G.R. No. 104226 August 12, 1993
CONCHITA ROMUALDEZ-YAP, petitioner, vs. THE CIVIL SERVICE COMMISSION and THE PHILIPPINE NATIONAL BANK, respondents.

FACTS

Petitioner Conchita Romualdez-Yap started working with the Philippine National Bank (PNB) in 1972 and, after several promotions, was appointed Senior Vice President assigned to the Fund Transfer Department in 1983. From April 1, 1986, to February 20, 1987, she was on a duly approved leave of absence. While she was on leave, Executive Order No. 80 (Revised Charter of the PNB) was approved on December 3, 1986, authorizing the bank’s reorganization. Pursuant to the reorganization plan, the Fund Transfer Department was abolished, and its functions were transferred to the International Department. Consequently, PNB notified petitioner of her separation from the service in a letter dated January 30, 1987, received by her secretary on February 16, 1987, stating the separation was effective February 16, 1986 (which was later claimed to be a typographical error, with the correct date being February 16, 1987). Petitioner appealed to the Civil Service Commission (CSC) via a letter dated August 4, 1989. The CSC, through Chairman Samilo N. Barlongay, upheld the validity of her separation in a letter/opinion dated August 30, 1989. Petitioner filed a motion for reconsideration dated March 5, 1990, arguing her separation was illegal and in bad faith because the termination date preceded the effectivity of EO No. 80 and the 1987 Constitution, and because the Fund Transfer Department was later restored. The CSC denied the motion in Resolution No. 92-201, dated January 30, 1992, ruling the reorganization was done in good faith for economy and efficiency, and that petitioner failed to seasonably assert her rights. Petitioner then filed this special civil action for certiorari under Rule 65.

ISSUE

1. Whether there was bad faith in the reorganization of PNB resulting in petitioner’s separation.
2. Whether the CSC erroneously applied the Dario v. Mison doctrine.
3. Whether the CSC erroneously applied the one-year prescriptive period for quo warranto proceedings to petitioner’s case.

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the assailed CSC resolution.
1. On the issue of bad faith, the Court found the reorganization was pursued in good faith. EO No. 80 authorized reorganization to achieve greater efficiency and economy. PNB reduced its positions from 7,537 to 5,405, a 28% reduction, which included senior officer positions. Petitioner’s Senior Vice President position in the Fund Transfer Department was one of five such positions abolished, and the department’s functions were merged with the International Department. The Court agreed with the CSC that petitioner failed to substantiate her claim of bad faith with clear and convincing evidence. The typographical error in the notice (stating 1986 instead of 1987) did not prove bad faith, and the subsequent restoration of the Fund Transfer Department in 1991, over four years later due to improved financial capability and headed by a lower-ranked Vice President, did not indicate the original abolition was in bad faith.
2. On the application of Dario v. Mison, the Court held the CSC correctly applied the doctrine, which requires good faith in a reorganization, typically for economy or efficiency. The records substantiated that PNB’s reorganization was for these purposes, and the abolition of petitioner’s position was incidental to the reduction in force.
3. On the prescriptive period, the Court ruled that petitioner’s action was barred by laches. She was separated on February 16, 1987, but her first recorded appeal to the CSC was on August 4, 1989, over two years later. By her inaction, she was considered to have acquiesced to her separation. The Court cited jurisprudence that the one-year period for filing a quo warranto proceeding is not merely permissive but mandatory, and failure to file within that period results in the loss of the right to the office.