EN BANC

[G.R. No. L-23721. March 31, 1965.]

R. MARINO CORPUS , petitioner-appellant, vs . MIGUEL CUADERNO, SR.,

ET AL. , respondents-appellants.

Juan T. David and Rosauro Alvarez for petitioner-appellant.

Nat. M. Balboa, G. B. Guevara, F. E. Evangelista & C. B. Angeles for respondents-
appellants.

SYLLABUS

1. CIVIL SERVICE; REMOVAL OF HIGHLY TECHNICAL EMPLOYEES; LOSS OF

CONFIDENCE NOT VALID GROUND. — The Constitution distinguishes the primarily
con dential from the highly technical employees, and to the latter the loss of
confidence as a ground for removal is not applicable.
2. DAMAGES; AGREEMENT AS TO ATTORNEYS' FEES DOES NOT BIND
ADVERSE PARTY. — The agreement between a client and his lawyer as to attorney's
fees cannot bind the other party who was a stranger to the fee contract. While the Civil
Code allows a party to recover reasonable counsel fees by way of damages, such fees
must lie primarily in the discretion of the trial court.

DECISION

REYES, J. B. L. , J : p

Not satis ed with the decision of the Court of First Instance of Manila, in its Civil
Case No. 41226, both the above-named petitioner and respondents interposed their
respective appeals to the Court of Appeals. The Court of Appeals, however, certified the
said appeals to this Court to avoid splitting them, it appearing that, while the Court of
Appeals has jurisdiction over the respondents' appeal, the amount in controversy in the
petitioner's appeal (P574,000.00 in damages and attorneys' fees) is beyond the
jurisdiction of the said appellate court.

The essential facts are as follows: On 7 March 1958, the petitioner-appellant, R.

Marino Corpus, then holding the position of "Special Assistant to the Governor, In-
Charge of the Export Department" of the Central Bank, a position declared by the
President of the Philippines on 24 January 1957 as highly technical in nature, and
admitted as such by both the present litigants, was administratively charged by several
co-employees in the export department with dishonesty, incompetence, neglect of duty
and/or abuse of authority, oppression, conduct unbecoming a public o cial, and of
violation of the internal regulations of the Central Bank.
On 18 March 1958, the Monetary Board suspended the petitioner from o ce
effective on said date and created a three-man investigating committee composed of
Atty. Guillermo de Jesus, chairman, and Atty. Apolinar Tolentino, Assistant Fiscal of the
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 City of Manila, and Professor Gerardo Florendo, senior attorney of the Central Bank,
members. In its nal report dated 5 May 1959, the investigating committee, "after most
extensive hearings on which both complainants and respondents were afforded all
opportunity to submit their evidence, and after a most exhaustive and conscientious
study of the records and evidence submitted in the case", made the following
conclusion and recommendation:
"(1) In view of the foregoing, the Committee nds that there is no
basis upon which to recommend disciplinary action against respondent, and
therefore respectfully recommends that he be immediately reinstated."

Nevertheless, on 20 July 1959, the Monetary Board approved the following

resolution:
"After an exhaustive and mature deliberation on the report of the
aforesaid fact- nding committee in conjunction with the entire records of
the case and representations of both complainants and respondent, through
their respective counsel; and further, after a thorough review of the service
record of the respondent, particularly the various cases presented against
him, object of Monetary Board Res. No. 1527 dated August 30, 1955, which
all involve tness, discipline, etc. of respondent; and moreover, upon formal
statement of the Governor that he has lost con dence in the respondent as
Special Assistant to the Governor and In-Charge of the Export Department
(such position being primarily con dential and highly technical in nature),
the Monetary Board nds that the continuance of the respondent in the
service of the Central Bank would be prejudicial to the best interests of the
Central Bank and, therefore, in accordance with the provisions of Section 14
of the Bank Charter, considers the respondent R. Marino Corpus, resigned as
of the date of his suspension."

Corpus moved for the reconsideration of the above resolution, but the Board denied it,
after which he led an action for certiorari, mandamus, quo warranto, and damages,
with preliminary injunction, with the Court of First Instance of Manila. The said court,
after trial, rendered judgment declaring the Board resolution null and void, and ordering,
among others, the reinstatement of the herein petitioner and awarding him P5,000.00
as attorney's fees. As aforesaid, both the petitioner and the respondents appealed the
judgment.
Per its resolution, the premises of the board in dismissing the petitioner are: (1)
its deliberation of the report of the committee, the records of the case and the
representations of the parties; (2) the service record of the petitioner, particularly the
various cases against him in 1955; and (3) loss of con dence by the Governor, with the
implied concurrence of the Monetary Board. No speci c ndings were made; it is,
therefore, evident that the petitioner was removed on the third ground, since he was
neither removed for guilt of the charges against him in the administrative complaint nor
on account of his previous cases in 1955 because he had suffered the correspondent
penalty imposed upon him on the counts for which he was then found guilty, and
because he was thereafter promoted in salary and to the position in question by the
Monetary Board on recommendation of the Governor.
The appeal of the Central Bank and its Monetary Board is planted on the
proposition that o cers holding highly technical positions may be removed at any time
for lack of con dence by the appointing power, and that such power of removal is
implicit in section 1, Art. XII of the Constitution:
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 "Section 1. A Civil service embracing all branches and
subdivisions of the Government shall be provided by law. Appointments in
the Civil Service, except as to those which are policy-determining, primarily
con dential or highly technical in nature, shall be made only according to
merit and tness to be determined as far as practicable by competitive
examination."

It is argued that for the three classes of positions referred to in the constitutional
disposition (policy-determining, primarily con dential and highly technical), lack of
con dence of the one making the appointment constitutes su cient and legitimate
cause of removal.
We find the appeal of the Central Bank authorities to be clearly untenable.
In the rst place, the loss of con dence ground, on which the dismissal is sought
to be predicated, is a clear and evident afterthought resorted to when the charges,
subject-matter of the investigation, were not proved or substantiated. The Monetary
Board nowhere stated anything in the record which the committee failed to consider in
recommending exoneration from the charges; it nowhere pointed to any substantiation
of the charges; it, therefore, relied only on the statement of the loss of confidence made
by Governor Cuaderno. We nd in the particular set of facts herein that the alleged loss
of confidence is clearly a pretext to cure the inability of substantiating the charges upon
which the investigation had proceeded.
The court, therefore, can not rely on the so-called "loss of confidence" as a reason
for dismissal. And inasmuch as the charges against petitioner were unsubstantiated,
that leaves no other alternative but to follow the mandate that —
"No public o cer or employee in the Civil Service shall be removed or
suspended except for cause as provided by law" (Sec. 4, Art. XII, Constitution
of the Phil.)

Since in the interest of the service reasonable protection should be afforded civil
servants in positions that are by their nature important, such as those that are "highly
technical", the Constitutional safeguard requiring removal or suspension to be "for
cause as provided by law" at least demands that their dismissal for alleged "loss of
con dence", if at all allowed, be attended with prudence and deliberation adequate to
show that said ground exists.
In the second place, the argument for the Monetary Board ignores the self-
evident fact that the constitutional provisions merely constitute the policy determining,
primarily con dential, and highly technical positions as exceptions to the rule requiring
appointments in the Civil Service to be made on the basis of merit and tness as
determined from competitive examinations (sec. 1, supra) (Jover vs. Borra, 49 O.G.,
[No. 7] 2755), but that the Constitution does not exempt such positions from the
operation of the principle emphatically and categorically enunciated in section 4 of
Article XII, that —
"No o cer or employee in the Civil Service shall be removed or suspended
except for cause as provided by law."

and which recognizes no exception. The absolute rule thus propounded is repeated
almost verbatim in Section 132 of the Central Bank Charter (Rep. Act 265) that
provides in equally absolute terms that —
"No officer or employee of the Central Bank subject to the Civil Service law or
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 regulations shall be removed or suspended except for cause as provided by
law."

It is well to recall here that the Civil Service Law in force (Rep. Act No. 2260)
divides positions into three categories: competitive or classi ed; non-competitive or
unclassi ed service; and exempt service, the last being expressly excluded from the
scope of the Civil Service Act (sec. 3, R. A. 2260). In view of section 3 and 5 of the same
law, providing that —
"SEC. 3. Positions Embraced is the Civil Service. — The Philippine
Civil Service shall embrace all branches, subdivisions and instrumentalities
of the Government, including government-owned or controlled corporations, .
. ."
"SEC. 5. The non-competitive service. — The non-competitive or
unclassi ed service shall be composed of positions expressly declared by
law to be in the non-competitive or unclassi ed service or those which are
policy-determining, primarily con dential or highly technical in nature." (R.A.
2260)

it is indisputable that the plaintiff Corpus is protected by the Civil Service law and
regulations as a member of the non-competitive or unclassi ed service, and that his
removal or suspension must be for cause recognized by law (Unabia vs. Mayor, 53 Off.
Gaz., 132; Arcel vs. Osmeña, L-14956, Feb. 27, 1961; Garcia vs. Executive Secretary, L-
19748, Sept. 13, 1962).
The tenure of o cials holding primarily con dential positions (such as private
secretaries of public functionaries) ends upon loss of confidence, because their term of
o ce lasts only as long as con dence in them endures; and thus their cessation
involves no removal. But the situation is different for those holding highly technical
posts, requiring special skills and quali cations. The Constitution clearly distinguishes
the primarily con dential from the highly technical, and to apply the loss of con dence
rule to the latter incumbents is to ignore and erase the differentiation expressly made
by our fundamental charter. Moreover, it is illogical that while an ordinary technician, say
a clerk, stenographer, mechanic, or engineer, enjoys security of tenure and may not be
removed at pleasure, a highly technical o cer, such as an economist or a scientist of
avowed attainments and reputation, should be denied security and be removable at any
time, without right to a hearing or chance to defend himself. No technical man worthy of
the name would be willing to accept work under such conditions. Ultimately, the rule
advocated by the Bank would demand that highly technical positions be lled by
persons who must labor always with an eye cocked at the humor of their superiors. It
would signify that the so-called highly technical positions will have to be lled by
incompetents and yes- men, who must rely not on their own quali cations and skill but
on their ability to carry favor with the powerful. The entire objective of the Constitution
in establishing and dignifying the Civil Service on the basis of merit, would be thus
negated.
Of course a position may be declared both highly technical and con dential, as
the supreme interests of the state may require. But the position of plaintiff-appellant
Corpus is not of this category.
The decision in De los Santos vs. Mallare, 87 Phil. 289, relied upon by the
appellant Bank, is not applicable, since said case involved the o ce of city engineer,
that the court expressly found to be "neither primarily con dential, policy determining
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 nor highly technical" (at p. 297, in fine).
Turning now to the appeal of plaintiff Marino R. Corpus. The latter complains rst
against the allowance of only P5,000.00 attorneys' fees by the court below, stressing
that the stipulation of facts between the parties clearly recites that Corpus had agreed
to pay his attorney P20,000.00 as fees. It is to be noted, however, that the agreement
between client and lawyer can not bind the other party who was a stranger to the fee
contract. While the Civil Code allows a party to recover reasonable counsel fees by way
of damages, such fees must lie primarily in the discretion of the trial court, and no
abuse of that discretion is here shown. The same thing can be said as to plaintiff's
recovery of moral damages: the trial court was evidently not satis ed with that such
damages were adequately proved, and on the record, we do not believe we would be
warranted in interfering with its judgment.
The claim for exemplary damages must presuppose the existence of the
circumstances enumerated in Articles 2231 and 2232 of the Civil Code. That is
essentially a question of fact that lies within province of the court a quo, and we do not
believe that in opining that the position of Corpus was one dependent on con dence,
the defendant Monetary Board necessarily acted with vindictiveness or wantonness,
and not in the exercise of honest judgment.
WHEREFORE, the decision appealed from is hereby a rmed, without special
pronouncement as to costs.
Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
Bengzon, C.J., and Bautista Angelo, J., took no part.
Zaldivar, J., concurs in the separate opinion of Justice J.P. Bengzon.

Separate Opinions
BENGZON, J.P. , J., concurring :

I agree with the decision because, as stated therein, in this particular case the so-
called "loss of con dence" is a clear afterthought resorted to only when the charges
subject-matter of the investigation could not be substantiated. The resolution of the
Monetary Board considering the petitioner resigned, stated that his position was
"primarily con dential" in addition to its being "highly technical", as declared by the
President, thereby noticeably seeking to put it within a category where "loss of
con dence" operates to terminate the employment. Furthermore, a reference to former
charges against petitioner which had already been disposed of prior to his promotion,
obviously provides no apparent basis for the stand therein taken. As a result, the
alleged "loss of con dence" cannot be relied upon as a reason for petitioner's
dismissal. This point, I believe, su ces to a rm the decision of the court a quo with
respect to respondents' appeal.

A ruling on the far-reaching question of whether or not "loss of con dence" is a

lawful ground for dismissal from a highly technical position in the Civil Service should to
my mind, await the instance when it is absolutely required in deciding a case. A further
discussion could then be pursued on: (1) a highly technical position that involves
utmost con dence, e.g ., that of a scientist in an Atomic Energy Research O ce dealing
with secrets that affect security of the State; (2) the rule as to policy determining
positions; and (3) whether Section 1, Article XII of the Constitution speaks of "policy-
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 determining, primarily con dential or highly technical in nature" disjunctively or
together.
Consequently, I reserve my view as to whether incumbents of highly technical
positions in the Civil Service may or may not be removed for "loss of con dence in a
proper case, and I concur with the decision in all other respects.

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