Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 95398 August 16, 1991

MARIO R. MELCHOR, petitioner,
vs.
COMMISSION ON AUDIT, respondent.
Polistico Law Office for petitioner

GUTIERREZ, JR., J.:p

Is the petitioner personally liable for the amout paid for the construction of a public school building on
the ground that the infrastructure contract is null and void for want of one signature?
The facts are uncontroverted.
On July 15, 1983, petitioner Mario R. Melchor, in his capacity as Vocational School Administrator of
Alangalang Agro-Industrial School of Alangalang, Leyte, entered into a contract with Cebu Diamond
Construction (hereinafter referred to as contractors for the construction of Phase I of the home
Technology Building of said school for the price of P488,000. Pablo Narido, (thief accountant of the
school, issued a certificate of availability of funds to cover the construction cost. Narido, however,
failed to sign as a Witness to the contract, contrarily to the requirement of Section I of Letter of
Instruction (LOI) No. 968.
The contract was approved by the then Minister of Education, Culture and Sports Onofre D. Corpuz.
The relevant parts of the contract are quoted below:
That for and in consideration of the sum of FOUR HUNDRED EIGHTY EIGHT
THOUSAND PESOS (P488,000.00), Philippine Currency, the CONTRACTOR, at his
own proper cost and expense willfully and faithfully perform all works, and unless
otherwise provided, furnish all labor, materials, equipment necessary for the
construction and completion of Phase I of the Home Technology Building for the
Alangalang Agro-Industrial School of Alangalang, Leyte to be completed in
accordance with the plans and specifications and all terms, conditions and
instructions contained in the general and special conditions of contract, as well as
those contained in the Notice to Bidders, Tenderers or Advertisement, Instruction to
Bidders Tenderers, Supplemental Specifications, Bond Articles, and other essential
related documents, which are made and acknowledged as Integral parts of this
Agreement, by reference and/or Incorporation, including the permission of
Administrative Order No. 81 of the President, dated January 17, 1964, ... (Rollo, p.
25)
While the construction of Phase I was under way, the contractor, in a letter dated November 8, 1983
addressed to Melchor, sought an additional charge of P73,000 equivalent to 15% of the stipulated
amount due to an increase in the cost of labor and construction materials.
In a letter dated November 17, 1983, the petitioner referred the contractor's request for additional
charge to the Regional Director, Ministry of Education, Culture and Sports (MECS). The petitioner in
said letter asked for approval of the contractor's additional charge, pointing out that such additional
charge shall be taken from the 1984 non-infrastructure capital outlay and part of the 1984
maintenance and operating expenses. The petitioner, in a second Indorsement dated November 22,
1983, requested the approval by the COA Regional Director in Tacloban City of the contractor's
request for adjustment of the cost of the contract.

In an Indorsement dated November 17, 1983, Servillano C. Dela Cruz, Acting Assistant Regional
Director ' MECS Regional Office No. VIII, Tacloban City, approved the contractor's request for
additional charge subject, however, to the availability of funds and the imprimatur of the Resident
Auditor of the School. On its part, the COA Regional Office No. VIII, Tacloban City, through Regional
Director, Sopronio Flores, Jr., advanced the view that "the approval of the police escalation rests on
the Minister or head of the agency concerned. Our participation in this regard shall be on the postaudit of transactions as emphasized under COA Circular No. 82195."
Meanwhile, the contractor, anticipating that it could not meet the deadline for the project, requested
a series of extensions which the petitioner granted. However, on April 10, 1984, the contractor gave
up the project mainly to save itself from further losses due to, among other things, increased cost of
construction materials and labor.
At the time the contractor ceased working on the project, it had accomplished only 61% of the
construction work valued at P344,430.88. However, as of September 13, 1984, the contractor had
been paid the total amount of P515,305.60. The excess paid on the value of the 61%
accomplishment costing approximately P172,003.26 represented the extra work done by the
contractor which was found necessary.
Consequently, the petitioner wrote a letter dated September 19, 1984 to Ms. Gilda Ramos, COA
Resident Auditor of the school, requesting the latter to advise the former on whether to pursue
condoning the contract or institute a legal action for breach of contract against the contractor. In turn,
Ms. Ramos referred the matter to COA Regional Director in Tacloban City, Cesar A. Damole who in
a third Indorsement dated April 8, 1985, directed Ms. Ramos to disallow the payment of P515,305.60
in post-audit on the ground that the contract was null and void for lack of signature of the chief
accountant of the school as witness to it, as required under Section 1 of LOI 968, for which reason
the petitioner was made personally liable for the amount paid to the contractor.
On May 3, 1985, the petitioner wrote a letter addressed to the Regional Director, COA Regional
Office No. VIII, Tacloban City, seeking reconsideration of his directive to the Resident Auditor of the
school to disallow the payment of P515,305.60 to the contractor. The petitioner sought
reconsideration on the following grounds: a) the Certificate of Availability of Funds signed by the
chief accountant of the school, being an integral part, of the contract, substantially complied with the
requirement of LOI 968 that the signature of said accountant must be affixed as witness to the
contract, b) the petitioner did not exceed his authority because the contract was approved by the
head of the agency concerned c) the Resident Auditor of the school who had been furnished a copy
of the contract did not object to the contract because of that flaw; and d) the petitioner religiously
complied with the provisions of P.D. 1445 (otherwise known as "The Government Auditing Code of
the Phils."), specifically, Sections 85 and 86 as to the requirements in the execution of a government
contract.
In a first Indorsement dated July 17, 1985, COA Regional Director of Tacloban City, Cesar A.
Damole denied the petitioner's motion for reconsideration. Immediately, petitioner Melchor appealed
to the COA Head Office which dismissed his appeal for lack of merit. The COA Head Office likewise
denied the petitioner's requests for reconsideration.
Hence, this petition.
The sole issue of this Court's consideration is whether or not petitioner Melchor should be held
personally liable for the amount of P515,305.60 paid to the contractor. This P515,305.60 may be
broken down into:
1) P344,430.80 representing 6l% of equivalent payment for the work done by the contractor within
the contract specifications, and
2) P172,003.206 representing payment for extra work orders, not included in the contract
specifications, which were incurred to make the building structure strong.
The amounts of P344,430.80 and P172,003.26, when added together, do not equal P515,305.60.
The records do not explain the reason for the discrepancy. At any rate, the contending parties do not
question the correctness of these amounts.

Respondent COA maintains that the contract entered into by the petitioner with Cebu Diamond
Construction is null and void since the chief accountant did not affix his signature to the contract, in
violate on of the requirements of LOI 968.
Section 1 of LOI 968, dated December 17, 1979, provides:
1. All contracts for capital projects and for the supply of commodities and services,
including equipment, maintenance contracts., and other agreements requiring
payments which are chargeable to agency current operating or capital expenditure
funds, shall be signed by agency heads or other duly authorized official only when
there are available funds. The Chief Accountant of the contracting agency shall sign
such contracts as witness and contracts without such witness hall be considered as
null and void.
According to COA, since there was no compliance with the above provision, then the amount of
P344,430.80 should be disallowed iii post-audit and the petitioner should be personally able for said
amount.
The petitioner reasons that the absence of the accountant's signature as witness to the contract
should not militate against its validity. He cites Section 86 of PD 1445, which states:
Certificate Showing Appropriation to Meet Contract ... no contract involving the
expenditure of public fund by any government agency shall be entered into or
authorized unless the proper accounting official of the agency concerned shall have
certified to the officer entering into the obligation that funds have been duly
appropriated for the purpose and that the amount necessary to cover the proposed
contract for the current fiscal year is available for expenditure on account thereof,
subject to verification, modification by the auditor concerned. The certificate, signed
by the proper accounting official and the, auditor who verified it, shall be attached to
and become an integral part of the proposed contract, and the sum so certified shall
not thereafter be available for expenditure for any other purpose until the obligation
of the government agency concerned under the contract is fully extinguished.
Petitioner Melchor urges that the issuance by the chief accountant of a "Certificate of Availability of
Funds" compensates for the latter's non-signing as a contract witness since under Section 86 of PD
1445, the certificate is attached to and becomes an integral part of the contract. He argues that there
was, in effect, substantial compliance with the mandate of LOI 968.
Moreover the petitioner contends that assuming arguendo that the contract is null and void, he
should still not be made personally accountable for the amount paid to the contractor. He cites this
Court's resolution in Royal Trust Corporation v. Commission on Audit, G.R. No. 84202, November
22, 1988. In that case. despite the absence of a specific covering appropriation as required under
COA Resolution No. 86-58, the contractor was allowed by the Court to be compensated on a
quantum meruit basis.
Under the circumstances of this case, the Court finds that the contract executed by the petitioner
and Cebu Diamond Construction is enforceable and, therefore, the petitioner should not be made to
personally pay for the building already constructed.
LOI 968 and Sections 85 and 86 of PD 1445 implement and reinforce the constitutional mandate that
"No money shall be paid out of the Treasury except in pursuance of an appropriation made by law"
(Constitution, Article VI, Section 29 [1]).
Under Sections 85 and 86 of PD 1445, before a government agency can enter into a contract
involving expenditure of government funds there must be an appropriation for such expenditure and
the proper accounting official must certify that funds have been appropriated for the purpose. Under
LOI 968, the chief accountant of the government agency, as the verifier of the availability of funds,
must sign such contracts as witness. The uniform intent of these provisions is to ensure that
government contracts are signed only when supported by available funds.
In the case before us, the chief accountant issued a certificate of availability of funds but failed to
sign the contract as witness. But since Section 86 states that the certificate shall be attached to and
become an integral part of the proposed contract, then the failure of the chief accountant to affix his

signature to the contract was somehow made up by his own certification which is the basic and more
important validating document. The contract moreover provided that "other essential related
documents xxx are made and acknowledged as integral parts of this agreement, by reference and/or
incorporation." This is not to say that the heads of government offices or institutions should not read
carefully the fine print of official regulations governing contracts. However, under the peculiar
circumstances of this case, we agree with the petitioner's view that there was substantial compliance
with the requirements of LOI 968 in the execution of the contract. He has not been charged under
some regulations governing negligence in not going over auditing and accounting rules more
carefully. But even assuming some kind of administrative responsibility for not being more careful,
he should not be made to pay for a school building already constructed and serving an urgent need
in his province.
It is a rule of statutory construction that the court may consider the spirit and reason of a statute
where a literal meaning would lead to absurdity, contradiction, injustice or would defeat the clear
purpose of the lawmakers. (People v. Manantan 5 SCRA 684 [1962]) For this Court to draw a narrow
and stringent application of LOI 968 would be to lose sight of the purpose behind its enactment. The
rationale for LOI 968, which is to ensure that there are available funds to finance a proposed project,
was already served by the chief accountant's issuance of a certificate of fund availability.
Additionally, Section 2 of LOI 968 provides:
2. It shall be the responsibility of the Chief Accountant to verify the availability of
funds, as duly evidenced by programmed appropriations released by the Ministry of
Budget and received by the agency, from which such contract shall be ultimately
payable. His signature shall be considered as constituting a certification to that effect.
(Emphasis Supplied)
Since, under the above proviso, the accountant's signature shall have the effect of a certification,
then it may be inferred that the accountant's certification, not his signature as a contract witness, is
the more reliable indicium of fund availability.
What further bolsters the contract's validity is the fact that the original contract for P488,000 and the
15% price escalation of P73,000 bore the approval of the Minister of Education, Culture and Sports
as required by COA Circular No. 83-101-J (dated June 8, 1983) and the Implementing Rules of PD
1594. Under COA Circular 83-101-J, the Minister of Education, Culture and Sports has the authority
to approve infrastructure projects not exceeding P2 Million. Under Section III, CIII of the
Implementing Rules of PD 1594, the Minister is empowered to approve contract price escalation not
exceeding 18% of the original contract price.
Moreover, under COA Circular No. 76-34 dated July 15,1976, within 5 days from receipt of a copy of
the contract, the COA is required to call the attention of management regarding defects or
deficiencies of the contract and suggest such corrective measures as are appropriate and warranted
to facilitate the process of the claim upon presentation. In this case, respondent COA does not deny
the petitioner's claim that it was furnished copies of the contract, together with supporting
documents, a few days after approval thereof by the Minister of Education, Culture and Sports. If the
respondent had complied with this requirement, then the absence of the accountant's signature as a
witness to the contract could have been remedied. COA was also negligent.
No less compelling than the foregoing reasons is the undisputed fact that the construction of the
Home Technology Building had long been completed and that the building is now being utilized as
part of the Alangalang Industrial School. In People v. Purisima 86 SCRA 542 (1978), we held that
there exists a valid presumption that undesirable consequences were never intended by a legislative
measure, and that a construction of which the statute is fairly susceptible is favored, which will avoid
all objectionable, mischievous, indefensible, wrongful, evil and injurious consequences. In the
present case we consider it highly inequitable to compel the petitioner, who had substantially
complied With the mandate of LOI 968, to shoulder the construction cost of the building when it is
not he, but the government, which is reaping benefits from it.
The Court therefore rules that respondent COA erred in disallowing in audit the amount of
P344,430.88.
With respect to the remaining P12,003.26 paid by the petitioner to the contractor for extra work
done, the COA reasons that the extra work done. being more than 25% of the escalated original

contract price, was null and void because no supplemental agreement was executed. The
respondent cites the implementing rules and regulations of PD 1594 which provide:
5. A separate supplemental agreement may be entered into for all change orders or
extra work orders if the aggregate amount exceeds 25% of the escalated original
contract price. (III CI paragraphs 5;) (Emphasis supplied).
Under the facts of this case, we adjudge that respondent COA is not without legal basis in
disallowing the P172,003.26 payment for the extra work orders. However, since the word "may" was
used in the Decree then the requirement of a supplemental agreement under all circumstances may
not always be mandatory. There is no need to go into any possible exceptions because we find the
rule applicable in this case.
Under COA Circular 83-101-J, supra, the Minister of Education, Culture and Sports has the authority
to approve extra work orders or other variation orders not exceeding 50% of the original contract
price or P1 Million whichever is less. In this case, there is no showing that the extra work order was
approved by the Minister.
Moreover, a variation order (which may take the form of a change order, extra work or supplemental
agreement) is a contract by itself and involves the expenditure of public funds to cover the cost of
the work called for thereunder. (Fernandez, A Treatise on Government Contracts under Philippine
Law, 115-116 [1985]) As such, it is subject to the restrictions imposed by Sections 85 and 86 of PD
1445 and LOI 968-COA Circular No. 80-122, dated January 15, 1980, likewise ensures that an extra
work order is approved only when supported by available funds. Again, the petitioner has not
presented proof of an appropriation to cover the extra work order.
For a failure to show the approval by the proper authority and to submit the corresponding
appropriation, We declare the contract for extra works null and void. Section 87 of PD 1445 states:
Any contract entered into contrary to the requirements of the two immediately
preceding sections shall be void, and the officer or offices entering into the contract
shall be liable to the government or other contracting party for any consequent
damage to the same extent as if the transaction had been wholly between private
parties. (Emphasis supplied)
This does not mean, however, that the petitioner should be held personally liable and automatically
ordered to return to the government the full amount of P172,003.26.
As previously discussed, it would be unjust to Order the petitioner to shoulder the expenditure when
the government had already received and accepted benefits from the utilization of the building.
In Royal Trust Construction v. Commission on Audit, supra, cited by the petitioner, the Court, in the
interest of substantial justice and equity, allowed payment to the contractor on a quantum
meruit basis despite the absence of a written contract and a covering appropriation.
In a more recent case, Dr. Rufino O. Eslao v. Commission on Audit, G.R. No. 89745, April 8, 1991,
the Court directed payment to the contractor on a quantum meruit basis despite the petitioner's
failure to undertake a public bidding. In that case, the Court held that "to deny payment to the
contractor of the two buildings which are almost fully completed and presently occupied by the
university would be to allow the government to unjustly enrich itself at the expense of another.
Where payment is based on quantum meruit the amount of recovery would only be the reasonable
value of the thing or services rendered regardless of any agreement as to value. (Tantuico, State
Audit Code of the Philippines Annotated, 471 [1982])
Although the two cases mentioned above contemplated a situation where it is the contractor who is
seeking recovery, we find that the principle of payment by quantum meruit likewise applies to this
case where the contractor had already been paid and the government is seeking reimbursement
from the public official who heads the school. If, after COA determines the value of the extra works
computed on the basis of quantum meruitit finds that the petitioner made an excess or improper
payment for these extra works, then petitioner Melchor shall be liable only for such excess payment.

WHEREFORE, the petition is GRANTED. The decision of the respondent COA denominated as 11th
Indorsement dated November 11, 1988 and its resolution dated July 31, 1990 are hereby
REVERSED and SET ASIDE. Respondent COA is directed to allow in post-audit the payment of
P344,430.80. Respondent COA is likewise directed to determine on a quantum meruit basis the
value of the extra works done, and after such determination, to disallow in post-audit the excess
payment, if any, made by the petitioner to the contractor. The petitioner shall be personally liable for
any such excess payment.
SO ORDERED.

IBAEZ, Ildebrando F.
Re: Appeal; Designation;
Entitlement to Salary
x------------------------------------x
RESOLUTION NO. 02-0309
Ildebrando F. Ibaez, an employee of the Government Service Insurance
System (GSIS), appeals from the decision of the Civil Service Commission National Capital Region (CSC-NCR) denying his request for reconsideration of the
opinion rendered by the CSC-GSIS Field Office, which denied his claim for the
payment of salaries corresponding to the position to which he was earlier
designated.
In the assailed decision, the CSC-NCR sustained the adverse position taken
by the CSC-GSIS Field Office respecting the entitlement of Ibaez to the salaries of
Executive Assistant IV, the position to which he was designated, saying that:
Your reference to the provision of Section 17, Chapter 5, Title I,
Book III, 1987 Administrative Code, is misplaced, such provision being
inapplicable in your case. It may be noted that the cited provision
specifically refers to the power of the President to appoint such officials
as provided for in the Constitution and laws. The corollary power to
issue designations and enable the designees to receive additional
compensation corresponding to the difference between the salaries of
two (2) positions is likewise exclusive to the President alone. Thus, the
nature of the designations issued by the Office of the President as
contained in the samples you submitted is based on this provision of
law, and not as a matter of practice. There is no similar provision that
grants the same exact power to heads of offices or department
secretaries. On the contrary, the applicable provision as regards the
rest of the civil service system is found in Section 6 (e), Rule III,
Omnibus Rules on Appointments and Other Personnel Actions (CSC
Memorandum Circular No. 40, s. 1998, as amended by CSC MC No.
15, s. 1999), which states that:
e. Designation.-- is merely an imposition of
additional duties to be performed by a public official which
is temporary in nature and can be terminated anytime at
the pleasure of the appointing authority.

Thus, although heads of offices are empowered to issue

temporary designations, the employees so designated are not allowed
by law to receive the compensation attached to the higher position. We
quote with approval the opinion of our CSC-GSIS Field Office stated as
follows:
x x x the designation of Mr. Ildebrando F. Ibaez as
Executive Assistant IV is merely (sic) temporary imposition
of duties and responsibilities to an employee x x x. Mr.
Ibaez is not being promoted to the position of Executive
Assistant IV but merely reassigned and given a different
set of duties and responsibilities. In government, to be
entitled to salary, there must be a corresponding
appointment issued x x x.
As regards the argument that a temporary designation is
preferable as it would mean savings for the agency, this is an incorrect
and misguided appreciation of the concept of designation. Please note
that the imposition of additional duties or the performance of duties
outside the regular functions of an employee is a measure intended to
address either the requirements of the service or the development
needs of the employee concerned. Thus, designations are premised on
circumstances pertaining to the exigency of the service, that is,
necessities brought about by functional, financial or manpower
requirements. It is often resorted to due to lack of funds, and not as a
means to save on personal services.
xxx
Ibaez disputes the foregoing decision on the following grounds:
I would maintain that my reference to Section 16, Chapter 5,
Title I, Book III, Administrative Code of 1987, is applicable to my case,
considering that a government official with power to appoint and
designate is an alter-ego or extension of the President for the smooth
and effective operation of the government. Under the alter-ego
principle, a power conferred by law on one official may be exercised by
other official, especially if the latter is considered an extension of the
power of the original source.
This power as cited is not exclusive to the President alone as
shown by the fact that it was the Executive Secretary (Head of the
Executive Office, who is considered a department head or even his
assistants) who signed the samples submitted. Moreover, I know for a
fact that even before the effectivity of the 1987 Administrative Code,
this kind of designation was already a practice in the Office of the
President.
If an Executive Secretary can do it and issue properly such
designation, the other alter-ego or extension of the President likeagency can do the same.
The applicable provision cited by the CSC-NCR in Section 6 (e),
Rule III, Omnibus Rules on the Appointments and Other Personnel
Actions (no similar provision in the Civil Service Law), only provides

that designation is temporary in nature and can be terminated anytime

but does not rule out payment of salary differential to a person who is
made to assume temporarily a higher position.
xxx
My designation is not intended to address the requirements of
the service or my development needs, but rather for me to assume a
higher responsible job in the staff of a GSIS Board member for which I
have to be compensated accordingly. Appointing a new employee
would require full disbursement of the allocation for the position.
Designation involving payment of mere salary differential definitely
results in savings.
It is not always necessary to have an appointment to entitle a
person to a salary. If the assignment is dual and only temporary in
nature, a mere designation will serve the purpose. Unless disapproved
by higher ranking authority, there is always a presumption of regularity
on the act of an official.
If, however, the Commission will still maintain the position taken
by the heads of the CSC-GSIS branch and the NCR, may I request the
Commission to authorize GSIS to issue an appointment to cover the
period I served. At least I should be paid for actual service I rendered
under the principle of quantum meruit which is allowable by the CSC.
xxx
The records of the case bear out that on October 30, 1998, Executive VicePresident Reynaldo P. Palmiery issued GSIS Office Order No. 101-98 designating
Ibaez, who was with the GSIS Legal Services, as Acting Executive Assistant IV in
the Office of Trustee Florino O. Ibaez, with the express stipulation that he was to
receive the payment ofsalary including such benefits, privileges and other
emoluments corresponding to the position.
Unsure of the legality of the said clause, Romeo Pagalan, State Auditor III of
the Commission on Audit (COA) assigned at the GSIS, sought clarification from the
CSC-GSIS Field Office. In reply, the latter opined that the designee has no basis to
assert legal right over the salary attached to the position of Executive Assistant IV in
the absence of an appointment thereto. Dissatisfied, Ibaez moved to reconsider
before the CSC-NCR, but the latter denied the same.
Hence, the present appeal.
As previously noted, Ibaez anchors his salary entitlement on Section 17
(although he erroneously cited 16), Chapter 5, Title I, Book II of the
Administrative Code of 1987, whose material portions are excerpted hereunder for
their important bearing on the case:
Sec. 17. Power to Issue Temporary Designation.-- (1) The
President may temporarily designate an officer already in the
government service or any other competent person to perform the
functions of an office in the executive branch, appointment to which is
vested in him by law, when: (a) the officer regularly appointed to the

office is unable to perform his duties by reason of illness, absence or

any other cause; or (b) there exists a vacancy.
(2) The person designated shall receive the compensation
attached to the position, unless he is already in the government service
in which case he shall receive only such additional compensation as,
with his existing salary, shall not exceed the salary authorized by law
for the position filled. The compensation hereby authorized shall be
paid out of the funds appropriated for the office or agency
concerned. (underscoring supplied)
He posits the view that just as the President is empowered by the aforequoted
provision of law to designate an employee to a vacant office with the corollary right
to receive the compensation ascribed to the position, then so it is with the GSIS
Executive Vice-President, he being an alter-ego of the President. He avers
that (u)nder the alter-ego principle, a power conferred by law on one official may be
exercised by other official, especially if the latter is considered an extension of the
power of the original source. He draws similarity from a couple of instances where
the Executive Secretary, acting on behalf of the President, designated certain
officials, conferring them as well the right to enjoy the salary incident to their
temporary positions. He maintains, (i)f the Executive Secretary can do it and issue
properly such designation, the other alter-ego or extension of the President likeagency can do the same.
He, moreover, contends that contrary to the opinion of the CSC-NCR, Section
6 (e), Rule III of the Revised Omnibus Rules on Appointments and Other Personnel
Actions merely defined the term designation and did not rule out payment of
salary differential to a person who is made to assume temporarily a higher position.
In addition, he submits that his designation was impelled not by the needs of
the service but to allow him to assume a higher responsible job for which he was to
be accordingly compensated. It is likewise his contention that an appointment is not
always necessary to give rise to the payment of salary, for (i)f the assignment is
dual and only temporary in nature, a mere designation suffices.
Finally, in the event that the decision of the office a quo is sustained, Ibaez
alternatively prays that the Commission authorize the GSIS to issue an appointment
to cover the period of his designation so that, at the very least, he may be paid the
equivalent of actual services he rendered in line with the principle of quantum
meruit.
The Commission noted that Ibaez relies heavily on the so-called doctrine of
qualified political agency to make out his case. The doctrine, as espoused in an
unbroken stream of jurisprudence, to borrow the words of the Supreme Court, states
essentially that heads of the various executive departments are extension of the
legal personality of the President, and their acts in the regular performance of duty
are deemed to be his, unless he abjures or disavows them. As succinctly put by the
eminent Filipino jurist, Justice Laurel, in the landmark case of Villena vs. Secretary
of Interior (67 Phil. 451):
x x x (A)ll executive and administrative organizations are
adjuncts of the Executive Department, the heads of various executive
departments are assistants and agents of the Chief Executive, and
except in cases where the Chief Executive is required by the
Constitution or the law to act in person or the exigencies of the situation

demand that he act personally, the multifarious executive and

administrative functions of the Chief Executive are performed by and
through the executive departments, and the acts of the secretaries of
such departments, performed and promulgated in the regular course of
business, are, unless disapproved of reprobated by the Chief
Executive, presumptively the acts of the Chief Executive.
Going by the doctrine of qualified political agency, the law indulges in the
fiction that when department heads act within the scope and extent of their legal fiat
or mandate, and save when he repudiates them, their actions are generally
presumed to be that of the President. To this sacramental rule, however, are
excepted those cases where by express constitutional or statutory injunctions or
where the exigencies of the service so dictate, the Chief Executive is under legal
obligation to act directly in person.
In the case at bar, it is noted that the provision of the Administrative Code of
1987 being invoked by Ibaez plainly and categorically speaks of the power of the
President to issue temporary designation. Noteworthy, too, is the fact that the
provision delimits the exercise of such prerogative only to offices where the
President himself is the appointing authority. These circumstances, construed and
taken together, readily evince the conclusion that the power to designate
contemplated by the subject provision devolves solely and exclusively to the
President and none other, not even the GSIS.
Nowhere in the records is it shown that the position to which Ibaez was
designated, is one of those the President is authorized to fill up. This is of material
implication owing to the fact that the above-quoted Section 17, to reiterate, strictly
demarcates and confines its application to positions or offices, appointment to
which is vested in the President by law. Considering that the incumbent to the
position of Executive Assistant IV is presumably not the President to appoint, then
he is bereft of authority to designate a person therein, and at the same time, warrant
the corresponding payment of the salary attached thereto. In turn, the GSIS cannot
plausibly rely on the alter ego principle, in designating Ibaez as Acting Executive
Assistant IV, and ordaining his right to compensation thereto, since, as an adjunct or
an agent, it cannot wield a power its principal, the President, does not even possess,
in the first place. Consequently, the GSIS cannot arrogate unto itself the said power,
for, going by the enumerated exceptions above-described, the doctrine of qualified
political agency does not properly lie.
It is true in the couple of illustrative examples adverted to by Ibaez that the
Executive Secretary has discharged, in a number of occasions, this power to
designate temporarily. Yet, it does not escape the attention of the Commission that
such acts of the Executive Secretary were prefaced (b)y authority of the
President, so that the same are presumed to be the Presidents. Apropos to this
point was the disquisition by the High Court in the case of Lacson-Magallanes Co.,
Inc. vs. Pano (21 SCRA 895), to wit:
3. But plaintiff underscores the fact that the Executive Secretary
is equal in rank to the other department heads, no higher than anyone
of them. From this, plaintiff carves the argument that one department
head on the pretext that he is an alter ego of the President, cannot
intrude into the zone of action allocated to another department
secretary. This argument betrays lack of appreciation of the fact that
where, as in this case, the Executive Secretary acts (b)y authority of
the President, his decision is that of the Presidents. Such decision is

to be given full faith and credit by our courts. The assumed authority of
the Executive Secretary is to accepted. For, only the President may
rightfully say that the Executive Secretary is not authorized to do
so. (underscoring supplied)
More decisively, the issue of whether designation warrants the attendant
payment of salary has squarely been passed upon by the High Tribunal in the recent
case ofDimaandal vs. Commission on Audit (291 SCRA 322). Therein, it was
held that:
Moreover, what was extended to petitioner by Governor Mayo
was merely a designation not an appointment. The respondent
Commission clearly pointed out the difference between an appointment
and designation, thus:
There is a great difference between an appointment
and designation. While an appointment is the selection by
the proper authority of an individual who is to exercise the
powers and functions of a given office, designation merely
connotes an imposition of additional duties, usually by law,
upon a person already in the public service by virtue of an
earlier appointment (Santiago vs. COA, 199 SCRA 125)
Designation is simply the mere imposition of new
and additional duties on the officer or employee to be
performed by him in a special manner. It does not entail
payment of additional benefits or grant upon the person so
designated the right to claim the salary attached to the
position (COA Decision No. 95-087 dated February 2,
1995). As such, there being no appointment issued,
designation does not entitle the officer designated to
receive the salary of the position. For the legal basis of an
employees right to claim the salary attached thereto is a
duly issued and approved appointment to the
position(Opinion dated January 25, 1994 of the Office for
Legal Affairs, Civil Service Commission, Re: Evora, Carlos
A., Jr., Designation).
This Court has time and again ruled that:
Although technically not binding and controlling on
the courts, the construction given by the agency or entity
charged with the enforcement of a statute should be given
weight and respect (In Re Allen, 2 Phil. 630, 640),
particularly so if such construction, as in the case at bar,
has been uniform, and consistent, and has been observed
and acted on for a long period of time (Molina vs. Rafferty,
38 Phil. 167); Madrigal vs. Rafferty, 38 Phil. 414;
Philippine Sugar Central vs. Collector of Customs, 51 Phil.
143). (underscoring supplied)
Interestingly, the Court, in the above decision, lent its imprimatur to the
administrative pronouncements by both the COA and the Commission to the effect
that employees are foreclosed from receiving the salaries of the positions to which
they are designated.

As to the alternative prayer interpolated by Ibaez, suffice it to say that the

Commission is powerless to grant the same. Time and again, the Court has
unequivocally declared, and the Commission cannot but pay heed unreservedly,
that:
In Luego vs. Civil Service Commission, 143 SCRA 327 (1986),
the Court ruled that CSC has the power to approve or disapprove an
appointment set before it. It does not have the power to make an
appointment or to direct the appointing authority to change the
employment status of an employee. The CSC can only inquire into the
eligibility of the person chosen to fill a position and if it finds the person
qualified it must so attest. If not, the appointment must be disapproved.
The duty of the CSC is to attest appointments (Villanueva vs. Balallo, 9
SCRA 407 [1963]) and after that function is discharged, its participation
in the appointment process ceases (Villegas vs. Subido, 30 SCRA 498
[1969]). (Province of Camarines Sur vs. Court of Appeals, 246
SCRA 281) (underscoring supplied)
Public service is fraught with pains and sacrifices. Not infrequently, reward or
compensation comes not in the form of tangible or monetary returns, but in the
thought that one, no matter how lowly his station or modest his works, has done and
contributed something positive to the public good. When a government employee
therefore takes his oath of office, and affirms it every so often before the flag, he
does so, not so much to pursue a life dedicated to abject poverty, but to consecrate
himself to the service of his fellowmen, above all else, including his own. In so
saying, the Commission does not lose sight of the harsh economic realities that
make life now in the country difficult, if not insuperable. Yet, an officer or employee
of the government is, first and foremost, a public servant, in the truest sense of the
word.
While the Commission, indeed, appreciates Ibaezs plight, it is beyond its
authority to grant the relief being implored. If only for a consolation, he can rest on
the thought that his designation is just one of the countless sacrifices the
government exacts of its men and women. But surely his efforts do not go
unrequited, for ultimately, his reward is on his having been able to share and impart
his skills, talents and expertise for the greater good.
WHEREFORE, the
appeal
of
Ildebrando
F.
Ibaez
is
hereby DISMISSED. The decision of the Civil Service Commission-National Capital
Region is affirmed in all respects.
Quezon City,

February 28, 2002