Guillergan v. Ganzon
REITERATIONFacts
1. The Antecedents: Petitioners, laborers and employees in the unclassified service of Iloilo City, had been working as market sweepers, slaughterhouse laborers, and market cleaning capataces for periods ranging from nine to twenty-five years. They were allegedly illegally separated or dismissed from their positions. 2. Procedural History: In a prior case (Civil Case No. 3764), petitioners, along with others, sought reinstatement and were declared permanent employees by the Court of First Instance of Iloilo. However, their positions were not included in the budget for the fiscal year 1960-1961. After the Secretary of Finance denied their request to declare the abolition of their positions inoperative, they instituted the present action for mandamus. 3. The Petition: The petitioners filed an action for mandamus against the City Mayor, Municipal Board, City Treasurer, and the City of Iloilo, seeking to compel the respondents to restore their positions in the city budget, reinstate them, and pay their salaries during their separation from service. The respondents argued that the abolition was for economy and to balance the budget, but the lower court found this to be a political maneuver to replace petitioners with supporters. The appeal specifically questions the City of Iloilo's joint liability for back salaries, with the respondents citing governmental immunity, which the Supreme Court rejected.
Issue(s)
Whether the City of Iloilo is jointly liable with the other respondents for the back salaries of the petitioners who were illegally separated from service. Whether the abolition of the petitioners' positions was for valid reasons of economy or due to political exigency.
Ruling
The decision of the lower court finding the City of Iloilo jointly liable with the other respondents for the back salaries of the petitioners was affirmed. The abolition of the petitioners' items in the budget was deemed illegal and void.
Ratio Decidendi
On Issue 1: The Court held that the City of Iloilo is jointly liable for the back salaries. The respondents' contention that municipal corporations enjoy immunity from suit for governmental functions was rejected. Firstly, the Charter of Iloilo City expressly provides that the City may "sue and be sued." Secondly, the operation of a market, which involved the petitioners' work as sweepers, is not a strictly governmental function but rather proprietary or administrative in nature. Thirdly, the Court cited previous decisions establishing that municipal corporations can be held liable for the back pay of illegally separated employees, even in cases involving primarily governmental functions like those of policemen. Therefore, the City of Iloilo cannot claim immunity in this instance. On Issue 2: The Court upheld the lower court's finding that the abolition of the petitioners' items in the budget was not for valid reasons of economy or efficiency, but rather due to "political exigency." The lower court found that the allegations of economy and balancing the budget were "devices conceived in order to smoke screen the real cause." It further found that the elimination of the petitioners' items was "politically inspired" to allow the respondents to fill the positions with their followers. The fact that "new men or laborers were placed by the respondents to take the places vacated by the petitioners" supported this conclusion, rendering the abolition illegal and void.
Main Doctrine
The Court affirmed that municipal corporations, like the City of Iloilo, can be held liable for the back salaries of employees illegally dismissed from service. This is particularly true when the functions performed by the employees, such as market sweeping, are not strictly governmental. The Court rejected the argument that the city is immune from suit for such claims, citing the city's capacity to sue and be sued and the nature of market operations as a non-governmental function.