National Marketing Corporation v. Arca
REITERATIONFacts
The Antecedents: Respondent Juan T. Arive, Manager of the Traffic-Storage Department of the National Marketing Corporation (NAMARCO), was investigated for violating a management memorandum order and causing the improper release of shipments intended for beneficiaries upon full payment. An investigating committee found him guilty, and the NAMARCO General Manager and Board of Directors subsequently dismissed him from service. Procedural History: Arive appealed his dismissal to the President of the Philippines. The Office of the President, through Executive Secretary Ramon A. Diaz, set aside the NAMARCO Board's resolution and ordered Arive's reinstatement. NAMARCO sought reconsideration, arguing the Office of the President lacked jurisdiction. The President, through the Executive Secretary, denied the reconsideration, asserting presidential control over government-owned and controlled corporations. NAMARCO filed a second motion for reconsideration, which was also denied. Subsequently, Arive filed a complaint with the Court of First Instance of Manila for reinstatement and damages, seeking a writ of preliminary mandatory injunction. The respondent Judge granted the injunction, ordering NAMARCO to reinstate Arive. The Petition: Petitioners, NAMARCO and its officials, filed an original action for certiorari and prohibition with the Supreme Court, seeking to enjoin the respondent Judge from enforcing his order for Arive's reinstatement.
Issue(s)
Whether the President of the Philippines has the authority to review and reverse the decision of the Board of Directors of NAMARCO regarding the dismissal of an employee. Whether the respondent Judge acted without jurisdiction or with grave abuse of discretion in issuing the writ of preliminary mandatory injunction.
Ruling
The petition is dismissed. The writ of preliminary injunction issued against the enforcement of the respondent judge's order is dissolved.
Ratio Decidendi
On the President's authority to review and reverse decisions of the NAMARCO Board of Directors: The Supreme Court held that the President of the Philippines possesses the constitutional power of control over all executive departments, bureaus, and offices, which extends to government-owned and controlled corporations like NAMARCO. The Court reasoned that under the Philippine governmental setup, these corporations partake of the nature of government bureaus or offices. Therefore, the President can review, alter, modify, or nullify decisions of the Board of Directors and substitute his judgment for theirs. This power is inherent in the President's constitutional mandate to take care that the laws be faithfully executed and to exercise control over executive agencies. The Court cited precedents, including Lacson-Magallanes Co., Inc. vs. Patio, which affirmed the President's power of control over executive departments, defining control as the power to alter, modify, or nullify subordinate actions and substitute one's own judgment. The Court emphasized that the specific provisions in the NAMARCO Charter (Republic Act No. 1345) or the Uniform Charter for Government Owned or Controlled Corporations, which grant disciplinary powers to the General Manager and Board, do not preclude the President's supervisory and control powers. On whether the respondent Judge acted without jurisdiction or with grave abuse of discretion: The Supreme Court found that the respondent Judge did not act without jurisdiction or with grave abuse of discretion. Since the President's decision ordering Arive's reinstatement was validly issued under his constitutional power of control, the Judge's order for preliminary mandatory injunction to implement that decision was proper. The Court reiterated that Arive's right to reinstatement was clearly established by the President's final and binding decision. The Court also noted that the delay in implementing the President's decision was attributable to NAMARCO, despite advice from the Government Corporate Counsel. The Court concluded that the primary question of Arive's illegal dismissal was resolved in his favor by the President, making his reinstatement a matter of right, and the subsequent appointment of another person to his position was immaterial as the position legally never became vacant.
Main Doctrine
The President of the Philippines possesses the constitutional power of control over all executive departments, bureaus, and offices, which extends to government-owned and controlled corporations, allowing the President to review, alter, modify, or nullify decisions of their Boards of Directors and substitute his own judgment.