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DEPARTMENT OF FINANCE v. MARINO M. DELA CRUZ

FACTS:

The case involves the challenge to the validity and constitutionality of Customs Personnel Order No. B-189-2013 (CPO 189-2013) issued by the Bureau of Customs (BOC) Commissioner. CPO 189-2013 detailed several BOC personnel to the newly created Customs Policy Research Office (CPRO) under the Department of Finance (DOF). The respondents filed an action for Declaratory Relief with Application for Temporary Restraining Order and/or Writ of Preliminary Injunction before the Regional Trial Court (RTC) of Manila. A Temporary Restraining Order (TRO) was initially issued by the Executive Judge and later extended by the RTC judge without need of posting bond. The petitioners, who were affected by the personnel order, filed a Petition for Certiorari and Prohibition before the Supreme Court, arguing that the case involves personnel action under the exclusive jurisdiction of the Civil Service Commission (CSC), and that the respondents failed to exhaust all administrative remedies before resorting to the RTC. The issues raised include the jurisdiction of the RTC, exhaustion of administrative remedies, the validity of the executive order, and the validity of the personnel order. The RTC denied the writ of preliminary injunction requested by the respondents and the judge subsequently inhibited herself from further hearing the case.

ISSUES:

  1. Whether the respondents failed to exhaust their administrative remedies before filing the case with the RTC.

  2. Whether Executive Order 140 (EO 140) took effect before the issuance of CPO 189-2013.

  3. Whether CPO 189-2013 is valid in light of the provisions of EO 140.

  4. Whether the Customs Personnel Order (CPO) providing for the detail of respondents is valid, considering that it did not specify the period of detail.

  5. Whether the Regional Trial Court has jurisdiction over the action for declaratory relief filed by respondents.

  6. Whether Customs Personnel Order No. B-189-2013 was validly issued.

RULING:

  1. The respondents' failure to exhaust administrative remedies is not applicable in this case. The doctrine of exhaustion of administrative remedies does not apply when the challenged administrative act is patently illegal, arbitrary, or oppressive. In this case, respondents alleged that CPO 189-2013 is contrary to law and unconstitutional, which falls within the exceptions where exhaustion of administrative remedies need not be resorted to.

  2. EO 140 took effect on 17 September 2013, as it was published in two newspapers of general circulation on that date. The fifteen-day effectivity period after the completion of publication is not applicable when there is a specific provision in the law stating a different effectivity date. In this case, Section 9 of EO 140 provides that the order shall take effect immediately upon publication in two newspapers of general circulation, thus rendering EO 140 effective on the date of its publication.

  3. CPO 189-2013 is invalid as it was issued before the organic personnel of CPRO was approved and before the DOF Secretary promulgated the necessary rules and regulations for CPRO's organization and functioning. EO 140 specifies that CPRO should be composed of its organic personnel, as approved by the Department of Budget and Management (DBM) upon recommendation of the DOF Secretary, and augmented by DOF and BOC personnel. Since CPRO had not been formally organized at the time of the respondents' detail, CPO 189-2013 is invalid.

  4. The CPO providing for the detail of respondents is not valid because it did not specify the period of detail. The CPO only stated that the order "shall be effective immediately and valid until sooner revoked," making the detail indefinite. The Court held that there was nothing to show that respondents were occupying professional, technical, and scientific positions that would have allowed their detail for the maximum period provided under the Omnibus Rules. Furthermore, CSC Resolution No. 021181 did not distinguish between an ordinary employee and an employee occupying professional, technical, and scientific position. Therefore, the maximum period of detail should not exceed one year.

  5. The Regional Trial Court has jurisdiction over the action for declaratory relief filed by respondents. The Court sustained the validity of Executive Order No. 140, which transferred jurisdiction over cases involving customs officials from the Court of Tax Appeals to the Regional Trial Court.

  6. Customs Personnel Order No. B-189-2013 was not validly issued. The Court opined that while it commends and supports the reforms being undertaken in the different government agencies, department heads should not take shortcuts that undermine and disregard the basic procedures of the law.

PRINCIPLES:

  • The doctrine of exhaustion of administrative remedies allows administrative agencies to carry out their functions within their areas of expertise, but there are exceptions.

  • A challenged administrative act that is patently illegal, arbitrary, or oppressive falls within the exceptions to the doctrine of exhaustion of administrative remedies.

  • The effectivity of a law is generally fifteen days after the completion of its publication, unless otherwise provided.

  • The discretion to specify a different effectivity date lies with the legislature or the Executive Department, as long as there is compliance with the requirement of publication.

  • Interpretative regulations and those merely internal in nature need not be published, as long as they do not affect the public and only regulate the administrative agency's personnel.

  • When an order specifies that it shall take effect immediately upon publication in two newspapers of general circulation, it becomes effective on the date of publication.

  • A personnel order is invalid if it is issued before the necessary approval of organic personnel and the promulgation of rules and regulations required for the organization and functioning of the department or office.

  • A detail is the movement of an employee from one department or agency to another which is temporary in nature, does not involve a reduction in rank, status, or salary, and does not require the issuance of another appointment.

  • The detail of employees occupying professional, technical, and scientific positions is allowed for a maximum period. If there is no justification for the detail, the employee may appeal the case to the Commission. Pending appeal, the decision to detail the employee shall be executory, unless otherwise ordered by the Commission.

  • The duration of detail is limited to one year, with the possibility of extension or renewal with the consent of the detailed employee. The extension or renewal of the detail is within the authority of the mother agency.

  • The jurisdiction over cases involving customs officials was transferred from the Court of Tax Appeals to the Regional Trial Court under Executive Order No. 140.