Anti-Graft and Corrupt Practices Act as determined by the Ministry Head concerned and any other analogous ground showing that the incumbent is unfit to remain in the service or that separation or replacement is in the interest of the service. Applied because petitioners invoked grounds 2 and 5 but failed to substantiate them.
• Section 9, Executive Order No. 17 — Provided that if the questioned separation from the service is reversed, the petitioner shall be reinstated to his former position or reappointed to a position of comparable rank and salary, and shall be considered on vacation leave of absence without pay during the time he was out of the service. Applied by the City Attorney to deny Martinez salary and allowances for the separation period; the Court considered her admission that she had already received her salary in deleting actual damages.
• Article 27, Civil Code — Provides that any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter without prejudice to any disciplinary administrative action. Invoked by Martinez and cited by the Court of Appeals in affirming liability; Simon challenged its application.
• Article 2217, Civil Code — Defines moral damages to include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Applied to affirm the award of moral damages.
• Article 2219(10), Civil Code — Allows moral damages to be recovered in cases referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Applied to support the award of moral damages.
• Article 2229, Civil Code — Provides that exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated, or compensatory damages. Applied to affirm the award of exemplary damages.
• Article 21, Civil Code — Provides that any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs, or public policy shall compensate the latter for damages. Invoked by Martinez in her complaint.
• Section 4, Republic Act No. 537 — Provides that the city shall not be liable for damages for the failure of any city officer to enforce the provisions of the Act or any law or ordinance, or for the negligence of said officer while enforcing or attempting to enforce the same. Applied to dismiss the complaint against the Quezon City Government; Martinez no longer questioned this on appeal.

Consuelo Ynares-Santiago (Chairperson), Romeo J. Callejo, Sr., and Minita V. Chico-Nazario.