Labor Relations Basic Concepts Cases

G.R. No. L-12582 January 28, 1961 LVN PICTURES, INC., petitioner-appellant, vs. PHILIPPINE MUSICIANS Guild (FFW) and COURT OF INDUSTRIAL RELATIONS, respondents-appellees. x---------------------------------------------------------x G.R. No. L-12598 January 28, 1961 SAMPAGUITA PICTURES, INC., petitioner-appellant, vs. PHILIPPINE MUSICIANS Guild (FFW) and COURT OF INDUSTRIAL RELATIONS, respondents-appellees. CONCEPCION, J.: Petitioners herein, LVN Pictures, Inc. and Sampaguita Pictures, Inc. seek a review by certiorari of an order of the Court of Industrial Relations in Case No. 306-MC thereof, certifying the Philippine Musicians Guild (FFW), petitioner therein and respondent herein, as the sole and exclusive bargaining agency of all musicians working with said companies, as well as with the Premiere Productions, Inc., which has not appealed. The appeal of LVN Pictures, Inc., has been docketed as G.R. No. L-12582, whereas G.R. No. L-12598 is the appeal of Sampaguita Pictures, Inc. Involving as they do the same order, the two cases have been jointly heard in this Court, and will similarly be disposed of. In its petition in the lower court, the Philippine Musicians Guild (FFW), hereafter referred to as the Guild, averred that it is a duly registered legitimate labor organization; that LVN Pictures, Inc., Sampaguita Pictures, Inc., and Premiere Productions, Inc. are corporations, duly organized under the Philippine laws, engaged in the making of motion pictures and in the processing and distribution thereof; that said companies employ musicians for the purpose of making music recordings for title music, background music, musical numbers, finale music and other incidental music, without which a motion picture is incomplete; that ninety-five (95%) percent of all the musicians playing for the musical recordings of said companies are members of the Guild; and that the same has no knowledge of the existence of any other legitimate labor organization representing musicians in said companies. Premised upon these allegations, the Guild prayed that it be certified as the sole and exclusive bargaining agency for all musicians working in the aforementioned companies. In their respective answers, the latter denied that they have any musicians as employees, and alleged that the musical numbers in the filing of the companies are furnished by independent contractors. The lower court, however, rejected this pretense and sustained the theory of the Guild, with the result already adverted to. A reconsideration of the order complained of having been denied by the Court en banc, LVN Pictures, inc., and Sampaguita Pictures, Inc., filed these petitions for review for certiorari. Apart from impugning the conclusion of the lower court on the status of the Guild members as alleged employees of the film companies, the LVN Pictures, Inc., maintains that a petition for certification cannot be entertained when the existence of employer-employee relationship between the parties is contested. However, this

claim is neither borne out by any legal provision nor supported by any authority. So long as, after due hearing, the parties are found to bear said relationship, as in the case at bar, it is proper to pass upon the merits of the petition for certification. It is next urged that a certification is improper in the present case, because, "(a) the petition does not allege and no evidence was presented that the alleged musiciansemployees of the respondents constitute a proper bargaining unit, and (b) said alleged musicians-employees represent a majority of the other numerous employees of the film companies constituting a proper bargaining unit under section 12 (a) of Republic Act No. 875." The absence of an express allegation that the members of the Guild constitute a proper bargaining unit is fatal proceeding, for the same is not a "litigation" in the sense in which this term is commonly understood, but a mere investigation of a nonadversary, fact finding character, in which the investigating agency plays the part of a disinterested investigator seeking merely to ascertain the desires of employees as to the matter of their representation. In connection therewith, the court enjoys a wide discretion in determining the procedure necessary to insure the fair and free choice of 1 bargaining representatives by employees. Moreover, it is alleged in the petition that the Guild it a duly registered legitimate labor organization and that ninety-five (95%) percent of the musicians playing for all the musical recordings of the film companies involved in these cases are members of the Guild. Although, in its answer, the LVN Pictures, Inc. denied both allegations, it appears that, at the hearing in the lower court it was merely the status of the musicians as its employees that the film companies really contested. Besides, the substantial difference between the work performed by said musicians and that of other persons who participate in the production of a film, and the peculiar circumstances under which the services of that former are engaged and rendered, suffice to show that they constitute a proper bargaining unit. At this juncture, it should be noted that the action of the lower court in deciding upon an appropriate unit for collective bargaining purposes is discretionary (N.L.R.B. v. May Dept. Store Co., 66 Sup. Ct. 468. 90 L. ed. 145) and that its judgment in this respect is entitled to almost complete finality, unless its action is arbitrary or capricious (Marshall Field & Co. v. N.L.R.B. [C.C.A. 19431, 135 F. 2d. 891), which is far from being so in the cases at bar. Again, the Guild seeks to be, and was, certified as the sole and exclusive bargaining agency for the musicians working in the aforesaid film companies. It does not intend to represent the other employees therein. Hence, it was not necessary for the Guild to allege that its members constitute a majority of all the employees of said film companies, including those who are not musicians. The real issue in these cases, is whether or not the musicians in question are employees of the film companies. In this connection the lower court had the following to say: As a normal and usual course of procedure employed by the companies when a picture is to be made, the producer invariably chooses, from the musical directors,

Labor Relations Basic Concepts Cases

one who will furnish the musical background for a film. A price is agreed upon verbally between the producer and musical director for the cost of furnishing such musical background. Thus, the musical director may compose his own music specially written for or adapted to the picture. He engages his own men and pays the corresponding compensation of the musicians under him. When the music is ready for recording, the musicians are summoned through 'call slips' in the name of the film company (Exh 'D'), which show the name of the musician, his musical instrument, and the date, time and place where he will be picked up by the truck of the film company. The film company provides the studio for the use of the musicians for that particular recording. The musicians are also provided transportation to and from the studio by the company. Similarly, the company furnishes them meals at dinner time. During the recording sessions, the motion picture director, who is an employee of the company, supervises the recording of the musicians and tells what to do in every detail. He solely directs the performance of the musicians before the camera as director, he supervises the performance of all the action, including the musicians who appear in the scenes so that in the actual performance to be shown on the screen, the musical director's intervention has stopped. And even in the recording sessions and during the actual shooting of a scene, the technicians, soundmen and other employees of the company assist in the operation. Hence, the work of the musicians is an integral part of the entire motion picture since they not only furnish the music but are also called upon to appear in the finished picture. The question to be determined next is what legal relationship exits between the musicians and the company in the light of the foregoing facts. We are thus called upon to apply R.A. Act 875. which is substantially the same as and patterned after the Wagner Act substantially the same as a Act and the TaftHartley Law of the United States. Hence, reference to decisions of American Courts on these laws on the point-at-issue is called for. Statutes are to be construed in the light of purposes achieved and the evils sought to be remedied. (U.S. vs. American Tracking Association, 310 U.S. 534, 84 L. ed. 1345.) . In the case of National Labor Relations Board vs. Hearts Publication , 322 U.S. 111, the United States Supreme Court said the Wagner Act was designed to avert the 'substantial obstruction to the free flow of commerce which results from strikes and other forms of industrial unrest by eliminating the causes of the unrest. Strikes and industrial unrest result from the refusal of employers' to bargain collectively and the inability of workers to bargain successfully for improvement in their working conditions. Hence, the purposes of the Act are to encourage collective bargaining and

to remedy the workers' inability to bargaining power, by protecting the exercise of full freedom of association and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment.' The mischief at which the Act is aimed and the remedies it offers are not confined exclusively to 'employees' within the traditional legal distinctions, separating them from 'independent contractor'. Myriad forms of service relationship, with infinite and subtle variations in the term of employment, blanket the nation's economy. Some are within this Act, others beyond its coverage. Large numbers will fall clearly on one side or on the other, by whatever test may be applied. Inequality of bargaining power in controversies of their wages, hours and working conditions may characterize the status of one group as of the other. The former, when acting alone may be as helpless in dealing with the employer as dependent on his daily wage and as unable to resist arbitrary and unfair treatment as the latter.' To eliminate the causes of labor dispute and industrial strike, Congress thought it necessary to create a balance of forces in certain types of economic relationship. Congress recognized those economic relationships cannot be fitted neatly into the containers designated as 'employee' and 'employer'. Employers and employees not in proximate relationship may be drawn into common controversies by economic forces and that the very dispute sought to be avoided might involve 'employees' who are at times brought into an economic relationship with 'employers', who are not their 'employers'. In this light, the language of the Act's definition of 'employee' or 'employer' should be determined broadly in doubtful situations, by underlying economic facts rather than technically and exclusively established legal classifications. (NLRB vs. Blount, 131 F [2d] 585.) In other words, the scope of the term 'employee' must be understood with reference to the purposes of the Act and the facts involved in the economic relationship. Where all the conditions of relation require protection, protection ought to be given . By declaring a worker an employee of the person for whom he works and by recognizing and protecting his rights as such, we eliminate the cause of industrial unrest and consequently we promote industrial peace, because we enable him to negotiate an agreement which will settle disputes regarding conditions of employment, through the process of collective bargaining. The statutory definition of the word 'employee' is of wide scope. As used in the Act, the term embraces 'any employee' that is all employees in the conventional as well in the legal sense expect those excluded by express provision. (Connor Lumber Co., 11 NLRB 776.). It is the purpose of the policy of Republic Act 875; (a) To eliminate the causes of industrial unrest by protecting the exercise of their right to self-organization for the purpose of collective bargaining. (b) To promote sound stable industrial peace and the advancement of the general welfare, and the best interests of employers and

Labor Relations Basic Concepts Cases

employees by the settlement of issues respecting terms and conditions of employment through the process of collective bargaining between employers and representatives of their employees. The primary consideration is whether the declared policy and purpose of the Act can be effectuated by securing for the individual worker the rights and protection guaranteed by the Act. The matter is not conclusively determined by a contract which purports to establish the status of the worker, not as an employee. The work of the musical director and musicians is a functional and integral part of the enterprise performed at the same studio substantially under the direction and control of the company. In other words, to determine whether a person who performs work for another is the latter's employee or an independent contractor, the National Labor Relations relies on 'the right to control' test. Under this test an employer-employee relationship exist where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to be used in reaching the end. (United Insurance Company, 108, NLRB No. 115.). Thus, in said similar case of Connor Lumber Company, the Supreme Court said:. 'We find that the independent contractors and persons working under them are employees' within the meaning of Section 2 (3) of its Act. However, we are of the opinion that the independent contractors have sufficient authority over the persons working under their immediate supervision to warrant their exclusion from the unit. We shall include in the unit the employees working under the supervision of the independent contractors, but exclude the contractors.' 'Notwithstanding that the employees are called independent contractors', the Board will hold them to be employees under the Act where the extent of the employer's control over them indicates that the relationship is in reality one of employment. (John Hancock Insurance Co., 2375-D, 1940, Teller, Labor Dispute Collective Bargaining, Vol.). The right of control of the film company over the musicians is shown (1) by calling the musicians through 'call slips' in 'the name of the company; (2) by arranging schedules in its studio for recording sessions; (3) by furnishing transportation and meals to musicians; and (4) by supervising and directing in detail, through the motion picture director, the performance of the musicians before the camera, in order to suit the music they are playing to the picture which is being flashed on the screen. Thus, in the application of Philippine statutes and pertinent decisions of the United States Courts on the matter to the facts established in this case, we cannot but conclude that to effectuate the policies of the Act and by virtue of the 'right of control' test, the members of the Philippine Musicians Guild are employees of the three film

companies and, therefore, entitled to right of collective bargaining under Republic Act No. 875. In view of the fact that the three (3) film companies did not question the union's majority, the Philippine Musicians Guild is hereby declared as the sole collective bargaining representative for all the musicians employed by the film companies." We are fully in agreement with the foregoing conclusion and the reasons given in support thereof. Both are substantially in line with the spirit of our decision in Maligaya Ship Watchmen Agency vs. Associated Watchmen and Security Union, L12214-17 (May 28, 1958). In fact, the contention of the employers in the Maligaya cases, to the effect that they had dealt with independent contractors, was stronger than that of the film companies in these cases. The third parties with whom the management and the workers contracted in the Maligaya cases were agencies registered with the Bureau of Commerce and duly licensed by the City of Manila to engage in the business of supplying watchmen to steamship companies, with permits to engage in said business issued by theCity Mayor and the Collector of Customs. In the cases at bar, the musical directors with whom the film companies claim to have dealt with had nothing comparable to the business standing of said watchmen agencies. In this respect, the status of said musical directors is analogous to that of the alleged independent contractor in Caro vs. Rilloraza, L-9569 (September 30, 1957), with the particularity that the Caro case involved the enforcement of the liability of an employer under the Workmen's Compensation Act, whereas the cases before us are merely concerned with the right of the Guild to represent the musicians as a collective bargaining unit. Hence, there is less reason to be legalistic and technical in these cases, than in the Caro case. Herein, petitioners-appellants cite, in support of their appeal, the cases of Sunripe Coconut Product Co., Inc vs. CIR (46 Off. Gaz., 5506, 5509), Philippine Manufacturing Co. vs. Santos Vda. de Geronimo , L-6968 (November 29, 1954), Viana vs. Al-Lagadan, L-8967 (May 31, 1956), and Josefa Vda. de Cruz vs. The Manila Hotel Co. (53 Off. Gaz., 8540). Instead of favoring the theory of said petitioners-appellants, the case of the Sunripe Coconut Product Co., Inc. is authority for herein respondents-appellees. It was held that, although engaged as pieceworkers, under the "pakiao" system, the "parers" and "shellers" in the case were, not independent contractor, butemployees of said company, because "the requirement imposed on the 'parers' to the effect that 'the nuts are pared whole or that there is not much meat wasted,' in effect limits or controls the means or details by which said workers are to accomplish their services" as in the cases before us. The nature of the relation between the parties was not settled in the Viana case, the same having been remanded to the Workmen's Compensation Commission for further evidence. The case of the Philippine Manufacturing Co. involved a contract between said company and Eliano Garcia, who undertook to paint a tank of the former. Garcia, in

Labor Relations Basic Concepts Cases

turn engaged the services of Arcadio Geronimo, a laborer, who fell while painting the tank and died in consequence of the injuries thus sustained by him. Inasmuch as the company was engaged in the manufacture of soap, vegetable lard, cooking oil and margarine, it was held that the connection between its business and the painting aforementioned was purely casual; that Eliano Garcia was an independent contractor; that Geronimo was not an employee of the company; and that the latter was not bound, therefore, to pay the compensation provided in the Workmen's Compensation Act. Unlike the Philippine Manufacturing case, the relation between the business of herein petitioners-appellants and the work of the musicians is not casual. As held in the order appealed from which, in this respect, is not contested by herein petitionersappellants "the work of the musicians is an integral part of the entire motion picture." Indeed, one can hardly find modern films without music therein. Hence, in the Caro case (supra), the owner and operator of buildings for rent was held bound to pay the indemnity prescribed in the Workmen's Compensation Act for the injury suffered by a carpenter while working as such in one of said buildings even though his services had been allegedly engaged by a third party who had directly contracted with said owner. In other words, the repair work had not merely a casual connection with the business of said owner. It was a necessary incident thereof, just as music is in the production of motion pictures. The case of Josefa Vda. de Cruz vs. The Manila Hotel Co. , L-9110 (April 30, 1957) differs materially from the present cases. It involved the interpretation of Republic Act No. 660, which amends the law creating and establishing the Government Service Insurance System. No labor law was sought to be construed in that case. In act, the same was originally heard in the Court of First Instance of Manila, the decision of which was, on appeal, affirmed by the Supreme Court. The meaning or scope if the term "employee," as used in the Industrial Peace Act (Republic Act No. 875), was not touched therein. Moreover, the subject matter of said case was a contract between the management of the Manila Hotel, on the one hand, and Tirso Cruz, on the other, whereby the latter greed to furnish the former the services of his orchestra, consisting of 15 musicians, including Tirso Cruz, "from 7:30 p.m. to closing time daily." In the language of this court in that case, "what pieces the orchestra shall play, and how the music shall be arranged or directed, the intervals and other details such are left to the leader'sdiscretion." This is not situation obtaining in the case at bar. The musical directors above referred to have no such control over the musicians involved in the present case. Said musical directors control neither the music to be played, nor the musicians playing it. The film companies summon the musicians to work, through the musical directors. The film companies, through the musical directors, fix the date, the time and the place of work. The film companies, not the musical directors, provide the transportation to and from the studio. The film companies furnish meal at dinner time. What is more in the language of the order appealed from "during the recording sessions, the motion picture director who is an employee of the company" not the

musical director "supervises the recording of the musicians and tells them what to do in every detail". The motion picture director not the musical director "solely directs and performance of the musicians before the camera ". The motion picture director "supervises the performance of all the actors, including the musicians who appear in the scenes, so that in the actual performance to be shown in the screen, the musical director's intervention has stopped." Or, as testified to in the lower court, "the movie director tells the musical director what to do; tells the music to be cut or tells additional music in this part or he eliminates the entire music he does not (want) or he may want more drums or move violin or piano, as the case may be". The movie director "directly controls the activities of the musicians." He "says he wants more drums and the drummer plays more" or "if he wants more violin or he does not like that.". It is well settled that "an employer-employee relationship exists . . .where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end . . . ." (Alabama Highway Express Co., Express Co., v. Local 612, 108S. 2d. 350.) The decisive nature of said control over the "means to be used", is illustrated in the case of Gilchrist Timber Co., et al., Local No. 2530 (73 NLRB No. 210, pp. 1197, 1199-1201), in which, by reason of said control, the employer-employee relationship was held to exist between the management and the workers, notwithstanding the intervention of an alleged independent contractor, who had, and exercise, the power to hire and fire said workers. The aforementioned control over the means to be used" in reading the desired end is possessed and exercised by the film companies over the musicians in the cases before us. WHEREFORE, the order appealed from is hereby affirmed, with costs against petitioners herein. It is so ordered.

Labor Relations Basic Concepts Cases

G.R. No. L-32245 May 25, 1979 DY KEH BENG, petitioner, vs. INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL., respondents. DE CASTRO, J.: Petitioner Dy Keh Beng seeks a review by certiorari of the decision of the Court of Industrial Relations dated March 23, 1970 in Case No. 3019-ULP and the Court's Resolution en banc of June 10, 1970 affirming said decision. The Court of Industrial Relations in that case found Dy Keh Beng guilty of the unfair labor practice acts alleged and order him to reinstate Carlos Solano and Ricardo Tudla to their former jobs with backwages from their respective dates of dismissal until fully reinstated without loss to their right of 1 seniority and of such other rights already acquired by them and/or allowed by law. Now, Dy Keh Beng assigns the following errors as having been committed by the Court of Industrial Relations: I. RESPONDENT COURT ERRED IN FINDING THAT RESPONDENTS SOLANO AND TUDLA WERE EMPLOYEES OF PETITIONERS. II. RESPONDENT COURT ERRED IN FINDING THAT RESPONDENTS SOLANO AND TUDLA WERE DISMISSED FROM THEIR EMPLOYMENT BY PETITIONER. III. RESPONDENT COURT ERRED IN FINDING THAT THE TESTIMONIES ADDUCED BY COMPLAINANT ARE CONVINCING AND DISCLOSES (SIC) A PATTERN OF DISCRIMINATION BY THE PETITIONER HEREIN. IV. RESPONDENT COURT ERRED IN DECLARING PETITIONER GUILTY OF UNFAIR LABOR PRACTICE ACTS AS ALLEGED AND DESCRIBED IN THE COMPLAINT. V. RESPONDENT COURT ERRED IN PETITIONER TO REINSTATE RESPONDENTS TO THEIR FORMER JOBS WITH BACKWAGES FROM THEIR RESPECTIVE DATES OF DISMISSALS UNTIL FINALLY REINSTATED WITHOUT LOSS TO THEIR RIGHT OF SENIORITY AND OF SUCH OTHER RIGHTS ALREADY ACQUIRED BY THEM AND/OR ALLOWED BY LAW. The facts as found by the Hearing Examiner are as follows: A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory, for discriminatory acts within the meaning of Section 4(a), sub3 paragraph (1) and (4). Republic Act No. 875, by dismissing on September 28 and 29, 1960, respectively, Carlos N. Solano and Ricardo Tudla for their union activities. After preliminary investigation was conducted, a case was filed in the Court of
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Industrial Relations for in behalf of the International Labor and Marine Union of the Philippines and two of its members, Solano and Tudla In his answer, Dy Keh Beng contended that he did not know Tudla and that Solano was not his employee because the latter came to the establishment only when there was work which he did on pakiaw basis, each piece of work being done under a separate contract. Moreover, Dy Keh Beng countered with a special defense of simple extortion committed by the head of the labor union, Bienvenido Onayan. After trial, the Hearing Examiner prepared a report which was subsequently adopted in toto by the Court of Industrial Relations. An employee-employer relationship was found to have existed between Dy Keh Beng and complainants Tudla and Solano, although Solano was admitted to have worked on piece 4 basis. The issue therefore centered on whether there existed an employee employer relation between petitioner Dy Keh Beng and the respondents Solano and Tudla . According to the Hearing Examiner, the evidence for the complainant Union tended to show that Solano and Tudla became employees of Dy Keh Beng from May 2, 1953 5 and July 15, 1955, respectively, and that except in the event of illness, their work with the establishment was continuous although their services were compensated on piece basis. Evidence likewise showed that at times the establishment had eight (8) workers and never less than five (5); including the complainants, and that 6 complainants used to receive ?5.00 a day. sometimes less. According to Dy Keh Beng, however, Solano was not his employee for the following reasons: (1) Solano never stayed long enought at Dy's establishment; (2) Solano had to leave as soon as he was through with the (3) order given him by Dy; (4) When there were no orders needing his services there was nothing for him to do; (5) When orders came to the shop that his regular workers could not fill it was then that Dy went to his address in Caloocan and fetched him for these orders; and (6) Solano's work with Dy's establishment was not continuous. ,
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According to petitioner, these facts show that respondents Solano and Tudla are only 8 piece workers, not employees under Republic Act 875, where an employee is referred to as shall include any employee and shag not be limited to the employee of a particular employer unless the Act explicitly states otherwise and shall include any individual whose work has ceased as a consequence of, or in connection with any current labor

Labor Relations Basic Concepts Cases

dispute or because of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment. while an employer
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includes any person acting in the interest of an employer, directly or indirectly but shall not include any labor organization (otherwise than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization. Petitioner really anchors his contention of the non-existence of employee-employer relationship on the control test. He points to the case of Madrigal Shipping Co., Inc. v. Nieves Baens del Rosario, et al., L-13130, October 31, 1959, where the Court ruled that: The test ... of the existence of employee and employer relationship is whether there is an understanding between the parties that one is to render personal services to or for the benefit of the other and recognition by them of the right of one to order and control the other in the performance of the work and to direct the manner and method of its performance. Petitioner contends that the private respondents "did not meet the control test in the fight of the ... definition of the terms employer and employee, because there was no evidence to show that petitioner had the right to direct the manner and method of 10 respondent's work. Moreover, it is argued that petitioner's evidence showed that "Solano worked on a pakiaw basis" and that he stayed in the establishment only when there was work. While this Court upholds the control test under which an employer-employee relationship exists "where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end, " it finds no merit with petitioner's arguments as stated above. It should be borne in mind that the control test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the 12 right. Considering the finding by the Hearing Examiner that the establishment of Dy 13 Keh Beng is "engaged in the manufacture of baskets known as kaing, it is natural to expect that those working under Dy would have to observe, among others, Dy's requirements of size and quality of thekaing. Some control would necessarily be exercised by Dy as the making of the kaing would be subject to Dy's specifications. Parenthetically, since the work on the baskets is done at Dy's establishments, it can be inferred that the proprietor Dy could easily exercise control on the men he employed. As to the contention that Solano was not an employee because he worked on piece basis, this Court agrees with the Hearing Examiner that
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circumstances must be construed to determine indeed if payment by the piece is just a method of compensation and does not define the essence of the relation. Units of time ... and units of work are in establishments like respondent (sic) just yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon. We cannot construe payment by the piece where work is done in such an establishment so as to put the worker completely at liberty to turn him out and take in another at pleasure. At this juncture, it is worthy to note that Justice Perfecto, concurring with Chief Justice Ricardo Paras who penned the decision in "Sunrise Coconut Products Co. v. Court of Industrial Relations" (83 Phil..518, 523), opined that judicial notice of the fact that the so-called "pakyaw" system mentioned in this case as generally practiced in our country, is, in fact, a labor contract -between employers and employees, between capitalists and laborers. Insofar as the other assignments of errors are concerned, there is no showing that the Court of Industrial Relations abused its discretion when it concluded that the findings of fact made by the Hearing Examiner were supported by evidence on the record. Section 6, Republic Act 875 provides that in unfair labor practice cases, the factual findings of the Court of Industrial Relations are conclusive on the Supreme Court, if supported by substantial evidence. This provision has been put into effect in a long line of decisions where the Supreme Court did not reverse the findings of fact of the 14 Court of Industrial Relations when they were supported by substantial evidence. Nevertheless, considering that about eighteen (18) years have already elapsed from 15 the time the complainants were dismissed, and that the decision being appealed ordered the payment of backwages to the employees from their respective dates of dismissal until finally reinstated, it is fitting to apply in this connection the formula for backwages worked out by Justice Claudio Teehankee in "cases not terminated 16 sooner." The formula cans for fixing the award of backwages without qualification and deduction to three years, "subject to deduction where there are mitigating circumstances in favor of the employer but subject to increase by way of exemplary 17 damages where there are aggravating circumstances. Considering there are no such circumstances in this case, there is no reason why the Court should not apply the abovementioned formula in this instance. WHEREFORE; the award of backwages granted by the Court of Industrial Relations is herein modified to an award of backwages for three years without qualification and deduction at the respective rates of compensation the employees concerned were receiving at the time of dismissal. The execution of this award is entrusted to the National Labor Relations Commission. Costs against petitioner. SO ORDERED.

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G.R. Nos. L-63550-51 January 31, 1984 RJL MARTINEZ FISHING CORPORATION and/or PENINSULA FISHING CORPORATION, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ANTONIO BOTICARIO, ISIDRO FARIOLAN, FERNANDO SEVILLA, TOTONG ROLDAN, ROGER ESQUILLA, MARIO MIRANDA, EDUARDO ESPINOSA, ALBERTO NOVERA, ANTONIO PATERNO, MARCIANO PIADORA, MARIO ROMERO, CLINITO ESQUILLA, ALEJO BATOY, BOBBY QUITREZA, ROLANDO DELA TORRE, HERNANI REVATEZ, RODOLFO SEVILLA, ROLANDO ANG, JUANITO PONPON, HOSPINIANO CALINDEZ, JOSE MABULA, DEONG DE LEON, MELENCIO CONEL and ALFREDO BULAONG, respondents. MELENCIO-HERRERA, J.: Petition for Certiorari, Prohibition and mandamus assailing the Decision of respondent National Labor Relations Commission (NLRC) in Cases Nos. AB-4-11054-81 and AB8-12354-81 entitled Antonio Boticario, et al. vs. RJL Fishing Corporation and/or Peninsula Fishing Corporation, dated November 26, 1982, as well as the Order, dated February 14, denying petitioners' Manifestation and Omnibus Motion to dismiss private respondents' appeal. The dispositive portion of the challenged resolution reads: WHEREFORE, in view of the foregoing considerations, the Decision appealed from is hereby set aside and another one entered, directing respondents-appellees: (1) to reinstate complainants-appellants to their former work, without loss of seniority rights and other privileges appertaining thereto; (2) to pay complainants-appellants full backwages computed from the date they were dismissed up to the date they are actually reinstated; (3) to pay complainants-appellants legal holiday pay, emergency living allowance and 13th month pay in accordance with law; and (4) to pay complainants-appellants who are entitled to incentive leave pay, as herein above determined, according to law. The claims for overtime pay and premium pay for holiday and rest day are dismissed. SO ORDERED. This case was originally assigned to the Second Division but because of the pendency of a lower-numbered case, G.R. No. 63474, entitled RJL Martinez Fishing Corporation vs. National Labor Relations Commission, et als.before the First Division, involving the same petitioners and their workers (albeit a different group and not exactly Identical issues), this case was transferred to the latter, Division for proper action and determination. G.R. No. 63474 was dismissed by the First Division on August 17, 1983 for lack of merit. Petitioner corporations are principally engaged in the deep-sea fishing business. Since 1978, private respondents were employed by them as stevedores at Navotas

Fish Port for the unloading of tuna fish catch from petitioners' vessels and then loading them on refrigerated vans for shipment abroad. On March 27, 1981, private respondents Antonio Boticario, and thirty (30) others, upon the premise that they are petitioners' regular employees, filed a complaint against petitioners for non-payment of overtime pay, premium pay, legal holiday pay, emergency allowance under P.D. Nos. 525, 1123, 1614, 1634, 1678, 1713, 1751, 13th month pay (P.D. 851), service incentive leave pay and night shift differential. Claiming that they were dismissed from employment on March 29, 1981 as a retaliatory measure for their having failed the said complaint private respondents filed on the said complaint, private respondents filed on April 21, 1981 another complaint against petitioners for Illegal Dismissal and for Violation of Article 118 of the Labor Code, as amended. Upon petitioners' motion, these two cases were consolidated and tried jointly. In disputing any employer-employee relationship between them, petitioners contend that private respondents are contract laborers whose work terminated upon completion of each unloading, and that in the absence of any boat arrivals, private respondents did not work for petitioners but were free to work or seek employment with other fishing boat operators. On February 25, 1982, the Labor Arbiter upheld petitioners' position ruling that the latter are extra workers, who were hired to perform specific tasks on contractual basis; that their work is intermittent depending on the arrival of fishing vessels; that if there are no fish to unload and load, they work for some other fishing boat operators; that private respondent Antonio Boticario had executed an employment contract under which he agreed to act as a labor contractor and that the other private respondents are his men; that even assuming that private respondents are employees of petitioners, their employer-employee relation is co-terminous with each unloading and loading job; that in the same manner, petitioners are not under any obligation to hire petitioners exclusively, hence, when they were not given any job on 4 March 29, 1981, no dismissal was effected but that they were merely not rehired. On April 1, 1982, private respondents received the Decision of the Labor Arbiter dismissing their complaints. On April 19, 1982, they filed an appeal before respondent NLRC, which took cognizance thereof. In its Decision of November 26, 1982, the NLRC reversed the findings of the Labor Arbiter, and resolved, as previously stated, to uphold the existence of employeremployee relationship between the parties. Petitioners resorted to a "Manifestation and Omnibus Motion to Dismiss Appeal and to Vacate and/or to Declare Null and Void the Decision of this Honorable Commission Promulgated on November 25 (should be 26), 1982" but the same was denied, hence, the instant recourse.

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As prayed for, a Temporary Restraining Order to enjoin the enforcement of the questioned decision of respondent NLRC was issued on April 20, 1983, and on August 15, 1983, the Petition was given due course by the Second Division. Petitioners submit the following issues for resolution: I. Whether or not the appeal from the decision of Labor Arbiter filed by private respondents is within the l0-day reglementary period; II. Whether or not respondent NLRC erred in reversing the decision of the Labor Arbiter despite the failure to furnish petitioners with a copy of the appeal; III. Whether or not there is an employer-employee relationship between the parties; IV. Whether or not private respondents are entitled to legal holiday pay, emergency living allowance, thirteenth month pay and incentive leave pay. 1. Petitioners, joined by the Solicitor General, contend that the appeal filed by private respondents from the Decision of the Labor Arbiter was filed out of time considering that they received copy of the same on April 1, 1982 but that they filed their appeal only on April 19, 1982, or 18 days later. If we were to reckon the 10-day reglementary period to appeal as calendar days, as held in the case of Vir-Jen Shipping and Marine 5 Services, Inc. vs. NLRC, et al. , private respondents' appeal was, indeed, out of time. However, it was clear from Vir-Jen that the calendar day basis of computation would apply only "henceforth" or to future cases. That ruling was not affected by this Court's Resolution of November 18, 1983 reconsidering its Decision of July 20, 1982. When the appeal herein was filed on April 19, 1982, the governing proviso was found in Section 7, Rule XIII of the Rules and Regulations implementing the Labor Code along with NLRC Resolution No. 1, Series of 1977, which based the computation on 6 "working days". They very face of the Notice of Decision itself indicated aggrieved party could appeal within 10 "working days" from receipt of copy of the resolution appealed from. From April 1 to April 19, 1982 is exactly ten (10) working days considering the Holy Week and the two Saturdays and Sundays that supervened in between that period. In other words, private respondents' appeal, having been filed during the time that the prevailing period of appeal was ten (10) working days and prior to the Vir-Jen case promulgated on July 20, 1982, it must be held to have been timely filed. 2. Anent the failure of private respondents to furnish petitioners with a copy of their 7 memorandum on appeal, suffice it to state that the same is not fatal to the appeal. 3. The issue of the existence of an employer-employee relationship between the parties is actually a question of fact, and the finding of the NLRC on this point is bonding upon us, the exceptions to the general rule being absent in this case. Besides the continuity of employment is not the determining factor, but rather whether the work of the laborer is part of the regular business or occupation of the

employer. We are thus in accord with the findings of respondent NLRC in this regard. Although it may be that private respondents alternated their employment on different vessels when they were not assigned to petitioners' boats, that did not affect their employee status. The evidence also establishes that petitioners had a fleet of fishing vessels with about 65 ship captains, and as private respondents contended, when they finished with one vessel, they were instructed to wait for the next. As respondent NLRC had found: We further find that the employer-employee relationship between the parties herein is not co-terminous with each loading and unloading job. As earlier shown, respondents are engaged in the business of fishing. For this purpose, they have a fleet of fishing vessels. Under this situation, respondents' activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. So that the activities performed by herein complainants, i.e. unloading the catch of tuna fish from respondents' vessel and then loading the same to refrigerated vans, are necessary or desirable in the business of respondents. This circumstances makes the employment of complainants a regular one, in the sense that it does not depend on any specific project or seasonal activity. The employment contract signed by Antonio Boticario, which described him as "labor contractor", is not really so inasmuch as wages continued to be paid by petitioners and he and the other workers were uniformly paid. He was merely asked the petitioners to recruit other workers. Besides, labor-contracting is prohibited under Sec. 9(b), Rule VIII, Book III Rules and Regulations Implementing the Labor Code as amended. Directly in point and controlling is the ruling in an analogous case, Philippine Fishing Boat Officers and Engineers Union vs. CIR, reading: The Court holds, therefore, that the employer-employee relationship existed between the parties notwithstanding evidence to the fact that petitioners Visayas and Bergado, even during the time that they worked with respondent company alternated their employment on different vessels when they were not assigned on the company's vessels. For, as was stressed in the above-quoted case ofIndustrial-CommercialAgricultural Workers Organization vs. CIR, 16 SCRA 562 [1966], "that during the temporary layoff the laborers are considered free to seek other employment is natural, since the laborers are not being paid, yet must find means of support" and such temporary cessation of operations "should not mean starvation for employees and their families." 4. Indeed, considering the length of time that private respondents have worked for petitioner since 1978 there is justification to conclude that they were engaged to perform activities usually necessary or desirable in the usual business or trade of petitioners and are, therefore, regular employees. As such, they are entitled to the benefits awarded them by respondent NLRC.

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WHEREFORE, the instant Petition for Certiorari, Prohibition and Mandamus is hereby dismissed and the Temporary Restraining Order heretofore issued is hereby dissolved. Costs against petitioners. SO ORDERED.

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G.R. No. 169752 September 25, 2007 PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS, Petitioners, vs. COMMISSION ON AUDIT, DIR. RODULFO J. ARIESGA (in his official capacity as Director of the Commission on Audit), MS. MERLE M. VALENTIN and MS. SUSAN GUARDIAN (in their official capacities as Team Leader and Team Member, respectively, of the audit Team of the Commission on Audit),Respondents. AUSTRIA-MARTINEZ, J.: Before the Court is a special civil action for Certiorari and Prohibition under Rule 65 of the Rules of Court, in relation to Section 2 of Rule 64, filed by the petitioner assailing 1 Office Order No. 2005-021 dated September 14, 2005 issued by the respondents 2 which constituted the audit team, as well as its September 23, 2005 Letter informing the petitioner that respondents audit team shall conduct an audit survey on the petitioner for a detailed audit of its accounts, operations, and financial transactions. No temporary restraining order was issued. The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No. 1285, enacted on January 19, 1905, by the Philippine Commission. The petitioner, at the time it was created, was composed of animal aficionados and animal propagandists. The objects of the petitioner, as stated in Section 2 of its charter, shall be to enforce laws relating to cruelty inflicted upon animals or the protection of animals in the Philippine Islands, and generally, to do and perform all things which may tend in any way to alleviate the suffering of animals and promote 3 their welfare. At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in existence. Act No. 1285 antedated both the Corporation Law and the constitution of the Securities and Exchange Commission. Important to note is that the nature of the petitioner as a corporate entity is distinguished from the sociedad anonimas under the Spanish Code of Commerce. For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the protection of animals, the petitioner was initially imbued under its charter with the power to apprehend violators of animal welfare laws. In addition, the petitioner was to share one-half (1/2) of the fines imposed and collected through its efforts for violations of the laws related thereto. As originally worded, Sections 4 and 5 of Act No. 1285 provide: SEC. 4. The said society is authorized to appoint not to exceed five agents in the City of Manila, and not to exceed two in each of the provinces of the Philippine Islands who shall have all the power and authority of a police officer to make arrests for violation of the laws enacted for the prevention of cruelty to animals and the protection of animals, and to serve any process in connection with the execution of such laws; and in addition thereto, all the police force of the Philippine Islands,

wherever organized, shall, as occasion requires, assist said society, its members or agents, in the enforcement of all such laws. SEC. 5. One-half of all the fines imposed and collected through the efforts of said society, its members or its agents, for violations of the laws enacted for the prevention of cruelty to animals and for their protection, shall belong to said society and shall be used to promote its objects. (emphasis supplied) Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the fines collected for violation of animal-related laws were recalled by 4 virtue of Commonwealth Act (C.A.) No. 148, which reads, in its entirety, thus: Be it enacted by the National Assembly of the Philippines: Section 1. Section four of Act Numbered Twelve hundred and eighty-five as amended by Act Numbered Thirty five hundred and forty-eight, is hereby further amended so as to read as follows: Sec. 4. The said society is authorized to appoint not to exceed ten agents in the City of Manila, and not to exceed one in each municipality of the Philippines who shall have the authority to denounce to regular peace officers any violation of the laws enacted for the prevention of cruelty to animals and the protection of animals and to cooperate with said peace officers in the prosecution of transgressors of such laws. Sec. 2. The full amount of the fines collected for violation of the laws against cruelty to animals and for the protection of animals, shall accrue to the general fund of the Municipality where the offense was committed. Sec. 3. This Act shall take effect upon its approval. Approved, November 8, 1936. (Emphasis supplied) Immediately thereafter, then President Manuel L. Quezon issued Executive Order (E.O.) No. 63 dated November 12, 1936, portions of which provide: Whereas, during the first regular session of the National Assembly, Commonwealth Act Numbered One Hundred Forty Eight was enacted depriving the agents of the Society for the Prevention of Cruelty to Animals of their power to arrest persons who have violated the laws prohibiting cruelty to animals thereby correcting a serious defect in one of the laws existing in our statute books . xxxx Whereas, the cruel treatment of animals is an offense against the State, penalized under our statutes, which the Government is duty bound to enforce;

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Now, therefore, I, Manuel L. Quezon, President of the Philippines, pursuant to the authority conferred upon me by the Constitution, hereby decree, order, and direct the Commissioner of Public Safety, the Provost Marshal General as head of the Constabulary Division of the Philippine Army, every Mayor of a chartered city, and every municipal president to detail and organize special members of the police force, local, national, and the Constabulary to watch, capture, and prosecute offenders against the laws enacted to prevent cruelty to animals. (Emphasis supplied) On December 1, 2003, an audit team from respondent Commission on Audit (COA) visited the office of the petitioner to conduct an audit survey pursuant to COA Office 5 Order No. 2003-051 dated November 18, 2003 addressed to the petitioner. The petitioner demurred on the ground that it was a private entity not under the jurisdiction of COA, citing Section 2(1) of Article IX of the Constitution which specifies the general jurisdiction of the COA, viz: Section 1. General Jurisdiction. The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned and controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and officers that have been granted fiscal autonomy under the Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government, and for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto. (Emphasis supplied) Petitioner explained thus: a. Although the petitioner was created by special legislation, this necessarily came about because in January 1905 there was as yet neither a Corporation Law or any other general law under which it may be organized and incorporated, nor a Securities and Exchange Commission which would have passed upon its organization and incorporation. b. That Executive Order No. 63, issued during the Commonwealth period, effectively deprived the petitioner of its power to make arrests, and that the petitioner lost its operational funding, underscore the fact that it exercises no governmental function. In fine, the government itself, by its overt acts, confirmed petitioners status as a private juridical entity.

The COA General Counsel issued a Memorandum dated May 6, 2004, asserting that the petitioner was subject to its audit authority. In a letter dated May 17, 7 2004, respondent COA informed the petitioner of the result of the evaluation, furnishing it with a copy of said Memorandum dated May 6, 2004 of the General Counsel. Petitioner thereafter filed with the respondent COA a Request for Re-evaluation dated 8 May 19, 2004, insisting that it was a private domestic corporation. Acting on the said request, the General Counsel of respondent COA, in a 9 Memorandum dated July 13, 2004, affirmed her earlier opinion that the petitioner was a government entity that was subject to the audit jurisdiction of respondent COA. In a letter dated September 14, 2004, the respondent COA informed the petitioner of the result of the re-evaluation, maintaining its position that the petitioner was subject to its audit jurisdiction, and requested an initial conference with the respondents. In a Memorandum dated September 16, 2004, Director Delfin Aguilar reported to COA Assistant Commissioner Juanito Espino, Corporate Government Sector, that the audit survey was not conducted due to the refusal of the petitioner because the latter maintained that it was a private corporation. Petitioner received on September 27, 2005 the subject COA Office Order 2005-021 dated September 14, 2005 and the COA Letter dated September 23, 2005. Hence, herein Petition on the following grounds: A. RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT PETITIONER IS SUBJECT TO ITS AUDIT AUTHORITY. B. PETITIONER IS ENTITLED TO THE RELIEF SOUGHT, THERE BEING NO APPEAL, NOR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE 10 ORDINARY COURSE OF LAW AVAILABLE TO IT. The essential question before this Court is whether the petitioner qualifies as a government agency that may be subject to audit by respondent COA. Petitioner argues: first, even though it was created by special legislation in 1905 as there was no general law then existing under which it may be organized or incorporated, it exercises no governmental functions because these have been revoked by C.A. No. 148 and E.O. No. 63; second, nowhere in its charter is it indicated that it is a public corporation, unlike, for instance, C.A. No. 111 which created the Boy Scouts of the Philippines, defined its powers and purposes, and specifically stated that it was "An Act to Create a Public Corporation" in which, even as amended by Presidential Decree No. 460, the law still adverted to the Boy Scouts of the Philippines as a "public corporation," all of which are not obtaining in the

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charter of the petitioner; third, if it were a government body, there would have been no need for the State to grant it tax exemptions under Republic Act No. 1178, and the fact that it was so exempted strengthens its position that it is a private institution; fourth, the employees of the petitioner are registered and covered by the Social Security System at the latters initiative and not through the Government Service Insurance System, which should have been the case had the employees been considered government employees; fifth, the petitioner does not receive any form of financial assistance from the government, since C.A. No. 148, amending Section 5 of Act No. 1285, states that the "full amount of the fines, collected for violation of the laws against cruelty to animals and for the protection of animals, shall accrue to the general fund of the Municipality where the offense was committed"; sixth, C.A. No. 148 effectively deprived the petitioner of its powers to make arrests and serve processes as these functions were placed in the hands of the police force; seventh, no government appointee or representative sits on the board of trustees of the petitioner; eighth, a reading of the provisions of its charter (Act No. 1285) fails to show that any act or decision of the petitioner is subject to the approval of or control by any government agency, except to the extent that it is governed by the law on private corporations in general; and finally, ninth, the Committee on Animal Welfare, under the Animal Welfare Act of 1998, includes members from both the private and the public sectors. The respondents contend that since the petitioner is a "body politic" created by virtue of a special legislation and endowed with a governmental purpose, then, indubitably, the COA may audit the financial activities of the latter. Respondents in effect divide their contentions into six strains: first, the test to determine whether an entity is a government corporation lies in the manner of its creation, and, since the petitioner was created by virtue of a special charter, it is thus a government corporation subject to respondents auditing power; second, the petitioner exercises "sovereign powers," that is, it is tasked to enforce the laws for the protection and welfare of animals which "ultimately redound to the public good and welfare," and, therefore, it is deemed to be a government "instrumentality" as defined under the Administrative Code of 1987, the purpose of which is connected with the administration of government, as purportedly 11 affirmed by American jurisprudence; third, by virtue of Section 23, Title II, Book III of the same Code, the Office of the President exercises supervision or control over the petitioner;fourth, under the same Code, the requirement under its special charter for the petitioner to render a report to the Civil Governor, whose functions have been inherited by the Office of the President, clearly reflects the nature of the petitioner as a government instrumentality; fifth, despite the passage of the Corporation Code, the law creating the petitioner had not been abolished, nor had it been re-incorporated under any general corporation law; and finally, sixth, Republic Act No. 8485, otherwise known as the "Animal Welfare Act of 1998," designates the petitioner as a member of its Committee on Animal Welfare which is attached to the Department of Agriculture.

In view of the phrase "One-half of all the fines imposed and collected through the efforts of said society," the Court, in a Resolution dated January 30, 2007, required the Office of the Solicitor General (OSG) and the parties to comment on: a) petitioner's authority to impose fines and the validity of the provisions of Act No. 1285 and Commonwealth Act No. 148 considering that there are no standard measures provided for in the aforecited laws as to the manner of implementation, the specific violations of the law, the person/s authorized to impose fine and in what amount; and, b) the effect of the 1935 and 1987 Constitutions on whether petitioner continues to exist or should organize as a private corporation under the Corporation Code, B.P. Blg. 68 as amended. Petitioner and the OSG filed their respective Comments. Respondents filed a Manifestation stating that since they were being represented by the OSG which filed its Comment, they opted to dispense with the filing of a separate one and adopt for the purpose that of the OSG. The petitioner avers that it does not have the authority to impose fines for violation of animal welfare laws; it only enjoyed the privilege of sharing in the fines imposed and collected from its efforts in the enforcement of animal welfare laws; such privilege, however, was subsequently abolished by C.A. No. 148; that it continues to exist as a private corporation since it was created by the Philippine Commission before the effectivity of the Corporation law, Act No. 1459; and the 1935 and 1987 Constitutions. The OSG submits that Act No. 1285 and its amendatory laws did not give petitioner 12 the authority to impose fines for violation of laws relating to the prevention of cruelty to animals and the protection of animals; that even prior to the amendment of Act No. 1285, petitioner was only entitled to share in the fines imposed; C.A. No. 148 abolished that privilege to share in the fines collected; that petitioner is a public corporation and has continued to exist since Act No. 1285; petitioner was not repealed by the 1935 and 1987 Constitutions which contain transitory provisions maintaining all laws issued not inconsistent therewith until amended, modified or repealed. The petition is impressed with merit. The arguments of the parties, interlaced as they are, can be disposed of in five points. First, the Court agrees with the petitioner that the "charter test" cannot be applied. Essentially, the "charter test" as it stands today provides: [T]he test to determine whether a corporation is government owned or controlled, or private in nature is simple. Is it created by its own charter for the exercise of a public function, or by incorporation under the general corporation law? Those with special charters are government corporations subject to its provisions , and its employees are

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under the jurisdiction of the Civil Service Commission, and are compulsory members 13 of the Government Service Insurance System. xxx (Emphasis supplied) The petitioner is correct in stating that the charter test is predicated, at best, on the legal regime established by the 1935 Constitution, Section 7, Article XIII, which states: Sec. 7. The National Assembly shall not, except by general law, provide for the formation, organization, or regulation of private corporations, unless such corporations are owned or controlled by the Government or any subdivision or 14 instrumentality thereof. The foregoing proscription has been carried over to the 1973 and the 1987 Constitutions. Section 16 of Article XII of the present Constitution provides: Sec. 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability. Section 16 is essentially a re-enactment of Section 7 of Article XVI of the 1935 Constitution and Section 4 of Article XIV of the 1973 Constitution. During the formulation of the 1935 Constitution, the Committee on Franchises recommended the foregoing proscription to prevent the pressure of special interests upon the lawmaking body in the creation of corporations or in the regulation of the same. To permit the lawmaking body by special law to provide for the organization, formation, or regulation of private corporations would be in effect to offer to it the temptation in many cases to favor certain groups, to the prejudice of others or to the 15 prejudice of the interests of the country. And since the underpinnings of the charter test had been introduced by the 1935 Constitution and not earlier, it follows that the test cannot apply to the petitioner, which was incorporated by virtue of Act No. 1285, enacted on January 19, 1905. Settled is the rule that laws in general have no retroactive effect, unless the contrary 16 is provided. All statutes are to be construed as having only a prospective operation, unless the purpose and intention of the legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In case of 17 doubt, the doubt must be resolved against the retrospective effect. There are a few exceptions. Statutes can be given retroactive effect in the following cases: (1) when the law itself so expressly provides; (2) in case of remedial statutes; (3) in case of curative statutes; (4) in case of laws interpreting others; and (5) in case 18 of laws creating new rights. None of the exceptions is present in the instant case.

The general principle of prospectivity of the law likewise applies to Act No. 1459, otherwise known as the Corporation Law, which had been enacted by virtue of the plenary powers of the Philippine Commission on March 1, 1906, a little over a year after January 19, 1905, the time the petitioner emerged as a juridical entity. Even the Corporation Law respects the rights and powers of juridical entities organized beforehand, viz: SEC. 75. Any corporation or sociedad anonima formed, organized, and existing under the laws of the Philippine Islands and lawfully transacting business in the Philippine Islands on the date of the passage of this Act, shall be subject to the provisions hereof so far as such provisions may be applicable and shall be entitled at its optioneither to continue business as such corporation or to reform and organize under and by virtue of the provisions of this Act, transferring all corporate interests to the new corporation which, if a stock corporation, is authorized to issue its shares of stock at par to the stockholders or members of the old corporation according to their interests. (Emphasis supplied). As pointed out by the OSG, both the 1935 and 1987 Constitutions contain transitory provisions maintaining all laws issued not inconsistent therewith until amended, 19 modified or repealed. In a legal regime where the charter test doctrine cannot be applied, the mere fact that a corporation has been created by virtue of a special law does not necessarily qualify it as a public corporation. What then is the nature of the petitioner as a corporate entity? What legal regime governs its rights, powers, and duties? As stated, at the time the petitioner was formed, the applicable law was the Philippine Bill of 1902, and, emphatically, as also stated above, no proscription similar to the charter test can be found therein. The textual foundation of the charter test, which placed a limitation on the power of the legislature, first appeared in the 1935 Constitution. However, the petitioner was incorporated in 1905 by virtue of Act No. 1258, a law antedating the Corporation Law (Act No. 1459) by a year, and the 1935 Constitution, by thirty years. There being neither a general law on the formation and organization of private corporations nor a restriction on the legislature to create private corporations by direct legislation, the Philippine Commission at that moment in history was well within its powers in 1905 to constitute the petitioner as a private juridical entity.1wphi1 Time and again the Court must caution even the most brilliant scholars of the law and all constitutional historians on the danger of imposing legal concepts of a later date on 20 facts of an earlier date.

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The amendments introduced by C.A. No. 148 made it clear that the petitioner was a private corporation and not an agency of the government. This was evident in Executive Order No. 63, issued by then President of the Philippines Manuel L. Quezon, declaring that the revocation of the powers of the petitioner to appoint agents with powers of arrest "corrected a serious defect" in one of the laws existing in the statute books. As a curative statute, and based on the doctrines so far discussed, C.A. No. 148 has to be given retroactive effect, thereby freeing all doubt as to which class of corporations the petitioner belongs, that is, it is a quasi-public corporation, a kind of private domestic corporation, which the Court will further elaborate on under the fourth point. Second, a reading of petitioners charter shows that it is not subject to control or supervision by any agency of the State, unlike government-owned and -controlled corporations. No government representative sits on the board of trustees of the petitioner. Like all private corporations, the successors of its members are determined voluntarily and solely by the petitioner in accordance with its by-laws, and may exercise those powers generally accorded to private corporations, such as the powers to hold property, to sue and be sued, to use a common seal, and so forth. It may adopt by-laws for its internal operations: the petitioner shall be managed or operated by its officers "in accordance with its by-laws in force." The pertinent provisions of the charter provide: Section 1. Anna L. Ide, Kate S. Wright, John L. Chamberlain, William F. Tucker, Mary S. Fergusson, Amasa S. Crossfield, Spencer Cosby, Sealy B. Rossiter, Richard P. Strong, Jose Robles Lahesa, Josefina R. de Luzuriaga, and such other persons as may be associated with them in conformity with this act, and their successors, are hereby constituted and created a body politic and corporate at law, under the name and style of "The Philippines Society for the Prevention of Cruelty to Animals." As incorporated by this Act, said society shall have the power to add to its organization such and as many members as it desires, to provide for and choose such officers as it may deem advisable, and in such manner as it may wish, and to remove members as it shall provide. It shall have the right to sue and be sued, to use a common seal, to receive legacies and donations, to conduct social enterprises for the purpose of obtaining funds, to levy dues upon its members and provide for their collection to hold real and personal estate such as may be necessary for the accomplishment of the purposes of the society, and to adopt such by-laws for its government as may not be inconsistent with law or this charter. xxxx

Sec. 3. The said society shall be operated under the direction of its officers, in accordance with its by-laws in force, and this charter. xxxx Sec. 6. The principal office of the society shall be kept in the city of Manila, and the society shall have full power to locate and establish branch offices of the society wherever it may deem advisable in the Philippine Islands, such branch offices to be under the supervision and control of the principal office. Third. The employees of the petitioner are registered and covered by the Social Security System at the latters initiative, and not through the Government Service Insurance System, which should be the case if the employees are considered government employees. This is another indication of petitioners nature as a private entity. Section 1 of Republic Act No. 1161, as amended by Republic Act No. 8282, otherwise known as the Social Security Act of 1997, defines the employer: Employer Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government : Provided, That a self-employed person shall be both employee and employer at the same time. (Emphasis supplied) Fourth. The respondents contend that the petitioner is a "body politic" because its primary purpose is to secure the protection and welfare of animals which, in turn, redounds to the public good. This argument, is, at best, specious. The fact that a certain juridical entity is impressed with public interest does not, by that circumstance alone, make the entity a public corporation, inasmuch as a corporation may be private although its charter contains provisions of a public character, incorporated solely for the public good. This class of corporations may be considered quasi-public corporations, which are private 21 corporations that render public service, supply public wants, or pursue other eleemosynary objectives. While purposely organized for the gain or benefit of its members, they are required by law to discharge functions for the public benefit. 22 Examples of these corporations are utility, railroad, warehouse, telegraph, 23 telephone, water supply corporations and transportation companies. It must be stressed that a quasi-public corporation is a species of private corporations, but the qualifying factor is the type of service the former renders to the public: if it 24 performs a public service, then it becomes a quasi-public corporation. 1wphi1 Authorities are of the view that the purpose alone of the corporation cannot be taken as a safe guide, for the fact is that almost all corporations are nowadays created to promote the interest, good, or convenience of the public. A bank, for example, is a

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private corporation; yet, it is created for a public benefit. Private schools and universities are likewise private corporations; and yet, they are rendering public service. Private hospitals and wards are charged with heavy social responsibilities. More so with all common carriers. On the other hand, there may exist a public corporation even if it is endowed with gifts or donations from private individuals. The true criterion, therefore, to determine whether a corporation is public or private is found in the totality of the relation of the corporation to the State. If the corporation is created by the State as the latters own agency or instrumentality to help it in carrying out its governmental functions, then that corporation is considered public; otherwise, it is private. Applying the above test, provinces, chartered cities, and barangays can best exemplify public corporations. They are created by the State as its own device 25 and agency for the accomplishment of parts of its own public works. It is clear that the amendments introduced by C.A. No. 148 revoked the powers of the petitioner to arrest offenders of animal welfare laws and the power to serve processes in connection therewith. Fifth. The respondents argue that since the charter of the petitioner requires the latter to render periodic reports to the Civil Governor, whose functions have been inherited by the President, the petitioner is, therefore, a government instrumentality. This contention is inconclusive. By virtue of the fiction that all corporations owe their very existence and powers to the State, the reportorial requirement is applicable to all corporations of whatever nature, whether they are public, quasi-public, or private corporationsas creatures of the State, there is a reserved right in the legislature to investigate the activities of a corporation to determine whether it acted within its powers. In other words, the reportorial requirement is the principal means by which the State may see to it that its creature acted according to the powers and functions conferred upon it. These principles were extensively discussed in Bataan Shipyard & 26 Engineering Co., Inc. v. Presidential Commission on Good Government. Here, the Court, in holding that the subject corporation could not invoke the right against selfincrimination whenever the State demanded the production of its corporate books and papers, extensively discussed the purpose of reportorial requirements, viz: x x x The corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It received certain special privileges and franchises, and holds them subject to the laws of the state and the limitations of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserve[d] right in the legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a state, having chartered a corporation to make use of certain franchises, could not, in the exercise of sovereignty, inquire how these franchises had been employed, and whether they had been abused, and demand the production of the corporate books and papers for that purpose. The defense amounts to this, that an officer of the

corporation which is charged with a criminal violation of the statute may plead the criminality of such corporation as a refusal to produce its books. To state this proposition is to answer it. While an individual may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation vested with special privileges and franchises may refuse to show its hand when charged with an abuse of such privileges. (Wilson v. United States, 55 27 Law Ed., 771, 780.) WHEREFORE, the petition is GRANTED. Petitioner is DECLARED a private domestic corporation subject to the jurisdiction of the Securities and Exchange Commission. The respondents are ENJOINED from investigating, examining and auditing the petitioner's fiscal and financial affairs. SO ORDERED.

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G.R. No. L-21278 December 27, 1966 FEATI UNIVERSITY, petitioner, vs. HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondents. ---------------------------------------G.R. No. L-21462 December 27, 1966 FEATI UNIVERSITY, petitioner-appellant, vs. FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee. ---------------------------------------G.R. No. L-21500 December 27, 1966 FEATI UNIVERSITY, petitioner-appellant, vs. FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee. ZALDIVAR, J.: This Court, by resolution, ordered that these three cases be considered together, and the parties were allowed to file only one brief for the three cases. On January 14, 1963, the President of the respondent Feati University Faculty ClubPAFLU hereinafter referred to as Faculty Club wrote a letter to Mrs. Victoria L. Araneta, President of petitioner Feati University hereinafter referred to as University informing her of the organization of the Faculty Club into a registered labor union. The Faculty Club is composed of members who are professors and/or instructors of the University. On January 22, 1963, the President of the Faculty Club sent another letter containing twenty-six demands that have connection with the employment of the members of the Faculty Club by the University, and requesting an answer within ten days from receipt thereof. The President of the University answered the two letters, requesting that she be given at least thirty days to study thoroughly the different phases of the demands. Meanwhile counsel for the University, to whom the demands were referred, wrote a letter to the President of the Faculty Club demanding proof of its majority status and designation as a bargaining representative. On February 1, 1963, the President of the Faculty Club again wrote the President of the University rejecting the latter's request for extension of time, and on the same day he filed a notice of strike with the Bureau of Labor alleging as reason therefor the refusal of the University to bargain collectively. The parties were called to conferences at the Conciliation Division of the Bureau of Labor but efforts to conciliate them failed. On February 18, 1963, the members of the Faculty Club declared a strike and established picket lines in the premises of the University, resulting in the disruption of classes in the University. Despite further efforts of the officials from the Department of Labor to effect a settlement of the differences between the management of the University and the striking faculty members no satisfactory agreement was arrived at. On March 21, 1963, the President of the Philippines certified to the Court of Industrial Relations the dispute between the management of the University and the Faculty Club pursuant to the provisions of Section 10 of Republic Act No. 875.

In connection with the dispute between the University and the Faculty Club and certain incidents related to said dispute, various cases were filed with the Court of Industrial Relations hereinafter referred to as CIR. The three cases now before this Court stemmed from those cases that were filed with the CIR. CASE NO. G.R. NO. L-21278 On May 10, 1963, the University filed before this Court a "petition for certiorari and prohibition with writ of preliminary injunction", docketed as G.R. No. L-21278, praying: (1) for the issuance of the writ of preliminary injunction enjoining respondent Judge Jose S. Bautista of the CIR to desist from proceeding in CIR Cases Nos. 41-IPA, 1183-MC, and V-30; (2) that the proceedings in Cases Nos. 41-IPA and 1183-MC be annulled; (3) that the orders dated March 30, 1963 and April 6, 1963 in Case No. 41IPA, the order dated April 6, 1963 in Case No. 1183-MC, and the order dated April 29, 1963 in Case No. V-30, all be annulled; and (4) that the respondent Judge be ordered to dismiss said cases Nos. 41-IPA, 1183-MC and V-30 of the CIR. On May 10, 1963, this Court issued a writ of preliminary injunction, upon the University's filing a bond of P1,000.00, ordering respondent Judge Jose S. Bautista as Presiding Judge of the CIR, until further order from this Court, "to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of 1 the Court of Industrial Relations)." On December 4, 1963, this Court ordered the injunction bond increased to P100,000.00; but on January 23, 1964, upon a motion for reconsideration by the University, this Court reduced the bond to P50,000.00. A brief statement of the three cases CIR Cases 41-IPA, 1183-MC and V-30 involved in the Case G.R. No. L-21278, is here necessary. CIR Case No. 41-IPA, relates to the case in connection with the strike staged by the members of the Faculty Club. As we have stated, the dispute between the University and the Faculty Club was certified on March 21, 1963 by the President of the Philippines to the CIR. On the strength of the presidential certification, respondent Judge Bautista set the case for hearing on March 23, 1963. During the hearing, the Judge endeavored to reconcile the part and it was agreed upon that the striking faculty members would return to work and the University would readmit them under a status quo arrangement. On that very same day, however, the University, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no jurisdiction over the case, because (1) the Industrial Peace Act is not applicable to the University, it being an educational institution, nor to the members of the Faculty Club, they being independent contractors; and (2) the presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not an industrial establishment and there was no industrial dispute which could be certified to the CIR. On March 30, 1963 the respondent Judge issued an order denying the motion to dismiss and declaring that the Industrial Peace Act is applicable to both parties in the case and that the CIR had acquired jurisdiction over the case by virtue of the presidential certification. In the same order, the respondent Judge, believing that the

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dispute could not be decided promptly, ordered the strikers to return immediately to work and the University to take them back under the last terms and conditions existing before the dispute arose, as per agreement had during the hearing on March 23, 1963; and likewise enjoined the University, pending adjudication of the case, from dismissing any employee or laborer without previous authorization from the CIR. The University filed on April 1, 1963 a motion for reconsideration of the order of March 30, 1963 by the CIRen banc, and at the same time asking that the motion for reconsideration be first heard by the CIR en banc. Without the motion for reconsideration having been acted upon by the CIR en banc, respondent Judge set the case for hearing on the merits for May 8, 1963. The University moved for the cancellation of said hearing upon the ground that the court en banc should first hear the motion for reconsideration and resolve the issues raised therein before the case is heard on the merits. This motion for cancellation of the hearing was denied. The respondent Judge, however, cancelled the scheduled hearing when counsel for the University manifested that he would take up before the Supreme Court, by a petition for certiorari, the matter regarding the actuations of the respondent Judge and the issues raised in the motion for reconsideration, specially the issue relating to the jurisdiction of the CIR. The order of March 30, 1963 in Case 41-IPA is one of the orders sought to be annulled in the case, G.R. No. L-21278. Before the above-mentioned order of March 30, 1963 was issued by respondent Judge, the University had employed professors and/or instructors to take the places of those professors and/or instructors who had struck. On April 1, 1963, the Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court certain parties, alleging that the University refused to accept back to work the returning strikers, in violation of the return-to-work order of March 30, 1963. The University filed, on April 5,1963, its opposition to the petition for contempt, denying the allegations of the Faculty Club and alleging by way of special defense that there was still the motion for reconsideration of the order of March 30, 1963 which had not yet been acted upon by the CIR en banc. On April 6, 1963, the respondent Judge issued an order stating that "said replacements are hereby warned and cautioned, for the time being, not to disturb nor in any manner commit any act tending to disrupt the effectivity of the order of March 30,1963, pending the final resolution of the 2 same." On April 8, 1963, there placing professors and/or instructors concerned filed, thru counsel, a motion for reconsideration by the CIR en banc of the order of respondent Judge of April 6, 1963. This order of April 6, 1963 is one of the orders that are sought to be annulled in case G.R. No. L-21278. CIR Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club on March 8, 1963 before the CIR, praying that it be certified as the sole and exclusive bargaining representative of all the employees of the University. The University filed an opposition to the petition for certification election and at the same time a motion to dismiss said petition, raising the very same issues raised in Case No. 41-IPA, claiming that the petition did not comply with the rules promulgated by the CIR; that the Faculty Club is not a legitimate labor union; that the members of the

Faculty Club cannot unionize for collective bargaining purposes; that the terms of the individual contracts of the professors, instructors, and teachers, who are members of the Faculty Club, would expire on March 25 or 31, 1963; and that the CIR has no jurisdiction to take cognizance of the petition because the Industrial Peace Act is not applicable to the members of the Faculty Club nor to the University. This case was assigned to Judge Baltazar Villanueva of the CIR. Before Judge Villanueva could act on the motion to dismiss, however, the Faculty Club filed on April 3, 1963 a motion to withdraw the petition on the ground that the labor dispute (Case No. 41-IPA) had already been certified by the President to the CIR and the issues raised in Case No. 1183-MC were absorbed by Case No. 41-IPA. The University opposed the withdrawal, alleging that the issues raised in Case No. 1183-MC were separate and distinct from the issues raised in Case No. 41-IPA; that the questions of recognition and majority status in Case No. 1183-MC were not absorbed by Case No. 41-IPA; and that the CIR could not exercise its power of compulsory arbitration unless the legal issue regarding the existence of employer-employee relationship was first resolved. The University prayed that the motion of the Faculty Club to withdraw the petition for certification election be denied, and that its motion to dismiss the petition be heard. Judge Baltazar Villanueva, finding that the reasons stated by the Faculty Club in the motion to withdraw were well taken, on April 6, 1963, issued an order granting the withdrawal. The University filed, on April 24, 1963, a motion for reconsideration of that order of April 6, 1963 by the CIR en banc. This order of April 6, 1963 in Case No. 1183-MC is one of the orders sought to be annulled in the case, G.R. No. L-21278, now before Us. CIR Case No. V-30 relates to a complaint for indirect contempt of court filed against the administrative officials of the University. The Faculty Club, through the Acting Chief Prosecutor of the CIR, filed with the CIR a complaint docketed as Case No. V30, charging President Victoria L. Araneta, Dean Daniel Salcedo, Executive VicePresident Rodolfo Maslog, and Assistant to the President Jose Segovia, as officials of the University, with indirect contempt of court, reiterating the same charges filed in Case No. 41-IPA for alleged violation of the order dated March 30, 1963. Based on the complaint thus filed by the Acting Chief Prosecutor of the CIR, respondent Judge Bautista issued on April 29, 1963 an order commanding any officer of the law to arrest the above named officials of the University so that they may be dealt with in accordance with law, and the same time fixed the bond for their release at P500.00 each. This order of April 29, 1963 is also one of the orders sought to be annulled in the case, G.R. No. L-2l278. The principal allegation of the University in its petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278, now before Us, is that respondent Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with grave abuse of discretion, in taking cognizance of, and in issuing the questioned orders in, CIR Cases Nos. 41-IPA 1183-MC and V-30. Let it be noted that when the petition for certiorari and prohibition with preliminary injunction was filed on May 10, 1963 in this case, the questioned order in CIR Cases Nos. 41-IPA, 1183-MC and V-

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30 were still pending action by the CIR en banc upon motions for reconsideration filed by the University. On June 10, 1963, the Faculty Club filed its answer to the petition for certiorari and prohibition with preliminary injunction, admitting some allegations contained in the petition and denying others, and alleging special defenses which boil down to the contentions that (1) the CIR had acquired jurisdiction to take cognizance of Case No. 41-IPA by virtue of the presidential certification, so that it had jurisdiction to issue the questioned orders in said Case No. 41-IPA; (2) that the Industrial Peace Act (Republic Act 875) is applicable to the University as an employer and to the members of the Faculty Club as employees who are affiliated with a duly registered labor union, so that the Court of Industrial Relations had jurisdiction to take cognizance of Cases Nos. 1183-MC and V-30 and to issue the questioned orders in those two cases; and (3) that the petition for certiorari and prohibition with preliminary injunction was prematurely filed because the orders of the CIR sought to be annulled were still the subjects of pending motions for reconsideration before the CIR en banc when said petition for certiorari and prohibition with preliminary injunction was filed before this Court. CASE G.R. NO. L-21462 This case, G.R. No. L-21462, involves also CIR Case No. 1183-MC. As already stated Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club as a labor union, praying that it be certified as the sole and exclusive bargaining representative of all employees of the University. This petition was opposed by the University, and at the same time it filed a motion to dismiss said petition. But before Judge Baltazar Villanueva could act on the petition for certification election and the motion to dismiss the same, Faculty Club filed a motion to withdraw said petition upon the ground that the issue raised in Case No. 1183-MC were absorbed by Case No. 41-IPA which was certified by the President of the Philippines. Judge Baltazar Villanueva, by order April 6, 1963, granted the motion to withdraw. The University filed a motion for reconsideration of that order of April 6, 1963 by the CIR en banc. That motion for reconsideration was pending action by the CIR en banc when the petition forcertiorari and prohibition with preliminary injunction in Case G.R. no. L-21278 was filed on May 10, 1963. As earlier stated this Court, in Case G.R. No. L-21278, issued a writ of preliminary injunction on May 10, 1963, ordering respondent Judge Bautista, until further order from this Court, to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations). On June 5, 1963, that is, after this Court has issued the writ of preliminary injunction in Case G.R. No. L-21278, the CIR en banc issued a resolution denying the motion for reconsideration of the order of April 6, 1963 in Case No. 1183-MC. On July 8, 1963, the University filed before this Court a petition for certiorari, by way of an appeal from the resolution of the CIR en banc, dated June 5, 1963, denying the

motion for reconsideration of the order of April 6, 1963 in Case No. 1183-MC. This petition was docketed as G.R. No. L-21462. In its petition for certiorari, the University alleges (1) that the resolution of the Court of Industrial Relations of June 5, 1963 was null and void because it was issued in violation of the writ of preliminary injunction issued in Case G.R. No. L-21278; (2) that the issues of employer-employee relationship, the alleged status as a labor union, majority representation and designation as bargaining representative in an appropriate unit of the Faculty Club should have been resolved first in Case No. 1183-MC prior to the determination of the issues in Case No. 41-IPA and therefore the motion to withdraw the petition for certification election should not have been granted upon the ground that the issues in the first case have been absorbed in the second case; and (3) the lower court acted without or in excess of jurisdiction in taking cognizance of the petition for certification election and that the same should have been dismissed instead of having been ordered withdrawn. The University prayed that the proceedings in Case No. 1183-MC and the order of April 6, 1963 and the resolution of June 5, 1963 issued therein be annulled, and that the CIR be ordered to dismiss Case No. 1183-MC on the ground of lack of jurisdiction. The Faculty Club filed its answer, admitting some, and denying other, allegations in the petition for certiorari; and specially alleging that the lower court's order granting the withdrawal of the petition for certification election was in accordance with law, and that the resolution of the court en banc on June 5, 1963 was not a violation of the writ of preliminary injunction issued in Case G.R. No. L-21278 because said writ of injunction was issued against Judge Jose S. Bautista and not against the Court of Industrial Relations, much less against Judge Baltazar Villanueva who was the trial judge of Case No. 1183-MC. CASE G.R. NO. L-21500 This case, G.R. No. L-21500, involves also CIR Case No. 41-IPA. As earlier stated, Case No. 41-IPA relates to the strike staged by the members of the Faculty Club and the dispute was certified by the President of the Philippines to the CIR. The University filed a motion to dismiss that case upon the ground that the CIR has no jurisdiction over the case, and on March 30, 1963 Judge Jose S. Bautista issued an order denying the motion to dismiss and declaring that the Industrial Peace Act is applicable to both parties in the case and that the CIR had acquired jurisdiction over the case by virtue of the presidential certification; and in that same order Judge Bautista ordered the strikers to return to work and the University to take them back under the last terms and conditions existing before the dispute arose; and enjoined the University from dismissing any employee or laborer without previous authority from the court. On April 1, 1963, the University filed a motion for reconsideration of the order of March 30, 1963 by the CIR en banc. That motion for reconsideration was pending action by the CIR en banc when the petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 was filed on May 10, 1963. As we have already stated, this Court in said case G.R. No. L-21278, issued a writ of

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preliminary injunction on May 10, 1963 ordering respondent Judge Jose S. Bautista, until further order from this Court, to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations). On July 2, 1963, the University received a copy of the resolution of the CIR en banc, dated May 7, 1963 but actually received and stamped at the Office of the Clerk of the CIR on June 28, 1963, denying the motion for reconsideration of the order dated March 30, 1963 in Case No. 41-IPA. On July 23, 1963, the University filed before this Court a petition for certiorari, by way of an appeal from the resolution of the Court of Industrial Relations en banc dated May 7, 1963 (but actually received by said petitioner on July 2, 1963) denying the motion for reconsideration of the order of March 30, 1963 in Case No. 41-IPA. This petition was docketed as G.R. No. L-21500. In its petition for certiorari the University alleges (1) that the resolution of the CIR en banc, dated May 7, 1963 but filed with the Clerk of the CIR on June 28, 1963, in Case No. 41-IPA, is null and void because it was issued in violation of the writ of preliminary injunction issued by this Court in G.R. No. L-21278; (2) that the CIR, through its Presiding Judge, had no jurisdiction to take cognizance of Case No. 41-IPA and the order of March 30, 1963 and the resolution dated May 7, 1963 issued therein are null and void; (3) that the certification made by the President of the Philippines is not authorized by Section 10 of Republic Act 875, but is violative thereof; (4) that the Faculty Club has no right to unionize or organize as a labor union for collective bargaining purposes and to be certified as a collective bargaining agent within the purview of the Industrial Peace Act, and consequently it has no right to strike and picket on the ground of petitioner's alleged refusal to bargain collectively where such duty does not exist in law and is not enforceable against an educational institution; and (5) that the return-to-work order of March 30, 1963 is improper and illegal. The petition prayed that the proceedings in Case No. 41-IPA be annulled, that the order dated March 30, 1963 and the resolution dated May 7, 1963 be revoked, and that the lower court be ordered to dismiss Case 41-IPA on the ground of lack of jurisdiction. On September 10, 1963, the Faculty Club, through counsel, filed a motion to dismiss the petition for certiorari on the ground that the petition being filed by way of an appeal from the orders of the Court of Industrial Relations denying the motion to dismiss in Case No. 41-IPA, the petition for certiorari is not proper because the orders appealed from are interlocutory in nature. This Court, by resolution of September 26, 1963, ordered that these three cases (G.R. Nos. L-21278, L-21462 and L-21500) be considered together and the motion to dismiss in Case G.R. No. L-21500 be taken up when the cases are decided on the merits after the hearing. Brushing aside certain technical questions raised by the parties in their pleadings, We proceed to decide these three cases on the merits of the issues raised.

The University has raised several issues in the present cases, the pivotal one being its claim that the Court of Industrial Relations has no jurisdiction over the parties and the subject matter in CIR Cases 41-IPA, 1183-MC and V-30, brought before it, upon the ground that Republic Act No. 875 is not applicable to the University because it is an educational institution and not an industrial establishment and hence not an "employer" in contemplation of said Act; and neither is Republic Act No. 875 applicable to the members of the Faculty Club because the latter are independent contractors and, therefore, not employees within the purview of the said Act. In support of the contention that being an educational institution it is beyond the scope of Republic Act No. 875, the University cites cases decided by this Court: Boy Scouts of the Philippines vs. Juliana Araos , L-10091, Jan. 29, 1958; University of San Agustin vs. CIR, et al., L-12222, May 28, 1958; Cebu Chinese High School vs. Philippine Land-Air-Sea Labor Union, PLASLU, L-12015, April 22, 1959; La Consolacion College, et al. vs. CIR, et al., L-13282, April 22, 1960; University of the Philippines, et al. vs. CIR, et al., L-15416, April 8, 1960; Far Eastern University vs. CIR, L-17620, August 31, 1962. We have reviewed these cases, and also related cases subsequent thereto, and We find that they do not sustain the contention of the University. It is true that this Court has ruled that certain educational institutions, like the University of Santo Tomas, University of San Agustin, La Consolacion College, and other juridical entities, like the Boy Scouts of the Philippines and Manila Sanitarium, are beyond the purview of Republic Act No. 875 in the sense that the Court of Industrial Relations has no jurisdiction to take cognizance of charges of unfair labor practice filed against them, but it is nonetheless true that the principal reason of this Court in ruling in those cases that those institutions are excluded from the operation of Republic Act 875 is that those entities are not organized, maintained and operated for profit and do not declare dividends to stockholders. The decision in the case of University of San Agustin vs. Court of Industrial Relations, G.R. No. L12222, May 28, 1958, is very pertinent. We quote a portion of the decision: It appears that the University of San Agustin, petitioner herein, is an educational institution conducted and managed by a "religious non-stock corporation duly organized and existing under the laws of the Philippines." It was organized not for profit or gain or division of the dividends among its stockholders, but solely for religious and educational purposes. It likewise appears that the Philippine Association of College and University Professors, respondent herein, is a non-stock association composed of professors and teachers in different colleges and universities and that since its organization two years ago, the university has adopted a hostile attitude to its formation and has tried to discriminate, harass and intimidate its members for which reason the association and the members affected filed the unfair labor practice complaint which initiated this proceeding. To the complaint of unfair labor practice, petitioner filed an answer wherein it disputed the jurisdiction of the Court of Industrial Relations over the controversy on the following grounds:

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"(a) That complainants therein being college and/or university professors were not "industrial" laborers or employees, and the Philippine Association of College and University Professors being composed of persons engaged in the teaching profession, is not and cannot be a legitimate labor organization within the meaning of the laws creating the Court of Industrial Relations and defining its powers and functions; "(b) That the University of San Agustin, respondent therein, is not an institution established for the purpose of gain or division of profits, and consequently, it is not an "industrial" enterprise and the members of its teaching staff are not engaged in "industrial" employment (U.S.T. Hospital Employees Association vs. Sto. Tomas University Hospital, G.R. No. L-6988, 24 May 1954; and San Beda College vs. Court of Industrial Relations and National Labor Union, G.R. No. L-7649, 29 October 1955; 51 O.G. (Nov. 1955) 5636-5640); "(c) That, as a necessary consequence, alleged controversy between therein complainants and respondent is not an "industrial" dispute, and the Court of Industrial Relations has no jurisdiction, notonly on the parties but also over the subject matter of the complaint." The issue now before us is: Since the University of San Agustin is not an institution established for profit or gain, nor an industrial enterprise, but one established exclusively for educational purposes, can it be said that its relation with its professors is one of employer and employee that comes under the jurisdiction of the Court of Industrial Relations? In other words, do the provisions of the Magna Carta on unfair labor practice apply to the relation between petitioner and members of respondent association? The issue is not new. Thus, in the case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-10091, promulgated on January 29, 1958, this Court, speaking thru Mr. Justice Montemayor, answered the query in the negative in the following wise: "The main issue involved in the present case is whether or not a charitable institution or one organized not for profit but for more elevated purposes, charitable, humanitarian, etc., like the Boy Scouts of the Philippines, is included in the definition of "employer" contained in Republic Act 875, and whether the employees of said institution fall under the definition of "employee" also contained in the same Republic Act. If they are included, then any act which may be considered unfair labor practice, within the meaning of said Republic Act, would come under the jurisdiction of the Court of Industrial Relations; but if they do not fall within the scope of said Republic Act, particularly, its definitions of employer and employee, then the Industrial Court would have no jurisdiction at all. xxx xxx xxx

"On the basis of the foregoing considerations, there is every reason to believe that our labor legislation from Commonwealth Act No. 103, creating the Court of Industrial Relations, down through the Eight-Hour Labor Law, to the Industrial Peace Act, was intended by the Legislature to apply only to industrial employment and to govern the relations between employers engaged in industry and occupations for purposes of profit and gain, and their industrial employees, but not to organizations and entities which are organized, operated and maintained not for profit or gain, but for elevated and lofty purposes, such as, charity, social service, education and instruction, hospital and medical service, the encouragement and promotion of character, patriotism and kindred virtues in youth of the nation, etc. "In conclusion, we find and hold that Republic Act No. 875, particularly, that portion thereof regarding labor disputes and unfair labor practice, does not apply to the Boy Scouts of the Philippines, and consequently, the Court of Industrial Relations had no jurisdiction to entertain and decide the action or petition filed by respondent Araos. Wherefore, the appealed decision and resolution of the CIR are hereby set aside, with costs against respondent." There being a close analogy between the relation and facts involved in the two cases, we cannot but conclude that the Court of Industrial Relations has no jurisdiction to entertain the complaint for unfair labor practice lodged by respondent association against petitioner and, therefore, we hereby set aside the order and resolution subject to the present petition, with costs against respondent association. The same doctrine was confirmed in the case of University of Santo Tomas v. Hon. Baltazar Villanueva, et al., G.R. No. L-13748, October 30, 1959, where this Court ruled that: In the present case, the record reveals that the petitioner University of Santo Tomas is not an industry organized for profit but an institution of learning devoted exclusively to the education of the youth. The Court of First Instance of Manila in its decision in Civil Case No. 28870, which has long become final and consequently the settled law in the case, found as established by the evidence adduced by the parties therein (herein petitioner and respondent labor union) that while the University collects fees from its students, all its income is used for the improvement and enlargement of the institution. The University declares no dividend, and the members of the corporation who founded it, as ordained in its articles of incorporation, receive no material compensation for the time and sacrifice they render to the University and its students. The respondent union itself in a case before the Industrial Court (Case No. 314-MC) has averred that "the University of Santo Tomas, like the San Beda College, is an educational institution operated not for profit but for the sole purpose of educating young men." (See Annex "B" to petitioner's motion to dismiss.). It is apparent, therefore, that on the face of the record the University of Santo Tomas is not a corporation created for profit but an educational institution and therefore not an industrial or business organization.

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In the case of La Consolacion College, et al. vs. CIR, et al., G.R. No. L-13282, April 22, 1960, this Court repeated the same ruling when it said: The main issue in this appeal by petitioner is that the industry trial court committed an error in holding that it has jurisdiction to act in this case even if it involves unfair labor practice considering that the La Consolacion College is not a business enterprise but an educational institution not organized for profit. If the claim that petitioner is an educational institution not operated for profit is true, which apparently is the case, because the very court a quo found that it has no stockholder, nor capital . . . then we are of the opinion that the same does not come under the jurisdiction of the Court of Industrial Relations in view of the ruling in the case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-10091, decided on January 29, 1958. It is noteworthy that the cases of the University of San Agustin, the University of Santo Tomas, and La Consolacion College, cited above, all involve charges of unfair labor practice under Republic Act No. 875, and the uniform rulings of this Court are that the Court of Industrial Relations has no jurisdiction over the charges because said Act does not apply to educational institutions that are not operated or maintained for profit and do not declare dividends. On the other hand, in the cases of Far Eastern University v. CIR, et al., G.R. No. L-17620, August 31, 1962, this Court upheld the decision of the Court of Industrial Relations finding the Far Eastern University, also an educational institution, guilty of unfair labor practice. Among the findings of fact in said case was that the Far Eastern University made profits from the school year 19521953 to 1958-1959. In affirming the decision of the lower court, this Court had thereby ratified the ruling of the Court of Industrial Relations which applied the Industrial Peace Act to educational institutions that are organized, operated and maintained for profit. It is also noteworthy that in the decisions in the cases of the Boy Scouts of the Philippines, the University of San Agustin, the University of Sto. Tomas, and La Consolacion College, this Court was not unanimous in the view that the Industrial Peace Act (Republic Act No. 875) is not applicable to charitable, eleemosynary or non-profit organizations which include educational institutions not operated for profit. There are members of this Court who hold the view that the Industrial Peace Act would apply also to non-profit organizations or entities the only exception being the Government, including any political subdivision or instrumentality thereof, in so far as governmental functions are concerned. However, in the Far Eastern University case this Court is unanimous in supporting the view that an educational institution that is operated for profit comes within the scope of the Industrial Peace Act. We consider it a settled doctrine of this Court, therefore, that the Industrial Peace Act is applicable to any organization or entity whatever may be its purpose when it was created that is operated for profit or gain.

Does the University operate as an educational institution for profit? Does it declare dividends for its stockholders? If it does not, it must be declared beyond the purview of Republic Act No. 875; but if it does, Republic Act No. 875 must apply to it. The 3 University itself admits that it has declared dividends. The CIR in its order dated March 30, 1963 in CIR Case No. 41-IPA which order was issued after evidence was heard also found that the University is not for strictly educational purposes and that "It realizes profits and parts of such earning is distributed as dividends to 4 private stockholders or individuals (Exh. A and also 1 to 1-F, 2-x 3-x and 4-x)" Under this circumstance, and in consonance with the rulings in the decisions of this Court, above cited, it is obvious that Republic Act No. 875 is applicable to herein petitioner Feati University. But the University claims that it is not an employer within the contemplation of Republic Act No. 875, because it is not an industrial establishment. At most, it says, it is only a lessee of the services of its professors and/or instructors pursuant to a contract of services entered into between them. We find no merit in this claim. Let us clarify who is an "employer" under the Act. Section 2(c) of said Act provides: Sec. 2. Definitions.As used in this Act (c) The term employer include any person acting in the interest of an employer, directly or indirectly, but shall not include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent of such labor organization. It will be noted that in defining the term "employer" the Act uses the word "includes", which it also used in defining "employee". [Sec. 2 (d)], and "representative" [Sec. 2(h)]; and not the word "means" which the Act uses in defining the terms "court" [Sec. 2(a)], "labor organization" [Sec. 2(e)], "legitimate labor organization [Sec. 2(f)], "company union" [Sec. 2(g)], "unfair labor practice" [Sec. 2(i)], "supervisor" [Sec. 2(k)], "strike" [Sec. 2(l)] and "lock-out" [Sec. 2(m)]. A methodical variation in terminology is manifest. This variation and distinction in terminology and phraseology cannot be presumed to have been the inconsequential product of an oversight; rather, it must have been the result of a deliberate and purposeful act, more so when we consider that as legislative records show, Republic Act No. 875 had been meticulously and painstakingly drafted and deliberated upon. In using the word "includes" and not "means", Congress did not intend to give a complete definition of "employer", but rather that such definition should be complementary to what is commonly understood as employer. Congress intended the term to be understood in a broad meaning because, firstly, the statutory definition includes not only "a principal employer but also a person acting in the interest of the employer"; and, secondly, the Act itself specifically enumerated those who are not included in the term "employer", namely: (1) a labor organization (otherwise than when acting as an employer), (2) anyone acting in the capacity of officer or agent of such labor organization [Sec. 2(c)], and (3) the Government and any political subdivision or instrumentality thereof insofar as the

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right to strike for the purpose of securing changes or modifications in the terms and conditions of employment is concerned (Section 11). Among these statutory exemptions, educational institutions are not included; hence, they can be included in the term "employer". This Court, however, has ruled that those educational institutions that are not operated for profit are not within the purview of Republic Act 5 No. 875. As stated above, Republic Act No. 875 does not give a comprehensive but only a complementary definition of the term "employer". The term encompasses those that are in ordinary parlance "employers." What is commonly meant by "employer"? The term "employer" has been given several acceptations. The lexical definition is "one who employs; one who uses; one who engages or keeps in service;" and "to employ" is "to provide work and pay for; to engage one's service; to hire." (Webster's New Twentieth Century Dictionary, 2nd ed., 1960, p. 595). The Workmen's Compensation Act defines employer as including "every person or association of persons, incorporated or not, public or private, and the legal representative of the deceased employer" and "includes the owner or lessee of a factory or establishment or place of work or any other person who is virtually the owner or manager of the business carried on in the establishment or place of work but who, for reason that there is an independent contractor in the same, or for any other reason, is not the direct employer of laborers employed there." [Sec. 39(a) of Act No. 3428.] The Minimum Wage Law states that "employer includes any person acting directly or indirectly in the interest of the employer in relation to an employee and shall include the Government and the government corporations". [Rep. Act No. 602, Sec. 2(b)]. The Social Security Act defines employer as "any person, natural or juridical, domestic or foreign, who carries in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government." (Rep. Act No. 1161, Sec. 8[c]). This Court, in the cases of the The Angat River Irrigation System, et al. vs. Angat River Workers' Union (PLUM), et al., G.R. Nos. L-10934 and L-10944, December 28, 1957, which cases involve unfair labor practices and hence within the purview of Republic Act No. 875, defined the term employer as follows: An employer is one who employs the services of others; one for whom employees work and who pays their wages or salaries (Black Law Dictionary, 4th ed., p. 618). An employer includes any person acting in the interest of an employer, directly or indirectly (Sec. 2-c, Rep. Act 875). Under none of the above definitions may the University be excluded, especially so if it is considered that every professor, instructor or teacher in the teaching staff of the University, as per allegation of the University itself, has a contract with the latter for teaching services, albeit for one semester only. The University engaged the services

of the professors, provided them work, and paid them compensation or salary for their services. Even if the University may be considered as a lessee of services under a contract between it and the members of its Faculty, still it is included in the term "employer". "Running through the word `employ' is the thought that there has been an agreement on the part of one person to perform a certain service in return for compensation to be paid by an employer. When you ask how a man is employed, or what is his employment, the thought that he is under agreement to perform some service or services for another is predominant and paramount." (Ballentine Law Dictionary, Philippine ed., p. 430, citing Pinkerton National Detective Agency v. Walker, 157 Ga. 548, 35 A. L. R. 557, 560, 122 S.E. Rep. 202). To bolster its claim of exception from the application of Republic Act No. 875, the University contends that it is not state that the employers included in the definition of 2 (c) of the Act. This contention can not be sustained. In the first place, Sec. 2 (c) of Republic Act No. 875 does not state that the employers included in the definition of the term "employer" are only and exclusively "industrial establishments"; on the contrary, as stated above, the term "employer" encompasses all employers except those specifically excluded by the Act. In the second place, even the Act itself does not refer exclusively to industrial establishments and does not confine its application thereto. This is patent inasmuch as several provisions of the Act are applicable to non-industrial workers, such as Sec. 3, which deals with "employees' right to selforganization"; Sections 4 and 5 which enumerate unfair labor practices; Section 8 which nullifies private contracts contravening employee's rights; Section 9 which relates to injunctions in any case involving a labor dispute; Section 11 which prohibits strikes in the government; Section 12 which provides for the exclusive collective bargaining representation for labor organizations; Section 14 which deals with the procedure for collective bargaining; Section 17 which treats of the rights and conditions of membership in labor organizations; Sections 18, 19, 20 and 21 which provide respectively for the establishment of conciliation service, compilation of collective bargaining contracts, advisory labor-management relations; Section 22 which empowers the Secretary of Labor to make a study of labor relations; and Section 24 which enumerates the rights of labor organizations. (See Dissenting Opinion of Justice Concepcion in Boy Scouts of the Philippines v. Juliana Araos, G.R. No. L-10091, January 29, 1958.) This Court, in the case of Boy Scouts of the Philippines v. Araos, supra, had occasion to state that the Industrial Peace Act "refers only to organizations and entities created and operated for profits, engaged in a profitable trade, occupation or industry". It cannot be denied that running a university engages time and attention; that it is an occupation or a business from which the one engaged in it may derive profit or gain. The University is not an industrial establishment in the sense that an industrial establishment is one that is engaged in manufacture or trade where raw materials are changed or fashioned into finished products for use. But for the purposes of the Industrial Peace Act the University is an industrial establishment because it is operated for profit and it employs persons who work to earn a living. The term

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"industry", for the purposes of the application of our labor laws should be given a broad meaning so as to cover all enterprises which are operated for profit and which engage the services of persons who work to earn a living. The word "industry" within State Labor Relations Act controlling labor relations in industry, cover labor conditions in any field of employment where the objective is earning a livelihood on the one side and gaining of a profit on the other. Labor Law Sec. 700 et seq. State Labor Relations Board vs. McChesney, 27 N.Y.S. 2d 866, 868." (Words and Phrases, Permanent Edition, Vol. 21, 1960 edition p. 510). The University urges that even if it were an employer, still there would be no employer-employee relationship between it and the striking members of the Faculty Club because the latter are not employees within the purview of Sec. 2(d) of Republic Act No. 875 but are independent contractors. This claim is untenable. Section 2 (d) of Republic Act No. 875 provides: (d) The term "employee" shall include any employee and shall not be limited to the employee of a particular employer unless the act explicitly states otherwise and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment. This definition is again, like the definition of the term "employer" [Sec. 2(c)], by the use of the term "include", complementary. It embraces not only those who are usually and ordinarily considered employees, but also those who have ceased as employees as a consequence of a labor dispute. The term "employee", furthermore, is not limited to those of a particular employer. As already stated, this Court in the cases of The Angat River Irrigation System, et al. v. Angat River Workers' Union (PLUM), et al., supra, has defined the term "employer" as "one who employs the services of others; one for whom employees work and who pays their wages or salaries. "Correlatively, an employee must be one who is engaged in the service of another; who performs services for another; who works for salary or wages. It is admitted by the University that the striking professors and/or instructors are under contract to teach particular courses and that they are paid for their services. They are, therefore, employees of the University. In support of its claim that the members of the Faculty Club are not employees of the University, the latter cites as authority Francisco's Labor Laws, 2nd ed., p. 3, which states: While the term "workers" as used in a particular statute, has been regarded as limited to those performing physical labor, it has been held to embrace stenographers and bookkeepers. Teachers are not included, however.

It is evident from the above-quoted authority that "teachers" are not to be included among those who perform "physical labor", but it does not mean that they are not employees. We have checked the source of the authority, which is 31 Am. Jur., Sec. 3, p. 835, and the latter cites Huntworth v. Tanner, 87 Wash 670, 152 P. 523, Ann Cas 1917 D 676. A reading of the last case confirms Our view. That teachers are "employees' has been held in a number of cases (Aebli v. Board of Education of City and County of San Francisco, 145 P. 2d 601, 62 Col. App 2.d 706; Lowe & Campbell Sporting Goods Co. v. Tangipahoa Parish School Board, La. App., 15 So. 2d 98, 100; Sister Odelia v. Church of St. Andrew, 263 N. W. 111, 112, 195 Minn. 357, cited in Words and Phrases, Permanent ed., Vol. 14, pp. 806-807). This Court in the Far Eastern University case, supra, considered university instructors as employees and declared Republic Act No. 875 applicable to them in their employment relations with their school. The professors and/or instructors of the University neither ceased to be employees when they struck, for Section 2 of Rep. Act 875 includes among employees any individual whose work has ceased as consequence of, or in connection with a current labor dispute. Striking employees maintain their status as employees of the employer. (Western Cartridge Co. v. NLRB, C.C.A. 7, 139 F2d 855, 858). The contention of the University that the professors and/or instructors are independent contractors, because the University does not exercise control over their work, is likewise untenable. This Court takes judicial notice that a university controls the work of the members of its faculty; that a university prescribes the courses or subjects that professors teach, and when and where to teach; that the professors' work is characterized by regularity and continuity for a fixed duration; that professors are compensated for their services by wages and salaries, rather than by profits; that the professors and/or instructors cannot substitute others to do their work without the consent of the university; and that the professors can be laid off if their work is found not satisfactory. All these indicate that the university has control over their work; and professors are, therefore, employees and not independent contractors. There are authorities in support of this view. The principal consideration in determining whether a workman is an employee or an independent contractor is the right to control the manner of doing the work, and it is not the actual exercise of the right by interfering with the work, but the right to control, which constitutes the test. (Amalgamated Roofing Co. v. Travelers' Ins. Co., 133 N.E. 259, 261, 300 Ill. 487, quoted in Words and Phrases, Permanent ed., Vol. 14, p. 576). Where, under Employers' Liability Act, A was instructed when and where to work . . . he is an employee, and not a contractor, though paid specified sum per square. (Heine v. Hill, Harris & Co., 2 La. App. 384, 390, in Words and Phrases, loc, cit.) . Employees are those who are compensated for their labor or services by wages rather than by profits. (People vs. Distributors Division, Smoked Fish Workers Union Local No. 20377, Sup. 7 N. Y. S. 2d 185, 187 in Words and Phrases, loc, cit.)

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Services of employee or servant, as distinguished from those of a contractor, are usually characterized by regularity and continuity of work for a fixed period or one of indefinite duration, as contrasted with employment to do a single act or a series of isolated acts; by compensation on a fixed salary rather than one regulated by value or amount of work; . . . (Underwood v. Commissioner of Internal Revenue, C.C.A., 56 F. 2d 67, 71 in Words and Phrases, op. cit., p. 579.) Independent contractors can employ others to work and accomplish contemplated result without consent of contractee, while "employee" cannot substitute another in his place without consent of his employer. (Luker Sand & Gravel Co. v. Industrial Commission, 23 P. 2d 225, 82 Utah, 188, in Words and Phrases, Vol. 14, p. 576). Moreover, even if university professors are considered independent contractors, still they would be covered by Rep. Act No. 875. In the case of the Boy Scouts of the Philippines v. Juliana Araos, supra, this Court observed that Republic Act No. 875 was modelled after the Wagner Act, or the National Labor Relations Act, of the United States, and this Act did not exclude "independent contractors" from the orbit of "employees". It was in the subsequent legislation the Labor Management Relation Act (Taft-Harley Act) that "independent contractors" together with agricultural laborers, individuals in domestic service of the home, supervisors, and others were excluded. (See Rothenberg on Labor Relations, 1949, pp. 330-331). It having been shown that the members of the Faculty Club are employees, it follows that they have a right to unionize in accordance with the provisions of Section 3 of the Magna Carta of Labor (Republic Act No. 875) which provides as follows: Sec. 3. Employees' right to self-organization.Employees shall have the right to selforganization and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. . . . We agree with the statement of the lower court, in its order of March 30, 1963 which is sought to be set aside in the instant case, that the right of employees to selforganization is guaranteed by the Constitution, that said right would exist even if Republic Act No. 875 is repealed, and that regardless of whether their employers are engaged in commerce or not. Indeed, it is Our considered view that the members of the faculty or teaching staff of private universities, colleges, and schools in the Philippines, regardless of whether the university, college or school is run for profit or not, are included in the term "employees" as contemplated in Republic Act No. 875 and as such they may organize themselves pursuant to the above-quoted provision of Section 3 of said Act. Certainly, professors, instructors or teachers of private educational institutions who teach to earn a living are entitled to the protection of our labor laws and one such law is Republic Act No. 875.

The contention of the University in the instant case that the members of the Faculty Club can not unionize and the Faculty Club can not exist as a valid labor organization is, therefore, without merit. The record shows that the Faculty Club is a duly 5a registered labor organization and this fact is admitted by counsel for the University. The other issue raised by the University is the validity of the Presidential certification. The University contends that under Section 10 of Republic Act No. 875 the power of the President of the Philippines to certify is subject to the following conditions, namely: (1) that here is a labor dispute, and (2) that said labor dispute exists in an industry that is vital to the national interest. The University maintains that those conditions do not obtain in the instant case. This contention has also no merit. We have previously stated that the University is an establishment or enterprise that is included in the term "industry" and is covered by the provisions of Republic Act No. 875. Now, was there a labor dispute between the University and the Faculty Club? Republic Act No. 875 defines a labor dispute as follows: The term "labor dispute" includes any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment regardless of whether the disputants stand in proximate relation of employer and employees. The test of whether a controversy comes within the definition of "labor dispute" depends on whether the controversy involves or concerns "terms, tenure or condition of employment" or "representation." It is admitted by the University, in the instant case, that on January 14, 1963 the President of the Faculty Club wrote to the President of the University a letter informing the latter of the organization of the Faculty Club as a labor union, duly registered with the Bureau of Labor Relations; that again on January 22, 1963 another letter was sent, to which was attached a list of demands consisting of 26 items, and asking the President of the University to answer within ten days from date of receipt thereof; that the University questioned the right of the Faculty Club to be the exclusive representative of the majority of the employees and asked proof that the Faculty Club had been designated or selected as exclusive representative by the vote of the majority of said employees; that on February 1, 1963 the Faculty Club filed with the Bureau of Labor Relations a notice of strike alleging as reason therefor the refusal of the University to bargain collectively with the representative of the faculty members; that on February 18, 1963 the members of the Faculty Club went on strike and established picket lines in the premises of the University, thereby disrupting the schedule of classes; that on March 1, 1963 the Faculty Club filed Case No. 3666-ULP for unfair labor practice against the University, but which was later dismissed (on April 2, 1963 after Case 41-IPA was certified to the CIR); and that on March 7, 1963 a petition for certification election, Case No. 11836 MC, was filed by the Faculty Club in the CIR. All these admitted facts show that the controversy between the University and the Faculty Club involved terms and

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conditions of employment, and the question of representation. Hence, there was a labor dispute between the University and the Faculty Club, as contemplated by Republic Act No. 875. It having been shown that the University is an institution operated for profit, that is an employer, and that there is an employer-employee relationship, between the University and the members of the Faculty Club, and it having been shown that a labor dispute existed between the University and the Faculty Club, the contention of the University, that the certification made by the President is not only not authorized by Section 10 of Republic Act 875 but is violative thereof, is groundless. Section 10 of Republic Act No. 875 provides: When in the opinion of the President of the Philippines there exists a labor dispute in an industry indispensable to the national interest and when such labor dispute is certified by the President to the Court of Industrial Relations, said Court may cause to be issued a restraining order forbidding the employees to strike or the employer to lockout the employees, and if no other solution to the dispute is found, the Court may issue an order fixing the terms and conditions of employment. This Court had occasion to rule on the application of the above-quoted provision of Section 10 of Republic Act No. 875. In the case of Pampanga Sugar Development Co. v. CIR, et al., G.R. No. L-13178, March 24, 1961, it was held: It thus appears that when in the opinion of the President a labor dispute exists in an industry indispensable to national interest and he certifies it to the Court of Industrial Relations the latter acquires jurisdiction to act thereon in the manner provided by law. Thus the court may take either of the following courses: it may issue an order forbidding the employees to strike or the employer to lockout its employees, or, failing in this, it may issue an order fixing the terms and conditions of employment. It has no other alternative. It can not throw the case out in the assumption that the certification was erroneous. xxx xxx xxx

the jurisdiction is acquired pursuant to the presidential certification, the CIR may exercise its broad powers as provided in Commonwealth Act 103. All phases of the labor dispute and the employer-employee relationship may be threshed out before the CIR, and the CIR may issue such order or orders as may be necessary to make effective the exercise of its jurisdiction. The parties involved in the case may appeal to the Supreme Court from the order or orders thus issued by the CIR. And so, in the instant case, when the President took into consideration that the University "has some 18,000 students and employed approximately 500 faculty members", that `the continued disruption in the operation of the University will necessarily prejudice the thousand of students", and that "the dispute affects the 7 national interest", and certified the dispute to the CIR, it is not for the CIR nor this Court to pass upon the correctness of the reasons of the President in certifying the labor dispute to the CIR. The third issue raised by the University refers to the question of the legality of the return-to-work order (of March 30, 1963 in Case 41-IPA) and the order implementing the same (of April 6, 1963). It alleges that the orders are illegal upon the grounds: (1) that Republic Act No. 875, supplementing Commonwealth Act No. 103, has withdrawn from the CIR the power to issue a return-to-work order; (2) that the only power granted by Section 10 of Republic Act No. 875 to the CIR is to issue an order forbidding the employees to strike or forbidding the employer to lockout the employees, as the case may be, before either contingency had become a fait accompli; (3) that the taking in by the University of replacement professors was valid, and the return-to-work order of March 30, 1963 constituted impairment of the obligation of contracts; and (4) the CIR could not issue said order without having previously determined the legality or illegality of the strike. The contention of the University that Republic Act No. 875 has withdrawn the power of the Court of Industrial Relations to issue a return-to-work order exercised by it under Commonwealth Act No. 103 can not be sustained. When a case is certified by the President to the Court of Industrial Relations, the case thereby comes under the operation of Commonwealth Act No. 103, and the Court may exercise the broad powers and jurisdiction granted to it by said Act. Section 10 of Republic Act No. 875 empowers the Court of Industrial Relations to issue an order "fixing the terms of employment." This clause is broad enough to authorize the Court to order the strikers to return to work and the employer to readmit them. This Court, in the cases of the Philippine Marine Officers Association vs. The Court of Industrial Relations, Compania Maritima, et al.; and Compaia Martima, et al. vs. Philippine Marine Radio Officers Association and CIR, et al., G.R. Nos. L-10095 and L-10115, October 31, 1957, declared: We cannot subscribe to the above contention. We agree with counsel for the Philippine Radio Officers' Association that upon certification by the President under Section 10 of Republic Act 875, the case comes under the operation of

. . . The fact, however, is that because of the strike declared by the members of the minority union which threatens a major industry the President deemed it wise to certify the controversy to the Court of Industrial Relations for adjudication. This is the power that the law gives to the President the propriety of its exercise being a matter that only devolves upon him. The same is not the concern of the industrial court. What matters is that by virtue of the certification made by the President the case was placed under the jurisdiction of said court. (Emphasis supplied) To certify a labor dispute to the CIR is the prerogative of the President under the law, and this Court will not interfere in, much less curtail, the exercise of that prerogative. The jurisdiction of the CIR in a certified case is exclusive (Rizal Cement Co., Inc. v. Rizal Cement Workers Union (FFW), et al., G.R. No. L-12747, July 30, 1960). Once

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Commonwealth Act 103, which enforces compulsory arbitration in cases of labor disputes in industries indispensable to the national interest when the President certifies the case to the Court of Industrial Relations. The evident intention of the law is to empower the Court of Industrial Relations to act in such cases, not only in the manner prescribed under Commonwealth Act 103, but with the same broad powers and jurisdiction granted by that act. If the Court of Industrial Relations is granted authority to find a solution to an industrial dispute and such solution consists in the ordering of employees to return back to work, it cannot be contended that the Court of Industrial Relations does not have the power or jurisdiction to carry that solution into effect. And of what use is its power of conciliation and arbitration if it does not have the power and jurisdiction to carry into effect the solution it has adopted? Lastly, if the said court has the power to fix the terms and conditions of employment, it certainly can order the return of the workers with or without backpay as a term or condition of employment. The foregoing ruling was reiterated by this Court in the case of Hind Sugar Co. v. CIR, et al., G.R. No. L-13364, July 26, 1960. When a case is certified to the CIR by the President of the Philippines pursuant to Section 10 of Republic Act No. 875, the CIR is granted authority to find a solution to the industrial dispute; and the solution which the CIR has found under the authority of the presidential certification and conformable thereto cannot be questioned (Radio Operators Association of the Philippines vs. Philippine Marine Radio Officers Association, et al., L-10112, Nov. 29, 1957, 54 O.G. 3218). Untenable also is the claim of the University that the CIR cannot issue a return-towork order after strike has been declared, it being contended that under Section 10 of Republic Act No. 875 the CIR can only prevent a strike or a lockout when either of this situation had not yet occurred. But in the case of Bisaya Land Transportation Co., Inc. vs. Court of Industrial Relations, et al., No. L-10114, Nov. 26, 1957, 50 O.G. 2518, this Court declared: There is no reason or ground for the contention that Presidential certification of labor dispute to the CIR is limited to the prevention of strikes and lockouts. Even after a strike has been declared where the President believes that public interest demands arbitration and conciliation, the President may certify the ease for that purpose. The practice has been for the Court of Industrial Relations to order the strikers to work, pending the determination of the union demands that impelled the strike . There is nothing in the law to indicate that this practice is abolished." (Emphasis supplied) Likewise untenable is the contention of the University that the taking in by it of replacements was valid and the return-to-work order would be an impairment of its contract with the replacements. As stated by the CIR in its order of March 30, 1963, it was agreed before the hearing of Case 41-IPA on March 23, 1963 that the strikers would return to work under the status quo arrangement and the University would readmit them, and the return-to-work order was a confirmation of that agreement.

This is a declaration of fact by the CIR which we cannot disregard. The faculty members, by striking, have not abandoned their employment but, rather, they have only ceased from their labor (Keith Theatre v. Vachon et al., 187 A. 692). The striking faculty members have not lost their right to go back to their positions, because the declaration of a strike is not a renunciation of their employment and their employee relationship with the University (Rex Taxicab Co. vs. CIR, et al., 40 O.G., No. 13, 138). The employment of replacements was not authorized by the CIR. At most, that was a temporary expedient resorted to by the University, which was subject to the power of the CIR to allow to continue or not. The employment of replacements by the University prior to the issuance of the order of March 30, 1963 did not vest in the replacements a permanent right to the positions they held. Neither could such temporary employment bind the University to retain permanently the replacements. Striking employees maintained their status as employees of the employer (Western Castridge Co. v. National Labor Relations Board, C.C.A. 139 F. 2d 855, 858) ; that employees who took the place of strikers do not displace them as `employees." ' (National Labor Relations Board v. A. Sartorius & Co., C.C.A. 2, 140 F. 2d 203, 206, 207.) It is clear from what has been said that the return-to-work order cannot be considered as an impairment of the contract entered into by petitioner with the replacements. Besides, labor contracts must yield to the common good and such contracts are subject to the special laws on labor unions, collective bargaining, strikes and similar subjects (Article 1700, Civil Code). Likewise unsustainable is the contention of the University that the Court of Industrial Relations could not issue the return-to-work order without having resolved previously the issue of the legality or illegality of the strike, citing as authority therefor the case of Philippine Can Company v. Court of Industrial Relations , G.R. No. L-3021, July 13, 1950. The ruling in said case is not applicable to the case at bar, the facts and circumstances being very different. The Philippine Can Company case, unlike the instant case, did not involve the national interest and it was not certified by the President. In that case the company no longer needed the services of the strikers, nor did it need substitutes for the strikers, because the company was losing, and it was imperative that it lay off such laborers as were not necessary for its operation in order to save the company from bankruptcy. This was the reason of this Court in ruling, in that case, that the legality or illegality of the strike should have been decided first before the issuance of the return-to-work order. The University, in the case before Us, does not claim that it no longer needs the services of professors and/or instructors; neither does it claim that it was imperative for it to lay off the striking professors and instructors because of impending bankruptcy. On the contrary, it was imperative for the University to hire replacements for the strikers. Therefore, the ruling in the Philippine Can case that the legality of the strike should be decided first before the issuance of the return-to-work order does not apply to the case at bar. Besides, as We have adverted to, the return-to-work order of March 30, 1963, now in question,

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was a confirmation of an agreement between the University and the Faculty Club during a prehearing conference on March 23, 1963. The University also maintains that there was no more basis for the claim of the members of the Faculty Club to return to their work, as their individual contracts for teaching had expired on March 25 or 31, 1963, as the case may be, and consequently, there was also no basis for the return-to-work order of the CIR because the contractual relationships having ceased there were no positions to which the members of the Faculty Club could return to. This contention is not well taken. This argument loses sight of the fact that when the professors and instructors struck on February 18, 1963, they continued to be employees of the University for the purposes of the labor controversy notwithstanding the subsequent termination of their teaching contracts, for Section 2(d) of the Industrial Peace Act includes among employees "any individual whose work has ceased a consequence of, or in connection with, any current labor dispute or of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment." The question raised by the University was resolved in a similar case in the United States. In the case of Rapid Roller Co. v. NLRB 126 F. 2d 452, we read: On May 9, 1939 the striking employees, eighty-four in number, offered to the company to return to their employment. The company believing it had not committed any unfair labor practice, refused the employees' offer and claimed the right to employ others to take the place of the strikers, as it might see fit. This constituted discrimination in the hiring and tenure of the striking employees. When the employees went out on a strike because of the unfair labor practice of the company, their status as employees for the purpose of any controversy growing out of that unfair labor practice was fixed. Sec. 2 (3) of the Act. Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 61 S. Ct. 845, 85. L. ed. 1271, 133 A.L.R. 1217. For the purpose of such controversy they remained employees of the company. The company contended that they could not be their employees in any event since the "contract of their employment expired by its own terms on April 23, 1939." In this we think the company is mistaken for the reason we have just pointed out, that the status of the employees on strike became fixed under Sec. 2 (3) of the Act because of the unfair labor practice of the company which caused the strike. The University, furthermore, claims that the information for indirect contempt filed against the officers of the University (Case No. V-30) as well as the order of April 29, 1963 for their arrest were improper, irregular and illegal because (1) the officers of the University had complied in good faith with the return-to-work order and in those cases that they did not, it was due to circumstance beyond their control; (2) the return-towork order and the order implementing the same were illegal; and (3) even assuming that the order was legal, the same was not Yet final because there was a motion to reconsider it.

Again We find no merit in this claim of Petitioner. We have already ruled that the CIR had jurisdiction to issue the order of March 30, 1963 in CIR Case 41-IPA, and the return-to-work provision of that order is valid and legal. Necessarily the order of April 6, 1963 implementing that order of March 30, 1963 was also valid and legal. Section 6 of Commonwealth Act No. 103 empowers the Court of Industrial Relations of any Judge thereof to punish direct and indirect contempts as provided in Rule 64 (now Rule 71) of the Rules of Court, under the same procedure and penalties provided therein. Section 3 of Rule 71 enumerates the acts which would constitute indirect contempt, among which is "disobedience or resistance to lawful writ, process, order, judgment, or command of a court," and the person guilty thereof can be punished after a written charge has been filed and the accused has been given an opportunity to be heard. The last paragraph of said section provides: But nothing in this section shall be so construed as to prevent the court from issuing process to bring the accused party into court, or from holding him in custody pending such proceedings. The provision authorizes the judge to order the arrest of an alleged contemner (Francisco, et al. v. Enriquez, L-7058, March 20, 1954, 94 Phil., 603) and this, apparently, is the provision upon which respondent Judge Bautista relied when he issued the questioned order of arrest. The contention of petitioner that the order of arrest is illegal is unwarranted. The return-to-work order allegedly violated was within the court's jurisdiction to issue. Section 14 of Commonwealth Act No. 103 provides that in cases brought before the Court of Industrial Relations under Section 4 of the Act (referring to strikes and lockouts) the appeal to the Supreme Court from any award, order or decision shall not stay the execution of said award, order or decision sought to be reviewed unless for special reason the court shall order that execution be stayed. Any award, order or decision that is appealed is necessarily not final. Yet under Section 14 of Commonwealth Act No. 103 that award, order or decision, even if not yet final, is executory, and the stay of execution is discretionary with the Court of Industrial Relations. In other words, the Court of Industrial Relations, in cases involving strikes and lockouts, may compel compliance or obedience of its award, order or decision even if the award, order or decision is not yet final because it is appealed, and it follows that any disobedience or non-compliance of the award, order or decision would constitute contempt against the Court of Industrial Relations which the court may punish as provided in the Rules of Court. This power of the Court of Industrial Relations to punish for contempt an act of non-compliance or disobedience of an award, order or decision, even if not yet final, is a special one and is exercised only in cases involving strikes and lockouts. And there is reason for this special power of the industrial court because in the exercise of its jurisdiction over cases involving strikes and lockouts the court has to issue orders or make decisions that are necessary to effect a prompt solution of the labor dispute that caused the strike or the lockout, or to

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effect the prompt creation of a situation that would be most beneficial to the management and the employees, and also to the public even if the solution may be temporary, pending the final determination of the case. Otherwise, if the effectiveness of any order, award, or decision of the industrial court in cases involving strikes and lockouts would be suspended pending appeal then it can happen that the coercive powers of the industrial court in the settlement of the labor disputes in those cases would be rendered useless and nugatory. The University points to Section 6 of Commonwealth Act No. 103 which provides that "Any violation of any order, award, or decision of the Court of Industrial Relations shall after such order, award or decision has become final, conclusive and executory constitute contempt of court," and contends that only the disobedience of orders that are final (meaning one that is not appealed) may be the subject of contempt proceedings. We believe that there is no inconsistency between the abovequoted provision of Section 6 and the provision of Section 14 of Commonwealth Act No. 103. It will be noted that Section 6 speaks of order, award or decision that is executory. By the provision of Section 14 an order, award or decision of the Court of Industrial Relations in cases involving strikes and lockouts are immediately executory, so that a violation of that order would constitute an indirect contempt of court. We believe that the action of the CIR in issuing the order of arrest of April 29, 1963 is also authorized under Section 19 of Commonwealth Act No. 103 which provides as follows: SEC. 19. Implied condition in every contract of employment .In every contract of employment whether verbal or written, it is an implied condition that when any dispute between the employer and the employee or laborer has been submitted to the Court of Industrial Relations for settlement or arbitration pursuant to the provisions of this Act . . . and pending award, or decision by the Court of such dispute . . . the employee or laborer shall not strike or walk out of his employment when so enjoined by the Court after hearing and when public interest so requires, and if he has already done so, that he shall forthwith return to it, upon order of the Court, which shall be issued only after hearing when public interest so requires or when the dispute cannot, in its opinion, be promptly decided or settled; and if the employees or laborers fail to return to work, the Court may authorize the employer to accept other employees or laborers. A condition shall further be implied that while such dispute . . . is pending, the employer shall refrain from accepting other employees or laborers, unless with the express authority of the Court, and shall permit the continuation in the service of his employees or laborers under the last terms and conditions existing before the dispute arose. . . . A violation by the employer or by the employee or laborer of such an order or the implied contractual condition set forth in this section shall constitute contempt of the Court of Industrial Relations and shall be punished by the Court itself in the same manner with the same penalties as in the case of contempt of a Court of First Instance. . . .

We hold that the CIR acted within its jurisdiction when it ordered the arrest of the officers of the University upon a complaint for indirect contempt filed by the Acting Special Prosecutor of the CIR in CIR Case V-30, and that order was valid. Besides those ordered arrested were not yet being punished for contempt; but, having been charged, they were simply ordered arrested to be brought before the Judge to be dealt with according to law. Whether they are guilty of the charge or not is yet to be determined in a proper hearing. Let it be noted that the order of arrest dated April 29, 1963 in CIR Case V-30 is being questioned in Case G.R. No. L-21278 before this Court in a special civil action for certiorari. The University did not appeal from that order. In other words, the only question to be resolved in connection with that order in CIR Case V-30 is whether the CIR had jurisdiction, or had abused its discretion, in issuing that order. We hold that the CIR had jurisdiction to issue that order, and neither did it abuse its discretion when it issued that order. In Case G.R. No. L-21462 the University appealed from the order of Judge Villanueva of the CIR in Case No. 1183-MC, dated April 6, 1963, granting the motion of the Faculty Club to withdraw its petition for certification election, and from the resolution of the CIR en banc, dated June 5, 1963, denying the motion to reconsider said order of April 6, 1963. The ground of the Faculty Club in asking for the withdrawal of that petition for certification election was because the issues involved in that petition were absorbed by the issues in Case 41-IPA. The University opposed the petition for withdrawal, but at the same time it moved for the dismissal of the petition for certification election. It is contended by the University before this Court, in G.R. L-21462, that the issues of employer-employee relationship between the University and the Faculty Club, the alleged status of the Faculty Club as a labor union, its majority representation and designation as bargaining representative in an appropriate unit of the Faculty Club should have been resolved first in Case No. 1183-MC prior to the determination of the issues in Case No. 41-IPA, and, therefore, the motion to withdraw the petition for certification election should not have been granted upon the ground that the issues in the first case were absorbed in the second case. We believe that these contentions of the University in Case G.R. No. L-21462 have been sufficiently covered by the discussion in this decision of the main issues raised in the principal case, which is Case G.R. No. L-21278. After all, the University wanted CIR Case 1183-MC dismissed, and the withdrawal of the petition for certification election had in a way produced the situation desired by the University. After considering the arguments adduced by the University in support of its petition for certiorari by way of appeal in Case G.R. No. L-21278, We hold that the CIR did not commit any error when it granted the withdrawal of the petition for certification election in Case No. 1183-MC. The principal case before the CIR is Case No. 41-IPA

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and all the questions relating to the labor disputes between the University and the Faculty Club may be threshed out, and decided, in that case. In Case G.R. No. L-21500 the University appealed from the order of the CIR of March 30, 1963, issued by Judge Bautista, and from the resolution of the CIR en banc promulgated on June 28, 1963, denying the motion for the reconsideration of that order of March 30, 1963, in CIR Case No. 41-IPA. We have already ruled that the CIR has jurisdiction to issue that order of March 30, 1963, and that order is valid, and We, therefore, hold that the CIR did not err in issuing that order of March 30, 1963 and in issuing the resolution promulgated on June 28, 1963 (although dated May 7, 1963) denying the motion to reconsider that order of March 30, 1963. IN VIEW OF THE FOREGOING, the petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 is dismissed and the writs prayed for therein are denied. The writ of preliminary injunction issued in Case G.R. No. L-21278 is dissolved. The orders and resolutions appealed from, in Cases Nos. L-21462 and L-21500, are affirmed, with costs in these three cases against the petitioner-appellant Feati University. It is so ordered.

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G.R. No. L-26461 November 27, 1968 ASSOCIATED LABOR UNION, petitioner, vs. JUDGE JOSE C. BORROMEO and ANTONIO LUA doing business under the name CEBU HOME & INDUSTRIAL SUPPLY, respondents. CONCEPCION, C.J.: Original action for certiorari and prohibition, with preliminary injunction, to annul writs of preliminary injunction issued in Case No. R-9414 of the Court of First Instance of Cebu, entitled "Cebu Home and Industrial Supply and Antonio Lua vs. Associated Labor Union", and to restrain the Honorable Jose C. Borromeo, as Judge of that Court, from hearing said case. Petitioner herein, Associated Labor Union hereinafter referred to as ALU is a duly registered labor organization. Among the members thereof are employees of Superior Gas and Equipment Company of Cebu, Inc. hereinafter referred to as SUGECO a domestic corporation with offices at Juan Luna Street, Cebu City and a factory plant in Basak, Mandaue, province of Cebu. On January 1, 1965, ALU and SUGECO entered into a collective bargaining contract, effective up to January 1, 1966. Negotiations for the renewal of the contract between ALU and SUGECO were begun prior to the date last mentioned. While said negotiations were going on, late in February, 1966, twelve (12) SUGECO employees resigned from ALU. Thereupon, the negotiations stopped. On March 1, 1966, ALU wrote SUGECO requesting that the twelve (12) resigned employees be not allowed to report for work unless they 1 produced a clearance from ALU; but this request was immediately rejected by SUGECO, upon the ground that it would cause irreparable injury, that the bargaining contract had lapsed already, and that SUGECO could no longer demand said clearance from its employees. SUGECO intimated, however, that, should the twelve (12) men rejoin ALU, negotiations "for the renewal of the collective bargaining contract" could be resumed. On the same date, ALU wrote SUGECO charging that the latter was bargaining in bad faith and that its supervisors had campaigned for the resignation of ALU members, as well as serving notice that, unless these unfair labor practice acts were stopped immediately and a collective bargaining contract between SUGECO and ALU forthwith entered into, the latter would declare a strike and establish the corresponding picket lines "in any place where your business may be found." Counsel for SUGECO replied to the ALU, on March 3, 1966, stating that, with the resignation of the aforementioned ALU members, ALU no longer represented the majority of the SUGECO employees for purposes of negotiation and recognition. On March 4, 1966, ALU struck and picketed the SUGECO plant in Mandaue. The next day, March 5, SUGECO commenced Civil Case No. R-9221 of the Court of First Instance of Cebu, against ALU, to restrain the same from picketing said plant and the SUGECO offices at Cebu City and elsewhere in the Philippines. Forthwith, the Honorable Amador E. Gomez, as Judge of the Court of First Instance of Cebu,

Branch II, caused to be issued, ex parte, the writ of preliminary injunction prayed for by SUGECO. On the same date, ALU preferred, in the Court of Industrial Relations hereinafter referred to as CIR unfair labor practice charges against SUGECO, its general manager, Concepcion Y. Lua hereinafter referred to as Mrs. Lua and its two (2) supervisors, alleging, inter alia, that these respondents had coerced and exerted pressure upon the aforementioned ALU members to resign, as they did resign from ALU, and that their resignations were seized upon by SUGECO to refuse further negotiations with ALU. On April 29, 1966, an acting prosecutor of the CIR filed therein 3 against SUGECO the corresponding complaint for unfair labor practice. Meanwhile, ALU had moved for a reconsideration of the order of Judge Gomez, dated March 5, 1966, sanctioning the issuance of the writ of preliminary injunction against ALU. This motion was later denied by Judge Jose C. Borromeo, who presided Branch 4 IV of the Court of First Instance of Cebu. Hence, on May 9, 1966, ALU instituted Case No. L-25999 of the Supreme Court, for certiorari and prohibition, with preliminary injunction, against Judges Gomez and Borromeo and the SUGECO, and prayed therein that the CFI of Cebu be declared without jurisdiction over the subjectmatter of said Case No. R-9221; that the writ of preliminary injunction therein issued be annulled; that Judges Gomez and Borromeo be directed to dismiss said case; and that, meanwhile, they be ordered to desist from further proceedings in said case, and from enforcing the writ aforementioned. On May 16, 1966, we issued the writ of preliminary injunction sought by ALU in L-25999. Subsequently, or on February 9, 1967, we rendered judgment therein in favor of ALU, annulling the writ of preliminary injunction issued in said Case No. R-9221, on March 5, 1966, directing respondent Judges to dismiss the same, and declaring permanent the writ of preliminary injunction issued by us on May 16, 1966. Soon after the issuance of the latter writ, ALU resumed the picketing of the SUGECO plant in Mandaue. Moreover, it began to picket the house of Mrs. Lua, SUGECO's general manager, and her husband Antonio Lua hereinafter referred to as Mr. Lua at Abellana Street, Cebu City, and the store of the Cebu Home and Industrial Supply hereinafter referred to as Cebu Home at Gonzalez Street, Cebu City. The Cebu Home, which belongs to and is managed by Mr. Lua, deals in general merchandise, among which are oxygen, acetylene and cooking gas produced by SUGECO. On June 21, 1966, Cebu Home and Mr. Lua hereinafter referred to as respondents filed a complaint, docketed as Civil Case No. 9414 of the CFI of Cebu, against ALU, to restrain the latter from picketing the store and residence aforementioned and to recover damages. Thereupon, Judge Borromeo issued an order requiring the ALU to show cause why the writ sought should not be issued. In a memorandum filed on June 25, 1966 and a motion to dismiss dated June 29, 1966, the ALU assailed the Court's jurisdiction to hear the case upon the ground that it had grown out of a labor dispute. This, notwithstanding, on June 30, 1966, Judge Borromeo issued an order the dispositive part of which reads:
2

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WHEREFORE, upon filing of a bond by the petitioners in the amount of P3,000.00 to 6 answer for damages which the respondent may be entitled, let a writ of preliminary injunction be issued, restraining the respondent, its officers, employees, agents or persons acting in its behalf: 1) From picketing the office of the Cebu Home and Industrial Supply in Gonzales Street, Cebu City and the residence of the petitioner Antonio Lua in Abellana Street, Cebu City; 2) From preventing the employees of the petitioners from entering inside or going out the office of the Cebu Home and Industrial Supply and the residence of the petitioner Antonio Lua; 3) From stopping the car, truck or other vehicles entering or going out the office of Cebu Home and Industrial Supply and the residence of Antonio Lua; 4) From preventing the sale and distribution by the petitioners of its merchandise in connection with its business; and 5) From performing acts which cause disturbance of the tranquility and privacy of the petitioner and his family. On July 4, 1966, respondents herein moved to amend the foregoing order so as to broaden its scope. Upon the other hand, on July 6, 1966, ALU sought a reconsideration of said order and the lifting of the writ of preliminary injunction issued on June 30, 1966. Acting upon a motion to amend of respondents herein, Judge Borromeo issued, on July 22, 1966, another order, from which we quote: Considering the evidence presented and the facts stated in the previous order of the Court, it is believed that the petition is justified and that the acts complained of, if not restrained, will render the writ of preliminary injunction ineffective. WHEREFORE, in connection with the writ of preliminary injunction which was previously issued, the respondent union, its members, agents or persons acting in its behalf are hereby restrained: a) From preventing the petitioners, their employees or representatives from unloading their merchandise and other supplies coming from Manila or other places and from hauling them from the waterfront for the purpose of delivering them to the place of the petitioners; b) From preventing the petitioners or their representatives from delivering and loading their empty tanks and other supplies to the boat or other means of transportation for Manila or other places; and c) From preventing, obstructing or molesting the petitioners, their employees or representatives from performing acts in connection with their business.

On July 25, 1966, Judge Borromeo denied ALU's motion to dismiss Case No. R-9414 and to reconsider his order and dissolve the writ of preliminary injunction of June 30, 1966. Thereupon, or on August 26, 1966, ALU commenced the present action for certiorari and prohibition with preliminary injunction, to annul the writs of preliminary injunction issued, on June 30 and July 22, 1966, in Case No. R-9414 and to restrain the lower court from hearing the same. ALU maintains that the lower Court has no jurisdiction over Case No. R-9414 because it had grown out of a labor dispute, is intimately connected with an unfair labor practice case pending before the CIR and involves a strike the injunction against which had already been lifted by the Supreme Court in G.R. No. L7 25999. Moreover, ALU claims that even if the lower court had jurisdiction over Case No. R-9414, the writs of preliminary injunction issued therein are null and void, not only because of said lack of jurisdiction, but, also, because it failed to observe the requirements of Sec. 9(f) of Republic Act No. 875, as well as the provisions of Sec. 9 (d) (5) of the same Act, requiring findings of facts on matters enumerated therein. Upon the other hand, respondents argue that the issue in the lower court does not fall within the jurisdiction of the CIR, there being no employer-employee relationship and "no labor dispute" between the ALU members and Cebu Home; and that, at any rate, the SUGECO products distributed and sold by Cebu Home, came, not from the SUGECO plant in Mandaue, but from other parts of the Philippines. Respondents further deny that the residence of Mr. Lua was being used as a place to store and refill SUGECO gas for resale. Respondents' pretense is untenable. To begin with, Section 5 (a) of Republic Act No. 8 875 vests in the Court of Industrial Relations exclusive jurisdiction over the prevention of any unfair labor practice. Moreover, for an issue "concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment" to partake of the nature of a "labor dispute", it is not necessary that "the disputants stand in the proximate relation of employer and 9 employee." Then, again, in order to apply the provisions of Sec. 9 of Republic Act No. 875, governing the conditions under which "any restraining order" or "temporary or permanent injunction" may issue in any "case involving or growing out of a labor dispute", it is not indispensable that the persons involved in the case be "employees 10 of the same employer", although this is the usual case. Sec. 9, likewise, governs cases involving persons: 1) "who are engaged in the same industry, trade, craft, or occupation"; or 2) "who ... have direct or indirect interests therein", or 3) "who are members of the same or an affiliated organization of employers or employees"; or 4) "when the case involves any conflicting or competing interests in a "labor dispute" (as hereinbefore defined) or "persons participating or interested" therein (as hereinafter defined)". Furthermore, "a person or association shall be held to be a person

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participating or interested in a labor dispute if relief is sought against him or it" and "he or it isengaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirectinterest therein, or is a member, officer, or agent of any association composed in whole or in part of employees or employers 11 engaged in such industry, trade, craft, or occupation." Now, then, there is no dispute regarding the existence of a labor dispute between the ALU and SUGECO-Cebu; that SUGECO's general manager, Mrs. Lua, is the wife of the owner and manager of Cebu Home, Antonio Lua; and that Cebu Home is engaged in the marketing of SUGECO products. It is, likewise, clear that as managing member of the conjugal partnership between him and his wife, Mr. Lua has an interest in the management by Mrs. Lua of the business of SUGECO and in the success or failure of her controversy with the ALU, considering that the result thereof may affect the condition of said conjugal partnership. Similarly, as a distributor of SUGECO products, the Cebu Home has, at least, an indirect interest in the labor dispute between SUGECO and the ALUand in Case No. R-9221. In other words, respondents herein have an indirect interest in said labor dispute, for which reason, we find that Section 9 of Republic Act No. 875 squarely applies to Case No. R-9414. Thus, in Goldfinger v. Feintuch,
12

said provisions, considering that ALU had struck against SUGECO and had announced, as early as March 1, 1966 or three (3) days before it struck its intent to picket "any place where your business may be found" and that SUGECO in Cebu is a sister company of SUGECO elsewhere in the Philippines. For, a similar reason, in American Brake Shoe Co. v. District Lodge 9 of International 14 Association of Machinists, the Supreme Court of Pennsylvania ruled: Where corporate employer had separate plants in Missouri and Pennsylvania, and labor dispute existed atMissouri plant, but not at the Pennsylvania plant, peaceful picketing at Pennsylvania plant by members of union representing employees at Missouri plant was not an unfair labor practice as defined by Labor Management 15 Relations Act.... In the language of the American Jurisprudence:
16

it was held:

Within the limits of peaceful picketing, however, picketing may be carried on not only against the manufacturer but against a non-union product sold by one in unity of interest with the manufacturer who is in the same business for profit. Where a manufacturer pays less than union wages, both it and the retailers who sell its products are in a position to undersell competitors who pay the higher scale, and this may result in unfair reduction of the wages of union members. Concededly the defendant union would be entitled to picket peacefully the plant of the manufacturer. Where the manufacturer disposes of the product through retailers in unity of interest 13 with it, unless the union may follow the product to the place where it is sold and peacefully ask the public to refrain from purchasing it, the union would be deprived of a fair and propermeans of bringing its plea to the attention of the public. Besides, the ALU introduced evidence to the effect that the SUGECO products had been brought to Cebu Home and were being distributed in the latter, as a means to circumvent, defeat or minimize the adverse effects of the picketing conducted in the SUGECO plant and offices in Mandaue and Cebu City respectively by ALU. It is true that respondents averred that said products were purchased by Cebu Home before the strike was declared against SUGECO and that some of said products were obtained from SUGECO in other parts of the country; but, even if true, these circumstances did not place the picketing of the Cebu Home beyond the pale of the aforesaid Section 9 of Republic Act No. 875 because, as distributor of SUGECO products, Cebu Home was engaged in the same trade as SUGECO. Neither does the claim that some SUGECO products marketed by Cebu Home had come, not from the Mandaue plant, but from other parts of the Philippines, detract from the applicability of

It seems now generally agreed that a state cannot either by its common law or by statute prohibit the peaceful picketing of a place of business solely on the ground that the picketing is carried on by persons not employed therein. The United States Supreme Court has held that the constitutional guaranty of free speech is infringed by the judicial policy of a state to forbid peaceful picketing on the ground that it is being conducted by strangers to the employer affected, that is, by persons not in the relation of employer and employee with him. Rules limiting picketing to the occasion of a labor dispute are not offended by the act of a union having a grievance against a manufacturer in picketing a retail establishment in which its products are sold when there is a unity of interest between the manufacturer and the retailer; this is true even when the shopkeeper is the sole person required to run his business. And the right of employees on strike at one plant of an employer to picket another plant of the same employer has been upheld even though some of the employees of the picketed plant as a result refused to work despite a no-strike agreement. Also, a union may picket a retail store selling goods made in a nonunion factory between which and the union there is an industrial dispute, provided there is a unity of interest between the retailer 17 and the manufacturer. Apart from the foregoing, it will be recalled that, prior to the expiration of the collective bargaining contract between ALU and SUGECO, on January 1, 1966, negotiations had started for the renewal of said contract; that during said negotiations, late in February 1966, twelve (12) SUGECO employees resigned from ALU, owing according to charges preferred by ALU and confirmed by a complaint filed by a CIR prosecutor to unfair labor practices allegedly committed by SUGECO and its supervisors who, it was also claimed, had induced and coerced said employees to quit the ALU, which they did; that, thereupon, SUGECO stopped negotiating with ALU alleging that, with the resignation of said twelve (12) members, ALU no longer represented a majority of the SUGECO employees; that on March 4, 1966, ALU declared a strike and picketed the SUGECO plant in Mandaue; that the next day, SUGECO filed Case No. R-9221 of the CFI of Cebu, which forthwith issued a writ of

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preliminary injunction restraining ALU from picketing, not only the plant, but, also, the SUGECO offices elsewhere in the Philippines; that said injunction was dissolved by 18 the Supreme Court on May 16, 1966; and that the premises of respondents herein were not picketed until after our injunction was enforced, subsequently to May 16, 1966. This factual background reveals that, from sometime before January 1, 1966 when negotiations for the renewal of the collective bargaining agreement between 19 SUGECO and ALU were begun to sometime after May 16, 1966, or, at least, from late in February 1966 when the aforementioned unfair labor practices were 20 allegedly committed by SUGECO to sometime before June 21, 1966, there was ample opportunity to store SUGECO products in respondents' premises. There was, therefore, reasonable ground for the ALU to believe or suspect that SUGECO was using said premises to circumvent and blunt the ALU strike and picketing in the SUGECO plant in Mandaue or to defeat or offset the adverse effects of both. Respondent Judge seemed to be of the opinion that, for the subject-matter of Case No. 9414 to be within the exclusive jurisdiction of the CIR, it was necessary to establish, as a fact, the truth of ALU's contention that respondents' premises were being used as an outlet for SUGECO products. Such view suffers from a basic flaw. It overlooks the fact that the jurisdiction of a court or quasi-judicial or administrative organ is determined by the issues raised by the parties, not by their success or failure in proving the allegations in their respective 21 pleadings. Said view would require the reception of proof, as a condition precedent to the assumption of jurisdiction, when precisely jurisdiction must exist before evidence can be taken, since the authority to receive it is in itself an exercise of jurisdiction. Moreover, it fails to consider that, to affect the jurisdiction of said court, or organ, the main requirement is that the issue raised be a genuine one. In other words, the question posed must be one that is material to the right of action 22 or which could affect the result of the dispute or controversy. Such is, manifestly, the nature of ALU's contention in the lower court, which should have, accordingly, granted the motion to dismiss and lifted the writs of preliminary injunction complained of. Finally, respondents herein have not alleged, let alone proved, that the conditions 23 enumerated in Section 9 (d) of Republic Act No. 875, as a prerequisite to an injunction in labor disputes, have been complied with. Such failure is, as has been 24 repeatedly held fatal to the validity of said injunction. WHEREFORE, the orders of respondent Judge dated June 30, and July 22, 1966 and the writs of preliminary injunction issued in accordance therewith are hereby declared null and void ab initio, with costs against respondents herein, the Cebu Home and Industrial Supply and Antonio Lua. It is so ordered.

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G.R. No. L-26461 November 27, 1968 ASSOCIATED LABOR UNION, petitioner, vs. JUDGE JOSE C. BORROMEO and ANTONIO LUA doing business under the name CEBU HOME & INDUSTRIAL SUPPLY, respondents. CONCEPCION, C.J.: Original action for certiorari and prohibition, with preliminary injunction, to annul writs of preliminary injunction issued in Case No. R-9414 of the Court of First Instance of Cebu, entitled "Cebu Home and Industrial Supply and Antonio Lua vs. Associated Labor Union", and to restrain the Honorable Jose C. Borromeo, as Judge of that Court, from hearing said case. Petitioner herein, Associated Labor Union hereinafter referred to as ALU is a duly registered labor organization. Among the members thereof are employees of Superior Gas and Equipment Company of Cebu, Inc. hereinafter referred to as SUGECO a domestic corporation with offices at Juan Luna Street, Cebu City and a factory plant in Basak, Mandaue, province of Cebu. On January 1, 1965, ALU and SUGECO entered into a collective bargaining contract, effective up to January 1, 1966. Negotiations for the renewal of the contract between ALU and SUGECO were begun prior to the date last mentioned. While said negotiations were going on, late in February, 1966, twelve (12) SUGECO employees resigned from ALU. Thereupon, the negotiations stopped. On March 1, 1966, ALU wrote SUGECO requesting that the twelve (12) resigned employees be not allowed to report for work unless they 1 produced a clearance from ALU; but this request was immediately rejected by SUGECO, upon the ground that it would cause irreparable injury, that the bargaining contract had lapsed already, and that SUGECO could no longer demand said clearance from its employees. SUGECO intimated, however, that, should the twelve (12) men rejoin ALU, negotiations "for the renewal of the collective bargaining contract" could be resumed. On the same date, ALU wrote SUGECO charging that the latter was bargaining in bad faith and that its supervisors had campaigned for the resignation of ALU members, as well as serving notice that, unless these unfair labor practice acts were stopped immediately and a collective bargaining contract between SUGECO and ALU forthwith entered into, the latter would declare a strike and establish the corresponding picket lines "in any place where your business may be found." Counsel for SUGECO replied to the ALU, on March 3, 1966, stating that, with the resignation of the aforementioned ALU members, ALU no longer represented the majority of the SUGECO employees for purposes of negotiation and recognition. On March 4, 1966, ALU struck and picketed the SUGECO plant in Mandaue. The next day, March 5, SUGECO commenced Civil Case No. R-9221 of the Court of First Instance of Cebu, against ALU, to restrain the same from picketing said plant and the SUGECO offices at Cebu City and elsewhere in the Philippines. Forthwith, the Honorable Amador E. Gomez, as Judge of the Court of First Instance of Cebu,

Branch II, caused to be issued, ex parte, the writ of preliminary injunction prayed for by SUGECO. On the same date, ALU preferred, in the Court of Industrial Relations hereinafter referred to as CIR unfair labor practice charges against SUGECO, its general manager, Concepcion Y. Lua hereinafter referred to as Mrs. Lua and its two (2) supervisors, alleging, inter alia, that these respondents had coerced and exerted pressure upon the aforementioned ALU members to resign, as they did resign from ALU, and that their resignations were seized upon by SUGECO to refuse further negotiations with ALU. On April 29, 1966, an acting prosecutor of the CIR filed therein 3 against SUGECO the corresponding complaint for unfair labor practice. Meanwhile, ALU had moved for a reconsideration of the order of Judge Gomez, dated March 5, 1966, sanctioning the issuance of the writ of preliminary injunction against ALU. This motion was later denied by Judge Jose C. Borromeo, who presided Branch 4 IV of the Court of First Instance of Cebu. Hence, on May 9, 1966, ALU instituted Case No. L-25999 of the Supreme Court, for certiorari and prohibition, with preliminary injunction, against Judges Gomez and Borromeo and the SUGECO, and prayed therein that the CFI of Cebu be declared without jurisdiction over the subjectmatter of said Case No. R-9221; that the writ of preliminary injunction therein issued be annulled; that Judges Gomez and Borromeo be directed to dismiss said case; and that, meanwhile, they be ordered to desist from further proceedings in said case, and from enforcing the writ aforementioned. On May 16, 1966, we issued the writ of preliminary injunction sought by ALU in L-25999. Subsequently, or on February 9, 1967, we rendered judgment therein in favor of ALU, annulling the writ of preliminary injunction issued in said Case No. R-9221, on March 5, 1966, directing respondent Judges to dismiss the same, and declaring permanent the writ of preliminary injunction issued by us on May 16, 1966. Soon after the issuance of the latter writ, ALU resumed the picketing of the SUGECO plant in Mandaue. Moreover, it began to picket the house of Mrs. Lua, SUGECO's general manager, and her husband Antonio Lua hereinafter referred to as Mr. Lua at Abellana Street, Cebu City, and the store of the Cebu Home and Industrial Supply hereinafter referred to as Cebu Home at Gonzalez Street, Cebu City. The Cebu Home, which belongs to and is managed by Mr. Lua, deals in general merchandise, among which are oxygen, acetylene and cooking gas produced by SUGECO. On June 21, 1966, Cebu Home and Mr. Lua hereinafter referred to as respondents filed a complaint, docketed as Civil Case No. 9414 of the CFI of Cebu, against ALU, to restrain the latter from picketing the store and residence aforementioned and to recover damages. Thereupon, Judge Borromeo issued an order requiring the ALU to show cause why the writ sought should not be issued. In a memorandum filed on June 25, 1966 and a motion to dismiss dated June 29, 1966, the ALU assailed the Court's jurisdiction to hear the case upon the ground that it had grown out of a labor dispute. This, notwithstanding, on June 30, 1966, Judge Borromeo issued an order the dispositive part of which reads:
2

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WHEREFORE, upon filing of a bond by the petitioners in the amount of P3,000.00 to 6 answer for damages which the respondent may be entitled, let a writ of preliminary injunction be issued, restraining the respondent, its officers, employees, agents or persons acting in its behalf: 1) From picketing the office of the Cebu Home and Industrial Supply in Gonzales Street, Cebu City and the residence of the petitioner Antonio Lua in Abellana Street, Cebu City; 2) From preventing the employees of the petitioners from entering inside or going out the office of the Cebu Home and Industrial Supply and the residence of the petitioner Antonio Lua; 3) From stopping the car, truck or other vehicles entering or going out the office of Cebu Home and Industrial Supply and the residence of Antonio Lua; 4) From preventing the sale and distribution by the petitioners of its merchandise in connection with its business; and 5) From performing acts which cause disturbance of the tranquility and privacy of the petitioner and his family. On July 4, 1966, respondents herein moved to amend the foregoing order so as to broaden its scope. Upon the other hand, on July 6, 1966, ALU sought a reconsideration of said order and the lifting of the writ of preliminary injunction issued on June 30, 1966. Acting upon a motion to amend of respondents herein, Judge Borromeo issued, on July 22, 1966, another order, from which we quote: Considering the evidence presented and the facts stated in the previous order of the Court, it is believed that the petition is justified and that the acts complained of, if not restrained, will render the writ of preliminary injunction ineffective. WHEREFORE, in connection with the writ of preliminary injunction which was previously issued, the respondent union, its members, agents or persons acting in its behalf are hereby restrained: a) From preventing the petitioners, their employees or representatives from unloading their merchandise and other supplies coming from Manila or other places and from hauling them from the waterfront for the purpose of delivering them to the place of the petitioners; b) From preventing the petitioners or their representatives from delivering and loading their empty tanks and other supplies to the boat or other means of transportation for Manila or other places; and c) From preventing, obstructing or molesting the petitioners, their employees or representatives from performing acts in connection with their business.

On July 25, 1966, Judge Borromeo denied ALU's motion to dismiss Case No. R-9414 and to reconsider his order and dissolve the writ of preliminary injunction of June 30, 1966. Thereupon, or on August 26, 1966, ALU commenced the present action for certiorari and prohibition with preliminary injunction, to annul the writs of preliminary injunction issued, on June 30 and July 22, 1966, in Case No. R-9414 and to restrain the lower court from hearing the same. ALU maintains that the lower Court has no jurisdiction over Case No. R-9414 because it had grown out of a labor dispute, is intimately connected with an unfair labor practice case pending before the CIR and involves a strike the injunction against which had already been lifted by the Supreme Court in G.R. No. L7 25999. Moreover, ALU claims that even if the lower court had jurisdiction over Case No. R-9414, the writs of preliminary injunction issued therein are null and void, not only because of said lack of jurisdiction, but, also, because it failed to observe the requirements of Sec. 9(f) of Republic Act No. 875, as well as the provisions of Sec. 9 (d) (5) of the same Act, requiring findings of facts on matters enumerated therein. Upon the other hand, respondents argue that the issue in the lower court does not fall within the jurisdiction of the CIR, there being no employer-employee relationship and "no labor dispute" between the ALU members and Cebu Home; and that, at any rate, the SUGECO products distributed and sold by Cebu Home, came, not from the SUGECO plant in Mandaue, but from other parts of the Philippines. Respondents further deny that the residence of Mr. Lua was being used as a place to store and refill SUGECO gas for resale. Respondents' pretense is untenable. To begin with, Section 5 (a) of Republic Act No. 8 875 vests in the Court of Industrial Relations exclusive jurisdiction over the prevention of any unfair labor practice. Moreover, for an issue "concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment" to partake of the nature of a "labor dispute", it is not necessary that "the disputants stand in the proximate relation of employer and 9 employee." Then, again, in order to apply the provisions of Sec. 9 of Republic Act No. 875, governing the conditions under which "any restraining order" or "temporary or permanent injunction" may issue in any "case involving or growing out of a labor dispute", it is not indispensable that the persons involved in the case be "employees 10 of the same employer", although this is the usual case. Sec. 9, likewise, governs cases involving persons: 1) "who are engaged in the same industry, trade, craft, or occupation"; or 2) "who ... have direct or indirect interests therein", or 3) "who are members of the same or an affiliated organization of employers or employees"; or 4) "when the case involves any conflicting or competing interests in a "labor dispute" (as hereinbefore defined) or "persons participating or interested" therein (as hereinafter defined)". Furthermore, "a person or association shall be held to be a person

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participating or interested in a labor dispute if relief is sought against him or it" and "he or it isengaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirectinterest therein, or is a member, officer, or agent of any association composed in whole or in part of employees or employers 11 engaged in such industry, trade, craft, or occupation." Now, then, there is no dispute regarding the existence of a labor dispute between the ALU and SUGECO-Cebu; that SUGECO's general manager, Mrs. Lua, is the wife of the owner and manager of Cebu Home, Antonio Lua; and that Cebu Home is engaged in the marketing of SUGECO products. It is, likewise, clear that as managing member of the conjugal partnership between him and his wife, Mr. Lua has an interest in the management by Mrs. Lua of the business of SUGECO and in the success or failure of her controversy with the ALU, considering that the result thereof may affect the condition of said conjugal partnership. Similarly, as a distributor of SUGECO products, the Cebu Home has, at least, an indirect interest in the labor dispute between SUGECO and the ALUand in Case No. R-9221. In other words, respondents herein have an indirect interest in said labor dispute, for which reason, we find that Section 9 of Republic Act No. 875 squarely applies to Case No. R-9414. Thus, in Goldfinger v. Feintuch,
12

said provisions, considering that ALU had struck against SUGECO and had announced, as early as March 1, 1966 or three (3) days before it struck its intent to picket "any place where your business may be found" and that SUGECO in Cebu is a sister company of SUGECO elsewhere in the Philippines. For, a similar reason, in American Brake Shoe Co. v. District Lodge 9 of International 14 Association of Machinists, the Supreme Court of Pennsylvania ruled: Where corporate employer had separate plants in Missouri and Pennsylvania, and labor dispute existed atMissouri plant, but not at the Pennsylvania plant, peaceful picketing at Pennsylvania plant by members of union representing employees at Missouri plant was not an unfair labor practice as defined by Labor Management 15 Relations Act.... In the language of the American Jurisprudence:
16

it was held:

Within the limits of peaceful picketing, however, picketing may be carried on not only against the manufacturer but against a non-union product sold by one in unity of interest with the manufacturer who is in the same business for profit. Where a manufacturer pays less than union wages, both it and the retailers who sell its products are in a position to undersell competitors who pay the higher scale, and this may result in unfair reduction of the wages of union members. Concededly the defendant union would be entitled to picket peacefully the plant of the manufacturer. Where the manufacturer disposes of the product through retailers in unity of interest 13 with it, unless the union may follow the product to the place where it is sold and peacefully ask the public to refrain from purchasing it, the union would be deprived of a fair and propermeans of bringing its plea to the attention of the public. Besides, the ALU introduced evidence to the effect that the SUGECO products had been brought to Cebu Home and were being distributed in the latter, as a means to circumvent, defeat or minimize the adverse effects of the picketing conducted in the SUGECO plant and offices in Mandaue and Cebu City respectively by ALU. It is true that respondents averred that said products were purchased by Cebu Home before the strike was declared against SUGECO and that some of said products were obtained from SUGECO in other parts of the country; but, even if true, these circumstances did not place the picketing of the Cebu Home beyond the pale of the aforesaid Section 9 of Republic Act No. 875 because, as distributor of SUGECO products, Cebu Home was engaged in the same trade as SUGECO. Neither does the claim that some SUGECO products marketed by Cebu Home had come, not from the Mandaue plant, but from other parts of the Philippines, detract from the applicability of

It seems now generally agreed that a state cannot either by its common law or by statute prohibit the peaceful picketing of a place of business solely on the ground that the picketing is carried on by persons not employed therein. The United States Supreme Court has held that the constitutional guaranty of free speech is infringed by the judicial policy of a state to forbid peaceful picketing on the ground that it is being conducted by strangers to the employer affected, that is, by persons not in the relation of employer and employee with him. Rules limiting picketing to the occasion of a labor dispute are not offended by the act of a union having a grievance against a manufacturer in picketing a retail establishment in which its products are sold when there is a unity of interest between the manufacturer and the retailer; this is true even when the shopkeeper is the sole person required to run his business. And the right of employees on strike at one plant of an employer to picket another plant of the same employer has been upheld even though some of the employees of the picketed plant as a result refused to work despite a no-strike agreement. Also, a union may picket a retail store selling goods made in a nonunion factory between which and the union there is an industrial dispute, provided there is a unity of interest between the retailer 17 and the manufacturer. Apart from the foregoing, it will be recalled that, prior to the expiration of the collective bargaining contract between ALU and SUGECO, on January 1, 1966, negotiations had started for the renewal of said contract; that during said negotiations, late in February 1966, twelve (12) SUGECO employees resigned from ALU, owing according to charges preferred by ALU and confirmed by a complaint filed by a CIR prosecutor to unfair labor practices allegedly committed by SUGECO and its supervisors who, it was also claimed, had induced and coerced said employees to quit the ALU, which they did; that, thereupon, SUGECO stopped negotiating with ALU alleging that, with the resignation of said twelve (12) members, ALU no longer represented a majority of the SUGECO employees; that on March 4, 1966, ALU declared a strike and picketed the SUGECO plant in Mandaue; that the next day, SUGECO filed Case No. R-9221 of the CFI of Cebu, which forthwith issued a writ of

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preliminary injunction restraining ALU from picketing, not only the plant, but, also, the SUGECO offices elsewhere in the Philippines; that said injunction was dissolved by 18 the Supreme Court on May 16, 1966; and that the premises of respondents herein were not picketed until after our injunction was enforced, subsequently to May 16, 1966. This factual background reveals that, from sometime before January 1, 1966 when negotiations for the renewal of the collective bargaining agreement between 19 SUGECO and ALU were begun to sometime after May 16, 1966, or, at least, from late in February 1966 when the aforementioned unfair labor practices were 20 allegedly committed by SUGECO to sometime before June 21, 1966, there was ample opportunity to store SUGECO products in respondents' premises. There was, therefore, reasonable ground for the ALU to believe or suspect that SUGECO was using said premises to circumvent and blunt the ALU strike and picketing in the SUGECO plant in Mandaue or to defeat or offset the adverse effects of both. Respondent Judge seemed to be of the opinion that, for the subject-matter of Case No. 9414 to be within the exclusive jurisdiction of the CIR, it was necessary to establish, as a fact, the truth of ALU's contention that respondents' premises were being used as an outlet for SUGECO products. Such view suffers from a basic flaw. It overlooks the fact that the jurisdiction of a court or quasi-judicial or administrative organ is determined by the issues raised by the parties, not by their success or failure in proving the allegations in their respective 21 pleadings. Said view would require the reception of proof, as a condition precedent to the assumption of jurisdiction, when precisely jurisdiction must exist before evidence can be taken, since the authority to receive it is in itself an exercise of jurisdiction. Moreover, it fails to consider that, to affect the jurisdiction of said court, or organ, the main requirement is that the issue raised be a genuine one. In other words, the question posed must be one that is material to the right of action 22 or which could affect the result of the dispute or controversy. Such is, manifestly, the nature of ALU's contention in the lower court, which should have, accordingly, granted the motion to dismiss and lifted the writs of preliminary injunction complained of. Finally, respondents herein have not alleged, let alone proved, that the conditions 23 enumerated in Section 9 (d) of Republic Act No. 875, as a prerequisite to an injunction in labor disputes, have been complied with. Such failure is, as has been 24 repeatedly held fatal to the validity of said injunction. WHEREFORE, the orders of respondent Judge dated June 30, and July 22, 1966 and the writs of preliminary injunction issued in accordance therewith are hereby declared null and void ab initio, with costs against respondents herein, the Cebu Home and Industrial Supply and Antonio Lua. It is so ordered.

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G.R. No. L-52824 March 16, 88 REYNALDO BAUTISTA, petitioner, vs. HON. AMADO C. INCIONG, in his capacity as Deputy Minister of Labor and ASSOCIATED LABOR UNIONS (ALU), respondents. GUTIERREZ, JR., J.: This is an illegal dismissal case. The respondent Deputy Minister dismissed the complaint of herein petitioner principally on the ground that no employer-employee relationship existed between the petitioner and respondent Associated Labor Unions (ALU). The facts as found by the National Capital Region Director of the then ministry of Labor (MOL) Region IV are as follows: Complainant (petitioner) was employed by ALU as 'Organizer' in 1972 with a starting salary of P250.00 a month. As such he paid his monthly SSS contributions, with the respondent as his employer. On March 15, 1979, He was left in the office of ALU while his other co-organizers were in Cainta, Rizal attending a certification election at Chrysler Philippines, as he was not the organizer assigned in said company. On March 16, 1979, he went on sick leave for ten (10) days. His SSS sickness benefit application form signed by ALU's physician was given to ALU for submission to the SSS. On March 16, 1979, complainant reported back for work upon expiration of his leave but was informed by ALU's Area Vice-President for Luzon of his termination effective March 15, 1979. Hence, this complaint filed on March 28, 1979. On April 18, 1979, however, ALU filed a clearance application to terminate complainant's services effective March 16, 1979 on the ground of abandonment of work. (p. 48, Rollo) Based on these findings, the Director ruled in favor of the petitioner and ordered the respondent Union to reinstate the petitioner to his former position with full backwages and to pay him emergency allowance, 13th month pay and to refund his Mutual Aid Fund Deposit in the amount of P 370.00 Respondent ALU appealed to the Ministry of Labor. On October 23,1979, the respondent Deputy Minister set aside the order of the Director and dismissed the petitioner's complaint for lack of merit. In his order, the Deputy Minister found that the petitioner was merely accomodated by the respondent union after he was dismissed by his former employer sometime in 1972 and that his membership coverage with the SSS which shows that respondent ALU is the one paying the employer's share in the premiums is not conclusive proof that respondent is the petitioner's employer because such payments were performed by the respondent as a favor for all those who were performing full time union activities with it to entitle them to SSS benefits. The Deputy Minister further ruled that the non-existence of an employer-employee relationship between the parties is bolstered by the fact that respondent ALU is not an entity for profit but a duly registered labor union whose sole purpose is the representation of its bona fide organization units where it is certified as such.

In this petition, the petitioner contends that the respondent Deputy minister committed grave abuse of discretion in holding that there was no employer-employee relationship between him and the respondent union so much so that he is not entitled to the benefits that he is praying for. We agree with the petitioner. There is nothing in the records which support the Deputy minister's conclusion that the petitioner is not an employee of respondent ALU. The mere fact that the respondent is a labor union does not mean that it cannot be considered an employer of the persons who work for it. Much less should it be exempted from the very labor laws which it espouses as labor organization. In case of es v. Brotherhood Labor Unity Movement in the Phillipines Zamora, , (147 SCRA 49, 54), we outlined the factors in ascertaining an employer-employee realtionship: In determining the existence of an employer-employee relationship, the elements that are generally considered are the following : (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the so-called 'control test' that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security System, 21 SCRA 492; Mafinco Trading Corp. v. Ople, supra, and Rosario Brothers, Inc. v. Ople, 131 SCRA 72) In the case at bar, the Regional director correctly found that the petitioner was an employee of the respondent union as reflected in the latter's individual payroll sheets and shown by the petitioner's membership with the Social Security System (SSS) and the respondent union's share of remittances in the petitioner's favor. Even more significant, is the respondent union's act of filing a clearance application with the MOL to terminate the petitioner's services. Bautista was selected and hired by the Union. He was paid wages by the Union. ALU had the power to dismiss him as indeed it dismissed him. And definitely, the Union tightly controlled the work of Bautista as one of its organizers. There is absolutely no factual or legal basis got deputy Minister Inciong's decision. We are, thus, constrained to reverse the findings of the respondent Deputy Minister. However, the records show that antipathy and antagonism between the petitioner and the respondent union militate against the former's reinstatement. ALU would not want to have a union organizer whom it does not trust and who could sabotage its efforts to unionize commercial and industrial establishments. Severance pay, therefore, is more proper in order. As we have ruled in the case of Asiaworld Publishing House, Inc. v. Hon. Blas Ople, et al., (G.R. No. 56398, July 23, 1987) quoting the cast of Balaquezon EWTU v. Zamora, (97 SCRA 5,8): It should be underscored that the backwages are being awarded on the basis of equity or in the nature of severance pay. This means that a monetary award is to be

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paid to the employees as an alternative to reinstatement which can no longer be effected in view of the long passage of time or because of the realities of the situation . (Emphasis supplied) WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Deputy Minister is ANNULLED and SET ASIDE. The Order of Regional Director Francisco L. Estrella is REINSTATED and ordered executed but instead of returning the petitioner to his former position, the private respondent is ordered to pay him an amount equal to his backwages for only three years and the separation pay to which he may be entitled as of the end of the three year period under the applicable law or collective bargaining agreement. SO ORDERED.