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G.R. No.


April 25, 1968

LAGUNA TRANSPORTATION EMPLOYEES UNION, et al., petitioners, vs. LAGUNA TRANSPORTATION CO., INC., respondent. The present appeal stemmed from a judgment of the Court of Industrial Relations (CIR), dismissing, after trial on the merits, petitioners' suit for unfair labor practice with reinstatement and back wages. The case started with a complaint, as amended,1 filed by the CIR's prosecutor in behalf of herein petitioners Vicente Marfil, Pedro Alinsod, and Glicerio Artes, alleging that they were dismissed by respondent company [Marfil and Alinsod on June 30, 1958 and Artes on December 28, 1958] because they refused to heed its advice and warning to disaffiliate from petitioner union upon promises of salary increases and promotions, or face dismissal; that petitioner Alinsod, as a dispatcher, was paid only P4 a day because of his militant union activities, while newly appointed dispatchers were given higher pay for being non-union members; and that respondent company refused to reinstate them notwithstanding demands. The petition categorized the foregoing actuations as unfair labor practices proscribed by Section 4 (a), subsections 1, 2, and 4 of Republic Act 875, otherwise known as the Industrial Peace Act. It winds up with the prayer that respondent company be ordered to cease and desist from further committing the acts complained of and to reinstate them with back wages. Traversing the averments of the complaint, respondent denied the unfair labor practice charges, claimed just causes for the dismissal of all the individual petitioners, and as to Artes, the added circumstance of absence of employer-employee relationship. Certain facts are not in dispute. Individual petitioners are all members of the Laguna Transportation Employees Union, their co-petitioner. The union was registered and its Certificate of Registration No. 2091-IP was issued on April 3, 1957. A certificate election was held in April, 1958 at Bian, Laguna to ascertain whether or not the union deserved to be the exclusive bargaining agency for respondent's workers. The votes cast 94 to 37 overwhelmingly repudiated the union.2 Petitioner' evidence is typified by the testimony of petitioner Vicente Marfil which, as petitioners themselves state in their brief, "is representative of the testimonies of the other two petitioners, all three corroborating each other."3Here is Marfil's version: The union, as aforesaid, was registered on April 3, 1957. Respondent company was formally informed of the existence of that union by registered mail. Artemio Mercado, the company's assistant manager, dismissed him because of his membership in the union; his campaigning therefor; his refusal to disaffiliate even with the promise of increase in salary; and his efforts to reorganize the union after the certification election in April, 1958 inspite of the warning given by two officers of respondent company that "something" would happen to him. Respondent company's evidence, upon the other hand, is summarized as follows: Petitioner Vicente Marfil was employed as bus inspector assigned to the Alabang-Paraaque, Rizal line4 and "sometimes when an inspector was sick, he was assigned to the Batangas line."5 His duty was to sign bus tickets. Also, he was to submit inspection reports every day, a duty which, at times, he failed to perform. His working time started at four o'clock in the morning. With his gambling activities which kept him up to two o'clock or two-thirty in the morning, it was no surprise to find him sometimes reporting for work late and drowsy. Instances there were when he checked in for work one to four hours late. Worse, he had been caught sleeping while on duty. These acts having been

reported to respondents by its other bus inspectors, Marfil was investigated, was found really delinquent. Petitioner Pedro Alinsod first worked as a driver with respondent corporation's predecessor, then doing business under the name "Laguna Transportation Company", a partnership. One December 19, 1955, while driving a truck of said partnership, a hold-up occurred, on which occasion he was shot and wounded by highway robbers, by reason of which he was hospitalized and unable to work for about five months. He claimed for, and was paid, workmen's compensation benefits. But his injuries disabled him from resuming his job as driver. Pleading for work, respondent company hired him in 1956 as an assistant dispatcher at the rate of P4 a day. He was separated from service because he was always out of his place of work. The case of petitioner Glicerio Artes is quite different. In or before 1955, his job was that of a bus driver of the defunct partnership "Laguna Transportation Company". When said partnership was incorporated in 1956 into "Laguna Transportation Co., Inc.", Artes was not rehired. And this, because he was too old to be a driver he was already 63 years old at the time he testified at the hearing of this case on March 4, 1960. Contrary to his claim that respondent took him in as dispatcher, he has not been reemployed by said company "in any capacity". In fact, he has not been seen in the company premises since the latter's incorporation in 1956. With the conflicting evidence, a choice was forced upon CIR. Came the decision. CIR Associate Judge Amando C. Bugayong, on December 11, 1963, gave judicial approval to respondent company's stand, directed the dismissal of the case. A move to reconsider was thwarted by CIR en banc upon a 3-2 vote. The majority of CIR judges adopted the statement of Judge Bugayong that "the inevitable conclusion" is that "the preponderance of evidence tends to establish that the separation of herein complainants was for just cause and not due to union affiliation or activity." To show the disconnection of individual petitioners' dismissal and their union activities, the CIR decision appealed from made the following observations: (a) Individual petitioners have previously filed with the CIR three separate suits to recover alleged unpaid salaries, overtime pay, and separation pay against respondent company and four of its incorporators.6 The filing of these suits, despite their dismissal on jurisdictional grounds, CIR says, "militates against the theory relied upon by herein complainants that their alleged dismissal or separation from employment had been due to their union affiliation or activities." (b) The fact that other unionists more prominent than herein individual petitioners, like union president Domingo Antenor or union board member Leonardo Fortunato, are still in the service of the respondent company negates petitioners' claim that they were dismissed for their union activities. (c) Petitioner union's defeat in the certification election held in April, 1958, despite petitioners' "very active" campaign, made the respondent lose any and all motive to interfere with individual petitioners' right to self-organization. And now, to the issues herein involved.

1. Adverting to the conflicting versions, we find no difficulty in saying that there is substantial evidence in the record testimony of witnesses to support the judgment below. As to petitioner Marfil, the evidence was that there were times when he failed to submit his inspection reports; that because he indulged in gambling up to early morning hours, sometimes he reported for work late and drowsy. He had been caught sleeping while on duty. Petitioner Alinsod fared no better. The record bears out the fact that he was always out of his place of work. This is evidence of lack of cooperation, lack of interest in his job. Dismissal on the grounds ranging from absenteeism, inefficiency, laziness, to disobedience has been sanctioned by this Court.7 Habitual drunkenness, giving free admissions in a theatre, negligence, and gossiping on duty are also valid causes for dismissal.8 And so are stubborn behavior, discourtesy and uncooperative service, chasing employee with a piece of wood, sleeping while on duty, and immorality.9 The case of petitioners Marfil and Alinsod easily comes within the broad sweep of the foregoing cases. Petitioner Artes was too old to continue as a driver. This certainly was reason potent enough for respondent company which was then newly incorporated to refuse further his services. A common carrier cannot be compelled to maintain in its employ a driver who is physically unfit to perform his duties. Such a driver is truly a great risk. The life and limb of bus passengers should not be intrusted to the hands of an old man. In truth, respondent's act of eliminating Artes from the service is but in obedience to the legal mandate that "[a] common carrier is bound to carry the passengers safely as far as human care and foresignt can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances."10 Finally, when the CIR found that the petitioner Artes was never rehired "in any capacity" after respondent's incorporation, it brushed aside Artes' claim that he was a traffic dispatcher from 1956 to 1958. Dismissal from such position is his present complaint. Other than the fact that CIR's finding here is firm upon substantial evidence, Artes's testimony on this point actually borders on incredulity, absent any explanation in the record why respondent company should give him that rare privilege to report as "traffic dispatcher" from once to a maximum of four times a week only, as he testified below.11 Not having been rehired, there is thus no employer-employee relationship to speak of. Petitioner Artes cannot be said to have been dismissed from an employment which never existed. This is certainly fatal to his unfair labor practice suit.12 2. Of course, petitioners, in disputing the findings below, submit that their evidence is "more than preponderant" to carry the day or them. But in this review we are not supposed to be guided by the rule of preponderance of evidence; we are not to pass upon the weight of evidence.13 For, a doctrine that has earned respect thru reiteration is that the "[f]indings on the weight of evidence by the Court of Industrial Relations are conclusive,"14 even in the presence of conflicting evidence.15 Our function is thus narrowed down to an inquiry as whether the findings of fact are supported by substantial evidence. If they are, then CIR's judgment must be affirmed.16 Since by substantial evidence valid causes for dismissal exist, then no unfair labor practice may be tagged upon respondent company.17 For the reasons given, the judgment under review is affirmed. Costs against petitioners. So ordered.

G.R. No. L-64693 April 27, 1984 LITA ENTERPRISES, INC., petitioner, vs. SECOND CIVIL CASES DIVISION, INTERMEDIATE APPELLATE COURT, NICASIO M. OCAMPO and FRANCISCA P. GARCIA, respondents. Manuel A. Concordia for petitioner. Nicasio Ocampo for himself and on behalf of his correspondents. ESCOLIN, J.:
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"Ex pacto illicito non oritur actio" [No action arises out of an illicit bargain] is the tune-honored maxim that must be applied to the parties in the case at bar. Having entered into an illegal contract, neither can seek relief from the courts, and each must bear the consequences of his acts. The factual background of this case is undisputed. Sometime in 1966, the spouses Nicasio M. Ocampo and Francisca Garcia, herein private respondents, purchased in installment from the Delta Motor Sales Corporation five (5) Toyota Corona Standard cars to be used as taxicabs. Since they had no franchise to operate taxicabs, they contracted with petitioner Lita Enterprises, Inc., through its representative, Manuel Concordia, for the use of the latter's certificate of public convenience in consideration of an initial payment of P1,000.00 and a monthly rental of P200.00 per taxicab unit. To effectuate Id agreement, the aforesaid cars were registered in the name of petitioner Lita Enterprises, Inc, Possession, however, remained with tile spouses Ocampo who operated and maintained the same under the name Acme Taxi, petitioner's trade name. About a year later, on March 18, 1967, one of said taxicabs driven by their employee, Emeterio Martin, collided with a motorcycle whose driver, one Florante Galvez, died from the head injuries sustained therefrom. A criminal case was eventually filed against the driver Emeterio Martin, while a civil case for damages was instituted by Rosita Sebastian Vda. de Galvez, heir of the victim, against Lita Enterprises, Inc., as registered owner of the taxicab in the latter case, Civil Case No. 72067 of the Court of First Instance of Manila, petitioner Lita Enterprises, Inc. was adjudged liable for damages in the amount of P25,000.00 and P7,000.00 for attorney's fees. This decision having become final, a writ of execution was issued. One of the vehicles of respondent spouses with Engine No. 2R-914472 was levied upon and sold at public auction for 12,150.00 to one Sonnie Cortez, the highest bidder. Another car with Engine No. 2R-915036 was likewise levied upon and sold at public auction for P8,000.00 to a certain Mr. Lopez. Thereafter, in March 1973, respondent Nicasio Ocampo decided to register his taxicabs in his name. He requested the manager of petitioner Lita Enterprises, Inc. to turn over the registration papers to him, but the latter allegedly refused. Hence, he and his wife filed a complaint against Lita Enterprises, Inc., Rosita Sebastian Vda. de Galvez, Visayan Surety & Insurance Co. and the Sheriff of Manila for reconveyance of motor vehicles with damages, docketed as Civil Case No. 90988 of the Court of First Instance of Manila. Trial on the merits ensued and on July 22, 1975, the said court rendered a decision, the dispositive portion of which reads:

WHEREFORE, the complaint is hereby dismissed as far as defendants Rosita Sebastian Vda. de Galvez, Visayan Surety & Insurance Company and the Sheriff of Manila are concerned. Defendant Lita Enterprises, Inc., is ordered to transfer the registration certificate of the three Toyota cars not levied upon with Engine Nos. 2R-230026, 2R-688740 and 2R-585884 [Exhs. A, B, C and D] by executing a deed of conveyance in favor of the plaintiff. Plaintiff is, however, ordered to pay Lita Enterprises, Inc., the rentals in arrears for the certificate of convenience from March 1973 up to May 1973 at the rate of P200 a month per unit for the three cars. (Annex A, Record on Appeal, p. 102-103, Rollo) Petitioner Lita Enterprises, Inc. moved for reconsideration of the decision, but the same was denied by the court a quo on October 27, 1975. (p. 121, Ibid.) On appeal by petitioner, docketed as CA-G.R. No. 59157-R, the Intermediate Appellate Court modified the decision by including as part of its dispositive portion another paragraph, to wit:


In the event the condition of the three Toyota rears will no longer serve the purpose of the deed of conveyance because of their deterioration, or because they are no longer serviceable, or because they are no longer available, then Lita Enterprises, Inc. is ordered to pay the plaintiffs their fair market value as of July 22, 1975. (Annex "D", p. 167, Rollo.) Its first and second motions for reconsideration having been denied, petitioner came to Us, praying that:

1. ... 2. ... after legal proceedings, decision be rendered or resolution be issued, reversing, annulling or amending the decision of public respondent so that: (a) the additional paragraph added by the public respondent to the DECISION of the lower court (CFI) be deleted; (b) that private respondents be declared liable to petitioner for whatever amount the latter has paid or was declared liable (in Civil Case No. 72067) of the Court of First Instance of Manila to Rosita Sebastian Vda. de Galvez, as heir of the victim Florante Galvez, who died as a result ot the gross negligence of private respondents' driver while driving one private respondents' taxicabs. (p. 39, Rollo.) Unquestionably, the parties herein operated under an arrangement, comonly known as the "kabit system", whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government . Abuse of this privilege by the grantees thereof cannot be countenanced. The "kabit system" has been Identified as one of the root causes of the prevalence of graft and corruption in the government transportation offices. In the words of Chief Justice Makalintal, 1 "this is a pernicious system that cannot be too severely condemned. It constitutes an imposition upon the goo faith of the government.

Although not outrightly penalized as a criminal offense, the "kabit system" is invariably recognized as being contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code, It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them. Upon this premise, it was flagrant error on the part of both the trial and appellate courts to have accorded the parties relief from their predicament. Article 1412 of the Civil Code denies them such aid. It provides:

ART. 1412. if the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed; (1) when the fault, is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking. The defect of inexistence of a contract is permanent and incurable, and cannot be cured by ratification or by prescription. As this Court said in Eugenio v. Perdido, 2 "the mere lapse of time cannot give efficacy to contracts that are null void." The principle of in pari delicto is well known not only in this jurisdiction but also in the United States where common law prevails. Under American jurisdiction, the doctrine is stated thus: "The proposition is universal that no action arises, in equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the property agreed to be sold or delivered, or damages for its property agreed to be sold or delivered, or damages for its violation. The rule has sometimes been laid down as though it was equally universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other." 3 Although certain exceptions to the rule are provided by law, We see no cogent reason why the full force of the rule should not be applied in the instant case. WHEREFORE, all proceedings had in Civil Case No. 90988 entitled "Nicasio Ocampo and Francisca P. Garcia, Plaintiffs, versus Lita Enterprises, Inc., et al., Defendants" of the Court of First Instance of Manila and CA-G.R. No. 59157-R entitled "Nicasio Ocampo and Francisca P. Garica, PlaintiffsAppellees, versus Lita Enterprises, Inc., Defendant-Appellant," of the Intermediate Appellate Court, as well as the decisions rendered therein are hereby annuleled and set aside. No costs. SO ORDERED.
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Feranando, C.J., Teehankee, Makasiar, Concepcion, Jr., Guerrero, Abad Santos, De Castro, Melencio-Herrera, Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur. Aquino, J., took no part.

G.R. No. L-4941

July 25, 1952

A. L. AMMEN TRANSPORTATION CO., INC., petitioner, vs. BICOL TRANSPORTATION EMPLOYEES MUTUAL ASSOCIATION and COURT OF INDUSTRIAL RELATIONS,respondents. Manuel O. chan for petitioner. Ojeda and Vilgera for respondent Association. Emiliano C. Tabigne for respondent Court. TUASON, J.: This is an application for certiorari to review and set aside a portion of the decision of the Court of Industrial Relations ordering A.L. Ammen Transportation Co., Inc., "to continue its former practice of allowing check-off to petitioning union whose affiliates have already filed with the management of the respondent company their corresponding authority to make the necessary deductions from their monthly earnings." The facts, not denied, which led to the questioned order are thus stated in respondents' brief: On September 15, 1950, the Undersecretary of Labor certified to this Court that a labor dispute exists "Between the Alatco and its workers numbering 308 who are affiliated to the Bicol Transportation Employees Mutual Aid Association, a legitimate labor organization duly registered in this department under C.A. No 213". The aforesaid by certification the Department of Labor was due to its failure to settle amicably the "Alatco" employees' strike of September 14, 1950 which lasted until September 19, 1950 when the Honorable Presiding Judge of the respondent Court of Industrial Relations ordered the reopening of the business if the "Alatco" and the return of the employees involved in the strike effective September 20, 1950, under the same terms and conditions of employment existing before the strike. In the meantime, the Honorable Presiding Judge of the respondent Court ordered the "Bitemaa" to submit a more detailed partition to embody all unsolved disputes not amicably settled in the conciliation proceedings effected on September 19, 1950; and in compliance therewith a petition dated November 3, 1950, was filed and received by the respondent court on November 9, 1950. After proper hearing and after considering the parties' evidence on record, the respondent Court rendered its decision in Case No. 506-V dated April 26, 1951 embodying the disposition on Demand No. 4 now involved in the present proceedings and quoted in Annex "1" of respondent court's answer. The burden of the petitioner's argument in that the Court of Industrial Relations acted in case of jurisdiction and contrary to law, in that, it is alleged, "there is no law in the Philippines which authorizes the Court of Industrial Relations to compel an employee to practice check-off against his will." The grounds of attack require a statement of the law creating the Court of Industrial Relations and of the rules of pleading and practice provided thereof. Section 4 of Commonwealth Act No. 103 provides that "The court shall take cognizance for purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or to cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of labor or conditions of tenancy of employment, etc." Section 13 provides that "In making an award, order or decision, under the provisions of section four of this Act, the court shall not be restricted to the specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or determination

which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or agricultural disputes." And by section 20 "the court shall act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable." It will be seen at once that these powers are comprehensive. While section 4 specifically speaks of wages, shares or compensation, and while these are the principal sources of industrial and agricultural conflicts, the court's authority is by no means confined to them. "Conditions of tenancy or employment" (Sec. 4) and contingencies too numerous to be conveniently detailed in a statute or thought of in advance had to be met and settled. To settle disputes and prevent crippling strikes and lock-outs; besides the improvements of labor standards, are the paramount objectives of the law, and such conditions and contingencies are the matters envisage by the all-embracing provisions of the aforequoted sections. In consonance with these principles, sick leave, maternity leave, hospitalization, and other principles having no direct relation to wages, shares or compensation, have been regarded without dissent as proper subjects of award. We perceive nothing so peculiar in check-off that it can not be taken cognizance of by the Industrial Court. On the contrary, the practice of deducting dues from wages and payment of the amounts deducted over to the union appears to be more germane to wage fixing than are vacation leave of the defraying of hospitalization expenses by the management. The checkoff is a normal incident of employment is best illustrated by the fact that the same had been the subject of agreement between the parties herein and put into practice, the court's order being no more than that it be continued. Since the order of which that petitioner complains was promulgated, Republic Act No. 602, otherwise known as Minimum Wage Law, has been approved. This enactment confirms in a more explicit fashion the idea that check-off is a legitimate disputes for arbitration. The law goes further in that it makes, we suppose, the practice compulsory on the part of the employer under certain conditions. Section 10 of Republic Act No. 602 provides that. xxx xxx xxx

(b) Wages, including wages which may be paid retroactively for whatever reason, shall be paid directly to the employee to whom they are due, except: xxx xxx xxx

(3) In cases where the right of the employees or his (their) union to check-off has been recognized by the employer or authorized in writing by the individual employees concerned. In may be noted that sub-paragraph (3) consists of two clauses. Our understanding of this provisions, which is none too clear, is that the two clauses are independent to each other, each denoting a separate meaning. In other words, check-off may be enforced with the consent of the employer or by authority in writing by the employees. While the union and the employer agree, the attitude of the employees is immaterial, as provided by the last clause, the employer's consent is unnecessary and its recognition of the right is obligatory. If this were not so, if in any case the employer's conformity were essential, it would have to be concluded that the second clause already provides for such conformity as a condition precedent.

At any rate, Republic Act No. 602 is a clear and signal that check-off is one of the matters affecting labor management relations which the Court of Industrial Relations may include in an award, order or decision. And since the order in question was to be prospective in its operation, the court in banc did not, in our opinion, err in applying the said Act to the present case. On the economic and practical side, petitioner complains that the practice imposes an extra burden on the employer. This alone is no reason for opposing the arrangement, Wage increases, reduction of working hours, sick leave, hospitalization, and other privileges granted to the employed entail diminution of profits and additional duties and obligations to an extent much greater than the inconvenience and the additional expense involved in the adoption of the check-off system. In fact, the circumstances of this case make said adoption more compelling than in ordinary cases. The petitioner is operating in four provinces comprising nearly the whole Bicol region. The employees, the majority of whom are affiliates of the respondent labor union, are scattered in these provinces. It is not difficult to see how much easier and less expensive it is for the company to handle the collection of membership dues than it would be for individual members to make remittances to their union's office, or for the union to send out collector in so wide a territory. The extra work and expense incurred by the company in deducting form its employee's salaries the amounts the employees owe their union are small in comparisons with the savings in time and money by the union and the employees, savings which can not fail to effect increased efficiency and redound to the benefits of the employer itself in the long run. In the adjustment of industrial conflicts concessions have to be made and some rights to be surrendered, or enforced if necessary in the interest of the cancellation and peace. The system of check-off is avowedly primarily for the benefit of the union and only indirectly of the individual laborers. However, the welfare of the labores depends directly upon the preservation and welfare of the union. It is the union which is to be recognized instrumentality and mouthpiece of the laborers. Only through the union can the laborers exercise the right of collective bargaining and enjoy other privileges. Without the union laborers are impotent to protect themselves against "the reaction of conflicting economic changes" and maintain and improve their lot. To protect the interest of the union ought to be concern of arbitration as such as to help the individual laborers. The objection that the respondent labor union's permit to operate as such Commonwealth Act No. 213 had been cancelled has become moot by the fact that said union has been re-registered as an organization in good standing. The petition is denied with costs. Paras, C.J., Pablo, Bengzon, Bautista Angelo, and Labrador, JJ., concur.