J.A.B. Bulao & Associates

CASE 2012-0028: CIVIL SERVICE COMMISSION VS. AURORA M. CLAVE (G.R. NO. 194645, MARCH 6, 2012, PER CURIAM) SUBJECT/S: SIMPLE NEGLECT OF DUTY; PENALTY OF DISMISSAL SUSTAINED. (BRIEF TITLE: CIVIL SERVICE VS. CLAVE)

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DISPOSITIVE:

        WHEREFORE, we SET ASIDE the 27 July 2010 Decision and 24 November 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 106229 insofar as it modified the penalty imposed on Aurora M. Clave and REINSTATE Resolution No. 081951 dated 13 October 2008 of the Civil Service Commission dismissing Clave from service with perpetual disqualification to hold public office, forfeiture of retirement benefits except accrued leave credits, cancellation of Civil Service eligibility, and prohibition from taking Civil Service examinations.

          SO ORDERED.

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EN BANC

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GOVERNMENT SERVICE                         G.R. No. 194665

INSURANCE SYSTEM (GSIS),

Petitioner,

Present:

CORONA, C.J.,

CARPIO,

VELASCO, JR.,

LEONARDO-DE CASTRO,

BRION,

– versus –                                                      PERALTA,

BERSAMIN,

DELCASTILLO,

ABAD,

VILLARAMA, JR.,

PEREZ,

MENDOZA,

SERENO,

REYES, and

PERLAS-BERNABE, JJ.

AURORA M. CLAVE,                                Promulgated:

Respondent.                                                 March 6, 2012

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D E C I S I O N

PER CURIAM:

The Cases

Before the Court are two petitions for certiorari assailing the 27 July 2010 Decision¹ and 24 November 2010 Resolution² of the Court of Appeals in CA-G.R. SP No. 106229.

In G.R. No. 194645, petitioner Civil Service Commission (CSC) asks this Court to set aside the decision of the Court of Appeals and to impose on respondent Aurora M. Clave (Clave) the penalty of dismissal from service.

In G.R. No. 194665, petitioner Government Service Insurance System (GSIS) likewise prays this Court to set aside the Court of Appeals’ decision and to impose on Clave the penalty of dismissal from service.

The Antecedent Facts

These cases originated from Administrative Case No. 05-055 filed by GSIS against Clave. GSIS alleged that Clave was a Senior Computer Operator I of the Social Insurance Group (SIG) at the Manila District Office of the GSIS. On 9 December 2003, Diosdado V. Estoque (Estoque), through the Mainframe Salary Loan System (MSLS), granted Marie Ann F. Tornea (Tornea) an enhanced salary loan with net proceeds of P73,123.87 for which GSIS Check No. IC2123810 was issued. The check was later released and negotiated.

On 16 December 2003, Clave, without proper authority or valid reason and in gross violation of pertinent rules and procedure, cancelled the header of Tornea’s loan as appearing in the MSLS. Clave used her operator ID (AMCO) and the computer terminal assigned to her (SI42). By cancelling the loan, Clave made it appear that the loan had not been granted to Tornea.

Clave countered that she was not aware of Tornea’s loan because it was processed by Estoque on 9 December 2003 and she was absent on that day. Clave further alleged that the authority given to her on loan applications was limited only to granting salary loan applications and cancelling voided checks or checks that were physically defective due to computer malfunction. Clave alleged that she was not authorized to use Function “D” which was the deletion function used in cancelling the header of Tornea’s loan. According to Clave, only the section and division chiefs of the loans administrative division and the Information Technology Services Group (ITSG) can access Function “D.” Finally, Clave alleged that, at that time, she had been with the GSIS for 28 years with unblemished service and dedicated loyalty.

The Decision of the GSIS

In its 23 May 2007 Decision,³ the GSIS found Clave guilty of simple neglect of duty. The GSIS ruled that while Clave was not authorized to use transaction code “LSMH.D” to delete loan headers, she was given authority to cancel loans that were previously granted by using transaction code “LSLC,” which was used in this case. The GSIS ruled that each employee tasked to grant or cancel loans is assigned a corresponding user ID and password known only to the specified user. The ID is the tracking device used to establish the identity of the person responsible for any modification or alteration in the MSLS database. All the transactions of a particular user are recorded and logged in the MSLS database. In this case, it was shown that Clave was responsible for the cancellation of the header of Tornea’s loan.

The dispositive portion of the GSIS Decision reads:

WHEREFORE, Aurora M. Clave is found GUILTY of Simple Neglect of Duty. This being the second time she was found guilty of the same offense, she is hereby meted the penalty of DISMISSAL FROM THE SERVICE, which shall carry with it cancellation of eligibility; forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the government service.

It is so ordered.⁴

Clave filed a motion for reconsideration. In its 7 July 2008 Resolution,⁵ the GSIS denied Clave’s motion for reconsideration for lack of merit.

Clave filed an appeal from the GSIS Decision to the Civil Service Commission (CSC).

The Decision of the Civil Service Commission

In its Resolution No. 081951⁶ dated 13 October 2008, the CSC dismissed the appeal and affirmed the GSIS Decision dismissing Clave from service. The CSC ruled that the GSIS did not err in finding Clave guilty of simple neglect of duty. The CSC found that there was substantial evidence that proved Clave’s guilt. The CSC noted that the data extracted by the ITSG showed that the user ID used was AMCO in the transaction “LSLC” to cancel the header of Tornea’s loan. It was established that AMCO was Clave’s user ID.

The dispositive portion of the CSC Resolution reads:

WHEREFORE, the appeal of Aurora M. Clave, Senior Computer Operator I, Social Insurance Group, Government Service Insurance System (GSIS), is hereby DISMISSED. Accordingly, the Decision dated May 23, 2007 of the same Office, dismissing her from the service for having been found guilty for the second time, of the offense of Simple Neglect of Duty, is AFFIRMED. She is likewise imposed the accessory penalties of perpetual disqualification to hold public office, forfeiture of retirement benefits, cancellation of Civil Service eligibility and bar from taking Civil Service examinations.⁷

Clave filed a petition for review before the Court of Appeals, assailing the CSC Resolution.

The Decision of the Court of Appeals

In its 27 July 2010 Decision, the Court of Appeals partly granted Clave’s petition. The Court of Appeals affirmed the CSC insofar as it found Clave guilty of simple neglect of duty. However, the Court of Appeals modified the CSC Resolution by reducing the penalty imposed on Clave from dismissal from service to suspension from office without salary and other benefits for one year, with a stern warning that a transgression of a similar nature will warrant her dismissal from service.

The Court of Appeals ruled that there was nothing in the records that showed that Clave acted in bad faith when she gave her operator ID and password to other persons. The Court of Appeals ruled that Clave’s carelessness should not equate to dismissal since it was not coupled with bad faith.

The Court of Appeals found that while Clave’s guilt was supported by substantial evidence, the imposition of the penalty of dismissal from service was too harsh. The dispositive portion of the Decision of the Court of Appeals reads:

WHEREFORE, IN VIEW of THE FOREGOING, the petition is partly GRANTED. The Resolution of the Civil Service Commission dated 13 October 2008 is AFFIRMED insofar as it found petitioner Aurora M. Clave guilty of Simple Neglect of Duty, but in lieu of dismissal from the service, petitioner is hereby SUSPENDED from office without salary and other benefits for one (1) year, with a STERN WARNING that another transgression of a similar nature will merit dismissal from the service.

SO ORDERED.⁸

Both the CSC and the GSIS moved for the reconsideration of the Decision of the Court of Appeals.

In its 24 November 2010 Resolution, the Court of Appeals denied the motions.

Hence, the petitions separately filed by the CSC and the GSIS before this Court.

The Issue

Petitioners CSC and GSIS raised a common issue in these cases, that is, whether the Court of Appeals committed a reversible error in reducing the penalty imposed on Clave from dismissal from service to suspension for one year.

The Ruling of this Court

The petitions are meritorious.

Simple neglect of duty is the failure to give attention to a task, or the disregard of a duty due to carelessness or indifference.⁹ The Court of Appeals sustained the findings of the GSIS and the CSC, and found that there was substantial evidence to hold Clave liable for simple neglect of duty. We agree with the Court of Appeals on this issue.

In these cases, the Court of Appeals found that while Clave was not specifically authorized to delete headers, she had authority to cancel granted loans through the transaction code “LSLC.” Further, Clave was one of the users of the computer terminal SI42 that was used to cancel the header of Tornea’s loan. The Court of Appeals found that the computer terminal SI42 that was used to cancel the header of Tornea’s loan was also used by two persons, including Estoque who was previously found guilty of dishonesty and grave misconduct for cancelling the loans and headers of some GSIS members. Thus, it might be possible that Estoque used Clave’s operator ID and password in cancelling the header of Tornea’s loan. However, granting that this might be true, Clave still failed to explain why other persons knew her operator ID and password that were used in the cancellation of the header. The Court of Appeals correctly ruled that Clave was neglectful in safeguarding information that should have been known only to herself.

However, we do not agree with the penalty imposed by the Court of Appeals.

Simple neglect of duty is a less grave offense punishable by suspension of one month and one day to six months for the first offense and dismissal for the second offense.¹⁰

In reducing the penalty imposed on Clave, the Court of Appeals considered Section 53 of the Uniform Rules on Administrative Cases in the Civil Service, which states:

Sec. 53. Extenuating, Mitigating, Aggravating, or Alternative Circumstances. – In the determination of the penalties to be imposed, mitigating, aggravating and alternative circumstances attendant to the commission of the offense shall be considered:

The following circumstances shall be appreciated:

x x x

j. Length of service in the government.

x x x

The Court of Appeals ruled that length of service in the government can mitigate or aggravate the penalty, depending on the circumstances of the case. The Court of Appeals considered Clave’s 30 years of service in the government, as well as her lack of bad faith, in reducing the penalty imposed by the GSIS and the CSC. While acknowledging that this was not Clave’s first offense for simple neglect of duty, the Court of Appeals invoked the court’s discretion to temper the harshness of its judgment with mercy and cited humanitarian reasons for the modification of the decisions of the GSIS and the CSC.

Again, we do not agree with the Court of Appeals.

Section 53 of the Uniform Rules on Administrative Cases in the Civil Service is clear that length of service may be considered either as mitigating or aggravating depending on the circumstances of the case. Here, it was shown that Clave was previously found guilty by the GSIS of simple neglect of duty in Adm. Case No. 05-027¹¹ in its Decision dated 12 February 2007 for unauthorized cancellation of the loan and header of one Basilio C. Benitez. In that case, the GSIS suspended Clave for three months. Earlier, in another Decision¹² dated 10 November 2005, the GSIS found Clave guilty of conduct prejudicial to the interest of the service for her participation in a mass action that resulted in the disruption of GSIS operations, for which she was meted the penalty of suspension for six months and one day. Hence, Clave’s length of service in the government could not mitigate her liability considering that the present offense is not her first offense but her third offense. Applying Section 52(B) of the Revised Rules on Administrative Cases in the Civil Service, the penalty of dismissal imposed by the GSIS and affirmed by the CSC should instead be imposed on Clave.

WHEREFORE, we SET ASIDE the 27 July 2010 Decision and 24 November 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 106229 insofar as it modified the penalty imposed on Aurora M. Clave and REINSTATE Resolution No. 081951 dated 13 October 2008 of the Civil Service Commission dismissing Clave from service with perpetual disqualification to hold public office, forfeiture of retirement benefits except accrued leave credits, cancellation of Civil Service eligibility, and prohibition from taking Civil Service examinations.

SO ORDERED.

RENATO C. CORONA

Chief Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

RENATO C. CORONA

Chief Justice

1 Rollo (G.R. No. 194645), pp. 24-39. Penned by Associate Justice Rodil V. Zalameda with Associate Justices Apolinario D. Bruselas, Jr. and Mario V. Lopez, concurring.

2Id. at 40-42.

3 Rollo (G.R. No. 194665), pp. 67-74. Signed by GSIS President and General Manager Winston F. Garcia.

4Id. at 74.

5Id. at 89-92.

6Id. at 150-161. Signed by Commissioners Mary Ann Z. Fernandez-Mendoza and Cesar D. Buenaflor.

7Id. at 161.

8 Rollo (G.R. No. 194645), p. 38.

9 Office of the Court Administrator v. Garcia-Rañoco, A.M. No. P-03-1717, 6 March 2008, 547 SCRA 670.

10 Lao v. Mabutin, A.M. No. MTJ-06-1646, 16 July 2008, 558 SCRA 411, citing Revised Uniform Rules on Administrative Cases in the Civil Service, Section 52(B)(1).

11 Rollo (G.R. No. 194665), pp. 75-81.

12Id. at 82-88.

CASE 2012-20027: RE: IN THE MATTER OF CLARIFICATION OF EXEMPTION FROM PAYMENT OF ALL COURT AND SHERIFF’S FEES OF COOPERATIVES DULY REGISTERED IN ACCORDANCE WITH REPUBLIC ACT NO. 9520 OTHERWISE KNOWN AS THE PHILIPPINE COOPERATIVE CODE OF 2008,PERPETUAL HELP COMMUNITY COOPERATIVE (PHCCI) (A.M. NO. 12-2-03-0, MARCH 13, 2012, PEREZ, J.🙂 (BRIEF: EXEMPTION FROM FEES PER PHIL COOP CODE)

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DISPOSITIVE:

          WHEREFORE, in the light of the foregoing premises, the petition of PHCCI requesting for this Court to issue an order clarifying and implementing the exemption of cooperatives from the payment of court and sheriff’s fees is hereby DENIED.

          The Office of the Court Administrator is DIRECTED to issue a circular clarifying that cooperatives are not exempt from the payment of the legal fees provided for under Rule 141 of the Rules of Court.

SO ORDERED.

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                                          Petitioner,

EN BANC

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R E S O L U T I O N

PEREZ, J.:

          In a Petition^[1][1] dated 24 October 2011, Perpetual Help Community Cooperative (PHCCI), through counsel, requests for the issuance of a court order to clarify and implement the exemption of cooperatives from the payment of court and sheriff’s fees pursuant to Republic Act No. 6938, as amended by Republic Act No. 9520, otherwise known as the Philippine Cooperative Act of 2008.

          PHCCI contends that as a cooperative it enjoys the exemption provided for under Section 6, Article 61 of Republic Act No. 9520, which states:

(6) Cooperatives shall be exempt from the payment of all court and sheriff’s fees payable to the Philippine Government for and in connection with all actions brought under this Code, or where such actions is brought by the Authority before the court, to enforce the payment of obligations contracted in favor of the cooperative.

          It claims that this was a reiteration of Section 62, paragraph 6 of Republic Act No. 6938, An Act to Ordain a Cooperative Code of the Philippines,^[2][2] and was made basis for the Court’s Resolution in A.M. No. 03-4-01-0, as well as of Office of the Court Administrator (OCA) Circular No. 44-2007.^[3][3]

          It avers that despite the exemptions granted by the aforesaid laws and issuances, PHCCI had been continuously assessed and required to pay legal and other fees whenever it files cases in court.

          PHCCI reports that it filed with the Office of the Executive Judge of the Municipal Trial Court in Cities (MTCC), Dumaguete City, Negros Oriental, a Motion to implement the exemption of cooperatives from the payment of court and sheriff’s fees in cases filed before the courts in his jurisdiction, but the Executive Judge ruled that the matter is of national concern and should be brought to the attention of the Supreme Court for it to come up with a straight policy and uniform system of collection.  In the meantime, the MTCC has continued the assessment of filing fees against cooperatives.

          Records reveal that on 21 September 2011, Executive Judge Antonio Estoconing (Executive Judge Estoconing), MTCC, DumagueteCity, Negros Oriental, issued an Order treating the motion filed by PHCCI as a mere consulta considering that no main action was filed in his court.  Executive Judge Estoconing submits that he had second thoughts in considering the exemption in view of the guidelines laid down in the Rules.  He reported that many cases filed by PHCCI are small claims cases and under Section 8 of the Rule on Small Claims, the plaintiff is required to pay docket fees and other related costs unless he is allowed to litigate the case as an indigent.

          Hence, this Petition.

          Before this Court is the issue on whether cooperatives are exempt from the payment of court and sheriff’s fees.  The fees referred to are those provided for under Rule 141 (Legal Fees) of the Rules of Court.

          The term “all court fees” under Section 6, Article 61 of Republic Act No. 9520 refers to the totality of “legal fees” imposed under Rule 141 of the Rules of Court as an incident of instituting an action in court.^[4][4]  These fees include filing or docket fees, appeal fees, fees for issuance of provisional remedies, mediation fees, sheriff’s fees, stenographer’s fees and commissioner’s fees.^[5][5] 

          With regard to the term “sheriff’s fees,” this Court, in an extended minute Resolution dated 1 September 2009, held that the exemptions granted to cooperatives under Section 2, paragraph 6 of Republic Act No. 6938; Section 6, Article 61 of Republic Act No. 9520; and OCA Circular No. 44-2007 clearly do not cover the amount required “to defray the actual travel expenses of the sheriff, process server or other court-authorized person in the service of summons, subpoena and other court processes issued relative to the trial of the case,”^[6][6] which are neither considered as court and sheriff’s fees nor are amounts payable to the Philippine Government.^[7][7] 

          In fine, the 1 September 2009 Resolution exempted the cooperatives from court fees but not from sheriff’s fees/expenses.

          On 11 February 2010, however, the Supreme Court En Banc issued a Resolution in A.M. No. 08-2-01-0,^[8][8] which denied the petition of the Government Service Insurance System (GSIS) for recognition of its exemption from payment of legal fees imposed under Section 22 of Rule 141 of the Rules of Court.  In the GSIS case, the Court citing Echegaray v. Secretary of Justice,^[9][9] stressed that the 1987 Constitution molded an even stronger and more independent judiciary; took away the power of Congress to repeal, alter, or supplement rules concerning pleading, practice and procedure; and held that the power to promulgate these Rules is no longer shared by the Court with Congress, more so, with the Executive,^[10][10] thus:

Since the payment of legal fees is a vital component of the rules promulgated by this Court concerning pleading, practice and procedure, it cannot be validly annulled, changed or modified by Congress. As one of the safeguards of this Court’s institutional independence, the power to promulgate rules of pleading, practice and procedure is now the Court’s exclusive domain.  That power is no longer shared by this Court with Congress, much less with the Executive.^[11][11]

x x x x

            The separation of powers among the three co-equal branches of our government has erected an impregnable wall that keeps the power to promulgate rules of pleading, practice and procedure within the sole province of this Court.  The other branches trespass upon this prerogative if they enact laws or issue orders that effectively repeal, alter or modify any of the procedural rules promulgated by this Court.  Viewed from this perspective, the claim of a legislative grant of exemption from the payment of legal fees under Section 39 of R.A. 8291 necessarily fails.

            Congress could not have carved out an exemption for the GSIS from the payment of legal fees without transgressing another equally important institutional safeguard of the Court’s independence – fiscal autonomy.^[12][12]  Fiscal autonomy recognizes the power and authority of the Court to levy, assess and collect fees,^[13][13] including legal fees.  Moreover, legal fees under Rule 141 have two basic components, the Judiciary Development Fund (JDF) and the Special Allowance for the Judiciary Fund (SAJF).^[14][14]  The laws which established the JDF and SAJF^[15][15] expressly declare the identical purpose of these funds to guarantee the independence of the Judiciary as mandated by the Constitution and public policy.^[16][16]  Legal fees therefore do not only constitute a vital source of the Court’s financial resources but also comprise an essential element of the Court’s fiscal independence. Any exemption from the payment of legal fees granted by Congress to government-owned or controlled corporations and local government units will necessarily reduce the JDF and the SAJF.  Undoubtedly, such situation is constitutionally infirm for it impairs the Court’s guaranteed fiscal autonomy and erodes its independence.^[17][17]

          In a decision dated 26 February 2010 in Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Cabato-Cortes,^[18][18] this Court reiterated its ruling in the GSIS case when it denied the petition of the cooperative to be exempted from the payment of legal fees under Section 7(c) of Rule 141 of the Rules of Court relative to fees in petitions for extra-judicial foreclosure. 

          On 10 March 2010, relying again on the GSIS ruling, the Court En Banc issued a resolution clarifying that the National Power Corporation is not exempt from the payment of legal fees.^[19][19] 

          With the foregoing categorical pronouncements of the Supreme Court, it is evident that the exemption of cooperatives from payment of court and sheriff’s fees no longer stands.  Cooperatives can no longer invoke Republic Act No. 6938, as amended by Republic Act No. 9520, as basis for exemption from the payment of legal fees.

          WHEREFORE, in the light of the foregoing premises, the petition of PHCCI requesting for this Court to issue an order clarifying and implementing the exemption of cooperatives from the payment of court and sheriff’s fees is hereby DENIED.

          The Office of the Court Administrator is DIRECTED to issue a circular clarifying that cooperatives are not exempt from the payment of the legal fees provided for under Rule 141 of the Rules of Court.

SO ORDERED.

WE CONCUR:

RENATO C. CORONA

Chief Justice

      ANTONIO T. CARPIO          PRESBITERO J. VELASCO, JR.   

            Associate Justice                                          Associate Justice

 TERESITA J. LEONARDO-DE CASTRO         ARTURO D. BRION

            Associate Justice                                   Associate Justice

                       DIOSDADO M. PERALTA                    LUCAS P. BERSAMIN

          Associate Justice                                    Associate Justice

                (On Leave)

       MARIANO C. DEL CASTILLO                 ROBERTO A. ABAD

            Associate Justice                                   Associate Justice      

            MARTIN S. VILLARAMA, JR.          JOSE CATRAL MENDOZA

            Associate Justice                                 Associate Justice

MARIA LOURDES P. A. SERENO         BIENVENIDO L. REYES

               Associate Justice                                    Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice