Case Summary (G.R. No. L-32312)
Facts and Procedural Background
Zafra Financing Enterprise extended loans to public school teachers in Cebu City. The teachers executed promissory notes and special powers of attorney in favor of Zafra, authorizing the company to collect their salary checks from the Cebu City Division Office of the Bureau of Public Schools. Aurelio Tiro, as Superintendent, forbade the collection of these checks based on Circular No. 21, series 1969, issued by the Director of Public Schools, which prohibited payment of salaries to persons other than the employee concerned, except under limited conditions.
Zafra sued to compel Tiro to honor the special powers of attorney and declared Circular No. 21 illegal, seeking also attorney’s fees and damages. The trial court granted Zafra’s request to enforce the collection but denied claims for attorney’s fees and damages, reasoning that Tiro acted in good faith under the Circular. Tiro appealed, seeking reversal of that decision.
Circular No. 21: Content and Purpose
Circular No. 21, series 1969, prohibits the payment of salary to any person other than the employee except where the designated person is an immediate family member, or upon proper authorization by the Assistant Executive Secretary for Legal and Administrative Matters. It aims to discourage delegation of salary collection to others via powers of attorney, which allegedly undermines employee morale and efficiency.
Legal Issue
The main issue concerns the validity and enforceability of Circular No. 21 and whether the Superintendent had the authority to withhold payment of salaries to third parties, notwithstanding the special powers of attorney executed by teachers in favor of Zafra.
Ruling and Legal Reasoning
The Supreme Court upheld the validity and enforceability of Circular No. 21. It reasoned that a government employee’s salary check remains the property of the government until physically delivered to the employee, who has no power to assign or transfer the check without government consent. Accordingly, Tiro’s refusal to honor the special powers of attorney was lawful.
The Court anchored its decision on the authority granted to the Department Head under Section 79 (b) of the Revised Administrative Code, which permits promulgation of rules and circulars necessary for the efficient administration of government offices. It further cited Section 21 of the Magna Carta for Teachers (R.A. No. 4670), which prohibits deductions from teachers’ salaries except under specific legal authority or written authorization for certain dues.
The Court also rejected Zafra’s argument that Circular No. 21 impaired contractual obligations with teachers, clarifying that the Circular does not prevent collection of loans but merely excludes the government from involvement in salary collec
...continue readingCase Syllabus (G.R. No. L-32312)
Case Background and Parties Involved
- The case arose from Civil Case No. 11616 filed before the defunct Court of First Instance of Cebu.
- Zafra Financing Enterprise sued Aurelio Tiro in his official capacity as City Superintendent of Schools in Cebu City.
- Zafra Financing Enterprise had extended loans to public school teachers in Cebu City, who executed promissory notes and special powers of attorney in favor of Zafra for the collection of their salary checks.
- Aurelio Tiro, acting on behalf of the Division Office of the Bureau of Public Schools in Cebu City, forbade the collection of salary checks by third parties based on Circular No. 21, series 1969.
Circular No. 21, Series 1969: Prohibition on Payment of Salary to Persons Other Than the Employee Concerned
- Issued by the Director of Public Schools on December 5, 1969.
- The circular reiterates Memorandum Order No. 93 dated February 5, 1968, prohibiting payment of salary to anyone other than the employee except in specific cases.
- It discourages the practice of employees delegating collection of salary checks to attorneys-in-fact or other parties to satisfy obligations.
- Payment to authorized collectors is allowed only if the authorized person is an immediate family member or if there is proper authorization by the Assistant Executive Secretary for Legal and Administrative Matters with the recommendation of the Financial Assistant.
- Prior inconsistent orders or regulations are revoked.
- The circular directed all cashiers or disbursing