Umali vs. Guingona Jr.

The Court may, in the exercise of its equity powers, consider supervening events—such as the dismissal of criminal charges by the Ombudsman, the complainant agency's manifestation of disinterest in pursuing the case, and the Solicitor General's position that no basis remains for the administrative order—as grounds to lift an administrative dismissal order, notwithstanding the correctness of the appellate court's ruling on the merits.

Petitioner Osmundo G. Umali was appointed Regional Director of the Bureau of Internal Revenue by President Fidel V. Ramos on October 27, 1993, and was assigned to Manila and then Makati. As a presidential appointee, he came under the direct disciplining authority of the President, but he claimed to be a Career Executive Service Officer (CESO) eligible entitled to tenurial protection under the Civil Service Decree. The Presidential Commission Against Graft and Corruption (PCAGC) was the investigatory body to which the complaint against him was referred.

Osmundo G. Umali was appointed Regional Director of the Bureau of Internal Revenue on October 27, 1993, by President Fidel V. Ramos, serving in Manila from November 29, 1993 to March 15, 1994, and in Makati from March 16, 1994 to August 4, 1994. On August 1, 1994, President Ramos received a confidential memorandum against Umali alleging violations of internal revenue laws, rules, and regulations during his incumbency as Regional Director. The charges included: issuance of Letters of Authority (LAs) despite the ban in Revenue Memorandum Order No. 31-93; termination of tax cases without required investigation reports; unlawful issuance of LAs to taxpayers who were then convinced to avail of the BIR's compromise and abatement program; continued issuance of antedated LAs despite the devolution of authority under RMO 26-94; and enlisting the support of other regional directors to question the devolution of BIR functions.

On August 2, 1994, President Ramos authorized the preventive suspension of Umali and referred the complaint to the PCAGC for investigation. The PCAGC directed Umali to file his answer and appear at a hearing set for August 25, 1994. Umali filed his Answer on August 23, 1994, appeared with counsel on the hearing date, and was granted five days to file a supplemental answer. At the August 30, 1994 hearing, the parties agreed to submit the case for resolution upon presentation of their respective memoranda. After evaluating the evidence, the PCAGC issued a Resolution on September 23, 1994, finding prima facie evidence to support six of the twelve charges, including violations of RMOs 31-93 and 27-94, and falsification of official documents under Article 171 of the Revised Penal Code.

On October 6, 1994, President Ramos issued Administrative Order No. 152 dismissing Umali from the service with forfeiture of retirement and all benefits. Umali's motion for reconsideration was denied on November 28, 1994. He then filed a Petition for Certiorari, Prohibition, and Injunction before the RTC of Makati, alleging violations of his constitutional rights to due process and security of tenure. The RTC initially dismissed the petition, but on reconsideration, the case was re-raffled to Judge Teofilo L. Guadiz Jr., who issued an Amended Decision on December 13, 1995, granting the petition. The respondents appealed to the Court of Appeals, which reversed the Amended Decision on April 8, 1997.

Meanwhile, the criminal aspect of the cases was referred to the Office of the Ombudsman. On July 25, 1995, Ombudsman Investigators issued a Resolution finding probable cause and recommending the institution of criminal cases for Falsification of Public Documents (13 counts) and Open Disobedience (2 counts). However, upon Umali's motion for reconsideration, Special Prosecution Officer II Lemuel M. De Guzman set aside the Resolution and dismissed the charges in an Order dated November 5, 1996, approved by Ombudsman Aniano Desierto. On August 10, 1998, BIR Commissioner Beethoven L. Rualo sent a letter to the Solicitor General stating that the BIR was no longer interested in pursuing the case against Umali, based on the comment and recommendation of the BIR Legal Department.

• Security of Tenure: Petitioner contended that as Regional Director of the BIR, he belongs to the Career Executive Service and, although a presidential appointee, he is a career executive service officer (CESO) with tenurial protection who can only be removed for cause, citing Larin vs. Executive Secretary.
• Loss of Confidence as Ground: Petitioner maintained that under the Administrative Code of 1987, loss of confidence is not one of the legal causes or grounds for removal of a career executive service officer, and thus his dismissal on that ground violated his right to security of tenure.
• Due Process: Petitioner alleged that his suspension and dismissal from the service violated his constitutional right to due process of law.
• Constitutionality of PCAGC: Petitioner theorized, in his motion for reconsideration before the RTC, that the PCAGC is an unconstitutional office without jurisdiction to conduct the investigation against him.
• Effect of Ombudsman Resolution: Petitioner raised the issue of whether, in light of the Ombudsman Resolution dismissing the charges against him, there is still basis for his dismissal with forfeiture of benefits.

• Due Process Observed: Respondents maintained that petitioner was not denied due process, as records show he filed his answer and other pleadings and attended the hearings before the PCAGC.
• No Security of Tenure Violation: Respondents argued that petitioner's claim of CESO eligibility was anemic of evidentiary support, as he failed to adduce sufficient evidence to prove he was a CESO eligible.
• Belated Constitutional Challenge: Respondents contended that the issue of PCAGC's constitutionality was raised too late, as it was only posed in petitioner's motion for reconsideration before the RTC.

• Security of Tenure: Whether Administrative Order No. 152 violated petitioner's right to security of tenure.
• Due Process: Whether petitioner was denied due process in the issuance of Administrative Order No. 152.
• Constitutionality of PCAGC: Whether the PCAGC is a validly constituted government agency and whether petitioner can raise the issue of its constitutionality belatedly in his motion for reconsideration of the trial court's decision.
• Effect of Ombudsman Resolution: Whether, in light of the Ombudsman Resolution dismissing the charges against petitioner, there is still basis for petitioner's dismissal with forfeiture of benefits as ruled in Administrative Order No. 152.

• Security of Tenure: No. Petitioner's claim of CESO eligibility was anemic of evidentiary support; it was incumbent upon him to prove that he is a CESO eligible, and his failure to adduce sufficient evidence on the matter was fatal.
• Due Process: No. Petitioner was not denied the right to due process before the PCAGC, as records show that he filed his answer and other pleadings and attended the hearings before the investigatory body.
• Constitutionality of PCAGC: No. The issue of the constitutionality of the PCAGC was only posed by petitioner in his motion for reconsideration before the RTC, and it was certainly too late to raise the said issue for the first time at such a late stage of the proceedings below.
• Effect of Ombudsman Resolution: Yes, but only through the exercise of equity powers. The administrative action against petitioner was taken prior to the institution of the criminal case, and the charges in Administrative Order No. 152 were based on the PCAGC investigation, not the criminal charges before the Ombudsman. However, the Court considered the dismissal of criminal charges, the BIR Commissioner's manifestation of disinterest, and the Solicitor General's position as effective and substantive supervening events warranting the lifting of the dismissal order.

• Security of Tenure: The Court of Appeals ruled correctly on this issue. Petitioner's claim of CESO eligibility lacked evidentiary support. It was incumbent upon him to prove that he is a CESO eligible, but he failed to adduce sufficient evidence on the matter, and his failure to do so was fatal to his claim of tenurial protection.

• Due Process: The Court found that petitioner was not denied due process before the PCAGC. Records showed that petitioner filed his answer and other pleadings with respect to the alleged violations of internal revenue laws and regulations, and he attended the hearings before the investigatory body. His protestation of non-observance of due process was devoid of any factual or legal basis.

• Constitutionality of PCAGC: The issue of the constitutionality of the PCAGC was raised only in petitioner's motion for reconsideration before the RTC. It was too late to raise the issue for the first time at such a late stage of the proceedings below.

• Effect of Ombudsman Resolution: The administrative action against petitioner was taken prior to the institution of the criminal case. The charges included in Administrative Order No. 152 were based on the results of the investigation conducted by the PCAGC and not on the criminal charges before the Ombudsman. However, the Court, in the exercise of its equity powers, considered the dismissal of the charges against petitioner before the Ombudsman, the manifestation by the BIR Commissioner that his office was no longer interested in pursuing the case, and the position taken by the Solicitor General that there was no more basis for Administrative Order No. 152, as effective and substantive supervening events that cannot be overlooked.

• Equity Powers of the Court — The Supreme Court may, in the exercise of its equity powers, consider supervening events that render a dismissal order no longer viable. In this case, the Court considered the Ombudsman's dismissal of criminal charges, the BIR Commissioner's manifestation of disinterest, and the Solicitor General's position as effective and substantive supervening events warranting the lifting of Administrative Order No. 152.

• Security of Tenure for Career Service Officers — Career service officers who enjoy security of tenure may be removed only for cause and in accordance with procedural due process, as provided in Section 36 of P.D. No. 807. However, the claimant must prove his or her eligibility for such protection; failure to adduce sufficient evidence of CESO eligibility is fatal to the claim.

• Belated Constitutional Challenge — An issue of constitutionality raised for the first time in a motion for reconsideration before the trial court is considered raised too late, and the Court will not entertain it at such a late stage of the proceedings.

• "To be sure, petitioner was not denied the right to due process before the PCAGC. Records show that the petitioner filed his answer and other pleadings with respect to his alleged violation of internal revenue laws and regulations, and he attended the hearings before the investigatory body. It is thus decisively clear that his protestation of non-observance of due process is devoid of any factual or legal basis." — This passage establishes the Court's finding on the due process issue, affirming the Court of Appeals' ruling that petitioner was afforded procedural due process.

• "However, petitioner's claim of CESO eligibility is anemic of evidentiary support. It was incumbent upon him to prove that he is a CESO eligible but unfortunately, he failed to adduce sufficient evidence on the matter. His failure to do so is fatal." — This passage articulates the Court's ruling on the security of tenure issue, emphasizing the evidentiary burden on the claimant.

• "However, taking into account the antecedent facts and circumstances aforementioned, the Court, in the exercise of its equity powers, has decided to consider the dismissal of the charges against petitioner before the Ombudsman, the succinct and unmistakable manifestation by the Commissioner of the Bureau of Internal Revenue that his office is no longer interested in pursuing the case, and the position taken by the Solicitor General, that there is no more basis for Administrative Order No. 152, as effective and substantive supervening events that cannot be overlooked." — This passage is the crux of the Court's decision to grant the petition through equity powers despite affirming the Court of Appeals' ruling on the merits.

• Larin vs. Executive Secretary, 280 SCRA 713 — Cited by petitioner to support the theory that a presidential appointee who belongs to the career service of the Civil Service comes under the direct disciplining authority of the President but may only be removed for cause and in accordance with procedural due process. The Court acknowledged this principle but distinguished it on the evidentiary ground that petitioner failed to prove his CESO eligibility.

• Section 16, Article VII, Constitution — The provision conferring upon the President the power to appoint, from which the power to remove is inherent. The Court noted this principle in the context of the President's disciplining authority over presidential appointees.
• Section 36, P.D. No. 807 (Civil Service Decree of the Philippines) — The provision emphasizing that career service officers and employees who enjoy security of tenure may be removed only for any of the causes enumerated in said law. The Court acknowledged this protection but found petitioner failed to prove his eligibility.
• Section 46, Book V, Title I, Subtitle A, Revised Administrative Code of 1987 — The provision enumerating the legal causes or grounds for removal of career service officers. Petitioner argued that loss of confidence is not among these causes.
• Article 171, Revised Penal Code — The provision on falsification of official documents, under which the PCAGC found prima facie evidence against petitioner for the issuance of LAs with false dates and for antedating LAs.

• Gonzaga-Reyes, J. — Concurred with the majority opinion.
• Romero, Vitug, and Panganiban, JJ. — Concurred in the result.

N/A — No dissenting opinions were noted in the provided case text.