G.R. No. 150454 - GSP Manufacturing Corp. vs. Cabanban

On June 7, 1962, petitioners and other reserve officers similarly situated filed a petition before the Court of First Instance of Rizal.
The petition sought to enjoin the Secretary of National Defense and the Chief of Staff from reverting the petitioners to inactive status.
Petitioners challenged the reversal orders on the ground that they violated Section 3 of Republic Act No. 2334, which exempted certain reserve officers from compulsory reversion as provided in Section 2 of the same law.

Petitioners were reserve officers in active service with at least five years of military service prior to May 16, 1962.
Under Republic Act No. 2334, the Chief of Staff created a Board of Officers by order dated May 16, 1962.

The Board was composed of Col. Rigoberto J. Atienza (chairman), Col. Pedro J. Bartolome, Col. Santiago I. Concepcion, Col. Marcelo S. Castillo, Capt. Emilio B. Liwanag, Lt. Col. Arturo delos Reyes, and Lt. Col. Felipe E. Cantor as secretary.

The Board applied detailed criteria, combining legal guidelines and additional factors, to decide which reserve officers should be retained.
Approximately 1,400 reserve officers, including petitioners, were selected for retention, although only 54 were deemed retirable.
The selection, as evidenced by various reports, was intended to retain officers in the active service for a term of one year from June 19, 1962, subject to periodic reassessment.

On April 24, 1962, a warning order was issued by the Chief of Staff reverting a group of reserve officers, including some petitioners, to inactive status.
A subsequent warning order on May 22, 1962, alerted all reserve officers covered by Republic Act No. 2334, regardless of recommended retention, to prepare for reversion.
A flash radiogram confirmed the list of reserve officers to be reverted on June 19, 1962.

Petitioners requested the respondent, the Secretary of National Defense, to modify the reversion orders to include a clause granting the payment of accumulated vacation and sick leaves at full pay.
Specifically, petitioner Capt. J. Antonio M. Carpio sent a letter asking for the nullification of the reversing orders on the basis that they were contrary to law.
The Secretary refused the requests, stating that petitioners could seek relief in court if they desired.

Section 3 of Republic Act No. 2334 defined that the selection for retention of reserve officers was to be made by a Board of Officers, and included a proviso that exempted certain categories.
Circular No. 17 (dated November 23, 1959) provided detailed rules for the individual selection process.

It held that such selection was not intended to be permanent but was subject to periodic review based on performance and the changing needs of the Armed Forces.

The unnumbered Standing Operating Procedure declared that decisions of the Board were “final and unappealable.”

Petitioners contended that their selection for retention rendered their status permanent, final, and unappealable.
They argued that this selection barred any intervention by higher authorities—namely, the President, the Secretary of National Defense, or the Chief of Staff—from modifying or reversing the Board’s decision.

Petitioners further argued they were entitled to “enjoyed leave” benefits by aligning the effective date of reversion with the end of their accumulated leave.
They also claimed entitlement to the gratuity under Section 4 of Republic Act No. 2334 upon reversion to inactive status.

Whether the selection for retention made by the Board of Officers under Republic Act No. 2334 creates a status for reserve officers that is permanent, final, conclusive, and unappealable.

Can the Board’s decision, which is stated to be “final and unappealable” in its Standing Operating Procedure, override the authority of the President, the Secretary of National Defense, or the Chief of Staff?
Is the selection process merely a recommendatory exercise or does it confer an absolute right to remain in active service?

Whether petitioners are entitled to have the effective date of reversion coincide with the exhaustion of their accumulated “enjoyed leave” and to receive full payment corresponding to said leave.

Does Section 28G of the Revised Administrative Code provide for an automatic adjustment of the effective date of reversion in light of accumulated leaves?
To what extent are the petitioners’ accrued benefits, including the gratuity, protected or determinable under existing law?